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I----- -- \ MONTHLY BUSINESS REVIEW PA. I 0M,° / } Covering financial, industrial, and agricultural conditions in the ^ Ky, V Fourth Federal Reserve District yt Federal Reserve Rank of Cleveland Vol. 16 Cleveland, Ohio, August 31, 1934 W ith m ost of the m a jo r lines of trade and industry in the fo u rth district show ing distinctly greater-thanseasonal declines in J u ly and the first part « f A ugust, the level of business activity at present is not far above th at prevailing at the be ginning of the year. Com parison of m any current production statistics w ith a year ago at this tim e is unfavorable, b u t operations last sum m er were a t an u n usu a lly h ig h rate for th at season of th a t year, being stim u lated by the fact th a t the spring expansion was delayed and “ Buy N ow ” programs, fear of inflation, processing taxes, etc., caused an abnor m al expansion w hich was follow ed by a decline of sizable proportions in the fa ll and early w inter, to perm it the absorption of surpluses created in the sum m er m onths. In contrast w ith this reduction in the m ajo r lines of activity reports from the sm all general m a n u fa ctu rin g industries located in the less im p o rta n t cities of the d istrict indicate th at operations have held up quite well for this season of the year. O u tp u t of autom obiles in J u ly was 17 per cent above the u n usu a lly active m o n th in 1933, b u t the gain was m aterially below the 62 per cent increase shown for the first seven m onths. Car assemblies held up quite w ell in the first three weeks of A ugust, altho ug h a dow nw ard trend was exhibited. D em and for parts and accessories tapered off and operations at local plants were curtailed. Inq uirie s for new m achinery, tools and m aterials for the 1935 models are be ginning to appear. The falling-off in steel production in J u ly from the h ig h rate at the close of Ju n e was the sharpest oi? record and operations in the th ird week of A ugust approxim ated 21 per cent of capacity. A bsorption of the large stocks of steel b u ilt up in Ju n e , prior to ths> anticipated price increase, was som ewhat slower than expected, and buy ing in the latte r part of A ugust, ex cept for governm ent projects, was lim ite d. Production of rubber tires and rubber products de clined in J u ly and A ugust, according to reports, and operations at local factories were un der a year ago at this tim e. The large inventories b u ilt up in the early m onths of this year are being worked off, b ut still are a form idable factor. R e ta il sales at departm ent stores th ro u g h o u t the dis trict declined at a greater-than-seasonal rate and the adjusted index in J u ly was slig htly above the low p o int No. 8 of the year touched in Jan u ary . B uying has been cur tailed generally in recent weeks despite the fact th a t retail prices have exhibited a slight dow nw ard tendency for the past four m onths. E m ploym ent generally was reduced in J u ly at a greater-than-seasonal rate and the falling-off was ex ceeded by the drop in pay rolls because of a reduction in the num ber of hours worked at m any plants. In con trast w ith a year ago considerable im provem ent in both em ploym ent and pay rolls is still evident. Electric power production in the central in d u stria l region of the country was slig htly below a year ago at this tim e w hen dem and was u n u su a lly great, b u t in the first six m onths electric power production in Ohio, western Pennsylvania and eastern K en tu ck y was 20 per cent ahead of the same period of 1933. The num ber of com mercial failures in this section in J u ly was about h a lf as great as a year ago, w hile the re duction in the first seven m onths was 63 per cent. L ia b il ities involved were down slig htly less th an the drop in num ber. B ank debits to in d iv id u a l accounts in 24 cities of the district in J u ly were 7.4 per cent ahead of a year ago, bu t a sm aller gain was shown in August. Lake traffic in Ju ly , alth o u g h still above a year ago, showed a m uch sm aller gain th an was evident in earlier m onths of this year. P rio r to A ugust 1, coal shipm ents from Lake E rie ports were 27 per cent ahead of the same period of 1933, and iron ore receipts were up 108 per cent. A lth o u g h crop prospects declined slig htly in this sec tion in J u ly and A n rn st, compared m ore favorably w ith a year ago than did the average for the entire country. In some sections crops are only slig htly below n orm al in condition, b u t in others a less favorable situa tion is evident. FINANCIAL F in a n c ia l conditions in the fou rth district showed /Ittle change in the five weeks ended A ugust 22. Debits to in d iv id u a l accounts at banks in leading cities of the district in the period were 3.3 per cent ahead of the same interval of 1933, bu t the gain for the year to date was 16 per cent. H ig her prices now prevailing in m any lines contributed to the increase, bu t the general im provem ent in business in the period was probably the m ost im p o rta n t factor. Savings deposits at selected 2 TH E M ONTHLY BUSINESS R E V IE W banks in Ohio and Pennsylvania on Ju n e 30 were 6.5 per cent larger th an a year ago at th a t tim e. Depos its have shown a g ra d u al increase for several m onths. L ife insurance sales in Ohio and Pennsylvania in Ju ly were 10.8 per cent ahead of J u ly 19 33 and the sevenm onth gain in total sales was 13 per cent. A t the Federal Reserve B a n k of Cleveland total re serves increased slightly, b u t there was practically no change in the value of earning assets or in the types of securities included therein. A m o u n tin g to $214,000,000, on the latest date, Governm ent securities held totaled $213,024,000, a lth o u g h there has been no increase in holdings of G overnm ent securities so far this year. Total deposits, in c lu d in g m em ber bank reserve de posits, were $275,000,000 on the latest date, practically unchanged from the corresponding date in Ju ly , b u t up $115,000,000 from a year ago at this time. M uch of this represented reserves in excess of legal requirem ents. These averaged $118,000,000 