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MONTHLY REVIEW of Credit andBusiness Conditions S e c o n d Federal Reserve Agent F e d e r a l R e s e r v e D is t r ic t Federal Reserve Bank, New York Business Conditions in the United States I N D U S T R IA L production increased in May and con tinued at a higher level than a year ago, while distribution of commodities was in smaller volume than last year. The general level of wholesale com modity prices has changed but little in the past two months. P roduction Output of manufactures increased considerably in May, while production of minerals was maintained at the A p ril level. Increased activity was shown in cotton and woolen mills, in meat packing, and in the produc tion of lu m ber; the output of iron and steel, nonferrous metals, automobiles, and building materials, after allow ance fo r usual seasonal variations, was maintained at practically the same level as in A pril. Since the latter part of May, however, production of steel and automo biles has declined. The total value of building contracts awarded continued slightly larger in May and in the first two weeks of June than in the corresponding period o f last year. Production of winter wheat w'as estimated by the Department of Agriculture on the basis of June 1 condition at 537,000,000 bushels, or 90,000,000 bushels less than last year. The indicated rye production was placed at 48,600,000 bushels, which is 20 per cent larger than the crop in 1926. PERCENT July 1, 1927 T rade Sales of retail stores in May showed more than the usual seasonal decline from the high A p ril level. Com pared with May o f last year, department store sales were about 4 per cent smaller, while those o f mail order houses were slightly larger. Value of wholesale trade o f all leading lines, except groceries and meats, was smaller in May than in A p ril and in the corresponding month of 1926. Inventories o f merchandise carried by department stores showed slightly more than the usual seasonal decline in May and at the end o f the month were somewhat smaller than a year ago. Stocks of wholesale firms were also smaller than last year. Freight car loadings increased in May by less than the usual seasonal amount, and for the first time in over a year daily average loadings were in smaller volume than in the corresponding month o f the preceding year. Load ings of all classes of commodities except livestock, ore, and miscellaneous products were smaller than last year. P rices The general level of wholesale com modity prices has remained practically unchanged since the middle of A pril. Prices o f grains, cotton, and hides and skins have advanced, but these advances have been offset in the general index by declines in the prices o f livestock, wool, silk, metals, and rubber. 150- 125 „ MINERAL5 \V A ,r , S T. 107 . . J/ 100 j mnuFAcwRE5 75 50 1923 J9 £ 4 1925 1926 1927 Index Numbers of Production of Manufactures and Minerals, Adjusted for Seasonal Variations. (1923-25 average == IOO per cent.) Wholesale Price Index of United States Bureau of Labor Statistics. (1913 average = IOO per cent.) 50 MONTHLY REVIEW, JULY 1, 1927 BILLIONSofDOLLARS M onthly A verages o f W eekly Figures for Member Banks in 101 Leading Cities. (Latest figures are averages for three weekly report dates in June.) Reserve Bank Credit: M onthly Averages of Daily Figures for 12 Federal Reserve Banks. (L atest figures are averages of first 23 days in June.) B a n k C redit mercial loans were moderately high fo r the time o f year. The first o f the diagrams on the follow ing page shows the unusually rapid expansion o f credit by reporting banks in recent months, and the second indicates the consequent increase in the reserve balances which all member banks have maintained with the Federal Reserve Banks. The actual amount o f reserve deposits varies slightly above or below the required balances, but reflects principally changes in requirements due to changes in deposits. Partly offsetting the demand fo r reserve funds caused by this increase in reserve requirements, the amount o f currency in circulation this year has been smaller than a year ago. Gold imports during the first fo u r months of the year were o f sufficient amount to supply the in creased demand fo r credit early in the year and to reduce the amount o f Federal Reserve credit in use but in recent weeks there has been no large net inflow o f gold and the continued expansion of member bank credit has prevented the usual seasonal reduction in the use o f Reserve Bank credit or any easing in money rates. Commercial paper rates in June were the highest since January, and the rate on 90-day bills advanced near the end of June to the highest level since early in March. As the follow ing table indicates, the rate level near the end of June was generally higher than a year previous. Demand for bank credit to finance trade and industry remained at a constant level between the middle o