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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Cleveland, Ohio, August 1, 1931 Vol. 13 Available statistics do not exhibit much change in gen eral conditions in the Fourth District. Operations in June and early July were at a lower level than was evident a month ago, part o f the decline being o f a seasonal na ture. A few industries reported that current operations •ompare rather favorably with last year and in June sales in some lines, particularly wearing apparel, exceeded the same month o f 1930. Following the moratorium an nouncement in late June a decided improvement in senti ment developed locally. Conditions, as shown by retail sales comparisons and unemployment figures, are less favorable in centers of the District greatly dependent on the iron and steel or the automobile industries— Cleveland, Pittsburgh, W heel ing and Youngstown— than in other cities. Retail trade in Cincinnati, Columbus, Akron and Toledo was greater in June than a year ago, despite the sharp reduction in prices. In agricultural communities, very low prices on farm products have proved discouraging, which bumper crop prospects of fruit, grains and other agricultural prod ucts have partly alleviated. The iron and steel industry receded to slightly above 30 per cent o f capacity in July, but operations in Fourth District steel centers were above the average for the en tire country. Automobile production in June dropped much more than seasonally and parts concerns reduced operations accordingly. Tire production has been increasing entirely because of greater replacement demand. Clothing concerns have ex panded operations. Shoe production in the District in June receded slightly from May, but was only three per cent below last year. Bituminous coal production in June increased slightly more than seasonally. Building operations continue to fall off, contracts award ed in June and early July being about half as large as a year ago when the volume also was quite small. Opera tions at brick and tile companies increased in June. Money rates remain easy and favorable to business ex pansion, but loans at reporting banks continue to recede and most banks have found it necessary to reduce the rate o f interest paid oh deposits, the current rate in most large centers now being three per cent. No. 8 ber banks in leading cities also were smaller than a month ago. Demand deposits receded sharply, but time deposits increased. Note circulation of the Federal Reserve Bank of Cleveland showed little change in the period, but re mained relatively high, considering the low level of business activity and lower commodity prices. Savings deposits dropped slightly in June. The number of com mercial failures in the District declined, but there was a decided increase in liabilities of the defaulting concerns. Member Bank Credit. As shown on the accom panying chart, the trend of loans on securities made by reporting member banks in leading cities of this District was still moderately downward in June and the first part o f July, despite the fact that secur ity prices worked upward during the period. These collateral loans are lower now than at any time since early 1928. “ All other’ ’ loans, changes in which reflect chiefly variations in industrial and commercial demand for credit, dropped slightly in the month and in midJuly were lower than since early 1925. There usually is some seasonal expansion in commercial loans in the spring and summer months, but a contraction was shown during most o f 1930 and in only April of this year was there any reversal o f the downward trend in commercial loans. Investment holdings o f reporting banks declined $27,000,000 in the five weeks ended July 22 accompanying a sharp reduction in demand deposits. Despite the con traction, these holdings of stocks and bonds remained un- MEMBER BANK CREDIT r ..... ------- "all c>THER" LOANS TMtNTS -------- LOAN5 i ON SCCURIT!ICS :v \ _ \ 700 X***. 600 /. .•’ * ; 7\ v / V v \ / - ' V t J FINANCIAL The volume o f commercial credit in use in th£ Fourth District receded further in the month ended July 22 and collateral loans and investments made by reporting mem / 500 /M Q AVC. or wtCKiy FIGURES 1926 1927 1928 1929 1930 193! J u ly fig u re s a r e a v e r a g e s o f th e first f o u r r e p o r t dates THE MONTHLY BUSINESS REVIEW 2 usually high. A large part of the investments sold was Government securities. Demand deposits fell $49,000,000 in the six weeks end ed July 22, a drop of 4.3 per cent. Last year in the sim ilar six-week period demand deposits increased $35,000,000 while two years ago an increase of $24,000,000 was reported. From the peak o f this year in early April, demand deposits have fallen $75,000,000. Time deposits advanced from a recent low point of $1,009,000,000 on June 17 to $1,021,000,000 on July 15 and 22. Compared with a year ago, time deposits are $23,000,000 higher. The net reduction in deposits has been less than the drop in credit extended by member banks; consequently, bor rowings at the Reserve bank, which have been very low all year, dropped further in the past five weeks. Reserve Bank Credit The increase o f about $10,000,000 in Government securities owned by this bank in the five weeks ended July 22 marked the first change of any im portance in these holdings in over a year. The increase occurred through participation in the System’s purchases which amounted to ap proximately $80,000,000 in the period. The purchase of these securities more than offset the decline in credit extended by this bank through discounts for member banks and purchases o f acceptances. Holdings o f the lat ter, at $6,879,000, were lower than since 1929, but this is the season of the year when holdings o f acceptances are very low, the upturn usually starting in August. Bills