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MONTHLY REVIEW o f Financial and Business Conditions F if t h FEDERAL Reserve D is tr ic t January 31, 1940 Federal Reserve Bank, Richmond, Va. Annual Survey for 1939 per cent, respectively. Employment in both the number employed and total payrolls showed substantial improve ment throughout 1939. In agriculture, farmers had a better year than in 1938, yields and prices both being higher for most crops in the later year. Tobacco prices showed the most marked decline, but a record production offset the price drop and total receipts for the 1939 crop will approximately equal receipts for the 1938 crop. Pur chasing power o f farmers on the whole was appreciably higher in 1939 than in 1938, and this fact undoubtedly accounts in part for good results shown in distributive lines o f trade. U S IN E S S and industry in the Fifth Federal Reserve district continued through 1939 the improvement which began shortly after midyear in 1938, and results attained were materially better than those for the earlier year. Construction work not only exceeded 1938 work, but was also greater than for any other year since 1929. City building permits issued in 1939 exceeded 1938 per mits by 35 per cent, and contracts awarded for all types o f work, both rural and urban, were 16 per cent higher. The cotton textile industry was very active in the dis trict in 1939, and consumed more cotton than in any earlier year, while rayon mills shipped the largest pound age o f yarn since the industry began. Rayon mills, though operating at capacity, were unable to keep pro duction up to shipments in the last half o f 1939, and reserve stocks were reduced almost to the vanishing point. Tobacco manufacturing exceeded that o f 1938 in all lines except smoking and chewing tobacco. Cigarettes, o f which the district makes more than 80 per cent, rose 5 per cent in output in 1939 over 1938. Debits to indi vidual accounts, reflecting transactions through the banks in 12 principal Fifth district cities, gained 6 per cent in comparison with 1938 debits. Commercial failures were fewer in number and lower in liabilities last year than in the preceding year. Sales o f new automobiles rose 41 per cent in 1939 over 1938, and retail trade as reflected in department and furniture stores rose 4 per cent and 10 B DECEMBER BUSINESS Considering specific developments in December, the month showed some seasonal recessions from other recent months, but the lines usually active in December did a large volume o f business. Retail trade was somewhat above seasonal levels, department store sales rising 68 per cent above November sales and exceeding December 1938 sales by 4 per cent. Furniture sales were 13 per cent above December 1938 sales, and automobile sales were 3 per cent higher than in the final month o f 1938. Construction provided for in December permits and con tracts compared unfavorably with December 1938 figures, but this was due in part to high 1938 figures and very bad weather last month. BUSINESS S T A T IS T IC S -F IF T H FEDERAL RESERVE DISTRICT Debits to individual accounts (25 cities)....... Sales, 31 department stores, 5th district....... Sales, 38 furniture stores, 5th district............... Sales, 169 wholesale firms, 5th district............. Registrations, new autos, 5th district............... T obacco sold in 5th district (P ou nds)............ Growers' receipts from tobacco, 5th district. Average price o f tobacco, per 100 pounds....... Number o f business failures, 5th district....... Liabilities in failures, 5th district....................... Value o f building permits, 31 cities................ Value o f contracts awarded, 5th district....... Cotton consumption, 5th district (B ales)......... Cotton price, cents per lb., end o f month....... Print cloths, 3 8 ^ in., 64x60s, end o f month.... Rayon yarn shipments, U. S. (Pounds)........... Rayon yarn stocks, U. S. (P ou nds).................. Bituminous coal mined, U. S. (T ons)............. December 1939 $1,530,670,000 $ 19,161,614 1,682,668 $ 9,308,000 $ 19,330 $ $ $ $ $ 78,350,037 10,387,046 13.26 43 540,000 5,280,866 22,358,000 307,369 10.93 5.50 30,900,000 6,800,000 37,283,000 November 1939 $1,351,579,000 $ 11,391,091 $ 10,745,000 17,380 260,664,844 44,258,844 16.98 30 289,000 $ 8,947,654 $ $ 24,056,000 341,096 9.92 5.13 32,800,000 7,600,000 42,835,000 $ $ December 1938 $1,425,494,000 $ 18,410,346 1,488,386 $ 8,818,000 $ 18,853 $ $ $ $ $ % Change Month Year + 7 + 13 + 68 + 4 + 13 — 13 4- 6 4- 3 + 11 29,822,668 4,648,548 15.59 48 934,000 8,387,203 — — — + + — 70 77 22 43 87 41 +163 +123 — 15 — 10 — 42 — 37 38,201,000 266,650 8.60 4.38 26,200,000 39,500,000 36,541,000 — — + + — — — 7 10 io 7 6 11 13 — + + + 4— + 41 15 27 26 18 83 2 MONTHLY REVIEW 2 SE A SO N AL CHANG ES IN RESERVE BAN K STATEM EN T M EM BER BANK ITEM S C H A N G E LIT T L E N o change o f special significance occurred in the state ment of the Federal Reserve Bank of Richmond between December 15, 1939, and January 15, 1940. Circulation o f Federal Reserve notes declined seasonally by $9,687,000 after the holiday need for funds had passed, and member bank reserve deposits rose by $9,160,000. G ov ernment security holdings declined $4,321,000, and cash reserves rose $4,272,000. On January 15 this year notes in actual circulation exceeded those in circulation a year ago by $19,226,000, probably reflecting a more active flow o f business and trade this year. Member bank reserve deposits rose by $40,810,000 during the year, and the R e serve bank's cash