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MONTHLY BUSINESS REVIEW
Covering financial, industrial, and agricultural conditions
in the
Fourth Federal Reserve D istrict
Federal Reserve Bank o f Cleveland
Vol. 16
Cleveland, Ohio, September 1, 1932
What change has occurred in this district in the past
month seems to have resulted more from the upward
movement of security and commodity prices than from
any actual advance in the trade or industrial situation.
There is as yet almost a complete absence o f signs of any
expansion in basic industries, though in several quarters
there are indications that conditions are slightly better.
The situation in farm communities, however, improved
as a result of the advance in prices. In some scattered
sections and industries the number o f inquiries has in
creased materially since the first o f August and it is felt
that, because of the low stocks of manufactured goods,
should the rise in prices be maintained, a larger part of
these inquiries will result in actual orders than for some
time past.
The advance in the wholesale price o f some commodities
from the low point touched earlier this year has been
quite pronounced on a percentage basis, though actual
recovery in dollars is still somewhat limited. More real
strength throughout the whole list o f prices has been
shown in the past two months than at any time during
the depression. The average increase in general com
modity indexes was about four per cent from the lows of
June to the third week o f August. Individual comm odi
ties of particular interest to this district showed the fol
lowing percentage advances from the low points estab
lished earlier this year: rubber 43 per cent; cotton 55
per cent; beef 48 per cent; hogs 55 per cent; hides 85
per cent; coffee 25 per cent; tin 25 per cent; wool 8 per
cent and petroleum 21 per cent. Some irregularity was
apparent in the third week of August, slight declines be
ing shown in grain, livestock, and rubber prices, but con
siderably more than half the recovery from the low points
has been maintained.
In the industrial situation, iron and steel production
continue at low levels and automobile output is down
sharply from the June peak. Building activity is still
very limited and tire production in July was less than in
June.
Retail trade was very much depressed in July. Depart
ment store sales were 35 per cent below a year ago down
27 per cent in the first seven months. W holesale trade
was at unusually low levels.
Petroleum production was greater in June and the
first half-year than in similar periods o f 1931, and there
No. 9
were fewer commercial failures in July than in June.
Bank debits continue to run about 35 per cent below
1931.
FINANCIAL
The trend o f member bank credit continued downward
in the four weeks ended August 17 and, because o f the
slowing-down of purchases of Government securities and
the reduction in discounts, the volume o f reserve bank
credit outstanding declined. The contraction in deposits
was at a much slower rate than has been apparent for
several months; time deposits actually increased for five
consecutive weeks. Savings deposits at selected banks de
clined 1.5 per cent in July and were 16.5 per cent below
a year ago. There were two bank suspensions in the dis
trict in the first 26 days of August, compared with
seven in July. Three banks reopened for business in the
month and plans for the reopening of others are pro
gressing.
Reserve Bank Credit. At the Federal Reserve Bank of
Cleveland gold reserves increased about $16,000,000 in
the eight weeks prior to August 17, but on the latest date
they were approximately $100,000,000 lower than a year
ago. These changes reflected chiefly variations in total
bills and securities which declined about $16,000,000
from the high point touched on July 20. At $217,000,000
on August 17, they were just $100,000,000 higher than
on the corresponding date in 1931. The past year’s in
crease was entirely due to larger holdings of Government
securities which, however, were up less than $2,000,000
in the four weeks ended August 17.
Borrowings by member banks in this district were re
duced about $17,000,000 between July 20 and August 17,
and, at $35,705,000 on the latest date, were $95,000,000
below the high point established early in the year. One
year ago discounts for member banks were $30,000,000.
The volume o f acceptances held was practically un
changed from a month ago and, notwithstanding that a
favorable rate prevails on acceptances in comparison with
other short-term money rates, the volume offered to the
reserve banks has been very limited for some time.
Circulation o f this bank’s Federal reserve notes ea-sed
off slightly in the four weeks ended August 17, whereas
in most past years a slight increase was shown at that
time. The volume of notes outstanding, however, is still
2
THE MONTHLY BUSINESS REVIEW
much higher than it has been in recent years, and is over
$60,000,000 above a year ago. It was in August last year
that note circulation began to increase sharply as anxiety
concerning the banking situation became more pro
nounced. From the high point of January 6, note circu
lation is down more than $30,000,000, or about ten per
cent, in this district.
Member bank reserves were increased $2,500,000 in
the four latest weeks as deposits, particularly time, worked
upward. Barring more or less minor fluctuations, member
bank reserve deposits have shown considerable stability
since early months o f 1932. The changes in the principal
items of reserve bank credit in the past year are shown
below.
In Millions of Dollars
August 17, August 19,
Change
1981
1932
from 1981
Loans to member banks .................. .... 36
31
-f 5
72
Government securities ............................ 178
+106
Acceptances .......................................... ....
3
14
— 11
Total Earning assets ........... ........... .... 217
117
+100
213
— 63
T«tal deposits .................................... .... 150
231
+ 62
Federal reserve note circulation....... , 293
354
— 99
Total reserves ....................................
Member Bank Credit. Reporting member banks in lead
ing cities o f this district continued to show a contraction
in loans, both collateral and "a ll other,” in the four weeks
ended August 17. Loans on securities dropped $6,000,000 to $51$,000,000 in the period, and on the latest date
were more than $100,000,000 less than a year ago. Prac
tically one-third of the collateral loans outstanding in Oc
tober, 1929, have since been liquidated.
