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 agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 15 Cleveland, Ohio, February 1, 1933 The w eeks im m ediately precedin g and fo llo w in g the H olid ay season usually are so replete w ith irregu larities that no m arked trend in general business activity is d is cernible in recent weeks. Despite the low level of current op erations, the period just passed was little different in this re spect from m ore norm al years. On account o f inventory tak ing, year-end adjustm ents, sales, etc., produ ction in m any industries dropped sharply in the last w eek o f D ecem ber and the first few days o f the new year, but operations w ere resum ed in m any cases so that by the third w eek o f January the general level o f business, in this district and the entire coun try, was still con sid erably above the low point tou ched in m id-sum m er o f 1932. The ch ief sustaining elem ent precedin g and fo llo w in g the turn o f the year, particu larly in this district, was the au tom obile industry, w hich was engaged in new m odel production. As a result, steel operation s averaged h igh er in this section than in the entire cou n try fo r the m onth en din g w ith the th ird w eek o f January, and at the close o f the period Cleveland m ills w ere p rodu cin g at 41 per cent o f capacity, w ith oth er loca l centers, exclu din g P itts burgh , operatin g at a rate equal to or better than the 18 per cent reported fo r the entire country. In dustrial em ploym ent in Ohio was u nchanged in D e cem ber from the precedin g m onth and in w estern Pen n sylvania there was an increase in the num ber o f h ours w orked. In the first three w eeks o f January there was an increase in em ploym ent in som e sections, particu larly w here au tom obile supplies are m ade. A t 51 iden tica l T o ledo factories the num ber o f em ployees was h igh er than fo r tw o years. L ife insurance sales in D ecem ber in Ohio and Penn sylvania w ere dow n 35 per cent from the same m onth a year earlier, w hereas the redu ction in the entire year was on ly 24 per cent. P ostal receipts at nine cities in the district w ere off 12 per cent in D ecem ber from a year ago. B u ild in g activity con tracted sharply in D ecem ber in this district, aw ards am oun ting to on ly sligh tly over h a lf the v olu m e reported in N ovem ber and they w ere 64 per cent below D ecem ber, 1931. R esiden tial bu ildin g was off 75 per cent in D ecem ber from a year previous and dow n 66 per cent in the entire 'year. A ll oth er types o f buildin g, except pu blic u tilities, show ed sizeable reductions, both from N ovem ber and a year ago, A No. 2 fu rther declin e in bu ild in g aw ards was in dicated in the reports coverin g the first tw o w eeks o f 1933. R etail trade in D ecem ber was dow n 27 per cent in dollar volum e from the same m onth o f 1931 and the reduction in the en tire year was 26.6 per cent. Coal p rodu ction slackened in the first part o f Janu ary, partly on accou n t o f reduced h ou seh old dem and brou gh t on by m od erate w eather. O utput o f fou rth dis trict m ines in D ecem ber was 2.5 per cent greater than in the closin g m onth o f 1931. O perations at loca l tire factories increased in the first part o f January— en tirely a seasonal expansion in an ticipation o f dealers addin g to th eir stocks p rior to the sp rin g season. V ery little bu ying u nder the sp rin g -d at in g plan was don e in the closin g m onths o f 1932. M ost cloth in g fa ctories w ere operating at capacity levels in early January on orders fo r spring delivery. The season started m uch later than usual. R eopen in g o f the tob a cco au ction floors in early Janu ary was accom panied by h igh er prices than prevailed at the begin ning o f the sellin g season. Sales have been in g ood v olu m e and prices are n early 50 per cent high er than the average price received fo r the 1931 crop. FINANCIAL Changes in the condition o f this bank in the month ended January 25 w ere la rg ely seasonal in ch a ra cter; the dow nw ard trend o f loans and the ten den cy o f reportin g m em ber banks in lea din g cities to increase th eir h o ld ings o f G overnm ent secu rities continu ed over the year end. D em and deposits w ere reduced in m id-January, but tim e deposits show ed little change in the entire pe riod. There was an increase in the num ber o f bank sus pensions in this district (a s w ell as in oth er sections o f the country) in January. F or the month up to the 29th there w ere eight suspensions, seven sm all n on-m em ber state banks and one n ational bank. In D ecem ber there w ere on ly tw o bank suspensions in the fou rth district. The num ber o f com m ercial failu res in D ecem ber was about the sam e as in N ovem ber, bu t was dow n sharply from a year ago, there bein g on ly 197 in th e m on th com pared w ith 262 in D ecem ber, 1931. L ia bilities, how ever, w ere up qu ite sh arply com pared w ith both periods. Check tran saction s in creased in volu m e by m ore than % TH E M ONTHLY BUSINESS R E V IE W the usual seasonal am ount over the year end, debits to in dividu al accounts at banks in 24 principal cities being dow n 30 per cent in the fo u r w eeks ended January 18 from the sam e period a year previous, com pared w ith a drop o f 35 per cent in the entire year. Savings deposits at selected banks increased 0.6 per cent in D ecem ber in O hio, but w ere sligh tly reduced at banks in w estern P ennsylvania. A t the begin ning o f 1933 savings deposits w ere 7.8 per cent sm aller than a y e a r earlier at these banks. A t the F ederal R eserve Bank o f Cleveland the only change o f particu lar significance in the fou r w eeks ended January 18 was the sligh t redu ction in h oldin gs o f G ov ernm ent securities. A fter rem ainin g p ractically stable in the last h alf o f 1932, at the record level o f $178 ,0 00 ,000, h oldin gs w ere reduced $8,000,000 in the tw o w eeks prior to January 18. The volu m e o f G overnm ent secu ri ties at oth er reserve banks was likew ise reduced during this period, but the effect o f this con tra ction on m em ber bank reserves m ore than offset the reduction in note circu lation and increased g old h oldin gs so that excess reserves o f these banks remain close to $600,000,000, the bulk o f w hich are centered at New York and Chicago. Bills discounted fo r m em ber banks w ere sligh tly low er on