in Ju ly , a gain of $11,000,000 from Ju ne . F ederal reserve notes in circulation declined slightly in late Ju ly , b u t increased about $7,000,000 between A ug ust 1 and A u g u st 22. D em and for F ederal reserve notes was quite general, b u t one specific reason for the increase was th a t county treasurers now receiving taxes have been u nable to obtain bids from banks for deposits of pub lic fund s and, therefore, have found it necessary to place these funds in safety deposit boxes. A t the reporting m em ber banks in leading cities of the fo u rth district total credit extended rose from $1,178,000,000 on J u ly 18 to $1,195,000,000 on A ugust 22, an increase of 1.4 per cent. The gain, as for several m onths, was due alm ost entirely to increased investm ent holdings of the m em ber banks. “ A ll othe r” loans in the three latest weeks have shown a tendency to increase, b u t the total ou tstan ding was still below the level of late Ju ly . R e cently the gain in investm ents has been distributed be tween Governm ent securities and those of other types. The form er rose from $569,000,000 to $581,000,000 in the five latest weeks, w hile other th an Governm ent secu rities increased nearly eight per cent between early J u ly and the present date. On A ug u st 27 investm ents in these securities, at $206,000,000, com pared w ith $205,000,000 a year ago at th a t tim e. D em and deposits continued to increase at an irre gular rate in the five latest weeks, and at $656,000,000 on A ug ust 22, com pared w ith $510,000,000 on the same date of 1933, a gain of 28.6 per cent. Time deposits increased in late Ju ly , b u t showed little change in the first three weeks of A ugust. They were up 6.1 per cent from a year ago on the latest date. MANUFACTURING, MINING D em and for steel from private sources continued at a very low level all th ro u g h J u ly and early August. In part this represented a seasonal contraction, b u t the fallingoff was accentuated in this instance by the fact th a t stocks accum ulated in June, prio r to the hig he r prices w hich became effective on th ird quarter contracts, were not used up as fast as was anticipated. The average rate of steel production in the entire country in the th ird week of A ug ust was about 21 per cent of capacity, the Iron and Steel rate h av ing dropped from about 30 per cent in the third week of Ju ly . A t P ittsb u rg h m ills production was at 15 per cent of capacity, Cleveland m ills were operating a t 13 per cent, W hee ling 26 per cent, and Y oungstow n 22 per cent. The contraction from the h ig h rate of late J u n e was the sharpest for any sim ila r period on record and all of the gain recorded since the first of the year was surrendered. P ig iro n production in J u ly was at a daily average rate of 39,630 gross tons, a drop of 38.7 per cent from Ju n e and the lowest since J a n u a ry of this year. Total o utpu t for the m on th was 1,228,544 gross tons. In J u ly 1933, production averaged 58,101 tons per day. D u rin g J u ly 18 blast furnaces were taken out of production, follow in g a reduction of 25 in Ju n e ; 43 furnaces were thus m ade inactive in the two-month period and on A ug ust 1 74 units were still producing pig iron. Steel in g o t production in J u ly was lower th a n in any m on th since A p ril 1933, and at 1,472,584 tons, was less than h a lf the o u tp ut recorded in Ju n e of this year and compared w ith 3,168,354 tons in J u ly 1933, where pro duction was at its peak for the year. J u ly operations were at 26.75 per cent of capacity compared w ith 52.68 per cent in Ju n e and 58.30 per cent in J u ly last year. Despite this u n usu a lly sharp decline in steel in go t pro duction, o u tp u t for the first seven m onths of 1934, at 17,653,473 tons, was 46.5 per cent greater than for the corresponding period of 1933. According to Steel new orders for the first three weeks of A ug ust were larger th an for the com parable period of Ju ly , b u t bookings were chiefly for the purpose of com pleting inventories. Governm ent bu y ing has helped m a in ta in stru ctu ral steel m ill operations at a relatively h ig h rate and the autom obile in d u stry has ordered more m aterial th an was expected a few weeks ago. R ailro ads are bu y ing steel in lim ite d q uan titie s for repair p u r poses only; the ro llin g of rails ordered earlier in the year under Governm ent sponsorship has about been com pleted. Iro n and steel prices have been generally steady in the past fo u r weeks; changes th a t have occurred merely restored the relationship existing prior to the advances on m ost products w hich developed at the b e ginn in g of the th ird quarter. D em and for scrap steel has declined and prices on several grades have been reduced fro m 25 cents to a d o lla r a ton. C urrent quotations are som ew hat be low a year ago at this time. S teel’s price composite in the th ird week of A u g ust was $32.23, a reduction of nine cents from a m o n th earlier and com pared w ith $29.92 in A ugust, 1933. Shipm ents of iron ore continued at a relatively hig h rate in J u ly and receipts a t L ak e E rie ports for the year to date, at 7,947,000 tons, were m ore th a n double last year’s receipts. Stocks of ore on h a n d at furnaces and L ake E rie docks on A u g u st 1 totaled nearly 30,000,000 tons, an increase of eight per cent from last 37ear. Coal Coal production in the fo u rth district in J u ly am ounted to 10,627,000 tons. This was a reduction of six per cent from June, whereas the average change in the past several years was a slig ht increase. The dow nw ard trend, however, was not confined to the fo u rth district alone, for total coal production in the m o n th was slig htly under T H E M ONTHLY BUSINESS R E V IE W Ju n e and o u tp u t was m ate rially below J u ly a year ago. In the fo u rth district the decline from last year was 18 per cent, bu t in the first seven m onths a gain in o utp u t of 20 per cent was shown. The recent falling-off was attrib u te d to the fact th a t coal users accum ulated larger stocks th an were w ar ranted by consum ption earlier this year and these now are being utilized. T otal coal stocks in J u ly represented 