reserves increased by $66,201,000. Forty-one member banks in 12 leading cities o f the Fifth district make a condensed report o f condition each week to the Federal Reserve Bank o f Richmond, and the accompanying table shows principal items for January 10, 1940, in comparison with corresponding figures on De cember 13, 1939, and January 11, 1939. Most o f the changes last month were either seasonal or daily fluctu ations, but the yearly comparisons show material increases m both loans and investments, in reserve balances at the Reserve bank, and in demand deposits. SELECTED ITEMS— 41 REPORTING BAN KS Fifth District ITEMS RESERVE BANK STATEMENT ITEMS Fifth District ITEMS Discounts held .............................................. Foreign loans on gold ............................... Open market paper .................................... Industrial advances .................................... Government securities ............................. Total earning assets ............................. Circulation of Fed. Res. notes ............... Members’ reserve deposits ..................... Cash reserves .............................................. Reserve ratio ................................................ 000 omitted Jan. 15 Dec. 15 1940 1939 $ 122 216 0 942 125,583 $126,863 221,031 288,976 430,976 77.57 Jan. 15 1939 $ 109 $ 337 208 0 0 24 950 1,466 129,904______134,019 $131,171 $135,846 230,718 201,805 279,816 248,166 426,704 364,775 76.58 73.36 In 1939, the Federal Reserve Bank of Richmond han dled a total o f 76,814,000 checks in its clearing operations, having a total face value o f $13,720,123,000. This is the highest number o f checks handled in any year since the Reserve System began, but larger dollar amounts were handled in 1929, 1928, 1926 and 1925. Currency and coin handled in 1939 also exceeded the volume handled in 1938, and transactions through the Interdistrict Settlement Fund in which the Richmond bank was involved exceeded in amount those o f the earlier year. The following banks in the Fifth district became members o f the Federal R e serve System in 1939: Merchants & Farmers Bank............................................ Portsmouth, Va. Southern Bank & Trust Co................................................ Richmond, Va. Commercial Bank of Camden.............................................. Camden, S. C. Belington Bank ............................................................. Belington, W . Va. Bank of Phoebus......................................................................... Phoebus, Va. Farmers Bank of Mathews.................................................. Mathews, Va. Bank of Smithfield.................................................................Smithfield, Va. Security Savings & Commercial Bank...................Washington, D. C. City National Bank of Fairmont................................Fairmont, W . Va. Citizens Bank of Poquoson............................................................. Odd, Va. M U T U A L SAVINGS A T RECO RD L E V E L Deposits in 10 Baltimore mutual savings banks in creased in December to a new record o f $222,060,975, after a small seasonal decline in November. W ith only occasional small recessions, deposits showed a steady rising tendency during 1939. In January and February total deposits were lower than in the corresponding months in 1938, but every month after February showed higher fig ures than a year earlier and new records were set on March 31, April 30, October 31 and December 31. Be tween December 31, 1938, and December 31, 1939, aggre gate deposits in the 10 banks rose from $219,160,622 to $222,060,975, an increase o f 1.3 per cent. Eight banks gained deposits during the year 1939, while two banks lost deposits, percentage changes ranging from a rise o f 14.1 per cent in a small institution to a decline o f 3.4 per cent. Loans & discounts ................... Investments in securities . .. Reserve bal. with F. R. bank Cash in vaults ............................ Demand deposits ................... Time deposits ............................ Money borrowed ....................... 000 omitted Jan. 10 Dec. 13 1940 1939 $262,031 455,811 189,559 23,762 526,599 198,300 0 $264,576 449,111 192,636 24,813 540,913 196,702 0 J a n .11 1939 $238,628 425,546 166,196 20.364 474,842 196,136 0 E M PLO Y M E N T DECLIN ES M O D E R A T E L Y It is customary for employment to decline sharply in the second half o f December, part o f which is temporary. Immediately after Christmas many extra employees are released by retail establishments, and holiday shut-downs reduce employment and payrolls in industry and tobacco marketing. These shut-downs last from two or three days to two weeks. In addition to the normal influences mentioned, this year the weather after Christmas in a considerable part o f the Fifth district was so unfavorable that outside construction work was practically stopped, and building tradesmen found their January pay envelopes materially reduced. However, industries are active and a large volume o f construction work is under way, and when the weather permits employment will be about up to the levels o f recent months except in retailing and tobacco marketing, both relatively small factors in affecting total employment. During the calendar year 1939, employ ment appears to have risen something like 12 per cent in the Fifth district, while aggregate payrolls advanced about 21 per cent. The following figures, compiled by the Bureau o f Labor Statistics from records submitted by a large num ber o f identical employers, show trends o f employment and payrolls in the Fifth district from November to De cember . Percentage change from Nov. 1939 to Dec. 1939 in number in amount on payroll of payroll STATES Maryland ............... Dist. of Columbia Virginia ................. West Virginia . . . North Carolina .. South Carolina . . + . 