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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 15 Cleveland, Ohio, April 1, 1933 Changes in trade and industry in the fourth district and the United States in the month ended March 25 were largely a result of the unprecedented financial develop ments in the period. Local business, however, felt the effect of the curtailment of credit facilities somewhat earlier than in other sections of the country because the Michigan bank holiday, which was declared on the 14th of February, was partly responsible for the reductions in the automobile assembly industry. This in turn was soon reflected in a disappearance of orders or cancellations of releases for materials, parts, etc., a large share of which is supplied by manufacturers located in this district. The restrictions upon deposit withdrawals, adopted by most banks of the fourth district beginning the 27th of Feb ruary, caused a further contraction in activity, and the complete banking holiday declared by the President, start ing March 6, resulted in an almost complete cessation of buying. The somewhat limited information at hand covering March operations in various lines of the district indi cates, that, as banks were permitted to open after the 13th of March, the number of inquiries and orders re ceived increased sharply and operations at many plants were stepped up to the levels prevailing prior to the holi day. The upward movement of most commodity prices in and immediately following the bank holiday pe riod, and the present low level of manufactured stocks no doubt were factors partly responsible for the increased buying. In this connection the accompanying chart, showing an index of manufactured commodity stocks, seasonally adjusted, prepared from data compiled by the Department of Commerce, is enlightening. This index includes stocks of 34 important manufactured com modities for which figures are available at regular inter vals. In January this adjusted index was 97.7 per cent of the monthly average of the three years 1923-1925, the lowest level since early 1923, and about 23 per cent be low the peak of late 1930. In the steel industry daily average production in Feb ruary increased slightly more than the usual seasonal amount, but operations in the first half of March dropped to a level only slightly above the low point of the summer of 1932. A rather sharp recovery, particularly in the centers manufacturing automobile steel, was reported in the third week of the month. Coal production in January and February was greater No. 4 in this district than in the same months last year, but a contraction was experienced in the first half of March. The number of inquiries increased in the third week, but few actual sales were reported. Shoe and clothing production was quite well-maintained in February and early March, most plants being engaged in the production of spring goods. Shoe factories in this district made 12 per cent more shoes in February than in the corresponding period of 1932. Life insurance sales continue to lag behind last year by about 20 per cent, and postal receipts were down 12 per cent in February at nine large centers despite the fact that a higher postage rate prevails now than a year ago. Bank debits to individual accounts in February at 24 cities of the district were 14.6 per cent behind the same period of 1932, the smaller drop than was shown in Jan uary being due to the large withdrawals in the latter part of the month. Commercial failures in this district in February num bered 200, compared with 256 in the corresponding month of 1932. The reduction of 22 per cent was about the same as was reported for January. Liabilities of the de faulting concerns were down sharply, being 40 per cent smaller than a year ago. In the retail field, the dollar value of department store sales in February was up slightly more than seasonally from the preceding month, but was still 26 per cent be low the same month of 1932. W holesale sales in the four reporting lines showed larger reductions in February of Cleveland. 2 THE MONTHLY BUSINESS REVIEW from the corresponding month of 1932 than were re ruary, though a few banks continued to pay on demand. ported in January. Both retail and wholesale trade were In order that the hardship resulting from these restric quite sharply curtailed in the first part of March. tions might be lessened somewhat, banks generally ac cepted new deposits which were made payable in full on FINANCIAL demand, such deposits being kept in cash or invested Financial developments in the past month have been in Government securities. more far-reaching in their effects and have occurred with As public apprehension increased and spread to other greater rapidity than in any similar period for which in parts of the country, and the demand for gold for hoard formation is available. Between February 14 and March ing from the reserve banks assumed unusual proportions, 4, disbursements of currency by the Federal Reserve it was found necessary to declare a national bank holi Bank of Cleveland, as shown on the accompanying chart, day. When banks were licensed to reopen, beginning exceeded receipts every day but one, indicating that banks March 13, (by the Secretary of the Treasury if they were in this district were being called upon for more and members of the Federal Reserve System, and by the State more cash during that period. The decline in the daily banking departments if they were state figures following the 27th was due to limitations placed banks) for 100 per cent operations withnon-member the exception on withdrawals by banks throughout the district. Ship the restrictions of the President’s Executive Order of of