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MONTHLY REVIEW o f Financial and Business Conditions F if t h Federal Reser v e D istrict Federal Reserve Bank, Richmond, Va. February 29, 1940 Summary of January Business Conditions first month o f 1939. Bituminous coal mined in January exceeded production in December by 24 per cent and in January 1939 by 29 per cent. S E V E R A L indicators o f business conditions customar ily decline sharply in January and the first half o f February, but this year’s recessions were moderate in the Fifth Reserve district, and in comparison with trade and industry in the first six weeks o f 1939, this year shows a continuation o f a much higher level o f activity. The only distinctly unfavorable comparison with January last year is in construction, both building permits and con tracts awarded declining materially this year. However, this year's figures are compared to unusually high figures for January 1939, and in addition severe weather this year mitigated against formation o f construction plans. Debits to individual accounts figures, while showing a normal decline from December figures, were 13 per cent above January 1939 debits. Tobacco sales in the district were larger in January than is normal for that month, marketing this year being later because o f the shut-down o f markets in September and October. Business failures increased in January over December, as they nearly always do, but declined 15 per cent from the number o f insol vencies reported in January last year. Cotton consump tion in Fifth district mills in January was at a record level for that month, and exceeded January 1939 con sumption by 20 per cent, while shipments o f rayon yarn to consumers were 18 per cent above shipments in the RETAIL DISTRIBUTION CONTINUES ACTIVE A continuation o f activity in retail lines attests a dis tinct improvement in consumer purchasing power over a year ago. Sales reported by 31 department stores in the Fifth district for January were 9 per cent above the volume o f sales in the same stores in January last year, and 39 retail furniture stores indicated an increase o f 8 per cent in this year's business. Reports from 184 whole sale firms also give an increase o f 8 per cent in sales this January over January a year ago. New automobiles registered in January 1940, in spite o f severe weather and roads which were practically closed the final week in the month, increased 28 per cent over registrations in January 1939. Such farm work as is usually done at this season has been retarded by cold, rain and snow, but the rain and snow gave the soil plenty o f moisture and in the end will be beneficial to farmers. W hile crops in certain sections o f the United States were severely hurt by cold weather, the Fifth district apparently escaped substantial damage o f this kind. BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT Debits to individual accounts (25 cities)....... Sales, 31 department stores, 5th district......... Sales, 39 furniture stores, 5th district............... Sales, 184 wholesale firms, 5th district............. Registrations, new autos, 5th district............... T obacco sold in 5th district (P ou nds)............ Growers' receipts from tobacco, 5th district.. Average price of tobacco, per 100 lbs.............. Number of business failures, 5th district....... Liabilities in failures, 5th district.................... Value of building permits, 31 cities.................. Value o f contracts awarded, 5th district........... Cotton consumption, 5th district (B a les)......... Cotton price, cents per pound, end o f month.. Print cloths, 38>4 in., 64x60s, end o f month.... Rayon yarn shipments U. S, (Pounds)............. Rayon yarn stocks, U. S. (Pounds).................. Bituminous coal mined, U. S. (T o n s).............. January 1940 December 