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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 15 Cleveland, Ohio, May 1, 1933 A spurt in industrial operations and general business developed in this district and most parts o f the country in the first three weeks of April at a greater than sea sonal rate. At the end of that time the advance had been extensive enough so that the drop in operations in March at the time of the bank holiday was more than overcome. Factors contributing to the rise were numerous and varied. The recent advance in the combined commodity price index has been very moderate compared with the drop in the past four years, judging by the Bureau o f Labor’s compilation which is shown on the chart at the bottom of the page. But the upward movement in some of the various groups has been quite sharp. Grain prices have risen sensationally, thus causing the index of farm prices to advance sharply from the low level touched earlier this year. Pood prices also have improved and prices of other raw materials including nonferrous metals and textiles have been advanced. The failure of some banking institutions to reopen as yet was a retarding factor to several communities, par ticularly Cleveland and northern industrial towns, but in the main the situation has been met with considerable fortitude. W hile no information regarding employment in April is yet available, reports indicate a decided improvement in most lines in that month from the low levels o f March, only part of which was seasonal. The most important industry in this district was the one which showed greatest improvement follow ing the bank holiday. Steel operations about doubled in the six latest weeks and production at some local steel cen ters was at a rate considerably above the average for the entire country. Increased automobile parts’ and ma terials’ orders, some demand for pipe and an expansion in miscellaneous steel requirements were responsible for the rise in output. Prices o f raw materials have increased slightly, but finished goods’ prices remain firm. Tire demand improved in April and operations at local factories were speeded up. Sale o f glassware was much improved, though demand for plate glass was limited except from the automobile industry. Paint sales were larger in April than in March and demand for boxboard and containers increased. Shoe production in March was 22 per cent ahead of last year and was greater than in any corresponding No. 5 month since 1927. In the first quarter output w ai up 13 per cent from 1932. The number of automobiles manufactured in March exceeded output in the same month last year, the first time since December, 1930, and a further increase was indicated in April by the weekly production estimates. The agricultural situation, so far as this district is concerned, was somewhat brighter in late April in view of the rise in grain prices. The April 1 condition of winter wheat in this district was about equal to the av erage of past years, whereas in the entire country it was the lowest on record. Because of an increase in acre age sown, the fourth district wheat crop is expected to be about as large as was harvested in 1932. FINANCIAL. In the month ended April 26 there were few changes in the financial situation in this district. In comparison with developments o f March they were quite unimportant. As conditions warranted, additional banks were granted licenses to resume operations, and on the latest date all but 153 of the 633 member banks in this district had been licensed and only 164 state nonmember banks were closed or operating on a restricted basis. Total deposits o f these 317 unlicensed institutions on December 31, 1932, the la test available from the condition reports, were approxi mately $659,000,000, but this figure was materially re- s THE MONTHLY BUSINESS REVIEW duced by the large withdrawals which occurred in January and February. Deposits of reopened banks were reported at $2,676,000,000 on December 31, 1932, Conservators for the m ajority of these unlicensed banks have been appointed and plans for the reopening or liquidation of institutions under their jurisdiction are taking definite form. Already several banks have ar ranged their affairs so that licenses could be granted them to resume 100 per cent operations. Despite the fact that a large volume of deposits re main frozen in these unopened banks, debits to individual accounts at banks in 24 cities of this district in the four weeks ended April 19 amounted to $1,173,000,000, a drop o f only 2 6 per cent from the same period of 1932. For the year to April 19, the reduction was 24 per cent, a large part of which represented the decline in prices from a year ago. The number of commercial failures in March was 32.8 per cent smaller than in the same month last year and in the first quarter was down 25 per cent. Liabilities o f the defaulting concerns were up slightly in March, but were off 27 per cent in the first three months from the corresponding period o f 1932. With banks closed part of the month savings deposits at 44 selected institutions throughout the district de clined only 1.2 per cent in March, but at the close of the period savings deposits were approximately ten per cent below a year ago. At the Federal Reserve Bank of Cleveland gold re serves were rather sharply reduced, in the five weeks end ed April 26, as a result o f transfers of funds to other reserve districts, largely through check clearings, and chiefly to New York, where bankers’ balances were ex panded rapidly. The drop in gold reserves in this district was approximately $59,000,000, but gold holdings of the entire Federal Reserve System gained sharply in