ments on March 4 exceeded receipts by almost $35,000,000 March 10, the flow of currency was entirely reversed and and money forwarded to banks in this district in the bank deposits were sharply increased. period February 14 to and including March 4 exceeded So far as the fourth district was concerned, up to and receipts in the same period by $131,756,000. During the bank holiday period the daily net change was purely nomi including March 25, 469 member banks of the Federal nal, but as banks were granted licenses to reopen the Reserve System, out of a total of 631 were licensed to flow of currency was completely reversed and the excess reopen 100 per cent. Non-member state banks licensed in of receipts over shipments (shown above the line) has this district numbered 579, according to the best reports averaged over $6,000,000 a day since the 13th of March, obtainable, out of approximately 780 non-member state banks located in this district. Many of the national and between the 13th and 25th totaled $74,277,000. banks not licensed have had conservators appointed for The financial situation became acute in this district and in the case of several member banks reorganiza somewiiat earlier than in some other sections of the coun them try because of the drain on banks in principal cities of tions plans are under consideration. The effects of many of these changes are clearly dis the district to provide funds for business in Michigan where a bank holiday had been declared on February 14, cernible in the condition figures of the Federal Reserve and because of the transfer of large commercial accounts Bank of Cleveland, weekly fluctuations in which are shown to other parts of the country, chiefly New York. In graphically on the bottom of the next page. Chart I shows weekly changes in total gold reserves and dividual withdrawals also were quite heavy in the latter part of February and savings deposits at selected banks total earning assets so far this year. Fluctuations in throughout Ohio were 6.1 per cent smaller at the end this bank’s gold reserves occur largely through the inter district movement of funds as a result of check payments, of February than at the beginning of the month. Since the largest withdrawals occurred in commercial transfers, etc., which are settled through the gold settle accounts which can be transferred with ease from one ment fund. For several weeks prior to February 22 section of the country to another it was thought wise, for changes in gold reserves were of minor significance. The the protection of the depositors, to restrict all with gain in the week ended March 1 was largely a result drawals to a certain per cent of the total amount in the of transfers for the Government’s account. The $44,account; such limitations were placed on withdrawals by 000,000 net loss in gold reserves in the following week most banks in this district in the closing days of Feb- was mainly through gold transfers and in part represent ed the rediscount of $25,000,000 for the Federal Reserve Bank of JvTew York and the purchase of $40,000,000 in 201---Government securities which also resulted in a transfer of gold to the account of the New York bank. In addi tion, however, rather heavy gold withdrawals by individ uals at the Federal Reserve Bank of Cleveland and its branches by exchange for currency occurred, and gold "SI" “ " i j | reserves of this bank were reduced to $226,383,000 by March 8. In the two weeks ended March 22 gold re serves expanded $110,000,000, to the highest level since 1931. The bulk of the increase again was through trans -20 fers as rediscounts were cancelled and $40,000,000 in Government securities were sold. But the return flow of -3 0 gold from individuals depositing through member banks and directly with the reserve bank, which followed the passage of the Emergency Act of March 9, was sizable. -4 0 Between March 9 and March 25 gold coin held by the reserve bank and branches increased 98.5 per cent and Daily excess of cash receipts over disbursements, or vice versa, of the Federal Reserve Bank of Cleveland and branches, February 14 to March on the latest date such holdings were almost double the 25, 1933. MILLI0N5 OF DOLLARS II 11 F EB .Illlllll.ll MAR THE MONTHLY BUSINESS REVIEW 3 average of the past several years. Between March 8 and 1931, but they included about $12,000,000 in special ac 22 the Federal Reserve System gained over $500,000,000 counts representing segregated deposits at member banks. in gold from individual and other sources. The reserve ratio of gold reserves to note and deposit Total bills and securities of this bank increased at an liabilities combined dropped from 56 per cent to 41 per almost unprecedented rate between February 21 and cent between February 21 and March 8, but increased to March 8, the advance being $141,000,000. At $371,- 60 per cent by March 22 as gold reserves increased sharp 325,000, total earning assets were $67,000,000 above the ly and notes were retired at a rapid rate, particularly in previous record high point reached in 1920. The in the latest week. crease, as shown on Chart II which shows the division of earning assets into the three principal classes, was MANUFACTURING, MINING largely in discounts for member banks in this district. As both demand and time deposits at member banks were Iron and Viewing the iron and steel situation sharply reduced the need for cash at the individual banks chronologically, the year opened with increased. Member bank reserve accounts were reduced Steel capacity about 12 per cent; sharply in payment for Federal reserve notes; then to demand that flowed chieflyengaged from the indus build up their reserve accounts banks were obliged to try and