The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY BUSINESS REVIEW
Covering financial, industrial
and agricu ltu ra l c o n d itio n s
V o l. 18
Cleveland, Ohio, December 31, 1936
At the close of 1936, business continued at a very good
rate in nearly all trade and industrial lines, but while opera
tions generally were at the highest level of the recovery
movement, developments in the labor situation in December
were seriously disturbing to at least one major industry.
The Board’s index of industrial production, at 114 per cent
of 1923-25 in November, was higher than since October 1929,
and the average for the year approximated that of 1930.
Employment and payroll indexes and retail trade were about
the same as in 1930 and substantial gains over 1935 occurred
in all fields.
The rate of improvement accelerated in the year in the
case of most indexes and while there is evidence that some
of the activity in November and December represented the
production of goods ordered in excess of current require
ments in order to avoid possible higher costs at a future date
or delayed deliveries because of labor trouble, there are no
current figures by which the extent of this forward buying
can be gauged. Steel orders on hand are very large; auto
assembly plants are reported to have bought a good share
of supplies needed for the first half of 1937; cotton, wool,
leather, and rubber purchases have been sizable in recent
weeks and attempts to build up coal stocks are evident. The
latest inventory figures for the entire country ( Department
of Commerce index) are for October, and while a seasonal
gain from September was evident in raw materials, total
stocks of raw and manufactured commodities were three per
cent under last year and lower at this season than since 1928.
In the fourth district, gains in many lines in 1936 ex
ceeded the national average. Agricultural conditions, while
below the average of past years, were better than in many
sections and the relatively higher prices produced a greater
gain in gross income in this section than the average increase
reported for the country. Employment indexes in Ohio in
the closing months of the year were above the average of
1926 and the improvement over 1935 was exceeded by the
gain in payrolls which resulted from wage increases and
a greater number of hours worked. These gains in purchas
ing power were reflected in various fields of retail trade.
Department store sales were up 14 per cent in the first
11 months compared with 1935 and preliminary reports
on December sales indicate that the month’s increase
Fourth Federal Reserve D istrict
Federal Reserve Bank of Cleveland
No. 12
approximated that figure. In dollar volume, retail trade
exceeded any of the past five years. Furniture store sales
increased over 1935 by a greater amount than department
store sales and more automobiles were sold than since
1929.
Residential building contracts awarded were 60 per cent
larger in this district in the first 11 months of 1936 than
in the same period of 1935 and total construction was up
40 per cent. Heavy public works contracts were under
1935 by about 25 per cent. While total building activity
was better than since 1931 the volume is still quite limited.
The sharp rise in iron and steel production in 1936 and
fabrication of these materials were responsible for a good
share of the improvement experienced locally. Steel ingot
production in the entire country was up about 40 per cent
from last year and was only 13 per cent under the 1929
peak. Decided gains in the heavy branches of the steel
industry and continued demand for light steels benefited
all local steel centers, but the greatest improvement was
at Pittsburgh where, until December of this year, steel mill
operations had been under the national average. Large
orders on hand kept mills operating in December at the
highest rate of the year. Iron ore receipts at Lake Erie
ports in the past season were over 31,000,000 tons, an
increase of 57 per cent over 1935 and comparable with
1930. Despite this gain, ore supplies at furnaces and lake
ports at the year end were about the same as at the close
2
THE MONTHLY BUSINESS REVIEW
of 1935. Coal shipments from Lake Erie ports were 26
per cent larger in 1936 than in the previous year and
lake shipping generally was much improved.
Check transactions recorded by banks in leading cities,
shown on the accompanying chart, reflect in part the
improvement experienced in this district in 1936. In the
first 11 months debits to individual accounts were 17 per
cent larger than in the corresponding interval of last year
and the index at the year end was at about the level of
early 1931. Several factors tend to retard this index in
comparison with previous years, including variations in
price levels, service charges on checking accounts, and the
decrease in number of banks.
There were fewer commercial failures in this district in
1936 than in over 15 years and the reduction from 1935
in the first 11 months was 25 per cent. Liabilities of the
defaulting concerns also were down a like amount. Life
insurance sales lagged in this section, total new insurance
written in Ohio and Pennsylvania prior to December 1
being six per cent less than in the preceding year.
FINANCIAL
The accompanying table shows changes in principal assets
and liabilities of the Federal Reserve Bank of Cleveland
in the year 1936. Earning assets rose $27,000,000 in the
year, but the bulk of the gain (increased holdings of
government securities) resulted from a reallocation of the
Reserve System’s total holdings among the various reserve
banks. Loans to industry were down over half a million
dollars, holdings of acceptances declined, but bills discounted
increased a nominal amount.
Federal Reserve Bank of Cleveland
(000 omitted)
Dec. 23,
1936
Assets:
Total Reserves (including gold certificates
on hand and due from Treasury) . . . .
Bills d isco u n te d ...................................................
Acceptances purchased ...................................
Industrial advances ........................................
Government s e c u ritie s ......................................
Total bills and s e c u ritie s ...................................
Liabilities:
Federal reserve notes in c ir c u la tio n ....
Member bank reserve deposits......................
Other deposits .....................................................
Total deposits .........................................................
Estimated excess reserves .................................
