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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the F ourth Federal Reserve D istrict Federal Reserve Bank o f Cleveland No. 7 Cleveland, Ohio, July 1, 1928 Vol. 10 Business in the Fourth District remains spotty, but on the whole is fair to good. Out of 26 of the largest man ufacturers in the District, 15 report that business is bet ter than a year ago, 10 state that it is not so good, and in one case there has been no change. As compared with the first quarter, the second quarter was reported to have shown an uptrend in 13 cases, a downtrend in 9, and no change in 4. The general trend in the first part o f June showed little change from that o f May outside o f seasonal de velopments. Toward the latter part of the month a rather pronounced falling-off in steel operations oc curred which appeared to be somewhat greater than sea sonal. Tire sales have improved lately, following the cut in tire prices. Motor accessory manufacturers continue their heavy production schedules. A fter a poor Spring, a slight recovery is noted in clothing manufacturing. Building as a whole compared unfavorably in May with last year, although residential construction made a new peak. The lumber industry is quiet. Retail trade was a little better in May than last year, and wholesale trade showed a distinct improvement. Winter wheat is still in Solid line— weekly index o f car loadings, F. RB. of Cleveland (1923-1925 = 100), Latest figure: W eek ending June 9— 101.7. Broken line— m onthly indei of industrial pro duction. Federal Reserve Board <1923-1925=: 100). Latest figure: M ay— 109, Both curves adjusted for seasonal variation. bad shape, but the prospects for other crops are brighter than a month ago. General business in the United States in May was about the same as in April, after allowing fo r seasonal fa c tors. The Federal Reserve Board’s index of industrial production stood at 109 in May— the same as in March and April, but two points under a year ago. The Annal ist’s index of general business activity was 96.4 in May, as compared with 96.5 in March and 96.6 in April. This bank's weekly index of distribution, based on car load ings, fluctuated between 103.8 and 105.7 in May, a slight improvement over April. A decline, however, in this curve is noted in early June. For the week ending May 26 the index stood at 104.5; the next week it fell to 104.3, and the next to 101.7, but rose to 102.3 for the week ending June 16. FIN AN CIAL The month of June was marked by heavy Treasury financing, firm money rates, a sharp decline in security prices accompanied by a decrease in brokers' loans, and fu r ther large gold exports. Total credit extended by reporting member banks declined slightly in the first half of the month, and Federal Reserve bank credit extended fell off sharply during the week ending June 20 after an almost uninterrupted rise commencing late in January. Money Rates. New York money rates were conspicu ously firm in June, with an advancing tendency. Time money on the stock exchange rose from 5*6-5% per cent at the beginning o f the month to 5% -5% on the 22nd, and call money rose from 6 to 6 M> per cent during the same period and went to 7 per cent on June 27. The latter rate was the highest for several years, but was partly due to the approach o f heavy mid year settlements. Commercial paper held firm at 4 V24% per cent, with the tendency toward a flat 4% per cent quotation. Bankers' acceptances crossed the 4 per cent line late in May. Treasury Financing. On June 15 the Treasury Depart ment retired $400,000,000 o f certificates of indebteness and put out two short-time issues whose allotments aggre gated $428,000,000, one fo r six months at 4 per cent and the other fo r nine months at per cent. Income tax payments were close to $500,000,000 and debt payments made by foreign countries were nearly $100,000,000. The total turnover o f funds was about $1,500,000,000. Security Prices. On June 2 the Dow-Jones average of 3% THE MONTHLY BUSINESS REVIEW 20 industrial stocks reached 220.96, a new high record for all time. During the next ten days a severe drop took place which brought the average down to 202.65 on June 12. After a two-day recovery the average again worked lower, reaching 201.96 on the 18th. During the fol lowing week prices were irregular and volume was greatly curtailed. Bond prices in the first half of June con tinued the decline which started about the middle of May, but steadied in mid-June. Gold Movements. Gold exports in May were $83,689.000, while imports only amounted to $1,068,000. The net loss through exports of $81,721,000 was the third largest in the past four years, being exceeded by March and April of this year. Earmarkings brought the total net loss to this country’s gold stock in May to $104,743.000, stocks amounting to $4,161,114,000 (preliminary figure) on May 31. Prance continued to take very large amounts of gold in both May and June, and about $30,000,000 was also shipped to England in May. For the three weeks end ing June 20, total gold exports from New York were ap proximately $70,000,000, while imports were less than a million dollars. Member Bank Credit. The principal development here was the drop in loans to brokers and security dealers made by or through New York reporting member banks. These loans reached a record high of $4,563,240,000 on June 6, but two weeks later they had fallen nearly $300,000,000 to $4,269,590,000. This drop accompanied the fall in stock prices. Loans secured by stocks and bonds for all banks in the United States decreased somewhat in the first part of June, while “all other” loans increased slightly. Investments remained virtually unchanged. Total loans, discounts and investments were slightly lower, owing to the decline in collateral loans. Reserve Bank Credit. Bills discounted continued their