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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 9 Cleveland, Ohio, December 1, 1927 The general trend of business continued to be un mistakably downward in October, reaching the lowest point of the past two years. The Federal Reserve Board's index of industrial production dropped from 105 in Septem ber to 103 in October, and this bank's index of distri bution also declined almost without interruption from 101.0 for the week ending October 1st to 98.8 for the week ending the 29th. A confirmation of the drop in these two indexes is found in the Annalist’s index of general business activity, which fell from 100.9 in September to 96.0 (preliminary) in October. The distribution index slumped further in the first half of November, falling from 98.8 for the week ending October 29 to 96.0 the following week and to 94.3 for the week ending Novem ber 12. Some signs of improvement in the situation have re cently been discernible, in spite of the comparatively low ebb of business. For one thing, agricultural prices have risen noticeably in the past few months, and are now higher than the general wholesale price level (in relation to 1913). In other words, the present position of the farmer is better than in some time past. Again, demand has finally strengthened in the iron and steel industry, Solid line— Weekly index of ear loadings, P. R. B. of Cleveland (1923-1925 — 100). Latest figure t Week ending November 12-— 94*3. Broken line— Monthly index of indus trial production. F. IL Board, 1923-1925 1M). Lateet figure October, 103. Both curves adjusted for seasonal variation. No. 12 which has suffered more than most lines during the busi ness recession. Tire and motor accessory manufacturers are beginning to receive orders for the new Ford car, and general employment as measured by payrolls has shown a slight gain. The feeling of business men, at least in the Fourth District, appears to be somewhat more optimistic than a month ago, and meanwhile the supply of credit remains cheap and plentiful. Agricultural Prices One of the most encouraging developments in a year marked on the whole by a decline in general business has been the rise in agricultural prices during 1927. The chart below, constructed by the Federal Reserve Board, gives the wholesale price trend from 1923 to date of agricultural, non-agricultural, and all commodities. A study of this graph shows that throughout most of the period from 1923 to 1926, agricultural prices lagged behind those of all commodities, sometimes to a very noticeable extent (as in 1923, the first part of 1924, and the end of 1926). Early in 1927, however, the index of agricultural prices practically caught up with that of all commodity prices, and in August the agricultural index went ahead, standing at 148.1 in that month as against Indexes of U. S. Bureau of Labor Statistics (1913 — 100). Latest figures, October: all commodities— 150.1; agricultural, 154.7; nonagricultural, 144.9. 2 THE MONTHLY BUSINESS REVIEW 146.6 for all commodities. In September the advance in agricultural prices was even more marked, and a further rise took place in October; whereas in these two months all commodities advanced to a lesser extent, owing to the inability of non-agricultural products to get above their previous level. Since January of this year, the agricultural price index has risen from 143.4 to 154.7, while the non-agricultural index has declined from 149.6 to 144.9. Although not all farm and livestock products are enjoying higher prices than a year ago, the general trend has been plainly up ward, while the trend of manufactured and other prod ucts has been slightly downward. Financial The money market is still “easy” , rates being unchanged from a month ago both in this District and in the New York market. In the latter, commercial paper remained at 4 per cent during October and the first half of Novem ber, and acceptances have been quoted at 3x/4 per cent since the middle of October. Call money dropped from 4 to 3 V2 per cent on October 20, and has been at the latter figure ever since with the exception of four days. Bills discounted by the Cleveland Federal Reserve bank have ranged around $50,000,000 in November, standing at that figure on the 16th. This is about the same as a month ago, but $25,000,000 less than in 1926, and $32,000,000 less than in 1925. This falling-off in the demand by member banks for accommodation as compared with previous years reflects the import of gold into the coun try early this year and the recent recession in business. Loans secured by stocks and bonds made by reporting members in the Fourth District have been gradually declining for some months and on November 16 stood at $583,289,000, as compared with the high point for 1927 to date of $624,215,000 on June 8. The present figure, however, is nearly $28,000,000 more than a year ago. ‘‘All other” loans, largely commercial (excluding Govern ment-secured loans), have also dropped with the decline in business, and on November 16 were $772,035,000, as com pared with the high point in 1927 of $811,981,000 on April 6 and with $791,509,000 a year ago. The decline in loans has been taken up by an increase in the invest ment holdings of the banks, these having reached, on November 16, their high point for 1927 of $720,392,000 as compared with $641,000,000 a year ago. Savings deposits of 68 leading banks in this District w ere $972,423,000 on October 31, a gain of 6.4 per cent for the year and of 0.8 for the month. Commercial failures in this District numbered 175 in October, 149 in September, and 167 a year ago, according to R. G. Dun and Company. Liabilities were unusually large in October, amounting to $7,009,505 as against $2,572,720 last year. There were 1,787 failures fn the United States in October, 1927, and 1,763 in October, 1926. Debits to individual accounts at 13 leading centers in the Fourth District aggregated $2,647,308,000 in October, $2,521,242,000 in September, and $2,637,978,000 a year ago. The following table gives the main changes in the balance sheets of the Federal Reserve and reporting member banks: N ov. Gold Reserves .............. . Discounts .............. .......... ........ A cceptances ............................. U. S. Securities .................... T otal bills and securities Federal Reserve notes in circulation ........................... T otal deposits ...................... Federal Reserve F ederal Bank o f Cleveland R eserve S ystem „ J InB *imonsJ (In M illio n s) 16, N ov. 17, Oct. 19, N ov. 16, N ov. 17, O c t. IS 1927 1926 1927 1927 1926 1927* 289 258 286 2,889 2.851 % 9Tfl 50 76 43 867 567 4 lS 18 32 19 334 348 £5 75 86 57 705 308 £5 142 144 119 1,407 1 226 1 Sftl * 209 204 210 1,706 1,750 1 717 215 198 189 2,566 2,801 £429 R E PO R T IN G M EM BER BANKS Fourth D istrict U nited State* (In M illions) ( i n M illions* Nov. 16, N ov. 17, O ct. 19, N ov. 16, N ov. 17 O rt. 1ft 1927 1926 1927 1927 1926 1927 Loans secured by stocks and bonds ........................ 583 A ll other ................................ 789 T otal loans ............................. 1.372 Investm ents ........................... 720 Demand deposits .................... 1,053 T im e deposits ........................ 894 566 813 1,869 641 1.087 819 600 817 1,417 706 1,041 918 6,230 6,828 6J06 8.900 8.961 8 SRI 16.130 14,289 IS O M 6.293 6 648 «08» 18.768 12 969 18 « # 6,424 5^772 lis ts Iron and Generalizations fail in a steel market as spotty as the present one. Track mate rial and steel pipe orders have been so heavy that they have overcome the drag in heavy finished products and such lighter products as sheet and strip, and in the aggregate new business has shown ex pansion. These tonnage orders, however, have been largely for 1928 delivery, and producers meanwhile have been pressed to maintain an average operating rate of 65 per cent. Because they have not participated in track material and pipe orders to the same extent as in the Chicago and Pittsburgh districts, producers in the Mahoning valley and the Cleveland districts have not held up to the national average. Steel The same spotty condition obtains in prices. Although steel bars, plates and shapes have been advanced to $1 8Q at Pittsburgh, large users covered for the remainder o f the year at the old price of $1.75. Sheet, strip, tin plate and cold finished steel prices continue highly irregular. After many weeks of extremely inactive demand, the market in pig iron has revived. Carryover iron from the third quarter has been exhausted and consumers are considering their needs for the remainder o f this quarter and into the first quarter of 1928. The revival in demand has been more marked at Cleveland than at Pittsburgh during the first part of November. Basic iron has been holding at $17.00, Valley furnace, and No. 2 foundry and malleable at $17.50. For delivery in Cleveland, pro ducers asked $18.00 furnace. Coke prices have been tending toward easiness. Stand ard beehive furnace coke is sold down to $2.75 for scat! tered carloads while standard beehive foundry, not hand drawn, has been put out at $3.50 with few takers Most foundry coke makers are asking $4.50 to $4.75. Produc tion has been curtailed, but apparently not so much as consumption. Slack automotive buying is largely responsible for the inactivity at northern Ohio sheet and strip mills. A leading manufacturer of small cars is placing moderate sized orders quietly but not as yet in the volume expected. With the determination of the 1928 tin plate price, which is expected to be slightly lower than the 1927 level Mahoning valley tin mills look for heavier schedules. ’ Pig iron production in November continued the slide THE MONTHLY BUSINESS REVIEW which set in last May. The November daily rate of 88,619 gross tons compared with 90,710 in October and 107,933 tons last November. The November total is estimated at 2,658,569 tons, as against the October total of 2,812,015 tons. For the eleven months of 1927, pig iron pro duction stands at 33,587,610 tons or not quite 7 per cent under the 36,011,766 tons of the opening eleven months of 1926. Furnaces in blast at the close of Novem ber totaled 173 or 47.9 per cent of the total number serviceable. This was the lowest percentage since June, 1925. The loss of active stacks from the end of October was one. Steel ingot production in October recovered slightly, having a daily average of 126,500 tons compared with 124,312 tons in September and 142,042 tons last October. The October total of all producers was 3,289,013 tons compared with 3,232,108 tons in September and 4,074,544 tons last October. The ten month total for 1927 stands at 36,788,807 tons against 39,763,695 tons in the same period last year. The downward trend in the Iron Trade Review com posite of 14 leading iron and steel products continued in November, the month averaging $35.44 compared with $35.67 in October and $38.43 last November. Coal This industry is still beset with diffi culties. Industrial demand for soft coal has fallen off sharply in recent months, owing both to the decline in general business and to very heavy stocks on hand, and householders’ demand has also lagged this Fall on account of the warm weather. As a result, prices have sagged lower and lower in spite of a recent drop in output, the Coal Age weighted average standing at $1,90 on November 17, as compared with $2.02 on October 7th. The present price is at about the level that prevailed during the dull midsummer season of the last three years, the Winter advance of other years having failed to materialize in 1927. An advance did occur in September, but the settlement of the strike in Illinois and other states sent prices down again. The production curve for bituminous coal from October 15 to November 12 was irregular, with the general tendency downward, in contrast to the usual seasonal rise. This is doubtless in response to the sluggishness of demand, already explained. Stocks of soft coal in the hands of commercial consumers on October 1 totaled 61,900,000 tons, according to the Bureau of Mines. Al though somewhat lower than at the beginning of the strike last April, this figure is exceedingly high as com pared with the general level of former years, and