The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 16 Cleveland, Ohio, July 31, 1934 A summer slackening was evident in several lines of business activity in this district in the latter part o f June and the first half of July, In some cases the falling-off was seasonal while in others it was more than that, but in a few lines operations continued at a relatively high rate for this time o f year. This was particularly true o f many general manufacturing concerns located in smaller centers of the district. With some of the m ajor industries showing a severe decline at the mid-year, the general level of industrial operations was reduced, but some o f the factors which caused a high rate to be maintained in June were respon sible for the falling-off. In the steel industry consider ably more material was ordered by manufacturers than was required for immediate operations so that orders in the early part o f the third quarter were very limited. This was also the case in the rubber and tire, automobile parts, textile and coal industries. A comparison o f the various business indicators for the first six months o f this year with the same period of 1933 shows in part the degree o f improvement that has oc curred. The follow ing table shows the percentage changes between the two periods. In the case o f wholesale and re tail trade and debits to individual accounts price changes were partly responsible for the increases. Automobile production, TJ. S................................................................ Building contracts awarded— fourth district .................................. Cement production—fourth district ................................................. Coal production—fourth district ....................................................... Coal shipments—Lake Erie ports ................................................... Commercial failures— fourth district ................................................. Debits to individual accounts—fourth district .............................. Department store sales—fourth district .......................................... Furniture store sales—fourth district ............................................. Iron ore receipts— Lake Erie ports ................................................... Pig iron production, IT. S.................................................................... Steel ingot production, U. S................................................................ Savings Deposits—June 30— fourth district .......................... ......... Tire production— U. S.1.......................................................................... Wholesale sales—four reporting lines—fourth district .............. 'Five months* + 72.6 +153.7 + 50.6 -j- 28.1 -j- 45.3 — 64.2 + 20.8 + 27.7 -f* 53.5 -f-241.4 122.0 -f- 82.3 + 8.4 -f* 51.6 -j- 29.5 Employment throughout the district declined in June at a greater-than-seasonal rate, according to reports, but despite the slight falling-off, it remained 25 per cent high er than a year ago at this time and for the six-month period averaged 36 per cent better than in 1933. Local labor disturbances were less noticeable than a month ago. Retail trade fell off more than seasonally in June, the adjusted index dropping over four points. Comparison o f current sales with a year ago is much less favorable No. 7 than in the early months o f 1934, but last year at this time a considerable spurt in buying developed. Life insurance sales in June in Ohio and Pennsylvania were up 12 per cent from last year and the gain in the first six months was 13.9 per cent. Agricultural conditions in this district improved in June as a result o f rain, but the July 1 report o f the De partment o f Agriculture indicated that crop prospects were much below the average o f recent years. In contrast with other sections o f the country local crop prospects were quite favorable. The wheat crop turned out somewhat better than was expected. The corn crop in some parts of the district is in very good condition, but in other parts it is relatively poor. Prices, as a result of the se vere drought conditions in the West, have increased re cently on many farm products. FINANCIAL An important development in the financial situation in this district in the paist month was the appointment and organization o f an Industrial Advisory Committee com posed o f five members “ actively engaged in some indus trial pursuit” in this Federal reserve district for the pur pose o f considering applications for loans to industry to provide working capital, with a maturity o f five years or less, which were authorized by the amendment in June to the Federal Reserve Act. Section 13b of the Federal Reserve Act authorizes Fed eral reserve banks to discount or purchase from “ any mujggg STEEL INGOT PRODUCTION 2 TH E M O N TH LY BUSINESS R E V IE W bank, trust company, mortgage company, credit corpora tion for industry, or other financing institution” obliga tions maturing within five years, entered into for the purpose of providing working capital for any such estab lished industrial or commercial business and to make loans or advances direct to financing institutions on the security o f this type o f obligation. Any such financing in stitution either must obligate itself to the Federal re serve bank for at least 20 per cent of any loss which may be sustained by the bank upon any obligation acquired from the financing institution or advance at least 20 per cent o f the working capital for the established industrial or commercial business without obligating itself on the amount advanced by the Federal reserve bank. This amendment provides further that “ in exceptional circum stances, when it appears to the satisfaction of a Federal reserve bank that an established industrial or comm er cial business located in its district is unable to obtain requisite financial assistance upon a reasonable basis from the usual sources, the Federal reserve bank * * * may make loans to, or purchase obligations of, such busi ness * * * on a reasonable and sound basis, for the pur pose o f providing it with working capital, but