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M O N T H L Y R E V IE W
of Credit and Business Conditions
S e c o n d

Federal Eeserve Agent
M on ey

F e d e r a l

D is tr ic t

Federal Eeserve Bank, New York

M a r k e t in D e c e m b e r

The money market was subject to conflicting influ­
ences during December, as the net result of which money
rates remained little changed, except for the usual ad­
vance in call loan rates in the final week of the month.
The principal factors operating toward a tightening
of the money market were large withdrawals of cur­
rency from the banks for the holiday trade, and a sub­
stantial gold export movement. In addition there were
unusually heavy withdrawals of funds from New York
to other parts of the country. The chief factors oper­
ating toward easier money conditions were the further
liquidation of bank credit called into emergency use at
the end of October and early in November, and Eeserve
Bank open market operations.
The diagram at the left below shows the extent of the
holiday currency demand, which is usually the dominant
influence on the money market in December. It indi­
cates that while the amount of currency called into use
during this holiday season has probably been slightly
smaller than in 1928, these requirements have constituted
a drain upon bank reserves of about 200 million dollars
between Thanksgiving and Christmas.
Though this
demand was countrywide it drew heavily on the New
York market as banks throughout the country, as usual,
withdrew funds from New York as their own funds
were withdrawn by their customers.
BILLIONS OF DOLLARS

Amount o f Currency In Circulation in the United States (W eekly
averages o f daily figures ending with Saturday—
computed by the Federal Reserve Board)




R e s e r v e

January 1 , 1930

While currency needs may have been less than last
year, gold movements were much larger. In 1928 there
had been some loss of gold during the latter part of
November, chiefly through the earmarking of gold for
foreign account, a movement unrelated to the position
of the foreign exchanges. This year there was a heavy
outflow of gold, directly resulting from the strength of
the foreign exchanges at New York. In December the
loss of gold, including earmarkings, amounted to 91
million dollars, and the total movement from October 28
through December 31 amounted to a loss of 116 million.
In addition to these large gold exports and the holiday
currency demand, withdrawals of funds from New York
by the rest of the country were much larger than usual.
Between the middle of November and Christmas net
withdrawals totaled about 300 million dollars.
This
movement may be considered a logical sequel to the
events of the preceding weeks. The events of September
and October caused easy money in New York but for
some weeks this money did not flow freely to other dis­
tricts, probably reflecting some stoppage of the usual
liquidity of funds due to disturbances in the security
markets. As more normal conditions were restored, the
surplus funds in New York, and even funds not surplus,
flowed to other centers.
The triple drain upon New York of currency, gold,
and transfers might well have caused very firm money
conditions but other influences largely offset this tenBILLIONS OF DOLLARS

Total Loans and Investments of Weekly Reporting M ber
em
Banks as of each Wednesday

2

MONTHLY REVIEW, JANUARY 1, 1930

dency. The first of these was the continuance of the
liquidation of credit after the security price decline. As
their deposits declined the reserve requirements of the
New York City banks declined releasing a part of their
reserves. The liquidation in member bank credit was
partly in security loans, partly in inter-bank loans,
which had been expanded in November, and partly in
other loans. The changes in total loans and investments
of reporting banks are shown in the second diagram on
the preceding page.
A second means by which funds were provided to
meet the unusual demands of the month was the open
market operations of the Reserve Banks.
Between
November 20 and December 24 their holdings of Govern­
ment securities were increased by nearly 160 million
dollars and their holdings of bankers acceptances by
about 70 million dollars, a considerable part of the
purchases being made in New York. Member bank bor­
rowing at the New York Reserve Bank was increased
slightly, but even at the seasonal peak on December 26
was only 252 million dollars, considerably less than on
the same date in 1928.
It may be further noted that the effect of the recent
movement of funds was to enable member banks in other
districts to repay some of their borrowings at their local
Reserve Banks and thus laid the basis for a somewhat
easier money position in those districts. The effect was
thus! to extend to other sections of the country the ten­
dency towards easier money conditions which became
apparent in New York in October and November.
The usual table of money rates in New York is given
below. The peak of the currency demand just before
Christmas and preparations for year-end statements and
disbursements caused a temporary rise in call loan rates
in the last week of December, and rates on short bills
advanced slightly, reflecting the temporary curtailment
of funds available for short-term investment. Commer­
cial paper rates and customers’ loan rates of New York
City banks were practically unchanged, and time money
rates remained close to the lowest level since the
Spring of 1928.
Money Rates at New York
Dec. 31, 1928 Nov. 29, 1929 Dec. 31, 1929
Stock Exchange call loans.......................
Stock Exchange 90 day loans.................
Prime commercial paper..........................
Bills— 90 day unindorsed.........................
Customers’ rates on commercial loans..
Treasury certificates
Maturing March 15 (yield).................
Maturing June 15 (yield)....................
Treasury bills
Maturing March 17 (offered).............
Federal Reserve Bank of New York re­
discount rate...........................................
Federal Reserve Bank of New York
buying rate for 90 day bills.................

*9-12
7%
f 5 .49

*4^
4M
5-5 H
3 H -V s
t5.73

* 5 ^ -6
4 ^ -5
5
4
f5 .5 7

4 .14
4.42

3.04
3.13

2 .40
2.98
2H

5

4H

4H

4

4

* Range for preceding week
t Average rate of leading banks at middle of month

T reasury B ills
In addition to the usual quarterly transactions of the
Treasury, a new feature in December was the sale on a
discount basis to the highest bidders of $100,000,000 of
Treasury bills dated December 17, 1929 and due March
17, 1930.
Tenders for this issue of bills totaled
$224,000,000, of which $100,000,000 were accepted at an




