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MONTHLY BUSINESS REVIEW Covering financial, industrial and agricultural conditions V o l. 19 Cleveland, O hio, August 31, 1937 While the iron and steel industry and makers of mate rials entering into automobiles or farm equipment were operating at high levels for this season in late July and the first three weeks of August, in other fields there was some evidence of a summer slump. This was most noticeable in the volume of incoming orders which generally is small at this time of year in many lines, and in retail and whole sale trade. Production, however, has held up very well at the expense of backlogs and except in a very few scat tered places current operations are still well above last year. Some seasonal contraction in employment occurred in July where the resumption in steel mill operations was not an offsetting factor. This was true at Cincinnati, Dayton, Erie and Toledo. There also was a slight reduc tion in the number of man-hours worked in July from June even where increased employment was reported. Steel ingot production in the first three weeks of August was at a rate only exceeded in the summer season by 1929. While buying has held up well in some lines, ship ments recently have been reported 20-25 per cent in excess of incoming orders so that backlogs have been reduced. Lessening of pressure for deliveries permitted several mills to make needed repairs to furnaces in the third week of August, but a slight gain in operations was reported toward the month end. More blast furnaces were operating on August 1 than since late 1929 and capacity of many of those now in production has been increased over what it was eight years ago. Awarding of large contracts for new iron and steel producing or fabricating plants in the greater Pittsburgh area swelled the building figures for this district in July to the largest amount since early 1930 and accounted for nearly 50 per cent of the total volume reported. In early August another large contract was awarded for a new mill in Southeastern Ohio. Residential construction has lagged recently, though the increase for the first seven months over last year was 62 per cent. In the same period factory construction was up nearly 150 per cent. Automobile assemblies increased quite sharply in midAugust when a decline has occurred in most recent years. The high rate of production of lower-priced cars, when many other lines were down for model changes, was bene ficial to local parts and accessory companies. Production Fourth Federal Reserve Distric Federal Reserve Bank of Clevelanc No. 8 in the first seven months of 1937 was ten per cent above last year, while in the first three weeks of August a larger gain was evident. In most other lines new orders were reported in rather limited volume, but operations continued well above last year in July and early August, except at pottery and china, shoe, and tire plants. For the year to date sizable gains were general, but large stocks of tires and china built up earlier in the year have retarded operations re cently. 1 Check transactions at banks in leading cities of the dis trict in the four weeks ended August 18 were 12 per cent larger than in the comparable period of last year. The gain for 1937 to date was 16 per cent over 1936. Commercial loans made by leading banks increased at a quickening rate in recent weeks, only part of which was seasonal. These loans were at a new high for the recov ery. Life insurance sales in Ohio and Pennsylvania in July were slightly under last year, but a gain of nine per cent was experienced in the first seven months. Trade in July, as reflected in sales of all^ groups of reporting retail firms, and in four reporting wholesale lines, was down more than seasonally from June. Gains over last year were still quite general, but they were smaller than the increases for the year to date. Wholesale sales of groceries and dry goods were smaller in the latest month than a year ago. Collections fell off in July, partly sea sonal, but they were also smaller than a year ago as a per cent of accounts receivable at the beginning of the month. Agricultural conditions were irregular. In the northern part of the district bad weather at harvest time did con siderable damage to grain crops and was not conducive to a good corn or potato crop. Despite this fact prospects for the district as a whole were better than the average of recent years. Buying in rural areas continued to ex ceed that of urban centers in this district. FINANCIAL Banks in leading cities of the fourth district expanded their commercial loans at an accelerating rate in the four weeks ended August 18, and total loans made by these banks touched a new high level for the recovery move ment. They were 12 per cent above a year ago at this time. 2 THE MONTHLY BUSINESS REVIEW Between July 21 and August 18 commercial loans at been relatively light as automotive consumers and parts these banks rose 6.2 per cent, or $18,000,000. A compar makers are taking little tonnage, pending change to 1938 able figure for last year is not available since the loan models. Requirements for 1937 cars have continued longer classification was revised in May. In recent weeks there than expected. has been very little change in loans on securities, real A decline of three points in the national steel rate oc estate, or loans to banks. Some expansion of loans is gen curred in the third week of August. Producers were catch erally looked for at this season as the heavy crop move ing up on deliveries, but part of this was attributed to the ment gets under way, but this year's gain was greater need for repairs to equipment, chiefly open hearths, which than in other recent years. The accompanying chart shows have been hard pressed for several months. Finishing de weekly changes in commercial loans since early May. partments continued to operate at a high rate, and recovery The low point in investment holdings by these banks of twro points in the ingot rate to 83 per cent occurred to so far this year was touched on June 30 and since that ward the month end. At Cleveland the rate in the third week of August was time