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MONTHLY

REVI EW

of Financial and Business Conditions

M g ____

i

% *Kichmondo

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va.

F ifth
FEDERAL

Reserve

Nr

D

is t r ic t

Federal Reserve Bank, Richmond, Va.

April 30,1943

Business in March, 1943
^ L I M A T I C conditions during most of April were un^ favorable for farm work throughout the District, with
progress delayed from two to three weeks. Frosts and
freezes in the forepart of the month damaged peaches and
strawberries severely, and to a lesser extent carried their
toll to apples and early truck crops. Adverse April
weather and the presence of blue mold threatens a serious
shortage of tobacco plants in North Carolina, the country’s
most important producing state.
The daily rate of bituminous coal production in the
Fifth District during March rose 2.5 per cent
above the February level and stood 12.9 per
cent above March, 1942. Actual March pro­
duction of 17,058,000 tons was 17.2 per cent
above that month in 1942, but one more day
was worked in March this year than a year ago.
The Southern Coal operators on April 15 re­
jected a proposal offered by the Government
that miners be guaranteed a six-day work week
over a period of fifty-two weeks a year, reply­
ing that so long as present conditions prevail
no guarantee would be needed to assure such amount of
work.
Trade activity moderated considerably in March from
that prevailing in February. March sales of department
stores in the District on an average daily seasonally ad­
justed basis declined 23 per cent from the February level,
but remained 10 per cent higher than a year ago. The
average daily March sales were 0.3 per cent above last
year as contrasted with a 4 per cent increase in actual sales.
This was due to an extra business day this year. The ad­
vent of an early Easter in 1942 caused a greater seasonal

correction on the average daily sales in that month than
in March, 1943, and as a consequence the seasonally ad­
justed sales in March show an increase of 10 per cent
from last year compared with an increase of 4 per cent
in actual sales. Wholesale trade in five lines of business
on an adjusted basis in March fell 6 per cent from Febru­
ary but remained 20 per cent higher than a year earlier.
Cotton textile activity made further slight improvement
in March with average daily consumption in the District’s
mills 1 per cent higher than in February and
2 per cent higher than in March, 1942. In an
attempt to alleviate the man-power shortage, the
Riverside and Dan River Mills are experi­
menting with half-shifts. The company has
appealed to the people of Danville and vicinity
to come and work in the mills for a half-shift
of four hours after completion of their reg­
ular daily work.
The value of building contract awards in
March was slightly higher than in February,
but this was considerably less than seasonal and the ad­
justed index declined 24 per cent to a level which was 54
per cent lower than last year. In the residential construc­
tion field about the only building of consequence came in
Baltimore, Washington, and Portsmouth, Virginia.
Ordinarily at this time of the year business and agri­
cultural loans of weekly reporting banks in this District
would be rising, but in the period between March 17 and
April 14 these loans declined $5,253,000, to continue a
trend that has been in evidence for many months. During
the above period security holdings of these banks rose
$21,260,000, due to increases in Treasury bonds and bills.

BUSINESS INDEXES—FIFTH FEDERAL RESERVE DISTRICT
Average daily 1935-1939=100
Seasonally adjusted
Mar.
1943
Bank Debits ............................
Bituminous Coal Production....
Building Contracts Awarded..
Building Permits Issued........
Cotton Consumption* ..............
Department Store Sales..........
Electric Power Production.....
Life Insurance Sales...............
Wholesale T rad e.....................
r—revised.
*Not seasonally adjusted.



Feb.
1943

Jan.
1943

Mar.
1942

186
166 .
223

184
154
292
27
164
234r
195

171r
137
196
124
155
197
190
90
171

168
147
481

58

166
181
189
109
174

101

185

102

162
165
159
96
145

% Change Mar. 43 from
Mar. 42
Feb. 43
~b 1
+ 8
— 24
+115
4" 1
— 23
— 3
+ 8
— 6

+
+
—
—
-b
+
+
+
+

11
13
54
43
~

10

19
14

20

MONTHLY REVIEW

2

War Loan Drives
War expenditures in the United States are now running
at about $7 billion per month, and for the fiscal year ended
June 30, 1944 are expected to reach a monthly average of
$8 billion. As a result, according to the latest available
Treasury estimates, the public debt will increase $62.5 bil­
lions during the fiscal year 1943, and $75.8 billions during
the fiscal year 1944.
The growing debt with its implication of vast borrowing
presents a twofold problem. It is absolutely essential to
raise the money; but it must be raised in such a way as to
minimize the inflationary consequences of spending.
If the borrowing takes the form of bank purchases of
government securities with a resulting expansion of de­
mand deposits, the available money supply in the hands of
individuals is increased. Those deposits are at first Treas­
ury deposits but as they are withdrawn and spent they
become deposits of individuals. As such, they represent
additional, or “new money,” in the hands of individuals.
On the other hand, if individuals buy the securities, money
in their hands is absorbed, with the eventual net effect of a
transfer of ownership from the individuals buying the se­
curities to others. Thus, there is no net addition to the

money supply, and in process a part of the money supply is
temporarily immobilized. As a consequence there is less
money in the hands of individuals to compete for a dimin­
ished supply of goods and services; therefore less pressure
on the prices of those goods and services to rise.
It is for this reason that the Treasury financing pro­
gram emphasizes the purchase of securities by individual,
corporate, and institutional investors other than com­
mercial banks from current income, insofar as possible.
The First War Loan Campaign in December of last
year marked the beginning of a series of periodic intensive
drives to sell government securities on a nation-wide basis
and as far as possible outside the banking system. The
national goal for the first campaign was $9,000,000,000;
its success is evidenced in the fact that this goal was ex­
ceeded by about $4 billion. In this campaign the Treasury
provided a variety of offerings, including a 2
per cent
twenty-six year bond exclusively for non-banking in­
vestors, a 1 % per cent five and a half year bond and a
seven-eights of 1 per cent one year certificate, in addition
to war savings bonds, Series F and G, and tax savings
notes of Series A and C. The Fifth Federal Reserve
District’s part in this December drive is shown as follows:

