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MONTHLY REVIEW
of Credit and Business 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

B u s in e s s C o n d it io n s in t h e U n i t e d S t a t e s
H E R E was a slight decline in the activity of in­
dustry and trade in A pril, and a further reduction
in the general price level. Commercial demand
fo r bank credit continued large and the volume o f secur­
ity loans, after a rapid decline since the turn of the year,
remained at a constant level.

T

P r o d u c t io n

Production in basic industries, according to the F ed ­
eral Reserve B oa rd ’s index, decreased 1 per cent in
A pril, slight increases in production of lumber and pig
iron being more than offset by declines in output in other
industries. Particularly large recessions were shown in
the production o f steel ingots and in textile m ill activity.
Automobile production, not included in the index, con­
tinued in large volume. F actory employment and pay
rolls declined slightly in A pril, particularly in the food,
tobacco, textile, and boot and shoe industries. The value
of building contracts awarded during A p ril was smaller
than in March and practically the same as in A p ril of
last year. Awards fo r the first two weeks in May, how­
ever, showed increases as com pared with the same weeks
in 1925. Reports by the Department o f A griculture in­
dicate that up to the first o f M ay 68 per cent o f spring
plowing and 56 per cent of sowing and planting was
completed, com pared with about 83 per cent and 66 per

June 1, 1926

cent last year. On the basis o f the condition o f winter
wheat on May 1, a yield o f 549,000,000 bushels is fore­
cast, compared with a final yield of 398,000,000 bushels
in 1925.
T rade

The volume o f wholesale trade in A p ril was seasonally
smaller than in March for all lines except meats. Com­
pared with a year ago, sales o f groceries, meats, and
drugs were larger in A pril, while sales o f dry goods,
shoes, and hardware were smaller. Department store
sales increased less than usual and were somewhat
smaller than a year ago. Sales o f mail order houses
were slightly smaller than in March but continued to be
larger than in the corresponding month of 1925. There
was some decrease in the stocks o f merchandise held by
wholesale firms during the month, and inventories of
department stores showed less than the usual seasonal
increase, though they were larger than a year ago.
W eekly freight car loadings decreased in the early part
o f A p ril but ]ater increased, and the volume o f ship­
ments fo r the month of A p ril as a whole and fo r the
first two weeks in May was larger than in the corres­
ponding periods o f any previous year.
P r ic e s

Wholesale com modity prices, according to the Bureau
o f Labor Statistics index, declined slightly from March

TER CENT

PERCENT

Index of United States Bureau of Labor Stjatistics. (1913 = 100;
base adopted by Bureau). Latest figure, April.

Index of 22 Basic Commodities, adjusted for Seasonal Variations
(1919 = 100). Latest figure, April.




2

MON THLY REVIEW , JUNE 1, 1926

PR ET
E CN

Index of Department Store Sales in 359 Stores (1919 = 100 Per
Cent. Latest figure, April).

to A pril. Increases in the farm products and food
groups, which had been declining fo r several months,
were more than offset by decreases in other groups. The
greatest declines were in the prices of clothing materials.
In the first three weeks of M ay prices of wheat, cattle,
sheep, cotton goods, pig iron, bricks, and rubber declined,
while those of hogs, raw silk, and crude petroleum in­
creased.
B a n k C r e d it

Commercial demand fo r bank credit at member banks
in leading cities continued in large volume between the
middle o f A p ril and the middle of May. Liquidation of
security loans which had been rapid since the beginning
of the year, did not continue after the middle o f A pril,
and the volume of these loans remained fairly constant
at a level about $450,000,000 below the peak at the end
o f 1925. There was some addition to the banks’ invest­
ments and the total of their loans and investments was
about $1,000,000,000 larger than at the same period o f
last year.
W ithdrawals o f funds from New Y ork were reflected
in an increase between the middle of A p ril and the m id­
dle o f M ay in borrowings by member banks from the
Federal Reserve Bank of New Y ork while borrow ings at
most o f the other Reserve Banks declined. Open market
holdings o f the Reserve Banks remained fairly constant
during the period and there was little change in the
total volume of Reserve Bank credit outstanding.
Money rates late in A p ril reached the lowest level fo r
a year, but in M ay conditions in the money market be­
came somewhat firmer.

