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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. 10 Cleveland, Ohio, June 1, 1928 Business conditions in the Fourth District in May were seasonally quieter than in the two preceding months, but showed no great change after allowing for seasonal factors. The first quarter recovery from the low level of last November and December appears to have been halted, at least for the time being, but not before it had brought general business up to a point which is now about equal to a year ago. As for months past, in dividual lines show rather wide variations. For ex ample, the steel industry enjoyed a record production of ingots in April, motor supply concerns have been doing a very heavy volume of business, and some lesser lines of manufacture, such as glass, have improved, while on the other hand depression continues in the coal trade, the winter wheat crop is extremely poor, and some slowing down has taken place in the shoe and clothing industries. Final figures on net earnings of 206 industrial cor porations in the United States show an increase of 5.8 per cent in the first quarter over the same period last year, and an increase of 6.5 per cent over the first quarter of 1926. As compared with last year, net earn ings increased in the case of 120 concerns, and decreased in the case of 86. The motor group gained 28.9 per cent; stores, 23.5; motor accessories, 21.9; mining, 19.7; chemicals, 9.8; food, 5.5; and miscellaneous, 16.8. Earn ings of equipment companies decreased 47.6 per cent from last year; steel, 19.9; oil, 49.5; and cigar, 18.7 per cent. FINANCIAL REVIEW Stock Prices and Brokers’ Loans. Stock prices on the New York Stock Exchange have moved rapidly upward since 1924. In the summer of that year the Dow-Jones average of twenty industrial stocks stood at 100. An advance began late in the year which has continued, with temporary interruptions, until the present time. By the opening of 1927, the industrial average had passed 150; at the beginning of 1928 it had reached 200; and after declining to 191 on February 20, it moved upward to 221 on May 14, the highest point ever reached. This figure represented an advance of 30 points or 15 per cent in three months. The rise in stock prices has been accompanied by a sharp increase in loans to brokers and dealers in securities in New York. In midsummer of 1924 these loans amounted to something over $1,500,000,000. On January 5, 1927, they stood at $2,819,000,000; by the opening of No. 6 1928 they had risen to $3,810,000,000; and on May 16 they reached $4,502,044,000, an increase of $692,000,000 or 18 per cent since January 4, 1928. Of this gain $677,000,000 has taken place since March 28. The chart below shows the weekly movement for 1927 and 1928 of the Dow-Jones average of 20 industrial stocks (weekly average of closing prices) and of loans to brokers and dealers in securities made by reporting member banks in New York City. The left-hand scale is for the Dow-Jones average, while the right-hand scale shows brokers’ loans in millions of dollars. The break in the curve of stock prices in 1927 is due to a sub stitution. The latest figures are for May 16. Member Bank Credit. Along with the rise in stock prices and brokers’ loans there has been a marked in crease in loans, discounts and investments of reporting member banks in the United States. This is particularly true in the case of loans secured by stocks and bonds (including Government obligations) which advanced from $4,200,000,000 in the summer of 1924 to $5,885,000,000 at the opening of 1927 and to $6,938,000,000 on January 4, 1928. By March 7 of this year these loans were down to $6,421,000,000, but rose to the record figure of $7,021,000,000 on May 16, an increase of $600,000,000 in a little over two months. While loans secured by stocks and bonds have increased nearly 70 per cent since 1924, “all other” loans—includ ing commercial—have only gained about 14 per cent. These amounted to $7,821,000,000 in July of 1924. On January 5, 1927, they stood at $8,700,249,000, and a year later had fallen to $8,692,455,000. The business re covery in the first quarter of 1928 brought a revival of 2 THE MONTHLY BUSINESS REVIEW demand for funds for commercial purposes, and this to gether with the usual Spring demand has resulted in a gain of $224,000,000 since January, the figure being $8,916,000,000 on May 16. Investments increased from $4,906,000,000 in July, 1924, to $5,488,000,000 at the beginning of 1927, $6,426,000,000 a year later, and $6,654,000,000 on May 16, 1928. The chart below shows the weekly movements of loans and investments of all reporting member banks in the United States in 1927 and 1928. Latest figures are for May 16. the proportion of the world’s monetary gold held in the United States rose from 28 per cent in 1915 to almost 50 per cent in 1927. Federal Reserve Bank Credit. Since the beginning of 1928, total bills and securities of all Federal Reserve banks have consistently stood at a distinctly higher point than in any year since 1922, and recently have been noticeably higher than the 1922 level. On May 16, total bills and securities aggregated $1,418,014,000, as com pared with $954,579,000 a year ago, $1,126,264,000 in 1926, $1,013,585,000 in 1925, and $810,257,000 in 1924. The present high level of member bank credit has thus been accompanied in 1928 by a large increase in the de mand for accommodation at the