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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the F o u r t h F e d e ra l R e se rv e D is t r ic t F e d e ra l R e se rv e B a n k o f C le v e la n d Vol. 10 Cleveland, Ohio, November 1, 1928 A fter a prosperous and increasingly active third quar ter, industrial activity in this District was at the high est point for the year in October after allowing for seasonal factors. The District's basic industry— iron and steel— was operating at close to 90 per cent of .capacity near the end of October, with a revival o f rail inquiries making its appearance and with demand from other sources holding up well. Conditions in the tire industry were the best in some time, improvement was noted in the coal industry, and a change to colder weather in the last week of the month brought in belated retail buying for the Fall and Winter. Employment in the larger cities has increased noticeably in recent months. The value of building contracts awarded staged a marked recovery in September after the August slump. A slight in crease in exports to Europe following currency stabili zation is reported by several large manufacturers. Prac tically all the more important manufacturers in the District are paying higher interest rates on bank bor rowings than at the opening o f the year, but the ad vance has not been sufficient to hamper operations to any extent. No. 11 showing as compared with the same quarter in the pre ceding year. Of 60 industrials, 45, or 75 per cent, report larger net profits than a year ago, the gain for the group being 34.7 per cent. In addition, there was an increase o f 12.6 per cent over the second quarter. The latter gain was considerably greater than seasonal and is all the more noteworthy in view of the fact that second quarter earnings were unusually good as compared with past years. Total crop production in the District is estimated to exceed that of last year. The harvests of corn, oats, and tobacco are materially larger than in 1927, and owing to unusually favorable harvesting and curing weather, the quality of much of the tobacco crop is stated to be the best in years. Fourth District manufacturers are still unanimous in stating that there is no evidence o f speculative buying of commodities on the part o f their customers. Purchas ing continues on a strictly hand-to-mouth basis and for quick delivery. Solid line— weekly index o f car loadings, F. R. B. o f Cleveland (1923-1925 = 100). Latest figu re: W eek ending: O ctober 13— 107.0. Broken line— m onthly index o f industrial production, Federal Reserve Board (1923-1925 — 100). Latest figu re: Septem ber— 114. Both curves adjusted for seasonal variation . In the United States, both production and distribution have increased recently. The Federal Reserve Board's index of industrial production rose from 109 in July to 112 in August and again to 114 in September, the high est point yet reached. This bank’s weekly index of distribution based on car loadings rose from 101.9 for the week ending August 25 to 107.3 for the week ending September 29, and remained near the latter point dur ing the first two weeks in October. FIN A N C IAL During the month ending October 23, certain classes of money rates have eased, Federal reserve and membei bank credit have changed but little, loans to brokers an<3 security dealers have advanced sharply, and stock prices have also risen. Gold movements have been small as compared with the earlier months of the year. During the four weeks ending October 17, the country gainec $7,637,000 net through exports, two shipments totaling §10,357,000 having been received from England. One evidence of third-quarter prosperity in the coun try is found in corporation net earnings so far published. Seldom have industrial corporations made such a good Money Rates. Stock exchange money rates, thougl still high, finally declined somewhat between mid-Septem 2 THE MONTHLY BUSINESS ber and late October, after an upward trend beginning early in 1928. Call money in New York has renewed mostly at 6 ^ or 7 per cent during the past few weeks, although a 7 Vz per cent rate existed on five days and an 8 per cent rate on four days. In the preceding four weeks, the rate was 7-1% per cent. Time money (90 days) declined from 7% per cent on September 25 to 1 X A on the 28th and to 7 per cent on October 15. Commer cial money rates, on the other hand, have shown virtually no change, so that the gap between this class of rates and stock exchange money has been narrowed. Bank ers* acceptances (90-day, asked) remain at 4 M per cent, s while commercial paper is 5 ^ except fo r high-grade names at per cent. Reserve Bank Credit. Acceptance holdings of the Fed eral Reserve System have advanced faster than usual and on October 17 stood at $380,000,000, about $100,000,000 more than a year ago and $140,000,000 more than a month ago. Bills discounted, on the other hand, have fallen off some $150,000,000 since September 19, amount ing to nearly $940,000,000 on that date. Government se curity holdings have gained slightly, and the total o f Federal Reserve credit outstanding on October 17 was nearly the same as on September 19. Bills discounted by the Cleveland bank fell rapidly from a peak of $116,000,000 on July 3 to $68,000,000 on August 22, rose to $87,000,000 on September 12, and then declined to $69,000,000 on October 3. The next two weeks brought a rise to $74,000,000. Government security hold ings are slightly lower than last month, while acceptances have increased sharply. 