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MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

WILLIAM W. HOXTON. CHAIRMAN AND FEDERAL RESERVE AGENT
RICHMOND, VIRGINIA
DISTRICT SUMMARY.— Business followed
seasonal trends rather closely in the Fifth Fed­
eral reserve district during July and early Aug­
ust, but the volume of trade was perhaps not up
to the level of Ju ly and August last year. On
the whole, however, the outlook for fall trade
improved distinctly between the middle of July
and the middle of August, chiefly due to an im­
provement in agricultural prospects. The De­
partment of Agriculture’s first cotton condition
report of this season estimated the probable
yield in 1927 at approximately four and a half
million bales below the crop of 1926, although
in the Fifth district August 1st prospects were
better than they were a year earlier. The open­
ing of the South Carolina tobacco markets, with
prices averaging 20 cents and upward, together
with an expected increase in tobacco production
in the district, brought assurance of a profitable
season for the district’s tobacco growers. All
crops made good progress since Ju ly 15th, and
while some crops are not expected to yield as
high as in 1926, the total value of this year’s
farm products will probably exceed the value
of the 1926 crops by a considerable amount.
Other favorable influences at work in the district
are the activity of the textile mills, the large
volume of business the West Virginia coal mines
are doing, and an abundance of credit to care
for all legitimate demands of agriculture and
commerce. Bank deposits at record levels tes­
tify to the favorable economic position of the
banks’ customers generally, and debits figures
above those of the same period a year ago prove
that a very large volume of business is being
done.

The most unfavorable factor in the present situ­
ation is the decrease in construction work, with
consequent increase in unemployment in the
building trades and a falling off of retail trade.
Business failures in Ju ly were above those of
July 1926 in both number and liabilities. Retail
trade as reflected in department store sales de­
clined 7.7 per cent in July in comparison with
Ju ly a year ago, although wholesale trade was
about up to seasonal levels. Collections were
slower in Ju ly than in Ju ly 1926 in both whole­

sale
http://fraser.stlouisfed.org/and retail fields.
Federal Reserve Bank of St. Louis

AUGUST 31, 1927
RESERVE BANK OPERATIONS.— In nearly
all years there is an increased demand for re­
serve bank credit in the Fifth district between
the middle of Ju ly and the middle of August
incident to the opening of South Carolina and
some North Carolina tobacco markets and to
the marketing of other early agricultural prod­
ucts. This year, however, in spite of large sales
at good prices on the tobacco markets which
have opened, the demand for credit at the re­
serve bank actually declined during the month
under review. The volume of rediscounts for
member banks held by the Federal 4 Reserve
Bank of Richmond decreased from $23,411,000
on Ju ly 15th to $20,923,000 on August 15th, and
the actual circulation of Federal reserve notes
dropped between the same dates from $60,176,000 to $59,379,000. Total bill holdings of the
Federal Reserve Bank of Richmond declined
from $33,339,000 at the middle of Ju ly to $29,548.000 at the middle of August. Contrary to
the seasonal trend, member bank reserve de­
posits rose from $69,266,000 on July 15th to
$70,119,000 on August 15th. The several changes
enumerated slightly reduced the cash reserves
of the Richmond reserve bank, which dropped
from $89,157,000 at the middle of Ju ly to $88,713.000 at the middle of August, and the ratio of
cash reserves to note and deposit liabilities com­
bined declined from 67.75 Per cent to 67.02 per
cent during the same period. Effective August
16th, the Bank reduced the rediscount rate on
all classes of paper from 4 per cent to 3y 2 per
cent.

On August 15, 1926, rediscounts held by the
Federal Reserve Bank of Richmond for mem­
ber banks totaled $43,510,000, more than double
the $20,923,000 held by the bank on August 15th
this year. Notes in actual circulation a year ago
totaled $72,896,000, compared with *$59,379,000
outstanding on the corresponding date this year.
On the other hand, the number of checks used
this year is considerably greater. Total bill
holdings last year aggregated $55,415,000, com­
pared with $29,548,000 this year. Member bank
reserve deposits totaled $65,733,000 on August
15, 1926, and $70,119,000 on August 15, 1927. The
cash reserves of the Federal Reserve Bank of
Richmond amounted to $84,902,000 a year ago
and $88,713,000 this year, while the ratios of cash
reserves to note and deposit liabilities combined
were 59-81 at the middle of August last year and
67.02 on August 15th this year.

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

August 10, 1927

1. Total Loans and Discounts (including
all rediscounts) ....................................
2. Total Investments in Bonds and Se­
curities ...................................................
3. Reserve Balance with Federal Reserve
Bank .......................................................
4. Cash in Vaults .........................................
5. Demand Deposits ......................................
6. Time Deposits ...........................................
7. Borrowed from Federal Reserve Bank....