Reserve banks. Marked fluctuations have occurred in the last year in the three separate items making up “ total bills and securities” —discounts, Government securities held, and acceptances held. Holdings of Governments more than doubled in the last part of 1927, rising from $254,000,000 on May 11 to $705,000,000 on November 16, but were sold rapidly after the opening of the year until by May 16, 1928, they had fallen to $262,000,000. This decline was accompanied by a sharp rise in bills discounted, which rose from $385,000,000 on January 25, 1928, to $807,000,000 on May 16, the latter figure being the highest since the last week in 1923, and representing more than a 100 per cent rise in less than four months. Meanwhile acceptance holdings have been at the highest Spring level since 1920, amounting to $347,000,000 on May 16 as compared with $225,000,000 a year ago and $226,000,000 two years ago. The chart at the top of the next column presents the weekly changes in reserve bank credit for 1927 and 1928. Latest figures are for May 16. Gold Movements. As the result of the War, the United States has changed from a debtor to a creditor nation, and its monetary gold holdings have been enormously in creased. In 1914, our gold stock was $1,872,000,000; by the end of the War it had risen to over $3,000,000,000, and in April, 1927, it reached its high point to date of $4,610,000,000 (excluding earmarked gold). Similarly, During most of the 1914-1927 period, monthly gold imports were larger than exports. This situation changed abruptly last Fall, however, and each of the eight months beginning with September, 1927, has shown an excess of exports over imports. Exports were particularly heavy in November, December, March, and April, amount ing to nearly $100,000,000 (including earmarked gold ex ported) in each of the two latter months. As a result the gold stock of the United States fell from $4,588,000,000 on August 31, 1927, to approximately $4,267,000,000 on April 30, 1928, a loss of $321,000,000. Much of "the exported gold has gone to France. The gold reserves of the Federal Reserve System have undergone a corresponding decline. On August 31, 1927 these were just under $3,000,000,000, while on May 16* 1928, they amounted to only $2,641,000,000, a loss of nearly $360,000,000. The chart below gives the changes in the country’s gold stock together with the net gain or loss through imports and exports, by months from 1925 through Anril 1928. n e t ga in o r l o s s t h r u impoi i> -loo L_ .it L .* * ,." 1925 (926 0 — “ ~ 9 2 8 Gold, Deposit^, and Required Reserves. The combination of the recent outflow of gold and the rapid increase of bank credit and bank deposits has brought about noticeable decline in the percentage of gold to deposits of all banks in the United States in the past few months In fact, this percentage has been declining steadily sin 1924. On June 30, 1918, it was 10.66 per cent; by 1920 It had fallen to 7.11, but then rose to 10.35 in 1924. t* October, 1927, it was down to 8.71, the country’s r* M stock amounting to $4,541,000,000, and the net demand and time deposits of all banks in the United States to $5 2 THE MONTHLY BUSINESS REVIEW 117,000,000. By December 31, this ratio had dropped further to 8.28 per cent and on April 30 it was down to approximately 7.97. The percentage of gold to deposits in 1928 has been consistently lower than in any preced ing year except 1920, when it was 7.11 (June 30). Dur ing the other years from 1918 to 1927 inclusive, it ranged on June 30 from 8.89 in 1927 to 10.66 in 1918. In considering the above decline in the percentage of gold to deposits, however, it is necessary to take account of another factor which has been connected with this downtrend—namely, the decline in the percentage of reserves carried by banks against their deposits. This has been brought about by the tremendous rise in time deposits, which have increased almost 400 per cent in ten years (for reporting member banks) as compared with a gain of only 52 per cent in demand deposits. As the reserve required against time deposits of member banks is only 3 per cent, as compared with 7, 10, or 13 per cent in the case of demand deposits, depending on the location of the member bank, it is apparent that the relatively larger increase in the former has meant a lowering of the percentage of reserves required against time and demand deposits combined. Figures on reserves of all banks in the country are not available, but the reserves carried by all member banks against their deposits give a very good indication of the situation, since the resources of these banks com prise about 62 per cent of those of all banks. In June, 1918, member bank reserves amounted to 10 per cent of their deposits. The percentage dropped sharply to 7.86 in 1921, and since then has declined gradually, being 7.83 in June, 1924, 7.50 in June, 1927, and 7.45 in April, 1928. A glance at the chart below will show that during the entire 1918-1928 period, the decline in the percentage of reserves against deposits has been about the same as that of gold to deposits, so that the fall of the latter is apparently related to that of the former when considering the ten-year period as a whole. On the other hand, it is noticeable that since 1924 the percent age of gold to deposits has fallen at a much faster rate than that of reserves to deposits, and this is especially true in the past six months when the percentage of gold to deposits has dropped from 8.71 to 7.97, or a decrease of 8.5 per cent, while that of reserves to deposits has shown but little change. 