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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 is t r ic t Federal Reserve Bank, New York B u s in e s s C o n d i t io n s in t h e U n i t e d S t a t e s N D U ST R IA L activity increased further in March and was larger than a year ago, while the general level o f prices continued to decline. Distribution o f commodities at wholesale and retail was somewhat smaller than a year ago. I P r o d u c t io n Industrial production, after increasing continuously fo r three months, was larger in March, when allowance is made fo r usual seasonal changes, than in any month since last September. Output of bituminous coal, crude petroleum, and steel ingots, and mill consumption o f raw cotton in March were larger than in any previous month. Since A p ril 1, however, steel-mill operations have been somewhat curtailed, and bituminous coal out put has been reduced by about 40 per cent since the beginning o f the m iners’ strike on A p ril 1. The con sumption of silk and wool, sugar meltings, flour produc tion, and the output of rubber tires increased in March. Production of automobiles has shown seasonal increases since the first o f the year but has been in smaller volume than a year ago. The value o f building contracts awarded in March was larger than at any previous time, and the production o f building materials has increased considerably in recent weeks. The largest PERCENT. Index Number ^of Production of Manufactures and Minerals Combined, Adjusted for Seasonal Variation. (1923-25 averages 100 per cent.) R e s e r v e C o n d itio n s May 1, 1927 increases in contracts, as com pared with last year, were in the middle western states, while the largest decreases occurred in the southeastern states. In the first half o f A p ril contracts awarded were in slightly smaller volume than in the same period o f last year. T rade Sales of department stores increased less than usual in March and were slightly smaller than last year owing in part to the lateness o f Easter. Sales o f mail order houses and chain stores, however, were somewhat larger than a year ago. Inventories o f department stores increased slightly more than is usual in M arch in antici pation of the expansion in retail trade before the Easter holidays, and at the end o f the month they were in about the same volume as a year ago. Wholesale trade in March continued slightly smaller than in the corre sponding period a year ago. Stocks o f merchandise carried by wholesale firms were seasonally larger at the end o f March than in February, but in most lines con tinued smaller than last year. Freight-car loadings which showed seasonal increases in March, declined in the first ten days o f A pril, owing to the smaller shipments o f coal, but continued larger than in the corresponding period o f previous years. Loadings of miscellaneous freight and o f merchandise in less-than-car-load lots were in large volume. TER CWT Federal Reserve Board’s Indexes o f Value o f Building Contracts Awarded, as Reported by the F. W . Dodge Corporation. (1923-25 average—rlOO per cent.) MONTHLY REVIEW, MAY 1, 1927 34 3 1 L U 0 N 5 o f DO LLARS 1923 1924 192.5 1926 1927 W holesale Price Index of United States Bureau of Labor Statistics. (1913 averagec=100 per cent.) P r ic e s The general level o f wholesale commodity prices de clined further in March, reflecting decreases in most o f the important groups of commodities. Prices o f non agricultural commodities as a group declined to the lowest level since the war, while the average fo r agricul tural products, which advanced somewhat from Novem ber to February, remained practically unchanged in March. D uring the first half of A p ril prices of winter wheat, sugar, cotton, silk, bituminous coal, and hides advanced; while those o f hogs, crude petroleum, gaso line, and nonferrous metals declined. B a n k C ports and exports were approxim ately in balance, and there thus ceased to be any addition to the basic supply o f credit. The result o f these influences was that money rates continued at about the levels which prevailed in the latter part of March, except fo r a slightly easier tendency in the last two weeks o f A pril. The prevailing rates at the end of A p ril are shown in the follow ing table, compared with corresponding figures for a year ago and the latter part of March. Money Rates a t New York r e d it There was some decline in the volume of loans fo r commercial purposes and in loans on securities at member banks in leading cities between the middle o f March and the middle of A pril. Member bank holdings o f United States securities, which had increased consid erably in the middle of M arch in connection with the operations o f the Treasury, have declined by more