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MONTHLY BUSINESS REVIEW Covering financial, industrial and agricultural co n d itio n s Vol. 19 Cleveland, Ohio, September 30, 1937 Business activity in this district declined somewhat in recent weeks. Many fall programs have been revised as orders for materials have failed to develop in as large volume as had been expected. Statistical figures available, which relate chiefly to Aug ust, indicate that gains, in some instances large ones, were still evident as compared with last year, but the rates of increase generally w^ere smaller than those reported for the first eight months over the corresponding period of 1936. This was particularly true of the iron and steel in dustry. In August, steel ingot production was 16 per cent above last year, but the gain for the first eight months was 30 per cent. By the third week of September, na tional steel mill operations had declined to 76 per cent of capacity, still three points above last year, but the rate in August was about 84 per cent. Buying has increased, but not at the expected rate and backlogs have been con siderably reduced. Excluding Wheeling and Cincinnati, fourth district steel centers were operating below the National average rate in the third week of September. Iron ore receipts at Lake Erie ports were 40 per cent larger in August than a year ago, but for the season to September 1 the increase was 75.9 per cent, and a new high record was established. Ore shipments in Septem ber are reported to have slackened from the August rate. Coal shipments from Lake Erie ports were five per cent smaller in August than a year ago and coal production also was below last year. Electric power generated in Ohio, Pennsylvania and Kentucky in August, was 7.4 per cent in excess of last year, while the eight-month gain was 13 per cent. Machine tool sales in August were larger than in July and also in excess of the monthly average of 1929. Found ry equipment sales were large. In most other industries gains were evident in sales and production in August, but the expected fall expansion has been disappointing. Few cancelations of orders were reported. China, pottery and tire industries were exceptions; August output of these was under last year. Automobile parts orders for 1938 models have been slow recently, but sales and pro duction of 1937 models have held up very well. In Aug ust both were down less than seasonallv compared with July. Fourth Federal Reserve Distric Federal Reserve Bank of Clevelanc No. 9 Retail trade in August continued in excess of last year. The gain in department store sales was ten per cent while for the first eight months the increase was 16 per cent. Furniture store sales were up two per cent in the month and 16 per cent for the year to date. Higher prices were a factor in the larger dollar sales. Inventories at depart ment stores increased more than seasonally in August to the highest level since the depression and collections de clined a little, both as compared with July and a year ago. There was a slight increase in commercial failures in this section in August, but the number was still small compared with previous years. The trend of employment in August was irregular. Gains over July and last year were evident at Spring field, Cincinnati, Massillon, Erie, Sharon and New Castle, while at Cleveland, Toledo, Pittsburgh and Columbus de clines were reported in August compared with July. In the construction field, gains in August were still evident in all major branches in this district, as com pared with last year, but the increases were smaller than the cumulative increases for the first eight months. While figures on the rise in building costs are difficult to ob tain, the Bureau of Labor reported them to be up 25 per cent. Dollar value of contracts awarded in this district in August was 37 per cent greater than a year ago, while for the first half of September an increase of 32 per cent was reported. FINANCIAL Of some significance, so far as financial developments in this district in the five weeks ended September 22 were concerned, was the additional rise in commercial loans by weekly reporting banks. The gain was $11,000,000 in the period and the total, $316,000,000, was more than ten per cent higher than in June. Security, real estate, and all other loans in the five-week period showed practically no change and total loans of these banks rose to a new high recovery level. Investments held by these banks declined quite sharply in the same period, the net drop in the five weeks being $14,000,000, or more than the increase in loans. Holdings of Government securities rose slightly in late August, but between August 25 and September 22 a reduction of THE MONTHLY BUSINESS REVIEW 2 $25,000,000 was reported by these banks. Investments in clined from the high rate prevailing up to Labor other securities also were reduced in the latest month to day. Numerous factors contribute to this. The general feel the lowest level in nearly a year. The net result of these ing of uncertainty is reflected in the delay of producers changes was a slight reduction in total credit extended by and consumers in committing themselves by definite pur leading banks in this section in the five latest weeks, al chases. A seasonal factor is the change in automobile models, though it remained five per cent above a year ago. Demand deposits at these banks were quite sharply re the break in production bringing a corresponding slack duced to approximately the low level of the year. The drop ness in specifications for steel. Also, it is reported that in the five-week period was $32,000,000, but on the latest automobile builders have some material in stock which date they were still in excess of a year ago. Time and can be used on the new models. Railroads, whose purchases Government deposits were up slightly in late September are in the heavy class, are not buying, the stated reason being uncertainty as to final outcome of the labor and compared with the August level. Savings deposits at selected banks throughout the dis freight rate cases now being considered. Building con trict, as shown on the accompanying chart, have risen struction