3 all member banks. The curves are shown as of June 30 each year from 1918 to 1927 inclusive. The percentage of reserves to deposits is shown monthly from June, 1927 through April, 1928, while that of gold to deposits is shown for call dates except in 1928, when the figures have been extended on the basis of percentage changes in re porting member bank deposits during that period. Interest Rates. The advance in stock prices and loans to brokers, the recent rapid increase in member bank col lateral loans, the Spring rise in the demand for com mercial credit, the sales of securities in the open market by the Federal Reserve System, and the large outflow of gold have all been important factors in the very definite upturn in money rates in New York since early in 1928. From August, 1927, to February, 1928, call money ranged largely from SV2 to 4 per cent except during the period of year-end requirements. The real rise in call money began about February 1. During February and March the rate varied from 414 to 4% per cent; on March 28 it advanced to 4% ; on April 2 it reached 5; and on April 11 it touched 6, but fell back to 5 per cent for most of the remainder of the month. The prevailing rate throughout the first part of May was 5*6 per cent, al though a 6 per cent renewal rate was in effect on several days. The average daily rate rose from 4.38 in February to 5.07 in April, and 5.59 for the first 22 days in May. Time money on the stock exchange was 4Ya-4% per cent in December. In mid-January it advanced to 4^4-4%; a month later it moved up to 4%-4y2; and late in Feb ruary it was 4YZ~4%. On April 1 it stood at 4%, but soon advanced to 4% -5. Early in May it was quoted at 5 per cent for all maturities, but by the 16th had again advanced to 5-5^ per cent, and by the 21st was quoted at 5%-5y2. Similar uptrends have been apparent in commercial paper rates, which have risen from 4 per cent in Janu ary to 4*6-4% on May 23, and in bankers’ acceptances, up from 3% in January to 4-4 ^ on May 23. In addition all the Reserve banks raised their rediscount rates from ZV2 to 4 per cent early in 1928 and several have since advanced them to 4% per cent. The chart below shows the weekly average rates in New York on call money (renewal rate), commercial paper (4 to 6 months), and acceptances (90 days). Latest figures are for the week ending May 23. The chart below shows (1) the percentage of monetary gold in the United States to demand and time deposits of all banks in the country, and (2) the percentage of reserves against demand and time deposits carried by Prices and Buying Policy Following the sale price level ter of 1928, a vance took place in April, when stability in the wboleduring the first quar fairly considerable ad the Bureau of Labor’s 4 THE MONTHLY BUSINESS REVIEW index for all commodities rose from 96.0 to 97.4. In vestigation shows, however, that the rise was not gen eral, as 293 commodities registered no change in prices and 116 actually declined while 143 were advancing. The largest individual price increases took place in farm products and livestock. A marked rise from 114 to 122 occurred in grains, where the short winter wheat crop was a factor. Hides and skins were also much higher. Among the non-agricultural commodities, petroleum prod ucts and certain building materials showed sizable ad vances; but most manufactured products rose but little. As far as the Fourth District is concerned, it is safe to say that there is no evidence whatever of any change from the hand-to-mouth buying policy, regardless of price advances on some goods. In the middle of April this bank requested information on that point from about 50 large and representative manufacturers in the District, and the 40 replies received are unanimous in stating that their customers are still confining their purchases as much as possible to immediate needs, and that there is no present indication of a resumption of the old method of forward buying. The tendency if anything is in the other direction. Savings Deposits, For the first time since last July, Debits, Failures savings deposits of 68 banks in Ohio and Western Pennsylvania declined in the past month as compared with the month before. On April 30 the total was $997,640,767, a loss of 1.9 per cent from March but a gain of 5.9 per cent over a year ago. Debits to individual account at 13 large centers in this District were $2,741,802,000 in April, as compared with $2,649,641,000 in March and $2,897,949,000 a year ago. Commercial failures in the Fourth District as reported by R. G. Dun and Company numbered 125 in April, 183 in March, and 151 a year ago. Liabilities were $7,055,083 in April, $8,433,754 in March, and $6,025,924 in April, 1927. In the United States there were 1818 fail ures in April, 2236 in March, and 1968 a year ago. The following table gives the changes in the main items of the balance sheets of the Federal Reserve and reporting member banks: Federal Reserve Bank o f Cleveland Federal Reserve System (In M illion s) (In M illions) May 16, M ay 18, A p r. 18, May 16, M ay 18, A pr. 18, 1928 1927 1928 1928 1927 1928 Gold reserves .................... Discounts .......................... A cceptances ...................... U. S. Securities .............. Total bills and securities Federal Reserve notes in circulation .................... T otal deposits .................. 