“ All other”
loans have been reduced 25 per cent in the same period
and at $628,000,000 on August 17, were $13,000,000
lower than on July 20. Since the beginning of the year
the liquidation in “ all other” loans, changes in which
usually are regarded as fluctuations in commercial borrow
ing, has been at a more rapid rate than in security loans.
The $20,000,000 drop in loans at reporting member
banks in the four weeks was offset by an increase in in
vestments of that amount, but the expansion was entirely
due to larger holdings of Government securities which
were up $27,000,000 in the period. Investments in other
stocks and bonds dropped $7,000,000 in the four weeks.
Compared with a year ago reporting member banks’ hold
ings of Government securities are down about 7.5 per
cent and those of other securities 10.9 per cent.
The liquidation in total credit extended by the reporting
member banks in this district from the peak in Septem
ber, 1930, to the present time, has been approximately
17 per cent. Total deposits at these banks have declined
24 per cent in the same period, almost two years.
One of the most favorable signs which has developed
in recent weeks is the gradual increase in time deposits.
From the all-time high point reached in July, 1931, time
deposits were reduced at a fairly steady rate until the
second week o f July, 1932, when they amounted to only
$811,000,000. Since that date, time deposits have in
creased each week, the gain for the five-week period be
ing $8,000,000.
Demand deposits in the four weeks ended August 17
increased slightly, though the movement was irregular,
and consisted of alternate increases and decreases.
MANUFACTURING, MINING
Iron and
Steel
Sentiment in iron and steel improved
perceptibly in the month ended August
15, sympathetic with the rise in the se
curity markets and in general morale, but a natural lag
prevented this improvement from showing up immediately
in production. Therefore, the fractional decline in steelmaking during the month from 16 per cent to 15, with a
slight gain at Pittsburgh virtually neutralizing recessions
at Youngstown and Cleveland, was o f little significance.
Much of the easiness in production in the month ended
August 15 was due to weakness in the automobile in
dustry, which was approaching the usual dead spot at
the conclusion of current models just preceding a start
on new ones. By the middle o f August, however, the
usual preliminary work on new series was under way.
This was accentuated as manufacturers acquired confi
dence, as a result of the better sentiment which prevailed
generally. Unusual hopes were being built up for a fair
automobile market in the remainder o f the year, with the
certainty this would be reflected in production inasmuch
as new-car inventories generally are low.
There also was a strong underlying current that some
railroad business would develop in the early fall. This
prompted, in the first part of August, a noteworthy acceler
ation in demand for pig iron and scrap. Considerable
significance was attached to the fact that much o f this
marked bulge in sales and inquiry, especially for pig iron,
originated from small consumers who were apprehensive in
regard to prices and were disposed to stock moderately
at present levels. Scrap prices advanced 50 cents to $1.50
a ton, with dealers reluctant to sell and the supply dry
ing up, as usual in a rising market.
Prices of heavy finished steel— bars, plates and shapes—
held firmly, but sheets, tin plate and other flat-rolled prod
ucts developed weakness.
These reductions were most
marked as producers bid for specific business. Reflecting
this weakness in the flat-rolled lines and a reduction in
pig iron in the East, where foreign iron is competi
tive, the iron and steel composite of the magazine Steel
dropped 12 cents during the month to $29.34, as of Au
gust 13. The scrap composite, however, rose 3 % per
cent to $6.16 during the month.
July production statistics disclosed pig iron capactty
THE MONTHLY BUSINESS REVIEW
being: operated at 13 per cent and steel ingot at 14.66.
The daily rate of 18,394 gross tons o f pig iron and 31,701 tons of open-hearth and bessemer ingots set new
lows for the last 30 years. Seven-month output of ingots
was 8,360,302 gross tons, compared with 17,447,440 tons,
a year ago; for pig iron the seven-month comparison
is 5,734,742 tons for 1932 and 12,560,392 tons for 1931.
As of July 31 only 46 blast furnaces were active, a decline
o f one during the month.
Coal
Production of bituminous coal at mines
in this district in July was 6,436,000
tons, a reduction of over ten per cent
from the preceding month. In the entire country, coal
production increased 0.5 per cent from June to July and
the expansion continued in the first two weeks of August.
The upturn was largely seasonal and represented chiefly
buying for household use.
Compared with a year ago, output of local mines was
down 49 per cent in July and 32.6 per cent in the first
seven months. The decline in the entire country was 38
per cent in July and 26 per cent in the seven-month period.
The coal movement from Lake Erie ports is still very
limited, but the falling-off, on a percentage basis, is less
than the decline in soft coal production in this district.
July loadings were 38 per cent below the same month of
1931 and in the first seven months of the year they were
down 34 per cent.
Of considerable significance to local producers was the
reduction in freight rates on Ohio coal moving to lake
ports. This has curtailed purchases o f coal, for present
and future use, until other carriers decide whether or not
they will meet the lower rates.
Coal stocks in hands of industrial consumers on July 1
totaled 26,300,000 tons, a reduction of 12.6 per cent in
the past year. Based on the current rate of consumption,
present reserves, in terms of days’ supply, are greater
than a year ago. It is estimated that there is sufficient
coal above ground to last 41 days, as against 33 days’
supply one year ago.
Prices remain very low and have shown only a slight
seasonal improvement in the past month.
