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
o f C r e d it a n d
S e c o n d
Federal R eserve A gen t

B u s in e s s

F e d e r a l

D is tr ic t

Federal R eserve Bank, New York

M o n e y M a r k e t in D e c e m b e r
The principal influence on the money market during
the past month was a large demand for currency, due in
part to the usual seasonal requirements for the holiday
and in part to an unusual demand immediately pre­
ceding and following the closing of the Bank of United
States.
For a number of years past there had been no failure
of any important banking institution in this district, but
on December 11 the Bank of United States in New York
City was taken over by the New York State Superin­
tendent of Banks at the request of the directors of the
bank, after persistent and vigorous efforts by the State
Superintendent and other bankers had not succeeded,
under the limitations of action at such a time, in discov­
ering any practicable plan by which the bank might
properly be kept open. The Bank of United States had
about 400,000 depositors at 59 branches, and total
deposits on the date of closing amounting to more than
$160,000,000. It was a member of the Federal Reserve
System but not a member of the New York Clearing
House. To meet the situation in part, 23 New York

A ount of M
m
oney in C
irculation in the U
nited States (W
eekly
averages of daily figures)




R e s e r v e

C o n d itio n s

January 1, 1931

banks offered to make loans to depositors of the Bank of
United States up to 50 per cent of the net amount of
their deposits. By the 30th of the month, 34,338 loans
had been approved aggregating less than $13,000,000.
The closing of the Bank of United States was followed
by considerable withdrawals of deposits from several
other banks doing business with a somewhat similar
type of customers in the same general localities. There
were indications that these withdrawals of deposits were
accentuated by the deliberate circulation of false and
malicious rumors. These banks called upon the Reserve
Bank for large amounts of currency. Other banks more­
over drew more than the usual amounts of currency to
be prepared in the event of any possible exceptional
withdrawals. Large demands for currency from this
cause came at a time of normal increase in currency re­
quirements for the holiday trade. As a result a net
amount of over 170 million dollars of currency was
drawn from the Federal Reserve Bank of New York in
the week ended December 13.
This occurrence illustrated on a large scale much the
kind of service which the Federal Reserve mechanism
was designed to render. The large demand for currency,

Total Federal Reserve Credit Outstanding
of daily figures)

(Weekly

averages

2

MONTHLY REVIEW, JANUARY 1, 1931

due in part to some apprehension of depositors, paral­
leled in some respects the currency demand in 1907,
which was vividly in mind when the Reserve Act was
drafted. The Federal Reserve mechanism was adequate
to the demand, currency being freely supplied to any
member bank applying for it, without any appreciable
strain upon the credit situation. Call money rose from 2
to 2 % per cent for three days and then reverted to 2 per
cent. Banks secured the extra currency they required
largely by borrowing at the Reserve Bank upon the basis
of eligible assets, though there was also some increase in
Federal Reserve holdings of bankers acceptances and
Government securities. The effect of this operation on
the position of the New York Reserve Bank is indicated
by the reserve ratio, which was 76.0 on December 17, as
compared with 82.7 on December 10.
After a few days, currency withdrawals subsided to
about normal for the season and some of the currency
previously withdrawn was returned to the Reserve Bank.
The banks subjected to withdrawals following the
closing of the Bank of United States generally met with­
out difficulty the demands upon them, with the single
exception of the Chelsea Bank and Trust Company, a
State bank, not a member of the Federal Reserve Sys­
tem, with about $12,000,000 of deposits, which was closed
by the State Superintendent of Banks on December 23.
The first diagram on the preceding page shows the effect
on the total amount of currency outstanding throughout
the country of the increased currency demand on the part
of the banks during the first half of December, added to
the usual large currency requirements of the holiday trade.
The second diagram shows the corresponding movements
in Reserve Bank credit, through which funds were sup­
plied to meet the demands on member banks. In the lat­
ter part of November and early December the require­
ments for funds, which were largely seasonal though in­
creased somewhat by banking disturbances elsewhere,
were met in part through member bank sales of accept­
ances to the Reserve Banks, and in part through a rather
general increase in member bank borrowing at the Re­
serve Banks, not only in New York but in other districts.
There was also a small increase in Government security
holdings by the Reserve Banks, partly reflecting the
Treasury special one-day certificates of indebtedness
given the New York Reserve Bank for a few days around
December 15 to cover a temporary excess of Treasury
disbursements over receipts. Just before Christmas the
final currency requirements for the holiday were met
largely by withdrawals of funds from New York by
banks in other parts of the country and by member bank
borrowing from the Reserve Bank in New York.
In general, money rates have given only slight indica­
tion of any tightening of money market conditions dur­
ing the month, notwithstanding the fact that the peak
of the demand for funds was reached during this period.
A temporary advance in call money rates to 3 % and 4
per cent near the end of the month reflected the usual
preparations for year-end statements and disbursements.
Effective December 24 the Federal Reserve Bank of
New York reduced its discount rate from 2 % to 2 per
cent.




