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FEDBRAU VESERVE BANK £

y

RICHMOND

l& fl
April 1954

FEDERAL REVENUE COLLECTIONS
IN THE FIFTH

DISTRICT

Per cent of
U. S. Collections
25

r

1929

1935

1939

1945

1952

Also In This Issue -

-

-

A s the Federal tax structure has been altered

Fifth District Trend C h a rts____________ Page

2

in the years since 1929, the Fifth District’s
share in the collection of Federal revenue has

State and Local Bond
Financing in 1953 ___________________ Page

5

shown pronounced change.

The role of the Dis­

Fifth District N ew s B r ie fs ______________Page

7

trict in U. S. tax collections is discussed in the

Business Conditions and P r o sp ec ts_____ Page

9

article beginning on page 3.

Fifth District Statistical D a ta ___________ Page 11




Federal Reserve Bank of Richmond

F if t h

D ist r ic t

T r e n d s

WHOLESALE TRADE

DEPARTMENT STORE SALES
200

150

175

125
150

100

125
100

75
75

A marked improvement was shown in the seasonally adjusted sales
of industrial supply wholesalers in this District during February
when a gain of 33% was recorded over January. The February
sales level, however, was still 20% under February a year ago. Even
so, the sharp improvement is noteworthy.

February adjusted department store sales improved 7 % over the
January level, but were 3% under February 1953. Stores report­
ing departmentally show major departmental classifications ranging
no more than 2 % above or below last year. Stocks dropped 2%
adjusted from January to February and were 5 % under February
last year.

RETAIL FURNITURE STORES NET SALES

WHOLESALE HARDWARE SALES

Better than seasonal improvement occurred in sales of furniture
stores in this District in February when a 6% rise was shown over
January. February store sales, however, were 11% smaller than a
year ago. Stores’ stocks, although 6% below January on an ad­
justed basis, were up 25% from February 1953.

In line with wholesale trade in general during February, sales of
hardware wholesalers in this District rose 11% over January after
seasonal correction, but the February sales level was 33% smaller
than in February 1953. Last year hardware sales at the retail level
were booming, and wholesalers’ sales had been affected accordingly.

HOUSEHOLD APPLIANCE STORES SALES

NEW PASSENGER CAR REGISTRATIONS
200
175

300

300

ot Seosonc lly Adjustec )
(1935-IS 39*100)

250

250

200

200

150

150

75

100

100

0

0

150
125
100

Sales of household appliance stores in this District improved
moderately between January and February (up 4 % ) , and February
sales were 7 % higher than in February 1953. These stores are
making a better showing than furniture stores which also sell house­
hold appliances.




?

1946

1947

1948

1949

1950

1951

1952

1953

1954

Registrations for all Fifth District states in January were down
21% from December and 17% from January 1953. Three states
and the District of Columbia for February show registrations down
1% from January, but 5 % ahead of a year ago. These states show
registrations in the first two months down 7% from last year.

1 2 1
*

jfb/teup

April 1954

Federal Revenue Collections in the Fifth District
The Base Is Broader and the Take Larger
2. The base has been enlarged and so has the “ take.”
Uncle Sam, through his vast and effective taxgathering apparatus, collects some $5 billion a year
3. Income tax collections in this area are now 60 times
from the five-state area comprising the Fifth Federal
what they were in 1929— for the nation as a whole the
Reserve District may or may not be surprising. In­
increase has been 30 times.
deed, it may be a matter for smugness to note that this
4. Tobacco excises collected here have increased 4aggregate of $5 billion in Federal taxes represented
fold.
7 ^ % of total Federal revenue collected from an area
5. Corporate income taxes— at nearly a billion dollars
which has but 5% of the land area of the U. S., 9%
— were some 14 times greater than in 1929— there was
of the national population total, and about 5% of the to­
a 16-fold increase for the nation.
tal bank deposits of the nation. Such a reaction would,
however, have to be tempered by the fact that the 7 ^ %
6. District payments via manufacturers’ excises trail
“ contribution” represented
the national rate of increase.
the lowest figure for the
7. Individual income taxes
FEDERAL REVENUE COLLECTIONS
long span of years since
account for nearly half of
PERCENTAGE IN FIFTH DISTRICT STATES
1929— a period of marked
total Federal collections in
economic vicissitudes, some
the Fifth District and are
on the up side and some on
twice the amount collected
the down. From 14% of
from a n y o t he r single
the total Federal tax collec­
source.
tions in 1929 the District’s
8. Corporate income and
contribution rose to a high
profits taxes make up oneof 22% in 1933 and fell
third of all Federal tax re­
thereafter to the above-cited
ceipts, though the District
figure in 1952, latest year
falls behind the nation in the
for which figures are avail­
share of collections from
able, though 1953 would
this source.
probably show little change
9. Taxes on alcohol, to­
in this respect.
gether with estate and gift
Such striking variations
taxes, now contribute al­
in the District’s contribution
most 5% of total area Fed­
to the Federal exchequer as
eral collections as against a
indicated in the above pro­
mere 1% in 1929.
portions imply either important economic change, sig­
Perhaps the first tax to catch the eye of the District
nificant alterations in tax policy and practice, or both.
tax observer is the tobacco excise. Formerly it was a
Actually, all of these have taken place— within the past
formidable provider of Federal revenue— yielding better
quarter-century, Federal tax collections have vaulted
than 10% of the total back in 1929. It is still important,
from $3 billion to $65 billion. Within the period the tax
after a 4-fold increase, but it has not kept up with the
base was broadened due to rapid change in numbers
procession either Federally or in the Fifth District. A c ­
(both corporate and individual), an upspiraling of eco­
tually, it should be noted that the familiar blue excise
nomic activity, both within and without the District,
stamps on tobacco tins and cigarette packs are affixed
and the application of lower exemptions. Net result of
and paid for (as a matter of Treasury accounting con­
these changes has been to complicate still more the al­
venience) predominantly by Fifth District manufactur­
ready intricate problem of tax analysis, particularly if
ing units. Throughout the period 1929-1952, roughly
the objective is one of determining the current effect of
three-fourths of all U. S. tobacco taxes were collected in
past tax policy on economic development. It must be
this area, since this is the approximate relation of the
admitted, therefore, that the subject is so complicated,
District’s output to the total industry. Regardless of past
and so many needed facts are missing, that few rational
performance, the fact is that tobacco excises now yield
and well-supported conclusions are possible.
little more than 2% of total U. S. tax receipts. And,
Despite these handicaps, a few striking facts stand
significantly, this tax take of better than a billion dol­
lars per annum is actually paid by smokers all over the
o u t:
1. Federal tax collections in the Fifth District from
U. S. Initial collection, which predominates in this Dis­
trict for the reasons above noted, accounts for about
1929 through 1952 have increased spectacularly.