marked advance up to June 13, when they amounted to $1,043,000,000— a gain of over $600,000,000 since the end of January. The following week, however, brought a drop to $991,000,000. Government security holdings on June 20 were $223,000,000, representing a small in crease from June 6 as compared with the long decline of the preceding five months. Acceptance holdings have now been falling steadily since May 9, but this is partly seasonal. On June 20 they were down to $224,000,000. Total bills and securities on the same date were $1,438.000.000, a drop of $70,000,000 for the week but still high as compared with the level prevailing from Feb ruary through May. Fourth District. Bills discounted by the Cleveland bank, as in the System, rose to a peak on June 13 and then dropped sharply the following week, standing at $79,000,000 on June ?0 as against $90,000,000 the week before. Acceptance holdings declined in June while Gov ernment securities held remained about the same. Total bills and securities were $136,000,000 on June 20, a de crease from the week before but an increase from May 23. Loans of reporting member banks secured by stocks and bonds reached their high point of $690,000,000 for the year late in May and then fell to about $675,000,000 on June 13. All other loans rose slightly in early June. Savings deposits of 68 banks amounted to $1,028* 028,000 on June 1, a gain of 1 per cent for the month and of 7.8 per cent for the year. Commercial failures in the Fourth District, according to Dun’s, numbered 157 in May as compared with 125 in April and 148 a year ago. Liabilities were $2,377,533 in May, $7,055,083 in April, and $3,225,890 a year a go . In the United States there were 2008 failures in May* 1818 in April, and 1852 a year ago. * Debits to individual account at 13 large centers in th is District were $2,705,272,000 in May, $2,741,802,000 in April, and $2,589,809,000 in May of 1927. The following table gives the changes in the m ain items of the balance sheets of Federal reserve and re porting member banks: Federal Reserve Bank o f Cleveland f In Millions) June 13, June 15. May 16. 1928 1927 1928 248 292 260 Gold reserves ............. Discounts ..................... 91 59 59 Acceptances ....— ....— 24 18 34 U. S. Securities............ 336 46 37 Total bills and securities 149 123 130 Federal Reserve notes in circulation ------195 212 192 Total deposits ----------- 191 200 190 Federal Reserve (In Millions) m June 19, June 15. «« 1928 1927 2,580 3,017 o JZl 1,043 361 *252 240 183 223 547 1.508 1,092 1 55? 1,605 1,698 1 2,436 2,474 Reporting Member Banks Fourth District United States (In Millions) (In Millions) June 13, June 15, May 16, June 13, June 15, M a » 1 . 1928 1927 1928 1928 1927 Loans secured by stocks and bonds ................ 672 641 676 6,908 5,999 7 All other ..................... 784 780 781 8,970 8,649 8*251 Total loans ................. 1,456 1,422 1,456 15,878 14,648 115 215 Investments ................. 746 678 747 6,658 6,176 Si 2 fT Demand deposits ....... 1,060 1.110 1,080 13,717 18,727 lS*S51 Time deposits ............. 959 868 985 7,002 6,172 Iron and Steel Production of both pig iron and steel ingots declined in May, the form er inappreciably and the latter rather sharply, yet operating rates generally continued on a higher plane than a year ago and a record first half year in ingot output appeared in the making. Within th e industry the let-down in May was more noteworthy f or its mildness than its appearance, and fostered a situa tion spotty both as to products and districts. Despite support from the automotive industry, the Pittsburgh and northern Ohio districts gave more ground than the Chicago and eastern Pennsylvania district Car builders, tank makers and pipe mills were unable May to equal last May’s rates, but tin plate mills and sheet producers, especially of the full-finished grad were pressed frequently to make deliveries. Outstanding in pig iron was the break in basic ir late in the month. Following a transaction involving011 small tonnage at $17.00 per ton, delivered Alliance a contrasted with a price of $17.00, valley, that had pe** sisted for a number of months, a Pennsylvania consum ^ closed on 46,000 tons, part of which came from a steel* maker quoting $15.35, valley. Bessemer and fo u n d ,l iron proved sympathetic immediately. As May closed efforts were under way to stiffen the basic market * $16.00. to Steel prices continued predominantly weak. In hot and cold rolled strip, prices slumped to the first quarter i0^ THE MONTHLY BUSINESS REVIEW points. In sheets substantially all of the price gains of the first quarter also were surrendered. Heavy steel continued at $1.85 per 100 pounds (Pittsburgh) with an announced $1.90 price for the third quarter, which was not tested. Some semi-finished steel users suc ceeded in their contention that semi-finished prices be marked down $ 1.00 per ton to reflect the weakness in basic iron. Consumption, however, remained unimpaired by this soft situation in prices, as evidenced by the mar gin over last May in production. The daily rate of pig iron production in May was 105,962 tons, barely under the 106,066 tons of April, and at the close of May, 197 blast furnaces were in opera tion, or three more than at the close of April. Early in June, however, the blowing out of stacks both at Chicago and Pittsburgh neutralized this gain. May’s total pig iron output was 3,284,811 tons, bringing the five-month total up to 15,420,144 tons, against 16,339,501 tons in the like period of 1927. Though steel ingot output fell from 172,103 tons a day in April to 155,674 tons in May, the 155,663 tons of last May was just topped. May production, in fact, was the second best for that month in steel history. The total of 4,203,190 tons in May made possible a five-month total of 21,049,919 tons, against only 20,311,778 tons in the