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MONTHLY

REVI EW

o f Financial and Business Conditions

F ifth
Federal

Federal Reserve Bank, Richmond, Va.

February 29,1944

Business in January 1944
/T 'H E level o f production in the District during January
December, and a decline o f 2 per cent in naval ship con­
struction in the same period.
A appears to have held about even with December. Coal
production and cotton consumption indexes in January
Employment in manufacturing industries o f the District
were not materially at variance with those o f December. in December 1943 was 4,300 workers smaller than in N o­
Average daily cigarette production for domestic use, how­ vember, with only Virginia showing an increase in this
ever, declined 18 per cent between December and Janu­ period. Between December 1942 and December 1943 the
ary, after adjustment for seasonal variation, and was 1 District’s employment in manufacturing industries de­
per cent lower than in January 1943. This decline was clined 9,200 workers, with Maryland and W est Virginia
showing increases o f 16,600 workers and the remaining
probably due in part to the epidemic o f influenza and to
states showing losses o f 25,800 workers. Manu­
an increased tempo in overseas shipments. Jan­
facturing employment levels since mid-summer
uary trade activity, both wholesale and retail, ■
have shown a tendency to stabilize in all states
moved strongly upward from December levels
VICTORY
after correction for seasonal variation. The
except Maryland and W est Virginia. In the
BUY
January wholesale trade level o f five lines o f
former a downward tendency is in evidence
U N IT E D
STATBS
and in the latter a rising tendency.
activity was the second best established so far
WAR
I jo n d s
Cash income from farm marketings in the
in the District, while the rise in the department
AMO
states o f this District in December rose 36 per
store sales index brought January to a level
STAMPS
cent over that month a year ago, with the
which had only been exceeded by February and
November o f 1943. The indexes o f electric
twelve months o f 1943 recording a gain o f 18
power and bank debits still give indications o f
per cent over 1942. Tobacco acreage allot­
ments were increased 20 per cent for this year, though in
flattening off.
some quarters it is doubted whether the permitted increase
Merchant shipbuilding in January declined markedly
will be planted because o f the dearth o f farm labor. Ten­
from December levels in the Fifth District, which was
dencies in farm prices are such that with a production
due in part to a conversion o f some o f the facilities o f the
level in 1944 equal to that o f 1943 there should be some
District’s largest yard from the production o f Liberty
further increase in cash farm income. The supply o f
ships to the faster V ictory ships. I f the District’s air­
farm labor this year seems likely to be about the same as
craft plants and naval shipyards operated in line with
last year, but with expanded production goals, it will
those industries in the Nation, there was an increase o f
probably be shorter in relation to demand than it was in
5 per cent in aircraft production between November and
1943.
BUSINESS IN D E X E S— FIFTH FEDERAL RESERVE DISTRICT
Average Daily 1935-39=100
Seasonally Adjusted

Bank Debits ................................
Bituminous Coal Production*..
Building Contracts Awarded....
Building Permits Issued...........
Cigarette Production ...............
Cotton Consumption* ..............
Department Store Sales............
Department Store Stocks.........
Electric Power Production.......
Life Insurance Sales..................
Wholesale Trade— Five Lines..

*Not seasonally adjusted.



Jan.
1944
197
148
150
21
158
148
208
179
204
121
183

Dec.
1943
191
147
151r
50
193
147
187
166
219
112
173

Nov.
1943
197
124
207
50
194
153
215
155
217
120
174

Jan.
1943
171
136
196
124
160
155
186
169
190
90
171

% Chg. Jan. 1944 from
Dec. ’43
Jan. ’43
+ 3
+ 15
+
1
+ 9
—
1
23
_ 83
— 58
_ 1
— 18
_ 5
+ 1
+ 12
+ 11
+ 8
+ 6
— 7
+ 7
+ 34
+ 3
+ 6
+ 7

2

MONTHLY REVIEW

War Plant Construction in the Fifth Federal Reserve District
Business activity has increased sharply in the Fifth
Federal Reserve District since the defense program got
under way in June, 1940. Although peak levels were
reached in the latter half o f 1943, a slight tapering off in
some quarters is noticeable. A t the end o f the year
marked improvement over conditions in the middle o f
1940 was still evident. The total number o f employees
in all non-agricultural industries in the District in O cto­
ber, 1943, was almost 3.5 m illion; or 35 per cent more than
the 2.6 million in June, 1940. Manufacturing employ­
ment showed an even larger relative gain o f 38 percent in
the same period. Bank debits increased 68 percent from
June, 1940 to December, 1943, while department store
sales rose 56 percent in this period.
The requirements o f war and the urgency o f materiel
found the existing plant facilities in the Fifth Reserve Dis­
trict to be inadequate. A program o f expansion o f exist­
ing facilities and construction o f new plant and equipment
was necessitated, and this was undertaken, simultaneous
with the awarding o f contracts for supplies, beginning in
June, 1940. The plant expansion program is being fi­
nanced largely by the W ar and Navy Departments, the
Maritime Commission, the Reconstruction Finance Cor­
poration, and the Defense Plant Corporation, and includes
projects authorized by Emergency Plant Facility con­
tracts. Funds o f the Rural Electrification Administra­
tion, the Federal W orks Agency and the Tennessee Valley
Authority are also financing some of these facility expan­
sions. W ith the exception o f the Emergency Plant Fa­
cility contracts and the commitments of the Reconstruction
Finance Corporation, all public contracts provide for gov­
ernment retention o f the titles to the expansions and to
the new facilities. However, much construction has also
been paid for by private funds, supplied by the corpora­
tions themselves, and by public funds o f state and local
origin.
From July 1, 1940 through April 30, 1943, war indus­
trial facility expansions authorized in the Fifth Federal
Reserve District aggregated $1.1 billion, according to data
o f the W ar Production Board. This total includes all
authorizations aggregating $25,000 or more at one loca­
tion and compares with a total for the United States of
$21.9 billion. Over eighty percent o f the Fifth District
authorizations were located in Virginia, W est Virginia
and Maryland, while thirteen percent were in North Caro­
lina. A n industrial breakdown shows that approximately
eighty percent o f the total facilities were authorized for
plants in the manufacturing industry, about one-eighth for
the expansion o f public utility facilities, and the remain­
der was distributed among transportation, mining, com­
munication and service facilities. The accompanying ta­
ble shows the detail o f these authorizations by states:
WAR INDUSTRIAL FACILITY EXPANSIONS AUTHORIZED
July 1, 1940 to April 30, 1943
FIFTH FEDERAL RESERVE DISTRICT
(Millions of dollars)
S.C. Total
Industry
D.C.
Md.
Va. W. Va.* N.C.
&
00.0
18.5
Manufacturing . . . . 20.7
267.5
240.7
285.4
67.2
140.3
11.8
Public Utilities........
4.9
13.0
26.6
7.5
76.5
64.5
1.3
Transportation . . . .
8.1
7.1
43.2
1.7
3.1
19.6
0.2
Other .......................
0.9
1.1
5.5
9.8
2.1
31.8 1124.4
Total ...................
34.6
288.7
316.0
304.4
148.9
♦Adjusted to exclude six counties belonging to the
Fourth Federal Reserve District.
Source: War Production Board.




