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MONTHLY

REVI EW

o f Financial and Business Conditions

F i fth
Federal

Reserve
Distr ic t

Federal Reserve Bank, Richmond 13, Va.
P L Y M E N T levels in
E MturalOindustries continue toFifth District non-agriculshow a downward trend.
When this fact is taken into consideration, it is obvious
that the high rate o f job placement in the District by U . S.
Employment Service offices represents labor turnover.
Employment in manufacturing industries for the Dis­
trict as a whole has been trending downward since the end
of 1943. In Virginia this down-trend has continued with
little interruption since the fall of 1942, and in the Carolinas it has been in evidence since early in 1943. Rising
trends of manufacturing employment prevailed
in Maryland and W est Virginia to August 1943
and October 1943, respectively, which offset
employment losses in other states o f the Dis­
trict so that the total manufacturing employ­
ment for the District held on a flat level from
the fall of 1942 through 1943. These changes
are o f too short a duration to expect that in­
creased efficiency o f production had offset the
loss in employment. In fact, in many indus­
tries where turnover has been unusually high, efficiency
has suffered. It would seem reasonable, therefore, to
believe that the trend o f manufacturing production in the
District is also in a slow downward trend.
Evidence has been clear on this point in the case o f
cotton textiles, for the index o f cotton consumption in
the District has been moving down since the spring of
1942.
In November, however, the average daily con­
sumption of cotton was 5 per cent higher than in October.
W hile this may be a result of emphasis placed on heavy
goods such as duck and tenting twills which would use

December 31,1944
more cotton per yard o f production, there is some reason
to believe that cotton textile production may stabilize at
levels not far from those now prevailing.
The bituminous coal industry has done a grand jot) in
holding up the production o f this vital commodity. De­
spite the loss o f the young men to the armed forces and
an overall loss o f workers, production o f coal is still
holding on an even keel near peak levels. September,
October, and November outputs were, however, somewhat
below the trend o f growth o f the past three years.
T ax paid withdrawals o f cigarettes from the
District's bonded warehouses in October were
CTORY
at their lowest level since the middle o f 1942,
but these figures do not include cigarettes
BUY
U N IT E D
manufactured for shipment overseas. It is esti­
STA TE S
WAR
mated that 1944 production o f cigarettes for
fo>NDS
AND
the entire country will total 329 billion com ­
STAMPS
pared with 309 billion in 1943.
Although overall industrial production levels
seem to be receding, farm income in the Dis­
trict will establish a new high record in 1944, with to­
bacco income showing an increase o f more than 40 per
cent and accounting for the largest part o f the increase.
Gains in farm income, together with a generally higher in­
come in other divisions o f industry, have had their influ­
ence on department store sales.
Our seasonally adjusted index o f department store sales
in November rose 12 per cent above the October level and
was 17 per cent higher than in November 1943. This
raised the November index o f sales to the highest level
on record.

BUSINESS IN D E X ES— FIFTH FEDERAL RESERVE DISTRICT
Seasonally Adjusted
Average Daily 1935-39 = 100
Nov.
Bank Debits ........................... ..................................
Bituminous Coal Production*....
Building Contracts Awarded .
Building Permits Issued . . . . . . .
Cigarette Production ..................
Cotton Consumption* ................
Department Store Sales ............
Department Store Stocks ..........
Retail Furniture Sales ..............
Life Insurance Sales ..................
Wholesale Trade— Dry Goods .

* Not seasonally adjusted.



1944
226
143
81
48
162
149
251
161
166
137
182

Oct.
1944
205
145 r
72
48
152
142
224
171
163
146
175

Sept.
1944
222
146
121
40
153
141
214
181
150
138
156

Nov.
1943
197
124
207
50
194
153
215
155
133
120
174

% Change
Nov. 1944 from
O ct/4 4
N ov/4 3
+15
+10
— 1
+15
-6 1
+13
0
— 4
— 17
+ 7
--- J
+ 5
+12
+17
— 6
+ 4
+25
+ 2
— 6
+14
+ 4
+ 5

MONTHLY REVIEW

2

RURAL-FARM LEVEL OF LIVING INDEX
(UNITED STATES AVERAGE = 100)
FIFTH

FEDERAL RESERVE

DISTRICT, BY COUNTIES: 1940

©

LEGEND
I

I Under 64 index units

O H

64 - 75 index units

W
7
A

76 - 87 index units

H H g 88 - 99 index units
100
H

112-123 index units*

* INCLUDES
AREAS
AND

SOURCE: U.S. DEPARTMENT




OF

AGRICULTURE.

-III

OF
THE

FEDERAL

THE

SPECIALLY

ARLINGTON
DISTRICT

RESERVE

DEFINED

URBAN

COUNTY, VIRGINIA
OF

BANK

COLUMBIA.

OF RICHMONO; NOVEMBER, 1944.

MONTHLY REVIEW

3

Rural-Farm Levels of Living in the Fifth District
Theoretically, the concept of level of living is not a
difficult one either to grasp or to define. The level o f
living of any family or community is the level o f total
well-being to which it is accustomed. This, then, em­
braces all the economic aspects o f life as well as the
emotional and intellectual aspects. The level o f living
o f a community is the net result o f the cultural environ­
ment o f its people, their average income, the way they
dispose o f the income, their educational attainments, forms
o f recreation, and so forth. It is also the function o f their
physical environment, especially as it affects their means
o f making a living and their ease of contact with the goods,
services, and ideas o f the world beyond the limits o f their
community. Between any two communities, variations in
any one or more of these contributory factors will result
in relative differences in their respective levels of living;
and a change in any one or more of these factors, within
a single community, will result in an upward or down­
ward alteration o f its absolute level o f living.
It is one thing, however, to speak o f levels of living in
the theoretical sense, and quite another to attempt the
statistical measurement o f a given community’s level of
living or the statistical comparison of the levels o f living
of two or more communities. Many o f the more impor­
tant ingredients of the total.level o f living are intangible,
and are not subject to objective measurement. Further­
more, items which may be very important to one commu­
nity may not be found in others, yet the only basis o f com­
parison is one which utilizes common attributes which
can be measured objectively. Finally, there is the me­
chanical difficulty of handling a vast number of different
partial measurements, weighting them fairly according to
their importance, and combining them into a mathematical
value which is validly comparable with many other simi­
lar values, each applying to a single small area. This
problem has challenged the attention o f many students of
economics and sociology, and, although it may never be
completely solved, has resulted in several very useful
measures o f level o f living, by one standard or another.
In spite o f many variations in specific instances, there
has been a surprisingly close agreement between the find­
ings of several workers in this field o f study.
The United States Department o f Agriculture has made
a comprehensive study1 o f levels o f living based on the
Census of 1940. This is the most recent study o f this
kind which permits the implicit or explicit comparison of
any county in the country with any or all others. The
rest o f this article will be based on this report.
The

N a tu re

of th e

USDA

Study

The U S D A study was undertaken with a clear under­
standing o f the difficulties and shortcomings o f the sta­
tistical approach. In order to assure comprehensiveness
and comparability between the final county indexes, it
was decided that all the basic data be taken from the S ix­
teenth Census o f the United States (1940). The prob­
lem became, therefore, one of selecting from this source
1 Margaret Jarman Hagood, Rural Level of Living Indexes for Counties
of the United States, 1940 (USDA, Bureau of Agricultural Economics;
Washington: October 1943) 43 pages, mimeographed.




