Federal Reserve Bulletin March 1925 - St. Louis FedFEDERAL RESERVE BULLETIN VOL. 11 MARCH, 1925 No....

FEDERAL RESERVEBULLETIN

MARCH, 1925

ISSUED BY THE

FEDERAL RESERVE BOARDAT WASHINGTON

Gold Exports and the Reserves of Foreign BanksBusiness Conditions in the United StatesThe Bank of France in 1924

WASHINGTON

GOVERNMENT PRINTING OFFICE

1925

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BOARD

Ex officio members:

A. W. MELLON,Secretary of the Treasury, Chairman.

J. W. MCINTOSH,Comptroller of the Currency.

D. R. CRISSINGER, Governor.EDMUND PLATT, Vice Governor.ADOLPH C. MILLER.CHARLES S. HAMLIN.GEORGE R. JAMES.EDWARD H. CUNNINGHAM.

WALTER L. EDDY, Secretary.J. C. NOELL, Assistant Secretary.W. M. IMLAY, Fiscal Agent.J. F. HERSON,

Chieft Division of Examination, and Chief FederalReserve Examiner.

WALTER WYATT, General Counsel.WALTER W. STEWART, Director, Division of Research

and Statistics.E. A. GOLDENWEISER, Assistant Director, Division of

Research and Statistics,E. L. SMEAD, Chief, Division of Bank Operations.

District No.District No.District No.District No.District No.District No.District No.District No.District No.District No.District No.District No.

II

FEDERAL ADVISORY COUNCIL

1 (BOSTON) __ CHAS. A. MORSS.

2 (NEW YORK) PAUL M. WARBURG, President.

3 (PHILADELPHIA) L. L. RUE.

4 (CLEVELAND) GEORGE A. COULTON.

5 (RICHMOND) JOHN M. MILLER, Jr.

6 (ATLANTA) OSCAR WELLS.

7 (CHICAGO) FRANK O. WETMORE.

8 (ST. LOUIS) BRECKINRIDGE JONES.

9 (MINNEAPOLIS) G. H. PRINCE.

10 (KANSAS CITY) E. F. SWINNEY, Vice President

11 (DALLAS) W. M. MCGREGOR.

12 (SAN FRANCISCO) HENRY S. MCKEE.


OFFICERS OF FEDERAL RESERVE BANKS

Federal Reserve Bank of—

BostonNew York..

Philadelphia-ClevelandRichmond.,

Atlanta

Chicago

St. LouisMinneapolis..

Kansas City..Dallas ,

San Francisco.

Chairman

Frederic H. Curtiss.PierreJay

R. L. Austin

D.C.Wills

Wm. W. Hoxton.

Oscar Newton

Wm. A. Heaths-

Governor

W. P. G.Harding..Benj. Strong

Geo. W. Norris__E. R. Fancher...

George J. Seay~_

M. B. Wellborn..

J. B. McDougal..

Deputy governor

W. W. PaddockJ. H. CaseL. F. SailerG. L. HarrisonE. R. Kenzel

Wm. McC. Martin.John R. Mitchell. . .

M. L. McClure.Lynn P. Talley.

John Perrin

D. C.R. A. Young

W. J. BaileyB. A. McKinney..J. U. Calkins..... !

W. Willett.L. H. Hendricks.iA. W. GilbarUJ. W. Jones.1G. E. Chapin.1Ray M. Gidney. *L. R. Rounds.1W. A. Dyer.J. C. Nevin.

Geo. H. Keesee.John S. Walden, jr.1M. W. Bell.

W. C. Bachman.iK. C. Childs.1J. H. Dillard.iD. A. Jones.1O. J. Netterstrom.iClarke Washburne.1

0. M. Attebery J. W. White.W. B Geery Gray Warren.B. V. Moore Frank C. Dunlop.1Harry Yaeger *C. A. Worthington J. W. Helm.R. R. Gilbert R. B. Coleman.Val. J. GrandWm. A. Day I W. N. Ambrose.Ira ClerkL. C. Pontious.-

Wm. H. HuttM. J. FlemingFrank J.Zurlinden..C. A. PepleR. H. BroaddusJ. L. CampbellCreed Taylor. _C. R. McKayJohn H. Blair

Cashier

1 Controller. * Assistant deputy governor.

MANAGING DIRECTORS OF BRANCHES OF FEDERAL RESERVE BANKS


New York:Buffalo branch

Cleveland:Cincinnati branchPittsburgh branch

Richmond:Baltimore branch...

Atlanta:New Orleans branchJacksonville branchBirmingham BranchNashville branch

Chicago:Detroit branch

St. Louis:Louisville branchMemphis branchLittle Rock branch

Managing director

W. W. Schneckenburger.

L. W. Manning.Geo. DeCamp.

A. H. Dudley.

Marcus Walker.Geo. R. DeSaussure.A. E. Walker.J. B. Fort, jr.

W. R. Cation.

W. P. Kincheloe.V. S. Fuqua.A. F. Bailey.


Minneapolis:Helena branch

Kansas Citv:Omaha branchDenver branchOklahoma City branch._

Dallas:El Paso branch.

1 Houston branchSan Francisco:

Los Angeles branchPortland branchSalt Lake City branchSeattle branch..Spokane branch

Managing director

R. E. Towle.

L. H. Earhart.J. E. Olson.C. E. Daniel.

D. P. Reordan.Fred Harris.

C. J. Shepherd.Frederick Greenwood.R. B. Motherwell.C. R. Shaw.W. L. Partner.

SUBSCRIPTION PRICE OF BULLETIN

THE FEDEBAL RESERVE BULLETIN is the board's medium of communicationwith member banks of the Federal reserve system and is the only official organor periodical publication of the board. It contains, in addition to the regularofficial announcements, the national review of business conditions, detailedanalyses of business conditions, research studies, reviews of foreign banking, andcomplete statistics showing the condition of Federal reserve banks and memberbanks. The BULLETIN will be sent to all member banks without charge. Toothers the subscription price, which covers the cost of paper and printing, is $2.Single copies will be sold at 20 cents.

in


TABLE OF CONTENTS

The month: PageReview of the month—Changes in the banking situation 147Business conditions in the United States 151

Special articles:South Africa and the gold standard 172Changes in membership in the Federal reserve system, 1919-24 218Bankers'acceptances, 1923-24 180

Official:Law department—

State laws relating to branch banking- 182State banks admitted to system 187Fiduciary powers granted to national banks 188Charters issued to national banks 188

Business statistics for the United States:Industrial activity 189Commodity movements 192Wholesale and retail trade 193

Foreign banking and business conditions:Continental banks in 1924 195International price comparisons 195Financial statistics for principal foreign countries , 197Foreign trade of principal countries 200Industrial statistics for foreign countries 201Price movements in principal countries—

Federal Reserve Board wholesale price indexes 202Wholesale prices in principal countries 203Retail prices and cost of living in principal countries 204

Banking and financial statistics:Federal reserve banks—

Condition of Federal reserve banks 205Federal reserve note account 209Holdings of earning assets 210Discount and open-market operations of Federal reserve banks 211Gold settlement fund 226Discount rates of Federal reserve banks . 225

Member banks—Condition of reporting member banks in leading cities 212Bankers' balances at reporting member banks in Federal reserve bank cities 213Deposits of all member banks 214All member banks—Abstract of condition reports on December 31,1924 215

Bank debits 224Money rates in principal cities 227Money in circulation 225Gold and silver imports and exports 228Foreign exchange rates and index 229

IV


FEDERAL RESERVE BULLETINVOL. 11 MARCH, 1925 No. 3

Influence ofgold exports.

REVIEW OF THE MONTH

Factors influencing the use of reserve bankcredit in January and February were chiefly

the seasonal return flow of cur-rency from circulation and theexport demand for gold. The

decline in earning assets which usually occursin the early part of the year has lasted ashorter time and has been less marked in 1925than in 1924. A year ago, in addition to theinflow of currency from circulation, there werenet gold imports of $80,000,000 during the firsttwo months, both of which decreased the de-mand for reserve bank credit, while in 1925 netgold exports of about $90,000,000 in Januaryand February tended to offset the influence onthe reserve banks of the seasonal decrease inthe demand for currency, with the consequencethat liquidation came to a close earlier thisyear. In fact, after the middle of Januarythere was a considerable growth in the de-mand for reserve bank credit.

Extent of liquidation at the Federal reservebanks during the month following the peak ofcurrency demand in December and the sub-sequent increase . in reserve bank credit areshown in the table. The decrease of $386,-000,000 in total earning assets between De-cember 24 and January 21 was the outcome ofa reduction of $115,000,000 in holdings ofUnited States securities and of a seasonaldecline of $84,000,000 in acceptances and of$193,000,000 in discounts for member banks.During the five weeks ending February 25the increase in earning assets reflected agrowth in discounts, partly offset by some fur-ther decline in the holdings of securitiesbought in the open market. The growth of

$231,000,000 in the volume of discounts carriedthem to a higher point than at the Decemberpeak, and to a level higher than at any timesince the spring of 1924. This upward turnin discounts, which is in contrast with thedecline during the corresponding period oflast year, reflects chiefly the increased borrow-ing by member banks for the purpose of main-taining their reserve balances at a time whenthe reserve banks were selling United Statessecurities in the open market and when therewas a demand upon member banks for goldfor export. Sales of United States securitiesby the reserve banks reduced their holdingsto $365,000,000 on February 25, comparedwith $538,000,000 two months earlier. Whilethe larger part of the reduction in these hold-ings, as shown in the table, occurred at a timewhen there was a decreasing demand forreserve bank credit as reflected in decreasesin both discounts and acceptances, furthersales of securities by the reserve banks in thelatter part of January and in^February were afactor in increasing borrowings of memberbanks. The largest increase in discounts wasat the Federal Keserve Bank of New York,with the result that at the end of Februaryborrowings by member banks in that dis-trict represented a considerably larger pro-portion of the total for the system than at theopening of the year and were in larger volumethan at any time in the past year and a half.Increased borrowings at the reserve bankswere also occasioned by the export demandfor gold, first felt at member banks whichobtained the gold by drawing upon theirbalances at the reserve banks, and then re-plenished these balances by increasing theirdiscounts.