there has been a slight expansion in holdings of both Government and other securities. In the case of Gov 81 per cent of capacity, the same as in the third week ernment securities, the increase has been $14,000,000 and of July, but down 3.5 points from the rate in early August on August 18 these banks were holding the same quan which was the high point of the year. The Pittsburgh rate tity as a year ago — $868,000,000 or 45 per cent of total dropped to slightly under 80 per cent for the first time loans and investments. Last year at this time holdings of this year, excluding the July holiday wTeek, but recov Government securities represented 48 per cent of total ered to 84 per cent tow’ard the month end. At Youngs credit extended by these weekly reporting banks. Invest town, mills were operating at 73 per cent, compared with ments in other than Government securities, at $270,000,000, 80 per cent in early August. At Wheeling, with demand were $10,000,000 larger than a year ago, but $8,000,000 for tin plate receding seasonally, operations dropped to 89 per cent as against 93 per cent earlier in the month. under the spring peak. Total credit extended by these banks on the latest date In Southwestern Ohio the rate has fluctuated between 89 and 93 per cent in recent weeks. was $1,912,000,000, a gain of 5 per cent over last year. At the middle of August pig iron makers opened books Both demand and time deposits rose to a new high for the year to date in the third week of August. Time de for fourth quarter deliveries with no change in price. posits increased $10,000,000 in the four latest weeks and This does not preclude a rise in price later in the year, at $731,000,000 on August 18, they were at a new re if deemed necessary, which probably would be effective covery high level. Adjusted demand deposits, chiefly com on announcement. mercial, increased $25,000,000 in the four latest weeks and Steelmaking scrap, which is a direct competitor of pig were nearly $100,000,000 larger than a year ago. iron, checked its decline of several weeks and since the Reserve Bank Credit There was a moderate decline in third week of July has risen $1.50 per ton. Railroads are buying some rails and equipment but in bills discounted for member banks, acceptances, and work ing capital loans to industry in the four weeks ended much smaller quantities than in the first half year. Ag implement makers are experiencing one of the August 18, but the total reduction was less than $200,000. ricultural Including holdings of Government securities, which were best years they ever have had and steel for other farm unchanged at $245,922,000, total credit extended was uses is moving well. Some pipeline tonnage has been $247,532,000, still $10,000,000 above last year at this time. placed for oil companies. Collapse of shipyard strikes on Atlantic seaboard was followed by release of ship Bills discounted were less than $500,000 for the first time the building steel which had been held up for several weeks. since early June. July ingot production totaled 4,556,596 gross tons, an Note circulation of this bank rose to a new high level increase of nine per cent over June. In the first seven of $441,000,000 in the second week of August, but a de this year production has totaled 33,321,229 tons, cline of $5,000,000 occurred in the week of August 18. months with 33,886,857 tons in the first seven months of It was $45,000,000 or 12 per cent in excess of a year ago compared 1929, a difference of only 565,628 tons. at this time. Pig iron production in July regained most of the ground Total reserve deposits of all member banks in this dis trict fluctuated around $460,000,000 in the four latest COMMERCIAL LOANS OF weeks, close to the all-time high level, and excess reserves 350 remained around $80,000,000 or 20 per cent above re quirements. B jI N K S MANUFACTURING, MINING 325 Iron and In the first half of August the national Steel rate of steel production was about 84 r 300 per cent of capacity, a rate only ex / ceeded at this season in one previous year, 1929. Last year at this time operations were slightly above 70 per cent. This high August rate was reported to be the result of efforts 275 to regain time lost during the strike; consumers were pressing for deliveries long overdue and shipments were in excess of incoming orders by about 20-25 per cent, 250 according to reports. New buying so far in August has M IL L IO N S REPOR riN C ME M B C R 3 THE MONTHLY BUSINESS REVIEW lost in June, when labor trouble reduced output. In July of 1936, but for the season to date a gain of 17 per cent production totaled 3,501,359 tons, an increase of 12.4 per has been reported. Lake shipping of coal began somewhat cent over the 3,115,302 tons made in June. This is the earlier this season than in other recent years. Prices on second highest month this year, being exceeded only by most grades remain low and competition is exceptionally May, with 3,545,180 tons. The daily average in July was keen, according to trade reports. 112,947 tons, 8.8 per cent higher than the June rate. Seven Allowing for seasonal fluctuations there months’ production this year totaled 23,271,694 tons, an Automobiles was little change in automobile produc increase of 43.8 per cent over 16,175,793 tons made in the tion in July from June, though actual corresponding period of 1936. output was down about 14 per cent. According to the In July 192 blast furnaces were active, the greatest num Department of Commerce, 438,834 cars and trucks were ber since October, 1929, when 203 were operating. made in the month, despite fact that one major plant Iron ore shipments on the Great Lakes so far this sea was dowrn part of the time the for vacation, and production son have surpassed all records. July shipments were 10,- of another plant wras reduced by strikes. 