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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Cleveland, Ohio, January 1, 1932 Vol. 14 Favorable developm ents in the past month have been offset by unfavorable ones, and conditions in the Dis trict in December were little changed from a m onth ago. Christmas buying dominated the retail field, but pre lim inary figures indicate that sales in the first half of De cember were off about as much from the corresponding period of 1930 as they were in the first eleven months. The number of bank suspensions increased slightly in the latter half of December and in the entire month to taled seventeen, compared with nine in November. The de mand for currency, though it increased in the first three weeks of December, was not up to seasonal proportions. Failure of the autom obile industry to expand produc tion at more than a very moderate rate from the ex ceedingly low level touched in late November, caused steel m ills and parts and accessory plants to curtail pro duction after fulfilling the very moderate autom otive requirements for new model production. Steel produc tion made a new low for this depression at 24 per cent of capacity in mid-December, though local m ills were operating at slightly higher-than-average rates. Tire production expanded in November, contrary to seasonal movements of past years. Rubber consumption increased three per cent and em ployment showed no change, both in contrast to a reduction in past years. Life insurance sales in November in Ohio and Penn sylvania were slightly ahead of the sam e month of 1930, but were off 15 per cent in the first eleven months. Com m ercial failures were 13 per cent more numerous in No vember than in the corresponding month of 1930, w hile in the first 11 months an increase of 15 per cent was reported. No. 1 operations has been som ewhat sharper this past year than in many other sections of the country. Employment and payrolls have been substantially re duced. A t 942 individual Ohio concerns reporting to the Ohio State Bureau of Business Research, employment in the first eleven m onths of 1931 averaged 16 per cent below 1930, which in turn was 17 per cent below 1929. The accompanying chart shows the average falling-off in employment in m ajor industries of Ohio in the elevenmonth period, compared w ith the same interval in 1930. Operations in the iron and steel industry, one of the m ost im portant in the District, were very much below other years. In the first 11 months, steel production in the entire country averaged 39 per cent of capacity, com pared w ith 65 per cent in 1930, and 92 per cent in 1929. D espite the increased demand for steel in the past de cade, average production was only 82,799 tons a day in the eleven-month period, the sm allest since 1921. W ith autom obile, rail and general industrial demand sharply curtailed, local m ills were operating at lower-than-average levels in most of 1930. In late November and the first part of December, m ills in this section received or ders for autom obile steel, but so far the volum e has been small. Prices have sagged during m ost of th e period and are lower now than since 1915. A lthough the autom obile industry has had a very un favorable year, production being about 30 per cent be- OHIO INDUSTRIAL EMPLOYMENT CHEMICALS RUBBER CONSTRUCTION STONE. CLAY&GLASS REVIEW OP 1931 TEXTILES Barring a slight upward m ovement in the spring of 1931, sim ilar to the one which developed in the early m onths of 1930, general business conditions in the Fourth D istrict have been declining for two and one h alf years, follow ing very closely the m ovement in the entire coun try. Due to the highly industrialized make-up of the Fourth District, particularly the northern half, and because of the dependence o f m any local factories on autom obile and iron and steel production, the reduction in industrial LUMBER TRADE MACHINERY VEHICLES METAL PRODUCTS MISC. MANUFACTURING PAPER & PRINTING ALL INDUSTRIES Per cent decrease first eleven months 1931, compared with similar period of 1930. Based on figures of Ohio State Bureau of Business Research 2 THE MONTHLY BUSINESS REVIEW low last year and the sm allest since 1921, some prog ress has been made. Stocks are very much reduced. In every month since May new passenger car registrations have exceeded actual output, and the discrepancy be tween sales and production has increased in recent months. In the closing m onths of the year the industry was practically shut down, and the expansion in Decem ber production on new models has been slow. This re duced autom obile production had marked effect on parts and accessory demand. Many local factories were shut down entirely or were operating at very low levels during much of the year. This also had its effect on the rubber and tire indus try, so far as original equipm ent was concerned, but tire production in the first ten m onths was only four per cent below the same period of 1930, the demand for replace m ent tires offsetting in part the reduction in original equipment sales. Prices have been reduced, and costs of raw m aterials have fallen sharply, to the low est levels in history. Clothing m anufacturers have been hampered by the decline in purchasing power, the unseasonable weather this fall, and by the fact that dealers are reluctant to stock in usual am ounts under prevailing conditions. De spite the drop in prices, however, the dollar value of sales in several eases compared rather favorably with 1930, according to reports. Shoe production has held up rather better than many industries, output in the first 11 months of 1931 being 0.4 per cent ahead of the same period of the preceding year. A ctivity was much below the average of years prior to 1930. Lower-priced shoe manufacturers fared better than makers of higher-priced products. Building activity, which in 1930 was about 20 per cent below 1929, declined to very low levels in 