260 59 34 37 130 303 50 19 34 104 264 57 30 43 130 2,640 807 347 262 1,418 3,057 458 225 269 955 2,719 620 351 341 1,312 192 190 210 193 192 195 1,583 2,434 1,711 2,353 1,582 2,423 R E PO R TIN G M EM BER B A N K S Fourth D istrict U nited States (In M illion s) (In M illions) May 16, May 18, A pr. 18, May 16, M ay 18, A pr. 18, 1928 1927 1928 1928 1927 1928 Loans secured by stocks and bonds .................... A ll other ........................... Total loans ...................... Investm ents ...................... Dem and deposits ............ Tim e deposits .................. 676 781 1,456 747 1,080 965 643 791 1,433 657 1,051 911 675 779 1,455 731 1,058 958 7,021 8,916 15,937 6,654 13,875 6,972 5,799 8,661 14,460 6,032 13,217 6,166 6,837 8,926 15,763 6,618 13,890 6,841 MANUFACTURING, MINING Iron and Steel After coming within one per cent o f setting a new monthly production re c ord in March, steel ingot output a t tained a new high in April. A bulge in the early d ays of the month made this record possible. As A p ril wore on it was increasingly evident that consumers w ere more occupied with working off their receipts than in making fresh commitments, but the unprecedented gait early in the month more than neutralized the re laxation in the latter part, with the result that the April daily average output of ingots soared to 172,103 gross tons, compared with 166,945 tons in March and the previous record of 167,973 tons in March, 1927. Production in the first four months also set a new record for that period at 16,846,729 tons. One indication of the let-down which usually ch ar acterizes the second quarter is the fall in unfilled ton nage of the United States Steel Corporation. On A pril 30 its orders totaled 3,872,133 tons, a decline of 463,073 tons from March 31. In spite of this sharp slump, order books on April 30 were heavier by 316,000 tons than on April 30, 1927. In April, as in preceding months of this year, auto motive demand was the chief prop of the finished steel markets. If anything, tonnage moving to automotive consumers was greater than in March, especially o f sheets and bars, and well into May there was no in dication of a noticeably easier situation. Demand has been shifting as Ford operations increase, but the a g gregate has not been disturbed. Through their heavy specifications for track material the railroads have also been a major factor, but the condition of the car-building industry may be gauged from the total of 22,343 freigh t cars ordered in the first four months of 1928, against 29 300 in the like period of 1927 and 35,236 in 1926. Build ing steel requirements have about paralleled 1927, but the oil country has been backward in placing both p ip e and tanks. Pittsburgh district mills have benefited from the heavy volume of automotive business, but plate and pipe mills have felt the scarcity of oil country business. Much the same situation has prevailed in the Mahoning Valley Bar mills at Cleveland have been operating at capacity Tin plate mills in the Pittsburgh and Youngstown d is tricts have been operating 90 per cent or higher. in April, Pittsburgh district makers of finished steel av eraged close to 85 per cent. With the pressure for steel relieved in mid-April prices also relaxed. Heavy steel held at $1.85 per Iqq pounds (Pittsburgh) but concessions became more gen eral in such light products as sheets and strip. plate developed some weakness, as did basic iron. W ire products came into a spotty market. Foundry iron de clined both at Pittsburgh and at the Lake furnaces early in May. Because of the increasing use of scrap, resulting from its relative cheapness, the April gain in pig iron prQ duction was not commensurate with that of steel. April daily rate of pig iron output was 105,979 tons6 compared with 103,199 tons in March, and 114,146 tons last April. In four months the pig iron total was 12 132,743 tons, as compared with 12,948,434 tons in 1$%^ THE MONTHLY BUSINESS REVIEW 5 ing so far, owing to the hesitant buying attitude of re tail houses. This in turn was caused by poor retail clothing sales in April. Business in knitted wear has slowed down somewhat. Manufacturers of women's ready-to-wear report busi ness as fair. Advance orders for men's clothing are slow. Coal The soft coal markets have remained Conditions in the men's underwear trade are unsatis sluggish in spite of the drop in pro factory; customers appear unwilling to make future com duction in April, which appeared to be mitments to any extent, and Fall orders are less than greater than seasonal, and in spite of the slow but per usual. In woolens and worsteds, business is not quite up to a year ago. sistent decline in industrial stock piles. Consumers have shown the same indifference as in previous months, with Textile and raw material prices have strengthened ma the result that the Coal Age average price fell from terially in recent months, being higher than a year ago $1.92 per ton in March to $1.76 in April, the latter in most cases. Wool (Fairchild average) stood at $1.09 quotation being 17 cents below last year and 16 cents a pound in April as against $.93 a year ago; cotton below two years ago. goods (Fairchild) 13.0 cents a yard as against 11.8 The latest report of the Bureau of Mines on stocks shows cents a year ago; raw cotton, 20.6 cents a pound as that soft coal in consumers' hands on April 1 amounted against 