Full text of Economic Quarterly (Federal Reserve Bank of Richmond) : February 1928

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MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT
RICHMOND, VIRGINIA
DISTRICT SUMMARY.— Business in the
Fifth Federal reserve district in January was
in smaller volume than in January a year ago.
Debits to individual account figures in clearing
house banks, one of the best business baro
meters, were less than during the same period
a year ago. Business failures in the district
were more numerous than in January last year,
but the liabilities were less. The employment
situation continued unsatisfactory, with many
workers in industry and building trades unable
to find employment. Coal production was rela
tively low in January, although somewhat better
in the Fifth district than in other bituminous
fields. Textile mills, having about caught up
with forward orders placed last fall, were forced
to curtail operations to some extent in January
to prevent accumulation of manufactured goods.
Cotton prices declined approximately $7.50 a
bale between the middle of January and the mid
dle of February. Retail trade, as indicated by
department store sales, was moderately below
sales in January a year ago, and wholesale trade
in most lines for which comparative figures are
available was also in smaller amount this year.
On the other hand, there are signs that seem
to offer encouragement to expectation of early
improvement in business. Bank loans to cus
tomers at the middle of February were below
those of last year, indicating some liquidation
of last year's indebtedness. Aggregate deposits
are considerably higher now than they were at
this time in 1927. Building permits issued in
January were the highest in estimated valuation
for any month since March 1926, and numerous
other large projects are planned for early con
struction, all of which should afford substantial
relief to the unemployed, and this in turn should
be favorably reflected in retail and wholesale
trade. Tobacco brought good prices in January,
and North Carolina growers are selling the
largest crop ever raised in that State for more
than $100,000,000. With a better supply of food
and feed stuffs on the farm, and smaller in
debtedness than in some other recent years,
farmers are in a favorable position to begin their
1928 operations. On the whole, most signs at
present
appear rather favorable, but much will

depend upon good weather.

FEBRUARY 29, 1928
RESERVE BANK OPERATIONS*— Redis
counts for member banks held by the Federal
Reserve Bank of Richmond declined slightly
during the past month, dropping from a total of
$26,405,000 on January 15th to $25,319,000 on
February 15th. Total earning assets of the
Richmond bank declined between the same dates
from $80,228,000 to $55,112,000, as a result of re
ductions of approximately $21,000,000 in hold
ings of bankers’ acceptances and $3,000,000 in
Government securities. Following a seasonal
trend, the circulation of Federal Reserve notes
continued to decline during the month under
review, falling from $72,412,000 at the middle of
January to $66,176,000 at the middle of Febru
ary. Member bank reserve deposits, in keeping
with a drop in deposits in member banks, de
clined from $73,176,000 on January 15th to $72,323.000 on February 15th. The several changes
mentioned, especially the marked reduction in
holdings of acceptances and Government securi
ties, raised the Bank’s cash reserves from $70,523.000 on January 15th to $92,379,000 on Febru
ary 15th, and brought up the ratio of cash re
serves to note and deposit liabilities combined
from 47.36 per cent to 64.96 per cent.
A larger volume of reserve bank credit was
outstanding in the Fifth district at the middle of
February this year than at the same time a
year ago. The volume of rediscounts for mem
ber banks held by the Federal Reserve Bank of
Richmond totaled $23,658,000 on February 15,
1927, compared with $25,319,000 on February
15, 1928. Total earning assets of the Richmond
bank increased, however, to a much greater ex
tent, larger holdings of bankers’ acceptances and
Government securities raising the total of earn
ing assets from $40,900,000 on February 15th last
year to $55,112,000 on the corresponding date
this year. Member bank reserve deposits also
increased during the year, rising from $69,175.000 to $72,323,000 between the middle of
February last year and the same time this year.
On the other hand, the circulation of Federal
reserve notes declined between the dates under
review from $74,493,000 to $66,176,000, and the
cash reserves of the Federal Reserve Bank of
Richmond dropped from $110,956,000 on Febru
ary 15, 1927, to $92,397,000 on February 15,
1928. Reflecting the changes in dollar amounts
enumerated herein, the ratio of cash reserves to
note and deposit liabilities combined decreased
from 74-§9 Per cent at the middle of Februar3r
last year to 64.96 per cent on February 15th this
year.

