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F E D E R A L R E S E R V E B A N K O F R IC H M O N D General Business and Agricultural Conditions in the Fifth Federal Reserve District By CALDWELL HARDY, Chairman and Federal Reserve Agent RICHM OND, VIRGIN IA, JUNE 30, 1921 ---------- -- ------At the end o f May we re j ~ cities giving clearings and ceived seventy-three letters debits reflect price declines, CO N TE N TS from business leaders in the but do not indicate any very Fifth District, thirty-nine serious decrease in the vol detailed reports from w hole ume of business activity Introduction sale houses, and twenty-five since last year. The textile Financial confidential reports from de industry is slowly working R eserve Bank Operations partment stores. Reports its way out of present diffi Condition o f M em ber Banks Debits to Individual A ccou n t vary as to the degree o f re culties and most of the mills Clearings vival that has taken place, are running on approximate Business Failures but on the whole correspond ly full time, though as yet C ollections ents are cheerful and appear little profit is being made. Labor Coal to believe that steady pro Increased building activity Textiles gress is being made upward, continues, most of the new Foods although every individual in w ork being residence con Clothing and Shoes dustry is not sharing in the struction. The wholesale Furniture Building Materials increasingprosperity. Collec trade in the five lines that re Building Operations tions are on the whole better port to us holds up in volume W holesale Trade than might be expected, as is of business and the retail Retail Trade shown by reports from the trade done by 25 of the lead wholesale and retail estab ing department stores in the J lishments, and figures show District was only 3% less in ing business failures. The May record for the dollar value in May than in May, 1920. The only Fifth District in failures was much better than in distinctly unfavorable development since our April any of the preceding months this year, both the Review was written has been in prices for cot number of failures, 99, and the total liabilities, ton, the lowest figures since 1914 having been $2,657,764, being lower. Reports from individual reached during the second week in June. FINANCIAL Reserve Bank Operations.— A comparison of the important items in the current statement of con dition o f the Federal Reserve Bank o f Richmond with those o f a month ago, reflects only minor changes. H owever, it is pertinent to note the changes in certain items of this year, as compared with those o f a year ago. The total accommodation extended to member banks in the Fifth District on June 15, 1921, aggregated $122,484,520, compared with $126,764,529 on June 15, 1920, distributed as follows : June 15, 1921. Bills Discounted— Government Secured------------------------------------------------------- $ 50,703,178 Bills Discounted—Otherwise Secured and Unsecured______________________ 68,788,542 Bills Purchased (Bankers’ Acceptances)-----------------------------------------------------2,992,800 Total Outstanding Loans to Member Banks--------------------------------------- $122,484,520 June 15, 1920. $ 74,151,323 43,979,458 8,633,748 $126,764,529 Government secured paper has decreased within this period 24 millions, and bankers' acceptances 5 millions, this being a total decrease of 29 millions, while other bills discounted and held have increased during the same period 25 millions, denoting a shifting of credit from government financing to that o f financing agriculture and commerce within this district. This shows conclusively that there has been no curtailment o f credit by the Reserve Bank of this district to its member banks, the slight difference in the volume o f discounts shown above being no more than a daily fluctuation. In order to carry this volume of loans for member banks, and at the same time maintain the required reserves, it has been necessary for the Federal Reserve Bank of Richmond to rediscount with other Federal Reserve Banks 20 millions, part of the time at 7% and part of the time at 6^£%, these being the rates for rediscounts between Federal Reserve Banks, though the Federal Reserve Bank o f Richmond has not increased its rate to member banks above 6%. Federal Reserve Notes in actual circulation June 15, 1921, aggregated $122,516,070, compared