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MONTHLY REVIEW o f Financial and Business Conditions F i fth Federal Re se rv e Distr ict Federal Reserve Bank, Richmond, Va. January 31, 1941 Annual Survey for 1940 1 C M f ) was one best years in the history o f the - L i / W Fifth Federal Reserve district in trade and in dustry, and was moderately good in agriculture. New records were made in several lines, and other records were closely approached. Construction work, for exam ple, stimulated in the second half-year by much defense work, set an all time record o f $520,417,000 in contracts actually awarded, an increase o f 15 per cent over the previous high o f $451,030,000 for 1928, and 38 per cent above the 1939 total. City building permits issued in 1940 were also near a record level, totaling $127,398,101 in 31 Fifth district cities. The cotton textile industry, receiving a substantial volume o f orders from the Arm y and Navy in addition to increased commercial require ments, consumed more cotton than in any previous year and ended 1940 with sufficient orders on hand to main tain operations several months. Rayon yarn mills again set a record for shipments to domestic consumers in 1940, and the demand was so great that reserve stocks o f yarn declined to a four days’ supply at the end o f the year. Tobacco manufacturing exceeded that o f 1939 in all lines except snuff, and cigarette production, o f which the Fifth district accounts for more than 80 per cent, rose 5 per cent in 1940 over 1939. Production o f bituminous coal in Fifth district states exceeded 1939 output by 16 per cent, and was the highest for any year since 1929. Sales o f new passenger automobiles rose 27 per cent in 1940 over sales in 1939, and used cars also sold unusually well. Retail trade as indicated by de partment store sales rose 11 per cent in 1940 from the 1939 level, and furniture stores also reported an increase of 11 per cent. Debits to individual accounts, reflecting transactions through the banks in 25 Fifth district cities, rose to $16,841,529,000 in 1940, another 11 per cent in crease over the 1939 figure. Every reporting city showed higher debits in the later year. Many o f the develop ments mentioned required additional workers or afforded longer hours o f work, and consequently employment im proved so notably that shortages o f men actually devel oped toward the end o f the year in some skilled trades. In agriculture, the farm values o f all principal crops except tobacco and sweet potatoes were higher for 1940 than for 1939 yields. The tobacco crop was curtailed about a third this year, which redured the aggregate value o f the crop proportionately, but part o f the decline in the crop’s value was made up by Government benefit payments for acreage reduction. BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT December 1940 Debits to individual accounts (25 cities).—.... Sales, 30 department stores, 5th district......... Sales, 39 furniture stores, 5th district.... Sales, 178 wholesale firms, 5th district........... Registrations, new autos, 5th district............. Tobacco sold in 5th district (pounds)............. Growers’ receipts from tobacco, 5th district.. Average price of tobacco, 5th district............. Number of business failures, 5th district....... Liabilities in failures, 5th district.................... Value of building permits, 31 cities............... . Value of contracts awarded, 5th district......... Cotton consumption, 5th district (bales)....... Cotton price, cents per lb., end of month....... Print cloths, 39 in., 80x80s, end of month..... Rayon yarn shipments, U. S. (pounds)......... Rayon yarn stocks, U. S. (pounds)................. Bituminous coal mined, U. S. (tons)....-......... November 1940 December 1939 $1,735,170,000 $ 20,927,121 1,675,071 $ 9,598,000 $ 28,3.91 35,323,912 4,786,231 $ 13.55 $ 41 884,000 $ 8,359,191 $ $ 100,879,000 354,051 10.07 7.50 34,500,000 5,300,000 40,600,000 $1,528,845,000 $ 12,954,921 1,365,816 $ $ 10,425,000 23,479 $1,530,670,000 $ 19,006,586 1,428,795 $ 8,428,000 $ 19,330 102,320,316 14,659,107 14.33 31 769,000 $ $ 13,095,771 $ 45,703,000 340,446 9.74 7.375 35,000,000 6,200,000 40,012,000 $ $ $ $ $ $ $ 83,304,996 11,068,040 13.29 48 544,000 5,280,866 22,358,000 307,369 10.93 7.25 32,000,000 6,400,000 38.066,000 Change Month Year + + + — + — — — + + — + + + + + — — + — + + 13 62 23 8 21 65 67 5 32 15 36 +121 + + + 4 3 2 — 1 — 15 + 1 13 10 17 14 47 58 57 2 15 63 58 +351 + 15 — 8 + 3 + 8 — 17 + 7 MONTHLY