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MONTHLY BUSINESS REVIEW Covering financial, industrial, and agricultural conditions in the Fourth Federal Reserve District Federal Reserve Bank o f Cleveland Vol. 16 Cleveland, Ohio, September 29, 1934 Business activity in the fou rth district in the third w eek o f Septem ber was at a low level fo r this season o f the year and was little changed from the precedin g m onth, at w hich tim e, after allow in g fo r seasonal varia tions, operations dropped to the low est poin t o f the year. A sligh t seasonal increase in activity at som e plants was reported in m id-Septem ber, but no general upw ard sw ing w as evident. The recession in A u gu st was prim arily due to a sharp curtailm en t in iron and steel produ ction , th ou gh greater-than -seasonal declin es in au tom obile ou t put, coal m ining, carloadin gs and in som e o f the less im portant industries contributed to the falling-olT. E m ploym ent at loca l m anu factu ring concern s d e clined sligh tly in A u gust from J u ly ; the fallin g-off, h ow ever, was less than, the average curtailm en t in the pre cedin g five years. Com pared w ith a year ago A u gust em ploym ent was still up eight per cent, but the average increase fo r the year to date from the correspon din g period o f 1933 was 29 per cent. D espite the reduction in in dustrial produ ction in A u gust, retail and w holesale trade show ed a con siderably g reater-than -seasonal increase. T h e index o f dolla r sales at rep ortin g departm ent stores in the fou rth district rose from 67.7 per cent o f the 1923-25 m on th ly average to 71.2 per cent. Com pared w ith a year ago dollar sales w ere dow n tw o per cent in A ugust, despite the fa ct that retail prices are h igh er now than in 1933. A gain in sales was show n in m ost o f the sm aller cities o f the dis trict, but reductions in large indu strial centers m ore than offset the im provem en t. D ollar sales o f all reportin g w holesale lines averaged 66 per cent o f the 1923-25 base period com pared w ith 58 in Ju ly and 61 per cent in A ugust, 1933. A u gust sales w ere la rger than in any corresp on d in g m onth since 1930. The num ber o f com m ercial failu res in A u gust in the fou rth district w as 43 per cent under the correspon din g m onth o f last year and liabilities o f the d efa u ltin g con cerns w ere dow n 49 per cent. F o r the first eight m onths failu res w ere dow n 61 per cent in num ber and 54 per cent in liabilities. L ife insurance sales in O hio and Penn sylvania in A u gust w ere six per cent below a year ago, but in the first eight m onths o f 1934 a gain o f 11 per cent was show n from the sam e period o f the precedin g year. No. 9 A ctivity on the G reat L akes has declin ed quite sharply in recen t w eeks and on Septem ber 15 on ly 50 per cent o f the total available tonnage was being u tilized. A year ago at this tim e 68 per cent o f the serviceable tonnage was in operation. Iron ore receipts at Lake E rie ports in A ugust w ere 2 1 per cent below last year but fo r the entire shipping season there was a gain of 42 per cent in the am ount o f ore unloaded. A u gust coal shipm ents w ere about the sam e as a year ago, alth ough fo r the first eight m onths such shipm ents show ed an in crease o f 20 per cent. D aily average steel in got production in A u gust was 14.3 per cent less than in Ju ly and the low est since F eb ruary, 1933. In late A u gust steel m ill operations aver aged approxim ately 18 per cent o f capacity, but by the third w eek o f Septem ber a sligh t im provem en t had oc curred and activity averaged 22 per cent, w ith m ost local steel centers producing at a better-than-average rate. Steel purchases w ere lim ited to sm all m iscellaneous o r ders in m ost cases. There was a declin e o f 13 blast fu r naces in operation in A u gust and at the begin ning o f Septem ber 61 w ere still active. This was a reduction o f 56 in the three latest m onths. A u tom obile prod u ction in A u gust was sligh tly a b ove a year ago and th ou gh the declin e from Ju ly w as greater than seasonal, the fa llin g -off in this in du stry was n ot so pronou n ced as in som e oth er fields o f activity. R etail sales o f passenger cars held up quite w ell and because o f this new m od el preparations have been d eferred lon ger than was anticipated earlier in the year. R u bb er and tire production continu ed to declin e in July and A ugust, but shipm ents have h eld up reason ably w e ll; n everth e less in ven tories are large. A gricu ltu ral con d ition s in the fou rth d istrict im proved in A u gust and Septem ber, a ccord in g to reports, the late crops being benefited by m ore n orm al w eather con dition s. The drou gh t w as severe in som e sections o f the district, but n ot all crops w ere affected so that in m ost cases loca l farm ers are in a position to derive som e benefit from the h igh er farm prices now prevailing. FINANCIAL In the fo u r latest w eeks th ere w as a sligh t increase in loans (oth er than collatera l loa n s) at w eek ly re p o rt in g m em ber banks in leadin g cities o f the fou rth district, 2 THE MONTHLY BUSINESS R E V IE W but tlie total volum e o f credit extended by these banks was smaller on September 19 than four weeks earlier. Deposits at the reportin g banks declin ed in the latest m onth, but they w ere still con siderably h igh er than a year ago at that time. Savings deposits at selected banks th rou g h ou t the dis trict on A u gu st 31 w ere 5.8 per cent larger than a year ago, a sligh t im provem en t occu rrin g in the latest m onth. D ebits to in dividu al accoun ts at banks in 24 cities o f the district in the fo u r w eeks ended Septem ber 19 w ere 10.2 per cent ahead o f the correspon din g period o f 1933, and fo r the year to date a gain o f 15.4 per cent was show n. R eserv e B ank Credit. There was practically no change in the total volu m e o f bills and securities held by the F ederal R eserve B ank o f Cleveland in the latest m onth. The on ly variations w ere in bills discounted fo r m em ber banks, w h ich dropped from $501,000 on A u gust 22 to $317,000 on Septem ber 19, and in in du s trial advances w hich rose to $85,000 in the fo u r latest w eeks. W h ile this latter figure represents the total am ount actu ally disbursed u nder Section 13b o f the F ederal R eserve A ct, a con siderably larger v olu m e of loans has been approved and total com m itm ents to m ake indu strial advances m ade by this bank either direct or th rou gh a financing in stitu tion prior to Septem ber 19, am ounted to $125,000. The total volum e