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MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, C h a ir m 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______________________________________________________ AUGUST 31, 1934 RADE during the Summer was in actually awarded in the district last FIFTH FEDERAL RESERVE DISTRICT month totaled more than three times the main of seasonal proportions, the amount of contracts awarded in and basic conditions are improved. The the corresponding month last year. Federal Reserve Bank of Richmond’s Coal production declined in July in rediscounts declined farther during the comparison with June production, and past month, at a time when early mar was also smaller than output in July keting of agricultural products creates a need for additional funds in member 1933. Textile mills in the Fifth dis trict continued a policy of restricted banks, but this year banks have suffi cient funds of their own to finance operations in July, but increased pro crop marketing without calling on the duction in August in preparation for reserve bank for assistance. Circula Fall demand for textile products. Re tion of Federal reserve notes showed a tail trade in department stores was seasonal rise between the middle of about up to seasonal level during July, July and the middle of August, chief and averaged slightly more than 16 per ly due to the opening of tobacco mar cent above the dollar volume of trade kets in South Carolina. Regularly re in July last year. There was some fall porting member banks showed some reduction in their ing off in wholesale trade last month in comparison with loans during the past month, and at the same time re the same month of last year, especially in dry goods ported an increase in deposits. Debits to individual and shoes, but cumulative sales in the first seven months accounts figures in the banks of leading cities showed of this year were well ahead of sales in the first seven about the customary decrease in the five weeks ended months last year. In agriculture, prospects in the Fifth August IS in comparison with the preceding five weeks, reserve district are good this year. Production of many which contained quarterly and semi-annual payments crops is smaller than last year, due chiefly to acreage around July 1, and figures for the 1934 five weeks were reduction, but in most cases prices are sufficiently im 12.2 per cent larger than figures for five weeks ended proved to make smaller yields more profitable than August 16 last year. Commercial failures in the Fifth 1933 yields. For example, the cotton crop in the dis district in July were more numerous than failures in trict is smaller than last year’s crop, but at present June, but numbered 40 per cent less than failures in prices this year’s crop will bring growers more money. July 1933. Liabilities last month totaling $1,718,339 The same applies to the tobacco crop, but to an even exceeded both June 1934 and July 1933 liabilities, fig greater degree, early season prices being nearly twice ures for both earlier months being low. On the whole, as high as 1933 prices. All crops are good in Virginia the insolvency record in the district last month was sat and the two Carolinas, although prospects are not nearly isfactory, in spite of adverse comparison in liabilities so good in Maryland and West Virginia. Due to acre with those of July last year. Employment conditions age reduction, crops this year cost less to make than did not show any material improvement during July crops in any recent year. and early August. The chief large group of workers unable to obtain more or less steady employment is Reserve Bank Statement building tradesmen, but there are some indications of slight improvement in construction fields. Estimated The accompanying table shows the principal items valuation for building permits issued in leading Fifth of condition of the Federal Reserve Bank of Rich district cities in July 1934 exceeded valuation for per mond for three mid-month dates, August 15 and July mits issued in July 1933 by 31 per cent, and contracts 15, this year, and August 15 last year. During the MONTHLY REVIEW 2 000 omitted ITEMS Aug. 15 1934 July 15 1934 Aug. 15 1933 Rediscounts held --------------- $ 723 $ 833 $ 12,443 193 266 Open market paper------------193 60,258 Government securities -------- 103,563 103,563 Total earning assets---------- 104,479 104,589 72,967 Circulation of Fed, Res. notes.. 143,256 142,133 137,172 69,772 Members’ reserve deposits---- 124,049 118,274 160,843 Cash reserves-----....------------ 170,321 165,651 72.07 62.04 62.81 Reserve ra tio -------------------- ITEMS Aug. 15 1934 000 omitted July 11 Aug. 16 1934 1933 Loans on stocks and bonds (in cluding governments)_____ $ 57,103 $ 59,504 $ 61,433 All other loans______ ______ 103,585 106t999 112,353 Total loans and discounts.... 160,688 166,503 173,786 Investments in stocks & bonds 185,973 178,610 161,898 Reserve bal. with F. R. Bank.... 51,093 25,662 46,776 Cash in vaults_____________ 9,134 10,202 11,657 Demand deposits _________ 221,873 217,033 178,528 Time deposits ____________ 134,313 134,574 131,822 Borrowed from F. R. Bank._ 287 0 0 past month, changes in the items were small. Re discounts for member banks declined by $110,000, and total earning assets dropped by the same amount, no changes occurring in, holdings of open market paper and Government securities. Circulation of Federal reserve notes rose by $1,123,000 between July 15 and August 15, a seasonal increase of somewhat less amount than occurs in most years when South Carolina and border North Carolina auction tobacco markets open. Member bank reserve deposits rose by $5,775,000 dur ing the past month, carrying reserves farther in ex cess of, legal requirements. Aggregate cash reserves of the Federal Reserve Bank of Richmond increased by $4,670,000 