14.8 last year; and worsted yarn (Fairchild) $1.76 a pound as compared with $1.67. Silk, however, to 48,300,000 tons. This compares with 75,000,000 tons on April 1, 1927, just before the bituminous coal strike. has fallen from $6.07 a pound in April, 1927, to $5.37 Since the earlier date, stocks have been falling almost the past month. Woolen yard goods have risen from 5 to 10 per cent lately, and similar advances are noted without interruption until they are now but little higher in broadcloth, suede, and fancy fabrics. Manufacturers than the average 1925-1926 level. are unanimous in declaring that the full advance in raw Soft coal output declined sharply early in April, partly materials has not yet been reflected in finished products. due to seasonal factors. Daily average output for the week ending May 5 was 1,364,000 tons, the same as a In some instances finished products have absorbed part of the uptrend, while in others they have shown prac year ago. tically no increase. Sales of reporting wholesale dry goods houses in the Rubber and Crude rubber prices have finally Tires steadied at about 17 cents a pound. Fourth District were 4 per cent less in April than a Final figures on tire dealers' stocks year ago. Retail clothing sales were very much less, due in the country as of April 1 show that stocks of cas in large part to cool weather, fewer selling days, and a ings were about 14 per cent larger than a year ago, and smaller share of the Easter trade than a year ago. of inner tubes 2 per cent larger. The low price of crude rubber is a less disturbing factor to Akron manufac Shoes May was an “ in-between” period for turers than a month ago, inasmuch as Akron tire prices Cincinnati shoe manufacturers, who have not yet been reduced and meanwhile the crude were sending their salesmen out to rubber purchased at higher prices is being worked into ward the end of the month with new samples. Business production. has slackened after the high degree of activity in the first quarter. Preliminary Fourth District production figures Automobiles Automobile production in the United for April indicate a drop of 35 per cent from last year. States totaled 409,948 cars and trucks The trend of raw material prices has been distinctly up in April as compared with 404,759 ward. Hides in April were about 10 per cent higher than last year. For the first four months of 1928, output in March, and sole leather stood at about 69 cents a was 1,378,829 as compared with 1,342,892 in 1927. pound as compared with 66 cents at the opening of the Registration of new passenger car bills of sale in 59 year. Ohio counties according to the Bureau of Business Re Wholesale shoe sales in the Fourth District in April search at Ohio State University, amounted to 21,471 in were approximately 25 per cent less than a year ago, and April, a loss of 2 per cent from last year but an in retail sales were off nearly as much. This, however, was crease of 55 per cent over March. Truck registration in partly due to weather conditions and to the fewer num April was 1673, an increase of 5 per cent over last year ber of selling-days this April. and of 52 per cent over March. Truck manufacturers and parts makers in the Fourth Other Business in May was about the same District report an improvement in business during the Manufacturing as in April for a number of manu past month. Several parts manufacturers are operat facturing lines in this District. There ing at full capacity and have sufficient orders to in is very little evidence of an uptrend such as took place in the sure heavy production for some time. first quarter, but most lines appear to be maintaining the level of operations attained in the two preceding Clothing Spring activity in various clothing lines months. is about over, and manufacturers are Boxboard. Business has slowed down and is unusually making preparations for the Fall trade. quiet for this time of year. Prices of finished products Fall orders in some lines have been rather disappoint are lower than in fifteen years due to price cutting, while On the last day of April 194 stacks were making iron, or two less than at the close of March. The Iron Trade Review composite of fourteen lead ing iron and steel products averaged $35.67 for April, against $35.81 in March and $36.73 in April a year ago. 6 THE MONTHLY BUSINESS REVIEW quotations on raw materials have not declined to the same extent. Cork. Active competition from Spain is still hamper ing this line. Raw material prices are advancing, but those of finished products have fluctuated very little. Electrical Supplies. Business is practically unchanged from last month. The leading concerns are doing well. Glass. A turn for the better is seen in the 10 per cent increase in prices made by a large window glass manu facturer. Demand is good and consumption at present is taking care of production. Oil Supplies. Demand for drilling and operating sup plies continues light in 1928 after the poor oil year in 1927. Demand for pipe is also light. Faint. The situation has changed but little since last month, except that warmer weather has stimulated out door work and has thus brought some seasonal increase in sales. Business in the first quarter compared favor ably with last year. Certain raw material prices have stiffened slightly, particularly linseed oil. Pig lead is also up $2 per ton from a month ago. Prices of finished products, however, are virtually unchanged. Railroad