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R eport on B u sin e ss Second F e d e r a l F rom th e R ese rv e D is tr ic t F ed eral R eserve to th e N ew F ederal Y o rk , C o n d itio n s A g en t at R eserve J a n u a ry N ew Y o rk B oard SO, 1 9 2 0 I n th e t h ir t y d a y s en d ed J a n u a r y c a p ita l, w h ic h is still fa r g r e a te r th a n th e m a r k e t B a n k in g 2 0 th e re se rv e p e rc e n ta g e s of th e Fed eral R eserve B a n k of N e w Y o rk a n d o f th e en tire F e d e r a l R e s e r v e S y s t e m re a ch e d th e lo w e st p o in ts th u s fa r re g iste re d , in d ic a tin g a c o n tin u a n c e of th e g r e a t d e m a n d fo r c re d it n o t o n ly in c a n p o s sib ly s u p p ly . T h e fo llo w in g figu re s s h o w th e c re d it e x p a n sio n o f th e S e c o n d F e d e r a l R e s e r v e D is t r ic t a n d o f th e c o u n tr y as in d ic a te d b o th in th e to ta ls o f lo a n s, d is c o u n ts a n d in v e stm e n ts of re p o rtin g b a n k s a n d in N e w Y o r k b u t th r o u g h o u t th e c o u n tr y . T h e ease a n d liq u id a tio n w h ic h u s u a lly fo llo w s J a n u a r y 1 h a s n o t o ccu rred th is y e a r . T h e d e m a n d fo r b a n k c re d it is no less in siste n t th a n th e d e m a n d fo r in v e s tm e n t th e ir d e p o sit a cc o u n ts . C r e d it and L O A N S , E T C ., fin al d a te in O cto b e r, w h ic h w a s a t th e p e a k o f th e a u tu m n lo a n e x p a n sio n in th is d is t r ic t: A N D D E P O S IT S (In Millions) 71 Reporting Banks New York City Deposits Loans, etc. Date October 31 $5,789 $5,320 November 28 5,468 5,107 December 19 5,210 5,474 December 26 5,460 5,137 January 2, 1920 5,401 5,595 January 9, 1920 5,552 5,295 January 16, 1920 5,292 5,519 *On October 31 there were 783 reporting banks in all districts. T h u s w h ile th e re p o rtin g b a n k s fo r th e c o u n tr y as a w h o le w ere in c re a sin g th e ir lo an s to th e to ta l of T h e figu re s sh o w n in clu d e th o se fo r e a ch w e e k o f th e c u rre n t p e rio d a n d fo r th e 802 Reporting Banks* All Districts Deposits Loans, etc. $15,598 15,461 15,615 15,620 15,792 15,819 15,826 $13,821 13,808 14,136 14,056 14,572 14,468 14,600 as th e N e w Y o r k C i t y b a n k s in cre a se d th e ir re d is $ 1 5 ,8 1 9 ,0 0 0 ,0 0 0 , th e h ig h e st th u s fa r re a ch e d , th e loan s o f th e N ejw Y o r k C i t y re p o rtin g b a n k s w ere in f a c t c o n sid e ra b ly b e lo w th e h igh p o in t o f O cto b e r w h e n S t o c k E x c i a n g e sp e cu la tio n w a s a t its h e igh t. F r o m O cto b e r 3L to J a n u a r y 1 6 th e loan s of th e 7 1 re p o rtin g b a n k s in N e w Y o r k C i t y d eclin ed $ 2 7 0 , 00 0,00 0. I n tlu /t sa m e p e rio d th e re p o rtin g b a n k s of all d istric ts id th e c o u n tr y o th er th a n N e w Y o r k in crea sed th e ir lo a n s $ 4 9 8 ,0 0 0 ,0 0 0 . M e a n w h ile , c o u n ts w ith th e F e d e r a l R e s e r v e B a n k b e tw e e n O cto b e r 3 1 a n d J a n u a r y 1 6 b y $ 2 2 0 ,0 0 0 ,0 0 0 , th e ir lo a n c o n tra c tio n a m o u n te d a c t u a lly n o t to $ 2 7 0 , 00 0,00 0, b u t to $ 5 0 ,0 0 0 ,0 0 0 . E ls e w h e r e in th e c o u n t r y , h o w e v e r, n q t o n ly w e re th e lo a n a c c o u n ts o f th e b a n k s in crea se d b y $ 4 9 8 ,0 0 0 ,0 0 0 , b u t th e ir re d isco u n ts w ith th e v a rio u s F e d e r a l R e s e r v e B a n k s w ere in crea se d b y $ 2 3 3 ,0 0 0 ,0 0 0 . T h u s th e h ig h to ta l fo r J a n u a r y 1 6 in d ica te s a lo a n e x p a n sio n o f th e 6 9 0 re p o rtin g b a n k s o u tsid e o f th is d is tric t o f also , th e gro ss d e p o sits o f N e w a b o u t $ 7 3 1 ,0 0 0 ,0 0 0 , m u c h of w h ic h h a s o ccu rre d in Y o rk C ity banks d eclin ed $ 2 8 ,0 0 0 ,0 0 0 , w h ile th e gro ss d e p o sits fo r re p o rtin g b a n k s elsew h ere in th e c o u n tr y in cre a sed $ 8 0 7 ,0 0 0 ,0 0 0 . In th e la s t six w eek s. T h is in cre a se o u tsid e th e N e w Y o r k d is tric t p o in ts th e first tw o w e ek s of J a n u a r y to a g r e a t lo cal use fo r fu n d s a n d a c c o u n ts fo r th e th ese N e w Y o r k b a n k s lo st $ 10 9 ,0 0 0 ,0 0 0 of d ep o sits. fa ilu re of m o n e y th u s fa r in 1 9 2 0 to flo w to w a r d N e w Y o r k , as is c u s to m a r y a ft e r th e first of th e y e a r . T h e lo an figu res of th e b a n k s le a v e o u t of a c c o u n t, h o w e v e r, th e p a p e r w h ic h th e y h a d re d isco u n ted N o t o n ly h a s m o n e y fa ile d to tu rn b a c k to N e w Y o r k w ith th e F e d e r a l R e s e r v e B a n k s a n d w h ic h th e re b u t it fo re does n o t a p p e a r in th e ir sta te m e n ts. in a n tic ip a tio n o f th e u su a l e a r ly sp rin g d e m a n d . T h e In a s m u c h h a s been c o n tin u a lly d r a w n a w a y , p o ssib ly REPORT ON BUSINESS CONDITIONS a g g r e g a te of tra n sa c tio n s th ro u g h th e g o ld se ttle m e n t fu n d — th e m e d iu m p ro v id e d b y th e F e d e r a l R e s e r v e S y s t e m fo r se ttlin g b a la n ce s b e tw e e n th e se v e ra l F e d e r a l R e s e r v e d istric ts — sh o w s a n e t m o v e h en ce u p o n th e d e m a n d fo r cre d it. A c c o r d in g to th e re p o rts o f th e N e w Y o r k S t a t e In d u s tria l C o m m issio n , th e a v e r a g e w a g e s p a id to f a c t o r y w o rk e rs a d v a n c e d in th e y e a r 1 9 1 9 a b o u t 1 3 p e r cen t. m e n t of fu n d s a w a y fro m N e w Y o r k b e tw e e n D e c e m T h e d is c o u n t ra te s o f th e b a n k w ere fu rth e r f r a c tio n a lly in cre a se d on D e c e m b e r 3 0 . O n th a t d a y th e to ta l lo an s o f th e F e d e r a l R e s e r v e B a n k of N e w Y o r k w e re a t th e ir m a x im u m fo r th e y e a r 1 9 1 9 a n d 1 1 $72,000,000, ber and Ja n u a ry of a b o u t a n d fro m Ja n u a ry to J a n u a