further more stock piles have diminished but little in the past few months. Operators and dealers in the Fourth District have the same conditions with which to contend—low prices, heavy stocks, and lack of demand arising from industrial slack ness and unseasonably warm weather— and in addition those in the Southeastern Ohio union fields are affected by the depression in that section. The general feeling, however, seems to have improved with the coming of severe weather in the third week of November, which naturally had the effect of increasing domestic orders. Rubber and T*res Operations in this line in the Fourth District continue fairly satisfactory. Prices on high-grade tires were re duced 5 per cent on November 1 by leading manufac turers, but secondary tire lines were not affected, nor were tubes. Following the announcement of these price reductions, the spring dating campaigns got under way, and early orders received from dealers are reported to be in good volume. Warm weather in October and early November kept more cars on the road than in other years, and this served to reduce dealers' stocks and stimulate buying from that quarter. Sales of tires as original equipment are still low, but at least one large order from Ford has already been received. The demand for both rubber footwear and mechanical rubber goods remains strong, although keen price competition in the latter department is being experienced. With the opening of the sixth year of the Stevenson Restriction Act on November 1, the action of the British Government was awaited with much interest. The an nouncement of the Colonial office on October 20, how ever, stated that no changes would be made in the Act for another quarter, the right being reserved to make any changes found desirable on February 1, 1928. The amount of exportable rubber from British-owned planta tions thus remains at 60 per cent of standard production for the time being. It is of interest to note that in spite of two suc cessive reductions in the amount of exportable rubber allowed, bringing the percentage down from 80 per cent of production a year ago to 60 per cent in May and the succeeding months of 1927, the price of crude rubber exhibited a declining tendency from March to October of this year. Although a rise of about four cents a pound took place during October and November, the present price of 37^ cents is still three cents or m*re below that of a year ago. The failure of crude rubber prices to hold up may be traced to the growth of world rubber stocks on hand even in the face of heavy consumption; and this again is largely accounted for by the increasing production of Dutch plantations, the greater use of reclaimed rubber in this country, and the practice of British growers of shipping rubber dur ing one quarter which was left over from their quotas of previous quarters. In addition some rubber has been smuggled out from British-owned plantations. Automobiles The situation in the automobile trade is much the same as a month ago— light sales and low production, with the industry still awaiting the new Ford. Production in October amounted to only 221,292 cars and trucks, a decline of 108,000 from October, 1926. Sales were like wise reported to be slack, both in the country and in the Fourth District. In Cleveland and other cities of Cuyahoga County, for example, sales of new cars in October were 27 per cent less than a year ago, and those of used cars were 6 per cent less. Passenger car registrations in the United States for the third q u a r t e r of 1327 were 25 per cent under the same period last year. The spotty condition of the industry is brought out by third quarter earnings so far published. Outside of 4 THE MONTHLY BUSINESS REVIEW General Motors, only three motor concerns out of eleven were able to show larger net profits than in the third quarter of 1926, the group as a whole showing a loss of about 7 per cent. Clothing Business remained comparatively dull in October and early November in most lines of manufacture in this District, there being little, if any, evidence of an upturn during this period. In some cases business has compared favor* ably with last year, but this has not been true as a rule. Numerous manufacturers are somewhat more opti mistic than a month ago, but are still pursuing a “ wait ing” policy, with operations at a low point. Those lines which normally expand at this time of the year have been held back by unseasonably warm weather. An improvement in the demand for woolens and worsteds has taken place lately. Orders have been re ceived in good volume, the demand for men's wear being fully equal to last year and that for women's wear even better. Re-orders have been heavier during the last several weeks in the men's clothing trade, due principally to the cold weather. The same is true of men's underwear. Advance bookings for the Spring are also larger in the latter trade than last year, but this is the result of transactions made several months ago when cotton prices were advancing. The knit goods line is not doing as well as a year ago. The electrical supply trade is spotty, one important maker reporting a downtrend, while another has e x perienced an improved demand lately. Glass production has been running considerably under that of 1926; lack of automobile demand and greater competition from im ported glass still constitute the main unfavorable factors. Various lines of machinery manufacturing are running behind a year ago. The automobile parts trades are awaiting a revival in the motor industry. The volume of business in box-board factories is about the same as last year, but is hardly up to earlier expectations. Prices, however, are higher than a year ago. The watch and jewelry trade is doing well, one concern reporting a seven per cent gain in business over the first ten months of 1926. Makers of white lead report sales ahead of last year at this time. The backward Fall slowed up most lines of clothing manufacturing in this District during October, but the arrival of cold weather around the middle of November stimulated orders from retailers and wholesalers. The resulting