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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 13 Cleveland, Ohio, December 1, 1931 There was a better feeling than a month ago in most sections o f the District regarding general conditions in early November, though actual developments in trade and industry failed to reveal any marked improvement from the low levels to which operations had declined in October. This changed sentiment was partly attributable to the decline in bank suspensions in November from the high levels of other recent months and to the upward movement o f some comm odity prices. Demand for currency also has receded. The iron and steel industry has increased operations, contrary to seasonal movements o f other years and with little support from automobile producers. Touching a low for this depression o f 27 per cent of capacity in the third week o f October, schedules were advanced to 32-33 per cent in the third week o f November. Cleveland and Y oungstow n. plants have been operating at higher-thanaverage levels. W ith automobile companies almost out of production, eight concerns being entirely closed, there has been little demand for steel from this source. New models are being introduced, however, and some material and parts buying was reported in the latter part o f Novem ber. The machine tool industry showed some pick-up in November after weeks o f very low operations, the in creased demand being attributed to the automobile industry. Tire production has been experiencing its usual sea sonal decline, though the falling-off in October, based on rubber consumption, was greater-than-seasonal. Building, both in October and the first half of November, was very much reduced from the low levels o f last year. In the first ten months, work on public projects and utilities was 43 per cent below a year ago and non-residential building in the same period was down 51 per cent. Residential building was behind 37 per cent. Employment and payroll indexes receded in October at a slightly more-than-seasonal rate and the number and size of commercial failures in the same period were much above last year. Sales o f life insurance in October in Ohio and Pennsylvania were only 9.5 per cent below the same month of 1930, while the decline in the first ten months was 17 per cent. Crop estimates were further increased in October, a result o f very favorable weather. The increase in agri cultural prices has been encouraging to farm communities. Unusually warm weather for this time o f year has re tarded operations in several lines, including sales at de partment stores, demand for coal, production o f shoes No. 12 and clothing, etc. Department store sales in October were 20.6 per cent below the corresponding month last year, sales o f wearing apparel and seasonable articles being very much reduced. Due to this lack o f demand, clothing fac tories have had few reorders, though usually at this time o f year, because o f reorders in addition to operations on goods for spring delivery, the industry is operating at peak levels. Shoe production declined much more than the usual seasonal amount in October. Demand for coal, which was low because o f the reduced level of industrial activity, was further reduced on account o f limited house hold demand. FINANCIAL Tension surrounding the banking situation, both in the Fourth District and the entire country, was considerably relieved in the past month. The number o f bank sus pensions in this District declined from 49 in October to nine in the entire month o f November, and several of the closed banks were completing plans which would enable them to reopen in the near future. As a result, demand for accommodation at the Reserve bank and for currency has subsided and the rate o f decline in deposits at re porting member banks has slowed up materially. The number o f commercial failures in this section in creased from 165 in September to 255 in October and was 38 per cent above last year. The increase from September was greater than seasonal and defaults in the first ten months were 15 per cent more numerous than in the like period o f 1930. The size o f the defaulting concerns also was very much increased, liabilities in Octo ber being over three times as large as a year ago and more than twice as large in the first ten months as in the corresponding period o f the preceding year. Bank debits failed to show the usual seasonal increase in the four latest weeks, being 31 per cent below the simi lar period o f last year, and in the first ten months were off 20 per cent. Savings deposits receded very sharply in October, the reduction at the reporting banks being 3.6 per cent in the month. On November 1, savings deposits at these banks were nearly ten per cent smaller than on the same date last year. Reserve Bank Credit. Changes in assets and liabilities o f the Federal Reserve Bank o f Cleveland in the past monthly closely paralleled those occurring in the Federal 2 THE MONTHLY BUSINESS REVIEW reserve system as a whole. In the fou r weeks ended November 18, the recent downward trend o f gold reserves was reversed, an increase o f over $20,000,000 being shown in the period. At $292,899,000 on the latest report date, they were only $2,500,000 below holdings on the corresponding date last year. They were still over $90,000,000 larger than two years ago. At the same time total earning assets dropped from $223,052,000 on October 21, to $204,422,000 on November 18. This was in contrast to the seasonal increase shown at that time in preceding years. The greater part o f the reduction was caused by a falling-off in holdings o f bank ers’ acceptances which dropped from $57,566,000 on Octo ber 18 to $36,647,000 in the follow ing four weeks. This reduction was similar to the drop shown for the entire system, as maturing bills exceeded the amount of bills offered to the Reserve banks. Bills discounted for member banks in this District in creased in the closing part of October and early November to $106,161,000 on November 4, but receded in the two ensuing weeks to $94,824,000, as demand for currency de clined. Discounts, on the latest date, were more than three times as large as a year ago, and in the past few weeks have been higher