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MONTHLY REVIEW o f C r e d it a n d B u s in e s s C o n d it io n s Second Federal Reserve District Federal Reserve Agent Federal Reserve Bank, New York Business Conditions in the United States March 1, 1923 P ro ductio n Ind u strial employment continued to increase du ring Ja n u a r y , and shortages of both skilled and unskilled labor were reported b y textile mills, steel mills, and anthracite coal mines. M ore w age increases at indus trial establishments were announced than in December. There is still some unemployment in States west of the M ississippi. In industrial and commercial centers there has recently been a larger demand fo r office workers, although throughout the country there is much unem ploym ent in this group. Production in basic industries, as m easured b y the Fed eral Reserve B o a r d ’s index, w as 6 per cent, higher in Ja n u a r y than in December, and reached a volume exceeded only once in the past, in M a y 1 9 1 7 . P ro d u c tion of steel ingots and of anthracite coal and mill con sumption of cotton showed p a rtic u la rly large advances, and most other im portant industries increased their output. B u ild in g operations have been m aintained on a large scale. The expansion in production du ring J a n u a r y w as ac companied b y a substantial increase in freigh t ship ments. C a r loadings o f forest products, reflecting the continued building activity, reached the highest m onthly total on record, and loadings of merchandise and mis cellaneous commodities were higher than in a n y Ja n u a r y of the past fou r years. The index num ber of the B u reau of L ab o r Statistics, computed from the wholesale prices of about 400 com modities, including finished and semi-finished products as well as ra w m aterials, showed the same average level of prices in J a n u a r y as in Novem ber and December. Between Decem ber and J a n u a r y the prices o f clothing, fuel, metals, bu ilding m aterials, chemicals and house furnishings advanced, but these advances were accom panied b y declines in farm products and food, so that the combined index rem ained unchanged. D u rin g recent weeks the prices of a num ber of basic commodi ties advanced ra p id ly and in m an y cases reached the highest points since 19 2 0 or the early p a rt of 1 9 2 1 . A m ong commodities reaching new high levels fo r the current movement w ere corn, beef, cotton, wool, silk, hides, lumber, rubber, linseed oil, copper, and p ig iron. U R T H E R increase in the volume of production in basic industries to a level higher than in 1 9 1 9 or 19 20 , a continued advance in the prices of m any basic commodities, additional borrow ing from banks for commercial purposes, and somewhat higher money rates are the prin cipal recent developments in the business situation. F PERCENT. Index of Production in Basic Industries— Combination of 22 Indi vidual Series Corrected for Seasonal Variation (1919 average = 100 per cent.) P r ic es PER CENT. Prices— Index Numbers of Wholesale Prices, U. S. Bureau of Labor Statistics (1913 average = 100 per cent.) 2 MONTHLY R E V IE W , M A R C H BILLIONS OF OOLLARS BILLIONS OF DOLLARS 30r J 20 1, 1923 a ■ y V V v y 10 1919 1920 1921 1922 1923 Volume of payments by Check— Checks drawn on banks in 140 centers (New York not included) T rade A n active distribution o f goods fo r this season of the y e a r is indicated b y reports to the Reserve Banks, both of wholesale and retail dealers fo r the month o f J a n u a ry . Sales of departm ent stores in over 10 0 cities w ere 1 2 p er cent, la rg e r than in Ja n u a r y 19 2 2 . Inventories fo r Ja n u a r y show th at there has been no large increase in stocks of goods held b y departm ent stores and the rate o f turnover continues rapid. I n wholesale lines there were p a rtic u la rly large sales d u rin g J a n u a r y of d r y goods, drugs, hardw are, and farm implements. B a n k C redit The larger volume of commercial borrow ing at member banks in recent weeks has been con trary to the usual trend of the season. Com m ercial loans of reporting member banks on F e b ru a ry 1 4 were $243,000,000, or 3 p er cent., larger th an a t the end o f December, and 7 per cent, above the level a t the end of J u l y , when the gen eral dem and fo r credit first showed an u p w a rd tu rn. T h is increased dem and fo r credit at the member banks has resulted recently in an increased volume o f borrow ing b y the member banks at the Reserve Banks, chiefly Boston, N ew Y o rk , and Philadelphia. On F e b ru a r y 2 1 , the loans to member banks w ere $628,000,000 or $248,000,000 higher than in midsummer. D u rin g the same period the volume of Governm ent securities and bankers acceptances held (by all F e d e ra l Reserve B an ks declined $16 1,00 0,00 0, resulting therefore in a net increase of $87,000,000 in the loans and security hold