miscellaneous consumers liftedautomotive activity to 19 increase their discounts, which jumped from $46,000,000 per cent by the last week of January; no support being to $119,000,000 in two weeks. Following the reopening forthcoming from the railroads or the building indus of licensed banks, as cash was returned and deposits in try, this rate hung at 19 to 20 per cent through the first creased, discounts dropped sharply to $60,000,000. three weeks of February; then with the declaration of This bank’s holdings of United States Government se the bank holiday in late February, and the closing curities were increased $40,000,000 temporarily in the of allState banks in early March, automotive requirements de week ended March 8, but they were reduced to $176,- clined perceptibly until iron and steel activity came to 000,000 by March 22. rest at 1 3 ^ per cent the week ended March 11. In the As previously mentioned Federal reserve notes in cir week ended March 18in recovery to 15 per cent followed, culation, shown on Chart III, increased sharply, an ad with evidence of continuing gains. vance of $77,000,000 occurring between February 21 Because the iron and steel industry of the fourth dis and March 1 as member banks anticipated large indi vidual cash withdrawals and thus increased their cash trict is so dependent upon automotive orders the virtual on hand far beyond normal levels. Circulation was fur collapse of automobile production was felt more severely ther expanded by almost $40,000,000 in the first half of locally than in other districts. During the week ended March to an all-time record level of $424,000,000. In March 11 practically all releases were suspended, but the week ended March 22 notes of this bank in circula their reinstatement the following week was an indica tion declined $47,000,000 as deposits at licensed banks tion of improvement. Immediately following the bank holiday greatly increased increased and the need for large currency supplies no longer existed. On the latest date there was $619,000 interest in their forward requirements was manifested of the new Federal reserve bank notes of this bank in by important consumers, many seeking coverage to Octo circulation. In addition to retiring currency and thus ber 1. In most cases this was refused. The history being able to reduce discounts, member banks increased of past depressions is that prices of iron and steel do their reserve deposits from a low of $107,000,000 on not rise appreciably until about seven months after the March 1 to $152,000,000 on March 22. At the latter low point of production has been passed. As yet the level, member bank reserves were higher than since late low of August, 1932, has not been equalled. MILLIONS OF DOLLARS MILLIONS OF DOLLARS 1 MILLIONS OF Weekly changes in condition figures of the Federal Reserve Bank of Cleveland. 4 THE MONTHLY BUSINESS REVIEW Indicating their own confidence in the situation, ef forts at stabilization of prices, especially in the flat-rolled lines, were seriously pursued in March. Otherwise, the only advances registered were in scrap, which is always volatile and sometimes barometric. Typical of the price situation, the iron and steel composite of the magazine Steel opened the year at $28.83, declined to a low of $28.27 in the week ended February 11, then recovered to $28.35 in the week ended March 18. The February daily coke pig iron rate of 19,752 gross tons compared with 18,348 tons in January and 33,122 tons in February, 1932. The two-month total of pig iron for 1933 is 1,121,852 tons, compared wnth 1,931,987 tons for January and February, 1932. The February daily ingot rate of 44,378 gross tons contrasted with 38,704 tons in January and 58,308 tons last February. The twomonth total for steel ingots is 2,071,377 tons, against 2,917,160 tons a year ago. Coal Although coal production in the entire country in February was slightly below output in the same month of 1932, pro duction of fourth district mines in the latest month was 2.9 per cent ahead of a year ago and only slightly under January’s output. In the past ten years the average January-February change was a decline of 10 per cent. A sharp curtailment in mine operations occurred in the last week of February and early March, but some recov ery was evident in the last half of the month as busi ness resumed. In the first two months of the year bituminous coal production in this district amounted to 19,930,000 tons, an increase of 3.6 per cent from the corresponding period of 1932., In the entire country coal production was slightly smaller in January and February than in the same months last year. Coal prices have not changed in the past few weeks and continue at very low levels. In this connection the Supreme Court's approval of the marketing association of coal dealers, of which many participants are local producers, was regarded in the trade as a constructive step, particularly so far as it affects prices. Announce ment of the formation of similar organizations in other sections of the fourth district followed the Court’s de cision. The main weakness these organizations are at tempting to overcome is the destructive competition which has resulted from the fact that production capacity is far in excess of current demands and has been for some time. According to reports, an unusual number of inquiries for future coal requirements were received in the latter part of March, but few actual orders have been placed. Stocks of coal above ground show little change from a month ago. for that season of the year. This had a very pronounced effect on many of the most important lines of business in this district. Operations in the steel industry, limited as they were, had been