July 13, 1927

August 11, 1926

$ 531,568,000

$ 523,984,000

$ 519,974,000

158,164,000

152,720,000

140,225,000

44.648.000
13.328.000
402.460.000
235.443.000
2,991,000

42.476.000
13.962.000
394.027.000
229.229.000
9,809,000

42.313.000
15.286.000
387.565.000
209.308.000
15.309.000

The accompanying table shows the principal items of condition of sixty-seven regularly report­
ing member banks as of three dates, August io, 1927, July 13, 1927, and August 11, 1926, thus afford­
ing an opportunity for comparing the latest available figures with those of the preceding month
this year and the corresponding month last year. It should be understood that the figures shown
reflect conditions as of the report dates only, and are not necessarily the highest or lowest figures
that occurred during the interval between the dates.
Comparing the figures in the table reported for August 10th with those for Ju ly 13th, both this
year, a seasonal expansion in credit extended to customers is noted, due probably to the opening of
early markets for agricultural products, although this is not reflected in borrowing from the Reserve
bank as stated elsewhere. Total loans and discounts for customers increased $7,584,000 during the
month, and at the same time the reporting banks increased their investments in bonds and securi­
ties by $5,444,000. Reserve balances at the Reserve bank rose $2,172,000 between Ju ly 13th and
August 10th, but cash in vaults declined $634,000. Demand deposits increased $8,433,000 and time
deposits rose $6,214,000, a total deposit gain of $14,647,000 during the past month. The increase in
deposits enabled the reporting banks to grant the additional credit to customers previously men­
tioned, and also made possible a reduction of $6,818,000 in the bank’s volume of rediscounts at the
Federal Reserve Bank of Richmond, contrary to the usual trend at this season.
Between August 11, 1926, and August 10, 1927, all items except two in the statement increased.
Total loans and discounts for customers rose $11,594,000 during the year, and investments in bonds
and securities increased by $17,939,000. Aggregate reserve balance at the Reserve bank rose $2,335,000 during the year under review, but cash in vaults declined $1,958,000. Total deposits in­
creased $41,030,000 between August n th last year and .August 10th this year, demand deposits
gaining $14,895,000 and time deposits $26,135,000. The gain in deposits during the year not only
proved sufficient to meet the demand from customers for increased credit, but enabled the banks to
reduce their rediscounts at the Federal Reserve Bank of Richmond by $12,318,000, a reduction of 80
per cent.
DEBITS TO INDIVIDUAL ACCOUNTS
TOTAL DEBITS DURING THE FOUR WEEKS ENDED
CITIES

August 10, 1927

Asheville, N. C..............................................
Baltimore, Md..................................................
Charleston, S. C..............................................
Charleston, W. Va..........................................
Charlotte, N. C................................................
Columbia, S. C................................................
Cumberland, Md........................... ...................
Danville, Va.......... ..........................................
Durham, N. C..................................................
Greensboro, N. C............................................
Greenville, S. C..............................................
Hagerstown, Md..............................................
Huntington, W. Va..........................................
Lynchburg, Va.................................................
Newport News, Va..........................................
Norfolk, Va......................................................
Raleigh, N. C....................................................
Richmond, Va..................................................
Roanoke, Va................. ....................................
Spartanburg, S. C..........................................
Washington, D. C..........................................
Wilmington, N. C............................................
Winston-Salem, N. C.... ..................................

$

District Totals ...............................................

$ 1,196,646,000




26,683,000
394,135,000
21,729,000
36,807,000
45,966,000
19,512,000
9,170,000
7,464,000
27,867,000
20,330,000
17,326,000
9,524,000
23,630,000
17,162,000
8,246,000
67,621,000
22,480,000
114,837,000
25,875,000
11,232,000
214,988,000
14,813,000
39,249,000

2

July 13, 1927
$

30,815,000
401,153,000
25,637,000
35,982,000
48,450,000
20,990,000
9,796,000
9,080,000
26,634,000
23,579,000
21,947,000
10,548,000
24,446,000
18,635,000
8,634,000
68,192,000
27,603,000
123,160,000
28,415,000
11,972,000
239,185,000
16,587,000
38,044,000

$ 1,269,484,000

August 11, 1926
$

34,603,000
386,570,000
21,405,000
31,385,000
42,750,000
16,523,000
8,073,000
8,247,000
23,434,000
21,331,000
18,564,000
9,828,000
22,344,000
16,607,000
18,960,000
71,663,000
23,332,000
115,847,000
26,199,000
10,798,000
214,126,000
16,837,000
32,173,000

