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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 15 Cleveland, Ohio, July 1, 1933 The upward movement in trade and industry re ported last month continued in late May and the first three weeks of June, and the gain from the low level of March to the present time has been sharper than for any period of equal length on record, both in the fourth dis trict and in the entire country. W ith much of the re cent advance coupled with the automobile and in turn the steel industry, operations in this section have ad vanced at a more-rapid-than-average rate and in late June were higher than since 1931. Although in some sections closed banks were an element hindering expansion, the upward movement continued generally, despite this re tarding factor. The follow ing table shows the April-to-May percent age change in various business indicators of importance to this section compared with the ten-year average Aprilto-May change. In most o f the principal lines the monthto-month comparison in 1933 was very much more fa vorable than the average o f past years. Fourth D istrict unless Percentage change otherwise specified A p ril-M ay, 1933 Bank Debits .............................................. + 5.8 Postal Receipts ........................................... +1.3 Department Store Sales ........................... — 2.9 Building Contracts Awarded ............... + 3 3 .6 P ig Iron Production2 ....... ....................... + 4 2 .1 P r o d u c tio n 2 ........................... + 4 6 .9 Autom obile Production3 ........................... Coal Production ........................................... Cement Production ........................... ......... Shoe Production ......................................... Tire Production3 ...................................... 2United States. 3United States— March to A pril. + 2 0 .8 + 2 2 .7 + 1 0 7 .6 + 8.9 + 5 3 .3 S te el In g o t Ten-year average Percentage change A p ril-M ay — 5.5 — 5.5 — 3.8 + 4.8 + 1.7 — 0.3 + 1.2 + 3.4 + 4 0 .4 + 2.8 + 6.3 Electric power production, as shown on the accompany ing chart, has increased sharply recently and the weekto-week comparison in the central industrial region, of which this district is a very important part, with the same period of 1932 shows the progress made since the banking holiday. In the week ended April 1 electric power production in this section was 8.1 per cent below the same week last year. By the third week o f June power production had advanced until it was 11.9 per cent ahead of the same period of 1932, and was higher than in the latter part of 1931. Increased industrial activ ity was largely responsible for the upturn, for household consumption usually declines at this time of year. Employment improved in May and the first three weeks of June, according to reports received from all parts of the district, and some wage cuts have been restored, and No. 7 pay rolls increased as a result of this and longer hours worked. W hile distinct gains have been made, consider able unemployment still exists, compared with preceding years. In the steel industry local plants have been operating at better-than-average rates for several weeks. Tin plate production is at capacity levels and output in the latest week was at 80 per cent in Cleveland, 52 per cent at Youngstown, and at about 41 per cent at Pittsburgh. Tire companies experienced the best business in months, May rubber consumption being greater than since 1929. Most all local companies have enjoyed a spurt in sales. Clothing producers have a larger volume o f orders for fall goods than for several seasons. Sales o f both flat glass and containers were up sharply. May coal produc tion was 30 per cent ahead o f a year ago and automo bile production was 18 per cent greater in May than in the same month o f 1932. Shoe production was up 51 per cent from last year and cement manufactured in this section was 36 per cent above May, 1932. Agricultural conditions were just about average, but the season was somewhat retarded by adverse weather conditions. The increase in the price o f farm products was encouraging to those having crops in average or better-than-average condition. FINANCIAL A slight increase in the volume of credit extended by reporting member banks in leading cities occurred in the four weeks ended June 21, entirely through larger in vestment holdings; loans on securities and other types THE MONTHLY BUSINESS REVIEW o f loans declined slightly in the period. Borrowings of member banks at the reserve bank were sharply reduced in mid-June and note circulation declined to a lower level than prevailed just prior to the national bank holiday. Savings deposits at 44 selected banks throughout the district were 0.1 per cent smaller at the end o f May than on April 30 and were down 11.2 per cent from a year ago. Debits to individual accounts at banks in 24 cities of the district increased 5.8 per cent from April to May in contrast with an average reduction for the period of 5.5 per cent in the past ten years. Compared with a year ago debits were down 16.5 per cent, a part of the decline being due to the fact that several of the large banks were still unlicensed and therefore were permit ting no withdrawals. In the five-month period debits were 23 per cent below the same interval o f 1932. The record o f commercial failures in this section con tinues quite favorable. In May there were only 145 defaults, a reduction o f 40 per cent from last year and of 26 per cent in the first five months. Liabilities of the defaulting concerns were down 1.3 per cent in May and 22.5 per cent in the five-month period from a year ago. There was a sharp decline in the volume o f credit extended to member banks in this district, bills