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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, July 1, 1930 Vol. 12 Trade and industrial activity in the Fourth District de clined slightly in May and the early part of June. This recession reflects in part a slackening that is customary in a number of industries during the summer months, although it has occurred somewhat earlier than in some recent years. There have been further marked declines in commodity prices. The iron and steel industry has followed an irregular course. Pipe mills at Youngstown and Pittsburgh are producing at good rates, several being booked fo r the rest of the year. Other mills, particularly those at Cleveland, have been curtailing operations chiefly because of the slightly greater than seasonal drop in automobile orders. Cleveland mills are only producing at 50 per cent of capacity. Employment and payrolls declined in May more than the usual seasonal amount. May bank debits, however, were off only six per cent in contrast with the ten per cent shown in the first five months o f this year. Savings deposits increased from April, but were still 1.7 per cent smaller than last year. Postal receipts and life insurance sales were both smaller than one year ago. Electric power production was lower than the same month last year for the first time in over two years. Building activity increased from April to May and also showed a very favorable improvement in June, but the total so far this year is still the lowest since 1924. Coal production increased slightly, chiefly because o f the larger loadings at Lake ports which established an alltime record in May. Iron ore receipts have been 50 per cent smaller than last year, although they exceeded the same period o f 1928. Smaller payrolls and declining commodity prices con tinued to affect retail, and in turn, wholesale buying, but some improvement has been reported. Department store sales in May were three per cent smaller than one year ago, the drop being about half as great as the six per cent decline shown for the first five months. Crop conditions in the District have suffered somewhat from unfavorable weather. FIN AN CIAL In recent weeks the few changes in condition o f re porting member banks and this Reserve bank reflected the further easing of credit conditions. Rates charged by commercial banks in this District declined slightly No. 7 and the rediscount rate o f the Federal Reserve Bank of Cleveland was reduced from four to three and one-half per cent on June 7. This was as low a rate as has ever been established by this bank and was the lowest since early 1928. Boston and Chicago were discounting at the same rate, but the New York rate was reduced on June 20 from three to 2% per cent, the lowest ever shown by any Reserve bank. Acceptance rates (90-day asked) were reduced to 17s per cent on June 24, the lowest quotation on record, and call money has renewed at 2 ^ per cent or lower since the 13th o f June. Member Bank Credit. Total credit extended by Fourth District reporting member banks increased $34,000,000 in the four weeks ended June 18 and was $39,000,000 larger than one year ago. This was more than ac counted fo r by an increase in investments o f $38,000,000 in the past month. Amounting to $693,000,000 on June 18, they were $30,000,000 higher than at this time last year. With little commercial demand developing, col lateral loans showing little change and deposits increas ing, banks have turned to investments as a means of keeping funds employed. Loans secured by stocks and bonds were at comparatively the same level as a month ago. “ All other” loans continued to sag and were $37,000,000 below last year and at the same level as this time in 1928. No seasonal expansion has occurred in these commercial loans as yet this year, neither has the decrease since the first of the year been so sharp as in some other Reserve districts. Demand deposits reached a new high record on June 11, declined slightly the follow ing week, but increased $28,000,000 from May. Amounting to $1,098,000 on June 18, they were $96,000,000 higher than in 1929 at this time. Reserve Bank Credit. Increased holdings o f govern ment securities more than offset the declines shown in acceptances, and with bills discounted fo r member banks at substantially the low level o f last month, credit ex tended by this bank was only $85,000,000, about the same as in May. The drop in acceptance holdings has been seasonal, but total bills and securities o f this bank for more than a month have been lower than at any time since 1924. Reflecting the increase in deposits at member banks, reserve deposits since the first of the year have increased quite rapidly and on June 18 were the highest in over two years. Federal reserve note circulation of this bank 2 THE MONTHLY BUSINESS REVIEW has increased slightly since January in the declines shown in the entire system. contrast with BANKING OPERATIONS Federal Reserve Banks Federal Reserve Bank o f Cleveland Federal R eserve System (In M illions) (In M illions) June 18, June 19, M ay 21, June 18, June 19, M ay 21, 1930 1929 1930 1930 1929 1930 316 282 314 3,067 2,880 3,076 Gold Reserves .............. Discounts ........................ 20 82 18 207 959 210 A cceptances .................. 10 7 13 133 87 187 U. S. Securities ............ 55 28 50 598 139 528 Total bills and securi ties ............................... 85 117 81 943 1,199 932 Federal reserve notes in circulation ............ 182 199 179 1,419 1,649 1,453 Total deposits ................ 201 188 199 2,465 2,369 2,439 REVISED CORPORATION EARNINGS (Quarterly net earnings of 162 identical industrials in the United States) All scales in millions of dollars. 500 162 INDUSTRIAL CORPORATIONS 375 TOTAL 250 125 GM & USS Reporting Member Banks Fourth D istrict United States (In M illions) (In M illions) Jane 18, June 19, May 21, June 18, June 19, May 21, 1930 1929 1930 1930 1929 1930 Loans on securities ..... 742 696 744 8,615 7,382 8,322 A ll other ........................ 783 820 786 8,513 9,161 8,484 Total loans .................... 1,525 1,516 1,529 17,128 16,543 16,806 Investm ents .................... 693 663 655 5,989 5,755 5,855 Demand deposits ......... 1,098 1,002 1,070 13,638 12,938 13,382 Tim e deposits ................ 