no obliga tion shall be acquired or commitment made hereunder with a maturity exceeding five years.” In this district the Industrial Advisory Committee was appointed on July 7, a meeting to organize was held soon after that date and on the 26th of the month a second meeting was called for the purpose o f considering appli cations for loans o f this type. No information regarding loans which might be under consideration by financing institutions in the fourth district in which this bank may participate is available. Reserve and Member Bank Credit. Changes in reserve bank and member bank credit in the five latest weeks were quite insignificant. Total reserves of the Federal R e serve Bank of Cleveland increased $18,000,000 between June 20 and July 25 and, at $392,000,000 on the latest date, they were over $90,000,000 higher than at the be ginning of the year and at a record high level. Reserves generally are higher in mid-summer than at the begin ning of the year, but the recent increase has been greater than the average o f past seasons. Bills discounted for member banks in this district on the latest date amounted to only $446,000, and though they have been practically nil for many weeks they are gradually approaching the vanishing point. The volume of acceptances held and Government securities owned by this bank was unchanged in the five latest weeks. Circulation o f Federal reserve notes increased in late June and early July in anticipation o f holiday demand and also to take the place of Federal reserve bank notes in circulation which were being retired in the period. The liability for approximately $1,500,000 o f this bank’s Fed* eral reserve bank notes still in circulation was assumed in mid-July by the United States Treasury Department. This followed a deposit of an equal amount o f lawful money by this bank with the Department. Member bank reserve deposits increased $32,000,000 in the five latest weeks to $265,000,000 on July 25. Com pared with a year ago at this time an increase of $115,OOOyOW* w&sr evident; A considerable part o f this repre sented excess reserves. In June daily average required re serves o f member banks were $108,000,000 less than ac tually were on deposit with this bank. At the weekly reporting member banks in leading cities credit extended declined slightly in the five latest weeks, a falling-off being evident in both loans and investments. Loans on securities continued their downward movement and “ all other” loans were reduced slightly in the period. Member bank holdings of Government securities also were re duced in the five weeks ended July 25, but investments in other securities, after declining in early July, increased in the second and third weeks o f that month. Demand deposits of reporting member banks increased $22,000,000 in the five latest weeks and on July 25 they were approximately 20 per cent higher than at the begin ning of the year. Time deposits recently have shown a moderate increase and in the latter part of July they were up 8.9 per cent from the January level. Savings deposits at selected banks in leading cities of the fourth district increased in June and as o f June 30 were 8.4 per cent higher than a year ago at that time. Debits to individual accounts at banks in 25 cities of the district were up 16 per cent in the fou r weeks ended July 18 from the same period o f last year. The gain for the year to date was 20 per cent. MANUFACTURING, MINING Iron and Steel The sharpest decline in the history of iron and steel production occurred in the opening week o f the third quarter. Operations for the entire industry dropped to below 25 per cent o f capacity in the period from an average of 57 per cent in June and a high level o f approximately 60 per cent in one week o f that month. A falling-off was expected in the industry, for steel users took the full amount specified by their contracts in the latter part of the second quarter in anticipation o f a sharp increase in prices on new third quarter contracts. Some recovery in operations follow ed the holiday period, but the industry in the second and third weeks o f July was turning out steel at only 30 per cent o f capacity. Operating rates in the four latest weeks in the Cleveland-Lorain district de clined from 77 to 41 per cent; at Pittsburgh mill activity was down from 56 to 21, and Youngstown mills curtailed operations from 62 to 30 per cent. In each case lower levels were touched in early July, some recovery having occurred in the two latest weeks. The determining factor for the steel industry will be the rate at which heavy steel stocks, accumulated in June in anticipation o f much higher prices than eventually developed, are consumed. The price increases originally scheduled for third quarter contracts, which led many consumers to increase their inventories, ranged from $3 to $8 a ton, whereas price revisions announced early in July reduced these advances so that new quotations were only $1 to $4 a ton over the levels at which the bulk of the material was billed in May and Tune. These revised prices applied to practically all classifiations of steel ex cept wire, tinplate, reinforcing steel, pipe, and rails and track accessories. Steel*s finished steel price composite was lowered $1.40 to $54.10, although it is still $3 higher than the level at which most o f the second quarter or 3 TH E M O N TH L Y BUSINESS R E V IE W ders were filled. No change has been announced in pig iron prices, with the original $1 a ton advance holding. Demand for scrap steel has fallen and prices have weak ened. The most important factor which caused steel opera tions to advance from the low level o f the holiday week was the unusually strong demand for automobile mate rials. According to reports, motor car manufacturers have been arranging their schedules to produce in July and August practically all present models that will be required over the remainder of the year. This will enable them to obtain an earlier start on retooling for 1935 models. Railroads have nearly completed their steel purchases for the year except that some additional orders for