ings o f the Reserve B anks. The volume o f F e d e ra l R e serve notes in circulation which showed the usual post h oliday decline in Ja n u a r y , began to increase on J a n u a ry 3 1 , a week earlier than last year. M oney rates also showed a tendency to become firmer, especially in recent weeks. Th e open m arket rate fo r commercial paper, which w as 4 p er cent, last summer, rose d u rin g F e b ru a ry from a ran ge o f 4 % -4y2 to a range of 4 ^ - 5 p er cent. On F e b ru a ry 2 3 the discount rate on all classes of paper at the Boston and N ew Y o rk R eserve B an k s was advanced from 4 to 4 y2 per cent. Bank Credit All Federal Reserve Banks Credit Conditions The continuance during the early weeks o f 1923 o f the growth o f business activity which marked the year 1922 makes it desirable at this time to examine the changes in business and finance which have occurred in the past year and a half. The month to month increases have been so gradual that the extent o f the changes which have taken place is not generally realized. The changes in principal aspects o f industry and trade are summarized below. Comparisons are made between those months when low points were reached and the month o f January 1923, unless figures fo r other available dates are given. I ndustry— Production, measured by the index of output in 22 basic industries, has increased since July 1921..........................................54 per cent. Employment, measured by the number of workers employed in New York State factories, has increased since July 1921...............23 per cent. T rade— W holesale trade in this district, measured by the sales reported by representative dealers in 10 lines (with allowance made for seasonal ch a n g e s ) , has increased since July 1921 31 per cent. Retail sales in this district, measured by the reports from 60 department stores (with allowance made for seasonal changes), has in creased since September 1921...............13 per cent. B ank T ransactions in 140 centers outside New York City, measured by debits to individual accounts (with allowance made for seasonal changes), have increased since July 1921 .............................................................. 32 per cent. Prices— This bank’s index of wholesale prices of 20 basic commodities increased from June 1921, to February 24, 1923....................... 30 per cent. The Department of Labor Index of wholesale prices increased from January 1922, to January 1923..............................................13 per cent. The cost of living, measured by the index of the National Industrial Conference Board, increased from June 1922 to January 15, 1923 .............................................................. 2 per cent. W ages— The hiring rate of wages for unskilled labor in this district increased from April 1922 to January 15, 1923................................... 16 per cent. Average weekly earnings of workers in New York State factories increased from April 1922 to January 15, 1923 ................................. 9 per cent. F E D E R A L R E SE R V E AG EN T A T N E W YO RK PRODUCTION & TRADE WAGE'S BA5IC PRODUCTION R E TA IL TRADE. & P R IC E S ALL REPORTING BANKS FACTORY WAGES LOANS-STOCKS &B0ND5 UNSKILLED LABOR NET DEMAND DEPOSITS BANK TRANSACTIONS COST o f LIVING- EMPLOYM ENT N Y D E P T.o f LABOR WHOLESALE TRADE 100«/o lQ19-1920 I---LOW 20 BASIC LOANS# INVESTMENTS IN V E S T M E N T S COMMERCIAL LOANS Latest Figures for Production and Trade, Wages and Prices, and Bank Loans and Deposits, Compared with Highest Levels in 1919 and 1920, and Lowest Levels in 1921 and 1922 The differences between these various percentages of increase m ay be la rg e ly accounted fo r b y the relation which the items measured bear to the immediate processes of consumption. In general, the nearer an item stands to immediate consumption the sm aller w ill be the change which it shows in periods of business change. The con sumption of goods goes fo rw ard w ith relatively little regard to the changes in business conditions, whereas processes f a r removed from the ultim ate consumer, such as the production of basic commodities, are likely to move more w idely and in close relation to the changes in business conditions. The recent advances in business a ctivity have brought in d u stry and trade in a num ber o f cases well up to the high points reached du rin g the w a r or in the years 1 9 1 9 and 19 2 0 . Th e index of production in basic industries now stands higher than in a n y month of 1 9 1 9 or 19 20 , and is lower than in only one month of the past, M a y 1 9 1 7 . I f in com puting the volume o f wholesale and retail trade it were possible to make accurate allowance fo r price changes, the volume of trade now being carried on in these lines would doubtless prove to be even higher than in 1 9 1 9 or 19 20 . In aggregate, the present a ctivity of in d u stry and trade is