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MONTHLY REVIEW
o f C r e d it a n d
S e c o n d

B u s in e s s

F e d e r a l

M o n e y M a r k e t in F e b r u a r y
Conditions in the New York money market during the
past month have been, on the whole, slightly firmer than
in January. The large excess of bank reserves over
requirements which persisted during most of January
was much reduced and at times was replaced by a short­
age, making necessary occasional recourse to the Reserve
Bank. This change in conditions reflected partly a small
increase in the demand for currency, but more largely a
further retirement of Federal Reserve credit. Accept­
ance holdings of the Reserve Banks declined slightly
further during the first half of February; Government
security holdings were reduced slightly; and discounts
for member banks were reduced somewhat further to the
smallest volume since last October. Gold imports con­
tinued, though in reduced volume.
There has been no indication as yet of an unusual de­
mand for funds for business purposes such as would
materially affect conditions in the money market.

Cur­

rency requirements, after reaching the usual low point
at the end of January, have shown approximately the
usual seasonal expansion, but loans of reporting member
BILLIONS OF DOLLARS
9.5r

BILLIONS OF DOLLARS
10 r

A

75

J

>

6.51

1
\

SECURITNf LOANS
i i i ... ---- 1
---^
I . i j ._.J
1929
1930
1931




March 1,1931

banks other than security loans, which reflect largely
short-term commercial borrowing, have not shown the
tendency toward expansion which in past years has fre­
quently appeared in February; in fact, during the past
month there has been a further substantial reduction in
such loans, largely caused, however, by a decline in the
acceptance holdings of New York City banks, which are
included in this classification.
The demand for funds on the part of business organi­
zations apparently continues to be chiefly a demand for
capital. New security issues in February were not large,
due to unsettlement in the market in the face of prospec­
tive Treasury financing for a payment to veterans.
There were indications that the volume of new bond
offerings would have been materially larger, had condi­
tions in the bond market been such as to facilitate their
absorption. The limited demand by business for bank
loans and the ample supply of funds are reflected in the
changes in the loans and investments of reporting mem­
ber banks which are charted below. During February
the investments of banks, which include a substantial
proportion of United States Government obligations and
a variety of other bonds and notes, many of them short­

A

8.5

D is tr ic t

Federal E eserve Bank, N ew York

Federal E eserve A gen t

6.5

R e s e r v e

C o n d itio n s

5.5

A L L OTK ER LOANS,
1
~ . I ... .1 -I.. Jf i i i l . 1
v
1930
1929
1931

4.5

INVESTM : n t s
i i i I 1 1 1
1929
1930

Loans on Securities, All Other Loans, and Investments of Weekly Reporting Member Banks
(Monthly averages of weekly data; February figures preliminary)

------ L_.yW

1931

18

MONTHLY REVIEW, MARCH 1, 1931

term, increased about $325,000,000, making a total in­
crease since the low point of October 1929 of about
$1,700,000,000. During approximately the same period,
the 4‘ all other” loans which include short-term commer­
cial borrowing have been reduced about $1,600,000,000.
The security loans of the reporting banks also showed
a further slight reduction during February to the small­
est volume since the early part of 1929, notwithstanding
some increase in the loans of these banks to security
brokers and dealers during the month. The total security
loans of the reporting banks have been reduced approxi­
mately $1,300,000,000 since last June, although security
brokers and dealers now receive a larger proportion of
their funds from these banks than at any previous time
in recent years.
The total volume of credit extended by these banks
which are located in the principal cities has shown
little net increase during the past two years, and in
the same period there has been a substantial reduction
in the loans and investments of banks in smaller locali­
ties throughout the country. Consequently, the total
volume of bank credit extended by all banks of the coun­
try is estimated by the Federal Reserve Board to have
been approximately $3,000,000,000 less at the end of
December 1930 than in October 1929.
M o n ey R ates

Call loan rates were virtually unchanged during Feb­
ruary, but rates charged for time loans on Stock Ex­
change collateral were advanced slightly near the end of
the month. Acceptance rates, after a decline early in the
month, advanced again to the same levels as at the end
of January, and yields on short-term Government’s rose
somewhat, reflecting in part the weakness in prices of
long-term Government obligations which has accompa­
nied the discussions concerning the Treasury financing
that will be required as the result of increased loans to
war veterans. Contrary to the general tendency, com­
mercial paper rates declined slightly further during
February.
Money Rates at New York
Feb. 28, 1930 Jan. 30,1931 Feb. 27, 1931
Stock Exchange call loans......................
Stock Exchange 90 day loans................
Prime commercial paper........................
Bills—90 day unindorsed......................
Customers’ rates on commercial loans..
Treasury certificates
Maturing June 15 (yield)..................
Maturing September 15 (yield)........
Federal Reserve Bank of New York re­
discount rate.......................................
Federal Reserve Bank of New York
buying rate for 90 day indorsed bills
* For preceding week
middle of month

f t Nominal

*1M
ttlfc -2

*4-4 X
4%
4 H -4 H
3%

2H- 2H
IX

t3.65

t3.81

2.98
3.24

1.10
1.19

1.21
1.32

t5.07

*1X

tt2-2tf
2X
IX

4

2

2

3H

IX

IX

f Average rate of leading banks at

B il l M a r k e t

Holdings of acceptances by the accepting banks and
bankers that report to the American Acceptance Council




