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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 13 Changes in trade and industrial conditions in the Fourth District in the past month have been limited. Some im provement of a seasonal nature was reported in most lines, but in the more important ones changes were smaller than for similar periods of preceding years, so adjusted indexes touched new low levels for the current depression. A waiting attitude is displayed in most industries, and though sentiment improved follow ing the announcement of the new credit plan, and inquiries received by manu facturers indicate that stocks are low, as yet they have not been transformed into actual orders in any volume. Unit inventories at the end o f the third quarter were re ported 20 per cent lower than a year ago and the dollar value down 25 per cent. W holesale sales in all reporting lines in this District showed greater-than-seasonal improvement in September, and stocks at department stores advanced after allowing for seasonal changes. The upturn raised the stock index from 71.7 in August to 74.7 per cent o f the 1923-1925 monthly average, the first sizeable increase in many months. Building activity, though in very limited volume, in creased more than seasonally in September, but fell off sharply in the first half of October. Life insurance sales in Ohio and Pennsylvania were ten per cent smaller in September than a year ago. Shoe production declined by less than the usual sea sonal amount and output in September in this District exceeded the same month last year by ten per cent and in the first nine months was slightly larger than in the corresponding period of 1930. In the manufacturing industries iron and steel produc tion changed but little, instead of increasing seasonally. Expanding inquiries were reported in several fields in late October, but actual orders are still limited. Automobile production has reached a very low level, partly, it is under stood, in preparation for new model introduction. Opera tions at parts and accessory, hardware, and machine tool plants remain at low levels, chiefly because o f the slump in the automobile industry. During the past few weeks there have been a number o f bank suspensions in this District and the demand for currency has increased further, although recently the rate o f increase has diminished somewhat. This added demand for currency, together with the reduction in the country’s stock o f monetary gold follow ing Great Britain’s suspen sion o f gold payments, has resulted in an exceptionally rapid increase in demand for Reserve bank credit, both for No. 11 Cleveland, Ohio, November 1, 1931 this District and for the country as a whole. A t member banks loans and deposits have been reduced sharply in the past few weeks. The month proved very favorable for the maturing and harvesting o f agricultural crops. Prices on these comm odi ties declined in September, but increased in the first three weeks of October. Other wholesale prices also advanced slightly in the latter period. FINANCIAL. During the past month there was a sharp increase in the amount of Reserve bank credit outstanding as demand for currency expanded. Deposits at member banks de clined and loans and investments were reduced quite sharply. There were numerous bank suspensions recent ly in several sections o f the District. Follow ing the suspension of the gold standard by the Bank o f England and the conversion into gold (earmarked or exported) of short time funds o f other nations held in New York in an amount exceeding $600,000,000, money rates throughout the country were increased from the ab normally low levels to which they had declined in the early months o f this year. The discount rate of the Federal Reserve Bank o f Cleveland was advanced from 2 y2 to 3 per cent on October 10, and to 3% per cent on October 24. Rates reported by large commercial banks in mid-October showed a slight upward tendency. Savings deposits at 55 selected banks on September 30 amounted to $1,022,090,000, a reduction in the month of two per cent and from the same date last year of 6.3 per cent. The declines were quite well distributed. Bank debits, though showing some seasonal improvement in the four weeks ended October 21, were 21.5 per cent below the same period o f last year and for the year to date down 20 per cent. Commercial failures in this section increased slightly from August and were 11.5 per cent more numerous than in September, 1930. In the first nine months there were 12 per cent more failures than in the same period o f 1930. Liabilities o f the defaulting concerns were smaller than in other recent months, but were still much larger than a. year ago. Reserve Bank Credit. Changes in assets and liabilities o f the Federal Reserve Bank o f Cleveland in the past few weeks have been more rapid than in any similar period o f the bank’s history. In other years at this season gold reserves o f this bank have declined, but the falling-off has 2 THE MONTHLY BUSINESS REVIEW not been as sharp as in the period just passed. Since September 9 gold reserves have declined $73,386,000, or 21 per cent, and at $272,190,000 on October 21, were lower than since February, 1930. One year ago they were $302,6 6 6 ,0 0 0 . Total credit extended, as shown on the accompanying chart, has increased very rapidly. At $22 3,052,0 00 on October 21, it was higher than since 1921, when this bank was still rediscounting for other Federal reserve banks. In ten weeks total bills and securities rose about $125,000,000, an unprecedented expansion. Holdings of Government securities increased slightly in the past month, but the change was insignificant com pared with the expansion in discounts and acceptances. Bills discounted for members banks in this District, representing credit extended directly to banks in this sec tion, increased from $31,890,000 on September 16, to $92,465,000 on October 21. On the latest date they were higher than since December, 192 9, and compared with $27,049,000, on the corresponding date last year. Though holdings of bankers’ acceptances usually in crease at this season