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MONTHLY REVIEW of Credit and Business Conditions S e c o n d Federal Reserve Agent F e d e r a l HE D is tr ic t Federal Reserve Bank, New York Business Conditions in the United States T R e s e r v e volume of merchandise distributed during August as indicated by railway traffic and whole sale and retail trade was large. Production of certain basic commodities and industrial employment October 1 , 1923 Increases in wages amounting to 10 per cent, were granted to anthracite coal miners, and readjustments of wages and hours in the steel industry continued, but wage advances during August were fewer than in any month since last winter. The principal changes in crop estimates shown by the showed further slight decreases. P r o d u c t io n The Federal Reserve Board's index of production in basic industries declined 2 per cent, during August and was at the lowest point for this year. The August out put, however, was 27 per cent, larger than a year ago September 1 forecast of the Department of Agriculture were a large reduction in the expected cotton crop, slight decreases in the probable yields of wheat, barley, and oats, and increases of yields of corn, potatoes. T r ad e and production in every month this year has been at a higher level than in any month of the previous five years. Lower production index in August reflected re duced output, after a correction for the usual seasonal tobacco, and Railroad freight shipments were larger in August than in any previous month on record. This was due to a seasonal increase in shipments of coal, miscellaneous trend, of pig iron, woolen goods, flour, and cement. Cot ton consumption, sugar meltings, lumber cut, and bitu minous coal production increased. The number and merchandise, and agricultural products. Wholesale trade, according to the index of the Federal Reserve value of new building projects as measured by permits granted in 168 leading cities, increased during August, than usual at this season of the year. but actual contract awards were smaller than in July. Employment at industrial establishments throughout the United States was slightly smaller in August, while average weekly earnings advanced about one per cent. Board, increased 12 per cent, in August, which is more Sales of clothing, drygoods, and shoes showed substantial gains as com pared with July and were larger than a year ago. Re tail trade also increased in August and sales in all re porting lines were larger than in August 1922. Depart- o ra r * n t p ea cent. ----------------- [ .... ■ PRODUCT!- DN BASIC INDUS FRIES \ ,V yf ° ^ J r v 1919 1920 1910 AVERAGE 1921 1922 1923 Production in Basic Industries— Combination of 22 Individual Series corrected for Seasonal Variation (1919 average = 100 Per cent.) Index of Wholesale Prices, U. S. Bureau of Labor Statistics (1913 average = 100 Per cent.) 2 MONTHLY RE V IE W , OCTOBER 1, 1923 B ILLIO N S O f DOLLARS BILLIONS OF DOLLARS .. ... — ..... ft V X FEDERAl„ RG5E.KVE n o TES / E A K N IN < j\ ASSETS V 1919 192.0 192.1 192.2. 192.3 1919 1920 192.1 \9ZZ 192.3 Bank Credit— 800 Member Banks in Leading Cities Bank Credit— All Federal Reserve Banks ment store sales in all sections of the country averaged 12 per cent, above last year’s level. because Government disbursements were temporarily in excess of tax collections. The Treasury issued on September 15, $200,000,000 of six months certificates bearing 4 ^ per cent, interest, compared with 4 per cent, borne by six months certifi cates issued in June. P r ic e s The general level of wholesale prices, according to the index of the Bureau of Labor Statistics, remained rela tively constant in August, the change for the month being a reduction of less than one-fifth of one per cent., compared with declines of about 2 per cent, in each of the three preceding months. Prices of building mate rials, house furnishings, and fuel were materially re duced, while prices of farm products and foods increased. Prices of certain raw materials, particularly cotton and silk, advanced substantially during September, wrhile prices of petroleum and copper declined. B a n k C r e d it After a decline during July and the first part of Au gust the volume of bank credit in use showed a seasonal increase during the last week of August and the first two weeks of September. Total loans and demand de posits of member banks in principal cities increased dur ing recent weeks, reversing the trend of the preceding two months. Loans chiefly for commercial and agricul tural purposes increased by $122,000,000 and reached a high point for the year. Investment holdings of these banks, on