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Frank Zurlinden, Deputy Governor MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 12 Cleveland, Ohio, August 1, 1930 The present situation has not as yet exhibited any absolute indications of improvement, the general level of operations and employment in June and July being seasonally lower than May. Production and consumption statistics in many cases in the first half of this year compare quite favorably with all years except 1929. Money rates remain easy and the bond market has shown a slight upward tendency, despite the large flota tions, which eventually mean expenditures in material and labor markets. The iron and steel industry was characterized by de clines in demand, price and production* Pipe mills have been operating at a good rate and structural steel orders have been received in fair volume; otherwise, re quirements were at the lowest level since February. Con struction activity in June in the Fourth District did not show the improvement reported in the entire country and the demand for building materials, including glass, remains low. The shoe industry increased its operations in June, contrary to seasonal trend, the upturn usually coming in July. Output for the first six months was below the average of preceding years. Many small general manu facturing concerns not dependent on the automobile in dustry for their orders have been operating at very satisfactory levels. Other small concerns whose chief No. 8 products are automobile parts, tools and accessories have reduced operations proportionate to the decline in the automobile industry which dropped more than sea sonally in June and curtailed operations still further in July. The situation, however, is much improved from a year ago, the large stocks having been appreciably reduced. The agricultural situation is not particularly favor able. Crops have been badly damaged by the long drought. The quite general rain on July 22 was slight and only afforded temporary relief. Tobacco acreage was smaller than reported early this year and the crop prospects have been materially reduced. The situation in the canning industry has been irregular. Tomato prospects are about equal to the average of the past five years, but other crop prospects have been reduced. Department store sales declined rather sharply in June as compared with the corresponding month of last year. The drop was 13 per cent and increased the six months' discrepancy to seven per cent. Stocks are still contracting. Accounts receivable showed a slight increase, but collections were also larger than one year ago. The ratio of credit to total sales decreased from May, but showed about the same increase over last June as has been shown in former years. Installment sales were only 5.1 per cent of total sales, compared with 4.8 per cent last year. THE MONTHLY BUSINESS REVIEW 2 FINANCIAL The easing o f money rates which began last Novem ber and which continued in the first half o f this year was still evident in July, both in this District and the entire country. A slack demand for comm ercial credit, a reduction in collateral and brokers' loans in July, both by all reporting member banks and others, and a continuance o f depressed conditions throughout the world have all tended to keep interest rates exception ally low. Bankers* acceptances (90-day, asked) were quoted at 1 % per cent in July, the lowest rate on rec ord, as against 5% per cent one year ago. Call money is again quoted at two per cent after having increased to 2 % per cent follow ing the mid-year settlements and compared with seven to fifteen per cent in July, 1929. Time money and commercial paper rates are also low, the former being from 2%-3 per cent and the latter 3-3% per cent. Last year these rates were 7 ^ - 8 and six per cent respectively. Reflecting this changed situation in the demand for funds, banks in the larger cities o f this District have also reduced their rates, prime loans being quoted as low as 3% per cent. This easy tone o f the money market is shown in the position o f Fourth District reporting mem ber banks, and is noticed in the relation between the demand for and the supply of loanable funds. From the first week in January to the middle o f July, total deposits o f these banks increased $223,000,000. In the same time total loans and discounts declined $13,000,000. Demand de posits increased $164,000,000 in this period and on July 16, at $1,170,000,000, reached a new high record. Time deposits increased $63,000,000 from the low point in January to $988,000,000 and were higher in July than at any previous time. One year ago they totaled $947,000,000. The fact that Fourth District reporting member banks have been experiencing difficulty in placing their funds in regular com m ercial channels and seem reluctant to increase their real estate loans is clearly shown on the accompanying chart. The volume o f “ all other” (usually considered com m ercial) loans has declined quite steadily and on July 16 was $27,000,000 lower than in January and the lowest for any week since early 1928. Collat eral loans have increased slightly, but there has been little change in this item in the past month. In order to keep funds employed, these banks have increased their investment holdings $163,000,000 since the first of this year and at $764,000,000 on July 16, were the highest on record. At the same time they have reduced their indebtedness to the reserve bank to $9,000,000, while one year ago this group o f banks was borrow ing $63,000,000. The position o f all other member banks, most o f which are located in agricultural communities, does not show a proportionate decline. W ith harvesting and m arketing just beginning, these smaller institutions are making many seasonal loans; on July 16 they were bor rowing $15,000,000 as against $20,000,000 one year ago. Changes in the reserve bank position in the past month have been relatively few. Total discounts increased in the last week o f June, but