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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. 12 No. 6 Cleveland, Ohio, June 1, 1930 Few changes other than seasonal occurred in Fourth District business or credit conditions in April or early May. Money rates are low, but banks report little commercial demand and industry and trade generally might be termed “ quiet.” The chart below presents graphically some of the more important indicators of business in this District in April and the first four months of 1930, compared with the same period of 1929. Excluding the number of com mercial failures (which showed a decrease of six per cent so far this year from 1929), declines of varying amounts are shown. With the exception of department store sales (abnormal in April because of Easter), the declines of the month very closely approximate those of the January-to-April period. If, however, the abnormal records of 1929 are excluded, it is found that activity in the District has compared rather favorably with other recent years, particularly 1928, which from the standpoint of industrial earnings at least, was the second best year in history. Bank debits so far this year were only two per cent below the same period of 1928. This is less than the decline in the general price level. Pig iron output has slightly out distanced 1928, but steel ingot production fell short of that period by three per cent. Automobile production, new passenger car registrations, and coal output were all larger than two years ago. Building compared less favor ably with 1928 (or any recent period, for that matter) than any other item and was twelve per cent under the first four months of 1928. FOURTH DISTRICT BUSINESS INDICATORS PER CENT CHANCE JAN.-APR. 1930 COMPARED P C * CENT CHANGE compared W lT H -JA B s-A P B . 1329 ' IBANK DEBITS COMMERCIAL FAILURES* BUILDING o p e r a tio n s PIC IRON t>RODUCTION** STEEL INGOT PROOUCTION1 COAL PRODUCTION AUTOMOBILE PRODUCTION** D E P A R T M EN T S T O R E SALES AUTO MOBI-E REGISTRATIONS •«> HO 0 -* e 0^E V E R 5E 0 * * U.S. FIGURES - 4 0 - ' 3 0 - * 0 -10 O *10 *20 Individual lines showed some varying changes during the past month. Small, miscellaneous manufacturing con cerns, especially in the central part of the District, have been operating at rather satisfactory levels, particularly for a period of general recession. Iron and steel opera tions have declined seasonally, the second general fallingoff reported this year. A curtailment of steel buying in preparation for new automobile models, and price re adjustments caused by freight rate revisions, were two disquieting elements. Despite the unfavorable factors experienced this year, earnings of the larger steel com panies in the first quarter were only 15 per cent below 1929 and were 70 per cent ahead of the same period of 1928. Employment is still generally unsatisfactory. The sea sonal increase in outside work has been offset by seasonal declines in the demand for industrial labor. The shoe industry is depressed. Warm weather has increased travelling with a consequent greater demand for replace ment tires. Coal shipments at Lake ports have aided mine operations slightly. Collections are reported favorable by many concerns, but the majority state that it is more difficult to obtain payments on bills than a year ago. Recent general rains have benefited a g r i c u l t u r a l com munities and although work is somewhat more advanced than at this time last year, the condition of the crops is not as good as a year ago. Fruit prospects are gen erally poor. FINANCIAL The credit situation continues relatively easy in the Fourth District; total loans and investments of reporting member banks in leading cities, however, in the thi*d week of May were substantially the same as one 3^ar ago and $67,000,000 above the low point of late Ma*cjj# Need for accommodation at the reserve bank has steadily declined, notwithstanding, and in May was the since 1924. The changes in the various classes of loans ^ ere ^Uite marked from last year and reflected in part the differe**ce in general conditions. “ All other” loans have Actuated within narrow limits since the first of the y car* ^ ith a declining tendency. This was in contrast the experience of former years when such loans **ave e x panded coincident with the increase in activity sPriiigt 2 THE MONTHLY BUSINESS REVIEW which is usually the busiest season in this District. This is about the average monthly increase of recent On May 21 these loans of reporting member banks in years, but which, previous to the last two months, had leading cities totaled $786,000,000, compared with $823,- not been recorded for some time. 000,000 last year, a drop of $47,000,000. Loans on securi BANKING OPERATIONS ties, on the other hand, although showing an increase of Federal Reserve Banks $12,000,000 in the week ended May 21, were still $15,000,Federal Reserve Bank of Cleveland Federal Reserve System (In Millions) (in Millions) 000 under the peak so far this year reached in March. May 21, May 22, April 23, May 21, May 22, April 2S. 1929 1930 1930 1929 1910 These collateral loans were $50,000,000 higher than last Gold Reserves ............. 1930 314 279 296 3,076 2,842 3,049 year at this time, but the experience of the past eight Discounts ......... ............. 18 90 23 210 904 212 ................. 18 12 20 187 188 257 years shows that the average year-to-year growth in Acceptances 60 28 50 628 153 527 U. S. Securities ........... Total bills and securi this type of loan has amounted to about $46,000,000, so ties ............................ 81 130 93 932 1,204 1,00$ that the expansion in these loans in the past year has Federal Reserve notes.. 179 204 181 1,453 1,640 1,518 in circulation ........... been only slightly above the average for that period. Total deposits ............... 199 189 190 2,439 2,325 2,422 Reporting Member Banks In addition to reducing their borrowings and strengthen Fourth District United States ing their reserve position, reporting member banks have (In Millions) (in Millions) May 21, May 22, April 23, May 21, May 22, April 21 added to their investment portfolios, an increase of 1929 1980 1930 1929 1980 $9,000,000 occurring in the first three weeks of May. Loans on securities .... 