f May and the middle of June, and the growth in the volume o f credit extended by member banks in leading cities during the period was in holdings of securities and in loans on stocks and bonds. Loans to brokers and dealers in securities by reporting member banks in New Y ork City increased rapidly and on June 15 were in larger volume than at any previous time covered by the reports. A t the Federal Reserve Banks there was little net change in the volume o f bills and securities between May 25 and June 22, the fluctuations during the period re flecting largely the effects of Treasury operations. Dis counts fo r member banks toward the end o f June were in about the same volume as a month earlier while there was a decline in the Reserve B anks7 holdings of accept ances and an increase in the portfolios of United States securities. Conditions in the money market were fairly stable throughout the period, with slight advances in the rates on commercial paper and more recently on bankers acceptances. Money Market M oney Rates at New Y ork Call M o n e y ................................................. Time money— 90 d a y .............................. Prime commercial paper......................... Bills— 90 day unendorsed....................... Treasury certificates and notes Maturing September 1 5... . Maturing December 15. . . . Federal Reserve Bank of New York rediscount ra te ...................................... Federal Reserve Bank of New Y ork buying rate for 90 day bills................ June 29 M ay 27 June 29 1926 1927 *4 K-5 *4-5 3Vs *4}4 4 % -4 M 4-4 H m 2.85 3.05 3.23 3.27 3.07 3.18 sy2 4 4 3K CO The principal influences on the money market during the past month were the continued rise in loans and investments of commercial banks and the quarterly tax period operations of the United States Treasury. Even excluding the increase in holdings of Govern ment securities on June 15, due to purchases o f the new issue, the total loans and investments o f reporting mem ber banks advanced in June to new high levels in this district and in the country as a whole. Loans to brokers and dealers in securities placed by New Y ork City banks increased to the highest point since the series o f weekly reports was started, and were an important element in the increase of member bank credit. Investments in securities other than United States Government issues also reached the highest level ever reported, and com- 3M 4M 4 1927 4% 4H 35 A ~3M * = Prevailing rate for preceding week. A very large volume o f Treasury business again was transacted around June 15, without marked effect on the 51 FEDERAL RESERVE AGENT AT NEW YORK BILLIONSofPOLLkRS 22i BILLIONSo/WLLAR5 BILLlON5ofDOLLARS 'BILLION5ofDOILAR5 m o m !: y i n 2 .4 - BILU 3 ^ SECURI TIES CIRCUL AT10N 1 1927 19Zi — V925 4 .6 I J9Z6 \ j/ J J m , f 1927 44 ■'JUU Total Loans and Investments of All Reporting Member Banks; R eserve Balances o f All Member Banks with Federal Reserve Banks; Amount o f Currency in Circulation in the United States; Total Bills and Securities o f All Federal Reserve Banks. money market. Money rates remained steady through out the tax period, although on June 15 Treasury re demptions and interest payments exceeded income tax and other collections by approximately 250 millions in this district. This large surplus o f funds made available to the market was offset by tem porary reductions in Reserve Bank holdings o f bills and securities, and the sale to several member banks o f participations in the special one-day certificates of indebtedness issued to the Reserve Bank by the Treasury to cover its temporary overdraft. The collection o f income tax checks during the follow ing week withdrew funds from the New Y ork market, and provided the Treasury with funds with which to repay the New Y ork Reserve Bank, and simultaneously the participations of member banks were terminated. C o m m er c ia l P aper M arket W ith the bulk of the sales at 4 % per cent, the rate fo r prime commercial paper generally was slightly higher than in the previous fou r months, and about ^4 o f one per cent higher than a year ago. Due in part to the higher income return, bank investment demand fo r paper became more active, follow ing the quiet market o f May. There was little change in the amount o f accommoda tion requested by open market borrowers and conse quently dealers ’ holdings of paper remained light. A t the end o f May, 26 dealers had outstanding $582,000,000 o f paper, an amount 3 per cent smaller than a month earlier, and 13 per cent smaller than in 1926. B il l M ark et Offerings o f bills to the market continued in large volume during the first part o f June, and as the demand was light due to a diminution o f foreign account buy ing, dealers’ portfolios increased substantially to the highest level o f the year and the bill holdings o f the Reserve Bank also increased. Evidence of this condi tion was shown by a return of the offering rate