discounted on July 22 totaled only $16,952,000 for all banks in the District, the amount being distributed among 194 out o f a total o f 718 member banks. On account of the large amount o f Government se curities held, total bills and securities o f this bank on July 22, at $96,316,000, were about $10,000,000 above one year ago, and only $10,000,000 below July, 1929. Total reserves have increased seasonally since January and are above one year ago. The amount o f Federal reserve notes in circulation fluctuated only moderately in the past five weeks, but maintained the level attained in the latter part o f June when demand for currency was great. In view o f gen eral business conditions and compared with preceding years, note circulation o f this bank is at an unusually high level, amounting to approximately $200,000,000. MANUFACTURING, MINING Iron and Steel Although steelworks in the Fourth Dis trict were nearer a complete stoppage in the month ended July 15 than at any time since 1921, their position was relatively better than that o f the remainder o f the industry. In the month June 15 to July 15 the industry as a whole receded from an operating rate of 38 per cent to one o f barely 33 per c e n t In the same period Youngs town retreated only from 42 per cent to 40 and Cleve land from 38 to 35 per cent. Pittsburgh declining from 40 to about 33 per cent, made the poorest showing o f any section in the Fourth District. Save for a 41,000 ton steel pipe order there was no outstanding booking. The moderately-good structural business prevalent in some other districts was absent from the Fourth District. Autom obile requirements, or dinarily form ing so large a portion o f the District’s ac tivity, shrank rapidly. Implement and railroad demand represented only a bare, minimum necessity. Sentiment, however, did not reach the depths o f actual production and sales. The success of sheet and strip manufacturers in adopting new classifications, designed to reinforce the market structure, was marked, considering the volume of business. Likewise the attempt o f plate, shape and bar producers to make 1.60c, Pittsburgh, or equivalent, the minimum was construed as an effort to correct the price structure and benefit from improved fall business. Scrap, sometimes barometric, ended its long decline early in July and turned up mildly, heavy melting steel at Pittsburgh regaining a range o f $10 to $11 a ton. Coke and pig iron prices continued moderately steady, con sidering the accumulated stocks and mediocre demand. Both pig iron and steel ingot production declined al most precipitately in June, with the decline somewhat checked, but not reversed in early July. In mid-July it appeared probable that the statistics for that month would disclose a further decline, but not so sharp as in June. June's daily pig iron rate, at 54,59$ gross tons, was the lowest since 1922 with the single exception o f last December. June’s total of 1,637,998 tons made output for the first half o f 1931 11,098,122 tons, or 7,206,492 tons below the first half o f 1930. At the end of June only 91 stacks out o f a total of 303, or 14 fewer than on May 31, were active. June’s steel ingot rate, at 79,843 tons daily, was 17 per cent below that o f May, and like pig iron the lowest since December. First half steel output for 1931 was 15,285,519 tons, the lowest since 1921; a year ago, 23,578,619 tons were produced. In June the steel industry was operating at 37.5 per cent; in the first half year the average was 46.3 per cent. Due to the application o f new sheet prices, the iron and steel composite of Steel jumped to $31.11 the first week o f July, compared with an average of $31.02 in June, but by the third week o f the month the adjust ment in plates, shapes and bars lowered this index to $30.98. Ore Stocks The accompanying chart shows a sea sonally adjusted index o f iron ore stocks at furnaces and on Lake Erie docks at the end of each month in the past eleven years. Stocks at 245 furnaces were represented in the 1931 fig- MILUONS OF TONS 30r~ STEEL INGOT PRODUCTION FIRST © MONTHS 24 . 1 18 h i 111in I I I I ■ THE MONTHLY BUSINESS REVIEW ures, (the number having declined in the past decade as the capacity of new furnaces increased) only 78 o f which were in blast on July 1. Despite the slight reduction in stocks in the past two months, the level is still unusually high for this season of the year, higher in fact than at any time in the period, the nearest approach being in 1921 and 1922 when blast furnace activity declined to even lower levels than at present. These expanding stocks in recent months, however, are not due to larger shipments from the ore ranges, since up to July 1, 1931, only 5,753,259 tons o f ore were shipped from the upper lake ports compared with 15,737,573 tons in the same period of 1930, and total ore receipts in 1930 were 30 per cent below 1929. The increased stocks, there fore, are a result o f less-than-seasonal consumption of iron ore, particularly in the earlier months o f 1931 when little ore was was being received, most ore shipping being done by boat. Ore stocks usually reach their lowest point in April or May, depending on when the Lake shipping season opens, and their peak in November when the navigation year closes. Between December 1 and the opening of navi gation the follow ing spring the reduction in ore stocks has averaged more than 20,000,000 tons, in some years exceeding 25,000,000 tons. In the 1930-31 season, how ever, the contraction amounted to only 14,000,000 tons. In only one other period since the war, 1921-22, has the re duction of stocks been smaller during the closed shipping season than in the past year. Had the consumption of iron ore in the first half of 1931 been up to the average o f preceding years, stocks no doubt would have been in line with those of the im