M

a n u f a c t u r in g

E

x p a n s io n

The above table shows authorizations for the expansion
o f manufacturing facilities for war purposes in the amount
o f $900 million. According to the Census o f M anufac­
tures, expenditures for gross capital formation in the Dis­
trict o f Columbia and the five states comprising the Fifth
Federal Reserve District aggregated $123 million in 1939,
distributed among the states as fo llo w s:
Maryland ................................................................. $27.7 million
District of Columbia.......................................
3.1
Virginia ............................................................ ....... 22.3
West Virginia ....................... .................................24.4
North Carolina ..............................................
33.6
South Carolina ...............................................
12.3
Total ........................................................

$123.4 million

Thus, at first glance, it would seem that authorizations for
expansion o f war industrial facilities for manufacturing
in the 34 months from July 1, 1940 to April 30, 1943, were
equivalent to about seven and one-third times the expen­
diture for manufacturing plant and equipment in what
might be considered a normal year. However, before
drawing any conclusions, certain reservations must be
made:
(1 ) The data on war industrial facilities include au­
thorizations for war purposes only. W hile little,
if any, capital formation has been in progress for
civilian purposes in the last year or two, there was
a considerable amount taking place in 1940 and
1941.
(2 ) The six counties in W est Virginia belonging to the
Fourth Federal Reserve District have been deduct­
ed from the figures on war facility authorizations,
but no such segregation is possible on the basis o f
the information furnished by the Census o f Manu­
factures.
(3 ) The data on capital expenditures for 1939 include
only manufacturing plants in actual operation in
that year. Thus, while the expenditure for con­
struction o f a new plant or facilities might have
been made in 1939, if this plant did not actually
produce in that year, the money spent is not includ­
ed in the Census tabulation.
(4 ) In many cases, manufacturers’ accounting proced­
ures may term the replacement o f parts which wear
out or deteriorate rapidly, “ cost o f operatipns.”
The W P B contract authorizations include data for
all plant and equipment.
In addition to these considerations, the period o f time
covered by the Censuses just one year; that included in
the W P B authorizations is close to three years.
A s was to be expected, the bulk o f the contracts for the
expansion o f manufacturing facilities were located in V ir­
ginia, W est Virginia and Maryland. The importance o f
West Virginia in the total is due to the location in that
state o f several large plants. The Morgantown Ordnance
W orks, part o f E. I. DuPont de Nemours, Inc., located at
Morgantown, W . Va., a $60 million plant which began
production in December 1941, has been supplying about
half o f the A rm y’s needs for anhydrous ammonia and
is also making formaldehyde, used in munitions manufature. The synthetic rubber industry has also helped to

3

MONTHLY REVIEW
boost the total for W est Virginia, with the Carbide and
Carbon Chemical Corp. producing butadiene and the
United States Rubber Company manufacturing Buna-S
synthetic rubber. Much o f the armor plate for ships is
also produced in W est Virginia, by the Carnegie Illinois
Steel Corp.
About thirty percent o f the District’s total authoriza­
tions for the expansion o f manufacturing plant and facili­
ties are located in Maryland. Facilities for the manufac­
ture of aircraft and parts, o f iron and steel, and for ship­
building are responsible for over sixty percent o f the
manufacturing expansion in that state. Facilities for the
manufacture of chemicals and ammunition likewise con­
stitute an important part o f Maryland’s total. Glenn L.
Martin Co., the largest producer o f aircraft in the area,
has expanded its facilities to a very large extent. A t the
end of 1942, the Government paid the Martin Company
over $28 million for completed plant facilities and as­
sumed title thereto. Bendix Aviation, Radio Division,
and the Westinghouse Electric and Manufacturing Co.,
both manufacturers o f radio and communication equips
ment, state that their plants have been constructed for
permanent use. A survey recently made showed that
Baltimore plants manufactured annually more radio equip­
ment for the A rm y and the Navy than was built by all
radio manufacturers prior to 1940. Baltimore has also
been established as a leading city in the manufacture o f
precision instruments for the military forces.
Another large enterprise in the Baltimore area is the
Bethlehem Steel Co. shipyards, engaged in the construc­
tion o f merchant shipping and tank landing vessels. The
Maryland Drydock Co., engaged in ship repairs, recently
completed an expansion program which increased the
number o f berths from twelve in 1940 to thirty-two at
the present time.
The production o f aviation gasoline also contributed to
Maryland’s expansion o f facilities for war purposes. The
Standard Oil Company o f New Jersey, in Baltimore,
completed at the end o f 1943 a $14 million catalytic
cracking plant for the production o f 100 octane gasoline.
This plant will have peacetime as well as wartime employ­
ment.
The largest factor in Virginia’s expansion o f war in­
dustrial facilities is the shipbuilding program. This is
localized in the Hampton Roads area, in the vicinity of
N orfolk and Newport News, and is dominated by two
large enterprises, the N orfolk Navy Yard, located in
Portsmouth, and the Newport News Shipbuilding and
Dry Dock Company, in Newport News. The latter cor­
poration has announced an investment in capital assets
amounting to $8.5 million in the past few years, but this
excludes large sums invested by the Navy and the invest­
ment o f %4y2 million in its subsidiary at Wilmington,
North Carolina. Expansion at the N orfolk Navy Yard
has also been marked as reflected by an increase in the
number o f employees from 5,000 at the beginning o f 1939
to over 42,000 late in 1943. Operations o f the merchant
shipbuilding companies have leveled off somewhat since
the middle o f 1943, with decreased activity in submarine
warfare reflected in a lower rate o f ship repairs. Naval
construction, on the other hand, appears to be still in­
creasing with a 1944 program calling for a 30 percent
increase in tonnage delivered.
Expansion has also been considerable in the plants of
the Hercules Powrder Company, manufacturers of explo­



