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The Monthly Business Review Covering business and industrial conditions in the Fourth Federal R eserve D istric t FEDERAL RESERVE BANK OF CLEVELAND D . C. W ills, C h a irm a n of th e Board (COM PILED NOVEMBER 15, 1919) VOL. 1 CLEVELAND, OHIO, D EC EM BER 1, 1919__________________________________ No. 11 USINESS again has had its attention strongly called to the resourcefulness and stability of the Federal Reserve System by its recent curbing of speculation. Speculation can no longer w ork | itself into a frenzied panic, draw ing whole businesses and industrial activities w ith it. W ith its control of reserves and the gradual sliding up of rediscount rates, the System can quickly bring a speculating public to sane action and prevent an added thorn in the flesh from doing serious damage. B W ith the steel strike a failure, the coal strike crumbling, the fading away of the lo n g sh o re m e n ’s strike, the striking “vacationist” printers realizing that a long vacation is before them , to g eth e r w ith the results of the M assachusetts election staring th em in the face, is it any w onder th a t the executive council of the American Federation of Labor in its call to union chiefs for a conference on Decem ber 13 should say: “ In this critical reconstruction period labor is confronted w ith grave dangers affecting every foundation of its s tru c tu re ” ? The chiefs of the railroad brotherhoods and the representatives of farm organizations w ere also invited to participate in this conference. The farm er, however, in the convention of the National Grange has declined the invitation, doubtless reasoning that the way to improve conditions in this “ critical reconstruction period” is to keep right on “ sawing w ood” r a th e r than by driving a spike into the log and putting the saw on a “vacation” which is a new polite w ord for plain striking. An editor of one of the labor publications in this District said recently th at organized labor in p e r m itting the radical leaders to “ bore from the inside,” as W illiam Z. Foster him self openly confessed, had put itself back fifteen years in the sym pathies of public sentim ent. At this period in the affairs of capital and labor there is the opportune m o m e n t for the display of the fact that labor leaders have m isread and m isjudged Am erican labor. The psychological m om ent has come for the absolute removal of some, at least, of the heads of organized labor, and ju s t as radi calism and its teachings is disappearing before public scrutiny and popular acclaim, so the Am erican laborer should be allowed to assert his individualism. This will develop a more careful scrutiny in the methods and character of his organization leader and ultim ately insure a b e tte r standing in a court of equity. T he steel strike was in strum ental in bringing to the surface the scum of radicalism in organized labor which was apparently w orking unopposed. This u n e a rth in g should resu lt in more prosecutions and deportations of those anarchy-breeding destructionists, who use our United States as an in te r national boarding-house and an anarchistic cafe. The fires of im m igration have been allowed to burn too freely and our m uch fam ed “ m elting p o t” has boiled over, unable to so rapidly re n d e r the polyglot peoples of the world into pure Americans. Investigation shows th at only 30 per cent of the aliens who have come to this country have become American citizens. In other words, less than one-third of our im m igrants become Americanized. The statem ent that there are 20,000,000 people in Am erica w ho have no un d e rsta n d in g of our language and form of government is interesting but not of great import. Education will rem edy th at condition in tim e at least in some degree. But the fact th a t our basic industries are in the grip of aliens is a menace that has not fully been appreciated up to the p rese n t time. THE M O N T H L Y BUS I NES S REVI EW. 2 The great American people is fast reaching the point w here it is unwilling that our nation should be exploited by either capital or labor. N either should be perm itted to rule the Government, nor one ♦attempt to be the overlord of the other. The right to work, the right to be free, and the right to be free to work were builded into the foundation upon which our country was founded. Carlyle believed a m an ’s honest labor only slightly removed from his religion; it therefore takes on the nature of sacred ness and should not be subjected to the indignity of exploitation. Capital as well as labor m u st practice the spirit of fairness, honesty, and justice, for schem es, union recognition, open shop and industrial democracy are only “ ’round Robin Hood’s b a rn ” by-w ays w h ich m ust eventually term inate in these th re e qualities before this industrial war will end. Seemingly every concession made to organized labor has been the p a re n t of a new dem and. T his spirit is illustrated by the increased wages of the railroad brotherhoods, but being dissatisfied w ith these they come back and dem and the railroads themselves. W e are a country d ru n k with prosperity— a vast people perm eated with the “ g e ttin g - s o m e th in g for-nothing” idea. W e need to sober up and come to our senses. W e should recall th a t in d u stria l Ger many is working twelve and fourteen hours a day instead of six and eight. The antiquated law of supply and dem and ought to be p erm itted to rea sse rt itself. W e should be constantly rem in d ed of the enor mous debt hanging over our heads, and the only way a debt is ever paid is by w orking and saving. To put up wages and not put up salaries is to overfeed part of our w orkers and starve th e others. As the prese n t order stands, our very educational institutions are being menaced. W h e n dock steve dores, soda fountain clerks, and delivery boys are able to obtain b e tter wages th an college p rofessors and college trained men, can our youth be blamed for dodging ten years of expensive tra in in g and tak ing a short cut to independent living? It makes it difficult for th em to see why they should substitute finer thoughts for finer food and living