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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. 16 No. 5 Cleveland, Ohio, May 31, 1934 Industrial activity in the fourth district continued to in crease in April at a greater-than-seasonal rate and the up ward movement evident since the beginning of the year was further extended in that month to approximately the high level of last summer, after allowing for seasonal changes. There were indications, however, that in some fields the rate of expansion recently was greater than was warranted by current consumption; stocks o f finished goods were increased sharply in early spring and now must be worked off. This was particularly true of the steel, tire, glass and automobile industries— all o f m ajor importance to the fourth district. first four months is more moderate than it was this year. The falling-off in retail sales was attributed in the trade to a number o f factors, including higher prices, unfavor able conditions in agricultural sections of the country, uncertainty regarding employment, etc. Some lines showed a falling-off in the first part o f May, but steel ingot production continued upward until the third week o f the month, judging by weekly figures. W hile some slowing-down is usually expected as the sum mer approaches after so active a spring period, the con traction in most cases was somewhat more than seasonal. The construction industry, despite efforts to stimulate it, showed a contrary-to-seasonal falling-off in April and the situation was little changed in the first half of May. Public works and utility construction in early May was up from April and last year, but other types o f building were even below 1933 at this season. The dollar value o f department store sales, after allow ing for seasonal variation and changes in the Easter date, was down in April from the high level of March, and scat tered reports indicate that sales in May showed a much smaller increase from 19 33 than in earlier periods of this year. Recent gains were little greater than the rise in prices in the past twelve months. The number o f comm ercial failures and the liabilities o f the defaulting concerns continue much below recent years. In April there were only 92 failures in this dis trict, just about half as many as in 1933. For the year to date there were 68 per cent fewer failures than in the corresponding period o f last year. Sales o f life insurance in this district and the entire country have improved recently, the gain in April in Ohio and Pennsylvania being 33.6 per cent; for the year to date sales were up 12.5 per cent. Agricultural conditions were below the average for this season in past years, but they were comparatively better in this district in mid-May than in many sections of the country. Slight rains late in the month were helpful to some areas, but moisture deficiency is still very marked. The automobile industry increased assemblies in April to the highest figure since May 1930, the gain in total output for the month from a year ago being over 100 per cent. Retail sales, however, according to preliminary figures, showed a much smaller increase and large stocks o f cars in hands o f dealers and producers resulted in a sharp contraction in assemblies and in the buying o f parts and accessories in the first three weeks of May. In most past years m otor car production showed little change from April to May, but usually the rate o f increase in the Tire production also exceeded requirements in the firat part of this year and stocks of finished goods on hand were higher than for several seasons. Advancing raw material prices and manufacturing costs pointed to higher tire prices, and dealers, partly in anticipation o f a busy summer season, and also as a hedge against increased costs, bought heavily for stock purposes. FINANCIAL Changes in condition o f weekly reporting member banks and o f the Federal Reserve Bank o f Cleveland in the five weeks ended May 23 were o f minor importance. 2 THE MONTHLY BUSINESS REVIEW Deposits at member banks increased quite sharply in the period, but loans made by banks declined and invest ments increased only slightly. Total bills and securities held by the reserve bank showed a moderate reduction in the five-week period as bills discounted and holdings o f acceptances dropped to record low levels. On the latest date only 25 banks in this district were borrowing from the reserve bank and the aggregate o f loans and discounts was $1,442,000. Last year at this time 204 member banks in the district were borrowing $61,539,000. W hile part of these loans has been paid off with funds obtained from the Reconstruc tion Finance Corporation through loans or sales o f stock, there has been a marked improvement in banking condi tions from last year at this time. Holdings of Government securities by this bank remained at the level reported for earlier weeks of this year. Note circulation o f this bank increased about $9,000,000 in the five weeks ended May 23. This was somewhat greater than the gain at this season of past years, but the total volume o f notes and bank notes outstanding is approximately the same as at the beginning of the year, despite the sharp increase in business activity, larger pay rolls, higher prices, etc., which ordinarily would cause a gain in money in circulation. Banks reduced their re serves in the five-week period to obtain Federal reserve notes and daily average excess reserves o f all banks were down about $9,000,000 in April. Judging by the trend o f deposits at the reporting member banks and the reserve deposit figures, a further slight reduction occurred in May. Excess reserves o f member banks still closely approximate $100,000,000 in this district alone and in the entire country exceed $1.6 billions. At the reporting member banks the slight increase in loans in early April was only a temporary advance, for in the latter part o f the month and the first three weeks o f May a contraction occurred which reduced the total to a new low level. The decline was most pronounced in loans secured by stocks and bonds, but “ all other” loans also were down; still they were slightly above the low point touched in late February. Holdings