sives. The addition o f facilities at R adford, Pulaski and
Glen W ilton, (later abandoned) constituted over forty
percent o f the $241 million authorized for expansion o f
manufacturing establishments in Virginia.
The American Viscose Corporation at Front Royal has
reported that it intends to expand its plant at a cost o f
about $21 million. Its principal contribution to the war
effort is high tenacity rayon yarn used in meeting tire cord
requirements for the manufacture o f synthetic rubber
tires in 1944 and 1945. This expansion would make the
Front Royal plant the largest single rayon producing unit
in the world. Other war necessitated rayon plant expan­
sions in Virginia include DuPont at Richmond and Indus­
trial Rayon at Covington.
Manufacturing facility expansion in the other states is
relatively unimportant. The $67 million shown in the
above table for North Carolina is represented mainly by
the expansion o f the North Carolina Shipbuilding Com­
pany in W ilm ington; o f the United States Rubber Com­
pany, producer o f ordnance, in Charlotte; and o f the
Fairchild Engineering and Airplane Corporation in Bur­
lington.
P o s t w a r I m p l ic a t io n s

According to the data o f the W ar Production Board,
the Fifth Federal Reserve District will have gained over
one billion dollars worth o f industrial structures and
equipment when the contracts authorized through April
30,1943, have been fulfilled. This total will be augmented
to some extent by contracts awarded after that date, and
to some extent by private capital formation for non-war
purposes, although this latter factor constitutes almost a
negligible figure by comparison. By the time the war is
over, this District will have increased its pre-war facili­
ties substantially, but many o f them will have no place in
a peacetime economy.
Over two-thirds o f the necessary funds to effect these
industrial expansions were o f public origin, with the G ov­
ernment having title to the facilities. The proportion o f
private funds in the total is especially high in the plants
manufacturing iron and steel products, in the chemicals
manufacturing -plants, in the machinery and electrical
equipment and appliance field, and o f course in the public
utility corporations. The percentage o f total funds con­
tributed by private sources gives some indication o f . the
permanency o f the enterprise. I f the corporation itself
has paid for the expansion, in all likelihood it expects
either to continue to produce the item in peacetime, or to
convert its facilities to a product which will have peace­
time demand. A s has been stated, however, this is mere­
ly an indicator, for the Government has made terms
whereby the corporations operating the plants owned by
the Government (D efense Plant) will be able to acquire
ownership o f the expansions and use the equipment for
peacetime production.
In many instances, the war has been responsible for the
development o f new products which will create perma­
nent employment outlets in the area. The development
of synthetic rubber in the W est Virginia plants and the
greatly widened interest in rayon produced in plants in
almost every state o f the District, are examples o f this.
The growth in the manufacture o f radio and communica­
tion equipment in Baltimore is likely to continue there
in the future. The degree o f utilization in peacetime o f
the greatly expanded shipbuilding facilities in Hampton
Roads, Virginia, and to a lesser extent in Maryland and

4

MONTHLY REVIEW

North Carolina, will be governed largely by public policy
in the years following the war’s end, both with respect to
maritime activities and to the strength o f the Navy which
the Government wishes to maintain.
In all cases, however, it should be remembered that the
actual cost of construction o f these war facilities does not

necessarily provide a basis for the permanent creation o f
existing levels o f income in the area.

The important

question with regard to these expansions is how much
will they raise the peacetime level o f income o f the Dis­
trict.

Shipbuilding in the Fifth District
The fall o f France to the German Arm y and the near
invasion of England in the Spring o f 1940 did not find
the United States ready psychologically to prepare for
war. Shortly thereafter this nation did embark on what
then appeared to be a substantial defense program, though
war was still considered to be a thing that could be
avoided. Since our best defense in 1940 appeared to be
to hold the A xis powers on the continent o f Europe, one
o f our first major moves was to expand our shipbuilding
facilities to supplant those o f other nations, which were
being diverted from regular trade routes to war purposes,
as well as to augment the movement o f material to
England.
Early in 1941 the President directed the Maritime
Commission to inaugurate an emergency shipbuilding
program to build 200 vessels o f the Liberty ship type, in
addition to the provisions o f the Merchant Marine Act
o f 1936 which called for an annual output o f 50 fast
merchant ships. In 1936 there were only 10 shipyards
with 46 ways in this country which were capable o f pro­
ducing ocean-going vessels o f more than 400 feet. By
the time o f the President’s directive, some expansion had
been effected in some o f the yards and seven new emer­
gency yards had been built with Government funds.
On September 27, 1941, the first o f the Liberty ships
was launched at the Bethlehem Fairfield Shipyard in
Baltimore and at that time some 200,000 workers were
employed on 100 ways and in the shops o f about 21 ship­
yards. T w o years later, on September 27, 1943, almost
three-quarters o f a million workers were turning out
ships on more than 300 ways in 81 shipyards scattered
over the Nation with a productive capacity o f 20 million
deadweight tons of shipping annually. The U. S. Mari­
time fleet at the end o f 1943 was two and one-half times
larger than it was at the time Pearl Harbor was bombed.
In January, 1942, shortly after the United States had
entered the war, the President in his address to Congress
qn the “ State o f the U nion” announced a shipbuilding
program o f 18 million deadweight tons o f shipping for the
years 1942 and 1943, raising the goal from 12 million
tons which had been established a short time before. A
month later, 6 million deadweight tons were added to the
already staggering total, and a further directive given to
the Maritime Commission for 2,890,000 deadweight tons
brought the total for the two years to 26,890,000 dead­
weight tons, o f which 8,000,000 deadweight tons were to
be delivered in 1942 and 18,890,000 deadweight tons in
1943.
That American shipyards dispatched the foregoing ship­
building program is a matter o f record. In 1942. 746
ships o f 8,090,000 deadweight tons were delivered to the
Maritime Commission. In 1943 the 1,896 ships com­
pleted arid delivered exceeded those in 1942 by 154 per
cent, while the deadweight tonnage o f 19,238,626 was
greater than in 1942 by 138 per cent.



