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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. 16 Cleveland, Ohio, April 30, 1934 General business in the fourth district increased in March at a greater than seasonal rate and the upward movement continued in April, despite the fact that in the latter half of the month the strike situation was dis turbing to operations in some fields. The recent increase in the number of interruptions, however, is merely a substantiation o f the fact that general business has im proved considerably, for employees seldom strike so long as operations are contracting and people are being laid off from lack o f orders. But as business improves and men go back to work, labor disturbances usually increase in number as they have recently in an attempt to better working conditions and raise pay rolls. The accompanying chart shows the improvement that has occurred in employment in about 800 Ohio con cerns which report regularly to the Ohio State Uni versity Bureau o f Business Research. In March this index was 87.4 per cent of the 1926 monthly average, higher than at any time in the past three years. From the low point o f 59 in March last year, an improvement of about 48 per cent has been recorded at these companies, part o f which are engaged in construction work. In Pittsburgh the number o f man-hours worked in March (reflecting not only increased employment, but also the number of hours w orked) was 21 per cent ahead o f Feb ruary, 47 per cent greater than in March 1933, and higher than since March 1931. As a result of the nu merous wage advances granted, pay rolls have shown an even larger increase. This has been reflected in retail trade channels. De partment store dollar sales were 72 per cent larger in March in cities of the fourth district than at the time of the bank holiday a year ago when trade for a time was almost at a standstill. Several elements made the gain unusually large, among them being the fact that all preEaster buying was in March this year, whereas much was in April last year, but even allowing for this and seasonal changes, the index o f sales was 76.4 per cent of the 19231925 monthly average, as against 68.8 in February. Compared with 1932, when Easter was in March, sales showed an increase o f 17 per cent, a larger gain than is accounted for by changes in price level. Other lines of wholesale and retail trade also increased. There were only 75 commercial failures reported in this district in March, compared with 182 a year ago, and liabilities of the defaulting concerns were down even No. 4 more sharply. In the first quarter there were 73 per cent fewer failures than in the same period o f 1933. Life insurance sales in Ohio and Pennsylvania in March were larger than in any month since March 1932, and they were nearly equal to the monthly average o f 19231925. In the industrial field the iron and steel and automo bile industries which, so far as this district is concerned, are very interdependent, were responsible fo r the m ajor share of the improvement experienced in March and April. Automobile production in March was 337,000 cars and trucks, according to the Department o f Commerce, the highest since April 1931, and April weekly schedules were such that output was estimated at 400,000 units. A l though retail demand has advanced sharply, the indus try was turning out cars somewhat in excess o f actual sales, partly in anticipation o f interruptions. Parts and accessory, glass and tire factories were operating at high rates in March to build up stocks as well as supply the assembly plants, and releases continued large generally in April. Sales o f machinery and small tools declined in April, the drop being attributed partly to the uncertainty in the general situation. The steel industry, after announcing higher prices for most grades o f steel, was almost deluged with orders placed before the increases became effective. Operat ing rates increased sharply in most centers, a sizable expansion occurring at Pittsburgh where activity in the first quarter was considerably below the average rate for the entire country. Buying was partly in anticipation THE MONTHLY BUSINESS REVIEW 2 o f future needs, but it was quite well distributed among the m ajor users o f steel. Clothing production declined seasonally in early April and demand for ceramic products fell off. Operations o f electrical apparatus and supply plants increased and paint sales expanded seasonally. Building contracts awarded in March in this section were up more than seasonally from the preceding month, but in the first half o f April a falling-off was evident, particularly in the residential field. Bituminous coal production at fourth district mines increased sharply in March to the highest point since October 1930, and output was larger than in any corre sponding month since 1927. Compared with a year ago, an increase o f 75 per cent was reported and the first quarter gain was 38 per cent. Unusually cold weather, increased industrial activity, and an anticipated price ad vance, were factors contributing to the improvement. FINANCIAL Of particular significance was the increase in loans on other than security collateral at the reporting member banks in this district in the fou r weeks ended April 18. Although the gain was slight it was the first indication of a reversal o f the downward trend in these loans evident for many months. Deposits o f member banks also in creased. There was a further contraction in bills discount ed by the reserve banks in the four latest weeks as dis bursements o f Federal funds through many channels continued at a high rate. Payments to farmers through the Agricultural Adjustment Administration, refinancing o f mortgages through the Home Owners’ Loan Corpora tion and Farm Credit agencies which releases frozen funds, opening of Federal Savings and Loan companies to relieve the building and loan situation, the starting of work on Public W