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MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, C h a irm a n a n d F e d e r a l R e s e r v e A g e n t FEDERAL RESERVE BANK OF RICHMOND RICHMOND, VIRGINIA INCE the middle of July some improvement in conditions in the Fifth reserve district have been noticed. Two influences which ap pear to have been instrumental in bringing about the change are the activity and improvement in the security market and the recent rise in prices for cotton and some other agricultural products. Most of the basic business statistics which are now available cover the month of July, and show little change from other recent months, but neverthe less there is much more optimism than was the case previously. The Department of Labor's figures for July show price advances in both wholesale and retail indexes, the first checks reported in many months to steadily falling commodity prices. In the Fifth district labor conditions have changed for the better in some industries and localities, a num ber of industrial plants having taken on additional workers and opening of tobacco markets requiring the help of several hundred men. Textile mills have increased operating time materially since the first of August, and orders for their products have increased also. As is customary at this season of the year, the circulation of Federal reserve notes rose during the past month, but member banks in rural districts did not increase their rediscounts at the reserve bank as they usually do when crops begin to move to market. Member banks in the larger centers slightly decreased their loans but increased their investments in securities between the middle of July and the middle of August, and in creased moderately their borrowing at the reserve bank. Bank deposits changed little during the past month. Debits to individual accounts figures in the four weeks ended August 10 showed a seasonal reduction in comparison with the preceding four weeks, which included the July 1 payments. Com mercial failures in the Fifth Federal reserve district in July were more numerous and liabilities involved AUGUST 31, 1932 were greater than in any other July on record, but were not up to the figures of several earlier months this year. Coal production showed some seasonal increase in July in comparison with June and W est Vir ginia continued to lead all States in production of bituminous coal. Cot ton consumption in both the United States and the Fifth district was relatively small in July because many mills were closed a consider able part of the month, but since August 1 nearly all textile mills have resumed operations, and higher cotton prices have improved the out look for both the mills and the cot ton growers. Tobacco markets opened in August in South Carolina and border counties in North Carolina, and prices for lower grades were better than prices last year. Tobacco manufacturing in July was at a lower rate than in July last year but compared favorably with other recent months. Crop prospects insofar as quantity of yields is con cerned declined materially in July because of dry and hot weather throughout the entire district, but the outlook for better prices improved in several lines and on the whole the farmers appear to be in a stronger position than they were at this time a year ago. Building permits issued in Fifth district cities in July provided for a very small amount of construction work, but contracts actually awarded in the district, including rural as well as urban projects, exceeded in amount the contracts awarded in either June this year or July last year. Retail trade as reflected in department store sales last month averaged nearly 28 per cent less in dollar amount than trade in July 1931, and five representa tive lines of wholesale trade also showed materially lower sales this year. I t should be remembered that lower price levels in many lines this year account for part of the decline in the aggregate value of retail and wholesale sales. MONTHLY REVIEW 2 Member Bank Statement Reserve Bank Statement ITEMS Rediscounts held ---------------Open market paper.................... Government securities----------Other earning assets.................. Total earning assets............... Circulation of Fed. Res. notes.. Members’ reserve deposits........ Cash reserves ........................... Reserve ratio -------------------- 000 omitted Aug. 15 July 15 Aug. 15 1931 1932 1932 $28,226 2,767 47,133 0 78,126 96,140 49,786 77,632 51.83 $29,957 3,659 47,133 0 80,749 91,918 50.487 79.768 51.27 $19,008 4,010 31,558 60 54,636 68,782 60,133 91,037 65.13 ITEMS Aug. 10 1932 000 omitted July 13 Aug. 12 1932 1931 Loans on stocks and bonds (in cluding Governments) ........ $119,454 $123,485 $158,700 All other loans......................... 203,568 204,210 248,448 Total loans and discounts.... 323,022 327,695 407,148 Investments in stocks and bonds 257,718 247,200 227,548 41,063 34,665 Reserve bal. with F. R. Bank.. 34,753 12,781 Cash in vaults____________ 12,840 12,690 Demand deposits __________ 273,702 277,071 333,702 Time deposits ____________ 228,860 229,315 263,281 3,368 Borrowed from F. R. Bank.