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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 8 Cleveland, Ohio, January 1, 1926 No* 1 As the year closes, prosperity is present in most lines of industry. Without doubt, one of the most important phases of the situation is the absence of any marked rise in commodity prices, such as has frequently occurred in “ boom” periods of the past* The increased earnings shown by nearly all large industrial corporations during 1925 have in many cases been due to a large volume of business, done on a com paratively narrow margin of profit and -without violent price fluctuations except in a few cases, such as rubber. The stability of prices and the lack of unhealthy specula tive tendencies in most of the commodity markets are among the most favorable elements in the present business situation, while the possibility of overproduction in cer tain lines and, in the opinion of some, of too great an extension of "deferred payment” credits may be men tioned as potentially unfavorable factors. Federal R eserve B ank o f Cleveland F ederal R eserve System (In M illion s) (In M illions) Dec. 9, Dec. 10, N ov. 10, D ec. 9, Dec. 10, N ov. 10, 1925 1924 1925 1925 1924 1925 Gold reserves .... $278 $295 $2,722 $2,997 $2,779 Discounts ............. ...... 87 43 78 679 254 565 A cceptances .......... 33 8 12 370 353 353 l T. S. Securities ........ 30 57 31 352 552 334 Total bills and securities ........... ...... 127 133 121 1,412 1,167 1,260 Federal R eserve notes in circulation . 225 1,766 1,711 210 1,854 T otal D eposits ..... 188 176 2,315 2,259 2,289 In the Fourth District, iron and steel operations con tinued to increase during the past month. A seasonal quieting down took place in the wholesale trades and in certain lines of manufacture, such as clothing. Build ing operations in November fell slightly below a year ago, but the first eleven months of 1925 were still 20 per cent ahead of the same period of 1924. Operations in truck and auto parts factories continued at a high level. The soft coal industry has shown distinct improvement in recent months, the anthracite strike being responsible in large measure. Iron and Steel Savings deposits of sixty-eight selected banks in the larger cities of the Fourtli Federal Reserve District amounted to $854,963,968 on November 30, an in crease of 1.1 per cent over October 31 and of 7 per cent over November 30, 1924. Commercial failures in this District, according to R. G. Dun and Company, numbered 165 in November, as com pared with 167 in October, and 133 in November, 1924. Liabilities aggregated $3,428,114, as against $2,441,042 a year ago. In the United States, there were 1,672 failures in November, 1,581 in October, and 1,653 in November, 1924. The following table gives the changes in the main items o f the balance sheets of the Federal Reserve and reporting member banks: Financial Conditions R ep ortin g M em ber B anks— R e p o rtin g M em ber Banks— F ou rth D istrict System (In M illion s) (In M illion s) D ec. 2 , D ec. 3, N ov. 4, D ec. 2, Dec. 3, N o v . 4, 1924 1925 1925 1925 1924 1925 Loans secured by stocks and bonds.... $497 A ll other ........... ....... 785 T otal loans ......... Investm ents ......... ...... 634 Dem and deposits ........1,013 T im e deposits .... ....... 752 $416 742 1,157 681 1,031 696 $503 794 1,297 632 1,015 758 $5,416 8.590 14,006 5,393 13,100 5,348 $4,522 8,393 12,915 5,611 13,212 4,826 $5,392 8,635 14,027 5,462 13,220 5,348 Steel ingot production in 1925 was ahead o f any previous year. The iron and steel industry continues to operate at a high rate of capacity, and the out look appears bright. The mills have in hand a sufficient accumulation of orders which, taken with the consistently good rate of current buying, insures a continuation of present activities through the next three months. Current consumption, according to all indications, is very large and stocks of material in consumers’ hands are relatively light. While the tonnage demand has been record-breaking, it has not included a representative or normal amount of railroad buying which traditionally has been the chief olement of support o f the steel industry. At this time the railroads are buying on an increasing scale and con sidering their strong financial positions and the demands of traffic, it is thought in iron and steel circles that rail road requirements next year may tend to be materially greater than in 1925. Production of steel in 1925 reached approximately 45,500,000 gross tons, or the highest peak in history. This exceeds the previous high mark of 45,060,607 gross tons made in the stimulated war period o f 1917. Production in December was running at the rate o f approximately 50,000,000 gross tons per annum, or the greatest on record for that period of the year. Pig iron output in 1925 failed to establish a new peak and was approxi mately 36,530,000 gross tons. While this is 16.3 per cent 2 THE M O N T H L Y BUSINESS above 1924, it w as exceeded by 1916, 1917, 1918, and 1923. L arge stocks o f iron on hand a year ago, plus the heavy use o f scrap in steelm aking, explain w hy p ig iron production failed to keep pace w ith that o f steel. P ig iron production o f coke iron in N ovem ber, as com piled by IR O N T R A D E R E V IE W , increased 3.3 per cent over D e cem ber and was on the annual basis o f 36,700,000 gross tons. The num ber o f fu rn aces in blast at the close o f the month w as 220, a gain o f 11, representing 57.2 per cent o f the total o f the country. A month previously it was 54.1 per cent. The price situation has reflected the conservative atti tude generally o f both buyers and sellers o f iron and steel, as w ell as the cou n try ’s large productive capacity. This elem ent o f conservatism is looked upon as a w hole some fa c to r w hich is holding down speculative buying and prom ises to contribute to the prolon gation o f the present broad m arket. IRO N T R A D E R E