The first ship launched under the emergency program
was the Patrick Henry, which went down the ways o f the
Bethlehem Fairfield Shipyard at Baltimore on Septem­
ber 27, 1941, and during October, 1941, seven ships o f
75,714 deadweight tons were delivered to the Maritime
Commission. Progress on the completion o f a bridge o f
ships thereafter was rapid and phenomenal up to the
middle o f 1943, when all yards in full production turned
out 176 ships o f 1,782,836 deadweight tons in May, 1943.
Man-power shortages, diversion o f some yards to the
production o f military craft, and the conversion o f others
to the production o f the faster C-type ships in the six
months following the month o f May, 1943, resulted in a
leveling off in the tonnage o f ships delivered. In De­
cember, 1943, however, the Nation’s shipyards established
an all-time high record when they delivered 208 vessels o f
2,044,239 deadweight tons.
The Maritime Commission reports that United States
shipyards have productive capacity sufficient to use in
1944 the same quantity o f steel plates and shapes which
they used in 1943. The Commission says, however, that
the emphasis this year is changing to ship speed and
efficiency rather than construction speed, and adds that
tonnage delivered in 1944, will probably be less than in
1943.
F if t h

D

is t r ic t

The war economy o f the Fifth Federal Reserve Dis­
trict, exclusive o f agriculture, is in large part predicated
on the shipbuilding industry. There are five shipyards
engaged in producing merchant shipping o f one sort or
another, but the largest number o f shipyard workers in
this District are devoting their efforts toward the con­
struction o f naval craft, information on which is mostly
secret.
O f the increase o f nearly 200,000 in employment in
establishments covered by unemployment insurance in
Maryland from the fourth quarter o f 1939 to the fourth
quarter o f 1942, the shipbuilding and repair industry
accounted for about one-third; while 56 per cent o f the
total pay roll increase in Virginia from the first quarter
o f 1939 to the first quarter o f 1942 was caused by the
expansion in shipyard employment. Expansion in ship­
yard employment has accounted for well over a third o f
the total increase in North Carolina employment since
1940, and has contributed upwards o f 30,000 toward an
unknown total gain in South Carolina.
Prior to 1941, merchant shipbuilding in the Fifth Dis­
trict was done by the Newport News Shipbuilding and
Dry Dock Company at Newport News, and the Bethle­
hem Sparrows Point Shipyard in Baltimore. A t that
time the locations that are nowT the Bethlehem-Fairfield
Shipyard and the North Carolina Shipyard were still in
swamp land. Early in 1941 these two yards were put

MONTHLY REVIEW
under construction and by the Fall o f 1941 ships were
going down their ways. Thirteen shipways were orig­
inally designed at the Fairfield yard in Baltimore and
these were later increased to sixteen, most o f which were
in service at the end o f 1941. Nine shipways were built
at the North Carolina Shipbuilding Company at W ilm ing­
ton, North Carolina, during 1941; while four additional
ways at Sparrows Point brought that yard to eleven early
in 1942.
The Bethlehem-Fairfield and North Carolina Ship­
building Yards have accounted for the greater part o f
the merchant ship tonnage delivered from the Fifth Dis­
trict, with the Bethlehem-Sparrows Point Yard at Balti­
more, the W elding Shipyard at N orfolk, and the Lan­
caster Iron W orks at Perryville, Maryland, accounting
for the remainder. In 1942, the Bethlehem-Fairfield yard
delivered 77 Liberty ships o f 830,400 deadweight tons to
the Maritime Commission. M ore than 100 ships would
have been delivered from this yard except for the fact
that the greater portion o f its facilities was diverted to
a special type o f construction for the armed forces late
in the year. In 1943 this yard delivered 211 Liberties
and Landing vessels with a deadweight tonnage o f 2,120,000. These figures in 1943 were, respectively, 11 per cent
and 10 per cent o f the United States total.
The North Carolina Shipbuilding Company delivered
51 Liberty ships during 1942 and 85 ships in 1943. No
deliveries o f ships were made by this yard in the last four
months o f 1943, due to the fact that its facilities were
converted to the production o f the faster Victory type o f
ship. During December, 1943, however, the yard
launched four o f the new type craft.
The Bethlehem-Sparrows Point Shipyard, whose facili­
ties were used both in 1942 and 1943 to produce large
ocean tankers and the Maritime Commission C-type cargo
ships, delivered a total o f 13 vessels in the former_year
and 24 in the latter year. Three tankers were delivered
in 1943 by the W elding Shipyard at N orfolk and four
coastal tankers were delivered by the Lancaster Iron
W orks o f Perryville, Maryland.
The peak level o f merchant ships delivered in this Dis­
trict occurred in May 1943, when the North Carolina
Shipbuilding Company reached its highest production
point by delivering 11 Liberty ships to the Maritime
Commission. Three months later this yard had com­
pleted all o f the 126 Liberty ships under contract and
began conversion o f its facilities to Victory ship produc­
tion. Currently it holds contracts to build 87 o f these
ships. The Bethlehem Fairfield yard continued to ex­
pand its delivery o f ships through October, 1943, when
22 Liberties were turned over to the Maritime Commis­
sion ready for service. Since May, 1943, merchant ship­
building in the District has been maintained on a reason­
ably flat level o f about 26 ships a month. In January,
1944, the North Carolina Shipbuilding Company again
contributed to the District's ship deliveries, but conversion
o f facilities at the Bethlehem Fairfield Yard materially
lowered the deliveries o f that yard.
Prior to the defense program, naval craft construction
in the Fifth District was done at the N orfolk, Virginia,
and Charleston, South Carolina, Navy Yards, and at
times under contract at the Newport News Shipbuilding
and Dry Dock Company at Newport News. These three