increase in business in most cases made up for the general slackness in October. Business on the whole is now about equal to that of a year ago. Sales of 15 wholesale dry goods houses in the Fourth District in October were 15.4 per cent less than in 1926; and were 8.1 per cent less for the first ten months of this year. As compared with September, there was a loss of 6.5 per cent. Other Manufacturing The November 1st estimate of the Department of Agriculture places Ken tucky's 1927 tobacco crop at 228,442,Most lines of clothing showed a loss in retail sales in 000 pounds. This is one per cent greater than the October, according to figures from 50 department and, October 1 estimate, but is 36 per cent less than in 1926 apparel firms in this District. Men's clothing decreased and 45 per cent less than the 1922-1926 average. The 10.0 per cent from a year ago; men's furnishings, 1.5 estimate for burley in Kentucky is 142,523,000 pounds per cent; boy's wear, 12.6; women's coats, 6.0; furs, 24.1; this year as compared with 213,800,000 last year, a de girls' wear, 7.9; women's dresses, 2.1; knit underwear, 11.7; crease of 33 per cent. In the United States, the total and muslin and silk underwear, 3.3 per cent. On the 1927 crop is put at 1,190,357,000 pounds, a decrease o f other hand, the following clothing departments showed 8.5 per cent from 1926 and of 11.1 per cent from the gains: misses' ready-to-wear, 4.2; hosiery, 12.4; and five-year average. aprons and house dresses, 6.0 per cent. Many types of tobacco in the country underwent con Shoes The shoe trade in the Fourth District siderable declines in acreage and production in 1927, was rather slack during the past while consumption increased. This was particularly true month, according to manufacturers' re of burley, where small acreage and a still smaller crop, ports. Part of this falling-off is seasonal and part is coupled with a gain in consumption, have brought supply doubtless explained by the extremely warm weather and demand much nearer each other than was the case in 1926, when prices received for the crop were very low. which prevailed during October and early November. Preliminary production figures for the District show a Consumption of burley for the year endmg October 1 decrease in October of 4.1 per cent from September, which is estimated at 315,455,000 pounds, or 50 per cent greater than 1927 production. This means, of course, that the in turn was about 13 per cent under the August figure. large surplus stocks of the past few years have been Stocks on hand of reporting wholesale and retail firms greatly reduced, and that the outlook for the burley are two and four per cent larger respectively than at the selling season which will commence soon is therefore end of October a year ago. Wholesale shoe sales have materially better than a year ago. fallen off considerably, being 19.7 per cent less in October than a year ago and 9.8 per cent less than in September of this year. This is more than a seasonal decrease. Sales for this year to date are 6.2 per cent less than for the first ten months of 1926. Shoe sales in October in some 50 department stores of the District showed a drop of 6.3 per cent from October, 1926. Most of this loss occurred in women's shoes, the loss in men's shoe sales being only 1.5 per cent. Tobacco The Burley Tobacco Growers' Association has decided to sell its 1927 tobacco at auction, and unless 75 per cent of the 1926 production had signed up for membership by the middle of November, tobacco of non-members as well as members will be accepted, the grower to be paid in full on the day ©f sale. The Department of Agriculture’s esimates of tobaoco production and consumption by types are as follows: 6 THE MONTHLY BUSINESS REVIEW 1. A IR C URED Burley (m ostly K y., also ............ T en n ., Ind., O hio) Green R iver (K y .) —------------One Sucker (m ostly K y.) ____ V a . sun-cured (ch ew in g tob.) M<L and E ast Ohio exp ort ........ 2. F L U B C URED B righ t (m ostly N. C., also Gar., S. C.* and V a .) ........................ a. F IR E CURED C larksville and H opkinsville, Paducah, etc (K y ., T enn ., V a .) 4. C IG A R TYPES ........................ Other ---------------------------------- ---- Consum ption (Y ea r ending P rodu ction P roduction O ctober 1) 1927 1926 (In thousands o f pounds) 816,455 48,261 39,010 5,500 202,942 26,532 13,642 6.270 26,405 300,699 89,997 30,754 654,116* 655,379 565,221 163,916 200,586 122,325 136,462 600 181,000 145,000 3,540 ? 6,000 29,000 1,850,000** 1,190,867 1,801,211 T O T A L U . S. ........................ *Y ear ending July. * "Includ ing estim ated p roduction o f Md. and E . O hio exp ort . Building The Dodge record of building contracts awarded in 37 eastern states registered a gain in October, contracts amounting to $562,815,800 as compared with $515,726,600 a year ago, an increase of 9 per cent. The former figure was the highest yet recorded for October. The largest part of the gain over last year occurred in the public utility and engineering fields. Residential building, in fact, was not up to last year. Bradstreet’s record of building permits, which excludes road building, etc., shows a loss of 32.5 per cent from October, 1926, for 169 cities in the country. Contracts awarded in the Fourth District in October aggregated $51,273,000, a decrease of 7 per cent from a year ago. Building permits in 27 cities totaled $19,566,025, a decline of 16.6 per cent from last year. For October, the largest increases were in Ashtabula, Bar berton, East Cleveland, Garfield Heights, and Lexington, while the largest losses were in Canton, Cleveland Heights, Lakewood, Parma, Covington, Dayton, Lima, Pittsburgh, and Wheeling. Permits for the first ten months of 1927 for these cities were $214,898,028, a decline of 6.1 per cent from 1926. The greatest gains for the ten months were in Akron, Rocky River, Lexing ton, Newark, and Wheeling, while the heaviest decreases were in Canton, Ashtabula, Cleveland, Cleveland Heights, Covington, and Lima. The Aberthaw index of industrial building costs stood at 191 on November 1, the same as October but three per cent lower than a year ago. B U IL D IN G O P E R A T IO N S (V aluation o f p erm its) J an .