__ 7,208 7,871 The figures in the accompanying table show the Forty-nine member banks in twelve leading cities principal items on the condition statement of the Federal Reserve Bank of Richmond as of August of the Fifth Federal reserve district make weekly 15, 1932, in comparison with corresponding figures reports of condition to the Federal Reserve Bank a month and a year earlier. Rediscounts for mem of Richmond, and the accompanying table shows ber banks, contrary to seasonal trend, declined by the totals of the principal items for the latest avail $1,731,000 during the past month, but at the middle able date, August 10, 1932, in comparison with cor of August showed an increase of $9,218,000 over responding figures a month and a year earlier. It rediscounts held on the corresponding date last should be understood that the figures reflect the year. Holdings of open market paper on the latest composite condition of the reporting banks on the date were smaller than holdings on either July 15 report dates only, and are not necessarily the high this year or August 15 last year. Government est or lowest figures that occurred during the securities held by the Federal Reserve Bank of period under review. Total loans is the forty-nine reporting member Richmond remained unchanged during the past month, but totaled $15,575,000 more than on August banks declined by $4,673,000 between July 13 and 15, 1931. Total earning assets of this Bank de August 10, this year, nearly all of the decrease creased by $2,623,000 between July 15 and August being in loans on securities. Investments of the 15, but on the latter date exceeded earning assets as reporting banks in stocks and bonds rose $10,518,000 of August 15 last year by $23,490,000. There was during the past month, all of which was in owner a seasonal increase in the circulation of Federal ship of Government securities. Aggregate reserve Reserve notes amounting to $4,222,000 during the balances of the reporting banks at the reserve bank past month, partly due to a need for currency in showed only a daily fluctuation between July 13 connection with the opening of South Carolina and August 10, increasing by $88,000. On the other auction tobacco markets, but the increase in circu hand, cash in vaults declined $150,000 during the lation during the past two months was greater than month, and deposits dropped $3,824,000, demand de usually occurs. It is probable that part of the in posits declining $3,369,000 and time deposits de crease is due to the influence of the new tax on creasing $455,000. The reporting banks increased checks, which has caused many people to pay cur their borrowing at the reserve bank by $663,000 rent bills with currency. This is borne out by the duiing the month under review. On August 10, fact that the number of checks handled by the re 1932, twenty-one of the forty-nine institutions were serve bank has notably decreased. At mid-August rediscounting at the Federal Reserve Bank of the volume of notes in actual circulation showed an Richmond. increase of $27,358,000 over the amount in circula Comparison of the August 10, 1932, figures with tion a year earlier, an increase due at least in part those for August 12, 1931, shows a decrease of to hoarding, which although not increasing has not $84,126,000 in total loans during the year, and an materially decreased. Member bank reserve de increase of $30,170,000 in investments in securities. posits dropped $701,000 between the middle of July Aggregate reserve balance with the Federal Re and the middle of August, and showed a decline serve Bank of Richmond totaled $6,310,000 less on amounting to $10,347,000 during the past year, both the 1932 date than a year earlier, and cash in vaults decreases being due to lower requirements against declined $91,000 during the year. Total deposits materially smaller deposits in member banks. The declined $94,421,000 between the middle of August several changes in the statement of the Federal last year and this, of which $60,000,000 was in de Reserve Bank of Richmond resulted in declines in mand and $34,421,000 was in time deposits. On cash reserves during last month and last year, the August 10, 1932, the reporting banks were borrow decrease during the month amounting to $2,136,000 ing $4,503,000 more from the reserve bank than and the drop during the year to $13,405,000. The they were borrowing on August 12, 1931. Twentyratio of cash reserves to note and deposit liabilities one of the forty-nine banks were rediscounting at combined rose 0.56 points last month, but declined I the reserve bank on the 1932 date, while last year 13.3 points during the past year. at the same time only nine were borrowing. MONTHLY REVIEW Time and Savings Deposits Time deposits in forty-nine regularly reporting member banks and aggregate deposits in twelve mutual savings banks in Baltimore totaled $440,607,538 at the end of July 1932, a slightly lower figure than $442,717,818 at the end of June this year and materially less than $473,216,490 a year ago. Debits to Individual Accounts CITIES 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, M d.