View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

MONTHLY REVIEW
of Credit and Business Conditions
S e c o n d
Federal Reserve Agent

F e d e r a l

R e s e r v e

Federal Reserve Bank, New York

Business Conditions in the United States
RO D U C TIO N o f basic commodities in November
continued in about the same volume as the month
before, and the general level of prices remained
unchanged. A ctivity o f wholesale and retail trade was
below the record level of October, but larger than in
November of last year.

P

D is t r ic t

____________________ January 1, 1926

Final estimates by the Department o f A griculture in
1925 indicate that the acreage o f all crops harvested
was slightly larger than in 1924, but that the aggregate
production o f crops was in about the same volume.
Yields of cotton, corn, and tobacco were considerably
larger than last year, while the production o f wheat,
oats, potatoes, and hay was smaller.
T rade

P r o d u c t io n

Output of basic industries included in the Federal
Reserve B oard's index of production was at about the
same rate in November as in October, but owing to a
smaller number of working days the index declined by
about 1 per cent. Increases occurred in average daily
production o f p ig iron, steel ingots, copper, and bitum­
inous coal, and in the consumption o f cotton, while the
production of flour, sugar, and meat products declined.
Automobile production in November was seasonally less
than in October, but continued large fo r this time o f the
year. Employm ent and payrolls in m anufacturing in­
dustries showed small increases in November as com­
pared with October. Em ploym ent and workm en's earn­
ings increased in the machinery industries, while in food
products and tobacco and in the clothing industry there
were seasonal declines.
B uilding contracts awarded
were smaller in November than in October, but were
large when compared with the volume for November o f
previous years.
PER CENT

Sales in leading lines o f wholesale trade showed the
usual decline in November from the seasonally high
levels in October, but continued larger than in the corre­
sponding month o f any o f the past five years. Total
volume o f trade at department stores and mail order
houses was smaller than in October, owing largely to
the smaller number o f business days in November. Com­
pared with earlier years, however, department store
sales were the largest on record fo r November and sales
at mail order houses were the largest fo r that month in
the past six years. Merchandise stocks at department
stores showed considerably more than the usual increase
in November and were 4 per cent larger than in Novem­
ber o f last year. Distribution o f commodities by rail­
roads during November reached new high levels fo r the
month. Movements o f merchandise and miscellaneous
commodities, coal, and coke were larger, while those o f
livestock, grain, and forest products were somewhat
smaller than in November o f the two preceding years.
PERCENT.

1

1

156
W
HOLESALE
PRICES
1913*100

1

1922

Index o f 22 Basic Commodities Corrected for Seasonal Variation
(1919 = 100 Per cent. Latest figure N ovember)




.1 9 2 3

192*

1925

Index of U. S. Bureau of Labor Statistics (1913 = 100 Per
cent, base adopted by Bureau. Latest figure Novem ber)

MONTHLY REVIEW, JANUARY 1, 1926

2

B L N ODLAS
I I S rO R
LO
L

1922

1923

1924

1925

Member Bank Credit
Weekly figures for Member Banks in 101 Leading Cities.
(Latest figures December 16)

Reserve Bank Credit: Weekly figures for 12 Federal Reserve
Banks
(Latest figures December 23)

M on ey M ark et
P r ic e s

Wholesale prices, according to the index of the Bureau
o f Labor Statistics, remained the same in November as
in October. Prices of livestock, meats, and cotton goods
declined, but these decreases were offset in the general
averages by advances in the prices of grains, fuel, lum­
ber, and rubber. In the first three weeks of December
prices of wheat, flour, and hardwood lumber were slightly
higher than in November, while quotations on cattle,
cotton, coke, copper, and hides were lower.
B ank

C r e d it

A t member banks in leading cities the volume of
credit outstanding on December 9 was near the high
level reached early in November. Loans fo r commercial
and agricultural purposes declined somewhat during
the period, and there was also a decrease in the banks’
security holdings; continued growth of loans on securi­
ties, however, was sufficient to offset these reductions
and the total of loans and investments remained prac­
tically unchanged.
A t the Reserve Banks the seasonal demand fo r cur­
rency and credit resulted in an increase of total bills
and securities in December to the highest level in nearly
four years. This increase in Reserve Bank credit in use
has been in the form of discounts for member banks, as
the volume of purchased bills held changed but little
between the middle o f November and the middle of D e­
cember, and holdings of United States securities also
remained constant, except fo r a temporary increase con­
nected with Treasury financing on December 15. Money
in circulation increased by $71,000,000 between Novem­
ber 1 and December 1 and the continued demand for cur­
rency in December was reflected at the Reserve Banks
both in increased Federal Reserve note circulation and
in a decline in cash reserves.