than $100,000,000 since that time, but are still about $200,000,000 larger than in the early months o f the year. A t the Reserve Banks total bills and securities, which have fluctuated near the $1,000,000,000 level since the end of January, showed little change during the six weeks ending A p r il 20. Discounts fo r member banks were in about the same volume on that date as on March 9, while acceptances showed a decrease and holdings of United States securities a slight increase. D uring the first three weeks of A p ril quoted rates on prime commercial paper and on acceptances were the same as in the latter part o f March, while call money averaged somewhat higher. M on ey M ark et The principal factors influencing the money market during the past six weeks were a continuation in the demand fo r money in about the amount of mid March, and a dwindling of gold imports to a point where im- Monthly averages of W eekly Figures for Member Banks in 101 Leading Cities. Latest Figures are Averages for First Three W eekly Report Dates in April. Time money— 90 d a y .............................. Prime commercial paper......................... Bills— 90 day unendorsed....................... Treasury certificates and notes Maturing June 15................ Maturing September 1 5 .... Federal Reserve Bank of New Y ork— rediscount ra te...................................... Federal Reserve Bank of New Y ork— buying rate for 90 day bills. ........... April 28 1926 March 30 1927 April 28 1927 *3^ 4 4 -4 M 3 y8 4H 4 -4 X 3H *4 4H 4 -4 H 3H 2.51 3.07 3.31 3.39 3.46 3.51 3M 4 4 3'A 3X 3H * = Prevailing rate for preceding week. A s the table indicates, money rates in A pril, for the first time this year, were somewhat higher than a year ago due to continued firmness this year, whereas last A p ril there was a considerable decline from the March high point. The principal changes in the demands for money are illustrated in the diagram at the top o f this page. Commercial loans o f the reporting banks, loans on stocks and bonds, and investments, have all increased since February and are substantially higher than a year ago. In fact, total loans and investments of the reporting member banks in principal cities are about 700 million dollars larger than at this time last year, and total loans and investments of the New Y ork City banks 300 mil lions larger. Another factor making fo r firmness in the money market in early A p ril was a tem porary increase in cur rency circulation, due to Easter trade requirements. It is estimated that nearly $40,000,000 of additional cur- FEDERAL RESERVE AGENT AT NEW YO R K 35 ilLUOHSofDOLLARS BILU0N5 ofP0LLAR5 6.0, TOT M. INVEST! 1ENTS 1917 v A / /ft 71 19Z6 19Z7 A * 19Z6 COMML PAPER RATE COMML*LOANS JANFEB MAR. APR. Call Loan and Commercial Paper Rates and Loans and Investments of All Reporting Member* Bankst in First Four Months of 1927, Compared with 1926 rency was drawn into circulation in the three weeks preceding A p ril 13, and consequently caused a drain of that amount on the reserves of commercial banks. Cur rency returned gradually from circulation after Easter and member bank loans and investments declined some what, and largely as a consequence, slightly lower money rates prevailed in the latter part of A pril, especially for call loans. B il l M a r k et S e c u r it y M a r k e t s The supply of bills offered to the market was moder ately heavy, and, except for a short period in the first half o f A pril, exceeded the buying demand from banks and others. A s a result of this condition, dealers’ p o r t folios increased about 50 per cent from the low level o f late March. Open market rates fo r all maturities of bills remained at the levels established early in March. C o m m e r c ia l P aper M a r k et Commercial paper outstanding at the end o f March through 26 dealers amounted to $606,000,000, an in crease of 5 per cent over the previous month, follow ing a similar increase in February. March outstandings were 9 per cent smaller than in M arch last year. There was little change in the investment demand fo r paper and institutions outside of New Y ork City continued to be the largest buyers. The prevailing rate on prime paper was steady throughout March at 4 -4 ^ per cent. G o ld M o v e m e n t The gold movement to and from the United States during March was the smallest since last October. Im ports amounted to $14,300,000, including $5,000,000 each from Canada and Australia and $2,000,000 from Japan, and exports totaled $5,600,000, o f which $3,000,000 went to Canada, follow ing the rise of Cana dian exchange to a premium, and nearly all the re mainder went to the Orient. D uring the first quarter of 1927, $96,000,000 of gold was imported, and $23,000,000 exported, leaving a net import