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MONTHLY

REVIEW

o f Financial and Business Conditions

Richmond® - o

F ifth
Federal

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va. ^

3 ^ 'T r

_

Reserve
D

is t r ic t

Federal Reserve Bank, Richmond, Va.

August 31, 1942

Buy
W ar
B onds




in v e s t

Buy
S a v in g s
St a m p s

for

v ic t o r y

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N O N -D E F E N S E L O A N S , B O T H N E W A N D R E N E W A L S , B Y B U S IN E S S A N D
M A D E B Y 266 M E M B E R B A N K S IN T H E F I F T H F E D E R A L R E S E R V E D IS T R IC T
B E T W E E N A P R IL 16 A N D M A Y 15, 1942.
(In thousands of dollars)
A ll

Total
loans
and
renew­
als

32,451

lo a n s

&

A ssets

of

A ssets

B orrow er

Under $50,000 $500,000
$50to
to
000 $500,000 $5,000,000

6,650 17,739

Non-Defense

Defense

r e n e w a ls

Over
$5,000,000

Total
de­
fense

of

A ssets

B orrower

Under $50,000 $500,000
$50to
to
000 $500,000 $5,000,000

Over
$5,000,000

Total
nonde­
fense

of

;B o r r o w e r

Under $50,000 $500,000
$50to
to
000 $500,000 $5,000,000

Over
$5,000,000

300,000

*>
1-

7,347

715

4,415

504

2,050

1,761

100

27,729

6,110

15,638

5,416

565

50

2,990

226

696

1,218

850

27

0

4

23

0

2,955

223

687

1,195

850

0

3,394

1,057

1,218

514

605

760

14

90

51

605

2,634

1,043

1,128

463

0

0

477

73

339

65

0

176

50

126

0

0

294

21

208

65

0

0

1,938

291

997

292

358

1,547

198

702

292

355

364

93

268

0

3

0

1,213

213

488

347

165

245

4

101

0

140

868

209

387

247

25

0

1,312

207

382

623

100

221

75

108

38

0

1,091

132

274

585

100

0

7,367

349

2,519

3,898

601

1,700

27

653

829

191

5,022

310

1,844

2,468

400

10

4,619

269

1,550

1,425 1,375

324

23

166

35

100

4,273

240

1,368

1,390 1,275

0

8,478

613

4,015

3,450

400

1,689

145

1,097

297

150

6,561

448

2,806

3,057

250

0

2,039

435

419

761

424

552

36

85

416

15

1,480

396

330

345

409

0

26,920

2,280 12,362 11,898

380

20,770

769

9,310 10,311

380

6,007

1,496

2,924

1,587

0

0

10,249

2,851

5,238

678

807

142

325

100

9,416

2,704

4,977

1,157

578

0

103,447* 15,514 47,962 33,320 6,651

33,233

1,987 14,732 14,378 2,136

68,694

13,425 32,839 17,975 4,455

60

47

2

8,186 1,647

60

9,538*

46,302*
3,572*

96

1,344

5,601 21,919 15,785 2,978

20,288

4,593

1,447

4,039

1,482

1,640

810

419

66

876

339

240

708

1,481 10,423
245

441

250

47

8,095

7,113' 1,271

25,192

149

41

2,661

4,219

4,077 11,282
1,192

531

3,298

1,185

loans which were not classified as to whether they were made for defense or non-defense purposes.

261

23

2

3

MONTHLY REVIEW

The General Situation in the Fifth District
B U SIN ESS in the Fifth Reserve district is at or near
record levels in lines which are engaged on some
phase of war work or which have not yet been seriously
affected by priority rulings, rationing, freezing orders,
etc. On the other hand, certain lines which have been
substantially affected by these legal restraints are doing
little or no business, and a considerable number of enter­
prises have been voluntarily liquidated for the duration.
Distribution of goods to consumers through department
stores, apparel shops, furniture stores, groceries, jewelry
stores, etc., is going ahead in large volume, although some­
what restricted by stiffened credit terms under Regulation
W and by inability to secure adeqate stocks of some com­
modities. On the other hand, such distributing agencies
as automobile and tire dealers, gas stations, bicycle shops,
sporting goods agencies, refrigerator and other household
machinery dealers, and handlers of hard goods in general
are practically out of the market. Building permits in
cities have fallen to the lowest point in a number of years,
since most of the building within corporate limits is for
civilian use and has been greatly restricted, while on the
contrary contract award figures are very high, these con­
taining a great amount of Government owned or Govern­
ment approved projects connected directly with the allout war effort.
Industrially the Fifth district is exceedingly busy, ex­
cept for a few lines which have been unable to convert
machinery to war work and which normally use raw mate­
rials now classed as critical and allocated to more impor­
tant uses. The full-fashioned hosiery industry is hard
hit because it cannot obtain silk, nylon or suitable rayon
yarn in sufficient quantities to keep the industry busy, and
its machinery is not suited for making Army socks. The
cotton textile industry in the district set a record for