Reserve Bank Credit: Monthly averages of daily figures for 12
Federal Reserve Banks. Latest figures are averages of
first 21 days in May.
April 1, 1926
Time Money—90 day
Prime Commercial Paper..........
Bills—90 day
Treasury Certificates:
4-5 months.............................
7-8 months




May 27, 1926

4
4

4
4

3%

3 Vs

3%

3.19
3.55

2.99
3.19

3 .1 7

3.22

Slightly firmer money conditions in New Y ork may be
accounted fo r largely by a continued commercial demand
for credit and currency and a considerable transfer o f
funds from New Y ork to other centers.
The increase in the amount o f currency required fo r
circulation was shown by an excess of payments of cu r­
rency over receipts at the Reserve Bank o f about 35 m il­
lion dollars. The changes in loans on stocks and bonds,
commercial loans, and investments o f New Y ork City
banks and reporting member banks outside New Y ork
City since the first o f 1925, are shown in the accom pany­
ing diagram.

1

cWECUt At.5
cM t or
RA

I VSM T '
NETE S
N

M on ey M ark et
The movement in A p ril toward easier money condi­
tions was not continued during May and rates remained
firm at about the levels reached in the latter part o f
A pril, or were slightly higher. The follow ing table
shows the changes in money rates between A p ril 1, A p ril
27, and May 27.

April 27, 1926

JS

.•• **
•—*l
LASO
ON N
SCR I S
EUI E
T
NWY R 1 Y
E O K IT

O T IO N
U '• C vc |

Loans and Investments o f Reporting Member Banks in
New Y ork City and Elsewhere.

3

FEDERAL RESERVE AGENT A T N EW Y O R K

Between A p ril 21 and M ay 19 there was a net move­
ment of funds from New Y ork to the interior o f about
50 million dollars, which may be explained partly by the
demand for funds in different parts o f the country fo r
business activity and partly by the prevalence in New
Y ork of lower money rates than in previous weeks.

L oans

to

B rok ers

and

M L N
IL IO S
O DLAS
F OL R

D e a lers

Reports o f loans to brokers and dealers by New Y ork
City banks fo r their own account and fo r the account of
their correspondents indicated that such loans have fo r
some weeks been relatively stable at the levels reached in
A pril. The figures reported fo r the third week in May
were slightly lower than the lowest reached in A pril.
Since the first o f the year loans by New Y ork banks fo r
their own account have decreased 440 m illion dollars and
loans placed fo r correspondents and others have de­
creased 290 million dollars, a total decline o f 730 million
dollars since the first o f the year. The movement o f
these loans is shown in the accom panying diagram, and
the figures fo r the latest available date, May 19, 1926,
are as follow s:
Total loans for own account....................................... $ 894,171,000
Total loans for out-of-town correspondents..............
963,751,000
Total loans for others....................................................
550,773,000

1926

Loans to Brokers and Dealers in Securities Placed by
New York City Reporting Member Banks.

$2,408,695,000

B il l M a rk et
A ccom panying the somewhat firmer money conditions
o f M ay the distribution o f bills was limited and bills
began to accumulate in dealers’ portfolios, until by the
middle o f the month these portfolios were larger than
100 million dollars and probably larger than they had
ever been before. As a reflection of these conditions
dealers on May 18 increased by Ys their rates fo r all
maturities above 30 days. This change brought the offer­
ing rate fo r 90 day bills from 3 ^ to 3y±. On M ay 20
the Federal Reserve Bank o f New Y ork reduced slightly
its buying rates fo r bills so as to purchase 1— 30 day
maturities at 3 ^ ; 31— 90 day maturities at 3 1 4 ; 4 month
maturities at 3 % ; and 5 to 6 months at 3 % . The lower
buying rates o f the Reserve Bank enabled member banks
to buy bills more freely, with the knowledge that i f nec­
essary, they could sell them to the Reserve Bank without
sustaining a loss. On May 26 the dealers raised their
rates fo r unendorsed 90 day bills a further % . Follow ­
ing the increase in the market rate and the lowering of
the buying rate of the Reserve Bank, there was a larger
distribution and dealers’ portfolios were reduced.

C o m m ercial P a pe r
The prevailing rate on commercial paper during May
continued to be 4 per cent, although there were some
offerings o f special names at 3% . The market fo r paper
in New Y ork City continued quiet and the most active
buying was by out-of-town accounts, particularly in the
Middle West. The volume of commercial paper coming
into the market continued small and hardly sufficient to
meet the demand fully. The amount o f commercial
paper outstanding at the end o f A p ril was 663 million
dollars, compared with 668 million dollars at the end
o f March.