also is slow. Agricultural implement builders con steadily, with very little fluctuation, for over five years. tinue busy and have been buying heavily. National steel production has been continued at a high The gain for the period was 25 per cent, or about six per cent annually. This increase, which includes interest credits, rate, though at a lower level than in April, which marked the seems even more significant in view of the reduced rates peak, at 91 y2 per cent of capacity. Following Labor day, the rate came back nearly to 80 per cent, the level of July of interest now being paid on savings deposits. Total reserve deposits of member banks with the reserve and August, but toward the month-end a moderation was bank declined in September after rising to an all-time evident as buying failed to increase. Jn the week ended high level early in the month. The estimated excess for September 25 the national rate was down four points to all banks in the third week was still above $70,000,000, 76 per cent of capacity. At Pittsburgh, operations receded or 19 per cent of requirements. The surplus at country 11 points to 73 per cent. Wheeling dropped to 82 per banks was 37 per cent, while banks in reserve cities had cent. Youngstown has been at 70 per cent recently, but in southwestern Ohio the operating rate rose nine points an excess of 12 per cent. Reserve Bank Credit There was a moderate increase in to 89 per cent. In the Cleveland area production has de bills discounted for member banks in this district in the clined from 85 per cent in early August to 64 per cent. first part of September to the highest figure since early This is partly due to idleness of some steel furnaces brought 1934, but the total was only slightly above $1,000,000, about by rehabilitation work on a rolling mill. Scrap prices have receded the past few weeks, accord and in the third week of the month discounts dropped to $813,000. The rate charged on these loans continued at ing to the composite of steelmaking grades computed by \y2 per cent, which has been in effect since May 1935. the magazine Steel. This composite had reached $20 per Other earning assets of the reserve bank, including ac ton at the end of July and $20.50 at the close of August. ceptances purchased, Government securities held, and in Practical cessation of buying in September caused weak dustrial advances made, showed very little change in the ness until the composite reached $17.83 in the third week of September. This figure is $4 lower than the peak, five latest weeks. Federal reserve note circulation increased in early Sep reached the first week in April. However, it is still above tember, as a result of holiday demands, to $444,000,000, a the recent low point at the end of June. Numerous records were made during August in pro new high level, but in the second and third weeks a slight contraction occurred. The gain over last year was $38,000,- duction and all statistics show a wide increase over simi lar figures for 1936. It is only by comparison with second 000, or nearly ten per cent. quarter of this year that present conditions seem slack. MANUFACTURING, MINING Mills have considerable order backlogs of some prod Iron and A definite pause in steel buying activity ucts, notably sheets and tin plate, and current buying is Steel is being felt, even though in mid-Sep- at a better rate than in August, but not sufficient to sus tember purchases were 15 to 20 per tain production at present rates. cent above the August rate. September operations de Intensity of steel production is reflected in figures for THE MONTHLY BUSINESS REVIEW the corresponding date in 1936. While consumption has been reported at a higher rate than a year ago the rise in stocks has been more than proportionate to the consump tion increase. Coal shipments from Lake Erie ports in August were 5.4 per cent smaller than in the correspond ing period of 1936, but a gain of 11 per cent was reported for the season to date. A falling-off in activity at coke plants has also been noted. By the end of September it is estimated that nearly 1,000 beehive coke ovens in the Connellsville district will be out of production. At the close of August approximately 3,600 were in operation, most of them having been lighted this spring after several years idleness to help satisfy the industrial demand for coke which was greater than the by-product ovens could satisfy. Automobiles The automobile assembly industry was unusually active in August, shut-downs incident to model changes being post poned generally at plants which account for the greater share of the industry’s total output. Total assemblies in August were estimated at 394,322 cars and trucks, a less than seasonal drop of 10 per cent from July being evident. The rise of 45 per cent over last year was unusually large and the Federal Reserve Board’s index, which makes allow ance for seasonal variations, was 157 per cent of 1923-25 average compared with 111 a year ago and 129 in July. This was a new high record for this index. Two volume producers continued assemblies through the first half of September, which kept the industry’s output at a relatively high rate in comparison with last year, while other plants were retooling and starting production on 1938 models. In the second week of September Ward's reported assem blies at 59,000 cars compared with 26,850 in the corre sponding week of 1936. In the weeks ended September 18 and 25 assemblies were down to 30,150 and 28,030 units, respectively, but they were still above last year. Assem blies have started on several of the 1938 models, but as in the two previous years September production should be the low point of the year. Before the changeover started it was generally felt that the lowpoint in assemblies would come earlier in Septem ber, but with retail demand for cars holding up despite the price rise some makers continued assemblies of 1937 models longer than expected. There were almost as many cars made in July and August this year as in the entire third quarter of 1936 and up to September 18 nearly as many cars were assembled as in the entire month of September August with output of 4,861,879 gross tons of steel in gots, 6.7 