MILLIONS OF DOLLARS

j------------------------ -

1

i FOREIGN
1
ci
ORRESPONDENTS
^>F F R. BANKS
T

1
F D R S BANKSE. E.
OW ACCOUNT
N

I

H

V
1

\

I

V

/

/

]r J j
\1 -

)

I
■

i

I
[pTING INSTITUTIOI
i ...

i

i
i
1
1
1
J .....J...J .... 1!
I— J .....1 ....
1928
1929
1930
1931
Holdings of Acceptances by Federal Reserve Banks for Own
Account, Amount Held by Federal Reserve Banks for Foreign
Correspondents, and Holdings by Accepting Banks and Bankers

increased $200,000,000 during January, following a re­
duction of $122,000,000 in the final month of 1930. Their
holdings on January 31 reached $571,000,000, by far the
largest amount of bills these banks have ever held as in­
vestments. As the accompanying diagram shows, this
increase was accompanied by a large reduction in the
Reserve Banks’ bill holdings for their own account.
The volume of dollar acceptances outstanding showed
a seasonal decline in January, and at the end of that
month the total of $1,520,000,000 was $36,000,000 smaller
than in December 1930 and $173,000,000 below the Jan­
uary 1930 figure. Decreases in all of the principal classes
of acceptances contributed to the decline from December
and only acceptances based on goods stored in or shipped
between foreign countries remained larger than a year
ago.
Due to the continued withholding of bills from the
discount market by the accepting institutions during the
first few days of February, dealers’ portfolios remained
at a low figure, and a Ys per cent reduction in open mar­
ket rates was effected, thereby canceling the advance of
late January. In a further effort to attract bills with
which to fill investment orders, another reduction of Ys
per cent in rates was made by all dealers on February 6,
and at this level— 1 % per cent for unindorsed bills of 90
day maturity— bill rates reached a new low yield in the
history of the bill market in this country.
The temporary appearance around the middle of the
month of a slightly firmer money situation, as a result
of the absorption of the excess reserves which the New
York City banks had possessed during most of January,
caused these banks to dispose of some of the large volume
of bills held at the end of January, and dealers’ port­
folios rose moderately. The dealers then reversed their
rate position by raising all maturities Ys per cent, and,

FEDERAL RESERVE AGENT AT NEW YORK

when a considerable further increase in their portfolios
occurred, they raised their rates by another Ys to the
level prevailing at the opening of the month, which was
more nearly in accord with the Federal Reserve buying
rate. In addition to the increased sales of bills to the
dealers, the banks also offered bills from their portfolios
to the Reserve Bank for the purpose of retiring tem­
porary borrowings which had been incurred in balanc­
ing their reserve position. During the latter part of the
month, dealers’ portfolios were somewhat reduced, due
to an increased investment demand for bills, principally
foreign orders.
The Federal Reserve System’s portfolio of bills con­
tinued to decline through February 11, and, although
some increase occurred in the succeeding two weeks,
Reserve Bank holdings at the close of the month were
moderately lower than at the end of January.
C o m m e r c ia l P a p e r M a r k e t

The tendency in open market commercial paper rates
was gradually downward throughout February, with the
consequence that the prevailing rate for prime names
reached 2 % per cent shortly after the middle of the
month, as compared with 2 % -2 % per cent which was
quoted as the going range at the end of January. In
addition, some business was done at 2 % per cent and
certain names continued to sell at 2 % per cent. Bank
investment demand for paper throughout the country
continued to be active and was well in excess of the
supply of new paper that came into dealers’ portfolios
from commercial and industrial concerns.
Reflecting the limited volume of paper available in
the market, the amount outstanding through the 20 deal­
ers reporting to this bank declined 9 per cent further
during January. The January 31 outstandings of $327,000,000 were 19 per cent below the figure for the cor­
responding date in 1930, the first year-to-year decline to
be shown in twelve months. Not since 1921 have Jan­
uary outstandings failed to show some increase over the
figure for December, which usually marks the seasonal
low point.

In order to meet these requirements, the Treasury has
announced the offering of a total of $1,400,000,000 of
new securities.
These include approximately $500,000,000 of 3 % per cent Treasury bonds, due March 15,
1943, but redeemable on or after March 15, 1941;
$600,000,000 of one-year Treasury certificates of indebt­
edness, bearing 2 per cent coupons; and $300,000,000
six-months Treasury certificates, yielding 1 y 2 per cent.
The offering is thus adjusted to meet the varying needs
of investors as to types and maturities of securities. The
announcement states that subscribers offering Treasury
notes which have been called for redemption on March
16 in payment for the bonds and one-year certificates
will be given preferred allotment.