on 6 months bills to 3 % per cent, the level current prior to the reduction in the last half of May. Follow ing this, exceptionally heavy buying of 90-day maturities fo r foreign account developed, and dealers' portfolios and the bill holdings of the Reserve Bank were reduced con siderably. Tow ard the end o f the month, however, most dealers advanced their rates on 90-day unindorsed bills in anticipation o f a larger supply o f bills, making the offering range 3 % -3 % per cent. Gold Movement Total gold imports at the P ort of New Y ork during the first 29 days o f June amounted to $8,000,000, while exports were only $800,000, most o f which was shipped to Mexico. The principal im port movement was $7,600,000 from the Netherlands to New Y ork, continuing ship ments begun in May. Complete returns fo r May show that total imports o f gold into the United States in that month were $34,200,000. O f that amount $26,000,000 came from E n g land, $2,400,000 from Australia, $2,000,000 from Japan, and $1,000,000 from China. A bout $1,500,000 was ex ported, mainly to Latin Am erica and the F a r East. Gold movements in the first five months o f this year resulted in a net im port o f $120,000,000, as com pared with a net inflow o f $98,000,000 fo r the entire year 1926. This influx represents large shipments from Canada, England, France, the Netherlands, Japan, and Australia, with no large offsetting outflow except the withdrawals of earmarked gold by the German Reichsbank in January and February. There has as yet been no export o f gold to Canada, such as occurred in the Spring o f last year, and Canadian exchange has recently declined close to the gold im port point. Reduction in the National Debt Several steps were taken in June by the United States Treasury toward the reduction o f the principal o f the National debt and the interest charges thereon. Follow ing the announcement in M ay that the Second Liberty Loan bonds w ould be called fo r redemption on November 15, the Treasury in June offered the remaining holders a new issue o f 3 % per cent bonds, due in 1943-47, in exchange fo r their Liberty bonds, and about $243,000,000 were exchanged. Later in the month it was announced that surplus funds would be applied to the purchase o f Second Liberty Loan bonds; proposals fo r their sale were received from holders, and were accepted to the 52 MONTHLY REVIEW. JULY 1, 1927 19?J Yields on 1922 Liberty 1923 1924 1925 Bonds and on Short-term Government Issues. 1926 United 1927 States amount of about $64,000,000 at prices not exceeding 1001/2. As the result of these operations, together with exchanges made in March and other purchases in recent months, the amount of Second Liberty Loan bonds out standing was reduced from $3,104,000,000 on February 28 to $1,276,000,000 on June 30. In addition, a reduction of $129,000,000 in the prin cipal of the National debt was effected through June refunding operations. A total of $379,000,000 o f Treas ury Sy2 per cent certificates o f indebtedness matured on June 15, which were only partly replaced by the sale of $250,000,000 of the new issue o f Treasury 3 % per cent bonds at lOO1^ . The yield o f 3.33 per cent on these bonds was the lowest on any long-term issue of the United States Government since the W ar. A s the accom panying diagrams show, yields on long-term Gov ernment issues have declined steadily since 1921, along with yields on high grade corporation bonds. Yields on short-term Treasury issues, like open market commercial borrow ing rates, have moved upward since 1924, however, and are now about the same as in the summer of 1922. As a result of the June operations and other transac tions during the year which were made possible by the application of the budget surplus to debt reduction, together with the retirement of United States securities received in payment of foreign debts, and the statutory sinking fund purchases, the debt o f the National Govern ment appears to have been reduced about $1,131,000,000 June 30 1919 ..................................................... 1920....................................................... 1921....................................................... 1922....................................................... 1923....................................................... 1924....................................................... 1925....................................................... 1926....................................................... 