DECEMBER W AR LOAN DRIVE
Sales to Investors in the United States and in the Fifth District
(Amounts in millions of dollars)
United States_______
Commercial
Banks
( 1)
2,114
2J)58

Ctf. of Ind.................................
1% Treas. Bonds..........................
Treas. Bonds...........................
Tax Savings Notes, Series A & C
U. S. Savings Bonds, Series F & G
Grand Total ...............................
Vs

Other
(2)
1,681
1,003
2,590
1,312
288
6,874

2x
k

4,172

Total
(3)
3,795
3,061
2,590
1,312
288
11,046*

____________________ Fifth District
Commercial
Banks
(4)
93
94

Other
(5)
60
40
70
61

Total
W

153
134
70
61

20

20

251

187

438*

%

of U. S
of each
(6-3)
4.03
4.38
2.70
4.65
6.94
3.97

* Does not include Treasury Bills or Series E Savings Bonds.

It appears that in the December campaign investors in
the Fifth Federal Reserve District purchased about 4 per
cent of all securities sold in the U. S. However, these
purchases ranged from 6.9 per cent of all Series F & G
Bonds sold, down to only 2.7 per cent of the 2J4 per cent
Treasury Bonds.
Investors other than banks in the United States pur­
chased in December 62 per cent of all securities sold*;
investors other than banks purchased 57 per cent of all
securities sold* in the Fifth District. With regard to

specific issues, investors other than banks in the Fifth
District purchased 6.9 per cent of all Series F & G Sav­
ings Bonds sold in the United States during the drive, but
only purchased 1.3 per cent of the 1 % Treasury Bonds,
1.6 per cent of the % Ctf. of Ind., and 2.7 per cent of the
2y2 per cent Treasury Bonds.
O f the $438 million of securities sold in the District the
distribution as to issues, and between bank and nonbank
investors, is shown in the following table.

DECEMBER W A R LOAN DRIVE
Sales to Investors in the Fifth District
(Amounts in millions of dollars)
ISSUE
Ctf. of Ind.............................................
Treas. Bonds...................................... ;.
21
/2 Treas. Bonds......................................
Tax Savings Notes, Series A & G.........
U. S. Savings Bonds, Series F & G .......
Total—All Issues* ...................................
%
1%

Total Sales
Amount

93
94

20

34.9
30.6
16.0
13.9
4.6

438

100.0

187

153
134
70
61

* Does not include Treasury Bills or Series E Bonds.
* Excluding Series E Savings Bonds and Treasury Bills.




%

Commercial Banks
Amount
%
49.7
50.3

Other
Amount

%
23.9
15.9
27.9
24.3

20
100.0

60
40
70
61

8.0
100.0

251

% Distribution of
Each issue held by
Other
Comm. Bks.
60.8
70.1

39.2
29.9
100.0
100.0
100.0

57.3

MONTHLY REVIEW
The April War Loan Drive, officially titled the Second
War Loan, represented an even more intensive effort to
carry out the Treasury objectives.
In March, Treasury estimates indicated that the total
amount required to finance the last four months of the
fiscal year 1943 would be $20.9 billions. The goal in the
April drive was $13 billions, or 44 per cent higher than
the goal in the previous drive. Offerings of securities in
the Second War Loan drive nearly duplicated the pattern
of the previous drive. As in December, a 2 ^ per cent
26 year bond, a % per cent one year certificate, War Sav­
ings Bonds (Series F & G ), and Tax Savings notes of
Series C were included. Some differences, however, may
be noted. Series A tax savings notes were not included
in the Second War Loan drive. And, in place of the
1% per cent five and a half year bond offered in December,
the Treasury substituted a longer term bond of higher
yield (a 7j^-9j4 year 2 per cent bond) particularly de­
signed to appeal not only to banks and institutional invest­
ors but also to individuals preferring this type of freely
negotiable bond.
In approaching the $13 billion goal, emphasis was
placed on an even wider distribution of securities outside
the banking system, in order to hold down the inflationary
pressure on prices. Thus the entire campaign was directed
towards reaching the substantial increases in income and ac­
cumulated savings in the hands of individuals (in the year
1942 savings in the form of currency and demand deposits
increased $10.6 billions*). The national goal in the Second
War Loan drive for investors other than banks was $8,000,000,000. In order to achieve more readily this goal
the War Savings Staffs and Victory Fund Committees
were combined in each district for the duration of the
campaign and designated as the Treasury War Finance
Committee.
For the Fifth Federal Reserve District the goal for
sales to nonbank investors was set at $350,000,000. This
goal was based upon the Fifth District’s proportion of the
national total of time and demand deposits of individuals,
partnerships, and corporations in all commercial banks as
of December 31, 1942, plus allowances for the assets of
mutual savings banks and insurance companies within the
District. The goal for the April campaign represented an
increase of approximately $50 million, or 17 per cent, over
the amount of money actually raised from nonbank in­
vestors in the December drive (including sales of Series
E Bonds). The distribution of this goal by states is shown
as follows:
SECOND WAR LOAN
Goals for Sales to No'nbank Investors
in the Fifth District
(amounts in thousands of dollars)

