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MONTHLY REVIEW o f C r e d it a n d B u s in e s s C o n d it io n s Second Federal Reserve District Federal Reserve Agent Federal Reserve Bank, New York Business Conditions in the United States R O D U C TIO N and shipment o f goods continued in heavy volume during M a y; the volume o f employment was sustained and many wage ad vances were reported. Wholesale commodity prices declined during May and the early weeks o f June. P P roduction Production o f iron and steel, cement, and petroleum was larger in M ay than in any previous month, and mill consumption o f cotton was close to maximum. The high level o f production in these industries, together with increases in practically all other reporting lines, is reflected in an advance o f 2 per cent, in May in the Federal Reserve B oa rd ’s index o f production in basic industries. In the building industry there was a further decline in principal cities in the value o f permits granted which represent prospective building opera tions. Contract awards, however, which represent actual current undertakings, continued to increase, though declines are reported in the New Y ork and Chicago districts. This industrial activity has been accompanied by a slight increase o f employment at industrial establish ments. The demand fo r labor was also reflected in a larger number o f wage advances during the 30-day period ended M ay 15, than in any earlier month this year, and average weekly earnings in all reporting industries increased by 3.8 per cent. The advances were PERCENT. Index of Production in Basic Industries— Combination of 22 Indi vidual Series Corrected for Seasonal Variation (1919 average = 100 per cent.) July 1,1923 most general in the cotton, steel, meat packing, and sugar refining industries. In agriculture the condition o f both winter and spring wheat is reported less favorable than a year ago, while the condition o f the cotton crop is slightly better than last year, owing entirely to more favorable growing conditions in Texas. A shortage o f farm labor is re ported from most sections o f the country. T rade Active distribution o f commodities is indicated by heavy movement o f merchandise and miscellaneous freight, and car loadings continued to exceed all previous records fo r this season. In certain lines o f trade a decline in the volume o f m anufacturers9 orders for future delivery is reported. The volume o f both wholesale and retail trade was larger in May than in A pril. A m ong the wholesale lines, sales o f meat, hardware, and shoes showed par ticularly large increases, while sales o f clothing and dry goods decreased. The Federal Reserve B oard ’s index o f wholesale trade, which makes no allowance fo r seasonal changes, was 5 per cent, higher than in A p ril and 14 per cent, higher than a year ago. Sales o f department stores increased about 8 per cent, in May, and all reporting lines o f chain store business reported increases. Mail order sales were 6 per cent, less than in A pril, but were larger than in any previous May. PERCENT. Index of Wholesale Prices, U. S. Bureau of Labor Statistics (1913 average = 100 per cent.) 2 MONTHLY REVIEW, JULY 1, 1928 BILLION3 OF DOLLARS BILLIONS OF DOLLARS Bank Credit— 800 Member Banks in Leading Cities Bank Credit— All Federal Reserve Banks W holesale P rices arily follows quarterly tax dates, loans by the Federal Reserve Bank o f New Y ork to member banks fell to $126,000,000, the lowest figure this year, and total earn ing assets to $184,000,000, the lowest since 1917. Later in June, follow ing the collection o f income tax checks, and in connection with payments in this district on heavy new financing and a return movement o f funds to the interior, loans to member banks increased to the levels previously prevailing. H oldings o f bankers ac ceptances and Government securities remained close to the low figure o f June 16. A ccom panying reduced activity in the security mar kets and somewhat diminished forw ard ordering by manufacturers and others there was a decline in the rate of turnover o f bank deposits in New Y ork City and cer tain other centers as well. The velocity or rate o f turn over o f bank deposits is shown in the follow ing diagram for fou r cities. Allowance has been made fo r seasonal variations. Price declines were reported during M ay and the first three weeks o f June for a large number o f com modities. A ll o f the nine groups in the Bureau of Labor Statistics index, except food and house furnish ings, show decreases fo r May and the average fo r all commodities declined by 2 per cent. B an k Credit Loans o f reporting member banks in principal cities, which had been increasing since the early part o f the year, declined by $115,000,000 between M ay 16 and June 13. Bank holdings o f Government securities, which increased by over $100,000,000 in connection with the Treasury transactions o f May 15, later