than since late 1929. Holdings of Government securities have remained prac tically unchanged at the high level which has prevailed since July. Circulation of this bank’s Federal reserve notes con tinued to expand at a somewhat decelerating rate until the week ended November 18, when a reduction o f $4,000,000 was reported. This was partly seasonal, but was the first weekly reduction since September and the largest since January. The sharp upturn in note circulation of this bank in the past year is shown on the accompanying chart. Compared with a year ago, note circulation has expanded $127,000,000, and the increase over 1929 is even larger. Business has been declining generally in the past two years, and constantly since the spring o f this year, and yet circulation o f Federal reserve notes, the most important type of money, has increased during much of the period. This is a reflection o f the disturbed banking situation in the District and represents withdrawals by individuals for hoarding as well as accumulation by banks o f larger holdings o f cash. Member bank reserve deposits dropped in the latter part o f October, but increased slightly in the two weeks ended November 18. This latter change occurred in the face of declining deposits at member banks. The ratio o f total reserves to deposit and note liability combined increased from 59.4 to 62.9 in the past four weeks. Member Bank Credit. Deposits at reporting member banks in leading cities continued to recede in the four weeks ended November 18, but the decline was more moderate than in preceding periods o f this year. The reduction in total deposits was about 2.6 per cent, most o f which represented a falling-off in time deposits which declined over $25,000,000, or 2.9 per cent in the period. Demand deposits were reduced $7,000,000, or less than one per cent. Demand deposits are now smaller than time deposits, while prior to September the form er always exceeded the latter. Accompanying the drop in deposits, loans and invest ments receded nearly two per cent in the four weeks, and on November 18 were about nine per cent smaller than one year ago, and lower than since early 1927. The greater part o f the reduction in the past four weeks was in total investments which declined over three per cent in the period. W ith the exception o f the first week in January, investments are lower than for any week this year. The falling-off in total loans, one per cent, in the past four weeks, was greater in collateral than in “ all other*' loans. Compared with the high point touched in 1929, collateral loans have been reduced nearly 25 per cent, while "a ll other” loans, changes in which represent largely fluctuations in comm ercial demand, have receded only 15 per cent from their peak. MA1NTTFACTTJKING, MINING Iron and Steel The iron and steel industry touched the lowest point o f the present depression in the third week o f October when op erations receded to 2 7 per cent o f capacity. Since that time a moderate upturn has been apparent, schedules being increased to 31 per cent o f capacity by the third week o f November. Cleveland mills in the month ended November 15 operated irregularly, falling from 39 to 29 per cent and then rising to 44 per cent. Pittsburgh showed a steady rise from 25 to 30 per cent, while Youngstown de clined from 30 per cent to 24, but recovered to 37 per cent by mid-November. This upward movement was somewhat greater than seasonal and sentiment in the steel industry is more opti mistic than for some time. Operators discern, for the first time in many months, the possibility o f moderately better business. The recent upturn was made on small individual commitments and without substantial assist ance from the automotive industry, and in mid-November there were indications that stronger support from this quarter would result as 1932 models were scheduled for dealer stocks and display cars. The recent upturn, however, may be a belated seasonal movement which normally develops in September and early October. There is little forward buying. Prior to November, steel operations had shown a con tinuous decline since last March and the October records were the lowest in ten years. Steel ingots were made in October at the rate o f 58,977 tons a day, total production being only 27.8 per cent o f estimated capacity. Output last year was 99,724 tons a day. The decline from THE MONTHLY BUSINESS REVIEW September was only 0.9 per cent, the smallest for any month since March. Ten-month steel production was 22,004,112 tons, compared with 35,094,520 tons a year ago. Average operations for the period have been 39.84 per cent o f capacity against 67.42 in the same period of 1930. During October the daily average output o f pig iron was 37,831 gross tons, or 26.3 per cent o f rated capacity, the lowest since September, 1921. In the ten months, 16,180,814 gross tons o f pig iron were produced, against 27,910,215 tons in the comparable period o f 1930. On the first o f November there were only 69 furnaces in blast, a reduc tion o f five in the month, and also the lowest since September, 1921. Finished steel commitments were so small that the price structure was under no pressure, with the single excep tion of cold-finished steel, which eased off $2 per ton. Pig iron, however, declined 50 cents a ton at Pittsburgh and in the Mahoning Valley. As a result, the iron and steel composite of Steel receded from $30.78 to $30.63 during the month. Coal Because o f the unusually warm weather fo r this time o f year, the seasonal in crease in coal consumption has been smaller than in other recent years, thus further reducing the demand for coal which has been at low levels for some time, partly due to curtailed operation o f industrial institutions and railroads. Output o f Fourth District mines in October was 13,390,000 tons, an increase o f about nine per cent from Septem ber, compared with an eight-year average increase for the period o f eleven per cent. In the entire country, coal production increased 12 per cent from September. Com pared with a year ago, output o f District mines was off 23 per cent in October and 19 per cent in the ten-month period. Stocks of bituminous coal in hands o f commercial con sumers and retail