discounted being reduced from $62,000,000 in late May to $24,000,000 on June 21. On the latest date bills discounted were at about the level prevailing at the beginning of the year and about $20,000,000 lower than a year ago. The rate charged on loans by this bank was reduced to three per cent on June 10 from ZV2 per cent, the rate in effect since October, 1931. The volume of acceptances owned was slightly reduced as bills matured, but the change was insignificant because o f the limited holdings. Investment in Government se curities to a very moderate degree occurred in the four latest weeks, but the increase was much more than offset by the decline in member bank borrowings. On the latest date total credit extended amounted to $206,247,000, a reduction o f $36,000,000 in the four latest weeks. At this figure, earning assets were lower than since early February and $15,000,000 below a year ago. ratio o f total reserves to deposit and note liability was 62.5 on June 21, the highest since May, 1932. Member Bank Credit The accompanying chart shows total loans and investments and total de posits o f weekly reporting banks in principal cities o f the fourth district where the banking situation was not materially affected by the failure of some member banks to obtain licenses. Since the banking holiday, there has been a gradual increase in total deposits, the sharp advance in the lat est week representing Government deposits which ex panded as a result of the June 15 financing. The sharp increase in credit extended in the latest week represent ed purchases o f Government bonds in mid-June and the upward movement from early March was largely from that source though some investing in other than Gov ernment bonds has occurred. Loans, both collateral and “ all other,” have declined gradually since early March, but there was no contraction in loans in the two latest weeks. Demand deposits at these banks increased 14 per cent between early March and mid-June, but declined slight ly in the latest week. Time deposits in the three month period showed practically no change, though a fair increase was recorded in the week ended June 24. Reserve Bank Credit Despite the sharp increase in the volume o f business and the advance in prices in recent weeks, the volume of notes in circulation declined. On June 21 Federal reserve notes and bank notes of this bank in circula tion totaled $312,000,000, compared with $325,000,000 on June 24 and $287,000,000 a year ago. From the high point in early March, note circulation has declined $112,000,000. In the face of this, business activity has increased sharply, the Federal Reserve Board’s index of industrial production advancing from 60 to 76 per cent o f the 1923-1925 monthly average from March to May, with further increases being indicated for June. Reserve deposits o f member banks on the latest date were approximately the same as a month ago and were about $8,000,000 lower than last year at this time. The MANUFACTURING, MININu Iron and Steel Because the automotive and container industries account for the m ajor share o f the recent activity in the steel in dustry, fourth district mills expanded their operations more rapidly than the entire industry during the month ended June 24. As compiled by the magazine Steel, steelworks opera tions in the entire country improved from 40 per cent in the third week of May to 51 per cent in the third week of June. During this period the rate at Pittsburgh advanced from 25 to 41 per cent, at Youngstown from 45 to 52 per cent, and at Cleveland, including Lorain, from 58 to 80 per cent. As the national steel rate approached the 50 per cent level in June, railroad, building and miscellaneous re quirements for iron and steel provided some support, but the broad base still was supplied by automobiles and tin plate. Automobile assemblies in June increased over May, WEEK1_Y REPORTING MEMBER BANKS MILLION* OF DOLLAR!3 4TH. DISTRICT —RE'/ISED SERIES 1200 * ' T OTAL. LOANS AN1 INIVESTME;n t s !> IIOO 1000 TOTAL 1° l 1-o J 2 OSIT■S_ — X ✓ 900 — / ann 8 15 22 MAFtCH 2 9 5 12 19 APRIL 26 3 10 i t B4 MAY 31 ‘ 14 JUNE i >1 THE MONTHLY BUSINESS REVIEW contrary to the seasonal trend since 1922. Most of the retail demand, which caused May and June pro duction to expand, was thought to have originated in released bank funds, but buying created by improved industrial conditions was not expected in the market until somewhat later in the year. Some placing of steel orders in anticipation o f higher prices undoubtedly was a factor in the month ended June 24, but a great m ajority of production passed direct ly into consumption. Some contracts made in late June carried a stipulation against any advance in wage rates or freight rates. A slow but steady advance in prices was reg istered by the iron and steel composite o f the magazine Steel, which went from $28.59 on May 27 to $28.83 on June 24. This rise of 24 cents was occasioned by higher prices on hot-rolled and blue-annealed sheets. Iron and steel scrap prices, which faltered late in May, for one reason because they had caught up with pig iron quotations, began strengthening in June, coincident with a revival o f demand. During the third week of June the entire iron and steel situation, both production and prices, became a little confused pending a clarification of the effect o f the Recovery Act, but underlying factors were entirely favorable. Both steel ingot and pig iron production in May registered the most noteworthy gains of a year. In got output advanced from a daily rate of 54,514 tons in April, or at 25.08 per cent of capacity, to 74,148 tons, or 34.11 per cent o f capacity in May. The May total of 2,001,991 tons gave 1933 a five-month total of 6,391,675 tons; in five months of 1932, production