those items which would best measure the total well­
being o f all the counties o f the nation and o f combining
these items into a valid index. The following five items
were finally selected:

1. Percentage o f occupied dwelling units with fewer
than 1.51 persons per room.

2 . Percentage o f dwelling units with radios.
3. Percentage o f farms with gross income o f more
than $600.
4. Percentage o f farms reporting autos o f 1936 or
later models.
5. Median grade o f school completed by persons 25
years o f age and over.
The use o f the above five items to compose the index
does not mean that the rural-farm level o f living com ­
prises only these five aspects o f life. On the contrary,
these items were selected after careful study and the
application o f many different criteria to the several hun­
dred possible items found in the Census. Thus, each o f
the above items not only measures a concrete ingredient
of total well-being or is logically related to an intangible
one, but each final item also shows a very high correlation
with every one o f a large group o f other items which
could have been used. For example, in counties with
large proportions o f the dwelling units having fewer than
1.51 persons per room the degree o f individual privacy is
higher, there is more room for the amenities o f life, people
have more “ things” about them to assist them enjoy life.
Again, the presence o f radios was found to correlate
highly with the presence o f electric lights, other electrical
appliances, running water, et cetera. High incomes not
only imply generally favorable economic environment, but
also indicate the wherewithal to possess and enjoy the
many goods and services which can only be purchased
with money. Late model cars mean travel, contact with
other people, widened recreational opportunity, and all
the economic and social advantages which go with good
roads. Finally, “ — in a county where the median grade
of school completed by rural persons 25 years o f age and
over is relatively high, the proportion completing college
will likely be high also, probably the proportion o f time
spent by persons in reading will be high, and we should
expect to find greater than average degree o f participa­
tion in the various organizations o f the rural communi­
ties o f the county .,,2
W ith these five items properly weighted and com ­
bined, it became possible to assign to each county a final
index number which measured its level o f living in terms
of the United States county average, rather than in terms
of a set standard. Thus, this index is a relative rather
than an absolute one. In selecting the final items, it was
necessary to keep in mind the national scope o f the com ­
parisons, therefore the only items which could be used
were those which were not merely sectional in their appli­
cability. For this reason, certain items which might be
the very best for use in a regional index had to be left
out because they were not uniformly applicable to the

2Ibid,

page 2.

MONTHLY REVIEW

4

entire country. W ith respect to the Fifth District this
becomes a definite limitation upon the meaning of the
index. The degree o f farm tenancy or the racial com­
position of the population for example are both excellent
components of a measure of ’ level of living in the South­
east ; but they could not be used because neither is as good
as a measure of the level of living in, say, the North Cen­
tral States where an entirely different social and economic
pattern o f rural life is found. If an index were devel­
oped for the Fifth District alone, therefore, it might show
different county relationships, within the District, from
those shown by the U S D A index.
T h e G e o g r a p h ic a l D is t r ib u t io n of L e vels of L iv in g
in

the

F if t h

D is t r ic t

In comparison with the national county average o f 100,
the county averages o f the Fifth District states a re :
Maryland, 108; Virginia, 8 6 ; W est Virginia, 8 5; North
Carolina, 84; and South Carolina, 69. However, as the
accompanying map clearly demonstrates, a wide range o f
values will be found in each state. The extreme coun­
ties o f the states, and their values, are:
M a r y l a n d — Kent,

122; Calvert, 92.
Fairfax and Loudoun, 112; Buchanan, 53.
W e s t V i r g i n i a — Ohio (not in the Fifth District),
114; Jefferson, 113; L ogan, M cD ow ell, and M ing o , 54.
N o r t h C a r o l i n a — Guilford, 103; Swain, 60.
S o u t h C a r o l i n a — Greenville, 8 8 ; Beaufort, 46.
V ir g in ia —

A s an examination o f the map indicates, there are some
noteworthy features in the geographical distribution o f
rural-farm levels o f living in this District. In the first
place, a general North-to-South gradation is apparent.
In the second place, the broad regions defined by differ­
ences o f level of living tend to ignore state lines. In
the third place, the several classes tend to group into
somewhat compact clusters rather than to scatter widely.
W hile it would be impossible to set forth all the causal
forces which have led to the final pattern of rural-farm
prosperity and proverty, some o f the more important will
Joe taken up below.
The population class which is under scrutiny in this
connection is the rural-farm group, by Census definition.
Since all the persons in this class reported themselves as
living on farms, any factors which affect the profitability
of a country’s agriculture will strongly influence the level
of living found therein. The most important determi­
nants of the average net farm income per capita are the
concentration o f farm persons per unit o f land, the fer­
tility o f that land, and the perfection of agricultural ad­
justment to the natural and economic environment. In
this District, the most fertile soils and the lowest density
o f farm persons to arable land are found in the north­
eastern parts o f Maryland and Virginia, and in the Great
Valley o f Virginia and W est Virginia. M oving North
and East from Tazewell County, Virginia, these two
geographic regions o f the District are clearly defined:
almost without exception the counties so located have in­
dex values in excess o f 88 and form a high-value back­




bone for the upper half o f the District. W hile soils and
farm population densities vary throughout the rest of
the District, their effects are so modified by other factors
that no clear effects may be seen. However, the de­
pressed nature o f the southern cotton economy during the
thirties is reflected in the very low values found through­
out most o f South Carolina, and this is undoubtedly ac­
centuated by the high rural population densities found in
soil areas which have been deteriorated by long use under
soil-depleting crops.
Throughout the entire District, one of the most con­
sistent relationships is that found between the rural-farm
level o f living and the presence of the larger urban cen­
ters. In almost every instance, there is a distinctly
higher level o f living found in the vicinity o f the larger
cities and towns o f the District than will be found in
other similar counties farther removed from an urban
center. W hile it is impossible to generalize about which
is cause and which is effect, several things may be said
concerning this relationship. Towns and cities develop
for many different reasons, one o f which is the presence
o f prosperous agricultural markets in the surrounding
hinterland. In these latter cases, prosperous farming
areas give rise to towns which serve their needs as sources
o f necessary non-farm goods and services, and as con­
venient markets for their produce. In many other cases,
the town or city developed for reasons which, agricultur­
ally speaking, are completely fortuitous. The presence
of relatively important industrial raw materials, location
with respect to important arteries of trade or transpor­
tation, the prior existence o f some important govern­
mental function at a particular location, et cetera, mav
have provided the nucleus around which an urban center
grew. Regardless o f how it came to develop, the pres­
ence of a large city is extremely important to the pros­
perity o f the surrounding countryside, even though the
absence of one does not necessarily cause a depressed
agriculture. The city provides a ready market for many
special agricultural commodities, such as dairy products
and truck' crops, and this market is so protected and so
constant in its demand that it tends to insure a highly
prosperous market agriculture. Then too, the city pro­
vides a great deal o f extra, non-farm income through the
part-time or full-time employment o f members o f the
farm household. Finally, the presence o f all the con­
veniences o f life within the city acts as a stimulant and,
by its example, tends to raise the standards o f neighbor­
ing farm families.
Although all cities within the District do not seem to
have this effect on their surrounding counties, the centers
o f Washington, Baltimore, Richmond, and the Hampton
Roads cities appear to exert very strong influences. Then
too, in the northern and western parts o f W est Virginia
and throughout North Carolina, almost all the counties
which rise above the surrounding regions either contain
cities within their borders or are very close to cities and
towns o f 10,000 population or more. In South Carolina,
this relationship is not so clear, but, even there, some
larger cities exert noticeable influence on the levels of liv­
ing in adjacent counties.
In many sections o f the South, especially, during the
last decade or so, there has been a considerable growth o f

