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MONTHLY

REVIEW

o f Financial and Business Conditions

F ifth
Federal

Res e r v e
D is tric t

..... >3

nc

Federal Reserve Bank, Richmond, Va.

August 31, 1939

Summary of July Business Conditions
most years show a material decline in July, held up well
this year, actually exceeding June sales in both Carolinas
and probably in W est Virginia. A t wholesale, 205 firms
in leading lines sold an average o f 4 per cent less than in
June, but wholesale shoe sales registered a 60 per cent
seasonal increase in July.
Commercial failures were fewer in July than in either
June this year or July last year, and liabilities also de­
clined last month from the June total, but were higher
than liabilities in July 1938.

J U L Y is a between-seasons month, and trade and in­
dustry in many lines tend to decline to approximately
the year’s low levels, but business in July this year con­
tinued substantially above July 1938, and some o f the
seasonal declines were smaller than usual.
Employment in July and early August showed some
seasonal drop in industry, but held up unusually well in
coal mining and rose in construction and tobacco ware­
houses. Textile mills restricted operations about 7 per
cent in July to give vacations to employees and to over­
haul machinery and take inventories. Coal mines, busy
bringing depleted reserves back to normal, dug 6 per cent
more coal than in June. Building permits issued in the
Fifth district last month were 15 per cent above those
issued in the preceding month o f June, and contract
awards, while lower than in June, were higher than in
any other July since 1930. Tobacco markets which opened
in the South Carolina belt early in August gave employ­
ment to several hundred warehouse workers and handlers.

TE X T IL E POSITION IM PROVES

Demand for cotton textile products moderately in­
creased in July, and improved prices for some cloths
together with lower cotton prices widened mill margins.
The rayon industry was very active in July, and ship­
ments o f filament yarn to fabricators exceeded output
sufficiently to reduce reserve stocks o f yarn by 23 per
cent during the month.

TR A D E DECLINES SE ASO N ALLY
CROP CO N D ITIO N S A V E R A G E , OR BE TTER

Debits to individual accounts, reflecting transactions
passing through the banks o f 24 Fifth district cities, were
5 per cent less in July than in June, a slightly more than
normal decrease. Sales by department stores fell 32 per
cent in July below June sales, a drop o f approximately
seasonal proportions, and retail furniture sales declined 11
per cent in the same period. Automobile sales, which in

Weather in the Fifth district was generally too dry in
May and June, but in July and early August rains were
sufficient for all needs and on August 1 crops were in ex­
cellent condition, especially in the lower half o f the dis­
trict. Prospective production figures for this year are
tabulated at the end o f the Review.

BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT

Debits to individual accounts (24 cities).....
Sales, 30 department stores, 5th district......
Sales, 38 furniture stores, 5th district.............
Sales, 205 wholesale firms, 5th district...........
Registrations, new autos, 5th district............

$1,221,748,000
6,193,095
$
962,894
$
$ 11,667,000
19,962

Number of business failures, 5th district.......
Liabilities in failures, 5th district..................
Value of building permits, 30 cities................
Value of contracts awarded, 5th district.......
Cotton consumption, 5th district (B a les)....

$
$
$

Cotton price, 4 per lb., end of month...............
Print cloths, 3 8 in., 64x60s, end of month..
Rayon yarn shipments, U. S. (P ou nds).........
Rayon yarn stocks, U. S. (P ou nds)..............
Soft coal mined, U. S. (T o n s )........................




35
486,000
13,596,301
35,117,000
255,264
9.28
4.75
32,900,000
25,000,000
29,490,000

$1,290,739,000
9,143,340
$
1,084,706
$
$ 12,115,000
18,177
$
$
$

36
714,000
11,799,132
46,154,000
274,367
9.33
4.63
33,000,000
32,600,000
27,900,000

% Change
Mo. Year

July 1938

June 1939

July 1939

$1,133,054,000 — 5
6,139,736 — 32
$
811,409 — 11
$
$ 10,384,000 — 4
11,704 + 10
$
$
S

+
-f*
+
4+

8
1
19
12
71

56 — 3 — 38
440,000 — 32 + 10
6,949,405 + 15 4- 96
21,560,000 — 24 + 63
225,665 — 7 + 13
8.63
4.75
31,900,000
53,600,000
23,367,000