Money Rates at New York
Dec. 31, 1929 Nov. 28, 1930 Dec. 30, 1930
Stock Exchange call loans.....................
Stock Exchange 90 day loans................
Prime commercial paper........................
Bills—90 day unindorsed.......................
Customers’ rates on commercial loans..
Treasury certificates and notes
Maturing March 15 (yield)...............
Maturing June 15 (yield)..................
Federal Reserve Bank of New York re­
discount rate.......................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed bills

* 5 ^ -6
tt4M -5
5
4
f5.57

*2
tt2-2M
2 ^ -3
IK
f 3 .73

2.40
2.98

1.19
1.35

4H

2M

2

4

%
2

1%

*2-4
tt 2 M -2 ^
2M-3
IK
f 3 .75
1.34
1.45

* For preceding week
f f Nominal
t Average rate of leading banks
at middle of month
J 1-75 days— 1K per cent.
B il l M a r k e t

During the month of December there was a moderately
large turnover of bills in the discount market. The sup­
ply of bills offered to the market continued to some ex­
tent to be restricted by banks withholding new bills in
their own portfolios, but offerings of bills to the discount
market somewhat exceeded the investment demand, a
considerable part of which represented orders for foreign
account. Consequently, despite a net increase in Federal
Reserve holdings, the portfolios of the bill dealers in­
creased somewhat during the month; however, they re­
mained comparatively small for this time of the year.
Open market bill rates were unchanged throughout the
month, although the New York Reserve Bank’s bill buy­
ing rates were reduced on December 24, coincident with
the cut in the Reserve Bank discount rate.
An increase in Federal Reserve bill holdings, amount­
ing to $84,000,000 between the reporting dates of No­
vember 26 and December 24, reflected in large part sub­
stantial sales of short maturity bills by the New York
banks to maintain their required reserves during the end
of November and first of December transactions, and
also to meet the increased demands for funds later in
the month. Federal Reserve holdings declined somewhat
in the third week of the month, but increased again on
the approach of Christmas and the year-end.
The volume of bankers acceptances outstanding in­
creased $63,000,000 further during November to $1,571,000,000 at the end of that month. This rise reflected
chiefly increases of $38,000,000 in domestic warehouse
credits, $15,000,000 in export acceptances, and $11,000,000 in bills based on foreign shipped or stored goods.
The increase in domestic warehouse credits was a sea­
sonal development, having occurred in somewhat similar
amounts in November of the two preceding years, and
the rise in export acceptances likewise was in accord­
ance with the seasonal expectation. The month’s increase
in acceptances based on goods stored in or shipped be­
tween foreign countries raised the total of this class of
acceptances outstanding to a level $128,000,000 higher
than a year ago. The increase in this type of acceptance
and small increases in domestic warehouse credits and
in bills covering domestic shipments have been exceeded
by declines of more than $100,000,000 in both export and
import bills, so that total outstandings for November
were $87,000,000 smaller than a year ago. Undoubtedly
lower commodity prices have played a part in this
decline.

3

FEDERAL RESERVE AGENT AT NEW YORK
C o m m e r c ia l P a p e r M a r k e t

Rather quiet conditions prevailed in the commercial
paper market during December. On the one side, there
was the lack of interest from investing banks in all but
the best names, which was attributed to the usual sea­
sonal demands on the banks at this time and to the
banks’ efforts to maintain strong cash positions on ac­
count of unsettled banking conditions in certain sections
of the country. A t the same time, supplies of new paper
coming into dealers’ hands were of small proportions, as
might be expected at this season of the year, in view of
the desire of commercial concerns to show as little in­
debtedness as possible in year-end statements. The paper
of highest grade commercial concerns continued to com­
mand the 2 % per cent rate, but the ordinary prime
paper was more generally offered at 3 per cent than at
the lower quotation.
The diminishing activity of the commercial paper mar­
ket in the closing months of the year is indicated in the
volume of paper outstanding as reported to this bank by
leading dealers. On November 29 the total outstandings
were $448,000,000, an amount 8 per cent lower than at
the end of October and 19 per cent under the April peak.
The November figure, however, remained $133,000,000,
or 42 per cent, above the outstandings of November 1929.