V IE W com posite o f fou rteen leading iron and steel products late in Decem ber stood at $39.10. One year ago it w as $40.14 and the average fo r all Decem ber, 1924, was $40,21. In the face o f its present record-breakin g production, the industry, th erefore, is on a low er price basis than a year ago. A m oderate rise o f the m arket has been discernible fo r the past nine weeks, in which period the com posite has gone fr o m $37.43 to its present level. This represents an advance o f only about 4.5 per cent. Coal A v era ge daily production o f sort coal during N ovem ber continued to show an upw ard trend, but there w as a notice able drop during the w eek ending D ecem ber 5. This was due in part to an easing o f demand w ith a consequent sagg in g o f prices. The C O A L AG E average price o f bitum inous coal, after risin g from $2.19 per ton on N ovem ber 6 to $2.32 on N ovem ber 27, fe ll to $2.26 on D ecem ber 4. R eports indicate that O ctober and N ovem ber were easily the tw o best m onths o f this year, as fa r as bituminous operators are concerned, and th at the general situation is now better than fo r a considerable tim e past. It should be rem em bered, how ever, that part o f this im provem ent is due to the use o f hard coal substitutes, as a result o f the anthracite strike. Productive capa city o f soft coal is still in excess o f norm al consum ptive needs. In 1924, bitum inous mines in the country w ere w orked only be tween 150 and 200 days on the average. In Ohio, the average w as only 143; in Pennsylvania, so ft coal mines w ere w orked on an average o f 180 days, while the figure fo r hard coal mines w as 274. A ccord in g to the G E O L O G IC A L S U R V E Y , there were 7,586 producing bitum inous coal mines in the United States in 1924, exclusive o f w agon mines. O f these, about 45 per cent w ere in the Fou rth D istrict. Pennsylvania in cluded 2,122, or 28 per cen t; 750, or 9.9 per cent, w ere in Ohio and 496 or 6.5 per cent, w ere in E astern K entucky. United States production totaled 483,687,000 net tons, o f which about 41 per cent w as produced in the Fourth D istrict. P ennsylvania’s output was 130,634,000, or 27 p er cent; Ohio produced 30,473,000, or 6.3 per cent, and E astern K entucky, 36,127,000, or 7.5 per cent. Separate REVIEW figures are not available fo r the Panhandle D istrict W est V irginia, which is in this D istrict. of Rubber and T ires A kron rubber plants continue to do a large volum e o f business. Sales o f co m panies in the A kron district f o r the first ten months o f this year increased about 30 per cent over the same period in 1924, and in som e cases w ere better than fo r any previous year. Production o f inner tubes in O ctober slumped som ewhat and was below that o f a year a g o, but 1925 production fo r the first ten months was w ell ahead o f 1924. The large output o f this year has not resulted in overproduction, but has been in response to an unusually heavy demand. The price situation is still a disturbing factor. A lth ou g h tire prices have been increased several times during the year, the price o f crude rubber has advanced at a c o n siderably g rea ter rate, and this naturally tends to reduce the m argin o f profit to tire producers. Crude rubber has been over $ 1.00 a pound during m ost o f the past month although it broke about ten cents in m id-D ecem ber an(j w as quoted at ninety-one cents a pound on D ecem ber 17 Even this figure, 10 to 15 per cent below the level o f the preceding tw o months, w as m ore than tw ice as h igh a s the price o f last spring before the sharp sum m er rise occurred, while tire prices have only increased around 70 per cent since that time. W ith regard to the w orld rubber situation, announce ment was made early in Decem ber that export restriction s fro m B ritish plantations in Ceylon and the Straits Settlem ents would be rem oved beginning with F eb ru a ry 1, 1926. A t present 85 per cent o f production is b e in g exported under the Stevenson restriction act. The e ffe ct on rubber prices o f the release o f an additional 15 per cent is problem atical. M eanwhile, A m erican tire m a n u factu rers are continuing their efforts to develop sources o f su pply other than those owned by British interests. W ork p r e paratory to setting out trees has been started on the 1.000.000 acre tract in Liberia which was recen tly leased to a large Am erican corporation. It is stated that 2,000 acres o f this tract w ere planted in 1910, and that the product o f these trees, now in fu ll bearing, are b ein g shipped here in increasing quantities. The acquisition 0f 35,000 acres in M exico, p a rt o f which is planted, is also reported. Am erican interests have made arran gem ents to develop certain rubber plantations in the Dutch E ast Indies on a partnership basis, and public offering o f the shares o f the D utch-A m erican Rubber Plantation Company has recently been made. A n oth er fa c to r is the increasing use o f reclaim ed rubber in this country, it being estim ated that the present capacity o f reclam ation plants is about 400.000.000 pounds yearly, as against 1924 production o f 170,000,000 pounds. The above developm ents have doubtless been a fa cto r in the ten-cent slump in rubber prices previously noted. A ccordin g to the latest report o f the Rubber Associa tion o f A m erica, production o f high pressure inner tubes was 3,653,711 in O ctober, as com pared w ith 4, 135.336 in Septem ber and 5,466,553 in O ctober, 1924. O utput 0f balloon inner tubes num bered 1,305,315 as com pared w ith THE M O N T H L Y BUSINESS 1,304,857 in Septem ber and about 450,000 in O ctober, 1924. Shipments o f high pressure tubes in O ctober w ere sligh tly greater than production, w hile those o f balloon tubes es~ tablished a new record, totalin g 1,656,446, as com pared with 1,600,410 in June, the previous high m onth. Automobiles Production o f passen ger cars by m anu