the latest date than in m id-D ecem ber and w ere sm aller by $1 00 ,000,000 than a year ago. Loans o f $24,706,000 w ere extended to 221 banks on January 18, w h ere as 266 banks w ere borrow in g the la rg er am ount a year ago. The v olu m e o f acceptances held contracted m oderately in early January as m atu ring bills w ere n ot replaced in the b a n k ’s p ortfolio. D espite the sm all v olu m e o f dis coun ts and acceptances, the total am ount o f credit this bank had extended on January 18, at $1 98,024,000, was on ly sligh tly sm aller than the am ount outstanding a year ago, the total being bu oyed by the large h oldin gs o f G overnm ent securities. C irculation o f F ederal reserve notes, w hich increased by less than the usual seasonal am oun t prior to the H o li days, declin ed a fter the turn o f the year, the reduction from D ecem ber 21 to January 18 being over $10,000,000. This was som ew hat sm aller than the return flow o f cu r ren cy in preceding years, but circu lation on January 18, at $2 78 ,3 76 ,0 00 , was $3 0,00 0,00 0 low er than a year ago, th ou gh still about $1 00 ,000,000 high er than at the b egin n in g o f 19 31. M em ber bank reserve deposits increased sligh tly in the fo u r latest weeks. A t reportin g m em ber banks in leading cities, the v o l ume o f credit extended declin ed over the year end, total loans and investm ents on January 18, at $1 ,874 ,0 00 ,0 00 , com pa rin g w ith $1 ,895 ,0 00 ,0 00 on D ecem ber 21. The redu ction in loans secured by stocks and bonds am ounted to $1 1,00 0,00 0, or 2.2 per cent, whereas the contraction in “ all o th e r” loans in the fo u r w eeks was $8,000,000, or 1.3 per cent. These ban k s’ h oldings o f oth er than G overnm ent securities dropped $6,000,000 in the fou r w eeks to $318,000,000 on the latest date. This com pared w ith $3 54 ,000,000 a year ago. P art o f the r e d u c tion in the fou r latest w eeks was offset by increased h oldin gs o f G overnm ent secu rities o f $4,000,000. On Janu ary 18 reportin g banks had $1 10 ,0 00 ,0 00 m ore o f G overnm ent securities in th eir p ortfolios than on the same date in 1932, an in crease o f 28 per cent. Dem and deposits at these banks in creased sligh tly over the year end, but a rath er sharp redu ction in the w eek ended January 18 reduced these deposits to a low er level than in m id-D ecem ber. Com pared w ith a year ago de mand deposits are dow n tw o per cent. Tim e deposits increased sharply in the first w eek o f January, bu t sur rendered som e o f the gain in the fo llo w in g period. On the latest date tim e deposits w ere h igh er than in D e cem ber, th ou gh five per cent b elow early January, 1932. Y ear-end con d ition figures o f all m em ber banks in this district have just becom e available. Total credit ex tended on December 31 was 7.8 per cent low er than a year earlier and 2.7 per cent below the am oun t ou t standing on Septem ber 30. L oans on secu rities w ere down 17 per cent in 1932 and “ all oth er” loans 14 per cent. Investm ents w ere up 4.5 per cent, h oldin gs o f G o v e r n m ent secu rities bein g up 21 per cen t and “ all o th e r” in vestm ents dow n ten per cent. Demand deposits were down 10.3 per cent in the past year and time deposits 6.7 per cent in the same period. In the last quarter, a slight decrease in both types o f deposits was shown, but the reduction was less than the drop in credit extended in the period. The fo llo w in g table show s the principal resou rces and liabilities o f all m em ber banks in this d istrict on d esig nated dates: All Member Banks—Fourth District (In Millions of Dollars) Loans on securities........................................ All other loans............................................... Investments— U. S. securities...................... ” All other securities................ Total investments.......................................... Total loans, discounts and investments Demand deposits........................................... Time deposits................................................. Number of Banks.......................................... ♦Figures subject to revision Dec. 31, 1932* $ 605 930 1,535 591 515 1,106 2,641 993 1,244 Sept. 30 1932 % 644 949 1,593 591 531 1,122 2,715 1,007 1,269 630 634 Dec. 31 1931 $ 731 1,076 1,807 489 569 1,058 2,865 1,107 1,334 655 MANUFACTURING, MINING Iron and Steel F rom the m iddle o f D ecem ber to the third w eek in January, iron and steel p roduction fo llo w e d the seasonal pat tern quite closely, alth ough on a low er scale. F o r the coun try as a w hole, p roduction dipped from an operating rate o f 14 per cent in the m iddle o f D ecem ber to sligh tly below 12 per cent over the Christm as w eek-end, then re bou n ded to 18 per cent by the third w eek o f the new year. In the F ou rth D istrict, the steel rate at C leveland in the sam e period declined from 29 per cent to 17 and ad vanced to 41. O perations at Pittsburgh m ills eased from 17 per cent to 1 0 % , on ly to snap back to 14. Y ou n gs tow n m ills m aintained a 14 per cent rate during the last h a lf o f D ecem ber and im proved to 19 per cent by Janu ary 14 on ly to recede sligh tly in the third w eek. D uring the Christm as w eek-end, because o f the dras tic shutdow ns, the national steel rate u ndercut even the 12 per cent low o f the depression w hich was registered in the week o f July 4, 1932. But December as a whole recorded a steel operating average o f 15.02 per cent, TH E M ONTHLY BUSINESS R E V IE W fraction ally a b ove the all tim e low o f 14.26 per cent last A ugust. Chiefly as a resu lt o f releases from the autom otive in dustry and an accum ulation o f rail orders, steel m ills at Cleveland have operated at a con sisten tly h igh er rate than was reported fo r the en tire coun try, being tw ice the average m ost o f the tim e. Y ou n gstow n m ills have been h old in g several points above the national average, w ith the P ittsbu rgh d istrict about on a parity w ith it. A u tom otiv e consum ers have been the largest in dividu al buyers o f steel fo r 60 days, w h ich accoun ts fo r the rela tively better position o f the fou rth district. The lack o f railroad business, w h ich is tem pering the general rise usually occu rrin g at this season, bears hardest upon tha C hicago steel producers. In the m iddle o f January, a ccord in g to the trade, the ou tlook fo r the con tin u ation o f the early