freight cars might be placed at a later date. Building construction requiring steel is seasonally low, but there are a number of government projects requiring considerable amounts o f steel to be awarded. Structural steel contracts awarded so far this year showed a tonnage increase of 17 per cent from the comparable period of 193 3. Some of the smaller consuming industries, notably those manufacturing house hold equipment, are reported to be doing exceptionally well for this season o f the year. Daily average pig iron production in June— 64,563 gross tons— was 2.7 per cent below May, while output for the month— 1,936,897 tons— was down 5.8 per cent. The industry made 9,852,608 tons in the first six months, 121 per cent more than in the first half of last year. June closed with 92 stacks in blast, a net loss of 25 in the latest month. Daily average steel ingot output for June, 103,724 gross tons, was 16.5 per cent less than in May, while total output of 3,015,972 tons was down 10 per cent in the pe riod. Production for the first six months was 16,18 0,889 tons, as shown on the accompanying chart, compared with 8,989,192 tons in the first half of 1933, a gain of 82 per cent. Output in the period was approximately the same as in 1931. Coal Coal production at fourth district mines in June was down slightly from May, but was approximately the same as a year ago at this time. This was in striking contrast with earlier months o f the year, for production in the first half o f 1934, at 74,468,000 tons, was up 28.1 per cent from the comparable period o f 1933. Coal consumers in the first five months of this year augmented their stocks con siderably in anticipation of higher prices or an interrup tion at the source o f supply and industrial stocks of bi tuminous coal on June 1 were 29.6 per cent higher than a year previous. Coal consumption in the latest month was up approximately 20 per cent from last year at that time. In early July output o f coal was slightly under the cor responding weeks of 1933, but it continued well above the level of 1932. Shipments from Lake Erie ports in June, at 5,719,000 tons, were 45.7 per cent above June 1933 and approximately the same percentage increase was shown for the year to date. Recent price changes have been limited to a correlation of differences between dis tricts under the code administration. Automobiles The automobile industry in June more than maintained its seasonal level com pared with May, the adjusted index o f the Federal Reserve Board rising from 78 to 82 per cent of the 1923-1925 monthly average. Factory sales in the month, according to the Department of Commerce, totaled 308,051 units, compared with 249,727 cars and trucks in June 1933, a gain of 23 per cent. Assemblies were down only 7.1 per cent from May to June. The sizable increase from a year ago at this time was significant in that output reached its peak in June 1933, somewhat later than usual. In the first half o f this year 1,714,325 cars and trucks were made, a gain o f 72.6 per cent from the corresponding period of 1933 and the larg est output for any similar period since 1930. Passenger car production in the latest month amounted to 261,852 units, an increase of 26 per cent from last year and in the first six months 1,400,704 passenger cars were turned out, as against 835,433 in the same period of 19 33. It is not unusual for production at this time of year to exceed retail sales and the preliminary estimate of new passenger car registrations in the latest month was 218,000 units, whereas registrations of passenger cars in May numbered 219,163. According to reports the in dustry is turning out more cars than are being absorbed currently in order to build up inventories to carry through until new models are introduced. Present indications are that retooling in preparation for these new models is to be undertaken somewhat earlier than has been the case in recent years. Production fell off very sharply over the holiday period in early July, but much of the loss was recovered in the follow ing week, so that present indica tions point to a July output not very far below that of June. The falling-off in truck production evident in May was continued in June and output for the month, at 46,199 units, was only 9.7 per cent ahead o f 1933. For the first six months of this year, however, more than twice as many trucks were turned out as in the comparable period of 1933. New passenger car registrations in this section held up quite well in June, the gain from last year being 40 per cent. Compared with May there was an increase of 11 per cent, whereas the average change for this period in the past five years was a decline of nine per cent. th o u s a n d s AUTOMOBILE PRODUCTION 0 3VU ■ 3000 FIRST 6 MONTHS H 2500 2000 1500 1000 500 0 m ml 19*1 1925 1930 19341 4 T H E M O N TH L Y BUSINESS R E V IE W Rubber Tires The rubber and tire industry operated at a lower rate in June than in May or in June 1933, judging by the amount of rubber consumed in the United States in these periods. Reports from individual companies substantiated this fact, and indicated that a downward trend continued in the first half of July. Rubber consumption in June amounted to 40,242 tons, a drop o f about 20 per cent from last year, at which time, however, the industry was unusually ac tive prior to the date on which the sales tax became ef fective. In May of this year rubber consumption was 43,012 tons. Domestic factories took less rubber in June than was imported in the month, receipts from producing countries in the period totaling 49,683 tons, a gain o f 3.6 per cent from May and 118.6 per cent from June 1933. As a re sult domestic stocks o f crude rubber were up six per cent from a year ago. In May, the latest month for which complete produc tion figures are available, output for 97 per cent o f the industry, according to the Rubber Manufacturers' Associa tion, was 4,323,000 units, a reduction o f 14 per cent from the corresponding period o f last year. Although a slight decline from April also was evident, shipments exceeded production in the latest month by nearly 800,000 