1927....................................................... Gross Debt $25,482,000,000 24.298.000.000 23.976.000.000 22.964.000.000 22.350.000.000 21.251.000.000 20.516.000.000 19.643.000.000 18.512.000.000 Debt Retired During Fiscal Year ii.isi.ooo.ooo 322.000.000 1,012,000,000 614.000.000 1.099.000.000 735.000.000 873.000.000 1.131.000.000 1921 J922 1923 1924 1925 1926 1927 Yields on High Grade Corporation Bonds (Standard Statistics Corporation figures) and Commercial Paper Rates. during the year, the largest reduction in any year since 1920. The gross debt consequently declined to about $.18,512,000,000, or approxim ately $8,000,000,000 below the high point reached shortly after the close o f the W ar. F or the fiscal year ended June 30, 1927, ordinary receipts exceeded expenditures chargeable against those receipts by about $636,000,000, the largest surplus o f the post-war period. A n im portant factor in this large surplus was an increase in income tax collections, which, notwithstanding lower tax rates, yielded about $250,000,000 more fo r the fiscal year ended June 30, 1927 than in the previous year, apparently reflecting a high rate of business activity and large profits. Customs receipts also were somewhat larger than in the previous fiscal year, but there was a considerable decline in the amount o f miscellaneous taxes received, reflecting the reduction or abolition o f special taxes, such as the capital stock tax and taxes on automobiles and amusement receipts. The follow ing table gives the amount o f tax collections from various sources during recent years. (In millions of dollars) Fiscal Year ended June 30 1920................... 1921................... 1922................... 1923................... 1924................... 1925................... 1926................... 1927................... Customs 323 309 356 562 546 548 579 605 Incom e and Profits Taxes Miscel laneous T axesf Total 3,945 3,206 2,068 1,679 1,842 1,761 1,982 2,225 1,460 1,390 1,145 946 953 829 856 644 5,728 4,905 3,569 3,187 3,341 3,138 3,417 3,474 flncludes capital stock, estate, sales, tobacco, stamp, and special taxes. The large surplus in a year when Federal tax collec tions were more than $2,200,000,000 smaller than in 1920 reflects the reduction in governmental expenditures. The total of ordinary expenditures fo r the year ended June 30, 1927 was approxim ately $3,000,000,000 smaller than in 1920. Low ering of interest charges through debt retirement and refunding at lower interest rates has contributed to this reduction. FEDERAL RESERVE AGENT AT NEW YO R K Security Markets Stock price movements were irregular in June, but the tendency was downward and representative price averages of both industrial and railroad stocks near the end of the month showed net losses of several points from the high levels of May. The activity of the market showed a tendency to slacken in June. A ccom panying some evidence that new security flota tions had been proceeding more rapidly than investors were absorbing them, bond trading also declined in vol ume and prices were generally lower than in May. H igh grade corporation bonds showed an average loss o f at least a point from the high levels of early May, and foreign issues also were somewhat lower. United States Government bonds declined in price after the new long term issue was announced, and notwithstanding some subsequent recovery showed net losses fo r the month. Follow ing the unusual amount o f new securities offered to the market during the previous two months, the vol ume o f security flotations declined in June, but still remained large. A ll classes of domestic issues, with the exception of realty offerings, were noticeably smaller than in May, but foreign financing was about $100,000,000 larger. The larger foreign offerings included $35,000,000 of International Telephone and Telegraph Company bonds, a $20,000,000 Free State of Bavaria loan, $20,000,000 o f Cuba Northern Railways Company bonds, and part of a $65,000,000 Government guaran teed bond issue of the Canadian National Railway Company. The Foreign Exchanges The month of June was marked by general strength in the Continental gold exchanges, while sterling fluctu ated within narrow limits somewhat above the lowest figure touched in May, but below the best level reached in that month. The range for June was only between $4.8538 and $4.8519. The German mark, after dropping to 23.65 cents in May, was steady just below 23.70 cents. The Swedish crown rose to parity and Netherlands florins and Swiss francs were also strong. Movements in the French and Belgian francs were nominal. Am ong the unstabilized currencies, the Italian lira rose to the best figure since J uly 1920, passing above 5.80 cents against a May low just above 5 cents. The Spanish peseta was heavy, dropping below 17 cents compared with a May high of 17.71 cents. Norwegian crowns were firm, slightly under 26 cents. A m ong the Am erican rates, Canadian dollars fell from a slight premium at the beginning of the month to a substantial discount toward the end. The Argentine peso was quoted above dollar parity at the best figure since 1920, the strength of the peso in world markets giving rise to gold imports from South A frica. M ove ments of the milreis were small, with a sagging tendency toward the end of the month. In the Far East, the rupee was strong, rising to 36.25 cents notwithstanding two reductions