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RESERVE BANK /OF /RICHMOND

O H /SU t

Dcme 15
ee br 93
THE FARM B A L A N C E SHEET
ASSETS

CLAIMS
Billions of D ollars

1940

1945

1950

1940

1945

1950

D ata Are As Of J a n u a ry I E a c h Year
Source.-

Bureau of A gricultural Economics.

c
er
ear
F idi fnrt ohap Driionsz tv rf iatortms fhaionr wmc oe mar se d eficanlcien1 e9.a5 4 p—rWo hbt haiebl le et hbifroudtrhtyhAlso tInt a lThis Issue
the o

-

-

-

Fifth District Trend Charts__________ Page
a s s e t v a l u e o f A m e r i c a n a g r i c u l t u r e a n d o w nSome’ Long Term Mortgage Lending
ers
e q u i t i e s a l s o d e c l i n e d d u r i n g 1 9 5 3 , t h e o v e r - a lDevelopments __________________ Page
l
fin a n c ia l p o sitio n o f a g r icu ltu re c o n t in u e s g e n e r ­
ally f a v o r a b l e .
T h e a r t i c l e b e g i n n i n g o n p a Tomorrow’s Income— Today’s Standard
ge 3
d i s c u s s e s t h e a g r i c u l t u r a l o u t l o o k f o r 1 9 5 4 of Living______________ _________ Page
in
t e r m s o f the o p p o r t u n it ie s w h i c h exist fo r f a r m e r s
Business Conditions and Prospects_____ Page
a n d b a n k e r s to c o n t i n u e to d e v e l o p s o u n d f a r m i n g
Fifth District Statistical Data,.________ Page
program s.




2
5
6
8
11

Federal Reserve Bank of Richmond

F

if t h

D

is t r ic t

NEW PASSENGER CAR REGISTRATIONS

r e n d s
HOSIERY PRODUCTION - UNITED STATES

W ith only South Carolina m issing, new passenger automobile
registrations in October in the F ifth District rose 7 % over those of
September and were 2 9 % ahead o f a year ago. District sales are
not quite as good as for the nation as represented by 35 states for
October, showing a gain o f 3 7 % over a year ago. Ten m onths’
figures for the five states in the District were up 3 8 % compared
with 4 4 % for 35 states.

BANK

T

Latest figures (Septem ber) show national hosiery output down
5 % from Au gust on an adjusted basis and 4 % under September
1952. Trade inform ation indicates a lack o f seasonal expansion
during November until the last week o f the month. This implies
that November production will be down further after seasonal
correction from October.

WHOLESALE

DEBITS

Bank debits, adjusted for seasonal variation, dropped 1 % from
September to October to mark the third straight decline and car­
ried the adjusted index to the lowest level o f the year. October
debits, however, were still 2 % ahead o f October last year, and for
ten months the gain over last year was 7 % .

DRUG SALES

The wholesale drug trade was the only line o f wholesale trade
to show a better-than-seasonal rise in sales from September to
October and to run ahead o f a year ago. October adjusted sales
were up 6% from September and 3 % ahead o f last year, and ten
month sales are 4 % ahead o f last year.

WHOLESALE DRY GOODS

1945

1946

1947

1948

1949

1950

15
91

1952

1953

Despite conservative inventory and purchasing policies o f con­
verters and cutters, spot and nearby purchases were sufficient to
raise the level o f operations in the cotton textile industry o f this
D istrict 2 % on a seasonally adjusted basis from September to
October. October consumption, however, was 1 % lower than in
October 1952.




Wholesale trade figures in dry goods give a fairly good indication
of the sales conditions and policies pursued by smaller retail con­
cerns. Dry goods wholesalers in this District showed adjusted
sales down 1 2 % in October from September and down 2 4 % from
October 1952. This probably indicates both poor sales in the
small retail stores and some living o f f o f inventory.

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December 1953

Farmers May Find It Discouraging BUT HELPFUL
to Look Ahead
ceipts, so that a slight further reduction in realized net
income may be expected.

o t a l assets of American agriculture, including all
physical as well as financial assets owned by farm
operators, are expected to be valued at $156.4 billion on
January 1, 1954— a decline of 5% from a year earlier.
Declines are indicated in the value of both farm real
estate and other physical assets. Farm financial assets
on the other hand (primarily bank deposits, currency,
and United States savings bonds) appear likely to to­
tal slightly more than $22 billion— up about 1% over
1953.
W hile the value of farm assets declined in 1953, the
volume of farm debt increased about $800 million or
5% . Farm real estate debt .
is expected to total about
$7.8 billion on January 1,
1954, or about 9% above a
year earlier. In addition
there will probably be a
slight increase in farm nonreal-estate debt, with all of
the gain resulting from a
sharp expansion of price
support loans held or guar­
anteed by the Commodity
Credit Corporation. Other
non-real-estate debt is de­
clining for the country as a
whole— the result of lower
livestock prices, fewer pur­
chases of farm machinery, a
more cautious attitude on
the part of both borrowers and lenders, and some refi­
nancing of short-term debt with real estate mortgages.

T

Commodity Highlights
The demand for cigarette types of tobacco is expected
to continue strong in 1954, even though the regular in­
crease in cigarette production characteristic of recent
years leveled off in 1953 and may change little in 1954.
Cotton supplies are large, and acreage controls in 1954
appear likely to force a substantial reduction in cotton
acreage.
According to the B A E , a continued large slaughter
but more price stability for
cattle is in prospect for
1954.
increase n e x t y e a r with
some lowering in prices in
the Fall as hogs from the
larger Spring pig crop come
to market. Prices of lambs
are not likely to change
much and m a y remain
slightly above an average
relationship to cattle prices.
Retail prices for dairy prod­
ucts have d e c lin e d o n ly
slightly in the past twelve
months, w h ile p r ic e s re­
ceived by farmers for milk
and butterfat have dropped
13%. Prices received by
dairy farmers will be influenced to a considerable extent
by the level at which dairy product prices are supported
in the marketing year which begins April 1, 1954. The
farm value of 1953 egg and poultry production will be a
record high. If consumer demand holds up as expected,
1954 may almost repeat the 1953 pattern for poultry
products.