969 954 968 7,228 6,727 7,132 CORPORATION EARNINGS The accompanying chart presents this bank’s revised index of quarterly net earnings of industrial corporations in the United States. The number o f concerns used in the index has been reduced from 170 to 162 as a result o f mergers and consolidations which have occurred in the past year. In some instances, two or more concerns whose figures were used in the index merged; in others, a company included joined with one whose earnings were not included. In case o f such a consolidation, back quar terly earnings for the merging firm not included were obtained or estimated from the yearly earnings, where available. Because o f these additions the total earnings o f the 162 concerns are slightly larger than o f the 170 corporations previously published. The course o f industrial profits during the past year, has, in a general way, followed the curve o f industrial production. This is to be expected, but might not neces sarily follow, particularly for the various groups or the individual concerns in the groups. An industry could be operating at a relatively high level and yet show only a small profit or even a loss. Earnings and production do not always parallel each other. Nevertheless in the first quarter of 1930 the entire group o f concerns showed 3.7 per cent smaller earnings than in the closing period o f 1929 and the volume o f production in the first quarter o f this year taken as a whole was in smaller volume than in the last quarter o f 1929. The drop in profits was caused by, among other things, declining prices o f fin ished goods and raw materials. As noticed on the chart, corporation earnings reached their peak in the second quarter o f 1929 when industrial activity was also at record levels. A slight decline oc curred in the third quarter, again paralleling the produc tion curve, and although the drop in the fourth quarter was greatly accelerated, as was the drop in production, part of it was seasonal. In spite o f the fact that profits in the first quarter o f past years have been larger than in the closing period o f the preceding year, net earnings of the 162 industrial corporations in the opening period of 1930 were the smallest fo r any quarter since 1927 and the smallest first quarter since 1925. If the figures of the two largest companies, General Motors and United 5 CIGAR 25 6 26 '27 *28 *29 *30 8 MACHINE TOOLS 4 2 o 30i 12 MINING '25 *26 *27 *28 *29 *30 I50|t --- 13 MOTOR ) nOTA 20 A rV j: A fr\ ff\ 10 'p. -K-\ / \ A >Y \ f:— OTHC, 15 MOTOR ACCES. 4 RESTAURANT J i 12 STEEL 90 < J wyj1 9¥ _ -----TOl AL 30 'u s s OTH THE MONTHLY BUSINESS REVIEW States Steel, are excluded, 1930 first quarter earnings have only been exceeded by corresponding periods o f 1928 and 1929. The course o f earnings in the individual groups is quite interesting and throws a little light on the trend of cor poration profits in a period o f business recession. Com pared with the first quarter o f 1929, only four groups, coal, leather (a smaller deficit), restaurant and railroad equipment, reported larger earnings in the opening period of this year. Chemical, food and amusement concerns held up very well, showing only small decreases from 1929. The mining, motor, motor accessory, oil and mis cellaneous groups all showed large declines, in some cases more than 50 per cent. The fourth quarter is usually the period o f smallest earnings, although this year only two groups, motor and railroad equipment elicited an improvement in the first quarter of this year. The largest drop fo r the period was shown by the chemical group, but this is largely seasonal. Steel companies reported a decline of 6.5 per cent from the closing period o f 1929, all o f which was accounted for by the drop in earnings o f the United States Steel Corporation; all other steel companies showed little change. Corporation Earnings (162 identical industrials) (In T h ou san d s o f D ollars) 1930 1929 1929 1928 1st 4th 1st 1st Q uar. Q uar. Q uar. Q uar. 5 7 5 5 5 14 8 12 13 15 17 12 4 40 162 160 Building & Supplv C h em ica ls............ ' Cigars. ... . C oa l. ' .... E q u ip m en t— R .R . F o o d s ....................... M ach in ery, T ools. M in in g ..................... M o t o r ...................... M o to r A c c e s s o r y .. O i l .. . .............. S teel.......................... R estau rant............. M iscella n eou s. . T o t a l ........................ T o t a l......................... 1,713 14,910 1,416 1,763 6,442 28,325 2,139 11,976 54,329 4,519 7,085 57,204 1,750 40,962 234,533 203,747 3,339 21,876 3,260 2,281 6,334 3 0 ,7 0 9 2,431 13,367 38,954 4,622 10,672 61,154 2,128 42,509 243,636 208,933 2,100 2,901 15,638 11,902 2,037 1,709 1,130 1,980 5 ,290 3,953 29,372 26,593 2,807 2,177 19,091 8,692 97,807 97 ,5 6 0 10,964 5,704 16,475 6,804 68,166 33,420 1,305 1,224 54,387 49,474 326,569 254,093 264,692 213,914 1927 1st Q uar. 3,283 11,112 2,100 1,375 3,983 24,945 1,961 7,308 75.832 5,662 16,530 41,591 1,598 38,142 235,422 196,877 1926 1st Q uar. 3,681 10,011 1,461 2,00S 4,735 23,522 2,667 7,778 69,577 7,842 21,947 43,113 1,344 39,338 239,024 193,045 (Less H. M. & l.T. S. S.) COMMODITY PRICES The general course of wholesale prices continued down ward in May and early June and was one o f the most disconcerting factors in the entire business situation. The Bureau o f Labor’s index on a 1926 base, standing at 89 in May was 13 per cent below the same month last year and the lowest for any month since 1916. COMMODITY H PRICES ’ • : *" ** i 5 *■ A /^ v — AL.L COMI dODlTtE! > kRM PRC)DUCTS 1924 B«rfaa of V 1925 1926 1927 1928 1929 1930 Labor Statistics Index. Latest figures, May prices, 93.0. All commodities, 89.1. 