mediate preceding years, or lower, for they were not unusually high when the season closed last November. The recent reduction in the stock index is due to the sharp curtailment in iron ore receipts and not to increased con sumption. Lake shipping this year is at the lowest ebb for a number of seasons; many boats have not operated at all so far. Coal Despite labor disturbances in some min ing districts, production of bituminous coal in June in the Fourth District, at 11,803,000 tons, was 3.3 per cent higher than in May. This increase was greater than seasonal; in five o f the past eight years declines were reported for the period, 3 the other three showing slight increases. Compared with a year ago, however, output was down 16.8 per cent in June and in the first six months a loss o f 18 per cent was reported. Coal stocks remain low, and there seems to be few in dications that either industrial steam users or domestic consumers are stocking for future needs. Prices con tinue low. Loadings of bituminous coal at Lake Erie ports in June totaled 4,171,000 tons, a reduction o f 30 per cent from a year ago. In the shipping season to July 1, 37 per cent less coal was loaded into boats than in the same period of 1930. Automobiles June production of automobiles accord ing to the Department o f Commerce, totaled 249,462 units, a reduction of 20.8 per cent from May, the largest decline for that pe riod on record. In three years, 1929, 1927 and 1924 the May-to-June drop has been 20 per cent, but in the other years back to 1920, the largest seasonal reduction was 9.7 per cent. The Federal Reserve Board’s index of passen ger car production dropped from 74 in May to 60 in June, while the index o f truck production advanced from 101 in May to 103 per cent o f the 1923-25 average, season ally adjusted, in June. Compared with a year ago output was down 25.4 per cent. In the first half year 1,568,478 passenger cars, trucks and taxicabs were produced, the smallest number in any like period since 1922. Com pared with 1930 the reduction was 28.7 per cent and in the same period o f 1929, 3,225,000 cars were produced. Output o f cars in April and May slightly exceeded retail sales for those periods, which partly accounts for the re duction in June output. Little change from the June levels was indicated by Cram’s weekly production reports for the first three weeks o f July, output being slightly above 60,000 cars a week. In the third week o f July last year, when some factories were closed entirely, output was estimated to be 36,788 cars. Production on new models, in some cases, counter acted the shut-downs and reductions at other factories. In 1930 the June-to-July reduction was 20 per cent, but in 1929 it was only eight per cent which is more nearly the average seasonal reduction in the past decade, one year, 1924, showing an increase. New passenger car registrations in principal counties o f the District continue to show large losses from similar periods o f preceding years. June registrations were 30.6 per cent below the same month last year in ten counties and in the first six months a reduction o f 31.8 per cent was reported. Rubber Tires, Greater-than-seasonal improvement was reported in the rubber and tire industry in June, though the upward movement from May was rather gradual. Employment at 25 re porting factories increased one per cent from May in con trast to no change shown at that time of the preceding five years, but the number employed was still 24 per cent below one year ago. The improvement was entirely due to greater demand for replacement tires, which in June were being produced at an estimated annual rate of 42,900,000 casings, com- THE MONTHLY BUSINESS REVIEW 4 pared with an annual rate of 35,800,000 casings in Jan uary. W hile a part o f this expansion is seasonal, the upswing has exceeded the movement in similar periods of preceding years. Tire production in May, the latest available, was 4,554,000 units, less than one per cent below output in May, 1930. In the first five months 18,415,000 casings were made, according to the Rubber Manufacturers Asso ciation, a drop o f nine per cent from the same period of last year. Stocks of tires, after allowing for seasonal variations, showed a very slight increase in the latest month for which figures are available, but were lower than on any similar date since 1925 and, at 8,250,000 casings, were over 5,000,000 casings below the peak in ^ l9 2 9 . The upward movement of stocks this year has been quite mod erate, inventories not showing near the expansion ap parent in other recent years. Some strengthening o f prices on better grade tires was reported in June, though lower grade tire prices were reduced five per cent in the month. Imports of crude rubber to the United States in June, at 45,776 tons, exceeded the same month o f 1930 by about seven per cent. This was a decided increase from May when only 31,720 tons were received. In the first half year imports were 238,225 tons, a drop of 11.7 per cent from the same period o f 1930. Rubber prices continue very depressed, averaging 6.32 cents a pound in June, just about half as high as a year ago. In the third week of July prices were little changed from the June level. Shoes Preliminary shoe production figures for June indicated a slight falling-off in operations in the Fourth District, the drop from May being about three per cent. The sea sonal movement from May to June in the past eight years has been quite irregular; in four years rather sizeable increases were shown, but in the other years decreases were reported. Output in June was about three per cent below the same month last year and in the first half year production was 3.2 per cent below the same period o f 1930. In the entire country shoe production in June was at a slightly higher rate than in May. Despite the