Automobiles
A sharp contraction in automobile pro
duction occurred in the last half o f July
and the first part of August, and out
put for the form er month was only 111,139 passenger cars
and trucks. The falling-off from June to July was 39.3
per cent and the Federal Reserve Board’s index, which is
adjusted for seasonal variation, dropped from 47 per cent
of the 1923-1925 monthly average in June to 32 per cent
in July.
Compared with a year ago, output in July was off 49
per cent, the decline in passenger car production being
48.6 per cent and in truck production 52.1 per cent. In
the first seven months passenger car output, at 826,048
units, was 45 per cent under the same period of 1931,
while truck production, at 157,379 units, was down 45.4
per cent from the first seven months o f last year.
According to Cram's weekly reports, the falling-off in
the first part of August reduced output to 26,705 units in
8
the second week of the month and the Annalist's weekly
adjusted index dropped below 30 per cent for the first
time this year. The decline in production was due to a
slackening of consumer demand generally and, in the case
of a few manufacturers, to shutdowns preparatory to the
introduction of new models. One m ajor plant engaged in
producing low-priced cars was closed in mid-August until
after Labor Day. This w ill tend further to reduce out
put.
Retail buying dropped sharply in July, registrations in
the first 31 states to report being 34 per cent fewer thaa
in June and off 48 per cent from July last year.
The fact that automobile production, after allowing for
seasonal changes, reached its peak so far this year in June
and declined quite sharply in July and August, was one
o f the chief reasons why industrial conditions in this dis
trict remained at very low levels during the period. Steel
buying was reduced and tool, parts and accessory, plate
glass, rubber and tire, etc., companies, all very dependent
©n the automobile industry, experienced a falling-off in
specifications.
Several companies are looking forward to somewhat
higher operations this fall, based on the increase in in
quiries for material recently, but very few actual orders
have yet been placed.
Rubber,
Tires
Crude rubber prices, along with many
other raw commodities, increased quite
sharply in July and the first part of Au
gust. Ribbed smoked sheets advanced from a recent alltime low of 2.56 cents a pound to 3.68 cents a pound by
the third week of August, an increase of over 40 per cent.
The upturn was not due to any appreciable change in
the domestic stock situation or consumption, though the
supply of raw rubber on the plantations was slightly re
duced. It was helpful to the rubber companies, however,
all o f which are forced to carry very large stocks and
which have suffered large losses in the past few years
through write-downs o f inventories to current values.
Domestic stocks of crude rubber on July 31 were about
346,335 long tons, as against 345,702 tons a month earlier.
The increase from a year ago was 47.5 per cent. Imports
of 31,078 tons in July were 35 per cent smaller than in
June and 24 per cent below the corresponding month last
year. In the first seven months of 1932 imports were
11.9 per cent below the same period o f 1931.
Final statistics for June, as compiled by the Rubber
Manufacturers Association, bear out the contention made
last month that shipments were at record levels and
manufacturers’ inventories showed almost a correspond
ing decline.
Production of tires increased more than 50 per cent
from May to June at factories representing 80 per cent
o f the industry and was almost as large as in the cor
responding month of 1931. Output, however, was only
slightly more than half the shipment of 8,315,000 casings,
and inventories were reduced more than 50 per cent in
the month. The shipments were made chiefly in the first
21 days of June and were by far the largest on record.
Manufacturers inventories at the end o f June amounted
4
THE MONTHLY BUSINESS REVIEW
to less than half a month's supply, whereas normally pro
ducers have on hand from two to three months’ supply.
One large company reports that collections an the June
sales have been unusually poor.
Preliminary reports regarding employment, rubber con
sumption and production in July from various sources in
dicated a falling-off in output during the month, but the
change in employment was not very pronounced. At 20
concerns reporting to the Ohio State Bureau of Business
Research, ten showed increases, eight decreases and two
no change from the previous month, with a net decline
of one per cent for all companies. The employment in
dex, based on a 1926 average o f 100, was 64 in July. The
reduction from June was largely through the scaling-down
of hours worked.
Rubber consumption in July was 28,272 long tons, as
compared with 39,116 tons in June, a drop of 27.7 per
cent. In July last year consumption was 31,937 tons, or
11.5 per cent more than in the latest month. The effect
o f the over-shipment o f tires to dealers in June no doubt
will be felt by manufacturers for some time, for gasoline
consumption has declined recently, indicating that mile
age of automobile travel has been reduced.
Clothing,
Textiles
The improvement in general business
sentiment and the firming of commodity
prices had somewhat o f a favorable ef
fect on the clothing industry in the first part of August
as the fall producing season opened from 30 to 60 days
later than usual. There has been a noticeable increase
in demand for women’s dress goods and orders for woolen
goods were more numerous in August after declining in
July. Most orders are still for immediate delivery, but it
is felt that, if the recent price increase holds, additional
orders will materialize. W ool consumption in June, the
latest month for which figures are available, was consid
erably higher than in May.
Accoring to reports of the Ohio State Bureau of Busi
ness Research, employment at 42 concerns in July declined
seven per cent from June in contrast with a three per
cent average falling-off shown in the preceding five years.
The number employed was 75 per cent of the 1926 month
ly average, a reduction of 14 per cent in the past year.
The June-to-July decline at factories making men’s cloth
ing was only one per cent. A seasonal upturn occurred
in August, however, and some companies are now operat
ing full time.