MONTHLY REVIEW
decentralized industry in rural regions. This has oc­
curred for a number o f different reasons which are be­
yond the scope of this paper. Regardless o f whether they
are found in cities, villages, or in the open country, in­
dustries create a surrounding community of specialized
persons who buy their daily needs and whose income
is not derived in competition with the region’s agriculture.
Thus, the decentralization of industry into the South’s
rural areas has tended to raise farm levels o f living by in­
jecting new income, by removing many persons from
agriculture, and by providing new markets for local pro­
duce.
T he

F uture

It has been shown that the index of rural-farm levels
o f living provided by the U S D A is by no means defini­
tive and is subject to distinct limitation when applied to
the Fifth District. In spite o f this, it does allow a
more precise measurement o f relative levels of well­
being between the several counties o f the nation, as well
as the implicit comparison o f Fifth District counties with
the rest o f the country. Space does not permit an ex­
haustive examination o f all the root causes o f the Dis­
trict’s pattern o f relative agricultural prosperity, as measused by this index, but enough has been set forth to show
that these causes are basic to our regional way o f life. It
is worthwhile, therefore, to canvas some o f the future
prospects which are implied by the present situation.

5

So far as the absolute levels o f living found in this
District are concerned, their future values will depend
on the future o f the region and the nation. Develop­
ments which reduce the dependence o f large segments of
the population on agriculture, whether by a change o f
local occupation or by actual migration, will result in
improvements in the levels o f living o f those left on the
farms. The introduction o f more efficient agricultural
methods, or o f new cash crops, also will raise the farm
level o f living. The same results will follow the opening
o f new markets, either local or distant, or the expansion
o f old on es; these can occur through improvements in our
foreign trade, more national distribution o f Southern
farm products, continued growth o f Southern cities, or
the further growth o f decentralized industry in this re­
gion. Finally, the attainment and maintenance o f a high
general level o f prosperity will enhance farm life, for,
in the last analysis, farm and city are but two aspects of
the total economy, and prosperity in one eventually will be
reflected in the other.
Should the above developments affect the agriculture o f
the country with general equality from region to region,
the absolute levels o f living in all will rise, but the relative
levels (as measured by an index such as the one under
discussion) need not be changed. The District’s relative
standing can not be raised by national improvements, but
only by the solution of the many pressing problems which
are particular to this region.

Goal Mining Industry of the Fifth District
Coal mining is one o f the most important industries in
the northwestern part of the Fifth District. The coal
map of the United States Geological Survey shows no
coal in South Carolina, one small field (apparently not
worked) in North Carolina, and a few small fields scat­
tered over the eastern half o f Virginia (not now o f any
commercial importance) ; active mining is concentrated
in W est Virginia, the western tip o f Maryland, and south­
west Virginia. Almost all the coal mined in this District
is bituminous or “ soft” coal. A little semi-anthracite is
mined in Virginia, so little that it has been combined with
bituminous for this discussion. Tw o main types o f min­
ing operations are found in this region, deep mining and
stripping. The former is the type usually thought o f as
being characteristic o f the industry, and consists o f driv­
ing shafts into the earth in order to reach the beds, which
are then worked by means o f gradually expanding sub­
terranean galleries. Strip or open-pit mining, on the
other hand, is often practiced where the coal beds are
near the surface, and consists of scraping or shoveling
away the earth-cover and removing the exposed coal.
Although implying entirely different working methods
and surroundings, these two types o f mining seldom will
be differentiated herein.
T he

I m p o r ta n c e of C oal M in in g
U n it e d

in

the

S tates

According to the best estimates o f geologists, there are
sufficient coal reserves in the United States to last for the
next several centuries at current rates o f depletion, placing




this country among the most fortunate o f the world in
this respect. Since there is no reason to think that all
coal reserves have been discovered or that means may not
yet be found to mine coal now considered commercially
non-recoverable, this country need not fear early exhaus­
tion o f this mineral. The future o f the industry depends
on so many currently unknown factors (fo r example:
the substitutability o f the several energy sources, the de­
pletion o f some competing fuels, possible discovery o f
entirely new uses for coal, alterations in the cost level o f
coal production resulting from changes in mining tech­
nology, etc.) that no attempt will be made herein to fore­
cast it.
T w o o f the most important economic aspects o f coal
mining are the employment which it provides and the in­
comes which are derived from it. In 1940, this industry
provided employment for approximately 527 thousand
persons, or 1.2 per cent o f total national employment.
During the previous year, it produced products valued at
$731 million, or eight-tenths o f one per cent o f the year’s
total national product. M ajor attention herein will be
given to these aspects o f the industry.
B it u m in o u s

C o a l P r o d u c t io n

The United States Bureau o f Mines provides a series
of coal production statistics which is continuous and con­
sistent for many years. In this discussion, annual pro­
duction figures from this source will be utilized for the
years 1917 to 1943. During the five years 1917-21,
average annual national production o f bituminous coal

MONTHLY REVIEW

6

PRODUCTION BY COUNTIES IN THE MAJOR COAL BEDS
FIFTH

FEDERAL RESERVE

DISTRICT,

1939

Major coal beds
Number in each county
indicates thousands of
net tons of coal mined
during 1939.

PERCENTAGE CHANGE IN COAL PRODUCTION, 1939-1943
FIFTH

FEDERAL RESERVE

DISTRICT, BY

COUNTIES

LEGEND
200-900 % increase
100" 399 % increase
50 - 99 % increase
1-49 % increase
H I" 13 % decrease
|:;;: 50" 100 %

□
note:

SO URCES:

decrease

No coal reported mined
in either year
no

c o u n t ie s

D EC R EASES

sh o w ed

OF 13*50

U.S. GEOLOGICAL SURVEY;
MARYLAND BUREAU OF M IN ES;
VIRGINIA DEPARTMENT OF LABO R
AND INDUSTRY; WEST VIRGINIA
DEPARTM ENT OF MINES.




FED ERAL

RESERVE

BANK OF

RICHMOND.

MONTHLY REVIEW
was 516 million net tons, 19 per cent of which was pro­
duced within the Fifth District. During the period 193943, average annual production was 506 million net tons,
31 per cent of which was produced in this District. Over
this entire period the national bituminous industry was
subject to a trend o f slow decline which was not shared
by the Fifth District. This trend was downward both
in absolute amounts o f coal mined and in relationship to
the national total o f industrial production. For the pe­
riod 1919-42, the Federal Reserve Board’s index o f in­
dustrial production shows that, while fluctuating approxi­
mately with total industrial production, bituminous coal
production has been subject to a long-term relative de­
crease. If 1919 is taken as the base year for both series,
total industrial production rose from 100 in that year to
153 in 1929, and fell slightly (to 151) in 1939; on the
other hand, coal production rose from 100 in 1919 to 116
in 1929, and fell to 85 in 1939. In both series, the year
1938 was the pre-wT low year. From 1938 to 1942, total
ar
industrial production more than doubled, while coal pro­
duction rose by only 65 per cent. These relationships are
not difficult to explain. In the first place, there has been
a long-run relative decrease in the use of coal in this
country brought about by ( 1) the increasing competition
o f other fuels and power sources and ( 2 ) increasing effi­
ciency in the use of coal for all purposes. In the second
place, the wartime expansion of total production has been
accomplished more by the vast increase of employment
and productivity in specific war-industries (such as air­
craft and munitions) than by a general expansion of all
the older peace-time industries (such as coal).
T h e N a t u r e of t h e
the