average price of 99.181, equivalent to an average annual
rate of about 3% per cent on a bank discount
basis.
Immediately after the 17th, these bills were
offered in the market by security dealers at a 3 % per
cent per annum discount, and during the balance of the
month were quoted from that rate down to a discount of
2% per cent. Unlike Treasury certificate issues, pay­
ments for Treasury bills cannot be made by a credit to
the Government on the books of depositary banks, but
must be made in cash or immediately available funds on
the date of issue. Due to this feature, the Treasury does
not have to pay interest on funds borrowed in advance
of requirements, and, consequently the discount on the
first issue, while nominally higher than the coupon rate
on the nine-months certificate issue, actually repre­
sented a lower interest cost to the Treasury.
These Treasury bills have the advantages for the sub­
scribers that they are of shorter maturity than previous
offerings of Government securities, and that the rate of
return is established, not by the Treasury, but by the
market through competitive bidding.
B ill M arket
During the first part of December the general distribu­
tion of bills continued in rather good volume, though in­
vestment demand was not as active as in November.
Early in the month offering rates became settled at 3 %
per cent for 30 to 90 day bills, at 4 per cent for 4 months
bills, and at 4 % per cent for longer maturities, but
shortly afterward the dealers raised their bid and offered
rate for 30 day bills by % per cent.
In the latter part of the month the banks and others
were sellers rather than buyers of bills, with the result
that dealers’ portfolios of bills increased steadily and
toward the close of December were more than twice as
large as a month earlier and were also heavier than at
any previous time in 1929. A s a reflection of this con­
dition the dealers extended the 4 per cent offering rate
to all maturities up to and including the 90 day bills,
effective at the close of business December 24. Follow­
ing a decline in November, the Reserve System’s holdings
of bills in December rose about $100,000,000, much of
which was due to purchases of bills from dealers under
sales contracts.
A t the end of November, the volume of dollar accept­
ances outstanding reached $1,658,000,000, a larger
amount than ever before; this figure was $117,000,000
higher than a month previous and $458,000,000 above the
outstandings of November 1928.
C ommercial P aper M arket
Reflecting a continued good investment demand for
commercial paper on the part of the banks throughout
the country, the prevailing rate for the usual grade of
prime names declined to 5 per cent early in December.
Some paper appeared in the market priced at 4 % per
cent, but sales at that rate at no time reached an impor­
tant part of the total business. Later in the month when
the bank inquiry for paper was checked by the advent of
holiday and year-end requirements for funds, offerings
at the 4 % per cent rate virtually disappeared from the
market, and sales at 5 per cent also tended to fall below
the volume of preceding weeks. Throughout the month
less well known paper was sold at 5 ^ per cent. A s com-

FEDERAL RESERVE AGENT AT NEW Y O R K

3

MILLIONS OF DOLLARS

AmSunt of Open Market Commercial Paper Outstanding at end
o f each month, 1926-1929

mercial and industrial concerns usually are desirous of
showing as little indebtedness as possible on year-end
statements, there was some curtailment of the amount of
new paper coming into dealers’ hands, with the result
that offering lists remained moderate.
During November, a further increase of 11 per cent
occurred in open market outstandings of commercial
paper but the total was nevertheless 25 per cent lower
than on November 30, 1928. A s the accompanying dia­
gram shows, the increase in outstandings this autumn has
been similar to that which occurred in 1927, another year
of easing money conditions, and is in marked contrast
with the declines that occurred during the corresponding
period of 1926 and 1928.
F o r e ig n

E xchange

Weakness near the end of December reversed a gen­
eral upward movement of the European exchanges in
which the following currencies registered new high
points for the year: sterling, French francs, reichs­
marks, belgas, guilders, Swiss francs, and the three
Scandinavian currencies. Gold was shipped from the
United States to England, France, Germany, and
Sweden.
Sterling opened the month fractionally under $4.88,
touched $4.88 7 /1 6 on the 9th, and ruled thereafter at
about $ 4 .8 8 % . French francs sold between $0.0393%
and $0.0394 during most of the month, advanced to
$0.0394 5 /1 6 on the 24th, but sold around the earlier
level near the month-end. Reichsmarks gained steadily
from $0.2394 on December 2 to $0.2397 on the 26th,
but dropped back to about $0.2392% on the 28th.
Belgas opened at $0.1399 and reached a new high of
$0.1401 (approximate gold export point, $0.1399) on
several scattered dates. Guilders were strong during
the first two weeks ($0.4036— $ 0 .4 0 3 7 % ); they declined
to $0.4032% December 21, recovered sharply to $0.4038
on the 24th, and to a new high for the year of $0.4038%
on the 26th, and then fell away to $0.4037 on the 28th.
Swiss francs continued firm from December 2 to 26,
rising from $0.1942% to $0,1946, and then fell off to
$0.1945 on the 28th. Lire fluctuated narrowly within
the range of $ 0 .0 5 2 3 % -% through the 28th.
Swedish crowns rose to $0.2700 on the 13th, held
near that figure until the 21st, and declined thereafter




to $0.2695% on the 28th. Danish crowns, after reach­
ing a new high of $0.2686 on the 10th, reacted, and sold
at $0.2683% on the 28th. Norwegian crowns sold at
$0.2680 on the 2nd, touched $0.2685% on the 10th and
16th, and closed slightly weak at $0.2683% on the 28th.
Spanish pesetas showed signs of strength during the
first week, recovering to over $0.1400, but fell off to
$0.1338 on the 27th, the lowest in recent years.
The Japanese yen remained below $0.49 until the
10th, rose slowly to $0.4905 by the 17th, and sold at
$0.4908 on the 28th. Canadian dollars gave promise
of recovery, when the discount was reduced to less than
% cents about the middle of the month, after exceeding
1 cent and touching as low as 2 5 /1 6 cents in Novem­
ber, but sold around $0.99 as the month ended. The
Argentine peso was weak at about $0.94 even before
announcement of the closing of the gold Conversion
Office, when it broke sharply to $0.9158 on the 17th.
There was a slight gain towards the end of the month
to around $0.9294.
G o ld M o v e m e n t