-O ct. J an .-O ct. O ctober, % ch an ge 1926 1927 1927 from 1926 13,326,862 17,752,122 A kron ............ 1,347,113 + 25,2 914,661 494,125 87,110 Ashtabula + 1 2 8 .4 971,941 879,271 B arberton 79,583 + 89.7 4,963,015 3,522,321 284,084 Canton ....... . — 27.0 28,175,948 81,015,050 + 21.8 C in cinnati __ 8,542,575 54,896,925 + 10.4 36,447,650 Cleveland ___ 3,773,125 Cleve. suburbs 6,834,277 — 62.0 4,618,882 342,245 Cleve. H ts. .. 1,168,438 225,113 1,268,124 + 1 7 5 .0 E . Cleve. .... 1,481,596 — 24.4 1,595,710 E uclid ....... 123,258 2,006,050 187,500 2,452,060 + 61.5 Garfield Hts. 8,588,848 3,301,997 263,633 — 80.8 Lakew ood .... 1,467,788 2,937,961 — 29.8 P arm a ........ 189,875 1,101,894 791,429 — 22.0 76,650 R ocky R iver 6.466,906 7,992,510 732.950 + 10.1 Shaker Ht*.~ 22,699,300 — 15.6 20,102,800 1,714,800 Columbus -----1,458,306 78,200 — 39.8 1,996,800 C ovington, K y. 7,921,350 9,545,516 553,379 — 40.5 D ayton ____ 4,387,616 4,729,071 + 24.5 E rie, Pa. -----412,805 — 16.1 1.751,651 2,257,532 82,355 H am ilton 1,566,907 119.715 + 27.5 2,118,964 L exin gton, Ky. 678,701 16,825 — 73.4 1.147,279 Lim a -------... 862,800 + 2.3 88,925 600,917 N ew ark ____ — 60.2 P ittsburgh. Psr. 8.529,164 82,104,389 87.042,879 — 18.9 150,688 1,659,108 1.803,633 Springfield .. % change fro m 1926 + 83.2 — 46.0 4- 10.5 — 29.0 4- io.l — 33.6 27.1 + 8.5 + 7.7 + 22.2 — 8.0 +100.2 + + — — + — — — + — + 39.2 28.6 11.0 26.9 20.5 7.2 22.4 85.2 40.8 65.6 13.8 27.3 T oledo ............ 899,231 W heeling W . V « . .... 154,724 Y ou ngstow n „ 696,450 T otal ..... ..19,566,025 — 26.9 14,745,585 11,678,666 — 36.6 + 17.8 2,743,993 7,528,245 1,566,072 8,288,617 — 16.6 214,898,028 + 26,8 + 75.2 — 9.2 228,923,859 6.1 Retail Trade Sales of 61 department stores in the Fourth District were 5.5 per cent less in October than in the same month of 1926. The general business inactivity accounts for some of this, as sales in nearly all departments were lower than a year ago; but the unseasonably warm weather was also an adverse factor. For example, sales of such articles as furs were not as heavy as is normally the case with the approach of winter. All reporting cities except Cincinnati and Toledo shared in the decrease from last year. For the first ten months of 1927, sales of all firms were slightly greater than a year ago. Only 14 out of 52 individual departments reported larger sales than in October of 1926. Of these, the greatest increases were in jewelry, 22.9 per cent; women's suits, 34.5; and women’s and children's hosiery, 12.4. The largest losses were in woolen dress goods, 17.3 per cent; domestics, 15.1; umbrellas, 18.3; furs, 24.1; and victrolas and records, 18.7. Changes in the main departments were as follows: ........................................................... Silks and V elvets M en's W ear ......— ................................................................ B oys' W ear ................................................................................. W om en 's Coats ........................................................................ W om en 's Dresses .......... ......................................................... M illinery .................................................................................... H osiery ~............. - ....................................................................... Shoes ......— .................................................................................. F urnitu re .............. - .......... ........................................................ Draperies, lam ps, shades ................................................... ........— ....................................................... F loor Coverings House F urnishings — ............................................................... % ch an ge fro m 1926 — 4.3 — 6.5 — 12.6 — 6.0 — 2.1 T . Z ’f — J-J — *>•* *r — l-1 Wholesale Trade With the exception of drugs, with an increase of 0.2 per cent, all reporting wholesale lines showed a loss in sales in October this year as compared with the same month of 1926. Grocery sales declined 7.3 per cent; dry goods, 15.4; hardware, 3.5; and shoes, 19.7 per cent. For the first ten months of 1927 all lines but drugs report a loss from 1926. Drug sales are 0.01 per cent greater. The decreases are: groceries, 4.8; dry goods, 8.1; hardware, 2.1; and shoes, 6.2 per cent. Sales in October compared with those in September in the case of dry goods and shoes fell off 6.5 and 9.8 per cent respectively. Sales of groceries and hardware increased 0.2 and 7.7 per cent. Drugs showed a slight loss of 0.8 per cent from September. Stocks on hand in all lines but shoes, which show an increase of 2.1 per cent, were smaller than <>n October 31, 1926. The decreases were—groceries, 3.4; dry goods, 8.6; and hardware, 6.8. Hardware is the only line showing an increaSe amount of open book accounts, and drugs the only one reporting a gain in collections over October, 1926. The decreases in collections were: dry goods, 11.4; shoes, 10.9, groceries, 6.1; and hardware, 2.9 per cent. Corporation Earnings Quarterly earnings of 100 identical industrial corporations in the United States clearly illustrate the business reaction of the past seven months. Net earnings of these firms have fallen further behind 1926 w1^ eaC 6 THE MONTHLY BUSINESS REVIEW succeeding quarter of the present year, and in the third quarter they also fell behind 1926. The table below gives the figures: N ET E A R N IN G S OF (In 100 IN D U S T R IA L thousands 1926 $ 93,299 101,046 101,194 98,760 1927 First Quarter ........$88,842 Second Quarter .... 93,639 Third Quarter .... 87,178 Fourth Quarter —........ of A. M etal-w ork m achinery (in cl. m achine tools) .................... ........ 5. P rin tin g and p u b lish in g ; book and jo b 6. B read and other bakery products ........ 7. E lectrical m achinery and supplies ........ A ll Other .................................................. T otal C O R P O R A T IO N S % change, 1925 1927-1926 $80,419 — 4.8 91,295 — 7.8 93,418 — 13.9 87,083 % change 1927-1925 + 10 .5 + 2.6 — 6.7 As to groups, most of these shared in the general de cline, particularly the oils and steels. Net earnings of the oils were 65.8 per cent under last year for the third quarter, and the steels experienced a 42 per cent decrease. However, gains for the third quarter were shown by the chemical, coal, food, shoe, store, and tobacco groups. The following table gives the net earnings by groups: 1. 2. 3. 4. 5. 6. 7. F oun dry and m achine shop products* Steel w orks and rollin g m ills ........ M otor-vehicle bodies and parts ........ M otor vehicles .............................................. E lectrical m achinery and supplies M en’s C lothing* ..................................... Car and general construction and repairs .................................................. 8. Bolts, nuts, rivets, and washers (not made in rolling m ills) ........................ 9. Stoves ............................................................ 10.Bread and other bakery products....... 11.M etal-w otking m achinery (in cl. m achine to o ls )................................. 12.Forgings (not m ade in steel works or rolling’ m ills) .......................... .............. A ll Other ........................................... .......... T otal 192 T otal ............... . 1 General Motors 1 U. S. Steel .... 174,634 64,607 21,585 209,780 56,032 31,710 — 16.8 + 15.1 — 31.9 497,016 193.757 74,050 567,890 149,318 85,484 — 12.5 + 29 .8 — 18.3 194 Grand Total *Loes. 260,726 297,522 — 12.4 764,823 802,642 — 4.7 Fourth The following table gives the most imDistrict portant industries in the leading cities Industries in this District in 1925, the latest available date. This information is from the 1925 Census of Manufactures, recently published. N um ber o f W ag e Earners (A ve. no. in 1925) Value o f P roducts, 1926 48,891 9,165 $480,880,347 85,060,975 62,546 $565,391,322 Industry AKRON 1. Rubber ; tires and tubes ------- -— ........ AB other ..................... —---- -------- ------ ----...................................... - .......................... C IN C IN N A T I 1. M en’s Clothing* .......................................... 7,667 2. F oundry and m achine shop products* 4,433 8. Boots and 9hoes .................................. ........ -4.231 ........................ ..................................... $ 46,289,778 27,236,396 14,256,284 12,760 11,254 10,710 6*933 5,004 4,618 4,242 3,563 3,078 2,849 2,817 2,716 62,308 132,852 $ 66,588,331 107,771,912 78,153.951 123,555,673 48,975,704 24,888,614 13,011,932 17,924,715 25,789,883 24,298,091 14,342,399 15.540,118 534,488,288 $1,094,779,556 COLUMBUS 1. Car and general construction and repairs ............. .................................. . 2. Foundry and m achine-shop products* 3. Boots and shoes ........................................ A ll Other ...................... - ..........- ................ T o t a l ................ ......................... - ................. (In thousands o f dollars) Third Third N ine N ine % % Quarter Quarter change Months M onths change 1926 1927 1926 1927 7 Chemicals ........ S 11,709 $ 10,012 + 16.9 $ 30,266 $ 26,529 + 14.1 2,576 -f-41.3 1,382 3,639 1,099 - f 25.8 5 Coal ................ 18,206 — 13.1 15,827 4,276 5,459 — 21.7 6 E quipm ent ..... 77,834 - f 5.6 28,134 82,191 25,426 + 10.7 16 Food ................ 37,039 84,619 + 7.0 12,349 13,509 — 8.6 12 M in in * ............ 20,141 — 7,1 62,315 74,357 — 16.2 18,704 11 M otor .............. 12 M otor 4,106 4,792 — 14.3 14,388 15,492 — 7.1 A ccessories 9,849 9,451 + 4.2 2,993 — 3.3 2,893 5 O ffice E quipm ent 91,209 — *4.7 32,175 12,376 36,187 — 65.8 20 Oil .................... 192* 2,606 1,287 240 + 486.3 4 Shoe, Leather 58,428 — 22.1 10,974 18,905 — 42.0 45.354 15 Steel ................ 16,257 + 5.0 17,075 + 10.0 6,181 5,621 6 Stores ................ 7,514 5,663 + 32 .7 2,748 2,449 + 12.2 5 T obacco (cig a rs) — 0.5 137,461 — 8.6 136,778 62.947 57,515 68 Miscellaneous.... $457,688,652 CLEVELAND C O R P O R A T IO N E A R N IN G S Total 63,715 13,114,208 17,438,897 16,547,466 10,190,677 313,471,246 dollars) Earnings of 192 industrials, including the 100 given above, also show a loss from last year, amounting to 16.8 per cent for the third quarter and 12.5 per cent for the nine months. Even after including the figures of General Motors and United States Steel, decreases of 12.4 and 4.7 per cent respectively are shown. For the third quarter, 106 of the 192 firms reported lower earnings than in 1926; and for the nine months, 98 reported lower earnings. .... ...................................................... ....... 8,171 8,115 2,020 1,718 37,360 4,495 4,054 2,796 13,245 24,590 $ 14,718,849 28,581,386 12,460,720 122,528,106 $178,289,061 DAYTON 1. Foundry and m achine-shop products.... 2. T o b a cco : cigars and cigarettes ............ 3. M otor-vehicles, bodies and parts ............ A ll Other ...... ........... ........ ........... « ............. 5,524 1,275 1,261 21,281 T otal .................................................................. 29.341 $ 37.070,813 4,139,295 6,879,287 158,014,165 $206,103,560 P IT T S B U R G H 1. 2. 3. 4. 5. Steel works and rollin g mills ....... Foundry and m achine-shop products* Bread and other bakery products .... P rin tin g and publishing ...................... .. S laughtering and meat packing ....... A11 Other - .....................................- ............ 16,316 4,611 4,303 1,583 1,503 87,198 T otal .................. ..................................- ............ 65,414 $115,706,198 29,300,686 38,852,054 9,868,961 30,046,117 300,689,756 $618,963,766 TOLEDO 1. F oundry and m achine-shop products* 2. E lectrical m achinery and supplies ....... 3. Car and general construction and repairs ................................................. A ll O ther ............. ............................... ..... T otal 3,418 2,483 $ 19,591,500 21,452,227 1,647 29,661 5,271,697 324,804,745 87,209 $371,120,169 Y O U N G ST O W N 1. Steel works and rollin g mills ........... 2. Blast furnaces — ............... .............. ........ A ll Other ..................................................... 8,953 1,434 8,828 Total ................................................................... * N ot elsew here classified. 19,215 $119,180,799 40,016,556 77,032,366 $236,179,720 T THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics (AH figures are for Fourth District unices otherwise specified) Millions of dollars Bank Debits (23 cities) Savings Deposits (end of month) Ohio (41 banks) Thousands of dollars Western Pennsylvania (27 banks) Total (68 banks) Actual Number Commercial Failures— Number Thousands of dollars “ “ — Liabilities Postal Receipts— 9 cities Sales— Life Insurance— Ohio and Pa. “ — Dept. Stores— (50 firms) ** — Wholesale Groceries — (50 firms) '* — “ Dry Goods— (15 firms) “ — “ Hardware — (16 firms) ** — “ ' Drugs — (15 firms) Building Permits, Valuation— 27 cities Building Contracts Awarded Thousands of tons Production — Pig Iron, U. S. — Steel Ingots, U. S, “ — Automobiles, U. S. Actual Number Passenger Cars Trucks “ — Bituminous Coal, 4th Dist. Thousands of tons “ “ barrels ** — Cement: Ohio, W. Va., Wn. Pa, Millions of k. w. hours M — Electric Power: Ohio, Pa., Ky. Thousands of barrels — Petroleum: Ohio, Pa., Ky. “ 44 pairs 14 — Shoes, 4th District “ " casings — Tires, U. S. Bituminous Coal Shipments (from Lake Eric ports) “ “ tons Iron Ore Receipts (at Lake Eric ports) Oct1927 3,201 Oct. 1926 3,127 % Change + 2 .4 Jan.-Oct. 1927 32,177 Jan.-Oct. 1926 29,749 710,069 262,354 972,423 175 7,010 3,211 90,201 26,552 7,436 2,936 2,313 1,894 19,566 51,273 2,784 3,289 669,937 243,949 913,886 167 2,573 3,340 90,046 28,112 8,052 3,472 2,397 1,890 23,460 55,236 3,314 4,075 + 6 .0 + 7 .5 + 6 .4 + 4 .8 + 1 7 2 .4 — 3 .9 + 0 .2 — 5 .5 — 7 .7 — 15.4 — 3 .5 + 0 .2 — 16.6 — 7 .2 — 16.0 — 19.3 692,891 256,512 949,404 1,675 45,861 30,382 984,848 226,249 66,770 28,628 20,733 18,289 214,898 616,864 30,877 36,789 652,602 238,514 891,116 1,742 34,460 29,794 933,558 225,359 70,347 31,137 21,168 18,287 228,924 549,924 32,716 39,764 + §•? + 7. S + 6 .5 — 3 .8 + 3 3 .1 + 2 .0 4* 5.5 + 0 .4 — 5.1 — 8.1 — 2.1 + 0 .01 — 6.1 + 1 2 .2 — 5 .6 — 7.5 2,694,570 378,345 185,695 14,770 9,678s 17,9433 * 38,5583 30,802 34,721 3,408,194 396,874 195,352 13,893 9,6215 16,822* — 2 0.9 — 4 .7 — 4 .9 + 6.3 185,706 35,586 17,342 1,746 1,017s 2,030s 4 3,652s 3,751 4,929 289,565 39,577 22,808 1,795 1,050* 1,924" * 4,322= 3,547 6,906 — 35.9 — 10.1 — 24.0 — 2 .7 — 3.1 + 5 .5 — 2 .9 1 — 15.5 + 5 .8 — 28.6 % Change + 8 .2 + + 6 .7 0.6 4 + 1 5 .9 3 + 7 .6 + 1 9 .4 — 10.7 35,850s 25,797 38,888 *10 months’ average ^September 3Jan.-September *Figures Confidential Index Numbers of Trade in the Fourth Federal Reserve District (A vera g e M onthly Sales fo r the F ive-Y ear Period 1919-1923 in c .= 1 0 0 ) Oct. 1923 130 117 115 111 123 100 113 103 Departm ent Stores (5 0)* .... W holesale Drugs (15)* W holesale D ry Goods (15)* ................ W holesale Shoes (5 )* W holesale A ll (1 00 )* .................... Chain Drugs ( 3 )* f ........................ •Number o f firms. fP e r individual unit operated. O ct. 1924 116 110 96 107 115 82 104 100 Oct. 1925 138 121 112 102 124 99 109 109 Oct. 1926 130 120 98 93 117 102 101 107 Oct. 1927 123 119 85 86 113 83 93 99 Debits to Individual Accounts (In thousands o f dollars) 4 weeks % 1927 1$> ending change date (D ec. N ov. 16, from 29-N ov. 1927 1926 16) A k ron ............................. 88,594 + 5.6 1,072,371 B utler, Pa. ..... .......... 11,692 + 1 8 .6 126,507 Canton ........................ 41.587 + 4.7 507,548 C incinnati .................... 358,999 4- 4.8 4,327,684 Cleveland ...................... 748,711 + 9-1 8,619,499 Columbus ..................... 142.322 + 0.5 1,775,015 C onnellsyille. P a ............. 3,972 — 35.9 53,877 D ayton .............- ....... 78,275 — 1,6 1,006,285 Erie* Pa. - ............. 31,914 — Q.7 887,099 Greeneburg, Pa. ....... 19.7B8 + 9*3 236,788 Homestead* Pa* ...... 8,927 — 12.4 48,111 L exin gton , K y. ..... 23,032 +23*4 2$2,0&7 L im a 14,704 4- 1.3 161,095 *---------------+ 1*B 65>623 M iddletow n — .............. lO/r^g &7 120,118 QI1 City, P a, 13,980 + 1 1 .6 164,426 Pittsburgh, Pa* - .......... 852,980 — 1.3 10,930,668 Springfield .................... 20,358 — 2-9 256,362 Steubenville ..»«......-.a.*... 10,041 + 3 .2 120,195 T oledo .............................. 214,912 + 1 2 .0 2,481.626 W arren .................. - ...... 12,421 — 0.7 151,168 W heeling, W . V a ............ 40,293 — 7.4 487,971 Y oungstow n .................. 58,499 — 6.4 761,788 Zanesville ....................12,651 + 7.5 137,659 T otal ...........................2,819,861 + 3.4 34,262,535 1926 to % date (D ec. change 30-Nov. from 17) 1926 1,002,533 + 7.0 119,842 + 5.6 506,624 + 0.2 3,904,536 + 1 0 .8 7,959,755 + 8*3 1,695,198 + 4.7 69,884 — 10.0 934,878 + 7.6 379,884 + 1.9 218,533 + 8.4 50431 — 4.0 245,927 + 6.6 173,957 — 7.4 W,483 + 1-7 120,510 — 0.3 150,964 + 8.9 9,992,907 + 9.4 256/509 - * 0.1 117,113 + 2.6 2,333,934 + 6.S 144,375 + 4.7 496,767 — 1.8 745,491 + 2.2 135,435 + 1.6 81,811,180 + 7.7 Retail and Wholesale Trade N o. o f reports D E P A R T M E N T STOR ES A kron .................. .............. 5 C incinnati ........................ 7 Cleveland ......................... 6 Columbus ......................... 6 Pittsburgh —..................... 7 Toledo ............ ................ 4 W heeling ........................ 5 Y ou ngstow n ................... ?> Other Cities ............... ..... 18 D istrict .. .......................... 61 W E A R IN G A P P A R E L C incinnati .................. ...... 6 Cleveland .............. ......... 4 Other Cities ............- ...... 10 D i s t r i c t ... ...............- ........ 20 F U R N IT U R E C incinnati ..... ................... 11 Cleveland .......... .......... . 8 Columbus ........................ 15 D ayton ....— .................... 5 T oledo .............. - ......*..... 6 Other Cities ......... .. 6 D istrict ............................. 51 C H AIN STORE* Drugs— D istrict ............ 3 Groceries— D istrict 7 W H O L E S A L E G R O C E RIE S A k ron ............................... ......... 