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MONTHLY BUSINESS REVIEW Covering industrial F o u rth F e d e r a l R es erve D is tric t and a g r ic u lt u r a l c o n d i t i o n s Federal Reserve Bank of C levelan d Vol. 1 8 financial, Cleveland, Ohio, April 30, 1936 Recovery from the slump of early March, when floods, bad weather, and strikes reduced the general level of trade and industry in this district, was unusually rapid. As in most instances of general devastation, first reports of damage done were somewhat exaggerated, but individual organiza tions in many cases suffered large losses and considerable time was required to complete repairs. Industry as a whole, however, soon attained its pre-flood stride and in several lines the pace was quickened materially in the first three weeks of April. This was particularly true of the important industries in this district. Chief among these was iron and steel. Rising from an estimated 50 per cent of capacity in the flood week, opera tions in the week ended April 18 were above 70 per cent of capacity as a national average. A slight decline occurred in the following week of the month, but the rate was higher than in any seven-day period since June 1930 and compared with 46 per cent a year ago. The accompany ing chart shows weekly operating rates for the past three years. Demand for heavy steels caused activity at mills producing those materials to increase most, and heavy steel consumption until recently has been in limited volume. Automobile requirements still exceed those of all other steel users, but railroad, structural and miscellaneous demands have increased. At least 13 blast furnaces were placed in op eration in March and the first three weeks of April and more were active than since mid-1930. Steel production in midApril was estimated to be within 20 per cent of the peak rate of 1929. Automobile parts production, which precedes assemblies by about four weeks, increased in late March, but has shown little change since that time. Many factories have been operating at the best rate since 1929. Automobile pro duction was up more than seasonally in March and first quarter output was slightly greater than in the same period of 1935, despite the unusually severe weather and moving forward of new-model production. Retail car sales in March in principal counties of this district touched a new high rec ord. Assemblies in the first three weeks of April were up sharply from the March level and also were more numer ous than in the same period of 1935. They exceeded any April since 1929. Building contracts awarded in this district in March com pared more favorably with last year than the average for No. 4 the entire country; the increase was 92 per cent, while awards in the first quarter were 80 per cent larger than a year previous. Residential building has increased consider ably and a large amount of contemplated construction has been reported. Coal production in March was 24 per cent behind last year, having been retarded by floods. In April some im provement was evident, although the late opening of the lake shipping season was not helpful to local mine opera tions. Shoe and clothing factories had about completed work on spring and summer lines. Operations recently, which were largely dependent on repeat orders, declined, but this was seasonal. Generally local plants have pro duced more merchandise than in the comparable period last year. Tire production has shown an upward trend in recent weeks, but this was modified by the weather which retarded replacement tire purchases. Crude rubber consumption in March was approximately the same as a year ago. In the smaller industries, increases, generally more than seasonal, have occurred in the four latest weeks. Retail trade in sections not affected by floods or strikes was greater in March than a year ago. Department store sales in these centers were up about 12 per cent and fur ther improvement was reported for the first three weeks of April. The fact that stores in Pittsburgh and Wheeling were closed for varying lengths of time reduced March sales volume, but reports for the first three weeks of April th e : m o n th ly 2 indicate that some of this buying had merely been de ferred. Inventories at reporting stores were increased in March, but the ratio of sales to average stocks on hand was larger than a year ago. Employment improved in this district in March, judging by the latest data available. In all principal cities, except Toledo, gains from last year were reported. In Cleveland the number of industrial workers was eight per cent above a year ago and little changed from February. At Cincinnati the increase from last year was 13.5 per cent. Canton and Dayton employment was up five per cent and gains were shown in Pittsburgh, Springfield and Youngstown. Some evidence of increased demand for commercial bank credit was apparent in recent weeks, and loans made by reporting banks were 16 per cent larger than a year ago in late April. Agricultural sections were adversely affected by weather conditions which have delayed spring work considerably, but crop prospects nevertheless were slightly better than average. Farm income in March was materially greater than a year ago. FINANCIAL Increased business activity in the five weeks ended April 22 was partly reflected in debits to individual accounts at banks in 25 cities of this district. They were 19 per cent larger in the period than a year ago, whereas the increase for the year to date including these five weeks was 16.5 per cent. Further evidence of expanding commercial business at weekly reporting member banks of the district was re vealed by figures for the four latest weeks. Between March 25 and April 22 commercial loans increased $8,000,000 or four per cent and the total expansion since the beginning of the year has been $33,000,000 or 19 per cent. Compared with a year ago commercial loans at these banks were up 16 per cent. Loans on securities were little changed in the four latest weeks and remained smaller than on the corre sponding date in 1935. Investments in Government securities, although fluctuating slightly in the period, were