orks’ Administration projects, funds for which were allocated some time ago, the distribution of relief through the Federal Emergency R elief Corporation, which superseded the Civil W ork s’ Administration and con tinued activity of the Reconstruction Finance Corporation have caused funds to flow into the fourth district and other sections of the country at an unprecedented rate. This, coupled with the improvement in general business, which has resulted in increased employment and larger wage payments, has caused a steady growth in de posits at member banks. Though demand deposits have fluctuated somewhat, time deposits have shown an almost uninterrupted increase since the beginning o f 1934. Savings deposits at 41 selected banks throughout the district increased $6,000,000 in March, or nearly one per cent, and at the month end were 2.1 per cent larger than a year ago. The gain in Ohio banks was somewhat greater than at those in Pennsylvania, both compared with the previous month and a year ago. Bank debits to individual accounts at 25 cities in the fourth district were 32 per cent larger in dollar volume in the fou r weeks ended April 18 than in the corresponding period of 1933. For the year to date the increase was 15 per cent. RESERVE BANK CREDIT. There was only a slight increase in total reserves o f this bank in the four weeks ended April 18, although reserves o f the entire System increased considerably. Shifting o f funds between dis tricts was partly responsible for the less-than-average in crease locally. Although the volume o f bills discounted for member banks and of acceptances held declined in the fou r latest weeks, holdings o f these have been so small recently that the drop was relatively unimportant. Investments in Gov ernment securities remained at $213,025,000, there hav ing been no change in this item since November o f last year. Despite the improvement in business activity in March and early April, accompanied by larger pay rolls which might be expected to necessitate an increase in money in circulation, the volume of Federal reserve notes and bank notes o f this bank in circulation was approximately the same on April 18 as four weeks earlier and somewhat lower than at the beginning of the year. Member bank reserve deposits, after declining in late March and early April from the record high o f $244,000,000 to $219,000,000, recovered most o f the loss, and on April 18 amounted to $238,000,000. Daily average ex cess reserves o f member banks in this district in March were $108,000,000, compared with $93,000,000 in Feb ruary and $8,900,000 in April last year. (The March 1933, figures are not available.) MEMBER BANK CREDIT. Loans on securities, made by reporting member banks in leading cities, declined slight ly in the four weeks ended April 18 and on the latest date they were 15 per cent lower than in the correspond ing week o f 1933. “ A ll other” loans, changes in which usually are regarded as reflecting fluctuations in loans to trade and industry, rose from $219,000,000 on March 14 to $228,000,000 on April 4, but dropped back to $226,000,000 on April 18. In the first three weeks o f April these loans were higher than since December, 1933. Investments of reporting member banks increasd to new high levels in the four latest weeks, but the gain repre sented larger holding o f Government securities. Invest ments in other than Government securities declined in April after increasing slightly in the first three weeks of March. Since the increase in investments in Government securi ties was greater than the decline in other investments and total loans, credit extended by reporting banks rose to $1,162,000,000 on April 18, a gain o f $80,000,000 in the past year. This increase resulted from an expansion o f $159,000,000 in Government securities owned in the period offset by a decline o f $79,000,000 in loans, and investments in other than Government securities. The THE MONTHLY BUSINESS REVIEW funds invested by local banks in Government securities in the past year resulted in no loss o f funds to the district, for the amount o f money already expended or allocated to this section through the extension o f credit by new Federal agencies has exceeded this figure. This accounts in part for the fact that deposits at mem ber banks, as shown on the accompanying chart, have increased at a faster rate than credit extended. On April 18 total deposits of reporting member banks were $1,100,000,000, whereas a year ago they were $941,000,000. In the four latest weeks demand deposits increased quite sharply and the gain since the first o f the year was ten per cent. Time deposits in the same period increased nearly six per cent. MANUFACTURING, MINING Iron and Steel Steelworks operations stepped up from a 9 to above 50 per cent as a national average in the month ended April 21 and an increase o f about fou r points to 55 per cent oc curred in the latter part o f the month. In the Youngs town district the rate in the same period advanced from 44 to 60; at Pittsburgh from 21 to 54, while in the Cleveland-Lorain district it moved down from 74 to 69, due to the accumulation o f large stocks of raw steel, but rose to 74 per cent again later in the month. Finishing mill operations in the latter district were not reduced, with sheet, strip and bar mills continuing close to capaci ty. Price advances ranging from $2 to $8 a ton on prac tically all semifinished and finished steels, and $1 a ton on pig iron for the second quarter were the most important developments o f the month and the rise resulted in un usually heavy contracting in the period immediately pre ceding the effective dates, April 12 to 16. Tonnage o f finished steel thus covered is estimated by leading pro ducers as 25 per cent ahead o f that actually booked in the first quarter. The advances in finished steel have raised Steel's finished steel composite $3.80 to $54.93, practically level with March 1930, while increases in hourly