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MONTHLY

REVIEW

o f Financial and Business Conditions

F ifth
Federal

Re s e r v e
D is tr ic t

Federal Reserve Bank, Richmond, Va.

January 31,1939
% Change
Mo.
Year

November 1938

December 1938

December 1937

Debits to individual accounts (24 cities).......
Number of business failures, 5th dist..............
Liabilities in failures, 5th dist.........................
Sales, 30 department stores, 5th dist................
Sales, 168 wholesale firms, 5th dist.................
Registrations, new passenger autos.................
Value of bldg. permits, 31 cities........... .............
Value of contracts awarded, 5th dist................
Cotton consumption, 5th dist. (B ales)....... .....
Tobacco sold in district (P ou nds).....................
Cash received for tobacco, 5th dist....................
Coal mined, U. S. (T o n s)....................................

$1,224,102,000
51
320,000
$
$ 10,185,559
9,998,000
$
15,638
6,729,179
$
$ 36,928,000
287,585
80,433,919
$ 16,810,986
36,110,000

$1,415,177,000
48
934,000
$
$ 18,301,800
9,328,000
$
18,853
8,387,203
$
$ 38,201,000
266,650
29,472,398
4,589,628
$
36,230,000

$1,417,256,000
44
532,000
$
$ 18,026,443
9,025,000
$
14,715
3,743,090
$
$ 19,291,000
208,695
44,344,253
7,772,978
$
37,122,000

H E course o f trade and industry in the Fifth Fed­
eral Reserve district in 1938 formed a reverse curve
from that o f 1937. In the earlier year, business advanced
during the first eight months, but then turned downward
and continued to decline, with only a few exceptions, to
mid-summer o f 1938.
About July improvement was
noted in several lines, and conditions continued to get
better through the balance of the year. On the whole,
however, the increase was insufficient to make up for
the relatively poor showing o f the first half-year, al­
though some lines did forge ahead o f the 1937 levels.
Construction made the most important improvement in
comparison with the preceding year. City building per­
mits issued in 1938 were only a fraction o f 1 per cent less
in estimated valuation than permits issued in 1937, while
contracts awarded last year exceeded 1937 contracts by
3 per cent. The textile industry also made a moderately
favorable record in 1938 in comparison with 1937. Rayon
mills shipped more yarn and reduced excess inventories to
a moderate level, and cotton mills consumed more cotton
during the last half-year than in the same period a year
earlier. Tobacco manufacturing exceeded that o f 1937
in all lines except cigars. On the other hand, debits to
individual accounts figures in 24 Fifth district cities
were 10 per cent less in 1938 than in 1937, most o f the
decline occurring before August. Employment rose sub­
stantially in the fall and early winter, but probably the

average employment level for the year was lower than
for 1937. Commercial failures were 27 per cent more
numerous in the district last year than in 1937, although
aggregate liabilities declined 16 per cent in 1938. Sales
o f new automobiles were 41 per cent below 1937 sales
in the district, but sales in the last two months o f 1938
were materially ahead o f sales in the corresponding
months o f the preceding year. Bituminous coal produc­
tion in 1938 was nearly 23 per cent less than production
in 1937, most o f the decline falling in the first half o f the
year. Retail trade as reflected in department stores de­
clined 3.2 per cent in 1938 from the level o f 1937, but
probably most o f this decrease was due to price changes
downward in the later year. In agriculture, developments
in 1938 were much less favorable than those o f 1937, most
crops returning smaller yields and all o f them showing
lower aggregate values in comparison with the figures for
the earlier year. This lower purchasing power o f the
farm population probably explains in large part the fail­
ure o f many other lines o f trade to equal the level at­
tained in 1937, especially in automobile and retail sales.

T




+ 16
— 6
+192
+ 80
— 7
+ 21
“f* 25
+ 3
— 7
— 63
— 73
0

0
+ 9
+ 76
+ 2
+ 3
+ 28
+124
+ 98
+ 28
— 34
— 41
— 2

Looking specifically at developments in December 1938,
further advancement is indicated in practically all lines.
Debits to individual accounts increased 16 per cent over
November debits, and approximately equaled those for
December 1937.
Commercial failures were fewer in
number but higher in liabilities than in November. Regis-

MONTHLY REVIEW

2

trations o f new automobiles were higher than in any
other month since August 1937, and exceeded December
1937 registrations by 28 per cent.
Building permits
totaled 124 per cent more in valuation than permits issued
in December 1937, and contracts awarded last month in­
creased 98 per cent over awards a year earlier. Coal
production in December was only 2.4 per cent less than
in December 1937. Cotton consumption in the Fifth dis­
trict textile mills was higher last month than in Decem­
ber a year ago. Department store sales advanced 1.5 per
cent over December 1937 sales, and retail furniture sales
rose 12.7 per cent. Wholesale trade last month was 3
per cent greater than in December 1937.
R e se r v e B a n k S t a t e m e n t : A s a result o f re-allocation
o f S y stem h old in g s o f G ov e rn m e n t secu rities o n January
1, the F ed era l R e s e rv e B a n k o f R ic h m o n d 's p o r t fo lio o f
G ov ern m en ts rose $13,698,000 betw een D e ce m b e r 15 and
Ja n u a ry 15, and cash reserves c o rr e sp o n d in g ly declin ed
$11,465,000. M e m b e r bank reserv e d ep osits r o s e sh arply
d u rin g the m on th , in crea sin g $24,790,000, but th ere w as a
seasonal decrea se in F ed era l R e s e rv e n otes in actual cir­
cu la tion a m ou n tin g to $7,367,000.