the same on April 22 as four weeks previous. They were $109,000,000, or nearly 15 per cent larger than a year ago. Loans and investments of these reporting banks on April 22 totaled $1,787,000,000, an increase of ten per cent from a year ago. Demand deposits at these banks, partly as a result of United States Treasury expenditures of funds obtained in mid-March, rose to a new high level in midApril. They exceeded a billion dollars for the first time since the new “adjusted” figure has been available and the increase from a year ago was 23 per cent. Time deposits showed very little change in the four latest weeks and sav ings deposits at selected banks were up only slightly. Changes in weekly condition figures at the Federal re serve bank reflected chiefly operations of the United States Treasury. Balances built up at the reserve bank in March were drawn upon in the latter part of that month and in April and found their way to banks throughout the country in the form of demand balances. Since these represented surplus funds in most cases, so far as the banks were con cerned, they were transferred to the reserve banks as mem ber bank deposits. Reserves of fourth district banks in late April were estimated to be 132 per cent in excess of actual requirements. In dollar volume this was a new high rec ord. b u s in e s s r e v ie w Note circulation declined slightly in the four latest weeks, although at $361,782,000 on April 22, it was $48,000,000 greater than a year ago. A slight increase in loans to in dustry made under section 13b of the Federal Reserve Act occurred in the four latest weeks, but advances on April 22 were smaller than at the beginning of the year. Bills dis counted declined to $29,000, on April 22, from $127,000 on March 25, while holdings of acceptances and Government securities remained unchanged in the four latest weeks. MANUFACTURING, MINING Iron and Steel Demand for steel products in late March and the first half of April increased con siderably and even exceeded expectations of steel makers. Plant operations as a national average were reported to be 58.6 per cent of capacity for the month of March having been reduced by floods and anticipation of them, but by the week ended April 18 the rate had advanced to above 70 per cent, the highest for any week since June 1930, and compared with 40 per cent a year ago. Some slackening in the week ended March 25 was reported, the national rate being down one point to 69.5 per cent of ca pacity. These figures are calculated on a basis of an annual capacity of 68,200,000 tons which is now theoretically pos sible with the mills which have recently been built or re modeled. In 1928 and 1929 the industry's capacity was estimated at 59,000,000 tons or 13.5 per cent less than at present. The accompanying chart shows the estimated an nual capacities of steel plants of the country as of January 1 of the past ten years. Steel production in January 1928 was 153,496 tons a day, and the official operating rate was 81.4 per cent. In May 1929 the industry operated at virtual capacity and output was 195,787 tons. April output has been about 150,000 tons daily, close to the amount produced in January 1928, and yet the operating rate was approximately 67 per cent of capacity. If figured on the basis of 1928, April produc tion would be about 80 per cent, and annual production, if continued at the latest week's rate, would be only 14 per cent under the 1929 output. In the principal steel centers of this district, the rise at Pittsburgh mills in recent weeks has been most encouraging because these have lagged behind the national average for many months and output of these mills, to a considerable extent, consists of steel used in the durable or capital goods industries. In the week of March 25 Pittsburgh operations were at 63 per cent of capacity, down two points from the OF TONS ESTIMATED STEEL CAPACITY UNITEO STATES sor JAN.I FIGURES 70 mi .mill THE MONTHLY BUSINESS REVIEW preceding period, but compared with 36 per cent in the cor responding week of 1935 and 43 per cent in 1934. In the week ended March 28 they were 46 per cent. Cleveland-Lorain mills were operating at 84.5 per cent in the week of April 18, compared with 62 per cent a year previous but dropped to 79 in the latest week; Youngstown was at 79 per cent, Wheeling 92, as against 58 and 76 per cent, respectively, a year ago. In the vicinity of Cincinnati mills currently were producing at 84 per cent, up four points in the week. Three major consuming groups have contributed volumin ously to the rise in production in recent weeks; automo biles, railroads; farm equipment and materials. A fourth, which is essential to a well balanced demand—building con struction requiring steel—has lagged. The market for heavy equipment has been good, and the container manufacturing industry has consistently taken a large tonnage of tin plate, keeping those mills operating at about 80 per cent. The first few weeks of May should disclose how much of the April expansion was due to buying in advance of price adjustments which went in effect April 1, and whether demand is to be sustained. The automotive industry has been the chief contributor to the increase in steel output. Railroads have placed about 620,000 tons of rails for delivery this year, and have issued liberal releases for early shipment. Freight car purchases this year have amounted to approximately 12,000 compared with 1,430 in the first four months of 1935. The moderation in structural shape awards reflects the slowing down of new commitments for steel for Government projects. On the other hand, private building, especially in dustrial, is more active. Steel prices are fairly steady, but higher prices on sheets and strip have not been subjected to a conclusive test. Steel’s steelworks scrap composite declined from $14.46 in the week ended March 21 to $14.33 in the week ended Ap ril 25. A loss of about 60,000 tons in pig iron production was incurred by reason of the floods; nevertheless, daily average output in March, 66,004 gross tons, was 4.1 per cent above February. The total for the month, 2,046,121 tons, was 15.5 per cent ahead of March 