maintained chiefly by releases from the automobile industry. Tire, glass, parts, ac cessory, etc., manufacturers of this section likewise were affected by the reduction at the assembly plants. Despite the curtailment in the latter part of February, output for the entire month, according to the Depart ment of Commerce, was 106,814 units, a drop of nine per cent from last year, and which compared with 130,114 cars and trucks turned out in January. The falling-off in February almost nullified the gain shown in January (compared with the first month of 1932) and output for the two-month period was only 0.1 per cent ahead of the same interval of the preceding year. Passenger car production in February totaled 91,492 units, a reduction of 28 per cent from last year. Truck production, at 15,322 units, was down 34 per cent from February, 1932. Retail buying ceased almost entirely in early March and, as a result, manufacturers curtailed schedules until only 10,633 cars and trucks were assembled in the week ended March 18, according to Cram's reports. The An nalist seasonally adjusted index dropped to 10.8 per cent of the 1927-29 base period, a new low level. The de cline from the December peak in this index has been al most continuous, because normally in the first quarter of the year production of cars is expanding in anticipa tion of increased spring sales. So far this year the up turn was confined to a few weeks and recently output has been showing a downward trend. Most rubber and tire plants in this district continued to operate on a very restricted basis in February and cur tailed production even further in early March, but ac tivity was increased in the third week in several in stances as a result of the improved confidence and feel ing which followed the bank reopenings. Difficulties re garding prices are still evident, further reductions be ing announced by some companies in the last half of March. Employment at 20 factories in this district in Feb ruary was 59 per cent of the 1926 monthly average, un changed from January, but down ten per cent from last year. This does not reflect the fact that many plants are operating only two or three days a week and are thus spreading the available work among a greater number of workers. Final tire production figures for January were 14.5 per cent above those for December, but, compared with the opening month of 1932, a reduction of 35 per cent was shown. Shipments in January exceeded production so stocks were reduced, but in terms of current con Automobiles The banking holiday affected the prin that sumption, they were still above a year ago. cipal automobile centers somewhat The price of crude rubber firmed somewhat along with earlier than other parts of the country and production schedules were curtailed in February and gains in other commodities, but at three cents a pound in dropped to unusually low levels in the first half of March late March, it was still below the cost of production. Im Rubber, Tires THE MONTHLY BUSINESS REVIEW 6 Most of the smaller lines of business ports of crude rubber in February dropped sharply to Other 18,875 long tons, compared with 31,110 tons in January, Manufacturing in the fourth district were affected by the bank holiday, and postponement of and 30,546 tons in February, 1932. Consumption of rub ber by factories in this country was 20,462 long tons in shipments, or cancellations of orders were quite general. the latest month, compared with 30,012 tons a year ago. The resumption of more normal credit conditions stimulated Crude rubber stocks dropped slightly in February, but at buying generally in mid-March and operations at most the month-end were still 22.2 per cent above the same factories were stepped up at least to the levels prevailing before the banking disturbances became general. date of 1932. Auto parts, Accessories. Because the bank holiday start Clothing, The effect of the bank holiday on the ed in Michigan over two weeks before it became nation Textiles clothing and textile industry was first wide, operations were curtailed in the automobile industry evident in the cancellation of many or somewhat earlier than in others. Granting of a receivership ders placed for spring delivery. This was a natural re to the largest manufacturer of cars located in the fourth action in view of the fact that retail trade was very much district also affected operations in this field. As a re depressed; people were not buying when they did not sult employment at parts and accessory plants declined know their exact financial situation. This, however, three per cent between January 15 and February 15 and was quickly followed by a more favorable buying move was further reduced in the ensuing weeks. The average ment on the part of retailers in an effort to protect them January-February change in the preceding five years was selves against rising prices. Advance buying in a volume an increase of six per cent in the number of men employed. not seen for many months was reported in mid-March. Many plants closed down completely in early March as Advancing prices appeared first in the raw material mar cancellation or curtailment of orders developed, but by kets, particularly cotton; with the Exchange closed raw the third week of March, an anticipated increase in the cotton, in over-the-counter sales, advanced almost 35 per assemblying of cars was indicated at parts and accessory cent. Wool and silk prices were higher after the regular plants in this district which called back their employees selling agencies reopened than prior to the holiday. Most and stepped up production quite sharply. prices receded slightly in the closing days of the month. Ceramics. The china and pottery industry