Between January 15, 1938, and the same date in 1939,
member bank reserve deposits increased $29,953,000 and
cash reserves o f the Richmond bank rose $58,438,000.
Certain items fluctuated considerably during the year, but
most changes were daily or seasonal variations and were
000 omitted
Jan. 15
Dev. 15
1939
1938

ITEMS
Discounts held ........................................
Open market paper .............. ................
Government securities .........................
Total earning assets .........................
Circulation of Fed. Res. notes...........
Members’ reserve deposits .................
Cash reserves ..........................................

$

337
24
1,466
134,019
135,846
201,805
248,166

$

157
24
1,485
120,321
121,987
209,172
223,376
376,240
76.59

73.36

D
December
1938

CITIES
Maryland
Baltimore ...................................... .................
Cumberland .................................. .................
Hagerstown .................................... .................
Dist. of Col.
Washington ....................................
Virginia
Danville ..........................................
Lynchburg .................................... .................
Newport News ..............................
Norfolk .......................................... .................
Portsmouth ....................................
Richmond ........................................ .................
Roanoke .......................................... ...................
West Virginia
Charleston ......................................
Huntington ................. .................. ...................
North Carolina
Asheville ...................................... .
Charlotte ......................................
Durham ........................................ .
Greensboro ....................................
Raleigh
..........................................
Wilmington
................................. ...................
Winston-Salem .............................
South Carolina
Charleston .......................................................
Columbia ........................................ ...................
Greenville .........................................................
Spartanburg ................................. ...................
District Totals

e b it s

$

559
23
1,759
136,297
138,638
202,954
218,213
306,337
69.68

to

I

000 omitted
Jan. 11
Dec. 14
1939
1938

it e m s

$238,628
425,546
166,196
20,364
474,842
196,136
0

Loans & discounts .................
Investments in securities . . .
Reserve bal. with F. R. bank
Cash in vaults ..........................
Demand deposits .....................
Time deposits ............................
Money borrowed .......................

M

u tual

S a v in g s B a n k

D e p o s its:

$242,824
426,905
149,180
21,492
476,614
195,305
0

Jan. 12
1938
$251,281
389,379
137,296
19,006
448,616
194,702
0

D ep osits in 10 m u ­

tual savings banks in B a ltim ore rega in ed in D ecem b er
the

seasonal

d eclin e

sh ow n

in

N o v e m b e r,

and

totaled

$219,160,622 on D e ce m b e r 31, com p a red w ith $218,613,489 on N o v e m b e r 30, 1938, and $218,947,860 o n D e c e m ­
ber 31, 1937. M u tu a l savings bank d ep osits rose d u rin g
each o f the first fo u r m on th s o f 1938, but then g ra d u a lly
declin ed

until

S ep tem b er.

In

S ep tem b er

and

O c to b e r

there w ere in creases in d eposits, bu t a n oth er declin e o c ­
cu rred in N o v e m b e r.

T h e h igh est p oin t on re co r d f o r

d ep osits in the 10 banks w as reach ed on A p r il 30, 1938,
w ith $219,926,013.

n d iv id u a l

A

ccounts

November
1938

December
1937

$ 319,818,000
7,356,000
8,203,000

$ 402,105,000
9,117,000
8,682,000

257,738,000

% Change
Month
Year

Annual Totals
1938

4 .2 0
+ 15
+ 14

— 4
— 7
+ 8

$ 3,926,328,000
88,516,000
97,633,000

$ 4,417,408,000
111,717,000
106,830,000

— 11
— 21
— 9

283,615,000

+ 16

+

5

2,966,804,000

3,164,659,000

- 6

182,564,000
29,805,000

15,734,000
14,273,000
9,020,000
47,739,000
4,246,000
165,934,000
25,856,000

12,442,000
16,162,000
10,443,000
56,604,000
4,698,000
176,927,000
30,695,000

-2 5
+ 15
+ 15
+ 19
+ 28
+ 10
+ 13

— 5
+ 2
0
+ 1
-M 5
+ 3
— 5

118,278,000
170,148,000
9*7,881,000
599,644,000
49,246,000
1,866,125,000
290,520,000

130,105,000
187,743,000
113,533,000
615,937,000
49,621,000
1,982,410,000
355,835,000

— 9
— 9
— 14
— 3
—
1
— 6
— 18

18,663,000

46,024,000
16,302,000

71,157,0*00
20,064,000

+ 19
+ 14

-2 3
— 7

542,757,000
191,678,000

673,248,000
227,201,000

— 19
-1 6

11,670,000
55,111,000
36,482,000
18,091,000
40,951,000
10,258,000
43,596,000

13,992,000
62,151,000
33,443,000
19,543,000
48,742,000
11,620,000
45,534,000

+ 21
+ 19
-1 1
+ 22
+ 21
+ 11
+ 13

+ 1
+ 6
— 3
+ 13
+ 2
— 2
+ 8

139,591,000
637,201,000
390,426,000
206,528,000
470,873,000
125,109,000
465,338,000

160,819,000
728,359,000
400,209,000
225,861,000
473,741,000
137,112,000
504,611,000

— 13
— 13
— 2
— 9
— 1
— 9
— 8

16,458,000
25,354,000
18,392,000
9,496,000

17,909,000
31,228,000
19,707,000
10,676,000

+
+
+
+

16
25
20
15

+ 7
+ 1
+ 12
+ 3

191,341,000
294,721,000
206,938,000
104,893,000

225,967,000
351,083,000
248,400,000
118,483,000

— 15
— 16
— 17
— 11

$1,224,102,000

$1,417,256,000

+ 16

0

$14,188,517,000

$15,710,892,000

— 10

$ 384,745,000
8,458,000
9,360,000

16,439,000
56,963,000

11,342,000

19,082,000
31,598,000
22,069,000
10,943,000

.......................