General Economy to Decline But Little
In the words of one of the speakers from the Bureau
of Agricultural Economics at the recent National A gri­
cultural Outlook Conference, “ W ith demands from some
segments of the economy leveling off and in a few
instances declining, there is a real possibility that the
total demands on the economy in 1954 may be less than
in 1953. Yet, the total reduction in economic activity
and employment that appears to be in prospect for 1954
is small.” Although this analysis of future business
conditions is relatively optimistic, it was within this
framework that the analysis of the agricultural situa­
tion for 1954 was developed.
Farm economists at the outlook conference were told
that the indications are for a continuation of the costprice squeeze on the American farmer. Both gross in­
come and total farm production expenses are expected
to be a little smaller in 1954 than in 1953. It is doubt­
ful, however, that expenses will drop as much as re­




Making Adjustments to the Cost-Price Squeeze
Farming is an industry widely known for its “ ups
and downs,” though lately the “ downs” have had a de­
cided edge. A year ago those looking ahead to 1953
were concerned with the continuing cost-price squeeze
and the prospects of a further reduction in net farm in­
come ; and well they may have been, since the cost-price
squeeze has continued, with net farm income down 7%
from 1952 to 1953. Much is concealed by this average
situation, however, since some farmers fared very well
in 1953 whereas others suffered severely.
Fifth District farmers— like others— have felt the
effect of the economic forces which are reflected in the
lower level of income in 1953 despite the larger over-all

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Federal Reserve Bank of Richmond

ducers are more profitable regardless of the level of
practices. The highest profit of all, that from good pro­
ducing cows along with improved management practices,
produces an income nearly four times as large as aver­
age quality herds with usual practices.

volume of farm products being marketed. Many farm­
ers also had their production adversely affected by
drought with a resulting further loss of income. In
1954 they will continue to feel the cost-price squeeze
as well as the effects of acreage cutbacks on certain
crops.

Necessary to Carry Through

Some Items Much Better Buys Than Others

In making plans for 1954, farmers have the incentive
— in the form of economic pressure— to consider ways
In the course of a crop year, farmers naturally buy
many products. Compared with pre-W orld W ar II,
and means of increasing production efficiency. The in­
dividual practices referred to above are merely illustra­
the price of practically all items has risen— some of them
much more sharply than others.
tive of the many which can be profitably employed by
Fifth District farmers. It is important that whatever
These divergent trends in prices are of significance
plan looks promising in a particular instance should be
to farm operators in planning ahead. For example,
incorporated into a well-designed program and effec­
farm machinery prices have just about doubled since
pre-W orld W ar II, whereas farm wage rates are over
tively carried through. For example, the greatest bene­
fit from good seed is not
four times as high. This
obtained unless the farmer
fact can well serve as a
follows through with ap­
signal, warning them to
On One-Man Dairy Farm
proved f e r t i li z a t i o n and
re-examine t h e i r farm
HOW BETTER COWS AND BETTER
cultural practices.
business with a view to
PRACTICES BOOST DAIRY INCOME
discovering where it might
Many p r a c t ic e s which
be advantageous to use
will strengthen the income
machinery instead of more
position of Fifth District
tv.
*
L A B O R INCO M E O F O P E R A T O R :
expensive labor — the com ­
farmers can be put into
W ith Usual P ractices *
bine instead of the grain
effect with little or no in­
binder and threshing crew,
Average Cows
crease in cash o u t l a y .
the milking machine in­
O th e r s , s u ch as th o s e
stead of han d m ilk in g .
which involve purchase of
12,959
This is simply what good
expensive m a c h in e r y or
With Im proved Practices *
farm managers have been
construction of new build­
doing all along, and it has
ings, would call on plowed
$2,734
been e v id e n c e d by the
back earnings or necessi­
marked trend toward me­
tate borrowing.
chanized farming for more
In this latter case the
8 5 ,7 3 3
than a decade.
lender, as well as the farm­
income Data Based on 1 9 4 5 -4 9 Price Level
er, is interested first in the
Another “ good buy” is
* C r o p and L iv e s to c k P rod uctio n P ractice s
Source- Bureau o f A g ric u ltu ra l Econom ics and Michigan A g ricu ltu ra l E xperim ent S tatio n.
need f o r n ew improve­
fertilizer, the p r i c e of
ments on the particular
which has increased only
farm and then in their
about 50% since 1935-39,
effective incorporation into the farm business so that
whereas the index of prices received by farmers is now
enhanced income will result. This being true, it fol­
about two and a half times the prewar level.
lows that the borrower or lender who concludes that
Although seed costs have increased nearly as much
going into debt— say, to buy a tractor— will force re­
as all items used in family living and production, it is
duction in other purchases (such as fertilizer or seed)
nevertheless true that good seed is a good buy. The
should re-examine the full significance of the action and
difference in price between ordinary seed and high
then conclude what is real and what is false economy.
quality seed of an improved variety is so narrow on a
per acre basis that the slight extra outlay frequently
means a profitable investment.