T

h at




iB Y

Federal Reserve Bank of Richmond

24% of all Federal taxes collected in this District.
District Collections vs. District Burden
Comparisons of U. S. and District revenue collec­
tions do not, be it noted, give any clear clue to the
amount of taxes actually borne by District residents
since most taxes are subject in some measure to
shifting. F or exam ple, corporations w hich pay taxes
in the Fifth District pass much of their tax burden
on in price additions to their products. This is true of
taxes paid by corporations on income as well as levies
paid by them in the form of manufacturers’ excises,
alcohol taxes, and the big contribution in this area, the
tobacco taxes. Since many customers of Fifth District
corporations are outside the area, these outsiders con­
tribute to District tax collections. In the same manner
Fifth District residents contribute to tax payments in
other areas by using products from outside the District.
There is no satisfactory way of comparing total area
income with tax collection figures. Some individuals,
for instance, pay income taxes in the Fifth District on
income received from outside the area while others pay
taxes outside this area on income received here. Cor­
porations likewise do not necessarily pay income taxes
in the area in which the income is actually earned since
they may file returns in the collection district in which
their principal place of business is located or where the
principal office or agency exists.
In spite of the fact that collections do not indicate
correctly the Federal taxes actually paid from income
earned within the District, there is reason to believe
that since 1929, as collections of individual income and
employment taxes (taxes shifted only in minor degree)
have risen, collection figures have become increasingly
representative of taxes paid from District income.
Though District figures are unavailable, a recent study
of Federal taxes in the state of Virginia showed that in
1929 approximately 46% of all Federal taxes collected
in the state did come from income earned in the state.
By 1945, Federal taxes paid from Virginia income had
risen to 87% of collections. In 1947 the proportion
was still over 80% .

F E D E R A L R E V E N U E C O L L E C T IO N S IN F IF T H D IS T R IC T
B Y ST A TE S A N D SO U R CES
Selected Fiscal Years
(Millions of dollars)
1929
Total U. S.
Total 5th District ___

1933

1939

1945

1952

2,939

1,620

5,182

43,800

65,010

412

357

693

3,335

4,899

52
255
4
88
14

32
214
2
104
6

137
311
11
213
22

1,264
875
182
823
191

1,745
1,522
264
1,051
317

38

20

107

1,318

2,323

64
304
3
1

32
294
2
1

75
442
19
37

948
742
28
151

973
1,182
48
174

3

10

4

1
3

17
27
2
101

36
32
3
128

By States

Importance of Individual States in U. S. Collections

Maryland & D. C.
North Carolina
South Carolina _
Virginia _________
West Virginia __

The influences responsible for the Fifth District’s
sharp decline in proportion of total Federal revenue col­
lected are also reflected in the individual states within
the District. From 1929 through 1939 North Carolina
and Virginia led— together they supplied 11.7% out of
a total of 14% contributed by the District to U . S. tax
collections in 1929 and 10.1% out of a District total of
13.4% in 1939 (see accompanying chart). During
W orld W ar II, as individual income and corporate taxes
moved in to become, as they are now, the chief sources
of revenue, the lead in the District changed to Maryland
and the District of Columbia, an area which in 1952
accounted for 2.7% of total U. S. collections, about onethird of the total received in the District.



Over the period from 1929 to 1952 the contribution
of Maryland and the District of Columbia as a per cent
of total U. S. collections has increased from 1.8% to
2.7% . North Carolina’s share over the same period
dropped sharply from 8.7% of the total to 2.3% . W est
Virginia, in fourth place in the District throughout the
entire period, maintained approximately its same share
of collections and South Carolina’s contribution to the
total more than tripled although its share is still the
smallest of the Fifth District states. Virginia’s rela­
tive contribution during the period declined by almost
one-half, from 3.0% to 1.6% of total U. S. collections.
Within the Fifth District, two of the five states have
shown rates of increase in total tax collections from
1929 to 1952 greater than the 21-fold increase for the
country as a whole. In 1952 South Carolina’s total
collections were 70 times greater than in 1929 and
Maryland’s were 33 times greater. W est Virginia’s
increase was almost identical with that for the entire
U. S.— 21 times greater in 1952 than in 1929. V ir­
ginia’s rate of increase was the same as the District’s—
11 times greater than in 1929. North Carolina, how­
ever, showed an increase in total collections of only 5
times during the period.
In the collection of individual income taxes three
states out of five in the District showed rates of in­
crease during the period greater than that for the na­
tion as a whole. W hile U. S. individual income tax
collections were 60 times greater in 1952 than in 1929,
South Carolina’s were 219 times greater, North Caro­
lina’s 65 times greater, and Virginia’s 93 times greater.
Maryland and W est Virginia trailed the national rate
with increases of 48 and 58 times, respectively during
the period.