cotton consumption in July, and has a back-log of orders
sufficient to keep the industry operating at capacity for
many months. New orders are also being received as fast
as old ones are cleared away, and the mills are so tied into
the war effort that they cannot supply demands for civilian
goods. Fortunately retail outlets anticipated this situa­
tion and laid in large supplies of textiles while they were
available. Rayon yarn plants continue to work to the
limit of capacity, and rayon has been drawn upon more
for war uses recently than was expected when the war
began, thus lessening the supply of rayon available for
civilian use. Tobacco manufacturers are setting new pro­
duction records in cigarettes, the chief tobacco product.
Miscellaneous manufacturers who have lined up with the
war effort, ship-yards, airplane plants, and coal mines are
using available labor and materials to capacity, and the
railroads are handling the greatest tonnage in their his­
tory.
Agricultural prospects for Fifth district farmers are ex­
cellent insofar as the chief money crops are concerned,
although the outturn of some minor crops was not all that
might have been expected. Growers of cotton and tobacco
appear certain to realize greatly increased money returns
from their 1942 crops over those received from 1941 crops.
This year’s tobacco crop in the district is forecast as 14
per cent above the 1941 crop, and if opening auction mar­
ket prices in Georgia and the Carolinas are indicative of
this year’s demand for tobacco, the growers will receive
substantially higher prices for the larger crop. The cot­
ton crop this year is 60 per cent larger than the 1941 crop,
in Fifth district states, and at mid-August cotton prices
were approximately 17 per cent higher than a year ago.
Increased yields are expected this year in oats, hay, Irish
potatoes, sweet potatoes, and commercial apples, while
lower yields are reported for wheat, corn and peaches.

FINANCIAL AND BUSINESS CONDITIONS IN THE FIFTH FEDERAL RESERVE DISTRICT

July 1942

June 1942

Debits to individual accounts (25 cities).........................
Sales, 77 department stores, 5th district..... ..................
Saies, 119 furniture stores, 5th district.................. ......
Sales. 216 wholesale firms, 5th district.......................... ........

$2,189,643,000
$ 14,019,059
2,389,553
$
$ 16,682,000

$2,098,939,000
$ 16,510,314
$
2,339,064
$ 15,997,000

$1,779,790,000
$ 12,380,788
3,001,952
$
$ 15,246,000

Number of business failures, 5th district......................
Liabilities in failures, 5th district...................................
Value of building permits issued, 29 cities.................
Value of contracts awarded, 5th district....... .............

22
$
$
$

582,000
3,961,000
90,017,000

19
$
882,000
$
8,373,433
$ 160,738,000

$
$
$

471,112
18.67
39,900,000
6,700,000
47,700,000

458,572
19.88
38,900,000
7,000,000
48,100,000

Cotton consumption, 5th district (Bales)......................
Cotton price, cents per lb., end of month......................
Rayon yarn shipments, U. S. (Pounds)........................
Rayon yarn stocks, U. S. (Pounds)......... ......................
Bituminous coal mined, U. S. (Tons)..........................




July 1941

% Change
Month Year
+ 4
— 15
+ 2
+ 4

16
198,000
11,584,377
64,333,000

+
—
—
—

16
34
53
44

418,737
15.94
39,400,000
3,600,000
44,080,000

+
—
+
—
—

3

6
3
4

1

+23
+ 13
— 20
+ 9
+ 38
+194
— 66
+ 40
+ 13
4 - 17
+ 1
+ 86
+ 8

MONTHLY REVIEW

4
BANKING STATISTICS
RESERVE BANK STATEMENT ITEMS
Fifth District
000 omitted
Aug. 15
July 15
ITEMS
1942
1942
$
0
$
50
Discounts held ...........................
66
66
Foreign loans on gold................
820
767
Industrial advances ..................
205,540
186,441
Government securities .............
187,324
206,426
Total earning assets...............
566,3194
522,452
Circulation of Fed. Res. notes.
466,784
475,115
Members’ reserve deposits.......
910,332
884,773
Cash reserves .............................
80.33
82.80
Reserve ratio .............................

Aug. 15
1941
$
175

0

788
119,663
120,626
334,910
417,214
718,165
85.18

SELECTED ITEMS—41 REPORTING MEMBER BANKS
Fifth District
000 omitted
Aug. 12
July 15
ITEMS
1942
1942
$141,744
$141,624
Loans to business & agriculture.
157,194
161,756
All other loans.............................
725,907
690,632
Investments in securities...........
299,607
299,906
Reserve bal. with F. R. bank..
31,404
29,486
Cash in vaults.............................
888,578
914,350
Demand deposits ..........................
204,460
201,615
Time deposits .............................
0
0
Money borrowed ..........................
MUTUAL SAVINGS BANK DEPOSITS
9 Baltimore Banks
July 31, 1942 June 30, 1942
$222,076,549
$221,023,216
Total deposits ..................
DEBITS TO INDIVIDUAL ACCOUNTS
Fifth District
000 omitted
June
July
July
1942
1941
1942