147


148 FEDERAL RESERVE BULLETIN M A R C H , 1925

EARNING ASSETS OF THE FEDERAL RESERVE BANKS

[In millions of dollars]

Increase (+) ordecrease ( - )

Total earning as-sets

DiscountsAcceptances ._.'__.United States securities.

Dec. 24,1924

1,332

396390538

Jan. 21,1925

945

203306423

Feb. 25,1925

1,130

434317365

Dec. 24,1924-Jan.21, 1925

Jan. 21-Feb. 25

+185

-193 +231+11

-115 -58

The turn in the direction of the gold move-ment, which has recently influenced the rela-

tion of member banks to theFour years of i -i i P,

gold imports. r e S e r V e b a n k s > h a S C O m e a f t e rcontinuous gold imports, which

have been for several years the largest factordecreasing the degree of dependence of mem-ber banks upon the reserve banks. In com-menting upon the use made by member banksof this gold received from abroad and upon itsinfluence upon the domestic credit situation,the Federal Reserve Board in its annual reportfor 1924 says:

In 1924, as in other recent years, the mostimportant single influence affecting the volumeof Federal reserve bank credit in use was thecontinued inflow of gold. While net importsof gold in 1924 were somewhat less than in1923, they represented a continuation of amovement which has lasted for over four years,and since their effect upon the relative positionof Federal reserve banks and member bankshas been cumulative, their influence is clearerwhen considered in perspective. Gold re-ceived from abroad is deposited by memberbanks with the reserve banks, and its immediateeffect is to increase their reserve balances.The use made by member banks of these addi-tions to their reserve balances depends uponthe extent of the currency demand and uponthe indebtedness of member banks at thereserve banks at the time the gold is received.In 1921, when liquidation was under way,balances arising out of the $667,000,000 of netgold imports, as well as the currency returnedFrom domestic circulation, were used to reduceindebtedness at the reserve banks. In 1922,when the volume of member bank borrowingwas at a low level and there was an increaseddemand for currency, the larger part of the

additions to reserve balances due to gold im-ports of $238,000,000 were used to meet thecurrency demand, though a part remained as abasis for the growth in deposit liabilities ofmember banks which occurred during the firsthalf of the year. In 1923 practically the entireamount of net gold imports of $294,000,000was used by member banks in lieu of addi-tional borrowing at the reserve banks to meetdemands for currency, and the earning assetsof the reserve banks remained practically un-changed. In 1924, though the volume ofearning assets of the reserve banks and thevolume of money in circulation fluctuated con-siderably during the year, at the end of theyear they were both at about the same levels asat the beginning, and the $258,000,000 of netgold imports are reflected in a growth of mem-ber bank balances. For the entire four-yearperiod the net gold imports and the net declinein currency in circulation have been reflectedin a decrease of nearly $2,000,000,000 in theearning assets of the Federal reserve banks anda growth of $3,000,000,000 in the loans andinvestments of member banks. This diverg-ence in the movement of Federal reserve bankcredit and member bank credit since 1920 isshown in the following table:

RESERVE BANK AND MEMBER BANK CREDIT, 1920-1924

[Amounts in millions of dollars]

Federal reserve banks:Total earning assets.Member bank re-

serve balancesAll member banks:

Total loans and in-vestments

Deposits on whichreserves are com-puted

Ratio of earning assetsof reserve banks toloans and invest-ments of memberbanks (per cent)

Ratio of reserve bal-ances to deposits onwhich reserves arecomputed (per cent)..

End of—

1920 1921 1922 1923 1924

3,235

1,780

12.5

10.0

1,524

1,753

6.4

10.5

1,326

1,934

5.1

10.2

1,211

25,888 23,644 25,769 26,738 29,027 +3,139 +2,289

I17,616 16,816 18,966 19,505 21,985+4,369 +2,480

4.5

9.7

1,249

2,220

Change

1920-1924 1923-24

- 1 , '

+440

4.3

10.1

+38

+322

The large increase in the loans and invest-ments of member banks and the decline in theearning assets of the reserve banks, shown inthe table, has reduced the ratio of Federalreserve bank credit to member bank creditin use from 12.5 per cent in 1920 to 4.3 percent in 1924. The ability of member banks


MARCH, 1925 FEDERAL RESERVE BULLETIN 149

to increase the volume of their own outstand-ing credit and at the same time to decreasetheir use of reserve bank credit was due princi-pally to the receipt during the four years of$1,500,000,000 of gold from abroad. Whilethe proportion of the amount of reserve bankcredit outstanding to loans and investmentsof member banks is only a fraction of what itwas in 1920, the ratio between reserve balancesmaintained by member banks at the reservebanks to member bank deposit liabilities, asshown by the table, has remained practicallyconstant at about 10 per cent, which repre-sents on the average the minimum required bylaw. This constancy reflects the fact thatmember banks have currently utilized the fullamount of credit that could be supported bythe increase of $440,000,000 in their reservebalances. Thus, notwithstanding the largeaddition to their balances, the member bankswere obliged in the autumn of 1924 to increasetheir borrowings at the reserve banks in orderto meet the seasonal demand for currency.

The unusually large growth in member bankcredit during 1924 and its distribution between

banks in financial centers andFi?W u °i outside are reflected in condi-member bank

credit in 1924. ^ l on reports lor all member,banks for December 31, 1924;

which have recently become available and areshown in detail on pages 215-216. Changes inprincipal items for all member banks for theyear and for the last quarter of 1924 are shownin the following table:

ALL MEMBER BANKS


LoansInvestments

Total loans andinvestments

Demand deposits1Time depositsDue to banksUnited States deposits-

Total deposits

Dec. 31,1923

19,0527,686

26, 738

16, 0878,6513,512

237

28,487

Oct. 10,1924

19,8208,631

28, 451

16,3839,5974,490

302

30,772

Dec. 31,1924

20,1828,845

29,027

17, 7669,8054,548

243

32, 362

Increase (+) or de-crease (—) s ince-

Dee ,1923

+1,130+1,159

+2, 289

+1,679+1,154+1,036

+6+3,875

Oct.,1924

+362+214

+576

+1,383+208+58- 5 9

+1, 590

1 Including certified and cashiers' checks.

Total loans and investments of memberbanks increased by $2,289,000,000, or 9 percent, during 1924, the increase in investments

and in loans being in about the same volume.At the end of 1924 total loans for the firsttime exceeded the peak of 1920, though totalloans and investments have been above thehigh figure for that year since early in 1923.Total deposits increased by $3,875,000,000during the year, of which $1,679,000,000 wasthe increase in demand deposits, and theremaining $2,200,000,000 was about equallydivided between the growth in time depositsand bankers' balances. Comparison of theend of year figures with those for October 10show that during the last quarter of 1924loans and investments of member banks in-creased by $576,000,000, of which more thanone-half represents the increase at banks inthe New York Federal reserve district.

The much larger part of the growth ofmember bank credit at banks in the financialcenters than at banks outside those cities isbrought out in the following table, whichshows changes in the principal items formember banks in reserve and central reservecities and for so-called country banks:

MEMBER BANKS IN RESERVE CITIES AND OUTSIDE


Loans „_Investments

Total loans andinvestments...

Demand depositsTime depositsDue to banksDue from banks

Amount

Banks in re-serve cities

End of1923

11,5274,029

15, 55610,4353,8203,066

919

End of1924

12,7134,931

17, 64411,9994,5523,9991,171

Banks outsidereserve cities

End of1923

7,5253,657

11,1825,6524,830

446905

End of1924

7,4693,914

11,3835,7685,252

5491,168

Increase in1924

Banksin

reservecities

1,186902

2,0881,564

732933252

Banksoutsidereservecities

156257

201116422103263

1 Decrease.

Total loans and investments of memberbanks in the larger cities increased by about 13per cent, while at the banks outside of thefinancial centers they increased by less than 2per cent. Compared with a growth of morethan $1,000,000,000 in loans at banks in reservecities, country banks show a slight decrease inloans for the year. Investments increased in


150 FEDERAL RESERVE BULLETIN MARCH, 1925

both classes of banks, but the increase in thelarger cities was much greater. The absenceof an active demand for credit for commercialpurposes during 1924 resulted in a flow of fundsto the money centers reflected in a growth ofbankers7 balances, which furnished a consid-erable part of the funds used by city banks inincreasing their loans and investments.