the pe riod, the increase being about $200,000,000. Holdings of total bills and securities of this bank were about the same in late April as in the third week of March; a drop in bills discounted for member banks be tween March 22 and April 5 and the maturing in early April of about half the bankers’ acceptances owned re duced earning assets, but an increase in discounts for member banks in the latest week caused total bills and securities to expand to $244,322,000, about the same as in late March. The volume o f Government securities held was unchanged at $176,540,000, in the five latest weeks. As deposits at member banks increased between March 22 and April 19 and money was retired from circulation, borrowings o f member banks were reduced. An increase of $11,000,000 in bills discounted for member banks in the week ended April 26 offset the decline of the earlier weeks of the month, and at $64,166,000 they compared with $70,119,000 a year ago, and $119,151,000, the high point so far this year touched on March 8. Money in circulation in this district declined at a slow but continuous rate from March 22 to April 19; currency receipts of this bank and its branches exceeded shipments in the first 25 days o f April by $20,000,000, and Federal reserve notes to the amount o f $50,000,000 were retired from circulation in the period. In the latest week there was an increase of $7,000,000 in Federal reserve notes and of $2,500,000 in Federal reserve bank notes outstand ing and on April 26 note circulation was up $59,000,000 from a year ago. Total deposits, including reserve deposits, special de posits, etc., of this bank on the latest date were only slightly lower than at the beginning o f the year, though a moderate reduction occurred in the five weeks ended April 2 6. The decline in deposits and note circulation in recent wreeks was proportionately less than the reduc tion in gold reserves, so that the reserve ratio, at 56 per cent, w^as about four points lower than in late March, but about the same as it was prior to the bank holiday. Reports from the member banks in leading cities in the latest five weeks reveal a further contraction in loans and an increase in investments, through the purchase of Government securities. Time deposits were very little changed in the period, but demand deposits increased. MANUFACTURING, MINING Iron and Steel The period March 15 to April 25 was one of noteworthy recovery for the iron and steel industry. From a low of 13% per cent of capacity in the week ended March 11, steelmaking operations in the entire country advanced, with minor fluctuations, to 25 per cent in the third week of April with a further increase being reported for the last week of the month. This doubling o f steel production in six weeks’ time was the sharpest rise o f the depression and, according to Steel, all the ground lost since Febru ary, 1932, had been regained. W hile much of the improvement occurred in April coincident with the advance in com m odity prices, there were indications that the bulge in operations was trace able to definite consumer requirements, orders for which were placed in the first half of the month. Broadening miscellaneous demands, plus a moderate in crease in automotive specifications constituted the main support o f the finished steel market. Because some mills are using semi-finished steel from stockpiles, finishing mill activity has increased to a greater extent than the 25 per cent operating rate would imply. Fourth d is trict mills, w'hich benefited materially from the bulge in automobile and miscellaneous orders, were operating at materially higher rates than a month ago. Cleveland mills in the latest week were working at 41 per cent of capacity. Operations at Pittsburgh were at about 21 per THE MONTHLY BUSINESS REVIEW cent of capacity and Youngstown mills were producing at 24 per cent. There were indications in the third week o f April that the m onth’s steel ingot output would exceed the 1,066,* 3 39 tons of January and approximate the 1,233,603 tons produced in April, 1932. The trend was similar in pig iron production, though the widespread use c f scrap steel makes pig iron a less sensitive barometer. As is usual, raw materials displayed the first signs of recovery, both in price and demand. Cleveland blast furnaces withdrew all quotations on pig iroi; below 114; Pittsburgh furnaces also stabilized at $15 for malleable and No. 2 foundry iron; Valley furnaces made $14.50 their minimum on these grades. Steel scrap prices gained 50 cents to $1 per ton in the fourth district, with one West Virginia mill purchasing 89,000 tons. In finished steel the expansion o f demand led to a more general adherence to quoted prices, with marked firmness in most sheet grades and an advance of $2 per ton in galvanized sheets. A belated adjustment in steel pipe, however, prevented indexes from recording a rise. The iron and steel composite of the magazine Steel was lowered by this decline in pipe from $28.35 in mid-March to $28.12, but it recovered to $28.18 by April 24. Historically, March production was at a daily rate of 32,812 gross tons for steel ingots or at 15.08 per cent of capacity. Pig iron was produced at a rate of 17,484 tons a day or 12.3 per cent. Both represented severe recessions from the 44,431 tons of ingots and the 19,752 tons daily of pig iron in February. In three months of 19 33 total pig iron production w^as 1,663,865 tons, con trasted with 2,899,002 tons in the corresponding months of 19 32. The thref-m onth total for steel ingots was 2,961,735 tons, against 4,308,680 tons a year ago. Coal Little change in the weekly rate of coal production occurred in March or the first half of