of Government securities continued to in crease in the five latest weeks and on May 23 they were 28 per cent above a year ago. Investments in other se curities increased slightly in the latest week, but were about eight per cent below last year at this time. As was pointed out last month, deposits at member banks continue to increase despite the fact that loans show a decline. In the five weeks ended May 23 demand deposits rose $16,000,000 and on the latest date they were nearly $70,000,000 higher than at the beginning o f the year. The gain from a year ago was not so great, but in the last half o f 1933 demand deposits were quite sharply reduced, partly because interest payments were discontinued on these accounts follow ing the passage of the Banking Act o f 1933. Time deposits also increased in the five latest weeks, and in the third week o f May they were about seven per cent higher than at the be ginning o f 1934 and were up 25 per cent from last year at this time. MANUFACTURING MINING Iron and Steel The contracting for steel in latter half o f April in amounts considerably great er than was justified by current con sumption in most lines o f industry, caused steel operations to increase sharply in this period and early May. Consum ers placed large orders for steel for second quarter de livery at the price prevailing prior to the date increases became effective, and operations in most centers were stepped up rapidly as a result. The national average rose from 51 per cent o f capacity in the week ended April 14 to a high o f 62 per cent in the week ended May 12, but a slackening o f steel specifications in the third week of May, with some cancelations on material recently re leased, resulted in a three-point reduction in steel opera tions in the third week of the month. Activity continues much above a year ago, but the season when a falling-off usually develops is at hand. The increased demand from railroads and some o f the smaller miscellaneous manufac turing lines was not sufficient to offset the decline in au tom obile specifications or the lack o f large-scale struc tural steel purchases. In the individual steel centers operating rates fluctuated somewhat in the five most recent weeks. In the Cleveland-Lorain district production rose from 69 to 78 per cent; in Youngstown activity rose from 57 to 67 per cent of capacity in the first four weeks, but dropped to 61 per cent in the third week o f May, due chiefly to an accumu lation o f ingots produced under forced open-hearth activ ity in the four preceding weeks. Operations o f finishing mills in Youngstown vicinity were affected only slightly and employment held up reasonably well. In the Pitts burgh territory operations rose sharply from 30 to 51 per cent o f capacity, orders for rail materials, etc., being chiefly responsible for the upturn. Tin plate production fluctuated somewhat, activity at W heeling being at 74 per cent o f capacity in the third week o f May and in western Pennsylvania at 75 per cent, up five points in the latest week. Daily average steel ingot production in April was 117,425 gross tons, the highest since July 1933, when 128,152 tons per day were reported. Total output for the month was 2,935,631 tons, compared with 2,797,194 tons in March. For the year to date 9,941,252 tons o f steel were pro duced, more than twice as much as was made in the same period o f 1933 and nearly equal to the amount produced in the first four months o f 1932 and 1933 combined. Railway requirements have constituted an important factor in recent steel production. Equipment builders have been releasing material orders for many o f the 20,707 freight cars awarded in the first four months of this year, the highest for any comparable period since 1930. Of the 700,000 tons o f rails and 300,000 tons o f track fasten ings awarded in conjunction with the Government’s co operative plan, entered into last year and already financed, less than ten per cent actually has been produced. In this connection deliveries are mandatory before August 31, and the national annual rail mill capacity is only 3,520,000 tons. Orders for structural steel have lagged so far this year, but in tli£ ftrst week o f May contracts were placed for 41,- THE MONTHLY BUSINESS REVIEW 882 tons of this material, the largest amount ordered in any similar period in twelve months. P ig iron production was stepped up more than season ally in April and the daily average output of 57,873 tons was 10.3 per cent ahead o f March and the highest since last August. Total output for the month, 1,736,217 tons, brought output for the year to date to 5,858,240 tons, over 3,500,000 tons more than was produced in the same period o f 1933. There were twelve more blast furnaces operating at the close o f April than at the end o f March and ten o f these were in the non-merchant, steel w orks’ class. The total number active on April 30 was 109, the highest since the corresponding month o f 1931. In some sections blast furnaces were operating at capacity; this was particularly true o f Cleveland. Price adjustments apparently have been practically completed and Steel's composite price index was up $2.37 to $34.77 in the month ended May 21. Finished steel prices were up $3.80 to $54.80 on the average, but the latter index was still $5 below the average o f 1926. F ol low ing heavy buying o f scrap in April, the composite price for steel scrap dropped $1 a ton from mid-April to the third week o f May. Coal Coal production in April in the fourth district as well as in the United States declined sharply from the high level o f March. Output of local mines in the month was 31.5 per cent less than in March, the falling-off being considerably greater than the average decline for this period o f pre ceding years. Nevertheless, at 10,910,000 tons, local mines produced 38 per cent more coal than in April 1933, and output was higher for this month than since 1931. The monthly increase was identical with that shown in the first four months in this district and the figure was somewhat greater than the increase shown for these periods in the entire country. The April slump was a na tural reaction to the heavy stocking o f coal by consumers prior to the