have since declined. Hold ings of acceptances seem to have reached their season ally low point on June 25; there has been an increase since that time. Government securities have shown no change; at $55,342,000 in July, however, they wore higher than any week since January, 1928. Contrary to the trend shown in the entire country and partly on account of abnormal conditions resulting from the issuance o f the new currency, note circulation in this District has increased from the low point in February. MANUFACTURING, MINING Iron and Steel Continued declines in demand, production and prices characterized the iron and steel industry o f the Fourth D is trict in the month ended July 15. Pipe mills operated at a good rate on the strength of substantial backlogs and a moderately good situation ob tained in building steel; otherwise, consumer require ments, steadily shrinking, were scaled down to the lo w est levels since February. Particularly did the automobile industry withdraw from the market. Late June and early July specifica tions were determined with the idea o f attaining m ini mum inventories by July 15. From the middle o f Ju ly to the first week o f August, manufacturers represent ing half o f the industry’s capacity were scheduled to close for a two-week period. Sheet, strip and bar mills, comprising the largest steel producing lines in the Fourth District, were especially affected by the slack automotive market. Pig iron mov ing to foundries fell early in July to the lowest tonnage o f the year, with coke production depressed proportion ately. Operations at Pittsburgh and Youngstown have been buoyed by pipe contracts and in mid-July were at 60 per cent of capacity, slightly above the average fo r the entire country. At Cleveland, however, they were at only 50 per cent o f capacity. Although demand was regulated primarily by the con suming situation and not by prices, the inevitable com petition for business weakened prices markedly. Steel bars, shapes and plates declined $1 per ton in the past month, to a basis of 1.65 cents per pound, Pittsburgh, for many consumers. Foundry iron receded 50 cents, to $18, v a l ley. Beehive furnace coke declined ten cents a ton, to $2.50. Scrap, while softer, reached a point where som e large consumers, while uncertain that the bottom had been reached, were attracted to put in some stock. The market composite o f leading iron and steel prod- 3 THE MONTHLY BUSINESS REVIEW ucts originated by Iron Trade Review, is continued by Steel. It declined July 15 to $33.18, the lowest since March, 1922. The average for this index in June was $33.53, for May $33.73 and for July, 1929, $36.71. June’s daily rate for pig iron production was 97,760 tons, compared with 104,564 tons in May and 123,887 tons last June. The 2,932,806 tons o f iron made in June gave the first half o f 1930 a total o f 18,302,912 tons, which compares with 21,637,537 tons in 1929. Steel ingot production in June continued the decline which developed in March, the daily rate being 137,610 tons compared with 149,066 tons in May and 196,146 tons last June, when an all-time record was set. June s output of 3,440,239 tons gave the first half a total of 23,793,119 tons, against the record 29,073,398 tons of 1929. Steelmaking operations averaged 76.6 per cent in the first half o f 1930; 95.5 per cent in the first half of 1929. Despite the fact that steel ingot production has been declining since March and has resulted in an output con siderably below 1929, total steel produced in the first half of this year has been exceeded in only four years and then, excluding 1929, by very m oderate amounts. Coal The one bright spot in the coal in dustry in June was the amount o f coal dumped in vessels at Lake Erie ports. Totaling 5,952,000 tons in the month, they exceeded last year's loadings by eight per cent. This larger taking of coal to upper Lake ports has not been enough to offset the drop in industrial and railroad taking and June pro duction in the Fourth District was only 14,651,000 tons, a drop of 13 per cent from the same month last year. In the first six months of this year coal production was six per cent below the corresponding period o f 1929. Production was also smaller than in June, 1928, but exceeded that month in 1927. It appears that July pro duction will recede further, for many manufacturers, par ticularly the quantity producers, closed factories for two weeks or m ore in July because o f model changes, inven tory taking and lack o f general demand. During the past year every effort has been made to im prove the inventory position, both o f used and new cars, and it would seem that considerable progress has been made along this line. The comparison o f new passenger car registrations for the first five months o f 19 30 (the latest available) with the same period o f last year shows a decline of only 21 per cent, in the entire country, while passenger car production was off 31 per cent in the same time. Exports o f cars have declined nearly 50 per cent from last year, partly because so many American assembly plants have been established in for eign countries, but the total number thus distributed only amounted to 188,000 or eight per cent o f total out put in the first five months o f 1929. The present situation is much im proved from one year ago when the entire industry was laboring under the burden of large stocks. With these out of the way any favorable change in the demand for cars would soon be felt, not only by the autom obile industry, but by the many accessory, paint, tire and glass concerns located in this District. Notwithstanding that production in the first six months has been 1,000,00 cars, or 31 per cent below the first half o f 1929, it has compared very favorably with cor responding periods o f other years, exceeding all but 1926 and last year. Registrations in this District showed large declines from a year ago in all principal cities except Pittsburgh where only a slight falling off was recorded. Dealers in the