CITIES
Dist. of Col.
$ 423,845 $ 419,803 $ 351,981
Washington ...
Maryland
536,045
643,617
599,477
Baltimore ...........
10,511
11,348
11,395
Cumberland .......
8,975*
9,795*
Frederick.............
14,409
12,238
15,477
Hagerstown .......
North Carolina
19,371
17,926
19,494
Asheville ...........
90,057
127,593
120,297
Charlotte ...........
33,625
62,762
61,560
Durham .............
24,327
26,619
29,629
Greensboro .........
4,235*
4,183*
Kinston ...............
61,704
56,374
46,181
Raleigh ...............
19,198
29,754
26,994
Wilmington .......
6,334*
5,308*
Wilson .................
48,765
70,917
54,718
Winston-Salem ..
South Carolina
29,721
35,152
35,380
Charleston .........
38,303
44,076
42,755
Columbia ...........
27,082
32,429
32,982
Greenville.............
15,470
16,876
17,584
Spartanburg
Virginia
10,301*
10,519*
Charlottesville .. .
11,469
11,918
10,088
Danville .............
18,405
18,415
19,532
Lynchburg .........
21,042.
19,564
14,827
Newport News . .
117,717
115,313
Norfolk.................
78,287
7,039
12,898
13,758
Portsmouth .......
250,293
241,653
196,369
Richmond ...........
35,138
35,969
34,243
Roanoke .............
West Virginia
21,813*
18,688*
Bluefield .............
68,073
71,675
67,059
Charletson .........
13,401*
13,732*
Clarksburg .........
26,206
24,729
21,959
Huntington .........
13,724
12,012
13,177
Parkersburg
$2,189,643
$2,098,939 $1,779,790
District Totals . .
♦Figures not included in District Total.

Aug. 13
1941
$149,700
168,808
475,612
290,896
27,467
722,107
209,543

0

July 31, 1941
$223,993,945

of Change
Month Year

%

+ 1

+ 20

+
+
—
+

+ 20
0

7
8
8
7

+ 26

+ 1
+ 6
+ 2
— 10
+ 1
+ 22
+ 10
+ 19
+ 30

+
+
+
+

1
+ 3
— 2
— 4

+
+
+
+

—
—
—
+
+
—
+
—

+ 14
0
+ 42
+ 50
+ 83
+ 27
+ 3

—

2
4
6
8
2
6
4
2

+ 17
— 5
— 2
+ 6
— 9
+ 4

9
42
87
9

—’9
+ 55
+ 45
18
15
20
9

,.

+ 2
+ 19
—12
+ 23

Number of Failures
Total Liabilities
District
District U. S.
U. S.
22
764
$ 8,548,000
$ 582,000
19
804
9,906,000
882,000
16
908
13,422,000
198,000
202
6,387
2,955,000
69,133,000
249
7,610
85,578,000
2,731,000

EMPLOYMENT
There were no important changes in employment in the
Fifth district during the past month. Recently a con­
siderable number of workers have been laid off by full


Percentage change from
June 1942 to -July 1942
in number
in amount
on payroll
of payroll
+ 3.0
+ 4.4
— 1.2
—0.8
+ 0.6
+ 1.4
—1.4
— 8.6
— 1.3
— 1.6
+ 1.6
+ 1.2
+ 0.5
- 0 .6

STATES
Maryland ................
Dist. of Col............
Virginia ..................
West Virginia .......
North Carolina . . . .
South Carolina ___
District Average

BITUMINOUS COAL PRODUCTION

COMMERCIAL FAILURES
Figures on insolvencies in the Fifth district and the
United States, as compiled by Dun & Bradstreet for sev­
eral recent periods, are as follows:
PERIODS
July
1942.................
June
1942................
July
1 941..............
7 Months, 1942.............
7 Months, 1941.............

fashioned hosiery mills in North Carolina, but most of
these have been absorbed by other branches of the textile
industry. The reduction in employment at hosiery mills
was due of course to inability to secure silk, nylon, or
suitable rayon yarn to keep all of the mills in active
operation. The farmers who grow vegetables for the
fresh vegetable market and for canning have been unable
to secure sufficient labor to gather their crops promptly,
and parts of some crops spoiled in the fields. The de­
mands of the armed forces for additional men are con­
stantly increasing the difficulty of obtaining workers for
civilian jobs, but this pressure is being relieved to some
extent by the return of elderly people to active employ­
ment, and the entrance of many women into the employed
field. The following figures, compiled for the most part
by the Bureau of Labor Statistics, show the trends of
employment and payrolls in the Fifth district from June
to July:

