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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

D is t r ic t

Federal Reserve Bank, New York

B u s in e s s C o n d it io n s in t h e U n i t e d S t a t e s
N D U ST R IA L activity and distribution o f com­
modities continued in large volume in A ugust at
a level higher than a year ago. The general level
o f wholesale prices receded further in August, reflecting
price declines fo r agricultural commodities.

I

P r o d u c t io n

The index of production in basic industries, which is
adjusted fo r the usual seasonal variations, declined
slightly in August, but this decline was accounted fo r
by the fact that there were five Sundays in A ugust as
against fou r in July. Textile m ill activity and produc­
tion of steel ingots, zinc, and petroleum increased, while
the output o f pig iron, lumber, coal, copper, cement,
and sugar was smaller than the month before. A u to­
mobile production increased considerably in August and
was larger than in any month since A pril. F actory
employment and pay rolls, after declining in July, in­
creased in August, as is usual at this season of the year.
Building activity, as measured by contract awards in
37 states east o f the R ocky Mountains, was in larger
volume in August than in July or in any other previous
month with the exception of August 1925. In eastern
and southeastern states the volume o f building was
smaller in August than a year ago, while in the Middle
TER CENT.

Index of 22 Basic Commodities, adjusted for Seasonal Variations
(19 19= 100) Latest figure, August.




R e s e r v e

October 1, 1926

W est contracts awarded were larger.
Contracts for
residential structures were smaller than last year, while
those fo r industrial buildings and for public works and
public utilities were substantially larger.
Crop conditions im proved in August, according to a
statement by the Department o f Agriculture. September
forecasts of yields o f corn, barley, hay, tobacco, and most
fru it and vegetable crops were above those made in
August, while expected yields o f oats and spring wheat
were slightly less. A cotton crop o f 15,810,000 bales
was indicated on the basis of the condition of the crop
at the middle of September. The crop, however, is later
than last year and ginnings up to September 16 amounted
to only 2,511,000 bales, compared with 4,282,000 bales
prior to September 16, 1925.
T r ade

Volume o f wholesale trade and o f sales at department
stores increased in August and retail sales were larger
than a year ago. Stocks o f dry goods and shoes carried
by wholesale firms were smaller at the end o f August
than last year, while those o f groceries and hardware
were larger. Inventories o f department stores increased
in preparation fo r autumn trade, but this increase was
less than is usual at this season. Freight car loadings
in August continued higher than in the corresponding
months o f previous years and fo r the weeks of A u g ­
PERCENT

Indexes of Factory Employment and Factory Payrolls in Manufac*
turing Industries (1919 averages 100 per cent) Latest
figures, August,

M O N THLY REVIEW , OCTOBER 1, 1926

2

‘BlLUON5ofDOLLARS

Index of United States Bureau of Labor Statistics (19 1 3= 1 00 ;
base adopted by Bureau). Latest figure, August.

ust 28 and September 4 exceeded all previous weekly
records.
Loadings of grain continued large and
shipments o f merchandise in less-than-ear-load lots,
miscellaneous commodities, ore, and coke were consider­
ably larger than in the corresponding period o f previous
years.
P r ic e s

Wholesale commodity prices, according to the index of
the Bureau o f Labor Statistics, declined by over 1 per
cent in August, reflecting largely price decreases for
grains, livestock, and meat products. Prices o f clothing
materials, fuels, and metals increased between July and
August, while prices o f cotton, wool, sugar, building
materials, and rubber showed little change. In the first
half of September prices of grains, cattle, sugar, bitumi­
nous coal, and coke advanced, while prices of raw cotton,
silver, and bricks declined.
B ank

C r e d it

Increased demand fo r bank credit in connection with
the harvesting and marketing o f crops and autumn trade,
together with an increase in loans on securities, was
reflected in a considerable growth between the middle of
August and the middle o f September in loans o f member
banks in leading cities. The banks’ holdings o f invest­
ments also increased, though there was a decrease in
investments at banks in New Y ork City, and total loans
and investments on September 15 were larger than at
any previous time.
The volume o f Reserve Bank credit increased by about
$90,000,000 between A ugust 18 and September 22, partly
in response to seasonal demands fo r currency. Discounts
for member banks rose in September to the highest figure
fo r the year, and acceptance holdings also increased,
while United States securities declined b y about
$55,000,000.
Money rates continued to rise in September. Rates on
commercial paper advanced by one-fourth per cent to
4 % -4 % per cent, and rates on security loans also aver­
aged higher than in August.




