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MONTHLY REVIEW o f Financial and Business Conditions F if t h F ederal Reser ve District August 31, 1940 Federal Reserve Bank, Richmond, Va. Summary of July Business Conditions capacity, and in some plants preparations for expansion o f facilities were pushed. Miscellaneous manufacturers are in general operating more nearly full time than in many months. BUSINESS in July in the Fifth Federal Reserve dis None o f the leading indicators declined more than seasonally, and most of them registered better results than is ex pected at this time o f year. In comparison with July 1939, last month showed substantial improvement in nearly all lines. Probably a considerable part o f the in creased activity is due either directly or indirectly to the preparedness program. Distribution of goods to consumers continued higher than a year ago, but showed some seasonal decline from June. Department store sales dropped 9 per cent from the previous month, July usually being a relatively poor month in wearing apparel and piece goods, but averaged 14 per cent more than sales in July last year. Furniture stores also reported a 9 per cent decline in last month’s sales under June sales, but gained 10 per cent over sales in July 1939. Wholesale firms in a dozen or more lines sold more than in either June this year or July last year, and registration o f new passenger automobiles in July also exceeded those in either June 1940 or July 1939. In industry, developments during July were somewrhat conflicting. Textile mill activity declined slightly from the level of the preceding month, and production exceeded sales of textile products. On the other hand, rayon manufacturers shipped more yarn than they made, and further reduced already small reserve stocks. Coal mines increased output further, and production during July was 23 per cent higher than production o f coal in July last year. Shipyards and airplane plants operated at B ' trict was above seasonal level 011 the whole. Construction expanded sharply in July. Building per mits issued in 31 Fifth district cities rose 32 per cent above June in valuation, and were 4 per cent higher than figures for July 1939. Contract awards in the district in July nearly doubled June figures, and were 63 per cent above awards in July last year. Storms and floods around mid-August did serious dam age to some crops, the extent o f which is yet undeter mined. Weather in July was favorable for plant growth, and on August 1 prospects for generally satisfactory yields were good. Cotton overcame in July much o f the late start, and a larger yield than in 1939 is now forecast for the Fifth district. The 1940 tobacco crop will be between 40 and 45 per cent smaller than the 1939 crop, but the reduction is due chiefly to a smaller acreage this year. Tobacco markets already open are selling tobacco at prices slightly higher than opening prices last year, which must be considered satisfactory in view of the large carry-over of tobacco from previous seasons and absence o f foreign demand due to disturbed European conditions. Prospective purchasing power for fall and winter trade should be about the same in cotton grow ing sections as a year ago, but cash income in tobacco sections will probably be substantially smaller, in spite o f Government payments to compensate partly for acre age reduction. BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT July 1940 Debits to individual accounts (25 cities)... Sales, 31 department stores, 5th district... Sales, 37 furniture stores, 5th district...... Sales, 194 wholesale firms, 5th district... Registrations, new autos, 5th district........ $1:,408,226,000 7,099,101 $ 972,989 $ $ 10,041,000 24,724 Number of business failures, 5th district. Liabilities in failures, 5th district............... Value of building permits, 31 cities............ Value of contracts awarded, 5th district— Cotton consumption, 5th district (Bales).... $ $ Cotton price, # per lb., end o f month............. Print cloths, 39 in. 80x80s, end of month... Rayon shipments, U. S. (Pounds)........ .... Rayon stocks, U. S. (Pounds)...................... Bituminous coal mined, U. S. (T on s)......... 51 756,000 14,127,489 57,234,000 285,912 10.23 6.50 32,700,000 11,400,000 36,080,000 June 1940 July 1939 $1;,367,716,000 9,770,329 $ 1,074,064 $ 9,602,000 $ 24,135 $1,231,893,000 6,232.889 $ 883.882 $ 9,117,000 $ 19.962 $ $ ¥ 47 801,000 10,719,466 29,161,000 271,127 10.64 6.50 31,400,000 12,800,000 32,340,000 $ $ $ 35 486,000 13,635,565 35,117,000 255,264 9.28 32,900,000 26,400,000 29,391,000 Month Year 3 9 9 5 2 + 14 + 14 + 10 + 10 + 24 + 46 + 56 4- 4 4- 63 + 12 + 10 + — 4+ 9 6 4- 32 + 96 + 5 __ 4 0 + 4 11 + 12 + _ "l __ 57 + 23 MONTHLY REVIEW 2 BAN K IN G STATISTICS E M PLO Y M E N T EXPAN DS RESERVE BANK STATEMENT ITEMS Fifth District 000 omitted ITEMS August 15 July 15 1940 1940 Discounts held ............................................ Foreign loans on gold................................ Open market paper.................................... Industrial advances ................................... Government securities .............................. Total earning assets............................... Circulation of Fed. Res. notes................. Members’ reserve deposits....................... Cash reserves ................................................. Reserve ratio ................................................ August 15 1939 $ 560 87 23 1,067 137,064 138,801 202,007 257,993 377,097 74.01 $ 140 $ 158 0 0 0 0 790 871 122,470______122,624 123,400 123,653 231,824 230,463 304,162 319,933 493,514 481,759 80.35 80.13 SELECTED ITEMS— 41 REPORTING MEMBER BANKS Fifth District 000 omitted ITEMS August 14 July 17 August 16 1939 1940 1940 Loans & discounts........................................ Investments in securities........................... Reserve bal. with F. R. bank................. Cash in vaults................................................. Demand deposits ......................................... Time deposits .............................................. Money borrowed .......................................... $274,662 442,623 195,192 23,084 577,754 202,774 0 $272,357 412,811 211,504 21,615 578,646 202,412 0 $245,039 428,350 169,489 18,701 502,862 200,104 0 M UTU AL SAVINGS BANK DEPOSITS 10 Baltimore Banks Total deposits July 31 1940 June 30 1940 July 31 1939 .$222,693,076 $223,515,446 $219,774,901 DEBITS TO INDIVIDUAL ACCOUNTS Fifth District Dist. of Col. Washington 000 omitted June 1940 July 1940 CITIES July 1939 + o + 12 346,938 8,878 8,962 + + + 4 4 + 20 + 8 + 14 12,901 64,637 31,607 21,113 47,932 11,419 42,824 11,810 59,292 29,503 18,430 41,713 10,373 37,257 — — — + + — 3 1 3 6 5 5 6 + 12 + 8 + 4 + 7 + 20 + 16 + 8 21,642 27,673 17,946 10,386 15,757 24,901 18,298 9,653 — 7 - f 10 + 8 — 6 + 27 + 23 + 5 + 1 $ 299,105 $ 297,719 $ 266,293 Maryland Baltimore ............ Cumberland ......... Hagerstown ......... 415,299 9,608 10,190 389,042 9,253 9,802 North Carolina Asheville .............. Charlotte ............. Durham ................. Greensboro ........... Raleigh ................. Wilmington ......... Winston-Salem . . 13,284 63,979 30,647 19,776 50,205 11,992 40,162 South Carolina Charleston ........... Columbia ............. Greenville ........... Spartanburg . . . . 20,046 30,529 19,301 9,793 . . Virginia Danville ............... Lynchburg ........... Newport N e w s ... Norfolk ................. Portsm outh........... Richmond ............. Roanoke ............... % of Change Year Month + 7 8,289 14,598 12,338 53,127 4,815 149,636 28,608 7,380 15,380 9,023 48,264 4,072 143,081 25,853 — 16 + 6 + 11 + 9 + 2 + 4 — 2 West Virginiai Charleston ........... 54,179 51,572 17,422 18,136 Huntington ......... Parkersburg . . . . 10,598 10,701 $1,367,716 District Totals. . . . $1,408,226 + 0 indicates increase of less than % of 1%. 