—
+

1 4- 8
0
3
0 + 3
— 23 — 53
+ 6 + 26

MONTHLY REVIEW

2
RESERVE BANK OPERATIO NS

Between July 15 and August 15, 1939, there was a
seasonal increase in circulation o f Federal Reserve notes
incident to opening o f auction tobacco markets in the
South Carolina belt. Increases in member bank reserve
deposits and in the Reserve bank's cash reserves also oc­
curred, but earning assets declined, chiefly due to ma­
turity of short term Treasury bills on which earnings were
negligible.
RESERVE BAN K STATEMENT ITEMS
Fifth District
000 omitted
Aug. 15
July 15
ITEMS
1939
1939
Discounts held ...........................
$
525
$
560
Foreign loans on gold .............
87
87
Open market paper ...................
23
24
Industrial advances .................
1,067
1,153
137,064
140,527
Government securities ...........
Total earning assets ...........
$138,801
$142,316
Circulation of Fed. Res. notes
202,007
196,706
257,993
Members’ reserve deposits . . .
243,945
Cash reserves .............................
364,133
377,097
74.01
72.16
Reserve ratio ................................

Aug. 15
1938
$
919
0
23
1,479
127,224
$129,645
195,186
223,113
339,717
73.52

LO ANS A N D INVESTM EN TS RISE

Forty-one reporting member banks in 12 Fifth district
cities reported moderate increases in loans and investments
between July 12 and August 9 this year, and on the latter
date both items were substantially larger than on August
10 last year. Reserve balances and demand deposits also
rose during the past month, and on August 9 were far
above figures a year ago.
SELECTED ITEMS— 41 REPORTING BAN KS
Fifth District
000 omitted
Aug. 9
July 12
ITEMS
1939
1939
$245,316
$241,625
Loans & discounts .................................
431,633
Investments in securities .....................
427,173
169,311
156,071
Reserve bal. with F. R. B a n k .............
20,411
21,631
Cash in vaults ..........................................
494,508
488,948
Demand deposits ......................................
200,308
200,133
Time deposits ............................................
0
0
Money borrowed ......................................

Aug. 10
1938
$229,385
377,223
147,415
18,425
439,826
198,683
0

D ep osits in 10 m utual savings banks in B a ltim ore d e ­
creased fr o m $220,303,545 on June 30 to $219,774,904
on Ju ly 31, but on the latter date e x ce e d e d deposits total­
in g $217,975,431 on Ju ly 31, 1938. A sm all declin e in
m utual savings banks deposits usually o ccu rs in Ju ly
becau se o f v acation w ith draw als.
FAILURES A N D LIABILITIES DECLINE
C om m ercia l in solven cies fo r the F ift h district and the
U n ited States w e re rep o rte d b y D u n & B r a d str ee t as f o l ­
lo w s :
PERIODS
July 1939 .............................
June 1939 ...........................
July 1938 .............................

7 months, 1939 ....................
7 Months, 1938 ....................

Total Liabilities
District
U. S.

35
56
56

917
952
1,038

$ 486,000
714,000
440,000

$ 14,150,000
11,609,000
14,761,000

366
374

7,480
8,099

$4,151,000
5,174,000

$107,833,000
153,733,000

E M P L O Y M E N T BE TTER T H A N SEASON AL
C h an ges in em p loy m en t p ro b a b ly abou t o ffse t each
oth er in Ju ly , w hereas u su ally som e net d ecrea se occu rs.
In du stria l em p loym en t d eclin ed m od era tely in Ju ly and
early A u g u s t, m a n y plants h a v in g re d u ced h ou rs or
c losed a fe w days f o r in v e n to ry ta k in g and m a ch in ery
overh au lin g.
C oal m in in g , at a lo w lev el in m id -su m m er in m ost
years, con tin u ed n ear the w in ter scale in J u ly becau se o f




Percentage change from
June 1039 to July 1939
In number
In amount
on payroll
of payroll
+ 0.8
+ 0.8
— 8.2
— 3.5
— 0.1
— 0.6
— 0.5
— 6.9
- f 1.9
+ 2.8
— 0.2
4 - 0.1

STATES
Maryland .................
Dist. of Columbia
Virginia .................
West Virginia
North Carolina . . .
South Carolina . . .

