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MONTHLY BUSINESS REVIEW C ove r in g financial, industrial Re ser ve Oistrict and a g r i c u l t u r a l c o n d i t i o n s Vol. 18 Cleveland, O hio, November 30, 1936 A t the present time fourth district business is flourish ing- in most manufacturing fields and also in retail and wholesale trade. Indexes of activity in important lines advanced to new high levels for the recovery movement in October and gains over last year were larger generally than in earlier months of 1936. Recently announced wage increases, bonuses, and divi dend payments, the amount of which can hardly be ap proximated and which will not be reflected in purchasing power at least until December, and plant expansion pro grams, are all indicative of the improvement which has occurred this year. But in addition, the wage increases point rather definitely to higher operating costs, and re ports recently have been received of buying in some lines in excess of current requirements to take advantage of prevailing prices. A t the end of September, however, the Department of Commerce index of commodity stocks was nearly five per cent under a year ago and inventories of manufactured goods are low ; they were approximately equal to the average of 1923-1925 while raw material in ventories were 36 per cent higher than at that time. Industrial employment in this section increased more than two per cent in October compared with September, somewhat greater than seasonal, and indexes in the latest month were higher than since early 1930. In addition there were gains in mining activity and employment in various lines of trade. Compared with a year ago gains in principal cities were: Cleveland 7 per cent; Cincin nati and Canton 11 per cent: Dayton 20 per cent; Mas sillon 19 per cent; Toledo 3 per cent; and Springfield 22 per cent. Payrolls in many cases showed larger in creases because of the greater number of hours worked and higher wage rates paid. All lines of retail trade experienced greater than seasonal increases in October. Department store sales were larger than since 1930 and the gain over last year in the month was 22.5 per cent; for the first ten months the increase was 14 per cent. Collections also improved considerably in most lines. After allowing for seasonal variations, store inventories showed a further expansion in the month to the highest level since early 1930. Wholesale trade reports confirmed this increased demand for merchandise No. 11 on the part of retailers. Retail prices advanced slightly in October for the fourth consecutive month and, accord ing to Fairchild’ s index, were about 2.7 per cent higher than in October 1935, but the gain in sales greatly ex ceeded the price rise. In addition, proportionately more higher-priced merchandise was bought in October than a year ago. In the industrial field, difficulties with new automobile models held up assembly lines and in turn activity at local parts and material plants to a degree, although the building up of a large supply of parts kept most plants operating at better levels than a year ago. Plate glass production in October exceeded all previous records. Steel ingot pro duction was up 44 per cent and mill operations held quite steady at close to 75 per cent with many local plants working at higher than average rates. Machine tool and foundry equipment orders increased in O ctober; clothing produc tion was u p ; shoe factory output was 20 per cent in excess of October 1935, and paint, paper, and boxboard produc tion continued in larger volume than a year ago. China and pottery sales were reported to be rather limited for this season, but gains over 1935 were still evident. Iron ore receipts at Lake Erie ports in October were 70 per cent larger than a year ago and the gain for the season to November 1 was 53.6 per cent. Coal shipments were up 73 and 27 per cent, respectively, in the same periods THE MONTHLY BUSINESS REVIEW 2 and total freight movement on the Great Lakes this season has closely approximated that of 1930. Coal mining activity in this section increased in October and early November to the highest level for this season since 1929. Reopening of many beehive ovens in south western Pennsylvania in response to greater demand for coke has benefited a section of the district long depressed. Building contracts awarded in this district in October were 20 per cent larger than in September, the gain being in the nonresidential, public works, and utilities classi fications. Residential contracts awarded were smaller than in September a year ago, entirely due to a falling-off in Federally-financed residential construction. Contracts awarded for homes to be occupied by owners were larger than in September and 80 per cent in excess of October 1935. For the year to date total building awards were 40 per cent larger than in the corresponding ten months of the previous year. FINANCIAL Except for an increase in loans on securities by weekly reporting member banks in leading cities of the fourth district in the four weeks ended November 18, little change was evident in the trend of bank condition figures. De posits, both at the reserve bank and the member banks, continue to increase to new high levels. Debits to individual accounts at banks in 24 cities of the district in the four weeks ended November 18 were 19.2 per cent larger than in the same period of 1935 and the gain for the year to date was 17 per cent. A t the reserve bank industrial advances declined between October 21 and November 18 at approximately the rate evident earlier in the year. From the peak in June these loans have been reduced nearly one-third. Bills discounted and acceptances held were little changed in the four latest weeks. Investments in Government securities also remained at $245,770,000 for the past six weeks and the increase in comparison with the last year represented only a shift in the System's holdings from one reserve bank to another. Gold reserves advanced to a record of $647,000,000 in the third week of November; this was $152,000,000 