1931, Contracts awarded in the first eleven m onths were 45 per cent below the low level of 1930, and the volume of contemplated projects reported at the end of the year was about half as large as a year ago. Prices of build ing m aterials are very low , and actual wages have de clined. Cement production was about 37 per cent sm aller in 1931 than in the preceding year, the decline in the volum e of public construction affecting demand for this material. Paint production was affected by reduced building operations and the decline in autom obile production. Most other sm all m anufacturing concerns, including electrical supply, glass, china, pottery, tool, hardware, and paper companies operated at lower levels in 1931 than in 1930. Farm ers in this District raised one of the largest crops on record, in contrast to only an average harvest in the entire country. Composite yields w ere som ew hat above the average of preceding years, but the drastic reduction in prices to pre-war levels, partly a result of the surpluses of som e crops, reduced farm incom e m aterially. The decline in farm value from two years ago of all crops raised in the entire country, was 49 per cent, based on December 1 prices. FINANCIAL The year 1931 w itnessed many changes in financial con ditions which are characteristic of a depression period. Commercial failures in the D istrict were 15 per cent more numerous in the first eleven months than in the corre sponding interval of 1930, and liabilities of the default ing concerns increased about 100 per cent in the same period. Bank suspensions were exceptionally numerous in 1931. There were 182 banks closed in the period, of which 63, or 34 per cent, w ere members of the Federal Re serve System. About 44 per cent of all banks in this D istrict are members of the System. Deposits involved in the banks suspended during the year exceeded $415,“ 000,000, and represented about one-tenth of the total deposits of all banks in the District. The peak in the number of suspensions occurred in October, for, in the two follow ing m onths there was a decided reduction. Perplexity over the disturbed financial situation in the latter half of 1931 caused banks to accum ulate largerthan-normal cash holdings and individual hoarding in creased markedly. Circulation of Federal reserve notes expanded more than 50 per cent in the last half of the year, though in late November and December note cir culation showed less than the average change for that period of preceding years. Deposits at banks receded sharply, savings deposits at a selected group of banks being 10 per cent sm aller on December 1 than a year The volum e of freight handled by vessels on the Great Lakes was sm aller than since 1921, shipm ents of iron ore being off about 54 per cent and bitum inous coal 17 per cent from 1930. The coal industry was very much depressed, being affected by reduced industrial demand, unusually warm weather, declining prices and labor trou bles. Output in the first 11 months in the District was 19 per cent below 1930. R etail trade, based on reports of sales at principal department stores, held up rather w ell if allowance is made for the decline in prices. The dollar value of sales in the first eleven m onths of 1931 was 12 per cent be low the same period of 1930, though, according to Fair child's retail price index, department store prices were 17 per cent lower in December than in January, 1930. W holesale trade was about 25 per cent sm aller in 1931 than in the preceding year, but price reductions were an im portant factor in the decline. End of month fignre* at 28 selected banks in Ohio and Western Pennsylvania. THE MONTHLY BUSINESS REVIEW ago. They are sm aller than since 1927. Direct loans to member banks in this D istrict increased to the high est level in over two years. R eserve Bank Credit. Total credit extended by the Federal Reserve Bank of Cleveland increased sharply in the latter half of 1931 to the highest level in over ten years, the peak being passed in October, when total bill and security holdings were $223,000,000. Since that tim e, chiefly because of a falling-off in the volume of bankers’ acceptances held, total credit extended declined to 1204,000,000 on December 23, compared with $127,000,000 on the corresponding date in 1930. Holdings of Government securities remained high dur ing the entire year, the average being above any period since 1922. B ills bought in the open market increased in October and early November to the highest point since 1920, but receded sharply in the closing w eeks of the year. Loans to member banks in this District in the first half of 1931 were sm aller than at any tim e since 1917, but demand for cash, etc., caused discounts to increase sharply in the latter six months, and in De cember they were higher than at any tim e in the two preceding years. Gold reserves increased $50,000,000 in the first eight months, but were reduced by more than that amount in September and October, partly seasonal. In the two en suing m onths an increase was shown, and on Decem ber 23, at $308,000,000, gold reserves were $14,000,000 higher than a year ago. Reserve deposits declined sharply in the past year to the low est level since 19 22, as deposits at member banks were reduced. In December, reserve deposits were only 1145,000,000, a reduction of 23 per cent in the year. In the five weeks ended December 23, bills discounted for member banks increased $28,000,000, and, at $127,581,000 on the latest date, compared w ith $47,556,000 one year ago. Loans and rediscounts are higher in this D istrict at present than in any other District in the coun try. The increase in loans to banks in leading cities has been greater in the past year than to banks in sm aller centers. Holdings of acceptances receded from $37,000,000 to 2000 .. "1 ' TOTAI'L LOANS, DISCi:.k. INVESTMt! NTS --- D£WA M Q A T JM K DEIP O S IT S ~ 'f ~ ## ✓ ' V / v, J Loans on securities receded