conditions. W a r w ages should not be peace wages, but they cannot be reduced while m en receive tw ice as m uch money for w orking p a rt of a day as they should receive for w orking a w hole day. It is not only th at part of the people represented by unions that has lost its balance. L ess w ork and more pay is not confined to any one group. To the m ental twist, affected by the p ro sp e rity o f the w ar period, the relaxation which has followed the release of w ar-tim e restraints has given an additional turn. The whole country is in a bad state of mind. If it does not recover its balance by reason alone it m ust have the jolt of an unpleasant experience. It would be a fortunate thing if we could recover our balance by reasoning, for if we do n o t w e will pay the penalty the natural economic law prescribes— contention, disturbances and d epression. Looking beyond all this, we still have man power, natural resources, producing m achinery, habits of scientific practice, ambition, and we are fundam entally sane. It is only for the n e a r fu tu re that the outlook is uncertain. Speculative Tendencies Have a Setback by Federal Reserve Board's Action . W ith o u t doubt, the increase in rates of discount at the Federal Reserve banks has been the m ost im portant event in the money market. The mental suggestion that credit expansion had reached a point at which a w arning was necessary, rather than the direct effect, is the real feature of this increase in rates. W h e th e r this w a rn in g is sufficient, time alone will tell. Our banks are experiencing an unprecedented demand for credit. Commodities of all kinds b u t especially the necessities of life, comm and staggering prices, and in many cases are the basis of s p e c u lation. Speculation, not only in commodities and real estate, but in securities of all kinds, has been indulged in to a greater extent than ever before. People who never made a practice of investing m erely for speculation have been carried along in the wild scramble for “ easy money.” T he resu lt has been an unprecedented dem and upon our m em bers, and on banks in general, for credit. In addition to this demand, there has been a dem and from the rural districts for the m ovem ent of crops, especially tobacco, and the purchase of cattle for feeding and fattening p urposes; and from the centers of the steel industry, w here the effects of the strike are being keenly felt. The r e s u lt has been requests for abnorm al rediscounting and borrowing, and in m any cases, not only to take care of the THE M O N T H L Y BUS IN E SS R EVI EW. 3 legitimate demands of the banks’ com m unities, but also the speculative dem ands. Taking it all in all, a tremendous expansion of credit has taken place, and at a time when, u n d e r ordinary circum stances, liquidation should have been the order. No doubt the lure of the high rates on call money in New York has also had its bearing on the situation. Another result in this District of the increase in the rates is th at paper secured by the Liberty Loan and Victory Bond issues no longer com m ands a preferential rate over com m ercial paper, suggesting that the time has arrived w hen a great effort m ust be made to practice th rift and economy, and to apply the product of thrift and economy to a reduction in the loans against United States securities— in other words, to put the w a r issues back of us and thus release funds for our com m ercial and indus trial enterprises. The demand for both comm ercial and collateral loans is very strong and rates are high and firm. Only the highest grade comm ercial loans are being made at 5 p er cent, all others secured and u n secured are being negotiated at 6 per cent. y2 The uncertainty and unfavorable developm ent of conditions su rrounding the discount m arket of the Fourth Federal Reserve District during the past month, have had a reactionary effect on the volume of the acceptance business. In the early part of the m onth the general im provem ent of the m arket spread a great deal of optimism am ong the dealers, but the constantly increasing rates for call money and the change of rates by the Federal Reserve Banks soon caused the m ark e t to become very dull. T here has been a complete falling-off of business from new sources, as well as from banks th at w ere already in the market. The only supply of bills at p rese n t comes from the banks th a t had made previous arra n g e m e n ts with th eir custom ers to accept their drafts. T h e re seem s to be no indication th at the banks are encouraging the use of b a n k e rs ’ acceptances while such a small m argin rem ains to their credit, in comparison with other form s of com m ercial paper. It is too early to state w h a t ultim ate effect the change in discount rates will have on the open m arket, but so far it has tended to stop all activity. The portfolios of the brokers are filled, and they are not seeking additional bills until there will be some hope that the form er dem and will be restored. It would seem that the higher rates would attrac t new buyers into the acceptance m arket, and this is expected unless other form s of loans rise to rates th at are u n heard of. J u s t at p rese n t it seem s th a t the entire m arket is awaiting a re a d ju s tm e n t of p re s e n t conditions, and all are w atching the action of others to learn w hat procedure will be necessary. Effects of Steel Strike Greatly Minimized. Production Almost Normal . W ith the steel strike now reduced to a scale of small importance, producers and consum ers are more concerned with the effects of the loss of production previously incurred than w ith p rese n t op e ra t ing difficulties. Except for a very few spots, W e s te rn Pennsylvania may be said to be practically free from strikes. The W heeling district rem ains alm ost entirely closed. It is estim ated th at the strike th u s far will involve a loss of about one m o n th ’s production. Apparently steel has not become as scarce by reason of the strike as was expected— the forecasts of scarcity having been based upon the assum ption th at steel was far from plentiful before the strike began. The large dem and was occasioned som ew hat by the disposition to stock up. The production of steel for October, it is said, averaged about 60 per cent of the rate imm ediately before the strike while production at the p resent is estim ated at 70 per cent of this am ount. A prem ium is the present rule for im m ediate shipm ents in small tonnage lots. The regular m arket is governed by the March schedule. Common grade sheets are in good dem and and the supply fairly adequate, with a better situation than th a t of th irty days ago. .The strike seem ed strong w here this grade of sheet was made and the effect was im m ediate and the curtailm ent pronounced. The effect was also to curtail the processes necessary for special sheets. Production is reported to be constantly on the increase. Automobile builders have suffered not alone for w a n t of sheets, b ut also in the m a tte r of other materials. 