Reserve Bank Credit: Monthly averages of daily figures for 12
Federal Reserve Banks. Latest figures are averages
of first 23 days in September.

M o n e y M a rk et
Money rates advanced in September to the highest
levels since the early months o f 1924. The rise accom­
panied a continued loss o f funds to the money market,
due to the fall expansion in requirements fo r credit and
currency. Rates prevailing near the end o f September
are com pared in the follow ing table with those o f a
month previous and a year ago.
Money Rates at New York
Sept. 29
1925
Call Money....................................................
*4-5 ^
4M -4%
Time Money—90 day...................................
Prime Commercial Paper.............................
4M
Bills—90 day unendorsed.............................
3K
Treasury Certificates and Notes
2-4 months......................................
2.98
5-7 months...................................... . . 3.37
Federal Reserve Bank of New York-Rediscount Rate..........................................
3^
Federal Reserve Bank of New York-Buying
Rate for 90 day Bills.....................
3^

Aug. 28
1926

Sept. 29
1926

*4 ^ -5
5
4H
3M

*5-5 H
5
4 ^ -4 ^
3Vs

3.29
3.40

3.55
3.56

4

4

3%

3M

* = Prevailing rate for preceding”week

Commercial loans o f member banks increased steadily
during September, and loans on stocks and bonds in­
creased considerably. The consequent increase in de­
posits and in reserve requirements o f commercial banks,
together with losses to reserves caused by the seasonal
outflow o f currency, resulted in withdrawals o f funds
from the New Y ork market, and made necessary a sub­
stantial increase in Reserve Bank loans to New Y ork
City banks during the first half o f the month.
T reasury

Tax

P erio d

O p e r a t io n s

A fte r the middle o f the month Treasury operations
were the controlling factor in the money market.
Throughout the country the Reserve Banks redeemed fo r
the Treasury about $400,000,000 o f m aturing notes, paid
$70,000,000 o f interest on United States Government
securities, sold a new issue o f $379,000,000 o f certificates,
and collected nearly $450,000,000 o f income taxes. From
one-third to one-half or more o f these various payments
and receipts took place in New Y ork.

3

FEDERAL RESERVED AGENT AT NEW YORK

and the effects on bank reserves, borrow ing by city banks
at the Eeserve Bank, and the call rate.

M illio n s o f d o lla r s

+180

L oans

13

\A

15

16

17

IB

19

20

21

ZZ

23

24

25

MILLI0N5ofDOLLAR.S
+40

on

S tocks

and

B onds

Loans to brokers and dealers in securities by leading
New Y ork City banks, fo r their own account and for
account o f others, continued to increase gradually, and
at the middle o f September were $400,000,000 above the
low point o f the year in May, and were the highest since
March. A s the above diagram shows, a considerable part
o f the increase in loans since May has been from funds
supplied by organizations other than banks. Loans fo r
out-of-town correspondent banks have also increased,
while loans by New Y ork City banks fo r their own ac­
counts have shown little net change since June. Total
loans on stocks and bonds o f all reporting member banks
throughout the country also increased further, and on
September 15 were the highest since the first week of
January. In the third week o f September, however,
there was a reduction o f about $50,000,000 both in
brokers’ loans and in total security loans o f member
banks.
B IL L I O N S
O F DO LLARS

V x
13

14

15

16

17

18

19

20

21

ZZ

23

24

25

\ CORRESPONDENTS
A \»

1

\

hate

A ^~'A

/\

/ V— /

ow fACCOUNT

OTHERACCC

a
l

.5

Effect of Treasury September Tax Period Operations on New York
Money Market.

In anticipation o f heavy Government disbursements
on September 15, New Y ork City member banks repaid
a substantial amount of loans at the Reserve Bank.
The redemption of notes and payment o f interest on the
15th exceeded the amount o f income tax checks actually
collected on that day by more than $100,000,000, which,
with incoming transfers o f over $50,000,000 (the result
of a similar situation in other districts), caused a large
surplus in reserves of New Y ork banks, despite further
repayments of loans at the Reserve Bank. A temporary
easing o f money rates followed, but as the surplus in
reserves was eliminated by heavy tax collections and out­
going transfers, money conditions became firmer before
the end o f the week. A substantial deficit in the reserves
o f New Y ork City banks at the beginning of the follow ­
ing week, together with further tax collections, resulted
in renewed borrow ing from the Reserve Bank, and money
conditions remained firm during the latter part o f the
month.
The accom panying diagram shows day by day during
the tax period the gains and losses to the money market




i— i
___ 1 ---1_.. .. ----- 1------1-----JAN- FEB- MAR: APR- MAY JUN- JUL- AUG- SEP- OCT- NOV- DEC1 9 2 6

Loans to Brokers and Dealers in Securities Placed by New York
City Reporting Member Banks.