slight drop in June, shoe manufacturers in the southern part o f the District seem more optimis- AUTOMOBILE PRODUCTION THOUSANDS Of CARS____________________________ __________________ _ FIRST 6 MONTHS 1= 150 100' 50 m mm mu n l l l l l 1921 1922 1923 1924 1925 1926 1927 1928 1929 >930 1931 tic than fo r some time. Prices o f shoes have not ad vanced, but prices on several grades o f leather have stiffened recently and some types, particularly upper grades, are rather scarce. Hide prices in June averaged 10.02 cents a pound compared with 8.38 cents in May. Clothing Expansion contrary to the usual sea sonal trend, characterized the clothing and textile industries o f this District and most other parts o f the country during June and the first part o f July. Employment at 46 concerns in the Fourth District was one per cent greater than in May in contrast to a seasonal reduction o f that amount shown in the preceding five years. June employment, however, was still 11 per cent less than in the corre sponding period o f 1930. Greater retail demand for clothing and wearing ap parel prompted buyers to replenish their stocks which have been declining gradually for some time. The re sult was increased activity at clothing factories which necessitated the purchase o f materials, for manufacturers also have allowed their stocks to decline. Rush orders to textile mills found them unable to meet the imme diate demand. The material shortage has made it d if ficult for clothing manufacturing plants to get into pro duction, and several complaints concerning the tardiness of delivery have been received. Consumption o f raw wool has been in large volume, but prices continue at very low levels. In textiles, prices o f materials used in men’s wear are less satisfactory than in other fabrics. Makers o f knit wear reported little change in opera tions in the past month. Other Manufacturiiig Operations in most o f the other-thanaforementioned industries o f this Dis trict in June and the first fa r t o f July showed little change except for more-or-less seasonal con tractions, compared with a month ago. Industrial em ployment, however, in Ohio declined two per cent from May, according to the Ohio State University Bureau o f Business Research, in contrast to an average increase of one per cent from May to June in the preceding five years. The index based on demand for workers at mu nicipal free employment agencies also dropped about the seasonal amount in June despite the prevailing low level of this index since the first o f the year. Activity at brick and tile concerns expanded in June, employment increasing three per cent in contrast to littl« change shown in that month o f recent years. Glass production declined more than seasonally, though the demand for glass containers— particularly for food — has held up quite well. Demand for china and dinnerware receded rather sharply in June. Industrial paint man ufacturers report generally unsatisfactory sales, but makers o f household paint state that sales have com pared quite favorably with other recent years. Operations at electrical supply companies declined in June, but demand for seasonal electrical appliances has held up quite well. Hardware and machine tool mak ers, particularly those companies closely allied with the automobile industry, reported a rather decided drop in June. Producers o f engineering and power machinery showed a sharp drop in operations. Sheet metal workers THE MONTHLY BUSINESS REVIEW also reported a greater-than-seasonal drop in activity in June. Paper and boxboard prices on lower grades fell in June and operations declined more than seasonally. Produc tion is at about two-thirds capacity. Trade Retail trade, as reflected in department store sales, was rather irregular in various sections of the District in June, but the entire group o f 56 large stores reported a loss of about six per cent in total sales from June, 1930, On a daily average basis, however, the decline was nearly ten per cent, since there was one more business day m June this year than in 1930. Compared with May, the reduction was greater than seasonal, the adjusted index falling four points in the month to 81.5 per cent of the 1923-25 monthly average. In the first six months sales were about nine per cent below the same period o f last year. Four individual cities, Akron, Cincinnati, Columbus and Toledo, reported larger sales in June than a year ago, but in the other cities where the iron and steel and au tomotive parts industries account for the bulk o f indus trial employment, rather sizeable losses in retail trade were observed, sales at Cleveland being down 8.2 per cent, at Pittsburgh 10.5 per cent, Youngstown 13.2 per cent and W heeling 6.3 per cent. Not all individual departments shared equally in the losses, a few, particularly those selling articles for con sumption, showing gains from June, 1930. Glove and millinery sales were considerably larger in June than a year ago, shoe sales increased one per cent; wom en’s wearing apparel showed a loss o f only five per cent from last June; men’s clothing sales were up four per cent and men’s furnishing sales were about on a par with last year. The retail dollar value of stocks continued to recede and on June 30 was only 74 per cent o f the 1923-25 monthly average. This was a reduction o f 17 per cent in the past year, not all o f which represents a contrac tion in the size o f stocks. In connection with the re duction o f sales and stocks, much o f the discrepancy is due to lower prices now prevailing, several stores stat ing that the number o f transactions has compared favor ably with other recent years. The new Fairchild index o f retail prices indicates that department store prices have dropped nearly nine per cent since the first o f the year. Collections have shown some falling-off recently, av