The outflow of gold from the United States, which
began at the end of October, was greatly accelerated
in December, and the reduction in the country’s mone­
tary gold stock reached the largest total in any month
since May 1928.
In the month of December there were exports of
$47,900,000 in gold to France, $21,000,000 to England,
$1,340,000 to Sweden, and $1,280,000 to Germany. In­
cluding small miscellaneous shipments for non-monetary
purposes, exports totaled $72,200,000 in round figures.
Imports were $3,500,000, of which over $2,000,000 was
received from Argentina, and $950,000 from Colombia.
There was an additional loss to the country’s gold stock
through an increase of $22,000,000 in gold earmarked
for foreign account. The net result according to a pre­
liminary calculation was a loss through exports, imports,
and earmarkings, of $90,800,000, which would reduce
the net gain for 1929 from $228,100,000 at the end of
October to $115,100,000 at the end of December.
Net Gain or Loss of^Gold Through Imports, Exports, and Earmarkings
(In millions of dollars)

1929
January.......................................................
February.....................................................

Through net
gold imports
Through
or exports
earmarkings

Total

September...................................................

+ 7 .5
+ 4 8 .6
+ 1 6 .1
— 7 .5
— 22.0
— 1.0
— 6 .6
— 4 .5

— 17.9
+ 2 5 .5
+ 3 2 .3
+ 7 1 .7
+ 3 9 .7
+ 2 2 .7
+ 1 2 .7
+ 1 7 .4
+ 1 1 .0
+ 1 3 .0

+ 2 6 2 .5

April.............................................................
M ay..............................................................
June..............................................................

+ 4 7 .1
+ 2 5 .5
+ 2 4 .8
+ 2 3 .1
+ 2 3 .6
+ 3 0 .2
+ 3 4 .7
+ 1 8 .4
+ 1 7 .6
+ 1 7 .5

— 34.4

+ 2 2 8 .1

— 65 .0

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

+ 1.0
— 22.0*

— 22.2
— 90.8*

— 92.0*

— 21.0*

— 113.0*

+ 1 7 0 .5 *

December....................................................

— 23.2
— 68.8 *

— 55.4*

+ 1 1 5 .1 *

* Preliminary

Between November 27 and December 26 the Bank of
England added £10,600,000 to its gold stock, bringing
up the total to £146,000,000, or £15,700,000 above the
low level reached on October 2. A rough estimate of

MONTHLY REVIEW, JANUARY 1, 1930

4

the December movement in London is as follows: Im ­
ports from the United States, £4,680,000; from Austra­
lia, £4,010,000; from Argentina, £1,570,000; South
African sovereigns paid into the bank, £2,070,000;
secured in the open market, £1,675,000. Exports were
negligible except to France which took a total estimated
at £2,300,000, of which £400,000 was taken on the 3d
and 4th and the balance since the 24th of December.
On December 16 the President of the Argentine
Republic declared the national Conversion Office closed
to further withdrawals of gold. It is understood that
this does not constitute a complete embargo upon the
export of gold, and that such gold as is held by the
banks— over 45,000,000 U. S. dollars— may be shipped
at the discretion of the banks. Since the beginning of
the year Argentina has lost around $150,000,000 of
gold.
The Conversion Office is reported to hold at
present some 423,000,000 gold pesos, or about $408,000,000 in gold.
C e n tra l B a n k R a te

Changes

Six European central banks reduced their discount
rates during December. On the 12th the Bank of Eng­
land lowered its rate by one-half per cent to 5 per cent,
the third half-per-cent reduction in the London rate
since October 30.
The three Scandinavian central banks also effected
reductions of one-half per cent from their uniform
rates of 5 % per cent. The Swedish rate was lowered
to 5 per cent on the 13th, the Danish rate on the 27th,
and the Norwegian rate on the 28th. A second reduc­
tion to 4 % per cent is announced by the Swedish Riksbank to become effective on January 1, 1930.
On December 31 the National Bank of Belgium an­
nounced a reduction of its rate from 4 % to 3 % per cent,
effective January 1, 1930. The higher rate had been in
force since November 14. The new 3 % per cent rate is
on a level with the French and Swiss bank rates which
are the lowest in Europe.
The Austrian National Bank rate was reduced from
8 to 7 % per cent on December 9.
Below is a table of central bank rates for the princi­
pal European countries where changes have been made
during the past year.
______________________European Central Bank Rate Changes______________________
Country

End of 1928

High 1929

End of 1929

Austria...................
Belgium..................
Denmark................
England..................
Germany................
Hungary................
Italy........................
Netherlands...........
Norway..................
Poland....................
Rumania................
Sweden...................

&X
4
5

8X
5
5X
6X
7X
8
7
m
6
9
9H
5X

7X
*3 X
5
5
7
7X
7
*X
5
8X
9
*4X

7
7
5X
4H
5X
8
6
4X

* Effective January 1, 1930.

S ta b iliz a tio n o f th e C z e c h o s lo v a k

C row n

The Czechoslovak crown, which has had de facto
stability at around $ 0 .0 2 9 6 ^ for more than five years
past, became legally convertible on the gold exchange
standard by the passage of a parliamentary A ct on
November 7, which went into force on November 27,
1929. This A ct provides:




