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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Cleveland, Ohio, March 1, 1928 Vol. 10 No. 3 Business in the Fourth District continued to improve in February, but at a slower pace than in January. Steel production up to the middle of February was ahead o f the high mark during the same period o f 1927, and prices in February were higher on the average than in January. Operations o f tire factories are at a high level, but the rapid decline o f crude rubber may prove an adverse factor. Motor and motor accessory concerns are increasing their production schedules. The clothing industry presents a somewhat confused picture, but the general trend is upward. January was better than De cember in the shoe trade after allowing fo r seasonal factors, and the improvement has continued in Febru ary, the demand being good in spite of higher raw ma terial prices. A rather pronounced upturn has taken place in the paint and varnish industry. On the other hand, depression continues in the coal trade, and lumber manufacturers report that business is still quiet. 100.9,. and fo r the week ending January 28 the curve stood at 103.1. The follow ing week it rose to 105.9, but then fell to 104.3, and again dropped to 102.2 for the week ending February 18. In the United States, distribution in the first week of February improved, but thereafter fell off, as evidenced by this bank's car loadings index (corrected for seasonal). The average of this index for the four weeks o f January was Money rates have hardened during the past month. Bankers' acceptances in the New York market have ad vanced from 3% to 3 X ^ per cent; the call loan renewal rate has been either 4% or 4*£ per cent in February, as compared with a range of 3% per cent to 4^ per cent in the last part o f January; and time money on the stock exchange now ranges mostly from 4 ^ to 4% per cent, as against 4 1/4-4% in the latter part o f January. Prime commercial paper in New York remains at 4 per cent. In the Fourth District, this class o f paper com mands 4^4-6 per cent in Cleveland, Pittsburgh, and Cincinnati. January unquestionably marked a turning-point in the general trend o f the country's business, at least fo r the time being. A fter the long decline in 1927, conditions in January took a marked turn fo r the better. This is con clusively proved by the rise o f the Federal Reserve Board's index o f industrial production from 99 in December to 105 in January; the advance o f this bank's distribution index, based on car loadings, from 93.4 fo r the week ending December 31 to 103.1 for the week ending Janu ary 28; and by the rise o f the Annalist's index o f gen eral business activity from 90.8 in December to 95.6 in January. FIN AN CIAL A slight increase in bills discounted by this bank to#k place between January 18 and February 21, and ac ceptance holdings also increased. Government securities held, however, dropped rather sharply, so that on Febru ary 21 total bills and securities amounted to only $135,000,000, as compared with $136,000,000 a month earlier. Contrary to the trend in the United States, reporting member banks in the Fourth District built up their loans secured by stocks and bonds from $636,000,000 on January 18 to $661,000,000 on February 15. “ All other" loans and investments likewise rose moderately, and on the latter date total loans, discounts, and investments were $2,142,000,000, as compared with $2,104,000,000 on January 18. trial production. F. R. Board, (1923-1925 = 100). Latest figu re: January— 105. Both carves adjusted fo r seasonal variation . Savings deposits o f 68 leading banks in this District aggregated $999,137,219 on February 1, 1928, a gain of 2 THE MONTHLY BUSINESS REVIEW 0.1 per cent for the month and of 8.2 per cent fo r the year. Commercial failures in the Fourth District numbered 269 in January, 202 in December, and 220 a year ago, according to Dun and Company. Liabilities were $5,995,461 in January, $3,455,204 in December, and $3,048,821 a year ago. There were 2,643 failures in the United States in January, 2,162 in December, and 2,465 a year ago. Bank debits at 24 centers increased from $3,416,000,000 in January, 1927, to $3,435,000,000 in the past month, a gain o f 0.6 per cent. The follow ing table gives the main changes in the balance sheets o f the Federal reserve and reporting mem ber banks. Federal Reserve Bank o f Cleveland Federal Reserve System (In M illions) (In M illions) Feb. 16 Feb. 16 Jan. 18 Feb. 15 Feb. 16 Jan. 18 1928 1927 1928 1928 1927 1928 Gold Reserves ................. 264 286 262 2,814 2,990 2,808 46 44 61 481 396 412 D iscounts ........ ................... A cceptances .................... 32 28 27 355 315 369 50 36 58 408 312 499 U. S. S e c u r it ie s .................. T otal bills and securities 128 108 136 1,245 1,025 1,281 Federal R eserve notes in circulation ........................ 194 198 201 1,586 1,685 1,624 T otal deposits ...................... 189 190 191 2,444 2,342 2,472 R E P O R T IN G M E M B E R B A N K S Fourth D istrict U nited States (In M illion s) (In M illions) Feb. 15 Feb. 16 Jan. 18 Feb. 15 Feb. 16 Jan. 18 1928 1927 1928 1928 1927 1928 Loans secured by stocks 661 562 636 6,482 5,571 6,656 and bonds ...................... A ll other ............................. 763 787 756 8,649 8,552 8,670 T otal loans ......................... 1,425 1,349 1,391 15,131 14,124 15,326 Investm ents ........................ 717 625 713 6,535 5.603 6,544 Demand deposits .............. 