0 indicates a change o f less than y 2 of 1 per cent.




Jan. 15
1938

S t a t e m e n t o f 41 R e p o r t i n g M e m b e r B a n k s : The ac­
companying statement shows the principal items o f condi­
tion for 41 regularly reporting member banks in 12 cities
of the Fifth Reserve district, figures as o f January 11,
1939, being compared with those as of December 14, 1938,
and January 12, 1938, a month and a year earlier, respec­
tively. Changes during the month were chiefly seasonal
except for a material increase in reserve balance at the
Reserve bank, but during the year substantial increases
occurred in investments in securities, reserves at the R e­
serve bank, and demand deposits, while loans declined
about 5 per cent. None o f the reporting banks was bor­
rowing in January this year or last, but during the year
one or two o f the 41 institutions borrowed temporarily
from the Reserve bank or outside the System.

.

Annual Totals
%
1937
Change

MONTHLY REVIEW
D e b it s t o I n d i v i d u a l A c c o u n t s :
Debits to individual
accounts, measuring checks cashed against deposit ac­
counts o f individuals, firms and corporations in 24 Fifth
district cities, rose seasonally by 16 per cent in Decem­
ber in comparison with November, and were approximate­
ly the same as debits in December 1937. Every city except
Danville and Durham increased in December over N o­
vember, declines in those cities being due to smaller to­
bacco sales. In comparison with December 1937, debits
last month rose in 15 cities and declined in nine.

During the calendar year 1938, debits ran behind those
o f 1937 in every month. From January through July the
monthly declines were between 12 and 15 per cent, but
from and including August the declines were 7 per cent
or less, falling to 1 /1 0 o f 1 per cent in December. Total
debits for the year 1938 were 10 per cent less than debits
in 1937, Raleigh and Portsmouth with declines of 1 per
cent and Cumberland with a drop o f 21 per cent making
the best and worst comparisons, respectively.
: Certain seasonal influences always tend
to reduce employment in the Fifth district between the
middle o f December and the end o f the year, some o f
which is temporary, but the seasonal decline this year
appears to have been partly offset by increases in other
lines, especially in construction and industries directly
affected by construction work. Retail outlets released
extra employees taken on for the holiday trade as soon
as Christmas passed, tobacco auction markets closed about
ten days for the holidays, thereby reducing wage pay­
ments to handlers and laborers not working on salaries,
coal mines produced about 5 per cent less coal on a daily
basis in December than in November, and textile pay­
rolls were lowered by holiday periods o f varying lengths
in different mills. On the other hand, construction work
provided for by contracts actually awarded rose in De­
cember, the value of contracts awarded that month ex­
ceeding the value for any earlier month since June 1937.
During 1938 as a whole, developments in labor circles
reversed the trend o f 1937. In the earlier year, employ­
ment gradually declined during the late summer and fall,
and continued downward through the first half o f 1938.
Between July and August, however, employment in the
Fifth district began to rise, and continued to increase to
the end of the year.
E

m plo ym en t

The following figures, compiled by the Bureau o f Labor
Statistics from records submitted by a large number o f
identical industries, excluding building construction, show
the trends of employment and payrolls in the Fifth dis­
trict from November to December:
STATES
Maryland ...................................................................
D. of Columbia .......................................................
Virginia ...................................................................
West Virginia .......................................................
North Carolina .......................................................
South Carolina ...............- .....................................

Percentage change from
Nov. 1938 to Dec. 1938
In number
In amount
on payroll
of payroll
+ 3.7
4*10.5
4" 2.2
+ 0.7
-j- 0.7
+1.0

+ 6.9
-j- 8.2
-j- 3.9
— 0.2
+2.7
+ 2.0

C o m m e r c ia l F a il u r e s :
Data on commercial failures,
compiled by Dun & Brad street, for December and the
calendar year 1938 in comparison with corresponding




3

periods a year earlier, are as fo llo w s :
Number of failures
District U. S.

PERIODS
December 1938 .....................
November 1938 .....................
December 1937 .....................
Year
Year

1938
1937

Total Liabilities
District
U. S.

48
51
44

$ 934,000
320,000
532,000

$ 36,528,000
12,302,000
27,818,000

639
503

..............................
..............................