higher than a year ago. From October 21 to November 10 note circulation of this bank rose over $10,000,000 to $404,000,000, a new high level since the abnormal circulation in March 1933. In the following week a reduction of $5,000,000 was evident, but on the latest date note circulation was $63,000,000 above last year at this time. Several factors can be point ed to as contributing to this gain. Am ong these are sub stitution of Federal reserve notes for national bank notes as they are retired; increased business, larger payrolls, and higher prices all require more circulating media; and banks have more vault cash than a year ago partly because with the large volume of excess reserves there is little incen tive for member banks to return surplus cash to the reserve bank. Reserve deposits of member banks rose to $458,000,000 on November 18, a new high record and a gain of nearly $100,000,000 over last year. This was approximately $180,000,000 in excess of the higher reserve requirements that have been in effect since August 16. The accompanying chart shows the growth in excess reserves since the 50 per cent increase became effective. In mid-November they were approximately 65 per cent over requirements, higher than since early September. M ember Bank Credit Despite a further increase in de mand deposits at reporting member banks in leading cities to an alltime record high level between October 21 and November 18, there was little change in the volume of loans made by these banks in the period. Adjusted de mand deposits rose from $1,080,000,000 to $1,104,000,000 in the four latest weeks and were 14 per cent above a year ago. Time deposits also increased slightly in the four latest weeks, but Government deposits declined. Total loans made by these banks continued in the first three weeks of November at about the same level as in late October, but about four per cent above a year ago. Loans on securities rose from $225,000,000 to $234,000,000 in late October, but declined to $231,000,000 by November 18. This was the first net increase of any size in these loans since early spring and that rise proved later to be only a tem porary reversal of the generally downward trend evident in recent years. In the same four-week period “ other loans” , chiefly commercial, declined about two per cent, but they still were larger than at this time last year by approxi mately 20 per cent. Investments of reporting member banks in Government securities and those fully guaranteed by the Government increased 2.8 per cent in the four latest weeks, a decline in holdings of the latter being more than offset by increased holdings of Government securities. Compared with a year ago reporting member bank holdings’ of Government securi ties were up 12 per cent. Investments in other than Gov ernment securities increased slightly between October 21 and November 18 and on the latest date were 13 per cent larger than a year ago. Total loans and investments of these reporting banks were about nine per cent larger than at this time last year, but total deposits were up 13 per cent in the corresponding period. MANUFACTURING, MINING Iron and Steel Steelworks operations have held steady at their high rate of close to 75 per cent, strong demand from miscellaneous sources, swiftly advancing automobile production and heavy rail awards having helped sustain operations in the past month. The wage increases and the anticipated price advances for THE MONTHLY BUSINESS REVIEW 3 which, compared with the 2,728,257 tons of September, was first quarter are the two outstanding developments in iron an improvement of 263,537 tons, or 9.7 per cent. Part of and steel markets. Higher steel prices have been announced this increase was attributable to the fact that October was as of December 1. Increases of $2 a ton in semifinished steel, $3 a ton on bars, shapes and plates, and $3 to a one-day longer month than September. October output was the best for any month since May 1930. Production for $5 on sheets, have been made. P ig iron advanced $1 a October 1935 was 1,978,379 tons. ton. A small amount of protective buying appeared prior to For ten months of 1936, production has amounted to 24,announcement of price changes on finished steel, while a greater amount of speculative purchasing appeared in pig 607,570 tons, against 16,858,694 tons in the corresponding period of 1935. The increase of 7,748,876 tons is equivalent iron, where prices had not changed for one year. Tin plate to 45.9 per cent. producers virtually reaffirmed their present prices for the first quarter of 1937. High speed tool steel prices were raised Coal Although coal stocks above ground have $20 to $50 a ton. increased this fall and industries have Better automotive operations aided almost all lines of the been adding to their inventories, the ac steel business. Assemblies climbed over the 100,000-mark tual supply in October was 15.5 per cent less than a year in the middle of November for the first time since June, and ago. Because of the higher rate of consumption, inven reached 110,000 in the week ending November 21. Sheet tories in terms of days' supply were 27 per cent smaller mills were being given all the business they could handle. than at this time last year. Coal shipments from Lake Rail awards were very heavy during the early part of N o Erie ports so far this season have been 27 per cent greater vember, including Pennsylvania railroad's purchase of 100,than in 1935 and yet supplies at upper lake ports are only 000 tons, and announcement of higher rail prices was expect two per cent larger than a year ago. ed to result in large tonnages. Repairing of cars and other Increased industrial activity, freight movements and an equipment for the winter has been going forward briskly. active demand for coke have caused coal mining operations Freight car awards aggregated 39,643 for the ten months in this section to expand. Output in October was 17,703,000 ending October 31, compared with only 9,158 in the same tons, a gain of 26.6 per cent over last year and bringing the period last