B il l M

arket

The amount o f new bills offered to the market during
September increased somewhat, in keeping with the usual
seasonal tendency. A t the same time, there was a more
active demand fo r bills, principally by New Y ork City
banks fo r the investment o f foreign balances, but also
by out-of-town banks. Consequently dealers’ portfolios
increased only slightly from the low level o f the year
reached in August. Rates were unchanged after the
advance at the end o f A u g u st; dealers continued to pur­
chase 90 day unindorsed bills at 4 per cent and to offer
them in the open market at 3 % per cent.
C o m m e r c ia l

P aper M

arket

A further advance in September in open market rates
on prime commercial paper was indicated by an in­

4

M ONTHLY REVIEW, OCTOBER 1, 1926
P E R CENT

creased number of sales at 4 % per cent and fewer offer­
ings at 4 % per cent. A lthough the higher rate level
tended to bring the smaller country banks into the
market, the demand in general was only fairly active.
Due, however, to the relatively small supplies o f new
paper that were acquired from open market borrowers,
dealers’ lists remained limited in size. A n increase of
more than $250,000,000 in the commercial loans o f banks
throughout the country above the levels of last year
seems to indicate that industrial and commercial con­
cerns are borrow ing more largely from their banks than
through the open market. The amount of commercial
paper outstanding through 26 dealers at the end of
August was $638,000,000, a decrease of 2 % per cent
from the end o f July, and of 12 per cent from a year ago.
C h a n g e s in M e m b e r B a n k D e p o s it s
Total demand, time, and Government deposits of all
member banks shown by the June 30 condition reports
were $28,780,551,000, an increase of about $1,410,000,000
or 5 per cent over a year previous. This increase was
only about half as large as that in the year ended June
30, 1925. Deposits of banks in central reserve and re­
serve cities showed practically the same average rate of
increase as the banks in smaller localities.
A s the accom panying diagrams show, time deposits of
member banks continue to increase much more rapidly
than demand deposits. D uring the past seven years time
deposits more than doubled in country banks and trebled
in city banks, while demand deposits increased 25 and
35 per cent respectively. A s a result o f this rapid in­
crease, the June 30, 1926 condition statement showed
time deposits slightly larger than demand deposits in
country banks for the first time and nearly half as large
as demand deposits in city banks.
Billions
of Dollars

Billions
of Dollars

Deposits of 15 Savings Banks in New York City and 15 Savings
Banks Elsewhere in the Second District (Average Deposits in
1918=100 per cent). Latest figures September 10 , 1926.

with a line showing what the growth would have been
if it represented simply the accumulation o f interest
com pounded semi-annually at 4 per cent on the average
amount o f deposits in 1918.
This com parison indicates that in the representative
savings banks outside o f New Y ork City the increase has
only equaled the increase which would have occurred if
no deposits or withdrawals had been made in the last
eight years.
Deposits in New Y ork City savings banks on the
other hand evidently have had substantial net additions
to principal other than those provided by interest p a y­
ments. In both groups o f banks, while the amount o f
increase in deposits has been quite regular in most re­
cent years, the per cent or rate o f increase has been
slightly reduced. This may be partly accounted fo r
by the rapid increase in the time deposits o f commercial
banks.

Security Markets

Demand and Time Deposits of City and Country Banks.
1919 to 1926.

S a v in g s B a n k D e p o s i t s
Deposits in representative savings banks in this dis­
trict continue to increase by approximately the same
amounts as for some years past. In the accompanying
diagram the actual increases in savings deposits in New
Y ork City and elsewhere in this district are compared




A rise in stock prices early in September carried
railroad price averages to the highest levels in 14 years
and representative averages o f industrial stocks close
to the high levels of August. This rise was follow ed by
a period o f reduced volume o f trading and price irregu­
larity.
The principal activity in the bond market was in fo r­
eign issues. Led by advances in French and German
bonds, average prices o f foreign bonds reached by the
middle of the month the highest levels in recent years,
but later reacted slightly. Corporation bonds continued
the relative stability o f August, showing only minor re­
cessions, but United States Government issues were gen­
erally lower and one issue, the second 4 % per cent
Liberty Loan, reached the lowest level of the year.
Follow ing the usual seasonal decline in August, the
volume o f new security offerings increased in September,
and was about the same as the total fo r September 1925.