1935. Daily and total figures were the highest since last December. First quarter output, 5,914,357 tons, was 21.6 per cent more than in the first three months of 1935. There was a net gain of six stacks to 126 operating at the close of March, this being the highest since September 1930, when 126 also were in blast and seven ad S ditional ones were placed in production in the third week of April. March was the first month in the whole recovery period in which daily average ingot output exceeded that for the full year 1930, 128,711 gross tons daily in the month com paring with 127,500 tons, the 1930 average. It was the largest for any month since June 1930, when 136,000 tons were turned out. The March daily average was 8.4 per cent better than February’s, while the total, 3,346,489 tons, exceeded last year by 16.7 per cent. Production in the first quarter, 9,363,731 tons, was 9.9 per cent larger than for the first three months of last year, but it failed by 17,769 tons to equal the fourth quarter of 1935 when new automobile models were introduced. Soft coal production was seriously af fected in March by the floods. Because of this and the fact that mines were unusually active a year ago prior to April 1 when a strike was scheduled but did not actually occur, mine output in this district in March was 25 per cent under last year. Mines were actually flooded in several sections and opera tions were curtailed in others because railroad facilities were seriously damaged. Production was increased in the last week of March and in the first half of April it exceeded similar periods of other recent years. Since the coal year starts on April 1, output early in that month is usually in limited volume. The lake shipping season is later opening than usual, which also has affected operations at local mines recently. A rather heavy movement of coal to upper lake ports is looked for by the industry because coal stocks were reduced by the unusually severe weather. Coal production in the fourth district in the first quarter was 4.3 per cent under the same period of 1935, while for the entire country a slight increase was reported. Coal Automobiles While the March production figure for the automobile industry somewhat ex ceeded earlier expectations, the sharp in creases in the first three weeks of April raised factory out put on a weekly basis to the highest level since July 1929. Cram's report for the weeks ended April 18 and 25 indi cated that approximately 120,000 cars and trucks were turned out weekly, a gain of 13,000 in the two weeks and compared with about 110,000 in the corresponding period of last year. W ith April over two-thirds gone, as sembly plants feel confident that the month's production will reach 500,000 units; if this figure is attained it would be the best month since 1929. In April last year output was 477,691 units. The recent increases were reported to be in response to rising retail sales in practically every section. In princi pal counties of this district March automobile registrations exceeded any corresponding month on record and those in the first half of April were reported to be at about the same rate. According to the Department of Commerce, 424,571 cars and trucks were made in March; this was 1.2 per cent fewer than in the same month of 1935, but represented a gain of 26.5 per cent over February this year, somewhat more than seasonal. The Board’s index of daily average output was 110 per cent of the 1923-25 monthly average, up four points from a year ago, due to a revision in the seasonal 4 THE MONTHLY BUSINESS REVIEW index, but it compared with 91 in February. A further rise in this index in April was indicated by the weekly produc tion figures which were up more than seasonally in the first three weeks of the month. In the first quarter 1,082,787 cars and trucks were made in the United States, approximately the same number as were assembled in the closing quarter of 1935, but a gain of 2.3 per cent from the first three months of last year. This increase was recorded despite the unfavorable weather and the fact that new-model and annual show stimuli affected production in the closing months of 1935 rather than in the early part of 1936. The truck division of the auto industry compared more favorably with last year, both in March and the first quar ter, than did passenger cars. Assemblies of the former in March numbered 79,404 units, a gain of 16.8 per cent from March 1935. This was the largest number of trucks made in any month since June 1929, and the increase in the first quarter from last year was 10.3 per cent. Passenger caf production in March was 345,167 units, a reduction of 4.6 per cent from March 1935, but in the first quarter output exceeded the same period of the previous year by 0.6 per cent, or nearly 5,000 units. Operations in the rubber and tire industry have lagged behind those of oth er lines so far this year, although some improvement was reported in the first half of April. Sales of tires for replacement were in disappointing volume in the first quarter, having been affected by weather and the fact that many cars in need of tires have been replaced by new models rather than be reconditioned. Sales to automobile makers have been at record levels and in part have made up for the limited replacement tire market, but total pro duction so far this year has been less than in the compara ble period of 1935. In the first two months, the latest period for which estimates for the entire industry are available, tire production was 9.5 per cent under the same period of last year. In February, when 3,577,000 tires were made, output was 22 per cent under January and 18.4 per cent less than in February 1935, according to figures of the Rubber Manufacturers Association. Despite this drop production was in excess of shipments, and inventories increased for the second consecutive month. They were reported to be "large but not excessive” and were 20 per cent smaller than a. year ago. Retail tire prices have remained firm for some time, a rather unusual situation in the tire industry, and manufac turers have stepped up production in anticipation of an im proved replacement