1939 January 1939 $1,381,416,000 7,218,855 $ 922,580 $ 9,833,000 $ 17,660 $1,530,670,000 19,163,614 1,692,254 9,679,000 $ 19,330 $1,223,743,000 6,604,159 855,203 9,085,000 $ 13,771 $ $ $ $ $ 51,332,975 6,082,958 11.85 58 579,000 4,987,380 22,016,000 346,605 10.52 5.25 31,900,000 7,000,000 46,155,000 $ $ $ $ $ 78,350,037 10,387,046 13.26 48 544,000 5,280,866 22,358,000 307,369 10.93 5.50 32,000,000 6,400,000 37,283,000 $ $ $ $ $ % Change Year Month — 10 — 62 — 45 + 2 — 9 + 13 + 9 + 8 4- 8 + 28 17,989,861 2,477,204 13.77 68 618,000 10,266.893 — — — + + — +185 +146 — 14 — 15 — 6 — 51 25,613,000 287,869 8.56 4.25 27,100,000 39,500,000 35,750,000 — 2 + 13 — 4 — 5 0 + 9 + 24 34 41 11 21 6 6 — + + + + — + 14 20 23 24 18 82 29 MONTHLY REVIEW 2 RESERVE BANK FIGURES C H A N G E L ITTLE more o f 20 per cent. A ll cities declined in January from December except Columbia, which rose 3 per cent. Total earning assets o f the Federal Reserve Bank o f Richmond remained practically unchanged between Janu ary 15 and February 15, while Federal Reserve notes in actual circulation declined seasonally and member bank reserve deposits rose moderately. The bank’s cash re serves also increased during the month. In comparison with figures for February 15 last year, this year’s figures show substantial increases in Reserve notes in circulation, in member bank reserve deposits, and in the Bank’s cash reserves. RESERVE BAN K STATEMENT ITEMS Fifth District 000 omitted Feb. 15 Jan. 15 ITEMS 1940 1940 Discounts held ................................ Foreign loans on gold................... Open market paper....................... Industrial advances ..................... Government securities ............... Total earning assets ............... Circulation of Fed. Res. notes. Members’ reserve deposits......... Cash reserves ................................ Reserve ratio .................................. $ 117 216 0 933 125,583 $126,849 219,648 297,664 438,385 77.96 $ 122 216 0 942 125,583 $126,863 221,031 288.976 430.976 77.57 Feb. 15 1939 $ 140 0 24 1,249 133,524 $134,937 196,42)7 229,093 361,713 73.78 M EM BER BANK LO AN S RISE SL IG H TLY Loans made by 41 regularly reporting member banks increased slightly between January 17 and February 14, but investments in securities declined by about the same amount. Both demand and time deposits rose during the four weeks, and reserve balances increased at the Reserve bank. Figures for most items in the skeleton statement o f condition are materially higher than at mid-February last year, cash in vault rising 32 per cent, reserve balances 31 per cent, demand deposits 15 per cent, and loans and discounts 13 per cent. SELECTED ITEMS— 41 REPORTING BANKS Fifth District 000 omitted Jan. 17 Feb. 14 ITEMS 1940 1940 Loans and discounts ................................ Investments in securities ..................... Reserve bal. with F. R. bank............... Cash in vaults .................................... ........ Demand deposits ...................................... Time deposits ............... ............................. Money borrowed ......................... .............. $262,975 450,497 192,962 22,024 531,919 200,084 0 $260,994 452,239 191,585 21,501 529,359 198,761 0 Feb. 15 1939 $232,604 430,160 146,816 16,694 464,032 197,779 0 M U T U A L SA VIN G S A G A IN SET RECO RD For the second successive month, mutual savings de posits in 10 Baltimore banks rose in January to a new record. The total o f $222,744,893 on deposit on Janu ary 31, 1940, was 0.3 per cent above deposits aggregating $222,060,975 on December 31, 1939, and 1.5 per cent over $219,452,382 on deposit on January 31, 1939. The December 31 figure was the highest on record to that date. Nine o f the 10 mutual savings banks increased their deposits last month, while 8 o f the 10 increased them over the January 1939 