dealers on October 1 were 34,500,000 tons, an increase o f 4,400,000 tons in the past three months, but 1,400,000 tons below last year on that date. Consumption o f coal in the third quarter fell to 6,046,000 tons a week, against 6,273,000 tons in the second quarter, and was 18 per cent under the third quarter o f 1930. Shipments of coal from Lake Erie ports in October were 4,707,000 tons, an increase o f 2.9 per cent from the corre sponding period o f 1930, but for the season to November 1, such shipments have been 18 per cent smaller than in the like period o f last year. Stocks o f bituminous coal at upper lake ports on October 1 were 8,836,403 tons, about 1,500,000 tons less than a year ago. The third international conference on the bituminous coal situation was held at Pittsburgh this past month and, while many ills were generally recognized, chief among which were overproduction and competition from other fields, no concerted action was taken except to refer the six proposed plans for stabilization to a committee com posed o f the Governors o f the principal coal-producing states. Automobiles Though there usually is some fallingoff in automobile production In October and November as model changes are effected, the reduction this year was o f unusual propor 3 tions, particularly since September output was so reduced. There were only 80,142 cars and trucks made in October, according to the Department o f Commerce, a reduction o f 43 per cent from September, and which compared with 154,401 units produced in October, 1930. Actual produc tion was smaller than for any month since 1921, and the Board’s seasonally adjusted index was 28 per cent o f the 1923-1925 monthly average, compared with 40 in Septem ber. The improvement expected in November had not mate rialized to any extent in the first three weeks, Cram's weekly estimate for the latest period being only 8,709 cars and trucks, against 42,858 units in the corresponding week last year. The Annalist's weekly adjusted index was only 17.8 per cent o f estimated normal, nearly a complete shut-down. Eight manufacturers were entirely out of production and others were operating on very reduced schedules. Industrial employment at Detroit increased rather sharply in November, however, and production on 1932 models is very gradually getting under way. The falling-off in production has been less drastic in the truck field than in passenger cars. Output of trucks in October, at 21,727 units, was 46 per cent below last year. In the first ten months truck production was down 26 per cent. Truck production was lower in 1927 and 1924 than at present. Passenger cars produced in October totaled 57,764 units, a drop o f 49 per cent from the same month o f 1930, and o f 29 per cent in the ten-month period. To find a month o f low er passenger car produc tion it is necessary to go back to January, 1921. Output o f automobiles has fallen to much lower levels than have sales, and dealers' stocks are substantially re duced. In the first nine months, (September being the latest month for which registration figures are available) retail sales o f passenger cars plus exports have exceeded production by a good margin. Sales in September were about 17,000 in excess o f production. In principal counties o f the District new passenger car registrations in October declined more than seasonally, and were 26 per cent below one year ago. In the first ten months the reduction was 26 per cent. Tires, Rubber The tire industry continues to experience its seasonal decline which began in July, November usually being the month of lowest production and employment. The latter dropped two per cent in October from the preceding month, slightly less than the five-year average falling-off of three per cent, but the number employed was 14 per cent below last year and some factories were operating only part-time. October sales were reported considerably below those in September, only part o f the decline being seasonal. Consumption o f crude rubber in October by manufac turers in the United States was 22,277 long tons, a reduc tion o f 5.8 per cent from September, as compared with an average decline o f three per cent. Compared with a year ago, rubber consumption was off 19 per cent. Tire production in September, the latest month for which complete figures are available, was 18.8 per cent below August, a greater-than-seasonal decline, and 5.8 per cent under a year ago. In the first nine months the re duction was 3.2 per cent. Tire shipments in September receded 20.7 per cent from August and were 10.8 per cent under a year ago. Shipments in September exceeded 4 THE MONTHLY BUSINESS REVIEW production by 24 per cent, however, and stocks dropped 8.3 per cent in the month, and on September 30 were 17 per cent smaller than on September 30, 1930. Producers feel that a real tire shortage is gradually developing, based chiefly on gasoline consumption figures which indicate that cars are being operated at approxi mately the same rate as in other recent years. In the first nine months o f 1931 consumption o f gasoline was over 500,000,000 gallons ahead of the same period of 1930 and 1,180,000,000 gallons in excess o f the corresponding period o f 1929. In connection with the foregoing, the semi-annual sur vey o f dealer stocks made by the Department of Commerce shows some interesting facts. The average number of casings per dealer was 60.2 (based on 26,882 reports) compared with 62.4 tires a year ago, as shown by 31,522 reports. This was a reduction o f 3.5 per cent from last year, a favorable development, but in proportion to cur rent demand, stocks no doubt are ample. Present stocks, however, are low er than for any corresponding date since 1927. Despite the falling-off in consumption o f crude rubber, imports continue in large volume, the October figure, 41,395 long tons, being 2.2 per cent ahead o f September and only five per cent below last year. In the first ten months imports were off only two per cent, while con sumption was down about seven per cent. Domestic stocks o f crude rubber which have been increasing for two years, were estimated at 273,456 long tons, or more than a year’s supply. Compared with a year ago, the increase was 47 per cent. Prices have