Equipment. Lack of buying by railroads has again made itself felt, after a brief spurt in demand earlier in the year. Stoves. Orders have increased seasonally, and are now decidedly larger than in the first part of the year. AGRICULTURE The winter wheat crop in Ohio is now believed to be the worst in 60 years with one exception. The Govern ment report for May 1 showed an indicated crop of only 8,870,000 bushels, as against 28,980,000 bushels last year and a 10-year average of 36,660,000. Abandonment this year reached 66 per cent, as compared with a 10-year average of 8.9 per cent. Weather conditions were excep tionally unfavorable throughout the growing season. In Kentucky, the crop is only about 30 per cent of that of 1927 and in West Virginia it is the lowest on record. Cool weather has hampered the new burley tobacco crop in Kentucky, and plants are growing very slowly. The rye crop in Ohio is estimated at 410,000 bushels, as compared with 560,000 in 1927 and a 10-year average of 1,160,000. The Kentucky crop is also poor, condition on May 1 being only 62 per cent of normal as against the 10-year average of 90 per cent. Conditions were better in Pennsylvania, where rye was 78 per cent of normal on May 1. Hay has also suffered much damage. In Ohio, the condition of the crop on May 1 was 65, as compared with 86 a year ago. In West Virginia the figures were 78 and 88 per cent respectively. Stocks of hay on farms in these two states and in Pennsylvania were unusually large on May 1, but in Kentucky they were less than a year ago. BUILDING Building contracts awarded in the Fourth District amounted to $70,184,000 in April, a figure exceeded only twice by the same month in preceding years. Last year's total was $77,350,000. For the first four months of 1928 contracts awarded were $201,249,000, as compared with $229,533,000 a year ago. Residential contracts on ly aggregated $24,381,000 for April and $73,780,000 fo r the first four months, as against $30,715,000 and $83,951,000 respectively in 1927. The valuation of April building permits in 27 cities in this District was $28,094,810, a gain of 13.3 per cent over a year ago. The total for the first four months was 6.2 per cent ahead of last year. For the month, Pitts burgh showed the largest gain— 153 per cent. The lumber trade continues rather slow, considering the season of the year. Consumers are still adhering rigidly to the hand-to-mouth buying policy. Building Operations April, 1928 1,832,611 55,583 120,587 473,935 3,621,895 4,826,725 A kron ................. A shtubuU ......... Barberton.......... Canton. ............ Cincinnati......... Cleve. suburbs: Cleve. Height*. East Cleveland Euclid.............. Garfield Hghts Lakew ood. . . . 389,270 155,470 356,845 205,000 568,850 213,450 R ocky R iver.. 121,600 Shaker Hghts.. 959,090 1,755,200 Columbus.......... 209,100 Covington, K y . 1,596,268 D a y ton .............. 551,565 Erie, P a ............. 151,385 230,500 Lexington, K y.. 40,574 L im a................... 79,440 Pittsburgh, P a.. 6,206,833 154,257 Springfield......... T o le d o ................ 1,971,3 33 Wheeling, W . Va.. 205,069 Y ou ngstow n.... 1,042,375 28,094,810 (Valuation oif % change from 1927 — 14.9 + 2 0 .5 — 4 4.6 + 12.4 + 1 0 .9 + 3.7 Permits) J am r 5,629,878 121,173 274,425 1,568,299 9,603,750 14,986,750 J“ « r 7,480,723 181,940 349,561 1,187,434 8,339,205 11,919,225 — 15.7 + 8 7 .3 + 7 5 .3 — 8.7 + 6 8 .0 — 28.9 + 6 1 .9 — 21.6 — 26.1 + 17.7 + 3 1 .6 — 25.3 — 29.8 + 9 2 .3 — 68.0 + 127.5 +153.1 — 44.0 + 4 2 .8 — 21.8 — 40.5 1,773,280 459,373 905,041 751,550 1,508,212 854,210 402,328 2,775,415 5,819,200 533,450 3,455,433 1,106,965 479,210 541,925 164,674 172,665 15,070,692 349,552 7,252,971 602,799 2,605,465 1,475,712 385,858 526,303 646,000 593,135 860,612 467,130 2,810,200 9,536,100 494,400 3,399,525 1,931,098 748,172 588,281 220,171 150,838 10,967,516 598,329 4,787,956 901,584 3,455,265 + 1 3 .3 79,678,685 75,002,273 + 6.2 TRADE Retail Trade Department store sales in the Fourth District were 12.1 per cent less in April than in the same month last year. Similar declines were experienced all over the country and were not as serious as might be supposed inasmuch as there was one less Saturday and one more Sunday in April of this year than last. In addition more of the Easter trade went to March this year than in 1927. For the first four months, department store sales were 2.3 per cent less than a year ago, the only cities showing increases being Akron, Cleveland, Columbus, and Toledo Sales of 17 wearing apparel firms in April declined 9.5 per cent from a year ago, and there was a loss o i 4.7 per cent for the first four months. Wholesale Trade Sales of 46 wholesale grocery firms in the Fourth District in April decreased 1.5 per cent from last year, but showed a gain of 2.4 per cent for the first four months. D*y goods sales were 4 per cent lower for the month but \ per cent higher for the four months. Hardware showed a loss of 13.3 per cent for April and of 10.5 per cent for the first four months. Drug sales were 0.2 per cent higher than in April of 1927, but were 1.1 per cent less for the four months. THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics (All figures are for Fourth District unless otherwise specified) April 1928 Bank Debits (24 cities) Millions of dollars Savings Deposits (end of month) Ohio (41 hanks) Thous. of dollars Western Pennsylvania (27 banks) Total (68 banks) Actual Number Commercial Failures — Number Thous. of dollars ** *4 — Liabilities Postal Recipts — 9 cities Sales — Life Insurance— Ohio and Pa. “ — Dept. Stores — (61 firms) “ — Wearing Apparel (17 firms) " — Furniture (49 firms) 44 — Wholesale Grocery (46 firms) 44 — ** Dry Goods (13 firms) ** — '* Hardware (16 firms) ^ ** ..