quite sharply in 1931, tq a point lower than since 1927. “All other” loans de clined at a slow er rate to the low est level in over six years. Investm ents increased sharply in the first half year to the highest figure ever reported, but fell in the last six m onths to a point in December below holdings on the sam e date in 1930. Demand deposits in the first three w eeks dropped $11,000,000, but in the latest week increased $9,000,000. Time deposits fell $27,000,000 to $880,000,000, and were over $100,000,000 below one year ago. j I% 1 I MANUFACTURING, MINING ! Monthly average# of wwkly figures for reporting member banks Ira leading* cities Member Bank Credit. A fter increasing slightly in the first four months of 1931, entirely a result of larger hold ings of investm ents, total credit extended by reporting member banks in leading cities of the Fourth D istrict re ceded to the low est level since 1927. This downward m ovem ent was accompanied by a reduction in deposits, but the falling-off was sharper in the last half of 1931 than in credit extended, for deposits are lower than since 1922. The accompanying chart shows m onthly changes in demand and tim e deposits of, and total credit extended by reporting member banks in the past five years. The sharp upturn in the deposit curve in 1930 was largely a result of increasing balances of interior banks, permit ting an expansion of investm ent holdings, the under lying cause of the increase shown in the credit curve in 1930. The decline in 1931 has been more general and has affected all types of deposits. Total loans and in vestm ents were nine per cent sm aller in December, 1931, than a year earlier and deposits were off 14 per cent in the same period. The recent declines, occurring in eight months, were more abrupt than in any sim ilar period on record. In the four w eeks ended December 16, loans on se curities and “all other” loans contracted slightly, though the falling-off was not so great as in earlier periods of 1931. Investm ents declined about $20,000,000 in the first three w eeks, but expanded $40,000,000 in the week ended December 16, purchases of the December 15 issue of Treasury certificates accounting for the increase. MEMBER BANK CREDIT AND DEPOSITS i&JJONS 24-00] $8,000,000 in the five-week period, a greater-than-seasonal falling-off. They are now below the average for this season of past years, having declined sharply from the high level of October. The volum e of Government se curities held was reduced $5,000,000 in the five weeks. Circulation of Federal reserve notes increased $18,000,000 from November 18 to December 23, in contrast to an increase of $19,000,000 in the sam e period of 1930, $28,000,000 in 1929 and $25,000,000 in 1928. The rapid increase in circulation this past year, which started in August, did not continue at a greater-than-seasonal rate in the past two m onths. Member bank reserve deposits declined slightly in the period, but the ratio of total reserves to deposit and note liability combined was 64.1 per cent, compared w ith 75.5 per cent a year ago. Iron and Steel Production of steel rose from 27 per cent of capacity in the third week of October to 31 in the third week of November but declined to 24 per cent of capacity in the 4 THE MONTHLY BUSINESS REVIEW third week of December, a new low level for this depres sion. Over the holiday period it seemed probable that a still low er operating rate would prevail. In the Fourth District, this country-wide trend was aptly reflected, though local m ills were operating at aboveaverage levels. In the month ended w ith the third week of December the steel operating rate at Pittsburgh de clined from 30 per cent to 26, at Youngstown from 37 per cent to 28, at Cleveland from 44 per cent to 33. The lim ited increase in autom obile requirements was chiefly responsible for the easier situation in the Fourth District. Because of reduced retail sales, automobile m anufacturers adopted a policy of assem bling only a mini mum of new 1932 m odels for show and dealer purposes. The postponement of production by an im portant smallcar producer was a retarding factor to both the autom o bile and steel industries. Due to the rise w hich culm inated in the third w eek of the month, Novem ber’s daily rate of steel ingot production, at 63,747 gross tons, represented an increase ovei the 58,977 tons of October— the first rise since March. This was contrary to the usual seasonal trend and waa entirely due to an upturn in bessemer steel, a type which represents less than one-sixth of total steel production. Output of open hearth steel was at a lower rate in No vember than in the preceding month. November was a 30 per cent month in steel, contrasted w ith 27.7 per cent in October and 44 per cent in November, 1930. Pig iron, however, continued to ease off in November, fall ing to a daily average of 36,727 gross tons, the lowest level of the depression. P ig iron-producing facilities were engaged only 25.5 per cent in November. On No vember 30 only 67 of the 302 blast furnaces in the coun try were active, two less than a month ago and two few ef than in the low est month of the 1921 depression. As production eased off prices declined. P ig iron at Cleveland was reduced $1 per ton to $16 for the foundry and m alleable grades. Structural shapes and tank plates at Pittsburgh, officially 1.60c, were shaded $2 per ton on attractive business. On autobody and No. 10 hot rolled sheets, and hot and cold rolled strip concessions devel oped. Semifinished steel was shaded. Contrariwise, makers of wire rods announced an advance of $2 per ton for the first quarter and nails were put up $1. The price situation is reflected by the recession in the iron and steel com posite of Steel from $30.63 to $30.36 during the month. Coal Production of bituminous coal by Fourth D istrict mines was 15 per cent sm aller in November than in October, a falling-off about on a par with the decline at