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MONTHLY REVIEW o f C r e d it a n d B u s in e s s C o n d it io n s Second Federal Reserve District Federal Reserve Agent Federal Reserve Bank, New York Business Conditions in the United States RODUCTION and prices remained relatively con stant in December while trade and credit showed the usual increases in the holiday season followed by declines in January. P P ro ductio n The index of production in basic industries, after ris ing rapidly since last August, showed a slight recession in December, though production was m aintained at a level near the peak of 1920. The output of pig iron and coal continued to increase, but the production of certain other commodities, particularly of cotton textiles and flour, showed declines. In southern districts the build ing industry continued active and in all parts of the country much new construction was projected. Railroad traffic continued heavier than a year ago, though the seasonal decline in car loadings and the re duction in bad order cars partially relieved freight congestion. Employment at industrial establishments made a fu r ther advance in December, accompanied by wage in creases in certain industries. Some shortage of labor in the eastern districts was still reported, but in the Pacific States a substantial surplus of unskilled labor was indicated. W h o l e sa l e P rices The general level of wholesale prices remained un February 1, 1923 changed in December. Among various groups of com modities the price tendencies of recent months were continued. Prices of farm products, cloth, chemicals and house furnishings registered further increases, while fuel and metal prices continued to decline. D uring January a number of basic commodities ad vanced in price and cotton, rubber and lead rose to the highest points since 1920. T rade Wholesale trade in most reporting lines showed a sea sonal decline in December, but was considerably larger than a year ago. Farm implement dealers, however, reported larger sales than in November, and more than doubled their December 1921 business. Retail sales of reporting stores during December reached the largest volume in the last four years. B a n k C redit Dividend and interest payments and the disburse ment of Government funds in connection with the re demption of Victory notes and W ar Savings certifi cates, together with the usual decline in the demand for currency after the holiday season, were attended by a large increase in the volume of new security issues and by somewhat easier money conditions. Open market commercial paper rates in financial centers which were 414 to 4% per cent, in December declined to 414 to 41/2 per cent, in January. PERCENT. 1919 192.0 192.1 1922 1923 Index of Production in Basic Industries— Combination of 22 Individual Series, Corrected for Seasonal Variation (1919 Average = 100 Per cent.) Prices— Index Numbers of Wholesale Prices, U. S. Bureau of Labor Statistics (1913 Average == 100 Per cent.) M O N T H L Y R E V IE W , F E B R U A R Y 1, 1923 2 enrttoNs 5 IL U O N S OF DOLLARS OF DOLLARS Bank Credit—A ll Federal Reserve Banks Bank Credit—800 Member Banks in Leading Cities Member banks in leading cities reported an increase in demand deposits, an important factor in which was the usual seasonal flow o f funds from country districts to financial centers. W hile the volume o f loans on stocks and bonds decreased in the first two weeks o f January there was a somewhat larger increase in the investments owned by the banks. transfer o f Government balances from New Y ork to make those redemptions. This is a reversal o f the usual experience in the redemption o f Government issues, and arose from the very wide distribution o f V ictory notes and W a r Saving certificates among private holders throughout the country, and also from the earlier redemption or exchange o f large holdings in New Y ork City. Frequently the amount of Government securities redeemed at this center is in excess o f Government receipts, and transfers o f funds to New Y ork are then made to provide fo r that excess. Government transfers during January have thus offset any tendency to easier money attributable to re ceipts from the interior, and changes during the month in the banking situation are to be explained largely by other movements. The m ajor influence making fo r easier money condi tions in this district as well as in the country as a whole has been the usual lowered demand fo r currency and credit on the part o f business follow ing the completion o f holiday and year-end transactions. A second and more tem porary factor has been the creation o f credit through Treasury overdraft at the Reserve Bank fo r a considerable period during which Treasury transfers out o f the district and redemptions here o f V ictory notes and W ar Savings certificates from day to day were in excess o f Treasury credits. A fte r the middle o f January the overdraft at the New Y ork Reserve Bank was gradually reduced and finally extinguished. The result was to withdraw funds from