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

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MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT
RICHMOND, VIRGINIA

OCTOBER 31, 1926

DISTRICT SUMMARY—Business in the
Fifth Reserve District during September was in
large volume. Retail and wholesale trade for
the fall season have begun well. Most of the
leading crops are better than a year ago, and the
District’s tobacco crop is much more profitable
than in 1925. Building construction is holding
up remarkably after two record years, and work
ers in the building trades are therefore steadily
employed. Practically all manufacturing estab
lishments are operating full time, and some fac
tories are expanding. Bank deposits, consider
ably above those of October a year ago, testify
to the purchasing power of the public. The
British coal strike has resulted in an increase
in the demand for coal in this country and pro
duction in, West Virginia has been in large vol
ume. Debits to individual accounts figures are
above those of 1925. Business failures in the
Fifth District in September were fewer than for
any other month in two years. Labor is fully em
ployed for this time of the year.
In spite of all the favorable factors enum
erated, the extent to which the indicated volume
of business will develop is highly problematical
because the collapse of the cotton market, as a
result of what may turn out to be a record crop,
has cast a shadow over prospects for fall trade.
Although the Carolinas have larger crops of cot
ton this year than in 1925, the increase in yield
will not balance the drop in prices, and the pur
chasing power in sections of the Carolinas is
probably lower this fall than in the fall of 1925.
RESERVE BANK OPERATIONS—Some fur
ther seasonal expansion in Reserve bank credit
occurred between September 15th and October
15th. Rediscounts for member banks at the
Federal Reserve Bank of Richmond rose during
the month from $46,014,000 to $47,855,000, and

the volume of Reserve notes in actual circulation
increased from $76,099,000 to $80,081,000. Total
bill holdings of the Richmond bank rose from
$57,306,000 on September 15th to $61,152,000 on
October 15th, holdings o f ‘ bankers acceptances
purchased in the open market having increased
from $11,292,000 to $13,288,000 during the month.
Member bank reserve deposits rose from $67,873,000 on September 15th to $68,812,000 on Oc
tober 15th. As a result of the several changes
in the items mentioned, the cash reserves of the
Federal Reserve Bank of Richmond rose between
the middle of September and the middle of Oc
tober from $90,499,000 to $94,556,000, but the
ratio of cash reserves to combined note and de
posit liabilities declined from 62.57 per cent to
61.57 per cent.
On October 15, 1926, member banks were bor
rowing slightly less from the Federal Reserve
Bank of Richmond than was the case a year ago,
and the demand for currency was also somewhat
smaller, due probably to lateness of the'crops.
On October 15th last year rediscounts for mem
ber banks at the Richmond bank totaled $49,213,000, compared with $47,855,000 this year, and the
circulation of Reserve notes was $84,739,000 on
October 15, 1925, compared with $80,081,000 on
October 15, 1926. Total bill holdings of the
Federal Reserve Bank of Richmond rose during
the year from $54,400,000 to $61,152,000 as a re
sult of an increase from approximately $5,000,000 to $13,000,000 in acceptances purchased in
the open market. Reserve deposits of member
banks, which aggregated $71,445,000 last year,
totaled $68,812,000 at the middle of October this
year. The cash reserves of the Richmond bank
totaled $107,172,000 on October 15, 1925, and
$94,556,000 on the corresponding date this year,
while the ratio of cash reserves to note and de
posit liabilities combined declined during the
year from 66.38 per cent to 61.57 per cent.