By Tax Source
Individual income
and employment
Corporate income
and profits ___
Tobacco _________
Estate and gift ..
Alcohol __________
Manufacturers’
excise _________
Retail excise _____
Stamp __________
Miscellaneous1

2

Detailed items do not add to total because of rounding.
1 Includes primarily excise taxes on services such as telephone and
telegraph, safety deposit boxes, transportation, admissions and dues,
and on products such as narcotics, diesel fuel, and processed vegetable oils.

i 4 y

y r fc w M A /

April 1954

j f l o 't e u p

State and Local Bond Financing in 1953
ket. Prices were relatively low, but volume was rela­
tively high.

the proverbial circus, 1953’s municipal bond
market was described as “ bigger and better than
ever.” Certainly it was larger if the volume of new
bond offerings is the measuring stick. The $5,557,887,369 worth of bonds sold by state and local governments
was a record amount, exceeding the previous top per­
formance of $4.4 billion in 1952 by 26% . Even the
rate of growth was greater since the 1952 total exceeded
the previous record by only 19%.

Unlike the rest of the country, the Fifth District had
a smaller volume of state and municipal financing in
1953 than in the preceding year. The decline was
negligible, the total of $420,444,000 being only 0.3%
under the all-time record amount of the previous year.

Whether the 1953 market was better than ever de­
pends on the point of view and the period of the year
considered. In June, dealers well remember the wide­
spread price-cutting then necessary to clear their shelves
and make room for the new issues that continued to
come along. Leftovers from the May issue of South
Carolina state school bonds, for example, were offered
in June for as much as 30-40 basis points under the
original list price. The yield to investors on 20 rep­
resentative issues (Dow-Jones index) climbed to 3.06%
last June— the highest for such tax-exempt securities
since October 1939.

Just as in 1952 when it led the District to a record
volume of tax-exempt bond financing, W est Virginia
was the principal factor in the 1953 decline. Maryland,
Virginia, North Carolina, and South Carolina all had
substantial increases, each exceeding percentagewise
the 26% increase in total tax-exempt financing in the
nation. W est Virginia, however, had such a large de­
cline that it effected the over-all reduction noted. W ith­
out any giant issues such as the $96 million of turnpike
bonds and the $30 million of veterans’ bonus bonds that
raised the 1952 total for W est Virginia to $179 million,
the 1953 volume fell off to only $22 million.

Over the second half of the year, however, there was
a sharp reversal of earlier developments, and municipal
bond prices rose steadily and sharply until they reached
a level in November that represented a gain of $100 per
$1,000 bond. A t the November price level, which held
through December, yield to investors was 2.56% as
compared with 3.06% five months earlier. The rise
reversed almost all the change shown during the first
six months of the year. Furthermore, by year end
prices were showing no signs of weakness despite an
unusually heavy volume of offerings in December. In
fact, there were indications that prices might climb off
the plateau on which they had rested from the first week
in November.

School building recorded a historic “ first” by account­
ing for the largest share of the total bonds issued in the
District last year. Although W est Virginia had a
smaller amount of bond issues for this purpose, the gains
in the other states boosted the District total for schools
to $193 million, 130% greater than the total of such
issues in 1952. This is a significant increase for, in
common with the rest of the country, additions and im­
provements to District schools are second only to high­
ways as the largest public works backlog. President
Eisenhower pointed out in his Economic Report of last
January that approximately 10 million pupils through­
out the country have inadequate school facilities. Con­
struction of elementary and secondary schools sufficient
to meet such needs has been estimated to amount to over
$12 billion. Severe as the need for additional class­
rooms has been in recent years, it is a startling fact that
shortages are going to be equally, or even more, pro­
nounced for the rest of the decade of the ’ 50’s. And
after that, worries over additional facilities will merely
shift from school boards and principals of elementary
and high schools to presidents and trustees of colleges.
W e should expect to find bond financing of school con­
struction running at record levels for many years to
come.

L

ik e

District Financing Down Slightly

The sharp reversal after June 1953 of the declining
curve of municipal bond prices was the first sustained
price improvement in the tax-exempt market since the
last half of 1950. On this score, the municipal market
in the second half of 1953 was definitely a “ better” mar­
ket.
In terms of the unit volume of business done the 1953
market was better because it was bigger. Large and
hard-to-move inventories were characteristic of the
municipal market in the first six months of last year,
as was steady price attrition and a large inflow of new
issues. “ But,” as one dealer expressed it last May,
“ we’re still moving bonds. It takes bargain prices lots
of times, but we’ve managed to be in shape for the new
issues that come along.” Carefully priced, most new
issues sold well. The $25.5 million of Baltimore 2’s
and
for example, moved into investor hands at
a satisfactory rate in May despite a generally slow mar­



Sui Generis
Ever since the initial issue in July 1951 of the unique
housing bonds authorized by the Housing A ct of 1949,
market specialists have contended that these securities
represented a better credit than was indicated by the
prices investors were willing to pay for them. Under­

i

5

y

Federal Reserve Bank of Richmond

valuation by investors was due principally to their un­
familiarity with the principal characteristic of the bonds
— the fact that the security behind them is the same as
that behind the direct obligations of the Treasury. The
obligation of Congress to provide the Public Housing
Administration with funds to meet its commitments on
these particular bonds has resulted in the latter being
called “ tax-exempt Governments.”

A total of $496 million of new housing bonds was sold
by local housing authorities in the United States last
year. Twelve per cent of this amount, $60 million, was
issued in this District. Housings accounted for 14%
of the total state and local bond issues in the Fifth Dis­
trict in 1953 as compared with almost 18% in the previ­
ous year.
The third largest share of the District’s total of bond
offerings in 1953 was for construction of streets, high­
ways, and bridges. It is unusual to find total borrow­
ings for this purpose out of first place, and it is not
likely to be the pattern in the future. Outlays in con­
nection with Maryland’s 12-year road construction and
reconstruction program, for example, will boost sub­
stantially the annual District total for roads and bridges.
This program calls for total outlays of over $568 million
— about $243 million in the 4-year period 1954-57,
$167 million from 1958-61, and $158 million from 196265. It has been reported that an $85 to $90 million
revenue-bond issue may be offered in Virginia during
the last half of this year to finance a bridge-tunnel cross­
ing of Hampton Roads and other bridge construction.