o f loans and com m itm en ts approved betw een June 26 and Septem ber 19 (in clu d in g loans and com m itm en ts actu ally m ade) am ounted to $413,500. T he volu m e o f F ederal reserve notes in circu lation increased in late A u gust and the first tw o w eeks o f Sep tem ber, but the gain w as partly seasonal. In the w eek ended Septem ber 19 note circu lation declin ed and on the latest date w as little changed from the third w eek o f A u gu st or from a year ago at this time. T otal deposits w ere practically u nchanged in the fou r latest w eeks. R eserve deposits declin ed sligh tly in Septem ber, but in A ugust, the latest m onth fo r w hich com plete figures are available, daily average excess reserves o f m em ber banks w ere $124 ,0 00 ,0 00 , an increase o f $6,000,000 from the preceding m onth. A decrease o f $4,000,000 in excess reserves o f cou n try banks in this district was m ore than offset by the $10,000,000 increase in excess reserves at reserve city banks. M em ber B ank C redit: A t reportin g m em ber banks in leadin g cities o f the fou rth district total cred it ex tended w as reduced $10,000,000 to $1 ,185 ,0 00 ,0 00 be tw een A u gust 22 and Septem ber 19. It w as still six per cent above a year ago, but the in crease w as con sid erably less than the gain in deposits at these banks in the period. In the fo u r latest w eeks loans on secu rities w ere fu r ther reduced, but “ all o th e r” loans in creased sligh tly. The gain, how ever, w as less than the drop in collatera l loans so that total loans at these banks tou ch ed a new low level in the latest w eek. T otal investm ents o f these banks in creased sligh tly in late A u gu st and the first tw o w eeks o f Septem ber, but a reduction in h oldin gs o f G overnm ent secu rities in the latest w eek, w hich fo llo w e d a sligh t con tra ction in each o f the past several w eeks, offset the increase show n in h oldin gs o f oth er than G overnm ent securities. As show n on the accom panyin g chart in all but on e o f the eleven latest w eeks rep ortin g m em ber banks in this district show ed an increase in h old in gs o f oth er than G overnm ent securities. On Septem ber 19 these investm ents w ere $5,000,000 larger than a year ago and th ey w ere h igh er than on any w eek ly rep ortin g date since Ju ly 1933. D em and deposits at these banks fluctuated som ew hat betw een A u gu st 22 and Septem ber 19 and on the latest date w ere dow n $11,000,000 from a m on th earlier. G ov ernm ent deposits also declin ed, bu t tim e deposits show ed little change. M AN U FACTU RIN G , M INING Iron and Steel Purchasing o f steel in m oderate am ounts by those parts m akers w h o have been aw arded con tra cts fo r 1935 au to m obile m aterials, sligh tly better dem and from m iscel laneous m a n u factu rin g sou rces and an in crease in the v olu m e o f structural steel contracts aw arded in the past tw o w eeks caused operatin g rates at steel m ills to rise from about 18 per cent o f capacity to 2 2 ^ per cent. A t the h igh er rate operations w ere abou t one poin t above the level w hich prevailed in the en tire cou n try in the third w eek o f A ugust. The slum p in steel m ill activity w hich developed prior to L ab or D ay reduced operations in the in du stry to the low est level since A p ril 1933, and the in crease so fa r in Septem ber has been little m ore than seasonal. In the third w eek o f Septem ber steel w ork s operations in the P ittsbu rgh district averaged 16 per cent o f ca pacity. This was one poin t above the rate in the third w eek o f A u gust and represented a gain o f eigh t poin ts in the tw o latest w eeks. In the Cleveland area operations in the latest w eek w ere at 28 per cent, a gain o f 15 points from the corresp on d in g w eek o f A ugust. O perations in the M ahoning V alley w ere at 26 per cent o f capacity, up fo u r points in the m onth. W h eelin g m ills also w ere operatin g at 26 per cent, bu t reports o f rush orders fo r tin plate in dicated that an increase in activity in this section w as ab ou t to develop. Steel in got prod u ction in A u gust averaged 50,495 gross tons a da y; this w as 14.3 per cent less than in Ju ly and the low est daily rate since F ebru ary 1933. T ota l output fo r the m onth w as 1,363,359 tons, a drop o f 7.4 per cent from Ju ly and o f 52 per cen t from A u gu st 1933. A year ago steel m ills w ere unu su ally active in A u gu st fo r that THE M ONTHLY season o f the year. Steel prod u ction fo r the first eight m onths o f 1934 am ounted to 19,017,000 tons and despite the lim ited am ount o f steel produ ced in the past tw o m onths a gain o f 27.5 per cent was show n from the first eight m onths o f 1933. D aily average pig iron prod u ction in A u gust, at 34,199 gross tons, was dow n 13.7 per cent from July and was low er than since May 1933. T otal produ ction , at 1,060,UOO tons, was 42.5 per cen t below A u gu st o f last year, but produ ction fo r the eigh t m onths, at 12,141,000 tons, represented a gain o f 50 per cent from the correspon din g period o f 1933. In A u gu st a sharp redu ction in the num ber o f active blast fu rn ace stacks w as show n. A net loss o f 13 reduced the total num ber in operation to 61 at the close o f the m onth. In the past three m onths 56 furnaces have been taken ou t o f p rodu ction . A year ago 98 fu rn aces w ere m an u factu rin g p ig iron. A ccording to Steel, orders for some new m aterial for 1935 au tom obile m odels have been placed, but fill-in re quirem ents fo r the com p letion o f present m odels still represent the greater part o f steel shipm ents to the au to m obile industry. Contracts aw arded fo r stru ctu ral steel have increased recen tly and in qu iries are expected on several large p rojects, m ost o f w hich are p u blicly financed. There is con siderable u ncertain ty over the iron and steel price structure. P rices w hich have prevailed on third quarter orders have not been tested by any broad buy in g m ovem ent and the price o f scrap steel has been d eclin ing fo r several weeks. S teel’s com posite of principal iron and steel prices w as $32.13 in the third w eek o f Septem ber, a redu ction o f ten cents in the fo u r latest weeks. A year ago this average was $31.30. Iron ore receipts at L ake E rie ports in A ugust, at 3.092.000 tons, com pared w ith 3,362,000 in July, but they w ere 21 per cent below A u gu st 1933. C oal Coal p rodu ction in A u gu st increased 5.3 per cent from July in the fou rth dis trict, but total ou tpu t in the m onth, at 11.188.000 tons, w as 21 per cent below a year ago. The gain in A u gu st from