The National Summary will be found on page 8

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

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

Oct. 13, 1926

Sept. 15, 1926

Oct. 14, 1925

$ 529,272,000

$ 520,485,000

$ 527,971,000

139.294.000

140.049.000

128.829.000

40.649.000
15.020.000
388.682.000
209.133.000
22.698.000

41.766.000
14.061.000
381.731.000
209.232.000
22.247.000

43.002.000
15.250.000
383.746.000
199.385.000
24.604.000

In the accompanying table, which shows the principal items of condition for sixty-eight regular
ly reporting member banks in thirteen of the leading trade centers of the Fifth Federal Reserve Dis
trict, figures as of three dates are given, thus affording an opportunity for comparing the latest
available figures, those for October 13, 1926, with those reported a month earlier, September 15,
1926, and those of a year ago, October 14, 1925.
During the month between September 15th and October 13th, the reporting banks extended ad
ditional credit to customers, and in turn called upon the Reserve bank for further assistance, but the
loans and discounts for customers increased nearly $9,000,000 while the borrowing by the reporting
banks at the Reserve bank rose less than $500,000 during the month. Investments in bonds and se
curities declined approximately $750,000 and time deposits dropped $100,000, but demand deposits rose
about $7,000,000. The sixty-eight member banks drew upon their reserves to meet their customers5
needs, reducing their reserve deposits at the Reserve bank by a little more than $1,000,000. In order
to meet the increased demand for currency at crop marketing time, the reporting banks increased
their cash in vault by $1,000,000 during the past month.
In comparison with the items of condition reported on October 14, 1925, the figures for October
13, 1926, show an increase in loans to customers of about $1,225,000 and a gain in investments in
bonds and securities of nearly $10,500,000 during the year. On the other hand, the reporting banks
are now borrowing approximately $2,000,000 less at the Reserve bank than they were a year ago,
while their demand deposits and time deposits rose approximately $5,000,000 and $10,000,000, re
spectively, during the past twelve months. Nevertheless aggregate reserve balances of the sixtyeight reporting banks were approximately $2,225,000 less at the middle of October this year than on
the same date last year, and cash in vaults declined during the same period by over $225,000. On
the whole, the figures indicate that both the banks and their customers occupy a stronger position
this fall than they did last fall.
SAVINGS DEPOSITS—Fourteen regularly reporting mutual savings banks in Baltimore had de
posits aggregating $156,255,880 at the close of business September 30, 1926, the highest end of month total
on record. At the end of August deposits in the same banks totaled $155,189,787, and a year ago, on
September 30, 1925, the total was $149,832,622. Time deposits in sixty-eight reporting member banks
declined slightly between the middle of September and the middle of October, falling from $209,232,000 on September 15th to $209,133,000 on October 13th, but on the latter date the aggregate of de
posits was approximately ten million dollars above $199,385,000 of time deposits reported by the
same banks on October 14, 1925.
DEBITS TO INDIVIDUAL ACCOUNTS IN LEADING TRADE CENTERS
The accompanying table shows the total of debits to individual, firm and corporation accounts
in the leading trade centers of the Fifth Federal Reserve District for three equal periods of five
weeks, ended October 13th and September 8th, 1926, and October 14, 1925. The figures for the latest
available five weeks period may be compared with those reported for the preceding five weeks and
with those for the corresponding five weeks last year.
Debits during the five weeks ended October 13th aggregated $1,562,969,000, an increase of $204,915,000 over the total of $1,358,054,000 reported for the preceding like period, ended September 8th,
but the later period contained one more business day and in addition witnessed a large volume of
quarterly payments on and around October 1st. All of the twenty-three reporting centers showed
larger figures for the five weeks ended October 13th than for the preceding five weeks.
In spite of the generally lower price level existing this year, aggregate debits in the reporting
cities of $1,562,969,000 during the five weeks ended October 13th exceeded the total of $1,544,328,000
reported by the same cities for the corresponding period ended October 14th last year. Fifteen of
the reporting cities showed higher figures during the 1926 period, while eight centers reported lower

TOTAL DEBITS DURING THE FIVE WEEKS ENDED
CITIES
Oct. 13, 1926
Asheville, N. C.............
Baltimore, Md..............
Charleston, S. C.........
Charleston, W . V a ......
Charlotte, N. C.............
Columbia, S. C.............
Cumberland, Md.........
Danville, V a ..................
Durham, N. C.............
Greensboro, N. C.........
Greenville, S. C...........
Hagerstown, Md.........
Huntington, W . Va. ..
Lynchburg, V a ............
Newport News, Va. ..
Norfolk, V a...................
Raleigh, N. C...............
Richmond, V a...............
Roanoke, V a.................
Spartanburg, S. C. ....
Washington, D. C. ....
Wilmington, N. C. ....
Winston-Salem, N. C

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

40,628,000
463,483,000
33,678,000
42,352,000
62,428,000
26,682,000
10,720,000
11,222,000
37,945,000
29,700,000
26,362,000
12,542,000
29,973,000
25,141,000
13,808,000
92,595,000
26,807,000
180,022,000
33,430,000
16,217,000
274,128,000
26,653,000
46,453,000