Since the beginning of this year bankingdevelopments, as shown by the weekly reports

of member banks in leadingRecent changes c j t i e s ? j n c o n t r a s t with the rapida n k i n g SUUa i n c r e a s e i n l o a n s a n d i n Y e s t "

ments and in deposits during

the greater part of 1924, have been character-ized by some decline in total loans and invest-ments and a considerable reduction in demanddeposits. In 1924 the continuous inflow of goldboth directly increased the deposits of memberbanks and provided them with reserve balancesto support a growth in their credit, and therecent outflow of gold has been a factor inreducing deposits and in diminishing the bal-ances of member banks at the reserve banks.In New York City, where the growth of mem-ber bank credit in 1924 was largest, there hasbeen a considerable decline in investments,which were at their peak in the middle ofNovember, and since January also a decreasein loans. Both loans and investments forreporting member banks outside of New YorkCity have continued to increase, though at aslower rate than in 1924, and total loans forall reporting member banks at the middle ofFebruary were larger than at any time in recentyears. During the first two weeks of Februarythere was an increase in commercial loans,which have continued near the high levelreached during the autumn months of 1924.More recently there has also been some increasein the demand for currency. Since the latterpart of January there has been a considerablegrowth in borrowing by member banks at thereserve banks, particularly at the FederalReserve Bank of New York.

In the money market, following the briefperiod of decline after the turn of the year,

these recent developments were reflected in anincrease of rates on commercial paper to a levelhigher than at any time since the middle of lastyear. Rates on bankers' acceptances, after analmost continuous rise for more than sixmonths, were in February more than 1 per centabove the rates prevailing during the summermonths of 1924. On February 27 the discountrate at the Federal Reserve Bank of New York,which had been at 3 per cent since August 8,1924, was advanced to 3*^ per cent, the rateprevailing at the Boston, Philadelphia, Cleve-land, and San Francisco reserve banks.

NOTES

Annual report of Federal Reserve Board.The text of the annual report of the Federal

Reserve Board, covering operations for thecalendar year 1924, has been submitted toCongress and is now available. The fullreport, including detailed statistical tables, isin preparation.Meeting of Federal Advisory Council.

The Federal Advisory Council held its firstquarterly meeting in 1925 on February 16.Paul M. Warburg was reelected president andE. F. Swinney, vice president. In addition tothese officers the following members wereelected to constitute the executive committee:C. A. Morss, vice chairman, L. L. Rue, J. M.Miller, jr., and F. O. Wetmore.Index-Digest of the Federal Reserve Act.

The third edition of the Index-Digest of theFederal Reserve Act and amendments hasrecently been issued. A limited number ofcopies is available for distribution at $2 percopy. Persons wishing to obtain copies shouldaddress the secretary of the Federal ReserveBoard.Report of Gold and Silver Commission.

The Commission of Gold and Silver Inquiryof the United States Senate has issued a reporton European currency and finance by JohnParke Young. This volume, in addition to adiscussion of the relation of the United Statesto currency problems of Europe and a detailedaccount of currency and financial conditionsin principal European countries, contains aseries of papers on currency and finance byleading American and European economists.


MABCH, 1925 FEDERAL BESEKVE BULLETIN 151

BUSINESS CONDITIONS IN THE UNITED STATESFurther growth in production during January carried the output of basic commodities to

the highest point reached since the spring of 1923. Employment at industrial establishmentsincreased slightly, but remained below the level of a year ago. Prices of farm products con-tinued to advance, and there were smaller increases in the wholesale prices of most of the othergroups of commodities.

Production.—Production in basic industries, after a rapid increase in recent months,advanced 9 per cent in January and was 35 per cent above the low point of last summer. Themost important factor in the increase in the level of production since August has been the greateractivity in the iron and steel industry, but in January the output of lumber, minerals, foodproducts, and paper, and the mill consumption of cotton, also showed considerable increases.The woolen industry was somewhat less active in January, and output of automobiles, thoughlarger than in December, was considerably smaller than a year ago. Further increases duringthe month in employment in the metal, textile, and leather industries were largely offset byseasonal declines in the number employed in the building materials and food products industries.Building activity, as measured by contracts awarded, though less in January than during theclosing months of 1924, was near the high level of a year ago.

Trade.—Railroad shipments were in record volume for this time of year, and loadings of mer-chandise and miscellaneous products were particularly heavy. Wholesale trade in January,however, was slightly smaller than in December. Sales of groceries, shoes, and hardware werein smaller volume, while sales of .dry goods and drugs increased. Department-store sales inmost districts were somewhat smaller than a year ago, but sales of mail-order houses wereconsiderably larger.

Prices.—Wholesale prices, as measured by the index of the Bureau of Labor Statistics,rose 2 per cent during January to the highest level in four years. The increase of 10 per centin the index since last June represents an advance of 19 per cent in prices of agricultural com-modities and 3 per cent in other commodities. In the first half of February prices of grains,wool, coal, and lead declined, while petroleum and gasoline prices advanced sharply, and cottonsilk, and rubber showed smaller increases.

Bank credit.—Loans and investments of member banks in leading cities, following the rapidgrowth during the last half of 1924, declined by about $100,000,000 between the middle ofJanuary and the middle of February. This decrease represents a reduction in the holdings ofinvestments, chiefly at banks in New York, partly offset by an increase in loans. Loans onstocks and bonds increased, though less rapidly than in the latter part of 1924, while loans forcommercial purposes declined slightly from the high level reached in the middle of January.

ibO

50

0

ft/

AT

PRODUCTION INBASIC- INDUSTRIES

\ /

f

PER CENT PER CENT

150 200

100

50

1322 1323 1925Index of 22 basic commodities adjusted for seasonal variations. (1919=

100.) Latest figure, January, 127

33405—25 2

150

100

50

WHOLES/\LE PRICES

PER CENT200

150

100

5 0

1922 1923 1924- 1925

Index of United States Bureau of Labor Statistics. (1913=100, baseadopted by bureau.) Latest figure, January, 160



BILLIONS OF DOLLARS

2BILLIONS OF DOLLARS

1922 1923 192A- 1925

Weekly figures for 12 Federal reserve banks. Latest figures forFebruary 18

BILLIONS OF DOLLARS BILLIONS OF DOLLARS10

1922 1923 1924 1925Weekly figures for member banks in 101 eading cities. Latest figures

February 11

Net demand deposits, owing largely to decreases at New York City banks, declined sharply fromthe high point reached in the middle of January.

At the Federal reserve banks the seasoned liquidation resulting from the return flow ofcurrency from circulation came to a close by January 21, and during the following four weeksthere was an increase in total earning assets. This increase reflected largely the demand forgold for export, which led member banks to increase their discounts at the reserve banks.Reserve bank holdings of United States securities declined further, while acceptances showedrelatively little change for the period.

Money rates, after remaining comparatively steady during most of January, showed afirmer tendency during the early part of February, when rates for prime commercial paperadvanced to 3% per cent.

BUSINESS INDEXES OF THE FEDERALJRESERVE BOARD

[Monthly average 1919-100]

Produc-tion inbasic

indus-tries *

Factoryemploy-

ment

Buildingcontractsawarded l

Railroadcar

loadings *

Whole-sale

trade

Department store

Unad-justed

Ad-justed

Department storestocks»

Unad-justed

Ad-justed

Bankdebits

outside oiNewYork

City*

OctoberNovember..December..

January----February...MarchAprilMayJuneJulyAugustSeptember-OctoberNovember..December.,

January -

1923

1924

1925

118116110

120120116114103949494

103109107117

127

10110099

151167172

170163164150129125121133150166196180

168

118120113

118125115121117103111111117120116124

123 78

148142202

1091021151331271209193119141141211

109

130126126

125127115130123120122119131124126132

124

146149123

115127138140135127122126137147148124

119

131133132

131135137136135133130126128132131133

134

105105105

105110109112109103108108107112107112

120

i The indexes of production in basic industries, building contracts, car loadings, and bank debits are adjusted to allow for seasonal variations.The indexes of department store sales and stocks are shown both with and without seasonal adjustments.



BANK CREDIT

On February 18 the loans and investmentsof reporting member banks in leading citieswere about the same in volume as at thebeginning of the year, a decline in the invest-ment holdings of these banks, chiefly in theNew York district, being slightly in excess ofthe growth in their loans. During the firstseven weeks of the year loans secured by stocksand bonds continued to increase, and com-mercial loans at the end of this period wereslightly above the level of the first of the year.Demand deposits declined sharply from thehigh figure reached at the beginning of theyear, while time deposits continued-to increase.The following table shows the principal re-sources and liabilities of member banks inleading cities for December 31, 1924, and foreach week between January 14 and February18, as well as changes for the seven weeks andfor the year ending February 18.