r y 2 0 a n o m in a l flo w to w a r d N e w 1 $15,000,000. B u t to th is n e t a d v e rs e b a l $57,000,000 m a y p ro p e rly b e a d d e d a b o u t $63,000,000, re p re se n tin g b ills red isco u n te d b y th e Y o r k of a n c e of F e d e r a l R e s e r v e B a n k o f N e w Y o r k w ith o th e r F e d e r a l R e s e r v e B a n k s w h ic h w ere still o u tsta n d in g th e h ig h e st re a c h e d u p to t h a t tim e . T h is in crease to $ 1 ,0 7 9 ,0 0 0 ,0 0 0 w a s d u e in p a r t to th e w ith d r a w a l fro m th is m a r k e t of m o n e y w h ic h h a d b een d ep o sited to b r in g m o n e y to th is b a n k a g a in s t th e p re v a ilin g here b y o u t of to w n b a n k s a n d h a d b een p u t o u t on call in th e sto c k m a rk e t. I n th e p erio d b e tw e e n D e c e m b e r 2 0 a n d J a n u a r y 1 6 , w h e n th e lo an s o f th e tid e , a n d to re d u ce te m p o ra rily th e a d v e rse b a la n ce s F e d e r a l R e s e r v e B a n k d id n o t o n ce go b e lo w $ 1 ,0 0 0 ,- w ith o th e r F e d e r a l R e s e r v e d istric ts b y th e a m o u n t o f th e re d isco u n ts. T h e sm a ll re d u c tio n in th e v o lu m e of c re d it in th is d is tric t c o n tra ste d w ith th e v e r y la rg e exp a n sio n 0 0 0 ,0 0 0 , th e re s e rv e p e rc e n ta g e s h eld lo w e r th a n a t a n y o th er tim e th u s fa r. T h e w ith d ra w a ls o f G o v ern m e n t d e p o sits d u rin g th is sam e in te rv a l, a m o u n t in g to $ 3 10 ,0 0 0 ,0 0 0 , w e re a c o n trib u tin g ca u se o f th e elsew h ere in th e c o u n tr y is a ttr ib u ta b le p rim a rily to th e c u rta ilm e n t of S t o c k E x c h a n g e sp e cu la tio n sin ce e a r ly N o v e m b e r . F r o m O cto b e r Sto ck in cre a se d lo a n s of th e F e d e r a l R e s e r v e B a n k . On J a n u a r y 1 3 th e ra tio of to ta l re se rv es to co m b in ed on J a n u a r y 2 0 . T h e e ffe ct of th is tr a n s a c tio n w a s 31 E x c h a n g e a c t i v i t y w a s a t its h e ig h t. L o a n s secu red 71 b y sto c k s a n d b o n d s a s re p o rte d b y th e b a n k s in N e w Y o r k C i t y sh o w a re d u c tio n to J a n u a r y of T h e co rre sp o n d in g figu res fo r all F e d e r a l R e s e r v e d istric ts, in c lu d in g N e w Y o r k , is a n in crea se of T h e c o n tra c tio n in N e w Y o r k h a s b een a b so rb e d , h o w e v e r, b y in d u stria l $111,500,000. 16 $110,700,000. n e t d e p o sit a n d n o te lia b ility w a s 3 4 . 7 , a co n d itio n w h ic h w a s co rre cte d on th e n e x t d a y b y re d isco u n tin g w ith o th er F e d e r a l R e s e r v e B a n k s . I n N e w Y o r k C i t y b a n k cle a rin g s fo r D e c e m b e r w ere slig h tly a b o v e th e p re v io u s h ig h le v e l fo r O c to b e r a n d w ere, th e refo re, th e h ig h e st y e t re a ch e d . F o r th e y e a r t h e y a g g r e g a te d $ 2 3 5 ,8 0 0 ,0 0 0 ,0 0 0 , a g a in of 3 2 p e r c e n t, o v e r 1 9 1 8 a n d a n in crea se d o u b le a n d c o m m e rcia l d e m a n d s, w h ic h c u rre n t h ig h p rice t h a t sh o w n b y th e co m b in e d cle a rin g s of th e re s t le v e ls a re e v e r in cre a sin g . A ty p ic a l b a n k in N e w Y o r k C i t y re p o rts t h a t its lo an s to s tr ic t ly co m m e r cial cu sto m e rs in crea se d p e r cen t, fro m a y e a r ago . T h e fo llo w in g ta b le sh o w in g th e in cre a se o v e r la st y e a r in th e w h o lesale p rice s of co m m o d itie s in d ica te s th e m u c h in crea se d a m o u n t o f m o n e y re q u ired to c a r r y a g iv e n v o lu m e o f co m m o d itie s in th e v a rio u s sta g e s of p ro d u ctio n a n d d istrib u tio n : of th e c o u n tr y . T h e to ta ls fo r e a ch w e e k o f th e c u rre n t p erio d w e re as fo llo w s: 50 COMMODITY PRICE INCREASES Commodity Jan. 1 1919 Cotton (middling uplands), lb............................32 Cotton sheetings.....................................................19 Wool (fine unwashed), lb .....................................76 Silk (sinshiu), lb.......................................... 6.70 Pig Iror (No. 1 foundry), ton................. 38.30 Steel Billets (Bessemer), ton.................... 43.50 Hides (Pat-ker), lb....................................... .29 Leather (calfskin), sq. ft........................... .75 Tobacco (med. leaf Burley), lb..........................42 Coal (bituminous, Pittsburg), ton.......... 4.70 Pine (yellow), M ......................................... 48.00 Copper (electrolytic), lb.......................................23 ^Decrease. Jan. 1 Per Cent 1920 Increase .39 .28 .95 14.05 42.80 48.00 .40 1.25 .50 5.45 65.00 .19 21 47 25 109 11.7 10.3 38 66.6 19 15.9 35.4 *16 I n a d d itio n to in cre a se d c o m m o d ity p rices, th e Week Ended New York City December 24 December 31 January 7 January 14 January 21 $5,590,623,000 5.388.508.000 5.545.691.000 5.347.254.000 5.412.377.000 The M on ey Other Six Cities Second Federal Reserve District $149,866,000 141.681.000 168.280.000 151.567.000 151.143.000 m o n e y m a r k e t of th e p a s t t h ir t y d a y s c lo se ly reflects th e c o n d i tio n s d escrib ed a b o v e , th e w it h R a tes d r a w a l of m o n e y , le n t h ere b y in te rio r b a n k s, a n d th e re lu c ta n c e of th e N e w Y o r k b a n k s to s u p p ly fu n d s in lieu of th o se w ith d ra w n . sta te of d e cid ed ten sio n . th e N e w Y o rk I t h a s b een in a R a t e s fo r call m o n e y on S t o c k E x c h a n g e c o v e re d th e w id e ra n g e o f 6 to 2 5 p e r c e n t., w h ic h w a s th e h ig h e st since th e 3 0 p er c e n t, ra te of N o v e m b e r 1 2 . The h igh figu res w e re re a c h e d a t th e en d of th e y e a r w h en fu n d s w ere w ith d r a w n fro m N e w Y o r k b y o u t-o f- h ig h e r w a g e scales n o w g en era l in th is d istric t h a v e to w n b a n k s fo r use a t h o m e. h a d a m a rk e