1931 Agricultural 3 Wholesale prices have followed a downward course since 1925 with only a slight temporary reversal in the last part o f 1927 and the first nine months o f 1928. Although prices tended only moderately downward in late 1928 and early 1929, beginning with August, 1929, the drop became quite abrupt, partly because o f overproduction and partly in sympathy with the fall in security prices and the lessened consumer demand which followed. This was caused by, among other things, the decrease in em ployment and payrolls and the low level o f general business. The declines shown in the past nine months have been world-wide in scope, being more pronounced in some of the foreign countries than in the United States and have not been confined to any particular classes o f goods. Kaw materials, including grains, cotton, wool, silk, sugar, copper, silver, coffee and rubber have fallen to the lowest levels in years, in some cases to the lowest point on record, but prices of iron and steel products, glass, leather and many other manufactured goods have also declined. Retail prices have also fallen slightly, particularly since the first of the year, but the reduction has not been in proportion to the drop in wholesale prices. M ANUFACTURING, MINING Iron and Steel Demand fo r iron and steel in the P'ourth District declined sharply in the month ended June 20. Except for line pipe and tin plate, consumers’ requirements con tracted markedly and as a result, production in late June was off more than seasonally and was approximating the low point of last December. The summer lull which did not occur to any extent last year seems to be at hand. Automotive specifications were curtailed early in June, due to both a slower retail market and to an overspecifi cation o f material in May. Many important automobile interests planned their June shipments with the inten tion of showing a minimum inventory on July 1, just prior to the usual shut-downs preparatory to model changes. Bar, sheet, strip and, to a lesser extent, wire mills reduced their operations accordingly. Structural steel awards continued in only moderate volume, with no out standing inquiry. Tin plate shipments in May and early June equaled the rate of last year, but were made at the expense o f backlogs. The one bright spot in the entire industry was caused by the large orders for pipe to be used in the construc tion of pipe lines fo r the transmission of natural gas, petroleum and gasoline. Awards in early June attained record proportion and by the middle of the month the more important makers in the Pittsburgh district were booked well into the fall, with several interests com mitted fo r the remainder o f the year. As a result, plate and skelp mills entered the summer with better prospects than other departments of the industry. Pig iron, like finished steel, felt keenly the retrench ment in the automotive industry and shipments of Pitts burgh, Youngstown and Lake furnaces declined materially in June. Late in the month, however, inquiry for third quarter iron developed in moderate volume. In common with commodity prices generally, most fin ished steel quotations declined considerably in early June. Semi-finished steel fell $2 in the month and was quoted THE MONTHLY BUSINESS REVIEW 4 at $31 a ton at all centers. Producers were quoting at unchanged prices for the third quarter, but there was an evident reluctance to commit too fa r into the period. The Iron Trade Review composite o f 14 leading iron and steel products declined to $33.52 in mid-June. This com pared with an average o f $33.73 fo r May, $36.96 in June, 1929, and was the lowest since 1916 with the exception o f three months in early 1922. Although the decline has been less precipitate in the past week or so, no improve ment has yet been shown. Steel ingot production in May continued the decline which started in March. The daily rate o f output fo r the month was 149,066 gross tons, against 159,764 tons in April, 195,790 tons in May, 1929, and 155,700 tons in May, 1928. Total production in the first five months o f this year amounted to 20,352,960 tons, compared with 24,133,741 tons in the corresponding period o f 1929 and 21,050,000 tons in 1928. Steelmaking operations averaged 78.2 per cent of capacity in the five months ended with May; one year ago they were 94.6 per cent. By mid-June the rate fo r the entire industry had declined to 68 per cent o f capacity. Two years ago it was operating at 73 per cent. Cleveland mills were only producing at 50 per cent o f capacity with Youngstown and Pittsburgh at 60 and 70 per cent respectively. Pig iron production showed an increase in the daily rate from January to April, inclusive, but reversed itself seasonally in May. The daily output was 104,509 gross tons, compared with 106,371 tons in April and 123,753 tons last May. Production in the first five months was 15,368,401 tons, compared with 17,922,433 tons in the same period o f 1929 and 15,428,123 tons in 1928. A slight increase in bituminous coal production occurred in the Fourth Dis trict in May mostly because of the ex pansion in shipments from Lake Erie ports which totaled 6,102,000 tons in the month. This was the largest ton nage ever loaded in a single period and reduced the discrepancy shown in April, loadings to June 1 being only 36,000 tons behind the same period o f 1929 which was a year of record lake shipments. Coal output fo r the month totaled 15,604,000 tons, com pared with 16,850,000 tons in May, 1929, a decline of seven per cent. The increase from April was less than seasonal and production so fa r this year has been 5.5 per cent below one year ago. Production in the entire country was estimated at 35,884,000 tons in May, a drop o f about 5,000,000 tons from last year. The reason fo r the decline of course has been the drop In industrial activity and railroad operations. A few com panies reported a slight increase in sales in the first part of June, however. Buying fo r stock piles in prepara tion for fall and winter demand has not been very gen eral, notwithstanding the low level to which stocks above ground have fallen. Collections are poor, unpaid accounts, according to the Bureau of Coal Statistics, being about five per cent larger than last year despite the smaller sales. Prices have declined slightly. in May, 1928. The decline from April, 5.8 per cent, was larger than the 2.8 per cent shown last year at that time and was contrary to the trend of production in the past several years. On the average there is relatively little change shown in output in these two months. A c cording to the Department o f Commerce figures, production in the first five months amounted to 1,883,616 units, which still exceeded output in the same period o f 1928 by a good margin, but was 30 per cent below last year. There was a decided slump in truck production, the May output being only 54,370 units as against 67,560 in April and 88,510 in May, 1929. Manufacturers report the trend downward, part of which is seasonal. The decline shown from April to May continued into June only at a more rapid pace. In past years the sea sonal contraction from May to June has been about 14 per cent, but it is too