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(The article on the last page relates to membership in the Federal Reserve system ) M ONTHLY O f C r e d it a n d I n B y th e F e d e r a l t h e S e c o n d R e s e r v e C r e d it B u s in e s s F e d e r a l A g e n t , New York, C o n d itio n s R e s e r v e F e d e r a l November 1, D is t r ic t R e s e r v e B a n k , money rates were still m oving downw ard. Change from July 26 and the loans and note issues of the F e d e ral R eserve July 26 Aug. 30 Sept. 27 Oct. 25 The accom panying table shows the amounts of these increases. In fou r of the essentials o f business activity — credit, ra w m aterials, labor, and transportation— indices of the relationship between su p p ly and dem and have turned u p w ard du ring the past year. F o r credit, ra w m ate rials, and labor, the best indices of the relation of su p p ly and dem and are found in prices in the open market, and in the case o f transportation, a m easure is available in the shortage or surplus o f freigh t cars. T y p ic a l figures fo r all fo u r are presented in the diagram s at the foot of this page and the top of the follow ing page. A d van ces in (Dollar figures in millions) past month in an additional rise in interest rates, and in a fu rth er increase in the commercial loans of banks Member Banks* Commercial Loans New York City........................... All Reporting Cities................... All Federal Reserve Banks Notes in Circulation.................. Loans to Member Banks.......... Purchased Bills and Securities held............................................ Interest Rates: Commercial Paper (prime 4-6 mos.)........................................ Bankers Bills (prime 90 d a y).. Yield on U. S. Certificates of Indebtedness (4-6 m os.).. .. Yield on Liberty Bonds............ A y e a r ago the prices o f ra w m aterials began to be a fPER CENT. Y o r k 1922 ous indices o f credit conditions, referred to in the last issue of the R eview , has resulted du rin g the Banks. N e w fected b y increasing business a ctivity while w ages and C o n d itio n s H E change in the direction of movement of v a r i T R E V IE W 1,997 7,279 + 11 0 + 20 +119 + 32 +264* 2,127 380 + 26 + 24 +116 + 40 +172 + 89 - 18 + 14 4 3 0 0 + + M + *to f + i 3.14 3.89 + . 11 + .31 + .16 + .35 + .91 + .68 625 0 *Octo ber 18 DOLLARS INTERE:ST RATES\ \ PAIPER 1 on com1ERCIAL Average Monthly Prices of 20 Basic Commodities Weekly Hiring Rate of Wages for Un skilled Labor in the 2nd District 1 9 f9 1 92 0 1921 192 2 Open Market Interest Rate on Prime 4 to 6 Months Commercial Paper MONTHLY REVIEW 200 1907 19 0 8 1909 1910 1911 1 9 ?£ 1913 1 9 1 4 1915 1 9 1 6 19L7 1 9 1 6 1919 1 9 £ 0 19£1 Net Surplus or Shortage of Freight: Oars the First Week of Each Month. recent weeks, however, have been strikin gly rapid. An index kept b y this bank shows that prices of 20 basic commodities are now 1 4 per cent, higher than a y ea r ago. The increases b rin g prices of ra w m aterials more nearly in line w ith prices of other commodities at wholesale than has been the case fo r a y e a r and a half. A n index compiled b y this bank of the h iring rate of wages for unskilled labor in this district, which rep re sents open m arket labor conditions, has risen 9 per cent, since J u l y . Th is increase accompanies a gain of over 4 per cent, in the num ber of persons employed in fa c tories of N ew Y o rk State, which brings employment fig ures above the 1 9 1 4 level for the first time in m any months. The latest evidence of a heavier volume of business is found in a freigh t movement so h eavy as to result fo r the time being, at least, in a shortage of freigh t ears. The total freigh t movement has now reached a point p ractically equal to the record figures of 19 20 , due to the coincidence of exceptionally h eavy shipments of merchandise and miscellaneous freight, the resumption of coal m ining on a large scale, and a h eavy seasonal movement of ore, grain, and other commodities. The roads are ham pered in su p p lyin g the necessary cars and 19EE (Figures not reported November. 1914-January, 1915.) m ay be m aterially alleviated by loading and routing of cars. a more economical G o v e r n m e n t F in a n c ia l O p e r a tio n s The offering b y the Governm ent on October 9 of $500,000,000, or thereabouts, of 4 14 per cent. 2 5 -30 ye a r bonds m arked a new stage in the T r e a s u r y ’s program for dealing w ith the early m aturing debt. L ik e the re cent issues of T rea su ry notes, the new issue w as solely of a refu n din g character and fo r the purpose of redis tribu ting m aturing obligations into more distant and manageable m aturities, but unlike them was fo r a long term. It constitutes the first long time bond issue since the L ib e rty loans. The new bonds were in h eavy de mand, and cash subscriptions were in the neighborhood of $1,400,000,000, w ith exchange subscriptions of V i c tory notes and certificates of indebtedness of about $ 2 5 2 ,000,000, m aking a total of over $1,650,000,000. Subscriptions on the cash offering fo r amounts in ex cess of $10 ,0 0 0 w ere scaled in order to perm it the m ax i mum percentage of allotments to the sm aller purchasers. The follow ing table, showing the allotments classified according to size, indicates a large participation in the loan b y com paratively small buyers. locomotives fo r this movement owing to restricted b u y ing of equipment for some years past, and to an accum u C l a s s i f i c a t io n lation of bad order equipment in the past 1 8 months. $10,000 and under............................................................ $10,100 to $50,000........................................................... $50,100 to $100,000......................................................... $100,100 to $500,000....................................................... $500,100 to $1,000,000.................................................... Over $1,000,000................................................................ Total................................................................................ In ju d gin g the seriousness of the shortage it should be borne in m ind that freigh t movement usu ally diminshes somewhat after the early weeks of October, and that ex perience of previous periods of shortage in the fall of 1919 and d u rin g 19 2 0 indicates that shortage conditions A llotm ents $327,554,600 29,718,200 23.714.500 52.648.600 30.301.500 47.447.600 $511,385,000 FED ER AL RE SER VE AGENT A T NEW YORK A ccep ted allotments of exchange subscriptions, 3 MlLLlONS OF DOLLARS am ounting to $252,000,000, raised the total of all allot ments to over $763,000,000. B ill M a r k e t D ea lers’ offering rates fo r prim e unindorsed bills were advanced successively from 3% per cent, e a rly in October to 4 p er cent, tow ard the end of the month. B id rates were advanced proportionately to 4ys and 4 % p er cent. A cco m pan yin g these advances a broader m ar ket was found among investors than for some months previous. The volume of bills offered in the m arket w as some w hat larger than in recent months, reflecting the in creased use o f credit in the seasonal movement of crops and commodities. Commercial Paper Outstanding— Twenty-seven Dealers B ills in the m arket du ring October continued to cover a w ide range o f commodities, while those d raw n to finance the im portation of ra w silk and sugar and the exportation of cotton and foodstuffs w ere most numerous, and constituted a large proportion of the whole volume. ber. D u rin g the first three weeks o f the month the average d a ily rate on new call m oney loans was 4% per cent., the highest since F e b ru a ry , and on fou r days the m axim um rates fo r some loans reached 6 per cent. The generally higher average reflected an increased demand upon lenders from both stock m arket and commercial C o m m e r c ia l P a p e r sources, while the extrem e advances w ere due in large The rise in commercial p aper rates, which began in September, w as continued in October w ith an advance o f 1/4 o f one per cent, in the rate fo r prim e paper to a ran ge o f 4 1 ^ to 4 % per cent. In some cases, paper of less high grade w as sold at 5 per cent. measure to the coincidence o f Columbus D a y currency requirements and h eavy mid-month transactions. Tim e money rates likewise advanced and were quoted at 4 % to 5 per cent., compared w ith 4y 2 to 4 % per cent, the preceding month and 3 % to 4 ^ F ir m e r money conditions were not the result of any per cent, at the recent low point. increase in supplies of paper, but reflected decreased demand from buyers. D ealers continued to report scarcity o f offerings, and lists of p aper fo r sale were re duced in some cases to the lowest point in recent years. S to ck M a r k e t Fo llo w in g a reaction in Septem ber sim ilar to that A p p are n tly , the higher commercial paper rates and con which sequent n arrow ing or disappearance of the advantage strongly early in October and representative averages o f financing through the open m arket has had the effect again reached new high levels fo r the year. o f d iverting increased commercial demand d irectly to the banks. took place in Ju n e , industrial stocks rallied Th is move ment on the p a rt o f the averages w as accom panied b y an unusual amount o f irre g u la rity in individual issues. These conditions are reflected in a slight decline d u r T ra d in g in railroad stocks w as relatively ligh t and while ing Septem ber in the outstanding commercial p aper of prices strengthened somewhat in sym p ath y w ith indus the tw enty-seven dealers who report to this bank and trials, th ey did not com pletely recover previous losses. whose m onthly figures are plotted in the accom panying diagram . Total stock transactions on the N ew Y o rk Stock E x change du ring Septem ber w ere 22,000,000 shares, the S to ck M a r k e t M o n e y R a te s The firmness in the Stock E xch an ge money m arket noted du ring Septem ber became more m arked in Octo- largest since Ju n e. T ra d in g w as still heavier du ring the first three weeks of October, when d a ily transactions were frequen tly more than a million shares. 4 M ONTHLY R E V IE W Bond Market The firm er m oney conditions o f October were accom panied b y a fu rth er reaction in bond prices. On Octo ber 20, the W a ll Street Jo u r n a l's average of 40 cor ing in the middle of Septem ber, while yields on the 3 to 4 y ea r T re a su ry notes increased approxim ately of one per cent. N e w F in a n c in g poration issues showed a loss of sligh tly more than 2 points from the high levels reached about the middle of Septem ber. Th e decline among prim e railroad issues w as p a rtic u la rly marked. T he follow ing table shows the average decline from the high points in fo u r representative groups of cor poration issues, according to the W a ll Street Jo u r n a l’s figures. 10 Highest grade rails................ 10 Second grade rails................. 10 Public utilities........................ 10 Industrials............................... Combined average................... High October 20 Change 92.05 89.27 91.00 96.96 92.12 87.97 86.51 89.77 95.89 90.03 -4 .0 8 -2 .7 6 -1 .2 3 - 1 .0 7 -2 .0 9 A f t e r rising to about $125,0 0 0 ,0 0 0 a week or higher for a period in Septem ber, offerings of new securities decreased du rin g the first p a rt o f October to ap pro xi m ately $50,000,000 weekly. Th is total, however, in cluded several large issues fo r w hich there proved to be an excellent demand. Fo llo w in g the sale o f the T reas u r y ’s new long term refu n din g issue, p rivate and fo r eign governm ent financing du ring the th ird week again rose above $100,000,000. In general, there w as little change in the yield basis of offerings, though in cases of certain slow m oving is sues of the State and m unicipal group some new con cessions were granted to buyers. A m ong the corporation issues, public u tility financing w as especially prominent. P rim e S ta te and m unicipal securities also fell some w hat below their highest levels. Declines were largest in the case of the highest priced issues. F o reig n bonds, on the other hand, became firm er early in the month as the situation in the N e a r E a s t became more settled. L a te r in the month reactions again accompanied w eak ness in foreign exchange. A feature of the m arket w as increased offerings of foreign issues a fter several months of un usually low totals. Offerings of this group du ring the first three weeks of October aggregated $68,000,000, and included $20,000,000 Province of Ontario 20-year 5s, $18,0 00,0 00 K ingdom of N o rw a y 30-year 6s, and $16,000,000 R ep u b lic of H a iti 6s. These were reported to have been