probably only slightly, if any, below the m axim um a ctiv ity of the past. Th is high a c tiv ity has been reflected only recently in the commercial loans o f the banks. Through a period of m any months grow ing business a ctiv ity did not involve an y increase in commercial loans, larg ely because cor porations and others financed themselves from fund s p re viously accum ulated or from the proceeds of securities issued. Since the late summer of 19 2 2 , however, in creases from time to time have occurred in the volume o f commercial loans, attended b y grad u al advances in open m arket interest rates, which, in the case o f the rate on commercial paper, rose from 4 p er cent, to a present rate o f 4 } 4 - 5 p er cent. O ther form s of bank credit have been la rg e ly em ployed. Investm ents b y banks in Governm ent and cor porate securities, which increased ra p id ly d u rin g the period when the demand fo r commercial loans w as light, rem ain h ig h ; and loans on stocks and bonds have ex ceeded the m axim um level of 19 19 -2 0 . These and other changes of im portance are sum m arized below. C om pari sons are m ade between those dates when low points were reached and F e b ru a ry 14 , 19 2 3 . Member B anks in L eading Cities— Total loans and investments have increased $1,772,000,000 since March 8, 1922............................. or 12 per cent. Investments have increased $1,561,000,000 since July 27, 1921........................... or 48 per cent. Loans on stocks and bonds have in creased $807,000,000 since September 7, 1921 or 28 per cent. Commercial loans have increased $502,000,000 since August 30, 1922.......................or 7 per cent. Net demand deposits have increased $1,779,000,000 since September 21, 1921.. or 18 per cent. In their earlier stages, these increases in the volume of member bank credit took place without m aterial use of the credit-m aking powers o f the F e d e ral Reserve Banks. Th is w as owing in large p a rt to the im portation of gold, which in the years 1 9 2 1 and 1 9 2 2 reached the net amount of $906,000,000, and provided the banks w ith additional reserves upon w hich th ey were enabled as occasion re quired to expand their loans and deposits. M ore re cently, however, the increasing demands upon the banks have resulted in their la rg e r use of F e d e ra l Reserve credit, and the loans of the Reserve B an ks have risen, as appears in the follow ing sum m ary, based upon figures fo r F e b ru a ry 2 1 . A ll F ederal R eserve B anks — Earning assets have increased $143,000,000 since August 9, 1922 or 14 per cent. Loans to member banks have increased $248,000,000 since July 26, 1 9 2 2 ...or 65 per cent. Th e item “ earning assets’ ’ includes the Governm ent securities and bankers acceptances held b y the Reserve B an ks as well as their loans to member banks. The volume of securities and acceptances owned is now con siderably sm aller than in midsummer, but as such hold ings declined the loans to member banks increased b y a somewhat larger amount, and earning assets in conse quence have recently tended to rise. A s has been seen from the foregoing, both in this dis trict and elsewhere in the country, in d u stry and trade are at or near the m axim um p ro d u ctivity o f 19 19 -19 2 0 . Thus fa r the increased volume o f credit required b y the in creased volume o f production and the gen erally higher prices at which goods are being distributed, has been supplied b y the banks w ithout much borrow ing from the F ed eral Reserve B anks. I t is, however, to be noted in connection w ith the p res ent situation, when in d u stry and trade are approaching M ONTHLY R E V IE W , m axim um p rodu ctivity, that the effectiveness o f fu rth er additions to the volume of credit and the stim ulus of rising prices are of dim inishing im portance m prom oting the production and distributon o f goods. Money Market Fo llo w in g easing in m oney rates du rin g Ja n u a r y , rates in F e b ru a ry again became firmer, both fo r commercial and stock m arket money. O rdin arily, it is custom ary fo r interest rates to begin to reflect in F e b ru a ry the g rad u a lly increasing credit requirem ents of sp rin g trade and agricultu re, and this y e a r the expansion of industrial a ctivity has been of a character to accentuate these sea sonal tendencies. The movement corresponds with the renewed rise of commercial loans at banks. Open m arket rates fo r prim e commercial p aper rose from a ran ge of 4% to 4 y 2 p er cent, in Ja n u a r y to 4 % and 5 p er cent, b y the latter p a rt of F e b ru a ry . F ir m ness w as more m arked in N e w Y o rk C ity , where few of the large buyers w ere in the m arket. The m arket in the interior was somewhat more active and easier than in N ew Y o rk , but likewise showed a firm er tendency. The volume of paper offered w as moderate, as the cost to bus iness concerns o f borrow ing