figures. DEBITS C O N TIN U E A B O V E PREVIO U S Y E A R Checks cashed against depositors’ accounts in 25 Fifth district cities in January 1940 totaled 13 per cent above debits in January last year, but showed a seasonal re cession o f 10 per cent from December 1939. In com parison with figures for January 1939, last month’s figures were higher in every city, Newport News leading with an increase o f 46 per cent, followed by gains in Durham o f 26 per cent, in Charlotte o f 24 per cent, in Parkersburg o f 22 per cent, in Danville o f 21 per cent, and in Balti DEBITS TO IN D IV ID U AL ACCOUNTS Fifth District 000 Maryland Baltimore ............. Cumberland ......... Hagerstown ......... Dist. of Col. Washington ......... Virginia Danville ............... Lynchburg ........... Newport News . . Norfolk, ............... Portsmouth ......... Richmond ............. Roanoke ............... West Virginia Charleston ........... Huntington ......... Parkersburg ......... North Carolina Asheville ............... Charlotte ............. Durham ................. Greensboro ........... Raleigh ................. Wilmington ......... Winston-Salem . . South Carolina Charleston ........... Columbia ............. Greenville ............. Spartanburg District Totals . . omitted % of Change Year Month Dec. 1939 Jan. 1939 $ 401,652 8,041 8,585 $ 433,143 9,350 9,734 $ 333,709 7,015 7,312 — 7 — 14 — 12 + 20 + 15 + 17 281,077 301,770 258,068 — 7 + 9 10,065 15,861 11,664 51,563 4,534 159,624 27,913 15,161 16,930 12,933 58,812 5,393 183,817 31,490 8,331 15,041 7,982 48,237 4,065 158,338 24,753 — 34 — 6 — 10 — 12 — 16 — 13 -1 1 + + + + + + + 21 5 46 7 12 1 13 50,997 17,295 10,298 59,733 20,640 15,220 44,580 15,734 8,440 — 15 — 16 — 32 + 14 + 10 + 22 13,251 68,517 31,294 20,089 53,245 11,895 39,841 14,281 75,215 37,117 24,271 57,414 12,337 49,037 12,M 55,401 24,780 17,994 48,817 10,568 38,343 — 7 — 9 — 16 — 17 — 7 — 4 — 19 + + + + + + + 9 24 26 12 9 13 4 19,822 30,456 22,309 11,528 $1,381,416 21,849 29,444 22,449 13,130 $1,530,670 16,644 27,194 19,794 10,406 $1,223,743 — 9 + 3 — 1 — 12 — 10 + + + + + 19 12 13 11 13 Jan. 1940 CITIES BANK RUPTCIES SHOW SE ASO N AL RISE Pressure o f year-end settlements usually proves disas trous for many firms, and consequently business failures tend to rise in January over December. This rise oc curred in both the Fifth district and the United States in January 1940, but improvement was shown in com parison with failures in January 1939. Bankruptcy fig ures reported by Dun & Brad street are as fo llo w s: Number of Failures District U. S. PERIODS January 1940 December 1939 January 1939 . 58 48 68 1,237 1,153 1,567 Total Liabilities District U . S. $ 579,000 544.000 618.000 $15,279,000 13,243,000 20,790,000 W E A T H E R REDUCES E M P L O Y M E N T Some seasonal reduction in employment occurred in January, due to release o f extra workers taken on by retailers for the holiday trade and to closing o f tobacco markets in certain cities. In addition, weather was so unfavorable for outside work during practically the en tire month that building tradesmen and unskilled labor on construction projects worked very little. On the other hand, industrial plants continued operations at a high rate, and coal production in January rose. On the whole, employment in January was below the level o f Decem ber, but the change was relatively small and was tem porary to a considerable degree. The following figures, compiled chiefly by the Bureau o f Labor Statistics from reports furnished by a large number o f industries, show the trends o f employment and payrolls in the fifth district from December to January, the latest available figures: Percentage change from Dec. 1939 to Jan. 1940 STATES Maryland ............... Dist. of Columbia Virginia ................. West Virginia North Carolina . . . South Carolina . . . In number on payroll — 4.9 — 14.1 — 2.3 — 3.3 — 2.2 — 0.1 In amount of payroll — — — — - 5.0 9.6 3.1 2.5 4.6 1.1 3 MONTHLY REVIEW A U T O SALES A B O V E JA N U A R Y 1939 There was a 9 per cent decrease in registration o f new passenger automobiles in the Fifth Reserve district in January 1940 in comparison with December 1939 regis trations, but figures for last month were 28 per cent higher than January 1939 figures. The decrease in registrations from December to January was seasonal, and was further accounted for by severe weather from January 24 to the end o f the month, deep snows especially in Virginia and the two Carolinas adversely affecting distribution o f new cars. Sales by manufacturers to dealers in January set a new record for that month, and indicate that dealer stocks increased moderately during the month. Stocks o f used cars also rose during Janu ary, but by not more than seasonal average. Plans made by manufacturers for the spring are based upon expec tations of a continuation o f sales substantially exceeding those for 1939. REGISTRATION OF N E W PASSENGER CARS— Number STATES January 1940 January 1939 % Change Maryland .............................. 3,346 2,486 +35 Dist. of Columbia ............. 1,730 1,282 4-35 Virginia ................................ 3,897 3,041 +28 West Virginia ................... 2,045 1,423 4"44 North Carolina ................. 4,296 3,609 4" 19 South Carolina ................... ..................... 2,346___________ 1,930____________4~22 District ............................ 17,660 13,771 +28 Shipments o f coal through Hampton Roads this calendar year prior to February 10 totaling 2,921,641 tons exceeded shipments o f 2,580,901 tons in the same period last year by 13.2 per cent. In the Fifth district, coal mined in January 1940, December 1939 and January 1939, was as follow s: SOFT COAL PRODUCTION IN TONS REGION Contracts actually awarded in the Fifth district in January 1940 totaled $22,016,000, compared with $22,358,000 for December and $25,613,000 for January 1939. Virginia and South Carolina contract awards in January exceeded the January 1939 awards, but all other sections o f the district declined. Contract figures for Fifth dis trict states, as reported by F. W . Dodge Corporation, were as follows in January 1940 and 1939: CONSTRUCTION CONTRACTS AW ARDED % Change Maryland ....................... $ 6,319,000 $ 6,969,000 — 9 Dist. of Columbia . . . . 2,529,000 3,583,000 — 29 ....................... 5,163,000 4,869,000 + 6 Virginia West Virginia ............. 908,000' 3,484,000 — 74 North Carolina ........... 4,009,000 4,163,000 — 4 South Carolina ................................ 3,088,000___________ 2,545,000_________ + 2 1 Fifth District ........... $22,016,000 $25,613,000 — 14 C O A L M IN IN G CONTINUES A C T IV E Bituminous coal mined in the United States in January 1940 totaled 46,155,000 net tons, 23.8 per cent above 37,283,000 tons mined in December and 29.1 per cent above 35,750,000 tons in January 1939. Total production this coal year to February 10 amounted to 342,797,000 tons, an increase o f 11.3 per cent above 307,967,000 tons dug during the 1938-1939 coal year before February 10. 9,513,000 1,242,000 163,000 10,918,000 37,283,000 29.3 8,809,000 1,149,000 143,000 10,101,000 35,750,000 28.3 Fifth district cotton cloth and yarn mills continued operations at an unusually high rate since the beginning o f 1940, despite a tendency to slow down since the middle o f January. Cloth prices weakened slightly in the past month, and yarn prices also softened. Orders received in the past month or two did not keep pace with produc tion, and mills not only reduced the backlog o f orders built up last fall but in some instances added to goods in stock. Consumption o f cotton by states in the Fifth district in January 1940, December 1939 