875
984
1,009
12,836
9,490

$8,052,000
9,586,000

$246,505,000
183,253,000

A u t o m o b il e N e w C a r R e g is t r a t io n s :
Sales o f new
passenger automobiles, which turned upward in October
and November after reaching the year’s low point in
September, increased further in December and exceeded
December 1937 registrations by 28 per cent. Sales of
18,853 new cars in the Fifth district last month were
the largest for any month since August 1937. Total
registrations in 1938 in the district were 41 per cent
below those in 1937, every month except November and
December showing lower figures than the corresponding
month o f the earlier year. The following figures on
monthly and annual registrations were reported by R. L .
Polk & Company, o f Detroit:
Registration of New Passenger Cars
STATES
Maryland ...........
D. of Col..............
West Virginia . .
North Carolina .
South Carolina .
District

Dec.
1938
3,427
2,143
3,766
1,757
5,767
1,993
18,853

Dec.
1937

%
Change

2,521
1,470
3,064
1,441
4,982
1,237
14,715

+ 36
+ 46
+23
+ 22
+ 16
+ 61
+ 28

12 Months 12 Months
%
1938
1937
Change
27,331
17,944
31,204
16,483
33,922
15,748
142,632

46,371
28,259
50,768
35,679
55,341
26,969
243,377

— 41
— 37
— 39
— 54
— 39
— 42
— 41

C o n s t r u c t i o n : The construction industry made marked
progress in the last 4 months o f 1938 in the Fifth dis­
trict, due in large part to Government financed or aided
projects. In 31 cities, building permits issued in De­
cember 1938 totaled $8,387,203 in estimated valuation, an
increase o f 124 per cent over permits totaling $3,743,090
issued in December 1937. During the first 8 months o f
1938, permits issued fell 16 per cent behind the valuation
o f permits issued in the first 8 months o f 1937, but the
increase in the last 4 months was sufficiently large to
balance the earlier decrease, total permit valuation for
the entire year 1938 being only 2 /1 0 o f 1 per cent below
the total 1937 valuation. Figures for contracts actually
awarded for all types o f construction work in the district,
including both rural and urban, followed the same trend
as city permits. In the first 7 months o f 1938, contracts
totaled 22 per cent less than contracts awarded in the
corresponding period in 1937, but in August contracts
increased substantially and from that month to the end
o f the year exceeded 1937 figures by enough to bring total
contracts for 1938 to $325,692,000, an increase o f 3 per
cent over $314,730,000 for 1937. Contracts awarded in
December 1938 totaled $38,201,000 in the Fifth district,
an increase o f 98 per cent over contracts totaling $19,291,000 awarded in December 1937. Annual contract
figures for Fifth district states, as reported by the F. W .
Dodge Corporation, were as follows in 1938 and 1937:
Construction Contracts Awarded
STATES
Maryland ....................................
Dist. of Col..................................
Virginia ......................................
West Virginia .........................
North Carolina .........................
South Carolina .......................
District Totals ......................

Year 1938
$ 72,528,000
46,437,000
80,645,000
34,619,000
61,638,000
34,814,000
$330,691,000*

Year 1937 % Change
$ 70,007,000
+ 4
65,446,000
— 29
68,675,000
+17
24,459,000
+42
55,740,000
+11
34,041,000______ + 2
$318,368,000*
+ 4

* Includes a few contracts, in W . Va., outside the 5th district.

MONTHLY REVIEW

4
V a l u a t io n

of

B u il d in g

P e r m it s I s s u e d :

c it ie s

Maryland
Baltimore .........................................
Cumberland .....................................
Frederick . . .....................................
Hagerstown .....................................
Salisbury ........................................
Virginia
Danville ...........................................
Lynchburg .......................................
Norfolk ...........................................
Petersburg .....................................
Portsmouth .....................................
Richmond .........................................
Roanoke ..........................................
West Virginia
Bluefield ......................... ................
Charleston .......................................
Clarksburg .......................................
Huntington .....................................
North Carolina
Asheville ...........................................
Charlotte ............................. ...........
Durham ...........................................
Greensboro ....................................
High Point .....................................
Raleigh ............................................
Rocky Mount .................................
Salisbury .........................................
Winston-Salem ...............................
South Carolina
Charleston .......................................
Columbia ........................................
Greenville ........................................
Rock Hill ........................................
Spartanburg ...................................
Dist. of Col.
Washington ........................... .

1938
$16,291,320
333,714
349,637
432,701
478,541

1937
$18,194,512
508,040
358,111
475,475
531,298

638,144
1,037,782
4,581,111
308,108
543,189
4,524,045
1,104,865

757,967
1,101,032
2,569,875
125,833
399,282
4,175,888
2,208,743

466,725
2,956,660
381,975
1,362,664

588,150
2,523,198
538,617
1,280,706

769,748
2,807,592
2,954,914
1,866,048
1,074,828
3,848,382
789,203
495,470
2,394,364

744,360
3,513,708
2,296,741
2,121,214
745,922
1,678,830
450,126
206,310
2,117,205

2,148,495
1,714,236
1,019,953
1,051,101
705,965

1,152,203
1,570,603
1,196,649
381,990
527,483

29,177,948

33,752,365

District Totals ...........................

$88,609,428

$88,792,436

Note:

Permit valuation figures for Washington do not include Fed'eral
Government buildings.

