View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Report on Business Conditions




From the Federal Reserve Agent at New York
to the Federal Reserve Board


New York May 31, 1920.
The Credit

In the last thirty days there has
been little or no reduction in the
volume of credit as reflected either
in the loans of the banks or the Federal Reserve
banks. There are, however, other movements
under way, the importance of which cannot be
gauged until it is seen how long and to what extent
they continue. It is apparent that a great change
has come over the public mind with respect to prices;
whereas last fall and winter purchasers of goods
bought regardless of price they now watch values
closely, and whereas certain stores a few months
ago advertised articles for sale without even men­
tioning the price they are now advertising substantial
price reductions.
A number of factors conspire to bring about price
reductions in this district. The general credit
situation makes it increasingly expensive to carry
goods and has obliged some speculators to put their
goods on the market. Railway congestion, espec­
ially in its early stages, caused the sale locally of
goods manufactured on order for distant points,
but impossible of delivery; and in its later stages
when the railroads began to catch up on their
shipments, some goods came through to New York in
more than usual volume. A third factor in inducing
a decline in prices, notably to the textile trades,
is that production has in some instances overtaken
demand. Thus on the one hand there has been
at least the beginning of a falling off of demand and
on the other of an increased supply, though both
may prove to be only temporary.
The recent change in the buying temper of the
public is reflected in an attitude of greater conser­
vatism on the part of the merchants and in the retail
price cutting wave which is passing over the country.
Wholesale commodities showed no general tendency
to react to the conditions prevailing in retail trade
until the last fortnight. The Bureau of Labor price
index for April, made up of a large number of com­

modities at wholesale, was the highest yet reached.
But for the week ended May 24 the price index
maintained by this bank of 12 basic commodities
showed its first decline since February. Wheat,
cotton, hogs, lead and rubber declined; hides,
copper, pig iron, hemlock and petroleum remained
stationary; corn and sugar increased. Inasmuch
as these commodities have ready markets at all
times they are especially susceptible to speculation,
and the movement of a single week is, therefore,
by no means a reliable indication that the peak of
high prices has passed. Other elements in the cost
of production have not gone down. On the contrary
many wage increases have recently been granted,
and others, notably of railway workers, are pending.
Higher wages, rents, and local taxes continue as
increasingly heavy charges against production and
must be reflected in the cost of goods to the consumer.

Showing the parallel between the expansion of loans
and wholesale prices from our entry
into the war.



Such elements in the prices of commodities as specu­
lation has caused may be reduced through credit
pressure. Runaway profits arising from lack of
competition will be eliminated when competition is
re-established in one trade after another. But it
can scarcely be expected that the basic cost of
production will fall to a great degree until raw
materials prove to be established on lower levels
and the labor cost is reduced either through in­
creased labor efficiency or lower wages.
No factor could work for lower living costs so
effectively, so promptly and with such beneficial
effect as a reduction in the amount of goods we
consume. To attempt to satisfy our demands for
goods by paying higher and higher prices at a time
when there is insufficient man power to produce all
we desire hinders rather than helps to effect the
increased production we desire. But by refraining
from consuming things we can just as well do without,
labor and materials are released for other more
necessary services and capital is provided to sustain
them in those services.
“ Work and save55 is the slogan which every
government is urging upon its people. Saving is
more universal in its application than working,
for the workers never include all, but all are spend­
ers. And there seldom has been such an opportunity
for remunerative saving as now, when a given sum
if spent will buy so little and if saved and invested
will yield such large returns. Liberty bonds, for
example, are now selling at market prices which
for the taxable issues yield from about 5 per cent,
per cent. They are the safest and most
readily saleable of all investments. Should prices
later come down, a part of the savings invested in
them will then buy the thing which would cost all
of the savings if bought now.

Volum e of
The changes since April 16 in the
Bank Loans volume of bank loans either in this
district or in the country as a whole
have not been great. In the five weeks ended May
21, the loans of banks throughout the country which
report each week to the Federal Reserve Board
declined 185 millions. Somewhat more than half
of the decline, 100 millions, took place in New York
City, but the total nevertheless stood considerably
above the low point for the year, reached on Feb. 13.
The situation with respect to Federal Reserve
Bank loans was similar. On M ay 21, the total loans
and investments of the Federal Reserve Bank of
New York stood at 1,038 millions, of which 80 mil­
lions represented rediscounting for other Federal
Reserve banks.
Thus the net figure on that day
was 958 millions, a decline of 41 millions from April
16. The loans of the other Federal Reserve banks,
disregarding their rediscounts with the Federal
Reserve Bank of New York, were 2,264 millions on
May 21, an increase of 103 millions over April 16.
The best that can be said of these inconsiderable
changes is that the credit expansion of the country
as a whole has not gone forward. The changes
within the system— that is, the relatively better
position of the Federal Reserve Bank of New York
in common with one or two other eastern banks—
are attributable in part to the transportation con­
gestion which obtained throughout the period.
Credit burdens which would normally have been
transferred from the west to the east with the move­
ment of goods were held back and partly in conse­
quence the Federal Reserve Bank of New York
increased the volume of its rediscounting for other
Federal Reserve banks from 36 millions on April 16,
to 80 millions on May 21.
The aggregate figures for reporting member banks
which compare with others for previous weeks
printed in earlier issues of this report are as follows:


Loans and
October 10, 1919
23, 1919

5,850 (highest)

(In Millions)
73 Reporting Banks
in New York City*

Loans and

813 Reporting Banks
All Districts*

*The number of reporting banks throughout the country increased from 773 on May 23, 1919, to 813 on May 21, 1920.
time the reporting banks in this city increased from 65 to 73.

In the same



The conditions outlined above were
reflected in firmer money rates. Stock
exchange call loans ranged from 6 to
15 per cent., a rise occurring on each occasion when
demands were out of the ordinary. Such instances
were moderate withdrawals of Government deposits
from the banks, and the dividend and interest pay­
ment periods. This inelasticity was despite the
fact that stock market liquidation released funds
rather than engaged additional amounts. Time
money quotations continued largely nominal at
83^ to 9 per cent., according to collateral, through
most of the period. Latterly a substantial sum was
reported as contracted for, but this apparently was
an exceptional case as little new money has other­
wise been offered.
The freight tieup, though it tended temporarily
to relieve demands for funds to meet payments
on incoming goods, increased needs of borrowers in
other districts and hampered the distribution of
commercial paper and acceptances. Sales of com­
mercial paper were lighter, though rates were ad­
vanced to l }/2 per cent, for best names. Country
banks were practically the only buyers. Contrast­
ing with recent activity the bill market also has been
quiet, with the supply of bills in excess of the demand.
Rates rule on a basis of 6^£ per cent, for prime
ninety-day bills. The Federal Reserve Bank in­
creased slightly its minimum purchase rates on
the shorter maturities, and it is now buying en­
dorsed bills at minimum rates of 5% to 5% per cent.,
according to maturities.
G old

Between April 20 and May 10,
gold imports aggregated $6,272,000,
of which $4,670,000 came from Eng­
land. Exports during the same period were $16,223,000, or less than 50 per cent, of the amount exported
from March 20 to April 20. Exports and imports since
May 10 have been negligible. Argentina, with
$7,400,000, was the largest recipient of American
gold, and Asiatic countries received $7,901,000 of
the total. This brings our net exports of gold from
January 1 to May 10 up to $100,249,000. Recently
there has been a flow of gold from France to England,
which may be in anticipation of the French Govern­
ment’s share in the payment of the Anglo-French
loan, maturing in New York in October, where
substantial credits have already been established
for British account.



The heavy liquidation in the stock
market continued through the latter
part of April, and after a drifting
period sharp selling again developed. Many stocks
of investment character, alike with speculative
issues, declined to new low levels for the year.
Heaviness of preferred stocks parallels the situa­
tion in the bond market, where older seasoned se­
curities are being sold to obtain funds difficult
to borrow under present money market conditions.
Daily sales during the period established both
high and low records for the year. Trading during
the last two weeks of April averaged over a million
shares a day, and on April 21, when the sharpest
break in prices occurred, exceeded two million
shares, the highest total since November 12. May
trading was much lighter; sales fell on one occasion
to 349,000 shares, the smallest full day’s business
since February, 1919. In the past five weeks,
active stocks suffered losses in one case up to
60 points, and 25 industrial stocks fell 23 points
to 1063^2, approximately 6 pointsfabove the Feb­
ruary low average. Twenty-five railroad stocks
declined 3 points and are approximately 2 points
above the February low point. A number of the
best grade railroad issues sold at unprecedentedly
low prices. Stock sales during April totaled 28,600,000 shares. This is slightly less than the total
for April, 1919, but sales to date this year aggregate
108,000,000 shares, the largest total for a corre­
sponding period since 1906.
B ond M arket

Bond prices have moved down­
ward during the past thirty days, to
approximately 2J^ points below the level on
April 20. This general decline began immediately
after the signing of the Armistice, and, barring
an occasional upward movement, has been al­
most constant, until the average is approximately
16 points below the level at that time. This is
a reflection of advancing interest rates, due to the
growing demand for capital. The average yield
on 40 representative bonds, including industrials,
rails and public utilities, has risen from approxi­
mately 5.5 per cent, in November, 1918, to about
7 per cent, at the present time, an increase of 1.5
per cent.; while the rates of 4-6 months commercial
paper have risen from 6 to 7J^ per cent, during the
same period.
Many of the Liberty bond issues touched new low
records during the past 30 days, and the general de­
cline of nearly 4 points since April 20 is somewhat