eraging only 32.3 per cent in June o f the accounts out standing at the end o f May. Chain grocery and drug sales in June were 0.3 per cent and 2.7 per cent less respectively, on a unit basis, than in June, 1930, and in the first half year showed volume losses of 3.0 and 1.1 per cent. A llow ing for the fact that retail food prices were 20 per cent lower in June than a year ago, according to the Department of Labor, chain grocery sales have held up remarkably well. Wholesale trade in the Fourth District continued in very reduced volume, though grocery sales in June were six per cent greater than in May. In the first six months drug sales declined seven per cent, groceries 17, hard ware 23, and dry goods 26 per cent. 5 Building Despite the unusually small amount o f building that has been done in the first part o f 1931 as compared with similar periods o f the past decade, new construc tion started in June in the Fourth District showed a much greater-than-seasonal contraction from May, the decline being 30 per cent. Total contracts awarded in the month were valued at $25,484,040, just about half the value of contracts awarded in the same month o f 1930. Awards in the first half year were valued at $159,619,000, a re duction from the same period o f 1930 o f 43 per cent. Contracts let in the second quarter compared more fa vorably with the same period of last year — 33 per cent, than in the first quarter when a loss of 53 per cent was reported. Of the three m ajor classifications, residential building in the first six months made the best comparison with the same period o f 1931, though it showed a loss o f 34 per cent. June residential building was 45 per cent below June last year. Civil engineering undertakings in the sec ond quarter declined 26 per cent from the same period of 1930; for the first quarter this class of construction showed a loss o f over 50 per cent. Larger volumes of bridge work, railway building and water front develop ments than a year ago were insufficient to offset the large losses elsewhere, principally in highway and powerplant construction. Not one o f the important cities showed larger under takings in the first half-year than were reported in the like period o f 1930. The largest declines were regis tered in Pittsburgh, Akron, Cincinnati and Dayton. Con templated work continues in very limited volume, and in the first six months was less than 50 per cent o f the volume reported in the same period o f 1930. In the 37 states east o f the R ocky Mountains build ing activity in the first half of the year (according to the F. W. Dodge Corporation) was 31 per cent below the same period o f 1930, residential building showing only a loss of 15 per cent, with public utility work down 30 per cent. Non-residential building was 42 per cent smaller in the first six months than a year ago. No change from the steady downward movement wa« apparent in the first half o f July, awards in this Dis trict being only $13,000,000 compared w^ith $55,000,000 in the entire month of June last year and $25,000,000 in June, 1931. Building costs continue to recede according to the Aberthaw Index which dropped five points in the second quarter to the lowest level since 1922. Agriculture Agricultural conditions in the Fourth District are gen erally above average, weather in June and early July being very favorable to crop growth. The July 1 fore cast of the Department o f Agriculture indicates that the six principal crops of the District will average better than 30 per cent above the harvest of 1930 when drought conditions so reduced yields in this section. Abnormally low prices are very disheartening, but this has been off set in part by the large local crop outlook, and con di tions in agricultural localities are more favorable than in industrial centers where much unemployment pre vails. THE MONTHLY BUSINESS REVIEW 6 per cent below last year’s harvest, despite the fact that a 2.8 per cent larger acreage was sown this spring. P R O D U C T IO N O F P R IN C IP A L C R O P S (000 o m itte d ) ------- F o u rth D is t r ic t------% ch a n g e fr o m 1931* 1930 1930 C orn b u .......... ....... 191,541 ..... 47,986 W h ea t bu O ats, b u .................... 78,126 T a m e hay, ton s.. 5,261 T o b a c co , lbs. .... 173,472 P o ta to e s, b u .......... 19,182 -B a s e d on J u l y 106,417 33,311 77,746 3,605 139,879 15,619 + 8 0 .0 + 4 4 .1 + 0.5 + 4 5 .9 + 2 4 .0 + 2 2 .8 ———U n ite d S tates ------% ch a n g e fro m 1931* 1930 1930 2,967,953 869,013 1,306,267 79,107 1,524,739 396,451 2,093,552 863,430 1,358.052 1*504,981 343,236 + 4 1 .8 + 0.6 — 3.8 "t" i*® + J-J r 15.5 1 c o n d itio n . Wheat. Production of wheat, in the Fourth District, practically all of the fall sown type, was estimated to be 47.986.000 bushels, an increase of 44 per cent from the harvest of last year, and is one of the largest crops ever raised, comparing with an average harvest in the five years 1925-29 of 32,275,000 bushels. Practically 90 per cent of the wheat raised in this District is produced in Ohio where the yield is forecast at 42,975,000 bushels or 25 bushels per acre. This is a record figure, and is only exceeded by one state, where the crop is o f minor impor tance. The Ohio wheat acreage remaining for harvest was 1,719,000 acres, an increase of about ten per cent from a year ago. There was practically no abandon ment because of winter killing this year. Foreign wheat production is estimated to be about nine per cent below last year, but this is offset by large stocks in many sections. Stocks of old wheat on United States farms on July 1 were estimated to be 32,121,000 bushels or 3.7 per cent of the 1930 crop. This compared with 47.161.000 bushels on farms July 1, 1930, This favor able stock situation is more than counterbalanced by the large carryover o f grains at elevators and