Dec. 31,
1935
$679,214
76
294
1,214
245,770
247,354
$536,128
10
444
1,784
218,025
220,296
432,230
427,335
47,872
475,207
153,000
352,515
334,461
45,573
380,034
172,000
The most pronounced change in assets was the rise of
$143,000,000 in total reserves, the greater part of which
was gold certificates due from the U. S. Treasury. This
gain resulted indirectly from gold imports and inter-district
transfer of funds, and total reserves on the latest date were
at record high levels.
Member bank reserve deposits rose about $93,000,000 in
1936 to an all-time peak. The drop in the third week of
December reflected in part demand for holiday currency.
Estimated excess reserves of all member banks in this dis
trict were approximately $153,000,000 in late December
1936, only $20,000,000 less than at the close of 1935
despite the fact that reserve requirements were raised 50
per cent in August. Federal reserve notes in circulation
increased about $80,000,000 in the past year, also
to a new high level. Several factors contributed to the
rise, among them being substitution of federal reserve notes
for national bank notes which are being retired; increased
business activity, higher prices and payrolls, all require
more currency; and failure of banks to return unneeded
money to the reserve bank as promptly as was formerly the
case because most of them have large excess reserve bal
ances. In addition bank service charges on checking ac
counts probably cause more cash to be used and low
interest rates on deposit accounts offer less incentive to
deposit excess cash than in previous years.
Member Bank Credit Total credit extended by reporting
member banks in this district increased about $150,000,000
in the year 1936, or approximately 8.7 per cent. While total
loans rose over $35,000,000, or six per cent in the year, the
bulk of the increase was in holdings of securities. Investments
in government securities and those guaranteed by the govern
ment advanced $90,000,000 to an all-time high of $975,000,000, while investments in other than government
securities were up $25,000,000, or approximately ten per
cent. Holdings of government securities by these banks
represented 51.6 per cent of total credit extended, while
a year ago they were 48.3 per cent of the total.
The expansion in loans in the year was chiefly in socalled commercial loans which were up over $40,000,000,
or 23 per cent. Real estate loans declined slightly, while
loans on securities increased by only a very moderate
amount.
Deposits held by reporting banks increased about 14
per cent in the year 1936 to an all-time high level. The
rise in time deposits was approximately 3.5 per cent, but
demand deposits were up 19 per cent. Savings deposits
at selected banks in this district in December were about
four per cent larger than a year previous.
THE MONTHLY BUSINESS REVIEW
MANUFACTURING, MINING
The steel industry enters 1937 with order
backlogs the largest in recent history as
a result of the heavy purchasing in early
December following announcements of price advances in
most materials for first quarter.
Ingot production in 1936 is estimated at approximately
47,000,000 gross tons, an increase of 40 per cent over
the 1935 output of 33,900,000 gross tons, and 87 per cent
of the 1929 peak of nearly 55,000,000 tons.
The year 1936 was notable for a decided upturn in pro
duction of heavier steel products. Increased buying by
railroads late in the year and industrial expansion programs
were the two leading factors. Output of sheet, strip, and
other lighter products held at a high rate as a result of
demand from the automobile industry, and, to a lesser
extent, household goods and other light equipment. Re
flecting demand for lighter products, the steel industry
made extensive plans for enlarging its facilities for pro
duction of wide strip and sheets. Three new continuous
mills were put into operation and five more were under
construction at the year end. All these, together with the
mills previously in operation, will result in annual capacity
of more than 12,000,000 tons of this material, compared
with only 6,000,000 tons in 1935.
The biggest problem in the latter part of December was
how to produce the great amount of tonnage, ordered at
the fourth-quarter prices, before the February 1 deadline
set by most producers. The national operating rate increased
to about 80 per cent just prior to Christmas, highest since
the early part of 1930. All local steel centers experienced
gains in December, with the most pronounced increase at
Pittsburgh mills. The rise from November 21 to December
19 was ten points. In response to heavy buying of railroad
steels and some structural materials, steel makers in that
area increased operations to above the national average,
whereas a year ago output was at about 40 per cent.
As production expanded in December, shortages of raw
materials began to develop. Scrap prices advanced swiftly
to an overall average of more than $17; pig iron output
held promise of setting a new December record; and coke
prices were up. Despite the fact that iron ore receipts at
Lake Erie ports in 1936 were 105 per cent larger than in
1935, ore stocks at furnaces and on lower lake docks were
just about equal to last year’s inventories.
Automobile producers made heavy commitments for the
Iron and
Steel
3
early part of 1937. Railroads obtained protection on freight
car materials. The carriers’ purchases of rails in late No
vember and early December were exceptionally large, awards
aggregating 123,000 tons in one week and 409,000 tons in
another. Many mills were completely sold out by the
middle of December and were unable to accept orders as
far as old prices were concerned. The problem of meeting
required deliveries claimed the constant attention of the
entire industry.
Daily output of steel ingots during November was larger
than in any month since September 1929, and the highest
of any November in the history of the industry. Total
calculated production for the month, at 4,337,412 gross
tons, fell short of the 4,545,001 tons made in October
because of two less working days. Total output in November
1935 was 3,150,409 tons. Operations in November were
equivalent to 79.05 per cent of capacity.