CONDITION OF SIXTY-SIX REPORTING MEMBER BANKS IN SELECTED CITIES
ITEMS

Feb. 15, 1928

Jan. 11, 1928

Feb. 16,1927

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

$515,471,000
174.559.000
43.137.000
11.784.000
380.873.000
246.687.000
15.499.000

$527,253,000
174.963.000
44.921.000
13.748.000
391.495.000
244.545.000
14.127.000

$517,778,000
138.887.000
44.160.000
12.793.000
388.316.000
213.944.000
13.109.000

In the accompanying table, the chief items of condition are shown for sixty-six member banks
in thirteen leading cities of the Fifth district, figures for three dates being included to allow for
comparison of the February 15, 1928, figures with those of January 11, 1928, and February 16, 1927,
the preceding month and year, respectively. It should be understood that the amounts shown repre
sent the condition of the reporting banks on the report dates only, and are not necessarly the highest
or lowest figures that occured during the period under review.
During the month between January n th and February 15th, both this year, total loans and dis
counts to customers of the reporting banks declined $11,782,000, and the banks reduced their invest
ments in bonds and securities by $404,000. Demand deposits also decreased during the month, fall
ing $10,622,000. The aggregate reserve balances of the reporting banks at the Federal reserve bank
dropped $1,784,000, and cash in vaults declined $1,968,000. Time deposits increased $2,142,000 be
tween January n th and February 15th, and borrowing by the sixty-six reporting banks at the re
serve bank rose $1,372,000.
The volume of credit extended by the reporting member banks to their customers in the form
of loans and discounts on February 15, 1928, was $2,307,000 less than the volume of loans and dis
counts outstanding on February 16, 1927, but total investments in bonds and securities owned by
the reporting banks were $35,672,000 higher on the 1928 date than a year earlier. Aggregate re
serve balances at the reserve bank were $1,023,000 below those of a year ago, and cash in vaults
declined during the year by $1,009,000. Demand deposits decreased $7,443,000, but time deposits
gained $32,743,000 during the year, while total borrowing by the reporting banks at the reserve bank
rose by $2,390,000.
SAVINGS DEPOSITS—At the end of January 1928, thirteen mutual savings banks in Baltimore
had aggregate deposits amounting to $178,980,572, the highest figure on record, compared with de
posits in the same banks totaling $177,010,993 on December 31, 1927, and $161,231,987 on January 31,
1927. Time deposits in sixty-six regularly reporting member banks, located in thirteen Fifth district
cities, totaled $246,687,000 on February 15th this year, compared with $244,545,000 on January n ,
1928, and $213,944,000 on February 16, 1927.
DEBITS TO INDIVIDUAL ACCOUNTS
TOTAL DEBITS DURING THE FIVE WEEKS ENDED
CITIES

February 15, 1928

Asheville, N. C................................................
Baltimore, Md..................................................
Charleston, S. C..............................................
Charleston, 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, Via..........................................
Norfolk, Va. ...................................................
Raleigh, N. C..................................................
Richmond, Va..................................................
Roanoke, Va.....................................................
Spartanburg, S. C...........................................
Washington, D. C...........................................
Wilmington, N. C...........................................
Winston-Salem, N. C......................................

Totals ...............................................................

$ 1,527,037,000

31,396,000
463.334.000
30.491.000
43.870.000
66.649.000
28.125.000
10.477.000
14.264.000
37.533.000
29.772.000
31.340.000
11.526.000
25.701.000
22.966.000
10.985.000
78.801.000
26.814.000
170.050.000
31.110.000
17.441.000
271.590.000
20.827.000
51.975.000

January 11, 1928
$

35,308,000
517.392.000
31.611.000
54.690.000
65.827.000
29.953.000
10.840.000
17.722.000
42.916.000
33.833.000
33.446.000
13.927.000
29.699.000
27.180.000
13.310.000
86.519.000
35.085.000
176.368.000
36.507.000
19.668.000
294.207.000
23.451.000
56.843.000

$ 1,686,302,000

February 16, 1927
$

39,934,000
473.900.000
30.659.000
44.789.000
58.730.000
23.630.000
9,775,000
14.960.000
30.052.000
28.925.000
26.745.000
12.468.000
29.385.000
23.125.000
12.487.000
89.849.000
37.555.000
166.496.000
32.727.000
17.061.000
276.279.000
22.257.000
47.764.000