year. Steel orders for construction purposes cumulative increase in production to 16 per cent. This is the showed signs of slackening due to the winter season. In fin •best year so far since 1930, and the best October since 1929. ished steel, the price advances were expected to bring in In the entire country October production was up 13.7 per heavy orders during December as consumers sought to get in cent over 1935, and the increase for the ten months was 15 ahead of the deadline. By the middle of November backlogs per cent. had been worked down to the advantage of the delivery situa Sharp gains in coke demand from foundries and the tion. iron and steel industries have caused many long-idle Through the week ending November 21, the national op beehive ovens in the Connellsville, Pennsylvania district erating rate held above 70 per cent for eighteen consecu to be rebuilt and put in operation. Close to 3,000 ovens tive weeks. This was a record which had not been are again in production to help satisfy the demand for attained since 1929. A year ago the national rate ranged coke. In the first ten months of this year beehive coke between 51 and 55 per cent. In the various steel centers production was 31 per cent in excess of 1935. of the fourth district fluctuations in weekly operating rates Prices have become somewhat more stabilized; coke is were varied between October 24 and November 21. At quoted at $3.75 to $4.00 a ton at oven, an increase of 25 to Cleveland they deviated little from 79.5 per cent; at Wheeling 50 cents over last year, but coal prices are still under 1935. the rate ranged from 92 to 89 per cent; at Youngstown from 77 to 73, while Cincinnati operated at 96 per cent in all but Automobiles Failure of some auto assembly plants to one week. A t Pittsburgh the rate dropped from 77 to 67 step up operations in October at the rate per cent, but a year ago these mills, dependent on the heavy expected or as rapidly as a year ago industries, were operating at only 45 per cent. caused total monthly output to be 17.4 per cent under Octo Production of steel ingots in October, 4,545,001 gross tons, ber 1935. Difficulties with new models were chiefly respon sible for this because demand for cars has continued much brought the total calculated output for" ten months of above other recent years; those makers who introduced new 1936 to 38,150,305 gross tons, compared with 27,194,171 tons models early in the season reported many more orders than in ten months of 1935 and 33,417,985 for the entire year. A v a year ago at this time. A ccording to the Department of erage daily production in October was 168,333 gross tons, Commerce, 224,628 cars and trucks were assembled in O cto compared with 160,043 tons in September, a gain of 8,290 ber. This was 66 per cent ahead of September, but not up tons per day, or 5.17 per cent. Average daily production to estimated seasonal levels, the Federal Reserve Board’s in October 1935 was 116,398 tons. In October 1936, steel capacity was engaged at 76.70 per cent, compared with 72.92 adjusted index receding 14 points to 93 per cent of the 192325 average. As new-model difficulties were ironed out, weekly in September and 52.58 per cent in October 1935. production schedules increased quite rapidly in the first three Eight additional blast furnaces were blown in during Octo weeks of November. By November 21 the weekly rate had ber and average daily pig iron production in the month was risen to 110,160 units, according to Cram’s reports, compared 96,509 gross tons, a gain of 5,567 tons, or 6.1 per cent, over the 90,942-ton daily rate of September. This showing has with 104,248 in the preceding six-day period. These rates not been equaled in any period since June 1930, with 97,817 were considerably above last year, assemblies in correspond ing weeks being 94,723 and 93,177 units, respectively. tons. In October, one year ago, the daily rate was 63,818 Passenger car production in October was 190,688 units, tons. Total production for October was 2,991,794 gross tons, an increase of 100,000 cars over September, but still 10.6 4 THE MONTHLY BUSINESS REVIEW per cent under October 1935. Up to November 1, passen ger cars assembled numbered 2,909,000 units, an increase of 13 per cent over last year and the best since 1929. Truck production lagged in October, output of 33,940 being even less than in September and 42 per cent under a year ago. It was smaller than in any month since September 1935. In the first ten months 652,236 commercial cars were made, a new high record for this branch of the industry. Total passenger car and truck production in the first ten months of 1936 exceeded 3,560,000 units, an increase of 13.2 per cent over the corresponding period of 1935. The rapid expansion in assemblies and large orders for parts and materials in part prompted by reports of new car orders at the various shows now in progress and also by the general feeling in the industry that cost of materials probably will have to be increased, caused local parts plants, glass factories, steel mills, and other lines connected with the auto industry to increase operations in recent weeks. New passenger car registrations in October in seven prin cipal Ohio counties were down quite sharply from Septem ber, reflecting the transition from old to new models, but compared with last year a gain of 40 per cent was re ported. For the year to date new passenger car regis trations were up about 45 per cent from 1935 and truck registrations were ahead by nearly 60 per cent. Rubber, Tires W hile tire production apparently increased from September to October, judg ing by rubber consumption and employ ment in the month, m anufactured tire sales are reported to have shown little change, the decline in those sold to deal ers for replacement purposes being largely offset by increased requirements from the auto assembly industry. Manufac turers used 49,509 tons of rubber for all purposes in Octo ber, an increase of 6.9 per cent over September and 18 per cent above October 1935. Consumption exceeded imports in the month by