___ Huntington, W. Va... Lynchburg, Va........... Newport News, Va._ Norfolk, Va.............. Portsmouth, Va......... Raleigh, N. C______ Richmond, Va. ____ Roanoke, Va.............. Spartanburg, S. C_ _ Washington, D. C_ _ Wilmington, N. C_ _ Winston-Salem, N. C. Fifth District Totals 000 omitted Total debits, four weeks ended Aug. 10, July 13, Aug. 12, 1932 1932 1931 $ 6,499 272,689 7,356 22,624 24,730 10,415 4,464 3,502 11,766 8,398 6.969 4,934 8,749 10,066 5,899 31,047 2,997 11,490 88,535 15,352 3.970 177,266 5,644 19,285 $ 764,646 6,541 259,227 8,671 30,497 28,585 12,336 6,985 4,482 12,127 9,847 7,769 6,332 9,738 11,659 6,394 33,850 3,231 14,543 106,738 16,790 4,980 195,842 6,508 25,702 10,182 373,602 18,590 30,885 34,588 16,009 7,078 5,907 19,411 14,769 11,958 6,796 12,995 11,961 9,777 42,326 3,770 21,941 101,393 22,480 7,006 189,371 8,291 26,312 $ 829,374 $1,007,398 $ Aggregate payments by checks drawn on clearing house banks in twenty-four cities of the Fifth Fed eral reserve district are shown in the accompanying table for three equal periods of four weeks, ended August 10, 1932, July 13, 1932, and August 12, 1931, thus affording opportunity for comparison of the latest available figures with those of the preceding like period this year and the corresponding period a year ago. Lower price levels this year in many lines affect the comparison of the 1932 figures with those for 1931, and account for part of this year’s decline. During the four weeks ended August 10 this year, aggregate debits to individual, firm and cor poration accounts in the reporting cities totaled $764,646,000, a decrease of $64,728,000, or 7.8 per cent, under aggregate debits in the preceding four weeks, ended July 13, 1932, every city on the re porting list except Baltimore showing lower figures for the more recent period. A decline at this time is seasonal, due chiefly to large semi-annual and quarterly payments occurring in the earlier period, around July 1. Last year the decline between the two periods was 8.4 per cent, somewhat more than the 7.8 per cent decrease this year. Baltimore showed an increase of 5.2 per cent. 3 A comparison of the figures reported for the four weeks ended August 10 this year with the figures for the corresponding period ended August 12, 1931, shows a decline of $242,752,000, or 24.1 per cent, but at least part of this decrease was due to lower price levels this year. Every one of the twenty-four reporting cities show materially lower figures for the 1932 period. Commercial Failures Commercial insolvencies in the Fifth Federal reserve district in July 1932 totaled 173, with aggre gate liabilities amounting to $4,545,602, an increase in number of 94.4 per cent and a rise in liabilities of 244.2 per cent in comparison with 89 failures and estimated liabilities totaling $1,320,725 in July 1931. Both the number of failures and the aggregate liabilities involved in Fifth district failures last month were larger than for any other July since the Federal Reserve Bank of Richmond began its insolvency record in 1919, but both figures last month were below those of June this year. The Fifth district record for July 1932 was much worse than the average record for the United States, which showed increases in number of insolvencies amounting to 30.9 per cent and in liabilities totaling 42.9 per cent in comparison with July 1931, but the unfavorable comparison was due in part to the relatively good record of the Fifth district in July last year. All of the twelve reserve districts re ported more failures in July 1932 than in July 1931, and all except two districts, Philadelphia and St. Louis, reported greater liabilities this year. Employment In July and the first half of August some im provement was reported in employment conditions in the Fifth Federal reserve district. A consider able number of industrial plants took on additional workers, and one large corporation announced the restoration of wages to the level from which a cut was made last winter. The opening of tobacco markets in South Carolina and border North Caro lina towns gave employment to several hundred persons. Coal Production Bituminous coal production in the United States in July 1932 totaled 17,830,000 net tons, a larger out put than 17,749,000 tons dug in June this year but much lower than 29,790,000 tons brought to the sur face in July 1931. Total production of soft coal during the present calendar year to August 6 amounted to 166,806,000 tons, the lowest figure in many years. The July 23 report of the Bureau of Mines, Department of Commerce, gave coal pro duction figures by States for the month of June 1932, and also for the first six months of this year in comparison with other recent years. W est Vir ginia mines led in production in June with 5,682,000 net tons, Pennsylvania ranking second with 5,052,- 4 MONTHLY REVIEW 000 tons and in the