well distributed. Septem ber trad in g on the Stock E xch an ge totaled $217,00 0,000 , less than the figures for the most active months of the year, but 70 per cent, over the Septem ber total last year. F o r e ig n E x c h a n g e U n i t e d S l a t e s G o v e r n m e n t S e c u r it ie s Reflecting the same conditions affecting the general bond market, L ib e rty bond prices declined in October and b y the latter p a rt o f the month the 41,4 per cent, issues showed losses of about a point from par. The ta x exem pt 3 ^ s were an exception to the general trend and rose to 10 3 , the highest point at which th ey ever sold. There w as later a reaction to about 1 0 1 . Transactions in Governm ent issues on the Stock E x change du ring Septem ber were only $88,000,000, the sm allest since the w ar with the single exception of A u g u st, 1 9 2 1 . The reduction p a rtly reflects the refu n d ing of V ic to ry notes into T re a su ry notes which are not quoted on the E xch an ge. The volume of trad in g was larger in October, due both to the listing of the new refun din g 4 % s and to increased a ctivity in the older issues. A ft e r declining to $ 4 .3 8 at the end of Septem ber, sterling recovered du ring the first three weeks of Octo ber to $4.48, w hich w as 3 cents below the high point fo r the year. There w as later a moderate reaction. E x change on F ra n ce and B elgium tended downw ard throughout the month, and reichsm arks declined p ra c tica lly 60 per cent, to a new low price o f 1 / 4 0 of a cent. The Germ an floating debt increased more than 48 per cent, in September, from 356,000,000,000 m arks to 5 28 ,000,000,000 m arks and the Reichsbank note circulation expanded from 238,000,000,000 m arks on A u g u st 3 1 to 375,000,000,000 m arks on October 14 , an increase of nearly 58 per cent, in six weeks. E x ch a n g e on N o rw a y and Sweden advanced substantially, accom panying the flotation of a N orw egian Governm ent loan in this m ar ket. The price of bar silver at N ew Y o rk declined slightly, coinciding w ith slight weakness in rates on several F a r E a ste rn centers. South A m erican rates have been w ith out im portant change except fo r a decline in B razilia n O ffering rates on outstanding issues o f certificates and notes showed advances conform ing w ith changes in other money rates. Y ie ld s on 4 to 6 m onths' issues rose a p proxim ately 1/2 of one per cent, from the yields p revail m ilreis from 1 2 cents to 1 1 cents. The following table compares changes in the p rin cipal rates from a month ago and a y e a r ago. FED E R A L R E SER VE AGENT A T NEW YORK Country Oct. 20 Last England........................... 4.4638 France.............................. .0738 Italy................................. .0420 Germany......................... .0003 Belgium........................... .0683 Holland............................ .3907 Switzerland..................... .1824 Spain................................ .1536 Sweden (Stockholm). . . .2666 Argentina......................... .3607 Brazil............................... .1107 Japan (Yokohama). . . . .4800 China (Hong Kong)... . .5563 China (Shanghai).......... .7338 India................................ .2913 Canada............................. 1.0014 Bar Silver in New York .6675 Change from Sept. 20 1922 Change from Oct. 20 1921 Per cent, depre ciation from par + .0325 -.0 0 2 8 -.0 0 0 4 -.0 0 0 4 -.0 0 3 1 + .0037 -.0 0 4 5 + .0023 + .0015 + .0079 -.0 0 9 9 -.0 0 1 3 -.0 1 5 0 -.0 3 7 5 + .0050 + .0017 -.0 2 8 8 + .5163 + .0005 + .0024 -.0 0 6 4 -.0 0 3 9 + .0515 + .0013 + .0217 + .0361 + .0423 - .0 1 3 5 + .0025 -.0 0 7 5 - .0 6 0 0 + .0194 + .0876 -.0 4 8 5 8.3 61.8 78.2 99.9 64.6 E x p o rts for the whole month of Septem ber rose $ 1 7 ,000,000 to $317,0 0 0 ,0 0 0 , and were the largest since the Ju n e high point of this year, when the total w as $ 3 3 5 ,000,000. In p a rt at least, this advance was due to an in crease of more than 96,000 bales in cotton shipments, which in the preceding month had fallen to the lowest in about two years. Reports as to current orders indicated in general little variation from conditions prevalent a month ago. O r ders from most South A m erican countries and A u s tra 2.8 5.5 20.4 0.5 15.0 65.9 3.7 lasia ap paren tly continued to increase slow ly in number and variety, but an y general increase on export trade was retarded b y continued dulness in steel demand, a fallin g off in bu yin g of copper, and slow bu yin g of 40.1 grains. + 0 .1 C all for A m erican wheat continued to be a f fected b y lower prices of the Canadian crop, and tran s portation delays. *Silver exchange basis. W o r l d P r ic e s G o ld M o v e m e n t The general level of world prices tended to be lower du ring September, continuing the A u g u st declines. In Im ports o f gold into the U nited States du ring S e p tember amounted to $29 ,316 ,0 0 0 , of which $8,442,000 Great B ritain , Canada, N o rw ay, Sweden, Denm ark, and came from E n glan d , and over $2,000,000 from F ran ce. Total exports were $ 1,3 9 8 ,6 0 7 . the N etherlands, average prices stand at a lower level than at an y time since the fa ll in prices began in 19 20 . The prin cipal groups of commodities contributing to (000 omitted) price declines w ere farm products and foods. P rices of potatoes, a staple food in most countries, are p a rticu Monthly Av. Country Jan.Mar. 1922 A prJune 1922 July 1922 Aug. 1922 Sept. 1922 England.......... $6,266 $1,954 $38,066 $13,270 $8,442 Sweden............ 9,345 1,174 246 114 583 Canada............ 1,765 816 580 232 393 China and Hong Kong 170 1,040 342 870 971 France............. 3,317 791 890 1,688 2,070 Denmark........ 3,437 2,115 1,115 4££ Mexico............ 497 520 467 333 674 Colombia........ 772 476 619 642 651 All other.......... 4,018 2,516 979 996 Total............ $29,587 $11,402 $42,987 $19,099 'mum la rly low due to large crops. Total 1922 (1913 average = 100 per cent, unless otherwise noted) Per C e n t . C hange D $84,441 32,502 8,946 5,812 16,970 Country f The Department's report showed un usually heavy im ports of silk, and an increase in coffee receipts to the largest total since M ay. Aug. July :v i kcl r u r in g Latest Quotation United States: 20 basic com 146 modities! . . . . 4,524 153 Dept, of Labor 5,655 145 Dun’s ................. ^ Bradstreet’s . . . . 136 \Great Britain: 156 ■ t Economist........ 