LOANS, INVESTMENTS, AND DEPOSITS OF MEMBERBANKS IN LEADING CITIES


Date

1924—Dec. 31 _.1925—Jan. 14

Jan. 21Jan. 28Feb. 4Feb. 11Feb. 18

Increase (+) or de-crease (—):

Dec. 31-Feb. 18.Feb. 20, 1924-

Feb. 18

Loans and investments

Total

18,60018,68018,63518,53918,56718,54718,575

-25

+2,154

Loanssecured

bystocks

andbonds

4,8624,8784,8944,8884,9304,9334,937

+75

+859

Allotherloans,largely-com-

mercial

8,206'8,2618,1938,1638,1848,1828,234

+28

+385

Invest-ments

5,5315,5575,5485,4885,4535,4325,404

-127

+910

Deposits

Net de-mand

13,25413,35513,14313,01413,04013,09312,995

-259

+1, 760

Time

4,8494,8534,8694,8764,9004,9254,936

+87

+760

The total volume of reserve bank credit inuse, after a marked decline from the highpoint reached in December, 1924, increasedduring the latter part of January and inFebruary, due to growth in the volume ofthe reserve banks' discounts for member bankswhich more than exceeded declines in theholdings of United States Government securi-ties. Acceptances, after declining in the open-ing weeks of the year, remained practicallyconstant between January 21 and February25. The principal resources and liabilitiesof the Federal reserve banks for the periodbetween January 21 and February 25, 1925,

and changes for this period and since February,1924, are shown in the following table:PRINCIPAL RESOURCES AND LIABILITIES OF FEDERAL

RESERVE BANKS[In millions of dollars]

Date

1925Jan. 21Jan. 28-__Feb. 4Feb. 11Feb. 18 _.Feb. 25-___Increase (+) or decrease

(—) for six weeks endingFeb. 25

Year ending Feb. 25

Earning assets

945989

1,0321,0601,0461,130

+185+179

203274322332342434

+231-98

306308308325312317

+11+54

423394389390378365

-58+209

3,0833,0833,0653,0413,0453,030

-53-200

2,2162,2652,2682,2422,2572,270

+54+284

•Si

1,6991,6841,6901,7141,6991,729

+30-293

* Including foreign loans on gold and all other earning assets,

CONDITION OF ALL MEMBER BANKS

During the latter months of 1924 loans ofmember banks continued the growth whichbecame pronounced in June, and on Decem-ber 31, as indicated by the quarterly reports ofcondition recently become available and pub-lished on page 215 of this issue, the total for allmember banks was $29,026,000,000, an in-crease of $576,000,000 since October 10 and of$2,288,000,000 since the close of 1923. Totaldeposits (including demand and time deposits,balances due to banks, and United StatesGovernment deposits) were $32,361,000,000 onDecember 31, 1924, or $3,875,000,000 in excessof the total on the same date in 1923.

The growth in total loans and investments dur-ing the year, the greater portion of which oc-curred in the last six montns, represented aboutequal increases in loans and in investments.Total loans of all member banks were $20,-181,000,000 at the close of 1924, $361,000,000above the amount on October 10 and $917,-000,000 above June 30. This growth wasentirely in the loans of member banks in reserveand central reserve cities, the loans of countrybanks showing, in fact, a slight decline duringthe period—more particularly between June 30and October 10. Investment holdings ofmember banks, at $8,845,000,000 on December31, were $848,000,000 above the total for June30; the increase for the last three months of theyear was about one-fourth of that amount.The largest additions to the banks' holdingsconsisted of securities other than UnitedStates Government securities. The growth



in the total investments of member banksduring the last six months of 1924 occurredboth in reserve cities and outside; for the lastquarter of the year, however, investments ofmember banks in New York City showed somedecline. Demand deposits of member banks,continuing the increase which began in thespring months, rose rapidly during the closingmonths of the year to the highest point onrecord. Bank balances held with city corre-spondents, after a rapid growth prior to Octo-ber 10, increased only slightly during the lastquarter of the year. Time deposits continuedto grow throughout the period.

In the following table are shown the amountsof the principal resources and liabilities of allmember banks, by class of banks, on December31, 1924, and the extent of changes since June30.

PRINCIPAL RESOURCES AND LIABILITIES OF ALLMEMBER BANKS DECEMBER 31, 1924


Total loans and investments.Total loans 1Total investmentsUnited States securities.Other bonds and stocks..

Total depositsDemand deposits 2Due to banksTime depositsUnited States deposits-

Total loans and investmentsTotal loans 1Total investmentsUnited States securities.Other bonds and stocks.

Total depositsDemand deposits 2Due to banksTime depositsUnited States deposits..

Dec. 31, 1924

Allmem-

berbanks

29,02620,1818,8453,9024,943

32, 36217,7674,5489,804

242

Centralreserve

citybanks

7,6605,5462,1141,154

9609,4656,3541,9471,117

46

Reservecity

banks

9,9837,1662,8171,3531,464

11, 2785,6452,0523,435

146

Coun-try

banks

11,3837,4693,9141,3952,51911,6195,768549

5,25250

Changes since June 30,1924

Allmem-

berbanks

+1,765+917+848+295+553

+2,832+1,474

+694+601+63

Centralreserve

citybanks

Reservecity

banks

+696+508+188+66

+122+880+645+37

+188+10

+848+453+395+223+172

+1,176+406+500+234+36

Coun-try

banks

+221-44

+265+6

+259+776+423+157+179+17

1 Including rediscounts and overdrafts.* Including certified and cashiers' checks outstanding.

MONEY RATES

Somewhat firmer conditions in the NewYork money market, accompanying exportsof gold and the flow of funds to the interior,were evidenced by advances in money rates

in February. Commercial paper was in lessactive demand, and by the third week in themonth the rate on 4-6 months maturities hadincreased from 3% per cent to Z% per cent,the rate prevailing at the end of 1924.Moderately increased sales of bankers7 ac-ceptances to the Federal reserve bank earlyin February and an advance in the reservebank's minimum rate on short maturitieswas followed by a general rise in open-marketbill rates. Despite these advancing moneyrates, the prices of Government securitiesand the yields on both short and long termissues remained practically constant through-out the month. The renewal rate on callloans averaged higher in February than inJanuary. The table below shows the ratesprevailing in the New York market duringthe past three months:

MONEY RATES IN NEW YORK

[Per cent]

Primecom-

mercialpaper 4-6months

December, 1924January, 1925Average for week ending:

Jan. 31, 1925Feb. 7,1925Feb. 14, 1925Feb. 21, 1925Feb. 28,1925

:

k

Primebankers1accept-ance,

90 days

Yield oncertifi-cates of

in-debted-

nessmatur-

ing June15, 1925

2.572.61

2.572.612.612.592.61

Averageyield on4JiJ ipcent

Libertybonds

4.054.04

4.014.014.024.024.03

Re-newalrate on

callloans

3.493.32

3.503.303.633.504.06

In the L/ondoh market rates were verystable during January and early Februaryat levels lower than those prevailing at theend of the vear, but higher than the averagerates of October and November. Three-months bank bills were quoted at 3% percent the first week in February and Treasurybills were tendered that week at an averagerate of 3.72 per cent.

ACCEPTANCE MARKET

During the first half of the period fromJanuary 22 to February 18 there was littlechange in the condition of the New Yorkacceptance market, although some increasein the supply of bills was reported fromBoston, with a consequent increase in theportfolios of dealers. There were moderateofferings to reserve banks. On February 6the New York Federal Reserve Bank's buyingrates on 30 and 60 day maturities were raised



to 3 per cent, and dealers subsequently ad-vanced their rates y$ per cent on all maturitiesup to 90 days. There was an increase in theforeign demand for prime member bankbills of 30 and 60 day maturities, and witheasier money conditions a more active de-mand on the part of both local and out-of-town banks, including savings banks, de-veloped, so that toward the end of the periodNew York dealers found the supply nardlysufficient to fill orders. Rates in New Yorkon February 18 ranged from 3J^ per centbid and 3 per cent offered on 30-day bills to3% bid and 3J^ offered on 5 and 6 monthsmaturities.

CAPITAL ISSUES

According to the compilation of the Com-mercial and Financial Chronicle, $396,000,000of domestic securities were issued in the UnitedStates in December, 1924. This exceeds theamount of the November issues but is con-siderably less than the large volume of flota-tions in October. Sixty-one per cent of thedomestic issues were corporate issues, and 23per cent of these were for refunding purposes,industrial corporations issued the largestproportion of securities, with public utilityofferings next in size, and railroad issues ofsmall importance in December. The newdomestic flotations during the month wereslightly less than during December, 1923, butthe total for the year 1924 was $500,000,000above that for the year 1923, and larger thanfor any year previously recorded. The follow-ing table shows the domestic securities issuedin December, 1924, and during the year 1924,as compared with the issues of December, 1923,and the year 1923, classified as to type ofsecurity:

DOMESTIC CAPITAL ISSUES


Total corporate __Long-term

bonds andnotes

Short-termbonds andnotes

StocksFarm loan issues.Municipal

Total

December, December, Y e a r > 1924 Year, 1923

New

248.3

151.0

11.286.12.3

86.3

336.9

Re-fund-ing

55.9

19.72.4

3.459.3

New

261.-6

160.6

8.392.7

2.1111.9375.6

Re-fund-ing

.31.2

1.81,

New

14.8 3,027.8

13.4 1,923.8

276.1828.0179.1

, 353.716.6 4,560.6

Re-fund-ing

59.636.5

New

491.8 2,648.8

395.7 1,846.3

143.3659.2337.

17.41,043.1509.2 4,029.4

Re-fund-ing

560.3

416.3

37.276.8

55.020.0

635.3

The total of capital flotations in the UnitedStates during 1924 was greatly augmented bythe issue here of foreign securities. A com-pilation of these issues made by the New YorkFederal Reserve Bank gives a volume of$1,264,512,000 for the year, including refund-ing issues, as compared with $431,657,000 for1923, so that the combination of these figureswith the Chronicle's statistics of domesticissues gives for 1924 a total of $6,334,000,000,which exceeds that for 1923 by more than$1,000,000,000. The foreign issues in Decem-ber amounted to $179,716,000, as comparedwith $130,600,000 in November and $49,375,-000 in December, 1923. December ranked asthe fourth month of the year 1924 in the sizeof foreign flotations, being exceeded only byFebruary, when the $150,000,000 Japaneseloan was put out, by September, when un-usually large Canadian issues were floatedhere, and by October, when $110,000,000of the international loan to Germany wasissued in New York. The more notableforeign flotations in December were $30,000,-000 of bonds issued by the Argentine Gov-ernment, $50,000,000 by the Kingdom ofBelgium, and $40,000,000 by the AndesCopper Mining Co. in Chile. Foreign issuesin January, 1925, were in substantial volume,but much smaller than those of the precedingsix months.