704,457 tons, an excess of 596,574 tons over June. For the production was 0.4 per cent under last year, but season to August 1 ore moved to lower lake ports to theJuly decline in the passenger car field. Truck taled 34,626,751 tons, compared writh 32,910,820 tons in production inwastheentirely month was 77,859 units, a gain of 10,000 the corresponding period of 1929. trucks, or 14 per cent over last year. Passenger car out Iron and steel exports in June, excluding scrap, were put, at 360,275 units, was down 11,000, or three per cent 306,237 gross tons, which exceeded by 51 per cent the from a year ago. In the first seven months car pro total in June, 1929. For six months this year the total duction was still ten per cent greater than total in the corre was 2.3 per cent larger than in the corresponding period sponding period of 1936. of 1929. Scrap exports in June amounted to 520,297 tons. reports covering July sales indicate that For six months they were 2,172,660 tons, which is about an Preliminary improvement occurred in the retail field despite the 200,000 tons more than total scrap exports in all of 1936. fact that model changes were being discussed so gener Coal Some progress in reducing coal inven ally and that 1938 models of some lines were expected to tories accumulated prior to April 1 oc be announced several weeks in advance of the New York curred in the second quarter, but at show. July sales of newr passenger cars in principal coun mid-year stocks of bituminous coal above ground were ties of this district were up contra-seasonally from June still 50 per cent larger than on July 1, 1936. Since the and in the first seven months a gain of 11 per cent was rate of coal consumption has increased over last year these reported over the same period of 1936. Price increase announcements apparently met little con stocks, in terms of days' supply based on June consump tion, were one-third larger than at this time in 1936. De sumer resistance and had the additional effect of dispell spite the recent reduction, mid-year coal inventories wrere ing any feeling that price reductions might be obtained larger than at that season since 1927. Coal on upper lake on some 1937 models when the 1938 cars were released. docks on July 1 was 52 per cent in excess of the corre Limited dealer inventories of new cars wTere helpful in this connection. sponding date last year. Resumption of operations at plants of two small car These large inventories and lagging consumption (even though exceeding last year) have retarded mine opera manufacturers in the second week of August much more tions, both in this district and the entire country. A slight than offset the curtailment at other plants, incident to upward trend paralleling last year has been evident since model changes. Assembly of small cars was continued the second week of July, but the month’s output at local through the third week of August, but the majority of mines was only moderately above last year, 1.4 per cent, other plants were down for periods ranging from two to wrhereas the gain for the first seven months was 14 per six weeks. In the wreek ended August 14 assemblies num bered 103,250 cars and trucks, according to Ward's Auto cent. motive Reports. This was an all-time record for this sea Coal shipments from Lake Erie ports, upon which local mines are very dependent in the summer months, were son of the year and compared with 55,329 in the same wreek eight per cent smaller in July than in the comparable month last year. In the week of August 21 output dropped to 93,339 units and in the fourth week a further drop of 10,000 wras reported. The change-over period is expected by the industry to be relatively short in most cases; some mak ers already have set dates for the showing of 1938 mod els. Material buying in August was reported to be above normal, chiefly because of the high rate of production on 1937 cars. Volume purchases of 1938 requirements have not yet appeared, according to steel and parts makers in this district. Rubber, A contraction in the rubber and tire inTires dustry occurred in July, judging by rubber consumption figures of American Rubber Manufacturers' Association, which were 9.5 per cent below last year and 16 per cent under June. This latter drop was more than seasonal and in only one of the past four months has rubber consumption exceeded the THE MONTHLY BUSINESS REVIEW 4 corresponding’ month of 1936 and that was only by two not required to make so many costly changes to dies and per cent. Despite this contraction rubber consumed by machinery as in some years. This may be partly responsible for the decline in new manufacturers continued to exceed that imported from producing areas. Domestic crude rubber stocks were re machine tool orders from domestic sources in July, for duced to 164,445 tons on July 31, the lowest figure since the third consecutive month, as shown in the report of the National Machine Tool Builders' Association. Foreign 1930 and 30 per cent under last year. Heavy inventories of finished tires in hands of manu orders received in July made a new high since the com facturers were accumulated earlier this year in anticipa pilation of separate figures was started in 1930. They con tion of possible labor trouble which did not develop. Re stituted 32 per cent of all orders received. Domestic or tail demand for replacement tires has been somewhat be ders were about ten per cent above last year in July, while low expectations this summer and, despite a reduction in combined orders were up 14 per cent. Only in February plant operations to about 24 hours a week in Akron and of this year was machine tool buying reported at lower slightly more than that elsewhere, manufacturers’ inven levels than in July. A large number of inquiries were pend tories have held at or above 12 million tires since Janu ing in early August, but actual orders were slow. Local ary. A slight decline from the April peak has occurred, plants have continued to operate at high levels through but inventories a year ago amounted to 7,835,000 tires. most of the summer, but backlogs have been considerably Retail dealers’ inventories on July 1 were estimated to reduced. Foundry equipment orders also were down in be around 7,500,000 casings, a decrease of about 200,000 July, but they were still nearly a third larger than a year casings in the second quarter, but a gain over 1936, though ago and no cancelations of orders previously placed were figures for the corresponding date last year are not