per cent greater than in July and approaching the alltime record of 4,939,086 tons in August 1929. Produc tion in eight months totaled 38,183,018 tons, which is only 1.75 per cent less than eight months’ production in 1929. The August total wras 16 per cent greater than for the same month a year ago. For the first time in 20 years iron and steel exports, excluding scrap, in July approached the monthly average of shipments during 1917. These exports were 461,391 gross tons, 50.6 per cent higher than in July 1936. Pig iron was the largest item exported, except scrap, totaling 168,538 tons. Scrap exports were 428,047 tons, slightly under those of June. For seven months scrap exports have been 2,600,707 tons, the highest level ever attained, more than double the like period of 1936. In the same period 474,389 tons of pig iron were exported. Pig iron production in August broke all records since August 1929. The daily rate was 116,676 tons, compared with 120,845 tons in August 1929. The daily rate was 3.3 per cent greater than in July. Total tonnage in August was 3,616,954 tons, compared with 3,746,954 tons in Aug ust 1929. Total production for eight months was 26,888,648 tons, an increase of 42.4 per cent over the corresponding period of 1936. Shipments of iron ore from the Lake Superior region continue to break records. Total tonnage moved to Sep tember 1 this year is 45,438,131 tons, compared with 43,717,797 tons in the corresponding period of 1929, the pre vious record year. The August movement was 10,811,381 tons which compares with 10,806,967 tons in August 1929, and with 10,704,457 in July of this year. Ore on hand at Lake Erie docks and furnaces in this area totaled 35,343,000 tons, an increase of 25 per cent over the correspond ing date last year. Coal Output of bituminous coal mines in the fourth district in iVugust was slightly greater than in July, but was 0.4 per cent under a year ago. In early September the weekly pro duction figure fluctuated around last year’s level, whereas the gain in total output so far this year was 12.2 per cent at local mines. Inventories are one distressing element to the coal in dustry which is keeping mine activity at reduced levels. At the end of July, bituminous coal stocks were estimated at 43,380,000 tons, a very slight reduction from the pre vious month, but they compared with 30,126,000 tons on I00 STEEL OPERATIONS ... ... .— --------- --_..7_... .. __............ ...........r------- 3 ! AUTOMOBILE PRODUCTION _______________ WiltDJSTATES___ ___________ 4 THE MONTHLY BUSINESS REVIEW last year. The usual difficulties are being encountered with new models, but releases for materials have not been re ceived by parts makers in this district in the volume an ticipated. Passenger car production in August was 311,456 units, a gain over last year of 49 per cent. Truck production was greater in August than in July and, at 82,866 units, was 34 per cent above August 1936. In the first eight months, passenger car production was 12.8 per cent above the cor responding period of 1936, while truck output was up 14.8 per cent. Reports on retail sales in August, so far as they can be ascertained, were favorable. The preliminary gain over last year was 12.5 per cent. In principal counties of this district, August registrations were 23 per cent ahead of last year, while the eight-month gain was 12 per cent. Rubber, Figures recently released covering thei Tires rubber industry for the first half of 1937, indicate a larger gain in rubber con sumption by other branches of the industry than by the tire and tire sundry division, when compared with the first half of 1936. Rubber used for tires and sundries in the first six months totaled 196,076 tons, a gain of 18.6 per cent over last year. Other branches of the rubber industry consumed 62,303 tons of rubber, but the gain over 1936 was 27 per cent. Comparison of sales value of products in the two periods shows that tire and tire sundries made in the first half of 1937 were valued at $213,180,000, a gain of 28 per cent over last year, while the value of other rubber products was $142,206,000 or 29 per cent in excess of the first half of 1936. These figures represent approxi mately 80 per cent of the rubber industry with about 151,255 employees. Tire production continued in August at a rate which was about 90 per cent of consumption to permit a further scaling-down of inventories built up early in the year. These are still somewhat above 8,000,000 tires or what has been considered normal. Companies engaged more in the manufacture of tires for replacement use apparently have been operating recently at higher rates than those companies supplying the bulk of original equipment, for the latter built up inventories to provide for an uninter rupted supply of tires to auto plants in the case of labor trouble. August crude rubber consumption by domestic manufacturers was 41,456 long tons, compared with 43,650 tons in July and 46,777 tons last year in August. The de cline from 1936 was 11 per cent and in four of the five most recent months consumption has been lower than in the corresponding month of the previous year. Imports of crude rubber in August were 48,785 long tons, the increase of 25 per cent over July representing in part heavy shipments from Far East ports prior to an increase in freight rates on such shipments. Rubber ar rivals were 14.6 per cent larger than in August 1936 and exceeded domestic consumption in the month by over 7,000 tons. There was a consequent increase in rubber inven tories to 171,052 long tons, but they were still nearly 60,000 tons smaller than a year ago. Prices of crude rubber rose somewhat in late August and early September to above 19 cents a pound, but part of this gain was subsequently lost and on September 21 crude rubber was quoted below 18.5 cents a pound. Tire production in July, the latest available, was 4,291, 660 casings, a drop of 21.5 per cent from last year and the smallest monthly figure since March 1936. Shipments held up quite well and exceeded output in the month by about 900,000 units. Clothing While clothing sales at stores in this dis trict in August were larger than a year ago, the gain in dollar volume