of the year, the expansion in the four weeks ended October 21 was much greater than seasonal. Purchases of acceptances are made chiefly through the Open Market Committee at New York, where demand for credit, arising from unprecedented gold movements and expansion in currency circulation, was greater than usual for this season. Acceptances held by this bank on October 21 were valued at $57,566,000, compared with $17,672,000 on September 23, and $2 0,102,000 one year ago. They were higher than since December, 1922. As in the entire country, demand for currency continued to increase, though judged by note circulation of the Federal Reserve Bank of Cleveland, the rate o f expansion in the second and third weeks o f October was at a lower rate than in the three preceding weeks. Note circulation on October 21 was $295,914,000, as against $250,159,000 a month earlier and $182,493,000, a year ago. It was higher than since March, 1921, and was 62 per cent above one year ago, despite the fact that the volume of busi ness done and prices have fallen materially in th® past twelve months. As deposits at member banks declined, reserve deposits dropped accordingly, and at $157,275,000 on October 21, they were 21 per cent below one year ago, and lower than for any week since the middle of 1924. Member Bank Credit. At reporting member banks in leading cities sharp reductions in both demand and time deposits in the past month were accompanied by a fallingoff in loans, chiefly those secured by collateral, and in vestments. In the four weeks ended October 21, total deposits declined eight per cent, and on the latest date were lower than since early 1927. In the same period total credit extended was reduced by about five per cent, loans falling three per cent and investments eight per cent. The follow ing table shows changes in the past year in loans and investments at all member banks in the Fourth District, based on the September 29, 19 31, reports of con dition. A L L M EM BER B A N K S — FO U R T H D ISTRIC T (In M illions o f D ollars) Reserve City Banks C ountry Banks Per cent P er cent change fro m change from Sept. June Sept. Sept. June Sept. 30, 29, 24, 29, 30, 24, 1931 1931 1930 1931 1931 1930 T otal Loans & Inv. 2,004 — 6.1 — 7.5 1,200 — 11.9 — 2.9 Loans & Discounts 1,222 — 5.0 — 11.6 791 — 13.9 — 4.3 Investments. 440 127 U. S. Govt. Sec. — 7.6 + 9.8 -f-13.3 + 1 0 .8 342 A ll other inv.... — 7.8 — 11.1 282 — 5.1 — 14,3 Num ber o f banks 35 — 5,4 — 2.6 — 16.7 664 — 8.4 The decline in the number of banks has been propor tionately greater in the past year in the Reserve cities than in the smaller centers of the District, but the con traction in credit extended has been greater at country banks. Compared with June, the reduction has been more drastic at Reserve city banks. Despite the decline in number, investments in Govern ment securities at country banks were larger in Septem ber than in June or a year ago, but holdings o f other securities were down. At the Reserve city banks, Gov ernment securities owned were lower than in June, but ten per cent higher than a year ago. MANUFACTURING, MINING Iron and Steel Steel production, for both the country as a whole and the Fourth District, in the month ended October 15 broke through previous lows of this depression. F or the entire country the steel rate sagged from 33 per cent to 28; THE MONTHLY BUSINESS REVIEW Youngstown declined from 41 to 30 per cent, Pittsburgh from 29 to 25; Cleveland stepped up from 29 to 35 per cent— inadequate to neutralize the losses at Pittsburgh and Youngstown. This easing production reflected quite accurately the consuming situation. Not only has the expected postLabor Day pick-up failed to materialize, but the markets experienced a distinct dip. This further curtailment cut across all products, and, despite current low operating rates, unfilled orders declined in September. For the Fourth District, the failure o f the automobile industry to swing into substantial production in October was particularly disappointing. As one after another manufacturer postponed production schedules on new models the late fall buying o f automotive steel was putoff, precipitating the post-Labor Day slump. Nevertheless, in mid-October there were signs that the necessity of pro ducing new models for dealers* stocks and January shows would provide the industry with the equivalent of four fair production weeks, and sentiment in the Mahoning Valley was measurably better. Statistics on pig iron production in September were mildly encouraging in that for the first time since April there was an actual gain in the number o f steelworks stacks in blast, and the net decline in total active stacks — which was one— was the smallest since April. Likewise, the fall in the daily rate was the smallest since May. September’s daily rate was 38,321 gross tons, compared with 41,264 tons in August and 75,893 tons in September, 1930. In nine months, total output was 15,004,243 tons, against 25,745,000 tons in the same period o f 1930. Seventy-four stacks were in blast at the end o f September. Steel ingot output, on a daily basis, like pig iron, was the smallest since September, 1921. At 59,523 gross tons daily, open-hearth and bessemer output was at 28.02 per cent o f capacity. The nine-month total for steel out put stands at 20,411,736 tons; a year ago it was 39,286,287 tons. Reflecting more weakness in pig iron than in finished steel, the iron and steel composite of Steel declined from $31.04 in mid-September to $30.78 by mid-October. Coal Buying o f coal for household use has been retarded by the unusually warm weather, and dealers reported that sales in September and the first half o f October did not show a seasonal upturn comparable with other years. The low level o f industrial operations also has made it difficult to market fine steam coals. Prices were slightly higher in September than in the preceding month, but were below last year. Production of bituminous coal in this District in Septem ber was 12,300,000 tons, an increase of 2.4 per cent from August, about the average seasonal expansion of the past six years. Compared with a year