of $73,000,000, or $4,000,000 less than in the first three months of 1926. The excess o f imports this year has shown a decline month by month from $44,500,000 in January to $19,900,000 in February, to $8,600,000 in March. The only important movements o f gold at New Y ork during the first 28 days of A p ril were the shipment o f about $1,200,000 to Brazil, said to be fo r the purpose o f strengthening the currency reserve, and the export of $1,000,000 to Canada just before the close o f the month. Total exports, at New Y ork, fo r this period were $2,900,000 and imports, $760,000. A n additional $4,000,000 was shipped from Japan during A pril, making a total movement to this country o f $18,000,000 in 1927, follow ing shipments of $16,000,000 in 1926 and $11,000,000 in 1925. Follow ing com paratively stable conditions in March, the rise in industrial stocks was resumed in A p ril and price averages advanced more than 6 points to new high levels, slightly above the highest averages in 1926. Late in the month there was a sharp reaction followed by a partial recovery. In the case o f railroad stocks the advance was at a slower rate but at the end o f the month average prices were the highest since 1909. Trading continued active with a daily turnover on the exchange o f well over 2,000,000 shares. Corporation bond prices advanced slightly further in the first part of A p ril but subsequently declined again and toward the close of the month were little changed from the end o f March. United States Government bonds were quoted at slightly lower prices in A p ril than in March. Japanese bonds showed moderate declines, reflecting banking and political difficulties in Japan, and other foreign bonds were slightly lower. A heavy volume o f new securities continued to be o f fered in this market during A p ril and the total was somewhat larger than in the preceding month, or A p ril 1926. A n important element in the large total was the offering o f $100,000,000 Federal Land Bank 4 % per cent bonds, chiefly to redeem outstanding bonds bearing a higher rate o f interest. Industrial and public utility issues were again numerous, but there was a marked decline from earlier months o f this year in the amount of railroad financing. Foreign issues were the heaviest since 1924, and again included a large Italian issue — one of $30,000,000 for the City o f Milan. Other im portant foreign offerings were $30,000,000 of Kingdom o f the Serbs, Croats, and Slovenes bonds, a $25,000,000 issue o f the State o f New South Wales, and a $21,200,000 Argentine Government loan. A n interesting feature of the new financing in the first quarter has been the large amount of refunding issues. Issues o f securities wholly or principally for refunding purposes have totaled more than one-half billion dollars, exceeding by far the amount in the first 36 MONTHLY REVIEW, MAY 1, 1927 quarter of recent previous years. The increase was due prim arily to refunding operations by domestic corpora tions, as is indicated in the accom panying diagram. Coincident with a strong demand fo r investment securi ties, moderately easy money conditions, and the conse quent lowering of bond yields during the past quarter o f this year, a considerable number of railroads, and industrial and public utility companies were able to refu n d at a lower rate of interest the securities which had been floated in previous years. 510 Z13 S I ■ In the Far East, Indian rupees fell below 36 cents to the lowest quotations of the current year. The Japanese yen, which stood over 49 cents early in the month, broke to 46.62 cents on the 21st upon news of serious financial troubles, but recovered a part o f the loss. Bar silver moved within a narrow zone between 57.75 cents and 56 cents, a range somewhat higher than fo r March. Similar movements were recorded in the silver currencies. C h a n g e s in C e n t r a l B a n k R a t e s F ou r more changes in the discount rates of central banks occurred during A pril. On A p ril 14 the Bank o f France reduced its rate from 5 % to 5 per cent; on A p ril 20 the Bank of E ngland rate was reduced from 5 to 4 % per ce n t; on A p ril 21 the Bank o f Sweden rate was reduced from 4y2 to 4 per cent, and on A p ril 27 the Bank o f Belgium rate was reduced from 6 to 5y 2 per cent. The follow ing table shows the official discount rates o f leading European countries and indicates the date and amount o f the last change. Country . h 19 2 5 19 2 + 19 25 A ustria.............................................................. Belgium ............................................................. Czecho-Slovakia.................................................. Denm ark........................................................... England............................................................. Finland..................................................... i 19 26 19 27 Refunding Security Issues in First Quarter o f Each Year from 1923 to 1927, in Millions o f Dollars. Germ any........................................................... H ungary................................................................ Ita ly ....................................................................... Netherlands....................................................... N orw ay............................................................... Spain................................................................ Sweden.................................................................. Switzerland........................................................... T h e F o r e ig n E x c h a n g e s W ith a few extreme exceptions, the foreign exchanges moved within unusually narrow limits during A pril. Sterling, which had been as low as $4.8450 in February and $4.8472 in March, rose to $4.8538 in the first week of A pril, the highest rate since last August. German marks w^ere steady at about 23.70 cents, French francs at 3.92 cents, Netherlands florins at 39.97 cents, Swedish crowns at 26.78 cents, Swiss francs at 19.23 cents, Danish crowns at 26.68 cents, belgas at 13.90 cents, and Austrian crowns at 14.05 cents. On the other hand, pesetas, which had been above 18 cents in March dropped below 17.50 cents in A pril. Lire continued to move upward. F or this currency, the average rate was 4.32 cents for both January and February with narrow fluc tuations; in March a steady rise began from a low of 4.36 on the 2nd to 4.67 on the 31st; the movement con tinued in A pril, the quotation rising to 5.66 cents on the 25th, but not maintaining this level. A m ong the American rates, Argentine pesos were stable at about 42.29 cents, barely under the parity of 42.45 cents; the milreis moved in a narrow zone just under 12 cents. Canadian dollars were strong, rising to $1.0017 on the 25th, the highest figure since November. Rate Changed from 63^ to 6 6 to 5 % to 5 5 to 5 5 to 4 ^ 73^ to 7 53^ to 5 6 to 5 7 to 6 6 to 7 4 to 3 5 to 43^ 9 to 83^ 5 H to 5 4 to 4 4 to y2 y2 y2 y2 Date of Change Feb. 4, Apr. 27, M ar. 7, June 24, Apr. 20, Mar. 23, Apr. 14, Jan. 11, Aug. 26, June 18, Oct. 2, Oct. 26, M ar. 11, M ar. 23, Apr. 21, Oct. 22, 1927 1927 1927 1926 1927 1927 1927 1927 1926 1925 1925 1926 1927 1923 1927 1925 F o r e ig n T r a d e The foreign trade o f this country, especially import trade, showed more than the usual seasonal increase from February to March. Exports, valued at $410,000,000, were $37,000,000 above those o f February and $36,000,000 above those o f a year ago. Imports, valued at $377,000,000, were $66,000,000 larger than in the previous month, but were smaller by the same amount than in March 1926. The quantity o f cotton shipped abroad continued very large; it was more than double the amount exported a year ago, and was the largest in any March since 1915. The value was $26,000,000 greater than a year ago, despite a price decline o f at least 25 per cent. Grain exports were slightly larger in value than in February, follow ing a steady decline from the high level o f last August, and were $5,000,000 above March 1926. Quan tity receipts o f rubber, silk, and coffee were larger than in February, and silk imports were larger than last year. Im ports o f both rubber and coffee, however, were nearly 20 per cent less than a year ago, and the value showed even greater declines. FEDERAL RESERVE AGENT AT NEW YORK 37 TER CENT Number o f Business Failures Compared with M ovement of Prices o f N on-Agricultural Commodities (1913 average— 100 per cent for prices. Index o f failures represents ratio o f failures, adjusted for seasonal variation, to number of concerns in business; average ratio from 1870 to 1920 — 100 per cent.) C o m m e r c ia l F a ilu r e s The number o f business failures in each o f the first three months of this year was larger than in the corre sponding month o f 1926, but, as the accom panying dia grams show, the number was not unusually large compared with the experience of the past years, and the liabilities of concerns failin g in recent years have been very small indeed. The index o f number of failures used in both dia grams represents the percentage o f failures to the total number of concerns in business, as reported by R. G. D un and Company. The first o f the two diagrams makes it evident that the number o f business failures tends to increase as wholesale prices o f non-agricultural products decline, and to diminish as prices rise. Thus the number o f failures has shown a gradual increase since 1923, accompanying a gradual decline in prices of non-agricultural commodities. The