45,197 15,440 10,145 $1,231,893 + 5 — 4 — 1 6,948 15,426 13,640 58,013 4,906 155,127 28,051 -f 3 — 6 + o + 51 + 20 + 20 + 8 + 9 + 20 + 13 + 4 + 14 C O M M E R C IA L FAILU RES PERIODS Number of Failures District U. S. Total Liabilities District U. S. July 1940 ................................ June 1940 ................................ July 1939 ................................ 51 47 35 1,175 1,114 1,153 $ 756,000 801,000 486,000 $ 16,213,000 13,734,000 14,999,000 7 Months, 1940....................... 7 Months, 1939....................... 345 366 8,294 9,028 4,172,000 4,151,000 99,694,000 115,430,000 Source: Dun & Bradstreet. Such changes as occurred in employment in the Fifth district in July and the first half of August denoted fur ther demand for workers at once or in the near future, especially for labor in construction lines. Employment in coal fields is better than usual for this season, and cotton textile and rayon manufacturers continued opera tions last month at about the same levels as in June. Shipbuilding and airplane plants expanded further their need for skilled workers. A strike o f truck drivers in volving several hundred men is in progress in Richmond, but on the whole relations between employers and em ployees appear to be harmonious in the district at pres ent. The following figures, compiled for the most part by the Bureau o f Labor Statistics, show the trends of employment and payrolls in the Fifth district from June to July: Percentage change from June 1940 to July 1940 in number in amount on payroll of payroll + 1.6 — 0.1 — 2.4 — 2.1 — 16 — 0.9 — 0.4 — 0.2 + 1.1 + 2.3 + 2.6 + 1.3 STATES Maryland ............... Dist. of Columbia. V ir g in ia ................. West Virginia . . . North Carolina . . South Carolina . . A U T O SALES A B O V E SEASON AL LE V E L Automobile sales continue to show substantial advances over sales a year ago, and registrations o f new passenger cars in the Fifth district in July 1940 were larger than in any other July since 1936. W ith the exception of April this year, last month’s registrations exceeded those in any other month since June 1937, and the July 1940 figure was only exceeded 17 times in the past 187 months. Sales o f used cars have not kept pace with new car sales, but on the whole the market has been satisfactory and dealers are not generally burdened with excessive stocks. New car stocks were reduced further in July as manufacturers stopped or sharply reduced production o f 1940 models preparatory to the change-over to the 1941 line. Autom otive N ew s reports that eight manu facturers now have 1941 models on the production line. The following registration figures for new passenger cars were furnished by R. L. Polk & Co., o f Detroit : REGISTRATION OF N EW PASSENGER CARS— NUMBER STATES Maryland ............. Dist, of Col.......... West V ir g in ia .... North Carolina. .. South Carolina... District ............. July 1940 4,909 2,695 5,985 3,177 5,415 2,543 24,724 July 7 Months % 1939 Change 1940 31,753 3,330 + 47 2,095 + 29 17,799 3,797 + 58 34,590 3,393* — 6 20,487 4,928 + 10 32,071 2,419 17,738 + 5 19,962 + 24 154,438 7 Months 1939 23,976 16,170 25,853 13,939 27,347 15,330 122,615 % Change + 32 +10 + 34 + 47 + 17 + 16 + 26 C O N T R U C T IO N INCREASES Both building permits issued and contracts awarded in July increased sharply over those in June, and were also above permits issued and contracts awarded in July last year. Permits issued in 31 Fifth district cities totaled $14,127,489 in July, an increase o f 32 per cent over the $10,719,466 in June and 4 per cent above the $13,635,565 in July 1939. Washington led in valuation with $5,539,435 last month (Government work not included), followed by Baltimore with $3,258,536, Winston-Salem MONTHLY REVIEW with $734,000, Charleston, S. C , with $459,485, Rich mond with $422,989, Charleston, W . Va., with $414,170, and N orfolk with $406,965. Contracts awarded in the district in July 1940 totaling $57,234,000 were not only 96 per cent above June 1940 contracts and 63 per cent above those for July 1939, but were the highest amount for any month