d effect on th e c o st of p ro d u ctio n , an d w ere easier, a reflectio n of th e c re a tio n of c re d it w h ic h E a r l y in J a n u a r y ra te s FEDERAL RESERVE AGENT AT NEW YORK w a s in c id e n ta l to th e re d e m p tio n of c e rtifica te s of in d eb ted n ess. T h r o u g h o u t th e p e rio d re n e w a ls w ere m ad e a t u n u s u a lly h ig h figu res. F r o m D e c e m b e r 2 3 to J a n u a r y 5 th e re n e w a l ra te ra n g e d fro m 1 0 to 1 5 p er c e n t.; on J a n u a r y 6 th e ra te w a s 8 p e r c e n t.; sin ce th e n it h a s ra n g e d b e tw e e n 6 a n d 8 p e r cen t. T im e m o n e y h a s b een sc a rce a n d ra te s h a v e b een h igh . T r a n s a c tio n s h a v e been fe w , e v e n fo r th e sh o rte st m a tu ritie s. R a t e s a re n o m in a lly 7 ^ P er cen t, fo r loan s on m ixe d c o lla te ra l a n d 8 to 8 J ^ on all in d u stria l. T h e m a r k e t fo r c o m m e rcia l p a p e r h a s co n tin u ed d u ll as f a r as th e b a n k s in th e c it y of N e w Y o r k are c o n cern ed . F e w o f th e m re p o rt a n y p u rch a se s a t all. I t h a s b een o b se rv e d , h o w e v e r, t h a t th e re h a s been an in crea sed dem and fo r co m m e rcia l p a p e r fro m in stitu tio n s w ith in a c o m p a r a tiv e ly sh o rt d is ta n c e o f N e w Y o r k , a n d d ealers re p o rt th e ir o u tsid e bu siness to b e go o d in p r a c t ic a lly all sectio n s of th e c o u n tr y . V e r y re c e n tly a h e a v y s u p p ly h a s m a n i fe ste d itself, w h ic h a p p e a rs to b e c o n sid e ra b ly in excess of th e p o w e r of th e m a r k e t to a b so rb . C er ta in co m m e rcia l p a p e r h ouses re p o rt t h a t th e y are d isc o u ra g in g th e ir clien ts fro m b o rro w in g e x te n s iv e ly . T h e ra te rem a in s on a 6 p e r cen t, b a sis, w ith fe w sales of e x c e p tio n a lly d e sirab le n a m e s a t 5 % p er c en t. I n th e la s t t h ir t y d a y s th e F e d e r a l R e s e r v e B a n k tw ic e ra ise d its p u rch a se ra te s on a cc e p ta n c e s. P re se n t p u rch a se ra te s a re 5 p e r ce n t, fo r en d orsed n in e ty -d a y b ills; a n d 4 % p e r cen t, fo r s ix t y - d a y a n d t h ir t y -d a y bills. S t r in g e n c y in m o n e y ra te s h a s k e p t th e d isc o u n t m a r k e t lim ite d , b u t la t te r ly d e a l ers in a c c e p ta n c e s h a v e b een ta k in g ste p s to w id e n o n ly a b o u t p o in ts a b o v e th e lo w e s t o f D e ce m b e r* w h ile in d u stria ls w e re d o w n \ x / 2 p o in ts b e lo w th e lo w e st of th e p re v io u s m o n th . A v e r a g e d a ily s to c k sales fo r th e w e e k ju s t b efo re C h ris tm a s w ere 8 1 7 ,4 0 0 sh a re s; a n d th is c o m p a re s w ith 1 , 1 9 7 , 7 0 0 a d a y fo r th e w e e k en d ed J a n u a r y 2 , a n d 8 2 6 ,7 0 0 fo r th e w e e k en d ed J a n u a r y 9. A rou n d th e first of th e m o n th a n a c t iv e d a y w a s a d a y of risin g p rice s, b u t m o re r e c e n tly a c t i v i t y h a s been a cc o m p a n ie d b y w ea k n e ss. Bond M ark et and N e w H e a v y liq u id a tio n in b o n d s, b o th co rp o ra tio n a n d jG o v e r n m e n t , co n - F in a n c in ff tin u e d so m e w h a t p a s t th e m id d le of D e c e m b e r , a ttr ib u ta b le in p a r t a t le a st to a desire on th e p a r t of h o ld ers to reco rd losses fo r th e p u rp o se s o f th e in co m e ta x . T h e gen era l le v e l of p rice s to u c h e d its lo w e st on D e c e m b e r 1 8 , b u t in th e su cce ed in g th re e w e ek s th ere w a s a su b s ta n tia l m o v e m e n t u p w a rd . R a ilr o a d b o n d s, in respo n se to fa v o r a b le rep o rts fro m W a s h in g to n as to th e tim e w h e n th e ro a d s w ill b e re tu rn e d to th e ir o w n ers, a n d th e co n d itio n s u n d e r w h ic h th e re tu rn m a y be a cco m p lish e d , sh o w ed m o re stre n g th th a n a n y of th e o th er m a jo r g ro u p s of b o n d s. T h e y ro se a b o u t 2 5 - 8 p o in ts fro m th e m id d le of D e c e m b e r to th e m id d le of J a n u a r y . Pub lic u t ilit y issues re c o v e re d a b o u t 5 - 8 , in d u stria ls 1 1 - 5 p o in ts, a n d fo re ig n g o v e rn m e n t b o n d s a s a g ro u p a b o u t 1 ^ . L i b e r t y b o n d s rose fro m 3 ^ to 1 2 - 5 p o in ts u p to J a n u a r y 4 , a n d a s u su a l m a d e u p th e la s t t h ir t y d a y s h a s been p a r tic u la r ly se n sitiv e to th e str in g e n c y of m o n e y . F o r a sh o rt tim e a ro u n d th e first o f th e y e a r p rices rose a n d th e v o lu m e of sales in crea se d a c c o r d in g ly , b u t fo r th e m o st p a r t th e m o v e m e n t o f p rices h a s been d o w n w a r d , on a m a r k e t w h ic h h a s been in th e h a n d s of p ro fe ssio n a l tra d e rs, w ith th e la rg e r p a r t o f th e a g g r e g a te o f sales. T ran sac tio n s in co rp o ra tio n b o n d s re m a in e d h e a v y , a v e r a g in g a b o u t $ 5 ,5 0 0 ,0 0 0 p e r d a y o v e r th e tu rn of th e y e a r , a n d th e n s h a r p ly d im in ish ed to $ 2 ,8 0 0 ,0 0 0 d a ily . D u r in g th e secon d w e e k in J a n u a r y ren ew ed liq u id a tio n o f m o d e ra te p ro p o rtio n s m a d e its a p p e a r a n ce . L ib e r t y b o n d s lo st so m e w h a t m o re th a n th e ir p re v io u s g a in s, a n d ra ilro a d b o n d s also declin ed . T h e c u rta ilm e n t of n e w issues of secu rities o b se rv e d in N o v e m b e r co n tin u e d , th e re su lt o f g en era l fin a n cial co n d itio n s re flected in a lessened p u b lic d e m a n d . T h e to ta l in D e c e m b e r w a s $ 2 2 3 ,0 0 0 ,0 0 0 as c o m p u b lic sp e c u la tiv e a c t iv i t y m u c h d im in ish ed . No p a re d w ith $ 2 5 3 ,0 0 0 ,0 0 0 in N o v e m b e r , a n d $ 3 9 0 ,- co n sid erab le dem and re 00 0 ,0 0 0 in O cto b e r. th e m a r k e t fo r th is k in d o f p a p e r. O n th e w h o