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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

D

i s t r i c t

Federal Reserve Bank, New York

M n y M rk t inM y
oe a e
a
Open market money rates declined in May to levels
even lower than those reached temporarily in March,
in several instances to the lowest levels since the latter
part of 1924 or early 1925, and there were evidences of
a somewhat more plentiful supply of funds. The ten­
dency toward easier money conditions was apparent
before the reduction in the rediscount rate of the FedM oney Rates at New Y ork
M ay 31, 1929
Stock Exchange call loans..........
Stock Exchange 90 day loans...
Prime commercial paper............
Bills— 90 day unindorsed............
Customers’ rates on commercial
loans............................................
Treasury certificates
Maturing Sept. 15 (yield ). . .
Maturing Dec. 15 (yield ). . . .
Federal Reserve Bank of New
York rediscount rate...............
Federal Reserve Bank of New
York buying rate for 90 day
bills..............................................

*6.00
8H
6
5X

April 30, 1930
* 3 ^ -4
4
3 ^ -4
2m

f5 .7 8

M ay 29, 1930
*3.00
3X
t r 4
14.39

5 .0 6
5 .0 2

3 .0 2
3.19

2.0 0
2.4 2

5

3X

3

5X

3

2X

m onth; April average revised

Amount of Money in Circulation in the United States (weekly aver­
ages of daily figures ending with Saturday— computed
by the Federal Reserve Board)




R e s e r v e

C o n d itio n s

eral Reserve Bank of New York from 3 ^ to 3 per cent
on May 2, and was accelerated after that event.
The causes of the May decline in money rates were
not of as temporary a character as that which caused
the low rates during the March tax period. Two of the
most important factors, which are illustrated in the
charts below, were a renewed decline in the amount of
currency in circulation and a continued inflow of gold.
A s the first diagram indicates, nearly $60,000,000 of
currency has been retired from circulation since the
middle of April, leaving the volume outstanding $200,000,000 smaller than a year ago. The average per capita
amount of currency in circulation at the end of A pril was
reported by the United States Treasury Department to
have been the smallest since the W ar. The decline in the
use of currency during recent months has probably been
due to the combined influence of at least three factors.
One of these— the tendency to use checks drawn against
demand deposits in place of currency— is not a recent
dev^opment, but has been operative for a number of
years. Other factors which probably have been more
largely responsible for the unseasonable decline of the

M onetary Gold Stock o f the United States (weekly averages o f
daily figures ending with Saturday— computed by the
Federal Reserve Board)

42

MONTHLY REVIEW, JUNE 1, 1930
MILLIONS OF DOLLARS

past few months are reduced payrolls, accompanying the
recent low level of industrial activity, and lower com­
modity prices.
Gold imports also have contributed to the ease in the
money market during recent weeks. In the last few
days of A p ril and the first three weeks of May a total
of more than $60,000,000 of gold was received from
abroad, chiefly from South America and Japan. This
brought the total net inflow of gold since the beginning
of the year to over $200,000,000, so that the gold stock
of this country reached in May the highest level since
the autumn of 1927.
Through a gradual but fairly steady transfer move­
ment, some of the surplus funds which accumulated in
banks in other districts as the result of the retirement
of currency from circulation or gold imports, came to
New York, and tended to keep the supply of funds in
the money market ample.
The A pril decline in volume of bond trading and the
gradual recession in prices was checked, and bond prices
in May averaged somewhat higher than in the latter
part of April. Probably due at least in part to the large
volume of new bonds coming onto the market, however,
no great strength developed in the market for outstand­
ing issues.
M em ber B a n k C redit
A rather slack demand for bank credit during the
past month has been indicated by the weekly reports
from member banks in leading cities in this district and
throughout the country. Security loans of all reporting
banks on May 21 showed little change from a month
previous, and all other loans, largely commercial,
showed a further decline of $145,000,000. A s in other
periods when there has been a small demand for loans,
and a considerable proportion of the banks have been
out of debt at the Reserve Banks, there has been a
tendency for banks to turn to investments in bonds for
the employment of their funds. During the past month
the reporting banks have increased their investments
nearly $65,000,000, bringing their total investment
holdings to a volume $350,000,000, or more than 6 per
cent, larger than in the first week of February. Un­
doubtedly this increase in bank investments has been
an important factor in the absorption of the unusually
large volume of bond issues during recent months, and
so has aided in the financing of public and corporation
construction programs.
B il l M a r k e t
Following a downward revision in the closing days
of April, open market rates for bills were reduced
progressively during May, so that by the end of the
month offering quotations were % to % per cent lower
than at the end of April. Unendorsed bills of not more
than 90 days maturity reached by the third week of
May an offering rate of 2 % per cent, which is % per
cent below the quotation reached for a few days during
the middle of March, and is the lowest rate for these
maturities since the closing months of 1924. Four
months bills at 2 % per cent and 5 and 6 months maturi­
ties at 2 % per cent equaled the lowest levels reached
in March. Accompanying the declines in open market
rates, the New York Reserve Bank’s buying rates were
reduced, the rate for maturities up to 90 days being




i
---2 0 i---- ---— j50

20
,0 0

12
97

12
98

12
99

13
90

Total Volume of Bankers Bills Outstanding, Showing Amount Held
by Federal Reserve Banks, by Foreign Correspondents of
Federal Reserve Banks, and by Other Investors