factu rers in the U nited States, a ccord ing to figures furnished by the Federal R eserve Bank o f Chicago in cooperation w ith the N ational A u tom obile Cham ber o f Com merce, totaled 336,330 in N ovem ber, a decline o f about 70,000 from O ctober (the record m onth) but a gain o f 132,000 over N ovem ber, 1924. Truck production in N o vem ber totaled 38,910, a loss o f nearly 6000 fro m O ctober but a gain o f about 12,000 over a y ear ago. Truck m anufacturers in the Fourth D istrict state that fou rth quarter business has exceeded that o f any preced in g fourth quarter. A u tom obile parts m akers have also been en joying a high level o f business. In connection w ith the increasing use o f trucks fo r transportation pu r poses, it is of interest to note that the total estim ated num ber o f m otor-busses in use in the United States in Sep tember, 1925, w as 65,000, as com pared w ith 52,000 a year previously and 20,000 in 1920. It is also estim ated that 249 electric railw ays w ere using 4,437 busses, cov ering 11,668 miles o f route, in Septem ber, 1925, as com pared with tw elve railw ays using seven ty-th ree busses over thirty-five miles o f route in January, 1921. It is frequently stated th at the ex p ort m arket offers large possibilities to A m erican autom obile m anufacturers, even should the so-called “ saturation poin t” be reached in this country. That this is true is shown by the follow in g table, g ivin g the num ber o f people per < c ar in the ten countries having the h ighest ratio, and also in som e o f the other im portant countries in the w orld. (F ig u res from the Bureau o f F oreign and D om estic C om m erce). Persons Per Car 6 United States .... H aw aii ................ 13 Canada ................ 14 New Zealand . 21 28 A ustralia ............ Society Islands 47 United Kingdom 57 Alaska ................ 63 Gibraltar ............ 66 France ................ 69 Argentina ......... 73 Clothing Persons Per Car A u stria ..... ................. 439 Belgium .... ................. 82 China ........ ................. 39,675 G erm any , ................. 272 H ungary .. ................. 1,724 India .......... ................. 7,497 Italy ................ 409 Japan ........ ................. 2,645 Russia ........ ................. 8,896 Sweden ..... ................. 96 W orld .............. 86 Business in the textile trades in this D istrict has quieted dow n seasonally from O ctober, p a rticu la rly in w hole sale lines, but continues sa tisfa ctory in view o f the time o f year. Prices o f raw cotton and cotton y a m have been w eak, resu ltin g in a downward revision of finished g oods by some m a nu fac turers. Underwear m anufacturers report the opening o f lines fo r the fall o f 1926 at prices about 7 per cent be REVIEW 3 low opening quotations a year ago. Demand fo r under w ear has been g ood during the past tw o m onths, due to the early w inter. Business in knit goods is stated to have fallen off considerably from O ctober, wThich w as an un usually good month. W orsted goods m anufacturers report the volum e o f business during the last h alf o f 1925 as better than the first h alf, w ith the m argin o f profits tend ing to increase. G reater interest is being shown by bu y ers o f w om en ’s coats, and m anufacturers feel m oderately encouraged by the outlook. N o g rea t changes have taken place recen tly in the m en’s clothing industry except the developm ent o f the deferred paym ent plan known as the “ Ten Paym ent P lan ” . W ages have rem ained stationary, outside o f m inor ad justm ents. Increased efficiency on the pa rt o f w a g eearners, how ever, is reported by som e m anu factu rers; in one case it is stated that total production is 20 per cent m ore at present than in 1920, w hile the payroll has been reduced 25 per cent, resulting in an increase in individual efficiency o f over 50 per cent. Sales o f nineteen w holesale dry goods firms in the Fourth D istrict in N ovem ber declined 2.8 per cent from a year ago and 26.9 per cent from O ctober. The latter de crease w as rather m ore than seasonal, and is probably due to the fa c t that O ctober was the best month in tw o years. Sales fo r the first eleven months w ere 4.1 per cent under those o f 1924. Stocks on hand at the end o f N ovem ber ran 6.3 per cent below last year and 7.9 per cent under O ctober 31. P rices w ere reported to be tending dow n w ard. Collections are fa ir. Shoes Production o f shoes in the F ourth D is trict during 1925 has run about 10 per cent ahead o f last year, but the m argin o f profit to m anu factu rers is still very small, even w ith the sa tisfa ctory volum e o f business. There is som e com plaint that people show a tendency to econom ize on necessities, such as shoes, in order to purchase a la rg er p roportion o f luxuries. M an u factu rers report p ractically no changes recen tly in either prices or w ages. Final figures o f the Census Bureau put O ctober output o f shoes in this D istrict at about 5 per cent ahead o f O ctober, 1924, but n early 10 per cent b e low Septem ber. P relim inary figures fo r N ovem ber indi cate a decrease o f 27.5 per cent fr o m O ctober. W ith regard to w holesalers, sales o f rep ortin g w holesale shoe firms during N ovem ber w ere 5.5 per cent less than a year ago and 26.7 per cent less than O ctober. F or the first eleven m onths, sales increased 0.03 per cent over the same period last year. The decline from O ctober is la rg ely seasonal. Stocks on hand at the end o f N ovem ber w ere substantially sm aller than a year ago, and sligh tly less than on O ctober 31. C ollections w ere reported to be fa ir to slow. Retail shoe sales in departm ent stores and shoe stores in this D istrict during N ovem ber ran about 4 per cent under last year, accordin g to prelim inary figures. The decrease in m en’ s and b o y s’ shoes was tw ice as grea t as that in w om en ’ s and children’ s shoes. 