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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT RICHMOND, VIRGINIA JANUARY 31, 1927 S T A T IS T IC A L R EC O R D Debits to Individual Accounts (23 C ities)__________________ Number of Commercial Failures, 5th District--------------------Liabilities Involved in Failures---------------------------------------Cotton Consumption, Fifth District Mills, B ales___________ Cotton Grown in Fifth District, B ales______________________ Tobacco Grown in Fifth District, Pounds___________________ Building Perm its for New W ork, 28 Cities__________________ Value of Perm its for New W ork, 28 Cities_________________ Contracts Actually Awarded, Fifth D istrict____ ______ _____ Costs of Contracts Awarded, Fifth D istrict__________________ Total Sales, 31 Department Stores_________________________ Total Sales, 84 Jobbers and W holesalers---------------------------Business in December in the Fifth Federal re serve district was good. Retail trade, as re flected by sales of thirty-one large department and general stores, was approximately 2 per cent above the volume of trade in December 1925, and total debits to individual accounts figures for the five weeks ended Jan u ary 12, 1927, exceeded by 6.3 per cent those for the preceding five weeks, ended December 8, 1926. Business failures in the Fifth district in December were slightly more numerous than in December of the preceding year, but the liabilities involved in last month’s insolvencies w£re smaller. Labor is seasonally employed at the wage levels of the past several years, and increased bank deposits testify to the continued large purchasing power of the bank ing public. Low er outstanding loans to custom ers of member banks and reduced rediscounts at the Reserve bank show that sufficient credit is available for legitimate needs of the district. Building permits were fewer in number and less in estimated valuation in December than for any other recent December, but there is still a very large volume of construction work under way. Textile mills appear to be in a stronger position at present than they were two or three months ago, since the steady decline in cotton prices appears to have been checked. Tobacco prices continue high for Bright grades, which make up the larger part of the district’s crop. An examination of the statistical record of the year 1926 shown at the top of this section indi cates that on the whole the year was a good one in the Fifth reserve district. Debits to individual accounts totals, a good indicator of the volume of business done in the twrenty-three reporting cities, exceeded the totals of 1925 by more than half a billion dollars and were over two billion dollars above the figures for 1924. Commercial 1926 $16,429,388,000 I4 4 1 $ 28,741,221 2,768,596 2,335,000 620,352,000 20,984 $ 168,521,274 11,649 $ 416,801,400 $ 108,802,790 $ 83,597,079 1925 $15,819,533,000 i j493 $ 35,245,288 2>537>393 2,044,000 612,270,000 22,924 $ 175,616,198 I 3 >45 6 $ 411,046,400 $ 105,674,102 $ 83,744,992 failures-in the district were fewer in number and lower in liabilities in 1926 than in 1925, although bank failures increased considerably last year, due in part to accumulated trouble dating back to the years immediately following the World War. Cotton consumption by Fifth district mills increased nearly 15 per cent last year, and the mills did a sufficiently large volume of hand to mouth business to prevent the piling up of much surplus stock. Building operations in the dis trict continued in very large volume during the year, although both the number of permits issued for new work and the estimated valuation fig ures were lower than in 1925. Retail sales in 1926 exceeded sales in 1925, and wholesale trade was in fair volume. Agricultural yields were excellent in the district as a whole, except in certain sections that were disastrously effected by extreme dry weather last summer. The to bacco crop of the district exceeded that of 1925, and the 1926 prices for Bright tobacco averaged much above those of the previous year. Cotton production in the three cotton growing states of the Fifth district was above that of 1925, but the price was very low, and the cotton grow ers and the sections chiefly dependent upon their trade came to the end of 1926 in worse condition than a year earlier. The coal mining industry in W est Virginia enjoyed an exceptionally large volume of business in 1926, due to the anthracite strike during the opening months and to the British coal strike the balance of the year. E x cept for the unfavorable position of cotton grow ers, conditions in the district were generally satisfactory at the beginning of 1927. Inven tories are comparatively low and credit is avail able to meet any legitimate demands, and the at titude of the public toward the near future is favorable. CONDITION OF SIXTY-SEVEN REPORTING MEMBER BANKS IN SELECTED CITIES ITEM S 1. Total Loans and Discounts (including all rediscounts) .................................... 2. Total Investments in Bonds and Securi ties ............................................................. 1 3. Reserve Balance with Federal Reserve Bank ......................................................... 4. Cash in V a u lts.............................................. 5. Demand Deposits ........................................ 6. Time Deposits .............................................. 