Actually, the prime security feature of housing bonds
and their tax-exempt status puts them in a class by
themselves. But investors did not fully understand the
nature of that class, and the result was that housing
bonds became, as one authority put it, “ the nation’s No.
1 investment bargain.”
The unfamiliarity of investors with these bonds was
lessened to a considerable extent just before the sale of
$122.5 million of them last May. H om e Finance
Administrator Cole, feeling that the high yield (low
price) of the new housing bonds did not reflect the true
value of the securities, asked the Attorney General for
a “ reaffirmation” of the security of the bonds. The gist
of the official opinion given was that the security of the
bonds is unquestionable since the “ faith of the United
States is solemnly pledged. . .” This statement was
widely publicized, and by the end of 1953 it appeared
that these unique tax-exempts were beginning to be
more highly evaluated by investors.

The backlog of highway construction projects, largest
of all public works backlogs, together with the very
costly turnpike projects under consideration all over the
country are likely to raise revenue bonds to a new im­
portance in the municipal bond market.

STATE AND MUNICIPAL BOND OFFERINGS— 1953
Va.

Md

W . Va.

N. C.

Sth Dist.

S. C.

No. of
Issues

Amt.
$000

No. of
Issues

Amt.
$000

No. of
Issues

Amt.
$000

No. of
Issues

Amt.
$000

No. of
Issues

Amt.
$000

10
7*

30,748
29,823

19
—

26,312

6
—

6,560
— —

16
2*

17,835
34,250

4
2*

2,225
45,000

12

School Building and
Improvements ___
Water, Sewer, and
Drainage Systems

-------------

19,945

11

5,441

9

3,038

44

15,622

Street, Highway and Bridge ._
Building and Improvements _

3
1*

6,943
25,000

3
—

3,870

1
2*

50
8,500

7

641

Public Improvement_________ ....

6
1*

6,532
4,700

4

879

2

1,000

3

2,942

_

1

925

3

Public Utility Systems
(Excl. water systems

_

....

H ospitals----------------------

1*

3,140

3
....

....

-------------

-------------

. .

1

600

1

700

—

Public Housing Authority

__

2

1,242

8

30,257

—

Miscellaneous --------------------

. .. .

8

4,251
1,750

..

Total1

27

135,674

5

3,124

_

74,450

5
1*

-------------

1,332
-------------

1,095
2,760
11,000

25

8,764

12,507
43,500

|

13.3

7
—

1,779

20
1*

10,522
4,700

}

3.6

2

1,360

8

6,397

-------------

9
2*

__

Weekly listings in “ The Commercial and Financial Chronicle.”




7,185
14,140

12.6

1.5

}

5-1

17

5

6,070

10
—

22,210

84

95,394

43

2,027

.5
14.3

5

11,130

212

60,119

4,062

1

35

-------------

....

28
1*

12,034
1,750

81,296

* State issues.

Source:

45.8

52,810

1 Totals will not equal the sum of the individual items as some issues are divided among more than one category.
2 Includes Washington, D. C., issue of $11,420,000.

|

16
4*

727

562

83,680
109,073

Per
cent

96

15

-

55
11*

Amt.
$000

1,003
10,000

2
1*

-------------

4

-------------

40

....

1
3,500

....

R efu nding--------------------------

1*

__

20

No. of
Issues

220

420,444

}

3.3
100.0

April 1
954

Fifth District News Briefs
order backlog for carded cotton yarns increased
for the second consecutive month during February
according to the Textile Information Service. The
February backlog rose 11 million pounds over the
previous month, following a January rise of 5 million
pounds over December which had marked the first up­
turn in unfilled orders since August 1953. Since the
beginning of 1954 unfilled orders on spinners’ books
have increased 37% .
Hosiery producers in the High Point, North
Carolina area noted late in February that orders
for women's and children’s anklets were gener­
ally slow and business spotty. A t that time
buyers had been ordering anklets on a hand-tomouth basis, keeping their inventories at a
nominal level. These producers say this is a
seasonal phenomenon and expect a pickup in
business during the second quarter.

T

he

A Federal court in the week of March 20 ordered set
aside a National Labor Relations Board ruling against
Mount Hope Finishing Company and Mount Hope
Finishing Company, Inc. and decreed that the former
NLRB ruling not be enforced. Mount Hope Finishing
Company had moved all its operations from North
Dighton, Massachusetts to Butner, North Carolina and
the Textile Workers Union of America (C IO ) con­
tended that the company moved South to avoid bar­
gaining with it. The court ruled that Mount Hope had
left Massachusetts for economic reasons and not to
avoid bargaining with the union.
Lenoir Chair Company’s building program
will add 80,000 square feet to the firms uphol­
stery section of the living room division. The
president of the company said the program
would increase the company’s capacity for up­
holstery goods by 50%.
In a letter to stockholders of Erwin Mills in the week
of March 20, the president of the company stated that
nearby prospects are not at all encouraging, and that
it looks as though the company will operate at a loss
for the six months ending March 31, 1954.
The American Enka Corporation announced
in the week of March 13 plans to expand its
semicommercial nylon plant at Enka, North
Carolina by spending $1,600,000 for additional
equipment. W hen this machinery is installed,
the plant will produce nylon textile filament
yarn, tire yarn, and staple fiber. Initial produc­
tion of staple fiber will begin at Enka’s newly
constructed $2 million nylon plant around the
first of April. A $1 million addition to this plant
is under construction. The new allocation of
$1,600,000 for additional equipment will bring
the investment to $4,600,000.