greater than the decline of industrials and rails.
Liquidation of Liberty bonds is mainly attributable
to the difficulty of obtaining funds and the high
rates necessary to be paid. The congested condi­
tion of railroad freight traffic is another factor which
prevents the manufacturer from meeting his bank
obligations in due time without resorting to liqui­
dation of securities held. Heavy sales of the taxexempt issue and the rapid decline in price would
indicate sales from the larger investor. Excluding
the 3j^ per cents, the yield on the various issues at
the present time ranges from 5 per cent, to
per cent.
With the exception of foreign loans, bond trans­
actions during April showed increased activity and
sales for the month aggregated $341,912,000, as
compared with $306,209,000 for March, and $293,797,000 in April, 1919. Sales of Liberty issues
amounted to $271,326,000, as against $219,405,000
for the previous month. While 79 per cent, of the
total sales were Liberties, only 13 per cent, were
domestic corporation bonds, and the remainder
foreign bonds. Sales thus far in May are in somewhat
lighter volume, amounting to $73,301,000 for the
week ending M ay 8, and $61,347,000 for the week
ending May 15.

The output of new securities during April was the largest on rec­
ord. The volume was $471,725,600,
as compared with $275,771,300 during March, and
$391,000,300 in October, the previous high record.
Railroad issues amounted to $95,343,000, which was
20 per cent, of the total, as against 16 per cent, in
March. The yields on new issues range from 7 to
IY 2 Per cent., and in some cases even higher, indi­
cating that the borrowers have paid from 8 to 10
per cent, for new money.
The large output in April has had a tendency to
glut the investment market, except for the highest
class railroad issues, and offerings have fallen off
during May, amounting to $23,400,000 for the week
ended May 8, and $65,610,000 for the week ended
May 15. There is still a considerable undigested
supply of some of the recent large issues, and dealers
generally are postponing financing wherever possible, until conditions become more favorable.

The H-1920 series of Certificates of Indebtedness
was oversubscribed in this district. For the first
time since February, 1918, an amount was allotted
by the Treasury less than the amount subscribed.
While the total issue was $100,000,000, this district
subscribed $50,516,500 and $37,239,000 was allot­
ted. These certificates bear 5j^ per cent, interest.


A considerable decline in the num­
ber and amount of commercial fail­
ures in this Federal Reserve district in April, as
compared to a month ago, is shown in the Dun
reports. The number of failures reported decreased
22 from March, 1920, but increased 10 over April,
1919, while liabilities decreased $3,348,075 from
March, and $1,500,100 from the corresponding
month last year. Comparisons are as follows:







The tendency of continental European exchanges has been slightly
upward during the last thirty days,
as a reaction from the undue depression of the
previous month, when there was heavy selling of
French and Italian bills in a seriously congested
London market. Another probable factor was a
renewed hope of exchange adjustments based upon
the contemplated possibility of realizing on German
indemnity bonds in settlement of obligations due
their allies. Francs and lire both gave greater
resistance to the downward course around the middle
of April, and with occasional relapses have advanced
slowly since that time until May 19 and 20, when
there was a considerable decline in francs. Since
the cessation of gold shipments to the United States,
sterling has moved very indifferently, with a slight
tendency downward more recently. In spite of
rapidly increasing inflation in Germany, marks have
continued their upward course practically unin­
terrupted, and reached as high as 2.48. This is
probably due to continued speculation in marks and
also to measures taken by the German Government
to restrict imports of non-essentials. Rates during
the current period were as follows:




China (Hong K on g)............
China (Shanghai).................
Japan (Yokohama)..............
Switzerland .......................
Belgium .................................
xSilver exchange basis.


in England

M AY 1
3 .7 4 %


The evidence of world-wide demand for money, as seen in recent
advances of the bank rates of the
principal European countries, is con­
firmed by reports from England of tight money.
The banks are severely scrutinizing loans and bills,
and the stock markets are reported to have shown
some weakness.
The extent of credit expansion
in England is seen from the following table, which
gives the index of loans, discounts and advances
of 13 large joint stock banks since 1914, taking
June 30, 1914, as a base:
1914 (June 30)
1920 (Jan. 1)

M AY 8

M AY 15
3.8 0 %
3.8 4%

of deprecia­
tion from par
at low for
week of
M ay 15


This great increase of prices, continuing since
the Armistice, as before, has brought the illusion
of a great expansion in trade. The accompanying
chart, showing British imports and exports since
January, 1919, will serve to dispel the current
belief that there has been any such increase
in British foreign trade.
The monthly||figures


Deposits of English banks increased from $4,358,000,000, December 31, 1914, to $9,104,000,000,
December 31, 1919, or 109 per cent. Note circu­
lation, which includes Bank of England notes
and currency notes of the exchequer, aggregated
$2,156,000,000 on April 21, or 15 times the amount
prior to the outbreak of the war in 1914. The
currency notes were issued as a war measure, and
since a part of them displaced gold withdrawn from
circulation, they do not represent a net addition
to the monetary circulation. The actual increase
of monetary circulation (coin and notes) was offi­
cially estimated, last November, at 152 per cent.
< 9/9
Wholesale prices likewise had increased 207 per The relative volume of British foreign trade is here shown,
cent, from 1913 up to March, 1920.
eliminating the effect of the great rise in prices.



have been reduced to the January, 1919, base
by dividing the money values of exports and
imports by the Statist’s price index numbers.
The actual increase in relative volume of exports
from January, 1919, to March, 1920, is thus shown
to be approximately 60 per cent, instead of 120
per cent., as appears from the money figures.
But, on the other hand, instead of an apparent
increase in imports, there is an actual and healthy
decrease of nearly 22 per cent.