declined as the securities were distributed by the banks. These decreases in loans o f member banks and the receipt during M ay o f $45,000,000 o f gold from abroad were accompanied b y a decrease in the earning assets o f Federal Reserve Banks by $120,000,000 fo r the four weeks ended June 20. A t that time the volume o f Federal Reserve Bank credit in use reached the lowest point since the opening o f the year and approached the low point reached in August 1922. Reserve Bank holdings of bankers acceptances and Government obliga tions are now lower than at any time since early in 1922. The total volume o f money in circulation increased by $38,000,000 between M ay 1 and June 1, the increase being chiefly in gold and silver certificates rather than in Federal Reserve notes. M oney rates continued to show a slightly easier tendency. The June 15 issue o f $150,000,000 6-months Treasury certificates carried a rate o f interest o f 4 per cent, compared with 4 per cent, on a similar issue sold in March. Banking Conditions in the Second District In the Second Federal Reserve district the decline in bank loans in recent weeks has been more marked than in other centers. Declines in loans on stocks and bonds and loans made largely for commercial purposes began several weeks earlier than in other centers and the de clines have been relatively larger. On June 16, accom panying a flow o f funds to New Y ork and the easing in money conditions which custom- Rate of Turnover of Bank Deposits. Allowance Is Made for Usual Seasonal Changes Money Market The money market continued quiet and relatively easy during the greater part o f June, reflecting dimin ished stock market and commercial demands, and in keeping with the usual tendency fo r funds to be cheap er during the early summer before the development o f crop moving demands. FEDERAL RESERVE AGENT AT NEW YORK Commercial paper continued to be 5 per cent, fo r most prime paper, and in a few exceptional cases 4 % per cent. D ealers’ reports for the end o f M ay indi cated a further increase in the amount o f paper out standing. In the bill market, dealers continued to bid 4!/4 per cent, for bills which they offered at 4Yg per cent. The new issue of six months Treasury certificates dated June 15 carried 4 per cent, interest compared with 4J4 per cent, on a similar issue three months ago and was heavily oversubscribed. Stock market call money rates for the first part o f the month continued to rule around 4 % to 4% per cent., with occasional advances to 5 per cent., and time money rates of stock market collateral touched 4J4-5 per cent., the lowest since last February. Towards July 1 there were advances in both call and time money rates. 8 with the highest prices touched in May. Liberty bonds, on the other hand, were com paratively steady. Dutch East Indies and certain o f the French, Belgian, and Central European issues touched new high prices for the year early in June, but reacted in the latter weeks. Offering o f the $25,000,000 7 per cent, guaranteed loan o f the Austrian Government constituted the most important new issue o f the period. The bonds were guaranteed by eight other European governments in cluding Great Britain, France, and Italy, and were o f fered at a price to yield over 8 per cent. The issue was heavily oversubscribed and received wide distribution. There were also several large offerings o f domestic cor poration and State securities and total new issues reached the largest amount since January. Government Debt Commercial Paper Outstanding— Twenty-six Dealers Security Markets Follow ing a rally late in May, stock prices declined about the middle o f June and averages o f industrial is sues touched new low points for the year. Railroad stocks declined less than industrial issues, due partly to favorable earnings reports, and remained slightly above previous low levels. As shown by the accom panying diagram comparing movements o f 40 bonds and o f 50 stocks, both railway and industrial, stock prices have tended downward since March and show losses o f about 10 points. Accom panying weakness in stocks, high grade corpo ration bonds lost about a point after June 15 compared fOLURS Average Weekly Prices of 40 Bonds and 50 Stocks on the New York Stock Exchang* Outstanding developments during June in connection with the Government debt were the semi-annual pay ment on June 15 by the British Government o f approxi mately $69,000,000 o f interest at 3 per cent, per annum on the British war debt o f $4,600,000,000 to this Gov ernment, and the growing assurance that the Treasury wTould close the current fiscal year with a surplus of revenue over expenditures amounting to about $200,000,000. The British Government availed itself o f the clause o f the debt funding agreement perm itting it to make payments in Liberty bonds purchased in the open market at current prices, the result o f which was to reduce automatically by an equivalent amount