676 FEDERAL RESERVE BULLETI N. JUNE, 1922.

may readily bo understood by every mer-
chant and every banker. For the insured,
the chief operative features are but three in
number, viz, (1) The "coverage" clause,
prescribing the limit of insurance in dollars
on each rating; (2) notice to the company of a
past due or insolvent account; (3) the method
of adjustment. These indicate to the policy-
holder his method of procedure in all cases.
Present use.— Credit insurance policies are
used by manufacturers and jobbers of all sizes,
from those doing a business of §50,000 a
year to those doing upward of 875,000,000.
In number, the medium-sized houses, who do
a business of from $200,000 to $2,000,000
yearly, constitute the majority of the policy-
holders. Those known as the "millionaire''
sales houses, however, form a large and.grow-
ing part of the business of the companies.
Credit insurance is used in almost all lines
of trade. It is perhaps most frequent for
lumber, iron and steel, coal, hardware, tex-
tiles, paper, advertising agencies, printing
and stationery, shoe and clothing manufac-
tures, etc. A few lines arc considered extra
hazardous and are not solicited. This is due
to the profits, nature of the merchandise, and
type of individuals sometimes found in them.
These lines include diamonds and jewelry,
furs, scrap iron, patent medicines, and jobbers
of woolens. The retail jeweler, e. g., receives
the stock of diamonds which he needs to dis-
play, on terms averaging about eight months,
and if he has not sold them by that time, re-
ceives additional time, so that he may even
be carried for several years. What insurance
is written in such lines is confined to the best
firms, and is not written on the regular basis.
The amount of such business written has been
so small that it affords no reliable actuarial
basis upon which to write these lines.
Premiums and losses.—The general growth of
credit insurance during the past 10 years may
be observed in the following figures, showing
net premiums received annually. The table
also gives net annual data for losses paid and
expenses incurred in adjustment. Returns
for the three companies are consolidated.
COMBINED EXPERIENCE
PREMIUMS AND
Year.
1912
1913
1914
1915
191(5 . . :
1917
1918
1919
1920
1921
or THE THREE COMPANIES FOR
LOSSES FOR TEN YEARS.
Premiums.
..'• SI. 611.352
1,506,827
1,487,506
1.395.713
. . : 1,413,566
1.665.915
1,856.703
2,219,679
3,695,954
3,498.161
Losses.
SI
3
195,840
923,293
732,339
939.765
293,423
97,07ft
194,182
72,552
637,318
100,782
Per cent.
74
61
49
67
21
6
10
3
17
89
It will be noted that losses differ greatly
from year to year. They roughly parallel the
changes in general business conditions, being
at a peak for some years after a crisis. During
the vears 1912 and"l913 and for 1915 and 1921,
the losses were large, but during the years 1916-
1920
;
inclusive, the reverse was true. In 1921,
the year following the crisis, they reached a
peak, being greater than in. any previous year.
The losses are expected gradually to decrease
as business revives, but it is believed that it
will probably be a year or two before they are
back to what is regarded as normal.
CLASSIFICATION OF BUSI NESS LI NES.
Group.
1
1
3
4
1
1
4
2
1
2
2
4
A
2 I
2 !
1 '•••
• I
?
4 !
2 :
2 i
3
2
2
2
2
1
2
4
1
4
1
3
2
2
2
2
Line.
?!
S I
2
3
3
3
4
1
2
1
4 I
2
4
4
2
2
2
4
1
2
1
3
2
4
Advertising, books, printing, stationery, and lithographers.
Agricultural implements.
Ammunition, hardware, and cutlery.
Automobiles, automobile accessories, bicycles, and bicycle
parts.
Awnings and tents.
Bagging and bags.
Bags and trunks.
Bakers,.confectionery, and candy.
Barrels and cooperage stock.
Bedding and upholstery.
Belting (leather), machinery, and machine supplies.
Bicycles, bicycle parts, automobile accessories, and auto-
mobiles.
Blankets.
Blinds, planing mills, sash, and doors.
Boilers, stoves, heating appliances, and furnaces.