S e c u r ity M a r k e ts

Throughout the month of February the stock market
held rather consistently firm and for part of the time
prices exhibited distinct strength. Around the end of
January stock price averages were about 10 per cent
above the mid-December low, but by the close of Feb­
ruary this recovery had been increased to about 25 per
cent, and prices were the highest since last October. As
is shown in the accompanying diagram, the February
advance was general; industrial and public utility shares
rose about 11 and 13 per cent, respectively, and railroad
stocks, which had made a considerable recovery in Janu­
ary, advanced slightly in February. More widespread in­
terest in the stock market also appeared in the larger
turnover of shares on the New York Stock Exchange.
After the first week of the month trading averaged
3,800,000 shares and on several days was well in excess
of 4 million shares.
Domestic corporation bond prices moved within nar­
row limits during February, following the check to the
PRICE INDEX

T r e a s u r y F in a n c in g in M a r c h

The volume of funds to be raised by the United States
Government on March 16 is unusually large, due to the
fact $1,100,000,0001 of 3y2 per cent Treasury notes,
Series A and B— 1930-1932, have been called for pay­
ment on that date, together with the prospect of in­
creased disbursements on account of loans to World War
veterans against their adjusted service certificates, and
also the expectation of reduced receipts from taxes on
1930 income.




19

Price Movements of Industrial, Railroad, and Public Utility Stocks
(Standard Statistics Company weekly indexes)

20

MONTHLY REVIEW, MARCH 1, 1931

upward movement that occurred during the closing days
of January. The tendency was gradually upward, how­
ever, and an average advance of % of a point carried the
general level of corporate bond prices to a point about
half-way between the high of last September and the
lowest point reached in December. Foreign bond quota­
tions varied but little during the month, shewing no de­
cided trend in either direction.
The United States Government bond market again was
subject to unsettling influences. When it appeared early
in the month that veterans’ bonus legislation which
would necessitate a very large flotation of bonds by the
Treasury would probably not be enacted, United States
Government bonds advanced vigorously and by the 10th
of the month had recovered nearly three-fourths of the
loss sustained in the preceding week. Shortly afterward,
prices began to decline again, but the drop was more
gradual than in the final week of January, since the
veterans’ relief measure then under discussion in Con­
gress involved a smaller expenditure by the Treasury
than the initial proposals. As the net result of these
movements, the average price of the eight outstanding
Government bonds stood near the end of the month
about 1 % points below the highest level of this year, and
about half a point above the lowest level reached in
February.
N ew

F in a n c in g

The total volume of new security issues floated during
January reached $606,000,000, the largest amount since
last June. Of this total, $416,000,000 represented new
capital, and $190,000,000 was for refunding purposes.
Refunding operations have not been conducted on as
large a scale since September 1929. In the new capital
issues, domestic corporate offerings showed a further
substantial increase, but issues by States and municipali­
ties fell to an unusually small amount; consequently,
total domestic offerings declined slightly from December
to January, but the volume remained above the com­
paratively low levels of the last five months of 1930,
as the accompanying diagram indicates.
MILLIONS OF D O LLA RS
1 5 0 0 ---------------

1000

500

O
1928
1 92 9
1930
1931
Offerings of Securities to Provide New Capital (Commercial and
Financial Chronicle figures for domestic issues, excluding
financing by investment trusts, etc.; Federal Reserve Bank
of New York data for foreign issues)




Flotations of foreign securities in this market, also
shown in the diagram, were larger in January than in
any month since July. The data covering foreign issues
include financing by American corporations in cases
where the funds were for use abroad, but exclude private
banking credits placed in this country on behalf of for­
eign borrowers where no offering of securities was
involved.
The total of new securities offered during February
was well below the January volume, both in the domestic
and foreign categories. Public utility and State and
municipal financing constituted the larger part of the
domestic issues. Railroad issues were very small, and,
as for some months past, there appeared to be little de­
mand for new capital on the part of industrial com­
panies. The small volume of foreign issues was com­
posed entirely of Canadian financing.
F o r e ig n E x c h a n g e

The movement of the major exchanges in February
was irregular and divergent. Sterling firmed up to
$4.86 9/32 on the 7th, dipped gradually to $4.85 9/16 on
the 20th, and thereafter firmed again around the monthend. French francs were irregularly strong until the
9th, but weaker through the rest of the month. The
reichsmark moved through a narrow range and was per­
sistently weak at 5 to 6 points below its parity of $0.2382.
The Swiss franc, which for twelve months had been
above par and frequently close to the gold export point
from this country, weakened in the second half of Feb­
ruary and declined to $0.1925% on the 26th. Another
currency which declined during the month was the
guilder, which sold at $0.4010% on the 26th, showing a
loss of seven and a half points for the month. The Scan­
dinavian exchanges varied; rates on Norway and Den­
mark firmed slightly, but the Swedish rate around the
month-end was two or three points below its high of
$0.2679 ^ on the 7th. All three were below par. The
belga remained above par throughout the month. The
peseta slumped to $0.0969 on the 13th, but recovered
steadily thereafter to $0.1072 on the 24th, its highest
quotation since mid-December. Canadian dollars gained
a little, closing at about 1/64 discount. The yen was
steady within the narrow range of $0.4944 to $0.4946.
The Brazilian milreis was off from $0.0880 to $0.0850,
but the Argentine peso recovered to $0.7518 from a midJanuary low of $0.6757.
G o ld