C oal

M in in g :

B it u m in o u s

coal

m in e d

in

th e

U n it e d

36,230,000 net to n s in D e c e m b e r 1938, a
slig h t in cre ase o v e r 36,110,000 to n s m in e d in th e sh o r te r
m o n th o f N o v e m b e r b u t 2.4 p er cen t less th a n 37,122,000
to n s m in e d in D e c e m b e r 1937.
P r o d u c tio n in th e ca le n ­
d ar y e a r 1938 o f 342,407,000 n et to n s s h o w e d a d eclin e
o f 22.6 p er cen t f r o m 442,455,000 to n s m in e d in 1937,
and w a s 36 p er cen t b e lo w 534,989,000 to n s d u g in 1929.
H a m p t o n R o a d s p o r ts sh ip p ed a p p r o x im a te ly 17,007,212
to n s in 1938, c o m p a re d w ith 21,071,857 to n s sh ip p ed in
1937. T h e re p o rt o f th e B it u m in o u s C o a l C o m m is s io n
fo r J a n u a r y 7, 1939, listed p ro d u c tio n fig u r e s b y states
f o r N o v e m b e r 1938 a n d 1937 as f o l l o w s :
S ta te s

to ta led

Soft Coal Production in Tons
STATES

Nov. 1938

West Virginia .......................
Virginia ...................................
Maryland .................................
5th District .........................
United States .....................

re p o r ts
have

in d ica te

been

w h ile
change

9,424,000
9,085,000
1,210,000
1,125,000
123,000_________ 140,000______
10,757,000
10,350,000
36,110,000
36,428,000

Rayon Organon

R ayon :

y e a r -e n d
fro m

m o n th s o f

in

s to c k s

th e

1938,

s h ip m e n ts

excess

of

-|- 3.7
+ 7.6
— 12.1
-f 3.9
— .9

f o r J a n u a r y s a y s , “ P r e lim in a r y

D ecem ber

som ew h at

% Change

Nov. 1937

yarn

N ovem ber

of

of

th e

ra y o n

p r o b a b ly

30

le v e l.

yarn

N ovem ber
w ill

sh ow

to

to ta l,
little

D u r in g th e ea rly

th e r a y o n m a r k e t w a s c h a ra c te rize d b y

a p e rio d o f s u b -n o r m a l a c tiv ity , w h ic h w a s f o llo w e d b y a
re c o rd h ig h ra te o f d eliv e r ie s f r o m J u ly to S e p te m b e r an d
a r e s u m p tio n o f a m o r e n o r m a l p e r fo r m a n c e in th e clo sin g
m o n th s o f th e y e a r .

A b o u t m id -y e a r , an im p r o v e m e n t in

g e n e ra l b u s in e s s p s y c h o lo g y , th e
rayon

yarn

p ric e s , a n d

th e

fea r

n orm al

of

an

s e a so n a l

in cr e a se in
in cre a se

in

y a r n d e m a n d re su lte d in a p e r io d o f fe v e r is h y a r n b u y in g .




Subsequently fabricators’ yarn and cloth inventories were
replenished and the demand for rayon yarn became stabil­
ized at a more normal level.” Early estimates indicate
that yarn shipments during 1938 slightly exceeded those
for 1937, but yarn production for 1938 is estimated at
about 20 per cent below the record high o f 1937. The
difference between shipments and production reduced ex­
cessive stocks held by rayon yarn producers at the end o f
1937.
C o tto n T e x t il e s :
Textile mills in the Fifth district
closed about a week in December for the holidays, and
therefore total output was less than in November but
was higher on a daily basis for the number of days mills
actually operated. Trade indexes indicate that in early
January mill activity increased considerably more than
seasonally. However, output o f cloth and yarn continued
to exceed sales and unfinished cloth prices sagged a little.
Stocks o f cotton goods in channels o f distribution are re­
ported as comparatively small, even sufficiently so to re­
tard retail sales in some instances. On January 1 the
index o f retail prices o f “ cotton wash goods” was about 5
per cent lower than a year ago, and that for cotton bed
sheets was down nearly 10 per cent. Consumption of
cotton by states in the Fifth district in December 1938,
November 1938, and December 1937, in bales, is shown
below :
Virginia

District

December 1938 ...............
November 1938 ...............
December 1937 ...............

MONTHS

No. Carolina So. Carolina
145,327
156,212
104,593

112,245
118.756
93,865

9,078
12,617
10,237

266,650
287,585
208,695

12 Months, 1938 ___ ____
12 Months, 1937 ...............

1,542,706
1,865,104

1,196,000
1,473,417

137,224
174,546

2,875,930
3,513,067

A report on spindle activity in November, released by
the Bureau o f the Census on December 21, shows South
Carolina in second place with an average o f 353 hours o f
operation per spindle in place, with Virginia and North
Carolina averaging 299 hours, all above the National aver­
age o f 291 hours. South Carolina led in total spindle
hours o f operation in November with 2,012,827,518 hours,
while North Carolina was second with 1,789,500,189
hours, the two states accounting for 50.2 per cent o f the
United States total o f 7,575,193,064 hours o f operation.
Cotton:
Spot cotton prices advanced about $1.50 per
bale between the first week in December and the end of
that month, but lost part o f the gain in the first half o f
January. The average price for middling grade upland
cotton was 8.30 cents per pound on 10 Southern markets
on December 9, rose to 8.60 cents on December 30, and
then declined to 8.49 cents on January 13, the latest date
for which official figures are available. The strength o f
the market in December was a reflection o f the endorse­
ment o f quotas by cotton growers and downward revisions
of estimates o f both domestic and foreign cotton produc­
tion which lowered the world supply by 400,000 bales.
The indicated world supply, however, at 50,462,000 bales
is still the largest in history. The Commodity Credit
Corporation reports that through January 12 a total of
3,914,000 bales from the 1938 crop was pledged on Gov­
ernment loans, and that Government loan stocks are now
about 10,900,000 bales. Exports o f American cotton in
the five months o f the 1938-1939 cotton year between

MONTHLY REVIEW
August 1 and December 31 were 40 per cent below ex­
ports in the corresponding five months ended December
31, 1937, all important countries except Japan taking less
in the later year. Exports to Great Britain declined from
988,236 bales in the 1937 period to 242,291 bales in the
1938 five months.
cfotton Consumed and On Hand
(Bales)
Aug. 1 to Dec. 31
This Year Last Year

Dec.