2.8 - f 5.0 + 0.3 — 0.3 + 0.1 — 0.7 + 444- 1.0 3.1 1.8 8.3 1.2 0.5 IN SOLVEN CIES RISE IN DECEM BER Fifth district commercial failures in 1939, as reported by Dun & Bradstreet, declined 14 per cent in number and 21 per cent in liabilities involved in comparison with fig ures for 1938, compared with decreases in the United States o f 8 per cent in number and 32 per cent in liabili ties. The district showed increases in both number and liabilities in December 1939 over November, while the 3 MONTHLY REVIEW United States showed a decline in number but an increase in liabilities involved. Number of Failures District U. S. PERIODS December 1939 ..................... November 1939 ..................... December 1938 ..................... Calendar Year 1939 ........... Calendar Year 1938 . . ___ .. . 43 30 48 552 639 882 886 875 11,781 12,836 DEBITS A D V A N C E Total Liabilities District U. S. $ 540,WO 289,000 934,000 $6,357,000 8,052,000 $ 12,078,000 11,877,000 36,528.000 $168,589,000 246*505,000 SE A SO N A LLY Debits to individual accounts, measuring checks cashed against deposit accounts o f individuals, firms and corpo rations in 25 Fifth district cities, rose seasonally by 13 per cent in December in comparison with November, and were 7 per cent higher than December 1938 figures. All cities reported higher figures for December than for N o vember except Danville, Durham and Richmond, the first two declining because tobacco markets were closed about ten days in the later month. In comparison with debits in December 1938, those in December 1939 increased in all but three cities, and two o f the three declined less than 5/10th o f 1 per cent. In the calendar year 1939 debits in the 25 cities rose 6 per cent over 1938 figures, every city increasing except Durham, and total debits were higher in every month of 1939 than in the corresponding month o f 1938. Newport News with an increase o f 21 per cent led all cities, due to increased payrolls incident to a large volume o f work in the ship building industry. A U T O SALES A D V A N C E FU R TH E R Sales o f new passenger automobiles in the Fifth dis trict in December 1939 exceeded sales in December 1938 by 3 per cent and sales in December 1937 by 31 per cent. Sales in the past three years followed an interesting course. In 1937 they were very large through August, but in September a steady decline set in and ran through February 1938. From December 1937 through October 1938 sales ran far behind those for corresponding months of the preceding year. In November 1938, however, sales suddenly rose to the highest point o f the year to that time, and in December went still higher. Moderate seasonal recessions followed in January and February 1939, but in March sales advanced sharply and in April the highest point o f the year was reached. From that point to the end o f the year sales were steady, with only one material decline which occurred in September when buyers were awaiting new models. The new models were well received, and in the last three months o f 1939 sales were 21 per cent higher than in the same period in 1938 and 16 per cent above sales in the 1937 period. The year 1939 exceeded 1938 in sales by 41 per cent, but lacked 17 per cent o f equaling 1937 figures, due to very large sales in the spring and early summer o f 1937. REGISTRATION OF N E W STATES Maryland ........... Dist. of Col. . . . West Virginia . . No. Carolina . . . So. Carolina . . . District . . . . . . PASSENGER CARS— NUMBER Dec. 1939 Dec. 1938 % Change 3,696 2,116 3,830 2,147 5,446 2,095 19,330 3,427 2,143 3,766 1,757 5,767 1,993 18,853 + 8 — 1 + 2 -f- 22 — 6 + 5 + 3 12 Months 12 Months % 1939 1938 Change 39,389 25,637 42,172 22,955 46,160 25,100 201,413 27,331 17,944 31,204 16,483 33,922 15,748 142,632 + 44 + 43 + 35 + 39 +36 + 59 + 41 DEBITS TO INDIVIDUAL ACCOUNTS December 1938 % Change Month Year December 1939 November 1939 $ 433,143,000 9,350,000 9,734,000 $ 354,795,000 8,509,000 8,541,000 $ 384,745,000 8,458,000 9,360,000 + 22 + 10 + 14 + 13 + 11 + 4 301,770,000 263,313,000 298,121,000 + 15 + . ........ . .. ................. Lynchburg ............................... Newport News ....................... ......... ......... Norfolk ................... .............. Portsmouth ................................... ................. . . . . . .... Richmond .................... Roanoke ................. ........................ .................. 15,161,000 16,930,000 12,933,000 58,812,000 5,393,000 183,817,000 31,490,000 19,735,000 15,121,000 11,600,000 52,022,000 4,578,000 186,398,000 28,182,000 11,792,000 16,439,000 10,411,000 56,963,000 5,414,000 182,564,000 29,305,000 W est Virginia ................. Huntington . . ........ ...................... ................. Parkersburg ................................. ................. 59,733,000 20,640,000 15,220,000 52,200,000 18,024,000 9,480,000 North Carolina Asheville ........................... ............ .................. Charlotte ........................... ............ ........ .. Durham ................... ...... ............... ................. ................... Raleigh ............................................ Wilmington ................................... ........ .......... Winston-Salem ............................. ................... 14,281,000 75,215,000 37,117,000 24,271,000 57,414,000 12,337,000 49,037,000 South Carolina Charleston ..................................... ................. .................. Columbia ........................... .. Greenville ..................................... . .. ............. Spartanburg ................................. ................... District Totals ......................... . . . . . . . . . . CITIES Maryland Baltimore ........................... . . . . . ........ .. ................. ................. Hagerstown ......................... Annual Totals 1939 Annual Totals c/o 1938 Change $ 4,181,609,000 97,124,000 102,412,000 $ 3,926,328,000 88,516,000 97,633,000 1 3,173,685,000 2,966,804,000 + — 23 + 12 + 11 + 13 + 18 — 1 + 12 + 29 + 3 + 24 + 3 0 + 1 + 7 118,345,000 170,287,000 118,554,000 588,452,000 52,006,000 1,878,864,000 318,196,000 118,278,000 170,148,000 97,881,000 549,644,000 49,246,000 1,866,125,000 290,520,000 0 0 + 21 -4- 7 + 6 + 1 + 10 54,832,000 18,662,000 10,317,000 + 14 + 15 + 61 + 9 + 11 + 48 561,194,000 197,070,000 117,881,000 542,757,000 191,678,000 106,973,000 + 3 + 3 + 10 11,855,000 66,978,000 40,469,000 22,802,000 43,386,000 10,997,000 45,559,000 14,068,000 65,642,000 32,511,000 22,092,000 49,617,000 11,342,000 49,147,000 + 20 + 12 — 8 + 6 + 32 + 12 + 8 + + + + + + 2 15 14 10 16 9 0 146,133,000 738,360,000 382,246,000 234,874,000 513,328,000 129,745,000 485,111,000 139,591,000 637,201,000 390,426,000 20<6,528,000 470,873,000 125,109,000 465,338,000 + 5 + 16 — 2 + 14 + 9 + 4 + 4 21,849,000 29,444,000 22,449,000 13,130,000 17,760,000 28.338,000 19,711,000 11,226,000 19,082,000 31,598,000 22,069,000 10,943,000 + 23 + 4 + 14 + 17 + 15 — 7 + 2 + 20 212,501,000 325,013,000 229,312,000 122,974,000 191,341,000 294,721,000 206,938,000 104,893,000 + 11 + 10 4-11 + 17 $1,530,670,000 $1,351,579,000 $1,425,494,000 + 13 + $15,195,276,000 $14,295,490,000 + 7 + 10 + 5 Dist. of Col. ............... 7 Virginia 0 indicates a change of less than of 1 per cent. 7 + 6 4 MONTHLY REVIEW C O A L PRO D U CTIO N A B O V E 1938 CONSTRUCTION CONTRACTS AWARDED (In thousands of dollars) Bituminous coal production in the United States con tinued high in December, 37,869,000 net tons mined ex ceeding output of 36,541,000 tons in December 1938 by 3.6 per cent. In the Fifth district, December production o f 10,918,000 tons was 5.2 per cent above 10,381,000 tons in December 1938. Total production in 1939 was 119,226,000 tons in the district and 388,265,000 tons in the United States, compared with production o f 106,566,000 tons in the district and 342,407,000 tons in the Nation in 1938. Production was higher in both the district and the United States in every month of 1939 than in 1938 except in April and May, when mines in the Appalachian region were closed pending renewal o f wage contracts which expired on April 1. Hampton Roads ports shipped 20,107,806 tons o f coal in the calendar year 1939, an in crease of 18 per cent over 17,007,212 tons shipped in 1938. Production figures for Fifth district states in 1939 and 1938 were as follow s: SOFT COAL PRODUCTION IN TONS STATES West Virginia ....................... Virginia .................................. Maryland ................................ 5th district ......................... United States ..................... Year 1939 Year 1938 104,722,000 93,037,000 13,100,000 12,243,000 1,404,000_________ 1,286,000 119,226,000 106,566,000 388,265,000 342,407,000 C O N STRU C TIO N A C T IV E IN % Change +13 + 7 + 9 +12 +13 1939 A seasonal decline occurred in December in permits issued and contracts awarded in the Fifth district. Build ing permits issued in 31 cities totaling $5,280,866 were 41 per cent less than the total o f $8,947,654 in November 1939 and 37 per cent below the total o f $8,387,203 in December 1938. Washington, with permits aggregating $2,420,925 in December 1939, led all Fifth district cities by a wide , margin, Baltimore ranking second with only $765,455, N orfolk third with $242,058, Richmond fourth with $234,413, and Greensboro fifth with $201,794. Look ing at the year's record, however, permits issued in 1939 amounting to $119,497,614 show an increase o f 35 per cent over permits valued at $88,609,428 in 1938. Nine teen o f the 31 cities show higher totals for 1939 than for 1938. Contracts awarded for construction o f all kinds in the district in December totaled $22,358,000, decreases o f 7 per cent from $24,056,000 awarded in November 1939 and o f 41 per cent from $38,201,000 in December 1938. On the other hand, contracts awarded during the entire year totaled $377,471,000, an increase of 16 per cent over conracts awarded in 1938 amounting to $325,692,000. Awards were larger in all 1939 months except August, October, November and December than in the correspond ing months o f 1938, reaching the highest point o f the year with $46,154,000 in June. During 1939 residential construction accounted for 38 per cent o f all contracts awarded, compared with 37 per cent in 1938. In the last quarter o f 1938 a large volume o f publicly financed pro jects was started, but activity o f this kind was materially reduced in the fourth quarter o f 1939, thus accounting for the decline in contracts awarded in October, Novem ber and December. Contract figures for Fifth district states, as reported by the F. W . Dodge Corporation, were as follows in 1939 and 1938: STATES Dec. 1939 Maryland ........... Dist. of Col. . . . Virginia ............. West Virginia . . No. Carolina . . . So. Carolina . . . 