7 Borrowed from Federal Reserve Bank..... Jan. 12, 1927 Dec. 8, 1926 Jan. 13, 1926 $519,291,000 $516,252,000 $527,812,000 132.834.000 ---»----->---- 131.624.000 ---j”— ?---- 131.447.000 41.373.000 14.844.000 392.966.000 211.895.000 6^310,000 40,573,000 16,284,000 385,158,000 206,244,000 8,116,000 40.014.000 14.941.000 387.163.000 201.710.000 18.064.000 i i The accompanying table shows totals for the principal items of condition reported by sixtyseven member banks of the Fifth Federal reserve district on three dates, Jan u ary 12, 1927, Decem ber 8, 1926, and Jan u ary 13, 1926. These data, which ordinarily afford an opportunity for m aking a close comparison of the latest available figures with those of a month and a year earlier, are not quite so comparable this month, due to a combination of two reporting banks in one of the reporting cities with a third bank not hitherto included in the list of banks submitting their weekly figures to the reserve bank. Between December 8, 1926, and Jan u ary 12, 1927, total loans and discounts for customers at the sixty-seven reporting banks increased $3,039,000 and investments in bonds and securities rose $1,210 ,000. Deposits also increased during the month, demand deposits rising $7,808,000 and time deposits $5,651,000. The increases in loans and investments, and to a considerable extent in deposits, were due to the m erger previously referred to. Increased deposits at the middle of Jan u ary necessitated higher reserve deposits, and these rose $800,000 during the month. The passing of the holiday shopping sea son lessened the demand for currency, and the reporting banks lowered their cash in vaults by $ 1,440.000, A further liquidation of indebtedness to the reserve bank occurred during the period under review, rediscounts for the sixty-seven reporting banks declining $1,806,000. A comparison of the Jan u ary 12, 1927, figures with those of Jan u ary 13, 1926, shows a smaller use of bank credit this year. Total loans and discounts for customers were $8,521,000 lower on the later date, and the sixty-seven banks were themselves borrowing $11,754,000 less from the reserve bank. Cash in vaults was practically the same on both the 1927 and 1926 dates. On the other hand, investments in bonds and securities rose $1,387,000 during the year, demand deposits gained $5,803.000, and time deposits increased $10,185,000. RESERVE BANK OPERATIONS—Member banks in the Fifth District continued to reduce their indebtedness at the reserve bank during the month between December 15, 1926, and Jan u ary 15, 1927^ The volume of rediscounts held by the Federal Reserve Bank of Richmond declined during the period under review from $27,643,000 to $21,860,000, and total bill holdings dropped from $39,895,000 to $35,607.000, the smaller decline in bill holdings on Jan u ary 15th being due to an increase of about $1,500,000 in bills purchased in the open market. Member bank reserve deposits at the reserve bank rose from $69,940,000 on December 15th to $70,278,000 on Ja n u a ry 15th, the rise being only a daily fluctuation. With the passing of the holiday shopping season, there began the usual return flow of Federal re serve notes to the reserve bank for retirement, and the volume of notes in actual circulation de clined from $85,704,000 to $78,689,000 between the middle of December and the middle of Janu ary. Two or three days before Christmas the notes in circulation totaled approxim ately $91,000,000. The changes in the several items mentioned herein lowered the cash reserves of the Richmond bank from $120,879,000 on December 15th to $110,956,000 on Jan u ary 15th, and reduced the ratio of re serves to note and deposit liabilities combined from 76.78 per cent to 72.81 per cent. In spite of unfavorable conditions in the cotton section of the Fifth District, a comparison of the Jan u ary 15th figures this year with those of a year ago shows that reserve bank credit is being used by the member banks of the district less this year. Rediscounts for member banks held by the Richmond reserve bank declined during the year from $39,983,000 to $21,860,000, a decrease of $18,123.000, or 45.3 per cent. B y an increase in open m arket purchases of bankers acceptances the reserve bank counterbalanced to some extent the decline in rediscounts, and total bill holdings of the reserve bank dropped from $44,855,000 to $35,607,000 between the two dates, a decrease of only $9,248,000, or 20.6 per cent. Member bank reserve deposits rose from $66,711,000 on Jan u ary 15th last year to $70,278,000 on Jan u ary 15th this year, partly as a result of increased deposits which raised the reserve requirements. Federal reserve notes in actual circulation were considerably lower on Jan u ary 15, 1927, than a year earlier, $78,689,000 outstanding this year comparing with $84,835,000 in circulation at the middle of Jan u ary last year. The cash reserves of the Federal R eserve Bank of Richmond rose from $104,545,000 last year to $110,956,000 this year, and the ratio of cash reserves to note and deposit liabilities combined increased during the same period from 67.51 per cent to 72.81 per cent. 2 DEBITS TO INDIVIDUAL ACCOUNTS CITIES Asheville, N. C........... Baltimore, Md............. Charleston, S. C......... Charleston, W. V a..... Charlotte, N. C............ Columbia, S. C............ Cumberland, Md......... Danville, V a.................. Durham, N. C............. Greensboro, N. C......... Greenville, S. C............ Hagerstown, Md.......... Huntington, W. Va.... Lynchburg, V a............ Newport News, V a..... Norfolk, V a.................. Raleigh, N. C............... Richmond, V a.............. Roanoke, V a................. Spartanburg, S. C....... Washington, D. C....... Wilmington, N. C....... Winston-Salem, N. C.. Totals.. TOTAL DEBITS DURING THE FIVE WEEKS ENDED Jan. 12, 1927 Dec. 8, 1926 Jan. 13, 1926 A N N U A L TOTALS 1926 1925 43.074.000 545.471.000 28.634.000 53.361.000 60.282.000 23^080,000 10.525.000 16.966.000 37.069.000 31.699.000 25.221.000 12.981.000 33.348.000 28.251.000 17.738.000 100.566.000 33.364.000 179.001.000 37.121.000 18.285.000 293.619.000 23.902.000 47.172.000 36.632.000 474.332.000 32.060.000 46.032.000 59.226.000 22.748.000 10.588.000 20.624.000 44.124.000 30.754.000 27.351.000 13.146.000 32.713.000 24.051.000 13.520.000 102.750.000 26.970.000 165.779.000 36.433.000 16.774.000 291.772.000 24.229.000 47.289.000 35.406.000 519.545.000 31.480.000 50.212.000 63.157.000 21.329.000 10.364.000 13.234.000 33.423.000 34.856.000 33.876.000 13.105.000 31.803.000 28.989.000 11.176.000 93.984.000 33.965.000 184.091.000 34.908.000 20.281.000 284.690.000 28.273.000 46.744.000 437.969.000 5.204.952.000 336.190.000 452.414.000 611.726.000 229.122.000 108.973.000 129.414.000 357.096.000 316.179.000 271.799.000 129.678.000 314.473.000 251.451.000 141.915.000 950.512.000 312.931.000 1.690.293.000 353.449.000 173.046.000 2.929.590.000 254.931.000 471.285.000 5 326,853,000 5.072.348.000 313.821.000 439.110.000 590.421.000 236.744.000 109.680.000 122.351.000 306.722.000 269.475.000 284.914.000 128.018.000 324.770.000 244.347.000 105.948.000 864.612.000 405.905.000 1.709.420.000 317.402.000 191.792.000 2.781.220.000 251.833.000 421,827^000 $ 1,700,730,000 $ 1,599,897,000 $ 1,658,891,000 $16,429,388,000 $15,819,533,000 The accompanying table shows debits to individual, firm and corporation accounts in the clearing house banks of twenty-three trade centers in the Fifth Reserve District, three equal periods of five weeks being given to allow for comparison of the latest available figures with those of the preceding like period and the corresponding period last year. In addition, total debits are shown by cities and the district for the calendar years 1926 and 1925. During the five weeks ended Jan u ary 12, 1927, the twenty-three cities reported debits aggregating $1,700,730,000, an increase of $100,833,000, or 6.3 per cent over the total of $1,599,897,000 reported for the preceding five weeks, ended December 8, 1926. This increase was unusual, the period containing the dull days between Christmas and New Y e a r’s generally showing lower figures than the preceding period, but very large annual payments around Jan u ary 1st more than balanced the smaller pay ments of the last week in December. Fourteen of the twenty-three cities reported higher figures for the period ended Jan u ary 12th. In comparison with debits aggregating $1,658,891,000 during the five weeks ended Jan u ary 13, 1926, the total of $1,700,730,000 reported during the corresponding period this year shows an increase of $41,839,000, or 2.5 per cent, a very satisfactory comparison in view of a generally lower price level at present than a year ago, especially for cotton and dark tobacco, and for textile mill products. Thirteen of the twenty-three cities show higher figures for the period ended Jan u ary 12th this year than for the one ended Jan u ary 13, 1925. In spite of the large debits figures of 1925, those for 1926 exceeded them by more than half a billion dollars. A ggregate debits in the twenty-three cities in 1926 amounted to $16,429,388,000, compared with a total of $15,819,533,000 reached in 1925. The past year thus shows an increase of $609,855,000, or 3.9 per cent, over the debits reported for 1925. Sixteen of the reporting cities at tained higher figures in 1926 than in 1925, Asheville making the best showing with an increase of 36.1 per cent. Newport News gained 33.9 per cent, ranking second in improvement for the year, and four other cities gained more than 10 per cent, these being Greensboro with an increase of 17.3 per cent, Durham with 16.4 per cent, W inston-Salem with 11.7 per cent, and Roanoke with 11.4 per cent. SAVINGS DEPOSITS— Mutual savings bank deposits in Baltimore, continuing their monthly habit of reaching new high levels, totaled $159,964,776 at the end of December 1926, in comparison with $158,178,254 reported by the same banks at the end of November 1926 and $152,148,807 reported on December 31, 1925. Fourteen institutions reported, of which twelve showed higher figures at the end of 1926 than at the end of 1925. Of the two that failed to show deposit gains during the year, one is in process of liquidation and the decrease in the other one was very small. Time de posits in sixty-seven regularly reporting member banks, located in thirteen of the Fifth District cities, totaled $211,895,000 on Jan u ary 12, 1927, in comparison with $201,710,000 on Jan u ary 13th a year ago. BUSINESS FAILURES—Dun's Review of Jan u ary 8, 1927, in reviewing business m ortality sta tistics for 1926, says that the distinguishing feature of the insolvency record for the year is the con siderable reduction in the liabilities of commercial failure in the United States. With 21,773 defaults, 3 or an increase of about 2 ^ per cent over the number for 1925, the indebtedness for last year de