$1,562,969,000

Sept. 8, 1926
$

40,297,000
426,072,000
29,309,000
38,631,000
51,501,000
19,477,000
9,101,000
8,242,000
33,279,000
25,989,000
19,547,000
11,783,000
28,116,000
19,627,000
12,243,000
78,857,000
21,848,000
142,589,000
31,462,000
12,919,000
237,797,000
20,119,000
39,249,000

$1,358,054,000

Oct. 14, 1925
$

35,999,000
490,686,000
31,833,000
41,345,000
61,344,000
26,031,000
10,855,000
10,528,000
28,993,000
27,497,000
26,438,000
12,283,000
30,503,000
23,294,000
11,288,000
77,921,000
33,506,000
180,974,000
31,083,000
21,505,000
258,174,000
28,379,000
43,869,000

$1,544,328,000

totals this year. Lower cotton prices probably accounted for most of the decline in several cities,
and less construction work reduced some other totals. Durham and Norfolk reported the largest
percentage gains this year, the increases probably being due chiefly to construction work in Durham
and to exceptionally active coal shipping through Norfolk.
BUSINESS FAILURES—The insolvency returns for September and for the third quarter of the
year are distinctly encouraging. A compilation made by R. G. Dun & Co. shows that there has been
a progressive decrease in the number of commercial failures in the United States during each of the
last six months, and the September total of 1,437 *s the smallest reported for any month in exactly
two years. The reduction from the 1,465 insolvencies of September 1925 is only slight, but allowance
should be made for the larger number of firms now in business, which obviously increases the pos
sibilities of financial embarrassment. From the year’s high point of 2,296 failures, reported last Jan
uary, the September total discloses a falling off of about 3 7 ^ per cent, while last month’s liabilities
of $29,989,817 are nearly 31 per cent under January’s mark of some $43,600,000. Moreover, the
September indebtedness is slightly less than the $30,687,319 of that month of 1925.
Numbering 4,635, commercial defaults in the United States for the third quarter of this year
are slightly below the 4,663 insolvencies for the corresponding period of 1925. They are, moreover,
almost 24 per cent under the 6,081 failures of the first quarter of the current year. When the statis
tics of liabilities are examined, especially gratifying results are revealed. The $87,799,486 of indebt
edness reported for the third quarter is the smallest for all quarters back to the third quarter of
1920, and shows a reduction of fully 15 per cent from the $102,351,371 of the third quarter of 1925.
In the Fifth District, the 85 failures in September were the lowest in number reported for any
month since September 1924, when 84 insolvencies occurred. In September last year there were 101
failures in the District. Liabilities last month totaling $1,604,500 exceeded the $1,433,713 reported for
August this year, but were considerably below the $2,330,536 reported for September 1925.
COAL—Bituminous coal production increased in September for the fourth consecutive month,
totaling 48,976,000 net tons in comparison with 46,352,000 tons mined in August. Total production
during the calendar year 1926 to October 9th amounted to 422,355,000 net tons, which is above pro
duction during the corresponding period of 1925, 1924, 1922 and 1921, but below the output of 1923
and 1920. West Virginia led all states in production of bituminous coal in September, but Pennsyl
vania took the lead during the week ended October 2nd. Exports of coal continued heavy in Sep
tember, Hampton Roads ports alone handling 1,512,209 tons and the entire country sending abroad
2,769,253 tons. Total exports for 1926 to September 30th were 11,602,469 tons, of which 7,703,743
tons passed through Hampton Roads. Retail coal prices were further advanced in most yards during
September and early October, as is customary at that season.

TEXTILES —In the face of official cotton crop estimates of near record production this year
following a comparatively large carryover of cotton from the 1925 crop, the textile industry has been
seriously handicapped during recent weeks. Mills hesitate to make up goods for stock in the face
of possible further reductions in raw material prices, and buyers are holding off their commitments
until they can be reasonably sure that bottom prices have been reached. In spite of these obstacles to
trade, however, mill executives profess to believe that when prices have settled more definitely a
large volume of business will develop, and meanwhile the mills continue to receive a considerable
volume of orders for immediate or near-by shipments. Cottoii consumption in the Fifth District
mills increased materially last month, September consumption being 240,748 bales compared with
205,019 bales used in August. September consumption this year was also ahead of 184,972 bales used
in September 1925, when operating time was somewhat restricted by low water in the streams which
furnish water power. North Carolina mills consumed 130,360 bales in September, South Carolina
mills 99,575 bales, and Virginia mills 10,813 bales, all three states exceeding the figures of both
August 1926 and September 1925. Consumption in the Fifth District in September totaled 58J/2 per
cent of consumption in cotton growing states and 42 per cent of National consumption, compared with
57 per cent and 41 per cent, respectively, consumed in the District in August.
BUILDING OPERATIONS FOR THE MONTHS OF SEPTEMBER 1926 AND 1925.
Premits Issued