lowered by a total of Y2 per cent during the month to
2 Yz per cent.
During the first three weeks of May, the investment
demand for bills was reported to have been in substan­
tial volume and generally in excess of the amount of
new bills being offered to the dealers. This condition
gave impetus to the reductions in bill rates and resulted
in a decline in dealers’ portfolios to a comparatively
small figure— especially their holdings of 90 day bills,
which were in greatest demand. A fter the latest reduc­
tion of Yg per cent in the rate on 30 to 90 day bills
effected on May 19, there was a moderate increase in
the supply of bills, so that dealers’ portfolios returned
to about the same level as at the beginning of the month.
The bill holdings of the Federal Reserve System
declined somewhat further in May, accompanying the
seasonal decrease in the total volume of bills outstanding.
A s the diagram indicates, the retirement of Federal
Reserve bill holdings from the year-end peak during
the first four months of this year was less rapid than in
1929, although the total volume of bills outstanding
declined by a larger amount than a year ago. From a
December 1929 figure which was much higher than a
year previous, acceptance outstandings dropped $318,000,000 during the first four months of this year to
$1,414,000,000 on A p ril 30, a reduction of 18 per cent,
while Reserve System holdings during the same period
declined $182,000,000. In the first four months of 1929,
the liquidation of outstanding acceptance credits
amounted to $173,000,000 or 13 per cent, and Federal
Reserve bill holdings decreased $310,000,000. Holdings
of bills for foreign correspondents by Reserve Banks
and holdings of bills outside of the Reserve System
declined during the first four months of this year,
whereas in the high rate period last year sizable in­
creases occurred.
C o m m e rc ial P aper M ar k e t
Commercial paper rates in the open market tended
gradually lower throughout May, so that by the end of
the month the principal selling range at 3^ 2 -3 % per
cent showed a reduction of Y± Per cen^ from the quota­
tions prevailing at the end of April. Prime commercial
paper is now being sold through the open market at the
lowest rates since February 1925. Coincident with

FEDERAL RESERVE AGENT AT NEW YORK
declines in the return on other types of short-term in­
vestments, the banks throughout the country came into
the market for a large amount of paper, especially after
the middle of the month. During part of the time, avail­
able supplies of paper in dealers’ portfolios fell short
of the investment demand, and to that extent the activity
of the market was curtailed.
The 21 dealers who report to this bank had $553,000,000 of commercial paper outstanding on A p ril 30, which
represents a further increase of $24,000,000, or 5 per
cent, during that month, and a rise of $288,000,000, or
more than 100 per cent, from the low level reached last
September. Although the excellent buying of paper by
bank investors has made it possible for the dealers to
offer increasingly attractive rates to commercial custom­
ers, the absence of a need for additional funds on the
part of a number of commercial and industrial concerns
has been given as a reason why the volume of com­
mercial paper has not increased even more rapidly.

S c r Mr e
e u ity a k ts
Continuing the downward tendency that developed in
the latter part of April, stock prices underwent a sharp
decline in the first few days of May, accompanied by the
largest turnover of shares in several months. Following
this decline, a recovery occurred until the middle of
the month, after which the general movement of prices
was irregular. In the second half of May there was a
marked falling off in the activity of the market, sales
on the Stock Exchange declining on a number of days to
between 1,900,000 and 2,400,000 shares. A s the net re­
sult of the diverse movements during the month, the
average level of share prices in the closing days of May
was about 6 per cent below the highest quotations of the
first part of April. This recent level, however, still shows
a net recovery of 47 per cent of the loss sustained in the
break of last autumn, but is about one-fourth lower than
the peak level of last September.
Bond prices, after a moderate advance in the closing
days of A p ril and the first few days of May, held steady
for the balance of the past month at levels slightly below
those reached in mid-March. Throughout the month of
May, the bond market was called upon to absorb rather
large amounts of new bond flotations, and this tended to
limit buying power for previously outstanding issues
and to prevent any material advance in prices. Trading
in bonds on the New York Stock Exchange was generally
in rather small volume, considerably below the active
turnover of March.

N wF a c g
e in n in
New security issues in A pril totaled $950,000,000, a
larger amount than in any preceding month of 1930,
and $150,000,000 above the total of A p ril 1929. A ll but
$50,000,000 of the A p ril total represented issues for new
capital purposes, and of the $900,000,000 of new money
obtained, 70 per cent was through the medium of bond
flotations. Stock offerings, even excluding the American
Telephone and Telegraph Company issue which is pay­
able in August, were somewhat larger than in im­
mediately preceding months, but the amount remained
much smaller than a year ago.




43
529

431

CORPORATE

GOVERNMENT

1926

1927

1928

1929

1930

Foreign Security Issues for New Capital Purposes— Governmental
and Corporate—during the First Four Months of 1926-1930.
(In millions of dollars)

Domestic corporate new capital issues during the first
four months of this year have aggregated $2,000,000,000,
but due to the great decline in stock financing of invest­
ment trusts and financial companies, have been $800,000,000 smaller than in the corresponding period of last
year. In new bond offerings, however, there has been a
large increase— from about $850,000,000 in 1929 to $1,400,000,000 this year, an expansion of 65 per cent. State
and municipal financing, which is greatly facilitated by
a favorable bond market, has shown an increase of 40
per cent between the two years. In the field of foreign
financing also, a notable resumption of borrowing has
occurred; the total for the first four months of 1930
was over 70 per cent larger than in the corresponding
period last year, and practically as large as in 1928.
The accompanying diagram compares the volume of
foreign government and corporate financing in this
market during the first four months of this year with
that of the corresponding period in recent years. The
corporate issues include security offerings by American
concerns in cases where the funds were for employment
in foreign countries; the inclusion of such issues con­
siderably increased the amount of corporate securities
shown for 1929 in the diagram.
The volume of new securities brought out during May
appears to have compared favorably with the amount
offered during the previous month. Some increase oc­
curred in domestic industrial and public utility company
flotations, while railroad financing, which had been large
in the preceding two months, declined in M ay. Numer­
ous State and municipal issues were announced, and
the total for this group was substantial. The total of
foreign issues does not appear to have quite kept pace
with the $158,000,000 average of March and April, since
the only very large offering was the $50,000,000 Japanese
Government issue.
On May 19, the United States Treasury effected its
fourth sale of Treasury bills. The allotted $104,600,000
of bills, maturing on August 18, 1930, were sold by the
Treasury at an average discount equivalent to an annual
rate of 2.54 per cent on a bank discount basis. This rate

