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MONTHLY REVIEW o f C r e d it a n d S e c o n d Federal Reserve Agent B u s in e s s F e d e r a l I N D U S T R IA L output declined in A p ril reflecting reduced activity both in mines and in factories. Distribution of commodities by railroads and retail trade increased, and the level of prices showed a further slight decline. PERCENT Index Numbers of Production of Manufactures and Minerals, Adjusted for Seasonal Variations. (1923-25 averager:: 100 per cent). June 1, 1927 On the basis o f conditions on May 1, the Department o f Agriculture forecasts a winter wheat crop of 594,000,000 bushels, or about 5 per cent less than in 1926. Con tinued wet cold weather over much o f the corn belt and also in the spring wheat area has retarded the planting of spring crops. T r o d u c t io n Decreased output of industry in A pril, as compared with March, was due chiefly to the coal m iners’ strike, which caused a large decline in the production o f bi tuminous coal. A m ong m anufacturing industries, which as a whole were somewhat less active in A p ril than during the previous month when allowance is made fo r usual seasonal changes, reductions were reported in the iron and steel and textile industries, as well as in meat packing and in the production of building ma terials. The m anufacture of motor cars, though it showed the usual seasonal increase in A pril, continued at a lower level than a year ago. Petroleum production continued in record volume, notwithstanding large stocks and declining prices. Value of building contracts awarded declined slightly in A p ril from the record high figure in March, but was larger than last year. The decline in building between March and A p ril reflected reduced activity in the construction o f commercial, in dustrial, and educational buildings, while contracts for residential and public buildings increased. D is t r ic t Federal Reserve Bank, New York B u s in e s s C o n d i t io n s in t h e U n i t e d S t a t e s P R e s e r v e C o n d itio n s rade Commodity distribution at retail was larger in A pril than at the same season o f any previous year, owing in part to the lateness o f the Easter holiday. D epart ment store sales were approximately 7 per cent larger than in A p ril o f last year, and sales o f mail order houses and chain stores were also in large volume. Wholesale trade showed about the usual decrease be tween March and A p ril and continued smaller than in the corresponding month o f last year. Inventories of merchandise carried by department stores were in about the same volume at the end of A p ril as in March, while stocks o f wholesale firms were smaller. Railroad car loadings were larger in A p ril than is usual at that season o f the year, reflecting chiefly large shipments o f iron ore, coke, grain, and grain products, but also increased movement o f miscellaneous freight and o f merchandise in less-than-carload-lots. Coal ship ments were 27 per cent smaller in A p ril than in the preceding month. PERCENT Index of Sales of 359 Department Stores, Adjusted for Seasonal Variations and Unadjusted. (1919=100 per cent). MONTHLY REVIEW, JUNE 1, 1927 42 TER CENT. "B ILLIO N S o f DOLLARS W holesa le P rice Indexes o f U nited S tates B ureau o f L a b or S ta tistics. (1 9 1 3 a v e r a g e r r 100 p er c e n t ). P rices In A p ril there was a further slight recession in the general level of wholesale prices, as measured by the index of the Bureau of Labor Statistics, but in the first three weeks of May price conditions were firmer. The decline in A p ril reflected chiefly a decrease in the pricco f petroleum, lumber, and several of the non-ferrous metals. There was little change in the level of agricul tural prices which have been fairly constant since the beginning of the year. D uring the first three weeks of M ay prices o f grain, cotton, iron and steel, petroleum, lumber, and hides advanced, while those of livestock, coke, and non-ferrous metal declined. B a n k C r e d it Volume of credit o f weekly reporting member banks, as measured by their total loans and investments, in creased by more than $300,000,000 during the month ended May 18, and was on that date at the highest level on record. This growth represented for the most part an increase in the banks’ holdings of investments and in the volume of their loans on stocks and bonds, while commercial loans showed relatively little change. A t the Reserve Banks there was a decrease during the month in total volume of credit outstanding, owing to the receipt of a considerable amount of gold from abroad, in addition to the purchase abroad by these banks of about $60,000,000 of gold that is now held earmarked with a foreign correspondent. The banks’ holdings of acceptances and of Government securities declined by about $85,000,000, while