159 in September, according to R. G. Dun and Com pany, as against 156 in August and 149 a year ago. Liabilities were $3,715,998 in September, $4,231,357 in August and $3,212,596 a year ago. In the United States there were 1635 failures in September, 1852 in August, and 1573 in September, 1927. The following table gives the changes in the main items in the balance sheets of the Federal Reserve and reporting member banks: Federal Reserve Bank o f Cleveland Federal Reserve S ystem (In M illions) (In M illions) Oct. 17, Oct. 19, Sept. 19, Oct. 17, Oct. 19, Sept. 19. 1928 1927 1928 1927 1928 1928 285 2,636 2,976 261 286 2,626 Gold Reserves .................... 418 43 70 936 1,094 Discounts ............ 283 22 379 19 A cceptances ....... 237 231 500 57 35 33 U. S. Securities ................ 225 127 1,552 1,201 T otal bills and securities 139 107 1,560 Federal Reserve notes in 1,717 1,717 200 210 circulation ..... 1,680 2,429 190 189 210 2,395 Total deposits .................... 2,459 R E P O R T IN G M EM BER B A N K S Fourth D istrict U nited States (In M illions) (In M illions) L oan secured by stocks and bonds ................................... 650 617 660 6,750 6,226 6,785 A ll other ................................. 818 800 804 9,196 8,830 9,083 Total loans ......................... 1,468 1,417 1,464 15,946 15,056 15,859 Investm ents ......................... 736 706 732 6,464 6,083 6,526 Dem and deposits ................ 1,059 1,041 1,047 13,291 13,450 13,100 T im e deposits ...................... 956 918 964 6,921 6,369 6,914 Member Bank Credit. Collateral loans and investments o f reporting member banks in the United States are about the same as a month ago, while commercial loans have risen seasonally. Total loans and investments are therefore up a little from early September. Loans to brokers and security dealers in New York have shown a marked increase lately, rising from $4470 millions on September 19 to $4664 millions on October 17. In the Fourth District, collateral loans have declined noticeably but this has been offset by an increase in “ all other” loans, largely commercial. Total loans and investments are practically unchanged from a month ago. Security Prices. The bond market again became irregu lar in September after a month’s advance, with the trend downward. The New Y ork Times average o f 40 bonds on October 17 was 90.74, about 3 points under the year's high reached in May. The Dow-Jones industrial stock average, after several weeks o f seesawing close to the 240 mark, finally started up on October 9, and by the 24th had climbed to 257.03, a new high record. The latest advance has been quite irregular, however, being accompanied by declines in a considerable number of stocks. Debiti, Savings, Failures. Debits to individual account at 13 large cities in this District amounted to $2,656,764.000 in September, $2,553,261,000 in August, and $2,521,242.000 a year ago. Savings deposits o f 68 banks in Ohio and Western Pennsylvania totaled $1,042,233,423 on October 1, a gain o f 0.8 per cent fo r the month and 8 per cent for the year. Commercial failures in the Fourth District numbered REVIEW W eekly average m oney (renew al 6 m onths), and figures are fo r rates in New Y ork on call ra te), com m ercial paper <4 to acceptances (90 days). Latest the week ending: O ctober 24. M ANUFACTURING, MINING Iron and Steel Demand for iron and steel, which had been gathering momentum since ea rly September, reached its crest in the first week o f October and began to subside moderately. This was to be expected, as many consumers had com mitted themselves heavily, at least for the early part if not for all the last quarter. Bookings in September and the first week of October not only compelled the resumption of some idle capacity but also left a surplus for backlogs. By mid-October production on the way up crossed bookings on the way down. This situation indicated a return to normal rather than a definite weakening of the market structure* Production schedules indicate that the October steel ingot output is setting a new high record for the month as in the case of the three preceding months. With the* automotive industry still operating at a high level, build ing steel needs holding steadily, the railroads mildly more interested in equipment, shipbuilding outlook in the East much brighter, and pipe mills at capacity on southwest THE MONTHLY BUSINESS ern oil and gas lines, the steel outlook for the fourth quarter is promising. The price situation continues to favor producers, but there is evidence that the cycle is being completed and raw materials are following finished materials up. Iron and steel scrap, while tempered somewhat, has continued to advance. Connellsville coke, for many weeks dormant, is stiffening. Pig iron in the Detroit, Cleveland, Pittsburgh and eastern Pennsylvania districts in mid-October was 50 cents or more per ton higher than in early September. For the majority o f consumers, the $2 per ton rise in steel bars, plates, and shapes has been effective. Most sheet users are paying $1 to $2 per ton more than in the third quarter, autobody sheets excepted, but all are re ceiving a discount o f one-half of one per cent for cash in ten days, contrasted with the two per cent granted for many years. In steel strip and wire products, the ad vances average about $1 per ton. Semifinished steel is priced $1 per ton over the third quarter. The Cleveland, Mahoning valley and Pittsburgh pro ducers of iron and steel have been relatively busier than those in Chicago and eastern Pennsylvania, which is at tributed in large measure to the unusual vigor o f the automotive industry. Between now and January 1, the Chicago district will put considerable rail and track ma terial tonnage on its books, but this will not benefit rollings appreciably until the first quarter. Mahoning valley tin plate