The total amount of bituminous coal produced in the
United States in July 1942 amounted to 47,700,000 net
tons, in comparison with 48,100,000 tons mined in June
this year and 44,080,000 mined in July last year. While
total production showed a small decrease in July from the
June total, the occurrence of the July 4 holiday caused the
later month to contain slightly less working time than the
earlier month, and therefore July showed an average
daily production of 1,885,000 tons in comparison with
1,876,000 tons in June. Total production this calendar
year through August 8 was 344,333,000 tons, an increase
of 20 per cent over 286,159,000 tons mined to the corre­
sponding date in 1941. The demand for bituminous coal
is taxing both production facilities and transportation to
the limit. In addition to the increased demands from
industry, a great deal of coal is needed to replace oil as a
fuel for heating. Coal yards are filling their bins during
the summer months, and are strongly urging householders
to anticipate next winter’s needs, since there is some dan­
ger that transportation facilities may not be sufficient to
handle all coal needed during the fall and winter.
SOFT COAL PRODUCTION IN TONS
REGIONS
July 1942
June 1942
West Virginia ....................
13,160,000
13,334,000
Virginia .............................
1,659,000
1,718,000
Maryland ........................... .
161,000
1751,000
5th District ....................
14,980,000
15,227,000
United States .................
47,700,000
48,100,000
% in District....................
31.4
31.7

July 1941
12,833,000
1,640,000
150,000
14,623,000
44,080,000
33.2

CONSTRUCTION
Restrictions placed by the Government on the use of
building material for work not connected with the war
have so reduced construction for civilian use that the value
of building permits issued in twenty-nine Fifth district
cities in July 1942 totaled the smallest amount recorded in
any month since December 1937. Permits issued in the
twenty-nine cities last month totaled $3,961,251, compared
with $8,373,433 for permits issued in June 1942 and $11,584,377 for July 1941. Baltimore and Washington ac­
counted for slightly more than $3,000,000 of last month’s
total of $3,961,251. Among the twenty-nine reporting cities

MONTHLY REVIEW
five showed figures for July of more than $100,000, as
follows: Baltimore $1,528,620, Washington $1,485,482,
Richmond $148,673, Hagerstown $136,465, and Norfolk
$106,993.
In spite of small building permit figures in leading
Fifth district cities, a very large volume of work is being
done outside of city corporation lines. Most of it is con­
nected with the war effort, and is reflected in contracts
actually awarded for construction work in the district in
July 1942 amounting to $90,017,000. This figure shows
a decrease from the record total of $160,738,000 for con­
tracts awarded in June, but is substantially above awards
for $64,333,000 made in July 1941.
Figures by states for contracts awarded in June 1942,
which were not available when the July 31 R eview went
to press, were reported by the F . W . Dodge Corporation
as follows:
CONSTRUCTION CONTRACTS AW ARDED
STATES
June 1942
June 1941 % Change
Maryland
..............................
$ 30,807,000
$ 29,018,000
+
6
Dist. of Col............................
6,500,000
12,068,000
— 46
Virginia
................................
68,075,000
19,950,000
+241
West V ir g in ia .......................
13,573,000
3,751,000
+262
North Carolina . .................
25,850,000
22,185,000
+ 17
South Carolina ................... ............... 15,933,000_________ 5,531,000_______ + 1 8 8
Fifth District ...................
$160,738,000
$ 92,503,000
+ 74

COTTON TEXTILES
The cotton textile industry continued operations at
capacity levels in July, as evidenced by the second highest
cotton consumption figure ever reported for a single
month. Mills in the Fifth district did even better, setting
a new all-time record for consumption, the fourth month
this year in which a new record was established. A very
large proportion of cotton goods currently being manu­
factured is going into war channels or is allocated to im­
portant civilian needs. A recent report made by an
official of the Cotton Textile Institute to the Cotton Re­
search Congress sets forth some interesting data. Sixtyseven per cent of the unfilled orders currently held by
cotton mills represent contracts connected with the war
effort and bear priority ratings of A-10 or better. The
entire production of mosquito netting is now covered by
contracts bearing high priority ratings. Other branches
of the industry contributing a major part of their output to
the war effort included: Tobacco and cheesecloth (gauze
for hospital supplies) 84% ; drills 90% ; osnaburgs 9 7 % )
combed poplins 90% numbered duck 9 4 % ; Army duck
9 1 % ; sheetings 8 1 % ; lawns, including airplane and bal­
loon fabrics 83% ; and filter duck 81% .
Cotton consumption figures by states in the Fifth dis­
trict for July 1942 and the first seven months of this year
are compared in the accompanying table with correspond­
ing figures for 1941.
COTTON CONSUMPTION— FIFTH DISTRICT
In bales
MONTHS
No. Carolina So. Carolina
Virginia
District
July
1942...................
254,179
194,317
22,616
471,112
June
1942...................
247,142
189,444
21,986
458,572
July
1941...................
227,693
171,346
19,698
418,737
7 Months 1942...................
1,707,200
1,309,585
154,932
3,171,717
7 Months 1941...................
1,506,997
1,136,790
127,274
2,771,061
% Inc. in 1942...................
+13
+15
+22
+14