was not impressive. Women’s apparel sales were 11 per cent in excess of last year, while men’s clothing sales were up five per cent, and boy’s wear seven per cent. Price increases account for a good share of these gains, for according to Fairchild’s compilation, prices of men’s clothing were about ten per cent higher on September 1 than a year previous, while prices of women’s wear were up about six per cent in the same period. Inventories of clothing at these stores at the close of August were larger than a year ago by 12 per cent in the case of women’s ready-to-wear and 24 per cent in the case of men’s clothing. These increases were somewhat larger than the 4 and 17 per cent gains reported for July. Stores in this section either stocked heavily in anticipation of fall business or else August volume was not up to expec tation. This has affected orders for immediate delivery re ceived by local manufacturers and some cancelation of or ders previously placed has occurred. It has not been ex tensive, however, and plant operations continue at a high rate in most cases. Employment at men’s clothing factories has been in excess of last year, but at women’s and mis cellaneous factories it was down, partly because of strikes at some plants although others report sales of fall and winter clothing in smaller volume than a year ago with a corresponding reduction in factory operations. Textile companies were between seasons and therefore operating at reduced rates. The clothing industry is re ported as being well stocked with materials. Wool prices continue firm. Other Reports from most of the manufacturManufacturing mg industries in this district, other than automobiles and iron and steel, cover ing August and the first half of September, revealed that there had been a moderation of the trend of business ex perienced earlier in the year, if not a definite reversal. In most cases gains in August were still evident compared with last year, but they were small. Failure of trade and in dustry to expand this fall as expected and uncertain de velopments outside the business field were disturbing ele ments. In the auto parts field, plant operations held up quite well through August because assemblies of 1937 models were continued longer than expected. The industry as a whole experienced the best eight months since 1929. In the first half of September, however, releases were not forth coming in the volume anticipated and some plants had to curtail operations with a consequent drop in employment and payrolls. Costs have advanced considerably. Manufac turers and jobbers of hardware and metal products noted a slowing down in mid-September, which wras not seasonal. Their trade should be quite active at this time. New orders for machine tools and foundry equipment received in August were larger than in July, the former being up moderately and the latter about 25 per cent. The improvement in machine tool buying was from domestic sources entirely; foreign orders were lower, but repre THE MONTHLY BUSINESS REVHTW sented 28 per cent of the total volume reported. While current machine tool orders were considerably below the spring peak, in the latest month they were still 15 per cent larger than the monthly average of 1929. Unfilled foundry equipment orders at the end of August were more than double a year ago. In the machine tool industry they have been reduced recently, though most plants still have a sizable volume on hand. Buying of electrical apparatus and supplies in August continued to exceed last year, but the rate of gain was smaller than in earlier months. Large backlogs permitted operations to remain at or close to recent high levels though some indicate that unless orders pick up soon a curtailment will be necessary. Operations have been main tained for some time by the large backlogs built up this spring. Pottery and china makers report that business in late August and early September was unusually quiet for that season. Some seasonal buying of better grade china was reported, but not so much of the cheaper grades. No can celations of orders previously placed are indicated, but operations were at about 50 per cent of capacity in this section in early September, about 25 per cent below last year at that time. Window glass production in recent months has been considerably greater than shipments, be cause of a falling-off in orders, but the excess has been to build up inventories which were almost entirely depleted when the strike was on last winter. M anufactured stocks were still 20 per cent smaller than a year ago, and jobbers inventories also were down. Window glass shipments in the first eight months were 36 per cent larger than in the comparable period of 1936. Plate glass production in Aug ust also was in excess of orders, but this was not unusual for automobile demand is light at that time. Sales to job bers and furniture makers recently have been below ex pectations. Paint sales have fluctuated rather erratically recently, being down in August, though not below last year, with some improvement in the first part of September. Raw material prices remain firm. Fine paper production continued at a high rate in Aug ust on orders received earlier, but new buying was under a year ago and continued in limited volume in the first half of September. In the boxboard industry the expected rise failed to develop in August and even some orders placed earlier for future delivery were not specified against. Some price reductions have been reported. Shoe production at fourth district factories increased 13.8 per cent in August from July, but was six per cent under a year ago. An increase of eight per cent was re ported for the first eight months. August retail sales of men’s shoes in this district were seven per cent above last year while women’s and children’s shoe sales were up 14 per cent. September is generally a dull month so far as production is concerned and this year is no exception. Few cancelations of orders have been received. TRADE Retail A greater than seasonal increase was evident in August sales of reporting de partment stores in leading cities of the fourth district. The seasonally adjusted index of dollar sales rose two points