that sea son in 1930 and 1929, but greater than in earlier years. Compared with a year ago, output was off 24 per cent. In the first eight months, 138,685,000 tons of coal were mined, a reduction of 19 per cent from the correspond ing period of 1930. Compared w ith the average elevenmonth production in the eight years 1923-30, output of bitum inous coal in the same period of 1931 was off 27 per cent. Coal stocks are higher than a year ago, based on present consumption rates. In view of the fact that about 80 per cent of all bi tum inous coal mined is used by industry and the rail roads, and that unseasonably warm w eather has reduced m aterially the dom estic demand for coal this fall, the decline in 1931 was not very much greater than might have been expected. Conditions at mines are not at all good and w ages have been reduced rather sharply in the past year. Labor trou bles in som e sections have complicated the situation. A utom obiles The resumption of operations at auto mobile plants in order to provide deal ers w ith sam ples has been very slo\y. Estim ated w eekly production in the period ended Decem ber 12, according to Cram's reports, was only 11,375 units. This was an increase contrary to seasonal m ove ments of past years, but the current level has been so low that the Annalist adjusted index is only 27 per cent of normal. This compared w ith 90.3 in the corresponding week of 1930, when 38,049 units were produced. Manufacturers are being very conservative in regard to stocks, and in m ost cases are shipping cars only when dealers have orders for them. The January shows and public response to new models are awaited w ith more than usual interest. W ith only lim ited autom obile m aterial releases, steel, glass, and autom obile parts manufacturers continue to operate at very low levels. November production, accord ing to the Department of Commerce, was only 68,867 pas senger cars, trucks and taxicabs. This compared w ith 80,142 in October, a drop of 14 per cent, or som ewhat less than the usual falling-off at that tim e in preceding years. The Board’s adjusted index advanced from 26 per cent of the 1923-1925 m onthly average in October, to 36 in No vember. The index of truck production was 66 per cent of the 1923-1925 average in November, w hile the pas senger car index was only 32 per cent of the same av erage. Output of all types, however, was just about half as large as in November, 1930, which in turn was more than 40 per cent under 1929. Barring January, 1921, production in the latest month was low er than for any month since 1918. Passenger car production was off 52 per cent from a year ago, the largest drop, so far, in 1931, and truck production was down 45 per cent. In the eleven-m onth period, output of passenger cars was 30 per cent under the same interval of 1930, and truck production showed a reduction of 27 per cent. Based on returns from 23 states, new passenger car registrations in November were 16 per cent less, on a daily average basis, than in October, w hile the decline in past years for that period averaged 27 per cent. Tires, Rubber Replacem ent tire sales in November were at a higher rate than in Octo ber, according to reports from Akron manufacturers, and em ployment at 26 reporting concerns did not show the falling-off that has been experienced in former years. It was, however, eleven per cent below THE MONTHLY BUSINESS REVIEW 5 last year, and the average reduction in the first eleven m onths from the sam e period of 1930 was 22 per cent. The very sharp reduction in autom obile production in November affected demand for original tires, and offset in part the increase in replacement tire sales. in china and pottery plants are down seasonally and brick and tile production was reduced. W ages in many cases have been lowered 10 to 15 per cent, though in some instances skilled men are receiving the same rates as a year ago, but sm aller totals because of short hours. Crude rubber consumption in November was three per cent ahead of October, compared w ith an average seasonal decline of about eight per cent for the period in past years. At 22,943 tons, it compared with 23,479 in November, 1930, a reduction of 2.3 per cent. Employment at clothing and textile concerns was unchanged in November, compared with October, w hile in the past five years the average change was a decline of three per cent. The number employed was four per cent above last November, when a sharp reduction occurred at m en’s clothing factories. Manufacturers were aw aiting outcome of December retail sales as an indication of public buy ing power. The latest figures of the Rubber Manufacturer's As sociation reveal that output in October was six per cent under September, but 17 per cent below a year ago. In the ten-m onth period production was down about four per cent from the same interval of 1930. Stocks are 15 per cent sm aller than a year ago. Sales have kept ahead of production during m ost of the year, but shipm ents in October dropped 28 per cent from September. The fallingoff was greater than the decline in production, and stocks increased 1.7 per cent in the latest month. Tire prices w ere lowered five to 19 per cent, depend ing on type, in early December, the first revision so far this year, despite the fact that raw cotton prices are down 25 per cent and crude rubber 40 per cent in the past year. Labor costs, which constitute the major portion of tire manufacturing expense, have been reduced about ten per cent. Imports of crude rubber in November, at 43,733 tons, were nearly twice consumption in the month and com pared w ith 31,765 tons in November, 1930. Domestic stocks consequently increased seven per cent in the month and, at 292,493 long tons, were 54 per cent above twelve months ago. If crude rubber afloat to the United States be included, total crude rubber stocks amount to 369,936 tons, or over 16 months' supply at the current rate of consumption. Crude