1. That the Czechoslovak crown shall have a gold
content of 44.58 milligrams of fine gold equivalent to
$0.02962853, or approximately Kc. 33.75 to the dollar.
2. That the National Bank of Czechoslovakia shall
assume the maintenance of the exchange value of its
notes at the legal parity, buying gold in minimum
quantities of 12 kilograms of fine gold (about $8,000,
or the customary “ export b ar” ) and converting its
notes into gold coin, gold bullion, or gold exchange, at
its option, in minimum amounts equivalent to 12 kilo­
grams of fine gold.
3. That gold coins 900/1000 fine of 100 crowns value
shall be minted, the 100-crown piece to be known as
the hrivna and put into circulation at a future date not
yet determined.
4. That the National Bank of Czechoslovakia shall
maintain a reserve of gold and foreign exchange equal
to at least 25 per cent of its total notes and sight liabil­
ities at the end of 1929,* 30 per cent at the end of 1930,
and 35 per cent at the end of 1935 and thereafter, onehalf the reserve to consist of gold coin or bullion.
5. That the present share capital ($12,000,000) of
the National Bank be converted into Kc. 405,000,000,
and the Bank be authorized to increase its capital, if
it so desires, to Kc. 607,500,000 (equal to $18,000,000).
6. That when the State note debt to the Bank, which
is now Kc. 3,780 million, has been reduced to Kc. 1,000
million, the Bank shall be authorized to discount Gov­
ernment bills up to a total of Kc. 200 million per
annum, after endorsement by a banking institution, such
temporary advances to be repaid by the end of March
of the following year.
7. That the Bank is authorized “ to participate in
international financial and economic institutions and
arrangements of monetary importance. ’ ’
*On December 7, 1929, the ratio was 38.9 per cent.

N ew

F in a n c in g

The total amount of new financing consummated dur­
ing November was the smallest for any month since
August 1928, and w as only about one-fifth to one-third
T
as large as the volume floated in several previous months
of 1929. There was a virtual stoppage in the sale of
securities of investment trusts and financial trading and
holding company issues, and a marked reduction in offer­
ings of stocks and bonds by industrial, public utility, and
railroad companies. Foreign security issues declined to
the smallest amount since last April. State and munici­
pal financing was maintained in better volume than was
the case with corporate securities.
A considerable revival in new bond issues occurred in
December, while the volume of stock offerings was re­
duced further. In the accompanying diagram, the course
of domestic bond financing during the past three years
is shown by months. This shows that the volume of bond
issues became progressively smaller throughout this
period, reaching its lowest level in November of this year,
but that the preliminary figures for December gave some
indication of an up-turn. A s the diagram indicates, the
December increase was largely in municipals, whereas
previous high months this year were caused by large cor­
poration issues, usually issues with provisions for conver­
sion into common stocks.

FEDERAL RESERVE AGENT AT NEW YORK
MILLIONS OF DOLLARS
600j---------------------------1
—

1927

1928

1929

New Bond Flotations of Domestic Corporations, and of Munici­
palities, States, and Farm Loan Agencies (Commercial and
Financial Chronicle figures; refunding issues excluded)
December figures preliminary

S e c u r ity M a r k e t s

Further recoveries occurred in stock prices during the
first week of December, and by the end of the week repre­
sentative averages had regained more than one-third of
the loss sustained in the September to November break.
In the succeeding two weeks of December, prices turned
downward to levels about midway between the low
point of November 13 and the highest point reached on
the recovery which ended December 7, but near the end
of the month prices tended to advance again. The turn­
over of shares on the Exchange was between 3^2 and 4 %
million shares on most days of the m onth; on only two
days did the volume of sales exceed 5 million shares, and
on several days the transactions totaled less than 2 %
million shares.
A fter the first week of December, bond prices also
tended downward, and trading in bonds on the Stock
Exchange was also reduced from the rather unusual vol­
ume of the previous two months. Domestic corporation
issues reacted about a point from the highest level
reached on the recent upswing, but remained well above
the lowest points of October. United States Government
bond issues, which on the average had advanced about
4 points between early October and the first part of De­
cember, declined about % of a point, but at the close of
the month were as high as at the middle of November.
Foreign bonds as a group moved lower during the last
three weeks of the month; South American issues, and
most notably Argentine bonds, were weak for a time, fol­
lowing the suspension of gold payments by Argentina,
but subsequently recovered part of their losses.
F o r e ig n T r a d e

Foreign merchandise trade during November showed
large declines in value from the rather high figures of
October. Although there is usually little change be­
tween these months, exports decreased $81,000,000 in
value, and imports, $52,000,000.
Exports, valued at
$448,000,000 in November, were less than in November
of any year since 1925. Imports, valued at $339,000,000,
were slightly larger than a year previous, but were
otherwise the smallest for November of any year since




5

1924. These declines in value of foreign trade may be
explained partly by the reduction in commodity prices.
A ll groups of exports participated in the downward
movement from the previous month, and all except semi­
manufactures declined from a year ago. The decrease
in the combined value of shipments abroad of raw cot­
ton and grains accounted for about one-third of the
decrease in value of total exports compared with Octo­
ber and about half compared with November 1928.
Exports of finished manufactures as a whole were val­
ued at $39,000,000 less than in the previous month, and
$34,000,000 less than a year ago. Refined petroleum
products decreased in value $16,000,000 and $10,000,000,
respectively, from the exports of the previous month
and of November 1928.
The value of all groups of imports was less than in
October, with the largest declines in finished and partly
finished manufactures. Quantity receipts of crude rub­
ber, raw silk, and coffee were smaller than in the previ­
ous month.
Compared with a year ago, however,
imports of wholly and partly finished products increased
slightly in value, and imports of crude materials in­
creased $13,000,000.
B u ild in g

Building contracts awarded in the New York and
Northern New Jersey district rose sharply in November
from the level of the previous three months and reached
a total 24 per cent above that of November 1928. The
increase was primarily the result of larger contracts
for commercial buildings, including one $35,000,000
office building project and a number of smaller ones.
Also contributing to the increase was a larger volume of
contracts for public works and utilities and for industrial
buildings. Contracts for residential work, while nearly
double the very small total reported for September and
about the same as in October, were 41 per cent smaller
than in November of last year. Since the first of Janu­
ary, the total value of contracts awarded in this district
has been 19 per cent smaller than in 1928 and about 13
per cent smaller than in 1927.
For the 37 States east of the Rockies covered by the
F . W . Dodge Corporation survey, however, the Novem­
ber total of building contracts was 12 per cent smaller
than in October, and 17 per cent smaller than a year ago.
The increase in commercial building for the country as
a whole was less than in the New York district, as con­
tracts for this type of construction work were at a lower
level than a year ago in other districts. Public works
and utility projects showed a decline from last year’s
total, despite the increase reported in the New York dis­
trict, and total residential building contracts in the 37
States remained 43 per cent below the level of November
1928.
The volume of construction work of all types con­
tracted for during the first eleven months of 1929 has
been 12 per cent smaller than a year ago, and 7 per cent
smaller than in 1927. In December, the reduction in
building activities appeared to have continued, for the
average daily awards during the first three weeks of the
month were 19 per cent under the average of December
1928, when the tendency toward reduced building activ­
ity was already in evidence.