z0
1

CITIES

New
1926

Repairs

1925

1926

581
32
4
33
* 12
39
67
5
144
108
19
40
22
* 51
36
67
53
42
61
76
38
11
10
86
30
11
9
31
396

608
23
7
34

31
59
35
42
47
75
56
8
7
80
17
10
16
31
497

1,117
10
5
3
* 17
36
70
4
110
34
5
7
5
*
3
2
51
13
4
32
17
17
8
9
70
25
38
57
17
497

Totals........... 2,051

2,093

2,263

Baltimore, Md. ....

2 Cumberland, Md...

3 Frederick, Md......
4 Hagerstown, Md...

5 Danville Va..........
6 Lynchburg, Va.....
7 Norfolk, Va.

8 Petersburg, Va.....

9 Richmond, Va. ....

10
11
12
13
14
15
16

17
18
19
20
21
22
23
24

25
26

27
28
29

Roanoke, Va. ....
Bluefield, W. Va...
Charleston, W. Va.
Clarksburg, W. Va
Huntington, W.V a.
Parkersburg, W.V a
Asheville, N. C___
Charlotte, N. C.....
Durham, N. C. .
Greensboro, N. C.
High Point, N. C—
Raleigh, N. C........
Salisbury, N. C.....
Wilmington, N. C.
Winston-Salem, N. C.
Charleston, S. C ...
Columbia, S. C.....
Greenville, S. C...
Spartanburg, S. C.
Washington, D. C.

24
75
2
150
88
15
41
15

1925

1926

1925

1926

839 $ 3,863.016 $ 3,284,304 $ 568,680 $
9
64,862
55,075
7,850
3
20,060
19,525
5,400
12
60,160
32,005
1,400
6,760
8,265
30,847
20
69,207
74,226
22,723
57
129,141
110,090
39,610
9
31,600
10,650
1,095
88
378,448
593,434
76,563
47
228,325
260,694
6,995
1
54,670
4,012
13,445
9
73,698
9,725
48,360
8
47,235
19,040
1,950
*
57,295
*
500
8
60,620
1,000
76,940
40
2,617,984
779,900
32,460
9
626,450
164,260
12,975
20
237,320
4,350
*3,167,650
29
335,458
229,780
43,843
11
258,575
287,345
13,275
208,186
7
151,158
43,279
10
43,225
30,200
2,105
76,000
5
23,100
10,400
110
757,390
542,420
22,185
29,945
38
15,790
17,695
62
52,125
50,749
10,145
25
55,200
144,150
26,445
24
160,125
103,885
4,235
204
4,216,780
4,398,275
533,430
1,704 $14,762,565

$14,717,297

$1,532,090

1925

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

0
2

510,840 $
636,552
16.8# 1
4,550
13,087
21.9
2
972
4,963
24.2
3
14,580
14,975
32.1
4
5
3,950
— 19,772 — 56.8
6,445
11,259
14.0
6
25,265
33,396
24.7
7
11,317
10,728
48.8
8
113,490
— 251,913 — 35.6
9
8,305
— 33,679 — 12.5 10
1,400
43,837
29.5 11
32,525
2,538
3.1 12
6,595
23,550
92.0 13
14
9,685
— 25,005 — 29.0 15
17,275
1,853,269
232.5 16
19,800
455,365
247.4 17
19,881
—2,945,861 — 92.4 18
16,056
133,465
54.3 19
17,200
— 32,695 — 10.7 20
9,650
90,657
56.4 21
5,500
9,630
27.0 22
7,700
55,600
180.5 23
61,882
175,273
29.0 24
7,723
24,127
102.6 25
15,162
—
3,641 — 5.5 26
7,590
— 70,095 — 46.2 27
6,170
54,305
49.3 28
335,140
16,795
.4 29
$1,296,648