within the month in the discount rate of the Im perial Bank. Y en were also firmer, rising above 47 cents. Silver moved in an unusually narrow zone, the difference between the high 53 and the low being less than 2 cen ts; and fluctuations in the silver currencies were similarly restricted. Changes in Central Bank Rates Six changes in central bank discount rates were an nounced during the m on th : the Im perial Bank of India, from 7 per cent to 6 per cent on June 2 and to 5 per cent on June 23: the National Bank o f Greece, from 11 per cent to 10 per cent on the 9th; the German Reichsbank from 5 per cent to 6 per cent on June 10; the Bank of Danzig, from 51/4 per cent to 6 per cent on June 21; and the National Bank o f Belgium, from 5 % per cent to 5 per cent on June 22. The rate advances in Germany and Danzig were the first increases in European central bank rates since August o f last year. Foreign Trade Both exports and imports o f merchandise showed seasonal declines in May, but were larger than a year ago. Exports, valued at $394,000,000, were $37,000,000 larger than last year and were the largest in May of any year since 1920, when prices were the highest in many years. Imports, valued at $346,000,000, were $25,000,000 larger than in May 1926. Although exports o f raw cotton continued the usual seasonal decline in May, they remained large and were 50 per cent larger than in May o f last year. Grain exports also remained large and were valued at $7,000,000 more than a year ago. E xports o f partly m anufac tured goods, consisting chiefly of copper, iron, steel, and lumber, were valued at $10,000,000 more than in May 1926, a larger gain than in any other group. Quantity receipts o f crude rubber and coffee were smaller than in A pril, but larger than a year ago. Im ports o f raw silk showed an increase in volume, both over the preceding month and over last year. The larg est increase in imports, however, was in finished manu factures, consisting chiefly o f newsprint and m anufac tures of cotton, wool, and jute. The total value o f these commodities im ported in May was $8,000,000 larger than a year ago. Indexes of Business Activity Indexes of business activity com puted by this bank, although somewhat lower fo r M ay than fo r A pril, con tinued to indicate a high level o f trade. Domestic retail trade was restricted by unfavorable weather conditions, but remained moderately high, and foreign trade con tinued in large volume. Bank debits both fo r the country as a whole and fo r this district, both exclusive o f New Y ork City, showed slight reductions from A pril, but the index for the entire country was higher than in any month in recent years with the exception o f A pril. Freight car loadings showed somewhat less than the usual seasonal increase, but continued to reflect a large prim ary distribution of commodities. Business failures were less numerous than in any other recent month but continued to exceed those o f a year ago. The follow ing table gives this bank’s indexes o f busi 54 MONTHLY REVIEW, JULY 1, 1927 ness activity m percentages o f the computed trend, with allowance fo r seasonal variation, and, where necessary, for price changes. (Computed trend of past years=100 per cent) 1926 1927 M ay March April May Primary Distribution Car loadings, merchandise and m isc........ Car loadings, otherr..................................... E xports............................................................ Im ports........................................................... Grain exports................................................. Panama Canal traffic.................................. 111 107r 91 110 121 97 108 99r 98 117 71 97 109 105r 104 126 135 96 107 104 103p 121p 148 Distribution to Consumer Department store sales, 2nd D ist............. Chain store sales........................................... Mail order sales............................................ Life insurance paid f o r ................................ Real estate transfers.................................... Magazine advertising.................................. Newspaper advertising............................... 98 105 104 109 102 102 107 98 102 99 119 100 101 98 lOOr 103 102 114 96 101 101 94 100 100 106 91 103 101 111 121 102 115 141 109 119 137 109 117 135 104 103 114 110 96 109 102 105 128 114 106 135 227 97 117 100 119 130 120 107 134 229 97 116 100 121 129 114 108 131 214 92 185 184 183 General Business Activity Bank debits, outside of N. Y. C it y ......... Bank debits, New York C it y .................... Bank debits, 2nd Dist. excl. N. Y . C it y . Velocity of bank deposits, outside of New York C it y ......................................... Velocity of bank deposits, N. Y . C it y .. . Shares sold on N. Y. Stock Exchange*. . Postal receipts............................................... Electric p ow er............................................... Employment in the United States........... Business