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MONTHLY
REVIEW
Of Industrial and Financial Conditions in the New England District
By Frederic H. Curtiss, Chairman and Federal Reserve Agent
FEDERAL
VOL. XI
RESERVE
BANK
OF
BOSTON, MASS., DECEMBER 1, 1929
BOSTON
NO. 12
THE SITUATION
Duri'11 recent w.:eks there has been a continua- duction of boots and shoes in New England during
tion of a recession in the general level of indus- the first 10 months of this year was approximately
trial activity in New England, but the declining 2.5 per cent greater than in the corresponding
tendency in this district has been less pronounced period of 1928, as compared with an increase of
than for the country as a whole. New England about 17 per cent this year over last year for the
industry is not directly influenced by changes in country as a whole. New England textile activity,
two of the basic indt • tries of the country,- which slowed down somewhat during the third
automobile production and iron and steel pro- quarter, became more pronounced during October,
duction,-both of which reflected reductions of and both cotton and wool consumption was
considerable degree in
slightly above the usual
output during October.
seasonal amount. EmTOTAL LOANS AND NET DEMAND DEPOSITS
S!:LECTED MEMBER BANKS
The fact that general
ployment conditions in
UNITED STATES AN&> NEW ENGLAND
business activity in the
1925
1926
1927
1928
17
New England remained
UNITED
aggregate has remained
satisfactory during Ocat a high level quite
tober, although a slight
steadily throughout the
decline
m the total
lQ
13r""r.-----...=r-~~-~
greater part llf the year
number employed was
f 1 2 1 - - - - - - t - - - - + - - - - - + - - - - + - - ---i
seems to be indicative
reported. A fairly sub~ ll
~
that industry is well
stantial decline in ag~
L4
di versified in New Enggregate payrolls,
3 J,3f-----+--__:t=-----=-:=~-F-=-=::,,,,,,..,_.i,._~__:---l
~ l.2f-----:...d-~--,--+--------:c-f-=t----+------ - - - - l
land.
Factors which
amounting to more
have been sustaining
than 11 per cent, was
influences this year are
reported during Octoelectric power producber by the boot and
tion, merchandise and
shoe establishments in
miscellaneous carload- In October total loans of selected member banks, both in the United Massachusetts. In
States and in New England, increased to exceptionally high levels, and,
ings, shoe production, as will be seen from the above chart, followed very similar trends Rhode Island the jewelthroughout the year to date. The volume of net demand deposits in
wool consumption, allied New England member banks likewise followed a course during the year ry, metal trades, and
similar to the changes in net demand deposits of United States reporting
member banks.
\inetal trades, and the
rubber goods manufacactivity necessary in
turers reported increases
catering to the recreational features of New in the numbers of workers employed. Sales of reEngland. The ''tourist" business has been ex- porting New England department stores in Octopanding rapidly in New England during recent ber were 7.1 per cent larger than in October, 1928.
years, and has furnished considerable employ- During November, except for the last five business
ment and use for capital, in addition to stimulat- days, sales of Boston department stores were 1.5
ing highway construction. Total value of con- per cent less than in the corresponding period a
tracts awarded for new building in New England year ago. Money rates declined sharply in Noin October was larger than during September, vember and on November 25, United States Cerbut was less than in October a year ago. Residen- tificates of Indebtedness (March 15 maturity)
tial building in October, although about 28 per were yielding slightly more than three per cent,
cent larger than in September, was 16 per cent and prime ,_90-day Bankers' acceptances were 3ys
below the corresponding month a year ago. Pro- per.,, cent.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
~
' - - - - - - ' - - - - - . L . . . - - - _ . . . . __ _ _. L . , . __ _
!
2
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
December 1,
MONEY AND BANKING
Although the decline in money rates during
November was abrupt, the easing was not unparalleled. Both in 1924 and in 1921 the drop in
money rates was faster and more extensive. The
reason for this situation appears to be that most
of the credit liquidation which has thus far taken
place has occurred in brokers' loans made by
lenders other than banks. Such a liquidation;
instead of easing the situation, in reality threw
an added burden upon some banks, so that there
has been no decrease in the total volume of
banking credit in use. The March 15 maturity
of United States Certificates of Indebtedness,
for example, was yielding five per cent in the open
market in May, 4¼ per cent in October before
the stock market break, and only a trifle over
three per cent on November 25. Investment
bond yields are showing something of a similar
tendency. Brokers' quick call money in Boston
had dropped to five per cent on November
25, as compared with nine per cent early in
October. The decline in rates on prime 90-day
acceptances has been one of the outstanding
features of the money market, having dropped
from 5¼ per cent during the summer to 3ys .