DEBITS F A L L M ORE T H A N SE A SO N A LLY

Debits to depositors’ accounts in 24 Fifth district cities
in July declined 5 per cent from June figures, a seasonal
decrease but o f slightly larger proportions than usual.
All 24 cities declined except Lynchburg, Raleigh, Green­
ville and Spartanburg. In comparison with July 1938
debits, those for July 1939 rose an average o f 8 per cent,
all cities increasing except five.
DEBITS TO IN D IVID U AL ACCOUNTS
Fifth District
24 CITIES

M U TU A L SAVINGS SHOW SUMMER DECLINE

Number of Failures
District U. S.

the necessity for rebuilding reserve stocks which were
depleted in April and May.
Opening o f tobacco markets in South Carolina and bor­
der North Carolina towns gave seasonal employment to
several hundred warehouse workers, and the demand for
construction workers continued to expand.
The following figures, compiled for the most part by
the Bureau o f Labor Statistics, show the trends o f em­
ployment and payrolls in the Fifth district from June to
July:

July
1939

Maryland
Baltimore .............
Cumberland .........
Hagerstown .........
Dist. of Col.
Washington ........
Virginia
Danville ...............
Lynchburg ...........
Newport News . .
Norfolk
...............
Portsmouth .........
Richmond, ...........
Roanoke . . . . . . . .
West Virginia
Charleston ...........
Huntington .........
Parkersburg
North Carolina
Asheville ...............
Charlotte .............
Durham .................
Greensboro ........
Raleigh .................
Wilmington .........
Winston-Salem . .
South Carolina
Charleston ...........
Columbia .............
Greenville ...........
Spartanburg
District Totals . .

000 omitted
June
July
1939
1938

% of Change
Month
Year

$ 346,938
8,878
8,962

$ 368,367
8,837
9,223

$ 324,984
7,950
9,099

— 6
0
— 3

+ 7
+ 12
— 2

266,293

294,531

242,216

— 10

+ 10

7,380
15,380
9,023
48,264
4,072
143,081
25,853

7,525
13,823
9,794
50,629
4,671
148,304
26,784

7,560
15,797
7,701
43,230
4,225
136,686
23,602

— 2
+ 11
— 8
— 5
— 13
— 4
— 3

_ 2
— 3
+ 17
+ 12
— 4
+ 5
+ 10

45,197
15,440
10,145*

46,403
15,761
9,756*

46,226
14,442

— 3
— 2
+ 4

— 2
+ 7

11,810
59,292
29,503
18,430
41,713
10,373
37,257

12,106
60,558
32,033
19,612
40,438
11,386
39,689

11,308
50,616
27,936
15,494
38,628
9,894
34,772

—
—
—
—
+
—
—

2
2
8
6
3
9
6

+ 4
+ 17
+ 6
+ 19
+ 8
+ 5
+ 7

15,757
24,901
18,298
9,653
$1,221,748

17,987
25,322
17,718
9,238
$1,290,739

15,003
22,654
15,095
7,936
$1,133,054

— 12
— 2
+ 3
+ 4
— 5

+ 5
+ 10
+ 21
+ 22
4 -8

A U TO M O B ILE SALES L A R G E

Sales o f new automobiles in the Fifth district held up
better than seasonally in July and continued far above
sales in the corresponding period last year. W est V ir­
ginia's apparent gain o f 155 per cent in July 1939 is not
accurate, since it contains many registrations wlhich were
filed but could not be cleared in June. Combined regis­
trations in that state for June and July show an increase
of 55 per cent over figures for the same two months last
year. Total sales in the district in the first seven months

3

MONTHLY REVIEW
of 1939 were exactly 50 per cent greater than sales in the
first seven months o f 1938. The following registration
figures for new cars were furnished by R. L. Polk & Co
o f Detroit:
REGISTRATION OF N E W PASSENGER CARS— NUMBER
STATES

- July
July
%
7 Months 7 Months
%
1939
1938
Change
1939
1938 Change
Maryland ...........
3,330
2,214
+ 50
23,976
15,799
+52
Dist. of Col. . . .
2,095
1,413
+ 48
16,170
10,712
+51
Virginia .............
3,797
2,435
+ 56
25,853
18,901
+37
West Va...............
3,393*
1,332
+155
13,939
10,123
+38
No. Carolina . . .
4,928
3,094
+ 59
27,347
17,774
+54
So. Carolina . . .
2,419
1,216
+ 99
15,330
8,480
+81
19,962
11,704
+ 71
122,615
81,789
+50
District ...........
* West Virginia figures for July 1939 contain a largenumber of regis­
trations which were filed but not cleared in
June.