between the middle of July and the mid dle of August, and the ratio of cash reserves to note and deposit liabilities combined rose about threequarters of a point. changes during the past month and the past year. It should be understood that the figures reflect condi tions on the report dates only, and are not necessarily the highest or lowest figures that occurred during the periods under review. Most of the items on the statement declined during the past month. Loans on securities decreased by $2,401,000, and all other loans, which are largely com mercial or agricultural, dropped by $3,414,0(5), giving a total decline in loans and discounts amounting to $5,815,000. Deposits rose during the month, an in crease of $4,840,000 in demand deposits contrasting with a slight drop of $261,000 in time deposits. Time deposits frequently decline somewhat during the vaca tion season. The reporting banks decreased their cash in vaults between July 11 and August 15 by $1,455,000. With the funds secured from repaid loans and increased During the year between August 15, 1933, and Au deposits, the reporting banks increased their invest gust 15, 1934, there were some material changes in the ments in securities by $7,363,000, and added $4,317,000 items on the statement. Rediscounts for member banks, to their aggregate reserve balance at the Federal Re which were very small a year ago, declined by $11,720,- serve Bank of Richmond. 000 to less than three-quarters of a million dollars at In comparison with condition figures for August 16, the middle of August this year, and the portfolio of 1933, those for August 15, 1934, show decreases of open market paper also dropped below the low figure of last year. On the other hand, the Bank increased its $4,330,000 in loans on securities and $8,768,000 in all holdings of Government securities by $43,305,000 dur other loans, a total drop in loans and discounts of $13,ing the year, this change bringing a net increase of 098,000. The reporting banks increased their reserve $31,512,000 in total earning assets. Circulation of Fed balance at the Federal Reserve Bank of Richmond by eral reserve notes increased by $6,084,000 over August $25,431,000 during the year, practically doubling last 15 last year. Member banks, apparently being unable year’s figure. They also increased their investments to invest their funds profitably in satisfactory securities, in stocks and bonds by $24,075,000, chiefly in Govern built up their reserve balances at the Federal Reserve ment securities. Cash in vaults on August 15 this Bank of Richmond to a very high point during the year, year showed an increase of $1,068,000 over the total this item on the statement rising by $54,277,000, most on August 16 last year. Total deposits rose by $45,of the amount being in excess of minimum legal re 836,000 during the past year, of which $43,345,000 was quirements. Total cash reserves of the Richmond re in demand deposits and $2,491,000 in time deposits. serve bank rose by $9,478,000 during the year, but the None of the twenty-eight banks were rediscounting at greatly increased deposit liability lowered the ratio of the reserve bank at the middle of August this year, cash reserves to note and deposit liabilities combined while two of them were borrowing a total of $287,000 a year earlier. by 9.26 points. Statement of 28 Member Banks The principal items of condition reported by twentyeight regularly reporting member banks in leading Fifth district cities are shown in the table for three dates, August 15 and July 11, 1934, and August 16, 1933, thus affording opportunity for comparison of the Time and Savings Deposits Time deposits in twenty-eight regularly reporting member banks and aggregate deposits in eleven mutual savings banks in Baltimore totaled $326,603,107 at the end of July 1934, a lower figure than $327,654,854 in time and savings deposits at the end of June this year but a higher figure than $318,066,733 at the end of July MONTHLY REVIEW last year. Both reporting member banks and mutual savings banks showed declines in time deposits during the past month, but both groups of banks increased deposits during the year. Debits to Individual Accounts CITIES 000 omitted Total debits, five weeks ended Aug. 16, Aug. 15, July 11, 1933 1934 1934 Asheville, N. C.-----Baltimore, Md. — .... Charleston, S. C.---Charleston, W. Va..... Charlotte, N. C.-----Columbia, S. C.------Cumberland, Md. — Danville, V a .-------Durham, N. C.------Greensboro, N. C.— Greenville, S. C-----Hagerstown, Md..... Huntington, W. V aLynchburg, Va.......... Newport News, Va... Norfolk, V a .--------Portsmouth, Va......... Raleigh, N. C______ Richmond, Va. -----Roanoke, Va............ Washington, D. C.— Wilmington, N. C.~.. Winston-Salem, N. C. $ 10,438 307,907 11,280 49,239 50,918 21,717 6,794 5,893 26,362 12,153 12,579 7,447 13,015 14,054 7,346 49,899 3,640 38,624 129,869 21,332 190,146 8,389 32,135 $ 9,722 310,958 12,907 61,268 52,688 19,235 8,329 6,018 25,081 12,264 13,968 7,822 14,168 16,210 7,672 48,799 4,197 30,325 138,521 22,705 222,132 8,931 35,617 District T otals---- $1,031,176 $1,089,537 $ 10,285 299,303 10,211 30,579 45,608 14,775 6,509 6,561 23,291 4,643 13,717 6,149 11,581 14,831 6,669 39,358 3,444 15,460 121,938 20,221 173,213 6.678 34*164 $ 919,188 Debits to individual, firm and corporation accounts in the banks in twenty-three trade centers in the Fifth Federal reserve district are shown in the accompanying table for three equal periods of five weeks, ended August IS and July 11 this year and August 16 last year. These figures reflect the volume of business which passed through the banks in the several cities during the periods under review. During the five weeks ended August 15 this year, aggregate debits to individual, firm and corporation accounts in the reporting cities totaled $1,031,176,000, a decrease of $58,361,000, or 5.4 per cent, under aggre gate debits in the preceding five weeks, ended July 11, 1934. A decline at this time is seasonal, due chiefly to large quarterly and semi-annual payments occurring in the earlier period, around July 1, and this year the decline was about normal. Five of the twenty-three cities reported higher figures for the more recent five weeks, these being Asheville, Columbia, Durham, Nor folk and Raleigh. A comparison of the figures reported for the five weeks ended August 15 this year with the figures for the corresponding period ended August 16,1933, shows an increase of $111,988,000, or 12.2 per cent. Nineteen of the twenty-three cities reported higher debits figures for the 1934 five weeks. The decreases reported for Danville, Greenville, Lynchburg and Winston-Salem were probably due in large part to restricted operations in the textile field, and were all small declines. 3 Commercial Failures The Dun & Bradstreet Monthly Review for August says that commercial failures in the United States in July numbered only 912, a decrease of 11.7 per cent under 1,033 insolvencies in June this year and 35.8 per cent fewer failures than 1,421 in July last year. Liabili ties in July 1934 totaled $19,325,517, compared with $23,868,293 in June 1934 and $27,481,103 in July 1933, decreases of 19.0 per cent during the month and 29.7 per cent during the year. In the Fifth Federal reserve district, the July insolvency record was less favorable than the National record, 61 failures in the district last month showing an increase of 32.6 per cent over 46 failures in June this year, although a decrease of 40.2 per cent under 102 bankruptcies in July 1933. Liabili ties in the Fifth district last month totaled $1,718,339, showing increases of 203.2 per cent over the very low total of $566,699 in June 1934 and of 36.1 per cent over $1,262,789 in July 1933. All of the twelve re serve districts reported fewer failures in July 1934 than in July 1933, and all except the Fifth district reported lower liabilities. In spite of the poor compari son of the Fifth district with others in July, the dis trict’s showing for the month was good, the number of failures being the smallest for any month back to No vember 1920, with the exception of three earlier months this year, March, April and June. Employment Employment conditions in the Fifth reserve district changed very little during July, and in August are rela tively good in comparison with the country as a whole. Throughout the United States there was an average decline in industrial payrolls of 6.8 per cent in June and July, but Virginia’s decline was only 7/10th of 1 per cent. Other Fifth district states compared favor ably with the Nation, although restricted operations in the textile industry affected payrolls in the Carolinas. There are a few local strikes in the district, and a general textile strike to begin September 1 has been threatened. Construction work is showing some signs of increased activity, but as yet no large number of building tradesmen have been reemployed. Coal Production Production of bituminous coal in the United States in July 1934 totaled 25,280,000 net tons, a smaller out put than 26,424,0001 tons dug in June this year and materially less than 29,482,000 tons mined in July 1933. Total production of soft coal during the present calendar year to August 11 amounted to 217,191,000 tons, a higher figures than 187,467,000 tons mined to the same date last year. The August 4 report of the Bureau of Mines, Department of Commerce, gave coal production figures by states for the month of June 1934. West Virginia mines were first in production in June with 8,140,000 net tons, Pennsylvania ranking second with 7,560,000 tons, and in the first half of this year West Virginia mined 50,994,000 tons against 48,369,000 4 MONTHLY REVIEW tons mined in Pennsylvania. In the first half of 1934 Hampton Roads ports shipped 9,624,106 net tons of bituminous coal, compared with 8,392,186 tons shipped in the first half of 1933. Stocks of coal in the hands of consumers increased during June, and at the end of that month were sufficient to last 37 days at current rates of consumption, compared with 30 days’ supply in consumers’ hands on July 1 last year. Textiles The textile industry continued the policy of restrict ing operations about 25 per cent during July, to pre vent accumulation of manufactured goods during the dull season, but output increased materially in August. Fifth district cotton mills consumed 165,504 bales of cotton last month, of which North Carolina mills used 83,987 bales, South Carolina mills used 72,114 bales, and Virginia mills used 9,403 bales. Fifth district mills used 161,616 bales in June 1934 and 274,957 bales in July 1933. July 1934 consumption in Virginia and the Carolinas was 46.05 per cent of National consumption, a higher figure than either 44.47 per cent of National consumption in June 1934 or 45.78 per cent in July 1933. On July 20, the Department of Commerce issued a report on spindles in place, spindles active in June, total spindle hours of operation in June, and average hours of operation per spindle in place in June. On June 30, 1934, there were 31,002,964 spindles in place in the United States, North Carolina leading all states with 6,146,708, or 19.8 per cent of the total, South Carolina ranking second with 5,787,270 spindles, or 18.7 per cent, and Massachusetts third with 5,703,956 spindles, or 18.4 per cent. The Fifth district as a whole had 40.6 per cent of total spindles in place in the United States at the end of June 1934. In actual spindle hours of operation, South Carolina led all states for June with 1,297,606,997 hours, or 24.7 per cent of the National total of 5,253,454,142 hours, and North Carolina ranked second with 1,095,515,492 hours, or 20.9 per cent. The Fifth district, with 40.6 per cent of