1,067 1,024 1,062 13,717 12,939 13,967 924 828 893 6,661 5,902 6,634 T im e deposits .................... Gold Movements The chart below shows (a ) the total amount o f monetary gold in the United States, including gold held abroad by Federal reserve banks but excluding United States gold coin earmarked for foreign account by Federal reserve banks, and (b) the net gain or loss to our total gold stock through imports and exports. The notable feature o f the chart is the marked decline in gold during the last part o f 1927. This is explained by the unusually heavy net exports during November and December. It will be noted that there was on ly a relatively slight loss of gold in January, 1928. Exports during that month amounted to $52,000,000— alm ost as large as in November and December— but imports w ere also heavy, resulting mostly from seasonal shipments from Canada. Total imports were $38,000,000, the la rg est since January, 1927. Corporation Earnings The table below gives the net earnings o f 238 large industrial corporations in the United States in 1927 and 1926. Of the 16 groups represented, earnings of 10 were larger in 1927 than in 1926, but the entire 16 groups com bined showed a loss o f 2 per cent. Increases over 1926 w e re registered by 125 corporations, and decreases by 113. The 2 per cent loss merely confirms the downw ard course of business during the last part o f 1927 as sh ow n by the various curves o f general business. The A n n alist’s index o f general business activity averaged 100.4 f o r 1927 as against 103.8 fo r 1926, a loss of about 3 p er cent, and the Federal Reserve Board’s index o f in d u s trial production averaged 106 in 1927, as compared w ith 108 in 1926, a drop o f nearly 2 per cent. Of greater importance is the very wide differen ce in earnings as between the various groups. An a n a ly s t o f the table shows that the oil and steel industries suffered more than any others, their combined earn in gs having declined from $246,000,000 in 1926 to $159,000,000 in 1927. This drop is almost four times as great as th e loss fo r all 238 concerns combined. On the other hand the rubber industry showed a gain o f 102.4 per ce n t fo r 1927, and other sizable increases took place i n chemicals, shoe and leather, stores and textiles. T|le motor industry was spotty; General Motors gained 20 8 per cent, while ten other firms showed a 26 per cent decline. The same wide variations appear in the number 0f firms showing increases over or decreases from 192Q Gains occurred in all six o f the chemicals, all four shoe and leather firms, nine out o f ten tobaccos, five out o f six sugars, five out o f six rubbers, and ten out o f xg stores. Declines, however, were shown by 13 out o f 14 N ET E A R N IN G S (A fte r 7 6 11 24 10 11 10 17 6 4 14 13 6 17 10 72 charges but b efore dividends) In thousands o f dollars Per cen t N o. 1927 1026 change In cr. 17,309 18,024 B uilding .................... — 4.0 3 25,182 18.444 Chemicals .............. + 36.5 6 30.490 36,852 Equipm ent ............... — 17.3 3 127,586 135,307 Food. P a ckin g — 5.7 16 42,024 46,753 M ining - ................... — 10.1 1 M otor 235,105 194,645 General M otors ... + 20.8 I 53,533 72,409 10 others ................. — 26.0 3 288,688 267,054 Total .............. ........... + 8.1 4 2 0^68 20,285 M otor A ccessories - f 2.9 4 18,591 61,880 Oil ..........- ............. — 70.0 3 27,414 Rubber ..................... 13,545 + 102.4 5 22,390 Shoe, Leather 16,689 + 34.2 4 Steel 87,845 U. S. Steel ............. 116,667 — 24.7 0 52,439 13 others ............... 67,715 — 22.6 1 Total ........- .............. 140,284 134,382 — 23.9 1 107,510 Stores, Mail Order 93,313 + 15.2 10 4,163 Sugar 192* 5 Textiles, C lothin g . 17,888 14,671 + 21.9 10 67,540 T o b a c c o ... .................. 62,325 + 8.4 9 199,485 Ifiscellaneous .......... 191,107 + 4.4 41 •Loss — 2.0 123 4 0 n 8 9 0 7 7 6 14 1 0 1 12 13 3 1 7 1 31 113 THE MONTHLY BUSINESS REVIEW steels, nine out of ten mining concerns, 14 out o f 17 oils, and eight out of eleven equipments. As far as earnings were concerned, the year 1927 was one of very marked irregularity as between d if ferent industries rather than one of a slight but general decline. MANUFACTURING, MINING Iron and Steel Steel production came back in January with sufficient impetus not only to at tain the highest monthly ingot total and daily rate since last May but also to forge con siderably ahead of last January. The improvement was continuing into February, though at a slower rate, but the day-to-day evidence indicated an approximation of last February’s rate. A year ago, it will be recol lected, the seasonal upturn in the first quarter culminated in an all-time ingot record in March; up to mid-Feb ruary, this year was ahead of last year. PiS iron production also revived in January, though to a lesser degree. The daily rate, developing the first increase since last April, was the best since September. The net gain of sixteen active blast furnaces more than neutralized the loss in furnace capacity in the entire last quarter. Because many furnaces came in about the middle of January, the full force of the gain was not reflected in the January statistics. Despite these marked accessions in production and a distinctly stronger tone in prices, the iron and steel sit uation has continued spotty. The lion’s share o f the betterment has fallen to the producers o f heavy finished steel, particularly in the Chicago district. In the Mahon ing valley operating rates have been fluctuating weekly, due largely to the failure of automotive specifications to develop expected expansion. In the Pittsburgh district proper, the gains have exceeded those at Youngstown, being on a parity with Eastern Pennsylvania but falling below Chicago. Asking prices on most finished steel products are higher but will not be reflected in earnings this quarter. Contract plates, shapes and bars have been moving at $1.80 (Pittsburgh) with fresh business, which has been small on account of heavy contracting, at $1.85. Most black sheets this quarter have been shipped at $2.80 (Pittsburgh) or less, blue annealed at $2.00 to $2.10, galvanized at $3.65 and autobody at $4.00, although new second quarter levels are $2.00 to $3.00 per ton higher. Hot and cold rolled strip have been advanced $2.00 fo r thew second quarter. Scrap prices have eased off, follow ing an upswing i» January. Foundry and malleable