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Assistant Federal Reserve Agent MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland VoL12 Cleveland, Ohio, September 1, 1930 The level of general business in the Fourth District as a whole declined sharply in July, partly as a result of the shut-down in the automobile industry, and the un favorable drought situation which developed in agricul tural localities, particularly in the central and southern parts of the District. The drop, although partly sea sonal in character, was much more pronounced than in other recent years. Some improvement in several lines was recorded in the tart part of August as compared with the July rates, but it Is too early to state whether this change was more than seasonal. The worst drought in this section in 30 years was re lieved by light rains in early August, although the situa tion In many counties is still very unfavorable. While the effect of this condition so far on business has been mostly psychological and probably somewhat over-exaggerated, it no doubt has affected buying power of some farm communities. Employment in July declined about four per cent from June and compared with an average drop of one per cent in the past five years. Payrolls showed a greater decline, indicating that many shops reduced the number of hours worked rather than the number of men em ployed. An improvement occurred in August, however, with the resumption of operations at many plants. According to the Bureau of Labor, wholesale prices fell 2.8 per cent in July, with food prices down 4.5 per cent from one month ago. These declines continued in early August, but were somewhat modified by the Increase in prices of some farm products. Department stores, feeling both the effect of reduced employment, payrolls and commodity prices, reported dol lar sales 12.7 per cent below July, 192$, and sales for the t o d seven months 7.7 per cent under the same period last year. Installment sales at these stores have shown pro portionately larger declines. The declines from 1929 are a result of a combination of both factors, but the amount each has contributed to the falling-off can only be roughly estimated. Although money rates are generally low, real estate operations continue in small volume and building, partic ularly residential, still shows a downward trend. The large amount of public construction work has maintained No. 9 total building operations at a level eleven per cent below last year. Credit conditions, both at member banks and the re serve bank, continue easy. Demand for funds for com mercial purposes has not increased and collateral loans at reporting member banks have shown little change. In vestments and deposits, on the other hand, have increased. Demand for funds at the reserve bank declined, discounts on August 20 being the lowest since 1917. There was a greater than seasonal increase reported in July shoe factory operations in this District, and an improvement in tire sales. A greater number of inquiries for machines and machine tools was also reported. FINANCIAL. Other than a further reduction in money rates, con tinuing the downward trend which characterized the first seven months of this year, and an increase In deposits, little change in financial conditions in the Fourth Dis trict has occurred in the past month. Rates on prime commercial paper now range from 3% to 6 per cent in the larger banking centers as against 5*6 to 6 per cent last year. Collateral loan rates are 4% to 6 per cent. An advance in the New York call money rate was reported in mid-August, but it has since declined to two per cent, the rate prevailing generally since June. These lower rates have had no particular effect on trade and Industry as yet, there being little demand for funds for any purpose. Collateral loans of reporting member banks in leading cities showed no change from last month and are In about the same volume as at the beginning o f the year and in August, 1929. "A ll other” loans declined further and on August 20, at $757,000,000, compared with $798,000,000 in January and $831,000,000 in August, 1929. In most past years these loans have increased In the spring, slackened in the summer months, and again increased In early fall, thus following to some extent the course of industrial activity, but so far this year only a downward trend has been shown. As has been pointed out before, banks have partly off-set this decrease in demand for funds by increasing their Invest ment holdings, which, on August 20 were $175,000,000 higher than in January and at record levels for all time. Deposits at reporting member banks showed some rather large fluctuations in the month ended August 20, but In the main continued the upward trend noticed since January. Demand deposits, after increasing sharply in 2 THE MONTHLY BUSINESS REVIEW the last week of July declined in the following week and on August 20 were slightly lower than on July 23. They are $78,000,000 higher than one year ago and about $140,000,000 higher than at the beginning of 1930. Time deposits continued the almost uninterrupted rise which started in January, part of which has been due to an ex pansion in savings deposits, but other forms of time de posits have accounted for most of the growth. Since Jan uary there has been an increase in this item of $90,000, 000 . This large increase in total deposits (about $225,000,000) coupled with the decreased demand for loans of all types, besides providing surplus funds for investment by member banks, has enabled them to improve further their reserve position and reduce their indebtedness at the Federal Reserve Bank of Cleveland to the lowest level since 1917. Reporting member banks in leading cities were borrowing only $4,223,000 on August 20 while loans to all member banks in the District on the same date were $13,796,000. One year ago bills discounted for all member banks totaled $73,090,000. The drop in dis counts in the past few weeks has been seasonal since the demand for funds from member banks in July and August in past years has usually lessened. In the latter part of August or early September an increase has been shown in this item in other years. BANKING OPERATIONS Federal Reserve Banks Federal Reserve Bank o f Cleveland Federal Reserve System (In Millions) (In Millions) Aug. 20. Aug. 21, July 23, Aug. 20, Aug. 21, July 23, 1930 1929 1930 1930 1929 1930 2,939 2,954 3,024 322 300 330 Gold Reserves ............. 