directly from their own banks was gen erally low er than the cost of borrow ing through the open market. The accom panying diagram carry in g fo rw a rd the rec ord of outstanding p aper through Ja n u a r y 3 1 indicates the increased volume of p ap er distributed d u rin g J a n u a ry . O w ing to the w ithd raw al of one of the sm aller firms from business the num ber of reporting dealers was reduced from 2 7 to 26. MARCH 1, 1923 Increased firmness in the Stock E x ch a n ge m oney m ar ket w as reflected b y an average call loan renewal rate of approxim ately 4 % per cent, fo r the first three weeks of F e b ru a ry , compared w ith about 4% p er cent, fo r the cor responding period of Ja n u a r y . A f t e r the m iddle o f the month renewals were freq u en tly at 5 p er cent, or above, and on several days rates fo r a portion of the new loans touched 6 per cent, fo r the first tim e since Decem ber. Stock m arket time m oney w as quiet, but h igher; rates rose from *4 % to 5 per cent. Security Markets A cco m pan yin g fu rth er increase in business a ctivity and increases in com m odity prices, the stock m arket in F e b ru a ry again became active and strong. Transactions averagin g considerably more than a m illion shares a d a y were the heaviest since last Ju n e , and the p rice rise w as the most ra p id since ea rly last fall. In dustrial stocks rose, on the average, 5 to 7 points to approxim ately the highest levels reached last October, and were w ithin 2 2 points o f the highest level of Novem ber 1 9 1 9 . R ailroad stocks were also stronger, p a rtly reflecting h eavy ra il traffic and la rg e r net earn ings, but prices did not fu lly recover the declines o f last fall. B ond prices w ere somewhat firm er in the ea rly p a rt of F e b ru a ry , p a rtly due to strength in stocks and to a fa ll ing off in new security offerings. A ve ra g e s of corpora tion issues rose about of a point, and there were cor responding advances in L ib e rty bonds. Fren ch , B elgian, and C entral E u ro p ean issues also rallied from the ex treme low points reached at the end of Ja n u a r y . L a ter, bond prices again reacted slightly, accom panying firmer money rates. The volume of new financing fell again to moderate proportions follow ing the high activity o f Ja n u a r y . A total of approxim ately $200,000,000 fo r the first three weeks of the month, com pared with $726,000,000 fo r the corresponding period o f Ja n u a r y , a reduction which p er mitted more complete distribution of previous issues. The largest single offering of the period was $25,000,000 Dutch E a s t Indies 5 ^ s , offered at a price to yield 7.206.40 per cent. Sin ce a y ea r ago, bonds placed in this m arket b y that governm ent have totaled $125,0 00,00 0. Foreign Exchange Commercial Paper Outstanding— Twenty-Six Dealers The unusual activity that prevailed in the bill market in Ja n u a r y likewise fell off in F e b ru a ry , and several of the dealers who had reduced their b u yin g and selling rates b y % returned them to their form er levels, which were 4% per cent, fo r purchases and 4 per cent, for sales. The volume o f new bills in the m arket w as limited, p a rtly a seasonal condition and p a rtly a reflection o f a fallin g off in the volume of export bills which has recently ac companied the m arked advance in A m erican commodity prices. Despite the unsettling influence of developments in the R uh r, sterling exchange continued its advance in F e b ru a r y and on the 2 1s t demand d rafts sold at 4.72, a new high point since 1 9 1 9 . A favo rab le facto r of im portance d u rin g the month w as the B ritish acceptance of the A m erican debt fu n d in g terms, and their adoption b y Congress. M arks displayed sudden strength in F e b ru a ry, and n early doubled in value from .000024 to .000044, not w ithstanding that the note circulation in G erm an y con tinued to increase at a more ra p id pace. F re n ch and B elg ian exchanges, on the other hand, dropped to the F E D E R A L R ESER VE AG EN T A T N E W YO R K lowest points in two years or more, and on F e b ru a ry 20 showed a loss of about 1 % cents since the failu re of the Paris Conference and entrance of troops into the R uhr. W eakness in the B elgian rate w as accompanied in the latter p a rt of Ja n u a r y b y an advance in the discount rate of the National B an k of B elgium from 4 y2 to 5^/2 per cent. Th e accom panying diagram , showing the note circula tion in Fran ce, E n glan d , and the U nited States, indi cates certain of the un d erlyin g facto rs in recent move ments of exchange. B ritish cu rren cy issues, a fte r a sea sonal increase in the fall, have decreased more ra p id ly than note issues in this cou ntry to the lowest point since Ja n u a r y 1 9 19 . Fre n ch cu rren cy issues are now sligh tly above the December level and only 2 .7 p er cent, below the 19 20 average. There