over 9,000 tons and domestic stocks dropped to 219,553 tons. In eight of the first ten months of this year consumption has exceeded imports and a year ago manufacturers had on hand 323,000 tons of crude rubber. The decline in the twelve months was about 30 per cent. In the first ten months American manufacturers used 474,000 tons of crude rubber, as against 40*5,760 tons in the same period of 1935, a gain of 16 per cent. Consump tion of rubber for tires alone was up about the same amount in the first nine months. So far this year rub ber consumption has been at an alltime record rate and by mid-November it surpassed the entire year 1935. With a close check being maintained on crude rubber produc tion in Eastern countries, world stocks have declined sharply despite increases in export quotas. The price of crude rubber continued to advance in November and in the third week it was above 18 cents a pound, compared with 13 cents a year ago and higher than since 1929. Imports of crude rubber in October were 40,920 tons, a decrease of 15 per cent from September, but a gain of 19 per cent over imports in October 1935. Crude rubber afloat to this country on October 31 was substantially larger than a month or year ago. It was estimated at 67,825 tons compared with 49,913 tons on October 31, 1935. Tire production in September, the latest figure avail able, was only slightly under August and was 31.5 per cent greater than a year ago. A t 4,981,000 casings, it exceeded shipments in the month by over a million tires, and manufacturers’ inventories rose quite sharply. On October 1 they were nearly ten per cent larger than a year ago. Tire production in the first nine months was 14.5 per cent greater than in the same period of 1935. The Department of Commerce report of tire stocks as of October 1 indicates that dealers’ average stocks were nearly eight per cent smaller than on that date last year, but at about the same level as in October 1933 and 1934. The average inventory consisted of 63.2 casings and 80 inner tubes. The report revealed that 65 per cent of the 12,000 dealers handled only one make of tire, 27 per cent two makes and the remainder more than two brands. While reports concerning mass distribution stocks were not complete, they indicated an increase in such inventories from last year. Demand for rubber products, other than tires, has con tinued at a high rate in recent weeks, according to re ports. Clothing W earing apparel sales at reporting stores in this district in October were up sharp ly from the corresponding month of 1935, the gain in men’s clothing sales being 24 per cent and in women’s wear 21 per cent. Sales of boys’ wear were up 24 per cent and the increase in men’ s furnishing sales was 20 per cent. These gains were considerably larger than in preceding months and while prices of wearing apparel increased in October, according to Fairchild’s index, the rise at stores throughout the country was slight. W om en’s apparel prices advanced 0.2 per cent and men’s wear 0.1 per cent in the month, but prices in both groups were less than two per cent above last year at this time. With retail sales somewhat exceeding expectations, in ventories were reduced and fill-in orders have been received by local manufacturers in larger volume than is normal at this season. As a result the entire industry is in a healthy position as work on spring clothing gets under way. Plant operations have been increasng following the seasonal slack period which was of shorter duration than usual. Up to the present time there has been a decided increase in the size of spring orders received, the gain in the case of one manufacturer being 35 per cent over last year. In the textile field conditions have shown rather marked improvement in recent weeks. W ool prices have advanced THE MONTHLY BUSINESS REVIEW after showing little change for several months. In midNovember they were at the highest point of the year and 18 per cent above a year ago. Scarcity of wool supplies in this country is noticeable. W ool deliveries at Boston in the first nine months were less than in the same period last year and also under the average of the past ten years and while wool consumption so far this season has been less than in 1935, it was greater than in any of the preceding ten years. Other Manufacturing October and early November was a period in which operations in the smaller industries continued at relatively high lev els and gains somewhat greater than seasonal over previ ous months were recorded in several lines. While increased operations represented chiefly demand for products for im mediate consumption there were a few reports of buying in excess of current requirements because of increasing costs that are felt to be imminent in certain lines. Orders of seasonal products have been placed in better volume than since 1929 and many plants continue to operate day and night shifts. In some cases October was reported to be the best month on record. Plate glass production in October exceeded 20,750,000 square feet, a new high for all time and a gain of 25 per cent from October 1935. W ith one or two exceptions plant operations were at capacity. W indow glass orders on hand are reported to be the largest on record, those placed since November 17 being taken on condition that the price at date of shipment would prevail. Manufacturers’ and jobbers’ stocks are small and demand from other lines than the building industry is greater than at any previous time. China and pottery plants reported a falling-off in sales in early November. Machine tool orders received in October from domestic sources were not far from the high point of the year and total orders were up 15 per cent from September. Foreign purchases represented 23 per cent of the monthly volume, according to the National Machine Tool Builders’ Associa tiony compared with 30 per cent in July and September and 24 per cent in August. The gain in total orders over last October was more than 30 per cent and they were reported well distributed. Foundry equipment orders re ceived in October