per cent on November 25. This appears to
be a wide decline, but compares with a similar
drop in 1924 from 41/s per cent to two per
cent, and in 1921 from 6¾ per cent to 4¾
per cent. The easing in rates for brokers' comNEW
I 9 25
ENGLAND
1926
mercial paper has not been so marked, because
the market for such paper has been sluggish for
some time. Such paper is now available at S¼
per cent, as compared with 6¼ per cent a few
weeks ago. The Federal Reserve Bank of New
York reduced its rediscount rate twice during
November: on November 1 from six to five per
cent, and on November 15 from five to 4¼ per
cent. On November 21 the Federal Reserve Bank
of Boston reduced its rediscount rate from five
per cent to 4¼ per cent. Each Wednesday
between October 23 and November 20, inclusive,
the reserve ratio of the Federal Reserve Bank of
Boston was above 80.0 per cent.
Credit strain in Boston banks was at its peak
on October 23, just previous to the break in the
stock market. During the following week deposits
increased rapidly, while loans increased only
moderately, thus bringing about a temporary
easing in the credit situation locally. This situation, however, was transitory, as deposits began
almost immediately to decline, and have continued
their contraction each week since October ·30, so
that on November 20 all but $20,000,000 of the
increase had been cancelled. Throughout this
period, on the other hand, the total volume of
loans and discounts remained virtually unchanged,
although there had been considerable increase in
commercial loans, counterbalanced by a corresponding decline in collateral loans. Nevertheless,
the Boston banks were enabled to reduce their
MEMBER
1927
BANK
CREDIT
192 8
1929
During the latter part of. October total loans and discounts of New England member banks stood· at higher levels than at any time during
the J;>_ast five years. Dunng the first three weeks of November only a small decline had occurred. Since the middle of August borrowings
by New-..,Englaod member banks from the Federal Reserve Bank of Boston have been declining quite sharply, and at the first of November
•
were inLsmaller volume thao{at any time in nearly two years.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1929
3
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
borrowings from the Federal reserve bank substantially, continuing a contraction which had
been in progress since mid-summer. On November 20 they were almost out of debt to the Federal
reserve bank, borrowing only $4,181,000.
The situation in the country banks is in marked
contrast to that in the Boston banks. Almost no
increase occurred in the deposits of the reporting
member banks outside of Boston during the week
from October 23 to October 30, but following that
date deposits declined about two per cent from
the level of October 23. The contraction in total
loans and discounts, following the temporary
expansion on October 30, was moderate, so that
these banks found themselves under the necessity
of borrowing heavily from the Federal reserve
bank.
Summarizing briefly the foregoing, therefore,
it appears that the Boston member banks have
greatly reduced their recourse to the reserve bank,
and, as measured by the relation of the demand
for and supply of loanable funds, have somewhat
improved their own condition during the month
ending November 20. The reporting outside
member banks, however, have increased their
recourse to the reserve bank, and are in a less
favorable position as regards the relationship of
demand and supply of loanable funds.
During this period the volume of Federal
reserve credit in use in New England declined
substantially, and amounted to only $62,000,000
on November 20, 1929. This was less than half
the $139,000,000 outstanding on May 29 of this
year. Some of this contraction took place in
holdings of acceptances, but this to a large extent
was counterbalanced by increasing investments
in United States obligations. The major part of
the contraction occurred in loans to member
banks. It was pointed out above that Boston
MONEY
RATES
AND
BOND
banks have been steadily liquidating their indebtedness to the reserve bank, reducing their borrowings on November 20 to a little over $4,000,000,
as compared with about $70>000,000 borrowed on
June 26. This is the smallest volume of Federal
reserve funds borrowed by Boston banks since
1926, barring a single date in April, 1927. This
situation is to be contrasted with that of the
country banks, where the total borrowings of
a11 such banks amounted to over $38,000,000 on
November 20. With the exception of isolated
instances, this is the largest volume borrowed by
country New England banks since 1920.