early to state whether the general curtailment in preparation for the new mid-summer model introduction has been greater or less than usual. This falling-off has affected parts and accessory, steel and rubber plants in this District with a consequent reduction in employment. The reason fo r the drop in automobile production is found in the new passenger car registration figures which are much below last year. In the ten principal counties o f this District, May registrations were 24 per cent less than one year ago. This smaller decline as com pared with other months o f this year, due chiefly to sales at Pittsburgh, reduced the five-month discrepancy to 27 per cent. New Passenger Car Registrations T e n Principal Counties Coal Automobiles May production o f automobiles in the United States totaled 417,154 cars (in cluding trucks and taxicabs) compared with 442,835 in April, 604,691 in May, 1929, and 425,783 U% c"an8e A k ro n (S u m m it)................ C a n ton (S t a r k )................... C incinn ati (H a m ilt o n )... C leve lan d (C u y a h o g a ). . . C o lu m b u s (F r a n k lin )-----D a y to n (M o n tg o m e r y ). . P ittsbu rg h , Pa. (A llg h y .j T o le d o ( L u c a s )................... Y o u n g s to w n (M a h o n in g) W h « lin g , W . Va. (Ohio). T o t a l .................................. 1930 1,287 797 1,885 4,863 1,235 763 5,003 996 727 240 17,796 1920 2,349 1,294 2,557 6,097 1,883 1,229 4,683 1,891 1,125 ’ 3 10 23,418 % chanee ^ *rom J an-“ M a y J a n .-M a y fr o m 1929 1930 1929 192 9 — 4 5 .2 4,764 8 243 ____ 42 7 — 3 8 .4 3,003 4,917 — 38 9 — 2 6 .3 7.684 9 915 — c — 2 0 .2 18,616 25 082 — 25 it — 3 4 .4 5,052 7 675 — 3 4 * 5 — 3 7 .9 3 679 5*517 ____ + 6 .8 16',480 17 557 — *1 — 4 7 .3 3 882 7*547 ____ — 3 5 .4 2 632 4 ’ 286 - 22. 6 8S6 to ll -1 9 9 — 2 4 .0 66,648 91,807 ____ 2 7 . 4 Rubber, Tires Output of tires in the Akron district, which annually produces more than 60 per cent o f all tires manufactured in the country, in May was about 25 per cent below the peak reached last year in June. Employment increased one per cent from April, but was 22 per cent below one year ago when the rubber industry was operating at record levels. Imports o f crude rubber to the United States in May totaled 40,745 tons as against 49,927 tons in April and 49,180 tons in May, 1929. So fa r this year imports have totaled 227,192 tons, compared with 274,018 tons in the first five months o f 1929. Consumption o f crude rubber in May was estimated to be 39,902 tons, still slightly under the import figures. This fa ct that imports have exceeded consumption fo r some time past has been the chief reason for the decline in crude rubber prices, which in early June fell below 12 cents a pound, the low est point on record, compared with 22 cents last year and THE MONTHLY BUSINESS REVIEW about 40 cents in 1927. The extent of the success of the tapping cessation in an endeavor to reduce stocks and bring production closer to consumption has not definitely been ascertained, but shipments in early June continued near the 9,000-ton-per-week level. Preliminary production o f tires in the United States in May was estimated at 4,580,000 casings (including solids), an increase from April, but 25 per cent below May, 1929. Other Manufacturing 6 Paint. Second quarter paint sales, in general, increased seasonally from the first quarter o f this year. Companies which depend on the automobile and furniture industry fo r the bulk o f their orders state that sales have declined. Prices o f raw materials entering into paint and varnish manufacture, except linseed oil which increased about 35 per cent, have fallen. The reduced volume as com pared with last year has increased manufacturing and selling costs so that no general price reduction has oc curred. Few changes of any consequence have occurred in the last month, the only de Paper. The general trend of the paper business since velopment being of a seasonal nature. the first o f June has been downward and second quarter Continued unsettled prices have had a generally deter business has been materially below the first quarter and ring effect on orders. Industrial employment declined the corresponding period o f 1929. about one per cent in May and was 14 per cent below Shoes. Footwear manufacturers, located for the most May, 1929. In past years little change has been shown part near Cincinnati, curtailed operations again in May, in the employment figures from April to May. despite the fa ct that April production was at an unusually Brick and Ceramics. Demand fo r clay products in low level. Output of 26 factories in May was 38 per cent creased seasonally in the second quarter of this year, below May, 1929, and production in the first five months although operations are still considerably below 1929. o f this year was 22 per cent under the like period o f last China and pottery plants reported a greater than sea year, according to the census figures. Salesmen report con sonal drop in employment. siderable opposition to fall buying, most dealers prefer Clothing. The clothing and textile industry has been ring to wait until later in the season. Sales o f wholesale confronted by several adverse factors so fa r this year— shoe firms in May were 19 per cent below the correspond labor troubles, declining prices o f raw materials and a ing month o f 1929. reluctance on the part of merchandising concerns to com Stoves and Equipment. Second quarter business has not mit themselves because of the decline in retail sales and shown the seasonal increase experienced in other years. the uncertainty of the general situation. This is the Employment decreased in May more than usual. period of low activity fo r the industry as a whole, the spring season having closed and the fall season not yet having started. BUILDING Prices o f wool, silk and cotton reached the lowest Construction activity in the Fourth District, as re levels in years and while declining were a retarding factor on sales. Finished goods are available at lower prices flected in figures o f the F. W. Dodge Corporation, failed than for some time, much of the raw material price de to maintain its seasonal level in May and amounting to cline having been passed on to the consumer. Advance $51,214,000 was 21 per cent below the level o f May, 1929. orders for fall delivery have been very conservative, de Building in the first five