Fourth District report business quiet, but a slight improvement was noticed in orders in the first part of July. Prices remain very low. New Passenger Car Registrations Ten Principal Counties Automobiles In the past six years, 1924-29, auto mobile production on the average de clined 11.3 per cent from May to June. The decrease in 1929 was 9.7 per cent. This year the drop was much greater than seasonal and amounted to 19.6 per cent. Output in June o f passenger cars and trucks totaled 335,475 units, the smallest for any month since January and compared with 545,932 units last year. Akron (Sum m it)............... Canton (Stark)................. Cincinnati (H a m ilto n )... Cleveland (C u y a h o g a )... Columbus (Franklin). . . . D ayton (M on tgom ery). . Pittsburgh, Pa. (A llg h y). Toledo (L u cas)................. Youngstown (Mahoning) Wheeling, W . Va. (O h io ). T o ta l............................... R ubber Tires June, 1930 930 531 1,555 3,611 994 597 4,550 686 545 204 14,203 June, 1929 1,875 1,190 2,229 5,718 1,615 1,361 4,597 1,500 1,017 261 21,363 change Jan.from June, 1929 1930 — 5 0.4 5,694 — 55.4 3,534 — 30.2 9,239 — 36.8 22,227 — 38.5 6,046 — 56.1 4,276 — 1.0 21,030 — 54.3 4,568 — 4 6 .4 3,177 — 21.8 1,060 — 33.5 80,851 Jan.June, 1929 10,118 6,107 12,144 30,800 9,290 6,878 22,142 9,047 5,303 1,329 113,158 change from 1929 — 4 3.7 — 42.1 — 23.9 — 27.8 — 3 4.9 — 37.8 — 5 .0 — 49.5 — 40.1 — 2 0.2 — 2 8.6 The tire industry has experienced a falling-off this year coincident with the decline in general business and the au tom obile industry, but the extent o f the drop has not been so great as in some other lines. It is true that tire pro duction in the first half o f 1930 was only 28,296 units, a decrease o f 15.3 per cent from the same period o f one year ago, but sales have made a much better showing. Inventories, both o f dealers and manufacturers, have been materially reduced, the latter being nearly 3,000,000 cas ings below one year ago and only about 1,000,000 above the level o f 1926-23. Gasoline consumption figures in dicate that autom obile travel has not declined and the fact that proportionately m ore used cars have been sold THE MONTHLY BUSINESS REVIEW 4 than new cars, as compared with last year, is beginning to have a favorable effect on the replacement tire de mand which is the bulk o f the rubber industry. W ith the exception o f 1929, consumption o f crude rub ber for the first six months o f 1930 was the highest on record. The figure, 216,182 long tons, was 19 per cent below 1929, but was four per cent above the same period of 1928. Consumption in June, while below the same month last year was nearly six per cent above the aver age June consumption of the past eight years. Imports in June were 42,653 tons which brought the six months total to 269,845 tons, a drop o f 15 per cent from the corresponding period o f last year . Despite the recent restriction projects, world stocks of crude rubber on June 1 were 404,407 tons, according to the Department of Commerce. There was a slight seasonal decline from the previous month, but the total compared with only 252,867 tons on hand one year ago. It is this fact, coupled with the smaller consumption, which has been reflected in the recent price decline. Crude rubber on July 22 was quoted at II cents a pound as against an average of 21 cents in July, 1929. Clothing Conditions in the clothing industry have shown little change during the past few* months and are still quite un certain. Advance fall bookings range from ten to twenty per cent below the level o f last year, part o f the discrep ancy being due to the lower price level. This weakness has also had a retarding effect on wholesale buying, dealers preferring to wait as long as possible before or dering when prices are declining as they have been for the past year and when the employment and payroll situation is as unfavorable as at present. Stocks are be ing kept at the minimum, in most cases; hand-to-mouth buying seems firmly established in the wearing apparel industry and no doubt w ill continue so long as dealers ex perience no difficulty with deliveries. The sales that have been made have required addi tional effort on the part o f the salesmen. Several com plaints regarding credit extensions and slow collections have been reported. The knitting industry, makers o f both underwear and outerwear, has been operating at rather satisfactory rates. Operations are down seasonably at present, but have been nearly normal so far this year. W oolen tex tile concerns have reduced operations seasonally from last month. Uncertainty in the raw w ool price situation has been a disturbing factor for some time. &h«e« Expanding productien at Fourth Dis trict factories from May to June con trasted with the decline usually shown at that time and was contrary to the trend shown in the entire country. Output in June and the first six months of this year was 17 and 21.5 per cent respectively below the same Intervals of 1929, despite the improvement in the last month. Production in past years has been low in June, but has increased in July, continuing to improve at a good rate until November which usually shows a sharp urop. It seems as if the seasonal expansion has begun <iT!ghtly earlier than usual. The present situation is a big improvement from the conditions existing earlier this year. Several factories in early July were operating full time and the number of orders booked has been good. Some report that dealers are quite skeptical and are only ordering in small quanti ties despite the lower prices. Comparisons with last year are quite unfavorable. Some difficulty in obtaining par ticular grades of leather has been reported, this in some instances having a retarded effect on production. A slight advance was shown In the price o f hides in June wrbicb averaged only 15.20 cents a pound as against 16.62 cents last year and 22.50 cents in June, 1928. Sole leather declined slightly to 45.5 cents a pound com pared with 52 cents