expiration o f coal contracts as of April 1. It was generally expected that these contracts would be re newed at higher prices than were specified in the old agree ments and coal buying in March, therefore, exceeded requirements by a good margin. Although comm ercial stocks of coal as o f April 1 were down about 13 per cent from the figure at the beginning of the year, they were 19 per cent larger than on April 1, 19 3 3, at which time coal stocks above ground were unusually small. In terms of days’ supply at the current rate o f consumption, however, total coal above ground is about seven per cent below a year ago and represented 25 average days’ supply. Compared with a year ago in dustrial stocks were up sharply, while coal in hands o f retail dealers on April 1 was ten per cent less than in 1933, the unusually cold winter weather causing a severe drain on dealers’ stocks. The opening of the lake coal shipping season was con siderably later than usual this year and demand for coal from local mines for shipment to upper lake ports in April was less than was previously expected, although April shipments from Lake Erie ports were up 21 per cent from the corresponding period of 1933. Because o f the limited coal stocks at upper lake ports, shipments o f coal this year are expected to exceed 1933 by a good margin. 3 Automobiles The upward trend in automobile pro duction evident in the first quarter o f this year was continued in April, the seasonally adjusted index o f the Federal Reserve Board advancing six points to 8 6 per cent of the 1923-1925 monthly average. One year ago this index was 44, the gain in output in the period being approximately 100 per cent. There are indications, however, that production was maintained at a higher rate than was justified by current consumption and a rather sharp decline in pro duction occurred in the first two weeks of May. The New York Times weekly adjusted index dropped 17 points in the first two weeks of the month, with the majority of producers contributing to the decline. According to reports, retail sales in early May were off more than sea sonally. W ith inventories o f some makes o f cars unusual ly large, even for this season o f the year, it appears as if the peak o f production for the spring season occurred in April, whereas last year and in 1932, June and May, respectively, were the months o f greatest output. A pre liminary estimate places total production in May at 320,000 cars and trucks, compared with 218,347 in May 1933. According to the Department o f Commerce, 360,620 cars and trucks were turned out in April compared with 180,713 in the same month o f 1933. For the first four months production slightly exceeded a million cars and the gain from the same period o f 1933 was 104 per cent. As in earlier months o f this year truck production con tinued to exceed last year by a greater margin than did passenger car output. The form er in April was up 108 per cent from a year ago and for the first four months, at 215,493 trucks, exceeded the same period of 1933 by 161 per cent. Passenger car production was up 91 per cent in April and 94 per cent in the four-m onth period from corresponding intervals o f 1933. New passenger car registrations in principal counties of Ohio and western Pennsylvania in April numbered 19-,249 units. This compared with 9,260 units in April 1933, and a gain o f 84.4 per cent was shown in the first four months o f the year. Truck registrations in April were up 158 per cent from 1933 in this district. Rubber Tires Judging by figures now available, operations in the rubber and tire industry were maintained in April at approxi mately the high level of March when output was higher for this season than since 1929. Consumption of crude 4 THE MONTHLY BUSINESS REVIEW rubber in the month was 44,947 long tons, a decrease of 4.6 per cent from the preceding month, but on a daily average basis the decline was somewhat smaller. Employ ment at 16 Ohio rubber factories in April was up 1.7 per cent from March, slightly more than the average increase o f the preceding five years and 53 per cent above a year ago. So far this year, however, the tire industry has been producing at a rate considerably above current require ments and inventories rose rapidly in the period. A private estimate places total tire stocks in hands of manu facturers, dealers and mass distributors, as of April 1, at over 18,000,000 casings. This was higher than for the past two years and represented approximately six months' supply at the current rate o f consumption. The April 1 report of the Department o f Commerce on distributors’ tire stocks in the United States indicated that the average supply was 23 per cent above a year ago and the highest for this time o f year since 1930. Dealers have been increasing stocks recently, not only in anticipation o f a seasonal increase in sales, but also because it was gen erally felt that a price increase was imminent. Manufac turers built up inventories sharply to provide a hedge against any possible labor disturbances which might in terrupt the regular manufacturing process. The accom panying chart shows these stocks at the end o f each month together with production in the period for 97 per cent of the entire industry. In early May there were indications that tire produc tion was being curtailed coincident with the contraction in motor car production and the reduction in orders from overstocked dealers. W ith tire production up sharply in May and June a year ago, the comparison o f operating rates with those periods no doubt will be less favorable than in earlier months of this year. The recent adoption o f a rubber restriction program by countries controlling 90 per cent of the w orld’s crude rub ber output was disturbing to American manufacturers, for the principal objective of the proposal is to raise the price o f rubber. In the past year, partly in anticipation of the adoption o f a restriction program, rubber prices rose over 200 per cent and it recently sold above 15 cents a pound, but the price declined rather sharply to 13 cents a pound in the latter part o f May follow ing form al an nouncement of the restriction program. Imports o f crude rubber in April amounted