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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 Smoking & chewing tobacco, pound's ............... Cigarettes, number ............... Cigars, number ....................... Snuff, pounds ......................... July 1939 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 19i38 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 + 7 Individual cities: Baltimore, 10 stores ........... Columbia, 3 stores ............. ........... Richmond', 5 stores ............. ............. Washington, 7 stores ......... ............. + 18 +29 + 4 +18 + 3 0 3 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 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 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 ............. North Carolina South Carolina . 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 BILLIONS OF P0U.ARS 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.
@FedFRASER