ness activity through their heavy purchases of equipment and supplies, most of which were financed through the capital markets. Compared with the 1926 average, employment in the equipmentmanufacturing industries during 1933 was off by more than 80 percent. Statistics for railway repair shops make a relatively better showing, with employment during 1933 at 47 percent of the 1926 average.

Despite the assistance rendered by governmental agencies, and the revenues accruing under the surcharges, receiverships were numerous and involved several companies with a considerable mileage. In total, 31 companies (including lessor and proprietary companies), with 19,954 miles of roads, were placed under receivership in 1933. Of these, 12 companies, operating 19,667 miles of road, were in the class I group. The mileage in receivership approximately

Chart 19.-Net railway operating income, class I roads (Interstate Commerce Commission). NOTE. Data for switching and terminal companies not included.

doubled during the year, and at the close of the year 81 roads operating 42,098 miles were in receivership.

While the gain in traffic in 1933 was not sufficient to permit the rehabilitation of the properties, nevertheless an improvement in their financial position may be noted. As a result of a 6.4 percent reduction in operating expenditures and the slight rise in revenues from freight traffic, only 35 class I roads with less than 8 percent of the total mileage failed to earn their fixed charges, whereas, in 1932, 52 roads with 22 percent of the mileage earned less than their interest and taxes. The 1933 net railway operating income of $474,000,000, however, was equivalent to only about 14 percent on the property investment of the roads. The improvement in the final three quarters of 1933 is shown by chart 19.

The number of persons employed by the class I railroads has continued to correspond roughly to the trend of traffic, dropping to a low of 934,000 in the middle of March and increasing to 1,047,000 in September. By the middle of December, the number had decreased to 982,000. Since the peak of 1929, the number of railroad employees has been reduced by 778,000. Annual earnings per employee averaged $1,446 in 1933, compared with $1,465 in 1932.

In view of the financial difficulties of the railroads, the improvements made during 1933 in passenger facilities and passenger service were especially noteworthy. The most striking were the widespread adoption of air-conditioning equipment on passenger cars and the ordering by two western roads of fully stream-lined passenger trains. Reductions in passenger fares by some carriers also made a strong bid for public patronage.

An administration bill, designed to strengthen the railroads and protect existing investments by making possible further additional savings in operations was enacted into law June 16, 1933. This act provided for three emergency steps, as follows: (1) Repeal of the recapture provisions of the Interstate Commerce Commission Act; (2) regulation of railroad holding companies by the Interstate Commerce Commission; and (3) the appointment of a Federal Coordinator of transportation to encourage, promote, or require action to avoid duplication of service, prevent waste, and encourage reorganization where necessary. One of the first accomplishments of the coordinator was to secure an agreement whereby the railroads deferred action until June 30, 1934, upon a previously announced intention to seek an additional 12%1⁄2 percent reduction in the basic pay scale. The law provided that economies effected should not result in reducing the number of employees below the total as of May 1933. This provision, designed to prevent further additions to the unemployed, has necessitated the search for economies in other directions. One step taken by the Government, which had social rather than financial implications, was the rule that Government loans would not be made to roads whose executives received more than $60,000 per year.

SHIPPING

The improvement that took place in American shipping during 1933 is indicated by the gross seagoing tonnage in active service at the end of the year, which was 15 percent greater than a year earlier. The recovery embraced both the foreign and coastwise trades, with the former recording a gain of 24 percent as compared with one of 10 percent for the latter. Combination vessels, freighters, and tankers all participated, but the first of these groups did so only to a small extent compared with the second and third. The largest gain (366,000 gross tons) was for freighters engaged in foreign trade increase amounted to 48 percent as compared with 1932 tonnage of tankers engaged in foreign trade increased 104,000, or 35 percent. The participation of American shipping in the carriage of goods between the United States and foreign countries (based on the value of merchandise carried) was about the same as in 1932. There was a slight gain, from 34.2 to 35 percent, for exports, and a fractional reduction for imports, 36.3 to 35 8 percent.