37 days’ supply; the increase from A p ril was 54 per cent and from a year ago 23 per cent. Another factor, so fa r as the fo u rth district is con cerned, was th a t coal shipm ents from Lake E rie ports in J u ly were 1.8 per cent above last year, whereas the increase for the year to date was 27 per cent. Movement of coal to upper lake ports has slowed down in recent weeks. Price controversies an d code regulations in some sec tions have som ew hat deferred dom estic buying w hich nor m ally occurs in the sum m er m onths. A utom obiles Production of autom obiles in Ju ly in the U nited States was off 13.5 per cent from Ju n e and alth o u g h the drop was greater th a n the seasonal decline in recent years, opera tions in the m on th held up better th an was expected a few weeks ago. The F ederal Reserve B o ard’s adjusted index of production dropped from 82 to 78 per cent of the 192 3-1925 m o n th ly average. There were 2 6 6,575 cars and trucks assembled in the period, a gain of 16.2 per cent from J u ly last year when production was only slightly below the peak m on th of the year. O u tp u t of cars in the past three m onths has exhibited a steady dow nw ard trend from the hig h po int touched in A pril, bu t despite this falling-off, operations in the industry have held up quite well in com parison w ith the trend of general business activity; prelim ina ry estimates for the first three weeks of A ug ust indicate th a t factories in th at period m aintaine d production schedules at approxim ately the same level of Ju ly and o utput in A ugust is estimated at close to 250,000 units. R e ta il sales have exhibited a dow nw ard trend in recent weeks, b u t in some sections of the country they have held up better than was expected and curtailm e nt of assemblies, so th at changes necessary for production on 1935 m odels m ig h t be made, was deferred. New passen ger car sales in Ohio and western Pennsylvania in Ju ly were down slightly from Ju n e , bu t the falling-off was less than the average decline for this period in the past five years. Com pared w ith J u ly 19 33, registrations were up about four per cent and for the year to date a gain of over 40 per cent was recorded. In J u ly passenger car assemblies num bered 223,868, compared w ith 261,852 in Ju n e and a gain of 17 per cent from J u ly 1933 was shown. In the first seven m onths passenger car production was up 58 per cent from the corresponding period of last year. Pas senger car output in recent weeks has exceeded retail sales, inventories of new cars being b u ilt up to carry over the period when factories w ill be closed down entirely or operating only at reduced schedules w hile necessary changes are being m ade to assembly lines. Truck production in J u ly was 42,707 units, an in crease of 12 per cent from J u ly last year; in the first seven m onths of this year 356,342 trucks were assembled, a gain of 85 per cent from the corresponding period of 1933. Rubber Tires O u tp u t of rubber tire factories in Ju ne , J u ly and A ug u st was less th a n in the corresponding m onths of 1933; a year ago, however, the in du stry was operating at an abnor m ally hig h rate. Operations in recent weeks have been at relatively low levels to pe rm it an absorption of ex cessive stocks of tires in hands of dealers and m an u fac turers. M anufacture rs’ shipm ents have exceeded pro duction recently by a good m arg in and m an u fa ctu re rs’ inventories on J u ly 1 represented only two m o n th s’ sup ply, based on current consum ption, according to the Rubber M anufacturers’ A ssociation. Although total inven tories are still large, in view of current shipments the supply on hand is less th an since A ug ust of 19 33. Tire production in Ju n e , of 97 per cent of the entire industry, was 4,212,000 casings. This represented a de cline of 29 per cent from Ju n e 1933, bu t in the first six m onths tire o u tp u t was up 28 per cent from the same period of last year. Crude rubber consum ption in J u ly am ounted to 32,647 tons. This was 19 per cent below Ju n e and 33 per cent under J u ly 1933. Operations at fou rth district factories in the latest m onth were below a year ago at this tim e, b u t em ploym ent at 18 concerns reporting to the Ohio State University B ureau of B usi ness Research was 12 per cent higher in J u ly th an a year ago, altho ug h it was down slightly from June. Im ports of crude rubber in Ju ly am ounted to 41,530 tons. This was slig htly under J u ly last year, b ut ex ceeded consum ption in the latest m on th by a good m ar gin and stocks of crude rubber in the U nited States on J u ly 31 were close to 370,000 tons, an increase of about 35,000 tons from a year ago. Despite the fact th a t domestic stocks have increased since the rubber pro duction restriction p lan became effective, rubber prices have risen rapidly. In mid-August plan tatio n rubber was quoted in New Y o rk at close to sixteen cents a pound, an increase of m ore th a n 100 per cent in the past year and of nearly th a t m uch from the low price touched in the early part of 1934. C lothing A lth o u g h textile and clo th ing factories n o rm ally are operating at peak levels at this season of the year on fa ll and w in ter models, there was a slowing-down in sales in J u ly and early A ug ust w hich was reflected in a greater-thanseasonal cu rtailm e n t in operations. Cancellations on orders placed earlier in the year have been num erous, particu larly from dro u ght sections of the country. A l though d o lla r sales in J u ly continued above a year ago in most cases, the n u m b er of pieces m anufactured was down about ten per cent in some instances. E m ploym ent a t 37 fo u rth district factories declined 16 per cent from Ju n e to Ju ly , whereas the five-year average change was a reduction of 4.3 per cent. Factories m ak in g m ens’ clo th ing showed a curtailm ent, whereas in recent years an increase was reflected. R e ta il sales cf clothing have declined considerably in recent weeks and the com parison w ith last year at this tim e, when the sales volum e was up sharply because of in flatio nary fears, etc., was off about five per cent in the case of women's 4 TH E