4 THE M O N T H L Y BUS I NES S REVI EW. Sheet mills are reported averaging 75 per cent operation. In the P itts b u rg h district at lea st tw o of the larger steel interests are reported operating at normal, while some outside plants are reported going very light. The coal strike as yet has not been a factor of im portance to the iron and steel industry, i t is said practically all mills have a store of coal sufficient for from two to four weeks. The G onnellsville region reports they have not been affected by the coal strike. Last year this region produced for its record weekly output and for its own coking operations 500,000 tons besides shipping several hundred thousand tons. Recently the region produced 300,000 for its own coking beside a much larger ton nage to outside consumption. The loss in general output of steel during the past eight weeks has ru n to large figures a nd p resen t trade conditions in the industry revolve about this situation. Makers will carry past the first of the year, a large volume of orders which should have been delivered during the final quarter. T his is strongly influencing th eir attitude as to accepting new business and it also has an im p o rta n t effect upon th e play of prices. Because of this large accum ulation of overdue tonnage, mill capacity will be occupied for a considerable portion of the first quarter in clearing up old obligations and c o n seq u e n tly th e m anufacturers are acting very conservatively in negotiating or encouraging new sales. Buyers are bringing a great deal of pressure upon the mills for first quarter contracts. Conditions a re reach ing the point w here some of these may be accepted soon, although this will signify to the consum ers m ore of an assured position on mill books for shipm ent the m om ent the circum stances pe rm it, than any definite promise of delivery. The current consum ption of steel is exceedingly heavy and this is m aking it a difficult m atter to apportion available supply. It is quite probable that before production shall have rea c h e d the point w here ordinary dem ands may be m et that some lines of activity may be forced to r e tr e n c h or to keep expansion program s in check because of the lack of an adequate supply of steel. In the export field the large producers have been adopting a policy of declining any fu rth e r orders, a lthough during the past w eek th ere has been some easing up of this attitude. The foreign dem and continues exceed in gly heavy, notw ithstanding the unfavorable exchange situation. Looming dem and of the railroads for large quantities of steel presents a problem u n d e r p resen t conditions. Anticipating an early retu rn to private control, many of the roads individually now are in the m ark e t for large lots of rails for 1920 delivery. As the taking out of this m aterial is dependent upon th eir restoration to private status, rail producers are not inclined to accept these contracts. If private ow nership retu rn s and the railroads dem and large tonnage of rails and o th er steel for rehabilita tion, as there is every indication th at they will, it is a question of how this m aterial will be supplied. It is a p p arent th a t it cannot be handled in quantities before an extended date, w ith th e m ills so con gested and behind in orders as at present. Iron and steel prices are reflecting the stringency of supply and are showing a s h a rp advancing tendency. The rise in prices in steel products is being held in check by the attitude of th e largest producers who are taking a firm position against higher prices with a viewpoint tow ard national good. These interests continue to quote the form er level of prices, but inasm uch as they are unable to furnish any substantial am ount of product for early delivery, material available for quick s h ip m e n t is com m anding constantly higher prem ium s. Here and there producers have a d o p te d 'h ig h e r schedules for their material. But this is not the rule in finished steel lines. In the crude and sem i-finished materials, the rise of prices has been m uch more pronounced. Semi-finished steel, pig iron and scrap all are several dollars higher than a m onth ago. The most m arked advance has been in pig iron. U nder an acute shortage of spot metal, the pig iron m arket has gone up sharply during the past several weeks, and this m ovem ent still is continuing. The net advance in the various grades of iron during the past three or four w eeks has been from $4 to $5 a ton. The higher m arket also has applied to first quarter and first half contracts and a large ton nage of business for those deliveries has been closed by the furnaces on a rising scale o f prices. The unsatisfied inquiry for pig iron is large. An index to the improving conditions in iron and steel is shown by statistics of blast furnace opera tions for October as compiled by The Iron Trade Review. W hile the October production of 1,978,218 tons of pig iron was 502,572 tons less than in Septem ber, the n u m b er of furnaces in blast on October THE M O N T H L Y B US I NE S S R E VI EW . 