S e c u r ity M a r k e t s
Renewed weakness developed in the stock market dur­
ing the first half of December, and the general level of
share prices receded to new lows since the spring of
1927. Average prices dropped to a level 7 per cent under
the previous low of the year reached in the first part of
November and 18 per cent below the level reached at the
end of the severe break in stocks that occurred during
the autumn of 1929. The total decline of 55 per cent
from the peak of September 1929 has probably been the
largest ever experienced on the Exchange. The extent of
the shrinkage in the various classes of stocks has varied
considerably— utility shares receded to the levels of early
1928, while the industrial stocks declined to levels not
previously touched since 1927, and railroad shares
reached the lowest points since 1925.
Trading throughout this period of liquidation of the
first half of December remained of an orderly character,
and on only one day when the trend of prices was down­
ward did the turnover exceed 4 million shares. Shortly
after the middle of the month a moderate rebound in
stock prices occurred, but movements near the end of
December were irregular.
Weakness in the bond market, which had been in evi­
dence during October and November, continued in the
first half of December, accompanying the declines in
stock prices. The drop during this period was much more
rapid than in the preceding two months, and some of the
currently published averages of domestic corporation
bond prices declined to new lows for several years, while
only those composed of the higher grade issues remained
above their 1929 lows. Declines in the various price aver-




PRICE AVERAG E

i
/*■"

v l U S. G \
.
O
_u
✓
n
'W / V ^
■
L
' w
v
V

A /
A V^'"....

........ .

J

| \w
n
v V-%FOREIC;n -j
TT"
"A h t

"V

^

y\\

J

DOM
ESTIC CORpW-v

.

\f"~\

IVa

M

1m

i i
... i

i

I

..

1......1-

1

... 1

1

1

Price Movements of United States Government, Foreign, and
Domestic Bonds (Baker, Kellogg & Co. average of foreign
bonds, and Federal Reserve Bank of New York
composite of 5 domestic bond averages)

ages during this part of December ranged from 1% to
4
points, but as a result of a reversal in bond price
movements during the second half of the month, the net
losses for December were reduced to a range of y 2 to 2^4
points. In an effort to portray the movement of domestic
corporation bond prices in general, giving consideration
to both high grade and relatively low grade issues, a com­
posite of the currently available bond price averages has
been computed and this is shown in the accompanying
diagram, together with price averages of foreign bonds
and of United States Government long-term issues.
Like domestic corporation issues, prices of foreign
bonds listed in this market dropped considerably in
December and an average of 40 representative issues
reached the lowest level since at least 1924. The marked
declines in domestic corporate and foreign bonds oc­
curred at a time when there were indications that some
of the commercial banks were effecting a change in the
composition of their investments by acquiring United
States Government securities and disposing of other
holdings. Accompanying this movement, prices of United
States Government long-term bonds held relatively
steady; at no time during the month did they show an
average decline of more than y 2 point.
N e w F in a n c in g
The volume of new security offerings put out during
November, exclusive of refunding issues, was slightly
below the relatively small totals for the previous two
months, but remained somewhat above the low figure for
November 1929. Domestic corporate new financing to­
taled only $135,000,000, as compared with $127,000,000
in October and a monthly average of $538,000,000 in the
first half of this year. State, municipal, and farm loan
issues totaled $112,000,000 in November, a reduction of
one-third from the previous month and also somewhat
less than the average of the first half of the year. Public
offerings of foreign securities were of almost negligible

4

MONTHLY REVIEW, JANUARY 1, 1931

amount, but total foreign financing for the month, in­
cluding a $78,250,000 German Government private credit
placed here, and a $5,000,000 Kingdom of Hungary se­
curity issue which was also placed privately, amounted
to $84,000,000.
For the first eleven months of 1930, the total amount
of new securities offered, other than those for refunding
purposes and those issued by investment trusts, and finan­
cial trading and holding companies, has been approxi­
mately $6,300,000,000, a reduction of $1,000,000,000 from
the similar flotations during the corresponding period of
1929. The decline has been entirely in domestic corpora­
tion security issues, since both State and municipal is­
sues and foreign flotations have been larger than in the
first eleven months of 1929.
A further decline in the issuance of new securities
occurred during December, and the aggregate for the
month appears to have been only about one-third as large
as the figure for December 1929. In the domestic field,
the small offerings were about evenly divided between
public utility bonds and State and municipal issues;
there was virtually no industrial and railroad financing
done by means of securities. Foreign flotations continued
to be extremely small.
F o r e ig n E x c h a n g e
Movements in the foreign exchanges were irregular
in December as in the previous month, but on the
whole the tendency of the principal currencies was to­
wards increased firmness. This was true of sterling and
French francs, which towards the end of the month were
quoted at $4.85% and $0.0393 3/32, respectively; of
guilders, which opened the month at $0.4023^4 and
reached $0.4030% on the 26th; and of Swiss francs,
which moved up by some five points to $0.19421 in the
/2
course of the month. The Scandinavian exchanges were
fairly steady, with Swedish crowns three to four points
above their parity of $0.2680. Diverse movements were
reported in the reichsmark and the lira, both firming
until around the 15th, and then declining slightly below
the levels of the opening of the month. The peseta stood
at $0.1126 on the 1st, but weakened to $0.1010 on the
15th, after which a recovery occurred which left the
quotation steady at around $0.1066.
Canadian dollars moved from a premium to a discount
on the 8th and continued around the gold import point
to this country during the rest of the month. The A r­
gentine peso weakened almost without interruption from
$0.7813 on the 1st to $0.7273 on the 27th, a new low for
many years. Japanese yen strengthened gradually dur­
ing the first ten days, weakened slightly, and then ef­
fected a partial recovery to $0.4968, three points above
the December 1 quotation.