Currency in
From March 11 to April 1, the
Bank of France contracted its cirGermany
culation approximately 1,130,000,000
and Italy
francs, and the beginning of real
contraction was thought to be at
hand. Since then, however, the trend has been
toward greater expansion, and the earlier contrac­
tion has been virtually wiped out.
August Mueller, former Minister of Economics,
declares that Germany’s paper money now in circu­

lation amounts to 60 billions of marks, and is in­
creasing at the rate of a billion each week.
During the flotation of the Italian loan in Feb­
ruary and March, approximately 6,000,000,000 lire
of circulating notes were paid into the Treasury
and are held there. This reduces the note circulation
from 18,148,000,000 lire on December 31, 1919, to
12,497,000,000 on March 31, 1920, or nearly onethird. It has not yet been decided whether these
notes will be retired from circulation or paid out by
the Treasury, but if the contemplated policy of
retiring them is followed, it will be the first bold
attempt of any country at currency deflation.


Booking of new Japanese business
by American exporters has been
seriously curtailed, temporarily at
least, as a result of the financial crisis in that country,
but in other parts of the world export demand con­
tinues very persistent. Iron and steel, grain, cotton,

Showing in percentages the relative volume of exports and imports, by months, with the averages of 1917
taken as a base = 100, and with the effect of price changes and the normal seasonal variations eliminated.


oil and coal head the list of products most eagerly
sought for abroad, and in these lines supply and
transportation are the main limiting factors.
The falling away in Japanese buying is important
here, as Japan has been a very active market,
particularly for cotton, iron and steel. Though
some inquiries are still being received from the larger
Japanese houses, numerous cancellations of steel
orders have been reported and offers for re-sale at
material concessions have been noted. Some concern
has been expressed lest transportation delays hold
up shipments beyond the life of the credits, as
there is uncertainty as to the granting of renewals
by Japanese bankers.
Certain exporters of mach­
inery and tools report a continuing good demand
in Japan, and an excellent market in India and
South America, while European buying has not
fallen off. The growing interest of British India
in American products is noted by many exporters;
steel, machinery, and automotive products find
a good market there. Holland is inquiring for steel
rails for the Dutch East Indies, Scandinavian
canning industries are buying considerable amounts
of tin-plate here, and some ship-plate is being sold
to England. South American steel buying is active
for near deliveries, but some hesitancy is noted in
placing future delivery orders at present prices.
Cotton exports have been somewhat slower re­
cently, with new orders for spot and near deliveries
smaller, reflecting the decline in Japanese buying
and labor troubles in the Lancashire mills, but
British buying of fall deliveries continues brisk.
Grain goes forward as steadily as transportation
delays will allow, and there is every prospect that
Europe will take all that this country can ship.
Foreign demand for coal is growing more insistent
daily, both from Europe, particularly Scandinavia
and Italy, and from South America, as declining
British coal exports prove insuflScient to supply
those markets. Automotive industries report or­
ders, particularly from Canada, Cuba, and South
America. Great Britain is buying more since the
recovery in exchange, and trucks and tractors have
been sold to India and Italy. Hardware and agri­
cultural implements are in demand throughout
Europe and South America. Increased exports
of copper are expected if credit plans now reported
in prospect can be consummated. Foreign buying
of leather which dwindled during the winter has


not been resumed. In certain countries, particularly
in Portugal and France, Governmental regulations
have hindered trade. The ban on luxury imports
in the latter country touches the American auto­
mobile industry; but as only about 7 per cent, of
automobile exports have been billed to that country
the trade as a whole will not be seriously affected.
April exports from the United States totaled
$684,000,000, which was a decline of $135,000,000
as compared with March. Exports during April
are normally about 8 per cent, below those of March,
and April average prices were about 5 per cent,
higher than March. Correcting for this seasonal
variation, and for inflated values, a foreign trade
index prepared by this bank stands at 94.9 for April
against 110.3 for March. This means a fall of about
14 per cent, more than normal, and about 22 per
cent, altogether. Imports for April showed a
nominal decline of $30,000,000 from March, to
$495,000,000, which meant a decrease in the index
of from 133.3 to 128.8, or about 3.4 per cent, more
than the normal. The chart printed on the opposite
page shows the course of the movements monthly
from January, 1917, taking the average of the twelve
months of 1917 as a base, and correcting alike for
the normal seasonal changes and for the rise in
average prices.