mills have lagged somewhat, but are re suming their stride, rolling material for stock. Pig iron in September continued the gain o f August. The net gain in active stacks was 11. The September daily rate of 102,117 tons compared with 101,193 tons in August, and 92,750 tons in September, 1927. The month’s total o f 3,063,530 tons brought the year up to 27,783,699 tons, barely under the 28,117,026 tons in the first nine months of 1927. The larger proportion o f scrap used this year accounts for the disparity with a record steel ingot output. September’s daily ingot production of 165,903 tons con trasted with 154,759 tons in August and 125,726 tons last September, The September output o f 4,147,583 tons swelled the nine-month total to 36,930,520 tons, against 33,778,952 tons a year ago. REVIEW 3 Rubber and Tires The outlook fo r this District’s tire industry is much more promising than earlier in the year. Several factors have entered into this, among which may be mentioned: (1) the stability o f crude rubber prices in recent months as compared with the rapid decline in the first part of 1928; (2) the practical disappearance of large stocks of rubber purchased at considerably higher prices, these having been gradually worked into production by manu facturers; (3) the almost unprecedented warm weather in October, which has brought greater need fo r tire replacement than usual at this season because o f heavier travel and a lengthening o f the touring season; (4) con tinued heavy automobile production, reflected in a strong and well-sustained demand for tires as original equipment; (5) an improvement in the volume of tire exports. One evidence of improvement is found in tire produc tion for August (the latest available), which broke all records. The output of pneumatic casings for that month was 5,601,856, a gain o f 15 per cent over July, 30 per cent over August, 1927, and 10 per cent over the previous high month (March, 1928). Shipments also made a new high record of 6,302,258 tires. September consumption o f crude States was 39,882 tons, a gain of year ago. The gain for the first over the same period last year was rubber in the United 46,5 per cent over a nine months of 1928 13.6 per cent. Average stocks o f tires per dealer in the United States were 62.5 in October, according to the preliminary report o f the Department o f Commerce. This compares with 57.6 tires per dealer a year ago, 49.9 in October o f 1926, and 56.6 in 1925. Stocks of inner tubes are slightly smaller than a year ago, but larger than in 1926 and 1925. Automobiles September automobile production in the United States set a new high record fo r that month, exceeding the previous high September (1926) by nearly 20,000 units, and Sep tember o f 1927 by 154,000 units. The actual number of cars and trucks produced in the past month was 413,722, of which 358,872 represented passenger car output. The September figure was 48,000 less than that for August, but this is not surprising in view of the fact that the Advancing prices lifted the Iron Trade Review com posite of fourteen leading iron and steel products to an average of $35.19 for September, compared with $34.96 in August. By mid-October the unchecked rise had put the composite up to $35.57, the highest since early May. Soft coal production, both in the Fourth District and in the United States, is undergoing the usual seasonal increase. Heavier buying by the public has brought about firmer spot prices for some domestic sizes in this section. In dustrial demand, however, shows no great change, and the general level of bituminous prices is about the same as a month ago. Industrial stocks on hand, according to the National Association of Purchasing Agents, increased during August for the first time in nearly a year, and on September 1st stood at slightly more than 40 million tons, or a 37 days’ supply. Production in United States only; cars and trucks combined 4 THE MONTHLY August total was the largest for any single month in the history of the industry. For the first nine months o f 1928, the production of passenger cars amounted to 3,064,237, and o f trucks to 404,838. In 1927, the corresponding figures were 2,540,312 and 366,360. In the Fourth District, new registrations have continued heavy. In 61 Ohio counties, representing over 80 per cent of the state’s population, 14,551 new passenger cars were registered in September, according to the Bureau of Business Research at Ohio State University. This figure is 48 per cent larger than a year ago, although 23 per cent less than in August. New truck registration amounted to 1,598 in September, a gain o f 41 per cent over last year but a decrease of 1 per cent from August. Clothing Excessively warm weather in October has hampered the winter clothing sea son somewhat. Business in general, however, is fairly good, with a stronger demand begin ning to show itself in woolens, knit goods, and cotton goods. Prices o f raw cotton and cotton materials are distinctly firmer than a month ago. Rayon manufacturers in this District are showing a large gain in business over last year. Several important clothing manufacturers re port an increase in employment recently, part of which, however, is seasonal. Dry goods sales of reporting wholesalers in this Dis trict in September were slightly less than last year, the decrease being 0.4 per cent. The first nine months showed a gain of 1.1 per cent, and there was also a gain o f 10.9 per cent in September as compared with August. In the retail field, September was an excellent month for several lines of clothing. Reports from representa tive department stores in the District show increases in sales over last year as follow s: women’s coats, 44,8 