$ 1,549,552,000

The accompanying table shows debits to individual, firm and corporation accounts in the clear
ing house banks of twenty-three trade centers in the Fifth reserve district, three equal periods of five
weeks being given to allow for comparison of the latest available figures with those of the pre
ceding like period and the corresponding period last year.
Total debits in the twenty-three reporting centers during the five weeks ended February 15,
1928, amounted to $1,527,037,000, a decrease of 9.4 per cent under the total of $1,686,302,000 reported
by the banks in the same cities during the preceding like period ended January 11, 1928, a seasonal
decline due to the large debits figures just before Christmas and around January 1st. Charlotte, N.
C., was the only city to report higher figures for the more recent period.
In comparison with debits figures totaling $1,549,552,000 reported for the five weeks ended
February 16, 1927, those reported for the corresponding period this year, ended February 15th, show
a decline of 1.5 per cent. Larger figures for the 1928 period were reported for Charlotte, Columbia,
Cumberland, Durham, Greensboro, Greenville, Richmond, Spartanburg and Winston-Salem, but the
other fourteen cities reported lower totals this year. Among the nine cities which reported higher
figures, eight are textile or tobacco centers.
BUSINESS FAILURES —In commenting on the business mortality record for January, Dun's
Review of February 4th says, “ The larger number of commercial failures in the United States re
ported for January marks a seasonal trend, the high point of each year invariably being reached in
the opening month. With a total of 2,643, the latest returns show an increase of more than 22 per
cent over the 2,162 defaults of December, and a rise of a little more than 7 per cent over the 2,465
insolvencies of January 1927. The number of failures for last month is, in fact, the largest for any
month since January 1922, when the total was 2,723, but the present liabilities of $47,634,411 have
been exceeded on many occasions during the last five years. The amounts were above $50,000,000 in
four months last year,—namely, in December, April, March and January, the maximum being about
$59,900,000 in March. For January a year ago, the indebtedness approximated $51,300,000, or fully
8 per cent above last month's total.”
In the Fifth reserve district, January 1928 witnessed 197 failures, with liabilities aggregating $3,192,930,
compared with 170 bankruptcies and liabilities totaling $3,533,544 in January 1927.
LABOR—The employment situation still continues unsatisfactory in the Fifth reserve district,
with more idle workers in the cities than at any other time in several years, but signs of improve
ment in the near future are more in evidence than was the case a month or two ago. Permits
secured in January for construction work to be done during the coming spring and summer were
the highest in value for any month since March 1926, and this work will give employment to many
skilled and unskilled workmen. Coal miners and textile employees continued to work on restricted
schedules during the past month, and prospects for immediate improvement in those industries do
not appear bright. Farming operations will require some labor for planting during the next few
weeks, but farm wages do not attract many city workers even when they arc unemployed.
COAL—Bituminous coal production totaled approximately 44,208,000 net tons in January, an in
crease over 41,277,000 tons mined in December but a large decline from the 56,882,000 tons mined in
January 1927. Total production during the present coal year to February n th —approximately 267
working days—was 410,283,000 net tons, the lowest figure for any year since 1922-1923. Production
in West Virginia and Pennsylvania was approximately the same during January and the first half of
February. Retail stocks of both bituminous and antracite coal are slightly larger than a year ago.
Retail coal prices are lower this year than for several winters, and dealers are stocked with nearly
all types and sizes. Deliveries to householders are about normal, but nearly all industrial consumers
of coal are using less than seasonal average.
TEXTILES —Textile mills in the Fifth reserve district continued some curtailment of opera
tions during January, but the mills in the Carolinas made a relatively better showing than the aver
age for the nation. In cotton consumption, Fifth district mills used 257,948 bales last month, com
pared with 255,398 bales consumed in January a year ago. National consumption figures were lower
in January 1928 than in January 1927, in contrast to the increase in the Fifth district. North Caro
lina mills consumed 140,634 bales last month, South Carolina mills used 105,904 bales, and Virginia
mills 11,410 bales, the North and South Carolina figures exceeding those of January 1927. Orders
received since the New Year were below seasonal average, due to a waiting attitude on the part of
buyers in the face of a declining cotton market. Mills have apparently adopted a general policy of
curtailment in operations rather than to accumulate manufactured stock, and the industry has
gotten back to a hand-to-mouth basis. With the unsettling effects of acreage discussions preventing
any real stabilization of the cotton market, the difficulties under which the mills are working do not
appear likely to lessen materially until production probabilities for this year become apparent, but on
the other hand the jobbers and retailers have small stocks and must buy a considerable amount of
textiles for the spring and summer trade. Textile executives report strong price resistance by job
bers and retailers, and the margin of profit is claimed to be very narrow. On the whole, the outlook
is less favorable than it was last fall, when buyers showed some disposition to anticipate their re
quirements.