the out standing public debt o f the United States. Further operations on June 15 involving the debt included pay ment by the Treasury o f interest on various issues and the redemption o f $200,000,000 Treasury certificates. The Treasury sold $190,000,000 new six months 4 per cent, certificates and collected about $350,000,000 in in come taxes. The resultant balance is expected to provide fo r Treasury requirements through the summer, so that the new offering o f certificates not only completes the re financing o f the short-dated debt begun early in 1921, but according to a statement by the Secretary is expected to be the last Treasury offering until September. Foreign Exchange Movements o f exchange during June continued gen erally in favor o f the dollar, despite the reversal in re cent months o f this cou n try’s trade balance from an ex cess o f exports to an excess o f imports. Swiss, Spanish, Danish, and Italian exchanges fell to further new low points for the year, while German, Polish, and H unga rian rates reached the lowest figures ever quoted. A t 167,000 to the dollar on June 18, German marks showed a depreciation within a month’s time o f about 70 per cent. Sterling in the vicinity o f $4.62 remained little changed, but French and Belgian francs, which had held com paratively steady during A p ril and May, declined somewhat less than half a cent to around 6*4 and 5Y4 cents, respectively. In the case o f Belgian exchange thi* was close to the low point reached in February. 4 MONTHLY REVIEW, JULY 1, 1923 O f the F ar Eastern exchanges, Japanese yen reacted moderately from the high point reached in May, while Shanghai taels were likewise lower, accom panying lower prices fo r silver which followed the discontinuance of United States Treasury Pittman A ct purchases o f domes tic silver. Indian rupees, on the other hand, were steady, and resumption o f the gold movement to India was reported. Argentine and Brazilian rates touched new low points for the year late in May or early in June, but recovered slightly during the latter part of June. Gold Movement May imports o f gold were $45,357,000 and exports were $824,000. F or the first five months o f the year imports totaled $111,700,000 against exports o f $21,743,000, leaving an excess o f imports o f nearly $90,000,000, or about $11,000,000 less than during the cor responding period last year. O f the M ay imports $26,806,000 were from England and $14,189,000 from Germany. Additional shipments were received from Germany during June. The source o f these shipments is indicated by a decline in the total gold holdings o f the Eeichsbank from 919,909,000 gold marks on A p ril 30 to 756,914,000 gold marks on June 7. The only important exports o f gold from the United States during M ay went to Mexico, and were smaller than amounts received from that country. in recent months has accompanied a reduction in the amount o f foreign securities sold here. Hence the net result o f recent movements has been the creation o f a visible balance here in favor o f European countries which is slightly larger than was created in the early months o f 1922. Foreign financing was particularly heavy early in 1922, however, and if the whole year is taken into consideration the balance created thus far this year is almost equal to the balance fo r the fu ll year 1922. The foreign credit or debit balance created through the movement o f merchandise and gold and silver and through sale o f foreign securities is shown in the fo l lowing table fo r each year since 1920. The foreign bal ances created in 1922 and 1923 have been available, among other purposes, fo r the payment o f debts and interest and fo r investment in this country. (In millions of dollars) 1920 1921 1922 First 5 mos. 1922 First 5 mos. 1923 Foreign financing in U. S.............. Net imports gold and silver.......... Excess of merchandise imports. . . 596 69 695 679 876 246 560 104 158 91 138 Total foreign credits...................... Excess of merchandise exports.. . . 665 2,950 1,374 1,976 1,122 719 664 327 387 Foreign balances (U. S.)............... -2,285 -6 0 2 403 337 387 . . . Foreign Trade Indexes of Foreign Trade Merchandise exports from the United States during May were valued at $319,000,000 and imports at $370,000,000, resulting in an excess o f imports amounting to $51,000,000. May was the third successive month in which imports exceeded exports. The excess in March amounted to $56,827,000 and in A pril to $38,780,000, according to revised figures announced by the Depart ment o f Commerce. In both January and February ex ports exceeded imports by small margins and fo r the first five months o f the calendar year the excess o f im ports has been $137,582,000. In any comparison of the balance o f trade between the United States and foreign countries the items pre cisely ascertainable are the movement o f merchandise, the movement o f gold and silver, and the sale o f