was only This, of course, is normally one of the busiest seasons slightly affected by the general financial situation and of the year for clothing manufacturers, and the employ in the third of March was operating close to sixty ment index of the Ohio State Bureau of Business Research, per cent of week capacity. Employment increased nine per at 91 per cent of the 1926 monthly average in February, cent in February, compared an average change of was five per cent higher than in January and three per five per cent in the precedingwith five years. According to cent above a year ago. The number employed at men’s reports, orders were received in a quite surprising volume clothing factories was up four per cent in February from during the bank holiday, though, of course, the preceding month, but was down one per cent from were very slow. Activity at brick and tile plantscollections increased last year. slightly, but it was still quite limited. Manufacturers reported stocks of finished goods as be ing very satisfactory for this season of the year, but ex Glass. Demand for flat glass in late February and the pressed considerable anxiety regarding collections and the first part of March was limited, excluding the rush orders credit ratings of their customers. from the West, but orders for containers increased sharply. Production of wool textiles and cotton goods proceeded The employment index of the Ohio State Bureau of Busi almost uninterruptedly during the bank holiday and the ness Research was 131 per cent of the 1926 monthly av latter, according to the Annalist index, touched a new high erage in February, approximately the same as a year ago; the increase from January was slightly less than sea for this year in mid-March. sonal. Shoes Production of footwear at fourth dis Electrical Supplies. Orders for electrical supplies and trict factories increased quite sharply in equipment fell off in February and early March, but a February, the 32.5 per cent expansion definite improvement was reported in the third week of being considerably more than seasonal. It was the most the month. Employment in February at 28 reporting extensive increase for this time of year on record, the concerns was 86 per cent of the 1926 monthly average, average change in the past ten years being an expansion of a reduction of 21 per cent from a year ago. about eight per cent. Compared with a year ago, output Machinery, Machine Tools. Demand for machinery and was up 12.3 per cent in February and 10.1 per cent in the first two months. Local plants turned out more shoes tools was quite limited in late February and early March. in February than in any corresponding period since 1929. Prices have remained steady and inventories of tools are Activity at factories was temporarily interrupted in early very low. March because incoming orders were very much curtailed. Paint. The major recent development in the paint in Stocks are low, however, so that any change in buying dustry was the advance in raw material prices. Pig lead should be reflected in factory operations. has risen $7.00 a ton and zinc has advanced $12.00 a ton Raw hide prices advanced sharply following the resump from its low on February 17. This has caused increased tion of trading on the Exchange, though most activity was buying of raw materials. Sales of finished paint products fell off quite sharply in the past four weeks. in futures. THE MONTHLY BUSINESS REVIEW 6 Paper. Indications of increasing prices and a better demand for paper, particularly the cheaper grades, were reported in mid-March. The number employed in Febru ary at ten reporting factories was 87 per cent of the 1926 monthly average, a drop of nine per cent from a year ago. TRADE Retail Dollar sales at reporting department stores increased in February, the ex pansion being slightly more than the average January-February change in past years. The sea sonally adjusted index rose from 54.1 per cent of the 1923-1925 monthly average in January to 54.7 per cent. This increase occurred despite the fact that retail prices of department store goods worked lower in the month, a drop of 1.7 per cent being shown by Fairchild's index, and general industrial activity in this district was affected by the curtailment of automobile material orders in the lat ter part of the period. Compared wih a year ago, sales in February were down 25.9 per cent in the entire district, the reductions in the individual cities ranging from 21 per cent at Toledo, to 28 per cent at Pittsburgh, and 32 per cent at W heeling. In January the decline in the entire district from the first month of 1932 was 26.7 per cent. Basement sales were down 23.4 per cent from last year and the ratio of all basement sales to total sales at 30 stores was 18.2 per cent in February compared with 17.7 per cent a year ago. The ratio of credit to total sales was 55.3 per cent in February, a reduction of 3.7 per cent from a year ago. Installment sales increased quite sharply from the preceding month, chiefly because of the special furniture sales in the period. The dollar value of stocks at department stores in creased two per cent in February, a less-than-seasonal ad vance, and the adjusted index dropped from 53.9 per cent of the 192 3-1925 monthly average to 52.4 per cent. Collections held up quite well in February, the ratio of payments received during the period to the total ac counts receivable at the beginning of the month being 29.1 per cent, a reduction of only two per cent from a year ago. Retail furniture sales at 44 reporting furniture stores throughout the district were 37.6 per cent smaller than a year ago and in the first two months were down 32.5 per cent. Sales reported for the furniture departments