Orders continue much below last year and retailers are
buying only enough to supply actual needs. Prices of
both men’s and wom en’s apparel have declined 25 per
cent in the past year and a half, according to Fairchild- h
retail price index, and are about 20 per cent lower than
a year ago.
Operations in the knit goods industry increased quite
sharply in August, to near normal levels, in some cases,
and orders for fall delivery have been received in good
volume. In view o f the higher raw material prices the
tendency at this time seems to be to order larger quan
tities pending a rise in the cost o f finished goods.
Other
Manufacturing
Operations in miscellaneous industries
o f the fourth district continued at low
levels in July and were effected mate
rially by the tapering-off in the automobile industry. Sen
timent, however, was very much improved in early Au
gust and several concerns reported a marked increase in
the number of inquiries. Due to the slight advance in
prices and the generally depleted stocks of manufactured
goods, quite a few producers seem to be confident that a
larger number o f orders will result from these inquiries
than have been attained for some time.
Employment
continues at very low levels, being about 60 per cent of
the 1926 monthly average. In Ohio the June-to-July de
cline in manufacturing employment was three per cent,
the same as the average falling-off in the five years,
1927-1931.
W ith automobile production curtailed in August, as
model changes were being effected in some cases, a slump
in orders for machine tools, parts, accessories, steel, glass,
etc., developed in July. An increase in both orders and
inquiries was reported about the middle o f August, but
the volume o f operations is still very limited. Employ
ment at 46 parts and accessory concerns was down three
per cent from June to July and was only about 60 per
cent o f the 1926 average and even some o f those employed
are working short hours.
Employment in the machinery and machine tool, ap
paratus and electrical supply industries declined more than
seasonally in July. No particular change from the gen
erally low level of operations was reported in the first
three weeks o f August, though indications of a restoration
of confidence was evident in the increase in inquiries.
Paint companies reported a better feeling generally, but
state that this has not resulted in any change in the vol
ume o f orders received. Sales so far this year have been
from 20 to 25 per cent below the same period o f 1931.
In the stone, clay and glass industry the four per cent
decline in employment reported in July compared with an
average drop o f seven per cent in the same period of the
preceding five years. Of the 68 reporting concerns, 27
showed increases, 33 decreases and eight no change from
June to July. Some makers of china and dinnerware experi
enced a greater-than-seasonal increase in orders in the first
half of August over the same period of July. Wage scales of
pottery workers were reduced 10 per cent in the new
agreement covering the next two years.
Sales of window glass in July were under June and for
the year to date were about 40 per cent below the high
point. Sales of automobile glass and containers are also
at low levels. Manufacturers stocks are down about 50
per cent from the peak and are still being reduced. Prices
have been fairly stable so far this year, but are very low.
In the paper and boxboard industry July operations and
sales were the lowest o f the present depression, with many
mills running at about 50 per cent o f capacity. Employ
ment was about 80 per cent of the 1926 average at 13
concerns, though the number of hours worked was much
below this level.
Production o f shoes at 27 establishments in this dis
trict in July was reported to be 5.4 per cent below June,
THE MONTHLY BUSINESS REVIEW
a contrary-to-seasonal change. In seven of the preced
ing nine years, an increase, which averaged 13 per cent
for the entire period, was shown. Compared with a year
ago, production was down 27 per cent in July, but the
falling-off in the first seven months was only 5.7 per cent.
Producers and wholesalers reported a better sentiment
generally in August, however, and an improvement in col
lections. Orders are chiefly for small quantities, mostly
for the medium and low-priced lines, but salesmen state
that less resistance to buying is apparent than a month
or two ago.
TRADE
There was a considerable decline in retail trade in this
district in July, judging by the reports received from the
principal department stores. Dollar sales in the month
were 35.5 per cent smaller than in July a year ago, and
the reduction from June was much greater than seasonal.
The daily average seasonally adjusted index dropped from
61 per cent of the 1923-192 5 monthly average in June to
55 per cent in July, the lowest level yet touched in this
depression or on record back to 1919. Sales in the first
seven months of 1932 were 27 per cent below the same
period o f 1931.
Part of the June-to-July drop represented a further
reduction in retail prices, but the falling-off between these
two months, according to Fairchild’s index, was only 1.5
per cent, the smallest since May. Compared with a year
ago, prices are down about 18 per cent. Current depart
ment store prices are reported to be 40 per cent below
November, 1929.
The dollar value o f retail stocks dropped 10 per cent
from June to July, a greater-than-seasonal reduction. On
August 1 they were 19 per cent below a year ago and only
61 per cent of the 1929-1925 monthly average.
A smaller proportion o f total sales were charge sales
in July than either a year ago or in the preceding month.
Credit sales were 51.5 per cent o f total sales in the latest
month, compared with 56.5 per cent in June and 55.6 in
July, 1931.
Collections in July on accounts outstanding at the end
of June amounted to only 28 per cent, compared with 31
per cent in the same month last year.
The dollar value o f chain grocery sales, per individual
unit operated, was 12 per cent smaller in July than in
the same month last year and off five per cent from June.
In the first seven months there was a reduction of eight
per cent from the same period o f 1931. Food prices, ac
cording to the Index of the Bureau of Labor Statistics,
were nearly 20 per cent lower in July than a year ago.