le th e s to c k m a r k e t in S to c k M ark et re in v e stm e n t has been F o r th e e n tire y e a r s 1 9 1 9 a n d 1 9 1 8 , th e m o n th ly a v e r a g e s w ere $ 2 5 2 ,0 0 0 ,0 0 0 a n d p o rted . L iq u id a tio n , w h ic h h a d its b e g in n in g m o re th a n $ 1 1 2 ,0 0 0 ,0 0 0 re s p e c tiv e ly . tw o m o n th s a go , h a s c o n tin u e d w ith fe w in te rru p ce m b e r in clu d e d a n u m b e r o f h ig h g r a d e m u n icip a l tio n s in a n o rd e rly w a y . T h e n e w issues in D e R a ilr o a d sh ares re a ch e d a n d G o v e r n m e n t b o n d s ; p re fe rre d sto ck s of in d u stria l th e lo w e st p o in t of D e c e m b e r on th e 1 2 t h , a n d in d u s c o rp o ra tio n s of p ro v e d sta n d in g , as w ell as of c o r tria ls on th e 2 2 n d ; b u t th e rallies w ere slig h t a n d p o ra tio n s w h ic h a re still to d e m o n stra te th e ir c a p a c g e n e ra lly la c k in g in v ig o r. it y to earn on a u g m e n te d c a p ita l; a n d co rp o ratio n B y th e m id d le o f J a n u a r y ra ilro a d sto ck s w ere a g a in d o w n to a p rice lev e l b o n d s a n d n o tes of v a r y in g degrees of q u a lity . REPORT ON BUSINESS CONDITIONS N e w in co rp o ra tio n s in D e c e m b e r a m o u n te d in n o m in a l c a p ita l to $ 1 ,0 7 7 ,5 0 0 ,0 0 0 . T h is c o m p a re s F o r e ig n w ith th e m o n th ly a v e ra g e s of $ 1 ,0 5 6 ,0 0 0 ,0 0 0 1 9 1 9 a n d $ 2 1 6 ,0 0 0 ,0 0 0 fo r 1 9 1 8 . ro P ean co u n tries d id n o t c h a n g e m a te ria lly fro m th e la te D e c e m b e r figu res. B u t g r a d u a l declin es in th e w e e k en d ed J a n u a r y 1 7 p re ced ed a p re c ip ita te d ro p in th e fo llo w in g w e e k . O n J a n u a r y 2 0 th e ra te fo r and F o r e ig n T rade S a le s of L i b e r t y B o n d s on th e N e w L ib e r ty B on ds for U p to th e v e r y en d of th e p e rio d e x c h a n g e ra te s on th e p rin c ip a l E u - E xchange Y o r k S t o c k E x c h a n g e a m o u n te d for th e y e a r to n e a r ly $ 3 ,0 0 0 ,0 0 0 ,0 0 0 , an d w ere m o re th a n th re e -q u a rte rs o f th e to ta l sales of b o n d s on th is m a rk e t. I n sp ite o f th ese la rg e tr a n s a ctio n s a n d in th e fa c e o f a co n sid e ra b le d eclin e in o th e r cla sses o f b o n d s, G o v e r n m e n t b o n d s w ere co n sp icu o u s fo r th e ir re la tiv e stre n g th . W h e re c o rp o ra tio n b o n d s h a d sh o w n a ge n e ra l d eclin e th ro u g h th e y e a r , a v e r a g in g a b o u t 6 % p o in ts, U n ite d S t a t e s w a r b o n d s d eclin ed o n ly a b o u t V/^ p o in ts. T h ere w as sterlin g to u c h e d 3 . 6 5 % w h ic h w a s e q u a l to th e lo w ra te e sta b lish ed in D e c e m b e r . L ir e a n d m a rk s w e n t b e lo w th e ir p re v io u s lo w p o in ts a n d fra n c s w ere w eak. S u b s e q u e n tly th ere w a s a still fu rth e r d eclin e of all th e p rin cip a l exch a n g e s. T h e d eclin e w a s a ttr ib u te d to m a r k e t co n d itio n s to g e th e r w ith a w ith d ra w a l of b a la n c e s w h ic h h a v e been b u ilt u p a b ro a d , ra th e r th a n to a n y ra d ic a l ch a n g e s in th e fo reign tr a d e of th e c o u n tr y . The a n e n o rm o u s u n lo a d in g on th e p a r t of m a n y h o ld ers c u rr e n c y a n d c re d it in flatio n of fo re ig n co u n trie s is a tt r a c t e d b y th e la rg e bu sin ess a n d sp e c u la tiv e p o ssi b ilities w h ic h th e y e a r seem ed to offer, b u t th is w a s f a ir ly b a la n c e d b y in stitu tio n a l a n d o th er b u y in g e x e rtin g a p ro fo u n d in flu en ce on p re se n t e x c h a n g e ra te s. T h is f a c t e x p la in s th e a n o m a ly t h a t th e fo rm er b elligeren ts in E u r o p e w h ic h h a v e th e s m a lle st v o l w h ic h m ig h t b e sa id to re p re se n t a fa r m o re p e rm a u m e of tr a d e w ith th is c o u n tr y a re th e ones w h o se nent e x c h a n g e s are w e a k e st. dem and. I n g en e ra l, th e re w a s a tra n sfe r of h o ld in gs fro m w e a k e r to stro n g e r h a n d s, w h ic h seem s to ju s t if y th e v ie w t h a t G o v e r n m e n t issues a re n o w on a fa r m o re solid in v e stm e n t b a sis th a n a y e a r a go . S o m e of th e issues n o w sh o w a y ie ld a b o v e 5 p e r cen t, a n d a lth o u g h th ese a re n o th in g like th e re tu rn s th a t V ic e v e rs a , G r e a t B r it a in , w h ic h h a s b y fa r th e g r e a te s t a d v e rse b a la n c e in o u r m a r k e t of a n y c o u n tr y tr a d in g w ith u s, is o f all fo rm er b ellige ren ts th e one w h ic h h a s e xp erien ced th e le a st d eclin e in h er e x c h a n g e ra te s w ith th e p re v a ile d d u rin g a n d fo llo w in g th e C iv i l W a r , th ere is a n a lm o st im m e a su ra b le differen ce b e tw e e n th e fin a n cia l stre n g th o f th e c o u n tr y a n d of th e G o v e r n U n ite d S t a t e s a n d h a s th e le a st in flatio n a t h o m e. I n o th er w o rd s, th e p rice o f th e A m e r ic a n d o lla r in E u r o p e a n co u n trie s h a s go n e u p a s th e p u r c h a sin g p o w e r of th e ir o w n c u rr e n c y h a s go n e u p . T h e fo l m e n t th e n a n d n o w ; a n d a t th ese le v e ls th e y h a v e lo w in g a re th e d e m a n d ra te s fo r th e fo u r w eek s o f a p p e a le d s tr o n g ly to c o n s e rv a tiv e in v e sto rs. th e p e rio d : F O R E IG N E X C H A N G E Week Ended................................................. DECEMBER 27 High England.................................................................. S.83}4 France..................................................................... 10.36 Italy......................................................................... 12.98 Spain....................................................................... 19.40 Argentina............................................................... 