Full text of Economic Quarterly (Federal Reserve Bank of Richmond) : August 1926

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

_______________WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT__________________
RICHMOND, VIRGINIA

DISTRICT SUMMARY—

July is a between
seasons month, and business is usually in smaller
volume than in earlier or later months. This year
July trade followed the seasonal trend and was
less active than in June, but the recession was
perhaps less marked than in most years. Debits
to individual accounts figures for recent weeks,
while seasonally below those of the preceding
month, were above those of 1925, indicating
clearly the increased volume of trade done this
year in July and early August. Confidential re­
ports received from thirty-one of the Fifth Dis­
trict's leading department stores tell the same
story, July 1926 sales exceeding those of July
x925 by 3.1 per cent. Business failures in July
were fewer in number and lower in liabilities in­
volved than those of July a year ago. Building
permits issued were slightly below those issued
in July last year, but a large volume of work was
provided for, the unfavorable contrast resulting
only from comparison with the record figures of
1925. Labor is seasonally employed, wages con­
tinue for the most part at the high levels set
during and soon after the war, and the general
prosperity would seem to be attested by steadily
rising bank deposits and the volume of banking
transactions.
Prospects for fall trade in the Fifth District
improved distinctly between the middle of July
and the middle of August. Estimates of probable
production for nearly all leading crops were
higher on August 1st than a month or even two
weeks earlier, the gains arising from more or
less general rains during the latter part of July.
Favorable weather contined through the first
half of August throughout most of the District.
Perhaps the one event of the past four weeks that
did most to change the outlook in the Fifth Dis­
trict was the opening of the South Carolina to­
bacco markets, which occurred on August 10th.
Prices on the opening averaged around 22 cents
per pound, and have since gone above that figure.
This year’s prices are at least a third higher than
those of 1925, and are also above those of any
recent year. In spite of lower yields of tobacco
this year, it now appears likely that the money
returns to growers may exceed receipts for last
year’s crop.

RESERVE BANK OPERATIONS—


Between
http://fraser.stlouisfed.org/
July 15th and August 15th, both this year, there
Federal Reserve Bank of St. Louis

AUGUST 31,-1926
was a seasonal increase in Reserve bank credit
extended to member banks, chiefly due to in­
creased needs incident to the opening of the to­
bacco markets in South Carolina and the market­
ing of other early agricultural products. Total
rediscounts for member banks held by the
Federal Reserve Bank of Richmond rose from
$41,111,000 on July 15th to $43,510,000 on August
15th, and the volume of Federal Reserve notes in
actual circulation, after declining steadily since
the first of the year, turned upward and increased
by almost exactly the amount shown in the redis­
count increase, note circulation rising from $70,591.000 on July 15th to $72,896,000 on August
15th. Total bill holdings of the Federal Reserve
Bank of Richmond rose between the two dates
from $50,153,000 to $55,415,000. Member bank
reserve deposits declined slightly, dropping from
$67,459,000 to $65,753,000. As a result of the
changes in the items enumerated, the cash re­
serves of the Federal Reserve Bank declined
from $89,467,000 on July 15th to $84,902,000 on
August 15th, and the percentage of cash reserves
to note and deposit liabilities combined dropped
from 63.35 Per cent to 59*8 i per cent.
In comparison with the figures on the Reserve
Bank’s statement for August 15, 1925, those for
August 15, 1926, show increases during the
period in Federal reserve notes in actual circula­
tion and reserve deposits of member banks, but
the volume of rediscounts for member banks,
total bill holdings of the Reserve bank, cash re­
serves and the reserve percentage were smaller
on the 1926 date than a year ago. Between the
two dates mentioned, the volume of rediscounts
declined from $50,872,000 to $43,510,000, and
total bill holdings, including both rediscounts for
members and bankers’ acceptances purchased in
the open market, dropped from $56,447,000 to
$55>4 I 5>°°°- The cash reserves of the Federal
Reserve Bank of Richmond decreased from $85,559.000 on August - 15th last year to $84,902,000
on August 15th this year, and the percentage of
reserves to note and deposit liabilities combined
dropped from 61.18 per cent to 59.81 per cent.
On the other hand, the volume of Federal Re­
serve notes in actual circulation rose from $70,819.000 on August 15, 1925, to $72,896,000 on
August 15, 1926, and member bank reserve de­
posits at the Reserve bank increased from $65,378.000 to $65,753,000 during the same period.

CONDITION OF SIXTY-EIGHT REPORTING MEMBER BANKS IN SELECTED CITIES
ITEMS
1.
2.
3.
4.
5.
6.
7.

Total Loans and Discounts (including
all rediscounts) ........................................
Total Investments in Bonds and Se­
curities ..................................................
Reserve Balance with Federal Reserve
Bank ..........................................................
Cash in Vaults..............................................
Demand Deposits........................................
Time Deposits ............................................
Borrowed from Federal Reserve Bank....

