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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. 8 Cleveland, Ohio, November 1, 1926 Conditions in the Fourth District on the whole are hardly as favorable as a month ago. Some manufactur ing lines continue to operate at high levels— shoes, for example— and retail trade in September was 7 per cent over last year. On the other hand declining tendencies have appeared in certain quarters. The crops have suf fered, as in most other sections of the country; the im portant iron and steel industry slowed down in October; building permits in September were 17 per cent below last year; and the decline in automobile production in Sep tember from August affected the parts manufacturers in this District. The coal trade is comparatively good at present, but this is caused by conditions peculiar to that industry. Third quarter earnings of industrial corporations in the country, whose statements have been published so far, indicate that the excess o f business profits over last year has been gradually declining. Thus the net earn ings o f 41 representative corporations, including some o f the industrial leaders, were 11.2 per cent greater than last year during the third quarter, while in the second quarter they were 13.8 per cent greater, and in the first quarter 16.7 per cent greater. It is interesting to note that there has been a gradual increase in net profits along with the decline in the percentage gain of such profits over last year, the explanation being found in the fa ct that there was a sharper increase in profits by quarters in 1925 than in 1926. Comparative figures are as follow s: Net profit* (after all deductions but before dividends) of 41 represen tative industrials. First Nine Second Third Quarter Quarter Quarter Months (In thousands of dollars) 1926 $48,581 $165,402 $65,668 $61,163 41,684 136,619 1926 44.940 60,046 + 13.7 + 16.7 % gain + 18.8 + 11.2 35 No. gained 31 30 28 No. loat 10 13 11 Financial Couditions Member bank borrowings from the Federal Reserve Bank of Cleveland in creased sharply during the week ending October 13, amounting to $74,187,000 on that date as compared with $43,996,000 on September 15, and $78,000,000 a $ear ago. A seasonal increase is to be ex N o. 11 pected at this time in connection with the harvesting and marketing of crops. The trend of borrowings for the Federal Reserve System as a whole has been simi lar to that of this bank;— bills discounted rose from 566 millions on September 15 to 704 millions on October 13, the latter figure being 61 millions more than a year ago. Holdings of acceptances by this bank changed but little during the month, totaling $27,238,000 on Oc tober 13, and government securities are at about the same level as fo r three months past, with a slight declining tendency. Holdings of such securities on Oc tober 13 were $33,690,000. Federal Reserve note cir culation increased slightly during the month, and de posits were about the same on October 13 as on Sep tember 1. Loans of reporting member banks in the District on October 13 showed practically no change from the pre vious month. This was true both of loans secured by stocks and bonds and “ all other.” In the United States, however, loans secured by stocks and bonds declined while all other loans increased materially, and total loans were up from 14,316 millions to 14,407 millions. Interest rates in Pittsburgh have remained virtually unchanged during the month, but those charged by the larger Cleveland banks have stiffened somewhat on certain classes of paper. In both cities, the rates on prime commercial paper on October 15 ranged between 5 and 6 per cent, and loans secured by stock exchange collateral were also being made largely within this range. Savings deposits of 70 large banks in the District were $908,148,743 on September 30, 1926, a loss of 0.1 per cent from the preceding month but a gain o f 4.5 per cent from a year ago. Commercial failures in the Fourth District, accord ing to R. G. Dun and Company, numbered 155 in Septem ber, as compared with 131 in September, 1925. Liabili ties were $1,888,576 this year, and $1,439,015 a year ago. In the United States there were 1,437 failures in September 1926, and 1,465 in tfie same month last year. Liabilities were $29,989,817 and $30,687,319 re spectively. 2 THE MONTHLY BUSINESS REVIEW Federal Reserve Bank Gold reserves ................ Discounts ........................ Acceptances .................... U. S. Securities ............ Total bills and securities Federal Reserve notes in circulation .................... Total deposits .................. of Cleveland Federal Reserve System (In Millions) (In Millions) Oct. 13, Oct. 14, Sept. 15, Oct. 13, Oct. 14, Sept. 15, 1926 1925 1926 1926 1925 1926 $279 $306 $293 $2,819 $2,766 $2,883 74 78 44 704 644 566 27 17 25 291 287 262 34 31 43 308 336 488 135 127 112 1,307 1.276 1,320 211 188 230 194 207 193 1,756 2,274 1,716 2,288 1,724 2,417 Reporting Member Banks Fourth District United States fin Millions) (In Millions) Oct. 13, Oct. 14, Sept. 15, Oct. 13, Oct. 14, Sept. 15, 1926 1925 1926 1926 1925 192G Loans secured by stocks and bonds .................... All other ........................... Total loans ...................... Investments .................... Demand deposits ............ Time deposits ................ $573 814 1,387 654 1,072 825 $502 795 1.297 634 1,029 749 $572 815 1,387 654 1,084 821 $5,542 8,865 14,407 5,596 13,146 5,736 $5,192 8,674 13,865 5,462 13,178 5,248 $5,582 8,735 14,316 5,655 13,274 5,684 Iron and Steel October in the iron and steel industry was marked by conflicting forces and statistics. Consumption on the whole shrank only moderately, but in regard to new buying, especially after the middle o f the month, many con sumers were inclined to become more conservative. Sea sonal factors and bad weather served to disturb the surface tranquility of the iron and steel markets, yet underneath there appears to be a substantial footing of sound business. One reason for lighter consumption is found in the fact that the end of a quarter usually sees 'contracts specified out in their entirety if the price situation makes such action advisable. This year some consumers approached the end of the third quarter with contracts based under the current quotations of $2.00 (Pittsburgh) for steel bars and structural shapes and $1.90 for plates. Finding producers standing firm on their higher prices, these users took out every ton of contract material. The carryover thus militated against bookings early in October. Demand from automobile makers has slackened, due in part to the excessive rains that have soaked northern and eastern sections of the country, reducing motor travel and curtailing public buying. Farm implement manu facturers also have encountered a buying rate under their expectations and have modified their production schedules to some extent. The weather has been bad for the canners, and after two years of record busi ness, tin plate manufacturers notice a shortened de mand. Both pig iron and steel ingot production in Sep tember fell slightly under the August totals, but ap proached the previous September records. Ingot pro duction, at 3,930,675 tons, has been exceeded only once in September, and the pig iron total of 3,161,604 tons was second only to that o f 1918 and 1916—-both war years. On October 1 there were 216 pig iron stacks active, or 58.2 per cent o f the country’s serviceable number. This was one more than at the beginning of September, and since then at least one more stack has been lighted. The trend in October was toward slightly lighter operations by independent producers and slightly higher by the United States Steel Corporation. The unfilled tonnage o f the corporation on October 1 was 51,174 tons higher than on September 1, due in large measure to early placement of 1927 rail orders. The same condition obtained in October. Only twice in its history has the United States Steel Corporation gone into an October with a smaller backlog o f orders, yet its ingot rate was holding steady at the high point o f 85 to 86 per cent. Cleveland continues one o f the lightest building cen ters o f the country so far as demand fo r structural steel and reinforcing bars is concerned. This is largely a reaction to the building trade labor tieup of last spring. Sheet makers in the Mahoning Valley have now well established the second raise of $2.00 per ton in tw o months, and while specifications from the autom otive industry have declined slightly, deliveries on some grades are eight to ten weeks distant. Oil field demand keeps the Youngstown lapwelded pipe mills at capacity. P ig iron at Cleveland and in the Mahoning Valley is firm er Cleveland producers now asking $19.50, furnace, fo r Cleveland delivery. This is an advance o f 50 cents. Basic iron in the Valley is at $18.00 and No. 2 fou n d ry and malleable at $18.50. In mid-October the Iron Trade Review composite o f 14 leading iron and steel products stood at $38.13, com pared with $37.78 in mid-September. Since early Sep tember this index has been rising, largely because o f strengthening pig iron and sheet quotations. Fuel prices are playing an increasingly im portant part in the iron and steel markets this quarter. The British coal strike has led to demand fo r Am erican coal that has moderately increased coal prices in the Pittsburgh district. This may prove only a tem porary stimulus, depending on the length of the strike, but meanwhile the seasonal increase in demand is at hand caused by normal domestic winter requirements. F ur thermore, many consumers are beginning to augment their stock piles in anticipation o f a possible suspen sion of mining in the bituminous fields next April. The coke factor in a ton of pig iron is now about $1.00 higher than in the early summer. Some o f the higher pig iron prices have been in anticipation o f still higher coke. Coal The outstanding feature o f the soft coal situation continues to be the de mand from England caused by the B rit ish coal strike. This has been felt in the eastern fields particularly in eastern Kentucky (included in the Fourth District) and West Virginia, and has had the effect temporarily at least, of strengthening prices and in creasing production. A t the same time the usual sea sonal increase in buying fo r winter requirements has taken place, also tending to stimulate production and prices. The two above factors combined brought the Coal A ge average price of bituminous from $1.96 on A ugust 13 to $2.27 on October 8, and resulted in a gain o f production during September and early October which was