$ 1,191,599,000

Debits to individual, firm and corporation accounts in the leading trade centers of the Fifth
Federal reserve district are shown in the accompanying table for three periods of four weeks
each, ended August 10, 1927, Ju ly 13, 1927, and August n , 1926. The figures for the latest available
four weeks period, ended August 10th, may be compared with those reported for the preceding four
weeks ended Ju ly 13th this year and with those for the corresponding four weeks ended August
11, 1926.
Aggregate debits of $1,196,646,000 in the reporting banks during the four weeks ended August
10th show a seasonal decrease under the total of $1,269,484,000 reported for the preceding like pe­
riod, ended Ju ly 13th, the semi-annual and quarterly payments occurring on and around Ju ly 1st in­
creasing debits totals for the period containing that date. The decline was smaller than in most
years, and was uniformly distributed throughout the district, Charleston, W. Va., Durham and Win­
ston-Salem reporting the only increases during the later four weeks.
In comparison with the four weeks ended August n , 1926, when debits totaling $1,191,599,000
were reported, the total of $1,196,646,000 reported for the four weeks ended August 10th shows a
small gain ;of $5,047,000. Increases and decreases were almost equal in number among the report­
ing cities this year, twelve showing larger and eleven showing smaller 1927 figures.
SAVINGS DEPOSITS—Month by month savings and time deposits figures continue to climb.
At the end of Ju ly aggregate deposits in thirteen mutual savings banks in Baltimore totaled $167,669,978, compared with $167,218,144 on June 30, 1927, and $155,195,164 on July 31, 1926. Time de­
posits in sixty-seven regularly reporting member banks totaled $235,443,000 on August 10th, com­
pared with $229,229,000 on July 13th this year and $209,308,000 on August n , 1926.
BUSINESS FAILURES—“ Following the seasonal tendency, the number of commercial failures
in the United States declined during July, a total of 1,756 being reported/' according to Dun's Review
for August 6th. “ This marks the fourth consecutive monthly reduction and the decrease from the
2,465 defaults of last January—the high point for this year—approximates 29 per cent. Comparing
with, the 1,833 insolvencies of June, the present number is smaller by about 4 1 / 3 per cent, but it is
9 1 / 3 per cent above the 1,605 failures of Ju ly 1926. In considering the increase over the total for
that period, however, some allowance should be made for the larger number of firms and individuals
now engaged in business, which naturally enhances the possibilities of financial embarrassment.
In contrast with the decline in the number of commercial defaults last month from the total for
June, the liabilities show a considerable rise, owing to some large insolvencies. Thus, the Ju ly in­
debtedness of $43,149,974 is about 25 per cent above the amount for the immediately preceding
month, the increase being principally in the classification embracing agents, brokers, real estate,
etc. The present indebtedness is the largest since last April, when about $53,000,000 was reported.
Comparing with the $29,680,000 of Ju ly 1926, an increase last month of approximately 45 per cent
is shown.”
Business failures in the Fifth district in Ju ly numbered 114, the lowest figure recorded for any
month since last September, but an increase over the 105 failures reported in Ju ly 1926. In aggre­
gate liabilities involved, $4,065,583 reported for Ju ly this year compares more unfavorably with
$2,225,430 reported for June 1927 and only $1,692,277 in Ju ly 1926.
LABOR—The labor situation changed very little during the past month. In the cities there is
a surplus of labor in most lines of trade, but there i's apparently no unusually large number of idle
workers. The surplus appears larger because of comparison with recent abnormal years when labor
was exceptionally well employed. A very large volume of construction work is still under way in
the district, in spite of a decline from last year’s record level, and the manufacturing plants of the
district as a whole were probably never busier than at present. Miners in West Virginia are em­
ployed above the seasonal average as a result of the strike of bituminous miners in union fields.
Farmers in the Carolinas are probably in position to hire more labor for harvesting their crops than
they were last year, and the city surplus will make it easier for them to secure the necessary help.
On the whole, the labor situation is distinctly less favorable from the point of view of the workers
than a year ago, but the concensus of opinion seems to be that there is no serious unemployment
problem in the Fifth district at the present time.
COAL—In spite of the continuation of the bituminous coal strike, the production of soft coal
in July ran well over eight million tons per week, and during the week ended Ju ly 30th totaled 8,594,000 net tons, the highest figure for any week since the strike began on April 1st. According
to the Bureau of Mines, Department of Commerce, stocks of coal on hand on July 1st were the
largest on record for that date of any previous year, and during April, May and June the non-union
bituminous mines and the union mines still working lacked only a little more than one million tons
per week of keeping up with current demand from consumers. During the period between April
1st and Ju ly 1st, stocks of coal in the two Carolinas and Virginia actually increased, and the decrease
in Maryland in reserve stocks was less than 30 per cent. Coal prices are little higher than a year
ago, and are low in comparison with other strike years. Retail yards have supplies of all types
and sizes, and fill orders immediately for their customers. On the whole, the strike this year has



3

had little influence outside of the mine districts and has attracted comparatively no attention from
the public.
TEXTILES —Cotton mills in the Fifth reserve district consumed 239,653 bales of cotton in July,
compared with 273,414 bales used in June this year and 195,944 bales consumed in Ju ly a year ago.
The mills usually consume less cotton in Ju ly than in June, a number of mills closing a few days
to give their employees a summer vacation. Last month North Carolina mills used 130,660 bales,
South Carolina mills used 100,391 bales, and Virginia mills 8,602 bales. Most of the mills have suf­
ficient orders to run them well into the fall months, and goods are being shipped as manufactured,
practically no stocks being accumulated in warehouses. Stimulated by steady advances in raw cot­
ton prices, buyers have placed forward orders in larger volume than for several years. Much of the
business being done at present is at figures claimed to be below replacement costs, but most of the
mills are making some profit, since the goods shipped were made up from cotton bought at lower
prices than those now prevailing. Some advances in cloth and yarn prices have been made in recent
weeks, but the manufacturers contend that the advances did not cover the gains made by raw
cotton.
BUILDING OPERATIONS FOR THE MONTHS OF JULY 1927 AND 1926.
Permits Issued
0
Z
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

New

CITIES

Winston-Salem, N. C.