last year and 69 cents two years ago. Otlier Although general business continues to show midsummer dullness, favorable reports regarding operations have been received from a surprising number of small, general manu facturing plants located throughout the District, par ticularly the central part. Several report normal busi ness, with overtime in some cases. Other concerns, chiefly those allied with the automobile industry, have shut dow n entirely fo r a two week or longer period, while som e con tinue at only very reduced rates. The em ploym ent situation has not improved and in Ohio in June was 16 per cent below the same month last year and at the low est point since early 1925. Of the 916 concerns reporting to the Bureau o f Business Research o f Ohio State Uni versity, 525 reported decreases, 321 increases and 70 re ported no change in June. Manufacturing E lectrical Machinery. Employment declined in June instead o f showing an increase as has been reported at that time in former years. Decreasing prices on raw ma terials, particularly copper which was quoted at 11*4 cents as against 18 cents last year, have had a retarding effect on orders. Hardwaret Machinery. year and slightly below several years. Activity production in most cases industry improves. Operations are well under last the average o f the preceding is proportionate to autom obile and will not expand until that Glass. There has been no change in the glass industry other than a further curtailment which is seasonal Operations are only about 60 per cent o f 1929 levels and 75 per cent o f the 1928 volume. The demand for glass products is low because o f the unfavorable conditions existing in the automobile and building industries. A slight seasonal improvement is anticipated during the fall months. Paint. Orders have been rather slow and for small quantities, the chief disconcerting factor being the price situation. Pig lead and shellac prices are much below one year ago, the price o f the latter being lower than fo r 20 years. Linseed oil is slightly higher than in 1929 be cause of the small flax crop last year. Price-cutting has been rather widely reported. Paper. Employment in June declined seasonably and was slightly below last year, but the average for the first 5 THE MONTHLY BUSINESS REVIEW half of 1930 has been three penod of 1929. The number was below last season. There have been reduced and prices a few instances. per cent above the same o f hours worked, however, are indications that stocks have only been lowered in Stoves, Equipment. There is usually a slight decline in employment in June, but this year it was greater than seasonal. No general reduction in prices has been re ported, although price concessions have been made in many cases. TRADE Retail Trad© Retail distribution in June, based on sales of 57 department stores in th^ Fourth District, was at the lowest level for that month since 1922. Sales were 13 per cent below the corresponding month of 1929; all cities showed de creases ranging from six per cent in Columbus to 25 per cent in Akron. Sales for the first six months also were smaller than one year ago, the falling-off being seven per cent in the entire District, with the largest declines in Akron, Toledo and W heeling. How much o f this drop has been caused by the reduction in prices cannot definitely be determined, but an increasing number o f reports of retail price reductions have been received, which, o f course, would accentuate the discrepancy in sales comparisons with former years. Stocks are also considerably below last year, a drop of five per cent being reported in the past month. The declines have been quite general, both in sales and stocks. Accounts receivable showed an increase of two per cent from last year, but collections have been holding up well, and were 0.1 per cent greater than in June, 1929. Sales of retail furniture stores showed an average loss of 39 per cent in June and 27 per cent fo r the first six months. This is much greater than the decline reported tor the furniture department o f department stores. Chain store sales on a unit basis have been holding up rather well in this District. Chain drug stores in the first six months were 1.4 per cent ahead o f the same period o f 1929. Chain grocery sales in this same interval were 0.9 per cent below last year; probably all o f this drop is due to lower food prices. Wholesale Trade Sales o f all wholesale reporting lines exhibited a decided falling-off in June, both as compared with the previous month and with June, 1929. The changes in sales in the first half of this year were groceries—2.5 per cent; drugs— 9.1; drygoods— 14.7; hardware— 14.4 and shoes 26.4 per cent Considerable complaint about the slowness of collections is heard. BUILDING Construction activity in June in the United States, with two exceptions (A pril and July, 1 9 2 9 ), was at the highest point in two years. Contracts awarded, according to the F. W. Dodge Corporation, amounted to $600,573,400, 31 per cent increase from May and 13 per cent from June, 1929. This large improvem ent in June reduced the decreases shown in earlier months o f this year so that in the first Bix months a drop of only 12.5 per cent was shown from the same period o f last year. The improvement was quite general throughout the country, but was not well distributed between the various types o f building. Public works and utilities during June accounted for over 40 per cent o f the value o f all awards and was the only class to show an increase in the first six months o f this year. Residential building was slightly more than half what it was in 1929 and non-residential building was eight per cent under last year. A decrease o f 3.8 per cent was reported in Fourth Dis trict building from May to June in contrast with the increase shown in the entire country. Part of this was accounted fo r by the fact that much o f the new work has taken the form o f gas and oil pipe lines located in the western and central part o f the country, which