and January 1939, in bales, is shown in the accompanying table: COTTON CONSUMPTION— FIFTH DISTRICT In Bales Construction provided in building permits issued in January 1940 was in materially smaller volume than in January 1939, and also below the level o f December 1939. Very severe weather in January this year probably played a part in keeping down permits. Thirty-one cities issued permits totaling $4,987,380 in January, a decrease o f 5.6 per cent below $5,280,866 reported for December permits and 51.4 per cent below permits amounting to $10,266,893 in January 1939. Washington led in January 1940 per mits with $1,413,255, followed by Columbia with $726,152, Baltimore with $557,682, Charlotte with $529,605, and Richmond with $351,225. Only 8 o f the 31 cities reported higher figures last month than in January 1939. January 1940January 1939 11,155,000 1,441,000 164,000 12,760,000 46,155,000 27.6 C O T T O N T E X T IL E P R O D U C TIO N EXCEEDS ORDERS CO N STR U C TIO N SLOWS D OW N STATES January 1940December 1939 January 1939 West Virginia ....................... Virginia .................................. Maryland ................................. 5th District ......................... United States ..................... % in D is tr ic t..................... MONTHS No. Carolina So. Carolina January 1940 ..................... December 1939 ................. January 1939 ..................... 190,290 172,881 157,469 142,554 124,987 118,879 Virginia District 13,752 9,501 11,521 346,605 307,369 287,869 R A Y O N D ELIVERIES C O N TIN U E LA R G E Shipments o f rayon filament yarn to domestic mills in January 1940 totaled 31,900,000 pounds as compared with 32,000,000 pounds in December and 27,100,000 pounds in January 1939. Stocks o f rayon yarn held by producers at the end o f January amounted to 7,000,000 pounds, registering the first increase in stocks over, the preceding month since April 1939. Stocks on December 31 stood at 6,400,000 pounds, and on January 31, 1939, stocks in primary hands totaled 39,500,000 pounds. The importance o f rayon as a textile fiber has grown enormously in recent years, and since the Fifth Reserve district is a leading producer o f rayon, the following data from Rayon Organon is o f interest: A N N U A L FIBER CONSUMPTION IN THE UNITED STATES (Percentages of total consumption) Years 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 Cotton 88.9 fS 86.5 85.9 86.1 85.8 86.6 87.3 87.2 86.3 85.5 84.1 82.2 83.6 83.0 83.8 78.2 80.8 82,5 80.9 79.6 * Data not available. Wool 9.9% 11.4 12.0 11.7 11.2 9.9 9.3 8.6 9.0 9.2 8.5 9.6 7.8 8.6 7.3 11.8 9.5 8.6 7.9 8.7 Rayon 0.3% 0.7 0.7 0.9 1.4 1.6 1.6 2.4 2.7 3.3 3.8 4.9 5.3 5.9 6.2 7.3 7.5 6.9 9.1 10.2 Silk 0.9% 1.4 1.4 1.3 1.6 1.9 1.8 1.8 2.0 2.0 2.5 2.4 2.4 1.6 1.8 1.8 1.4 1.2 1.5 1.0 Linen * * * * * * * * * * 1.1 0.9 0.9 0.9 0.9 0.9 0.8 0.8 0.6 0.5 U. 100% lOOi 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 S. Total (3,180.3) (3,001.0) (3,389.3) (3,622.7) (3,069.0) (3,548.9) (3,684.0) (4,113.8) (3,692,8) (4,005.5) (3,103.6) (3,232.6) (2,946.9) (3,678.1) (3,169.6) (3,524.7) (4,292.6) (4,434.9) (3,587.9) (4,558.3) Figures in parentheses, millions of pounds. All fibers except silk increased appreciably in poundage used in 1939 over 1938, and combined consumption o f MONTHLY REVIEW 4 4,558,300,000 pounds o f the five fibers set a new record. Cotton used in 1939 totaling 3,626,700,000 pounds was 25 per cent above 1938 and less than 1 per cent under the all-time high o f 3,657,100,000 pounds consumed in 1937. W ool consumption in 1939 o f 396,500,000 pounds was 39 per cent greater than in 1938 and only 6 per cent below the record o f 422,400,000 pounds in 1923. The 1939 consumption o f linen at 25,000,000 pounds was 21 per cent above 1938 consumption, but was substantially below the 1936 level. Silk continued to follow the down ward trend of recent years, the 1939 figure of 47,300,000 pounds being the smallest annual total since 1923. Final ly, rayon consumption (yarn plus staple fiber) set a new record o f 462,800,000 pounds in 1939, surpassing the previous record of 327,100,000 pounds in 1938 by 41 per cent. No. Carolina ............. N . C. season to 1/31 . Virginia (Flus-cured) (Fire-cured) (Burley) (Sun-cured) Virginia, Total ......... Va. season to 1/31 . . S. C., season ............... 