Charleston, S. C ...
Columbia, S. C.....
Greenville, S. C....
Spartanburg, S. C.
Washington, D. C.

580
23
10
17
16
15
84
2
87
44
9
40
26
44
21
24
69
46
45
52
27
16
9
116
16
19
15
22
110

Alterations

Repairs

1927 1926
Baltimore, Md.....
Cumberland, Md...
Frederick, Md.....
Hagerstown, Md...
Danville Va...„....
Lynchburg, Va....
Norfolk, Va..........
Petersburg, Va.....
Richmond, Va.
Roanoke, Va........
Bluefield, W. Va...
Charleston, W. Va.
Clarksburg, W. Va
Huntington, W.Va.
Parkersburg,W.Va
Asheville, N. C.....
Charlotte, N. C....
Durham, N. C......
Greensboro, N. C.
High Point, N. C...
Raleigh, N. C.......
Salisbury, N. C....
Wilmington, N. C.

New Construction

1927

1926

1927

1926

530 1,244 1,149 $ 3,044,760 $ 3,004,080
19
9
8
112,822
35,941
6
1
4
11,480
18,650
9
8
23
25,470
119,885
6
9
13
36,517
27,140
20
31
35
10,500
46,594
86
76
75
263,545
199,420
5
3
7
5,500
11,105
136
78
82
673,640
500,979
80
48
39
137,476
242,495
14
6
5
82,425
34,900
31
19
12
80,570
1,804,606
10
18
9
97,837
9,980
58
;2
3
170,180
68,885
23
'1
9
92,650
289,200
64
83
58
168,902
408,135
39
21
17
456,645
585,494
45
13
10
141,465
203,675
70
47
28
237,385
446,825
60
12
8
177,625
218,010
43
17
7
72,686
471,820
9
4
6
60,315
83,300
9
6
11
37,700
24,900
88
79
45
514,325
377,620
11
22
33
"20,250
13,850
13
37
31
|83,100
43,650
10
22
51,800
27
140,500
15
11
15
*50,315
72,200
322
359
278 2,134,125
4,106,865

Totals......... 1,604 1,850 2,287 2,027 $ 9,052,010 $13,610,704

1927
$ 492,600 $
7,720
400
27,150
46,767
10,742
65,625
1,750
73,997
19,725
4,645
24,200
19,995
45
300
60,622
9,127
8,515
9,596
3,950
43,218
4,560
3,300
54,861
17,485
8,050
12,805
4,725
378,710
$1,415,185

1926

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

613,680 $— 80,400 — 2.2 *fo 1
5,100
79,501 193.7
2
980 —
7,750 — 39.5
3
1,870 — 69,135 — 56.8
4
53,206 176.9
2,938
5
19,020 — 44,372 — 67.6
6
58,979
70,771
27.4
7
4,581
—
8,436 — 53.8
8
91,055
155,603
9
26.3
15,940 — 101,234 — 39.2 10
9,700
42,470
95.2 11
9,225 —1,709,061 — 94.2 12
2,975
104,877 809.5 13
5,700
95,640 128.2 14
6,200 — 202,450 — 68.5 15
12,840 — 191,451 — 45.4 16
60,325 — 180,047 — 27.9 17
11,900 — 65,595 — 30.4 18
8,250 — 208,094 — 45.7 19
17,300 — 53,735 — 22.8 20
14,583 — 370,499 — 76.2 21
11,150 — 29,575 — 31.3 22
8,700
7,400
22.0 23
31,495
160,071
39.1 24
15,933
7,952
26.7 25
27,813
19,687
27.5 26
13,130 — 89,025 — 57.9 27
7,550 — 24,710 — 31.0 28
599,685 —2,193,715 — 46.6 29
$1,688,597 —$ 4,832,106 — 31.6#

— Denotes decrease.
NOTE— The figures in the above table reflect the amount of work provided for in the corporation limits of the
several cities, but take no account of suburban developments.

