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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank of Cleveland Vol. 15 Cleveland, Ohio, September 1, L933 A levelin g-off in the sharp advance in m ost lines o f production was reported in this district and other parts o f the coun try in A ugust, but a slow in g dow n at this sea son is not unusual, in fact it is g en erally expected. Com ing at the present period it affords tim e fo r distribu tion and consum ption, w hich have lagged som ew hat behind production in the past few m onths, to catch up. The ac com panyin g chart show s the F ederal R eserve B oa rd ’s m onthly index o f industrial production and this ba n k ’ s index o f freigh t carloadings, ad ju sted for seasonal varia tions, based on the average o f the three years 1923-1925. The production index in July was 98 (p relim in a ry ) com pared w ith 90 in June and 60 in M arch, a gain in fou r months o f 63 per cent, the sharpest advance fo r any sim ilar period on record. A t the same time the carload ings index, which is one barom eter o f distribution, rose about 28 per cent. P arallelin g this, the index o f fourth district d e p a rtm e n t' store sales (n o t shown on (he c h a r t ) representing g oods passing to the consum er, advanced about 35 per cent betw een March and July. Despite the slow ing dow n in A ugust, operations are much above a year ago in practically all lines except building. July records com pare very fav orably w ith last year in m ost o f the im portan t lines o f activity in this district. The fo llo w in g table show s the percentage changes from a year ago in som e o f the business in d i cators in the latest m onth. A utom obile production, U. S .................................................................... Building' contracts awarded, residential— fourth d istrict................ Cement production— fourth district .......................................................... Coal production— fourth district ................................................................ Coal shipments— Lake Erie ports .......................................................... Com m ercial failures— fourth district ................................................... Department store sales— fourth district..... ................. .......................... Furniture store sales— fourth district........................................................ Iron ore receipts— Lake E rie ports ................................................... Pig: iron production, U. S......................................................................... Steel ingot production, U. S. .............................................................. W holesale sales— four reporting- lines— fourth district...................... im provem ent was reported. F ollow in g the ad option o f the N R A codes by several industries in A u gust a fu rth er bettering o f em ploym ent con dition s was g en erally re ported though, as yet, few figures fo r the period are avail able. In Cincinnati a com prehen sive survey revealed that betw een July 31 and the third w eek o f A u gust a 15 per cent im provem en t in em ploym ent occu rred. A gricu ltu ral condition s, so far as crops w ere concern ed, grew w orse in July and the first h alf o f A ugust. P rices o f m ost farm com m odities were con siderably above a year ago. FINANCIAL Credit and financial con dition s in the fou rth district show ed only m in or changes in the five w eeks ended A u gust 23. There was a sligh t increase in loans to m em ber banks by the reserve bank, and little change in total loans and investm ents o f reportin g m em ber banks in lead ing cities. A slight fallin g-off in deposits at reportin g m em ber banks was visible in the period, but savings de posits in July, at 41 banks, increased one per cent, al though at the end o f the period they w ere 6.7 per cent sm aller than a year ago. One in dication o f the im proved condition s is fou n d in the record o f com m ercial failures. In July, a ccord in g to R. G. Diist, there were only 1.10 defaults reported in the fou rth district. This is the sm allest num ber on record -f-lio .o -i- 49. S * Uv>.:s r 1 — 46.3 ~ r 12J + 'I’O.S 4-504.9 +218.0 ~f-296.9 f- 21.2 In addition to the foregoin g , bank debits to individual accoun ts in 24 cities in July w ere 2.8 per cent la rger than a year ago despite the fact that n um erous banks remain closed. Life insurance sales in Ohio and Pennsylvania in July w ere w ithin tw o per cent o f a year ago, w hereas the decline in the first h a lf year was over 15 per cent. E m ploym ent at representative concern s in Ohio in July increased nearly six per cent from June, a contra-seasonal change, and the gain from the low point tou ched in March am ounted alm ost to 30 per cent. In western Pennsylvania the upturn was not quite so m arked, though considerable No. 9 1925 = 100). L atest figure : Week ending A ugust 12, 61.3. Broken lin<v*-month!y index o f industrial production, F tderal Reserve Board (1925-1925 = 100>. Latest figu re: July, 98. Both curves adjusted fo r seasonal variation. TH E M ONTHLY BUSINESS R E V IE W 2 back to 192 3, and was a reduction o f 46 per cent from July, 1932. In the first seven m onths o f this year the num ber o f com m ercial failures was 33 per cent under the sam e interval o f 1932. L iabilities o f the defa u ltin g concern s in July totaled $2,668,000, a reduction o f 66 per cent from last year. Bank debits to in dividu al accounts continued to in crease in size, and reflect the la rger volum e o f business being done as wrell as the advance in prices that has oc curred in the past three or four months. In the five latest w eeks debits at banks in 24 cities w ere 10.5 per cent ahead o f a year ago. R eserv e B ank Credit. In the w eek follow in g Ju ly 19, bills discou n ted fo r m em ber banks declin ed slightly, and, at $9,949,000, they w ere low er than since June, 1930. In the fou r follow in g w eeks, how ever, a very gradual in crease in discounts occu rred and on A ugust 2 3 m em ber bank b orrow in gs w ere approxim ately $12,500,000. Usual ly there is an