The long-expected decline in retail
prices has taken concrete form dur­
ing the past month. Sudden and
drastic reductions, ranging in extreme cases to 50
per cent, or more, have been made in many lines.
These have been heaviest in some lines of milli­
nery, silks, furs and seasonable wearing apparel.
At the same time there have been advances in the
prices of automobiles, pianos and cabinet musical
instruments, while the prices of high-grade jewelry
have held steady.
Bargain sales in May are usual, and a reference
to last year’s newspaper files shows advertised re­
ductions as high as 35 per cent, on women’s dresses.
This year sales are much more general and much
more advertised. They appear to be due to two
main causes: first, a desire to liquidate high-priced
stocks which are difficult to carry under tightening
credit conditions; second, an attempt to overcome
the waiting attitude on the part of the public.



The high cost of doing business, coupled with
uncertainty regarding future prices, due to pro­
duction, particularly in textiles, overtaking the
demand, made the market exceedingly nervous.
The financial crisis in Japan, with the consequent
decline in the price of raw silk, for which it is the
main present source of supply, aggrevated the sit­
Stocks of large department stores in New York
City and Brooklyn were 50 per cent, greater in
dollar value at the end of April than they were on
the corresponding date last year. This was mainly
due to the fact that while their sales were 66 per
cent, greater in value in March, 1920, than in March,
1919, they were only 15 per cent, greater in April
than in xApril last year. This indicated a falling off in
volume of sales, for prices increased much more than
15 per cent, within the year. When the first weeks
of May showed retail trade conditions growing
steadily worse, price reductions followed.
These reductions and the warm weather that
came the third week of the month stimulated buy­
ing to a great extent. Particular activity was
noted in the sale of millinery; one dealer reported
having the biggest single day in ten years. Straw
hats sold in large numbers, as did shoes, and there
was a strong demand for dress materials. M en’s
and women’s clothing moved in considerable volume.
Purchasers generally were conservative and bought
necessaries rather than luxuries. There was a good
demand for the better class of merchandise, but the
bargain sales also brought out the poorest class of
buyers who sought the odds and ends.
Although there have been recent sales of “ bar­
gain” clothing by manufacturers and converters,
these seem to be of orders cancelled because of
transportation delays. The decline in wholesale
prices has not followed that in retail lines, but
domestic and foreign demand have lost the insis­
tence of the past year and production is catching
Leather exports, for instance, have fallen off
and there are large quantities in warehouses. Cases
are reported of 5 and 10 per cent, declines on whole­
sale shoe prices for fall delivery. At the recent
primary fur auction in St. Louis, prices declined an
average of 25 per cent, and the retail prices have

since fallen off an equal amount.
metals are tending downward.

Textiles and

Food prices, in many cases, were advanced by
transporation troubles. Automobiles, pianos and
cabinet musical instruments are sold by concerns
of national scope, and prices are made at the head
offices, which are naturally deliberate in their
policies. The production of these things, and
particularly of jewelry, has lagged far behind the
demand. But even in these lines, hesitation and con­
servatism in recent buying have been noted.

In spite of the widely advertised
cuts in some retail prices, there was
up to May 17 no measurable decline
in the level of wholesale prices. The index of 12
basic commodities prepared by this bank stood
on May 17 at 112.9, a new record, as against 109.9
on April 15, and 103.2 on January 1, the low for
the year. During the week ended M ay 24, there
was a decline of two points to 110.0.
The Bureau of Labor index for April recorded
an increase of 13 points to 266, the average of
prices in 1913 being taken as a base of 100. This
was the largest increase in this index since the
Armistice. In the face of all the varied efforts
to reduce prices, this index now shows a rise of 31
per cent, for the last 12 months, a rate of increase
equalled in only one year of the war. Food prices
were likewise at peak, and 5 per cent, above the
previous record of last January.
Canadian prices in April advanced from 258 to
261. In England, the Economist’s index showed
a decline of 1.4 per cent, and that of the Statist
an equally small advance. Prices in France in
March rose from 520 to 554, and in April to 584,
an increase of 80 per cent, in 12 months. In Italy
there was an even greater rise, carrying the index
from 504 in January to 619 in March, very nearly
twice the figure for March a year ago. In Japan,
March prices rose from 313 to 321, or 56 per cent,
in a year. But they declined 21 points in April,
to 300. The collapse in Japan, following the panic
there, is the first notable decline in any country
since the general rise all over the world began about
12 or 14 months ago. The diagram on the next page
shows the course of prices in this country from the