For the tenth consecutive month, the volume of construction w^ork provided for in permits is­
sued in twenty-nine Fifth district citi'es in Ju ly was below the work provided for in permits issued
during the corresponding month of the preceding year. Permits for new construction issued last
month in the reporting cities numbered 1,604, with estimated valuation of $9,052,010, compared with
1,814 permits and a valuation of $13,322,479 in June this year, and 1,850 permits and $13,610,704 valu­
ation in Ju ly last year. For alteration and repair work, 2,287 permits issued last month exceeded
2,027 permits for this class of work in Ju ly last year, but July valuation figures totaling $1,415,185
were below the Ju ly 1926 total of $1,688,597. In combined valuation for both new and repair or al­
teration work, the twenty-nine cities totaled $10,467,195 last month and $15,299,301 in July a year
ago, a decrease during the 1927 month of $4,832,106, or 31.6 per cent. Eleven of the reporting
cities showed higher valuation figures for Ju ly 1927 than a year ago, but eighteen cities reported
lower figures. Larger figures for Ju ly 1927 were reported by three cities each in Virginia and West
Virginia, two each in North Carolina and South Carolina, and one in Maryland.



4

Building contracts awarded in the Fifth district in Ju ly totaled $34,241,200, including both urban
and rural construction. Of this amount, $8,951,675 was for residential work, according to statistics
collected by the F. W. Dodge Corporation.
COTTON—Spot cotton prices in the Carolinas advanced approximately 2 cents per pound, or
$10 a bale, during the past month. In our Review last month, we quoted the average price paid for
upland short staple, middling basis, as 16.69 cents per pound during the week ended Ju ly 16th. On
Monday, August 8th, the Department of Agriculture’s first condition report of the season was is­
sued, and as the estimate of probable production was much lower than the trade had expected, New
York and New Orleans future quotations jumped $10 a bale, the limit of a day’s trading. The fol­
lowing day quotations advanced approximately $5 a bale more. Since that time there has been a
natural reaction, and some of the advance has been lost, but quotations are still about $10 a bale
above the price immediately preceding the Department’s report. The average price paid for mid­
dling in the Carolinas during the week ended August 13th was 18.44 cents per pound, some lots
being sold for as much as 19.50 cents.
The first condition report of this year, issued by the Department of Agriculture on August 8th,
estimated probable production at 13,492,000 bales, based upon an August 1st condition of 69.5 per
cent on 42,683,000 acres. This figure compares with a final production of 17,977,374 bales in 1926,
an estimated decrease this year of about 4,500,000 bales. The Department stated in its report that
the outstanding factor in the cotton situation this year is the weevil menace. Infestation is reported
to be approximately three times as heavy as a year ago.
Cotton consumption in American mills in Ju ly was seasonally below consumption in June, but
was higher than in Ju ly 1926. The Bureau of the Census reported 569,250 bales of lint consumed
last month, compared with 662,630 bales used in June this year and 461,743 bales in Ju ly 1926. Total
consumption for the cotton year ended on July 31, 1927, amounted to 7,202,724 bales, compared with
6,455,852 bales consumed during the corresponding period ended Ju ly 13, 1926. Cotton on hand at
manufacturing establishments on Ju ly 31st this year totaled 1,404,358 bales, compared with 1,607,676 bales held on June 30th this year and 1,096,647 bales held on Ju ly 31st last year. Bales in public
warehouses ;and compresses numbered 1,822,671 at the end of July, 2,164,108 bales at the end of June,
and 1,935,913 bales on July 31, 1926. Exports of cotton totaled 389,358 bales in July, compared with
366,722 bales sent abroad in Ju ly last year, and exports during the cotton year totaled 11,183,938
bales compared with 8,155,570 bales exported in the year ended July 31, 1926. Imports last month
totaled 31,147 bales, compared with 12,090 bales imported in Ju ly 1926, while total imports for the
cotton year just closed totaled 399,960 bales, compared with 325,511 bales brought in during the pre­
vious year. Consumption of cotton in the growing states totaled 415,278 bales in July, compared
with 334,434 bales used in Ju ly last year. Last month’s consumption in the cotton growing states
amounted to 72.95 per cent of National consumption, compared with 72.42 per cent of National con­
sumption used in the cotton growing states in Ju ly last year.
TOBACCO—Tobacco markets in the South Carolina belt opened on August 9th with very large
sales. The crop matured early this year, and farmers had an unusually large part of the crop cured
when the markets opened. Approximately 5,500,000 pounds were sold in South Carolina and about
2,000,000 pounds in North Carolina markets on the opening day. Average prices were in the neigh­
borhood of 20 cents per pound, which was very satisfactory for the comparatively low grades offered
so early in the season. South Carolina’s crop, estimated at 68,705,000 pounds, shows a material in­
crease over last year’s crop of 57,510,000 pounds and a five-year average production of 60,600,000
pounds. In North Carolina the month of July changed the prospects for tobacco from poor to very
satisfactory, but heavy rains early in August probably damaged the crop somewhat. The color of
the leaf is unusually good, with good body, but the leaves are somewhat small, due to cool nights.
The August 1st condition of the crop indicated a probable production of 421,742,000 pounds, com­
pared with 393,190,000 pounds grown last year. Virginia’s tobacco crop made rapid progress during
Ju ly and early August, with best prospects in the flue-cured or Bright districts. The August 1st
condition pointed to a production of 138,038,000 pounds this year, compared with 132,352,000 pounds
produced last year. With favorable weather during the balance of August the yield and quality of
the crop promises to be excellent. Fifth district tobacco growers appear to be in a more favorable
position than a year ago. The condition of the tobacco crops of Kentucky and Tennessee, on the
other hand, is below that of last year.
AGRICULTURAL NOTES—M ARYLAN D farm prospects are less favorable than those of other
Fifth district states, and probably are poorer than a year ago. Corn is late, and the crop will be
short, with danger of frost damage unless warm weather continues well into the fall. The hay crop
is good, which will offset the corn shortage to some extent. The wheat crop turned out about 10,500,000 bushels, a fairly good yield although considerably under the high yield of last year. The
early potato crop was about 10 per cent larger than the ten-year average and prices were well main­
tained during the shipping season, the crop turning out profitably to the growers. Maryland’s fruit
crop will be considerably below the ten-year average. The tobacco crop of the state is expected to
yield about 25,600,000 pounds, in comparison with 28,000,000 pounds last year.