April, though, compared with a year ago, when a decided bulge in production oc curred in March, output was off 21 per cent in this dis trict and 23 per cent in the entire country. The sharp decline from the comparatively high level of February was enough to counteract the gain from a year ago re ported for the first two months, and the amount of coal mined in the first quarter o f 1933 was 4.4 per cent smaller than in the same period of the preceding year. In the first half o f April, however, the amount of coal mined was about the same as a year ago. This is normally the dull season for local mines be cause demand for household coal is about over and the lake-shipping season is just beginning. This coupled with the extremely limited industrial demand, which however, was slightly improved in April, very adversely affected the entire soft coal industry. With most coal contracts expiring April 1, there seems to be a marked tendency for buyers to defer action on contracts until conditions become more clearly defined. It is possible for users to obtain coal shipments on short notice, at unusually low spot prices at the present time, without contracting for future delivery. Formation of the selling agencies in the various coal sections o f the district is gaining headway, though it will be some time before they are actually operating. 3 Prices of steam size coal were advanced slightly in the third week of April as industrial demand expanded, but domestic coal prices remained low. Automobiles Prior to March, 1933, automobile pro duction in no single month surpassed output in the corresponding period of the preceding year since December, 1930. In the latest month for which complete inform ation is available, out put was 118,592 cars and trucks, according to the De partment of Commerce, an increase of 1.2 per cent from March, 1932, and of 11 per cent from February. The expansion from February to March was somewhat less than seasonal, but in view o f the unusual conditions pre vailing during that period, the upturn was noteworthy. The adjusted index o f the Federal Reserve Board was 27 per cent of the 1923-25 monthly average (prelim inary) in March compared with 33 in February. The sharpness of the decline in March and the extent of the recovery late in that month and in April is shown on the accompanying chart of the Annalist’s weekly in dex of automobile production, seasonally adjusted. This index is based on Cram’s weekly estimates of production. Dropping to a low of 10.8 on March 18, marked recovery developed in the follow ing weeks and by the third week of April, the index had advanced to 39.2 per cent, output in the latest week being estimated at 43,653 units com pared with 37,273 units in the corresponding period of 1932. Expanding production schedules were a result of greater retail demand, largely seasonal though later than usual, follow ing the reopening of banks, particularly in the small-car field; in late April, according to reports, ac tivity at three small-car factories was responsible for about three-fourths of the total output. Stocks of new cars, both in hands of dealers and manu facturers, have been kept low, partly because of the un certainty of the general business situation and for financial reasons. Used car stocks also are small, accord ing to reports. Recently, output o f passenger cars has compared more favorably with preceding periods than has truck produc tion. In March factory sales of passenger cars totaled 100,545 units, compared with 91,492 units in February and 99,399 units a year ago. Truck production in March was 7.7 per cent below a year ago and in the first quar- 4 THE MONTHLY BUSINESS REVIEW ter was down 13 per cent, whereas passenger car produc tion was 2.8 per cent greater in the first three months o f 1933 than in the same period o f 1932. Releases on orders for automobile steel, parts and ma terials have been in larger volume recently, presaging a further advance in assembly schedules. This has been of particular benefit to local manufacturers. Tires Rubber According to reports, tire production in March was about 28 per cent below out put in the same month of 1932, but most of the reduction occurred in the first three weeks of the month, for, follow ing March 20, when tire prices were again reduced, the volume o f sales increased sharply and schedules were expanded. In the first half of April sales were reported to be somewhat larger than a year ago. Accompanying the price reduction, most producers stopped making their lowest grade tires so that tire in ventories of both dealer and manufacturer can now be reduced further. It is no longer necessary for dealers to carry tires of four or more grades to meet adequately retail demand. As a result o f the larger number of sales in April, production schedules were increased and the industry as a whole in the third week o f the month was operating five days a week. Employment in March was 58 per cent o f the 1926 average, a drop of two per cent from Feb ruary, and was 12 per cent below a year ago. In the preceding five years there was little change in employ ment in the rubber industry from February to March. Final February figures of the Rubber Manufacturers’ Association reveal that shipments in that month were down ten per cent from the same period of 1932 and were slightly under production. Output, however, was 39.6 per cent below a year ago, but was up 3.6 per cent compared with January. Manufacturers’ stocks on March 1 were about 20 per cent smaller than a year ago, but were up two per cent in the month. Crude rubber consumption in the entire country in March was only 18,047 tons, the lowrest since 1922. This was a drop of 16 per cent from February and of 