moved down as stocks increased, rubber being quoted in mid-November at less than five cents a pound, a drop o f nearly 40 per cent in the past year. Clothing The woolen textile and clothing industry has been hampered by the long period o f very moderate fall weather, and de mand for winter clothing was further reduced. Retail stores have had a very poor season so far, October cloth ing sales being 20 to 25 per cent below the same period o f 1930. This is normally the best season o f the year for cloth ing manufacturers, reorders on winter goods and initial orders for spring delivery stimulating operations, but total employment in the clothing industry in October, dropped four per cent from September, in contrast to a five-year average increase of two per cent for the period. Compared with a year ago, the reduction was nine per cent and some factories are only operating on part-time schedules. Employment conditions at men’s clothing fac tories were better than at plants making women’s clothes. Compared with a year ago the reduction at the form er was only three per cent. Salesmen are in their territories with spring samples, but advance orders are reported in small volume, in most cases, though one concern has received a larger volume of advance orders than was obtained in the same period o f last year. Prices are very low, and the recent upturn iu raw material prices may account for the increased buying. Retail stocks are limited, the dollar value o f wom en’s clothing at stores in this District being 25 per cent below last year. Men’s clothing stocks were down 13 per cent in the same period. Part o f this represents a reduction in costs, but Fairchild1s retail price index for clothing is about ten per cent lower than at the beginning o f the year, the earliest date for which these figures are avail able. This has been an unusual year for makers o f knit goods, due to the popularity o f knitted outerwear. Operations have passed their peak, however, and production now is being curtailed. W arm weather has retarded demand for knit underwear. Other Manufacturing Sentiment among general manufacturers o f the District apparently was much improved in mid-November from a month ago. Recent developments in the general situa tion, including a decline in the number o f bank failures and money in circulation and a rise in prices of agricul tural and other products aided materially in restoring confidence. Some increased buying was reported in midNovember, not entirely seasonal. The latest complete employment and production figures, however, apply to October when the downward trend was still apparent. At 261 out o f 707 manufacturing concerns reporting to the Ohio State Bureau o f Business Research, increases were shown in October and 64 reported no change from Septem ber, but the index fell two per cent and was 14 per cent below last year. In the past five years there has been an average decline o f one per cent from September to Octo ber. Four groups, chemicals, metal products, rubber prod ucts, and vehicle manufacturers, improved or showed less than the average September-to-October decline. In the m ajor cities, employment at Dayton was reported above last year and a favorable increase was shown at Toledo and Pittsburgh in October. Columbus employment dropped seven per cent, a sharp reduction. Many concerns which show a rather favorable situation compared with a year ago are staggering their work so that a larger number can be employed, but payrolls are very much reduced. Clay Products. Brick and tile factories increased the number of employees two per cent in October, compared with a five-year average decline o f that amount. Demand for window glass was stimulated by the possibility of a glass cutters strike which proved to be o f short duration. A better feeling was reported in the trade than for some time. Plate glass demand has changed little, though manufacturers anticipate some improvement due to larger orders from automobile manufacturers. Moulded glass makers are experiencing a seasonal falling-off, but have enjoyed a good year. Stocks o f plate and rolled glass are low. China and pottery manufacturers report condi tions unchanged from a month ago, with demand for dinnerware at low levels. Electrical Supplies. Irregularities were apparent in the electrical supply industry. Some indications o f increasing orders were received, but others said that October and November business was still at very low levels. Of 30 concerns reporting on employment in October, 22 showed reductions which caused the group index to fall four per cent, in contrast to a five-year average drop for the period o f one per cent. Hardware, Machinery. Declining operations were still predominant in this industry in October and employment 5 THE MONTHLY BUSINESS REVIEW was more than 20 per cent below last year. A few r e ports o f increased orders were received in early November, chiefly from companies supplying the automobile industry with parts and accessories. Specialty machines, pipes, valves, etc., are in limited demand. Paint. Operations in the paint industry have changed but little in the past month and continue at about 20 per cent below last year. Prices remain just about stationary and there has been no marked change in employment. Paper. The paper industry continues to operate at approximately the same level as a month ago and at about 60 per cent of capacity. Employment at 12 concerns was seven per cent below last year. Inventories are reported low and still being reduced. Sheet Metal and Stoves. An improvement not up to seasonal proportions was reported in October, but em ployment was still below a year ago. Shoes. The shoe business in October and the first part of November was affected by the unseasonably warm weather, and, though production usually recedes at that time, the falling-off was much greater than seasonal, amounting to 28 per cent. Output of 29 establishments in the Fourth District in October was about 12 per cent beloy/ the same month last year and the gain shown in the first nine months of this year, compared with the correspond ing period of 1930, was transformed into a loss by the addition o f the October figures, the ten-month decline be ing 0.9 per cent. Retail