RAYON YARN
Rayon Organon for August states that deliveries of
rayon filament yarn to domestic consumers in July totaled
39,900,000 pounds, compared with 38,900,000 pounds in
June 1942 and 39,400,000 pounds in July 1941. Total de­
liveries of rayon yarn in the first seven months of 1942
amounted to 271,300,000 pounds, an increase of 5 per cent
over deliveries totaling 258,600,000 pounds in the corre­
sponding period last year. Deliveries exceeding output
of yarn in July, reserve stocks of yarn in the hands of
manufacturers declined during the month from 7,000,000



5

pounds to 6,700,000 pounds. Deliveries of rayon staple
fiber in July totaled 12,600,000 pounds against 13,700,000
pounds in June 1942 and 12,600,000 pounds in July 1941.
Deliveries of staple fiber from January 1 through July
31 totaled 88,400,000 pounds this year, an increase of 15
per cent over 76,900,000 pounds delivered in the first seven
months of 1941. Stocks of staple fiber held by producers
increased during July from 2,300,000 pounds to 3,200,000
pounds, the increase resulting from holding poundage
subject to allocation orders under Government regulations.
On July 27 the War Production Board issued a sepa­
rate Order M-176 providing for the allocation of rayon
staple fiber to wool manufacturers. Rayon staple fiber is
already under allocation, subject to Wool Conservation
Order M-73, but after October 1 the allocation will be
handled under the new Order M-176. Under the new
order, W P B will periodically inform producers of the
percentage of production to be set aside each month. Each
wool manufacturer’s share of the pool will be based upon
a percentage of the new wool he processed during the first
half of 1941. The order provides for re-allocation of
staple fiber not taken by manufacturers to whom it was
first assigned. It also provides that no manufacturer may
resell unprocessed rayon staple fiber to any person other
than the producer from whom it was originally purchased.
No rayon staple fiber purchased under the new order may
be used in the manufacture of floor coverings, tapestries,
or upholstery fabrics.
COTTON STATISTICS
Spot cotton prices slowly declined during July and early
August, falling from an average of 19.88 cents per pound
for middling grade, 15/16-inch staple on 10 Southern
spot markets on July 3 to 18.53 cents on August 14, a
drop of $6.75 per bale. The average price at mid-August
1941 on the same markets was 15.74 cents per pound.
The decline last month appeared due chiefly to favorable
development of the 1942 cotton crop.
The first forecast on production of cotton was made
on August 8 by the Department of Agriculture, and indi­
cated a yield of 13,085,000 equivalent 500-pound bales
against 10,744,000 bales ginned in 1941 and a ten-year
average of 13,109,000 bales. The 1942 crop as forecast
is the largest since 1937 and 22 per cent above the 1941
yield. In the Fifth district, all states show higher yields
than a year ago, Virginia increasing 18 per cent, North
Carolina 28 per cent, and South Carolina 107 per cent,
but it should be pointed out that the 1941 yield in South
Carolina was the lowest in 60 years. Prospective yield
figures for Fifth district cotton growing states are shown
on page 6.
COTTON

CONSUMPTION

AND
July
1942

ON

HAND— BALES

July
1941

Fifth district states:
418,737
Cotton consumed '..................... 471,112’
Cotton growing states:
Cotton consumed .....................
855,375
792,576
Cotton on hand July 31 in
Consuming establishments . . 1,773,559 1,473,873
Storage & compresses ........... 7,300,449 9,299,922
United States:
Cotton consumed .....................
995,041
929,782
Cotton on hand July 31 in
Consuming establishments . . 2,252,690 1,876,776
Storage & compresses ........... 7,632,193 9,703,976
Spindles active ....................... ..23,111,848 23,028,082

Aug. 1 to July 31
This Year Last Year
5,249,523

4,423,350

9,527,524

8,289,069

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

...........

11,172,328

9,721,703

The total carry-over of cotton into the new cotton year
which began on August 1 was approximately 10,590,000
bales, o i which about 6,200,000 bales was “ free” cotton,
including mill stocks, and 4,400,000 bales were held in
Government loan stocks. This carry-over compares with
12,166,000 bales into the 1941 cotton year, and the record
carry-over of 13,033,000 bales in 1939. Carry-over plus

MONTHLY REVIEW

6

prospective production this year indicates a supply of 23,675,000 bales of cotton available for the 1942-1943 cotton
year, as compared with 22,910,000 bales which were avail­
able during the 1941-1942 year. The prospective increase
in yield this season more than compensates for the decline
in carry-over stocks.
TOBACCO MANUFACTURING
Cigarette production in July 1942 again established a
new record and reached the twenty billion ma^k for the
second consecutive month. Cigars made in July also ex­
ceeded those made in July last year, but the production
of chewing and smoking tobacco and of snuff was lower
this year. Production figures released by the Bureau of
Internal Revenue on August 22 are as follows:
July 1942
Smoking & chewing
tobacco, pounds ...............
Cigarettes, number ...............
Cigars, number .......................
Snuff, pounds ...........................