Care and Management Important
Earnings of small dairy farms vary greatly, depend­
ing upon the quality of cows in the herd and the prac­
tices employed. Following recommended practices fre­
quently pays big dividends over usual or older practices
regardless of whether farmers have average or super­
average producers in their herds. Similarly, good pro­




{

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December 1953

jfh /te u p

Some Long Term Developments In Mortgage Lending
h e amount of mortgage debt owed by individuals
and business firms at the end of June 1953 is esti­
mated to have reached almost $96 billion. At the end of
1920 this type of debt stood at an estimated $31.3 billion
— even then a hefty figure, but less than one-third the
enormous sum owed to mortgage lenders today.
O f the almost $96 billion of mortgage debt outstand­
ing, individuals owe $81.9 billion— over two-thirds of
it on one- to four-family residences. O f the remaining
one-third of mortgage debt of individuals, the nation’s
farmers owe $7.1 billion, and other individuals owe
$19.5 billion of debt secured by mortgages on either
multifamily residential or on
commercial property.
Since 1920 s o m e very
significant changes have oc­
curred in the structure of
the nation’s mortgage debt.
Not only have the different
classes of borrowers and the
types of properties mort­
gaged changed in relative
importance, but also differ­
ent kinds of mortgage lend­
ers h a v e achieved impor­
tance in this kind of finan­
cial activity. In addition,
the methods of handling
mortgage loans have under­
gone a near revolution, par­
ticularly since the dark days
of the G r e a t Depression
when the weaknesses of the lending methods used
up to that time were brought to light in a flood of
foreclosures leading to direct Government intervention.

T

If three broad categories of borrowers— corporate,
noncorporate, and farm— are looked at, what do we
find? The noncorporate group has grown from less
than two-fifths of total borrowings outstanding in 1920
to over four-fifths at the end of 1952. The corporate
and farm groups, over the same period, have declined
from just under a third each to less than one-tenth.
The use of mortgage-secured loans by corporations
experienced its most striking decline during the twen­
ties. The markets for investment funds changed mark­
edly during this post-W orld W ar I decade. There was
a decided shift by business firms toward the more in­
dependent methods of financing provided by the open
market and away from the judgment of a single lender
or of a small group of lenders. For example, the num­
ber of bond issues brought out in the five-year period
from 1920 through 1924 was four times the number
issued in the preceding five years. From 1925 through
1929 the number of issues was almost four times the




1920-24 figure. Corporate mortgage loans outstand­
ing fell from an estimated $9.4 billion at the end of
1920 to $5.7 billion in 1929. This decline in dollar
amount continued, but more moderately, until 1937.
The amount outstanding showed little change during
W orld W ar II but since then has risen to $9.0 billion.
In spite of this rapid postwar growth, corporate mort­
gage debt has not kept pace with noncorporate, and its
share of the total has continued to decline.
Farm mortgage borrowings declined both in dollar
amount and as a percentage of the total in almost every
year from 1922 through 1945. The amount of such
debt outstanding increased
gradually from 1945 through
1952— from $4.8 billion to
$7.1 billion. Nevertheless,
this increase was so much
below that in noncorporate
mortgage debt that the farm
share of the total continued
to drop throughout the post­
war years. Farm mortgage
debt is now only 7.8% of
total mortgage debt; it was
32.6% in 1920.
The most striking mort­
gage debt d e v e lo p m e n t
since the early twenties has
been the rapid growth of
home mortgages in the postW orld W ar II years. Be­
cause of the sustained high level of income over these
years, the availability of investment funds for this use,
the high rate of family formation, and, in particular, the
willingness of mortgage lenders to extend loans on
terms within the reach of the multitude of average- and
low-income people, home builders have been hard
pressed since the end of the war to meet the demand for
more and better homes. At the end of 1945, noncorpo­
rate mortgages on one- to four-family nonfarm homes
stood at $17.6 billion, at about the same level as that
maintained just prior to the Great Depression. A t the
close of 1952 the figure had skyrocketed to $55.2 billion.
A near revolution has occurred in methods of mort­
gage financing since the 1920’s, when three- to five-year
mortgage loan maturities were common, and down pay­
ments (frequently financed by second and even third
mortgages) ranged from one-third to one-half of the
appraised value of the property. A strong influence
has been exerted by Federal Government action toward
longer maturities, smaller down-payments, and monthly
payments which include not only interest and amortizaContinued on page 10

Federal Reserve Bank of Richmond

Tomorrow’s Income— Today’s Standard of Living
Nevertheless, the amount of consumer credit out­
standing did increase in each of these three slower-thanusual months. This means that banks, sales finance
companies, department stores, credit unions, furniture
stores, and others extended enough new credit to con­
sumers during these months to more than offset the to­
tal amount of repayments during the months on money
borrowed earlier. The extension of credit to consumers
is still at a very high level—
high enough to allay fears
that the current slowdown
CONSUMER CREDIT
portends a serious economic
Percent Change in Amount Outstanding
malaise.

are not borrowing as much now— or
should we say lenders are not lending as much to
consumers now ? The difference in meaning is extreme­
ly important for it implies the wide gap between an
“ anti-inflationary” and a “ deflationary” economic at­
mosphere. If lenders are not willing to lend as much,
this may simply suggest that they are more cautious
about meeting high demands for credit, are screening
loan applications more care­
fully, or are . refusing the
more risky borrowers.
on su m ers

C

If borrowers are not will­
ing to borrow as much as
formerly, while credit is still
available on easy terms, the
connotation may be the op­
posite. People borrow to
buy. If they are not bor­
rowing, their desires to buy
are not as great or they are
being checked. W hen the
people of the nation as a
whole decide to reduce their
borrowing, they are begin­
ning to reduce the total
spending that keeps industry
humming— and, if continu­
ed, this could spell trouble.
Consumer Credit—
Increasing Slower