creased nearly 8 per cent, to $409,232,278. These compare with 2 1,2 14 failures and liabilities totaling $443,744,272 in 1925, the liabilities being the smallest since 1920, but the number of insolvencies in 1926 exceeding all other years since 1922. The South Atlantic States, in which insolvencies de creased approxim ately 4 per cent and liabilities 8 per cent in 1926 in comparison with 1925, was the only geographical division of the country in which failures declined in number. Few er insolvencies occurred in Maryland, Virginia, North Carolina and South Carolina, and liabilities were lower in W est Virginia, Virginia and the two Carolinas. Failures in the Fifth district in 1926 numbered 1,441, with aggregate liabilities of $28,741,221, compared with 1,493 failures and $35,245,288 in liabilities in 1925. L ast yea r’s liabilities were the lowest since 1920, but the number of insolvencies exceeded those of 1924 by one failure and were considerably above the 1,206 failures reported in 1923. In December 1926, bankruptcies in the United States totaled 2,069, with liabilities amounting to $45,619,578, compared with 1,878 bankruptcies and $36,528,160 in December 1925. In the Fifth reserve district, December 1926 insolvencies numbered 125, with liabilities of $3,179,434, compared with 106 insolvencies and liabilities of $3,596,748 in December 1925. LABOR—Labor is seasonally employed. There is some unemployment among both skilled and unskilled workers, but idleness does not appear to be more extensive than is normal at this season of the year, when unfavorable weather retards all kinds of out door construction work. In the build ing trades there is somewhat more unemployment than a year ago, the volume of new work under taken in the past few months having fallen below the total of new projects started in the fall of 1925, but a considerable volume of work is still under way, and the unemployment situation is not serious. The settlement of the British coal strike has lessened the demand for bituminous coal in this country to some extent, and the W est Virginia coal industry is therefore not in quite as favorable a position as it was a year ago, when the anthracite strike w as under way. W orkers in the m anufacturing plants of the district are fully employed, and the prospects for continued employment in these lines appear good. As we pointed out last month, local unemployment problems may arise here and there during the next few months, but at present there are no signs that appear to indicate any general surplus of workers in the near future. BUILDING OPERATIONS FOR THE MONTHS OF DECEMBER 1926 AND 1925. Permits Issued 0 CITIES Z 1 2 3 4 5 6 7 8 9 10 11 j 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Baltimore, Md. Cumberland, Md... Frederick, Md. . Hagerstown, Md... Danville Va.......... Lynchburg, Va.... Norfolk, Va. Petersburg, Va..... Richmond, Va. Roanoke, Va. .... Bluefield, W. Va... Charleston, W. Va. Clarksburg, W. Va Huntington, W.Va. Parkersburg,W.Va Asheville, N. C..... Charlotte, N. C..... Durham, N. C. Greensboro, N. C. High Point, N. C... Raleigh, N. C. Salisbury, N. C..... Wilmington, N. C. New Repairs 1926 1925 1926 | 1925 9 210 465 19 4 14 10 7 67 4 98 60 6 24 12 54 19 37 32 30 73 51 26 5 10 71 11 12 11 7 122 706 3 1 2 7 18 71 0 54 13 1 9 7 4 3 51 5 3 38 7 15 5 5 35 15 27 12 15 264 Totals.......... 1,252 1,361 1396 Winston-Salem, N. C. Charleston, S. C ... Columbia, S. C..... Greenville, S. C.... Spartanburg, S. C. Washington, D. C. New Construction 436 6 6 12 4 21 24 7 80 44 2 15 16 31 19 22 43 36 32 35 24 11 6 70 15 14 2 1925 1926 9001$ 2,377,920 $ 1,709,160 5 350,500 8,790 3 8,372 10,900 5 ; 17,765 6,860 12 58,210 1,605 15 12,530 36,750 34 104,655 74,525 2 5,200 32,300 58 1,112,850 655,655 144,495 16 180,410 35,500 2 350 9 36,050 23,705 5,210 7 30,953 5 97,725 49,027 67,250 2 97,150 45 452,845 261,136 9 312,720 256,300 6 165,825 211,950 14 1,298,265 154,090 8 300,950 142.6*5 207,525 8 78,325 3 40,750 2,525 4 27,700 9,800 26 151,225 133,775 16 6,480 9,685 38,942 25 47,550 51,800 7 7,800 18 17,990 200,000 251 3,451,400 2,628,600 $10,251,327 1,515 $ 7,789,663 Alterations 1926 $ 325,680 $ 1,103 4,000 800 10,380 5,963 46,099 0 24,299 2,660 25,000 6,150 32,708 4,100 1.150 21,000 6,850 1,250 41,992 30,400 10,350 3,800 43,050 98,610 4,065 1,155 1,085 4,815 217,740 $ 976,254 1925 Increase or Per Cent Decrease of of Increase 0 Total or Z Valuation Decrease 497,640 $ 496,800 22.5% 2,545 — 343,152 — 97.2 10,425 — 8,953 — 42.0 36,760 — 46,865 — 86.0 60,000 — 106,225 — 89.9 11,392 18,791 78.6 43,310 — 27,341 — 18.5 250 26,850 492.7 129,474 — 562,370 — 45.3 17,445 21,130 13.0 535 — 10,685 — 29.7 4,430 14,065 50.0 3,375 55,076 641.5 6,272 — 50,870 — 48.9 2,800 28,250 40.3 12,427 — 183,136 — 39.4 3,635 — 53,205 — 16.8 16,700 50,675 27.8 16,400 —1,118,583 — 85.1 171,585 17,100 107.4 4,158 — 123,008 — 58.1 2,200 39,825 842.9 9,600 15,550 22.2 110,695 5,365 79.6 6,235 — 5,375 — 33.8 11,882 — 2,119 — 4.2 1,260 — 44,175 — 83.3 5,450 — 182,645 — 88.9 169,230 — 774,290 — 21.4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 $1,114,245 —$2,599,655 — 22.9% —Denotes decrease NOTE-- The figures in the above table reflect the amount of work provided for in the corporation limits of the several cities, but take no account of suburban developments. New construction work provided for by permits issued in twenty-nine Fifth District cities in De cember 1926 was considerably below