986 196 191 17 73 Discounts ..................... 14 132 151 14 159 3 Acceptances —............. 15 602 149 576 55 29 U. S. Securities ......... 58 Total Bills and securi 965 1,283 925 87 105 ties ............................ 87 Federal Reserve notes 186 1,324 1,823 1,356 193 in circulation ......... 186 2,469 2,387 2,485 203 190 Total Deposits ......... 210 REPORTING MEMBER BANKS Fourth District United States (In Millions) (In Millions) Aug. 20, Aug. 21, July 28, Aug. 20, Aug. 21, July 23, 1930 1930 1930 1929 1929 1930 8,315 7,513 8,398 738 733 Loans on securities..... 738 8,480 9,432 8,454 772 831 757 All other ...................... 16,795 16,946 1,563 1,510 16,852 Total loans ...... ............ 1,495 6,248 774 6,340 5,488 637 777 Investments ................. 13,626 13,068 1,066 1,147 13,692 Demand deposits ......... 1.144 6,730 7,400 998 7,405 950 Time deposits ................ 1,015 The volume of reserve bank credit outstanding has been maintained in the past few months by increased hold ings of government securities and, in the past few weeks, of acceptances, but the total is nevertheless $18,000,000 under last year at this time. Federal reserve notes in circulation have shown very little change (other than seasonal) in the past three months and at $185,629,000 on August 20 compared with $192,943,000 last year. Reserve deposits have necessarily expanded because of the increase in deposits at member banks. Commercial failures showed an increase of 18 per cent in July compared with the same month last year, but in the first seven months of this year there have been only two per cent more failures than in the corresponding months of 1929. Liabilities of defaulting concerns have been somewhat larger than a year ago. MANTJFACTTJRING Iron, Complete dullness in both demand and production continued in the iron and steel industry in the Fourth District in the month ended August 15. The following week, how ever, seemed to show an improvement in sentiment and a gain was reported in steel operations, the first since the mid-year contractions. Rolling schedules in some plants, particularly at sheet mills have gained more than raw steel production. Unusual activity in pipe line construction for natural gas, gasoline and crude oil transportation from Okla homa and Texas to Ohio, Pennsylvania and Illinois brought heavy tonnages to pipe makers and this resulted in large orders for steel plates. Structural steel orders in August continued at a high rate, exceeding the aver age for the first seven months of this year, and gave the structural mills good backlogs. Expected recovery of the automotive industry, relied upon to provide a tonnage in bars, sheets and strip, been progressively delayed and, while some small lota have been booked, the main tonnage for new models is still in the future. Inasmuch as products made in the Fourth District consist largely of these lines, mills here have felt the deprivation severely. General consumers including small manufacturers, have taken less tonnage* Steel 3 THE MONTHLY BUSINESS REVIEW In the past month and local ingot production has shrunk steadily from about 60 per cent of capacity to slightly above 50 per cent. Prices fell some in the past month, but the rate of decline moderated as compared with preceding months of this year. Steel's composite price of 14 leading iron and steel products was $33 in mid-August compared with $33.17 in July and $36.54 in August, 1929. Steel scrap, prices of which are among the first to show a change, has developed considerable scarcity, especially in steel making grades, and dealers find it impossible to obtain tonnages at prices affording a profit on their contracts. An advance of 60 cents a ton on heavy melt ing steel resulted from a sale of 10,000 tons to a large Pittsburgh consumer. Prices are still sufficiently low, however, to cause some accumulation in anticipation of higher prices when the market starts fall activity. Comparison of current production statistics with those of one year ago places the iron and steel industry in a very unfavorable position because operations at this time last year were at record levels. There was not even the seasonal decline in 1929 which usually occurs in early summer. Pig iron production did not exhibit any marked decline until September and steel ingot output reached its peak in August after correcting for seasonal variations. This year, however, the July slump was more pro nounced than usual, partly because of the almost com plete shut-down in the automobile industry. July pig iron output was at a daily rate of 85,110 tons, a drop of 13 per cent from June and compared with 122,016 tons a day in July last year. Total output was the lowest for that month since 1924. Production in the first seven months of this year, at 20,902,000 tons, was only 680,000 tons below the same period of 1928. Steel ingot production fell 18 per cent in July to the lowest rate in six years. The daily rate was 112,823 tons, compared with 137,610 tons in June and 186,561 tons in July, 1929. Total output in the first seven months of 1930, 26,726,000 tons, compared with 28,605,000 tons in the same period of 1928 and 27,011,000 in 1927. Automobiles The situation in the automobile indus try in the first part of August was still unsatisfactory, although production schedules showed decided improvement from the low levels which were reported in July. The rate of opera tions in mid-August however, was slightly below the level prevailing prior to the July shut-downs. United States production in July totaled only 262,363 cars and trucks, and was smaller than in any previous month this year. It showed a drop of 48 per cent from July last year when production amounted to 500,840 units. In all but two of the past nine years there has been a falling-off