pig iron have been moving at $17.25, Valley, and $18.00, Cleveland furnace, with ship ments heavy to automotive foundries. Several Valley furnaces are asking 25 cents more per ton. Sales at Cleveland were running over 20,000 tons a week in February—a high mark for mid-quarter. Beehive fu r nace coke has been fluctuating within narrow limits, most spot sales being priced at about $2.75. In point of daily rate, January ingots totaled 152,304 tons, compared with 121,167 tons in December and 144,611 tons last January. The increase of 31,137 tons in the daily rate has never been equaled in any one month. A year ago ingot output increased from 144,611 tons in January to 157,557 tons in February to the record of 166,633 tons in March. The January total was 3,959,904 tons, or at an annual indicated rate o f 47,400,000 tons. Pig iron attained a daily rate in January o f 92,113 tons, compared with 87,039 in December and 100,043 in Jan uary, 1927, and a total o f 2,855,515 tons fo r the month. Rising prices pushed the Iron Trade Review composite o f fourteen leading iron and steel products up to $35.57 in February, compared with $35.27 in January and $36.97 last February. Coal There is very little about the present state o f the soft coal industry in this District to stir up enthusiasm. A t the time of year when demand is ordinarily strong, it is found that production is slack, stocks are still high, and consumers are indifferent. A month ago conditions ap peared to be a trifle brighter, but with the return of unseasonably warm weather during late January and the first half o f February, the coal markets have again re lapsed into a state o f depression. Thus the Coal Age average price of bituminous coal for January (spot, mine) was only $1.85, a drop o f 50 cents from the same month a year ago and o f 14 cents from the 1927 average. Commercial stocks have declined almost without inter ruption since the record high of April, 1927, according to the latest report of the Bureau of Mines. The decrease has not been as heavy as anticipated in some quarters, how ever, and stocks in January were still greater than at any time during 1924, 1925, or 1926. The industrial re action and the warm winter have combined to prevent greater inroads upon stock piles. Production in January' and the first part of February held up fairly well in comparison with the declining trend exhibited by form er years during that period, but the 1928 curve is still behind any of the preceding four years. The daily average output has been fluctuating between 1,600,000 and 1,700,000 tons fo r several weeks. Little, if any, improvement is visible in the Ohio union fields. Ne gotiations have recently been held looking toward con solidation o f a considerable number of mines in West Virginia. Rubber and Tires The most important development in this industry during February was the sudden drop in crude rubber prices. It may be recalled that crude fluctuated within rather narrow limits during much of 1927, generally somewhere between 35 and 40 cents a pound. Toward the end of the year a noticeable advance took place which brought quotations from 35 cents in mid-October to 41 cents at the opening of 1928, this rise being connected with British efforts to tighten the provisions o f the Stevenson Restriction Act. Early in February, however, the mar ket became unsettled following the appointment by the British prime minister o f a committee to investigate the Stevenson A ct and report as to whether or not it should be continued. Crude rubber thereafter fell rapidly from 38 cents a pound on February 3 to slightly over 29 cents on the 29tn. Uncertainty as to the future o f re striction, the increasing importance o f non-British pro duction, and large stocks on hand have contributed to the price decline. No great change has occurred in the local tire situa 4 THE MONTHLY BUSINESS REVIEW tion since a month ago. The demand for tires as original equipment has improved along with larger automobile output. Sales are normal fo r this time o f year. The year 1927 established a new high mark fo r tire production in the United States. According to the re port o f the Rubber Association o f America pneumatic tire output aggregated 48,329,311, an increase o f 2,225,000 over 1926, the previous record year. Shipments also reached a new high in 1927, amounting to 48,044,414, a gttin of 3,791,000 over 1926. Balloon casings finally ex ceeded the old high pressure cords in both production and shipments. Paint A rather marked pick-up in business is reported by Fourth District paint and varnish manufacturers, follow ing a quiet December. The upturn became noticeable in Jan uary and has continued in February. One producer states that January business was 40 per cent greater than a year ago. Part o f the general increase in busi ness is no doubt due to seasonal factors, but these hardly account fo r all o f it. Household paints are doing well and larger automobile production has brought a better demand from that quar ter. Varnish business is ahead o f last year in most cases. Competition is very keen. Clothing Conditions in the manufacturing end o f the clothing industry in this District are mixed, with the prevailing trend o f business upward. Retail clothing sales in January were fairly good, and reporting wholesale dry goods houses experienced a gain in sales over the same month in the preceding year fo r the first time since last August and fo r the third time in two years. The increase in wholesale sales, however, was limited to less than half o f the reporting concerns. Raw wool prices have risen further, and silk is also higher. Advance Spring business in men’s clothing has been somewhat disappointing to manufacturers. Buying of overcoats has been restricted on account o f the warm weather. Knitted outerwear makers are doing a heavy volume o f business, considerably ahead o f last year, and retail sales are very encouraging. A more optimistic feeling is also in evidence among