23,818,062
20,875,470,140
510,823,310
3,194,908

June 1942

July 1941

24,579,958
25,246,366
20,003,674,760 18,404,257,790
532,390,210
487,033,145
3,226,884
3,588,223

RETAIL AND WHOLESALE TRADE
DEPARTMENT STORE TRADE

Attention is called to the new arrangement of the table
on retail trade as reflected in department stores. The
table contains all the data heretofore shown, and in addi­
tion carries two new items giving the percentages of col­
lections in July to receivables outstanding on July 1. One
new item shows collections on current or open accounts,
and the other shows collections against instalment con­
tracts. The marked influence of Regulation W on col­
lection percentages this year is shown by the correspond­
ing 1941 percentages, included in parentheses immedi­
ately after the July 1942 figures.
Richmond
Baltimore Washington
Other Cities
District
Change in July 1942 sales in comparison with sales in July 1941:
+ 14
+13
+19
+10
+13*
Change in Jan.-July 1942 sales in comparison with sales in Jan.-July 1941:
+ 15
+21
+ 26
+ 24
+20*
Change in stocks on July 31, 1942 compared to stocks on July 31, 1941:
+ 70
+61
+78
+40
+67
Change in outstanding orders on July 31, 1942 compared with July 31, 1941:
—14
— 1
—18
— 8
— 12
Charge in total receivables on July 31, 1942 compared with July 31, 1941:
—22
—25
—17
-2 8
— 21
Percentage of current receivables as of July 1, 1942, collected in July:
50 (33)
58 (40)
56 (41)
53 (36)
55 (39)
Percentage of instalment receivables as of July 1, 1942, collected in July:
22 (15)
24 (19)
19 (14)
18 (12)
20 (15)
♦Includes stores reporting sales only.

RETAIL FURNITURE SALES
Percentage Changes in July 1942 Sales
Comparedwith Compared with
Individual Cities
July 1941
June 1942
-1 6
Baltimore, Md. (1 1 )* .................
+ o
+ 10
Washington, D. C. ( 9 ) * .........
+ 5
— 7
— 37
Richmond, Va. ( 9 ) * .................
— 50
Danville, Va. (3 )*................
+ 2
+ 12
+ 46
Norfolk, Va. (3)*..................
— 26
— 39
Charleston, W. Va. (3)*.......
— 36
+ 1
Huntington, W. Va. (3)*.......
+ 13
— 39
Charlotte, N. C. ( 5 )* ...............
-3 3
+ 18
Columbia, S. C. ( 5 ) * .................
— 14
Greenville, S. C. (3)*...........
+ 5
— 44
Greenwood, S. C. (3)*...........
+ 6
Other Cities (62)*..................
— 31
— 2
Fifth District (1 1 9)*.............
— 20
+ 2




— 16
+ 5
— 17
— 42
— 31
— 30
— 20

+ o
+ 10
— 4
— 8
+ 11
+ 6
+ 2

Net Sales
July 1942
compared with
July
June
1941
1942
— 21
— 4
+ 30
+ 34
+ 11
+ 12
+ 30
+ 20
— 6
— 9
+ 16
+ 6
+ 2
+ 5
— 3
— 5
— 15
— 6
+ 4
+ 25
— 4
+ 6
+ 9
+ 4

LINES
Auto supplies (1 3 ).........
Shoes (4) .........................
Drugs & sundries ( 8 ) ..
Dry Goods ( 7 ) .................
Electrical goods (1 0 )..
Groceries (69) ...............
Hardware (13) . . . . . . . . .
Industrial supplies ( 9 ) . .
Paper & products (1 0 )..
Tobacco & products (6)
Miscellaneous (67) ___
District Average (216)

Stocks
Ratio July
July 31,, 1942
collections
compared with
to accounts
July 31 June 30 outstanding
1941
1942
July 1
— 14
— 3
72
61
+ 41
+ 3
105
+ 33
— *5
52
— 29
— 17
59
— 3
121
+ o
— 16
+ 1
59
+ 8
85
+ 1
+ 27
80
+ 1
—

3

+

2

— *8
— 3

87
78

Source: Department of Commerce.

CROP FORECASTS
The following figures, issued by the Department of
Agriculture, show forecasts of production in 1942 based
on August 1 conditions, compared with final yields in
1941 and in the 10-year period 1930-39, and percentage
changes in acreage this year over or under 1941 acreage.
Yield figures for 1942 marked ( + ) were raised between
July 1 and August 1, and those marked ( — ) were
lowered.
Wheat
Change
Acreage
-1 1
- 7
- 8

(Bushels)
Yield
1930-39
8,342,000
8,643,000
2,154,000
4,807,000
1,364,000
25,310,000