$1,650,000 from Cuba, and $975,000 from Colombia. Ex­
ports were negligible, but there was a loss to the coun­
try’s gold stock through an increase of gold held under
earmark for foreign account, amounting to $15,500,000.
A preliminary estimate indicates a net gain of about
$15,000,000 of gold during December, and a net gain for
the year of about $275,000,000.
France continued to make heavy withdrawals at the
Bank of England during December, amounting to over
£7,400,000. Germany also appeared as a buyer, taking
£1,800,000. These losses were offset in part by the re­
ported receipt of sovereigns at the Bank of England, of
which £1,000,000 came from South Africa and £920,000
from Brazil. In addition to the gold obtained at the
Bank of England, France took the bulk of the South
African gold offered in the market, amounting to
£3,800,000.
V a lu e o f C ro p s
The Department of Agriculture estimates that the
value of 1930 crops showed a decline of 2 % billion dol­
lars, or 28 per cent, from the value of 1929 crops; this
year’s estimated return from agricultural commodities
other than livestock, at 6 ^ billion dollars, was the small­
est since 1921. As indicated in the accompanying dia­
gram, the value of all of the important crops was con­
siderably smaller than a year ago. The principal cause
of this loss is to be found in the drastic decline in prices,
even in the cases of crops the yields of which were
smaller than usual. Crop prices on December 1 were 24
per cent under those of a year earlier, and were the
- lowest for any December since 1915.
Total crop production during 1930 was about 5 per
cent under the previous year, although a number of im­
portant crops showed gains over 1929. The most im­
portant decline was in the corn crop, which was 533,000,000 bushels, or 20 per cent, smaller than that of 1929;
the 1930 crop was in fact the smallest since 1901, and
did not come within 200,000,000 bushels of any interven­
ing year. Of the other crops shown in the diagram, in­
creases over 1929 were indicated in wheat, oats, barley,
potatoes, apples, and oranges, while there were declines
in cotton, hay, and tobacco.
120

140

CORN
HAY
COTTON
WHEAT
OATS
POTATOES
TOBACCO

G o ld M o v e m e n t
Of particular interest during December was the re­
ceipt of $22,000,000 of gold from Canada, reversing the
movement begun last July during which $36,500,000 was
exported to that country. This was the first material
import movement from Canada since March 1929. In
addition, $4,900,000 was received from Argentina,




APPLES
BARLEY
ORANGES
VALUE

Size and V
alue of 1930 C
rops C pared w 1929. (Figures
om
ith
for 1929 = 100 per cent)

FEDERAL RESERVE AGENT AT NEW YORK

Production and Trade in 1930

PER CENT

A compilation of all the data available at this time
pertaining to production and trade in 1930 indicates the
extent to which the current recession has affected the
aggregate business turnover for the year. The prelim­
inary composite of 160 series has been prepared by using
actual data as far as possible, usually for the first eleven
months, and adding estimated figures for the remainder
of the year, with the leading1items weighted in order to
have their importance properly represented in the group
averages and aggregate. According to this estimate, the
volume of production and trade in the United States dur­
ing 1930 was about 14 per cent smaller than in 1929, a
considerably larger decline from the previous year than
occurred in either of the two preceding years of reces­
sion— 1924 and 1927. For the year as a whole, the 1930
decline appears to have been somewhat less, however,
than that of 1921 when the decline amounted to approxi­
mately 17 per cent.
In order to show the relative extent of the decline dur­
ing the past year, the data for the years 1919-1930 have
been plotted on a ratio scale in the accompanying dia­
gram. To the broad weighted index of a large number
of series available for past years has been added an esti­
mated figure for 1930, based on the preliminary data ob­
tainable at this time.
The group of series representing building activity
showed the largest decrease in 1930 from the level of
the previous year. Manufacturing output registered the
next largest reduction, and the production of minerals
and metals showed a decline that was not greatly less.
Per cent change
1930 from 1929