the contrary, continued to decline and on Sep tember 12 were lower than at any *.ime since the middle of October of last year. Between August 22 and September 19 the amount of accommodation extended to member banks by Federal Reserve Banks in industrial districts declined, while in agricultural districts the seasonal demand for credit and currency resulted in a considerable growth of Reserve Bank credit in use. The demand for currency arising out of crop moving and fall trade has been reflected in an increase of $82,000,000 in money in circulation between August 1 and September 1. Of this amount about $44,000,000 represents an increase in Federal Reserve note circula tion. Money rates were firmer during the first two weeks of September, but eased somewhat after the 15th, partly Banking Conditions, Second District There was a rise of approximately $70,000,000 in total loans and investments and of $80,000,000 in total de posits of reporting member banks in this district in the last week of August and first two weeks of September. Loans made largely for commercial purposes advanced nearly $50,000,000 to a new high point for the year, and there was a moderate recovery in loans on securities, but investments in securities fell to a new low point for the year. The recent advance constitutes a reversal of a declining tendency of deposits in this district during the past few months. The banking transactions arising out of the Govern ment operations on September 15 followed the sequence familiar at quarterly tax dates, and were reflected in temporary easing in money rates and decline in loans of the Federal Reserve Bank. Payment of Government certificates and interest due that date exceeded tax col lections here, necessitating transfer of funds to this dis trict by the Treasury from other parts of the country. Reflecting these disbursements, total earning assets of the Federal Reserve Bank of New York in the week ended September 19 declined $88,000,000 to $172,000,000, the lowest since 1917. Later in the month there was again an advance in the loans of the Reserve Bank. Changes in Bank Deposits Statistics of all member banks recently made available for the quarter ended June 30, indicate important changes in bank deposits that have not been clear from figures of the 800 weekly reporting member banks located chiefly in the principal cities. The figures show that while deposits of banks in central reserve and reserve 3 FEDERAL RESERVE AGENT AT NEW YORK cities remained practically stationary between December 29 of last year and June 30 of this year, deposits of banks outside these cities which are termed country banks in the reports increased from $9,534,000,000 to $9,995,000,000 or $461,000,000, and there was a nearly equivalent increase in the deposits of all member banks. The accompanying diagram compares the changes in deposits of city and country banks since 1919, and indi cates that the pause in the increase of deposits of city banks during the first half of this year followed an un usually large increase last year which carried them tem porarily out of proportion to deposits for the country as a whole. Both city and country deposits, however, on June 30 were much above the highest levels of 1920, and together well over two billions higher. BILLIONS OF DOLLARS c e n t r a l re 5ERVE &RESER /E CITY BANKS COUNTR'I BANK5 Commercial paper dealers reported good buying in the interior where rates were somewhat easier than in New York. Banks here remained out of the market and rates stiffened slightly to 5*4 to 5 % per cent., compared with 514 per cent, a month previous. Most dealers reported little increase in supplies of paper compared with Au gust when the outstanding paper of 26 dealers declined $20,000,000 to $815,000,000. Bills moved somevhat more actively in September, due partly to increased demand from city and out-oftown banks, and continuance of buying for foreign account. Supplies continued moderate, and rates re mained 4 % to 4*4 per cent, on purchases by the dealers, and 4 to 4 % per cent, on sales by them. The new offering of $200,000,000 six months Treasury certificates, dated September 15 and bearing 4*4 per cent, interest compared with a 4 per cent, issue of similar maturity sold during June, was heavily oversubscribed and subsequently traded in at par in the open market. In the Stock Exchange money market, call money ranged chiefly 5 per cent, or higher until after Septem ber 15 when tax day operations caused a marked easing. On September 21, the rate again rose to 4y 2 and 5 per cent. Time money rates touched 5y 2 to 5 % per cent, early in the month, but eased slightly after the 15th. Security