prices of many lines have been reduced, but sales have not been stimulated to any extent. TRADE Retail and wholesale trade in October and early Novem ber were adversely affected by the unseasonably warm weather that has prevailed. Stores have sold only limited quantities o f fall goods, and winter clothing, etc., has been in very poor demand. Sales at reporting department stores increased from September to October, but the ex pansion was much less than the usual seasonal amount and the adjusted index dropped to 72 per cent o f the 1923-1925 average, a new low for this depression. A revised index of department store sales has been con structed and is shown on the accompanying chart. The new index is based on daily average dollar sales o f the three years 1923-1925. In the adjusted index, allowance has been made for variations in the number o f Saturdays in the months and also for changes in the Easter date in March and April. W hile the differences between the new index and the one previously used are not great, the latest revision was thought necessary, and, it is felt, gives a better picture of department store conditions in this District. No allowance has been made for variations in retail prices. The index begins in 1919, and monthly figures for the entire period are available on request. The dollar value o f October sales was 20.6 per cent below the same month last year, and the loss is the first ten months from the corresponding period o f 1930 was 12 per cent. All cities reported large losses in October com pared with a year ago, ranging from 12 per cent at Cleve land to 38 per cent at Youngstown. A smaller share of total sales was bought on credit than a year ago, the ratio of credit to total sales beng 57.6 per cent against 64.2 last year and installment sales represented only 4.7 per cent o f total sales against 5.9 per cent in October, 1930. Stocks at department stores increased 4.5 per cent in October compared with the preceding month, but this was less than the estimated seasonal increase. The adjusted index declined to 73.9 per cent o f the 1923-1925 monthly average. In view o f the sharp falling-off in sales, stocks are considered adequate for current needs, but stock turn over has been slightly more rapid than in 1930. Collections improved in October, being 31.5 per cent of the volume of accounts outstanding at the end o f Septem ber. This compared with 34.9 per cent in October, 1930. In the individual departments, the losses from a year ago were rather well distributed, but wearing apparel sales showed a greater falling-off than some other depart ments. At 13 wearing apparel stores total sales were off 21.8 per cent in October compared with last year. Furniture store sales were 19 per cent smaller in Octo ber than a year ago, but sales of furniture departments of department stores were 27 per cent smaller than in the same month o f 1930. Chain store sales increased seasonally in October, but, compared with a year ago, chain grocery sales on a unit basis were nearly five per cent smaller than in 1930 and chain drug sales were off eight per cent. W holesale trade in October, based on four reporting lines, was nearly four per cent smaller than in September, a contrary-to-seasonal movement. In the past seven years there has been an average increase of over three per cent in the period. W holesale sales in October were 25 per cent below the corresponding month o f 1930, part o f the decline being accounted for by lower prices. Compared with last year, the largest reduction in October sales was in dry goods— 33 per cent. Grocery sales were down 26 per cent, hardware 24 per cent, and drugs, 14 per cent. BUILDING Construction activity in this District is rapidly ap proaching the irreducible minimum, awards in October being 32 per cent below September, according to the F. W. Dodge Corporation. W hile the change from September to October in preceding years has been rather erratic, three years showing increases o f from 15 to 25 per cent, and five declines from four to 24 per cent, the recent re duction was decidedly greater than seasonal. Awards also THE MONTHLY BUSINESS REVIEW 6 show a much greater falling-off from last year in this section than in the entire country. Compared with a year ago, October awards, at $13,159,000, were 68 per cent under last year, which at the time was considered a small figure. In the ten months, con tracts awarded amounted to only $236,754,000, a reduc tion from the same period last year of 46 per cent. In the various classes o f building the drop from last October in residential contracts was 51 per cent, in nonresidential contracts, 67 per cent, and in public works and utilities, 80 per cent. Contemplated projects reported in October were slightly larger than in the preceding month, but were less than a third of what they were a year ago. The decline in October was continued in the first half of November, awards being about one-third as large as in the same period of last year. Builders and building supply dealers reported an im provement in sentiment not based on developments with in the industry, but a result of recent events, chiefly in the financial situation. AGRICULTURE Of prime importance to agricultural communities has been the rise in prices in the past month, particularly on wheat and allied grains, cotton, poultry and dairy prod ucts, and vegetables. Although wheat prices have de clined from the high point touched in early November, at 57 cents a bushel on November 25, compared with a low of 45 cents on October 5, a needed increase in the gross value o f this large cash crop was indicated. The farmer may benefit from this increase because proportionately more grain was in storage on farms on November 1 than in preceding years. The rise, apparently, was partly a result of speculation, but reports o f reduced acreage and poor condition of next year's winter-sown crop in midwestern states, together with a below-normal world carry over and a realization that wheat at recent levels was underpriced, were some reasons for the upturn. Late crops have been harvested under very favorable conditions, and indicated yields were further increased during October. Final crop figures are not yet available, but the Department o f A