BUILDING OPERATIONS FOR THE MONTHS OF JANUARY 1928 AND 1927.
Permits Issued

0
2

CITIES

New

3 Frederick, Md.....
4 Hagerstown, Md...
5 Danville Va.........
6 Lynchburg, Va—
7 Norfolk, Va..........
8 Petersburg, Va.....
9 Richmond, Va......
10 Roanoke, Va........
11 Bluefield, W. Va...
12 Charleston, W. Va.
13 Clarksburg, W. Va
14 Huntington, W.Va.
15 Parkersburg,W.Va
16 Asheville, N. C....
17 Charlotte, N. C....
18 Durham, N. C......
19 Greensboro, N. C.
20 High Point, N. C...
21 Raleigh, N. C.......
22 Salisbury, N. C....
23 Wilmington, N. C.
24 Winston-Salem, N. C.
25 Charleston, S. C ...
26 Columbia, S. C.....
27 Greenville, S. C..~.
28 Spartanburg, S. C.
29 Washington, D. C.

465
4

16
54

57
32

69
13

21
11
21

59
38
37
31
23
16

69
17
19

11
22

Alterations

Repairs

1928 1927

1 Baltimore, Md.....
2 Cumberland, Md...

New Construction

1928

226
4
5

12
8

15
39
3
61
49

29
5
26
16

47
30
27
31
23

14
62
13

8
6

19
192

Totals......... 1,247 1,010

1927

816
3

5
5
17
65

62
19

1
11

1
2

28
33

34
5
9

7
46
23
43
25

280

1928

1927

751 $ 4,976,800 $ 1,724,640
2
8,225
14,475
2
4,400
66,500
4
23,035
68,300
9
21,930
4,080
59,935
27
76,997
59
86,575
136,833
6
600
10,200
54
956,614
740,022
14
220,878
147,549
4
5,805
54,754
7
150,995
44,395
2
94,510
4,175
5
33,740
28,485
4
69,650
125,300
37
117,525
196,200
19
616,450
439,506
8 7,178,400
69,900
26
249,735
216,800
3
110,400
85,050
15
752,350
69,600
6
65,675
98,250
2
''15,600
25,900
28
297,275
159,980
24
11,460
6,800
15
72,750
193,800
29
34,000
16,800
6
67,595
34,785
216 4,422,125
2,679,675

1,586 1,384 $20,725,032 $ 7,539,751

1928

1927

Increase or Per Cent
Decrease
of
of
Increase 0
Total
or
2
Valuation Decrease

16,405
31,311
21,038
61,482
2,530
8,975
3,575
4,200
15,250
13,000
23,920
21,530
4,970
207,770

312,240 $ 4,011,040
800 —
6,675
— 68,000
5,900
29,050 — 64,440
17,345
2,325
— 22,464
13,242
25,505 — 27,248
9,575
4,475 —
345,344
20,110
85,973
2,240
1,900 — 50,649
120,080
6,400
147,515
300
2,405
3,200
9,200 — 62,750
8,575. — 70,845
182,575
25,680
7,115,088
14,450
73,052
21,365
26,455
1,425
657,125
34,600
4,650 — 33,650
7,100
1,000 —
122,520
30,025
9,605
27,265 —
2,415 — 99,545
23,930
14,800
30,930
6,850
226,080
1,724,140

196.9%
— 43.7
— 93.9
— 66.2
270.8
— 24.9
— 16.8
— 65.2
45.4
57.4
— 89.4
236.4
3,296.4
7.6
— 46.7
— 34.6
39.2
8,435.2
30.7
30.6
630.6
— 32.7
— 26.4
64.5
— 28.2
— 50.7
75.7
74.3
59.3

$1,823,757

$ 856,067 $ 14,152,971

168.6%

$1,071,120 $
375

9,875
1,820
7,840
48,515
4,500
148,862
14,884

200

19,880
57,480
350

2,100

1
2

3
4
5

10
11
12

13
14
15
16
17
18
19

20
21
22

23
24
25
26
27
28
29

— 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.