increase in borrow in g s at this tim e o f year to finance the shipm ent o f grains to m arkets. G overnm ent securities am oun ting to approxim ately $5,000,000 w ere purchased by the bank in con ju n ction w ith the system ’ s open m arket operations. On the latest date G overnm ent securities, am oun ting to $190,364,000, rep resented 93.5 per cent o f the total bills and securities held by this bank. A cceptan ce h oldin gs for m any w eeks have been on ly n om in al; on A ugust 23 they am ounted to $640,000. L ittle change in the volum e o f F ederal reserve notes and bank notes in circu lation occu rred in the five latest w eeks. There wras a decline in the volum e o f notes ou tstan din g o f about $3,000,000, but this w^as offset by an increase o f $3,600,000 in F ederal reserve bank notes in circu lation . Total deposits, in clu din g reserve deposits, w ere reduced about $10,000,000 in the five m ost recent w eeks, but on the latest date they w ere still $11,600,000 h igh er than a year ago. M em ber B a n k Credit. Total loans and investm ents of w eekly reportin g m em ber banks in leadin g cities in the fou rth district increased $16,000,000 in the five latest w eeks, but the gain was confined largely to investm ents o f United States securities. Total loans w ere reduced sligh t ly in the period, the increase in loans on securities being m ore than offset by the declin e in ‘ ‘all oth er” loans. In m ost w eeks since June 14, when paym ent o f in ter est on dem and deposits becam e illega l, there has been a declin e in these deposits at reportin g m em ber banks, and in the five latest w eeks the reduction was $2 7,000,000. P art o f the loss in dem and deposits in this period again represented a sh ift in deposits from dem and to tim e ac counts, fo r tim e deposits increased $16,000,000 in the five latest w eeks. Due to an expansion in G overnm ent deposits, there w^as a sligh t increase in total deposits in the period. MANUFACTURING, MINING F rom a national average o f 57 per cent at the m iddle o f July, steelw orks opera tions slow ed dow n to 48 per cent by the last w eek o f A ugust. In the C leveland-L orain dis trict the rate was dow n from 87 to 72 per cen t; at Y oun gstow n , from 66 to 53 per cen t; w hile at P ittsbu rgh Iron and Steel it was dow n five points to 43 per cent. A lth ough a decline usually occu rs in the sum m er m onths, the seasonal in terru ption to trade has been less acute this year than custom ary. Shipm ents on specifica tions released prior to A u gust 1, when the steel industry in itiated a single price p olicy fo r large and sm all buyers, have held up exception ally w ell. But new' purchasing has tapered, w ith increasin g resistance from im portan t con sum ers against the elim in ation o f concession s on ton nage. U ncertainties regarding operations in accorda n ce w ith the N R A program also have tended to restrict fu r ther com m itm ents, th ou gh clarification o f the cod e is ex pected by the trade to supply an im petus fo r term inatin g the present lag in buying. Dem and fo r raw m aterials continues strong. In qu iries from several steelw orks fo r heavy tonnages o f basic iron have been w ithdraw n since the coal la bor situation has im proved. L argely responsive to the settlem ent in the C on n ellsville district, fou n d ry coke has fo llo w e d fu rn ace cok e up 50 cents a ton. P ig iron shipm ents this m onth are 25 per cent ahead o f those in the com parable period o f July. Scrap is active, w ith supplies light. W ith a net gain o f 15 active blast furnaces in July, 105 ou t o f the cou n try ’s 289 stacks wrere operatin g at the close o f the m onth, 67 m ore than in M arch. D aily ou tpu t o f pig iron for the m onth averaged 58,108 gross tons, 37.8 per cent m ore than in June, and the high est since May, 1931. Total output fo r the m onth, 1,801,345 tons, was 5 36,392 tons or 42.4 per cent over June. In the seven m onths this year, blast fu rn aces produced 6,246,095 tons, 511,353 tons m ore than in the com parable period last year. Increased blast fu rn ace activity has re duced ore stocks at fu rn aces and on Lake E rie dock s to 27.772.000 tons on July 31, the low est fo r this tim e o f year since 1929. This occu rred despite the fa ct that 4,300.000 tons o f ore w ere shipped dow n the Great Lakes in the m onth. Lake boats in service rose from 69 to 185 in the m onth and com pared w ith 17 a year ago. A 28 per cent gain in steel in got production in July lifted the daily average to 128,152 g ross tons, the h igh est since June, 19 30. A July increase not on ly is contrary to the custom ary seasonal trend, but in this instance follow s the 34 per cent gain in June over May. T otal ou t put fo r the m onth w^as 3,203,810 ton s; the steelw orks rate was 58.9 per cent. The cou n try so fa r this year probably has produced m ore steel in gots than in all 19 32 ; THE M ONTHLY BUSINESS R E V IE W for the first seven m onths 12,193,002 tons, w ithin 1,129,831 tons o f the preceding tw elve. The m ore recent declin in g trend, m anifest to som e ex tent in the United States Steel C orp ora tion ’s unfilled o r ders, w hich, after m ovin g up three con secu tive m onths, dropped 86,546 tons, or fou r per cent, to 2,020,123 tons on Ju ly 31, was due in part to can cellation o f contracts b ook ed at low er prices and not fu lly specified as required by A ugust 1. As a result, figures now m ore nearly rep resent orders o f actual consum er dem and. Tonnage since written into new contracts, replacin g the old in m any in stances, exceeds the am ounts canceled. Coal The coal strike in w estern Pennsylvania in early A ugust was m ost severely felt in the vicinity o f C on n ellsville and, al though m ine output was som ew hat affected by curtailm en t in this center w hich produces a large v olu m e o f coal used fo r coke production, output in July fo r all m ines in the district was up m ore than seasonally from June. The 13,005,000 tons produced in Ju ly in this district was an increase o f 106 per cent from the correspon din g period o f 1932 and fo r the year-to-date a gain o f 18 per cent was reported. P