5th District . . Dec. 1938 % Change Year 1939 Year 1938 % Change $ 5,088 $11,907— 57 $ 80,833 $ 72,528 2,851 2,893 — 1 77,175 46,437 5,085 8,410 — 40 78,502 80,645 1,132 5,888 — 81 31,482 29,630 6,354 6,257 + 2 68,402 61,638 1,848 2,846 — 35 41,077 34,814 $22,358 $38,201 — 41 $377,471 $325,692 +11 +66 — 3 + 6 +11 +18 +16 VA L U A TIO N OF BUILDING PERMITS ISSUED CITIES 1939 1938 Baltimore ........................................ Cumberland .................................... Frederick ........................................ Hagerstown .................................... Salisbury ........................................ Maryland $ 16,056,079 811,792 796,122 905,984 526,310 $ 16,291,320 333,714 349,637 432,701 478,541 Virginia Danville .......................................... Lynchburg ...................................... Norfolk .......................................... Petersburg ...................................... Portsmouth .................................. ; Richmond ...................................... Roanoke .......................................... 811,647 1,318,552 3,310,410 222,532 515,665 7,222,627 1,260,064 638,144 1,037,782 4,581,111 308.108 543,189 4,524,045 1,104,865 West Virginia Bluefield .......................................... Charleston ...................................... Clarksburg . .................................. Huntington .................................... 475,156 5,383,480 819,059 3,390,161 466,725 2,956.660 381,975 1,362,664 North Carolina Asheville .......................................... Charlotte ........................................ Durham .......................................... Greensboro ...................................... High Point .................................... Raleigh ............................................ Rocky Mount .................................. Salisbury.......................................... Winston-Salem .............................. 998,298 4,040,962 2,467,090 2,068,536 640,456 3,017,020 742,475 316,365 2,261,748 769,748 2,807,592 2,954,914 1,866,048 1,074,828 3,848,382 789,203 495,470 2,394,364 South Carolina Charleston ...................................... Columbia ........................................ Greenville ........................................ Rock Hill ...................................... Spartanburg .................................. 2,825,978 4,310,749 726,093 623,382 856,440 2,148,495 1,714,236 1,019,953 1,051,101 705,965 Dist. of Col. Washington ..............................................................49,776,379___________ 29,177,948 District Totals ............................................... $119,497,614___________ $ 88.60^,428 Note: Valuation figures for Washington do not include Federal buildings. 1939 R A Y O N SHIPMENTS SET RECO RD Rayon Organon for January states that the rayon mar ket during 1939 was maintained at the highest level in the history o f the industry. Shipments during the first half o f the year were well maintained, but did not appre ciably reduce reserve stocks o f yarn in producers’ hands. Shortly after midyear, the market entered a period o f sus tained activity, and shipments exceeded production by so much that reserve stocks o f yarn declined from 32,600,000 pounds on June 30 to 6,800,000 pounds at the end of the year. Shipments during the last half o f 1939 reached a new all-time high level for any consecutive six-month period in the 28 years o f the rayon industry's commercial operation. Reasons listed for this marked rise in demand for rayon are the general improvement in business, a nor mal seasonal increase in yarn demand, the initial impetus given to textile activity at the outbreak o f the war, in creased consumer purchasing power, and expanding retail sales, and finally a wave o f buying by fabricators in an ticipation o f rising costs o f rayon production with conse quent higher yarn prices. Further, extensive replacement o f silk by rayon occurred in 1939, especially in underwear, dresses and hosiery; increased use o f rayon was made in MONTHLY REVIEW brushed-type knitted garments for women's w ear; and greater use in automobile tires and other industrial pro ducts was noted. Production figures are not yet avail able for 1939, but shipments of 356,000,000 pounds o f rayon during the year not only exceeded 1938 shipments o f 274,100,000 pounds by 30 per cent, but were 20 per cent above the previous record shipments of 297,000,000 pounds in 1936. C O TTO N CO N SU M PTIO N SET RE CO RD IN 1939 Activity at cotton textile mills continued at a very high rate in the first half of December but slackened somewhat toward the end o f the month and in early January. ClotH woven by the mills was in excess of shipments/and in the first half of January there were some recessions in cloth prices. Yarn, however, continued firm and in better demand than cloth. Mill margins dropped in December, averaging 13.6 cents against 14.9 cents in November, but were substantially above the average o f 10.7 cents in December 1938. On a daily basis, cotton consumption in Fifth district mills in December was about equal to November figures. Due to holiday closings, however, total consumption in December was 10 per cent less than in the preceding month ,but exceeded December 1938 consumption by 15 per cent. Total consumption in Fifth district mills in 1939 was 22 per cent above 1938 con sumption, and set a new record, exceeding the previous high o f 3,513,067 bales used in 1937 by 4,261 bales. COTTON CONSUMPTION— FIFTH DISTRICT In Bales MONTHS December 1939 ................... November 1939 ................... December 1938 .................... 