The principal developments affecting the money mar­
ket in this district during December were the currency
requirements of the holiday retail trade, preparations
for the first-of-the-year disbursements, and the usual
Treasury operations over the quarterly tax period. R e­
flecting chiefly the first two influences call money rose
to 5 per cent fo r most o f the month and during the last
few days touched 6 per cent, while the total earning
assets of the New Y ork Reserve Bank averaged substan­
tially above the levels of November.
Government operations throughout the country dur­
ing the month included the redemption o f about
$480,000,000 certificates and notes, paym ent of ap­
proximately $78,000,000 interest on the public debt,
sale of approximately $450,000,000 new 3 % per cent
certificates, and collection of the fourth instalment of
income taxes. In addition, the British Government paid
$92,310,000 in United States securities to this Govern­
ment in discharge o f interest and principal instalments
due on its debt, and small cash payments were made by
Czecho-Slovakia, Belgium, Finland, Poland, H ungary,
and Lithuania.
A s customary at tax payment periods the funds dis­
bursed in this district by the Treasury on the 15th
greatly exceeded collections here and necessitated the
usual temporary advance by the Reserve Bank pending
the collection of tax checks and transfer o f funds from
other districts. Owing, however, to the fact that excess
supplies of funds were partially absorbed by a reduc­
tion in other form s of Reserve Bank assets call money
rates eased only to 4 % per cent, and later reverted to
5 and 6 per cent as tax checks were collected, funds
were withdrawn to other districts, and currency require­
ments continued.
W ith few exceptions, other money rates were gener­
ally steady in December. Over-the-counter rates of rep­
resentative New Y ork City banks averaged somewhat
higher and open market commercial paper appeared
slightly firmer, though rates for prime names continued

FEDERAL RESERVE AGENT AT NEW Y O R K

to be quoted generally at
Per cent. Owing
chiefly to low rates offered borrowers by banks, sup­
plies of paper were reported as continuing small as in
November when outstandings of 26 dealers declined 3
per cent to $666,000,000, a new low point since Decem­
ber 1921. In the bill market firm conditions were
manifest by a continued high level of dealers' portfolios
but rates remained unchanged at 3 % per cent on deal­
ers' purchases of 90-day bills and 3 % per cent on their
sales. Time loans on stock market collateral were also
steady during the month at 4 % to 5 per cent.
The accom panying diagram com paring the present
level of money rates with the trend over the past two
years indicates a steady upward tendency since the low
levels of 1924. That advances have been chiefly in stock
market rates accom panying unusual stock market ac­
tivity is shown by the rise in call loan renewals from
2 per cent to 5 and 6 per cent in contrast with increases
of only about 1^2 Per cent in commercial paper and bills.
RATE.

3

smaller than in previous months, but brought the year's
total of all foreign issues to date to $1,283,000,000, com­
pared with $1,251,000,000 in 1924. The follow ing table
compares by geographical divisions all types of foreign
issues, including refunding loans sold in this market in
1924 and 1925. In the case of the large volume of E uro­
pean securities in 1925, about one-third were of German
origin.
(In millions of dollars)
1924

1925

Europe.............................................................................................
Canada............................................................................................
Latin America................................................................................
Asia and Australia.........................................................................

587
238
235
191

668
244
223
148

Total...........................................................................................

1,251

1,283

Foreign Exchange
A fter falling to $4.8406 on December 1 sterling ex­
change recovered and in the latter part o f the month was
quoted around $4.84% . French francs at 3.58 cents
about the middle of the month reached a new low point
for the present decline. Belgian francs, on the other
hand, continued stabilized at slightly over 4 % cents,
and the lira was steady at about 4.03 cents.
Swedish and Swiss rates rose above par, and Danish
and Norwegian exchanges were steady at about the
levels held since the advance was checked in September.
Under the influence of an im proving trade balance Jap­
anese yen rose to 4 3% cents, the highest since March
1924. Polish exchange, on the other hand, continued
weak, and Canadian exchange declined to a small
discount.