and M etals

Steel mills are still seriously crippled by the freight congestion. Many
of them are only able to run at about
65 per cent, of capacity, because of the shortage
of fuel. Buying and selling are secondary to the
efforts to move freight. It is estimated that 1,000,000 tons of finished steel are held awaiting shipment.
Prices in the United States have advanced slightly
over a month ago, and marked advances have oc­
curred in Great
B rita in , where
forge iron is up
$3.50 per ton;
billets, $3.85; and
sheets $13.50 to


foreign credits, and high prices which checked
foreign buying, were responsible for the reduction
of approximately 250,000 bales in April exports,
as compared with those for March. The Census
Bureau places the April consumption in this country
at 567,000 bales, against 575,704 bales in March
and 475,875 bales in April last year.
The total
domestic consumption from August 1 to May 1
was 4,803,338 bales, or 510,000 bales more than
for the corres­
ponding period in
1918-19. C o m ­
pared with a year
ago, stocks in
the United States
have d e c r e a s e d
a b o u t 4 0 0 ,0 0 0
bales, but in Eng­
April pig iron
land there has
production in the
been an increase
U n i t e d St ates
of 800,000 bales,
d r o p p e d to a
daily average of
which represent
91,327 tons, as
increase in Amer­
against 108,900 in
ican cotton. Two
M arch.
main factors have
daily average pro­
worked in op­
duction of steel
posite directions
ingots declined
on cotton prices
from 145,000 in
during the past
March to 120,760
month. Bad crop
in April. British
conditions have
produ ction also
had a bullish
de c lin e d . In
effect, which has
April 671,000 tons
been more than
of iron were pro­
Since the Armistice, the Bureau of Labor Index of wholesale prices
offset by trade
duced, against
(328 commodities) has shown a much greater rise than
conditions. The
699,000 in March.
the great basic commodities which underlie.
Government re­
Barring the fi­
port on M ay 12
nancial crisis in
Japan, which may reduce the hitherto strong was less favorable than had been expected. There
demand from that country, the export situation has have been excessive rains, fields are grassy, the
not materially changed since a month ago. Copper, boll-weevil has already appeared in several Southern
zinc and tin prices are lower than a month ago, counties of Georgia, and there is a great scarcity
the two former having shaded off, while the latter of negro labor. On the other hand there have been
has declined more radically in sympathy with the labor troubles at the mills, exports are falling off,
falling British market. Lead has not materially and some orders have been cancelled as retail
changed from a month ago. April sales of copper demand has slackened and prices have shaded off.
were estimated at about 101,000,000 pounds, less
The Textile
The collapse in silk prices has
than one-third the sales in March.
brought on a serious crisis in the
silk industry. The present quotation
C otton
Spot cotton, which reached 43.25
on April 16, had, after wide fluctua­ in silk is now around $8 per pound, as against $18
tions, dropped to 41.15 by the middle of May. two months ago. This latter was the usually pub­
Railroad embargoes, a tendency to restrict lished figure, but sales at even higher prices were



A number of mills in Paterson, N. J.,
the headquarters of the industry, are running on
half time or closed down altogether. Woolen mills
of this district report a high volume of production
still, but it is clear that the supply is overtaking
the demand, and that the long-prevailing sellers’
market has come to an end. Some heavy can­
cellations have occurred in woolen orders, and still
more so in the silk trade, but not, apparently, in
knit or cotton goods. In the latter there has been,
apparently, no slackening in the demand.

While a considerable amount of
building is being done in New York
City it is mostly of lofts, office
buildings and garages. There is comparatively
little home building, a great part of it remodeling
of private dwellings into apartments and the erection
of several big hotels. These latter projects in­
volve large sums of money and give the appearance
that a greater number of residences are being built
than is actually the case. In the suburban districts,
however, a number of houses are being constructed.
The records of the F. W. Dodge Company show
that 48 per cent, of the contracts let in Greater
New York in 1919 were for residential projects, but
that during the first four months of 1920 they have
declined to 32 per cent, of the total. Builders
say that at present high prices capital is not at­
tracted to apartment projects. The possibility
that prices will decline within a short time and
greatly depreciate the original investment, is a
potent deterrent factor.
According to the Dodge figures, projects of all
kinds contemplated in April in this district amounted
to $104,490,300, and contracts awarded to $87,741,100, both increases of about $20,000,000 over
the March figures.
Rents for business property in particularly desir­
able parts of New York City have recently made
marked advances, in some cases as high as 100
per cent. Many apartment dwellers have organized
syndicates and bought the apartment buildings
in which they are living. This is the result of rap­
idly mounting rentals, which have induced tenants
to take this step to reduce operating expenses to a
minimum and to absorb the profits of private
Im m igration
The number of aliens entering
and leaving the port of New York
Em igration increased considerably in April over
March. As has been the case during
the past several months, about 25 per cent, of the

arrivals are Italian reservists who returned to Italy
during the war. Lately there has been a consider­
able increase in the number of young Irishmen
coming to this port and immigrants from the British
Isles compose about 15 per cent, of the total. The
majority of the immigrants is still composed of
women and children who have come to this country
to join relatives.
About 250,000 Polish Jews
are reported to be coming to America.
As pas­
senger service between Holland and America, which
was interrupted by strikes at Amsterdam, is being
resumed it is not unlikely that some of these immi­
grants are now on the way over. A competent
authority says immigration to this country is limited
only by ship capacity. Departures and arrivals of
aliens at the Port of New York during the past
six months are shown in the following table:
Immigrants Emigrants
............ .24,641
................ .34,529
February....................... .25,057
M arch.............................22,086
April ............................ .36,598