demand when weather conditions are more favorable and the vacation season gets under way. Crude rubber consumption by manufacturers in the United States in March was estimated to be 42,703 long tons, a gain of 16.2 per cent from February, but approximately the same as in March 1935, when 42,620 long tons were used. Total rubber consumed continued in excess of imports which amounted to 37,451 tons in the latest month, but they were 15 per cent lower than in March a year ago. There was a further decline, as a result, in stocks of crude rubber in hands of manufacturers in the month and as of March 31 inventories were estimated to be 267,519 tons, compared with 338,700 tons on the corresponding date last year, a re duction of 21 per cent. Prices of crude rubber continued to show strength and touched a new high for recent years of over 16 cents a Rubber Tires pound in mid-April. A year ago ribbed smoked sheets were quoted 11.5 cents and in 1933 rubber was bringing less than four cents a pound. Interest in the clothing industry now centers on the fall season for which pro duction will soon be getting under way. Most local plants have completed shipments on their spring and summer orders and have salesmen in the field with samples of fall lines; as yet, however, they have not been out long enough to provide any fair indication of expected fall business. Activity at local plants has declined recently, but this is entirely seasonal. In some cases it was reported that the period of reduced operations will be shorter than in other recent years. So far production and sales to retailers com pare quite favorably with the same period of 1935, the latter in part representing buying to replenish stocks which had been allowed to decline for some time. Earnings also have increased. Pre-Easter buying was reported good generally although in some sections inclement weather and flood conditions re tarded sales. The effect of the latter apparently was some what over-emphasized in early reports except in a few cases and even there it was felt that the loss to clothing dealers might be compensated in the long run by business resulting from reconstruction. March sales of women’s clothing at reporting depart ment stores in this district, were only 0.8 per cent larger than in the same month of 1935 while sales of men’s cloth ing were down five per cent. Rather large gains in some cities were offset by the fact that some stores in Pittsburgh and Wheeling were closed as much as two weeks and the strike in the rubber industry affected sales in Akron. Cloth ing prices showed little change in the period, but prices of women’s apparel, according to Fairchild's index, were up about two per cent from last year. Raw wool prices have declined somewhat in the past month, but they remain substantially higher than a year ago. Orders for textiles have been sufficient to keep mills going at close to capacity for some time yet. Clothing In most lines operations continued to expand in late March and the first half of April. Some of this was seasonal and in a few areas resulted from the fact that work was held up by floods, etc., but in many instances it was more than could be explained by these two factors. Increases in em ployment and payrolls were reported in several fields, al- Other Manufacturing TH E MONTHLY BUSINESS REVIEW TRADE though seasonal contractions were evident in the shoe and clothing industries. Sales of merchandise were adversely af Orders for auto parts and accessories increased in late Retail fected in March in three leading cities March; since that time they have shown little change, al of this district for which figures are though releases are reported to have been made in sufficient volume to keep plants working at about present levels to available; these were Pittsburgh and Wheeling where floods the first of June. Operating rates at most plants have been did varying amounts of damage to retail stores, some find slightly higher than a year ago and in many instances the ing it necessary to remain closed as long as two weeks while rate is the best since 1929. Employment and payrolls have others more favorably situated in relation to the flooded areas were able to reopen in a reasonably short time. At shown corresponding increases. Brick and tile plants continue to increase operations at all reporting stores in these cities March sales were 21 a moderate rate. In the first two months of the year pro and 8 per cent smaller, respectively, than in the same month duction was 2 ^ times as great as in the same period of of 1935. At Akron, where a strike prevailed in one of the 1935. Only a relatively small share of the industry’s ca leading tire plants most of the month and other labor dif pacity was being utilized, however. China and pottery ficulties were reported, department store sales in March plants were operating in early April at about the same rate were 12 per cent smaller than in the corresponding period as a year ago, or 70-75 per cent of capacity. Flood damage of last year. Eliminating these three citi(es, all other reporting stores was serious at only one important plant. Orders were in in the fourth district experienced a gain of 12.1 per cent creasing in mid-April. in sales in March, but the combined figure for the 51 re Demand for plate glass in recent weeks has been excel porting stores was down 0.5 per cent from a year ago. lent, chiefly because of the activity in the automobile in The increase from February in total sales was less than dustry; most plants were operating at capacity and ship seasonal and the adjusted index of daily average sales was ping goods as rapidly as manufactured, but a similar situ reduced nearly eight points to 77.9 per cent of the 1923-25 ation prevailed at this time last year. Sales of molded monthly average. Preliminary reports indicate that April glassware have been larger than a year ago. Window glass sales compared quite favorably with last year, although demand has improved slightly. First quarter production was Easter occurred a week earlier. Stores in the flood and under last year when demand was abnormal because job strike areas reported unusually large increases in