The contraction in Federal reserve borrowings
appears to have occurred in those localities where
the activities are most closely in touch with the
stock market, the total of borrowings having
been reduced in Boston member banks and in the
state totals of all member banks in Rhode Island
and Connecticut. On the other hand, the localities which increased their borrowings during this
period were those which were located farthest
from the financial centers, and included the state
totals of all banks in Massachusetts located
outside of Boston and the total of all member
banks in Maine, New Hampshire, and Vermont.
It appears clear, therefore, that the credit situation
in New England is unusually mixed, both as
regards the position of the member banks and
the extension of credit by the reserve bank to the
member banks.
The rapid reduction in total bills and securities
of the Federal Reserve Bank of Boston in recent
weeks, together with the stationary character
of its deposits and Federal reserve note liabilities,
resulted in a sharp increase in total cash reserves,
which brought the reserve ratio to 86.3 per cent
on November 20, the highest, with the exception
of a few scattered dates, since 1924.
YIELD
RESERVE
BANK
rEDERAI. RE'.S£RVE
1928
CREDIT
DISTRICT l
1929
~ 125
~
.._
....""
~
Q:
....q,
"g 1 0 0 f - - - - - - - - - - + - + - - - - - - - - , , - . . - - - - - - i
4 1 - - - . . l . o ~ - - - - i - - - - - - - - ~ - - --+- - - - - - i
MONEY RATES
PRIME COMMERCIAL PAPER
(4-6 MONTHS QUOT£0)
3 f - - - - --
----+-------+-----,
Coincid ent with the sharp reduction in brokers' loa ns and the drastic
decline in the security marke ts. money rates, as indica ted by quotations
for \jrokers' prime commercial paper, dropped sharply between the
latter part of October and November 23. During the last three months
there has been little change in the a verage yield on GO high-grade bonds.
Digitized
for of
FRASER
Sources
data-Standard Statistics Company, Inc., and Federal Reserve
https://fraser.stlouisfed.org Bank of New York.
Federal Reserve Bank of St. Louis
i
~
75
~
50 ~ - : : , , , ~ r - - - - t - - ~ ~ ' = r t - - - \ - - - - - - t - - - ~ - j
25 ~
~
........
---~-'-'--==-'-.;c.:..:.::==-----"',---,.-,:.....--1----~
Gov·T SE~::-.
0 ,__,__._.....__,__,___._.....__..._.___._........_..__.___._....._..........__.__._.,L-<,__._~
Since May, 1929, there has been a continual decline month by month
in the volume of reserve bank credit in use in this district, and with
the exception of the change between May and June, changes in the
volume of loans to member banks correspond very closely with the
changes in the volume of total credit in use in this district.
4
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OP BOSTON
December 1,
NEW ENGLAND MARKETS
For the third successive month the Index of
New England Business Activity during October
reflected a gradual recession from the high rate
that prevailed in the summer months. The
factors con tributing to the present drop in the
index are somewhat different from those in August
and September. While in the past two months
the failure of certain production series to increase
to the full amount of the seasonal expectancy
resulted in a lower index, all the principal series
relating to production registered increases during
October, but other constituent series declined.
Boston:-Retail trade during October was considerably above that of the same month last year.
Production, as measured by carloadings and
employment, has been moderately active, although
indicating a level somewhat below October, 1928.
Building con tracts a warded recovered from the
low record of September.
Bridgeport:-There has been a distinct increase
in activity among the metal trades, which had
been tending to ease off in the past two months.
While total employment figures declined, the
numbers employed among the various metal
products and iron and steel groups were larger.
Carloadings and employment demand were greater
during October; also, building contracts made a
new high for the year.
Brockton:-Among the boot and shoe establishmen ts there has been a large reduction in the
numbers employed and a continuing decline in
the volume of shoe shipments.
Fall River:-With the falling off in carloadings
and employment, further curtailment in textile
operations is noticeable. There are indications of
recovery, however, in the growing volume of
cotton receipts.
Lynn:-The only important increase in employCOMPARISON
10
OF'
CHECK
ment in the state occurred in Lynn, according to
the Massachusetts Department of Labor and
Industries. This increase was 5.6 per cent in the
number employed, while average earnings declined
because of changing conditions in the boot and
shoe and the electrical equipment industries.
New Bedford:-There was renewed activity
among the fine cotton goods manufacturers during
October. Employment figures showed another
small increase, and carloadings were in slightly
greater volume. There were large gains in cotton receipts.