REVIEW 2 RESERVE BANK COM PARISONS STATEM EN T OF SELECTED M EM BER BANKS Changes in the statement of the Federal Reserve Bank o f Richmond between December 15, 1940, and January 15, 1941, were of no special significance. Circulation of Federal Reserve notes showed the usual decline after the holiday need for funds had passed. Government security holdings, reversing a recent trend, rose moderately during the period, while member bank reserve deposits and the Bank’s cash reserves advanced further. In comparison with figures for January 15, 1940, those for January 15, 1941, show advances in all items except those making up earning assets, which declined slightly. Federal Reserve note circulation rose substantially over a year ago, prob ably reflecting greater activity in nearly all lines of trade and industry this year. Member bank reserve deposits and cash reserves o f the Richmond bank both registered marked increases during 1940. The accompanying table shows comparisons o f statement items for 41 regularly reporting member banks as o f January 15, 1941, with corresponding figures a month and a year earlier. Changes during the past month were relatively unimportant, but during the past year loans and discounts rose 13 per cent, reserve balance at the Reserve bank rose 31 per cent, and demand deposits rose 20 per cent. RESERVE BANK STATEMENT ITEMS Fifth District 000 omitted Jan. 15 Dec. 15 ITEMS 1941 1940 $ 33 $ 47 Discounts held ......................... ................ 41 27 Foreign loans on gold .......... ............... 783 780 Industrial advances ................ ............... 115,900 119,976 Government securities .......... ................ 116,771 Total earning assets .......................... 120,816 278,382 Circulation of Fed. Res. notes .............. 274,908 372,450 354,012 Members’ reserve deposits . . , ............... 570,688 83.49 Reserve ratio ........................... Jan. 15 1940 122 216 942 125,583 126,863 221,031 288,976 430,976 77.57 $ A brief review o f the operations o f the Federal R e serve Bank o f Richmond during 1940 shows continued growth o f the Bank. Total assets rose from $632,001,031.78 on December 31, 1939, to $774,748,010.56 on December 31, 1940. Although the number o f employees at the Head Office and the two Branches was the same, 675, at the end o f both 1939 and 1940, a larger volume o f business was handled last year in most departments. The number o f checks handled by the Transit department set an annual record at 79,938,000 items, an average of 265,575 checks per working day. These checks totaled $15,474,834,000 in 1940, an average o f $51,411,409 per day. Currency and coin received or paid out in 1940 totaled 962,789,100 pieces, valued at $1,567,387,500, against 869,862,878 pieces valued at $1,386,332,900 han dled in 1939. Transfers o f funds to and from other Reserve Banks and Branches through the Inter-district Settlement Fund also rose substantially in 1940 in com parison with 1939. The number o f member banks in the Fifth district rose from 411 to 431 during 1940. One member bank was absorbed by a non-member, but the following 31 banks joined the Reserve System: Citizens & Southern National Bank of S. C .. . . . . .Charleston, S. C. City National Bank of Winston-Salem.............Winston-Salem, N. C. Citizens-Waynesboro Bank & Trust Co.....................Waynesboro, Va. Bank of Christiansburg.............................................. Christiansburg, Va. Bank of Wadesboro........................................................... Wadesboro, N. C. Bank of Monroe.....................................................................Union, W . Va. Bank of Quinwood........................................................... Quinwood, W . Va. Farmers & Bank of Amherst.............................................. Amherst, Va. Commercial National Bank.................................................Kinston, N . C. City Bank of Washington............................................ Washington, D. C. Farmers & Merchants Bank............................................ Rich Creek, Va. Shenandoah County Bank & Trust Co......................... Woodstock, Va. Farmers & Merchants Bank............................................Blacksburg, Va. Farmers Bank of Edinburg, Inc..........................................Edinburg, Va. South Boston Bank & Trust Co................................. South Boston, Va. Bank of Greene, Inc........................................................ Stanardsville, Va. Planters Bank of Bridgewater...................................... Bridgewater, Va. Bank of Alberta, Inc.................................................................. Alberta, Va. Peoples* Bank of Mt. Jackson............... ................ Mount Jackson, Va. State Bank of Remington, Inc......................................... Remington, Va. Bank of Shawville, Inc.......................................................... Shawville, Va. SELECTED ITEMS—41 REPORTING BANKS Fifth District 000 omitted ITEMS Loans & discounts ............................. . Investments in securities ................... Reserve baJ. with F. R. Bank .......... Cash in vaults ...................................... Demand deposits ............................... Time deposits ...................................... Money borrowed ....................................... Jan. 15 1941 Dec. 11 1940 Jan. 10 1940 $297,199 447,111 248,518 23,961 632,936 203,177 0 $298,873 432,527 242,985 27,828 637,972 199,907 0 $262,031 455,811 189,559 23,762 526,599 198,300 0 DEPOSITS IN M U T U A L SAVINGS BANKS Deposits in 10 mutual savings banks in Baltimore, which had set a record o f $222,060,975 on December 31, 1939, advanced further to $224,288,123 on April 30, 1940, establishing a new record each month during the inter vening period. A fter April, however, deposits turned downward and declined each month to $222,488,398 on August 31, the low month-end figure o f 1940 but still above the December 31, 1939, total. Deposits increased in September and October, dropped a little in November, and rose again to $223,920,684 on December 31, 1940. Deposits in the 10 mutual savings banks were higher at the end o f every month in 1940 than on the correspond ing dates in 1939. DEBITS TO IN D IV ID U A L A C CO U N TS 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 also 13 per cent higher than December 1939 figures. The December increase over November was exactly the same as the increase between the corresponding months a year earlier. Danville and Durham reported the only decreases from November to December, but both were due to holiday closings o f auction tobacco markets in the later month. In the calendar year 1940, debits in the 25 cities rose 11 per cent over 1939 debits, every city reporting higher figures for the later year. For the second successive year, Newport News with a rise o f 30 per cent in 1940 over the preceding year led all cities in percentage gain, due to the large increase in payrolls at the shipyard in that city. A ll three reporting cities in the Hampton Roads areas, N orfolk, Newport News and Portsmouth, reflect in their debits the great activity in shipbuilding and in the necessity for additional housing arising from a large influx o f workers, and Baltimore, Charleston, S. C., Columbia, and Charleston, W . Va., also show either direct or indirect influences o f the defense program. B IN D IN G SLIP L IB R A R Y FEDERAL RESERVE B AN K OF PHILADELPHIA Date .................. ..... ......: 1 . ...................... . Binding N o .............................................. Author .......................................................... T i d e ... .J ..'1 ± L ± :.................................1 l U i i L . . . • / 7 y * y V o lu m e .......................................................... Color.........L i l l i . : . .................. l :1 L £ ± r~ Style ............................................................... Label E X A C T LETTERING 3 MONTHLY REVIEW DEBITS TO INDIVIDUAL ACCOUNTS December 1940 CITIES November 1940 December 1939 % Change Month Year Annual Totals 1940 Annual Totals % 1939 Change Dist. of Col. Washington .................................... $ 339,473,000 $ 304,470,000 $ 301,770,000 + 11 + 12 $ 3,470,046,000 $ 3,173,685,000 + 9 Maryland 495,647,000 9,383,000 11,221,000 429,178,000 8,739,000 9,678,000 433,143,000 9,350,000 9,734,000 + 15 + 7 + 16 + 14 0 + 15 4,800,109,000 103,341,000 113,032,000 4,181,609,000 97,124,000 102,412,000 + 15 + 6 + 10 17,914,000 102,551,000 34,996,000 28,362,000 66,073,000 13,982,000 54,936,000 14,955,000 86,845,000 38,342,000 23,001,000 48,235,000 11,843,000 48,359,000 14,281,000 75,215,000 37,117,000 24,271,000 57,414,000 12,337,000 49,037,000 + 20 + 18 — 9 + 23 + 37 + 18 + 14 + 25 + 36 — 6 + 17 + 15 + 13 + 12 166,202,000 846,844,000 412,692,000 255,881,000 553,687,000 142,887,000 518,191,000 146,133,000 738,360,000 382,246,000 234,874,000 513,328,000 129,745,000 485,111,000 + 14 + 15 + 8 + 9 + 8 + 10 + 7 24,607,000 41,411,000 25,766,000 