Markets 19 19 1920 1921 1923 1922 Total of Demand,. Time and Government Deposits in all Member Country Banks and all Member Banks in Central Reserve and Reserve Cities While figures for all member banks are not yet avail able for the late summer, the following table comparing changes in deposits in different classes of cities in the Second District alone between June 27 and August 29 indicates that so far as this district is concerned such losses of deposits as occurred during the summer were confined to banks in the larger cities, where the declines were accompanied by extensive liquidation in securities. CH AN G E S IN DE POSITS OF A L L M E M B E R B A N K S — SE C O N D D IS T R IC T JUNE 27 TO A U G U ST 29, 1923 (In millions of dollars) Cities with Population of Time Deposits Less than 5,000............................................. 5,000 to 15,000..................... ......................... 15,000 to 100,000.......................................... Over 100,000.................................................. 7 + 1 + 17 3 + + - 11 6 0 218 + - 201 T o ta l........................................................ 8 Net Demand Deposits Following a gradual advance during August, stock prices about the middle of September experienced a reaction sufficient to offset nearly all of the increase from the summer’s low point. The reaction was accompanied by more active trading, and transactions on September 13 exceeded a million shares for the first time since June. Though somewhat lower in September, bond prices show no large change since last spring. Japanese bonds were lower in September as a result of the earthquake, while French and Belgian issues advanced. The volume of new security issues during the first three weeks of the month was larger than in the summer but less than for corresponding periods of previous years. Figures for the first seven months of the year indicate an output of new issues, excluding refunding loans, smaller than in the corresponding period of last year, but larger than in the preceding three years. The following table from compilat/ions by the Commercial and Financial Chronicle compares by groups the total issues, exclusive of those for refunding purposes, for the first seven months of the years 1919-1923. (In millions of dollars) 1919 1920 1921 1922 1923 19 1,139 65 68 200 27 1,854 125 15 1.093 157 40 80 1,430 354 214 24 1,652 101 243 375 23 U. S. Possessions............. 379 12 10 566 22 14 734 70 32 T o ta l.............................. 1,892 2,404 1,907 2,914 Corporate: Money Rates The trend of money rates continued moderately up ward in September, in accordance with the seasonal tendency, until after the 15th when Government opera tions caused a temporary easing for several days. Foreign Governm ent.......... Farm L oa n ............................ W ar Finance C orporation.. M unicipal: •• • 623 26 0 .6 2,670 4 MONTHLY REVIEW, OCTOBER 1, 1923 Foreign Exchange News of the earthquake disaster in Japan was fol lowed by a sharp break in sterling exchange by which Japanese trade is largely financed. On September 4 and 5, the demand rate sold down approximately 4 cents to about $4.50%, the lowest since the latter part of No vember. There was later a recovery to around $4.55. Seasonal commercial bill offerings were probably an ad ditional factor in low quotations. Japanese exchange showed only a moderate net decline between September 1 and 20. French and Belgian exchanges were stronger and rose nearly J4 of a cent to 6 and 5 cents respectively, the highest since midsummer. Italian rates were also firmer, but mark exchange continued its rapid decline to new low points accompanying further increase in note cir culation. Gold Movement August imports of gold, largely from England, Can ada, Germany, and the Netherlands, amounted to $32,837,397. Exports, amounting to $2,200,961, were chiefly to China and Hongkong and Colombia. The excess of gold imports during the first eight months of the current year has amounted to $167,683,967 as compared with $173,347,594 during the corre sponding period last year. July low point for the year of 142 and the April high of 161. Cotton in September reached 30 cents a pound for the first time since April. After remaining closed from September 5 to 18 the raw silk market reopened with prices over $10 a pound as compared with $7.50 a pound before the earthquake. A t the conclusion of the coal strike prices of anthracite coal at the mines were quoted at an increase of 90 cents a ton. The cost of living index of the National Industrial Conference Board which advanced slightly in July was practically unchanged during August at a level 5 per