Chain drug sales were down 15.8 per cent in July from
a year ago, but up three per cent from June. The decline
in the first seven months was 13 per cent from the same
period o f 1931.
All four reporting lines o f wholesale trade experienced
a greater-than-seasonal falling-off in sales from June to
July, and the combined index in the latest month was
only 47 per cent o f the 1923-1925 monthly average, as
against 57 per cent in June and 69 per cent a year ago,
no allowance being made for seasonal variations. Dry
5
goods sales were down 49 per cent from last year in July
and 39 per cent in the seven-month period. Hardware
sales were 37 per cent below July, 1931, and off 26 per
cent in the first seven months of this year. The reduction
from a year ago in wholesale grocery sales was 29 per
cent in July and 22 per cent in the January-to-July
period. W holesale drug sales were down 27 per cent in
July and 15 per cent in the first seven months.
BUILDING
Although the dollar value o f all building contracts
awarded in this district in July, according to the F. W.
Dodge Corporation, was slightly smaller than in June
and 54 per cent below a year ago, the decline was en
tirely in the residential field and less than seasonal.
Awards for non-residential building in the month were up
somewhat from June to July, a contrary-to-seasonal move
ment, but in the latest period were more than 50 per
cent below the same month of 1931.
Residential contracts let in July declined from June,
and, being valued at $1,401,000 in the latest month, were
73 per cent below July last year. In the first seven months
of 19 31 residential building was 70 per cent below last
year’s very disappointing figure.
Public utility awards made a good gain over the June
total and the decline from a year ago was only about 13
per cent. July contracts for public works were smaller
than in June and 30 per cent below a year ago. In the
seven-month period public work awards were valued at
nearly 50 per cent less than in the same interval of 1931.
July awards for all construction were larger than in
June in Pittsburgh, Cleveland, Cincinnati, Columbus, To
ledo, W heeling and Youngstown, an improvement con
trary to the change shown in most past years.
Building activity in this district in the first seven
months of 1932 had a total value o f $74,845,000. This
was 78 per cent below the average value ($339,758,000)
o f contracts awarded in the similar period of the preced
ing ten years. Building supply dealers are very much de
pressed, but some reported an improvement in sentiment
and an increase in inquiries in the past few weeks, partly
as a result of the upturn in prices and the hope that
operation of the Home Loan Banks will relieve pressure
on the building and loan associations.
Employment in the construction industry in
only 37 per cent o f the 1926 average in July,
162 reports received by the Bureau of Business
This represented the number on payrolls and
allowance for part-time employment.
Ohio was
based on
Research.
made no
The index of total building costs was only 80 per cent
of the 1926 average in July, wages being 93 per cent of
this same average and materials, 70 per cent.
AGRICULTURE
The rise in general comm odity prices which manifest
itself in July and continued with greater impetus in Au
gust was largely responsible for the better sentiment ex
hibited throughout the country. Much o f the upturn was
the result o f an increase in farm prices, which, in the
6
THE MONTHLY BUSINESS REVIEW
month ended July 15, amounted to about 10 per cent, the
sharpest in a single month for over three years. In midJuly farm prices were 57 per cent o f the five-year pre-war
average, as against 52 per cent in June, the low point so
far in this depression. Compared with a year ago, how
ever, prices were still down 28 per cent.
During the month ended July 15, seven of the nine sub
group indexes o f farm prices increased, only grains and
the group of unclassified items showing declines. Since
that date, however, prices of grains, cotton, eggs and dairy
products improved, while livestock prices lost some o f the
June and July gain, though they remained substantially
above the low point.
The recent rising tendency was largely due to reduced
current supplies as in livestock products and to reduced
prospective crops in the case of some grains and cotton.
Although the August 1 crop report of the Department
of Agriculture indicated widespread declines in crop pros
pects for the entire country during July, conditions were
such locally that a slight improvement was shown in the
principal crops of the fourth district. Compared with a
year ago, however, crop prospects are much lower locally
than in the United States. Yields are expected to be about
25 per cent below last year in this section, but the 1931
crops were, in most cases, of record size in the district.
In the entire country yield per acre of principal crops is
expected to average 6.5 per cent below last season and 4.5
per cent below the average of the period 1919-1928. Au
gust 1 indicated yield per acre o f 31 important crops com
bined, expressed as a percentage o f the ten-year average
yield, 1919-1928, for Ohio was 96.4; Pennsylvania, 87.4;
Kentucky, 94.5; W est Virginia, 84.7; and for the entire
country, 95.4.
Rains were badly needed in some sections of the dis
trict, while in others recent precipitation was too great.
Wheat. The estimate o f wheat production for the dis
trict was increased three per cent in July. The crop turned
out better than was expected in the northern counties,
but yield per acre varied from ten bushels in Kentucky
to 20.5 in Ohio, where over 90 per cent o f the district’s
crop is raised. This compared with a record yield of 24.5
bushels last year and 16.5 bushels, the ten-year average.
Outside of Ohio the crop was very much below the aver
age of preceding years, having been affected by blight,
drought, etc.
Total estimated wheat production for the entire coun
try is 723,000,000 bushels, a reduction of 13 per cent
from the 1924-28 average production. Forecasts o f pro
duction in 32 countries which last year produced 93 per
cent of the Northern Hemisphere wheat crop, were 3,064
million bushels as against 3,073 million bushels a year
ago. The increase which in part offset the decline in the
United States crop was entirely in countries which in the
past found it necessary to import some of the wheat con
sumed. Meager reports from Russia indicate that grain
harvesting so far this season is much below anticipations.