to 95 per cent of the 1923-25 average, but was still several points below the spring peak. Com pared with last year the gain was ten per cent at the 51 5 reporting stores, but considerable variation was evident in the city comparisons. At Toledo, sales were slightly under last year, while Akron and Wheeling experienced only small gains. Youngstown stores reported an increase of 20 per cent and for the group of smaller cities for which individual percentages are not computed the increase in dollar sales was 18 per cent. At all stores the cumulative gain for the first eight months over the corresponding period of 1936 was 15.7 per cent. Furniture stores re ported a gain of two per cent in August and 16 per cent for the eight months, while wearing apparel stores reported increases of 9 and 14.5 per cent, respectively, in similar periods. Higher prices and the fact that buying of better quality merchandise has occurred this year account for part of these increases, for figures covering number of transac tions, while not complete, recently have shown much smaller gains over last year than dollar sales. Fairchild's index of department store prices was nine per cent higher on Sep tember 1 than a year ago, but the rate of increase has moderated recently. Basement departments of reporting stores showed an increase in dollar sales of 5.5 per cent in August and 11.5 per cent in the first eight months, both smaller than the gains in total store sales, indicating that better quality merchandise continues to be bought. Credit sales in August represented a greater share of total store sales than in either July or last August. Reg ular charge sales were smaller proportionately than in July, but installment sales were up somewhat, partly seasonal, and represented 12.8 per cent of total store sales. Both regular and installment sales were larger in relation to total sales than in August 1936. Collections fell off in Aug ust and represented 31.5 per cent of accounts receivable at the beginning of the month, compared with 34.5 per cent a year ago, and 32.9 per cent last year. The drop from July was in collections on regular accounts. Department store inventories increased somewhat more than seasonally in August and the adjusted index rose six points to 85 per cent of the 1923-25 average, the highest point of the recovery movement. Compared with a year ago dollar value of inventory was up 25 per cent. Cur rent sales, in relation to stocks, continue under last year. Wholesale A seasonal increase in sales of report ing wholesale firms of the district occur red in August, compared with July, all lines except hardware sharing in the gain. Dry goods sales were up 28 per cent, but, compared with last year, the increase was less than two per cent. For the first eight months dry goods sales were nine per cent larger than in the comparable period of 1936. Although hardware sales were smaller in August than in July they were 14 per cent larger than a year ago and the eight-month increase was 20 per cent. Grocery sales were up 7.4 per cent in August, little more than the gain in prices as compared with last year. In the first eight months sales were up nine per cent. Wholesale drug sales in this area were 18 per cent larger in August than a year ago and the gain for the first eight months was 15 per cent. CONSTRUCTION Total construction in the fourth district, amounting to $28,972,500, showed an improvement of 37.3 per cent for THE MONTHLY BUSINESS REVIEW 6 August of this year when compared with the same month fourth district recently has been running only slightly above a year ago. Residential building increased 24.3 per cent last year. A good share of farm income, in this section, over August 1936. However, these monthly increases over is derived from sale of dairy products, poultry, eggs and the corresponding periods of last year have become con meat animals though in summer and fall truck crops and sistently smaller, particularly in residential building, which grain add considerably to the income. With livestock and in January 1937, showed a gain of 189 per cent over Jan poultry supplies somewhat reduced, income from this source is only slightly better than last year. In July the gain was uary 1936. Compared w'ith July, total August construction in this six per cent while for the year to date it was somewhat district decreased 47.1 per cent. This was largely due to more than that. The accompanying table shows revised estimates of fourth the extensive program of plant expansion in the steel in dustry undertaken in the greater Pittsburgh area during district production of principal crops, based on the Sep July. August residential building increased 9.6 per cent tember 1 crop report of the Department of Agriculture, compared with last year’s harvest and the average of the over the preceding month. In the first half of September a gain in total construc preceding ten years. Figures released earlier have been tion of 31.9 per cent, over the same period last year, was rather sharply revised by weather conditions, etc. reported for this territory, but residential building de FOURTH DISTRICT PRINCIPAL CROPS (000 omitted) creased 14.4 per cent. 10-yr. Increases, as a whole, were slight in the 37 states east Estimated average % change September % change Harvest Harvest from 10-yr. of the Rocky Mountains, as reported by the F. IV. Dodge 1,1937 1936 from 1936 1926-35 average Corporation. Total construction during August, valued at Corn, bu 201,790 155,673 +29.6 162,316 +24.3 Wheat, b u ... 53,760 45,798 + 17.4 38,605 +39.3 $285,104,100, represented an increase of less than four per Oats, bu........ 45,893 - 8.7 68,327 —32.8 50,268 Hay, tons . . 