C oal M in in g

I n d u str y W it h in

F i f t h D is t r ic t

The first of the accompanying two maps shows all the
known coal beds within the Fifth District except the small
unworked bed in central North Carolina and a few doubt­
ful ones in Virginia. This map also indicates the approxi­
mate total production of all counties in which active min­
ing occurred during the calendar year 1939, which was
chosen as representing a fairly typical prewar level o f
activity. The second map indicates the percentagewise
change in production between 1939 and 1943, most o f
which probably can be ascribed to the direct or indirect
effects of the war. A comparison of these two maps leads
to the conclusion that relatively moderate percentage in­
creases have characterized the heavier producing counties,
while both decreases and sharp increases in production
have occurred in the counties with low volumes o f pro­
duction .1
Speaking of the characteristics o f the coal mining in­
dustry in the Fifth District virtually means speaking o f
the industry in WT
est Virginia. This state accounts for
almost nine-tenths of the District’s coal-mining activity,
so that its characteristics dominate any District averages
w hich may be struck. The following table indicates the
T
relative importance of the three states to the District and
the United States totals:
1 It should be remembered that, while moderate relative to the large per­
centage changes which took place in counties with low production, the
increases of the heavy coal counties constituted the greater part of the
jijcrease in total production taking place between these two years.




7
COAL PRODUCTION IN THE FIFTH DISTRICT
1839-43 Averages
Amount
(1,000
net tons)

AREA
Maryland ...............................
Virginia ...................................
West Virginia .....................
Fifth District .....................
Source:

Per Cent of
United States
Total

Per Cent of
Fifth District
Total

1,686
17,148
138,117
156,951

0.3
3.4
27.3
31.0

1.1
10.9
88.0
100.0

United States Bureau of Mines.

Since 1917, the states o f the Fifth District have tended
to follow somewhat divergent paths of coal production.
Maryland’s production shows a decreasing trend, moving
from almost 5 million tons in the earlier year to about 2
million in 1943. At the same time, production in Virginia
and W est Virginia have almost doubled, in the former
state from a 1917 figure of 10 million tons and in the
latter f om a 1917 figure o f 86 million tons.
According to the Census o f 1940, 129 thousand persons
in the three coal states o f this District listed coal mining
as the industry o f their employment. This comprised the
following proportions o f each state’s total employment in
that yea r: Maryland, 0.4 per cen t; Virginia, 2.2 per cen t;
and W est Virginia, 20.4 per cent. This same source
shows that for the three decennial years of 1919, 1929, and
1939, the total employment o f the three states’ coal min­
ing industry varied between 111 thousand and 120 thou­
sand persons, o f whom more than 90 per cent were classi­
fied as wage earners (that is, other than administrative,
clerical, and supervisory w orkers). In Maryland, total
employment declined during each decade; in Virginia it
increased; while in W est Virginia, 1929 was the year of
highest employment, followed by 1939. The final selling
value o f the products produced by these persons and the
proportion paid out to wage earners are shown in the fol­
lowing table:
VALUE OF PRODUCTS OF COAL MINING AND PROPORTION PAIDOUT AS WAGES, FIFTH DISTRICT; 1919, 1929, 1939
Value of Products
(1,000 dollars)
AREA

1919

Maryland .................
Virginia ...................
West Virginia ..........
Fifth District ..........
Source:

1929

1939

8,196
23,763
193,108
225,067

4,745
21,162
217,023
242,930

2,978
24,994
190,668
218,640

Census of 1940:

Wages as Per Ct. of
Value of Products
1919

1929

65.7
54.5
54.8
55.1

65.6
56.0
58.2
58.4

1939
69.6
63.1
62.7
62.9

Mineral Industries, 1939.

It will be noted from this table that the share o f total
value received by wage earners tended to increase over
each decade in each state.2 Because of the uneven pace of
the industry’s development, geographically, it is hard to
determine the true sequence of cause and effect in this
connection, but a very probable explanation suggests it­
self, in view o f known circumstances. The increasing
competition of other fuels, or even other coal-producing
regions, coupled with decreasing relative demand via im­
proved combustion efficiency, caused the gradual mechani­
zation (see below) of coal mines in this and contiguous
regions. Mechanization presumably took place because
the operators thought that the resulting reduction of labor
costs would allow reductions in total costs o f production
2 It should not be assumed that the increases in each state have necessarily
followed from the same causes. The changes in this proportion result
from simultaneous changes in the volumes of employment and production
and in the levels of coal prices and mine wages. These variables behaved
differently in each state.

8

MONTHLY REVIEW

(net, after allowing for the new costs attendant on the
use o f the machinery) that could be used to restore com­
petitive position and/or to maintain or increase profits per
unit sold. Over this same general period, though with an
appreciable time-lag, the gradual unionization o f the in­
dustry took place, first in the northern areas, and finally
in the southern ones (including most o f this District).
Since mechanization generally increases the productivity
per manhour, and since miners are usually paid on a piecerate rather than a time-rate basis, this would permit con­
siderable reductions in the piece-rates paid machine miners
without reducing their hourly wages. However, union
membership included pick-miners (in unmechanized
mines) as well as machine-miners, and the unions could
not allow reductions in the piece-rate on pick-mined coal.
Thus, in addition to their efforts generally to maintain
employment and to better weekly mine wages, the unions
strove to prevent the elimination of the non-mechanized
mines by the competitively stronger mechanized mines.
The net result was that, in union mines, the wage-rate for
pick-mining remained at least at its previous level, while
machine-mining rates were not reduced to the point o f
weekly-wage-parity. In non-union mines, rates tended
to follow, although a relatively constant differential did
exist. For the entire industry, the net effect was to in­
crease total labor costs; but the same factors which had
provided the initial incentive for mechanization now pre­
vented the operators from passing this cost increase on
in the form o f higher coal prices at the mine-mouth.
Finally, increasing union strength introduced such down­
ward inflexibility to the general mine wage level as to
prevent restoration o f the operators' margin.
The above analysis should not be interpreted as a con­
demnation o f either the mine operators or the mine unions.
Trade-unionization is an established aspect o f modern
industry. In the short-run it is to be expected that the
unionization o f an industry will have some effects on costs
o f production, usually through its influence on wages, em­
ployment, a n d /or the length o f the work-week. In the
past, these factors have often resulted in increased costs
o f production relative to final prices o f output, and in
concomitant reductions in relative profits. This tendency
is made more apparent by the fact that unionization does
not affect every industry to the same degree at the same
time. In the long-run, especially if the entire economy
is finally and completely unionized to the same degree,
many o f these profit-inequities ultimately may disappear.
In fact, under conceivable circumstances the effects of
widespread unionization might be to increase total e f­
fective demand and so restore or even enhance operators’
profits.
In this connection, it is interesting to note the relation­
ship which exists between coal mining and other indus­
tries with respect to earnings. The Bureau o f Labor
Statistics has calculated the average weekly earnings o f
workers in certain industries or groups o f industries, for
the entire United States. Some idea o f the relative level
o f earnings in coal mining between 1933 and 1941 may
be obtained by expressing the average weekly earnings o f
coal miners as a percentage o f the averake weekly earn­
ings o f workers in all manufacturing industries. This
proportion varied from a low o f 82 per cent, in 1933, to a