has recently been no increase in direct borrow ing b y the government from the B an k of Fran ce. 5 creased ra p id ly and there w as an even more rap id ad vance in prices of basic commodities in E n glan d . These figures are illustrated b y weeks fo r the y ear 19 2 2 , and thus fa r in 1 9 2 3 in the follow ing diagram . r’ER CENT. Price indices of 20 Basic Commodities in the United States and England, and Dept, of Labor index for the United States brought to date by Irving Fisher’s index for 200 commodities. . (1913 = 100 per cent.) R etail prices, as reflected in the cost of livin g index number of the N ational Ind u strial Conference B o ard showed p ra ctica lly no change between December 1 5 and Ja n u a r y 1 5 . A slight increase in the p rice of clothing w as offset by a slight decrease in the p rice of food. Wages and Employment Volume of circulation of paper currency in three countries com pared with the 1920 average Gold M ov+rn n ? Tn" 1inl,ir amounted to $8,470,000, the l a r ^ e s ^ H K t t S p i i since October 19 2 2 . O f the total, about $ 6 ,0 0 0 ,u H ^ P R t tip p e d to India. Total gold im ports amountingM|M>32,820,000 w ere also larger than fo r some months past and the excess of im ports was $24,350,000 , about the same as in December. Commodity Prices Both in the U nited States and foreign countries the tendency of commodity prices w as up w ard du ring the month of Ja n u a r y and the early weeks o f F e b ru a ry . This movement w as especially m arked in the case of F re n ch prices, the index fo r which rose n early 7 per cent, in Ja n u a r y to the highest since J a n u a r y 1 9 2 1 . The Departm ent of L a b o r index num ber of wholesale prices fo r the U nited States w as at the same level in J a n u a r y as in D ecem ber; increases in seven o f the groups of commodities were offset b y decreases in the prices of certain fa rm products and foods. E a r l y in F e b ru a ry Irv in g F is h e r ’s w eekly index number, which includes m any of the same commodities as the D epartm ent of Labor index number and is computed b y a parallel method showed an increase to 1 6 4 from the level of 1 5 9 in Ja n u a r y . Th is b a n k ’s index of 20 basic commodities in W a g e rates continued to advance du rin g Ja n u a r y and F e b ru a ry . A tabulation b y the N ational In dustrial Conference B o ard fo r the U nited States shows 4 2 in stances of w age increases and no reported decreases be tween Ja n u a r y 1 5 and F e b ru a ry 14 . Th is is the largest number of increases reported since October. There w as little change between Decem ber 1 5 and Ja n u a r y 1 5 in the num ber o f workers em ployed in the factories o f this State. Increases in some industries were offset b y seasonal decreases in others. The largest in creases were in clothing and shoe factories, in textile mills and in the m etal trades. Em ploym ent agencies in this district report a con tinued h eavy demand fo r unskilled labor and fo r facto ry workers. There has also been a considerable increase in the calls fo r office workers, p a rticu la rly stenographers. One agency reports 2 5 p er cent, more calls fo r office workers than in December. A n o th er agen cy estimates that the current h irin g rate o f w ages fo r stenographers is now 5 to 1 2 per cent, higher than a y e a r ago. Production of Basic Commodities A higher rate of operations in the iron and steel in d u stry and the textile in d ustry, the larg e r production of coal, and increases in the production of a number of other basic commodities resulted in an increase o f 6 points in the index of production prepared b y the F e d eral Reserve B o ard from the figure of 1 1 5 in December to 1 2 1 in Ja n u a r y . J a n u a r y production of iron and steel w as the largest for a single month since 19 2 0 , and in the textile in d u stry production w as at a rate only sligh tly exceeded in an y previous month. MONTHLY 6 R E V IE W , M A R C H Th e increases in production in the past fe w months have brought the rate of output in a considerable num ber of industries p ra ctica lly even w ith, if not ahead of, all previous high figures. The follow ing table makes a com parison between the high points of production reached in recent months and previous high figures. The commodities are arran ged in order, w ith those com par ing most closely w ith previous records at the top. Previous high Unit Commodity Long tons Million Thous. Gal. Thous. Barrels Thous. Barrels Cement............ Thous. lbs. Wool cons.......... Running bales Cotton cons....... Thous. tons Paper, Total.. . . Thous. gr. tons Steel ingot......... Short tons Zinc.................... Thous. sht. tons Anthracite coal.. Long tons Tin deliveries. .. Thous. lbs. Tobacco cons. .. Thousand Cigars................. Thous. tons Wool pulp.......... Swine slaughtered.. Thous. head Thous. sht. tons Bituminous coal.. Million ft. Lumber.............. Thous. gr. tons Pig iron................ Cattle and Calves Thous. head slaughtered. . . . Thous. barrels Wheat flour......... Sheep slaughtered.. Thous. head Copper, U. S. mine Thous. lbs. Sugar meltings.. Cigarettes.......... Gasoline............. Petroleum.......... High Pro in 1922-23 duction Date 456,300 5,135 465,788 41,985 10,506 74,672 615,412 659 3,352 48,256 9,382 7,177 41,486 872,596 364 5,846 56,243 1,553 3,883 Mar. 1921 Aug. 1921 Oct. 1920 May 1921 Oct. 1921 May 1918 May 1917 July 1920 Oct. 1918 Mar. 1920 Mar. 1918 Jan.1917 Oct. 1917 Oct. 1917 May 1920 Jan.1919 Oct. 1919 May 1917 Dec. 1917 1,557 1,267 13,581 17,064 1,514 1,028 110,589 185,525 Oct. 1918 Dec. 1917 Oct. 1913 Mar. 1918 581,000 6,375 569,711 50,137 12,287 77,685e 610,375 644 3,252 46,317 8,757 6,625 38,021 791,037 332 5,201 50,123 1,324 3,230 Per cent, of presen t to past high 127 124 122 119 117 104 99 98 97 96 93 92 92 91 91 89 89 85 83 1, 1923 Industrial Recovery Abroad It has been the common im pression that this country has been almost unique in the extent of recovery in busi ness a ctiv ity which has taken place since 1 9 2 1 , and it a p pears to be commonly believed that there has been little, if any, recovery in the E u ro p ean countries. F ig u re s are not available to make possible a n y ex haustive measurement of E u ro p ean conditions such as is now possible in this country, w ith the w ealth o f statis tics appearing curren tly. A few k ey figures, however, are available and they are presented in the accom pany ing table. P ig iron and coal production are so in terre lated w ith all typ es of in d u stry that th ey u su ally reflect rather closely the status of a c o u n try ’s industrial a ctiv ity. The tonnage o f ships cleared is moreover an ex cellent measure of the movement o f foreign trade. The figures fo r these three facto rs are shown in the follow ing table as percentages o f the figures fo r the y e a r 1 9 1 3 . I t is clear that in these factors at least the recovery in 19 2 2 , as com pared w ith 1 9 2 1 , has been p ractically, if not quite, as great in E n g la n d and F r a n c e as in this country, although current levels of a ctiv ity are on the whole low er in relation to 1 9 1 3 than they are in the U nited States. A num ber o f the figures fo r 1 9 2 2 are estimated on the basis o f reports fo r 10 or 1 1 months. 81 80 1913 1920 100 100 100 119 78 66a 54 26 66a 87 47 95a + + + 61 86 44 100 100 100 119 80 78a 87 57 85a 85 86 94a + + 2 51 11 100 100 100 126 54 65 + + + 3 63 22 1921 1922 68 60 Pig Iron Production United States.................. e Estimated. Bituminous Coal Production The accom panying diagram compares the latest avail able figures fo r production of basic commodities w ith computed norm al production, taking into consideration the usual year-to-year grow th and seasonal fluctuations. I t is clear th at at present production is on the average considerably above computed normal. cement WOOL CONSUMPT'N T IN DE LIVE RIE S P ETR O LEU M Per cent. Change 1921 to 1922 United States.................. England........................... Tonnage of Ships Cleared United States.................. England........................... 116 54 83 120 88 101 a—Including Alsace-Lorraine. Supplem enting these figures for the U nited States, E n g lan d and F ran ce , a table prepared b y E . S . G regg, of the D epartm ent of Commerce, indicates a substantial reduction since last y e a r in the amount of shipping ton nage idle in the p rin cip al m aritim e countries of the world. The total shows a reduction of about 2,000,000 tons du ring the year. The U nited States is almost the only country showing no reduction in ship tonnage idle. SUG AR. (In thousands of gross tons) ANTHRACITE COAL P IG IRO N COTTON CONSUMPT’N PAPER STEEL INGOTS MEAT SLAUGHTER'D WH EA T FLOUR WOOD PULP COPPER TOBACCO CONSUMPTK BITUMINOUS COAL Z IN C Production of Basic Commodities in January, and the low point of 1921 compared with Normal Production. When January figures are not available those for December are used. Country United States: Shipping Board.................................. Shipping Board tankers.................... Privately owned................................. United Kingdom.................................... Jan. 1, 1922 July 1, 1922 Jan. 1, 1923 4,314 *214 781 1,961 1,085 *585 327 207 204 170 120 *275 161 *530 3,978 *214 523 1,667 1,200 585 330 112 114 100 79 *275 33 530 4,411 214 703 1,010 730 472 330 53 22 116 99 275 10,934 9,740 8,955 ♦— Interpolated from best available data. 520 7 F E D E R A L R E SE R V E AG EN T A T N E W YO RK T h e available figures indicate that the reduction in idle tonnage has reflected a corresponding increase in the amount of ocean-borne traffic. T h e h eavy traffic accompanies exceptionally low freigh t rates and small shipping profits. Foreign Trade Total shipments of m erchandise from the United