T h e F ren ch D e b t A greem en t
A n agreement fo r the settlement o f F ra n ce ’s debt to
this country, was reached by Ambassador Berenger and
the United States W orld W ar Foreign Debt Commission
on A p ril 29, 1926, subject to ratification by the respec­
tive governments. A ccord in g to this agreement, France
would pay over a period o f 62 years $6,848,000,000, rep­
resenting principal and accrued interest of $4,025,000,000
with future interest payments amounting to $2,823,000,000. No interest is to be paid until 1930, and there­
after interest charges begin at 1 per cent per annum
and progress to a maximum o f 3 % per cent fo r the
years 1965 to 1987. A nnual payments covering both
principal and interest commence at $30,000,000 in 1926
and increase gradually until the seventeenth year, when
the paym ent reaches $125,000,000 and continues at that
amount fo r the balance o f the 62 years, except in the
last year when the amount rem aining is slightly smaller.
W hen this agreement shall have been ratified the fu n d ­
ing of the m ajor part o f foreign debts to the United
States Government will be completed. There will then
remain to be funded only $244,000,000 out o f a total
original war debt o f $10,100,000,000. The debts remain­
ing unfunded comprise obligations of Russia, Greece,
Armenia, and also that of Austria, settlement of which
has been deferred by Congress until 1943.
I f the agreement with France is ratified in its present
form the principal and accrued interest o f the debts
funded by 13 countries will total $11,522,354,000. Under
the terms of the agreements with the different nations,
payments o f $22,143,539,993 are to be received by the
United States over a period of 62 years in settlement of
principal and interest charges. The “ present valu e” of
these payments on a 4 % per cent interest basis amounts
to a total of $6,889,936,239 at dates o f settlement. The

M ONTHLY REVIEW, JUNE 1, 1926

follow ing table gives the figures fo r each o f the debt
fun d in g arrangements, assuming that the proposed
agreement with France is ratified.

Principal of
debt as
funded
Great Britain..
France.............
Italy................
Belgium..........
Poland.............
Czechoslovakia
Jugoslavia.......
Rumania.........
Esthonia..........
Finland............
Lithuania........
Latvia..............
Hungary..........
Tota*............

Tota* amount
of principal
and interest
to be received

Present value
of payments
on a
4 per cent
annual basis

Ratio of
present
value
to debt
as funded
(per cent)

3,792,528,700
2,008,122,624
538,136,500
226,040,300
147,208,100
92,166,200
20,236,715
35.342.500
11.403.500
7.420.200
4,971,100
4.761.200
1,598,600

82
50
26
54
82
80
32
79
82
82
82
82
82

$11,522,354,000 $22,143,539,993 $ 6,889,936,239

60

$ 4,600,000,000 $11,105, 965,000
6,847, 674,104
4.025.000.000
2.042.000.000
2,407,,677,500
417.780.000
727,,830,500
178.560.000
435,,687,550
312,,811,434
115,000,000
62.850.000
95,,177,635
122,506,260
44.590.000
33,,331,140
13.830.000
9,000,000
21,,695,055
6.030.000
14,,531,940
13 ,958,635
5.775.000
4,,693,240
1.939.000

F o r e ig n E x c h a n g e
The outstanding events in the foreign exchange mar­
ket during May were the advance of sterling above par
on M ay 13 fo r the first time since 1914, the decline of
Belgian and French francs to 2.74 cents, the lowest
values ever recorded, and the break in the lira, which
had been fairly stable at slightly over 4 cents, to 3.35
cents. A quick recovery occurred in the lira after the
middle o f May, and French and Belgian francs regained
a part of their losses late in the month.
Other European exchanges showed little change dur­
ing the month. The premium on the Canadian dollar
was reduced below the gold export point. The rupee
was firmer, being quoted at 36% cents during the greater
part o f the month. The yen ranged from 4 6 % cents to
4 7 % cents, and Chinese exchange showed little change
follow ing a partial recovery from the low points reached
in the third week of A pril. Brazilian rates advanced
steadily, reaching 15 cents toward the close o f the month,
while Argentine quotations, after rising to 40.37 cents on
the 11th, declined to 40.11 cents.