12 months, 1939........ .. 12 months, 1938................... No. Carolina So. Carolina 172,881 124,987 191,192 136,222 145,327 112,245 1,941,541 1,542,706 1,433,603 1,196,000 Virginia 9,501 13,682 9,078 142,184 137,224 District 307,369 341.096 266.650 3,517,328 2,875,930 A report on spindle activity in December, released by the Bureau of the Census on January 19, shows South Carolina in second place with an average o f 366 hours o f operation per spindle in place, and North Carolina aver aging 330 hours, both above the National average o f 322 hours. Virginia with 223 hours dropped behind the National average. South Carolina led in total spindle hours of operation in December with 2,037,897,258 hours, while North Carolina was second with 1,920,251,812 hours, the two states, with the addition o f 142,827,710 hours for Virginia, accounting for 51 per cent o f the United States total of 8,039,846,023 hours o f operation. CO TTO N PRICES A N D EXPO RTS RISE Spot cotton prices on 10 Southern markets, which had risen to an average of 10.92 cents for middling grade on December 15, averaged 10.93 cents on December 29, the highest figure o f the year, but in the next two weeks a decline occurred to 10.81 cents on January 12. On Janu ary 13, 1939, the average price was 8.49 cents. Appar ently the chief influence tending to raise cotton prices in November and December was a desire to take advantage o f export subsidy rates before they were substantially reduced or abolished. Exports o f cotton in December 5 totaled 806,720 bales, more than double 368,043 bales shipped abroad in December 1938, and total exports since August 1, 1939, o f 3,143,395 bales compare with 1,902,367 bales exported in the last 5 months o f 1938. COTTON CONSUMPTION AND ON HAND— BALES Dec. 1939 Dec. 1938 307,369 266,650 1,566,475 1,348,619 Cotton consumed . . . . ............... 555,756 480,220 Cotton on hand Dec. 31 in Consuming establishments . . 1,593,624 1,482,737 Storage & compresses ........... 14,531,828 15,280,678 2,811,574 2,370,944 3,311,702 2,798,708 Aug. 1 to Dec. 31 1939 1938 Fifth district states: Cotton consumed . Cotton growing states: United States: Cotton consumed ....................... 652,695 565,627 Cotton on hand Dec. 31 in Consuming establishments . . 1,859,664 1,700,877 Storage & compresses ........... 14,581,642 15,339,729 Exports of cotton ........................... 806,720 368,043 ................................ .......... 3,143,396 Spindles active, U. S...................... 22,777,936 22,432,648 1,902,367 .......................... .. . . TO BAC CO PRICES D ECLIN E IN DECEM BER Auction sales o f tobacco in the Fifth district in De cember totaling 78,350,037 pounds were unusually large for that month, but selling o f the 1939 crop was delayed by the market shut-down from September 13 to October 10. The better grades o f tobacco having been sold earlier, prices in December showed the customary season-end de cline. Sales this season prior to December 31 reflected the very large production for 1939, and totaled nearly 45 per cent more than sales in 1938 prior to December 31, but the effect o f the large crop on prices was also shown by a reduction o f 31 per cent in the average paid in 1939 from the 1938 price. Producers’ Tobacco Sales, Pounds December 1939 December 1938 STATES No. Carolina ............... .. N. C. season to 1 2 /3 1 .. Virgiiiia (Flue cured) (Fire cured). (Burley) (Sun cured). Virginia, Total ............. Va. season to 12/31. .. So. Carolina, Season.. District, December . . . . District, Season to 12/31 47,396,442 740,954,145 20,333,687 5,000,323 5,109,250 510,335 30,953,595 126,710,735 117,217,526 78,350,037 £84,882,406 13,555,897 498,445,541 6,847,356 4,326,893 4,516,608 575,914 16,266,771 95,908,044 86,670,522 29,822,668 681,024,107 Price per Cwt. 1939 1938 $13.71 15.84 12.33 10.81 15.41 10.52 12.56 15.00 14.56 13.26 15.58 $16.82 22.97 15.90 10.13 17.25 10.92 14.56 21.28 22.24 15.59 22.64 T O BAC CO M A N U F A C T U R IN G DECLINES Production o f tobacco products declined further in De cember, chiefly due to holidays at Christmas. Production figures for December 1939 and 1938 were given by the Bureau o f Internal Revenue as follow s: TOBACCO PRODUCTS MANUFACTURED Dec. 1939 Smoking & chewing tobacco, pounds Cigarettes, number . Cigars, number ___ Snuff, pounds ........... 21,088,322 12,802,800,103 331,203,629 2,968,418 Dec. 1938 Change 23,728,246 12,655,993,013 333,981,623 3,398,232 -1 1 4- 1 — 1 — 13 Total production o f tobacco products in 1939 and 1938 was as fo llo w s: Smoking & chewing tobacco, pounds ............... Cigarettes, number ................. Cigars, number ....................... Snuff, pounds ..................... .. Year 1939 302,777,328 172,421,537,347 5,311,393,887 38,017,336 Year 1938 % 305,926,710 163,758,508,313 5,138,742,434 37,333,930 Change — -f44- 1 5 3 2 MONTHLY REVIEW 6 A G R IC U L T U R E IN 1939 R E T A IL AN D W H O LE SA LE TR A D E DEPARTMENT STORE Net Sales Dec. 1939 comp, with December 1938 + 4.5 Richmond (3) + 6.5 Baltimore (8) + 1.7 Washington (6) . + 6.3 Other Cities (14) + 4.1 District (31) Same stores by states, with 26 stores added: Virginia (13) ----+ 4.5 West Virginia (10) + 6.9 North Carolina (9) + 4.6 South Carolina (11) + 6.1 TRADE Net Sales Year 1939 comp, with same period in 1938 + 4.1 + 4.1 + 4.5 + 5.3 + 4.4 Stocks Dec. 31, 1939 comp, with Dec. Nov. 1938 1939 + 2.6 — 28.5 + 0.2 — 21.8 + 6.0 — 25.0 + 1 3 .0 — 25.2 + 4.2 — 24.4 Ratio Dec. collections to accounts outstanding Dec. 1 33.6 34.7 28.6 31.2 31.4 +4.4 + 4.7 + 5-2 + 9.6 RETAIL FURNITURE SALES ) Change in Sales, December and Year 1939 Compared with Dec. 1938 + 17.3 + 3.1 + 2.7 + 33.0 + 12.2 + 13.0 STATES Maryland, 10 stores ......................... Dist. of Col., 7 stores ..................... Virginia, 10 stores ........................... North Carolina, 3 stores ............... South Carolina, 7 stores ............... 