1930 743 694 740 8,322 7,144 8 S2fi other ...................... 786 823 789 8,484 9,048 8*629 Despite the expansion of $54,000,000 since the beginning All Total loans ................... 1,529 1,517 1,529 16,806 16,187 16!956 660 648 5,855 5,818 6 79i of the year, security holdings were still below the level Investments ................. 655 Demand deposits ....... 1,070 1,027 1,042 13,382 12,810 13*456 at this time in 1928 or 1929. Time deposits ............... 968 951 965 7,132 6,789 7|o$4 The increase in collateral loans has been nearly MANUFACTURING, MINING counterbalanced by the change in investments and “all other” loans so that total credit extended by reporting Iron and Iron and steel markets of the Fourth member banks was but $7,000,000 above May, 1929. Steel District continued unsettled in price Demand deposits increased during the past four weeks and wavering in production in the and were more than $70,000,000 above the low point this month ended May 20. In the early part of the period year (in February) and nearly $50,000,000 higher than there was no marked trend, but at the end prices were at this time in 1929. Time deposits have remained quite sinking into a distinctly weaker area and production steady recently, but were slightly larger than last year appeared to be declining into the midsummer lull. and $43,000,000 above the amount reported in January. All year the price situation has been the weakest spot Total bills and securities of this bank on May 21 were in the entire industry and a general lack of effort to $81,000,000, of which $50,000,000 or 62 per cent repre support the market has been conspicuous. In early sented holdings of government securities, $13,000,000 or May, producers were showing little desire to keep prices 16 per cent, acceptances purchased and $18,000,000 or 22 up, being anxious to liquidate the remaining weakness per cent, bills discounted for member banks. In May, as a contribution to stability which must come before 1929, total bills and securities at $130,000,000, were nearly buying improves to any extent. $50,000,000 higher than at present. Twenty-two per cent Heavy finished steel bars, plates and shapes were of this was government securities, nine per cent, bankers’ reduced $1.00 per ton in mid-May, following a similar cut acceptances and 69 per cent, bills discounted for member a month previous. Since the first of the year there has banks. been a reduction of $4.00 per ton in plates and shapes Increases in the gold holdings of this bank of $18,000,- and $3.00 in bars. Prices on plates and shapes, at 000 occurred in the past month, chiefly the result of 1.70 cents, Pittsburgh, were at the lowest point since 1915. While prices on other important products were not check settlements favorable to the banks in this District. This, together with a further slight reduction in the formally reduced, large concessions have been reported volume of Federal reserve notes in circulation, (which in the past month. Semi-finished material and wire on May 21 was about $25,000,000 less than in 1929 products were reported shaded $1.00 to $3.00 per ton on and which, among other things, reflected smaller pay transactions originating in the Mahoning valley. Bee rolls and a reduction in wholesale and retail prices) was hive coke, stationary since December, was reduced ten an additional cause of the decline in the reserve-bank cents a ton. Pig iron at Cleveland was off 60 cents a credit extended. Bills discounted on May 21 were the ton, with Pittsburgh and Valley prices threatened. Iron lowest since October, 1924. Borrowings of banks in and steel scrap prices continued to decline. In general, the weak price situation reflected com principal cities have fallen to $4,000,000, the bulk of accommodation being extended to banks in smaller centers. petition for business. The support of the automotive Borrowing of the smaller banks is largely seasonal, how industry was less distinct in late May than in mid-April, ever, caused by the demand from agricultural sources. though a few hot-rolled strip mills were able to accumu Lower interest rates were reported by banks in Re late moderate back-logs. Producers of car materials serve bank and branch cities, the greatest reductions were shipping in moderate amounts, but were not being shown at Cincinnati where interest charges had replacing their business. Manufacturers were -'•-Vug been somewhat higher than at Pittsburgh and Cleveland. down orders in anticipation of model changes in mid Money rates in financial centers on all classes of paper summer. Sheet demand, other than automotive, was shrinking decidedly. were also lower than a month ago. Savings deposits at large banks increased again in Tin plate mills, operating near capacity in the first April, the growth for the month being 0.5 per cent. part of this year, began to curtail production Bong^niiy 3 THE MONTHLY BUSINESS REVIEW in early May, though operations still averaged over 80 per cent. Occasional orders for steel pipe kept produc tion unchanged near the 70 per cent level. Structural steel and concrete bar business was falling below not only 1929, but also the more normal 1928. The mixed trend is discernible in the production statis tics. Daily average pig iron output rose in April for the fifth consecutive month, the increase from March to April being just about the usual seasonal amount. The daily average production has climbed from 91,513 tons in December to 106,418 tons in April, which compared with 122,100 tons in April, 1929, but which was larger than the 106,200 tons produced daily in April, 1928. At the beginning of May, however, only 182 furnaces were in blast, two less than on April 1, which indicated a seasonal decline in May. In the first four months of 1930, 12,130,048 gross tons of pig iron were produced, com pared with 14,024,089 in the same period of 1929 and 12,135,333 tons in 1928. The trend of steel ingot production has been irregular. Output rose from a daily average rate of 115,851 tons in