143 / Statist................ / 20 basic comF o r e ig n T r a d e 141 \ "• « moditiesi . . . . JD France................... 329 Im ports into the United States during the first three 571 Italy....................... 193 weeks of September, as reported b y the Departm ent of Japan..................... 163 Canada.................. Commerce, were $232,000,000, or $49,000,000 less than 155 Australia2.............. 225 Norway3................ in the whole month of A u g u st and $53,000,000 more Sweden4................. 158 than in Septem ber last year. F ig u re s up to Septem ber Denmark5.............. 176 Netherlands.......... 155 2 1 alone were published for the reason that a change in 364 Belgiume................ Germany 2.............. 44,089 the method of com puting valuations to conform to the 106 Shanghai7.............. new tariff law placed later figures on a different basis. 5 (Oct. 21) (Sept.av.) (Oct. 1) (Oct. 1) + 0 .1 (Oct. (Sept. + 0 .1 1) 1) 2.3 + 3.5 - 3.1 - - 8.6 - 0 .1 - 0 .3 1.7 + 2.8 (Oct. 21) 0.0 (Oct. 1) + 3 .8 (Sept. 1) (Sept.av.) + 1.9 + 0 .5 (Sept. 15) (Aug.av.) + 0.6 (Oct. 1) + 0 .9 + 0.6 (Sept. 15) 0.0 (Oct. 1) - 4 .2 (Sept. 1) (Sept. 15-30) + 1 . 1 + 5 2 .5 (Oct. 1) - 0.1 r (Sept. 1) + 3.1 - 1.3 0.0 0.6 0 .1 + 3.3 - Sept. + + 0 .2 + + - 1.9 2 .5 2 .9 - 1. lr - 1.3 - 2 .2 1 .2 1.1 - 2.5 0.0 + 107.5 - + 1 .8 1.6 1.6 0.6 1 .2 1.0 0 .9 3.1 1.1 + 1-1 +52 2.0 ^Computed by this bank. zJuly 1914 = 100. 3Dec. 31, 1913-June 30, 1914 = 100. <July 1, 1913-June 30, 1914 = 100. *July 1912-June 1914 = 100. 6Apr. 1914 = 100. 7Sept. 1919 = 100. r — Revised. 6 M ONTHLY R E V IE W Domestic Prices The Septem ber level o f wholesale prices, according to the D epartm en t of L ab o r index number, was sligh tly below th at fo r A u g u st, due entirely to a decrease o f 10 p er cent, in fu el prices. There w ere substantial gains in the prices of m etals and bu ilding m aterials, due larg e ly to higher quotations fo r iron and steel. The fol low in g table gives the Septem ber change b y groups and the u p w a rd movement from recent low points. , Value of Index Commodity Group Farm products.......... Foods........................... Cloths and clothing.. Fuel and lighting. . . . Metals......................... Building materials. .. Chemicals and drugs House furnishing goods Miscellaneous............. All groups............... August 1922 Sept. 1922 131 138 181 271 126 172 122 173 115 155 133 138 183 244 134 180 124 173 116 153 Per Cent. Per change Cent. August Increase to from Sept. Low + 1.5 0.0 + 1.1 -1 0 .0 + 6.3 + 4.7 + 1.6 0 .0 , + 0 .9 - 1.3 16.7 5.3 7.0 34.8 22.9 16.1 2 .5 0 1.8 10.9 Date of Low June Jan. Apr. Sept. Mar. Mar. July 1921 1922 1922 1921 1922 1922 1922 June 1922 Jan. 1922 T h is b an k ’s index of prices of tw en ty basic commodi ties rose 1 .7 p er cent, in the first three weeks of October. Reactions in the prices o f iron and steel and fuel were offset b y general gains in other commodities. C o s t o f L iv in g A n increase in Septem ber of seven-tenths of one per cent, in the cost o f livin g among w age earn ers’ fam ilies in the U nited States, as computed b y the N ational I n dustrial Conference B oard, e xactly offset a sim ilar de crease which took place a month ago, and brought the final index number for Septem ber 1 5 to the same point as on J u l y 1 5 . The p rin cip al change du ring the past month w as an increase of 3 .3 per cent, in the cost of fuel and light. The follow ing table shows the latest figures o f this index num ber together w ith the recent ch an ges: Item Food......................................... Shelter..................................... Clothing.................................. Fuel and Light....................... Sundries................................... Weighted average all items August 1922 139 165 153 181 172 154.5 September 1922 140 165 155 187 172 155.6 Per Cent, change + 0 .7 + 1 .3 + 3 .3 + 0 .7 Wages Th e average h irin g rate of p a y fo r representative typ es of unskilled workers in this district advanced 9 per cent, from 36.9 cents an hour in J u l y to 40 cents in October j according to an index computed b y this bank from reports of employers. The index is now 2 3 p er cent, below the high level of the autum n of 19 2 0 and 8 1 per cent, above the 1 9 1 4 level. M an y firm s reported difficulty in obtaining labor at existing rates, and a large labor turnover. In some localities the shortage of com mon labor w as described as acute. Recent w age advances have not been confined to com mon labor. A v e ra g e w eekly earnings o f N ew Y o rk State fa cto ry workers, reported b y the State Departm ent of Labor, advanced 2.4 per cent, from $ 2 5 .1 0 in A u g u st to $ 2 5 . 7 1 in Septem ber, and are now 3.8 per cent, higher than in J u ly . A compilation b y the N ational Industrial Conference B o ard shows that between Septem ber 16 and October 1 5 there w ere reports of 69 changes in wage rates of w hich 65 were increases and 4 decreases. Num erous advances have recently been reported in the clothing and textile industries due la rg e ly to the restoration in N ew E n g la n d cotton m ills of the w age scale p revailin g p rio r to the recent strike. The metal and m achinery trades also show a large num ber o f in creases. The R ailroad L a b o r B o ard has fixed a higher scale of w ages fo r m aintenance of w a y employees, some shop workers, and yardm asters. Som e of the indi vidual roads are p a yin g shopmen and other classes of skilled labor w ages in excess of the scale fixed b y the Board. S a v in g s B a n k D e p o s it s A g g re g a te deposits of the fifteen reporting savings banks in N ew Y o rk C ity increased sligh tly more than 1 per cent, between Septem ber 10 and October 10 . This is the largest net increase fo r a n y month since the fig ures have been available, w ith the exception o f the months o f J a n u a r y and J u l y o f each y e a r w hen interest is credited. The increase is due in p a rt to a change b y several banks to a system o f crediting interest quarterly instead of sem i-annually but probably reflects also in creased employment and higher w age scales in a num ber of industries. A n increase of 0.3 per cent, in the a g gregate deposits of fifteen reporting banks in other cities o f the district was, w ith the exception of Ja n u a r y and J u l y , the first net gain since December 1 9 