units. Manufacturers’ stocks consequently were reduced, the first downward movement evident this year, but they are unusually large in comparison with current demand from dealers and distributors. Manufacturers reported a greater-than-seasonal falling-off in both sales and ship ments in June, resulting partly from the fact that dealers overstocked earlier this year in anticipation of higher prices and also from fear of possible interruption at the source of supply. Employment at 18 rubber factories in this district de clined slightly from May to June, whereas the five-year average change for the period was an increase of 3.9 per cent. Despite this falling-off the number of employees in the latest month was 25 per cent ahead o f a year ago. The contraction in production recently manifested itself in a reduction in the number of hours worked and was re flected in smaller pay rolls. Clothing Operations in the clothing and textile industry in June and early July so far as this district was concerned were somewhat irregular. Demand for textiles recently has de clined partly because many manufacturers somewhat overstocked with raw materials earlier this year, but sales for the first six months were considerably above the same period of 1933. In the clothing industry employment at 38 reporting concerns declined 2.8 per cent in June in contrast with the five-year average increase o f 1A per cent, but in midJuly orders for fall delivery were reported substantially ahead of last year and large enough to maintain opera tions at current levels for some time. Factories making men’s clothing continue to operate at higher levels than does the industry as a whole. Dollar value of clothing sales at reporting department stores in this district in June were still above a year ago at this time although a much smaller gain was reported than in earlier months o f this year. Other Manufacturing Declines in most of the smaller lines of production were reported in June and early July in this district, but in many cases the falling-off was about equal to the contraction which usually occurs in the summer months. At a surpris ing number of small, general manufacturing companies it was reported that operations continue at capacity levels. Autom obile Parts, Accessories. Although automobile production, and consequently demand for parts and acces sories, declined in June and the first part o f July, opera tions in the industry were being maintained at a some what higher than expected level in view of the high rate o f production in the spring months o f this year. Early July operations at parts and accessory plants were down about 25 per cent from June, but they continued very much above a year ago. June employment at 32 plants reporting to the Ohio State University Bureau of Business Research was off 5.7 per cent from May, compared with the five-year average decline o f 3.5 per cent, but was bet ter than 50 per cent above last year at this time. Brick and Tile. A contrary-to-seasonal increase in em ployment at brick and tile plants in this district was re ported in June, the gain being 5.4 per cent in contrast with the five-year average decline o f 0.4 per cent. The industry, however, is still operating at much below ca pacity levels. China, Pottery. W hile a decline in operations at china and pottery plants is expected at this season o f the year, the falling-off in recent weeks was quite pronounced. Some plants closed entirely in early July, while others were operating at about 50 per cent o f capacity or less. In the first six months employment at ten plants averaged 30 per cent above the corresponding period of 19 33 and most companies reported a sizable increase in sales for that period. Electrical Supplies. This industry continued to oper ate at a high rate in June and early July. There was a seasonal decline in demand for refrigerators, but other lines held up quite well. One company reported unfilled orders nearly double a year ago, with inventories o f raw materials up sharply and o f finished goods slightly. Em ployment in June was up more than seasonally at report ing concerns and for the first six months the increase averaged over 50 per cent. Glass. Production o f window glass continues at very low levels and plate glass output has declined recently along with the falling-off in automobile production. Makers o f molded glassware also reported a slight con traction in June, but to some extent this was seasonal. In the industry as a whole employment was reduced 5.2 per cent in June from May, whereas in the preceding five years a slight increase was reported. Activity continues much above last year in most cases, and some individual plants are operating at capacity levels. Machinery. Machinery and machine tool sales have been in limited volume recently and the industry as a whole is quite depressed. The only bright spot was the announced retooling of the automobile industry, but little is expected in this line before fall. The index o f machine tool orders, 5 T H E M O N T H L Y BUSINESS R E V IE W compiled by the National Machine Tool Builders’ Associa tion, has declined steadily for five months and in June was lower than since November o f last year. Paint. Paint sales and operations declined more than seasonally in June and compared unfavorably with a year ago when the industry was operating at a high rate, the usual spring peak being delayed considerably. Raw mate rial prices have declined and stocks o f lead and zinc are somewhat larger than a year ago. Other raw material stocks are limited; this is particularly true o f glycerin. Paper. Paper and boxboard mills have been operating recently at appoximately a 20 per cent lower level than a month ago and activity was reported to be about the same as last year at this time. The recent decline was largely seasonal, although uncertainties in the general situation have caused buyers to defer placing orders, ac cording to reports. Shoes. Shoe manufacturers in this section report that the volume o f fall orders received compares very favor ably with last year, in fact increases ranging from 25 to 35 per