Ju ly in this section was less than the average increase o f precedin g years and also was sm aller than the 8.7 per cent gain show n fo r the entire coun try. The sharp drop in indu strial activity in A ugust was reflected in the coal p rodu ction figures fo r the sup ply o f in dustrial and steam sizes has increased sharply in recent w eeks. A t the end o f July prin cipal consum in g industries had on hand enough coal to last 39 days at the current rate o f consum ption . This w as an increase o f 11 per cent in the latest m onth, w hereas consum ption in the period declin ed seven per cent. B U SIN E SS R E V I E W A u tom obiles R etail sales o f au tom obiles in recen t w eeks have held up m uch better than was gen erally expected and as a result the au tom obile in du stry as a w h ole has exhibited a sm aller declin e than in oth er m a jo r lines o f general industrial activity. A u gu st prod u ction , a ccord in g to the D epart m ent o f C om m erce, w as 234,809 cars and trucks. This represented a gain o f 0.8 per cent from the corresp on d in g m onth o f 1933, but a con tra ction o f approxim ately 12 per cent from July o f this year. The fa llin g -off was greater than seasonal, the F ederal R eserve B o a rd ’s ad ju sted index droppin g to 61 per cent o f the 1923-25 m onthly average in A u gu st from 78 per cent in July. A u gust passenger car p rodu ction was 183,500 units, a drop o f 4.1 per cent from a year ago. F o r the first eight m onths o f 1934, 48.6 per cent m ore passenger cars w ere assem bled than in the same period o f 1933. *In recent m onths p rodu cers have attem pted to keep p rod u c tion in line w ith retail dem and and the accom panyin g chart o f new passenger car registrations plus exports com pared w ith passenger car assem blies show s that in July, the latest m onth fo r w hich com plete registration figures are available, retail sales exceeded production. P relim inary figures for A u gust in dicate that production was exceeded by an even greater m argin and retail distribu tion in early Septem ber was reported at quite sa tisfactory levels. Th ere w ere 51,309 tru cks produ ced in A ugust, a gain o f 24 per cent from the corresp on d in g m onth o f 1933 and o f sligh tly less than that am ount from July. P rior to Septem ber 1 o f this year, 407,652 trucks had been assem bled, an in crease o f 74 per cent from the corre sponding period o f 1933. N ot on ly has dom estic dem and fo r au tom obiles been w ell sustained this year, but exports o f passenger cars and trucks in July, at n early 24,000 vehicles, w ere the largest fo r that m onth since 1929. July shipm ents to foreig n ports w ere on ly sligh tly below the num ber ex ported in each o f the precedin g fo u r m onths. F oreign coun tries bou ght m ore au tom obiles from the U nited States in the first seven m onths o f this year than in any sim ilar period since 1930. In the first three w eeks o f Septem ber a u tom obile as sem blies w ere at a som ew hat low er rate than in A u gust and also w ere below the corresp on d in g period o f 193 3. Present in dications poin t to a total ou tpu t fo r Septem ber o f approxim ately 170,000 units. This w ould be 14 per The large in ven tories o f coal used fo r indu strial pur poses w ere responsible fo r the fact that p rodu ction re cently has show n less than a seasonal increase, notw ith standing that dem and fo r dom estic coal has increased seasonally. Coal shipm ents from L ake E rie ports in A u gust w ere less than one per cent larger than in the correspon din g m onth o f 1933, w hereas fo r the season to date an increase o f 20 per cent was reported. Prices o f all grades o f coal in m id-Septem ber w ere con siderably h igher than a year ago at that time. August preliminary 4 THE MONTHLY BUSINESS R E V IE W cent under the Septem ber 1933 figure. Sustained retail dem and gen erally has postpon ed the necessary changes in plant facilities som ew hat lon ger than was expected several w eeks ago. A lth ou g h one or tw o com panies have recen tly announced new m odels, volum e produ cers have not yet ordered m aterials fo r the 1935 cars in any quantity, accordin g to reports. Tires, K ubber O perations in the tire industry in July w ere dow n quite sharply from June and, ju d g in g by em ploym ent, the con traction continued in A ugust. A lth ou g h the drop in the num ber of em ployees at 17 loca l rubber factories w as little m ore than the average fa llin g off fo r this season o f the past five years, total em ploym ent in A u gu st was 1.6 per cent below a year a g o ; in the first eight m onths o f this year em p loy m ent averaged 29 per cent a b ove the same period o f 1933. A ccordin g to the R ubber M anufacturers' A ssociation , 3,252.000 tires w ere p rodu ced in Ju ly o f this year by com panies representin g 97 per cent o f the tire industry. This was a declin e o f 41 per cent from the correspon din g m onth o f 1933, but fo r the first seven m onths tire p rodu ction was up 13 per cent from the sam e period o f last year. Output has been d eclin in g since M arch, but shipm ents o f tires from fa ctories have m aintained a m uch m ore fa v or able level. In Ju ly they exceeded output by n early 25 per cent and in ven tories in hands o f m anu factu rers have been reduced n early 2,500,000 units in the past three m onths. A t 9,000,000 casings on A u gust 1, they w ere still m uch la rger than a year ago and represented over tw o m on th s’ supply at the cu rren t rate o f consum ption. Based on the am oun t o f cru de rubber consum ed in the United States in A u gust, w hich am ounted to 33,310 lon g tons, operations in the rubber industry w ere approxim ately the same as in Ju ly and reports from in dividu al tire com panies, w hile sh ow in g con siderable variation, seem to sub stantiate this fact. Com pared w ith a year ago, h ow ever, cru de rubber consum ption w as dow n nearly 6,000 tons, or 15 per cent. In the past year m on th ly p rodu ction fig ures o f the tire in du stry have show n considerable variation in addition to seasonal fluctuations. Speculative buying on the part o f dealers in advance o f the im position o f ex cise taxes, anticipated price increases w hich w ere expected to result from the adoption o f a code, and the rise in raw m aterial prices in recent m onths, caused w ide m onthly sw ings in tire produ ction and m ade it rather difficu lt to trace developm ents in the industry. Im ports o f cru de ru b ber to the U nited States in A u gust totaled 33,248 tons against 41,530 tons in Ju ly and over 45.000 tons in A u gust 1933. A t the close o f A u gust