to 45,6 62 tons, slightly higher than in March and up 135 per cent from April 1933. Domestic stocks o f crude rubber on May 1 amounted to 351,981 tons and represented approximate ly 53 per cent of the w orld’s crude rubber supply. The domestic tire industry has been forwarned against the possible restriction of rubber production by considerable propaganda on the subject and crude rubber stocks have been maintained at unusually high levels for over a year. Clothing Production of men’s clothing continued at a high rate in April and early May at local factories, employment at 13 plants reporting to the Ohio State University Bureau of Busi ness Research in the former period being up about one per cent from March, a contra-seasonal improvement. Com pared with a year ago, a gain of 17.6 per cent was shown in the number employed. Retail demand, however, fell off sharply and April sales of men’s wear at department stores were down three per cent from last year and boys’ wear sales were off 35 per cent, despite the higher price level. These declines, in contrast with the large increases reported for March, were partly a result of the late Easter a year ago which stimulated buying in April of that year. On the other hand there were widespread re ports o f a falling-off in retail clothing sales not accounted for by seasonal factors. This has caused a slowing-down in buying from wholesalers and manufacturers for cur rent needs, but orders for fall delivery, on samples which are now being shown, compare very favorably with last year. Employment at wom en’s clothing factories was down somewhat more than seasonally in April, and buying, both wholesale and retail, has shown a falling-off of more than seasonal proportions since early in that month. Showing o f samples o f wom en’s fall wear did not occur until late May so little inform ation on buying for fall delivery is available. Inventories are not abnormally large and there was little evidence of the stocking-up reported in some other fields o f activity. Other Manufacturing A ccording to reports, operations in most o f the smaller manufacturing lines in this district continued upward at a greater than seasonal rate in April. In the first part of May, however, there were indications of a falling-off. In some lines this was seasonal, but in others it was contrary to the trend for this time of year. W hile the number of employed was being maintained generally, the number of man-hours worked, and consequently pay rolls, were cur tailed. Autom obile Parts, Accessories. Operations in the au tom obile parts and accessory plants in April continued upward at a greater-than-seasonal rate despite interrup tions in some branches o f the industry. Employment at 32 Ohio factories was up 4.3 per cent from March, some what more than the average increase in the past five years and was 111 per cent higher than a year ago. For the first four months of this year employment at local factories averaged 83 per cent better than in the corre sponding period of 1933. In the first half o f May a rather sharp curtailment in orders received from the assembly plants caused operations to contract. This reduction was considerably more than seasonal, and apparently was a result of the slowing-down in retail sales and also a reac 5 THE MONTHLY BUSINESS REVIEW tion resulting from the fact that several manufacturers have large inventories o f finished cars and also parts on hand. Brick and Tile. On a percentage basis, operations at local brick and tile plants increased quite sharply in April, both compared with the preceding month and a year ago, but production continued at low levels. Increased high way construction resulting from the distribution of Fed eral funds, in this section and in other parts o f the coun try, was partly responsible for the larger sales o f brick and tile products. Building activity is quite limited. China, Pottery. A decided falling off in sales o f china and pottery developed in the first part o f May, according to reports from local manufacturers. This was largely seasonal, although in some cases it was reported as being greater than usual. Operations in April continued to in crease and unfilled orders on hand were larger than for several years. The number o f employees declined slightly in early May, but pay rolls were reduced quite sharply. Electrical Supplies. The electrical machinery and equipment manufacturers have enjoyed a very satisfactory year so far and there were no indications in early May of a slackening in the upward movement. Sales of household equipment, particularly electric refrigerators, continue much above a year ago. In April, at reporting department stores in this district, sales o f electrical ap pliances were up 136 per cent from April 1933, and for the first four months sales are considerably more than double the same period o f last year. Employment in April at 25 Ohio concerns was up 62 per cent from last year and was about the same as in March. Pay rolls showed an even greater increase. Glass. Operations at plate and window glass factories were reduced in April and declined further in the first part of May. Substantial inventories built up earlier this year remain to be sold and these accumulated stocks and the reduction in demand caused prices to weaken. The average decline was close to 20 per cent. Plate glass prices were reduced 15 per cent in early May and ship ments were curtailed in keeping with the falling-off in automobile production. Makers of glass containers con tinued to operate at near capacity levels in April, but the increase in orders which oftimes occurs just prior to the summer season was not evident in early May. Stocks of finished goods, according to the Glass Container Associ ation, were unusually large, but production and ship ments recently were at the highest levels since records were started in 1925. Hardware, Machine Tools. Although local machine tool factories showed an increase in employment in April and sales in this period were up seasonally, there was a falling-off in May, according to reports. Buyers seem hesitant to make commitments and the drop in automo bile operations was quite noticeable in orders received by hardware makers. Demand for small