3 C incinnati — .........- ................. 3 Cleveland ............. ..........4 Erie .............. - ............. ......... 4 P ittsburgh ................. - .............. 7 Toledo ......... 3 Other Cities ........... 27 D istrict ......... .......... ...... 51 W H OLESALE D R Y GOODS ............ 16 W H O L E S A L E DRU GS 15 W H OLESALE HARDW ARE — ..... 16 W H O L E S A L E SH OES 6 *$ale® p e r individual unit operated. P ercen tage Increase or Decrease Jan .-O ct, 1927 O ct. 1927 com pared w ith com pared with J an .-O ct. 1926 O ct. 1926 — 7.2 + 3.1 — 5.8 — 0.2 — 8.7 + 1.6 10.6 — — 5.5 — 1.7 — 5.5 + 4.9 -—15.3 — 5.7 — 7.0 + + 2.7 3.9 + 1.0 + 12.4 — 3.2 + 3.7 — 3.0 + 5.3 — 1.4 + 0.5 + 7.8 — 6.6 + 5.1 + 1.2 — 6-8 — 23.7 — 6.2 — 12.4 —U.l 6.8 — 13.7 — — 7.5 — 3.0 — + 1-3 + 3.5 — 11.1 — 24.1 — 5.7 + 3.4 — 6.4 — 11.7 — 6.9 — 9.2 — 7.3 — — 15.4 + 0.2 — — 3.5 — 19.7 — 2.3 + a.2 — 8.1 + 1-2 6.0 — 5.9 — 4.8 8.1 + 0.0 * — 6,2 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions (By the Federal Reserve Board) Industry and trade were less active in October than in the preceding month and were in smaller volume than a year ago. The general level of wholesale commodity prices showed a further slight advance. Minrreb \r A j j M«kt<r*e*ur«9 or PH ODUCTtO* MAXUFACT URES AKD MINERALS 1 1 Index number o f production o f m anufactures and m inerals, adjusted fo r seasonal variations (1923*1925 = 100). Latest figu res: October, m anufactures— 102; m inerals— 105. WHOLESALE PRICES Index o f U . S. Bureau o f L abor Statistics, (1926 = 100). Latest figu re: O ctober, 97.0. i 1 *£S£i*Vc ftAMK OtEDTT 1 11 “r a h / k L i ittt* Trade Trade at wholesale and retail showed less than the usual seasonal increase in October. Compared with October a year ago, wholesale trade in all leading lines, except meats and drugs, was smaller. Department store sales were approximately 3 per cent smaller than in October, 1926, while those of mail order houses and chain stores were somewhat larger. Inventories of merchandise carried by wholesale firms were smaller in all reporting lines at the end of the month than in September. Compared with a year ago, stocks were smaller in all lines except drugs! Stocks of department stores increased in October in anticipation of growth in sales that usually occurs in November and December but at the end of the month they were no larger than a year ago. Freight car loadings declined in October and the first part of November and were smaller than in the corresponding period of last year for all classes of freight except grain and grain products. Prices U^Scain?in fiS Acc*f«w t923 Production Production of manufactures declined in October, contrary to the usual seasonal tendency, while the output of minerals remained in practically the same volume as in September. In October and November, activity of iron and steel mills and of automobile plants was smaller than at any previous period of the year. There were also decreases during October in cotton consumption and in the production of building materials, crude petroleum, and boots and shoes. The output of bituminous coal and the num ber of hogs and cattle slaughtered increased by less than the usual seasonal amount. Production of flour, copper and anthracite coal showed increases in October. Building contracts awarded increased considerably owing to unusually large awards in New York and Chicago in the last week o f the month. The increases were largest in contracts for residential and com mercial buildings. Unusually favorable weather during October in agricultural states resulted in increased yield for late fall crops. The indicated production of corn, according to the November crop report of Department of Agricul ture, was placed at 2,753,000,000 bushels, an increase of 150,000,000 bushels over the estimate of the previous month and 106,000,000 bushels over the yield a year ago. Larger yields, as compared with the previous month's estimates, were also indicated for cotton, tobacco and potatoes. 1925 P L f v .. „ l*2S ......... QST m M onthly averages o f daily figures fo r 12 Federal Reserve Banks. Latest figures are averages o f first 23 days in N ovem ber. Wholesale commodity prices increased slightly in October, continuing the advance which began early in the summer, and the Bureau of Labor Statistics index for October was higher than for any previous month of this year. The advance in the average for all commodities from Sep tember to October reflected increases in the prices of livestock meats and dairy products. Prices of com, cotton, coal, metals, paint materials’ and automobile tires on the other hand declined. During the first three weeks in November, there were increases in the prices of grains cattle coiyer, hides, and rubber, and decreases in hogs, cotton, silk, coal, petroleum’ ana iron and steel. * f a n y o n e * oou jm s » ----------- ms 1826 1927 M ctithly averages o f weekly figures fo r banks in 101 leading cities. Latest figures are mver%ges fo r first three weekly report dates In N ovem ber. Bank Credit Total loans and investments of member banks in leading cities incr*u«**i by nearly $300,000,000 during the latter part of October and first h a l f ^ f November, and on November 16 were the highest ever reported. ments increased by more than $200,000,000, reflecting in large part chases of Treasury certificates issued on November 15, and l o a n ii ^ " securities increased by about $125,000,000. Loans, chiefly for comx^m^f^ and agricultural purposes, declined during the period from the s S S S i peak reached early in October. ™*»oiiai There was a continued increase in the demand for Reserve h® v credit between October 19 and November 23, arising chiefly out o f fnrth exports of gold. Discounts from member banks declined somewhat wkM* acceptances and holdings of United States government securities increasi!!? Conditions in the money market remained moderately easy in Nov*mK_. * Call loan rates remained at the level reached in the latter part o f Oct and rates on prime commercial paper and bankers* acceptances ^ p* unchanged. Were
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