Per cent change
1930 from 1929
Manufactures

Foods

— 27
Cheese.....................
Rayon production.................. ...— 58
—1
1
Automobiles, pass, cars.............— 41
Lard........................
— 9
Automobiles, trucks............... ...— 30
Swine slaughtered.
—6
Locomotives, shipments........ ...— 27
Butter.....................
— 4
Wool consumption.....................—26
Meat.......................
— 3
Tires, pneumatic........................—25
Sugar meltings-----— 3
Cotton consumption.............. ...— 24
Wheat flour............
—2
Steel castings.......................... ...— 17
Cattle slaughtered.
Calves slaughtered
Boots and shoes.........................— 15
+ 1
Silk consumption.......................— 13
Poultry...................
+ 2
6
Paper, total................................— 9
Fish
Sheep slaughtered...................... +18
Tobacco products......................— 4
Group average....................... — 1
Electricity............................... .. — 2
Gasoline................................... .. + 4
Railway cars, shipments...........+ 9 Building Materials and Construction
-31
Group average.................... ...— 19
Common brick
Lumber, Douglas fir.................. — 23
Minerals and Metals
os
Building contracts.....................
— 20
Steel ingots........................
Cement....................................... — 6
Pig iron................................... ...— 25
Concrete pavements..................
+ 6
Copper..................................... ...— 25
Group average....................... —26
Zinc ...........................................— 20
Lead..............: ..........................~ i | Trade
Bituminous coal..
Auto exports.............................. ...— 56
-11
Petroleum, crude.
Grain exports............................. ...— 24
-10
Anthracite coal...
■9R
Raw silk imports....................... ...— 21
Gold.....................
Carloadings, other..................... ...— 17
Group average.
Crude rubber imports.............. ...— 15
Carloadings, mdse, and misc... . *
—12
Crops
—20
Cotton exports........................... ...— 10
Corn...........
— 18
Wholesale trade......................... ...— 10
Hay...........
— 4
Department store sales.................— 7
Cotton. . . . .
— 2
Coffee imports........................... ...+ 5
Sugar, cane
— 1
Group average....................... ...— 15
Tobacco-----1
Potatoes, white,
+ 1
Rice..........................................
+ 2
Miscellaneous
Wheat......................................
4* 5
Shares sold on N. Y. Stock
Barley......................................+ 8
Exchange.....................................
—29
Tomatoes................................ +12
Newspaper advertising................... — 13
Oats......................................... +14
Magazine advertising..... ................ — 11
Apples.....................................
+15
New incorporations in N. Y.
Peaches....................................+16
State............................................. — 8
R y e ............................................................. +20
Group average......................................... — 15
Oranges....................................
+41
Group average.................... — 5
Average of 160 series...................... — 14




Index of General Production and Trade in the United States.
(Figure for 1930 preliminary; ratio scale used to show
proportionate changes. 1923-1925 average =
lOO per cent)

General trade, however, appears to have shown a some­
what smaller decrease than occurred in the foregoing
production groups, and the output of foods seems to
have been curtailed hardly at all. Crop production, the
other principal group, was reduced about 5 per cent,
taking into account all the principal agricultural com­
modities except live stock. The accompanying table gives
the more important series included in the group averages.
C o m m o d it y P ric e s
Further substantial declines occurred in commodity
prices during December, and the weekly index of the
National Fertilizer Association, which is composed of the
prices of more than 450 commodities, established a new
low level for recent years. Most of the important metals
displayed renewed weakness. Following the abrupt rise
in copper prices in November, producers dropped their
nominal domestic quotation from 12 to 11 cents, and in
the outside market the metal was reported available for
a time in December as low as 9 % cents, though the price
later strengthened to 10% cents. The Iron A g e com­
posite prices of finished steel and of pig iron receded to
new low levels since 1922 and 1915, respectively, but
scrap steel was steady at the low of $12.75 a ton, fol­
lowing the decline of $3.00 during October and Novem­
ber. Lead was unchanged in December, but zinc at a
low of 4.00 cents a pound was only fractionally above its
October low, and tin fell to 2 3% cents a pound, reported
to be the lowest price since 1902, but recovered three
cents near the end of the month. Silver dropped to
slightly below 31 cents an ounce, the lowest price in the
recorded history of the commodity. The fuels were gen­
erally steady in price.
Prices of agricultural commodities for the most part
were weak. One of the principal developments was a fall
in the price of raw cotton at New York to 9.45 cents a
pound, the lowest figure since early in 1915. Wool also
established a new low for the current decline at slightly
under 61 cents for the domestic grades, but raw silk

MONTHLY REVIEW, JANUARY 1, 1931

6
PER GENT

Movements of Prices of Raw Materials, Semi-Manufactured Ar­
ticles, and of Finished Products. (United States Bureau
of Labor Statistics Indexes; 1926 average =
100 per cent)

moved irregularly upward. Hog prices were somewhat
lower, and hides receded to a new low for recent years
at 10 cents a pound; steers were slightly higher on the
average. Cash wheat remained fairly steady, ranging be­
tween 75 and 80 cents a bushel, as against a low of 70*4
cents reached in the middle of November, but corn
dropped to a new low for a number of years, notwith­
standing the unusually small crop. Declines occurred
also in refined sugar and crude rubber.
The major classifications of commodity prices com­
puted by the Bureau of Labor Statistics— raw materials,
semi-manufactured articles, and finished products— af­
ford an interesting comparison, which is illustrated in
the accompanying diagram. During most of 1929, when
commodity prices were relatively stable, the three group
indexes remained approximately at the same level, rela­
tive to 1926 prices, but in the rapid decline this year
they have tended to diverge. In the case of finished
products, the decline has been considerably less than in
the other two groups. The movement of the semi-manu­
factured articles group, which includes the important
metals, and the trend of raw materials were approxi­
mately parallel until August, when the rise in certain
agricultural commodities as a result of widespread
drought brought some recovery in the raw materials
group. This index has more recently declined, however,
and the differential between the two groups has now been
virtually eliminated, so that while finished products in
November were 14 per cent below the July 1929 level,
raw materials and semi-manufactured articles showed
declines of 23 and 21 per cent, respectively.