— ** Drugs (14 firms) Building Permits, Valuation— 27 cities Building Contracts — Total, 4th District ** ** — Residential, 4th District Production — Pig Iron, U. S. Thous. of tons " — Steel Ingots, U. S. “ — Automobiles, U. S. Actual Number Passenger Cars Trucks 44 — Bituminous Coal, 4th Dist. Thous. o f tons 44 — Cement: Ohio, W. Va., Wn. Pa. •* barrels 44 — Electric Power: Ohio, Pa., Ky. Millions of k.w. hr*. 44 — Petroleum: Ohio, Pa., Ky. Thou3. of barrels “ — Shoes, 4th District “ pairs 44. — Tires, U. S. '* casings Bituminous Coal Shipments (from Lake Erie ports) Iron Ore Receipts (at Lake Erie ports) 1 4 month's average. sMarch. *January-March. *Figures Confidential. •Preliminary. 3.365 DEPARTMENT STORKS-61) Apr ' Akron...; .................................. Cincinnati................................... Cleveland.................................... Columbus................................... Dayton...................................... Pittsburgh................................... Toledo......................................... Wheeling..................................... Youngttown................................ Other Cities................................ District....................................... WEARING APPAREL 07) Cincinnati................................... Cleveland................................... Other Cities............................... District.................................... FURNITURE (4?) Cincinnati................................... Cleveland.................................... Columbus............................ — 8.8 — 12.0 - 8.1 - s s —12 4 — 15.* — 9.6 -1 7 4 — 14.6 —1 — 12 1 Toledo..................................... Other Cities............................... District....................................... CHAIN STORE* Drugs— District (3)................... Groceries— District <5)............. WHOLESALE GROCERIPS <4*\ A k r o n ..;.................................. Cincinnati................................... Cleveland.................................... Erie........................ Diyton....................................... + 9.1 — 0.2 + 0.1 4 -0 4 — I S - o .4 7 -0 4 - 8 2 - 3.1 — ft > __ 2 3 — 37 — 1 06 — 11.1 — q ; — 07 — 6.7 - 6 1 - 4 7 — 12 6 __ $ o ... 10 0 — 2.9 + 0.4 __ 6 9 — ? 7 — 30 7 — 13.6 4*12 5 — 20 0 — 1.7 _ 7 .* 4 -3 .8 — 8.0 + S.4 +10 1 - 6 7 _ 3 4 ...u c + 12.9 + 7 .4 + 0 9 t o _ , 7; 5 Other Gties.............. — “ >0 District.................... __ 7 r WHOLESALE DRY GOODS (13) - 4.0 w Snt H a H r 2 * + 02 W H f t f l l a f l S^JfrRWARK fl6> — 13 3 WHOLESALE SHOES (6) ___ —22 3 * Sales per individual unit operated. * r’° ’ Decrease STOCKS Apr.Apr.- +15.6 + 2.1 + 2.0 + 5.5 + 1.4 — 10.0 + 0.1 — 10.9 — 1.7 — 3.6 — 1.8 +2 2 . 2 + 2.3 — 0.9 + 4.0 ±*1 >1 + t 1.0 — 11 — 10.5 — 15.1 364,877 45,071 13,403 1,321 1.136* 2,072* 357.009 47,738 14,281 1,409 1,182* 2,076s « 4,762* 3,374 Jan.-Apr. 1928 — 3.9 + 4.7 + 9.2 + 5.9 — 17.2 +17.1 — 4.4 — 1.3 — 12.1 — 9 .5 — 13.6 — 1.5 — 4.0 — 13.3 + 0.2 +13.3 — 9.3 — 20.6 — 7.0 + 4.3 2,102 2.120 1.833 24,794 77,350 30,715 3,422 4,127 + 2.2 — 5.6 — 6.1 — 6.2 — 3.9 — 0.2 — 34.8* + 83 — 75.4 Jan.-Apr. 1927 12,947 % change 13.013 — 0.5 16,847 681,705* 253,461* 935,166* 726 17,294 12,674 409.379 93,744 7,524 4,075 24,998 8.480 8,032 7.359 75.002 229.533 83,951 12,943 16.265 + 7.1 + 8.8 + 7.6 + 5.1 + 5 1 .6 — 0.3 + 1.5 — 2.3 — 4 .7 — 2.4 + 2.4 + 1.0 — 10.5 — 1.1 + 6.2 — 12.3 — 12.1 — 6.3 + 3.6 1,233,425 145,404 58,915 3,905 3,459s 5.827s « 14,124* 914 1,166.741 176,138 77,817 4,066 3,402* 5,715* « 12,494* 3,908 730,357* 275.728* 1,006,0851 763 26.212 12,636 415,629 91,565 7,169 3,975 25,602 8,565 7,190 7,278 79.679 201,249 73,780 12,122 + 5.7 — 17.4 — 24.3 — 4 .0 + 1.7 + 2.0 — 3.5* + 1 3 .0 — 76.6 Index Numbers of Trade in theFourth Federal Reserve District _ 22 I 687,590 254,597 942.187 151 6,026 3,233 107,981 28,494 2,307 1,290 6,389 4 % change 3,501 719,633 278.008 997,641 125 7,055 3,091 106,585 25,036 2,087 1,114 6.294 2,018 1,839 1,836 28,095 70,184 24,381 3.181 4.304 5,157s 829 Retail and Wholesale Trade (1928 compared with 1927) Percentage Increase or SALES SAI.KS Apr.First April 1927 + 5.7 + 6.1 —II.9 April, April, 1924 1925 125 122 Department Stores (50)*............... 103 103 Wholesale Drugs (14)**................. Wholesale Dry Goods (13)**........ 94 88 Wholesale Groceries (46)**........... 95 90 Wholesale Hardware (16)**.......... 104 100 Wholesale All (93)***.................... 98 93 Chain Drugs (3)*t.......................... 100 99 ♦Base » Average monthly sales. 1919-1923. **Base « Average monthly sales. 1923-1925. Itncludcs 4 shoe firms. fPer individual unit operated. April, 1926 114 115 80 90 96 93 103 April, 1927 126 108 78 87 99 90 98 April. 1928 111 108 75 85 86 86 91 Debits toIndividual Accounts (In thousands 4 weeks ending May 16, 1928 Akron................ 104,834 Butler, Pa......... 11,283 Canton.............. 45,990 Cincinnati........ 401,140 Cleveland......... 716,448 Columbus.......... 159,979 Connellsvtlle, Pa. 3,986 Dayton............. 83,134 Erie, Pa............. 33,234 Grecnsburg, Pa. 18,203 Homestead. Pa. 4,662 Lexington. Kv.. 21,807 Lima................. 14,276 Lorain............... 