5th District, Jan. . . . Dist., season to 1 /3 1 . COTTON CONSUMPTION AND ON HAND— Bales Jan. 1940 Jan. 1939 Fifth district states: 346,605 287,869 Cotton consumed ..................... Cotton growing states: 508,519 619,332 Cotton consumed ..................... Cotton on hand Jan. 31 in Coaasuming establishments . . 1,498,839 1,413,306 Storage & compresses ------- , 13,146,618 14,696,699 United States: 598,132 730,143 Cotton consumed ..................... Cotton on hand Jan. 31 in Consuming establishments . . 1,776,931 1,630,427 Storage & compresses ......... 13,206,819 14,757,627 289,514 Exports of cotton .......................... . 1,026,628 Spindles active, U. S................... . 22,872,414 22,496,544 Aug. 1 to Jan. 31 1940 1939 1,913,080 1,636,488 3,430,906 2,879,463 4,041,845 3,396,840 $11.55 15.68 10.02 11.41 17.84 12.26 12.16 14.53 14.56 11.85 15.39 3,402,018 501,847,559 1,852,747 6,937,390 4,675,904 1,121,802 14,587,843 110,495,887 86,670,522 17,989,861 699,013,968 $15.08 22.92 14.18 11.31 16.31 13.71 13.46 20.25 22.24 13.77 22.41 Production o f tobacco products rose sharply in January over December, and cigarette and cigar production went ahead o f January 1939. Production figures for January 1940 and 1939 were given by the Bureau o f Internal Revenue as fo llo w s: TOBACCO PRODUCTS M ANUFACTURED Jan. 1940 Smoking & chewing tobacco, pounds ............... Cigarettes, number ................. Cigars, number ........................ Snuff, pounds ............................ Jan. 1939 23,528,480 14,567,591,450 388,084,997 3,213,498 23,716,059 13,862,907,070 349,497,329 3,197,751 Change 1 + 5 + 110 — R E T A IL A N D W H O LE SA LE TR A D E DEPARTMENT STORE TRADE Net Sales J a n .1940 comp, with January 1939 Richmond (3) ..................... Baltimore (8) ..................... Washington (6) ................. Other Cities (14) ............... District (31) ................... — 0.1 + 16.2 + 7.3 + 6.2 + 9.3 Same stores by States with 24 stores added: Virginia (13) ..................... West Virginia (9) ........... North Carolina (9) ........... South Carolina ( 10) ......... + 1.4 + 19.9 + 0.9 + 14.7 Stocks Jan. 31, 1940 compared with Jan. 31 Dec. 31 1939 1939 + + + + + 7.8 1.6 6.3 6.1 4.8 — — — + — 1.3 8.2 4.7 0.4 5.0 Ratio Jan collections to accounts outstanding January 1 34.0 37.3 30.6 30.8 33.1 RETAIL FURNITURE SALES January 1940 sales, comp, with Jan. 1939 STATES 4,161,043 2,191,881 TO B A C C O M A R K E TIN G N E A R L Y CO M PLETED Tobacco markets in North Carolina and Virginia sold 51,332,975 pounds o f producers’ tobacco in January 1940, compared with only 17,989,861 pounds sold in January 1939. The average price paid last month was $11.85 per hundred pounds, against $13.77 per hundred paid in January last year. A small amount o f tobacco remained in growers’ hands on January 31, and some markets therefore continued sales in February, but season figures to January 31 shown in the accompanying table are sub stantially complete for the 1939 crop. They show an increase of 49 per cent in poundage sold this year, but a decrease o f 31 per cent in average price. Farmers in the Carolinas and Virginia received approximately $160,226,000 for tobacco from the 1939 crop prior to January 31, 1940, an increase o f 2 per cent over $156,649,000 received for the 1938 crop prior to January 31, 1939. 