high o f 100 per cent (parity), in 1936. From 1934 fo r­
ward, coal miners’ earnings did not fall below 91 per cent
o f earnings o f all manufacturing workers nor rise above
100 per cent.
I f W est Virginia is taken as representative o f the in­
dustry in the Fifth District, there was little long-term
change in either the money-wage o f coal miners or its
purchasing power (in terms o f 1935-39 dollars) between
1925 and 1939. W age figures published by the W est V ir­
ginia Chamber o f Commerce, taken from data o f the
W orkm en’s Compensation Fund, show cyclical movements
o f the average annual money-wage from its pre-depres­
sion high of $1,650 (in 1925-6) to its depression low o f
$703 (in 1932-3) to its post-depression high o f $1,324
(in 1936-7). W hen deflated in terms o f the Bureau
o f Labor Statistic’s Index o f Cost o f Living ,3 the range
o f variation is narrowed appreciably, and generally drop­
ping costs o f living tended to more than offset the slight
downward movement o f money-wages. Since the effects
o f the current war first became felt in 1939-40 in the
form o f longer hours and increasing overtime pay,
money wages rose from an annual average o f $1,532, in
that year, to $2,649, in 1943-4, a much sharper rise than
occurred in average costs o f living. Thus, leaving out
the trough-years o f the depression, coal miners in this
District have tended to receive a generally increasing
real wage, even though the increase has not been drastic.
The relative wage levels, as between the three coal
states o f the District, is rather difficult to determine.
However, taking the Census figures for 1939 as a basis
of comparison and expressing each state’s average annual
wage as a percentage o f the lowest one, the relative wage
levels would be: Maryland, 100; Virginia, 106; and West
Virginia, 129. It should be noted that the relationship
is not at all constant over time and that, in 1929 ( o f the
three decennial years), average wages in Virginia fell
below those in Maryland.
One o f the most important developments in this indus­
try, since it affects employment, productivity, earnings,
and costs, is the trend o f mechanization. Regardless o f
whether or not operators have been able to profit by
mechanization to the degree anticipated, there has been
a steady increase in the application o f machine processes
to coal mining since 1919. According to the Census, the
national average number o f installed horsepower per wage
earner in this industry increased from 3.9 to 9.0 during
the two decades 1919-39. In the Fifth District the rate
o f increase lagged slightly behind the nation, but still
almost doubled over this period. By 1939, W est V ir­
ginia averaged just over 8 horsepower per wage earner,
while Maryland and Virginia averaged about 5.5. This
increase in mechanization followed advances in mine
haulage, ventilation, loading and cutting, as well as in
many miscellaneous processes. So far as the technology
o f mining is concerned, mechanical loading and hauling,
on the one hand, and mechanical cutting, on the other, are
the most important aspects o f this development.
3 This index series (1935-39=100) refers primarily to costs of living in the
larger cities of the country, and is not designed to reflect the prices
found in the mining communities of a small section of the nation. How­
ever, it can be assumed that the costs of living in the part and the
whole probably tended to move along parallel paths, even though short­
term fluctuations may not have been of the same order.

MONTHLY REVIEW
The mechanical cutting of coal was introduced in this
country prior to 1890, and spread with considerable ra­
pidity. By 1919, about three-fifths o f all the coal mined
underground was machine cut, in contrast with that mined
by hand or “ shot off the solid ”.4 The proportion o f ma­
chine cut coal rose to 78 per cent in 1929, and to 88 per
cent in 1939. In this latter year, in the Fifth District,
less than half the coal mined underground in Maryland
was machine cut, while over 90 per cent was so mined in
Virginia and W est Virginia. In contrast to cutting, the
loading and conveying o f coal from the working face to
the outside was not fully mechanized until about 1920. In
1923, the first year for which statistics are available, the
Census found that only three-tenths o f one per cent of
the nation’s coal mined underground was mechanically
loaded. This proportion had risen to 7 per cent in 1929,
and to 31 per cent by 1939. In this District, a definite
lag is apparent. By 1939 there was only one mine in
Maryland which reported mechanical loading o f under­
ground coal. In Virginia, 18 per cent o f underground
mined coal was loaded mechanically, and in W est V ir­
ginia, 28 per cent.
The total value o f products of coal mining is not only
important to the wage earners employed in the industry,
but is very important to the operators and to the total
community (county, state, or nation) o f which the in­
dustry is part. The income-importance of coal mining
to the states o f the Fifth District could best be meas­
ured in terms o f the proportion which it contributed to
the net income o f the community, but this relationship
cannot be measured exactly. In the first place, value of
products is a gross figure and contains items (deprecia­
tions, taxes, etc.) wT
hich are duplicated elsewhere in the
economy. In the second place, the total value o f coal
produced within any given state may not remain within
the borders of that state, but may become income (through
the disbursement o f insurance premiums, royalties, divi­
dends, etc.) of persons residing elsewhere. It seems
logical to assume that, in an industry which is located in
such a compact area touching on three contiguous states,
there should be little variation in each state’s proportion
o f gross value o f product which should be deducted for
4 This latter term refers to coal broken down by blasting at the working
face without undercutting or otherwise weakening the mass. Because
of the attendant dangers, this type of mining is prohibited in many
states.




9

the above reasons. Thus, it is probably safe to compare
Maryland, Virginia, and W est Virginia on the basis o f
“ gross value o f coal” as a proportion of “ net income pay­
ments to individuals” . For Maryland, these proportions
were .4 per cent, in 1929, and .3 per cent, in 1939; for
Virginia, they were 2.1 and 2.5 per cent, respectively;
while for W est Virginia, they were 27.3 and 26.7 per cent,
respectively. It will be noted that these proportions are
quite similar to the proportions o f total employment pro­
vided by the industry, given above.
Unfortunately, no material has been found which cov­
ers the net profit or loss accruing to coal mine operators
in the District’s coal-producing states. Even at the na­
tional level, a complete and realistic profit-loss accounting
cannot be made. The United States Treasury Depart­
ment has compiled the corporate income returns from
this industry, for the national as a whole, and this con­
stitutes the best known source o f data. W ith reserva­
tions ,5 it will be used here. According to this source,
the national bituminous coal industry showed net profits
between 1917 and 1921, at least, but showed net losses
from the early Twenties through 1939. In 1920, the
industry’s peak net profits approximated $250 million,
while the maximum net losses o f 1932 totaled in the neigh­
borhood o f $50 million. In 1940, the industry was again
in the black, and it can be assumed that it has so re­
mained. As was demonstrated earlier, the postwar fu ­
ture o f the industry is subject to too many currently un­
known forces to allow any projection o f trend on the
national level. Within this District, it is quite possible
that the industry, since it was growing at the expense
of the industry in the rest o f the country, may have been
more profitable than national figures would imply. But,
in the absence o f more exact information on this and on
the national prospects, no prognostication is possible on
this point, either.
• many ways, income accounting for corporate tax purposes differs from
In
accounting, for business purposes. In the first place, many coal mines
are not incorporated; salaries, here, cover much which would be divi­
dends to a corporation. Much the same may be said of the many familyowned corporations in the industry. In the second place, definitions
often change under the law, with items allowed as expenses some years
and not in others. In the third place, the depletion allowances under the
law may be much larger than those usually taken in business accounting.
This last is not as important for coal mining as it is for some other
extractive industries, since the allowances have run in the neighborhood
of 5 per cent, for many years. All in all, it is not felt that these reser­
vations nullify the comparisons, and this source covers far more indi­
vidual concerns than can be found in any other series.