total spindles in place in the United States in June, showed 48.1 per cent of total hours of opera tion. In actual hours of operation per spindle in place, South Carolina ranked first last month with 224 hours, Virginia with an average of 208 hours ranked second, and North Carolina with 178 hours ranked fourth, all of these being above the National average of 169 hours. Cotton Statistics Spot cotton prices for middling grade cotton on ten Southern markets advanced during the past month to a high of 13.45 cents per pound on August 10, but declined to 13.09 cents on August 17, the latest date for which official figures are available. On August 8 the Department of Agriculture’s first production fore cast of the season caused cotton to advance sharply, but since that time unfavorable factors have caused some recession. Reduced consumption and exports during the last two months of the 1933-1934 cotton year tended to reduce cotton prices, and the action of union labor representatives in authorizing their officers to call a strike of textile workers in the near future also affected cotton prices adversely. On the other hand, press dis cussion of the possibility of Government loans to en able farmers to hold 1934 cotton in the event of a pro longed strike has exerted a sustaining influence on the market. The Department of Agriculture’s first cotton con dition report, in which probable production in 1934 was forecast, was issued on August 8. Production was esti mated at 9,195,000 equivalent 500-pound bales, the smallest crop, except for that of 1921, since 1896, and about half a million bales less than most private ob servers had expected. Prospects for this year’s cotton crop are much poorer than the average for the past ten years, chiefly due to the disastrous drought in the Middle West. Per acre yield this year is forecast as materially lower than the ten-year average in all major cotton growing states west of the Mississippi River, while forecasts for all major states east of the river are higher. Conditions in Texas, Oklahoma and Arkansas are especially bad. The average condition of the crop on August 1 was 60.4 per cent of a theoretical normal and the prospective yield per acre was given as 160.9 pounds, both much lower figures than the ten-year average. The indicated yield of 9,195,000 bales com pares with 13,047,000 bales ginned from the 1933 crop, a decrease this year of 3,852,000 bales, or 29.5 per cent. In the cotton growing states of the Fifth reserve district, production this year is forecast to be less than last year, the decrease averaging 13.4 per cent in com parison with the National decline of 29.5 per cent. South Carolina’s crop this year is expected to yield 620,000 bales, a decline of 15.6 per cent under 735,000 bales ginned last year. North Carolina’s crop is fore cast at 606,000 bales, showing a decrease of 11.4 per cent from 684,000 bales grown last year. The Virginia cotton crop this year of 35,000 bales shows a drop of 5.4 per cent under 37,000 bales grown in 1933. Total figures for the district are 1,261,000 bales this year, compared with 1,456,000 bales picked last year. Con dition figures on August 1 were about the same in Virginia and North Carolina as on August 1 last year, but the condition of South Carolina cotton was not up to the 1933 level. All three Fifth district cotton grow ing states showed materially higher condition figures than the ten-year average. Consumption of cotton in the United States in July 1934 totaled 359,372 bales, compared with 363,414 bales used in June this year and 600,641 bales in July 1933. Total consumption for the cotton year ended July 31, 1934, amounted to 5,700,558 bales, compared with 6,137,395 bales consumed in the corresponding period of the 1932-1933 season. Manufacturing establish ments held 1,230,369 bales on July 31, compared with 1,326,480 bales held on June 30 and 1,348,236 bales on July 31, 1933. Public warehouses and compresses held 5,565,140 bales in storage at the end of July this year, compared with 5,985,715 bales so held a month earlier and 5,736,398 bales on July 31 last year. July exports totaled 305,820 bales, compared with 459,226 bales sent abroad in June 1934 and 692,007 bales exported in July MONTHLY REVIEW 1933. Exports during the cotton year ended July 31 totaled 7,534,415 bales, compared with 8,419,399 bales shipped over seas during the corresponding year ended July 31, 1933. Spindles active at some time in July numbered 24,417,682, compared with 24,690,312 in June this year and 26,085,300 in July 1933. Cotton consumption in the cotton growing states totaled 289,557 bales in July, compared with 292,621 bales used in June and 483,846 bales in July 1933. Last month’s consumption in the cotton growing states amounted to 80.6 per cent of National consumption, a higher percentage than either 80.5 per cent in June this year or 80.4 per cent in July last year. Of the 289,557 bales of cotton consumed in the cotton growing states in July, Fifth district mills used 165,504 bales, or 57.2 per cent, compared with 56.8 per cent of South ern consumption attained by Fifth district mills in July last year. Tobacco The tobacco crop in the Fifth district this year is estimated at 545,680,000 pounds on the basis of the August 1 condition, a decrease of 27 per cent under 1933 production of 748,327,000 pounds. Most of the lowered yield this year is due to reduced acreage, al though the August 1 condition of the crop, except in Virginia, was also lower than a year ago. West Vir ginia shows the poorest prospects, a condition of 44 per cent of normal on August 1 comparing with 63 per cent last year. Maryland’s prospective yield this year is 22,185,000 pounds, compared with 20,400,000 pounds in 1933 and a five-year average of 23,638,000 pounds. Virginia growers expect to harvest 78,745,000 pounds, against 97,046,000 pounds last