ago, output was down 21 per cent and in the first nine months 18 per cent less coal was mined than in the same period o f 1930. Part o f the reduced output o f local mines was a result o f smaller demand for coal to be shipped to the upper lake ports. Loadings of coal at Lake Erie ports in the season to October 1 were only 23,429,000 tons, a drop of 21.6 per cent from the same period o f last year. Automobiles Continued weakness was apparent in the automobile industry in September and the first three weeks o f October. Cram’s estimated output in the week o f October 17 was 23,570 units. This was slightly more than half as large as a month ago and compared with 36,462 units in the cor responding week last year. Each week since the middle o f August declines have been larger than the estimated seasonal amount and the Annalist adjusted index has receded from about 65 per cent of computed normal in the first seven months o f this year to 32 per cent in the week o f October 17. The reduction was partly due to a falling-off in retail sales in September. In that month they were estimated at 118,000 units, while output in the same period was 140,566 units, according to the Department o f Commerce. Manufacturers also were curtailing output in an ef fort to reduce stocks o f present models before starting production on cars to be introduced at the January shows. Compared with a year ago, automobile production was off 36 per cent and the drop from August was much greater than seasonal. The adjusted index receded from 52 per cent of the 192 3-1925 average in August to 40 in September. Passenger car production was 109,087 units in September and 1,762,206 in the first nine months, a fall ing off of 38 and 28 per cent from the corresponding periods of 1930. Truck production was down 29 per cent in September and 23 per cent in the first three quar ters compared with similar periods o f last year. Local steel mills and parts and accessory factories have reduced operations further as specifications on material needed for new model production have been moved for ward by one company after another. Tires, Bubber Activity at rubber plants declined in September, as revealed by employment figures o f 24 concerns reporting to the Ohio State Bureau o f Business Research, and rubber con sumption figures. The one per cent decline in the num ber employed from August to September compared with an average reduction o f two per cent for that period o f the past five years, but in the latest month there were 16 per cent fewer employed than a year ago. Consump tion o f crude rubber dropped 14 per cent from August to September, as against an average drop o f 11 per cent for that period o f past years. The latest available production figures cover August and show a falling-off o f 21 per cent from July. This was greater than seasonal, as was the drop from June to July. A remarkable upturn in tire production was shown in the first six months o f this year, after allow ing for seasonal variations, but since mid-year a greaterthan-seasonal decline has been apparent. In thi* con nection inventories did not show as large an increase in the first half o f 1931 as in other recent years, but they declined in July and August as shipments exceeded pro duction. Compared with a year ago, stocks in August were down 18 per cent. August tire production was six per cent below the same month last year and in the first eight months was off 2.8 per cent. Prices o f tires have declined 12 per cent in the past year, according to the United States Department o f Labor. 4 THE MONTHLY BUSINESS REVIEW Crude rubber has dropped 46 per cent in the same time and raw cotton has declined about 40 per cent in the period. The present low price of crude rubber is due to the abnormally large supply in relation to consumption. Do mestic stocks o f crude rubber on September 30 were 254,324 long tons, an increase of 50 per cent in the past year and of 5.6 per cent during the month. A t current consumption rates (23,638 tons in September) this rep resented nearly 11 months’ supply, compared with about seven months’ supply on hand last year and three and one-half months’ supply in 1929. The large stocks and very low prices seem to have little effect on imports, which during September, at 40,505 tons, exceeded the same month last year by 2.6 per cent. In the first nine months imports were 358,104 tons, a drop of 5.3 per cent from the same period of 1930. Clothing The clothing industry in this District showed little change in September, and manufacturers are awaiting the arrival o f cooler weather with the hope that some increased de mand might be experienced. Unusually warm weather this fall has retarded buying, and reorders of merchan dise have been very limited despite the fact that whole sale sales were not large when the fall and winter sam ples were first displayed. The showing o f next spring’s goods has just started, but manufacturers do not anticipate a large volume of advance orders since little buying o f this type has been done for some time. Dealers prefer to wait until the season opens before ordering the bulk o f their goods. Prompt delivery on such orders has done away with much advance purchasing. Demand for knitted dresses and suits this fall has been very good and knitting mills have been operating at normal levels, or better. Orders in some cases have exceeded last year by a good margin. Textile mills are still feeling the effect o f the late show ing on spring goods, and customers are buying in only limited quantities, it was reported. Employment at 46 clothing and textile concerns in this territory was unchanged in September compared with August, but was five per cent lower than a year ago. In the past five years the average August-to-September in crease was two per cent. Men's clothing factories have been operating at relatively better rates than concerns making wom en’s apparel. At the former, the number employed in September was one per cent larger than a year ago. W ool consumption in the entire country in the first eight months o f 1931 (the latest available) was 23 per cent greater than in the same period o f the