rodu ction by m id-A u gu st had im proved to such an extent that it exceeded the correspon din g period o f 19 31 and closely approxim ated that o f 1930. The gain in the latest m onth at loca l m ines was somewrhat greater than that show n fo r the entire coun try. The strike proved to be o f sh ort du ration and caused an in crease in production in som e fields n ot affected by the disturbance, so that total ou tpu t was on ly sligh tly a f fected. Coal prices have increased som ew hat and cok e qu otation s are up 50c a ton from the low point tou ched earlier this year. A lth ou g h som e in creased bu ying was reported in July, coal stocks continu ed about 12 per cent below a year ago. They are low er at the present time than since 1920. A considerable part o f the increased activity in the fou rth district m ines represented larger shipm ents o f coal from L ake E rie ports. In July they w ere up 8 3 per cent from the sam e m onth a year ago and fo r the year-to-date a gain o f 50 per cent in the am ount o f coal shipped to upper Lake ports was show n. E m ploym ent and the num ber o f hours w ork ed in m ost sections increased in J u ly in keepin g w ith the expansion in production. A u tom obiles W ith retail au tom obile sales in the en tire cou n try tou ch in g new h igh levels fo r the year in early A ugust, accordin g to prelim inary reports, operations in the assem bly indus try have been w ell m aintained in the past fo u r w eeks, th ou gh the Annalist seasonally ad ju sted w eekly index was dow n sligh tly in m id-A u gu st from its peak. In the latest week, according to Cram's figures, approxim ately 54,000 cars w ere m anufactured, com pared w ith 21,000 cars in the correspon din g period o f 1932, and ju d g in g from pres ent indications, A u gust assem blies w ill closely approxi m ate those o f July. A ccord in g to the D epartm ent o f C om m erce, 238,088 cars and trucks w ere assem bled in July, com pared w ith 109,143 in July, 1932, a gain o f 114 per cent. Compared with June there was a decline in assemblies o f eight per 3 cent, but this was much less than seasonal and the F ed eral R eserve B o a rd ’s ad ju sted index advanced from 6 6 to 70 per cent o f the 1923-1925 m on th ly average. Out put in July was the highest for that month since 1930. The gains from a year ago in recent months have been unusually large and the cum ulative production figures fo r the first seven m onths o f this year now exceed the correspon din g period o f 1932 by 26.5 per cent. In the latest m onth passenger car produ ction was up 106 per cent from a year ago, w hile truck production was up 162 per cent. In the seven-m onth period the gains in both grou ps w ere approxim ately the sam e. W h ile the im provem en t in recen t m onths has been quite general, the report o f produ ction by price classes for the first six m onths o f the year show s that the increase in output was confined to cheaper cars. O utput o f cars w hich w holesale at less than $500 was up 56 per cent in the first h a lf year from the sam e period o f 1932, w hile all other groups show ed losses ran gin g from seven per cent in the $1,500 to $2,000 class, to 70 per cent in the $750 to $1,000 class. Operations at autom obile parts and accessory concerns and steel companies supplying raw m aterials to the auto m obile industry located in this district continu ed at fa ir ly satisfactory levels in m id-A u gu st, though specifications w ere sligh tly low er than in July. New passenger car registrations in Ohio and western Pennsylvania in July w ere approxim ately tw o and oneh a lf tim es w hat they w ere a year ago. Sales in this district have show n a very m arked im provem en t in re cent m onths. T ires, R u b b er C onditions having little con n ection w ith the tire industry, as such, in the past year have caused erratic m ovem en ts in produ ction schedules. In June, 1932, tire ou tpu t was increased sharply p rior to the enactm ent o f the excise tax on tires. In May and June this year p rodu ction sched ules w ere expanded as a result o f greater dealer and consum er demand w hich preceded the price increase a n nouncements. Dealer stocks, w hich were unusually low this spring wrere replenished in part and stocks of finished tires held by m anufacturers on June 30 were lim ited for that tim e o f year, but 32 per cent h igh er than in m id1932, w hen stocks dropped to record low levels. Tire production in June, according to the R ubber Manu factu rers A ssociation figures which represent 80 per cent o f the entire industry, was 8.1 per cent above the peak tou ched last year in June and up 17 per cent from May. Shipments increased 22 per cent from May to June, but w ere 37 per cent below last year when they assumed record proportion s. July operations, according to reports, made a very fav orable show ing, com pared w ith last year, bu t at that tim e a slum p in p rodu ction developed follow in g the h eavy pro duction in June, 1932. Some falling-off in output and sales was reported in A ugust, partly seasonal, bu t em ploy m ent and the num ber o f m an-hours w ork ed in both July and A u gust w ere m uch above a year ago. A t 20 con cerns reportin g to the Ohio State Bureau o f Business R e search, em ploym ent in July was 22 per cent above last year, but on ly 78 per cent o f the 1926 m on th ly average. 