first half of this year W est Vir ginia mined 39,965,000 tons against 36,741,000 tons mined in Pennsylvania. Textiles It is customary for Southern textile mills to close for a week or ten days in July to give em ployees a vacation and to enable the management to overhaul machinery, and in July this year the re striction in operating time was extended further to prevent the accumulation of manufactured goods. However, since the first of August nearly all mills have started up again, and orders have increased, chiefly due to the influence of the Department of Agriculture’s first cotton condition report of this season, which was issued on August 8. The outlook for the textile industry is now considered better than it has been for many months. Cotton con sumption in the Fifth district mills in July 1932 totaled only 129,389 bales, a lower figure than 144,892 bales used in June this year, and 36 per cent less than 202,187 bales consumed in July 1931. Last month North Carolina mills used 66,144 bales, South Carolina mills used 56,729 bales, and Virginia mills used 6,516 bales, all lower figures than those re ported for July 1931. July 1932 consumption in Vir ginia and the Carolinas was 46.4 per cent of National consumption, a higher figure than either 45.2 per cent of National consumption in June 1932 or 44.9 per cent in July 1931. Cotton Statistics Spot cotton prices continued to range around 5y2 cents per pound during the second half of July and the first week in August, but when the Depart ment of Agriculture’s first condition report of the year on the 1932 cotton crop was issued on August 8 prices of cotton rose more than a cent a pound, and has held the gain to the present writing. In our Review last month we quoted 5.53 cents per pound as the average paid for middling grade upland cot ton, % inch staple, on leading Southern markets on July 15. The price rose to 5.65 cents on August 5. On August 12, the first date for which official aver ages were obtainable after the release of the Aug ust 8 condition report, the price was 6.82 cents, and on August 19, the latest date for which figures are available, the average price was 7.11 cents. Quo tations are now higher than prices at this time last year. The Department of Agriculture’s first report on this year’s probable production of cotton, issued on August 8, estimated the crop at only 11,306,000 equivalent 500-pound bales, which was about a mil lion bales lower than private observers expected. As previously stated, the report immediately raised cotton prices more than a cent a pound. The De partm ent said that prospects for this year’s crop are more uncertain than usual because boll weevils are present in greater numbers than in any year since 1928. Mention is also made of a material re duction in the use of fertilizer this year, with re sulting small plants in many sections of the cotton belt. The condition of the crop on August 1 was 65.6 per cent of a theoretical normal, and the pro spective yield per acre was given as 149.6 pounds, both figures lower than the averages for the past ten years. The indicated yield of 11,306,000 bales compared with 17,096,000 bales ginned from the 1931 crop, a decrease this year of 5,790,000 bales, or 34 per cent. This year’s yield, if realized on the basis of the August 1 condition, will be 3,352,000 bales less than average annual production during the past ten years. In the cotton growing states of the Fifth reserve district, production this year is forecast to be ma terially smaller than last year, the decline aver aging 37 per cent in comparison with the National decline of 34 per cent. South Carolina is expected to grow only 590,000 bales this year, a decrease of 41 per cent in comparison with 1,005,000 bales gin ned in 1931. North Carolina’s crop this year is fore cast as 509,000 bales, showing a decline of 33 per cent from 756,000 bales grown last year. The Vir ginia cotton crop this year of 35,000 bales shows a decline of only 17 per cent under 42,000 bales ginned in 1931. Total figures for the district are 1,134,000 bales this year, compared with 1,803,000 bales gathered last year. Every cotton growing state in the United States shows a reduction in probable production this year. Consumption of cotton in the United States in July 1932 totaled 278,656 bales, compared with 320,783 bales used in June this year and 450,884 bales in July 1931. Total consumption for the cotton year ended July 31, 1932, amounted to 4,869,103 bales, compared with 5,262,974 bales consumed in the corresponding period of the 1930-1931 season. Manufacturing establishments held 1,218,863 bales on July 31, compared with 1,322,793 bales held on June 30 and 995,526 bales on July 31, 1931. Pub lic warehouses and compresses held 6,703,453 bales in storage at the end of July this year, compared with 7,154,241 bales so held a month earlier and 4,524,467 bales on July 31 last year. July exports totaled 449,476 bales, compared with 360,205 bales sent abroad in June 1932 and 259,059 bales exported in July 1931. Exports during the cotton year