since April 1928, when the record of $66,591,000 was set. Last month’s contract awards were exceeded in only 3 months since complete district figures became available in June 1921. The high valuation o f contracts last month was chiefly due to publicly financed construction, partly as a result o f the preparedness pro gram. Figures collected by the F. W . Dodge Corporation by states for July 1940 and 1939 on contracts actually awarded in the Fifth Reserve district are as fo llo w s: CONSTRUCTION CONTRACTS AW ARDED STATES Maryland .......................................... Dist. of Col........................................ Virginia ............................................ West Virginia ................................ North Carolina ............................. South Carolina .............................. Fifth District ............................. July 1940 & 7,951,000 6,197,000 31,728,000 1,575,000 5,882,000 3,901,000 $57,234,000 July 1939 $ 6,024,000 5,871,000 8,814,000 5,318,000 7,014,000 2,076,000 $35,117,000 % Change + 32 + 6 +260 — 70 — 16 + 88 + 63 C O A L PRO D U CTIO N RISES FU R TH E R Bituminous coal production in the United States has been unusually high since mid-winter, and output in July totaling 36,080,00 net tons was 12 per cent above 32.340.000 tons mined in June this year and 23 per cent above 29,391,000 tons in July last year. The greater demand for coal this year is chiefly due to increased in dustrial activity, but exports, especially to Canada, have also been a substantial factor in the gain. Total output o f coal this calendar year to August 3 amounted to 260.028.000 tons, an increase of 31 per cent over 197,815.000 tons mined in the corresponding period in 1939. Shipments of coal through Hampton Roads to August 3 were 13,793,961 tons in 1940 and 10,714,559 tons in 1939, an increase this year o f 29 per cent. The chief increase was in foreign cargo coal, which rose 363 per cent this year. In the Fifth district, which accounts for between 30 and 40 per cent o f the bituminous coal output o f the United States, production in July 1940, June 1940 and July 1939, was as follow s: SOFT COAL PRODUCTION IN TONS REGIONS W est Virginia ........................... Virginia ........................................ Maryland ...................................... 5th District ............................. United States ........................ % in District........................... July 1940 June 1940 July 1939 11,097,000 10,241,000 9,851,000 1,165,000 1,260,000 1,153,000 98,000___________ 99,000___________ 97,000 12,360,000 11,600,000 11,101,000 36,080,000 32,340,000 29,391,000 34.3 35.9 37.8 T E X TILE A C T IV IT Y A G A IN DECLINES For the most part, business obtained in July by cotton textile mills was disappointing, and sales were substan tially below mill production, according to the best avail able trade data. Prices for textiles held up remarkably well, however, most constructions declining only about an eighth o f a cent during the latter part of the month. The Journal o f Commerce states that a sudden flare-up in trading on the last day of July accounted for sales of approximately 40,000,000 yards of print cloths, carded broadcloths and related items, and nearly all prices snapped back to the levels at which they started the 3 month. Trading in textiles on July 31 exceeded all the rest o f the month, but dullness developed again in August and mill activity has been only fairly well maintained at recent levels. Sales o f finished goods appear to be holding up somewhat better than unfinished cloth and yarn. A considerable volume o f heavy industrial cloth was sold in early August. Consumption o f cotton in July was below the June level on an average daily basis, but total consumption last month was higher because July had two additional working days. COTTON CONSUMPTION— FIFTH DISTRICT In Bales Virginia District July 1940 ............................. June 1940 .............................. July 1939 ............................. MONTHS No. Carolina So. Carolina 158,028 144,439 143,266 120,829 116,248 100,757 7,055 10,440 11,241 285,912 271,127 255,264 7 Months, 1940..................... 