in automobile production from June to July, but the average decline for this period in the years 192129 was only 6.6 per cent. This year the drop from June, when 335,447 cars were produced, was 22 per cent and probably was the most important reason for the sharp curtailment reported in manufacturing activity in this District in July. Although the industry as a whole so far this year has shown a drop in production of 33 per cent from the corresponding first seven months of 1929, the declines have not been distributed equally among the individual producers. Notwithstanding this fact earnings for ten companies, excluding Ford, for the first six months of 1930 totaled $122,113,000. While this was 44 per cent below the record figures reported by the same companies in the first half of 1929, only one of the ten showed a net loss in the first six months of this recession year, particularly for the autompbile producers. New passenger car sales as reflected in registration figures for the ten largest counties in the District showed a decided falling-off in July, but a similar condition was reported in other parts of the country. Drought condi tions in Agricultural sections, and the drop in opera tions at manufacturing centers seems to have affected sales. Recent price reductions initiated by several manu facturers have not stimulated buying to any great extent. New Passenger Car Registrations Ten Principal Counties July, 1930 Akron (S u m m it).... 674 365 Canton (S tark)......... Cincinnati (H am .). ■ 1,371 Cleveland (C u y .). . . 3,118 Columbus (Franklin) 791 Dayton ( M o n t , ) ... . 497 Pgh, Pa. (A llg h y )... 3,229 Toledo (L u cas)......... 538 Youngstown (M ah.). 412 Wheeling, W. V .(0 .) 180 T o ta l....................... 11,175 July, 1929 1,680 977 2,134 5,458 1,540 1,218 4,311 1,295 949 277 19,839 change from 1929 — 5 9 .9 — 6 2 .6 — 3 5.8 — 4 2 .9 — 4 8 .6 — 5 9.2 — 25.1 — 58.5 — 5 6 .6 — 35.0 — 4 3 .7 Jan.Jan.change July, July, from 1930 1929 1929 6,368 11,798 — 4 6 .0 3,899 7,084 — 4 5 .0 10,610 14,278 — 2 5.7 25 345 36,258 — 30.1 6,837 10,830 — 3 6.9 4,773 8,096 — 4 1 .0 24,259 26,468 — 8. 3 5,106 10,342 — 5 0.6 3,589 6,252 - 4 2 . 6 1,2401,606 — 2 2.8 92,026 133,012 — 30.8 Rubber, Tires A greater than seasonal improvement in tire sales in July as compared with June was reported by tire manufactur ers in this District. This upward trend continued in early August, but manufacturers are not yet certain whether this is a permanent change for the better or only a tem porary improvement due to previously withheld replace ment purchases. The larger July sales are quite significant when it is remembered that automobile production was very low in that month which reduced the demand for original equip ment tires perceptibly. Despite the fact that gasoline consumption figures indicate an increased use of motor vehicles, up until July of this year the replacement de mand for tires had been much below expectations. Ac cording to Tire Review, consumer sales totaled only 18,500,000 tires in the first six months as against 23,500,000 tires in the same period of 1929. Activity at tire plants in July reached the lowest level since 1924, with employment at 26 factories five per cent lower than in June and 26 per cent below July, 1929. Shut-downs at tire factories for inventory and at automo bile plants materially affected operations. Preliminary production figures of the United States Department of Commerce show that there were 2,360,000 casings (including solids) made in the month. This compared with 4,895,000 units produced in July last year. The decline for the first seven months of this year from the same period of 1929 was 30 per cent. The tire industry is in a much improved condition from one year ago. Inventories of finished goods have been reduced about 3,000,000 units and stocks in hands of 4 THE MONTHLY BUSINESS REVIEW dealers are reported to be smaller than in a period of normal business. Raw material prices have also fallen. Crude rubber has been showing a downward trend since 1925 and, at about 10 cents a pound in August, was at the lowest point on record. Raw cotton has declined, being quoted between 11 and 12 cents a pound in August, the lowest since 1921. As a result, manufacturers hare increased their holdings of raw materials. The situation on plantations, however, is anything but favorable. Restriction plans have not been particularly effective and stocks are still large. Imports of crude rub ber to the United States in July totaled 34,084 tons as against 44,252 tons in the same month last year. In the first seven months imports have amounted to 303,92& tons a decrease from the same period last year of 16 per cent. General showing of spring fabrics does not take place until early September. Shoes Based on reports from 26 establish ments in the Fourth District, the shoe industry in July was in a better posi tion than at any time so far this year. Production showed an increase from June of 27 per cent, most of which is seasonal. At the same time, however, output of all fac tories In the United States showed a slight decline o f 0.2 per cent. Compared with 1929, July shoe production was down 14 per cent, which is smaller than the decline reported for the earlier months of this year. Output in the first seven months of 1930 was 21 per cent below the same period one year ago. Lower finished goods prices, resulting from the de cline in raw material costs, have not caused forward buying to any extent, dealers report. Orders continue to be small and only for present demands. Stocks are stated to be smaller than in a period of normal business activity. The hide and leather markets are still weak with little business reported. Hide prices averaged 13.88 cents a pound in July as against 15.20 cents in June and were the lowest reported for any month since 1926. Further weakness was reported in early August. Other Manufacturing Clothing Employment in the clothing industry in July was at the lowest level since 1925, and in addition several plants were only operating part time, a fact not brought out by the em ployment figures. Manufacturers in