tools declined in May and excessive inventories were a depressing factor. Paint. The paint and varnish industry in April and early May was operating at seasonally high levels. Sales of some types o f paint, however, show considerably larger increases from a year ago than others. Paint sales for maintenance purposes and home use continue in very satisfactory volume, but industrial paint sales have shown a falling-off recently, even greater than can be explained by seasonal movements. Paper. Operations in the paper and boxboard industry ranged from 60 to 70 per cent o f capacity in the first part o f May. April employment at 11 local factories was up 4.3 per cent, but a falling-off, particularly in the num ber of hours worked, was reported in the first part of May. Large inventories in the hands o f consumers, built up partly in anticipation o f higher prices, are being worked off at present, and buying consequently is reduced. Shoes. Shoe production at local factories in the first quarter o f the year was 8.8 per cent under the similar period o f 1933, according to the Bureau o f Census re ports. April production figures are not available, but preliminary reports from local manufacturers indicate that sales in the period were in quite satisfactory vol ume compared with a year ago, and this condition car ried over to the first part o f May. Due to seasonal con ditions, operations in May were down from the high levels earlier this year, but production on fall orders is soon to be started. TRADE Retail There was a contraction in retail trade at department stores in this district in April from the unusually high level o f March and dollar sales in the latest month were up only 9.8 per cent from the corresponding period a year ago. The comparison with last year is distorted by the fact that Easter occurred in mid-April and this permitted a large share of pre-Easter buying in that month, where as this year all o f it occurred in March. Making allow ance for seasonal variations and changes in the Easter date, the index o f dollar sales dropped from 76.4 per cent of the 1923-1925 monthly average in March to 72.5 per cent in April. Dollar sales this year in April and March combined were 34.7 per cent larger than in the corresponding period o f 1933 and the gain was slightly greater than the increase in sales reported for the year to date, which was 31 per cent. Reports from a few stores for the first three weeks in May indicated a further falling-off, both in dollar volume and the number o f transactions. Allowing for changes in retail prices, which were slight in the latest month, but which, according to Fairchild’s index, w^ere up 29 per cent from a year ago, volume sales at reporting stores were only slightly above last year at this time. Dollar value o f stocks at department stores increased 2.9 per cent from March to April, slightly more than seasonal, but the gain from a year ago was 27 per cent, about equal to the average increase in prices. The index of dollar value o f department store stocks, adjusted for seasonal variations, was 62.5 per cent o f the 1923-1925 monthly average, a trifle higher than in March. The ratio o f credit to total sales increased in April, due entirely to a greater proportion of installment buying. Installment sales in the latest month represented 11.1 per cent o f all sales, whereas regular charge sales amounted to 48 per cent o f the total. Collections in April on accounts receivable at the beginning o f the month held up fairly well, the average amounting to 34.7 per cent. Installment collections represented 19 per cent o f 6 THE MONTHLY BUSINESS REVIEW these accounts outstanding at the beginning o f the month. W holesale All reporting lines o f wholesale trade, except hardware, showed a falling-off in sales from March to April, and the increase in sales in the latest month from a year ago was smaller in all cases than the gains shown in the first quarter of the year. Wholesale grocery sales were up 15 per cent in April and for the first four months an increase o f 28.7 per cent was shown from corresponding periods o f 1933. Dry goods sales were up 39 per cent in April, but the four-m onth gain was 51 per cent. A 48 per cent increase was reported by wholesale hardware companies in April and a gain o f 56 per cent was shown for the four-m onth period. Drug sales, which have been augmented by the distribution o f liquor re cently, were up 31 per cent in April and 43 per cent in the first four months o f this year from similar periods of 1933. BUILDING Despite all efforts which have been made to stimulate activity in the building industry, construction contracts awarded in April in the fourth district as well as in the United States were down quite sharply from March. Siz able gains from a year ago are evident, but dollar value o f contracts awarded is still limited and the build ing industry as a whole continues in a depressed condi tion. In the fourth district total contracts awarded in April were valued at $10,810,000. This was 24 per cent below March, whereas in past years an increase in build ing activity was generally shown in this period. Reduc tions from March to April were shown in all classes o f building except public utility construction, but the dollar value o f awards in this latter class was only slightly over a million dollars. Commercial and factory building, which for the first four months showed a rather sizable increase from the corresponding period o f 19 33, declined in April from March. Residential building also was re duced 33 per cent in the period, although compared with a year ago, an increase o f 13 per cent was shown. For the first four months o f 1934 residential construction was up 22 per cent from the corresponding period o f 19 33. Because o f the sharp increase in the value of contracts awarded for public works, most of which resulted from the allocation o f Federal funds to local projects, total contracts awarded in this district in the first four months o f 1934 were over 250 per cent ahead o f the same period o f 1933. In April as well as for the year to date public works contracts were chiefly for highway construction and for unspecified civil works projects. Much o f the highway