discounts for mem ber banks increased by about $45,000,000, apparently in response to the increased reserve requirements arising from the growth in the member bank deposits. Conditions in the money market were comparatively stable during the first three weeks of May and there were no changes in rates quoted on prime commercial paper and on acceptances. M o n th ly A v e ra g e s o f W e e k ly F igu res for M em ber B anks in 101 L ea d in g C ities. (L a te s t F ig u re s are A v e ra g e s fo r T h ree W e e k ly R e p o rt D ates in M a y ). M o n ey M a rk et Loans and investments o f commercial banks increased in May to the highest level o f the year. The largest element in this increase was an increase in investments o f these banks during the fou r weeks ended May 18 to new high levels. Nearly 90 millions o f the 165 million dollar increase for all reporting banks occurred in this district. Loans to brokers and dealers in securities placed by New Y ork City member banks increased over 50 millions to the highest level since the beginning o f M arch 1926, accom panying the further rise in security prices. Total loans secured by stocks and bonds showed a correspond ing increase, and for all reporting banks were 120 millions higher on May 18 than a month previous and 360 millions higher than a year ago, and in the New Y ork district were 60 millions higher than a month ago and 105 millions higher than a year ago. Commercial loans also held at a high level during the month, both in this district and the country as a whole. The accom panying rise in deposits resulted in an increase in the required reserves o f member banks, which is shown in the diagram on the follow ing page fo r 22 principal New Y ork City banks. Reserve requirements of these banks have increased 35 m illion dollars from the low point of the year, and are 25 millions higher than a year ago whereas three months ago they were lower than last year. This increase in reserve requirements has been an important factor in moderately firm money conditions in recent weeks. A renewed inflow o f gold occurred in May, but was offset by reductions in the bill and security holdings o f the Federal Reserve Banks. Other influences on the market included the purchase by the Reserve Banks of nearly $60,000,000 of gold abroad and a sale o f gold here to foreign account. As a consequence of these different factors money rates remained at approx imately the same levels as in A pril, and were higher than in the corresponding month o f any year since 1923. The 43 FEDERAL RESERVE AGENT AT NEW Y O R K MILLIONS OFDOLLARS PER CENT 6 V V / vL : A 1927 19; 16 o LL LO»\NRA:~E We iklyAi ercLge Required Reserves of 22 Leading New York City Banks. M oney Rates at New York Call m on ey............................................... Time money— 90 d a y ............................ Prime commercial paper....................... Bills— 90 day unendorsed..................... Treasury certificates and notes Maturing June 15.............. Maturing September 15... Federal Reserve Bank of New Y ork rediscount ra te.................................... Federal Reserve Bank of New York— buying rate for 90 day bills........... M ay 28 1926 April 28 1927 *4 3M-4 *4 4% 4 -4 l/i 3% 4 % -4 H 4 -4 H 35 A 2.70 3.14 3.46 3.51 3.15 3.23 314 3H 4 4 3% 3*4 4 M ay 27 1927 *±y2 * = Prevailing rate for preceding week. follow ing table compares rates prevailing near the end of May with those of a month ago and a year ago. Borrowing from the Federal Reserve Bank in May was larger than in May last year as is shown in the ac companying diagram. C o m m e r c ia l P aper M a r k et The commercial paper market was rather qniet during the month due principally to a lack of demand from interior institutions. Notwithstanding this condition, rates on prime names were generally steady at 4-4*4 per cent. The demand for new loans in the open mar ket was only moderate, and dealers’ supplies of paper remained limited. The amount of commercial paper outstanding through 26 dealers at the end o f A p ril was $599,000,000, a decrease of about 1 per cent during the month, and of nearly 10 per cent from a year ago. B il l M a r k et The supply of bills continued moderately large in May and was enhanced by several substantial syndicate offerings covering the storage of commodities. Demand for bills was likewise moderately active, due chiefly to buying of 90 day maturities fo r foreign account. In vestment buying by local banks was rather light and scattered. D ealers’ portfolios during the most of the month remained near the high levels reached at the end o f A pril. The rate for 90 day unindorsed bills was unchanged at 3 % per cent on dealers’ sales, and rates on other maturities were steady except for a decline in the 6 months offered rate to 3 % per cent in the latter part of the month. Federal Reserve