5

yards are still doing the bulk o f the naval construction
in the District, but in addition numerous small yards,
mostly on the seacoast o f North Carolina, Virginia, and
Maryland, are turning out mine layers, mine sweepers,
wooden destroyers and other small naval craft. Yards
engaged on this work are located at Salisbury, Crisfield,
and Cambridge, Maryland; Newport News, V irginia; and
Elizabeth City, New Bern, Manteo, Morehead City, and
Washington, North Carolina; Charleston and George­
town, South Carolina; and Point Pleasant, W est V ir­
ginia.
A t the beginning o f 1939 the N orfolk Navy Yard had
5,000 employees and by November, 1943, the number
had been increased to 42,509. The Newport News Ship­
building and Dry Dock Company, whose effort has been
confined to naval craft since late in 1941, employed 7,000
in 1939; 29,408 at the end o f 1942; and 28,000 at the end
o f 1943. The peak o f this yard's employment in W orld
W ar I was 12,000. This yard launched the U SS Indiana
on November 21, 1941, and since that time the Mobile,
Essex, Biloxi, Intrepid, Birmingham, Houston, Hornet,
Franklin, Vicksburg, and Yorktown have been launched.
The Charleston, South Carolina, Navy Yard normally
employed about 1,000 prior to the defense program. By
the end o f 1941, 13,000 were employed and by September,
1943, 27,000 were employed. The Annual Report o f the
Secretary o f the Navy for 1941 revealed the information
that this yard had 14 destroyers to build; all o f these had
been launched by April 7, 1943.
Reported employment levels o f companies in the Dis­
trict engaged in manufacturing small naval craft o f/o n e
sort or another include the Barbour Boat W orks o f New
Bern, North Carolina, whose employment was given in
July, 1943, as approximately 1,000; the Elizabeth City
Shipyard at Elizabeth City, North Carolina, with 600
employed in July, 1943, compared with 200 in August
1941; the Manteo Shipbuilding Company at Manteo,
North Carolina, with 200 employed in July, 1943; the
Pamlico Shipyard at Washington, North Carolina, which
expected in July, 1943 that employment would eventually
reach 1,000; Cambridge Shipbuilders, at Cambridge,
Maryland, which expected to employ between 50 and 150
workers in November, 1941; the Marietta Manufactur­
ing Company o f Point Pleasant, W est Virginia, which
was employing 2,000 workers in June, 1942.
It is difficult to gauge the progress o f naval construc­
tion in the District, but for the Nation month-to-month
gains ranging from 3 to 7 per cent were recorded from
June through November, 1943, with December register­
ing a loss from November o f 2 per cent.
In summary, it would appear that some further prog­
ress could be expected in shipbuilding activity in the Fifth
District during 1944, with merchant shipping holding its
own and naval construction moving ahead. Somewhere
in the neighborhood o f 155,000 workers are employed in
the industry in the District, with the estimated gain in
shipyard workers since May, 1940, accounting for nearly
a fourth o f the combined employment gain in this period
in Maryland, Virginia, North Carolina and South Caro­
lina. W ith the United States merchant fleet two and onehalf times larger than on December 7, 1941, the future
outlets for merchant shipbuilding would appear to be
limited to the task o f replacement to meet whatever need
that develops.

MONTHLY REVIEW

6

DEBITS TO INDIVIDUAL ACCOUNTS

FEDERAL RESERVE BANK OF RICHMOND
(All Figures in Thousands)
ITEMS
Total Gold Reserves................... ..
Other Reserves .............................
Total Reserves .........................
Bills Discounted ....................... .
Industrial Advances ..................*
Gov’t Securities, Total................
Bonds .........................................
Notes ...........................................
Certificates .................................
Bills ............................... .
Total Bills & Securities.............
Uncollected Items ..................... ..
Other Assets ............................... .
Total Assets ......................... .
Fed. Res. Notes in Cir.............
Deposits, Total .............................
Members’ Reserves ...................
U. S. Treas. Gen. Acc...............
Foreign .......................................
Other Deposits .........................
Deferred Availability Items........
Other Liabilities ..........................
Capital Accounts .........................
Total Liabilities .......................

February 16
1944
$1,088,199
20,172
$1,108,371
$
2,130
$
227
$ 622,306
112,139
62,218
177,844
270,105
$ 624,663
$ 137,261
$ 20,510
$1,890,805
$1,141,180
$ 620,235
529,249
26,633
58,320
6,033
$ 109,714
$
201
$ 19,475
$1,890,805

000 omitted

Chg. in Amt. from
1-12-44
2-17-43
+ 65,419
— 54,981
— 1,133
— 3,370
+ 64,286
— 58,351
+
1,933
—
80
—
358
—
6
+ 307,797
+ 37,397
— 39,384
+ 1,237
— 13,330
+ i6,218
+ 129,125
+ 7,197
+ 231,386
+ 12,745
+ 309,372
+ 37,311
+ 19,700
+ 19,717
+
973
— 1,139
+ 394,331
— 2,462
+ 345,343
+ 3,243
+ 32,787
— 16,677
— 4,541
— 1,736
+ 12,337
— 21,730
+ 28,275
+ 4,219
— 3,284
+ 2,570
+ 14,155
+ 10,781
—
248
—
16
+
207
+
2,294
+ 394,331
— 2,462

41 REPORTING MEMBER BANKS—5TH DISTRICT
(All Figures in Thousands)
ITEMS
Total Loans .................................
Bus. & Agric. Loans..............
Real Estate Loans..................
All Other Loans......................
Total Security Holdings..............
U. S. Treas. Bills ...................
U. S. Treas. Certificates ........
U. S. Treas. Notes ..................
U. S. Gov. Bonds ....................
Obligations Gov. Guaranteed
Other Bonds, Stocks & Sec.
Cash Items in Process of Col...
Due From Banks.........................
Currency & Coin.........................
Reserve with F. R. Bank..........
Other Assets ...............................
Total Assets .................................
Total Demand Deposits..............
Deposits of Individuals ..........
Deposits of U. S. Gov.............
Deposits of State & Loc. Gov..
Deposits of Banks ...................
Certified & Officers’ Checks..
Total Time Deposits...................
Deposits of Individuals..........
Other Time Deposits..............
Liabilities for Borrowed Money
All Other Liabilities...................
Capital Account .........................
Total Liabilities .........................