August 11, 1926

July 14, 1926

August 12, 1925

% 519,974,000
140.225.000
42.313.000
15.286.000
387.565.000
209.308.000
15.309.000

$ 512,649',000
139.194.000
41.017.000
14.109.000
378.285.000
209.082.000
14.345.000

$ 503,838,000
131.849.000
38.844.000
16.869.000
356^337,000
202.250.000
17.498.000

The accompanying table shows the principal items of condition for sixty-eight regularly re­
porting member banks as of three dates, August n , 1926, July 14, 1926, and August 12, 1925, thus
affording an opportunity for comparing the latest available figures with those of the preceding
month this year and the corresponding month last year. It should be understood that the figures
shown reflect conditions as of the report dates only, and . are not necessarily the highest or lowest
figures that occurred during the interval between the dates.
All items on the statement as of August 11, 1926, show increases over the figures for the
previous month, July 14, 1926, some expansion in the volume of business in the reporting banks
at this time being a seasonal development as a result of the opening of early markets for agri­
cultural products. Total loans to customers rose from $512,649,000 on July 14, 1926, to $519,974.000 on August n th , and the reporting banks also increased their investments in bonds and
securities from $139,194,000 to $140,225,000 during the four weeks. Reserve balances at the Reserve
bank rose from $41,017,000 last month to $42,313,000 this month, and cash in vaults rose from $14,109.000 to $15,286,000. Deposits registered material increases, demand deposits rising from $378,285.000 to $387,565,000 between July 14th and August n th , and time deposits increasing from $209,082.000 to $209,308,000. Borrowing by the reporting banks at the Reserve bank increased slightly,
rising from $14,345,000 on July 14th to $15,309,00x5 on August n th .
Between August 12, 1925, and August n , 1926, most items on the reporting banks’ statements
increased. Total loans and discounts for customers, which stood at $503,838,000 on the 1925 date,
rose to $519,974,000 this year, and investments in bonds and securities increased from $131,849,000
to $140,225,000. During the period binder review the reserve balances of the reporting banks rose
from $38,844,000 to $42,313,000. Both demand and time deposits increased since the middle of
August last year, demand deposits rising from $356,337,000 to $387,565,000 and time deposits rising
from $202,250,000 to $209,308,000. On the other hand, cash in vaults declined from $16,869,000 to
$15,286,000 between August 12, 1925, and August n , 1926, and borrowing at the Reserve Bank
by the reporting members declined from $17,498,000 to $15,309,000.

SAVINGS DEPOSITS

— A ggregate deposits in fourteen regularly reporting mutual savings
banks in Baltimore totaled $155,255,756 at the close of business July 31, 1926, a slightly lower figure
than the total of $155,264,025 on deposit on June 30th this year but a higher figure than the total
of $149,932,660 reported by the same institutions on July 31, 1925, During six of the past seven
years deposits in mutual savings banks declined slightly between June 30th and July 31st. Time
deposits in sixty-eight reporting member banks increased during the past month, however, rising
from $209,082,000 on July 14th to $209,308,000 on August n th . On August 12, 1925, time deposits
in the sixty-eight member banks totaled $202,250,000.

BUSINESS FAILURES

— “The July insolvency report is favorable,” says Dun's Review for
August 7th. “ Not only is the number of commercial failures for that period less than the totals for
all months since last October, but it is moderately below the number for July 1925. This showing
appears the more satisfactory when further increase in number of firms in business is considered.
For seven months of the current year, defaults have been slightly fewer than those for the com­
parative months of 1925, while the liabilities reveal a decrease of more than 12 per cent. The July in­
debtedness rose moderately above that for June, but is below the amounts for all other months back
to last October, and is materially under the aggregate for July 1925. Moreover, it actually is the
smallest reported for July in six years.” Failures in July in the United States numbered 1,605, com­
pared with 1,708 in June this year and 1,685 m
y ear> while liabilities amounted to $29,680,009 in July 1926, $29,407,523 in June 1926, and $34,505,191 in July 1925.
Failures in the Fifth District during July numbered 105, an increase over the 96 failures reported
in June but approximately a third less than 156 failures in July 1925. Liabilities totaling $1,692,277
in July this year compare favorably with $1,719,126 reported for June 1926 and $3,207,713 in July
I 925


2

DEBITS TO INDIVIDUAL ACCOUNTS IN LEADING TRADE CENTERS
CITIES
Asheville, N. C.............
Baltimore, Md..............
Charleston, S. C. ...... .
Charlestown, W. Va. .
Charlotte, N. C...........
Columbia, S. C..............
Cumberland, Md...........
Danville, Va..................
Durham, N. C. ..........
Greensboro, N. C.........
Greenville, S. C...........
Hagerstown, Md..........
Huntington, W. Va. .
Lynchburg, Va............
Newport News, Va. .
Norfolk, Va..................
Raleigh, N. C..............
Richmond, Va. ...........
Roanoke, Va................
Spartanburg, S. C.......
Washington, D. C.......
Wilmington, N. C. —
Winston-Salem, N. C
Totals................