26,093,499 771,932,772 12,033,338 6,879,866 5,434,378 891,894 25,239,476 151,953,356 117,217,526 51,332,975 1,041,103,654 T O B A C C O M A N U F A C T U R IN G INCREASES CO TTO N CO N SU M PTION A N D EXPO RTS H IGH Spot cotton prices on 10 Southern markets moved through a narrow range between the middle o f January and the middle o f February. During the last half of January the price fell from a base average o f 10.87 cents on January 19 to 10.52 cents on February 2, but a recov ery followed and on February 9 and 16 the average base price was 10.86 cents. Consumption o f cotton in the United States set a January record of 730,143 bales last month, and exceeded all other months except March 1937. Exports of cotton in January totaling 1,026,628 bales were the largest for any January since 1927, and were 3.5 times the January 1939 exports o f 289,514 bales. Price per Cwt. 1939 1940 Producers’ Tobacco Sales, Pounds January 1940 January 1939 +21.6 Maryland, 10 stores ..................... Dist. of Columbia, 7 stores Virginia, 10 stores ................. .. North Carolina, 4 stores ........... South Carolina, 7 stores ........... District, 39 stores* ................. * Includes 1 store in W . Va. — 2.4 — 5.9 + 10.6 + 13.8 + 8.0 Individual Cities: Baltimore, 10 stores ................... Washington, 7 s to r e s................... Richmond, 5 stores ..................... + 21.6 — 2.4 — 28.3 W HO LESALE TRADE, 184 FIRMS LINES Auto supplies (5) ........... Dry goods (9) ............... .. Electrical goods (12) . . . Groceries (58) ................. Hardware (18) ............... Indus, supplies (14) . . . Plumbing & heating (4) Paper & products (7) Tobacco & products . ( 6) Miscellaneous (39) ......... Average, 184 firms. . . . (Compiled February 21, 1940) Net Sales January 1940 compared with Jan. Dec. 1939 1939 + 48 + 8 + 14 + 8 + 2 + 8 + 9 + 15 — 19 + 13 + 3 + 9 + 8 + 16 + 183 + 14 + 5 — 23 + 2 + » — 6 — 37 — 5 — 20 — 14 + 2 Stocks Ratio Jan. Jan. 31, 1940 collections compared with to accounts J a n .31 Dec. 31 outstanding 1939 1939 Jan. 1 + *8 + 30 + 20 + 21 + 9 + 9 + 19 + 37 + 3 — 1 — 1 + 1 — ’ 7; + ’2 4* *2 + 9 — *5 + 6 42 47 103 42 78 92 43 60 48 76 84 74 65 MONTHLY REVIEW, February 29, 1940 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION 140 130 In January and the first h alf o f F ebru ary industrial activity declined fr o m the high level reached in the latter part o f 1939. R etail trade, w hich had been in large volum e, decreased m ore than seasonally, w hile m erchandise exports w ere m aintained. PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 averagers 100. By months, January 1934 to January 1940. FACTORY EMPLOYMENT Index of number employed, adjusted for sea sonal variation, 1923-1925 average=100. By months, January 1934 to January 1940. V olum e o f industrial production declined som ew hat fr o m D ecem ber to January, and consequ ently the B oa rd’ s index, w hich allow s f o r a considerable seasonal increase, dropped sharply fr o m the high level o f 128 reached in D e cem ber to 120 in January. D ata available f o r the first h alf o f F ebru ary indi cate a fu rth er sharp red u ction in the index. Steel in got production, w hich had been above 90 per cen t o f capa city during m ost o f the fou rth qu arter o f 1939, has declined steadily since the turn o f the year and b y the middle o f F ebru ary w as at ab ou t 69 per cen t o f capacity. Plate glass production, w hich also had reached high levels in the latter part o f 1939, w as reduced in January and lum ber produ ction show ed a considerable decrease ow in g in part to unusually cold w eather in the Southern regions. A u tom obile production in January w as larger than is usual at this season. In the latter part o f the month, h ow ever, and in the first h a lf o f F ebru ary, as retail sales o f new cars declined seasonally