States in Ja n u a r y , valued at $339,000,000, were about $5,4 25,0 0 0 less than in December, but 20 per cent, greater than those o f Ja n u a r y a y e a r ago and 66 per cent, greater than those of J a n u a r y 1 9 1 4 . The Departm ent of Commerce also published du ring the month figures fo r the im ports in November, the sec ond fu ll month under the new ta riff rates. These amounted to $294,000,000, an increase of $18,000,000 over the October figure but about $4,500,000 less than in September, when im ports were un usually large in antici pation of the new tariff rates. months. Increasing sales have fu lly kept pace with the somewhat free r p lacin g of advance orders. The dollar value of J a n u a r y sales w as 1 0 per cent, above that of J a n u a r y a y e a r ago. Som e department store executives are of the opinion that prices at present are sligh tly above those o f a y e a r a g o ; others believe that there has been no change or that prices today are a little below those o f Ja n u a r y a y e a r ago. Because of the wide v a rie ty of articles handled b y the departm ent stores it is difficult to estimate the relationship o f prices this y e a r to those o f F e b r u a r y 19 2 2 . Retailers assert that the price advances which have occurred in whole sale m arkets have not been fu lly reflected in the retail field. R etail prices are more stable and seldom go as high as wholesale quotations. F e b ru a ry sales of fu rn itu re have been large, p a rtly because of the construction of m an y new homes. M ail order sales in J a n u a r y w ere 36 per cent, above those of Ja n u a r y 19 2 2 , about the same increase as shown in December over December 1 9 2 1 . Wholesale Trade January Sales (In Percentages) W holesale trade in Ja n u a r y , as shown b y sales reports in dollars from dealers in ten chief commodities, was about 2 3 per cent, above sales in Ja n u a r y a y e a r ago. Ja n u a r y sales in all lines were larger than those of a yea r ago. The largest gain w as in the distribution of machine tools, m ainly due to b u yin g b y railroads and railroad equipment plants. H a rd w a re sales w ere about 40 per cent, above those of last year, a reflection of the large amount of new construction work now under w ay. The figures are shown in detail in the table that follows. January N et Sales (In percentages) Commodity Machine Tools................... Diamonds........................... Hardware............................ Shoes................................... Jewelry................................ Groceries............................. Clothing.............................. (a) Men’s ........................ (b) Women’s................... Dry Goods.......................... Drugs................................... Stationery........................... Total (Weighted)............... 1919 1920 1921 1922 1923 646 274 151 120 143 129 106 131 90 89 97 118 113 599 308 190 204 297 174 154 158 150 171 114 130 168 322 100 135 93 112 110 106 76 126 76 91 133 103 1Q0 100 100 100 100 100 100 100 100 100 100 100 100 292 160 139 133 132 124 121 123 120 118 117 113 123 Department Store Business The annual inventories of the departm ent stores of this district taken recently, showed that as a result of active C hristm as business and Ja n u a r y clearance sales stocks were reduced to the lowest point since a y e a r ago. Th e ratio o f stock to sales considering the seasonal changes is now as low as at a n y time in the last 1 8 Stock on Hand, Feb. 1 (In Percentages) 1919 1920 1921 1922 1923 1919 1920 1921 1922 1923 All Dept. Stores.. Newark................ 78 78 84 76 77 81 88 Elsewhere in 2nd 78 74 Apparel Stores. .. Mail Ord. Houses. 131 113 117 113 108 103 114 142 108 108 119 101 113 107 117 100 100 100 100 100 100 100 110 111 110 113 97 102 113 77 75 87 78 84 85 113 111 110 122 124 128 115 115 97 95 106 100 127 104 95 100 100 100 100 100 100 100 101 101 99 109 93 88 97 109 93 182 103 111 105 100 100 100 106 107 136 76 62 ** 94 101 ** 88 89 ** 100 100 ** 101 107 ** Chain Store Sales The large distribution of merchandise, reflected in de partm ent store reports, is also evident in sales figures submitted b y chain stores. Sales o f apparel were n early 30 p er cent, larger than a y e a r ago, w hile sales b y five and ten cent stores and b y gro cery stores show substan tial advances. Th ere were sm aller gains in sales of drugs, shoes and tobacco. The num ber of p airs of shoes sold b y the reporting firm s increased 7 .7 p er cent, from Ja n u a r y 1 9 2 2 to J a n u a r y of this y e a r and the average price p er p a ir declined 2.9 per cent, from $ 3 .5 0 in Ja n u a r y a y e a r ago to $ 3 .4 0 this year. D etailed figured are shown in the follow ing table. Number of Stores Type of Store Jan. 1922 Jan. 1923 388 7,082 1,733 281 200 Cigar.................. 2,230 Total.......... 