4,902 +28.5 3,816 5,236 — 6.4 cent over a year ago, while residential building decreased Tobacco, lbs. 122,404 80,888 +51.3 130,156 — 6.0 almost 27 per cent in the same period. Potatoes, bu. 21,109 21,222 - 0.5 20,055 + 5.3 Residential construction in the country during August The corn crop estimate was raised nearly four per cent 1937 fell below the same month of last year, for the first in August and, as shown in the above comparison, the time during the recovery period, partly because of a de current harvest is expected to be 24 per cent above the cided decrease in public projects in the residential field. ten-year average crop and 30 per cent larger than last Wholesale lumber houses in this district reported a con year’s crop. Despite this fact there were sections where tinued slow movement of materials with a general feel the crop was very poor. This was partly true of north ing of uncertainty permeating nearly all branches of the ern Ohio and southwestern Pennsylvania where much of building trade. the crop was damaged by extremely dry weather following a long period when it wras too wet to cultivate properly. AGRICULTURE The expected large crop generally however is reflected in The September report of the Department of Agriculture the reduced livestock marketings even though prices are reduced 1937 crop prospects by one per cent from a month higher than in several years. Farmers are holding feed previous because of dry weather in some sections, and ers with the idea of utilizing grain on which prices are too wet weather for proper harvest in others. For the lower than a year ago, hoping to benefit from the current country as a whole, most of the principal food crops will high level of livestock prices. The September 1 condition showT better than average production. The total wheat crop, indicated a yield of 40.5 bushels of corn per acre. While estimated at 885,900,000 bushels, will be slightly over the this has been exceeded several times, the acreage planted 1928-32 average and more than 50 per cent larger than to corn in this section was the largest since 1920. the average harvest of the last four seasons. Rye produc Oats turned out much poorer than expected and the tion is about a third larger than average. Other feed crops crop was estimated to be 33 per cent under the ten-year show similar comparisons, but in contrast production of average harvest. Poor weather was the reason for the feed grains is expected to be only about average, and the small crop for it started well this spring. Damage at har supply, including old grain carried over, will be less than vest and threshing time was quite general. Production of average though adequate for the greatly reduced number barley and buckwheat this year is estimated to be some of livestock and poultry now on farms. This is the na what in excess of 1936, but both are smaller than the fivetional situation, but in various sections of the country year average harvest. considerable variation exists—even to almost complete Late cuttings of clover and alfalfa added materially to failure in some areas, particularly in the western Corn the hay crop in this district and it is estimated to be 28 Belt and the Great Plain States. To a degree this condi per cent larger than a year ago, but six per cent below tion also exists in the fourth district; in northern Ohio the ten-year average. Condition of the crop was some the corn crop has been very poor and several areas re what above the ten-year average, but the total yield was cently have been seriously affected by dry wreather. below that figure because of the reduced acreage devoted The trend of market prices since mid-August indicates to hay crops in this district in recent years. that the general level of prices received by farmers in Fruit prospects continued excellent throughout the dis mid-September was somewhat lower than a month pre trict. On September 1 the apple crop estimate was slightly vious. Prices of grains, hogs and cotton have declined con larger than a month previous. In Ohio, the crop is esti siderably in the past four weeks. Farm income did not in mated to be nearly four times as large as in 1936 and crease as usual in August over July, but was estimated 75 per cent in excess of the five-year average harvest. by the Department of Agriculture as being about $100,000,- For the country as a whole this year’s crop is expected 000 above last year. Income of farmers in States of the to be about 72 per cent in excess of last year’s harvest. THE MONTHLY BUSINESS REVIEW A heavy infestation of scab is reported in some sections and recent dry weather has damaged fruit. Picking was started earlier than usual. Grape crop estimates were re duced in August by rot, but it was still the largest crop in several years. Cutting of the crop in the Lake region is expected to be later than usual. Pear and peach crop es timates were little changed in the latest month; both are above the average of recent years. Potato crop prospects for the entire country are 22 per cent larger than a year ago and eight per cent above the average of preceding years. In this district a slightly smaller crop than in 1936 is expected, though it is esti mated to be 5.3 per cent above the ten-year average har vest. Dry weather and early frosts in September adversely affected the crop in this district. The largest tobacco crop raised in this district in six years has been cut and housed, and at 122,000,000 pounds it w’as 51 per cent larger than last year’s harvest. Most Burley tobacco was harvested under favorable conditions and although much of the leaf is thin, private estimators feel that the crop might even exceed the September 1 Gov ernment figure. Weather has been generally favorable for curing, but barns have been so well filled that quality of leaf is likely to be reduced because of improper spacing. Fourth District Business Indexes (1923-25*100) Bank debits (24 cities)......................................... Commercial Failures (Num ber)......................... “ “ (Liabilities)...................... Sales— Life Insurance (O. and P a.).................... “ — Department stores (49 firms).................. “ — Wholesate Drugs (10 firms)................... “ — “ Dry Goods (10 firms)......... “ — “ Groceries (28 firms).............. “ — “ Hardware (11 firms).......... “ — “ All (59 firms)......................... “ — Chain Drugs (4 firms)**........................... Building Contracts (T o ta l).............................. “ “ (Residential)...................... Production— Coal (O., W. Pa., E. K y.)........... — Cement (O., W. Pa., E. K y.). . . . “ — Elec. Power (O., Pa., Ky.)*. . . . “ — Petroleum (O., Pa., K y.)