January rise was g ood . P rod u cers w ere confident that they w ere in au gurating a period o f recovery, alth ough recogn izin g that im provem en t w ou ld be quite slow and perhaps halting. W ith in ven tory-tak in g past, a num ber o f users w ere free again to take in m aterials. Tin plate m ills w ere operat in g at an average o f 50 per cent by m id-January, revea l ing a better con dition in the food -p a ck in g industry than had been in dicated previously. In m id-January, scrap prices d eveloped som e signs o f strength, fo r the first tim e since O ctober. W ith the ex ception o f sheets, w hich w ere gen erally reduced $4 per ton, finished steel prices w^ere h oldin g, as w ere quotations on pig iron. The m ovem en t o f the iron and steel com posite o f the m agazine S teel was from $28.91 in the w eek ended D ecem ber 17 to $28.55 in the w eek ended January 21, the adju stm ent bein g entirely due to this w eakness in sheets. F in al statistics on 1932 cok e pig iron p rodu ction put the year at 8,674,067 gross tons, com pared w ith 18 ,263 ,011 tons in 1931. The 1932 ou tpu t o f open-hearth and bessem er in gots was 13,095,727 gross tons, contrasted w ith 25,192,715 tons in 1931. Last year was a 19.4 per cent steel year, com pared w ith 38.1 fo r 19 31. A t the close o f D ecem ber on ly 42 blast furnaces, or 12.5 per cent o f capacity, w ere active. The all-tim e low poin t was 41 active stacks on A u gust 31. In the first h a lf o f Janu ary tw o m erchant and one steel stacks resum ed p rodu c tion. Coal P rodu ction o f bitu m in ou s coal at fou rth d istrict m ines declin ed sligh tly from N ovem ber to D ecem ber, th ou gh output in the latest period, at 11,288,000 tons, was 2.5 per cent la rger than in D ecem ber, 1931. The N ovem ber-D ecem ber declin e w as a trifle sm aller than occu rred last year at that tim e, but was som ew hat greater than the average change o f precedin g years and was in conflict w ith the in crease reported in the entire coun try. C onsiderable im provem en t occu rred in coal produ c tion in the closin g m onths o f 1932, but output fo r the en tire year at m ines in this section w as 24 per cent b e low 1931. In the closin g w eek o f D ecem ber a rather sharp con tra ction occu rred in coal p rodu ction and in the first two weeks of January output was below a the correspon din g periods o f 1932. M uch o f the recent declin e was due to the v ery m od era te w eather fo r this season o f the year w hich affected h ou seh old dem and, but takings o f steam coal con tin u e at v ery low levels and have show n little change in recen t w eeks. Coal prices early in the new year declin ed som ew hat, both on dom estic and steam sizes and con dition s in the industry, in the m in in g as w ell as the distribu tin g fields, continu e u n favorable. A u tom obiles The au tom obile in du stry proved to be the ch ief su pport to m any m anu fac tu ring plants in this district, and p a r ticu larly to the steel industry, in D ecem ber and the first part o f January. Output o f passenger cars and trucks in the closin g m on th o f the year was 107,403 units, al m ost dou ble the num ber m ade in N ovem ber and on ly 11.6 per cent below ou tpu t in D ecem ber, 1931. The N ovem ber-D ecem ber in crease was con tra ry to the seasonal trend o f past years and the B oa rd ’s ad ju sted in dex rose to 60 per cent o f the 1923-1925 m on th ly average from 31 in N ovem ber. This reversal o f the usual seasonal trend was n ot due to any appreciable change in the retail dem and fo r cars w hich dropped to new low levels in N ovem ber and in creased on ly sligh tly in D ecem ber, but w as caused by new m odel p rodu ction , m anu factu rers tu rnin g ou t enough cars to fu rn ish dealers w ith sam ples prior to the annual show s w hich started early in January. W ith this task com pleted, p rodu ction was cu rtailed in January, the A nnalist's adju sted w eek ly index droppin g to 42 per cent by the third week o f the month pend in g a m ore definite in dication as to w hat the m ark et pos sibilities m igh t be. A tten dan ce at the w in ter show s was v ery en cou ra gin g and it is certain that m any cars are being driven w hich sh ou ld be replaced. P rices are low er than ever b efore, but the general lack o f pu rch asing pow er and confidence are tw o factors w hich tend to retard com m itm ents. Output in several lines was quite w ell m aintained, h ow ever, and the g radu al expansion o f F o r d ’ s 1933 program accoun ted fo r m uch o f the increased activitiy in th e steel industry in m id-January. As in earlier m onths o f 1932, the com m ercial branch o f the in du stry m ade a m ore fav orable sh ow in g in D e cem ber than did the passenger car branch. O utput was on ly ten per cent below the sam e m on th o f 1931 and the B oa rd ’s a d ju sted index was 89 per cent o f the 19231925 m on th ly average. In the entire year ou tpu t was dow n 43 per cent, com pared w ith a 42 per cent reduc tion in passenger car produ ction , but operations in the tru ck in du stry did n ot fa ll below the low poin t o f 1921, w hereas passenger car produ ction was low er than since 1918. Style changes and new m odel in trod u ction s do n ot affect the com m ercial branch o f the in du stry to any extent. T ires, R u b b er The tire industry o f this d istrict was operatin g at a sligh tly h igh er rate in the first h alf o f January than in the tw o closin g m onths o f 1932 when ou tpu t was very lim 4 T H E M ONTHLY BUSINESS R E V IE W ited. In N ovem ber, the latest m onth fo r w hich com plete data are available, p rodu ction was low er than fo r any m on th since 1921, but the declin e from the correspon din g m on th o f the preceding year w as eigh t per cent, a ccord in g to figures supplied by the R ubber M anufacturers' A sso ciation. This redu ction was sm aller than the cum ulative declin e o f 17 per cent show n fo r the eleven-m onth period. The expansion in operations in the first part o f J a n u ary was en tirely o f a seasonal nature, and, th erefore, in dicated no change in the trend o f tire production. F a c tories w ere in creasin g their in ven tories in an ticipation o f the usual dealer stock in g-u p, but, on the basis o f current dem and, stocks now are large. As was pointed ou t last m on th there has been very little bu ying under the springdating plan. In ad dition to the reasons previously