1937

266,650

Fifth District States:
Cotton consumed ..

Dec.

1938

208,695

Cotton growing states:
479,708
372,817
Cotton consumed .......................
Cotton on hand Dec. 31 in
1,478.332 1,448,729
Consuming establishments . .
Storage & compresses ......... 15,272,281 11,815,239
United States:
Cotton consumed .......................
432,328
565,307
Cotton on hand Dec. 31 in
Consuming establishments
1,697,089 1,714,596
Storage & compresses ......... 15,331,332 11,891,409
Exports of cotton ............................

361,026

751,001

1,348,619

1,295,290

2,372,169

2,254,840

R

e t a il

T

5
rade

in

D

S

epartm en t

tores

:

Net Sales
Net Sales
Stocks
Ratio Dec.
Dec. 1938 Jan. l to date
Dec. 31, 1938
collections
comp, with comp, with
comp. with
to accounts
December same period Dec. 31
Nov. 30 outstanding
last year
1938 December 1
1937
1937
Richmond (3)
Baltimore (8)
Washington (6) .
Other Cities (13)
District (30) .
Same stores by
States, with 20
stores added:
Virginia (11) . .
West Va. ( 9 ) . . .
No. Carolina (7)
So. Carolina (8)

+
—
+
+
+

3.4
2.1
3.4
3.8
1.5

—
—
+
—
—

— .3
— 5.8
— .9
— 7.3
— 3.2

+ 3.2
+ 2.5
+ 3.4

—

3.3
2.7
.7
6.3
1.6

— 25.9
— 20.7
— 23.2
— 25.9
— 22.9

35.6
33.5
28.8
30.3
31.2

1.1

— 11.3

+ 1.8

— 6.9

e t a il F u r n it u r e S a l e s :
A preliminary survey o f re­
tail furniture sales in the Fifth reserve district shows
sales by 17 stores in December 1938 to have been 12.7
per cent greater than sales in December 1937, but annual
sales during 1938 in the same stores were 7.5 per cent
less than total sales in 1937. Eleven stores sold more
and six sold less in December 1938 than in December
1937. Total sales by the seventeen stores run between
$3,500,000 and $4,000,000 annually.

R

2,799,817

2,644,414

...........

...........

1,895,754

3,184,766

Spindles active, U. S....................... 22,444,784 22,337,254

................................

obacco M a r k e t in g :
Sales in auction tobacco markets
in December were curtailed by a holiday o f about ten
days around Christmas, and in addition most o f the crop
was marketed prior to that month. The grades o f tobacco
sold last month were poorer than in earlier months and
average prices declined. Sales in Fifth district states
last month and for the season to December 31, with aver­
age prices paid to growers, are as follow s:

T

Producers* Tobacco Sales, Lbs.
Dec. 1938
Dec. 1937

STATES
North Carolina ...................
N. C. Season to 12/31 . . .
Virginia (Flue-cured) . . .
(Fire-cured) . . .
(Burley)
...........
(Sun-cured) . . .
Virginia, Total .................
Va. Season to 12/31 . . . .
South Carolina, Season

13,205,627
498,088,447
6,847,356
4,326,893
4,516,608
575,914
16,266,771
95,908,044
86,670,522

24,211,028
554,917,793
11,690,546
3,684,778
4,406,238
351,663
20,133,225
88,508,034
101,352,469

Price per Cwt.
1937
1938
$16.82
22.98
15.90
10.13
17.25
10.92
14.56
21.28
22.23

$18.01
24.81
16.89
9.89
23.64
8.89
16.95
23.00
20.83

The Bureau o f Internal
Revenue reports tobacco products manufactured in De­
cember 1938 and 1937 as follow s:

T

obacco

M

a n u f a c t u r in g

:

Dec. 1938
Smoking & Chewing
Tobacco, pounds ...............
Cigarettes, Number .................
Cigars, Number ........................
Snuff, Pounds ............................

23,728,246
12,655,993,013
333,981,623
3,398,232

Dec. 1937

% Change

21,300,061
+11
12,610,618,153 0
336,161,499
— 1
3,399,738
0

Total production o f tobacco products in 1938 and 1937
was as follow s:
1938
Smoking & Chewing
Tobacco, Pounds ..............
Cigarettes, Number ............... ..
Cigars, Number ..........................
Snuff, Pounds ...........................