with $121,685,365, on June 15, 1920, this being an increase of $830,705. Member Banks' reserve deposits declined to $52,544,869, on June 15, 1921, from $59,009,855 on June 15, 1920. The discount rate of the Federal Reserve Bank of Richmond has never been above 6% . discount rates are as fo llo w s : Current Member Banks’ Collateral Notes— Secured by U. S. Certificates of Indebtedness and Treasury Notes- 6 % Member Banks’ Collateral Notes— Secured by Liberty Bonds or Victory Loan Notes__________________ 6 % Member Banks’ Collateral Notes— Secured by Eligible Paper------------------------------------------------------------------- 6 % Rediscounts— Customers’ Notes— Secured by U. S. Certificates of Indebtedness and Treasury Notes___ 6 % Rediscounts— Customers’ Notes— Secured by Liberty Bonds or Victory Loan Notes__________________ 6% Rediscounts— Trade Acceptances___________________________________________________________________________ 6% Rediscounts— Commercial P ap er--------------------------------- --------------------------------------------------------------------------------- 6% Rediscounts—Agricultural or Livestock Paper-------------------------------------------------------------------------------------------- 6% Bankers’ Acceptances— Purchased at market rates subject to agreement— Present rate, 6%. CONDITION OF EIGHTY REPORTING MEMBER BANKS IN SELECTED CITIES ITEM S 1. Total Loan and Discounts (exclusive of rediscounts) — ---------------------- $ 2. Total Investments in Bonds and Se curities ___________________________ 3. Total Loans and Investments-----------4. Reserve Balance with Federal Re serve B a n k _ _ - — 5. Cash in Vaults-----------------------------------6. Demand Deposits _ 7. Time D ep o sits---- ----------------------------♦ Includes some miscellaneous investments. June 8 , 1921 413,288,000 May 4, 1921 $ ! June 11, 1920 411,638,000 $ 489,469,000* 117.017.000 530.305.000 119.486.000 531.124.000 87,150,000** 576.619.000 31.595.000 16.250.000 297.377.000 116.420.000 31.007.000 16.140.000 302.870.000 115.722.000 37.970.000 18.096.000 344.615.000 102.337.000 ** Government Securities only. In the table given above, compiled from condition reports received from the same eighty mem ber banks, located in thirteen cities of the District, all items are comparable except numbers 1 and 2. Comparing the figures as o f June 8, 1921, with those as o f June 11, 1920, all items show decreases within the year except Item 7, Time Deposits, which increased from $102,377,000 to $116,420,000, a gain o f $14,043,000, or 13.7%. Total Loans and Investments decreased between the tw o dates from $576,619,000 to $530,305,000, a loss of $46,314,000, or 8.0% ; Reserve Balance with Federal Reserve Bank decreased from $37,970,000 to $31,595,000, a loss of $6,375,000, or 16.8%; Cash in Vaults fell from $18,096,000 to $16,250,000, a loss of $1,846,000, or 10.2%, and Demand Deposits decreased from $344,615,000 to $297,377,000, a loss of $47,238,000, or 13.7%. Comparing the June 8, 1921, figures with those as of May 4, 1921, the immediately preceding month, increases are found in Total Loans and Discounts, in Reserve with Federal Reserve Bank, in Cash in Vaults, and in Time Deposits, while losses are found in Total Investments held by the report ing banks, in Total Loans and Investments, and in demand Deposits. During the month of May De mand Deposits in the eighty banks under discussion decreased $5,493,000, but during the same period the banks increased their loans to customers $1,650,000. In view o f the decline in deposits the banks might have been expected to reduce outstanding loans proportionately, but the figures show that in stead of pressing their customers for payment of loans the banks have actually increased their ac commodations extended to customers. DEBITS TO INDIVIDUAL ACCOUNT IN CLEARING HOUSE CENTERS For the Weeks Ending CITIES June 8 , 1921 Baltimore, Md. __ — ------------------ -------- $ Charleston, S. C . ----------------------------------Charlotte, N. C------------------------ ---------Columbia, S. C. __ _ _ - — Greenville, S. C_________________________ Huntington, W . Va. — ------- --------- — Norfolk, V a . ____________________________ Raleigh, N. C-----------------------------------------Richmond, Va. ------ ---------------------------Washington, D. C___ — — — Wilmington, N. C___ — ------------ — Totals for 8 cities __ Totals for 11 cities _ _ _ May 4, 1921 91,179,000 6,011,000 5.409.000 3.791.000 3,115,000* 5.173.000 14.146.000 4.050.000 25.262.000 42,556,000* 4,728,000* - $ $ 155,021,000 205,420,000 _ $ 99,716,000 7.120.000 6.664.000 5.551.000 3,171,000* 5.234.000 13.199.000 4.300.000 26.312.000 37,918,000* 6,704,000* 168,096,000 215,889,000 June 9, 1920 $ 106,658,000 9.419.000 7.640.000 7.701.000 5,941,666 ’ 21.107.000 4.572.000 26.604.000 $ 189,642,000 ♦Not Included in Totals for 8 Cities. Debits to Individual Account in eight cities of the Fifth District totaled $155,021,000 for the week ending June 8, 1921, compared with $189,642,000 reported by the same cities for the corresponding week o f 1920, a decrease this year of $34,621,000, or 18.3%. Compared with totals reported for the week ending May 4, 1921, the June 8 figures show a decrease of 7.8%, but this is a natural loss, due to the greater number o f end o f month payments o f bills that came in the week ending May 4 than in the week ending June 8. As in the case of clearing house figures mentioned below, the declines in debits to individual account have been approximately the same in percentage since the beginning o f the year, and represent price declines in commodities rather than decreased volume of business in com parison with the first half o f 1920. The average percentage decline in weekly debits from January 1, 1921, through May, in comparison with the same five months of 1920, amounts to 18.2%. W e call attention to the inclusion of Huntington, W . Va., among the cities for which 1920 fig ures are available for comparison, this city having been on the reporting list a year. MONTHLY CLEARINGS No. J 1921 1. 2. 3 4. * 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. $ Charlotte N. C. _ — _ Columbia, S. C. -----------------------Greensboro, N. C . ---------------------Greenville, S. C . ------------------------Hagerstown, M d .----------------------Huntington, W . V a . -----------------Newport News, V a .-------------------Norfolk, V a . -----------------------------Raleigh, N. C . ---------------------------Richmond, V a . --------------------------Spartanburg, S. C . ---------------------Washington, D. C . ---------------------Totals--------------------------------- $ ♦Not Included in Total. 611,177,623 $ 6,752,578 393,380,469 $ 16~186~250 2,304,820 6,430,801 11,646,529 3,025,315 7,722,601 3,701,415 41,427,959 6,569,011 245,184,834 5,063,633 80,071,253 $ 829,467,468 2,191,926— 79,359,5267,591~265— 409,865— 2,190,289— 5,365,219— 448,740— 516,260— 1,818,796— 12,882,842— 2,074,467— 93,084,333— 2,665,7607,690,557— 1920 4,560,652 ^14,020,943 8,673,833* 8,594,985 1,894,955 4,240,512 6,281,310 2,576,575 7,206,341 1,882,619 28,545,117 4,494,544 152,100,501 2,397,873 72,380,696 Per Cent of Increase or Decrease 32.5— 20.2— 46.9— 17.8— 34.1— 46.1— 14.8— 6.7— 49.1— 31.1— 31.6— 38.0— 5 2 .6 9.6— 218,289,845— 26.3— Increase or Decrease For Month of May CITIES $ No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 | — Denotes Decrease. The table shows clearings in May, 1921, for fifteen cities in the Fifth District, the May, 1920, figures being available for fourteen of them. These fourteen cities show clearings in May amounting to $611,177,623, compared with $829,467,468 cleared in May, 1920, a decrease this year o f $218,289,845, or 26.3%. The previous months of this year showed approximately the same percentage declines under the corresponding months of 1920, which would appear to indicate that business compares favorably in volume o f trade, the decrease in the dollar value of clearings representing price declines that have developed during the past twelve months. BUSINESS FAILURES IN THE TW ELV E FEDERAL RESERVE DISTRICTS City and District Number Liabilities Per Cent Increase Per Cent Increase 1921 Boston, F ir s t ___________________ New York, Second______________ Philadelphia, T h ir d _____________ Cleveland, Fourth ______ ________ Richmond, F i f t h _ ______ ____ _ Atlanta, Sixth _______________ __ Chicago, Seventh ______________ St. Louis, E igh th ___________ _ Minneapolis, Ninth ____________ Kansas City, Tenth______ _ Dallas, Eleventh _________ _ __ San Francisco, Twelfth-------------Totals _____ __________ __ 1920 97 86.5 66.9 86.5 142.9 141.5 236.4 181.7 676.9 227.8 318.8 513.3 72.4 $ 2,783,006 11,172,495 1,516,894 1,969,231 2,657,764 4,750,423 5,624,522 20,612,058 