5th District, 38 stores* ............. Individual Cities: Baltimore, 10 stores ......................... Columbia, 3 stores ........................... Richmond, 5 stores ......................... Washington, 7 stores ..................... * Contains 1 store in West Va. + 17.3 + 13.8 + 1.9 + 3.1 Compared with Year 1938 + 10.3 + 5.9 + 5.9 + 20.8 + 24.6 + 10.0 + 10.3 + 2.4 + 1.0 + 5.9 W HOLESALE TRADE, 169 FIRMS Net Sales December 1939 compared with Nov. Dec. 1938 1939 — 12 + 9 — 16 — 57 + 4 + 4 — 10 — 44 + 36 — 6 — 7 + 3 — 19 + 6 + 24 — 18 — 18 + 9 + 10 — 1 — 10 + 3 — 3 + 8 — 13 + 6 LINES Auto supplies (6) ......... Shoes (4) .......................... Drugs (9) ....................... Dry goods (7) ................. Electrical goods (4) . . . Groceries (56) ................. Hardware (18) ............... Indus, supplies (13) . . . Plumbing & heating (5) Paper & products (7) Tobacco & products (6) . Miscellaneous (34) -------5th Dist. Totals (169) Yrs. Maryland Virginia W . Virginia N . Carolina S. Carolina 1939 1938 Av. 1928-1937 18,216,000 18.537.000 15.617.000 36.530.000 34.775.000 32.225.000 13.994.000 12.640.000 12.384.000 48.087.000 46.398.000 41.355.000 25.433.000 26.767.000 21.335.000 142.260.000 139.117.000 122.916.000 $ 96,419,000 83,746,000 12,000 455.000 388.000 702.000 870.000 648.000 827.000 1.337.000 1.048.000 1.569.000 62.159.000 46.328.000 5.000 202,000 172.000 312.000 386.000 288.000 367,000 593.000 466.000 697.000 13.367.000 10.668.000 CROPS Corn (bus.) .................................. Cotton (bales) .............................. 1939 1938 Av. 1928-1937 Cotton Seed (tons) Tobacco ..................... 1939 1938 Av. 1928-1937 2.175.000 2.415.000 3.400.000 773.810.000 516.850.000 493,927,00 130,200,000 98.800.000 79.624.000 1,074,213,000 746.221.000 700.243.000 165.925.000 163.700.000 ............... 1939 1938 Av. 1928-1937 2.375.000 2.990.000 3.257.000 6.786.000 10.428.000 12.352.000 3.040.000 2.720.000 3.109.000 8,200,000 8.690.000 8.028.000 3.108.000 2.760.000 2.476.000 23.509.000 27.588.000 29.222.000 18.535.000 17.526.000 ............. 1.440.000 1.040.000 1.156.000 4.128.000 3.570.000 4.285.000 8.624.000 8.748.000 7.896.000 6.834.000 6.468.000 4.965.000 21,026,000 19.826.000 18.302.000 13.964.000 12.616.000 .................................... 1.128.000 1.312.000 1.364.000 1.600.000 1.978.000 2.287.000 1.460.000 1,80\6*000 2.218.000 5.692.000 5.566.000 3.906.000 11.515.000 10.648.000 8,488,000 21.395.000 21.310.000 18.263.000 8.903.000 8.775.000 7.352.000 9.420.000 8.419.000 7.511.000 8.526.000 8.764.000 2.340.000 1.983.000 5.100.000 5.440.000 4.496.000 2.415.000 1.771.000 1.054.000 24.480.000 27.497.000 24.716.000 20.939.000 19.678.000 518.000 558.000 464.000 983.000 1.146.000 916.000 718.000 802.000 645,000 991.000 958.000 654.000 541.000 470.000 338.000 3.751.000 3.934.000 3.017.000 45.234.000 44.349.000 290.700.000 249.075.000 238.750.000 11,840,000 7.800.000 8.517.000 491.715.000 402.885.000 395.897.000 17.505.000 14.195.000 13.780.000 12.394.000 13.717.000 8.411.000 9.710.000 Sweet Potatoes 1939 1938 Av. 1928-1937 (bus.) 1939 1938 Av. 1928-1937 1939 1QOQ Av. 1928-1937 (bus.) .............................. 1939 1 QiQC Av. 1928-1937 Hay (tons) 6.000 18.000 Farm Value 138.232.000 98.906.000 98.075.000 ............................. Irish Potatoes (bus.) Wheat 12,000 40.000 District 29.796.000 29.250.000 25.217.000 (lbs) Oats (bus.) Stocks Ratio Dec. Dec. 31, 1939 collections compared with to accounts Dec. 31 Nov. 30 outstanding 1938 1939 Dec. 1 61 + 34 + 43 58 + 3 96 + 1 — 11 47 + 7 + 15 — 3 93 — 3 + 12 92 + 10 47 + 2 + 13 — 1 61 + 15 + 14 57 59 83 0 — 4 73 + 10 66 + 3 The year 1939 turned out well for agriculture in the Fifth district, both because o f larger yields and better prices than were gotten in 1938. Yields were larger for corn, cotton, cotton seed, tobacco, sweet potatoes, oats, peanuts and apples, the only important crops showing reductions being Irish potatoes, wheat and hay. The average season prices received by farmers were higher in 1939 than in 1938 for most crops, and where prices were lower the declines were offset by higher produc tion figures. Therefore, cash receipts in 1939 were sub stantially above 1938, receipts, even tobacco, in which the average price declined drastically, showing a larger dollar return because o f a 44 per cent rise in production. Actual cash receipt figures are not available, but the farm values o f Fifth district crops grown in 1939 show the following percentage changes over 1938 values: corn + 15% , cotton + 3 4 % , cotton seed + 2 5 % , tobacco + 1 % , Irish potatoes + 6 % , sweet potatoes + 1 1 % , oats + 1 % , wheat + 6 % , hay + 2 % , peanuts + 2 3 % , and apples — 13% . Apples is the only major crop having a lower total value than in the preceding year, and this is chiefly due to inability to export the usual part o f the crop to England and Continental Europe. Cotton and cotton seed registered the greatest increases in value in 1939, and the Carolinas, in which practically all Fifth district cotton is grown, show the influence o f increased purchasing power on the part o f farmers. For example, South Carolina led the district in percentage increases o f automobile sales and in department store sales last year in comparison with the preceding year. .................................... Peanuts (lbs.) 1939 1938 Av. 1928-1937 ............................. 