of •department stores were down 36 per cent from last year. Retail chain drug store sales fell off sharply in Feb ruary, a reduction of 26 per cent from a year ago be ing reported. For the first two months a decline of 18 per cent was indicated. Chain grocery sales were down 5.6 per cent in February and 7.7 per cent in the first two months from similar periods of 1932. W holesale Sales in three of the four reporting lines of wholesale trade were smaller in Feb ruary than in January, and the per cent declines in all lines from February, 1932, were larger than the reductions in January sales compared with a year ago. Combined sales were only 40 per cent of the monthly average of the three years 1923-1925, a drop of almost 25 per cent from the same month last year. In the in dividual lines wholesale grocery sales were down 23 per cent in February from a year ago and off 19.5 per cent in the first two months. Hardware sales were down 24 and 21 per cent, respectively, in the same periods. Drug sales, which for most of the depression held up quite well, were down 25 per cent in February and 18 per cent in the twomonth period from similar intervals of 1932. And dry goods firms, whose dollar sales have been very sharply reduced partly because of the decline in prices of com modities entering into the manufacture of these products, reported a reduction in sales of 29 per cent in February and of 23 per cent for the period since the beginning of the year. According to reports, a further reduction in all lines of wholesale trade occurred in the first part of March, but in the latter part of the month increased activity was ap parent. BUILDING The dollar value of contracts awarded in this district in February declined quite sharply from January, though usually there is little change between the two months. Compared with the monthly average of the three years 192 3-1925, building activity amounted to only 7.6 per cent with residential building equaling 5.2 per cent of that average and non-residential 9.0 per cent. For the first two months of this year total awards were valued at $7,708,000, a reduction from the same period of 1932 of 44 per cent. Residential building contracts awarded amounted to $1,869,000 in the same period, a drop of 52 per cent from the first two months last year. The general let-down in business in early March was not very noticeable in the construction industry in this district, though in most years there is an increase in operations, which, however, is somewhat dependent on weather conditions. The value of contracts awarded in the first two weeks of March was higher than in the same period of February, but about half what it was a year ago. Lumber and building supply dealers reported Febru ary as the worst month on record, but the number of in quiries for materials which developed after the end of the bank holiday was somewhat gratifying. Many dealers and producers are reported to be withdrawing price lists and raising quotations already made. Stocks generally are very low. New construction contemplated in this district is quite scarce; the value of proposed projects reported in Feb ruary was $11,131,300 in this section, compared with $14,771,000 in January, and $14,536,500 in February last year. In the principal cities of the district gains in February from the preceding month were reported at Pittsburgh, Akron, Cleveland, Columbus, Dayton and Toledo, while a reduction was reported for Erie, W heeling, Canton, Cin cinnati and Youngstown. The index of building costs, as compiled by the New York Federal Reserve Bank, was 80 per cent of the 1926 monthly average, unchanged from January. THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics (000 omitted) Fourth District Unless Feb., % change Jan.-Feb., % change Otherwise Specified 1933 from 1932 1933 from 1932 Bank Debits— 24 cities.................. $ 1,367,000 — 14.6 $2,851,000 — 22.8 Savings Deposits— end of month: 27 selected banks, O. & Pa......... $ 599,322 — 9 .0 1,228,9691 — 7.2 Postal Receipts— 9 cities............... $ 2,136 — 12.3 4,491 — 9.2 Life Insurance Sales: Ohio and Pa......................................$ 70,742 — 20.2 145,543 — 21.6 Retail Sales: Department Stores— 53 firm s...$ 9,525 — 25.9 18,853 — 24.2 Wearing Apparel— 11 firms.........$ 448 — 28.3 930 — 28.6 Furniture— 44 firms.......................$ 351 — 37.6 653 — 32.5 Wholesale Sales: Drugs— 13 firms..............................$ 979 — 25.4 2,106 — 18.1 Dry Goods— 10 firms...................$ 630 — 29.0 1,227 — 23.3 Groceries— 33 firms.......................$ 2,484 — 23.1 5,233 — 19.5 Hardware— 14 firms...................... $ 569 — 24.1 1,152 — 21.4 Building Contracts— Residential.$ 899 — 54.5 1,869 — 52.0 — Total........... $ 3,634 — 46.0 7,708 — 43.6 Commercial Failures— Liabilities.$ 5,292 — 39.7 11,243 — 38.9 — N um ber... 2002 — 21.9 4512 — 22.0 Production: Pig Iron, U. S.............................tons 554 — 42.5 1,121 — £2.1 Steel Ingot, U. S...................... tons 1,065 — 27.0 2,071 — 29.0 Automobiles— Pass. C ars..U . S. 91,4922 — 2.8 199,8892 + 3.6 — Trucks...........U. S. 15,3223 — 34.3 37,0392 — 15.5 Bituminous Coal.................... tons 9,897 + 2 .9 19,930 + 6.1 Cement— O., W. Pa., W. Va. Bbls. 166 — 22.8 380 — 17.6 Elec. Power— O., Pa., Ky. k.w.h. 1,0553 — 3.1 ... .... Petroleum— O., Pa., K y...B b ls. 1,7713 — 8.5 .. .... Shoes ....................................... Pairs * + 1 2 .3 * + 1 0 .1 Tires, U. S.........................Casings 1,812s — 34.8 ............................ 