1,203,396 1,073,219 1,851,774 1,851,629 $ 59 67 92 131 52 133 37 42 41 44 60 13 18 16 15 76 376,586 2,413,591 1,085,182 2,544,273 1,577,684 715,555 692,550 61,243 163,487 179,251 168,165 848,810 639.0 362.9 39.8 22.6— 68.5 563.9 712.3 33,556.2 636.1 498.7 1,001.2 118.1 1,356 547 147.9 $ 57,088,471 $ 10,826,277 427.1 222 69 102 99 148 169 101 1921 1920 — Denotes Decrease in Total Liabilities. W e give herewith a table showing the number of failures in the twelve Federal Reserve Districts for May, 1921 and 1920, with percentages o f increase in both the number and the aggregate liabilities involved, as reported by Dun’s Review. The May record for the Fifth District is the best reported this year, both the number of failures and the total liabilities being lower than in January, February, March or April. The table shows 99 failures in the Fifth District during May, 1921, with liabilities of $2,657,764, compared with 41 failures during May, 1920, with liabilities o f $1,577,684, an increase in number this year o f 141.5% and in liabilities of 68.5%. The total increase in number reported for the United States is 147.9%, and in liabilities 427.1%. The Fifth District therefore makes a compara tively favorable showing, being below the average in both percentage o f increase in number of failures and in liabilities involved. The average liability per failure for the United States is $42,084, but the Fifth District average is $26,846. Failures in January, February, March and April numbered 142, 144, 123 and 154, with liabilities of $3,887,908, $3,170,347, $2,918,460 and $3,334,591, respectively. COLLECTIONS.— Collections in the wholesale trade improved distinctly during May, judging from reports received this month from thirty-nine manufacturers or jobbers of groceries, dry goods, shoes, hardware and furniture. Of the reports received, two could not be definitely classified, but 81% o f the remaining thirty-seven firms wrote that their collections had been either Good or Fair, compared with 73% reported Good or Fair in April, 67% in March, 69% in February and 71% in January. The lowest point reached in these percentages was 59% last November. One dry goods jobber wrote that collections are Fair to Good except in the cotton section, where they are very poor, and another dealer handling the same line stated that collections of new accounts are Fair to Good, but that old accounts are Slow to Poor. Hardware jobbers appear to have regained the loss in collections men tioned in our report covering April. W e have classified thirty-seven of the reports received for May from wholesalers, and included them in the table herewith. Lines Sold Groceries ___________________ - _______ Dry Goods __________ ______ _________ Boots and Shoes_ _________________ _ H ardware____________________________ Furniture ____________________________ * May T otals___ _____ _________ April Totals __________________ March T o ta ls _________________ February T o ta ls ______________ January Totals _______________ Collections Reported as Good Fair Slow Poor Total 4 2 2 0 1 2 0 0 0 1 1 0 8 5 4 2 37 33 36 36 38 0 0 2 0 6 5 7 6 10 7 6 4 5 24 19 17 19 17 8 8 6 5 4 3 5 7 8 9 5 LABOR.— Developments in labor circles w ere relatively unimportant during May in the Fifth District. Increased activity in construction work, both in building and road and street improvement, has provided w ork for a considerable number of unskilled laborers, and has also given employment to some skilled workers. On the other hand, certain industries have released employees, among them being leaf tobacco dealers whose business is largely seasonal, and is now at a low point. Some friction has developed in about twenty textile mills centering around Charlotte, N. C., a strike having been started against wage reductions averaging more than 2 2 but the trouble has not spread to any extent, and in the face o f unprofitable operation o f textile mills the situation appears to be giving little concern to the mill managers. In anticipation of trouble with its union labor, one of South Carolina’s largest mills has announced an indefinite suspension of operations, this action affecting something like 1,800 employees. Farmers are employing fewer laborers than usual, and the supply of farm labor consequently exceeds the demand. Clothing manufacturers report arrangements made with their employees, involving some wage reductions and more economical working agreements. All classes of labor are plentiful, and all reports agree in the opinion that the general efficiency of the workers is from 20% to 25% greater than it was a year ago. COAL.