Books, printing, stationery, lithographers, and advertising.
Boots and shoes (jobbers).
Boots and shoes (manufacturers).
Bottles.
Boxes and crates.
Boys' and men's clothing.
Brass, copper, and metals.
Brick, cement, lime, plaster, terra cotta, buiiding and roofing
materials, and sand.
Bronze powder, wallpaper, and window shades.
Brushes, celluloid goods, and combs.
Building and roofing materials, sand, brick, cement, lime,
plaster, and terra cotta.
Butter, eggs, and cheese.
Buttons.
Candles, grease, and soap.
Candy, confectionery, and bakers.
Canes and umbrellas.
Canned goods, grocers' sundries, and fancy groceries.
Caps, straw goods, and hats.
Carpets and floor coverings (manufacturers).
Carpets and floor coverings (jobbers).
Carriages and wagons.
Car wheels, foundry, iron, steel, and heavy hardware.
Celluloid goods, combs, and brushes.
Cement, lime, plaster, terra cotta, building roofing materials,
sand, and brick.
Chains (iron), manufacturers.
Cheese, butter, and eggs.
Chemicals.
Children's and ladies' clothing.
China, crockery, and glassware (jobbers).
China, crockery, and glassware (manufacturers).
Cigars and tobacco (jobbers and manufacturing).
Cloaks and suits.
Clothing (ladies' and children's).
Clothing (men's and boys').
Coal, fuel, and ice.
Coflee, spices, and teas.
Coffins and undertakers' supplies.
Collars, shirts, and cuffs.
Combs, brushes, and celluloid goods.
Commission dry goods
%
Commission woolens.
Commission, provisions, fruits, and produce.
Confectionery, candy, and bakers.
Converters (cotton), selling jobbers and retailers exclusively.
Converters (cotton) selling in whole or part to manufacturers.
Cooperage stock and barrels.
Copper, metals, and brass.
Cordage and twine.
Corsets.
Cotton converters, selling jobbers and retailers exclusively.
Cotton converters, selling in whole or part to manufacturers.
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Federal Reserve Bank of St. Louis
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.JI\NK, 1922.
FEDERAL RESERVE BULLETIN. 677
CLASSIFICATION OF BUSINESS LINES—Continued.
Group.
2
4
2
2
1
1
3
2
1
4
2
3
o
2
3
4
1
4
4
2
2
3
1
2
2
1
5
2
2
2
2
I
3
2
2
1
5
2
2
2
3
5
1
3
2
4
1
3
2
3
2
2
2
2
1
1
2
1
2
2
3
2
2
4
2
9
2
2
1
4
1
3
1
1
2
3
f)
4
1
3
2
3
4
2
2
2
2
2
1
Line.
Cotton goods (commission).
Cotton goods (jobbers and importers).
Cotton goods (manufacturers—from raw material).
Cotton warp.
Crates and boxes.
Creamery.
Crockery, glassware, and china (jobbers).
Crockery, glassware, and china (manufacturers).
Crude rubber.
Cuffs, shirts, and collars.
Curled hair, glue, and gelatine.
Cutlery, ammunition, and hardware.
Diamonds.
Doors, blinds, planing mills, and sash.
Draperies.
Dresses and skirts.
Drugs and medicinal oils.
Dry goods.
Dry goods (commission).
Dyeing (yarns and furs).
Eggs, butter, and cheese.
Electric and gas fixtures.
Electrical and telephone supplies.
Embroideries and laces.
Enamel ware and tinware.
Fancy groceries, canned goods, and grocers' sundries.
Feathers and flowers.
Feed, hay, grain, and flour (jobbers).
Fertilizers.
Fish and meats.
Fishing tackle, sporting goods, guns, and hammocks.
Floor coverings and carpets (manufacturers).
Floor coverings and carpets (jobbers).
Florists and nurserymen.
Flour, feed, hay, and grain (jobbers).
Flour and grist mills.
Flowers and feathers.
Foundry, iron, steel, heavy hardware, and car wheels.