1 monthly average 2 actual number 8 January 4 confidential Wholesale and Retail Trade (1933 compared with 1932) Percentage Increase or Decrease SALES SALES STOCKS Feb., Feb., First 2 1933 1933 months D EPARTM ENT STORES (53) — 18.8 — 19.8 — 21.5 A kron.. ....................................................... — 26.3 — 24.4 — 25.1 Cininnati..................................................... — 23.8 — 20.9 — 32.5 Cleveland.................................................... — 18.4 — 24.4 — 22.3 Columbus................................................... — 27.8 — 26.7 — 23.5 Pittsburgh.................................................. — 20.5 — 28.4 — 21.0 Toledo.......................................................... — 32.0 — 26.1 — 20.0 W heeling................................................... — 28.4 — 27.5 — 23.1 Other Cities.............................................. — 25.9 — 24.2 — 24.8 District........................................................ WEARING APPAREL (11) — 23.1 — 12.6 — 19.5 Cincinnati.................................................. . — 36.2 — 31.4 — 25.8 Other Cities.............................................. — 28.3 — 28.6 — 23.9 D istrict........................................................ FUR NITUR E (44) — 30.2 — 36.9 Cincinnati.................................................. . — 31.8 — 30.5 Cleveland................................................... . — 62.1 — 41.3 Columbus................................................... . — 31.1 — 28.5 D ayton........................................................ — 39.9 — 40.8 Toledo.......................................................... — 28.5 — 27.6 Other Cities.............................................. . — 37.6 — 32.5 District........................................................ CHAIN STORES* — 18.0 — 25.7 Drugs— District (4)................................. — 5 .6 — 7.7 Groceries— District (5 )........................... WHOLESALE GROCERIES (33) — 23.3 — 27.3 Akron............................................................ — 26.3 — 22.5 Cleveland..................................................... — 31.4 — 20.2 Erie................................................................ — 14.2 — 14.3 Pittsburgh.................................................... — 30.2 — 26.5 .... Toledo........................................................... — 18.6 — 14.2 Other Cities................................................ — 23.1 — 19.5 — 25 !o District....................................................... . — 23.3 — 18.6 — 29.0 WHOLESALE DRY GOODS (10).. — 18.1 — 25.4 WHOLESALE DRUGS (13)............. — 21.4 — 24.2 WHOLESALE HARDW ARE (14)., *Per individual unit operated. 7 Debits to Individual Accounts (Thousands of Dollars) Year to date Year to date 4 weeks % change Dec. 29, ending Dec. 31, March 22, from 1932 to 1931 to March 19331 1932 March 22, 1933 23, 1932 20,003 — 56.4 104,663 163,724 Butler...................... 4,876 — 13.2 16,469 19,464 Canton..................... 11,783 — 35.6 46,854 59,104 Cincinnati.............. 181,043 — 21.6 648,417 820,907 — 36.6 243,105 1,038,570 1,445,356 70,285 — 24.6 245,784 320,880 Dayton.......... 106,021 20,558 — 53.4 144,088 Erie............... — 54.3 9,435 44,386 71,675 Franklin. 5,784 1,680 — 33.9 9,950 Greensburg. . 2,974 — 40.1 12,160 18,928 Hamilton. . ., 4,357 — 36.0 16,711 24,406 Homestead. . 1,237 — 42.7 4,414 7,652 Lexington... , 10,305 — 22.7 53,619 66,047 Lima............. 3,211 — 58.2 17,948 23,172 Lorain............ 1,611 — 47.2 6,806 10,549 Middletown. 4,222 — 27.1 14,091 18,153 Oil C ity____ 3,938 — 51.3 19,569 27,234 Pittsburgh. ., 435,219 — 7.2 1,427,509 1,775,422 Springfield. ., 7,717 — 39.1 28,418 41,108 Steubenville. 3,191 — 48.0 12,169 19,006 Toledo........... 55,158 — 20.7 198,677 244,784 Warren......... 3,164 — 35.1 11,048 14,280 Wheeling. . . 14,548 — 41.9 66,091 87,036 Youngstown. 16,330 — 29.7 58,531 90,550 Zanesville... , 3,738 — 26.1 13,400 19,045 1,133,688 — 25.0 4,218,109 5,542.520 hat distorted by recent financial developments. % change from 1932 — 36.1 — 15.4 — 20.7 — 21.0 — 28.1 — 23.4 — 26.4 — 38.1 — 41.9 — 35.8 — 31.5 — 42.3 — 18.8 — 22.5 — 35.5 — 22.4 — 28.1 — 19.6 — 30.9 — 36.0 — 18.8 — 22.6 — 24.1 — 35.4 — 29.6 — 23.9 Fourth District Business Indexes (1923-1925 = 100) Feb., Feb., Feb., Feb., Feb., 1933 1932 1931 1930 1929 Bank Debits (24 cities).......................................... 50 59 86 102 122 Commercial Failures (Num ber)......................... 137 175 138 115 114 ” ” (Liabilities)....................... 120 199 161 69 66 Postal Receipts (9 cities)....................................... 82 94 106 119 113 Sales— Life Insurance (Ohio & P a.)................. 85 106 114 152 132 ” — Department Stores (53 firms)................ 45 58 74 82 88 ” Wholesale Drugs (13 firms)....................... 65 87 96 102 107 ” — ” Dry Goods (10 firms).............. 24 34 47 70 79 ” — ” Groceries (33 firms)................. 43 56 67 81 82 ” — ” Hardware (14 firms)................ 28 38 52 75 78 40 53 ” — ” All (70)......................................... 65 81 84 60 ” — Chain Drug (3 firms)**........................... 81 81 76 80 Building Contracts (T o ta l)................................. 8 14 35 76 76 5 ” ” (Residential)......................... 12 29 43 59 Production— Coal (O., W. Pa., E. Ky.)........... 55 53 71 86 95 — Cement (O., W. Pa., W. V a.)... 14 18 63 34 69 ” — Elec. Power (O., Pa., K y.)*. . .. 126 130 151 165 156 96 105 106 128 107 ” — Petroleum (O., Pa., K y.)*........... 95 85 ** — Shoes.................................................... 74 81 101 *January. **Per individual unit operated. Condition of Federal Reserve Banks (In millions of dollars) Federal Reserve Bank Federal Reserve of Cleveland System Mar. 22, Feb. 21, Mar. 23, Mar. 22, Feb. 21, Mar. 22, 1933 1933 1932 1933 1933 1932 Gold Reserves................ 