women’s wear manu facturers. Sales for 1928 to date o f one large house are approximately 20 per cent ahead of the same period in 1927, and a real improvement in forward orders has taken place in the last few weeks. Collections, how ever, are slow. Prospects fo r the men’s underwear trade are stated to be poor. Cotton ribs, the basic material, were marked up in December in accordance with the rise in cotton, but demand was slack and later quotations were reduced twice. These price fluctuations, combined with the existing uncertainty with regard to the price situation, have tem porarily demoralized the market fo r cotton ribs; buyers are holding off await ing the stabilization of prices, and orders have conse quently been very light. Fourteen wholesale dry goods houses in the Fourth District showed a 3.9 per cent gain in sales in Janu ary over the preceding year. As previously pointed out, however, the gain was confined to a few firms. Sales were 13 per cent less than in December. Stocks w ere 16.6 per cent larger on January 31 than a year ago. January retail sales in the ready-to-wear lines o f Fourth District department stores were about equally divided as to gains and losses. Men’s clothing was o ff 0.1 per cent from last year, men’s furnishings 0.4 p e r cent, and boys’ wear 3.6 per cent, but hats and caps were up 13.8 per cent. Women's coats and dresses show ed declines of 6.9 and 4.6 per cent, respectively; on th e other hand, misses’ coats and suits increased 16.9 per cent; misses’ dresses, 9.1; girls’ wear, 1.5; sp orts wear, 28.6; and house dresses, 6.1 per cent. Fur sales were 13.3 per cent less than a year ago. Some improvement in the shoe line took place in January and February from the standpoint o f manufacturers and retailers, but wholesale business was poor. Shoes Cincinnati manufacturers report a healthy gain in o r ders in anticipation o f the Easter trade. Hide and leather prices were shaded slightly in February, but are still very much higher than a year ago. B uyers have been coming into the market and doing business a t the higher prices, and reports indicate a tendency upon the part of retailers to raise shoe prices as old stocks are used up. January production o f shoes in 32 F ourth District factories gained 28 per cent over December, th is increase apparently being greater than seasonal. Janu ary output was also larger than that o f the same m onth in 1927. Sales o f reporting wholesale shoe firms in the F ourth District in January were 31.7 per cent less than a year ago and 51.4 per cent less than in December. R etail sales, however, showed up fairly well in January. P r e liminary figures from 40 department stores in the District indicate a gain o f 2.8 per cent over last year in women’s shoes and o f 3.2 per cent in children’s shoes, but a loss o f 6.5 per cent in the men’s and boys’ department. AGRICULTURE The report o f the United States Department o f A g r i. culture o f the livestock on farm s, as o f January 1, 1925 shows that there are more sheep and hogs, but fewer cattle and horses than a year ago. From reports r e ceived, it appears that there are about the same n um . ber o f animals on the farms but the total value o f th e stock has increased about $500,000,000. The number o f cattle in the Fourth District showed an increase in spite o f the fa ct that the country as a w hole experienced a falling-off of 2 per cent from 1927. The gain in Ohio was estimated at 1 per cent, Pennsylvania 3 per cent, and Kentucky 5 per cent. a Favorable prices two or three years ago stimulated hog production o f the entire country, so that on Janu ary 1, 1928, there were 8.4 per cent more hogs on farm than on January 1, 1927. This increase has been reflected in the value o f the swine and has resulted in a fallin g off in pork prices. The total value on January 1, 1928 was estimated at $709,217,000 as compared with $ 8 6 8 1 842,000 a year earlier. The increase o f hogs in Ohio 5 THE MONTHLY BUSINESS REVIEW was 4 per cent, Kentucky 12 per cent, and Pennsylvania 15 per cent over the preceding year. The number of sheep in the United States has in creased 65 per cent in the past year. Sheep in Ohio in creased 5 per cent, the number on farms being estimated at 2,244,000 as compared with 2,133,000 on January 1, 1927. This gain has not affected the price per head, the average being $8.90 fo r 1928 as compared with $8.50 for 1927. The number o f horses has decreased about 4 per cent in the entire country, or about 600,000. The January 1 estimate for Ohio is 542,000, a decrease o f 5 per cent from January, 1927, and the lowest number in Ohio for 60 years. The decrease in Kentucky was about 3 per cent. Prices per head have continued to increase. Canners in the District report a con siderable improvement in their busi ness. Orders have improved, and stocks on hand have decreased to a point below that reached for the last several years. Prices have advanced some during the past 60 days, and those named fo r future delivery show slight advances. more than offset by heavy declines in such important cities as Akron (75 per cent decrease) Cincinnati (41 per cent) Erie (54 per cent) and Pittsburgh (64 per cent). A somewhat better feeling is exhibited by several lum ber manufacturers and dealers in this territory. Buyers are showing a little more interest, and prices o f both softwoods and hardwoods have strengthened. There is now a fair amount o f residential construction going on, aided by the open winter, and sales of oak flooring and other residential building lumber have lately been reasonably satisfactory. But the industry was so quiet during the last part of 1927 that even with the recent slight improvement, activity in the trade in general is only very moderate. Building Operations Canning Tobacco As the burley selling season in Ken tucky draws to a close, prices being received by growers at auction houses are still relatively high. As usual in the latter part o f the selling season, a good deal