5

V IR G IN IA crops showed general improvement during July. Warm weather with frequent rains
caused rapid growth of corn, tobacco, peanuts and late hay crops. The Virginia wheat crop was
disappointing, yielding 8,638,000 bushels this year in comparison with 11,336,000 bushels last year and
10.049.000 bushels the average for the past five years. Corn improved in July, but the outlook in
Northern, Western and Southwestern counties is still very poor. East of the Blue Ridge mountains
corn is making rapid growth and now promises a good yield. The August 1st condition indicated a
crop of 43,160,000 bushels, compared with 46,585,000 bushels gathered last year and a five-year
average of 44,560,000 bushels. The early potato crop made one of the largest yields on record, and
the total production was much larger than was expected. Prices were very good during the first
half of the summer but declined rapidly after the middle of July. The late potato crop, which makes
up approximately 30 per cent of the total, is making good growth and promises a fine yield. Pro­
duction of white potatoes is estimated at 17, 606,000 bushels this year, compared with 11,658,000
bushels last year. Sweet potato vines have made a heavy growth, and prospects for the crop appear
good, but it is possible that the yield may be lower than the vines indicate. Frequently in wet sea­
sons the yield of sweet potatoes is disappointing. Early hay crops were very good, and late crops
promise excellent yields. The peanut crop of Virginia improved slightly during July, but growth
is still backward, the stand is poor and there is some complaint of grassy fields. The crop is expect­
ed to yield 122,056,000 pounds, compared with 131,100,000 pounds in 1926. The production of all fruit
crops, with the exception of grapes, will be below the ten-year average as most fruits were damaged
by the late spring frost. The production of apples, peaches and pears are about one-third of last year’s
large yields.
NORTH CARO LINA crops are generally good this year, and all of them improved during July.
Rains were favorable for corn, and the outlook for this crop is quite favorable. The yield this year
is estimated at 48,481,000 bushels. The hay crop is excellent, and pastures have been good since
June 1st. The peanut crop got off to a bad start in the spring, which resulted in irregular stands,
but the crop improved considerably in July, and a production of 214,313,000 pounds was indicated by
the August 1st condition. Apples almost amount to a failure this year. The production forecast of
2.151.000 bushels is only a little more than a third of last year’s crop and is less than half the fiveyear average. The peach crop of 1,291,000 bushels was also much below last year’s yield. The cot­
ton crop of North Carolina appeared to promise an excellent yield on August 1st, but the weevil is
a real menace. The condition of the crop is fairly uniform throughout the state, and cultivation is
generally good, but weevils have been found, in practically all counties, and the lateness of the crop
and recent heavy rains are both favorable to weevil development and damage.
SOUTH CAROLINA crops were reported as good to excellent on August 1st by the Agricultural
Statistician of the state. A condition of 77 per cent of a normal for corn indicated a crop of around
24,000,000 bushels this year, compared with 22,103,000 last year. Sweet potatoes promise well, a
crop of 5,141,000 bushels comparing favorably with 4,160,000 bushels last year. The peanut crop is
estimated at 10,688,000 pounds, compared with 6,500,000 pounds harvested in 1926. Due to a very
favorable season, the expected yield of hay of 293,000 tons is the best in years, and compares with
202.000 tons cut last year. The August 1st condition of South Carolina’s cotton crop was better
than the condition a year earlier, but the crop varies widely in the state, ranging all the way down
from 85 per cent in Anderson county to 39 per cent in Beaufort, Horry and Jasper. In the Southern,
Eastern and Central counties boll weevil infestation is more than 50 per cent. The weevil is present
in all counties, but in the heavy producing Piedmont section is least numerous, and yields in those
counties promise to be much larger than last year, when production was cut down by a severe
drought. The final production this year will depend upon the actual weevil damage, which cannot
be accurately estimated at this time.
WHOLESALE TRADE, JULY 1927
Percentage increase in July 1927 sales, compared with sales in July 1926:
13 Drugs
5 Shoes
15 Hardware
5 Furniture
33 Groceries
12 Dry Goods
— 1.2
12.6
16.3
— 8.0
6.3
— 2.9
Percentage increase in July 1927 sales, compared with sales in June 1927:
— .1
1.4
— 7.0
8.7
19.0
— 5.2
Percentage increase in total sales since Jan. 1, 1927, comp ared with sales during the corresponding seven months
of 1926:
— 5.1
— 2.4
— 6.4
— 1.3
1.4
4.3
Percentages increase in stock on July 313 1927, compared with stock on July 31, 1926:
,
3.6(12)*
— 3.5(4)*
— 8.0(7)*
.7(4)*
Percentages increase in stock on July 31, 1927, compared with stock on June 30, 1927:
— 2.9(12)*
2.3(4)*
3.7(4)*
— 2.7(7)*
Percentage of collections in July to total accounts receivable on July 1, 1927:
28.2(3)*
61.8(20)*
28.4(8)*
27.5(4)*
31.0(10)*
58.3(8)*
— Denotes decreased percentage.