S e c u r it y M a r k e t s
Stock price movements continued irregular in May
and trading was relatively quiet. Averages o f represen­
tative industrial stocks remained above the low point of
the year in March, but below the levels o f late A pril.
Railroad stock averages held within a few points o f the
high levels o f January.
Corporation bond averages continued to advance and
reached the highest levels since early in 1917. The
strength in high grade bonds is attributed at least in
part to buying by banks and other financial institutions.
Total investment holdings o f weekly reporting member
banks in all districts have increased about $250,000,000
since the first of the year, largely due to increased hold­
ings o f securities other than United States Government
issues.
Liberty and Treasury bonds receded slightly in M ay
from the high points o f the year. Prices o f French,
Belgian, and Italian bonds declined, accom panying weak­
ness in the exchange rates, Polish bonds declined over 5
points due to the overthrow o f the W itos government,
and British bonds were tem porarily unsettled by the
strike.
The follow ing diagram shows the par value o f all
bonds sold on the New Y ork Stock Exchange in each
month since the beginning o f 1922. Trading in Govern­
ment bonds has diminished greatly, due to the retirement
o f one issue and reduction in the floating supply of
others. The volume o f trading in foreign bonds has been
well sustained, and sales of corporation bonds have ac­
counted fo r a steadily increasing proportion o f the total.
A s the diagram shows, the total volume o f trading de­
clined sharply in the first eight months o f 1925, but has
since then increased almost continuously. The sales on
the exchange, shown below, are only a limited part of
total transactions in bonds.

CENTS

’'• fa
’U

’a A ' i
*
19ZZ

l

1923

19£4

l

1925

1926

Par Value of Bonds Sold on New York Stock Exchange in
Each Month Since 1921.

York.




Last Quotations in Each Week, 1924 to 1926.

New security issues in the first four months o f 1926
amounted to $2,626,000,000, compared with $2,495,000,000 in the corresponding period o f 1925, but the volume

FEDERAL RESERVE AGENT A T N EW Y O R K

o f new financing in M ay was small. State and muni­
cipal bond issues in M ay were the heaviest since Febru­
ary, but all other groups were smaller than in A pril.
Public utility financing was the principal element in
corporation offerings. The flotation of the m ajor part of
$35,000,000 of United States of Brazil bonds in this mar­
ket brought the total of foreign issues since the first o f
the year slightly above that o f the corresponding period
last year.
G o ld M o v e m e n t
A s a result of the reversal of the gold movement be­
tween this country and Canada, there was a net export
o f $4,800,000 of gold from the United States in A pril,
the^ first export balance since last November. Gold trans­
actions with countries other than Canada were small.
Total exports amounted to $17,900,000, and imports to
$13,100,000, or little more than the Canadian movement.
W ith the shipment of an additional $8,000,000 to
Canada during the first week in May, the premium on
Canadian exchange was reduced below the shipping
point and the outflow to that country ceased. Gold
movements through the P ort o f New Y ork in the first
Excess of
1926

Imports

January...........
February.........
March..............
April................
May*...............

Exports

Imports

$19,351,202
25,415,655
43,412,576
13,125,633
506,000

$3,086,870
3,851,374
4,224,564
17,883,865
8,890,000

$16,264,332
21,564,281
39,188,012
$4,758,232
8,384,000

*=Port of New York and Canadian shipments only.

150
to o

CHIEFLY RAW COTTON
& TOBACCO

A
1\

50 v A \ r

10
0

25 days o f May were unimportant, total exports amount­
ing to $890,000, and imports to approxim ately $500,000.
The movement o f gold since the first o f the year is
summarized in the foregoing ta b le .
F o r e ig n T r a d e
A n unfavorable trade balance occurred in A p ril fo r
the fourth consecutive month, but the excess o f imports
was reduced from $70,000,000 in March to $10,000,000
in A pril. A p ril exports o f merchandise, valued at
$388,000,000, were $14,000,000 larger than in March, but
$10,000,000 smaller than in A p ril 1925. Imports, valued
at $398,000,000, were $45,000,000 smaller than in March,
but $52,000,000 above those o f a year ago.
The diagrams below show the tendencies in our foreign
trade during recent years. They indicate that the recent
high level of imports has been due to heavy importations
o f raw materials fo r our industries, while receipts o f fin­
ished manufactures and other groups of commodities
have shown only a very gradual increase, accom panying
the expansion in the total volume o f trade. E xports o f
finished manufactures greatly exceed such imports, and
have increased substantially during the past fou r years,
especially shipments o f automobiles, and gasoline and
other petroleum products.
Cotton exports, which constitute the largest item in
exports o f crude materials, have been generally much
smaller than in the years just preceding the war, but
have tended to expand until the past few months. It is
this recent decline in cotton exports, accom panying un­
settled industrial conditions in Europe, together with
large raw material imports fo r our industries, which has
led to the unfavorable trade balance o f recent months.
IM P O R T S

EXPORTS

M IL L IO N S
O F DOLLARS

200

Exports

5

C H IE F L Y

.

V

/
/
/

........ .