mills. Corn. The unusually small corn crop of 1930 caused farmers to increase the acreage planted to this crop in practically every state, estimated acreage for the entire country being over four per cent higher than was planted in 1930, and a larger area than has been planted since 1917. The July 1 condition figure was decidedly above average in the states of the District and the entire coun try. Higher-than-average temperatures in June and the first part of July and enough rainfall in most sections caused corn to grow rapidly. Production in the District, estimated from the acreage and July 1 condition figures, was 80 per cent above the harvest of last year and over 7.500.000 bushels larger than the average harvest o f the five years 1925-29. Some irregularity is observed in different sections of the District with slight insect dam age reported, but on the whole, the crop condition is very good. Oats. The oat crop of the District is estimated to be only slightly above the harvest o f last year, but is in much better condition than in 1930, for about seven per cent less acreage was sown to oats this spring than a year ago. Indicated production, at 78,126,000 bushels, compared with a five-year average harvest of 89,171,000 bushels. Good yields are expected in the District, though winds and rain have caused lodging in some sections. In the entire country, the oat crop is estimated to be 3.8 Potatoes. The potato crop in the District was esti mated to be slightly below average, but over 20 per cent larger than last year’s harvest when the crop was so affected by drought. Acreage planted in Ohio was seven per cent larger than in 1930 and in Pennsylvania an in crease of two per cent was reported. In the United States acreage is estimated to be over 10 per cent above last year. Hay and Pasture. Yields o f tame hay in this territory were estimated to be 5,261,000 tons, an increase o f 46 per cent from the small crop o f 1930, but still slightly below the 1925-29 average crop. Acreage was about the same in both 1930 and 1931. Tobacco. Acreage planted to tobacco in the United States is about one per cent above the record acreage harvested in 1930, but about 17 per cent above the av erage area harvested in the five years 1925-29. Acreage of Burley tobacco, the principal type raised in this Dis trict, is 13 per cent above one year ago, the increase in Kentucky alone being 51,000 acres, or 15 per cent, to a total of 391,000 acres. The condition o f the crop on July 1 was 73 per cent o f normal in Kentucky compared with 70 per cent on the same date last year. In Ohio, acreage of cigar-type tobacco was above one year ago, and the condition of the crop was also higher. In Pennsylvania growers reduced their acreage one per cent, but the plants were set under ideal conditions, and the crop, estimated at 57.772.000 pounds, is about 45 per cent above the 1930 karvest. In Kentucky 1931 production of all types of tobacco is estimated to be 447,370,000 pounds, an in crease o f 108,000,000 pounds or 32 per cent. The increase indicated in total United States production is about 19,000,000 pounds, or 1.3 per cent, the large in crease in burley types being offset by a reduction o f nine per cent in the indicated production o f flue-cured types. Fruits. All types of fruit raised in the Fourth District promise large crops. The July 1 forecast for apple pro duction in Ohio is 12,600,000 bushels which is about dou ble the average production o f preceding years, and com pared with 3,500,000 bushels harvested in 1930, when the crop was unusually small. The Pennsylvania crop is estimated at 11,946,000 bushels, with a July 1 condi tion of 68 compared with a ten-year average condition of 54 per cent. The peach crop indicated by the July 1 condition is the largest on record, being estimated at 2,392.000 bushels in Ohio, or 76 per cent above the ten-year average. Much thinning is being done in many orchards. Pears are above average and the grape crop is quite prom ising. Cherries also were very plentiful. Canning Crops. Vegetable crops grown for commercial canning were above average, particularly with regard to corn and tomatoes, both favorably affected by the warm weather. Corn acreage planted has been reduced slight ly, but tomato acreage is reported 28 per cent below 1930. The pea crop was the smallest in 13 years. THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics Fourth District Business Indexes (000 om itte d ) change from 1930 -2 5 .6 Jan .-June, Fou rth D istrict U nless O th erJune, wise Specified 1931 1931 15,920,000 B ank D ebits— 2 4 cities ............ 3 2,540,000 Savings D ep osits-en d o f m on th : 765,9771 28 selected banks, O ., W . Pa. 3 766,421 + 0 .5 17,083 P ostal R eceip ts— 9 c i t i e s . . . . 3 2,626 — 6 .3 Life Insurance Sales: — 1 5 .5 613,848 O hio, P a .......................................3 103,451 R e ta il Sales: 117,483 — 5 .9 D ep t. Stores— 56 firm s .......... 3 19,808 7,179 W earing A p parel— 13 fir m s ..3 1,235 — 2.1 — 1 9 .8 5,144 F u rniture— 51 firm s................ 3 752 W holesale Sales: 9,067 — 8.8 D rugs— 13 firm s........................3 1,397 8,195 — 1 8 .5 1,334 D ry G ood s— 11 firm s............. 3 — 1 1 .9 27.128 G roceries— 40 firm s.................3 4,692 — 1 6 .3 8,409 H ardw are— 17 firm s................3 1,501 B u ilding C on tracts— 40,843 R esid en tia l.................................. $ 6,073 — 4 4 .8 159,619 B uilding C on tracts— T o t a l . . . 3 25,484 — 4 8 .2 C om m ercia l Failures— 47.128 + 1 8 6 .5 L iabilities. . . .................. . . . . .3 10,969 — 15 .3 C om m ercia l Failures— N u m ber 138* 1,1842 P ro d u ctio n : — 4 4 .2 11,098 1,638 Pig Iron , U . S .................. T o n s 15,259 Steel In gots, U . S.. . . . . .T o n s 2,076 — 3 9 .7 1,310,4352 — 2 7 .2 A u tom ob iles— Pass. Cars U . S. 207 ,7983 255,2272 A u tom ob iles— T r u c k s. .U . S. 41 ,3 0 4 a — 1 5 .0 77,009 B itu m in ou s C o a l.............. T o n s 12,190 — 1 6 .8 C em ent— O ., W . Pa., V . Va. .............................................. Bbls. 1,505 —21.8 4,984 E lectric P ow er— O., Pa., K y ., — 12.2 ......................................K . W . H . 