5 31, was 54 more than on the corresponding date in Septem ber. T he figures of operating stacks were 217 and 163 respectively. The loss of output from the strike fell mainly in October as com pared with September because the walkout occurred late in the preceding m onth and its influence upon the pro duction of that period was limited. November is carrying forw ard the October im provem ent, many additional furnaces having resum ed since the first of the month. A n u m b e r of these have been in Cleve land and Youngstown districts w here the strikers have been holding out m ost stubbornly. Earnings of Lake Fleets Greatly Reduced by Labor Troubles, Although m uch time has been lost by the lake fleet since A ugust 1, due to strikes on the docks, at the steel plants, and the coal mines, the clean-up will be earlier than usual. Boats have been sent to the dock for the w inter since the first week of November, and a large p a rt of the fleet was laid up by the middle of the month, owing to the scarcity of cargoes. Earnings of vessels w ere greatly reduced during the later part of the season, as m uch tim e was spent in port on account of labor trouble, and some of the fleets lost money on the season. The freight m ovem ent will show a big decrease com pared w ith the past few seasons, and while figures will not be made up for some time it is quite certain th at shipm ents of ore, coal and grain will be 20,000,000 tons less than they were in 1918. Ore shipm ents up to November 1 w ere 43,978,414 tons which is a decrease of 12,892,457 tons compared with the same time in 1918. It is not likely th a t the total m ovem ent for 1919 will exceed 48,000,000 tons. Shipm ents for last season w ere 61,156,732 tons and the loss will be about 13,000,000 tons. T h e m ovem ent has been very light the past few weeks owing to cold w eather, as the ore w as badly frozen. There is more ore in store at Lake Erie ports th an th ere was a year ago and nearly all the s to r age room has been taken. On November 1 the docks at this end of the route w ere holding 10,004,767 tons and on the same date in 1918 stocks were 9,909,279 tons. At the opening of the season it was figured th at 22,000,000 tons of coal would m eet the req u ire m ents of the lake trade, and the m ovem ent will be very little sh o rt of th a t figure as shipm ents up to N ovem ber 1 w ere about 20,750,000 tons. T he general opinion, however, is th at little coal will be on dock at the u p per lake ports at the open ing of the 1920 shipping season. Grain figures are not available, but the m ovem ent has been very light and will show a big loss com pared with 1918. Most of the w h e a t th at is at Duluth will be held for milling purposes and as stocks are small very little tonnage will be wanted. Stocks are m uch sm aller all around than they w ere a year ago, although there is considerable grain in the Chicago elevators. Coal Production Practically Negligible, Great in te rest th ro u g h o u t Ohio centers in the settlem ent of the coal wage controversy. W hile the strike is over officially, reports from the m ining sections show that comparatively few m iners are re tu r n in g to work. Operators who have studied the situation carefully say th at thousands of m iners will refrain from w ork as long as possible, w atching developments at the conference of operators and m iners at W ashington. W hile the output of coal from non-union mines increased th ere will doubtless be a limited produc tion of coal for several weeks. It is essential both because of the coal strike and in order th a t needs for the w in ter may be looked after, that fuel be used as economically as possible. Ohio oil wells have been of the gu sh e r variety and th eir production has been m aintained for years. There are approxim ately 2,000 wells in the Ohio Clinton sand with an estim ated total produc tion of 7,000 barrels. As developm ent goes north, th ic k e r sand is found and from it larger production, a s compared to the older fields in Perry, Hocking and Fairfield counties. The Black R un pool, located in Muskingum and Licking counties, has been the m ost prolific am ong ne w e r pools. The W e s t Carlisle at the junction of Muskingum, Coshocton and Licking also has been decidedly profitable. THE M O N T H L Y BUS INES S REVI EW. 6 Among its new er wells are: one in Coshocton County, estim ated at 200 ba rre ls; Black Run, 100 barrels; Licking County, 100 barrels. Manufacturing Plants Working at Capacity . Reports from m an u fa ctu rin g plants indicate no startling change from last m onth with the exception of m an u fa ctu rers of w ooden-w are goods, who report orders received in unprecedented volume. This line showed no activity during the war, but plants are now working at capacity, and in some instances plans are u n d e r way to enlarge p resent quarters to provide for orders now booked or in prospect. It is significant as indicating the prosperity of the people generally to note that one m anufacturer of clothes-w ringers reports m ore than capacity business, with the bulk of orders coming from m akers of electric w a sh in g -m a ch in e s, w h o report the best business in th eir history. Most m anufacturers report no difficulty in securing all necessary grades of steel, and m etal m anu facturers report capacity business. Their great problem now is to contend with the “scarcity and indifference of labor.” The steel strike, while it has caused some slight inconvenience, has not in ter fered materially with production. One large automobile m aker states th a t “ right from the tim e th e strike was declared, we have been getting good shipm ents of steel from a n u m b e r of mills.” Motor car concerns, w ithout exception, are enthusiastic over the outlook. The dom estic dem and exceeds the supply, while foreign orders continue to pile up— in many instances from c o u n tries w h ere it was thought there would be no m arket for American goods for some tim e to come. O rd e rs now on the books assure continued activity in this line for months. Tool m anufacturers report business holding up well, with many orders and inquiries from abroad. An active dem and from automobile makers for tools is noted. Refractories Manufacturers Optimistic in the Face of From a Ten to T hirty Per Cent Reduction in October, Production and shipm ent statistics for the m onth ended October 31st (the latest available) indicate a reduction of ten per cent, in October as compared w ith S eptem ber on fire clay brick used in the