Yield
1941
7,245,000
7,665,000
1,628,000
7,110,000
3,146,000
26,794,000

Yield
1942
6,140,000 —
7,568,000
1,504,000 —
7,657,000 +
3,335,000
26,204,000 —

(Bushels)
16,173,000
32,418,000
12,610,000
43,507,000
22,831,000
127,539,000

15,164,000
32,942,000
12,307,000
52,096,000
22,316,000
134,825,000

16^380,COO35,245,000—
13,051,000 +
43,187,000 —
23,244,000 +
131,107,000 —

Hay (Tons)
467,000
924,000
642,000
744,000
398,000
3,175,000

472,000
1,250,000
793,000
1,071,000
470,000
4,056,000

519,000
1,364,000
875,000
1,148,000 —
558,000 +
4,464,000 —

Irish Potatoes (Bushels)
0
2,997,000
1,920,000
- 4
10,661,000
6,916,000
2,844,000
3,795,000
+ 9
8,182,000
6,636,000
+ 5
2,475,000
+ 8
2,548,000
27,159,000
+ 3
21,815,000

2,200,000
7,519,000 —
3,960,000 —
8,632,000
3,108,000
25,419,000 —

Sweet Potatoes (Bushels)
+ 13
1,071,000
1,040,000
- 3
4,061,000
2,970,000
-1 0
8,354,000
6,880,000
+ 13
5,401,000
4,400,000
18,887,000
- 1
15,290,000

1,440,000 —
4,000,000
7,416,000 —
6,200,000 +
19,056,000 —

%
Maryland

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

West Virginia
North Carolina
South Carolina
District Total
Maryland

Maryland

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

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

West Virginia
North Carolina
South Carolina
District Total

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

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

West Virginia
North Carolina
South Carolina
District Total

...
...
...
..

Maryland ...............
Virginia .................
West Virginia . . .
North Carolina . . .
South Carolina . . .
District Total . .
Maryland

State figures on sales, July 1942 compared to July
1941, were as follows last month: Maryland + 13; Vir­
ginia + 12; West Virginia — 15; North Carolina + 1 ;
South Carolina + 3 3 .

Same Stores, Regrouped
By States:
Maryland ( 1 1 ) * ..........................
Dist. of Columbia ( 9 ) * .............
Virginia (36)*..........................
West Virginia (1 5 )*.................
North Carolina (26)*.............
South Carolina (22)*.............
Fifth District (1 1 9)* .........
♦Number of reporting stores.

W H O LESALE TRADE, 216 FIRMS

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

North Carolina . ..
South Carolina.. . .
District Total . .
Maryland

...........

West Virginia
North Carolina . . . . . .
South Carolina . ..
District Total . .
Maryland ...............
Virginia .................
West Virginia . . .
North Carolina . . .
South Carolina . . .
District Total . .
Maryland ...............
Virginia ............... ,.
West Virginia . . .
North Carolina . . .
District Total . .

North Carolina . . .
South Carolina . . .
District Total . .

(Compiled August 21, 1942)

+ 20
- 1
Corn
+ 2
+ 5
+ 6
- 4
- 3
- 1
- 1
b 5
- 3
- 5
-10
- 5

Tobacco (Pounds)
26,901,000
99,861,000
2,985,000
529,356,000
85,656,000
744,759,000

20,225,000
88,572,000
2,610,000
459,490,000
69,660,000
650,557,000

32,370,000 +
93,805,000 —
2,970,000 —
521,210,000 +
94,500,000 +
744,855,000 +

Peaches (Bushels)
372,000
899,000
285,000
1,938,000
1,424,000
4,918,000

563,000
.1,860,000
590,000
3,167,000
4,095,000
10,275,000

510,000 —
1,909,000 +
570,000 +
2,499,000 43,800,000
9,288,000 +

+ 10
+ 14
+11
+ 11
+ 10

Apples, Commercial (Bushels)
1,911,000
1,905,000
11,085,000
11,800,000
4,317,000
4,288,000
1,009,000
1,505,000
18,322,000
19,498,000
Cotton (Bales)
+ 22
31,000
626,000
+ 6
820,000
+ 1
1,477,000
+ 3

28,000
552,000
406,000
986,000

1,911,000
13,359,000
4,818,000
1,222,000
21,310,000
33,000
705,000
842,000
1,580,000

MONTHLY REVIEW

7

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

INDUSTRIAL

Industrial activity increased further in July and the first half of August,
reflecting continued growth in output of military products. Retail sales increased
during this period, following a decline, on a seasonally adjusted basis, during
the first half of the year.