305,929,000
163,658,509,000
5,138,748,000
37,333,000

1937

% Change

300,925,000
162,625,514,000
5,317,436,000
36,934,000

+
+
—
+

2
1
3
1

W

h olesale

T

rade,

168

F

ir m s

:

Net Sales
Stocks
December 1938
Dec. 31, 1938
comp. with
comp. with
Dec.
Nov. Dec. 31
Nov. 30
1937
1938
1937
1938

l in e s

Shoes (3) ................. .
Drugs (10) .....................
Dry Goods (6) .............
Electrical Goods ( 11) .
Groceries (59) ...............
Hardware (20) ...........
Industrial Supplies (11)
Plumb’g & Heating (5)
Paper & Products (9).
Tobacco & Products (9)
Miscellaneous (25) . . .
All Firms (168) . . . .

4-62
+ 2
+ 4
+ 22
— 7
+ 4
+ 1
— 7
+ 4
+ 10
+ 6
+ 3

— 33
+ 11
— 29
— 15
— 4
— 11
— 14
— 14
+ 9
— 5
0
— 7

— ii
— 28
— 8
-1 5
0
— 24
— 3
— 8
+ 2
— 14
— 12

+ *7
— 16
— 2
— 8
+ 2
— 1
— 5
+ 16
-1 4
+ 10
0

Ratio Dec.
collections
to accounts
outstanding
Dec. 1
58
108
47
75
92
52
66
54
58
91
68
68

Note: Wholesale figures are supplied by the Department of Commerce.

A G R IC U L T U R A L S T A T IS T IC S
There is included elsewhere in the R eview a table show­
ing production figures for leading Fifth district crops,
arranged by states, in which 1938 yields are compared
with those for 1937 and the average for ten years 19271936. Farm value figures as estimated by the Depart­
ment o f Agriculture are also included, but it should be
noted that they do not represent receipts by farmers for
their crops, since they include the value o f all products
consumed on the farms as well as those sold.
The table shows that yields o f all crops except sweet
potatoes and oats were smaller in 1938 than in 1937, but
all except cotton, Irish potatoes and commercial apples
exceeded average yields in the ten year base period.
Prices in 1938 were in most instances somewhat lower
than in 1937, and the farm value o f every crop was less
in the later year, the aggregate decline for the 10 leading
crops totaling 17 per cent.

MONTHLY REVIEW

6
Yrs.

Maryland

Virginia

W . Virginia

1938
1937
Av. 1927-1936

18,537,000
18,576,000
15,477,000

34,775,000
37,740,000
32,199,000

12,640,000
14,245,000
12,104,000

CROPS
Corn (bus.) ................. ...............

Hay

(tons)

$ 85,294,000
94,735,000

400,000
780,000
710,000

650,000
1,0(23,000
798,000

1,065,000
1,846,000
1,548,000

$ 46,970,000
79,055,000

105,459,000
109,769,000
99,838,000

3,190,000
3,552,000
3,304,000

519,230,000
595,530,000
481,939,000

98,430,000
108,080,000
76,724,000

755,559,000
840,381,000
687,365,000

$167,794,000
191,138,000

...............

1938
1937
Av. 1927-1936

2,990,000
3,480,000
3,348,000

10,349,000
10,920,000
12,998,000

2,720,000
3,264,000
3,150,000

8,690,000
9,588,000
7,729,000

2,784,000
3,120,000
2,419,000

27,533,000
30,372,000
29,644,000

17.776.000
19.315.000

1938
1937
Av. 1927-1936

1,040,000
1,000,000
1,205,000

3,570,000
5,070,000
4,282,000

8,748,000
7,680,000
7,915,000

6,468,000
5,130,000
4,898,000

19,826,000
18,880,000
18,300,000

12,812,000
13,161,000

............. .................

1,312,000
1,083,00|0
1,407,000

1,978,000
1,680,000
2,389,000

1,806,000
1,700,000
2,366,000

5,566,000
4,830,000
3,682,000

10,648,000
10,076,000
8,316,000

21,310,000
19,369,000
18,160,000

8,711,000
10,750,000

........ .................

9,420,000
9,044,000
8,372,000

8,526,000
9,720,000
8,598,000

2,340,000
2,736,000
1,855,000

5,440,000
5,817,000
4,275,000

1,771,000
1,516,000 ,
974,000

27,497,000
28,733,000
24,074,000

19.520.000
30.806.000

........... .................

543,000
518,000
468,000

1,138,000
1,206,000
907,000

802,000
741,000
661,000

863,000
824,000
630,000

431,000
501,000
309,000

3,777,000
3,790,000
2,975,000

44.592.000
48.456.000

249,075,000
297,500,000
228,960,000

9,100,000
8,030,000
8,539,000

404,185,000
488,995,000
382,787,000

14.523.000
16.233.000

11,780,000
18,516,000
12,882,000

8,270,000
10,656,000

Sweet Potatoes (bus.)

(bus.)

F a r m V a lu e

139,117,000
140,863,000
121,728,000

29,250,000
23,450,000
25,560,000

1938
1937
Av. 1927-1936

Irish Potatoes (bus.)

Wheat

District

26,767,000
24,945,000
21,161,000

.................

(lbs.)

Oats (bus.)

S. Carolina

46,398,000
45,357,000
40,787,000

15,000
43,000
40,000

1938
1937
Av. 1927-1936

Cotton (bales) ........... .................

Tobacco

N . Carolina

1938
1937
Av. 1927-1936
1938
1937
Av. 1927-1936

1938
1937
Av. 1927-1936

146,010,000
183,465,000
145,288,000

.................