metallurgical industries and a still grea ter reduction in silica brick. In the latter, production fell off thirty per cent, and shipm ents forty per cent. The fallin g off in shipm ents was felt more sharply during the earlier part of the month, w hen the successful operation of m any of the steel plants was still problematical. Refractories m an u fa ctu rers w ere optim istic, how ever, and did not reduce th eir rate of production until well into the month. Indications are that w hen the figures for November are filed, it will be found th at shipm ents have been generally resum ed by all of the refractories plants in the district and th at stocks will be depleted owing to the fact that the th re atened coal shortage had a tendency to slow up production, m any m anu facturers lim iting th eir kiln-setting to the quantities of fuel actually on hand from day to day. Agricultural Showing Not So Favorable. Generally speaking, agricultural conditions do not m easure up to the m ark indicated in the last REVIEW. Unseasonable rains have caused consider able dam age to the corn crop th roughout the District. Sprouting of the corn in shock is reported at num erous points, and rotting of both corn and fodder appears to be alm ost general. Som e com plaint is heard from farm ers that the quality of farm help is not up to standard, resulting in poor shocking and its subsequent evils. Fall w heat is only fair, on account of w hat appears to have been a desire to sow early, w ith the result th at the Hessian fly has made its appearance and is doing some damage. The mild, rainy fall w e a th er has caused a growth som ew hat g reater than usual at this season, and it is feared that u n less a protective snow covering comes before continued freezing w e a th er sets in, serious dam age w ill be done to the crop. The tobacco m arket will open shortly a fter this issue of the REVIE^V goes to press, w ith every indication th at high prices will prevail. The crop is estimated o n e -q u a rte r to one-third short, but it is believed that the money retu rn will be as great as last year. The dem and is brisk for all grades of tobacco, a large p a rt of which is for export. 7 THE M O N T H L Y BU SI NE SS R E V I E W . Hog cholera has again made its appearance in Ohio, and some hogs are being sold before properly fattened for fear this disease will spread and affect now healthy stock. The prese n t price of pork does not justify feeding m uch of high-priced grains. The same is true with respect to beef cattle. W ith feed high, and the spring m arket so uncertain, it is not surprising th a t feeders shown no disposition to fatten cattle for market. CROP ESTIMATES FOR FEDERAL RESERVE DISTRICT N o. 4. Forecast of produc tion based on condition N ovem ber 1, 1919. (CLEVELAND) Production, 1918 Acreage, 1918 Crop Acreage, 1919 Acres Bushels Acres Bushels C orn................................ 5,273,000 209,722,000 5,442,000 184,232,000 No Immediate Reduction of Price Expected in Merchandise . Retailers rep o rt an extraordinary volume of business, in some instances 1 0 0 per cent over the corresponding m onth of last year. The m onth shows the biggest increase of the entire year. This increase is occasioned in part by the keen and active buying on the p a rt of the public, but it is largely influenced by the fact th a t last year business was slowed up considerably by the influenza, w a r and w e a th er conditions. Market conditions with regard to purchases are practically the same. Deliveries are slow and many grades and kinds of m erchandise are only being received un d e r allotment. The textile business for the past thirty days has been exceedingly good w ith a brisk dem and for every kind of m erchandise. Stocks in m an u fa ctu rers hands are the low est th a t has ever been known. The output of the mills is sold at prese n t up to April-May, 1920. W ools of a m edium to a low grade are in plentiful supply w ith gradually low ering prices. W ools o f the finer grades are exceedingly scarce and very high, and th ere does not seem to be any indication of the lowering of the finer wools for some considerable time. General m ercantile prices show no sign of immediate recession, in fact practically all spring o rd ers have been booked at considerably higher prices. Buyers still refuse to be interested in cheaper goods, insisting on having the higher grade articles in spite of w h a t would seem to be prohibitive prices. Reckless buying seem s to be as ram p a n t as ever. As long as people are dem anding and willing to pay for expensive clothes the m an u fa ctu rer will make th em and the w holesalers and retailers will have th em on their counters. Not until discrimination sets in can we expect to see a reduction in prices. Large Volume of New Building. Conditions in the building industry continue to improve and the demand for basic building m aterials is increasing. A study of the table given below shows th at the percentage of increase for October, 1919, as compared with 1918, is 483.4 p er cent, while the in crease of new construction during October, 1919, has increased $857,108 over the previous month. These figures are gathered from the incorporate cities listed in the table below and do not include a very large volume of new building which is going on in the suburbs. BUILDING OPERATIONS FOR MONTH OF OCTOBER Permits Issued New Construction 1919—1918 Akron.. . ; ...................... 565 Cincinnati...................... 218 Cleveland........................ 324 Columbus....................... 263 D ayton............................ 223 E rie................................. 111 Lexington....................... 19 Pittsburgh...................... 363 Springfield...................... 42 T oledo........................ 267 Wheeling........................ 32 Youngstown............... 