3

In addition to the $8 billion goal set for investors out­
side the banks, the Second War Loan allotted $5 billion to
commercial banks. Commercial banks were allotted $2.1
billion of both the Treasury Bonds of 1950-52 and the oneyear Certificates of Indebtedness, and $800 million of
Treasury bills. The necessity for placing as much of this
$5 billion as possible in banks outside the financial centers
of New York and Chicage was stressed. Thus, cognizance
was taken that purchases in those areas to which funds are
returning through Treasury disbursements would result
in a more equitable distribution of reserves. With regard
to reserves, the Federal Reserve System policy through
open market operations, reduced reserve requirements,
and maintaining a market for bills and securities, placed
the banks in a position to invest freely. Congress also re­
vised the Federal Reserve Act by eliminating reserve re­
quirements against War Loan deposits, effective April 13,
1943.
The Second War Loan drive in the Fifth Federal Re­
serve District was a marked success. While the final re­
sults of the drive are not yet available, preliminary figures
on sales through May 1 clearly show the District’s achieve­
ment.
Nonbank subscriptions in the District totaled above $525
million, or 50 per cent higher than the quota set as a goal
for the District. All of the individual states in the District
substantially exceeded their quotas for sales to nonbank
investors. As for sales of securities available for banks,
all allotments were taken up, but actual figures are not yet
available. These sales ran above $300 million, and when
this sum is added to the sum realized from sales to non­
bank investors the District’s total contribution to the Na­
tional goal of $13 billion climbs well above $825 million.
The following table shows the preliminary results of the
drive with regard to nonbank subscriptions in comparison
with the goals in each state and the Fifth District.
SECOND WAR LOAN DRIVE
Preliminary Report of Total Sales to
Investors Other than Commercial Banks and Dealers
April 1-May 1, 19^3
(Amounts in thousands of dollars)
Goals for
Sales to
Sales
%
Nonbank
Apr. 1-May 1
of
Investors
1943____
Goal
Maryland ....................
$119,000
$174,036
146
42,000
66,332
158
Dist. of Col.................
Virginia ......................
75,000
104,022
139
West Virginia ........ . ..
29,000
46,051
159
North Carolina . . . . . .
62,000
97,168
157
South Carolina ............................ 23,000___________ 37,475_________ 163
Fifth District . . . . . .
$350,000
$525,084
150

STATE
.
Goal
Maryland .......................................................... . . ..................... ............. $119,000
District of Columbia........................................J . . . . . . . . ...........
42,000
Virginia ...................................................... .......................................... 75,000
West Virginia ........................................................................... .
2.9,000
North Carolina ...................................................................................... 62,000
South Carolina ............................................. ......................................... 23,000
Fifth District ............................................. ...................... .
$350,000

The above are preliminary figures available through
May 1. Figures for E Bonds included are taken from
reports received from issuing agents, which means they
are several days behind actual sales. Final figures, when
available, will be published in a later issue of the M o n t h l y

♦Report by the S.E.C.

R




e v ie w

.

MONTHLY REVIEW

4

Banking Developments in 1942
In almost every quarter of the Fifth Federal Reserve
District, agriculture, manufacturing, trade, and transporta­
tion established new high records in 1942, and it therefore
seems paradoxical that bank loans should have declined in
that year of extremely active business. Rapidly rising
production and distribution of goods, accompanied by ris­
ing prices, in days gone by would have resulted in a more
or less commensurate increase in bank loans, but such cor­
relation has not closely obtained since the advent of the
Great Depression.

increased security holdings 101.7 per cent to $1,513,195,900 on the latter date. As for the changes in these hold­
ings as effective earning assets in each year (i.e., the aver­
age holdings on the stated call dates) an agrgegate of the
averaged figures of each member bank totaled $1,162,645,300 in 1942, which was 54.5 per cent higher than in 1941.
Banks having deposits between $10 and $25 million re­
corded the largest percentage increases in security hold­
ings, which increases were almost wholly in Government
securities.

Accumulation of inventories in trade establishments and
in manufacturing concerns used to be financed by bank
loans, but with improved transportation facilities which
developed in the last decade, together with the accumulation
of liquid resources among business firms, less reliance has
been placed on banks to finance inventory accumulations.
Such financing as occurred in the past two years Was
mostly done in 1941, and even though further inventory
accumulations occurred in this District in 1942, there is
little evidence that they were financed with bank loans.

Current indications are that the chief outlet for bank
funds, for the duration of the war at least, will be in Gov­
ernment securities. These may now be purchased by
banks through their War Loan Accounts, and thus no
reserves are required against the resulting deposit. Fur­
thermore, no deposit insurance premiums are chargeable
against such deposits.

Loans
Bank loans of 447 identical member banks in the Fifth
Federal Reserve District (figures averaged for the four
call dates— December 31, 1941; April 4, June 30 and
December 31, 1942 for each bank) showed an aggregate
decline of $6,072,500 from 1941 similarly averaged. This
does not seem like a significant amount when compared
with the total of $752,403,000 outstanding over the year
1942, but it does not tell the whole story.
The total loans of twelve banks having deposits over
$50 million rose $15,828,800, or 6.6 per cent (average of
four dates) between 1941 and 1942, while the total loans
of 435 banks declined $21,901,000, or 4.2 per cent. De­
clines in loans outstanding in the above periods were more
pronounced in the smaller banks than in the larger banks,
with those banks having deposits under $5 million showing
group declines between 5.7 per cent and 6.8 per cent, while
those banks having deposits over $5 million and less than
$50 million recorded group declines between 2.1 per cent
and 3.9 per cent.
The increase in loans of the banks whose deposits were
above $50 million is no doubt due to supply and facility
loans to contractors engaged directly in war production.
The decline in aggregate loans of all groups of banks
having fewer than $50 million deposits can perhaps be
connected with several causes, among them: a deluge of
funds flowing into all areas as a result of Government dis­
bursements ; high prices of agricultural products ; and
credit restrictions on consumer loans.
Much financing of private companies’ participation in
the war effort which normally would be done through
banks or the capital market is now handled by the Defense
Plant Corporation, and the only way banks can participate
in this business is through purchase of Government securi­
ties.
Between December 31, 1941 and December 31, 1942,
447 member banks in the Fifth Federal Reserve District