wages April 1, with those previously made under the NRA, lifted iron and steel wages to the 1929 level. Steelmakers have been buying scrap actively in anticipa tion of heavier operations and Steel’s scrap composite reversed its recent trend, rising four cents to $12.21. Judging by the heavy covering o f miscellaneous re quirements as well as the increased amount of steel con tracted for by the automobile industry, and releases of steel for railroad equipment recently placed, steelmakers believe second quarter steel consumption will show consid erable improvement over the first quarter. Structural requirements have improved recently, but they continue in limited volume. Steel ingot output in March averaged 103,600 gross tons a day, up 12.3 per cent, and total output for the month, 2,797,194 tons, compares with 2,213,569 tons for February. The first quarter's output, 7,007,660 tons, is somewhat more than double the 2,961,735 tons last year. Daily average pig iron production last month was up 15.5 per cent to 52,438 gross tons; while total output, 1,625,588 tons, was 27.8 per cent above February. For the first quarter, production o f 4,122,023 tons represents a gain of 147 per cent over last year. Ninety-seven stacks 3 were in blast at the close o f March, a net gain o f seven in the month. February iron and steel exports amounted to 151,184 tons; imports, 25,407 tons. F or the two months this year exports are 173 per cent higher than last year; im ports, 16 per cent. Coal Output o f bituminous coal by fourth district mines increased sharply in March to the highest level since Octo ber 1930, and at 15,934,000 tons, was greater than in any corresponding March since 1927. Compared with a year ago a gain of 75 per cent was recorded in this section, whereas in the entire country output was up 62 per cent. In the first quarter of this year 40,399,000 tons o f coal were produced in this territory, a gain of 38 per cent from the corresponding period o f 1933. Production rose sharply in March as a result of the in creased industrial activity in many lines and because of the unusually cold weather. Higher prices on coal con tracts fo r the year beginning April 1 stimulated buying, partly for stock piles, prior to that time. In early April, follow ing the announcement o f higher prices, production dropped sharply and although a slight improvement oc curred in the second week o f the month, daily average production was much lower than in earlier weeks of this year. Stocks o f coal were sharply reduced in February and March and though the total supply above ground showed a slight increase from a year ago, in terms of current consumption it represented a decline. Opening o f the lake shipping season, upon which local producers are quite dependent for maintaining production during the summer months, was delayed by the unseasonably cold weather, but movement o f coal to upper lake ports this season is expected to exceed last year's shipments, for stocks o f coal at upper lake ports are practically de pleted. Although the recent increase in coal prices was mod erate, compared with a year ago a marked improvement is apparent. Miners' wages, partly as a result o f the code, also have increased sharply. Automobiles There were 100,000 more cars and trucks produced in March o f this year than in February and total output, at 335,993 units, according to the Department o f Commerce, was the highest fo r any month since April 1931, when 336,939 cars were produced. Barring this month, pro- 4 THE MONTHLY BUSINESS R EVIEW duction was higher than since early 1930. The 42.7 per cent gain from February was considerably more than seasonal and the adjusted index o f the Federal Reserve Board rose from 73 to 80 per cent of the 1923-1925 monthly average. One year ago this index was 27. Not only was the increase in March quite pronounced, but it occurred despite the fact that the industry in the period was confronted by several uncertainties, chiefly in regard to the labor situation. The upward movement apparently was continued in April and factory schedules indicated that output would approximate, if not exceed, 400,000 cars. Compared with March a year ago (when the industry was operating at unusually low levels fo r the spring season) a gain o f 182 per cent was shown in total produc tion. Passenger car output was up 170 per cent and truck production showed an increase o f 219 per cent; the number o f trucks manufactured in the latest month was higher than since May 1930. Increased truck production is one indication o f the improvement in general business, for buying o f such equipment is generally deferred in times of reduced activity. W age increases were quite general in the industry in March and total manufacturing costs, because o f this and increased prices o f raw materials, were raised. As a result, some manufacturers advanced the selling price of cars and while this was temporarily retarding to re tail sales, it was felt in the trade that ultimately it would have little effect on general buying. Dealers’ stocks are much lower than they have been for several years. The effect o f the improvement in the automobile industry has been very noticeable in the fourth district; the in creased buying o f steel and other parts and accessories has been translated into larger pay rolls and greater pur chasing power, which was reflected in a sharp gain in retail trade in most centers. The unemployment situa tion has become less acute. One indication o f the im provement is found in new passenger car registrations in this section. In March they numbered 13,486 units com pared with 8,354 cars in February and 4,741 in January. In the first quarter of the year there were 2 6,581 cars reg istered in principal counties o f Ohio and Pennsylvania compared with 15,597 in the same period of 1933. Rubber, Tires The rubber and tire industry was generally active in the first quarter, but operations fell off slightly in ear ly April. C o