280,710

1.8#

* These figures not included in totals. — 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 continue in the Fifth District in very large volume, in spite of signs of over
building in some sections. The accompanying table shows that only 42 fewer permits for new con
struction were issued in 27 cities in September than in September 1925, and the valuation figure last
month for new work exceeded the September 1925 figure by $45,268. In alteration and repair work,
this year’s figures exceeded last year's in both number of permits and valuation. In total valuation
for all classes of work in 28 cities, the September 1926 figures averaged 1.8 per cent above those of
September 1925, only 8 cities reporting lower figures for the 1926 month. Charlotte led with a gain
of 247.4 per cent, but Asheville’s increase of 232.5 per cent over a very large total in September last
year was more notable. Other increases of more than 50 per cent in valuation were reported by
Clarksburg, Greensboro, Raleigh, Wilmington and Charleston, S. C. The outstanding declines were

in Durham, where an extremely large volume of work at Duke University raised the September 1925
figures abnormally, and in Richmond, where there appear to be signs of recession in the record vol
ume of the past two years.
COTTON—Since our September 30th Review was written, spot cotton prices have fallen ap
proximately $20 a bale. The average price paid growers in the Carolinas dropped from 16.01 cents
per pound during the week ended September 18th to 12.13 cents during the week ended October 16th.
The .drastic decline carried prices to the lowest level since the middle of August 1921, and was caused
by the increased estimates of production shown by the Department of Agriculture released on Sep
tember 23rd and October 8th, the latter of which predicted a larger crop than that of last year.
The Department of Agriculture’s cotton report of October 8th, based upon the October 1st con
dition of the crop, estimated the condition at 61.3 per cent of a normal and gave 16,627,000 bales as
the probable production figure this year. The estimate of production exceeded the September 15th
figures by over 800,000 bales, and was more than 500,000 bales above the unusually large crop of
1925. Weather in September was highly favorable for cotton development throughout the belt, and
the crop overcame much of its late start and the unfavorable weather of August.
The Census Bureau’s ginning report to October 1st showed 5,639,284 bales, compared with 2,510,818 bales ginned to September 16th this year and 7,126,248 bales to October 1, 1925. This year
3,128,466 bales were ginned during the latter half of September compared with 2,844,182 bales gin
ned during the corresponding period last year.
Cotton consumption in American mills increased in September, the consumption being 571,105
bales compared with 500,652 bales used in August 1926 and 483,082 bales in September 1925. Total
consumption since August 1st was 1,071,757 bales, compared with 934,318 bales consumed during
the same two months in 1925. Manufacturing establishments held 937,129 bales of cotton on Sep
tember 30th, compared with 920,944 bales on August 31st and 869,419 bales on September 30th last
year. Public compresses and warehouses held 3,293,217 bales in storage on September 30th, 1,715,593 bales on August 31st, and 3,114,992 bales on September 30, 1925. Exports in September totaled
794,584 bales, compared with 391,329 bales sent abroad in August 1926 and 752,324 bales in September
1925. Imports declined in September to 10,007 bales from 13,280 bales in August this year and 15,121
bales in September last year. Spindles active in September numbered 32, 134,682 against 31,321,936
in August and 31,571,554 in September 1925.
The Carolinas are expected to make larger cotton crops this year than last, but the Virginia
crop is smaller. South Carolina has the best crop since 1920, the state showing up well except in the
northwestern counties, and a production of 1,120,000 bales is forecast in comparison with 889,000
bales in 1925. In North Carolina this year’s crop estimated at 1,200,000 bales compares with 1,102,000 bales ginned last year, and in Virginia a 1926 yield of 44,000 bales compares with 53,000 bales last
year. Gmnings in the three Fifth District states were less to October 1st than a year ago, indicating the
lateness of this year’s crop. Much of the late start of the crop has been made up, however, by favorable
weather from September 1st through the first half of October and while the entire crop is not yet safe,
it is so far advanced that material damage by frost seems unlikely. Farmers are having some trouble in
securing labor for picking, and the grades of some cotton may be lowered by allowing it to remain in the
fields too long. The farmers and business men in the sections dependent upon cotton are alarmed over the
prices consequent upon the estimated size of the crop.
TOBACCO—Most of the South Carolina tobacco markets have closed for the season, but a
few of them will remain open some time longer to clean up the crop. September auction sales in
the state totaled 29,589,715 pounds for growers, bringing the total for the season up to 50,377,306
pounds in comparison with the October 1st prediction for a crop of 61,589,000 pounds this year and
a crop in 1925 of 71,040,000 pounds. The average price paid for tobacco in South Carolina in Sep
tember was $23.73 Per hundred pounds, and the average for the season to October 1st was $24.21
per hundred. In spite of a ten and a half million pound reduction in this year’s crop, prices are so
much better this year than last that the 1926 crop will yield the growers approximately $2,500,000
more than the 1925 crop.
North Carolina tobacco markets sold 72,859,038 pounds of producers’ tobacco in September, for an
average of $24.80 per hundred pounds, compared with 72,000,329 pounds sold at an average of $17.40
per hundred in September 1925. Wilson led in September with sales aggregating 13,019,380 pounds,
with Greenville second with 11,558,678 pounds. The tbp price for the month was paid at Carthage,
which sold 320,298 pounds at $29.42 per hundred, while Fuquay Springs sold 467,972 pounds for $27.51
per hundred, and Williamston sold 1,916,727 pounds for an average of $27.36 per hundred. The North
Carolina crop is forecast at 360,095,000 pounds for 1926, compared with 378,490,000 pounds harvested
in 1925, but the crop this year is above the average in color and quality and is bringing very much
higher prices than last year.