was 6,784,453 tons. At the present time there are indications that output in the first half of the year might exceed the same period o f 1932. W ith the lighting o f 13 blast furnaces, making 2 3 added in two months, the daily rate of coke pig iron pro duced in May went to 29,249 gross tons, compared with 20,786 tons in April and 25,282 tons in May, 1932. The month’s total of 906,724 tons made 3,194,196 tons pro duced in the first five months o f 1933, compared with 4,538,505 tons in the corresponding period o f 1932. On May 31 active stacks numbered 61 out o f 289. Production of bituminous coal at fourth district mines increased 22.7 per cent from April to May and showed further improvement in June, the advance in both pe Coal 3 riods being greater than seasonal. The ten-year aver age April-to-May increase in this district was 3.4 per cent. Not only has industrial consumption o f coal increased in recent weeks, but more forward buying under con tract was reported than for some time. F'ear o f higher prices and uncertainties connected with the Industrial Recovery Act prompted purchase o f coal for future needs in some cases. Output o f fourth district mines was 30 per cent higher in May than a year ago and the month’s increase nearly offset the decline recorded in earlier pe riods o f this year. The five-month reduction from 1932 was only 0.1 per cent. Increased production has meant additional employ ment in mining areas where conditions have been very unfavorable for a long time and wage increases rang ing from 10 to 15 per cent were granted in several sec tions. Coal prices, particularly slack coal used for steam and power production, are about 15 to 20 cents a ton higher than a year ago. Shipping of coal from Lake Erie ports has been in a fairly large volume, such shipments in May totaling 3,128,000 tons, an increase of 49 per cent from the same period o f 1932. Assemblying o f automobiles increased 20.8 per cent from April to May in contrast with the downward trend of production in past years at this season, and the season ally adjusted index of the Federal Reserve Board ad vanced to 51 per cent o f the 1923-1925 monthly aver age, the highest since December, 1932, when the industry was unusually active, for that season o f the year, turn ing out new models in preparation for the annual shows. The increase continued in the first three weeks of June and actual output in the third week o f the month was' 55,496 cars, according to Cram's reports. There are in dications that June output will exceed May, a very un usual development. Total automobile production in May, according to the Department of Commerce, was 218,171 cars and trucks. This was 18.4 per cent ahead of a year ago and the highest for any month since July, 1931. In the first five months o f the year output of motor vehicles was 754,316 units, an increase of 9.6 per cent from the cor responding period o f 1932. Automobiles Compared with a year ago May production of passen- 4 THE MONTHLY BUSINESS REVIEW gar cars and taxicabs was up 17 per cent and truck out put increased 26 per cent. In the five-month period the number of passenger cars assembled was 11.8 per cent ahead of the same interval o f 1932, whereas truck pro duction was down 5.8 per cent in the period. The accelerated advance in production at a time when, in most years, output is declining was due to the decided upturn in sales follow ing the opening o f banks in March. Most of the buying has been confined to the lower price brackets, but sales of medium- and high-priced cars have improved in recent weeks. Prices o f automobiles generally remain unchanged, even though there has been a decided increase in the price of some raw materials and finished parts. Autom obile registrations in Ohio and western Penn sylvania reached 13.891 units in May, an increase o f 40.6 per cent from a year ago and the highest since June, 1931. Kubber and Tires The tire and rubber industry continued to expand in late May and early June, according to reports received from m ajor producers in this section, though figures re lating to operations for the period are not complete. Current tire production is paralleled to some extent by crude rubber consumption which in May was up 70 per cent from April, and 44 per cent above a year ago. There are indications that June consumption was about seven per cent greater than in June, 1932, when tire factories were unusually busy prior to enactment of the Federal tax on tire sales. At 44,580 tons, rubber consumption in May was higher than since the same month o f 1929, and was well in ex cess of imports in the period, which totaled 27,55 6 tons. Inventories consequently were reduced, but on May 31, at 364,459 tons, they were still slightly above a year ago. In the first five months o f 1933, imports of crude rubber totaled 124,879 tons, a reduction of 28 per cent from the same period o f 1932. Employment at rubber factories increased over ten per cent from April to May, according to the U. S. De partment of Labor, whereas in most years there is lit tle change in the period. At 17 Ohio concerns the in creased from mid-April to mid-May was 7.2 per cent, but, according to the Ohio State Bureau of Business Research, the number employed on the latest date was still 4.4 per cent below a year ago and only 61.3 per cent of the 1926 monthly average. This rather conflicts with the reports of capacity operations emanating from tire cen ters recently, but no doubt is explained in part by the fact that plant capacities change, particularly when opera tions are curtailed and machinery becomes more or less obsolete. Final figures on April operations, as compiled by the Rubber Manufacturers’ Association, show that production in the period was up 53.3 per cent from March, but