M ONTHLY BUSINESS R E V IE W clothing, b u t m e n ’s clothing sales in the same period were up approxim ately seven per cent. Prices of women’s apparel, according to Fairchild's retail price index, declined slig htly in the fo u r latest m onths, b u t m en ’s clo th ing prices increased slig htly in the perriod. O ther M an u factu rin g C onditions in the sm aller m anufacturin g industries of the fo u rth district were unsettled in m id-August. Operations in some instances com pared favorably w ith a year ago when activity was at an u n u su a lly h ig h rate for the sum m er m onths, w hile in others a reduction was evident. Declines in production rates were reported in m any lines in re cent weeks and a lth o u g h a seasonal slackening is not u n u su a l in the sum m er m onths, the falling-off in some instances was greater th a n could be accounted for in this way. E m ploym en t a t in d u s tria l plants declined about fou r per cent in J u ly from Ju n e , b u t was still consider ably above a year ago at this tim e. C urtailed o u tp u t in m any instances has resulted in a reduction in the n u m ber of hours w orked rathe r th an in increased unem ploy m ent. A uto m o b ile Parts, Accessories. Operations at auto parts plants in late J u ly and the first h a lf of A ugust were reduced 20 to 25 per cent from the Ju n e level. This decline is generally regarded as being seasonal, result in g from the desire on the part of assembly plants to reduce autom obile production in keeping w ith the cu rta il m ent in retail sales as the fa ll season approaches. Few orders for m aterials to be used on 19 35 models have been received by local parts producers. These u sually are relied upon at this season of the year to m ain tain operations. E m ploym en t a t fo u rth district factories de clined fo u r per cent in J u ly from June, approxim ately the same as the five-year average June-to-July change. Compared w ith a year ago the num ber employed was up 43 per cent. B ric k an d Tile. A decline in em ploym ent at brick and tile plants of a contrary-to-seasonal nature was reported in J u ly and operations, ju d g in g by this factor alone, were under last year at th at tim e. O u tp u t in the brick industry in Ju n e was the same as a year ago, b u t shipm ents were down about ten per cent. C hina, Pottery. Most china and pottery plants in this section in m id-August were operating at approxim ately 50 per cent of capacity and a dow nw ard tendency has been evident for several weeks, both in sales and pro duction. Operations generally are considerably below a year ago at this tim e. The labor situation is unset tled and th o u g h the num ber employed at local factories in Ju ly was slig h tly above a year ago, a decline, chiefly seasonal, was reported from June . E le c tric a l Supplies. New orders received by m an u fa c turers of electrical apparatus and supplies in J u ly were from 15 to 20 per cent less than in June . This decline was chiefly seasonal and buy ing continued well above a year ago at this tim e. E m ploym en t at fo u rth district factories declined 3.7 per cent from Ju n e to Ju ly , where as the average change in this period in the past five years was a falling-off of less th an two per cent. F or the year to date, however, em ploym ent averaged nearly 50 per cent better th an in the same period of 1933. In the first h a lf of A ug ust the declines in sales continued, bu t in quiries were being received in a volum e which, if they resulted in actual orders, w ould necessitate an increase in operations in the early fall. Glass. P late glass production in J u ly was 7,241,867 square feet. This represented an increase of nearly 700,000 square feet fro m Ju n e , b u t a reduction of 36 per cent from J u ly 1933. O u tp u t has been cu rtailed in re cent weeks, partly because of the drop in auto m o bile as semblies. U nfavorable a g ricu ltu ral conditions caused a drop in sales of glass containers, w ith a consequent re duction in factory operations and also em ploym ent. The reduction in the latter item , however, was slight, c u rta il m ent being bro ught about prin cipally th ro u g h a reduc tion in the num ber of hours worked. H ardw are, M achinery. M achine tool sales in J u ly de clined slig htly from Ju n e and continued the dow nw ard m ovement evident in the preceding six m onths. The drop in J u ly from Ju n e was slight, and orders were consider ably above a year ago at this tim e. New orders received in Ju ly by members of the National M achine Tool B uilders9 A ssociation represented 34.7 per cent of the m onthly average shipm ents in 1926. H ardw are sales declined in J u ly and early A u g u st from the J u n e level, part of w hich was sea sonal. E m ploym en t a t fo u rth district factories dropped two per cent from Ju n e to Ju ly , whereas the five-year aver age change for this period was a reduction of over three per cent. P a in t. P a in t sales in J u ly were considerably below a year ago a t this tim e and the decline from Ju n e was som ew hat m ore th a n seasonal. Operations at m a jo r plants, however, held up reasonably well, w ith a conse quent increase in stocks. Increasing raw m ate rial prices were p artly responsible for this h ig h e r rate of activity than was necessitated by recent sales. M anufacturers have processed more raw m aterials th an needed in order to forestall a price increase w hich appears im m in e n t on the basis of quotations on some com m odities entering in to the m anufacture of paints. Paper. Operations in the paper and boxboard industry in early A u g u st were a t approxim ately 55 per cent of ca pacity; a year ago they were 65 per cent. The fallingoff in recent weeks was m ore th an seasonal and new or ders have been received in rathe r lim ite d volum e. Due to u n usua l conditions in the paper in dustry the num ber of employees was little changed in J u ly from the preced in g m onth, b u t the n um b er of hours w orked was cur tailed quite sharply. Shoes. W eakness in the price of hides w hich resulted TH E M ONTHLY BUSINESS R E V IE W from the Governm ent’s large slaugh te ring program was an un se ttling factor to the boot and shoe