months o f this year was ten spite the fact that stocks in most cases are low. per cent under the same period last year. Electrical Equipment. Sales have been retarded by the Local residential construction showed a very slight im decline in copper, which reached 11% cents a pound provement in May, the decline from last year being only in mid-June. So far this month there has been a down nine per cent, compared with the 31 per cent decrease in ward tendency reported in factory operations. Em ploy the first five months. Total building, including industrial, ment in May was down one per cent in contrast with a commercial and public works and utility construction, in normal increase o f about four per cent from April to creased from April, but was 21 per cent below May, 1929, May. chiefly because awards last May were unusually large. Glass. Glass companies reported second quarter opera So far this season total building has been lower than in tions about on a par with those o f the opening period any year since 1924. o f this year, but the demand in general continues sub Figures fo r the first half o f June on a daily average normal with no prospects o f immediate improvement. basis show an improvement over both May, 1930, and Operations in the Pittsburgh district are from 35 to 40 last June. per cent below last year. Employment in Ohio concerns Dealers in building materials report little change in de showed the usual seasonal increase o f one per cent. Prices mand except o f a seasonable nature, in fa ct some report o f raw materials entering into the manufacture o f glass that second quarter sales were below those of the initial and glass products have dropped slightly, but finished quarter o f this year. Prices of lumber are down about goods have been at relatively lower levels fo r some time five per cent from last year's level which was also low. because o f lessened demand and increased competition. Machinery, Supplies. Demand for agricultural imple ments has slowed down, sales during the second quarter TRA D E being smaller than in the first quarter of this year. Sales o f reporting department stores in May increased General machinery sales since the first of June have seasonally and showed a smaller decline, three per cent, slackened. Automobile parts concerns have reduced oper as compared with the corresponding period of one year ations after only a very temporary improvement shown a ago, than was reported fo r the first five months o f this month ago. Hardware and tool demand has been irregu year when sales were 5.6 per cent smaller than in 1929. lar. May employment was less than April. THE MONTHLY BUSINESS REVIEW 6 May sales o f 55 identical stores were the smallest for that month since 1927, however. Stocks continue to fall, part o f which was accounted fo r by the decline in commodity prices. Accounts receivable were larger in May than one year ago, but collections have also improved and the ratio o f collections to accounts outstanding increased slightly. Retail furniture sales have been very bad, one city showing a decline of 40 per cent in the first five months o f this year, while sales o f all reporting stores were 24 per cent below 1929. Wholesale trade in general continues in reduced volume, May sales being the smallest for that month in the past seven years. AGRICULTURE Unseasonably dry weather prevailed in most sections o f the District during May and early June. This was decidedly unfavorable to all growing crops and as a result, the June 1 condition was below average for this time o f the year in most cases. Rains in the second week o f the month have been very beneficial and should go fa r to correct the unfavorable existing condition, however. Winter Wheat O h io ............ Pennsylvania. K e n t u c k y ----W . V irginia . . U . S................. C on dition June 1 (P er Cent) 10-year average 19191929 19J0 1928 76 90 64 86 91 83 78 87 80 81 91 78 7 7 .2 79.6 7 1 .7 P rodu ction (th ous. o f , . H arvested, su bject to revision 1929 33,696 20,016 2,832 1,782 578,336 Av erage 1924-1928 27,219 20,375 2,773 1,826 550,636 bushels) j 930 forecast from c o n dition J un 1 24,302 20,088 3,062 1,833 532,469 The condition of winter wheat declined several points in this District in May with a corresponding drop in the estimated production, based on the June 1 condition figure. The above table shows the June 1 condition of the crop, together with the estimated production in 1929, the fiveyear average production, 1924-1928, and the probable wheat crop for 1930 for states wholly or partly within this District and for the entire country. So fa r winter wheat has had a much less favorable season than one year ago. The stand is quite irregular throughout this territory and is heading short in the straw. It has been altogether too dry fo r wheat this spring. In all states except Kentucky the June 1 condition is below the tenyear average figure and estimated output is below last year's harvest. Stocks o f wheat carried over from last season are larger than usual because o f the greater than average produc tion in 1929 and the falling-off in exports. Although these two factors have had considerable effect on the recent course of wheat prices, attention is now being given to the present crop variations. Wheat declined in June to below 90 cents a bushel, a lower figure than was reached in any year since 1914. Oat prospects in general are quite poor, being better in the northern part of the District than elsewhere. Con dition in Ohio and Kentucky was considerably below aver age. Most of the planting had been completed by the first o f June and came up well, but was growing slowly be cause o f the dry weather. Other grains have also suf fered from lack of moisture and were slightly below aver age condition. The season so far has been very unfavorable fo r hay and pasture growth. In Kentucky the condition is on ly 60 per cent of normal with only slightly better conditions reported in Ohio and Pennsylvania. Clover has headed rather short and fields in general are quite weedy. Un less a marked improvement is shown as a result o f the recent rains, the yield o f hay and clover will be much below average. The condition o f most fruits, which was already low, declined still further in May because of damaging frosts! Production o f peaches in Ohio appeared to be about onetenth o f a fu ll crop. Last year's harvest was likewise