4. THE M ONTHLY BUSINESS R E V IE W In ven tories o f cru de rubber and cotton fabrics in hands o f m anu factu rers have been reduced sharply in the past three months, and on July 31 crude rubber stocks totaled 326,609 tons, compared with 333,954 tons on June 30 and 396,000 tons, the peak tou ched on March 31, 1933. Im ports of crude rubber in July were 44,290 tons, a sharp increase from the same month of 1932 and earlier m onths o f this year, but for the year-to-date im ports w ere 22 per cent sm aller than in the correspon din g period of 1932. Crude rubber consum ption in July was 50,18 i lon g tons, a gain from the same period o f 19 32 o f 67 per cent. The third increase in tire prices— ten per cent— -in nine ty days became effective on July 26 and prices now are about equal to those prevailing a year ago. The total gai n since May 1 was about 27 per cent. A t the same time cru de rubber prices have advanced from a low o f less than three cents a pound to about nine cents, and raw cotton has alm ost dou bled in price. C loth ing A ctivity at 40 cloth in g and textile plants in the fou rth district increased sligh tly in July, w hereas in most years there is a fa llin g-off in operations in that month. Com pared with a year ago, the num ber employed in July was up 38 per cent and was three per cent greater than the m on th ly average o f 1926. F u rther im provem en t in em ploym en t occu rred in A u gust follow in g the adoption oi the N R A code by the cloth in g and textile industry ?.nd pay rolls have show n a correspon din g increase. In ventories o f raw m aterials in hands o f cloth in g m anu factu rers have expanded substantially in the past two m onths, but the increase in advance orders m ade it nec essary fo r them to m aintain m uch larger stocks than w ere on hand a year ago. R aw m aterial prices have show n a sharp advance and it is estim ated by reportin g firms that the high er costs w ill necessitate a substantial increase in retail cloth in g prices. M uch o f the upturn in bu ying reported recen tly on the part o f retailers is felt to be the results o f a m ovem ent to cover fu tu re com m itm en ts b efore price ad vances becam e effective. R etail cloth in g sales, h ow ever, have show n a decided im provem en t, and at departm ent stores in this d istrict w om en ’s cloth in g sales in July w ere 6.4 per cent la rg er than a year ago, w hile the dollar value of men’s clothing sales was ab ou t equal to that reported in July, 1932. Other Manufacturing M ost o f the sm aller industries operatin g in the fou rth district continu ed to expand operations in July, alth ough that month usually is one of the dullest of the year. In the first part o f A ugust, ju d g in g from reports, som e slackening occu rred , partly as a result o f uncer tainties w hich developed in the general situation. On the w hole, how ever, operations are m uch above a year ago and in some cases are equal to levels prevailing in 1931 or earlier. Automobile part£ and Accessories. W ith the au tom obile assem bling industry fa irly active in A ugust, parts and ac cessory concern s in this d istrict w ere operating in late July and the first h a lf o f A u gust at fairly high levels, com pared with earlier m onths o f this year and a year ago at this time. Em ploym ent in July at 40 reportin g con cern s was up 2.9 per cent from June, w hereas the five-year av erage Ju n e-to-Ju ly change was a drop o f 5.5 per cent. C om pared w ith a year ago the num ber em ployed was up 32.8 per cent and fu rther gains have been reported in em p loy ment since the adoption o f the N R A blanket code on A ugust 1. P artly due to the threat o f m odel changes w hich a l ways con fron ts the au tom obile industry, parts m akers have not increased raw m aterial in ven tories to any ex tent in the past tw o or th ree m onths. B rick an d T ile. Ju dgin g by em ploym ent reports from 2 6 concern s in Ohio, operations at brick and tile factories expanded sharply in July, con tra ry to the trend o f past years. Plant operations, how ever, continu e at very low levels and the num ber em ployed on the latest date was still 18 per cent below a year ago. China, P ottery. A ccord in g to reports, there has been little m ore than a norm al expansion in raw m aterial in ventories at china and pottery plants. Com pared with a year ago the num ber em ployed in this district was up 70 per cent in July, but in the latest m onth there was a drop o f two per cent reported from June; this compared very fav orably with a five-year average drop o f 11 per cent for this period. In addition to the greater num ber o f em ployees, there has been a decided in crease in the num ber o f hours w ork ed both o f w hich have contributed their share to the la rger pay rolls reported. E lectrica l Supplies. F u rth er im provem en t in the elec trical m achinery, apparatus and supply in du stry was re ported in July and the first part of August. The num ber of orders received recently was greater than a year ago and the average value o f these orders also has increased. An expansion in raw m aterial in ven tories in the past three m onths has occu rred, som e purchasing h aving been done in an ticipation o f advancing prices, th ou gh this con dition apparently is not general. At 30 Ohio factories em p loy m ent was up 4 7 per cent in July from a year ago. Glass. Plate glass production in Ju ly in the entire coun try was 11,250,000 square feet, the h igh est since May, 1 9 30, and com pared with 2,734,000 square feet in July, 1932. A ctivity in all branches of the glass indus try is considerably above last year and em p loym ent is m ore than double what it was a year ago. In ad dition to this there has been a decided increase in the number of hours w orked. R ecen tly there has been an expansion in the demand for table and domestic glassware, but in midA ugust there was a fa llin g-off in orders fo r plate and rolled glass. A m odest increase in raw m aterial in ven tories was gen erally reported, not so much in an ticipa tion o f rising prices as in expectation o f greater p rodu c tion. M achinery. C ontrary to the trend o f past years em ploym ent increased in July and was about 20 per cent above a year ago. The volum e o f new business reported fell off som ew hat in the latter part o f A u gust, bu t op erations continu e m uch above last year, the increase be ing reflected in the num ber o f m an-hours w orked and the larger pay rolls. In ven tories o f raw m aterials have in creased som ew hat, but correspon den ts say this is chiefly in accord w ith the greater consum er dem and. TH E M ONTHLY BUSINESS R E V IE W Paint. Paint sales continu ed to im prove in iate July, but there was a noticeable slackening in the volume o f orders received in early August. Sharply advancing prices in raw paint m aterials caused m anu factu rers to increase their stocks. Paper, B o x b o a rd . A m oderate