the market and the banks in turn borrowed at the Re serve Bank in substantially equivalent amounts. A t the Federal Reserve Banks the principal change between December 20 and January 24 was a reduction o f $230,000,000 in Federal Reserve note circulation caused by the seasonal decline in currency requirements. Reserves increased $65,000,000 while earning assets de clined $171,000,000. These changes are similar to devel opments during the same period a year ago, although the decline in earning assets was less than last year. Banking Situation In the early weeks o f the year, when holiday and yearend needs for currency and credit have passed, and money has become freer throughout the country through the disbursement o f interest and dividends, it has been customary fo r funds to flow to New Y ork fo r invest ment. The early weeks o f this year offered no exception to this rule, and in the first three weeks the gain to this district on ordinary transactions between Federal R e serve districts settled through the Reserve system ’s gold settlement fund, has amounted to over $100,000,000. Figures by week* have been as follow s: Week ended January 3 ........................................ $12,000,000 Week ended January 10...................................... 69,000,000 Week ended January 17....................................... 17,000,000 Week ended January 24................................. . 5,000,000 T o t a l ............................................................$103,000,000 A n unusual feature of the situation this year, how ever, has been the transfer out o f the district by the Treasury Department o f sums large enough to more than offset the receipts shown above. The occasion fo r these transfers out o f the district is found in a relatively heavier recent redemption o f V ic tory notes and W a r Savings certificates in other parts o f the country than in New Y ork City, and a consequent Money Market W hile dealers ’ offering rates fo r prime bills remained unchanged at 4 per cent., a broad demand developed in January from all quarters. Sales to outside banks were more than double those in the last week o f December, and there was a substantial increase in the volume of business with New Y ork City banks and savings banks. The volume o f new bills offered, on the other hand, con tinued only moderately large, as low rates fo r Stock FE D E R A L R E SE R V E AG EN T A T N E W YO R K Exchange call money encouraged accepting banks to hold their bills rather than to discount them in the open market. O f new bills offered, those drawn against cot ton, grain and silk in foreign trade preponderated. During recent months the estimated amount o f ac ceptances outstanding has gradually increased from $480,000,000 in A pril to $600,000,000 at the close o f the year, which was substantially the amount outstanding at the close of 1921. This advance has accompanied an increase in the value o f the country ?s foreign trade. Commercial paper rates, which had been easing from 4% to 4 y2 per cent, in the latter part o f December, became generally established at the lower level in Janu ary and a considerable amount o f the best grade o f paper was sold at 4^4 per cent., chiefly in the interior. Distribution likewise increased from the small volume o f December. As in the case o f bills, however, dealers found their most active market with outside banks. W hile New Y ork City institutions bought only sparingly at the current rates, a large demand was reported through the Middle W est and on the Pacific Coast. Sup plies of paper were larger in January, partly due to lower rates and partly in accordance with a seasonal tendency. The volume o f commercial paper outstanding fo r 27 dealers, reflecting the small distribution during Decem ber, declined from $734,000,000 on November 30 to $712,000,000 on December 31. Offering rates on outstanding issues o f Treasury cer tificates and notes were practically unchanged during the month. Rates for Stock Exchange call loans declined from a range of 5 to 6 per cent, at the end o f December to 4 per cent, for renewals and to 3y 2 per cent, on some days fo r new loans. Stock market time loans declined from 4% to 4y2 per cent., and some loans fo r short maturities were made as low as 4% per cent. Security Markets Easier money conditions in January resulted in ex ceptionally heavy issues o f new securities o f all descrip tions. The total in the first three weeks o f the month reached approxim ately $726,000,000. New issues were widely diversified, and included some o f the largest in dividual pieces o f financing since the sale o f $230,000,000 Northern Pacific— Great Northern railway refunding bonds early in 1921. The follow ing tabulation shows by classes the leading issues between January 1 and Janu ary 20. Industrial................................................................... Public Utility............................................................. Railroad..................................................................... State and