TOTAL DEBITS FOR THE FOUR WEEKS ENDING
July 14, 1926
August 12, 1925
August 11, 1926
$ 34,603,000
386,570,000
21,405,000
31,385,000
42,750,000
16,523,000
8,073,000
8,247,000
23,434,000
21,331,000
18,564,000
9,828,000
22,344,000
16,607,000
18,960,000
71,663,000
23,332,000
115,847,000
26,199,000
10,798,000
214,126,000
16,837,000
32,173,000

$ 39,076,000
451,685,000
22.789.000
35.507.000
44,142,000
15,747,000
10,056,000
9,372,000
26,242,000
23.959.000
19.208.000
10,321,000
23,847,000
19,995,000
12,736,000
74,070,000
34,401,000
130,054,000
27,988,000
12,207,000
243,432,000
17,696,000
36,447,000

$ 24,843,000
393,399,000
18,418,000
30,908,000
40,265,000
12,961,000
8,511,000
8,425,000
23,075,000
16,216,000
19,405,000
9,374,000
23,227,000
17,028,000
7,876,000
55,585,000
29,685,000
113,086,000
22,485,000
11,405,000
203,886,000
15,258,000
33^,068,000

$1,191,599,000

$1,340,977,000

$1,138,389,000

Debits to individual, firm and corporation accounts in the leading trade centers of the Fifth
Federal Reserve District are shown in the accompanying table for three periods of four weeks each,
ended August n , 1926, July 14, 1926, and August 12, 1925. The figures for the latest available four
weeks period, ended August n th , may be compared with those reported for the preceding four
weeks ended July 14th this year and with those for the corresponding four weeks ended August
12, 1925.
Aggregate debits of $1,191,599,000 in the reporting banks during the four weeks ended August
n th show a seasonal decrease under the total of $1,340,977,000 reported for the preceding like
period, ended July 14th, the semiannual and quarterly payments occurring on and around July 1st
increasing debits totals for the period containing that date. The decline was uniformly distributed
throughout the District, only two of the twenty-three reporting cities showing higher figures for
the more recent four weeks.
In comparison with the corresponding four weeks in 1925, ended August 12th, when debits
totaling $1,138,389,000 were reported, the total of $1,191,599,000 for the four weeks ended August
11, 1926, shows an increase of $53,210,000, fourteen of the twenty-three cities showing higher
figures this year. A majority of the cities reporting lower figures this year are cotton or textile
centers.

LABOR

— Labor continues seasonally employed throughout the Fifth District, no important
developments having been reported during the past month. W orkers are available for practically
all needs except in some agricultural sections, but there is no unusual number of unemployed labor­
ers. W ages are stationary, and no disputes of more than local importance are noticeable at present.
On the whole, supply and demand appear practically balanced in the labor market, and relations
between employers and employees seem to be harmonious.

COAL

— Total production of bituminous coal amounted to 43,472,000 net tons in July, an aver­
age daily output of 1,672,000 tons, compared with 41,992,000 tons mined in June, a daily average
of 1,615,000 tons.
Total production this calendar year to August 7th was 321,118,000 net tons, a
higher figure than production during the corresponding period of 1925, 1924, 1922, 1921 and 1920,
but a lower figure than production in the first 185 days of 1923, when stocks were being rebuilt
after the long strike of 1922. Anthracite production in July totaling 8,429,000 net tons was lower
than June production, but the shortage of anthracite as a result of last winter’s long strike has been
largely caught up. On July 1st reserve stocks of bituminous coal were about normal for that date,
and totaled approximately 39,000,000 net tons, estimated to be sufficient to supply the country’s
needs about 34 days. Retail yards are well stocked with both hard and soft coal, and in most cities
the first of the usual late summer and fall increases in prices have been put into effect. The British



3

coal miners’ strike has increased the demand for American coal materially, and retailers state that
probably more householders are filling their bins before coal weather than is usually the case.
W est Virginia continues to lead the country in output of bituminous coal, and Hampton Roads ports
lead in exports by a wide margin.