From June 3 0 to September 3 0 of each year
P e rcen t

+ (5
+ 10

+ 5.
0
-5

+ 15
+ 10
+5
0
- 5

The less-than-usual ex­
tension of consumer credit
during the period from June
T o ta l
30 through September 30 of
this year is found in both
the instalment component
(monthly payment type of
credit) and in the noninstal­
ment component (consisting
of charge accounts, single
In sta lm e n t C re d it
payment loans, and service
credit). Instalment credit in­
creased by 3.4% during the
third quarter of 1953— the
JTX
smallest percentage increase
in any third quarter period
since the end of W orld W ar
II, except for 1951 when re­
N oninstalm ent C re dit
straint of consumer credit
extension was effective (see
chart). Noninstalment type
consumer credit outstanding
1 1 r , __
—
—
actually declined during the
1 1 1 1 LiSj
—
—
period from June 30 to Sep­
tember 30, 1953. Such a de­
5
5
8
1
2!
5
cline has occurred during
the third quarter of three
other postwar years, but this
year’s over-all reduction was the largest since 1945.
in new credit

15
Since the end of June, the
amount of consumer credit
+ 10
outstanding has b een in­
+5
creasing at a much slower
rate than at any time since
0
the removal of the consumer
- 5
<
£
>
credit restraint m ea su re,
<3
c>
r
Regulation W , in May 1952
— with one exception. The
one exception was the nor­
mally expected after-Christmas reduction
asked for.
The rate of new consumer credit extensions general­
ly slackens in July— in July of this year the increase in
total amount outstanding shrank to about half that in
July 1952. August made a little better showing, but
the increase was 15% less than that in August of last
year. During September, the increase in consumer
credit outstanding was 59% less than the increase in
the same month in 1952. In amount, the September
increase ($159 million) was the smallest dollar increase
of any September in the postwar years.




El

Consumer Instalment Credit— Important Asset for
Banks

The nation’s commercial banks which are members
of the Federal Reserve System held 39 cents of every
dollar of consumer instalment credit outstanding on
Tune 30, 1953— 93% of the total of such loans held by
all commercial banks. A t the end of 1945, member
banks held 28 cents of each dollar of instalment debt
owed by consumers. Since then the amount on their
books has increased nearly twelvefold— from $684 mil-

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jfic M s u p

lion to $8,062 million— from 3% of total loans to 14%.
For member banks in this District the change is sim­
ilarly striking: from $32 million of consumer instalment
loans outstanding at the end of 1945 to $394 million on
June 30, 1953, over a twelvefold increase. Consumer
instalment loans of the District’s member banks were
3.6% of total loans on December 31, 1945. On June
30 of this year, they made up 16.7% of the total.

December 1953

the total was for such retail purchases as household
appliances and furniture. Loans for the repair or mod­
ernization of homes made up over one-tenth of total
instalment loans on the banks’ books. These three
categories together accounted for three-fourths of all
consumer instalment loans held by District member
banks on that date. The remaining one-fourth of the
total is not classified by purpose and undoubtedly in­
cludes some purchases which, if known, would have been
included in the three categories above. Primarily, how­
ever, these “ cash instalment loans” are thought to cover
such payments as those for medical and hospital fees,
personal debts, and payments for services or nondurable
commodities.

This unusual growth in individual’s instalment bor­
rowings from banks, for the purchase of consumer
goods, represents in some measure the correction of
wartime distortions. Consumer durable goods— such
as automobiles, refrigerators, washing machines— be­
came almost unobtainable as war needs made greater
South Carolina’s member banks have experienced a
and greater demands oh basic materials and manpower.
faster rate of growth in consumer loans outstanding
Concurrently, credit for consumer uses was severely re­
since the beginning of the Korean W ar than member
stricted, not only by Regulation W ’s direct effects on
banks in any other state in
down-payment and maturi­
the D is t r ic t . Their total
ty requirements, but also by
consumer loans increased
the u n u s u a lly h e a v y de­
CONSUMER CREDIT AT MEMBER BANKS
75% from June 30, 1950 to
mands for credit to support
FIFTH DISTRICT AND UNITED STATES
the war effort.
September 30, 1953. M em­
Percent change from June 30, 1950
ber banks in the District of
This “ return to normal­
Columbia take second place
cy” is by no means the en­
60
60
and those in North Carolina
tire e x p la n a t io n o f the
are in third place with in­
extraordinary g r o w t h in
/ ^
creases of 63% and 55%
consumer instalment credit
40
40
respectively. In South Car­
extended by member banks
olina, the fastest growing
— or by other types of lend­
category of consumer in­
ers or sellers on a credit
20
20
stalment loans was for re­
basis. In large part it rep­
pair or m o d e r n iz a t io n of
resents a changing mode of
0
0
living. Development a n d
homes. In W est Virginia,
1950
1951
1952
1953
mass production of durable
repair and modernization
* Bo e lift*, «stiml«d
r kn
a
consumer goods both pro­
loans almost doubled during
moted and was promoted by
the period. North Carolina
the creation of mass consumer credit— the transfer of
member banks showed the most rapid growth in loans
future purchasing power into present standard of living.
for retail purchases, and those in South Carolina the
Just prior to W orld W ar II, durable goods purchases
fastest growth in automobile loans. Instalment loans
made up less than 10% of total personal consumption
for automobiles almost doubled at Maryland member
banks over this period.
expenditures. Such purchases dropped as low as 6%
of the total during the war. The post-W orld W ar II
In spite of a faster rate of growth in other District
years, however, brought to the market an ever-rising
states in recent years, Virginia member banks hold by
tide of one-time luxuries— new model cars, T V sets,
far the largest share of consumer type loans outstanding
new styles in furniture, garbage disposal units, dish
at District member banks. These banks held 32% of
washers, freezers, power mowers and numerous other
the total outstanding on September 30, 1953— a slight
entertaining or labor-saving devices. Consumer credit
decline from 33% on June 30, 1950. North Carolina
was the prime and absolutely essential mover. By the
follows with just over 20% of the total on both dates,
third quarter of 1953, purchases of durable goods were
but member banks in this state have the largest share
estimated to make up over 13% of the highest level of
(3 1 % ) of automobile instalment loans. South Caro­
personal consumption expenditures ever achieved.
lina member banks hold the smallest— but a steadily in­
creasing— share of the total. They advanced from 6.9%
Consumer Loans at District Member Banks
of the total in June 1950 to 8.0% on the more recent
Nearly half of all consumer instalment loans outstand­
date. Member banks in Maryland hold 13% of total
ing at District member banks on September 30, 1953
member banks’ consumer loans in the District, while
represented the purchase of automobiles. One-fifth of
West Virginia has 12% and District of Columbia, 14%.