industry. Lo cal m anufacturers, according to reports, were operating at hig h rates on fa ll orders, b u t this was largely sea sonal. In the first six m onths of 1934 m anufacturers in this district m ade 7.8 per cent m ore shoes th an in the com parable period of 1933 and o u tp u t was greater than in any sim ilar period since 1927. TRADE D o llar sales at reporting departm ent R e tail stores in the fo u rth district in J u ly were 5.7 per cent ahead of a year ago, but the c u rtailm e n t from Ju n e was considerably more than seasonal and the dow nw ard m ovem ent continued in A ugust, according to scattered reports from principal stores. The seasonally adjusted index of daily average sales in J u ly was 67.7 per cent of the 192 3-1925 m on thly average compared w ith 73.9 per cent in Ju n e , w hich was fou r points below the May figure. In the two latest m onths retail sales at local stores have dropped about 13 per cent after allow in g for seasonal changes. Despite this falling-off do lla r sales in the first seven m onths of the year were 25 per cent larger th a n in the same period of 1933. W h ile part of the gain represented higher prices (Fairchild’s retail price index on Ju ly 1 being 16 per cent above last year at this tim e ) a decline in retail prices has occurred in the fou r latest m onths an d the total reduction in the period has am ounted to two per cent. So far as sales of in d iv id u a l cities were concerned, considerable v aria tio n was apparent in Ju ly . The aver age increase in the sm aller cities of the district from a year ago was 20 per cent and C olum bus sales were up 17 per cent, b u t other m a jo r cities showed only slight gains from last year, w hile in Toledo a reduction was a p parent. The ratio of a ll credit sales to to ta l sales in J u ly de clined from Ju n e and was sm aller th a n a year ago. I n stallm en t buying, however, increased in the latest m onth from both these periods. The d o lla r value of stocks at departm ent stores was re duced six per cent in J u ly from Ju n e , b u t the falling-off was ju s t ab out seasonal and the adjusted index was u n changed at 60.7 per cent of the 1923-1925 m o n thly aver age. Com pared w ith a year ago the d o llar value of stocks was up nine per cent. The stock turnover rate in J u ly was less rapid th a n in Ju n e or a year ago, b u t for the year to date an increase was shown. SHOE PR ODU CTION THOU-SANOS OF PAIRS_______________ FOURTH D IS T R IC T _____________ FIRST 6 MONTHS 8000 600C ■■III ■I m m i r m 1940 194/ 1940 1949 iwy 5 There was a slight fa llin g off in collections in the latest m on th from Ju n e , b u t im provem ent from a year ago was evident in nearly a ll centers. W holesale The d o lla r volum e of sales of the fou r reporting wholesale lines of trade in the fo u rth district was down in J u ly from Ju n e by a som ew hat greater-than-seasonal am o u n t and to ta l sales were slig htly below a year ago "at this tim e. In mid-1933, however, a ll lines of wholesale trade were quite active. W holesale hardw are and grocery sales in J u ly continued slig htly above a year ago a t this tim e and the gains in the first seven m onths were 35 per cent and 20 per cent, respectively. J u ly wholesale dru g sales were 14 per cent above a year ago and the increase in the first seven m onths was 32 per cent. D ry goods sales were dow n 34 per cent in the latest m o n th from J u ly 1933, b u t a gain of 20 per cent was indicated for the first seven m onths of this year, compared w ith the same period of 1933. BUILDING D o llar value of b u ild in g contracts aw arded in the fo u rth district in J u ly was down slig htly from Ju ne , b u t the fa ll ing-off was less th an seasonal and, at $10,121,000, was 50.5 per cent ahead of J u ly 1933. A ctivity in the in dustry, however, was quite lim ite d and, as for several m onths, resulted chiefly from the aw arding of contracts for public works and u tilitie s financed th ro u g h the g ra n t in g of Federal funds. The cu rtailm e n t in pub lic w orks’ activity in J u ly was quite pronounced from Ju n e . In the first seven m onths of this year total b u ild in g contracts awarded, according to the F. W . Dodge C orporation, were 136 per cent larger th a n in the corresponding period of 1933. R esidential contracts aw arded increased nearly 25 per cent in this section in J u ly from Ju n e , b u t were 1.9 per cent under a year ago. The same decline in this type of construction was shown by com paring aw ards in the first seven m onths of 1934 w ith those of 1933. Dealers in b u ild in g supplies reported conditions in early A ugust practically unchanged from recent m onths an d lit tle dem and for m aterials of any sort. Considerable re liance in the field is placed upon the new Federal loans for hom e repair and renovizing to stim ulate the dem and for lu m ber and other b u ild in g m aterials. Contem plated b u ild in g reported in this section in J u ly was off qu ite sharply from Ju n e and was m uch below a year ago. In both comparisons a ll m a jo r types of b u ild in g showed de clines except public utilitie s, w hich were up in J u ly from Ju ne , b u t were slig htly under last year. AGRICULTURE Crop prospects declined generally th ro u g h o u t the coun try in Ju ly and fu rth e r deterioration in m any sections was reported in A ug ust as a result of continued d ro u ght and record-breaking ho t weather. F or the country as a whole the A ugust 1 condition report indicated th a t yields per acre of 32 prin cipal crops w ould be 22 per cent below the average of the past 13 years and 19 per cent lower than in 1933. W h e n the very reduced acreage of most crops planted this year as a result of activities of the A A A is considered, a sm aller total crop th a n in over 30 years is indicated. Acreage of 15 m a jo r field crops rem aining 6 TH E M ONTHLY BUSINESS R E V IE W for harvest, according to current estimates, is 15 per cent below the ten-year average and the lowest in 25 years. The effect of the dro ug ht has been widespread, but has varied in intensity. In the Great P la in states all crops were seriously dam aged; in some sections only ten per cent of