4 THE MONTHLY BUSINESS Paint No changes of importance have taken place in the paint industry during the past month. The volume of business continues to be satisfactory, and one or two manufacturers report that the mar gin of profits has recently shown a slight tendency to increase. Wages have changed but little during the year 1925. Prices are steady with the exception of slight changes in a few raw materials. A white lead manufac turer reports that the demand for pig lead during 1925 has been very heavy, which has brought about a substantial increase in the price. Early in December, however, a de cline of $10 a ton occurred, increased production having taken care of the unusual demand. In order to promote greater economy in operations, paint manufacturers together with the U. S. Department of Commerce are working on a simplification plan for the reduction in the number of colors and sizes of cans in various kinds of paint. General Manufacturing Manufacturers generally throughout the District report a continuation of a good volume of business, barring seasonal factors. In nearly all cases profit mar gins are still narrow, and have shown no tendency to increase during past weeks. Net income is greater than last year, however, due to the consider able gain in gross volume. One manufacturer reports that his company a few months ago arbitrarily reduced what was considered to be a safe operating margin, re sulting in a doubling of business and larger net profits. Prices are stable for the most part, although slight de clines have occurred in some raw materials. Wages are about the same as for some months past. Labor in gen eral is fully employed. Demand for both window and plate glass continues to be heavy. Plate glass factories in this District are run ning at capacity to fill the unusually heavy requirements of the automobile and furniture manufacturing industries. Competition is very keen in the stove industry, and raw material costs are showing a tendency to increase. Con ditions in the boxboard trade are not entirely satisfactory, due to the desire of manufacturers to keep down costs by increasing production without sufficient regard to the state o f demand. Manufacturers of specialties involving the use of copper and lead have been affected by the decline in the price of these two commodities, and the price of their finished materials has recently shown a declining tendency. No important changes have taken place in the electrical industry, but a slightly increased volume of business is reported by some concerns. Various other lines of busi ness appear to be operating on about the same scale as during the past month or two. Agriculture With the final harvesting of the corn and potato crops practically completed, it is still impossible to discover just how much these crops were injured by the rains, snows and freezes of the late fall. The quality of this year's corn is somewhat above the average, but the moisture content is reported rather high. Several days of fair weather coming in REVIEW succession in November enabled the farmers to get much of their outstanding corn under shelter and the fair weather was also beneficial to the potato growers whose crops were still in the ground. Potatoes suffered con siderably from the early frosts, and the average quality is reported by the U. S. Department of Agriculture as lower than any year since 1921. The decreased produc tion has resulted in the gathering of small and defective potatoes which ordinarily are left in the field. Apples which were still on the trees suffered consider able damage from the freezes of October and November. Prices on most farm products remain firm, with slightly advancing tendencies in many cases. The market for com is slow, due both to the volume of the crop and to the moisture content of the grain. A favorable element in the situation is the fact that all grades of cattle and hogs are bringing a good price. Canning The close of the canning season finds the warehouses of the packers somewhat better stocked than is usual at this time of year. Reports from this in dustry indicate that production of the three principal items of canned vegetables, viz., psas, corn, and tomatoes, has been considerably above the average in this district. This has tended toward a slight decline in prices, but packers report an indication of a strengthening of the market. The overproduction, if it might bo called such, was not sufficient to cause any serious break in prices. An interesting development noted by packers has been the marked increase in the consumption of canned vegetables during the past year. The quality o f the pro duce received at the canneries this year has been above the average, and this coupled with the lower prices is expected to bring about a still wider market for this year’s packing. Tobacco On December 7, the Burley Tobacco Growers’ Association announced a sale of 5,500,000 pounds of its re-dried 1923 and 1924 burley holdings. This was the second important sale of the Associa tion’s present selling season, inaugurated in November. The amount involved was about $1,250,000. On December 18 it was announced that 55,162,000 pounds of the 1923. 1924 and 1925 crops had been sold since the beginning 0f the month. The tobacco which growers are delivering to loose-leaf houses is stated to be of fair quality, the color being somewhat better than average. Building and For the eighth successive month, the Building Materialsvalue of building permits in the United States in November broke all records for corresponding months in previous years. The total for 1(54 cities, accord ing to Bradstreet’s, was $290,696,300, in November, 1925. as against $225,430,642 a year ago, or an increase of 28.9 per cent. As compared with October, there was a sea sonal decline. To show just how far building operations have been THE MONTHLY BUSINESS running ahead of other years in the after-war period, the following table has been prepared, giving this bank's in dex numbers of the value of building permits (1919-23100) by months for 1925, as compared with the 1919-1924 Average for the same months. </o increase, 1919-241925 average January .................. 