cent were mentioned in some instances. Most plants in mid-July were operating at capacity levels on these orders. Collections are reported satisfactory and al though production at factories in this section was some what under the average fo r the entire country in the first five months o f the year, a gain o f 11.5 per cent was shown and output for the period was greater than in any similar interval since 1929. TRADE Retail There was a falling-off in the dollar volume o f retail trade at reporting de partment stores in this district in June and the decline was considerably more than seasonal. The adjusted index o f daily average sales receded to 73.9 per cent o f the 1923-1925 monthly average, a drop of over four points in the month. Compared with a year ago dollar sales in June showed an increase o f 18.1 per cent, but last year at this time retail trade was expand ing quite rapidly as a result o f “ Buy N ow '’ programs, talk of higher prices, etc. In the first half year dollar sales o f these reporting stores were up nearly 28 per cent, but as pointed out repeatedly, increased prices account for the m ajor part of the greater volume. In this connection, however, retail prices, according to Fairchild’s index, have declined for three consecutive months, the falling-off in June amounting to one-half o f one per cent and the reduction from the high o f March being 1.6 per cent. Compared with a year ago, this index was up nearly 22 per cent and a gain of 27 per cent from the low recorded in April of 1933 was apparent. There was a slight reduction in the ratio o f credit to total sales in June, the contraction being entirely due to a falling-off in the ratio o f installment to total sales. There was a little more activity in the basement depart ments o f reporting stores in relation to total sales than was evident in May. In the individual departments sales of home furnishings continued to lead in the percentage increase from a year ago, although sizable gains in dollar sales o f wearing apparel also were reported. Dollar value of department store stocks declined 5.1 per cent from May to June, a greater-than-seasonal fallingoff. The adjusted index dropped nearly one point to 60.7 per cent of the 1923-1925 monthly average. Compared with a year ago at this time the dollar value o f stocks was up 16.8 per cent. There was a slight reduction in June from May in the ratio of collections during the month to accounts receiv able at the beginning of the period, but collections gen erally are much better than a year ago. Collections on regular accounts in the latest month were 42,2 per cent, whereas last year at this time a collection ratio of 35.7 per cent was reported. Wholesale A contrary-to-seasonal falling-off was reported in three o f the four lines o f wholesale trade for which figures are received regularly and the combined index of dollar sales dropped three points to 64 per cent of the 1923-1925 monthly average. It was still higher in June, however, than in any comparable month since 1931. Wholesale grocery firms were the only ones to report an increase, the gain from May being 2.8 per cent and from June 1933, 9.6 per cent. In the first half year wholesale grocery sales increased 22.5 per cent. Dry goods sales were up 5.3 per cent in June from a year ago, but in the six-months’ period an increase o f 35 per cent was shown. Last year at this time, however, dry goods demand was unusually active. W holesale drug and hardware sales in June were up 15 and 14 per cent, respectively, from last year and gains o f 36 and 43 per cent were shown in the first six months from the similar period o f 1933. COST OF LIVING The index o f the cost o f living in Cleveland, Pittsburgh and Cincinnati, for which figures are compiled semi annually by the Department o f Labor, showed that living costs of wage earners in these three cities in June of this year averaged 1.4 per cent higher than at the end of 1933 and approximately six per cent above June 1933. In the individual cities Pittsburgh showed the greatest gain, both in the past six months and in the entire year, with Cleveland follow ing close behind and Cincinnati showing the smallest increase. The accompanying living in these three with December 1917 latest date this index chart shows the changes in cost of cities from December 1914 to date, representing 100 per cent. On the was 97.4 per cent of the base period, T H E M O N TH L Y 6 about the same as in June 1932. Changes in the past six months in the principal factors entering into cost of liv ing showed rather wide fluctuations. F ood costs were up 4.7 per cent in the period and were 15 per cent higher than a year ago. Clothing was up 2.4 per cent in the six latest months and about ten per cent in the past year. Housefurnishings increased 3.7 per cent from January to June of this year, but were up about 15 per cent in the 12 latest months. Rent, on the other hand, declined 2.6 per cent from December to June, was down six per cent in the year and was lower than since 1917. Fuel and light costs also were reduced slightly in the six latest months, the first downward movement for some time. Whereas changes in individual items entering into a fam ily’s cost o f living show much greater fluctuations than these figures might indicate, particularly the in crease in some food and clothing costs, this index repre sents the average change which has occurred in the period. BUILDING An increase o f nearly 50 per cent in the dollar value of building contracts awarded in the fourth district was apparent in figures of the F. W . Dodge Corporation for June compared with May. As for several months past when favorable figures have been reported the gain was almost entirely in the public works and utilities classifica tions. The latter type accounted for over two thirds of the total volume of awards in this section in June, whereas in May it represented less than 50 per cent of the value o f contracts awarded. Dollar value of contracts awarded, at $11,444,000 in June, showed a gain of 39.4 per cent from last year at this time, but for the first half year total awards were up 