44

MONTHLY REVIEW, JUNE 1, 1930

compares with a cost to the Treasury of 3.28 per cent on
a 90 day issue floated last December, 3.31 per cent on the
issue of last February, and 2.93 per cent on the issue
sold on A pril 15.

C n a B n R teC a g s
e tr l a k a h n e
The trend towards lower money rates abroad was
further accelerated during May, twelve foreign central
banks— eleven in Europe and one in South America— re­
porting reductions in their official discount rates. Five
central banks made their reductions in the first three
days of the month, as follows; on May 1, England and
Belgium lowered their respective rates from 3 y2 to 3
per cent; on the 2nd the Bank of France rate was
reduced from 3 to 2 y2 per cent and the Bank of Danzig
rate from 5y2 to 5 per cent. On the 3rd the Danish bank
rate was cut from &y2 to 4 per cent. The Belgian rate
has not been as low as 3 per cent since October 1909;
the French rate was last below 3 per cent in October
1898; Denmark has not had a 4 per cent rate since 1913;
and the Danzig rate is the lowest since that bank was
founded in 1924.
The second group of changes came soon after the
middle of the month. On the 19th the Bank of Italy
rate was moved from 6 to 5 % per cent, this being its
third reduction since the beginning of March. The
Reichsbank rate was lowered on the 20th by y2 per
cent to 4 y 2 per cent, the lowest German bank rate since
July 1914. This was followed by a reduction from 6
to 5 y 2 per cent in the Austrian rate on the 24th, and a
drop in the rate of the National Bank of Czechoslovakia
from 5 to 4 y2 per cent on the 26th. The Czech bank rate
had remained unaltered since March 1927. On the 30th,
the National Bank of Hungary reduced its rate by y 2 per
cent to by2 per cent, the lowest since this central bank
was organized in 1924. Reference was made last month
to press reports of a reduction in the Yugoslav bank rate
in April.
The National Bank of Yugoslavia did not
lower its rate until May 28. This reduction was from
6 to § y 2 per cent, and was the first change since the war.
On May 21 the Bank of the Republic of Colombia
lowered its discount rate from 9 to 8 per cent, the higher
rate having been in force since November 20, 1929.

G ldM v mn
o oe e t
The receipt of $2,400,000 of gold from Peru was the
only import of substantial amount at the Port of New
York during May, but gold continued to arrive at San
Francisco from the Far East, $12,000,000 coming from
Japan and $900,000 from China. In addition there was
a release of $2,000,000 of gold earmarked for foreign
account. Exports for the month were negligible. The
net gain in May to the country’s gold stock through
these movements showed a considerable decline from
previous months, amounting to only $17,800,000. The
preliminary figure of gold added to the gold stock in
the first five months of 1930 is $218,900,000 as compared
with $151,500,000 in January-May, 1929.
The principal movement abroad in M ay was the series
of withdrawals of gold from the Bank of England for
shipment to France, amounting to over £11,000,000, off­
set in part by the receipt of £5,000,000 in sovereigns
from Australia and £800,000 from South Africa. The




movement from Australia to London appears to have
ended on May 17 with a cumulative total of £22,000,000.
Of the £2,500,000 South African gold offered in the
London market in May, Germany secured £1,250,000
and France £515,000, the balance going mainly to the
trades and to India.

F r ig E c a g
oe n x h n e

The steadiness which characterized the foreign ex­
changes in A pril was followed by a slight decline early
in May. Through the middle of the month changes were
few, but in the last week a sagging tendency reappeared
and towards the month-end a number of quotations were
somewhat below those of A pril 30. Despite this tendency,
only the Spanish, Argentine, and Brazilian currencies
and the Shanghai tael continue to be quoted below last
year’s levels. Sterling fluctuated within narrow limits,
and French francs and lire were practically unchanged
throughout the month. Guilders, which had risen sharply
in April, lost nearly half their gain by May 14 but re­
covered part of the decline in the last week. Pesetas fell
rather sharply in the first two weeks and then became
steadier at almost their lowest level. Japanese yen and
Canadian dollars showed a net gain for the month.
Cable Hates
C ountry

M ay 31, 1929

April 30, 1930

M ay 27, 1930

Belgium ..........................................
E n gla n d .........................................
France.............................................
Germ any................................ ..
Ita ly .................................................
Netherlands...................................
Spain...............................................
Sweden............................................
Switzerland....................................
Canada............................................

$.1390
4.8488
.0391
.2385
.0523
.4018
.1403
.2674
.1925
.9919
.9533
.1188
.4419
.5850

$.1397
4.8622
.0392
.2388
.0524
.4026
.1242
.2688
.1939
.9988
.8726
.1188
.4940
.4706

$ . 1396
4.8603
.0392
.2387
.0524
.4022
.1221
.2684
.1935
.9995
.8681
.1185
.4943
.4275

Japan...............................................
Shanghai (tael).........................