TEXTILES

— Conditions in the textile industry appear to be somewhat better than a month
ago, although there has been little change in the conservative attitude of buyers. Reduced opera­
tions at the mills have kept down surplus stocks, however, and buyers are beginning to find it
more difficult to secure immediate shipments of their orders. The industry suffered a temporary
setback when the cotton crop condition report was issued by the Department of Agriculture on
August 9th, but the market has begun to recover and the Southern Yarn Spinners Association
reports that inquiries for certain numbers of yarn have again become active. The Fifth District
mills consumed 195,944 bales of cotton in July, compared with 212,398 bales consumed in June this
year and 189,871 bales used in July 1925. All of the Fifth District cotton manufacturing states con­
sumed less cotton in July than in June, but July consumption in Virginia and North Carolina was
above July 1925 consumption. Virginia and the two Carolinas used 42.5 per cent of all the cotton
consumed in the United States during July this year, compared with 39.2 per cent of July 1925
consumption used in the same states. Early reports for August indicate that some of the mills
have increased running time after the curtailment of the past two months.

BUILDING OPERATIONS FOR THE MONTHS OF JULY 1926 AND 1925.
z0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

Premits Issued
New Construction
Alterations
New
Repairs
CITIES
1926
1925
1925
1926 1925 1926 1925 1926
530 475 1,149 845 $ 3,004.080 $ 2,802,400 $ 613,680 $ 845,400
Baltimore, Md.
35,941
70,015
5,100
12,775
Cumberland, Md... 19 29
8 10
4
4
164,600
980
10,500
Frederick, Md......
5
18,650
6
1,870
52,900
347,705
8 17 119,885
Hagerstown, Md... 23 31
76,342
2,938
17,485
9 14
27,140
Danville Va.......... 13 10
9,310
46,594
59,065
19,020
Lynchburg, Va..... 20 21 35 14
58,979
32,672
511,960
Norfolk, Va.
86 124 75 60 199,420
6,951
9
11,105
895
4,581
Petersburg, Va..... 3
1
7
Richmond, Va.
665,677
91,055 100,722
136 143 82 89 500,979
14,600
15,940
Roanoke, Va.
144,160
80 78 39 37 242,495
2,625
9,700
Bluefield, W. Va... 14 21
5
3
34,900
74,025
21,695
Charleston, W. Va. 31 35 12 12 1,804,606
93,774
9,225
2,285
8
9,980
3,200
2,975
Clarksburg, W. Va 10 10
9
5,700
8,500
Huntington, W.Va. 58 142
9
68,885
352,465
3
2,950
7 289,200
6,200
9
99.425
Parkersburg,W.Va 23 18
33,069
12,840
Asheville, N. C..... 64 57 58 62 408,135
333,630
60,325
23,460
Charlotte, N. C..... 39 63 17
7 585,494
375,090
22,550
Durham, N. C.
252,506
11,900
45 35 10 17 203,675
21,481
Greensboro, N. C. 70 62 28 24 446,825
314,111
8,250
8,350
High Point, N. C... 60 75 12 12 218,010
254,810
17,300
Raleigh, N. C........ 43 50
5 471,820
191,793
14,583
3,250
7
Salisbury, N. C..... 9 12
6 13
83,300
141,200
11,150
7,300
Wilmington, N. C. 9 11 11
24,900
48,900
8,700
6,900
7
Winston-Salem, N. C. 88 68 45 61 377,620
50,705
247.315
31,495
Charleston, S. C... 11 19 33 56
13.850
57,943
15,933
26,837
Columbia, S. C..... 13 16 31 51
43,650
15,365
386,490
27,813
Greenville, S. C.... 10 14 22 23 140,500
201,600
13,130
31,610
72,200
121,821
Spartanburg, S. C. 15 33 15 33
7,550
18,015
Washington, D. C. 322 413 278 187 4,106,865 5,545,860
599,685 270,300
Totals.......... 1,850 2,071 2,027 1,696 $13,610,704 $13,938,777 $1,688,597 $1,680,562

Increase or Per Cent
Decrease
of
of
Increase 0
Total
or
Valuation Decrease Z
$— 30,040 — 0.8# 1
— 41,749 — 50.4 2
— 155,470 — 88.8 3
— 278,850 — 69.6 4
— 63,749 — 67.9 5
— 2,761 — 4.0 6
— 286,233 — 52.6 7
7,840 99.9 8
— 174,365 — 22.8 9
99,675 62.8 10
— 32,050 — 41.8 11
1,698,362 1,470.8 12
7,470 136.2 13
— 286,380 — 79.3 14
193,025 188.5 15
54,276 14.8 16
247,269 62.0 17
— 59,481 — 21.6 18
119,483 35.6 19
— 27,850 — 10.6 20
291,360 149.4 21
— 54,050 — 36.4 22
— 22,200 — 39.8 23
111,095 37.3 24
— 54,997 — 64.9 25
— 330,392 — 82.2 26
— 79,580 — 34.1 27
— 60,086 — 43.0 28
—1,109,610 — 19.1 29
$— 320,038 — 2.09b