work is just getting under way and increased activity is evident at cement and brick factories located in this dis trict. Cement production in April was 212 per cent above a year ago and in the first four months was up 93 per cent from the similar period o f 1933. The dollar value of contemplated construction reported in April in this section was down sharply from March, although an in crease o f more than 100 per cent from a year ago was shown. Lumber dealers reported a slight increase in demand for materials in April and, while there has been a decided increase in dollar volume as a result o f higher prices, actual sales are still very limited compared with previous years. Building costs have shown little change recently, but are up quite sharply from a year ago. AGRICULTURE The agricultural situation in this district so far this spring has been exactly opposite to what it was a year ago. In early 1933 unusually wet rainy weather re tarded spring work and delayed the planting o f oats several weeks. This year the unusually late spring de layed work somewhat, but lack o f rainfall and below average subsoil moisture resulting from less-than-average precipitation for the past year or more, has created a drought condition which, if continued, will be very harm ful to all m ajor crops, not only in this district, but in the entire country. W ell-distributed rains and seasonable weather would correct this condition to a degree, but a great deal o f damage already has been done to hay and small grain crops which occupy approximately half the total crop area o f the country. A ccording to the Department of Agriculture, “ crop prospects on the whole seem less prom ising than at this early date in any recent year.” Wheat. W inter wheat in the fourth district in late May began to head and at this critical point was very much in need o f rain. The May 1 condition o f Ohio wheat was 78 per cent o f normal, the same as a year ago and slightly above the ten-year average May 1 condition. In other states o f the district and in the entire country the May 1 condition was somewhat below the average o f the past ten years. This year’s estimated fourth district crop, on the basis o f the May 1 condition and the acre age remaining for harvest, is somewhat larger than the average harvest o f the five years 1927-1931, but is slightly under the large harvest o f 1933. W ith the exception of Pennsylvania, acreage abandonment on local farms be cause o f winter killing, etc., was considerably less than the ten-year average, but in the entire country acreage abandonment was above average, although only half as great as in 1933. In the entire country the estimated acreage o f wheat remaining for harvest as o f May 1 was considerably less than the five-year average 1927-1931, partly as a result of the crop-reduction program. This acreage was somewhat larger than was harvested in 1933, but the unfavorable weather conditions prevailing generally through May probably reduced the estimated forecast of 461,471,000 bushels for the winter wheat crop by several million bushels. This estimate was 27 per cent below the fiveyear average production o f 632,661,000 bushels, but was somewhat larger than the unusually small crop o f 1933. No estimate is available at present on the condition of spring wheat, but the season so far has been very un favorable fo r the planting o f this crop in northwestern United States. Hay and Pastures. Cool, dry weather in late April and early May retarded growth o f hay and pastures locally. The May 1 condition o f tame hay was consider ably below average in this district and the entire coun try, although in Ohio, at 75 per cent of estimated normal, it was the same as a year ago and at 78 per cent in Pennsylvania, was slightly higher than on May 1, 1933. Condition o f pastures generally was below average on THE MONTHLY BUSINESS REVIEW May 1. Lack o f early pastures made it necessary to feed stock longer than usual this year and stocks o f hay and grain on farms were considerably below average on May 1. No official estimates on the corn and oat crop are available, but spring planting of the form er was com pleted in most sections somewhat earlier than usual. Oat planting was delayed slightly in some sections by the late spring, although seeding progressed quite rapidly in early May. Fruit. For the country as a whole fruit prospects are only slightly below average for this time o f year. No serious injury to the apple crop was reported and the apparent failure o f the peach crop in northeastern United States was offset to some extent by better-than-average prospects in southern states. Cherry crop prospects are irregular, with a fair crop o f sour cherries indicated, but practically no sweet cherries in this section o f the country. Tobacco. No estimate is available o f the tobacco acre age which is expected to be planted in this district this year, but reports indicate that a sharp reduction in acreage, possibly 30 to 40 per cent, will be made from the high figure o f last year. Seed beds were started later than usual, but despite the dry weather it appears that the plant supply will be adequate. Official figures received recently indicate that 396,201,530 pounds of the 1933 burley tobacco crop were sold in the season recently ended. W ith the exception o f 1931, when sales exceeded 450,000,000 pounds, this year’s fig ure is the highest on record in 17 years. The average price received, $10.46 a hundred pounds, compared with $12.39 for the 1932 crop. Sales at Lexington, amounting to over 81,000,000 pounds, averaged 12.31 cents a pound, the highest average figure in the entire burley tobacco belt. Fourth District Business Statistics (000 omitted) Fourth District Unless April, Otherwise Specified 1934 Bank Debits— 24 cities . . ........... 31,682.000 Savings Deposits— end of M onth: 41 Banks, O. and Pa.......... ........... 3 645,569 Life Insurance Sales: Ohio and Pa........................... ...... 3 89,306 Retail Sales: Dept. Stores— 49 firms , ...... 3 16,168 Wearing Apparel— 11 firms. . . .3 768 Furniture— 42 firms....................3 858 Wholesale Sales: Drugs— 13 firms................... ...... 3 1,228 Dry Goods— 10 firms......... ...... 