E p y e t a dW g s
m lo mn n a e
The number of workers employed in representative
factories throughout the United States declined only
seasonally between the middle week of March and the
middle week of April. Consequently, for the first time
since last July, this bank’s national index of factory
employment, adjusted for seasonal variations, did not
decline. In New York State, factory employment de­
creased slightly more than usual in April, but the season­
ally adjusted index showed only a small decline follow­
ing steady and substantial declines in each of the preced­
ing six months.
The rate of voluntary labor turnover showed an un­
usually small increase in April, which is usually a month
when many factory employees change their jobs. L ay­
offs were fairly numerous, and the number of new em­
ployees hired was small, so that it appears to have
continued to be difficult for those out of work to secure
factory employment. A slightly more favorable situation
is reflected in the ratio between orders for workers and
applications for employment at New York State employ­
ment bureaus; this ratio increased more than seasonally
in April in response to the expansion of outdoor activ­
ities, and showed a further advance in the first three
weeks of May, so that comparisons with 1929 were more
favorable than in a number of months.

FEDERAL RESERVE AGENT AT NEW YORK
Business P rofits
The earnings reports of 257 industrial and mercantile
companies available at this time show that first quarter
net profits this year were smaller than in 1929 by 22 per
cent. The aggregate profits of these companies, however,
remained 5 per cent larger than in the first quarter of
1928. Of the 19 groups of companies shown in the table
below, 14 reported smaller net income than a year ago.
The largest reduction in actual amount of profits was
suffered by the automobile companies, and this group
also showed one of the largest percentage reductions.
Profits of the industry as a whole were down 43 per cent
from the first quarter of 1929, and excluding General
Motors Corporation, whose net return was 27 per cent
lower, the profits of the remaining companies which so
far have reported, were 75 per cent smaller. The profits
of the automobile parts and accessories industry were
only about half of those of a year ago, and the copper
companies likewise reported a shrinkage of over 50 per
cent. The next largest percentage declines occurred in
the net income of machinery, oil, building supply, office
equipment, tobacco, and miscellaneous mining and smelt­
ing concerns. Steel companies’ profits showed a con­
traction somewhat smaller than the average for all con­
cerns, and the chemical and electrical equipment groups
reported reductions of only 6 and 10 per cent, respect­
ively. The food and food products group showed unusual
stability in earning power, with net profits off less than 1
per cent. Motion picture companies continued to expand
earnings; the first quarter net profits of reporting com­
panies in this group were 39 per cent larger than in
1929, and three times as large as in 1928. Other groups
whose profits were in excess of a year ago included the
coal and coke, paper, printing and publishing, and rail­
road equipment concerns.
A s the first part of the accompanying diagram indi­
cates, industrial corporation profits in the first quarter
MILLIONS OF DOLLARS

MILLIONS OF DOLLARS

45

of 1930 were below those of the last quarter of 1929,
following a large decrease in that period. In each of the
past three years, first quarter profits have been larger
than those of the preceding quarter. Net operating in­
come of Class I railroads, depicted in the second part of
the diagram, declined considerably further in the first
three months of this year, to an amount 32 per cent
below a year ago, and the smallest since the first quarter
of 1922. Telephone companies and other large public
utility corporations earned less in the first quarter of
1930 than in the preceding quarter, contrary to the
usual seasonal movement, but total public utility profits
were slightly above the level of a year ago.
(Net profits in thousands of dollars)
First quarter
Number
1928

1929

1930

15

88,686

93,484

52,945

Printing and publishing..................
Railroad equipm ent........................
T o b a cco....................... .......... ............
Miscellaneous....................................

28
25
13
29
14
8
7
12
5
10
14
8
6
7
6
6
4
40

10,971
12,435
34,216
34,168
5,867
6,016
1,482
6,163
4,841
2,912
15,193
16,400
4,596
3,579
7,207
5,394
1,701
41,527

19,167
23,970
68,424
38,959
7,764
15,321
1,869
10,612
10,428
3,797
20,169
22,265
6,173
2,650
8,130
7,215
1,965
47,033

9,149
16,939
56,562
38,595
5,099
6,545
2,539
7,596
14,516
2,622
19,057
20,160
4,655
4,205
9,228
8,629
1,521
37,231

T otal 19 groups. . ...................

257

303,354

409,395

317,793

Telephone (net operating income)
Other public utilities (net earnings)

106
95

62,700
226,100

69,600
263,000

66.000*
270,000

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

201

288,800

332,600

336,000

Class I railroads................................
(net operating income)

172

217,400

259,300

176,300

Corporation groups
Automobile parts and accessories
(exclusive of tires)........................
O il........................ ...............................
S teel.....................................................
Food and food products.................
Coal and co k e ...................................
Other mining and smelting............
M otion p ictu re .................................
Building supplies..............................
Electrical equipment........................
Office equipm ent..............................