and dealers’ stocks, w hich had been low er than usual at the begin ning o f the year, rose rapidly, the ou tpu t o f cars declined. In the m achinery industries activity w as gen erally sustained at the advanced levels reached in D ecem ber. O utput o f cotton textiles in January continued at ab ou t the high rate o f oth er recen t months bu t production o f w oolen tex tiles declined fu rth er fr o m the peak levels o f O ctober and N ovem ber, and ou tpu t o f silk produ cts rem ained in small volum e. A ctiv ity at m eat-packin g establishm ents w as m aintained in January at the high level prevailing fo r several m onths. Coal produ ction rose sharply, fo llo w in g a m arked reduction in D ecem ber, and w as at a b ou t the high level reached last O ctober. Output o f cru de petroleu m continu ed in large volum e. Value o f contracts awarded fo r both public and private construction de clined considerably in January, a ccord in g to reports o f the F. W . D odge C or poration. A w ards fo r private residential bu ildin g show ed a grea ter than sea sonal reduction and w ere low er than the level prevailin g a year ago. C ontracts fo r other private w ork declined som ewhat bu t rem ained in larger volum e than in the correspon din g period last year. EMPLOYMENT FREIGHT CAR LOADINGS F a ctory em ploym ent and pay rolls, w hich had risen sharply during the la t ter h alf o f 1939, declined by som ewhat m ore than the usual seasonal am ount fr o m the middle o f D ecem ber to the m iddle o f January, a ccord in g to reports from leading industrial States. DISTRIBUTION Sales at departm ent stores, variety stores, and m ail-order houses in Jan u ary declined more than seasonally from the high level o f Decem ber. T otal freig h t-ca r loadings showed a seasonal decline; shipm ents o f m iscellaneous freig h t and grain decreased, w hile coal loadings increased considerably. FOREIGN TRADE Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 averages 100. Miscellaneous, coal and all other expressed in terms of points in the total index. By months, January 1934 to January 1940. MEMBER BANKS IN 101 LEADING CITIES E xports o f United States m erchandise, w hich usually decline in January, w ere m aintained this year at the high level reached in D ecem ber. Shipm ents o f cotton , w hich have been large in recen t m onths, rose fu rth er, w hile exports o f m any industrial products declined. E xports to the U nited K in gdom increased sharply, ow in g m ainly to larger cotton shipm ents. R eflecting principally acquisitions o f fo r e ig n gold, the cou n try 's m on etary g old stock increased by $287,000,000 du ring January and b y $1 32,000,000 in the first tw o w eeks o f Febru ary. COMMODITY PRICES Prices o f copper, lead, and silk show ed m arked declines fr o m the m iddle o f January to the middle o f F ebru ary and there w ere sm aller decreases in prices o f som e oth er basic industrial m aterials, such as steel scrap, w ool, and tex tile yarns. P rices o f foodstu ffs, on the other hand, show ed little change in this period. GOVERNMENT SECURITY MARKET P rices o f United States G overnm ent securities declined slightly during the latter h alf o f January fr o m the re co v e ry peak reached early in the m onth bu t regained part o f these losses during the first h a lf o f F ebruary. BANK CREDIT Wednesday figures, September 5, 1934, to Feb ruary 10, 1940. Commercial loans based on new classification beginning May 19, 1937. T ota l loans and investm ents at rep ortin g m em ber banks in 101 leadin g cities rose during the five weeks ending F ebru ary 7 as a result o f increases in holdings o f G overnm ent securities at N ew Y ork City banks. Loans to secu rity brokers and dealers and com m ercial loans declined. D em and deposits con tinued to increase during the period.
@FedFRASER