given fo r the lack o f such buying, the gradual taking over o f tire sales by oil com panies (w h ich buy on ly fo r curren t n eeds) at the expense o f the in depen den t tire dealer, is a factor. The tire in du stry is very m uch affected by the declin e in this y ea r’s a u tom obile registrations, estim ates o f w hich range from 1,000,000 to 2,000,000 cars. R eplacem en t tires sales are the m ost profitable to tire com panies, and w ith such a sharp redu ction in cars in operation and a declin e in gasolin e consum ption , a fu rther contraction in tire p rodu ction is look ed fo r by the trade. D ecem ber crude rubber consum ption was 16,990 long tons, com pared w ith 21,910 tons in N ovem ber and 21,409 tons in D ecem ber, 1931. C onsum ption in the entire year was 313,122 tons, a redu ction o f ten per cen t from 1931. This was low er than since 1923 and fo r the first year since the w ar there w as less rubber taken by dom es tic factories than in the rest o f the w orld. Consum p tion o f ru bber by plants in foreig n countries increased in 1932. Im ports o f cru de rubber in D ecem ber w ere up 5.5 per cen t from N ovem ber, bu t w ere dow n 45.0 per cent from D ecem ber, 1931. As the year ended stock s w ere 20.3 per cent h igh er than on the corresp on d in g date o f 1931. E m ploym en t at Ohio rubber factories increased one per cent in D ecem ber, but was on ly 59 per cent o f the 1926 m on th ly average and in the en tire year averaged eight per cent below 1931. C loth in g It is rather difficu lt to appraise ac cu rately con dition s in the cloth in g in dustry in this district because o f the m any distu rb in g elem ents, such as price differences, changes in buying m ethods, etc. P rodu ction o f spring good s was started very late, but it accelerated som ew hat in th e first part o f January. In that period m ost com panies w ere operatin g at capacity levels, though som e d if ficulty in obtain in g d elivery o f m aterials was reported. In part this was due to the m ethod in w hich m aterial orders now are placed. Instead o f ord erin g w oolen s ten o r tw elve w eeks ahead as was custom ary tw o or three years ago, cloth in g m akers now ask fo r d elivery in tw o or th ree w eeks, or less. Ju d g in g by em p loym ent figures o f the O hio State Bu reau o f Business R esearch, operations at cloth in g factories in D ecem ber w ere better than a year earlier, fo r the em ploym en t index was up fo u r per cent, and the one per cent declin e from N ovem ber was less than the average fa llin g-off in that period o f the preceding five years. C om pared w ith the m on th ly average o f 1926, the num ber em ployed by the 42 rep ortin g m anu factu rers was dow n 12 per cent in D ecem ber. The dollar volu m e o f retail sales continu es very m uch below other years and collection s are n ot very favorable. G enerally, h ow ever, retailers seem to be bu ying a little m ore freely o f the spring lines than fo r som e tim e. O ther M an ufacturin g In the m iscellaneou s industries o f the district little change oth er than sea sonal occu rred in the last part o f D e cem ber or the first h alf o f January. M ost com panies by the third w eek o f the new year had resum ed operations, a fter H olid ay shutdow ns, at rates w hich in dicated that som e o f the gains experienced last fall had not been su r rendered by the w eakness in D ecem ber. The au tom obile parts and accessory industry continu ed to operate at a better rate in D ecem ber than w as experi enced in earlier m onths o f 1932, th ou gh both em p loy m ent and prod u ction w ere con siderably below the level o f precedin g years. A t 40 factories in O hio, D ecem ber em ploym ent was 58 per cent o f the 1926 m on th ly a v er age, an in crease o f fou r per cent from N ovem ber. A c cord in g to reports, a fu rth er slight expansion was ex perien ced in the first part o f January, but this tapered off as n ew -m odel produ ction slackened at som e fa ctories. O perations at oth er plants en gaged in the prod u ction o f m etal produ cts receded, em p loym en t bein g dow n five per cent from .Novem ber to D ecem ber in con trast with a five-year average declin e o f one per cent in that pe riod. In the first tw o w eeks o f 1933 a fa llin g -o ff in sales was reported g en erally in m achinery, electrical equ ip m ent, sm all tools, etc. E arly January, h ow ever, is a pe riod in w h ich little activity is ever expected. So fa r as the paint in du stry is con cern ed little o c curred in the fo u r w eeks ended w ith m id-January to alter the trend display fo r som e tim e. This is the d u ll period o f the year and th ou gh a fa irly large num ber o f orders have been received, the quantities purchased w ere ex trem ely sm all. In dustrial and m aintenance paint sales continu e in on ly lim ited am ounts. A sligh t in crease in paper and boxboa rd sales was reported in the first hail: o f January from the low level o f D ecem ber. D em and continu es light, h ow ever, com p etition is keen and the in dustry is con siderably ov erprodu ced. Interest in the china and glass in du stry in early Janu ary was centered on the annual show at Pittsbu rgh. A t tendance was g ood , and it was reported that bu yin g was better in the open in g days o f the exhibit than a year ago. P rices on the new offerings w ere about ten per cent low er than at the 1932 show . E m ploym en t in the en tire ceram ic in du stry was up th ree per cent in D ecem ber w ith glass m akers reportin g an in crease o f 12 per cent and china and p ottery plants ten per cent. This was offset by r e du ction s at b rick and tile plants. P late glass p rodu ction expanded in the closin g m onths o f 1932, chiefly as a result o f increased orders from a u to m obile m anu factu rers, but this is the dull season o f the year fo r the glass con tain er industry. The accom panyin g chart show s m on th ly prod u ction o f plate glass as reported TH E M ONTHLY BUSINESS R E V IE W by tlie Plate Glass M anufacturers of A m erica, and repre sents practically the entire industry, and production of glass containers, as reported by the Glass Container A ssocia tion , representing about 83 per cent of the industry. The declin e in plate glass p rodu ction from the peak in 1929 has been m uch sharper than in glass con tain er p rod u c tion. M onthly average plate glass p rodu ction in 1929 was 12,542,000 square feet. In