A fter failing for fifteen consecutive months to equal the record of the corresponding month of
the preceding year, building permits issued in twenty-nine leading cities of the Fifth reserve district
turned upward in January and reached the highest valuation figure reported for any month since
March 1926. Permits issued last month for new construction in the twenty-nine reporting cities
numbered 1,247, compared with 1,010 permits issued for the same class of work in January a year
ago, while January 1928 valuation figures totaled $20,725,032, compared with only $7,539,751 in the
corresponding month of 1927. Seventeen cities issued a larger number of permits last month, while
four cities issued the same number, leaving only eight cities which issued fewer permits than in
January a year ago. In estimated valuation of new work, seventeen cities reported higher and
twelve cities reported lower figures in January 1928 than in January 1927. In total valuation of all
classes of work, including both new and alterations or repairs, sixteen cities gained while thirteen
declined last month in comparison with January a year ago. Among the individual cities, the figures
for Durham, N. C., stand out with a total of over $7,000,000, due to extensive construction at Duke
University. Baltimore’s gain of more than $4,000,000 and Washington’s increase of nearly $2,000,000
also stand out prominently. Richmond, Charlotte and Winston-Salem reported substantial .gains in
work provided for last month, but Norfolk reported a decrease in estimated valuation. Next to
Durham, the highest percentage increase in valuation was reported by Clarksburg, W. Va., but this
was caused chiefly by low figures in January 1927 rather than by unusually large totals last month.
The same statement applies also to Raleigh, but to a less degree, Raleigh’s January 1928 total rank
ing fifth among the cities of the district.
Building contracts awarded in the Fifth district in January totaled $27,606,830, including both
urban and rural construction, compared with $27,776,000 awarded in January 1927. Of the January
1928 total, $11,039,270 represented contracts for residential types of construction, according to statis
tics collected by the F. W. Dodge Corporation.
COTTON'— The downward trend in spot cotton prices, which began last September, continued
during January and early February. In our Review last month we quoted the average price paid
growers for upland middling cotton on the Carolina markets during the week ended January 14th
as 18.99 cents per pound. The weeks ended January 21st and 28th witnessed averages of 18.64 cents
and 18.15 cents, respectively. In the first week of February, ended on the 4th, the average price