1,0713 5,777* — 2 7 .1 P etroleu m — O., Pa., K y . Bbls. 1,863® 9,574* 5 — 2 .9 5 Shoes ................................... Pairs — 0. 8 18,415* T ires, U. S..................C a s in g s 4 ,5 5 4 8 B itum inous C oal Shipm ents: — 2 9 .9 8,855 Lake Erie P o r t s .............. T o n s 4,171 Iron Ore R eceip ts: — 5 8 .8 2,977 Lake Erie P o r t s .................T o n s 2,369 4J a n u a ry-M a y 1 M o n th ly A verage 3C on fidential ^Actual *M a y change from 1930 — 1 7 .6 + 1 .4 — 9 .4 — 1 8 .5 — 9 .2 — 9 .7 — 2 1 .5 — 7 .3 — 2 6 .1 — 1 6 .8 — 2 3 .2 — 3 4 .3 — 4 2 .6 + 9 7 .9 + 1 5 .9 — 3 9 .4 — 3 5 .9 — 2 9 .6 — 2 3 .5 — 1 8 .1 — 7 .5 — 2 1 .2 — 3 6 .7 — 6 9 .5 — — — — — — — — — — 4 .4 5 .1 1 1 .5 6 .0 1 0 .8 0 .6 1 1 .2 14 .3 12 .3 9 .2 + 1 .6 — 4 .2 — 2 .2 — 8 .7 — 10 .3 — 9 .7 — 1.1 — 2 4 .9 — 1 6 .9 — 3 4 .8 — 4 .6 — 5 .9 — 1 9 .9 — — — — — — — — 2 .7 — 0 .3 — 1 .1 — 3 .0 — 2 7 .1 — 1 1 .8 — 1 7 .9 — 4 .3 — 1 1 .4 — 1 0 .3 — 1 1 .9 — 18 .5 — 8 .8 — 1 6 .3 — 2 9 .6 — 1 7.3 — 1 9 .9 — 7 .0 — 1 4.3 — 1 6 .3 — 1 6 .8 — 2 6 .1 — 7 .3 — 2 5 .2 C in cin n ati. . . . C le v e la n d ......... D a y t o n ............. E r ie .................... F ra n k lin ........... H a m ilto n ......... H o m e s te a d .. . . M id d le t o w n .. . Percentage Increase or D ecrease SA LE S SALES STOCKS JuneFirst Six JuneJunc M on th s June 3 .6 4 .0 8 .2 0 .5 10 .5 2 .4 6 .3 1 3 .2 9 .6 5 .9 Debits to Individual Accounts — 3 .2 — 9 .3 (1931 com p ared w ith 1930) + + — + — + — — — — (1923-1925— 100) [une, June, June, June, June, 1931 1930 1929 1928 1927 Bank D ebits (24 cities). 129 94 126 134 130 C om m ercia l Failures (N 112 109 95 93 112 ?Q 249 87 65 81 101 111 108 114 112 Sales— I.ife Insurance (O hio & P a .). 124 146 143 125 141 ” — D epartm en t Stores ( 5 3 ) . . . . 89 103 81 100 99 ” — W holesale Drugs ( 1 3 ) .......... 98 108 90 104 106 62 50 82 77 69 76 86 94 96 100 65 77 102 95 98 71 82 95 93 95 84 85 86 89 94 B u ilding C on tracts— T o t a l................................ 103 112 53 134 146 64 ” ” — R esid en tia l.................... 35 95 125 120 P rod u ction — Coal (O ., W . Pa., E. K v .).. . . 67 91 80 80 81 — Cem ent (O ., W . Pa., W.' V a .). 125 160 157 142 143 ” — Petroleum (O ., Pa., K y . ) * . .. . 101 138 121 117 111 — Elec. Pow er (O ., Pa., K y .) * . . 145 142 128 127 128 ” — Sh oes................................................ 68 73 88 83 109 *M ay. **P er individual unit operated. — 3 8 .4 Wholesale and Retail Trade D E P A R T M E N T ST O R E (56) Akron................................................................. Cincinnati........................................................ Cleveland......................................................... Columbus......................................................... Pittsburgh........................................................ Toledo............................................. .................. Wheeling........................................................... Youngstown.................................................... Other Cities.................................................... District.............................................................. W E A R IN G A P P A R E L (13) Cincinnati........................................................ Other Cities...................................................... District................................................................ F U R N IT U R E (51) Cincinnati.......................................................... Cleveland............................................................ Columbus........................................................... Dayton................................................................ T o le d o ................................................................ Other Cities.................................................... District................................................................ C H A IN STO R E S* Drugs— District ( 4 ) ....................................... Groceries— District ( 6 ) ................................ W H O L E S A L E G R O C E R IE S (38) Akron................................................................. Cleveland......................................................... Erie....................................................................... Pittsburgh............................ ........................... T o le d o .................... ............................................ Other Cities...................................................... District................................................................ W H O L E S A L E D R Y GOODS ( 1 1 ) . .. . W H O L E S A L E D R U G S (1 3 )................... W H O LESALE H A R D W A R E ( 1 7 ) .... *Sales per individual unit operated. 7 — — — — — — — — — — 7 .3 12 .5 2 4 .1 2 0 .4 1 5 .9 1 7 .2 1 3 .2 1 7 .9 1 4 .8 1 7 .0 — 2 .2 — 1 1 .3 — 8 .7 6 .9 2 4 .2 2 0 .3 3 0 .2 2 1 .4 1 0 .4 2 1 .5 — ' 2. 8 — 2 5 .3 — i-6lS P ittsb u rgh . . . . Steuben ville. . . T o l e d o ............... W h e e lin g .......... Y o u n g s to w n . . . Z an e sv ille ......... 