5.248 Middletown.... 11,005 Oil City, P a .... 18,707 Pittsburgh, Pa.. 911,724 Springfield........ 19,922 Steuwnville.... 10,777 Toledo............... 265,900 Warren.............. 12,132 Wheeling, W. Va. 47,445 Youngstown... 68,572 Zanesville......... 12,056 Total.............. 3,002,464 of dollars) % change from 1927 + 5.7 — 2.4 + 0.9 + 1.7 — 1.8 + 2.2 — 18.2 — 7.9 — 11.3 — 16.5 + 7.5 + 20 .0 — 1.0 — 9.2 + 1.6 + 4 9 .0 — 1.4 — 8.0 + 5.5 +17.2 — 7.2 + 3.7 +4.3 — 4.7 1928 to date (Dec. 28 — May 16) 519,658 52,001 244,362 2,248,362 4,046,032 838,981 19,747 470,891 166,407 99.094 20,500 134,301 76,150 27,991 62,749 78,539 4.729,807 108,402 54,181 1.329,863 65,901 236,338 341,934 61,706 1927 to date (Dec. 29 — May 18) 457.860 57,166 237,917 1,984,581 3,953.807 828,529 25,832 467,742 175,310 108,971 20,993 131,907 74,363 28,226 53.452 75,067 5.171.603 117,700 53,788 1.142,955 68,406 229,010 354,235 62,457 % change from 1927 +13.5 — 9.0 + 2.7 +13.3 + 2.3 + 1.3 — 23.6 + 0.7 - 5.1 — 9.1 — 2.3 + 1.8 + 2.4 — 0.8 + 17 .4 + 4.6 — 8.5 — 7.9 + 0.7 +16.4 — 3.7 + 3.2 — 3.5 — 1.2 + 0 .8 16,033.897 15,881.877 + 1.0 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions (By the Federal Reserve Board) Volume of industrial production continued large during April, reflecting chiefly increased output in metal industries, while activity in industries producing food and clothing decreased. Wholesale and retail trade also declined. The general level o f wholesale commodity prices increased in A p r il reflecting advances in farm products. There were large exports of go ld in April and May. Member bank loans and their borrowings at the reserve banks continued to increase, and money rates showed further advances. Production Index number of production of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 = 100). Latest figure— April, 109. Production of manufactures remained in about the same volume in April as in March, while output of minerals declined slightly, owing chiefly to a decrease in production of bituminous coal. Daily average output o f iron and steel, copper, and zinc, increased in April, but since the first o f M a y there has been some curtailment in steel mill activity. Automobile produc tion was maintained in large volume during April and according to p r e liminary reports also during the first half of May. Textile mill activity, output of boots and shoes, and meat production showed substantial declines during April. Volume of factory employment declined slightly, reflecting chiefly decreases in the food, leather and textile industries. Building co n tracts awarded in April exceeded those for any previous month, and awards during the first three weeks of May continued in unusually large volume. Trade Index o f U. S. Bureau o f Labor Statistics (1926 = 100). Latest figure— April, 97.4. r~ " 1 H E S E F IV E BANK - 4C R E D IT Total Rnervt Bank C/fdit . ^ /JO iJ Discounts for U.SSte unties Mtmtor fttnfcs W A / Acccptawrt t926 / ' ■ "s/ 1927 Monthly averages o f daily figures for 12 Fed eral Reserve banks. Latest figures are aver ages of first 23 days in May. Sales by department stores and by wholesale firms in most lines o f trade declined in April, and were in smaller volume than a year ago. A verage daily sales of department stores, after allowance is made for the earlier date of Easter and the usual seasonal changes, were smaller in April than in March and were also smaller than in April a year ago. This decrease was due largely to unfavorable weather conditions. Stocks of department stores, after adjustment for seasonal changes, were in about the sam e volume as in March, and slightly smaller than a year ago. Freight ca r loadings showed an increase between the beginning of April and the middle of May, but for most classes of commodities continued smaller than a year ago. Prices The general level of wholesale commodity prices as indicated by the index of the Bureau of Labor Statistics, increased from 96 per cent o f the 1926 average in March to 97.4 per cent in April. This increase reflected sharp advances in the prices of grains, cotton, livestock, and hide and leather products. Rubber prices continued to decline, and most o f the other groups of commodities showed little change. During the first three weeks of May there were decreases in the prices of grain, flour, sheep and hogs, and increases in copper, zinc and rubber. Bank Credit Weekly rates in New York money market: commercial paper rat© on 4-to-6 months paper and acceptance rate on 90-day paper. At member banks, loans largely for commercial and industrial purposes following a rapid increase during February and March, have shown little' change since the early part of April. Loans on securities continued to increase and total loans and investments of reporting member banks in the middle of May were larger than at any previous time. The outward movement of gold continued in May, the decline in monetary gold stock during the four weeks ending May 23 being nearly $90,000,000. This loss of gold, together with further sales of United States securities by the Reserve banks, was reflected in an increase of nearly $140,000,000 in member bank borrowing at the Reserve banks. There were further a d v a n c e s in open market money rates during 3VXay and discount rates at the F ed era l Reserve banks of New York, Philadelphia* Cleveland, Atlanta, and Dallas were raised from 4 to 4% per cent.
@FedFRASER