V
\
V

/
/
r

C H IE F L Y R AW S IL K
S' KUBB £ K

i-

.......... A
v
l\
X
/ >i
\
/
V r~ V
xs

200
V
-------------- y

CRUDE
------------- h
MATERIALS—>

/

^

--------- z

—

j i - r

J




10
5
10
0

V

50

G R A IN S

50

ML N
IL IO S
O D LA S
F OL R

CRUDE
k— FOODSTUFFS-*!

C H IE F L Y

S U&AFL

M
ANUFACTURED
/

... . M

\

*

▼

v

SEMIf-MANUFACTURES-*

Monthly Exports and Imports of Merchandise of the United States by Principal Groups, 1922 to 1926.

M O N TH LY REVIEW, JUNE 1, 1926
(Computed trend of past years=100 per cent)

P r o d u c tio n

There were substantial reductions in A p ril in textile
m ill activity, but production in other leading industries
showed little more than the usual seasonal variations
com pared with March, and was larger than a year ago
in a m ajority o f cases.
P ig iron production reached the highest daily rate
since 1923, but some curtailment has been reported in
May. Steel ingot production showed less than the usual
seasonal decline from March to A pril, and a subsequent
reduction in output has proceeded more slowly than in
either o f the two previous years. Autom obile produc­
tion failed to show the usual increase over March, but
was maintained at a high level in A pril.
A p ril indexes o f production, in which allowance is
made fo r the usual seasonal variations and year-to-year
growth, are shown below with comparable figures fo r
previous months and a year ago.

1925

1926

Apr.
Pig iron.....................................
Steel ingots..............................
Bituminous coal....................
Copper, U. S. mines............
Tin deliveries.........................
Zinc............................................
Petroleum................................
Gas and fuel o i l .. ................
Cotton consumption...........
Woolen mill a c tiv ity *.. . .
Cem ent.....................................
Lumber.....................................
Leather, sole...........................
Silk consumption*................

Consumers' Goods
Cattle slaughtered................
Calves slaughtered..............
Sheep slaughtered................
Hogs slaughtered..................
Sugar meltings, U. S. ports
W heat flour.............................
Cigars........................................
Cigarettes................................
Tobacco, m anufactured.. .
Gasoline....................................
T ires...........................................
Newsprint................................
Paper, to ta l.............................
Boots and shoes.....................
Anthracite coal......................
Automobile, a ll......................
Automobile, passenger
Automobile, truck................

* = Seasonal variation not allowed for

Feb.

Mar.

Apr.

112
100

108

114

117
113
109
106
126

92
104

122
96
122
111
101
89
129
113
80

121
112

106
115
92
113
90
95
82
104
129
128
118
106

101
98
134
139
115

112

114
108

100

106
113
104

102
84
108

112
102

106
103
98
109
105
103
83
116

110
69
121

110
69
111

106
116
114
76
116
90
94
74
109
136
129
127

116
109
127
93

92
30**
132
133
128

93
105
131r
137
103r

100

100
94
110
83
111
137
117
130

100

**= Strike p=Preliminary

Apr.

Feb.

Mar.

Apr.

106
108
95
111
146
97

106
100
85
126
37
96

103
102
87
133
51
109

103
111
94p
128p

93
93
109
117
116
97
95

100
96
121
109
113
103
97

95
89
110
116
109
99
98

89
92
109
112
107
100
96

109
113
99

113
124
106

113
140
106

115
130
105

97
100

104
118

105
128

105
124

141
103
106
99
122

202
100
110
101
96

295
101
113
101
111

171
101

107
169

124
144

115
147

112
147

General price level....................................

183

187

186

186

Primary Distribution

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

Department store sales, 2nd Dist...........
Chain store sales.......................................
Mail order sales........................................
Life insurance paid for.............................
Real estate transfers................................
Magazine advertising...............................
Newspaper advertising....................... ..
General Business Activity

Bank debits, outside of New York City.
Bank debits, New York City..................
_
Bank debits, 2nd Dist. excl. N. Y. C_
Velocity of bank deposits, outside of New
York City..............................................
Velocity of bank deposits, New York City
Shares sold on New York Stock ExPostal receipts...........................................
Electric Power...........................................
Employment, New York State factories.
Business failures.......................................
New corporations formed in New York

*=Seasonal variations not allowed for

ioo

121

p=Preliminary

101
95
79p

112
67
105
116
93
113
92
93
497
105
81
107
129

90p
108
130
135

110

r=Revised

I n d e x e s o f B u s in e s s A c t i v i t y
General business activity in A p ril appears to have
maintained the high level of the first three months of
the year. Bank debits in 140 centers outside o f New
Y ork City were 9 per cent larger than a year ago. A
continued large prim ary distribution of goods was indi­
cated by railway car loadings, which showed increases
over last year in most classes of freight. Mail order
sales continued larger than a year ago, but A p ril sales
at department stores declined slightly below last y e a r’s
level.
In the follow ing indexes o f business activity, allowance
has been made fo r the usual year-to-year increase, sea­
sonal variations, and where necessary, for price changes.