M ovem en t

Receipts from South America constituted the bulk of
the gold imported at the Port of New York during Feb­
ruary, $9,300,000 coming from Argentina and $1,100,000 from Uruguay. A t San Francisco, $2,700,000 was
received from China. There was in addition a gain of
$2,500,000 to the country's gold stock through a decrease
in gold held under earmark for foreign account. As
exports were negligible, a preliminary estimate indicates
a gain of about $16,500,000 for the month.
French withdrawals of gold at the Bank of England
ceased during February, and the Bank was able to show
an increase in its gold holdings due to the reported re­
ceipts of £750,000 from South Africa and £300,000 from

2
1

FEDERAL RESERVE AGENT AT NEW YORK

Brazil. Of the South African gold offered in the market
approximately £1,800,000 was obtained by France and
£700,000 by Belgium. About 65,000,000 reichsmarks of
gold were received by Germany from Russia during the
latter part of January and in February.

(Adjusted for seasonal variations and usual year-to-year growth)

Jan,

INDEX




INDEX

Jan.

62
62
74
73
55
89

55
57
69
81
54
119

57
59
64p
69
51
102

87
99

36
83

48
78

50p
79p

87
103
97
105
92

73
83
75
83
79

71
88
71
82
77

66p
91p
70
79p

89
75
104
107
101

71
62
115
95
75

68
58
111
98
77p

71
62p
101
88p
77p

90
92
93
99

89
97
114
90

90
91
74
96

92
92
72
89

108
77
100
98
102
99

Tin deliveries.............................................

83
54
84
81
83
81

81
51
88

81

87
80p

88

Automobiles

Passenger cars............................................
Motor trucks..............................................
Fuels

Bituminous coal.........................................
Anthracite coal..........................................
Petroleum, crude.......................................
Petroleum products...................................

An expansion in productive activity of at least sea­
sonal proportions was reported in several lines during
February. Steel ingot output rose to 52 per cent of the­
oretical capacity, as against 47 per cent at the end of
January, and production of cotton goods, anthracite coal,
and crude petroleum also showed increases from the
January level; output of bituminous coal, however,
declined.
In January the total volume of industrial production
showed an expansion of close to the usual proportions
from the low levels reached at the year-end. Among the
metal industries, output of both pig iron and of steel
increased slightly more than is usual for the month, so
that this bank’s seasonally adjusted indexes showed ad­
vances for the first time in a number of months, but
curtailment of output was general among the non-ferrous
metal producers. Following the sizable expansion of
automobile output in December, a further small increase
in output occurred in January, bringing the level of
activity in this industry well above its low point of last
autumn.
Production of bituminous coal declined sharply late
in January, so that the total output for the month was
lower than in December, in contrast to the usual seasonal
increase; crude petroleum output also was reduced, but
production of anthracite coal increased slightly. Textile
mills operated at somewhat higher levels than in Decem­
ber, although in the case of silk the increase was less
than seasonal. Output of other industries showed no con­
sistent change from December to January, after seasonal
adjustment.

Dcc.

94
91
92
79
83
84

Copper, U. S. mines..................................

P r o d u c tio n

Nov.

Metals

C e n tra l B a n k R a te C hanges
On February 6 the Bank of Sweden lowered its rate
from 3
to 3 per cent, the last previous change having
been a reduction from 4 to 3 % per cent on April 3, 1930.
On January 29 the rate of the National Bank of Bul­
garia was lowered from 10 to 9 per cent. This was the
first change made since July 2, 1929, when the rate was
moved upward from 9 to 10 per cent.

1931

1930

Textile and Leather Products

Cotton consumption.................................
Wool mill activity.....................................
Silk consumption.......................................
Leather, sole..............................................
Boots and shoes.........................................
Foods and Tobacco Products

Live stock slaughtered..............................
Wheat flour................................................
Sugar meltings, U.S. ports......................
Tobacco products......................................
Miscellaneous

Printing activity........................................
Paper, other than newsprint....................
Paper, newsprint.......................................

In d e x e s o f B u s in e s s A c t i v i t y
A few important indicators of business activity showed
signs of greater stability in January and the first part
of February. During most of January, merchandise and
miscellaneous car loadings continued, after seasonal ad­
justment, at the level that had generally prevailed since
early December, and in the first two weeks of February,
the seasonally adjusted figures averaged slightly higher
than in January. Average daily department store sales
declined slightly less than usual in January from the
December level, both in this district and in the country
as a whole, and preliminary indications were that there
was little change in this district during the early part
of February. The January indexes of building contract
awards, life insurance paid for, and advertising also
tended to advance somewhat.
IN D E X

IN D E X .

ii--------------------

;V 4
\

too

j

A
V
*

50

1

K
B U lL D ir M G
C O N T ft\C T $
.. .. i - i.. i ...1 1 .1.-

....