Virginia’s tobacco prospects improved slightly during September, and on October ist a crop of
140,650,000 pounds was indicated, compared with 129,497,000 pounds harvested last year. Virginia
markets opened early in October, and the tobacco sold has brought the high prices indicated by the
earlier returns to growers in the Carolinas. With both a larger yield and higher prices this year,
Virginia tobacco growers will receive much larger returns from their 1926 crop than from that of
1925.
AGRICULTURAL NOTES—M ARYLAN D agricultural prospects did not change materially dur
ing September, but on the whole there was a slight improvement, according to the Agricultural Stasistician. The corn crop is disappointing, hay crops are short, and tobacco is curing badly. The
commercial tomato crop is very short, but improved prices have helped the growers to some extent.
Late potatoes range from medium fair to very good, and sweet potatoes are better than average.
Pastures are unusually good for this season. Large wheat yields and heavy crops of orchard fruits,
particularly apples, are the outstanding points of interest on this year’s crops. Farm labor is shorter
than a month ago.
V IR G IN IA crops will produce larger yields this year than was expected two months ago, accord
ing to the Virginia Crop Reporting Service, and yields of most crops will exceed 1925 yields. Sep
tember weather was favorable for farm work, but the first half of October brought frequent rains
and some light frosts, retarding farm work to some extent. The corn crop has been cut and some
of it husked. The crop turned out spotty, some sections having poorer crops than last year while
others have the best crops for several years. The total yield is above that of 1925. Hay and pas
tures improved distinctly during the first half of October, but the weather was unfavorable for cur
ing hay. Late potatoes are poor in the whole state except the eastern and southeastern districts,
but sweet potatoes are yielding very well and production will be above last year. Harvesting of the
unusually large apple crop has been retarded by lack of pickers. Few sales of apples have been made
and consequently a considerable portion of the crop, especially the lower grades, may not be packed.
The quality of the apple crop is good and the fruit is well sized and of good color. The peanut
crop is unusually late, and the yield is not expected to equal that of last year, although some good
crops have been reported.
NORTH CAROLINA crop prospects on the whole did not change materially during September.
No official information is available on agricultural conditions in the state later than September ist,
however, except on cotton and tobacco, both of which crops have been discussed elsewhere in this
Review.
SOUTH CARO LIN A prospects for agricultural yields improved slightly during September, as a re
sult of open, dry weather. A uniformly good corn crop has been made and old corn is being har
vested. The best yield in years was indicated by the October ist condition. Sweet potatoes prom
ise a crop approximately 60 per cent above last year’s yield, and the hay crop is much larger than
in 1925. The peanut crop is considerably better than a year ago. With the exception of tobacco,
the money value of which will exceed last year, all crops promise increased yields over those of
1925, but on account of low prices the cotton crop will be less remunerative to the growers.
W EST V IR G IN IA has one of the largest fruit crops in the history of the state, and, on the basis
of the October ist condition, larger yields for this year than in 1925 are also expected in buckwheat,
Irish and sweet potatoes, tobacco, sorghum syrup, wheat and pastures. Prospects are for reduced
yields this year in corn, oats and hay. The corn crop is maturing slowly and some frost damage has
been reported in late fields, but generally the crop is in good condition.
________________________ WHOLESALE TRADE, SEPTEMBER 1926__________________________
Percentage increase in September 1926 sales, compared with sales in September 1925:
36 Groceries
12 D ry Goods
9 Shoes
16 Hardware
5 Furniture
13 Drugs
—
.6
1.8
14.4
8.0
— 6.8
— .6
Percentage increase in September 1926 sales, compared with sales in August 1926:
15.8
9.7
11.9
18.9
1.7
15.8
Percentage increase in total sales since January 1st, compared with sales during the same nine months in 1925:
— 1.7
— 3.3
8.6
2.3
— 8.4
.9
Percentage increase in stock on September 30, 1926, compared with stock on September 30, 1925:
1.2(12)
— 8.3(5)
24.1(5)
5.8(8)
Percentage increase in stock on September 30, 1926, compared with stock on August 31, 1926:
10.2(11)
.9 (5 )
— 6.9(5)
— 2.8(7)
........
Percentage of collections in September to total accounts receivable on September 1, 1926:
67.8(22)
29.5(8)
21.2(6)
35.6(12)
36.7(3)
58.3(9)
— Denote decreased percentage.
N O T E : The number of firms reporting stock and collection data in each group is shown immediately follow
ing the percentages.