— The coal business marked time during May. Dealers continue to urge consumers to buy, and consumers continue to wait for lower prices. The recent announcement of coming re ductions in wages for railroad labor has led coal consumers to hope for corresponding reductions in freight rates, but there does not appear to be any justification for this hope in the immediate future, and certainly not in time to give relief in laying in supplies for the com ing winter. The rate of pro duction at the mines has improved slightly during the past few weeks, but orders are still insufficient to encourage full production, and consequently unemployment in the coal fields continues. TEXTILES.— Reports received this month from a number of textile mills agree very closely in the opinion expressed. It is stated that their business is slowly improving, and that the outlook for the future is distinctly brighter than it was a few months ago, but it is likewise agreed that the busi ness now being done is returning no profit, and in some cases is actually being handled at a loss. It is true that raw cotton is very low in price, and practically all mills in the Fifth District have made wage adjustments downward since last Fall, but as we pointed out last month there are im portant items o f cost entering into textile manufacturing that have not decreased since last year, the chief of these items being coal and transportation costs. Indications are that mills making tire fabrics are enjoying sufficient orders to keep them runningfull time, and are securing satisfactory prices for their products, but the other mills have not yet recovered to the same extent. M ost of the Carolina mills are running approximately full time, and relations between employer and employee are on the whole satisfactory, though there is some friction centering around Charlotte, N. C., as explained under the heading, Labor, elsewhere in this Review. FOODS.— The U. S. Department of Labor figures show that retail food prices declined 4.8% in May, as compared with April, while the wholesale prices dropped 5% % in the same period. Nearly all food articles declined, the only items reported as having advanced being onions, cabbage and oranges. Dealers in staple foods, such as sugar, flour, lard, coffee, meats, etc., are getting normal orders, but canned goods and fancy articles are not moving with the same freedom. The retailers are still afraid to buy for future delivery, for fearof price reductions, but the wholesalers contend that the prices are stable. Vegetables and fruits are appearing on the market and are finding ready sales at fair prices, but freight rates discourage the shipment of any but the best grades of truck. Farmers are buying considerably less meat, flour and other food articles than .usual, making every effort to get their living this year from their own farms. CLOTHING AND SHOES.— W hile there has been no striking change in the clothing or shoe trade, our correspondents agree that conditions are slowly and steadily working towards normal. Buyers are more willing to place future orders than they were sixty days ago, and the dealers claim that prices are somewhat more stabilized again. Clothing manufacturers have succeeded in making wage adjustments with their employees without disturbance, the amount of reductions approximating 10%. Collections are satisfactory except in the cotton sections, and the dealers feel optimistic over the prospects for fall business. Shoe dealers likewise report more willingness on the part of the retailers in placing fall orders, and they say that the spring business has been good in most lines, especially in women's high grade oxfords. One o f the largest shoe manufacturers in the Fifth District writes as fo llo w s : “ W e are anticipating a good business this fall, so that we believe we will be able to run our fac tories to capacity by getting out and working. Commencing with the past week merchants in the South have a greater disposition to place conservative fall orders than at any time since we started out with fall samples the middle o f March. Both our operatives and salesmen have settled down on a steady grind and drive for fall business. W e anticipate coming out O. K.” FURNITURE.