154 per cent, due chiefly to activity in the public works’ and utility fields where large expenditures of public moneys have swelled the figures. Residential construction in June in this section was valued at $1,685,000, a reduction of 33 per cent from June a year ago and slightly under May of this year. For the six-month period residential awards were down 1.8 per cent from the first half of 1933. There was an increase in all types of contemplated con struction reported in June compared with May, but the total was less than half as great as a year ago. There has been quite a decline in the amount of contemplated work reported in recent months. Factors in this connection are financing difficulties and the uncertainty in regard to building construction prices, both o f labor and materials. The latter have been reduced recently, but continue some what above a year ago. W age rates in the building in dustry continue at relatively high levels in comparison with other industries. Lumber sales have declined recently and production has shown a falling-off. Cement output in this district in June was up 15 per cent from a year ago and for the first six months a gain of 50 per cent was shown from the same period of 1933. AGRICULTURE Although rather general rains in June helped pastures, hay, and the late-maturing grain crops they were of little BUSINESS R E V IE W benefit to oats in this section and came too late to be of any help to wheat. Agricultural conditions in the fourth district as a whole are very much below recent years, but the July 1 crop report indicates that local farmers are in relatively better position than in many sections o f the country where drought conditions still exist. This is par ticularly true of the western Corn Belt states and the spring wheat sections east of the R ocky Mountains. The follow ing table shows the production of principal crops estimated on the basis o f acreage planted and the July 1 condition for the fourth district and the entire country. Not only is this year’s harvest expected to be very much below last year, but it also is much under the average of preceding periods. ESTIMATED PRODUCTION OF PRINCIPAL CROPS (000 omitted) --------Fourth District-------- ------ -— United States% change % change from Harvest from Harvest 1933 19S4* 1933 1933 1934* 1933 38,866 —14.1 Wheat, bu........ .... 33,398 — 8.4 483,662 527,978 150,851 —10.9 — 9.8 Corn, bu.......... .... 134,442 2,113,137 2,343,883 — 22.4 .... 33,903 35,159 — 3.6 567,839 731,524 3,105 3,929 — 21.0 —21.2 65,983 Hay, tons ....... 52,020 — 21.6 1,039,517 1,385,107 Tobacco, lbs. .... 92,240 117,615 —25.0 15,501 -f- 9.6 Potatoes, bu. .. 16,993 320,358 - f 8.7 348,092 *Based on the July 1 condition According to the Department of Agriculture “ crop yields generally in the entire country are expected to be 13 per cent below the average o f the past 13 years and due to acreage-reduction programs and losses from drought, the total of field crops harvested will be the lowest in 25 years. The wheat, oats, barley, rye and flax crops are ex pected to be the smallest harvested in the country in 30 years and the corn crop is expected to be the smallest in that period, with the exception o f the crop in 19 30. Hay production is expected to be 22 per cent lower than in any previous season during the 15-year period for which comparable estimates are available and pastures are far poorer than at this date (July 1) in any of the last 50 years.” Wheat. The winter wheat harvest in this district was somewhat smaller than usual and although estimated pro duction was 14 per cent under the harvest of last year it was only 9.3 per cent below the ten-year average har vest in this district. Yields, where threshing has been done, are considerably better than were expected a month or six weeks ago, and it now appears that wheat will be the farm ers’ best crop locally. Although some grain has a shriveled appearance, a result of moisture deficiency earlier this year, many yields o f between 30 and '40 bushels per acre have been reported. Corn. The acreage planted to corn in this section is the smallest since 1899 and though the condition o f the crop on July 1 was somewhat better than the average of past years, estimated harvest was 10.9 per cent under that of 1933. Compared with the ten-year average 192419 33, however, a reduction in annual production of 19 per cent was expected this year. The condition of the crop is quite uneven throughout the district. Early planted fields on well-prepared ground have made remark able progress since the June rains, but late-planted corn in many instances was in very poor condition. This was quite severely damaged in sections by insects, some fields being completely destroyed. Oats. Not since 1931 has oat production in this s e c THE M O N TH LY tion been near average and this year’s crop is expected to be the smallest in over forty years, being 3.6 per cent under the harvest o f 1934 and 56 per cent below the tenyear average harvest in this district. Oats are particu larly short in all areas and thin, weedy stands are quite general. Potatoes. The potato crop, both in the fourth district and the entire country, is the only m ajor crop which is expected to show an increase from the harvest o f 1933, but the estimate o f 16,993,000 bushels in this district is still 12.8 per cent below the ten-year average harvest. Late-planted fields have benefited by June rains and the July 1 condition was better than a year ago, but it was under the ten-year average. Hay. This year’s hay crop in the fourth district is ex pected to be 44 per cent below the ten-year average har vest and 21 per cent under the amount cut in 1933. Pas tures are in very poor condition although some im prove ment occurred in early June and July. Fruits. The condition of fruits and other small crops in this district show'ed little change in June and yields of all fruits, except pears, are expected to be considerably below the harvest o f 1933. Tobacco. The July 1 condition o f the tobacco crop in this section was considerably above the low level of last year at this time although it was