was 16.5 per cent below April, 1932. Shipments increased 74.7 per cent in April and were off only 1.2 per cent from last year. Stocks o f manufactured tires dropped 7.1 per cent in the month and on May 1 they were down 31.2 per cent from the same date in 1932. The second increase in tire prices occurred on June 7, advances ranging from 7 ^ to 10 per cent on tires and amounting to 15 per cent on tubes. This was necessary in part because of the sharp increase in raw material prices, crude rubber advancing about 120 per cent from the year’s low to date, the latest quotation being 5.75 cents a pound for No. 1 smoked sheets. Raw cotton in late June was 10 cents a pound, compared with the year’s low o f about five cents. W ages generally were advanced ten per cent in mid-June as one of the pay reductions made earlier this year was restored. Following the enactment o f the National Industrial Recovery Act, tire manufacturers have already taken steps to conform with the terms o f the new legislation and to stabilize conditions so far as possible in the man ufacturing and selling branches of the industry. Manufacturers o f both men’s and wornen’s clothing in this district in the lat ter part of June were working on fall goods and in most cases had a larger volume of advance orders than for several seasons. Buying for future needs was prompted generally by the phenomenal advance in raw textile prices of all types. The increase from May to June in raw materials was about 50 per cent. From their low earlier this year raw wool prices have advanced over 100 per cent, and cotton jumped from a low of about five cents a pound to nine and one-half cents in the latter part o f June. Silk prices have risen from $1.15 a pound to $2.20 in the past few months. Clothing Employment at local factories in May was 10.4 per cent above a year ago and up 3.2 per cent from April. In most years there is a falling-off from April to May as production on spring and summer goods is completed. Up to the present time orders of fall goods are 20 to 25 per cent ahead o f the same period of 1932, but in cities and towns where unsatisfactory banking conditions pre vail, advance ordering is somewhat restricted. Sales of knitted outer and underwear and sports wear have been running ahead o f a year ago. Other Manufacturing The expansion reported in most of the smaller manufacturing industries of this district in the month ended May 15, continued in the four follow ing weeks. This upward movement in most lines was distinctly contrary to the seasonal trend o f past years. Price increases, o f both raw materials and finished goods, have stimulated buying for current consumption and also to replenish depleted inventories in many industries. Indications of a summer let-down were not so evident as in most years at this sea son. Auto Parts, Accessories. Production of auto parts and accessories continued upward in late May and the first three weeks of June, contrary to the seasonal movement o f past years. Some companies were turning out goods at a rate not exceeded since 1929. Employment at 41 Ohio concerns was up 4.7 per cent from April, in con trast with a five-year average decline for the period of 11.7 per cent. Compared with a year ago the number of workers was down 2.7 per cent in the latest month. In recent weeks many workers not employed for varying lengths o f time were called back to work; in some cases THE MONTHLY BUSINESS REVIEW more work has been provided through the continued use of the stagger system. Prices have shown a tendency to advance. Erick and Tile. Operations in the brick and tile indus try are at about 25 per cent o f capacity, a slight im prove ment from a month ago. Possibility of increased con struction as a result of recent legislation was somewhat encouraging. China and Pottery. Employment at plants engaged in china and pottery production increased nine per cent in May in Ohio and was 31 per cent above a year ago. In past years there was a slight decline in the number of employees between April and May. Further advances were reported in the first three weeks of June. Wages are still ten per cent under a year ago and prices on fin ished goods are down ten to fifteen per cent. Electrical Supplies. Prices of raw and finished mate rials advanced quite sharply as copper prices rose. Some increases amounted to nearly 30 per cent. There has been a steady rise in the number of incoming orders, most of which are small. Sales in some cases were equal to a year ago. Employment at 30 Ohio factories increased 20 per cent whereas the average change in the past five years was a drop of two per cent. Glass. Plate glass production in May was 7,922,424 square feet, the largest since May, 1931. A further in crease occurred in June, according to trade authorities, and furnaces have been lighted recently that were idle for many months. Demand was chiefly from the automo bile industry and much o f the buying represented pur chase of laminated glass. Passage o f the beer bill was very beneficial to the container and moulded glass indus try. Finished prices remain unchanged, though prices of some raw materials have increased. Machinery, Tools. A considerable upturn in sales of machine tools, specialties, etc., occurred in May and early June and operations of local factories were up quite sharp ly, but, notwithstanding the increase, they were still much below past years. Paint. Production of paint and materials in May and the first half of June was ahead of the same month of 1932, according to reports, with a corresponding increase in employment and pay rolls. Raw material prices have advanced quite sharply. In most past years there was a decline in sales in May and June. Paper. Only a slight increase in the number employed 5 at paper