foreign securities here. The reversal o f the merchandise balance In order to secure a comparison between the current volume o f exports and imports and the volume which might normally be expected from the tendencies o f the past this bank has com puted index numbers o f exports and imports as percentages o f estimated normal. The estimates fo r normal are com puted on the assumption o f a continuation in recent years o f the trends o f exports and imports fo r the past fo rty years. In com paring current figures with estimated normal, allowance has been made fo r price changes and fo r seasonal variation. The index figures com puted from the dollar value o f exports and imports have been checked by a comparison with the tonnage o f exports and imports reported by the Shipping Board. The index figures show that exports have been running fo r the past few months in the neighborhood PER CENT. Exports of Merchandise from the United States Compared with Estimated Normal. Allowance Is Made for Price Changes, Seasonal Variation and Year to Year Growth. Imports of Merchandise in the United States Compared with Esti mated Normal. Allowance Is Made for Price Changes, Seasonal Variation and Year to Year Growth FE D E R A L RE SER VE AGENT AT NEW YO R K 5 o f 20 per cent, below estimated normal, while imports have been about 25 per cent, above estimated normal. Imports have been rising steadily since early in 1921, but the tendency of exports has been downward since the middle o f 1919. The index figures are shown in the diagrams at the foot o f page 4. Commodity Prices The Department of L a b or’s wholesale price index de clined nearly 2 per cent, in May to a point 56 per cent, above the 1913 average. This is the first decline in this index since September 1922. The decline was due largely to lower prices of farm products, cloths and clothing, and fuel and lighting. O f the nine groups o f commodities that comprise this index seven showed price recessions and two were unchanged. The decline in prices o f basic commodities has been more marked than has the decline in manufactured and semi-manufactured articles. The price index o f 20 basic materials, maintained by this bank, has declined 5 per cent, since the beginning o f A pril. The index computed weekly by P rof. Irving Fisher from prices o f about 200 commodities has declined 6 per cent, from 168 on A pril 6 to 158 on June 22. Wholesale prices declined in England, France, and Canada also. Cost of Living The cost of living o f a wage earner’s fam ily rose slightly less than 1 per cent, during May, according to to the index of the National Industrial Conference Board. The retail cost of clothing rose 4.2 per cent., the largest increase in any one month since early in 1920. Detailed changes in the index were as follows. (July 1914 = 100 per cent.) Item Index May 15 Per cent, change from April 15 Per cent, change from May 1922 Food...................................... Clothing................................ Shelter.................................. Fuel and Light..................... Sundries................................ 143 174 172 178 173 0 + 4.2 + 1.2 - 1.1 0 + 2.9 +11.5 + 4.2 + 2.3 - 0.6 All Items........................... 160 + 0.8 + 3.5 Wages The index number fo r the hiring rate of 'wages for unskilled male labor, prepared by this bank, shows a 10 per cent, increase since A pril, from 44 to 48.4 cents per hour. This index is now 34 per cent, above the low point o f A p ril 1922 and only 7 per cent, below the maxi mum reached in 1920. In the accom panying diagram, this index is compared with an index o f prices o f 20 basic commodities, also prepared by this bank. These two indices show the changes which have occurred in re cent years in the m ajor costs o f many industrial opera tions. The sharp rise in the wage rates o f unskilled la bor since A p ril is in contrast with the decline in prices o f basic commodities. Wages of Unskilled Labor Compared with Prices of Basic Com modities (1913 average = 100 per cent.) Average weekly earnings in representative factories in New Y ork State, reported by the New Y ork State Department o f Labor, were $27.63 in May, or 63 cents higher than in A pril. H igher wage scales and increased working time have raised average earnings $3.04 or 12 per cent, since M ay 1922, and brought them within 5 per cent, o f the maximum o f October 1920. A total o f 287 wage increases in industrial establish ments throughout the United States during the month ended June 14 was reported by the National Industrial Conference Board. A pproxim ately two-thirds o f the in creases were in the building and clothing industries. Production The production during M ay o f 3,867,694 gross tons o f pig iron and o f 4,205,000 tons o f steel ingots exceeded figures fo r any previous months in the history o f the iron and steel industry, and the output o f 12,910,000 barrels o f cement was also larger than ever before. The production