♦March 1930 estimated

MILLIONS OF DOLLARS

Quarterly N et Profits of 163 Industrial Companies, N et Operating Income of 172 Class I Railroads, and Net Operating Income
of 106 Telephone Companies and N et Earnings of 9 5 Other Public Utilities Combined




46

MONTHLY REVIEW, JUNE 1, 1930

C o m m o d ity P rices
Further declines in commodity prices occurred in
May, and the general level consequently reached a new
low since 1916. The most substantial declines were in
metal prices, while the agricultural commodities were
irregular. A t some time during the month, new low
levels for recent years were established by finished steel,
lead, zinc, tin, crude rubber, domestic wool, and raw
silk. Pig iron also declined further, and was the lowest
since September 1928. The price of domestic copper was
reduced further from 14 to 1 2 ^ cents, the lowest since
July 1927, but there was a recovery of % cent from this
level. Scrap steel declined rapidly; from the high of
$19.75 a ton, reached in January 1929, the price had
dropped to $15.25 in December, and after recovering
to $17.00 in February, declined to $14.75 in the fourth
week of May.
The general index of the Bureau of Labor Statistics
declined only a fraction of a point further in April, as
recoveries in some of the agricultural commodities and
their products, which are heavily weighted in the index,
nearly offset further declines in other groups, prin­
cipally in the metals. This is illustrated in the accom­
panying diagram, where the more important groups
have been combined into two major divisions. The
diagram shows that the agricultural commodities in
March were 13 points under the high level of September
1928, and were about 1 point under the low of March
1927; in April, however, a small recovery occurred. The
group composed of fuels, metals, and building materials,
however, has declined almost continuously since the
middle of last year.
PER CENT

indicated, however, by the fact that all but one of the
twenty-four indexes of production of this bank now
available for A pril were below the high levels of April
1929, and sixteen were below the long-time trend of
growth, calculated from the records of past years.
Production in the metal industries was virtually un­
changed in April, and this bank’s index of total auto­
mobile production likewise was practically the same in
April as in March, as output showed just about the
usual seasonal expansion. The fuel industries, however,
generally increased their activity. In the textile in­
dustries there was a sharp decline in mill consumption
of raw silk, and although a moderate increase in cotton
consumption occurred, this bank’s index of textile out­
put declined to a new low level since 1924.
In May, operations in the steel industry declined
seasonally, and production of bituminous coal failed to
show the usual increase in the first three weeks of the
month, while output of anthracite increased more than in
the corresponding period in most previous years, and
average daily production of petroleum was larger than
in April. A sharp curtailment in the production of cot­
ton goods was reported.
(Adjusted for seasonal variations and usual year-to-year growth)
1929

1930

Apr.

Feb.

Mar.

Apr.

118
122
134
114
99
114

101
109
87
89
81
73

101
99
83
91
78
115

102
101
84p
93p
76
89

137
146

88
109

90
117

90p
113p

90
100
118
112
100

81
100
103
107
94

70
67
103
98r
93

85p
77 p
108p
99p

104
103
123
101
97

86
75
108
118
90

83
67
98
109
88p

86
67
85
116p
95p

101
109
96
112

94
95
75
102

89
94
75
98

96
106p
80
103

114
132
87
105

110
87
92
114

111
80
84
109

108
96p
80

Metals
Copper, U. S. m ines.....................................
Tin deliveries.................................................

Automobiles
Passenger cars................................................
M otor trucks..................................................

Fuels
Bituminous coa l.............................................
Anthracite co a l..............................................
Petroleum, crude...........................................
Petroleum products......................................

Textiles and Leather Products
C otton consum ption.....................................
W ool mill a ctiv ity .........................................
Silk consum ption...........................................
Leather, so le ...................................................
Boots and shoes.............................................

Foods and Tobacco Products
Live stock slaughtered.................................
Wheat flour....................................................
Sugar meltings, U. S. p o rts........................
T obacco products..........................................

Miscellaneous
Paper, newsprint...........................................

U . S. Bureau of Labor Statistics Wholesale Commodity Price^ Index
and Group Indexes Showing Movements of Prices of Agricul­
tural Commodities and Their Products, and of Fuels,
Metals, and Building Materials (1 9 2 6 = 1 0 0 per cent)

Po u tio
rdc n
Increases in individual lines of industrial production
slightly more than offset decreases in April, after al­
lowance is made for the usual seasonal changes, and the
net result was a small advance in total productive ac­
tivity. This followed some reduction in activity during
March. A continued rather low level of production is




p Preliminary

r Revised

B ild g
u in
Some further seasonal increase in building contracts
occurred during April, but the total for 37 States re­
ported by the F . W . Dodge Corporation, while the larg­
est for any month since last August, was 25 per cent
below the rather high total for A pril 1929. The accom­
panying diagram indicates the recent movements of the
three major classifications of construction work. Both
residential building and public works and utilities con-

FEDERAL RESERVE AGENT AT NEW YORK
M L N -O D L A S
IL IO S F O L R
*

RESIDENT!/
i A

L

r

S

\

1
ER NON-RES IE e n t ia l
I
t0T H

*1
*«
•■
*

•«

#
i 1^

i

A * \ /•

t \

.♦

\

»

a

v

j

j

\

*

1929

U %j
V
■»
* ik /

:
\

ness was done in the latter month. The number of busi­
ness failures declined less than usual in April, however,
and after seasonal adjustment were as numerous as in
any month in about eight years. The number of new
corporations formed in New York State showed only a
seasonal change, and was much smaller than in 1929.
(Adjusted for seasonal variations and usual year-to-year growth)

\\

J

V •
n

:

J

J

t

47

1930

,
Apr.

Feb.

Mar.

Apr.

102
102
100
122
91

94
89
84
97
80

91
77
87p
92p
79

94
87
81p
99p

101
94
102
97

99
96
106
89

104
93
109
87

105
90p
103
89

Primary Distribution

\

v:
V
|j
PUBLIC WORK;s
& UTILITIES

\

Car loadings, merchandise and m isc........
Car loadings, other.......................................

f

Panama Canal traffic...................................