greater than seasonal. Prices are now higher than fo r many months, and production during the first tw o THE MONTHLY BUSINESS REVIEW weeks of October finally crossed the 1923 production curve, after running behind since February, and also exceeded 1922, 1924, and 1925. Coincident with these developments have been the disappearance of surplus labor in many sections, with actual shortage reported here and there, and a reduction in the car surplus avail able fo r coal transportation. In the Fourth District, some buyers have been holding off, awaiting a possible settlement o f the British strike. Operators in general, however, are doing a good vol ume o f business at higher prices. Retailers also re port an improvement in business. Householders are buying as usual for winter, which means a seasonal gain in retailers’ sales. Some difficulty is reported on account of car shortages. Mines have reopened here and there, both in Ohio and Pennsylvania. Robber The third quarter was one o f the busand iest on record for Akron tire manufacTires turers. Operations were close to ca pacity throughout the quarter, follow ing the summer price cut. Reports indicate that the actual volume of business of Akron manufacturers the third quarter was about 25 per cent greater than in the same period last year. The first part of October was marked by a sea sonal decline in operations. The general situation is satisfactory, however, as dealers’ stocks are reported to be rather low, and stocks in manufacturers' hands on the latest available date showed a further reduc tion from the excessively high level of spring. Pre liminary reports of the United States Department of Commerce indicate an average of 48 casings per dealer in the United States on October 1, as compared with 56.6 a year ago. An important factor in the price situation has been the rapid decline in cotton, which is used extensively in tire manufacturing. This commodity sold around 20 cents a pound early in the year, declined gradually to 17 cents in September, and slumped severely to slight ly less than 13 cents in October. As to the price of crude rubber, it has been steady during the past few weeks at around 43 cents a pound. A slight upward movement occurred during the latter part of Septem ber which brought the price from 40 cents early in the month to 43 cents at the beginning of October, but since the latter date there has beeu but little varia tion, and on October 19, first latex (spot) was quoted at 42% cents. Some uncertainty exists with regard to crude rubber prices on account of the possibility o f a change in the present export restriction law on the part of the British. Production of high pressure inner tubes in August totaled 3,543,903, as compared with 4,436,578 the pre ceding year. Balloon inner tube production increased from about 1,300,000 in August, 1925, to 2,020,347 in 1926. Shipments of high pressure inner tubes exceeded production in June, July and August, and of balloon inner tubes in the two latter months, with a consequent reduction in stocks. Inventories in manufacturers' hands, however, on September 1 were considerably higher than a year previously. 3 Antomobiles Production of passenger cars in the United States in September totaled 350,811, as compared with 263,855 a year ago. The figures fo r trucks were 46,312 and 58,002 respectively. The large gain over September, 1925, is partly accounted fo r by the fact that in both August and September of last year the output was affected by inventory-taking and new models. September pro duction showed a drop o f about 30,000 from August, which is not unusual at this season. Although the output o f cars and trucks combined has been at record high levels throughout most of the year— the first nine months showing a gain o f 15 per cent over last year, which marked the previous high record— reports indicate that conditions within the in dustry are spotted, with some companies experiencing a very great volume of sales while others are falling behind last year. For the first nine months, passenger car output was 3,118,461 in 1926 and 2,695,057 in 1925, and that of trucks, 385,888 and 363,505 respectively. Clothing Retail buying o f ready-made clothing in department stores in the Fourth District was well ahead o f last year in both September and October. Large increases were shown in October in boys' wear, furs, and juniors’ and girls' ready-to-wear, while substantial gains also were recorded in men’s clothing, women’s coats, misses’ readyto-wear, and infants’ wear. This indicates that so far as the retail end of it is concerned the clothing business at present is in good volume. Manufacturers report operations at a high level fo r the most part, but there is some complaint of the low prices received for their goods, resulting in small profits. Makers o f women’s dresses state that demand is strong resulting from de pleted stocks in jobbers’ hands. Buying, though urgent, continues on a hand-to-mouth basis, consumers showing no disposition to stock up to any extent. Sales of 17 reporting wholesale dry goods firms showed a loss of 1.7 per cent in October from the same month last year. This loss is somewhat smaller than in the three preceding months. Shoes The manufacturing, wholesale, and re tail branches of the shoe industry in this District continued at comparatively high levels during the past month. This was particu larly true of the wholesale end of the trade; sales o f reporting wholesale shoe firms in September showed a remarkable gain of 19.4 per cent over last year, and an increase o f 31.8 per cent over August, the latter gain being considerably more than seasonal. September sales not only exceeded those o f any other September in the five preceding years, but were also the largest fo r any month since March, 1923. Earlier in the year, sales were running behind the 1921-1925 level, but a sudden change fo r the better took place in July, and sales in July, August and September, were all higher than fo r the corresponding months in the 1921-1925 period. 