year and a fiveyear average of 114,122,000 pounds. West Virginia, an unimportant tobacco state, will grow only about 3,000,000 pounds, while last year the state produced 4.322.000 pounds. North Carolina, the largest tobacco growing state in the country, has a crop forecast at 393.650.000 pounds, against 537,979,000 pounds in 1933 and a five-year average production of 506,763,000 pounds. South Carolina’s 1934 crop of 48,100,000 pounds is not much more than half last year’s yield of 88.580.000 pounds, and only 57 per cent of the fiveyear average crop of 83,820,000 pounds. Tobacco auc tion markets in South Carolina and border markets in North Carolina opened on August 9, and prices were nearly double opening prices last year. No official market averages will be available until next month, but the price has been running around 22 to 24 cents per pound against about 12 cents on the early sales in 1933. Lower grades of tobacco are reported as selling espe cially well. If present prices continue when the bulk of the North Carolina and all Virginia markets open, this year’s tobacco crop will bring the growers more money than their 1933 crop, in spite of the large re duction in acreage. Tobacco Manufacturing The Commissioner of Internal Revenue issued a re port on taxes collected in July 1934 on manufactured 5 tobacco products. July production of cigarettes in the United States numbered 11,355,398,860, compared with 9,526,101,183 cigarettes manufactured in July 1933. Smoking and chewing tobacco decreased from 25,977,179 pounds in July last year to 25,917,013 pounds in July this year. Cigars manufactured dropped from 400,511,453 in July 1933 to 378,055,584 in July 1934. Snuff production decreased from 2,805,228 pounds to 2,773,989 pounds during the year. During the month of July 1934, taxes on cigarettes totaled $34,068,307, compared with $28,579,841 collected in the correspond ing month last year. Taxes on smoking and chewing tobacco decreased during the same period from $4,676,012 to $4,665,394. Although taxes collected on all forms of tobacco except cigarettes in July this year declined in comparison with taxes in July 1933, the increased collections on cigarettes raised total receipts on tobacco products to the Federal Treasury from $34,784,236 in July 1933 to $40,199,326 in July 1934. Agricultural Notes In comparison with farmers in many other sections of the United States, Fifth reserve district farmers are in a very favorable position this year. Although acreage planted to cash crops was generally smaller than in any recent year, the condition figures for nearly all crops on August 1 compared well with five or tenyear averages. The extreme drought which has been so disastrous in the Middle West and Southwest did not seriously affect growing crops in the Fifth district except in West Virginia, but on the other hand higher prices for agricultural products which will probably result from the National shortage will directly benefit farmers along the Atlantic seaboard. With average August 1 conditions for 32 leading crops during the ten years 1921-1930 as a base, or 100, average con dition figures on August 1, 1934, were as follows in Fifth district states: Maryland 97.3, Virginia 101.5, West Virginia 74.0, North Carolina 107.4, and South Carolina 110.7. The average for the United States was 77.7. Maryland weather in July was hot and dry, and most crops deteriorated to a point below the ten-year aver age. Corn production, forecast on August 1 at 14,420.000 bushels, shows declines from 16,480,000 bush els forecast on July 1 and 16,240,000 bushels harvested in 1933. The average production of com in Maryland for five basic years 1927-1931 was 15,187,000 bushels. Wheat turned out better than anticipated, a yield of 7.852.000 bushels comparing with the July forecast of 7.277.000 bushels and the 1933 yield of 6,320,000 bush els. The five-year average production is 9,375,000 bushels. Oats turned out 1,144,000 bushels, a decline from 1,188,000 bushels forecast last month but above 1933 production of 1,100,000 bushels. There was no change in the hay forecast of 524,000 tons last month, but a slight decrease is indicated from 529,000 tons cut last year. Hay is the only Maryland crop which prom ises a larger production in 1934 than the five-year aver age yield. Pastures declined in condition last month from 80 per cent on July 1 to 49 per cent on August 1. The Maryland Irish potato crop of 3,038,000 bushels 6 MONTHLY REVIEW this year is about 12 per cent above 2,700,000 bushels j 4,602,000 bushels the five-year average. The comdug in 1933, but is approximately 17 per cent below the I mercial apple crop based upon August 1 condition is 1927-1931 average yield of 3,646,000 bushels. Pros J estimated to be 1,680,000 barrels, compared with the pects for sweet potatoes are for less than half an aver short crop of last year of 1,750,000 barrels, and the age crop and more than 200,000 bushels below the five-year average production of 2,680,000 barrels. The 1933 yield. The forecast for 625,000 bushels this year number of apples on the trees this year is considerably compares with 840,000 bushels dug last year and a five- less than last, but owing to the poor quality of last year’s year average of 1,493,000 bushels. Maryland’s com crop a much smaller percentage than usual was sold as mercial apple crop of 492,000 bushels is much smaller fresh fruit. The quality of this year’s crop is unusual than last year’s small crop of 657,000 bushels and only ly good and there has been practically no injury from about a third of the five-year average yield of 1,355,000 scab and aphis. However, in some sections there has bushels. been some worm damage. Weather conditions have been favorable except in the Shenandoah Valley where Virginia crop conditions improved during July in all dry weather during July retarded growth. The com