Oats. The oat crop estimate remained unchanged in
July, and was much below average in this section. Yield
per acre in Ohio was ten bushels below average and 12.5
bushels, or 33 per cent, below last year.
Com . The estimated corn crop was reduced six per
cent in July in the entire country, but because o f the
very large acreage, the 2,996,000,000 bushel forecast was
seven per cent above average. In the fourth district the
crop estimate was increased 1.3 per cent to 170,928,000
bushels, still about 17 per cent below last year’s record
crop, but above the average o f preceding periods. In
sufficient moisture in late July and early August was a
disturbing factor, for the crop in mid-August was still
in the critical period.
Potatoes. The estimated late potato
trict was somewhat larger on August
earlier, but rains were badly needed and
damage was increasing. In the entire
tion in condition was reported in July.
crop of the dis
1 than a month
insect and blight
country a reduc
Tobacco. Tobacco prospects for the entire country were
reduced 41 million pounds by adverse weather in July.
All states contributed to the decline, and if the forecast of
1,019,975,000 pounds is obtained, the crop will be the
smallest, save one, since 1913.
The district crop was
estimated on August 1 to be 132,335,000 pounds (the
July figures were incorrectly reported by the B oard) a
reduction o f 30 per cent from the record harvest of last
year and only about two million pounds above the fiveyear average harvest of 1924-1929.
The reduction in this district in July was about seven
per cent and was due to unfavorable weather conditions.
Dry weather in July caused some crops to be cut prema
turely, but the copious rains occurring in Kentucky in
early August caused the crop to improve in some sections.
In others it was so heavy that considerable damage was
done. Rust and leafspot are reported in some sections.
The condition of all air-cured tobacco (chiefly burley)
on August 1 was 60 per cent of estimated normal, com
pared with 72 per cent a year ago.
The most favorable factor, so far as tobacco growers in
this district are concerned, is the very small crop o f flue
and fire-cured tobacco that is being harvested and sold.
The August 1 condition indicated a reduction of almost
50 per cent from last year in production o f the types of
tobacco grown in tne southeastern states and an even
greater loss from the five-year average harvest.
Stocks o f all types o f tobacco are large and the small
crop this year should be helpful in this respect.
WHEAT
PRODUCTION
MILUOriS OF BUSH ELS_______________FOURTH DISTRICT__________
♦Estimated on basis of Aug. 1 condition
7
THE MONTHLY BUSINESS REVIEW
Small grains and hay production estimates were reduced
in July, so far as this section was concerned, and with the
exception of rye, the yields per acre are considerably be
low average. Fruit prospects increased in Ohio in July,
but declined in other sections of the district. The grape
crop is in better-than-average condition, though a smaller
crop than in 1931 is indicated.
Fourth District Business Statistics
(000 omitted)
% change
Fourth District Unless
July,% change Jan.-July,
Otherwise Specified
1932
from 1931
1932
from 1931
Bank Debits— 24 cities...........3
1,591,000— 35.3
11,817,000
— 35.7
Savings Deposits— end of month:
27 selected banks, O. & P a... 3
636,940
— 15.7
651,8771 — 14.7
Retail Sales:
— 26.9
Department Stores-54 firms.3
9,627
-—35.5
96,496
Wearing Apparel— 13 firms..3
475
— 40.1
5,603
— 29.7
— 39.8
Furniture— 46 firms...............3
287
— 48.6
3,339
Wholesale Sales:
1,037
— 27.4
8,877
Drugs— 13 firms..................... 3
— 15.4
Dry Goods— 11 firms............ 3
502
— 48.9
5,648
— 38.5
Groceries— 37 firms............... 3
3,218
— 28.5
23,643
— 2 2.0
Hardware— 15 firms.............. 3
792
— 37.0
6,407
— 26.2
Building Contracts—
Residential............................... 3
1,401
— 72.9
13,836
— 69.9
Building Contracts— T o ta l...3
12,533
— 53.9
74,845
— 59.9
Commercial Failures—
+ 2 .7
Liabilities..................................3
7,877
+ 2 2 .6
54,9762
Commercial Failures— Number
2032
4-32.7
1,7672
+ 3 2 .2
Production:
— 54.4
572
— 60.9
5,737
Pig Iron, U. S...................Tons
Steel Ingots, U. S.......... Tons
793
— 58.0
8,360
— 52.1
Automobiles-Pass. Cars U. S. . 94,7052 — 48.6
826,0482 — 41.0
Automobiles—Trucks, U. S ...
16,4342
— 52.1
157,3792 — 45.4
Bituminous Coal............. Tons
6,436
— 49.1
60,429
— 32.6
Cement— O., W. Pa., W. Va.
.............................................Bbls.
582
— 61.7
2,709
— 58.3
Elec. Power— O., Pa., Ky.
.......................................... k.w.h.
9613
— 7.6
6,050*
— 11.3
Petroleum— O., Pa., Ky. Bbls.