December to 169,499 tons in February, but declined slightly in March and in April dropped to 159,358 tons a day. The decline from March to April was less than seasonal, however. Despite the fact that operations are now at only about 75 per cent of capacity and have been below average for the first part of the year, and that prices have been declining and are now at the lowest level generally since 1922, the iron and steel industry has made quite a favorable showing for a period of general business reaction. Earnings of the larger steel com panies in the first quarter this year were only 15 per cent below the same period of 1929, and were 70 per cent larger than the initial period of 1928. Coal Soft coal output in April in the Fourth District amounted to 15,325,000 tons, a decline of about one per cent from a year ago, less than the drop of 4.4 per cent reported for the entire country in April compared with the same month last year. Part of the decrease in this section was seasonal and part was caused by smaller lake ship ments, which in April, were 33 per cent less than in April, 1929. The latest stock report of the Bureau of Mines indi cates that soft coal in hands of industrial concerns and dealers has declined steadily since the first of the year despite the slowing down of business, and on April 1 was at a level only once equaled since 1922. There was an increase of 16 per cent from last year in industrial (other than steel and coke) and dealer stocks in Western Pennsylvania, but a decrease of ten and fourteen per cent respectively in industrial and dealer stocks in Ohio. Prices continued to sag and the market was sluggish, notwithstanding the drop in production and the contrac tion of stocks. Dealers reported a falling-off in collec tions and little change in the demand for industrial coal. Automobiles Automobile production in the United States amounted to 442,630 cars and trucks in April as compared with 621,910 last year, the record for all time. Output for the month exceeded April, 1928, by nearly 33,000 cars or eight per cent and was larger than any correspond ing month on record, excluding 1929. Production in the first four months, 1,466,590 cars, was exceeded in only two similar periods, 1929 when output totaled 2,075,000 units and 1926 when it amounted to 1,545,000 vehicles. Although production has expanded three and one-half times from the December low point, the improvement has by no means been shared equally by all manufac turers. The builders of two low-priced cars have ac counted for over 60 per cent of this year’s output; the majority of manufacturers have been operating at only very moderate schedules since the first of the year. Truck manufacturers and parts makers reported an improvement during the past month. Operations are still well below capacity, however, in most cases. New passenger car registrations in nine principal counties in April exceeded the same month of 1927 and 1928 by a good margin, but were in about the same re lation to 1929 as earlier months of this year have been, the decline being about 30 per cent. Improved weather in May stimulated sales somewhat. New Passenger Car Registrations Nine Principal Counties Akron (Summit)......... Canton (Stark)............ Cincinnati (Hamilton). Cleveland (Cuyahoga). Columbus (Franklin).. Dayton (Montgomery) Pittsburgh, Pa., (Allegheny)............. Toledo (Lucas)........... Ynpstn^ (Mahoning).. . Rubber and Tires April, 1930 1,518 961 2,126 5,574 1,440 1,016 April, 1929 2,591 1,532 2,904 7,206 2,335 1,434 4,441 1,078 723 18,887 5,332 2,105 1,364 26,803 % change % change from Jan.-Ap r. Jan.-Apr. from 1929 1929 1929 1930 —41.4 3,477 5,894 —41.0 — 39.1 — 37.3 2,206 3,623 — 21.2 — 26.8 5,799 7,358 — 27.6 — 22.6 13,753 18,985 — 38.3 — 34.1 3,817 5,792 — 29.1 2,916 4,288 — 32.0 — 16.7 11,477 —48.8 2,886 1,905 —47.0 — 29.6 48,236 12,874 5,656 3,161 67,631 — 10.9 -4 9 .0 — 39.7 — 28.7 The adverse conditions which have been confronting the rubber and tire industry for nearly a year have grad ually improved and to a degree have been corrected. Large stocks, both of dealers and manufacturers, have been reduced. Final dealers’ stock figures as of April 1 were somewhat larger than the preliminary figure re ported last month, but are still twelve per cent below one year ago. Manufacturers’ stocks, though having in creased slightly since the first of the year, are 18.4 per cent below last season. They still slightly exceed those of any other year, however. 4 THE MONTHLY BUSINESS REVIEW Improvement in the automobile industry has aided pro ducers, but original equipment orders have been from 25 to 80 per cent below last year. Replacement demand was also down materially, though with dealers' stocks now reduced and warm weather coming on, the situa tion is much improved. Early May orders were decidedly larger than those of April. Preliminary production figures for April showed that output was 16 per cent larger than in March, 24 per cent below April, 1929, but only 2.5 per cent under April, 1928. Production so far this year has more nearly ap proximated 1926 than any recent period. It is observed on the chart that, though production has been slightly in excess of shipments, resulting in an increase of tire stocks, there has not been the piling up in anticipation of summer demand shown in other spring seasons. Crude rubber imports in April were 49,927 tons, com pared with 54,171 tons last year. In the first four months imports were 186,447 tons, a drop of 38,361 tons from the same period of 1929. The May tapping cessation project on plantations has been supported by nearly all British and Dutch growers, but has had no particular effect on the market. Prices declined to 14 cents in May, after continuing at or slightly above 15 cents in the first four months of this year. Shoes The shoe business is in a rather de pressed state, local conditions being somewhat worse than in other parts of the country. April production of factories in the southern part of the District declined 13 per cent from March, while 800 establishments throughout the country reported an increase of 1.6 per cent. Local April output was 