small, being only one-third o f average. The Pennsyl vania crop is stated to be about half as large as the average crop of 1924-28. About one-half a normal crop of apples is expected in Pennsylvania and a one-fourth crop in Ohio. Prospects are somewhat better in the northern localities. Pear crop prospects are also very poor. The United States Department o f Agriculture's index o f farm prices declined three points in May after a rise o f one point in April. In May, standing at 124 per cent of the pre-war average 1909-14, it compared with 136 last year and was the lowest fo r any month since 1922. All groups o f prices, except fruits and vegetables which have remained at high levels because o f the relative scarcity, were lower in May than in April and consider ably below last year. Further declines occurred in June, prices of several commodities falling to pre-war levels. The 1930 tobacco crop has nearly all been transplanted to the open fields and although acreage figures are not yet available, it is estimated that the full intended acre age (15 per cent larger than that harvested last year) has been set. The work, though somewhat later than in 1929, has been completed in ample time. Tobacco One fa ct that is very apparent this year is the great variation in the condition o f the plants. Many fields suf fered from the dry weather, while others, those which were set earlier, seem to be in splendid condition, having taken hold before the dry weather began. The recent warm weather and rains have been of great benefit to the crop in general. Fields are comparatively free from weeds fo r this time of year, having been cultivated once or even twice in some cases. Some trading continues in the old stock, gradually re ducing the limited quantities that are available. Canning Early canning crops in this D istrict suffered severely from the dry weather, and although the recent rains have co r rected this condition in some instances, the pea crop w as beyond saving. As a result, despite an acreage increase of about 20 per cent, the local pack is estimated to be about 40 per cent below last year. Other sections of the country have fared much better so that on the whole the supply is expected to be about the same as in 1929. The corn crop started poorly and is in much below normal condition. There has been some shortage in the supply o f tomato plants and the setting has been late. Stocks o f all canned goods are not large, but future orders have not been very heavy. 7 THE MONTHLY BUSINESS REVIEW Fourth District Business Indexes Fourth District Business Statistics (000 om itte d ) Jan .Fourth District Unless M ay % change M a y % ch an ge Otherwise Specified 1930 from 1929 1930 fro m 1929 Bank D ebits— 24 c itie s ..................... » 3,245,000 — 5 . 6 15,910,000 — 1 0 .4 Saving D eposits— end o f m onth: O hio— 36 b a n k s .............................. $ 769,953 — 1 .7 768,8121 — 2 .2 W estern Pa.— 25 b a n k s ................ $ 278,843 — 1 .4 275,4 6 1 1 — 0 .5 T o ta l— 61 b a n k s .............................. $ 1,048,796 — 1 .7 1,044,2731 — 1 .8 P ostal R eceipts— 9 cities.................. $ 3,083 — 4 .1 16,054 4- 1 .4 Life Insurance Sales: O h i o a n d P a ...................................... $ 118,080 — 3 .0 631,057 + 6 .1 R etail Sales: D epartm en t stores— 57 firm s. . 26,307 — 3 .4 115,664 — 5 . 6 W earing A pparel stores— 16 firm s..........................................* 1,729 + 0 .6 7,630 — 6 .0 977 — 2 8 .3 4,178 — 2 3 .9 Furniture— 48 firm s...................... $ W holesale Sales: D ry G ood s— 11 firm s................... $ 1,748 — 1 0 .9 8,341 — 1 2 .8 D rugs— 13 firm s .............................. 1,617 — 8 .0 8,250 — 9 .1 G rocery — 41 firm s.......................... $ 6,003 — 4 .7 21,918 — 2 5 .2 H ardw are— 17 F irm s..................... $ 2,100 — 4 .3 9,157 — 12.3 Building Perm its— 27 c itie s ............ # 16,042 — 2 3 .0 70,280 — 1 7 .5 B u ilding C on tracts— R esidential. 13,998 — 1 8 .9 51,167 — 3 1 .2 ** “ T o ta l, all classes # 51,214 — 2 0 .9 228,997 — 1 0 .0 C om m ercial Failures— N u m b e r ... 189 + 2 7 .7 859 — 0 .3 “ “ — L ia b ilities. . $ 3,023 — 6 .3 19,983 + 1 4 .6 P rod u ction : P ig Iron U. S................................... T o n s 3,233 — 17.1 15,327 — 14.5 Steel Ingots, U. S............................ T o n s 4,025 — 2 3 .7 20,353 — 1 5 .6 A u tom obiles— Pass. Cars, U. S. 362,2702 — 2 9 .6 1,605,3062 — 3 0 .6 — 'T rucks, U. S............. 54.3702 — 3 8 .6 274,2482 — 2 3.5 B itum inous C o a l.............................T o n s 15,604 — 7 .4 79,348 — 5 .5 C em ent— 0 . ,W n . Pa., W . V a . . .B b ls. 2,011 + 2 6 .1 6,163 + 1 1 .0 E lectric Pow er— O ., Pa., K y . . . k . w . hrs. 1,179s — 1 .3 5,0284 + 2 .3 P etroleum — O ., Pa., K y ...............Bbls. 2,565s + 2 3 . 2 9 ,5884 + 2 1 . 8 S h oes .................................................... Pairs 8 — 3 7 .8 8 — 2 2 .2 Tires, U. S . . . . .................................Casings 4,580® — 2 5 .5 20,286 — 27 .5 B itum inous Coal Shipm ents— Lake Erie P o r t s ..............................T o n s 6,102 + 1 6 .4 8,040 — 0 .4 Iron Ore R eceip ts— Lake Erie P o r t s .............................. T o n s 3,987 — 4 1 .0 3,997 — 4 9 .7 1 M o n th ly average * A ctual num ber * April 4 J an u ary-A p ril 5 C on fiden tial 6 P relim inary (1930 com pared with 1929) P ercentage Increase or D ecrease SA LE S STOCKS SA LE S First M ay— M ay— M ay 5 mos. M ay — 2 9 .2 — 1 4 .8 —12.1 — 5 .7 — 2 .3 — 2.0 — 5 .9 — 2 .4 — 7 .1 — 0 .7 — 8.8 + 6.0 — 12 4 — 6 .3 — 0.1 — 5.2 — 3 .6 — 0 .9 + 0.6 — 1 2 .9 — 7 .2 — 9 ,3 — 8.2 + 0 .3 — 5 .7 — 1 0 .5 — 5 .8 — 6 5 — 5 .6 — 3 .4 + 6.2 — 4 .5 + 2.7 0. 2 + 0.6 — 4 .8 6. 0 — 8 .3 + 4.1 — 1.3 —21 .9 — 2 1 .4 — 1 7 .3 — 2 1 :2 — 1 8 .4 — 4 0 .7 — 2 8.1 — 2 3 .9 ............ ............ ............ ............ ............ ............ ............. — 3 .2 — — — — — 2 2 .4 2 3 .5 1 8 .7 4 9 .6 —31.0 — 2 8 .2 + 2.6 + 1 .7 — — 6.2 — 7 .4 — 3 .9 — 3 .2 — 5 .4 + 0 .4 — 4 .7 — 1 0 .9 — 8.0 — 4 .3 — 1 8 .7 8.8 + 2.0 ....... — 0 .7 ............. 1 4 .7 1-1 4 .3 4 .0 3 .7 2 .3 4 .5 1 .3 ............. ............. ............. ............. ............. ............. ............. — 2 .3 — 9 .1 — 1 2 .3 — 2 4 .5 ............. — 6 .5 — 2 5 .2 — 1 6 .7 + — — — — + — Bank D ebits (24 c it ie s ) ............................................. C om m ercia l Failures ( N u m b e r ) .......................... “ “ (L ia b ilit ie s )....................... Postal R eceip ts (9 c it ie s ) ......................................... Sales— Life Insurance (O h io and P a .)