and boxboard plants occurred in May, but pro duction was higher than in April, as a result of longer working hours. Boxboard prices advanced 40 per cent in the past six weeks. Paper prices also have increased and there is considerable advance ordering as buyers an ticipate requirements. Shoes. Manufacture o f footwear at 32 establishments in the fourth district increased 8.9 per cent from April to May, contrary to the trend o f past years, and in the latest month output was 51 per cent ahead o f the same period of 1932. In the first five months of this year pro duction was up 24 per cent from a year ago. Sharply ad vancing hide prices stimulated buying generally, and wholesale shoe prices have increased about 25 to 35 cents a pair with indications that further advances might be expected. Factories in this section are operating near capacity levels, turning out medium and cheap-priced footwear. Orders for replacement of stocks that were al lowed to decline in recent months have been received from all parts of the country. Demand for high-priced foot wear is less active than for the lower grades. TRADE Department stores in leading cities of Retail the fourth district reported dollar sales in May 3.8 per cent below the corre sponding month of 1932. Four of the reporting cities showed slight gains from a year ago. This is quite a fa vorable showing, for, because o f the reduction in prices from a year ago, (notwithstanding the recent increase) dollar volume comparisons are somewhat distorted by this fact. According to Fairchild’s, retail prices in May re corded the first advance since 1929. The increase was 1.4 per cent, but on June 1 prices were still 8.4 per cent below the corresponding date a year ago. Current prices are 25 per cent lower than in 1931 and 40 per cent below the peak of 1929. All principal groups showed gains in May except musical instruments. Sales in the first five months o f the year were 17 per cent smaller than in the same period of 1932. Some restocking of depleted department store shelves occurred in May, the dollar value of stocks increasing 2.2 per cent, part of which represented advancing prices. A fter allowing for seasonal changes, the index of stocks was up about two per cent, the first advance in over two years. Retail sales, in proportion to the stocks carried, have been much larger so far this year than in 1932. In May the stock turnover rate was .35 against .27 last year and in the four months February-to-May, the rate was 1.20 compared with 1.09 in the corresponding period of 1932. In the individual departments sizeable gains in sales were recorded in cotton and woolen dress goods, silks, linens, domestics, silverware, and all types of home fur nishings. Increases in raw material prices no doubt were factors contributing to the increased buying. It is inter esting to note that nearly all the gains occurred in de partments handling articles for the home. Furniture sales at 44 reporting stores were 13.7 per cent larger in May than a year ago. W earing apparel store sales were 19 per cent smaller in May than in the same month of 1932. Chain grocery sales improved in May. 6 THE MONTHLY BUSINESS REVIEW A spurt in wholesale buying in all reporting lines occurred in May and sales of dry goods and groceries were 16.7 per cent and 4.5 per cent, respectively, above a year ago. The increase from April to May in the form er was 2 6 per cent, and in the latter 14 per cent, both considerably more than seasonal. Hardware sales increased 14.5 per cent in May, but were still four per cent below May, 19 32, and drug sales were up 8.7 per cent from April, but off 9.3 per cent from last year. W holesale BUILDING The total volume o f new construction started in May in this district was valued at $6,604,000, a very small figure compared with the average of past years, but represented an increase of 33.6 per cent from April. On a percentage basis this was considerably above the ten-year average April-to-May increase of 4.8 per cent. Most of the im provement was in residential building, contracts for which in the latest month, valued at $2,257,000, were only 1.6 per cent below one year ago. In the first five months the value of residential building contracts awarded was 31 per cent smaller than in the same period o f 1932, The 53 per cent decline in total building in May from a year ago in this section was chiefly due to the sharp fall ing-off in public construction, contracts for which amount ed to $1,421,200 in the latest month against $10,340,900 a year ago. Public utility contracts awarded in May were valued higher than in April or a year ago and all other non-residential building was about the same in May as last year, but up 24 per cent from April. One o f the most favorable developments in the build ing industry in this district was the sharp increase in con templated work reported. In May this was valued at $74,000,000, an increase o f over five times the amount indi cated in April and compared with $18,000,000 in May, 1932. It was the largest amount reported since April, 1930. The largest single item was the $50,000,000 flood control project for southern Ohio. In the construction supply industry, demand for lum ber has increased quite sharply, buying, however, being somewhat speculative, prompted by the advancing trend in lumber prices. Some improvement in retail lumber buying was reported, but much o f this represented repair and remodeling work. Retail lumber dealers have been replenishing their stocks somewhat. Some types of lu m ber have doubled in price recently, but the average in crease was reported to be about 15 or 20 per cent. AGRICULTURE Adverse weather conditions in May and early June fur ther retarded a late planting season in many parts of the country, and