Cash Assets
Although in dollar amounts combined loan and security
holdings increased from 1941 to 1942, the increase was
not commensurate with the increase in total deposits and
as a consequence cash assets increased in all groups of
banks except those having deposits over $50 million. In
general, small banks had the largest percentage increase in
cash assets and the larger banks had the least percentage
increase, while those banks with deposits over $50 million
had an aggregate decrease in cash assets.

Operating Expenses
Total expenses of 447 member banks in the Fifth Fed­
eral Reserve District increased $3,998,000, or 8.6 per cent,
from 1941 to 1942, with income taxes included in “ Other
expenses.” Salaries and wages rose $1,772,600, or 9.0
per cent, and “ Other expenses” rose $3,337,400, or 18.1
per cent, while interest paid on time deposits declined
$1,062,000 or 11.7 per cent.
Salaries and wages rose least (3.6 per cent) for those
banks having less than $250 thousand deposits and most
(13.5 per cent) for those banks with deposits over $50
million. In-between groups showed wage and salary in­
creases more or less graduated between the foregoing
limits.
Interest paid on time deposits declined the largest per­
centages in the groups of banks with deposits between $10
and $25 million, and in substantial percentages in those
banks having deposits of $2 to $5 million and $25 and $50
million. These decreases from 1941 to 1942 in interest
paid on time deposits were due almost wholly to reductions
in the rate of interest paid, for all groups of banks, except
those with deposits over $25 million, had increases in the
amount of time deposits in 1942 over 1941.
Percentage increases in “ Other expenses,” which in­
clude income taxes paid, show reasonably close concentra­
tions for most groups around the District average of 18.1
per cent. These expenses of the banks with deposits under
$250 thousand, however, were lower in 1942 than in 1941.

MONTHLY REVIEW

Net Current Earnings
Aggregate net current earnings of the 447 banks amount­
ed to $17,013,000 in 1942, a decline of 7.7 per cent from
1941, but this does not show very clearly what happened
to the different size banks. Those banks with deposits
over $50 million increased their aggregate net current
earnings $928,600, or 14.8 per cent, while all other groups
decreased theirs $2,354,800, or 19.4^per cent.
The chief cause of the decline from 1941 to 1942 in net
current earnings, in those groups where declines occurred,
was the declines of 1 to 7 per cent in total earnings, and
the more substantial increases of 3 to 12 per cent in total
expenses. The reduction in total earnings was due almost
wholly to lower interest and discount earned on loans in
all groups of banks, the decline being offset by increases
in all other earnings in only the group containing the
largest banks. Lower rates of interest in 1942 than in
1941 on both loans and securities were in evidence in all
groups of banks.

FEDERAL RESERVE BANK OF RICHMOND
(In Thousands)
% Change from
April 14,
ITEMS
4-15-42
3-17-43
1943
30
$1,059,>35
Total Gold Reserves............. , , ,
+ 3
+
41
27,330
Other Reserves ................ .
+
+ 1
30
+ 3
1,087,265
Total Reserves ...............
+
29
+ 32
143
—
Bills Discounted ................
32
—
491
— 13
Industrial Advances .........
142
— 3
338,243
Gov’t. Securities, Total---+
33
— 4
128,015
+
42
— 3
61,149
+
— 44
61,969
Certificates ...................... , .
+ 106
+ 14,251
87,110
Bills .................................
141
— 3
338,877
Total Bills & Securities----+
6
132,289
— 14
Uncollected Items .............
+
54
14,762
— 9
Other Assets ........................
+
41
$1,573,193
0
Total Assets ..................
+
81
$ 826,962
Fed. Res. Notes in Cir.......
+ 2
+
17
— 1
608,933
Deposits, Total ..................
+
22
559,984
— 2
Members’ Reserves .........
+
+ 11
— 3,631
586
U. S. Treas. Gen. Ac.......
8
+ 10
34,248
Foreign ............................
+
99
14,115
+ 38
Other Deposits ...............
+
—
2
— 10
118,533
Deferred Availability Items ___
69
'603
— 15
Other Liabilities .................
+
12
18,162
Capital Accounts.................
+ 3
+
41
0
Total Liabilities .............
+

WHOLESALE TRADE, 257 FIRMS
Net Sales
Stocks
Ratio Mar.
March 1943
March 31, 1943 collections
LINES
compared with
compared with
to acc’ts
Mar.
Feb. Mar. 31 Feb. 28 outstand’g
1942
1915
1942
1943
Mar. 1
92
— 31
0
0
Auto supplies (15)* .........
— 13
Shoes (3)* ........................
— 2 + 20
20
Drugs & sundries (8)*-----f* 18 + 13
71
— 2
— 34
Dry goods (7)*....................
+- 39 + 12
75
— 53
— 3
Electrical goods (19)*----— 14 + 14
41
— 1
— 8
Groceries (74)* .................
+ 17 + 6
— 45
— 6
88
Hardware (1 4 )* .................
— 6 + 12
84
— 26
— 5
Industrial Supplies (10)*..
0 + 29
85
— 7
0
Paper & products (12)*----— 12 + 17
Tobacco & products (6)*..
-f* 39 + '8
— *4
— 28
94
Miscellaneous (89)* .........
— 1 + 15
92
— 3
— 31
District Average (257)*
+ 4 + 13
Source: Department of Commerce.
* Number of reporting firms.