the weeks bers were buying in excess of requirements on account of immediately following the resumption of operations. Dol announced price increases. Paint sales were retarded by lar sales in the first quarter of 1936 were 5.4 per cent larger the unfavorable weather in the first quarter, although they than in the comparable period of last year, all reporting were about equal to those in the same period of 1935. Sea cities except Akron showing increases. sonal increases in sales were reported in early April, but Credit sales in the month represented 58.2 per cent of production has shown little change. Large paint inventories total sales, compared with 60 per cent in February and 57 were built up in the slack season. Increased demand from per cent a year ago. The slight increase was due to pro flood sections is expected this spring. portionately more installment buying than in March last Orders for electrical apparatus and supplies w^ere re year. ceived in better volume in March and the first half of April Dollar value of stocks at reporting stores increased 8.3 than in corresponding periods of 1935. Employment has per cent in March and at the month end was 3.8 per cent increased slightly and payrolls were larger. Inventories of finished goods were smaller than a year ago, but raw ma higher than a year ago. The monthly increase was slightly terial inventories were larger than at the end of the first more than seasonal and the expansion in inventories evi dent since the beginning of the year continued. The ratio of quarter of 1935. Small tool sales in the first quarter were about 15 per sales to average stocks was up slightly in the first quarter cent ahead of last year and a larger increase was evident compared with the same period last year. There was a falling-off in collections in March, both from in early April. Employment was up sharply. New orders for machine tools declined slightly in March from Febru February and a year ago. The ratio of total collections in ary, but compared with last year a marked improvement the month to accounts receivable at the beginning of March was evident, both in the month and the first quarter. Found was 33.0 compared with 36.2 in March 1935, and 36.1 in ry equipment orders received in March were up four per February. The drop was general, but most pronounced in cent from February and nearly 70 per cent from a year ago. Pittsburgh. Furniture stores in Ohio and Kentucky reported an in Boxboard production in March and early April was at about the same rate as a year ago, the industry as a whole crease of 23 per cent in March sales, compared with last operating at approximately 65 per cent of capacity. Prices year and a gain of 14.8 per cent for the first quarter. Sales have increased slightly. Demand for fine papers was little at 13 reporting wearing apparel stores in March were only changed. slightly larger than in the same month last year, but the Shoe manufacturers have about completed their season’s gain for the first quarter was 3.2 per cent. Pittsburgh stores run and are now dependent on repeat orders, which have experienced a smaller volume than in March 1935, while not been large because weather conditions retarded retail gains were shown in other sections. sales. March production at fourth district factories was Sales of reporting chain groqery firms in this district in 4.6 per cent smaller than in the same month of 1935, but March were 10 per cent smaller per store operated than a first quarter output was 10 per cent greater than a year year ago and a reduction of 1.7 per cent for the first quarter ago. The leather market has been firm recently, although was experienced. Chain drug store sales were up 17 and heavy hide prices are lower than in February, but about 20 per cent, respectively, in the latest month and the first equal to a year ago in April. quarter from similar periods of 1935. 6 THE MONTHLY BUSINESS REVIEW Evidence that retailers are again build ing up their stocks after allowing them to decline or remain at low levels has recently appeared in stock figures of retail stores and also in wholesale trade reports. Sales of all reporting wholesale lines in this district except dry goods were larger in March than a year ago. Wholesale drug sales were up 14 per cent, groceries 7 per cent, and hardware 15 per cent from March 1935. Gains for the first quarter were 8.4, 2.8 and 16 per cent, respectively. Dry goods sales were down 2.1 and 1.2 per cent in the month and first quarter from corresponding periods of 1935. Wholesale BUILDING Accompanying the improvement in other lines of activity, building contracts awarded in this district in March com pared more favorably with the previous month or March 1935 than in the 37 Eastern States included in the F. W. Dodge reports, despite bad weather and floods in several areas. Total contracts awarded in the fourth district in the month were valued at $17,555,000, an increase of 92 per cent from last year and the best March since 1931. This gain from 1935 was somewhat larger than was reported for the first two months of 1936, and the increase in first quar ter contracts awarded was 80 per cent. The dollar value of first quarter contracts awarded was $48,803,000. While construction of all kinds was in larger volume than a year ago, residential building continued to present an encouraging picture. Valued at $5,062,000 in March, a gain of 111 per cent from last year was evident in resi dential contracts awarded and in the first quarter the in crease was 87 per cent. Nonresidential building contracts, other than public works and utilities, awarded in March and the first quarter, were more than twice as large as a year ago. The gain in public works and utilities was some what less than in the other classifications. Of principal cities in the district, each showed gains from February except Cincinnati, Columbus and Toledo. Compared with March 1935, increases were experienced for each city except Canton, Columbus and Youngstown. The latter city was the only important one in the district that did not record a gain in the first quarter over the same period last year. Contemplated work reported for this district