CO N STRU C TIO N CONTINUES STRONG

materially, depending instead on frequent buying for im­
mediate needs.
Consumption of cotton by states in the Fifth district in
July 1939, June 1939, and July 1938, in bales, is shown
below :
COTTON CONSUMPTION
Fifth District
— Bales—
MONTHS
No. Carolina So. Carolina
July 1939 ...........................
143,266
100,757
147,640
117,442
June 1939 ...........................
July, 1938 ...........................
119,305
93,542
7 Months, 1939 ...................
7 Months, 1938 ...................

1,066,2,66
820,600

805,797
630,075

Virginia
11,241
9,285
12,818

District
255,264
274,367
225,665

78,790
76,636

1,950,853
1,527,311

LA R G E R A Y O N D ELIVERIES EXCEED PRO D UCTIO N

Building permits issued in 30 cities in July totaling
$13,596,301 showed increases of 15 per cent over $11,799,132 in June this year and 96 per cent over $6,949,405
in July last year, 19 o f the 30 cities reporting higher
figures last month than a year ago. Washington led in
July 1939 valuation with $6,255,495, Huntington was
second with $1,933,967, and Richmond third with $1,492,656.
Contracts awarded in the district in July totaling $35,117,000 were 24 per cent less than awards of $46,154,000
in June 1939, but 63 per cent above $21,560,000 in July
1938 awards. Figures collected by the F. W . Dodge
Corporation by states for July 1939 and 1938 on con­
struction contracts awarded are as follow s:

Shipments of rayon filament yarn to domestic consum­
ers in July totaled 32,900,000 pounds as compared with
33,000,000 pounds shipped in June and 31,900,00 pounds
in July 1938, according to figures given in the August
issue o f Rayon Organon. Shipments in July materially
exceeded production, and manufacturers’ stocks o f yarns
declined from 32,600,000 pounds to 25,000,000 pounds
during the month. On July 31, 1938, stocks totaled 53,600,000 pounds. One o f the large rayon producers has
been tied up since August 5 by a strike, thus further con­
stricting an already tight yard market. Rayon Organon
attributes the active demand for rayon yarn to ( 1 ) a
seasonal upswing in fabricators’ mill activity, ( 2 ) the
current silk price situation, and (3 ) an improved outlook
for general business fo r the remainder o f this year.

BUILDING CONTRACTS AW ARDED

CO TTO N PRICES EASIER

STATES
July 1939
Maryland
..................... ..
...........
$ 6,024,000
5,871,000
Dist. of Col.......................... ...........
Virginia
.............................. ...........
8,814,000
W est Virginia ................... ...........
6,137,000*
North Carolina ................. ...........
7,014,000
South Carolina ................. ...........
2,076,000
Fifth District
$35,936,000
* Includes some contracts outside Fifth district.

July 1938
$ 5,183,000
2,395,000
7,120,000
1,799,000*
2,932,000
2,382,000
$21,811,000

% Change

+ 16
+ 145
+ 24
+ 241
+ 139
— 13
65

RESTOCKING AIDS C O A L O UTPUT

In order to rebuild stocks o f coal which were depleted
during the April and May shut-down, mines in July con­
tinued to produce more coal than was consumed. Produc­
tion of 29,490,000 net tons of bituminous coal in July
1939 was 5.7 per cent above June output of 27,900,000
tons and 26.2 per cent above July 1938 tonnage of 23,367,000 tons. In this calendar year to July 31, production
o f 190,747,000 tons exceeded 174,001,000 tons last year
by 9.6 per cent.
Shipments of coal through Hampton Roads ports were
relatively large in June and July, and total shipments this
calendar year to August 12 amounted to 11,075,675 tons,
against 9,966,447 tons shipped to the same date last year.
POSITION OF C O TTO N TEXTILES IM PROVED