preceding year. Other Manufacturing Many irregularities are still apparent in general manufacturing lines o f the Dis trict, though changes in the past month have been small, indicating that most concerns are mark ing time. Employment at 728 manufacturing plants dropped one per cent in August, a contrary-to-seasonal movement. Three groups o f companies, chemical, food and paper, reported a seasonal improvement. Shoe pro duction in September exceeded the same month last year. Inquiries are reported in several industries, but orders, as yet, are not forthcom ing in any volume. Clay Products. Conflicting trends were apparent in the various branches o f this industry in September. Em ployment at 73 concerns declined one per cent from Au gust to September, in contrast with a five-year average August-to-September increase o f the same amount. Thirtyfour companies reported increases, however, and six no change, but this was more than offset by decreases at 33 plants. Makers o f window glass reported a contraryto-seasonal drop in demand in the first part o f October. Makers o f glass containers experienced a seasonal drop in orders, but for the year, operations have been in quite satisfactory volume. Brick and tile production is still in very limited volume, though some slight improvement was reported in September by one large manufacturer. Electrical Supplies. Some seasonal improvement in or ders was experienced in the first part o f October, though, in most cases, they were for limited quantities. One con cern showed a 15 per cent increase in the first ten days o f October, compared with the same period o f the pre ceding month. Employment at 32 reporting plants was one per cent less in September than a year ago, but was three per cent below August. Hardware, Machinery. The number o f inquiries re ceived indicate to makers o f machine tools, etc., that man ufacturers are in need o f new equipment, but actual or ders are still developing very slowly. Failure of the au tom obile industry to expand production had a particu larly bad effect on this industry. Employment at ma chine tool factories dropped nine per cent in September, while in the past five years a slight im provem ent was experienced in the period. Makers o f foundry products and drop forgings showed a five per cent contraction in employment in September, with the number o f men work ing 26 per cent below last year. Metal Containers, Products. Miscellaneous metal con tainers were still reported in good demand, but fruit and other packing business has been completed. Makers of stoves and furnaces showed a seasonal increase in opera tions in September, but were employing ten per cent fewer men than a year ago. Paint. General conditions in the paint industry have changed but little in the past month. Demand for prod ucts is spasmodic and irregular. W orking forces have not changed for several months. Orders during the next few months will be chiefly for spring delivery, but cus tomers show little desire to anticipate demand. Paper. Consumption o f boxboard as containers has been about equal to a year ago, but writing paper de mand is rather irregular. This latter branch o f the in dustry is operating at about 70 per cent o f capacity. Prices on medium grade papers have been reduced from ten to 30 per cent. Compared with a year ago the number em ployed in September was down seven per cent. Shoes. W arm weather curtailed shoe sales in Septem ber and buying was irregular. Demand for cheap shoes has been fair, though better grades have been moving slowly. Output o f 27 establishments in September was 11.2 per cent below August, a seasonal change, but ex ceeded production in September, 1930, by ten per cent. 5 THE MONTHLY BUSINESS REVIEW The increase was sufficient to show a gain in production in the first nine months, the improvement being 0.2 per cent. In the entire country September output exceeded that o f August. Factories have difficulty gauging de mand, since most orders are for rush shipments and only for a few pairs o f certain lines at a time. cent. W ith the exception o f drugs, the declines in sales in the other lines in the first nine months closely approxi mated the September percentages. Hardware and grocery stocks expanded slightly in Sep tember, but all lines reported stocks much below one year ago. Collections have been only “ fair.” TRADE BUILDING Retail Trad© In September the dollar value o f retail trade, as revealed by reports from 56 large department stores in the Fourth District, was 17.6 per cent less than in the same month of 1930. The increase from August, 18.5 per cent, was just about the usual seasonal amount and the daily av erage, seasonally adjusted index stood at 79.4 per cent of the 1923-1925 monthly average. Sales in the first nine months were 10.7 per cent smaller in value than in the same interval o f 1930. In the individual cities some wide variations in sales were evident. Akron stores reported an increase in sales in September, compared with a year ago, o f two per cent. A ll other cities revealed declines ranging from five per cent at Cleveland, and 14 per cent at Columbus, to 22 per cent at Cincinnati, 23 per cent at W heeling, 26 per cent at Pittsburgh and Toledo, and 29 per cent at Youngstown. Proportionately more sales were for cash in September than a year ago, the ratio o f credit to total sales being 59 per cent, a reduction o f eight per cent from the same month o f 1930. The retail value o f stocks at department stores in creased substantially in September for the first time in many months, after allowing for seasonal variations. The adjusted index advanced from 71.7 per cent o f the 19231925 monthly average in August to 74.7 in September. The percentage increase in stock value was 13.4 per cent, while the average seasonal increase is about nine per cent. Collections fell in September, the percentage o f col lections on accounts receivable on August 31 being only 27.7 per cent. This was a reduction o f about 11 per cent from the corresponding month o f last year. Sales at wearing apparel stores were 26 per cent be low one year ago and at furniture stores were off 25 