169 TO TA L.......... 2596 53 52 31 71 81 57 10 62 4 24 7 51 Alteration* 1919—1918 118 502 834 102 44 38 30 89 15 123 23 31 Valuations Now Construction 1918 New Construction 1918 50 $3,184,277 $ 60,140 299 657,610 52,725 517 5,223,400 721,200 81 619,090 160,175 19 934,637 252,452 32 237,325 139,720 27 85,000 5,870 46 1,399,089 240,736 5 138,675 750 67 856,062 55,072 28 59,511 2,645 34 475,175 136,425 Alterations 1918 Alterations 1918 increase or Decrease of total valuatlone 1919 over 1918 $49,640 $98,070 $3,075,707 289,060 279,050 614,895 457,785 186,880 4,773,105 127,155 56,680 529,390 97,110 16,519 762,776 23,020 47,675 122,260 18,000 4,300 92,830 176,597 76,648 1,258,302 59,400 6,800 190,525 26,953 92,956 866,993 4,199 4,793 56,272 36,950 19,465 356,235 503 1949 1205 13,869,851 1,827,910 1,456,527 799,178 12,699,290 Per Cent of Increase or Dscrease 1946. 2 185 4 525 6 244 9 284 3 75 3 920 396 8 2714 2 1056 756 5 229 .6 483 .4 8 THE M O N T H L Y BUS I NES S REVI EW. Reports Show Outbound Tonnage Falling Off as Compared With Last Year W h e n comparison is made with the transportation figures reported in the last issue a very considerable increase is to be noted in the nu m b er of cars and tons received, but on the o th er hand a large d ecrease is shown in the num ber of cars and tons forwarded. W hile statistics showing receipts and shipm ents are not yet available, it is the opinion that th e se large changes in the figures are the result of the existent strikes. It will, doubtless, be found th at a considerable p a rt of the reduction in outbound movement is chargeable to the reduction in ste e l pro duction, and th at the increase in receipts was caused by abnorm al m ovem ents of coal made on th e eve of the coal strike. As yet, th ere has been no serious interference with transportation on account of the coal strike, but it is quite impossible to make any prediction as to w hat the next few w eeks will bring forth. The figures on tra nsportation reported for the m onth of October, 1919, com pared w ith th o se o f October, 1918, are as follows: Inbound Outbound 1918 Total 47,702 29,393 Gars 77,095 1.086,522 1,676,779 Tons* 2,763,301 1919 Gars Tons 46,383 1,672,191 23,071 680,293 69,454 2,352,484 BANKS E N TER IN G T H E FEDERAL RESERVE SY STEM . The following banks have been admitted to m em bership in this District since we la s t r e p o r t e d : R esources R ittm an Savings Bank.................. .....................................Rittman, Ohio ................................................ $ 367,000 W a k em a n Bank Go...............................................................W akem an, O h i o ............................................. 304,000 Apple Greek Banking Go..................................................... Apple Greek, Ohio ........................................ 368,000 Union Savings & T ru s t Co............................................... W arren, O h i o .................................................... 4,550,000 Security Bank .......................... -..........................................Portsm outh, Ohio .......................................... 2,315,000 P earl S treet Savings & T ru s t Co......................................Cleveland, Ohio ............................................. 14,127,000 Orrville Savings Bank ........................................................Orrville, Ohio ................................................ 868,000 Marshall County B a n k ........................................................Moundsville, W . Va....................................... 1,225,000 Farm ers State B a n k ............................................................ Eldorado, O h i o ............................................... 449,000 NEW NATIONAL BANK Authorized Capital Citizens National Bank .................................................... Hooversville, P a ...................................................... $25,000 MERGERS Market National Bank, Cincinnati, Ohio, merged with Fifth-T hird National Bank. Merchants National Bank, Middletown, Ohio, merged with First National Bank, form ing th e F irst & Merchants National Bank, Middletown, Ohio. 9 THE M O N T H L Y BU SI NE SS R EVI EW. CLEARINGS October 16 to November 15 1918 1919 Akron........................................... Cincinnati................................... Cleveland.................................... Columbus............................... Dayton.................................... Erie.......................................... Greensburg................................................. Lexington................................... Pittsburgh................................... Springfield....................................... Toledo................................... Wheeling....................................... Youngstown................................... Increase or Decrease Percent of Increase or Decrease $48,854,000 289,284,983 539,982,139 65,747,800 19,237,630 10,689,836 6,572,988 6,504,685 713,621,463 7,743,654 65,883,000 25,546,287 20,641,980 $29,846,000 265,664,696 411,243,308 51,626,200 19,027,180 9,669,597 4,481,231 4,692,286 631,178,770 4,846,632 46,540,458 16,782,659 15,904,909 $19,008,000 23,620,287 128,738,831 14,121,600 210,450 1,020,239 2,091,757 1,812,399 82,442,693 2,897,022 19,342,542 8,763,628 4,737,071 63.6 TOTAL........................ 1,820,310,445 1,511,503,926 308,806,519 20.4 8 .8 31.3 27.3 1 .1 10.5 46.6 38.6 13 59.7 41.5 52.5 29.7 TOTAL DEBITS BY BANKS TO INDIVIDUAL ACCOUNTS Week Ending Akron........................................................... Cincinnati................................. Cleveland.................................. Columbus................................................. D ayton ........................................................ E rie.............................................................. Greensburg........................................... Lexington.................................................... Oil C ity....................................................... Pittsburgh...................................... Springfield.............................. Toledo....................................... Wheeling.................................. Youngstown.................... T O T A L ... Nov. 12, 1919 Nov. 13, 1918 $27,049,000 60,637,000 167,761,000 28,059,000 12,038,000 7,126,000 4,042,000 4,705,000 2,246,000 185,644,000 3,721,000 34,969,000 8 ,0 1 1 , 0 0 0 14,495,000 560,503,000 $11,420,000 49,758,000 120,043,000 17,945,000 8,753,000 6,390,000 2,559,000 3,539,000 2,214,000 169,434,000 2,272,000 21,071,000 7,010,000 11,622,000 434,030,000 Increase or Decrease $15,629,000 10,879,000 47,718,000 10,114,000 3,285,000 736,000 1,483,000 1,166,000 32,000 16,210,000 1,449,000 13,898,000 1 ,0 0 1 , 0 0 0 2,873,000 126,473,000 Percent of Increase or Decrease 136.8 2 1 .8 39.7 56.3 37.5 11.5 57.7 32.9 . 