also were up sharply from September and last year and shipments were in even larger volume. Many plants, long idle, have been or are being reconditioned 5 and obsolete equipment is being replaced as demand in creases. Small tool sales held up better than seasonally in early November and in October sizable gains wTere reported over last year in sales, operations, employment, and wages. Inventories are small. In the auto parts industry operations in late October and the first half of November were at unusually high levels as assembly lines were building up large supplies of parts. Some increase in employment was reported in October, but larger gains in payrolls were evident because of the in crease in the number of hours worked and wage rates. Re cently announced wage increases, bonuses, and dividends point to the improved situation in the automobile parts field. Hardware makers continue to enjoy an active demand for goods, some of which is felt to be speculative, although wholesale jobbers have reported an unusual volume of or ders. Electrical goods sales in October were approximate ly 30 per cent larger than a year ago and about the same increase was reported for the first ten months. Operations in the paper industry averaged 85 to 90 per cent of capacity in October, compared with 79 per cent a year ago, and while there generally is a falling-off at this season, demand so far has held up very well. Compe tition of cheaper grades is affecting high-priced lines and although prices are firm, few increases have been made to cover higher costs. Inventories of fine papers are large seasonally and boxboard stocks also are up. Paint production and sales have fluctuated seasonally, but continue much above last year. In the first nine months dollar sales for the industry were 13.5 per cent larger than in 1935 and September sales were up 17 per cent. Raw material prices have advanced and inventories are being accumulated. While shoe production at fourth district factories de clined seasonally from September to October, output in the month exceeded any corresponding period on record and was 20 per cent in excess of 1935. So far this year production has been 5.7 per cent greater than in the first ten months of 1935. W ork is just starting on spring lines and orders so far have been received in very good vol ume. Hide and leather prices are firm, but slightly under last year. Retail shoe sales at fourth district reporting stores were about 25 per cent larger in October than a year previous. TRADE Retail An unusually sharp increase in retail sales was experienced in October by department stores in leading cities of the fourth district and even after allowance is made for the fact that daily sales generally are larger in October than in September, the index was up over six points to 92 per cent of the 1923-25 average. This was higher than since October 1930 and the gain in dollar volume over last year was 22.5 per cent. In the first ten months of 1936 sales volume was 13.8 per cent larger than in the corresponding period of 1935. Increases in October sales in the various cities of the district ranged from nearly 17 to 30 per cent, with Youngs town stores showing the largest gain and Toledo and Cin cinnati reporting stores the smallest. Stores in the group of smaller cities experienced an average increase THE 6 MONTHLY BUSINESS REVIEW of nearly 29 per cent in October sales. All major depart ments except silks and velvets, art needlework, and sport goods showed increases in October, compared with a year ago, housefurnishings and apparel sales showing unusually large gains. Credit sales represented 60 per cent of total store sales in October, about the same as in September and also a year ago. Installment sales, in relation to total sales, were up from last year and represented 8.9 per cent of total dollar volume. A general improvement in collections was reported in October, compared with September and also a year ago; collections in October on regular 30-day accounts receiv able at the end of September were 47.8 per cent, com pared with 41 per cent in the preceding month and 44 per cent last year. It was the highest collection figure report ed in at least nine years. Collections in October on in stallment accounts receivable also improved seasonally and were slightly better than a year ago. The dollar value of department store stocks increased five per cent in October, somewhat more than seasonal and the index, although only 67 per cent of the 1923-25 aver age, was higher than since November 1931. Compared with a year ago stocks were up 10.4 per cent as of October 31. In relation to current sales, the increase in inventories has been moderate. Stock turnover in October was 39 per cent, or at the rate of 4.8 times a year compared with 36 per cent in October last year. In the first ten months the stock turnover was 3.17 times compared with 2.94 in the same period of 1935. Wholesale All reporting wholesale lines in the fourth district except groceries experi enced larger gains in sales in October over last year than the average increase reported in the first nine months compared with 1935, and while a season al expansion is generally experienced in October, the rise in the latest month was larger than usual. Buying on the part of retailers was reported in considerable volume in preparation for what is expected in trade circles to be an active holiday season. Wholesale hardware firms reported October sales 32 per cent larger than a year a g o ; dry goods sales were up 14.5 per cent, and drug sales nearly 20 per cent. Wholesale grocery sales in October were 2.7 per cent larger than a year ago, but were smaller than in Sep tember and the increase for the first ten months was 6.2 per cent. CONSTRUCTION Total contracts awarded in the fourth district in O cto ber were valued at $22,495,000. This was an increase of 20 per cent over September, but a reduction of 20 per cent from the high figure of October 1935. A year ago large contracts were awarded for two Federal slum-clearance projects valued in excess of $5,000,000 