AIR TRANSPORT

This Gross

Air transportation, both freight and passenger, made substantial gains over 1932 despite a reduction from 136 to 112 in the number of services in operation. The improvement was reflected in an increase of about 12 percent in the number employed, which reached 6,273, exceeding the previous high figure of 1931. The number of passengers carried increased from 540,681 in 1932 to 568,940 in 1933, while the

passenger miles flown increased by more than one third. Express and freight carried increased from 1,702,981 pounds to 2,452,812 pounds. The amount of domestic mail carried was roughly the same as last year, but foreign mail declined 10 percent. The downward trend of passenger fares was halted in 1933 when the average rate per mile remained at $0.061, the same as in 1932. This figure, however, represents a reduction of about one half as compared with 1929.

The number of planes manufactured in 1933 was 1,324, a decrease of about 5 percent for the year. Export orders contributed a major source of support during the year, the number of planes produced for foreign orders increasing from 229 in 1932 to 316 in 1933. The decline in the total number of planes produced was due to the reduction in military orders, as commercial plane production increased.

MOTOR TRANSPORTATION

The motor truck and bus have continued to grow in importance as vehicles of transportation for freight and passengers. Definite statistics are lacking on the extent to which trucks participated in the larger volume of freight handled in the last three quarters of the year. There was a decided gain in truck output; however, the number of trucks registered at the end of 1933 was 158,000 less than the 3,233,457 registered at the end of 1932. The mileage of bus routes was further expanded during the year, according to unofficial estimates, and revenues from bus passengers dropped moderately as compared with

1932.

DOMESTIC TRADE

During 1933 the Bureau of Foreign and Domestic Commerce undertook, by the compilation of a number of official indexes of retail trade of various types, to measure more accurately than existing material permitted the movement of goods into the hands of consumers. By the end of the year monthly data since 1929 had been completed for variety-store, grocery-store, new-passenger-car, and general rural sales. These indexes indicate, when adjusted for seasonal movements, a fairly continuous decline in dollar volume of sales from the end of 1929 through the first quarter of 1933. During the second quarter of 1933, after adjustment for normal seasonal movements, the indexes show an improvement in sales. The rise during the third and fourth quarters was sufficient to maintain the total for the year slightly above the dollar volume of trade during 1932. In each of the four retail groups under consideration, except groceries, sales were higher in 1933 than in 1932. The gain in rural sales was especially significant, with an over-all improvement of 9 percent as compared with the previous year.

SALES THROUGH PRINCIPAL COMMERCIAL CHANNELS

Department-store sales for 1933 as a whole were about 3 percent less than in 1932. Distinct improvement was noted as the year 1933 progressed, however, with advances of 14 and 7.4 percent over the previous quarter in the second and third quarters, respectively, after allowance for seasonal variations. Sales in December 1933, on an adjusted basis, were 6 percent greater in dollar volume than in November, and were approximately 15 percent larger than in December 1932, as is shown by chart 20. Sales were still, however, 15 percent less than in December 1931. December 1933 prices, according to Fairchild's index of department-store articles, were about a fourth higher than a year earlier. It appears, therefore, that the physical volume of department-store goods sold in December 1933 was smaller than in the same month the year before.

Sales of new passenger automobiles were slightly less in the first quarter of 1933 than in the corresponding period of 1932, but increased rapidly thereafter to raise the total number of cars sold in 1933 to a volume almost 40 percent greater than in the previous year. The dollar volume of sales in 1933 was 22 percent above the 1932 level. Variety chain-store sales, on a dollar basis, after allowance for seasonal variation, likewise tended generally upward from March through August, although July sales, which usually show but little change from June, dropped sharply. From September to the close of the year, sales recorded less than the usual seasonal expansion. Although December sales were approximately 16 percent above December 1932, a large part, if not all, of this gain in dollar volume was the result of increased prices.