New Haven:-Carloadings, after declining in
September, rose in October to the greatest volume
for the year. Bank debits and retail trade continued strong, and the demand for workers and
building contracts increased substantially.
Providence:-Production an<l retail activity
were fairly well sustained, with some increases in
carloadings and building.
Springfield:-Employment during October was
good, although in slightly reduced volume in
most establishments, with a strong demand for
skilled metal workers and machinists. The value
of building contracts indicated no tendency to
improve.
Waterbury:-Carloadings for October increased
about two per cent over September, although
both months are well below the corresponding
September and October, 1928. While October
registered a small increase in numbers employed,
employment in brass concerns has been undergoing
some reduction during the past two months.
Worcester:-Carloadings and building contracts
were larger for October. Employment was in a
smaller volume than that which prevailed during
September. The demand for skilled workers was
not as great as for the less skilled type of labor.
BUSINESS
PAYMENTS
ACTIVITY-TEXTILE
ACTIVITY
NE:W ENGLAND
OCTOBER 1929 COMPARED
WITH OCTOBE:R 1928
MOS, 1929 COMP. WITH
SAME PERIOD OF' 19 2 8
BOSTON
1301+---+---+---+-----1---+--+--t------+--+---t------1
BANGOR
BROCKTON
F'ALL
RIVER
HARTFORD
HOLYOKE
LOWELL
LYNN
~
I 20Hl+--+--+---d-l--+----t---+-----i--+--+---t--1
~
I I O!t-t-+--t+:r.-+-tv-ilH--t-:---t---+---::-i--+--.t-tr-r--r,M-"-1
·"".:."'
I 00~l--l-4--1-~4-44~--P#~"-"'-"~f--~----l+-'-i
~
~
·';"
.,
~
90 l--.a-!--l--+-l---+---l--\-1f--ll-+----,l---¼-+---+-+--H--1
MANCHE:STE:R
NE:W BE:DF'ORD
~
80 l---ll-+-1-1---+---+---+-lrt-+----,l------+--+--H--t--1
NE:W
....
HAVE:N
PORTLAND
~
e;
SPRINGF'IELO
'l
WATERBURY
701---ttt~:-:-:-±=::--l---:-==-:l=:--+-----ir--t----t----t-------i
~
PROVIDENCE:
60 1----~l'------l---+---+--+----Jf---+---+----,--+---i
50 1----- # - - - - 1 - - - + - - - + - - + - - l - - - + - - - + - - - - - + - - - i
40 [,W,..__J._
There have been relatively slight changes in check payments since
September. There h as been some reduction in the volume of payments
in certain New England centers.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
_ . L_
_ L_
_ , 1 _ _ _ . , L _ _ t _ _ _ _ J _ _ - - - 1 . . ._
_ ! _~
The particular feature of interest in this chart is that for October the
textile activity index has apparently reversed its course and rose slightly
in spite of the continuing downward tendency evident in the general
business activity curve.
1929
COMMODITY PRICES AND
Commodity Prices:-The Bureau of Labor
Statistics index of wholesale commodity prices
for October declined about one per cent, the third
successive drop since July. One of the principal
sources of weakness during October was in the
farm products group. Weekly prices were turning downward more rapidly in the last few
weeks of October and early November, although
the prices for the third week of November indicate that for the present the decline has
resumed a more steady course. The midsummer
peak in commodity prices coincided with that
for industrial production, and the decline in the
price index (B. L. S.) has been synchronous with
the easing off in production, although the large
drop in the index for October for the most part
reflected the repercussions occurring within the
stock market. However, during the past two
years the commodity markets have been relatively
quiet, with prices fluctuating within a narrow
range of about five per cent.
Car/oadings:-Total carloadings for the United
States during October declined about twice as
much as the decrease registered in September,
which fact definitely places the peak for monthly
loadings this year in August, although the daily
average was the highest during September.
Since the last week in September, total carloadings have been in reduced volume, the weekly
figures averaging below those of last year. Merchandise and miscellaneous carloadings for the
country have been maintaining a slightly higher
level than those of a year ago, with the peak in
loadings this year about two per cent above that
of 1928. Total carloadings in New England since
the close of the first half of this year have been
showing a tendency to fall below the record ot
last year. At the end of June carloadings were
1.25 per cent ahead of the first half of 1928. Total
INDEXES
OF
PRODUCTION
UNITED
130
5
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
1923
1924
1925
AND
INDUSTRIAL CONDITIONS
carloadings in the third quarter were slightly below the corresponding months of last year, al though
the nine months record for 1929 was approximately 11,000 cars over the same period a year
ago. Carloadings of merchandise and miscellaneous freight in New England were the largest for
the fall season in the third week of October, the
average being equal to that of the corresponding
week in October, 1928.
