FEDERAL RESERVE BULLETIN FEBRUARY, 1925 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Industry and Trade in 1924 Business Conditions in the United States Decision in New Par Clearance Case WASHINGTON GOVERNMENT PRINTING OFFICE 1925 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD Ex officio members: D. R. CRISSINGER, Governor EDMUND PLATT, Vice Governor A. W. MELLON, ADOLPH C. MILLER. Secretary of the Treasury, Chairman. CHARLES S. HAMLIN. J. W. MCINTOSH, GEORGE R. JAMES. Comptroller of the Currency. EDWARD H. CUNNINGHAM. WALTER L. EDDY, Secretary. WALTER WYATT, General Counsel. J. C. NOELL, Assistant Secretary. WALTER W. STEWART, Director, Division of Research W. M. IMLAY, Fiscal Agent. and Statistics. J. F. HERSON, E. A. GOLDENWEISER, Assistant Director, Division of Chief, Division of Examination, and Chief Federal Research and Statistics. Reserve Examiner. E. L. SMEAD, Chief, Division of Bank Operations FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON) CHAS. A. MORSS. District No. 2 (NEW YORK) PAUL M. WARBURG, President. District No. 3 (PHILADELPHIA) L. L. RUE. District No. 4 (CLEVELAND) GEORGE A. COULTON. District No. 5 (RICHMOND) JOHN M. MILLER, Jr. District No. 6 (ATLANTA) v OSCAR WELLS. District No. 7 (CHICAGO) FRANK O. WETMORE. District No. 8 (ST. LOUIS) BRECKINRIDGE JONES. District No. 9 (MINNEAPOLIS) G. H. PRINCE. District No. 10 (KANSAS CITY) E. F. SWINNEY, Vice President. District No. 11 (DALLAS) W. M. MCGREGOR. District No. 12 (SAN FRANCISCO) HENRY S. MCKEE. II Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Chairman Governor Deputy governor Cashier Boston Frederic H. Curtiss W. P. G. Harding. W. W. Paddock_.. W. Willett. Benj. Strong J. H. Case L. H. Hendricks.i New York.. Pierre Jay L. F. Sailer A. W. Gilbart.i G. L. Harrison J. W. Jones.i E. R. Kenzel G. E. Chapin.1 Ray M. Gidney.* L. R. Rounds.* Philadelphia-_ R. L. Austin Geo. W. Norris- Wm. H. Hutt W. A. Dyer. Cleveland E. R. Fancher.. M. J. Fleming J. C. Nevin. D. C.Wills Frank J. Zurlinden_. Richmond George J. Seay._ C. A. Peple Geo. H. Keesee. Wm.W. Hoxton R. H. Broaddus John S. Walden, jr.* Atlanta M. B. Wellborn. J. L. Campbell M. W. Bell. Oscar Newton Creed Taylor Chicago.----- J. B. McDougal. O. R. McKay W. C. Bachman.i Wm. A. Heath JohnH. Blair K. C. Childs.i J. H. Dillard.i D. A. Jones.1 O. J. Netterstrom.i Clarke Washburne.1 St. Louis Wm. McC. Martin . D. C. Biggs.. O. M. Attebery J. W. White. John R. Mitchell. R. A. Young W. B Geery__ Gray Warren. Minneapolis.. B.V.Moore Frank C. Dunlop.1 Harry Yaeger 2 Kansas City... M. L. McClure _ W.J. Bailey C. A. Worthington.. J. W. Helm. Dallas R.R.Gilbert R. B. Coleman. Lynn P. Talley B. A. McKinney. Val. J. Grand San Francisco . John Perrin. J. U. Calkins Wm. A. Day W. N. Ambrose. Ira Clerk L. C. Pontious i Controller. 2 Assistant deputy governor. MANAGING DIRECTORS OF BRANCHES OF FEDERAL RESERVE BANKS 1 Federal Reserve Bank of— Managing director Federal Reserve Bank of— Managing director New York: 1 Minneapolis: Buffalo branch W. W. Schneckenburger. 1 Helena branch R. E. Towle. Cleveland: I Kansas City: Cincinnati branch L. W. Manning. j Omaha branch L. H. Earhart. Pittsburgh branch Geo. DeCamp. Denver branch J. E. Olson. Richmond: 1 Oklahoma City branch C. E. Daniel. Baltimore branch A. H. Dudley. Dallas: Atlanta: El Paso branch.- D. P. Reordan. New Orleans branch Marcus Walker. Houston branch. Fred Harris. Jacksonville branch _ Geo. R. DeSaussure. ! San Francisco: Birmingham Branch-- _ A. E. Walker. Los Angeles branch C. J. Shepherd. Nashville branch J. B. Fort, jr. Portland branch Frederick Greenwood. Chicago: Salt Lake City branch R. B. Motherwell. Detroit branch __ W. R. Cation. Seattle branch C. R. Shaw. St. Louis: Spokane branch W. L. Partner. Louisville branch W. P. Kincheloe. Memphis branch V. S. Fuqua. Little Rock branch A. F. Bailey. SUBSCRIPTION PRICE OF BULLETIN THE FEDERAL RESERVE BULLETIN is the board's medium of communication with member banks of the Federal reserve system and is the only official organ or periodical publication of the board. It contains, in addition to the regular official announcements, the national review of business conditions, detailed analyses of business conditions, research studies, reviews of foreign banking, and complete statistics showing the condition of Federal reserve banks and member banks. The BULLETIN will be sent to all member banks without charge. To others the subscription price, which covers the cost of paper and printing, is $2. Single copies will be sold at 20 cents. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS The month: Page Review of the month—Industry and trade in 1924 71 Business conditions in the United States 75 British banking in 1924 98 Official: Law department— Court decision in Atlanta par clearance case 100 The McFadden bill 103 State banks admitted to system 108 Fiduciary powers granted to national banks 108 Charters issued to national banks 108 Business statistics: Industrial statistics in the United States 109 Wholesale and retail trade 116 Industrial statistics for foreign countries 120 Foreign trade of principal countries 121 Financial statistics for principal foreign countries 122 Price movements in principal countries: Federal Reserve Board wholesale price indexes 123 Comparative wholesale prices in principal countries 125 Comparative retail prices and cost of living in principal countries 126 Banking and financial statistics: Federal reserve banks— Condition of Federal reserve banks 127 Federal reserve note account 131 Holdings of earning assets 132 Discount and open-market operations of Federal reserve banks , 133 Earnings and expenses of Federal reserve banks, year 1924 134 Gold settlement fund 142 Discount rates of Federal reserve banks 142 Member banks— Condition of member banks in leading cities 137 Bankers' balances at reporting member banks in Federal reserve bank cities 138 Deposits of all member banks 141 Bank debits 140 Money rates in principal cities 143 Money in circulation 141 Gold and silver imports and exports 144 Foreign exchange rates and index 145 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 11 FEBRUARY, 1925 No. 2 REVIEW OF THE MONTH The course of industrial activity from month to month during 1924, as reflected in the output Growth of business activity, which began of 22 basic industries, fluctuated in the autumn of 1924, continued in recent Course of in- more widely than in 1923, as months. The rapid recovery, dustry in 1924. Increase in » T1 . ,, , , is shown by the chart. The business activity. follo^ng upon the abrupt re- recession in production between February cession of the first part of the and June, following the brief and unsustained year, was shared in by most of the basic in- recovery at the turn of the year, brought the dustries and carried their output to a level 25 volume of production in these industries to per cent above the low point of midsummer the lowest level in two years. After three and higher than a year earlier. The volume [1919=100] PER CENT PER CENT of trade, which continued at a relatively high 14-0 14-0 level throughout the year, also increased and PRO DUCTION IN BASIC IND JSTR1ES in December was larger than at the end of 130 130 1923. A growth in the buying power of con- j sumers arose out of the increase in em- 1923 120 120 ployment of factory workers and the larger \ volume of farm products marketed at higher I' 110 110 prices. The level of wholesale prices, after > receding for more than a year, advanced / during the last half of 1924 to a level in De- 100 100) cember higher than at any time since the 192 spring of 1923. During the period when 90 90 prices were receding agricultural prices declined less than other prices, and the advance in the 80 J— 80 price level since June is largely the result of Jan. Fetx Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. increases in prices of agricultural products, with the consequence that at the end of the months of activity at this low level output year the prices of these two groups of commod- increased at a rate almost equal to that of ities were in closer adjustment. Taking the the preceding decline and at the close of the year as a whole, industry, though more active year was somewhat higher than at the end of in recent months, had a smaller volume of 1923. These fluctuations in production were output marketed at lower prices than in 1923; accompanied by similar, though less pro- agriculture, on the contrary, had a somewhat nounced, changes in the volume of factory larger total production than in the previous employment, which increased during the last year, marketed at considerably higher prices. third of the year, but in December was still 6 At the end of 1924, as a result of these read- per cent lower than a year earlier. These justments and of the improvement in the abrupt changes in production and employ- world market for agricultural products, there ment reflect chiefly the rapid adjustment of was a better balance between industry and output in primary industries to changes in agriculture than at any time in more than market conditions. Profitable operation in four years. those industries where unit costs are largely 71 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St.