end ed July 31 totaled 8,707,548 bales, compared with 6,759,927 bales shipped over seas during the cor responding year ended July 31, 1931. Spindles ac tive at some time in July numbered 19,758,252, compared with 20,561,914 in June this year and 25,825,718 in July 1931. Cotton consumption in the cotton growing states totaled 239,186 bales in July, compared with 274,687 bales used in June and 353,944 bales in July 1931. Last month’s consumption in the cotton growing states amounted to 85.4 per cent of N at ional consumption, a lower percentage than 85.6 per cent in June this year but higher than 78.5 per cent in July last year. Of the 239,186 bales of cot ton consumed in the cotton growing states in July, MONTHLY REVIEW 5 the fifth district mills used 129,389 bales, or 54.1 production shows the greatest decline, July 1932 per cent, a lower percentage than 572 per cent of production being approximately 25 per cent less Southern consumption attained by Fifth district than the output in July 1931. mills in July last year. Agricultural Notes Tobacco Maryland crops declined seriously in condition dur Prospects for the tobacco crop in the Fifth dis ing July, due to dry weather. Corn held its own, trict on August 1 indicate a yield of approximately but production forecasts of all other crops were 385.771.000 pounds in comparison with 684,996,000 lower on August 1 than a month earlier. The pounds produced in the district in 1931, a reduction wheat crop, in particular, turned out light in of 43.7 per cent in comparison with a National de weight, and only 4,940,000 bushels were harvested crease of 3&3 per cent. In North Carolina, which in comparison with 9,696,000 bushels in 1931, this leads in tobacco production in the Fifth district, a year’s yield being the smallest since 1872. Fruit yield of about 2w>,560,000 pounds is expected this crops suffered ereatly in July, and the apple crop, year, compared with 479,526,000 pounds in 1931. forecast at 1,444,000 bushels on August 1, compared The Virginia crop on August 1 indicated a yield of quite unfavorably with 3,458,000 bushels gathered 57.812.000 pounds, compared with 97,920,000 pounds last year. A peach crop of 312,000 bushels this grown last year. South Carolina tobacco is expect year compares with 820,000 bushels in 1931. This ed to yield 32,000,000 pounds, compared with 70,- year’s corn crop is forecast at 16,058,000 bushels, 070.000 pounds in 1931. The Maryland crop of 26,- in comparison with 20,710,000 bushels grown in 064.000 pounds is below 32,160,000 pounds last year. 1931. A 1932 oat crop of 1,500,000 bushels is 25 Prospects in West Virginia are for a yield of 3,- per cent less than 2,010,000 bushels last year. Irish 335.000 pounds this year, compared with 5,320,000 potatoes this year amounting to 3,230,000 bushels pounds grown in 1931. Tobacco auction markets compare better with 3,360,000 bushels dug in 1931 m South Carolina and border counties in North than most other crops, but the 1932 sweet potato Carolina opened early in August. Prices paid in crop of 1,480,000 bushels is 26 per cent below the ^'the early days of the present season were about 1931 yield of 2,013,000 bushels. The only Mary the same as those of last year on the better grades land crops which show larger yields this year than : of tobacco, but low grades are selling higher than last are barley and hay. they did in 1931. As is the case in nearly all years, Virginia crops declined during July as a result of t;he tobacco brought to market in the first weeks c*f the season was chiefly primings and lugs. The unfavorable weather conditions throughout most drastic reduction in tobacco yield this year has in sections of the State. The poorest conditions are fluenced prices on auction markets less than would reported in the Central and Southern counties where be the case in most years, chiefly because recent the rainfall was very light. Corn suffered more larg e crops have built up an unusually large sur than any other crop and many fields were seriously plus of tobacco from which manufacturers can draw damaged by the hot, dry weather during the latter if thvs year’s crop turns out as short as is now in part of the month. Showers since August 1 have improved conditions in many sections, but some dicated. parts of the State continue dry. The final produc tion of such crops as corn, cotton, tobacco and pea Tobacco Manufacturing nuts will depend upon weather conditions during On August 19, the Commissioner of Internal Rev August as this is the critical month in the develop enue issued a report on taxes collected in July 1931 ment of these crops. Early threshing reports show on manufactured tobacco products. July produc that the wheat yield was even less than had been tion of cigarettes in the United States numbered estimated on July 1. Heads were poorly filled and 9,534.022.443, compared with 10,699,528^523 ciga the grains were small and in some cases shriveled. rettes mupufactured in July 1931. Smoking and Total production of wheat is estimated at 6,520,000 chewing tobacco declined