A seasonal reduction in textile mill operations in July
in combination with increased demand for many textile
products improved the position o f the industry. Some in­
creases in prices of several constructions occurred in July,
and the entire list was firmly maintained. Cotton prices
declined and widened mill margins from 9.84 cents in
June to 10.52 cents in July. At the end o f the 1938-1939
cotton season, mill sales o f cloth and yarn were running
about equal to output, with stocks o f cotton textiles in
channels of distribution comparatively small.
Neither
retailers nor wholesalers are disposed to increase stocks




Spot cotton prices on 10 Southern markets were lower
between the middle of July and the middle o f August
than in the preceding month, the price tension created in
June having been relaxed by withdrawal of approximately
400,000 bales of cotton from Government loan stocks.
In recent weeks the average price for middling grade up­
land cotton dropped from 9.58 cents per pound on June
23 to 8.95 cents on August 18, the latest date for which
official quotations are available.
The first condition report on the 1939 crop estimated
probable yield at 11,412,000 equivalent 500-lb. bales, a
decline of 4.4 per cent below 1938 production of 11,943,000 bales, but substantially above combined domestic and
export takings of cotton during the 1938-1939 year. In
addition, the new crop faces a carry-over o f 13,032,611
bales of cotton in the United States from earlier crops,
but if plans for exporting cotton can be carried out the
pressure of the surplus may be materially lightened. In
the Fifth district, production estimates for 1939 are much
higher than last year’s production, actual figures being
shown elsewhere in this Review,.
COTTON CONSUMED AND ON HAND
(Bales)
July
1939

July
1938

Fifth district states:

255,264
225,665
Cotton growing states:
381,164
442,138
Cotton consumed .....................
Cotton on hand July 31 in
681,708 1,036,748
Consuming establishments .
Storage & compresses ......... 11,586,745 9,569,117
United States:
448,453
521,405
Cotton consumed .....................
Cotton on hand July 31 in
1,262,532
861,656
Consuming establishments .
Storage & compresses ........ . 11,620,955 9,645,907
195,706
106,531
Spindles active, U. S................... . 21,915,363 21,915,394

6,860,246

5,747,978

4

MONTHLY REVIEW
W H OLESALE TRADE, 205 FIRMS

A U C T IO N TO BAC CO M ARKETS OPEN

LINES

Tobacco markets in South Carolina and border towns
in North Carolina opened on August 3. W hile official
averages have not been issued, unofficial figures indicate
that prices were approximately 26 per cent below opening
prices in 1938. However, farmers turned few tickets, and
on the whole appeared to feel that prices were as high as
could be expected. If the present relation o f 1939 and
1938 prices holds during the season, gross receipts by
growers of tobacco will probably exceed last year’s re­
ceipts, since the 1939 crop in the Fifth district is forecast
33 per cent above the 1938 yield, while opening prices
were down less than that figure. Some improvement in
prices was registered in August in the Carolinas over those
paid in July in Georgia and Florida.
TO B A C C O M A N U F A C T U R IN G DECLINES SEASO N ALLY

The Bureau o f Internal Revenue report shows tobacco
products manufactured in July 1939 and 1938. As usual,
all figures for last month were lower than corresponding
figures for June 1939, but cigarette and cigar production
exceeded production in July last year.

Net Sales
July 1939
compared with
Ju:ly
June
1938
1939
Auto Supplies (9) .........
Shoes (5) ..........................
Drugs (11) .......................
Dry Goods (8) .................
Electrical Goods (19) ..
Groceries (66) .................
Hardware (18) ...............
Indus. Supplies (11) . . .
Paper & Products (9). .
Tobacco & Products (8)
Miscellaneous (41) .........
Average, 205 Firms .

+ 13
+ 46
+ 5
+ 6
+ 47
+ 3
+14
+ 26
+ 5
+ 6
+ 5
+ 12

July 1939
Smoking & chewing
tobacco, pound's ...............
Cigarettes, number ...............
Cigars, number .......................
Snuff, pounds .........................