Pig iron production registered a small increase in No
vember. At the same time a net gain of four was made
in active blast furnaces, raising the total on November 30
to 165. Average daily production in the month was 98,331
gross tons, which, compared with the rate of 96,509 tons
in October, was an improvement of 1.9 per cent. This
was the highest rate reached since May 1930. The daily
rate in November 1935 was 68,876 tons. For the 11 months
ending December 1, production aggregated 27,557,512 tons,
compared with 18,924,987 tons for the corresponding period
of 1935. The increase amounts to 8,632,525 tons, or 45.6
per cent.
Coal
Daily average bituminous coal production
continued to increase in November and
the first half of December, contrary to
the trend generally displayed at this season of past years.
The moderate, but quite steady gains since mid-1936 put
production in December at the 1929 level and substantially
ahead of 1935; most mines are reported to be operating at
capacity under the 35 hours per week agreement with miners.
While some forward buying of coal is evident, it is not
extensive, according to reports, but there is a very active
demand for immediate shipments of industrial grades and
consumers’ coal stocks on hand are reported to be slightly
larger than a year ago. Coke shortages have caused many
long-idle beehive ovens to be rebuilt; in December over
3,000 were in production, compared with about 400 a
year ago and demand for coke from blast furnaces and
foundries has been unusually heavy; prices also have in
4
THE MONTHLY BUSINESS REVIEW
creased. Mild weather has retarded household coal con
sumption this fall, but prices generally are higher than
a year ago.
Local mines in November produced 16,346,000 tons of
bituminous coal, a gain of 31 per cent over last year and
the largest November output since 1929. The drop in
total production from October was less than seasonal and
in the first 11 months 17.4 per cent more coal was mined
than in the comparable period of 1935.
Automobiles
While automobile production in Novem*
ber was up 75 per cent from October, at
394,890 units, it was slightly under No
vember 1935, according to figures of the Department of
Commerce. Retail demand for cars this fall has been un
precedented for this season of the year, according to dealers,
but assembly plants, in addition to the difficulties encountered
with new models, recently have been confronted with strikes
at parts plants which have interrupted the movement
of materials to assembly points. Sit-down strikes, occurring
in scattered places, have held back several of the major
production lines and the high output looked for by the trade
has not become a reality.
In the first three weeks of December, however, production
gains continued to be reported and in the week ended
December 19 output was estimated by Cram at 121,000 cars
and trucks, a new high weekly record for this year, which
compared with approximately 100,000 units in the same
week of 1935.
Passenger car production in November was 1.3 per cent
ahead of last year, but truck output was down about eight
per cent. Both passenger cars and trucks made in the first
11 months of 1936, at 3,956,000 units, exceeded the same
period of 1935 by more than 11 per cent and that year had
the advantage of two sets of new models. A year ago there
was considerable speculation as to whether the change in
the time of new model introductions would adversely affect
early 1936 operations. While first quarter production was
less than in 1935, unfavorable weather was a factor and in
later months the large increases soon made up the first quar
ter deficiency. The past year has been the best from a produc
tion standpoint since 1929 and United States factory output
has been close to 4,400,000 units. This was about 1,000,000
units below the 1929 peak, but was about on a par with
1928, and a million cars in excess of 1930.
Passenger car sales in major counties of this district
in November were 40 per cent in excess of the cor
responding period of 1935 and approximately the same
increase was experienced in the first 11 months. New truck
sales in this section showed even larger gains.
Rubber,
Consumption of crude rubber by manuTires
facturers in the United States rose to
an all-time high level in 1936, despite
the fact that strikes interrupted plant operations on
numerous occasions during the year. In November, con
sumption exceeded 50,000 tons for the fourth time during
the year and despite increased crude rubber imports, do
mestic inventories, at 212,515 tons on November 30, were
90,000 tons, or 31 per cent smaller than on that date in
1935. Careful supervision of rubber exports from foreign
countries and the decided increase in consumption has
not only improved the statistical position of crude rubber,
but has been accompanied by a marked increase in rubber
prices. Quotations in mid-December were above 20 cents
a pound for the first time since the middle of 1929. A year
ago rubber was 13 cents and at the low point of the de
pression it was under three cents a pound.
Tire production in the first ten months of 1936 (the latest
available) was nearly five per cent in excess of the same
period of 1935, and both replacement and original equipment
tire sales were reported to have been in larger volume than
in 1935. Inventories, which increased in September follow
ing several months of declining stocks, expanded further in
later months despite the fact that automobile assemblies
were stepped up and dealer buying was in excess of current
requirements. In view of the sharp advance in crude rubber
prices and higher wage and operating costs, a further in
crease in tire prices is looked for by the trade. This has
led to more orders in November and December for delivery
next spring than have been received for some time.
Employment at local rubber plants in December was re
ported to be five per cent greater than a year ago and
wages are 11 per cent higher despite the fact that the rubber
industry is definitely launched on a decentralizing program.
The mechanical goods’ and sundries’ divisions of the
rubber industry experienced more improvement in 1936
over 1935 than did the tire branch, judging by final figures
for the first nine months of the year. An important factor
in this connection, however, was the increase in the use
of rubber in mechanical fields. One company alone is re
ported to have added over 600 articles to its mechanical
rubber goods list.