43.125 Hong Kong............................................................ 99.00 China (Shanghai)................................................. 168.50 Japan....................................................................... 50.25 R A T E S JANUARY 3 Low High JANUARY 10 Low 3.78% 3.79^ 3.7 5'/s 10.64 10.68 10.93 13.08 13.16 13.28 19.35 19.30 19.25 43.125 43.125 43.125 96.00 95.00 94.50 168.50 166.00 164.00 50.25 50.375 50.125 High 3.79 10.78 13.24 19.05 43.00 97.00 160.00 50.375 JANUARY 17 Low 3.73% 11.22 13.43 18.95 43.00 94.50 160.00 50.00 High 3.74}^ 11.15 13.43 19.10 43.125 100.00 161.00 50.00 Low 3.68^ 11.63 13.70 19.00 43.125 96.00 160.60 49.875 I n co n sid erin g ste rlin g e x c h a n g e sp e cia l referen ce 1 3 7 . 3 p e r c e n t., w h e re a s th e co rresp o n d in g in crea se sh o u ld b e m a d e to th e p ro gre ss w h ic h th e U n ite d fo r A m e r ic a n e x p o rts w a s 2 0 .3 9 p e r c e n t,— n o t a K in g d o m is m a k in g in re c o v e rin g h er e x p o rt tra d e . su rp risin g d ifferen ce co n sid erin g th e v a s t v o lu m e of w a r a n d o th e r m a te ria l w h ic h th e U n ite d S t a t e s w a s H e r m a n u fa c tu rin g p la n ts a re r e a d a p tin g th e m se lv e s to p e a ce p ro d u ctio n , a n d c o rre sp o n d in g ly h er e xp o rts called u p o n to e x p o rt d u rin g th e y e a r s o f a c t iv e a re g a in in g u p o n h er im p o rts. fig h tin g , b u t h ig h ly in d ic a tiv e o f th e re c u p e r a tiv e B r it is h e x p o rts in D e cem b er, 1 9 1 9 , a s co m p a re d w ith th o se of D e c e m b e r, 1 9 1 8 , th e first m o n th a fte r th e a rm istic e , in creased p o w e r o f B r it is h p ro d u ctio n . F o r th e first th ree m o n th s a ft e r th e a rm istic e th e FEDERAL RESERVE AGENT AT NEW YORK B ritish excess o f im p orts o v e r exp orts a vera ged £ 7 5 ,0 9 0 ,0 0 0 ; and fo r th e th ree m on th s en ded w ith D e ce m b e r, 1919, it a vera ged o n ly £ 6 9 ,9 3 0 ,0 0 0 p er m on th . T h e real im p ro v e m e n t in th e b a la n ce o f trad e is greater th a n it appears, becau se th e last q ua rter o f th e yea r is th e season w hen G reat B ritain n orm a lly im p orts v a st a m ou n ts o f agricu ltu ral and raw m aterials. In th e last q uarter o f th e y e a r as com p a red w ith th e first qu arter B ritish n et m erch an dise im p orts ord in a rily increase b y a b o u t 19.3 p er cen t., whereas in 1919 th e y d ecreased b y 6.9 p er cen t. In a d d ition , variou s fa ctors w h ich co u n t as offsets t o im p orta tion are b e co m in g effectiv e, ch ief a m o n g w h ich at this tim e is th e rev iv a l o f B rita in ’ s ca rryin g trad e, E x p o rts fro m th e U n ited States d u rin g D e c e m b e r a m ou n ted to $681,500,000, a decrease o f a b o u t $59,500,000 fro m N o v e m b e r. Im p o rts a m o u n te d t o $381,000,000, a decrease o f a b o u t $44,000,000 fro m th e p reced in g m on th . T h u s ou r b a la n ce o f trad e, w h ich a m ou n ted to a b o u t $301,000,000, d eclin ed b y a b o u t $15,000,000 fro m N o v e m b e r. D e c e m b e r sh ipm ents o f c o tto n a m ou n tin g to 877,000 bales va lu ed a t $180,650,000, w ere b arely u n der th e c o tto n exp orts in N o v e m b e r w h ich w ere th e largest on record . T h e y a cco u n te d fo r m ore th a n on e-q u a rter o f th e to ta l exp orts fo r th e m on th . T h e largest sh ipm en ts w ere fo r E n g la n d , w h ich to o k 442,000 bales va lu ed at a b o u t $94,000,000. T r a d e balan ces fo r th e first eleven m on th s o f 1919 — th e latest fo r w h ich an analysis is a vaila b le— sh ow ed an a ggregate excess o f exp orts t o th e U n ited K in g d o m a b o v e ou r im p orts fro m her o f $1,821,000,000. T h e N o v e m b e r b a la n ce is th e largest since th a t o f A u gu st, and an im p o rta n t fa c to r in it was th e exp orts o f co tto n . T h e a dverse b alan ce o f F ra n ce is n o t fa r fro m w h a t it was in O cto b e r, b u t m a terially a b o v e th e p re ce d in g m on th s. T h ere are slight increases fo r b o th I ta ly and G erm an y and a large increase fo r C an ada. O ur ow n a dverse b a lances w ith C h in a and J ap an are co n sid era b ly red u ce d , and w ith A rg en tin e and B razil are b e lo w th e figures fo r S ep tem b er. A su m m ary fo r th e eleven m on th s o f th e y ea r is as fo llo w s : TRAD E BALANCES (000 Omitted) February United Kingdom................................. $153,046 . 87,970 France............................................... Italy.................................................. 36,382 Germany............................................................ China................................................. *1,296 Japan................................................. 10,411 Canada.............................................. 3,028 Argentine........................................... 4,969 Brazil............. ................................ 6,380 *Excess of imports over exports. July August September OctoberNovember $181,874 42,744 22,278 2,136 *11,704 *28,565 17,440 *2,364 *16,271 $180,010 44,370 21,834 11,438 *4,995 *9,966 23,117 *5,578 *13,195 $118,960 35,732 21,416 7,250 *3,224 *27,100 35,337 *24,764 *25,944 $123,247 53,451 24,647 18,506 *12,103 *23,598 13,099 *9,899 *11,893 The E dge B ill a n d T h e rem arkable fall in all foreign exch an ges has g iven a new interest t o th e F a ll in xi i x c ange ProPosa ls f ° r foreign fin a n cin g, w h ich resu lted in th e passage o f th e B ill. W ith B ritish exch an ge a t n early 30 p er cen t, d iscou n t, and F ren ch and Ita lia n exch an ge a t m ore th an tw ice this, and G e r m an exch an ge m u ch low er, th ere is an a lm ost u n p re ced en ted o p p o r tu n ity fo r th e p u rch a se o f foreign issues, especia lly o f indu strial and oth er corp o ra tio n s. In G erm a n y th e d eclin e in exch an ge has resu lted in such en orm