FEDERAL RESERVE AGENT AT NEW YORK
P£R CENT.

5

than Canadian or Latin Am erican issues, as is shown
in the accom panying diagram.
Latin Am erican financing in the first half o f this year
was the heaviest in recent years, and constituted 33 per
cent o f the total offerings, the largest proportion since
the second half o f 1922. Canadian issues accounted
fo r a larger share than in any period since the first half
o f 1923. Issues o f European origin declined from 50
per cent o f the total offerings fo r the entire year o f 1925
to 35 per cent in the first half o f 1926. The decrease in
European issues may be attributed to the absence o f any
large Government loans and to the grow ing ability of
the continental markets to absorb new security issues.
F or the two year period ended June 1926, foreign
loans issued in this country totaled 2% billion dollars,
o f which approxim ately a half billion represented re­
funding issues.
F o r e ig n T r a d e

The increase in domestic issues was due very largely to
the issuance o f $35,000,000 Illinois Central Railroad
bonds and $28,475,000 State o f New Y ork bonds, which
made the totals o f railroad, and state and municipal
financing the largest in several months. Public utility
financing, which in previous months constituted the
largest class of domestic offerings, was relatively small
in September. New offerings of all kinds of securities
in the first 9 months o f this year have amounted to
nearly 5 % billions o f dollars, or slightly more than the
total of the corresponding period last year.
F o r e ig n F in a n c in g
Offerings of foreign securities in this country during
September were somewhat larger than in August, and,
as in the two previous months, European issues con­
stituted the largest proportion o f the total. This indi­
cates a change from the tendencies o f the first half o f
the year, when European issues were only slightly larger
666
734

Foreign Security Offerings in the United States by Geographic
Distribution of Borrowers, Semi-Annual Totals since 1921.
(In millions of dollars)




E xports o f merchandise in August showed a seasonal
increase over July, and the total value at $386,000,000
was slightly larger than that o f a year ago. Imports,
however, failed to show the usual increase over July, and
at $336,000,000 were slightly smaller than the figures fo r
either the preceding month or August 1925. The result­
ing favorable trade balance o f $50,000,000 was the larg­
est since last December.
The chief increase in exports as com pared either with
July or with a year ago was in grain shipments. Grain
exports amounting to nearly $56,000,000 were $24,000,000 higher than in August 1925, and were the largest
fo r any month since the heavy grain export movement
late in 1924. Coal shipments continued substantially
larger than a year ago, but cotton exports, while con­
siderably larger in quantity than in A ugust 1925, were
somewhat smaller in value.
The volume o f crude rubber im ported in August was
30 per cent less than in July, and was the smallest for
any month since February 1925. Raw silk imports were
23 per cent larger in quantity than in July, and were
15 per cent larger than in A ugust 1925.
F o r e ig n E x c h a n g e
Despite the abnormal burden upon sterling exchange
this year resulting from the coal strike, rates during
September were maintained at higher levels than at this
season last year. W hereas the average rate fo r Septem­
ber 1925 was $4.8432, the average fo r the first 27 days
this September has been $4.8502.
The lira was quoted at about 1 /3 of a cent above the
previous month, accom panying the announcement in
Italy o f measures towards stabilization, but the French
franc declined to 2.73 cents and the Belgian franc to
2.59 cents. Spanish pesetas at 15.12 cents were over 1%
cents below the high point of 16.40 cents reached in
June last. The Danish and Norwegian currencies showed
little change during the month, but the Dutch guilder
has gradually declined to 40.02 cents. Follow ing the
removal o f Reichsbank control over the dollar exchange
toward the close o f August, the mark rose to 23.84 cents
for a few days, since which time it has remained at par.