/

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Federal Reserve Bank of Richmond

Business Conditions and Prospects
trict made a remarkable comeback ( 12% ) from the Sep­
tember level, but were 5% below last year. Cash sales
of stores reporting the figure showed a rise of 18% com­
pared with an increase of 6% for credit sales from Sep­
tember to October. It is interesting to note that cash
sales of the stores were 1% ahead of a year ago, where­
as credit sales were down 6% . Furniture stores in
the District have made considerable progress in reduc­
ing inventories during the last half of this year thus
far. October inventories fell 1rv from September (after
seasonal correction ) but continued 5% ahead of a year
ago. Relative to the high point in May this year, O cto­
ber inventories (adjusted) were down 12%. House­
hold appliance store sales rose, as was customary be­
tween September and October, but the October level
was 13(/ under a year ago.
(

N balance, business activity in the Fifth District
has improved moderately over the seasonally ad­
justed levels of September. A major part of the im­
provement came at the retail trade level, but the cotton
textile and ravon industries also showed moderate im­
provement over September levels.
Employment in District manufacturing industries in
September reached the all-time peak established in 1943
for the first time since that peak was established. While
manufacturing employment was 2%. higher than a year
ago, other nonagricultural employment was down 2( ' .
<
Despite the favorable trade level and the moderate
improvement in textiles, the underlying situation in the
District was hardly one of strength. Business policies
have turned extremely conservative and their purchases
have been made accordingly. Numerous small layoffs
and cutbacks have been noted, and department store
outstanding orders have declined markedly. Bank debits
declined 1% further to put the adjusted index at the
lowest level of the year. Demands for bank credit have
fallen far below normal seasonal proportions. Despite
the still high dollar levels of construction activity, con­
struction employment was no longer widespread and
many areas have considerable unemployment resulting
from building cutbacks. Fxcept in drugs, electrical sup­
plies, and paper, the wholesale trades were no longer
showing exuberance. Other lines were running below
a year ago from moderate to substantial proportions.

O

Sales of life insurance (adjusted) in October drop­
ped 29/ from September but held at a level 6% ahead
of October 1952. October adjusted life insurance sales
were within 2.9% of the year’s peak which was estab­
lished in July.
Seasonally adjusted sales of the wholesale trades in
October showed gains over September of 19% in auto­
motive supplies, 6% in drugs, 4%; in electrical goods,
and 7% in industrial supplies. Declines of 12% were
recorded for dry goods, 6% for groceries, 29% for
hardware, 13% for paper, and 6% for tobacco. Rela­
tive to October 1952, paper was the only wholesale line
to show a substantial rise— 21% . Small increases of
3% were recorded for drugs and 7r ( for electrical
/
goods. All other lines showed decreases from last year,
ranging from 3% to 37% .

Trade

Final figures on new passenger car registrations for
September in the District were down 1% from August
but 45 9c ahead of a year ago. This was essentially the
same performance as shown nationally. Four states for
October showed an unusual performance by gaining 7%.
over September and 299r over the first post steel strike
month of a year ago. Nineteen states reporting thus
far for October showed a gain over last year of 27( \.
This unusually good sales performance for passenger
automobiles in October was done with both price con­
cessions and liberal trade-in allowances. It remains to
be seen whether these represent borrowing from next
year.
Department store sales (adjusted) rose 2(7 from Sep­
c
tember to October, but the current level was 8% under
a year ago. At the sales rate of the first three weeks
of November, indications were that the level in that
month will be back to that of September. Department
store inventories, which had taken a fairly substantial
drop from August to September, rose 2( ' to October to
<
a level 6% ahead of a year ago. Outstanding orders
of department stores declined ].69< after seasonal cor­
rection from September to October, and in the latter
month, a decline of 2Sc was registered from a year ago.
/c
October adjusted sales of furniture stores in the Dis­




Construction

The construction industry in October showed sub­
stantial strength with adjusted total contract awards
37% above September and 16% above a year ago. In
the first ten months of the year these awards were 6%
ahead of the like period of 1952. With the exception
of factory buildings and public works and utility awards,
all lines of construction contributed substantially to the
September-October rise. Total construction contract
awards rose $33 million from September to October.
An increase of $23 million in residential awards and
$19 million in nonresidential awards was offset in part
by a drop of $9 million in awards for public works and
utilities.
In the first ten months of 1953 residential construc­
tion contract awards were down 13% , nonresidential
awards were up 17% , and public works and utilities
were up 25% .
Textiles

Prices have continued to ease on cotton goods and
svnthetic fibers with onlv small transactions involved.
8

December 1953

jfu M s u *

Despite this fact, the cotton textile industry in October

0.1%, ahead of October last year.

Holdings of U. S.

showed moderate improvement after seasonal correction

Government securities dropped 0.2% to a level 4.3%

over September and as measured by cotton consump­

below last year.

tion.

Textile varn shipments also improved consider­

during October and stood 1.5% ahead of a year ago.

ably in viscose rayon and in viscose and acetate staple

Total loans and investments were down 0.2% but were

and tow.

0.6% ahead of last year.

Indications in the trade, however, are that

Other security holdings rose 2.1%,

business in both cotton and synthetic textiles is slow

Total deposits of all member banks were down 0.1%

and that numerous small cutbacks have been effected in

in October and stood at the same level as in October

output.