Fruits, produce, commission, and provisions.
Furnaces, boilers, stoves, and heating appliances.
Furniture.
Furs.
Fuel, coal, and ice.
Gas and electric fixtures.
Gelatine, glue, and curled hair.
G eneral merchandise.
Glass (manufacturers).
Glassware, china, and crockery (jobbers).
Glassware, china, and crockery (manufacturers).
Gloves and pocketbooks (jobbers).
Gloves and pocketbooks (manufacturers).
Glue, gelatine, and curled hair.
Grain, flour, feed, and hay (jobbers).
Grates and mantels.
Grease, soap, and candles.
Grist and flour mills.
Groceries.
Grocers' sundries, fancy groceries, and canned goods.
Guns, hammocks, fishing tackle, and sporting goods.
Hammocks, fishing tackle, sporting goods, and guns.
Hardware, cutlery, and ammunition.
Hardware (heavy), car wheels, foundry, iron, and steel.
Harness and saddlery.
Hats, caps, and straw goods.
Hay, grain, flour, and feed (jobbers).
Heating appliances, furnaces, boilers, and stoves.
Heavy hardware, car wheels, foundry, iron, and steel.
Hides and skins.
Hops.
Hosiery, knit goods, and underwear (jobbers).
Hosiery, knit goods, and underwear, manufacturers (selling to
jobbers only).
Hosiery, knit goods, and underwear, manufacturers (selling to
jobbers and dealers).
Ice, fuel, and coal.
Ink, manufacturers.
Iron, steel, heavy hardware, car wheels, and foundry.
Jewelry and mounted goods.
Junk and scrap iron.
Knit goods, underwear, and hosiery (jobbers).
Knit goods, underwear, and hosiery, manufacturers (selling to
jobbers only).
Knit goods, underwear, and hosiery, manufacturers (selling to
jobbers and dealers).
Laces and embroideries.
Ladies
7
and children's clothing.
Leaf tobacco.
Leather.
Leather belting, machinery, and machine supplies.
Leather novelties.
Lime, plaster, terra cotta, building and roofing materials, sand,
brick, and cement.
Linens and linen importers.
Linoleum (manufacturers).
CLASSIFICATION OF BUSINESS LINES—-Continued.
Group.
3
Line.
Linoleum Clobbers).
.1. Lithographer.-;, advertising, books, printing, and stationery.
2 Lumber and shingle mills.
2
2
Lumber and shingles (wholesalers).
Machine supplies,leather belting:, and machinery.
2
!
Machinery,"machine supplies, arid leather belting.
1 Malting and inalstcrs.
2
2
J.
5
4
4
2
4
2
4
1
1
Mantels and grates.
Meats and fish.
Medicinal oils and drugs.
.Medicine, patent.
Men's and boys' clothing.
Men's furnishings.
Metals, copper and brass.
Millinorv.
MineralVaters and soft drinks (manufacturers).
Mineral waters and soft drinks (jobbers).
Mirrors.
Molasses, sugar, and rice.
1 • .Molding and picture frames.
3 : Mounted goods and jewelry.
2
4
4
2
Musical instruments, organs, and pianos.
Neckwear.
Notions.
Novelties (leather).
3 ! Novelties and toys.
2 Nurserymen and florists.
] Oils (mineral and refined).
1
2
4
2
4
1
f>
1.
2
Optical goods and surgical instruments.
Organs, pianos, and musical instruments.
Overalls.
Pack i n sr-h oi ise prod nets.
Paints,'"varnish, and vegetable oils.
Pants.
Paper.
Paper bags.
Patent medicines.
Peanuts.
Pianos, musical instruments, and organs.
2 Pickles'.
1 Picture frames and moldings.
2
2
1
4
3
Planing mills, sash, doors, and blinds.
Plants and seeds.
Plaster, terra cotta, building and roofing materials, sand,
brick, cement, and. lime.
Plumbers' supplies and plumbing.
Plush goods, velvets, and silks.
Pocketbooks and cloves (jobbers).