ou s purch ases o f stock s and securities b y ou tsid e cou n tries, p a rticu la rly th ose near b y , as to lead th e G erm an G o v e rn m e n t t o a p p ly som e m eas ures o f restraint. In th e G erm an p u b lic press this h e a v y ou tsid e p urch asin g has b een p la ca rd ed as “ T h e a u ction sale o f G e r m a n y .” T h e result has been m on th s o f th e w ildest sp ecu la tion ever k n ow n $172,840 52,941 26,284 19,816 *5,547 *17,169 22,236 *12,907 *23,248 11 months 1919 $1,821,030 723,058 351,564 67,321 *40,026 *43,471 215,735 *37,238 *106,623 11 months 1913 $283,268 14,191 20,299 152,791 *12,341 *32,082 251,863 29,236 *48,997 in w h ich shares h a v e som etim es risen h u n dreds per cen t, in a d a y . S im ilar o p p o rtu n itie s in a less d egree n o w exist in a lm ost all o f th e cou n tries o f E u ro p e . T h e p ro v isio n s o f th e E d g e B ill m a y co n sid e ra b ly fa cilita te this m o v e m e n t. F oreig n securities o u t side o f G o v e rn m e n t loan s are a lm ost u n k n ow n in this co u n tr y , a n d th e a vera ge in v estor is a lm ost w ith o u t m eans o r facilities o f m a k in g in d ivid u al in vestm en ts in these cou n tries. T h e fin ancial c o r p o ra tio n s a u th orized u n d er th e E d g e B ill p erm it th e ban k s t o su bscrib e u p t o 10 p er cen t, o f th eir ca p ita l a nd surplus t o su ch com p a n ies, and th e latter in tu rn m a y in v est in a lm ost a n y k in d o f foreign en ter prise. T h e ex te n t o f this in v estm en t fo r a n y on e co rp o ra tio n is lim ited to 10 p er cen t, o f its ca p ita l and surplus, o r 15 p er cen t, in th e case o f b a n k in g co r p o ra tio n s ; a n d such in v estm en ts m u st b e m a de REPORT ON BUSINESS CONDITIONS w ith th e con sen t o f th e F ed era l R eserv e B o a rd . In a d d ition , th e co rp ora tion s organ ized u n der this a ct are s u b je c t t o th e sam e su pervision b y th e F e d eral R e se rv e B o a rd as th a t exercised o v e r n ation al b an k s b y th e C om p tro lle r o f th e C u rren cy. F u rth e r m ore, th ese co rp ora tion s m ust h a v e a t least $ 2,0 00 ,000 ca p ita l, w h ich is con sidered an effectiv e b a r t o th e fin a n cia lly irrespon sible or inexperien ced. T h ese p rov ision s are in ten d ed t o offer a co n s id erable p ro te c tio n to th e in ten d in g in v esto r in th e stock s or th e d eben tu res o f these com pa n ies. I t was likew ise th e e x p ecta tion th a t these com p a n ies m ig h t p ro v e a con sid erab le aid to th e ex p o rt asso cia tion s legalized u n der th e W e b b A c t fo r th e p r o m o tio n o f ou r foreign trad e, and to an a p p recia b le e x ten t co n tr ib u te a stabilizin g influen ce on th e fin a n cin g o f ou r exp orts. F ed era l R e se rv e N o te s T h e high p o in t in th e circu la tion ° f F ed era l R e se rv e n otes fo r this in C ir c u la tio n b a n k was on D e c e m b e r 24, w hen th e to ta l sto o d a t $827,679,000. I m m e d ia tely a fter C hristm as b ega n th e first co n sid e r able d eclin e since a y ea r a g o . In th e three w eeks en d ed J an u ary 16 th ere w as a co n tra ctio n in th e circu la tion a m ou n tin g t o $67,000,000, w h ich v e r y closely a p p rox im a tes th e exp erien ce o f a yea r a g o fo r th e sam e p o s t-h o lid a y p eriod . T h e rise in F e d eral R eserv e n o te circu la tion th rou g h a term o f years has co in cid e d in a general w a y w ith th e e x p an sion o f b a n k cred it, b u t there h a v e b een n u m erou s flu ctu a tion s w h ich h a v e been related o n ly re m o te ly to th e general cred it situ a tion . T h u s th e decrease o b serv ed since th e h olid a y s occu rred a t a tim e w hen th e loan s o f th e F ed era l R e se rv e B a n k o f N e w Y o r k were rising to their m a xim u m . In th e fo llo w in g ta b le th e circu la tion is g iven as o f th e first F r id a y o f ea ch q ua rter in th e last three yea rs: FEDERAL RESERVE NOTE CIRCULATION, NEW YORK BANK January................. April...................... July....................... October................. (000 Omitted) 1917 1918 $93,153 $402,900 166,596 485,222 213,801 591,791 265,677 719,317 1919 $724,931 736,433 762,915 761,705 1920 $811,119 In b o th 1918 and 1919 F ed eral R e se rv e n o te circu la tion was a t its low est p o in t w ith in a m o n th a fter th e C hristm as h olid a y s. I t is a t this tim e th a t th e grea t v o lu m e o f cu rren cy w h ich has b een re qu ired d u rin g th e C h ristm as season returns t o th e b a n k s a nd th rou g h th em t o th e F ed era l R e se rv e B an k . F rom its low p o in t early in th e y ea r th e circu la tio n in 1918 rose a b ru p tly a n d w ith v e r y few b rea k s in th e u p w a rd m o v e m e n t t o th e tim e o f signin g th e a rm istice, a rise o f a b o u t $325,000,000. T h a t th e rise p au sed a t th a t tim e suggests th e in stan t re d u ctio n o f p a y r o ll requ irem en ts a t th e m o m en t w hen w ar p ro d u ctio n a b a te d . In 1919 th e low est p o in t fo r th e y ea r w as rea ch ed o n J an u ary 29, w hen th e circu la tion s to o d a t $646,062,000. T h e re was a grad u al rise fro m th a t tim e t o th e secon d w eek in A p ril, and th en a p e rio d o f a p p ro x im a te ly s ta tio n ary circu la tion t o th e last o f Jun e, w h en th ro u g h a p e rio d o f tw o w eeks th ere w as a su dd en rise fo llo w e d b y a grad u al fall. T h e en d o f th e y ea r sh ow ed th e cu sto m a ry ra p id rise a n d in th e first th ree w eeks o f 1920 th e circu la tion reced ed t o a p o in t near w here it sto o d in J u ly. T h e a ctio n o f th e F ed era l R e se rv e n o te circu la tio n in these tw o years has co in cid e d w ith th e great e x p an sion o f cred it. B u t th e p re cip ita tin g causes h a v e been o f m u ch m ore im m ed ia te sort. H ig h e r w ages and general e m p