* Number of reporting firms in parenthesis.
6

Wholesale trade in the Fifth reserve district in dry goods, shoes and furniture was in larger vol­
ume in Ju ly this year than in Ju ly a year ago, but grocery, hardware and drug sales were in smaller
volume during the 1927 month, according to reports sent to the Federal Reserve Bank of Richmond by
eighty-three firms. The same lines showing increased sales in Ju ly in comparison with Ju ly 1926
also showed rises or declines in last month’s sales in comparison with those of June this year. Dur­
ing the first seven months of 1927, shoe and hardware sales by the reporting firms exceeded sales dur­
ing the corresponding seven months of 1926, but grocery, dry goods,, furniture and drug sales were
less this year.
Stocks of goods on the shelves of the reporting firms were larger in groceries and shoes at the
end of Ju ly 1927 than a year earlier, and dry goods and shoe stocks were larger than a month
earlier, June 30, 1927. Grocery and hardware stocks declined between June 30th and Ju ly 31st,
both this year, and on the latter date dry goods and hardware stocks were smaller than those re­
ported on July 31, 1926.
The percentage of collections in Ju ly to accounts receivable on Ju ly 1st were lower this year
in all lines except shoes than' in July 1926, furniture experiencing the greatest decline. The figures
were also lower in Ju ly than in June this year in all lines except drugs, in which exactly the same
percentage was collected in both June and July.
FIGURES ON RETAIL TRADE
-

_ _ _ _ _ _ _ _ _ _As Indicated By Reports from Thirty Representative Department Stores for the Month of July 19 2 7

____________________________________

Percentage increase in July 1927 sales, compared with sales in July 1926:
Baltimore
Richmond
Washington
Other Cities
District
— 11.8
— .2
— 6.4
— 2.7
— 7.7
Percentage increase in total sales since January 1st, over sales during the first seven months of 1926:
— 4.2
2.8
— 2.4
— 1.4
— 2.6
Percentage increase in July 1927 sales over average July sales during the three years 1923-1925, inclusive:
— 5.1
5.4
9.3
3.1
1.8
Percentage increase in stock on hand July 31, 1927, over stock on July 31, 1926:
— 1.9
— .9
1.5
3.3
.02
Percentage increase in stock on hand July 31, 1927, over stock on June 30, 1927:
— 2.2
— 1.4
— 6.1
— 5.9
— 4.0
Percentage of sales in July 1927 to average stock carried during that month:
19.0
22.3
21.9
18.4
20.3
Percentage of total sales since January 1st to average sfr ck carried during each of the seven elapsed months:
171.4
185.5
185.5
146.0
174.8
Percentage of outstanding orders on July 31st to total pi rchases of goods in 1926:
8.0
6.5
7.7
4.8
7.5
Percentage of collections in July 1927 to total accounts receivable on July 1st:
21.5___________________281________
28.3____________ 30.8_______________________
25.0
— Denotes decreased percentage.

Retail trade in the Fifth reserve district in July, as measured by sales in thirty leading depart­
ment stores, averaged 7.7 per cent less than in July 1926, and was also seasonally below the volume
of trade in June this year. Total sales during the first seven months of this year averaged 2.6 per cent
below sales during the corresponding seven months last year. July 1927 sales were 1.8 per cent
above average Ju ly sales during the three years 1923-1925, inclusive.
Stocks on the shelves of the reporting stores, at retail prices, were almost exactly the same at
the end of July as at the same time a year ago, an increase of two-hundredths of 1 per cent being
reported. Stocks at the end of Ju ly 1927 were 4.0 per cent less than stocks on June 30, 1927, a sea­
sonal decline.
The percentage of sales during Ju ly to stocks carried during the month averaged 20.3 per cent,
and the percentage of total sales during the seven elapsed months this year to average stocks car­
ried during each month was 174.8 per cent, indicating an annual turnover of 3 times.
Collections by twenty-nine of the thirty reporting stores during Ju ly totaled 25.0 per cent of
outstanding receivables as of Ju ly 1st, a lower rate than was reported for June this year and also
below the average of 27.1 per cent collected in Ju ly last year. Richmond’s percentage of collections
was higher this year than a year ago, but the other cities reported lower collections for Ju ly 1927.