*........... “ — Shoes................................................... *Jul; **£<er Individual unit operated. Aug. Aug. Aug. Aug. Au K. 1937 1936 1935 1934 19 33 71 57 92 81 59 32 81 30 47 45 12 9 40 43 86 92 85 87 92 95 61 61 80 72 60 73 110 94 86 80 46 55 54 44 50 87 66 80 74 72 88 63 57 78 59 84 77 68 61 66 96 71 87 82 66 41 61 44 36 25 23 55 44 12 10 75 58 62 79 75 101 114 68 78 78 189 179 153 131 136 135 125 119 111 101 132 140 145 124 126 Debits to Individual Accounts (Thousands 5 weeks % change ended from Sept. 22 1937 1936 + 1 3 .3 $ 76,173 Akron............. 12,386 + 2 4 .5 Butler............... + 1 6 .1 Canton........... 46,211 Cincinnati. . . . 403,554 + 6.8 + 1 2 .1 Cleveland. 733,126 + 0 .6 Columbus........ . . 203,537 86,912 + 2 5 .6 D ayton............. + 2 4 .0 Erie.................. 37,388 4,224 + 9.0 Franklin........... 8,368 + 1 6 .2 Greensburg. . . 16,543 + 2 0 .6 Hamilton + 2 7 .8 4,078 Hom estead.. . + 2 5 .9 22,244 Lexington. + 3 2 .7 16,760 Lima................. 6,879 + 2 9 .2 Lorain............... + 1 4 .0 Middletown . . , 13,219 13,421 + 2 2 .3 Oil City . , . 876,461 + 2 5 .6 Pittsburgh + 3 0 .4 11,159 Sharon.............. + 2 0 .9 Springfield 22,390 13,401 + 2 7 .7 Steubenville... + 2 6 .9 169,867 Toledo.............. Warren............. 12,018 + 2 5 .1 36,224 — 4.9 Wheeling......... Youngstown. . 63,167 + 1 5 .8 9,312 Zaneaville......... + 1 4 .2 Total............. 32,919,022 + 1 6 .0 of Dollars) Year to date Year to date Dec. 31, 1936 Jan. 2, 1936 to to Sept. 22, 1937 Sept. 23, 1936 $ 603,262 $ 512,932 93,323 73,260 352,886 289,683 3,146,563 2,801,236 5,548,581 4,769,522 1,640,846 1,495,883 666,695 537,625 294,079 220,771 31,801 28,427 65,613 58,357 115,347 95,322 30,382 22,882 220,028 164,379 125,992 97,245 48,147 34,521 96,683 79,029 100,475 85,336 6,897,979 6,026,984 82,508 64,947 167,966 136,514 99,314 71,524 1,228,481 998,087 92,837 70,661 310,774 275,372 475,423 387,820 73,977 63,195 $22,609,962 $19,461,514 % change from 1936 + 1 7 .6 + 2 7 .4 + 2 1 .8 + 1 2 .3 + 1 6 .3 + 9.7 + 2 4 .0 + 3 3 .2 + 1 1 .9 + 1 2 .4 + 2 1 .0 + 3 2 .8 + 3 3 .9 + 2 9 .6 + 3 9 .5 + 2 2 .3 + 1 7 .7 + 1 4 .5 + 2 7 .0 + 2 3 .0 + 3 8 .9 + 2 3 .1 + 3 1 .4 + 1 2 .9 + 2 2 .6 + 1 7 .1 + 16.2 1 Cigar tobacco production is 33 per cent larger than last year. Tobacco prices in sections where selling has started are higher than last year on medium and common grades and about the same on good or fancy grades. Wholesale and Retail Trade (1937 compared with 1936) DEPARTM ENT STORES (51) Akron...................................................... Cincinnati.............................................. Cleveland............................................... Columbus.............................................. Pittsburgh............................................. Toledo..................................................... Wheeling................................................ Youngstown.......................................... Other Cities......................................... District................................................... WEARING APPAREL (13) Cincinnati.............................................. Cleveland............................................... Pittsburgh............................................. Other Cities......................................... District................................................... FURNITURE (41) Cincinnati.............................................. Cleveland............................................... Columbus.............................................. D ayton................................................... Toledo..................................................... Other Cities......................................... District................................................... CHAIN STORES* Drugs— District (4 ).......................... Groceries— District (4).................... WHOLESALE GROCERIES (28) Akron...................................................... Cleveland............................................... Erie.......................................................... Pittsburgh............................................. Toledo..................................................... Other Cities......................................... District................................................... WHOLESALE DRY GOODS (10).. WHOLESALE DRUGS (10)............. WHOLESALE HARDW ARE (11).. *Per individual unit operated. Percentage Increase or decrease SALES SALES STOCKS August first 8 August 1937 1937 months + 2.1 + 14.0 + 2 3 .0 + 1 4 .1 + 14.2 + 3 3 .5 + 1 2 .3 + 8.8 + 19.7 + 9.5 + 1 1 .4 + 2 5 .4 + 1 1 .5 + 2 0 .1 + 2 7 .8 + 8.9 — 0 .9 + 1 5 .1 + 1 1 .1 + 13.9 + 3.8 + 1 9 .7 + 2 0 .4 + 3 9 .7 + 18.1 + 2 2 .3 + 2 1 .9 + 1 0 .0 + 1 5 .7 + 2 5 .2 + 1 0 .5 + 8.4 + 2 0 .5 + 7.3 + 1 2 .8 + 9 .6 + 1 7 .9 + 2 2 .9 + 2.3 + 1 8 .5 + 1 5 .9 + 1 5 .7 + 1 3 .8 + 17.1 + 8.8 + 2 6 .4 + 1.8 + 1 2 .6 — 2.8 + 16.2 + 2.4 + 1 9 .4 + 2 0 .5 — 9.4 — 0.2 + 3 7 .4 + 2 0 .5 + 1 6 .3 + 2.0 + 9.5 + 9.6 — 7.3 + 5.9 + 2.9 — 6.0 + 8.3 + 11.6 + 15.8 + 35.9 + 2.8 + 10.1 + 10.0 + 8.2 + 10.1 + 4.4 +20.2 + 8.9 + 7.4 + 9.0 + 42.2 + 1.6 + 14.9 + 13.4 + 17.7 + 19.9 + 13.9 Fourth District Business Statistics (000 omitted) August % change Jan.-Aug. % changi Fourth District Unless 1937 1937 from 1936 from 193< Otherwise Specified $18,481,000 + 4.7 Bank Debits— 24 cities.................$1 >,502,000 + 13.7 Savings Deposits— end of month: i 40 banks, O. and W. Pa............... $ 766,414 + 6.5 Life Insurance Sales: + 8.6 728,668 Ohio and Pa.................................... $ 78,634 + 3.8 Retail Sales: + 15.7 157,660 Dept. Stores— 51 firms................ 5 18,343 + 10.0 833 + 8.8 7,076 + 13.8 Wearing Apparel— 13 firms. . . .$ + 16.3 8,826 1,114 + 2.0 Furniture— 41 firms...................... $ Wholesale Sales: 10,603 + 14.9 1,380 + 17.7 Drugs— 10 firms............................. $ 10,007 + 9.0 1.342 + 1 . 