—The furniture business is showing signs of a com ing revival, but manufacturers do not expect any startling changes before next spring. Sales reported by five factories were 6.4% greater in dollar value in May than in April o f this year, and April sales had also gained over March business. Four o f the five factories claim that prices at wholesale are probably still moving down ward, and they claim that the market for furniture has been badly demoralized by the tendency on the part o f some factories to sell stocks at a greater sacrifice than most of them can stand. The furniture manufacturers o f the fifth District are now holding an exhibition at High Point, N. C., the exhibit o c cupying a splendid new building erected by the furniture manufacturers as a permanent exhibit hall for Southern made goods. BUILDING MATERIALS.— The revival in building, spoken of in our report last month, con tinued during May, and naturally had a stimulating effect on building materials. Lumber dealers tell us that the past three or four weeks have seen very perceptible improvements in their business. It seems to be the general opinion in the trade that lumber prices have reached bottom, and all dealers are expecting good business during the rest of the year. Dealers claim that prices would be on a par with 1913 prices if freight rates were the same as existed in that year. Heavy building materials such as stone, lime, cement, brick and sand, are not moving as freely as lumber, which is blamed by dealers on the excessive freight rates. Glass manufacturers report a very dull market, and most o f them state that they have large stocks in their warehouses. Few glass factories are operating at the present time. Railroads are not taking their normal supply of construction material, and as the rail road business is usually very large, this lack of buying by them is a very serious proposition for build ing material dealers. Materials used in road building and street paving are moving at a normal rate. BUILDING OPERATIONS FOR THE MONTHS OF M AY, 1921 AND 1920 1 Permits Issued New Construction C IT IE S o' fc Alterations Repairs New 1921 1921 1920 1920 1921 1921 1920 1920 Increase or Per Cent, of Decrease, Total Increase Valuation or o ' Decrease £ I M aryland 1 Baltimore.................... 492 2 Cumberland................ 22 2 3 Frederick..................... V irginia 4 L ynchburg................... 5 Norfolk......................... 6 Richmond.................... 10 45 156 7 Roanoke....................... *112 3 8 Staunton...................... 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 W est V irginia Ch arlesto n ................ 131 *194 Huntington Parkersburg.............. N orth C arolina Asheville ................... 95 28 Charlotte.................... 17 D u rh a m ...................... 17 Greensboro ............... 11 High Point.................. 16 Wilmington................. 36 Winston-Salem.......... South C arolina 12 Charleston.................. 24 Columbia..................... Greenville.................... 26 26 Spartanburg................ D ist . of C olumbia W ashington................. 204 559 1,616 8 18 1 3 9 74 74 ♦92 3 24 43 95 33 *89 24 0 23 20 6 18 *24 8 61 26 12 29 34 240 9 13 8 989 $1,050,416 $1,490,000 $ 72,275 18 40,450 1 460 19, 200 13 63,100 18 426,460 84 1,261,927 223,810 1 13,500 34,100 323,250 930, 215 186,395 3,800 6, 950 14, 831 124, 234 0 5,000 13 47,700 319,455 35,000 31, 245 10,300 25, 000 85,000 22 552 339, 925 392,190 70,000 5,000 18, 650 104,113 30, 950 99,391 351, 833 37,415 4, 700 79.2 29.1 34.0 20.1 4 5 6 7 53.4 8 313,170 72,735 25, 000— 539.9 9 352, 088 233, 970— 550.7 62.9— 203.0 41.7— 95.7— 7.9— 81.8— 22.8 10 20 . 8— 11 12 56, 300 416,017 363, 200 104, 930 23, 800 98, 665 109,195 60, 350 668,010 23,500 108, 500 103,800 196,995 1,052, 905 33, 250 52, 260 8, 050 5, 400 25,100 12, 539 31,500 99,597 48, 845— 639, l l O ll, 100— 942, 968— 29,950 53, 000 115,410 30, 530 219,150 43,050 110,910 114,757 18,995 33,482 124,315 4, 790 4, 495 86,124 19,650 1,525 174, 700— 42, 692— 109,165 80, 962— 78.1— 33.0— 83.6 69.6— 20 21 22 494 1,944,540 1,199,045 330, 021 396, 650 678,866 42.5 23 156,662 1.8 26 5 14 6 7 4 ........7 44 105 24 108 27 949,920 $ 296,700 $ 213,636 1 12.0 8,425 6,190 29, 590— 37.7— 2 3,000 1,200 3 20,540 1,237.3 9 83 24 8 7, 629 8,950 26,015 8,050 T otals............ 