February 16
Chg. in Amt. from
1944
1-12-44
2-17-43
+ 29,100
+ 15,566
291,737
+
5,297
+
2,078
133,410
—
983
49,184
—
2,111
+ 25,914
109,143
+ 14,471
+ 358,368
+ 100,079
$1 ,391,446
132,304
+ 31,644
+ 10,928
12,533
+ 114,147
242,362
198,024
29,444
+
+ 66,975
+ 188,117
718,773
+ 44,420
— 11,146
5,196
43,615
+
— 10,653
1,908
56,368
+
7,740
94,131
+
+ 15,168
$
1,613
23,034
$ 150,378*
— 3,147
1,766
33,860
+
$
— 9,199
— 34,818
$ 277,955
— 3,036
2,700
$ 61,740
+
-f-106,390
+ 349,250
$2,301,247
+ 321,579
+ 109,869
$1 ,879,221
1,014,624 : — 60,763
+ 66,125
+ 207,489
+
413,761
—333,847
— 2,037
76,983
14,868
— 63,363
— 34,848
358,043
15,810
28
—
162
+
2,427
+
+ 29,224
$ 250,603
2,954
234,503
+
+ 26,755
16,100
527
2,469
+
0
0
0
$
— 6,627
— 6,914
$ 59,646
5,361
721
$ 111,777
+
+
+ 106,390
+ 349,250
$2,,301,247

♦Net figures, reciprocal balances being eliminated.

MUTUAL SAVINGS BANK DEPOSITS
9 Baltimore Banks
Total deposits ..................

Jan. 31, 1944
$261,919,096

Dec. 31, 1943
$258,926,658

Jan.
1944
$ 481,719

$ 5,544,927

[-29
-18
-34
+ 30

8,566,669
141,878
128,935
188,716

+ 17
+ 14

24,369
115,405
59,102
38,716
7,449
57,403
35,285
8,267
64,257

Raleigh .......................
Wilmington ...............

+ 15

770,783
11,783
11,079
17,451

Dist. of Columbia
Washington ..............
Maryland
Baltimore ...................
Cumberland ................
Frederick ...................
Hagerstown ...............
North Carolina
Asheville ....................
Charlotte ......................
Durham .......................
Greensboro .................

% Change
from
Jan.1943

+ 18
0
+ 20
+ 39
+ 14
+ 6
+ 8
+ 14
+ 7

253,824
1,368,417
796,630
386,620
114,000
625,915
443,752
155,474
828,645

+
—
+
+

12 Mos.
1943*

% Change
from
12 Mos. *42
+

9

+ ’?
10
8
13
15

— ’4
+ 26

Winston-Salem ..........
South Carolina
Charleston .........
40,272
+ 4
471,540
Columbia ....................
48,999
-10
604,225
38,181
Greenville ...................
451,284
+ 3
Spartanburg ................
21,722
247,896
+ 9
Virginia
13,672
Charlottesville ..........
+25
147,287
14,058
211,305
Danville .....................
+ 5
21,570
Lynchburg ...... ..........
+ 18
241,056
25,545
+ 16
Newport News ..........
307,333
116,429
Norfolk .......................
1,450,001
+ 5
15,712
Portsmouth ..................
+ 9
196,226
+ 14
309,895
3,658,141
Richmond ...................
37,800
Roanoke .................
447,668
+ 4
West Virginia
23,798
+ 30
249,943
Bluefield .....................
82,511
Charleston ..................
919,026
+ 21
15,735
+ 23
Clarksburg ..................
162,607
30,561
+ 14
Huntington ..................
324,252
15,128
Parkersburg ...............
172,820
+ 16
$2,574,656
+ 17
District Totals ..............
$29,807,012
Cumulative figures for 12 cities not comparable with 1942 data.
♦Last month 1942 figures were printed in error in this column.

+ 15
+ 8
+ 11
+ 9
+ ’3
+ 6

+ ii
+ ’8
+ 12

COMMERCIAL FAILURES
Number of Failures
District
U. S.

PERIODS
January 1944.
December 1943. .................
January 1943.

3
2

120
145

Total Liabilities
District
U. S.
$102,000
5,000
98,000

$1,708,000
2,055,000
5,515,000

Source: Dun & Bradstreet.

COTTON CONSUMPTION AND ON HAND— BALES
Jan.
Jan.
1944
1943
Fifth District States:
413,354
Cotton consumed................
436,050
Cotton Growing1States:
Cotton consumed ................
729,237
796,973
Cotton on hand Jan. 31 in
Consuming establishments 2,050,481 2,091,862
Storage & compresses. . . . 11,894,050 12,787,994
United States:
819,489
Cotton consumed ................
916,785
Cotton on hand Jan. 31 in
Consuming establishments 2,377,580 2,495,764
Storage & compresses. . . 12,120,142 13,069,529
Spindles active ....................... 22,217,994 22,935,012

Aug. 1 to Jan. 31
1944
1943
2,516,109

2,666,486

4,470,287

4,870.181

5,090,£96

5.623.308

Jan. 31,1943
$233,596,216
RAYON YARN DATA
Jan.1944

MONTHS
January 1944.................
December 1943...............
January 1943.................




In Bales
No. Carolina So. Carolina
224,369
169,763
227,009
179,361
233,201
182,007

Virginia
19,222
19,714
20,842

District
413,354
426,084
436,050

Dec. 1943

Jan.1943

Rayon Yarn Shipments, L b s .....
Staple Fiber Shipments, Lbs........