second diagram is an annual record o f commer cial failures since 1900. This shows that the number of firms failin g has averaged about 1 per cent o f the number in business in the last five years, or slightly above the average for the fifteen years before the W ar. The amount of liabilities involved in failures relative to the total volume o f trade, as represented by bank clear ings outside o f New York, has declined sharply since 1922, however, and in 1926 was lower than at any other time since 1900, except during the price increases o f 1916 to 1920. I n d e x e s o f B u s in e s s A c t i v i t y Some irregularity in business conditions during M arch was indicated by this ban k ’s indexes. Debits to individual accounts in banks outside New Y ork City decreased slightly after allowance for seasonal change Number of Business Failures Relative to Number of Concerns in Business, and Ratio of Liabilities of Concerns Failing to Total Volume o f Business as Indicated by B a n k Clearings Outside New York City. but remained larger than a year ago, while the index of debits in New Y ork City was higher than in any pre vious month. Freight car loadings were slightly lower than in February after seasonal adjustment, but contin ued larger than in previous years. Retail trade failed to show the usual increase over February, but was somewhat larger than a year ago. Most indexes o f business activity remained at fairly high levels. Indexes fo r recent months and a year ago are shown below in per cent o f trend, with allowance fo r seasonal variation, and, where necessary, fo r price changes. (Computed trend of past years=100 per cent) 1926 1927 Mar. Jan. Feb. Mar. Grain exports................................................. Panama Canal traffic r ............................. 108 102 87 133 51 lllr 106 104 90 116 66 88r 110 107 94 105 57 94r 108 106 98p 116p 71 Distribution to Consumer Department store sales, 2nd D ist............. Chain store sales.......................................... Mail order sales r ........................................ Life insurance paid fo r ................................ Real estate transfers.................................... Magazine advertising.................................. Newspaper advertising............................... 95 89 99r 116 109 99 108 104 94 96r 101 95 99 100 105 98 99r 113 98 94 99 119 102 103 97 100 113 140 106 115 132 107 116 134 105 115 141 109 105 128 248 101 113 103 111 147 115 108 127 159 94 113 100 103 130 114 108r 134 204 97 113 100 107 153 116 100 135 227 97 186 185 184 184 Primary Distribution Car loadings, merchandise and m isc........ Car loadings, other...................................... General Business Activity Bank debits, outside of N. Y . C it y ......... Bank debits, New Y ork C it y .................... Bank debits, 2nd Dist. excl. N. Y . C ity. Velocity of bank deposits, outside of New York C it y ......................................... Velocity of bank deposits, New York C ity Shares sold on N. Y . Stock E xch an ge*.. Poital receipts............................................... Electric pow er............................................... Employment in the United States........... Business failures........................................... Building perm its........................................... New corporations formed in N. Y. S tate. General price le ve l....................................... ♦■“Seasonal variation not allowed for. p=Preliminary. r = Revised. 99p 119 130 120 MONTHLY REVIEW, MAY 1, 1927 38 THOUSANDS 0FCAR3 Monthly Production of Passenger Automobiles in the United States. E m p lo y m e n t a n d W a g e s Factory employment increased about half of one per cent further in March, or somewhat less than the usual seasonal increase. Compared with March 1926 em ploy ment in this state was reduced nearly 5 per cent and in the country as a whole, 2^2 per cent. Total payrolls increased more than employment in March, and per capita earnings in New Y ork State factories were at the rate of $29.78 a week, and larger than at any time in the past. The largest gains in March over February were in the cement and brick industries, reflecting the seasonal in crease in building operations. There was also increased activity in the metal industries, largely connected directly or indirectly with increased automobile output. Reflecting the seasonal increase in industrial activity, together with the opening of the season fo r outdoor work, the number of workers called for at state em ploy ment offices, relative to the applications for wTork, in creased considerably, and labor turnover, as reported by the Metropolitan L ife Insurance Company, increased sharply to the highest level since October. P r o d u c tio n The output of a m