5
BUILDING PERMIT FIGURES
March 1943

March 1942

Maryland
$ 1,171,175
Baltimore.................. ..
Cumberland ..........................................719
Frederick .................... ......................... 750
Hagerstown .................
11,805
Salisbury .................... ........................4,625
Virginia
Danville ........................
$
6,495
Lynchburg .................... ....................... 4,400
Norfolk ........................
228,065
Petersburg .................. ......................... 500
Portsmouth ..................
2,008,785
Richmond ................ .
50,880
Roanoke ........................
12,363
West Virginia
Charleston ....................
$
26,950
Clarksburg .................. ........................8,750
Huntington .................. ........................8,616
North Carolina
Asheville........................
$
12,917
11,088
Charlotte ......................
Durham ........................
107.915
i0,221
Greensboro ..................
50,741
High Point ................
Raleigh ..........................
13,450
Rocky Mount .......................................1,840
Salisbury .................... ........................2,425
30,475
Winston-Salem.............
South Carolina
Charleston ....................
$
36,230
91,845
Columbia ....................
Greenville .................... ........................ 7,190
Spartanburg .................
81,016
District of Columbia
Washington .................
$ 1,058,682
District Totals ...............
3 Months ..........................

$ 2,277,822
25,030
19,695
48,095
34,405
$

60,206
48,915
977,860
10,500
584,305
419,947
69,552

$

62,944
14,093
147,835

$

18,888
187,238
181,015
172,609
80,481
89,900
20,525
28,203
105,549

$

115,446
218,255
42,765
89,710

$ 2,706,338

$ 5,060,913
$13,729,443

$ 8,858,126
$23,448,007

DEBITS TO INDIVIDUAL ACCOUNTS
000 omitted
Mar.
1943
Dist. of Col.
Washington .............
Maryland
Baltimore ................
Cumberland .............
Frederick ..................
Hagerstown .............
North Carolina
Asheville ..................
Charlotte ..................
Durham ....................
Greensboro .................
Kinston ......................
Raleigh ......................
Wilmington ...............
Wilson ......................
Winston-Salem .........
South Carolina
Charleston ................
Columbia ..................
Greenville ................
Spartanburg .............
Virginia
Charlottesville .........
Danville ....................
Lynchburg .................
Newport News .......
Norfolk ....................
Portsmouth ...............
Richmond ..................
Roanoke ....................
West Virginia
Bluefield ....................
Charleston ................
Clarksburg ................
Huntington ...............
Parkersburg .............
District Totals .............

% chg from
March 1942

$ 456,531

+ 5

723,375
10,659
10,536*
15,119

+ 27
+ 2

22,719
119,265
51.593
39.443
5,956*
52,308
36,916
6,503*
67,230

+ 19
— 2
+ 60
+.33

39,463
49,46f>
38,887
20,587
11,772*
12,239
19,669
23,213
112,554
14,168
262,490
36,278

20,222*
78,318
12,833*
26,779
16,140
$2,345,409
* Figures not included in District Totals.

3 Mos.
1943

%

$1,265,198

chg from
3 Months
1942
+ 3

1,921,787
29,882
27,882*
40,870

+ 18
0

+ 7
+ 7
4-37
+ 9

4-26

59,723
337,344
140,311
92,071
17,232*
148,859
101,372
20,199*
180,902

+ 18
+ 6
4- 9
+ 15

113,274
151,915
108,639
59,630

+
+
+
+
+
+
+

31,568*
37,927
54,406
64,872
308,250
37,247
764,755
99,400

— *4

—28
+ 38

3
2
36
21
43
21
99

^13
+17
+23
+ 16

55,148*
205,755
36,896*
77,726
41,826
$6,443,941

— *8

— 25
+ 41
+ 13
+
+
+
+

20
19
6
16

+ ii

— 97
+ 43
+ 18
+ 36
+ 20
— 3
+ *5

+ i6

+ 12
+ 12

MONTHLY REVIEW

6

MUTUAL SAVINGS BANK DEPOSITS
9
Baltimore Banks
Mar. 31, 1943
Feb. 28, 1943
Mar. 31, 1942
Total deposits ..
$237,162,481
$234,977,978
$219,072,180