Municipal................................................. Farm Loan................................................................. Foreign....................................................................... $331,400,000 125,800,000 62,000,000 45,600,000 93,000,000 68,200,000 Total.................................................................. $726,000,000 Despite the large amount o f new business the m ajority o f offerings was quickly oversubscribed. Dealers re ported that the process o f distributing issues to investors also made good progress. Figures available from the reporting member banks do not indicate that commercial banks were heavy purchasers. Evidence o f a broad de mand from the general public may be found in the 3 receipt o f 60,000 applications totaling $50,000,000 for an offering o f $15,000,000 made to employees and cus tomers by a public utility concern in New Y ork City. Outstanding bonds were generally quiet and somewhat lower in January after a tem porary upward movement over the end o f the year. A price average o f 40 corpora tion bonds lost about a point after the first week of the month, and Liberty bonds likewise declined slightly. Treasury 4^4s, after tem porarily exceeding par around January 10, declined to a slight discount. The only real weakness, however, appeared in the foreign list, where French, Belgian, and Central European issues broke sharply follow ing the French entrance into the Ruhr. Some South Am erican issues were also heavy. Stocks were steady and only moderately active in Jan uary. Averages o f industrial issues declined slightly from the high points reached late in December and early in January, while those o f railroad issues held practi cally unchanged at December levels. Foreign Exchange Sterling continued strong in January, despite the un settling developments in the reparations situation. A t $4.68 on January 12, the rate was within a cent o f the December maximum. Bearing upon this strength are British foreign trade figures fo r 1922, which show large increases in the exports o f the more important British products as com pared with figures fo r 1921. There was a decrease in the value o f imports o f foods and other products ready fo r consumption, and an increase in the value o f raw materials imported fo r use in manufacture. December figures show a continued decline in British com modity prices. French and Belgian francs, in contrast with sterling, lost about a cent compared with the highest levels o f December, and German marks fell precipitately to over 20,000 to the dollar. E xcept fo r Swedish kronor, which continued to be quoted at a premium, most other E uro pean exchanges ranged somewhat under the highest points touched in December. A feature o f the market was a continuation o f the steady rise in Indian exchange that has been in progress fo r over a year. Since last January rupees have ad vanced from around $0.27% to $0.32. The movement reflects the turning o f the merchandise trade balance in favor o f India during the past year, and has been accompanied also by a resumption o f the movement o f gold and silver to India. Chinese exchanges, which weakened in November and December, tended to be somewhat firmer after the first o f the year. This movement accom panied a recovery in foreign bar silver at New Y ork to around 65y2 cents, com pared with last y e a r’s low point o f 62% cents reached about December 15. London silver prices rose above 3 2 ^ pence, after having touched 3 0% pence in December, the lowest since 1916. Argentine and Brazilian exchanges averaged some what lower in January than in December. The follow ing table arranges the various countries according to the depreciation o f their exchange from par, and shows the changes in rates compared with a month ago and a year ago. M O N T H L Y R E V IE W , F E B R U A R Y 1, 1923 4 Country Jan. 20, 1923 Last Change from Dec. 20, 1922 Change from Jan. 20, 1922 Sweden (Stockholm)....................... Canada............................................. Holland............................................. Japan (Yokohama)......................... Switzerland............. England............................................ Argentina......................................... Spain................................................. Denmark............................... Norway............................................. India................................................. Brazil................................................ France............................................... Belgium............................................ Italy......................... .. . Germany........................................... China (Hong Kong)........................ China (Shanghai)....... ..................... Bar Silver in N. Y . .. .2684 .9894 .3953 .4875 .1867 4.6600 .3704 .1560 .1932 .1867 .3206 .1129 .0650 .0589 .0475 .00004 .5388 .7288 .6588 -.0 0 0 7 -.0 0 1 9 -.0 0 1 7 -.0 0 2 0 -.0 0 1 9 +.0350 -.0 0 5 4 -.0 0 11 -.0 1 21 -.0 0 3 4 + .0118 -.0 0 4 3 -.0 0 9 3 -.0 0 9 0 -.0 0 3 0 -.00006 +.0075 + .0150 -.0 3 1 3 + .0191 + .0425 + .0311 + .0112 -.0 0 7 3 + .4500 + .0356 + .0070 -.0 0 6 3 + .0297 + .0518 -.0 1 1 0 -.0 1 61 -.0 1 8 8 + .0038 -.00496 -.0 1 0 0 -.0 1 0 0 + .0088 Per cent. Change from par + 0.1 —1.1 —1.7 —2.2 —3.3 —4.2 —12.7 —19.2 —27.9 —30.3 -3 4 .1 —65.2 —66.3 —69.5 -7 5 .4 —99.98 * * * Silver exchange basis. Gold Shipments Shipm ents of gold am ounting to $26,440,000 were received in this cou ntry du ring December. Gold exports were $2,7 10 ,0 0 0 and the excess of im ports w as $ 2 3 ,7 3 0 ,000. The excess of im ports over exports d u rin g 19 2 2 was $238 ,29 5,0 0 0 as com pared with $6 6 7 ,357 ,0 0 0 in 1 9 2 1 . The total excess of im ports du ring the past three years has amounted to $1,000,000,000 and since 1 9 1 4 to $1,700,000,000. F ig u re s fo r 19 2 2 as com pared with 1 9 2 1 are shown b y countries in the follow ing table. ence B o ard w as also p ra ctica lly at a standstill, w ith an advance of three-tenths of one p er cent. In the ea rly weeks of Ja n u a r y this b an k ’s index of prices of 20 basic commodities which is computed w eekly again turned upw ard, as cotton, rubber, and lead reached new high levels since 19 20 . Since a y e a r ago there has been a strikin g difference between various index numbers in the extent to which they have reflected the risin g price tendency. The index of 20 basic commodities and B ra d stre e t’s index, which are influenced b y the prices of ra w m aterials rather than m anufactured goods, began to rise a y e a r and a h a lf ago and have made large increases. Th e D epartm ent o f La b o r index, w hich includes the prices of about 400 different articles, a considerable num ber of which are m an u fac tured, was much slower to rise and the extent of the increase has been much smaller. R etail prices in tu rn have been slow to reflect increases in wholesale prices. The tendencies are illustrated in the accom panying chart and the percentages of increase fo r different indices are given below. (1913 = 100) Index Date of Low 20 basic commodities June 1, Bradstreet’s ............ June 1, July 1, Dept, of Labor. . . . Jan. av. Cost of living* Aug. 15, 1921 1921 1921 1922 1922 Low Quotation Present Level 121 115 132 138 155 152 149 154 156 159 Per cent. Increase 26 30 17 13 3 ♦—July 1914 =100. (000 omitted) Imports Exports Country 1921 1922 Denmark......................................... France............................................. Netherlands.................................... Norway........................................... Sweden............................................ England.......................................... Canada........................................... Mexico............................................ Columbia........................................ China and Hong Kong.................. British India................................... All Other......................................... $5,432 190,666 19,893 1,535 66,356 202,091 36,856 5,589 11,942 23,574 32,010 95,304 $17,770 27,043 9,958 8,424 32,886 121,732 10,378 5,913 6,848 8,953 1921 ’ 25,265 * 9,622 1,179 443 $78 21 22,162 4,304 500 3,933 4,445 1,432 Total........................................... $691,248 $275,170 $23,891 $36,875 1922 The latest levels of the various indices are much nearer together in relation to the 1 9 1 3 base than they have been fo r m any months. PERCENT. $2,643 2,914 7,090 Gold exported from the port of N ew Y o rk from J a n u a r y 1 , 1 9 2 3 , up to the close of business on J a n u a r y 23, amounted to $3,59 3,0 0 0 , the bulk of which, $2,168,0 00 , went to India. Gold im ports du rin g the same period at N ew Y o rk amounted to $22,860,000, o f which $11,5 0 0 ,0 0 0 came from Canada. Commodity Prices Changes in Three Price Index Numbers The price index numbers prepared b y the D ep art ment of Labor, D u n ’s, and B ra d stre e t’s, were all in agreem ent in showing no advance du ring Decem ber in the movement of wholesale commodity prices which had been generally u p w a rd fo r about a year. The cost of liv in g index num ber of the N ational In d u strial C on fer Wages Unskilled labor w age rates rose 5 per cent, from 40 cents an hour in October to 4 2 cents in Ja n u a r y , accord ing to reports received from a selected group o f em 5 F E D E R A L R E SE R V E AGENT A T N E W YO R K ployers in this district. The advance occurred during a period when the demand fo r unskilled labor usually diminishes somewhat because o f the curtailment o f roadbuilding, construction work, and other outdoor activities. Unskilled labor wage rates are now about 90 per cent, above the level which prevailed prior to the war and about 15 per cent, above the low point touched in Janu ary a year ago. They are, however, nearly 20 per cent, below the highest rate, which was reached in the fall of 1920. WASE3 ago amounts to 15 per cent., or about 225,000 workers. There are, however, about 200,000 fewer workers in fa c tories than there were in the spring o f 1920 when employment was largest. A considerable