14,488,000 21,482,000 37,278,000 24,722,000 13,102,000 21,849,000 29,444,000 22,449,000 13,130,000 + 15 + 11 + 4 + 11 + + + + 13 41 15 10 248,124,000 376,001,000 252,517,000 139,056,000 212,501,000 325,013,000 229,312,000 122,974,000 + + + + 17 16 10 13 7,321,000 192,111,000 34,121,000 15,409,000 16,336,000 13,023,000 64,884,000 5,939,000 175,920,000 32,962,000 15,161,000 16,930,000 12,933,000 58,812,000 5,393,000 183,817,000 31,490,000 — 25 + 17 + 12 + 14 + 23 + 9 + 4 — 23 + 12 + 12 + 25 + 36 + 5 + 8 119,536,000 183,894,000 154,701,000 670,592,000 61,533,000 1,933,670,000 351,278,000 118,345,000 170,287,000 118,554,000 5i88,452,000 52,006,000 1,878,864,000 318,196,000 + + + + + + + 1 8 30 14 18 3 10 Charleston ...................................... ................. Huntington .................................... ................. Parkersburg.................................... ................. 67,850,000 22,122,000 11,946,000 54,195,000 18,710,000 11,238,000 59,733,000 20,640,000 15,220,000 + 25 + 18 + 6 + 14 + 7 — 22 625,760,000 215,607,000 126,348,000 561,194,000 197,070,0001 117,881,000 + 12 + 9 + 7 District Totals ............................................ $1,735,170,000 $1,528,845,000 $1,530,670,000 +13 +13 $16,841,529,000 $15,195,276,000 +11 Baltimore ..................................... ........ . ........ Cumberland ................................... ................... Hagerstown ................................... .................. North Carolina Asheville ........................................ ................. Charlotte ........................................ Durham ......................................... ................. Greensboro ................................... .................. Raleigh ........ .................................. Wilmington ................................... .................. Winston-Salem ............................. South Carolina Charleston ........................................................ Columbia .......................................................... Greenville ...................................... Spartanburg................................... Virginia Danville .......................................... Lyn'chburg ................................ ................... Newport News ............................. Norfolk ............................................ Portsmouth .................................... ................. Richmond ........................... ............ .................. Roanoke .......................................... .................. 19,035,000 West Virginia E M PLO Y M E N T BUSINESS INSOLVENCIES Employment probably declined in the Fifth district between the middle o f December and the middle o f Janu ary, as is to be expected when retail outlets release extra help taken on for the holiday season and many industrial plants shut down a few days around the end of the year for taking inventories and overhauling machinery. The industrial lay-offs were all temporary, however, and con tinued increases in the needs for workers in shipyards, airplane plants and on numerous construction projects have increased further the number o f employed persons in those lines. Generally speaking, it appears that there are practically no skilled mechanics or building tradesmen now on the unemployed list, but there are surpluses o f clerical workers and unskilled help. Employment in in dustry in the Fifth district rose something like 5 per cent during 1940, while payrolls rose about 10 per cent, the greater increase in payrolls being partly due to longer hours of work available for certain people. The increase in workers employed in construction is probably greater than the increase in industry, but no figures on employ ment in construction are available. The following figures, compiled for the most part bv the Bureau of Labor Statistics from records submitted by a large number o f identical employers, show trends o f employment and payrolls in the Fifth district from November to December: Fifth district commercial failures in the calendar year 1940, as reported by Dun & Bradstreet, declined 7 per cent in number but increased 16 per cent in liabilities involved in comparison with figures for 1939, compared with decreases in the United States o f 8 per cent in number and 11 per cent in liabilities. The district showed increases in both number and liabilities in December 1940 over November, while the United States also increased in number o f bankruptcies but decreased in total liabilities involved. STATES Maryland ........................................................ Dist. of Columbia ....................................... Virginia ........................................................... West Virginia ................................................ North Carolina .................................... South Carolina .............................................. District Average ........................... Percentage change from Nov. 1940 to Dec. 1940 In number In amount on payroll of payroll + + + + + + + 2.3 6.4 1.7 0.9 1.4 2.6 2.1 + + + + + + + 4.7 8.2 7.5 2.9 1.1 7.8 4.7 Number of Failures District U. S. PERIODS Total Liabilities District U. S. December 1940 ..................... November 1940 ................. .... December 1939 ....................... 41 31 48 1,086 1,024 1,153 $ 884,000 769,000 544,000 $ 13,309,000 16,572,000 13,243,000 12 Months, 1940 ..................... 12 Months, 1939 ..................... 536 575 13,619 14,768 7,389,000 6,376,000 163,314,000 182,520,000 PASSENGER A U T O M O B IL E SALES Sales o f new passenger automobiles in the Fifth R e serve district set a December record in 1940, and exceeded sales in December 1939 by 47 per cent. The District o f Columbia and W est Virginia sold more cars in Decem ber 1936 than in any other December, but Maryland, Virginia, North Carolina, South Carolina and the district as a whole established records last month. During the calendar year 1940, total sales in the Fifth district ex ceeded 1939 sales by 27 per cent, and lacked only 3 per cent o f equaling the all-time high sales in 1929. The feature o f automobile retailing in 1940 was the way in which sales held up in the second half o f the year, which was explained by dealers as due in part to precautionary buying resulting from fear that new cars might not be readily available next spring and summer if the defense MONTHLY REVIEW 4 program makes necessary any substantial restriction in steel available to the automobile industry and in part to increased incomes of many car buyers. The following figures, furnished by R. L. Polk & Co., o f Detroit, show December and annual sales by states for 1940 and 1939: REGISTRATION OF N E W PASSENGER CARS— NUMBER Dec. 1940 Maryland ........... Dist. of Col. . . . Virginia ............. West Virginia .. No. Carolina . . . So. Carolina . . . District ........... Dec. 1939 5,076 2,622 6,561 2,392 8,343 3.397 28,391 STATES 3,696 2,116 3,830 2,147 5,446 2.095 19,330 % Change + + + + + + + 37 24 71 11 53 62 47 12 Months 12 Months % 1940 Change 1939 51,319 29,170 59,840 31,102 56,760 ' 30,432 256,623 39,389 25,637 42,172 22,955 46,160 25,100 201,413 + + + + + + + 30 14 37 35 23 21 27 BITU M IN OU S C O A L PRO D U CTIO N Output o f bituminous coal in the United States in December 1940 totaled 40,600,000 net tons, an increase o f 7 per cent over production o f 38,066,000 tons in De cember 1939. Last month’s tonnage also exceeded that o f November, the preceding month, but November con tained one less working day and on a daily basis exceeded December daily output by 2.5 per cent. In the Fifth district, December production of 11,335,000 tons was 3 per cent above 10,980,000 tons in December 1939. Total production in 1940 was 142,557,000 tons in the district and 452,445,000 tons in the United States, compared with production in 1939 of 122,636,000 tons in the district and 393,065,000 tons in the nation. Output in the district was higher in all 1940 months except September, October and November than in 1939, and higher in the United States in all months but March and October. Hampton Roads ports shipped approximately 22,231,624 tons o f coal in the calendar year 1940, an increase o f 11 per cent over 20,107,806 tons shipped in 1939. Production figures for Fifth district states in 1940 and 1939 were as follow s: SOFT COAL PRODUCTION IN TONS STATES West Virginia ................... ....... Virginia ...................................... Maryland .................................... 