in March, excluding public work and utility building, had a greater dollar value than a year ago and at $19,370,000, was about the same as in February. In the 37 States covered by the Dodge report contracts financed by private funds exceeded those for publicly financed for the first time since July 1935. Building supply dealers stated that conditions have shown further improvement in recent weeks. Shipments held up by the weather recently have been about 60 per cent over 1935, with some items showing much larger increases. Prices are higher and lumber orders on hand exceed those of other recent years by a good margin. AGRICULTURE Crop planting in this district and in many sections has been considerably delayed by the unusually cold wet weather. Prior to the third week of April very little ground prep aration had occurred and planting of early grains and truck crops was from two to three weeks late. Most spring work has been performed later than usual, but the delay as yet is not serious. According to the Department of Agriculture, crop pros pects for the entire country on April 1 appeared better than on that date in any of the past three years, but they were not particularly bright because of recent freezes and storms, excessively wet weather in the East, and continued dry weather over much of the Great Plains Area. Irregular weather conditions were largely responsible for the fact that more than the usual proportion of winter wheat acreage is expected to be abandoned. On the other hand farmers generally appear to be ex panding their operations, although the Soil Conservation Program is likely to cause some modification of individual plans as it is presented in various areas. Reports generally indicate that demand for farm labor has increased; com pared with a year ago, the supply of labor is substantially lower and farm wages are higher. Cash receipts from the sale of principal farm products in the first quarter of 1936 in the entire country were re ported to be 20 per cent ahead of the same period of 1935. Rental and benefit payments have been very small this year, but ,even when they are included farmers’ income in the first quarter was nearly eight per cent above last year. In creases in this section were derived more from the sale of livestock than crops and were largely the result of the higher prices paid for all classes of livestock as compared with a year ago. Increased income from chickens and dairy products also were contributing factors to the higher in come. In Ohio receipts in the first two months of 1936, the latest available by areas, were estimated at $41,897,000 compared with $37,232,000 last year and $28,703,000 in 1934. This excludes rental and benefit payments. For Penn sylvania the corresponding figures were $33,335,000 in 1936, $29,681,000 in the previous year and $25,476,000 in the first two months of 1934. The accompanying chart shows month ly estimated cash income (excluding benefit payments) from January 1933 to February 1936 of the four states all or part of which are included in the fourth reserve district. Improved farm income is clearly evident; the sharp in creases in January each year were due to marketing of the tobacco crop. Market prices in mid-April indicated that the general level of farm prices had recovered a little from the rather sharp decline in the month ended March 15. Wheat and dairy products were lower, but potatoes, cotton, hogs, and other products increased. The April 1 condition of winter wheat for the country, at 68.5 per cent of estimated normal, was ten points below 7 THE MONTHLY BUSINESS REVIEW the ten-year average April 1 condition and slightly under last year. A 21 per cent abandonment of the large acreage planted was indicated and the crop was estimated at 493,000,000 bushels. This would compare with 433,447,000 bushels harvested in 1935 and 618,186,000 bushels, the av erage of the five years 1928-32. The average abandonment in the ten years 1923-32 was 12.6 per cent. In Ohio the 71 per cent of normal condition on April 1 indicated a winter wheat crop of 31,248,000 bushels, about a million bushels in excess of the five-year average harvest, but considerably under the 42,343,000 bushels harvested in 1935. While the crop made a good start last fall the severe winter injured it considerably, particularly in the northern counties where snow protection was lacking when weather was most severe. Less acreage is expected to be abandoned in this section, however, than the average for the country, because local wheat fields are generally seeded to clover or other hay crops and if abandoned the rotation would be destroyed. Fourth District Business Statistics (000 o m itted ) F o urth D istric t Unless M a rc h Jan.-M ar. Otherwise Specified 1936 Change Change 1936 from 1935 from 1935 B a nk D ebits 24 cities.................. 32,082,000 + 1 2 .7 36,119,000 + 15 .5 Savings Deposits— E n d of M o n th l 40 banks, O. and P a ................... 3 704,622 + 4 .8 Life Insurance Sales: O hio and P a ................................. 3 76,821 — 10.2 217,991 — 18.0 R e ta il Sales: D e p a rtm e n t Stores— 51 firm s. .3 15,777 44,167 + 5 .4 — 0 .5 W earing Apparel— 13 firm s ... .3 778 + 3.2 2,122 + 0 .4 F urniture— 43 firm s....................3 791 + 23 .3 2,126 + 1 4 .8 W holesale Sales: 1,505 D rugs— 12 firm s.......................... 3 + 13.9 + 8 .4 4,389 D ry Goods— 10 firm s.................$ 1,161 — 2.1 — 1.2 3,087 Groceries— 30 firm s .................... 3 3,857 + 6 .9 11,193 + 2 .8 H ardw are— 13 firm s................... 3 1,392 + 1 5 .2 + 1 6 .0 3,538 17,555 B u ild in g C ontracts— T o ta l.........$ + 9 2 .2 48,803 + 7 9 .9 ” ” — Residential# 5,062 + 110.7 + 8 7 .0 11,334 Com m ercial Failures— L ia b ilitie s.................................... 3 — 6 .9 1,035 — 4 0 .7 3,637 C om m ercial Failures— N u m ber 652 no change — 15.6 2062 P rod uction: P ig Iro n — U. S........................tons 2,046 + 15 .5 5,914 + 2 2 .4 Steel In g o t— U . S................. tons 3,346 + 1 6 .7 + 9 .9 9,364 A u to — Passenger Car— U . S . . . . 