per cent. Chain grocery sales, per individual unit op erated, were six per cent smaller in September and down four per cent in the first nine months. Chain drug sales were off eight and three per cent in the corresponding periods. As in the entire country, construction activity in the Fourth District in September showed greater-than-seasonal improvement from August. The gain, 11 per cent, com pared with an average August-to-September increase in the past eight years of nine per cent. Despite this slight improvement, building continues in very limited volume, total Fourth District awards being valued at $19,342,000 in September, a loss o f 44 per cent from the same month last year. According to the F. W . Dodge Corporation, the decline in the third quarter and also the first nine months o f 1931, from corresponding periods o f 1930, was 43 per cent. This loss in both periods was much more drastic than that shown for the 37 eastern states, where the third quarter loss was 26 per cent and for the first nine months was only 30 per cent. In the third quarter the decline was well distributed among the three m ajor groups. Non-residential building suffered a loss o f 49 per cent from the third quarter of 1930; civil engineering was off 40 per cent and residen tial building was low er by 36 per cent. In the first nine months of this year the follow ing de clines from the like period of 1930 were shown in the value of principal types of building: commercial build ings, 60 per cent; factories, 59 per cent; educational buildings, six per cent; religious and memorial buildings, 46 per cent; social and recreational facilities, 60 per cent; residential building, 36 per cent; and civil engineer ing, 39 per cent. In the first half of October a decided falling-off was apparent in this section, total awards amounting to only $6,356,600, compared with $47,913,500 in the entire month o f October, 1930. Outlook for the remainder of this year is not very promising, for, contemplated projects reported in September were valued at $24,239,500, com pared with $69,171,200 in the same month last year. Building supplies are being sold at low prices in very limited volume. The Aberthaw index of building costs dropped slightly in the third quarter and was lower than since 1922. AGRICULTURE Wholesale Trade Estimates o f principal Fourth District crops were re vised upward again in September, chiefly a result o f very favorable growing weather and lack o f frost, and so far as acreage yields are concerned, the District has expe rienced one o f the most favorable seasons on record. The improvement was quite general throughout the en tire country, the month being the warmest September on record, but conditions in several sections, particularly the West and Northwest where there has been a dearth of rainfall, are less favorable than in this locality. The prevailing low level of prices, however, is very discouraging, and despite the larger yields than were reported a year ago, gross income o f farmers no doubt will be under the average o f past years. The United States Department o f Agriculture reported farm prices A ll reporting lines o f wholesale trade showed an expansion in sales from Au gust and in every case the improvement was greater than the average August-to-September in crease o f the preceding seven years. Grocery sales were up 13.2 per cent compared with a seven-year average in crease of 7.6 per cent; hardware firms showed an up turn of 9.4 per cent against an average change of 8.4; dry goods sales advanced 22 per cent, while in the pre ceding years the improvement was 16 per cent; and drug sales were 7.5 per cent larger in September than in Au gust, compared with an average change o f 4.5 per cent. Large reductions from a year ago were reported in dollar sales. Groceries were down 18 per cent; drugs 13 per cent; hardware 21 per cent and dry goods 28 per 6 THE MONTHLY BUSINESS REVIEW in Septemer as only 72 per cent of the five-year pre-war average, compared with 111 a year ago, and 143 in Au gust, 1929, the most recent high point. The decline in the past year has been 35 per cent, the greater part of which was due to a 50 per cent reduc tion in grain prices, a 44 per cent drop in fruits and vege tables and a 43 per cent decline in cotton and cotton seed prices. Livestock prices were down 33 per cent in the period and dairy and poultry prices fell 24 per cent. In contrast to the trend in prices o f most other farm products, dairy and poultry prices advanced in Septem ber, butter prices increasing 11 per cent. Dairy and poultry prices, at 93 per cent o f the pre-war average, were at an exceptionally high level when compared with prices of most grains, which were at 50 per cent of the pre-war average. The fall in farm prices has been much more drastic in the past year than in most other commodities, as is shown by the accompanying chart. Prices of all comm odi ties have declined 18 per cent, foods 18 per cent, and other commodities 13 per cent in the period. Compared with two years ago, the reduction in farm prices is even sharper, for, from the spring of 1927 to 1930, prices o f farm products were higher than other commodities. Prices of commodities bought by farmers have declined in the past year, but the ratio o f prices received for crops to prices paid for goods dropped from 76 per cent o f the five-year average in September, 1930, to 57 in Septem ber, 1931. Very low prices, particularly for grains, have had some effect on the acreage o f winter wheat farmers intended to sow this fall. F or the entire country farmers reported that they intended to plant 12 per cent less acreage to wheat this fall than was actually seeded last year. In the past eight years actual seedings have been three per cent below reported intentions. In Ohio, farmers intended to plant 11 per cent less wheat than was planted in the fall of 1930, but weather conditions always have some bearing on the actual sowings. Corn. The estimate o f corn production was revised upward in September, output for the District now being put at 209,087,000 bushels. This was nearly twice as large as the very small crop of 1930, and was