n s u m p t i o n of crude rubber in the period was 128,636 tons, an increase of 110 per cent from the 62,591 tons consumed in the first three months of 1933, when the industry was abnormally depressed. The current figure, however, has not been equaled since 1930. Takings of domestic fac tories were in excess o f imports by over 7,000 tons in the quarter with a consequent decline in stocks, which, nevertheless, are still large. Official monthly production figures for the tire indus try have not been released this year, but some indication of activity within the industry can be gained by the fore going rubber consumption figures and the employment and pay roll indexes of the Federal Reserve Board. The form er in March was 83.3 per cent o f the 1923-1925 monthly average, after allowing for seasonal variations, compared with 80.6 per cent in February and 56.6 per cent a year ago. Pay rolls in this same period were 74.0 per cent o f this same average against 68.4 in February and 31.1 last year in March. The much sharper increase in pay rolls was due to an advance in wage rates and also to the greater number of hours worked. Most factories have been operating at capacity levels in recent weeks for a number of reasons. The industry normally is active at this season in anticipa tion o f increased demand for replacement tires and also because o f the larger shipments to the auto industry for original equipment. Increases in raw material costs and wages indicated that higher tire prices were forthcom ing if the industry was to operate at a profit, so considerable dealer buying was in anticipation of that. Under the temporary retail tire code now in effect current prices were about eight per cent higher than the average o f 1933, but they were below last year at this time. Manufacturers increased stocks sharply early this year as a precaution against any possible labor interruptions. Since none developed and the peak o f the season has passed, operations were reduced slightly in early April. Raw material prices increased further in March and April, crude rubber being about 12 cents in the third week of the month, compared with three cents a year ago. Cotton prices doubled in the past year, the current quota tion being 12 cents a pound. Rubber prices in the past few weeks have fluctuated with the progress being made in production restriction plans; recently reports were more hopeful, but no definite program has been announced. Clothing Because o f the seasonal nature o f the clothing industry operations slowed down in the latter part o f March and manufacturing was proceeding at a low rate in the first half o f April. W ith Easter somewhat early, demand for wom en’s spring clothes reached its peak in late March, but after the holiday orders were sharply reduced and prices weakened. Operations on fall goods will start in June and although the actual selling season has not op ened, advance orders have shown a definite upward trend. Employment at 26 wom en’s and miscellaneous clothing factories in March was up 24 per cent from last year and in the first quarter averaged 10 per cent better than in the initial quarter o f 1933. The 2.7 per cent gain from Feb ruary was contrary to the seasonal trend. There was an even greater increase in the average number o f hours worked. At fourth district department stores, wom en’s and misses’ clothing sales in March were 90 per cent larger than in the same month o f 1933, but the increase in wear ing apparel costs in the year, according to Fairchild’s, was only 27.5 per cent. In March last year little cloth ing was bought on account of the bank holiday and much of the pre-Easter buying was done in early April. Men’s clothing sales in March showed almost as great an increase in dollar volume, but men’s apparel prices advanced less sharply than did prices o f wom en’s wear. Operations at factories making men’s clothing showed a greater increase in March, both from the preceding month and compared with a year ago. Manufacturers’ sales have held up well at reasonably favorable price levels. Advance showing o f fall materials indicate higher prices, due partly to higher raw material costs and also 5 THE MONTHLY BUSINESS R EVIEW to increases in production expenses. improved. Collections have Other Manufacturing Although the sharp upward movement evident in most lines was retarded in late March, in many instances gains con tinued to be shown in the first half o f April, though much o f the improvement was seasonal. Comparison with a year ago reveals some startling increases in operating rates, the number of employees, and wages paid. Autom obile Parts, Accessories. Operations at auto parts and accessory plants in this section in March were more than double a year ago, despite disturbances which tend ed to retard activity temporarily at some factories. At 36 factories in this section employment in March was up 138 per cent from a year ago and in the first quarter it averaged 73 per cent better than in the comparable period of 1933. The gain from February was nearly 12 per cent whereas the average change in the past five years was a decline of 0.8 per cent. Further increases were reported in the first half of April. Both costs and selling prices have increased and wages in many in stances have been raised. Despite the sharp im prove ment operations and employment still continue much be low the level considered as "n orm al” by the industry. B rick and Tile. Although employment at brick and tile plants in this section was little changed in March from the preceding month, a rather sizable gain from a year ago was shown. Despite the improvement, the industry was operating at only a small percentage of capacity. More seasonable weather in April was accompanied by an increase in brick and tile shipments, and the large volume o f contracts awarded for public w orks’ construc tion and the improvement in other building lines are favorable factors confronting the industry. Prices