Rosemary Manufacturing Company, a division of the
Simmons Company at Roanoke Rapids, North Caro­
lina, is replacing 1,142 Jacquard looms with 700 new
high-speed Draper and Crompton and Knowles double­
lift, double-cylinder Jacquard looms in a $3.5 million
expansion program. Some of the old looms had been
in use since 1897.
Ground was broken in the week of March 13
for Salem, South Carolina’s first textile opera­
tion which is expected to be in production by
late Fall. The plant is expected to employ be­
tween 200 and 300 workers in the manufacture
of dresses.
Industrial Rayon Corporation’s new nylon plant un­
der construction at Covington, Virginia is expected to
start operations during the fourth quarter of this year.
The plant initially involves an expenditure of approxi­
mately $5 million and will produce six million pounds
of fiber annually. It is designed in such a way that it
can be expanded substantially.
The J. Freezer, Inc. factory at Floyd, Vir­
ginia reopened early in March with about 60
employees. The factory had been closed down
for the past three months. Prior to closing, 235
workers were employed. The plant is now
manufacturing sport shirts.
A second major wool combing mill was announced
by the Governor of South Carolina in the week of Feb­
ruary 22 at an undisclosed location. The new mill, a
multi-million dollar factory to be built by a French con­
cern, Amedee Prouvost & Sons, will be capable of turn­
ing out 20 million pounds of processed wool annually.
Blue Bell, Inc., a manufacturer of dungarees
in five Virginia plants located in Woodstock,
Mt. Jackson, Luray, Shenandoah, and Madison,
announced in the week of February 27 that it
would add more than 300 employees to these
five plants.
After a long decline, Federal employment in the
Washington, D. C. area is beginning to stabilize accord­
ing to the U. S. Employment Service. During January
only 800 permanent workers were dropped from Fed­
eral payrolls.
Rayon and synthetic dyeing, printing, and
finishing plants in the southern area have ex­
perienced a downturn in volume since the mid­
dle of February. Early in March some plants
were operating at 30% to 40% of capacity.
January had given indications of a strong sea­
son, but orders began falling off toward the
middle of February. This situation continued
into early March with resultant reduced shifts
and in some cases layoffs.

Federal Reserve Bank of Richmond

The Seaboard A ir Line Railroad’s $8.5 million mod­
ern classification yard and diesel shop now under con­
struction at Hamlet, North Carolina is expected to be
in operation by January 1, 1955. The 600-acre facility
will have 66 miles of track when the yard is completed.
The Norfolk and Western Railroad Company
furloughed 2,250 employees for one week begin­
ning March 22. The layoffs affected 1,950
maintenance workers at the Roanoke shops, 300
at the Portsmouth, Ohio shops, and a substan­
tial number of maintenance-away men over the
system. Fifty were affected at Norfolk, Vir­
ginia.
The Bethlehem-Sparrows Point Shipyard at Spar­
rows Point, Maryland faces a complete shutdown in
the final quarter this year unless new business develops
in the meantime.
The Maryland Dry Dock Company an­
nounced that more than three-fourths of its
working force had been laid off since Novem­
ber 1952 because of a steady decline in ship
repair work. The yard employed 4,400 in 1952,
dropped to 2,500 in December last, and now has
fewer than 1,100 employees on the payroll. The
president of the company says there are no en­
couraging factors in the picture at the present
time.
The Texas Company has purchased 74 acres of land
on the James River south of the Dupont plant at Rich­
mond and will build a 6-million-gallon bulk oil storage
plant and terminal.
The Chamber of Commerce of Cumberland,
Maryland reports that the Pittsburgh Plate
Glass Company is in process of exercising op­
tions on nearby land on which to erect a glass
plant. Several months ago the company said
Cumberland was one of the four areas being
considered for the location of a new plate glass
plant.
Something new and of far-reaching importance (con ­
sidering high corporate income taxes) was the an­




nouncement of the W arner and Swasay Company of
Cleveland, Ohio that they would lease their regular line
of textile machinery to mills. If other textile ma­
chinery manufacturers were to adopt such a program,
revolutionary developments might well take place in
the textile field.
Increasing unemployment in the seamless
hosiery field in the Hickory North Carolina area
was announced in mid-March, though the situa­
tion was not regarded as serious. Larger mills
continue to hold to the forty-hour week and
some argyle-producing plants have overtime
schedules. Smaller mills are being hit by slow
business and are producing at about 60% of
capacity as compared with the over-all produc­
tion of the area around 75% to 80% of capacity.
Full production of Super Cordura, a new type rayon
yarn used in the manufacture of automobile and truck
tires, is expected by the end of March at the Richmond
plant of the Dupont Company. The converted unit
will have a production capacity of 50 million pounds
annually and is the only plant in the country making
the new type yarn. Employment at the plant has been
declining since mid-February when the company dis­
continued making textile yarns to concentrate on yarns
for the automotive and industrial fields. Total em­
ployment at the Richmond plant will be about 4,000.
As a consequence of the shipping tie-up in the
port of New York, a major American steamship
company served notice on the warring labor
organizations that it is studying the possibility
of using Baltimore, Maryland as a home port.
The shipping company said it did not want to
give up New York as its home port, but that it
might be forced to if costly strikes continue.
The Navy is building a new $4.5 million power plant
at its Indian Head, Maryland powder factory.
Dixiana Mills, Inc. of Dillon, South Carolina
will build a branch carpet manufacturing plant
containing about 75,000 square feet of floor
space and employing 150 workers.

« 8 j*
{

April 1954

Business Conditions and Prospects
The man-hour figures referred to are without sea­
sonal correction, but it appears that in most instances
the seasonal rises between January and February were
somewhat less than normal.

levels in the Fifth District were mostly on the
plus side in February as compared with January
after allowing for normal seasonal variation. Produc­
tion levels for the most part remained substantially be­
low a year ago, but seasonal influences caused a pickup
from January to February in most lines, with most of
the increase accounted for by a rise in hours worked
per week.

T

ra d e

Trade
Trade levels in the District in February were general­
ly better than in January, but in most instances were
below a year ago. New passenger automobile regis­
trations for two states were exceptions.

The construction industry made better reading in the
United States as a whole than in the Fifth District, but
Fifth District contract awards must still be considered
at a high level. Insured unemployment in the first
week of March was about 6 % higher than a month
earlier and the highest thus far this year for all states
except Virginia.