particularly in this district. Growing crops were benefited, but planting o f the late crops was nigh impossible. Prior to June 1, only about 60 per cent of the corn crop of this district had been planted, which was from two to three weeks later than usual. In the north ern part of the district May 31 is usually considered the latest that corn can be sown to insure a mature crop. One of the most important recent developments in the general agricultural situation was the passage of the Farm R elief Act, including its provisions for controlled produc tion, levying a processing tax, drastic monetary changes, etc. This bill was thought to be responsible for the ad vance in prices of farm commoditites, though other fac tors, no doubt, also contributed to the rise. The unprecedented increase in farm prices in the month ended May 15 continued in the four follow ing weeks at a somewhat slower rate. Compared with a year ago, farm prices were up about 16 per cent. The advance in grain prices in the past two months was sharper than in any other m ajor group, but the individual commodity which gained most was wool, the increase totaling 75 per cent. W inter W heat Pennsylvania .... W est Virginia.... United States.... Production Production (thousands of bushels) Condition June 1 1933 forecast H arvest Average from June 1 Average 1933 1932 1921-30 condition 1932 1926-30 84 33,022 27,073 80 75 32,308 84 85 18,513 85 15,947 13,335 70 80 78 3,538 2,835 2,742 1,586 1,604 87 78 1,276 80 589,436 64.0 64.7 75.0 341,017 462,151 Although winter wheat improved slightly in condition in early May, wet and abnormally warm weather in the latter part of the month when the crop was in the critical stage of development offset most o f the improvement and prospects were generally the poorest in over 30 years. In the states of the fourth district, however, actual im provement occurred in May and the crop indicated by the June 1 condition was larger than in 19 32 or the average harvest of the five years, 1926-1930. Dry, hot weather in the first half of June caused considerable damage in many sections o f the district though no figures on the amount of deterioration are available as yet. Some lo d g ing was reported, particularly in low areas. Foreign wheat prospects, based on reports o f acreage sown in 27 countries, are somewhat less favorable than in 1932 or 1931, a reduction of over 2,200,000 acres or 1.6 per cent being reported. Indications point to smaller yields per acre this year than in 1932 in many countries. Oats (per cent of estimated normal) Condition June 1 Ohio Penna. K y. 1933 ...................................... .... 66 83 77 82 65 86 80 W . Va. 82 70 83 U. S. 78.7 78.9 82.2 Oat planting in this district and in some other parts of the country was two to three weeks late due to wet weather. The June 1 condition was below the average of past years in most sections and local fields, particular ly low ones, are weedy. Corn Many corn fields were yet to be planted on June 1 and some fields had not been plowed prior to that time. In sections where planting was completed in late May, the warm weather was particularly favorable and caused good growth. The late planting in many sections indicate that yields in all probability are likely to be below average, even allowing for favorable conditions during the re mainder of the growing season. Hay and Pastures Established meadows made good growth in May and the condition of hay and pastures as of June 1 was higher 7 THE MONTHLY BUSINESS REVIEW than the ten-year average and much improved from earlier months this year. All types of grasses recorded gains. Fruits A sharp decline in apple crop prospects occurred in May because of poor pollination as a result of wet weather, though trees generally bloom ed heavily. Insect and scab infestation is quite bad in most sections and a heavy “ June drop” is expected in this district. The June 1 con dition, however, is still above the average of preceding years. Other small fruit prospects are below average in most parts of the fourth district. Tobacco Dry weather in the first part of June held back plant development and in many sections much transplanting had not been done prior to the fifteenth of the month. Acre age figures are not yet available, but it is felt that the unfavorable conditions might result in a slight reduction in planting from the intentions’ report issued earlier in the year which showed a probable increase from the acre age harvested in 1932. Fourth District Business Statistics (0 0 0 o m itted ) % change J a n .-M a y , from 1932 1933 M ay, 1933 Fourth D istrict Unless otherwise specified B ank D eb its— 24 citie s............. .. . . $ 1 ,3 2 2 ,0 0 0 Savings D eposits— end of m on th : 5 7 6 ,1 0 7 27 selected banks, O. & P a .............$ 2,2 53 Postal Receipts— 9 c it ie s .. . . . . . . 3 Life Insurance Sales: Ohio and P a............................ .3 Retail Sales: 14,263 D epartm ent Stores— 51 f i r m s ...# 651 W earing A p parel— 11 firm s. . . . 3 Furniture— 44 firm s.......................... 3 667 W holesale Sales: 1,022 D rugs— 13 firm s..................................3 981 D ry G oods— 10 firm s.......................3 3,2 95 Groceries— 33 firm s.......................... 3 1 ,0 34 H ardw are— 14 firm s..........................3 2 ,2 5 7 Building Contracts— R e sid e n tia l.3 6 ,6 0 4 ” ” — T o t a l.............3 6 .6 2 0 Com m ercial Failures— Liabilities.3 ” ” — N u m b e r ......... 