MONTHLY REVIEW

10

FEDERAL RESERVE BANK OF RICHMOND

DEBITS TO INDIVIDUAL ACCOUNTS

(All Figures in Thousands)
Change in Amt. from
Dec. 13
12-15-43
11-15-44
1944
ITEMS
— 89,335
+ 33,323
Total Gold Reserves .................... $ 973,346
— 5,557
—
114
Other Reserves .............................
12,423
— 94,892
+ 33,209
985,769
Total Reserves .......................
— 3,100
— 3,450
550
Bills Discounted ...........................
—
104
—
6
132
Industrial Advances .................
+ 578,302
+ 40,198
Gov’t. Securities, Total ..............
1,193,887
— 66,003
+ 6,074
Bonds .........................................
63,779
+ 24,249
+ 27,960
Notes ..........................................
79,536
+ 38,980
+ 36,295
Certificates .................................
217,545
— 30,131
+ 581,076
Bills ............................................
833,027
+ 575,098
+ 36,742
Total Bills and Securities ........
1,194,569
— 1,483
— 1,359
Uncollected Items ..................... .
155,340
— 3,863
—
85
Other Assets .................................
12,454
+ 68,507
+ 474,860
Total Assets ............................. $2,348,132
$1,488,441
716,960
635,087
33,397
44,726
3,750
120,189
701
21,841
$2,348,132

Fed. Res. Notes in Cir.................
Deposits, Total .............................
U. S. Treas. Gen. Acct.............
Foreign .......................................
Other Deposits .........................
Deferred Availability Items
Other Liabilities .........................
Capital Accounts ....................... .

+ 45,379
+ 35,991
+ 9,208
+ 28,651
— 3,257
+ 1,389
— 13,208
+
98
+
247
+ 68,507

+ 362,650
+ 108,519
+ 112,508
+
9,627
— 13,260
—
356
+
495
+
355
+
2,841
+ 474,860

41 REPORTING MEMBER BANKS—5th DISTRICT
(All Figures in Thousands)
Change in Amt. from
Dec. 13
121-15-43
11-■15-44
1944
ITEMS
Total Loans ................................. $ 358,725
+ 83,271
+ 64,606
9,917
5,478
143,946
Bus. and Agric. L oan s............
+
+
1,287
843
48,292
Real Estate Loans ...................
+
74,641
59,971
166,487
All Other Loans .....................
+
+
+ 266,885
1,608,962
+ 157,567
Total Security Holdings ............
—
10,417
121,535
U. S. Treas. Bills ..................
+ 37,028
3,770
313,354
U. S. Treas. Certificates ........
+ 47,610
+ 136,350
67,709
305,105
U. S. Treas. N otes...................
+
+ 124,894
799,242
U. S. Gov. Bonds ...................
+ 56,621
—
29,196
78
16,007
Obligations Gov. Guaranteed. .
+
99
— 2,356
53,719
Other Bonds, Stocks and Sec.
—
7,491
10,942
106,435
Cash Items in Process of Col. . .
*+
185,490
+ 26,808
Due from Banks .........................
+ 31,121
4,441
4,827
41,922
+
Currency and Coin .....................
+
336,519
Reserve with F. R. Bank ..........
+ 10,162
+ 59,072
1,724
2,636
68,303
+
Other Assets .................................
+
+ 450,604
+ 259,065
Total Assets ............................. $2,706,356
Total Demand Deposits ..............
Deposits of Individuals ..........
Deposits of U. S. Gov..............
Deposits of State & Local Gov.
Deposits of Banks ...................
Certified & Officers’ Checks . .
Total Time Deposits ..................
Deposits of Individuals ..........
Other Time Deposits ...............
Liabilities for Borrowed Money. .
All Other Liabilities . ................
Capital Accounts .......................
Total Liabilities ...................

$2,217,566
1,180,446
487,199
77,601
451,141
21,179
289,879
276,036
13,843
0
81,630
117,281
$2,706,356

+ 272,366
37,987
+ 314,917
—
4,845
90
+
191
+
—
4,651
—
4,687
36
+
—
1,500
—
6,509
—
641
+ 259,065
—

+ 384,751
+ 85,475
+ 257,015
4- 2,124
+ 46,427
6,290
------+ 47,263
50,147
+
2,884
------1,500
+ 14,959
5,131
+
+ 450,604

* Net figures, reciprocal balances being eliminated.

DEPOSITS IN MUTUAL SAVINGS BANKS
8 Baltimore Banks
Total Deposits . . .

Nov. 30, 1944
$292,785,086

Oct. 31, 1944
$291,932,451

Nov. 30, 1943
$256,586,779

COTTON CONSUMPTION— FIFTH DISTRICT
In Bales
No. Carolina So. Carolina Virginia
MONTHS
20,099
172,578
225,508
1 94 4 ....
November
18,602
214,597
163,951
1 94 4 ....
October
20,695
230,667
176,160
November
1 94 3 ,...
208,874
2,404,691
1,845,057
11 Months 1 9 4 4 ....
1,957,564
228,678
2,564,577
11 Months 1 9 4 3 ....




(000 omitted)
November
1944
Dist. of Columbia
Washington . . . . . .$ 516,338
Maryland
Baltimore ........ . . 801,365
Cumberland
13,545
Frederick ..........
13,159
Hagerstown . . . .
16,424
North Carolina
Asheville ..........
24,841
Charlotte .......... . .
131,694
Durham ............ . . 106,333
Greensboro ........
39,917
Kinston ............
19,414
Raleigh ..............
59,655
Wilmington
39,823
Wilson ................
31,750
Winston-Salem .
83,544
South Carolina
Charleston ........
41,632
Columbia ..........
52,758
Greenville ........
46,509
Spartanburg .. .
24,779
Virginia
Charlottesville
18,679
Danville ..........
37,526
Lynchburg ........
22,861
Newport News .
23,240
Norfolk .............. . . 122,799
Portsmouth . . . .
16,073
Richmond .......... . . 355,809
Roanoke ............
44,518
West Virginia
Bluefield ............
21,753
90,982
Charleston ........
Clarksburg ........
17,135
Huntington . . . .
35,657
19,574
Parkersburg . . .
District Totals . . . . .$2,890,086

% chg. from
11 Mos. 1943

% chg. from
Nov. 1943

11 Mos.
1944

+ 16

$ 5,343,246

+

6

+ 9
+ 18
+ 21
0

8,378,542
145,360
135,726
186,780

+
+
+
+

8
13
16
10

+
+
+
+
+
+
+
+
+

23
22
19
25
99
22
15
77
7

263,485
1,402,655
828,201
380,551
122,681
601,293
418,120
165,237
735,136

+ 15
+ 13
+ 15
+ 8
+ 15
+ 6
+ 3
+ 13
— 3

+
—
+
+

11
3
27
19

430,711
547,172
423,199
242,994

0
0
+ 2
+ 7

+
+
+
+
+
+
+
+

35
19
3
o
6
7
7
17

171,557
204,804
232,909
281,390
1,322,850
173,499
3,642,937
457,414

+ 29
+ 10
+ 7
+ 1
+ 1
— 3
+ 10
+ 13

+
+
+
+
+
+

9
24
19
38
38
13

256,142
908,354
170,070
344,808
182,065
$29,099,888

+
+
+
+
+
+

15
10
17
18
16
8

COMMERCIAL FAILURES
PERIODS
November
October
November
11 Months
11 Months

Number of
District
1944...................1
1944........ ...........0
1943.................. 2
1944........
13
1943........
45

Failures
U. S.
75
74
155
1,129
3,076

Total Liabilities
District
U. S.
8,000
$ 3,008,000
0
3,819,000
110,000
2,402,000
$ 760,000
$29,856,000
1,100,000
43,284,000

$

Source: Dun & Bradstreet.