im provem en t in the paper and boxboard industry was reported in late July and m ost m ills in this section w ere operating in m idA ugust at capacity levels. In ven tories o f raw m aterials have not increased and there is an acute shortage o f waste paper m aterials. In July, em ploym ent at paper concerns was about 95 per cent o f the 1926 m on th ly average and a fu rther im p ro v e m e n t occu rred in A ugust follow in g the adoption o f the N R A code. Shoes. Shoe production at fou rth district plants in July was 55.5 per cent above a year ago and in the first seven m onths a gain o f 28 per cent was reported. A lth ou gh p roduction o f sum m er shoes was rapid ly draw ing to a close, orders were still being received in good volume. Many factories rep ort an ov er-sold con dition and quality stocks wrere attractin g m ore attention than fo r som e time. Raw m aterial in ven tories have in creased in the past three months, the advance being prompted partly by the sharp increase in hide and leather prices. On the latest date hides w ere qu oted at 15c a pound, the same as a year ago, compared with a low of 4 14 e earlier this year TRADE R etail A fter a llow in g fo r the fact that depart ment store sales usually decline from June to July, there was an im provement in re tail bu ying in the latest m onth in the fou rth district. D olla r value o f sales was 12 per cent larger than a year ago and the ad ju sted index increased from 62 to 64 per cent o f the 1923-1925 m on th ly average. Part o f the rise in dolla r sales reflected h igh er retail prices, the advance from June, according to F airchild’s retail price index, be ing 5.2 per cent. The increase in curren t prices from the low o f April, ju d g in g by this index, was 9.6 per cent, but on the latest date retail prices mere 2.8 per cent h igh er than in July, 1932. Gains w ere reported in July com pared with a year ago in all but 18 o f the 52 im portan t departm ents fo r which separate figures are available at 60 reporting stores in this district. The increases w ere unusually large in all housefurnish in g departm ents, fu rn itu re sales at depart ment stores being up 104 per cent and electrical appli ance sales being up 135 per cent from last year. A t 44 reportin g fu rn itu re stores, J uly sales w ere 71 per cent larger than a year ago. W om en ’s and m isses’ apparel sales w ere up about six per cent, abou t h a lf o f w hich rep resented higher prices. Sales of linens and dom estics were up over 40 per cent and yard g ood s sales increased six per cent from last year. A greater percentage o f total sales in Ju ly w ere charge purchases than a year ago, installm ent sales am ounting to 8.1 per cent o f total sales, w hereas last year they am ounted to on ly 3.8 per cent o f the total volum e. R egu lar 30-day sales w ere sligh tly sm aller than a year ago. D epartm ent store buyers increased their stock s sligh t ly in July, contrary to the seasonal trend, and the ad 5 ju sted index advanced from 51.4 to 55.7 per cent o f the 1923-1925 m onthly average. C ollection s in July, as a per cent o f accoun ts receivab le at the end o f June, im proved som ew hat from last year. W h olesale A con tra ry to seasonal increase in w holesale trade was show n in all fou r reportin g lines in Ju ly and aggregate sales were up 21 per cent from a year ago. W h olesa le dry goods sales increased 26 per cent from June and w ere 154 per cent larger than a year ago. This spec tacular gain resulted in a 7.5 per cent increase in sales volum e being show n fo r the first seven m onths o f this year. H ardw are sales w ere 40 per cent la rg er than a year ago in July, but w ere dow n 4.5 per cent in the first seven m onths. D rug sales w ere sligh tly la rg er in July than last year, but in the seven-m onth period a declin e in dollar volum e o f 17 per cent was reported. W h olesa le grocery sales were smaller in July than in June, but, com pared w ith a year ago, a gain o f seven per cent was show^n by the reportin g firms. F o r the year-to-date a reduction o f 8.8 per cent was show n in dolla r sales. BUILDING A lth ou gh there was a rather sharp fa llin g -off in the total volu m e o f bu ildin g contracts aw arded in the fou rth district in July, the valu e o f residential contracts reported held up fa irly w ell. W ith a total value o f $2,098,000, residential contracts aw arded w ere 50 per cent high er than in July, 1932, and the loss in the first seven m onths in residen tial b u ildin g was on ly 15 per cent. Con trasted w ith this, total bu ild in g was dow n 46 per cent in both July and the first seven m onths. The greater part o f the reduction in both periods was due to the de cline in pu blic w orks awards. C ontracts fo r pu blic w orks in this section in the first seven m onths w^ere valu ed at less than $9,000,000, w hereas in the same period o f 19 32 they totaled a b ou t $38,000,000. A fu rther increase in contem plated bu ildin g, exclu d in g public w orks and u tilities, wras reported in Ju ly and the total value, approxim atin g $1 5,00 0,00 0, was nearly three tim es as great as a year ago. C on siderable lag, h ow ever, in these contem plated projects reachin g the con tract stage is apparent. So far as bu ildin g supplies are con cern ed, a rather sharp increase in in ven tories has occu rred in the past tw o or three m onths. D ealers in m ost cases partly replaced very depleted stocks, largely because o f the fear o f h igh er prices, but these m aterials are bein g purchased by con tractors and consum ers on ly in lim ited quantities at the present time. AGRICULTURE A bnorm al tem peratures and a less-than-average am ount o f rainfall in m ost sections in Ju ly caused the con dition o f g row in g crops to declin e fu rther in this d istrict and m ost parts o f the cou n try in July and the first half o f A ugust. This follow ed adverse con dition s in June and the drou gh t this season has affected a la rg er area than in 1930. A ll grain crops are expected to be v ery sm all and the drop, a ccord in g to the D epartm ent of Agricul- 6 TH E M ONTHLY BUSINESS R E V IE W tare, w ill m ore