SECURITY PRICES

The prices of representative stocks continuedearly in February the rapid advance whichbegan in November, declined somewhat duringthe third week of the month, but in the nextweek recovered to approximately their formerlevel. These movements were shared in gen-eral by both industrial and railroad stocks,but certain groups, including coal stocks andtextile stocks, were exceptions to the generaladvance in January and early February. Therise in prices was accompanied by activity inthe market, and the daily volume of sales hasaveraged over 1,000,000 shares each week sinceNovember 1. Bond prices showed little changein January, but advanced somewhat in Feb-ruary. The following table gives indexes ofstock prices computed by the Standard Sta-tistics Co. of New York, the average prices of40 bonds computed by Dow, Jones & Co., andthe average number of shares of stock solddailv for the last four months and for eachweek of February.



INDEX NUMBER OF SECUKITY PRICES

Average for—November, 1924December, 1924January, 1925

Average for week end-ing—

Feb. 2, 1925,Feb. 9, 1925Feb. 16, 1925Feb. 24,1925

Price indexes of— »

202indus-trial

stocks

113.4119.7125.8

128.9129.4124.6127.1

31 rail-road

stocks

106.3111.3112.6

113.0113.7111.1113.6

233stocks

111.3117.2122.0

124.2124.8120.6123.1

Averageprice of

of 40bonds8

91.0190.6690.91

91.3691.6191.61

Averagenumberof sharesof stock

solddaily(thou-sands) 3

2,0801,7881,774

1,6841,8471,5701,833

JFor the industrial stocks, the average of 1917-1921 prices equals 100;for the rails the average of the high and low prices made in the 10 years1913-1922 equals 100. The indexes are weighted by the number of sharesof each stock outstanding.

1 Arithmetic average of daily peak and low prices as published in WallStreet Journal.

3 Average for 5 days ending on preceding Friday.

AGRICULTURAL CREDIT BANKS

Intermediate credit banks closed direct loansamounting to $4,206,931 during January, 1925,as compared with $1,447,457 during December,1924, and rediscounts of $2,688,045, as com-pared with $3,813,680 in December. TheSpringfield, Baltimore, and Columbia bankseach made loans of $1,000,000 or more, while6|of the 12 banks made no direct loans inJanuary. All except the Louisville bank re-discounted a certain amount of agriculturalpaper, but the bulk of the total rediscountingwas done by the middle western banks. Thefollowing table shows the rediscounts outstand-ing on February 14, 1925, classified by borrow-ing organizations, and the direct loans classifiedby commodities on which the loans were based:

DIRECT LOANS

Cotton $11, 913, 500Tobacco 21, 650, 121Raisins 4, 000, 000Wheat-PrunesCanned fruit and vegetr1 les_PeanutsRiceAll other

1, 724, 3661, 222, 750

427, 146200, 462349, 774148, 647

Total 41, 636, 766REDISCOUNTS

Agricultural credit corporations $9, 643, 878National banks 18, 177State banks.- 744, 740Livestock loan companies 8, 640, 216Savings banks and trust companies 151, 644Cooperative associations

Total 19, 198, 655

Federal land banks increased their mortgageloans during January by $7, 762, 131 and is-

sued $30,000,000 of 10-30 yea* 4K per centbonds, which brought the total of Federal landbank bonds outstanding to $946,819,307 onJanuary 31, as compared with $914,763,416 onDecember 31. The net mortgage loans ofjoint-stock land banks amounted to $435,067,-400 on January 31.

AGRICULTURE

In most sections of the country farm opera-tions were retarded in January on account ofthe generally unsatisfactory weather for out-door work. Throughout the Western Stateslow temperatures were accompanied by heavysnows, and the growing grain crops, livestock,and ranges were injured to some extent, butsome of the losses were offset by the excep-tionally favorable weather during the earlyweeks in February. Some areas in the KansasCity and Dallas Federal reserve districts arestill suffering from a lack of moisture, whichis causing a delay in winter plowings and earlyseedings. In the Richmond and Atlanta dis-tricts rainfall in January was excessive which,in addition to delaying farm work, causedfrequent floods and heavy losses, particularlyin the latter district.

PER CENT

250

\ V

EX PORTS 0( JU

F AGR1CLY. 1909 -

Y

ULTURALJUNE,1914- = 1

rj

PRODUC00 )

\

\

,TS

1

PER CENT

250

1921 -22 1922-23 1923-'24

While marketing of the 1924 crops wasseasonally smaller m January than in Decem-ber, it continued in larger volume than in thecorresponding month last season. Tobaccoand vegetables were distributed in larger vol-ume than in December, vegetable shipmentsbeing about 50 per cent greater, the largestincrease over December in the last six years.Exports of agricultural commodities, asmeasured by the Department of Agricul-ture's index and shown in the chart, wereseasonally smaller than in December. Allgroups of products showed reduction exceptmeats. As compared with last year, total ex-ports were 26 per cent larger, due principally


MARCH, 1925 FEDERAL. RESERVE BULLETIN 157

to a continuation of heavy exports of cottonand wheat.^1 Agricultural prices advanced further duringthe month and reached the highest level sinceNovember, 1920. Practically all groups, ascontained in the Department of Agriculture'sindex, except dairy and poultry products anda few miscellaneous items, were higher. Inview of this rapid rise, the index of agriculturalprices at wholesale markets was 161 as com-pared with 165 for nonagricultural commodi-ties, and the margin between agricultural andnonagricultural prices was narrower than atany time since June, 1920.

Grains.The early weeks of January were accom-

panied by generally cold and unfavorableweather for the winter wheat crop; and therewas some damage by alternate freezing andthawing, although the extent of such damageis yet uncertain. In February the weatherwas milder, and considerable improvement wasnoted in all sections except in some areas of theKansas City and Dallas Federal reserve dis-tricts, where there was a lack of moisture.Seeding of oats in the Southern States madegood progress, and by the middle of Februaryplanting was being done as far north as Okla-homa. Winter seeded oats in the Richmondand Atlanta districts continued in good condi-tion and the outlook is much more satisfactorythan last year, when the crop was practicallykilled late in the winter.

Marketing of grains in January was season-ally smaller than in December, and while itwas heavier than in January last year it wasin considerably lighter volume than in Jan-uary, 1921, 1922, or 1923. Receipts of wheatat principal markets declined from 32,500,000bushels in December to 24,166,000 bushels inJanuary, as compared with 16,861,000 bushelsin January last year. Notwithstanding thereduction in the size of the corn crop, market-ing in January was 17 per cent larger thanlast year, but this increase may be attributedin part to the considerably smaller marketingsin rTovember and December, which were duein a measure to the delay of the new crop inreaching the market. Oats were sold in thelargest January volume in the past seven years.Trading in grain futures in January, as re-flected in reports from the Chicago Board ofTrade, was the largest for the period for whichrecords are available- Prices advanced rap-idly during the month and reached a peak near

the end of the period which, for most of thegrains, was the highest since 1920. Early inFebruary there were considerable declines inprices, amounting to 27 cents for winter wheatand about 22 cents for rye. Exports of grainsand grain products fell off in January from thehigh levels reached in the autumn months,but were in about the same volume as in Jan-uary last year.

Cotton.A further increase in the consumption of raw

cotton by American mills, continuation oflarge foreign demand, heavy exports, andgenerally unsatisfactory weather for farmoperations were the most significant factorsaffecting the cotton market in January.Since last July the consumption of cotton bydomestic mills has increased each month withthe exception of a slight hesitation in Novem-ber, and in January about 590,000 baleswere consumed, the largest monthly vol-ume since May, 1923, when 621,000 baleswere consumed. Exports were larger in Jan-uary than in December and were the largestfor that month since 1915. In connectionwith the exceptionally large volume of exportsit is significant to point out that for the sixmonths of the cotton marketing season endingwith January, 5,420,000 bales were exported asagainst a total of 5,656,000 bales for theentire season ending last July. The movementof cotton from the plantations and small townsof the South to the larger markets is continuingat a rapid rate, and for the season to the middleof February approximately 12,427,000 baleshad reached the markets, about 1,000,000 balesless than the total yield. Notwithstanding thelarge demand for the crop in this country aswefl as abroad, reports indicate that mills havebeen producing largely to fill current orders,and spinners in Great Britain have recentlycurtailed production schedules.

Weather conditions for the season to datehave been decidedly unfavorable for the newcrop. In the Richmond and Atlanta Federalreserve districts excessive rains in Januarydelayed farm operations and in the Dallasdistrict a continuation of the drought causedthe ground to dry out to such an extent thatplowing has been retarded and preparationsdelayed.

With a continuation of the demand for theold crop and unfavorable weather in most ofthe growing areas the price of cotton strength-ened late in January and early in February.



For the week ending February 13 the price of jmiddling cotton at New Orleans was 24.5cents a pound, as compared with 23.8 cents apound a month earlier.