7 Months, 1939..................... 1,162,622 1,066,266 904,182 805,797 85,519 78,790 2,152,323 1,950,853 R A Y O N SHIPMENTS EXCEED PRO D U CTIO N Manufacturers o f rayon filament yarn continued opera tions at about capacity levels in July, and shipments to fabricators totaling 32,700,000 pounds exceeded output by 1,400,000 pounds, already low reserve stocks being reduced accordingly. Last month’s shipments compared with 31,400,000 pounds in June this year and 32,900,000 pounds in July last year, while reserve stocks at the end o f July 1940, totaling 11,400,000 pounds, compared with 12,800,000 pounds on hand a month earlier and 26,400,000 pounds on July 31, 1939. Rayon Organon reports that a new field for the use o f rayon products is indicated in experimental orders placed by the A rm y Quartermaster Corps, one for satins to be used as linings in garments for the A ir Corps and another for olive drab cloth con taining 30 per cent rayon staple fiber and 70 per cent wool, to be used chiefly for shirts. It is understood that the Navy is also experimenting with rayon linings in uni forms and overcoats o f enlisted men. C O TTO N STATISTICS Spot cotton prices on 10 Southern markets continued to dccline steadily from the middle o f July through the middle o f August, and on August 16 dropped below the 10-cent line to 9.93 cents for middling upland cotton. A year earlier, on August 18, 1939, the average price was 8.95 cents. The first forecast on production o f cotton was made on August 8 by the Department o f Agriculture, and indi cated a yield o f 11,429,000 bales against 11,817,000 bales in 1939 and a 10-year average o f 13,547,000 bales. In the Fifth district, Virginia and North Carolina figures are higher than last year’s, and more than offset a de cline in South Carolina. Figures for Fifth district states are shown on page 4. The 1940 crop got a late start, but the weather during most o f July and early August was almost ideal for cotton and rapid progress was made. In the district the crop is well fruited, and weevil damage has been very slight. On August 9, the details o f the 1940 Government cot ton loan were released. Rates range from 9.16 cents in west Texas and New M exico to 9.90 cents in the Caro lina mill sections for middling 15/16 inch, net weight basis. The rates are somewhat higher than those in force in 1939, and are equal to about 56 per cent o f the so-called parity price. MONTHLY REVIEW 4 COTTON CONSUMPTION AND ON HAND— BALES July 1940 CROP FORECASTS July Year Ended July 31 1939 This Year Last Year Fif'th district states: 285,912 255,264 Cotton consumed ..................... Cotton growing states: 511,121 442,084 Cotton consumed ..................... Cotton on hand July 31 in 743,226 681,681 Consuming establishments. .. Storage & compresses............ 9,044,748 11,586,232 United States : 597,850 521,353 Cotton consumed ...................... Cotton on hand July 31 in 973,542 862,105 Consuming establishments. .. Storage & compresses............ 9,122,178 11,620,408 120,388 106,531 Exports of cotton, U. S............ Spindles active, U. S................. . 21,916,700 21,939,404 3,718,798 3,299,472 6,610,918 5,809,821 7,745,574 6,858,426 ................................ ................................ 6,175,349 3,326,840 ........ Bureau o f Internal Revenue receipts for July show production of tobacco products as follow s: July 1940 26,241,167 15,912,640,803 460,522,504 3,091,422 June 1940 July 1939 24,763,334 17,565,041,013 435,029,473 2,896,537 23,674,676 14,259,801,810 427,533,137 2,571,218 DEPARTMENT STORE TRADE Richmond (3) . . . Baltimore (8) . . . Washington (6) . . Other Cities (14) District (31) . . + + + + + Net Sales Stocks Jan. 1 to date July 31, 1910 comp, with comp, with same period July June last year 1939 1940 + 5.4 + 7.5 + 6.5 8.0 + 6.9 9.6 12.3 16.6 13.5 13.9 + Same stores by states, with 24 stores added: + 10.9 Virginia (12) + 12.7 West Va. (10) . .. + 5.8 No. Carolina (8) . + 9.2 So. Carolina (11) + + + — + 4.6 3.7 2.4 1.0 2.7 — — — — - Maryland ............... West Virginia North Carolina . .. South Carolina . , . Fifth District . . Maryland ............... West Virginia North Carolina South Carolina Fifth District R E T A IL A N D W H O LESALE TR A D E Net Sales July 1940 comp, with July 1939 Cotton % Change Acreage North Carolina . .. South Carolina . . . Fifth District .. C IG A R E TTE P R O D U C TIO N DECLINES Smoking & chewing tobacco, pounds .. Cigarettes, number . Cigars, number . . . . Snuff, pounds ........... The following figures issued by the Department of Agriculture show forecasts o f production based 011 A u gust 1 conditions, compared with yields in 1939 and in the 10-year period 1929-1938, and percentage changes in acreage this year over or under 1939. Yield figures marked ( + ) were raised between July 1 and August 1, and those marked ( — ) were lowered. Ratio J uly collections to accounts outstanding July 1 1.8 6.8 5.2 7.3 5.6 31.8 32.0 29.2 28.3 30.3 Maryland . .. .. . .. .. ............... West Virginia North Carolina South Carolina Fifth District ... .. . .. .. ............... West Virginia North Carolina . .. South Carolina Fifth District . + 5.2 + 12.7 + 9.6 + 10.9 RETAIL FURNITURE SALES c/o Change in Sales, July and 7 Months in 1940 Compared with July 1939 STATES — 1 + 15 +13 + 29 4- 9 Maryland, 9 stores............. Dist. of Col., 7 stores. . . . Virginia, 10 stores............. North Carolina, 4 stores. South Carolina, 7 stores. District, 37 stores........ + 10 Individual Cities : — 1 + 18 + 15 Baltimore, 9 stores........... Richmond, 5 stores........... Washington, 7 stores........ Compared with 7 Months 1939 + 17 LINES Auto supplies ( 7 ) ........... Shoes (3) ............................ Drugs (13) ..................... Dry goods ( 8 ) ................... Electrical goods (16) . .. Groceries (57) ............... Hardware (16) ............... Indus, supplies ( 9 ) ........ Plumbing & heating (3) Paper & products ( 9 ) . . Tobacco & products (9) Miscellaneous (44) . . . . District average (194) Source : + 5 — 17 + 10 + 5 + 17 + 9 + 16 + 33 + 11 + 23 + 9 + 17 + 10 Bureau of the Census. __ 7 + 7 + 3 — 1 + 6 + 2 — 2 + 24 + 9 + 7 — 8 — 1 + 5 Yield 1929-1938 37,000 658,000 820,000 1,515,000 Wheat (Bushels) 7,448,000 4 8,354,000 4 6 1,986,000 6,021,000 + 5 2,625.000 0 26*434,000 + + 3 7,352,000 7,511.000 2,102,000 5.100,000 2,415,000 24,480,000 8,518,000 8,73*5,00 9 2,080,000 4,661,000 1,175,000 25,169,000 Com (Bushels) 16,863,000 — + 1 35.114,000 + — 2 12,879,000 — — 1 — 1 43,938,000 — + 2 24,152,000 + — 0 132,946,000 + 18,216,000 36,530,000 13,994,000 48,087,000 25,433,000 142,260,000 15,923,000 32,255,000 12.448,000 42,517,000 22,306,000 125,449,000 Oats (Bushels) 1.015,000 + 15 1,932,000 + + 5 — 10 1,386,000 — — 1 6,000,000 + — 1 10,670,000 21,003,000 + — 2 1,128,000 1,600,000 1,460,000 5,692,000 11,515.000 21,395,000 1,344,000 2,197,000 2,086,000 4,228,000 8,910,000 18,765,000 518,000 983.000 718,000 991,000 541.000 3,751,000 464,000 923,000 644,000 696,000 362,000 3,089,000 Irish ]Potatoes (Bushels) + 4 2,782,000 — 2,375,000 0 10,452,000 + 6,786,000 0 3,200,000 3,040,000 8,7 48,000 — - 1 8,200,000 0 3,192,000 3,108.000 0 28,374,000 + 23,509,000 3,098,000 11 ,'>07,000 2,925,000 7,976.000 2,124.000 27,930,000 1,090,000 4,156,000 8,163,000 5,220,000 18,629,000 26,096,000 97,395,000 3,262,000 496,101,000 81,068,000 703,922,000 6 9 1 4 20,000 588,000 840,000 1,448,000 + + — + + + + + + + 2 3 1 7 5 4 (Tons) 5 7 0 ,0 0 0 1,178,000 820,000 1,000,000 — 483.000 — 4,051,000 — + 8 Maryland + 12 North Carolina . . . South Carolina . . . Fifth District . .. Sweet Potatoes (Bushels) 1,350,000 1.440.000 + 11 — 3 3,875,000 + 4,128,000 — 5 8,624,000 6,935,000 — 5,280,000 — — 1 6,834,000 — 3 21,026,000 17,440,000 — West Virginia North Carolina . .. South Carolina . .. Fifth District . . . Tobacco (Pounds) 26,460,000 + 29,796,000 — 1 — 33 94,035,000 + 143,847,00-0 2,635,000 — 6 2.736,000 — 41 430,823,000 — 811,675,000 — 40 73,960,000 — 133,200,000 -3 8 627,913,000— 1,121,254,000 7 + 13 + 16 ............... + 17 + 3 + 8 WHOLESALE TRADE— 194 FIRMS Net Sales July 1940 compared with July June 1939 1940 West Virginia North Carolina . . . South Carolina . . . Fifth District . . . Yield 1939 13,000 457,000 871,00'0 1,341,000 — + + + Hay Maryland (Bales) Yield 1940 Stocks July 31, 1940 compared with July 31 June 30 1939 1940 Ratio July collections to accounts outstanding July 1 65 — 4 + 1 + 21 + 1 + 14 +12 + 26 + 21 + 1 + 21 — 4 + 9 + 6 + 3 + ’4 — 3 — *4 + 6 — 0 + 7 81 42 69 93 36 61 67 83 62 64 Apples, Maryland ............... West Virginia . .. North Carolina . .. Fifth District . . North Carolina . .. South Carolina . . . Fifth District . . Maryland ............... West Virginia North Carolina . .. South Carolina . . . (Compiled August 21, 1940) Commercial (Bushels) 2,232,000 2,362,000 10,150,000 10,800,000 4,309.000 5,670.000 915,000 1,120,000 17,636,000 19,952,000 Peanu'ts (Pounds) 194,350,000 + 5 304,750,000 + 5 14,000,000 +15 513,100.000 189,175.000 290.700.000 11,840,000 491,715,000 Pasture Condition, August; 1 70 — 92 + 88 — 77 — 65 — 77 87 85 84 78 1,922,000 10,279,000 4,622,000 935,000 17,758,000 146,706,000 242,658,000 8,607,000 397,971,000 66 74 71 76 09 MONTHLY REVIEW, August 31, 1940 FEDERAL RESERVE BANK OF RICHMOND S U M M A R Y OF N A TIO N A L B U S IN E S S C O N D ITIO N S (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION V olum e o f industrial output was steady during Ju ly and the Augfust, a fter a rapid expansion in M ay and June. E m ploym en t increase. R eflecting m ainly awards fo r national defen se projects, contracts rose to the highest level in ten years. P rices o f basic declined som ewhat fu rther. first h alf o f continu ed to construction com m odities PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1985-1939 a v e rage= 100. By months, January 1934 to July 1940. CONSTRUCTION CONTRACTS AWARDED Three-m onth moving averages of F. W . Dodge Corporation data for value of contracts awarded in 37 Eastern States, adjusted for seasonal vari ation. Latest figures based on data for June and July and estimate for August. WHOLESALE PRICES In July the B oard’ s revised index o f industrial production stood at 121 per cen t o f the 1935-39 average, a ccord in g to the prelim inary data. This is the same as in June and 17 points above the level prevailin g a year ago b e fo r e the outbreak o f war. In m ost lines activity w as m aintained at the levels reached in June or increased further. Steel production in July w as at about 85 per cen t o f capacity and in the first h alf o f A u gust there was an increase to abou t 90 per cent. P roduction o f p ig iron and coke and output o f n on ferrou s metals w ere also in large volum e. In the m achinery, shipbuilding, and a ircra ft industries, where new orders had been large during the first h alf o f the y ear and a considerable b a ck log o f un filled orders had accum ulated, activity w as m aintained at high levels in July, although ordinarily there are declines at this season. L um ber production declined sharply early in July bu t has subsequently increased accom panyin g a considerable rise in new orders. In the autom obile industry output declined sharply in July and the first h alf o f A u gu st as plants w ere closed to prepare fo r the sh ift to new m odel production. The decline was greater than at this season in other recen t years, reflectin g the fa c t that production had been at high levels during the first h alf o f 1940 and large stocks had accum m ulated. These stocks w ere reduced con siderably in July as production was curtailed and retail sales continued large. T extile production increased considerably fu rth er in July, reflectin g chiefly a marked rise in activity at w oolen mills w here ou tpu t is still below the levels o f a