Agreement to Purchase Belgian Bills
Open Market Rates for Commercial Paper, Bankers Acceptances
and Stock Exchange Call Loans by W eeks (Latest figures
week ended December 26)

Security Markets
A fter the sharp decline in stock prices of November
the stock market showed a firmer tendency in Decem­
ber, though with trading somewhat diminished in vol­
ume. Railroad stocks, which had declined but slightly,
were particularly strong and reached new high levels
since 1917, while industrial issues regained most of the
November loss.
In the bond market, corporation securities continued
firmer, and price averages generally reached or ex­
ceeded the high levels fo r recent years touched in June
and July. U. S. Government issues were steady, as was
true o f most foreign issues, except French and Polish
bonds, which declined accom panying weakness in ex­
change.
New security offerings increased during December to
the largest total in recent months, due chiefly to heavier
borrow ing by states and municipalities, an issue of
$35,000,000 Federal Land Bank bonds, and more exten­
sive railway financing. Foreign offerings aggregating
$81,000,000 during the first 28 days of the month were




As an aid to the plans which are in progress fo r im­
proving the monetary position o f Belgium, the Federal
Reserve Bank of New Y ork in association with other
Federal Reserve Banks has indicated its readiness to
cooperate with the Belgian bank of issue, the Banque
Nationale de Belgique, if desired, by purchasing prime
Belgian commercial bills. It is understood that offers
o f cooperation have also been made by the Bank of
England and other European banks of issue.

Gold Movement
Follow ing heavy movements in October and November
gold exports and imports at New Y ork during the first
28 days of December were relatively small.
The
shipment o f $2,000,000 to Argentina and of $1,900,000
to the Straits Settlements accounted for the greater part
o f the exports, while imports, according to prelim inary
figures, were even smaller.
F or November the final figures for the country showed
exports o f $24,400,000, of which $20,000,000 went to
Canada. As imports amounted to $10,500,000, including
$3,000,000 from Japan, $2,900,000 from Canada, and
$2,600,000 from England, there was a net gold loss fo r
the month of $13,900,000. This com pared with a net
import balance fo r October of $22,700,000.

4

M ON THLY REVIEW, JANUARY 1, 1926

Foreign Trade
Im ports of merchandise valued at $378,000,000 in
November were slightly larger than in October and
$82,000,000 above those o f November last year. E x ­
ports, on the other hand, valued at $448,000,000, were
$43,000,000 below those o f October, and $46,000,000
smaller than a year ago.
Figures thus far available on individual commodities
indicated that cotton exports declined over $36,000,000
in November from the high total o f October and were
$25,000,000 below those o f November 1924, while ship­
ments of grains and grain products fell $45,000,000
below a year ago. Im ports o f crude rubber and o f raw
silk continued to be very heavy, and were close to the
highest levels ever attained.

3
300 ------------------—

3 ------------------------

IO
O

--------------------) — ------------------) -----------------------f
INI ©13 DOLLARS

-f ---------------------

>-------------------— :

'

5AV INGS &

\
|)THER T IM E D E P O S IT S IN

''

) ----------

to ta l

ALL.UiAjPTKS -IN1hOO,OOC 1 ,0 0 0
t u a l

/

2
.0
£
b u i :LDIWr $ LOAfi
A5SO CIATIONS'AS$J r r s ^ ^
mi MOO,0 0 0 , 0 0 0

+

.

---------

ACTUAL
//
/
[N 1913 D0LLA

t




j
IN 1913 DOLLARS

/
■

/
/

Growth of Savings
A n increase o f 2 billion dollars, or 9 per cent, in the
volume o f savings deposits of this country was reported
by the Savings Bank Division o f the Am erican Bankers
Association fo r the year ended June 30, 1925. This
carried forw ard a rate of growth which has been re­
markably uniform during the past twenty-five years,
despite fluctuations in business conditions, extent o f em­
ploym ent, wage and salary rates, and cost o f living,
which ordinarily might be expected to affect the growth
o f savings.
W hile these changes in conditions appear to have had
little effect on the growth of savings deposits, they have
had an important influence on the significance o f sav­
ings deposits. A dollar on deposit today is very d if­
ferent from a dollar on deposit a few years ago, largely
because of changes in the cost o f living. Between 1913
and 1920 the cost o f living more than doubled, which
means that in 1920 a dollar in savings deposits would
buy only about 50 per cent as much as a dollar in 1913.
A t the present time the cost o f living is approxim ately 75
per cent above 1913, so that the present dollar in sav­
ings deposits has only about 57 per cent o f the pur­
chasing power o f the 1913 dollar.
In an effort to estimate approxim ately the actual pur­
chasing power of savings at different periods this bank
has taken savings and time deposits of all banks, and
assets o f building and loan and life insurance companies
and reduced them as nearly as possible to 1913 dollars.
The actual and adjusted figures are shown in the ac­
com panying diagram. W hile savings may take other
forms not so readily measurable, such as investment in
securities (particularly in the period when Liberty
bonds were being bough t), nevertheless the figures given
illustrate in a rough sort of way fo r the available data
the difference between nominal and real savings, par­
ticularly in the past ten years.
A further noteworthy indication of the figures is the
rather general correspondence shown between the gen­
eral trend of growth of real savings and of business as
represented by figures fo r bank clearings outside o f
New York, which have also been adjusted to make allow­
ance fo r changes in prices.