the first ten m onths o f 1932 average p rodu ction w as 4,140,000 square feet, a decline o f 67 per cent. The red u ction in glass contain er ou tpu t in the sam e period was 28 per cent. The re la tively greater fa llin g -off in plate glass produ ction was due to the sharp con tra ction in the a u tom obile and con stru ction industries in the past three years. D ecem ber shoe prod u ction at 30 establishm ents in the fou rth district was 2.4 per cent greater than in N ovem ber. The in crease was m uch sm aller than occu rred ax that season o f 1931 or 1930, but was in contrast w ith reductions reported in the three years 1927-29. C om pared w ith a year ago, D ecem ber p rodu ction was dow n 15.8 per cent, w hereas the declin e in ou tpu t in the year 19 32 from 1931 w as on ly 2.8 per cent. In terest in early January was centered on the n ational convention and, as in past years, the period preceding this m eeting experi enced a postpon em en t o f buying. The dollar value o f shoe sales at fou rth district departm en t stores in D e cem ber was dow n 22 per cent in the case o f w om en ’s and ch ild ren ’s shoes, and 15 per cent in the case o f m en's and b oy s’ shoes. TRADE R eta il The dollar volu m e o f departm ent store sales in this d istrict increased by less than the usual am ount in D ecem ber and w as 27 per cent below the correspon din g period o f 1931. In the first h a lf o f the m onth pre-Christm as bu y in g la gged, bu t a spurt in sales in the w eek im m ediately precedin g the H olid ay in creased the total fo r the m onth so that the percen tage decline from the closin g period o f the p recedin g year was approxim ately the same as the fa llin g-off in sales in the entire year w hen they w ere dow n 26.6 per cent. The seasonally ad ju sted in dex o f d olla r sales in this district receded to 53.8 per cent o f the 1923-1925 m onthly average in D ecem ber, but even at that level it was above S the low point tou ched in A ugust. In D ecem ber, 1931, the index o f sales was 73. Th ough d olla r volu m e w as very depressed in all sec tions o f the district because o f the drop in prices and the fa ct that b u yin g in m any cases was don e in price classes below those in w h ich it had been custom ary to pur chase in precedin g years, the num ber o f transactions held up quite w ell, a ccord in g to reports. Christm as bu yin g this past season apparently was con fined to the m ore practical articles, fo r sales in the in dividu al departm ents such as w oolen dress goods, shoes, underw ear, n egligees, dom estics, m en ’s fu rn ish in gs and house furnishings showed sm aller declines in dollar vol um e than the fa llin g -off in total sales. Less bu yin g was d on e on credit in D ecem ber than in either N ovem ber or D ecem ber, 1931, the ratio o f cred it to total sales being 51 per cent com pared w ith 56.1 in N o vem ber and 52.3 in the closin g period o f 1931. The dolla r volu m e o f stock s (valu ed at retail p rices) de clin ed by sligh tly m ore than the usual seasonal am ount in D ecem ber and at the end o f the year, a fter allow in g fo r seasonal variations, was only 54 per cent o f the 19231925 m on th ly average. C ollection s declin ed sligh tly, only 31.6 per cent o f a c counts ou tstan din g at the end o f N ovem ber being paid du rin g D ecem ber, com pa red w ith a collection ratio o f 32.8 per cent a year earlier. Sales at 46 rep ortin g fu rn itu re stores w ere 37 per cent sm aller in D ecem ber than a year previous and w ere dow n 39 per cent in the tw elve-m on th period. Sales o f w ear ing apparel stores w ere dow n 30 per cent in both D ecem ber and the en tire year from sim ilar periods o f 1931. Chain g rocery sales, per in dividu al unit operated, made a v ery fav orable sh ow in g in D ecem ber, bein g up 11 per cent from N ovem ber and only tw o per cent below D ecem ber, 1931. F o r the year, sales w ere dow n eight per cent, w hich Is less than the average declin e in fo o d prices. D ecem ber chain dru g sales w ere 12 per cent below the closin g m onth o f 1931, and in the year wrere dow n 13 per cent. Compared w ith the base (m onthly average of the three years 1923-1925), sales in 1932 were down ap proxim ately 25 per cent. W h olesa le A ll lines o f reportin g w holesale trade except drugs declin ed in D ecem ber, the fo u r per cent reduction in all sales b e ing greater than was reported in 1931 or 1930, but less than the fa llin g -off in preceding years. D olla r sales o f 71 firms w ere on ly 48 per cent o f the 1923-1925 m onthly average, a reduction o f about 23 per cent from D ecem ber, 1931. Com pared w ith the sam e periods o f the p recedin g year, dollar w holesale g ro ce ry sales w^ere dow n 23 per cent in D ecem ber and 22 per cent in the year. In the individu al cities declin es ranged from 17 per cent in Erie, P en nsyl vania, to 25 per cent in A k ron fo r the entire year. Stocks w ere dow n 17 per cen t in value in the past year. A c counts receivable w ere ten per cent sm aller than at the end o f 1931 D ry g ood s sales show ed the m ost pron ou n ced loss from 1931, being dow n 33 per cent in D ecem ber and 35 per cent in the tw elve-m on th period. H ardw are sales w ere . 6 TH E M ONTH LY BUSINESS R E V IE W reduced by 25 per cent in volu m e in both D ecem ber and the en tire year. D ru g sales increased 14 per cent in the closin g m onth o f 1932 from N ovem ber, a seasonal change, and am ounted to 80 per cent o f the 1923-1925 m on th ly average, w hich, h ow ever, was eight per cent below D ecem ber, 1931. In the entire year w h olesale drug sales w ere 15.9 per cent below the volu m e reported in 1931. AGRICULTURE A g ricu ltu ra l con dition s con tin u e very u n fa vorab le and eviden ce fo r 1932 show s that the situation grew progres sively w orse as tim e advanced. This was chiefly due to the dow nw ard trend o f prices and the large stocks o f principal a gricu ltu ral products. There was a sligh t in crease in prices o f farm produ cts last sum m er, but sub sequent declines wiped out the gain and, as 1933 began, farm prices w ere on ly abou t h a lf the pre-w ar average, w hereas the price o f g ood s b ou g h t by farm ers was still sligh tly above the pre-w ar average, so that the ratio o f prices received to prices paid fo r g ood s was on ly on e-half. F arm g ood s are n ot being sold in any am ounts because o f the low prices and la rg e stock