over 12 per cent above the 1925-29 average. W ith no serious frosts in September, the crop matured well and yield promises to be close to the highest on record. Corn Yield per A cre (B u.) October 1 Condition (P er cent) 10-year 10-year ave. Indicated ave. 1931 1930 1920-29 Oct. 1, 1931 1920-29 56 81 45 39 Ohio .............................. ...92 45 SI 51 42 Pennsylvania ...............94 Kentucky .......................92 39 80 33 27 W est V irgin ia ...............90 39 83 86 34 U nited States ...............71.4 58.3 77.0 25.6 28.0 The above table shows that the October 1 condition o f corn in states o f the District was much better than the average o f past years and the entire country. Acreage yields also were higher. Oats. The October 1 estimate of oat production in this District was revised upward by nearly 3,000,000 bushels, but at 75,111,000 bushels, it compared with a five-year average harvest of 89,171,000 bushels, a reduc tion o f 16 per cent. A smaller than average oat crop was reported in many sections o f the country, partly on account o f unfavorable weather, and partly because o f a reduction in acreage planted. A ccording to the Department o f Agriculture, supplies of feed grains (corn, oats, barley, and grain sorghum s) for the entire country for the 1931-32 season are slightly below average, but much in excess o f those available last year, while the supplies o f hay are less than a year ago and below average. The deficiency o f feed grains is partly offset by the increased feeding o f wheat, which, at present prices, is more profitable than some other grains. The supply o f hay in this District is much larger than a year ago, but is slightly below the five-year average. Potatoes. The condition o f potatoes in the Fourth Dis trict improved perceptibly in September, the October 1 production estimate, 19,689,000 bushels, being about 2,000,000 bushels higher than a month earlier and over 4,000,000 bushels larger than last year’s crop, but slightly below the five-year average harvest. In Ohio the crop was above average, but in the other three states smaller-thanaverage crops were reported. Fruits. Little change in fruit estimates occurred in September, though grapes were yielding higher than was at first expected, and much better than last year or av erage. The Ohio crop is now estimated at 31,500 tons, against a five-year average of 21,740 tons. The Pennsyl vania crop is reported to be 24,840 tons, compared with 18,004 tons in the five years 1925-29. The apple estimates remain unchanged from a month ago, but the drop has been large and the fruit is small where trees are overloaded. W ith the crop one of the largest in recent years, prices are low, both for fresh fruit and cider stock. Tobacco The estimate o f tobacco production in this District was increased by over 5,000,000 pounds in September, and on October 1 was 195,344,000 pounds, nearly 40,000,000 pounds larger than the record harvest o f last year, and about 50 per cent greater than the average harvest in the five years 1925-29. The crop was all cut under fa vorable weather conditions and curing is progressing nicely. According to present indications, the quality o f the crop promises to be exceptionally good, since weather during the entire season has been ideal. Yields are ex pected to be the highest on record, for acreage under cultivation was only 13 per cent larger than a year ago in the burley sections which are the most important pro- 7 THE MONTHLY BUSINESS REVIEW ducing areas o f this District. There has been a large demand for old-crop smoking tobacco and cigarette grades, with only very limited quan tities appearing now and then. Tobacco now available is practically all o f poor quality. Interest now centers on the opening o f the selling sea son, which w ill occur next month, and the prices most likely to be paid. Opening sales in eastern Carolina were rather large, but o f rather poor quality and the average price was around 8 % cents a pound. H om estead.... Fourth District Business Statistics Fourth District Unless Otherwise Specified (000 omitted) Sept., % change Jan-Sept., % change 1931 from 1930 1931 from 1930 Bank Debits— 24 cities................. 3 2,268,000 — 21.3 Savings Deposits— end of month: 28 selected banks, O., W. Pa... .3 — 4.1 719,212 Postal Receipts— 9 cities..............3 — 6.5 2,694 Life Insurance Sales: Ohio and Pennsylvania — 10.0 .3 75,200 Retail Sales: Department Stores— 56 firm s ...? 17,602 — 17.6 Wearing Apparel— 13 firms........3 950 — 26.1 Furniture— 51 firms..................... 3 652 — 24.6 Wholesale Sales: Drugs— 13 firms............................3 1,402 — 12.9 Dry Goods— 11 firms.................. 3 — 28.4 1,392 Groceries— 40 firms......................$ — 17.9 4,864 Hardware— 17 fir m s ...._.............3 1,271 — 21.1 — 36.6 4,568 Building Contracts— Residential.3 Building Contracts— T otal...........3 19,342 — 43.6 + 5 7 .6 4,314 Commercial Failures— Liabilities.3 Commercial Failures— Number. .. 1652 + 11.5 Production: Pig Iron, U. S......................... Tons — 48 . 8 1,165 Steel Ingots, U. S.................. Tons 1,548 — 45.5 109,0872 — 37.8 Automobiles— Pass. C a r ... .U. S. 31,3382 — 29.1 “ — Trucks.............U. S. Bituminous C oal....................Tons — 21.4 12,300 Cement— O., W. Pa., W. Va..Bbls. 1,063 — 44.6 Elec. Power— O., Pa., K y ... k. w.h. 1,0963 — 4.5 Petroleum— O., Pa., K y....... Bbls. 1,7703 — 11.1 5 Shoes........................................Pairs 10.0 Tires, U. S.......................... Casings 3,136s — 6.3 Bituminous Coal Shipments: 4,699 Lake Erie P orts..................... Tons — 4.5 Iron Ore Receipts: — 39.1 Lake Erie Ports..................... Tons 2,873 1 M onthly Average January-August 2 Actual Confidential 3 August + 22,829,000 755,1401 24,737 + 0.1 Steubenville... — 5.2 W arren............ 