the work provided for in December 1925 in both number of new 4 projects and estimated valuation. The twenty-nine cities issued 1,252 permits for new work in De cember 1926, with estimated valuation of $7,789,663, compared with 1,361 permits and a valuation of $10,251,327 in December a year earlier. Figures for alterations and repairs in December 1926 also were below those of the preceding December. In total valuation for all classes of work, December 1926 recorded $8,765,917, compared with $11,365,572 reported for December 1925, a decline of $2,599,655, or 22.9 per cent. Seventeen of the twenty-nine cities reported lower figures for the 1926 month. Four high percentages of increase were reported for December by Petersburg, Clarksburg, High Point and Salisbury, but except in High Point the gains were due to very small totals in De cember 1925 rather than to any exceptionally large amount of work provided for last month. Totals compiled from reports of twenty-eight cities for which statistics were available each month since Jan u ary 1925 show that 1926 was not up to the 1925 level, either in number of permits issued or in the total estimated valuation of the contemplated work. The twenty-eight cities issued 20,984 permits for new construction in 1926, compared with 22,924 permits issued in 1925, a decrease last year of 1,940 permits, or 8.5 per cent. Estim ated valuation totaled $168,521,274 in 1926, com pared with $175,616,198 in 1925, a decrease during the later year of $7,094,924, or 4 per cent. A larger number of permits and higher valuation figures w ere reported in March, August and September in 1926 than during the same months of 1925, but all other months showed higher figures during the earlier year. Total valuation figures in 1926 were higher than for any other year except 1925, how ever, exceeding those of 1924 by approximately $10,000,000. The F. W. Dodge Corporation reports actual contract awards in the Fifth Reserve district total ing 11,649 in 1926, at a total cost of $416,801,400, compared with 13,456 contracts to cost $411,046,400 actually awarded in 1925. COAL— Production of bituminous coal in December totaled approxim ately 57,671,000 net tons, compared with 52,522,000 tons mined in December 1925. Production in December declined from the record output of November, but was above the figure for any previous December. Total production of soft coal during 1926 is estimated by the Bureau of Mines of the Department of Commerce at 578,290,000 net tons, the highest annual production figure since 1918, when 579,385,000 tons were mined. Coal exports during 1926 totaled 21,900,304 net tons, compared with 5,109,491 tons sent abroad in 1925. Coal shipped through Atlantic ports, including export, bunker, coastwise to New England, and to other points, totaled 57,574,098 tons, of which 30,716,282 passed through Hampton Roads, 10,352,835 tons through Baltimore, and 721,721 tons through Charleston, S. C. Fifth District ports thus handled 41,790,838 tons, or 72.6 per cent of all Atlantic port shipments. TEXTILES—A t the beginning of 1927 the textile industry in the Fifth District is still operating on a hand to mouth basis, but the consensus of opinion in the industry appears to be rather more op timistic than was the case two or three months ago. During the past month the decline in raw cot ton was checked, and prices turned slightly upward. Many observers believe that the low point has been reached, and a considerable increase in orders is expected for early shipment when spring business opens up. Stocks of textiles in both prim ary and secondary hands have been kept as low as possible and any appreciable increase in demand from retailers must be passed back promptly to the mills. During 1926 the mills experienced one o f the most difficult years on record. The year opened with a promise of a good volume of business, due to fair returns to agriculture from the 1925 operations, but the year had hardly opened before raw material prices began to fall, and buyers be gan to shop around for bargains. During the summer many mills were forced to curtail operations, and meanwhile cotton prices continued downward as it became increasingly evident that a large cot ton crop was in prospect. There was a large movement of cotton goods through retail channels, and these goods were of course furnished by the mills, but the buying methods used were hard on the mills and kept their profits unusually low for the total business they were doing. Fifth District mills consumed 254,102 bales of cotton in December 1926, of which North Carolina mills used 138,260 bales, South Carolina mills 105,793 bales, and Virginia mills 10,049 bales. In December 1925 the three states consumed 229,242 bales. During the calendar year 1926, the three textile m anufacturing states in the Fifth District consumed 2,768,596 bales of lint cotton, compared with 2,537,393 bales consumed in 1925, an increase last year of 231,203 bales, or 9.1 per cent. Cotton consumption in the District in 1926 exceeded the number of bales grown during that year in the District by nearly half a million bales, thus showing the District to be an importer rather than an exporter of cotton. COTTON— During 1926, spot cotton prices gradually worked downward from an average of 19.64 cents per pound during the week ended Ja n u a ry 23rd to 1 1 .1 7 cents during the week ended December n th , but at that point the price decline was checked, and an upward movement began. During the past month the average price paid grow ers in the Carolinas for middling upland cotton, of 7/8 inch staple, rose from the low point of n . 