failures........................................... Building perm its........................................... New corporations formed in N. Y . State General price level....................................... *=Seasonal variation not allowed for p=Prelim inary 99 111 116 113 j 184 r —Revised Building The May volume of building and engineering con tracts, as reported by the F. W . Dodge Corporation, was 9 per cent smaller than the total fo r A pril, but was slightly larger than a year ago. Contracts awarded in the New Y ork and Northern New Jersey district were slightly smaller than last year. Residential building showed a reduction from the previous two months and was smaller than a year ago, and industrial and educational contracts were below last y e a r’s level. Public works and utilities projects, however, were again heavier than in 1926, and commer cial building was somewhat larger. B uilding permits issued in 486 cities throughout the country were 11 per cent smaller in May than a year previous, according to the S. W . Straus & Co. report. The declines in perm it valuations during the past year have appeared to be at variance with the large volume o f contract awards, but, as the accom panying diagram shows, figures on the amount of floor space represented by contract awards are in substantial agreement with permit records in indicating a reduction in the amount o f buildings to be constructed. Both series have shown decreases from a year previous in 10 of the past 12 months. The floor area figures exclude contracts fo r public works and utilities, many of which are engineer ing projects where floor area is of little or no signifi cance, and the value o f which has shown substantial increases over a year ago in most recent months. The relatively high level of construction work indicated by total contract figures, therefore, appears to have been due largely to the inclusion o f contracts fo r the con struction o f roads, bridges, and other public works and utilities, which are excluded from permit records, and the two series are in agreement in showing a reduction during the past year in the construction of buildings. Crop Conditions The condition o f crops fo r which reports have been issued by the Department o f A griculture showed no con sistent change on June 1 from that o f a year ago. In general the condition was somewhat below the average condition fo r that date in the past ten years. H ay and pasture lands and the rye crop were in unusually good condition in New Y ork State and throughout the coun try. The condition o f spring wheat, oats, and barley was better than a year ago, but below the ten-year average. The June 1 forecast was fo r a winter wheat crop about 15 per cent smaller than in 1926 and below the average fo r recent years. The planting o f corn had been seriously retarded by the cool, wet weather and the prospects fo r that crop were therefore uncertain. The condition o f fru it crops was below average, and the indications were that yields w ould be the smallest in several years. The reported condition o f principal crops on June 1 o f this year in per cent o f normal, with com parable figures for a year ago and the ten-year average, was as follow s: (N o rm a l= :1 0 0 p er ce n t) New York State United States Crop W inter wheat................. Spring w h eat................. A pples............................. 10-Yr. Av. June 1, 1926 June 1, 1927 10-Yr. A v. June 1, 1926 June 1, 1927 83 66 78 81 81 77 74 70 85 89 83 83 83 88 93 92 72 78.1 88.9 86.1 86.9 84.9 85.3 8 6.6 6 9,7 7 6.5 7 8.5 7 8.8 8 1.0 7 3.4 7 6.0 7 7.0 7 8.3 72.2 8 6.8 7 9.9 8 1.5 87.6 8 8.0 88.3 5 7.2 87 87 87 87 86 78 FEDERAL RESERVE AGENT AT NEW YORK CORN P r o d u c tio n 55 COTtON A continued high level of productive activity in May was indicated by this bank’s indexes of production, in which allowance is made for seasonal variations and year-to-year growth. Automobile production was closer to that of a year ago than in any previous month this year, iron and steel output continued at high levels, and more than seasonal increases occurred in cotton and woolen mill activity and the production of cement and anthracite coal. In June there were evidences of curtailment, especially in the anthracite coal, iron and steel, and automobile industries, but cotton mills continued active. May indexes are shown below, with comparative figures for recent months and a year ago. (Computed trend of past years=100 per cent) 1926 M ay Producers’ Goods Pig iron....................... Steel ingots................. Bituminous coal . ....... Copper, U. S. mines. . Tin deliveries............. Zinc............................. Petroleum.................... Gas and fuel oil. . . . . . Cotton consumption.. Woolen mill activity*. Cement....................... Lumber....................... Leather, sole............... Silk consumption*---- 118 110 96 103 98 100 105 99 89 82 128 104 61 95 Consumers’ Goods Cattle slaughtered............... Calves slaughtered.............. Sheep slaughtered............... Hogs slaughtered................. Sugar meltings, U. S. ports. Wheat flour.......................... Cigars................................... Cigarettes............................. Tobacco, manufactured. . . . Gasoline............................... Tires. .................................... Newsprint............................ Paper, total.......................... Boots and shoes................... Anthracite coal.................... Automobile, allr.................. A utom ob ile, passenger......... Automobile, truckr............. * = Seasonal variation not allowed for 118 87 102 1927 March 114 112 133 96 97 98 120 106 115 91 124 85 88 130 111 102 112 83 90 92 98 76 107 136 107 125 93 82 95 127r 98 108 98 107 75 107 157 130 119 95 96 73 133 125 lOOr lO lr 120r p=Preliminary April M ay 115 114 111 94 102r 104 94 116 104 106 87 111 87 99 102 92 122 108 89p 125 87 84 126 '79 119 111 86 109 96 94 105 98 78 103 149 142 116 94 92 93 113r 118 92r 116 83 106 98 92 101 105 76 106 113 87 86p 94 116 121 93 r=Revised Prices of Corn at Chicago (N o. 3 Yellow ) and Cotton at New York (M iddling U pland). (L ast weekly quotations in each m onth.) during the past month have been the highest since the summer of 1925, reflecting the unfavorable prospect for this year’s crop. Even though favorable conditions pre vail during the remainder of the growing season, the delayed planting involves increased hazard of frost damage before the crop matures. Cotton prices also have shown a considerable recovery from the low levels of last Fall, but in June were still below those of a year ago and only about half as high as three years ago. The unusually large crop of last year has been largely disposed of through increased domestic consumption and heavy export demand, and prospects for the new crop are uncertain. Wheat prices have been steady in June, following a moderate advance earlier in the season. Hog prices continued the decline that started in April, but cattle prices were firmer in June and hides advanced to the highest sustained level since 1923. Crude rubber, after remaining relatively stable for several months, declined to the lowest level since the end of 1924, and metal prices continued weak. C o m m o d ity Prices W h o lesale T ra d e The average level of wholesale prices has remained almost unchanged for the past two months. The De partment of Labor index for May was practically the same as for April, and this bank’s index of basic com modity prices was virtually stationary from the first week in May to the last week in June. Agricultural prices advanced moderately from April to May and in general were the highest since last October. Non agricultural prices, however, declined slightly further, and were lower in May than at any time since the Fall of 1916. In June there appears to have been little change of importance in either group as a whole, though there have been considerable changes in individual commodities. As the accompanying diagram shows, corn prices Wholesale trade in this district continued to be smaller in value in May than a year previous. The average reduction in sales in recent months has been only slightly larger than the reduction in wholesale prices during the year as reported by the Bureau of Labor Statistics. The presumption therefore is that the actual quantity of goods sold has been nearly as large as last year. Sales of machine tools showed a considerable increase over a year ago in May, following decreases in most of the previous months since last summer. Cotton goods sales by mill agents also were substantially larger in value, although prices remained lower than a year ago. Paper dealers’ sales showed an increase, following small decreases in the two previous months, and grocery sales 56 MONTHLY REVIEW, JULY 1, 1927 were equal to those of a year ago for the first time in a year. All other reporting lines showed decreases of varying amounts from last year’s sales. Shoe stocks at the end of May were much larger than a year previous, and moderate increases were reported in wholesale stocks of groceries, cotton goods, and jewelry and diamonds, and in mill stocks of silk goods. The percentage of outstanding accounts collected during the month averaged slightly lower than last year, hut there was no consistent change among the various lines in the rate of collections. Percentage Change May 1927 from April 1927 Commodity Net Sales Groceries....................... Men’s Clothing............ Women’s dresses.......... Women’s coats and suits........................... Cotton goods—Jobbers. Cotton goods— Com mission ...................... Shoes............................. Drugs............................ Hardware..................... Machine tools**.......... Stationery..................... Paper .......................... Diamonds..................... Jewelry......................... + 6.7 — 38.9 — 8.6 Percentage Change May 1927 from May 1926 Stock end of Month Net Sales + 0.4 — 7.6 — 14.5 — 8.4 — 3.8 — 3.3 — 67.2 — 0.7 + 7.1 + 8.4 — 0.5 —23.4 — 26.9 — 8.0 + 1.0 — 7.4 — 4.7 — 16.21 + 2 4 .1 / +10.7 + 3*6* — 12.6 — 8.2 + 3.9 — 3.0 — 1.8 — 6.5 — 9.1 +13.4 — 14.1 + 7.0 — 11.71 — 2.2 — 17.4/ Weighted Average.. . — 15.3 Stock end of Month Per cent of Accounts Outstanding April 30 Collected in May 1927 76 2 30.9 79 7 35.6 + '6!7 35 !i 35! 5 + C k 6* +38.7 — 3.4 — 3.1 48*2 43.0 52.7 49.0 si "s 45.4 37.6 47.1 70.7 + 4.2 71^8 67.8 27.7 51.6 52.8 63.7 27.3 * = Quantity not value. Reported by the Silk Association of America. **=Reported by the National Machine Tool Builders’ Association. C h a in Store Sales Except for a large increase in chain grocery store sales, chain store business compared much less favorably in May than in April with that of a year ago. The increases reported in April, however, had been unusu ally large, due to Easter trade, and May 1926 had been a very active month for all branches of retail trade. The May increase in the grocery trade, both in total sales and in sales per store, wTas the largest since last November. Total sales of ten cent, drug, and variety stores were somewThat larger than in May of last year, but shoe and candy stores reported substantial decreases. All reporting lines except groceries had smaller sales per store than a year ago. Percentage Change May 1927 from May 1926 Type of Store Number of Stores + Total Sales Sales per Store + 2 1 .8 + 5 .0 + 8 .6 — 1.9 — 17.0 + 1 4 .2 — 11.9 + 1 2 .2 — 3 .3 — 1 1 .6 — 5 .5 — 23.6 Variety.................................................... Candy..................................................... + 8 .6 + 2 2 .9 + 3 .8 + 8 .7 + 2 8 .7 + 7 .4 T otal.................................................... + 8 .7 + 1 4 .1 + 5.0 Grocery........................................................ Ten cent.................................................. Drug....................................................... T obacco.................................................. 8 .0 Sales of about three-fourths of the reporting depart ment stores in this district were smaller in May than a year previous, and their combined sales showed a reduc tion of nearly 4 per cent. Business in May of last year, however, was unusually good, as, due to the late Spring, a considerable amount of business was done in that month which ordinarily is done earlier in the season. The percentage of outstanding charge accounts col lected during the month was slightly larger than a year previous for the third consecutive month. The value of stocks of merchandise on hand remained about 2 per cent smaller than last year, but due to the smaller sales in May, the rate of stock turnover was slightly lower than a year ago for the first time this year. 1926 + 7.2 — 49 D e p a rtm e n t S tore T ra d e — 11.3 — 17.9 Locality Percentage Change May 1927 from May 1926 Net Sales Stock on hand end of month Per cent of Charge Accounts Outstanding April 30 Collected in May 1927 1926 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................. — 3.6 — 1.4 — 11.3 — 6.9 — 1.6 — 11.8 — 5.3 — 13.6 — 1.8 — 10.1 + 7.4 — 14.6 + 7.1 + 0.2 — 11.4 — 12.1 — 18.9 + 6.4 — 9.9 — 4.5 53.0 42.1 40.1 49.3 52.0 44.9 47.’ 8 47. 7 34.4 36.0 All department stores................... — 3.9 — 1.9 48.9 47.4 Apparel stores................................ Mail order houses......................... — 0.6 — 1.4 + 5.6 43.3 41.6 Sales of most lines of apparel were smaller than last year, following large increases in April, while sales of furniture and home furnishings continued close to last year’s volume. Sales of woolen goods were noticeably larger than a year ago for the first time in many months, but sales of cotton goods, and silks and velvets were 'substantially smaller. Books and stationery...................... Toys and sporting goods................ Toilet articles and drugs................ Woolen goods................................... Luggage and other leather goods. . Home furnishings............................ Linens and handkerchiefs............... Silverware and jewelry................... Shoes................................................. Women’s and Misses’ ready-to-wear Men’s and Bovs’ wear.................... Men’s furnishings............................ Women’s ready-to-wear accessories Cotton goods................................... Musical instruments and radio. . . . Silks and velvets.............................. Miscellaneous................................... Net Sales Percentage Change May 1927 from May 1926 Stock on Hand Percentage Change May 31, 1927 from May 31, 1926 + 15.3 + 5.3 + 5.1 + 4.4 + 1.8 + 1.4 + 0.3 + 0.1 — 1.0 — 3.4 — 5.1 — 5.7 — 7.2 — 7.7 — 8.1 — 14.4 — 14.6 — 15.2 — 7.7 + 4.4 + 2.5 + 0.7 — 16.4 + 4.4 + 0.4 +10.1 + 4.0 — 0.9 — 4.9 + 10.2 — 0.4 — 4.7 + 12.4 + 1.4 — 4.1 — 17.1 — 4.6 — 6.6
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