cent, above the low point of 1922 and 62 per cent, higher than in 1914. Wages and Employment Evidence of the reduction in pressure for workers which has accompanied some decrease recently in in dustrial production is found in the fact that wages of unskilled male labor in the Second District, computed quarterly by this bank, were practically unchanged in September at $23.59 a week, following a continued rise since April 1922. These wages are only 8 per cent, below the maximum reached in 1920 in contrast to basic com modity prices which are about 50 per cent, below the maximum, according to an index maintained by this bank. This relationship is illustrated in the accompany ing diagram. CENT. Foreign Trade Exports during August were valued at $313,000,000, not far from the average of the previous months of the year. August imports were valued at $275,000,000, practically the same as in July, but approximately 31 per cent, lower than in March, the high month this year. Notwithstanding a moderate surplus of exports in July and August, figures for the first eight months of the year show a surplus of imports amounting to $88,000,000. A factor in lower imports in recent months has been a falling off in receipts of sugar and coffee, which in March had reached the highest totals in more than two years. Exports during August were sustained partly by in creased shipments of cotton and grains. During Septem ber there was an increased inquiry from Japan for steel for reconstruction purposes, but little increase in actual orders was reported. Prices The index of wholesale prices of the Bureau of Labor Statistics remained practically unchanged during August, and was approximately 6 per cent, lower than in April, the high month of the year. Prices of a number of important basic commodities, particularly farm products, advanced substantially dur ing August and the first three weeks of September, and the index of twenty basic commodities computed by this bank recovered to approximately midway between the Wages of Unskilled Labor compared with Prices of Basic Com modities (1913 average = 100 Per cent.) Additional evidence of the reduced pressure for work ers is found in the lessened number of wage increases reported monthly by the National Industrial Conference Board and summarized in the table below. M onth Ended Dec. Jan. Feb. Mar. Apr. 14 14 14 14 14 Reduc tions In creases 1 1 0 1 0 12 23 42 37 229 Total Changes 13 24 42 38 229 Month Ended M ay June July Aug. Sept. 14 14 14 14 14 Reduc tions In creases T otal Changes 1 1 0 0 1 201 287 137 77 22 202 288 137 77 23 FEDERAL RESERVE AGENT AT NEW YORK Wage increases in September included a 10 per cent, increase to anthracite coal miners as one of the condi tions on which the coal strike was settled. Steel workers are also receiving a 10 per cent, increase in wage rates as the adjustment is made to the shorter working day. The following table compares changes in index numbers of wage rates in several industries since 1914 and since the high level of 1920. The figures are from various sources believed to be reliable. (Estimated Normal = 100 Per cent.) 1922 Aug. Apr. Steel in g o ts................................................. Bituminous coal........................................... Copper, U. S. mine..................................... Tin deliveries............................................... 1923 Industry 1914 Anthracite, contract miners............... Building, skilled and unskilled.......... Street railway, platform men............. Unskilled labor, 2nd District............. Textile, all classes............................... Steel, unskilled.................................... Steam railway, all classes................... Packing, unskilled............................... Farm labor, male................................. 100 100 100 100 100 100 100 100 100 177 195 223 234 269 253 272 290 217 Latest Per cent. Change since 1920 195 205 215 216 234 220 234 232 139 + 10.0 + 5.1 - 3.6 - 7.7 -1 3 .0 —13.0 -1 4 0 -2 0 .0 -3 5 .9 1923 May June July Aug. °roducers’ Goods Cotton consumption................................... Woolen mill activity*................................. 1920 High 5 Leather, sole................................................ 59 79 60o 85 77 111 97 87 105 108 120 59 93 114 115 117 89 132 134 101 120 102 119 134 82 103 124 122 114 95 114 139 108 118 120 125 133 83 96 122 114 109 98 92 139 96 113 Not 123 128 75 93 121 109 105 r 107 106 105 102 109p 99 84 142 *89 83 97p 104 available 114 135 i30 73 75 105p 2o 102 110 109 115 101 132 122 109 89 115 138 142 120 118 159 98 113 118 130 104 122 118 114 93 108 146 150 130 114 162 98 107 101 114 89 122 79 Not 93 111 152 159 126 105 134 100 104 122 116 105 109 123 145 79 86 135 149 74 70 available 88 110 151r 141p 162r 152p 109r 97p 89p 91p 94 Consumers' Goods Anthracite coal............................................ Cattle slaughtered..................................... Calves slaughtered...................................... Sheep slaughtered....................................... Hogs slaughtered......................................... Sugar meltings, U. S. ports........................ Tobacco consumption................................. Automobile, all............................................ Automobile, passenger................................ Automobile, truck....................................... Boots and shoes........................................... Automobile tires.......................................... 119 102 127 86 124 144 103 102 102 124 133 89 84 137 Production * Seasonal variation not allowed for. o Strike period. p Preliminary, The index of production maintained by the Federal Reserve Board declined in August for the third suc cessive month. Irregularity marked the month’s devel opments, however, and there were as many increases in output as there were declines. Pig iron production declined from 3,678,000 tons in July to 3,435,000 tons in August, but the output of steel ingots rose from 3,514,000 tons to 3,679,000 tons. Un filled orders on the books of the United States Steel Cor poration during August declined 496,000 tons to 5,415,tons. 000 Anthracite coal mined increased 548,000 tons to 8,868,000 tons in August and the output of bituminous coal increased 3,738,000 tons to 48,864,000 tons in August, but this latter gain was not so large as that which usually occurs at this period and the index of production accord ingly showed a small decline. Cotton consumption by domestic mills increased from 462,000 bales in July to 492,000 bales in August. A number of New England mills which had been closed during July were reopened in August. The number of passenger automobiles produced in August was 304,000 or 7,000 more than were manufac tured in July. For the first eight months of the cur rent year there have been produced 2,431,000 passenger cars, or more than the 2,339,000 cars which were manu factured during the entire calendar year of 1922, which up to the present had been the year of greatest activity in this industry. The following table shows the indexes of production computed by this bank in percentages of estimated nor mal production. Allowance has been made for seasonal variations and year to year growth. The table has been divided into producers 9 goods and consumers9 goods. r Revised. Indexes of Business Activity The index numbers of business activity, which have been computed by this bank, are brought together in summary form in the following table. These have been divided into three major groups— primary distribution, distribution to the consumer, and general business ac tivity. In each case the figures are expressed as percent ages of the estimated normal. Allowance has been made for seasonal fluctuations, year to year growth and, when necessary, for changes in prices. (Estimated Normal = 100 Per cent.) 1922 1923 Aug. Apr. May June July Aug. Primary Distribution Car loadings, mdse, and misc..................... Car loadings, other. ................................... Wholesale trade, Second District.............. Exports........................................................ Imports........................................................ Cereal exports............................................. Distribution to Consumer Department store sales............................... Chain store sales......................................... Mail order sales........................................... New life insurance written......................... Amusement receipts.................................... Magazine advertising................................. Newspaper advertising............................... 100 81 105 90 102 203 114 125 105 82 122 107 108 119 103 83 130 143 106 117 100 90 119 92 102 102 119 118 102 112 95p 91p llOp 97p 86 73 103 99 69 104 83 86 97 98 96 100 103 95 95 110 99 99 110 105 108 91 110 101 103 103 108 93 95 105 93 94 91 103 94 100 107 100 110 106 105 124 125 111 104 115 99 144 103 112 105 118 104 122 102 107 105 116 102 114 101 99 98 115 99 lllr 84 General Business Activity Bank debits* outside N. Y. C ity................ Bank debits, New York C ity..................... Electric power.............................................. Postal receipts.............................................. Building permits......................................... Business failures.......................................... p Preliminary, r Revised. 