parts of the state except in the Shenandoah Valley and mercial peach crop is very light in most sections of the in a few counties in the Northern district. The great state, but in the Piedmont district there are some heavy est change was reported from the Southwestern dis crops of excellent quality. trict where rains caused rapid improvement following West Virginia crops suffered materially from dry and the drought during May and June. The production of many crops, such as corn, tobacco, peanuts and cotton hot weather in July, and nearly all crops declined in still depends upon weather conditions during the next condition. The com crop on August 1 showed a con six weeks. The August 1 forecast of production for dition of 69 per cent of normal, 10 points lower than wheat, rye, barley, white potatoes and sweet potatoes is the condition a month earlier. The crop is estimated greater than a year ago, but the estimate for oats, at 10,464,000 bushels, compared with last year’s crop tobacco, cotton, hay and fruit crops is below last year. of 13,920,000 bushels. The average yield per acre this The yield of wheat is estimated at 7,784,000 bushels, year of 24 bushels compares with a 30 bushel yield in compared with 7,425,000 bushels harvested last year 1933. Final threshing returns indicate that the pro and the five-year average of 9,582,000 bushels. The duction of wheat exceeded earlier expectations. Indi best yields are reported from the Shenandoah Valley. cated production is 1,836,000 bushels this year, com Corn prospects indicate production to be 34,680,000 pared with 1,798,000 bushels harvested last year. The bushels, which is slightly less than last year’s crop of 1933-1934 winter season was favorable for the wheat 36.918.000 bushels but is above the five-year average of crop and although the spring drought caused the heads 33.611.000 bushels. The condition of late hay crops and straw to be shorter than usual, the heads were more improved during the latter part of July and in most compact and threshed out larger yields that was ex sections these crops now promise excellent yields. Ow pected. The 1934 oats crop in West Virginia is the ing to the dry weather during May and June the yield smallest in the past 26 years. Production is estimated of clover and timothy, which supply the greater part at 1,960,000 bushels, compared with 2,356,000 bushels of the hay crop, was reduced. Total production of all harvested in 1933 and a five-year average of 3,352,000 hay is estimated to be 854,000 tons, compared with bushels. Except in a few choice locations, most of the 992.000 tons last year and the five-year average of acreage planted to oats this year suffered from drought 921.000 tons. The condition of pastures declined dur from the time of seeding until the crop was cut. Dry ing July because of dry weather in many sections. The weather caused poor seed germination and stands were late July rains, however, caused great improvement, spotted. The potato crop in West Virginia was quite especially in the Central part of the state. Pastures are disappointing. With an August 1 condition of only 54 very poor in the Shenandoah Valley and a few North per cent of normal, the indicated production of Irish ern counties, but in the Eastern and Southwestern dis potatoes is 2,660,000 bushels, nearly a million bushels tricts pastures are in splendid condition. The August 1 short of the five-year average production, but 300,000 condition of peanuts was 85 per cent of normal, com bushels larger than the very short crop in 1933. Ex pared with 82 per cent last year. Vines have made tremely hot weather killed potato vines in many fields rapid growth and generally have an excellent color. As before the crop had matured. Hay was in poor con the yield usually depends upon weather conditions from dition on Augst 1, and the indicated production was about August 10 to September 15, the August 1 con only 368,000 tons, compared with 690,000 tons cured dition is not a reliable indication of the final yield. last year. The apple crop from both farm and com Early commercial potatoes turned out unusually well mercial orchards is estimated at 3,220,000 bushels. The and total shipments through August 4 amounted to commercial crop of 1,764,000 bushels compares with 16,542 cars, compared with 9,819 cars shipped for the 2,100,000 bushels harvested in 1933 and 3,918,000 bush entire season last year. The total production of po els the five-year average production. Peach produc tatoes, including both early and late crops, is forecast tion is only 66,000 bushels, compared with 396,000 at 13,803,000 bushels compared with 8,649,000 bushels bushels in 1933. last year and 15,989,000 bushels the five-year average North Carolina crop conditions on August 1 were not production. Sweet potatoes indicate a yield above aver nearly as ideal as farmers might wish, but the indicated age and the total production is forecast at 4,080,000 combined yields on 32 important crops show the state bushels, compared with 3,885,000 bushels last year and ranking fifth highest of all states in average conditions. MONTHLY REVIEW The corn crop in North Carolina is very good. Pros pects in the Eastern and Mountain counties are excel lent, with drier seasons experienced in the Piedmont counties. The crop indicated at 48,048,O X bushels is 8 C) per cent more than 44,252,000 bushels harvested in 1933 and 15 per cent larger than the past five years’ average crop of 40,713,000 bushels. Wheat turned out well in North Carolina this year, and a yield of 4,253,000 bushels exceeded both last year’s yield of 3,714,000 bushels and the five-year average production of 3,661,000 bushels. The oats crop of 3,440,000 bushels also exceeded both last year’s and the five-year average yield. Irish potatoes yielded 10,324,000 bushels this year, compared with 7,315,000 bushels in 1933 and average