/

........ X
/

rU AL
/

____ ___

s

“ ‘

—

:

SCALE FOR
CLEARINGS
IN BILLION
j

~

I

CL EAR1NG5
IN 1 9 )3 DOLLARS

o u t s id e

/

1900

-

LIFE INSURA I1
*<CE.
N P A N I E S 'A S t SETS
IN # 1 ,0 0 0 ,0 0 0 ,0 OO

i

1905

1910

1915

1920

1925

Growth of Various Forms of Personal Savings,
Actual and in 1913 Dollars

Employment and Wages
W hile there was a seasonal slackening o f outdoor
work in this district in November and early December,
the volume o f factory employment showed a further
increase notwithstanding that small reductions fre ­
quently occur at this season. A pproxim ately 8,500 work­
ers were added to payrolls, which brought the total
number reported by the New Y ork State Department o f
Labor as employed in the middle o f November to 6 per
cent above the summer low point and 3y% per cent over
last year.
No important wage changes were reported in the dis­
trict during the month, but demands o f the New Y ork
City building trades unions fo r an advance from $10.50
to $12.00 a day at the end o f this year were submitted
to arbitration. Owing to fuller employment, however,
average weekly earnings o f factory workers reported
by the State Department o f Labor advanced slightly
to $28.67. A s shown by the diagram on page 5, earn­
ings are now close to the 1920 high level, while living
costs, despite a moderate rise in the past year, are still
considerably below this level. Factory office salaries,
which advanced much more slowly than wages or the cost
o f living as com puted by the United States Department
o f Labor up to 1920, continued to rise during the past
year to the highest level yet reached.

FEDERAL RESERVE AGENT A T NEW Y O R K

Due partly to the stoppage o f anthracite mining,
bituminous coal production rose further in November to
10 per cent above the com puted trend, and early in
December reached highest levels since 1920. Output of
beehive coke was likewise heavy and much above the
levels o f last year.
Cotton consumption in November, amounting to
543,000 bales, held close to the October figure, contrary
to the usual seasonal tendency, with the result that this
ban k ’s index rose further to 95 per cent o f the computed
trend, the highest since last A pril. The index of woolen
mill activity likewise increased, and silk consumption
remained at high levels.
In the automobile industry, production o f passenger
cars and trucks fell below the high October figures, but
remained unusually large for this season.
Changes in Average W eekly Earnings of Factory Operatives and
Factory Office Workers in New York State and the Cost of
Living in the United States. (1914 =r 100 Per cent.)

Production
The expansion of industrial activity in progress since
mid-summer continued in many lines in November.
The daily rate of iron and steel production increased
3 and 8 per cent, and unfilled orders of the Steel Cor­
poration rose 470,000 tons to a level 1,100,000 tons above
the summer low point. D uring December 3 addi­
tional furnaces were put in blast and steel operations
indicated a total output fo r the year in excess of
44,000,000 tons, compared with 43,600,000, the previous
high level reached in 1917.
(Computed trend of past years =100 per cent)
1924

1925

Nov.

Sept.

Oct.

Nov.

76
90
89
107
124
97
118
100
87
98
123
101
81
102

84
105
100
103
105
110
124
100
85
88
131
106
71
122

89
104
106
104
101
113
119
103
91
94
126
llOr
79
136

89
110
IlOp
105
118
111

104
108
96
110
112
90
101
69
93
118
125
107
96
92
82
110
112
104

102
107
94
113
141
100
105
80
108
130
134
114
85
105
**
126
117
163

109
117
95
102
122
95
115
71
106
132
116
118
87
99r
**
169
179
128

Indexes of Business Activity
Trade and business activity was generally maintained
at a high level in November, though gains were not as
marked in all cases as in October. E xcept in New Y ork
City indexes of bank debits declined, and indexes o f re­
tail trade were also below the high levels of October.
F or New Y ork City alone the index o f bank debits
showed an increase. November railway traffic was like­
wise heavier than usual and in the first weeks of Decem­
ber exceeded a m illion cars fo r the first time in any
December, due chiefly to heavy loadings o f manufac­
tured products and higher figures on coal and grain.
The follow ing table gives this ban k ’s indexes of busi­
ness activity in percentages o f the com puted trend,
after allowing fo r seasonal variation and, where neces­
sary, fo r estimated price changes.
________________ (Computed trend of past years=100 per cent)