dropped below the 18 cents level to 17.28 cents. The market rallied during the week ended Febru
ary, nth, however, and the average price rose to 17.55 cents per pound. Thus there was a net de
cline of nearly a cent and a half a pound, or $7.50 a bale, during the latest four weeks for which
figures are available.
According to the Census Bureau’s consumption report for January, 582,417 bales of lint cotton
were used by American mills during the month, compared with 543,598 bales consumed in December
1927 and 603,242 bales in January 1927. Cotton growing states consumed 438,966 bales in January,
or 75.4 per cent of National consumption, compared with 437,779 bales, or 72.6 per cent of National
consumption, used in January a year ago. Cotton held by consuming establishments numbered
1,706,893 bales at the end of January 1928, compared with 1,707,326 bales so held on December 31st
and 1,852,074 bales on January 31, 1927. Public warehouses and compresses held 5,014,029 bales on
January 31st this year, compared with 5,655,736 bales on December 31, 1927, and 6,158,508 bales on
January 31, 1927. Exports in January totaled 728,935 bales, compared with 767,314 bales shipped
abroad in December and 1,115,792 bales in January a year ago, while imports numbered 41,445 bales
in January this year, 4 1,2 11 bales in December, and 56,939 bales in January last year. Spindles active
in January numbered 31,697,876, compared with 31,715,388 in December and 32,635,706 in January
1927.
The Census Bureau’s report of ginnings prior to January 16th, released on January 23rd, was
remarkably close to the Department of Agriculture’s final crop estimate of the year, given out in De
cember. Total ginnings prior to January 16th were 12,501,845 bales, and the Department of Agricul
ture’s final estimate last December was 12,789,000 bales. On the face of the ginning returns, the
Carolinas apparently gathered a few hundred bales more this year than were expected, while the
Virginia yield fell slightly below the official crop estimate. The final ginning report of the year
will be issued in March.
TOBACCO—V IR G IN IA auction tobacco sales in January totaled 25,301,177 pounds, and brought
an avearge of $16.68 per hundred pounds, all types included. Total sales of leaf tobacco this season
to February 1st aggregated 116,694,854 pounds, approximately 82 per cent of the estimated crop,
compared with 109,136,158 pounds, or about 75 per cent of the crop, sold prior to the same date, in
1927. Bright, or flue-cured, tobacco sold in January totaled 15,598,006 pounds, at an average price
of $17.95 Per hundred, compared with 14,199,641 pounds of this type sold in January 1927, at an aver
age of $21.04 per hundred. Dark, or fire-cured, tobacco sold in January totaled 6,627,443 pounds,
compared with 10,767,095 pounds sold in January a year ago. The average price paid for Dark to
bacco last month was $11.37, compared with $8.62 in January 1927. Prices for Dark tobacco advanced
each month during the present selling season. Sales of Burley tobacco totaled 1,977,108 pounds last
month. Burley sales, all at Abingdon, averaged $26.02 per hundred in January, compared with $16.03
per hundred in January a year ago. The January 1928 price is the highest paid for Burley since
1922. Sun-cured sales on the Richmond market totaled 1,098,620 pounds last month, compared with
1,227,845 pounds sold in January 1927. The average price paid for Sun-cured in January was $13.78
per hundred, compared with $10.58 in the corresponding month of 1927. Danville sold 7,139,423
pounds of Bright tobacco last month, South Boston sold 4,412,430 pounds of the same type, and
Lynchburg sold 1,787,746 pounds of Dark tobacco. Danville also led the Bright markets in price paid
with an average of $19.34 per hundred, while Bedford paid an average of $13.34 per hundred for
530,949 pounds of Dark tobacco, leading the Dark markets.
NORTH CAROLINA auction markets sold 25,344,667 pounds of tobacco for growers in January,
at an average price of $19.07 per hundred pounds, compared with 21,119,368 pounds sold for an aver
age of $20.88 per hundred in January 1927. Toial sales this season, to February 1st, amounted to
458,030,000 pounds, compared with 361,909,000 pounds sold prior to February 1, 1927. Winston-Salem
.sold 7,727,955 pounds in January 1928, leading all markets, while Oxford with sales of 2,854,600 pounds
and Durham with 2,794,406 pounds ranked second and third, respectively. In average price paid,
Mebane led last month with $25.06 per hundred pounds, Durham coming second with $22.34. North
Carolina this year has apparently raised the second largest tobacco crop ever raised by any state,
the record being held by Kentucky which raised 512,000,000 pounds in 1919.
AGRICULTURAL NOTES—There is little activity on farms at this season of the year, and this
year the weather was unfavorable for outside work between the middle of January and the middle
of February. The cold temperatures were favorable for fruit trees, but on the other hand winter
grains were damaged in some cases by hard freezes. The soil is in good condition for work when
warm weather comes. In nearly all sections of the Fifth district there has been plenty of rain to
give the ground a good supply of moisture. There is an effort being made by agricultural leaders
to prevent acreage increases in cotton and tobacco this year. Fertilizer prices are said to be much
higher than last year, but since comparatively little fertilizer was used in 1927 many farmers will
have to increase their tonnage this year if production is to be kept up. Most of the farmers of the
Fifth district are in better position to begin the year’s operations than they were a year ago. On the
whole, crops last fall brought more money than those of the preceding season, and in addition yields
of both food and feed crops were good.