1926

Building permits.......................................

(Computed trend of past years=100 per cent)

Producers' Goods

1925

E m p lo y m e n t
A recession o f 1 per cent in factory employment from
March to A pril represented chiefly the usual decrease in
seasonal industries, but there were indications o f re­
duced activity, due to other than seasonal causes, in a
few industries that have been operating at high levels in
recent months.
W orking forces in the steel mills o f New Y ork State,
which in March were the largest in recent years, showed
a moderate reduction in A pril, and a decrease occurred
also in railway equipment plants. Autom obile factories
maintained a high level o f employment, but showed no
such increase as in A p ril o f last year. Further declines
occurred in machinery and electrical apparatus plants.
A t least small reductions were reported in all branches
o f textiles, and substantial seasonal reductions occurred
in clothing.
In May a further gradual decline in factory activity
is reported, but road construction, building activity, and
farm work offered a considerably greater volume o f em­
ployment, so that an actual shortage o f high grade un­
skilled labor and some types o f skilled mechanics is
reported by the State Em ploym ent Service.
B u ild in g
The volume of prospective building in A p ril continued
near the highest levels ever reached, but the rate of in­
crease over a year previous appears to be diminishing.
Building and engineering contracts awarded in 37 states
were reported by the F . W . Dodge Corporation as 5 per
cent smaller than in March, and less than 1 per cent
larger than in A p ril o f last year. The New Y ork State

FEDERAL RESERVE AG EN T AT NEW Y O R K

and Northern New Jersey district showed a 30 per cent
gain over last year, but the total fo r all other reporting
districts was 8 per cent smaller, notwithstanding a large
increase in the southeastern states.
Permits issued during A p ril in the 484 cities reporting
to the S. W . Straus Company were 8 per cent less than
a year ago. The New Y ork City total was only slightly
below the large total of A p ril 1925, but substantial
recessions were reported in Chicago, Cleveland, Los A n ­
geles, Philadelphia, and St. Louis. The principal in­
creases, with a few exceptions, continued to be reported
from Florida and other southern states.
Employm ent reports from New Y ork State indicate
a considerably higher level o f activity in the production
o f building materials than a year ago, and lumber pro­
duction also was larger, according to reports from the
National Lumber M anufacturers Association. Stocks of
lumber and cement were larger than last year, however,
and material costs declined slightly further. Due to the
high level o f wages, building costs continued at least as
high as a year ago.
W h o le s a le T r a d e
A p ril wholesale trade in this district averaged nearly
11 per cent smaller than a year previous, the largest
decrease reported since the summer of 1924. This de­
crease was due partly to smaller sales of textiles and
partly to the slow spring trade in clothing due to cold
weather.
Sales of diamonds, machine tools, stationery, and gro­
ceries continued larger than last year, and paper and
drug sales showed the largest year-to-year increase for
any month in more than a year.
Stocks of jew elry and diamonds and cotton goods re­
mained smaller than a year ago, while stocks of gro­
ceries and shoes showed the largest reductions in more
than a year. Silk stocks remained fa r heavier than last
year, and hardware stocks continued slightly larger.
Collections in most lines com pared less favorably than
in M arch with those o f a year ago. Accounts outstand­
ing at the end of A p ril averaged slightly smaller than
last year, due largely to the dull business of recent
months in the w om en’s clothing trade.
P e rc e n ta ge
Change
A p r il 1926
fro m
M a rc h 1926

C o m m o d ity

Net

G r o c e r i e s ....................
M e n ’s c l o t h i n g .........
W o m e n ’s d r e s s e s .
W o m e n ’s c o a t s a n d s u i t s
C o t to n g o o d s-J o b b e rs..
C o t to n g o o d s -C o m m is s i o n ..............................
S i l k g o o d s .......................
S h o e s ...............................
D r u g s ..............................
H a r d w a r e .......................
M a c h i n e t o o l s ...............
S t a t i o n e r y ......................
P a p e r ..............................
D i a m o n d s .......................
J e w e l r y ...........................
W e ig h t e d A v e r a g e . .