101 98 81 112 98 106 102 93 i03 124p 95 0 MONTHLY RE VIEW . OCTOBER 1. 1923 Building An increase of $20,600,000 during August in the value of building permits granted in 158 principal cities brought the total of permits granted during the month to the highest figure for any month since May. The in crease was due partly to expansion of building in New York City, but there were also gains in other cities par ticularly in the far west. Building wages remained in August at the high level reached in July, but the price of building materials con tinued to decline. As a result the cost of construction index computed by this bank receded further to 194 per cent, of the 1913 average cost and was 3 per cent, below the May high point. Allowing for this recession in costs, as well as for seasonal variation and normal growth, this bank’s index of the volume of building for which permits were issued was 124 per cent, of estimated normal, compared with 111 per cent, in July. The accompanying diagram shows the course of the volume of building index since 1917. apartments are 66 per cent, higher than in 1914, and 5 per cent, lower than the maximum of 1921. The accompanying diagram compares the movement of the two rent indexes with this bank’s index of the cost of construction. PER. C E N T . PER CENT. 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. Apartment B is the Typical Apartment renting for between $15 and $30 per room in 1920 An index of rents paid by workingmen’s families in the United States, prepared by the National Industrial Conference Board, was 6 per cent, higher in August 1923 than in October 1922 and 75 per cent, higher than in 1914. A similar tendency is reported by the Massa chusetts Commission on the necessities of life. Wholesale Trade Volume of Building in Per cent, of Estimated Normal. Al lowance is made for Changes in Cost of Construction as well as Seasonal Variations and Annual Growth Awards for building contracts in 27 Northeastern States, which usually follow changes in building per mits by some weeks, decreased $21,000,000 during Au gust, according to reports of the F. W . Dodge Company, and at $253,000,000 were $121,000,000 below the May high point. The aggregate value of contracts awarded during the first 8 months of 1923 was only slightly larger than in the corresponding period of 1922. Apartment Rents Reports from representative apartment house owners and operators in New York City indicate an increase of approximately 9 per cent, over a year ago in rents of apartments which rented for less than $15 monthly per room in 1920, but show practically no change in rents of higher priced apartments. The advance in rents of low priced apartments continues the tendency of previous years, and reflects the fact that during the past two years apartment construction in New York City has been largely of the more expensive types. Compared with 1914 rents, present levels for low priced apartments show an advance of 89 per cent. Rents of high priced Largely because of heavy sales of clothing, both men*s and women’s, the weighted index of wholesale trade in this district, maintained by this bank, advanced from 2 per cent, above normal in July to 12 per cent, above in August, the highest figure since February. August sales were 20 per cent, larger than those of August a year ago. This month for the first time sales of women’s cloth ing were divided into two groups— women’s coats and suits and women’s dresses— as these industries are sep arate. Sales of coats and suits increased 35 per cent. Dollar Value of August Sales (August 1922=100 Per cent.) Commodity Machine to o ls ...................... (a) M en’s and boys*........ (b) W omen’s coats and (c) W omen’s dresses. . . . Hardware.............................. D ry goods.............................. Total (w eighted)............. 1919 1920 1921 1922 1923 276 99 78 296 111 122 49 92 73 100 100 100 166 135 149 132 93 116 142 117 357 133 205 93 197 119 88 146 116 152 97 126 161 96 151 105 105 81 98 97 64 108 90 97 123 100 100 100 100 100 100 100 100 100 100 135 117 117 115 108 108 106 105 105 102 124 127 98 100 120 FEDERAL RESERVE AGENT AT NEW YORK over a year ago and sales of dresses 17 per cent. Sales of men's clothing were nearly 50 per cent, larger than those of August 1922. Each of the ten commodities for which figures are received showed August sales larger than a year ago. The largest increase was in the case of machine tools and the smallest in shoes. Department Store Business Annual August sales by department stores in this dis trict yielded