July 1938

23,674,676
14,259,801,810
427,533,137
2,571,218

24,812,074
13,784,357,840
420,510,372
2,731,960

%

Change
— 5
+ 3

4- 2
—6

Net Sales
Net Sales
Stocks
Jan. 1 to date
July 31, 1939
July 1939
comp, with compared with compared with
June
July
July
same period
1939
19i
38
last year
1938
Richmond (3) . . .
Baltimore (8) . . .
Wash ington (6) .
Other Cities (13)
District (30)

— .5
+
-7
-f- i*o
+ 2.9
+
.9

Same stores by
states, with 28
stores added:
Virginia (13) . . .
West Va. ( 10) . .
No. Carolina (8) .
So. Carolina (12)

+
+
+
+

+
+
+
+
-f

1.6
2.2
1.9
6.7

2.4
.7
4.0
3.8
2.6

+ 7.5
— 6.1
+ 2.8
+ 10.2
+ 1.0

Ratio July
collections
to accounts
outstanding
July 1

— .5
- 1 3 .4
— 5.9
— 6.2
— 7.9

31.0
32.8
27.2
27.2
29.5

3.0
1.9
.2
16.4
+
+
+

—

RETAIL FURNITURE

% Change in Sales, July and 7 Months :

Compared with
July 1938

STATES
Maryland, 10 stores ............. ............
Dist. of Col., 7 stores ......... .............
Virginia, 10 stores ............. .............
North Carolina, 3 stores . . .............
South Carolina, 7 stores . . .............

Compared with
7 Months 1938

+18

+

3

+18
+13
+ 9
+20

+

4

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

+19

+

Virginia .............
North Carolina
South Carolina
Maryland ...........
Virginia .............
West Virginia .
North Carolina
South Carolina
Maryland .........
Virginia .............
West Virginia
North Carolina
South Carolina
M aryland'...........
Virginia .............
West Virginia .
North Carolina
South Carolina
Maryland ..........
Virginia .............
West Virginia .
North Carolina
South Carolina

+ 18
+29
+ 4
+18

+

3
0
3

Maryland ...........
Virginia .............
North Carolina
South Carolina .

7

Individual cities:
Baltimore, 10 stores ...........
Columbia, 3 stores ............. ...........
Richmond', 5 stores ............. .............
Washington, 7 stores ......... .............

District,

38 stores*

* Totals Include one W . Va. store.




+ 10
+ 9
+ 22

+
+

4

66
56
79
38
71
89
41
60
59
84
65
64

COTTON (BALES)
% Change

Maryland ...........
Virginia .............
West Virginia .
North Carolina
South Carolina

SALES

+ 2
+ 27
+ 2
+ 23
— 2
+ 5
+ 10
— 2
— 1
0
— 2
+ 7

The following figures show forecasts o f production
based on August 1 conditions, compared with yields in
1938 and in the 10-year period 1928-1937, and percentage
changes in acreage this year over or under 1938. Yield
figures marked ( + ) were raised between July 1 and
August 1, and those marked ( — ) were lowered.

R E T A IL AN D W H O LESALE TR A D E
DEPARTMENT STORE TRADE

+ 11
+ 19
+ 1
— 6
+ 27
+ 5
+ 6
— 3
— 12
— 5
— 3
+ 5

Ratio July
collections
to accounts
outstanding
July 1

CROP FORECASTS

Acreage
TOBACCO PRODUCTS MANUFACTURED

- 6
+ 60
— 1
— 14
— 10
— 5
— 16
— 5
— 5
— 10
— 5
— 4

Stocks
July 31, 1939
compared with
July 31 June 30
1939
1938

Maryland .........
Virginia .............
West Virginia .
North Carolina
South Carolina .
Maryland ...........
Virginia .............
West Virginia .
North Carolina
Virginia .............
North Carolina
South Carolina

(Compiled August 2 1 , 1939)