COTTON CONSUMPTION—FIFTH DISTRICT

41.500.000
13.900.000

43.200.000
14.500.000

37.900.000
12.700.000

Rayon Yarn Stocks, Lbs.............
Staple Fiber Stocks, L b s..........

7.(300,000
2,100.000

6,100,000
1,800,000

8,900,000
3,000,000

Source : Rayon Organon.

MONTHLY REVIEW

7

RETAIL FURNITURE SALES

BUILDING PERMIT FIGURES
Fifth Federal Reserve District
Total Valuation
January 1944
January 1943
Maryland
Baltimore ..............................................
Cumberland ...........................................
Frederick ..............................................
Hagerstown ..........................................
Salisbury ...............................................
Virginia
Danville ................................................
Lynchburg .............................................
Norfolk ..................................................
Petersburg ............................................
Portsmouth ...........................................
Richmond ...............................................
Roanoke ................................................
West Virginia
Charleston ............................................
Clarksburg ............................................
Huntington ..........................................
North Carolina
Asheville ..............................................
Charlotte ..............................................
Durham ..................................................
Greensboro ...........................................
High Point ...........................................
Raleigh ..................................................
Rocky Mount .......................................
Salisbury ..............................................
Winston-Salem .....................................
South Carolina
Charleston .............................................
Columbia ..............................................
Greenville ..............................................
Spartanburg .........................................
Dist. of Columbia
Washington ...........................................
District Totals .....................................

$ 225,670
390
200
4,135
8,267

$2,714,706
3,300
1,600
14,925
1,904

$

8,067
3,680
91,360
400
15,575
67,500
25,221

$

4,453
4,418
541,481
0
450,215
113,189
2,727

$

23,021
1,275
2,140

$

8,103
340
1,850

$

5,875
9,172
5,711
15,955
23,729
12,700
850
18,100
18,893

$

7,710
17,360
113,575
12,497
13,225
1,495
3,700
1,325
27,057

91,619
12,495
85,623
7,690

$

$

$ 359,770

18,933
13,769
5,170
2,605

$2,728,718

$1,145,083

$6,830,350

CONSTRUCTION CONTRACTS AWARDED
STATES
Maryland ..........
Dist. of Col........
Virginia ............
West Virginia ..
North Carolina..
South Carolina..
Fifth District:

Dec. 1943

% Change
from Dec. *42

$ 9,207,000
2,753,000
10,759,000
4,159,000
5,300,000
2,958,000
$35,136,000

January 1944
compared with
January 1943

STATES

January 1944

Year
1943

Maryland (6)* ........................................................
Dist. of Columbia (3)*...........................................
Virginia ( 2 6 ) * ..........................................................
West Virginia (11)*..............................................
North Carolina (23)*.............................................
South Carolina (15)*..............................................
Fifth Disrict (84)*.............................................

+ 2
— 13
— 1
+20
+ 6
— 6
+ 1

INDIVIDUAL CITIES
Baltimore, Md. (6)*................................................
Washington, D. C. (3)*.........................................
Lynchburg, Va. (3)*..............................................
Richmond, Va. (7)*................................................
Charleston, W . Va. (3)*.......................................
Charlotte, N. C. (4)*............................................
Winston-Salem, N. C. (3 )*...................................
Columbia, S. C. (4)*..............................................

+ 2
— 13
+18
+ 8
+20
— 11
+11
+ 1

♦Number of reporting stores.

DEPARTMENT STORE TRADE
Richmond
Baltimore
Washington Other Cities District
Percentage change in Jan. 1944 sales, compared with sales in Jan. 1943:
+ 15
+10
0
+16
+ 7
Percentage change in stocks on Jan. 31, *44, from stocks on Jan. 31, *43:
+ 3
+10
+ 3
+14
+ 6
Change in outstanding orders Jan. 31, 1944, from orders on Jan. 31, '43:
+ 48
+72
+52
+26
+ 57
Change in total rec’v’bles, Jan. 1, 1944, compared with Jan. 1, 1943:
— 6
— 2
— 13
+ 1
— 7
Percentage of current receivables as of Jan. 1, 1944, collected in Jan.:
51(48)
55(54)
51(53)
55(57)
53(53)
Percentage of instalment receivables as of Jan. 1, 1944, collected in Jan.:
35(28)
30(28)
21(21)
30(26)
25(23)
Note: 1943 collection percentages in parentheses.

% Change
from Year '42

— 34
$106,942,000
+696
33,682,000
— 74
173,242,000
+378
20,833,000
— 70
91,438,000
— 73________ 52,160,000
— 59
$478,297,000

— 53
— 67
— 58
— 68
— 46
— 53
— 56

Maryland Dist. of Col. Virginia West. Va. N. Carolina S. Carolina
Percentage change in Jan. 1944 sales from Jan. 1943 sales, by States:
+ 9
0
+13
+ 7
+11
+17

Source: F. W . Dodge Corporation.
WHOLESALE TRADE, 213 FIRMS
TOBACCO MANUFACTURING
Jan. 1944
Jan. 1943
Smoking & chewing to­
20,158
21,711
bacco (Thousands of lbs.)
20,370,214
20,115,138
Cigaretes (Thousands) ..
436,744
366,919
Cigars (Thousands) . . . .
3,782
3,586
Snuff (Thousands of lbs.)

% Change
— 7
— 1
— 16
+ 5

SOFT COAL PRODUCTION IN THOUSANDS OF TONS
REGIONS
West Virginia........ ............
Virginia .................. ............
Maryland ................ ............
5th District.......... ............
United States . . . ............
% in District.... ............




January 1944
13,764
1,781
157
15,702
53,800
29%

January 1943
12,307
1,602
125
14,034
47,810
29%

% Change
+ 12
+ 11
+ 26
+ 12
+ 13

LINES
Auto supplies (10)*..............
Drugs & sundries (9)*........
Dry goods (5)* ...................
Electrical goods (8)*............
Groceries (69)* ...................
Hardware ( 1 1 ) * ....................
Industrial supplies (9)*........
Paper & products ( 1 1 )* ....
Tobacco & products ( 5 ) * ....
Miscellaneous ( 7 6 ) * ..............
District Average (213)*..