proportion of these workers is probably now employed in the build ing trades, garages and service stations, or some o f the occupations from which the factories had drawn many workers during the war and post-war industrial expansion. Recent gains in employment have been quite general among various industries. A m ong the chief increases are those in the metal and machinery trades, and in car building and locomotive shops. More active business is reflected in a larger demand fo r typewriters, cash regis ters, and other office and store supplies and furniture, and in consequent increases in employment in plants producing such goods. Em ploym ent agencies recently report an increased demand for clerical workers. Production Production in basic industries continued during De cember at about the same rate as during the previous month. The chief gain has been in the production o f pig iron, the domestic output o f which is now 5 per cent, above normal as com puted by this bank. Average Weekly Wages of Male Unskilled Labor and Average Earnings of Factory Workers in New York State The diagram on this page shows the recent fluctua tions in unskilled labor wage rates, together with the average weekly earnings o f employees in New Y ork State factories, as reported by the State Department of Labor. Skilled and semi-skilled workers and women workers are included in the factory workers whose wages are shown in the diagram, and the inclusion o f these two classes is largely responsible fo r the different course o f the two curves shown. A tendency fo r employers to use women worker* more largely in the past two years was reflected in a smaller reduction in women ’s wages in 1921, and recently wom en’s wages have been somewhat higher in relation to the 1914 level than the wages o f men. The changes in wages since 1914 are shown by the follow ing table prepared from compilations by the National Industrial Conference Board fo r typical factories. There have been three prim ary factors causing the rapid recovery in iron and steel production during the past y e a r ; first, the unprecedented amount o f new con struction work undertaken, necessitating the use o f large quantities o f structural steel; second, the record output o f automobiles; and third, heavy buying o f equipment by the railroads. These three industries, the building, automobile, and railway equipment industries, used dur ing 1922 roughly one-half o f the cou n try’s iron and steel output. The Iron Age publishes the following esti mates o f the percentages of the y e a r’s output used in different industries. Per cent. Railroads....................................................................... 22 Building......................................................................... 15 Automobiles.................................................................. 10 Oil, Water, Gas, and Mining....................................... 10 Agriculture.................................................................... 4 Tin Plate........................................................................ 4 Exports.......................................................................... 7 All other........................................................................ 28 Total.................................................................. June 1914 June 1920 June 1921 Oct. 1922 Women.......................................................... 100 100 23S 240 184 204 200 208 Total...................................................... 100 240 186 201 Employment The New Y ork State Department o f Labor, in its monthly survey, found an increase o f 15,000 workers, or 1 per cent., in factory employment between November and December. The increase since December a year 100 December j>roduction o f bituminous coal was 46,450,000 net tons or 1,180,000 tons greater than in November and with the exception o f March, the largest fo r any month since December 1920. Total production in 1922 was only 8,000,000 tons below the 1921 figure and m od erate amounts o f coal have been going into storage. E x ports and bunker sales have been smaller than in 1921. Anthracite production during December was slightly larger than in November. The follow ing table shows the production o f basic commodities during the past six months expressed as percentages o f the estimated normal production. M O N T H L Y R E V IE W , F E B R U A R Y 1, 1923 Wholesale Trade (Estimated normal production ■* 100 per cent.) Commodity July Aug. Sept. Oct. Anthracite coal....................... Bituminous coal...................... Pig iron.................................... Steel ingots.............................. Copper, U. S. mine................. Tin deliveries.......................... Zinc*........................................ Crude petroleum..................... Portland cement..................... Wheat flour............................. Meat slaughtered.................... Sugar meltings, U. S. Ports... Cotton consumption............... Wood pulp............................... Tobacco consumption............ Paper (total)*......................... Gasoline................................... Wool consumption5*^.............. 1.4 32 82 79 77 75 60 110 128 142 99 131 84 105 90 93 109 103 1.9 46 61 70 86 77 59 112 121 117 109 144 97 105 103 107 103 126 61 72 68 74 80 92 62 111 123 112 105 110 92 102 99 105 104 121 95 75 83 85 84 103 75 114r 126 109 97 108 95 92 88 109 105 131 *—Seasonal variation not allowed for. e—Estimated data. Nov. 99 Sip 92 88 87 110 75 119p 127 102 98 147 106 91 94 108 111 140 Dec. 96p 85p 105 89 84 95 80 i27 93 i36 95 p—Preliminary. r—Revised. Railway Traffic and Earnings Loadings of all classes o f revenue freight during D e cember were larger than in December o f any previous year and about 25 per cent, above the December 1921 figure. Coal shipments were 47 per cent, above those o f December a year ago. Exclusive o f coal the railroads of the country moved more freight during 1922 than in any previous year, exceeding 1921 figures by 16 per cent., and 1920 figures by 3!/2 per cent. Shipments o f merchandise and miscel laneous freight showed the largest gain, but substantial increases were also made in shipments o f grain, livestock, and other agricultural products. Coal shipments were 7 per cent, less than in 1921 and about 30 per cent, less than in 1920. Increased freight traffic has been reflected in increased railroad earnings. November gross revenue o f carriers operating 85 per cent, o f the total mileage o f the United States was, with the exception o f October 1921 and October 1922, the largest since the fall o f 1920. Net earnings for the 11 m onths’ period ended November 30, 1922, were at an annual rate o f 4 per cent, on the ten tative property valuation, as compared with a rate o f 3.3 per cent, for the year ended December 31, 1921. PER CENT. December sales by representative wholesale dealers in ten principal lines were 20.5 per cent, above those o f December 1921, the largest gain over the corresponding month in the previous year since the spring months o f 1920. The diagram on this page shows a combined index o f wholesale trade in which the figures reported by the ten groups o f dealers have been weighted in accordance with the relative importance o f the commodities handled. Allowance has been made fo r usual seasonal fluctua tions. F o r the year 1922 as a whole the weighted index shows an increase o f 4.2 per cent, over 1921. Gains in the lat ter part o f the year were sufficient to offset the losses sustained in the early months. Due largely to the lower price level, however, 1922 sales were about 20 per cent, below those o f 1919 and about 30 per cent, below those o f 1920. Detailed figures fo r both December sales and annual sales are shown in the follow ing table. DECEMBER SALES (In Percentages) ANNUAL SALES (In Percentages) Commodity 1919 1920 1921 1922 1919 1920 1921 1922 Machine Tools.......... Dry Goods................. 742 212 200 192 205 249 170 114 159 139 196 167 340 108 122 84 147 104 117 94 117 136 98 76 100 100 100 100 100 100 100 100 100 100 100 100 325 153 151 121 171 139 126 123 120 120 116 93 374 209 114 100 124 384 136 105 127 124 162 112 385 202 127 138 119 223 144 106 145 141 134 124 100 100 100 100 100 100 100 100 100 100 100 100 121 112 111 117 107 149 104 112 106 98 91 97 Weighted Average. 174 105 100 121 126 135 100 104 (A) Men’s .............. (B) Women’s ........ W ith the exception o f dry goods all groups o f dealers reported substantial increases in December sales. Sales o f shoes, which have consistently lagged behind those o f last year, gained 16 per cent. Department Store Business Prelim inary reports received from department stores indicate that during the first three weeks o f January the dollar value o f goods sold has continued large under the stimulus o f special sales. Final reports show that December sales were 5 per cent, above those o f December a year ago and were larger than in any previous month. Detailed figures are shown in the follow ing table. DECEMBER NET SALES (In Percentages) STOCK, JAN. 1 Selling Price (In Percentages) 1919 1920 1921 1922 1920 1921 1922 1923 All Department Stores............ Newark.................................. Dollar Sales by Representative Wholesale Dealers in the Second District, Adjusted for Seasonal Variation Bridgeport............................. Elsewhere in 2nd District. . . Apparel Stores.......................... Mail Order Houses................... 97 100 95 92 93 100 113 95 85 181 98 97 107 97 105 109 110 103 92 122 100 100 100 100 100 100 100 100 100 100 105 104 101 111 115 108 105 100 106 135 105 104 102 118 127 127 110 90 97 105 103 100 112 128 133 102 94 105 100 100 100 100 100 100 100 100 100 101 101 94 110 105 95 103 84 111 7 FE D E R A L R E SE R V E AG EN T A T N E W YO R K Mail order sales in December were 35 per cent, larger than in the same month a year ago. They were larger than in December 1920, but less than in 1919. Spring prices fixed b y one of the large mail order houses are on the average 10 per cent, above the prices which were in effect last spring. Type of Store Number of Stores December Sales Per cent. Change in Sales per Store, Dec. 1921 to Dec. 1922 Dec. 1921 Dec. 1922 1919 1920 1921 1922 370 1,627 201 6,931 282 2,241 435 1,665 228 9,399 282 2,767 66 81 92 86 98 86 97 89 103 94 103 104 100 100 100 100 100 100 131 116 108 112 107 103 -f -1— — + — 11.0 13.2 4.6 17.4 6.6 16.2 Total........ 