345,1672 — 4 .6 + 0 .6 871,5452 79,404* ” Trucks— U. S.................... + 10 .3 + 1 6 .8 211,2422 B itu m in o u s Coal, O., W . P a., E . K y ...................................tons 11,552 — 24.3 40,212 — 4 .3 C em ent— O., W . Pa., W . Va. bbls. 191 — 23.0 482 + 3 2 .8 Elec. Power, O., Pa., K y .— .............................thous K .w .h . 1,343s 2,803* + 19.7 + 17.0 P etroleum , O ., P a., K y . . . . bbls. 1,8573 — 3.3 3,8694 — 3.5 5 S h o e s ..................................... pairs 5 — 4 .6 + 10 .3 3,577s Tires, U . S..........................casings — 18.4 8,156* — 9.5 B itu m in o u s Coal Shipm ents: L. E. P o r ts .............................tons 162 — 51.1 230 — 42.4 *not available 4Jan.-Feb. 2actual num ber C o n fid e n tia l 8February Debits to Individual Accounts A k r o n ............. B u tle r ............. C a n to n ........... C in c in n a ti , C leve lan d........ C o lu m b u s ___ _ D a y t o n .......... . E rie ................. . F r a n k lin .......... G reensburg. , , H a m ilto n ......... H o m e s te a d ... L e x in g to n ___ L im a ............... . L o r a in .............. M id d le to w n . O il C ity P ittsbu rgh Springfield . . S te u b e n v ille ... T o led o .............. W a rre n ............. W h e e lin g ......... Y o u n g s to w n .. Z anesville......... (T housands 5 weeks % ended Change A pril 22, from 1936 1935 $ 65,850 + 8.5 + 2 3 .5 9,254 39,366 + 2 3 .7 361,419 + 12.7 608,039 + 2 1 .0 + 3 3 .7 221,765 69,551 + 17.5 + 1 3 .2 27,364 3,595 + 1 6 .5 + 1 7 .9 6,853 12,470 + 3 2 .8 2,568 + 1 3 .7 18,487 + 1 4 .2 13,502 + 3 0 .2 4,468 + 2 3 .8 10,618 + 3 4 .1 11,334 + 8 .5 771,030 + 1 6 .1 18,038 + 1 5 .2 8,587 + 1 4 .0 126,671 + 2 1 .5 9,797 + 1 4 .3 32,578 — 1 .4 66,351 + 5 8 .8 + 1 4 .0 8,502 + 1 9 .0 of Dollars) Y ear to date Y ear to date % Jan . 1, 1936 Jan . 2, 1935 Change to to from A pril 22,1936 A pril 24,1935 1935 $182,259 3210,988 + 1 5 .8 29,488 23,857 + 2 3 .6 117,597 98,668 + 1 9 .2 1,130,756 992,732 + 1 3 .9 1,900,585 + 2 4 .5 1,526,944 612,339 575,591 + 6 .4 210,132 182,404 + 1 5 .2 86,115 73,905 + 1 6 .5 11,328 9,747 + 1 6 .2 23,440 + 3 2 .1 17,744 36,432 30,186 + 2 0 .7 8,382 7,365 + 1 3 .8 76,060 83,435 + 8 .8 39,039 31,837 + 2 2 .6 13,145 10,915 + 2 0 .4 32,272 25,032 + 2 8 .9 35,245 31,145 + 13.2 2,416,235 2,115,418 + 14.2 55,851 50,711 + 1 0 .1 26,337 23,449 + 1 2 .3 401,004 323,736 + 2 3 .9 27,853 24,253 + 1 4 .8 107,935 99,668 + 8 .3 158,690 124,537 + 2 7 .4 25,639 + 1 3 .2 22,641 $7,792,887 $6,688,179 + 1 6 .5 The Pennsylvania April 1 condition of winter wheat was above average, but the crop was estimated to be smaller than last year or the five-year average because of a re duced acreage. Pastures on April 1 were in about average condition in states of this district; growth was slow in the first half of that month, however, and they do not look nearly as promising as a year ago. In regard to fruit prospects, reports indicate that apples apparently have not been injured, although the exact con dition of trees cannot be determined as yet. Considerable damage to peach trees was reported generally, estimates ranging from 50 to 100 per cent. So far as tobacco is concerned, due to lack of informa tion on State and Federal crop control this year, it is too early to make even a guess as to the 1936 crop. The situa tion at present indicates an increase in burley acreage. Cold weather in early April was reported to have damaged plant beds in some sections. Wholesale and Retail Trade (1936 com pared w ith 1935) D E P A R T M E N T S T O R E S (51) C in c in n a ti....................................................... C o lu m b u s ........................................................ T o le d o .............................................................. Y o u n g s to w n ................................................... O ther C ities................................................... D is tr ic t............................................................ W E A R I N G A P P A R E L (13) C in c in n a ti....................................................... C le v e lan d ........................................................ . . . P itts b u r g h ....................................................... O ther C itie s ................................................... D is tr ic t............................................................ F U R N I T U R E (43) C in c in n a ti....................................................... C o lu m b u s ........................................................ D a y t o n ............................................................ T o le d o .............................................................. O ther C ities................................................... C H A IN S T O R E S * Drugs— D istrict ( 4 ) ...................................... Groceries— D istrict ( 5 ) ............................... W H O L E S A L E G R O C E R I E S (30) E r ie ................................................................... P itts b u rg h ....................................................... . . . T o led o .............................................................. O ther C ities................................................... D is tr ic t............................................................ . . . W H O L E S A L E D R Y G O O D S ( IO ) ............... W H O L E S A L E D R U G S (1 2 ).......................... W H O L E S A L E H A R D W A R E (1 3 )............... . . Percentage Increase or decrease SALES SALES STOCKS M a rc h first 3 M arch 1936 m onths 1936 — 12.5 + 1 1 .0 + 1 4 .2 + 12.2 — 21.3 + 1 0 .8 — 8 .0 + 8 .6 + 11.6 — 0 .5 — 7 .1 + 7 .0 + 11 .3 + 8 .0 + 1 .4 + 6 .8 + 4 .6 + 1 5 .0 + 8.5 + 5 .4 — 3 .7 + 2.3 — 0 .4 + 7 .6 + 7.1 + 2 .7 + 3 .4 + 2 2 .9 — 1 .6 + 3 .8 + 1 6 .7 + 5 .6 — 38.5 + 8 .8 + 0 .4 + 4 .9 + 1 0 .2 — 10.9 + 2 .8 + 3 .2 + 1 9 .4 + 1.1 — 0 .4 + 7 .6 + 7 .0 + 1 4 .7 + 3 1 .7 + 2 8 .4 + 14 .5 + 29 .1 + 7 .0 + 23 .3 + 7.1 + 17.5 + 14 .1 + 1 1 .0 + 1 4 .7 + 1 4 .6 + 1 4 .8 + 1 6 .6 — 9 .8 + 2 0 .0 — 1 .7 — 8 .6 — 3 .6 + 7 .0 + 5 .3 + 6 .8 + 16.8 + 6 .9 — 2 .1 + 13.9 + 15 .1 + 5.5 — 8.5 + 3 .2 — 0 .1 + 5.3 + 9 .6 + 2 .8 — 1 .2 + 8 .4 + 1 6 .0 — 0 .2 — 10.7 Fourth District Business Indexes (1923-25 =* 100) B ank debits (24 cities).......................................... C om m ercial Failures (N u m b e r ) .......................... ” ” (L ia b ilitie s )......................... Sales— Life Insurance (O . & P a .) ...................... — D e p a rtm e n t stores (49 firm s )............... — W holesale D rugs (11 firm s ).................. ” D ry G o ods (10 firm s )......... ” Groceries (30 firm s )............ ” H ard w are (13 firm s )........... A ll (64 firm s )......................... C h a in D rugs (4 firm s )* * ........................ B u ild in g C ontracts (T o t a l).................................. ” ” (R e s id e n tia l)........................ P rod uc tion — C oa l (O ., W . P a., E . K y .) ........... C em e nt (O ., W . P a., W . V a .) . . . . ” Elec. Power (O ., P a., K y .)* . . . . ” P etrole um (O ., P a., K y .) * ........... ” Shoes............................................ ♦February **Per individual unit operated. M a r. 1936 77 45 24 92 68 100 47 71 73 70 88 37 29 64 16 160 101 117 M ar. 1935 68 45 40 102 69 88 48 66 63 65 76 19 14 84 21 144 104 123 M a r. 1934 60 51 42 99 71 109 48 68 54 67 83 30 13 88 32 137 85 117 M a r. 1933 45 110 148 82 41 65 29 51 33 45 61 13 8 51 8 106 84 105 M ar 1932 60 163 137 114 61 93 40 61 45 59 79 23 13 65 20 122 98 85 THE MONTHLY BUSINESS REVIEW 8 Summary of National Business Conditions By the Board of Governors of the Federal Reserve System Index of physical volume o f production, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1929 to March 1936, the latest figure being: 94. Indexes of number employed and payrolls, with out adjustment for seasonal variation, 1923-1925 average=:100. By months, January 1929 to March 1936. Indexes compiled by the United States Bureau of Labor Statistics. March em ployment 84.2; payrolls 75.7. Indexes o f value of sales, 1923-1925=100. By months, January 1929 to March 1936. Latest figure, adjusted 88; unadjusted 78. Wednesday figures o f total member bank re serve balances at Federal reserve banks, with estimates of required and excess reserves, January 6, 1932 to April 22, 1936. Production and employment at factories increased from February to March, while output of minerals declined. There was considerable expan sion in retail trade. Production and Employment The Board’s combined index of industrial production, which includes both manufacturing and mining and makes allowance for seasonal changes, remained unchanged in March at the February figure of 94 percent of the 1923-1925 average. Production of automobiles rose sharply in March to a total of 425,000 passenger cars and trucks and continued to increase during April. There was a seasonal increase in output of steel in March, followed in the first three wreeks of April by a rapid rise in activity. Estimates of the rate of production in that period averaged around 67 percent of capacity as compared with the rate of 59 percent reported for March. Production of cement and lumber increased more than seasonally from February to March, and activity at meatpacking establishments and at silk mills also increased, although a decline is usual in these industries at this time of the year. There was little change in output at cotton textile mills, while at woolen mills activity decreased by more than the usual amount. Production of anthracite and bitu minous coal showed a substantial reduction from the relatively high level of February and this decrease accounted for the decline in total output at mines. Factory employment increased by more than the usual seasonal amount from the middle of February to the middle of March, and payrolls showed a larger increase. Employment increased in the machinery industries, at sawmills, and at establishments producing wearing apparel. There was a decrease in the number of workers at plants producing rubber tires and tubes, where a strike was in progress in the middle of March. At automobile fac tories the number employed declined slightly, while payrolls showed a con siderable increase. The value of construction contracts awarded, according to figures of the F. W. Dodge Corporation, showed a seasonal increase from February to March. Awards for residential building increased seasonally and contracts for other private construction advanced to the highest point since 1931. Distribution Retail trade, which had been reduced in January and February by unus ually severe weather, increased considerably in March. Sales at department and variety stores and by mail order houses serving rural areas showed a more than seasonal increase. The number of new automobiles sold wras also larger than in February. Freight-car loadings of most classes of commodities increased from Feb ruary to March by more than the usual seasonal amount. Commodity Prices The general level of wholesale commodity prices, which had declined somewhat between the third week of February and the middle of March, showed relatively little change in the following four weeks. Retail prices of foods declined during March. Bank Credit Excess reserves of member banks, after declining sharply in the last half of March, increased by about $300,000,000 in the first three weeks of April to a total of $2,640,000,000. This increase, like the preceding decline, was due chiefly to operations of the Treasury. After the middle of March Treas ury balances at the Federal reserve banks were built up through the collection of taxes and receipts from the sale of new securities, and in April these balances were drawn upon to meet expenditures. Partly as a result of these expenditures, deposits at reporting member banks in leading cities, which had declined in March, increased in the first half of April, when total loans and investments of these banks also increased. From February 26 to April 15 total loans and investments of reporting member banks showed an increase of about $800,000,000, reflecting increases of $380,000,000 in investments, of $180,000,000 in loans to brokers and dealers in securities, and of $240,000,000 in so-called “other” loans, which include loans for commercial, industrial, and agricultural purposes.
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