Distribution to Consumer

1927

1928

1929

1930

Residential, Public W orks and Utilities, and Other Non-Residential
Building Contracts Awarded in 37 States included in the
F. W . Dodge Corporation Report

Department store sales, 2nd D ist.............
Chain store sales, other than g ro ce ry .. . .
Life insurance paid f o r ................................
A dvertising....................... .............................

General Business Activity

tracts increased seasonally between March and April,
while other non-residential work, composed principally
of industrial and commercial building, declined. Ever
since January, public works and utilities projects have
been a more important element in the general building
situation than have residential contracts, and the total
volume in the first four months of the year has been 30
per cent greater than in 1929, while residential build­
ing has been little more than half of last year ’s volume.
The total volume of building contracted for, due largely
to the decline in residential awards, has been 17 per
cent smaller than in 1929.
In the New York and Northern New Jersey district
the building contract total for the period from the first
of the year to A p ril 30 has been 14 per cent smaller
than for the corresponding period of 1929. This decline
has been entirely due to a drop of 60 per cent in residen­
tial contracts, as other principal types of construction
have all shown at least small increases over a year ago;
in fact, contracts for public works and utilities have
increased substantially. A decrease of $94,000,000 in
apartment house construction has accounted for much
of the decline in residential contracts, though in addi­
tion contracts for other residential work have also shown
considerable percentage reductions.
The daily average amount of building contracts
awarded during the first three weeks of M ay was some­
what smaller than in the preceding month, and remained
well below the level of a year ago.

In e e o B s e s A ity
d x s f uin s ctiv
General business activity showed little change between
March and April, and remained at a relatively low level.
Car loadings of merchandise and miscellaneous freight
increased moderately over the level of March, and load­
ings of bulk freight were practically unchanged when
usually there is a sharp decline, but both remained con­
siderably under the levels of recent years. Foreign trade
showed no consistent change from March, and remained
substantially lower than a year ago.
Department store sales in the Second District in­
creased more than usual between March and April, even
after allowance for the fact that this year’s Easter busi­




Bank debits, outside of New York C ity..
Bank debits, New York C ity .....................
Velocity of bank deposits, outside of New
York C it y ...................................................
Velocity of bank deposits, New York City
Shares sold on N. Y . Stock E xchange. . .
Postal receipts...............................................
Electric pow er................................................
Employment in the United S tates...........
Business failures............................................
Building contracts, 37 States r ..................
New corporations form ed in N. Y . State.
Real estate transfers....................................

109
170

98
126

101
142

98
136

124
195
304
85
102
103
112
117r
112
82

115
143
267
79
94
94
116
90r
101
69

116
159
299
73
91p
93
118
88r
93
70

111
150
396
80

General price level*......................................
Composite index of wages*........................
Cost of living*...............................................

179
226
171

173
226
170

173
228
168

174
226

p Preliminary

r Revised

93
121
83r
94

* 1913 average=100

F r ig T a e
oe n r d
Both exports and imports of merchandise during April
continued to show considerable decreases from a year
ago. Exports of merchandise, valued at $334,000,000,
declined somewhat more than usual from March, and
were 22 per cent smaller than in A p ril 1929. Imports,
valued at $308,000,000, showed a slight increase over
March, but were 25 per cent less than a year ago.
A ll of the principal economic groups of exports and
imports participated in the decline compared with A pril
1929.
The finished manufactures group, however,
showed the smallest percentage loss, both in exports and
in imports. The value of exports of grains and grain
products in A pril remained low as compared with a year
ago. The quantity of raw silk imported declined slightly
from the previous month, and was 20 per cent less than
in A pril 1929. Receipts of crude rubber were larger
than in March, and were only 8 per cent less than a
year ago.

C a S r Ta e
h in to e r d
The total A pril sales of reporting chain stores aver­
aged 14 per cent higher than a year ago, due to the
unusually large increases in sales reported by ten cent,
shoe, variety, and candy chain store systems, which no
doubt reflected the inclusion of Easter trade this year,
whereas it was included in March figures in 1929.
Grocery chains also reported a substantial increase in
sales compared with a year previous, but drug store
sales continued slightly below last year.

48

MONTHLY REVIEW, JUNE 1, 1930

The Easter trade was reflected also in sales per store,
especially in the case of candy stores. A ll lines except
drug chains showed at least slight increases in sales
per unit.

compared with those of A pril 1929 in the following
table. It will be noted that sales in the apparel depart­
ments showed the largest increases.
N et sales
percentage change
April 1930
compared with
April 1929

Percentage change April 1930
compared with April 1929
Number
of
stores

Total
sales

Sales
per
store

G rocery............................................
Ten cen t..........................................
D ru g.................................................
S hoe..................................................
V ariety.............................................
C an dy...............................................

+ 3 .6
+ 8 .0
+ 7 .4
+ 9 .2
+ 1 9 .4
— 2 .8

+ 1 5 .5
+ 1 1 .0
— 0 .8
+ 2 2 .6
+ 2 0 .0
+ 4 2 .9

+ 1 1 .5
+ 2 .8
— 7 .6
+ 1 2 .3
+ 0 .4
+ 4 7 .1

T ota l........................................

+ 7 .2

+ 1 4 .1

+ 6 .4

Type of store

M en’s and B oys’ w ear...........................
T oys and sporting g ood s.......................
Luggage and other leath ergood s........
M en’s furnishings...................................
W om en’s ready-to-wear accessories...
W om en’s and Misses’ ready-to-wear.
W oolen good s...........................................
Toilet articles and drugs.......................
Books and stationery.............................
Silverware and jew elry..........................