corresponding period of last year. Thus far in 1928 steel making capacity has been engaged 85.89 per cent. The soft price situation is reflected in the Iron Trade Review’s composite of fourteen leading iron and steel products. This index averaged $35.54 for May, con trasted with $35.67 for April, $35.81 for March and $36.76 last May. 3 and 1927, but somewhat less than in 1926. Ohio pro duction has been slowly picking up until it is materially greater than a year ago, following the calling of the strike on April 1, 1927. Ohio’s output, however, is still only one-fourth of the level which prevailed in the state several years ago. Production in Pennsylvania and east ern Kentucky in May was slightly less than a year ago. Reduced freight rates on lake cargo coal originating in the Pittsburgh area, effective June 18, has provided a stimulus to shipments from that area. Rubber and Tires The most important development of the month in this industry was the cut in tire prices by leading manufac turers about the middle of June. The average reduction was 10 per cent. Such a reduction was not unexpected in view of the sharp slump in crude rubber prices, and dealers had been keeping their purchases to a minimum in anticipation of the cut. Business of Akron manufacturers was relatively slow in May and the first part of June, due to the cool weather, which retarded public buying, and to the disinclination of dealers to stock up, already mentioned. An improvement has recently taken place and prospects are brighter. Crude rubber prices have strengthened slightly in re cent weeks but are still at an exceedingly low point. On June 18, first latex (spot) was quoted at 20 cents a pound, as compared with 19 cents a month ago, 17% cents late in April, and 39 cents a year ago. Production of pneumatic casings in the United States, according to the Rubber Association of America, was 4,633,308 in April, a decrease of 92,000 for the year and 481.000 for the month. Shipments numbered 4,358,831, as compared with 4,276,464 a year ago and 4,298,551 for March. Inventories were seasonably high and were also somewhat larger than last year and the year before. World rubber production (net exports), according to the Department of Commerce, was approximately 175,000 long tons for the first four months of 1928. Of this amount, 55,000 tons were produced in British Malaya and 25.000 tons in other British possessions, making a total of 80.000 tons for British-owned plantations. Dutch colonies produced almost the same amount, Brazilian output was 7,649 tons, and Mexican Guayule rubber amounted to 2,008 tons. Automobiles in view of the size of stockpiles in consumers’ hands, and as a result prices showed further weakness. The Coal Age average for May (spot, mine) was $1,728, as compared with $1,743 in April and $1.86 a year ago. The present price is about 8 per cent under the 1926 average. Production of bituminous coal in the United States during May was approximately 36,542,000 net tons. The daily average rate showed a slightly advancing tendency during the month and was about equal to that of 1925 The rapid gain in automobile produc tion since the first of the year cul minated in a figure of 425,990 for May, the highest in two years. In May of 1927, car and truck production amounted to 404,115. The greater part of the increase during recent months may be as cribed to seasonal factors, but after eliminating such factors it is found that a recovery has been staged from the low level of the industry existing in the last quarter of 1927. For the first five months of 1928 production was 1,805,060 cars and trucks as compared with 1,747,007 last year, a gain of 3.3 per cent. Passenger car output was 1,609,223 as against 1.523,891 last year, while truck output declined from 223,116 a year ago to 195,837 in 1928. Some concerns were experiencing a slowing-down i 4 THE MONTHLY June owing to preparation o f new models, while Ford and one or two others were swinging into heavier pro duction. Reports indicate a good buying demand in this District. Registration of new passenger car bills of sale in May in 59 Ohio counties was 12 per cent greater than a year ago and 6 per cent greater than in April, accord ing to the Ohio State University Bureau o f Business Re search. Cuyahoga County (Cleveland) showed a gain o f 7 per cent over last year; Hamilton (Cincinnati) a gain o f 20 per cent; Lucas (Toledo) a gain of 35 per cent; and Franklin (Columbus) a gain o f 11 per cent. The chart below shows that automobile production in May almost reached the high points o f 1925 and 1926. BUSINESS REVIEW hosiery, 10.4; and men’s furnishings, 1.8 per cent. On the other hand, men’s clothing sales decreased 10.5 per cent, women’s dresses 1.9, knit underwear, 1.0, an d silk and muslin underwear 5.1 per cent. Shoes This line has been subject to ra th e r pronounced ups and downs d u rin g recent months. Operations of m an ufacturers in the Fourth District in January and F eb ruary were heavy. A slowing-down took place in M a rch which was other than seasonal, although activity w a s still high. A further slackening appeared in A p r il when production dropped abruptly from March and w a s also considerably lower than a year ago. May b ro u g h t a revival in retail and wholesale shoe sales, but p r o _ duction was still low. Preliminary production fig u re s indicate a loss o f 20.9 per cent from a year ago. i n June, manufacturers reported that their salesmen o n the road were booking an excellent volume of b u sin ess and that prospects for the summer are correspon din gly bright. Unseasonably cool weather, a retarding fa c t o r in the Easter selling season o f March and April, had given way in mid-June to more normal early-sum rner temperatures. May likewise brought an improvement to the w hole sale end o f the shoe trade. For the first time this year* sales o f Fourth District