Moderate improvements in sales of print cloths

1952.

Time deposits rose 0.8% further during O cto­

and broadcloths have been effected, but these have hard­

ber to a level 5.2% ahead of a year ago.

ly been sufficient to offset slowness in other types of

of member banks from the Federal Reserve Banks were

goods.

Yarn spinners, with backlogs practically de­

Borrowings

down 21.6% during October and down 60.8%: from a

pleted, are feeling somewhat optimistic about the out­

year ago.

look despite the continued lack of business.

October but 6.2%' below a year ago.

At the

Borrowings from others were up 7.4%

in

Member banks

weaver level in synthetics, the situation appears to be

have increased their capital accounts over the past year

worsening rather than improving— despite the October

by 0.4% which compares with no change in total de­

increase of yarn shipments from producers.

posits and 0.1%; decline in total assets.

In the

hosiery industry, shipments of all types in September

Business loans of the weekly reporting banks have

were down a little more than 1% below a year ago with

failed to show substantial seasonal rise this Fall, falling

women's full-fashioned hosiery shipments down 6% and

in line with the more conservative policy of business

all other types about the same as last year.

concerns in this District.

In the first

It also seems to indicate an

nine mouths of the year, total hosiery shipments were

unwillingness to make further inventory accumulation,

down 1.5%' from last year— accounted for entirely by

and may herald some reduction in inventories.

a drop in women's full-fashioned hosiery.

loans of the weekly reporting banks have shown a

All other

types were at the same level as last year.

slightly

rising

trend

since

mid-Summer,

“ Other”
indicating

hesitancy on the part of both banks and consumers to
Agricultural Situation

expand consumer credit at the same rapid pace as
earlier in the year.

September farm income in the District was 5% ahead

Real estate loans of these banks

of a year ago with crop income up 9%> and that from

are just about holding their own in this District and

livestock down 7% .

have done so through most of the present year.

in the first nine months farm in­

come for the District was down 3% , with crop income
down 4%■, and livestock income down 2% .

The Sep­

tember rise in farm income was no doubt strongly in­
fluenced by the increased marketings and the higher
prices of tobacco in the Border and Eastern Carolina
belts.

Both quantity and prices of the middle belt and

ADDITION TO PAR LIST

old belt were down substantially from a year ago and
prices were also weaker.

jS
J

October farm prices in M ary­

land were down 10% from a year ago with the ten
months’ figures down 8 f v ,

The Bank of Norview, Norview, Virginia, a

In West Virginia farm

newly chartered nonmember bank located in the

prices were down 16% in October from a year ago and
down 11% in the ten months.

territory served by the Richmond

In South Carolina farm

prices were down \5% from a year ago and down 14%'

drawn on it when received from the Federal R e­

in the eleven months.

serve Bank.

The combined A .B .A . transit nutn-

ber-routing symbol of the bank is

Banking

Loans and discounts of all member banks in the Fifth
District dropped 0.6% during October but remained




Head Office,

agreed to remit at par, effective at once, for checks

i 9 y

Federal Reserve Bank of Richmond

Some Long Term Developments In Mortgage Lending
Continued from page 5

Life insurance companies and savings and loan as­
sociations have shown the greatest growth in their
mortgage loans. These two types of lenders, taken to­
gether, held 449r of all mortgage debt outstanding at
the end of 1952. In 1922 they held only 17% . Of the
$21.2 billion of mortgage debt held by insurance com­
panies at the end of last year, 43U were Government
insured or guaranteed. The savings and loan assoc­
iations held $18.4 billion of mortgages of which 2V/<
were insured or guaranteed by the Government.
The important contribution of credit toward raising
modern living standards to very high levels is exempli­
fied by mortgage credit in the United States. In addi­
tion to its implications of increased ownership of homes,
the mortgage debt picture reflects a very high level of
activity in the building industry with repercussions
reaching into almost every facet of the nation’s economy.
Through September of this year, mortgages recorded
exceeded in dollar amount the mortgages recorded in
the first nine months of either 1952 or 1951, both years
in which oyer a million new homes were started. The
indications are that real estate developments in 1953 will
compare favorably with other boom years.

tion of principal but also insurance and real estate taxes.
This influence has been exerted both by direct lending
activity, such as that by the Home Owners Loan Cor­
poration to families faced with foreclosure, and bv in­
direct actions such as Government insurance or guaran­
tee of privately made mortgage loans and Government
participation in the secondarv market for mortgages.
Mortgage Lenders

Since the early 1920’s the more specialized institu­
tional lenders, including life insurance companies, com­
mercial banks, mutual savings banks, and savings and
loan associations, have been extending a larger and
larger share of total mortgage loans. Their share of
total mortgage debt outstanding in 1922, the earliest date
available, was 36% . At the close of 1952, these lenders
had increased their share of a considerably larger debt
to 74% . Other lenders, whose share of the total has
been declining over this period, include individuals,
trusts, trust departments of banks, pension funds, phil­
anthropic and educational institutions, fraternal and
beneficial organizations, casualty and tire insurance
companies, and real estate and mortgage companies.