Yield
1939

Yield
1938

— 15
20,000
12,000
— 11
489,000
388,000
0
810,000
648,000
W H EA T (BUSHELS)
— 18
7,334,000
9.420,000
— 10
7,946,000 +
8,52,6,000
— 10
2,030,000
2,340,000
— 10
4,972,000
5,440,000
+ 14
2,013,000
1,771,000
CORN (BUSHELS)
17,710,000
18,537,000
+ 1
0
36,166,000 +
34,775,000
13,978,000 +
12,640,000
+ 1
— 1
48,360,000 +
46,398,000
— 5
25,433,000 +
26,767,000
OATS (BUSHELS)
1,161,000
+ 5
1,312,000
+ 10
2,020,000 +
1,978,000
— 15
1,387,000
1,806,000
5,786,000
+ 4
5,566,000
11,750,000
+ 7
10,648,000
H A Y (TONS)
503,000 +
543,000
+ 1
967,000 +
1,138,000
+ 1
654,000
802,000
+ 1
— 1
810,000
863,000
447,000 +
431,000
+ 1
IH POTATOES (BUSHELS)
— 4
2,225,000 —
2,990,000
0
7,031,000 —
10,349,000
— 3
2,635,000 +
2,720,000
+ 10
8,091,000 —
8,690,000
+ 17
3,108,000
2,784,000
ET POTATOES (BUSHELS)
0
1,200,000 —
1,040,000
0
4,080,000 +
3,570,000
0
8,910,000 +
8,748,000
+ 5
6,900,000 +
6,468,000
TOBACCO (POUNDS)
27,667,000 +
+ 1
29,250,000
+ 16
126,310,000 +
98,906,000
— 6
2,175,000 +
2,208,000
+ 21
715,540,000 +
516,850,000
+ 20
118,750,000 —
98,800,000
APPLES, COMMERCIAL (BUSHELS)
1.550.000
1.419.000
7.800.000
7.268.000
4,000,000
3.227.000
580,000
480,000
PEANUTS (POUNDS)
+ 5
181,500,000
146.010.000
+ 5
285,200,000
249.075.000
+ 6
10,875,000
9,100,000

Yield
1928-1937
40,000
702.000
827.000
8.419.000
8 .7 6 4 .0 0 0

1.983.000
4.496.000
1.054.000
15.617.000
32.225.000
12.384.000
41.355.000
21.335.000
1.364.000
2.287.000
2.218.000
3 .9 0 6 .0 0 0

8.488.000
464.000
916.000
645.000
654.000
338.000
3.257.000
12.352.000
3.109.000
8.028.000
2.476.000
1.156.000
4.285.000
7.896.000
4.965.000
25.217.000
98.075.000
3.400.000
493,927,000
79.624.000
1.331.000
8.153.000
3.576.000
657,000
148.630.000
238.750.000
8,517,000

MONTHLY REVIEW, August 31, 1939

FEDERAL RESERVE BANK OF RICHMOND

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

In July industrial activity, seasonally adjusted, rose sharply and w as close
to the level reached last D ecem ber. P rices o f som e industrial m aterials increased
in recen t w eeks while those fo r agricultural products continu ed to decline.

INDUSTRIAL PRODUCTION

PRODUCTION

Index of physical volume of production, ad­
justed for seasonal variation, 1923-1925 average
—100. By months, January 1934 to July 1939.

FR EIG H T-C A R LOADINGS

Index of total loadings of revenue freight, ad­
justed for seasonal variation, 1923-1925 average
--100. By months, January 1934 to July 1939.