1.4 9.5 63.7 65.9 14.2 24.7 29.1 10 THE M O N T H L Y BUSI NESS REVI EW. STATEMENT OF FEDERAL RESERVE BANK OF CLEVELAND. N ovem b er 21, 1919. RESOURCES Gold Gold Gold Gold Gold coin and certificates............................................................................ $21,634,000 settlement fund with F. R. Board................................................... 29,952,000 with Federal Reserve Agent.............................................................. 107,012,000 redemption fund.................................................................................. 842,000 with Foreign Agencies........................................................................ 11,660,000 TOTAL GOLD R E SE R V E ....................................................... 171,100,000 Legal tender notes, silver, etc..................................................................... 878,000 TOTAL CASH R E S E R V E ........................................................ 978 000 Bills discounted—Secured by Government War Obligations.................125,938 0 0 0 Bills discounted—All other............................................................................30*194 000 Bills bought in open market....................................................................... ..67*971 ’000 Total bills on hand....................................................................... U. S. Government Bonds .......................................................................... U. S. Government Victory Notes.............................................................. U. S. Government certificates of in d eb te d n ess..................................... 224,103,000 334 q q q 10 000 26,018^000 TOTAL E A RN IN G ASSETS................................................... 250,965,000 Uncollected items and other deductions from gross deposits............... 5% Redemption fund against F. R. bank notes..................................... All other resources........................................................................................ qoo 1 155 000 74 314 l[o7o’o(X) TOTAL RESOURCES................................................................ 499,482 000 LIABILITIES. Capital paid i n ............................................................................................... Surplus fund................................................................................................... 9,468,000 5,860,000 15,328,000 Government deposits.................................................................................. 5,163,000 Due to members—Reserve accounts....................................................... 134,426 000 Deferred availability items.......................................................................... 68|644|000 ’ 7 4 I0 0 0 Other deposits...................... ......................................................................... Foreign Government Credits.................................................................... 5,928,000 TOTAL GROSS DEPOSITS..................................................... Federal Reserve notes in actual circulation... .................................... Federal Reserve bank notes in circulation net liability............... All other liabilities........................................................................................ TOTAL L IA B IL IT IE S............................................................... 214,235,000 484,000 ? l'5 0 c»,ftftfi 2|930|000 245 499,482,000 PICKUPS ON BUSINESS TOPICS the dem ands of coal m iners w ould m ean a t GRANTING the minimum an increase in th e cost of bitum inous coal of $2 a ton, w hich on th e 500,000,000 tons a n n u al p ro duction would ta x A m erican consum ers $1,000,000,000 a n n u a l ly, or $10 for every person in the U n ited S tate s, according to figures compiled by th e U n ited S ta te Geological S urvey. Railroads and in d u stry w ould have to b ear most of th e increased cost, th e increase to each bein g respectively, $300,000,000 and $3’52,731,000. D om estic consum ers would be taxed $114,208,000. The an n u al b urden to in d u stry w ould be $60,440,000 for P enn sy lv an ia, $46,122,000 fo r Illinois, $46,689,000 fo r Ohio and $25,539,000 fo r New Y ork. A large bonded w arehouse is ab o u t to be b u ilt a t Colon, Panama, in which space m ay be re n te d by an y m a n u fa ctu re rs or exporters who may wish to have stocks of goods in sto rag e here to supply th eir custom ers in C entral an d S outh A m eri can countries. I t is understood th a t th e P a n a m a n ia n gov ernment will receive a revenue of ab o u t two per cen t on th e value of goods tak en from th is w arehouse fo r ex p o rt to oth er countries. As this enterp rise has the su p p o rt of a stro n g company with ample capital, it prom ises to ren d er g re a t se r vice to American trade. Official call has been issued by th e N atio n a l R ivers and Harbors Congress fo r its fiftee n th congress convention, to be held in W ashington, Dec. 9, 10 and 11. G overnors, m ayors and the presidents of comm ercial, in d u strial, a g ric u ltu ra l and w aterway organizations are au th o rized to appo in t delegates to the convention. The chief business o f th e m eeting w ill be to decide upon specific provisions an d exact language o f legislation needs to p ro tect and develop w a te r tra n s p o rta tion and to secure co-operation betw een railw ay s an d w a te r w ays. A steady and m arked increase in th e sale of W ar S av in gs Stamps and C ertificates throu g h o u t th e en tire country has been shown by reports from the tw elve F ed eral R eserve D istricts to the T reasury D epartm ent. A ccording to figures m ade public by the S avings D ivision o f th e T reasu ry , th e receipts from sales for O ctober ag g reg ate $7,316,467.60. T his is over $1,200,000 in excess of th e receip ts from th is source for September and is g rea ter th a n th e receip ts fo r any