6
P r o d u c tio n

MONTHLY REVIEW, JANUARY 1, 1930
a n d ^ T r a d e in

1929

Despite the recession in important industries during
the closing months of this year, it appears from a com­
pilation of all of the principal series of industrial and
business data that the total volume of production and
trade for the full year 1929 will probably prove to have
shown a slightly larger increase over the previous year
than for any single year since 1925. A n unweighted
average of 161 series of data on production and trade
indicates that the total volume of the nation’s business
in 1929 was about 4 per cent larger than in 1928. This
preliminary estimate for the full year has been calcu­
lated by using the available data, usually for the first
eleven months, and adding estimated figures for the
remainder of the year.
In the accompanying diagram is shown the year-toyear growth of industry and trade since 1919, as
reflected in a broad weighted index of a large number
of series, exclusive of those of financial activity; the
figure for 1929 is based upon the increase shown by the
preliminary unweighted data for the year.
Production of manufactures and series indicative of
trade lead the groups shown below in percentage in­
crease over 1928, followed closely by output of minerals
and metals.
The group which includes such general
indexes of business as bank debits, railroad car loadings,
and electric power production also showed a substantial
increase, and the food and tobacco production classifica­
tion showed an increase about the same as the average
for all series. Construction projects and the output of
building materials were smaller than in 1928, and the
quantity output of principal crops averaged about 5
per cent smaller. In addition to the more important
series listed in the subjoined table, there are numerous
other items included in thei group averages.
Per cent change
Per cent change
1929 from 1928
1929 from 1928
Manufactures
Foods and Tobacco
Locomotives, shipments. . . . . + 6 0
Cigarettes..................................
+12
Automobiles, trucks............... . + 5 2
Butter.........................................
+ 7
Automobiles, pass, cars......... . + 2 6
Sugar meltings.........................
+ 4
Cottonseed oil, crude............. . + 1 6
Wheat flour...............................
+ 2
Wool consumption................. . + 1 2
Cigars.........................................
+ 1
Malleable castings................. . + 9
0
Cotton consumption............. • + 8
0
Silk consumption................... .
— 1
+ 7
Boots and shoes..................... . + 4
Cheese........................................
— 29
Sole leather and belting. . . . . — 5
Group average.....................
+ 4
Tires, pneumatic.................... . — 7
Radiators.................................. . — 25 Building Materials and Construction
Cement......................................
Group average.................... . + 8
— 3
Lumber......................................
— 4
Minerals and Metals
Building permits...................... — 10
Gasoline.................................... . + 1 5
Building contracts...................
— 12
Pig iron..................................... . + 1 3
Sand-lime brick........................ — 20
Copper, smelter...................... . + 1 2
Group average.....................
— 4
Petroleum, crude.................... . + 1 2
Steel ingots.............................. . + 9 Trade
Bituminous coal..................... . + 6
Mailorder sales.......................
+26
Grocery chain store sales. . . .
Lead.......................................... . + 6
+12
Chain store sales......................
Zinc........................................... • + 1
+ 11
— 2
Merchandise imports..............
Anthracite coal.......................
+ 8
Group average.................... . + 7
Wholesale trade.......................
+ 3
Dept, store sales......................
+ 3
Merchandise exports...............
Crops
+ 3
Tobacco.................................... . + 9
Group average.....................
+ 8
H ay........................................... . + 8
Cotton....................................... • + 3 General
Debits, New York C ity.........
+24
Rye............................................ . — 6
— 7
Electric power..........................
Corn..........................................
+ 11
— 7
Debita, outside N. Y . C .........
Rice...........................................
+ 9
Life insurance sales.................
Wheat....................................... , — 12
+ 7
— 14
Carloadings, all other.............
Oats...........................................
+ 3
— 14
Employment in U. S...............
Barley.......................................
+ 3
Postal receipts................... ..
Pears......................................... , — 14
+ 2
— 23
Carloadings, mdse, and misc.
Potatoes, white.......................
+ 2
Group average.....................
Apples....................................... . — 25
+ 6
Peaches..................................... , — 33
Group average.................... . — 5 Average of 161 series..................
+ 4




PER CENT

1919 to 1929; figure for 1929 preliminary (1923-1925
average = 100 per cent)
E m p lo y m e n t a n d W a g e s

The number of workers employed in New York State
factories declined more than 2 per cent in November,
reflecting curtailment in industrial production. Despite
this decline, employment remained above the level of
November 1928. In the country as a whole, employment
declined more than 3 ^ per cent, in contrast to a usual
November decline of about 1 per cent, and was slightly
under the level of a year ago. In addition to the decline
in factory employment in November, the usual decline in
out-of-door activities, such as road construction and
farm work, released large numbers of workers.
A decline in the ratio between orders for workers
and applications for employment at New York State
employment bureaus gives further indication that em­
ployment conditions are not as satisfactory as they were
a few months ago. These figures, after holding fairly
close to the level of a year previous until about the middle
of November, subsequently declined much faster than
they did a year ago, and toward the close of December
were substantially under the levels of the corresponding
weeks of 1927 as well as of 1928.
W age data also give evidence of less satisfactory em­
ployment conditions than prevailed a few months ago.
Average weekly earnings of factory employees in New
York State declined about as much as they did in Novem­
ber 1927, probably due to part-time work in some fac­
tories, and total wage payments showed an even larger
decline. Both individual earnings and total factory pay­
rolls, however, remained fairly high.
In d e x e s o f B u s in e s s A c t iv it y