25 per cent below the same month last year and pro duction in the first four months was 18 per cent under the corresponding period of 1929. Manufacturers and jobbers reported a falling-off in sales following Easter, with volume so far this year considerably below the first part of 1929. Complaints in regard to collections are heard at many points, with buyers asking for more or extended credit. Clothing Manufacturers are making preparations for the fall season, production getting under way about two weeks later than in 1928 or 1929, partly because of the late Easter. With the exception of a spurt in April in replacement orders, business so far this year has been considerably below the last two years. The retail establishments have pur sued a very hesitant buying attitude and are operating with reduced stocks generally. A few increases are re ported in orders for fall delivery, but cautious buying is still quite prevalent. Warm weather in May brought a few favorable orders for seasonal merchandise. Tex tile demand is less than in the early months of the year and knit-wear business has slowed down somewhat. -Lit tle complaint is made regarding collections. Textile and raw material prices have been fluctuating In narrow levels during the past month with a slightly downward movement noticed in mid-May when they av eraged 15 per cent lower than last year. Wool (Fair child average) stood at $.65 a pound on May 17 as against $.91 one year ago. Cotton yarn (Fairchild) was quoted $.302 a pound, compared with $.345 in May, 1929, Silk was $4.20 a pound, while one year ago it brought $5.10. Falling prices have been another deterring factor to the clothing industry for some time. Other Manufacturing General manufacturing concerns in May reported operations about the same as a month earlier. A few reported In creases, a few declines, but the majority stated that busi ness is unchanged. Employment continues below last year and there is considerable complaint about collections. Small manufacturing concerns in the central part of the District are operating at fairly satisfactory levels. Agricultural Implements. Business has slowed down. Collections are poor. Automobile Accessories.. Parts and accessory factories have increased operations in keeping with the improve ment in the automobile industry. Sales have been be low 1929, but compare quite favorably with other years. Brick and Ceramics. Brick and tile plants have not re sumed production at the rate of former years, because of large stocks carried over from 1929. Employment in creased two per cent in April. Prices are low, in some cases below production costs. Employment at china and pottery plants declined less than the average of the last five years from March to April, but was still eleven per cent below 1929. Electrical Supplies. Employment at 20 concerns in April was on a par with April, 1929, an improvement being shown from March. Collections are good. Lower copper prices have stimulated buying to some extent and May operations were at high levels. Glass. Activity declined more than seasonally in April and little change was reported in early May. Industry affected by the depressed building situation and lower au tomobile production, in addition to other factors. Hardware, Machinery. Conditions are little changed from one month ago. Collections compare favorably with 1929. Production and demand has been much below the last two years. Paint. Sales of household paint have been about the same as in 1929. Lack of rain and warm weather has favored outdoor redecorating work. Industrial demand still at low levels, particularly from the automobile and furniture manufacturers. Collections are reported bet ter than in 1929 and quite satisfactory. Stoves, Ranges. No particular change during the past month. Employment still below last two years and col lections are not as good as one year ago. TRADE Installment Sales Periods of business inactivity revive discussion of the trend and effect of installment selling. While the total volume of such sales has no doubt increased in the past few years, data furnished by stores in this District in dicate that the ratio of installment to total sales, in the department store for which such data are available at least, has actually declined. Purchases of goods on the THE MONTHLY BUSINESS REVIEW deferred payment plan at the department stores are limited to, among other less important things, furniture, including musical instruments and household appliances, clothing and jewelry and do not include the automobile which probably represents the bulk of installment buy ing. There has also been an increase in the number of concerns who do most of their business on deferred pay ment plan which might account in part for the fallingoff in such sales at department stores, but about which no definite information is available. The figures of department stores, while not all-inclu sive, furnish evidence of one branch of installment buy ing in relation to all purchases. The accompanying chart shows a downward trend in the ratio of installment to total sales in about 20 large stores from the middle of 1926 to date. This is in direct contrast to the course of regular 30-day accounts. A chart showing the rather rapid increase in the ratio of all charge (including in stallment and 30-day accounts) to total sales was pub lished in the January issue. In the last nine months of 1926 this ratio averaged 57.8 per cent; in 1927 it was 59.5 and in 1928 and 1929 it had increased to 61.2 and 63,3 per cent respectively. If regular 30-day accounts alone are used, the increase in the last four years has been somewhat sharper than the increase in total credit sales. Installment sales alone, on the other hand, in 1927 were 7.1 per cent of total sales, in 1928, 5.7 and in 1929, 6.2 per cent. The downward trend, however, appears to have been reversed in the last six months. Beginning with No vember, 1929, in each montL the ratio of installment to total sales has exceeded the corresponding month of the previous year. The abnormal increase in the March ratio was caused by special sales of goods sold on the installment plan at