74 February ............... 88 March .................... 141 April ...................... 126 May ........................ 119 June ........................ 116 July ........................ 107 August .................. 114 September ............. 106 October .................. 118 November ............... 106 1925 74.3 73.9 51.1 96.0 73.1 77.6 93.5 79.8 80.2 79.7 69.8 129 153 213 247 206 206 207 205 191 212 180 The November figures were considerably influenced by New York City, which gained 80.2 per cent over October a year ago, but declined 19.4 per cent from last month. Out side of New York, the gain over a year ago was 14.8 per cent, and the loss from October, 10.4 per cent. In the Fourth District, permits for the month showed a loss from last year, for the first time in 1925. Valua tion of permits in thirteen centers totaled $16,724,472, or 2 per cent less than in November, 1924. Substantial gains in Canton, Cleveland, and Toledo were more than offset by considerable declines in Akron, Erie, Pittsburgh, Spring field, Wheeling, and Youngstown. Nearly all cities, how ever, showed increases for the first eleven months, the Dis trict gain being 20.5 per cent. The Aberthaw index of industrial building costs re mained unchanged at 194 on December first. The cost of various building materials in cities in the Fourth Dis trict changed very little between August 1 and Novem ber 1. Lumber manufacturers, however, report advances in certain grades of lumber during the past few weeks, particularly in gum and ash. Building Operations November* 1925 No. C IT Y Permits from 1924 A k r o n .... 404 — 2 .9 * C a n to n ... 175 — 16.7 Cincinnati 436 — 8 .0 ♦Cleveland 1,197 — 2 1 .0 Columbus. 400 — 2 0.6 D a y to n ... 197 — 9 .2 Erie.......... 114 — 33.3 Lexington. 43 — 4 4 .9 Pittsburgh 443 — 2 1 .6 Springfield 82 + 3 .8 T o l e d o ... 407 — 12.7 W heeling.. 49 — 4 5 .6 Youngs t o w n ... 130 — 4 1 .4 Jan.-N ov., 1925 % change % change % change Valuation from 1924Valuation from 1924 707,848 — 2 9.6 313.899,400 + 8 2 .1 550,445 + 2 6 .9 7,668,868 — 1.1 1,857,265 + 5 .1 28,679,330 + 2 6 .4 7,612,690 + 3 1 .5 84.430,994 + 1 0 .7 1,233,800 — 9 .8 27,817,050 + 7 2 .4 462,2% — 19.8 11,876,212 + 3 3 .8 354.974 — 31.9 8.414,313 + 4 2 .9 102,341 + 9 .1 1,‘.‘ 28,105 + 11.0 1,810.071 — 32.2 38,997,758 + 2 2 .9 133,560 — 6 2.3 1,491,838 — 9 .8 1,462,282 + 6 1 .1 16,776,482 + 3 .9 106,900 — 7 0 .6 3,237,262 — 35.5 330,000 — 7 3.0 11,321,195 D istrict... 4,077 — 18.6 316,724,472 — 2 .0 3256.538,807 ♦Includes East Cleveland, Lakewood, and Shaker Heights. Retail Trade — 0 .7 + 2 0 .5 Department store sales in the Fourth District during November declined 3.4 per cent from the same month a year ago. After the unusually large sales in October, for which weather condi tions were partly responsible, this drop was not unex REVIEW 5 pected. October sales were the largest for that month in the seven years covered by this bank’s records, while No vember sales were exceeded by November of 1920, 1923, and 1924. Of the eleven reporting cities, only two— Canton and Toledo— showed a gain in sales over November of last year. The losses in the remaining cities were not large, however, the greatest decrease being 10 per cent in New Castle. For the first eleven months of the year, the sev enty reporting stores gained 1.8 per cent over the corre sponding period in 1924, seven cities showing a gain. Turning to departmental sales, it is noticeable that de partments which gained heavily over last year during Oc tober owing to weather conditions failed to make such large gains in November; in fact, some of them showed losses. Twenty-seven of the fifty-two separate depart ments reported gains over last November. The largest increases occurred in umbrellas, with 45 per cent; ribbons, 28 per cent; musical instruments, 27 per cent; neckwear and veilings, 25 per cent, and silk underwear, 20 per cent. Percentage changes in the main departments in No vember were as follows: N o v ., 1925 com pared w ith N ov., 1924 % ch an ge Silks and V elvets ..................................................................................... + 9.5 M en's C lothing ......................................................................................... — 10.4 Men’s F urnishings ..................................................................................... — 5.5 Boys* W ear ................................................................................................ — 13.5 W om en ’s R eady-to-W ear .................................................................... — 12.2 Misses* Rea‘d y-to-W ear ........................................................................ — 15.9 Furs ................................................................................................................. + 0.9 M illin ery ...................................................................................................... — 2.7 H osiery— W om en ’s and C hildren's .................................................... + 1.5 Shoes .................................................................................................................. .