35 per cent from March last year. In the first quarter con sumption was down 27 per cent from 1932. Imports of crude rubber in March were 34 per cent below a year ago, but at 27,879 tons, wrere up 48 per cent from Febru ary. As a result o f these changes rubber stocks increased two per cent in the period and were 17 per cent larger than on March 31, 1932. Rubber prices in April advanced to the highest levels since last autumn. At 4% cents a pound, ribbed smoked sheets were materially above a year ago when they were quoted at less than three cents a pound. The rise con tinued in the latest month despite the unfavorable crude rubber statistics. Clothing, Textiles more optimistic covery in both March and early some of which Reports from the clothing industry regarding operations in the last part of March and the first half o f April are than for some time. A pronounced re sales and operations developed in late April from the low levels o f mid-March, was seasonal prior to Easter, but also was due in part to the low level of retail stocks and the recent advance in raw material prices. The upward movement in raw materials in the past few weeks as yet has not been reflected in price advances on finished goods, though prices o f cotton print cloths were advanced slightly in the third week of April. Employment in the clothing industry in this district dropped eight per cent in mid-March to 84 per cent of the 1926 monthly average. Employment was unchanged in the men’s clothing division, but in the wom en’s and miscellaneous divisions the number employed dropped 15 per cent, whereas there usually is little change at this season o f the year. R ecovery occurred in late March and early April and most factories were operating at capacity levels at the middle of the latest month, but barring an unusual retail demand, the peak o f the spring season has passed. The orders recently placed have been chiefly from the larger retailers and represent reorders on goods pur chased in small quantities earlier in the year. Orders from agricultural and small industrial centers have been limited. Other Manufacturing A fter declining to new low levels in March as a result of order cancellations which developed coincident with the banking holiday, operations in the smaller manufacturing industries o f the fourth district were resumed at a mod erate speed as financial conditions improved in late March. By mid-April most plants had recovered all the ground lost in the previous month and the upward swing in com modity prices (which resulted from, among other things, the embargo on gold shipments and natural econom ic causes such as the failure of the winter wheat crop in some sections which caused wheat to rise about 50 per cent in value) caused buyers to place orders for immediate as well as future delivery. Employment in many lines im proved and operations were increased generally, in most cases, to the highest levels so far this year. Auto Parts, Accessories. Whereas nearly all parts and accessory orders were either cancelled or held up during and follow ing the banking holiday, the sharp increase in car assemblying in April, particularly in the lower price classes, resulted in a volume o f parts and material orders which indicated that production in April would be at a rate at least equal to the seasonal increase from Febru ary just as though the bank holiday had not occurred. The number employed, which was 19 per cent smaller in mid-March than in mid-February in contrast with (a five-year average increase o f two per cent for that time of year, increased considerably in April from the low level of the preceding month. Brick and Tile. Employment in March at brick and tile plants in Ohio was 20 per cent o f the 1926 monthly av erage, a drop o f 21 per cent from February, contrasting with a five-year average increase o f two per cent. In creased shipments and expanding production schedules were reported for April, with Federal projects accounting for much o f the activity. China, Pottery. A falling-off in the number o f orders for china and pottery was reported in the first half of April, though the volume o f orders and operations held up rather well in March, despite the drop in most lines THE MONTHLY BUSINESS REVIEW o f business. Employment in March was 54 per cent of the 1926 monthly average, one per cent below a year ago. Electrical Equipment. Employment in the electrical machinery, equipment and supply industry in March was 85 per cent of the 1926 monthly average, unchanged from February, but down 20 per cent from last year. Irregularities were reported in early April, companies making household appliances and refrigerators increasing operations sharply, partly seasonal, while makers of in dustrial equipment reported a falling-off in orders. Glass. Plate glass production in the entire country in March was 4,881,322 square feet, an increase of 10.6 per cent from the same month last year, but a drop o f 1.5 per cent from February. In the first quarter output was slightly below the same period of 1932. Improved demand from the automobile industry aided local plate glass factories in April. Makers o f moulded glass and bottles experienced a sharp increase in demand in late March and the first part of April. Some factories are several weeks behind on orders. Demand for glass food containers is limited. Prices are still low and have ex hibited no indication o f advancing. Hardware, Machinery. Operations recovered somewhat in early April from the low levels of March, but irregu larities regarding the trend o f sales and production were apparent. A slight advance in demand for small tools was reported and orders for hardware and metal products used by the