m onth since April. The increase in sales fo r O ctober has been a tte n d e d by an equally m arked decrease in redem ptions. Officials of th e S avin gs Division declared th a t they h ad every reason to b elieve that the increase in sales and th e decrease in redem p tion s w ill continue. I t has been proved, th ey said, th a t the securities now being sold are going into the hands of p u r chasers w ith whom th r if t and savings have become a wellestablished h a b it, and who ap p reciate th e value of th e Government securities as an in v estm en t. A complete in vento ry of helium gas resources of the U nited S tates w ill be made by the jo in t arm y and n av y board, created by the S ecretaries of W ar an d N avy, who realize th a t th is non-inflam mable gas in airsh ip s is an asset w hose value can hardly be ex aggerated. The present, helium laboratory a t F o rt W orth, Texas, will be enlarg ed to te st sam ples of gas sent for analysis by oil an d n a tu ra l gas p ro duction companies of the cou n try whose co-operation w ill be secured. Many of our m an u factu rers are finding them selves con fronted w ith the new problem of dealing in foreign m ark ets, and are sometimes at a loss as to th e proper m ethods of obtaining correct credit in form ation concerning th e ir fo r eign customers. The U nited S ta te s B ureau of F oreign and Dom estic Commerce, a t W ashington, calls a tte n tio n to th e fa c t that its organization is in a position to aid such m an u facturers in o btaining th e in fo rm atio n they desire. There is an unprecedented dem and fo r gold fo r domestic, commercial and m an u factu rin g purposes. Sales of th e m etal to the trade in O ctober broke all records. The huge p u r chases during the past few m onths is a ttrib u te d to the desire o f the trade to place upon the m ark et sufficient jew elry for th e b ig holiday business. Jew elers are looking forward to record sales this year. A F oreign F in an ce C orporation, c ap italized a t $10,000,000, has been organized by a group of b a n k e rs re p resen tin g some of th e stro n g est financial in te re sts in N ew Y ork. The p ri m ary purpose of th is concern, i t is announced, w ill be to in v e st fu n d s in en terp rises a n d secu rities w hich prom ise sa fe ty an d sa tisfa c to ry re tu rn . The h ea d q u arte rs w ill be a t J . P. M organ & Co. C ap ital stock w ill be in shares of $100 p a r value, an d all th e stock to be p aid up a t th is tim e has alread y been subscribed. The C orporation m ay also engage in in v estm en ts in th is country. I t contem plates a t p resen t no issue of debentures, b u t such a procedure m ay be ad o p ted la ter, if th e co rporation desires to ex ten d its o perations w ith borrow ed money. A p ro ject is u n d er w ay fo r m ak in g C leveland a term in al port fo r ocean shipping. T his w ould depend upon th e im provem ent in canals along th e S t. L aw rence, w hich is under consideration b y U n ite d S ta te s a n d C anadian governm ent officials. The benefits to th is d is tric t w hich w ould be derived from such a p ro ject are m any an d g re a t, especially if in creased tra n sp o rta tio n fac ilitie s betw een th e G reat L ak es a n d the valley of th e Ohio are m ade. The New Y ork Sun says th a t th e b u ild in g needs of the U n ited S ta te s include 1,000,000 homes, 128,000 facto ries, cost in g $100,000 or over; 325,000 fa c to rie s costing less th a n $100,000 each, 6,000 hotels, 5,000 schools a n d public in stitu tio n s, 50,000 ap a rtm e n ts, 120 m ajo r fre ig h t term in als, 14,000 ra il road sta tio n s an d fre ig h t sheds, an d 20,000 th e a te rs and churches. iimiimntimmmimiMititmm R ules a n d re g u latio n s g o verning th e use of fu el oils in New Y ork C ity are to become effective D ecem ber 1. In the opinion of a pro m in en t re a l e sta te a u th o rity m any b uilding o perations have been postponed u n til oil can be used as fuel. M any h otels now p lan to use oil in lieu of coal. IIUIIIMIIIIIIIIII..... IIIIIIIIIIHII1 The Illinois fa rm e rs rep re se n te d b y th e E x ecu tiv e B oard of th e Illin o is A g ric u ltu ra l A ssociation w en t on record as opposed to strik e s a n d sh o rte r hours th a t reduce p roduction an d increase th e cost of living, an d recom m ended a basic 10 ho u r day fo r all p ro d u ctiv e industries. The London Tim es fo r O ctober 6 re p o rted th a t th e A irco express airp lan es, w hich fly daily betw een London a n d P aris, have com pleted the six th w eek of continuous operation, h av in g accom plished 83 out of a to ta l schedule of 86 flights w ith o u t a stoppage or b reakdow n. P re sid e n t L eguia, o f P eru , in his in a u g u ra l address, s ta te d th a t his governm ent w as n eg o tia tin g w ith pow erful A m erican in te re sts fo r in sta lla tio n of w ater supply, d rainage an d p av in g system s fo r 24 of th e larg e st cities an d tow ns o f th e republic. iiiHimiimimiHiMimiiimiiiiii Raw m a te ria ls v alued a t $1,500,000, consisting larg ely of fu rs and hides, have arriv e d in th is co u n try from S iberia, w hile $10,000,000 w o rth of goods sto red a t V ladivostok are a w a itin g shipm ent to th e U n ited S ta te s an d G reat B ritain . D em anding 40% w age increase of from $15 to $25 w eek ly, an d eig h t hour d ay in stead of th e lO 1^ hour day, 15 clerks w en t on strik e a t th e M unicipal B ank, B rooklyn. Officers sta te th a t th e s tr ik e r s ’ places have all been filled. A London rep o rt sta te s th a t a big airsh ip com pany has been organized w hich plans to ru n services to various points all over th e world. The L ondon-P aris service is in successful o p eratio n and carrie s express parcels. The S enate recen tly passed th e house b ill in creasing the am ount n a tio n a l b an k s can .loan on bills of lad in g and sight d ra fts from 10 to 25 p er cent, of th e ir c a p ita l an d surplus. The m easure now goes to conference. The parcel post is earn in g a profit of $10,000,000 annually, and ra te s have been co n stan tly reduced since th e beginning o f th e service, seven y e ars ago.
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