2,0763
+ 1 1 .2
11,841*
+ 3.5
• 5.7
Shoes..................................Pairs
5
— 27.7
5
Tires, U .S ...................Casings
4,5403
— 0 .2
19,256*
— 16.2
Bituminous Coal Shipments:
Lake Erie Ports...............Tons
2,928
— 38.5
9,040
— 33.6
Iron Ore Receipts:
— 89.9
Lake Erie Ports...............Tons
470
— 85.3
626
1 monthly average
* Jan.-June
2 actual number
5 confidential
8 June
Wholesale and Retail Trade
(1932 compared with 1931)
Percentage
Increase or Decrease
SALES
SALES
STOCKS
First seven
July,
1932
months
{ 9 /2
DEPARTMENT STORES (54)
Akron.......................................................
Cincinnati...............................................
Cleveland................................................
Columbus................................................
Pittsburgh...............................................
Toledo......................................................
Wheeling.................................................
Youngstown...........................................
Other Cities...........................................
District....................................................
WEARING APPAREL (13)
Cincinnati...............................................
Other Cities...........................................
District....................................................
FURNITURE (46)
Cincinnati...............................................
Cleveland................................................
Columbus................................................
Dayton....................................................
Toledo......................................................
Other Cities...........................................
District....................................................
CHAIN STORES*
Drugs— District (4).............................
Groceries— District (6).......................
WHOLESALE GROCERIES (37)
Akron.......................................................
Cleveland................................................
Erie..........................................................
Pittsburgh...............................................
Toledo......................................................
Other Cities...........................................
District....................................................
WHOLESALE DRY GOODS (11).
WHOLESALE DRUGS (13)...........
WHOLESALE HARDW ARE (15).
*Per individual unit operated.
— 31.6
— 31.5
— 39.2
— 26.8
— 39.1
— 29.9
— 35.9
— 33.6
— 33.3
— 35.5
— 26.1
— 24.5
— 23.9
— 22.6
— 29.8
— 26.5
— 31.6
— 32.2
— 28.0
— 26.9
— 13.1
— 22.9
— 10.6
— 24.7
— 19.4
— 23.3
— 18.9
— 27.0
— 24.7
— 18.9
— 33.1
— 43.6
— 40.1
— 25.8
— 31.8
— 29.7
— 29.2
— 31.9
— 30.9
— 51.8
— 54.4
— 47.5
— 29.9
— 41.7
— 48.8
— 48.6
— 44.9
— 46.0
— 31.4
— 23.2
— 28.0
— 43.9
— 39.8
— 15.8
— 11.6
— 13.0
— 8.1
— 32.0
— 26.0
— 28.4
— 33.4
— 30.3
— 28.3
— 28.5
— 48.9
— 27.4
— 37.0
— 25.5
— 24.1
— 19.1
— 21.0
— 20.3
— 21.2
— 22.0
— 38.5
— 15.4
— 26.2
— io! 5
— 35.2
Debits to Individual Accounts
(In Thousands of Dollars)
Fourth District Business Indexes
(1923-1925 = 100)
Bank Debits (24 cities)........................................
Commercial Failures (Number)........................
“
“
(Liabilities).....................
Postal Receipts (9 cities).....................................
Sales— Life Insurance (Ohio & Pa.)..................
“ — Department Stores (55 firms)...............
“ — Wholesale Drugs (13 firms)..................
“ —
“
Dry Goods (10 firms).........
“ —
“
Groceries (37 firms)............
“ —
“
Hardware (14 firms)...........
“ —
“
All (74)..................................
“ — Chain Drugs (3 firms)**.......................
Building Contracts (Total)... . ...........................
“
“
(Residential).......................
Production— Coal (O., W. Pa., E. K y.)...........
— Cement (O., W. Pa., W. Va.). . . .
“
— Elec. Power (0., Pa., K y.)*.........
“
— Petroleum (O., Pa., K y.)*...........
"
— Shoes................................................
♦June.
**Per individual unit operated.
ruiv,
1932
59
139
179
ii
66
19
55
39
47
73
26
8
36
48
114
112
66
\ ti
91
105
146
96
105
63
91
37
77
62
69
87
57
30
70
126
124
101
91
J19/d
122
115
55
103
134
69
96
50
89
73
80
87
101
55
83
164
134
124
89
{ 9I 9
143
98
45
113
134
79
109
68
100
96
94
91
126
85
96
178
144
112
103
J192y8
121
90
74
102
116
79
103
68
89
91
88
91
118
109
80
153
121
109
100
4 weeks
ending
Aug. 17,
1932
42,145
4,817
15,307
202,503
,
347,517
79,243
38,252
17,599
2,202
Greensburg. . . ,
3,955
6,130
Homestead.
1,977
10,551
6,945
2,622
4,270
Middletown.. . ,
7,161
436,892
9,684
Steubenville----4,141
65,931
3,577
20,871
20,587
Youngstown.. .