all parts of the Dis trict were unable to report any definite improvement in the first half of August in either orders or inquiries, but on the whole seem to think that better conditions would prevail in the near future despite the unfavorable situaation in most agricultural communities which will no doubt affect clothing sales to some extent. This feeling is a result of the stock situation. Finished goods, both in the hands of manufacturers and retailers are reported smaller than average. Stocks have been allowed to de cline in many cases to a point where, as soon as there is an increase in demand, they will have to be replenished. Buying so far has been only for immediate and def inite demand and more particularly of goods in the lower price classifications. The unusually low cotton, wool and silk prices have not stimulated buying as might be expected. In fact, purchases have been retarded by the declines. Buyers defer ordering until absolutely neces sary when price* are falling. July sales of clothing and furnishings in over 70 retail stores were decidedly below the same month of last year so far as dollar volume is concerned. The declines are somewhat exaggerated, however, because of the different price level prevailing in the two periods. A slight increase in activity at knitting mills was re ported in early August, but this was entirely seasonal and did not equal the expansion at that time in former years. Production schedules of most manufacturing plants in the Fourth District have shown a downward trend for near ly a year, after allowing for seasonal fluctuations. The falling-off in July, however, was somewhat sharper than in previous months, based on employment figures of the Ohio State Bureau of Business Research. This index dropped four per cent in July in contrast with declines of three per cent in June and of one per cent or less In previous months of this year. The drop in July is more significant when compared with the average July de cline of only one per cent In the past five years. The contraction in July can be attributed almost en tirely to the automobile industry in which the shut-downs were longer and more complete than in other recent years. Parts and accessory, tool, glass, rubber, steel and many other manufacturing plants in this District were forced to cease operations or greatly reduce schedules because of this fact. It is the feeling in several branches of in dustry, however, that the low point was reached In July, and that August should show some improvement. So far, however, little evidence to substantiate this is yet avail able. Many plants resumed operations in August, but in most cases were only producing at very moderate rates, in several instances at no higher levels than before *the July shut-downs. The unfavorable agricultural situation while not yet actually affecting business, has further complicated matters because of its uncertainty. The stone, clay and glass industry showed a decided falling-off in July with little improvement in August These two months in past years have been the periods of lowest activity. Employment so far this year has av eraged about 15 per cent below the first seven months 6 THE MONTHLY BUSINESS REVIEW of 1929. Stocks are reported high. The paint industry is also down more than seasonally. Few advance or ders hare been received and stocks are quite large. Machinery manufacturers have noticed an increase in the number of inquiries which might indicate an improve ment in the offing. Hardware and automobile parts mak er# increased operations in August after the curtailment in July, but little real improvement has been shown. There is little indication of forward buying, and stocks of finished goods are reported to be low in most cases. Unusually low copper prices have not stimulated sales of electrical equipment and supplies to any extent. Tin plate mills and metal container concerns have been af fected by the unfavorable condition in the canning in dustry. Makers of stoves and furnaces showed an in crease in employment in July, but operations were still 16 per cent below last year. July employment in the paper and printing industry was only two per cent under July, 1929, but there was a greater drop in the number of hours worked. BUILDING Reports from lumber dealers in this District con firm the figures of the F. W. Dodge Corporation which showed that the construction industry experienced no im provement in July or the first half of August. Stocks of building supplies are stated to be lower than in a period of normal business and are smaller than they have been in a number of years. Lower prices in general have not stimulated forward buying to any extent. Building contracts awarded in the Fourth District in July totaled $48,128,000, a slight decline from June, but a drop of 20 per cent from July, 1929. Residential build ing again was the cause of the discrepancy, for, amount ing to only $9,506,000 in July, these contracts were at the lowest level for that month since 1921. They were 35 per cent below last year. Non-residential building has held up rather well so far this year, being only $7,000,000 smaller in the first seven months of this year than in 1929 which period ex ceeded 1928 in volume. The entire industry, however, has shown a downward trend since 1925, while residential building so far this year has been less than in any comparable period since 1921. BUILDING C O N TR A C TS - 4™ D ISTR IC T F IR S T seven I RESIDENTIAL CONTRACTS 400 300 200 100 1920 1023 Wholesale Trade Little change from the unfavorable conditions existing in the first half of 1929 was shown in the July reports from co operating wholesale concerns. Reduced sales were re ported generally, retailers showing no disposition to in crease their stocks. As compared with the same month last year, July sales in the five reporting lines showed the following declines: groceries, 11.1; drugs, 11.2; hard ware, 26.3; dry goods, 27.0; and shoes 49 per cent. Wholesale grocery firms reported larger stocks than last year. Accounts receivable were smaller in all lines, but drugs, and collections were down from 8 to 38 