—Denotes decrease
NOTE-- The figures in the above table reflect the amount of work provided for in the corporation limits of the several
cities, but take no account of suburban developments.
Building operations provided for in permits issued in the Fifth District in July showed a decline
from June this year and July last year in both number of projects and estimated valuation. Twentynine reporting centers issued 1,850 permits for new construction in July 1926, compared with 2,009
permits issued in June this year and 2,071 permits issued in July 1925, while July valuation figures of
$13,610,704 compare with $17,108,197 in June 1926 and $13,938,777 in July 1925. A moderate decline
in July figures from those of June is seasonal, however. Alteration and repair permits issued in July
numbered 2,027, with estimated valuation of $1,688,597, compared with 1,696 permits and a valuation
of $1,680,562 for the same class of work in July last year. Combined valuation for all classes of
work totaled $15,299,301 in July in the twenty-nine cities, a decrease of 2 per cent under the total



4

of $15,019,339 for July 1925. Larger valuation figures for July 1926 were reported by ten of the
twenty-nine cities, five of the ten being in North Carolina. The most notable increase was re­
ported by Charleston, W. Va., with a gain of 1,470.8 per cent over the figures of July 1925. In most
of the reporting cities the shortage of building resulting from the World W ar appears to have been
about made up, and in some cases too much construction of certain types of work has probably
been done recently. Rents have declined moderately in many cities as a surplus of apartments, flats
and houses became available, but there have not been sufficient reductions to stop further apartment
and flat building. Suburban work is active around all cities, easier transportation with lower taxes
and room for gardens and yards influencing many city workers to go outside the city limits.

COTTON—

Spot cotton prices in the Carolinas averaged slightly higher during the past four
weeks than during the preceding like period. The average price paid on the leading markets dur­
ing the week ended July 17th was 16.82 cents per pound for middling upland short staple, but the
week ended July 24th averaged 17.07 cents and the last week of July averaged 17.63 cents. The
first week in August witnessed a slight recession to an average of 17-53 cents, but in the latest
week for which figures are available, ended August 14th, the average price paid was 17.90 cents.
All of these are official figures and show prices actually paid to growers, but very little cotton is
sold by the growers at this season and therefore the prices indicated are more or less nominal.
The Census Bureau's cotton consumption report for July was issued on August 14th, and gave
the number of bales used as 460,918, a lower number than the 518,504 bales consumed in June this
year or the 483,926 bales used in July last year. Total consumption for the cotton year ended July
31 was placed at 6,450,987 bales, compared with 6,193,417 bales consumed in the preceding year,
ended July 31, 1925. Stocks of cotton on hand July 31st in manufacturing establishments totaled
1,096,521 bales, compared with 1,267,796 bales so held on June 30, 1926, and 865,842 bales on July
31, 1925. Cotton in public warehouses and compresses totaled 1,936,662 bales on July 31st, 2,407,816 bales on June 30th, and 514,006 bales on July 31, 1925. Spindles active in July numbered 31,082,482, compared with 31,770,900 in June this year and 31,737,346 in July last year. Exports in
July rose to 365,522 bales from 346,774 bales exported in June 1926 and 202,468 bales sent abroad
in July a year ago. Imports of 12,090 bales in July were below 22,137 bales in June this year and
19,927 bales in July 1925. Cotton consumed in cotton growing states totaled 334,752 bales, or 72.6
per cent of national consumption, compared with 327,040 bales, or 67.6 per cent of national con­
sumption, used in the same states in July a year ago.
On August 9th the Department of Agriculture issued its August 1st condition report. The
condition figure was given as 69.8 per cent of a normal, a lower figure than was reported at the
middle of July, but the decline in condition was less than usual during that period and the Depart­
ment therefore raised its estimate of probable production from 15,368,000 bales based on the July
16th condition to 15,621,000 bales on the basis of the August 1st condition.
The Department of
Agriculture also issued two other possible production figures, one of 14,425,000 bales based on aver­
age conditions during the balance of the growing season as poor as those of 1921, 1922 and 1923,
and one of 17,510,000 bales based on conditions as favorable as those of 1924 and 1925.
In the Fifth District, the Virginia condition of 72 on August 1st showed a slight improvement
over the condition of 71 on July 16th this year but was below the 75 condition on August 1, 1925.
North Carolina's condition figure also rose during the last half of July, from 68 to 70, but on August
1st was below the 75 reported on the same date a year ago. South Carolina's condition of 53 on
August 1st was not only lower than the 55 reported on July 16th and the 62 reported on August 1,
1925, but was lowest for any state in the United States. The poor condition figures in the Fifth
District are due to dry weather, all cotton sections having suffered more or less during the early
weeks of the season. In northwestern South Carolina a severe drought prevented planting at the
proper time, and many seed never came up when they were planted. The dry section in South
Carolina is particularly hard hit this year because this same section experienced a similar drought
in the spring and summer of 1925.
— SOUTH CAR O LIN A tobacco markets opened on August 10th, and around 2,500,000
pounds were sold the first day. Prices averaged approximately 22 cents, some piles selling as high
as 80 cents per pound. On the whole, opening prices were fully a third higher than at the opening
last year. The Cooperative Association has retired from the field this year, and auction markets are
handling the entire crop. South Carolina's tobacco yield is expected to be about 52,000,000 pounds
this year in comparison with 71,000,000 pounds harvested in 1925, but if present prices continue, re­
turns to growers promise to be about the same as last year.