Producers' Goods

Pig iron......................................................
Steel ingots................................................
Bituminous coal.......................................
Copper, U. S. mines.................................
Tin deliveries............................................
Zinc.............................................
...
Petroleum..................................................
Gas and fuel oil.........................................
Cotton consumption.................................
Woolen Mill activity*............................
Cement......................................................
Lumber......................................................
Leather, sole..............................................
Silk consumption*....................................
Consumers' Goods

Cattle slaughtered....................................
Calves slaughtered...................................
Sheep slaughtered.....................................
Hogs slaughtered......................................
Sugar meltings, U. S. ports.....................
Wheat flour...............................................
Cigars........................................................
Cigarettes..................................................
Tobacco, manufactured...........................
Gasoline.....................................................
Tires...........................................................
Newsprint..................................................
Paper, total...............................................
Boots and shoes........................................
Anthracite coal.........................................
Automobile, all.........................................
Automobile, passenger.............................
Automobile, truck....................................
*=Seasona1 variation not allowed for.
p=Preliminary
r=Revised




**= Strike

95
97p
122
105p
i2i
93
104
89
85
99
83
105
71
96
iio
90
89p
**
182
175
130

_______
1925

1924
Nov.

Sept.

Oct.

Nov.

105
103
95
102
101
119
106

106
96
90
95
118
89
93

103
94
93
95
118
48
85

106
104
91
86v
120p

101
104
111
107
103
99
96

102
94
116
122
112
105
95

106
99
128
116
113p
106
100

99
99
116
112
i09
102

104
117
100

110
122
105

112
121
110

111
125
107

94
106

99
122

102
123

103
125

238
94
100
96
102
136

210
103
110
100
97
160

307
104
113
100
97
178

279
99

Primary Distribution

Car loadings, merchandise and misc......
Car loadings, other...................................
Wholesale trade, Second District...........
Exports......................................................
Imports......................................................
Grain exports............................................
Panama Canal traffic...............................
Distribution to Consumer

Department store sales, Second Dist.. . .
Chain store sales.......................................
Mail order sales........................................
Life insurance paid for.............................
Real estate transfers.................................
Magazine advertising...............................
Newspaper advertising............................
General Business Activity

Bank debits, outside of New York City.
Bank debits, New York City..................
Bank debits, 2nd Dist. excl. N. Y. C.. . .
Velocity of bank deposits, outside of
New York City.....................................
Velocity of bank deposits, N .Y . C ....
Shares sold on New York Stock Ex­
change*..............................................
Postal receipts..........................................
Electric power.......................................
Employment, N. Y. State factories.......
Business failures.......................................
Building permits.......................................
*=Seasonal variation not allowed for

f>=Preliminary

ioo
102
166p

MONTHLY REVIEW, JANUARY 1, 1926

6

Building
New building undertakings in November showed a
seasonal decline from October, but were approximately
25 per cent larger than in November a year ago, ac­
cording to the F. W . Dodge Corporation's reports of
contracts awarded and S. W . Straus & C o.'s figures of
permits issued. F or the year to date both records in­
dicate a volume of construction already far in excess
of the whole of last year, with the probability that final
figures for the year will reach if not considerably ex­
ceed six billion dollars.
Contrary to the situation at the beginning o f the year
building continues to expand rapidly in New Y ork City.
Since mid-year contracts in this city have been running
much above 1924 and in November a gain of 53 per cent
brought the total for the eleven months in this city 9
per cent above the corresponding period of 1924. W hile
this increase here contributed very largely to the high
figures for the country, it is noteworthy that substantial
gains continued to be reported in some other sections,
including New England, the southeastern states, and the
central west.
In the Pittsburgh, northwestern, and
middle A tlantic states, on the other hand, November
contracts fell below last year.
The follow ing diagram shows the widespread charac­
ter of building increases during the past year, and in­
dicates also the character o f .the construction. Residen­
tial building continues to lead all other types and in
November amounted to 52 per cent of the total, com­
pared with 50 in November a year ago.
5,311

5,311

4:151

4,151

at Chicago was 50 cents lower than a year ago, while
spot cotton in New Y ork at 19.15 cents reached the low­
est price since A p ril 1922. Later in the month, how­
ever, there was some recovery in prices and wheat
reached new high levels fo r the season.
The accom panying diagram shows through December
19 the movement of this bank's weekly index o f A m eri­
can prices, together with changes in an index for British
prices, which during the past year has declined steadily
to the lowest point since 1922.
PERCENT.

175

v 'H
150

V

100

\

J NFBMR PWJN U A&E O -N/-DOA-FBM-ARM JNUAGE OT O-D A- E- /K-ARYU J L USP C O EJN E- A P- A U- L U-SP C- V E
T
R Y JN C
19.24

1925

Price Indexes of 20 Basic Commodities in the United States
and in England. 1913 := 100 Per cent.
(Latest
figures December 19)

D uring November this bank's index o f the general
price level, including rents and wages, as well as whole­
sale and retail prices, remained unchanged from October
at 187 per cent of the 1913 level, com pared with 182 per
cent in November 1924.