automobile industry were more numerous and larger in April than in March. Prices remain firm. Paint. Demand for all types o f paint increased con siderably in April, partly seasonal, but more through re covery from the low level of March. Industrial paint sales increased, particularly to the automobile industry. One major company reported consumer orders coming through dealers 50 per cent ahead o f last year in number and also higher in volume while others reported a gain in sales o f this type of paint. Collections have improved and are reported as "quite satisfactory” in view o f con ditions. Haw material prices have advanced. Paper. Inquiries for boxboard containers have increased materially and orders also have improved. Production at Ohio plants in March was down only slightly on the basis o f the employment report o f the Ohio State University Bureau o f Business Research. The index in that month was 86 per cent of the 1926 average. Prices on some of the lower grades of paper have been advanced. Shoes. Production of footwear at 32 establishments in the fourth district in March was greater than for any corresponding month since 1927 and was ahead of last year by 22.3 per cent. Operations in March, despite the bank holiday, were 12.3 per cent ahead of February, the expansion being surpassed in only two other years, 1931 and 1923. In four of the preceding ten years shoe pro duction declined from February to March. In the en tire country shoe production in March was nine per cent higher than in February. Hide prices advanced one-half cent a pound in the third week o f April along with other prices as as a re sult of greater demand and the favorable statistical posi tion o f the industry. At six cents a pound hide prices were 33 per cent higher than a year ago. 6 TRADE Retail Several factors combined in March to reduce retail trade, as reflected in de partment store sales throughout the fourth district, to the lowest levels on record. The bank ing holiday caused a virtual cessation in buying for a short time generally and the fact that banks in some com munities have not yet been permitted to reopen wTas a retarding factor in a few sections. The lateness of Easter was another factor o f importance which distorts the com parison o f dollar sales this year with the same month of 1932. Last year Easter was the 27th of March so that all seasonal buying which usually develops prior to that holi day occurred in that month. This year with Easter com ing in mid-April, much o f the seasonal purchasing occurred in April, particularly in view o f the unsettled conditions prevailing in March. The decline in prices also was a factor responsible for part of the drop in the dollar volume. According to Fairchild’s index, department store retail prices on April 1 were 12 per cent below a year ago, and only 70 per cent o f what they wrere in January, 1931. The drop in March, however, was one of the smallest recorded in the past three years, and several items showed slight in creases. As a result o f the foregoing the dollar value of sales in March was 32.5 per cent below the same month of 1932, and was only 41.6 per cent of the 1923-25 month ly average. Allow ing for seasonal variations and changes in the Easter date, the adjusted index was 46.7 per cent, a reduction of about 24 per cent from last year. A ccord ing to preliminary reports retail trade improved consider ably in April. Installment buying increased in March, and, as a percentage o f total sales, was greater than a year ago. Regular charge sales in relation to total sales were smaller than in March, 1932. The dollar value of stocks at department stores increased less than seasonally in March and the adjusted index as of March 31 was 50.5 per cent o f the 1923-25 monthly average, a drop of about four per cent from February and of 26 per cent from a year ago. Collections declined in March and amounted to only 25.7 per cent o f the value o f accounts receivable at the beginning of the month. The decline occurred largely in collections on regular 30-day accounts. W holesale Sales of three reporting wholesale lines were larger in March than in February, but excluding grocery sales, the in crease was less than seasonal. Conditions in all whole sale lines were very much depressed generally and there was little indication of any stocking-up in March. Sales of all reporting firms in March were only 45 per cent of the 1923-25 monthly average and were about 22 per cent below the same month o f 1932. BUILDING The value o f contracts awarded in the fourth dis trict in March was up considerably, on a percentage basis, from February, but with the increase, the volume of awards was still quite small and the industry, as a whole, continues in a very depressed state. In view o f the wide spread slowing down in business in March occasioned by € THE MONTHLY BUSINESS REVIEW the banking holiday, the fact that building activity showed more than a seasonal increase was considered somewhat encouraging in the trade. Contracts awarded in March in the fourth district were valued at $6,192,000, compared with $3,634,000 in Feb-' ruary, but they were 43 per cent smaller than a year ago and only 7.2 per cent of the average value of con tracts awarded in March in the preceding ten years. Awards in the first three months of this year were $13,900,000, a reduction of 43 per cent from the same period of 1932 and represented only 12.2 per cent of the aver age value of awards in same period of 1923-19 32. The construction industry, both in this district and the en tire country has been operating at an extremely low rate for some time, and though contemplated new construc tion reported in March was under February and