Manufacturers of clothing and textiles
in this district enjoyed an active market
in 1936, and while operations in Decem
ber were not at peak levels because of seasonal conditions,
employment was better than a year ago and considerable ad
vance ordering of spring wearing apparel was evident. Gains
ranged from 10 to 25 per cent over the same period of 1935,
and while prices have been rising in all textile lines, little
forward clothing buying as a hedge against further increases
was reported because of the style factor. Speculative cloth
ing purchases can react disastrously if styles should change
drastically. Manufacturers’ inventories of clothing are re
ported to be small and few end-of-season sales at reduced
prices are anticipated. Some forward buying of materials
for next fall has occurred as a result of advancing textile
prices and reports of wool shortages. Cloth prices have
risen 25 to 45 cents a yard over the opening price for spring
fabrics and additional gains are evident in fall lines. Yard
goods and raw material inventories are larger than in other
recent years.
Clothing sales at fourth district reporting stores were
up 10 to 16 per cent in November, compared with November
1935, and gains approximating that figure were evident
for the entire year. In the latest month sales of women’s
wear were up 10.7 per cent, while a gain of 16.3 per cent
was reported in men’s clothing sales. Retail prices of ap
parel were less than two per cent higher on December 1
than a year ago, according to Fairchild's index, with prices
of men’s clothing showing little change.
Clothing
THE MONTHLY BUSINESS REVIEW
Practically all of the smaller manufacturing lines in this district experienced
marked improvement in 1936, and the
rate of gain was accelerated toward the year end. Opera
tions in many fields have risen to a point where labor
shortages in the skilled classification are holding up further
increases and training of apprentices is becoming a gen
eral practice, the first in a number of years. The supply
of common labor continues to exceed demand. Inventories
have increased by varying amounts in the year, part of
which was necessitated by the greater volume of business,
but forward buying at present prices to forestall higher
material costs which are expected in trade lines to mate
rialize at some future time also is quite prevalent in some
fields.
In the auto parts industries, reports indicate that forward
buying to the extent of nearly six months’ supply has oc
curred in the case of some auto assembly plants, and parts
makers, as a result, have attempted to cover their material
needs at prevailing quotations. Inventories therefore are
higher for this reason and also because assembly plants have
built up a supply of finished parts as a hedge against pos
sible labor disturbances.
Machine tool and foundry equipment manufacturers have
enjoyed the second best year on record so far as orders are
concerned. Dollar sales of the former in the year were at
about the level of 1928 and only 16 per cent under 1929.
Foreign orders increased more, proportionately, than do
mestic purchases, and this fall they have represented more
than 25 per cent of the total volume reported. Extensive
retooling programs and replacement of obsolete equipment
as plant operations have expanded have been evident this
year. Foundry equipment unfilled orders on December 1
were nearly double a year previous and were 200 per cent
of the average of 1922-24. New orders received in No
vember were more than twice as large as in 1935. Small
tool demand has been good during most of the year.
Electrical equipment and apparatus orders in the first
11 months were more than 30 per cent larger than in the
same period of 1935. Raw material inventories in December
were larger than a year ago, but the expansion was reported
to be only enough to handle the increased business. Produc
tion of hardware and small metal products continues at a
high rate and considerable advance buying was evident in
this line in the fourth quarter.
Demand for watches and jewelry by retailers is a good
Other
Manufacturing
indication of improved conditions. They have bought con
siderably more than in any recent year in anticipation of
an active holiday season.
Reports from china and pottery plants indicate that op
erations in November were approximately ten per cent above
last year and about on a par with 1929, but a seasonal
decline occurred in early December. Little forward buying
has occurred as yet, although raw material inventories have
increased. In the glass industry the almost general strike
in December all but stopped production of plate glass.
Only the fact that auto plants had large inventories on
hand prevented a shutdown in the assembly industry. Prior
to the strike the industry enjoyed a marked increase in
production, October output setting a new all-time high
record. Demand for other types of glass also has improved
considerably and inventories are small. Several brick and
tile plants in this section resumed production in 1936 after
being closed for varying lengths of time and employment
increased generally. Sales, however, continued small in
relation to years prior to 1930, because of the relatively
limited amount of new construction. Higher prices of lead
and zinc as well as other raw materials have resulted in
some paint buying for future needs. Plant operations in
1936 were at a high rate generally.
Paper, boxboard, and container manufacturers operated
at 15 to 20 per cent higher levels in 1936 than in 1935,
and large advance orders have been received to cover early
1937 trade requirements, although these do not extend
beyond ninety days. Raw material prices have advanced,
but inventories are reported as “normal.”
Shoe production in 1936 established an all-time record,
judging by figures for the first eleven months which were
6.3 per cent ahead of 1935, the previous record year in
this district as well as in the entire country. Orders received
for spring footwear so far have exceeded last year by about
20 per cent. Leather prices are considerably higher than a
year ago, but shoe prices and wages have changed very
little. November shoe sales at local stores were about
12 per cent larger than in 1935.