o f poor-quality tobacco is being received on the auction floors, and the lower prices paid for such leaf naturally tends to bring the general average down somewhat. Eliminating this factor, however, it is apparent that quotations have held up well during the entire selling period, being fa r ahead o f last year's low levels. No definite information with regard to 1928 burley tobacco acreage in Kentucky is yet available, but it is reported that farmers at present feel inclined to plant a larger acreage this year, as a result of the encouraging returns from the 1927 crop. BUILDING Construction in January in the Fourth District com pared very unfavorably with the country as a whole. Total contracts awarded were approximately 45 per cent under a year ago in this District, while they were 11 per cent larger in the United States (37 Eastern states). Contemplated projects on February 1, however, exceeded last year's figure. Residential contracts awarded in the Fourth District decreased 6 per cent from January, 1927. As fo r building permits, 27 cities in this District showed a loss o f 13.9 per cent in January from a year ago, while 171 cities in the country reporting to Bradstreet’s showed a gain of 2.6 per cent. A s between different cities in the District, there were some very wide variations in January building permits. Lakewood gained 485 per cent over a year ago; Barber ton, 304 per cent; and Canton, Cleveland Heights, East Cleveland, Toledo, and Youngstown all increased more than 100 per cent. An increase o f 76 per cent occur red in Cleveland, and ten cities reported lesser increases, so that permits in 18 out of the 27 centers were actually k* larger volume than a year ago. But all this was January. 1928 J an uary, 1928 657,088 23,030 24,226 679,173 1,109,640 2,556,450 January, 1927 2,584,432 55,020 6,000 206,195 1,878,145 1,451,626 Per cent change — 74.6 — 58.1 + 30 3 .8 + 180.9 — 40.9 + 76.1 C ovington , K y. ............ .......... .............. D a y t o n .............................................. ... ................................. — E rie, Pa. .................. ~.......... .............. H am ilton L exin gton, Ky. ....... ............ ............— L im a ..........................................- ....... — N ew ark __________ ______ ______ ____ Pittsburgh, Pa. ................................... Springfield ............................................. Toledo .......................— .......... - ........ W heeling, W . V a ......... ........ .............. You ngstow n —........................... — ...... 406,685 132,290 97,840 80,500 199,325 147,970 62,048 412,500 986,400 66,400 578,998 110,040 68,625 61,685 19.215 16,725 1,225,109 86,565 1,304,256 78,179 644,190 194,100 62,130 72,695 76,500 34,047 200,020 57,725 528,500 1,009,300 63.400 399,490 236,636 50,274 170,575 14,374 13,900 8,368,203 57,850 557,757 76,674 226,350 + 10 9 .5 + 112.9 + 34.6 + 5.2 + 48 5 .4 — 26.0 + 7.5 — 21.2 — 2.3 + 24.3 + 44.$ — 53.5 + 36.5 — 63.8 + 33.7 + 20.3 — 63.6 + 49.6 + 133.8 + 2.0 + 18 4 .6 ........... ...................— ................. 11,735,152 13,636,916 — 13.9 A kron ....... .............. .......... .......... .... Ashtabula __________ ____ __________ B arberton ....... ................ ............ C a n t o n _________ ___ ____ ___________ C incinnati — .................... .............. ...... Cleveland - ____ _______________ ___ _ C leveland suburbs Cleveland H eights ...................... East Cleveland ................ ......— .__ E uclid ............................................... . Garfield H eights _____________ __ L akew ood ................. ...................... Parm a ....... .................... .......... .......... R ocky R iver ............................. ..... Shaker H eights ...................... .......... Total TRADE Retail Trade Sales o f 60 department stores in the fou rth District increased 0.2 per cent in January as compared with last year. The majority of reporting centers participated in this gain, the largest increases being in Toledo (4.6 per cent) and Columbus (3.6). Akron, Wheeling, and “ other cities” experienced losses o f 6.7, 5.8, and 4.2 per cent re spectively. Stocks on hand on January 31 were about the same as a year ago, but were 6.8 per cent less than a month previously. The monthly stock turnover rate for the District was .25, or exactly four times a year, as com pared with .24 in January o f 1927. Total credit sales amounted to 61 per cent of the total for the 44 stores reporting this information. Instalment sales o f 14 reporting firms amounted to 5.7 per cent of the total. Accounts receivable on January 31 were 5.6 per cent larger than a year ago, and January collections were up 4.5 per cent. Collections during January amounted to 39.9 per cent o f accounts receivable on December 31. Turning to individual departments, sales o f all piece goods were lower than last year and several o f the readyto-wear accessories also showed declines. Clothing de- o THE MONTHLY BUSINESS REVIEW partments were irregular, but house furnishings and small wares were mostly up. Percentage changes in the ten departments doing the largest business in January were as follows (in order o f sales): % change from January, 1927 W om en’s D r ^ s -s .................................................................................. — 4.6 M en’s C lothing ........................................................................................ — 0.1 W om en’s Coats ....................................... ................................................ — 6.9 M en's F urnishings ................................................................................ — 0.4 Silks and Velvets .................................................................................. — 7.1 W om en's Shoes ........................................................................................ “hl-T F urniture ................................................................................................. 