41 REPORTING MEMBER BANKS—5th DISTRICT
(In Thousands.)
ITEMS
April 14,
% Change From
1943
3-17-43
4-15-42
_ 3
—
25
$ 254,418
Total Loans .................................
— 4
— 28
120,953
Bus. & Agric. Loans...............
—
2
1
51,872
+
Real Estate Loans .................
2
— 31
81,593
All Other Loans........................
80
+ 2
+
$1:,083,422
Total Security Holdings...............
151,514
+ 2,,399
+ 8
U. S. Treas. Bills....................
2
129,444
+ 1,,124
U. S. Treas. Certificates.........
73
133,042
U. S. Treas. Notes..................
+ 2
+
62
551,855
+
+ 2
U. S. Gov. Bonds......................
— 49
5
51,711
Obligations Gov. Guaranteed..
—
1
65,856
0
Other Bonds, Stocks & Sec.......
12
101,844
+ 19
+
Cash Items in Process of Col...
— 19
0*
$ 194,254*
Due From Banks ........................
23
34,973
+ 3
+
Currency & C o in ..........................
10
5
+
$ 322,538
Reserve with F. R. Bank.........
34
+
+ 1
Other Assets ...............................
$ 60,912
25
1
$2,052,361
+
+
Total Assets .................................
28
0
$1,640,564
+
Total Demand Deposits.............
42
1,029,282
+
Deposits of individuals.............
+ 2
7
14
53,343
+
Deposits of U. S. Gov.............
19
103,636
+
+ 11
Deposits of State & Local Gov.
9
430,830*
3*
+
Deposits of Banks..................
8
18
23,473
Certified & Officers’ Checks..
+
8
+
Total Time Deposits .................
+ 1
§ 224,058
7
210,706
Deposits of individuals...........
+
+ 1
28
1
13,352
Other Time Deposits.................
+
0
0
0
Liabilities for Borrowed Money..
$
74
All Other Liabilities....................
+
.$ 80,366
+ 10
0
4
Capital Accounts ........................
$ 107,373
+
25
$2,052,361
Total Liabilities ........................
+
+ 1
* Net figures, reciprocal balances being eliminated.

CONSTRUCTION CONTRACTS AWARDED
Change
from
Feb.1943 Feb. 1942
$ 7,635,000
—47
1,806,000
—92
30,761,000
+10
6,218,000
+£»
8,509,000
+ “90
4,710,000
—43
$59,639,000
—26
%

Maryland ...............
Dist. of Columbia.. .
Virginia ..................
West Virginia . . . . .
North Carolina
South Carolina . . . .
Fifth District .. . .

% Change
from
2 Mos.
1943 2 Mos. 1942
—38
$ 14,882,000
—83
4,786,000
+ 17
47,900,000
—60
6,794,000
+ 84
17,240,000
—24
10,364,000
$101,966,000
—23

COTTON CONSUMPTION—FIFTH DISTRICT
In Bales
MONTHS
No. Carolina So. Carolina Virginia
March 1 9 4 3 .................
263,749
194,836
22,834
Feb’y. 1943:..................
228,060
173,336
21,770
March 1 9 4 2 .................
246,984
184,172
23,125
3 Months 1 9 4 3 .............
723,965
550,262
65,446
3 Months 1942................
711,514
540,989
65,577

% Change
REGIONSMar. 1943 from Mar. 1942 1943
West V irg in ia.........
14,922
+16
1,956
+29
Virginia....................
Maryland .................
180
+ 3
5th District ....... .
17,058
+17
United States . . . .
56,450
+18'
% in District.. . .
30
..

3 Mos.
40,188
5,250
448
45,886
153,180
30

% Change
from 3 Mos. 42
+10
+13
—10
+10
+ 8

COTTON CONSUMPTION AND ON HAND—BALES
Mar.
1943
Fifth district states:
Cotton consumed ........... .
481,419
Cotton growing states:
Cotton consumed .............
862,703
Cotton on hand March 31 in
Consuming establishments 2,099,388
Storage & compresses... 11,194,852
United States:
Cotton consumed .............
995,512
Cotton on hand March 31 in
Consuming establishments 2,488,771
Storage & compresses... 11,469,546
Spindles active .................... 22,925,194

Mar.
1942

Aug. 1 to Mar. 31
This Year Last Year

454,281

3,570,251

3,384,710

823,470 6,499,810

6,164,594

2,141,038
10,961,626

.........
.........

.........
.........

967,406 7,501,422

7,250,418

2,653,569
11,349,293
23,108,966

.........
.........
.........

.........
.........
.........

RETAIL FURNITURE SALES
Percentage Changes in March and 3 Months 1943
STATES
Compared with Compared with
March 1942
3 Months 1942
Maryland (5)* ..........................
— 33
—32
Dist. of Columbia (6)*.............
— 3
— 16
Virginia (30)* ..........................
— 14
— 11
West Virginia (11)* .................
— 9
— 11
North Carolina (25)* ..............
— 8
— 3
South Carolina (21)* . . . . . . . . .
— 11
— 9
Fifth District (98)* .............
—15
— 16
INDIVIDUAL CITIES
Baltimore, Md., (5)*.................
—33
—32
Washington, D. C., (6)*......... .
— 3
— 16
Danville, Va., (3)*....................
— 12
— 8
Lynchburg, Va., (3)*...............
— 10
—20
Richmond, Va., (8)*.................
—23
— 10
Charleston, W. Va., (3)*...........
— 13
—10
Charlotte, N. C., (4)*...............
—11
— 5
Winston-Salem, N. C., (3 )* ...
— 15
— 12
Columbia, S. C., (5)*....... .
— 17
—14
Greenwood, S. C., (3)*...............
—27
— 2
* Number of reporting firms.

DEPARTMENT STORE TRADE
Richmond Baltimore Washington Other Cities District
Change in March 1943 sales in comparison with sales in March 1942:

+ 11

District
481,419
423,166
454,281
1,339,673
1,318,080

)

COMMERCIAL FAILURES
Number of Failures
Total Liabilities
PERIODS
District U. S.
District
U.S.
4
410
$ 51,000
$ 7,282,000
March 1943....................
Feb’y. 1943....................
4
422
62,000
4,163,000
March 1942....................
39
1,048
307,000
12,011,000
3 Months 1943........... .
19
1,290
211,000
16,960,000
3 Months 1942.................
107
2,926
893,000
31,558,000