Bank of New York Loans to New Y ork City Reporting Member Banks and Average Call Loan Renewal Rates. S e c u r it y M a r k e t s The advance in stock prices continued in May fo l lowing a tem porary reaction in the latter part of A pril. Industrial stock averages rose on the average to about 5 points above the previous high level and about 10 points above the highest level of 1926. Railroad shares also were strong, with representative price averages the highest in more than 20 years. A ctivity on the E x change decreased slightly in May, but sales averaged nearly 2,000,000 shares a day. In the bond market, further strength in corporation issues early in the month carried prices about ^2 point higher and, notwithstanding a subsequent slight de cline, representative averages remained higher than at any previous time since the early months o f 1913. United States Treasury bond issues were strong. The Treasury 3 % ’s and 4 ’s rose to new high points since issuance, but Liberty issues remained below the high levels of March. Foreign bonds, which showed a de clining tendency in A pril, were firmer in May. New security offerings during May were considerably larger in the aggregate than a year ago, and not far short of those o f A pril, which, with the exception of February, were the heaviest fo r any month on record. The principal new issue of the month was the offering o f $60,000,000 o f corporate stock and serial bonds of the City of New York. This issue was floated at an in terest cost of 3.94 per cent, com pared with 4.12 per cent fo r a similar issue in January, the most favorable terms on which the City has borrowed since 1909. The amount of railroad financing about equaled that of February and included two large issues, one of $50,000,000 by the Erie Railroad Company and the other of $48,000,000 by the Chesapeake Corporation. Industrial and public utility offerings also included 44 MILLIONS OrDOLLARS MONTHLY REVIEW, JUNE 1, 1927 In the F ar East, the Indian rupee rose from 35.94 cents at the opening of the month to 36.13 cents on the 11th, a figure thereafter maintained. The yen, which, after its abrupt drop to 46.62 cents on the 21st o f A pril, had recovered to 47.70 cents on the 30th, fell slowly to 46.18 cents on May 20, but steadied slightly above that figure. Bar silver continued firm, the range for May from 55.88 cents to 57.75 cents being almost the same as for A pril. The silver exchanges were similarly steady wTith narrow fluctuations. C en tra l B a n k R a te s On May 12, the Bank of Poland reduced its discount rate from %y2 per cent to 8 per cent. F or this insti tution, this is the third reduction this year, as the rate was reduced from 9*4 per cent to 9 per cent on Febru ary 11, and from 9 per cent to 8y2 per cent a month later. G o ld M o v e m e n t Amount o f Foreign Security Offerings in the United States, Exclusive o f Refunding Issues. some very large issues, and were somewhat larger than in A pril. Flotations of foreign loans in this market, on the other hand, showed a decline in May from the large totals o f recent months. A s the accom panying diagram shows, the volume o f foreign securities offered in this country during the first four months of this year was larger than in the corresponding period of any of the past five years. T h e F o r e ig n E x c h a n g e s Sterling exchange, which had been as low as $4.851/s in the third week of A pril, rose rapidly to $4.85% on May 4 ; and then dropped to $4.85 on the 18th, a level low enough to move a small amount of gold to New Y ork from London. From this point it rallied to above $4.85% . Throughout A pril, the German mark was quoted at about 23.70 cents; early in May it weakened, falling to 23.65 cents on the 10th, but rallied from this level to 23.69 cents. A t its low, it was below the gold point on London, and gold movements from Germany to London were reported. The Italian lira was strong. A fter crossing 5 cents in the middle of A pril, it touched 5.66 cents on the 25th, reacted to 5.09 on May 2, rose to 5.51 on the 9th, and steadied just under 5 % cents fo r the remainder o f the month. Other European rates were quiet except for a small decline in pesetas, which at 17.50 cents in the middle of May, were off about one-half cent from the highest figure of A pril. Swedish crowns were some what heavy, but Swiss francs and Netherlands florins were firm. Fluctuations in French and Belgian francs were nominal. A m ong the American rates, Canadian dollars were strong, being quoted at a premium throughout the month. Argentine pesos were steady slightly under parity, while Brazilian milreis scarcely fluctuated from the quotation of 11.84 cents. The inflow of gold was resumed in May, and prelim i nary reports indicated that the net excess o f imports since January 1 has been close to $120,000,000. Receipts o f gold during A p ril totaled $14,500,000, and included $6,000,000 each from England and Japan. Exports were only $2,600,000, of which $1,200,000 went to Brazil, $600,000 to Mexico, and $500,000 to China. D uring May the chief movement o f gold at New Y ork was the arrival o f approximately $24,000,000 from E n g land. The receipt o f an additional $2,000,000 at San Francisco was reported, which brings the total receipts from Japan this year to $20,000,000. E xports from the Port o f New Y ork were very small in May. The follow ing table summarizes the chief movements o f gold in the first five months of the year. (In thousands of dollars) January to April 1927 Source or Destination C anada............................ E ngland.......................... France.............................. Germ any......................... M e x ico ............................. C hile................................ China & H ong K o n g ... Japan............................... A ustralia......................... British M a la ya .............. All other.......................... T o ta l..................... M ay 1 to 26 United States Imports Exports 45,274 13,317 21,000 3,224 6 N ew York District Imports Exports 26,051 13,787 2,323 46 460 ' 2,170 3,644 647 18,000 4,874 ’ 1,891 * ’3,614 1,377 2,912 365 150 67 112,540 25,520 26,429 723 13 T im e a n d D e m a n d D e p o s its The results o f the Com ptroller o f the C u rren cy’s call fo r statements o f the condition o f National banks on March 23 indicate that the tendency fo r time deposits to increase much more rapidly than demand deposits has continued during the past year. Demand deposits were slightly smaller than on A p ril 12, 1926, but time deposits increased 14 per cent during the year. FEDERAL RESERVE AGENT AT NEW YORK 45 MILLI0N5 o f '3ALE 5 10 1926 - 2 7 50 /* V *' 1 9 2 i > -2 6 / r S ? ..... TJME // // •H; •CENTRALRESERVE! ^RESERVECITYBANKS F o r e ig n T r a d e E xports of merchandise, valued at $415,000,000, were slightly larger than in March and $27,000,000 above a year ago, and were the largest in any A p ril since 1920. Imports valued at $378,000,000 were about the same as in March, and $20,000,000 less than in A p ril 1926. Quantity receipts of both crude rubber and raw silk were considerably larger than in March and nearly 50 per cent larger than a year ago. Rubber imports, ac cording to available data, were the largest ever recorded fo r a single month, but as prices were about 30 per cent less than a year ago, the total value was not much larger than in A p ril 1926. The increase in value of exports of grain and raw cotton accounts for the gain over A p ril 1926 in total exports. Shipments abroad o f grains, valued at $34,000,000, were approximately double the value of ship ments a year ago and were $13,000,000 more than in the previous month, contrary to the usual seasonal ten dency. Cotton exports showed the usual decline from March, but were the largest in volume in any A p ril in the past twenty-five years. The accom panying diagram of cumulated cotton exports for the crop year 1925-1926 and thus far in 1926-1927 indicates the large increase in export demand for cotton that has follow ed the low prices of the past year. Of last yea r's cotton crop 54 per cent was exported between August 1 and A p ril 30, whereas in the corresponding period o f 1925-1926 only 44 per cent o f the smaller 1925 crop was exported. 0 A. 5- O. N. 0 J. F. M. A. M. J. J. Cumulative Cotton Exports in 1925-26 and 1926-27 Crop Years. P r o d u c tio n A high level o f productive activity was maintained in A pril, although in some lines there was a slight re duction from the M arch level, even after allowance fo r the usual seasonal change. Anthracite coal produc tion increased substantially, and a further increase occurred in the first half o f May, so that the output was higher than a year previous fo r the first time since February. Motor vehicle output in A p ril showed less than the usual seasonal expansion over March, but has been well maintained in May, according to the indica tion o f employment data, whereas last year a steady decline occurred from March to June. A ctivity in the iron and steel industries was well maintained in A pril, and trade reports indicate slight curtailment in May. Textile mill activity showed some reduction in A pril, but operations in the cotton goods and silk goods in dustries continued fairly high. The accom panying diagram, based on reports issued by the Association o f Cotton Textile Merchants o f New Y ork, indicates that the volume of business in cotton goods has so in- nILLION5 o f YARDS 500r r' UNFILLEDii ORDERS 400 300 \\ \ \ \ ^ \ /s V ' N' STOC // ZOO ^ ^ / / \( i i iiI i A s the accom panying diagram shows, time deposits constituted more than half o f the total deposits o f coun try banks fo r the first time on a call date. The increase in time deposits during the year was much more rapid in central reserve and reserve cities, however, amount ing to 34 per cent, as com pared with 5 per cent in coun try banks. Since 1915, time deposits have increased from 28 per cent to 51 per cent o f the total deposits o f country banks, and from 8 % to 28 per cent of the total deposits o f central reserve and reserve cities, while the proportion o f demand deposits has been correspond ingly reduced. V \ Percentage o f Time Deposits and Demand Deposits to Total Deposits in National Banks (E xclusive o f Deposits o f Correspondent Banks). / 1915 1917 1919 1921 1923 1925 1927 !