189.175.000 146.010.000 148.630.000 1939 1 QQQ Av. 1928-1937 Apples, Commercial (bus.) ... 1939 1 QQQ Av. 1928-1937 , 2 102,000 1.700.000 1.419.000 1.331.000 7.500.000 7.268.000 8.153.000 4,000,000 3.227.000 3.576.000 (Compiled January 20, 1940) 580.000 480.000 667.000 7 MONTHLY REVIEW SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION Industrial activity, a fter a rapid rise in recent months, declined less than seasonally in December. In the first h a lf o f January activity did not show the usual seasonal increase. D istribution o f com m odities to consum ers w as m ain tained in la rg e volume. PRODUCTION Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1934 to December 1939. DEPARTMENT STORE SALES AND STOCKS Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1934 to December 1939. WHOLESALE PRICES Industrial output decreased in Decem ber, but b y a sm aller am ount than is usual at this season, w ith the consequence that the B oard's index, w hich allow s fo r usual seasonal variations, advanced fu rth er from 124 to 128 per cent o f the 1923-1925 average. A s in other recent months, the rise in the index continued to reflect m ainly increased activity in industries producin g durable goods. A u to mobile production rose sharply in D ecem ber ow in g to the reopening o f plants o f one large producer w hich had been closed fo r alm ost tw o months. Plate glass production also increased. A t steel m ills activity w as m aintained near the high level that prevailed in O ctober and N ovem ber; fou rth quarter production o f steel ingots was greater than in any other three-m onth period on record. Output o f zinc and deliveries o f tin continued to increase in D ecem ber, and lum ber production declined less than seasonally. In the nondurable goods industries, where production had been at high levels throughout the autumn, changes in output in Decem ber w ere la rgely seasonal in character. A t woolen textile m ills, however, there w as a consider able reduction in activity, and activity at silk m ills declined to a low level, reflecting in part continued high prices o f raw silk. O utput o f crude petroleum continued at a high rate in Decem ber, w hile coal production w as reduced, fo llo w ing a large volum e o f output in the tw o preceding months. In the first h alf o f January steel in got production w as at a som ewhat low er level than in December, while autom obile assemblies w ere m aintained at about the same high rate as in the previous month. V alue o f construction contracts awarded, as reported b y the F. W . D odge C orporation, increased fu rth er in D ecem ber, ow in g to the inclusion in the Decem ber figures o f a large amount fo r a dam under construction by the Ten nessee V a lley A uthority. Contracts fo r private building, both residential and nonresidential, declined seasonally. EMPLOYMENT A ccord in g to reports from leading industrial States, fa c to r y em ploym ent decreased less than seasonally in D ecem ber and p a y rolls showed a fu rth er advance. DISTRIBUTION D istribution o f com m odities to consum ers increased fu rth er in Decem ber. Sales at variety stores showed about the usual sharp rise and sales at depart ment stores and m ail-order houses increased m ore than seasonally. F reigh t-car loadings declined by m ore than the usual seasonal am ount from N ovem ber to December, reflecting chiefly a fu rth er reduction in coal shipments and a decrease in loadings o f ore, w hich had been at a high level in the previous month. COMMODITY PRICES Index compiled by the U. S. Bureau of Labor Statistics, 1926=100. By weeks, 1934 to week ending January 13, 1940. MEMBER BANKS IN 101 LEADING CITIES P rices o f wheat, w hich had advanced sharply early in D ecem ber and con tinued at the higher level during the rest o f the month, declined considerably in the first h a lf o f January. Sm aller decreases occurred in some other com m odi ties, including hides, tin, and zinc. Prices o f m ost other basic com m odities, such as cotton, w ool, lead, and steel scrap, showed little change. GOVERNMENT SECURITY MARKET P rices o f United States Governm ent securities continued to advance during Decem ber and were steady during the first tw o weeks o f January. BANK CREDIT Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934, to January 10, 1940. Commercial loans, which in clude industrial and agricultural loans, represent prior to May 19, 1937, so-called “ Other loans” as then reported. T otal loans and investm ents o f reportin g m em ber banks in 101 leading cities declined in the fo u r weeks ending Janu ary 10, follow in g an increase during the first h a lf o f Decem ber. These changes reflected la rg ely a tem porary rise and a subsequent decline in loans to security brokers and dealers in con nection w ith the Governm ent’s flotation o f a new issue o f bonds. Total holdings o f United States Governm ent obligations at city banks showed little net change during the period. A s a result chiefly o f fu rth er increases in gold stock as w ell as the p ost holiday return o f curren cy from circulation, excess reserves o f m em ber banks increased sharply in the fo u r weeks ending January 10.
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