3,691

BSO
OT N

Wholesale Trade

P BICUIL
UL T :
(T f* O K
Y WR S

N WY R
E OK
PHILADELPHIA

BUSINESS &
COMMERCIAL

M NAOIS
INEP L

so. eastern

1-92.3

1924

19£5

ill
192.3

1924

192o

By Districts
By Types of Construction
Value of Building Contracts awarded in ^36 States during first
eleven months of Three Years (Figures in millions of dollars)

Commodity Prices
A t 158 per cent o f the 1913 average the Department
o f Labor's wholesale price average for November was
unchanged from October, and 2 points lower than at
the beginning of the year.
D uring the first three weeks of December this bank's
weekly index of 20 basic commodities declined to the
lowest point in more than a year, due largely to a decline
in wool and to losses in corn and cotton follow ing larger
crop estimates. A t 73 cents on December 19, cash corn




Sales o f nearly 200 wholesale dealers in this district
showed a seasonal decline o f about 24 per cent from
October to November, but were slightly larger than a
year ago.
Machine tool sales exceeded those of any November
since 1920, and sales o f silk goods and diamonds were
the largest for the month since 1919. Substantial gains
were reported also in jew elry, stationery, shoes, and
hardware, and smaller gains in paper and job bers'
cotton goods.
Due, however, to the failure of grocery sales to in­
crease, and to decreases in sales of m en's and women's
clothing, drugs, and commission house cotton goods, the
weighted index o f trade in this district was only 1 per
cent above last year.
Stocks of silk goods showed a further large increase
notwithstanding the heavy sales, and stocks o f shoes
and o f jew elry and diamonds were also larger than a
year ago.
Stocks o f cotton goods and hardware, on
the other hand, continued relatively small, and grocery
stocks declined below last y e a r’s level.

7

FEDERAL RESERVE AGENT AT NEW Y O R K

Net Sales
Percentage Change

Stock on Hand
Net Sales
Percentage Change Percentage Change
November 30, 1925
November 1925
from
from
November 30, 1924
November 1924

Stock at end of month
Percentage Change

Commodity
Nov. 1925 Nov. 1925 Nov. 1925 Nov. 1925
from
from
from
from
Oct. 1925 Nov. 1924 Oct. 1925 Nov. 1924'
Groceries.............................
Men’s clothing.....................
Women s dresses..................
Women’s coats and suits...
Cotton-Joboers....................
Cotton-Commission houses.
Silk goods.............................
Shoes.....................................
Drugs...................................
Hardware.............................
Machine tools......................
Stationery............................
Paper....................................
Diamonds............................
Jewelry.................................
Weighted Average.

4
—4
4
—

+ 0.3
— 9.4
— 23.2
— 22.7

— 60
— 62

—25
—1
1
— 5
—18
— 27
—12

+ 2.8

— 16
+ 3

— 9.5
+32.2
+ 13.2
— 3.4
+ 5.8
+33.1
+ 10.9
+ 3.6
+30.8
+ 13.7

— 24.2

+
+
—
+
+
+
—

4.6
6.9
3.2
2.3
2.5
5.1
1.7

5.9

— i6.2

— 9.5

+18.7*

+46! 7*
+34.3

+ 0.1

— 11.4

Elsewhere.................................................
Northern New York State.................
Central New York State....................
Southern New York State.................
Hudson River Valley District............
Capital District...................................
Westchester District...........................
All department stores.............................

+ 9.8

+ 6.0
— 1.7
+ 1-4
— 8.3
+ 8.5
+ 2.7
+ 0.7
— 13.3
+ 0.1
— 1.0
+ 6.7
— 4.0
+ 8.8
+ 4.9

+ 3.8

Apparel stores..........................................
Mail order houses...................................

+ 2.1
+ 10.0

— 1.4

New York.................................................
Buffalo......................................................
Rochester.................................................
Syracuse...................................................

+ 0.8

—1
2

■+ 4.7

\ + 8.5

* Stock at first of month— quantity not value.

Chain Store Sales
Follow ing unusually heavy sales in October, chain
store business showed smaller increases in November.
The average increase in total sales was 12 per cent, due
largely to the opening of new stores. Sales per store
averaged 7 per cent smaller than a year ago, whereas in
October they were 4 per cent larger.
D rug stores showed the largest gain over November
o f last year, both in total sales and sales per store, and
sales o f ten cent stores also recorded a substantial in­
crease. In the cases of grocery, variety, and candy stores,
actual sales, while larger than last year, failed to keep
pace with the opening of new stores, and in tobacco and
shoe stores, sales fell below last year.