year ago. Production o f cotton and rayon textiles w as m aintained in July and was in larger volum e than last summer, w hile activity at silk m ills increased som ewhat fr o m the exception ally low level reached in June. Shoe production increased seasonally, while output o f m anu factu red food s, which in June had been unusually large fo r that tim e o f year, show ed less than the custom ary increase in July. Coal production has risen fu rth er and shipm ents o f iron ore down the Lakes have continued at near-capacity rates. Petroleum production has been curtailed sharply, how ever, reflectin g partly a continued high level o f stocks o f petroleum products. V alue o f new construction w ork undertaken increased sharply in July, ow ing m ainly to a fu rth er rise in public construction , and was at the highest level in the past decade, accordin g to reports o f the F. W . D odge C orporation and the Federal Reserve Bank o f San F rancisco. A w ards f o r both residential and nonresidential private building increased som ewhat, although some decline is usual at this season. Increases were m ost pronounced in the A tlan tic, G ulf, and Pacific Coast States, reflecting awards o f additional contracts fo r naval air station and ship yard construction. In the central portions o f the coun try there w ere generally small increases, although in some areas aw ards w ere low er. DISTRIBUTION D istribution o f com m odities to consum ers was sustained in July at about the levels prevailing in the first h alf o f the year. Sales at departm ent stores declined m ore than seasonally, while sales at variety stores show ed little change, although a decline is usual in July. T otal freigh t-car loadings increased seasonally in July. Shipm ents o f grain showed a considerable rise and loadings o f coal and coke continued to advance, while shipments o f m iscellaneous freigh t, w hich include m ost m anu factu red products, declined by som ewhat m ore than the usual seasonal am ount. Indexes compiled by the U . S. Bureau of Labor Statistics, 1926=100. By weeks, 1934 to August 10, 1940. COMMODITY PRICES P rices o f basic com m odities declined som ewhat fu rth er from the m iddle o f July to the middle o f A ugust, with decreases chiefly in prices o f com m odities influenced b y foreign supplies, such as lead, rubber, cocoa , and coffee. Prices o f steel scrap and zinc, on the other hand, advanced som ewhat in this period. AGRICULTURE MEMBER BANK RESERVES AND RELATED ITEMS P rospects fo r m ost crops showed little change in July, accordin g to the D epartm ent o f A gricu lture. P roduction this year is expected to approxim ate the 1929-38 average and, considering carryovers, supplies o f m ost crops will be large. Conditions fo r w heat and oats im proved during July, while the corn crop showed some deterioration. A cotton crop o f 11,429,000 bales was indi cated f o r this season as com pared w ith 11,817,000 bales last season. BANK CREDIT T otal loans and investm ents at rep ortin g m em ber banks in 101 leading cities increased substantially during the five weeks ended A u gust 14, ow in g mainly to purchases o f direct and guaranteed securities new ly issued b y the United States G overnm ent. Sale o f these securities caused a large increase in Treasury balances with the Federal R eserve Banks. A s a result o f this tem porary developm ent, excess reserves declined by $450,000,000 in this period despite an increase o f over $500,000,000 in m on etary g old stock. Wednesday figures, January 3, 1934, to August 7, 1940. GOVERNMENT SECURITY MARKET Prices o f United States G overnm ent securities w ere relatively steady during July and the early part o f A u gu st but declined slightly around the m iddle o f A u gu st accom panyin g news o f intensification o f European w arfare. The yield on the 1960-65 bonds increased to 2.39 per cent on A u gu st 14 com pared with 2.34 per cen t on July 1 and 2.26 per cen t on A pril 2 at the y ea r’ s peak in prices.
@FedFRASER