2 Pocketbooks and gloves (manufacturers).
1 : Printing, stationery, lithographers, advertising, and books.
2 ! Produce, commission, provisions, and fruits.
2
\
3
2
Provisions, produce, commission, and fruits.
Railroad supplies.
Refrigerators.
Ribbons.
Rice, molasses, and sugar.
Roofing and building materials, sand, brick, cement, lime,
nln.stor. and terra cotta.
1 i Rubber (crude).
2 i "Rubber iroods.
4 Rnbbor tires.
2 i Saddlery and harness..
2 Sand, brick, cement, lime, plaster, terra cotta, building and
roo finer materials.
2
0
2
Sash, doors, blinds, and planing mills.
Scrap iron and junk.
Seeds and plants.
2 i Shingle and lumber mills.
2 Shiniiles and lumber (wholesalers).
4
4
3
Shirts, collars, and cufl's.
Shoes and boots (jobbers).
Shoes and boots (manufacturers).
4 Silk (raw).
2
4
1
2
Silks, velvets, and plush goods.
Skins and hides.
Skirts and dresses.
Soap, candles, and grease.
Soft drinks and mineral waters (manufacturers).
4 Soft drinks and mineral waters (jobbers).
2 Spices, teas, and coffee.
2
1
2
3
2
4
1
3
Sporting goods, guns, hammocks, and fishing tackle.
Stationery, lithographers, advertising, books, and printing.
Steel, heavy hardware, car wheels, foundry, and iron.
Store fixtures. ' •
Stoves, heating appliances, furnaces, and boilers.
Straw goods, hats, and caps.
Sugar, rice, and molasses.
Suits and cloaks.
1 '; Surgical instruments and optical goods.
4 Suspenders and webbing.
4 Tailors' trimmings.
2 Tanners.
2
1
Teas, coffee, and spices.
Telephone and electrical supplies.
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Federal Reserve Bank of St. Louis
June 1922
678 FEDERAL RESERVE BULLETIN. JUNE, 1922.
CLASSIFICATION OP BUSINESS LINES- Continued.
Group. Lino.
1 Tents and awnings.
2 Terra cotta, building and roofing materials, sand, brick,
cement, lime, and plaster.
4 Thread.
2 Tin ware and enamel ware.
4 Tires (rubber).
4 Tobacco (leaf).
3 Tobacco and cigars (jobbers and manufacturers).
1 Tool manufacturers.
3 Toys a rid novel 1 ies.
4 Trunks and bags.
1 T wi ne an d cord age.
4 Umbrellas and canes.
1 Undertakers' supplies and coffins.
4 Underwear, knit goods, and hosiery (jobbers). /
1 Underwear, knit goods, and hosiery, manufacturers (selling
to jobbers only).
3 Underwear, knit goods, and hosiery, manufacturers (selling
to jobbers and dealers).
2 Upholstery and bedding.
2 Varnish, vegetable oils, and pain Is.
2 Vegetable oils, paints, and varnish.
4 Velvets, plush goods, and silks.
3 Veneer.
5 Vinegar.
2 Wagons and carriages.
3 Waists.
3 : Wall paper, window shades, and bronze powder.
2 . Warp (cotton).
3 Waste and wool.
4 Webbing and. suspenders.
1 Willowware and woodenwarc.
3 Window shades, bronze powder, and wall paper.
2
;
Wire and woven wire specialties.
1 j Woodcrnvare and willow ware.
3 I Wool and waste.
4 • Woolens (commission).
5 ' Woolens (jobbers and importers).
4 Woolens (manufacturers).
2 Woolens, manufacturers (for men's wear exclusively).
2 Woven wire specialties and wire.
2 Yarns, cotton, or worsted (manufacturers).
4 Yarns, woolen (manufacturers).
4 Yarns (jobbers).
GENOA FINANCIAL COMMISSION REPORT.