than offset the large carryover o f such products on farm s and elsew here. C ou n teractin g to som e extent the effect o f crop failure on farm in com e, agricu ltu ral prices advanced 12 points, or about 19 per cent in July, a gain n ot equalled since 1917. Som e reaction occu rred in the last part o f that m onth, but prices in m id-A u gu st w ere still 22 per cent above a year ago alth ough they w ere on ly 72 per cent o f the pre-w ar average. M ost o f the gain wras fou n d in the grain and cotton grou ps, the form er in m id-A u gu st be ing 88 per cent above last year, w hereas cotton prices w ere up 39 per cent. The gain in farm prices has been m uch m ore rapid than in all prices and the ratio o f prices received fo r g oods to prices paid fo r articles farm ers buy wTas 72 in Ju ly com pared writh 62 in June and 53 per cent o f the pre-w ar level a year ago. In Ohio, estim ated gross cash in com e from the S tate’s principal farm products was up 37 per cent in July, from a year ago, th ou gh in the tw elve m onths ended A u gust 1, a reduction o f ten per cent from the preceding period was reported. The fo llo w in g table show s estim ated produ ction o f prin cipal crops o f the entire cou n try and the fou rth district based on the A u gust 1 con d ition , com pared w ith the av erage harvest in the eight years 19 25-1932. On the basis o f these six crops, 1933 yields, both in this d istrict and the entire cou n try are in dicated to be about 80 per cent o f the average o f the precedin g eight years. Corn, bu........... Wheat, bu........ Oats, bu............. Hay, tons ........ Tobacco, lbs. ... Potatoes, bu. ... ESTIMATED CROP PRODUCTION (000 omitted) -------Fourth District------------------------ United States---------1933 % 1933 1933 % 1933 (based on 1925-32 of 8- (based on 1925-32 of 8August 1 average year August 1 average year condition) harvest average condition) harvest average 85.7 2,653,442 72.0 2,273,019 173,928 125,297 60.6 824,737 499,671 35,836 105.9 37,941 54.9 666,745 1,214,121 81,846 44.2 36,162 92.2 70,431 64,910 71.2 5,530 3,940 93.9 137,921 90.0 1,299,154 1,383,160 124,112 83.2 351,927 292,668 19,692 72.8 14,330 W h eat. The y ield o f w in ter w heat turned ou t to be sligh tly less than was in dicated last m onth, but con sid er in g the fact that in m any sections o f the cou n try the crop was alm ost a total fa ilu re this year the harvest o f fou rth d istrict farm s com pares very fav orably w ith pre cedin g periods. It w as six per cen t la rger than the av WHEAT PRODUCTION MILLIONS OF BU SH ELS FOURTH D ISTR IC T 601------------------ 0 1921 1922 1923 1924 1325 1926 1927 1928 1929 1930 1931 1932 1933 *August 1 production estimate. erage harvest o f the eigh t years 1925-1932, w hereas in the entire coun try this y ea r’s crop was estim ated to be on ly three-fifths as large as the eight-year average. A cre age yields ranged from 12 bushels in K en tu ck y to 18 and 19 bushels in P en nsylvania and Ohio, all yields being la rg er than average. In the entire cou n try the y ield was on ly 12.7 bushels an acre. Ohio ranged secon d in the p ro du ction o f w heat am ong the states o f the cou n try, being surpassed on ly by Kansas, w here the crop w as ab ou t onethird sm aller than usual. C oncerning w orld w heat crop prospects, in dication s are that E u rope w ill harvest the largest crop on record, and in 38 foreig n coun tries, w~hich last year produ ced 64 per cent o f the N orth ern H em isphere w heat crop, exclu sive o f R ussia and China, the crop is expected to be about 60.000.000 bushels la rg er than the 1932 harvest. Oats. E stim ated oat p rodu ction was fu rth er reduced by ov er 2,000,000 bushels in this d istrict in A u gu st and the crop gen erally is the poorest on record. It is less than h a lf as large as the average harvest o f the eight years 1925 -193 2, wrhile in the entire cou n try it was 55 per cent o f this sam e average. A s it becam e apparent that the crop w ould be very sm all oat prices increased sharply and in m id-A u gu st they w ere qu oted at 45 cents a bushel, com pared w ith about 18 cents a year ago. Corn. A t the critical stage o f its growling period, the corn crop in m ost sections o f the district w as very ad versely affected by the dearth o f rain, and the estim ated crop on A u gust 1 w as 29 per cen t sm aller than the eigh tyear-average harvest. F u rth er dam age occu rred in A u gust. The crop was in w orse con dition in the northern part o f the district than in southern counties. In the en tire cou n try the corn crop is estim ated to be a b ou t 15 per cent sm aller than the average harvest o f 1925-1932. P ota toes. F u rth er declin es in the con d ition o f the late potato crop in July reduced the estim ated y ield to 27 per cent below the eigh t-yea r average harvest in the fou rth district. In the entire cou n try this y ea r’s crop w as expected to be 17 per cent sm aller than the eigh t-year average crop. C onsiderable dry rot fo llo w in g planting caused p oor stands gen erally and rain is v ery m uch needed in m ost sections. T oba cco. W ith w eather con d ition s som ew h at m ore fa v orable in the southern part o f the d istrict than elsew here, the estim ate o f the tob a cco crop wras raised sligh tly in Ju ly and a gain o f tw o per cent w as show n from last year's harvest. Com pared w ith the average o f the eight years 1925-1932, a red u ction o f about ten per cen t w as foreca st. These estim ates, h ow ever, m ake n o allow an ce fo r acreage to be rem oved under the A g ricu ltu ra l A d ju stm en t Act. P rodu ction o f bu rley tob a cco this year is expected to be 380.000.000 pounds, ju d g in g by the A u gust 1 con d ition , com pared w ith 31 2,00 0,00 0 pounds produced in 1932. A ccord in g to the latest reports from K en tu ck y, the bu rley crop is in excellent c o n d itio n ; it has grow n fast and som e cuttin g has been done. P rod u ction o f M iam i ciga r-filler tob a cco is expected to be 11 ,931,000 pounds this season, a sizeable reduction from the 21,674,000 pounds harvested in 1932. The A u gust 1 con d ition was 38 per cent o f estim