(Compiled August 20, 1927)

7

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

Industrial production declined in July to a level below that
of a year ago, while the Department of Labor’s index of wholesale
prices advanced for the first time since last Autumn. Demand for
bank credit showed a seasonal increase, but easy conditions pre­
vailed in the money market.

1923

192* *

1925

1926

1927

Index numbers of production of manufactures and mineral*, adjusted
for seasonal variations (1923.1925 average = 100). Latest figures,
July, Manufactures 107, jainejals 97.
PERCENT

PERCENT

2001----- : ------------------------ “
I---------- ----------- 1200

150

WHOLESALE PRICES
Index of United States Bureau of Labor Statistics (1913 * 100, bast
adopted by Bureau). Latest figure, July 144.6.
PERCENT

PERCENT

150

150r

Ci

Payrolls

j

A+vS*
Employment

50
FACT*3RY EM YM T
PLO EN
O .LS
M ID PAY R L

1923

1 1924 1 1925
>

1926

1927

federal Reserve Board's indexes of factory employment and pay.
rolls (1919 s 100). Latest figures, July, employment 90.7,
payrolls 101.1.
PERCENT

PERCENT

6

PRODUCTION. Output of manufacturers declined in July
and was in practically the same volume as a year ago, and the
production of minerals, which was further reduced during the month,
was at the lowest level since early in 1926, when the anthracite
strike was in progress. Iron and steel production in July was in
the smallest volume since 1925 and continued at practically the
same level during the first three weeks of August. Automobile
output for July and the early weeks of August was considerably
below that of the corresponding months of last year. Production
of rubber tires, nonferrous metals and food products, and activity
in woolen mills, were smaller in July than in, the preceding months.
Cotton consumption was smaller than in June but continued un­
usually large for this season of the year. Production of leather,
shoes and lumber increased in July as compared with June. Fac­
tory employment and payrolls showed seasonal decreases in July
and were smaller than in any month since 1924. Employment in
coal mining has been reduced in recent months and reports* indicate
some unemployment in certain of the building trades, owing to
the decline in the construction of houses. Building contract awards
in July and in the first three weeks of August continued larger
than a year ago, the increase reflecting chiefly a growth in awards
for engineering projects. The August 1st cotton report o f the
Department of Agriculture indicated a production of 13,492,000
bales, or 25 per cent less than the record yield of last year. The
indicated production of corn, though considerably larger than the
expectation in July, was 262,000,000 bushels lower than the har­
vested crop of 1926. The August estimate of 851,000,000 bushels
of wheat indicated an increase of 18,000,000 bushels over the 1926
crop yield.
TRADE. Distribution of merchandise at wholesale and retail
showed about the usual seasonal decline in July. Compared with
a year ago sales of wholesale firms and of department stores were
slightly smaller, owing largely to the fact that there was one less
business day in July of this year than in July 1926. Sales of mail
order houses and chain stores were somewhat larger than a year
ago. Inventories of department stores continued to decline in July
and at the end of the month were slightly smaller than a year ago,
and wholesale stocks also continued smaller than last year. Ship­
ments of commodities by freight decreased, contrary to the usual
seasonal trend, and were smaller in July and in the first two weeks
of August than in the same period o f last year.
PRICES. The Bureau of Labor Statistics index of wholesale
prices advanced slightly in July, reflecting chiefly increases in the
price of corn, live stock, cotton and leather, while prices of wheat,
silk, metals and building materials declined. Since the latter part
of July prices of corn, cotton and cattle have continued upward
and those of wheat, nonferrous metals and rubber have also ad­
vanced, while hogs, lumber and hides have declined.

6

rL

1 =.-—
T a---------

f

jv - - '

r

t Vo ’*
fV

0NEYRATE2s
in

merciaf Popet'Rote
ReserveBankDVscovntFate
?ptance/fate

1325

1926

1927

BANK CREDIT. There was an increase in the volume of
commercial loans at member banks in leading cities between July
20th and August 17th as is usual at the beginning of the crop
moving season. Loans on securities, as well as commercial loans,
increased, while investment holdings declined and total loans and
investments were about $60,000,000 larger than a month earlier.
Total borrowings of member banks at reserve banks increased
slightly between July 20th and August 24th. There was a growth
of discounts at the Federal Reserve Bank of New York, partly
offset by the decline in other districts. There was little change
in the System’s holdings of acceptances and a growth in the port­
folio of United States securities. Money rates on all classes of
paper in the open market declined sharply in August and were at a
lower level than a year ago. Discount rates at eight Federal re­
serve banks were reduced from 4 to 3 ^ per cent.

Vsskly rates in New Tork money market: commercial paper rat* on
♦ to « months paper and acceptance rate on 90-day paper.




8

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