17 cents per pound during the week ended December n th to an average of 12.22 cents per pound during the week ended Jan u ary 15th. Much of the cot ton offered for sale was of low grade, however, and brought considerably lower prices than those quoted. Cotton consumed in American mills during December totaled 605,217 bales, compared with 583,950 bales used in November 1926 and 576,216 bales in December 1925. Total consumption for the present cotton year—August 1st through December 3 1s t—totaled 2,829,456 bales, in comparison with 5 2,598,119 bales used during the corresponding five months of 1925. According to the Census Bureau's January 13th report, cotton on hand in consuming establishments amounted to 1,766,392 bales on Decem ber 31, 1926, compared with 1,497,844 bales on November 30th and 1,720,696 bales on December 3 1st a year ago. W arehouses and compresses held 6,478,998 bales at the end of December, 6,517,565 bales at the end of November, and 5,584,016 bales at the end of December 1925. December imports totaled 39,851 bales, compared with 41,441 bales imported in November and 34, 474 bales in December a year ago. Exports in December totaled 1,531,297 bales, compared with 1,486,224 bales sent abroad in No vember and 984,061 bales in December 1925. Total exports during the live months of the present cot ton year totaled 5,573,220 bales, compared with 4,080,478 bales exported during the last five months of 1925. Active spindles numbered 32,496.250 in December 1926, compared with 32,586,770 in November 1926 and 32,951,136 in December 1925. Cotton consumption in grow ing states totaled 439,837 bales in December, compared with 425,490 bales used in November and 400,590 bales in December 1925. TOBACCO—V IR G IN IA leaf tobacco sales during the month of December were less than in No vember and the tobacco sold brought lower prices except for Sun-Cured. Total sales in December of 25,623,736 pounds compared with 36,092,499 pounds sold in November and brought the total sales for this season up to 81,335,692 pounds, which is approximately 58 per cent of the estimated production for the year. The average price of Flue-Cured, or Bright, tobacco was $23,59 December, compared with $26.35 in November 1926 and $15.45 in December 1925. Fire-Cured, or Dark, tobacco brought an average of $7.72 in December, compared with $17.53 realized for this type in December a year ago. Sun-Cured tobacco prices rose in December from those of November, chietly because of an improve ment in the grades offered, but the December average of $9.77 per hundred pounds was much below the average of $17.37 paid in December 1925 for the same type. Danville sold 8,563,422 pounds of Bright tobacco in December for an average of $26.50 per hundred pounds, leading the state markets in both number of pounds and in price paid. Lynchburg 1led the Dark m arkets, selling 1,570,082 pounds, but in price several m arkets averaged higher. Richmond sold 1,538,795 pounds of Sun-Cured for $9.77 per hundred, and Abingdon sold 1,247,614 pounds of Burley for an average of $14.79 Per hun dred. NO RTH C A R O LIN A auction warehouses sold 45,213,494 pounds of producers' tobacco in Decem ber, at an average price of $23.67 per hundred, compared with 48,852,879 pounds sold in December 1925 at an average of $23.14 per hundred. Season sales to December 3 1st totaled 340,672,271 pounds, compared with 303,158,756 pounds sold by the auction markets to December 3 1, 1925. Wilson led the North Carolina markets in sales in December with 8,295,644 pounds, W inston-Salem with 7,178,660 pounds ranking second, but Mebane with an average of $29.43 and Farm ville with $27.27 per hundred pounds ranked first and second in price. AGRICULTURAL NOTES—The past month was an inactive one on farms. Cold weather dam aged truck crops somewhat during the first half o f Jan uary, but there has been little snow to delay tobacco m arketing this season as was the case in 1926. In order that our readers may have comparative figures of production in convenient form for the states comprising the Fifth Federal reserve district, we are including a table herewith showing yields of the principal crops in the several states, giving figures for both 1926 and 1925. The figures were obtained from official sources, and are final estim ates. Yrs. Maryland W . Virginia Virginia N. Carolina S. Carolina 1926 1925 1926 Cotton (bales) 1925 1926 Tobacco (lbs.) 1925 1926 I. Potatoes (bus.) 1925 1926 S. Potatoes (bus.) 1925 1926 Oats (bus.) 1925 1926 Wheat (bus.) 1925 1926 Hay (tons) 1925 1926 Peanuts (lbs.) 1925 1926 Apples (bus.) 1925 1926 Apples (bbls.) 1925 (Commercial crop) Sorghum Syrup (gals.) 1926 1925 22.049.000 24.930.000 16.467.000 18.980.000 28,800,000 24,690,000 3.690.000 3.701.000 1.815.000 1.161.000 1.706.000 1.760.000 11.960.000 10.395.000 516.000 577.000 8.500.000 6.975.000 4.982.000 4.089.000 330.000 276.000 5.796.000 5.076.000 2.352.000 1.809.000 1.015.000 1.005.000 3.500.000 1.900.000 600,000 324,000 10,875,000 4,185,000 1,700,000 749,000 776.000 640.000 46.585.000 36.982.000 55.000 53.000 132.352.000 129.400.000 11.658.000 11.700.000 5.375.000 3.996.000 4.836.000 4.128.000 11,336,000 8,946,000 982.000 779.000 131.100.000 143.520.000 19,902,000 7,844,000 3.384.000 1.440.000 1,200,000 