rubber prices in the third week of December had advanced from the all-tim e low of slightly above four cents a pound, but at 4% cents, were just about h alf as high as in December, 1930. Other M anufacturing A ctivity in som e of the sm aller manufacturing industries o f the D istrict in creased slightly in the first half of No vember, but receded in the latter part of the month and early December. The falling-off was quite general. It was partly seasonal, but even the very low level at which business has proceeded for over a year seem s to have had little effect on seasonal changes. W ith the exception of textile concerns and companies directly allied with the autom obile industry, the decline in em ployment from October to November w as in excess of the average drop for that period in the preceding five years. The ceramic industry is experiencing seasonal dullness. Based on employment figures of 62 reporting concerns, the falling-off in November was greater than the aver age decline of the past five years, with early December showing no change. P late glass companies reported some pick-up in late November, due to demand for autom o bile glass, but this fell off in early December. Operations Warm weather has had a retarding effect on sales all fall, and has caused buyers to defer advance orders on spring merchandise. W ages in the clothing industry in the past year have been reduced from 10 to 20 per cent. Though sales volum e in many cases, compares rather favorably w ith 1930, the dollar value has been very much reduced because o f the decline in prices. Paint production is seasonally low, but demand for au tom obile paint was better than a year ago. Industrial paints are in very lim ited demand. D ealers’ buying of household paint always is very much reduced at this season. Paper production declined in November, but, contrary to seasonal changes, increased in December. Prices have been reduced, and operations are about 60 per cent of capacity. Operations of electrical apparatus and supply concerns dropped in November to the low est level for this depres sion, and early December evidenced little change. Part tim e operation has reduced earnings of em ployees ma terially. W age reductions have not been general, but are reported in som e cases. Demand for m achine tools, dies, etc., improved in November, but som e slackening was apparent in early December. The upturn resulted from autom obile or ders which soon declined. Releases for new machin ery are lim ited, though it is felt in the trade that there is a pent-up demand aw aiting favorable indications in other lines. A nticipation of inventory taking also is a retarding factor. Hardware and specialty concerns report little change, w ith few releases on orders already obtained prior to the first of the year. Tin plate and m etal container producers report op erations on a level much above m ost other industries, w ith sales only slightly behind 1930, but packers’ stocks are large. Shoe production at factories in the Fourth District in November declined 24 per cent from October, about the average falling-off shown in the preceding eight years. Output was 31 per cent ahead of November, 1930, chiefly because there was a very sharp reduction in November last year. Compared w ith the average November produc tion in the eight years 1923-1930, there was a drop of 40 per cent in the latest month. Shoe manufacturers have maintained operations quite w ell this past year, for output in the first 11 m onths of 1931 was 0.4 per cent ahead of the sam e period of 1930. A slight increase in THE MONTHLY BUSINESS REVIEW 6 operations in early December was reported at factories in Southern Ohio. TRADE The dollar value of retail sales at 56 department stores in the Fourth District in November was 17.5 per cent sm aller than in the corresponding month of 1930, and the falling-off in the eleven-month period from the same interval of the preceding year was 12.4 per cent. Fairchild’s index of prices at department stores in the entire country, which has been computed since January, 1931, was 15 per cent lower on December 1 than in January. The seasonally adjusted index of daily average sales was slightly higher in November than in October, still it was much below other years. Prelim inary reports on Christmas buying indicate that dollar sales are behind 1930 in about the same amount as in earlier periods of 1931. Unusually warm weather has retarded sales of seasonable clothing, shoes, etc. The dollar value of retail stocks on December 1 was slightly higher than a month earlier, but the expansion was sm aller than seasonal. Compared with a year ago, the value of stocks at retail was off 16 per cent. Collections fell off slightly, and the percentage of accounts receivable at the beginning of the month which were collected in November was 11 per cent under the same period of 1930. Furniture and wearing apparel store sales showed a greater decline in November, compared with a year ago, than did department store sales. Chain grocery sales, on a unit basis, were nine per cent sm aller in November, and down five per cent in the first eleven months, compared w ith sim ilar periods of 1930. Chain drug sales were off eight and four per cent in November and the first eleven months, respectively. W holesale trade, based on figures from four reporting lines, was 23 per cent sm aller in November than a year ago. W holesale grocery sales were off 22 per cent, drugs 17 per cent, hardware 23 per cent, and dry goods 30 per cent. BUILDING Contracts awarded in this D istrict in November in creased slightly from October, a contrary to seasonal move ment, but, at $14,479,000, they were 61 per cent below the same period last year. In the eleven-month period, building contracts tabulated by the F. W. Dodge Corpora tion had a value of only $261,233,000, a reduction of 45 per cent from the sam e period of 1930, which in turn was 20 per cent below 1929. The falling-off