5 weeks ending July 22, 1931 94,188 9,390 43,684 379,035 766,873 168,302 89,071 37,112 4,319 13,157 4,477 22,851 11,840 5,821 8,874 14,511 837,815 19,977 10,027 149,613 9,848 42,227 63,227 10,707 2,816,946 (T housands o f D ollars) Y ea r-to-d a te Y e a r-to -d a tc % change Jan. 1 to Jan. 2 to from July 22, July 23, 1930 1931 1930 — 1 8 .9 546,620 695,574 60,934 84,908 — 4 0 .6 334,824 253,082 — 2 1 .5 — 2 1 .4 2,373,090 2,675,476 4,736,807 5,763,346 — 2 3 .4 — 2 4 .0 1,123,494 1,269,266 656,669 — 2 3 .2 553,412 274,757 214,115 — 22 .1 — 3 0 .6 26,555 36,450 — 2 0 .7 76,513 103,975 26,709 30,880 — 2 0 .4 — 1 0.5 186,200 142,364 — 2 2 .4 90,884 73,704 — 1 1 .7 33,579 39,238 62,797 78,465 — 3 1 .2 — 3 4 .2 84,813 115,354 — 3 9 .9 6,949,567 5,345,428 128,640 162,560 — 3 1 .5 72,302 — 2 0 .7 58,533 1,020,853 1,280,582 — 3 4 .8 — 3 5 .4 61,203 85,080 — 2 2 .6 308,816 255,435 — 2 2 .4 361,702 484,901 — 1 0 .2 62,210 69,530 — 2 9 .5 17,682,592 21,849,604 % change from 1930 — 21 .4 — 28 .2 — 24 .4 — 11 . 3 — 17,.8 — 11 .5 — 15 . 7 — 22,. 1 — 27,.1 — 2.6..4 — 13, > — 23, 5 — 18, 9 — 14, 4 — 20. 0 — 26. . 5 — 23 1 — 20. 9 — 19. 0 — 20. 3 — 28. i — 17. — 25 4 — 10. 5 . . _ 1 9 . .1 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions (By The Federal Reserve Board) Industrial production showed more than the usual seasonal decline in June, and factory employment and payrolls decreased. Wholesale prices, which had continued to decline until the end of May, advanced in June, but for most commodities declined again in the first half of July. Production Index number of industrial production, adjusted for seasonal variation, (1923-1925 = 100) Latest figure, June 86. indexes o f factory employment and payrolls, without adjustment for seasonal variation. (1923-1925 average = 100). Latest figure, June employment 75.4, payrolls, 67.9. A decrease in industrial output from May to June was reflected in a. de cline in the Board’s index of industrial production, which is adjusted for seasonal variations, to 86 per cent of the 1923-1925 output, as compared with 89 per cent in May. Taking the second quarter of the year as a whole, pro duction has averaged about four per cent above its low level in the last three months of 1930. The reduction of activity in June was most marked in the iron and steel industry, with steel plants operating at 38 per cent of capacity. Automobile output declined further, and there was some recession in production of lumber, meat products, and flour. Petroleum output, however, was not reduced. Activity at textile mills and shoe factories continued in relatively large volume; in the woolen industry, activity was sustained at the unusually high level of May and the decline in the consumption of cotton was not in excess of the usual seasonal amount. During the first half of July, there were further reductions, partly seasonal in nature, in output of steel, automobiles and lumber. Factory employment was further reduced by nearly three per cent and payrolls declined by six per cent between the middle of May and the middle of June. The largest decreases were in the steel, machinery, and women's clothing industries, while reductions at automobile plants and cotton mills were partly seasonal in character and employment at woolen and hosiery mills increased. Building contracts awarded in June were somewhat larger than in May, but declined again in the first half of July. Since the early spring, awards have not increased as much as is usual for the season. In residential building there has been relatively little change for about a year and a half, except for seasonal fluctuations, and the decline in construction has been chiefly in other types of building, principally public works and utilities. Distribution At department stores, daily average sales were seasonally smaller in June than in May. Freight car loadings were also reduced, reflecting principally a further reduction in loadings of miscellaneous commodities. Prices Monthly averages of weekly figures for reporting member banks in leading cities. Latest figures are averages o f first three weeks in July. MllUOWS OF DOUGHS 5500 MIH-IO»S OP DOLLARS R ES ER V E BANK CRi: d i t a n d f a c t o r s in c h )\KGES 5000 3500 Money in Circulation N 4000 2500 Gold Stock______ _ / ' X woo 2500 _______ ^ ~ MemberBank Reserve Balances. 1500 tooo w ... . / A l iReserve Bank Credit V j \ ___ 500 0 0 Monthly averages of daily figures. Latest fig ures are averages o f first 19 days in July. During June wholesale prices of many commodities advanced considerably after having reached low levels late in May and early June. Prices of live stock and meats increased, and after June 21 there were rapid advances in prices of raw materials important in world markets, especially cotton, hides, sugar, silk, copper, silver and rubber. Subsequently, however, most of these prices re ceded somewhat, although in mid-July they were, in general, above their lowest levels. The price of wheat declined during June and the first half of July, as the domestic price became adjusted to world levels. Bank Credit At reporting member banks in leading cities, loans on securities con tinued to decline between the middle of June and the middle of July, while all other loans increased by $140,000,000. This increase was concentrated at New York City banks, and was largely in the form of acceptances pur chased in the open market. Member banks’ investments continued at about the same level as in May and early June. Notwithstanding a further addition of $77,000,000 to the country’s stock of monetary gold between the weeks ending June 20 and July 18, there was no decrease in Federal Reserve bank credit outstanding. During the period the Reserve bank’s portfolio of United States securities was increased by $75,000,000 while their combined holdings of acceptances and of discounts for member banks decreased by approximately the same amount. The gold inflow provided member banks with funds to meet an added demand for currency, as well as to increase their balances with the reserve banks. There was also a considerable growth in foreign bank deposits with the reserve banks. Money rates continued at low levels.
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