858,000 50.908.000 42.846.000 1,250,000 1JL02,000 393.190.000 380.165.000 7.400.000 4.524.000 7.560.000 7.040.000 6,820,000 4,902,000 6.303.000 4.466.000 764.000 529.000 190.120.000 212.750.000 5.986.000 3.192.000 345.000 160.000 4.004.000 1.904.000 22.103.000 19.483.000 1,030,000 889,000 57.510.000 71.040.000 3.219.000 2.400.000 4.160.000 2.860.000 10,483,000 7,182,000 800,000 506,000 202,000 57,000 6.500.000 4.730.000 647.000 386.000 Crops Corn (bus.) 6 1,694,000 780,000 FIGURES ON RETAIL TRADE As Indicated By Reports from Thirty Representative Department Stores for the Month of DECEMBER 1926 Percentage increase in December 1926 sales over sales in December 1925: Baltimore — .8 Richmond Washington Other Cities District 5.6 3.5 2.4 1.8 Percentage increase in total sales during 1926 over total sales in 1925: .6 5.5 5.1 3.2 3.0 Percentage increase in December sales over average December sales during the five years 1920-1924: 7.4 42.7 29.4 7.8 13.9 Percentage increase in stock on hand December 31, 1926, over stock on December 31, 1925: — 2.9 5.2 2.2 2.3 .2 Percentage increase in stock on hand December 31, 1926, over stock on November 30, 1926: — 19.5 — 17.1 — 18.6 — 24.0 — 19.5 Percentage of sales in December 1926 to average stock carried during that m onth: 45.5 51.3 54.0 41.1 48.7 Percentage of total sales during 1926 to average stock carried each month: 329.8 346.0 359.6 285.9 337.3 Percentage of outstanding orders on December 31st to total purchases of goods in 1925: 4.3 3.3 3.6 3.0 3.9 Percentage of collections in December to total accounts receivable on December 1st: 23.9 27.6 37.5 30.2 28.1 — Denotes decreased percentage. Retail trade, as reflected in Department store sales, was fully up to seasonal average in December. Sales reported by thirty leading stores in the F ifth reserve district exceeded November sales by 49 per cent, and also were 1.8 per cent above sales in in December 1925. A ggregate sales during the year 1926 exceeded the total sales of 1925 by 3 per cent. December sales averaged 13.9 per cent above average December sales during the five years 1920— 1924, inclusive. Stocks on hand at the end of December were two-tenths of 1 per cent larger than stocks at the of 1925, but were 19.5 below the level at the end of November 1926. Sales during December amount ed to 48.7 per cent of average stock carried during the month, and total sales during the calendar year 1926 were 337.3 per cent of average stock on the shelves at the end of each of the twelve months. This figure indicates an average turnover during the year of 3.37 times, the stores in W ashington leading with approxim ately 3.6 times. Outstanding orders at the end of 1926 totaled 3.9 per cent of total purchases of merchandise during 1925, and collections during December equaled 28.1 per cent of total receivables outstanding on December 1st. WHOLESALE TRADE, DECEMBER 1926 Percentage increase in December 1926 sales, compared with sales in December 1925: 35 Groceries 12 Dry Goods 6 Shoes 16 Hardware . 5 Furniture — 11.8 4.1 — 4.1 1.5 — 23.4 Percentage increase in December 1926 sales, compared with sales in November 1926: — 11.2 — 18.5 — 47.9 — 14.7 — 52.8 Percentage increase in total sales during the year 1926, compared with sales in 1925: — 3.6 — 1.6 9.9 3.4 — 5.7 Percentage increase in stock on December 31, 1926, compared with stock on December 31, 1925: — 3.1(15) — 20.8 (4) 30.4(4) — 1.8(7) Percentage increase in stock on December 31, 1926, compared with stock on November 30, 1926: — 6.0(12) — 4.1 (4) * 7.1(3) .3(7) Percentage of collections in December to accounts receivable on December 1, 1926: 67.1(22)____________ 36.5(8)______________33.9(5)_____________ 43.0(12)____________ 37.7(3) 10 Drugs — 4.4 — — 6.0 .1 55.5(6) — Denotes decreased percentage. N O T E : The number o f firms reporting stock and collection data in each group is shown immediately fo l lowing the percentages. Wholesale trade in December, as indicated by reports from 84 firms in six leading lines, was in smaller volume than in November, a regular seasonal development. In comparison with December 1925 sales, those made in December 1926 were greater in dry goods and hardware, but less in gro ceries, shoes, furniture and drugs. Total sales for 1926 exceeded 1925 sales in shoes and hardware, but in the other four lines sales last year were below those of 1925, the decline in dry goods prob ably being due in large part to the lower prices on cotton goods. Grocery and dry goods stocks declined in December, while stocks of shoes and hardware in creased. A t the end of the year stocks in three of the four lines for which information was available were less than stocks on hand December 3 1, 1925* a very healthy condition in which to begin the new year. Collections in December were better than in November in all lines except groceries and shoes, and the percentage for shoes was exactly the same for both months. (Com piled January 2 0, 1 92 7) 7 BUSINESS CONDITIONS IN THE UNITED STATES. (Compiled by the Federal Reserve Board) Index numbers of production of manufactures ft ainerals, adjusted for seasonal variations (1923-25 average 100). Latest figures, December, manufactures 104, minerals 117. 