861,304 — 17.3 Youngstown. . , 165,651 9,919 7,097 — 10.7 — 11.7 — 20.9 13,201 11,709 41.004 11,372 56,508 223,595 62.271 1,6642 — 15.004 20,412 1,762,2062 354,229* 113,961 8,863 9,0014 15,0294 — 41.7 — 37.0 — 27.8 — 23.3 — 18.2 — 36.6 6.8 — 30,0554 — 19.3 + 0.2 — 2 .9 23,429 — 12.271 — 53.4 5 21.6 Percentage Increase or Decrease SALES SALES STOCKS Sept.First nine Sept.Sept. Sept. months + 2.3 — 21.9 — 5 .0 — 14.4 — 25.9 — 26.1 — 22.9 — 28.8 — 18.0 — 17.6 — 5.3 — 8 .4 — 9 .8 — 9.1 — 12.8 — 6.1 — 13.9 — 17.8 — 13.2 — 10.7 — 13.3 — 10.6 — 7.8 — 15.2 — 11.3 — 16.6 — 9 .0 — 16.7 — 15.5 — 11.6 — 30.4 — 23.9 — 26.1 — 10.6 — 12.2 — 11.7 — 3 .2 — 11.8 — 9 .0 — 21.6 — 18.2 — 29.9 — 29.6 — 39.2 — 35.5 — 24.6 — 9.1 — 22.3 — 20.9 — 26.1 — 23.5 — 15.0 — 20.9 — 8 .4 — 6 .0 — 3.3 — 4.1 — 16.3 — 29.3 — 11.6 — 7 .4 — 9 .4 — 14.3 — 17.9 — 28.3 — 12.8 — 21.1 — 27.2 — 21.3 — 18.5 — 7.1 — 14.2 — 16.5 — 17.9 — 26.3 — 8 .2 — 22.5 — 4 weeks ending Oct. 21, 1931 81,221 10,354 29,704 308,419 641,767 121,415 61,434 30,876 3,638 10,937 4,370 14,474 8,885 4,600 7,021 13,001 746,477 14,632 7,644 78,413 8,067 35,591 42,719 7,926 2,293,585 (Thousands o f Dollars) Year-to-date Year-to-date % change Jan. 1 to Jan. 2 to Oct. 21, Oct. 22, from 1931 1930 1930 — 13.7 791,723 969,035 86,663 — 22.8 126,460 — 16.1 350,389 448,675 — 10.3 3,276,829 3,683,792 — 19.9 6,613,598 7,991,485 — 33.0 1,512,038 1,788,936 — 23.4 749,185 899,047 — 14.5 308,381 390,002 — 19.2 37,584 50,395 — 8.3 110,176 142,974 — 4 .5 38,749 45,106 — 24.6 189,575 245,288 — 25.0 103,969 125,367 — 13.2 49,140 56,997 — 26.6 85,935 107,982 — 13.4 123,013 163,521 — 19.4 7,447,121 9,747,243 — 20.5 176,101 223,687 — 8.5 83,401 101,910 — 54.6 1,303,092 1,783,709 — 24.5 82,187 116,073 — 6.5 361,030 431,896 — 38.0 507,194 677,301 — 21.7 86,303 99,057 — 21.5 24,473,376 30,415,938 % change from 1930 — 18 .3 — 31 .5 — 21 .9 — 11..0 — 17..2 — 15..5 — 16..7 — 20 .9 — 25..4 — 22..9 — 14. 1 — 22. 7 — 17. 1 — 13..8 — 20. 4 — 24. 8 — 23. 6 — 21. 3 — 18. 2 — 26. 9 — 29. 2 — 16. 4 — 25.,1 — 12..9 — 19. 5 8. 2 — 26.3 — 17.9 — 22.5 — 35.0 — 43.3 + 9 3 .7 +12.2 (1931 compared with 1930) M id d letow n ... — 19.1 Wholesale and Retail Trade D E P A R T M E N T STORES (56) A kron...................................................................... Cincinnati.............................................................. Cleveland............................................................... Colum bus............................................................... Pittsburgh............................................................. T oled o.................................................................... W heeling................................................................ Youngstown.......................................................... Other Cities.......................................................... D istrict................................................................... W E A R IN G A P P A R E L (13) Cincinnati.............................................................. Other Cities.......................................................... D istrict................................................................... F U R N IT U R E (49) Cincinnati.............................................................. Cleveland............................................................... Columbus.............................................................. D ayton................................................................... T oled o................. .................................................. Other C ities.. . . ................................................. District. . ............................................................... C H AIN STORES* Drugs— District (4 )............................................ Groceries— District (6 ) ...................................... W HOLESALE GROCERIES (38) A kron..................................................................... Cleveland............................................................... Erie......................................................................... Pittsburgh............................................................. T oled o.............................................................. . . . Other Cities.......................................................... D istrict................................................................... W H OLESALE D R Y GOODS (11).............. W H OLESALE DRUGS (1 3 )......................... W H OLESALE H A R D W A R E (1 7 ).............. *Sales per individual unit operated. Debits to Individual Accounts ’ 4.'8 — 22.7 — 21.0 Building Operations Sept., 1931 3 162,904 14,910 C anton................. 12,570 1,548,860 Cleveland............ 598,750 Cleveland Suburbs*......... 480,530 82,400 Covington, K y . . 24,475 138,904 2,140 444,220 17,450 9,275 48,920 Middletown* 3,245 N ewark................ 11,900 Pittsburgh, P a .. 1,243,157 Portsm outh......... 20,000 30,645 15,580 Steubenville........ 17,600 27,849 Warren................ 26,795 34,590 Wheeling, W. Va 93,439 Youngstown....... (Value of Permits) % change Jan.-Sept., from 1930 1931 — 59.2 31,779,709 — 64.9 169,946 — 82.5 647,115 — 10.2 21,837,755 — 86.0 10,585,750 — 46.8 — 79.4 — 34.3 — 22.4 — 85.8 + 8 2 .7 — 57.6 — 36.3 — 38.0 — 50.5 + 6 7 .8 + 7 5 .9 — 58.3 + 4 0 .6 — 82.0 — 53.3 — 98.6 — 60.6 — 88.5 — 25.9 10,934,523 3,041,700 493,955 2,335,378 115,697 1,981,920 437,107 97,624 680,507 75,968 98,700 10,299,460 293,400 100,175 1,162,507 188,300 1,844,945 263,432 545,250 1,374,034 Jan.-Sept., 1930 38,665,664 288,923 1,281,007 32,627,512 22,232,875 % change from 1930 — 79.5 — 41.2 — 49.5 — 33.1 — 52.4 14,877,849 4,202,150 535,650 4,234,734 232,090 3,480,213 1,057,801 540,318 573,448 558,589 228,035 17,344,754 581,500 249,377 679,980 602,020 6,098,059 595,725 941,047 2,333,539 — 26.5 — 27.6 — 7.8 — 4 4.9 — 50.1 — 43.1 — 58.7 — 81.9 + 1 8 .7 — 86.4 — 56.7 — 4 0.6 — 49.5 — 59.8 + 7 1 .0 — 68.7 — 69.7 — 55.8 — 42.1 — 41.1 5,111,108 — 56.7 71,384,857 125,042,859 — 4 2.9 ♦Includes Bay Village, Cleveland Heights, East Cleveland, Euclid, Fairview, Garfield Heights, Lakewood, Maple Heights, Parma, R ocky River, Shaker Heights, South Euclid, University Heights. Fourth District Business Indexes (1923-1925 = 100) Sept., 1931 84 Bank Debits (24 cities)....................... 113 Commercial Failures (N um ber). . .. (L ia bilities)... 98 Postal Receipts (9 cities).................... 