.

I

l,._1

A U T O h 1 0 B IL E S
1 1 1 1 I l
1
I

1929
1929
1930
1931
Production of Steel Ingots and Automobiles, Cotton Consumption, and Building Contract Awards,
Adjusted for Seasonal Variation and Year-to-Year Growth

1930

J.. .1

1931

!

MONTHLY REVIEW, MARCH 1, 1931

22
INDEX

Railroad Car Loadings of Merchandise and Miscellaneous Freight,
Adjusted for Seasonal Variation and Year-to-Year Growth

On the other hand, car loadings of bulk freight ex­
panded less than usually in January, and larger than
seasonal declines were shown in bank debits, security
trading, and postal receipts. The increase of new cor­
porate enterprises in New York State was less than the
usual December to January increase, and the number of
business failures rose to a level exceeding that of any
previously recorded January.
(Adjusted for seasonal variations and usual year-to-year growth)
1931

1930
Jan.

Nov.

Dec.

94
98
85
104
82

80
78
63
90
72

78
80
60
91
62

78
76
60p
78p

98
89
111
92

87
89
88
80

85
85
88
76

87
84
89
77

Bank debits, outside of New York City..
Bank debits, New York City...................
Velocity of bank deposits, outside of New
York City...............................................
Velocity of bank deposits, New York City
Shares sold on N. Y. Stock Exchange. . .
Postal receipts...........................................
Electric power............................................
Employment in the United States..........
Business failures........................................
Building contracts.....................................
New corporations formed in N. Y. State
Real estate transfers.................................

98
117

87
92

91
103

88
89

115
129
241
99
97
98
111
88
84
69

94
87
166
87
83
83
113
63
83
59

95
95
196
90
84p
82
123
62
80
60

97
83
159
88

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

174
227
170

161
219
161

158
219
159

relative to the computed trend since 1921. The moder­
ately favorable showing of January was due to an in­
crease in public works and utilities undertakings, as
both residential and non-residential building contracts
declined from December to January. During the first
three weeks of February, more than a seasonal advance
in building contract awards was reported, chiefly as a
result of larger contracts for residential building work.
As compared with the level of a year previous, Jan­
uary contract awards continued to show a substantial
reduction; total contracts were down 30 per cent, and
public works and utilities and other non-residential work
were down more than that amount, but residential build­
ing showed a decline of only 18 per cent. Residential
building in recent months has been fluctuating at a low
level but in general the changes have been largely con­
fined to seasonal fluctuations, following a decline of more
than two years’ duration. Several of the districts from
which construction contract figures are collected by the
F. W . Dodge Corporation showed increases over the
totals reported in January 1930; these localities were
the Southern Michigan, Kansas City, New Orleans, and
St. Louis districts.
While the total volume of building contracts in Metro­
politan New York and vicinity continued to show a con­
siderable decline from the level of a year previous— a
reduction of nearly one-fourth in January— contracts for
residential work were approximately 20 per cent above
a year ago. Public works and utilities, on the other hand,
reversed the tendency of December and were 30 per
cent smaller than a year ago, and other non-residential
building contracts in this territory were 46 per cent be­
low the volume of January 1930.

157
216
158

Jan.

Primary Distribution

Car loadings, merchandise and misc........
Car loadings, other....................................
Exports.......................................................
Imports.......................................................
Panama Canal traffic................................
Distribution to Consumer

Department store sales, 2nd Dist............
Chain store sales, other than grocery.. . .
Life insurance paid for.............................
Advertising................................................

General Business Activity

p Preliminary

C o m m o d it y P ric e s
The tendency in commodity prices was predominantly
downward again during February, and the weekly
index shown in the accompanying diagram continued to
decline rather rapidly. Few important commodities
showed increases for the month as a whole. Raw cotton,
the most conspicuous exception, continued the advance
which began in December, and touched 11.35 cents a
pound, which is 1.90 cents above the low of the middle
of December.
PER CEN T

80
132
63
78

*1913 average=100

B u il d i n g
During January, the volume of building contracts
awarded in the 37 States included in the F. W . Dodge
Corporation survey was 9 per cent smaller than the
amount of work contracted for during December, but
as this decline was slightly less than the usual seasonal
contraction between these two months the index of build­
ing contracts computed by this bank advanced 1 point.
For the past three months this index has held within a
narrow range, although it has been at the lowest levels




Weekly Movements of General Commodity Prices (Index of the
National Fertilizer Association; 1926-28=: 100 per cent)