per cent from July, 1929. AGRICULTURE m o n ths J ALL OTHER CONTRACTS TRADE The volume of retail trade, as reflected by sales of reporting stores in the Fourth District, exhibited little change in July after allowance for seasonal variations was made. However, it continued to be affected by, among other things, the fall in commodity prices, the decline in employ ment and payrolls, and more recently the drought in cer tain sections. While the effect of the latter has not been so great as yet, the extent to which each factor has con tributed to the decline from last year can only be esti mated. Total sales of the three reporting lines all show large decreases from last year. Department store sales were down 12.7 per cent in July and 7.7 per cent in the first seven months of this year when compared with like periods of 1929. There was no change from June after allowing for seasonal variations. Furniture store sales have been very unfavorable, July sales were 43 per cent below the July, 1929, and in the seven months were down 28 per cent. Sales of furniture departments of depart ment stores were only off 24 per cent in July. Wearing apparel sales, both at apparel stores and in the depart ment stores, have shown large declines. Stocks are generally down, both as compared with a month ago and last year. Despite the smaller sales, ac counts receivable are larger than one year ago and com plaints regarding collections are being received. In July they were nine per cent smaller than in the same month of 1929 at the department stores. Installment sales have shown a downward tendency in the past few months and are smaller proportionately than total sales. In the individual departments some rather wide varia tions were shown in July, the only increases being in the glove, sports wear and men’s furnishing departments. Retail Trade 1930 Almost unprecedented drought conditions existing throughout this District, particularly the southern part, were relieved by light general rains in several localities about the middle of August, but in some sections they were of little benefit because the crops were beyond saving. The whole District has suffered, with much damage being done to corn, tobacco, pasture, and lesser crops, includ ing canning products. The wide-spread drying of pas tures has reduced milk production, resulting in an ad vance in the price of dairy products, and made necessary the feeding of crops stored for winter use. At the same time, according to the U. S. Department of Agriculture, “ Market conditions and prices have remained very dis THE MONTHLY BUSINESS REVIEW 6 couraging to growers of wheat and cotton, in particular, and to many vegetable and livestock producers.” The extent of the drought damage is partly shown by the fact that special freight rate reductions of 50 per cent on shipments of livestock out of the county and grain shipments into distressed areas have so far been granted to 88 of the 169 counties included in the Fourth District. The following table shows the effect of weather con ditions in July on principal crops of the Fourth District and the United States as compiled from estimates of the United States Department of Agricultre, based on con dition reports of July 1 and August 1. Principal Crops— 1930 (000 omitted) Fourth District United States Aug. 1 July 1 Aug. 1 July 1 Corn, bu................. 121,828 177,381 2,211,823 2,802,442 Total wheat, bu..... 35,868 31,074 820,613 807,265 71,329 70,925 1,316,369 1,329,407 Oats, bu................. Tame Hay, tons .... 4,594 4,415 83,460 85,431 Tobacco, lbs........... 130,100 152,230 1,474,758 1,597,670 White Potatoes, bu. 15,556 18,448 372,557 398,419 Marked declines occurred in estimates of all growing crops of the District, corn falling 31 per cent, tobacco 15 per cent and potatoes 16 per cent in July. Estimated wheat production increased about 4,800,000 bushels dur ing the month, but was still seven per cent below the harvest of 1929. The hay and oat estimates were re vised upward also, but the former crop was only about half as large as in 1929, while the latter showed 11 per cent increase from one year ago. These latter three, be ing early-maturing crops, had completed their growth be fore the drought did much damage. Corn. The corn crop in this territory was quite a bit under average in 1929 and did not make a very prom ising start this season, although the acreage planted was larger than one year ago. On July 1, however, the crop was estimated to be only two per cent below average. The extremely dry, hot weather during that month and the first part of August caused almost unprecedented dam age and, although the latest figures available are only as of August 1, up to that time the crop prospects had been reduced 31 per cent and were the lowest in 30 years in Ohio and 20 years in Pennsylvania. In Ohio, the crop averaged only 53 per cent of nor mal on August 1 with total production estimated at about 94,000,000 bushels. This is 27 per cent less than last year and 29 per cent smaller than the five-year average 1924-28. In the past 30 years the corn crop of this state has averaged 135,000,000 with only four years show ing less than 100,000,000 bushels. The sections hardest hit are in the central, eastern and southern parts of the state, where, in many cases, the crop has already been cut for silage on account of its poor stand and dryness. The crop is evnn worse in Kentucky and West Virginia where it averagod only 46 and 40 per cent of normal on August 1. In Pennsylvania a somewhat better condition prevailed with the crop averaging 67 per cent of normal, which however, was about 17 per cent below the average of the ten years 1919-28. Potatoes. The potato crop is much poorer than one month ago and the situation throughout Fourth District is very unfavorable. Recent rains have not been heavy enough to help materially; many fields are badly burned, some blight has appeared and insects are quite plentiful. Where proper spraying has been done, potatoes have with stood the drought quite well. There was a fairly good yield of early potatoes, but what the late crop will do is dependent upon