a no rm al crop is indicated. In m any instances the only farm incom e this year is th a t provided by the crop-reduction paym ents. In the eastern and southern sections of the country the dro ught effects are less severe and, com paratively speaking, farm ers in the fo u rth district are in a quite fa vorable position. Considerably higher prices are now to be had on crops and livestock they have to sell. The A ugust 1 estimates of all prin cipal crops in this district, except wheat, were un der those m ade a m on th ago, b u t the declines were sm aller th a n in the entire country and in dicated yields are m uch nearer the average of past years than in m any other sections of the country. W heat. The estim ate of fo u rth district w inter w heat production was revised upw ard in J u ly as threshing re turns showed better-than-expected yields. A total h a r vest of 37,372,000 bushels of rather good q u ality w^heat was indicated on A ug u st 1. This was only slig htly under the harvest of last year and exceeded the ten-year aver age production by 562,000 bushels. Y ie ld per acre was estim ated at 19.2 bushels, com pared w ith 19 bushels in 1933 and 18.6 bushels, the ten-year average. W ith w heat prices up sharply in recent weeks to the highest level in fo u r years, farm incom e in this section from this source is considerably above 1933, excluding payments for wheat acreage reduction, w hich, however, were rather sm all lo cally. Corn. Corn prospects in the fo u rth district on A ugust 1 were six per cent sm aller th an on J u ly 1, b u t the re duction was m aterially less than the 24 per cent de cline reported for the entire country. So far as this dis trict is concerned the dam age in the latest m o n th was more pronounced in the west-central and southwestern parts of O hio; in the eastern and northern sections of the district— areas farthest removed from parts of the country in w hich this year’s dro u g ht was m ost severe— the A u gust 1 condition was not fa r from the average of recent years. The 1934 crop, based on the A ugust 1 condition, was estim ated at 126,269,000 bushels in the fo u rth dis trict. This represented a decline of 16 per cent from the 1933 harvest and of 24 per cent from the ten-year aver- WHEAT PRODUCTION M|LL|ONS ° r BUSHELS_________________ FOURTH D IS T R IC T ____________ I 30 ■I It n flJIm l« l 192 1923 1925 *Based on August 1 estimate. 1926 1927 1928 1929 1930 1931 1932 1933 1934 age harvest. The drop, however, is m uch sm aller than was indicated for the entire country. A ccording to reports, the crops suffered fu rth e r dam age in m any sections of the entire country in A ugust, b u t in m ost parts of the fo u rth district favorable grow ing conditions were experi enced. Oats. The A ug ust 1 condition of the oat crop was little changed from th a t reported on J u ly 1 and in the fourth district was about the same as a year ago, a lth o u g h it was little m ore th a n h a lf as favorable as the ten-year aver age. Total production in this section, estim ated at 13 3,881,000 bushels, was 56 per cent below the ten-year aver age harvest. I t was only slig htly under the 1933 h a r vest, bu t the oat crop has been very unsatisfactory in this district for the past four or five years. H ay. Recent rains have been very beneficial to pas tures and late clover and a lfa lfa fields, b u t the estimate of total tam e hay production in this district on A ug ust 1 was smaller than a m onth earlier. The total harvest is estimated to be 45 per cent below the ten-year average. Potatoes. The late potato crop in this section was esti m ated on A ug ust 1 to be slig htly above the harvest of 19 33, b u t a decline in condition of the crop occurred in Ju ly . Probable production is now estimated to be 18 per cent under the ten-year average. Tobacco. The condition of the tobacco crop changed slightly in J u ly and the A ug ust 1 estimate of production in the fo u rth district, at 92,093,000 pounds, was still 33 per cent below the ten-year average. The condition of the crop in a ll sections of the district was m a te rially better than a year ago at this tim e, the reduction in to ta l o u tp ut being due to a sharp cu rtailm e nt in the areage planted this spring. Recent reports indicate th at, as a result of favorable w eather in the east-central part of K e n tucky, the crop im proved m ate rially in the first part of A ugust. B urley tobacco, the m ost im p o rta n t type raised in this section, was reported to be above average condition at the m iddle of the m onth. Prices on south ern tobacco m arkets, w hich opened recently, were very m uch above the level of a year ago at this tim e. F r u it. The condition of the apple crop im proved slightly in Ju ly , b u t estimated harvest is still m uch below the average of past years. The 1934 grape crop is expected to be rather lig h t this year and in Ohio and Pennsyl van ia the A ugust 1 condition was 67 and 58 per cent of norm al, respectively, compared w ith 74 and 77, the tenyear average A ugust 1 condition in the two states. U n usually w arm weather was the chief cause of deterioration in recent weeks. Prices. F a rm prices th ro u g h o u t the country increased in J u ly and continued their upw ard trend at a rathe r sharp rate in A ugust. Gains were most pronounced in prices of grains, altho u gh all m a jo r groups included in the D epart m ent of A g ric u ltu re ’s index, except fruits and vegetables, have increased in recent weeks. The gain in prices fa rm ers received was not paralleled by increased prices on goods farm ers purchased, so th a t the ratio of prices re ceived to prices paid rose three points in the latest m onth to 66 per cent of the five-year pre-war average. This figure, however, was five points lower th an a year ago at this time. TH E M ONTHLY BUSINESS R E V IE W Fourth District Business Statistics (000 7 Wholesale and Retail Trade omitted) (1934 compared with 1933) Fourth District Unless July, % change Otherwise Specified 1934 from 1933 Bank Debits— 24 cities.................. $ 1,757,000 + 7.4 Savings Deposits— end of month: 657,601 + 6.5 41 Banks, O. and Pa.....................