per cent; dresses, 0.2; misses* ready-to-wear, 28.6; girls' wear, 46.5; sports* wear, 36.0; aprons and house dresses, 1.2; furs, 14.6; men’s clothing, 12.0; men’s furnishings, 6.9; boys’ wear, 12.0; knit underwear, 7.5; negligees, 19.7; hosiery, 13.1 per cent. Shoes September shoe production in the Fourth District declined more than seasonally from the very high figure of August. Preliminary statistics also indicate a decrease of 7.7 per cent from last year, as well as declines from September in 1926 and 1925. Business in early October, however, has been better than usual in some shoe lines, particularly in the better grades o f women’s shoes. Retail sales o f women’s shoes in September made an excellent showing in the department stores. Final fig ures from 72 stores in the Fourth District show a gain over last year of 16.2 per cent in women’s and 17.1 per cent in children’s shoes. In the case o f men’s and boys’ shoes, the increase was only 2.2 per cent. Wholesale shoe sales in September continued to run under 1927, although the loss was not so great as in August. Reporting firms in this District experienced a decline in sales of 8.9 per cent fo r the month and of 9.8 per cent for the first nine months. BUSINESS REVIEW AGRICULTURE There has been no material change in the estimates of agricultural production in the Fourth District during the past month. With the season practically over, except for the harvesting of a few o f the late-maturing crops, present evidence points to an increase over last year in the total crop production. Increases are shown in corn, oats, barley, Irish potatoes, and fruits, while decreases are found in wheat, hay, and pastures. Corn promises a crop o f 177,652,000 bushels in the Fourth District this year as compared with 150,323,000 bushels, the estimated production of 1927. Continued dry weather throughout most of September and early October reduced the corn outlook about one per cent as compared with the September forecast. The few frosts late in Sep tember did not damage the crop to any appreciable ex tent. A s previously reported, the stands are spotty, varying from excellent to poor. Fodder has been abundant. Silo filling is practically done, and much of the field corn has been cut. The October 1 estimate o f oat production in this Dis trict is 108,286,000 bushels, as compared with 78,362,000 bushels harvested in 1927. The large gain is due to in creased acreage caused by planting of winter wheat fields abandoned last Spring, The quality of the crop is 86 as against a ten-year average o f 87. The winter wheat crop, almost a failure in this D is trict, showed an increase for the country as a whole. Estimated production of all wheat on October 1 was 903,. 865,000, an increase of 3,000,000 bushels over the Septem ber 1 estimate. Production in 1927 was estimated at 872,595,000 bushels. No figure of acreage planted to winter wheat is at hand fo r the District. The weather, though somewhat dry fo r plowing, has been generally favorable for Fall plant ing. Many farmers delayed planting later than usual in an effort to avoid the ravages of the Hessian fly. Potato production for the District showed a decline o f about half a million bushels from the September 1 fo r e cast, and stood at 24,359,000 bushels on October 1. Most o f this decline occurred in Ohio and was caused by the dry weather in September. Digging is in progress in all localities and acre yields are averaging above 120 bushels. Rotting is not serious, and blight, reported extensively a month ago, has caused less damage than was expected. Hay and pastures in the District are several points below the average. Hay acreage in Ohio was reduced and this, coupled with the backward Spring which gave the crop a poor start, resulted in a crop of but 3,425,000 tons as compared with 5,149,000 in 1927. Fruit prospects declined slightly from the September 1 estimate. Weather was unfavorable to the proper de velopment o f the fruit and some loss was caused by heavy storms. The following table shows the October 1 estimated production of the principal fruit crops for the states comprising this District and for the entire United States* Ohio Pa. Ky. W. Va. U. S. Apples— thous. bu. 5,625 8,280 5,187 7,800 177,560 Peaches— thous. bu. 1,742 1,867 1,035 810 67,875 Grapes— tons ....... 27,300 21,600 1,176 1,362 2,605^024 Pears— thous. bu.... 365 612 110 56 23,304 THE MONTHLY BUSINESS REVIEW The 1927 production for the entire United States was: Apples, 123,455,000 bushels; peaches, 45,463,000 bushels; grapes, 2,464,712 tons; and pears 23,304,000 bushels. Substantial gains were shown this year in all cases. Ohio and Pennsylvania rank fourth and fifth in the list of grape producing states of the country, most of the crop in this District being grown in the Lake regions. Weather was favorable to the maturing of the fruit, and though some correspondents report that ripening was de layed by the cool weather of September, harvesting began in earnest in the second week in October, several days later than was anticipated a month ago. The clusters appear to be large and compact, and the fruit, especially Concords, promise to be good in color and quality. Vines have made excellent growth and foliage is good, the leaf hopper and berry moth having done very little damage. Apple prospects declined slightly during September, but were still ahead of the production of 1927. Continued dry weather reduced the size of the fruit from early expectations. Considerable scab is reported in many localities. The Bureau of Labor’s Index of agricultural prices advanced from 107.0 in August to 108.8 in September. This point was exceeded only once this year, namely in May, when it stood at 109.8. The