the weather. Prospects, at best, are for only a short crop of small potatoes. Wheat and Oats. Both wheat and oats have turned out to be better than was expected earlier in the season. The wheat crop, while smaller than in 1929 in this Dis trict, is of exceptionally high quality. Oats had largely matured before the drought reached a serious stage and were harvested under very favorable conditions. The southern part of the District which is not the heavy pro ducing section was most affected. Fruit. While the entire country shows better fruit prospects than in 1929, although about ten per cent below the average of the past ten years, conditions in the Fourth District declined still further in July, and on August 1 a far below average fruit crop was forecast. Apples, peaches and pears are extremely poor, although grapes may produce an average crop. Pasture, Livestock. Pastures were in a deplorable con dition, in some cases entirely gone, and water for stock was short in many localities. In Ohio pastures aver aged only 30 per cent of normal on August 1 compared, with an average of 83 per cent for that date in past years. The hay crop was unusually small this year, and coupled with the fact that it has already been necessary to feed stock on food stored for winter use, makes the livestock food outlook none too favorable. The number of catle on feed for market as of August 1 was about the same as in 1929, but reflecting poorer feed conditions, cattle weighed less than they did last year. Dairying has also been affected; the milk supply has been reduced, resulting in an advance in milk prices. Tobacco. Early this year the outlook for the burley tobacco crop was quite discouraging, in the face of al ready burdensome stocks of old leaf in hands of dealers, acreage was increased seven per cent and it was then expected that the crop would exceed 350,000,000 pounds But the most prolonged drought in the history of tobacco raising occurred in June, July and early August, with the result that, based on the August 1 condition report of the Department of Agriculture, the burley crop was estimated at 293,000,000 as against 334,619,000 pounds produced in 1929, with prospects that it would be further reduced because of the dry weather in the first half o f August. This reduction has, in part at least, corrected the condi tion of overproduction that appeared likely a few months ago. Although stocks of dealers are larger than in 1929 it is unlikely that this year’s total supply (production and stocks) will exceed that of last year. Agronomists of the University of Kentucky estimated the condition of the burley crop at 45 per cent of nor mal on August 10, indicating about half an average crop after allowing for the increased acreage. Favorable weather may raise this figure, but up to August 15, only light showers had occurred. Heavy deterioration also was reported in Ohio and West Virginia fields in July and early August. 7 THE MONTHLY BUSINESS REVIEW Fourth District Business Indexes Fourth DistrictBusiness Statistics (OOO omitted) ^ change from 1929 Jan.July, 1930 July, Fourth District Unleg* 1930 Otherwise Specified Bank Debits— 24 cities................... $ 3,294,000 — 14.8 22,620,000 Savings Deposits— end of month: Ohio— 36 bank*.............................,3 770,034 + 0 .7 770,2151 Western Pa.— 25 banks.................3 279,063 + 1.0 276,5341 + .0 .8 1,046,7491 Total— 61 banks............................. 3 1,049,097 Postal Receipts— 9 cities................ $ 2,684 — 8 .4 21,542 Life Insurance Sales: Ohio and P a .....................................$ 112,080 + 0 .1 865,570 Retail Sales: Department Stores— 57 firms___ 3 17,694 — 12.7 155,799 Wearing Apparel Stores— 16 firm* 3 976 — 16.9 10,019 Furniture— 50 firms.......................3 560 — *2 .9 5,688 Wholesale Sales: Drugs— 13 firms..............................3 1,511 — 11.2 11,293 D ry Good*— 11 firms....................3 1,142 — 2 7.0 10,885 Grocery— 41 firms.......................... 3 5,783 — 11.1 40,367 Hardware— 17 firms.......................3 1,665 — 26.3 12,615 Building Permit*— 27 cities........... 3 9,890 — 19.8 95,517 Building Contracts— Residential. .3 9,506 — 35.3 71,667 Building Contracts— Total, All Classes................................. $ 48,128 — 19.7 326,365 Commercial Failures— Liabilities..3 2,426 + 2 1 .5 26,237 Commercial Failures— N u m b er... 168* + 1 7 .5 1,1902 Production: Pig Iron, U. S........................... Tons 2,640 — 30.2 20,902 Steel Ingots, U. S..................... Tons 2,933 — 3 9.4 26,726 Automobiles— Pass. Cars, U. S. 222,459* — 4 7.6 2,117,465* Automobiles— Trucks, U. S.......... 39,663* — 4 7 .0 359,684* Bituminous C oal..................... Tons 14,928 — 14.2 108,927 Cement— 0 ., Wn. Pa., W. Va. Bbls. 1,973 — 7 .8 10,060 Elec. Power— O., Pa., Ky. k.w.h. 1,125* — 6 .9 7,3 73 * Petroleum— O., Pa., K y ........ Bbl*. 2,290* + 1 0 .5 14,434* Shoes .................................... Pairs 5 — 13.9 5 Tirea, U. S........................... Casings 2,360* — 51.8 26,772 Bituminous Coal Shipments: J U k e Erie Ports....................... Tons 5,762 + 3 .6 19,753 Iron Ore Receipts: Lake Erie Ports....................... T ons 6,346 — 15.5 16,098 ^Monthly Average *Jan.-June •Actual Number C on fid en tia l •June « Preliminary (1923-1925 = 10 0 ) % change from 1929 10.0 — — 0.3 0.3 0.3 0.4 4.8 7.7 8.7 28.4 9.4 16.2 3.8 16.2 24.9 32.0 — 11.1 — — — — + — — — — — — — — + 14.5 + 2.2 17.8 20.9 33.6 31.7 7.5 17.3 + 0.8 18.5 20.8 30.4 3.1 28 3 — — — — — + + — — + — . Wholesale and Retail Trade (1930 compared with 1929) D EPAR TM ENT STORES (57) Akron........................................................... Cincinnati................................................... Cleveland..................................................... Columbus..................................... .............. Dayton......................................................... Pittsburgh................................................... Toledo.......................................................... Wheeling...................................................... Other Cities................................................ Diatrict......................................................... Percentage Increase or Decrease C OLLE C TIO N S SALES SALES First JulyJuly7 Mos. July Ju y — 17.9 — 19.5 — 26.1 — 3.3 — 3 .6 — 0 .9 — 17.4 — 8.8 — 4 .8 — 1.6 — 1.5 — 2.6 — 18.0 — 9 .0 — 9 .8 — 6.5 — 5 .0 — 28.5 — 1 5 .6 — ' 3.7 — 9 .7 — 12.5 — 16.7 — 12.4 — — 7 .7 — 12.7 — 8.7 — 14.4 — 26.5 — 9 .2 — 16.9 — — 6.8 — 8 .7 9 .6 0 .7 4 .5 4 .5 FURNITURE (SO) Ciacmnati................................................... Cleveland.................................................... Columbus.................................................... Dajrton......................................................... Toledo.......................................................... Other Cities................................................ District........................................................ — 34.1 — 41.8 — 29.6 — 39.4 — 63.3 — 43.0 — 42.8 — 2 3.9 — 23.7 — 23.7 — 22.0 —-46.8 — 31.1 — 28.4 -2 7 .5 -2 6 .7 -2 1 .3 -2 2 .4 -4 3 .9 -3 3 .1 -2 8 .7 CHAIN STORE* Drug*— District (4 ).................................. Groceries— District (6 )............................ — 3. 7 — 8. 4 — Debits to Individual Accounts 4 weeks % ending change Aug, 20, from 1929 1930 82,662 — 23.2 12.011 — 0 .7 C an ton............... 33,900 — 34.8 297,790 — 19.0 Cincinnati......... 660,949 — 24.7 Cleveland.......... 151,766 — 11.8 71,187 — 23.4 D a y to n .............. 35,022 — 13.3 4,148 — 3 0.9 17,139 — 15.4 Greensburg. . . . 11,463 — 32.9 H am ilton........... H om estead........ 4,122 — 10.9 Lexington.......... 16.531 — 16.0 10,201 — 2 7.6 5,239 — 14.4 Middletown, . . 8,674 — 2 8.0 Oil C ity ............. 14.283 — 22.5 Pittsburgh......... 855,122 — 23.5 Springfield......... 19,596 — 10.2 Steubenville 8,953 — 17.5 154,665 — 25.3 W arren............... — 27.4 38,330 — 8 .4 Youngstow n. . . 58,705 — 25.6 Zanesville.......... 8,281 — 3 0.4 T o ta l.............. . 2,590,642 — 22.5 - 2 4 .0 — 2 .8 — 18.9 — 7 .7 — 6 .6 — 5 .7 — 7 .0 — 11.1 — 27.0 — 11.2 — 26.3 - 4 9 .1 - 7 .0 12.2 + 0.6 2 .0 — 17.1 — 0.2 — 8.2 — 4.7 — 4.3 — 3.6 + 1.8 — 3.8 -1 6 .2 — 9.4 — 16.2 —27.2 — 10.9 — 19.8 — 7 .6 —20.8 — 38.3 Y ea r to Year to % change Date, 1930 Date, 1929 (Jan. 2from (D ec. 311929 Aug. 21) Aug. 20) 930,319 — 16. 3 778,236 96,704 + 96,919 .2 431,494 — 14. 5 368,724 3,454,820 — 13. 9 2,973,266 7,084,234 — 9. 3 6,424,295 1,457,480 — 2. 5 1,421,032 832,897 — 12. 6 727,856 309,779 310,551 — 0. 2 46,292 — 12. 3 40,598 162,989 — 11. 0 145,027 133,171 — 13. 3 115,438 35,002 37,558 — 6..8 230,521 — 12 1 202,731 121,503 — 18 .5 99,085 48,785 — 8 .8 44,477 87,139 100.328 — 13 .1 129,637 147,915 — 12 .4 7,801,689 8,508,105 — 8 .3 191,467 — 4 .9 182,156 81,255 96,653 — 15 .9 1,435,247 1,796,324 — 20 1 94,983 115,466 — 17..7 347,146 392,646 — 11. 6 615,196 — 11. 6 543,606 77,811 100,701 — 22. 7 27,444,119 — 10 .5 24,566,134 0 Building Operations 10.0 W EAR IN G APPAREL (16) Cincinnati................................................... Cleveland.................................................... Other Cities................................................ District........................................................ WHOLESALE GROCERIES (41) Akioa........................................................... Cincinnati.................................. ................ Cleveland..................................................... Erie............................................................... Pittsburgh................................................... Toledo.......................................................... Other Gties................. ............................. DUtrict........................................................ WHOLESALE DRY GOODS (1 1 )... WHOLESALE DRUGS ( 1 3 ) .............. WHOLESALE HAR D W AR E (1 7 )... WHOLESALE SHOES (5)................... ♦Sales per individual unit operated. C om m ercia l Failures ( N u m b e r ) .......................... “ '* (L ia b ilitie s )....................... P ostal R eceip ts (9 c it ie s ). ....................................... Sales— Life Insurance (Ohio^and P a .)................ “ — D epartm en t Stores (55 fir m s )................ “ — W holesale D rugs (13 *irm s)................... “ — “ D ry G o o d s (11 fir m s ). . . . “ — “ G roceries (41 fir m s )........... “ — “ H ardw are (15 fir m s ).......... “ — “ All (83 f ir m s )t ...................... “ — Chain D rugs (3 firm s)**......................... B u ilding C on tracts ( T o t a l ) ................................... “ ( R e s i d e n t i a l ) .. . . .............. P r o d u ctio n — C oal (O ., W n. Pa., E. K y . ) . . . . — C em ent (O ., W n. Pa., W . V a .). Elec. Pow er (O ., Pa., K y . ) * .......... Petroleum (O ., Pa., K y . ) * . . . . . . “ — S h o e s .................................................... *June * * P e r in divid u al u n it o p e ra te d , t ln c lu d e s 3 shoe firms. uly, July, July, July, 1930 1929 1928 1927 Jl & 6 122 143 121 121 118 115 98 90 96 94 55 45 74 165 73 103 113 102 105 104 134 116 116 117 134 80 78 78 77 70 109 103 103 107 96 49 68 68 64 61 97 89 90 93 88 71 97 97 96 98 93 88 88 90 78 91 98 106 87 91 121 142 126 118 101 109 85 102 55 U3 74 95 96 83 80 159 153 154 164 178 121 126 118 134 144 122 111 106 124 109 97 104 103 100 89 (Value of Permits) change from 1929 — 36.6 — 2 5.8 — 76.9 — 92.5 + 4 4 .2 — 81.1 Jan.July, 1930 7,456,919 218,376 170,717 1,131,627 27,598,157 15,072,650 Jan. 1July, 1929 12,891,934 456.607 753,753 2,630,575 18,738,150 24,455,750 change from 1929 — 4 2.2 — 5 2.2 — 7 7.4 — 5 7.0 + 4 7 .3 — 38.4 163,925 — 7 3.7 3,840 — 8 8.6 190,405 + 2 4 .5 37,500 — 69.1 100,126 — 7 0.6 76,970 — 8 1.0 101,830 — 13.2 418,850 — 2 .5 443,850 — 42.5 42,100 — 79.3 443,248 + 3 1 .5 385,030 + 4 2 .0 81,575 — 6 4 .7 43,885 — 71.2 14,997 — 58.3 87,050 + 9 3 .3 1,080,497 — 4 8 .9 28,985 — 94.1 373,402 — 67.5 66,156 — 7 5 .7 128.285 — 7 9.9 9,889,707 — 4 9 .8 2,091,645 766,406 1,100,894 404,300 1,102,647 915,521 788.913 2,941,175 3,497.200 454.550 3,776,345 3,040,397 959.026 611,021 458,212 206,925 11,051,951 512,965 6,556,060 590,433 2,042,436 95,517,468 1,758,370 1,579,731 1,602,065 807,150 1,178,424 1,532,181 1,070,950 3,822,450 6,796,450 854,375 3,780,365 4,612,010 1,197,145 1,582,671 344,415 426,285 20,305,325 1,386,806 8,049,989 1,138,445 3,378,792 127,131,163 + 1 9 .0 — 51.5 — 31.3 — 4 9.9 — 6 .4 —4 0 .2 — 26.3 — 23.1 —4 8 .5 — 4 6 .8 — 0 .1 — 34.1 July, A kron...................... A shtabula.............. B arberton.............. C anton................... Cincinnati............. Cleveland............... Cleve. Suburbs: Cleve. H g h ts.. . . East C leve........... E uclid................... Garfield H g h ts ... Lakew ood............ Parm a.................. R ocky R iv e r .,.. Shaker H g h t s .. . Columbus............... Covington, K y . . . D a y ton ................... Erie, P a .................. H am ilton............... Lexington, K y ___ L im a....................... N ew ark.................. Pittsburgh, Pa . . . Springfield............. T o le d o .................... Wheeling, W . V a. Youngstow n.......... T o ta l................... 1930 1,024,501 22,445 36,165 55,050 3,318,615 1,120.425 —19.9 — 6 1.4 + 3 3 .0 — 5 1 .S — 4 5 .6 — 6 3 .0 — 18.6 — 4 8 .1 — 3 9.6 —24.9 THE MONTHLY BUSINESS REVIEW 8 Summary of National Business Conditions By the Federal Reserve Board Business activity declined further during July and industrial produc tion and factory employment reached the lowest levels in recent years. Crops were damaged by prolonged drought. Wholesale prices declined further until early in August when agricultural prices increased. Money rates continued easy. Industrial Production and Employment Index number of production o f manufactures and minerals combined, adjusted fo r seasonal variations <1923-25 average = 100). Latest figure—July (preliminary), 92. PER CENT PER CEN T Index numbers o f factory employment and payrolls, without adjustment for seasonal vari ations (1923-25 average =: 100). Latest fig ures July, employment, 84.6, payrolls, 82.0. Output of factories and mines decreased by about six per cent during July according to the Board’s index of production, which makes allowance for seasonal fluctuations. A number of automobile factories were closed during part of the month and there was a substantial reduction in output of iron and steel and cotton textiles. Daily average production o f bituminous coal, lumber and shoes continued small. In the first half o f August, the output of Bteel showed a further slight decrease. Some auto mobile plants resumed operations on a limited scale. Factory employment and wage payments decreased further, and at the middle of July were at the lowest levels since 1922. The reduction in number of workers employed was largest at steel and automobile plants, car shops and foundries, hosiery and cotton mills, and clothing factories! There was a seasonal increase in employment in the canning, flour, and shoe industries. Working forces at bituminous coal mines were further reduced, and the Department of Agriculture reported an unusually small demand for farm labor. Building contracts awarded during July and the first half of August were in exceptionally small volume, according to reports by the F. W. Dodge Corporation. The reduction from June was primarily on account of smaller awards for public works and utility construction. Building in other line* continued relatively inactive. Feed crops and pasturage have been severely damaged by drought which was not broken until the middle of August. The August 1 crop report of the Department o f Agriculture indicated a corn crop of 2,212,000 bushelB, the smallest since 1901, and the smallest hay crop in ten years. Food crops were less severely affected, with wheat production estimated at $21,000,000 bushels— 15,000,000 bushels larger than last year. The cotton crop was estimated at 14,362,000 bales, or slightly less than a year ago. Distribution Freight-car loadings have been In smaller volume than at the same season of any other recent year. Department store sales declined in July to the lowest level since the summer of 1924. Prices Index of tha United State* Bureau o f Labor Statistics (1926 = 100, base adopted by Bu reau). Latest figure July, 84.0. The sharp downward movement of wholesale prices continued through July, and the Bureau of Labor Statistics index fell to a level 14 per cent below that of a year ago. The most pronounced decreases from June to July were in the prices of cattle, beef, wheat, cotton, silk and rubber, and nearly all commodities showed some decline. During the first half of August, prices of grains moved upward, reflecting the influence of the drought. There have also been recent increases in the prices of cattle hogs, silver, and silk, while the prices of cotton, copper, iron and steel* and rubber have declined further to the lowest levels in recent years. Bank Credit Monthly rates In the open market in New Vork; Commercial paper rata on 4 to 6 month paper. Acceptance rate on M-day bank ers* acceptances. Latest figures are averages o f first 20 days in August. Loans and investments of reporting member banks in leading cities decreased slightly between July 16 and August 13, largely as a result o f a decline of $48,000,000 in security loans. All other loans showed little change, while investments increased further. Reserve bank credit outstanding increased by about $60,000 000 dur ing the first three weeks of August, reflecting seasonal increase in the demand for currency and a decrease of about $25,000,000 in the country's gold stock, chiefly on account of gold exports to France. The increase In reserve bank credit was in the form of bankers* acceptances and U. S Government securities. Member bank borrowings showed little chanee Money rates continued easy. The prevailing rate on commercial naner was reduced to three per cent around the first of August and remained at that level during the first three weeks of the month. Bond yields continued to decline. Discount rates at the Federal Reserve Banks of Louis, San Francisco, and Kansas City were lowered from 4 to 314 ner cent during August. 72 y
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