s; in D ecem ber, gross in com e o f O hio farm s, a ccord in g to the D epartm ent o f R u ral E con om ics, w as 33 per cent below the same m onth o f 1931 and w as on ly 37 per cent o f the five-year aver age, 1924 -192 8. R eg ard in g the p ossib ilities fo r the com in g crop season, the prelim inary rep ort on con dition and area o f w inter w heat sow n show s th at in the entire cou n try there w as a declin e o f 1.3 per cen t in acreage. This w as the third successive redu ction and the acreage sow n this year is the sm allest since 1923. In the fou rth district, particu la rly O hio, acreage planted last fa ll w as considerably la rg er than w as sow n in 1931 fo r h arvest in 1932, but it w as still below the five-year average 19 24-1928. The con d ition o f the crop on D ecem ber 1 in this dis trict w as abou t equal to the ten-year average con dition o f 19 20-1929, bu t w as som ew h at below the D ecem ber 1 con d ition last year. This w as quite fa v ora b le w hen com pared w ith the con d ition reported fo r the en tire country w hich was the low est on record back to 1863. On D e cem ber 1 it w as 69 per cent o f norm al, com pared w ith a ten -year average con d ition o f 83 per cent. A ccord in g to the D epartm ent o f A g ricu ltu re, “ In the past, con dition s below average on D ecem ber 1 have been follow ed by m ore than average abandonm ent, and below average yields per a cre ." COST O F L IV IN G In view o f the sharp con tra ction in w ages and in com es w hich has accom panied the general indu strial depression o f the past three years, the d eclin e in liv in g costs, par ticu larly in 1931 and 1932, has, in som e m easure offset de clining incomes. There is, however, considerable variation in the exten t o f the declin e in the past three years in the variou s item s com posin g an average budget, as is show n by the accom panyin g table. The U nited States Bureau o f L ab or Statistics collects cost o f liv in g in form a tion sem iannually fo r 32 m a jor cities in the United States. D ata fo r C leveland are avail able back to 1914, but figures fo r Cincinnati and P itts bu rgh are on ly available since 1917. As an in dication o f the cost o f liv in g in the fou rth district, figures fo r these th ree m a jo r cities have been com bined, and changes over the entire period are show n on the accom panyin g chart. D ecem ber, 1917 was taken as 100, since that was the first year fo r w hich in form a tion fo r all three cities was available. E stim ates fo r P ittsb u rgh and C incinnati w ere m ade fo r years precedin g 1917 from the relationsh ip ex istin g betw een Cleveland figures and th ose o f the oth er tw o cities fo r the years fo llo w in g 1917. E x clu din g the w ar and post-w ar inflation years, cost o f livin g in these three cities tou ch ed its peak in D ecem ber, 1925, declin ed very g ra d u a lly in the fo u r fo llo w in g years and then dropped sharply in 1930, 1931 and 1932. In general, the cost o f liv in g is sligh tly h igh er in Cleve land than in th e other tw o cities and is low er in Cincinnati than in Pittsbu rgh. R elative changes, h ow ever, in the th ree centers show little v ariation from year to year. Cost o f liv in g in these cities at the end o f 1932 was 95.2 per cent o f the 1917 average, a red u ction o f 22.5 per cen t in the past three years and 35.5 per cent from the peak in June, 1920. D eflation in liv in g costs is som ew h at slow er than de clines in w h olesale prices because o f the lag betw een the redu ction in w holesale and retail costs and also because m any so-called fixed charges such as rents are carried over from preceding periods. The fa ll in w h olesale prices in the past th ree years has been ab ou t 35 per cent. D eclines in the various com pon en ts o f this in dex vary w idely. P o o d costs, w hich represent abou t 38 per cent o f an average fa m ily ’ s expenses, are now lo w e r than at any tim e in the p eriod covered by the index. The red u c tion since D ecem ber, 1929, has been about 40 per cent. The cost o f cloth in g also has dropped sharply, and at the close o f 1932 w as 22.7 per cent low er than in 1929 and low er than since 1916. R en ts dropped quite sharply in the past year, being 23 per cent low er in D ecem ber, 1932, than in 1929, but still 20 per cent above the 1917 base. R en ts are low er than since 1919. F u el and lig h t costs have declin ed on ly about five per cent in the past th ree years and are still 79 per cen t above the base period. The redu ction from the peak in 1926 was close to six per cent. H ou se fu rn ish in gs costs at the end o f 1932 w ere 27 per cent low er than in 1929, and w ere low er than since 1916. TH E M ONTHLY BUSINESS R E V IE W M iscellaneous livin g expenses, w hich in clu de p rofes sional fees, carfare, telephon e, tob acco, toilet articles, laundry and am usem ent costs, have changed on ly sligh tly in the past th ree years, the redu ction being abou t three per cent. These expenses, w hich represent about 20 per cent o f a fa m ily ’s liv in g expenditures, are still n early 50 per cent above the 1917 base period. Index of the Cost of Living Cleveland-Pittsburgh-Cincinnati Compiled from data supplied by the Bureau of Labor Statistics December, 1917 = 100 -ri J3 Date December, 1914 1915 1916 1917 1918 June, 1919 December, 1919 June, 1920 December, 1920 May, 1921 December, 1921 June, 1922 December, 1922 June, 1923 December, 1923 June, 1921 December, 1924 June, 1925 December, 1925 June, 1926 December, 1926 June, 1927 December, 1927 June, 1928 December, 1928 June, 1929 December, 1929 June, 1930 December, 1930 1931 June, December, 1931 June, 1932 December, 1932 65.7 66.6 83.0 100.0 116.8 116.9 124.3 139.0 112.6 90.9 92.5 88.7 91.8 92.4 94.8 90.4 94.7 99.5 104.2 103.0 103.9 102.5 100.3 97.8 99.6 100.2 100.3 95.1 87.5 75.5 71.4 63.0 60.3 91.4 91.5 92.3 65.2 66.6 76,9 100.0 100.0 136.9 150.1 185.2 195.5 175.7 151.9 122.3 114.1 112.5 115.7 116.4 114.7 104.2 107.9 118.0 126.9 140.6 150.7 148.9 146.7 149.4 152.4 155.6 160.3 160.9 161.7 161.6 161.5 161.8 160.7 160.6 158.4 157.6 156.2 155.5 153.3 152.0 146.5 141.0 128.9 111.0 110.6 109.7 108.5 107.0 106.5 105.1 105.2 104.0 103.7 103.1 102.3 97.7 90.6 86.5 83.1 79.7 3.SP tSfS 61.8 64.7 74.0 100.0 113.0 110.5 116.4 136.2 150.6 141.7 156.4 153.8 168.1 172.9 174.9 168.5 176.4 181.6 190.8 185.7 196.3 187.9 187.8 184.3 185.2 183.9 188.1 184.6 187.0 181.9 184.4 