burley crop in Kentucky is in ex cellent shape for the most part, al though some poor quality leaf has resulted from damaged plants and late plants which were cut green. The weather in September was excep tionally fine for the cutting and curing of the crop, and the damage from frost and houseburn was very small. The dark tobacco sections of Kentucky did not fare so well, considerable frost injury being reported. The Department of Agriculture’s October crop report estimates Kentucky’s 1928 tobacco crop, (all types) at 316 million pounds, as compared with last year’s short crop o f 202 million and a 5-year average of 418 million pounds. The latest estimate is slightly larger than that of a month earlier, and nearly 30 million pounds larger than the August estimate, thus reflecting the steady im provement in the condition of the crop during the past eight or ten weeks. tember. August, however, was abnormally low, and the September index is still below the level prevailing in the first seven months of this year, although well above the figure of 121 for September of 1927. In the Fourth District, total contracts awarded in September aggregated $67,747,810, the highest on record for that month and $17,300,000 larger than in August. The improvement was entirely in non-residential building, which was doubtless aided by the open weather. Resi dential contracts alone amounted to only $16,166,854, the lowest for September since 1924 and only $1,800,000 larger than in August. Residential contracts in 1928 have fallen behind 1927 in six o f the first nine months and for the ninemonth period were 7 per cent less than in 1927. Two factors in this decrease have been the over-built condition found in the residential sections in some localities and the advance in interest rates during the year. The valuation o f September building permits in 27 cities in this District was $17,247,960, a gain of 3.1 per cent over last year. Large increases occurred in Akron, Ashtabula, Cincinnati, Dayton, Erie, Hamilton, Pittsburgh, and Springfield, while the heaviest declines were recorded by Canton, Cleveland, Columbus, Lexington, Wheeling, and some o f Cleveland’s suburbs. For the first nine months, the value o f permits was 2.7 per cent larger than a year ago. Tobacco The total crop of burley tobacco, most of which is grown in Kentucky, is estimated at 274,000,000 pounds this year as against 181,000,000 pounds in 1927. The total production of all types in the United States is put at 1,353,000,000 pounds as against 1,211,000,000 last year and a 1922-1926 average of 1,337,000,000 pounds. Ohio’s 1928 tobacco crop is placed at 30,251,000 pounds, as compared with 24,652,000 in 1927 and 42,639,000, the 5-year average. Pennsylvania’s estimated output is 45,570,000 pounds this year, as against 44,880,000 a year ago and a 5-year average of 54,834,000. BUILDING September building contracts awarded made a much better showing than those in August, both in the country ^ r*1 After allowing for seasonal factors, the Federal Reserve Board’s index of building contracts m 37 states jumped from 111 in August to 136 in Sep 5 Building Operations (Valuation of Permits) Akron................ Ashtabula......... Barberton......... Canton.............. Cincinnati........ Cleveland.......... Cleve. suburbs: Cleve. Heights. East Cleveland Kuclid............. Ciartieid Heights Lakewood....... Parma............. Rocky River., Shaker Heights Columbus......... Covington, Kv. Dayton............. Krie. Pa............ Hamilton.......... Lexington, Ky.. Lima................. Newark............. Pittsburgh. Pa.. Springfield........ T oledo.............. Wheeling, \\\ Va. Youngstown.... Total.............. i% chantfc September, from Jan.-Sept. 1928 1927 1928 2,868,922 +105.2 14,904,879 58,000+ 3 6 .7 371,426 80,540+ 8.8 715,238 189,483 -6 5 .4 2,990,856 3,231,990 + 1 8 .8 27,468,995 2,028,725 — 23.7 40,998,000 168,885 — 65.1 3,484,470 23,380— 22.4 655,730 111,825 — 2.4 1,821,781 107,100 — 44.1 1,335,650 204.645 — 57.1 4,486,242 149,3% — 12.1 2.081,829 62,905— 11.0 928,968 386,075 — 33.9 6,106,840 1,031,250 — 33.8 13,801.650 80,550 + 3.0 1.308.050 732.832 + 123.8 9,453.058 399,647 + 4 1 .7 3,039.384 176,945 + 31.1 1,700.706 62,835 — 81.3 1,241,811 91,125+ 4.1 409,354 261.953 + 10.3 1,203,433 3,024.349 + 4 0 .9 33,239,763 206,312 +136.2 1,158,527 995,585 — 0.5 14.037,225 143.135 — 70.6 1,503.735 369,577 — 7.1 6,668,035 17,247,960 + 3.1 197,115,635 % chanuc Jan.-Sept. from 1927 1927 16.405,009 — 9 1 457,015 — 18 7 896,388 _____ 20 2 3,238,237 — 73 23,995.144 +14 5 32,674,525 +25] 5 4,276.637 1,043,011 1,472,407 2.264,500 3,068,344 2,798,586 1.082,923 7.259,560 18,388,000 1,378,100 8.992.137 3,975,311 1,669,296 1,999,249 662,086 566.992 28,575,175 1,508,420 13.846.354 2,589,269 6,831,795 — 18 5 +23*7 —4 1 0 + 46 2 — 25 6 — 14*2 — 15 9 — 24 9 — 5 1 + 5 1 — 23 S + K9 — 37 9 — 38 2 +1122 +16 3 — 23*2 + 1 4 — 41.9 — 2.4 191,914,470 ~2~7 — 37 1 TRADE Retail Trade September department store sales in the Fourth District showed a sizable gain of 7.8 per cent over last year. This is explained by the fact that September sales in 1927 were unusually light, owing to the cold weather in August of last year which resulted in a good deal of early Fall buying. Consequently, while September o f 1928 made a good gain over a year ago it did not quite make up the loss of 8.6 per cent shown by August as compared with August of 1927. Every reporting city in the District shared in the in crease, the largest gains being in Akron (19.6 per cent), 6 THE MONTHLY Toledo (19.5) and Wheeling (12.2). For the first nine months, however, sales in the District were 0.5 per cent less than in the corresponding period in 1927, decreases being