there w ere 362,647 tons o f cru de rubber in this coun try, an in crease o f approxim ately 30,000 tons in the past year. D o m estic rubber stocks have increased generally in the past fo u r m onths despite the fa ct that an agreem ent to restrict the p rodu ction and exportation o f rubber was adopted by m a jor prod u cin g areas on May 7 o f this year. W orld stocks o f cru de rubber have show n a corresp on d in g in crease in the period, but over h alf the total w orld supply o f rubber is held in the United States. D espite the continu ed increase in the am ount o f crude ru bber on hand prices have advanced m onth by m onth. In m id-Septem ber cru de rubber w as quoted at about 15 cents a pound, w hereas a year ago it sold fo r less than half this figure. C loth ing E m ploym en t at 38 cloth in g and textile plants reportin g to the O hio State Uni versity Bureau o f B usiness R esearch in creased 12.7 per cent from Ju ly to A u gu st, w hereas the average change for this period in the p reced in g five years was a declin e o f 0.2 per cent. A lth ou g h 17 o f the rep ort ing firms show ed decreases in A u gust the gain s at oth er plants w ere substantial and fa irly w ell distribu ted am ong the various types o f producers. A u gu st em p loym en t was dow n nine per cent from a year ago. In early Septem ber the strik e in the textile in du stry, w hile h aving little direct effect on loca l plant operations, in terfered w ith the supply o f certain m aterials, accord in g to reports. T h ough little definite in form ation on the w hole strike situ ation, the quan tity o f g ood s on hand, etc., is available, bu ying o f m ate rials in quantities as a h edge against a sh ortage w as not gen erally reported and prices rem ained fa irly steady. D em and fo r w om en ’s ready-to-w ear cloth in g fe ll off in A ugust and dollar valu e o f sales w as u nder a year ago. This com parison is som ew hat deceptive, fo r the stim ulus given to the cloth in g in du stry last year by the increased bu ying in an ticipation o f h igh er prices w hich w ere ex pected to result from operation o f the in du stry u nder the national code, caused sales to in crease sharply at that tim e. M en’ s cloth in g sales to retailers in A u gu st com pared fa v ora b ly w ith last year and em ploym ent at m a n u factu rin g plants in A u gust was 4.7 per cent above year ago. Dem and fo r knit g ood s has in creased recen tly and the upturn, a ccord in g to reports, w as on ly partly seasonal. Or ders com pared fav orably w ith a year ago at this tim e. D olla r valu e o f retail cloth in g sales at departm ent stores in this district in A u gu st was con siderably sm aller than in 1933. W om en ’s cloth in g sales w ere dow n 12 per cent and sales o f m en ’s apparel w ere 13 per cent under last year. A ccordin g to Fairchild’s index o f retail prices at departm ent stores, prices o f w earin g apparel continu ed dow n w ard in A ugust, but on Septem ber 1 they w ere still five to ten per cent above a year ago. O ther M anufacturing- In m ost o f the sm aller m a n u factu rin g lines in the fou rth d istrict declin es w ere reported in A u gu st but the fa llin g off generally w as less severe than in the m a jo r in du stries and in m any cases operations com pared fa v ora b ly w ith a year ago. Som e im provem en t in scattered sections and industries, la rg ely seasonal, w as reported in the first h a lf o f Septem ber, but no general u pw ard m ov e m ent was in dicated. A u tom obile Parts, A ccessories. O perations at a u tom o bile parts and accessory factories in this section declin ed m ore than season ally in A u gust and con tin u ed at rela tively low levels in the first part o f Septem ber, despite the fa ct that, a ccord in g to reports, som e com panies had received orders fo r m aterials to be used in the 1935 m odels. E m ploym en t at 33 com panies rep ortin g to the O hio State U niversity Bureau o f Business R esearch dropped 8.7 per cent fro m July to A u gust. In the pre cedin g five years the average change fo r this period w as a drop o f 6.6 per cent. Com pared w ith a year ago em TH E MONTHLY ploym en t w as up about 22 per cent but m any em ployees w ere only w ork in g a lim ited num ber o f hours per w eek. Inven tories o f finished parts and accessories have been declin in g recently, but this is seasonal. B rick and T ile. L ittle change in em ploym ent was evi dent at brick and tile plants in this district in A u gust and operations w ere con siderably u nder a year ago. There was a sligh t seasonal im provem en t in orders re ceived in the first part o f Septem ber. A ccord in g to the American Face Brick, A ssociation , production in July, the latest m onth fo r w hich com plete figures are available, was 2 6 per cent below last year and on ly eight per cent o f the in du stry’s capacity was being utilized. China, P ottery. The china and pottery industry re ported an im provem en t in orders and operations in the first h alf o f Septem ber and em ploym ent show ed a c o rre sponding increase. This, how ever, fo llo w e d a period in w hich operations w ere quite sharply curtailed. A u gust em ploym ent at reportin g com panies was about three per cent above last year, but the increase from July was considerably less than seasonal. O rders recen tly received were sm aller than those obtain ed a year ago at this time. E lectrica l Supplies. The num ber em p loyed at 26 plants m aking electrical m ach in ery apparatus and supplies de clin ed 3.6 per cent in A u gust, a sligh tly greater than seasonal fa llin g-off. In contrast w ith a year ago, h ow ever, the num ber em ployed was up about 40 per cent. C onsiderable variation w as show n in in dividu al reports, som e com panies in dicatin g that orders recen tly received were larger than a year ago, w hile oth ers show ed a con trary con dition . N um erous in qu iries w ere reported but actual orders w ere rather slow m aterializing. Glass. The glass in du stry as a w h ole reported little change in operations betw een m id-A u gu st and m id-Sep tem ber. There w as a seasonal declin e in shipm ents o f a u tom obile plate glass, but this w as partially offset by a sligh t im provem en t in dem and fro m oth er sources. The num ber em ployed at m ost com panies in A u gust was m aterially above a year ago. H ardw are, M achinery. M achine tool sales in A u gu st w ere up sligh tly from June and Ju ly and the gain w as qu ite w ell distributed. E m ploym en t in the industry in creased in A u gust, w hereas a declin e has occu rred at this season in m ost recent years. D em and fo r sm all