COTTON CONSUMPTION AND ON HAND— BALES
Nov.
Nov.
Aug. 1 to Nov. 30
1944
1943
1944
1943
Fifth District States:
Cotton consumed ..........
418,185
427,522 1,630,552 1,677,171
Cotton Growing States: ..
Cotton consumed ..............
754,874 2,885,603 2,992,643
738,458
Cotton on hand Nov. 30 in
Consuming: establishments
1,975,334 2,105,501
Storage and Compresses. 13,043,514 12,731,432
United States:
836,541
858,877 3,266,496 3,421,212
Cotton cousumed ..............
Cotton on hand Nov. 30 in
2,209,694
2,389,22 7
Consuming establishments
Storage and Compresses. 13,185,606 12,950,9»3
Spindles Active, U. S, . . . 22,257,040 22,615,732

RAYON YARN DATA
District
418,185
397,150
427,522
4,458,622
4,750.819

Rayon Yarn Shipments, Lbs. . . .
Staple Fiber Shipments, Lbs. . ..
Rayon Yarn Stocks, Lbs ..........
Staple Fiber Stocks, Lbs............
Source :

Rayon Organon.

Nov. 1944
47,800,000
13,800,000
8,400,000
2,800,000

Oct. 1944
47,000,000
14,500,000
8.400.000
2.7000.000

Nov. 1943
42.900.000
13.900.000
7.200.000
2.600.000

MONTHLY REVIEW

11

RETAIL FURNITURE SALES

BUILDING PERMIT FIGURES
November 1944
Total Valuation
Nov. 1943
Nov. 1944
Maryland
Baltimore ..........................................
$ 532,930
Cumberland .......................................
1,946
Frederick ............................................
7,620
Hagerstown ......................................
12,455
Salisbury ............................................
43,091
Virginia
Danville ..............................................
$
9,135
Lynchburg ........................................
16,101
145,885
Norfolk ..............................................
Petersburg ........................................
1,080
Portsmouth ........................................
20,540
Richmond ..........................................
101,142
Roanoke ..............................................
23,555
West Virginia
Charleston ........................................
$
49,550
Clarksburg ........................................
1,971
Huntington .......................................
78,085
North Carolina
Asheville ............................................
$
23,500
Charlotte ............................................
84,601
Durham ..............................................
80,640
Greensboro ........................................
11,779
45,584
High Point ......................................
Raleigh ..............................................
14,950
Rocky Mount ....................................
2,950
Salisbury ............................................
6,475
Winston-Salem .................................
125,940
South Carolina
Charleston ........................................
$
53,137
Columbia ...........................................
34,840
Greenville ..........................................
33,530
Spartanburg ......................................
6,590
District of Columbia
Washington ...................................... .......... $ 1,436,467
District Totals .................................
11 Months .....................................

$

654,595
20,080
0
4,005
12,934

$

4,117
5.300
853,742
400
27,395
58.917
19,582

$

3,065
23,931
6,610
2,450
16,021
38,985
825
2,180
24,120

INDIVIDUAL CITIES
Baltimore, Md. (5)* ........
Washington, D. C. (5)* ..
Richmond, Va. (7)* ........
Charleston, W. Va. (3 )*..
Charlotte, N. C. (5)* ___
Columbia, S. C. (4)* . . . .

$

84,442
3,990
3.300
26,245

$ 1,200,935
$ 3,125,619
$42,704,188

$ 3,006,069
$28,602,221

Richmond

$274,474,000

— 56

— 31

TOBACCO MANUFACTURING

Smoking and Chewing to­
bacco (Thousands of lbs.)
Cigarettes (Thousands) . . .
Cigars (Thousands) ..........
Snuff (Thousands of lbs.)..

% change
11 Mos.
from
1944
11 Mos/43

% change
from
Nov. 1943

26,775
20,554,494
446,3*25
3,954

+ 5

— 15
+ ^
20

+

1
3
6
4
8
1

Baltimore

Washington

Other Cities

District

Maryland

Dist. of Col.

Virginia

West Va.

No. Caro.

So. Caro.

Percentage change in Nov. 1944 sales from Nov. 1943 sales, by States:
+ 10
+13
+16
+24
+26
+20
Percentage change in 11 months’ sales in 1944 from same period in 1943:
+ 7
+ 5
+16
+15
+15
+ 12

Source: F. W. Dodge Corp.

Nov.
1944

—
—
+
—
+
+

3
2
16
22
18
16

Percentage change in Nov. 1944 sales, compared with sales in 1943:
+ 15
+10
+13
+20
+14
Change in 11 mos.’ sales in 1944, compared with 11 mos.’ sales in 1943:
+ 15
+ 7
+ 5
+16
*
+ 9
Change in stocks on Nov. 30, 1944, from stocks on Nov. 30, 1943:
+ 2
+ 4
+ 3
+14
+ 4
Change in outstand’g orders Nov. 30, 1944, from orders on Nov. 30, ’43:
+ 11
+10
— 3
+32
+ 5
Change in total receivables Nov. 30, 1944, from receivables Nov.30, ’43:
+ 13
+13
+ 8
+12
+Tl
Percentage of current receivables as of Nov. 1, 1944, collected in Nov.:
61
62
57
62
60
Percentage of instalment receivables as of Nov. 1, '44, collected in Nov.:
36
39
29
39
33

% chg. from
10 Mos.
% chg. from
October
10 Mos. 1943
1944
1944
Oct. 1943
STATES
$ 76,641,000
— 13
$ 4,426,000
— 68
Maryland ...............
— 11
+ 62
23,435,000
Dist. of Columbia.. . . 3,142,000
— 35
96,257,000
5,955,000
— 55
Virginia .................
+ 32
21,623,000
1,277,000
— 6
West Virginia........
— 52
. . 1,551,000
— 57
37,805,000
North Carolina
18,713,000
— 56
192,000
— 94
South Carolina . . .
$16,543,000

+
+
+
+
+
+

DEPARTMENT STORE TRADE

CONSTRUCTION CONTRACTS AWARDED

Fifth District . . .

Percentage Changes in Nov. and 11 Mos. 1944
Compared with
Compared with
11 Months 1943
. Nov. 1943
— 1
+ 3
— 3
+ 2
+ 6
+ 19
+ 31
+ 7
+ 13
+ 26
+ 3
+ 18
+ 13
+ 4

19,678
1,160
6,615

$

STATES
Maryland (5)* .................
Dist. of Columbit (5)* . . .
Virginia (24)* ..................
West Virginia (11)* ........
North Carolina (20)* . . . .
South Carolina (13)* . . .
Fifth District (78)* . . .