production for 1927-1931 of 7,573,000 bushels. A sweet potato crop this year of 7,885,000 bushels is slightly less than the 1933 crop of 7,905,000 bushels, but exceeds the five-year average production of 6,794,000 bushels. The August 1 condition of 80 per cent indicates a hay crop of 629,000 tons. The condition is 17 points higher than that of last August and the pros pective yield is 14 per cent larger. Pasture conditions have been good since the 1st of June, and water supply and pasturage excellent over most of the state. The peanut condition is generally regarded as being good in commercial areas. Stands are average or better. How ever, developments during August and early September will determine the final outturn of the crop. The North Carolina apple crop was damaged heavily by late winter freezes. The 3,300,000 bushel crop indicated on Au gust 1 is about equal to the five-year average but is 37 per cent below the 1933 crop. The peach crop is con siderably above an average this year, a crop of 2,210,000 bushels being indicated, which is about 5 per cent above the 1933 yield and 19 per cent above the fiveyear average. South Carolines composite condition figure for 32 important crops on August 1 was 110.7, the third high est figure in the United States, only Georgia and Ala bama showing higher average conditions. Due to the Western drought the yield prospects for the entire country show only 77.7 per cent of normal. Prospects for total outturn in South Carolina are below average, in spite of fine per acre yields, due to reductions in acreage in cotton and tobacco and only a fair corn yield. Com improved during July, but on August 1 the indicated production of 21,324,000 bushels was be low the 1933 yield of 22,808,000 bushels, although above the five-year average of 21,215,000 bushels. Wheat yielded 765,000 bushels this year, a much larger figure than last year’s crop of 592,000 bushels or the five-year average production of 546,000 bushels. This year’s crop of oats totaled 6,596,000 bushels, compared with 7,215,000 bushels last year and a five-year aver age of 8,117,000 bushels. The 1934 hay yield of 206,000 tons exceeded last year’s yield of 195,000 tons, and is also above the five-year average of 183,000 tons. Pastures showed an August 1 condition of 69 per cent, compared with a condition of 68 per cent a year earlier and 76 per cent the five-year average. Peanuts on Au gust 1 were 65 per cent of normal, compared with 71 *r cent last year and the average for five years of 74 ; cent, but it is yet too early to judge the peanut crop. 7 A sweet potato crop of 4,275,000 bushels is below the 1933 yield of 4,648,000 bushels but exceeds the fiveyear average crop of 4,247,000 bushels. Irish potatoes promised a crop of 2,625,000 bushels on the basis of the August 1 condition, a much higher yield than last year’s 1,744,000 bushels, but materially less than 2,944,000 bushels the five-year average. South Carolina’s peach crop for 1934 of 1,564,000 bushels is slightly | below the 1933 yield of 1,633,000 bushels, but is tetter than the five-year average production of 1,172,000 bushels. Apples promise a yield of 244,000 bushels, compared with 279,000 bushels in 1933 and a fiveyear average yield of 271,000 bushels. i Construction Building Permits Issued in July 1934 and 1933 CITIES Permits Issued 1934 1933 Total Valuation 1934 1933 664 5 15 14 10 21 14 72 4 19 93 27 10 25 5 15 19 22 31 24 11 7 3 11 52 36 37 21 9 19 472 120 17 19 21 16 28 23 13 12 3 9 37 36 30 18 14 16 528 $ 678,120 $ 464,640 900 3,748 19,320 2,710 25,425 17,745 26,375 35,510 17,995 4,101 7,535 66,340 51,492 90,065 9,062 910 10,390 22,655 140,185 170,292 7,737 16,957 8,165 7,375 10,893 42,216 1,225 8,400 27,450 10,525 18,603 14,328 85,538 30,295 81,585 74,925 31,497 13,361 3,868 19,200 2,000 15,950 1,280 4,150 3,605 13,865 24,315 18,530 48,907 17,353 58,828 19,246 15,275 12,355 3,675 11,325 14,024 4,000 875,390 525,320 District Totals---- 1,787 1,865 $2,310,659 $1,758,392 Baltimore, Md. —...Cumberland, Md....... Frederick, Md......... . Hagerstown, M d .__ Salisbury, M d.____ Danville, V a .-------Lynchburg, V a .-----Norfolk, Va.............. Petersburg, Va. _ _ Portsmouth, Va........ Richmond, V a.____ Roanoke, Va............ Bluefield, W. Va___ Charleston, W. Va— Clarksburg, W. Va.... Huntington, W. Va... Asheville, N. C.____ Charlotte, N. C.___ Durham, N. C.____ Greensboro, N. C.— High Point, N. C.....~ Raleigh, N. C._____ Rocky Mount, N. C Salisbury, N. C-----Winston-Salem, N. C Charleston, S. C.___ Columbia, S. C.____ Greenville, S. C.---Rock Hill, S. C, Spartanburg, S. C.__ Washington, D. C..... 596 5 9 18 13 10 30 80 3 23 90 21 7 Building permits issued in July in thirty-one leading cities of the Fifth reserve district numbered 1,787, com pared with 1,865 permits issued in July, 1933, a de crease this year of 4.2 per cent, but estimated valuation figures for last month totaled $2,310,659, an increase of 31.4 per cent in comparison with valuation figures totaling $1,758,392 in July last year. Seventeen of the 31 reporting cities showed higher valuation figures for the 1934 month. Among the five largest cities, Balti more, Washington and Charlotte increased, while Rich mond and Norfolk decreased. Contracts awarded in July for construction work in the Fifth reserve district totaled $18,091,724, compared with only $5,479,294 reported for July 1933, according to figures collected by the F. W. Dodge Corporation. MONTHLY REVIEW 8 Of the July 1934 awards, $2,365,979 represented resi dential types of construction, compared with $2,325,924 for this class of work in July last year. Contracts for residential work made up only 13 per cent of all contracts awarded in July this year, compared with 43 per cent of July 1933 contracts. Retail Trade, 31 Department Stores__________ W holesale Trade, 57 Firms Richmond Baltimore Washington Other Cities District July 1934 sales, compared with sales in July 1933: +11.5 +10.9 +22.6 +21.8 +16.4 Jan.