how ever, has benefited the local steel mills. Fourth District contracts awarded in June totaled $49,240,000, a decrease from last year o f seven per cent. The six months* total, $278,237,000, was only 9.5 per cent below the same period o f 1929, a smaller decline than was reported for the entire country. Residential contracts again declined and in June were 32 per cent and in the first half of 1930, 31 per cent below the same periods of 1929. There have been reports o f increasing inquiries regarding this type o f construction, but it is evident that few have taken definite shape. It is upon this latter type o f construction that many local building supply and lum ber concerns depend, and it furnishes employment for many men during the warmer months o f the year. Little change is reported in the demand for building materials, particulax*ly lumber and brick. Material prices are extremely low, but there has been little change in labor costs. Until the number o f homes available for less than production costs is reduced and the employment situation improves, little change in the building industry is anticipated. Cement production both in June and the first half o f this year has exceeded the same periods of 1929. AGRICULTURE Crops in the district are showing variations which usually develop as the season progresses. R ainfall has been irregular, being excessive in the northeastern counties and much below normal in the southern part o f this terri tory. Crops in several localities have been severely dam aged by drought. The accompanying table shows the esti mated 1930 production o f principal crops o f the Fourth District and the entire country as compiled by the De^ partment o f Agriculture. P roduction o f Principal Crops (000 om itted) Fourth District 1930* 1929 United States 1930* 1929 Corn, bu ................. 177,381 170,082 2,802,442 2,614,307 Total Wheat, bu .... 31,074 38,539 807,265 805,790 Oats, bu ................. 70,925 64,498 1,329,407 1,233,574 Tame Hay, tons .... 4,415 7,168 85,431 101,715 Tobacco, l b s ........... 152,230 146,439 1,597,670 1,520,674 W hite Potatoes, bu 18,448 19,695 398,419 359,796 * Based on July 1 conditions. Total acreage under cultivation was about the same as one year ago, but there has been some change in the 6 THE MONTHLY BUSINESS REVIEW acreage of individual crops. Winterkilling caused con siderable abandonment of wheat fields, many of which were replanted with corn, oats and barley, greater acreage of all three of these crops being planted than in 1929. Potato and hay acreage was below last year. \l3ieat. Because of warm, dry weather, wheat has ma tured somewhat earlier than usual and much harvesting has been done. The July 1 condition indicates a smaller yield than one year ago, the dro£ being greatest in Ohio. The crop in general is short in the straw, but seems to be well filled in most cases. In the entire country the con dition of wheat increased in June and 1930 production was estimated to be 807,000,000 bushels, about the same as was harvested last year and three per cent below the 5-year average production. The acreage under cultivation was about four per cent below last year, but eight per cent greater than the average 1924-28. Stocks of wheat on farms on July 1 were estimated at 46,834,000 bushels, as compared with 45,483,000 bushels one year ago and 26,454,000 bushels, the average carry over on July 1 for the years 1924-28. Corn. Most corn was planted early this year, but be cause of dry weather considerable replanting was neces sary. Some corn is quite small and fields in some sections are thin, but the July 1 condition for the entire District was only two per cent below average. On account of the greater acreage planted there was an increase of 4.3 per cent indicated in the production figures, which was smaller than the 7.2 per cent increase shown for the entire country. Irregularity existed in the several parts of the District. Ohio fields were dry and free from weeds, while in the Pennsylvania fields just the opposite condition pre vailed. In Kentucky the corn crop was slightly below last year and the ten-year average condition on July 1. Oats. The ten per cent estimated increase from last year in the Fourth District oat crop is somewhat larger than that shown for the entire country. It is accounted for by a rather sizable increase in acreage, since the July 1 condition was well below average in all states but Penn sylvania, where it was just average. The crop was headed with short straw because of the limited precipitation. Better fields were reported in the northern and central parts of Ohio than elsewhere. Potatoes. There was a larger planting of potatoes in the entire country and in all states of the District except Ohio, where acreage was five per cent below that harvested In 1929. The condition of the crop was above average in Pennsylvania, but quite a bit below in the other states with a result that estimated production is below 1929 and the average of the past five years. Blight has made its appearance and in some localities insects are more plenti ful than usual. Hay, Pasture. The weather has been good for haying, but bad for growth and both hay production and pasture conditions are below average. Estimated production of tame hay is only about 60 per cent of last year's output. Fruits. It appears that the bulk of the fruit consumed in this District will come from other sections of the coun try, because for the second year in succession the fruit crop is pretty much of a failure. In Ohio and Kentucky the apple crop is about one-third average, while in Pennsylvanla and West Virginia it is about half as large as the average of 1924-28. A rather heavy "June drop” was reported; the crop is one of the smallest in recent years. Peaches, pears and small fruits, except grapes, were much below average. Grapes, raised chiefly in the northern part of the District, is the only one of the fruit crops grown locally which shows a better condition than in 1929. Production estimated