E m ploym ent

The labor situation, in general
shows improvement over a month
ago. Effects of the switchmen’s strike have been
partly overcome in New York City, but conditions
are not so good at Buffalo. Factories throughout
the district have been compelled in many instances
to curtail production on account of the failure of
shipments to arrive, and they have reduced their
working forces or cut their working time.
Data compiled by the New York State Industrial
Commission show that the average weekly earnings
of employees in 1648 factories in the State was $27.80,
a decrease of only seven cents from the March aver­
age. As there were increases in earnings at factories
not affected by the transportation difficulties, this
slight decline probably does not reflect the extent to
which many workers were affected. The principal
declines occurred in some divisions of the metal pro­
duct industries, in printing, shipbuilding, in factories
making automobiles and in those manufacturing
some food products. The shoe manufacturing
and clothing industries show decreases as a result
of the decreased demand.
There has been some friction between organized
labor and companies erecting structural steel, who
insisted on the open-shop plan. Some of these


differences have been adjusted recently and build­
ing should now proceed more rapidly. A volun­
tary wage increase of $1 a day for the 115,000
workers in New York City was announced by the
Building Trades Council, to take effect as of May 1.
Quantities of food have piled up at the piers as
the result of the truckmen’s strike. They went
out in sympathy with the striking longshoremen.
There have been several other strikes which were
quickly settled, but a strike of captains and en­
gineers of tugs handling car ferries in New York
harbor is still in progress.
According to the New York Field Agent for the
Bureau of Crop Estimates, the number of hired
men on the farms of this State is 16 per cent, less
than last year and 38 per cent, below normal for
this season. This is due in great part to the emi­
gration of workers to the cities to take advantage
of prevailing high wages. Farm wages for labor
are increasing rapidly, however, and this should
restrain the exodus from the farms.

Railroads and The cumulative effect during the
Transporpast month of six separate strikes
of workers on the transportation lines,
both rail and water, has been vastly
to increase the car shortage and freight congestion
in the railroad yards, limit exports, and either cur­
tail production or stop work entirely in a large num­
ber of factories in the district. Supplies of dead
freight have been held in the railroad yards several
weeks at a time, while every effort has been made to
deliver coal and food products. Even these ship­
ments have been carried, at times, only with the
greatest diflBculty.
The transportation lines were not yet operating
normally following the partial return of workers
after the general walkout early in April when a second
strike of switchmen in Buffalo blocked a consider­
able volume of through traffic there. In addition
harbor workers quit work in both New York and
Buffalo and the coastwise shipping lines were tied
up by walkouts of longshoremen, boatmen, and
truck drivers. The railroads in New York, unable
to lighter export freight through lack of tugs, were
forced to declare an embargo on these shipments,
while grain boats in Buffalo were often unable to
unload their cargoes at the elevators. As a result
the export freight movement in New York shrank
nearly 50 per cent, in volume.
During the past three weeks the situation has
clarified somewhat and most of the roads are now


carrying a volume of freight only slightly below
normal, but still have to contend with the conges­
tion of cars accumulated in the yards during pre­
vious weeks. With the gradual improvement in
tug power, however, the great volume of export
freight in the yards is being gradually reduced. The
car movement figures of a road which in the last
half of April moved 15 per cent, fewer cars than in
the same period of 1919 have so improved that in
the first two weeks of M ay this movement was but
2 per cent, less than last year.
In relieving congestion recourse has been made to
automobile trucks and to the New York State
Barge Canal system, though the high cost and
restricted supply of trucks and the lack of boats
and slowness of canal transportation have limited
results. The barge canal, carrying fully 50 per
cent, greater traffic than last year has 500 boats
in use, transporting non-perishable commodities
from the Great Lakes and upper New York to the
New York City docks. Fully 1,000 more boats
could be kept in constant use if available.
Trucking service, which until recently has only
been used for short distance hauling, has been widely
adopted, almost regardless of expense, by factories
which without the use of trucks would have had to
curtail production or accumulate finished products
at the factory. Regular routes have been estab­
lished by a number of manufacturers connecting
the large cities for carrying both raw materials and
finished goods. Some manufacturers have been
obliged to resort to the use of trucks for carrying
even such crude material as pig iron. The large
packing concerns and others handling perishables
have used trucks to a considerable extent in bringing
their food products to New York City from the
neighboring railroad junctions and freight yards in
New Jersey. Merchants in some instances have
had to use passenger automobiles for making subur­
ban deliveries.
There has been active bidding by manufacturers
for the temporary use or purchase of trucks to meet
emergency factory or distribution needs. However,
such trucks can be used on long hauls with any
approach to economy only for less bulky and more
expensive goods, since the cost of operating is said
to average about $35 to $60 per day per truck. As
a result of these methods the burden has been lifted
somewhat from the railroads. The truck drivers’
strike has caused much inconvenience in the hand­
ling of goods intended for the coastwise ships, but
the New York merchants are organizing trucking
lines of their own to take over this work. Pier