avail reported. Small tool production so far in the third quar able. In 1936 the survey of dealer tire stocks was made ter has been about 50 per cent above last year. This rate in April and October. Because of seasonal conditions, these would not be justified by the volume of incoming orders, but was necessary because of the large number of unfilled figures are not strictly comparable with current ones. on hand. June tire production, the latest figure available, was es orders New orders for electrical equipment also have declined timated at 5,339,000 casings, about 50,000 under manu further from peak, but operations and ship facturers shipments in the month and 4.9 per cent under ments held upthewelllatein spring late July August, and new output in June 1936. In the first six months, however, buying still exceeded last year atandthisearly time. in production was estimated at 31,013,000 tires, a gain of July continued well above last year and Employment stocks of both 16.5 per cent over the comparable period of 1936. raw materials and manufactured goods were larger than at Crude rubber prices declined to new low levels for the this time in 1936. year following announcement of July consumption figures. China and pottery plants reported a slight improvement They remained above 18 cents a pound in mid-August in orders in the first half of August, but operations and compared with 16 cents last year and 26 cents, the spring employment were still under last year at that time. Large peak. Prices of cotton, the other important raw material retail stocks built up prior to the May 1 price advance entering into tire production, have declined recently and had not yet been reduced to a point where retailers were quotations in the third week of August were about two buying in any quantity, although some orders for late fall cents a pound under a year ago. Despite these reductions delivery recently have appeared. and heavy tire inventories, prices of tires have been main Plate glass production continued near capacity levels tained generally at levels which permitted profits to be in early August even though shipments to the automobile shown by leading companies in the first six months of 1937. industry were down. Demand from other sources, such as jobbers and furniture manufacturers, improved some Other Irregularities characteristic of a sum- what. Inventories, which were depleted during the strike M anufacturing mer season wrere more noticeable in the this spring, were again being built up. Window glass pro general manufacturing industries of this duction in July totaled 1,320,406 cases of 50 square feet district in late July and the first three weeks of August of glass. This represented operations at 81 per cent of than they were earlier in the summer. Employment de capacity compared with an average of 68 per cent for the clined seasonally in several lines, but it remained well first seven months. above last year in most cases. Indexes of man-hours worked Little change in the paper and boxboard industry was and wages paid were still much higher than at this time reported from mid-July to mid-August. Most boxboard in 1936. In some cases operations were being maintained mills have caught up on orders and are now operating on by a large supply of unfilled orders on hand, carried over incoming volume. The expected seasonal rise in August from earlier months of this vear when purchases in many did not materialize. lines were in excess of requirements at that time. Shoe manufacturers in this district reported a slight in Auto parts makers reported that operations held up crease in production in July over June, but no change as somewhat better than expected in July and the first half compared with last year. Salesmen experienced a slow of August. Nearly 200,000 cars were assembled in the ing down in orders for fall and winter shoes since July second and third weeks in August; makers of all products 15, although sufficient orders have been received to keep entering into these cars were operating at a high rate plants operating at a high rate through September. Local for this season and shut-dowms for change-over to 1938 plants produced 10.6 per cent more shoes in the first models were expected to be of short duration. Some re seven months than in the comparable period of 1936. Hide leases on orders for initial runs have been received and prices remained firm and higher than for some time. Shoe the fact that probably few changes are contemplated in prices are up about ten per cent over last year. the 1938 models is beneficial to parts companies. They are Strikes continued at several knitting mills and textile 5 THE MONTHLY BUSINESS REVIEW plants, particularly in Cleveland, in the first half of Aug volume were evident in July than for several months. ust. Clothing plants were actively engaged in production Sales of yard goods, silverware, toilet articles, men’s fur of fall and winter models, advance orders for which were nishings, hats and caps, and lamps and shades were smaller received in somewhat larger volume than a year ago. July than a year ago. Several other departments showed only sales of clothing at local department stores showed smaller small increases in July over last year. Credit sales declined to 57.5 per cent of total sales from increases over 1936 than did earlier months this year. Sales of women’s and misses’ wear were up nine per cent and 61.6 per cent in June, but they were higher than a year men’s clothing 2.7 per cent. Higher prices would account ago. Installment sales represented a larger share of total for all of the latter increase and a good share of the former. sales in July than in June or a year ago. They accounted Clothing inventories are reported rather large and col for 10.6 per cent of total store sales in the latest month. Collections were not quite as good in July as in June lections by manufacturers and jobbers have fallen off. or a year ago in relation to the accounts receivable at the TRADE beginning of the month. They represented 34.5 per cent Retail Department store sales in leading cities of outstanding accounts, compared with 35.8 per cent of the fourth district declined