104 Sales— Life Insurance (Ohio & P a.). 90 “ — Department Store (53).......... 75 89 “ — Wholesale Drugs (1 3 )........... “ — « Dry Goods (1 0 ).. 54 u — “ Groceries ( 3 8 ) . . . 79 " — “ Hardware (1 5 ) ... 61 “ — “ All (7 6 )................. 73 “ — Chain Drugs (3 )* * ................. 77 41 27 Production— Coal (O., W. Va., E. K y .)........... 68 — Cement (O., W. Pa., W. V a .). . . 88 — Petroleum (O.. Pa., K y .)* ........... 96 “ — Elec. Power (0 ., Pa., K y .)* ........ 131 “ — Shoes................................................ 90 ♦August. **Pcr individual unit operated. Sept., 1930 106 101 62 111 100 91 103 77 96 76 90 84 72 42 87 160 108 137 82 Sept., 1929 126 103 79 119 113 102 114 108 103 92 104 89 135 73 97 160 124 158 110 Sept., 1928 118 109 84 110 96 101 107 106 103 96 103 93 142 94 87 188 115 135 110 Sept., 1927 113 102 73 117 102 95 112 104 103 101 104 96 137 125 88 150 114 123 122 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions (By the Federal Reserve Board) Industrial production and factory employment, which usually increases at this season, showed little change from August to September, and, conse quently, the Board’s seasonally adjusted indexes declined. The general level o f wholesale prices also declined. Gold exports and earmarkings, together with an increase in domestic currency demand between the middle of Septem ber and the middle o f October resulted in a large growth o f the reserve bank credit in use and a rise in money rates. Production and Employment Index number of industrial production, adjusted for seasonal variation, (1923-1925 = 100). Latest figure, September, 76. Index of United States Bureau of Labor Sta tistics (1926 ~ 100). Latest figure, September, 69.1 Industrial production, as measured by the Board’s seasonally adjusted index, declined from 79 per cent o f the 1923-1925 average in August to 76 per cent in September. Activity at steel mills decreased from 31 per cent o f capacity to 28 per cent; output o f automobiles was reduced substantially and lumber production continued to decline. At cotton mills production in creased seasonally, while activity at woolen mills and shoe factories declined contrary to the usual seasonal tendency. Output o f petroleum was smaller in September than in August, but the rate o f output prevailing at the end o f September was higher than at the end of August. The number employed at factories showed little change from the middle of August to the middle of September, a period when employment usually increases. In iron and steel mills, automobile factories and lumber mills, employment decreased further, contrary to the seasonal tendency; in the clothing and silk industries there were substantial increases in employment, partly of a seasonal character; in mills producing cotton goods, employment increased less than usual, and in woolen mills it declined from recent rela tively high levels. Data on value o f building contracts awarded for the period between the first of August and the middle o f October, as reported by the F. W . Dodge Corporation, show a continuation o f the downward movement o f recent months for residential as well as for other types o f construction. Estimates by the Department o f Agriculture, based on October 1 condi tions, indicated a cotton crop o f 16,284,000 bales, the largest crop reported, except that of 1926; a total wheat crop somewhat larger than usual, and a corn crop of 2,700,000,000 bushels, 29 per cent larger than last year, and two per cent smaller than the five-year average. Distribution Freight car loadings of merchandise and sales by department stores in creased in September, but less than the usual seasonal amount. Wholesale Prices The general level of wholesale prices declined from 70.2 per cent o f the 1926 average in August to 69.1 per cent in September, according to the Bureau o f Labor Statistics. Decreases in the prices o f livestock, meats, hides, woolen goods, cotton and cotton goods, were offset in part by increases in prices of dairy products, petroleum and petroleum products. Further declines in the price of cotton during the first few days o f October were follow ed by sub stantial increases in subsequent days. Bank Credit Monthly rates in the open market in New York: Commercial paper rate on 4 to 6 month paper. Acceptance rate on 90-day bankers* acceptances. Latest figures are averages of first 17 days in October RESERVE BANK CREDIT AND FACTORS IN CHANGES 1§5a Monthly averages of daily figures. Latest fig ures are averages of first 17 days in October. During the four weeks follow ing the suspension o f gold payments in England on September 20, $600,000,000 o f gold was withdrawn from this country’s monetary stock in the form o f exports and earmarkings. Domestic demand for currency continued to increase, the growth for the month ending in the middle o f October being about $400,000,000. The growth in the amount of currency outstanding, however, slowed down after the first few days in October. The demand for credit arising from gold movements and currency growth was met by member banks through the sale o f acceptances to the reserve banks and by rediscounts. Volume o f reserve bank credit outstanding, consequently increased between the week ending September 19 and the week ending October 17 by $904,000,000, and on October 17 stood at $2,169,000,000, the highest level for ten years. Gold and currency with drawals resulted in a decrease o f deposits at member banks in leading cities. Loans and investments o f these banks also declined, reflecting reductions in loans to security brokers, as well as sale o f acceptances to the reserve banks, and sales of United States securities. During this period there was a rise in short time m oney rates in the open market and in yields on high grade bonds. On October 9 the Federal Reserve Bank o f New York advanced its discount rate from 1 % to 2 y2 per cent and on October 16 to 3% per cent. Discount rates were also advanced at the Boston, Philadelphia, Cleveland, Richm ond, Chicago, St. Louis, Dallas and San Francisco reserve banks.
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