reported by Pittsburgh, Wheeling, Youngs town, and “ other cities.” Stocks on October 1 were 6.9 per cent under a ago but registered a seasonal increase of 5.9 per over September 1. Accounts receivable were 3.9 per larger than a year ago, and collections were 1.7 cent larger. The percentage of collections during tember to receivables on September 1 was 33.2. year cent cent per Sep The stock turnover rate for September was .28, as against .25 a year ago. The cumulative turnover rate for the first nine months was 2.35, as against 2.30 last year. In September, 62.6 per cent of the total sales (exclud ing strictly cash stores) were made on credit. Instal ment sales accounted for 5.8 per cent o f the total. Thirty-two out o f 50 separate departments recorded gains in September as compared with a year ago. Per centage changes in the principal departments were as follow s: Silks and Velvets .................................. Silverware, Jewelry .............................. Millinery .................................................. Gloves ...................................................... Hosiery .................................................... Women’s and Children’s Shoes........... Men’s and Boys’ Shoes.......................... Women’s Coats ...................................... Women’s Dresses .................................. Misses’ Ready-to-W ear ..................... Juniors’ and Girls’ W ear..................... Furs .......................................................... Men’s Clothing ...................................... Men’s Furnishings ................................ Boys’ Wear .............................................. Furniture ................................................ Rugs ........................................................ Draperies, Lamps, Shades ................. House Furnishings ................................ Revised Retail Trade Index % change from 1927 — 10.0 4- 1.9 +13.7 +56.6 +13.1 +14.6 + 2.2 +30.2 — 4.4 +18.8 +32.3 +15,5 +10.0 + 3.2 +14.4 — 0.4 — 3.9 + 0.9 — 0.3 The table below gives this bank’s revised index of department store sales in the Fourth Federal Reserve Dis trict. The new base (100) is the monthly average sales, 1923-1925. The index includes 52 of the 62 reporting department stores, monthly figures fo r these 52 firms being available back to January, 1919. For the year 1927 the combined sales of these 52 stores amounted to more BUSINESS REVIEW than $300,000,000, a figure estimated to represent about 95 per cent of the department store business o f the 13 large cities included in the index. REVISED IN D EX OF DEPARTMENT STORE SALES Fourth Federal Reserve District (52 Firm s Included. 1923— 1925 = 100) 1919 1920 1921 1922 84.9 87.9 66.5 70.0 76.2 61.8 ................................... 65.3 98.7 96.4 77.4 92.5 .................................. 76.0 91.8 89.8 ................................... 73.8 100.0 90.7 89.5 ................................... 73.9 100.3 86.2 86.1 62.0 81.4 62.4 July ............... .................................. 64.5 82.3 65.0 71.3 Septem ber ................................... 72.6 90.7 68.5 81.6 106.0 .................................. 88.6 91.0 101.5 N ovem ber 110.9 .................................. 90.6 86.4 100.1 147.0 127.1 Decem ber ....................................... 132.9 146.0 97.0 85.8 86.4 1923 78.5 7M 104.3 98.6 106.5 105.7 73.7 86.4 90.8 116.3 108.8 156.5 99.9 1924 February 1925 1926 1927 1928 ................................... 84.9 83.7 81.4 96.0 110.0 101.6 99.4 75.8 80.3 89.3 124.7 103.9 169.4 101.3 84.0 81.3 97.8 102.4 106.0 97.5 77.0 84.1 95.4 118.2 114.2 173.1 102.6 83.0 81.6 96.6 114.3 103.6 97.5 77.0 92.0 93.2 112.0 110.3 174.2 102.9 83.4 83.5 100.3 100.5 105.3 99.6 77.0 84.4 100.4 .... .................................. 102.0 ............... .................................. 72.2 Septem ber .... ................................... .................................. Novem ber .... D ecem ber ...... .................................. 90.6 104.8 July 160.4 Wholesale Trade With the exception o f groceries, sales o f all reporting wholesale lines in this District were smaller in Septem ber than in the same month of 1927. Dry goods sales decreased 0.4 per cent, drugs, 3.6; hardware, 6.6 and shoes, 8.9. Grocery sales increased 0.1 per cent. For the first nine 1.9 per cent larger gained 1.1 per cent, 6.2 and 9.8 per cent ware and shoes. months o f 1928, grocery sales were than last year. Dry goods sales and drugs, 0.3 per cent. Losses of respectively were recorded by hard Stocks o f grocery firms on October 1 were 2.8 per cent smaller than a year earlier. Those o f dry goods and shoes also showed declines amounting to 13.3 per cent fo r the form er and 9.4 for the latter. THE MONTHLY BUSINESS REVIEW 7 Fourth District Business Statistics (Alt figures are for Fourth District unless otherwise specified) Sept. Sept. 1927 1928 Bank Debits (24 cities) Saving* Deposits (end of month) Ohio (41 banks) Western Pennsylvania (26 banks) Total (67 banks) Commercial Failures Number _ ** _ . ** ^— Liabilities Postal Receipts — 9 cities Stjes — Life Insurance — Ohio and Pa. * — Dept; Stores — (62 firms) * — Wearing Apparel (17 firms) “ — Furniture (49 firms) “ — Wholesale Grocery (44 firms) „ 5**y Goods (13 firms) „ ““ Hardware (16 firms) ni ® • v rU i ** change Jan i92c r U ni t r change Millions of dollars + 4.1 29,398 29,084 + 1.1 3,200 Thousands of dollars Actual Number Thousands of dollars firm *) Building Permits, Valuation— 27 cities Building Contracts — Total, 4th District _ ** . 