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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.