179.5 179.6 62.6 65.5 74.9 Pi U 120.2 100.0 129.6 137.1 164.6 182.2 177.4 152.0 129.9 121.0 127.0 136.3 136.8 133.2 132.5 131.5 131.2 127.5 126.7 125.4 124.1 120.0 119.7 118.9 118.4 117.4 111.3 103.7 98.5 90.0 86.4 £ 68.7 69.7 81.8 100.0 117.9 120.3 132.9 147.1 154.5 153.9 150.5 144.9 144.0 144.2 145.2 147.0 149.1 150.1 148.2 148.3 148.6 149.1 149.1 149.7 149.9 150.1 150.5 152.4 151.3 150.5 149.7 148.6 146.3 h 68.9 69.9 62.1 100.0 119.0 122.3 136.7 147.7 139.7 126.9 121.1 116.2 118.3 120.2 122.1 120.6 122.4 124.8 126.5 125.4 126.0 124.9 123.8 122.2 Fourth District Business Statistics (000 omitted) Dec., % change Year, % change Fourth District Unless 1932 from 1931 Otherwise Specified 1932 >m 1931 frc — 30.2 19,060,000 — 35.0 Bank Debits— 24 cities................SI,572,000 Savings Deposits— end of month: — 7.6 643,4491 — 13.1 27 selected banks, O. & Pa....... $ 636,830 6 — 12.3 2,921 Postal Receipts (9 cities).......... $ Life Insurance Sales: 76,448 — 34.8 951,743 — 24.2 Ohio and Pa............................... $ Retail Sales: Department Stores— 54 firms...$ 21,629 — 26.7 170,405 — 26.6 949 — 30.4 9,376 — 29.6 Wearing Apparel— 12 firms....... $ 5,382 — 38.8 482 — 36.9 Furniture— 46 firms................... 3 Wholesale Sales: — 8.0 14,185 1,231 — 15.1 Drugs— 13 firms......................... $ — 33.3 10,114 — 35.4 Dry Goods— 11 firms................. $ 826 — 21.8 2,981 — 23.0 39,581 Groceries— 34 firms.................... $ 10,369 — 25.9 727 — 24.6 Hardware— 15 firms................... $ — 66.3 737 — 75.3 22,355 Building Contracts— Residential.? — 53.9 5,108 — 64.0 127,084 ” ” — Total..........$ 8,239 + 37.7 85,511 + 0.3 Commercial Failures— Liabilities $ 1972 2.8932 ” ” — Num ber... — 24.8 + 2 1 .9 Production: — 52.5 — 44.3 8,674 Pig Iron, U. S....................... Tons 546 13,096 — 48.0 Steel Ingots, U. S............... Tons 845 — 35.0 1,135,5412 — 42.4 — 11.9 Automobiles— Pass. Cars. . .U. S. 86,1993 235,1872 —43.6 ” — T r u c k s ...... U. S. 21,2042 — 10.3 113,823 — 24.0 11,288 + 2.5 Bituminous Coal..................Tons 6,599 — 39.8 + 5 1 .2 638 Cement— O., W. Pa., W. Va. Bbls. 10,9684 — 11.6 Elec. Power— O., Pa., Ky. k.w.h. 1,0043 — 10.6 — 13.2 21,472* + 0.2 Petroleum— O., Pa., K y ... Bbls. 1,8003 5 3 — 15.8 — 2.8 Shoes ................................ Pairs 1,8493 — 8.0 30,586* — 17.3 Bituminous Coal Shipments: — 19.8 Lake Erie Ports...................Tons 25,173 Iron Ore Receipts: 2,707 — 81.7 Lake Erie Ports..................Tons .... *Jan.-Nov. 1monthly average 3actual number Confidential 3November 6not available Dehits to Individual Accounts 4 weeks ending Jan. 18, 1933 . . , 41,301 5,631 15,640 . , 218,628 122.8 122.7 122.8 120.4 116.0 108.5 105.1 98.1 95.2 Wholesale and Retail Trade Erie................. . . . Greensburg. . , Homestead.. . . .. , (1932 compared with 1931) DEPARTM ENT STORES (54) Akron..................................................... Cincinnati............................................... Cleveland................................................ Columbus........................ ...................... Pittsburgh........................................... Toledo..................................................... Wheeling................................................. Other Cities........................................... District.................................................... WEARING APPAREL (12) Cincinnati............................................... Other Cities........................................... District.................................................... FURNITURE (46) Cincinnati............ ........... .................... Cleveland................................................ Columbus................................................ Dayton............... .................................... Toledo....................................... .......... .. Other Cities............................ .............. District......................................... CHAIN STORES* Drugs— District (4) Groceries— District (5 )......................... WHOLESALE GROCERIES (34) Akron............................ .................... Cleveland........................................... Erie.............................................. . Pittsburgh........... ........... .................. Toledo..................................................... Other Cities........................................... District.................................................. WHOLESALE DRY GOODS (11)... WHOLESALE DRUGS (13).......... . WHOLESALE HARDWARE (1 5 )... ♦Per individual unit operated. Percentage Increase or Decrease SALES SALES STOCKS Dec., Dec., Year, 1932 1932 1932 — 24.8 — 25.0 — 23.9 — 24.5 — 28.9 — 28.4 — 22.8 — 31.5 — 26.7 — 24.2 — 24.0 — 25.5 — 22.3 — 29.7 — 23.8 — 28.3 — 28.3 — 26.6 — 5.8 — 29.3 — 31.4 — 21.3 — 20.3 — 16.3 — 20.9 — 18.1 — 22.5 — 26.3 — 32.5 — 30.4 — 26.1 — 31.5 — 29.6 — 28.4 — 32.2 — 30.8 — 31.4 — 36.6 — 21.8 — 31.0 — 46.4 —48.5 — 36.9 — 40.0 — 45.8 — 30.8 — 23:8 — 30.7 ' —37.4 — 38.8 — 12.2 — 2.2 — 13.3 — 8.1 — 26.9 — 24.9 — 16.5 — 13.5 — 30.5 — 19.7 — 23.0 — 33.3 — 8.0 — 24.6 — 25.2 — 22.3 — 17.8 — 20.6 — 22.6 — 21.1 — 21.8 — 35.4 — 15.1 — 25.9 — 16.7 — 18.5 7 Middletown.. . Oil City.......... Pittsburgh. . . , Steubenville. . , Youngstown. . , 41,601 17,059 1,907 4,106 6,178 1,511 21,776 2,573 4,810 7,559 9,676 4,126 66,249 3,534 25,788 19,631 4,659 % change from 1932 — 33.3 — 18.4 — 17.2 — 23.8 — 34.5 — 28.0 — 15.5 — 30.0 — 49.5 — 46.9 — 25.6 — 37.4 — 19.0 + 0 .0 2 — 24.9 — 13.2 — 18.6 — 30.6 — 33.1 — 31.7 — 22.2 — 18.7 — 19.9 — 45.4 — 35.2 — 29.6 Year Year Dec. 31,1931 Jan. 1 to Dec. 30, to 1931 Dec. 28, 1932 581,595 938,109 104,532 73,177 213,168 391,869 3,93 8,092 2,860,324 7,779,468 4,852,456 1,782,061 1,132,185 518,480 860,584 244,487 374,004 31,872 45,075 62,463 104,303 90,885 130,842 26,693 45,688 £33,581 186,037 123,004 96,189 35,492 57,836 67,791 101,986 105,088 146,447 5,963,887 9,057,111 137,480 208,264 60,774 99,089 885,886 1,487,429 54,074 94,393 314,906 437,560 313,590 560,068 67,347 103,120 18,976,326 29,204,515 Crf VO change from 1932 — 38.0 — 30.0 — 45.6 — 27.4 — 37.6 — 36.5 — 39.8 — 34.6 — 29.3 — 40.1 — 30.5 — 41.6 — 20.4 — 21.8 — 38.6 — 33.5 — 28.2 — 34.2 — 34.0 — 38.7 — 40.4 — 42.7 — 28.0 —44.0 — 34.7 — 35.0 Fourth District Business Indexes (1923-1925 = 100) Bank Debit# (24 cities)..................................... Commercial Failures (Number)...................... ” _ ** (Liabilities)........... . Postal Receipts (9 cities). . . . — .................... Sales—-Life Insurance (Ohio & P a.)