FIGURES ON RETAIL TRADE

As Indicated Bj Reports from Thirty Representative Department Stores for the Month of January 1928
Percentage increase in January 1928 sales over sales in January 1927:
Baltimore
Richmond
Washington
Other Cities
District
— 5.3
1.5
— 2.0
— 8.2
— 3.7
Percentage increase in January 1927 sales over average January sales during the three years 1923-1925, inclusive:
19.2
.6
11.9
— 8.6
5.3
Percentage increase in stock on hand January 31, 1928, over stock on January 31, 1927:
— 1.1
1.3
— .9
— 5.8
— 2.2
Percentage increase in stock on hand January 31, 1928, over stock on December 31, 1927:
— 8.3
— 9.6
— 8.6
— 5.9
— 8.7
Percentage of sales in January 1928 to average stock carried during that month:
25.3
24.1
17.5
23.1
22.9
Percentage of collections in January 1928 to accounts receivable on January 1st:
30.5
32.6
32.4
27.3
29.9
— Denotes decreased percentage.

Retail trade in the Fifth reserve district in January, as reflected in sales of thirty leading depart
ment stores, was in smaller volume than in January 1927. Sales in January this year dropped 3.7
per cent below those of the same month last year, but averaged 5.3 per cent above average January
sales during the three years 1923-1925, inclusive. Stocks of merchandise on the shelves of the report
ing stores at the end of January this year averaged 2 per cent less, at retail selling prices, than at
the end of January 1927, and were 8.7 per cent smaller than stocks on December 31, 1927. Sales in
January averaged 22.9 per cent of stocks carried that month, and collections in January amounted to
29.9 per cent of outstanding receivables on January 1st. Collections in Baltimore and Richmond
were better than last year, but Washington and the Other Cities reported the collection of smaller
percentages of outstanding receivables.
The percentage formerly carried in the table showing the ratio of outstanding orders for mer
chandise to total purchases during the previous year has been discontinued. Since the general adop
tion of the so-called hand-to-mouth policy in buying, the outstanding order percentage has lost its
significance.
____________________________ WHOLESALE TRADE, JANUARY 1928________
Percentage increase in January 1928 sales, compared with sales in January 1927:
SI Groceries
11 Dry Goods
5 Shoes
15 Hardware
S Furniture
— 4.3
— 7.1
— 8.7
.1
4.2
Percentage increase in January 1928 sales, compared with sales in December 1927:
— 1.7
29.2
62.3
5.1
37.0
Percentage increase in stock on January 31, 1928, compared with January 31, 1927:
— 4.0(11)*
25.0(4)*
— 35.0(4)*
— .4(7)*
.......
Percentage increase in stock on January 31, 1928, compared with December 31, 1927:
2.2(11)*
25.5(4)*
9.9(4)*
2.1(7)*
.......
Percentage of collections in January to total accounts receivable on January 1, 1928:
59.2(18)*
31.9(8)*
33.6(5)*
36.3(11)*
25.7(3)*
— Denotes decreased percentage.

IS Drugs
— 3.2
12.5

47.9(8)*

* Number of reporting firms.

Eighty wholesale firms, representing six lines, reported on their January business, as shown in
the accompany table of percentages. Sales in all lines except groceries showed seasonal increases
over December sales. In comparison with sales in January 1927, sales in January this year were
lower in every line reported upon except hardware and furniture. Stocks of groceries, dry goods,
shoes and hardware on the shelves of the reporting firms all increased during January, but on
January 31st stocks of groceries, shoes and hardware held by the reporting firms were lower than
at the end of January 1927. Collections in January were slower in every line than collections in
January a year ago.

(Compiled February 20, 1928)

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

Industrial production and shipments o f commodities by rail
roads increased considerably in January from the low point reached
at the end o f 1927. The general level o f wholesale commodity
prices showed a slight decline.

1925

1924-

1926

1927

1928

Index number of production of manufactures and minerals combined,
adjusted for seasonal variation* (1923-1925 average a 100).
Latest figure, January 106.
PERCENT
PERCENT

1 2 5 ---------------- -----------------1---------------------------------------------------1125

Miscellaneous

100

Total

RAILROAD 1FREIGHT CAI LOADINGS

1924

1925

1926

1927

1928

Cars of revenue freight loaded as reported by the American Railway
Association. Indon numbers adjusted for seasonal variations,
(1923-25 average s 100). Latest figures, January, total 100,
miscellaneous 106.
BlUrONS OF DOLLARS

R E SE R tVE B A N K <CREDIT
Total
'Reserve Bank
Credit
*

C
„

BILLIONS OF DOLLARS

Acceptances
1924

1925

1926

1927

19ZS

Monthly averages of daily figures for 12 Federal Reserve banks.
Latest figures are averages of first 22 days in February.
PER C E N T
MONEY

J -v -

1RATES IN N E W YO R K

r * ~ ■V \
V

\FS

n "

r-\

1 rtri

Commetr c ia / Paper Pc ’te
----- Reserve Bank Discoun,f- Rate
\
. . . A c ce p t ’a nce Rate

1 ...