TRADE
Based on sales reports for the first 11
months, department stores in this dis
trict have enjoyed the best dollar volume
of sales since 1930, and if allowance is made for the dif
ference in price levels now and six or seven years ago
an even more favorable showing is evident. Current retail
prices, according to Fairchild's index of prices at department
stores, are at about the level of mid-1931 and while they are
approximately three per cent higher than a year ago and
30 per cent above the low of 1933, they are still somewhat
under the level of 1929. The 14 per cent gain at all reporting
stores in 1936 over 1935 was large, especially when it is
remembered that first quarter sales were quite depressed
in this section by adverse weather conditions, floods, etc.
By November the seasonally adjusted index of daily average
sales had risen to 95 per cent of the 1923-25 average, com
pared with 79.5 per cent a year ago, and was higher than
since May 1930.
In November 1936, which had one less business day (a
Saturday) than November last year, total sales were up
14.6 per cent. Considerable variation was evident in the
Retail
THE MONTHLY BUSINESS REVIEW
6
principal cities, gains ranging from 4 to 20 per cent, the
latter being at Pittsburgh. Increases for the 11-month
period were more uniform, being from 12 to 22 per cent.
In the individual departments, larger sales were reported in
all but yard goods, art needlework, and electrical appliances.
Housefurnishing sales showed the largest gains generally,
but fur sales were up over 50 per cent. A marked trend to
higher-priced merchandise has been evident this fall and
sales in basement departments of reporting stores show
smaller increases over last year than do total store sales.
Preliminary reports on December sales indicate that gains
have been experienced over last year, but they were not
as large in the first half of the month as merchants expected
or as they wrere earlier this fall.
Stores continued to add to their inventories in November
at a greater-than-seasonal rate and at the month end dollar
value of stocks was 14.2 per cent larger than a year ago.
The seasonally adjusted index rose over two points to
69.7 per cent of the 1923-25 average, compared with 61 per
cent a year ago and was higher than since December 1931.
The ratio of total sales to average stocks continues higher
than a year ago.
There was a slight decline in the ratio of collections in
November to accounts receivable at the end of the preced
ing month, but this was entirely seasonal and so far as
the year is concerned, further improvement in collections
has been evident. The accompanying chart shows collections
on regular 30-day and installment accounts at fourth dis
trict department stores. The October and November col
lection ratios on regular accounts were higher than in any
year, at least back to 1926. The average for the first 11
months was better than 43 per cent, while in 1932 and
1933 it was about 34 per cent. Little change in collections
on installment accounts, excluding seasonal fluctuations, has
been evident in recent years; they average between 16 and
17 per cent generally and deviated little from that level
even in the most depressed years.
Wholesale
All reporting lines of wholesale trade ex
perienced a seasonal decline in sales in
November, but the percentage increases
over November 1935 in all lines but groceries were larger
than the cumulative gains reported this year. Based on
the first 11 months’ business, grocery sales were up six
per cent over last year; drugs and dry goods were up 13
per cent, and hardware sales 12 per cent. In the closing
DEPARTMENT STORE COLLECTIONS
PER CENT
6 0F
—
50
1
1
1
COLLECTIONS ON REGULAR
30-DAY ACCOUNTS
------------ COLLECTIONS ON INSTALLMENT
* t ' f ' m IM-.-C
40
Vv
30
-'V v
Nj AVf
W'vv
V
w t\
-'■'vr
1 93 4
1935
1936
months of the year demand for goods from wholesalers ex
panded considerably as retail trade increased and depleted
stocks were replenished. Collections also have improved
this year.
CONSTRUCTION
Although the construction industry has shown marked
improvement in the past year in comparison with the period
1932 to 1935, both in this district and the entire country,
conditions are still depressed in relation to years prior to
Ii930 and a large share of the gain in the past year
represents building financed by public funds. District
figures revealing the portion of total construction financed
by public money are not available, but the accompanying
chart shows the share of total contracts awarded in the
past five years in 37 eastern states that are financed by
public and private funds. While considerable variation is
evident from month to month the average for the entire
period shows that 55.5 per cent of total contracts awarded
represented the spending of public funds and 44.5 per cent
privately-financed construction. Despite the use of public
money in such volume building awards in this district in
1936 were only 40 per cent as large as the average of the
eight years ending with 1930, even though they were 41
per cent ahead of 1935. In this connection, however, while
total contracts awarded have declined in recent months,
largely seasonal, the drop was chiefly in publicly-financed
construction. For three consecutive months more than
half of all contracts awarded were backed by private funds,
according to F. W. Dodge reports.
In November, residential construction in the fourth
district was more than 2Yi times as great as in the cor
responding month of 1935, while for the first 11 months
a gain of 60 per cent over last year was reported. Resi
dential contracts awarded in November were also larger
than in October. Nonresidential building in the latest
month and the year to date showed gains over 1935, with
commercial and factory construction recording the great
est improvement for the longer period. Public utility
construction in the first 11 months was 80 per cent ahead
of the same interval of 1935, but heavy public works
were down about 25 per cent. Total contracts awarded
in November were 47.5 per cent larger than last year and
at $226,460,000 in the first 11 months, they were 41 per
cent greater than in the same period of 1935.
In the building supply field, cement production was up
THE MONTHLY BUSINESS REVIEW
43.2 per cent in 1936 and demand for all materials increased.
Distributors' inventories are larger than a year ago, but
lumber supplies at production points are down. Prices
have advanced recently.