4*8.8 H osiery ....................................................................................................... -f9*S Dom estic F loor Coverings ............................................................... -f- 8.5 Linens ....................................................................................................... — 9.0 Wholesale Trade Two reporting wholesale lines in the Fourth District showed gains in sales in January over the corresponding period o f 1927. Wholesale dry goods registered a gain fo r the month o f 3.9 per cent, fo r the first time since August, 1927. The combined sales of forty-nine whole sale grocery firms showed a gain o f 0.5 per cent in Jan uary as compared with January, 1927. Sales o f the other three reporting wholesale lines were in smaller volume in January than a year ago. Shoes declined 31.7 per cent; hardware 8.1, and drugs, 5.3 per cent. All five lines reported smaller sales in January than in December. Accounts receivable decreased in three lines, dry goods showing a loss o f 5.8 per cent, hardware 2.4, and shoes 10.7 per cent. Groceries and drug3 reported gains of 2.5 and 4.6 per cent respectively. Grocery and drug collections in January increased 12.7 and 6.4 per cent respectively over January, 1927, while dry goods decreased 8.8 per cent, hardware 8.3 and shoes 1.8 per cen t Departmental Sales, 1924-1927 The table below shows the increase or decrease in department store sales, ac cording to various classes o f merchan dise, from 1924 through 1927. The index numbers are based on the sales figures o f 53 leading retail houses in the Fourth District, including thirty-nine department stores, twelve wearing apparel firms, one furniture house, and one shoe store. Departmental sales for each of these 53 firms are available for each month throughout the four-year period, so that the figures are strictly comparable. The table furnishes some interesting evidences of the general trend of public buying during the last few years. Style changes, for instance, have hit certain de partments very hard— such as women’s suits, whose sales in 1927 were only one-third o f the 1924 total. Another example of shifting styles is found in the sales of sweaters and skirts. During 1925 and 1926, these two departments declined very rapidly, but the increasing demand for sports’ wear in 1927 brought a very distinct upturn in the 1927 sales of both departments. The tendency to purchase ready-made clothing i3 seen in the steady growth of most of the ready-to-wear group, such as juniors' wear, women’s dresses, aprons and house dresses, misses' ready-to-wear, and furs. On the other hand, the yard goods departments show marked decreases in sales, not all of which can be attributed to lower raw material prices. Other piece goods, such as linens and domestics, have also declined. In general, the clothing departments have done rather better than other types o f goods. Sales o f household articles in 1927 were quite generally below the 1924 level, this applying to china and g lass ware, house furnishings, floor coverings, and silverware. Furniture has just about held up to 1924, while draperies, lamps, and shades have gained consistently. The ready-to-wear accessory departments show up very well— in fact, as a group they have done better than an y other. The greatest increase of all has taken place in women's hosiery, whose sales in 1927 were 36 per cent larger than in 1924. Substantial gains have also o c curred in gloves, knit underwear, muslin and silk under wear, infants’ wear, leather goods, shoes, and handker chiefs. Millinery sales have held very close to the 1924 level. Sales o f men’s furnishings and boys’ wear have grow n noticeably, but those of men’s clothing have undergone a slump since 1925. Men’s shoe sales in 1927 show a 10 per cent gain over 1924. Several o f the small ware and miscellaneous depart ments have done well, particularly jewelry (124.0 in 1927) and books and stationery (118.7). There appears to be no well-defined tendency in this group, however, as sales in a number o f other miscellaneous lines, such as toy s and umbrellas, have fallen off. Index Number o f Sales by Departments o f Stores in the Fourth District 1927 Infants* Jew elry A prons, Leather J u niors' House Goods Books, Stationery K nit U nderw ear . W om en ’s Shoes ... W om en ’ s Dresses M en's Furnishings B oys’ W ear ........... Gloves ..................... P etticoats, Slips . M en’s Shoes ......... M uslin and Silk t M isses’ Ready-to-'W M usical Instrum en Draperies, Lamps, Shades T oilet A rticles, Di ____ N eckw ear W om en’s Coats F urnitu re .......... M illinery T oys, Sport Goods Silks and Velvets China, Glassware . Patterns ............. .... Linens ..................... 118.7 „ ,,, , ,. ... ... ... ... ... F loor Coverings ............................... Dom estics ..................................... — ... Silverw are .... - ...............- .....- .......... M en’s C lothing ............................. Corsets .................... - ........ - ............ A r t N eedlew ork ............................. H ouse Furnishings .............. - ........ Sweaters ............................................ Cotton Dress Goods ................. — Laces ................ - ..............................— W om en ’s Skirts ................ .............. .„ W oolen Dress Goods ..... .............. ... W aists, Blouses ..........................— ■ W om en ’s Suits ........................................... 