............. — Department Stores (55 firms) .............. ’> — Wholesale Drugs (13 firms). . . , ........ ” Dry Goods (10 firms) ” -— ” Groceries (34 firms). . . . . . . ” ” Hardware (14 firms). . . . . . ” — ” Ail (71)....................... . ” — Chain Drug (3 firms)**.................... Building Contracts (Total)........................... ” (Residential)..................... Production— Coal (O., W. Pa., E. K y .).......... --Cement (O., W. Pa., W. V a.).. »» — Elec. Power (O., Pa., K y .)* .. . . »* — Petroleum (O., Pa., K y.)*.......... ” — Shoes............................................ ♦November. **Per individual unit operated. Dec., Dec., Dec., Dec., Dec., 1932 1931 1930 1929 1928 83 124 134 149 58 180 143 135 96 92 187 136 185 102 32 145 113 128 143 148 91 140 126 150 142 91 123 149 175 174 80 83 101 111 138 67 30 88 46 82 51 67 80 91 89 47 64 81 82 34 62 78 48 90 94 79 90 97 98 104 11 30 35 51 67 17 58 4 29 33 62 61 84 96 89 53 35 64 78 86 120 134 144 156 149 97 112 125 106 102 76 49 59 82 44 8 TH E M ONTHLY BUSINESS R E V IE W Summary of National Business Conditions By the Federal Reserve Board V olu m e o f in dustrial production declin ed in D ecem ber by sligh tly less than the usual seasonal am ount, w hile fa ctory em ploym ent and payrolls show ed a decrease som ew hat la rg er than is usual at this season. The gen eral level o f w holesale com m od ity prices, a fter d eclin in g in D ecem ber, show ed relatively little change in the first h a lf o f January. Production and Employment Index of industrial production, adjusted for seasonal variation, (1923-1925 average = 100) Latest figure, December 66. In D ecem ber the B o a rd ’s seasonally ad ju sted in dex o f in du strial ou t put show ed an increase from 65 per cent o f the 1923-1925 average to 66 per cent, the level prevailin g in Septem ber and O ctober. There was a sub stantial increase in ou tpu t o f au tom obiles in con n ection w ith the in tro d u ction o f new m odels, and lu m ber p rodu ction show ed a less-than-seasonal decline. In the textile industries there w ere decreases in ou tpu t in a ccord ance w ith the usual seasonal tendency. A ctivity at steel m ills sh ow ed a substantial declin e in D ecem ber, follow ed by a seasonal increase in the first three w eeks o f January. V olum e o f em ploym ent in m anu factu ring industries decreased from the m iddle o f N ovem ber to the m iddle o f D ecem ber by som ew hat m ore than the usual seasonal am ount. W ork in g forces w ere redu ced in the cloth in g, leather and bu ildin g m aterial industries, w hile at the a u tom obile factories there was a substantial increase in em ploym ent. V alue o f construction contracts aw arded, as reported by the F. W . D odge C orporation, declin ed by m ore than the usual seasonal am ount in the fou rth quarter, fo llo w in g a non-seasonal increase in the third quarter. Contracts aw arded in the first h a lf o f January show ed an increase, as m easured by daily average figures, reflecting the aw ard o f la rge contracts in conn ection w ith con stru ction o f a bridge at New Orleans. Distribution Index of United States Bureau of Labor Sta tistics (1926 = 100) Latest figure, December, 62 6 .. F reigh t traffic decreased in D ecem ber by an am oun t som ew hat sm aller than is usual at this season. Sales by departm ent stores increased by som e w hat less than the usual seasonal am ount and w ere sm aller than a year ago by 23 per cent, reflectin g in part a declin e in prices. Foreign Trade V alu e o f exports in D ecem ber w as sm aller than in D ecem ber, 1931, by abou t on e-fou rth . F o r the year as a w h ole the declin e was about on e-th ird, reflectin g decreases ranging, in the first eleven m onths, from eight per cent fo r cru de m aterials to 45 per cent fo r finished m anufactures. V alue o f im ports in to this cou n try du rin g 1932 was sm aller than in 1931 by 37 per cent. Wholesale Prices Monthly averages of weekly figures for report ing member banks in leading cities. Latest figures are averages of first two weeks in January. Monthly averages o f daily figures. Late«t figures are averages of first 19 days in January, W h olesa le prices o f m any leadin g com m odities, in clu d in g n on a gricu ltural as w ell as agricu ltu ral products, declin ed from N ovem ber to D ecem ber, and the m on th ly in dex o f the Bureau o f L ab or Statistics sh ow ed a de crease from 63.9 per cent o f the 1926 average to 62.6 per cent, as com w ith 68.6 per cent a year ago. In the first h a lf o f January, w heat prices advanced from the low levels reached at the end o f D ecem ber and cotton prices also increased som ew hat, w hile prices o f silk, rubber and gasolin e declin ed considerably. Bank Credit In the fo u r w eeks from D ecem ber 21 to January 18, the stock o f m on e tary g old increased by $80,000,000 and there w as a seasonal declin e o f $130,000,000 in the v olu m e o f m on ey in circu la tion — a con siderably sm aller de clin e than usual, reflectin g a sm aller than usual increase fo r the H olid ay trade in D ecem ber and som e w ith draw al o f funds accom pan yin g bank sus pensions in the m iddle o f January. The reserve funds arising from these two sources were absorbed in part by a reduction o f member bank borrow ings at the Federal reserve banks and through a decline o f $73,000,000 between January 4 and January 18 in the reserve b a n k s’ h old in gs o f United States G overnm ent securities. M em ber bank reserve balances, h ow ever, increased fu rth er du ring the fou r-w eek period by about $1 00 ,000,000 to a level o f $5 75,000,000 h igh er than a year ago. Excess reserves o f m em ber banks, w hich have been in substantial v olu m e fo r several m onths, also in creased du ring the period. V olu m e o f m em ber bank cred it continu ed to declin e du ring D ecem ber and the first part o f January. F rom the m iddle o f D ecem ber to January 11, total loans and investm ents o f rep ortin g m em ber banks in lea din g cities declin ed by $1 65 ,0 00 ,0 00 , to a lev el a b ou t $3 50 ,0 00 ,0 00 above the low point o f last sum m er. The declin e w as en tirely in the ba n k s’ loans, w h ile in vest’ ments showed relatively little change. M oney rates in the open m arket con tinued at low levels.
@FedFRASER