Department store sales in February, seasonally cor­
rected, rose 7% from January but continued 3 % under
February 1953. Preliminary departmental reports for
February indicate small gains over last year in women’s
accessories, women’s and misses’ dresses, furniture and
bedding, domestic floor coverings, and radios, televi­
sions, phonographs, etc. Rather sharp losses were ex­
perienced in women’s and misses’ coats and suits, prob­
ably owing to the mildness of the month, and lesser de­
clines were noted in silverware, jewelry, and major
household appliances.

Business loans of weekly reporting banks moved up
during the first half of March and were higher than a
year ago. Total loans of all member banks inched up
a little further in February, while total deposits eased
fractionally during the month to stand at the same level
as a year ago.

New passenger automobile registrations in February
for four states of the District and the District of Colum­
bia were 6% over those of January and 2% ahead of
February 1953. Virginia and North Carolina show
gains over last year of 20% and 11% , respectively,
while Maryland, the District of Columbia, and W est
Virginia show declines of 4 % , 19% , and 26% , respec­
tively. Twenty-seven states show a decline of 2% in new
passenger car registrations in February over a year ago.
Complete January new passenger registrations for the
District were down 21% from December and down
17% from a year ago.

Productive Activity
Since the major portion of unemployment has re­
sulted from a reduction in industrial activity in the Dis­
trict, late developments in some important industries
should be interesting. Some indications are to be found
in the man-hour figures available for the Carolinas for
February. In these states man-hours in lumber and
wood products industries in February were 3.4% higher
than in January, but 11.5% lower than in February
1953. In the furniture and fixture industries manhours in February were 3.2% higher than in January,
but 4.5% lower than in February 1953. Yarn and
thread mills show February man-hours 0.8% under
January and 19% under a year ago. Broad woven
fabric mills show February man-hours 0.5% higher than
in January, but 9.7% under February 1953. Manhours in the apparel industries were up 2.9% in Feb­
ruary over January, but down 3.8% from a year ago.
Seasonally adjusted cotton consumption in the mills
of the District in February was 1% lower than in Jan­
uary and 9% under a year ago. Cotton spindle hours
in February were at the same seasonally adjusted level
as January and down 6% from last year. January
electric power production was off 2% after seasonal
correction from December, but 5% ahead of January
1953. January employment in manufacturing indus­
tries was 2% below December and 3% below January
1953. February bituminous coal output dropped 9%
after seasonal correction from January to a level 9%
under February 1953.



Sales of household appliance stores in February were
variable over the District with the aggregate dollar re­
port showing a gain of 7% from January. Stores in
North Carolina showed an increase of 18% ; in M ary­
land, a gain of 13% . In the District of Columbia, V ir­
ginia, and W est Virginia declines ranged from 1% to
21% . A smaller number of stores show February sales
about 1% under those a year ago.
Most lines of wholesale trade in the District picked
up in February, with adjusted sales gains ranging from
3% to 33% above January. In all wholesale lines, ex­
cept paper, February sales were below a year ago from
4 % to 33% .
Further progress was made by department stores in
reducing inventories during February. After seasonal
correction, February stocks were down 2% from Jan­
uary and 5% from February last year. Considerable
interest attaches to the stores’ outstanding order figures
for February— up 15% after seasonal correction from
January. W hile these orders are still 10% below a

- 9 1
I
-

Federal Reserve Bank of Richmond

year ago, they indicate that store inventories in some
categories need replenishing.
Construction
Construction contract awards in February were 4%
higher than January, after seasonal correction, but 6%
below February 1953. Oddly enough, two types ex­
pected to be strongest in the construction picture— com ­
mercial and nonresidential other than factories— showed
declines after seasonal correction of 27% and 28% , re­
spectively, from January, and were in turn 7% and
32% , respectively, below a year ago. Contract awards
for factory buildings in February were 45% higher than
in January, on an adjusted basis, and 54% ahead of a
year ago. Residential building awards show a 25%
gain on an adjusted basis from January to February
and 17% ahead of a year ago, mainly the result of gains
in apartments and hotels. W hile awards for public
works and utilities were up 4 % more than seasonal in
February over January, they were 18% under a year
ago.
Total construction contract awards this February
versus last varied widely among the states. Maryland
showed a drop of 4 % , the District of Columbia a drop
of 6 0% , Virginia a drop of 17% , W est Virginia a gain
of 29% , North Carolina a drop of 3 % , and South Caro­
lina a gain of 4 1% .
In the first two months of the year, residential con­
struction contract awards in the District were up 15%,
nonresidential awards were down 16% , and public
works and utilities were down 2 2 % — more than a little
different from the industry forecast.
Agriculture
Fifth District farmers are planning some sizable shifts




« 10
f

for 1954 in their plantings of various crops. T o a large
extent, however, acreage shifts in prospect offset one
another since the total area in the crops specified shows
a decline of only 1% from 1953. Most of the cut in
acreage is in a sense involuntary— dictated by the
smaller 1954 allotments for cotton and wheat which
were voted by farmers.
Farm income in the District was down 9 % in Decem­
ber from a year earlier, and for the calendar year 6%
as compared with a national figure of 4.3% . Cash farm
income in December was down 8% in Maryland from
a year ago, 6% in Virginia, 6% in W est Virginia, 11%
in North Carolina, and 13% in South Carolina.
In the first two months of 1954 farm prices in M ary­
land averaged 10% under a year ago, those in Virginia
were down 8 % , in W est Virginia down 9 % , in North
Carolina down 3 % , and in South Carolina down 2 % .
Banking
Bank debits, seasonally adjusted in February, were
1% higher than in January and also 1% higher than
in February 1953. Total loans and discounts of all
member banks in the Fifth District rose 0.3% between
January 27 and February 24 and on the latter date
were 5% ahead of the same date last year. Total de­
posits of these banks on February 24 were 0.6% under
a month ago and 0.1% ahead of a year ago. Time de­
posits eased off 0.3% from January to February but
were up 6.7% over February 1953. Demand deposits,
excluding interbank, were down 0.1% during February
and down 1.6% from a year ago. Deposits of banks
were down 6.3% during February and 4.5% from a
year ago. Total borrowings of member banks dropped
36% during February and were 57% smaller than a
year ago.