index maintained by the Federal Reserve Board advanced nearly 2 per cent, to a point 27 per cent, above the 1919 average, and higher than in any previous month. Mill consumption o f cotton amounted to 621,000 bales, or 8 per cent, more than the estimated normal fo r the month, despite curtailment o f operations by certain o f the New England mills. The high figure reflected heavy production by southern mills which are relatively larger consumers o f cotton because they manufacture a heavier type o f goods using more cotton. The woolen industry was also exceptionally active, but production o f silk goods continued curtailed. Production o f petroleum continued far in excess o f the estimated normal and there was a further increase in stocks o f crude and refined products on hand. The follow ing table shows the index numbers computed by this bank fo r production in various industries. 0 M O N TH L Y R E V IE W , JULY 1, 1923 (Estimated Normal Production =* 100 Per cent.) 1920 1921 1922 May May May Feb. Mar. 94 88 86 52 76 84 92 51 113 70 117 104 105 95 109 74 126 89 160 116 119 103 90 108 108 109 112 112 110 99 110 above the estimated normal, in March it was 11 per cent, above, in A pril 5 per cent, and in May 3 per cent. 1923 PERCENT. Anthracite coal....................... Bituminous coal..................... Pig iron................................... Steel ingots............................. Tin deliveries......................... Zinc*....................................... Petroleum............................... Copper, U. S. mine................ Cement................................... Lumber r................................ Paper, total r ......................... Wood pulp.................. ........... Tobacco consumption............ Cotton consumption.............. Wool mill activity * .............. Wheat flour............................ Sugar meltings, U. S. ports. . Leather, sole........................... Gasoline.................................. Meat slaughtered................... 102 104 97 73 97 103 91 96 101 125 121 107 100 108 103 96 98 95 101 41 41 25 36 110 19 99 88 70 71 88 80 92 105 81 90 97 96 102 105 108 91 88 82 101 146 76 98 108 121 100 120 108 105 85 127 90 146 136 a 100 91 107 118 122 132 106 121 119 Apr. 102 117 114 99 132 82 134 89 134 119 109 102 89 101 120 110 122 102p 115 116 May 114 124 105 114 83 139 95 133 y* too normal WHOLESALE TRADE ^103 50 93 108 113 118 * Seasonal variation not allowed for. a Report not completed by Federal Trade Commission, p Preliminary, r Revised. Automobile Production Production o f 393,000 motor vehicles in the United States during May set a new high mark for the industry, exceeding by 11,000 the previous high figure o f April. A n index of passenger car production, prepared by this bank, shows that May output was 50 per cent, higher than the output normally to be expected, after allowance is made for variations between seasons and the year to year growth which has characterized the industry in past years. Over 1,600,000 cars and trucks were produced in the first 5 months o f 1923, or double the output in the same period o f 1922. I f production during the remain ing 7 months should be as large as in the last 7 months o f 1922, output for the current year will be approxi mately 3,500,000 vehicles. Wholesale Trade May sales by wholesale dealers in this district, while well above those o f May a year ago, were less than in March and A pril. This decrease was due in part to seasonal tendencies but not entirely, as the decline be tween A pril and May was larger this year than usual. In order to reveal the changes in wholesale trade in dependent of the usual seasonal fluctuations, this bank has prepared an index o f wholesale trade for this district in which the figure fo r each month is shown as a percentage of an estimated normal. Normal trade may be interpreted to mean the trade which might rea sonably be anticipated in view of the usual seasonal fluctuations, and growth from year to year. Allowance has been made fo r price changes by dividing the dollar sales each month by a price index computed fo r the commodities included. Figures reported by 122 deal ers in ten lines have been included in the index. Each commodity has been weighted in accordance with its relative importance in the trade o f this district. This index is shown in the accom panying diagram. In February the volume o f goods sold was 19 per cent. 150 r 1919 1920 1921 1923 1922 Wholesale Trade in the Second Federal Reserve District Compared with Estimated Normal. Allowance Is Made for Price Changes, Seasonal Variation and Year to Year Growth In May, as in several months previous, the largest in crease in sales as compared with a year ago was re ported by machine tool dealers. Sales o f clothing, especially o f wom en’s clothing, were also large, as re tailers who underestimated their spring requirements continued to place orders fo r immediate shipment. The smallest gain over sales for a year ago was made by dry goods dealers because o f the unwillingness o f buyers to make commitments fo r the future in view o f the un settled state o f the raw cotton market. Detailed fig ures are shown in the follow ing table. Dollar Sales During May (In percentages) Commodity 1919 1920 1921 1922 1923 Hardware............................ Stationery........................... Groceries............................. Drugs........................... Dry goods........................... 363 240 123 77 153 370 182 108 107 138 95 101 584 247 133 158 116 187 185 136 149 175 97 134 107 109 90 88 91 64 110 88 94 101 93 114 100 100 100 100 100 100 100 100 100 100 100 100 321 158 139 124 149 137 125 119 116 111 111 107 Total (weighted)............ 123 152 100 100 118 Machine tools..................... Jewelry................................ Clothing.............................. (a) Men’s ........................ (6) Women’s.................... Diamonds............................ Department Store Business Largely because o f increases in sales o f wom en’s readyto-wear clothing, silk and woolen goods, and house fu r nishings, M ay sales by department stores in this district were 9.4 per cent, above those o f M ay a year ago. This gain is somewhat larger than the average fo r the past few months. F o r the first five months o f the current year sales were 7.5 per cent, above those o f the corre sponding period a year ago. Sixteen o f the largest stores reported sales during May by groups o f departments fo r the first time. The per cent, change in sales from M ay 1922 to May 1923 is shown in the follow ing diagram fo r 11 m ajor classifi cations. FE D E R A L R E S E R V E AG EN T A T N E W YO RK SALES MAY 192.2, 100% ! Detailed figures follow. MAYIQ23 T ype'of Store men’s 7 N umber of Stores D ollar Sales D uring M ay (In percentages) Per cent, change in sales per store 1919 1920 1921 1922 1923 May 1922 to May 1923 May 1922 May 1923 Apparel............ 373 Grocery............ 11,323 Ten Cent......... 1,747 278 204 2,440 438 13,885 1,827 309 243 2,747 60 69 75 83 81 79 88 110 89 100 120 105 92 87 87 102 111 101 100 100 100 100 100 100 127 128 119 111 110 106 + + + + - Total............ 16,365 19,449 72 103 90 100 123 + 3.3 8.3 4.7 14.2 0.1 7.5 5.8 &boy's w ear Crops H O S IE R Y MISCELLANEOUS TOTAL Sales of Department Stores by Major Classifications The total gain in sales has been computed from data furnished by stores which reported only total sales as well as by those which supplied the more detailed in formation. The gain in sales as compared with M ay 1922 was due in part to higher prices. The average sales check in creased from $2.61 last M ay to $2.85 this year or 9 per cent. Probably not all o f this increase has been due to higher prices, as merchants report that the people are buying a somewhat better quality o f merchandise this year. Stocks held by department stores on June 1 were 7.3 per cent, larger, measured by selling price, than those held a year ago. As sales have increased more than stocks the rate of stock turnover is more rapid. Between May 1 and June 1 there was a small decline in stocks, a change which usually occurs at this season. Sales by mail order houses in M ay were 39 per cent, above those o f M ay a year ago, a somewhat larger in crease than that reported in March and A pril. Detailed figures are shown in the follow ing table. N et Sales D uring M ay (In percentages) Prelim inary estimates by the Department o f A gricu l ture place the condition o f the cotton crop at 71 as com pared with 69.5 a year ago. The change is due entirely to favorable conditions in Texas. In the other cottongrowing States unusually wet weather has made much re planting necessary. A shortage o f labor for cotton cul tivation is reported due in part to the migration o f negroes to the North. The condition o f the winter wheat crop was reported on June 1 at 76.3 as compared with 81.9 a year ago. The acreage planted in spring and winter wheat is estimated to be slightly larger than a year ago, and the forecast o f the y e a r’s wheat crop is 817,000,000 bushels, slighjtly smaller than last y e a r’s crop. Failures Business failures during May, reported by E. G. Dun & Company, totaled 1,530 as compared with 1,520 in A pril. Liabilities, exclusive o f one stock brokerage house in New Y ork City, fo r which figures are not yet avail able, were $41,000,000, or about $10,000,000 less than in A pril. A n index o f failures maintained by this bank, in which allowance has been made fo r seasonal variations, shows that the number o f insolvencies during the past three months has been close to the estimated normal, or at the annual rate o f about 1 per cent, o f the total number o f Stock on H and June 1 (In percentages) 1919 1920 1921 1922 1923 1919 1920 1921 1922 1923 84 All dept, stores... 83 New York........ 85 Buffalo.............. 86 Newark............. 