Dp r e t S r Ta e
e a tmn to e r d

Home furnishings...............................
Musical instruments and ra d io ...........
Linens and handkerchiefs.....................

The total sales of the reporting department stores in
this district showed an increase of more than 10 per
cent over a year ago in April, the largest increase since
August 1926, undoubtedly due in large part to the
Easter trade, which occurred in A pril this year, but in
March last year. However, the total sales of these stores
for March and A pril combined were 2 per cent larger
than in the corresponding period last year. Unusually
large increases in sales were reported in April by stores
in New York City, Rochester, Newark, central New York
State, the Capital District, and the Westchester Dis­
trict. The Buffalo and Syracuse reporting department
stores also showed increases in sales, following decreases
in each month since August, and moderate increases in
sales were reported in Bridgeport, southern New York
State, the Hudson River Valley District, and in northern
New York State. Reflecting Easter purchases of cloth­
ing, the reporting apparel stores showed about an 8 per
cent increase in their sales compared with last year.
Stocks of merchandise on hand were smaller than a
year ago for the fourth consecutive month. The per­
centage of outstanding charge accounts collected during
A p ril continued below the corresponding month last
year.
Sales and stocks in major groups of departments are

Silks and velvets. ...................................
Miscellaneous...........................................

L ocality

Percentage
change
April 1930
compared with
April 1929

Net
sales

Wholesale dealers in this district reported A pril sales
10 per cent smaller than in 1929. Sales of diamonds
showed an even greater decrease than in March, but in
the sales of jewelry and m en’s clothing the declines,
while substantial, were not so large in A p ril as in the
month previous. Grocery sales declined slightly follow­
ing increases from a year ago in February and March,
and decreases of varying size continued to be reported in
the sales of cotton goods, hardware, stationery, and
paper. The Machine Tool Builders Association reported
machine tool orders far below the volume of last year,
for the sixth consecutive month.
Sales of silk goods,
shoes, and drugs, however, showed increases compared
with last year, following decreases in recent months.
Stocks held by grocery, cotton goods, and hardware
dealers remained smaller than a year ago, but stocks of
silk goods and drugs continued to be larger than in 1929.
Wholesale shoe firms reported a decline in stocks from a
year previous for the first time since December. Collec­
tions were slower than in A pril 1929 in a majority of
lines.

Per cent of
accounts
outstanding
March 31
collected in
April

New Y o r k ...........................................................
B uffalo.................................................................
R ochester......... ..................................................
Syracuse..............................................................
N ewark................................................................
Bridgeport...........................................................
Elsewhere............................................................
Northern New Y ork S tate..........................
Central New York S tate.............................
Southern New York S tate..........................
Hudson River Valley D istrict...................
Capital D istrict.............................................
Westchester D istrict....................................

+ 1 0 .4
+ 5 .4
+ 1 2 .7
+ 1.9
+ 1 4 .1
+ 6 .5
+ 1 0 .4
+ 2 .5
+ 1 1 .2
+ S .3
+ 5 .4
+ 1 3 .6
+ 1 6 .1

+
—
—
+
—
—
—

All department stores..............................

+ 1 0 .4

— 1.9

Apparel stores............................................




+ 7 .7

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

1929

51.7

4 2 .6

3 8 ‘.9

4 5 .3
38.4
4 0.4

43 .0
3 8 .8
3 8.8

M en’s clothing...............
Cotton good s..................

Machine tools**............

— 5 .4

4 7.8
4 9.7

Percentage
change
April 1930
compared with
March 1930

Net
sales

1930

5 2.7

— 5 .8
— 5 .5
+ 2 .3
— 7 .0
— 6 .0
— 3 .0
+ 9 .3
-5 .1
— 18.9
+ 0 .6
+ 1 0 .6
— 5 .2
— 3 .2
— 2 .4
+ 1 8 .2
+ 7 .3
+ 1 3 .0
— 16.4
— 9 .3

W o s leT a e
h le a r d

Com m odity
Stock
on hand
end of
month

+ 5 1 .4
+ 2 9 .8
+ 2 7 .5
+ 2 4 .2
+ 1 9 .1
+ 1 4 .7
+ 1 4 .4
+ 1 4 .3
+ 9 .8
+ 9 .1
+ 8 .0
+ 7 .1
+ 5 .3
+ 0 .2
— 4 .5
— 4 .7
— 8 .8
— 14.9
+ 8 .7

Stock on hand
percentage change
April 30, 1930
compared with
April 30, 1929

+ 0 .9
— 33.3
+ 2 .7
— 4 .9 *
— 4 .9
+ 1 9 .5
+ 4 .4
— 1 .2
— 7 .2
— 2 .9
— 14.2
— 2 .5
— 6 .2

Stock
end of
month
— 11.1

— ’6.5
— 4 .4 *
— 13.9*
— 7 .1
+ 3 .8
....

— *8.2
— 0 .1

Percentage
change
April 1930
compared with
April 1929

Net
sales
— 2 .7
— 20.1
— 12.7
+ 6 .3 *
+ 8 .8
+ 8 .6
— 2 1.3
— 4 4 .0
— 6 .7
— 7 .8
— 6 1.5
— 3 0.2
— 10.2

Stock
end of
month
— 4 .2
— ‘ 3 .9
+ 1 3 .9 *
— 5 .7
+ 7 .4
— 9 .5
* « •*
— 39! 2
— 17.8

Per cent of
accounts
outstanding
M arch 31
collected
in April

1929

1930

7 6.9
3 6.7
3 3.8
4 6 .3
4 7.8
4 9 .3
4 9 .7

7 6.9
33.1
3 1.6
4 7 .0
5 0.7
35.1
4 8 .7

7 4.6
68.4
} 2 7.3

7 6 ‘.2
6 1 .4
} 2 5.3

53.1

5 1.2

4 6.3

Weighted average..