from 27,253,731 pounds bushels, compared with 13,266,000 bushels harvested in July last year to 24,296,142 pounds in July this last year. The August 1 condition of com indi year. Cigars manufactured dropped from 478^00,- cates a production of 31,500,000 bushels, compared 849 in July 1931 to 361,240,267 in July 1932. Snuff with 43,061,000 bushels harvested last year. Pros production fell from 3,407,519 pounds to 2,437,112 pects for late hay crops declined considerably dur pounds. During the month of July 1932, taxes on ing July. The yield of hay harvested in June and cigarettes totaled $28,605,438, compared with $32,- July was fairly good, however, so total production 103,234 collected in the corresponding month last of hay is estimated at 894,000 tons, compared with year. Taxes on smoking and chewing tobacco de 993,000 tons harvested last year. The condition creased duruM the same period from $4,905,963 to of pastures declined rapidly during July and on r $4,373,874. Cigarette manufacture dropped approx August 1 the condition was reported at 64 per cent imately 11 per cent below the production in July of normal, compared with 90 per cent last year. 1931, and other manufactured tobacco, exclusive Rains since August 1 have revived pastures in many of cigars, is off between 12 and 13 per cent Cigar sections of the State, but generally frequent show- MONTHLY REVIEW era will be needed daring August to restore pas tures to their usual condition. The growth of pea nuts was retarded by dry weather but growers were able to cultivate the fields and there is practically no grass, which in a wet season causes a heavy re duction in the yield of nuts. The stand is good and the plants have an excellent color, but no estimate of production can be made until the acreage to be hogged off is determined by the farmers. Early commercial potato growers reported a crop of 7,175,000 bushels, compared with 10,639,000 bushels last year. The condition of sweet potatoes declined in July and a crop of 4,560,000 bushels is indicated, compared with 4,750,000 bushels harvested last year. Weather conditions during August will largely determine the final yield; The Virginia commercial apple crop is estimated to be 2,040,000 barrels, compared with 3,500,000 barrels harvested last year. The quality of apples this season is re ported to be very good except for scab injury in poorly sprayed orchards. Peach prospects declined last month as weather conditions were unfavorable and die production will be less titan was estimated earlier in the season. The total production for the State is estimated to be 306,000 bushels, compared with 1,600,000 bushels produced last year. The size of the fruit is smaller than usual but otherwise the quality is very good. North Carolina experienced the hottest and dryest July in many years, and some sections of the State had near drought conditions. The rainfall during the month consisted mostly of light showers which were of little benefit to plants. The severely hot ten-day period about the middle of July was seri ously harmful to crops. During the last few days in July and the first of August good rains occurred generally over the State, but these were not suf ficient to relieve the dry conditions. Corn has prob ably suffered more from drought than other major crops, and this year's yield is estimated at 35,520,000 bushels, compared with 48,072,000 bushels har vested in 1931. The peanut crop showed a condition of 71 per cent on August 1, compared with 80 per cent a year earlier. The crop has a healthy appear ance and showers early in August were beneficial, but no estimate of production can yet be made. The North Carolina wheat crop of 3,515,000 bushels compares with 4,407,000 bushels threshed last year, and the oat crop of 3,978,000 bushels this year com pares with 4,531,000 bushels harvested in 1931. The hay crop of 1932 is estimated at 551,000 tons, com pared with 677,000 tons last year. The total apple crop is forecast at 1,460,000 bushels, compared with 5.328.000 bushels gathered in 1931, and this year’s peach crop of 1,540,000 bushels compares with 3,128.000 bushels last year. The sweet potato crop of 6,853,000 bushels in comparison with 6,560,000 bushels dug in 1931 shows the only increase in pro duction among the North Carolina crops. South Carolina suffered from hot, dry weather in July, and crop prospects declined materially. The indicated yield per acre of all crops combined on August 1 was 13.3 per cent below the ten-year av erage. However, good rains early in August im proved the situation for all crops except corn, most of which was too far advanced for the rain to help. Prospects for corn production declined during the month from a forecast of 23,780,000 bushels on July 1 to 17,220,000 bushels on August 1, a decrease of 28 per cent during July and 25 per cent less than 22.994.000 bushels harvested in 1931. Favorable weather during the balance of the season may help late corn to some extent, but the August 1 condition indicated the smallest yield since ISOl. Hay pros pects also were