78 Rochester.......... 89 Syracuse............ Bridgeport........ 102 Elsewhere in 2nd 85 District......... Apparel stores.. . . 83 Mail order houses. 116 110 116 98 111 104 108 119 96 95 98 101 102 103 107 100 100 100 100 100 100 100 109 108 109 121 114 113 109 76 75 82 79 83 98 81 118 117 115 134 144 152 118 99 98 104 101 102 120 96 100 100 100 100 100 100 100 107 105 107 117 118 108 102 107 91 125 97 96 84 100 100 100 108 108 139 82 58 ** 106 98 ** 101 90 ** 100 100 ** 111 107 ** Chain Store Sales A continued large volume o f business is indicated by reports o f chain store systems fo r May. Sales by all types o f stores were larger than in May 1922, and the percentages o f increase were somewhat larger than in A pril. Percentage of Firms Failing to the Number in Business, in Terms of Annual Rate. AUowance Is Made for Seasonal Variation MONTHLY REVIEW, JULY l f 192S 8 firms in business. The fluctuations in the number of failures during the past several years are shown in the preceding diagram. Building The policy of postponing building operations on ac count of high costs of labor and of materials which was evident in New Y ork City during A pril, extended to other sections of the country during May as indicated by a general decrease in the value o f building permits granted in the principal cities of the country. A n index prepared by this bank shows that in March the value o f permits granted was 82 per cent, above estimated normal, in A p ril it was 44 per cent, above and in M ay there was a further decline to 22 per cent, above estimated normal. In com puting this index, al lowance has been made fo r changes in the cost o f con struction, fo r seasonal variations, and for year to year growth of the industry. The fluctuations during the past several years are shown in the accom panying dia gram. during any May o f previous years, and loadings o f one week, that ended May 26, were within 4,000 cars o f the maximum which was reached in October 1920. The increase over A p ril o f this year, however, was owing to the usual seasonal growth. This ban k ’s index in which allowance is made fo r usual seasonal changes is 118 for May, compared with 119 fo r A pril. Merchandise and miscellaneous freight, which was the most important factor in the increase o f the first fou r months o f the year, declined slightly during the five weeks ended June 2. D uring the week ended May 22 the reported freight car surplus exceeded the reported shortage for the first time since August 1922, and during the week ended May 31 this surplus was increased to 16,000 cars. PER CENT. f>ER CENT. Car Loadings as Percentages of Estimated Normal Loadings. Al lowance Is Made for Usual Seasonal Fluctuations and Year to Year Growth Indexes of Business Activity Value of Building Permits in 158 Cities Compared with the Value Normally to Be Expected Each Month. Allowance Is Made for Seasonal Fluctuations and Year to Year Growth Recent increases have brought wages o f building workers above the highest point o f 1920. Prices o f ma terials are about 30 per cent, under the 1920 maximum and the total cost o f construction is 21 per cent,, under that maximum but about double the pre-war cost. The follow ing table shows recent changes in this bank’s in dexes o f building costs. 1913 Average.................................... Maximum, 1920............................... Low, 192^......................................... March, 1923..................................... April, 1923........................................ May, 1923......................................... Building Materials Building Wages Total Cost of Construction 100 300 155 198 204 202 100 195 179 189 194 199 100 254 165 194 200 201 Railroad Traffic Car loadings of freight during May were larger than In the past few months this bank has prepared and published in the R eview a series o f index numbers de signed to measure various phases o f business activity. These indexes supplement the production indexes which have been published regularly since the summer o f 1921. In each case allowance has been made fo r seasonal fluctuations and fo r year to year growth, and the cur rent figures are expressed as percentages o f an estimated normal. W herever necessary, allowance has also been made for price changes. F o r convenience in reference the available figures fo r recent months are brought together in the follow ing ta b le : (Estimated Normal = 100 Per cent.) 1922 Wholesale trade...................... Postal receipts........................ Building permits.................... Automobile production.......... Electric power production. .. Business failures..................... 1923 May Jan. Feb. Mar. Apr. May 95 99 100 137 90 99 107 101 132 109 114 104 155 74 110 115 113 98 I ll 119 102 170 79 105 125 115 88 112 111 105 182 83 125 134 115 103 119 105 99 144 82 122 142 115 103 118 103 104 122 83 129 150 i02
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