This bank’s indexes generally give evidence of a de­
cline in business activity in November. Average daily
carloadings dropped sharply, and after seasonal and
growth allowance, loadings of merchandise and miscel­
laneous freight were down to the level of December 1927,
and loadings of bulk freight were the smallest since last
March. Foreign trade was sharply curtailed in Novem­
ber, and some decline is indicated also in the distribution
of goods to consumers. Sales of chain stores, other than
grocery chains, increased, after seasonal adjustment, but

FEDERAL RESERVE AGENT AT NEW YORK

declines were shown in sales both of mail order houses
and of department stores.
New corporations formed in New York State declined
substantially in November, and after seasonal and
growth allowance were the smallest since January 1921.
(Adjusted for seasonal variations and usual year-to-year growth)
1929

1928
Nov.
Primary Distribution
Car loadings, merchandise and misc........
Car loadings, other......................................
Exports...........................................................
Imports...........................................................
Panama Canal traffic..................................
Wholesale trade............................................
Distribution to Consumer
Department store sales, 2nd Dist............
Chain grocery sales......................................
Other chain store sales................................
Mail order sales...........................................
Life insurance paid for................................

Sept.

Oct.

Nov.

98
98
103
104
88
102

100
96
97
116
84
103

98
92
100
125
92
105

92
88
85
110

97
97
102
106
99
95

104
92
103
134
111
103

98
93
99
119
99
100

93
89
104
115
104
96

103

General Business Activity
Bank debits, outside of New York City.
Bank debits, New York C i t y ..................
Velocity of bank deposits, outside of New
York City..................................................
Velocity of bank deposits, NewYork City
Shares sold on N. Y . Stock Exchange.. .
Postal receipts...............................................
Electric power..............................................
Employment in the United States...........
Business failures...........................................
Building contracts, 36 States...................
New corporations formed in N. Y. State
Real estate transfers...................................

108
173

116
203

116
218

135
242
426
81
109r
103
99
99
107
76

137
244
540
86
109
102
103
92
108
73

130
189
239
81

General price level.......................................
Composite index of wages.........................
Cost of living................................................

178
224
172

183
229
173

181
228
173

174
226
172

declines from October, and only three advanced; as
compared with a year previous, seventeen declined,
three were unchanged, and three advanced.
From trade reports and such current data as are
available, it appears that productive activity was fur­
ther curtailed in December.
Steel ingot output, ac­
cording to the “ Iron A g e ,” showed a decline which
may approximate the 19 per cent drop of November ;
this is considerably more than the usual seasonal decline,
and would make the rate of activity the lowest since
the summer of 1924. It also appears that activity in
the automobile industry remained at a low level. Pro­
duction of petroleum in the first three weeks of Decem­
ber averaged slightly lower than for the month of
November as a whole, but production of coal was larger.
Cotton mill activity also was at a lower rate in Decem­
ber than in November.
(Adjusted for seasonal variations and”usual year-to-year growth)
1928

117
202

117
191
393
84
107
100
103
118
115
83

100
100
92
87
73

r Revised




1929

Nov.

Sept.

Oct.

Nov.

Tin deliveries.................................................

112
115
121
103
92
108

122
134
115
107
101
121

118
115
115
104r
92
100

107
94
106
103
84
97

Automobiles
Passenger cars...............................................
Motor trucks.................................................

80
106

112
101

93
110

61
119

88
112
106
110
101

88
102
116
116
103

88
112r
115
114
106

83
92
109
106p

Textiles and Leather Products
Cotton consumption....................................
Wool mill activity........................................
Silk consumption..........................................
Leather, sole..................................................
Boots and shoes............................................

101
96
109
114
97

99
95
102
101
114

103
91
116
107
113

90
85p
105
115
97p

Foods and Tobacco Products
Livestock slaughtered.................................
Wheat flour...................................................
Sugar meltings, U. S. ports........................
Tobacco products.........................................

98
96
137
102

108
90
71
107

101
86
89
107

97
91
102

122
129
110
110
97
104

118
89
110
102
86
103

113
91

109
72 p

90
103

88

Metals
Copper, U. S. mines......................................

Fuels
Bituminous coal...........................................
Anthracite coal.............................................

Po u tio
rdc n
A general and substantial contraction in productive
activity took place in November, and while the largest
declines continued to be in the metal and automobile
industries, it appears that most other industries also
were less active than in October. Average daily output
of steel ingots was reduced 19 per cent, and after al­
lowance for the usual seasonal change and year-to-year
growth was the lowest since December 1927. Among
the other metal industries, average daily production of
pig iron declined 8 per cent, copper 6 per cent, and zinc
3 per cent. The total output of passenger automobiles
for the month dropped 41 per cent, substantially more
than usual, and although output of motor trucks de­
clined less than usual, the combined automobile index
fell 27 per cent to the lowest level since December 1927.
Among the fuel industries, average daily output of
crude petroleum was reduced 8 per cent in November,
according to a preliminary calculation, and production
of both bituminous and anthracite coal was also cur­
tailed. Among the textile industries, mill consumption
of raw cotton declined 8 % per cent, and mill consump­
tion of silk 7 per cent, whereas usually there is an in­
crease in both. Other declines, after seasonal allowance,
occurred in live stock slaughterings, in wool mill
activity, and in production of cement, coke, boots and
shoes, tobacco products, tires, and newsprint paper. Of
the twenty-three indexes now available, reflecting activ­
ity in most of the important industries, twenty showed

7

Miscellaneous
Printing activity...........................................
Paper, total...................................................
Paper, newsprint..........................................

p Preliminary

r Revised

Dp r e tS r Ta e
e a tmn to e r d
Preliminary reports on holiday trade obtained from
the leading department stores in the metropolitan area
of New York indicated sales in the first 24 days of De­
cember about 2 per cent larger than the corresponding
period last year. The number of stores reporting in­
creases was about the same as the number reporting de­
creases, but the increases in sales were somewhat larger
than the decreases. Assuming that the final reports for
December will also show an average increase of 2 per
cent, total sales for the year will show an increase of 4
per cent over those of the previous year, the largest in­
crease since 1926.