have increased, but are not yet profitable on the present vol ume. China, Pottery. The number o f employes at ten pot tery and china plants declined 3.5 per cent in March from February, a little more than seasonal, but in the first quarter it averaged 37 per cent above the same period of 1933. New orders declined in April from the high level enjoyed in the first quarter of the year. In quiries have been numerous, but orders have lagged re cently. Electrical Supplies. The number o f employees at 29 electrical machinery, apparatus and supply companies op erating in this district was 73 per cent higher in March than a year ago and the 7.9 per cent improvement from February was considerably more than seasonal. Buying o f industrial and household electrical equipment increased sharply in March, both from the preceding month and a year ago and the number and size of unfilled orders were larger than at this time last year. The increase in pay rolls was even greater than the number employed, the gains being accounted for by the greater number o f hours worked and also increased wage rates. Prices o f raw materials have advanced and this is thought to have caused increased buying on the part o f jobbers and re tailers. Glass. Glass factories in this district continued to op erate at high levels in March and early April. The num ber of employees in March at eleven factories was over 80 per cent above a year ago, although there was a slight contrary-to-seasonal decline from February. Plate glass production in March was higher than fo r over two years, the automobile industry being almost entirely responsi ble for the improvement. Production of practically all types of containers, etc., continued at a high level in March, but sales in the first part of April declined, not an unusual development at this season. Prices were ad vanced about 15 per cent recently. Hardware, Machine Tools. Sales o f machine tools fell off in late March and early April, although considerable buying for foreign account was reported in some lines. Small tools were in good demand, but rather sizable in ventories were built up in the early part of this year. The hardware industry continued to show improvement and the increase in sales from last year was about 50 per cent. Paint. This is the best season o f the year for the paint industry and operations and sales recently have increased in keeping with the trend o f past years. Although prices o f raw materials entering into paint manufacture have increased, little advance in retail prices has occurred, ac cording to reports. Paper. Operations at paper and boxboard plants in March were up only slightly from February, but the gain in the first quarter from the same period of 1933 was 25 per cent. Demand for some types o f paper has increased sharply, but sales o f boxboard changed slightly in the past month. Boxboard inventories have been built up recently and are a retarding influence to current opera tions. Shoes. The spring season, so far as shoe production is concerned, is rapidly drawing to a close and current op erations are dependent upon reorders o f spring lines. Samples o f the shoes to be sold next fall are now being made, but salesmen normally do not start out until midMay. Retail sales of shoes have improved along with other lines of trade, but shoe production at local factories in Feb ruary, the latest available, was 23 per cent below a year ago, the decline being somewhat greater than seasonal. In the first two months o f this year the number of shoes manufactured by local concerns was 20 per cent below the first two months o f 1933. TRADE Retail Several factors worked together in March to raise the dollar volume o f retail department store sales sharply, and, even after allowing for seasonal variations and changes in the Easter date, the index o f sales rose to 76.4 per cent o f the 1923-1925 monthly average, the highest since 1931. In February this index was 69.8. Compared with March 1933, a gain in dollar sales o f 71.9 per cent was recorded at department stores in leading cities o f the fourth district, two cities, Akron and W heeling, showing gains in excess o f 100 per cent. The comparison with a year ago is hardly fair, for retail trade in that month was very much depressed be cause of the banking holiday and in addition Easter occurred in mid-April last year and on April 1 this year which meant that all pre-Easter buying occurred in March, 1934, whereas last year the greater part o f it was de ferred until April. In addition department store prices are about 29 per cent higher now than a year ago. Com 6 THE MONTHLY BUSINESS R EVIEW pared with March 1932, an increase in dollar sales of about 17 per cent was shown at reporting stores. This comparison is not distorted by changes in the Easter date for in both years all pre-Easter buying occurred in March. Current retail prices, however, according to Fairchild's, are up 13 per cent from two years ago. Sales in all the principal departments showed large gains from last year; clothing sales of all types were up about 80 per cent; house furnishings slightly more than that; shoes about 90 per cent; millinery 130 per cent and yard goods over 50 per cent, higher prices account ing for a large part o f the gains. Dollar value o f stocks at department stores increased about the seasonal amount in March and was 21 per cent above a year ago. Adjusting stock figures by the increase shown in retail prices it would seem that stocks are somewhat lower than at the end o f the first quar ter o f 1933. The adjusted index was only 62 per cent o f the 1923-1925 monthly average. There was a slight reduction in the ratio o f all credit to total sales in March from February, although installment buying increased. Collections on both regular and installment accounts im proved in March. Reporting wearing apparel stores showed an increase of over 100 per cent in March from a year ago and in the first quarter a gain of 45 per cent was