slightly under the tenyear average July 1 condition. The sharp acreage reduc tion is reflected in the estimated harvest as of July 1 which in this district was 92,240,000 pounds, a drop of 21.6 per cent from 1933 and of 32.6 per cent from the ten-year average harvest. The drop was slightly smaller than that shown for the entire country. Seasonable weather recently has permitted the crop to make excel lent growth. Wholesale and Retail Trade (1934 compared with 1933) Percentage Increase or Decrease SALES SALES STOCKS June First six June '1934 months 1934 DEPARTM ENT STORES (49) Akron........................................................... Cincinnati................................................... Cleveland........................... ......................... Columbus.................................................... Pittsburgh................................................... Toledo.......................................................... Wheeling..................................................... Other Cities............................................... District........................................................ WEARING APPAREL (11) Cincinnati................................................... Other Cities............................................... District......................................................... FURNITURE (42) Cincinnati................................................... Cleveland.................................................... Columbus.................................................... Da vton........................................................ Toledo.......................................................... Other Cities............................................... District........................................................ CHAIN STORES* Drugs— District (4)................................. Groceries— District (5)........................... WHOLESALE GROCE RIES (33) Akron........................................................... Cleveland................................... ................ Pittsburgh.......................................... .. Toledo.................................. .. ................... Other Cities............................................... District........................................................ WHOLESALE DRY GOODS ( 1 0 ).... WHOLESALE DRUGS (13)............ WHOLESALE HARDW ARE (14)..... ♦Per individual unit operated. + 32.3 + 9.8 4-24.3 + 2 1 .0 + 14.0 + 3.4 + 15.6 + 3 4 .3 + 18.1 + 6 4 .7 + 14.9 + 3 4 .1 + 2 4 .2 + 2 1 .4 + 2 2 .5 + 2 9 .0 + 4 0 .2 + 2 7 .7 + 26.0 + 8.6 + 2 8 .2 + 15.5 + 1 5 .4 + 6.7 + 16.0 + 11.8 + 16.8 + 6.1 + 2 0 .3 + 15.2 + 13.8 + 3 2 .1 + 2 5 .4 + 10.6 + 11.5 + 11.2 +3 5 .1 + 3 5 .6 + 2 0 .2 — 4.7 + 9.0 + 4 3 .7 + 2 7 .1 + 4 3 .2 + 6 4 .8 + 2 9 .4 + 14.9 + 5 9 .1 + 8 3 .7 + 3. 5 + 9.0 + 8.3 + 1 7 .9 + 15.2 + 2 2 .4 — 0 .2 + 2 7 .8 + 1 0 .8 + 13.3 + 1 2 .2 + 9.6 + 5.3 + 1 5 .2 + 14.3 + 3 7 .3 + 2 2 .7 +'18.9 + 1 9 .6 + 2 0 .8 + 2 1 .7 + 2 2 .5 + 3 5 .0 + 3 5 .6 + 4 2 .7 + 9.5 + 10.3 7 BUSINESS R E V IE W Fourth District Business Statistics (000 omitted) June, % change Jan.-June, Fourth District Unless Otherwise Specified 1934 from 1933 1934 Bank Debits— 24 cities......... 551,869,000 + 18.1 9,895,000 Savings Deposits— end of month: + 8.4 41 Banks, O. and Pa............ 664,238 (1) Life Insurance Sales: 489,587 Ohio and Pa......................... 83,455 + 1 2 .4 Retail Sales: 91,158 16,066 + 18.1 Dept. Stores— 49 firms 4,344 + 15.2 Wearing Apparel— 11 firms 706 715 + 2 7 .1 4,195 Furniture— 42 firms............. Wholesale Sales: + 1 5 .2 8,256 1,215 Drugs— 13 firms................... 1,056 + 5.3 6,352 Dry Goods— 10 firms.......... 21,923 3,911 + 9 .6 Groceries— 33 firms............. + 1 4 .3 6,939 Hardware— 14 firms............ 1,288 85,388 Building Contracts— T otal.. 11,444 + 3 9 .4 9,501 ” ” — Residential. $ 1,685 — 33.2 3,039 — 16.2 15,088 Commercial Failures— Liabilities.$ 3842 ” ” . . . . Number 742 — 45.2 Production: 1,937 + 5 3 .1 9,853 Pig Iron, U. S....................... . Tons 16,181 3,016 + 17.6 Steel Ingot, U. S................. . Tons + 2 6 .1 1,400,7042 Automobiles— Pass. Car U. S. No. 261,8522 313,6212 46,1992 + 9 .7 Automobiles— Trucks, U. S. . .No. 11,354 74,468 + 0.03 Bituminous Caol................. 972 3,271 Cement, O., W\ Pa., W. Va. . Bbls. + 15.9 5,881* Elec. Power— O., Pa., K y .. k.w.h. 1,188s + 17.5 2,045 3 9,3054 — 72.9 Petroleum— O., Pa., K y ... . Bbls. + 16.6 Pairs (3) (5) (4) (5) 4,3 23 3 — 14.1 21,9844 Bituminous Coal Shipments 5,719 + 4 5 .7 12,319 Lake Erie Ports................... . Tons Iron Ore Receipts: + 2 5 1 .4 4,585 3,117 Lake Erie Ports................... . Tons 4 Jan.-May 1 not available 2 actual number ' confidential 1 May % chang from 19? + 2 0 .3 + 13.9 + 2 7 .7 + 2 5 .4 + 5 3 .5 + 3 5 .6 + 3 5 .0 + 2 2 .5 + 4 2 .7 + 1 5 3 .7 — 1.8 — 55.7 — 64.2 + 122.0 + 8 2 .3 + 6 7 .7 + 1 0 2 .8 + 2 8 .1 + 5 0 .6 + 2 3 .7 + 9.3 + 11.5 + 5 1 .6 + 4 5 .3 + 2 4 1 .4 Debits To Individual Accounts (Thousands of Dollars) 4 weeks ended July 18, 1934 44,157 6,531 25,225 236,408 415,629 114,035 40,444 Erie.................. 17,799 Franklin.......... 2,487 Greensburg 5,887 7,189 Homestead.. . . 1,963 17,819 7,501 2,553 5.931 Middletown.. . Oil City.......... 7,124 573,444 11,456 Springfield. . . . Steubenville. . . 5,790 86,592 6,260 Warren............ Wheeling......... 28,174 36,035 Youngstown. . , Zanesville........ 5,483 Total............ . . 1,711,916 % change from 1933 + 5 4 .8 + 9 .6 + 2 7 .7 + 3.3 + 3 0 .6 + 3 1 .1 + 1.8 + 4 .9 + 1 4 .2 + 72.8 + 19.7 + 1 5 .1 + 3 5 .4 + 4 3 .4 + 2 6 .3 + 2.3 + 2 6 .0 + 8.1 + 14.8 + 2 2 .2 + 17.6 + 3 3 .8 — 2.9 + 4 0 .4 — 1.7 + 16.2 Year to date Year to date Jan. 3, 1934 Jan. 4, 1933 to to July 18, 1934 July 19, 1933 297,349 204,101 37,978 44,295 176,976 113,568 1,640,545 1,466,422 2,616,3 77 2,187,788 573,358 733,057 261,974 246,705 119,210 102,578 16,933 14,034 32,227 25,171 50,561 41,145 11,783 10,422 126,038 98,504 36,930 50,482 16,428 14,258 41,963 36,405 44,973 38,064 3,741,742 3,293,521 78,285 63,796 39,947 28,121 575,615 442,952 41,566 29,200 189,611 168,475 217,863 150,177 36,937 33,357 11,202,737 9,457,030 % changc from 1933 + 4 5 .7 + 1 6 .6 + 5 5 .8 + 11.9 + 19.6 + 2 7 .9 + 6 .2 + 16.2 + 2 0 .7 + 2 8 .0 + 2 2 .9 + 13.1 + 2 8 .0 + 3 6 .7 + 15.2 + 15.3 + 1 8 .2 + 13.6 + 2 2 .7 +42. t + 2 9 .9 + 4 2 .3 + 12.5 + 4 5 .1 + 10.7 + 18.5 Fourth District Business Indexes (1923-1925 = 100) Bank Debits (24 cities).................................. Commercial Failures (Number)................. ” ” (Liabilities)............... Sales— Life Insurance (Ohio & P a.)