April 1954

F if t h

S t a t is t ic a l

d is t r ic t

D ata

B U IL D IN G P E R M IT F IG U R E S

SE L E C T E D IN D E X E S
Avg. Daily 1935-39=100— Seasonally Adjusted
% C h gLatest Mo.
Yr.
Jan.
Feb.
Prev.
Feb.
1954
Mo.
Ago
1954
1953
— 17
153
155
— 21
New Passenger C a rs*------476
477
Bank D ebits------------------------------ 481
+
1
+
1
— 6
— 9
108
112
Bituminous Coal Production__ 102
— 6
468
520
Construction Contracts ---------- 489
+
4
+ 176
+ 118
124
57
45
Business Failures— No.
— 13
— 8
255
219
Cigarette Production
_
— 6
0
152
162
152
Cotton Spindle Hours ..............
— 3
120r
109
117
Department Store Sales**
+
7
404
— 2
414
Electric Power Production ----+
5
— 2
— 3
154
157
Manufacturing Employment* _
— 10
96
113
Retail Furniture: Net Sales** 102
+
6
— 3
368
327
Life Insurance S a le s _________ 358
+
9

_
_

* Not seasonally adjusted.
** 1947-1949=100.
Back figures available on request.

February
1954

February
1953

2 Months
1954

2 Months
1953

Maryland
B altim ore____ $ 2,742,135
Cumberland __
17,700
Frederick _ __
145,100
Hagerstown __
61,850
Salisbury _.
84,830

$ 6,073,800
64,650
647,257
812,620
50,032

$11,329,340
31,350
157,150
208,535
252,350

$11,323,625
81,600
739,707
861,735
130,212

Virginia
Danville
135,086
Hopewell
_
_
122,237
Lynchburg
542,635
Newport News
109,993
Norfolk
552,751
Petersburg
116,500
Portsmouth __ 2,484,700
Richmond
1,964,327
Roanoke _____
756,354
Staunton _ _ _
95,890

279,531
256,583
153,420
116,880
618,877
103,700
223,845
1,308,832
816,213
117,400

224,256
210,757
704,641
168,806
1,951,447
277,800
2,810,890
3,363,223
1,609,124
199,965

1,004,457
455,183
493,061
232,895
1,567,217
164,200
500,230
2,253,317
1,425,011
172,900

West Virginia
Charleston
Clarksburg ___
Huntington __
W H O LE SA LE TRADE
Sales in
Feb. 1954
compared with
Feb.
Jan.
L IN ES
1953
1954
+ 2
— 3
Auto supplies (8 ) ______ _—
+14
Electrical goods ( 6 ) ---------- — 8
Hardware (11) ----- — ---------- — 14
— 4
Industrial supplies (11) ----- + 3 0
+22
Drugs and sundries (10) — — 10
— 7
Dry goods (14) ___________
— 13
+20
Groceries (48) _____________
— 5
— 13
Paper and its products ( 6 ) + 1
— 9
Tobacco products ( 1 1 ) ____ — 7
+ 2
Miscellaneous ( 1 0 2 ) ________ — 1
+14
District total (227) ------------ — 4
+ 3

Stocks on
Feb. 28, 1954
compared with
Feb. 28, Jan. 31,
1953
1954
+ 4
— 1
+ 4
— 6
-j- 1
+ 5
+ 1
— 1
— 1
+ 1
— 5
0
+ 6
+ 7
------------+ 1
+ 2
0
— 1
+ 1
+ 1

Number of reporting firms in parentheses.
Source: Bureau of the Census, Department of

697,170
128,181
328,409

881,628
864,950
396,800

951,879
187,871
487,654

1,215,930
959,450
617,465

North Carolina
Asheville .. .
Charlotte
Durham
Greensboro ___
High P o i n t __
Raleigh
Rocky Mount _
Salisbury _____
Wilson _______
W inston-Salem

288,984
1,192,349
341,482
683,633
275,790
1,139,060
184,027
355,337
195,150
2,420,583

115,591
1,470,856
393,241
1,025,947
470,450
570,125
1,472,230
257,026
288,050
591,763

491,387
2,835,787
795,616
1,313,550
441,030
2,869,602
495,182
428,502
403,600
2,627,223

244,484
6,031,632
1,672,617
2,238,861
1,062,305
2,007,185
1,656,109
321,001
422,690
1,092,384

South Carolina
Charleston
Columbia ..........
Greenville
Spartanburg _

195,112
946,802
554,500
815,476

531,423
366,090
389,000
44,781

317,556
1,468,321
1,534,255
863,551

731,648
896,935
1,008,500
143,096

D E P A R T M E N T ST O R E O P E R A T IO N S
(Figures show percentage changes)
Other
Rich. Balt.
Wash. Cities
+

1.4

+

2.2

Dist.
Totals

— 7.2

— 2.1

— 2.7

— 3.1

— 9.6

— 5.5

0.4

— 8.3

— 2.3

+

0.1

— 3.2

— 15.7

— 8.5

-

6.4

— 13.6

— 9.3

Open account receivables Feb. 1
31.2
collected in Feb. 1954 -----

44.2

38.6

41.7

39.3

Stocks, Feb. 28, ’54 vs ’53 _
Outstanding Orders
Feb. 28, ’54 vs ’53 ______

+

Instalment receivables Feb. 1
collected in Feb. 1954 ----Sales, Feb. ’54 vs Feb.
’5 3 .............................

10.3

13.8

Md.

D.C.

Va.

+ 0 .6 ;

+ 2.2

-4 .6




11.5

14.4

12.5

W .V a.

N.C.

S.C.

—7.2

—7.3

— 3.3

i

6,191,247

5,787,971

9,116,314

District T o ta ls__$23,518,429

Sales, Feb. ’54 vs Feb. ’53 _ — 3.3
Sales, 2 Mos. ending Feb. 28, ’ 54
vs 2 Mos. ending Feb. 28,
— 4.7
’53 ............................. - -

Dist. of Columbia
Washington __ 2,844,296

Commerce.