F if t h
D E B IT S

TO

d is t r ic t

B a n k in g

D E M A N D D E P O S IT A C C O U N T S *
(000 omitted)
October
October
10 Months
10 Months
1953
1952
1953
1952

Dist. of Columbia
$1,114,755
Washington ______ $1,111,041
Maryland
1,378,953
Baltimore ________
1,446,562
23,581
26,746
Cumberland _______
23,886
23,997
Frederick _________
40,812
38,096
Hagerstown _______
North Carolina
64,763
59.486
Asheville _______ ___
382.749
Charlotte
___ _____
382,503
147,150
157,868
Durham ___________
122,050
116,098
Greensboro ________
High Point _______
45.651* *
NA
53.563
Kinston ____________
52.685
223.440
Raleigh ____________
226,642
50,915
47,729
W ilmington _______
70,120
77.671
Wilson _____________
173,796
175,952
W inston-Salem
South Carolina
79,556
85,223
Charleston ________
161,660
181,254
Columbia __________
116,053
111,669
Greenville _________
80,409
84.392
Spartanburg _____

$10,796,980

12,777,823
254,418
223,175
350,238

616,431
3,659,288
1.089,439
1,189,358
NA
288,523
1,911,097
475,292
301,799
1,529,920

600.597
3.442,359
1,069,249
1,060,057
NA
273.194
1,780,112
452,131
274,829
1,406,837

785,100
1,610,233
1.119,854
670,623

50 R E P O R T I N G M E M B E R B A N K S
(000 omitted)
Change in Am ount from
Nov. 11,
Oct. 14,
N ov. 12,
Items
1953
1953
1952
Total Loans __________ _________ $1,402,157**
+
5,667
+ 79.912
4~ 13.285
Bus. & Agric. _________________
640,907
1,237
4
4391
Real Estate Loans ____________
264,729
7,898
4All Other Loans ______________
512,826
3.982
+
4 59,100

$10,514,552

14.176,601
251,280
233,618
379,991

802,819
1.433.187
1,064,438
702.324

Total
U.
U.
U.

Securitv Holdings ..___ ___ 1,804,667
S. Treasury Bills _________
111,727
269.600
S. Treasury Certificates ....
S. Treasury Notes ________
351,281
I J. S. Treasury Bonds ________
838.302
Other Bonds, Stocks & Secur.
233,757
Cash Items in Process of Col. ..
357,638
Due From Banks _______________
185,750*
Currencv and Coin _________ ___
81,295
Reserve with F. R. Banks ______
537,595
Other Assets ... __________________
60,731
Total Assets ___________________ 4,429,833

38,071
5,036
4,619
__ 10,607
~r 41,627
6,634
+
_i_ 10,362
_ 23,567
_
1.238
3,107
2,182
+ 28,370

Total Demand Deposits ________ 3,385,637
Deposits of Individuals _______ 2,458,324
139,113
Deposits of U. S. Government
Deposits of State & Local Gov.
168,822
552,816*
Deposits of Banks ____________
Certified & Officers’ Checks ..
66,562
682.001
Total Time Deposits ____________
Deposits of Individuals _____
605,352
76,649
Other Time Deposits ________
35,500
Liabilities for Borrowed Money
All Other Liabilities _____ _______
46.582
Capital Accounts _______________
280,113

Virginia
248,61 1
281.643
30,946
28,304
Charlottesville ____
375,493
400,532
76,147
61,311
Danville __________
446,240
489,620
51,516
52,945
Lynchburg ________
472,246
47,010
480,585
49,672
N ewport News ___
2.562.083
2,422,442
258,614
257,445
N orfolk ___________
270,032
306,854
31,442
29,537
Portsmouth ______
5.856.598
6,21 1,225
698,443
683,739
Richmond _________
1.218,970
1,126,911
127,427
123.654
Roanoke __________
W est Virginia
476,674
440,919
49,442
46,951
Bluefield __________
1,721,990
1,588,121
168,276
191,121
Charleston _______
341,219
336,603
35,231
33,823
Clarksburg ________
706,434
698,615
75,258
73,836
H untington ______
293,886
30,833
309,399
34,483
Parkersburg _____
$53,099,427
$156,552,284
District Totals _____ .$6,072,247 $5,988,984
Interbank and U. S. Government accounts excluded.
Not included in District totals.
Not Available.




S t a t is t ic s

Total Liabilities ______________ $4,429,833

4
—

8,221
59,123
4 35,174
■F
5,256
_

+ .

21,292
5,622
4
-L..
1,992
1,946
446
14.500
1,301
2,356
-4
4-

28,370

Net figures, reciprocal balances being eliminated.
Less losses for bad debts.

10

56.709
154.036
+ 129,191
4- 56,530
94,666
6,272
4
8,344
— 29,231
_
3,168
_ 21,640
3,626
4- 35,554

4-

4-

_
4

75,820
92,174
12,900

_

13,837
2,116
4- 15,175
4 18,345
■4 20,857
_
2,512
_
4,800
4-

4

11.206
15,515

_

35,554

4'

December 1953

F if t h
SELECTED

S t a t is t ic a l

d is t r ic t

B U IL D IN G

IN D E X E S

October
1953

Avg. Daily 1935-39 = 100— Seasonally Adjusted

% chg
Latest
Oct.
1953
New Passenger Cars* _________
Bank Debits _____________________
Bituminous Coal Production .___
Construction Contracts ________
Business Failures— N o. ________
Cotton Spindle Hours _________
Department Store Sales** ____
Electric Power Production ----M anufacturing Em ploym ent* _
_
Retail Furniture:
N et Sales _
_
Life Insurance Sales ___________
Not seasonally adjusted.
1947-1949=: 100.
Hack figures available on

466
131
636
89
158
116
210
403

Sept.
1953
207
472
139r
463
62
159
114
431
162
188
410

Yr.
Ago.
+ 45
+ 2
+ 32
+ 16
+ 82
i
8
+ 8
+ 2
- 5
+ 6

Sales in
Oct. 1953
compared with
Sept.
Oct.
1952
1953
+28
-3 0
_ 7
_ 9
-1 4
— 9
+ 5
+ 16
+ 7
+ 9
— 9
— 16
... 1
+ 1
+ 11
+ 1
— 4
- 9
8
- 2
_ i
... 7

.

Balt.

W ash.