........... ” — Department Stores (47 firms)........ ” — Wholesale Drugs (12 firms)............. ” — ” Dry Goods (10 firms). . . ” — ” Groceries (33 firms). . . . ” —” Hardware (14 firms). . . . ” — ” All (69 firms)................. ” — Chain Drugs (4 firms)**................... Building Contracts— (T otal)....................... ” ” — (Residential)............. Production— Coal (O., W. Pa., E. K y .). . . — Cement- (O., W. Pa., W. V a.). ” — •Elec. Power (O., Pa., K y.)*. . ” — Petroleum (O., Pa., K y.)*. . . ” — Shoes*................ ....................... *May. **Per individual unit operated. fune, June, June, June. June, 1934 1933 1932 1931 1930 59 69 58 126 94 51 93 203 95 112 69 82 179 249 87 100 89 97 124 146 71 60 59 83 91 81 70 80 89 98 43 30 41 53 65 68 62 64 77 87 66 58 53 66 78 64 58 57 72 83 73 67 71 85 84 24 17 27 53 103 10 15 12 35 64 63 63 40 67 81 81 70 54 125 160 120 1i 1 128 141 145 111 95 112 101 138 70 62 61 105 90 T H E M O N T H L Y BUSINESS R E V IE W 8 Summary of National Business Conditions By the Federal Reserve Board Industrial production, which had increased during each o f the six months from December to May, declined in June by somewhat more than the usual seasonal amount. Factory employment and pay rolls also showed decreases which were partly of a seasonal nature. The general level of wholesale commodity prices advanced during June and showed little change during the first three weeks of July. Production and Employment Index number of industrial production adjusted for seasonal variation, (1923-1925=100). Latest figure, June, preliminary 84. Federal Reserve Board’s index of factory em ployment adjusted for seasonal variation (19231925=100). Latest figure, June 81.4 Volume of industrial output, as measured by the Board’s seasonally ad justed index, decreased from 86 per cent of the 1923-1925 average in May to 84 per cent in June, reflecting chiefly a sharp reduction in activity at cot ton textile mills. Production at lumber mills and at coal mines also showed a decline. In the steel and automobile industries activity decreased in June by an amount somewhat smaller than is usual at this season. Maintenance of activity at steel mills in June reflected in part the accumulation o f stocks by consumers, according to trade reports, and at the beginning of July out put o f steel showed a sharp decline. Employment at factories decreased somewhat between the middle of May and the middle o f June, reflecting reductions in working forces in in dustries producing textile fabrics, wearing apparel, leather products, auto mobiles, and lumber, offset in part by increases in employment at steel mills and at meatpacking establishments. Value o f construction contracts awarded, which had shown little change during May and June, showed an increase in the first half o f July, accord ing to the F. W. Dodge Corporation. Department o f Agriculture estimates, based on July 1 conditions, indi cated a wheat crop of 484,000,000 bushels, compared with an average o f 886,000,000 bushels for the five years 1927-1931, and a corn crop of 2,113,000,000 bushels, compared with the five-year average of 2,516,000,000 bushels. Crops o f other grains, hay and tobacco were also estimated to be considerably smaller than usual. The acreage o f cotton under cultivation was estimated at 28,000,000 acres, about 2,000,000 less than the acreage harvested last season. In the first three weeks o f July drought conditions prevailed over wide areas, particularly in the southwest. Distribution The number of freight cars loaded per working day showed a further slight increase in June follow ed by a decline in the first half o f July. Sales by department stores decreased in June by more than the estimated seasonal amount. Wholesale Commodity Prices 1929 1930 1931 -1932 1933 1934 - Indexes of United States Bureau of Labor Statis tics, by months, 1929-1931, by weeks, 1932 to date, (1926=100). Latest figures for week end ing July 14; farm products 64.5; foods 70.8; other commodities 78.3. W holesale prices of farm products and foods generally advanced dur ing June while other commodities as a group showed a slight decline. Hog prices increased considerably in the middle of the month while wheat de clined throughout the month. In the middle o f July wheat prices advanced rapidly to levels above those reached at the end o f May, and there was a considerable advance in cotton, while lumber prices declined and finished steel prices were reduced somewhat from the advanced quotations previously announced. Bank Credit Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for July 18. Between June 13 and July 18 member bank reserves increased to a new high level o f nearly $4,000,000,000, about $1,850,000,000 in excess o f legal requirements. The growth reflected chiefly a further increase in the mone tary gold stock. A seasonal increase in demand for currency over the July 4th holiday period was follow ed by an approximately equal seasonal return flow during the succeeding two weeks. The volume of reserve bank credit out standing showed little change. At reporting member banks there was a growth of United States Gov ernment deposits during the five-week period, reflecting chiefly the purchase in June o f new issues o f Government securities by the banks. Bankers’ bal ances also increased, but deposits o f individuals, firms and corporations have shown little change. Loans declined somewhat, reflecting a decrease in loans to customers, while loans to brokers showed an increase. Money rates remained practically unchanged at the low levels prevail ing in June.
@FedFRASER