congestion has been partially relieved by diverting
export freight originally consigned through New
York forwarding houses to other ports, and shipping
men estimate that about 80 per cent, of such freight
is being routed in this manner.

a reduction of 38 per cent, from the year of greatest
expenditures, and an increase of more than 740 per
cent, over the year immediately preceding the war.
For the present fiscal year the expenditures are
estimated roughly at $6,000,000,000.

The figures of the American Railway Association
show that in the past twenty years there have been
but two other periods of acute car shortage in this
country similar to the shortage which has recently
been further complicated by the freight tie-up.
In February of 1907, at the height of the period of
industrial expansion preceding the panic of that
year, there was a shortage of 138,000 cars. There­
after until 1916 there was never again an acute
shortage, in fact, there was always a considerable
surplus of cars during all but the three or four
crop moving months. But in the harvest period
of 1916 the situation was complicated by heavy
shipments of war materials and on November 1,
there was a shortage of 115,000 cars.

The ordinary and extraordinary budgets for
France are estimated at $4,898,000,000 for 1920,
compared with total expenditures of $7,610,000,000
during 1918, and $978,000,000 during 1913. There
will be an additional expenditure, however, due to
reparation of war damages, estimated at $4,264,000,000, which it is hoped will be paid from the indemni­
ties due from Germany. The ordinary budget, which
amounts to $3,448,000,000, is to be met entirely by
taxation, and the extraordinary budget of $1,450,000,000 is to be met by liquidation of war stocks on
hand and by loans.

During 1917 and 1918 supply and demand were
about evenly matched and, following the Armistice,
there was a heavy surplus in the early months of
last year. During the past winter, however, a short­
age developed which has now reached a maximum of
over 82,000 cars which the recent heavy railroad
equipment purchases will not be able to relieve
for many months.

Although more than eighteen
Expenditures months have elapsed since the sign­
ing of the Armistice, the Government
expenditures of the principal allied countries are
still many times greater than during the pre-war
period; and the decrease in such expenditures from
a wartime basis has not met general expectations.
It is estimated that the expenditures of the United
States Government, outside of purely financing
operations, for the twelve months’ period ending
June 30 next, will reach approximately $6,750,000,000, or at the average rate of $18,000,000
per day. This compares with the sum of $15,000,000,000 during 1918-19, and $723,000,000, ex­
cluding Panama Canal disbursements, during 191516. This represents a decrease of 55 per cent,
from the year of the greatest war expenditures,
while it is an increase of more than 800 per cent,
over the fiscal year immediately preceding the war.
For the fiscal year ended March 31, 1920, Great
Britain’s expenditures totaled $8,105,600,000, against
$13,119,800,000 for the fiscal year 1917-18, and
$961,000,000 for the year 1913-14. This represents


Farm work in both New York and
New Jersey has been greatly delayed
this spring by the backwardness of
the season, frequent rains, and cold weather. With­
in the past three weeks, however, preparation of
the ground has gone forward rapidly, and oats, bar­
ley and spring wheat have been planted.
A serious shortage of labor exists in all but a por­
tion of the western part of New York State and this,
together with delay in shipments of fertilizer and
seeds by reason of the rail embargoes, has limited
planting to some extent. Acreage of potatoes will
be reduced about 3 per cent., notwithstanding
present high prices, while beans will be reduced
about 10 per cent., and all other crops, with the
exception of hay, will also be restricted. The aver­
age reduction for New York is very much less,
however, than in other states, since the 3 per cent,
reduction in potato acreage compares with an
average reduction in the three other important potato
states of 9 per cent. The reduction of 10 per cent,
in the area planted in beans compares with a 29 per
cent, reduction from last year in the five other im­
portant bean producing states.
The wheat crop in this state is in excellent con­
dition, averaging 94 per cent, of normal on M ay 1.
Only a very small amount of winter wheat was killed,
and this crop is expected to yield the average of 22
bushels per acre. The rye fields are in slightly bet­
ter condition than usual, although there is an 11
per cent, reduction in acreage. In New Jersey a
wheat yield of about 17.2 bushels per acre is indi­
cated with an acreage reduction of about 13 per
cent. In that state, too, the rye yield will probably
be high on about 97 per cent, of last year’s acreage.