Cleveland. That there is a very definite seasonal swing in install ment sales is clearly evident. February and August are the months of largest sales, brought about by the special sales of furniture, furs and clothing which occur in these two months. The lowest month of the year is December. While there has been a slight increase in the ratio of installment to total sales in the past few months, the series is not long enough to permit any conclusions as to the trend of installment buying in periods of low busi ness activity. The experience of department stores in regard to col lections on installment accounts is also quite interesting IN S T A L L M E N T SALES 20 DEP'T. STORE S - 4 TH DISTRICT ____ 1 INS'rALLMCNT PCR C £ N T 6 and is shown on the second chart at the bottom of the page. Here again there is a decided contrast between collections on installment accounts and regular 30-day accounts. In 1926 the ratio of collections on regular ac counts outstanding at the end of the preceding month averaged 44.6 per cent. By 1929 this had declined to 41.8 per cent. Collections on installment accounts in 1926 averaged 17.3 per cent, declined to 17.1 and 16.9 per cent in 1927 and 1928, but increased to 17.6 per cent in 1929. As noticed on the chart, there was a slight falling-off in col lections in late 1927 and early 1928, which rather closely coincided with the drop in business, but improvement occurred in late 1928 and the first part of 1929. In the last half of 1929, installment collections were about at the same level as earlier in the year and did not show the continued falling-off that was experienced in collec tions on regular accounts receivable. Retail Trade Department store sales in the Fourth District were 6.4 per cent greater in April than in the same month of last year, all large cities except Akron and Toledo reporting gains. How much of the improvement was caused by the late Easter buying cannot be ascertained. Sales in the first four months of this year were about six per cent below the corresponding period of 1929. Declines ranged from slightly over two per cent at Columbus and Cin cinnati to 14 and 15 per cent at Toledo and Akron re spectively, where conditions in the automobile and rubber industry have had a depressing effect on retail buying. Smaller retail trade this year has been experienced in all reserve districts except Boston and New York. While trade in the Fourth District is slightly below the av erage for the entire country, the agricultural districts have generally reported larger declines, some running as high as eleven per cent. Contracting inventories are still much in evidence throughout this territory, stocks on hand on April 30 be ing 8.3 per cent below one year ago. Stock turnover so far this year has been about the same as in 1929. Credit sales have increased slightly and collections are not up to last year. Wholesale Trade Wholesale trade in the Fourth District, as shown by reports from 83 firms comprising five general lines, was about five per cent below April, 1929, but was at approxi I N S T A20L LOE^T. M E NSTORES T -C4OTHL DISTRICT LECTIO NS PER C E N T RATIO o r TO TOTAL SA LCS AA IO K J IS i nd A aA / a K K 11A 1 u (926 1927 \V IK \ ht 1928 ID J* “ \ 1 1 1929 1930 14 ^ V1 1926 I I 1927 1 me 1929 83 0 THE MONTHLY BUSINESS REVIEW 6 mately the level of the same month in 1928. Grocery, hardware and shoe concerns reported increases from March, although all lines so far this year were under last year's level. Grocery sales were reported in about the same dollar volume in April as last year, notwithstanding the gen eral decline in commodity prices which has occurred. Stocks and accounts receivable were larger than a year ago, but collections were slightly off. The two groups showing the largest decline from 1929 were hardware and shoes which reported losses of 18 and 19 per cent respectively in April. The decreases for the first four months were 15 and 26 per cent. Dry goods firms reported a falling-off of 13 per cent in April and the first four months of this year. Stocks are slightly lower and accounts receivable and collections decidedly below April, 1929. April wholesale drug sales were six per cent below last year. Accounts receivable were twelve per cent greater, but collections were off two per cent. BUILDING The rather sharp decline in building activity in April after the more than seasonal increase in March seemed to indicate that the long-anticipated improvement had not materialized to any extent. Building contracts awarded in the Fourth District in April amounted to $46,918,000, according to the F. W. Dodge Corporation. This was a decrease of 22 per cent from March, contrasting with the increase shown from March to April in former years. The falling-off was in non-residential building, for a more than seasonal gain of 37 per cent was shown in home construction. Despite the improvement, this type of building lags far behind the level of recent years and was 33 per cent below April, 1929, which was not a good building month. In the first four months of 1930, total building was six per cent under the same period of 1929 and the low est since 1924. Residential construction was 35 per cent below last year. Building activity in the first half of May evidenced a further slight increase from April, but the daily average was still 11 per cent below the daily average for the entire month of May last year. Irregularities in the various types of construction are reflected in the reports from building supply and lum ber dealers. Cement production in the District in the first four months of this year was five per cent ahead of 1929, a result of the greater percentage of public util ity and road, and commercial building reported this year. The lumber business on the other hand is in a de pressed state, with no signs of improvement until resi dential building expands. Prices are the lowest in years. Collections are unsatisfactory in most cases, more exten sions and renewals on due accounts being reported. AGRICULTURE Recent general rains and the warm weather in early May have benefited crops in most parts of the Fourth District and