more than last year. seasonally in July as compared with June. Dollar value of stocks at department stores declined While dollar sales in July were 10.4 per cent in excess of less than seasonally in July compared with June and at last year, the largest gain reported for the various Federal the month end it was 26.3 per cent above a year ago. Reporting furniture stores in this district experienced reserve districts, this was the smallest increase reported in this district this year, allowing for the fact that an a gain of 5.7 per cent in sales in July over last year, while early Easter adversely affected April sales. The index of the cumulative increase for the first seven months was daily average sales, which is adjusted for seasonal varia 19 per cent. tion, declined five points to 92.8 per cent of the 1923-25 Wholesale A greater-than-seasonal decline in com average. For the first seven months of this year dollar bined wholesale sales was reported by sales were 16,5 per cent larger than in the comparable 60 firms in this district in four report period of 1936. ing lines. Dollar volume firms was less than two In the various cities the increases ranged from 3.6 per per cent above last year ofin all July and sales of wholesale cent at Akron to 23 per cent at Youngstown, with the groceries and dry goods were six and one per cent smaller cities for which separate figures are not reported smaller, respectively, than in the comparable of showing a gain of 25 per cent, as a group. For the year 1936. Wholesale hardware sales in July were 15period per cent to date sales of stores in these smaller cities were 24 per larger than a year ago wfiile drug sales were up seven cent ahead of last year. per cent. Prices advanced further in July, according to Fairchild's For the year to date gains were shown in all four re index. The gain over July last year was 9.3 per cent, the porting lines ranging from 9 to 20 per cent. Combined upward movement having continued uninterruptedly since dollar sales in July were 79 per cent of the monthly av last August. This was nearly equal to the rise in total erage of 1923-25. dollar sales at stores in this section, but it was not equally CONSTRUCTION distributed. Prices of housefurnishings showed the largest Plant expansion in the steel industry in the greater gains over last year, with women’s apparel, piece goods, Pittsburgh area during July raised the total value of con and infants’ w7ear following. Basement stores continued to show smaller gains in struction contracts awarded in the fourth district to $54,July over last year, the increase being 3.5 per cent; for 776,800, the highest since March 1930 when a little better the year to date the gain was 12.3 per cent. In the latest than $60 million was reported. Total contracts for the month basement store sales represented 16.8 per cent of month exceeded July of last year by 95.4 per cent, while total store volume, whereas a year ago they amounted to this June, the previous high for the year, was surpassed by 56.9 per cent. 18.1 per cent. Excluding the impetus given to July building in this In the principal departments, more declines in dollar district by the steel industry there was still a general improvement in most classes of construction with the ex ception of public utilities which fell almost 40 per cent from the July figure of last year. The accompanying chart shows the monthly value of total contracts awarded in this district since 1931 as a per cent of the monthly average of the three years 1923-25. The shaded area represents the extent to which construction in this district in various years has been below that threeyear average. Though July residential building, valued at $8,558,500 in the fourth district, exceeded the corresponding month of last year by 34.7 per cent, it fell short of the June figure of this year by 9.1 per cent. This proved to be the poorest month of 1937 to date with the exception of February when less than $6 million in residential contracts was reported. THE MONTHLY BUSINESS REVIEW 6 There had been a steady decline in residential building For the district as a whole the crop was estimated to be since the April high of over $10^ million. This falling- 52,992,000 bushels, only slightly above last year’s small off was general throughout the country. harvest and more than 20 per cent below the ten-year Fourth district figures of total construction for July average. Fields lodged badly; rains at harvest time caused 1937 indicated much greater improvement over a year considerable sprouting; and most of the oats already threshed ago than did the total for the 37 states east of the Rocky is dark colored and light weight. This condition was not Mountains, as reported by the F. W. Dodge Corporation. general throughout the country and a national crop 43 per A similar improvement for the district was evident in the cent above that harvested in 1936 was reported on August seven month total of all construction, which exceeded the 1. It was still seven per cent below the five-year average. corresponding period of last year by 50 per cent, as com pared with a 19 per cent increase in the cumulative to Corn Condition of corn varied widely throughout the dis trict in early August. In northern counties rains caused a tals for the 37 States. The decline in residential construction was felt by whole decline in condition during July. Many fields were very salers through a decline in orders, particularly in the urban weedy, of poor color, and were not earing properly in early August, while in other parts of the district condition of centers. Prices of common lumber, particularly yellow pine, were the crop improved considerably. On August 1 the estimated reported a little above the summer low in early August, harvest was 194,000,000 bushels, an increase of 11,000,000 bushels from the previous month and 20 per cent above with no change in western lumber quotations. the average harvest of the ten preceding years. For the AGRICULTURE entire country the crop wras estimated at 2,659,000,000 While crop prospects for the entire country improved bushels; it was slightly larger than the average harvest during July, weather