a large volume of business. Total sales were 11 per cent, above those of August a year ago and were 2.7 per cent, above those of July, whereas usually August sales are less than those of July. The increases were well distributed among the various departments of the stores. Sales of women's and misses’ ready to wear garments were unusually good and the de mand for men's and boys' wear was well ahead of that of last year. Shoe sales were also much larger than last August. There was a continued demand for furniture and house furnishing goods. The following table shows the percentage change in sales from August last year to August this year by major groups of departments. W om en’s and Misses’ ready to w e a r ........................................... M en’s and B oys’ wear.................................................................... Shoes.................................................................................................... W omen’s ready to wear accessories.............................................. F u r n itu re ........................................................................................... Cotton g o o d s ..................................................................................... House furnishings.............................................................................. Silk g o o d s .......................................................................................... H osiery................................................................................................ W oolen g o o d s ................................................................................... Miscellaneous..................................................................................... + -f + + + + + 23.5 19.6 17.1 15.2 14.6 14.5 12.3 4- 7 .5 + 5 .1 — 0 .1 + 12.2 In order to show the changes from month to month in department store sales independent of price changes and the usual seasonal variations and growth in the size of stores an index has been computed showing depart ment store sales compared with an estimated normal in which allowance has been made for these various factors affecting sales. The index is an attempt to discover whether sales are increasing or decreasing from month to month, a thing which can hardly be determined from the raw figures because they are distorted by price 7 changes, seasonal changes, and growth from year to year. The data now available indicate for example that depart ment store sales in the cities of the Second District normally increase at the rate of 8 per cent, a year and that December sales are normally twice as large as Feb ruary sales. The index is tentative and subject to amendment as more experience accumulates concerning the factors affecting retail trade. In August this index was one per cent, above the esti mated normal for that month, a marked gain over July when it was 7 per cent, below the estimated normal. The diagram on this page shows the index of department store sales during the past several years. The volume of business has not fluctuated in any month more than 10 per cent, from what might have been normally ex pected. Companion diagrams show indexes of chain store and mail order sales computed in similar fashion. Chain store sales show even less fluctuation from esti mated normal than do department stores. On the other hand mail order business showed heavy losses during 1920 and 1921 reflecting lowered purchasing power in rural districts. In 1922 and early this year there was a recovery but August sales were 19 per cent, below normal. Stocks carried by department stores on September 1 were 8 per cent, larger than those on the same date last year. Stocks increased 7 per cent, between August 1 and September 1 because of the receipt of fall and winter merchandise. Detailed figures by cities are shown in the following table. N et Sales D uring A ugust Stock , R etail V alue , Sept . 1 (August 1922=100 Per cent.) (Sept. 1, 1922=100 Per cent.) All dept, stores___ New Y o r k ............ Rochester............ Bridgeport........... Elsewhere in 2nd D istrict........... Apparel stores. . . . Mail order houses 1919 1920 1921 1922 1923 1919 1920 1921 1922 1923 87 87 86 85 72 100 107 101 98 104 108 97 119 125 95 93 98 101 94 108 105 100 100 100 100 100 100 100 111 110 111 111 99 125 107 94 94 100 95 98 116 103 126 126 131 134 153 161 118 101 99 103 108 115 121 102 100 100 100 100 100 100 100 108 108 113 110 102 112 95 89 84 142 101 99 137 93 94 99 100 100 100 107 119 127 88 80 113 104 104 94 100 100 106 113 PER. CENT 150,-------- 100 sr * s t DEPARTMENT STORE 1919 1920 1921 1922 1915 Department Store Sales in the Second Federal Reserve District. Allowance is made for Price Changes, Seasonal Variation, and Year to Year Growth Chain Store Sales, exclusive of Groc eries. Allowance is made for Price Changes, Seasonal Variation, and Year to Year Growth Sales by Mail Order Houses. Allow ance is made for Price Changes, Sea sonal Variation, and Year to Year Growth 8 MONTHLY REVIEW, OCTOBER 1, 1923 PERCENT. Amusement Receipts, based on Amuse ment Tax Collections reported by Com missioner of Internal Revenue. Allow ance is made for Seasonal Variation PERCENT. PER CENT. Advertising in Newspapers and Maga zines compared with Estimated Nor mal. Allowance is made for Seasonal Variation and Year to Year Growth Newark department stores reported a gain in August of 11 per cent, in sales as compared with August a year ago in spite of a strike which tied up all the street rail ways. Department store business in New York City was dis turbed during the latter part of September by the strike of newspaper pressmen which prevented the stores from carrying on the usual newspaper advertising programs. At this time it is difficult to determine the effect upon sales, but merchants assert that business this September compares favorably with that of last year. Life Insurance Sales Sales of life insurance, in common with savings bank deposits, are an index of one type of purchasing power of the consumer. The accompanying diagram compares life insurance sales, exclusive of group and industrial in surance, during recent years with an estimated normal which allows for seasonal variation, and normal year to year growth. Allowance has also been made for changing price conditions by dividing insurance sales by the cost of living. The index figures therefore show the purchasing power of insurance written. The figures are based upon statistics reported to the Life Insurance Sales Bureau by 48 companies having in force approximately 80 per cent, of the outstanding insurance in this country. As shown by the diagram, life insurance sales were largest in 1919 just after the close of the war, possibly partly due to a more widespread familiarity with insurance resulting from Government insurance. During 1921 and part of 1922 sales were below normal, but in recent months have been slightly above normal. Sales of new Life Insurance, exclusive of group and Industrial Insurance compared w ith Estimated Normal. A l lowance is made for Price Changes, Seasonal Variation, and Year to Year Growth of amusement. The accompanying diagram shows the trend of receipts in terms of the average for the past four and a half years which is taken as the normal, with allow ance made for seasonal variation. Comparison with other indexes of business activity indicates a considerable lag in the movement of amusement receipts which reached their maximum late in 1920 and their later minimum towards the end of 1922. During this year amusement re ceipts have been close to the average of the preceding five years. Chain Store Sales August sales by all types of chain stores reporting regularly showed increases compared with a year ago ranging from 7 per cent, for cigar stores to 28 per cent, for apparel stores. The increases in some cases were due to the opening of new stores but for ten cent stores average sales per store showed a gain. The in crease in the value of shoe sales was due to an advance of 15.8 per cent, in prices, as the number of pairs sold declined 2 per cent. Detailed figures follow. Number of Stores N et Sales D uring A ugust August 1922 *ss 100 Per Cent. 1920 1921 1922 1923 Per cent. Change in Sales per Store, Aug. 1922 to Aug. 1923 96 87 102 108 100 102 96 89 88 103 97 101 100 100 100 100 100 100 128 118 117 114 109 107 -1 2 .0 + 1 4 .4 - 8 .3 - 0 .9 - 2 .8 + 0 .3 98 91 100 117 - Type of Store A pparel................... G rocery................... D ru g ........................ C igar........................ Aug. 1922 Aug. 1923 1919 373 1,763 11,560 213 279 2,591 543 1,817 14,757 244 312 2,754 66 73 71 122 87 79 16,779 20,427 73 4 .2 Amusement Receipts The volume of amusement receipts may also be con sidered as a measure of the margin of purchasing power of the consumer in excess of the ordinary necessities. The amount of these receipts is indicated by the taxes col lected each month by the Commissioner of Internal Rev enue as a 10 per cent, levy on receipts at various places An index computed by this bank of sales of chain stores other than groceries shows an increase of 4 per cent, between July and August as illustrated in the diagram on page 7. Sales of these stores are excep tionally steady and are little affected by changes in busi ness conditions.
@FedFRASER