145 2 P roduction: 887 Pig Iron, U . S...............................Ton s 2 ,0 0 2 Steel In gots, U . S.......... . . . . T o n s 1 8 4 ,6 3 2 2 A u tom ob iles-P ass. C a r .......... U . S. ” — T r u c k s .......... U . S. 3 3 ,5 3 9 2 9 ,6 7 4 Bitum inous C o a l ........................Tons 642 C em ent— O ., W . P a., W . V a. Bbls. 815® Elec. Power— O ., P a., K y . k.w .h. 1 ,6 8 5 s P etroleum — O ., Pa., K y . . . . Bbls. 5 T ires, U . S...............................Casings Bitum inous Coal Ship m ents: Lake Erie P o r ts.........................T o n s Iron Ore R eceipts: Lake Erie P o r t s . . . . ............. Ton s 2 ,4 9 9 3 6 ,6 4 5 ,0 0 0 — 2 3 .0 — 1 1 .0 + 1 .9 5 9 4 ,2 6 3 1 1 1 ,165 — 3 .8 — 1 9 .0 + 1 3 .6 5 7 ,4 6 7 2 ,8 5 0 2 ,1 8 5 — 1 7 .9 — 2 8 .6 — 1 6 .7 — 9 .3 + 1 6 .7 + 4 .5 — 3 .9 — 1 .6 — 5 3 .1 — 1 .3 — 3 9 .6 5 ,0 35 3,703 1 4 ,3 3 5 3 ,7 3 6 7 ,1 5 9 2 5 ,4 4 8 3 0 ,4 0 0 9383 — — — — — — — — + 1 3 .1 + 7 8 .0 + 1 7 .0 + 2 6 .4 + 3 0 .3 + 3 6 .3 — 1 5 .6 — 1 6 .5 + 5 1 .2 — 1 1 .4 3 ,1 7 4 6 ,3 9 2 6 3 8 ,3 4 5 1 1 5,97 1 4 6 ,7 7 5 1,3 33 3 ,7 4 4 4 6 ,7 6 5 * 5 7 ,8 0 6 4 — — 9 .4 9 .5 2 0 .8 1 4 .1 1 3 .1 1 5 .5 3 1 .1 4 8 .7 2 2 .5 2 6 .0 — 3 0 .1 — 5 .8 + 1 1 .8 — 1 .2 — 0 .1 — 1 0 .1 — 1 0 .0 — 1 2 .2 + 2 4 .1 — 3 3 .0 3 ,1 28 + 4 8 .9 4 ,5 5 2 + 3 2 .9 448 + 1 0 4 8 .7 456 + 1 0 6 9 .2 2actual num ber 4first 4 m onths 1 m on th ly average 3April C on fid en tial Fourth District Business”Indexes — 1 6 .5 % changi from 193: ( 1 9 2 3 -1 9 2 5 = 1 0 0 ) M ay, 1933 B an k D e b its ( 2 4 c itie s ).................................. .. C om m ercial Failures (N u m b e r ) .............................. ” ” (L ia b ilitie s ).......................... P ostal R eceipts (9 c it ie s ) ............................................. Sales— Life Insurance (O h io & P a .) . . . . . . . . . — D ep a rtm en t Stores ( 5 3 ) . . ........................... — W h olesale D ru gs (1 2 fir m s )...................... ” D r y G oods (1 0 f i r m s ) . . . . — ” Groceries (3 3 fir m s)............. — ’* H ardw are (1 4 fir m s )............ — ” A ll ( 6 9 ) .......................................... — C hain D rugs (3 fir m s )* * ............................ Bulilding C on tracts ( T o t a l ) . . , ................................ ” ” (R e s id e n tia l).......................... Production— Coal (O ., W . P a ., E . K y . ) ............. — C em ent ( 0 . , W . P a ., W . V a . ) ____ ” — E lec. Pow er ( O ., P a ., K y . ) * ........... ” — P etroleu m ( O ., P a ., K y . ) * ............. ” — S h o e s............................................................ 49 99 150 87 63 68 40 57 53 55 63 14 13 54 53 97 91 94 M ay, 1932 58 164 152 85 92 68 75 34 55 55 53 74 30 13 41 39 115 10 9 62 M ay, 1931 M ay, 1930 M ay, 1929 120 13 0 69 119 141 101 103 79 92 91 91 91 10 7 81 86 167 14 0 13 9 61 12 9 101 73 124 145 106 112 92 97 96 98 88 136 10 0 93 133 14 2 113 99 91 131 135 105 125 89 90 55 72 70 71 88 76 44 65 10 7 130 10 4 70 Wholesale and Retail Trade (19 33 com pared with 19 32 ) Percentage Increase or D ecrease STOCKS SALES SALES M ay, M ay, First 5 1933 1933 m onths *A p ril. **P e r individual unit operated. D E P A R T M E N T S T O R E S (5 1 ) + — + — — + + — — Debits to Individual Accounts (T h ousan d s of D ollars) 5 weeks ending June 21, 1933 A k r o n ............. B u tle r .................. C a n to n ................ C in c in n ati. . . . . C leve lan d .......... , C olu m b us.......... D a y t o n ............... . E r ie ....................... F ran k lin ............. G reen sbu rg. . . H a m ilto n ........... H o m e ste a d .. . . L e x in g to n . . . . L im a .................... L orain .................. M id d le t o w n .. . Oil C i t y ............. P ittsb urgh . . . . Springfield. . . . , S te u b e n v ille .. . T o le d o ................. W a rre n ............... W h e e lin g ........... Y o u n g sto w n . , Z an e sville.......... T o t a l ................ . 35 ,7 3 5 6,6 11 2 0 ,0 9 3 . 2 5 0 ,6 9 9 , 3 5 2 ,2 3 0 9 8 ,2 3 9 , 4 2 ,7 6 4 , 1 6 ,7 5 8 2 ,7 7 6 3 ,9 1 8 7,8 6 4 1,9 22 1 4 ,2 5 0 5,7 6 4 2 ,2 3 9 7 ,7 3 6 6 ,2 7 6 6 1 5 ,9 0 1 . 1 0 ,0 3 4 4.851 7 5 ,6 6 7 6 ,0 2 6 3 0 ,3 5 9 . 2 8 ,1 8 5 5 ,9 9 7 ,1 ,6 5 2 ,8 9 4 % change from 1932 Y e a r -to -d a te Y e a r -to -d a te D ec. 2 9 , 1932 D ec. 31, 1931 to to June 21, June 22, 1933 1932 — 3 6 .5 — 6 .8 + 1 .6 — 6 .2 — 1 9 .9 — 1 2 .0 — 1 3 .0 — 2 7 .0 — 9 .5 — 3 2 .6 — 1 8 .3 — 2 6 .8 — 6 .8 — 3 8 .8 — 3 0 .7 + 1 7 .9 — 4 4 .9 + 9 .5 — 1 8 .2 — 1 4 .4 — 6 .9 + 3 2 .3 + 2 .6 — 1 2 .1 — 1 2 .2 — 6 .9 18 4,03 1 32 0,57 1 3 3 ,2 0 4 3 7 ,8 5 8 9 7 ,0 3 0 11 2,29 3 1 ,2 7 9 ,9 1 6 1 ,5 6 2 ,1 1 2 1 ,9 4 3 ,9 8 8 2 ,6 6 3 ,1 9 9 5 0 2 ,0 4 8 6 1 9 ,3 8 9 2 1 5 ,0 5 3 2 8 1 ,7 0 5 8 9 ,0 1 2 13 7 ,0 9 5 12 ,231 1 8 ,0 4 4 2 2 ,5 9 9 34 ,2 0 5 3 6 ,2 9 8 5 0 ,1 1 7 9 ,0 3 6 1 4 ,5 7 7 9 0 ,4 1 8 1 0 6 ,8 7 4 3 3 ,2 2 0 4 8 ,5 9 7 12,661 1 9 ,5 4 7 3 6 ,8 0 8 3 1 ,6 4 0 34 ,1 3 1 5 5 ,9 0 6 2 ,8 6 5 ,7 3 4 3 ,3 4 7 ,3 5 0 5 5 ,6 2 7 7 5 ,1 3 9 24,261 3 4 ,3 7 6 4 7 5,57 1 3 8 1,71 8 2 5 ,3 0 7 2 8 ,5 7 0 1 4 4,73 8 169,10 1 12 8 ,6 4 5 17 4,21 3 2 8 ,7 0 4 3 6 ,4 3 5 8 ,2 8 1 ,2 5 0 1 ■ 1 0 ,4 5 9 ,6 5 2 % change from 1932 — — — — — — — — — — — — — — — — — — — — — — — — — — 4 2 .6 1 2 .3 1 3 .6 1 8 .1 2 7 .0 1 8 .9 2 3 .7 3 5 .1 3 2 .2 3 3 .9 2 7 .6 3 8 .0 1 5 .4 3 1 .6 3 5 .2 1 4 .0 3 8 .9 1 4 .4 2 6 .0 2 9 .4 1 9 .7 1 1 .4 1 4 .4 2 6 .2 2 1 .2 20. 8 1 .9 5 .6 2 .3 7 .0 7 .3 1 .1 1 .9 4 .7 3 .8 — — — — — — — — — 1 6 .8 1 6 .8 1 3 .4 1 9 .2 2 0 .1 1 6 .4 1 9 .4 2 1 .0 1 7 .9 — — — — — — — — — 2 2 .0 2 4 .4 2 7 .2 1 8 .6 2 0 .2 2 4 .5 1 6 .4 2 8 .8 2 2 .9 W E A R I N G A P P A R E L (11 ) F U R N IT U R E — 1 9 .5 — 3 3 .0 — 2 8 .6 + 1 6 .8 + 1 8 .9 + 2 3 .9 + 3 .5 — 1 0 .6 + 1 4 .0 + 1 3 .7 — — — — — — — — 1 4 .9 — 0 .8 — 1 8 .5 — 6 .3 — 1 .8 + 6 .7 — 1 3 .6 + 3 3 .5 — 1 5 .0 + 9 .1 + 4 .5 + 1 6 .7 — 9 .3 — 3 .9 — — — — — — — — — — — 1 9 .8 — 2 4 .8 — 2 3 .1 (44 ) C H A IN STO R E S* D ru gs— D istrict ( 4 ) ......................................... Groceries— D istrict ( 5 ) .................................. W H O L E S A L E G R O C E R I E S (33) W H OLESALE W H OLESALE W HOLESALE — 7 .5 — 2 4 .3 — 1 9 .0 D R Y G O O D S ( 1 0 ) .. . D R U G S ( 1 3 ) ................... H A R D W A R E ( 1 4 ) ... 