Tobacco.During the late autumn months the market-

ing of tobacco was delayed, but in January in-creased activity was noted in almost all pro-ducing areas, and the aggregate volume of thecrop marketed was larger than in the precedingmonth and exceeded sales in January last year.In the Kichmond district a slightly larger per-centage of the total crop was sold prior toFebruary 1 than for the same period in 1924.Prices in January were slightly higher than lastyear, the greatest increases being in the pricespaid for the North Carolina crop. Weatherconditions were generally favorable for hand-ling the crop in the St. Louis districts, and deliv-eries and sales were in large volume. Receiptsand offerings of the 1924 crop of both burleydark varieties were greater than last year andprices were well sustained. Late in January,however, and early in February the quality ofthe new burley crop was poorer than earlier inthe season and prices for such grades were lower.Heavy sales in January were reported by theBurley Tobacco Growers' Cooperative Associ-ation, which amounted to approximately 110,-000,000 pounds. Since December 1 sales bythe association have aggregated 172,000,000pounds, and, in view of this decided improve-ment in demand, sentiment in the growing areashas changed and the proposed "cut-out" move-ment is less serious than early last autumn.Stocks of all tobacco held by manufacturersand dealers were smaller at the beginning ofJanuary than at the beginning of October, butthey were still larger than last year. Thetable shows the stocks of the different types atthe beginning of 1924 and 1925:

STOCKS OF TOBACCO

[In pounds]

Types

Chewing, smoking, snuff, and export...CigarImported

Total

Jan. 1,1924

1,219,694,350358,356,22273,979,605

1,651,930,177

Jan. 1,1925

1,266,082,988371,043,24576,543,662

1,713,669,895

Production of cigarettes and manufacturedtobacco products in January exceeded the vol-ume in December, but it was smaller thanthat of January last year. The output of cigars

continued to decline in January for the thirdconsecutive month and was smaller than inJanuary of last year.

Fruits and Vegetables.

With the exception of the heavy rains in thesoutheastern States early in January, whichdelayed plantings and damaged growing truckcrops, weather conditions were generally favor-able for the winter fruit and vegetable crops inthe southern sections of the United States.Shipments of potatoes, grapefruit, and lemonsincreased sharply in January and were in largervolume than in the same month last year.Marketing of oranges and apples was seasonallysmaller than in December, but shipments oforanges were in the largest January volume onrecord. Throughout the autumn monthsapples were marketed in smaller volume thanin the corresponding months in 1923, and acontinuation of lighter shipments was evidentin January. The crop in 1924 was smallerthan in 1923, and, in view of the smaller avail-able supplies, the price of apples at the NewYork market on February 20 was 25 per centhigher than a year ago. Cold-storage holdingsof apples were 35 per cent lighter on February 1than last year and 16 per cent lighter than onthe same date in 1923. After advancing ta$3.75 a bushel at New York for the week end-ing February 13 from the low level of $3 abushel at the first of the month, the price ofpotatoes declined to $3.25 a bushel on Feb-ruary 20. A year earlier the price was $4.35a bushel.

Livestock.

During 1924 the most significant develop-ments in the livestock industry were reductionsin the number of hogs and beef cattle andincreases in the number of milk cows andsheep. The total number of hogs on farmsand ranges on January 1, 1925, was 18 per centsmaller than at the beginning of 1924 and thenumber of cattle was 5 per cent smaller. Ashort corn crop, accompanied by high prices,made hog raising less profitable, and in orderto make losses as light as possible producersmarketed their stock rapidly in the closingmonths of the year. Continuation' of lowprices for beef cattle, the drought in a consid-erable part of the range territories, and theshort corn crop resulted in heavy marketing ofrange cattle, while the relatively higher pricesfor dairy products, lambs, and wool resulted ina further increase in the number of milk cows-



and sheep. Since 1922 the dairy industry hasbeen expanding rapidly, and the total numberof milk cows in the country is the largest onrecord.

In January ranges, pastures, and livestocksuffered from the continuous cold weather andmuch feeding was necessary; but in Februarythe weather was milder throughout the westerngrazing districts and many of the snow-coveredranges were opened, and the stock showed con-siderable improvement, particularly in thenorthwestern grazing districts, where thedrought was not serious. In Texas and othersections of the Southwest the drought has con-tinued, and the condition of the ranges isconsiderably lower than last year.

Marketing of all livestock was smaller inJanuary than in December, and all animalswere sold in fewer numbers than in Januarylast year. After reaching the unprecedentedlevel of 6,604,000 head in December, the num-ber of hogs marketed declined to 6,104,000 headin January, which, with the exception of Jan-uary, 1924, was the largest number on recordfor that month. The number of cattle andcalves that reached the market in January was10 per cent smaller than in December, but onlyslightly below that of last year. Sheep, on theother hand, were marketed in 14 per centsmaller volume than in January, 1924.

Dairy products.A sharp increase in the shipments of butter

to principal markets in January and a slowingdown in the rate of movement out of storageresulted in a much smaller reduction in aggre-gate stocks in January than a year ago. Atthe beginning of February stocks of butterwere the largest on record for that date, andwhile they were approximately 200 per centlarger than on the same date in 1923 and 1924,they were not exceptionally heavy when com-pared with some of the earlier years, as isshown in the table:

STOCKS OF BUTTER ON FEBRUARY 1

Pounds.1919 36, 777, 0001920 38,359,0001921 41,486,0001922 35,047,0001923 16, 122, 0001924 15, 243, 0001925 45, 812, 000

During the months of February, March, andApril stocks of butter are rapidly reduced anda low point is reached by the beginning ofMay. Average stocks at the principal whole-

33405—25 3

sale markets on May 1 for the past five yearswere about 6,300,000 pounds, and averageholdings on February 1 for the same periodwere 29,250,000 pounds, the average reductionbeing about 78 per cent. With stocks amount-ing to 45,812,000 pounds on February 1 thisyear, a reduction of about 86 per cent will benecessary in the three months February,March, and April to bring holdings to the aver-age level for the past five years. In view ofthe large stocks and a continuation of heavyproduction there was a considerable decline inprices in January, which reached a low pointof 373^ cents a pound for 92-score butter atNew York for the week ending January 23,approximately 73^ cents a pound below thehigh level reached in December. Late inJanuary, however, and early in February themarket was stronger, and for the week endingFebruary 20 the quotation was 41 cents apound.

Contrary to the situation in the butterindustry, stocks of other dairy products arenot excessive, and condensed milk is in a morefavorable position than a year earlier. Pro-duction and stocks of cheese are slightly largerthan in 1924 and the prices at several of thewholesale markets are somewhat lower, butthe change from last year is much less pro-nounced than in the case of butter. In viewof the relatively better position of the cheeseand condensed-milk industries, there is a tend-ency among some of the butter manufacturersin Wisconsin to increase the output of cheeseand condensed milk and to reduce the produc-tion of butter.

MININGCoal and coke.

Recessions in both production and pricescharacterized the market for bituminous coalduring the latter half of January and the firsthalf of February. The Coal Age index of spotprices for bituminous coal, after touching$2.12 on January 12, declined weekly to $2.03on February 9 and stood at $2.04 on February16. Daily average production per workingday declined during the same period from2,098,000 tons for the week ending January10 to 1,624,000 tons for that ending February14. This recession, which was in contrast tothe movement during the preceding four weeks,carried mid-February production below andprices to about the same levels as those at themiddle of December. Despite the lower rateof output during the latter half of the month,January production of bituminous totaled



51,914,000 tons, a figure that has been exceededin only two months since 1920. Little changecharacterized the market for anthracite duringthe period. January production of 7,400,000tons was slightly in excess of December butwell below January of last year.

Production of by-product coke during Jan-uary reached 3,406,000 tons, a new maximum,while output of beehive at 1,170,000 tons wasthe largest since March, 1924. Productionof beehive for the week ending February 14was 264,000 tons, as against 276,000 tons theprevious week, which was the highest weeklyfigure attained on the present movement.

Petroleum,Improvement in the oil industry, which

began late in the autumn, continued in Jan-uary and February. Although the rapidincrease in the output of crude petroleum atthe Wortham, Tex., field, reaching a peak of167,000 barrels a day in the middle of January,caused a larger total production in Januarythan in December, the larger supply was notsufficient to check the rising prices. After themiddle of January, however, the flow atWortham fell off, and by the week endingFebruary 14 the daily average output for theentire country had declined to 1,935,100barrels, as compared with a peak productionfor the year of 2,023,650 barrels a day in themiddle of January. Although a rapid increasein the supply of crude petroleum from theWortham field is no longer a serious problemfor the oil industry, reports indicate that ad-vancing prices have stimulated expansion inMexico and wildcatting in the West and South-west. The rapid advance in the price of crudepetroleum since the beginning of the year ispointed out in the following table:

Jan. 2" 9-_" 16" 23-" 30

Feb. 6" 13" 20.

DatePrice of

crude pe-troleum per

barrel

$0.90.90.90

1.151.351.351.551.55

Improvement in the crude petroleum in-dustry was preceded by improvement in therefined products industry. Stocks of gasolinewere reduced from 1,650,000,000 gallons at theend of May to 1,180,000,000 gallons at the end

of the year, and following this reduction inthe supply there were advances in the pricesof gasoline. The tank-wagon price at 30 citiessupplied by eastern and mid-continent refinersaveraged 15.7 cents a gallon at the end ofJanuary, as compared with 13.59 cents agallon in October, the low point for 1924.Prices for other refined products were strongerin January and February than last autumn,but the increases were not as significant asthose for gasoline.