TRADE. Sales o f department stores showed more than the
usual seasonal decline in January from the high levels in December
and averaged slightly smaller than in January o f last year. Sales
o f mail order houses, on the other hand, were about 6 per cent
larger than a year ago. Wholesale trade in nine leading lines aver
aged larger than in January o f last year. Stocks o f groceries and
hardware carried by wholesale firms were smaller than a year ago,
but reports in other lines indicated that stocks were somewhat larger.
Freight car loadings fo r all groups o f commodities were larger in
January than in December, the increase being particularly large
fo r miscellaneous commodities.
Compared with January o f last
year, however, loadings o f all classes o f commodities except live
stock were smaller.
PRICES. The Bureau o f Labor Statistics index number o f
wholesale commodity prices declined from 96.8 per cent o f the
1926 average in December to 96.3 per cent in January. Prices o f
farm and hide and leather products increased, while prices o f meats
and dairy products, textiles, fuels, nonferrous metals and rubber
declined. During the first two weeks o f February, prices o f grains,
cotton, silk and wool advanced, while those o f cattle, sugar and
rubber declined.

Discount\sfoc
Member Banks
U.S-Secunties

PRODUCTION. The increase o f 6 per cent in industrial pro
duction from December to January reflected a larger output o f
manufactures, particularly o f iron and steel and automobiles. Daily
average production o f steel ingots increased by over 25 per cent,
the largest monthly increase since 1924. Buying o f steel products
by the railroads, and by the automobile and construction industries,
was also active in January, and, notwithstanding the large volume
o f production and shipments, unfilled orders showed an increase
during the month. Since the first o f February production o f steel
products has continued active with new orders and shipments more
nearly in balance than in previous months. Automobile production,
which in December was in the smallest volume since 1922, increased
considerably in January and was only slightly smaller than in the
same month o f the preceding year.
Cotton consumption showed
about the usual seasonal increase in January follow ing substantial
curtailment in December, and the woolen and silk industries were
somewhat more active than in December. Production o f metals,
after adjustment fo r customary seasonal changes, was in practically
the same volume in January as in December. Building contracts
awarded in January exceeded those fo r the corresponding month
o f last year and awards during the first half o f February were in
practically the same volume as a year ago.

BANK CREDIT. For the fou r weeks ending February 15th,
total loans and investments o f member banks in leading cities
showed a decline o f more than $ 200 , 000 , 000 , the decline being
almost entirely in loans on securities. From the peak at the turn
o f the year this class o f loans decreased by nearly $460,000,000.
Loans fo r commercial purposes, after a further decline in January,
showed a seasonal increase in the first two weeks o f February. The*
decline in the volume o f loans since the first o f the year has been
accompanied by a corresponding decline in net demand deposits,
while time deposits have continued to increase.
A t the reserve
banks the total volume o f member bank borrowing declined sea
sonally during the opening weeks o f the year and reached a low
point on January 25th, but increased by about $70,000,000 between
that date and February 21 st. This increase in discounts accom
panied smaller reductions in the reserve banks’ holdings o f United
States securities and acceptances, and the total volume o f reserve
bank credit m use showed an increase fo r the fou r weeks
Durinsr
the fou r weeks ending February 21 st, a firmer tendency in the
money market was indicated by increased rates on call and time
loans and by a further increase from 3 % per cent to 3 y2 per cent
m j ■£ ^
on
bankers’ acceptances. Between January 25th
and February 2 1 st discount rates at eleven Federal reserve banks
were advanced from 3% to 4 per cent.

Weekly rates in Hew York money market: conroercial paper rate on
4-to-6 months paper and acceptance rate on 90-day paper.

Full text of Economic Quarterly (Federal Reserve Bank of Richmond) : February 1928

FRASER