— 4.1 F urnitu re ...................................................................................................... + 1 1 .6 D raperies, L am ps, Shades .................................................................... + 4.5 F lo o r C overings ......................................................................................... + 1-6 Sales of nineteen wearing apparel firms decreased 1.1 per cent in November as compared with November, 1924, and those of 37 retail furniture firms decreased 5.7 per cent. Wholesale Trade In the wholesale trades, there were slight increases over November of last year in groceries, drugs, and hardware, while dry goods and shoes showed slight declines. The greatest increase is seen in drugs, which showed a gain of 5.6 per cent with hardware and groceries show ing gains o f 0.8 per cent and 0.4 per cent respectively. The decline in wholesale shoes was 5.6 per cent, while dry goods fell 2.8 per cent under last year’s November For the eleven months ending November 30, hardware and drugs showed gains o f 1.6 per cent and 3.6 per cent respectively, while groceries and dry goods for the same period showed declines of 3.3 per cent and 4.1 per cent from the figures of the first eleven months of 1924. The wholesale shoe trade for the year to data has very closely approximated that of 1924, the increase being 0.03 per cent. The index number for all wholesale trades was 91 in November, as compared with 90 for November, 1924 (19191923 monthly average ~100) THE 6 MONTHLY Retail and Wholesale Trade Percentage Increase or Decrease No. of Reports D E P A R T M E N T STORES A kron.............................................5 C anton.................................... ......5 Cincinnati.....................................7 Cleveland......................................6 C olum bus............................... ......6 D ayton..............................« . . 5 N ew Castle..................................3 Pittsburgh.............................. ......7 T o le d o ..................................... ......5 W heeling.......................................5 Y oungstow n.................................3 Other Cities. ...................... ......13 D istrict.................................. ......70 W E A R IN G A P P A R E L C incinnati.............................. ......6 Cleveland......................................3 Other Cities........................... ......10 D istrict................................... ...... 19 F U R N IT U R E C anton.................................... ...... 3 C le v e l a n d .......................... ......6 Colum bus............................... ...... 9 T o le d o ..................................... ...... 5 Other G t ie s .......................... ...... 14 D istrict.......................................... 37 C H A IN STO R E S* Drugs— District ................. ...... 3 Groceries— D istrict.................... 5 W H O LE SA LE G R O C E R IE S A kron...................................... ...... 3 Cleveland............................... ...... 4 E rie......................................... ...... 4 Pittsburgh.............................. ...... 10 T o le d o ..................................... ...... 3 Y ou ngstow n .......................... ...... 3 Other Cities........................... ...... 27 D istrict................................... ...... 54 W H O L E SA LE D R Y GOODS 19 W H O LE SA LE D R U G S ............... 16 W H O LE SA LE H A R D W A R E 16 W H O LE SA LE SHOES.......... ...... 7 ♦Sales per individual unit operated. SALES N ov., 1925, compared with N ov., 1924 — 6 .4 + 1 .9 0.1 — SALES Jan.-N ov., 1925, compared with Jan.-N ov., 1924 + 7 .0 — — 1.7 — 0.6 +0.5 — 3.8 10.0 — — 6 .5 + 5 .1 — 8 .7 — 1.1 — 2.1 2. 8 + 7 .8 + 2 .5 + 8 .5 — 3 .6 — 1 .4 +1.6 BUSINESS REVIEW Index Numbers of Trade in the Fourth Federal Reserve District Average M onthly Sales for the Five-Year Period 1919-1923. inclusive— 100.) Department Stores (5 5 )*................ Wholesale Drugs (1 5 )* .................... Wholesale Dry Goods (1 8 )* ........... Wholesale Groceries (5 0 )*.............. Wholesale Hardware (1 5 )* ............. Wholesale Shoes (6 )*..................... Wholesale— All (104)*..................... Chain D rug. (J )* .............................. ♦Number of firms. N ov. 1921 97 93 86 84 80 N ov. 1922 111 io i 101 94 101 N ov. 1923 122 106 96 98 104 85 <jj 97 og 9? 89 "jq 'S t g6 N ov. 1924 no N ov 1925 ne 100 83 on 99 V. hi 2A in n on o? $ — 5 .3 + 3 .0 + 6 .5 +1.8 — 3 .4 +6.8 — 5 .0 — 4 .7 — 1.1 — 8.6 + 9 .8 — 12.7 +10.2 — 8.0 — 5 .7 + 3 .7 — 9 .1 — 9 .2 — 6 .5 — 3 .2 — 5 .8 + 4 .9 +0.2 +10.1 + 0 .4 — 2.8 + 5 .6 +0.8 + 2 .7 — 0.7 +1.1 — 6 .9 — 3.1 — 3 .5 +0.6 — 16.6 — 0 .9 — 3.3 — 4 .1 + 3 .6 +1.6 + 0 .0 3 — 5 .6 4 weeks ending Dec. 9, 1925 84,890 10,199 41,413 Cincinnati.............. 330,872 Cleveland.............. 643,656 Columbus............... 133,972 Connellsville, P a .. 4,646 69,654 Erie, P a .................. 32,694 Greensburgh. P a .. 22.109 Homestead, P a .... 4,200 Lexington, K y .. . . 19,796 L im a....................... 12,844 Lorain..................... 5,416 Oil City, Pa........... 13,539 Pittsburgh, P a----- 959,201 Springfield............. 20,313 11.193 190,205 Warren, O ............. 11,839 Wheeling, W . Va.. 45.275 Y ou ngstow n.......... 62,095 11,550 T o ta l................. 2,741,571 % change ifrom 1924 + 2 3 .8 — 9 .0 +2.6 1925 to date 1,009.306 125.023 535.271 3.944.268 7,808,811 1,644.411 52,728 876,219 386.607 234,034 52,644 257,257 200.608 75,549 169,051 10,598.265 246,839 133.372 2,321,930 152.858 511,1*5 789,904 138,714 1924 to date 816,775 123,473 494.519 3,401,144 7,014,140 1,507.5*>1 53.452 766,830 353,603 248,143 48,658 242,335 207.259 71,342 14S.055 9,426,255 218,518 128,0 '6 2,040.788 140X14 508,133 686,757 146,960 + 1 4 .5 32,264,864 28,883,495 First 11 months 1925 31,376 First 11 months 1924 28,341 +8.1 + 1 0 .7 +12.0 + 7 .8 + 7 .4 + 1 4 .8 +11.2 + 1 6 .9 +1.8 + 1 8 .2 — 24.1 — 14.8 + 1 7 .4 + 1 9 .4 + 2 0 .3 + 13.1 + 2 0 .3 + 9 .7 + 9 .0 + 5 .3 % inc. o r deer. 1925 over 1924 + 2 3 .6 + 1 .3 +8.2 + 1 3 .0 + 1 1 .3 "+ 9 J — 5 .7 +8.2 +6.1 — 3 .2 + 5 .9 + 1 4 .2 + 1 2 .4 + 1 3 .0 + 4 .1 + 1 3 .8 + 8 .7 +0.6 + 1 5 .0 —5.6 + 1 1 .7 Fourth District Business Statistics (All figures are for Fourth District unless otherwise specified) Novem ber, 1925 Bank Debits (23 cities) Millions o f dollars Savings Deposits (end o f month) Ohio (28 banks) Thous. o f dollars Western Pennsylvania (27 banks) T otal (55 banks) Commercial Failures — Number Actual Number ** M — Liabilities Thous. o f dollars Postal Receipts — 9 cities Sales — Life Insurance — Ohio and Pa. “ — Dept. Stores — (55 firms) *• — Wholesale Grocery — (50 firms) •• — “ Dry Goods— (19 “ ) *• — “ Hardware — (16 M ) “ — M Drugs — (16 M ) Building Permits, Valuation— 13 cities Actual Number ** , Number— 13 Thous. o f Tons Production — Pig Iron, U. S. — Steel Ingots, U. S. ** — Automobiles, U. S. Actual Passenger Cars •• Number M , Trucks Thous. of tons 4* — Bituminous Coal, 4th Dist. “ M barrels M — Cement; Ohio, W. Va., Wn, Pa. •• •• •« — Petroleum, O., Pa., K y. 44 pairs ** — Shoes, 4th Dist. *“ casings — Tires, U. S. tons Bituminous Coal Shipments (from Lake Erie ports) M Iron Ore Receipts (at Lake Erie ports) '* 111 months* average *Figures confidential •October •First ten months Novem ber, 1924 % change 2,875 2,489 + 1 5 .5 554,115 236,258 790,373 165 3,428 2,777 87,895 25,290 7,767 3,564 2,039 1,692 16,724 4,077 3,015 3,907 511,771 224,042 735,870 133 2,441 2,481 75,552 26,2V0 7,749 3,666 2,023 1,603 17,074 5,008 2,515 3,121 + 8 .3 + 5 .5 + 7 .4 + 2 4 .1 + 4 0 .4 + 11.9 + 1 6 .3 — 3 .8 336,330 38.910 19.012 1,241 1,850s 204,402 27,047 15,928 1,277 1,9573 * 3,429* 3,464 3,198 » 3,936* 3,088 1,975 +0.2 2.8 +0.8 — + 5 .6 — 2.0 — 18.6 + 1 9 .9 — 25.2 + 6 4 .5 + 4 3 .9 + 1 9 .4 — 2.8 —5.5* + 4 .8 * — 12.9* +12.2 + 6 1 .9 % change + 1 0 .7 533,747* 234,2031 767,950* 1,766 39.638 30,572 994.481 254,124 80,711 38.814 23.552 19,306 256.538 65,416 33,114 40.211 494,628* 219,856* 714,486* 1,622 53.269 27,514 892,063 251,512 83.231 40,472 23,170 18,628 212,937 65,643 28,120 33,242 + 7 .9 + 6 .5 + 7 .5 + 8 .9 — 2 5 .6 3,529,549 450,816 180024 14,608 18,287* 3,069.307 336.827 171.463 13.424 18,385* + 1 5 .0 + 3 3 .9 + 5 .0 39,542* 27,370 38,597 32,674* 23.VOI 31,532 % +11.1 + 1 1.5 ± 5:8 + 2 0 .5 —0.3 + 1 7 .8 +21.0 —0.5* + 11.4* + 21.0 * + 1 4 .S 22.4 + THE MONTHLY BUSINESS REVIEW 7 National Summary of Business Conditions (By the Federal Reserve Board) PRODUCTIONINBASIC INDUSTRIES PWCPIT___________________________________________________________m crwr Index of 22 basic commodities corrected for seasonal variations (1919— 100). Latest figure— November* 115. WKCi-ESALE 1 1 * j ! i W 1 1 1 ol_ Index of U . S. Bureau of Labor Statistics (1913— 100, base adopted by Bureau). Latest figure— November, 158. Weekly figures for member banks in leading cities. Latest figures— December 16th. Weekly figures for twelve Federal Reserve banks. Latest figures— December 23rd. Production of basic commodities in November continued in about the same volume as the month before, and the general level o f prices remained unchanged. Activity of wholesale and retail trade was below the record level of October, but larger than in November o f last year. Production Output of basic industries included in the Federal Reserve Board’s in dex of production was at about the same rate in November as in October, but owing to a smaller number o f working days, the index declined by about 1 per cent. Increases occurred in average daily production o f pig iron, steel ingots, copper, and bituminous coal, and in the consumption o f cotton, while the production of flour, sugar, and meat products declined. Automobile pro duction in November was seasonably less than in October, but continued large for this time of the year. Employment and payrolls in manufacturing in dustries showed small increases in November as compared with October. Employment and workmen’s earnings increased in the machinery industries, while in food products and tobacco and in the clothing industry there were seasonal declines. Building contracts awarded were smaller in November than in October, but were large when compared with the volume for No vember of previous years. Final estimates by the Department of Agriculture in 1925 indicate that the acreage of all crops harvested was slightly larger than in 1924, but that the aggregate production of crops was in about the same volume. Yields of cotton, corn, and tobacco were considerably larger than last year, while the production of wheat, oats, potatoes and hay was smaller. Trade Sales in leading lines of wholesale trade showed the usual decline in November from the seasonally high levels in October, but continued larger than in the corresponding month of any of the past five years. Total of volume of trade at department stores and mail order houses was smaller than in October, owing largely to the smaller number of busi ness days in November. Compared with earlier years, however, department store sales were the largest on record for November and sales at mail order houses were the largest for that month in the past six years. Merchandise stocks at department stores showed considerably more than the usual in crease in November and were 4 per cent larger than in November of last year. Distribution o f commodities by railroads during November reached new high levels for the month. Movements of merchandise and miscellaneous commodities, coal, and coke were larger, while those of livestock, grain, and forest products were somewhat smaller than in November of the two pre ceding years. Prices Wholesale prices, according to the index o f the Bureau of Labor Sta tistics, remained the same in November as in October. Prices of livestock, meats, and cotton goods declined, but these decreases were offset in the gen eral average by advances in the price of grains, fuel, lumber, and rubber. In the first three weeks o f December prices of wheat, flour, and hardwood lumber were slightly higher than in November, while quotations on cattle, coke, copper, and hides were lower. Bank Credit At member banks in leading cities the volume o f credit outstanding on December 9 was near the high level reached early in November. Loans for commercial and agricultural purposes declined somewhat during the period, and there was also a decrease in the banks’ security holdings; continued growth of loans on securities, however, was sufficient to offset these re ductions and the total of loans and investments remained practically un changed. During the latter part of November and the early part of December open-market rates on commercial paper and acceptances remained substan tially unchanged. Later in December increased demand for credit and cur rency, largely seasonal in character, was reflected in firmer money conditions. 