MONTHLY REVIEW, OCTOBER 1, 1926

6

The F a r Eastern currencies have been particularly ac­
tive, the yen having advanced to 48.72 cents, the highest
point since November 1923. This advance reflects in
part a gradual improvement in Japanese economic con­
ditions, gold shipments made by the Government, and
buying by Chinese interests. Accom panying the decline
in the price o f silver, the Chinese currencies have shown
marked weakness, Shanghai rates fallin g to 64.06 and
H ong K ong to 50.13 cents, as compared with averages
o f 68.67 cents and 53.22 cents respectively in August,
and yearly averages o f 75.69 cents and 56.49 cents fo r
1925.
Canadian rates continued well above par, Brazilian
weakened slightly, and Argentine advanced to 40.74
cents, the highest since last July.
F o r e ig n M o v e m e n t s o f U n i t e d S t a t e s C u r r e n c y
Reports from large New Y ork City banks which are
the principal shippers o f currency between this and
other countries indicate considerably smaller net receipts
o f United States currency from foreign countries in the
first eight months o f this year than in the corresponding
period of 1925. It seems probable that current net re­
ceipts represent little more than the return of money
taken abroad by travellers or mailed to friends or rela­
tives abroad by foreign-born residents of the United
States. D uring July and A ugust o f this year receipts
of currency reached the largest proportions since July
a year ago, apparently reflecting the return o f currency
expended abroad during the tourist season.
The follow ing table shows shipments to and receipts
from foreign countries during the first eight months o f
the last three years.
(In thousands of dollars)

1924—first eight months...................................
1925—first eight months...................................
1926—first eight months..................................

Net
Receipts

Shipments

Receipts

17,006 i
3,4141
11,355

36,743

19,737

48,062

44,648

27,064

15,709

G o ld M o v e m e n t
The withdrawal by the Reichsbank o f $20,000,000 o f
earmarked gold from the Federal Reserve Bank o f New
Y ork accounted fo r the greater part o f $21,400,000 of
gold exports from the P ort o f New Y ork during the first
29 days o f September. Imports, which consisted o f
small amounts from various countries in Latin Am erica
and South Am erica, amounted to about $700,000. In
addition, $1,000,000 was shipped to Canada and $1,500,000 was received from Mexico.
E xports from the United States during A ugust totaled
$29,700,000, of which $20,000,000 went to Germany,
$8,000,000 to Canada, and $1,000,000 to the Orient.
Imports were slightly less than $12,000,000 and included
$9,700,000 from Australia and about half a m illion each
from Canada and Mexico. The net exports o f $17,700,000 reduced the im port balance fo r the year to Septem­
ber 1 to $78,400,000.
The countries o f destination or origin o f the principal
gold movements thus fa r this year and the net gain or
joss to this country are shown in the follow ing table.




Gold Movement to September 1, 1926
Country

Exports

Imports

Germany.........................
Canada............................
Mexico...........................
British India...................
Japan...............................
China & Hong Kong. . . .
Australia..........................
All other..........................

$22,170,880
35,141,255
4,217,981
469,785
60,000
4,047,139

$
650
80,101,916
15,913,227

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

Net

’ io,'440,673

’ *4,000,666
480,000
29,213,272
25,209,432

— $22,170,230
+44,960,661
+11,695,246
—
469,785
-J- 3,940,000
— 3,567,139
+29,213,272
+14,768,759

$76,547,713

$154,918,497

+$78,370,784

P r o d u c t io n
P roduction in a m ajority of lines increased from July
to A ugust and continued higher than a year ago, but a
considerable part o f the increase represented sim ply the
usual seasonal advance.
Autom obile production in­
creased substantially and was the largest since A p ril,
and more than seasonal gains occurred also in textile
mill activity and the production o f steel ingots. The
output o f p ig iron, coal, copper, cement, lumber, and
newsprint failed to show the usual seasonal increases.
This ban k’s indexes o f production, in which allowance
is made fo r the usual seasonal changes and year-to-year
growth, are shown below.
(Computed trend of past years =100 per cent)
1925

Producers' Goods

Pig iron......................................................
Steel ingots................................................
Bituminous coal........................................
Copper, U. S. mines.................................
Tin deliveries............................................
Zinc............................................................
Gas and fuel oil.........................................
Cotton consumption.................................
Woolen mill activity*...............................
Cement......................................................
Lumber......................................................
Leather, sole..............................................
Silk consumption*....................................

1926

Aug.

June

July

Aug.