1938
1937
Av. 1927-1936

Apples, Commercial (bus.)

1938
1937
Av. 1927-1936

1,350,000
1,750,000
1,266,000

6,800,000
10,391,000
7,609,000

480,000
875,000
597,000

3,150,000
5,500,000
3,410,000

(Compiled January 21, 1939)

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

INDUSTRIAL PRODUCTION

V olum e o f industrial produ ction declined seasonally in D ecem ber and
show ed little change in the first three w eeks o f January, w hen an increase is
usual. W holesale com m odity prices w ere steady.
E m ploym en t and payrolls
increased fu rther in D ecem ber, and retail sales show ed m ore than the usual
seasonal rise.

PRODUCTION

Index of physical volume of production, adjusted
for seasonal variation, 1923-1925 average=100.
By months, January 1934 to December 1938.




In D ecem ber volum e o f industrial p rod u ction declined b y about the usual
seasonal am ount arid the B oa rd ’s adju sted in d e* was at 104 percen t o f the
1923-1925 average, a b ou t the level reached in N ovem ber fo llo w in g an ex cep ­
tion a lly rapid advance a fte r the m iddle o f the year.
Changes in output in
m ost lines in D ecem ber w ere largely seasonal. In the steel industry, how ever,
p rodu ction showed a greater than seasonal decline, and averaged 54 percen t
o f capacity in D ecem ber as com pared w ith 61 p ercen t in N ovem ber. Lum ber
production showed little change fro m N ovem ber to Decem ber, although usually
there is a decline, and at textile m ills and shoe fa cto rie s activity declined less
than seasonally.
A t m eat-packing establishm ents there was a red u ction in
output.

7

MONTHLY REVIEW
FACTORY EMPLOYMENT

A u tom obile production increased som ew hat fu rth er in D ecem ber. In the
fou rth quarter o f 1938 production and sales o f the new m odel cars w ere in
ab ou t the same volum e as in 19 37 ; dealers’ stocks o f new cars increased season­
ally in this period but at the year end w ere m uch b elow the high level o f a
year earlier.
V alue o f construction con tra ct aw ards in creased con siderably fr o m N o­
vem ber to D ecem ber, accord in g to F. W . D odge C orporation figures f o r 37
Eastern States. The increase reflected prin cip ally a fu rth er rise in contracts
aw arded f o r Public W ork s A dm inistration p rojects, w hich accou n ted f o r m ost
o f the sharp increase in aw ards that occu rred in the last h a lf o f 1938. C on­
tracts f o r private residential building decreased less than seasonally in D ecem ber,
while oth er private construction show ed little change and rem ained a t a low
level.

EMPLOYMENT
Index of number employed, adjusted for season­
al variation, 1923-1925 average=100. By months,
January 1934 to December 1938.

WHOLESALE PRICES

E m ploym en t and p a yrolls rose fu rth er betw een the m iddle o f N ovem ber
and the m iddle o f D ecem ber. In m ost m a n u factu rin g lines the num ber em ployed
continued to increase, w hen allow ance is m ade f o r the usual seasonal changes,
and in the autom obile and m achinery industries the rise w as considerable. Em ­
ploym en t and payrolls in trade increased m ore than is usual in the h oliday
season and in the construction industry em ploym ent show ed m uch less than
the usual seasonal decline.

DISTRIBUTION
D istribution o f com m odities increased m ore than seasonally in D ecem ber.
Sales at departm ent stores show ed the usual sharp expansion p rior to Christmas
and sales at variety stores and m ail order sales show ed a m ore than seasonal
rise.
F reigh t-car loadings declined seasonally fr o m N ovem ber to D ecem ber, r e ­
flecting la rgely the custom ary decrease a t this tim e o f year in shipm ents o f
m iscellaneous freigh t.
Index compiled by the U. S. Bureau of Labor
Statistics, 1926=100.
By weeks, 1934 to week
ended January 14, 1939.

EXCESS RESERVES OF MEMBER BANKS

BANK CREDIT
A s the result o f the post-holiday retu rn o f m on ey fr o m circu lation , to ­
geth er w ith Treasury disbursem ents fr o m its balances w ith the R eserve banks,
and gold im ports, excess reserves o f m em ber banks increased n early $600,000,000 in the fo u r weeks ending January 18 to a n ew high level o f $3,560,000,000.
A large part o f the increase occu rred at N ew Y o rk C ity banks.
T ota l loans and investm ents o f rep ortin g m em ber banks in 101 leading
cities, w hich increased substantially in the first three w eeks o f D ecem ber, de­
clined in the follow in g fo u r weeks. There w as some decline in loans and a
reduction in holdings o f U nited States G overnm ent obligations, reflectin g in
part distribution to the pu blic o f new securities purchased b y banks in D ecem ber.
D eposits declined som ew hat in the latter part o f D ecem ber bu t increased in
January.

MONEY RATES AND BOND YIELDS

Wednesday figures of estimated excess reserves
for all member banks and for selected New York
City banks, January 3, 1934, to January 18, 1939.




A v era ge yields on U nited States G overnm ent securities declined slightly
in D ecem ber and the first three w eeks o f January. F o r three consecu tive w eeks
the entire new issue o f 91-day T reasu ry bills sold on o r slightly above a n o ­
yield basis. C om m ercial paper rates declined slightly in January w hile oth er
open-m arket m on ey rates continued unchanged.