ated n orm al, THU MONTHLY BUSINESS REVIEW com pared w ith 64 per cent a year ago. A n acreage re du ction plan is now being put in to effect w hereby 50 per cent o f the present crop is bein g p low ed under in an e f fort to reduce the huge stocks o f ciga r tob acco on hand. It is estim ated that stocks o f ciga r tob a cco are about six tim es the annual consum ption . W ith average yields and a 50 per cent acreage redu ction it is estim ated that total supply at the start o f the sellin g season w ou ld be about fou r per cent less than a year ago. F ru its. F o r the en tire cou n try the 1933 tree fru it crop is expected to be about ten per cen t b elow the average o f recen t years. In the fou rth d istrict the declin e is som ew hat la rger than that, based on th e A u gust 1 con dition report. A pples in O hio and Pennsylvania had an A u gust 1 con dition o f 31 and 43 per cent, respectively, com pared w ith a ten-year average o f 42 and 48. In K en tu ck y and W est V irg in ia con dition s w ere som ewhat better. C onsiderable sh rin kage in the grape crop was caused by w ind, d rou gh t and heat in July, and indicated yields are below the average o f past years and 1932. 7 Wholesale and Retail Trade (1933 compared with 1932) Percentage Increase or Decrease SALES SALES STOCKS July, First 7 July, 1933 months 1933 D EPARTM ENT STORES (48) Toledo.......................................................... + 3 8 .3 — 0.3 + 3 2 .1 — 0.3 + 4 .4 + 9.8 + 1 1 .9 + 1 0 .0 + 1 2 .1 — 6.1 — 12.8 — 6 .4 — 15.9 — 14.8 — 13.9 — 12.5 — 14.7 — 12.3 — 2.2 — 15.6 — 14.7 — 12.6 — 7.9 — 10.1 — 7.9 — 19.5 — 11.1 — 7.1 + 0 .9 — 1.7 — 16.5 — 28.2 — 24.4 — 13.4 — 30.5 — 24.8 W EARING APPAREL (11) FURNITURE (44) + 3 1 .8 + 8 9 .3 + 5 4 .5 + 1 9 .8 + 1 1 0 .3 +105.1 + 7 0 .6 CHAIN STORES* Drugs— District (4)................................. Groceries— District (S')........................... WHOLESALE GROCERIES (33) WHOLESALE DRY GOODS (10)... WHOLESALE DRUGS (13)............... WHOLESALE HARDW ARE (1 4 ),.. *Per individual unit operated. — 6.3 + 4.1 __ 4.6 — 15.4 — 11.8 + 0 .2 2.9 _ — 5 .4 + 1 5 .7 — 15.0 — 1.9 + 9 .0 + 2 .4 — 18.1 + 1 3 .1 — 6.5 + 1 7 .5 + 7.1 + 154.1 + 0 .8 + 4 0 .1 — 10.5 — 8.6 — 21.0 + 4.0 — 23.6 — 3.5 — 8.8 + 7.5 — 17.2 — 4. 5 —is! i + 2 3 .5 Debits to Individual Accounts (Thousands of Dollars) Fourth District Business Statistics (000 omitted) Fourth District Unless Otherwise Specified Bank Debits— 24 cities............. $ Savings Deposits— end of month: 41 banks, O. & Penna.............$ Life Insurance Sales: $ Ohio and Penna............. Retail Sales: Department Stores— 48 firms.# Wearing Apparel— 11 firm s...$ Furniture— 44 firms.................$ Wholesale Sales: Drugs— 13 firms. ......................$ Dry Goods— 10 firms.............. $ Groceries— 33 firms................. $ Hardware— 14 firms................ $ Building Contracts— Residential...............................$ Building Contracts— Total.. . .$ Commercial Failures— Liabilities................................. $ Commercial Failures. ..Number Production: Pig Iron, U. S.....................Ton8 Steel Ingots, U. S............ Tons Automobiles— Pass. Car.U. S. ” Trucks . . . . U. S. Bituminous C o a l.............Tons Cement— O., W. Pa., W. Va. ........................................ Bbls. Electric Power— O., Pa., Ky. ........................................ k.w.h. Petroleum— 0 ., Pa., Ky..Bbls. Shoes ................................ Pairs Tires, U. S............ .. Casings Bituminous Coal Shipments: Lake Erie Ports...............Tons Iron Ore Receipts: Lake Erie Ports..............Tons 1not available 3June '^confidential Jan ■July, 1933 9,864,000 change from 1932 — 16.5 2.1 501,169 — 15.1 + 1 2 .1 80,849 3,893 3,247 — 12. 3 — 24.4 — 2 .9 1,263 + 154.1 3,420 + 7.1 1,087 + 4 0 .1 7,101 5,969 21,323 5,949 -—17.2 + 7.5 — 8.8 — 4.5 2,098 6,724 + 4 9 .8 — 46.3 11,778 40,382 — 14.9 — 46.0 2,668 — 66.1 — 45.8 36,695 — 33.3 1,1832 — 33.1 July, 1933 1,636,000 622,797 71,264 10,332 429 498 change from 1932 + 2.8 — 6 .7 — 1. 8 + 7 0 .5 1,011 + 0.8 110» 1,819 + 2 1 8 .0 3,203 + 2 9 6 .9 195,0232+105.9 38,065 + 1 6 3 .6 13,005 + 1 0 5 .9 6,258 12,193 1,044,257 195,941 71,130 + 9 .0 + 4 3 .4 + 2 6 .4 + 2 6 .8 + 1 7 .7 1,063 + 8 2 .6 3,235 + 1 9 .4 1,115s 1,725* 3 4,8808 + 1 6 .0 — 16.9 + 5 5 .5 + 8.1 5,870* 10,239* & 16,837* — 3.0 — 13.5 + 2 8 .1 — 12.6 + 8 3 .4 13,595 + 5 0 .4 5,369 3,826 + 5 1 1 .2 2,843 + 5 0 4 .9 3actual number ^first six months 5 weeks ending Aug. 23, 1933 Akron................. 38,962 6,951 24,676 Cincinnati......... .. 269,647 459,472 105,742 44,586 20,011 2,680 Greensburg. . . . 4,037 8,128 1,941 15,480 6,245 2,850 Middletown... . 7,156 7,151 611,488 11,825 Steubenville.. . . 5,836 94,084 6,074 32,011 Youngstown. . . 35,913 6,022 1,828,968 Year-to-date Year-to-date % change Dec. 29, 1932 Dec. 31, 1931 from to to 1932 Aug. 23, 1933 Aug. 24, 1932 251,527 419,119 — 23.8 + 1 3 .3 46,116 50,282 141,458 148,096 + 3 0 .5 + 9 .4 2,037,493 1,778,339 + 9 .8 3,484,275 2,721,791 + 8.4 694,755 806,460 — 4 .8 299,363 368,029 — 5.5 125,990 177,057 no change 23,308 17,089 — 15.5 30,042 44,258 + 1 0 .3 50,432 64,318 19,308 — 16.4 12,682 + 1 9 .2 119,063 133,371 65,383 — 26.8 44,696 — 8 .6 17,532 25,374 + 2 8 .8 44,593 47,297 73,645 — 19.8 46,938 + 1 4 .9 4,007,481 4,346,838 — 0.1 77,434 97,848 43,694 + 1 9 .2 34,836 + 16.9 549,461 621,049 + 3 8 .3 36,458 36,059 + 1 4 .7 205,769 221,732 + 4 3 .8 190,232 220,751 47,144 + 3 .7 40,302 + 1 0 .5 11,583,980 13,622,587 % change from 1932 — 40.0 — 8.3 — 4 .5 — 12.7 — 21.9 — 13.9 — 18.7 — 28.8 — 26 .7 — 32.1 — 21.6 — 34.3 — 10.7 — 31.6 — 30.9 — 5.7 — 36.3 — 7.8 — 20.9 — 20.3 — 11.5 — 1.1 — 7.2 — 13.8 — 14.5 — 15.0 Fourth District Business Indexes (1923-1925 = 100) July, July, July, July, July, 1933 1932 1931 1930 1929 143 Bank Debits (24 cities)........................................ 60 59 91 122 Commercial Failures (Number)........................ 105 115 98 75 139 '* ” (Liabilities)..................... 55 45 61 179 146 Postal Receipts (9 cities)..................................... 113 96 103 Sales— Life Insurance (Ohio & Pa.).................. 