$27,964,838

$47,800,171

$52,843,956

F U R N IT U R E S A L E S *
(Based on Dollar Value)
Percentage change with correspondperiod a year ago
STATES
February 1954 2 Mos. 1954
Maryland _________________
.
— 3
+ 3
— 6
— 15
District of Columbia ......................
— 9
Virginia _______ __________
— 13
— 17
West Virginia ................. ...................
— 18
— 13
North Carolina _____________ _ .
— 15
South Carolina ... _______ _______
+ 7
+ 6
— 7
— 12
District
................
IN D IV ID U AL CITIES
Baltimore, Md. ___ _
...
— 3
+ 3
Washington, D. C_________________
— 6
— 15
Richmond, Va. ________ __________
— 12
— 15
Charleston, W . Va. ... ______ ___ __
— 11
— 9
* Data from furniture departments of department stores as
as furniture stores.

11 1
*

Federal Reserve Bank of Richmond

F ifth

D ist r ic t B a n k in g

D E B IT S TO D E M A N D D E P O SIT A C C O U N T S*
(000
omitted)
FebruaryFebruary
2 Months
2 Months
1954
1953
1954
1953
Dist. of Columbia
Washington ______ $ 998,797$ 955,212 $ 2,095,782 $ 1,971,266
Maryland
1,282,0082,663,291
2,650,480
Baltimore _________ 1,282,374
Cumberland_______
20,314
24,398
42,244
52,008
Frederick _ _ _ _ _
20,516
22,008
41,007
44,797
Hagerstown _______
33,335
33,041
70,364
70,349
North Carolina
A sheville__________
55,471
53,883
118,316
120,547
Charlotte__________
332,198
334,805
672,401
711,592
76,809
81,826
162,095
169,696
D urham _____ _ ___
Greensboro ________
110,522
106,200
225,775
227,170
High P o i n t ______
39,175**
NA
81,338
NA
19,582
18,852
41,891
42,069
K in sto n ___________
Raleigh ___________
160,235
152,968
347,629
379,057
Wilmington _______
40,718
39,252
86,711
88,162
Wilson ____________
17,082
14,766
37,203
35,008
W inston-Salem ___
130,439
133,455
282,020
281,397
South Carolina
Ch arleston________
65,657
79,433
138,216
168,300
Columbia _________
149,455
154,478
315,617
313,303
Greenville _________
100,791
106,615
208,149
223,536
Spartanburg _____
60,511
58,559
127,976
130,740
Virginia
Charlottesville ____
27,895
20,973
57,772
45,553
Danville __________
30,504
34,049
71,481
77,453
Lynchburg ____
44,359
44,090
92,914
94,356
44,120
43,214
87,934
95,483
Newport N e w s ___
N o r fo lk ___________
239,367
234,455
487,884
488,610
Portsm outh______
28,016
27,058
59,104
56,972
R ichm ond_________
531,499
546,151
1,098,807
1,158,360
R o a n o k e__________
103,739
109,056
216,109
232,630
West Virginia
Bluefield __________
35,734
39,005
80,125
88,056
C harleston________
157,160
143,854
356,909
327,069
28,420
32,364
67,382
73,252
Clarksburg ________
62,505
65,118
138,906
146,345
Huntington ______
Parkersburg ______
27,547
25,185
58,422
56,306
District Totals _____ $5,035,671$5,016,331 $10,550,436 $10,619,922
*
Interbank and U. S. Government accounts excluded.
**
Not included in District totals.
N A Not Available.




S ta tistic s

50 R E P O R T IN G M E M B E R B AN K S
(000 omitted)
Change in Amount from
Mar. 17,
Feb. 17,Mar. 18,
Items
1954
1954
1953
Total Loans ____________________ $1,413,371** + 38,205
+ 32,810
Bus. & A g r ic .____ .____________
652,796
+ 26,207
+ 10,149
Real Estate L o a n s __________
263,870
— 1,874
+
2,913
All Other L o a n s ___________ __
514,133
+ 14,065
+ 19,991
Total Security Holdings ________ 1,799,144
U. S. Treasury B ills _________
156,046
U. S. Treasury Certificates _
214,469
U . S. Treasury N o t e s ______
222,341
U . S. Treasury B o n d s______
978,358
Other Bonds, Stocks & Secur. 227,930
Cash Items in Process of Col. _
294,371
Due From Banks _______________
184,898*
Currency and Coin ____________
76,916
Reserve with F. R. B a n k s_____
548,683
Other A sse ts ____________________
61,784
Total A s s e ts __________________ 4,379,167

—
—
—
—
+
—
+
+
-j-j—
+

23,292
31,278
12,669
16,513
42,869
5,701
7,511
15,008
2,000
20,929
496
59,865

+
—
+
—
+
+
+
—
—
—
+
+

21,161
44,075
84,672
61,657
36,325
5,896
668
985
1,023
14,643
4,645
42,633

Total Demand Deposits_________ 3,333,140
Deposits of Individuals ______ 2,462,095
Deposits of U. S. Government
118,390
Deposits of State & Local Gov.
210,401
Deposits of Banks ___________
476,934*
65,320
Certified & Officers’ Checks__
Total Time D ep osits___________
698,435
624,157
Deposits of Individuals______
Other Time Deposits _________
74,278
Liabilities for Borrowed Money
16,350
44,039
All Other Liabilities___________
Capital A c c o u n ts_______________ 287,203

+
+
—
+
+
-f+
+
+
—
—
-f-

67,823
48,085
9,146
8,078
20,093
713
9,397
5,574
3,823
15,850
2,426
921

+
—
+
—
+
—
+
+
—
—
+
+

557
13,343
25,477
10,110
7,056
8,523
32,029
36,435
4,406
15,050
6,154
18,943

Total Liabilities_____________ $4,379,167

+

59,865

+

42,633

*

Net figures, reciprocal balances being eliminated.

** Less losses for bad debts.

- 12 y
I

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