dropped to a very low level toward the close of the
month, due to year-end suspensions. Production of
bituminous coal and petroleum were further contracted
in December, while anthracite coal output increased.
Output of cotton goods increased somewhat further de­
spite some seasonal falling off in sales.
Monthly figures for November show that the general
tendency of industrial production continued downward,
and the seasonally adjusted index of the Federal Eeserve
Board reached a new low level for the current recession,
34 per cent below the high point of 1929. The most
notable exception to this general contraction of output
continued to be in the textile industries; even after al­
lowance is made for the usual autumn increase and the
long-time growth of the industries, mill consumption
both of raw cotton and of raw silk has shown an in­
crease from the low levels of a few months ago, a sub­
stantial increase in the case of silk. Automobile produc­
tion on a daily average basis showed little change in
November, as contrasted with a usual seasonal decline.
On the other hand, declines occurred during November
in output of all of the important metals, with steel ingot
production down 11 per cent, and, after allowance for
seasonal fluctuations and year-to-year growth, an index
of the production of metals as a whole reached the low­
est level since the early months of 1922. Output of
bituminous coal, after expanding in the first part of the
month, declined later, and showed a small loss for the
month as a whole; production of anthracite coal, of coke,
and of crude petroleum also showed declines in Novem­
ber, both before and after seasonal adjustment. Other
industries also curtailed production rather generally.
(Adjusted for seasonal variations and usual year-to-year growth)
1929

1930

Nov.
Metals

Copper, U. S. mines..................................
Tin deliveries.............................................

Sept.

Oct.

Nov.

107
94
107
103
84
97

79
81
81
89
75
105

71
69
77p
82
71
113

62
62
74p
73
55
89

61
119

49
75

31 p
66p

35p
79p

84
92
108
103
99

71
78
84
87
88

90
84
105
104r
100

68
70
101
106r
95

70
66
113
98r
80p

71
63p
115
95r
61 p

97
96
103
102

98
98
84
95

96
91
92
98

89
97

109
70
95
96r
96r

106
57
90
87r
89r

94
61
84
89r
80r

83

Automobiles

Passenger cars...........................................
Motor trucks.............................................
Fuels

Bituminous coal........................................
Anthracite coal..........................................
Petroleum, crude.......................................
Petroleum products..................................

Textiles and Leather Products

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

74
103
80
86
85

71p
83p
75
84p

Foods and Tobacco Products

P r o d u c tio n
Available data for December indicate a further reces­
sion in productive activity of at least seasonal propor­
tions during the month. Steel mill activity, as measured
by the Iron A g e operating ratio, receded to 38 per cent
of theoretical capacity in the first week of December, and
after remaining unchanged during the next two weeks,




Live stock slaughtered..............................
Wheat flour................................................
Sugar meltings, U. S. ports......................
Tobacco products......................................
Miscellaneous

Printing activity........................................
Paper, newsprint r...................................
Wood pulp r...............................................
p Preliminary