Ninety-one reports from wholesalers and jobbers in six important lines show that the usual
expansion in trade occurred in September in comparison with August, increased sales in each of the
six lines being reported. In comparison with sales in September 1925, sales last month were larger
in dry goods, shoes and hardware, but were smaller in groceries, furniture and drugs. Total sales
during the first nine months of this year were larger in shoes, hardware and drugs than during the
like period of 1925, while grocery, dry goods and furniture sales were smaller.
Stocks of groceries increased materially during September, dry goods stocks increased very
slightly, while shoe and hardware stocks declined during the month. At the end of September
stocks carried by grocery, shoe and hardware firms were larger than on September 30th a year ago,
but dry goods stocks declined during the year in value, perhaps largely due to lower prices this sea
son on cotton goods.
Collections in September improved over August in every line except shoes, and on the whole
were about up to seasonal average.
FIGURES ON RETAIL TRADE
As Indicated By Reports from Thirty-One Representative Department Stores for the
_____________ ___________________ Month of SEPTEMBER 1926
______________
Percentage increase in September 1926 sales over sales in September 1925:
Baltimore
Richmond
Washington
Other Cities
District
3.0
11.9
2.6
4.7
3.8
Percentage increase in cumulative sales from January 1st through September, over sales during the corresponding
nine months in 1925:
1.4
5.7
6.4
3.7
3.9
Percentage increase in September sales over average September sales during the five years 1920-1924, inclusive:
— 1.6
38.3
22.7
5.9
11.9
Percentage increase in stock on hand September 30, 1926, over stock on September 30, 1925:
— 3.6
6.9
11.2
— 2.5
2.3
Percentage increase in stock on hand September 30, 1926, over stock on August 31, 1926:
16.0
11.3
16.7
11.2
15.2
Percentage of sales during September 1926 to average stock carried during that month:
23.7
26.8
26.0
20.9
24.5
Percentage of cumulative sales since January 1st to average stock carried during each of the nine months:
217.9
230.5
238.0
194.4
223.5
Percentage of outstanding orders on September 30th to total purchases of goods in 1925:
8.5
10.1
7.3
10.3
8.3
Percentage of collections in September to total accounts receivable on September 1st:
19.9
24.6
33.2
27.7
2S.9
— Denotes decreased percentage.

Retail trade for the fall season as reflected in sales by thirty-one leading department and general
stores in the Fifth Reserve District, opened up normally in September, sales for that month exceeding
sales for August this year by 19 per cent and also averaging 3.8 per cent above September 1925
sales. September 1926 sales were 11.9 per cent greater than average September sales during the
five years 1920 - 1924 , inclusive, and cumulative sales from January 1st through September were 3.9
per cent greater in dollar amount than total sales during the first nine months of 1925.
Stocks increased seasonally by 15.2 per cent during September with the receipt of fall merchan
dise, and at the end of the month were 2.3 per cent above stocks on hand on September 30, 1925.
The percentage of sales to stocks carried in September was 24.5 per cent, while total sales this cal
endar year amounted to 223.5 per cent of average stock carried during each of the nine elapsed
months, indicating an annual rate of turnover of 2.98 times.
Collections in September totaled 23.9 per cent of receivables outstanding on the first of the
month, a lower figure than 24.4 per cent attained in August, 27.1 per cent in July, and 24.8 per cent
in September last year.
Outstanding orders for merchandise at the end of September totaled 8.3 per cent of aggregate
purchases of merchandise in 1925.