4 THE MONTHLY BUSINESS REVIEW Retail shoe sales in department stores also showed up well in September. September reports from 42 firms indicate a gain of 17.3 per cent over last year in men's and boys’ shoes, and of 7.3 per cent in women’s and children’s. As in the case of the wholesale shoe trade, retail sales have compared favorably with 1925 fo r the last three months. Production schedules of Cincinnati manufacturers in September were at a higher rate than in August, which was also a busy month. Fall orders are reported to be well in excess of those received last spring, but a seasonal slackening in mid-October was apparent. Or ders are still for quick delivery. Preliminary production figures for September, com piled by the Census Bureau, show a gain over August of 15 per cent in the Fourth District and o f 7 per cent in the United States. August production in this Dis trict was 6 per cent over July, but 6.6 per cent less than August, 1925. In about 1150 factories in the country, 29,495,558 pairs were made in August and 25,051,963 in July. General Manufacturing Conditions in various lines of manufacture throughout the Fourth District are about the same as a month ago. A good deal of business is being done, some of it at a narrow margin of profit; but on the whole the large volume makes the return to the manufacturer satisfac tory. Prices in most cases have been very steady. Business in electrical goods appears to be better than last year, and in one case an improvement in the last 30 days is noted, but with a falling-off in collections. Paint manufacturers continue to enjoy a large amount of business, and if the present rate should continue, 1926 in many cases would show a greater volume than 1925 despite the poor start in the first quarter. A gri cultural implement makers also report sales as good or better than last year. Other lines report but little change except seasonally. is now shown all over the District. This decrease ap pears to be greatest in the level counties o f Ohio where the soft condition of the fields prevents harvesting the crop. The Ohio Department o f Agriculture reports a decline o f some 20 per cent from last year, Pennsylvania about 12^2 per cent, with the southern portion o f the District showing increases o f from 15 to 18 per cent. In comparing the crop with that of 1925, it should be re membered that last year’s yield was far above the av erage. The United States Department o f Agriculture in its latest available forecast fo r the country at large, indi cates a total production o f 8 per cent less than in 1925 and 6 per cent below the average o f the last five years. Potatoes— Government estimates o f the potato crop show a decline o f slightly less than 10 per cent from last year in the entire country, while the estimated decrease in this District is 13.4 per cent. Recent re ports from various points in the District show that the crop has begun to rot in the ground, the wet w eather interfering with digging. Fruits— Practically all fruit crops have been v ery good throughout the District, although grapes and com mercial apples did not quite come up to earlier ex pectations. The excessive moisture resulted in som e cracking o f apples, and considerable loss in the total yield o f grapes from rotting on the vines. Even w ith these losses the crops are much better than the 5-year average. Hay— The hay crop is estimated at from 6 to 10 per cent below that o f last year’s short crop. The decline from last year in the entire country is estimated at per cent. Pasture— Pasturage is reported as much better than usual at this season o f the year, due to the rainy weather and the delay o f killing frosts, and cattle in general are in good condition. Tobacco Agriculture The agricultural situation in the Fourth District, as compared with government forecasts of a month ago, is somewhat disappointing. Agricultural forecasts o f last month have been upset by the unusually adverse weather condi tions which existed during the past few weeks. The almost continuous rains o f late September and early October seriously damaged all crops, in some instances retarding maturity, and in others preventing the prompt harvesting o f the crop. Oats— The oats crop was the first to suffer from the excessive rainfall, the wet weather rendering harvest ing and threshing impossible in numerous instances, and many fine fields were ruined. The quality in territories where the loss was not so great is reported as the low est on record. Corn— Corn, which suffered in the drouth of early summer improved with the coming of the later rains, and prospects indicated