much below last year, the recent improvement in financial and industrial conditions has been felt in the demand for construction materials, etc., a large part of which is be ing used in renovizing projects, figures for which are not available. All m ajor classes o f building showed gains in March from the preceding month, and public utility contracts awarded were larger than a year ago. Residential build ing was 47 per cent greater in March than in February, but was 43 per cent below last year. Non-residential building was increased in March by the awarding o f four post office contracts in Ohio. Building costs are dowTn quite sharply, the index of material and labor costs in March being only 80 per cent of the 192 6 average. Lumber prices were advanced slightly in March, but they are still low. Efforts to con trol lumber production have been successful only to a limited degree and potential supply is far in excess of demand, though lumber dealers’ stocks are generally low. AGRICULTURE The spring planting season has been delayed from ten days to two weeks by the copious rains which have pre vented field work, but pastures and fall sown crops in this district have been benefited and need only some warm weather to stimulate growth. The condition o f winter wheat in this district on April 1 was slightly above the average April 1 condition o f the past ten years and was considerably above the average for the entire country. The poorest condition was reported in the northern part o f the district where some abandonment of acreage is expected, according to reports. The recent rise in wholesale commodity prices and in particular in farm prices, was a favorable development. Wheat prices advanced considerably more than 50 per cent as a result of the unfavorable crop condition re ported for the country as a whole, and the upswing in stocks and commodities which follow ed the embargo on foreign gold shipments. The composite index of farm prices on April 22 was 10.8 per cent above the low point touched in February. The price advance and the delay in spring planting as a result of weather conditions no doubt will have some effect on the acreage o f oats and corn planted. On March 1 farm ers’ planting intentions were reported below the acreages harvested in 1932. The April 1 crop report of the Department of Agricul ture showed that the condition of winter wheat for the entire country was only 59.4 per cent of estimated nor mal, the lowest condition figure on record and 20 points below the ten-year average April 1 condition. Assuming a normal season from now on this would indicate a total crop o f about 334,000,000 bushels, compared with a fiveyear average (1924-1928) harvest of 589,000,000 bushels. For the country as a whole it is estimated that 30 per cent of the acreage planted last fall has been or will be aban doned because of the poor condition and winterkilling. Most of the fourth district wheat fields are found in that single section o f the country where the April 1 con dition was about equal to the average o f past years. The follow ing table shows the April 1 condition of winter wheat in the four states included wholly or partly in this district, and in the entire country. Ap ril 1 Condition Ohio 1933 ..........................................76 1932 ...................................... ...S3 1919-28 average ............... .. 73 Pennsylvania 78 89 85 K en- W est V ir United tueky ginia States 82 85 59.4 84 87 75.8 79 81 75.4 The Ohio wheat crop, on the basis of the April 1 con dition, is expected to be 31,650,000 bushels compared with a harvest of 32,308,000 bushels last year and a 192630 average harvest o f 27,073,000 bushels. Acreage sown to winter wheat in Ohio last fall was about 16 per ceru greater than that harvested in 1932. The 1933 wheat crop in the other three states of the district was indi cated on April 1 to be greater than the 1932 crop because o f the larger acreage remaining fo r harvest. W ith such a large indicated crop for this district compared with last year, and the above-average stock o f last year’s wheat on hand on April 1, the rise in wTheat prices from about 50 cents a bushel to over 75 cents a bushel in the past few weeks has been a favorable development in the local farm situation. F'arm stocks of oats and corn as of April 1 in this dis trict were considerably below the average of past years, whereas in the entire country farm stocks of these grains were larger than the average o f preceding years. Pastures, though having been benefited by the spring rains, were considerably below average in condition on April 1, both in the fourth district and in other parts of the country. The water-soaked fields wrere being used only slightly in April because o f their condition. The number o f cattle on feed on Ohio farms on April 1 was about the same as a year ago while in the entire corn belt there w^ere about ten per cent more cattle on feed lots than a year ago. W age rates for farm help continue to decline and in April averaged $22.98 a month without board. This com pared with a five-year pre-war average of $29.09 a month. Wages paid on local farms were somewhat higher than the average for the entire country, but they were very low compared wijh preceding years. The supply of farm labor is much above normal and the demand for labor very subnormal because of the shortage of funds to pay for help. The ratio of supply to demand in Ohio was 244 per cent in the latest month, 194 in Pennsylvania, 230 in Kentucky and 263 in W est Virginia, compared with an average of 213.5 per cent in the entire country. 