Building:-Total value of building contracts
awarded in New England during October rose
almost $6,000,000 above September, but was
approximately $1,000,000 below that for October,
1928. The greatest gain was registered in residential building, which was 28 per cent ahead of
September, although 16 per cent below the corresponding month of last year. Residential building (number of square feet of new contracts
awarded) for October was in the smallest volume,
after seasonal adjustment, since May, and these
two months were the lowest on record for the
past five years. It is too early to determine the
influence that the rapidly easing rates in time
money will have toward resuscitating building
activity. One of the principal factors in the
retardation of new building in recent months
has been the gradually rising interest rates, which
movement had its inception early in 1928. Since
the close of September interest rates began to
Weekly averages of new
ease appreciably.
building through the third week of November
have not shown any noticeable increase in the
value of new contracts awarded.
Emplo_yment:-Although there was a slight
decrease in the total number employed in New
England during October, the employment situation has been reasonably satisfactory, with only
a moderate decline in the demand for workers.
In fact, during October the call for workers in
PRICES
1926
UNITED
1927
1928
..
SCALE
roR
STOCKS
J
I/"\
.,,
z
~
Cl..
While there was an almost indiscernible tendency for prices to decline
and an extremely large rise in the volume of production during the
past two years, the principal peaks and troughs of the price curve,
revealed certain broad contours that approximately
nevertheless,
corresponded to the movement in the production curve.
https://fraser.stlouisfed.org
Sources of data-Federal Reserve Board and United States Bureau of
Labor Statistiu,
Federal Reserve Bank of St. Louis
r..
"
0
:J
t5<.,
STATES
1923 1924 1925 1926 1927 1928 1929
19 9
....
PRICES
STOCKS-WOOL
WOOL
STATES
~
.... 600
I
V
;
i:
DOMESTIC
WOOL PRICE
DUNS '8 QIIO'TATIONS
v-\
~
SCALE
roR
PRICES
V'-~
h-,./
'--
90
80
70
50
QUARTERLY
WOOL STOCKS
z
0
::i 400
40.
.J
i
300
~
>--
z
-t
(/)
60
0
.,, 500
f;:
,.,;u-o
g
5
>-- 30
>-- 2.0
200
~
100
0
-
HELD
BY
MANUrACTURERS
-
10
0
c::l HELD BY DEALERS
During the present year prices of various gr~des of raw wool have been
declining rather sha~ply, and at the same time stocks of wool held by
dealers and manufacturers have shown moderate accumulation. The
situation appears to indicate a period of relative dullness.
Sources of data-U. S. Department of Agriculture and Dun's Rniew.
6
December 1,
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
Connecticut, after seasonal allowance as well as
in actual numbers, showed an increase. This
strengthening of the demand for skilled workers
is probably in part attributable to the increase
in machine tool orders which occurred during
October. In some lines of the metal trades, however, there were evidences of declines in the
number employed. The drop in employment
figures for reporting concerns in Rhode Island
in October was for the most part confined to
various textile plan ts. Other industries, including the jewelry, metal trades, and rubber goods
manufacturers, reported increases in numbers of
workers employed. In Massachusetts, according
to the Massachusetts Department of Labor and
Industries, reporting boot and shoe establishmen ts showed a decrease of 11.4 per cent in the
aggregate payroll and a decrease of 2. 7 per cent
in the number employed. The greatest decrease
occurred in the eight reporting radio establishments, which showed a decrease of 16.3 per cent
in the number employed. Electrical machinery
establishments reported an increase of 7.2 per
cent in the number employed. The call for
workers in Massachusetts was less than in September, which month normally represents the
fall peak in employment for this state:!.
Boots and Shoes:-The estimated production of
shoes in New England during October is threequarters of one per cent above that of the corresponding month of a year ago. Total production
of shoes through October of this year is now
approximately 2.5 per cent above the same period
of 1928. Total production for the United States
for the 10 months ending October 31, however,
was over 17 per cent ahead of the identical months
of last year. Output in certain New England
establishments has been partially curtailed in
recent months because of labor problems, which
now appear to have been satisfactorily settled.