1925 1926 Indexes of U. S. Bureau of Labor Statistics (1913 100). Latest figures, December, all commodities 147.2, non-agricultural coo■odities 151.5, agricultural commodities 142.2. Inde* of sales of 359 stores (1919 100}. Latest figures, December, adjusted index 146, unadjusted index 23J. BILLIONS Or DOLLARS ( 2 r ~ ” i " ............. RESE RVE BANK CREDIT 1 , Tofal * fReserve Bank I Credit 7 1 1 / s _ I / Discot jntsfor Membfir Banks U.S.Seciirities ........V \ / \ A v . y J / - Acceptanoes iI____ Monthly averages of daily figures for 12 federal Reserve BaiUs. Latest figure* are averages of first 23 days in January. PRODUCTION. In December fo r the third consecutive month there was a decrease in industrial production, and the B oards new index with adjustment for seasonal variations was 105 on the basis o f the average fo r 1923, 1924 and 1925 as 100. This compares with 113 in September, the high point o f the year, and with 108 a year ago. The decline since the recent high point has been en tirely in the manufacturing industries, as the output o f minerals was at a record high level in November and showed only a slight decline in December. By far the greatest recession o f recent months has been in the automobile industry, output of passenger cars and trucks in the United States decreasing from 425,000 in August to 165,000 in December. Reduction in the manufacture o f automo biles is usual at the end of the year, when plants close fo r inventory taking and repairs, but in December 1926 the decline was consid erably larger than usual. Production o f iron and steel has also been sharply reduced since the middle o f autumn, and activity in the woolen and worsted and silk industries has been somewhat cur tailed. Production o f lumber, cement and other building materials has reflected the usual winter decrease in demand. Cotton con sumption, on the other hand, was larger than in any previous De cember. Factory employment and payrolls declined further in December, reflecting decreases in nearly all industries except cotton goods, clothing, foundries and machine shops, printing and publish ing. The value of building contracts awarded in December, as in November, was larger than in the corresponding period a year earlier, but fo r the first three weeks o f January contracts were in smaller volume than during the same weeks o f 1926. This decline in January was largely concentrated in the New York and Atlanta Federal reserve districts, where building was unusually active a year ago. Residential contracts were smaller in December than a year earlier in nearly all districts, the increase in the total fo r the month being in other types o f building. TRADE. Retail sales in December exceeded all previous records. Sales o f department stores were approximately 4 per cent larger than in December o f last year, and sales o f mail order houses, while slightly smaller than in 1925, were larger than in the corresponding month o f any other year. Sales at wholesale, on the other hand, declined in December and were smaller than a year ago in practically all leading lines except shoes. Merchandise stocks carried by department stores were reduced slightly more than is usual in December and were somewhat smaller at the end o f the month than in 1925, and wholesale stocks were also slightly smaller than a year ago. Freight car loadings showed about the usual sea sonal decline in December, with shipments o f all groups o f com modities except coal and merchandise in less than carload lots in smaller volume than a year earlier. PRICES. Wholesale prices declined further in December, and the Bureau o f Labor Statistics index at 147 fo r that month was at the lowest level since the middle o f 1924. Prices o f agricultural products, which declined considerably in October and November, increased slightly in December, owing to advances in the prices o f grains and cotton. In the first three weeks o f January there were further increases in grains, and advances also in cotton, hogs and flour. Prices o f non-agricultural products declined in December, owing chiefly to decreases in bituminous coal, clothing materials, non-ferrous metals and building materials. In January, iron and steel prices were slightly reduced and there were further declines in bituminous coal and non-ferrous metals, while prices o f cotton goods and coke advanced. BANK CREDIT. A t the reserve banks during the fou r weeks follow ing the peak o f the seasonal currency demand there was a return flow o f Federal reserve notes and other cash from circulation amounting in the aggregate to about $400,000,000. This return flow o f currency was in about the same volume as a year ago, and together with substantial gold imports, was reflected in a reduction o f the volume o f reserve bank credit in use to a level on January 19 th lower than at any time since the summer o f 1925. Loans and investments o f member banks in leading cities, after increasing to a record level at the end o f the year, declined sharply in January. Commercial loans, which had reached their seasonal peak in Novem ber, were in the middle of January about $200,000,000 below the maximum figure, but were still more than $300,000,000 above the level o f a year ago. Loans on securities at the reporting banks also declined after the turn o f the year, follow ing a large increase in December, and were slightly smaller than in January o f last year. Easier money conditions prevailed in the money market in January, and rates on prime commercial paper declined from 4 Y2 to 4% per cent, and those on bankers’ acceptances from 3% to a range o f 3 % — 3 % per cent. 8
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