$ Life Insurance Sales: Ohi? and Pa................................... $ 78,971 +10.8 Retail Sales: Dept. Stores— 49 firms.................$ 11,072 + 5.7 Wearing Apparel— 11 firms.........$ 433 + 1.0 Furniture— 42 firms......................3 509 + 2.7 Wholesale Sales: Drugs— 13 firms............................ $ 1,149 + 13.6 Dry Goods— 10 firms................... 3 833 — 34.0 Groceries— 33 firms...................... 3 3,626 + 6.0 Hardware— 14 firms..................... 3 1,114 + 2.5 Building Contracts— Total............ 3 10,121 +50.5 — Residential.. $ 2,059 — 1.9 Commercial Failures— Liabilities..3 1,719 — 35.6 ” ” ...N u m b e r 562 — 49.1 Production: Pig Iron, U. S..........................Tons 1,229 — 32.4 Steel Ingot, U. S......................Tons 1,473 — 53.5 Automobiles-Pass. Car. U. S.......... 223,8682 +17.0 42,7072 +12.1 Automobiles— Trucks U. S............ Bituminous Coal.................. Tons 10,627 — 18.3 Cement,— O., W. Pa., W. Va. Bbls. 996 + 6.3 Elec. Power— O., Pa. Ky. k.w.h. 1,126s + 1 . 0 Petroleum— O., Pa., K y........Bbls. 2,090s +21.2 (3) (5) — 14.0 Shoes .................................... Pairs Tires, U. S........................ Casings 4,212 — 28.8 Bituminous Coal Shipments: Lake Erie Ports...................... Tons 5,464 + 1.8 Iron Ore Receipts: Lake Erie Ports...................... Tons 3,362 +18.3 1 not available 4 January-June 2 actual number 6 confidential 8 June Jan.-July % change 1934 from 1933 11,652,000 +18.1 * 568,558 +13.4 102,230 +24.9 4,777 +22.7 4,704 + 45.7 9,404 + 32.4 7,186 + 20.4 25,549 + 19.8 8,053 + 35.4 95,409 +136.3 11,560 — 1.9 16,807 — 54.2 4402 — 62.8 11,082 +77.1 17,653 +46.6 1,624,5722+58.2 356,3422 + 84.9 85,095 + 19.6 4,267 + 31.9 7,013* +19.5 11,395* +11.3 (*) («) + 7 . 8 26,196 +28.3 17,784 +27.3 7,947 +107.8 D E P A R T M E N T ST ORES (49) A k r o n ..................................................... Cincinnati.............................................. Cleveland............................................... Columbus............................................... Pittsburgh.............................................. Toledo..................................................... Wheeling.^............................................... Other Cities........................................... District................................................... W E A R IN G A P P A R E L (11) Cincinnati............................................... Other Cities........................................... D istrict................................................... F U R N IT U R E (42) Cincinnati.............................................. Cleveland............................................... Columbus............................................... D ayton................................................... Toledo..................................................... Other Cities........................................... D istrict................................................... C H A IN STORES* Drugs— District (4)............................. Groceries— District (5)........................ W H O L E S A L E G R O C E R IE S (33) A kron...................................................... Cleveland............................................... Erie......................................................... Pittsburgh.............................................. Toledo..................................................... Other Cities........................................... D istrict................................................... W H O LE S A L E D R Y G OO DS (10). . W H O L E S A L E D R U G S (13).............. W H O L E S A L E H A R D W A R E (14). . *Per individual unit operated. Percentage Increase or Decrease SALES SALES STOCKS First seven July 1934 months till + 2.1 + 1.9 + 4.9 + 17.4 + 4.7 — 6.0 0.6 +20.3 5.7 +53.5 + 13.4 +30.1 +23.3 +19.5 +18.7 +25.0 + 37.6 + 24.9 +14.0 — 1.1 +14.2 +20.5 + 9.1 — 3.2 +11.4 8.7 + 9.2 +12.5 5.3 + 24.7 + 17.2 + + + 0.3 + 1.3 + 1.0 +28.4 +22.7 — 10.4 8.1 +11.7 — 20.4 — 12.7 + 17.4 2.7 + b36.1 [-56.0 -27.0 - 9.8 f-46.5 +72.3 +45.7 — 0.1 — 8.1 +15.1 +11.4 +21.0 1.1 +22.8 +12.9 +10.1 4.1 + 6.0 — 34.0 + 13.6 + 2.5 + 34.6 +19.3 +19.5 +18.7 +19.1 + 18.8 +19.8 +20.4 + 32.4 + 35.4 + + + + + + 7.2 + 8.7 Debits To Individual Accounts (Thousands of Dollars) 5 weeks ended August 22, 1934 A k ro n .. . . . . . . 54,436 Butler.............. 7,502 25,844 C anton.. . . . . . Cincinnati. . . . 257,302 468,022 Cleveland........ 129,672 Columbus........ 44,696 Dayton............ 22,736 Erie................. Franklin.......... 2,804 Greensburg. . . 5,391 H am ilton........ 8,886 Homestead.... 2,217 14,784 Lexington........ L im a................ 8,507 Lorain.............. 3,305 M iddletow n.. . 7,156 7,872 Oil C ity .......... P ittsburgh.. . . 613,555 Springfield. . . . 13,234 Steubenville-7,100 103,128 Warren............ 5,809 28,670 Wheeling........ Youngstown. . . 38,764 7,050 Zanesville....... Total............ . . 1,888,442 % change from 1933 + 39.7 + 7.9 + 4.7 - 4.6 + 1.9 +22.6 + 0.2 +13.6 + 4.6 +33.5 + 9.3 +14.2 - 4.5 +36.2 +16.0 0 h i o .i h 0.3 b ll.9 -21.7 - 9.6 - 4.4 -10.4 + 7.9 +17.1 + 3.3 Year to date Jan. 3, 1934 to Aug. 22,1934 351,785 51,797 202,820 1,897,847 3,084,399 862,729 306,670 141,946 19,737 37,618 59,447 14,000 140,822 58,989 19,733 49,119 52,845 4,355,297 91,519 47,047 678,743 47,375 218,281 256,627 43,987 13,091,179 Year to date Jan. 4, 1933 to Aug. 23,1933 243,063 44,929 138,244 1,736,069 2,647,260 679,100 291,291 122,589 16,714 29,208 49,273 12,363 113,984 43,175 17,108 43,561 45,215 3,905,009 75,621 33,957 537,036 35,274 200,486 186,090 39,379 11,285,998 % change from 1933 + 44.7 +15.3 +46.7 + 9.3 +16.5 +27.0 + 5.3 + 15.8 +18.1 + 28.8 + 20.6 + 13.2 +23.5 +36.6 + 15.3 +12.8 + 16.9 +11.5 + 21.0 +38.5 +26.4 +34.3 + 8.9 + 37.9 +11.7 +16.0 Fourth District Business Indexes ( 1923-1925 = 100) Bank Debits (24 cities)..................................... Commercial Failures (N um ber)...................... ” ” (Liabilities).................... Sales— Life Insurance (Ohio & P a .)................. ” — Department Stores (47 firm s)............... ” — Wholesale Drugs (12 firms).................. ” — ” Dry Goods (10 firms)......... ” — ’* Groceries (33 firms)............ ” — ” Hardware (14 firms)........... ” — ” All (69 firms)........................ ” — Chain Drugs (4 firms)**........................ Building Contracts— (T o ta l)............................. ” ” — (Residential)................... Production— Coal (O., W. Pa., E. K y .).......... — Cement (O., W. Pa., W. V a .). . . ” Elec. Power (O., Pa., K y .)* .......... ” — Petroleum (O., Pa., K y .)* .......... ” — Shoes*............................................ *June **Per individual unit operated. July, 1934 65 38 39 94 51 76 34 63 57 58 69 21 12 59 83 134 113 87 60 75 61 85 48 68 52 59 56 59 69 14 12 72 88 133 93 101 Ju ly , July, Ju ly , 1932 1931 1930 59 91 122 139 105 115 179 146 55 87 105 134 41 63 69 66 91 96 20 39 52 55 77 89 40 73 62 47 69 80 73 87 87 26 57 101 8 30 55 36 70 83 48 126 164 114 124 134 101 112 124 69 71 73 8 T H E M ONTHLY BUSINESS R E V IE W Summary of National Business Conditions By the Federal Reserve Board In d u s tria l production declined in Ju ly . Factory em ploym ent an d pay rolls also decreased. D im inished o u tp u t of steel was the chief factor in the decline of in d u stria l activity w hich was larger than is u sual a t this season of the year. The general level of wholesale com m odity prices showed little net change for J u ly and advanced in the first three weeks of A ugust. Production and Employment Index number o f industrial production adjusted for seasonal variation <1923-1925 = 100). Latest figure, July, preliminary 76. Federal Reserve Board’s index o f factory em ployment adjusted for seasonal variation (19231925 = 100). Latest figures, July, 79.4. V olum e of in d u stria l o utput, as m easured by the B oard's seasonally a d justed index, decreased from 83 per cent of the 1923-1925 average in Ju n e to 76 per cent in Ju ly . This decline reflected chiefly a sharp reduction in the o u tp u t of steel, due in part to previous accum ulation of stocks by con sum ers; and there was a fu rth e r decline in steel operations d u rin g the first three weeks in A ugust. A ctivity in the autom obile in d u stry decreased an d there were considerable reductions in the o u tp u t of pig iron and anthracite. A t textile m ills, where operations had been a t a low level in Ju n e , activity showed little change in Ju ly . O u tp u t of shoes showed a seasonal increase. Accom panying heavy m arketings of cattle from d ro u ght areas there was a considerable increase in activity at m eat pack ing establishm ents. F actory em ploym ent decreased between the m id dle of Ju n e an d the m id dle of J u ly by three per cent, an a m o u n t larger th a n is u su al a t this season. There were reductions in m any industries producing durable m a n ufactures, such as iron and steel products and b u ild in g m aterials, and also at establishm ents producing k n it goods and w om en’s clothing. A t cann in g establishm ents the n um b er of employees increased by less th a n the usual seasonal am ount. E m ploym ent on public projects increased fu rth e r in Ju ly . V alue of construction contracts aw arded, as reported by the F. W . Dodge C orporation, was about the same in J u ly as in Ju n e . D e partm ent of A g ricu ltu re estimates, based on A ug ust 1 conditions, indicate th a t yields per acre for principal crops are 22 per cent sm aller th an the ten-year average, reflecting the effects of the drought. The w heat crop is estim ated a t 491,000,000 bushels, 37,000,000 bushels less than last year’s sm all harvest, and the corn crop at 1,607,000,000 bushels, as com pared w ith a five-year average of 2,516,000,000 bushels. The cotton crop estim ate is 9,195,000 bales, about 4,000,000 bales less th an last season and sm aller th an in any other year since 1921. Distribution Total volum e of freight car loadings declined in Ju ly , reflecting chiefly a reduction in m iscellaneous freight, in c lu d in g steel shipm ents, offset in part by an increase in shipm ents of livestock. D epartm ent store sales showed a decrease of som ewhat more th an the estim ated seasonal am ount. Commodity Prices W holesale prices of farm products, after flu ctuatin g w idely in Ju ly , advanced considerably in the first three weeks of A ugust. Between the beginn in g of Ju ly and the th ird week of A u g ust cotton, w heat and hog prices showed substantial increases w hile cattle prices declined somewhat. D u r in g this period prices of com m odities other th an farm products and foods as a group showed little change. Indexes o f United States Bureau o f Labor Statis tics, by months, 1929-1931, by weeks, 1932 to date, (1926=100). Latest figures for week end ing August 18; farm products 68.9; foods 74.1; other commodities 78.4. Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for August 15. Bank Credit Member bank reserve balances increased fu rth e r between the m id dle of J u ly and the m id dle of A ugust an d on A ug ust 15 were about $1,900,000,000 in excess of legal requirem ents. The increase in reserve balances re flected prin cipally a fu rth e r grow th in m onetary gold stock offset in part d u rin g the first h a lf of A ug ust by a seasonal increase in the total volum e of m oney in circulation. The volum e of reserve bank credit showed little change. In the four weeks ending A ug ust 15, loans and investm ents of New Y ork City banks decreased by $141,000,000 w hile those of weekly reporting banks in other leadin g cities increased by $116,000,000. The decrease at New Y ork banks reflected a reduction of nearly $200,000,000 in loans to brokers and dealers in securities, fo llo w ing a sharp decline in security prices in the latte r part of J u ly and a decline of $52,000,000 in ho ld ings of U nited States Governm ent securities. A ll other loans and ho ld in gs of securities other th a n U nited States Governm ent obligations increased su bstan tially at New Y ork banks and a t banks outside New Y o rk City. A t outside banks ho ld ings of U nited States Governm ent securities also increased. Average rates of discount on U nited States Treasury bills issued rose from .07 per cent in J u ly to .23 per cent on A ug ust 22. O ther open-market m oney rates rem ained unchanged at low levels.
@FedFRASER