FEDERAL RESERVE AGENT AT NEW YORK

No significant change occurred in the price of wheat,
but most other important agricultural commodities de­
clined. Live stock generally showed marked weakness,
and the price of hogs reached a new low level for recent
years. Hides dropped 1 % cents further to 7 cents a
pound, or less than one-third of the peak price of 1929.
Silk reacted sharply, following its January gain, and
rubber, wool, corn, and sugar also showed declines for
the month as a whole; rubber equaled its record 1930
low, and wool and corn established new low levels for
many years.
Scrap steel dropped 50 cents a ton, thus canceling all
of the gain made just after the turn of the year, but
later recovered 25 cents; the Iron Age composite price
of pig iron receded further to $15.71 a ton, the lowest
figure since 1915. The non-ferrous metals declined early
in the month, but subsequently recovered slightly. Cop­
per equaled its previous low of 9 % cents, but in conse­
quence of a marked stimulation of foreign and domestic
buying at this level, recovered to 10% cents. Similarly,
the price of lead was reduced further to a new low
figure, 4.50 cents a pound, but subsequently recovered
to 4.60 cents. Silver dropped as low as 2 5% cents an
ounce, followed by an advance to 27% cents. Zinc re­
ceded to its previous low of 3.95 cents, but later recov­
ered somewhat; tin, on the other hand, showed a slight
upward tendency.
The wholesale commodity price index of the Bureau
of Labor Statistics declined in January to 77.0 per cent
of the 1926 average. This brought the total decrease since
the peak of July 1929 to 21 per cent.
F o r e ig n T r a d e
During January, the value of this country’s foreign
merchandise trade continued the downward course of
the past fifteen months, which, as the accompanying
diagram indicates, has been interrupted only by seasonal
increases in a few months. Compared with a year pre­
vious, both exports and imports showed slightly larger
percentage decreases than in any month during the past
year. Exports, valued at $250,000,000, and imports, at
$183,000,000, were 39 and 41 per cent, respectively, below
the levels of a year ago. The decline from December in
each case was about $25,000,000. In the case of exports,
this reduction was not much larger than the usual sea­
sonal movement, whereas in the case of imports the
decline was contrary to the seasonal tendency.
In general the heaviest percentage reductions in for­
eign trade values during January occurred in the raw
material group, which no doubt is partly explainable by
wider fluctuations in the prices of basic commodities than
in prices of finished or semi-finished products. Exports
of raw materials, including a large proportion of raw
cotton, totaled 44 per cent less than a year ago, and im­
ports of raw materials, chiefly raw silk and crude rubber,
were 45 per cent smaller. Partly and wholly manufac­
tured exports and imports continued to be more than
one-third smaller in value than last year.
The quantity of raw cotton shipped abroad was 28 per
cent smaller, and the value 57 per cent less, than in Janu­
ary 1930. Exports of grains decreased nearly 60 per cent
in volume and about two-thirds in dollar value. Quantity




23

MILLIONS OF DOLLARS

Foreign, Trade of the United States; Monthly Exports and
Imports of Merchandise

imports of crude rubber were 22 per cent less than a year
ago, but raw silk and coffee importations increased 14
and 13 per cent, respectively.
E m p lo y m e n t a n d W a g e s
The number of workers employed in factories, both
in New York State and in the country as a whole, showed
a further decline of more than seasonal proportions in
January, and reached a new low level for recent years.
Outside of factories, it appears that the situation also
was unfavorable, for weather conditions interfered with
out-of-door operations, and the United States Employ­
ment Service reported that there were large surpluses of
both skilled and unskilled workers.
The indications of data on the relative availability of
jobs were somewhat mixed. On the one hand, the rate of
voluntary labor turnover in factories, after reaching in
December a new low level for the twelve years for which
the figures are available, showed an unusually large in­
crease for January. On the other hand, the number of
persons who applied to the New York State Employment
Bureaus for work was larger in January than in Decem­
ber, while the number of orders for workers was smaller,
so that the ratio of applications to available jobs fell to
a new low level. In the first two weeks of February, this
ratio showed a small recovery, which was at least partly
of a seasonal nature.
Payroll and wage data indicate further reductions in
the income of industrial employees in January. Factory
payrolls in New York State dropped 4 per cent further,
whereas the average December to January decline in
past years has been a little over 1 per cent. Average
weekly earnings of factory employees declined to the
lowest level since 1923.
D e p a r t m e n t S to r e T r a d e
January sales of reporting department stores in this
district were 7.6 per cent smaller than in 1930. Sub­
stantial decreases in sales continued to be reported in
New York City, Buffalo, Syracuse, Bridgeport, Southern
New York State, Hudson River Valley, and the Capital
District, while the declines in sales in the other sections

24

MONTHLY REVIEW, MARCH 1, 1931

of this district were much smaller, ranging from 1 per
cent to 5 per cent. The leading apparel stores reported
sales 5 per cent below January 1930, as compared with
a decline of more than 8 per cent in December.
Stocks of merchandise on hand at the end of January,
valued at retail prices, were nearly 10 per cent below last
year, the largest reduction in a number of years. The
rate of collections on charge accounts during the month
was slightly lower in January 1930, but compared more
favorably with a year ago than in December.
Percentage
change
January 1931
compared with
January 1930
Locality
Net
sales

