Evening star., 1924-08-03
BANK DEBTS SHOW
. BUSINESS ACTIVITY
Figures for Washington Re-
fleet Marked Changes in
Past Few Years.
: BY L. SETH scHNrrMAN.

oecone Available IOf the city OF
Washington, a series OF current facts
representing commercial transactions
and known generally by the term
debts to individual bank accounts"
Compared with similar data for other
cities Of almost the same size and for
Washington reflect to an amasing
degree the course which business has
taken since the depression of 1920-21.
The figures on debts reported by
banks which are members of the
clearing house association have re-
placed the less accurate figures on
bank clearings. Checks drawn on the
not included in the data on bank
debts. but those drawn on all other
accounts-accounts of individuals,
firms. corporations. and the Federal
Government are comprised within the
debit figures reported. whether these
checks have gone through the clear
ing house or not. Hence the data on
bank debts is entirely indicative OF
the dollar volume Of business.
June Biggest Check Month.
The largest volume of check trans
actions in Washington falls usually
in the month OF June, when COVER
mental expenditures are generally at
their peak, while December Is usually
the second highest month for the
same reason and for the added reason
that retail trade at this period of
the year is normally at its highest
because of the holiday season. Trans
actions in January and February are
customartly about 8 per cent and IA
per cent. respectively. below tho aver
age monthly transactions in any given
year, while the months Of March,
April. May, and October generally
record a considerably larger trade
volume than the Summer months of
for February. check transactions In
Washington are at their lowest ebb
Debts in July and November are
usually about the same at slightly
more than ! per cent below the aver
age.
Bearing this seasonabIe movement
in mind it is apparent that any true
comparison must brush aside the sea-
sonaI element to leave clear the un-
obstructed trend of the volume OF
trade. This has been done in this
study for the city of Washington, and
for comparison the data for Milwaukee
Minneapolis, and the United States
have been similarly adjusted, the ac-
companying chart showing in striking
fashion the percentage variations from
normal in the trend Of business after
this adjustment. The average monthly
transaction during the period 1921
1923. inclusive was taken as normal.
the 36 months volume of business dur
ing this period representing almost a
complete business cycle beginning, as
ii did, with the depression of 1921 and
terminating with a declining phase late
in 1923. after having reached a high
point in the spring of that year in its
transit from the depression of 1921
to prosperity in 1928.
Volume OF Business.
Thus it may be seen that the volume
of business in Washington as meas
ured by this indicator stood at per
cent below normal for January, 1921,
from which point it declined to almost
IS per cent below normal in May. 1924,
this point marking the lowest trough
reached during the postwar depres-
sion. This decline in dollar volume of
trade was in part IL not wholly due
to the decline of wholesale prices,
which from January. 1891 to May, 1921.
about Is per cent.
From the drawing it may further be
seen that Milwaukee, with q present
population of but 5000 larger than
that of Washington, declined from
about per cent above normal in
normal for January, 1922. the trend
being continuously downward through
out this period with one or two tenn
porary revivals occurring in the latter
part of 1921. For Minneapolis. hav-
ing an estimated population on July
l. 1924, of 4l4.2So as against Wash
ness recorded a decline from 3 per
ecent above normal where 1t stood in
January, 1921, to Is per cent below
normal for January. 1922.
For both Milwaukee and MiEneap-
oils it is significant to note, however.
that the decline was one from a posi-
ton above normal in January. 1921,
continuing downward. with relatively
minor exceptions, throughout the eL-
tire year 1921, while for Washing
was recorded since the middle Of 1921.
and IL allowance were made for the
decline in prices the trend was prob
ably upward throughout the entire
year year of ~ 1921 sat from point below nor, or,
1920 for Washington seem to indi-
cate that the normal so called Is
too high, and that there has been 4
steady growth IN business volume in
Washington since August 1920 de-
ture. while the business volume ir
other localities was declining at q
fast rate.
Striking ConDarfsoAs.
A striking comparison, too. is to
be found between the bank debts of
Washington and those for the United
states as. whole. Except for the
fact that for the United States the
decline from January, 1921. was from
position at just about normal, while
for the District of Columbia it was
from about per cent below normal,
the trends are remarkably similar.
The similarity between the volume of
in he ni& - t.
and in the United States is therefore
of utmost Significance. -'
The low point in 1891 for Washing
ton occurred in May OF that year,
while for the United States 1t did
not occur until two months after
ward. The increase in trade volume
in Washington in June. 1921. fore
shadowed a corresponding increase
dor the country at large, which oc-
CURED in. August, 1921. The decline
Washington forecasted a similar de-
cline in October for the United States
total. Likewise the declincs in
Washingtons business volume In
May, 1922; September. 1922; Febru-
1928, foreshadowed similar deciines
which occurred one; or two months
later in the United States total.
Still another thing Of signifcance
to be noted Is the steep decline in the
voIume or business for the United
states in 1923, while for the District
of Columbia the rate Of decline was
much more gradual. Wholesale prices
also declined during this period which
accounts to some degree for the de-
cline in the dollar volume of trade.
Parallel to the situation in 1898 is the
one in the early part Of 1921 when
likewise the decline for the United
States at large was much more steen
than for. the city Of Washington. -
Lower Decline in washinxto..