tools has increased in the past m onth and sales in the first h alf o f Septem ber exceeded the corresp on d in g period o f 1933. Sales and shipm ents o f new fou n d ry equ ip ment in A u gust w ere sm aller than in Ju ly o f this year or in A u gust 1933. F o r the year to date m ost com panies reported a greater volu m e o f activity than in the co rre sponding period o f last year despite the recen t fallin g-off. P aint. O perations in the paint in du stry in A ugust were approxim ately the same as in Ju ly and w ere at about the same level as in A u gust last year. R etail sales of paint have held up reason ably w ell and industrial paint sales have increased sligh tly in recen t w eeks. Paper. A seasonal increase in paper and boxboard sales was reported in the first part o f Septem ber. This fo l low ed a m onth in w hich orders and p rodu ction w ere sm aller than in the corresp on d in g period o f 1933. The boxboard in du stry is cu rren tly operatin g at 53 per cent whereas the average operatin g rate fo r the year to date is 59 per cent. 5 B U SIN E SS R E V I E W Shoes. A ccord in g to reports, activity at local shoe fa c tories in A u g u st w as su bstantially ahead o f a year ago and many local plants have been operatin g near capacity prac tically all sum m er. In the first seven m onths o f this year shoe produ ction in this section was 7.4 per cent ahead o f the sam e p eriod o f 1933, w hereas the gain in the entire coun try fo r the p eriod w as 4.2 per cent. L eather prices have declin ed recen tly as in ven tories in creased follow in g the large v olu m e o f slau gh terin g as a result o f the drough t. TRADE R eta il The increase in the dollar v olu m e o f re tail sales at departm ent stores in the fou rth district in A u gust com pared with July was m ore than seasonal and the upw ard m ovem ent occu rred at a tim e w hen indu strial activity w as declin in g generally. The seasonally a d ju sted index o f daily average sales rose to 71.2 per cent o f the 192 3-25 m on th ly average in A u gu st from 67.7 per cent in July. Com pared w ith a year ago, how ever, dollar sales w ere dow n tw o per cent, but w ith the exception o f W h eelin g, declines w ere lim ited to the large industrial cities. A kron departm ent stores show ed a gain o f 4.7 per cent in A ugust from a year a g o ; C olum bus 13 per cent, T oled o 1.4 per cent, and the increase in nine oth er sm aller cities aver aged ten per cen t from A u gust 1933. F o r the first eigh t m onths o f 1934 dollar sales at re portin g stores w ere up 20.8 per cent from the sam e period o f 1933 and prelim inary reports in dicate that the im provem ent in retail trade experienced in A u gust continu ed through the first h alf o f Septem ber. A ccordin g to Fairchild's, retail prices at department, stores th rou g h ou t the cou n try declin ed sligh tly in A u gust, thus con tin u in g the dow nw ard trend show n in the past six m onths. Com pared w ith a year ago prices on Septem ber 1 w ere up 6.3 per cent and, due to the fa ct that prices last year at this tim e w ere in creasin g sharply, the spread betw een curren t prices and those prevailin g in the fa ll o f 1933 has narrow ed. B asem ent sales at 29 reportin g stores in A u gu st w ere 1.7 per cent ahead o f a year ago, but the ratio o f base m ent sales to total sales in the latest m onth w as ap proxim ately the sam e as in July. There w as little change in the ratio o f installm ent and regu lar 30-day credit sales to total sales in A u gust from July and both w ere sligh tly under a year ago. D ollar valu e o f retail stocks on A u gust 31 w as about fou r per cent h igh er than at the close o f Ju ly and the gain was som ew h at m ore than seasonal. The ad ju sted index rose from 60.7 per cent in Ju ly to 62.4 per cent o f the 1923-25 m on th ly average in A ugust. C om pared w ith a year ago the dollar value o f departm en t store stocks was up on ly 1.5 per cent and the stock tu rnover rate in the latest m onth was sligh tly under a year ago. The ratio o f collection s in A ugust to accoun ts receiv able at the end o f Ju ly was dow n sligh tly from the pre cedin g m onth, but continu ed above a year ago. C ollec tions on regular 30-day accounts amounted to 38.2 per cent in A u gu st com pared w ith 33.2 per cent in the same m onth o f 1933. Sales o f rep ortin g w earin g apparel stores w ere 3.7 per cent sm aller in A u gust than a year ago, bu t an in 6 TH E M ONTHLY B U SIN E SS R E V I E W crease o f 19 per cent was show n in sales fo r the first eight m onths. R ep ortin g fu rn itu re store sales had a dollar value o f 14 per cent less in A u gu st o f this year than in A u gust 1933, but sales in the first eigh t m onths o f 1934 w ere 35 per cent ahead o f the corresp on d in g period o f the preced in g year. Chain grocery store sales in August averaged 2.6 per cent above a year ago, per in div idu al unit operated, and in the first eight m on th s an increase o f ten per cent from 1933 w as show n. Chain drug sales w ere up 7.6 per cent in A u gust and 14.1 per cent in the first eight m onths from corresp on d in g p eriods o f 1933. W h olesa le A ll rep ortin g lines o f w holesale trade in the fou rth district show ed greater than seasonal increases in A u gust from July and the com bined index o f dollar sales was 66 per cent o f the 1923-1925 m on th ly average com pared w ith 58 in July and 61 in A u gu st 1933. Com bined sales o f all rep ortin g firms w ere larger in A u gust than in any correspon din g m onth since 1930. C om pared w ith a year ago dry g ood s sales in A u gust w ere up 12.6 per cen t; drugs 11.8 per cen t; groceries 7.8 per cent and h ardw are 3.6 per cent. Increases in the first eigh t m onths fo r these w h olesale lines w ere 19 per cent, 30 per cent, 18 per cen t and 30 per cent, re spectively. W h olesa le dry g ood s sales, w hich declin ed quite sharp ly in Ju ly from June and the year previous, increased in A u gust, the gain from Ju ly in dollar sales being 46 per cent. A G R IC U L T U R E The 1934 cro p -g row in g season is near the end in this d istrict and th ou gh changes no dou bt w ill be m ade in the crop estim ates they w ill be o f m inor im portan ce. The rains o f the past several w eeks w ere beneficial to latem atu ring crops in m ost sections o f the coun try, but in som e areas they arrived too late to be o f m uch help to the corn crop. In the case o f prin cipal fo o d crops, prospects im proved and, accord in g to the D epartm ent o f A g ricu ltu re “ n ational supplies . . . if closely u tilized, should be sufficient fo r ordin ary requ irem en