Per cent of
accounts
outstanding
December 31
collected in
January

Stock
on hand
end of
month

1930

1931

51.6
51.2
49.7
34.0
49.6
41.6
41.8

52.6
48.8
49.3
33.1
45.9
40.8
39.9

per cent decline compared with a year ago in January,
following an increase in December, and the sales of gro­
ceries were 14 per cent smaller than a year previous.
Wholesale diamond dealers reported January sales al­
most 50 per cent smaller than in 1930, and machine tool
orders, reported by the National Machine Tool Builders
Association, declined further to about one-third the vol­
ume of last year. Yardage sales of silk, reported by the
Silk Association of America, increased for the third
consecutive month; however, the increase in January
was comparatively small.
The value of stocks of merchandise held at the end of
January in all reporting lines, with the exception of
drugs, remained substantially smaller than a year ago.
Collections in January this year were only slightly
smaller than in 1930.

New York.......................................................
Buffalo............................................................
Rochester.......................................................
Syracuse..........................................................
Newark...........................................................
Bridgeport......................................................
Elsewhere.......................................................
Northern New York State.......................
Southern New York State........................
Hudson River Valley District..................
Capital District.........................................
Westchester District.................................

— 8.6
— 5.8
— 2.6
— 7.9
— 2.6
— 6.7
— 9.3
— 4.8
— 13.2
— 12.6
— 9.0
— 1.2

— 8.2
— 14.3
— 7.3
— 6.7
— 15.1
— 8.4
— 10.8

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

— 7.6

— 9.5

50.1

49.5

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

— 4.9

— 13.0

50.7

47.3

Net
sales
Men’s clothing..............
Cotton goods................

As the following table shows, the principal apparel de­
partments were among those showing the more favorable
comparisons of sales with those of a year ago, while the
furniture, home furnishings, and musical instrument
and radio departments were among those showing the
larger reductions in sales.
Net sales
percentage change
January 1931
compared with
January 1930
Toilet articles and drugs.....................
Toys and sporting goods.....................
Men’s and Boys’ wear.........................
Men’s furnishings................................
Woolen goods.......................................
Women’s and Misses’ ready-to-wear..
Women’s ready-to-wear accessories...
Hosiery.................................................
Linens and handkerchiefs....................
Silverware and jewelry........................
Cotton goods........................................
Luggage and other leather goods.......
Shoes.....................................................
Furniture..............................................
Silks and velvets..................................
Books and stationery..........................
Home furnishings.................................
Musical instruments and radio..........
Miscellaneous.......................................

Commodity

Stock on hand
percentage change
January 31, 1931
compared with
January 31, 1930

+10.9
+10.4
+ 4.1
+ 1.7
+ 1.6
— 0.7
— 1.1
— 1.2
— 1.4
— 3.8
— 4.7
— 7.8
— 8.3
— 9.6
— 9.9
— 10.7
— 11.5
— 51.3
— 15.4

— 7.0
— 7.1
— 14.1
— 15.9
— 31.8
— 21.3
— 11.0
— 19.1
+ 0.2
— 9.1
— 9.6
— 20.8
— 15.7
— 13.5
— 16.7
— 15.0
— 7.4
+ 9.0
— 15.4

Percentage
change
January 1931
compared with
December 1930

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

— 4.9
+ 13.2
— 42.8
+29.0*
— 30.7
+21.3
— 34.1
— 2.8
— 2.8
+ 3.7
—30.6
— 57.2

Percentage
change
January 1931
compared with
January 1930

Stock
end of
month

Net
sales

— 2.1

— 13.6
—44.2
+ 0.7 — 29.1
— 5.0* + 2.1*
+20.4 — 27.5
+ 0.7 — 6.4
+ 6.5 — 22.9
— 63.2
— 24.2
— 24.1
— *8‘.0 —48.4
— 10.5 — 35.4

Weighted average. . . — 4.8

Stock
end of
month

Per cent of
accounts
outstanding
December 31
<collected
in January

1930

1931

73.1
45.8
32.3
47.9
39.7
33.7
51.6

75.4
41.9
32.7
46.4
38.8
36.4
46.2

73.2
57.2
— 17.5 } 43.8
—30.4

7i'.i
53.9
} 37.6

52.9

51.7

— 17.5
— 35‘.1
— 15.3*
— 32.4
+29.8
— 14.0

— 25.2

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

C h a in S to r e T r a d e
Total sales in January of the reporting chain store
organizations were 1.3 per cent less than a year ago, the
smallest decrease since last September. The sales of ten
cent chain systems were 4 per cent larger than a year
previous, the first increase in sales since April. The daily
rate of sales of drug, shoe, and variety chains declined
considerably less from a year ago than in December,
while in groceries and candy the decreases in sales
showed no material change from December.
After allowing for the change in the number of stores
operated, ten cent chains were the only type of chain
stores that reported an increase; however, the average
decrease in sales per store of all reporting chain systems
showed the smallest decline since May 1930.
Percentage change January 1931
compared with January 1930

W h o le s a le T r a d e
The volume of January sales by wholesale dealers in
this district averaged 25 per cent below a year ago. The
sales of cotton goods, shoes, hardware, stationery, paper,
and jewelry continued to be substantially smaller than a
year previous, and the sales of men’s clothing showed the
largest decrease from a year previous during the period
covered by this bank’s records. Drug firms reported a 6




Type of store
Number
of
stores

Drug.............................................