1 4 .6 1 1 .3 1 7 .9 2 2 .6 3 0 .2 1 7 .8 1 6 .7 1 6 .4 1 3 .1 2 1 .3 0 .5 2 7 .5 7 .8 1 3 .1 1 4 .1 2 0 .8 1 5 .5 — ‘2 1 .4 — 8 .4 8 THE MONTHLY BUSINESS REVIEW Summary o f National Business Conditions By the Federal Reserve Board By the Federal Reserve Board Industrial activity increased rapidly in May and the early part of June, and there was an advance in the general level o f commodity prices. Prices of raw materials traded in on organized exchanges showed wide fluctuations, and a general rapid upward movement, while prices o f other commodities as a group showed relatively little increase. Production and Employment Index o f industrial production, adjusted for sea sonal variation, (1923-1925 average = 180) Latest figure, May, 76. Volume o f industrial production, as measured by the Board’s season ally adjusted index, increased from 67 per cent of the 1923-1925 average in April to 76 per cent in May, as compared with 60 per cent in March, 1933. Operations at steel mills continued to increase in May and the early part of June, contrary to seasonal tendency, and in the week ending June 24 activ ity is reported at about 50 per cent o f capacity. Output of the automobile industry was larger in May than in April and, according to trade reports, has increased further in June, although a decline is usual at this season. Lum ber output in May showed a considerable increase, from previous low levels. Activity at textile mills increased sharply to a higher level for the season than in any other month since November, 1929; and output of shoe factories in May was larger than in May o f any previous year. Employment in manufacturing industries increased considerably be tween the middle o f April and the middle of May, and the Board’s index, which is adjusted to allow for seasonal variations, advanced from 58 per cent o f the 1923-1925 average to 61 per cent. Factory pay rolls increased by a larger percentage to about 42 per cent o f the 1923-1925 average. Value o f construction contracts awarded during May and the first half of June, as reported by the F. W. Dodge Corporation, showed a non-seasonal increase from the extreme low levels prevailing earlier in the year. Distribution 1928 t92<5 Indexes of factory employment and pay rolls, without adjustment for seasonal variation, (1923-1925 r= 100) Latest figure, May, employ ment 60.0, pay rolls, 42.0. Freight traffic increased from April to May by more than the seasonal amount, reflecting chiefly larger shipments o f miscellaneous freight and mer chandise. Department store sales, which had increased substantially from March to April, showed little change in May. W holesale Prices W holesale comm odity prices, as measured by the weekly index o f the Bureau of Labor Statistics, advanced from 60.3 per cent of the 1926 average in the week ending April 15 to 64.5 per cent in the week ending June 17. This increase reflected a rapid rise in the prices o f commodities traded in on organized exchanges, including wheat, cotton, wool, hides, lard, sugar, silk, rubber and non-ferrous metals, and also in the prices of flour, textiles, and leather; while prices of petroleum were reduced and most other prices showed relatively little change. Foreign Exchange The value o f the dollar in the exchange market declined by 18 per cent between the middle of April and June 21. On the latter date the noon buy ing rate on cable transfers for the French franc was 4.81 cents, as com pared with a gold par o f 3.92 cents, and the English pound was quoted at £4.16, as compared with a rate of $3.41 on April 12. Indexes based on three-month moving averages of F. W . Dodge data for 37 eastern states, ad justed for seasonal variations. (1923-1925 average = 100) Latest figure, May, total 17; residen tial, 11. __ WHOLESALE PRICE! i l armProduct:& Foods"' Other Commodities Nv v ' W30 Indexes o f the United States Bureau of Labor Statistics (1926 = 100) Latest figures, May, farm products 50.2; foods 59.4; other commodi ties 66.5. Bank Credit A return flow of $156,000,000 o f currency from circulation and pur chase o f $118,000,000 o f United States Government securities by the reserve banks, placed a considerable volume o f reserve funds at the disposal of mem ber banks during the five weeks ending June 21. These funds were usd in part to reduce further the member banks’ indebtedness to the reserve banks and the reserve banks’ holdings o f acceptances, and in part were added to the member banks’ reserve accounts. Loans and investments o f member banks in 90 leading cities increased by $175,000,000 in the four weeks ending June 14, representing chiefly a growth o f security loans and other loans at New York City banks. Loans to brokers and dealers in securities made by New York City banks increased by $160,000,000 during the period, while security loans to other customers declined. Net demand deposits at the reporting banks increased by over $500,000,000, reflecting in part a further growth of bankers’ balances, prin cipally in New Y ork City. Money rates in the open market continued to decline during the period and in the middle o f June were only slightly above the lowest levels of re cent years. On May 26 the discount rate o f the Federal Reserve Bank o f New York was reduced from 3 to 2 y2 per cent and in the follow ing three weeks rates were lowered from 3 y2 to 3 per cent at the Federal reserve banks o f Chi cago, Boston, San Francisco, Philadelphia, St. Louis and Cleveland. At the other Federal reserve banks a rate o f 3% per cent prevails.
@FedFRASER