87 105 134 134 85 ” — Department Stores (47 stores).............. 63 79 69 48 41 ” — Wholesale Drugs (12 firms)................... 96 109 68 66 91 ” — ” Dry Goods (10 firms).............. 52 20 39 52 72 ” — ” Groceries (33 firms)................. 77 89 100 59 55 ” — ” Hardware (14 firms)................ 73 98 56 40 62 ” — ” All (69)........................................ 80 96 59 47 69 87 91 ” — Chain Drugs (3 firms)**......................... 69 73 87 Building Contracts (Total)................................. 101 126 14 26 57 ** ” (Residential).............. .. 30 12 8 55 85 Production-—Coal (O., W. Pa., E. K y .) .. . . 36 70 83 96 72 126 164 178 88 — Cement (O., W. Pa., W. V a .).. . 48 124 134 144 133 ” — Elec. Power (O., Pa., Ky.)*".'. .. 114 101 112 124 93 112 ” — Petroleum (0 ., Pa., K y.)*.......... 103 91 ■89 102 69 ” . ~r-Shoes.............................................. .. *June **Per individual unit operated s THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Federal Reserve Board Index of industrial production, adjusted for sea* sonal variation <1923-1925 = 100). Latest figure. July, preliminary, 98. Indexes of factory employment and pay rolls, without adjustment for seasonal variation (19231925 = 100). Latest figure, July, employment, €8.9; pay rolls, 49.9. Indexes based on three-month moving averages of F. W. Dodge data for 3? eastern states, ad justed for seasonal variations (1923-1925 — 100). Latest figure, July, total, 22; residential, 13. •<UJ0K$ or oou or 00U-AK6 MEMBER B/INK CREDIT Investm ents/ AH Othe? Loans Lrwns on Securities »S$ Wednesday figures for reporting member banks In 90 cities. Latest figures are for Wednesday. August 10. Industrial production increased further from June to July, contrary to seasonal tendency, and in recent weeks has continued at a relatively high level. Since the middle of July there have been reductions in wholesale prices of leading raw materials while prices of many other products have advanced. Production and Employment Volume of industrial output, as measured by the Board’s seasonally adjusted index, advanced from 01 per cent of the 1923-1925 average in June to 98 per cent in July, which compares with 60 per cent in March. The principal increase in July was at steel plants where activity advanced from 46 per cent of capacity to 59 per cent. Production in the lumber and coal industries was also in larger volume and daily average output of auto mobiles showed none of the usual seasonal decline. Output at shoe factories and woolen mills continued at an unusually high rate while consumption of cotton by domestic mills decreased somewhat. Cigarette production de clined sharply from the high level of May and June. Since the middle of July a decrease has been reported in the output of steel. Working forces and pay rolls at factories increased considerably between the middle of June and the middle of July. As in other recent months the largest increases were generally at establishments fabricating raw materials into semifinished products. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a decline in July followed by an increase in the first half of August. Total awards during the six weeks were in about the same volume as in the preceding six weeks and in larger volume than in earlier periods this year. Department of Agriculture estimates as of August 1 indicate harvests generally smaller than a year ago. The cotton crop is forecast at 12,314,000 bales, a reduction of 700,000 bales from last season, reflecting curtailment in acreage as a part of the program of the Agricultural Adjustment Adminis tration, offset in large part by an unusually high yield per acre. The wheat crop is estimated at 500,000,000 bushels, a reduction of 225,000,000 bushels from last year's small harvest, and food crops are expected to be unusually small. Distribution Freight traffic increased further from June to July by a substantial amount, but in recent weeks shipments, particularly of miscellaneous freight and grains, have been somewhat smaller. Department stbre sales declined in July by about the usual seasonal amount; they were larger than a year ago, however, and trade reports for the first half of August indicate an increase in sales. Wholesale Prices Wholesale prices of commodities increased further during the first three weeks of July and according to the Index of the Bureau of Labor Statistics, there has been little change in their general levels since that time. Prices of grains, cotton and many imported raw materials, however, were considerably lower in the third week of August than in the middle of July, while prices of textiles were higher, reflecting in part the application of the processing tax on cotton. Prices of leather and coal also advanced during tbis period. Foreign Exchange In the exchange market the value of the dollar in terms of the French franc advanced from a low of 69 per cent of its gold parity on July 18 to 75 per cent at the beginning of August and since that time has fluctuated between 73 and 75 per cent. Bank Credit Net demand deposits of weekly reporting member banks in 90 cities declined between the middle of July and the middle of August, owing in large part to further withdrawals of bankers’ balances from banks in New York City and elsewhere. The banks’ loans decreased by $71,000,000 during the period, reflecting chiefly a reduction in loans to brokers and dealers in securities. Their holdings of United States Government securities, after declining between July 19 and August 9 increased during the week ending August 16 in connection with Treasury financing at that time. Total reserves of all member banks increased by $81,000,000 during the four-week period ending August 16, reflecting chiefly the purchase of $42,000,000 of United States Government securities by the reserve banks and a return of $23,000,000 of currency from circulation. The growth in member bank reserves, occurring at a time when reserve requirements were being reduced in consequence of a decline in their deposits, brought their excess reserves to a level above $550,000,000. Money rates in the open market generally continued at low levels.
@FedFRASER