5th District ........................... United States ....................... Year 1940 Year 1939 126,072,000 107,938,000 15,009,000 13,230,000 1,476.000________ 1.468,000 142,557,000 122,636,000 452,445,000 39-3,065,000 % Change +17 +13 + 1 +16 +15 BU ILDIN G PERM ITS A N D C O N T R A C T AW A R D S Building permits issued in 31 Fifth district cities fol lowed the seasonal trend in December and declined from the November total, but contract award figures rose to an all-time high in December. The defense program is responsible for the high contract awards, but is playing a much smaller part in influencing building permits. The permits cover construction within the corporate limits o f larger towns, while the bulk o f the defense construction is located in suburban, rural or small town areas. Permits issued in December 1940 totaled $8,359,191, a decrease of 36 per cent from $13,076,326 in November 1940 but an increase of 58 per cent over* $5,280,866 in December 1939. Washington led all Fifth district cities last month with $4,137,030, Baltimore was second with $1,173,774, N orfolk third with $897,578, Charlotte fourth with $308,094, and Richmond fifth with $214,864. E x amination of the annual record shows permits issued in 1940 to the amount o f $127,398,101, an increase o f 6.6 per cent over $119,497,614 in 1939. Washington led for the year with permits totaling $43,751,180, and this is exclusive o f Federal Government work for which per mits are not taken out in the District o f Columbia. A table showing permits issued in each o f the 31 cities in 1940 and 1939 appears elsewhere in this Review. Construction contracts awarded in the Fifth district in December reached the record figure o f $100,879,000, and was the largest amount reported for any o f the 12 Fed eral Reserve districts. A few large defense contracts for industrial buildings account for much o f the total, which is 351 per cent above awards totaling $22,358,000 in December 1939. Contract awards in the Fifth district in the calendar year 1940 amounted to $520,417,000, an increase o f 38 per cent over awards totaling $377,471,000 in 1939. Contract award figures by states for December are not yet available, but the following table shows awards made in November 1940 and 1939, and brings monthly figures previously published in the R eview up-to-date to De cember. CONSTRUCTION CONTRACTS AW ARDED STATES Nov. 1940 Nov. 1939 % Change Maryland ............................ $ 8,368,000 $ 6,000,000 + 39 Dist. of Col........................... 6,244,000 2,948,000 +112 Virginia ................................ 11,629,000 5,279,000 +120 West V ir g in ia ..................... 5,661,000 1,174,000 +382 North C arolina................... 6,418,000 5,475,000 + 17 Sou+h Carolina .................................. 7.383,000_________ 3,180,000_______ + 1 3 2 $45,703,000 $24,056,000 + 90 Fifth District ................. VAL U A TIO N OF BUILDING PERMITS ISSUED CITIES Maryland 1940 1939 Baltimore ........................................ $ 30,388,453 $ 16,056,079 Cumberland .................................... 690,744 811,792 Frederick ........................................ 621,389 796,122 566,342 905,984 Hagerstown .................................... Salisbury ........................................ 786,880 526,310 Virginia D anville............... 717,630 811,647 Lynchburg ......... 1,327,885 1,318,552 Norfolk ............... 7,000,321 3,310,410 Petersburg ......... 186,971 222,532 Portsmouth 2,430,492 515,668 Richmond ........... 7,222,627 5,267,908 Roanoke ............. 1,260,064 1,390,208 West Virginia 739,844 475,156 Bluefield .......................................... Charleston ...................................... 4,345,397 5,383,480 Clarksburg ...................................... 822,978 819,059 Huntington ................................. 1,682,122 3,390,161 North Carolina Asheville ............. 655,542 998,298 Charlotte............... 4,295,627 4,040,962 2,467,090 1,625,023' Durham ............. Greensboro ........... 2,674,816 2,068,536 High P o in t ........... 640,456 1,182,235 Raleigh ............... . 2,328,176 3,017,020 Rocky Mount 716,561 742,475 Salisbury ............. 452,735 316,365 Winston-Salem .. 2,628,421 2,261,748 South Carolina Charleston ...................................... 2,222,532 2,825,978 Colum bia.......................................... 2,826,973 4,310,749 900,012 726,093 Greenville .................................... Rock Hill ........................................ 398,870 623,382 Spartanburg .................................. 1,773,834 856,440 Dist. of Col. Washington ...... ................................................. 