................ “ — D epartm en t Stores (55 fir m s ).............. .. “ — W holesale D rugs (13 fir m s ).................... “ — ‘‘ D ry G o o d s (11 fir m s ).......... “ — “ G roceries (41 fir m s ).............. — “ H ardw are (15 f i r m s ) . ......... — “ A ll (83 f ir m s ) f ........................ “ — Chain D rugs (3 fir m s )* * .......................... B uilding C on tracts ( T o t a l ) ..................................... “ “ (R e s id e n t ia l)......................... P ro d u ctio n — C oal (O ., W n . Pa., E. K y .) . . . . — C em ent (O ., W n. Pa., W . V a . ) . “ — Petroleum (O ., Pa., K y . ) * .......... “ — Elec. P ow er (O ., Pa., K y . ) * . . . . — S h o e s .................................................... *A p ri 1 **P er in d iv id u al unit operated fln c lu d e s 3 shoe firms —12.8 — 6.6 Vlay, M a y , M a y , M a y , M a y , 1930 1929 1928 1927 1926 129 121 115 120 106 108 102 106 130 101 69 73 54 73 101 119 120 113 113 124 144 125 119 145 141 108 106 105 106 105 103 112 113 102 104 82 75 81 85 76 91 94 96 90 90 98 98 101 94 90 96 90 93 89 95 93 91 88 95 106 149 119 107 136 134 129 106 162 100 81 79 87 93 82 86 167 133 150 130 152 107 101 139 113 108 129 122 142 126 140 99 72 92 80 61 Debits to Individual Accounts A k r o n .................. B u tle r .................. C a n t o n ................. C in c in n a ti. . . . C leveland C o lu m b u s ........ C o n n e ls v ille . . D a y t o n ............. F ra n k lin ........... G re e n sb u r g . . . H a m ilt o n ......... H o m e s te a d .. . . L e x in g to n ......... L im a .................. Retail and Wholesale Trade D E P A R T M E N T STOR ES (57) Akron................................................... Cincinnati............................................................. Cleveland.............................................................. Colum bus.............................................................. D ayton.................................................................. Pittsburgh............................................................. Toledo.................................................................... W heeling............................................................... Other Cities......................................................... District.................................................................. W E A R IN G AP PA R EL (16) Cincinnati............................................................. Cleveland. . ....................................................... Other Cities......................................................... District.................................................................. F U R N IT U R E (48) Cincinnati............................................................. Cleveland.............................................................. Columbus......... ............................... D ayton........... .................................................... T oledo.................................................................... Other Cities......................................................... District.................................................................. C H A IN STO R E * Drugs— District ( 3 ) ..................................... Groceries— District ( 6 ) ................................. W H O L E S A L E G R O C E R IE S (41) Akron................................................................... Cincinnati......................................................... Cleveland............................................................ Erie....................................................................... Pittsburgh........................................................... Toledo.................................................................. Other Cities........................ .............................. District................................................................ W H O L E SA LE D R Y GOODS ( 1 1 ) ......... W H O L E S A L E D R U G S ( 1 3 ) ..................... W H O L E SA LE H A R D W A R E ( 1 7 ) ____ W H O L E S A LE SH OES ( 5 ) ........................ •Sales per individual unit operated. (1923-1925 = 100) M id d le t o w n .. O il C i t y ........... P ittsburgh . S p rin g fie ld . . . . S te u b e n v ille . . . W a r r e n ............. W h e e lin g .......... Y ou n gstow n . . Z a n e sv ille ......... Tot al . . . . 4 weeks ending June 18, 1930 96,263 11,860 42,676 347,400 753,109 173,141 3,229 85,089 36,369 4,886 17,289 13.035 4,238 18,693 12,596 5,779 9,783 15,489 1,035,442 20,330 10,053 162,542 10,027 41,841 67,837 9,140 3,008,136 (T h ou san d s of D o lla rs) Y e a r to % change D ate 1930 (D e c . 31from June 18) 1929 — 13 .3 579,444 69,091 — 5 .4 279,167 — 1 8 .6 2,193,320 — 1 4 .8 — 8 .7 4,761,967 1,047,694 — 1.3 19,397 — 1 3 .0 — 8 .0 540,701 — 8.1 227,126 — 1 3 .4 30,230 — 13.1 106,425 87,379 — 1 6.3 — 1 5.3 25,257 — 1 1 .8 160,668 — 5 .0 73,636 32,648 — 6 .3 65,573 — 2 4 .7 93,298 — 1 6 .0 5,554,753 + 7 .5 — 1 .0 133,391 — 1 9 .9 59,651 — 1 8 .8 1,051,219 — 2 8 .7 69,836 — 1 0 .9 254,292 403,407 — 1 0 .2 57,608 — 24.1 17,979,178 — 5 .5 Y ear to D ate 1929 (Jan. 2June 19) 673,365 68,511 314,666 2,568,968 5,111,701 1,060,850 20,824 600,092 221,443 32,164 113,807 95,950 27,155 178,405 87,857 34,591 73,008 104,413 6,116,851 138,209 70,424 1,307,644 83,570 290,882 436,034 74,059 19,905,443 % change from 1929 — 13. 9 + o. 8 — 11. 3 — 14. 6 — 6. 8 — 1. 2 — 6. 9 — 9. 9 + 2. 6 — 6. 0 — 6 .5 — 8..9 — 7. 0 — 9. 9 -1 3 . 9 — 5 6 — 10. 2 — 10 6 — 9. 7 — 3!5 - —15 . 3 — 19 .6 -1 6 .4 — 12 . 6 — 7 5 -2 2 2 - 9 .7 . . Building Operations M ay, 1930 A k ro n ................... A sh ta b u la .......... B a rb e rto n .......... C a n t o n ................. C in c in n a ti.......... C le v e la n d ........... Cleve. S u burbs: C leve. H g h ts. . East C le v e . . . . E u clid ................ G arfield H ghts. Lakew ood . . . . Parm a................ R o c k y R iv e r . . Shaker H g h t s .. C o lu m b u s........... C o v in g to n , K y . D a y t o n ............... Erie, P a .............. H a m ilt o n ............ L exington, K y . . Li m a ..................... N e w a r k ............... P ittsburgh, P a .. S p rin g fie ld......... 1,728,366 33,155 29,720 92,052 4,262,320 2,211,550 816,440 21,400 129,571 72,200 144,790 155,159 277,128 548,925 295,550 36,650 412,343 1,009,322 362,236 73,711 70,485 25,875 2,366,462 121,780 382,065 W heelin g, W . Va. 182,736 Y o u n g s to w n .. . 179,925 T o t a l ............... 16,041,916 (V alue o f Perm its) J a n .-M a y , % change from 1929 1930 4,270,599 — 3 7 .7 — 7 1 .1 179,526 — 8 0 .7 119,950 9 46,437 — 7 9 .2 + 4 3 .9 21,891,447 — 2 5 .5 11,916,300 + 4 2 7 .6 — 9 1 .4 — 3 3 .8 — 5 2 .8 — 3 4 .9 — 3 2 .6 + 8 8 .0 — 3 2 .0 — 7 6 .5 — 3 9 .5 + 4 7 .8 + 1 9 4 .8 + 1 2 1 .8 — 4 8 .4 — 25.1 — 5 9 .4 — 5 1 .5 — 3 .3 — 6 1 .8 + 5 5 .7 — 7 4 .8 — 2 3 .0 1,658,660 297,926 788,796 328,800 807,116 701,476 593,133 2,009,150 2,018,350 356,350 3,141,650 2,316,057 817,796 480,604 433,475 106,950 7,574,128 409,820 4,572,773 452,088 1,090,209 70,279,566 J a n .-M a y , 1929 9,219,867 149,297 423 ,767 1,371,810 13,018,590 14,880,250 % chan,c.*'’ from 1929 — 5 3 .7 + 2 0 .2 — 71 .7 — 3 1 .0 + 6 8 .2 — 1 9 .9 972,730 1,483,594 1,058,080 542,100 752,996 919,399 768,415 2,747,325 5,179,400 570,125 2,996,404 4,120,502 796,156 1,030,628 290,065 172,745 13,138,726 577,225 5,039,846 636,570 2,348,260 85,204,902 + 7 0 .5 — 79 ') — 2 5 .5 — 3 9 .3 + 7 .2 — 2 3 .7 — 2 2 .8 — 2 6 .9 — 61 .0 — 3 7 .5 + 4 .8 — 4 3 .8 + 2 .7 — 5 3 .4 + 4 9 .4 — 3 8 .1 — 4 2 .4 — 2 9 .0 — 9 .3 — 2 9 .0 — 5 3 .6 — 17.5 THE MONTHLY BUSINESS REVIEW 8 Summary of National Business Conditions By the Federal Reserve Board The volume o f industrial production declined in May by about the same amount as it increased in April. Factory employment decreased more than is usual at this season and the downward movement o f prices continued. Money rates eased further, to the lowest level in more than five years. Industrial Production and Employment Index number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-25 average — 100). Latest figure— May, 104. The Board’s index o f industrial production, adjusted fo r usual seasonal variations, declined about two per cent in May. In 1930, industrial produc tion has fiucuated between fou r and seven per cent above the 1923-1925 aver age and the preliminary estimate fo r May is four per cent above the average fo r those years. Production at steel and automobile plants declined, cotton mills curtailed output and activity at woolen and silk mills continued at low levels. Cement production increased sharply, while output o f petroleum and o f copper showed little change. In the first half of June, output at steel plants declined further. The decrease in factory employment in May was larger than usual and there was also a decline in factory payrolls. The number employed in the cotton and silk goods industries decreased further, while in the woolen goods industry there was an increase from the extreme low point o f April. Em ployment in the agricultural implement and electrical machinery industries decreased from April, but remained large relative to earlier years. Employ ment in the cement industry increased, but in the lumber industry continued at an unusually low level. Building contract awards in May, as reported by the F. W. Dodge C or poration, continued to be in substantially smaller volume than in any other year since 1924. Distribution Tndex of Bureau of Labor Statistics (1926=100 base adopted by Bureau). Latest figure— May, 89.1. Freight car loadings increased by less than the usual seasonal amount during May and continued to be in somewhat smaller volume than in the corresponding period o f 1928 and substantially below the unusually active period of 1929. Department store sales in May were approximately th » same as those of a year ago. Wholesale Prices A further decline in the wholesale prices of commodities occurred in May and the first half o f June. The downward movement was interrupted in the last half o f May by substantial increases in the prices o f grains, meats and livestock, but became pronounced about the middle o f June when the prices o f cotton, silk, rubber, copper and silver reached exceptionally low levels. Wheat, meats, livestock and cotton textiles also declined in price at that time, while prices o f wool and woolen goods, pig iron and steel showed little change. Bank Credit Monthly averages of weekly figures for report ing member banks in leading cities. Latest figures are averages of first two weeks in June. Monthly rates in the open market in New Y ork: commercial paper rate on 4-6 month paper. Acceptance rate on 90-day bankers’ acceptances. Latest figures are averages of first 20 days in June. Loans and investments of reporting member banks increased fu rth er by $265,000,000 in the fou r weeks ending June 11 to a level considerably higher than a year ago. The increase was entirely in investments and in loans on securities, of which a large part represented loans made by N ew York City banks to brokers and dealers in securities in replacement o f loans withdrawn by other lenders. All other ’ loans continued to decline and at $8,400,000,000 on June 11, were the smallest since 1926. Expansion o f member bank credit during this period was reflected in larger demand deposits and an increase o f $30,000,000 in member bank re serves at the reserve banks. The volume of money in circulation showed a net increase o f $13,000,000. Funds fo r these uses were obtained larsrelv from further additions o f $24,000,000 to the stock o f monetary gold and from an increase o f $22,000,000 in the volume of reserve bank credit outstand ing. Reserve bank holdings of U. S. securities increased by about $50 0 0 0 000 and their holdings o f acceptances declined by about half this amount. F or the week ending June 18, the total volume o f reserve bank credit de clined somewhat and there was a decline in the volume o f money in circula tion. Money rates in the open market continued to decline during the latter half of May and the first half o f June and at the middle o f the month com mercial paper at 3% -3% per cent and acceptances at 2 1/8 per cent were at the lowest levels since 1924 and early 1925. Bonds yields moved sliehtlv lower in June. In the first week of June the rediscount rate at Cleveland was reduced from 4 to 3% per cent, in the third week the rate at New York was reduced from 3 to 2 ^ per cent and the rate at Chicago from 4 to per cent.
@FedFRASER