93
98
96
100
110
107
127
108
84
91
131
103
79
130

114
108
100
102
107
99
111
95
92
83
135
107
67
105

113
104
101
109r
109
100
113
99
86
77
139
109
70
109

108
112
99
105
96
111

105
114
93
99
99
93
100
74
101
137
125
108
81
101
104
93r
93r
90

114
101
109
91
97
109
106
82
116
136
124
125
93
96
106
123r
131r
94

121
96
100
99
96
114r
106
70
107
139
124
129
86
105
103
126r
134r
97

104
93
99
112
99
103
105
73
105

92
83p
130
96p
73
126

Consumers' Goods

Cattle slaughtered....................................
Calves slaughtered...................................
Sheep slaughtered.....................................
Hogs slaughtered......................................
Sugar meltings, U. S ports.....................
Wheat flour...............................................
Cigarettes..................................................
Tobacco, manufactured...........................
Gasoline.....................................................
Tires..........................................................
Paper, total...............................................
Boots and shoes........................................
Anthracite coal.........................................
Automobile, all.........................................
Automobile, passenger.............................
Automobile, truck....................................

*=Seasonal variation not allowed for p=Preliminary

124
87
103p
99
145
156
99

Revised

C rop s
A s a result of further improvement during August,
the composite condition o f all crops on September 1 was
only 2 per cent below the ten-year average fo r that date,
as compared with 4 per cent below on August 1, and 6
per cent below on J u ly 1. The corn crop was aided in
some sections by A ugust rains, so that prospects on
September 1 were fo r a yield only about 7 per cent
smaller than in 1925. The condition o f pastures and
hay lands im proved during August, but the indicated

FEDERAL RESERVE AGENT AT NEW YORK

production of hay was smaller than fo r any year since
1918. This y ea r’s apple and peach crops are expected to
be the largest in recent years, and other fru it crops
are large.
The September 16 estimate o f the cotton crop indi­
cated a probable yield of 15,810,000 bales, or only 2
per cent smaller than the unusually heavy crop o f 1925.
Follow ing the publication of the report the price of
New Y ork spot cotton broke sharply to about 15 cents,
the lowest level in five years. On the basis of the Sep­
tember 16 indicated yield and present prices the value
o f the 1926 cotton crop appears to be about 30 per cent
smaller than that o f the 1925 crop.
B u ild in g
The volume o f contracts awarded in August fo r build­
ing and engineering projects in 37 states was $600,800,000, or 18 per cent larger than the J uly total, and the
largest amount ever reported with the exception of
August 1925. The F . W . Dodge Corporation reports
also indicated that contracts in the New Y ork and
Northern New Jersey district were substantially larger
than in July, although 27 per cent smaller than in
August 1925.
Contracts fo r public works and utilities were the
largest in recent years, and the total fo r industrial
projects was unusually large, while contracts fo r resi­
dential and commercial building were substantially
smaller than a year previous.
B uilding permits reported from 454 cities to S. W .
Straus & Co. were 9 per cent below the high level o f a
year ago. Especially large declines were reported from
Florida and a number o f other states where building
has recently been reported in exceptionally large volume.
The accom panying diagram compares permits issued
in 158 cities, adjusted fo r changes in the cost of building,
with the general trend of building during the past thirty
years. This indicates that, even after the moderate
declines from last y e a r’s level which have been reported
in recent months and with due allowance fo r the increase
in the purchasing power o f wage earners and others
since the W ar, the volume o f building projects this
year still continues very large.

I n d e x e s o f B u s in e s s A c t i v i t y
F ollow ing an increase in July, general business ac­
tivity appears to have declined slightly in August, after
allowance fo r seasonal changes. The indexes of bank
debits fo r this district outside o f New Y ork City and for
140 cities throughout the country declined from the high
levels of July, but fo r New York City alone, the index
advanced to the highest level since March.
In retail trade, department store and mail order sales
reached unusually high levels, while sales at chain stores
showed slightly less than the usual year-to-year growth.
Car loadings o f revenue freight continued at high levels,
though the increase over J uly was slightly less than
usual. Foreign trade, especially imports, failed to show
the usual seasonal increase from July.
In the follow ing table this bank's indexes o f business
activity are given in percentages o f the com puted trend,
with allowance fo r seasonal variations, and, where neces­
sary, fo r price changes.
(Computed trend of past years— 100 per cent)
1926

1925
Aug.

June

July

Aug.