11,914 454 9,596 1,761 289 228 2,754 15,082 Apparel.............. Grocery.............. JANUARY NET SALES (In Percentages) Per cent. Change in Sales per Store, Jan. 1922 1919 1920 1921 1922 1923 to Jan. 1923 57 70 74 83 84 67 71 77 96 92 102 113 96 95 116 87 91 101 109 108 94 100 100 100 100 100 100 100 129 118 123 106 105 104 lli -f + + - 10.4 12.6 20.6 2.8 8.1 15.7 7.2 B u s in e s s P r o fits T A T I S T I C S of production, sales, and shipments w hich ap pear curren tly furn ish a fa ir ly precise m easure of the extent of the increase in business a ctiv ity w hich has taken place in the past y e a r and a half. N o accurate measure exists, however, fo r th at even more im portant aspect of business, the amount of net profits. In order to secure an approxim ate measure of the trend of profits this bank has tabulated, as they have been published, the statements of net profits fo r the ye a r 1 9 2 2 of 1 2 2 concerns engaged in production, wholesale and retail trade, and public service. S The results of this tabulation are shown below by 10 separate groups and in the aggregate. There is also shown the net operating income of the 1 9 3 Class I railroads. In each case 1 9 1 9 figures are taken as 10 0 per cent. I n every group 1 9 2 2 net profits were larger than net profits in 1 9 2 1 , but there is large variation between the different groups in the amounts of increase which they show. In 4 of the 10 groups, and in the case of the ra il roads as well, 1 9 2 2 net profits were equal to, or larger than those of 1 9 1 9 . The aggregate figures fo r the 1 0 groups, however, show 19 2 2 figures considerably below those fo r either 1 9 1 9 or 19 20 , reflecting reduced earnings in the steel and other metal industries. In general, the figures show that 1 9 2 2 net profits were highest in rela tion to 1 9 19 , in those industries which deal most directly with the in dividual consumer. Th is is true in the cases of food and food products, public utilities, tobacco, and clothing. On the other hand, in those groups in which production is directed to su p p lyin g in d u stry rather than the final consumer, profits in 1 9 2 2 lagged con siderably behind those in 1 9 1 9 or 19 20 . The railroads show consistent gains since the y e a r 19 20 , but even so the percentage of net operating income to p ro p erty valuation continues to be less than the 5 % p er cent, specified in the law . FOOD y FOOD PRODUCTS ll.l I, '19 '20 '21 22 19 '20 '21 '22 MISCL METAL PRODUCTS TOBACCO '19 *20 '21 MOTORS & ACCESSORIES STORES '22 19 '20 2.1 '22 in 19 22 A fu rth er reflection of changing business conditions is found in the number of concerns which reported deficits. O f the 1 2 2 concerns reported, the number showing deficits in each y e a r w ere as fo llo w s: 19 19 5 1 9 2 1 ............................. 3 4 19 2 0 9 19 2 2 ............................. 1 8 Th e dollar figures upon which the diagram is based are shown in the follow ing table, together w ith the num ber of concerns included in each classification. U nder the heading “ stores ” are listed m ail order houses and other m ercantile establishments. In ta k in g .a total, the dollar figures in each group have been added without an y attem pt to w eight the figures. I t should be borne in mind in interpreting these data that th ey are sim ply fo r a group of concerns figures fo r which were available and are not necessarily typ ical o f all the concerns which deal in the products represented. In a few cases where it has been necessary, fiscal years not corresponding exactly w ith the calendar years have been used. Com putations o f net profits have been before d ivi dends, but a fte r all fixed charges and ta x deductions. (Thousands of Dollars) No. of Corpo rations 1919 1920 1921 15 7 11 8 24 14 9 10 51,501 41,447 53,767 10,851 59,970 140,626 29,118 24,996 55,255 16,658 25,757 7,544 67,872 176,661 30,822 22,038 10,270 *9,938 *23,576 959 71,513 50,466 31,007 5,281 54,408 40,752 36,408 2,313 97,222 62,738 39,902 15,228 12 12 28,193 36,952 10,312 36,913 13,371 *13,025 28,670 17,175 Total 10 Groups................... 122 477,421 449,832 136,328 394,816 Class I RR’s ............................ 193 516,290 58,152 615,946 776,421 Group Food and Food Products........ Motors and Accessories.......... Miscellaneous Metals and Oils. Public Utilities......................... Steel and Railroad Equipment. Miscellaneous Metal Products. Clothing (includ. Leather and Miscellaneous Industrials........ ^Deficit. M IS C L M ETALS & O IL 5 ll.l ll.. 19 20 21 22 CLOTHING IN C .L E A T H E R & T E X T IL E S i .i 19 '20 21 22 1922 19 20 21 22 MISCL INDUSTRIALS ii i 19 '20 21 22 PUBLIC UTILITIES 19 20 21 STEEL & R R EQUIPMENT 22 TOTAL TEN GROUPS '20 '21 '42 19 '20 21 22 C LA 5SI RAILROADS 19 '20 '21 '22 Annual Net Profits of 122 Manufacturing and Merchandising Concerns and of the Class I Railroads (1919 profits = 100 per cent.)
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