from the July 1 con dition report was 22,750 tons in Ohio, and 18,900 tons in Pennsylvania compared with 17,150 and 16,200 tons respectively last year. Tobacco. Up to the middle of July the worst drought on record in the tobacco sections of this District had not been relieved to any appreciable extent and most fields had been materially damaged. While the effect has been widespread, the early set fields have been most affected The leaves are yellowing and in most cases the crop is beyond saving. Plants in the late set fields, however are not very large as yet and may develop into a fairly good crop providing relief is not too long in coming The irregularity in size, age and condition of plants which has been noticed all year has been accentuated so that at present some fields are total losses while others look quite well, with many between the two extremes. The Department of Agriculture states that the acreage of all types of tobacco has been increased 5.1 per cent and the burley acreage 7.4 per cent from that harvested in 1929. This was somewhat less than the estimates re ported earlier this year, considerable planting being pre vented by dry weather. Based on the July 1 condition which was below last year and the average of the previous ten years, production is estimated to be only five per cent greater than one year ago. The condition of the large burley crop averaged 70 per cent, being only 55 per cent of normal in West Virginia 62 per cent in Ohio and 70 per cent in Kentucky. Burley acreage in Ohio is 4.200 or 20 per cent less than in 1929 but Kentucky acreage has increased three per cent or 10,000 acres and Tennessee has Increased its burley acreage 20,000 acres or 40 per cent. While much may happen in the next few weeks to change the tobacco crop situation, it is now evident that the estimated increase in production has been materially reduced. Prices. Prices of most commodities, both agricultural and non-agricultural, continued to decline in June the De partment of Agriculture’s index of farm prices being 123 per cent of the pre-war average, a drop of one point from May as against a three point drop from April to May The declines in general continued in July, a number of com modities such as wheat, oats, cattle and cotton reaching new low levels for the season in response to crop prospects and lower prices of other commodities. The general level of farm prices in mid-July, according to the Bureau of Agricultural Economics, “ was probably several points below the level of June” and, declining since 1928, was at the lowest point since 1922 These falling prices have been quite discouraging, but reductions In retail prices are now being reported which partly offset the effects of the lower wholesale prices. THE MONTHLY BUSINESS REVIEW 7 Fourth District Business Statistics Fourth District Business Indexes (000 omitted) (1923-1925*100) Jan.change change Fourth District Unless June, from June, from Otherwise Specified 1930 1929 1930 1929 3,416 — 5 .7 Bank Debits— 24 cities................. . . 19,326 — 2 .6 Savings Deposits— end of month: 770,245» — 2.2 Ohio— 36 banks.................................. $ 777,414 — 2.1 276,0951 — 0 .6 Western Pa.— 25 banks................... % 279,264 — 0.6 T otal— 61 banks.................................$ 1,056,678 — 1.7 1,046,3401 — 1.8 Postal Receipts— 9 cities....................... % 2,804 — 2 .4 18,858 + 0 .8 Life Insurance Sales: Ohio and P a ....................................... ? 122,433 + 2 .6 753,490 + 5.5 Retail Sales: 138,105 — 7 .0 Department Stores— 57 firms........ ? 22,441 — 13.3 Wearing Apparel stores— 16 firms. $ 1,414 — 15.8 9,043 — 7 .7 Furniture— 50 firms...........................% 734 5,128 — 26.6 — 39.1 Wholesale Sales: 9,781 — 9.1 Drugs— 13 firms................................. ? 1,531 — 6.1 9,743 — 14.7 Dry Goods— 11 firms........ .............. J5 1,403 — 24.5 34,583 — 2 .5 5,666 — 8.3 Grocery— 41 firms..............................JS 10,950 — 14.4 Hardware— 17 firms.......................... $ 1,793 — 23.7 85,628 — 20.3 Building Permits— 27 cities.................$ 15,323 — 31.0 62,161 — 31.4 Building Contracts— Residential.........$ 10,994 — 32 . 5 278,237 9 .5 Building Contracts— Total, All classes $ 49,240 — 7.1 Commercial Failures— Num ber............. 163* + 2.5 1,022* + 0.1 23,811 + 1 3 .9 Commercial Failures— Liabilities........ $ 3,828 —10.0 Production: 23,793 — 17.9 Pig Iron, U. S............................. Tons 2,935 — Steel Ingots, U. S......................... Tons 3,440 — 29.5 18,262 — 15.6 Automobiles— Passenger Cars, U. S. 289,2453 — 35.9 1,895,0 OS* — 31.4 320,019* — 29.1 Automobiles— Trucks, U. S................ 45,771* — 50.9 14,651 —13.1 Bituminous C oa l......................... Ton*! 93,999 — 6 .4 8,087 + 2 5 .7 Cement— 0 ., Wn. Pa., W. V a .. . Bbls. 1,924 + 2.1 Electric Power— O., Pa., K y . .k.w.h. 1,220* + 2.0 6,248* + 2.3 12,144* + 2 0 .2 Petroleum— O., Pa., K y ............ Bbls. 2,556* + 1 4 .5 a — 21.5 Shoe* ............................................ Pairs & — 17.3 + 4 5 .0 28,296 — 15.3 Tires, U. S................................. Casings 7,999 Bituminous Coal Shipments: 13,991 + 2.9 + 7 .9 Lake Eire Ports........................... Tons 5,952 Iron Ore Receipts: 9.752 — 34.7 Lake Erie Ports............................Tons 5,755 — 17.6 1 Monthly Average 4 Jan.-M ay * Actual Numbrr 5 Confidential • M ay * Preliminary Bank Debits (24 cities). ...................................... Commercial Failures (N um ber)........................ ** ** (Liabilities)..................... Postal Receipts (9 cities)................................... Sales— Life Insurance (Ohio and Pa.)............... — Department Stores (55 firm s)............... •* — Wholesale Drugs (13 firm s).................. — “ Dry Goods (11 firm s)......... " — “ Groceries (41 firm s)............ — “ Hardware (15 firm s)........... — “ All (83 firm s)f..................... M — Chain Drugs (3 firms)**....................... Building Contracts (to ta l). ............................... ** “ (residential)...................... Production — Coal (O., Wn. Pa., E. K y . ) . . . . — Cement (O., Wn. Pa., W. Va.). — Elec. Power (O., Pa., K y .)