PRODUCTION

Production

Federal Reserve index of physical volume of
production, adjusted for seasonal variation, 19351939 average = 100.
Subgroups shown are ex­
pressed in terms of points in the total index. By
months, January 1935 to July 1942.
DEPARTMENT STORE SALES AND

STOCKS

Industrial output rose further in July and the Board’s seasonally adjusted
index advanced from 176 to 180 per cent of the 1935-39 average.
Activity continued to increase in the machinery and transportation equip­
ment industries and in other lines producing war products. Shipbuilding ex­
panded further and 71 merchant vessels were delivered in July. These had
an aggregate deadweight tonnage of 790,300 tons— an all-time record for a single
month’s deliveries. In the automobile industry armament production increased
in July to an annual rate of about $5 billion as compared with a peak year’s
civilian output of $4 billion. Iron ore shipments down the Great Lakes reached
a new record of 13.4. million gross tons in July and plans were announced for
improving rail and harbor facilities so that shipments next season could exceed
considerably prospective shipments o f 90 million tons or more this year. Last
season 80 million tons were shipped.
In most other lines of manufacturing and mining, activity in July was main­
tained at about the levels prevailing in June. There were reports that some
plants were forced to curtail operations owing to lack of certain materials, and
further investigations were undertaken to determine present and prospective
availability of material supplies.
Value of construction contracts awarded in July showed a reduction of about
20 per cent from the record level reached in June, according to figures of the
F. W. Dodge Corporation. Declines were reported for most types of construction;
awards for manufacturing buildings, however, increased further and constituted
about one-third of total contracts let. As in June, publicly-financed work
amounted to over 90 per cent of the total. In the first seven months of this year,
awards were about 50 per cent larger than in the corresponding period last year.
Distribution

Federal Reserve indexes of value of sales and
stocks, adjusted for seasonal variation, 1923-1925
average = 100.
By months, January 1935 to
July 1942.

Distribution of commodities to consumers declined less than seasonally in
July. The Board’s adjusted index of department store sales, which had dropped
from a peak of 138 per cent of the 1923-25 average in January to 104 in June,
rose to 117 and sales by variety stores and mail-order houses also advanced, after
allowance for usual seasonal changes. In the first half of August department
store sales increased by more than the usual seasonal amount.
Railroad freight-car loadings increased more than seasonally in July and
rose somewhat further in the first half of August. Shipments of miscellaneous
merchandise, which include most manufactured products, and of forest products
continued to rise. Grain shipments also increased but the rise was less than is
usual at this time of year. Loadings of coal declined somewhat from the high
level of other recent months.
Commodity Prices

Wholesale and retail food prices advanced further in July and the early
part of August, while prices of petroleum products on the East Coast were re­
duced, and those for most other consumer goods continued to show little change.
In raw material markets price declines occurred for cotton, inedible fats and
oils, and some scrap items, particularly non-ferrous metals and paper. Demand
for materials used more exclusively for war products continued strong and prices
of these materials were sustained at ceiling levels.
Federal subsidies were arranged for additional commodities and Government
war risk rates on shipments of imported commodities were reduced. These
actions were taken to bring about price reductions, as in the case of petroleum
products on the East Coast, and to prevent further prices increases, particularly
for imported commodities. About 30 new maximum prices schedules were an­
nounced, chiefly for miscellaneous civilian products, and in some instances these
schedules permitted substantial increases over ceilings set by the General Maxi­
mum Price Regulation.

WHOLESALE PRICES

Bank Credit

1940

1937

Bureau of Labor Statistics’ indexes, 1926 = 100.
“ Other” includes commodities other than farm
products and foods. By weeks, Jan. 5, 1935 to
week ending Aug. 15, 1942.
MEMBER BANK RESERVES
BILLIONS Of DOLLARS

to
TOTAL /

I

/
J
REQUIRED RESERVES ^
______
~ w

r "'
" S
rEXCESS RESERVES

J

N
k

,

1

Excess reserves of member banks declined by about 200 million dollars in the
four weeks ended August 19. An increase of about 400 million dollars of cur­
rency in circulation during this period was paralleled by a corresponding amount
of Reserve Bank purchases of Government securities. There was an increase of
300 million dollars in required reserves resulting from a growth in deposits at
member banks. Excess reserves in New York and Chicago reached the lowest
levels since the third quarter of 1937. Effective August 20 reserve requirements
on demand deposits at central reserve city banks were reduced from 26 per cent
to 24 per cent by action of the Board of Governors of the Federal Reserve System.
This had the effect of converting over 400 million dollars from required to excess
reserves.
Member banks in leading cities continued to increase their holdings of United
States Government securities, particularly in the week ended August 19, in which
delivery of the new HV2 months’ % per cent certificates of indebtedness was
made. Loans, which had declined during the second quarter of the year, have
recently shown little change.
Adjusted demand deposits continued to increase at reporting banks, although
purchases o f Government securities, particularly the 2 V per cent Treasury bonds
2
of 1962-67, by investors other than banks temporarily reduced demand deposits of
individuals and added to United States Government deposits.
United States Government Security Prices

Wednesday figures, Jan. 2, 1935 to Aug. 12,
1942. Required and excess reserves, but not the
total, are partly estimated.




Prices of United States taxable bonds have shown little change during the
past month. Taxable notes of 3- to 5-year maturity are currently yielding 1.26
per cent on the average as compared with 1.20 per cent in July. The rate of
discount on new issues of Treasury bills has averaged 0.372 per cent for the past
three weeks.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102