—6

227,221
221,434,152
4,000,464
38,581

— 6
— 9

WHOLESALE TRADE, 244 FIRMS
Net Sales
Nov. 1944
compared with
Nov.
Oct.
1944
1943

LINES
Auto Supplies (12) * ___
Drugs & Sundries (9)*.
Dry Goods (8)* ..............
Electrical Goods (10)*..
Groceries (77)* ..............
Hardware (15)* ............
Industrial Supplies (10)*
Paper & products (7 )*..
Tobacco & products (10)*
Miscellaneous (86)* . . .
District Average(244)*

+ 15
+ 9
+ 8
— 9
+ 7
+ 12
+ 34
— 7
+ 1
+ 3
+ 5

Stock
Nov. 30, 1944
compared with
Nov. 30 Oct.31
1944
1943

—
—
—
—
+
—
+
—

7
3
18
9
2
6
3
12
0
— 2
— 3

+ 23
+ 23
— 2
— 5
+ 10
+ 19
+ 10
— 22
+ 12
— 13
+ 4

+
+
—
+
+
+
—
—
—
+
+

Ratio Nov.
collections
to accounts
outstand’g
Nov. 1

3
7
5
1
4
2
3
1
2
1
2

95
142
80
65
153
105
109
93
150
128
109

Source: Department of Commerce.
* Number of reporting firms.

— 2

AUCTION TOBACCO MARKETING
SOFT COAL PRODUCTION IN THOUSANDS OF TONS
Nov.
Nov.
1943
1944
REGIONS
12,110
West Virginia .. 13,058
1,420
Virginia .......... 1,569
139
128
Maryland ..........
5th District .. .14,766 18,658
United States 50,215 44,643
30.6
% in District.. 29.4




%
Change
+ 8
+ 10
+ 9
+ 8
+ 12

11 Mos.
1944
152,270
17,872
1,797
171,939
573,070
30.0

11 Mos.
1943
145,080
17,822
1,700
164,602
538,769
30.6

%
Change
+ 5
+ 0
+ 6
+ 4
+ 6

STATES
North Carolina
Virginia ............

Producers’ Tobacco Sales, Lbs.
Nov. 1944
Nov. 1943
.
.

Fifth District .. .
Season through .. .

182,150,833
50,281,240

90,146,647
38,512,789

232,432,073
887,706,790*

128,659,436
681,994,844*

* Includes sales on South Carolina markets.

Price per Hund.
1944
1943
$44.54
$42.98
44.71
42.93
$44.58
43.20*

$42.97
*40.64

MONTHLY REVIEW

12

BUSINESS INDEXES—FIFTH FEDERAL RESERVE DISTRICT
Average Daily 1935-39 = 100
Seasonally Adjusted
Oct.
1944
Bank Debits ..........................................................
Bituminous Coal Production*............................
Building Contracts Awarded ..........................
Building Permits Issued ................................ Cigarette Production ...........................................
Cotton Consumption* .........................................
Department Store Sales ....................................
Department Store Stocks ..................................
Electric Power Production ...............................
Employment— Mfg. Industries*.........................
Furniture Orders .................................................
Furniture Shipments ...........................................
Furniture Unfilled Orders .................................
Retail Furniture Sales .......................................
Life Insurance Sales ...........................................
Wholesale Trade— Five Lines ...........................
Wholesale Trade— Drugs ...................................
Wholesale Trade— Dry Goods - ......................
Wholesale Trade— Groceries ............................
Wholesale Trade— Hardware ...........................

Sept.

Aug.

Oct.

1944

1944

1943

205
145 r
72
48
152
142
224
171

2l2
146r

212

121

112

40
153
141
214
181
217
139
115

43
166
145
213
198

197
140
163
64
182
146
191
165

220

212

141
126
130
347
116
145
168
228
118
180
93

150
117

211

137
157
131
458
163
146
175
239
115
188
92

110

334
150
138
156
225
96
168
81

151

112

381
133
120

176
213
136
186
115

% Change
Oct. 1944 from
Sept/44
Oct/43
— 8
-

1

— 41
+20
1
+ 1

—

+ 5
— 6
— 3
—

1

+37
+19
+37
+ 9
+ 6

+ 4
+ 4
— 56
—25
— 16
— 3
+17
+ 4
0

— 9
+ 34
+ 17
+20

+23
+22
1
+12

+12
+ 6
+20
+12

— 15
+ 1

+ 14

— 20

—

* Not seasonally adjusted.

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

Output at factories and mines showed little change from
October to November. Retail trade expanded further to new
record levels.
Industrial Production
Industrial output in November and the early part of De­
cember was maintained at approximately the same level that
had prevailed during the previous four months. Production
of durable goods declined slightly in November, while output
of other manufactured goods, especially war supplies, in­
creased somewhat further and mineral production was main­
tained in large volume. Output of critical war equipment
was larger in November than in October but was still behind
schedule, according to the W ar Production Board.
Activity in the durable goods industries, particularly ma
chinery, transportation equipment, and lumber, continued to
be limited in part by manpower shortages. Employment in
the transportation equipment industries has declined by about
one-fifth during the past twelve months, but total output of
aircraft, ships, and combat and motor vehicles has declined
by a much smaller amount owing to greater efficiency.
In most nondurable goods industries, production was some­
what greater in November than in the previous month.
Activity at explosive and small-arms ammunition plants in­
creased, reflecting enlarged war production schedules, and
output in most other branches of the chemical industry also
expanded, reaching levels above those of a year ago. Pro­
duction in the petroleum refining and rubber industries,
chiefly for war uses, increased somewhat in November.
Output of manufactured foods showed less decline than i$
usual for this season and was as large as in November 1943.
In the textile industry, output at woolen and worsted mills
continued to advance in October from the reduced level of
operations prevailing during the summer. Cotton consump­
tion in November was above October and rayon deliveries
were at a new record level.
;
Mineral production was maintained in November. Coal
output was one-fifth larger than in November 1943 when
operations were sharply reduced by a work stoppage. In
the early part of December, however, coal production was
nearly 10 per cent less than in the same period last year.
Distribution
Value of department store sales in November was 14 per
cent above the exceptionally high level last year, about the




same year-to-year increase which prevailed in the previous
four months. In the first half of December, sales were
about 20 per cent larger than last year. All Federal Re­
serve districts have shown large increases over last year in
pre-Christmas sales.
Railroad freight carloadings, adjusted for seasonal
changes, were maintained at a high level in November and
the first two weeks of December. Shipments of most classes
of freight, however, were not quite as great as the excep­
tionally large movement of freight during the same period
last year.
Commodity Prices
Changes in wholesale prices of agricultural and industrial
products were mostly upward in November and the early
part of December. Retail prices of foods and various other
commodities were slightly higher in November than in Octo­
ber. During the past year there has been a slight upward
tendency in prices of most commodities, both in wholesale
and retail markets.
Bank Credit
Banking developments during the four weeks ended De­
cember 13 were largely determined by the Sixth W ar Loan
Drive. Government deposits at weekly reporting banks in
101 cities increased by approximately 8 billion dollars while
adjusted demand deposits of individuals and business were
drawn down about 2.6 billions in payment for securities pur­
chased. The reporting banks added 3.7 billion dollars to
their holdings of Government securities and increased their
loans by 1.7 billion.
As a result of the transfer of deposits of individuals and
businesses to war loan accounts, reserves required by mem­
ber banks declined about 700 million dollars from the be­
ginning of the Drive through mid-December. In addition,
reserve funds were supplied to the banking system through
the purchase by the Federal Reserve Banks of 640 million
dollars of Government securities. These additional reserves
were used in part to reduce member bank borrowings at the
Reserve Banks, which had risen to nearly 600 million dollars
in the latter part of November, and to meet the demand for
currency. This demand, though slackened somewhat by the
W ar Loan Drive, amounted to 450 million dollars for the
four weeks ended December 13. Excess reserves increased
by 300 million dollars, principally at country banks.

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