8 THE M O N T H L Y BUSINESS REVIEW Selection and Duties of Federal Reserve Bank Directors The taking o f office at the beginning o f the New Y ear by a num ber o f new Federal Reserve Bank directors makes it appropriate to review the method by which directors o f the R eserve Banks are chosen, the type o f men who serve, and their pow ers and duties. Each o f the tw elve Federal Reserve Banks has a Board o f nine directors which is responsible, under the general supervision o f the Federal Reserve Board in W ashington, fo r the policy and adm inistration o f the bank. O f the nine directors, six are elected by the mem ber banks and three are appointed by the Federal Reserve Board. O f the six elected by m em ber banks three may be bankers, and the other three must be actively engaged in com m erce, agriculture, or industry in the district, and while serving as R eserve Bank directors may not serve as directors or officers o f any other bank. O f the three directors appointed by the Federal Reserve Board, one acts as chairm an o f the board, a man o f banking expe rience, and devotes his entire time to the Federal Reserve Bank, carry in g in addition the title and duties of Federal R eserve A gen t. The other tw o appointed by the F ederal Reserve Board m ust have no other banking connection while serving as directors. H ence, they are usually business men. Business Men in M ajority law yers W illiam s........................... Investm ents W. W . K night ..................................M erchant each o f the tw enty-three branches has a board o f seven directors, residents o f the branch territory, o f whom fo u r are appointed by the Federal Reserve Bank o f the d istrict and three by the Federal Reserve Board. The d irectors o f branches have a range and interests o f occupations sim ilar to that indicated above fo r the directors o f the banks. In the Cleveland district there are two branches, one at Cincinnati and one at Pittsburgh. The fo llo w in g are their directors: Cincinnati Branch: E. S. Lee ................................................. Banker Judson Harmon ................................A ttorney John Omwake ......................... M anufacturer Chas. W . Dupuis ..................................Banker L. W . M anning .................................... Banker Geo. M. V erity......................... M anufacturer Pittsburgh Branch: Chas. W . Brown .....................M anufacturer R. B. Mellon .......................................... Banker J. D. Callery .........................Public u tilitie s Chas. D. A rm strong .............. M anufacturer Jos. R. Eisamen .................................. Banker Jos. R. N aylor ..................................M erchant One Vacancy Local and National Interest railroads contractor The Board o f D irectors o f each Reserve Bank appoints cattlem an its officers and is responsible fo r its policy and m a n a g e public utilities ment, subject to the general supervision o f the Federal m ining Reserve Board. savings bank officer In each o f the twelve Federal Reserve districts it is men w ith this wide range o f interests and fam ilia r with conditions in the district w ho are responsible fo r the m anagem ent o f the R eserve Bank. D irectors o f Cleveland Bank The directors o f the Federal Reserve land are the fo llow in g : Bank o f Cleve Elected by M em ber B anks: Chess Lam berton ................................ Banker R obert W ardrop .................................. Banker 0 . N. Sams ............................................. Banker R. P. W rig h t..............................M anufacturer Geo. D. C rabbs......................... M anufacturer John Stam baugh ..................... M anufacturer B. A. Clifford Shinkle ..............................Banker Thus, o f the nine directors o f each Reserve Bank, five are ordinarily business men, three are active bankers (freq u en tly w ith business interests in addition), and one is chairm an and Federal R eserve A gen t. D irectors hold office fo r three years and m ay be re-appointed or re-elected. O f the present 108 directors o f the tw elve Reserve Banks, tw elve are the chairm en o f the board and th irty-six are active bankers. The rem aining sixty, constituting the m a jority , have the follow in g occu pation s: 2 2 1 1 1 1 1 L. G eorge DeCamp ..................................Banker In addition to the directors o f the tw elve Reserve Banks, M ethod o f Selection 19 m anu factu rers 14 m erchants 4 farm ers 4 lum berm en 2 insurance 3 investm ent bankers 3 retired business men 2 publishers Appointed by Federal Reserve Board: A certain co-ordination is necessary b e tween the twelve Reserve Banks in im portant m atters of policy. The law therefore provides that decisions o f anv Reserve Bank as to changes in the discount rate m ust be approved by the Federal Reserve Board. Transactions in bankers acceptances and short governm ent securities in the open m arket are co-ordinated through a com m ittee o f Reserve Bank officers appointed by the Federal R eserve B oard and acting under the approval and authority o f the directors o f ^those Reserve Banks which may from tim e to time participate in such transactions. Under the terms o f the Federal Reserve A ct and cu r rent procedure, the m anagem ent o f the Federal R eserve System is so designed as to bring to bear upon any i™ portant question o f policy both local and national point* o f view, togeth er with the opinions o f men o f different occupations and interests.
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