The daily average shoe production in this district
KNIT
UNDERWEAR
was about 35,000 pairs less than in September,
and, after seasonal adjustment, indicated a decline
of four per cent in the rate of output. Shoe shipments for Brockton have been falling off gradually
since the last week of October, which month,
however, indicated a substantial seasonal increase
over September. Hide prices, after registering
moderate increases during September, again
resumed the easing tendency which has been in
evidence in recent months. Several grades are
now practically at the lowest prices of the year.
Textiles:-New England textile activity, which
in the earlier months of this year was a strong
supporting factor in the level of New England
industrial activity, but lapsed somewhat during
the third quarter, indicated renewed strength
during October. As measured by the textile
activity index, there was a gain of two per cent
in the allied textile industries, while the general
level of New England business declined moderately. Fine goods production recovered about
half of the decline registered in September. Both
cotton and wool consumption rose slightly above
the usual seasonal expectancy, while silk machinery activity declined still further from the May
peak. Cotton spindle activity in New England
was 15 per cent above that of September, while
for the country as a whole the October rate was
nearer 14 per cent. Cotton receipts in five New
England cities increased approximately 50,000
bales to the highest monthly total since December
1928. Wool stocks in the United States for the
third quarter were 28,000,000 pounds (grease
equivalent) above those of the record at the end of
June, and the total of 370,000,000 pounds, grease,
equalled that of the third quarter a year ago.
The various textile markets for raw materials
and manufactured goods have been comparatively
quiet, with the prices of raw wool, cotton, and
silk declining, as well as the quotations on finished
and semi-finished goods.
INFANTS'
SALES
300
I923
I9 2 4
I9? 5
I9 ? 6
I 9? 7
I9 ? A
I 9 ;:> 9
~ 250
~
:,.. 225
§~ 200
..,
"'
~
"'
I
I
175
150
I
~
~
~ 100
lo.
76
§
50
~
25
i
i
I
I
(
I
125
i
I
I\ /IT 7\/
V
V
V
y
~
!S
I
!I,,.
V
V
V
I
:l
1925
1926
1927
1928
I
!l-
\
/\ I
\(\/
\I\ I
.
V
V
,~
I
uu
0
Sales in the knit underwear departments of Boston department stores
were in practically the same volume in October, 1929. as in that month
Digitized
FRASER
of for
1028.
During the past year the sales in this department have been
relatively more steady than at any other time durinii the past six years.
https://fraser.stlouisfed.org
~
~
1929
i'
I
150
~
50
~
25
I
I
.I
I
i
100
75
!
I
i
175
lo.
I
i:
~ 125
I
I
I
····- MONTHLY INDEX
12 MOS. MOV AV£.
Federal Reserve Bank of St. Louis
1924
225
~
I
Ii
V
§
l
I
I
-\ IL \ i \ j
~
I
I
~
I
SALES
~ 200
I
I
1923
250
~
~ 275
~
WEAR
BOSTON DEPARTMENT STORES
MONTHLY INDEX AND 12 MONTI-IS MOVING AVERAGE:
BOSTON DEPARTMENT STORES
MONTHLY INDEX AND 12 MONTHS MOVING AVERAGE
)
I\ I
V
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- - · MONTHLY INDEX
12 MOS. MOV. AVE:.
0
In October. 1929, sales in infants· departments of Boston department
stores stood at a higher level than in any other October on record. The
data are available since 1923. Beginning with 1925, there has been a
steady iirowth in the net sales in infants' wear departments in the
Boaton atorea.
1929
7
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
RETAIL AND WHOLESALE TRADE
Sales of reporting New England department stores during October were approximately seven per
cent greater than in October, 1928, and were substantially higher than in that month in 1926 and 1927.
Increases were reported by stores in each of the New England states, except Vermont, where sales were
smaller than in October of the three preceding years, and New Hampshire, where sales were in about
the same volume as in October, 1928, but smaller than in October, 1926 and 1927. For the first 10
months of 1929, retail trade in all the New England states except Vermont showed an improvement
over last year.
New England department stores as a whole, as well as the Boston group, reported a slower rate of
collections during October than in that month of 1926, 1927, or 1928. Credit conditions in Providence
reporting stores, however, were more favorable in October, 1929, than in the corresponding month of
the three preceding years.