11,652 14,776 83 94 100 114 — 10.2 Shoe................. Business Failures Sales by Department Stores in the Second District and of De partment Stores and Mail Order Houses Throughout the United States. Allowance is made for Seasonal Variation. (1919 Av erage = 100 Per Cent.) Chain Store Sales The final figures fo r holiday sales by chain store or ganizations confirm earlier estimates o f an unusually large Christmas trade. The increases which December sales showed over the sales figures fo r December 1921 ranged from 31 per cent, in the case o f concerns operat ing apparel stores to 3 per cent, in the case o f the cigar stores. In three lines the sales per store were substan tially ahead of those a year ago, and in all o f the cases in which there was a decrease in sales per store there has been considerable expansion in the number o f stores under operation. There is a tendency fo r the sales of new stores to be somewhat smaller than those of stores previously established. In the case o f the shoe stores a further factor in the reduction o f nearly 5 per cent, in the sales per store has been a decline of 8.6 per cent, in the average price per pair o f shoes from $3.36 in Decem ber 1921 to $3.07 in December 1922. There was an in crease in the number o f pairs of shoes sold per store. Percentage of Failures Each Year to the Number of Concerns in Business D uring the year 1922 there were 23,676 business fail ures reported by D u n ’s, with aggregate liabilities o f $624,000,000. W hile the number o f failures was larger than in any previous year the percentage o f failures to the number o f concerns in business was smaller than in many other periods o f business readjustment. Last year there were in the neighborhood o f 2,000,000 business concerns operating in the United States and the number which failed during the year amounted to 1.2 per cent, o f the number in business. This percentage was ex ceeded in 1915, 1896-7, 1893-4, 1884, 1875-8, and 1867. Complete figures are not available previous to 1866. A diagram below shows the percentage o f failures to concerns in business each year since 1866. Over this long term o f years the number o f failures has tended to average close to 1 per cent, o f the concerns in business. In spite o f extensive price and industrial changes, 1922 failures were only moderately above this average figure. A s is shown in a second diagram the course o f failures has been steadily downward during the year. F or a few months early in the year failures were at an annual rate o f about 1.5 per cent, o f the firms in business. B y D e cember the rate was reduced practically to the average normal line o f 1 per cent. The liabilities incurred in failures are quite largely a matter o f the price level, which determines the value of the goods purchased and sold, and inventories main tained. The average liability in 1920 was the highest in recent years and in 1921 and 1922 the average was smaller. Percentage of Failures Each Month to the Number of Concerns in Business, in Terms of Annual Rate, Seasonal Varia tion Allowed For Average Liability of Failures Each Year Compared with Wholesale Commodity Prices N e w Y o r k R e s e r v e B a n k O p e r a tio n s in 1 9 2 2 H E principal expenses o f the Federal Reserve Bank are incurred in carrying out functions prescribed by law, or in perform ing services to member banks and through them to the whole business, agricultural and industrial community, which the legally prescribed functions imply. A bout one-third o f all the banking resources o f the country are within this Federal Reserve district, and the New Y ork Reserve Bank conducts about one-third of the business o f the entire Federal Reserve system. A t the close o f business on December 31, the total personnel o f the New Y ork Reserve Bank, including the Buffalo Branch, numbered 3,043 persons. The expenses for carrying on the work o f the bank, divided according to functions, and with miscellaneous items o f overhead apportioned among the various functions, were as follow s: T 1. M aintaining the A ccounts of the B ank This work included making about 9,420,000 entries a year in the accounts maintained with member and other banks, and the current determination of reserve balances which are required by law ... $219,034 2. S upplying C urrency and C oin Paying Out, R eceiving, and Redeeming Currency, involving the count of about 696,000,000 individual notes during the year............................................... Paying Out and Receiving Coin. This service was formerly performed largely by the Subtreasury, and is now entirely in the hands of the Federal Reserve Bank. Receipts and issues amounted to $186,500,000 for the y ear..................................... Currency and Coin Shipments to and from outof-town banks. There were 215,000 such ship ments in and out during the year............................ Cost or Printing New F ederal Reserve Currency to replace worn notes in circulation and to main tain supplies unissued and on hand, including cost of transportation................................................. T ax on Federal Reserve Bank note circulation, mostly of notes in the $1 and $2 denominations. (Federal Reserve note circulation is not taxed.). S upplying C urrency and $855,913 336,961 558,125 69,374 $307,250 115,377 M aking L o a n s ........................................ $422,627 and C oupons Collection of Cash I tems, mostly checks. The average number collected was 392,715 a day, or 118,600,000 for the year, aggregating $62,300,000,000 ...........................................................................$1,537,067 Collection of N on- cash Items, including drafts, notes, and coupons. The number of items handled during the year was about 1,740,000, aggregating $1,520,000,000 ............................................................. 512,585 C ollecting C hecks , etc. .$2,049,652 5. S upplem entary S ervices Custody of Securities. This service involved hold ing in safekeeping on the average about $700,000,000 of securities for the United States Govern ment, $100,000,000 for the War Finance Cor poration and $200,000,000 from other sources.... Purchase and Sale of Bankers A cceptances and other securities for member banks and foreign 100,242 S u p p le m e n ta r y S e r v ic e s ........................ $418,906 3. M aking L oans 4. C ollecting C hecks , D rafts , N otes, 183,645 T elegraphic T ransfer of F unds. This service is performed over the telegraph wires of the Federal Reserve system, and is used by the Treasury De partment and member banks. It involves making an average of 783 transfers of funds to all parts of the country each day, amounting to about $83,000,000 and aggregating for the year $25,126,000,000 ......................................................................... 173,601 C o in ___ $1,988,974 Making D iscounts and A dvances to M ember B anks. The number of items handled during the year was 60,715, aggregating $9,206,000,000...... P urchasing A cceptances and Government Obliga tions for the account of this bank and other Federal Reserve Banks. The items purchased during the year aggregated $3,750,000,000............ banks amounting for the year to $302,000,000, and receiving and delivering securities for the account of member banks, amounting for the year to about $916,000,000. In addition the bank has acted for the Treasury Department in the pur chase and sale of Government securities................ $135,019 6- S ervices in C o n n e c t io n w i t h G o v e r n m e n t L o an s This work included during 1922 the receipt or de livery of 6,387,000 individual Government bonds, notes, and certificates, amounting to $4,633,000,000, which were exchanged or converted or handled in connection with registration; and the payment of 22,685,000 individual coupons on Government bonds, notes, and certificates. It also involved the sale and issue of 320,000 pieces amounting to $1,922,000,000, and the redemption of 646,000 pieces amounting to $1,451,000,000, of Government bonds, notes, and certificates. Aside from amounts received from the Treasury in partial reimburse ment, the cost of such operations to the bank was $616,859 (In addition to these operations for the Treas ury, the bank performed other work for the Government connected with the currency, the collection of checks, the custody, purchase and sale of securities, the transfer of funds, etc., which have been referred to under their re spective headings.) 7. G e n e r a l o r S u p erviso ry E x p e n se s, not appor tioned among the functions specified a b ove: E xecutive Salaries (Chairman, governor, four deputy governors and secretary of the bank, and manager and cashier of the Buffalo Branch). . . . W ork of the F ederal Reserve A gent, including note issues, examination of member banks, visits to member banks, statistical and information serv ices, such as the preparation of weekly bank statements and the publication of the Monthly Review ......................................................................... M aintaining the General A u d it .......................... D irectors* F ees and Traveling E xpenses............ T his B ank 's Share of the E xpenses of the Federal R eserve B oard............................................. $209,330 365,219 264,971 23,075 197,882 G e n e r a l o r S u p ervisory E x p e n s e s . .$1,060,477 T o t a l .............................................................. $6,776,529 N o t e : This summary is taken from the Annual Statement of the Bank for 1922, which gives also the com parative Statement o f Condition, the Profit and Loss Account, and other inform ation. The statement w ill be mailed on request.
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