Stocks of merchandise in November increased 4 per
cent over a year ago, a slightly smaller increase than
occurred in sales. Due apparently to the high ratio of
sales to stocks in recent months, outstanding orders of
the stores for merchandise showed a much smaller de­
cline during the month than is usual at that time of
year, as the accom panying diagram shows.
PERCENT.

Percentage Change
November 1925 from November 1924
Type of Store
Number of
Stores

Total
Sales

Sales per
Store

Drug........................................................
Grocery...................................................
Ten Cent.................................................
Variety....................................................
Candy......................................................
Tobacco...................................................
Shoe.........................................................

+11.0
+23.1
+ 6.2
+16.1
+ 15.8
+14.0
+16.7

+17.3
+15.7
+10.7
+ 6.2
+ 3.5
— 1.2
— 6.1

+ 5.7
— 6.0
+ 4.3
— 8.5
— 10.7
— 13.3
— 19.5

Total....................................................

+20.3

+ 11.7

— 7.1

Outstanding Orders of Department Stores in the Second District
(1924 average = 100 Per cent.)

Sales of musical instruments and radio sets in N ovem ­
ber continued to show the largest gains over last year.
Substantially larger sales were reported also in fu rn i­
ture and home furnishings, and in articles more or less
of luxury character, such as toys and sporting goods,
toilet articles and drugs, silks and velvets, and silver­
ware and jewelry.

Department Store Trade
Prelim inary reports from leading department stores
in New York, Brooklyn, and Newark on holiday trade
from December 1 to 24 inclusive, indicate a gain o f 8 per
cent over December 1924, the previous high mark fo r
department store business. Total sales for the year ap­
pear to have shown an increase of 5 % per cent over
last year, compared with gains o f 4 y2 per cent in 1924
and 8 per cent in 1923. The December increase is
reported to have been rather generally distributed
throughout the various departments.
In November, department store sales averaged 5 per
cent larger than a year previous, follow ing the unusually
large increase o f 15 per cent in October. A pparel store
sales, which in October were 20 per cent ahead of that
month in 1924, showed an increase of 2 per cent.




Net Sales
Stock on Hand
Percentage Change Percentage Change
November 1925
November 30, 1925
from
from
November 1924
November 30, 1924
Musical instruments and radio............
Toys and sporting goods......................
Furniture...............................................
Toilet articles and drugs......................
Linens and handkerchiefs.....................
Silverware and j ewelry.........................
Books and stationery............................
Luggage and other leather goods........
Silks and velvets...................................
Shoes......................................................
Home furnishings..................................
Hosiery...................................................
Men’s furnishings..................................
Cotton goods.........................................
Women’s and Misses’ ready-to-wear. .
Women’s ready-to-wear accessories. . .
Men’s and Boys’ wear..........................
Woolen goods.........................................
Miscellaneous.........................................

+54.0
+22.7
+16.4
+16.2
+14.5
+11.5
+ 11.0
+10.9
+10.9
+ 8.1
+ 7.2
+ 7.1
+ 6.4
+ 3.8
+ 1.8
— 0.4
— 5.3
- 18.5
+ 5.1

— 10.6
+ 5.8
+ 9.8
+ 4.9
— 2.9
+ 1.4
+12 .7
+ 4.3
— 10.2
+ 1.8
— 1.4
+ 12.5
+ 4.5
+ 12.7
— 4.0
+ 0.5
+ 6.0
+11.6
— 5.1

S e le c tio n

and

D u tie s

o f F ed eral R eserve

H E taking of office at the beginning of the New
Year by a number of new Federal Reserve Bank
directors makes it appropriate to review the
method by which directors of the Reserve Banks are
chosen, the type of men who serve, and their powers
and duties.

T

M

ethod

S e l e c t io n

op

Each o f the 12 Federal Reserve Banks has a board o f
nine directors which is responsible, under the general
supervision of the Federal Reserve Board in W ashing­
ton, fo r the policy and administration of the bank. O f
the nine directors, six are elected by the member banks
and three are appointed by the Federal Reserve Board.
O f the six elected by member banks three may be bank­
ers, and the other three must be actively engaged in
commerce, agriculture, or industry in the district, and
while serving as Reserve Bank directors may not serve
as directors or officers of any other bank. O f the three
directors appointed by the Federal Reserve Board, one
acts as chairman of the board, a man of banking experi­
ence, and devotes his entire time to the Federal Reserve
Bank, carrying in addition the title and duties of F ed ­
eral Reserve Agent. The other two appointed by the
Federal Reserve Board must have no other banking con­
nection while serving as directors. Hence they are
usually business men.
B