4,684
.. 1,359,563
%
change
from
1931
— 42.1
— 28.7
— 47.8
— 23.6
— 37.5
— 37.6
— 34.9
— 38.6
— 25.4
— 34.6
— 37.6
— 44.0
— 27.6
— 22.9
— 43.1
— 38.2
— 35.5
— 28.6
— 32.2
— 43.1
— 40.7
— 45.6
— 26.2
— 55.9
— 34.5
— 33.6
Year-to-date Year-to-date
Dec. 31, 1931
Jan. 1
to
to
Aug. 17,1932 Aug, 19, 1931
397,957
619,432
47,378
67,690
140,939
282,390
1,929,697
2,638,202
3,296,311
5,146,201
764,953
1,250,454
349,370
612,130
168,295
242,784
22,244
29,508
42,152
66,573
61,137
86,330
18,440
30,241
125,298
156,945
62,199
82,712
24,197
38,186
44,875
69,704
70,163
95,914
4,056,141
5,957,257
92,894
142,925
41,528
65,811
582,560
1,131,979
34,777
67,781
207,150
283,723
211,845
408,341
44,413
69,358
12,836,913
19,642,571
%
change
from
1931
— 35.8
— 30.0
— 50.1
— 26.9
— 35.9
— 38.8
— 42.9
— 30.7
— 24.6
— 36.7
— 29.2
— 39.0
— 20.2
— 24.8
— 36.6
— 35.6
— 26.8
— 31.9
— 35.0
— 36.9
— 48.5
— 4 8.7
— 27.0
— 48.1
— 36.0
— 34.6
s
THE MONTHLY BUSINESS REVIEW
Summary of National Business Conditions
By the Federal Reserve Board
\olum e of Industrial output declined seasonally from June to July,
while factory employment and payrolls decreased by more than the usual
seasonal amount. In July the general level o f wholesale prices was about
one per cent higher than in June, and in the first half o f August prices of
many leading commodities advanced considerably. Reserve bank credit de
clined somewhat in the four weeks ending August 17, reflecting chiefly a sub
stantial growth in the country’s stock of monetary gold.
Index of industrial production, adjusted for sea
sonal variation, (1923-1925 average =
100)
Latest figure, July, 59.
Federal Reserve Board's index of factory em
ployment with adjustment for seasonal varia
tion. (1923-1925 average — 100) Latest figure,
July, 58.3.
Production and Employment
Industrial production decline by about the usual seasonal amount in
July and the Board’s index, which is adjusted to allow for the usual seasonal
variations, remained unchanged at 59 per cent of the 1923-1925 average.
Activity decreased seasonally in the steel industry; by slightly more than the
usual seasonal amount in the lumber, cement, newsprint and meatpacking
industries; and by substantially more than the seasonal amount in the au
tomobile and lead industries. Output of shoes, which ordinarily increases
in July, declined. At woolen mills activity increased by a substantial amount,
and at silk mills there was a seasonal increase in production. Activity at
cotton mills decreased, as is usual in July, while sales of cotton cloth by
manufacturers increased considerably. Output of coal increased from the
low level prevailing in June.
Reports on the volume of factory employment and payrolls showed sub
stantial declines from the middle o f June to the middle o f July. In the
machinery, wom en’s clothing, and hosiery industries, and at railroad repair
shops, the number employed decreased by considerably more than the usual
seasonal amount, and at shoe factories the increase reported was smaller
than usual. In the woolen goods industry a substantial increase in employ
ment was reported.
Value of building contracts awarded, as reported by the P. W . Dodge
Corporation, continued at a low level during July and the first half o f Au
gust.
Prospects for many leading crops, including corn, spring wheat, potatoes,
and tobacco, were reduced somewhat during July, according to the Depart
ment of Agriculture. The estimated total wheat crop, based on August 1
conditions, is 72 3,000,000 bushels, a decrease of about 175,000,000 bushels
from last year’s large crop, reflecting a reduction o f 350,000,000 bushels in
the winter wheat crop, offset in part by an estimated increase o f 175,000,000
bushels in the spring wheat crop. The first official cotton estimate, as of
August 1, was 11,300,000 bales, as compared with crops o f 17,100,000 last
season and 13,900,000 in the year before. The indicated production o f corn
is 2,820,000,000 bushels, substantially larger than the crops of the last
two seasons and slightly larger than the five-year average.
Distribution
Volume of freight traffic decreased somewhat from June to July, and
value of department store sales was substantially reduced.
Index of United States Bureau of Labor Statis
tics, (1926 — 1M) Latest figure, July, 64.5.
Monthly averages o f daily figures. Latest fig
ures are averages o f first 21 days in August.
Wholesale Prices
The general level of wholesale prices, as measured by the monthly
index o f the Bureau of Labor Statistics, advanced from 63.9 per cent o f the
1926 average in June to 64.5 per cent in July. Between the middle of July
and the third week of August prices of livestock and meats, which had
previously advanced considerably, declined somewhat, while price increases
were reported for many other leading commodities, including wheat, tex
tile raw materials and finished products, nonferrous metal, hides, sugar,
coffee and rubber.
Bank Credit
The total volume of reserve bank credit outstanding, which had in
creased by $850,000,000 between the end o f March and the third week of
July, declined by $95,000,000 in the four weeks to August 17, and in the
same period member banks increased their reserve balances by $45,000,000.
These changes reflected chiefly the addition o f $95,000,000 to the country’s
stock of monetary gold and an inflow to the banks o f $30,000,000 in cur
rency.
Total loans and investments of reporting member banks in leading
cities were $250,000,000 larger on August 17 than four weeks earlier.
To
tal loans of these banks continued to decline throughout the period, while
their investments increased substantially, reflecting an increase in holdings
o f United States Government securities in connection with Treasury financ
ing operations. Time deposits increased by $95,000,000 and net demand
deposits by $85,000,000.
Money rates in the open market remained at low levels. Successive
reductions brought the prevailing rates on prime commercial paper to a
range o f 2-2% per cent in the first part o f August.
@FedFRASER