TOBACCO

VIR G IN IA'S tobacco production this year is estimated at approximately 120,000,000 pounds, com­
pared with 129,500,000 pounds in 1925, but if the prices being paid in South Carolina indicate the prob­
able prices for the Virginia crop, this year's yield should be more profitable than that of last year.
NORTH CAROLIN A, the largest tobacco growing state in the Fifth District, expects a crop of
approximately 324,000,000 pounds this year, compared with about 378,000,000 pounds in 1925. The
North Carolina markets will open early in September.



5

M A R Y LA N D tobacco prospects at the first of August indicated a production of 26,826,000 pounds
for 1926, compared with 24,690,000 pounds raised last year.

AGRICULTURAL NOTES

— Agricultural conditions improved in the Fifth Federal Reserve Dis­
trict between the middle of July and the middle of August, nearly all sections receiving some rain.
Crops are generally from ten days to two weeks late, however, and the ultimate yields will depend
more than is usually the case upon favorable weather the next few weeks and the date of the first
killing frost.
M A R YLA N D estimates of probable production this year are nearly all higher than last year,
and higher also than the five-year averages. Maryland’s corn crop is estimated at 21,938,000 bushels,
compared with 25,560,000 bushels gathered last year, and this year’s hay crop is expected to be 428,000
tons compared with 570,000 tons in 1925. All other leading crops show probable yields for this year
higher than for last year. The wheat yield of Maryland for 1926 was 12,181,000 bushels and for 1925
it was 10,920,000 bushels. Irish potatoes will produce 4,528,000 bushels this year, compared with
3.212.000 bushels last year. Sweet potatoes will yield 1,439,000 bushels compared with 1,290,000
bushels in 1925. The commercial apple crop of Maryland is estimated at 490,000 barrels for 1926 and
324.000 barrels in 1925.
V IR G IN IA crops compare favorably on the whole with last year, although they are late and
much depends upon favorable weather the balance of the season. The probable yield of corn this
year is 41,696,000 bushels, compared with 36,058,000 bushels gathered in 1925. The tobacco crop is
below that of last year, but at present it seems highly probable that higher prices will make this year’s
crop more profitable to the growers. Irish potatoes are expected to yield 12,740,000 bushels and
sweet potatoes 4,954,000 bushels, both exceeding the production of 11,340,000 bushels of Irish potatoes
and 3,996,000 bushels of sweet potatoes grown in 1925. The oat crop of 4,486,000 bushels is below
the yield of 5,826,000 bushels in 1925, but a crop of wheat totaling 11,509,000 bushels this year is
much above the total of 8,946,000 bushels harvested last year. Hay prospects for 878,000 tons are
above the crop of 768,000 tons cut in 1925, and this year’s crop was cured in splendid condition. The
peanut crop of Virginia, estimated at 109,793,000 pounds, is below the final estimate of 131,100,000
pounds in 1925. Fruit prospects in Virginia are far above those of a year ago. The commercial apple
crop is now estimated at 3,107,000 barrels, compared with 1,440,000 barrels in 1925.
NORTH CAR O LIN A crops benefitted materially from rains during the last half of July and
early August, and present prospects indicate yields that compare favorably with last year. North
Carolina estimates of production for this year are not at hand at present, however.
SOUTH CAR O LIN A crops, with the exception of cotton and tobacco, are more promising than
they were a year ago, and in the case of tobacco higher 1926 prices will probably about balance the
lower yield. The South Carolina corn crop averages above that of last year, and a crop of 22,000,000 bushels is expected, in comparison with 19,483,000 bushels in 1925. The sweet potato crop is
estimated at 4,029,000 bushels this year and 2,860,000 bushels last year. Peanuts promise a crop of
7.904.000 bushels, compared with 6,020,000 bushels in 1925. The small grain crop of the state was
exceptionally good this year.
W E S T V IR G IN IA crops average somewhat better than in 1925. The corn crop is below that of
last year, the yield of oats is approximately the same, and hay yields are below those of 1925. T o­
bacco, Irish and sweet potato, wheat and commercial apple yields are expected to be better this year
than in 1925, the gain in the apple crop being almost 100 per cent.