1679 1,445 2, 639 1,918 $7,078, 665 $7, 511,472 $1,811,807 $ 1, 222, 338 $ 101,110 13 14 15 16 17 18 19 ♦Includes both new and repairs. Permits for construction w ork issued by building inspectors in twenty-three of the leading cities o f the Fifth District indicate that the increased activity in building mentioned in our March and April reports continued during the month of May. Permits for new buildings in M ay totaled 1,679, in com parison with 1,445 permits for new construction issued in May, 1920, an increase of 16.2% this year, the estimated valuation being $7,078,665 in May, 1921, as compared with $7,511,472 in May, 1920, a decrease this year o f 5.8%. For repairs and alterations 2,639 permits were issued in May, 1921, in comparison with 1,918 in May, 1920, estimated valuation being $1,811,807.00 and $1,222,338.00, respec tively, showing an increase of 37.6% in the number of permits and an increase of 48.2% in valuation. Valuations for both new construction and repairs or alterations totaled $8,890,472.00 in May, 1921, compared with $8,733,810.00 in May, 1920, an increase this year of 1.8%. Thirteen of the twentythree reporting cities showed gains in total valuation, while ten reported lower valuations than last year. The bulk o f construction being done this spring and summer is for residence use, and in the face of the house shortage, which encourages annual rent increases, it is pleasing to note this development. In Richmond, reports show permits during May for 101 residences and 5 apartments, and since Jan uary 1st, permits have been issued for 235 residences and 11 apartment houses. Lynchburg reports 3 residences planned in M a y ; Charlotte reports 25, and these figures are typical of all information available. REPORT ON WHOLESALE TRADE LINES SOLD Net Sales in May, 1921, Compared With Sales in April, 1921 Sales in May, 1920 _ ____ - ____ Groceries (8 )* __________ Dry Goods ( 9 ) * _________ ___ ________ Boots and Shoes (8 )* _ __________________ Hardware (9)* _________ - ____________ Furniture (5)* ___________ _ ______- ____ — 3.4 — 14.1 — 18.2 — 8.4 6.4 —35.8 —35.5 —45.6 —28.7 —44.1 Total Averages ( 3 9 ) * _ ______________ _ —10.3 —37.1 ^Number of reporting firms. The figures above show losses in the dollar value of trade in all lines during May, 1921, in com parison with May, 1920, and in all lines except furniture, in comparison with April, 1921. The drop in May under April, in dry goods and shoes, is largely seasonal, retailers having gotten in the bulk of their spring and summer staples earlier in the year. The grocery trade is practically stationary in actual volume of business done, the 3.4% decline in dollar value o f sales during May, under April, representing approximately the price declines during the month. Eight wholesale grocers reported for May, and seven o f them state that prices are still w orking downward. One firm contends that the bottom has been reached. All of them write that retailers are buying cautiously and for immediate needs only, and all reporting firms agree that there is now no transportation trouble o f any kind in the shipment of goods to or from their warehouses. The reports received for May from wholesale dry goods firms vary considerably, some of them reporting a large number o f small orders, while others state that business is stagnant. Of nine de tailed reports received, five state that business is getting better established on a safe basis, and say that confidence is being steadily restored. The remaining four firms either do not comment on the figures sent us, or state that they see no improvement. Six of the nine firms write that prices are fairly stable, but three believe that the bottom has not yet been reached. Only one o f the firms reports any fall orders received, though some o f the others do not mention this subject. Purchasing by both wholesalers and retailers is done with great reluctance, but collections are better than might be ex pected. The tone o f reports received from shoe dealers is on the whole optimistic. Eight reporting firms think that prices are stable at the present figures, with one exception, and several write that while buying is still conservative and cautious, the general attitude in the trade is toward a more confident policy. Fall business is slow in developing, but there is considerable business in women's white can vass and sport