* (j\ > 1915 1917 1919 1921 1923 1925 1927 >s / ii* PRC'DUCTION 100 ---1-- 1 1 S O N D J 1925 __i__i__ i__ F M A M J J A 5 0 N D J 1926 F M A 1327 Mill Production, Unfilled Orders, and Stocks of Cotton Goods, Reported by the Association of Cotton Textile Merchants o f New York. MONTHLY REVIEW, 46 creased follow ing last y e a r’s drop in raw cotton prices, that despite moderately high levels of production, mill stocks of goods have been reduced to small proportions and unfilled orders have increased from less than one m onth’s production last summer to over two m onths’ output at the end of A pril. Current reports indicate a continued high level of production and new business in May, although the sharp advance in raw cotton is reported to have unsettled the market somewhat at the end of the month. This ban k ’s production indexes in which allowance has been made for seasonal change and year-to-year growth, are shown below. J U N E 1, 1927 PERCENT PER CENT. (Compound trend of past years=100 per cent) 1927 1926 Producers’ Goods Pig iro n ......................... Steel ingots ............... Bituminous coa l.......... Copper, U. S. mines. . Tin deliveries/’ ............. Z in c................................ Petroleum r ................... Gas and fuel o il........... Cotton con sum ption.. W oolen mill activity*. C em ent.......................... Lum ber......................... Leather, sole................ Silk consumption*. Consumers' Goods Cattle slaughtered................. Calves slaughtered............... Sheep slaughtered................. Hogs slaughtered................... Sugar meltings, U. S. ports. W heat flour............................ C igars............... ....................... Cigarettes................................ Tobacco, m anufactured. . . . Gasoline................................... T ires......................................... N ewsprint............................... Paper, to ta l............................ Boots and shoes..................... Anthracite co a l...................... Automobile, a ll...................... Automobile, passenger......... Automobile, truck................. *Seasonal variation not pllowed for Apr. Feb. Mar. 117 113 109 107 114r 108 114 130 108 94r 98 125r 108 108 92 99 92 84 114 133 96r 97r 98 120r 106 115 91 124 85 88r 130 106 109 116 75 92 90 99 111 102 112 101 105r 101 100 86 112 111 67 105 116 93 113 92 93 97 105 81 107 139 124 129 99 90 108 129 133 110 p ~ Preliminary 111 66 107 157 131 118 95 96r 85 118 119 115 112 98 108 98 107 75 107 157 130 119 95 96 73 118 125 91 Apr. 115 111 94 101 104 94 106 86 p 122 *84 126 111 86 109 96 ios 98 78 103 116 *92 p 93 112 118 86 r=R evised E m p lo y m e n t Employm ent reports for A p ril from both State and Federal Labor departments indicated some reduction in factory activity from the March level, especially in seasonal lines such as apparel and shoes. The principal increases during the month were in the production of building materials. The automobile industry showed some further increase, but working forces in most of the other metal industries were reduced. In view of the d rift in population from the farms to the cities, which has been reported in recent years, it is interesting to note the tendencies of factory em ploy ment and farm labor supply that are shown in the ac com panying diagram. F actory output has been main tained with gradually diminishing working forces dur ing recent years, and labor has been released fo r other industries. Accom panying this decline in factory em ployment, the supply of farm labor has increased, and on A p ril 1 was slightly in excess of the demand in the Employment^ in F a cto rie s and F arm L a b o r S upply in N ew Y o r k S tate and in the U nited S ta tes. (F a c t o r y E m p loy m en t, 1919 = 100 p er ce n t; F arm L a b o r S upply in P e r Cent o f D em and, as R ep orted b y U . S. D ep a rtm en t o f A g r ic u ltu r e ). country as a whole fo r the first time on that date in the last five years. This increase in the supply o f farm labor has oc curred without the inducement of high wages— farm wages have increased less than factory wages in recent years. A dditional evidence of reduced opportunities fo r