* . . . — Petroleum (O., Pa., K y .)* . . . . “ — Shoes.............................................. *M ay **Per individual unit operated flncludes 3 shoe firms June, June. June, June, June 1930 1929 1928 1927 1926 129 134 126 130 111 109 93 112 112 99 87 79 65 81 70 108 111 114 112 108 146 143 141 125 121 89 100 103 99 98 108 98 104 106 106 80 76 68 61 77 99 86 92 96 100 77 102 95 98 102 94 93 94 97 81 89 86 94 85 103 112 146 103 134 181 125 64 95 120 161 80 91 80 81 92 157 142 160 143 138 127 145 142 128 118 117 121 138 111 101 83 109 73 88 83 21.0 Debits to Individual Accounts (Thousands of Dollars) Butler............... C an ton............. Cincinnati. . . . Cleveland........ Columbus........ Franklin.......... Greensburg. . . Homestead. ... Lexington........ M iddletow n. . . Retail and Wholesale Trade (1930 compared with 1929) D E P A R T M E N T STORES (57) A kron........................................................... Cincinnati................................................... Cleveland.................................................... Columbus...................................................... D ayton.......................................................... Pittsburgh.................................................... T o le d o ........................................................... W heeling....................................................... Other Cities................................................ DUtrict........................................................ W E A R IN G A P PAR E L (16) Cincinnati................................................... Cleveland.................................................... Other Cities................................................ D u trict.................................................. FU R N IT U R E (50) Cincinnati................................................... Cleveland.................................................... Columbus................................................... Day to n ........................................................ T o le d o .......................................................... Other Cities............................................... D iitrict..................................... C H A IN STORE* Drug*— District (3 ) .................................. Groceries— District (6).............. W H OLESALE GR OC E RIE S (41) A kron................................................ ....... Cincinnati................................................... Cleveland.................................................... Erie............................................................... Pittsburgh................................................... T oled o.......................................................... Other Cities............................................... District.......................... W HOLESALE D R Y GOODS ( 1 1 ) .... W HOLESALE DRUGS (1 3 )................. W HOLESALE H A R D W A R E (17). . . WHOLESALE SHOES ( 5 ) .................... •Sales per individual unit operated. Percentage Increase or Decrease C OLL E C TIO N S SALES SALES JuneJuneFirst June 6 Mos. Junc — 24.5 — 10.5 — 16.4 — 5 .6 — 14.5 — 9 .9 — 16.7 — 14.7 — 18.3 — 13.3 — 16.5 — 3 .6 — 7.7 - 1.5 — 7.8 — 4 .8 -1 3 .5 — 9.3 — 11.8 - 7.0 — + + + -1 4 .2 -1 8.0 - — 15.9 — 6.2 — 10.4 — 6.6 — 7.7 -3 0.8 — 38.0 — 31.3 — 26.4 —60.5 — 36.8 —3 9.1 -2 4 .6 -2 1.2 — 22.0 — 19.8 — 14.5 -2 9.5 — 26.6 — 16.6 — 1.5 — 2 .0 + 1.4 - 0 .9 - 2 1 .8 — 4 .0 — 15, 3 — 5 .0 — 4 .9 — 7.6 -1 5 .9 + 0 .3 — 6 .2 — 4.1 — 3 .9 — 3.2 + 3.4 — 2.5 — 14. 7 — 9.1 — 14.4 — 26.4 - 8.3 — 24.5 — 6 .2 — 23.7 — 35.3 Pittsburgh. . . . Springfield. . . . Steubenville... Wheeling Y oungstown. . 6 .0 5 .9 5.3 2.8 5 weeks ending Jutv 23, 1930 116,130 15,817 55,657 482,156 1,001,379 221,572 115,968 47,631 6,220 21,463 16,596 5,623 25,532 15,248 6,590 12,892 22,056 1,394,814 29,169 12,651 229,363 15,244 54,524 81,494 11,922 4,017,711 + o .i — 0.6 — 25.0 — 17.4 — 28.5 — 31.5 — 32.2 — 25.2 — S. 5 — 17.5 — 2.7 — 10.0 -2 3 .4 % change from 1929 — 15.4 + 0 .4 — 11.8 — 13.3 — 7.1 — 1.3 — 11.3 + 1 .7 — 9 .5 — 10.4 — 10.4 — 6 .2 — 11.7 — 17.2 — 8 .0 — 11.1 — 10.9 — 6 .0 — 4 .2 — 15.7 — 19.4 — 16.5 — 12.0 — 9 .6 — 21.7 — 8 .8 (Value o f Permits) — 2.7 — 7.1 3.0 Year to Year to Date, 1930 Date, 1929 (Dec. 31(Jan. 2July 23.) July 24.) 822,626 695,574 84,908 84,611 334,824 379,467 2,675,476 3,087,253 5,763,346 6,206,452 1,269,266 1,285,391 656,669 740,020 274,757 270,162 36,450 40,290 127,888 142,721 103,975 116,095 30,880 32,933 186,200 210,838 88,884 107,406 39,238 42,666 78,465 88,289 115,354 129,497 6,949,567 7,390,935 162,560 169,652 72,302 85,801 1,280,582 1,589,218 85,080 101,834 308,816 350,796 484,901 536,281 69,530 88,810 21,975,492 24,100,044 Building Operations — 1.0 — 2.1 + 2.5 % change from 1929 — 22.2 — 1.8 — 14.1 — 7 .0 — 8 .5 — 1.3 — 17.1 — 2 .2 — 23.5 — 25.8 — 17.6 — 2 .7 — 21.3 — 22.0 — 18.4 — 15.6 — 12.1 + 9 .5 — 7.2 — 17.7 — 18.5 — 16.5 — 9 .0 — 18.7 — 19.2 — 4 .7 A kron............. A shtabula.,. . B arberton ... . C anton........... Cincinnati. . . C leveland.. . . Cleve. Suburbs: Cleve. Hghts. East C le v e .. Euclid.......... Garfield Hghts. Lakew ood... Parma.......... R ocky River fShaker Hghts. C olum bus.. . . Covington, Ky. D a y to n .......... Erie, P a ......... Hamilton. . . . Lexington, Ky. Lim a............... N ew ark.......... Pittsburgh, Pa. Springfield. . . T o le d o ............ Wheeling, W . Va. Youngstow n.. T o ta l........ June, 1930 2,161,819 16.405 24,710 130,140 2,388,095 2,035,925 231,430 464,640 121,693 38,000 195.405 137,075 93,950 513,175 1,035,000 56,100 191,447 339,310 59,655 189,466 9,740 12,925 2,397,326 79,010 1,609,885 72,189 718,435 15,322,950 % change from 1929 — 5.1 — 94.1 — 84.7 — 75.1 — 30.1 — 4 4 .4 Jan.June 1930 6,432,418 195,931 134,552 1,076,577 24,279,542 13,952,225 Jan.June, 1929 11,275,938 426,352 597,039 1,893,555 16,437,000 18,539,750 change from 1929 —4 3 .0 — 5 4.0 — 77.5 — 43.1 + 4 7 .7 — 24.7 + 4 2 .7 + 6 4 4 .8 — 6 8 .9 — 7 3.6 + 1 3 0 .3 — 3 4.0 — 4 9.3 — 20.5 + 2 2 .5 — 30.4 — 57.1 + 5 4 .0 — 6 4.9 — 5 2.6 — 4 7.0 — 9 3 .8 — 52.5 — 74.9 — 13.5 1,927,720 762,566 910,489 366,800 1,002,521 838,551 687,083 2,522,325 3,053,350 412.450 3,333,097 2,655,367 877.451 1,134,855 1,545,977 1,449,080 685,950 837,831 1,127,030 953,590 3,392,825 6,024,100 650,725 3,443,175 4,340,827 965,964 1,430,528 308,455 381,245 18,190,003 892,171 6,901,606 866,459 2,739,177 107,431.207 + 6 9 .9 — 50.7 — 37.2 — 46.5 + 19.7 — 25.6 — 27.9 —68.6 + 8 3 .4 — 31.0 S67t136 443,215 119,875 9,971,454 483,980 6,182,658 524,277 1,914,151 85,627,761 —25.7 — 49.3 — 36.6 — 3 .2 -3 8 .8 — 9 .2 — 6 0.4 + 4 3 .7 —68.6 — 4 5.2 — 45.8 — 10.4 — 39.5 — 30.1 — 20. 3 THE MONTHLY BUSINESS REVIEW g Summary of National Business Conditions By the Federal Reserve Board Industrial production decreased in June by more than the usual seasonal amount and factory employment and payrolls declined to new low levels. The volume of building contracts awarded was large. Prices declined sharply and money rates continued downward. Industrial Production and Employment Index number of production of manufacture* and mineral* combined* adjusted for seasonal variations (1923-25 average — 100). Latest figure — June. 102. Indexes of the United States Bnreau of Labor Statistics <1926 = 100 base adopted by Bu reau). Latest figures June, farm products, 88.9, foods, 90.5, other commodities. 85.7. In June, industrial production showed a further substantial decrease and the Board's index, which is adjusted for ordinary seasonal variations, d e clined to the lowest level since last December. Output o f steel ingots de clined in June and early July more than is usual at this season, while auto mobile production was sharply curtailed to a level considerably below that o f the same period o f the past two years. Cotton consumption, already at a low level, declined further in June. Output o f bituminous coal and copper continued in small volume. W ool consumption and shoe production increased slightly and cement output, as in the preceding month, was at a high level. Factory employment and payrolls decreased further in June. The num ber employed at steel plants and in the automobile, agricultural im plem ent and cotton goods industries declined more than is usual at this season and employment in the woolen goods and lumber industries continued at u n usually low levels. The value of building contracts awarded in June, $600,000,000 a ccord ing to the F. W. Dodge Corporation, was about 30 per cent more than in May and the largest since last July. The increase reflected chiefly unusually large awards for natural gas pipe lines and power plants; the volum e o f contracts fo r residential buildings was somewhat smaller than in May. In early July the total volum e o f contracts was small. Department o f Agriculture estimates, based on July 1 conditions, in d i cate a decrease from last year o f about 20,000,000 bushels in the w inter wheat crop aud a corresponding increase in spring wheat. The corn crop is expected to be about 2,800,000,000 bushels, seven per cent larger than last year and four per cent above the five-year average. Area planted to cotton is estimated at 45,815,000 acres, 2.7 per cent less than last year. Distribution The volume o f freight car loadings in June and early July continued to be substantially below the corresponding periods o f 192S and 1929. P relim in a ry reports indicate that the decline in department store sales from a year ago was o f larger proportions in June than in any previous m onth this year. W holesale Prices 192* 1927 192ft 19M Monthly averages of daily figures for 12 Fed eral reserve banks. Latest figures are aver ages of first 19 days in July. Monthly averages of weekly figures for report ing member banks in leading cities. Latest figures are averages of first three weeks in July. Commodity prices declined more rapidly in June than in any other recent month and the index o f the Bureau o f Labor Statistics, at 86.8 per cent o f the 1926 average, was about ten per cent below the level o f a year ago. Prices o f many important agricultural com m odities and their m anu factures declined further and those o f certain leading im ported raw products (silk, rubber and coffee) reached new low levels. There were also further declines in iron, steel and copper. Prices o f raw wool, hides and raw sugar increased slightly during June. Early in July, prices of meats were stronger but there were further declines in many other commodities. Bank Credit Loans o f reporting member banks in leading cities declined somewhat between the middle o f June and the middle o f July and on Julv 16 were $60,000,000 smaller than five weeks earlier. Loans on securities*decreased by |140,000,000 while “ all other” loans increased by $80,000,000. The banks* investments increased further by about $280,000,000 during this period and were in larger volume than at any other time in the past two years. Member bank balances at the reserve banks increased and in the week ending July 19 averaged $60,000,000 more than five weeks earlier, and at the same time their borrowings from the reserve banks declined by nearly $20,000,000, reflecting an increase in the reserve banks’ holdings o f a c ceptances and government securities, a further slight growth in gold stock and a continued decline in the volume o f money in circulation. Money rates in the open market continued to ease and in the middle o f July rates on 90-day bankers’ acceptances, at 1 % per cent, were at a new low level, while rates on commercial paper at 3— 3y4 per cent were at the low point o f 1924. During July the reserve bank discount rate was reduced at Boston from 3 Vz to three per cent and at Philadelphia, Atlanta and Bichmond from fou r to 3*4 per cent.
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