ts.” The dis tribution, h ow ever, is quite uneven and w ith few excep tions there does n ot appear to be an unusually heavy p rodu ction o f any im portan t fo o d crop this year. A s a resu lt prices o f farm prod u cts have increased sharply in recen t w eeks, the advance fro m the low point early in the year to the present tim e being 28 per cent and the gain from the recen t all-tim e low o f 1933 being 83 per cent. The in crease in farm prices has been m uch m ore pron ou n ced than the rise in prices o f oth er com m odities, particu la rly o f the type farm ers buy and the ratio o f prices received to prices paid advanced fro m 66 to 71 per cent o f the pre-w ar average betw een m idJu ly and m id-A u gu st w ith a fu rth er substantial rise in dicated in the fo llo w in g m onth. Com pared w ith a year ago a gain o f 12 per cent in this index o f farm bu ying pow er w as show n. A ccord in g to the D epartm ent o f A g ricu ltu re gross cash in com e o f farm ers this year w ill be over $1 ,000 ,0 00 ,0 00 la rg er than in 1933. In clu d in g rental and benefit pay m ents and in com e from the sale o f liv estock to the A A A , in com e is estim ated at over $6 billions. This is based on an analysis o f farm p rod u ction in 1934, proba ble prices and m arketin gs in the rem ainder o f the year, and cash in com e fo r early m on th s as previou sly estim ated, and it is h igh er than since 1930. W h ile the distribu tion o f farm in com e varies greatly be cause o f the irreg u larity in crop con dition s, etc., th r o u g h out the cou n try, farm ers in the fou rth d istrict no dou bt w ill receive at least th eir prop ortion ate share o f the total am ount. The d rou gh t w as severe in som e sections o f this district, but n ot all crops w ere affected so that in m ost cases loca l farm ers are in position to benefit to som e ex tent from the h igh er prices. That farm in com e has im proved is show n by the fa ct that retail b u yin g in sm all cities com pares m ore fa v ora b ly w ith a year ago than in indu strial cities, and the gains reported by the m ail ord er houses are m uch la rger than in loca l retail stores. Estim ated p rodu ction o f all prin cipal crops in the fou rth district increased betw een A u gu st 1 and Septem ber 1 and fa v ora b le g row in g w eather in the first h a lf o f Septem ber had a beneficial effect on the late-m atu ring crops. The corn crop in this section im proved quite g en erally in A u gust and alth ough con dition s w ere irreg u lar th rou g h ou t the district som e areas rep ort the best crop on record. F or the district as a w hole prod u ction on Septem ber 1 w as esti m ated at 129,940,000 bushels. This was an in crease o f three per cent in A u gust, but w as 22 per cent below the average harvest o f the precedin g ten years. In contrast w ith the increase in the corn crop estim ate in this district in A u gust estim ated p rodu ction fo r the entire cou n try w as reduced eight per cent in the m onth, w as 37 per cent be low 1933 p rodu ction and, at 1,6 07,00 0,00 0 bushels, w as the sm allest crop since 1881. Corn prices have risen sharp ly in recent w eeks. In m id-Septem ber ,No. 3 y ellow corn was quoted in Cleveland at 87 cents a bushel. This was n early d ou ble the price prevailin g a year ago. The 19 34 oat crop, alth ough still 55 per cent below the ten-year average, turned ou t a little better than w as ex pected in early A ugust. Septem ber 1 estim ated p rodu ction in the fou rth district, at 34,703,000 bushels, w as 2.4 per cent above the A u gust figure. Oats generally are o f poor quality. E stim ated produ ction o f oth er sm all grains and sugar beets w as revised upw ard in this district in the latest m onth. Pasture con dition s im proved in m any sections in A u gu st as a result o f rain, but the Septem ber 1 con dition w as still considerably below the average o f precedin g years. P ota to p rodu ction in the fou rth d istrict on Septem ber 1 w as estim ated at 16 ,900,000 bushels. This w as an in crease o f ab ou t nine per cent from a year ago, w hereas the im provem en t in the entire cou n try was approxim ately five per cent. This y ea r’s loca l crop, h ow ever, is 13 per cent below the average harvest o f the p recedin g ten years. In general the con dition o f the crop in this d istrict was qu ite favorable on Septem ber 1, alth ough the yield is r e ported disappointing in som e areas. F ru it prospects im proved in A u gust g en erally though estim ated yield is reported som ew hat sm aller than in pre cedin g years fo r m ost o f the late fruits. The O hio grape crop is reported to be better than the average p rodu ction o f the past five years alth ough sligh tly less than in 1933. R em ark able im provem en t in the con d ition o f the to b acco crop occu rred in m ost sections o f this d istrict in A u gust as a resu lt o f fa v ora b le g row in g w eather and estim at- 7 THE MONTHLY BUSINESS R E V IE W ed p rodu ction on Septem ber 1, at 101,193,000 pounds, w as up ten per cent in the latest m onth. The Septem ber 1 con dition w as m uch ab ove a year ago, but as a result o f the curtailed p rodu ction program sponsored by the A A A , estim ated p rod u ction is 26 per cent below the aver age harvest o f the p recedin g ten years. M uch o f the crop has been cut and w eath er con dition s have been very favorable fo r curing. The acreage yield is con siderably above a year ago, bu t the area under cu ltivation is ap proxim ately one th ird less than in 1933. P rod u ction o f burley tob acco in the entire cou n try w as estim ated on Septem ber 1 at 294,000,000 pounds, com pared w ith 382,000,000 pounds in 1933. Cigar lea f tob a cco, raised prin cipally in southw estern O hio, is reported to be yieldin g 800 to 900 pounds an acre against 500 to 700 pounds a year ago. BUILDING C ontracts aw arded in the fou rth d istrict in A u gust w ere valued at $17,05 7,00 0, a gain o f 41.7 per cent from A u gust 1933 and o f 68.5 per cent from Ju ly o f this year. The latter increase was sm aller than occu rred in the sim ilar period o f 1933, but exclu din g that year it exceeded the Ju ly-A u gu st change in any p recedin g period on record. There has been no in crease in privately-financed con stru ction in this section up to the present tim e and dem and fo r lu m ber and bu ild in g m aterials from dealers is still v ery lim ited. R esiden tial con stru ction declined from Ju ly to A u gu st and in the latest m onth am ounted to $1 ,787,000, a d rop o f 11.8 per cent from A u gu st 1933. F or the year to date residential contracts aw arded w ere 3.3 per cent below the same period o f 1933. T otal bu ildin g contracts aw arded in this district in the eight-m on th period w ere up 115 per cent. N onresidential bu ildin g, oth er than pu blic w ork s and u tilities, in A u gust was up sharply from Ju ly and was m ore than tw ice as great as in A u gust 1933. P u blic w ork s contracts aw arded Pittsburgh................................................... T oled o.......................................................... Other Cities............................................... District........................................................ W HOLESALE D R Y GOODS ( 1 0 ) .... WHOLESALE DRUGS (1 3 )................. W HOLESALE H A R D W A R E ( 1 4 ) . . . (000 omitted) Fourth District Unless August % change Jan.-Aug. % change Otherwise Specified 1934 from 1933 1934 from 1933 Bank Debits— 24 cities................... $ 1,593,000 + 3.1 13,245,000 + 1 6 .1 Savings Deposits— end of month: 41 Banks, O. and Penna............... $ 658,043 + 5 .8 1 Life Insurance Sales: Ohio and Penna............................. $ 641,196 + 1 0 .9 72,638 — 6 .0 Retail Sales: 116,307 + 2 0 .8 Department Stores— 49 firms___ $ 14,077 — 2 .0 5,479 + 1 8 .6 Wearing Apparel— 11 firm s......... # 702 — 3 .7 5,332 + 3 4 .7 Furniture— 42 firms....................... $ 628 — 14.1 Wholesale Sales: Drugs— 13 firms..............................$ 10,630 H29.7 1,226 + 1 1 .8 Dry Goods— 10 firms................... £ 1,220 + 1 2 .6 8,406 [-19.2 Groceries— 33 firm s........................$ 29,668 K18.0 4,119 + 7.8 K30.0 Hardware— 14 firms.......................3 1,156 + 3 .6 9,209 Building Contracts— T otal............. $ 17,057 + 4 1 .7 112,465 +1L14.5 - 3.3 ” ” — Residential. .$ 1 787 — 11.8 13,347 Commercial Failures— Liabilities.. £ -5 3 .7 1,920 — 4 9.4 18,727 5072 - -6 1 .0 67 2 — 43.2 ” ” — . . . . Number Production: Pig Iron, U. S........................... Tons 1,060 — 42.2 12,141 + 5 0 .1 Steel Ingot, U. S..................... Tons 1,363 — 52.4 19,017 + 2 7 .6 183,5002 — 4.1 Auto-Pass. Car, U. S....................... 1,807,7072 + 4 8 .6 Auto Trucks, U. S............................ 51,3092 + 2 3 .8 407,652* + 7 4 .1 Bituminous C oal..................... Tons 11,188 — 21.4 96,283 + 1 2 .8 Cement— O., W. Pa., W. V a..bbls. 937 — 0 .4 5,204 + 2 4 .6 Elec. Power— O., Pa., K y ...k .w .h . 1,0973 — 4.3 8,110^ + 1 5 .6 13,4494 11.1 Petroleum— O., Pa., K y ........ bbls. 2,054® + 1 0 .1 Tires, U. S........................... Casings 3,252s — 41.1 29,448* + 1 3 .4 Bituminous Coal Shipments: Lake Erie Ports....................... Tons 5,259 + 0 .7 23,042 + 2 0 .1 Iron Ore Receipts: Lake Erie P orts........................Tons 3,092 — 21.3 11,039 + 4 2 .4 1 not available 8 July 2 actual number 4 Jan.-July + Debits to Individual Accounts Homestead........ Percentage I ncrease or Decrease SALES SALES STOCKS Aug. First 8 Aug. 1934 1934 months W E A R IN G A P P A R E L (11) Cincinnati................................................... Other Cities............................................... District........................................................ F U R N IT U R E (42) Cincinnati................................................... Cleveland.................................................... Columbus.................................................... D ayton........................................................ T oled o.......................................................... Other Cities............................................... District........................................................ C H AIN STORES* Drugs— District ( 4 ) ................................ Groceries— District (5 )........................... W HOLESALE G R O C E RIE S (33) A kron........................................................... Cleveland.................................................... Fourth District Business Statistics Greensburg. . . . Wholesale and Retail Trade D E P A R T M E N T STORES (49) A kron........................................................... Cincinnati................................................... Cleveland.................................................... Columbus.................................................... Pittsburgh................................................... T oled o.......................................................... Wheeling..................................................... Other Cities............................................... in A ugust w ere over 2 y2 tim es as large as in the corres pon din g period o f 1933, but pu blic u tilities’ contracts w ere dow n sharply. + 4 .7 — 5.8 — 2 .2 + 1 3 .3 — 8.3 + 1.4 — 0.1 + 9 .9 — 2.0 + 4 5 .6 + 1 0 .6 + 2 5 .0 + 2 2 .0 + 1 5 .3 + 1 6 .2 + 2 1 .6 + 3 3 .7 + 2 0 .8 + — + — + — + + + 4 .0 3.3 4 .4 3.0 2 .6 7.7 5.0 4.3 1.5 — 10.7 — 0 .2 — 3 .7 + 9 .0 + 2 3 .8 + 1 8 .6 — 1.3 + 5.2 + 2 .9 — 20.1 — 17.1 + 1 5 .9 — 10.5 + 2.6 — 27.1 — 14.1 + 2 6 .6 + 4 0 .9 + 2 5 .5 + 6 .8 + 3 8 .2 + 5 1 .1 + 3 4 .7 + 7 .6 + 2 .6 + 1 4 .1 + 1 0 .2 + 2 2 .6 — 7.0 + 3 4 .7 + 9.1 + 1 8 .5 + 1 2 .7 + 7.8 + 1 2 .6 + 1 1 .8 + 3 .6 + 3 2 .9 + 1 4 .8 + 2 1 .6 + 1 7 .3 + 1 9 .0 + 1 7 .9 + 1 8 .0 + 1 9 .2 + 2 9 .7 + 3 0 .3 + 9.3 + 9.5 Lorain................ M iddletow n... . Steubenville.. . . Y oungstow n. . . Zanesville.......... (Thousands of Dollars) 4 weeks Year to Date % ended change Jan. 3, 1934 Sept. 19, from to 1934 1933 Sept. 19, 1934 39,344 + 2 7 .6 391,129 5,980 + 5 .7 57,777 22,753 + 1 4 .9 225,573 201,192 + 6 .4 2,099,039 + 1 3 .4 358,496 3,442,895 103,500 + 1 6 .0 966,229 34,512 + 1.0 341,182 16,780 + 2 1 .5 158,726 2,226 — 1.5 21,963 5,187 + 4 3 .4 42,805 7,075 + 1.6 66,522 1,802 + 1 5 .5 15,802 11,862 + 14.1 152,684 6,666 + 6 0 .4 65,655 3,194 + 3 8 .5 22,927 5,080 — 4 .4 54,199 6,450 + 2 1 .7 59,295 448,575 + 10.0 4,803,872 11,773 + 15.7 103,292 5,389 — 8.2 52,436 72,339 + 4.5 751,082 4,827 — 13.6 52,202 21,712 — 10.9 239,993 26,628 — 2.8 283,255 5,273 + 7.6 49,260 1,428,615 + 10.2 14,519,794 Year to Date Jan. 4, 1933 to Sept. 20, 1933 273,894 50,588 158,050 1,925,208 2,963,382 768,291 325,470 136,403 18,973 32,826 56,237 13,923 124,382 47,331 19,414 48,873 50,516 4,312,742 85,800 39,829 606,249 40,858 224,855 213,489 44,278 12,581,861 % change from 1933 + 42 ..8 + 14..2 + 4 2 ..7 + 9..0 + 16. 2 +25. 8 + 4. 8 + 16. 4 + 15.,8 + 30. 4 + 18. 3 + 13. 5 +22. 8 + 38..7 + 18. 1 + 10. 9 + 17. 4 + 11..4 +20. 4 +31. 7 +23. 9 +27. 8 + 6. 7 +32. 7 + 11. 3 +15. 4 Fourth District Business Indexes (1923-1925 = 100) Aug. 1934 Bank Debits (24 cities)........................................ 59 Commercial Failures (N u m ber)........................ 46 ” ” (Liabilities)..................... 