r Revised

90

83r

FEDERAL RESERVE AGENT AT NEW YORK

Building
The volume of building contracts awarded in 37 States,
from which reports are collected by the F. W . Dodge
Corporation, underwent a contraction of 25 per cent in
November, and as this decline was more than the usual
seasonal drop, this bank’s index of building contract
awards, in which allowance has been made for long time
growth and seasonal influences, declined 5 points further
to a new low level since 1921. The decrease in contracts
compared with November 1929 amounted to 35 per cent.
Non-residential building other than public works and
utilities registered the largest decline— 51 per cent— re­
flecting principally decreases of 70 per cent in commer­
cial and 60 per cent industrial contracts. The recession
in non-residential building has been in progress for a
much shorter time than the decline in residential con­
struction, and comparisons with a year ago are with a
rather high level of activity, whereas the 29 per cent
decline for residential contracts is in comparison with
figures which had already shown a considerable reduc­
tion. For public works and other engineering projects,
the November awards were nearly up to the level of a
year ago.
The total volume of building and engineering work
contracted for during the first eleven months of the year
was 21 per cent smaller than in the corresponding period
of 1929, and 31 per cent less than in 1928. Residential
construction suffered the largest decline both relatively
and in actual amount, with especially large reductions
in the amount of apartment house and hotel construc­
tion ; the most severe declines in this type occurred dur­
ing the first half of the year, however, and the figures
for the subsequent five months showed little more than
seasonal fluctuations. Public works and other engineer­
ing work was somewhat heavier than in the previous
two years, while other non-residential contracts showed
a sizable decline, especially in the latter part of the year.
During the first three weeks of December, the daily
average volume of contracts placed in the 37 reporting
States showed a drop from the previous month, in keep­
ing with the usual seasonal tendency, and continued
much below the level of a year ago.
E m p lo y m e n t a n d W a g e s
Industrial employment in the United States declined
by more than the usual seasonal amount from October
to November, and was 18 per cent below the level of No­
vember 1929. As a result of this movement, the season­
ally adjusted index of the Federal Reserve Board de­
clined to a new low level since 1921. The New York
State Department of Labor reported a further decline of
3.1 per cent in employment in representative New York
State factories, whereas in past years the average No­
vember decline, which usually begins the seasonal cur­
tailment, has amounted to 0.5 per cent. The rate of
voluntary labor turnover, reported by the U. S. Bureau
of Labor Statistics, reached in November a new low level
for the twelve years for which the figures are available.
Factory payrolls in New York State declined 5.2 per
cent further in November, as compared with a usual sea­
sonal drop of not more than 1 % per cent. Consequently,




7

the average weekly earnings of factory employees in New
York State dropped to $27.41, the lowest level since
1924; this decline probably reflects a reduction of work­
ing hours to a greater extent than a general decline in
wage rates.
In d e x e s o f B u s in e s s A c t i v i t y
According to this bank’s indexes, general business ac­
tivity declined somewhat further in November. Car load­
ings of merchandise and miscellaneous freight, consid­
ered by many as one of the best indicators of general
business conditions, showed more than the usual decline
from the previous month, and, after seasonal adjustment,
were the smallest since 1922. In the first part of Decem­
ber, however, loadings of this type of freight showed no
more than the usual contraction that takes place as the
year draws to a close.
A number of the other indexes also declined in No­
vember. Merchandise exports declined 12 per cent and im­
ports 17 per cent, and railroad loadings of bulk freight
showed a reduction that was larger than the usual sea­
sonal decline. Average daily department store sales
in the Second District, on the other hand, showed at least
the usual seasonal expansion in November, and the aver­
age daily amount of life insurance sales increased. The
number of business failures declined 4 per cent from Oc­
tober to November, a favorable development in view of
the seasonal tendency toward an increase in the number
of failures.
(Adjusted for seasonal variations and usual year-to-year growth)
1929

1930

Nov.

Sept.

Oct.

Nov.

95
88
84
113
84

86
74
79
99
68

84
73
71p
104p
74

80
69
63p
89p
72

93
104
104
98

90
88
92
87

89
86
82
85

91
89
88
80

Primary Distribution

Car loadings, merchandise and misc........
Car loadings, other....................................
Panama Canal traffic................................
Distribution to Consumer

Department store sales, 2nd Dist............
Chain store sales, other than grocery.. . .
Life insurance paid for..............................
Advertising.................................................
General Business Activity

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

117
202

92
113

91r
114

87
92

130
189
239
98
97
100
100
93
79
73

100
118
221
91
88
86
123
72
98
58

100
115
242
91
88p
84
119
68
90
61

94
87
166

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

174
226
172

167
225
164

163
221
163

p Preliminary

r Revised

82
113
63
83
161
219
161

*1913=100

F o r e ig n T r a d e
This country’s foreign merchandise trade during No­
vember showed substantial decreases from the figures
reported for October, although no decided seasonal tend­
ency has appeared in previous years, and continued to
show large declines from the level of the previous year.

8

MONTHLY REVIEW, JANUARY 1. 1931

Exports, at $289,000,000, were the smallest in dollar
value for November of any year since 1914, while the
valuation of $205,000,000 for imports was smaller than
in the corresponding month of any year since 1916. In
the case of both exports and imports, however, the level
was not quite as far below that of 1929 in November as
in October.
November exports of raw cotton were reduced from a
year ago by about 13 per cent in quantity, and about 46
per cent in value. Shipments abroad of grains and grain
products were 54 per cent smaller in value than in No­
vember 1929, although the decrease in quantity was con­
siderably less. The volume of both raw silk and crude
rubber imports decreased, after a temporary gain in
October; compared with a year previous, silk imports
showed a decline of 12 per cent, and rubber imports
were down 22 per cent.

Sales and stocks by departments are compared with
November 1929 in the following table.
Net sales
percentage change
November 1930
compared with
November 1929
Toilet articles and drugs.....................
Women’s and Misses’ ready-to-wear..
Men’s furnishings................................
Cotton goods........................................
Toys and sporting goods.....................
Women’s ready-to-wear accessories...
Silverware and jewelry........................
Linens and handkerchiefs...................
Men’s and Boys’ wear........................
Woolen goods.......................................
Home furnishings................................
Luggage and other leather goods.......
Books and stationery..........................
Silks and velvets..................................
Musical instruments and radio..........
Miscellaneous.......................................