7“ Residential, 4th District Production — Pig Iron, U. S. « “ 5ted ln*ots. U. S. — Automobiles, U. S. Passenger Cars Actual Number Trucks ** “ Bituminous Coal, 4th Dist. Thousands of tons " Cement: Ohio, W. Va., Wn. Pa. * * * barrels * — Electric Power: Ohio. Pa., Ky. Millions of k.w. hrs. !! “ Petroleum: Ohio. Pa., Ky. Thousands of barrels — Shoes, 4th District * * “ pairs * — Tires, U. S. “ '* casings BtuminousCoal Shipments (from Lake Erie ports) 4 i 4 tons * Iron Ore Receipts (at Lake Erie ports) * 9 months’ average. * August * January-August 4 Figun Confidential ures ~ “ * (1928 compared with 1927) Toledo................................................................. Wheeling.................................................................. Youngstown............................................................ Other Cities............................................................. District..................................................................... W EARING APPAREL (16) Gncinnati................................................................ Cleveland................................................................. Other Cities............................................................. District..................................................................... FURNITURE (48) Gncinnati................................................................ CleveUnd................................................................. Columbus................................................................. 5 * )'“ ” ................................................................ T ole d o ............................................................... Other Cities.................................................... District..................................................................... CHAIN STORE* Drug*—District (3 )............................................... Groceries— District (4)............................ WHOLESALE GROCERIES (44) A k r o n ................................................................... Cincinnati.................................. Cleveland...................................! ! ! ! ! ! ! ! ! ! ! ! ! ! Erie............................................ Pittsburgh........................... .................................... Toledo.................................. .................................... Other Cities.......................... District................................... WHOLESALE DRY GOODS f 13)................... WHOLESALE DRUGS (14) ................... WHOLESALE SHOES (6) ................................. *SaIes per individual unit operated. 704,740 260.272 965,012 149 3,213 3,046 85,701 23,374 1,591 1,025 7,161 2,841 2.148 1,907 16,727 65,235 21,579 2,775 3,269 + 8.7 + 6.2 + 8.0 + 6.7 + 1 5 .7 — 7.6 — 5.9 + 7.8 + 8.7 + 10.5 + 0.1 — 0 .4 — 6.6 — 3.6 + 3.1 + 3.9 — 25.1 + 10.3 + 2 6 .9 747.158* 279,200* 1,026,358* 1,503 42,632 27.044 927.696 209,600 14,565 9,605 58,249 19,887 17,283 16,399 197,116 508,926 172,354 27,791 36,931 691,943* 255,978* 947,921* 1,500 38,851 27,171 894,647 210,630 14,583 9.570 57.135 19,676 18,420 16,354 191,914 549,629 185,535 28,093 33,779 + 8.0 + 9.1 + 8.3 + 0.2 + 9 .7 — 0.5 + 3.7 — 0.5 — 0 .4 + .0 .4 + 1.9 + 1.1 — 6.2 + 0.3 + 2.7 — 7.4 — 7.1 — 1.1 + 9.3 358,872 54.850 15,7V7 2,267 1,130* 2,131* 226,443 33.944 16.004 1,804 1,033* 2,108* 3,064,237 404.838 134.425 13,558 8,756* 16,222* 2,540.312 366.360 151,535 13,024 8,661* 15,913* 5,658* 4,680 5,827 4,362* 3,869 5,493 + 58.5 + 6 1 .6 — 1.3 + 2 5 .7 + 9.4 + 1.1 — 7.7 + 2 9 .7 + 2 1 .0 + 6.1 39,562® 25,504 27,342 34,906* 27,051 29,792 + 2 0 .6 + 10.5 — 11.3 + 4.1 + 1.1 + 19 — 7.6 + 1 3 .3 — 5.7 — 8.2 765,810 276,423 1,042,233 159 3,716 2,816 80,629 25,190 1,729 1,132 7,165 2,830 2,006 1,838 17.248 67,748 16,167 3.062 4,147 4 4 Percentage Increase or Decrease SALES SALES STOCKS Sept. First Sept.9 mos. Sept.Scpt.+ 1 9 .6 + 99 + 1 9 .4 + 7. 6 + 0 .7 — 0.2 +8.2 + 1.6 — 6.3 4- 7.2 + 1.5 — 2.4 + 5 9 + 0.9 + 0.4 + 4 4 — 5 2 — 12.5 +195 + 6.7 — 9.3 +1 2 2 — 1 3 — 14.6 + 4 3 + 6 4 +7.8 — 1.0 — 3 8 — 05 — 8.7 — 6.9 + 4 9 + 8 1 +1 2 9 4. g 7 — + — — 0.4 1.4 2.7 0.7 — 2 7 + 5 2 — 8 7 — — 2.1 Sept. Sept. 1924 1925 91 89 95 108 Wholesale Drum (14)** -----------125 111 Wholesale Dry Goods (18)** ------112 110 Wholesale Groceries (44)** ........... 109 103 Wholesale Hardware (16) ** ........... 112 109 Wholesale All (92)*** ...................... 97 106 Chain Drugs (3 )* t ............................ *Base = Average monthly sales, 1919-1923. **Base = Average monthly sales, 1923-1925. ^Includes 4 shoe firms. fPer individual unit operated. — +37.1 + 30 3 +25 s + 1 0 .5 —11.2 6.8 + 0.4 — 35 + 4 9 — 5.7 + 5.1 +0 9 .... 0 7 + 53 .... i ' 5 .... 7 0 .... ( 7 .... 0 ’ 5 + 0 1 — 0 4 - 3 6 + 5.8 -f* 2 .9 + 2.*? — 8. 9 6.1 + 6.2 + 0 ! + 0.8 + 1.9 1.1 2.8 — 13.3 — + 0.3 — 6 .2 — 9 .8 — 9 .4 Sept. 192? 93 113 105 102 100 104 99 Sept. 1928 100 109 105 102 94 101 95 Erie, Pa............ Greensburg, Pa. Homestead, Pa. Lexington, K y .. Lima.................. Lorain............... Middletown.. .. Oil City, Pa___ Pittsburgh, Pa.. Springfield........ Steubenville___ Toledo............... Warren.............. Wheeling. W. Va. Youngstown.... Zanesville.......... >* change from 1927 + 1 3 .3 — 5.2 + 16.1 + 8.1 + 1 2 .9 — 2.2 — 4 .6 + 4.0 + 8.1 — 1.6 + 5.6 — 4.4 + 6.8 + 9.5 + 16.3 + 12.4 + 13.3 + 2.0 + 5.9 + 2 5 .8 + 3.5 + 2 8 .6 + 1 4 .3 + 1 4 .6 1928 to date (Dec. 28-Oct. 17) 1,095,619 112.548 492,412 4,408,967 8,324.897 1,668,576 42,436 962,814 367,220 206.495 43,584 241,183 157,315 63,581 127,405 169,637 9,808.312 226.374 117 080 2,707,588 138,826 494,841 725,778 132,070 1927 to date (Dec. 29*Oct. 19) 1,003.274 117,668 476.344 4,051.400 8,050.612 1,665.683 51.313 945,609 362,677 222.248 45,104 245,333 149.200 62.356 111.884 153.370 10,284.442 240.510 112.656 2,30^.011 141.644 458.807 717,899 127,970 change from 1927 + 9.2 — 4 .4 + 3.4 + 8.8 + 3.4 + 0.2 — 17.3 + 1.8 + 1.3 — 7.1 — 3.4 — 1.7 + 5.4 + 2.0 + 1 3 .9 + 1 0 .6 — 4.6 — 5.9 + 3.9 + 1 7 .3 — 2.0 + 7.9 + 1.1 + 3.2 Total.............. 