7 THE MONTHLY BUSINESS REVIEW Tobacco Preliminary reports concerning the acreage of tobacco to be planted indi cated that farmers intended to plant a larger tobacco acreage than was harvested in 1932, espe cially in the burley section, but it is too early to estimate accurately the percentage o f increase. The expansion in acreage apparently is a result of the relatively favorable price burley tobacco growers received for their 1932 crop. Average prices of all burley tobacco sold in the season just closed were nearly 50 per cent higher than in the selling season immediately preceding and were high compared with the general level o f farm prices. Seed beds have been planted and much of the ground has been prepared, though work was retarded in mid-April by the rainy weather. Debits to Individual Accounts (Thousands of Dollars) 4 weeks ending April 19, 1933 19,477 Akron............ 4,941 Butler........... 14.937 Canton.......... 192,918 Cincinnati. . . 267,480 Cleveland.. . . 78,448 Columbus.. .. 33,818 Dayton......... 13,861 Erie. . . ......... 1,703 Franklin........ 2.968 Greensburg. . 5,999 Hamilton... . 1,227 Homestead.. . 10,511 Lexington.. . . 4,759 Lima............. 1,860 Lorain........... 4.641 Middletown.. 4,003 Oil City........ 392,983 Pittsburgh. .. Springfield. .. 8,565 Steubenville. 3.641 51,101 Toledo.......... 4,369 Warren......... 24,564 Wheeling. . . . 19,660 Youngstown. 4,594 Zanesville.... Total............... 1,173,028 % change from 1932 — 63.5 — 5 .4 — 17.0 — 2 0.6 — 34.0 — — — — — — — — — 14.7 27.7 3 3.6 32.6 37.8 2 4.6 40.3 1 5.4 42.4 — — 43.3 26.5 56.3 — — 19.2 24.4 — — — — — 28.5 30.8 23.6 11.0 —22.2 — 13.1 — 25.9 Year to date Year to date Dec. 29, 1932 Dec. 31, 1931 to April 19, to April 20, 1932 1933 217,146 124,140 24,685 21,410 77,110 61,791 1,063,935 841,335 1,850,694 1,306,050 412,867 324,232 190,843 139,839 92,548 58,247 7,487 12,475 23,702 15,128 32,357 22,710 9,708 5,641 64,130 78,472 22,707 31,441 13,827 8,666 24,469 18,732 36,391 23,572 2,261,963 1,820,492 36,983 52,430 24,100 15,810 318,661 249,778 19,997 15,417 114,638 90,655 115,831 78,191 24,330 17,994 7,124,620 5,391,137 change from 1932 —42.8 — 13.3 — 19.9 — 20.9 — 29.4 — 21.5 — 26.7 — 37.1 — 40.0 — 36.2 — 29.8 — 41.9 — 18.3 — 27.8 — 37.3 — 23.4 — 35.2 — 19.5 — 29.5 — 34.4 —21.6 (1923-1925 * 100) Production— Coal (O., W. Pa., E. K y.).......... — Cement (0., W. Pa., W. V a.)... ” — Elec. Power (O., Pa., Ky.)*. . . . ” — Petroleum (0., Pa., K y.)*......... ” — Shoes........................................... **Per individual unit operated. ♦February. (000 omitted) March, Fourth District Unless 1933 Otherwise Specified Savings Deposits— end of month: 27 selected banks, O. & Pa... 590,624 2,198 Postal Receipts—9 cities......... $ Life Insurance Sales: Ohio and Pa.............................. 68,809 Retail Sales: 9,821 Department Stores— 53 firms.$ 483 Wearing Apparel— 11 firms...? 353 Furniture— 44 firms................$ Wholesale Sales: 968 Drugs— 13 firms..................... $ 718 Dry Goods— 10 firms............. $ 2,930 Groceries— 33 firms................$ 647 Hardware— 14 firms............... $ Building Contracts— 1,309 6,192 Building Contracts—T otal.. . .$ Commercial Failures— 6,529 1603 Commercial Failures— Number. Production: 542 Pig Iron, U. S................... tons 886 Steel Ingot, U. S............... tons Automobiles— Pass. Cars. U. S. 100,545* ” Trucks . . . U. S. 18,047* 9,285 Bituminous Coal..............tons Cement— 0., W. Pa., W. Va. 93 ........................................... Bbls. 8913 Elec. Power-O., Pa., Ky. k.w.h. 1,556s Petroleum— O., Pa., Ky. Bbls. 5 Tires, U. S................... Casings 1monthly average 8February 1,871s rlar., Mar., Mar., Mar., Mar. 1933 1932 1931 1930 1929 117 131 60 95 160 116 133 iio 163 137 147 119 94 148 126 129 102 116 85 134 169 158 82 114 86 102 42 58 84 110 117 65 93 104 29 40 59 81 98 75 88 89 51 61 33 45 56 81 100 89 96 59 72 45 88 89 89 79 61 23 55 126 99 13 13 45 54 97 8 81 88 51 65 74 100 37 76 8 20 122 136 146 144 106 97 98 123 84 98 92 86 79 85 105 % change % change from Jan.-March from 1932 1933 1932 — 9.9 — 16.9 606,5311 6,689 — 28.1 214,352 — 23.8 — 32.5 — 47.1 — 27.1 28,674 1,414 1,005 — 27.2 — 36.2 — 30.7 — 31.7 — 26.6 — 16.4 — 26.3 3,073 1,945 8,162 1,800 — 22.9 — 24.5 — 18.4 — 23.2 — 42.6 — 43.2 3,178 13,900 — 48.5 — 43.4 + 7.8 — 32.8 17,772 6113 — 27.4 — 25.1 — 44.0 — 36.9 + 1.2 — 7.7 — 21.1 1,663 2,962 300,363 3 55,098* 29,215 — 42.7 — 31.3 + 2.8 — 13.1 — 4.4 —61.4 473 — 13.1 1,946* — 13.7 3,327* 5 +22.3 — 39.8 3,6774 aactual number 4first two months — 32.6 — 7.9 — 11.0 + 12.9 — 37.5 — 8.1 — 11.9 Wholesale and Retail Trade (1933 compared with 1932) DEPARTMENT STORES (53) — 22.9 — 20.9 — 32.5 — 26.0 — 24.3 Fourth District Business Indexes Bank Debits (24 cities). ................ . Commercial Failures (Number).............. ** ” (Liabilities)........... Postal Receipts (9 cities).......................... Sales— Life Insurance (Ohio & Pa.)........ ” — Department Stores (53 firms). . . . ” — Wholesale Drugs (12 firms)........ ” — ” Dry Goods (10 firms). ” — ” Groceries (33 firms)... ” — ” Hardware (14 firms). . ” — ” All (69)....................... ” — Chain Drugs (3 firm s)**.............. Building Contracts (Total)....................... Fourth District Business Statistics WEARING APPAREL (11) Other Cities........................................... FURNITURE (44) Cleveland................................................ Toledo..................................................... CHAIN STORES* Drugs— District (4)............................... Groceries— District (5 )......................... WHOLESALE GROCERIES (33) WHOLESALE DRY GOODS (1 0)... WHOLESALE DRUGS (13).............. WHOLESALE HARDWARE (1 4 )... *Per invidivual unit operated. Percentage Increase or Decrease SALES SALES STOCKS Mar., First 3 Mar., 1933 months 1933 — 43.7 — 29.8 — 29.8 — 35.6 — 31.2 — 33.8 — 44.0 — 31.8 — 32.5 — 28.9 — 26.4 — 24.1 — 27.5 — 28.3 — 25.7 — 33.2 — 29.1 — 27.2 — 23.8 — 28.5 — 34.0 — 22.7 — 21.2 — 28.2 — 22.1 — 29.9 — 25.9 — 33.6 — 53.1 — 47.1 — 27.2 — 40.5 — 36.2 — 22.5 — 34.2 — 30.6 — 33.8 — 16.1 — 24.3 — 34.8 — 28.7 — 46.2 — 27.1 — 31.7 — 26.0 — 36.5 — 30.8 — 36.5 — 34.5 — 30.7 — 22.9 — 6.9 — 19.8 — 7.4 — 12.0 — 16.5 — 21.0 — 4.4 — 33.4 — 11.3 — 16.4 — 26.6 — 31.7 — 26.3 — 22.0 — 20.4 — 20.5 — 10.8 — 28.9 — 13.2 — 18.4 — 24.5 — 22.9 — 23.2 — 30 .*3 — 21.7 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Production and distribution o f commodities, which declined during the latter part o f February and the early part of March, increased after the middle o f the month. The return flow o f currency to the reserve banks, which began with the reopening of banks on March 13, continued in April, Following the announcement by the President on April 19 that the issuance of licenses for the export of gold would be suspended, the value of foreign currencies in terms of the dollar advanced considerably, and there was in creased activity in the comm odity and security markets. Production and Employment Index o f industrial production, adjusted for sea sonal variation, (1923-1925 average = 100) Lat est figure, March 60. Weekly figure# (Wednesday) for 12 Federal Re serve banks. Latest figures are aa o f April 19, 1933. Production at factories and mines decreased from February to March, contrary to seasonal tendency, and the Board’s seasonally adjusted index declined from 64 per cent o f the 1923-25 average to 60 per cent, compared with a low level of 58 per cent in July, 1932. At steel mills there was a decline in activity from an average of 20' per cent of capacity in February to 15 per cent in March, follow ed by an increase to more than 20 per cent for the month o f April, according to trade reports. In the automobile in dustry where there was also a sharp contraction in output when the banks were closed, there was a rapid increase after the reopening of banks. From February to March, production in the food and cotton textile industries showed little change in volum e; activity in the woolen industry declined sharply, and there was a reduction in daily average output at shoe factories. At lumber mills activity increased from the low rate of February, while output o f bituminous coal declined by a substantial amount. The volume o f factory employment and payrolls showed a considerable decline from the middle o f February to the middle o f March. Comprehen sive figures on developments since the reopening o f banks are not yet avail able. Value o f construction contracts awarded in the first quarter, as reported by the F. W . Dodge Corporation, was smaller than in the last quarter of 1932 by about one-third. Distribution Volume o f freight car loadings, on a daily average basis, declined from February to March by about seven per cent, reflecting in large part a sub stantial reduction in shipments of coal. Shipments of miscellaneous freight and merchandise, which usually increase at this season, declined in the early part of March and increased after the middle of the month. Department store sales, which had declined sharply in the latter part of February and in the first half o f March, increased rapidly after the reopening of banks. RESERVE. BANK CREDIT AND FACTORS IN CHANGES Wholesale Prices W holesale prices of leading commodities fluctuated widely during March and the first three weeks of April. In this period grain prices increased sharply and prices of cotton, hides, nonferrous metals, pig iron, scrap steel, and several imported raw materials advanced considerably. During the same period there were reductions in the prices of rayon, petroleum and certain finished steel products. Bank Credit Weekly figures, Wednesday series. La te s t fig ures are as o f April 19, 1933. Currency returned rapidly to the reserve banks and the Treasury fol lowing the reopening of the banks, and on April 19, the volume of money in circulation was $1,500,000,000 less than on March 13, when the peak of demand was reached. Funds arising from the return flow of currency were used to reduce the reserve banks’ holdings of discounted bills by $1,035,000,000 and their holdings of acceptances by $200,000,000; at the same time member bank reserve balances increased by $390,000,000. As a result of the de cline in Federal reserve note circulation and an increase in Federal re serve bank reserves, chiefly through the redeposit o f gold and gold certifi cates, the reserve ratio o f the twelve Federal reserve banks combined ad vanced from 46.5 per cent on March 13 to 61.5 per cent on April 19. Deposits of reporting member banks in New York increased rapidly after the reopening of the banks, and on April 19 net demand deposits were $620,000,000 larger than on March 15, reflecting in part an increase of $380,000,000 in bankers’ balances, as funds were redeposited by interior banks Money rates in the open market, after a temperorary advance in the early part o f March, declined rapidly, but were still somewhat higher than early in February. By April 21 rates on prime comm ercial paper had de clined from 4% per cent to a range o f 2-2 V2 per cent; rates on 90-day bank ers’ acceptances from 3% per cent to % o f one per cent, and rates on re newals of call loans on the stock exchange from 5 per cent to one per cent. On April 7 the discount rate of the Federal Reserve Bank of New York was reduced from 3 ^ to 3 per cent. The bank’s buying rate on 90-day bankers’ acceptances was reduced from 3% per cent on March 13 to 2 per cent on March 22.
@FedFRASER