reporting wholesale shoe fir m s were larger than in the same month o f 1927. The i n crease was 1.9 per cent, and May also recorded a g a in of 6.4 per cent over April. For the first five months o f 1928, sales were 11.8 per cent less than in the corr^ sponding period o f 1927. Clothing Unseasonable weather proved a handi cap to clothing manufacturers in April and May. Demand from retailers was slow, and buying was largely restricted to immediate needs. As a result, business compared unfavorably both with the first quarter and with last year. Some better ment has been noted recently, but it is a question as to whether this is developing sufficiently to make up for the loss of business caused by the cold weather. Business in knit goods is now running a little ahead o f last year. Manufacturers o f men's clothing report sales as being less than a year ago, and the same is true o f men’s underwear. Business in woolens is quiet. Demand for women's ready-to-wear is showing signs of picking up, after a good month in May from the re tail standpoint. Both wholesale and retail clothing sales in May showed sizable increases over last year. In the case o f whole sale dry goods, the majority of reporting firms suffered a loss in sales as compared with May, 1927, but this was more than made up by the rest, the 13 firms com bined showing a gain o f about 10 per cent. A fter a very poor April, sales o f most lines o f re tail clothing in 46 department stores in this District in May were well ahead of last year. Women's coats gained 15.6 per cent; misses’ coats and suits, 25 per cent; misses’ dresses, 3.1; girls’ wear, 22.0; sports’ wear, 6.9; aprons and house dresses, 18.9; furs, 26.8; infants’ wear, 7.8; Substantial increases over last year in retail shoe sales also took place in May. Reports from the shoe de partments o f 46 department and apparel stores in thi~ District showed a gain of 30 per cent in children’s shoes3 6 per cent in men’s, and 3.9 per cent in women’s shoes* Hide prices in May and June failed to maintain previous advance and on June 15 were some three a pound lower than in April, standing at 22% Leather prices have held firm at 69 cents a pound leather). the* * ce n t* cent * (s o f* le In various manufacturing lines in th Fourth District, operations in the sec6 ond quarter compared favorably both with the first quarter and a year ago. Considerabl spottiness exists at present, with the general trend u 6 changed or slightly downward since the first o f Jun*" Boxboard. Competition remains exceedingly keen a second quarter earnings have been considerably less th both last year and the year before. n oth er Manufacturing Can. Sales in the first half year ran ahead o f l year. June sales were good. Cigar. Manufacturers are doing a smaller volume business than a year ago. Cork. The second quarter was slightly better th the first, and also exceeded the same period in iq o ** and 1926. June business was about the same as in M Electrical. Unevenness is apparent in this line. prevailing state o f business in the second quarter peared to be below the first quarter (partly season &l)~ THE MONTHLY BUSINESS but above a year ago. June business has been either unchanged or slightly lower as compared with May. Glass. Improvement continues in window glass. Pro duction and manufacturers' stocks are low, while demand is strong. Business in plate glass has not held up so well; automotive demand has recently slackened, and profit margins are small. Machinery, Machine Tools. Sales of machine tools are fair to good. Motor demand was high in April and May, but has been slightly lower in June in some instances. Good business is reported by agricultural implement makers. Sales of woodworking machinery and engineer ing specialties in the second quarter were less than last year. Paint. Business is materially better than a year ago. The present trend is upward after allowing for seasonal factors. Paper. April and May brought an improvement over the first quarter, but some hesitation appeared in June. The second quarter as a whole showed up better than the same period last year. AGRICULTURE Field crops in the District, retarded in growth by the unseasonably cool, dry weather of Spring, are rapidly making up for lost time. The weather in May was quite favorable for farm work and all that was needed was the general rains of early June to improve the condition of the crops planted. Wheat About one-quarter of the entire winter wheat acreage in the United States was abandoned. The June 1st con dition of 73.6 per cent for the country indicates a pro duction of 512,252,000 bushels, compared with 552,000,000 bushels harvested in 1927. Ohio winter wheat prospects on June 1 were for a crop of 8,501,000 bushels, indicated by a condition o f 46 per cent, as compared with 28,980,000 bushels harvested in 1927. The average June 1 condition for the past ten years was 80 per cent. West Virginia reports a condition o f 66 per cent of normal on June 1, the lowest at that time since 1866. This points to a production of 1,390,000 bushels as com pared with 2,101,000, the average harvest of the past ten years. Kentucky’s June 1st wheat condition o f 48 per cent o f normal indicates a crop o f only 26 per cent of the one harvested in 1927. The 1927 crop was 3,059,000 bushels and the crop for 1928 is expected to be about 801,000 bushels on the basis of present estimates. The condition of winter wheat in Pennsylvania on June 1 was 71 per cent as compared with the ten-year av erage of 87 per cent. Using this estimate as a basis for comparison, the 1928 crop is expected to be 17,651,000 bushels as against a ten-year average of 21,795,000 bushels. Oats The heavy rains in June have materially changed the condition of the oat crop in the District. The latest re port for Ohio (June 1) shows a condition o f 74 per cent of normal as compared with 82 per