103
104
102
114
83
94

104
110
91
120
82
91

103
110
109
122
101
89

101
105
107p
113p
132

103
98
120
120
101
94
104r

95
93
126
115
110
104
106r

100
96
132
119
104
99
104r

108
94
135
115
106
101
109

P rim a ry Distribution

Car loadings, merchandise and misc.......
Car loadings, other...................................
Grain exports............................................
Panama Canal traffic...............................
Distribution to Consumer

Department store sales, 2nd Dist...........
Chain store sales.......................................
Mail order sales........................................
Life insurance paid for.............................
Real estate transfers................................
Magazine advertising...............................
Newspaper advertising.............................
General Business Activity

Bank debits, outside of N. Y. City........
Bank debits, New York City..................
Bank debits, 2nd Dist. excl. N. Y. C ...
Velocity of bank deposits, outside of New
York City..............................................
Velocity of bank deposits, New York City
Shares sold on N. Y. Stock Exchange*..
Postal receipts...........................................
Electric power...........................................
Employment in the United States**----Business failures.......................................
Building permits.......................................
New corporations formed in N. Y. State

109
122
107

111
118
106

116r
123
110

112
132
102

100
116
160r
99
107
103
101
161
135

101
115
181r
99
112
103
116
148
138

108r
123
173r
101
112
103
100
128
126

103
132
209
98
...1
104
105
137
108

General price level....................................

186

186

185

185

*=Seasonal variations not al^wed for p=Preliminary
sedes New York State Employment

r=Revised

**=Supe r-

E m p lo y m e n t

Building Permits issued in 158 Cities, 1919-1926, Reduced to 1913
Dollars by Adjustment for changes in Building Costs, and
compared with the Trend of Building from 1895 to 1925.




The beginning o f the fa ll increase in industrial ac­
tivity was reflected in an increase o f about 1 per cent
in factory employment from July to August. Increased
working time also was indicated by larger per capita
earnings and payroll totals.
Nearly all branches o f the textile industries in New
Y ork State reported increased working forces in August.
The largest gains were in silk goods and knit goods, but
employment in carpet and rug and woolen and worsted
mills also showed moderate increases. The w om en’s
clothing industry showed only a part o f the usual sea­
sonal increase, due to the continuance o f the strike in
the cloak and suit trade.

M O N TH L Y REVIEW. OCTOBER 1. 1926

E m ploym ent in iron and steel mills increased slightly,
but at least small reductions occurred in the machinery,
railroad equipment, automobile, and other metal work­
ing industries. The building materials industries, other
than cement, also showed some curtailment in August.
A s the result o f the seasonal increase in industrial
activity, together with farm requirements fo r fru it
picking and other fa ll work, the number o f workers
called fo r at State employment offices, relative to regis­
trations fo r employment, reached the highest level of
the year.
D e p a r t m e n t S t o r e B u s in e s s
Department store sales in this district during A ugust
were 10 per cent larger than in A ugust last year, due
partly to an additional selling day in New Y ork and
vicinity and an additional half day in up-state cities.
This ban k ’s index of sales, in which allowance is made
fo r the number o f selling days, as well as seasonal varia­
tions, price changes, and year-to-year growth, increased
to 108 per cent of the estimated normal, com pared with
100 per cent in July and 103 per cent a year ago. In
New Y ork, Buffalo, and the A lbany District, the in­
creases in sales were the largest reported since last
October. A pparel store sales increased 13 per cent and
mail order sales 11 per cent com pared with A ugust 1925.
The increase in stocks on hand at the end of the month
was small com pared with the 10 per cent increase in
sales, so that the rate of turnover fo r the month was
much higher than a year ago, and the cumulative rate
o f turnover since the first o f the year was higher than
in 1925 fo r the first time this year.
F ollow ing increased sales in recent months, collections
on both charge and instalment accounts were over 9 per
cent larger than last year. Charge accounts outstanding
at the end of the month showed about the same increase
as at the end of July, and outstanding instalment ac­
counts were larger than last year in all reporting cities
except New York.
Percentage Change
August 1926 from August 1925
Locality
Net
Sales

Stock on
hand end Collec­
of month tions*

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

+11.2
+ 6.2
+ 8.9
— 1.1
+11.2
+ 8.6
+ 4.3
— 3.8
+ 4.1
— 1.8
+ 5.6
+ 7.1
+19.8

+ 1.8
— 0.7
+ 3.0
— 12.2
+10.7
+ 6.9
+ 3.8

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

+ 9.8

+ 2.4

A.poarel stores.................................................
Mail order houses......................... ................