115.0 114.3 112.7 111.1 109.7 109.6 109.5 109.4 108.6 107.8 105.2 105.2 102.6 100.8 100.2 99.9 99.5 98.1 97.9 96.5 95.6 95.4 94.7 93.9 92.9 91.0 90.6 90.6 99.6 86.5 85.1 81.9 72.7 70.1 62.7 53.8 45.6 34.1 94.1 1926 121.5 134.9 117.1 102.9 107.3 110.6 115.9 120.3 99.2 109.4 118.1 114.0 111.2 112.5 111.3 110.6 107.0 106.2 105.9 103.7 111.6 104.8 104.0 105.9 112.7 98.0 102.1 98.7 103.5 101.7 100.5 108.5 97.4 98.6 100.1 92.1 94.6 102.8 87.9 97,1 91.4 91.5 89.8 71.1 79.9 74.1 57.7 65.8 88.4 28.8 53 Retail 1925 109.7 110.3 107.1 93.2 100.3 99.6 111.3 109.2 101.1 100.6 106.1 105.1 103.0 105.3 104.6 98.7 100.9 106.6 103.2 102.4 112.1 102.4 104.8 103.8 106.7 101.0 99.2 98.0 101.0 104.9 100.6 115.3 99.7 102.9 98.6 91.3 95.7 97.8 90.9 100.4 96.5 97.9 97.3 79.6 90.1 88.6 73.5 83.3 57.5 82.1 1924 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 loo.t 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics (All figures are for Fourth District unless otherwise specified) Bank Debits (24 cities) Millions of dollars Deposits («nd of month) Ohio (41 oanks) Thousands of dollars Western Pennsylvania (27 banks) Total (68 banks) Commercial Failures—Number Actual Number Thousands of dollars _ “ 44 — Liabilities Postal Receipts—9 cities Sales—Life Insurance—Ohio and Pa. ** —-Dept. Stores— (60 firms) —Wholesale Groceries —(49 firms) — 44 Dry Goods— (14 firms) — 4‘ Hardware — (16 firms) . Drugs — (14 firms) Building Permits, Valuation—27 cities Building Contracts—Total, 4th District _ f . 44 — Residental, 4th District Production —Pig Iron, L\ S. Thousands of tons ;; —Steel Inpots, U, S. —Automobiles, U. S. Actual Number Passenger Cars Trucks — Bituminous Coal. 4th Dist. Thousands of tons 44 44 barrels 4 —Cement: Ohio, W. Va.,Wn. Pa — Electric Power: Ohio, ra., Ky. Millions of k. w. hours Thousands of barrels —Petroleum: Ohio. Pa., Ky. 44 44 pairs —Shoes, 4th District . —Tires, U. S. 44 44 casings Bituminous Coal Shipments (from LaVe Erie ports) Iron Ore Receipts (at Lake trie ports) 'December •Figures confidential % Jan. 1928 3,435 Tan. 1927 3,416 change + 0.6 730,607 268,530 999.137 269 5,995 3.002 86.060 20,738 6.189 1,934 1,605 1,738 11,735 26.403 12,803 2,841 3,960 675.737 247,698 923,435 220 3,049 3,054 85,941 20,702 6,156 1,861 1.746 1,835 13,637 44,634 13,622 3.100 3,760 + 8.1 + 8.4 + 8.2 +22.3 +96.6 — 1.7 + 0.1 + 0.2 + 0.5 + 3.9 — 8.1 — 5.3 — 13.9 —40.8 — 6.0 — 8.4 + 5.3 199.032 26.007 14,025* 755 1,218* 1,900* 199.650 39.276 22,151* 563 1,173* 1,890* t 3,556* — 0.3 — 33.8 — 36.7 +34.1 + 3.8 + 0.5 — 17.5* — 4.2 5 3.405* Index Numbers of Trade in the Fourth Federal Reserve District (Average Monthly Sa!es for the Five-Year Period 1919-1923 -100) fan. Jan. Jan. Jan. Jan. 724 1927 1925 1926 1928 Department Stores (50)*.............. 9S 91 92 93 93 Wholesale Drugs (14)*................. 109 109 no 116 111 Wholesale Dry Goods (13)*......... 92 57 59 70 65 Wholesale Groceries (48)*............. 69 84 70 80 74 Wholesale Hardware (15)*........... 95 94 79 86 86 Wholesale Shoes (5)*.................. 46 50 33 58 48 Wholesale All C95)*....................... 8* 81 77 73 72 Chain Drugs (3)*t........................ 91 97 97 98 84 ♦Number of firms. fPer individual unit operated. Debits to Individual Accounts Akron.................. Butler, Pa............ Canton................ Cincinnati.......... Cleveland............ Columbus............ Cdnncllsvllle, Pa.. Dayton................ Erie. Pa............. Greensbure, Pa... Homestead, Pa... Lexington, Ky__ Lima................... Lorain................. Middletown.. . . . Oil City, Pa....... Pittsburgh, Pa__ Springfield........... Steubenville....... Toledo............. Warren.......... Wheeling, WVa .! Youngstown___ Zanesville.......... T o u l............. (In thousands of dollars) 5 weeks 1928 to % ending change date (Dec. Feb. 22, 28 - Feb. 1928 22) 111.084 218.443 + 18.5 10.904 21,919 — 7.6 51,003 4* 6.2 101.196 523,117 +24.9 1,004.600 863,409 1.812.267 — 0.1 178.711 353.191 4- 1.9 4.155 —26.2 7,894 97.147 4- 1.2 198.281 36.907 68,560 — 3.5 22.299 44.799 — 10 0 4.317 — 8.6 8.032 40.769 + 5.1 71.95S 15,400 + 4.7 32.632 6.200 + 7.0 11.640 13.955 4-14.4 27.975 17,685 — 9.9 32.112 1,089.630 — 13.5 2,013.616 22.666 — 6.0 46,128 11.453 4* 2.3 22.126 282.097 4-25.5 554,762 14.504 — 6.4 27,348 52.298 4- 8 .0 99.532 70.883 — 11.6 143.920 13,752 26,287 4- 3.3 3,554,345 + 0.1 6,949,215 1927 to date (Dec. 29 - Feb. 23) 180.594 24,019 9S.476 827,138 1,728,203 360.609 11.015 195,206 71,852 45.492 8,662 68.S97 31,503 11,100 23,022 33,631 2,158.520 48,260 22,152 461,403 27.836 97.007 158.118 26,124 6,718,539 % change 4-21.0 — 8.7 4- 2.8 4-21.5 4- 4.9 — 2.1 —28.3 4- 1.6 — 4.6 — 1.5 — 7.3 4- 4.9 + 3.6 4- 4.9 4*21.5 — 4.5 — 6.7 — 1.4 — 0.1 +20.2 — 1.8 4- 2.6 — 9.0 + 0.6 + 3.4 Retail and Wholesale Trade (1928 compared with 1927) Percentage Increase or Decrease SALES STOCKS ACCOUNTS Jan.Jan.RECEIVABLE Jan. Jan. Jan.- Jan. DEPARTMENT STORKS (60) — 6.7 Akron......................................... Cincinnati.................................. 4* 0.2 Cleveland................................... 4- 0 .8 Columbus................................... + 3.6 Pittsburgh.................................. 4- 0.5 Toledo........................................ 4- 4.6 — 5.8 Wheeling.................................... Youngstown............................... + 1.2 Other Cities............................... — 4.2 District....................................... 4- 0.2 WEARING APPARICL (19) Cincinnati.................................. — 2.6 Cleveland................................... — 15.6 Other Cities............................... — 7.9 District...................................... — 10.6 FURNITURE Cincinnati.................................. + 0.7 Cleveland................................... — 7.3 Columbus................................... — 0.4 Dayton....................................... +15.3 Toledo........................................ + 4.9 Other Cities............................... — 14.4 District...................................... — 0.1 CHAIN STORE* Drugs— District (3)................... — 13.0 Groceries— District (5)............. + 1.4 WHOLESALE GROCERIES (49) Akron......................................... +14.6 Cincinnati.................................. + 8.4 Cleveland................................... — 4.6 Erie............................................ — 3.7 Pittsburgh.................................. + 5.2 Toledo........................................ — 1.3 Other Cities............................... + 0.8 District...................................... + 0.5 WHOLESALE DRY GOODS (14) + 3.9 WHOLESALE DRUGS (14)... — 5.3 WHOLESALE HARDWARE (16) — 8.1 WHOLESALE SHOES ( 5 ) . . . . — 31.7 ♦Sales per individual unit operated. rated. + 1.8 4- 4.2 + 5.6 — 1.5 — 6.4 + 3.7 — 18.1 — 1.3 — 0.5 — 0.8 +11.6 + 0.4 + ‘ i:9 +17.4 — 1.4 4-14.4 + 8.2 — 6.4 + 3.5 + — + + + ‘ 6!s + 5.9 3.2 0.4 5.6 2.1 — 6.0 — 5.5 + 2.3 — 1.6 + 6.6 — 13.7 — 1.8 ......... — 4.6 4-16.6 — 12.7 + 2:5 — 5.8 + 4.6 — 2.4 —10.7 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions (By the Federal Reserve Board) Index number o f production o f m anufactures and m inerals com bined adjusted fo r seasonal variations (1923-1925 = 100). L atest figu re: January— 105. PW CM T percm -------1123 1251------Misceflafieou* Total RAILR O AD FREIGH T CAR LOADINGS 1924 1925 192a 50 Cars o f revenue freigh t loaded as reported by the A m erican R ailw ay A ssociation. Index numbers adjusted fo r seasonal variations (1923-1925 = 100). Latest figures— J an u a ry ; total— 100, m iscellaneous— 106. MONEY f*ATES IN Nl[W YORK \\\ J vY / Lf~J R p1 111 II! ~cict PjpprPlrtf BankDiscount once fiats | 1_____— J 1 W eekly rates in N ew Y ork m oney m arket; com m ercial paper rate on 4-to~6 m onths paper and acceptance rate on 90«day paper. a iLu rm o tqo um s 2 ----------------- anilOHSOfDOUAR5 2 1825 1924 1925 1928 1927 Monthly averages of dally figures for 12 Federal Reserve Banks. Latest figures are http://fraser.stlouisfed.org/ averages of first 22 days in February. Federal Reserve Bank of St. Louis Industrial production and shipments o f commodities by railroads in creased considerably in January from the low point reached at the end o f 1927. The general level o f wholesale commodity prices showed a slight decline. Production The increase of 6 per cent in industrial production from December to January reflected a larger output o f manufactures, particularly o f iron and steel and automobiles. Daily average production o f steel ingots in creased by over 25 per cent in January— the largest monthly increase since 1924. Buying o f steel products by the railroads, and by the automobile and construction industries was also active in January, and notwithstanding the large volume o f production and shipments, unfilled orders showed an increase during the month. Since the first o f February production o f steel products has continued active with new orders and shipments m ore nearly in balance than in previous months. Automobile production, which in December was in smallest volume since 1922, increased considerably in January and was only slightly smaller than in the same month o f the preced ing year. Cotton consumption showed about the usual seasonal increase in January following substantial curtailment in December and the woolen and silk industries were somewhat more active than in December. P ro duction of minerals, after adjustment fo r customary seasonal changes, was in practically the same volume in January as in December. Building con tracts awarded in January exceeded those for the corresponding month of last year and awards during the first half of February were in p ra c tical! y the same volume as a year ago. Trade Sales o f department stores showed more than the usual seasonal decline in January from the high levels reached in December and averaged slightly smaller than in January o f last year. Sales o f mail order houses, on the other hand, were about 6 per cent larger than a year ago. W hole sale trade in nine leading lines averaged larger than in January o f last year. Stocks of groceries and hardware carried by wholesale firms w ere smaller than a year ago, but reports in other lines indicated that stocks were somewhat larger. Freight car loadings fo r all groups of commodities were larger in January than in December— the increase being particularly large fo r miscellaneous commodities. Compared with January o f last year, how ever, loadings of all classes o f commodities, except livestock, were smaller. Prices The Bureau o f Labor Statistics index number of wholesale comm odity prices declined from 96.8 per cent o f the 1926 average in December to 96.3 per cent in January. Prices o f farm and hide and leather products increased, while prices of meats and dairy products, textiles, fuels, nonferrous metals, and rubber declined. During the first two weeks o f Febru ary, prices o f grains, cotton, silk, and wool advanced, while those o f cattle, sugar, and rubber declined. Bank Credit For the four weeks ending February 15 total loans and investments o f member banks in leading cities showed a decline o f more than $200,000,000, the decline being almost entirely in loans on securities. From the peak at the turn of the year this class o f loans decreased by nearly $460,000,000. Loans fo r commercial purposes, after a further decline in January, showed a seasonal increase in the first two weeks o f February. The de cline in the volume o f loans since the first o f the year has been accompanied by a corresponding decline in net demand deposits, while time deposits have continued to increase. A t the reserve banks the total volume o f member bank borrowing d e clined seasonally during the opening weeks o f the year and reached a low point on January 25, but increased by about $70,000,000 between that date and February 21. This increase in discounts accompanied smaller reductions in the reserve banks' holdings of United States securities and acceptances, and the total volume o f reserve bank credit in use showed an increase for the fou r weeks. During the four weeks ending February 21 a firmer tendency in the money market was indicated by increased rates on call and time loans and by a further increase from 3% per cent to 3 ^ per cent in the rate on 90-day bankers' acceptances. Between January 25 and February 21 d is count rates at eleven Federal reserve banks were advanced from 314 4 per cent.
@FedFRASER