cut by the dry weather in July, and the forecast of 135,000 tons is 24 per cent less than 178.000 tons cut last year. South Carolina’s apple crop for this year is only 141,000 bushels, compared with 320,000 bushels gathered last year, and the 1932 peach crop of 704,000 bushels compares quite . unfavorably with 1,840,000 bushels in 1931. The*;, oat crop threshed out 7,974,000 bushels this year, compared with 9,450,000 bushels harvested in 1931.'' Wheat produced a larger yield this year than last, 703.000 bushels for 1932 comparing with 689,000 bushels in 1931, and this year’s sweet potato crotp of 4,200,000 bushels is 32 per cent above the sho rt crop of 3,180,000 bushels dug last year. West Virginia crops averaged only 847 per cent, of the ten-year average in condition on August 1, and prospects were for materially lower yields this year in nearly all crops. The forecast of corn produc tion for 1932 is 11,448,000 bushels, compared, with 12.934.000 bushels harvested in 1931. This year’s yield of wheat, 1,254,000 bushels, compares; with 2.373.000 bushels last year. Oats turned out 2,584.000 bushels this year and 3,552,000 bushels in 1931, and this year’s hay yield of 583,000 tons com pares with 650,000 tons last year. The Irish po tato crop this year is estimated at 3,120,000 bushels, which shows little change from 3,200,000 bushels last year. The West Virginia apple crop of 5,215,000 bushels is less than half the 1931 yield of 12,954.000 bushels, and the 1932 peach crop yielded only 176,000 bushels, in comparison with 1,030,000 bushels in 1931. 7 MONTHLY REVIEW Construction Building Permits Issued, Fifth District Cities, July 1932 and 1931 CITIES Permits Issued 1932 1931 929 Baltimore, Md..... 8 Cumberland, Md. 8 Frederick, Md..... 10 Hagerstown, Md. 12 Salisbury, Md..... 7 Danville, Va........ ..... 23 Lynchburg, Va...... 91 Norfolk, Va........... 3 Petersburg, Va...... 19 Portsmouth, Va. .... 104 Richmond, Va. ___ 27 Roanoke, Va............ 2 Bluefield, W. Va.... 84 Charleston, W. Va.. 14 Clarksburg, W. Va. 8 Huntington, W. Va. 21 Asheville, N. C.___ 19 Charlotte, N. C__ 18 Durham, N. C....... 36 Greensboro, N. C_ _ 5 High Point, N. C. 18 Raleigh, N. C, 5 Rocky Mount, N. C... 7 Salisbury, N. C_ _ 11 Wilmington, N. C.__ 33 Winston-Salem, N. C. 39 Charleston, S. C___ 29 Columbia, S. C.___ 23 C reenville, S. G __ 8 1 ock Hill, S. C.__ 6 Spartanburg, S. C... 410 Washington, D. C... District Totals ...... 2,037 Total Valuation 1932 1931 1,179 $1,022,400 8,710 20 9,928 15 4,635 12 5,200 30 5,888 11 115,665 32 103,030 151 622 7 5,765 35 77,198 140 12,670 29 36,500 5 20,613 40 5,240 12 2,890 13 8,395 26 4,605 50 41,050 21 9,694 29 5,800 20 8,169 18 845 9 13,225 6 5,950 17 11,250 84 30,834 47 30,600 56 12,575 21 5,335 15 1,177 17 648,570 590 $4,989,120 62,865 28,362 20,145 88,775 11,880 77,380 233,093 18,080 21,435 287,285 41,775 12,500 149,828 22,400 8,850 18,300 80,510 70,925 24,565 96.625 25,715 51,800 11,040 32,200 97,500 93,025 61,612 62,035 252,193 12,190 2,305,115 2,757 $2,275,028 Richmond Baltimore Washington Other Cities District July 1932 sales, compared with sales in July 1931: —29.0 —27.8 —27.1 —29.3 —27.8 Total sales Jan.-July 1932, compared with Jan.-July 1931: —21.2 —20.7 —162 —25.8 —19.5 July 31, 1932 stocks, compared with stocks on July 31, 1931: —12.9 —15.0 — 7.7 —19.4 —12.7 July 31, 1932 stocks, compared with stocks on June 30, 1932: — 7.2 —11.4 — 9.4 — 8.1 — 9.8 Number of times stock was turned in July 1932: .217 .207 .215 .153 .205 Number of times stock was turned since January 1, 1932: 1.987 2.001 2.088 1.406 1.964 Percentage of July 1, 1932, receivables collected in July: 26.5 21.5 26.5 21.2 23.7 $9,369,123 Building permits issued in July in thirty-two leading cities of the Fifth reserve district numbered 2,037, compared with 2,757 permits issued in July 1931, a decrease this year of 26.1 per cent, and estimated valuation figures for last month totaled only $2,275,028, a decrease of 75.7 per cent in comparison with valuation figures totaling $9,369,123 in July last year. Only three cities, Bluefield, W. Va., Lynchburg, Va., and Salisbury, N. C., reported high er figures for July 1932, and the three largest cities in the district, Baltimore, Washington and Rich mond, reported relatively small figures. Contracts awarded in July for construction work in the Fifth reserve district totaled $20,915,245, com pared with $17,449,102 reported for July 1931, ac cording to figures collected by the F. W. Dodge Corporation. Of the July 1932 awards, only $2,387,430 represented residential types of construc tion, compared with $5,354,157 for this class of work in July last year. Contracts for residential work made up only 11 per cent of all contracts awarded in July 1932, compared with approximate ly 31 per cent of July 1931 contracts. Retail Trade, 33 Department Stores Wholesale Trade, 62 Firms 22 # 9 Groceries Dry Goods 6 Shoes 13 Hardware 12 Drugs July 1932 sales, compared with sales in July 1931 —25.4 —41.3 —37.3 —38.6 — ^30.8 July 1932 sales, compared with sales in June 1932 • — 72 —16.7 —15.3 —26.6 —16.0 Jan.