this past year has been quite general. R esidential building showed a som ewhat sm aller decline than som e other m ajor groups, chiefly because the reduc tion in this type of building started a year earlier than in non-residential and public construction. N evertheless, residential building in the eleven-month period was 37 per cent under 1930, and the decline in November from the same month last year was 48 per cent. Public works and u tility construction, counted on to relieve unemployment, and which held up rather w ell in 1930 and earlier months of 1931, declined rather sharply in the latter half of the year. For the first eleven months, it was about 50 per cent below the same period of 1930. In November, these awards w ere off 30 per cent from one year ago, but nearly 75 per cent above October, 1931. There was less non-residential building in November than in October, and total awards in the month w ere only about one-fourth as large as a year ago. In the elevenmonth period non-residential contracts awarded were less than half as large as in the same interval of 1930. Contemplated projects reported continue about half as large as a year ago. R esidential planning is about two-thirds what it was a year ago, but for nearly two years contemplated residential building has exceeded con tracts awarded, and recently the spread between the two has been widening. Disturbed industrial and financial conditions in the District have adversely affected this type of building. Building materials and supply dealers have experienced no change in demand from the low levels that have pre vailed for som e time. Union wages, in som e sections, have been or are being reduced. Lumber prices are quite low, in some cases below cost of production. AGRICULTURE Tobacco A fter a som ewhat stormy opening on December 7-9, the burley tobacco mar kets of Kentucky have been functioning smoothly, w ith an enormous quantity of tobacco being offered for sale. Sales at Lexington in the first w eek were over seven m illion pounds. The quality of the leaf offered so far is low er than was expected when the tobacco w ent into the barns. It is, however, a good crop w ith less than the average amount of fancy grades, but also much less low grade and nondescript tobacco. The crop is redder in color than usual. Prices on opening sales, 10 to 11 cents a pound, were very low compared with previous years. Opening sales in 1930 averaged 20 cents a pound, 22 cents in 1929, and 31 cents in 1928. Although prices are half what they were a year ago, they reflect in part the enormous crop of burley tobacco and the decline in cigarette con sumption. Farmers are w ithholding much of the low-grade to bacco, which at present prices does not bring enough to pay hauling and warehouse changes. There is some talk of a pool being formed for the purpose of keeping this low grade tobacco off the market. W heat W inter W inter wheat sown in 1931 was 4,467,~ 000 acres, or 10.4 per cent below the acreage planted in the fall of 1930, but was slightly above the intended acreage reported in August, 1931. The condition of the w heat on December 1 was 79.4 per cent of normal, according to the Department of Agriculture, 6.9 points below last year’s condition, and 3.8 points below the ten-year average, 1921-1930. W ith the exception of 1921 and 1917, this year’s condition is the low est since 1890. In the states of the District, the acreage planted, com- THE MONTHLY BUSINESS REVIEW pared with 1930, was above the average for the entire country, and with a December 1 condition of 95 in Ohio, 88 in Pennsylvania and 90 in Kentucky, w inter wheat was in better condition than last year or the 1921-30 average. Fourth D istrict Business Conditions (000 omitted) Fourth District Unless Otherwise Nov., % change Jan.-Nov., % change Specified 1931 from 1930 1931 from 1930 Bank Debits—24 cities.................. $ 1,800,000 —30.9 27,008,000 —20.5 Savings Deposits—end of month: 27 selected banks, O., W. P a ... .$ 693,468 — 9.6 744,4111 — 1.5 Postal Receipts—9 cities...............$ 2,431 — 12.0 30,087 —28.6 Life Insurance Sales: Ohio and Penna. . . . . . . 91,046 + 0.1 1,037,820 — 15.4 Retail Sales: Department Stores—56 firms. . . . £ 17,511 — 17.5 202,982 — 12.4 Wearing Apparel—13 firms......... $ 979 —21.7 12,127 — 13.7 Furniture— 49 firms.. . . . . . . . . . .$ 607 —24.2 8,442 —21.0 Wholesale Sales: Drugs—13 firms.............. ............. $ 1,198 — 17.2 15,762 — 9.5 Dry Goods— 11 firms..................$ 1,215 —30.1 14,414 —27.4 Groceries—38 firms.......................$ 3,759 —21.5 48,356 — 18.9 1,154 —22.7 13,532 —22.2 Hardware— 15 firms..................... $ Building Contracts—Residential. .$ 2,992 — 48.3 63,360 —37.0 ” —Total............ $ 14,479 —61.4 261,233 —44.8 Commercial Failures—Liabilities. . $ 6,425 + 5 8 .4 79,250 + 9 9 .7 ” ” — Number... 191* + 1 3 .0 2,1103 + 1 4 .9 Production: Pig Iron, U. S......... . . . . . . . T o n s 1,102 —40.9 17,283 —42.0 Steel Ingots, U. S..................Tons 1,594 —27.9 23,598 —36.7 Automobiles— Pass. C ars...U . S. 48,1852 —52.1 1,870,3023 —29.6 —Trucks............ U .S. 19,6832 —44.7 393,0042 —26.9 11,334 —23.6 138,685 — 19.2 Bituminous Coal.................... Tons Cement—O., W. Pa., W. Va..Bbls. 769 —29.1 10,536 —37.0 Elec. Power—O., Pa., Ky.. .k.w.h. 1,1688 — 7.3 11,284* — 6.6 Petroleum—O., Pa., K y....B b ls. 2,244** + 3.7 19,362* — 15.3 « + 3 1 .3 * +0.4 Shoes........................................ Pairs Tires, U. S............................Casings 2,390* — 17.1 34,993* — 4.3 Bituminous Coal Shipments: Lake Erie Ports.. . . I . . . . . . . Tons 3,197 — 12.0 31,332 — 17.7 Iron Ore Receipts: 457 —72.0 14,756 —53.6 Lake Erie Ports__. . . . . . . . . Tons 1 Monthly Average 4January-October 3Actual 5 Confidential 8October Fourth D istrict Business Indexes (1923-1925 = 100) Nov., 1931 66 131 146 94 Sales— Life Insurance (Ohio & Pa. ). . . . 109 ” — Department Store (56) ............... 