2 1 . E m p lo y m e n t Increased activity in p rin cip al industries resulted in recent weeks in another large increase in the num ber of persons employed, both in this district and the country at large. The N ew Y o rk State D epartm ent of L a b o r reports that between A u g u st 1 5 and Septem ber 1 5 there w as an increase of 2 per cent, in the num ber employed in factories in the State, follow ing an increase o f 2 .4 per cent, the previous month. There are now about 160,000 or about 1 5 per cent, more persons em ployed in N ew Y o rk State factories than there were a y e a r ago. F o r the first time since 19 2 0 the number of employees is larger than in 19 14 . FEDERAL RESERVE AGENT AT NEW YORK 7 Increases in employment have been notable in iron and steel plants, whose forces h ad been reduced because of the recent fu el shortage. M iscellaneous m etal and m achinery factories likewise report m arked gains. There is a shortage of common labor, and of building artisans and certain other typ es of skilled workers. been diminished from about 30 per cent, of the total to about 2 5 per cent. The number w orking overtime has been increased from 8 .5 per cent, to n early 1 1 per cent, of the total. There has been p ra ctica lly no change in these percentages in N ew Y o rk C ity . B oth in Decem ber 1 9 2 1 , and Ju n e 19 2 2 , the proportion o f workers on Em ploym ent agencies report less difficulty in p lacing p a rt time w as much sm aller than in u p -State centers, only about 1 4 per cent, of the total. The num ber w ork clerical workers than w as the case several months ago, bu t the su p p ly still exceeds the demand. The follow ing diagram illustrates the trend of em ploym ent in N ew Y o rk S ta te factories from 1 9 1 8 to the ing overtime w as also sm aller at both periods. C o a l M in in g Bitum inous coal production increased d u rin g October present time. I t also shows the total w ages paid to these workers. The decline in total w age paym ents du ring the but average w eekly production w as only sligh tly more latter p a rt o f 19 2 0 and e a rly in 1 9 2 1 was more distinct than 10,000,000 tons as compared w ith a norm al produc tion of about 12,000,000 tons. M ine operators reported than the decline in the num ber of workers because of reductions in w ages and hours o f la b o r; and the recent increase in total w age paym ents has also been greater than the increase in the num ber employed because o f higher w age rates and longer hours of operation in m any factories. that failu re o f production to reach cap acity d u rin g both Septem ber and October w as the result chiefly o f an in sufficient su p p ly of em pty cars and some congestion o f loaded cars. Total production in the first nine months of 1 9 2 2 w as 1 0 p er cent, less than production fo r the same period o f 1 9 2 1 and 3 3 per cent, less than in 19 20 . pea cent. Total production in the first nine months of the past fou r years is shown in the following table together with the average w eekly rate of output in October. (In thousands of short tons) 1919.................................. 1920.................................. 1921................. ................ 1922.................................. Nine Months October Weekly Average 346,520 400,839 296,285 267,247 12,094 11,949 10,213 10,025* * Partly estimated. P r o d u c t i o n in B a s i c I n d u s t r i e s A s a result of a more adequate su p p ly of fuel and the receipt of large additional orders for rails and other railroad equipment, the iron and steel industries du ring Septem ber resumed more active operations. The num ber of p ig iron furn aces in blast increased from 1 4 4 on Septem ber 1 to 19 0 on October 1 , and the rate of output of both iron and steel early in October w as not f a r behind the output of the ea rly summer before p ro duction had been interrupted b y the coal strike. Changes in Total Wage Payments in Representative New York State Factories compared with Changes in the Number of Workers employed by these Factories (July, 1914 figures=100 per cent.) Un filled orders on the books of the U nited States Steel Corporation increased du ring the month to the extent of 741,0 0 0 tons. Tow ards the end of the month, demand Results o f a special in q u iry have recently been given became somewhat less active and the rise in iron and out b y the N ew Y o rk State D epartm ent o f La b o r show steel prices w hich had been going fo rw a rd since late in in g the percentages of employees in factories of the M arch has been checked. State who were w orking fu ll time, p a rt time, and over A n increase in tin consumption to 92 per cent, of normal in Septem ber is reported to be due to a heavy tim e in Ju n e 19 2 2 , as com pared w ith Decem ber 1 9 2 1 . The largest change has taken place in industrial centers foreign demand fo r can oil. u p -S ta te ; where the number of p a rt time workers has distinctly upw ard. P rices have recently been s MONTHLY REVIEW Indices o f production in other basic industries show, in general, moderate amounts of change w ith increases and decreases about evenly divided. THOUSANDS 0FCAR5 S u g a r meltings, while still above normal, are down somewhat from A u gust as a result of less active foreign and domestic de mand. The following table shows fo r successive months the production in a number of basic industries in terms of estimated normal, allowances being made for yea r to yea r growth and seasonal variations. (Normal production = 100 per cent.) 1922 Commodity Apr. May June July Aug. Sept. Anthracite coal minedp.......... Bituminous coal minedp........ Pig iron production................. Steel ingot production............. Copper production, mine. . . . Tin deliveries............................ Zinc production*...................... Crude petroleum production Portland cement production Wheat flour production. . . . Meat slaughtered................. Sugar meltings, at U. S. Ports Cotton consumption........... Lumber production............. Wood pulp production........ Tobacco consumption......... Paper (total) production*.. Gasoline production............ Wool consumption*............. 