3 1,081 Groceries— 33 firms............ 3,307 S Hardware— 14 firms........... ...... 3 1,339 Building Contracts— Total. ...... 3 10,810 1,950 ” ” — Residential. 3 3,328 Commercial Fallures— Liabilities.3 922 ” ” — Number. . . Production: Pig Iron, U. S....................... 1,736 Steel Ingots, U. S................ 2,936 Automobiles— Pass. Car. . . . U. S. 292,8122 67,8082 ” — Trucks .U . S. Bituminous Coal................. . . tons 10,910 Cement— O., W . Pa., W . Va. bbls. 681 Electric Power— O., Pa., K y. 1,236* 1,9653 Petroleum— O., Pa., K y .. ..b b ls . S h oes........................................ . Pairs ( 3) (5) Tires, U. S............................Casings 5,025* Bituminous Coal Shipments: 1,620 Lake Erie Ports............ 1 2 8 4 not available actual number March first three months Cincinnati. . . . Hom estead.. . . Percentage Increase or Decrease SALES SALES ST O C K S April First 4 April 1934 months 1934 M iddletow n.. . + 4 5 .2 — 3 .3 + 9 .9 + 4 .1 + 4 .8 + 1 5 .8 — 5 .0 + 3 1 .5 + 9 .8 + 7 9 .5 + 1 7 .0 + 3 7 .8 + 2 6 .7 + 2 2 .7 + 3 0 .8 + 3 5 .7 + 4 1 .3 + 3 1 .1 + 3 5 .2 + 1 9 .4 + 4 7 .9 + 2 8 .4 + 2 2 .6 + 1 9 .4 + 2 5 .2 + 1 8 .5 + 2 7 .1 Youngstown. . — 1 5 .0 + 5 .0 — 2 .2 + 1 4 .9 + 3 5 .4 + 2 7 .9 + 1 1 .9 + 1 5 .1 + 1 4 .0 + 3 8 .5 + 9 2 .7 + 2 7 .5 + 3 2 .5 + 8 9 .7 + 8 4 .9 + 6 8 .6 + 5 1 .7 + 8 6 .7 + 3 7 .1 h-23.2 -7 8 .6 -9 8 .3 -6 8 .6 + 1 9 .3 + 1 1 .6 + 2 0 .9 + 18.1 + 3 4 .5 + 1 2 .7 + 2 5 .9 + 7 .3 + 2 1 .4 + 1 2 .3 + 1 4 .8 + 3 8 .9 + 3 0 .6 + 4 8 .3 + 4 3 .4 + 3 7 .8 + 1 3 .9 + 2 5 .5 + 2 2 .5 + 2 4 .5 + 2 8 .7 + 5 1 .2 + 4 3 .0 + 5 6 .3 . . . . + 22! i + 4 3 .0 + % changi from 1933 + 1 8 .0 1 6 .0 + 3 3 .6 316,425 + 1 2 .5 + 9 .8 — 2 .3 + 6 8 .6 56,$73 2,812 2,541 + 3 1 .1 + 2 7 .9 + 6 8 .6 + 3 0 .6 + 3 8 .9 + 1 4 .8 + 4 8 .3 + 118.6 + 1 3 .4 — 4 4 .6 — 4 9 .5 5,737 4,116 14,207 4,223 66,173 5,970 8,515 2572 + 4 3 .0 + 5 1 .2 + 2 8 .7 + 5 6 .3 + 2 5 1 .2 + 2 1 .8 — 6 4 .2 — 6 7 .6 + 1 7 8 .2 + 1 1 5 .4 + 9 0 .9 + 1 4 7 .8 + 3 8 .3 + 2 1 2 .4 5,858 9,941 877,6102 215,4932 51,309 1,336 + 1 5 6 .1 + 1 2 6 .4 + 9 3 .7 + 1 6 0 .8 + 3 8 .3 + 9 3 .3 + 2 5 .7 + 1 2 .1 — 7 .6 + 1 5 4 .3 3,578 5,400 (4) ( 5) 13,0344 + 2 2 .2 + 6 .3 — 8 .8 + 1 0 2 .5 1,780 + 2 1 .1 5 confidential 6 new series— March + 1 5 .2 (Thousands of Dollars) (1934 compared with 1933) D E P A R T M E N T STOR ES (49) A k r o n ................................................................ Cincinnati......................................................... Cleveland.......................................................... Columbus.......................................................... Pittsburgh........................................................ Toledo................................................................ Wheeling........................................................... Other Cities.................................................... District.............................................................. W E A R IN G A P P A R E L (11) Cincinnati........................................................ Other Cities.................................................... District.............................................................. F U R N IT U R E (42) Cincinnati......................................................... Cleveland.......................................................... Columbus......................................................... Dayton.............................................................. T o le d o .............................................................. Other Cities.................................................... District.............................................................. C H A IN STOR ES* Drugs— District ( 4 ) ..................................... Groceries— District ( 5 ) ............................... W H O L E S A L E G R O C E R IE S (33) Akron................................................................. Cleveland.......................................................... Erie..................................................................... Pittsburgh........................................................ Toledo................................................................ Other Cities.................................................... D istrict.............................................................. W H O L E S A L E D R Y GOODS ( 1 0 ) . .. . W H O L E S A L E D RU G S (1 3 ).................. W H O L E S A L E H A R D W A R E (1 4 ). . . ♦per individual unit operated. Jan.% change from April, 1933 1934 6,282,000 + 3 4 .7 Debits to Individual Accounts Greensburg. . . Wholesale and Retail Trade 7 Pittsburgh. . . . Springfield. . . . Steubenville... 5 weeks ended M ay 23, 1934 54,893 7,879 32,750 282,028 472,198 142,176 47,798 21,365 3,108 5,573 9,400 2,174 15,518 9,097 2,842 7,402 8,512 705,420 13,308 7,042 105,675 7,205 36,372 40,517 7,142 2,047,394 % change from 1933 + 7 7 .7 + 2 4 .9 + 77.8 + 2 2 .4 + 3 4 .8 + 4 5 .4 + 2 0 .1 + 2 5 .0 + 3 1 .7 + 3 3 .8 + 3 1 .6 + 2 0 .1 + 6 .5 + 5 6 .3 + 3 2 .2 + 1 1 .5 + 5 4 .9 + 3 0 .9 + 2 5 .0 + 5 9 .6 + 4 7 .5 + 3 8 .7 + 2 4 .8 + 4 8 .4 + 1 9 .8 + 3 3 .4 Year to Date Year to Date Jan. 3, 1934 Jan. 4, 1933 to to M ay 23, 1934 M ay 24, 1933 146,565 210,121 26,531 30,934 76,998 127,435 1,029,429 1,170,018 1,581,787 1,815,919 511,421 406,341 171,567 183,559 71,943 84,365 9,472 12,006 18,460 21,880 35,912 28,694 7,955 7,132 73,627 95,299 36,183 27,008 11,447 10,391 29,925 24,337 27,344 30,882 2,257,067 2,654,125 45,813 56,142 19,342 27,875 308,994 413,366 19,827 29,288 136,642 114,519 101,345 148,128 23,034 26,269 6,627,567 7,907,096 % change from 1933 + 4 3 .4 + 1 6 .6 + 6 5 .5 + 1 3 .7 + 1 4 .8 + 2 5 .9 + 7 .0 + 17.3 + 2 6 .8 + 1 8 .5 + 2 5 .2 + 11.5 + 2 9 .4 + 3 4 .0 + 10 .2 + 2 3 .0 + 1 2 .9 + 1 7 .6 + 2 2 .5 + 4 4 .1 + 3 3 .8 + 4 7 .7 + 1 9 .3 + 4 6 .2 + 1 4 .0 + 1 9 .3 Fourth District Business Indexes (1923-1925 = 100) Bank Debits (24 cities)............................................ Commercial Failures (N u m ber).......................... (Liabilities)....................... Sales— Life Insurance (Ohio & P a .)