MONTHLY REVIEW, JANUARY 1, 1930
Final November department store reports showed
sales in about the same volume as in November 1928, a
more favorable comparison than was indicated by the
preliminary reports covering the first half of the month.
Apparel store sales, however, showed a decline from a
year ago for the first time since April.
Stocks of merchandise on hand in department stores
at the end of November were practically unchanged from
those of a year previous. Collections on charge accounts
remained slightly lower than in 1928.
Percentage
change
November 1929
compared with
November 1928

Locality

Net
sales
New York.............. ............................................
Buffalo................................................................
Rochester...........................................................
Syracuse.............................................................
N ewark...............................................................
Bridgeport..........................................................
Elsewhere...........................................................
Northern New York State.........................
Central New York State............................
Southern New York State.........................
Hudson River Valley District..................
Capital District............................................
Westchester District....................................

+
—
+
—
—
—
+
—
—
+
+
+
+

Per cent of
accounts
outstanding
October 31
collected in
November

Stock
on hand
end of
month

1928

1929

+
—
+
+
—
+
—

1.3
0 .6
2 .7
6 .3
5.1
3 .7
4 .6

5 4.7
54.4
44.8
3 8.3
45.9
36.7
42.1

52.3
50.3
43.3
33.7
46.1
38.4
38.7

0 .7
2 .4
1.3
5 .8
0 .8
0 .9
2 .2
4 .1
2 .3
0 .6
2 .0
6 .6
6 .4

All department stores.............................

+ 0 .3

+ 0 .2

50.8

49.0

Apparel stores...........................................

— 6 .4

— 0 .9

4 9.6

48.0

Sales and stocks in the principal departments are com­
pared with those of a year previous in the following
table.
Net Sales
percentage change
Nov. 1929
compared with
Nov. 1928
Toys and sporting goods..........................
Books and stationery................................
Shoes........... ..................................................
Toilet articles and drugs...........................
Hosiery.........................................................
Women’s ready-to-wear accessories. . . .
Women’s and Misses’ ready-to-wear. . . .
Luggage and other leather goods...........
Furniture......................................................
Linens and handkerchiefs.........................
Men’s and Boys’ wear..............................
Home furnishings........................................
Cotton goods...............................................
Men’s furnishings.......................................
Silverware and jewelry..............................
Woolen goods...............................................
Silks and velvets.........................................
Musical instruments and radio...............
Miscellaneous...............................................

Stock on hand
percentage change
Nov. 30, 1929
compared with
Nov. 30, 1928

+ 1 2 .3
+ 1 0 .8
+ 8 .5
+ 7 .9
+ 7 .8
+ 4 .4
+ 2 .0
+ 1.4
+ 0 .9
+ 0 .1
— 0 .4
— 0 .5
— 0 .7
— 0 .9
— 1.1
— 12.3
— 15.0
— 28.3
— 3 .8

— 1.1
+ 8 .4
— 2 .7
— 4 .7
+ 5 .8
+ 1 0 .9
— 6 .6
+ 1 8 .0
+ 8 .9
— 3 .2
— 7 .5
— 2 .3
+ 7.1
— 0 .8
+ 1 2 .0
— 2 .9
— 17.1
— 5 .7
— 7 .3

the only organizations that showed sales per store ma­
terially larger than a year previous.
Percentage change November 1929
compared with November 1928

Type of store

Number of
stores

Total
sales

Sales per
store

Grocery............................................... ..
Ten cent.......................................................
Drug.............................................................
Shoe..............................................................
Variety.........................................................
Candy...........................................................

+ 1 .5
+ 9 .0
+ 1 1 .5
+ 1 0 .4
+ 3 5 .0
— 0 .4

+ 1 3 .1
+ 7 .1
+ 1 1 .9
+ 8 .4
+ 2 4 .4
+ 5 .8

+ 1 1 .4
— 1.7
+ 0 .4
— 1 .8
— 7 .8
+ 6 .2

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

+ 8 .0

+ 1 2 .7

+ 4 .4

W o s leT a e
h le a r d
According to reports received from wholesale dealers
in this district, November sales averaged 6 per cent
smaller than a year previous, the largest decrease since
June 1928. Drugs and stationery sales continued to
show increases, quantity sales of silk goods were
larger than last year although the value was smaller,
and paper sales were about the same as last year,
but all other lines showed decreases. The decrease in
shoe sales was the largest in almost a year, and there
were substantial declines in sales of m en’s clothing, cot­
ton goods, and hardware. Jewelry firms reported a con­
siderable decrease in November, following increases in
sales in recent months, and diamond dealers reported a
decrease of nearly one-half from the sales of a year ago,
the largest reduction in recent years.
Orders reported by the Machine Tool Builders’ Associ­
ation were little more than half as large as in October
and were nearly 40 per cent smaller than in November
1928, doubtless reflecting the effects of the unusually
sharp curtailment of industrial activity which occurred
in November.
Stocks of groceries and drugs remained considerably
larger than a year ago at the end of November, and
stocks of cotton goods showed a small increase over
last year, following a decrease in October; stocks of
shoes, hardware, and diamonds and jewelry also were
smaller than last year.
Collections averaged a little
slower than in November 1928, although there were ex­
ceptions to this tendency in several lines.