Sales of juniors' and girls' ready-to-wear by New England department stores during October increased nearly 23 per cent over the same month last year, which month showed a marked improvement
over October, 1926 and 1927; for the year to date sales of this department were greater than in the
corresponding period of 1926, 1927, and 1928. An increase of 17 per cent over October last year
occurred in the corsets and brassieres department, and sales of men's furnishings and boys' wear showed
gains of 15 per cent and 10 per cent, respectively. Sales of silk and velvet and woolen dress goods
continued to decline, and were smaller in October than in the same month of the three preceding years.
Connecticut Department Stores ......... .
Maine Department Stores .. ............ .
Massarhw,etts Department Stores ....... .
New Hampshire Department Stores ..... .
Rhode Island Department Stores ........ .
Vermont Department, Stores ............ .
Boston Department Stores ............. .
New Haven Department Stores ......... .
Providence Department Stores .......... .
New England Department Stores ........ .
New England Wholesale Shoe Concerns .. .
SALES CONDITIONS
1928 =100
Month of Octoher
1926
1927
1928
96
~6
100
82
94
100
98
100
103
110
106
100
94
92
100
95
92
100
98
100
104
99
100
100
94
92
100
97
100
102
113
110
100
1929
103
108
108
100
103
91
110
10!
103
107
97
January through October
1926
1927
1928
1929
96
99
100
103
86
94
100
104
101
103
100
102
103
105
100
101
100
101
100
103
94
95 7 100
94
102
103
100
113
97
100
100
101
98
100
100
103
100
102
100
102
104
108
100
105
CREDIT CONDITIONS
Percentage of Open Accounts Outstanding at the First of October
Collected during October
1927
1926
Boston Department Stores .................................. .
55.2%
51.0%
51. 9
55.4
New Haven Department Stores .............................. .
51.3
Providenf'e Department Stores ............................... .
51.2
51 . 7
49.4
New England Department Stores ..... ... ..................... .
New England Wholesale Shoe Concerns ....................... .
34.5
32.5
SALES BY DEPARTMENTS-NEW ENGLAND
1928=100
Month of October
1926
1927
1928
Silk and Velvet Dress Goods ............ .
113
109
100
Woolen Dress Goods ................... .
164
123
100
Cotton Drei;::i Goods .... ............... .
123
109
100
Silverware and Jewelry ................. .
96
89
100
Men's Clothing ....................... .
113
96
100
Men's Furnishings ..................... .
107
99
100
Boys' Wear ........................... .
112
98
100
Women's Ready-to-Wear ............... .
103
96
100
Misses' Ready-to-Wear ................ .
117
91
100
91
88
100
Juniors' and Girls' Ready-to-Wear ....... .
Millinery ........ .... . ... ............. .
108
100
100
Women'is and Children's Gloves ......... .
109
91
100
Corsets and Brassieres ................. .
103
102
100
Women's and Children's Hosiery ........ .
93
97
100
Knit Underwear, including Glove Silk ... .
115
98
100
114
109
100
Silk and Muslin Underwear ............. .
Women's and Children's Shoes .......... .
97
97
100
Furniture ........•....................
93
103
100
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
1928
49 .!1%
5.5. 5 •
51.2
48 .6
33.8
1929
46.5%
53 .8
52.5
46 .4
22.5
DEPARTMENT STORES
1929
94
89
102
109
104
115
110
99
106
123
102
112
117
109
100
106
100
106
January through October
1926
1927
1928
1929
129
112
100
91
145
118
100
82
121
105
100
97
93
102
100
103
103
101
100
97
97
99
100
102
105
102
100
98
104
·103
100 •
96
87
96
100
104
78
86
100
113
104
103
100
101
101
100
100
102
104
103
100
102
86
98
100
104
99
102
100
101
114
109
100
98
99
100
100
101
98
103
100
105
8
MONTHLY REVIEW OF THE FEDERAL RESERVE BANK OF BOSTON
Dec. 1, 1929
SUMMARY OF BUSINESS CONDITIONS IN THE UNITED STATES
INDUSTRIAL PRODUCTION
UNITED STATES
140
....