43.751.180_____________ 49.776.379 D'stHc+ Totals ......................... ..................... $127.398,101___________ $119,497,614 Note: Valuation figures for Washington do not include Federal buildings. TH E R A Y O N IN D U STR Y Rayon Organon for January states that the sustained high activity which prevailed in the rayon filament yarn market during 1940 was without parallel in the indus try’s history. During the first half o f the year the de MONTHLY REVIEW mand for rayon yarn was at an average level of 31,000,000 pounds per month, and the adverse seasonal influence which normally appears during the second quarter period was completely absent. Shipments of yarn advanced still further in the second half o f 1940, and averaged approxi mately 34,000,000 pounds per month. As a result of high shipments, reserve stocks never exceeded a two weeks’ supply during the year, and at the end of December had been reduced to about a four days’ supply. Total ship ments in 1940 by domestic mills are estimated at 388,684,000 pounds of filament yarn, an increase of 8 per cent over shipments o f 359,572,000 pounds in 1939. The defense program has undoubtedly accounted in part for the great advance in the rayon market, although the program’s influence has been indirect. Very little fabric made o f rayon has been bought for Arm y or Navy use, but greater consumer purchasing power resulting from defense jobs has been reflected in a sharply rising de mand for textiles in civilian life. In these uses rayon has continued to gain ground on other textiles, and new uses for it have been developed during the past year. T w o more or less nominal price changes were made in the rayon yarn list in 1940, but no general price changes occurred, although raw materials and labor costs ad vanced. The average hourly earnings o f workers in the rayon industry in the first nine months o f 1940 rose to 67.4 cents an hour from the average of 64.3 cents in the first nine months of 1939. THE CO TTO N T E X T IL E IN D U STRY The volume of business in cotton goods in December was considerably smaller than in the preceding four months, but the usual year-end influences failed to curb activity to any appreciable extent. The Journal o f Com merce monthly survey says that heavy Government buy ing continued, and that prices for the most part were strong. Ordinarily December witnesses the offering of resale lots o f textiles, with a consequent depreciation o f values in first hands, but second hand offerings last month were about the smallest on record. Trading in first hands continued as converters covered requirements against both defense and commercial needs. Sheetings were unusually strong and a number of shortages developed. Drills and four-leaf twills were strong, and ducks sold in such large volume to the Arm y that mills announced sufficient fo r ward orders to maintain current operating schedules over most o f the first half o f 1941. Production o f cotton goods was reported as the largest for any December on record, and closely approached the record for any month. Consumption of cotton in Fifth district mills in 1940 was the highest on record, exceeding the 1939 figure, which was high to that year, by 8 per cent. Each o f the past three years set consumption records for the district. 5 C O TTO N STATISTICS Spot cotton prices were somewhat higher between the middle of December and the middle of January than a month earlier, but were lower than during the corre sponding month a year ago. The rise in cotton prices last month was probably due to reduced stocks o f free cotton and the high level o f domestic mill activity. The average price for middling upland 1 5/1 6 inch staple on 10 Southern markets on December 13, 1940, was 9.86 cents, but rose to 10.22 cents on January 10, and then dropped to 10.06 cents on January 17, the latest date for which figures are available. On January 19, 1940, the average price was 10.87 cents. COTTON CONSUMPTION AND ON HAND— BALES Dec. Dec. 1940 1939 Fifth district states: Cotton consumed ....................... 354,051 307,369 Cotton growing states: Cotton consumed ....................... 665,265 553,042 Cotton in hand Dec. 31 in Consuming establishments . . 1,535,572 1,594,808 Storage & compresses ........... 14,796,369 14,529,576 United States: Cotton consumed ....................... 775,472 650,123 Cotton in hand Dec. 31 in Consuming establishments .. 1,833,864 1,861,406 Storage & compresses ........... 15,046,513 14,579,390 Exports of cotton ......................... 