u s in e s s

M

en

in

M

the

a j o r it y

Thus, of the nine directors of each Reserve Bank, five
are ordinarily business men, three are active bankers
(frequently with business interests in addition), and
one is chairman and Federal Reserve Agent. Directors
hold office for three years and may be reappointed or
reelected.
O f the present 108 directors of the 12 Reserve Banks,
12 are the chairmen of the board and 36 are active
bankers. The remaining 60, constituting the m ajority,
have the follow ing occupations:
19
14
4
4
2
3
3
2

2
2
1
1
1
1
1

manufacturers
merchants
farmers
lumbermen
insurance
investment bankers
retired business men
publishers

lawyers
railroads
cattleman
contractor
public utilities
mining
savings bank officer

In each of the 12 Federal Reserve districts it is men
with this wide range of interests and fam iliar with con­
ditions in the district who are responsible fo r the man­
agement o f the Reserve Bank.
B ank
The directors of the Federal Reserve Bank o f New
Y o r k are the fo llo w in g :
D

ir e c t o r s o f

N

ew

Y

ork

E lecte d b y m em b er ba n k s

Jackson E. Reynolds, New York City,

President, F irst National Bank.
Robert H. Treman, Ithaca, N. Y.,

President, The Tompkins County National Bank.
Delmer Runkle, Hoosick Falls, N. Y.,

President, Peoples National Bank.
Owen D. Young, New York City,

Chairman, General Electric Company.
Theodore F. Whitmarsh, New York City,

President, Francis H. Leggett & Company.
Samuel W. Reyburn, New York City,

President, Lord & Taylor.




B an k

D ir e c to r s

A p p o in te d b y F ed era l R eserv e B o a rd

Pierre Jay, New York City, C h a irm a n .
W. L. Saunders, Plainfield, N. J., D e p u t y

C h a ir m a n ,

Chairman, Ingersoll-Rand Company.
Clarence M. W oolley, New York City,
Chairman, American Radiator Company.

O f these directors Mr. Reynolds, just elected by the
member banks, is serving his first term. Mr. Y ou n g has
been reelected after three years o f service, and Mr. Jay
has been reappointed by the Federal Reserve B oard after
11 years o f service.
In addition to the directors o f the 12 Reserve Banks
each o f the 23 branches has a board o f seven directors,
residents o f the branch territory, o f whom 4 are ap­
pointed by the Federal Reserve Bank o f the district
and 3 by the Federal Reserve Board. The directors
o f branches have a range o f occupations and interests
similar to that indicated above fo r the directors o f the
banks. Their jurisdiction in credit matters is lim ited
to passing upon loans to member banks in the territory
served by the branch. In the New Y ork district there
is only one branch, that at Buffalo. The follow ing are
its directors:
A p p o i n t e d b y F e d e r a l E e s e r v e B a n k o f N e w YorTc

Harry T. Ramsdell,

Chairman, M frs. and Traders Trust Co., Buffalo.
E llio tt C. McDougal,

President, Marine Trust Company, Buffalo.
F rank W. Crandall,

President, National Bank of Westfield, Westfield.
N. Y.
W alter W. Schneckenburger,

M a n a g in g D ir e c to r .

A p p o in te d b y F ed era l E eser v e B oa rd

James H. McNulty,

C h a ir m a n ,

President, P ra tt & Lambert, Inc., Buffalo, N. Y.
A rthur H ough,

President, W iard Plow Company, Batavia, N. Y.
John A. Kloepfer,

President, Liberty Bank of Buffalo.
L

ocal

and

N

a t io n a l

I

n terest

The Board of Directors o f each Reserve Bank appoints
its officers and is responsible fo r its policy and man­
agement, subject to the general supervision of the F ed ­
eral Reserve Board. A certain coordination is neces­
sary between the 12 Reserve Banks in important matters
of policy. The law therefore provides that decisions o f
any Reserve Bank as to changes in the discount rate
must be approved by the Federal Reserve Board. Trans­
actions in bankers acceptances and short Government
securities in the open market are coordinated through a
committee of Reserve Bank officers appointed by the
Federal Reserve B oard and acting under the approval
and authority o f the directors of those Reserve Banks
which may from time to time participate in such trans­
actions.
Under the terms o f the Federal Reserve A ct and cu r­
rent procedure, the management o f the Federal R e­
serve System is so designed as to bring to bear upon any
important question o f policy both local and national
points o f view, together with the opinions o f men o f
many different occupations and interests.