a total yield almost equal to last year’s bumper crop, but the continued rainfall pre vented hardening of the kernels, and a marked decline Heavy rains in Kentucky during Sep tember and October hampered the har vesting and curing o f the bulk of the Kentucky burley crop, although some tobacco was cured before the abnormally wet weather set in. A s a re sult of this damage, Kentucky production on O ctober 1 was estimated at 367,723,000 pounds, a decrease o f some 14,000,000 from the September 1 estimate. These are the Department of Agriculture’s figures fo r all tV D The United States crop on October 1 was estimated at 1,293,918,000 pounds, a decrease o f 12,500,000 from Sep tember 1. The latest estimates fo r both Kentucky and the country indicate a crop somewhat smaller than last year, and the Kentucky figure is also materially l e « than the 1921-1925 average. During the early part of October, the Burley Tobacco Growers’ Association sold 24,000,000 pounds o f the 1923 crop to the American Tobacco Company, this being the first large sale since spring. A sale o f one million pounds fo r export is also reported, making nearly ten million pounds exported by the Association since 1924 Although sales abroad are as yet a very small THE MONTHLY BUSINESS REVIEW of the total, a start in this direction has been made dur ing the past two years, as no tobacco was sold fo r export by the Association before 1924. Building For the sixth successive month, the value of building permits in the United States during September was less than for the corresponding month in the year, according to Bradstreet’s. With the exception o f 1925, however, the value of September permits established a record for that month. The September figure was 275 millions, as compared with 317 millions in August and 321 in Sep tember, 1925. For the third quarter there was a de crease of 11.6 per cent from last year, and fo r the nine months a loss of 5.9 per cent. Individual sections of the country show wide varia tions for the 9 months’ period. For example, New E ng land permits declined nearly 25 per cent from last year, while New York City and the Southern States managed te show slight gains. The Northwestern, Southwestern, and Far-western groups showed sizable losses, while decreases in the mid-Atlantic and Central western sections were small. In the Fourth District, 27 cities showed a loss of 17 per cent for September and 14.6 per cent for the nine months. Very large gains for the month took place in Cincinnati, Mansfield, Canton, and Barberton, and smaller increases for Akron, Columbus, Covington, and some of Cleveland’s suburbs. Declines took place in 17 out of the 27 cities, the largest being in Ashtabula, Euclid, Lake wood, Erie, Lexington, Lima, Newark, Pittsburgh, and Youngstown. F or the nine months, all cities showed losses except Akron, Ashtabula, and Youngstown. Building Operations Akron......................... A s h t a b u la ...................... Barberton.................. Canton........................ Cincinnati................. C lev e la n d p r o p e r .... “ suburbs: Cleveland H eists Ea*t Cleveland. . . Euclid.................... G arfie ld H eights. . Lakewood............. Parma..................... Rocky River........ Shaker Heights. . Columbus.................. Covington, Ky......... Dayton....................... Erie, Pa.. .................. L e x in g to n , Ky.......... Lim a.. . . ................... Mansfield.................. Newark...................... Pittsburgh, Pa.......... Springfield................ T o l e d o ............................. Wheeling, W. Va... . Y o u n g sto w n ................ September, 1926 (Valuation of Pet mits) September % change Jan.-Sept. 1926 iFrom 192 5 1926 %1,090,698 + 2 3 . 3 312,250,624 898,411 51,914 — 45 6 114,000 + 8 5 . 4 723,339 668,949 + 56. 9 4,573,656 23,011,424 3,443,094 + 122. 2 4,128,250 — 24, 0 51,481,975 . 530,065 + 10. 6 5,434,382 250,621 + 33. 1 1,086,582 111,340 — 51. 3 1,318,498 9 2 232,900 1,889,950 223,946 — 51., 5 3,251,185 1,252,638* 120,245 — 3 4 656,665 93,130 — 14 3 566,050 + 10..2 5,790,255 20,567,900 2,211,700 + 5 .9 165,600 + 32 . 8 1,866,500 6,991,783 598,923 — 20 .6 4,397,897 609,922 — 51 .7 1,472,988 75,775 — 58 .5 1,084,029 56,918 — 94 .4 2,738,526 596,515 + 244 .3 329,650 17,150 — 61 2 1,843,936 — 59 ' 2 29,950,402 118,959 — 17 .0 ; 1,117,743 834,261 .0 , 10,464,451 211,007 — 30 . 8 1,321,872 7,697,372 589,680 — 45 .8 Total.................. 19,605,548 ♦January omitted. B uilding M aterials „ __ — 17 .0 202,620,697 Jan.-Sept, % chance 1925 fro m 1925 £11,644,279 + 5. 2 762,841 + 17. 8 740,661 — 2. 3 6,723,828 — 32. 0 23,882,355 — 3. 6 53,333,150 „ 3. 5 7,719,100 3,189,398 1,515,845 2,747,250 5,447,515 1,276,750* 737,777 7,661,955 23,185,400 2,042,850 10,833,816 7,377,857 1,739,434 2,083,986 2,791,170 475,135 34,378,419 1,280,228 13,847,556 3,022,577 7,526,565 237,967,697 — 29. 6 — 65. 9 — 13. 0 — 31. 2 — 40. 3 — 1.9* — 11 0 — 24. 