conditions were unfavorable in most of preceding years and 74 per cent larger than the 1936 parts of this district, and the August 1 estimates of prin crop. cipal crops were slightly smaller than a month previous. The outlook for corn improved except in the northern part Potatoes The /Vugust 1 estimate of potato production for of this district, but despite the recent reduction in other this district was about equal to the average of preceding crops, prospects for most field and fruit crops are much years, but a reduction of over 2,000,000 bushels from last better than in 1936, both in this district and the entire year was expected. In northern counties much difficulty was encountered at planting time; a large quantity of seed country. and some fields were not planted until in late July. According to the Department of Agriculture, August 1 rotted In the country a larger than average crop was in crop conditions “justify expectation of crop yields nearly dicated entire by the August 1 condition. 11 per cent above average, providing there are no unusual weather difficulties during the remainder of the season”. Fruits Further improvement was evident in fruit pros It states further that “slightly less than the usual acreage pects as of August 1, and while considerable scab damage of crops will be harvested, but yields as good as those now to apples is reported in some sections, in most well-kept in prospect would result in a volume of production * * * orchards a large crop of good-sized fruit is expected. The rather large in comparison with recent drought years, but grape crop is developing rapidly and is reported to be would hardly be called excessive * * larger than in 1936. Peaches promised to be one of the Preliminary estimates of national farm income for 1937 largest crops ever harvested in this section. place it at about $9 billions, the largest since 1929. Esti mated cash income for the first half of 1937 was more Tobacco The August 1 estimate of tobacco production, both than 20 per cent larger than in 1936 for States included in this district and the United States, was slightly smaller in this district compared with 12 per cent for the entire than the month previous, but compared with last year’s country. Prices received by farmers in mid-July averaged small crop, a sizeable gain was still evident. Estimated pro about eight per cent above last year, but since that time duction of all types, for the country as a whole, was about declines have occurred in some items, particularly grains. equal to the five-year average harvest of 1928-32. Lack Expected larger income from the best fruit crop in sev of rain in most parts of Kentucky in July made it neces eral years and a better corn crop in the fourth district as sary to cut some tobacco prematurely, but rather general rains in the first half of August resulted in considerable a whole should be offsetting factors. In this district small grains were very much damaged improvement. Despite the fact that the crop is much larger by unfavorable weather at harvest time and the large yields than the small harvest of 1936, no bumper crop is expected previously expected have been reduced somewhat. Heavy at present chiefly because of the irregular condition of rains and rust in some sections resulted in much wheat many fields. Burley tobacco, used chiefly for cigarettes, is being of poor quality and having a high moisture content. the most important type raised in this district. Acreage The Ohio crop estimate was reduced 3 million bushels to planted to this type this year was 40 per cent greater than 46.151.000 bushels on August 1, but this compared with in 1936. In addition, because of the improved condition, 40.126.000 bushels last year and 31,385,000, the five-year yield per acre is expected to be higher and total produc average harvest of 1928-32. This year’s acreage yield was tion, estimated at 352,000,000 pounds on August 1, wras 61 reported at about 19 bushels, the same as the ten-year av per cent greater than in 1936 and 4.5 per cent in excess of erage. In other sections of the district similar declines oc the average harvest of 1928-32. According to the Depart ment of Agriculture, with reduced stocks and greater pro curred in July. duction, the total supply of Burley tobacco this year is Oats What was expected earlier in the season to be a expected to be about 12,000,000 pounds greater on Octo fair oat crop has turned out unfavorably in this section. ber 1 than a year ago. This year’s estimated crop is larger THE MONTHLY BUSINESS REVIEW 7 than Burley tobacco consumption in any previous year, but Fourth District Business Statistics the trend of Burley tobacco consumption has been upward (000 omitted) recently. A repetition of last year’s high prices, when the Fourth District L'nless July change Jan.-fuly % chant?' Otherwise Specified.................. 1937 from 1936 1937 from 193< crops averaged 35 cents a pound, is not to be expected. Bank Debits— 24 cities............ $2,690,000 + 11.6 317,982,000 + 16.4 % Wholesale and Retail Trade (1937 compared with 1936) Percentage Increase or Decrease STO C KS SA L E S SALES July July first 7 1937 1937 months D E P A R T M E N T ST O R E S (51) + 2 6 .4 Akron................................................................. + 3 .6 + 1 5 .6 + 3 5 .0 + 1 2 .5 + 1 4 .2 C incinnati....................................................... + 2 2 .5 C leveland......................................................... + 9 .6 -j-12.8 + 17.8 C olu m b us........................................................ +6.3 + 1 1 .6 + 29 .6 P ittsbu rgh....................................................... +9.6 + 2 1 .3 + 2 0 .3 T o le d o ............................................................... + 1 1 .0 + 1 0 .2 +12.2 W h eeling.......................................................... + 6 .2 + 1 2 .1 + 31.0 Y o u ng sto w n ................................................... + 2 3 .2 + 2 0 .5 + 18.9 Other Cities................................................... + 2 5 .2 + 2 2 .9 + 26.3 D istrict............................................................. + 1 0 .4 + 1 6 .5 W E A R I N G A P P A R E L (13) + 4 .3 Cincinnati........................................................ +5.6 +8.1 + 12.4 Cleveland......................................................... + 8 .3 + 1 3 .6 .6 Pittsburgh....................................................... +9.1 + 2 0 .4 ++ 2 93.2 Other C ities................................................... + 2 4 .7 + 1 8 .8 + 11.2 D istrict............................................................. + 1 1 .1 + 1 4 .4 F U R N I T U R E (41) Cincinnati....................................................... * + 8 .3 + 3 0 .2 Cleveland........................................................ + 2 .5 + 1 5 .4 C olu m b us........................................................ — 1 0.2 + 1 8.3 D a y t o n .............................................................. + 1 1 .5 + 1 9 .3 T o led o ............................................................... +4.8 +1.2 Other C ities................................................... + 3 0 .4 + 4 0 .1 D istrict.............................................................. + 5 .7 + 1 8 .7 C H A I N ST O R ES* Drugs— District ( 4 ) ................... .............. +9.7 +9.4 +2.7 +7.8 Groceries— District ( 4 ) ............................ W H O L E S A L E G R O C E R IE S (29) A kron................................................................. — 6 .3 + 4 .3 C levelan d......................................................... — 7 .2 +7.7 E rie..................................................................... + 1 0 .6 + 1 2 .8 P ittsburgh....................................................... — 2 .7 — 0 .1 +5.6 + 1 0 .2 T o le d o ............................ .................................. Other Cities................................................... — 10.3 + 1 1 .0 + 14.9 D istrict.............................................................. — 6.1 + 8 .9 + 4 8 .2 W H O L ESA L E D R Y GO ODS (10).. . . — 1.3 + 1 0 .3 W H O L E S A L E D R U G S ( 1 0 ).................... +7.0 + 1 3 .9 W H O L E S A L E H A R D W A R E (11). . . + 1 4 .8 + 2 0 .8 *Per individual unit operated. Fourth District Business Indexes (1923-25 = 100) Bank Debits (24 cities).......................................... Commercial Failures (N u m b e r )......................... ” ” (L iabilities)..................... Sales— Life Insurance (O. and P a .) ................. “ — Department Stores (49 firms)............. “ — Wholesale Drugs (10 firm s)................ “ — “ Dry Goods (10 firms). . . “ — “ Groceries (29 firms)......... “ — “ Hardware (11 firms). . . . “ — “ All (60 firm s)...................... “ — Chain Drugs (4 firms)**.......... Building Contracts ( T o t a l ) . . .............................. “ “ (R esiden tial)....................... Production— Coal (0., W. Pa., E. K y.). . . . “ — Cement (O., W. Pa., E. K y.). “ — Elec. Power (O., Pa., K y.)*. . “ — Petroleum (O., Pa., K y.)*. . . . “ — Shoes....................................... .. . . . . *June. **Per individual unit operated. I ulv July July July July ‘1 937 1936 1935 1934 1933 60 89 73 65 99 75 47 38 32 36 61 39 16 13 38 94 85 89 90 90 51 48 55 71 63 84 76 97 68 103 52 34 35 43 43 63 59 72 86 82 56 57 83 64 95 59 58 79 78 64 69 69 99 90 79 14 47 21 59 115 12 37 12 25 50 72 59 72 51 73 88 83 103 76 188 172 143 134 133 93 131 122 111 113 118 118 113 108 102 Savings Deposits— End of month: 1 40 banks, O. and W. P a......... . . . . 3 761,800 + 6.2 Life Insurance Sales: Ohio and P a................................ 85,027 — 1.5 650,034 Retail Sales: Dept. Stores— 51 firms.......... 139,317 16,265 + 10.4 Wearing Apparel— 13 firms. . . . $ 676 + 11.1 6,243 Furniture— 41 firms................. . . . . 3 7,711 928 + 5. 7 Wholesale Sales: Drugs— 10 firm s...................... 1,385 + 7 .0 9,847 Dry Goods— 10 firms........... 8,666 1,048 — 1.3 Groceries— 29 firms................ 4,354 — 6.1 29,347 Hardware— 11 firms.............. .. 11,750 1,735 + 14.8 Building Contracts— Total, 54,777 + 9 5 . 4 214,688 “ “ — Residential. $ 8,559 + 34.7 63,257 Commercial Failures— Liabilities 3 5,150 700 + 2 0 . 7 472 — 11.3 “ “ — Num ber. . . 3 7 32 Production: "M ~>7 ~> Pig Iron— U. S........................ tons 3,501 + 34.9 Steel Ingot— U. S...................... 4,557 + 16.4 33,321 360,2752 — 3.1 Auto-Pass. Car— U. S............ 2,647,23 3 2 78,5592 + 14.2 “ — Trucks— U. S............. 580,4502 Bituminous Coal, 0 ., W. Pa., E. K y .................................................. tons 13,287 + 1.4 102,901 5,671 Cement— O., W. Pa., W. Va. bbls. 1,097 — 11.3 Elec. Power, O., Pa., K y .......... ......................................thous. k.w.h. 9,7584 1,576* + 9.1 Petroleum— O., Pa., K v .......... bbls. 2,428s + 7 .6 13,735* 5 5 0.0 pairs 31,0134 5,3 39s — 4 .9 Bituminous Coal Shipments: 24,063 L. E. P o rts ................................ tons 6,108 — 7 .9 Iron Ore Receipts: L. E. P orts................................. . tons 7,555 + 4 9 . 2 23,642 1 not available 4 Jan.-June 5 confidential 2 actual number June + 9 .2 + 16.5 + 14.4 + 18.7 + 13.9 + 10.3 + 8 .9 + 20.8 + 50. 1 +62. 1 — 30.3 — 17.1 + 4 3 .9 + 32.3 + 9 .7 + 12.5 + 14. t + 21.0 + 15.6 + 7 .7 + 10.6 + 16.5 + 16.6 + 9 0 .5 Debits to Individual Accounts (Thousands of Dollars) Year to date 4 weeks % ended change Dec. 31, 1936 Aug. 18 from to 1937 1936 Aug. 18, 193 7 + 15.6 3527,089 Akron................. 361,003 9,877 80,937 B utler................. + 2 8 .0 + 22 .9 C an to n ............... 36,056 306,675 2,743,009 314,683 + 9 .4 C incinnati. . . . 575,092 + 15.4 4,815,455 C levelan d......... 1,437,309 161,965 + 4 .0 579,783 65,737 + 11. 3 256,691 33,431 + 31. 5 27,577 2,948 — 5 .0 F ranklin............ Greensburg. . . 7,305 + 15. 1 57,2 45 12,409 98.804 + 17.8 + 2 4.4 26,304 H o m e stea d .. . . 3.354 197,784 18,835 + 21.2 10 '\ 232 L im a .................... 12,663 + 15. 6 5,084 + 24.5 41,268 Lorain................. M id dletow n. . . . . . 10,354 + 28. 1 83.464 10,371 + 18. 7 87,054 Oil C it y ............ Pittsburgh. . . . 738,991 + 9 .4 6,021,518 Sharon................ 71,349 + 21 .2 9,394 Springfield. . . . 145,576 16,902 + 11.2 Steubenville, , . 10,900 + 16.4 85.913 1,058,614 127,404 + 11. 9 80,819 W arren............... 