securing industrial employment appears in labor turnover records; the “ voluntary quit ra te” for A pril, com puted by the M etropolitan L ife Insurance Company, was the lowest for that month since 1921, which indi cates that factory workers are in general finding it difficult to better themselves and are holding closely to their present employment. B u ild in g The volume oc building contracts awarded in A p ril continued large, according to the F. W . D odge Corpora tion reports for 37 states east o f the Rockies. The total was 6 per cent larger than fo r A p ril 1926 and only 3 per cent below the record volume o f M arch o f this year. F or the first fou r months o f this year, building contract awards have been less than 1 per cent below the total for the same period o f last year. Residential building in creased in A p ril and was slightly larger than a year ago for the first time since June 1926 and public works and utility projects showed a large increase over a year ago, but contracts for commercial, industrial, and educational buildings were smaller than in the previous month or A p ril of last year. The New Y ork district continued to show a decrease from a year ago, due chiefly to smaller awards for resi dential and commercial buildings. The Southeastern district was considerably below last y e a r’s level, but large increases in activity were reported in the Phila delphia, Pittsburgh, and Chicago districts. I n d e x e s o f B u s in e s s A c t i v i t y This ban k ’s indexes o f business activity generally reflect a large volume o f trade in A pril. Bank debits outside New Y ork City were approxim ately the largest in recent years after allowance fo r seasonal variation, year-to-year growth, and price changes, and debits in New Y ork City remained high. Retail trade was larger FEDERAL RESERVE AGENT AT NEW Y O R K 47 A P R IL 19 Z 6 -1 0 0 ° /o than last year even after adjustment of the figures to make allowance for the late Easter. Car loadings of the bulk commodities were affected to some extent by the bituminous coal strike, but total freight car loadings were the largest ever reported fo r the month of A pril. In the follow ing table are given A p ril indexes of business activity in per cent of trend with allowance for seasonal variations, and, where necessary, fo r price changes, (Computed trend of past years=100 per cent) 1927 1926 Apr. Primary Distribution Car loadings, merchandise and m isc.. Car loadings, other................................ E xports..................................................... Im ports..................................................... Grain exports.......................................... Panama Canal trafficr.......................... 108 111 Distribution to Consumer Department store sales, 2nd Dist.. Chain store salesr.............................. Mail order salesr. .............................. Life insurance paid fo r r ................... Real estate transfers/*....................... Magazine advertising....................... Newspaper advertising?*................... General price level....................................... *=Seasonal variation not allowed for Mar. Apr. 110 108 106 98 117 71 97r 109 107 104p 127p 135 96 81 103 94 129 75 97r 107 94 105 57 94r 89 98r 99r 112r 107r 105 106r 99r HOr 102r 100 102 103r 98 102r 99r 119r lOOr 97 98r 115 130 105 116 134 105 115 141 109 119 137 109 105 124 144 lO lr 108 134 204 98r 113 106 135 227 97r 117 107 134 229 97 107 153 116 119 130 120 129 114 184 184 183 105r General Business Activity Bank debits, outside of N. Y . C it y ......... Bank debits, New Y ork C it y .................... Bank debits, 2nd Dist. excl. N. Y . C it y . Velocity of bank deposits, outside N. Y . C it y ................................................. Velocity of bank deposits, N. Y . C it y .. . Shares sold on N. Y . Stock E xch an ge*.. Postal receiptsr............................................. Electric p ow er............................................... Employment in the United States........... Business failures........................................... Building perm its............... ........................... New corporations formed in N, Y. State. Feb. 111 103 121 147 112 186 100 v —Preliminary 100 102 114 96 98 101 100 121 April 1927 Average Sales Per Store in Leading Chain Store Systems Compared with April 1926. W h o le s a le T r a d e Sales o f reporting wholesale dealers in this district in A p ril continued to average less than a year ago, but the decrease was the smallest since last June. Smaller sales in value, though perhaps not in quantity in all cases, continued to be reported in groceries, m en ’s clothing, w om en’s coats and suits, silk goods, drugs, machine tools, stationery, paper, and jew elry, but sub stantial increases were reported in dresses, shoes, and diamonds. Commission