4 — 11..3 — 8,.6 — 35,.5 — 40,.4 — 15 ,3 — 18 .0 — 1 .9 — 30 .6 — 12 .9 — 12 .7 — 24 .4 — 56 .3 + 2 .3 — 14 .9 With the tapering off in building construction, operations o f lum ber m an ufacturers in the D istrict have eased slightly. The volum e o f business in softw ood s w as un usually good during the summer, norm ally a dull period, 5 but has fallen short o f expectations in October when busi ness is usually large. Activity in the Pittsburgh region is rather low, sales being considerably below last year. Operations in Southern Ohio are reported to be hold ing up well. Prices of softwood lumber have strengthened slightly since the middle o f September. Cement production fo r Ohio, Western Pennsylvania and W est Virginia was 1,797,000 barrels in September, as compared with 1,620,000 in the same month of 1925. F or the entire year of 1925, Pennsylvania ranked first of all the states in cement production, with over 25 per cent of the total, and Ohio ranked ninth, with nearly 4 per cent. In consumption of cement, Pennsylvania was sec ond and Ohio sixth. The Aberthaw index o f industrial building costs re mained unchanged on October 1 at 197. Retail Trade Sales of 67 department stores increased 6.9 per cent over September, 1925, all reporting cities sharing in the gain ex cept Newcastle and Canton. The largest increase oc curred in Dayton, which also showed the largest gain for the first nine months. The District as a whole gained 1.1 per cent in sales for the first three quarters. Preliminary reports on sales by departments indi cate a general increase over last year in all classes o f goods sold. Most o f the ready-to-wear departments were higher, the notable exceptions being women's suits, waists and blouses, and sweaters, and these particular lines have been running behind fo r some time. House hold goods were mostly higher, as were gloves, millinery, furs, silverware and jewelry, shoes, etc. Musical in struments showed a gain of 34.4 per cent. Yard goods were lower, as were laces, ribbons, art goods, and lug gage. The very wet weather had an effect on um brellas, which gained 82.7 per cent, and doubtless brought out earlier buying than usual in other lines of winter wear such as furs and women’s coats, both o f which showed material increases. Wholesale Trade September sales of five reporting wholesale lines in the Fourth District compared favorably with last year on the whole. Shoe sales easily made the best comparison, with a gain o f 19.4 per cent. Hardware increased 4.5 per cent, and drugs 2.6 per cent. Both groceries and dry goods registered small decreases; 0.1 per cent for the form er and 1.7 fo r the latter. As compared with August, substantial increases took place in all lines, but probably the greater part of these gains were seasonal. For the first 9 months of 1926, shoe sales were 10 per cent ahead of last year, and drugs, 6.2 per cent. Gro ceries were down 2.3 per cent, dry goods, 5.0, and hard ware, 1.1. Stocks on hand at the end o f September were ma terially lower than a year ago than fo r all lines except shoes for which there was a very slight gain. As com pared with August 31, stocks were less fo r all lines, but open book accounts were greater. Open book accounts were also above a year ago except in the case of groceries. THE MONTHLY BUSINESS REVIEW 6 Fourth District Business Statistics (All figures are for Fourth District unless otherwise specified) September 1926 Bank Debits (23 cities) Savings Deposits (end of month) Ohio (43 banks) Western Pennsylvania (27 banks) Total (70 banks) Commercial Failures— Number “ “ — Liabilities Postal Receipts— 9 cities Sales— Life Insurance— Ohio and Pa. “ — Dept. Stores— (54 firms) “ — Wholesale Grocery (49 firms) “ — “ Dry Goods — (17 “ ) 14 — “ Hardware — (16 “ ) “ — “ Drugs — (16 “ ) Building Permits, Valuation— 27 cities Production — Pig Iron, U. S. “ — Steel Ingots, U. S. “ — Automobiles, U. S. Passenger Cars Trucks “ — Bituminous Coal, 4th Dist. “ — Cement: Ohio, W. Va., Wn. Pa. “ — Petroleum: Ohio, Pa., Ky. “ — Shoes, 4th Dist. “ — Tires, U. S. Bitum:ncus Coal Shipments (from Lake Erie ports) Iron Ore Receipts (at Lake Erie ports) 1 2 Millions of dollars “ Thous of Tons “ “ “ Actual Number Thous. of Tons “ “ barrels “ “ “ Jan.-Sept. 1926 Jan.-Sept. 1925 2,775 + 2.7 26,622 636,797 232,322 869,119 131 1,439 2,951 78,016 21,609 8,163 4,063 2,204 1,879 23,631 2,726 3,493 + 4.9 + 3.5 + 4.5 + 18.3 + 3 1 .3 + 2.3 + 1.9 — 1.7 + 4.5 + 2.6 — 17.0 + 15.0 + 12.5 656,425' 237,638* 894,063* 1,575 31,887 26,454 843,512 198,795 62,295 27,666 18.771 16,650 202,621 29,402 35,846 613,389* 230,536* 843,925* 1,434 33,034 24,582 824,327 197,787 63,828 29,136 18,977 15,679 237,394 27,076 32,391 272,360 59,236 + 3 3 .1 — 17.8 1,797 1,955* “ pairs “ casings “ tons Change 25,352 362,S00 48,700 “ “ “ Actual Nuraber Thous. of dollars “ Change 2,850 667,715 240,434 908,149 155 1,889 3,018 79,491 22,894 8,230 3,995 2,304 1,929 19,606 3,136 3,931 Thous. of dollars “ September 1925 4,448* 3,540 7,346 + 6.0 + 0.8 1,620 1,841'* 4,280’ 3,430 5,646 + 10.9 + 6.2 6.6 3,255,558 408,254 7.0 3.1 S .9 9.8 3.5 7.6 2.3 0.5 2.4 5.0 — 1 .1 + 6.2 — 14.6 + 8.6 + 1 0 .7 2,787,223 367,211 11,794 14.9163 11,667 14,762s 4 — + 3.9 + 3.2 + 3 0 .1 + 5.0 + + + + — + + + — — 31,528s 22,250 31,986 32,293s 19,800 30,306 + 16.8 + 11.2 + 1.1 + 1.0 — 2.3 — 2.4 + 1 2 .4 + 5.5 9 months’ average August 3 Jan.-August * Figures Confidential Index Numbers of Trade inthe Fourth Federal Reserve District Retail and Wholesale Trade No. of Reports D EPARTM ENT STORES Akron.......................................................5 Canton............................................ ........3 Cincinnati....................................... 