cent a year ago; fo r 5 REVIEW Kentucky, 77 per cent as compared with 75 per cent a year ago; and for W est Virginia 78.3 per cent, the lowest by a small margin ever reported on that date. Hay and Pasture Unfavorable growing weather this Spring, together with considerable winter-injury to alfalfa and clover, is now reflected in the low conditions for Ohio pastures and hay crops. On June 1st pastures had an average condition of 66 against 94 a year ago; all tame hay, 61 against 89 last year; clover and timothy 61 against 89; and alfalfa, 63 as compared with 86 per cent one year ago. West Virginia reports poor stands among the hay crops. A condition of 72 per cent is shown fo r this June as compared with 90 per cent last year and a tenyear average of 83 per cent. The condition o f all tame hay in Kentucky averaged 69 per cent, timothy and clover hay 67, alfalfa 71, and pasture 73 per cent o f normal. Fruits The condition of the apple crop in Ohio on June 1 was 61 per cent o f normal compared with 56 per cent last year. Some frost damage occurred this Spring and the dry weather up to June 1 was rather unfa vorable to a good crop. Many reports state that apples are showing a heavy drop. The peach crop for Ohio as indicated by the June 1 condition points to a crop of 1,386,000 bushels this year as compared with the 1927 crop of 1,326,000 bushels. The forecast fo r the Ohio pear crop was 341,000 bushels on June 1, against 250,000 bushels produced last year. The fruit situation in W est Virginia is quite favorable as compared with the poor crop harvested in 1927. The June 1st condition o f apples is 64 per cent as com pared with 31 last year and indicates a much larger crop than in 1927. Peaches show a condition at pres ent o f 61 against 19 per cent in 1927 and points to a crop of 762,000 bushels as compared with the crop of 202,000 bushels a year ago. Potatoes The heavy rains of early June have caused consider able alarm with regard to the condition o f the 1928 po tato crop. Many seed potatoes are rotting in the ground and although it is not too late to replant, good seed p o tatoes are scarce and high priced in this District. Farm Prices The index of wholesale prices of farm products in May as compiled by the Bureau o f Labor advanced 2.2 points above the April level to 109.8. This is well above the figure of 96.3 one year ago. The rise was due mainly to price in creases in corn, oats, rye, wheat, hogs, cotton, eggs, alfalfa, timothy hay, and citrus fruits. Prices o f sheep, lambs, poultry and potatoes were lower in May than in April. Tobacco The progress of the new burley to bacco crop in Kentucky up to June 20 was distinctly favorable. Practically all the plants have now been set, and in spite of early fears over their condition, reports indicate that the stands generally are excellent. Some of the plants are small, THE 6 MONTHLY but the great majority are vigorous and give promise of good quality leaf. But little damage from insects was reported up to the middle of June. All estimates indicate a considerable increase in acreage over last year, those from private sources pointing to a 40 or 50 per cent gain. In this connection, however, it must be remembered that last year’s crop in Kentucky was short, being nearly 50 per cent under the 1922-1926 average. BUILDING Residential contracts awarded in May in this District made a new high record fo r that month. Total awards of all types fell below last year's figure, although larger than in any May before 1927. Total contracts awarded were $63,813,000, as compared with $70,938,000 a year ago and $56,810,000 in May of 1926. Residential contracts amounted to $27,845,000, as compared with $22,189,000 and $18,159,000 in the two preceding years. For the first five months o f 1928, total contracts were $265,062,000 as compared with $300,471,000 in 1927, a decline o f 11.8 per cent. Residential awards were $101,625,000 as against $106,140,000, a decrease o f 4.3 per cent. The valuation of building permits in 27 cities in May was 2.6 per cent less than a year ago, but the first five months o f 1928 registered a gain o f 4 per cent. For the month, the largest gains took place in Ashtabula, Euclid, Dayton, Hamilton, Newark, and Springfield, while the greatest decreases were in Cleveland Heights, Garfield Heights, Parma, Rocky River, Lexington, Lima and Pittsburgh. For the first five months, large gains occurred in Euclid, Lakewood, Dayton, and Newark, while the greatest losses were shown by Columbus, Erie, Lima, and Springfield. The Aberthaw index o f industrial building costs re mained unchanged at 191 on June 1. Building Operations May, 1928 Akron................. 1,811,727 Ashtabula......... 59,489 Barberton......... 183,201 C anton............... 390.159 Cincinnati. . . . 4,458,060 Cleveland......... 4,424,325 Cleveland suburbs Cleve. Heights 449,495 East Cleveland 80,956 Kuclid.............. 326,045 Garfield H ts.. 200,100 Lakewood. . . . 329,531 Parma.............. 332.698 Rocky R iv er., 83,535 Shaker H g ts. . 672,725 Columbus......... 2,042,800 Covington. K y. 175.400 D ayton .............. 2.759,009 Erie, Pa.............. 399.442 H am ilton.......... 279,143 Lexington, K y. 123,775 Lim a................ .. 47.400 Newark.............. 313,815 Pittsburgh, P a. 2.559,717 Springfield . . . . 129,560 Toledo................ 1.337,676 Wheeling. W . Va 255,841 Youngstown. . . 919,869 (Valuation of Permits) % change Jan.-M ay from 1927 1928 4 -1 2 .1 7,441,605 + 4 0 .8 180,662 + 3 3 .1 457,626 + 2 8 .2 1,958,458 + 1 4.9 14,061,810 19,321,075 — 1 .6 Jan.