316 241 276 3,192 3,118 3,007 60 46 104 671 327 666 Bills Discounted........... Acceptances.................... 7 8 4 352 174 82 United States Securities 177 177 76 1,864 1,834 835 Total bills and securities 244 231 184 2,893 2,340 1,589 Federal Reserve Notes in Circulation............ 386 306 301 3,916 3,000 2,573 Federal Reserve Bank Notes in Circulation. 1 .. .. 9 Total Deposits.............. 159 146 147 2,155 2,399 1,983 Reserve Ratio................ 59.7 55.8 65.5 55.5 61.2 70.6 THE MONTHLY BUSINESS REVIEW s Summary of National Business Conditions By the Federal Reserve Board Index of industrial production, adjusted for sea sonal variation (1923-1925 average = 100) Latest figure, January, revised, 65, February, 64. Weekly figures (Wednesday) for 12 Federal re serve banks. Latest figures are as of March 22, 1933. RESERVE BANK CSED5T AND FACTORS IN CHANGES Weekly figures, Wednesday series. Latest fig ures are as o f March 22, 1933. The course of business in the latter part of February and the first half of March was largely influenced by the development of a crisis in banking, culminating in the Proclamation on March 6 of a national banking holiday by the President of the United States. Production and distribution of com modities declined by a substantial amount during this period, but showed some increase after banking operations were resumed in the middle of March. Production and Employment Volume of output at factories and mines, which usually increases at this season, showed little change from January to February, and declined considerably in the first half of March. In the steel and automobile indus tries output decreased between the middle of February and the middle of March; subsequently some of the automobile plants which had been closed resumed operations, while activity at steel mills showed little change. In February output at cotton and woolen mills continued at the level prevail ing in January, while at silk mills activity declined. Shoe production in creased by more than the usual seasonal amount. Reports from important industrial states indicate that factory employ ment increased between the middle of January and the middle of February, as is usual at this season. Construction contracts awarded up to March 15 as reported by the F. W. Dodge Corporation, indicate that for the first quarter of the year the total value of contracts will show a considerable decline from the fourth quarter of 1932. Distribution Freight traffic, which usually increases at this season, showed little change from January to February, on a daily average basis, and declined considerably in the first two weeks of March. Department store sales in the country as a whole were at about the same rate in February as in January, but were substantially smaller in areas affected by suspension of banking operations; early in March sales were sharply reduced but with the reopen ing of banks showed some increase. W holesale Prices W holesale commodity prices declined somewhat further in February. In the early part of March the commodity exchanges were closed; when they reopened on March 15 and 16, prices of grains, cotton, silk, nonferrous metals, hides and sugar were substantially above those prevailing at the be ginning of the month; subsequently prices of many of these commodities de clined somewhat. Bank Credit During February member banks in leading cities were subjected to withdrawals of deposits on a large scale, reflecting in part withdrawals of balances by interior banks from their city correspondents, and in part with drawals of currency by the public. As a consequence, net demand deposits of these banks declined by $1,306,000,000 during the month, and their time deposits by $360,000,000. In order to meet these withdrawals the banks reduced their loans by $539,000,000, partly through the sale of ac ceptances to the reserve banks, and their investments by $363,000,000. They also increased considerably their borrowings at the reserve banks. March figures for member banks are incomplete. At the Federal reserve banks the banking crisis manifested itself be tween February 1 and March 4 in a domestic demand for $1,833,000,000 of currency, including about $300,000,000 of gold and gold certificates and in a foreign demand for about $300,000,000 of gold. As a consequence, the reserve ratio of the Federal reserve banks declined from 65.6 per cent to 45.0 per cent. This reflected a loss of $655,000,000 in reserves and an in crease of $1,436,000,000 in Federal reserve note circulation, offset in part by a decrease of $486,000,000 in deposit liabilities. Between March 4 and March 22 there was a return flow to the reserve banks of $558,000,000 of gold coin and gold certificates and of $319,000,000 of other currency, and the reserve ratio advanced to 55.5 per cent. Dis counts for member banks, which had increased to $1,432,000,000 by March 4 declined to $671,000,000 on March 22. Money rates in the open market advanced during the banking crisis, and on the resumption of business after the banking holiday, rates were at considerably higher levels than those pre vailing on March 3. Subsequently rates declined as more funds became available to the market. On March 3, the discount rate of the Federal Re serve Bank of New York was raised from 2 ^ to 3% per cent, and on March 4 there was similar increase at the Federal Reserve Bank of Chicago. The New York reserve bank’s buying rate on bills was raised by successive steps from V2 of 1 per cent on February 26, for bills of the shorter maturities, to 314 per cent cn March 3. On March 13 the rate for these maturities was raised to 3% per cent, subsequently the rate was reduced and on March 22 was 2 per cent.
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