7 Cleveland................................. . 6 Columbus....................................... ........7 Dayton............................................ ........ 3 New Castle..................................... 3 Pittsburgh...................................... 7 Toledo............................................. 4 Wheeling......................................... S Youngstown................................... ........ 3 Other Cities................................... 14 District............................................ 67 W EARING APPAREL Cincinnati....................................... 6 Cleveland........................................ 4 Other Cities.................................... 9 District............................................ 19 FURNITURE Canton.....................................................3 Cincinnati....................................... 11 Cleveland............................................... 9 Columbus..................................... .. 16 Dayton.......................................... 1 5 Toledo............................................. ....... 6 Other Cities.................................... 11 District............................................ 61 CHAIN STORES* Drugs— District............................ ....... 3 Groceries— District.............................. 5 WHOLESALE GROCERIES Akron.......................................................3 Cincinnati....................................... ........3 Cleveland................................................4 Erie.................................................. ....... 4 Pittsburgh....................................... 10 Toledo......................................................3 Other Cities.................................... 27 District............................................ 54 WHOLESALE DRY G O O D S.. . . 17 WHOLESALE D R U G S................. 16 WHOLESALE H A R D W A R E .. . . 16 WHOLESALE SHOES................... ....... 6 ♦Sales per individual unit operated. Percentage Increase or Decrease SALES SALES Sept. 1926 Jan.-Sept. 1926 compared with compared with Sept. 1925 Jan.-Sept. 1925 + 1.1 — 1.1 — 5 .8 + 5.4 + 4.9 + 1 3 .1 + 2 3 .2 — 7.4 + 5.9 — 3.4 + 5.8 — 0 .4 + 2.7 + 1 3 .9 — 10.6 — 0 .3 + 2.5 + 2 4 .2 + 7.0 + 6 .9 + + + + Department Stores (52)*................ Wholesale Drugs (15)*.................... Wholesale Dry Goods (16)*........... Wholesale Groceries (49)*. . . Wholesale Hardware fl5 )*......... Wholesale Shoes (6 ) * . . . . . Wholesale-All (101)*............ .W ” Chain Drugs (3 )*f............................ Sept. 1922 92 Sept. 1923 99 102 107 108 118 in? 106 98 112 17 c *22 102 97 106 92 101 11 Sept. 1924 Sept. 1925 101 99 117 97 O? 108 - 100) Sept. 1926 105 121 95 95 109 102 — 3 .6 + 3.4 + 5.1 + 2 2 .9 + 2 3 .6 (Average Monthly Sales for the Five-Year Period 1919-1923,inclusive + 6.6 + 8.6 + 1 8 .5 + 0.2 + 11 — 0.2 + 0.2 + 4.5 — 8.7 + 8.4 + 0.5 — 0.01 — 7.9 + 2 .9 + 2.5 — 0.1 — 1.7 + 2.6 + 4.5 + 19.-1 + 3 .6 + 0 .7 — 9 .7 + 6.6 — — — + 4.3 1.3 9 .6 0.09 + 1.6 — 2.3 — 5 .0 + 6.2 — 1.1 +10.0 |jj 98 ?° 100 106 ♦Number of firms. tPer individual unit operated. Debits to Individual Accounts 6 .4 9 .4 2.3 6.3 + 2.3 + 1 1 .5 — 2.7 — 6 .4 + 3 8 .0 + 5.4 — 19.1 102 9g (In thousands of dollars) 4 weeks ending Oct. 13, % 1926 Change Akron..................... Butler, Pa.............. Canton................... Cincinnati............. Cleveland.............. Columbus.............. Connellsville, Pa.. Dayton.................. Erie, Pa.................. Greensburg, Pa.. . Homestead, Pa. . . Lexington, K y .. . . Lim a...................... Lorain.................... Oil City, Pa.......... Pittsburgh, Pa.. . . Springfield............. Steubenville.......... Toledo................... Warren................. Wheeling, W. Va. Youngstown......... Zanesville............ Total................... 96,783 + 0.2 12,315 + 8.1 41,290 — 1.0 322,913 — 1.6 767,820 + 1 6 .6 152,359 + 4.5 6,017 + 3 8 .1 81,253 + 1 6 .3 35,149 + 5.8 19,445 — 3.5 4,787 — 5.3 17,955 + 3.4 15,355 — 0.4 5,663 — 6 . 3 13,196 + 1.2 910,881 — 0.3 20,499 + 3.7 10,110 — 2.0 199,918 + 1.2 14,126 + 1.3 41,872 + 2.6 72,969 — 0.1 12,030 + 0.8 2,874,705 + 4 .6 1926 to date (Dec. 31Oct. 13) 893,627 106,824 456,167 3,462,183 7,061,748 1,512,824 51,976 831,206 337,065 195,813 44,442 221,991 155.299 58,356 134,573 8,891,269 228,913 104,622 2,085,498 128,100 440,789 664,967 120,395 1925 to date (Dec. 31Oct. 14) 835,404 104.158 451,511 3,268,300 6,498,425 1,366,055 43,715 736,617 322,053 191,899 44,257 219,735 173,884 64,550 141,615 8,716.703 205.074 112,122 1.943,149 129,486 418,355 648,858 116,566 Change + 7.0 + 1.0 + 2.6 + 5.9 + 8.7 + 10.7 + 1 8 .9 + 12.8 + 4.7 + + + 2.0 0 * 1.0 + 2.0 — 10.7 — 9.6 — 5.0 +11.6 — 6.7 + 7.3 — + + + 1.1 5.4 2.5 3.3 THE MONTHLY BUSINESS REVIEW 7 Summary of National Business Conditions (By the Federal Reserve Board) Industrial and trade activity increased in September and is at present in considerably larger volume than in midsummer. The price of cotton has declined sharply within recent weeks while prices of most groups of com modities have advanced. Volume of bank credit has increased seasonally and money rates have remained firm. Index of 22 basic commodities, adjusted lor seasonal variations (1919-100). Latest