Commodity

Percentage
change
November 1929
compared with
October 1929

Net
sales

C a S r Ta e
h in to e r d
The total November sales of the reporting chain store
organizations in this district were 13 per cent above those
reported in November 1928. The increases reported in
the sales of grocery, ten cent store, variety, and candy
chains were the largest in at least three months. The
drug and shoe chain systems also showed substantial in­
creases in their sales as compared with last year.
After allowing for the change in the number of stores
operated, however, the grocery and candy chains were




Groceries........................
Men’s clothing..............
Cotton goods.................
Silk goods.......................
Drugs..............................
Machine tools**...........
Stationery......................

— 7 .3
— 45.5
— 22.6
— 15.1*
— 18.7
— 25.0
— 16.8
— 44.5
— 13.4
— 11.5
— 35.0
— 22.7

Weighted Average... — 22.2

Stock
end of
month
+ 2 .9
— 6 .7
+ 2 .9 *
+ 6 .9
— 11.0
— 4 .9

} + 2 .4

Percentage
change
November 1929
compared with
November 1928

Net
sales

Stock
end of
month

— 1.4
+ 1 6 .1
— 8 .8
— 12.8
+ i.i
+ 6 .3 * — 0 .4 *
— 13.7
— 14.8
+ 1 8 .4
+ 1 3 .6
— 11.1
— 3 .8
— 38.5
+ 4 .1
+ 0 .1
— 46.0 I
— 21.7 > — 8 .5 }
— 6 .2

Per cent of
accounts
outstanding
October 31
collected
in November

1928

1929

68.1
34.7

69.5
34.4

48^9
45 .7
46 .2
50.4

46. i
42 .3
32.4
48.1

62.4
63.0

6 8.2
69.4

24.0

} 24.3

50.4

49.2

* Quantity not value. Reported by Silk Association of America
** Reported by the National Machine Tool Builders’ Association

FEDERAL RESERVE BANK OF NEW YORK
MONTHLY REVIEW, JANUARY 1, 1930

Business Conditions in the United States
(Summarized by the Federal Eeserve Board)
TNDUSTEIAL production declined in November for the fifth consecutive
month and was below the level of last year. Retail sales at department
stores continued in larger volume than a year ago. Wholesale commodity prices
moved downward in November and the first half of December.
P ro d u c tio n a n d E m p l o y m e n t

1925

1926

1327

Index Number o f Production
and Minerals Combined,
Seasonal Variations
average = 100 per

1928

Production in basic industries decreased by 9 per cent in November,
according to the Board’s index, and was 5 per cent lower than a year ago.
The decline in production, which began in midsummer, was restricted prior to
November largely to industries in which the expansion during the earlier part
of the year had been exceptionally rapid, particularly iron and steel, automo­
biles, and related industries. The same industries showed the largest reduc­
tions in November, but there were declines aiso in the copper, cotton and wool
textiles, and shoe industries, and, in smaller degree, in silk textiles and coal.
Production of crude petroleum was also curtailed. Volume of building con­
tracts awarded during the month continued to be considerably smaller than in
the corresponding period of 1928.
Employment in factories was also reduced during November to a level
slightly below a year ago, and there was a somewhat larger decrease in factory
payrolls. The decline in employment since midsummer, however, has been
relatively smaller than that in the physical volume of production. Employment
was in smaller volume than in November a year ago in the automobile, iron
and steel, lumber, and rubber products industries, and larger in the machinery,
textiles, paper and printing, leather, and chemicals industries.

1929

o f Manufactures
A djusted for
(1923-25
cent)

D is t r ib u t io n

Distribution of commodities, as measured by freight-car loadings, was in
smaller volume in November than in October, reflecting larger-than-seasonal
decreases in most classes of freight. Miscellaneous freight in less-than-carload
lots, however, which includes chiefly commodities for retail trade, showed the
usual seasonal change.
Department store sales in leading cities during the month were about one
per cent larger than last year, according to preliminary reports. Increased
sales were reported in four agricultural districts—Eichmond, Kansas City,
Dallas, and San Erancisco. In certain of the large industrial districts—Boston,
New York, and Cleveland— sales were approximately the same as in Novem­
ber 1928.

Index Numbers o f Factory Employment and
Payrolls, W ithout Adjustm ent for
Seasonal Variations (1923-1925
average = 1 0 0 per cent)
per

cm

120 r

W h o l e s a l e P r ic e s

Wholesale prices were at a lower level in November than in October and
continued to decline during the first half of December. The downward move­
ment, which had previously involved principally commodities with organized
exchanges, became general during the latter part of the period.
B a n k Cr e d it
8 0 U™
.------------- I
------------------L__________ 1
____________I
1925
1926
1927
1928

I 80
1929

BtlUO N S OF DOLLARS

BILLIONS OF DOLLARS

porting Member Banks in Leading Cities
(Latest figures are averages o f first
two weeks of December)




Liquidation of bank credit, which had begun early in November, continued
throughout that month and the first two weeks of December, and on December
total loans and investments of reporting member banks were at about the
same level as on October 23, prior to the increase caused by the withdrawal of
funds by non-banking lenders. At member banks in New York City loans were
somewhat larger and investments considerably larger on December 11 than on
October 23, while at reporting banks outside New York loans on securities, all
other loans, and investments were smaller than on that date.
Eeserve Bank credit outstanding was also reduced during November and
the first two weeks of December, largely in consequence of reduction in bal­
ances of member banks at the Eeserve Banks, which accompanied the liquida­
tion of member bank credit. The decrease in reserve balances released reserve
funds in more than sufficient volume to meet the export demand for gold
amounting to $65,000,000 during the period, as well as the seasonal currency
requirements. Between November 6 and December 18, United States security
holdings of the Eeserve Banks increased considerably, while their holdings of
acceptances declined somewhat, and there was a reduction of $250,000,000 in
the indebtedness of member banks.
Money rates in the open market continued to decline and the discount rate,
which had previously been reduced at five Eeserve Banks, was lowered at the
Kansas City Bank from 5 to ±y2 per cent.

11

W holesale Price Index o f United States Bureau
of Labor Statistics (1926 average = 100
per cent)

10