9,484 + 30.2 W h eeling.......... 34,305 + 22.1 274,550 49,826 + 24.2 412,256 Youngstown Zanesville.......... 7,722 + 20. 7 64,665 T o t a l.............. 2,346,095 + 12. 3 19,690,940 Year to date % Jan. 2, 1936 cha nge to from Aug. 19, 1936 1936 3445,692 + 18. 3 63,311 + 2 7.8 249,891 + 2 2.7 2 423 21 1 + 13. 2 + 17 .0 4,115,410 1,293,530 + 11.1 468,401 + 23.8 + 34. 7 190,608 24,550 + 12. 3 51,153 + 11. 9 81,607 + 21.1 19/,91 + 3 3 .6 146,707 + 34. 8 84.618 + 29. 1 29,196 + 41 . 3 67.431 + 23. 8 74.362 + 17.1 5,328,916 + 13. 0 56.389 + 26.5 118,002 + 23. 4 + 40.8 61,028 864,216 + 22. 5 61,055 + 32. 4 + 15. 7 237,290 + 23. 7 333,264 55,043 + 17. 5 16,944,572 + 16.2 8 THE MONTHLY BUSINESS REVIEW Sum m ary of N ational Business Conditions By the Board of Governors of the Federal Reserve System INDUSTRIAL PRODUCTION A -\v A 1S23 1330 j A ^V 1931 — frV f - $ 'M V (932 1933 1335 1936 1937 Index of physical volum e of production, adjusted for seasonal variation, 1923-25 — 100. B y m onths, January 1929 to July 1937, the latest figure being 114, pre lim inary. FACTORY EMPLOYMENT Index of num ber em ployed, adjusted for seasonal variation, 1923-25 — 100. By m onths, January 1929 to July 1937. L atest figure 103.3. WHOLESALE PRICES V- \ . k 1923 1330 1931 . it* ,f/'- f 1932 1933 1934 1935 1936 1937 Index com piled by the U nited States B u reau of Labor Statistics 1926 rr 100. By m onths 1929 to 1931; by w eeks 1932 to date. L atest figure is for w eek ended A ugust 14, 1937. MEMBER BANK LOANS AND INVESTMENTS W ednesday figures for reporting mem ber banks in 101 leading cities. Septem ber 5, 1934 to A ugust 18, 1937. Loans on real estate and loans to banks excluded. Total volume of industrial production and distribution of commodi ties to consumers showed little change from June to July, when allowance is made for the usual summer declines. Production and Employment The Board’s seasonally adjusted index of industrial production was 114 percent of the 1923-1925 average in July, the same as in June and 4 points lower than in March, April, and May. At steel mills, where output in June had been curtailed by strikes, activity increased considerably in the early part of July and wTas maintained at the higher level between the middle of July and the third wreek of August. Lumber production also increased in July, while output of plate glass showed a substantial decrease. Automobile assemblies declined seasonally. Output of non durable m anufactures decreased considerably, owing largely to a m arked decline in activity at cotton and woolen textile mills. Meat packing also declined, while flour milling and sugar refining increased. At mines, out put of anthracite was reduced in July, while output of most other minerals showed little change. Construction contracts awarded, as reported by the F. W. Dodge Corporation, were maintained in July at the level reached in June. Nonresidential construction expanded further, reflecting principally a large volume of awards for iron and steel plants and for railroad projects. Resi dential building showed a seasonal decline. Factory employment increased somewhat from the middle of June to the middle of July, when a decline is usual, and factory payrolls de creased less than seasonally. The largest increases in employment were in the steel industry and in the food industries, particularly at canning factories. Other m anufacturing industries as a group showred somewhat less than the usual seasonal decline. Agriculture A cotton crop of 15,593,000 bales, representing an increase of 3,200,000 bales over last season, was forecast by the Department of Agriculture on the basis of August 1 conditions. Official estimates indicate that other m aior crops will be considerably larger than last season and about equal to the average for 1928-1932. Preliminary estimates by the Department of Agriculture indicate that cash farm income, including Government pay ments. will total $9,000,000,000 for the calendar year 1937, an increase of 14 percent over 1936. Distribution Distribution of commodities to consumers in July continued at the level of other recent months, when allowance is made for the usual summer decline. Sales at department stores and variety stores showed slightly less than the seasonal decrease in July, while mail order sales declined somewhat more than seasonally. Freight-car loadings increased, reflect ing in part larger shipments of grains and forest products. Commodity Prices From the middle of July to the third week of August prices of grains and cotton declined substantially, while livestock and m eats showed a further increase. Automobile prices were raised by most producers, carpet prices advanced, and there were increases in several industrial raw m a terials, including hides, zinc, lead, and steel scrap. Cotton goods and rubber declined somewhat. Bank Credit From the middle of July to August 4, excess reserves of member banks were sharply reduced from $960,000,000 to $700,000,000, but sub sequently they increased to $780,000,000 on August 18. These changes in member bank reserves reflected principally fluctuations in the volume of Treasury deposits at Federal reserve banks, together with a seasonal in crease in money in circulation. Excess reserves at New York City banks declined from $230,000,000 to about $40,000,000 and subsequently increased to $130,000,000. Total loans and investments of reporting member banks increased somewhat during the four weeks ending August 18, reflecting principally an increase of $150,000,000 in commercial loans offset in part by further decline in holdings of United States Government obligations, principally at New York City banks. The growth in commercial loans occurred both in New York City and in other cities and included the purchase by banks of a large portion of the $60,000,000 of 9-month notes sold by the Com modity Credit Corporation on August 2. United States Government deposits at reporting banks increased dur ing the period, reflecting purchases by banks of Treasury bills on a bookcredit basis. Bankers’ balances and other demand deposits showed further declines at New York City banks.
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