though growth of winter grains and pas ture was retarded by the dry, cool weather in April, both spring plowing and sowing are more advanced than a year ago. The supply of farm labor has decreased slightly, but is still much in excess of demand. Prices of farm products in general increased slightly in April, the first improvement reported in eight months, all groups except livestock showing advances. The gen eral level, however, was still over eight per cent below one year ago and the lowest since 1927. Winter wheat production in Ohio promises to be con siderably below last year and slightly under the fiveyear average. The crop is estimated by the Department of Agriculture at 26,816,000 bushels, compared with 3 3 696,000 bushels harvested in 1929. The Pennsylvania crop is irregular, about the same acreage remaining for harvest as last year, but the average condition is sev eral points above the 10-year average. Kentucky and West Virginia conditions are about the same. Unless an unusually good crop year is experienced, this year's harvest, according to the figures of the Depart ment of Agriculture, will probably be smaller than in 1929. Planting of wheat in 15 foreign countries amount ed to 89,052,000 acres, as compared with 90,397,000 acres harvested in 1929, a decline of 1.5 per cent. * l n the United States, May 1 condition figures indicated a crop of 525,000,000 bushels, a drop of 9.2 per cent from last year. Fruit prospects in the District are quite varied. Con siderable damage was done to early fruits last winter and the severe freeze in late April was very harmful to the peach and cherry crop especially. Tobacco The severe drought during April and early May caused considerable damage to tobacco plant beds and interfered with the final preparation of many tobacco fields. Re cent general rains will correct these difficulties to a large extent and there will probably be an abundance of plants to set out a good-sized crop, possibly as large as was intended earlier in the year. The fact that many growers carefully watered plant beds during the dry weather and that others were negligent in this matter has resulted in a greater variation in the size and con dition of plants. This has a direct effect on the date of setting. Some fields have been planted already, while others will not be able to be set before the middle of June, judging by the present size of the plants. 7 THE MONTHLY BUSINESS REVIEW Debits to Individual Accounts Fourth District Business Statistics (Thousands of Dollars) (000 omitted) Fourth District Unless Otherwise Specified April, from 1930 k% change from 1930 1929 v% change Jan.-Anr., 1929 Bank Debit*— 24 cities................$3,309,000 — 12.2 12,655,000 — 11.6 Savings Deposits—end of month: Ohio— 36 banks........................ $ 772,045 — 1.5 768,7761 — 2 .3 Western Pa.— 25 banks............$ 277,624 + 0.5 274,616* — 0.3 Total—61 banks....................... $ 1,049,668 — 1.0 1,043,3921 — 1.8 3,354 + 5 . 2 12,971 + 2 . 8 Postal Receipts—9 cities............. $ Life Insurance Sales; Ohio and Pa..............................$ 129,998 + 7.1 512,977 + 8.4 Retail Sales: Department stores—58 firm s..? 28,114 + 6.4 89,553 — 6.3 Wearing Apparel stores— 16 firms......................................$ 2,017 + 14.3 5,901 — 7.8 Furniture—45 firms................. $ Wholesale Sales: Dry Goods— 11 firms...............$ 1,770 — 12.6 6,593 — 13.3 Drags— 13 firms....................... $ 1,656 — 5.8 6,634 — 9.3 Grocery—41 firms.................... * 5,873 + 0.1 22,918 — 0.4 Hardware— 17 firms.................$ 1,928 — 17.6 7,057 — 14.5 Building Permits—27 cities........ $ 15,754 — 15.2 54,238 — 15.8 Building Contracts— Residential.J5 12,651 — 33.3 37,169 — 34.9 * “ Total, all classes % 46,918 — 8.8 177,783 — 6.2 Commercial Failures— Number.. 136* — 13.9 670s — 6.2 Liabilities.? 2,573 + 1.3 16,960 + 1 9 .4 Production: Pig Iron, U. S............................Tons 3,182 — 13.1 12,130 — 13.5 Steel Ingots, U. S......................Tons 4,143 — 16.1 16.287 — 13 .4 Automobiles— Pass, Cars, U. S ... 374,606s — 30.1 1,243,269* — 30.8 67,459® — 20.0 219,773* — 18.5 Trucks, U. S............. Bituminous Coal.......................Tons 15,325 — 1.2 63,744 — 5.1 Cement— O., Wn. Pa., W. Va.Bbls. 1,458 + 4.1 4,152 + 5.0 Electric Power— O., Pa., Ky...k,w . hrs. 1,237* + 2.9 3,849* + 3.5 Petroleum— O., Pa., K y .......... Bbls. 2,385* + 1 8 .0 7,023* + 21.3 Shoes..........................................Pairs 5 — 25.4 * — 18.3 Tires, U. S................................. Casings 4,515* — 24.1 15,676 — 28.2 Iron Ore Receipts— Lake Erie Ports.......................Tons 10 .... 10 Bituminous Coal Shipments— Lake Erie Ports.......................Tons 1,881 — 33.0 1,938 — 31 6 1 Monthly average 4 January-March f Actual number * Confidential • March * Preliminary Retail and Wholesale Trade (1930 compared with 1929) Percentage Increase or D ecrease SALES STOCKS SALES Apr.Apr. D EPAR TM ENT STORES ( 58) Akron........................................................................ .... — 2.9 Cincinnati................................................................ .... + 8.6 Cleveland................................................................. ....+ 5.1 Columbus................................................................. .... + 7.9 Dayton.......................................................................... + 0.1 Pittsburgh.................................................................... + 12.3 Toledo....................................................................... ....— 0.6 Wheeling.......................................................................+ 6.4 Other Cities.................................................................— 4.8 District..........................................................................+ 6.4 W EAR IN G APPAREL ( 16) Cincinnati................................................................ .... + 13.2 Cleveland................................................................. .... + 16.5 Other Cities............................................................ .... + 13.1 District..................................................................... .... + 14.2 FURNITURE ( 45) Cincinnati................................................................ .... — 27.3 Cleveland................................................................. ....— 16.2 Columbus................................................................. ....— 28.7 Dayton..........................................................................— 26.9 Toledo....................................................................... .... — 37.2 Other Cities............................................................ ....— 31.3 District..................................................................... ....— 27.0 CHAIN STORE* Drags-District ( 3) ........................................... + 5.4 Groceries-District (6) ....................................... + 2.1 WHOLESALE GROCERIES ( 41) Akron........................................................................ ....— 16.4 Cincinnati................................................................ ....— 0.9 Cleveland................................................................. ....— 4.5 Erie................................................................................+ 0.7 Pittsburgh....................................................................— 1.7 Toledo...........................................................................+ 0.5 Other Cities............................................................ ....+ 7.9 Diatrict..................................................................... .... + 0.1 WHOLESALE DRY GOODS ( 11) ............... ...— 12.6 WHOLESALE DRUGS ( 13) ...........................— 5.8 WHOLESALE H ARDW ARE ( 17) .............. ...— 17.6 WHOLESALE SHOES ( 5) ...........................' — 18.8 •Sales per individual unit operated. First 4 mot. Apr.- — 15.6 — 27.7 — 6.7 — 8.9 — 10.4 — 2.6 — 5.6 — 2.5 — 8. 0 A pr. — — 4.8 — 3.7 — — 4 .8 11.8 — 8.3 — 7.2 — 10.4 — 10.0 — 7.3 — 1.9 — 6.0 — 7.8 — 6.2 — 21.4 — 15.4 — 20.4 — 18.3 — 37.5 — 27.2 —22.6 + 19 — 1.3 — 14.1 + 3.0 — 3.4 — 3.6 — 3.9 — 1.4 + 5.7 — 0.4 — 13.3 — 4.2 — 14.5 — 26.0 + 2.4 — 1.2 + ‘ o!6 — 10.9 — 16.1 + 8.0 — 7.6 — 10.3 — 7.9 + 3.1 — 1.1 — 11.6 + 9.9 — 13.1 — 3.7 — 17.0 + 4.3 — 13.3 — 7.8 — 6.7 — 8.9 — 15.9 — 10.5 + 2.7 — 16.5 — 17.2 — 25.2 — 5.4 — 3.0 — 19.5 — 9.2 Year to date, 1930 (Dec. 31May 21) 483,181 57,231 236,491 1,845,920 4,008,858 874,553 16,168 455,612 190,757 25,344 89,136 74.344 21,019 141,975 63,040 26,869 55,790 77,809 4,519,311 113,061 49,598 888,677 59.809 212,451 335,570 48,468 14,971,042 Year to date, 1929 (Jan. 2May 22) 562,380 55,979 262,233 2,161,415 4,286,959 885,362 17,111 507,594 181,863 26,524 93,909 80,383 22,151 157,207 74,595 28,422 60,014 85,977 5,153,641 117,668 57,874 1,107,544 69,508 243,901 360,516 62,017 16,722,747 % change from 1929 — 14.1 + 2.2 — 9.8 — — 6.5 — I-? — 5.5 — 10.2 + 4.9 — 4.4 — 5.1 — 7.5 — 5-1 — — 15.5 — 5.5 — 7.0 — 9.5 — 12.3 — 3.9 — 14.3 — 19.8 — 14.0 “ 12.9 — 6.9 — 21.8 — 10.5 (1923-1925 = 100) Bank D ebits (24 c it ie s )............................................. C o m m e rcia l Failures ( N u m b e r ) .......................... “ (L ia b ilitie s )..................... .. P ostal R e ce ip ts (9 c it ie s ) ....................................... Sales— L ife Insurance (O h io and P a .) ................ — D e p a rtm e n t Stores (55 fir m s )................. '* — W h olesale D rugs (13 fir m s ).................... — “ D ry G o o d s (11 fir m s ).......... “ — “ G roceries (41 fir m s ).............. — ** H ardw are (15 fir m s )............ “ — " All (83 f ir m s )f ........................ “ — C hain D rugs (3 fir m s )* * ............................ B u ilding C o n tra cts ( T o t a l ) ..................................... ** (R e s id e n tia l).......................... P r o d u ctio n — C oa l (O ., W n . Pa., E. K y . ) ......... — C em ent (O ., W n. Pa., W . V a .).. — P etroleu m (O ., P a., K y . ) * ............ — E lec. P ow er (O ., Pa., K y .) * . . . . — S h o e s ...................................................... ♦M arch * * P e r in d iv id u al unit o perated fln c lu d e s 3 shoe firms pr. Apr. Apr. Apr. Apr. >30 1929 1928 1927 1926 114 129 139 124 122 103 137 86 93 108 75 137 58 56 160 122 119 125 123 129 129 122 127 155 145 103 116 101 112 105 117 109 109 106 112 81 78 77 77 88 87 91 89 89 85 96 99 86 82 100 94 87 91 87 93 100 96 88 82 86 117 162 147 108 98 135 179 142 no 74 88 80 74 85 86 104 117 121 117 110 102 113 112 129 109 131 141 135 147 143 62 73 108 91 68 Building Operations (Value of Permits) 8 .0 — 6.3 % change from 1929 Fourth District Business Indexes 12.0 — 4.4 — 14.4 — 10.7 — Akron............... Butler............... Canton.............. Cincinnati........ Cleveland......... Columbus......... Connellsville. . . Dayton............. Erie................... Franklin............ Greensburg. . . . Hamilton.......... Homestead........ Lexington.......... Lima................. Lorain............... M iddletow n.... Oil C ity............ Pittsburgh........ Springfield........ Steubenville.,.. Toledo.............. Warren.............. Wheeling.......... Youngstown. . . Zanesville......... Total............. 4 weeks ending May 21, 1930 94,228 12,960 44,637 355,086 773,189 174,833 3,426 83,020 42,119 4,993 18,253 14,028 4,787 20,576 11,753 5,093 10,715 15,644 918,992 21,818 9,879 170.110 10,349 42,753 66,597 9,816 2,939,654 Ashtabula......... Barberton......... Canton.............. Cincinnati........ Cleveland......... Cleve. Suburbs: Cleve. Heights East C leve.. . April 1930 634,152 100,600 20,938 185,020 4,914,689 2,868,975 174,260 22,576 205,345 Garfield Hghts. 57,800 Lakewood.. . 248,260 227,507 Rocky River. 105,490 Shaker Hghts 464,475 Columbus.......... 445,100 Covington, K y. 148,900 351,909 Erie, Pa............ 979,071 186,502 Lexington, Ky.. 205,868 74,030 24,175 Pittsburgh, Pa.. 1,330,201 Springfield........ 133,510 Toledo.............. 906,106 Wheeling. W. Va.. 122,600 Youngstown... . 616,129 Total.............. 15,754,188 Per cent change from 1929 — 59.6 +574.5 — 80.1 — 52.2 + 45.9 -2 4 .3 Jan.-Apr. 1930 2,542,233 146,371 90,230 854,385 17,629,127 9,704,750 fan.