Other
Cities

Dist.
Totals

— 3.2

— 7.7

— 6.9

— 4.3

-

5.6

+

3.0

— 2.0

— 2.6

+

1.1

+

6.4

— 0.6

+

+

3.1

Outstanding orders
Oct, 31, ’53 vs ’52 _______

- 1 7 .9

— 27.9

— 25.2

— 18.8

— 24.0

Open account receivables Oct. 1
32.7
collected in Oct. 1958 ____

48.2

42.1

41.8

41.9

5.0




12.2

14.9

Md.
Sales. Oct. ’53 vs Oct, ’52

$ 71,010,575
566,990
2,161,452
2.152,545
968,856

$ 47,436,390
286,256
2.083,902
1,370,758
1,305.040

294,682
301,745
363,825
167,574
2,449,780
112,598
218,230
2,052,282
870,712
82,250

3,264,955
3,340,662
3,900.406
1,993,044
15,348,504
1,643,350
6,332,638
16,328,126
14,325,207
1,801,402

4.433,498
1,649,564
2,193,317
6,539,536
17,270.160
1,896,372
6,613,460
17,453,955
8,534,205
1,200,605

501,949
76,208
3,057,467

334,737
71,175
441,513

11,135.467
2,056,869
8,024,427

11,011,645
1,130,655
6,741,979

North Carolina
Asheville ______
Charlotte _____
Durham _______
Greensboi*o
High Point ....
Raleigh _______
Rocky Mount ..
Salisbury ____
Wilson ___ ____
W inston-Salem

249,408
1,300,628
1,048,856
748,696
354,676
1,119,762
608,550
228,255
68,600
906,396

480,726
1,286,817
736,146
431,000
263,220
2,147,509
143,335
84,610
74,300
801.982

3,063,765
28,475,588
6,097,224
8,889,735
4,424,175
19,539,664
4,175,185
1,937,184
1,692,531
7,737.399

3,074,029
16,945,658
8,810,736
7,556,534
2,988,725
15,030,403
2,427,207
1,890,560
1,974,025
10,362,469

South Carolina
Charleston
Columbia ____
Greenville ____
Spartanburg ..

195,076
1,213,588
321,350
78.405

164,058
550,859
769,630
104,225

4,808,178
7.970,163
4,859,492
877,700

1.669,500
8,818,726
8,061,202
1.874,936

3,687,255

6,448,678

64.512,274

47,199,617

Totals ..$24,892,872

$27,875,712

$335,415,732

$277,835,624

R E T A IL

Stocks, Oct. 31, ’53 vs ’52 „

Instalment receivables Oct. 1
collected in Oct. ’53 ...... .

$ 5,125,815
27,800
66,179
213,625
244,095

240,914
131,784
345,839
83,875
1,975,883
156,800
125,167
1,134,935
1,023,343
202,225

O P E R A T IO N S

Rich.
Sales, Oct. ’53 vs Oct. ’ 52 ....

10 Months
1952

Dist. of Columbia
W ashington

Stocks on
Oct. 31, 1953
compared with
Oct. 31,
Sept. 30,
1952
1953
+ 14
+ 14
____
....... .
0
+ 8
— 3
+ 4
+ 3
+ 15
— 5
+ 6
+ 5
+ 4
____
+ 10
4- 1
+ 30
4 7
+ 17
-4 3
-

(Figures show percentage changes)

Sales, 10 Mos. ending Oct. 31, ’53
vs 10 Mos. ending Oct. 31,
— 0.1
'52 __________________________

10 Months
1953

Virginia
Danville ______
Hopewell ____
Lynchburg
Newport News
Norfolk _______
Petersburg
Portsmouth ....
Richmond ____
Roanoke ______
Staunton ______

District

STORE

F IG U R E S

W est Virginia
Charleston
Clarksburg
Huntington ....

_
_

Number of reporting firms in parentheses.
Source:
Bureau of the Census. Departm ent of Commerce.

DEPARTM ENT

P E R M IT
October
1952

Maryland
Baltimore ____ iB 3,257,095
.
Cumberland
79,750
Frederick ____
171,185
H agerstown ...
153,243
Salisbury ______
45,709

Mo.

Prev.
Mo.
0
— 1
— 6
+ 37
+ 44
— 1
+ 2
+ 4
+ 1
+ 12
- 2

Oct.
1952
176
458
99
549
49
159
126
398
161
221
380

W H O LESALE TRADE

L IN E S
Auto supplies (8) ---------------Electrical goods (4 ) ------------Hardware (15) -------------------Industrial supplies (8 ) ____
Drugs and sundries (12) ....
Dry goods (13) _____________
Groceries (43) ______________
Paper and products (6) ___
Tobacco products (11) ____
Miscellaneous (90) _________
District Totals (210) ......

D ata

D.C.

Va.

W .V a .

13.3

— 7.6

— 6.9

— 3.9

— 5.2

18.2
N .C .
- 3 .8

0.0

14.2
S.C.
— 4.2

F U R N IT U R E

SALES

Percentage comparison of sales in
periods named with sales in same
periods in 1952
STATES
October 1953
10 Mos. 1958
Maryland (6 ) ________________ ____ —.
— 3
-4-1
Dist. of Col. (7) ___________________
— 15
-9
Virginia (23) ______________________
— 8
—4*
W est Virginia (10) ________________
• 4
•
+2
North Carolina (14) ______________
— 3
- 5
South Carolina (6 ) _________________
— 8
—6
District (66) _______________ ___ —
— 9
— 5*
IN D I V I D U A L C IT IE S
Baltimore, Md. (6 ) _________________
— 3
4-1
W ashington, D. C. (7 ) ___________
— 15
—9
Richmond, V a . (12) ________________
— 14
-7 *
Charleston, W . V a . (3 ) ___________
— 17
-f-1
Number of reporting firms in parentheses.
* Cumulative sales figures based on a slightly smaller sample than
monthly sales figures.

i ii h




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