The following is the complete text of the
report of the Financial Commission of the
Genoa Conference, of which Sir Robert Home,
the British Chancellor of the Exchequer, was
chairman:
A. Resolution adopted by the Financial Commission on
April 20, 1922:
That this commission having received the reports of the
subcommissions on currency and on exchange, transmits
them to the conference and recommends to the conference
the following resolutions for adoption:
I. CURRENCY.
Resolution 1. The essential requisite for the economic
reconstruction of Europe is the achievement by each
country of stability in the value of its currency.
Resolution 2. Banks, and especially banks of issue,
should be free from political pressure, and should be con-
ducted solely on lines of prudent finance. In countries
where there"-is no central bank of issue one should be
established.
Resolution 3. Measures of currency reform will be facili-
tated if the practice of continuous cooperation among
central banks of issue or banks regulating credit policy in
the several countries can be developed. Such cooperation
of central banks, not necessarily confined to Europe, would
provide opportunities of coordinating their policy without
hampering the freedom of several banks. It is suggested
that an early meeting of representatives of central banks
should be held with a view to considering how best to give
effect to this recommendation.
Resolution 4. It is desirable that all European currencies
should be based upon a common standard;
Resolution 5. Gold is the only common standard which
all European countries could at present agree to adopt.
Resolution 6. It is in the general interest that European
Governments should declare now that the establishment
of a gold standard is their ultimate object, and should
agree on the program by way of which they intend to
achieve it-
Resolution 7. So long as there is a deficiency in the
annual budget of the State which is met by the creation
of fiduciary
1
money or bank credits, no currency reform is
possible and no approach to the establishment of the %old
standard can be made. The most important reform of all
must therefore be the balancing of the annual expenditure
of the State without the creation of fresh credits unrepre-
sented by new.assets. The balancing of the budget re-
quires adequate taxation, but if government expenditure
is so high as to drive taxation to a point beyond what can
be paid out of the income of the country, the taxation
itself may still lead to inflation. The reduction of govern-
ment expendi lure is the true remedy. The balanting of th e
budget will go Mr to remedy an adverse balance of external
payment by reducing internal consumption. But it is rec-
ognized that in the cases of some countries the adverse
balance is such as to render the attainment of equilibrium
in the budget difficult without the assistance in addition
of an external loan. Without such a loan that comparative
stability in the currency upon which the balancing of the
budget by the means indicated above largely depends may
be unattainable.
Resolution 8. The next step will be to determine and
fix the gold value of the monetary unit. This step can
only be taken in each country when the economic circum-
stances permit; for the country will then have to decide
the question whether to adopt the old gold parity or a new
parity approximating to the exchange value of the mone-
tary unit at the time.
Resolution 9. These steps might by themselves suffice to
establish a gold standard, but its successful maintenance
would be materially promoted, not only by the proposed
collaboration of central banks, but by an international
convention to be adopted at a suitable time. The purpose
of the convention would be to centralize and coordinate
the demand for gold, and so to avoid those wide fluctua-
tions in the purchasing power of gold which might other-
wise result from the simultaneous and competitive efforts
of a number of countries to secure metallic reserves. The
convention should embody some means of economizing the
use of gold by maintaining reserves in the form of foreign
balances, such, for example, as the gold-exchange standard
or an international clearing system.
Resolution 10. It is not essential that the membership of
the international convention contemplated in the preced-
ing resolution should be universal even in Europe; but the
wider it is the greater will be the prospect of success.
Nevertheless", if the participating countries and the
United States are to use the same monetary standard, no
scheme for stabilizing the purchasing power of the mone-
tary unit can be fully effective without coordination of
policy between Europe and the United States, whose
cooperation, therefore, should be invited.
Resolution 11. It is desirable that the following pro-
posals, to form the basis of the international convention
contemplated in Resolution 9, be submitted for the con-
sideration of the meeting of central banks suggested in
Resolution 3:
1. The Governments of the participating countries de-
clare that the restoration of a gold standard is their ulti-
mate object, and they agree to carry out, as rapidly as
may be in their power, the following program:
(a) In order to gain effective control of its own currency
each Government must meet its annual expenditure with
out resorting to the creation of fiduciary money or bank
credits for the purpose.
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June 1922

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