Total.....................................

Total
sales

Sales
per
store

5.4
4.2
3.3
7.7
7.4
2.0

— 2.4
+ 4.3
— 12.0
— 14.1
— 4.0
— 26.8

— 7.4
+ 0.1
— 9.0
— 20.3
— 10.6
— 25.3

+ 4.9

— 1.3

— 6.0

+
+
—
+
+
—

FED ERAL RESERVE B A N K OF N E W YO R K
MONTHLY REVIEW, MARCH 1, 1931
B u s in e s s C o n d i t i o n s in t h e U n i t e d S t a t e s

(Summarized by the Federal Eeserve Board)

I N D USTRIAL activity increased in January by slightly less than the usual
seasonal amount, and factory employment and pay rolls declined. Money
rates in the open market declined further from the middle o f January to the
middle of February.
P roduction

Index Number of Production of Manufactures
and Minerals Combined, Adjusted for
Seasonal Variations (1923-25
average=100 per cent)

1927
1928
1929
1930
1931
Index Numbers of Factory Employment and
Payrolls, Without Adjustment for
Seasonal Variations (1923-25
average= 10 0 per cent)
B
ILLIO S OF DOLLARS
N

and

E mployment

The Board’s index of industrial production, which is adjusted for seasonal
variation, showed a decrease o f less than 1 per cent in January, compared
with declines o f 3 per cent in November and in December. Activity in the
steel industry, which was at a low level in December, increased during the
following month by considerably more than the usual seasonal amount; output
of automobiles, which had shown an unusual increase in December, increased
less in January than in the corresponding month o f other recent years. The
cotton and wool textile industries were more active in January, while the
output of copper, petroleum, and coal declined.
The number o f wage earners employed at factories was smaller in the pay
roll period ending nearest the 15th of January than in the preceding month,
reflecting in part extended year-end shut-downs. There were large declines in
employment at foundries and at establishments producing hosiery, women’s
clothing, lumber, brick, cement, and tobacco products; employment in the
m en’s clothing, leather, and agricultural implement industries increased some­
what more than usual for the season. Factory pay rolls were considerably
reduced in January.
Value of contracts awarded for residential building continued to decline
in January, according to the F. W. Dodge Corporation, while contracts for
public works and utilities increased. In the first half o f February the daily
average o f contracts awarded for residential building increased.
D istribution
Volume o f freight car loadings was reduced further in January, contrary
to the usual seasonal tendency, reflecting decreases in shipments o f coal, mer­
chandise, and miscellaneous freight. Department store sales, which always
show a sharp reduction from December to January, declined by less than the
estimated seasonal amount.
W holesale P rices
The general level o f wholesale commodity prices declined further by
2 per cent in January, according to the Bureau o f Labor Statistics. Prices of
many leading agricultural products, and o f copper, and silver decreased sub­
stantially, while prices o f cotton and silk advanced. In the first half of
February the price o f cotton continued to rise and in the middle of the month
copper also advanced, while the price o f silver declined to new low levels and
prices o f livestock continued to decrease.

1927
1928
1929
1930
193«
Monthly Averages of Weekly Figures for Re­
porting Member Banks in Leading Cities
(Latest figures are averages of first
2 weeks of February)
P RC N
E ET

B ank Credit
Volume o f credit at member banks in leading cities showed little change
from January 14 to February 11, further declines o f $200,000,000 in loans on
securities and of $115,000,000 in all other loans being largely offset by an
increase of $310,000,000 in the banks’ holdings o f investments.
In the first three weeks o f February bank suspensions declined sharply
and a number o f banks, previously suspended, resumed operations.
Volume of Eeserve Bank credit outstanding decreased by $175,000,000
between the weeks ended January 17 and February 14, reflecting a reduction
of $70,000,000 in member bank balances and $80,000,000 in money in circu­
lation, together with an increase of $25,000,000 in the stock o f monetary gold.
The principal reduction has been in acceptance holdings of tlie Eeserve Banks.
M oney R ates

ary rates are averages for the first 19 days)




Money rates in the open market continued to decline after the middle o f
January and by the middle o f February were at new low levels. The pre­
vailing rate on prime commercial paper declined to a range of 2*4-2 % per cent;
and the rate on bankers acceptances was reduced to l 1 per cent, but subse­
/^
quently advanced to 1 ^ per cent.