6 Dry Goods— 10 firms................... $ 33,532 + 8.9 Groceries— 28 firms....................... $ 4,'5 42 + 7.4 13,368 + 19.9 Hardware— 11 firms...................... $ 1,618 + 1 3 .9 243,661 + 4 8 .5 Building Contracts— Total. . . . . . $ 28,973 + 37.3 72,635 “ “ — Residential. $ 9,378 + 2 4 .3 + 5 6 .0 5,662 — 27.1 512 + 3 5 .1 Commercial Failures— Liabilities $ 4192 — 15.0 462 + 7.0 “ # “ — Number. . . Production: 26,889 3,617 + 3 3 .4 + 4 2 .4 Pig Iron— U. S........................ tons 38,183 4,862 + 1 6 .2 + 3 0 .0 Steel Ingot— U. S....................tons 2,958,8172 + 12.8 Auto— Passenger Car— U. S......... 311,456s + 4 8 .8 663,3222 + 14.8 82,8662 + 3 3 .8 “ — Trucks— U. S....................... Bituminous Coal, O., W. Pa., E. + 1 2 .2 — 0 .4 116,475 13,574 Ky..............................................tons 6,890 + 13.7 1,219 — 11.2 Cement— O., W. Pa., W. Va. bbls. Elec. Power, O., Pa., Ky. thous. 11,34 7* + 14.1 ............................................. k.w.h. 1,589s + 5.0 + 7.8 16,2254 + 8.1 Petroleum— O., Pa., Ky. ...b b ls. 2,4903 5 5 + 7.9 — 5.9 S h oes........................................ pairs 31,515* — 3.6 4,291s — 21.5 Tires, U. S...........................casings Bituminous Coal Shipments: + 11.4 29,883 5,820 — 5.4 L. E. Ports................................tons Iron Ore Receipts: + 75.9 30,838 7,196 + 4 0 .5 L. E. Ports................................tons Jan.-July 1 not available confidential a actual number 8 July 8 THE MONTHLY BUSINESS REVIEW Summary of National Business Conditions By the Board of Governors of the Federal Reserve System In August industrial activity advanced from the level of the two INDUSTRIAL PRODUCTION preceding months and on a seasonally adjusted basis was close to the volume of last spring. Early reports for September indicate a decline in steel output and a seasonal decrease in the production of automobiles. Production and Employment Volume of industrial production, as measured by the Board’s sea sonally adjusted index, was 117 percent of the 1923-1925 average in Au gust as compared with a level of 114 percent in June and July and 118 percent during the spring. Steel production rose slightly further and was close to the high level prevailing before strikes curtailed output in June. Automobile production was maintained in considerably larger volume than is usual in the month preceding the shift to new model pro duction. Lumber output declined, following a period of increase. In Index of physical volum e of production, adjusted for seasonal variation, 1923-25 = the nondurable goods industries output increased in August, reflecting 100. By months, January 1929 to August chiefly increases at cotton and woolen textile mills, following consider 1937, the latest figure being 117, pre able declines in the preceding month. Activity at m eat packing estab liminary. lishments increased somewhat from an extremely low level. Shoe pro duction showed less than the usual seasonal rise. At mines, output of coal increased less than seasonally, while crude petroleum production continued to expand. FACTORY EMPLOYMENT AND PAYROLLS Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, declined somewhat in August and the first half of September. Awards for private residential building showed little change and were in about the same volume as in the corresponding period of 1936, while publicly-financed residential building declined and was in considerably smaller volume than last year. Factory employment, which had increased in July, showed less than a seasonal rise in August. Factory payrolls increased by about the usual seasonal amount. The number employed at steel mills increased somewhat further, while at automobile factories, railroad repair shops, and sawmills employment declined. In the textile industries employment in the production of fabrics decreased somewhat, while employment in the production of wearing apparel increased. Changes in employment Indexes of number employed, adjusted for seasonal variation, 1923-25 = 100. By in most other m anufacturing industries were small. months, January 1929 to August 1937. I*ate$t figures, Employment 102.2; Payrolls Agriculture 103.7. Departm ent of Agriculture crop estim ates based on September 1 conditions were about the same as the estim ates a month earlier, except for an increase in cotton and a decrease in corn. Output of leading crops is substantially larger than last season. Supplies of livestock and m eats are expected by the D epartm ent of Agriculture to continue sm aller than last year. Distribution Mail order sales and sales at departm ent stores showed somewhat less than the usual seasonal increase from July to August. Freightcar loadings continued at the level of the previous month. Commodity Prices Cotton prices declined considerably further from the middle of August to the third week of September and there were smaller decreases in cotton goods, silk, hides, steel scrap, copper scrap, and lumber. Prices of livestock and livestock products, after some decline in the latter part of August and the first week of September, advanced sharply in the W ednesday figures. January 3, 1934 to middle of September. September 22, 1937. Bank Credit Excess reserves of member banks increased in the five-week period ending September 22 from $800,000,000 to $1,000,000,000, as the result EXCESS RESERVES OF MEMBER BANKS of a release of gold by the Treasury from its inactive account. The bulk of the increase in excess reserves went to New York City banks and on September 22 these banks had excess reserves of $350,000,000, Chicago banks had $50,000,000, and banks elsewhere $600,000,000. Commercial loans at reporting member banks in 101 leading cities, reflecting in part seasonal demands, continued to increase substantially during the four weeks ending September 15, both in New York City and outside. Holdings of United States Government obligations and of other securities showed a further decrease, with the result th at total loans and investments declined somewhat. Money Rates Rates on 9-month Treasury bills declined from 0.71 percent early Wednesday figures of estim ated excess in September to 0.44 percent later in the month, and average yields on reserves for all member banks and for long-term Treasury notes declined from about 1% percent to below 1% New York City, January 6, 1932 to Sep percent tember 22, 1937. 19S9 1930 1931 5f DOLLARS J932 1933 1934 1935 1936 1937 8ILU0NS OF DOLLARS
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