WHOLESALE TRADE, JULY 1926
Percentage increase in sales in July 1926, compared with sales in July 1925:
35 Groceries
12 Dry Goods
8 Shoes
18 Hardware
5 Furniture
12 Lhmgs
— 5.5
—10.2
10.5
10.9
—49.9
—"6.5
Percentage increase in July 1926 sales, compared with sales in June 1926:
— 2.0
4.4
— 9.6
3.0
—25.9
2.8
Percentage increase in total sales since Jan. 1st, compared with sales during the same seven months in 1925:
— 1.8
— 4.1
6.9
.8
—11.4
1.9
Percentage increase in stock on July 31, 1926, compared with stock on July 31, 1925:
— 1.4(11)
— 6.7(5)
16.4(4)
6.9(8)
Percentage increase in stock on July 31, 1926, compared with stock on June 30, 1926:
— 3.1(11)
5.0(4)
6.9(4)
2.0(6)
Percentage of collections in July to total accounts receivable on July 1, 1926:
62.1(21)
29.4(8)
26.4(6)
33.0(13)
45.0(3)
62.6(8)
— Denotes decreased percentage.
NOTE: The number of firms reporting stock and collection data in each group is shown immediately follow­
ing the percentages.



Ninety wholesale firms sent reports on their July business to the Federal Reserve Bank of Rich­
mond. Shoe and hardware jobbers averaged increases in sales in July over July a year ago, but sales
declined in groceries, dry goods, furniture and drugs. The marked decline in furniture sales was due
chiefly to unusually large sales by one factory in July 1925. July sales were above June 1926 sales
in dry goods, hardware and drugs, but were smaller in groceries, shoes and furniture. Total sales
this year were smaller in groceries, dry goods and furniture than in the first seven months of 1925,
but shoe, hardware and drug sales increased this year.
Stocks of dry goods, shoes and hardware increased during July 1926, and at the end of the month
stocks of shoes and hardware in jobbers’ hands were above stocks on July 31, 1925. Grocery stocks
declined in July, and on July 31st stocks of both groceries and dry goods were smaller than those on
July 31st last year.
Collections in July improved slightly over June collections in furniture and drugs, but collections
in groceries, dry goods, shoes and hardware were slower, chiefly due to seasonal dullness. The per­
centage of total collections in July to accounts receivable on July 1st varied widely of course, rang­
ing downward from 62.6 per cent for drugs through groceries, furniture, hardware and dry goods to
26.4 per cent for shoes.

FIGURES ON RETAIL TRADE
As Indicated By Reports from Thirty-One Representative Department Stores for the
Month of JULY 1926
Percentage increase in July 1926 sales over sales in July 1925:
Baltimore
Richmond
Washington
Other Cities
District
.6
8.8
5.1
1.5
3.1
Percentage increase in cumulative sales from January 1st through July, over sales during the corresponding seven
months in 1925:
.9
4.5
6.3
3.7
3.5
Percentage increase in July sales over average July sales during the five years 1920-1924, inclusive:
7.1
25.6
28.3
5.6
16.3
Percentage increase in stock on hand July 31, 1926, over stock on July 31, 1925:
— 3.3
7.7
10.4
— 1.2
2.4
Percentage increase in stock on hand July 31, 1926, over stock on June 30, 1926:
— 5.5
— .6
— 7.0
— 6.4
— 5.7
Percentage of sales during July 1926 to average stock carried during that month:
20.9
22.3
23.6
19.5
21.8
Percentage of cumulative sales since January 1st to average stock carried during each of the seven months:
174.2
182.6
190.6
154.1
178.5
Percentage of outstanding orders on July 31st to total purchases of goods in 1925:
7.3
8.0
8.5
7.4
7.8
Percentage of collections in July to total accounts receivable on July 1st:
27.1
26.4
37.6
32.0
27.1
— Denotes decreased percentage.
Retail trade in department stores was seasonally in smaller volume in July than in June, but
thirty-one leading stores in the Fifth District reported July sales 3.1 per cent greater than sales in
July 1925. July sales also averaged 16.3 per cent above average July sales during the five years
1920-1924, inclusive, and total sales since January 1st this year were 3.5 per cent above sales during
the corresponding seven months of 1925.
Stocks on hand at the end of July this year were 2.4 per cent larger, at selling value, than stocks
a year ago, the increase being due to increases in Richmond and Washington. Baltimore and the
Other Cities stocks were smaller at the end of July than at the same time last year. Stocks declined
5.7 per cent between the end of June and the end of July, a seasonal development at midsummer, but
outstanding orders for merchandise increased sharply with the making of fall commitments.
The rate of stock turnover was slower in July than in recent months, but this is a normal mid­
summer dullness and was not marked this year. The percentage of sales in July to average stock
carried was 21.8 per cent, and the percentage of cumulative sales since the first of the year to aver­
age stock carried during each of the seven months was 178.5 per cent, indicating an annual turn­
over of 3.06 times.
Collections were comparatively slow in July, averaging 27.1 per cent of outstanding receivables
on July 1st compared with 28.4 per cent of outstanding receivables collected in June this year and 28.9
per cent collected in July 1925.