44 Sales— Life Insurance (Ohio & P a .).................. 87 ” — Department Stores (47 firm s)............... 60 ” — Wholesale Drugs (12 firm s).................. 80 ” — ” Dry Goods (10 firm s)......... 50 ” —■ ” Groceries (33 firms)............ 72 ” — ” Hardware (14 firm s)........... 59 ” — ” All (69 firm s)........................ 66 ” — Chain Drugs (4 firm s)**......................... 71 Building Contracts— (T o ta l).............................. 36 ” ” — (R esidential).................... 10 Production— Coal (O., W. Pa., E. K y .)............. 62 ” — Cement (O., W. Pa., W. V a .) .. . 78 ” — Elec. Power (O., Pa., K y.)*. .. . 131 ” — Petroleum (O., Pa., K y .)* ........... 111 ” — Shoes*.............................................. ♦July **Per individual unit operated. Aug. Aug. 1933 1932 57 53 81 190 86 146 92. 86 61 43 73 71 44 29 66 56 57 39 61 49 66 70 25 27 12 13 79 45 78 54 136 115 101 106 102 69 Aug. 1931 79 111 100 101 64 83 45 70 56 65 81 37 34 66 108 130 98 91 Aug. 1930 100 99 72 112 75 94 62 97 73 86 91 71 47 82 167 136 116 89 THE MONTHLY BUSINESS R E V IE W 8 Summary of National Business Conditions B y the F ederal R eserve B oa rd Index number of industrial production adjusted for seasonal variation (1923-1925 = 100). Latest figure, August preliminary 73. Indexes of daily average value of sales (19231925 = 100). Latest figure, A ugust prelim inary adjusted 79; unadjusted 60. v\^H O LE S A L' e P R IC E \ s Commodities X c f Foods Wv Farm F roducts 1929 1930 J931 1932 V, \S 1933 1934- Indexes of United States Bureau of Labor Statis tics, by months, 1929-1931, by weeks. 1932 to date (1926=: 100). Latest figures for week end ing September 15; farm products 73.7; foods 76.2; other commodities 78.5 Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for September 19. Total output o f industry, w hich usually increases at this season, show ed little change in August. F actory em ploym ent and payrolls increased betw een the m iddle o f July and the m iddle o f A ugust by a b ou t th e usual seasonal am ount. D istribution o f com m odities at departm ent stores show ed a m ore than seasonal grow th. P rod u ction and E m ploym en t O utput o f basic indu strial products, as m easured by the B oa rd 's in dex, w hich m akes allow an ce fo r usual seasonal changes, declin ed fro m 75 per cent o f the 1923-1925 average in Ju ly to 73 per cent in A u gust. A t steel m ills production continu ed to decline du ring A u gust and the early part o f Septem ber, con tra ry to seasonal ten d en cy ; in the m iddle o f S e p tem ber a slight increase in activity was reported. O utput o f autom obiles, w hich had been m aintained at a relatively h igh rate du ring the spring and early sum m er, declined in August. L u m ber production show ed an in crease. In the cotton textile industry produ ction w as in larger v olu m e in A u gust than in July, but was retarded by the strike in the first three w eeks o f Septem ber. A t m eatpackin g establishm ents output in A u gust was larger than in any oth er recent m onth, accom panyin g heavy m arket ings o f cattle from drou g h t areas. F actory em ploym ent show ed a seasonal increase betw een the m iddle o f Juty and the m iddle o f A ugust, reflecting con siderable grow th in em p loy m ent in the w earing apparel, canning, and m eatpackin g industries, w hile em ploym ent in the iron and steel industries and at railroad repair shops declined. The value o f construction contracts aw arded, as reported by the F. W . D odge C orporation, w as about the sam e in A ugust as in each o f the fo u r preceding m onths. D epartm ent o f A gricu ltu re estim ates as o f Septem ber 1 in dicate a corn crop 40 per cent sm aller than the average fo r the five years 1927-1931 and oth er feed crops also are expected to be unusually sm all. The con d i tion o f pastures on Septem ber 1 was p oorer than in any oth er recen t year but som e im provem en t has been reported in the early part o f Sep tem ber. The spring w heat crop, estim ated at 93,000,000 bushels, is about one-third o f the five-year average and the w in ter w heat crop is also sm all. The cotton crop is estim ated at 9,300,000 bales, a sharp reduction from oth er recen t years. D istribu tion V olum e o f freig h t car loadin gs, w hich usually increases at this season, show ed little change in A ugust. Shipm ents o f m iscellaneou s freigh t show ed no seasonal expansion, w hile shipm ents o f livestock increased considerably. D epartm ent store sales in creased \)j an am ount substantially la rg er than is usual in A ugust and w ere 2 per cent high er than a year ago. C om m odity P rices W h olesa le prices o f com m odities increased in A u gust and the first w eek o f Septem ber, reflecting sharp advances in the prices o f farm p rod ucts and foods. H og prices advanced rapid ly du ring the m onth o f A u gust and in the latter part o f the m onth cattle prices also show ed a m arked increase. Since the begin ning o f Septem ber, prices fo r both h ogs and cat tle have declin ed som ew hat, and in the m iddle o f the m onth th ere have also been decreases in the prices o f w heat and cotton . In A u gust, as in other recent m onths, there was little change in prices o f com m odities othr than farm products and foods. B a n k C redit A seasonal increase in dem and fo r cu rren cy by the pu blic and an in crease in G overnm ent deposits at the R eserve banks w ere reflected in a decline in m em ber bank reserve balances betw een the m iddle o f A ugust and the m iddle o f Septem ber. On Septem ber 19 reserve balances w ere about $1,700,000,000 in excess o f legal requirem ents. T h ere w as little change in the volum e o f reserve bank credit du ring A ugust and Septem ber. Total loans and investm ents o f reportin g m em ber banks show ed l i t tle change betw een A u gust 15 and Septem ber 19; loans, oth er than se curity loans, increased by $170,000,000 and h old in gs o f secu rities by $50, 000,000, w hile secu rity loans declined by $200,000,000. The in crease in loans oth er than on securities occu rred la rg ely at banks in New Y ork City and in the W estern districts and reflected chiefly a g row th in direct loans to custom ers fo r ordin ary com m ercial purposes and fo r financing the harvestin g o f crops. The ba n k s’ h old in gs o f acceptances and com m er cial paper, w hich also reflect curren t business financing, increased du ring the period. Short-term m on ey rates continu ed at low levels. Y ields oil both United States G overnm ent and corp orate bonds increased du ring A ugust and the first h alf o f Septem ber.
@FedFRASER