3,337,715 + 1 1 .9 32,835,558 32,107,014 + 2.3 Cincinnati........ Cleveland.......... Columbus.......... Connellsville. .. + 6.8 Sept. 1926 95 112 109 111 103 111 106 4 weeks ending Oct. 17, 1928 120,778 12,384 46,228 416,994 914,437 160,759 4,729 89,792 39,112 20,389 4,949 19,839 16.772 6,428 11,642 16,639 981,984 22.501 10,942 260,995 16,135 51.336 77,430 14,521 Butler, Pa........ + 6.3 — 4 Debits to Individual Accounts + 2.4 1.6 — 7.0 — 3.0 1.6 — 3.3 — 4 index Numbers of Trade in the Fourth Federal Reserve District Retail and Wholesale Trade DEPARTM EN T STORES (62) Akron.. . . ............................................................... Cincinnati................................................................ Cleveland................................................................. Columbus................................................................. Dayton..................................................................... Pittsburgh................................................................ 3,073 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Volume of production and distribution of commodities increased sea sonally in September and were larger than a year ago. There was a further advance in the general price level. Loans of member banks in leading cities increased in September and October in response to the sea sonal demand for commercial credit. Production Index numbers of production of manufactures and minerals combined, adjusted for seasonal variations (1923-1925 = 100). Latest figure: September— 114. Industrial production increased further in September, and the output of manufactures was in larger volume than in any previous month. Fac tory employment and payrolls also increased. Production of iron and steel and of automobiles was unusually large during September and October, although there has recently been some curtailment of operations in these industries. There were also increases in September in the activity o f the textile, meat packing, and tire industries, and in the output of coal, petro leum and copper, while lumber production showed a decline. Building contracts awarded, after declining in volume for three months, increased considerably in September and exceeded all previous records for that month. The increase was due chiefly to certain large contracts for industrial plants and subway construction. During the first three weeks of October, awards exceeded those for the same period last year, the excess being especially large in the eastern districts. Department of Agriculture estimates of this year’s crop yields indicate that the production of all crops in the aggregate will exceed last year’s output by about 5 per cent. The corn crop is estimated at 2,905,000,000 bushels, or 5 per cent above last year’s production. The October 8 esti mate indicated a cotton crop of 13,993,000 bales, or 446,000 bales less than was forecast on September 8, compared with a yield of 12,955.000 in 1927. Trade Index of U . S. Bureau of Labor Statistics (1920 = 100). Latest figure: September— 100.1. 1 [~ nX Jf ec * iw ur wwwi*9 BlLU0K5 ornou RESEItVE BANK 4 CREDIT Gtdtt u /J i ILS*corittcs J sT A DiacoiMlslar MMmrBaMS Prices Accvtami 192* 1925 1926 1927 Department store sales increased considerably in September and were larger than a year ago, reflecting in part the influence of cooler weather. Inventories of department stores at the end o f the month were smaller than on the same date of last year. Wholesale distribution in all leading lines except meats was somewhat smaller than in September, 1927. Freight car loadings showed more than a seasonal increase in September and continued large in October. Shipments of miscellaneous commodities in recent weeks have continued in larger volume than in previous years. 1928 Monthly averages of daily figures for 12 Fed eral Reserve banks. Latest figures are aver ages for first 23 days In October. Wholesale commodity prices increased further in September and the Bureau of Labor Statistics index advanced to 100.1 per cent of the 1926 average. Increases, which were largest in farm products and foods, oc curred in nearly all groups except hides and leather and textiles, which showed slight declines. There have been decreases in the prices of livestock and meats, grains wool and increases in cotton, silk, rubber and iron and steel. 9 Bank Credit Demand for bank credit for commercial purposes increased between the middle of September and the middle of October, reflecting seasonal activity in trade and the marketing of crops. There was also a growth in loans to brokers and dealers in securities, though total loans on secur 12 9* 1923 1926 1927 1926 Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are aver ages for first three weekly report dates in October. ities of reporting member banks showed little change. During the four weeks ending October 24, a growth of about $40,000 000 in the total volume of reserve bank credit in use was due chiefly to continued increases in the demand for currency, offset in part by a small flow of gold from abroad. Reserve bank holdings of acceptances increased by about $140,000,000 during the period, while the volume of discounts for member banks declined by about $100,000,000. United States security holdings remained practically unchanged. * Open market rates on commercial paper and on bank acceptances remained unchanged between the middle of September and the latter part of October, while rates on security loans declined in October.
@FedFRASER