Stock
end of
m o n th

— 8.8

— 1 3 .2

—
—
—
—

3 5 .2
2 1 .5
5 7 .1
1 1 .4

—
—
—
—
+
—
—
—
—
—

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

-21.6




+ 0.1
— 1.2
—
—

6 .4
4 .6

4 .4

Department store sales in this district during A p ril
were slightly smaller than a year previous fo r the first
time since the middle o f 1924. This decrease may be
partly accounted fo r by the earlier Easter this year and
unseasonably cold weather. A pparel store sales also
showed a slight decrease com pared with last year. This
ban k ’s index o f department store sales in which allow­
ance is made fo r seasonal variations, price changes, and
the date of Easter, as well as year-to-year growth, de­
clined to 89 per cent o f normal, com pared with 95 per
cent in March and 93 per cent a year ago.
Average stocks o f merchandise fo r A p ril and fo r the
first fou r months o f this year have been larger relative
to those o f a year ago than sales, and consequently the
rate o f turnover, both fo r department and apparel stores,
has been smaller than last year.
Collections on regular charge accounts showed about
the same increase over last year as in March, but out­
standing accounts declined to approximately the level
o f a year ago. Instalment accounts were larger than
last year in all reporting cities except Buffalo.
P e rc e n ta ge C h a n g e
A p r il 192 6 fro m A p r il 192 5

L o c a lit y

rNet
[ S a le s

Stock
o n fH a n d
e n d fo f j
m o n th
+
—
—
—
+
+
■ —
*

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

3 .0

B r i d g e p o r t .........................................
E l s e w h e r e ...........................................
N o r t h e r n N e w Y o r k S t a t e ........
C e n t r a l N e w Y o r k S t a t e ...........
S o u t h e r n N e w Y o r k S t a t e ........
H u d s o n R i v e r V a l l e y D i s t .........
C a p i t a l D i s t r i c t ............................
W e s t c h e s t e r D i s t r i c t ...................

—
0 .2
—
7 .5
—
2 .1
—
5 .1
+
2 .9
+
8 .3
+
0 .4
— 2 1 .2
—
1 .0
+ "0 .1
+
6 .2
— ’ 1 .8
‘
+
7 .7

A l l d e p a r t m e n t s t o r e s .....................

—

0 .4

+

A p p a r e l s t o r e s ..................................
M a i l o r d e r h o u s e s ...........................

—
+

0 .6
3 .9

C o lle c ­
t io n s *

A cco u n ts
R e c e iv ­
a b le *

+
7 .3
+
0 .4
+ 1 5 .4
— 1 4 .4
+
3 .8

—
3 .2
—
2 .1
+ 1 8 .6
—
0 .9
+
5 .2

+ 1 1 .7

B u f f a l o ...............................................
R o c h e s t e r . .........................................

+ i2 ii

+

7 .0

+

+

0 .6

6 .4

v

* = E x c lu s iv e o f in sta lm e n t a c c o u n ts

Comparisons o f A p ril sales and stocks with those o f
a year ago are shown by departments in the follow ing
table.