AGRICULTURE
The December check of 1936 crops harvested con
firmed earlier reports of heavy losses from drought and
low yields generally, but from a value standpoint the low
yields have been more than offset by higher average
prices than since 1929.
In states of this federal reserve district, a smaller acreage
was harvested in 1936 than in 1935, but rather sharp
increases in farm value of products was evident, except
in West Virginia, where a decline occurred. In addition
receipts from sale of farm products were larger because
of higher prices, and rural conditions are much improved
locally over other recent years.
Tobacco
The 1936 tobacco selling season opened in
Lexington on December 7 and at other
points the following day and although
growers generally were counting on higher prices than a
year ago, activity on warehouse floors and prices received
exceeded most expectations, By the end of the second week
the daily average price at Lexington had risen to
51 cents a pound, the highest daily average price
received since 1919 and the average for the first
two weeks of the selling season was 41.2 cents a pound. Last
year the average price was under 20 cents a pound. While
the supply of burley tobacco is small, that offered for sale
so far has been of better quality than was generally expected.
Bidding on various auction markets for all grades from
the commonest to the best was sharp and all crops were
bringing nearly double last year’s prices.
Fourth District Business Statistics
(000 omitted)
Nov. % change Jan.-Nov.
1936 from 1935
1936
24
$2,349,000 +14.5324,783,000
1
40
728,470 + 4.2
70,410 — 4 .2
805,678
52
21,602 + 1 4 .6
202,470
13
1,028 + 1 2 .5
9,354
.....
42
942 + 15.7
10,529
11
1,556 + 14.0
16,064
10
1,501 + 1 9 .3
14,000
30
4,029 + 4 .7
45,171
13
1,769 + 2 3 .0
15,343
21,034 + 4 7 .5
226,460
7,851 + 1 5 7 .7
70,042
1,309 + 4 7 .4
10,574
6272
502 — 28.6
Iron
2,950 + 4 2 .7
27,559
Ingot
4,337 + 3 7 .7
42,488
341,4562 + 1.3 3,250,0442
Passenger Car—
53,4342 — 8.1
705,7902
W. Pa.,
16,346 + 3 1 .3
152,744
W. Pa., W. Va..
1,210 + 7 6 . 6
9,880
1,621 + 1 5 .2
14,591
2,3923 + 9.5
19,7144
5
5
+ 16.2
Fourth District Unless
Otherwise Specified
Bank Debits—
cities.........
Savings Deposits— End of M onth:
banks, O. and W . Pa
............3
Life Insurance Sales:
Ohio and P a ........................... ........... 3
Retail Sales:
Dept. Stores—
firms. . . . ............3
Wearing Apparel—
firms
$
Furniture—
firms.............. ............3
Wholesale Sales:
Drugs—
firms..................... ............3
Dry Goods—
firms......... ............3
Groceries—
firms............... ............3
Hardware—
firms............. ............3
Building Contracts— Total
............3
— Residential. . . $
Commercial Failures— Liabilities.. .3
“
— Numb er..........
Production:
Pig
— U. S.......................
Steel
— U. S................
Auto—
U. S.
Auto— Trucks— U. S............
E.
Bituminous Coal, O.,
K y ...............................................
Cement— O.,
.bbls.
Elec. Power, O., Pa., K y. thous.
. k.w.h.
Petroleum— O., Pa., Ky.
bbls.
Shoes ..........................................
Tires, U. S................................ . casings
Bituminous Coal Shipments:
L.
Ports..............................
Iron Ore Receipts:
L. E. Ports..............................
1 not available
2 actual number
E.
5,648 + 2 1 .4
3,014 + 1 0 4 .8
4
5
3 October
Ian.-Oct.
confidential
44,922
31,312
% change
from
1935
+ 17.3
— 6.3
+ 1 3 .9
+ 8.2
+ 2 8 .2
+ 1 2 .9
+ 1 2 .7
+ 6.1
+ 1 1 .8
+ 4 1 .1
+ 6 0 .4
— 25.2
— 24.5
+ 4 5 .6
+ 4 0 .0
+ 1 1 .7
+ 1 1 .5
+ 1 7 .4
+ 4 3 .2
+ 1 4 .4
— 6.5
+ 6.3
+ 2 6 .3
+ 5 7 .4
Debits to Individual Accounts
Akron..............
Butler..............
Canton............
Cleveland . . . .
Wholesale and Retail Trade
(1936 compared with 1935)
Percentage
Increase or decrease
STOCKS
SALES
SALES
November
First 11
November
1936
1936
months
D E P A R T M E N T STORES (52)
+ 9.7
+ 2 9 .1
Akron............................................................... + 1 3 .1
+ 13.7
+ 10.4
+ 8.7
Cincinnati......................................................
+ 17.8
+ 14.6
Cleveland.......................................................
+ 1 6 .2
+ 5.4
+ 8.5
+ 12.5
Columbus.......................................................
+ 11.1
+ 1 6 .2
+ 2 0 .0
Pittsburgh.....................................................
+ 13.4
+ 1 0 .3
Toledo.............................................................. + 3.9
+ 11.9
+ 14.1
+ 11.4
Wheeling........................................................
+ 17.2
+ 1 9 .8
Youngstown.................................................. + 1 9 .1
+ 16.9
+ 15.0
Other Cities.................................................