78 ” — Wholesale Drugs (13)................ 76 46 ** — ** Dry Goods ( 1 0 ) . . . . ” — ” Groceries (38)........... 62 57 ** —• ** Hardware (15).......... ” — ” All (76)...................... 60 ” — Chain Drugs (3)**...................... 78 30 Building Contracts—Total..................... ” ” —Residential............ 17 63 Production — Coal (O., W. Pa., E. Ky.) —Cement (O., W. Pa., W. Va. ) 64 »» —Petroleum (O., Pa., Ky.)* 121 ” — Elec. Power (O., Pa., Ky.)* 139 48 —Shoes................................... ♦October ^♦Per individual unit operated. Bank Debits (24 cities). . . . . . . . . . . . . . . Commercial Failures (number). . . . . . . . ” ** (liabilities)........... Postal Receipts (9 cities)............... . DEPARTMENT STORES (56) A kron.................................................... Cincinnati....................................................... Cleveland........................................................ Columbus....................................................... Pittsburgh...................................................... Toledo............................................................. Wheeling........................................................ Youngstown................................................... Other Cities................................................... District......................... .................................. WEARING APPAREL (13) Cincinnati.............................. ........... .. Other Cities.......... ........................................ District............................... ................. ........ FURNITURE (49) Cincinnati....................................................... Cleveland........................................................ Columbus..................... .................................. Dayton............................................................ Toledo............................................................. Other Cities.................................................. District......................................... ............. CHAIN STORES'* Drugs—District (4)........... .. Groceries— District (6)......................... WHOLESALE GROCERIES (38) Akron............................................................ . Cleveland....................................................... Erie................................................................. Pittsburgh...................................................... Toledo............................................................ Other Cities................................................... District........................................................... WHOLESALE DRY GOODS (11).......... WHOLESALE DRUGS (13).................... WHOLESALE HARDWARE (15).......... *Sales per individual unit operated. Canton............ Homestead---- Middletown... Oil City.......... Youngstown.. . Total.. . . . . . . . —37.5 —17.0 —33.9 —30.7 —25.7 —20.3 —24.2 — 13.7 —21.2 —21.9 —25.4 —23.8 — 18.2 —21.0 Cincinnati.......... Cleveland............ Cleve. Suburbs:.. Columbus............ Covington, K y . . Dayton............... — 7.9 — 9.4 — 4.1 — 4.6 Hamilton............ —32.3 —28.0 — 18.9 — 13.1 — 15.2 — 19.0 —21.5 —30.1 — 17.2 —22.8 —27.9 —22.9 — 18.8 — 8.1 — 14.7 — 17.6 — 18.9 —27.4 — 9.5 —22.2 Ashtabula........... Mansfield............ Middletown........ Pittsburgh, Pa... Portsmouth........ — 13.7 +* 3 :3 37 78 122 137 109 106 88 100 93 98 88 50 41 96 128 137 164 88 Nov., 1928 122 92 59 118 122 110 109 97 98 99 100 83 119 78 97 132 116 150 79 Nov., 1927 110 101 78 120 106 112 106 97 99 101 100 90 82 96 77 128 110 134 96 4 weeks ending Dec. 16, 1931 60,053 7,478 17,435 263,928 446,026 105,154 44,187 26,245 3,038 7,849 2,637 15,963 8,295 3,431 6,366 9,157 655,047 12,654 6,727 71,349 4,718 30,567 21,563 6,554 1,836,421 % change from 1930 —23.2 —30.8 —48.1 — 15.6 —37.8 —34.0 — 34.6 — 17.1 —27.6 —29.2 —30.4 — 19.4 — 14.5 —30.6 —29.0 —26.3 —24.0 —33.5 —21.3 —53.2 —43.6 —26.3 —58.3 —27.1 —30.4 Year-to-date Year-to-date Jan. 1 to Jan. 2 to Dec. 16, Dec. 17, 1931 1930 912,061 1,123,765 101,032 149,100 383,255 516,985 4,323,829 3,799,975 9,407,427 7,538,645 1,725,157 2,117,264 837,746 1,032,170 361,748 451,913 43,419 58,555 126,499 165,154 44,402 52,682 221,197 284,249 145,513 119,192 67,220 56,318 99,345 125,682 141,490 190,086 8,699,370 11,472,816 202,094 259,715 96,110 118,526 2,085,259 1,443,122 92,116 134,048 510,047 421,705 549,124 781,610 99,873 117,025 28,114,995 35,690,640 % change from 1930 — 18.8 — 32.2 —25.9 — 12.1 — 19.9 — 18.5 — 18.8 —20.0 —25.8 —23.4 — 15.7 —22.2 — 18.1 — 16.2 —21.0 —25.6 —24.2 —22.2 — 18.9 — 30.8 —31.3 — 17.3 —29.7 — 14.7 — 21.2 (Dollar Value of Permits) — 11.7 — 14.7 — 13.7 —25.0 82 90 117 150 Nov., 1929 133 82 Building Operations — 16.5 — 24.4 —21.7 — 9.2 — 19.2 —15.9 1930 96 116 92 106 109 90 92 67 79 75 78 84 79 34 (Thousands of Dollars) Steubenville... Percentage Increase or Decrease SALES SALES STOCKS Nov.Nov.First 11 Nov. Nov. months — 15.4 — 18.1 — 8.4 — 15.4 —10.1 — 19.1 — 4.8 — 8.4 — 9.6 — 11.9 — 9.9 —19.5 —24.3 — 15.2 — 14.3 — 14.0 — 21.0 — 8.5 —26.7 — 12.7 — 16.2 -35.2 —21.3 —22.9 —22.1 — 15.0 —22.1 — 17.5 — 12.4 — 15.5 Nov., D ebits to Individual Accounts Wholesale an d R eta il Trade (1931 compared with 1930) 7 Springfield.......... Steubenville........ Toledo................. Warren................ Wheeling, W. Va. Youngstown....... Nov., 1931 56,768 16,380 4,655 1,016,245 554,900 333,661 63,450 13,831 69,704 6,840 97,865 10,790 1,735 14,640 1,020 572,041 2,000 1,350 12,410 5,700 24,167 39,390 20,505 53,865 2,993,912 % change from 1930 —69.7 —42.6 —97.6 —43.9 —77.7 —53.6 —77.0 —53.0 -—53.4 —50.6 —21.8 —95.0 —50.2 —73.0 —94.7 —55.9 —93.8 —70.4 —55.2 —96.4 —89.9 + 4 3 .4 —73.2 —75.1 —64.4 J an.-Nov., Jan.