Net Sales
Stocks
Jan. 1944
Jan. 31, 1944
compared with compared with
Jan.
Dec. Jan. 31 Dec. 31
1943
1943
1943
1943
+20
+ 13
+ 23
— 26
+ 18
+ 15
— 12
+ 2
0
+ 17
+ 11

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

— 22
+ 5
+ 54
— 17
0
+ 6
+ 1
+ 9
— 9
0
4- 2

Ratio Jan.
collections
to acc’ts
outstand’g
January 1

— 7

— 1

— 7
+ 10
+ 6
— 7
— 12

+
+
+
+
—

ii
4.
14
7
6

100
123
91
36
151
10
9
7

— ii
— 4

— *4
+ 2

*7
105

MONTHLY REVIEW

8

BUSINESS IN D E X E S— FIFTH FEDERAL RESERVE DISTRICT
Average Daily 1935-39n:l00—Seasonally Adjusted
Dec.!
1943
Bank D ebits....................................
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...........
Life Insurance Sales.....................
Wholesale Trade— Five Lines ..
Wholesale Trade— Drugs ...........
Wholesale Trade— Dry Goods ..
Wholesale Trade— Groceries ....
Wholesale Trade—Hardware ..
Wholesale Trade— Shoes ...........
*Not seasonally adjusted._______

191 ■
147:
151r
50;
193 1
147
187
166
219
150
217
200
499
112
173
196
109
185
113
239

Nov.
1943

Oct.
1943

Dec.
1942

197
124
207
50
194
153
215
155
217
150
184
142
452
120
174
193
110
187
113
239

197
140
163
64
182
146
191
165
212
150
117
112
381
120
176
213
136
186
115
191

183
132
369
49
166
154
173
164
199
151
252
208
634
81
157
162
116
160
114
440

% Chg. Dec. 1943 from
Nov.*43
Dec. ’42

_

3
+ 19
27
0
_ 1
_ 4
— 13
+ 7
1
+
0
+ 18
+ 41
+ 10
7
— 1
+ 2
1
— 1
0
0

+ 4
+ 11
59
+ 2
+ 16
5
+ 8
4- 1
+ 10
1
_ 14
_ 4
_ 21
+ 38
+ 10
+ 21
6
+ 16
1
— 46

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

Industrial Production
In January the Board’s seasonally adjusted index o f
industrial production stood at 242 per cent o f the 1935-39
average as compared with the peak level o f 247 in O cto­
ber and November 1943.
Steel production increased 4 per cent in January and
continued to rise in the first three weeks o f February,
reflecting large military requirements for landing craft
and other invasion equipment as well as increasing use o f
steel for farm machinery and railroad equipment. Alum­
inum production was curtailed in January from the peak
rate in the last quarter o f 1943.
Activity in the transportation equipment group was 5
per cent lower in January than at the peak in November.
The largest decline occurred in commercial shipyards,
many o f which were changing from the production o f
Liberty ships to V ictory and other types o f ships. In
the automobile industry production o f 3,000 trucks was
reported during the month under the greatly enlarged
civilian truck program for 1944 which calls fo r the pro­
duction o f 92,000 mediumweight and 31,500 heavy trucks
during the year.
Output o f textiles, shoes, and manufactured foods rose
slightly in January, following small declines in December.
Chemicals production continued to decline, reflecting a
further curtailment o f small arms ammunition output.
Output o f petroleum and rubber products showed little
change.
Production o f coal increased and crude petroleum out­
put continued at a high level in January and the early
part o f February. Sunday work was instituted in anthra­
cite mines during February as a measure to increase pro­
duction, and output for the week ending February 12
was 13 per cent higher than the preceding week.
The value o f construction contracts awarded in Janu­
ary, according to reports o f the F. W . Dodge Corpora­
tion, declined to the lowest level for the month since
1935.

Distribution
Value o f department store sales in January and the
first three weeks o f February was maintained at a high
level for this season o f the year. Sales in January ex­
ceeded the large volume o f a year ago by about 6 per cent




but in February sales were somewhat smaller than last
year when a buying wave developed following the an­
nouncement o f shoe rationing.
Freight carloadings declined less than usual in January
and the first half o f February, owing chiefly to the heavy
volume o f coal shipments. Movement o f grain continued
at the high level o f last fall and livestock and lumber ship­
ments were in large volume.

Commodity Prices
Wholesale prices o f most commodities continued to
show little change in January and the early part o f Feb­
ruary. Maximum prices for coke, wood pulp, furniture,
and certain other products were increased moderately.
The cost o f living index o f the Bureau o f Labor Sta­
tistics declined from 124.4 per cent o f the 1935-39 aver­
age in December to 124.1 in January.

Bank Credit
Purchases o f securities in the Fourth W ar Loan Drive
by corporations and individuals resulted in a release o f
required reserves o f member banks because funds were
drawn from private deposit accounts, which require re­
serves, to the Government war loan accounts, which are
exempt from reserve requirements. A s a consequence,
member banks repurchased bills from the Reserve Banks,
and the latter's holdings o f Government securities de­
clined by 520 million dollars.
A t reporting member banks in 101 leading cities, ad­
justed demand deposits decreased by 3.4 billion dollars
in the four weeks ending February 16, while U. S. G ov­
ernment deposits increased by 6.9 billion, reflecting pur­
chases o f Government securities by bank customers dur­
ing the war loan drive. Government security holdings at
reporting member banks increased 2.8 billion dollars over
the four weeks.
Loans to brokers and dealers increased by 320 million
during the drive which was substantially less than in either
o f the two previous campaigns. Loans to others for pur­
chasing or carrying Government securitoes rose by about
610 million, two-thirds o f wdiich was at New Y ork City
banks. Commercial loans, which had increased substan­
tially during the Third W ar Loan Drive, showed little
increase during the current period.