shoes, and other seasonal novelties, and the reporting firms apparently expect a fair amount o f business a bit later in the season. Nine hardware jobbers agree in expecting lower prices in the hardware business, and none of them expect an immediate revival o f trade with them, but several report cheerful expectations for the latter half o f the year, especially during the early winter months. Hardware prices did not fall as quickly last year as most other wholesale lines, and it is generally felt in the trade that the deflation in prices is not yet completed. The reporting firms have very few unfilled orders, and report great caution in stocking their sales rooms with full stocks until they can be sure that prices are more nearly stable than the dealers think they are now. An examination of the percentage declines in the dollar value o f sales in May, 1921, in comparison with sales in May, 1920, would seem to show that the actual volume of business being done this year is not much less than last year. Grocery sales in May, 1921, were 35.8% under sales in May, 1920; dry goods sales were 35.5% under sales in May, 1920; shoe sales were 45.6% under sales in May, 1920; hardware sales were 28.7% under sales in May, 1920, and furniture sales were 44.1% under sales in May, 1920. It must be kept clearly in mind, however, that wholesale prices are this year much lower than they were in May, 1920, and although it is difficult to estimate the exact fall in prices, it is fair to say that most o f the percentage decrease in the dollar value of sales reported is due to price changes instead of to decreased number o f units handled. FIGURES ON RETAIL TRADE As Indicated By Reports from Twenty-Five Representative Department Stores for the Month of May, 1921. Richmond Baltimore Washington Other Cities District Percentage increase (or decrease) in net sales during May compared with sales - ----------------in May, 1920 _ ________ 7.1— 3.0— 4.3 5.2— 3 .0 - Percentage increase (or decrease) in net sales from January 1, through May 31, 1921, in comparison with sales during the same five months of 1920 2.0— 3.2 6.3 5.4 2.1 Percentage increase (or decrease) in net sales during May, 1921, compared with sales during April, 1921------------------------- 2. 0 - 4.3— 0.1 1.0— 1.4— Percentage decrease in stocks on hand at the end of May, 1921, in comparison with stocks on hand at the end of May, 1920 ________ _______________________ 25.3— 14.6— 29.2— 24.2— 25.8— Percentage decrease in stocks on hand at the end of May, 1921, compared with stocks on hand at the end of April, 1921- 3.1— 0.2— 0.5— 1.7— 1.7— Percentage of average stocks on hand at the end of each month since January 1, 1921, to average monthly net sales dur ing the same five months ___________ 327.9 358.5 345.3 394.6 345.6 Percentage of outstanding orders for mer chandise on May 30, 1921, to total pur chases (cost price) during the calendar year, 1920 _______ — _________ 5.4 7.2 6.8 6.6 5.6 i — Denotes decrease. Confidential reports received from twenty-five department stores in the Fifth District show that the dollar value of business done by them during May, 1921, was 3% less than in May, 1920, this being the second month that the business has fallen below the corresponding month of last year. Again we mention that this reduction represents a loss in dollar value of business and not a reduction in actual volume o f units sold. W ashington reports increased sales, but all others show decreases. For the five months since January 1st, the District still shows a gain of 2.1% over business done during the same five months of 1920. Stocks on hand average 25.8% less than at the end of May, 1920, Richmond reporting the smallest reduction, 14.6%, and W ashington the greatest reduction, 29.2. All cities report lower stocks on hand at the end of May than at the end of April, both this year, the District reduction averaging 1.7%. The percentage of average stocks on hand at the end of each month since January 1st, to average monthly net sales during the same period is 345.6% for the District, indicating that the twenty-five re porting stores have sold each month this year $100.00 worth of goods for each $345.60 worth of stock carried, a very satisfactory turn-over figure. Outstanding orders at the end of May amounted to 5.6% of total purchase of merchandise during the calendar year 1920. f Compiled June 15, 1921]