griculture's report on 23 principal crops indicates yields per acre will be 11.4 per cent above yields last year and 0.6 per cent above the average o f the preceding ten years. Estimates o f late-maturing crops o f the Fourth District were larger than a month ago. The estimated corn crop was 212,621,000 bushels, an increase o f over 3,500,000 in the month, and about twice as large as the very small crop harvested in 1930. In Ohio, the yield is 46 bushels per acre, the second highest on record and the quality of the crop, at 91 per cent, is far above the average quality o f preceding years, which was 77 per cent. In Pennsyl vania, the yield was 51 bushels per acre and the total crop was 139 per cent larger than the 1930 harvest and 16 per cent above average. Kentucky farmers reported even larger increases from last year. A greater propor tion of the crop is o f merchantable quality than in other recent years. Stocks o f last year’s crop on farms on November 1 were below the average o f preceding periods. The potato crop estimate for the District was revised upward slightly in October and, at 19,837,000 bushels, compared with 15,619,000 bushels harvested in 1930. The increase is considerably larger than that shown in the entire country. Yield per acre is above average in Ohio and Pennsylvania, but below average In the other two states o f the District. Quality is somewhat below average, however, in most sections. The condition o f fruit crops improved slightly in October and yields and quality are much above the ten-year aver age. The Ohio apple crop is reported at 14,790,000 bushels, more than twice the average harvest and fou r times as large as last year's small crop. Quality was reported at 89, compared with a ten-year average o f 75 per cent. Simi lar increases were reported in Kentucky and W est V ir ginia, but, while the Pennsylvania crop was large, the in crease over the average o f the preceding ten years and 1930 was not as large as in other states o f the District. Grapes and pears also yielded somewhat better than ex pected, and quality and size o f crops in states o f the Dis trict were proportionately better than in the entire country. Tobacco The tobacco crop has cured well, with the exception o f a little house burn from overcrowded barns. In some sec tions it has cured redder than had been expected, but as a whole the crop is better than average. Estimated pro duction o f principal types grown partly or wholly in the District, together with the quality o f the crop, both com pared with last year, are given below : TOBACCO Production Air-Cured 19311 Burley ........................ 468,502 Green River ............. 36,846 One Sucker ............. 31,533 Fire-Cured Clarksville - Hopkins ville ........................ 103,920 Paducah .................... 52,875 Cigrar Filler 31,066 Miami Valley ........... All Types United States ........... 1,647,975 Preliminary. % Inc. or (1,000 Dec., 1931 Quality pounds) compared (Per cent) 1930 with 1930 1931 1930 349,263 +34.1 84 78 28,260 -j-30.4 84 74 29,350 + 7.4 81 83 95,695 38,226 - f 8.6 +88.3 80 83 77 70 40,800 —23.9 89 92 + 78.8 73.3 1,641,437 0.4 With the exception of cigar filler tobacco production of types grown in this District was much larger, compared with a year ago, than was the entire tobacco crop. Fluecured tobacco, grown mostly in the Carolinas and Georgia, and used chiefly for cigarettes, was the type whose reduc tion from last year’s harvest partly offset the gains shown in air- and fire-cured types. The cigar-filler tobacco crop for the entire country is larger than a year ago, because of an increase in eastern Pennsylvania production. The en tire tobacco crop is about 300,000,000 pounds larger than the average annual harvest o f the five years 1925-29, and is the largest crop on record. Growers in this District are getting ready to market one of the largest crops ever grown and a crop which is of much-better-than-average quality. There has been some talk of pooling the burley crop, but the idea is not meet ing with much favorable response. As to the probable price of the market opening in December for this year’s crop, nothing can be said with certainty, but a review o f the flue-cured markets in the southeastern states may be helpful. North Carolina tobac co sales in October were at an average price of $9.93 a hundred pounds, which was $5 less than the average in October last year. Burley tobacco prices have been declining since 1928 7 THE MONTHLY BUSINESS REVIEW 30.4 c e n t s a p o u n d . I n b o t h 1927 a n d 1928 t h e c r o p w a s s m a l l . T h e 1929 a v e r a g e p r i c e w a s 21.8 c e n t s a n d t h e p r i c e i n J a n u a r y , 1931, a v e r a g e d 17.3 c e n t s a p o u n d . W it h a c r o p m u c h la r g e r th a n w h e n th e a v e r a g e p r ic e w a s w a s c u t la s t y e a r , b u t a ls o o f b e t t e r q u a lity , th e p r ic e a t w h ic h t h e K e n t u c k y m a r k e t s w i l l o p e n is v e r y u n c e r t a i n . Fourth District Business Statistics (000 omitted) Fourth District Unless Oct., % change Jan.-Oct., % change Otherwise Specified 1931 from 1930 1931 from 1930 — 24.3 25,208,000 — 19.6 Bank Debits— 24 cities.............. $ 2,379,000 Savings Deposits— end of month; 28 selected banks, O., W. Pa.. .$ 698,803 — 8.2 749,505* — 0.8 Postal Receipts— 9 cities........... $ 2,919 — 11.1 27,656 — 29.8 Life Insurance Sales: Ohio & Penna........................... 3 85,470 — 9.5 946,774 — 16.7 Retail Sales: Department stores— 56 firm s..3 19,820 — 20.6 185,471 — 11.9 Wearing Apparel— 13 firms.. ..3 1,229 — 21.8 11,148 — 12.9 738 — 19.4 7,835 — 20.7 Furniture— 49 firms................. 3 Wholesale Sales: Drugs— 13 firms........................3 1,363 — 14.4 14,564 — 8.8 Dry Goods— 11 firms............... 3 1,491 — 33.4 13,200 — 27.2 4,443 — 26.2 45,447 — 18.8 Groceries— 38 firms.................. 3 Hardware— 15 firms................. 3 1,304 — 24.2 12,378 — 22.2 Building Contracts— Residential# 3,870 — 50.8 60,378 — 36.3 “ — Total........$ 13,159 — 68.2 236,754 — 45.7 Commercial Failures-Liabilities $ 10,554 + 203.6 78,825 +121.3 ‘ — Number.. 