Metals.In contrast to December activity and price

advances lasting well into January, a quietertone dominated the nonferrous metal marketsduring the latter part of January and the firsthalf of February. With primary producersfrequently out of the market and large con-sumptive requirements for the first quarterapparently filled, the markets both here andabroad were influenced largely by second-handand odd-lot dealers, and price recessions fromthe January highs were recorded in copper,zinc, lead, and tin. The price of refinedelectrolytic copper delivered at New York,which had advanced to 15 J^ cents on January14, fluctuated between 143̂ 2 and 15 cents andon February 18 was again quoted at 143^cents. Production of 144,544,000 pounds inJanuary was well above the high levels of thelast quarter of 1924 and the highest monthlyproduction since the war. Shipments of leadfrom Joplin district during January made anew high, while prices of both lead and zinc,after continuing the December rise during thefirst half of the month, broke sharply andclosed the month lower than at the opening.Shipments of slab zinc from refineries duringJanuary were slightly under the high levels ofNovember and December, but still in excessof production, which made a new high, so thatstored stocks were further reduced and atabout 19,000,000 tons were the lowest sinceJune, 1923.

Production of silver in January was 5,374,000ounces, the lowest since July, 1924. Quota-tions for bar silver in New York continued torecover during January and reached 6934 onthe last day of that month, but fell off sub-sequently and stood at 6 8 ^ on February 18.In spite of deliveries of tin in the UnitedStates during January that were higher thanfor any month since April, 1924, stocks withinthe country increased to 4,394 tons, the highestsince July of last year. Straits tin averagedslightly over 57 cents during the four weeks


MARCH, 1925 FEDEKAL RESERVE BULLETIN 161

ending February 18 and ended the period atthat price, in contrast to a high of 60 J^ onJanuary 3.

MANUFACTURINGFood products.

Greater activity was noted in the flour andsugar manufacturing industries in Januarythan in December, but the production of meatproducts as measured by the number of animalsslaughtered was smaller. The output of flourwas 6 per cent larger than in December andwith the exception of January, 1920, was in thelargest volume for that month in the past fiveyears. Milling operations in the Chicago,Minneapolis, and Kansas City Federal reservedistricts were higher than in December, butproduction in the St. Louis district was 4 percent smaller than in the preceding month.Rapid advances in the ""price of wheat inJanuary were accompanied by higher quota-tions for flour, which, for the week endingJanuary 30, reached $10.50 a barrel for springpatents at Minneapolis. Early in February,with the decline in the price of wheat, flourquotations dropped to $9.45 a barrel, but partof this loss was recovered during the remainingweeks of the month. Average flour prices forthe entire month of January were the highestfor any month since October, 1920, and wereabout $3.50 a barrel higher than last year. Inview of the violent fluctuations in the grainmarkets buyers were purchasing only for im-mediate requirements. Exports were in con-siderably smaller volume than in Decemberand were in the smallest volume for Januaryin the last six years.

The output of sugar in January increased 75per cent over December and was in the secondlargest volume on record for that month.Prices of both raw and refined sugar declinedin January, and on February 20 refined sugarwas 46 per cent and raw sugar 56 per centlower than last year.

All animals except sheep were slaughtered infewer numbers in January than in December.As compared with January a year ago there wereincreases in the slaughterings of cattle, calves,and hogs, but the increases were compara-tively small. The number of hogs slaughteredin January was the second largest monthlyfigure on record and followed from the excep-tionally heavy marketings in December andJanuary. Reports indicate that while market-ing has been large the hogs have been lighterin weight than ordinarily, which is indicativeof the tendency among producers to sell theirherds rather than attempt to feed corn at

present prices. As a result of large slaughter-ings of hogs and cattle, cold-storage holdingsof pork and beef products are considerablylarger than last year, but lamb and muttonproducts were in about the same volume.Both domestic and foreign demand for meatsand meat products were larger than in Decem-ber and dollar sales by 41 packers reporting tothe Chicago Federal Reserve Bank were 7 percent greater than in January last year. Exportsof hams, bacon, lard, and most beef productsincreased during the month, but practically allproducts were shipped abroad in smaller vol-ume than last year.

Textiles.Buying of textile products was fairly active

during January and February, markets on thewhole continued rather strong, and productionwas increased or maintained at relatively highlevels to cover orders previously received.The few price changes noted recently havevaried in extent and direction, but some ^Tereimportant, such as the increases in men'ssuitings at the openings of fall lines.

Demand for cotton goods has been wellmaintained, and although orders in generalare probably not as numerous as they were afew weeks ago, buying of certain constructionsof print cloths and finished goods has beenrather active. Prices have remained withoutsignificant changes for several weeks; theFairchild index of cotton goods prices hasfluctuated within a narrow range around15.65 since November 22. In fact, fluctuationsof cotton goods quotations since last Aprilhave been smaller than during any similarperiod since the war. The cotton-yarn market,on the other hand, has weakened somewhatsince the first of the year, and the Fairchildyarn index has fallen from 44.44 in the firstweek of January to 42.44 for the week endingFebruary 21. Manufacturing operations wereincreased further during January, as indicatedboth by mill consumption of raw cotton andby active spindle hours, which were the largestrecorded since May, 1923. In the cotton-growing States consumption and the numberof spindles active during January were thegreatest on record. Imports of cotton goodshave been heavy recently; in January receiptsat principal ports totaled 18,682,690 squareyards, the largest figure reported for any monthof the past year.

Early in February the American Woolen Co.opened its fall lines of men's wear at an averageadvance over last year's prices of 6.6 per cent



on 50 staple suitings. Increases in woolenswere greater than in worsteds. Buying sincethe openings has in general been only fairlyactive, but woolens continued to be morepopular than worsteds. Manufacturing opera-tions in the industry were at a somewhat lowerrate in January than in December, accordingto the percentage of machinery hours active.Consumption of raw wool, on the other hand,was slightly greater during January thanin December. December figures from themen's clothing industry show a much largernumber of garments cut than in the samemonth a year before. The raw-wool markethas been weaker since the first of the year, andprices throughout the world have declined.Fairchild's index of domestic raw wool pricesfell from 144.976 in the week of January 24,the highest figure since 1920, to 140.590 in theweek of February 21. Wool stocks on Decem-ber 31, as reported by the Bureau of the Cen-sus, were the smallest recorded since thefigures began in 1922. The accompanyingtable shows the data for domestic and foreignwools for certain recent dates. In recentmonths imports have increased considerably;they totaled 47,503,591 pounds in January, thelargest figure recorded since April, 1923, andweekly data indicate a continuation of ship-ments at the same rate.

STOCKS OF RAW WOOL IN THE UNITED STATES

[Actual weight in thousands of pounds]

Dec. 31, 1924.Sept. 30, 1924June 30, 1924.Mar. 31, 1924.Dec. 31, 1923.Mar. 31, 1923.Sept 30, 1922

Total Domestic Foreign

304,215323, 713273,971315,471373, 534420,655

131,373185,527182,298112, 701148,53781,624177,656

131,123118,689141,415161, 270166,934291,910242,999

Marked improvement was noted in the silkindustry during January and February—buy-ing increased considerably, productive opera-tions were enlarged, and prices rose. Takings ofraw silk by American mills totaled 39,885 balesin January, more than in any month since thestatistics began in 1920. Imports continuedlarge, but were smaller than in December andwere less than mill takings. Consequentlywarehouse stocks were reduced for the firsttime since July. Stimulated by large orders,producers of both tjirown silk and silk goodsnave increased production. The price of rawsilk again turned upward in February and ad-vanced to the highest point since last March.Greater strength m the Yokohama market and

advances in yen exchange were importantfactors in the recent price rise.

Demand for knit goods has been fairlystrong since the first of the year. Orders haveincreased and production schedules have beensomewhat enlarged. Production of practi-cally all classes of hosiery increased in Decem-ber and was much greater than a year earlier.Preliminary reports indicate further increasesin January in shipments and orders as wellas in production. Production and orders forknit underwear also increased considerablyin December, but shipments were somewhatsmaller and stocks were enlarged. Early inFebruary prices of wool underwear were ad-vanced by a leading producer.

Iron and steel.

Orders for iron aitd steel products have beenmuch lighter since the first of the year thanduring the last few months of 1923. Specifi-cations on contracts placed at that time forfirst quarter delivery are large, and productionis at a high level; furthermore, unfilled ordersare probably sufficient to maintain active man-ufacturing operations for several weeks, butorders for second quarter requirements are notbeing booked in large quantities. The level ofprices is now higher than when contracts weremade last fall. The recent advance, however,,has been checked and some declines have beennoted, but the general level, as indicated bythe Iron Trade Review's composite price, hasbeen relatively stable since the first of Janu-ary. Quotations on steel scrap were particu-larly weak, and several reductions were made.

Production of pig iron and steel ingots inJanuary was the largest ever before recorded inthat month, and the total output of ingots hasbeen previously exceeded only twice—in May,1923, and March, 1924. The daily averageproduction of steel ingots has increased 115 percent since the low point in output last July.In February the rate of operations was re-duced slightly and toward the end of the monthaveraged about 88 per cent, as compared with92 per cent at the end of January. Furnacesin blast on February 1 totaled 251—61 percent of the total number of stacks. Unfilledorders of the United States Steel Corporation,in face of large production and shipments, in-creased 220,000 tons during January to 5,037,-323 tons, the largest total since August, 1923.