0 .3 34 67 74 59 100 48 109 111 95 96 124 80 75 92 79 89 95 95 0 .4 41 73 81 70 92 51 1.0 111 110 120 119 100 108 146 88 96 108 91 43 79 82 75 90 53 1.4 32 82 79 75 75 60 110 128 142 99 131 84 76 105 90 93 109 1.9 39 61 70 86 77 59 111p 12 1 61 71 68 74 79p 92 62 123 123 117 109 144 110 135 92 97 92 84 98 82 105 110 103 97 107 100 103 101 116e 103^ 126< 104 112 Average Weekly Car Loadings of Revenue Freight on the Railroads of the United States been hampered by shortage of refrigerato r cars and the movement of grain and of such basic building m aterials as cement and brick has been below requirements. In the week ended Septem ber 30 freigh t car loadings of all commodities except coal exceeded those of an y The car shortage has been influenced b y a v a rie ty of conditions most im portant of which have been the large number of bad order cars and the lack of new equip ment. Previous to 1 9 2 1 the number o f unserviceable freigh t cars averaged each month about 6 per cent, of the total number of cars but during the past eighteen months from 10 to 1 5 per cent, of the total have been unserviceable. F ro m 1 9 0 1 to 1 9 1 6 the railroads p u r chased an average of 169,000 new freigh t cars p er y e a r but since 1 9 1 7 average annual purchases have been only 65.000 cars and in 1 9 2 1 orders w ere placed fo r only previous week in railroad history, and total car loadings 23.000 were within three per cent, of the record figures in heavier in 19 2 2 , totaling about 12 3,0 0 0 cars thus fa r, 100 96 116< e — Estimated. p — Preliminary. *— Seasonal variation not allowed for. R a ilw a y T r a ffic October 19 20 . H e a v y loadings at this time were due to a fu rth er increase to new high levels in the movement of m erchandise and miscellaneous freigh t and to an in crease in coal loadings to almost normal figures. The following diagram shows average weekly loadings cars. W h ile purchases have been relatively they have not m aterially offset the shortage of the past six years. A surplus of over 500,000 cars existed early this y ea r but as traffic increased this surplus w as grad u a lly elimi nated and by October 8 a d a ily shortage of 14 3,0 0 0 cars of revenue freigh t b y months since Ja n u a r y 1 9 1 9 and shows also loadings of m erchandise and miscellaneous existed. freigh t and of coal. curred at this season, as in 1909, 1 9 1 2 , and 1 9 16 . A s a result of h eavy traffic and of some congestion of F re ig h t traffic is norm ally heaviest in Septem ber and October and small shortages have often oc But on only two occasions previously have as serious short loaded cars at various term inals a shortage of freigh t cars developed early in October. Coal shipments have ages developed, in 1 9 1 7 - 1 8 been retarded b y an insufficient su p p ly of em pty cars ures were taken to increase the average length of each at the mines. d a y ’s freigh t haul and to increase the load of each ear„ Shipm ents of fru it from C alifornia have and 19 19 -2 0 . B oth these shortages were grad u ally eliminated when active meas FE D E R A L RE SE R V E AGENT A T NEW YORK The normal average freigh t car haul is about 2 5 miles per d a y but in 1 9 1 8 under w a r conditions and in 19 2 0 under stress of effort to relieve freigh t congestion the average haul w as increased to 2 7 miles in several months. In the latter p a rt o f 19 2 0 the average haul w as over 28 miles. F o r the first seven months of 1 9 2 2 the average 9 $ 1 5 m onthly per room, while there has been little con struction of the least expensive types. The foregoing diagram compares the two indices of apartm ent rents computed from reports of sixteen rep resentative apartm ent house owners and operators w ith an index of building costs also m aintained b y this bank. haul w as only 2 2 miles. The sharp rise in the building cost index in 19 2 2 is due E a ch car norm ally carries about 2 7 tons o f freigh t but in 1 9 1 8 and 19 2 0 car loads w ere increased to an average o f over 29 tons. F o r seven months of 1 9 2 2 the average chiefly to an increase in building m aterial prices in the past six months. load was only about 26 tons. V o lu m e o f B u ild in g Septem ber building contract aw ards in twenty-seven northeastern States w ere 16 p er cent, under those of A u g u st m ainly as a result of a decline in the volume of new construction in the N ew Y o rk and P ittsb u rgh dis tricts. A w a rd s in N ew Y o rk State and N orthern N ew J e r sey were n early 2 2 per cent, less than in A u gu st. In d u s tria l construction declined a b ru p tly in this district but residential building showed a moderate increase, a re versal of the trends of these types of construction in recent months. A p a rtm e n t R e n ts Th is b an k ’s indices of apartm ent tents show an in crease of 2 per cent, since M a y in rents o f low priced apartm ents but a decline of 3 per cent, in rents of some what more expensive apartm ents. These changes con tinue the tendencies of previous months and reflect the building operations of the past two years. There has been h eavy construction of apartm ents to rent fo r over PER CENT. W h o le s a le T r a d e The volume of wholesale trade in this district, as shown b y reports from 1 2 2 dealers in ten chief com modities, w as larger in Septem ber than in a n y month since Septem ber 19 2 0 . The weighted index m aintained b y this bank shows an advance o f ten per cent, over the figure fo r Septem ber 1 9 2 1 . The diagram s at the top of page 10 compare the Septem ber sales d u rin g the past fou r years. In each case sales in Septem ber 1 9 1 9 were taken as 10 0 per cent, and sales in Septem ber o f other years are expressed as p er centages of this base. The largest increase in sales as compared w ith last y ea r w as reported b y dealers in machine tools, reflecting large purchases b y railroads and equipment companies. Sales of clothing advanced n early 30 p er cent. There is an excellent dem and fo r both m en’s and wom en’s ready-to-w ear apparel and m an ufacturers report larger orders from the South and Southwest than at a n y time during the past two years. Sales of diamonds and jew e lry, which w ere v e ry low last year, are tending u p w ard but rem ain considerably below those of 1 9 1 9 . H ard w are sales, reflecting increased building activity, advanced 2 2 per cent. Sales b y wholesale druggists gained 8 per cent, and those b y grocers 6 p er cent. The only commodities which showed sm aller sales were d r y goods and stationery and the declines in those cases w ere small. Detailed figures are shown in the follow ing table. T otal N et Sa l e s (In percentages) Rents of Apartments in New York City compared with changes in the cost of Building Construction. Apartment A is the Typical Apartment renting for less than $15 per room in 1920. Apart ment B is the Typical Apartment renting for between $15 and $30 per room in 1920. Commodity Sept. 1919 Sept. 1920 Sept. 1921 Sept. 1922 Per Cent. Change Sept. 1921 to Sept. 1922 Clothing.................... (A) Men’s............ (B) Women’s . . . . Drugs......................... Hardware................. Dry Goods............... Groceries................... Stationery................. Diamonds................. Jewelry..................... Shoes......................... Machine Tools........ Weighted Average. . 100 100 100 100 100 100 100 100 100 100 100 100 100 147 201 88 93 122 96 91 115 56 83 42 109 100 87 106 67 93 76 92 68 73 29 37 42 10 74 112 142 79 101 93 87 72 71 61 46 43 41 82 + 28.6 + 34.2 + 18.8 + 8.0 + 21.6 5.5 + 5.9 2.4 + 10 8 .2 + 22.8 + 2.2 + 31 3 .1 + 10.3 liO MONTHLY R E V IE W 150 DRY GOODS GROCERIES DRUGS 150 100 100 s© ' 50 50 1919 150 1920 1921 192a 1919 1 9 ^ 19211922 1919 1 9 2 0 1921 1922 HARDWARE 1919 1 9 2 0 1921 1922 1919 1920 1921 1922 JE W E L R Y DIAMONDS 150 -fix. 100 100 Jtgr50 50 1919 1 9 2 0 1921 1922 1919 1 9 2 0 1921 1922 1919 1 9 2 0 1921 1922 1919 1 9 2 0 1921 1922 1919 1 9 2 0 1921 1922 September Sales in Different Years by Representative Wholesale Dealers in the Second District. Sales in September 1919=100 per cent. merchandise this y e a r than last and are givin g greater D e p a r tm e n t S to re T r a d e Septem ber sales b y 64 departm ent stores in this dis trict were larger than in Septem ber 1 9 19 , 19 20 , or 1 9 2 1 . The gain over Septem ber last y e a r w as 1 6 . 1 per cent,, consideration to the q u ality of goods purchased. E v i dence of this tendency is found in an increase o f 5 . 1 per ‘cent, in the average sales check from $ 2 .7 7 in Septem ber last y ea r to $ 2 .9 1 this year. the largest increase over the corresponding month in the previous ye a r since J u l y 19 2 0 , when an increase in prices w as a facto r in the advance. In the past three years Septem ber sales were about 30 per cent, greater than those of A u gu st. Th is year the month-to-month gain w as 3 7 per cent. The follow ing diagram compares the sales of this year w ith those o f last y ea r and shows that du ring the first quarter o f 1 9 2 2 sales were below those of 1 9 2 1 ; during the second quarter sales were about the same, and the first m arked gains occurred in A u g u st and September. A sim ilar comparison is made of the stocks on hand. Stores in all p arts o f the district reported substantial increases in sales, but the gain w as greatest in N ew Y o rk C ity , am ounting to 18 .4 per cent. M erchants assert that sales have been good in all departm ents and especially large in ready-to-w ear clothing and house furnishing goods. There appeared du ring the month an increasing dem and fo r so-called “ lu x u ry ” articles, the large sale of which characterized departm ent store business in the fa ll of 1 9 1 9 and sp rin g o f 19 20 . M erchants also report that purchasers are bu yin g a somewhat better qu ality of Sales and Stocks on Hand of Representative Department Stores in the Second District (Average Sales in 1919=100 per cent.) 11 FEDER AL RESERVE AGENT A T N E W YORK Sales b y mail order houses, which deal largely w ith The average price of shoes sold b y reporting shoe ru ral districts, gained 4 per cent, in Septem ber but con stores declined 3.6 per cent, from $ 3 .8 7 per p a ir in S e p tinue much below the levels of 1 9 1 9 and 1920. tember last y e a r to $ 3 .7 3 this y ea r and the number of pairs of shoes sold increased 17 .6 per cent. Detailed figures are shown in the following table. B u s i n e s s F a il u r e s T o t a l N e t S a le s (In percentages) S to c k on H and R e t a i l P r ic e (In percentages) F e w e r business failures were reported in the United States du ring Septem ber than in an y month since S e p tember 1 9 2 1 . Sept. 1919 All Dept. Stores 103 New Y ork. 109 Buffalo. . . . 92 Newark. . . 89 R ochester.. 98 Syracuse... 99 Bridgeport. 109 Elsewhere.. 94 Apparel Stores 101 Mail Ord. Houses 141 Sept. Sept. Sept. Oct.l, Oct.l, Oct.l, Oct.l, 1920 1921 1922 1919 1920 1921 1922 111 100 116 96 122 100 98 115 100 118 95 122 100 99 106 100 109 97 121 100 93 98 100 112 100 132 100 101 114 100 112 108 133 100 90 115 100 112 118 154 100 99 119 100 115 102 123 100 99 109 100 107 85 105 100 89 104 105 100 118 88 108 100 ** ** ** 12 1 100 104 This b a n k ’s index which is based on the proportion of failures to the number of firms in business and makes allowance for seasonal variations was also lower than fo r an y month since last September. A vera ge liabilities were sligh tly above A u g u st figures but under the average for the first eight months of 19 2 2 . C h a i n S t o r e S a le s Septem ber sales b y the chain store systems that report cu rren tly increased over those of last Septem ber in about the same proportion as did the sales of dep art ment stores in this district. Chain store sales are influ enced, however, b y the opening of new stores, and are nationwide in their scope. The largest gain in sales, amounting to 20 per cent., w as reported b y five and ten cent stores. G rocery sy s tems reported an increase of 1 8 per cent, in total sales, Percentage of Firms Failing to the Number in Business, in Terms of Annual Rate. Seasonal Variation Allowed For. but this w as due in a large measure to the opening of about 2,200 new stores. Sales of shoes and apparel gained about 1 5 per cent, and sales of cigars and drugs increased about 5 per cent. C ro p C o n d itio n s Crop reports fo r N ew Y o rk State fo r October 1 indi cate that the total yield of all crops this y ea r taken as a Number of Stores Type of Store Ten C ent.. Grocery. . . Apparel. .. Shoe........... Cigar.......... D rug.......... Total. . . Sept. 1921 1,598 6,078 370 185 2,228 283 10,742 i Sept. 1922 1,666 8,286 431 216 2,639 280 13,518 Per cent, change in sales per Store, Sept. Sept. Sept. Sept. 1921 1920 1921 1922 to Sept. 1922 98 100 120 + 1 5 .1 - 1 3 .4 113 100 118 105 100 116 - 0.8 107 100 114 - 2 .7 107 100 106 - 1 0 .7 101 100 104 + 5.4 106 100 116 - 7.8 T o t a l N e t S a le s (In percentages) Sept. 1919 82 84 69 104 75 85 82 whole is about 10 per cent, better than the