-M ay 1927 9,096,859 224,180 487,166 1.491,683 12,217.888 16.413,800 % change from 1927 — 18.2 — 1 9 .4 — 6 .1 + 3 1 .3 + 15.1 + 17.7 2,222,775 540,329 1,231,086 951,650 1,837,743 1,186,908 485,863 3.448,140 7,862,000 708,850 6,214,442 1,506,407 758,353 665,700 212,074 4 8 6 .4 8 0 17,630,409 479,112 8,590,647 858,640 3,525,334 2,314,437 454,783 727,783 1,056,600 1,126,732 1,583,922 612,663 3,601,925 11,926,600 779,000 4,174,032 2,350,567 941,037 840,618 414,986 183,108 15,658,622 689,411 6,145,003 1,170,356 4,139,520 - 4 .0 + 18.8 + 6 9 .2 — 9 .9 + 6 3 .1 — 25.1 — 2 0 .7 — 4 .3 — 34.1 — 9 .0 + 4 8 .9 — 35 .9 — 19.4 — 2 0 .8 — 4 8 .9 + 165.7 + 12.6 — 30.5 + 3 9.8 — 2 6 .6 — 14.8 104,824,178 100,823.281 — 4 6 .4 + 17.5 + 6 1 .8 — 5 1 .3 — 3 8 .2 — 5 4 .0 — -42.6 — 1 5.0 — 14.5 — 3 8 .4 + 2 5 6 .2 — 4 .8 + 4 4 .7 — 5 0 .9 — 7 5 .7 + 8 7 2 .5 — 4 5 .4 + 4 2 .2 — 1.4 — 4 .8 + 3 4 .4 T o ta l..................... 25.145,493 Retail Trade seasonably cold — 2 .6 + 4 .0 TRADE Sales o f 62 department stores in May were 1.6 per cent larger than in the same month last year, despite the un weather. All reporting cities except BUSINESS REVIEW Pittsburgh shared in the increase. For the first five months of 1928, sales were 1.4 per cent less than in the corresponding period o f 1927. Thirty out o f 49 individual departments reported increases in sales over May, 1927. The percentage changes in the principal departments were as follow s: % change, M ay, 1928, com pared with May, 1927. Silks and Velvets ................................................ — 14.0% Millinery ................................................................. +20.7 Hosiery ................................................................... +11.7 Women’s Shoes .................................................... + 4.7 Women's Coats ...................................................... +16.6 Women’s Dresses .............................................. — 1.3 Misses’ Ready-to-Wear ...................................... +12.1 Juniors’ and Girls’ Wear .................................. +15.7 Men’s Clothing .................................................... — 8.6 Men’s Furnishings .............................................. + 6.3 Boys’ Wear .......................................................... + 6.5 Furniture .............................................................. — 17.5 Floor Coverings .................................................. — 1.5 Draperies, Lamps, Shades ................................ — 1.0 House Furnishings .............................................. -f 2.0 Wholesale Trade All reporting wholesale lines in th is District recorded increases in M ay sales as compared with a year a g o. This is the first time that has happened since October, 1923. Drugs led with a gain o f 9.8 per cent; dry g ood s gained 9.3 per cent; groceries, 7.2; shoes, 1.9; and h ard ware, 0.5 per cent. For the first five months of 1928, groceries, dry good s, and drugs showed increases over last year of 3.2, 2.6 , and 1 per cent respectively, while hardware sales w ere down 8.2 per cent and shoes, 11.8 per cent. Turnover Rate The following table gives the annual rate of department store turnover f o r 1925, 1926, and 1927 for the 20 indi vidual departments doing the largest volume of business. The turnover rates are compiled from the figures o f 26 department stores in the Fourth Federal Reserve D istrict for which departmental sales and stocks are available for each month in the three-year period. The yearly turnover rate is found by dividing the total sales f o r the year by the average end-of-month stocks for the 13 months beginning and ending with December. Rate of Turnover 1927 1926 Millinery ................................................. 8.99 9.34 Women’s Dresses .................................. 7.64 7.75 Women’s Coats ...................................... 7.52 7.17 Misses’ Ready-to-Wear ..................... 6.54 6.50 Juniors and Girls’ Ready-to-Wear.... 5.71 5.68 Women’s and Children’s Hosiery ...... 4.50 4.18 Infants’ W ear ....................................... 3.57 3.39 Boys’ Wear ............................................ 3.40 3.41 Toilet Articles ...................................... 3.03 3.20 Men’s Clothing ...................................... 3.01 3.23 Men’s Furnishings ............................... 2.98 2.99 Silks and Velvets .................................. 2.85 3.13 Domestics .............................................. 2.82 3.14 Toys, Sport Goods ................................ 2.66 2.72 Draperies .............................................. 2.59 2.45 Furs .......................................................... 2.56 2.99 House Furnishings .............................. 2.54 2.73 Women’s Shoes ...................................... 2.48 2.56 Furniture ................................................ 2.31 2.30 Floor Coverings .................................... 1.82 1.78 1U25 9.07 6.7g 7.3$ 5.92 5.13 3.8*0 3.29 3*40 3.21 3.34 3,06 3.33 2.94 2.68 2*58 2.*88 2^88 2 54 2.43 1*73 7 THE MONTHLY BUSINESS REVIEW Fourth District Business Conditions (All figure* are for Fourth District unless otherwise specified) May 1928 Bank Debits (24 cities) Millions of dollars ................. Sayings Deposits (end of month) Ohio (41 banks) Thou s. of dollars ................. Western Pennsylvania (27 banks) “ 44 44 .................... Total (68 banks) “ 44 ........................ Commercial Failures — Number Actual Number ................. 4* “ — Liabilities Thous. of dollars ................. Postal Receipts — 9 cities 44 44 4‘ .................... Sales — Life Insurance— Ohio and Pa. 44 44 4* .................... “ — Dept. Stores — (62 firms) 44 “ 4‘ ................... ** — Wearing Apparel (17 firms) “ “ “ .................... — Furniture (49 firms) 44 44 “ .................... M — Wholesale Grocery (45 firms) .............. ** — 44 Dry Goods (13 firms) *4 44 44 .................... 44 — 44 Hardware (16 firms) 44 *4 44 .................... _ .** Drugs (14 firms) 44 44 44 .................... Building Permits, Valuation— 27 cities *4 44 44 .................... Building Contracts — Total, 4th District “ '* “ .................... “ 44 — Residential, 4th District “ 44“ ........................ Production— Pig Iron, t ’ . S. Thous. of tons. ................. — Steel Ingots, U. S. .............. 44 — Automobiles, U. S. — Passenger Cars Actual Number .................. — Trucks 44 44 .............. 44 — Bituminous Coal, 4th DUt. Thous. of tons ................. 44 — Cement: Ohio, W. Ya., Wn. Pa. 44 44 barrels .................... 44 — Electric Power: Ohio, Pa., Ky. Millions of k.w. hrs................. 44 — Petroleum: Ohio, Pa., Ky. Thous. of barrels .................. 44 — Shoes, 4th District ’ * “ pairs ..................... 44, — Tires, U. S. •* “ casings ..................... .............. Bituminous Coal Shipments (from Lake Eric ports) 44 44 tons Iren Ore Receipts (at Lake Erie ports) .............. *5 months' average. aApril. *January-April. •Figures Confidential. Index Numbers of Trade in the Fourth Federal Reserve District May, 1924 Department Stores (60)*......................... 115 Whofaaal* Drugs (14)**......................... 97 Wholesale Dry Goods (18)*»..................... 79 Wholesale Groceries (45)** ..................... 95 Wholesale Hardware (16)**................... 102 Wholesale All (98)**|............................ 95 Chain Drugs (8 )* t.................................... 101 *Base=Average monthly sales, 1919-1923 * *Base=Average monthly sales. 1928-1925 tlncludes 4 shoe firms fP er Individual* unit operated. May, 1925 118 95 78 May, 1926 117 108 81 99 91 102 101 92 108 92 90 May, 1927 114 102 73 89 98 89 97 Debits to Individual Accounts Mn thousands of dollars) Akron................. Butler, Pa........... Canton................ Cincinnati........... Cleveland........... Columbus........... Connellsville, Pa. Dayton............... Erie, Pa.............. Greensbur*, P a .. Homestead, P a ... Lexington, K y ... Urna................... Lorain................. Middletown........ Oil City, P a .. . . . Pittsburgh, P a ... Springfield......... Steubenville........ Toledo................ Warren............... Wheeling, W. Va. Youngstown........ Zanesville........... 5 weeks ending June 20, 1928 123,165 14.010 56,261 518,268 953,536 199,909 4,982 111,802 45,693 24,574 5,436 24,462 16,441 7,092 14,627 23,676 1,180,717 25,330 14.515 321,262 15,006 59,670 85,467 15,750 1928 to % change date ( Dec. from 2 $—June 1927 20) 642,823 + 1.7 66.011 + 6.1 300,623 + 6.2 + 14.6 2,766.630 + 3.3 4,999,568 + 5.6 1.038,890 — 16.2 24,729 — 0.002 562,693 + 9.5 212.100 — 3.9 123.668 25,936 + 1.3 158.763 + 7.2 92.591 + 11 — 10.9 35,083 77,376 +15.5 + 2 7 .9 102,215 — 7.3 5,910.524 — 7.3 133.732 68,696 + 5.3 + 17.0 1,651.125 80.907 — 3.9 + 9 .0 296,008 427,401 + 4.1 + 7.3 77,456 Total............. 3,861,651 + 2.2 19,895,548 1927 to date (Dec. 29-June 22) 578,982 70,375 290,895 2.436.967 4,876,782 1.017,813 31,775 579.547 217,034 134,544 26,358 154,719 90,619 36,186 66,120 93.582 6,445,248 145,034 67,571 1,417,480 84,014 283,755 436,369 77,139 19,658*908 May. 1928 115 112 80 95 98 95 95 % change from 1927 + 1 1 .0 — 6.2 + 3.3 +13.5 + 2.5 + 2.1 — 22.2 + 0.5 — 2.3 — 8.1 — 1.6 + 2.6 + 2.2 — 3.0 + 17.0 + 9.2 — 8.3 — 7.8 + 1.7 +16.5 — 3.7 + 4.3 — 2.1 + 0.4 + 1.2 May 1927 change 3,276 3,118 + 5.1 748,384 279,644 I,,028,028 157 2,378 3,128 120,240 26,491 2,064 1,303 6,872 2,172 2,101 1,899 25,145 63,813 27,845 3,284 4,203 696,365 256,976 953,342 148 3,225 2,933 104,309 26,083 1,912 1,352 6,413 1,987 2,092 1,730 25,821 70,938 22,189 3,387 4,047 + 7.5 375,798 50,192 14,788 1,803 1,054* 1,990* 4 4,676* 4,343 2,848 357,148 46,965 14.158 1,558 1,086s 1,986* ♦ 4,787* 5,390 4,969 Jan.*May 1928 Jan.-May 1927 16,131 16,223 737,962* 276,511* 1,014,4731 920 28,590 15,764 535,869 118,911 9,233 5,259 31,766 10,736 9,292 9,177 104,824 265,062 101,625 15,406 21.050 684,636* 254,163* 938,800* 874 20,519 15,607 513,688 120,605 9,436 5,375 30,781 10,467 10,124 9,090 100,823 3u0,47l 106,140 16,330 20,312 + 5.2 + 6.9 + 4.4 + 15.7 — 2.9 1,609,223 195,837 73,703 5,708 4,5133 7,817s 1,523,891 223,116 91,975 5,624 4,448* 7,701* — 20.9 — 2.3 — 19.4 — 42.7 18,8003 5,257 2,848 17,281* 9,298 5,702 + 8.8 + 6.1 + 7.8 — 26.3 + 6.6 + 15.3 + 1.6 + — + + + + — 7.9 3.6 7.2 9.3 0.5 9.8 2.6 10.0 + 25.5 — 3.0 + 3.9 — + 0.2 4 4 change + 0.6 + 7.8 + 8.8 + 8.1 + 5.3 + 39.3 + 1.0 + 4.3 1.4 2.2 2.2 + 3.2 +. 2.6 8.2 — + 1.0 + 4.0 1 1.8 — — 4.3 — 5.7 + 3.6 + 5.6 — 12.2 — 19.9 + 1.5 + 1.5 + 1.5 — 6.7 + 8.8 — 43.5 — 50.1 Retail and Wholesale Trade (1928 compared with 1927) SALES May* MayDEPARTM ENT STORES (62) Akron.................................... + 1 3 .4 Cincinnati............................. +4.1 Cleveland.............................. +4.7 Columbus............................. + 4 .6 Dayton.................................. +3.7 Pittsburgh............................ — 5.2 Toledo................................... + 1 3 .7 +3.1 Wheeling............................... Youngstown.......................... +7.1 Other Cities.......................... — 5.2 District.................................. +1.6 WEARING APPAREL (17) Cincinnati............................. +6.5 Cleveland.............................. + 14.2 Other Cities .................. +1.8 District................................. +7.9 FURNITURE (48) Cincinnati............................. — 2.6 Cleveland.............................. +3.6 Columbus.............................. — 8.0 Dayton.................................. — 4.8 Toledo................................... — 10.1 Other Cities.......................... — 4. 6 District.................................. — 3.7 CHAIN STORE * Drugs— District (3 )............ — 1.6 Groceries— District ( 5 ) . . . . +7.5 WHOLESALE GROCERIES (45) Akron.................................... + 4.0 Cincinnati............................. — 1.5 Cleveland.............................. + 1 0 .4 Erie........................................ — 4.3 Pittsburgh............................. + 8.4 T oledo................................... + 1 0 .8 Other Cities.......................... +6.5 District.................................. +7.2 WHOLESALE DRY GOODS (1 3 )........ +9.3 WHOLESALE DRUGS (14) +9.8 WHOLESALE HARDW ARE (16).......... +0.5 WHOLESALE SHOES (6) +1.9 •Sales per individual unit operated Percentage Increase or Decrease SALES STOCKS First May5 mos. May+ 1 0 .0 +0.8 +1.1 + 1.3 — 0.7 — 6.1 +4.5 — 5. 8 — 1.0 — 7.9 — 1.4 +0.7 — 2.6 — 4.5 — 2.2 + 24.2 + 1.3 + 3.4 — 1.9 + 4.6 — 7.3 — l.l — 11.6 — 5.7 — 3.4 — 1.2 + 7.5 + 2. 2 — 0.4 + 2.0 — 2.8 +1.2 — 7.0 — 2.8 +5.2 — 16.3 — 2.1 — 6.7 +5.8 + 1 0 .9 +5.4 +2.8 — 7.0 + 9.9 +1.3 +1.9 +3.2 +2.6 +1.0 — 8.2 — 11.8 + 1.5 + 2.0 — 6.2 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Industrial production continued during May in about the same volume as in the three preceding months. Wholesale and retail trade increased in May and the general level of commodity prices showed a further advance. Security loans of member banks, which were in record volume in May, declined considerably during the first three weeks in June. Conditions in the money market remained firm. Production Index number of production of m anufactures and minerals combined, adjusted for seasonal variations <1923-1925=:100). Latest figure — M ay, 109. Index of U . S. Bureau of Labor Statistics (1926 = 100). Latest figure— M ay, 98.6. Or ----------- M LLRM 2 2 DOLLARS BILLIONS OF DOLLARS ------------------------------- Production o f manufactures was slightly smaller in May than in April, when allowance is made fo r usual seasonal variations, while the output of minerals increased somewhat. Production o f steel declined in May from the high level attained in April, but was in about the same volume as a year ago. Since the first of June buying of steel products has been light and there have been further decreases in production. Daily average production of automobiles was in about the same volume in May as in April, and preliminary reports for the first three weeks in June indicate that factory operations were maintained at practically the same level. Activity o f textile mills was somewhat larger in May, and there were also increases in the slaughter of livestock and in the production o f building materials, non-ferrous metals, and coal, while the production of petroleum declined. The value of building contracts awarded during May, as reported by the F. W. Dodge Corporation for 37 states east of the Rocky Mountains, was larger than in any previous month, and awards during the first half of June exceeded those for the corresponding period of last year. Indicated production of winter wheat, as reported by the Department of Agriculture on the basis o f June 1 condition, amounted to 512,000,000 bushels, 40,000,000 bushels less than the harvested production of 1927. Trade Distribution of merchandise, both at wholesale and at retail, was in larger volume in May than in April. Making allowances for customary seasonal influences, sales in all lines of wholesale trade showed increases, although in most lines they continued in smaller volume than a year ago. Department store sales were larger than in April and at about the same level as a year ago, while sales o f chain stores and mail order houses showed increases both over last month and over last year. Volume of freight car loadings increased further during May, but continued smaller than during the corresponding month o f either o f the two previous years. Loadings o f miscellaneous commodities, however, which represent largely manufactured products were larger in May o f this year than in that month o f any previous year. Prices 192* 1925 1926 1927 Monthly averages o f daily figures for 12 Federal Reserve Hanks. Latest figures are averages of first 22 days in June. The general level of wholesale commodity prices, as indicated by the Bureau of Labor Statistics index, increased in May by over one per cent to 98.6 per cent of the 1926 average, the highest figure recorded fo r any month since October, 1926. There were increases in most o f the principal groups o f commodities, but the largest advance in May as in April occurred in farm products and foods. Contrary to the general trend, prices o f p ig iron, hides, raw silk, fertilizer materials, and rubber showed declines during the month. Since the middle of May there have been decreases in prices o f grains, hogs, sheep, pig iron, and hides, while prices o f raw wool, nonferrous metals, lumber and rubber have advanced. Bank Credit 1925 1926 1927 1928 Federal Reserve Board’ s indexes o f value of building contracts awarded as reported by the F. W . Dodge Corporation <1923-1925 — 100). Latest figures, M ay, adjusted index__ 152; unadjusted— 163. Loans and investments of member banks in leading cities on June 20 showed a decline from the high point which was reached on May 16th. Loans on securities, which had increased by more than $1,000,000,000 since May, 1927, declined $200,000,000, while all other loans, including loans for commercial and agricultural purposes, increased somewhat. There was a small increase in total investments. During the four weeks ending June 20th there were withdrawals o f nearly $75,000,000 from the country’s gold stock, and the volume o f reserve bank credit outstanding increased somewhat, notwithstanding a decline in member bank reserve requirements. Member bank borrowing at the reserve banks continued to increase and early in June exceeded $1,000,000,000 fo r the first time in more than six years. Acceptance holdings o f the reserve banks declined considerably, while there was little change in their holdings of United States securities. After the middle of May, firmer conditions m the money market were reflected in advances in open market rates to the highest levels since the early part of 1924.
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