................... ” — Department Stores (47 firm s)................. ” — Wholesale Drugs (12 firms)..................... ” — ” Dry Goods (10 firms)........... ” — ” Groceries (33 firm s)............... ” — ” Hardware (14 firms).............. ” — ” All (69 firms)............................ ” — Chain Drugs (4 firms)**............................ Building Contracts — (T o ta l)............................... ” ” — (Residential)................... Production— Coal (O ., W . Pa., E. K y .) ............ — Cement (O., W . Pa., W . V a .) .. . ” — Elec. Power (O., Pa., K y .) * . . . . — Petroleum (O., Pa., K y .) * ............ Shoes*........................................................ ♦March ♦♦Per individual unit operated April 1934 62 63 75 107 74 82 44 57 69 60 73 23 11 60 57 147 106 96 April 1933 46 125 136 80 67 63 32 50 46 47 61 10 10 44 18 117 95 105 April 1932 64 145 182 93 68 81 36 58 51 56 74 23 11 49 26 129 105 85 April 1931 100 114 105 129 97 99 61 76 73 76 87 77 56 65 69 144 109 86 April 1930 122 93 58 155 109 106 80 90 84 90 86 98 74 85 121 147 129 79 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board for seasonal variation (1923-1925 rr 100). Latest figure, April (preliminary) 85. Indexes of daily average value of sales (19231925 = 100). Latest figures April (preliminary) unadjusted 72, adjusted 76. Y i'HOLESALl p r ic e : Com odities m '' s . ^.-, ------- 1 £ \a \\ Farm Products v / TO O t< 2 W W33 Indexes o f United States Bureau o f Labor Sta tistics, by months 1929-1931, by weeks, 1932 to date (1928 = 100). Latest figures for week ending May 16. Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for May 16. Volume o f manufacturing production increased during April, while the output of mines declined. Employment and pay rolls continued to increase. The general level o f comm odity prices remained substantially unchanged during April and the first three weeks in May, although prices of individual commodities showed considerable changes. Production and Employment Production o f manufactures, which had increased continuously since last November, showed a further advance in April, according to the Board’s seasonally adjusted index, while output o f mines was smaller in April than in March. The Board’s combined index o f industrial production remained practically unchanged at 85 per cent o f the 1923-1925 average. The growth in manufacturing reflected increases in iron and steel, automobiles, and meat packing. Lumber production declined in April, and activity at wool and silk mills was considerably reduced, while cotton consumption by mills showed little change. Crude petroleum output continued to increase, but there was a more than seasonal decline at the beginning o f April in the mining o f both anthracite and bituminous coal. During the first two weeks o f May steel operations increased further, but declined somewhat in the third week. Output o f automobiles decreased considerably in May. Volume o f employment and wage payments continued to increase in April and employment in factories, according to the new index o f the Bureau of Labor Statistics, was larger than at any time since the end o f 1930. There was a substantial seasonal increase in the number o f workers employed in private construction as well as in those engaged in projects financed by the Public W orks Administration. Employment on railroads, in metal mining and quarrying and in various service activities also increased further, while in coal mining there was a considerable decrease. Construction contracts awarded during April, as reported by the F. W . Dodge Corporation, were smaller in value than during March. There was a substantial decline in public works contracts, while contracts for privately financed projects showed a slight increase in April. Following extended drought in important grain areas, the Department o f Agriculture forecast of the winter wheat crop was reduced from 492,000,000 bushels on April 1 to 461,000,000 bushels on May 1. This compares with a five-year average for 1927-1931 o f 632,000,000 bushels. The condition of rye, hay and pastures has also been adversely affected by the drought. Distribution Railroad freight car loadings declined in April as compared with March, and in the first half o f May there was a smaller than seasonal increase in total loadings. The April decline was largely the result o f a substantial decrease in coal shipments from the relatively large volume o f March. Department store sales showed little change from March to April, after allowance is made for differences in the number o f business days, for usual seasonal changes, and for changes in the date of Easter. Sales continued larger than a year ago. Commodity Prices The general level o f wholesale com m odity prices, as measured by the Bureau of Labor Statistics index, has shown little change during the past three months. Prices of grains, cotton, silk and silver, which declined sharply in April, rose during the first three weeks of May. Rubber prices advanced sharply until early in May, but subsequently declined somewhat, and prices of textile products declined during recent weeks. Steel scrap has declined since March, while finished steel products, automobiles, nonferrous metals, and building materials advanced. Cattle and beef prices rose during April and the early part o f May, while prices of hogs declined. Bank Credit Excess reserves o f member banks remained at a level of about $1,600,000,000 between the middle of April and the middle of May. There were no considerable changes in monetary gold stock or in money in circu lation. The total volume of reserve bank credit also showed little change. At reporting member banks in leading cities in the five weeks ending May 16 there were decreases o f about $240,000,000 in loans and of $80,000,000 investments, the latter reflecting a decrease in holdings of securities other than those o f the United States Government. Net demand and time deposits increased by nearly $200,000,000, while United States Government deposits were reduced by about $300,000,000. Short-term money rates in the open market continued at low levels during May and yields on United States Treasury bonds declined further to the lowest levels o f the post-war period.
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