255* + 3 7 .8 1,919* + 15.0 Production: Pig Iron, U. S................... Tons 1,172 — 45.9 16,181 — 42.0 Steel Ingots, U. S............... Tons 1,592 — 40.9 22,004 — 37.3 Automobiles— Pass. Cars..U.S. 57,764 — 49.0 1,822,117 — 28.7 * — Trucks..............U.S. 21,727 — 46.5 373,321 — 25.7 Bituminous Coal..............Tons 13,390 — 23.3 127,351 — 18.8 Cement— O., W. Pa., W. Va. Bbls. 904 — 45.4 9,767 — 37.6 Elec. Power— O., Pa., Ky. k.w.h. 1,115* — 4.2 10,115* — 6.5 Petroleum— O., Pa., K y ... Bbls. 2,089* + 1.1 17,118* — 17.3 Shoes................................... Pairs 5 — 11.9 5 — 0.9 Tires, U .S....................... Casings 2,548* — 5.8 32,603* — 3.2 Bituminous Coal Shipments: Lake Erie Ports................Tons 4,707 + 2.9 28,136 — 18.4 Iron Ore Receipts: Lake Erie Ports................Tons 2,029 — 49.4 14,299 — 52.7 *Monthly Average 4January-September •Actual 5Confidential * September Fourth District Business Indexes (1923-1925 = 100) Oct., 1931 88 Bank Debits (24 cities). 175 239 112 102 Sales— Life Insurance (Ohio & Pa.). 78 87 57 72 64 70 44 — " All (76)...................... 80 *' — Chain Drug* (3)**...................... 28 Building Contracts — T ota l................ .. ** ** — Residential.......... 23 Production— Coal (O., W. Pa., E. K y .).. 74 — Cement (O.. W. Pa., W. Va.) 75 ** — Petroleum (O., Pa., Ky.)*. 113 *' — Elec. Power (O., Pa., Ky.)* 133 •* — Shoes................................... 65 •September ••Per individual unit operated. Cincinnati.. . . . . Homestead.... Steubenville — Percentage DEPARTM ENT STORES (56) Akron............................................................... Cincinnati......................................................... Cleveland.......................................................... Columbus.......................................................... Pittsburgh......................................................... Toledo............................................................... Wheeling........................................................... Youngstown...................................................... Other Cities..................................................... District.............................................................. WEARING APPAREL (13) Cincinnati......................................................... Other Cities..................................................... District............................................................. FURNITURE (49) Cincinnati......................................................... Cleveland.......................................................... Columbus......................................................... Dayton.............................................................. Toledo............................................................... Other Cities.................... ................................ District............................................................. CHAIN STORES* Drugs— District (4)........................................ Groceries— District (6)................................... WHOLESALE GROCERIES (38) Akron................................................................ Cleveland.......................................................... Erie................................................................... Pittsburgh........................................................ Toledo............................................................... Other Cities..................................................... District............................................................. WHOLESALE DRY GOODS (11)............. WHOLESALE DRUGS (13)....................... WHOLESALE HARDWARE (15)............. •Sales per individual unit operated. SALES Oct.Oct. — 25.2 — 17.1 — 12.2 — 13.5 — 25.3 — 19.9 — 24.3 — 38.0 — 22.5 — 20.6 SALES First ten months — 7.7 — 9.5 — 10.0 — 9.7 — 14.3 — 7.9 — 15.2 — 20.0 — 14.3 — 11.9 STOCKS Oct.Oct. — 11.6 — 18.2 — 2.7 — 18.5 — 13.7 — 20.7 — 9.5 — 20.5 — 16.7 — 13.1 — 15.3 — 25.0 — 21.8 — 11.2 — 13.8 — 12.9 — 6.7 — 16.7 — 13.5 — 27.8 — 13.2 — 20.9 — 11.2 — 23.0 — 41.1 — 19.4 — 11.1 — 21.5 — 20.9 — 25.1 — 23.5 — 18.0 — 20.7 — 7.9 — 4.8 — 3.7 — 4.2 — 30.4 — 32.4 — 21.3 — 12.3 — 18.6 — 25.6 — 26.2 — 33.4 — 14.4 — 24.2 — 27.5 — 22.5 — 18.8 — 7.6 — 14.7 — 17.5 — 18.8 — 27.2 — 8.8 — 22.2 Youngstown. . . Cleve. Suburbs .. Columbus........... Covington, K y . . Dayton............... Erie, Pa.............. Lima................... — iil9 — 23.7 — i o ’. o Oct., 1928 136 111 54 129 130 112 114 106 109 106 109 90 120 102 106 176 105 135 120 Oct., 1927 119 120 159 124 108 113 111 98 103 109 104 96 103 101 87 145 110 121 114 (Thousands of Dollars) Year-to-date 4 weeks % Jan. 1 to ending change Nov. 18, Nov. 18, from 1931 1931 1930 852,008 60,285 — 21.2 93,554 6,891 — 41.8 365,820 15,431 — 55.5 — 20.8 3,536,047 259,218 7,092,619 — 31.5 479,021 1,620,003 — 36.1 107,965 793,559 — 32.3 44,374 — 10.4 335,503 27,122 2,797 — 29.5 40,381 118,650 8,474 — 23.6 3,016 — 20.4 41,765 15,659 — 18.2 205,234 — 33.7 110,897 6.928 52,887 3,747 — 29.0 92,979 — 19.4 7,044 — 34.1 132,333 9,320 597,202 — 30.8 8,044,323 13,339 — 21.5 189,440 89,383 5,982 — 25.8 68,681 — 53.9 1,371,773 5,211 — 45.8 87,398 391,138 30,108 — 18.0 20,367 — 61.2 527,561 7,016 — 21.9 93,319 — 31.5 26,278,574 Year-to-date Jan. 2 to Nov. 19, 1930 1,045,566 138,300 483,365 4,011,034 8,690,631 1,958,020 964,583 420,267 54,360 154,062 48,895 264,440 135,814 62,274 116,720 177,657 10,610,557 240,690 109,976 1,932,687 125,686 468,594 729,852 108,039 33,052,069 % change from 1930 — 18.5 — 32.4 — 24.3 — 11.8 — 18.4 — 17.3 — 17.7 — 20.2 — 25.7 — 23.0 — 14.6 — 22.4 — 18.3 — 15.1 — 20.3 — 25.5 — 24.2 — 21.3 — 18.7 — 29.0 — 30.5 — 16.5 — 27.7 — 13.6 — 20.5 Building Operations Canton................ Cincinnati.......... .... Oct., 1929 148 90 82 137 134 118 118 109 116 107 115 89 156 71 112 144 120 156 115 Debits to Individual Accounts Wholesale and Retail Trade (1931 compared with 1930) Oct., 1930 116 127 79 126 113 106 102 86 97 85 94 87 87 46 97 138 112 139 74 Middletown........ Pittsburgh, Pa... Portsmouth........ Steubenville....... Toledo................ Warren............... Wheeling, W. Va. Youngstown.... . Total............... October, 1931 215,452 14,058 11,625 1,695,300 548.000 532.157 177,500 105,145 325,023 15,705 325,615 12,630 15,865 33,370 8,670 1,878,612 21,000 4,430 7,460 1,590 121,807 8,785 37,980 22.351 6,202,405 % change from 1930 — 39.4 — 45.3 — 86.1 — 51.4 — 92.3 — 45.4 — 81.3 + 48.5 + 11.6 — 20 9 — 8.8 — 86 7 + 6 0 .0 — 34.9 — 48.7 +133.1 — 36.4 + 3.0 — 85.5 — 97.5 — 45.7 — 82.6 — 49.8 — 89.7 — 59.7 Jan.-Oct., Jan.-Oct., 1931 1930 1,995,161 9,020,974 184,004 314.621 658,740 1,364,864 23,533,055 36,118,777 11,133,750 29,306,050 11,466,680 15,852,736 3,219,200 5,151.150 599,100 606,450 2.660,401 4,525.843 131,402 251,955 2,307,535 3,837,073 449,737 1,152,564 113,489 550,232 713,877 624,683 84,638 575,494 12,178.072 18,150,842 314,400 614,500 104,605 253,677 1,169,967 731,325 189,890 666.250 1,966,752 6,322,464 272,217 646,280 583,230 1,016,653 1,396,385 2,549,799 77,587,262 140,436,016 % change from 1930 — 77.9 — 41.5 — 51.7 — 34.8 — 62.0 — 27.7 — 37.5 — 1.2 — 41.2 — 47.8 — 39.9 — 61.0 — 79.4 + 14.3 — 85.3 — 32.9 — 48.8 — 58.8 + 6 0 .0 — 71.5 — 68.9 — 57.9 — 42.6 — 45.2 — 44.8 s THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Production and employment in manufacturing industries declined fur ther in October, while output o f minerals increased more than is usual at this season. There was a considerable decrease in the demand for Reserve bank credit after the middle of October, reflecting a reduction in member bank reserve balances and, in November, an inflow o f gold, largely from Japan. Conditions in the money market became somewhat easier. Production and Employment Index number o f industrial production, adjusted for seasonal vari-tion, (1923-1925 = 100). Latest figure, October, 74. 1927 1523 1929 1930 Federal Reserve Board’s index o f Factory Em ployment, with adjustment for seasonal varia tion, (1923-1925 average = 100). Latest figure, October, 70.3. Total output o f manufactures and minerals, as measured by the Board's seasonally adjusted index o f industrial production, declined from 76 per cent of the 1923-1925 average in September, to 74 per cent in October. Output o f steel remained unchanged at 28 per cent o f capacity in October, although it usually shows an increase for that m onth; in the first half of November activity at steel mills increased somewhat. Autom obile produc tion declined sharply in October; production of shoes and woolens decreased and cotton mill activity showed little change, although an increase is usual at this season. Output of bituminous coal increased seasonally, and there were large increases in the output of anthracite and petroleum. Volume o f factory employment declined substantially from the middle o f September to the middle of October. At woolen mills where an increase in employment is usual at this season, there was a large decrease. In the automobile and shoe industries reductions in employment were considerably larger than usual, while in the canning industry the decline was wholly of a seasonal character. In the silk goods and hosiery industries employment increased by more than the usual seasonal amount. The November cotton crop estimate o f the Department o f Agriculture was 16,903,000 bales, 600,000 bales larger than the October estimate and 3,000,000 bales larger than last year, in spite of a reduction in acreage. Data on the value o f building contracts awarded in the period between September 1 and November 15, as reported by the F. W . Dodge Corporation, showed a continuation of the downward movement. In this period value of contracts was 29 per cent smaller than in the corresponding period of 1930, reflecting smaller volume o f construction and somewhat lower building costs. Distribution Total volume of freight car loadings remained unchanged in October, while loadings of merchandise decreased. Department store sales increased by somewhat more than the usual seasonal amount. W holesale Prices Monthly rates in the open market in New Y ork: Commercial paper rate on 4 to 6 month paper. Acceptance rate on 90-day bankers* acceptances. Latest figures are averages of first 21 days in November BILLIONS OF DOLLARS 10 aA M E M B E R 0/IN K C R E D IT j All OtherLoansjf \ Loans on SecuritlesA IV A \T^\ ^Investments .... j 1927 1928 J025 \ - v ( i 1931 Monthly averages of weekly figures for report ing member banks in leading cities. Latest fig ures are averages of first three weeks in No vember. The general level of wholesale prices declined from 69.1 per cent of tlie 192 6 average in September to 68.4 per cent in October, according to the Bureau of Labor Statistics. Prices of grains, cotton and silver, after show ing a rapid rise beginning early in October, declined considerably, but in the third week of November were still above their October low points; prices of hides and petroleum were also higher in the middle of November than in early October. During this period the prices o f livestock and meats declined rapidly, reflecting in part developments of a seasonal character. Bank Credit Reserve bank credit, which had increased rapidly between the middle of September and the third week o f October, declind by $265,000,000 during the follow ing four weeks. This decline reflected a large reduction in member bank and other balances at the Reserve banks and also an inflow of gold, chiefly from Japan. Demand for currency, which had been on a large scale during September and the first three weeks o f October, showed relatively small fluctuations after that time and in the second week o f November de clined by somewhat more than the seasonal amount. Loans and investments of member banks in leading cities continued to decline during recent weeks, and on November 18 the total volume was $500,000,000 smaller than five weeks earlier. This decrease reflected sub stantial reductions in loans on securities and in “ other” loans, as well as in the banks’ holdings of investments. At the same time deposits of these banks also declined, with a consequent reduction in the reserve balances which they were required to hold with the Reserve banks. Money rates in the open market, which had advanced sharply during October, declined somewhat early in November. Rates on prime commercial paper declined from a range o f 4-4% per cent to a range o f 3 % -4 per cent, and rates on bankers’ acceptances from 3 % to 2 % per cent.
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