Railroad buying, particularly of bridge ma-terial, continues to be an important factor inthe market, but car and locomotive awardsduring January were the smallest recorded in



several months. Some increase in car orderswere noted in February. Although prospec-tive building is large, structural steel bookingsin January totaled less than in any month lastyear. Automobile manufacturers continue tobe conservative buyers. Demand for semi-finished products has been fairly heavy, al-though here also some slowing down in buyinghas been noted. The pig-iron market has like-wise been dull in recent weeks.

Automobiles and tires.

Slight seasonal increases in production andfactory shipments of automobiles were report-ed in January, but both sales and output con-tinued small as compared with previousmonths. The current situation presents asharp contrast to that of a year ago, whenproduction was at a high rate and dealers wereplacing large supplies of cars in storage inanticipation of the spring demand, whichfailed to develop to the extent expected.Production of passenger cars totaled 204,000in January, as compared with the recent lowpoint of 179,000 in December and with 287,-000 a year ago. Railroad shipments werepractically the same as in December and con-siderably smaller than during January, 1924.Manufacturers report an increase in sales todealers as compared with December, whiledealers' sales to users were smaller. Certaindealers in the Middle West reported to the Fed-eral Reserve Bank of Chicago an increase in thenumber of cars on hand at the end of January ascompared with those held a month earlier and adecrease within the past year. A number ofprice reductions were made in December andin the first part of January, but few have beenannounced since the middle of January. Thedemand for trucks has continued fairly good,and production has been relatively stable sincethe middle of 1923.

For the second successive month productionof automobile tires and tubes in Januaryexceeded shipments, and stocks increased.Inventories are rather large as comparedwith those on corresponding dates of previousyears, but the increase is not so great when theyear-to-year growth in shipments and produc-tion is considered. After a sharp decline inprices in January, the crude-rubber marketstrengthened and quotations rose about themiddle of February. Imports in Januarytotaled 73,700,000, as compared with 59,000,-000 in December and 49,000,000 in January,1924.

Lumber.Shipments of lumber in January, as reported

by the National Lumber Manufacturers'Association, totaled 1,287,000,000 feet aridproduction 1,225,000,000 feet. Productionin this month exceeded the cut of lumber inNovember and in December, and was in ex-cess of production in any preceding Januarysince 1918. The Federal Reserve Board indexfor lumber production, corrected for seasonalvariation, rose from 128 for December to145 for January. Shipments in January wereabove the corresponding total for Decemberand also above that for January, 1924. Theyexceeded the total production in January, as wasthe case in the same month last year. Last yearin January shipments were running above pro-duction. As reported by the West Coast Lum-berman's Association, shipments of Douglas firran below production during October and No-vember and exceeded production in Decemberand January. Shipments of southern pine, asreported by the Southern Pine Association, ex-ceeded production in October, November, andDecember, and fell below production in Jan-uary. In the seven weeks ended February 14,1925, lumber cut reported for eight associationstotaled 1,516,000,000 feet, shipments 1,589,-000,000 feet, and orders 1,535,000,000 feet.For these weeks production was 4.6 per cent,and orders were 3.4 per cent below shipments.

Hides, leather, and shoes.Hide and leather markets have noted some

decrease in activity since the first of the vear,but on the whole business has been fairlygood for this season. Sales of hides and skinswere reported to be less active on the Chicagomarket, and prices have declined since themiddle of January, but lower prices are usualat this season because of the poorer quality ofhides and skins offered. Raw stocks of cattlehides increased in December, but those ofcalf, goat, and sheep skins were further re-duced, and all were smaller than a year earlier.Stocks disposed of were much larger than inDecember, 1923.

Demand for leather has lessened a littlerecently, but on the whole has been fairlywell maintained. Prices have been firm, withadvances noted in a few cases. Stocks offinished leather were in general reduced duringDecember, and production was greater thanin November, although for some types ofleather output was less than in December,1923. Stocks in process on December 31 were



all smaller than at the end of the previousyear. Preliminary figures show a decrease of6 per cent in the production of sole leatherduring January to 1,294,319 backs, bends, andsides. Tanners' finished stocks were reducedand stocks in process were increased.

Shoe manufacturers are now producing inpreparation for deliveries of shoes for Easter.Producers report more activity in the buyingof women's shoes than in the case of men'slines. In general, factories are booked upuntil Easter, but few orders have been receivedfor later delivery. Shipments have beenseasonably dull. Production of shoes wasabout 7 per cent greater in January than inDecember, totaling about the same as inJanuary, 1924. Decreases in output werenoted in the Philadelphia and Chicago dis-tricts, whereas increases occurred in the otherimportant producing sections. Sales of shoesat wholesale were smaller in January than inthe corresponding month last year.

BUILDING

Contracts awarded in 11 Federal reserve dis-tricts during January indicated for this monthin comparison with the month preceding a de-crease of nearly 9 per cent in the value of pro-jected building. Statistics compiled by theF. W. Dodge Co. show decreases for the Bos-ton, Cleveland, Richmond, Atlanta, Chicago,and St. Louis districts, and increases for theNew York, Philadelphia, Minneapolis, KansasCity, and Dallas districts. January valuescontracted for a year ago in 10 of these dis-tricts combined held very close to the preced-ing December total, but the December-Janu-ary decrease this year in these districts from$327,000,000 to $294,000,000, although con-siderable in amount, leaves the volume of newbuilding contracted for at a high figure forJanuary—only 2 per cent below the excep-tionally high total for January a year ago andmore than 20 per cent above that for Januarytwo years ago. The New York district,which in January of this year reported morethan one-third—$110,000,000 out of $310,-000,000—of the values represented in contractwards in the 11 districts, reported an increaseof $8,500,000 in January over December, theJanuary total this year, which is close to thatfor January, 1924, being in excess of the Jan-uary, 1923, figure by $44,000,000 and doublethe January, 1922, total.

Square feet contracted for in 27 northeasternStates decreased in nearly the same proportion

as values—9.5 per cent, from 46,800,000 feet inDecember to 42,342,000 feet in January. Fiveout of eight classes of construction show de-creases, the most considerable being that forresidential building contracts. This year'sJanuary total for all classes of construction is15 per cent below that of January, 1924.The number of square feet of residential con-struction contracted for in January of this yearwas 23,518,000, which is less by nearly one-third than the corresponding total of 34,693,-000 for January, 1924, and below the total of24,586,000 for January, 1923.

Number and value of building permits issuedin 168 selected cities of the United States alsodeclined in January from the totals of themonth preceding. Number of permits issueddecreased from 41,519 in December to 38,735in January, and values from $247,000,000 to$213,000,000, the decrease in values amount-ing to 13.7 per cent. Value decreases from theDecember totals are shown for the cities of 10Federal reserve districts, and relatively smallincreases for the Dallas and San Francisco dis-tricts. In January of 1924 these same citiesissued 42,096 permits, covering values totaling$222,000,000. In comparison with January ayear ago decreases in values are shown for thecities of eight districts, and increases for thecities of four districts, the net decrease forthe 168 cities combined amounting to 4.2 percent.

On February 20 the price of Portland cementper barrel was $1.85, which was the price re-corded for the preceding week, for a month ago,and for a year ago. The price of bricks onFebruary 20 ($14 per thousand), while materi-ally lower than in February a year ago, hasnot changed in recent weeks, and the priceindexes for lumber also indicate only inconsid-erable price changes. The Bureau of Laborstatistics price index for building material,however, advanced in January to 179.3 from175.1 in December.

TRANSPORTATION

Freight-car loadings in January of 3,991,557cars for all classes of freight combined ran closeto the December total of 3,931,109 cars, theincrease of January over December being some-what under average seasonal change for thesemonths, with the result that the FederalReserve Board index of car loadings correctedfor seasonal variations declined slightly—from124.2 to 122.9 per cent. Car loadings in Janu-ary were, nevertheless, greater than in any


MARCH, 1925 FEDEKAIi RESERVE BULLETIN 165

January of the six years, 1919 to 1924, for allclasses of freight combined, and specifically formiscellaneous freight, merchandise 1. c. 1., grainand grain products, forest products, and coal.Loadings of ore and coke, while not in recordvolume, were in excess of, and loadings of live-stock were close to last year's movement.Loadings in January ran above the Decembertotals in the Allegheny, Pocahontas, northwest-ern, and central western districts, and fell off inthe eastern, southern, and southwestern dis-tricts. They ran above the 1924 January totalsin all districts excepting the eastern.

Weekly figures show that in the week endedFebruary 14 loadings of coke, ore, merchan-dise, and miscellaneous freight were runningabove, and loadings of grain and grain products,livestock, coal, and forest products, and of allclasses combined, below last year's totals forthis week.

In February, as in January and in eachmonth of the preceding year, the roads weremaintaining a large surplus of serviceablecars, with practically no shortage attributableto failure on their part to provide for trafficneeds. Reports for February 14 show asurplus of 220,798 cars and a shortage of 511cars.

Toial operating revenues for Class I railwaysin December, amounting to $505,522,950, were$10,908,235, or 2.2 per cent above, while totaloperating expenses, amounting to $381,415,252,were $6,738,761, or 1.7 per cent below the corre-sponding totals for 1923. The operating ratioof expenses to revenue was accordingly lowerin December of 1924 than in the correspondingmonth of 1923, being reduced to 75.45 from78.48 per cent.

Final figures for the calendar year 1924 givetotal operating revenues of Class I roads as$5,986,492,120, which falls short of the 1923aggregate by $373,931,093

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