SOFT COAL PRODUCTION IN THOUSANDS OF TONS

+4

—1

+9

+4

Change in 3 Months sales, 1943, compared with 3 Months in 1942:
+ 22
+14
+ 5
'+20
+12
Change in stocks on Mar. 31, 1943, compared with stocks on Mar. 31, ’ 42:
+ 1
—10
—17
—14
-1 2
Change in outstanding orders on Mar. 31, ’ 43, comp’r’d with Mar. 31, ’ 42:
+ 41
+10
+27
+67
+24
Change in total receivables on Mar. 31, ’43, compared with Mar. 31, ’ 42:
—34
—35
—44
—37
— 39
Percentage of current receivables as of Mar. 1, ’43 collected in March:
53(36)
55(41)
57(41)
58(38)
56(40)
Percentage of instalment receivables as of Mar. 1, ’ 43, collected in Mar.:
23(18)
33(23)
24(17)
27.(19)
26(19)
Note: 1942 collection percentages in parentheses.
Maryland Dist. of Col. Virginia West. Va. N . Carolina S. Carolina
Percentage change in March 1943 sales over March 1942 sales, by States:
+ 4
— 1
+10
— S
'
+ 7
+23
Change in 3 Months sales, 1943, compared with 3 Months in 1942:
+ 15
+ 5
+20
+ 4
+19
+34

7

MONTHLY REVIEW

TOBACCO MANUFACTURING
% Chg.
% Change
March
From
3 Mos. From
1943 3 Mos.
1943 March 1942
1942
Smoking & chewing to­
bacco (Thousands of lbs.)..
22,339
62,737
— 9
— 7
Cigarettes (Thousands) ......... 20,611,8(35
+ 21 58,659,910
+ 10
Cigars (Thousands) ................
427,836
— 13 1,275,179
— 8
Snuff (Thousands of lbs.).......
+ 16
12,106
+ 10
4,517

RAYON YARN DATA
Rayon
Staple
Eayon
Staple

Yarn Shipments, Lbs... . . . .
Fiber Shipments, Lbs....... . . . .
Yarn Stocks, Lbs............
Fiber Stocks, Lbs........... . . . .

Mar. 1943 Feb. 1943 Mar. 1942
42,700,000 39,000,000 40,000,000
13,900,000 12,600,000 12,600,000
4.100.000
7.100.000
2j800,000 2.500.000 2.300.000

Source : Rayon Organon

BUSINESS INDEXES - FIFTH FEDERAL RESERVE DISTRICT
(1935-1939=100)
_______________ ADJUSTED__________________ ____________________ NOT ADJUSTED

BANK DEBITS .................................
DEPT. STORE SALES......................
ELECTRIC POWER PROD................
EMPLOYMENT, MFG..........................
LIFE INS. SALES...............................
BITUMINOUS COAL PROD.............. . . .
BUILDING CONTRACTS ................. . . . .
BUILDING PERM ITS........................
COTTON CONSUMPTION ............... , ,
EMPLOYMENT—NON-MFG...............
Bituminous Coal .............................
Dyeing & Cleaning..........................
U. S. Exec. Serv., D. C..................
Hotels ................................................
Laundries ..........................................
Public Utilities ...............................
Quar. & Non-Met-Min......................
Retail Trade .....................................
Wholesale Trade ..............................
FURNITURE ORDERS .................... . . . .
FURNITURE SHIPMENTS .............
FURN, UNFILLED ORDERS......... . . . .
WHOLESALE TR. 5 LINES............. . . ,.
Drugs ................................................
Dry Goods ........................................ . . . .
Groceries .......................................... . . . .
Hardware .......................................... . , . ,
Shoes ...............................................




February 1943
% Change from
Last
Last
Mo.
Year

163
149
631
185
202
187
160

Feb.
1942

183
164
199

164
165
175

+ 8
+ 20
+ 3

+ 12
+ 43
+ 11

90
137
196
124
155
140
101
140

81
137
367
49
154
135
101
134

124
134
395
113
163
129
106
130

+
+
+
—
+
+
+

12
12
49
78
6
1
1
0

—
19
+ 15
_ 26
—
76
+ 1
+ 9
4
+ 8

156

102

Dec.
1942

121

154
292
27
164

Jan.
1943
171
197
190

Feb.
1943

m
153

ii4
142

+ ' i
+ 3

+ '‘ *7
+ 13

13i
136
89
306
178
600
171
181
224
172
125
230

120
124
93
252
208
634
157
162
116
160
114
440

143
121
103
136
177
242
151
147
134
147
183
211

"i
l
2
—
47
— 16
+ 5
+ 8
+ 3
10
+ 9
+ 28
13

— *9
+ 14
12
+ 20
—
16
+ 161
+ 23
+ 27
+ 51
+ 27
13
— 5

—

+
+

Feb.
1943
161
162
184
150
94
143
243
26
160
137
103
129
251
123
155
131
116
128
90
146
138
599
164
181
164
165
134
232

Jan.
1943

Dec.
1942

Feb.
1942

175
134
200
149
85
136
172
95
164
137
103
128
248
120
152
132
114
129
91
349
151
620
160
195
172
161
124
174

211
304
200
150
94
137
349
36
169
148
i04
128
248
123
149
132
J16
152
‘.99
159
157
481
147
i71
102
155
104
170

144
114
164
139
116
125
329
110
159
127
108
119
204
154
138
128
127
113
102
122
164
229
134
142
109
129
154
244

February 1943
% Change from
Last
Last
Year
Mo.
_
+
_
+
+
+
+
—
—
+
+
+
+
+
—
—

—
—
+
—
+
+
+

8
21
8
1
11
5
41
73
2
0
0
1
1
3
2
1
2
1
1
58
9
3
3
7
5
2
8
33

12
42
12
8
19
+ 14
— 26
— 76
+ 1
+ 8
5
+ 8
23
+
20
+ 12
+ 2
9
+ 13
12
+ 20
—
16
+ 162
+ 22
+ 27
+ 50
+ 28
13
— 5
+
+
+
+
—

8

MONTHLY REVIEW

SUMMARY OF NATIONAL BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)

Industrial activity increased slightly in March and prices o f commodities
advanced further. Retail trade in March and the first half o f April was in large
volume, although reduced from the February peak.

