Index

Anxious to give business a stimulant, last week the directors of Federal Reserve Bank of New York slashed its rediscount rate from 2% (where it had stood since Dec. 24) to 1 1/2% Money eased throughout the land.* The immediate aim and probable result was to aid England which has been losing gold to the U. S. Over a longer period, agreed bankers last week, it should encourage foreign financing in the U. S., likewise issues by domestic companies. Yet last week the state of U. S. business was such that no sudden demand for funds was expected, no immediate revival held likely.

News from the Iron & Steel industry continued bearish. April pig-iron production was up slightly from March as was expected, but was the lowest of any year since 1909 with the exception of 1921. Blast furnaces in operation stood at 113 against 116 on April 1. Steel operations throughout the country were placed at 47% against 48% the previous week, and steelmen hoped a gain by Chevrolet might offset Ford's declining production. Scrap prices dropped lower, tin and rail operations fell. The unfilled orders of United States Steel Corp. on April 30 stood at 3,897,729 tons, a drop of 97,601 tons from March 31 and of 456,591 tons from April 30. 1930. Pipeline awards were higher and structural steel business was reported better. The April daily average steel ingot production was 104,711 tons against 158,057 in April 1930; 190,398 in April 1929.

Construction during April was in greater volume than during April 1930, and now lags 13% behind 1930. In March it was 20% behind. Public construction was 27% ahead of 1930, highways 32%. Public utility construction ran 23% behind last year. Residential building was about the same as in April 1930. Industrial and commercial building was 44% behind. The cost index of building materials (Engineering News-Record's index) was at 189 against 191 in April, 205 in May 1930.

Railroad earnings continue bad (see page 68), and industrial earnings unpromising (see col. 3). Carloadings for the week ended April 25 were 759,000 cars against 906,000 a year ago. Sales of 38 chain stores for the first four months showed a 5.16% drop. These figures include three mail order houses, whose sales dropped 11.28%. April sales of the entire group were down 4.09% under April 1930. The mail order sales were down 1.74%

Electric power production, after weeks of wide fluctuation, last week seemed stable at 86.2% of normal against 96.2% last year.

The index of cotton cloth production last week was slightly off at 93.5% but still up considerably since the first of the year.

Bank clearings are running 20% behind last year, and last week brokers' loans reflected the collapse of speculative activity by dropping $31,000,000 during the week to the lowest level of the bear market. This figure stood at $1,699,000,000 against the all time high of $6,804,000,000 reached on Oct. 2, 1929.

*The New York bank's rate is the lowest in the country, and the lowest rate ever established by a central bank for member borrowing. In the past, however, an amplitude of idle funds has caused even lower rates. In 1894 (after the panic of 1893) 30-day funds in New York stood at 1% while during the latter half of the next year open market discounts in London averaged but 5/8 of one per cent.

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