recorded. Representative furniture stores throughout the dis trict showed an increase of 87 per cent in sales in March and 69 per cent in the first quarter compared with corresponding periods o f 1933. Chain drug sales were higher in March than since 1931 and the gain from last year was 36 per cent; in the first quarter sales were up 21 per cent. W holesale Sales o f all reporting wholesale lines in the fourth district increased sharp ly in March from the preceding month and the gain was considerably more than seasonal. Dollar sales in that month were larger than since March 1931, and were 67 per cent o f the 1923-1925 monthly average. Wholesale drug sales in March were 70 per cent larger than in March 1933, and in the first quarter a gain o f 47 per cent was reported. Dry goods sales were up 64 and 56 per cent, respectively, in corresponding periods, and hardware sales increased 62 and 60 per cent. Re porting wholesale grocery firms experienced an increase in sales o f 34 per cent in both March and the first quarter from corresponding periods o f 1933. A substantial part o f the gain represented the increase in prices, but condi tions generally have improved and collections are better. BUILDING F ollow ing a rather sharp reduction in the value o f building contracts awarded in February, a greater-thanseasonal improvement was recorded in March, both in the fourth district and the entire country, but a decline developed in the first two weeks o f April. Dollar value o f total awards was larger in March than in any corresponding month since 1931, and the gain from February was significant in that all m ajor types of construction, except public works and utilities, showed in creases. Residential building was up quite sharply and had a higher March value than since 1931. The gain from last year was 74 per cent in this section. In the first three months o f 1934 residential building in the fourth district was up 27 per cent from the same period o f 1933, but was about 30 per cent below the correspond ing quarter o f 1932. In the nonresidential field the de cided increase in factory building was quite significant. Total factory construction in the first quarter was valued at nearly 100 per cent more than in the corresponding period of 1933. Total contracts awarded in this section in the first quar ter o f the year were nearly four times as large as in the same period o f 1933, and they were more than double the corresponding period o f 1932 and only slightly less than in the first quarter o f 1931. By far the m ajor part of the $55,000,000 total value was in the public w orks’ field, almost half o f which represented contracts for highway construction. Funds for this work were made available by the Public W orks’ Administration and, although they have been allotted for the various projects, little actual work has been started. Lumber and building supply dealers throughout the fourth district reported an improvement in the volume of sales in March, but most o f the pickup was due to small orders for repair work. Cement production has improved and output and also shipments o f brick and tile have in creased, all*these changes being chiefly seasonal. Prices on most grades o f building materials have increased and are somewhat higher than a year ago. AGRICULTURE The situation in farm sections o f the fourth district and the entire country in early April was more difficult to appraise than in past years because o f the injection of so many new factors. The various crop-reduction plans, extension o f Federal credit to farmers for a variety of uses, etc., have made it difficult to make the usual crop estimates or comparisons. It is too early to judge the damage wrought by the severe winter weather, par ticularly to the fruit and wheat crop, and spring work generally has been very much delayed. In the northern part o f the district practically no spring plowing had been done prior to April 20 whereas oat seeding nor mally should be well under way by that time. *Other work has been delayed proportionately. Based on the April l condition report o f the Depart ment o f Agriculture, which showed winter wheat as be ing 74.3 per cent o f estimated normal, in contrast with the unusually low figure o f 59.4 per cent a year ago and a ten-year (1922-31) average condition o f 79.2 per cent, a 1934 winter wheat crop o f 491,793,000 bushels might be expected in the United States. In 1933, harvest was 351,030,000 bushels and the five-year 1927-31 average crop was 632,061,0D0 bushels. The 1934 estimate makes no allowance for acreage which might be abandoned as a result o f the reopening o f the wheat acreage reduction program, but does take into account a 14 per cent aban donment o f acreage sown last fell on account o f winterkilling. Last year acreage abandoned was 33 per cent and the ten-year average was 12.2 per cent. The April l condition was below average in all but four states, excluding the Pacific Northwest. Am ong them was Ohio with an April l condition o f 74 per cent com pared with 76 per cent last year. Indications point to 7 THE MONTHLY BUSINESS REVIEW a total crop in the state o f 31,247,000 bushels, compared with 34,732,000 bushels harvested last year. W hile no estimate o f abandonment has been made it is expected to be below average, for, despite the cold weather, wheat fields are in good condition, having had the benefit o f snow protection much o f the time. In Pennsylvania, Kentucky and W est Virginia indica tions point to larger harvests than last year and in the two latter states estimates are larger than the five-year average harvest. In each case this is due to increased acreage, for the April 1 condition is much below last year and the ten-year average. Stocks o f wheat on farms on April 1 were smaller than a year ago in the entire country and in all states o f the district except Pennsylvania. They were also under the average o f the past three years in most sections. Corn and oat stocks