Compiled October 20, 1926.

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

Industrial and trade activity increased in September and is at
present in considerably larger volume than in midsummer. The
price of cotton has declined sharply within recent weeks while prices
of most groups of commodities have advanced. The volume of bank
credit has increased seasonally and money rates have remained firm.

P R O D U C T IO N .

Index of 22 basic commodities adjusted for seasonal variation (1919-100).
Latest figure-September 121.

PER CENT

------1200

Production in basic industries and factory
employment and payrolls, according to the Federal Reserve Board’s
indexes, after changing but little for about four months, advanced
in September to the highest point since last spring. The increase
has been particularly large in textile mill activity. Consumption
of cotton has increased considerably, woolen mill activity is the
largest since January, and employment has increased in nearly all
branches of the textile industry. Iron and steel production was
maintained from early in August until the latter part of October
at a level higher than for the corresponding period of previous
years. Automobile output was reduced in September but continued
larger than a year ago. Mining of coal has steadily increased since
midsummer, and the weekly run of crude petroleum from wells in
October reached the highest level since June of last year. Building
contracts awarded during August and September were only slightly
smaller in value than the awards for the corresponding period of
last year and in the first half of October far exceeded those of a
year ago. A substantial decline in contracts for residential struc
tures has been largely offset by increases in awards for industrial
and engineering projects. The Department of Agriculture’s October
18th estimate placed cotton production at 17,454,000 bales, an
increase of about three quarters of a million over the estimate made
on the first of the month and 1,350,000 bales more than last year’s
crop.

TRAD E.

WHOLESALE PRICES

Index of U. S. Bureau of Labor Statistics (1913-100, base adopted by Bureau).
Latest figure-September 150.5.

Wholesale and retail trade increased in September
and was slightly larger than last year. Inventories of department
stores increased slightly more than is usual in September, and at
the end of the month were in about the same volume as a year ago.
Railroad freight car loading reached new high weekly records in
September, and shipments were maintained during the early weeks
of October in much larger volume than in previous years. A great
part of the increase as compared with last year is due to shipments
of coal and ore, but loadings of manufactured commodities have
also been larger.

P R IC E S .

The general level of wholesale prices advanced
slightly in September and October, notwithstanding the drop in the
price of cotton to the lowest level since 1921. The Bureau of Labor
Statistics index of wholesale prices was about one per cent higher
in September than in August, reflecting advances in both agricul
tural and in non-agricultural commodities. In recent weeks prices
of corn, nonferrous metals and paper have declined, while prices
of live stock, meats, poultry and dairy products and bituminous
coal have increased.

B A N K C R E D IT .

figures are averages for first three weekly repoit dates lr
BILUONS OF DOLLARS

i
:
RESEI*VE BANK C

________ . BULIQHS OF DOLLARS '

redit

X / scountsfor
mber

/ l7

MeiBanks* i
! / ^ i USSecuirifies >s/
V Acceptainces X

D
i:

Total
Reserve B
ai
Credit j
l

Monthly averages of daily figures for 12 Federal Reserve Banks.
figures, averages o f first 22 days of October.

Between September 22nd and October 20th,
the seasonal increase in the demand for credit for agricultural and
commercial purposes was reflected in a continued growth in the
commercial loans of member banks in leading cities. Loans on
securities and holdings of investments declined, but the banks’ total
loans and investments were about $60,000,000 larger on October
20th than four weeks earlier. At the Reserve banks, the volume
of member bank borrowing, after considerable fluctuations in re
sponse to temporary conditions, was in October at about the same
average level as in September. There was little change in the banks’
holdings of United States securities, while acceptance holdings con
tinued to increase, as is usual at this season. Except for a tem
porary firming around the first of October, there has been little
change in the condition of the money market rates on commercial
paper and on acceptances rates have remained at the levels estab
lished in September.

Late*

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

FRASER