average yield during the past ten years. The yield of w inter wheat, oats, barley and rye is somewhat under the ten-year average, but that of p ra ctica lly all other crops is excep tionally good. F o r the United States as a whole, the estimated yield for October 1 w as in general sligh tly under the Septem ber figures. per cent. The estimated yield of cotton declined 4 The estimates for sprin g wheat, and corn were also sligh tly lower. F ed era l H E members of the F e d e ra l Reserve system com prise about 10,000 N ational and State banks and tru st companies— approxim ately one-third of all the banks in the country. This proportion o f about oneth ird does not hold un ifo rm ly in all the States, but varies from about ten per cent, in some States, to u p w a rd of seventy per cent, in others. In point of re sources, the member banks represent about tw o-thirds of the banking strength of the country. T W h a t B a n k s A re M e m b e r s U nder the F e d e ral Reserve A c t all N ational banks are members o f the F e d e ral Reserve system ; and State banks and trust companies m ay a p p ly fo r admission. State institutions m ay also w ith d raw from the sy s tem. The follow ing table shows the number o f member banks, both N ational and State, and their resources on Ju n e 30 of each y ea r since 1 9 1 5 . Year as of June 30 1915 1916 1917 1918 1919 1920 1921 1922 N u m b e r of R esources B anks (In millions) National State Total National State Total 7,598 7,572 7,600 7,700 7,780 8,025 8,150 8,244 17 34 53 513 1,042 1,374 1,595 1,648 7,615 7,606 7,653 8,213 8,822 9,399 9,745 9,892 11,790 13,920 16,282 18,347 21,228 23,402 20,510 20,698 97 307 756 6,104 8,628 10,351 10,426 11,026 11,887 14,227 17,038 24,451 29,856 33,753 30,936 31,724 S tate institutions ap p ly in g fo r membership are re quired to have at least the minimum paid-up capital required o f n ew ly established N ational banks. F o r ex ample, the m inimum capital required of a N ational bank established in a ru ra l com m unity is $25,000 , and State banks h avin g a capital o f less th an th at are not now eligible fo r membership. I n m an y agricu ltu ral States a v e ry large num ber o f ru ra l banks h aving sm all capital are ineligible fo r membership and so are without direct access to the F e d e ral Reserve B anks. The num ber of ineligible S tate banks is about 10,000. In all cases State institutions a p p lyin g fo r member ship are subject to exam ination b y the F e d e ra l Reserve B an k before admission, so that their condition and bank ing policies m ay be ascertained. W h a t M e m b e r s h ip M e a n s A member bank must subscribe fo r stock in its F e d eral Reserve B an k in the amount o f 6 per cent, of its own capital and su rp lu s; and as a member b a n k ’s capi tal and surplus increase, it m ust increase its ownership of stock in the F e d e ral Reserve B an k. The member banks are the sole owners of R eserve B an k stock. Th is stock is not transferable and so cannot be sold, thus p re venting a concentration of control of the F e d e ra l R e serve Banks. I f a bank liquidates or retires from the system, the shares held b y it are canceled, and the bank receives back w h at it p aid in. Th u s f a r the member banks have been called upon to p a y in only 50 per cent, o f the amount of stock subscribed for. D ividends have R eserv e S y stem been paid at the rate of 6 per cent, an n u ally upon the amount p aid in. A member bank keeps all of its reserves w ith the R e serve B an k. These reserves form almost the entire vo l ume of deposits w hich R eserve B an ks have. T h e y are in a fixed proportion to the amount o f deposits w hich the member banks have, on the average, ten p er cent. To all member banks are available the various services provided b y the F ed eral Reserve Banks. These services, which have been described in d ivid u ally from time to time in the R e v ie w , include the m aking of loans, the su p p ly of currency, the collection of checks, the tran sfer of funds b y wire, and other services. M e m b e r s h ip in V a rio u s S t a t e s The variatio n among the different States in the p ro portion that member banks bear to the total num ber of banks, appears in the follow ing table. I t shows also the proportion that the resources o f member banks bear to the total banking resources o f each State. F o r con venience, the sum of the deposits, capital, surplus and undivided profits is taken to reflect the resources of banks. The percentages are based upon figures taken from the report o f the Com ptroller o f the C u rren cy, and show the condition as o f Ju n e 30, 1 9 2 1 . State M ain e................... New Hampshire.. Vermont................ Massachusetts... . Rhode Island........ Connecticut.......... Total— New England States New York............. New Jersey........... Pennsylvania........ Delaware............... Maryland.............. Washington, D. C. Total— Eastern States.. West Virginia. . . . North Carolina. .. n OUUtll 55 69 56 71 61 51 54 60 41 82 82 60 62 74 72 70 62 42 36 34 86 69 68 60 52 50 63 78 37 38 16 68 50 49 1v a. Ql UT nUl lITl dl Qi . . . 99 47 T t1 Georgia.................. Florida 23 25 AlahatYi a OO 10 19 47 24 24 20 59 57 70 27 64 77 60 55 57 29 60 M isRiRsirmi T/niisiatia Texas Arkansas Kentucky.............. Tennessee.............. T o t a lSouthern States State Ohio....................... Illinois................... Michigan............... Wisconsin............. Minnesota............. Missouri................ Total— Middle Western States North'Dakota. . . South Dakota.. . . Nebraska.............. Montana............... Wyoming.............. Colorado............... New Mexico........ Oklahoma............. Total— Western States Oregon................... California............. Idaho..................... Utah...................... Arizona................. Total— Pacific States. . Grand Total. . . to total th e Per cent, of member banks to total Per cent, of member resources in Per cent, of member banks to total Per cent, of member resources to total M e m b e r s h ip 46 30 30 40 19 24 27 10 72 47 65 77 52 56 40 56 27 62 22 22 17 20 49 33 37 45 39 41 37 41 38 71 67 71 64 64 27 51 38 45 49 60 50 31 30 69 72 67 73 69 38 40 46 33 67 68 I t w ill be seen that in general the highest proportion of membership and of member bank resources is in the northeastern States.
@FedFRASER