+ 1 8 .5
+ 14.2
+ 1 4 .6
+ 1 3 .9
District...........................................................
W EA R IN G APPARE L (13)
+ 5.2
+ 7.2
+ 1.2
Cincinnati......................................................
+ 1 0 .7
+ 1 2 .4
Cleveland....................................................... + 2 1 .1
+ 8.8
+ 8.7
+ 9 .7
Pittsburgh.....................................................
+ 1 2 .8
+ 1 1 .1
+ 1 1 .0
Other Cities.................................................
+ 9.2
+ 8.2
District............................................................ + 12.5
F U R N IT U R E (42)
+ 2 5 .6
Cincinnati...................................................... — 0 .3
+ 2 7 .4
Cleveland....................................................... + 1 8 .8
+ 2 2 .1
Columbus....................................................... + 1 0 .8
+ 3 1 .8
D ay ton ............................................................ + 4 1 .5
+ 2 9 .7
+
5.6
Toledo.............................................................
+ 3 3 .5
+ 1 4 .9
Other Cities.................................................
+
1
5
.7
+
2 8 .2
District............................................................
CHAIN STORES*
+
1
4 .0
Drugs— District (4).................................
+ 0 .5
+ 2.7
0 .0
Groceries— District (5)..........................
W HOLESALE GROCERIES (30)
+ 6 .2
Akron............................................................... + 1 3 .5
+ 3.1
Cleveland....................................................... + 9.3
+ 6.1
Erie................................................................... + 5.4
+ 0 .3
Pittsburgh..................................................... — 10.9
+ 3.4
+ 5.2
Toledo.............................................................
+ 9 .6
+ 3.1
Other Cities.................................................
+ 1 3 .1
+ 6.1
+ 4 .7
District...........................................................
+ 1 2 .4
+ 12.7
+ 1 9 .3
WHOLESALE D R Y GOODS (1 0 )....
+ 1 2 .9
+ 1 4 .0
WHOLESALE DRUGS (11)...................
+ 1 1 .8
W HOLESALE H A R D W A R E (13). . .
+ 2 3 .0
*per individual unit operated.
7
Greensburg. .
Homestead.. .
Middletown . .
Oil C ity...........
Pittsburgh . . .
Springfield . . . .
Steubenville, . ,
Toledo...............
Warren..............
Youngstown. .
Zanesville
5 weeks
ended
Dec. 23,
1936
3 83,609
12,593
46,345
444,733
792,831
248,211
81,520
36,429
5,061
7,965
14,787
3,767
36,335
17,243
5,886
12,471
13,645
1,052,085
21,132
13,114
179,029
12,808
46,898
56,431
9,596
33,254,524
(Thousands
%
change
from
1935
+ 34 4
+ 3 0 .5
+ 17.4
+ 2 5 .2
+ 3 2 .8
+ 3 3 .5
+ 3 8 .7
+ 4 4 .4
+ 4 0 .6
+ 19.7
+ 37.5
+ 35.9
+ 15.7
+ 30.6
+ 4 3 .2
+ 20.6
+ 26. 1
+ 25.1
+ 24.8
+ 4 8 .7
+ 4 0 .4
+ 4 5 .4
+ 4 2 .7
+ 2 3 .4
+ 22.0
+ 2 9 .3
of Dollars)
Year to date Year to date
Jan. 1, 1936 Jan. 2, 1935
to
to
Dec. 23, 1936 Dec. 24, 1935
3720,313
3594,034
104,336
85,231
403,680
351,490
3,910,066
3,307,283
6,684,450
5,448,760
2,082,349
1,806,148
744,204
574,044
312,040
250,050
41,140
33,377
78,896
63,089
131,738
103,209
31,900
25,684
234,284
231,999
1 38,5 3 4108,711
49 34-7
39,229
108*22 5
88,517
119,116
103,992
8,41 ',336
7,391,777
188,149
164,690
104,203
80,811
1,096,673
1,421,615
80,052
101,580
384,827
332,719
537,417
445,669
87,470
76,123
327,135,215 322,883,361
%
change
from
1935
+ 2 1 .3
+ 2 2 .4
+ 14.8
+ 18.2
+ 2 2 .7
+ 15.3
+ 2 9 .6
+ 2 4 .8
+ 2 3 .3
+ 2 5 .1
+ 2 7 .6
+ 2 4 .2
+ 1.0
+ 2 7 .4
+ 2 5 .8
+ 2 2 .3
+ 1 4 .5
+ 13.8
+ 14.2
+ 2 8 .9
+ 2 9 .6
+ 2 6 .9
+ 1 5 .7
+ 2 0 .6
+ 14.9
+ 1 8 .6
Fourth District Business Indexes
(1923-25 = 100)
Bank Debits (24 cities)....................................
Commercial Failures (Num ber)....................
“
“
(Liabilities).................
Sales— Life Insurance (O. & P a.)...................
“
Department Stores (50 f ir m s)....
“
Wholesale Drugs (10 firms).............
“
“
Dry Goods (10 firms). .
“
“
Groceries (30 firm s)...
“
“
Hardware (13 firms)...
All (63 firms)...................
“
Chain Drugs (4 firms)**...................