and highway construction contracts awarded last October in this section were valued at about $12,000,000. Nonresidential building contracts awarded in October were larger than in the previous month or October 1935. Increased factory construction by more than 100 per cent from September to October and by about five times over October 1935 was responsible for the bulk of the improve ment, although contracts for commercial buildings were larger than in September, or October last year. Institu tional and recreational building contracts awarded were smaller than a year ago. In the residential field there generally is a rather sharp decline from September to October so the 5.7 per cent drop in contracts awarded for this type of work was not unusual. Valued at $7,583,000, awards were 25 per cent under the $10,095,000 last October, but nearly half of this latter amount represented two contracts for slum-clearance apart ments. In the latest month contracts awarded for residen tial dwellings for owner occupation were valued at ap proximately $5,000,000 in this district, an increase of 80 per cent over last year. Total residential contracts award ed in the first ten months of 1936 were valued at $62,000,000, an increase of 53 per cent over 1935. Heavy public works started in October in this section showed a larger dollar volume than in September, but were about 40 per cent under last year. Public utility construc tion continued in limited volume, although a gain in O cto ber was evident both over September and a year ago. The decline in total contracts awarded in October, as compared with the abnormally large volume last year, reduced the cumulative gains reported, but in the first ten months total building was still 40 per cent above the corresponding period of 1935. AGRICULTURE Estimated yields of late crops were raised generally by the November report of the Department of Agriculture, chiefly because mild weather this fall aided maturing and harvesting of the late-growing crops. The improvement in the entire country in October was about two per cent and States in the fourth district shared in the gains. Im proved pastures coupled with the fact that later grazing was possible because of the mild weather has conserved the short feed crops in some sections so that while the total supply is still somewhat below average, it is more than ten per cent larger than in the poor year 1934. In the fourth district rains have been plentiful this fall; in fact in some sections they have hampered corn husking and potato digging, but they have benefited plantings of winter wheat, which in this district are reported to be at a record high level. Also the crop condition is excellent in this section, but in some other parts of the country poor germination and growth was reported because of continued dry weather. Yield per acre of this year's principal crops was esti mated on November 1 to be 96 per cent of the ten-year average 1921-30 in Ohio, 98 per cent in Pennsylvania, 78 per cent in W est Virginia, and 76 per cent in Kentucky. The average for the entire country was 86.5 per cent. The total harvest in this section did not compare so favor ably with the average of past years because of the reduced acreage, but in contrast with other parts of the country most sections of the district, excluding Kentucky, fared reasonably well. Estimated potato production in the fourth district was increased ten per cent in October and it was only 15 per cent under the large crop of 1935. The increase raised this year's estimate above the ten-year 1926-35 average harvest. W ith the crop small in other parts of the coun try local potato raisers are benefiting from the higher price THE MONTHLY BUSINESS REVIEW this year’s crop is bringing. W et weather hampered dig ging in some counties and although the crop generally is of good quality, many tubers are irregular and cracked. Preliminary estimates of the corn crop in this district were increased 3.2 per cent in October, and the latest figure, 152,843,000 bushels, was 22 per cent below last year's crop, while the figure for the entire country was down 33 per cent. Estimated yield per acre was 33 bush els in Ohio, 41.5 in Pennsylvania, 23 in W est Virginia, and 16.5 in Kentucky. The national average is reported at 15.5 bushels compared with 24 bushels last year, which was slightly under the ten-year average. Husking in Ohio was delayed by rains and some concern over possible dam age to corn in shocks was reported. The tobacco-selling season in this district is due to open at Lexington on December 7 and considerable leaf is re ported ready to sell. Quality is better than anticipated in many instances, but the yield is light. The November report of 1936 tobacco production in this district showed an increase of 1.3 per cent over the preceding month, but the 80,698,000 pound figure was still 8.3 per cent under the small crop of 1935. Harvest of all types raised in Ohio was 21 per cent under last year and less than half as large as the average crop in the five years 1928-32. In Kentucky the decline from 1935 was three per cent and from the five-year average it was 40 per cent. Burley tobacco production also was 40 per cent less than the average crop of 1928-32. Cigar type tobacco production in each of the past four years has been less than annual consumption and manufacturers’ stocks have been reduced about 100,000,000 pounds in the period. Judging by prices received on other grades of tobacco, most growers in this section are expecting higher prices for this year’s small crop. Wholesale and Retail Trade (1936 compared with 1935) DEPARTMENT STORES (52) Akron....................................................... Cincinnati............................................... Cleveland................................................ Columbus................................................ Pittsburgh............................................... Toledo...................................................... Wheeling................................................. Youngstown........................................... Other Cities........................................... District.................................................... W EARING APPAREL ( 13) Cincinnati............................................... Cleveland................................................ Pittsburgh.............................................. Other Cities............................................ District.................................................... FURNITURE (42) Cincinnati............................................... Cleveland................................................ Columbus................................................ Dayton.................................................... Toledo...................................................... Other Cities........................................... District.................................................... CHAIN STORES* Drugs— District (4)............................. Groceries— District (5 )........................ WHOLESALE GROCERIES ( 30) Akron....................................................... Cleveland................................................ Erie.......................................................... Pittsburgh............................................... Toledo..................................................... Other Cities........................................... District.................................................... WHOLESALE DRY GOODS (10) . . . . WHOLESALE DRUGS (11) .................. WHOLESALE HARDW ARE (13) . . . *Per individual unit operated. Percentage Increase or decrease STOCKS SALES SALES October First 10 October 1936 1936 months + 2 4 .6 + 1 6 .6 + 2 2 .3 + 1 8 .4 + 2 5 .8 + 1 6 .4 + 1 8 .4 + 3 0 .2 + 2 8 .8 + 2 2 .5 + 9.3 + 1 0 .6 + 1 4 .5 + 1 3 .0 + 1 5 .7 + 1 1 .1 + 1 4 .4 + 1 9 .9 + 1 6 .7 + 1 3 .8 + 2 1 .7 + 1 2 .3 + 1 1 .9 + 5.4 + 8.5 + 5.8 + 8.7 + 9.7 + 1 0 .3 + 1 0 .4 + 1 0 .0 + 2 6 .1 + 1 7 .7 + 1 9 .0 + 1 8 .2 + 0.5 + 1 1 .4 + 8.5 + 1 1 .2 + 7.6 + 3.9 + 1 1 .5 + 1 7 .5 + 3.7 + 8.8 + 18.3 + 3 4 .2 + 2 3 .3 + 4 4 .8 + 3 7 .2 + 2 7 .5 + 3 1 .8 + 2 9 .3 + 2 8 .4 + 2 3 .3 + 3 0 .9 + 3 2 .5 + 3 5 .7 + 2 9 .6 + 1 3 .7 + 9 .8 + 1 5 .6 + 2.9 + 4.3 + 7.2 + 3.8 — 7.8 — 4 .0 + 3.1 + 2.7 + 1 4 .1 + 1 9 .8 + 3 1 .9 + 5.6 + 2.5 + 6.2 + 1.5 + 3.2 + 10.1 + 6 .2 + 1 1 .9 + 1 2 .8 + 1 7 .1 7 Fourth District Business Statistics (000 omitted) % change Fourth District Unless October % change Jan.-Oct. Otherwise Specified 1936 from 1935 from 1935 1936 Bank Debits— 24 cities................. 32,547,000 + 2 2 .4 + 17.6 322,434,000 Savings Deposits— End of month: 40 banks, O. and W. Pa..............£ 725,113 + 4 .2 Life Insurance Sales: Ohio and Penna............................ 3 75,097 — 2.9 735,268 — 6.5 Retail Sales: Dept. Stores— 52 firms................3 23.677 + 2 2 .5 + 1 3 .8 180,868 Wearing Apparel— 13 firms....... 3 1,188 + 1 8 .2 8,326 + 7.6 Furniture— 42 firms..................... 3 + 2 9 .6 1,087 + 3 1 .8 9,587 Wholesale Sales: Drugs— 11 firms............................3 + 1 2 .8 14,508 1,665 + 1 9 .8 + 1 1 .9 Dry Goods— 10 firms..................3 1,702 + 14.1 12,499 41,127 + 6 .2 Groceries— 30 firms......................3 4,555 + 2.7 Hardware— 13 firms.....................3 13,574 + 1 0 .5 2,010 + 3 1 .9 Building Contracts— Total.......... 3 205,426 + 4 0 .3 22,495 — 19.0 7,583 — 24.9 62,191 + 5 3 .1 — Residential.3 Commercial Failures— Liabilities 3 9,265 — 30.1 639 — 53.9 — 24.1 “ _ “ Number......... 5772 45 2 — 42.3 Production: + 4 5 .9 2,992 + 5 1 .3 24,608 Pig Iron— U. S.......................tons + 4 0 .3 Steel Ingot— U. S.................tons 38,150 4,545 + 4 4 .6 + 1 3 .1 Auto-Passenger Car— U. S.......... 190,6882 — 10.6 2,908,5882 652,3362 + 1 3 .4 “ Trucks— U. S...................... 33,9402 — 42.2 Bituminous Coal, O., W. Pa., E. Ky. .................................... tons 136,398 + 15.9 17,703 + 26.6 Cement— O., W. Pa., W. Va. bbls. + 3 9 .5 8,670 1,306 + 8 1 .1 Elec. Power, O., Pa., Ky., Thous. + 1 4 .3 12,970* 1,513s + 1 7 .3 K. W. H........................................ + 3.7 19,63H Petroleum— O., Pa., Ky........ bbls. 2,3093 + 1 3 .2 s 5 + 5.7 + 1 9 .8 Shoes .................................... pairs 42,6854 + 1 4 .5 Tires, U. S....................... casings 4,98is + 3 1 .5 Bituminous Coal Shipments: + 2 7 .3 39,274 L. E. Ports..............................tons 6,545 + 7 3 .0 Iron Ore Receipts: + 5 3 .6 L. E. Ports........................... tons 28,298 5,388 + 7 0 .4 1 not available 4 Jan.-Sept. 2 actual number 3 confidential 3 September Debits to Individual Accounts Akron.............. Canton.......... . Cincinnati. . . , Erie................ . Franklin.......... Greensburg. . . Homestead.. ., Middletown. . . Oil City.......... Pittsburgh. . . . Steubenville... Youngstown. . 4 weeks ended Nov. 18, 1936 3 59,514 9,135 33,294 347,843 542,148 169,158 62,784 27,978 3,246 6,305 10,737 2,655 18,097 11,825 3,996 8,255 9,702 681,464 15,211 9,578 121,608 9,274 32,506 46,693 7,397 32,250,403 % change from 1935 + 1 4 .5 + 2 1 .4 — 4 .0 + 2 0 .3 + 1 4 .1 + 3 2 .6 + 4 0 .0 + 3 1 .0 + 2 2 .4 + 1 1 .7 + 2 6 .8 + 2 1 .2 + 13.9 + 3 3 .0 + 3 2 .1 + 11.0 + 2 0 .6 + 1 7 .5 + 16.5 + 4 5 .9 + 2 5 .5 + 2 7 .6 + 1 4 .3 + 3 0 .5 + 1 9 .7 + 1 9 .2 Year to date Year to date Jan. 1, 1936 Jan. 2, 1935 to to Nov. 18,1936 Nov. 20,1935 3 636,704 3 531,813 91,743 75,578 357,335 312,010 3,465,333 2,951,960 4,851,557 5,891,619 1,620,249 1,834,138 662,684 515,260 224,812 275,611 36,079 29,778 70,931 56,434 92,454 116,951 28,133 22,912 200,603 197,949 121,291 95,506 35,119 43,461 78,174 95,754 105,471 99,168 6,550,803 7,363,251 167,017 147,763 91,089 71,993 1,242,586 969,189 88,772 71,245 337,929 299,854 480,986 399,945 68,257 77,874 323,880,691 320,366,43 6 % change from 1935 + 19.7 + 2 1 .4 + 1 4 .5 + 1 7 .4 + 2 1 .4 + 1 3 .2 + 2 8 .6 + 2 2 .6 + 2 1 .2 + 2 5 .7 + 2 6 .5 + 2 2 .8 — 1.3 + 2 7 .0 + 2 3 .8 + 2 2 .5 + 1 3 .2 + 1 2 .4 + 1 3 .0 + 2 6 .5 + 2 8 .2 + 2 4 .6 + 1 2 .7 + 2 0 .3 + 14.1 + 1 7 .3 Fourth District Business Indexes (1923-25 = 100) + 1 4 .5 + 1 0 .7 Bank Debits (24 cities)........................................ Commercial Failures (Number)........................ “ “ (Liabilities)..................... Sales— Life Insurance (O. & Pa.)...................... “ Department Stores (50 firms)............... “ — Wholesale Drugs (10 firms)................. “ — “ Dry Goods (10 firms)......... “ “ Groceries (30 firms)........... “ “ Hardware (13 firms)........... “ “ All (63 firms)....................... “ Chain Drugs (4 firms)**........................ Building Contracts (Total). ................................ “ “ (Residential)....................... Production— Coal (O., W. Pa., E. K y .)........... Cement (O., W. Pa., E. K y.). . . . “ Elec. Power (O., Pa., K y.)*. . .. “ Petroleum (O., Pa., K y .)*........... “ Shoes................................................. ♦September. **Per individual unit operated . Oct. 1936 94 31 15 90 98 113 69 84 106 89 98 47 44 109 98 180 125 118 Oct. 1935 77 53 31 92 79 94 61 82 80 79 86 58 59 77 74 154 110 98 Oct. 1934 64 43 25 90 72 85 50 74 69 70 74 22 14 68 59 132 106 74 Oct. 1933 56 65 58 87 68 77 46 59 59 59 68 31 11 54 31 132 102 93 Oct. 1932 56 160 145 84 62 73 40 53 48 52 68 21 9 68 88 114 108 76 THE 8 MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Board of Governors of the Federal Reserve System Index of physical volume of production, adjusted for seasonal variation, 1923-25= 100. By months, January 1929 to Octo ber 1936, the latest figure being 109, preliminary. 1929 1930 1931 1932 1933 1934 1935 1936 Indexes of value of sales, 1923-1925 aver age =100. By months, January 1929 to October 1936, the latest figure adjusted 90, unadjusted 99. Indexes compiled by the United States Bu reau of Labor Statistics, 1926=100. By months 1929 to 1931; by weeks 1932 to date. Latest figures are for week ending November 14. BILLIONS OFCOU.AR3 81LLIOXS OF 00U.ABS ME!vIBER BAN K RESERV E BALANC; e s e ;oTAV^ n fy F ife -EXCES:S' reserves ; -m i 1 . % R E S E ^ s jp \ f l l ■N H w J m m , Wednesday figures of total member bank reserve balances at Federal reserve banks, with estimates of required and excess re serves, January 6, 1932 to November 18, 1936. Volume of industrial production increased seasonally in October and there was a substantial rise in employment and payrolls. Prices of a number of indus trial raw materials and finished products have advanced. Production and Employment In October the Board’s seasonally adjusted index of industrial production was at 109 per cent of the 1923-1925 average, about the level of the three pre ceding months. Steel production was in larger volume than in any other month since 1929, and the rate of activity was sustained in the first three weeks of November. Output of automobiles rose sharply from September to October. The increase in this period was less than a year ago, reflecting the fact that this year the date of the shift to production of new models was less uniform among the leading producers, but in the first three weeks of November production increased further and was larger than last year. Activity at textile mills, which usually increases in October, declined slightly from the high level of September. In the meatpacking industry output showed a further increase. Coal production increased seasonally, and production of crude petroleum continued at recent high levels. Factory employment increased by more than the usual seasonal amount be tween the middle of September and the middle of October. Increases in employ ment w'ere general among the durable goods industries, with the largest expan sion reported at factories producing automobiles and machinery, while changes in employment in the nondurable goods industries were largely of a seasonal character. Factory payrolls rose by considerably more than the usual season al amount. Value of construction contracts awarded, as reported by the F. W . Dodge Corporation, was slightly smaller in October than in September, with a decline in publicly-owned projects partly offset in the total by an increase in awards for private non-residential construction. Distribution Sales by department stores and by mail order houses serving rural areas increased from September to October by a larger amount than is usual at this season. Variety store sales showed a less than seasonal rise. Freight-car load ings increased further in October, reflecting chiefly a larger volume of ship ments of miscellaneous freight and of coal. Commodity Prices The general level of wholesale commodity prices advanced somewhat dur ing the first three weeks of November, following two and a half months of little change. Since the middle of October prices of a number of industrial raw materials, particularly nonferrous metals, hides, rubber, silk, and wool, have shown a considerable rise and there have also been substantial increases in the prices of some finished products, including automobile tires, glass, woolen goods, and cotton goods. Bank Credit Member bank reserves increased in the four weeks ended November 18, chiefly as the result of transfers of gold to the United States. On that date member bank reserves were $2,270,000,000 larger than legal requirements, the highest level since the increase in reserve requirements which became effective in the middle of August. Adjusted demand deposits at weekly reporting member banks in leading cities have continued to increase, and on November 18 amounted to about $15,400,000,000. Since the end of last May these deposits have increased by over $800,000,000, reflecting a rise in deposits outside New Y ork City. Time de posits at reporting banks have remained at about the $5,000,000,000 level. Holdings of United States Government obligations at reporting banks have recently declined somewhat further. Since the end of June the decline has amounted to about $300,000,000 and has been at New Y ork City, with little change elsewhere. Holdings of other securities have declined in recent weeks, reflecting chiefly a reduction in the amount held by New Y ork City banks. Loans to customers have shown some further increase.
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