INDUSTRIAL PRODUCTION
E SEASONALLY AD ST . 1935-39>IO F
JU ED
O

220
200

INDUSTRIAL PRODUCTION
The Board’s seasonally adjusted index o f industrial production advanced
from 202 per cent of the 1935-39 average in February to 203 in March. The rise
in total output continued to reflect chiefly increased production in the machinery
and transportation equipment industries producing armaments. A t merchant
shipyards 146 ships were delivered in March. Completions totaled 1,516,000
deadweight tons, an annual rate of more than 18,000,000 tons.
Steel mills operated at peak levels. Production of lumber, however, in­
creased less than usual in March, continuing the gradual downward trend of
production which began a year ago.
Output o f fuels reached a new peak in March. Bituminous coal production
rose further. Crude petroleum output likewise exceeded the February level as
new pipeline facilities fo r transport o f petroleum products to the East Coast
were completed.
Output of important nondurable manufactures was maintained in March.
In most branches o f the wool textile industry production increased to new high
levels in February and March following a Federal order allowing an increase in
wool consumption for the manufacture o f civilian fabrics.
The value of construction contracts awarded in March, according to figures
o:f the F. W. Dodge Corporation, continued at a level considerably lower than
that for the year 1942, reflecting chiefly the fact that the construction phase o f
the w^r program has been largely completed. Awards for residential building
declined for the third consecutive month, while contracts for public works were
higher than in February.
DISTRIBUTION
Retail sales, which generally increase from February to March, showed
little change this year, following the buying wave that swept the country in
February. A t department stores, where increases in February had been par­
ticularly marked, sales declined in March and the Board’s seasonally adjusted
index dropped from 167 to 135 per cent of the 1923-25 average. Despite this
decline, the index continued above the high level that prevailed in the latter
part o f last year. In the first half of April department store sales increased
by about the usual seasonal amount, making allowance fo r the late date o f Easter
this year.
Total carloadings o f revenue freight in March remained at the February
level and other transportation activity was also maintained in large volume.

140

120
10 J
0
1943

1939

Federal Reserve indexes. Groups are expressed
in terms of points'in the total index. Monthly
figures, latest shown are for March 1943.
CONSTRUCTION CONTRACTS AWARDED

F. W. Dodge data for 37 Eastern states, total
includes state and local government and private
nonresidential building not shown separately.
Monthly figures, latest shown are for March 1943.
MEMBER BANKS IN LEADING CITIES

COMMODITY PRICES
Wholesale commodity prices averaged higher in March and the early part
o f April reflecting advances in prices o f farm products, foods, and a number of
industrial commodities. Prices in retail markets also increased further from
February to March, with relatively sharp advances in food prices.
On April 8 an Executive Order was issued directing that ceiling prices be
placed on all commodities affecting the cost o f living, that further increases in
ceilings be prevented except to the minimum extent required by law, and that
excessivly high prices be reduced. Following this and announcements o f par­
ticular Federal actions to safeguard the stabilization of prices, including an
order reducing railroad freight rates, wholesale prices o f some commodities
declined and on April 16 were lower than at the beginning of the month.
BANK CREDIT
Excess reserves at all member banks, which decreased during the latter half
o f March from 2.2 billion dollars to 1.5 billion, subsequently rose to 2.6 billion
on April 19. In the first week o f April, the increase resulted largely from
substantial Reserve Bank purchases o f Government securities; subsequently
excess reserves were made available by a decline o f a billion dollars in required
reserves, which resulted primarily from large payments to war loan accounts
fo r Government securities sold to bank customers. This caused a shift from
customers’ deposits, subject to required reserves, to Government deposits which
have recently been exempted from such requirements.
Government security holdings at reporting banks in 101 leading cities in­
creased substantially during the first two weeks o f April following declines in
the latter part o f March, which had resulted mainly from bill sales by banks in
New York and Chicago. Holdings o f certificates, notes, and bonds increased over
the 4 -week period ended April 14. Commercial loans at all reporting banks
declined by about 210 million over the 4-week period. A t New York City banks
loans to brokers and dealers increased steadily over the period, especially in the
week of the 14th at the beginning of the W ar Loan Drive. Deposits, other than
those o f the United States Government, increased further in March and the
early part of April, but were drawn down sharply around the middle of April
to make payments for purchases o f new Government securities.



0EMAND DEPOSITS

J

1
r

■

- .....■

u s c V'T SECURITIES
-O

_
\
____

! _»
_ '

1939

1940

1941

1942

i
1943

Demand deposits (adjusted) exclude U. S. Gov­
ernment and interbank deposits and collection
items. Government securities include direct and
guaranteed issues.
Wednesday figures, latest
shown are for April 14, 1943.
MEMBER BANK RESERVES AND RELATED ITEMS

1

..........
^^GOLO STO
CK

i-

1

M BER D N
EM
AK
RESERVE BALANCES

/
/v v

........

1
V */

-

1

---------------- ----------------RESERVE BAN CRL'D V
K ' IT
-

M

'938

1939

'940

1941

1942

1943

Wednesday figures, latest shown are for April
14, 1943.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102