WHOLESALE PRICES

The B oa rd’ s index o f industrial production, a ccord in g to prelim inary re­
turns, advanced to 102 percen t o f the 1923-1925 average in Ju ly as com pared
w ith 98 in June and 92 in A p ril and M ay. The advance in Ju ly reflected chiefly
a considerable fu rth er increase in output o f iron and steel, w hich usually de­
clines at this season. Steel in got p rodu ction rose fr o m an average rate o f 52
percen t o f capacity in June to 57 percen t in Ju ly and in the first three weeks
o f A u gu st w as m aintained around 60 p ercen t w hich f o r the m onth w ould rep­
resent abou t the usual seasonal increase.
Lum ber p rodu ction show ed little
change in July, although a decline is usual.
In the autom obile industry output show ed a sharp seasonal curtailm ent
during July and the first h a lf o f A ugust, reflectin g preparations f o r the sh ift to
new m odel production w hich will be m ade a b ou t a m on th earlier this year than
in other recen t years. R etail sales o f new cars continued in excess o f p rod u c­
tion and dealers’ stocks w ere grea tly reduced. Plate glass production declined
sharply in July, follow in g a substantial increase in June.
Changes in output o f nondurable m anu factu res in July w ere la rgely o f a
seasonal nature. A t cotton textile mills and m eat-packin g establishm ents ac­
tivity show ed som ewhat less than the usual declines and a t sugar refineries
output increased from the low level reached in June. F lou r p rodu ction con ­
tinued in substantial volum e.
M ineral production expanded fu rth er in July as ou tpu t o f bitum inous coal
continued to increase and petroleum production, w hich had been reduced in
June, rose sharply. On A u gu st 14 the T exas R ailroad Com m ission ordered a
shutdown o f m ost Texas oil w ells fo r 15 days, begin n in g A u g u st 15, and sub­
sequently similar shutdowns w ere ordered in several oth er im portant oil p r o ­
ducing States.
V alue o f construction contracts, as reported b y the F. W . D odge C orpora­
tion, increased som ewhat in July, ow ing prin cipally to a small rise in contracts
fo r public projects. A w ards fo r residential w ork, both public and private, w ere
practically unchanged fr o m the June total.

EMPLOYMENT
F a ctory em ploym ent, w hich usually declines in July, w as m aintained this
year at ab ou t the June level and payrolls show ed a less than seasonal decrease,
accord in g to reports fr o m a num ber o f leadin g industrial States.

DISTRIBUTION
Sales at departm ent and variety stores in Ju ly show ed about the custom ary
seasonal decline. In the first h alf o f A u g u st departm ent store sales increased.
F reigh t-car loadings increased fu rth er fr o m June to July.
Loadings o f
coal continued to expand and shipments o f m iscellaneous freigh t, w hich usually
decline at this season, show ed little change.

COMMODITY PRICES
P rices o f m ost farm products and fo o d s declined fr o m the begin n in g o f
July to the middle o f A ugust. Som e industrial m aterials, prin cipally steel scrap,
n on ferrou s metals, and textile fab rics, show ed advances in this period, while
crude petroleum prices w ere reduced.

AGRICULTURE
Indexes compiled by the U. S. Bureau of Labor
Statistics, 1926=100.
By weeks, 1934 to week
ending August 12, 1939.

MEMBER BANK RESERVES
B IO S O P0U.ARS
ILL N F

1936

Wea'nesday figures of total member bank re­
serve balances at Federal Reserve banks; with
estimates of required and excess reserves, Janu­
ary 3, 1934, to August 16, 1939.




On A u gu st 1 prospects fo r m a jor crops w ere ab ou t the same as a m onth
earlier, accordin g to the D epartm ent o f A g ricu ltu re. The first official estim ate
on cotton indicated a crop o f 11,400,000 bales, som ew hat sm aller than last y e a r’s
crop and 2,400,000 bales less than the 1928-1937 average. W orld carry over o f
A m erican cotton , how ever, was estim ated to have been som ew hat larger on
A u g u st 1 than the record volum e o f a year ago.

BANK CREDIT
T otal loans and investm ents o f m em ber banks in 101 leading cities in­
creased substantially during the fo u r w eeks ending A u gu st 9, reflectin g chiefly
increases in holdings o f U nited States G overnm ent obligations and the purchase
by N ew Y ork banks o f a large share o f a new issue o f N ew Y ork State short,
term notes. C om m ercial loans continued to increase at N ew Y ork banks but
declined at banks in 100 other leading cities as corn and cotton loans that w ere
approach in g m aturity w ere taken over b y the C om m odity Credit C orporation
in a ccorda n ce with a standing agreem ent. D eposits at reportin g banks rem ained
at high levels.
E xcess reserves o f m em ber banks increased fu rth er to new high levels in
the latter part o f July and the first h alf o f A ugust, ow in g principally to gold
im ports and net Treasury disbursem ents, partly offset by a reduction in F ederal
Reserve bank holdings o f Treasu ry bills.

MONEY RATES
The average rate on new issues o f 90-day T reasu ry bills has increased
slightly in recen t w eeks and on A u gu st 10 was 0.032 percent. Prices o f T reasury
bonds show ed little change from the middle o f Ju ly to the m iddle o f A ugust.