-July 1932 sales, compared with sales in Jan.-July 1931: —172 —29.1 —17.2 —21.2 —18.3 July 31, 1932 stocks, compared with July 31, 1931 stocks: ____ —12.2(8*) —262(4*) —31.7(5*) —12.3(7*) July 31, 1932 stocks, compared with June 30, 1932 stocks: — 3.3(8*) + 6.9(4*) + 8.1(5*) — 1.7(7*) ____ Percentage of July 1, 1932, receivables collected in July: 55.7(12*) 25.6(6*) 28.7(6*) 22.5(11*) 42.9(8*) (Compiled August 20, 1932) MONTHLY REVIEW 8 BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Volume of industrial output declined seasonally from June to July while factory employment and payrolls decreased by more than the usual seasonal amount. In July the general level of wholesale prices was about 1 per cent higher than in June, and in the first half of August prices of many lead ing commodities advanced considerably. Reserve bank credit declined somewhat in the four weeks ending August 17, reflecting chiefly a substantial growth in the country's stock of monetary gold. Production and Employment Industrial production declined by about the usual seasonal amount in July and the Board's index, which is adjusted to allow for the usual seasonal variations, remained unchanged at 59 per cent of the 1923-1925 average. Activity decreased season ally in the steel industry; by slightly more than the usual seasonal amount in the lumber, cement, news print, and meatpacking industries; and by sub stantially more than the seasonal amount in the automobile and lead industries. Output of shoes, which ordinarily increases in July, declined. At woolen mills activity increased by a substantial amount, and at silk mills there was a seasonal in crease in production. Activity at cotton mills de creased, as is usual in July, while sales of cotton cloth by manufacturers increased considerably. Output of coal increased from the low level pre vailing in June. Reports on the volume of factory employment and payrolls showed substantial declines from the middle of June to the middle of July. In the ma chinery, women's clothing, and hosiery industries, and at railroad repair shops, the number employed decreased by considerably more than the usual sea sonal amount, and at shoe factories the increase reported was smaller than usual. In the woolen goods industry a substantial increase in employ ment was reported. Value of building contracts awarded, as reported by the F. W. Dodge Corporation, continued at a low level during July and the first half of August. Prospects for many leading crops, including corn, spring wheat, potatoes, and tobacco, were reduced somewhat during July, according to the Depart ment of Agriculture. The estimated total wheat crop, based on August 1 conditions, is 723,000,000 bushels, a decrease of about 175,000,000 bushels from last year’s large crop, reflecting a reduction of 350,000,000 bushels in the winter wheat crop, offset in part by an estimated increase of 175,000,000 in the spring wheat crop. The first official cot ton estimate, as of August 1, was 11,300,000 bales, as compared with crops of 17,100,000 last season and 13,900,000 the year before. The indicated pro duction of corn is 2,820,000,000 bushels, substanti ally larger than the crops of the last two seasons and slightly larger than the five-year average. Distribution Volume of freight traffic decreased somewhat from June to July, and value of department store sales was substantially reduced. Wholesale Prices The general level of wholesale prices, as meas ured by the monthly index of the Bureau of Labor Statistics, advanced from 63.9 per cent of the 1926 average in June to 64.5 per cent in July. Between the middle of July and the third week of August prices of livestock and meats, which had previously advanced considerably, declined somewhat, while price increases were reported for many other lead ing commodities, including wheat, textile raw ma terials and finished products, nonferrous metals, hides, sugar, coffee, and rubber. Bank Credit The total volume of reserve bank credit out standing, which had increased by $850,000,000 be tween the end of March and the third week of July, declined by $95,000,000 in the four weeks to August 17, and in the same period member banks increased their reserve balances by $45,000,000. These changes reflected chiefly the addition of $95,000,000 to the country's stock of monetary gold and an inflow to the banks of $30,000,000 in cur rency. Total loans and investments of reporting mem ber banks in leading cities were $250,000,000 larger on August 17 than four weeks earlier. Total loans of these banks continued to decline throughout the period, while their investments increased substan tially, reflecting an increase in holdings of United States Government securities in connection with Treasury financing operations. Time deposits in creased by $95,000,000 and net demand deposits by $85,000,000. Money rates in the open m arket remained at low levels. Successive reductions brought the prevail ing rates on prime commercial paper to a range of 2-2% per cent in the first part of August.