(Compiled August 20, 1926)

7

BUSINESS CONDITIONS IN THE UNITED STATES.
(Compiled by the Federal Reserve Board)

1501---

PERCENT

PER CENT

-------- 1150

[V
PRODUCTION IN
BASIC INDUSTRIES

Index of 22 basic commodities adjusted for seasonal variation (1919-100).
Latest figure-July 119.

Index of U. S. Bureau of Labor Statistics (1913-100, base adopted by Bureau).
Latest figure-July 150.7.
BILLIONS OF DOLLARS

10
1
All Other Loans
( Largely Commercial,,)
f.

\

—

•

1L

Inviestments S
-----------

Loans on Securities

M EM E3ER B A N K C R E D IT
1

1 ....

Monthly averages of weekly figures for banks in 101 leading cities. Latest
figures are averages for first three weekly report dates in August

Production in basic industries and factory employment and
payrolls declined slightly in July, but the decrease in production
was smaller than is usual at this season. Wholesale prices, after a
further decline in July, were at the lowest level in nearly two
100 years.
PRODUCTION. The Federal Reserve Board’s index of pro­
duction in basic industries, which is adjusted for seasonal varia­
tions, increased about one per cent in July. Declines in the output
of iron and steel and anthracite, and in the activity of textile mills,
were larger than the usual seasonal reductions, while production of
flour, copper, zinc, cement and petroleum increased. The manu­
facture of automobiles declined further and was smaller than a year
ago. Factory employment and payrolls showed the usual seasonal
decline in July, which is due largely to closing for stock taking and
repairs and to summer vacations. Declines were noted in nearly all
the important industries for which reports are received, with the
exception of leather and shoes and certain food products and build­
ing materials. Building contracts awarded in thirty-seven States
east of the Rocky Mountains declined in July for the fourth con­
secutive month and, as in June, were smaller than a year ago.
Figures for the first three weeks in August were also below those for
the corresponding period of last year. The principal decreases were
in the New York and Atlanta districts. The composite condition of
all crops, as reported by the Department of Agriculture, shows an
improvement of 2 per cent in July owing largely to the increase in
the expected production of wheat. Cotton production, on the basis
of August 16 conditions, is estimated at 15,248,000 bales, com­
pared with an output of 16,104,000 bales in 1925.
TRADE. The volume of trade at wholesale and retail showed
a further seasonal decline in July but continued to be large. Re­
tail trade was larger than a year ago, while wholesale trade was
slightly smaller. Sales of department stores and mail order houses
declined less than is usual at this season and were 4 per cent and
13 per cent, respectively, larger than in July of last year. Merchan­
dise inventories at department stores continued to decline in July
and at the end of the month were in about the same volume as last
year. Stocks of meat, dry goods and shoes carried by wholesale
firms were smaller than a year ago, but stock of groceries, hard­
ware and drugs were larger. Shipments of goods by railroads were
maintained at a high level during July for nearly all types of com­
modities. Loadings of grain were larger than for any month since
October 1924, and were in record volume for July.
PRICES. The Bureau of Labor Statistics index of wholesale
commodity prices declined about one per cent in July to the lowest
level since September 1924. Price declines were shown for most
commodity groups, particularly farm products and foods, while
prices of steel and other metals advanced. In the first three weeks
of August the prices of grains, cotton and rubber declined further,
while cattle, hogs, potatoes, coal and coke advanced in prices.
BANK CREDIT. Between the middle of July and the middle
of August, total loans and investments of member banks in leading
cities increased slightly, reflecting a growth in the seasonal demand
for credit for commercial purposes. Loans on securities on August
18 were in about the same volume as a month earlier, while the
banks’ investments declined. Between July 21 and August 18, dis­
counts for member banks and the holdings of acceptances increased
considerably, while United States security holdings were somewhat
reduced, with the consequence that the total volume of Reserve
bank credit increased by about $50,000,000. Money market con­
ditions became firmer in August. The rate on commercial paper,
which was 4 per cent in June and July, increased to 4 1A -41/2 per
cent, and the rate on 90-^ay bankers acceptances advanced to 3%
per cent. The discount rate of the Federal Reserve Bank of New
York was advanced on August 13 from 3 ^ to 4 per cent.

Weekly rates in New York money market; commercial paper rate on 4 to C
months paper and acceptance rate on 90 day paper.




8