~
"
1925
1926
1927
1928
19 29
7
801---- ~ - - - t - - - + - - - - - - - , , - - - - - ;
~
Industrial production declined further in October, and there was also 11
decrease in factory employment. As compared with a year ago, industrial
activity continued to be at a higher level, and distribution of commodities to
the consumer was sustained. Bank credit outstanding increased rapidly in
the latter part of October, when security prices declined abruptly, and there
was a large liqui<lation of hrokers' loans by non-hanking lenders. In the first
three \Yeeks of November further liquidation of brokers' loans was reAectcd in
a reduction of security loans of member banks. Money ra.tes declined throughout the period.
Production:-Production in basic industries, which had declined for several
months from the high level reached in midsummrr, showed a further reduction
in October. The Board's index of industrial production decreased from 121
in September to 117 in October, a level to be compared with 114 in October of
last year.
60 V V ' , ' - - - - ' - - - - ' - - - - ' - - - - - ' - - " " " " " " " " '
The decline in production reflected chiefly further decreases in output of
steel and automobiles. Daily average output of shoes, leather, and fl.our also
declined, while production of cotton and wool textiles increased.
FACTORY
~ 120 1925
EMPLOYMENT AND
UNITED STATES
1926
PAYROLLS
Preliminary reports for the first half of November indicate further reduction
in output of steel and automobiles, and a decrease' in cotton textiles.
1927
Total out.put of minerals showed little change. Production of coal increased, and copper output was somewhat larger, while daily output of crude
petroleum declined slightly for the month of October, and was further curtailed
in November .
..,
i'<
., II0\--- - - - + - - - - ! - - + - - - + - 1
I
~
..._
EMPLOYMENT
§ 90, 1 - - . . + - - - - + - - - - + - - + - - - + - - - - - - - i
~
Volume of construction, as measured by building contracts awarded, changed
little between September and October, and declined in the early part of
November.
11. 8 0 , 1 - - - + - - - + - - - + - - + - - - t - - - - ;
701..w,-__l._---'----'---'------'-_..,..,,W'
fCDERAL
RESERVE BANK
UNITED STATES
CREDIT
.,,
~ 1500'f-----+---+---•'--~>-fJ'o.--+-f
g
I92 5
-
t
-
I 9 26
I92 7
I 9 28
COMMERCIAL PAPER RATE
RESEFi/E BANK REDISCOUNT
ACCEPTANCE RATF.
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
Wholesale Prices:-The general level of wholesale prices showed little change
during the first three weeks of October, but in the last week of the month
dec·lined considerably. The decline reflected chiefly price reductions of commodities with organized exchanges, which were influenced by the course of
security prices. During the first three weeks of November prires for most of
thc:se commodities reeovered from their lowest levels. Cntain prices, particularly those of petroleum, iron and steel, and coal, showed little change during
the period.
Banlc Credit:-Following the growth of $1,200,000,000 in security loans by
New York city banks during the week ending October 30, when loans to brok<>rs
by out-of-town banks and non-banking lenders were withdrawn in ev<'n larger
volume. there was a liquidation of these loans, accompanying the decline in
brokers' loans during the first three weeks of November. All other loans increased, and there was also a growth in the banks' investments. ResNve
bank credit, after inrreasing; hy $310,000,000 in the last week of October,
declined by about $120,000,000 in the following three weeks. On November
20 discounts for member banks were about $100,000,000 larger than four
weeks earlier, and holdings of United States securities ~·ere $190,000,000
larger, while the banks' portfolio of acceptances declined by $100,000,000.
MONEY RATES
NEW YORK
7
Distribution:-Shipments of freight by rail decreased slightly in October
and the first two weeks in November, on an averap;e daily basis. Department
store sales continued, as in other recent months, to be approximately three
per cent larger than a year ago.
I
I92 9
RATE
Money rates in New York declined rapidly during October and the first
three weeks in November. Open market rates on prime commercial paper
declined from 6¼ per cent on October 22 to 5½-5 3/i per cent on November 20.
During the same period rates on 90-day bankers' acceptances declined from
5½ to 3½ per cent. Rates on call loans were ~ix per cent <luring most of this
period, but declined to five per cent in the third week of November. Rates
on time loans also declined.
The discount rate of the Federal Reserve Bank of New York was lowered
from six to five per cent, effective November 1, and to 4½ per cent, effective
November 15, and the discount rates of the Federal Reserve Banks of Boston
and Chicago were lowered from five to 4½ per cent, effective November 21
and November 23.
@FedFRASER