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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 PERCENT 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 ccW M ERCtAUtoArt.5 INVESTM ENTS ' 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 LOANSON SECURITIES NEWYORK 1ITY OUT'•IOC Nvc | 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 MILLIONS OFDOLLARS 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 19ZZ ’'•’U fa ’a* A ' i 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 January........... February......... March.............. April................ May*............... Imports 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 100 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 150 100 V 50 G R A IN S 50 MILLIONS OFDOLLARS CRUDE k— FOODSTUFFS-*! C H IE F L Y S U&AFL MANUFACTURED / ... . 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. (Computed trend of past years=100 per cent) 1925 Producers' Goods 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 1926 Apr. 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 1926 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 Building permits....................................... 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. 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 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 . . Net 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 + 1 1 .7 B u f f a l o ............................................... R o c h e s t e r . ......................................... 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 + 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).
@FedFRASER