house sales o f cotton goods were also slightly larger than a year ago, notwithstand ing the decline in prices during the year, and hardware sales were practically the same as a year ago. r = Revised C h a in S t o r e S a le s Total sales of reporting chain store systems showed an unusually large increase over a year previous in A pril. Sales o f variety stores were nearly 50 per cent larger than in A p ril 1926, and the increases in grocery, ten cent store, shoe, and candy chains were larger than in other recent months. Percentage Change April 1927 from April 1926 T yp e of Store G rocery................................................................................. Ten cen t................................................................................ T o b a cco................................................................................. Variety.............................................................................. .. . C an d y.................................................................................... T o ta l............................................................................. Number of Stores T otal Sales Sales Per Store + 8 .4 + 8 .3 + 2 2 .5 + 3 .8 + 1 0 .7 + 1 5 .8 + 2 .2 + 1 8 .6 + 2 1 .0 + 1 5 .8 + 4 .4 + 2 1 .6 + 4 9 .0 + 8 .5 + 9 .3 + 1 1 .7 — 5 .5 + 0 .4 + . 9. 9 + 2 8 .7 + 6 .2 + 8 .3 + 2 0 .4 + 1 1 .2 Average sales per store showed the largest increase for any month in at least three years. A considerable part o f the increase was probably due to Easter trade, but some of the increase reflected the less rapid expan sion in the number o f stores operated in several lines during the past year than in the preceding year. Comm odity Percentage Change April 1927 from March 1927 Net Sales — 6.0 Groceries.................... M en’s clothing.......... W om en’s dresses. .. . W om en’s coats and suits C otton goods— Jobbers C otton goods— Com mission........................ Silk good s....................... Shoes................................ D rugs.............................. Hardware....................... Machine tools**........... Stationery...................... P ap er............................... Diam onds....................... Jewelry............................ — 4 .8 Weighted Average.. . -1 8 .4 Stock end of M onth 9 .0 — 38.4 — 9 .7 — 52.4 — 13.4 — 22.5 — 31.6 — 7 .3 — 10.3 + 2.8 + 0 .7 * — 5 .6 — 14.4 — 3 .4 +12.1 + 0 .7 — 16.8 — 9 .6 — 3 .6 Percentage Change April 1927 from April 1926 Net Sales — 3 .7 — 6 .5 + 16.7 — 14.9 — 4 .7 + 2.1 — 6.6 + 1 6 .4 — 3 .3 — 0 .4 — 5 .7 — 10.6 — 1 .7 + 8 .7 — 1 .7 — 1.4 Per cent of Accounts Outstanding March 31 Collected in April Stock end of M onth 6 .4 1926 79. 36. 65.4 35.6 + 1.6 — 1.7* + 17.3 — 14.9 — 4 .0 + 4.9 8 2.3 3 9.4 46 49 44 47. 4 8.5 4 4.9 50.1 4 1 .4 77.8 71.9 67! 6 2 9.4 69.5 2 7.2 5 5.7 5 5.7 * = Quantity not value. Reported by the Silk Association of America. * * = Reported by the National Machine T ool Builders’ Association. D e p a r tm e n t S to re T r a d e Sales o f leading department stores in this district in A pril showed the largest increase over a year previous since last August, due largely to the fa ct that a larger part o f the Easter trade came in A p ril this year. In- 48 MONTHLY REVIEW , JUNE 1, 1927 creases in the first quarter were comparatively small, but the large A p ril sales brought the total fo r the first four months of the year about 3 % per cent above that for the corresponding period last year. A pparel stores also reported a substantial increase in A pril, and mail order sales compared more favorably with those o f a year previous than in any month since last November. Stocks o f merchandise on hand in department stores were smaller than in A p ril 1926, so that the rate of stock turnover was considerably higher. F o r the first fou r months o f this year the ratio o f sales to average stocks carried was about 4 per cent higher than in the corresponding period last year. The ratio o f collections to accounts outstanding at the beginning o f the month was slightly higher than a year ago fo r the second con secutive month, whereas in each month of the preceding year the ratio o f collections had been running lower than a year previous. Business Profits Earnings reports of 164 m anufacturing and mercan tile companies showed net profits for the first quarter of this year about 1 per cent larger than in the correspond ing months o f 1926, which was a period of exception ally large profits. These same concerns in the first quar ter o f 1926 reported an increase of 25 per cent over 1925. There was, however, much irregularity of earn ings as between different kinds o f industries, probably reflecting the downward tendency in prices o f industrial products while labor and other costs remain at high levels. FIRST QUARTER 1926-100°/a Cdemical | Timing&Smelting | Motor | food&FoodFroduds| O il Percentage Change April 1927 from April 1926 Locality Net Sales New Y o r k .......................................... B uffalo................................................ R ochester........................................... Syracuse............................................. N ewark............................................... B ridgeport......................................... Elsewhere........................................... Northern New York State........ Central New Y ork State............ Southern New York State........ Hudson River Valley D ist......... Capital D istrict............................ Westchester D istrict................... Stock on hand end of month Per cent of Charge Accounts Outstanding March 31 Collected in April 1927 1926 + 6 .7 + 0 .9 + 3 .6 - f 7 .7 + 1 7 .2 + 7 .6 + 8 .1 + 2 1 .6 + 6 .6 + 8 .0 — 5 .0 + 11.6 + 1 9 .1 — 0 1 — 10.6 + 1.1 — 19.5 + 3 .3 — 9 4 — 3 .7 All department stores..................... + 7 .7 — 1 .6 50.1 4 8.7 Apparel stores................................... M ail order houses............................ + 7 .0 + 5 .0 + 5 .9 4 4.5 4 1 .0 5 2.9 5 4.0 55 7 5 1.0 4 7.6 5 9.8 ‘ 47! 6 “ 47.2 ’ '35.0 ' '35.5 The apparel and shoe departments accounted fo r most o f the increase in sales, reflecting Easter business in the first half o f the month, and an earlier spring than last year. Sales of furniture and o f home furnishings and supplies showed relatively small increases, and textile sales continued smaller than a year ago. M en’s and B oys’ w ear.............................. Books and stationery................................ Shoes.............................................................. Silverware and jew elry.............................. Toys and sporting good s.......................... M en’s furnishings....................................... H osiery......................................................... W om en’s and Misses’ ready-to-wear. . . Luggage and other leather good s........... W om en’s ready-to-wear accessories. . . . Hom e furnishings....................................... Toilet articles and drugs.......................... Furniture...................................................... Linens and handkerchiefs......................... Musical instruments and rad io............... W oolen good s.............................................. Silks and velv ets........................................ Cotton good s............................................... Miscellaneous.............................................. N et Sales Percentage Change April 1927 from April 1926 Stock on Hand Percentage Change April 30, 1927 from April 30, 1926 + 2 6 .1 + 2 3 .1 + 2 0 .6 + 1 8 .6 + 1 7 .8 + 1 5 .7 + 1 5 .7 + 1 4 .7 + 1 3 .3 + 7 .4 + 4 .4 + 2 .8 + 1 .7 + 0 .8 + 0 .7 + 0 .4 — 3 .6 — 10.7 — 1 .4 — 0 .5 + 0 .4 + 6 .0 — 2 .4 + 1.9 + 6 .9 + 10.8 + 8 .6 + 1.4 — 4 .1 + 0 .6 — 0 .5 + 4 .9 + 4 .7 — 16.1 — 18.8 — 7 .7 — 4 .0 — 3 .0 Ism I Steel | BuildingSupplies I ESI Hotoraccessories Industrial Group Telephone | OifwrJiddicUtilities^ ClassIRailroads | Profits of Industrial and Public Utility Corporations and Earnings of Class I Railroads, First quarter of 1927 Compared with 1926. The largest percentage gains over 1926 were made by the chemical, and mining and smelting companies, and corporations engaged in the production o f food and food products. The motor g ro u p ’s earnings as a whole were ahead of last year, but, if the General Motors Cor poration were excluded, profits in the m otor industry would be smaller than a year previous, as were total profits fo r the year 1926. As the accom panying dia gram shows, other groups o f industrial corporations generally reported a smaller net return than in 1926. (Net Profits in thousands of dollars) 1925 1926 1927 No. of C orpo rations First Quarter First Quarter First Quarter 17 8 24 16 20 15 19 4 7 8 26 48,247 6,146 30,425 34,963 16,358 7,433 10,282 942 7,119 4,196 14,484 71,979 6,625 29,993 43,597 20,921 8,106 12,777 190 9,682 4,191 18,027 77,604 4,807 29,541 41,322 22,434 6,635 13,899 733 11,276 3,675 16,054 Total 11 groups............................................. 164 180,595 226,088 227,980 Other Public U tilities....................................... 70 15 44,400 26,798 50,500 29,327 M otor Accessories............................................. O il......................................................................... Food and F ood P roducts................................ Machine and Machine M fg ............................ Mining and Sm elting....................................... Building Supnlies.............................................. Total Public U tilities................................... 85 71,198 79,827 Class I R ailroads............................................... 184 205,000 224,000 57,500* 30,054 87,554* 227,000