-Apr. ' 1929 6,444,455 34,744 269,838 928,295 10,055,790 11,910,100 — 1.0 — 70.3 + 3 6 .6 —56.9 + 1.3 + 0.4 —24.7 — 23.2 —65.5 + 5 4 .4 — 23.0 + 4 2 .6 — 29.4 — 50.4 +304.2 —45.1 — 26.9 — 0.7 — 30.3 — 52.7 — 24.1 — 15.2 842,220 276,526 659,225 256,600 662,326 546,317 316,005 1,460,225 1,722,800 319,700 2,729,307 1,306,735 455,560 406,893 362,990 81,075 5,207,666 288,040 4,190,708 269,352 910,284 54,237,650 817,970 1,234,009 862,227 389,000 530,506 689,104 620,980 1,941,120 3,924,300 509,575 2,717,430 3,778,134 632,843 887,665 196,000 109,070 8,254,399 451,340 4,040,397 519,170 1,634,665 64,383,126 Per cent change from 1929 —60.6 +321.3 — 66.6 — 8.0 + 75.3 — 18.5 + 3.0 —77.6 — 23,5 — 34.0 + 2 4 .8 — 20.7 —49.1 — 24.8 — 56.1 — 37.3 + 0.4 —65.4 — 28.0 — 54.2 + 8 5 .2 —25.7 — 36.9 — 36.2 + 3.7 — 48.1 —44.3 — 15.8 THE MONTHLY BUSINESS REVIEW g Summary of National Business Conditions By the Federal Reserve Board Industrial activity increased slightly in April from the rate prevailing in March. Factory employment declined by the usual seasonal amount, while factory payrolls showed a smaller reduction than usual. Wholesale prices continued to decline in April and the first half of May. There was a further easing of open market money rates. Index number of production of manufac tures and minerals combined, adjusted for seasonal variations <1923-25 average = 100). Latest figure— April, 106. PER CENT P ER CENT I20| FACTORY EMPLOYMENT AND PAYROLLS f t /* A 120 c 70 025 1926 f927 1928 1929 1930 Index numbers of factory employment and payrolls, without adjustment for seasonal variations (1923*25 average = 100). Latest figures, April, employment 92.1, payrolls 96.7. Production Production in basic industries in April was slightly larger than in March and the Board’s index, which makes allowance for the usual seasonal changes, shows an increase of about two per eent, offsetting a large part of the decrease in March. Output of automobiles showed the usual seasonal expansion. Steel output declined seasonally in April and the early part of May. The output of silk textiles was considerably reduced and woolen mills curtailed opera tions, though less than seasonally. Cotton mills were more active in April and there was some increase in stocks. In the first half of May, however a program of curtailment was instituted in the industry. * In comparison with the first four months of 1929, a year of exception ally active business, production was smaller in almost all major branches of industry, with the exception of tobacco. In comparison with 1928, how ever, output was larger in the automobile, petroleum and silk industries, slightly smaller in steel and coal and considerably smaller in cotton and wool textiles, flour, meat packing, automobile tires and lumber. Building contracts awarded during April, according to the F. W. Dodge Corporation were six per cent larger than in March, reflecting further expansion in awards for public works and utilities and some increase in residential construction, largely seasonal in character. In the first two weeks in May there was a further increase in building activity. In comparison with 1929*, awards in the first four months of the year were 17 per cent smaller, re^ fleeting chiefly the continued small volume of residential building which more than offset increases in public works and in utility construction. Employment and Payrolls Factory employment, which had been decreasing since last September declined by about one per cent in April, which represents the usual de velopment for that month, while the reduction in factory payrolls from March to April was smaller than usual. Distribution Department store sales increased during the month by an amount esti mated to be slightly larger than is accounted for by the late Easter holiday The value of foreign trade decreased further in April and for the first four months of the year, exports were about 20 per cent smaller than a year ago when trade was exceptionally active. In part, this decline reflected the lower level of wholesale prices. Monthly averages of weekly figures for re porting member banks in leading cities. Latest figures are averages of *first two weeks in May. Wholesale Prices An increase in wholesale prices in the first week in April was followed by a substantial decline which continued into May and brought the level of prices to the lowest point in a number of years. Prices of important raw materials, such as wheat, cotton and silk, declined during most of the period, but steadied somewhat around the middle of May, while prices of silver, hides and coffee were comparatively stable. There were fairly continuous price declines in steel, sugar, raw wool and the textiles. Copper prices were reduced further early in May, but recovered somewhat follow ing large purchases for domestic and foreign consumption. Monthly rates in the open market In New York: commercial paper rate on 4-6 month paper. Acceptance rate on 90-day bankers* acceptances. Latest figures are averages et first 20 days In May. Bank Credit Loans and investments of member banks increased by about $160,000 000 in the latter half of April, but declined $140,000,000 in the first two weeks in May, both movements reflecting chiefly fluctuations in loans on securi ties. Investments increased further, while “ all other” loans continued to decline and on May 14, $t $8,560,000,000, were the smallest in more than two years. The volume of Reserve bank credit declined further by $125,000 000 between the weeks ending April 19 and May 17, largely as a result of*the addition of about $65,000,000 to the stock of monetary gold and of a further substantial reduction in the volume of money in circulation which reflected chiefly smaller volume of payrolls and declines in retail prices. The system's holdings of bills declined, while United States securities and discounts for member banks showed little change. Money rates on all classes of paper declined further in May. The dis count rate of the Federal Reserve Bank of New York was reduced from 3% to 3 per cent on May 2 and that at the Federal Reserve Bank of Bos ton from 4 to 8% per cent on May 8.
@FedFRASER