lo y m e n t; h igh er prices w h ich fo llo w e d th e d isru p tion o f th e fo rm e r relation s b e tw e e n su p p ly a n d d e m a n d ; p e rio d ic d em an d s fo r cu rre n cy , p a rticu la rly a t th e h o lid a y season w h en retail trad e in v o lv in g cash tran saction s is a t its h eig h t— all th ese requ ire m ore circu la tion w ith v a ry in g degrees o f p erm a n en ce and are d ire ct causes o f its exp an sion . A fu rth er cause fo r th e g ro w th in F ed era l R e se r v e n o te issues lies in th e fa c t th a t esp ecia lly in 1917, th e y rep laced a large a m o u n t o f g o ld certifica tes and g o ld co in w h ich w ere m o b iliz e d in th e F ed era l R e se rv e B an k s as a p a rt o f th e g o ld reserves o f th e co u n try . T h e re d u ctio n in g o ld a n d g o ld certifica te circu la tion fo r th e w h ole co u n tr y in th e th ree years en d ed J an u ary 1, 1920, a m o u n te d t o a b o u t $1,3 00 ,0 0 0 ,0 0 0 . I t sh ou ld b e u n d e rsto o d th a t th e co n v e rs io n o f cre d it a t th e F ed era l R e se rv e B a n k in to F ed era l R e se rv e cu rre n cy , o r th e co n tra ry p rocess o f c o n v e r t ing F ed eral R e se rv e cu rren cy b a c k in to a cre d it o n th e b o o k s o f th e F ed era l R e se rv e B a n k — th e free in terch a n gea b ility o f n otes a n d d ep osits— is in p ra c tice en tirely a m a tter fo r th e ow n ers o f th e cre d it t o d eterm in e. In o th er w ord s th e ban k s, w h ich are th e ow ners o f th e cred it, d e cid e o n th e basis o f th eir custom ers" n eeds, w h eth er th e y shall w ith d ra w cu re n cy o r shall d ispose o f th e cre d it in oth e r w a y s— b y draw in g ch eck s a gain st it, b y tran sferrin g it, or b y lettin g fu n d s rem ain o n d e p o sit. T h u s it is th a t th e g ro w th or co n tr a c tio n o f F ed era l R e se rv e n o te circu la tion w ith in sh ort p eriod s d ep en d s alm ost en tirely on seasonal or special d em an d s fo r th e circu latin g m ed iu m . FEDERAL RESERVE AGENT AT NEW YORK F a ilu r e s and C om m ercia l d efa u lts fo r th e w h ole co u n tr y fo r th e m o n th o f D e c e m b e r L ia b ilitie s m a d e a n ew low record fo r th a t m o n th , th ou g h th e y w ere larger th a n in O c to b e r or A u g u st or J u ly o f last yea r. T h e 683 in sol ven cies w ith $ 12,000,000 fo r D e c e m b e r , 1918, d e clined t o 581 business reverses w ith liabilities o f $8,000,000. In th e S econ d F ed era l R eserv e D is trict th e n u m b er o f failures fo r D e c e m b e r decreased fro m 129 in 1918 t o 119 last yea r, a n d th e to ta l o f lia bil ities w as cu t in half, th a t is fro m $3,800,000 t o $1,800,000. C otton M a rk et In spite o f fallin g exch an ges and d isqu ietin g rep orts o f business co n d i tion s in E u ro p e , c o t to n has co n tin u e d to sell a t th e extra ord in a rily h igh levels w h ich h a v e p reva iled th ro u g h o u t th e larger p a rt o f th e year. T h ere w as a slight d eclin e in D e ce m b e r, b u t b y th e m id d le o f Jan u ary the averages w ere p ra ctica lly th e sam e as in N o v e m b e r and o n ly a b o u t l c a p o u n d b e lo w th e record m a xim u m . T h ese prices h a v e been largely d u e t o th e sh ort cro p a n d th e u n p reced en ted d em an d alike a t h om e and a b r o a d ; b u t v e ry h e a v y sp ecu la tiv e h old in gs are rep orted in m a n y quarters. T h e agricu ltu ral d ep a rtm en t estim ates last y e a r’ s cro p a t a little o v e r 11,000,000 bales as co m p a re d w ith a b o u t 12,000,000 bales fo r th e y ea r p reviou s. D o m e s tic co n su m p tion u p t o A u g u st h ad b een la g gin g, b u t since th a t tim e it has sh ow n a s te a d y gain , and fo r th e fiv e m on th s en ded w ith D e c e m b e r it was 2,551,476 bales as co m p a re d w ith 2,395,611 bales fo r th e corresp on d in g p eriod o f th e p reviou s year. E x p o rts fo r D e c e m b e r w ere again h e a v y , n early eq u a l t o th e record figure o f N o v e m b e r. F o r th e fiv e m on th s en din g w ith D e c e m b e r th e y were 2,796,586 bales as against 1,976,310 fo r th e sam e p eriod o f th e p reviou s year. T h is is largely d u e to th e h e a v y stock in g -u p o f th e B ritish c o t to n m ills, w h ich h a v e sh ow n v e ry h e a v y gains in th e last m on th s. C lo th in g D ry G ood s a n (J T h e ex tra ord in a ry d em a n d fo r alm o s t ev ery k in d o f d ry g o o d s and te x tiles has con tin u ed , and likew ise th e T e x tile s p referen ce fo r th e h igher rath er th a n ch ea p er grad es o f g o o d s . F o llo w in g th e usual p eriod o f q u iet a fter th e h olid a y s, a c tiv ity was resum ed u p on a b ro a d scale. I t w as gen erally rep orted th a t th e th ron g o f b u y ers in N e w Y o r k passed all p receden ts. T h is g a v e great firm ness t o th e m a rk et and to rapid a d va n ces in som e lines. P rices on textiles rose n o ta b ly . Since J an u ary 1 b lea ch ed co tto n s , prints and gin gh am s a d v a n ce d fro m 3 c to 5 c a y a rd , and b ro w n sheetings w ere 3 0c a p o u n d a b o v e th e G o v e rn m e n t levels o f 1918. S tan dard lines o f w orsted dress g o o d s fo r th e co m in g fall are q u o te d a t fro m 7 p er cen t, to 10 p er cen t, a b o v e th e p re v io u s h igh level. R a w silks con tin u e to rise and w here $10 was o n ce co u n te d an e xtrem elyh igh p rice, q u o ta tio n s h a v e been a b o v e $16. T h ese prices, and th e d isp osition o f m a n u fa ctu rers and sellers to cu rtail cred its, a p p a re n tly resu lted in a sm aller v o lu m e o f sales th a n m igh t h a v e b een a n tici p a te d . S h oe p rices rem ain ed stea d y a t h igh levels. H e a v y stock s o f leath er, silks and c o tto n g o o d s , h eld fo r sp ecu la tiv e p u rp oses, are rep orted . W h o le s a le P r ic e s T h e u p w ard m arch o f general