-Nov., % change 1931 1930 from 193< 2,051,929 9,208,033 —77.7 343,171 200,384 —41.6 1,560,663 663,395 —57.5 24,549,300 37,930,007 —35.3 11,688,650 31,797,750 —63.2 11,800,341 16,571,463 —28.8 3,282,650 5,426,650 —39.5 612,931 635,850 — 3.6 2,730,105 4,675,522 —41.6 138,242 265,790 —48.0 2,405,400 3,962,283 — 39.3 460,527 1,370,477 —66.4 115,224 553,714 — 79.2 728,517 678,938 + 7.3 85,658 594,769 —85.6 12,750,113 19,447,832 —34.4 316,400 646,500 —51.1 105,955 258,232 —59.0 1,182,377 759,045 + 5 5 .8 195,590 824,300 —76.3 1,990,919 6,561,745 —69.7 311,607 673,745 —53.8 1,093,050 —44.8 603,735 1,450,250 2,766,059 —47.6 80,420,199 148,605,588 — 45.9 s THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Industrial activity and factory em ployment declined further from Oc tober to November, reflecting in part the usual seasonal tendencies. Con tinued gold imports and further reduction in member bank reserve require m ents during November and the first half of December were reflected in a considerable decline in the outstanding volum e o f reserve bank credit. Index number of industrial production, adjusted for seasonal variation, (1923-1925 = 100). Latest figure, November, 72, Federal Reserve Board’s index of Factory Em ployment, with adjustment for seasonal varia tion, <1923-1925 average = 100). Latest figure, November, 69.4. Indexes of daily average number of cars loaded; adjusted for seasonal variation <1923-1925 = 100). Latest figures, November, total, 68, mer chandise L.C.L., 83 Monthly average of weekly figures fop reporting mcntbor banks in leading cities. Latest figures are averages of first three weeks In December Production and Em ployment In November, industrial production showed a som ewhat larger de crease than is usual at this season, and the Board’s seasonally adjusted index declined from 73 to 72 per cent of 1923-1925 average. A ctivity declined at woolen m ills, lumber m ills and coal m ines, w hile daily aver age output at steel m ills increased and volum e of autom obile production showed less than the usual seasonal decline from the low level o f October. The November increase in steel production was follow ed by a considerable decline in the first three weeks of December. Output of petroleum in creased further in November to a level slightly low er than that prevailing last summer before output was sharply curtailed. Volume of em ployment in m ost m anufacturing industries declined by more than the seasonal amount between the m iddle of October and the middle of November. Reductions were particularly large in the wear ing apparel, leather, and building m aterials industries, w hile in the auto m obile and tire industries declines were sm aller than usual at this season. The value of building contracts awarded, as reported by the F. W. Dodge Corporation, has declined further in recent m onths and a preliminary estim ate of the Board’s seasonally adjusted index for the last quarter of 1931 is 49 per cent of the 1923-1925 average, compared w ith 59 for the third quarter, 65 for the second quarter, and 79 for the first quar ter of the year; part of this decline in dollar volum e reflects low er build ing costs. Production of principal crops in 1931 was about 10 per cent larger than in 1930, according to the December crop report of the Department of Agriculture, w hile acreage harvested was slightly sm aller thah a year ago. There were large increases in the crops of cotton, corn, w inter w heat, apples and peaches, w hile the harvests of oats, barley, and rye were sm aller than last year; as in 1930, the hay crop was unusually sm all. D istribution Commodity distribution continued at about the same rate in November as in October, the volum e of freight car loadings show ing a seasonal de cline, w hile sales at department stores increased by about the usual amount for that month. W holesale Prices The general level of w holesale prices remained practically unchanged from October to November, according to the Bureau of Labor Statistics index; prices of grains, petroleum, and silver advanced, w hile those of live stock and dairly products showed declines, partly of a seasonal character. Between the middle of November and the middle of December there were decreases in the prices of many leading com m odities, including livestock, meats, grains, sugar, silk, and silver; during this period prices of copper and rubber showed a decline, followed by a recovery. Bank Credit Volume of reserve bank credit outstanding declined during November and the first h alf of December, and averaged $360,000,000 less in the week ending December 12, than at its October peak seven w eeks earlier. The decrease was in large part in the banks' portfolios of acceptances as discounts for member banks and holdings of United States Government securities showed little change for the period. The decline in total volume of reserve bank credit outstanding during the period reflected a growth of $100,000,000 in the stock of m onetary gold, largely through imports from Japan, and a continued reduction in the reserve balances of member banks, reflecting a further liquidation of member bank credit. Demand for currency declined during the last three weeks of November and showed considerably less than the usual seasonal increase in the first half of December. A fter the middle of December, however, bank suspensions in New England were followed by som e increased w ithdrawals of currency, part of which has begun to return. Loans and investm ents of member banks in leading cities continued to decline, and on December 9 w ere $370,000,000 sm aller than four weeks earlier. The decrease was equally divided between the banks’ loans and their investm ents. Deposits of these banks, both demand and tim e, also showed a decrease, w ith a consequent reduction in required reserves. Money rates in the open market showed little change from the middle of November to the middle of December. Rates on prime commercial paper continued at 3% to 4 per cent, w hile rates on 90-day bankers’ acceptances advanced from 2% to 3 per cent on November 25.
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