also are somewhat low er than a year or two years ago. Growth o f pastures has been retarded this spring and the April 1 condition was much below the average o f past years. Below normal precipitation for many months has been detrimental to pastures. W hile it is somewhat early to approximate the extent of winter damage to the fruit crop, indications now point to very few peaches or sweet cherries, but little damage to sour cherries, apples or pears has yet been reported. About the same number o f tobacco seed beds have been started as in past years, but there are very definite indications that acreage to be planted will be materially reduced; one estimate for the burley crop is 35 per cent below last year. The season is late, but considerable progress was made in early April. Selling o f last year’s crop was completed in late March and prices held up re markably well even to the end o f the season. Wholesale and Retail Trade (1934 compared with 1933) Percentage Increase or Decrease SALES SALES STOCKS March First 3 March 1934 months 1934 DEPARTM ENT STORES (49) A kron................................................ Cincinnati......................................... Cleveland.......................................... Columbus.......................................... Pittsburgh............................................... Toledo..................................................... Wheeling................................................. Other Cities...................................... District.............................................. WEARING APPAREL (11) Cincinnati......................................... FURNITURE (42) Cincinnati................ Toledo............................................... Other Cities........................................... District.............................................. CHAIN STORES* WHOLESALE GROCERIES (33) Akron................................................ Cleveland.......................................... Erie.................................................... Pittsburgh............................................... T o le d o .................................................. Other Cities............................................ District.................................................... WHOLESALE DRY GOODS (1 0 ).... WHOLESALE DRUGS (13).............. WHOLESALE HARDWARE (1 4 )... ♦Per individual unit operated. +176.1 + 5 2 .6 + 89.0 + 67.8 + 53.4 + 78.5 +78.5 +105.2 + 71.4 + 7 1 .9 + 9 8 .2 + 26.9 + 5 4 .9 +37.3 + 31.5 +38.1 +58.5 + 45.8 + 42.0 + 69.5 +120.8 +101.1 +31.1 + 52.4 + 44.6 + 91.8 +103.1 + 36.5 + 2 8 .4 ,+. 8 2„ .0„ +173.5 *+-173.5 + 8 7 ,4 [-62.6 -84.0 f-42.0 h-19.6 -72.7 +106.6 + 68.6 + 35.9 + 21.8 + 21.4 + 20.5 + 3 2 .8 + 5 3 .2 + 1 0 .4 2 3 .9 + 23.9 + 3 0 .4 + 2 5 .8 + 33.9 + 64.2 + 70.0 + 6 2 .2 + 46.7 + 4 6 .9 +10.1 + 3 2 .2 + 2 2 .9 + 28.8 + 33.6 + 56.0 + 4 6 .7 +60.3 +19.3 + 13.0 + 37.8 + 20.2 + 20.0 + 18.4 + 2 1 .0 + 1 4 .4 + 21.4 Fourth District Business Statistics (000 omitted) Fourth District Unless March, % change Jan.-March % change Otherwise Specified 1934 from 1933 1934 from 1933 + 32.6 Bank Debits—24 cities,..... $ 1,622,000 4,600,000 + 12.9 Savings Deposits— end of month: 1 41 Banks, O. & Penna ..... $ 642,398 + 2.1 Life-Insurance Sales: Ohio and Penna........ ..... $ 83,017 + 20.6 227,119 + 6.0 Retail Sales: 16,909 + 71.9 Dept. Stores—49 firms----- $ 28,844 + 49.4 Wearing Apparel— 11 firms# 972 +101.2 1,465 + 5 7 .4 656 Furniture—42 firms.. ..... 3 + 87.4 1,683 + 6 8 .6 Wholesale Sales: Drugs— 13 firms........ ..... 3 1,645 + 70.0 4,509 + 46.7 Dry Goods— 10 firms. ...... 3 1,179 + 64.2 3,035 + 56.0 Groceries— 33 firms. . ...... 3 3,920 + 33.9 10,900 + 33.6 +62.3 Hardware— 14 firms.. ...... 3 1,050 2,885 +60.3 Building Contracts— Total . . $ 14,233 +129.9 55,363 +298.3 >> n _ Resi2,282 +74.3 4,020 +26.5 ...... 3 Commerical Failures— Liabilities............... 1,836 — 71.9 5,187 — 70.8 Commercial Failures— 1653 — 53.1 752 — 73.0 Production: 1,626 +200.0 Pig Iron, U. S........... . .tons 4,120 +147.7 Steel Ingot, U. S........ 2,797 +207.4 7,018 +131.8 584,7842 Automobiles-Pass. Car U. S. 278,1512 +178.5 +95.1 147,6792 +167.2 Automobiles—Trucks. .U. S. 57,8422 +219.3 + 7 1 .6 Bituminous Coal........ . .tons 40,399 +38.3 15,934 Cement— O., W\ Pa., W. Va. 385 +314.0 + 38.5 655 . .bbls. Elec. Power— 0., Pa Ky. k.w.h. 1,148,000 + 28.8 2,342,000 + 20.3 1,563 Petroleum— O., Pa., Ky. bbls. + 0.4 3,435 + 3.2 Shoes ......................... . Pairs — 23.0 — 19.5 (8) (5) (*) (5) 2 Actual number 1 Not available 6 Confidential 3 February 4 January-February Debits to Individual Accounts (Thousands of Dollars) 4 weeks ended April 18, 1934 44,252 5,970 24,762 Cincinnati. . . . 241,310 365,282 95,884 36,969 16,551 2,225 Greensburg. . 4,455 6,943 Homestead... 1,504 12,942 6,941 Lima............. 2,204 Middletown.. 6,096 Oil City........ 5,645 Pittsburgh... . 502,380 Springfield — 10,784 Steubenville.. 5,909 81,538 6,819 26,264 32,162 Youngstown.. 4,778 1,550,569 Year to date Year to date % % change Jan. 3, 1934 Jan. 4, 1933 change from to to from 1933 1933 April 18,1934 April 19,1933 155,228 +127.2 115,676 + 34.2 +20.8 23,055 20,223 + 14.0 + 65.8 94,685 58,577 + 61.6 887,990 +25.1 799,065 +11.1 + 3 6 .6 1,343,721 1,231,519 + 9.1 +22.2 369,245 308,577 + 1 9 .7 135,761 131,767 + 3.0 + 9.3 54,846 + 1 4 .9 63,000 + 19.4 + 3 0 .7 8,898 7,112 +25.1 +50.1 16,307 14,294 +14.1 + 1 5 .7 + 2 3 .0 26,512 21,551 5,781 5,322 + 2 2 .6 + 8.6 +23.1 79,781 59,051 +35.1 + 45.8 27,086 21,186 + 2 7 .8 + 18.5 8,605 8,242 + 4.4 22,523 17,700 + 2 7 .2 + 31.4 + 4 1 .0 22,370 21,849 + 2.4 1,718,020 + 27.8 1,948,705 + 13.4 + 2 1 .8 + 2 5 .9 42,834 35,170 20,833 14,931 +62.3 + 39.5 + 5 9 .6 307,691 237,353 + 2 9 .6 22,083 +56.1 14,632 + 50.9 + 6.9 100,270 85,372 + 17.5 + 6 3 .6 107,611 74,049 + 45.3 + 4.0 19,127 17,071 + 1 2 .0 + 3 2 .2 5,859,702 5,093,155 +15.1 Fourth District Business Indexes (1923-1925 = 100) + 3 1 .7 + 4 0 .6 Bank Debit6 (24 cities).................... Commercial Failures (Number)........ ” ” (Liabilities)----Sales— Life Insurance (Ohio & P a.). . ” — Department Stores (47 firms). ” — Wholesale Drugs (12 firm s)... ” •— ” Dry Goods (10 firms) ” — ” Groceries (33 firms). ” — ** Hardware (14 firms) ” — All (69 firms)............................. ” — Chain Drugs (4 firm s)**... . . . . Building Contracts— (Total) . .............. ” ” (Residential)........... Production— Coal (O., W. Pa., E. Ky.). ” — Cement (O., W. Pa., W. Va. ” — Elec. Power (O., Pa., K y.)5 ” — Petroleum (O., Pa., Ky.)'" ” — Shoes*............................. ♦February. **Per individual unit operated. 1934 60 51 42 99 72 109 48 68 54 67 83 30 13 88 32 137 85 72 1933 45 110 148 82 42 65 29 51 33 45 61 13 8 51 8 106 84 93 1932 60 163 137 114 58 93 40 61 45 59 79 23 13 65 20 122 98 85 1931 95 160 147 134 84 104 59 75 56 72 89 55 45 74 37 136 98 74 1930 117 116 119 169 86 110 81 88 81 89 88 126 54 81 100 146 123 81 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Volume o f industrial production increased further in March and there was considerable growth in factory employment and pay rolls. The general level of commodity prices showed little change between the middle of March and the middle o f April, but in the third week o f April there was a sharp decline in grain prices. Production and Employment Index number of industrial production, adjusted for seasonal variation, (1923-1925 = 100). Lat est figure, March, preliminary 84. MILLIONS OF DOltARS MIUI0N5 OF doilap.*; Three-month moving: averages of F. W . Dodge data for 37 Eastern States, adjusted for seasonal variation. Latest figures based on data for Feb ruary, March and estimate for April. V\i' H O L E S A L . e p r i c e :s .— Output of manufactures and minerals, as measured by the Federal Reserve Board’s seasonally adjusted index o f industrial production, ad vanced from 81 per cent o f the 1923-1925 average in February to 84 per cent in March. This advance reflected chiefly increases o f more than the usual seasonal amount in the output o f steel, automobiles and lumber and an increase contrary to seasonal tendency in the output o f coal. Produc tion o f textiles showed little change in volume on a daily average basis. In the early part o f April, activity at steel mills and automobile factories increased further, according to trade reports, while coal production de clined by a more than seasonal amount. Volume o f employment at factories increased further between the mid dle o f February and the middle o f March by about four per cent, an amount larger than is usual at this season. Employment on the railroads and at mines also showed an increase. The number on the pay rolls o f the Civil W orks Administration was reduced from about 3,700,000 in the middle of February to about 2,400,000 in the middle o f March and 1,900,000 at the end of the month. The value o f construction contracts awarded in March, as reported by the F. W. Dodge Corporation, showed a considerable increase from the low level o f February, follow ed, in the first half o f April, by a decline. For the first quarter as a whole, the value o f contracts was somewhat smaller than in the last quarter o f 1933; publicly-financed projects continued to make up about three-fourths of the total. Distribution Volume o f freight car loadings showed a further increase in March, reflecting chiefly seasonal increases in shipments o f merchandise and mis cellaneous freight and a continued large volume o f coal shipments, which usually decline in March. In the early part o f April, total car loadings showed a decline, reflecting a sharp reduction in coal shipments. Dollar volume o f trade at department stores increased in March by considerably more than the estimated seasonal amount, after allowance for the early date of Easter this year. ^ Prices \ Commodities \ V ~ \ FarmP roducts 1 / Indexes of United States Bureau of Labor Sta tistics, by months 1929-1931, by weeks, 1932 to date, (1926 = 100). Latest figures for week ending April 14. Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for April 11. The general level o f wholesale comm odity prices, as measured by the index of the Bureau of Labor Statistics was 73.3 per cent o f the 1926 aver age in the week ending April 1 4 as compared with 73.8 per cent in the week ending March 10. During this period prices o f steel, copper and automo biles advanced, while prices o f farm products decreased somewhat. In the third week of April, wheat prices declined sharply and there were also declines in the prices of other grains, cotton and silver. Bank Credit During the four weeks ending April 18 member bank reserve balances increased by $220,000,000 raising the volume o f reserves in excess of legal requirements to $1,600,000,000. This increase reflected a growth of $105,000,000 in the monetary gold stock and further disbursements by the Treas ury o f funds from its cash holdings and its deposits with the reserve banks. A t reporting member banks in leading cities an increase o f $400,000,000 in net demand and time deposits for the four-week period ending April 11 reflected chiefly the deposit by the public o f funds disbursed by the Treasury, as well as a growth in bankers’ balances. Government deposits were reduced by about $200,000,000. Holdings by these banks o f securi ties, other than United States Government obligations, increased by $64,000,000 and their loans, both on securities and all other also increased slightly, with the consequence that total loans and investments showed a growth of $100,000,000 for the period. Money rates in the open market declined further in April. Rates on prime four-six month comm ercial paper were reduced from a range of 1 to 1*4 per cent to 1 per cent, and rates on ninety-day acceptances were reduced from % per cent to a range of per cent. Yields on Government securities also declined.
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