prices co n tin u e d in D e ce m b e r. B ra d stre e t’ s in d ex n u m b er o f w holesale p rices rose t o 20.363 a n d D u n ’ s to 247.394, an a d v a n ce o f a little less th a n 10 p er cen t, o v e r th e averages o f a yea r a go. a n d co n sid e ra b ly a b o v e p rev iou s experien ces. T h is co n tin u e d liftin g o f th e p rice level appears t o be w orld w ide and is even m ore a cu te in E u ro p e and in J ap an . T h e B ritish p rice n u m bers likew ise m a de n ew high record s a t th e en d o f th e yea r, sh ow in g an a d v a n ce o f som eth in g like 20 p er cen t, o v e r on e y ea r a go. In G e rm a n y th e increase has been even greater. Iron and S teel T h e re was a sharp rise in p ig iron p r o d u c tio n in D e ce m b e r, th e o u tp u t b ein g 2,633,268 to n s a gain st, fo r e x am ple, 1,863,558 in O c to b e r ; b u t this figu re is still co n sid e ra b ly b e lo w th a t o f w artim e p ro d u ctio n and also b e lo w w h a t m a y b e ca lled th e p resen t n orm a l. W a rtim e p ro d u ctio n d id n o t g re a tly exceed th e n orm a l rate o f g ro w th , co n tra ry t o general b elief, and th e o u tp u t last y ea r w as th e sharpest re d u ctio n fro m this n orm a l line sin ce 1908. T h e re was a n o ta b le rise in th e u n filled orders o f th e U n ite d States Steel C o rp o ra tio n , w h ich sh ow ed fo r D e c e m b e r an increase o f 1,137,000 ton s. C o rre sp o n d in g ly iron prices a d v a n ce d a b o u t $5 p er to n in D e c e m b e r and this rise has co n tin u e d . B essem er p ig a t P ittsb u rg h is n o w q u o te d a t $40.40 p er to n , co m p a re d w ith $29.35 b e fo re th e strike, a n d oth er grades in p r o p o r tion . Sales o f steel are re p o rte d a t som e a d va n ces, b u t n o t to th e sam e e x te n t as in p ig iron . B ritish and co n tin e n ta l steel p rices h a v e sh ow n th e sam e te n d e n cy to a d v a n ce . Ir o n ore has n o t been in such sharp d em a n d , a n d stock s a t L a k e E rie p o rts on J an u ary 4 w ere n early 10 p er cen t, h igh er th an a yea r a g o . T o ta l receip ts a t these p orts d u rin g th e p ast REPORT ON BUSINESS CONDITIONS season w ere 3 6,874,816 gross ton s, an a d v a n ce o f n early 11,000,000 ton s fro m th e p reviou s year. A u t o m ob ile and tru ck m a n u fa ctu rers a n d sh ipbu ilders w ere a m on g th e largest con su m ers o f steel d u rin g th e p a st year. R e c e n tly there has b een an increased n u m ber o f inquiries fro m th e railroads a n d e q u ip m en t builders. B u ild in g B u ild in g op era tion s in this d istrict O p e r a t i o n s co n tin u ed d urin g D e c e m b e r t o show less d im in u tion beca u se o f co ld w eath er th a n in oth er w in ter seasons. C on tra cts aw arded a m ou n ted t o $47,398,000 as com p a red w ith $50,636,000 in N o v e m b e r, a ccord in g to th e rep orts o f th e F . W . D o d g e C o m p a n y . R esid en tia l co n s tru c tion is som ew h a t sm aller in p ro p o rtio n to th e tota l th an in p reviou s m on th s, in d ica tin g a sligh t sh ift to w a rd th e d em an d s o f business. T h e fo llo w in g figures fo r territory , w h ich co rre spon d s close to th e S econ d F ederal R ese rv e D is trict, sh ow th e D o d g e co m p ila tion s o f co n tra cts a w arded fo r th e yea r 1919 and since th e first yea r b e fore th e w ar. I t is to b e u n d erstood , h ow ever, th a t th e figures represen t d ollar valu es o n ly and th a t th e co s t o f b u ild in g has increased so largely th a t it is d o u b tfu l w hether th e a ggregate a m ou n t o f c o n stru ction n ow u n der c o n tr a c t is m u ch , if a n y , in excess o f th a t in 1913. T h e aw ards in each o f th e years show n were as fo llo w s : 1919 ........... ............... $551,127,000 1918 1917........................................................... 1916 ........................ 1915. ......................................... 1914 .................... 1913 ......................... 256,979,000 333,337,000 283,659,500 169,794,734 129,204,500 261,007,500 L abor T h e im p ro v e m e n t in la b o r co n d i tion s in this d istrict, first o b se rv e d a m o n th a go, has co n tin u e d . T h e re p o rt o f th e N e w Y o r k S tate In d u stria l C om m ission fo r th e m o n th o f D e c e m b e r show s a fu rth er increase o f 3 p er cen t, in th e to ta l n u m ber o f w orkers e m p lo y e d in 1,473 re p resen ta tive m a n u fa ctu rin g establish m en ts. T h ro u g h a p eriod o f six m on th s a to ta l gain o f 11 p er cen t, is record ed . T h e D e c e m b e r increase is a ttrib u te d to partial or co m p le te re c o v e r y fro m la b o r difficulties in several industries and also to a con tin u a l increasing d em an d fo r w orkers. Steel p lan ts in this d istrict re p o rt a large increase in th e n u m ber o f m en e m p lo y e d , b u t the to ta l is n o t y e t u p t o th e level p rior to th e strike. In explainin g th e few in d iv id u a l instan ces o f decrease, sh ortage o f coa l, steel a n d sugar are p o in te d to as th e causes fo r te m p o ra ry re d u ctio n to th e w ork in g forces o f establish m en ts d e p e n d in g u p o n these p rod u cts. T h e usual seasonal d eclin es in certa in industries such as can n in g, th e p ro d u ctio n o f leath er g o o d s and n ovelties, are ob se rv e d , b u t are n o t suffi cie n t t o offset th e m aterial increase in oth er a c t iv ities. T h is rep ort is p rep ared m o n th ly fo r th e F ed era l R e se rv e B o a rd . C op ies are issued fo r th e in fo rm a tio n o f m em b er ban k s and th ose w h o h a v e co n trib u te d to w a rd its p rep aration . A d d itio n a l co p ie s m a y b e ob ta in ed b y a d d ressin g FED ERAL RESERVE AGEN T, F ed era l R e se rv e B a n k o f N e w Y o r k . 15 N assau S treet, N e w Y o r k .
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