P e rce n tage C h a n g e
A p ril 1926 fro m A p r il 1925

Net
S a le s

+ 2.6

Stock
e n d of
m on th
—

7 .7

— 1 4 .7
— 3 0 .4
— 3 6 .4

—12.6
—
—
—
+

1 9 .1
1 4 .5
1 8 .8
1 3 .0

— 1.6 — 0.6
+
7 .3
+ 6.6
' +

D e p a r tm e n t S to re T r a d e

+ 1 3 .3
+
9 .2
—
6 .3

—10.6

C o lle c ­
t io n s
+ 1 4 .8
+
3 .2

—12.1
—22.8
—

9 .8

+ 5 7 .8
— 1 4 .3
—
4 .8
+
1 .9

—

9 .5

—
2 .3
+
3 .7
+ 1 3 .0
—
8 .5

+ ’9!5
+

8.2

5 .8

— i4.*6
— 0.2

. N e t S a le s
P e rc e n ta g e C h a n g e
A p r il 1926
fro m
A p r il 1925

A c c t ’s
R e c e iv ­
a b le
+

3 .8

+ 8.6
—
9 .3
— 2 4 .3
—
9 .4

— 2.0
—
+

6 .7
5 .7

— 0.1
+28! 9
—
2 .5
+ 1 9 .'3

— 1 .2

L i n e n s a n d h a n d k e r c h i e f s .........................
B o o k s a n d s t a t i o n e r y .................................
F u r n i t u r e .......................................................
T o i l e t a r t i c l e s a n d d r u g s ...........................
T o y s a n d s p o r t i n g g o o d s ..........................
L u g g a g e a n d o t h e r l e a t h e r g o o d s ...........
C o t t o n g o o d s ...............................................
H o m e f u r n i s h i n g s ........................................
H o s i e r y ..........................................................
S h o e s ..............................................................
W o m e n ’s r e a d y - t o - w e a r a c c e s s o r i e s . . . .
S i l k s a n d v e l v e t s .........................................
M e n ’s f u r n i s h i n g s .......................................
S i l v e r w a r e a n d j e w e l r y ..............................
M e n ’s a n d b o y s ’ w e a r ................................
W o m e n ’s a n d M i s s e s ’ r e a d y - t o - w e a r . . . .
M u s i c a l i n s t r u m e n t s a n d r a d i o ...............
W o o l e n g o o d s ...............................................
M i s c e l l a n e o u s ..............................................

+
+
+
+
+
+
+
+
+
+
+
—
—
—
—
—
—
—
i

1
1
1
1
1

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

Sto ck on H a n d
P e rce n tage C h a n g e
A p r il 30, 1 92 6
fro m
A p r il 30, 192 5
—
+
—
+
+
+
+
+
+
+
—
—
—
+
+
—
—
—
—

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

B u s in e s s P r o fits

R eports fo r the first quarter from 108 industrial and
mercantile corporations show net earnings nearly 30 per
cent larger than last year, and substantially larger than
in the corresponding period in any other recent year.
A ll o f the principal groups of corporations, except
leather companies, showed increases over last year.
Earnings of automobile producers were unusually large.
The follow ing table summarizes the available reports
of first quarter earnings. Earnings are shown after
expenses and interest charges, but before dividends.
(Net profits in thousands of dollars)
1923
Group

No. of
Corpo­
rations

Motor and motor accessories.. . .
Oil.................................................
Steel...............................................
Food and food products..............
Machine and machine mfg..........
Metal and mining........................
Leather.........................................
Chemical.......................................
Miscellaneous...............................

15
14
13
15
9
14
4
5
19

1924

1925

1926

First
First
First
First
Quarter Quarter Quarter Quarter
33,650
29,238
20,206
28,900
27,342
45,491
11,358
11,121
2,894
3,284
8,308
7,730
1,443 Def. 119
2,933
2,324
7,789
6,473

32,523
23,173
33,334
11,108
3,816
10,591
942
2,898
7,532

53,139
23,729
41,502
14,505
4,198
10,800
190
3,878
10,116
162,057

Total 9 groups.........................

108

115,923

134,442

125,917

Telephone.....................................
Other public utilities...................

70
32

36,168
14,087

34,709
13,999

44,325
15,375

Total public utilities................

102

50,255

48,708

59,700

68,281

Class I Railroads.........................

188

184,528

202,713

204,606

223,559

51,142*
17,139

* = Partly estimated

W a g e s a n d P r ic e s in t h e U n i t e d S ta te s a n d E n g la n d
In view of recent labor difficulties in England, the
comparisons of wages and prices in the United States

and in England shown in the accom panying diagrams
are of interest. They indicate the changes in the pur­
chasing power o f wages in the two countries in the past
7 years.
In a large number o f the industries of Great B ritain
wages have been adjusted in recent years in accordance
with changes in the cost o f living, and in other industries
in accordance with the selling price o f the products o f
the industries. This arrangement, which applies to a
considerable proportion of all industrial wage earners,
was made prim arily to prevent a reduction of living
standards below the pre-war level at times o f depressed
industrial conditions. P artly as a consequence o f this
arrangement, wages and the cost o f living in England
have moved closely together and the purchasing power
o f wages paid during the last three years has been ap­
proxim ately the same as before the war.
In the United States, wages declined at approxim ately
the same rate as the cost o f living from the latter part
of 1920 until early in 1922, but fo r more than a year
thereafter, with the revival o f industrial activity and
with the labor supply lim ited by curtailed immigration,
wages were advanced rapidly until by the m iddle o f
1923 they were close to the highest levels o f 1920. In
the subsequent three years this high level o f wages has
been maintained and the cost o f living has remained
about stead y; so that with fu ll employment the purchas­
ing power o f wage earners is now far greater than in
pre-war years. The fact that corporation profits have
reached unusually high levels, despite the wide spread
between wages and wholesale prices, would seem to indi­
cate that high wage costs have been effectually offset by
increased per capita output.

PER
CENT

Wages, Prices, and Cost of Living in England (1913 averages
IOO per cent).




Wages, Prices, and Cost of Living in the United States (1913
average = IOO per cent).