ajority of leading industries was unusually large in March. Indexes for production of pig iron, steel ingots, bituminous coal, cement, refined sugar, flour, newsprint, and passenger automobiles, and mill consumption of cotton and silk, all showed increases after seasonal adjustment, while only copper, anthracite coal, and motor truck production failed by any consid erable amount to show the usual seasonal increases. Bituminous coal production in the first two wTeeks of A p ril was at a rate about 40 per cent lower than before the strike, and somewhat lower than in A p ril 1926, but despite the strike involving a considerable part o f the unionized mines, output was larger than in the corre THOUSANDS OF.CARS Monthly Production of M otor Trucks in the United States. sponding periods of 1925 or 1924. Anthracite output increased follow ing the spring reduction in prices, but remained smaller than a year ago. Steel ingot produc tion is reported to have declined gradually in A pril, but weekly employment figures indicated that automobile production was maintained at about the same level as in March, and cotton mill activity continued at a high level. This ban k’s indexes of production, in which allowance is made fo r year-to-year growth and seasonal variations, are shown below. (Computed trend of past years=100 per cent) 1926 1927 Mar. Jan. Feb. Mar. 114 112 102 106 103 98 109 105 106 91 116 110 69 111 104 99 120 109 107 102 127 112 98 95 124 83 71 129 108 lllr 130 108 93 98 130 108 108 92 99 92 84 114 114 112 133 95 96 98 116 109 127 93 100 94 110 83 111 137 117 130 100 94 105 136 145 103 99 106 110 81 106 84 100 72 110 160 131 115 88 87 r 83 109 103 133 106 109 116 75 92 90 99 66 107 157 131 118 95 95 85 118 119 115r Producers' Goods Steel ingots.................................................... Bituminous co a l............................................ Copper, U. S. m ines.................................... Tin deliveries................................................. Petroleum ....................................................... Gas and fuel o il............................................ C otton consum ption.................................... W oolen mill a ctiv ity *.................................. Leather, s o le .................................................. Silk consum ption*........................................ Consumers’ Goods Cattle slaughtered........................................ Calves slaughtered....................................... Sheep slaughtered........................................ Hogs slaughtered.......................................... Sugar meltings, U. S. p orts....................... Wheat flour.................................................... Cigars.............................................................. Cigarettes....................................................... Tobacco, m anufactured.............................. Gasoline.......................................................... Paper, to ta l.................................................... Boots and shoes............................................ Anthracite co a l............................................. Automobile, a ll............................................. Automobile, passenger................................ Automobile, truck ........................................ ♦^Seasonal variation not allowed for. p=Preliminary. r**Revised. U5 90p 124 87 130 111 102 112 98 108 98 107 75 107 119 95 9 5p 73 118 125 91 39 FEDERAL RESERVE AGENT AT NEW Y O R K B u ild in g Contracts awarded for building and engineering p ro jects east of the Rockies during March, as reported by the F. W . Dodge Corporation, reached the largest vol ume on record. The total was nearly 4 per cent larger than for March a year ago and 57 per cent larger than in February. Residential building contracts continued smaller than a year previous, but commercial and educa tional construction and public works and utilities p ro jects were larger. F or the first quarter of this year, contracts awarded were about 4 ^ per cent below the exceptionally large volume for the corresponding period of last year, but were 26 per cent larger than in the first quarter of 1925. As will be noted in the accom panying diagram, the de cline from 1926 was due chiefly to smaller amounts of industrial and residential building. The New Y ork dis trict showed a large reduction from the first quarter o f 1926, as did the southeastern district, which includes Florida. The Chicago and Philadelphia districts showed the largest increases. 1399 U11 Jleto Y ork. Thiladelphia Per cent of Charge Accounts Out Percentage Change standing February 28 Collected March 1927 from in March March 1926 Locality New Y o r k ..................................... . B uffalo........................................... R ochester...................................... Syracuse........................................ N ewark............................................ B ridgeport....................................... Elsewhere...................................... Northern New Y ork S ta te .... Central New York State. Southern New Y ork S ta te .. . . Hudson River Valley District Capital D istrict......................... Westchester D istrict............... All department stores................. Apparel stores................................ M ail order houses........................ Net Sales Stock on hand end of month + 0 .4 — 0.2 — 0 .7 + 3 .4 + 5 .3 — 13.2 — 2.8 1927 — 0.2 —11.6 + 1.2 — 19.7 + 1.2 1926 50.7 5 3.0 70.6 48 A — 9 .6 + 4 .0 ‘ 3 4.0 — 19.5 — 4 .3 — 3 .8 + + + + 2.6 2.0 0.6 — 1.6 1.8 + 3.1 + 1.4 — 3 .6 4 9.7 4 1.6 1463 ifl-63 3 c3 to n reporting stores were 51 per cent o f accounts outstand ing at the beginning o f the month, compared with 50 per cent in March 1926. All Other \Public UhUitT~? & Works Industrial & Commercial Sales classified by departments showed much the same tendencies as in February. The largest increases were in wom en’s wear and hosiery and in smaller depart ments, such as books and stationery, and silverware and jewelry, while other important departments, including furniture and shoes, showed relatively small increases, and m en’s wear, yard goods, and musical instruments and radio showed substantial declines. P ittsbu rgh Chicago R esidential 7-iinneapolrs S c.E astern Texcvs-------h. 1925 1926 1927 1926 1927 1925 Building Contracts Awarded in First Quarter of Each Year, Classified by D istrict and by Type o f Project. (In millions of dollars.) D e p a r tm e n t S tore T r a d e Retail trade in this district, as reported by leading department stores, was less than 1 per cent larger in M arch than a year previous. A considerable amount o f Easter trade which was done in March last year no doubt was delayed until A p ril this year. Three-fifths o f all reporting stores had smaller sales in March than a year previous, and sales in most localities within the district either were below a year previous or showed smaller increases than in other recent months. Sales in the first quarter of this year averaged about 2 per cent larger than a year ago. A pparel store reports showed an average increase of about 2 per cent in March, and the first quarter sales were about 5 per cent larger than in 1926. Mail order sales in March were slightly larger than a year previous, follow ing decreases in Janu ary and February. Stocks of merchandise remained smaller than a year ago, and the rate of stock turnover continued to be some what higher. Collections in March also compared favor ably with those of a year ago. The collections of Books and stationery.............................. Silverware and jew elry........................... W om en’s and Misses’ ready-to-wear. . H osiery....................................................... Home furnishings..................................... Toys and sporting g ood s........................ Toilet articles and drugs........................ Linens and handkerchiefs...................... Shoes...................................................... Luggage and other leather g o o d s......... Furniture.................................................... M en’s furnishings.......................... .......... W om en’s ready-to-wear accessories. . . Silk and velvets........................................ W oolen goods............................................ M en’s and B oys’ w ear............................ Cotton good s............................................. Musical instruments and ra d io............. Miscellaneous............................................ Net Sales Percentage Change March 1927 from M arch 1926 Stock on H and Percentage Change M arch 31, 1927 from March 31, 1926 + 1 7 .7 + 13.6 + 11.2 + 9 .6 + 8 .3 + 7 .4 + 6 .3 + 5 .7 + 3 .2 + 1.7 + 1.2 — 0 .5 — 3 .8 — 4 .6 — 11.5 — 12.0 — 12.8 — 39.6 — 2.9 — 2 .8 — 4 .2 + 9 .7 + 0 .6 — 0 .3 — 2 .4 — 3 .6 + 4 .3 + 5 .3 + 3 .0 + 9 .8 + 1.2 — 1.0 — 10.3 — 29.8 + 5.1 — 7 .3 — 17.7 — 11.5 W h o le s a le T r a d e Sales in a m ajority o f lines o f wholesale trade were substantially larger in March than in February, in ac cordance with the usual seasonal tendency, but the volume o f business in dollars continued in most cases below that o f a year ago, partly due to price declines. A weighted average of all reporting lines shows a decline of nearly 8 per cent from March 1926 sales. Hardware sales were slightly larger than a year ago fo r the first time this year, and shoe sales continued above last y e a r’s volume. The decline in m en ’s clothing sales