Building Contracts ( T o t a l ) .. . ........................
“
“ (Residential)...................
Production— Coal (O., W. Pa., E. Ky.). . .
“
Cement (O., W. Pa., E. K y .).
“
Elec. Power (O., Pa., Ky.)*. .
“
Petroleum (O., Pa., Ky.)*. . .
“
Shoes................................................
*October
**Per Individual unit operated.
Nov. Nov. Nov. Nov. Nov.
1936 1935 1934 1933 1932
87
76
63
52
49
34
48
60
57 134
30
20
67
50 111
84
88
86
89
93
100
83
75
67
59
105
93
82
75
72
61
51
47
43
36
74
71
67
56
52
93
75
63
57
45
79
71
65
56
51
92
91
74
67
67
44
30
20
35
29
46
18
9
9
10
90
69
65
66
64
57
33
20
63
101
193 168 144 137 124
125 118 114 109 101
81
70
54
49
48
THE MONTHLY BUSINESS REVIEW
8
Summary of National Business Conditions
By the Board of Governors of the Federal Reserve System
Production, wage payments, and the distribution of commodities to con
sumers increased considerably from October to November. Wholesale com
modity prices have advanced steadily since the end of October.
Production and Employment
Index of physical volume of production,
adjusted for seasonal variation, 1923-25 =
100. By months, January 1929 to Novem
ber 1936, the latest figure being 114 pre
liminary
Indexes of value of sales, 1923-25 average
= 100. By months, January 1929 to N o
vember 1936, the latest figure adjusted 93,
unadjusted 104.
W H O LESALE
P R IC E S
]
1
Distribution
{
!
1
.. i. Other
X ^ C o m r n o d i ties
\
iF o o d s
A
r~
1
'
j
—
—
yi
i V 'A I
Farm Products ..
—
J
1
!
The Board’s index of industrial production, which makes allowance for
changes in the number of working days in the month and for the usual seasonal
variations, was 114 per cent of the 1923-25 average in November, as compared
with 109 per cent in October. Output of both durable and nondurable manu
factures showed a considerable rise. Production of steel ingots increased fur
ther to a rate of 79 per cent of capacity in November, and output of automo
biles also increased. Figures for the first three, weeks of December indicate
continued expansion in output of both steel and automobiles. In the plate glass
industry, where there has been a strike, production was sharply reduced in No
vember, and activity at lumber mills declined, reflecting the effects of the mari
time shipping strike on the Pacific coast.
Increases in output were reported at meat packing establishments and textile
mills, and sugar meltings and output of tobacco products declined by less than
the usual seasonal amount. At mines, coal production increased and output of
crude petroleum and iron ore showed a smaller than seasonal reduction.
Value of construction contracts awarded, according to F. W. Dodge Cor
poration figures, continued at about the same rate in November as in October.
Factory employment showed little change from October to November, al
though a decrease is usual at this season of the year, and the Board’s seasonally
adjusted index advanced to 96 per cent of the 1923-25 average. The number
employed at factories producing durable goods continued to increase, with the
largest expansion in the automobile and machinery industries. There was a
decline in employment at lumber mills and in the glass industry. In the non
durable goods industries as a group employment showed a smaller decline than
is usual in November. At shoe factories and establishments producing wearing
apparel smaller than seasonal declines were reported and there were increases
in employment at cotton and woolen textile mills and at meat packing plants.
1
*
_____i _ ____
Indexes compiled by the United States Bu
reau of Labor Statistics, 1926 = 100. By
months 1929 to 1931; by weeks 1932 to
date. Latest figures are for week ending
December 19.
Department store sales increased substantially in November, and there was
also a rise in sales at variety stores and at chain grocery stores. Sales by gen
eral merchandise stores and mail order houses serving rural areas declined from
the high level reported for October.
Freight-car loadings showed a smaller than seasonal decrease in November.
Commodity Prices
The general level of wholesale commodity prices continued to advance
from the middle of November to the third week of December. There were sub
stantial increases in the prices of wheat, flour, nonferrous metals, and rubber.
Prices of wool, cotton yarns, and worsted yarns advanced somewhat further
and cotton, pig iron, and steel scrap prices also increased in this period.
Bank Credit
Wednesday figures for reporting member
banks in 101 leading cities, September 5,
1934 to December 16, 1936. J oans on real
estate, loans to banks am’ acceptances
and commercial paper bough a included in
total loans and investments, but not shown
separately.
The reserve position of member banks in recent weeks has been influenced
largely by temporary seasonal developments in connection with holiday currency
requirements and mid-December financing by the United States Treasury.
Notwithstanding the increased demand for currency for Christmas shop
ping, there was a further growth in demand deposits at weekly reporting mem
ber banks through the first half of December, reflecting additions to monetary
gold stock, as well as a sharp increase in bank loans.
At reporting banks outside New York City holdings of Government
securities increased by $140,000,000 in the four weeks ending December 16,
while at New York City banks they showed a further small decline. There
was an increase of $100,000,000 in loans to brokers and dealers in securities in
New York City, largely for the purpose of buying United States Government
securities. Commercial loans showed a further increase of $150,000,000, carrying the total volume of such loans to a level $800,000,000 higher than a year ago.
@FedFRASER