figure, September—121. P RC N E ET 200i-------- ,■ 19*3 P SC N C ET ,-------------------- 1200 19** .Production Production in basic industries and factory employment and payrolls, ac cording to the Federal Reserve Board’s indexes, after changing but little for about four months, advanced in September to the highest points since last spring. The increase has been particularly large in textile mill activity. Consumption of cotton has increased considerably, woolen mill activity is the largest since January and employment has increased in nearly all branches of the textile industry. Iron and steel production was maintained from early in August until the latter part of October at a level higher than for the corresponding period of previous years. Automobile output was reduced in September but continued larger than a year ago. Mining of coal has steadily increased since midsummer and the weekly run of crude petroleum from wells in October reached the highest level since June of last year. Building contracts awarded during August and September were only slightly smaller in value than the awards for the corresponding period of last year and in the first half of October far exceeded those of a year ago. The Department of Agriculture’s October 18 estimate placed cotton production at 17,454,000 bales, an increase of about three quarters of a million over the estimate made on the first of the month and of 1,350,000 bales more than last year’s crop. Trade Index of U. 8. Bureau of Labor Statistics (1918-100, base adopted by Bureau). Latest figure, September-150.5. «tuomor coua*9 2 -------------- Wholesale and retail trade increased in September and was slightly larger than last year. Inventories of department stores increased slightly more than is usual in September and at the end of the month were in about the same volume as a year ago. Railroad freight car loadings reached new high weekly records in September and shipments were maintained during the early weeks of October in much larger volume than in previous years. A great part of the increase as compared with last year is due to shipments of coal and ore but loadings of manufactured commodities have also been larger. Prices Monthly averages of daily figures for the 12 Federal Reserve Banks. Latest figures are averages of first 22 days in October. BILLIONS o r OCULARS The general level of wholesale prices advanced slightly in September and October, notwithstanding the drop in the price of cotton to the lowest level since 1921. The Bureau of Labor Statistics* index of wholesale prices was about one per cent higher in September than August, reflecting advances both in Agricultural and in non-agricultural commodities. In recent weeks prices of com, nonferrous metals, and paper have declined, while prices of livestock, meats, poultry and dairy products and bituminous coal have increased. B ILLIO S O DOUM*' N F A TM LLO IN E TM * T S /^ VS E \ L A SO S C R ie * O N N E U lT | i 1 MEMBiER BAIYK CREDIT i » _ 1 ---------- 1 _ Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are aver ages for first 3 weekly report dates in October. Bank Credit Between September 22 and October 20 the seasonal increase in the de mand for credit for agricultural and commercial purposes was reflected in a continued growth in the commercial loans of member banks in leading cities. Loans on securities and holdings of investments declined but the banks’ total loans and investments were about $60,000,000 larger on October 20 than four weeks earlier. At the reserve banks, the volume of member bank borrowing, after considerable fluctuations in response to the temporary conditions, was i® October at about the same average level as in September. There was little change in the banks* holdings of United States securities, while acceptance holdings continued to increase, as is usual at this season. Except for a temporary firming around the first of October, there been little change in the condition of the money market. Rates on mercial paper and on acceptances have remained at the levels estal in September. Index of National Business Conditions i ? pi £ R C IA L c c L U R E :5 PEP CENT PERCENT V V _ - A I I * n r\ PE R C -------- V ii 1 ! [ ,f t KV f i 0 0 ------------- * ------- ------- H 100 w ° A /\ j> A y 50 _0 O 1922 192 I 192 3 1924 19 2 5 o 1926 L C A R PER CEN T I O A D IN 6 S °E R ce :n t [ 1 i i ! I 1 i ; .so i j A (0 0 1922 1923 E X P O R T S f ’EP CgNT. O F 1924 I9 P * M E R C H A N D IS E — PCR Cg f j T i I !?co | !. i i 2 00 . . 1 9 21 0 ------- -------------------------------- ------- '0 0 j v s / * ss y ^ <v / * w 30 0 C O A L 192 ( 1922 t 92 3 192 4 1925 I9 2 6 t92< (9 2 2 1923 | 92 P R O D U C T IO N i 1/ w IjA 1921 1922 W \V V A / V A 192 3 t9 2 4 w 192 5 02 6 LATEST FIGURES 6. Wholesale Trade, August— 98. 7. Building Permits, September— 165. 8. Car Loadings, September— 135. 9. Exports of Merchandise, September— 94. 10. Bituminous Coal Production, September— 122. 11. Pig Iron Production, September— 125. 12. Automobile Production, September— 191. Member Bank Credit: Loans, September—1^5. Investments, Sep tember— 139. Member Bank Deposits: Demand, September— 120. Loans, Septem ber— 191. Check Payments, except New York, August— 118. Commercial Failures, September— 111. Retail FRASER Trade, September— 116. Digitized for / 50 4 l»aa 1926
@FedFRASER