+13.4
+10.7

+ 5.3

+15.5
+ 1.7
+23.7

+io'.9

+i8*.7

'+5.i

+ 7.6

+14.8

*—Exclusive of instalment accounts

The follow ing table shows a comparison o f A ugust
sales and stocks in various departments with those o f a
year ago.




Books and stationery..............................
Men's and boys’ wear............................

Women’s and Misses’ ready-to-wear. ..
Men’s furnishings...................................
Luggage and other leather goods..........
Toilet articles and drugs........................
Women’s ready-to-wear accessories.. . .
Home furnishings....................................
Silks and velvets.....................................
Toys and sporting goods........................
Silverware and jewelry...........................
Woolen goods..........................................
Musical instruments and radio..............

+ 1.3
—20.3
+ 3.0
+ 3.8
— 3.5
— 3.7
+11.9
— 10.9
— 0.5
+10.0
+ 6.8
— 9.6
+ 5.4
— 4.5
+ 0.8
+ 4.3
— 32.8
— 14.4
— 12.1

+28.2
+23.4
+23.4
+23.0
+22.7
+20.8
+20.6
+15.8
+13.3
+12.6
+12.5
+12.3
+ 9.7
+ 8.3
+ 7.4
+ 6.0
— 16.6
— 18.5
— 2.6

W h o le s a le T r a d e
August sales o f leading wholesale dealers in this dis­
trict were 8 per cent smaller than in A ugust 1925, due
largely to continued heavy decreases reported in sales of
w om en’s clothing. The year-to-year decreases were very
small in all other lines except jew elry, and in all cases
were smaller than in July. Sales o f cotton jobbers, al­
though still below the level o f last year, were in the
largest volume fo r any month since last October.
Increases over last year were reported in seven out o f
fifteen reporting lines, and in the cases o f silk goods,
diamonds, stationery, and shoes, the August sales were
the largest fo r that month in the last five years. The
increases in sales o f drugs and machine tools were the
largest fo r any month since last spring.
Stocks o f silk goods at the end o f August showed the
smallest year-to-year increase in more than a year, while
in cotton goods stocks the first increase in over a year
and a half was reported. H ardware stocks were smaller
than a year ago fo r the first time this year.
Follow ing decreases in sales in most recent months,
collections averaged 5 per cent smaller than in A ugust
1925, the largest decrease reported this year.

Acc’ts
Receiv­
able*

+ 8.0
+ 6.2
+25.9

+ 9.4

Stock on Hand
Net Sales
Percentage Change Percentage Change
August 31, 1926
August 1926
from
from
August 1925
August 31, 1925

Commodity

Percentage
Change
August 1926
from
July 1926
Net
Sales

Men’s clothing.............
Women’s dresses..........
Women’s coats and
suits..........................
Cotton goods-Jobbers.
Cotton goods-Commission..........................
Shoes............................
Drugs...........................
Hardware.....................
Machine tools..............
Stationery....................
Paper.................... ..

Weighted Average . .

— 7.4
+ 96.3
+120.3
+137.1
+ 16.2
+
+
+
+
—
—
—
+
+
+

+ 3.9

+ 6! 6

Net
Sales
— 0.5
— 2.2
—28.2
— 66.5
— 1.5

— 0.5
13.2
13.9 — 5.7* + 3.1
26.4 + 1.8
+ 6.5
4.3 + 7.9
+12.9
3.3 — 1.2 — 0.2
18.2
+ 8.9
+ 6.5
3.1
+ 3.7
4.7
+ 5.8
31.1
33.7 | + 0 .3 — 11.6

+ 43.3

*—Quantity not value.

Stock
end of
month

Percentage Change
August 1926 from August 1925

— 8.2

Stock
end of
month

Collections

Acct’s
Receiv­
able

— 2.6
+ 0.2
— 7.8

+ 2.4
+ 5.2
— 2.7

+ 0.9

—43.6
— 11.0

— 52.9
— 11.2

+ 3.2*
—26.2
— 4.2
— 0.2

+
+
+
+

3.6
5.7
2.8
2.2

+ i0 .2
— 0.5
+ 13.2
+ 2.8

| + 8 .7

— 9.0
} + 9 .9

— 10.3
} + 1 1 .2

— 5.4

— 3.3

+ 3.7