Stock on hand
percentage change
November 30, 1930
compared with
November 30, 1929

+ 4.6
+ 2.0
— 4.1
— 4.8
— 5.2
— 5.4
— 5.6
— 7.1
— 7.4
— 7.9
— 8.1
— 9.0
— 9.1
— 9.4
— 11.4
— 13.4
— 14.8
— 17.3
— 15.7

— 6.9
— 7.5
— 7.8
— 2.2
— 1.5
— 6.4
— 5.8
— 3.2
+ 9.9
— 4.5
— 14.8
— 18.0
— 4.3
— 14.6
— 14.5
— 18.3
— 2.8
+ 5.7
— 15.1

D e p a r t m e n t S to re T r a d e
Reports from the leading department stores in the
metropolitan area for the first 24 days of the month in­
dicated that the holiday trade in these stores was about
4 % per cent smaller than a year ago. There was one
more selling day this year than in the corresponding
period in 1929, but it is not clear that this had any ma­
terial effect on the volume of business done. Assuming
a decrease of the same amount for the entire month of
December, the total sales of the reporting stores for the
year 1930 will have been about 2 % per cent smaller than
in the previous year. Taking into consideration the
downward tendency of prices during the year, it seems
probable that the actual quantity of goods sold compared
favorably with that of 1929.
November department stores sales were nearly 8 per
cent smaller than in 1929, but as there was one less sell­
ing day this year, the average daily sales showed a de­
cline of about 4 per cent, a smaller decline than in Oc­
tober. A ll sections in this district reported a decrease in
sales, the declines ranging from 3 per cent to 16 per cent.
The leading apparel stores continued to report a sub­
stantial decrease in sales, but the decline in the daily
average volume of sales was the smallest since August.
Percentage
change
November 1930
compared with
November 1929

W h o le s a le T r a d e
Reporting wholesale firms in this district showed total
November sales 24 per cent below last year, which after
adjustment for the number of selling days indicates a
slightly smaller decline than in October. Total sales
reported by grocery, cotton goods, shoe, and paper
dealers decreased more than 20 per cent from the previ­
ous year. Sales of stationery, hardware, men’s clothing,
and diamonds also continued to be substantially below
November 1929, but the decreases in these lines were
smaller than in October. The sales of drugs continued
to show a smaller decrease than most lines, amounting
in November to 7 per cent. Machine tool orders, reported
by the Machine Tool Builders Association, declined
further and were only one-third the volume of last year.
Jewelry sales were only slightly more than one-half the
volume of a year ago. Contrary to the general tendency,
an increase in sales of silk goods was reported by the
Silk Association of America, but their figures are in
yardage rather than dollar value.
The value of stocks of merchandise held at the end of
November by all reporting lines, with the exception of
drugs, was considerably below 1929.

Per cent of
accounts
outstanding
October 31
collected in
November
Commodity

Locality

Percentage
change
November 1930
compared with
October 1930

Percentage
change
November 1930
compared with
November 1929

Per cent of
accounts
outstanding
October 31
collected
in November

Stock
on hand
end of
month

1929

1930

— 7.9
— 10.5
— 10.8
— 10.7
— 3.0
— 15.8
— 11.0
— 14.1
— 11.3
— 13.3
— 14.9
— 9.1
— 4.3

—
—
—
—
—
—
—

47.8
51.4
43.3
33.4
46.3
38.6
41.7

48.8
48.7
41.4
31.0
42.0
38.2
38.6

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

— 7.8

— 4.0

46.4

45.4

Weighted average. . . —24.8

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

— 14.0

— 13.2

47.5

45.0

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

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




3.4
5.4
5.5
6.8
3.4
8.2
6.8

Net
sales
Men’s clothing..............
Cotton goods................

Machine tools* * ...........

— 17.4
— 45.2
—26.1
— 8.4*
—27.3
—26.0
— 18.1
—33.0
— 9.0
— 15.3
— 17.2
—24.3

Stock
end of
month

Net
sales

+ 3.7

—20.0
— 33.2
—ii .3 —24.6
+ 0.9* + 2.4*
— 14.5 —22.9
— 11.1 — 7.0
— 6.4 — 18.0
— 66.2
— 22.3
—26.7
+ 0.8 — 32.9
— 4.2 —47.2
— 23.8

Stock
end of
month
— 13.7
—22.0
— 15.1*
— 30.6
+31.3
— 12.0

— 23.2
— 15.9

1929

1930

71.7
37.4
33.0
46.1
42.3
32.4
48.4

68.3
27.2
31.2
46.7
41.2
38.3
41.1

68‘ 2
.
62.7
} 27.2

64’.4
58.5
j 18.7

49.6

45.4