was the smallest in six months, but w om en’s cloth- 40 MONTHLY REVIEW, MAY 1, 1927 ing sales continued to be considerably smaller than a year previous. A fter allowance fo r the lower prices this year, quantity sales of cotton goods and silk goods were probably larger than in March 1926, although dollar sales remained somewhat smaller. Machine tool sales were considerably below the sales o f a year ago, and diamond and jew elry sales continued much smaller. Stocks o f silk goods and hardware were smaller than a year previous fo r the first time in several months, and cotton goods stocks continued smaller in value, though probably not in quantity. Stocks of groceries, shoes, drugs, and diamonds and jew elry were larger than at the end of March 1926. March 1927 from February 1927 Comm odity N et Sales G roceries.................... + 17.3 M en’s clothing.......... + 11.9 W om en’s dresses. .. . +10.1 W om en’s coats and suits + 18.9 C otton goods— Jobbers. + 5 .6 C otton goods— Com mission ................... + 2 5 .9 Silk good s.................. + 12.1 Shoes........................... + 4 6 .5 D rugs.......................... + 4 2 .5 H ardware................... + 2 9 .2 Machine t ool s**. . . . + 6.1 Stationery.................. + 2 .3 P ap er.......................... + 2 0 .7 D iam onds................... — 10.3 Jewelry....................... + 14.1 Weighted Average. . . . + 18.2 Stock end of month — 7.1 + 5 .4 Percentage Change March 1927 from March 1926 Net Sales — 6 .3 — 5 .5 — 13.9 — 23.0 — 2 .5 —12.2 — 7 .3 * — 3.1 + 4 .4 — 3 .8 — 8 .3 — 1.3 — 2.2 + 3.1 — 17.2 — 5 .7 Stock end of month + 6.1 — 7.4 — 2.0* + 10.7 + 1 1 .7 — 3.1 — 1.0 + 6.0 — 28.5 — 13.2 + 9 .3 7.8 C ollec tions A cct’s R eceiv able — 4 .5 — 7.9 — 2.0 + 1.1 — 2.0 — 2 3.0 — 2 .5 — 8.1 — 7 .9 + 0 .4 + 2 1 .3 + 8 .4 — 2 .5 + 0 .3 + 2 5 .8 — 3 .6 ’+ 6.2 — i7\0 -12.8 — 2 .5 — 2.2 3 .0 *=Q uantity not value. Reported by the Silk Association of America. **== Reported b y the National Machine Tool Builders’ Association. I n c r e a s in g U s e o f P o w e r in F a c t o r i e s The summary report o f the 1925 Census of M anufac tures which was issued recently contained or suggested PER a m . a number o f interesting facts indicating the progress that has been made in recent years toward more efficient employment o f labor in the factories of the United States. A m ong these are the follow in g : 1. The value o f products m anufactured was slightly larger in 1925 than in 1919, despite a decline of 20 to 25 per cent in com m odity prices. This would indicate quantity output o f factories about 30 per cent larger in 1925 than in 1919. 2. The average number o f wage earners em ployed in 1925 was 7 per cent smaller than in 1919. 3. The proportion o f the value o f factory products taken by wage payments was no larger in 1925 than in 1919 or earlier census years, although annual per capita earnings o f factory workers were 10 per cent larger in 1925 than in 1919. 4. Prim ary horsepower em ployed in factories in 1925 was 22 per cent larger than in 1919 and 60 per cent larger than in 1914. The explanation o f apparent contradictions between larger production and smaller working forces, and be tween high wages and reduced com modity prices with out the absorption o f an increased portion o f the value o f products by payroll expenditures, seems to lie very largely in the last item— the rapid increase in the use o f power in factory production and an accom panying increase in per capita output. More than 4 horsepower fo r each wage earner was used in 1925, as compared with about 3% horsepower in 1919. This increase in the ratio o f power to wage earners had been in progress fo r a long time, but it is only since 1919 that power has been used in sufficient quantity and so effectively that the increase in produ c tion necessary to meet the needs o f a grow ing population with an increasing purchasing power has been main tained without increased working forces. The develop ment of more efficient machinery and im proved organi zation of factory processes undoubtedly have been very important supplements to the increase in quantity of power used. MILLIONS 36 ■ TDaje &arner5 El Horae P o u er TK CEHT OTHER EXPENSES &PROFITS 30 ic!8 24 75- ■18 COSTOF MATERIALS Z5~ WAG-ZS 0. New York State Department o f Labor Index o f Per Capita Earn ings o f Factory W orkers, Compared with U. S. Bureau of Labor Statistics Index o f Manufactured Commodity Prices. (1914 = 1 0 0 per cent.) 1914 1919 192.5 1914 1919 1925 Percentage of Total Value of Products of Factories Taken by W ages, Materials, and Other Expenses and P rofits; also Number of W age Earners and Amount of Primary Power Employed in Factories, 1914, 1919, and 1925.
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