-July 1934 sales, compared with sales in Jan.-July 1933: +22.0 +17.1 +19.1 +28.1 +19.5 July 31, 1934, stocks, compared with stocks on July 31, 1933: +19.8 + 6.1 — 3.3 + 4.6 + 3.3 July 31, 1934, stocks, compared with stocks on June 30, 1934: — 8.0 — 8.0 — 7.0 — 7.4 — 7.5 Number of times stock was turned in July 1934: 251 224 242 .219 233 Number of times stock was turned since January 1, 1934: 2207 1.949 2.154 1.907 2.052 Percentage of July 1, 1934, receivables collected in July: 27.1_______28.6 27.0 27.4 27.6 Note: Sales and stock changes are percentages. 20 7 6 13 11 Groceries Dry Goods Shoes Hardware Drugs July 1934 sales, compared with sales in July 1933: + 62 —32.4 — 9.4 + 7.4 +15.4 July 1934 sales, compared with sales in June 1934: —16.5 + 9.6 +42.4 —113 — .1 Jan.-July 1934 sales, compared with sales in Jan.-July 1933: +22.3 +26.4 +162 +39.0 +21.7 July 31, 1934, stocks, compared with stocks on July 31, 1933: + 1.6(8*) +35.5(3*) +32.5(4*) / +20.0(7*) ___ July 31, 1934, stocks, compared with stocks on June 30, 1934: + 3.5(8*) + .4(3*) +15.4(4*) +8.3(7*) Percentage of July 1, 1934, receivables collected in July: 76.5(11*) 40.9(4*) 59.5(5*) 36.4(11*) 56.6(7*) ♦Number of reporting firms. All figures in the table are percentages. (Compiled August 21, 1934) BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Industrial production declined in July. Factory employ D is tr ib u tio n ment and payrolls also decreased. Diminished output of steel Total volume of freight-car loadings declined in July, re was the chief factor in the decline of industrial activity chiefly a reduction in miscellaneous which was larger than is usual at this season of the year. flecting steel shipments, offset in part by an freight, in cluding The general level of wholesale commodity prices showed shipments of livestock. Department store salesincrease in little net change for July and advanced in the first three decrease of somewhat more than the estimated showed a seasonal weeks of August. amount. P r o d u c tio n a n d E m p lo y m e n t Volume of industrial output, as measured by the Board’s seasonally adjusted index, decreased from 83 per cent of the 1923-25 average in June to 76 per cent in July. This decline reflected chiefly a sharp reduction in the output of steel, due in part to previous accumulation of stocks by consumers; and there was a further decline in steel operations during the first three weeks in August. Activity in the automobile industry decreased and there were considerable reductions in the output of pig iron and anthracite. At textile mills, where operations had been at a low level in June, activity showed little change in July. Output of shoes showed a seasonal increase. Accompanying heavy marketings of cat tle from drought areas there was a considerable increase in activity at meatpacking establishments. Factory employment decreased between the middle of June and the middle of July 3 per cent, an amount larger than is usual at this season. There were reductions in many industries producing durable manufactures, such as iron and steel products and building materials, and also at establish ments producing knit goods and women’s clothing. At can ning establishments the number of employees increased by less than the usual seasonal amount. Employment on public projects increased further in July. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, was about the same in July as in June. Department of Agriculture estimates, based on August 1 conditions, indicate that yields per acre for principal crops are 22 per cent smaller than the ten-year average, reflecting the effects of the drought. The wheat crop is estimated at 491,000,000 bushels, 37,000,000 bushels less than last year’s small harvest, and the corn crop at 1,607,000 bushels, as compared with a five-year average of 2,516,000,000 bushels. The cotton crop estimate is 9,195,000 bales, about 4,000,000 bales less than last season and smaller than in any other year since 1921. C o m m o d ity P r ic e s Wholesale prices of farm products, after fluctuating widely in July, advanced considerably in the first three weeks of August. Between the beginning of July and the third week of August, cotton, wheat and hog prices showed substantial increases while cattle prices declined somewhat. During this period prices of commodities other than farm products and foods as a group showed little change. B a n k C r e d it Member bank reserve balances increased further between the middle of July and the middle of August and on August 15 were about $1,900,000,000 in excess of legal requirements. The increase in reserve balances reflected principally a fur ther growth in monetary gold stock off-set in part during the first half of August by a seasonal increase in the total volume of money in circulation. The volume of reserve bank credit showed little change. In the four weeks ending August 15, loans and invest ments of New York City banks decreased by $141,000,000, while those of weekly reporting banks in other leading cities increased by $116,000,000. The decrease at New York banks reflected a reduction of nearly $200,000,000 in loans to brok ers and dealers in securities, following a sharp decline in security prices in the latter part of July, and a decline of $52,000,000 in holdings of United States Government securi ties. All other loans and holdings of securities other than United States Government obligations increased substan tially at New York banks and at banks outside New York City. At outside banks holdings of United States Govern ment securities also increased. Average rates of discount on United States Treasury bills issued rose from .07 per cent in July to .23 per cent on August 22. Other open-market money rates remained vr changed at low levels.