4 7.6

* Quantity not value. Reported by Silk Association- of America
** Reported by the National Machine Tool Builders Association

FEDERAL RESERVE BANK OF NEW YORK
MONTHLY REVIEW, JUNE 1, 1930

"PRC N
E ET

Business Conditions in the United States
(Summarized by the Federal Reserve Board)
N D U S T R IA L activity increased slightly in A p ril from the rate prevailing
in March. Factory employment declined by the usual seasonal amount,
while factory payrolls showed a smaller reduction than usual. Wholesale
prices continued to decline in A p ril and the first ha lf of May. There was a
further easing of open-market money rates.

I

P r o d u c t io n

Index Number of Industrial Production of
Manufactures and Minerals Combined. Ad­
justed for Seasonal Variations (10231925 average — 100 per cent)
PER CENT

>
r
r
O

Payrolls, Withoat Adjustment for Seasonal
Variations (1923-2* average = 100
per cent)

1

I

A
A-

19?f>

1327

/

J

r
'V

V

1928

1929

1930

o
o
s
? ___________

r

^ / \

R E S E R V E BANK D ISC D U N T A RA TE

A

1 *
f/

J

A C C E F 3t a n c e ”ra 'TE

1926

1927

'< t
1928

1929

1S30

Money Rates in the New York Market (May
rates are average for the first 20 days)




holesale

P r ic e s

An increase in wholesale prices in the first week in A p ril was followed by
a substantial decline which continued into May and brought the level of prices
to the lowest point in a number of years. Prices of important raw materials,
such as wheat, cotton, and silk declined during most of the period, but steadied
somewhat around the middle of May, while prices of silver, hides, and coffee
were comparatively stable. There were fa irly continuous price declines in
steel, sugar, raw wool, and the textiles. Copper prices were reduced further
early in May, but recovered somewhat following large purchases fo r domestic
and foreign consumption.
B a n k C r e d it

1ERCIAL PA P E R R A T E

— J

P ayrolls

Department store sales increased during the month by an amount esti­
mated to be slightly larger than is accounted fo r by the late Easter holiday.
The value o f foreign trade decreased further in A p ril, and fo r the first
four months of the year exports were about 20 per cent smaller than a year
ago, when trade was exceptionally active. In part this decline reflected the
lower level of wholesale prices.
W

Monthly Averages of Weekly Figures for Re­
porting Member Banks in Leading Cities
(Latest figures are averages of first 2
weeks of May)

--------

m ploym ent and

D is t r ib u t io n

L

. .

U
/jV
j-S |
____ __

E

Factory employment, which had been decreasing since last September,
declined by about 1 per cent in A p ril, which represents the usual development
fo r that month, while the reduction in factory payrolls from March to A p ril
was smaller than usual.

A

rH R LO N
E
A!

L JA S O S :curities i r
C N N E

Production in basic industries in A p ril was slightly larger than in March
and the Board’s index, which makes allowance fo r the usual seasonal changes,
shows an increase o f about 2 per cent, offsetting a large part of the decrease
in March.
Output of automobiles showed the usual seasonal expansion. Steel output
declined seasonally in A p ril and the early part of May. The output of silk
textiles was considerably reduced, and woolen mills curtailed operations, though
less than seasonally. Cotton mills were more active in A p ril and there was
some increase in stocks. In the first h a lf of May, however, a program of cur­
tailment was instituted in the industry.
In comparison with the first four months of 1929, a year of exceptionally
active business, production was smaller in almost all major branches of indus­
try, with the exception of tobacco. In comparison w ith 1928, however, output
was larger in the automobile, petroleum, and silk industries, slightly smaller in
steel and coal, and considerably smaller in cotton and wool textiles, flour,
meatpacking, automobile tires, and lumber.
Building contracts awarded during A p ril, according to the F. W. Dodge
Corporation,' were 6 per cent larger than in March, reflecting further expansion
in awards fo r public works and utilities, and some increase in residential con­
struction, largely seasonal in character. In the first two weeks in May there
was a further increase in building activity. In comparison w ith 1929, awards
in the first four months of the year were 17 per cent smaller, reflecting chiefly
the continued small volume of residential building, which more than offset
increases in public works and in u tility construction.

Loans and investments of member banks increased by about $160,000,000
in the latter half of A p ril, but declined by $140,000,000 in the first two weeks
in May, both movements reflecting chiefly fluctuations in loans on securities.
Investments increased further, while “ all other ’ ’ loans continued to decline,
and on May 14 at $8,560,000,000 were the smallest in more than two years.
The volume of Reserve Bank credit declined further by $125,000,000
between the weeks ended A p ril 19 and May 17, largely as a result of the addi­
tion of about $65,000,000 to the stock of monetary gold and of a further
lubstantial reduction in the volume of money in circulation, which reflected
chiefly smaller volume of payrolls and declines in retail prices. The System’s
holdings of bills declined, while United States securities and discounts fo r
member banks showed little change.
Money rates on all classes of paper declined further in May. The dis­
count rate of the Federal Reserve Bank of New York was reduced from 3*4
to 3 per cent on May 2, and that at the Federal Reserve Bank of Boston from
4 to 3% per cent on May 8.