107,375 806,720 Spindles active, U. S....................... 22,817,658 22,780,406 A U C T IO N T O B A C C O Aug. 1 to Dec. 31 1940 1939 1,650,714 1,566,475 3,070,077 2,809,849 3,584,017 3,310,143 602,763 3,134,415 M ARK ETIN G Only a little over a third as much tobacco was auc tioned in the Fifth district in December 1940 as in December 1939, due in part to a much smaller crop this crop year and in part to delayed sales last year. The average price was slightly higher last month than a year earlier, but declined from the November average price as the end o f the season approached and poorer grades o f tobacco came on the markets. Sales in the district from the opening o f the season in the South Carolina belt last August to December 31 were only 66 per cent o f sales in the corresponding period in 1939, but this season’s tobacco crop was only 64 per cent of 1939’s yield. Average prices this year were 9 per cent higher than 1939 prices, a small increase in view o f the marked decline in production, but there was a large carryover o f tobacco from 1939, and exports were practically shut off in both 1939 and 1940, which reduced demand for the 1940 crop. Producers' Tobacco Sales, Pounds December 1940 December 1939 STATES North Carolina ......... Virginia (Flue cured) (Fire cured) (Burley) (Sun cured) Virginia, Total ......... District Total, Dec.. . N. C. season to 12/31 Va. season to 1 2 /3 1 .. S. C. entire season. . . Dist., season to 12/31 18,135,933 6,798,306 4,266,347 5,546,700 576,626 17,187,979 35,323,912 484,974,920 95,391,364 74,803,580 655,169,864 52,333,498 20,348,445 5,000,323 5,109,250 513,480 30,971,498 83,304,9*96 745,915,961 126,737,638 117,217,526 989,871,125 Price per Cwt. 1940 1939 $13.69 11.87 8.57 19.48 8.72 13.40 13.55 17.30 17.18 14.55 16.97 $13.71 12.33 10.81 15.41 10.72 12.57 13.29 15.82 15.00 14.56 15.57 TO B A C C O M A N U FA C TU R IN G COTTON CONSUMPTION— FIFTH DISTRICT In Bales MONTHS No. Carolina So. Carolina Virginia December 1940 ................... 194,227 144,461 15,363 November 1940 ................... 188,495 137,539 14,412 December 1939 ................... 172,881 124,987 9,501 12 months, 1940 ................. 12 months, 1939 ................. 2,066,586 1,941,541 1,582,362 1,433,603 154,089 142,184 District 354,051 340,446 307,369 3,803,037 3,517,328 The output of tobacco products in the United States declined seasonally in December from the November level, due to holiday closing o f factories at Christmas, but exceeded output o f December 1939, according to reports by the Bureau o f Internal Revenue. 6 MONTHLY REVIEW TOBACCO PRODUCTS MANUFACTURED Dec. 1940 Smoking & chewing tobacco, pounds ............. Cigarettes, number ............. Cigars, number ..................... Snuff, pounds ......................... Nov. 1940 RETAIL FURNITURE SALES Dec. 1939 25,730,910 14,347,327,020 507,348,580 2,865,513 21,088,322 12,802,800,103 331,203,629 2,968,418 Annual production figures for 1940 and 1939 were as follow s: Year 1940 Smoking & chewing tobacco, pounds . . .. _ Cigarettes, n u m b er...........=Cigars, number ................. .... Snuff, pounds ......................... % Change in Sales, Dec. and Year 1940 STATES 21,499,435 13,814,602,886 349,779,880 3,258,973 Year 1939 304,320,494 180,662,787,772 5,418,408,619 37,875,059 302,777,328 172,421,537,347 5,311,393,887 38,017,336 % Change + + + 1 5 2 Compared with Dec. 1939 Maryland, 9 sto r e s............. Dist. of Col., 6 stores . =. Virginia, 13 stores ........... North Carolina, 5 stores South Carolina, 6 stores . 5th District, 39 stores . Individual Baltimore, 9 Richmond, 5 Washington, Compared with Year 1939 + 22 + 27 + 10 + 15 + 12 + 8 + 5 + » + 11 + 6 + 22 + 17 Cities: stores ......... stores ........... 6 stores . . . . + 22 + 2 + 27 + 15 + 2 + 12 0 WHOLESALE TRADE, 178 FIRMS R E T A IL A N D W H O LESALE TR A D E Net Sales December 1940 compared with Nov. Dec. 1939 1940 DEPARTMENT STORE TRADE Net Sales Dec. 1940 omp. with Dec. 1939 Richmond (3) Baltimore (8) . . . Washington (6) . Other Cities (13) District (30) + 6.1 + 8.2 + 12.4 + 12.2 + 10.1 Same stores by states, with additional stores reporting sales only: Virginia (15) ............... + 1 0 . W est Va. (12) . . . + 4 . No. Carolina (10). +12. So. Carolina (10). +14. 5th District (65) . +11. Net Sales Year 1940 comp, with same period in 1939 + 7.8 + 9.7 + 10.1 + 11.1 + 9.8 +11. +12. +11. +12. + 11- Stocks Dec. 31, 1940 comp. with Dec. Nov. 1939 1940 + 14.0 + 6.1 + o.9 + 3.2 + 6.6 — 23.4 — 19.6 — 24.0 — 24.6 — 22.4 Ratio Dec. collections to accounts outstanding Dec. 1 32.6 31.6 29.1 30.6 30.4 LINES Auto supplies (8) ... Drugs (11) ................... .. Dry goods (8) ............. Electrical goods (13) . Groceries (52) ............... Hardware (14) ................. Industrial supplies (9) Paper & products (9) . Tobacco & products (7) Miscellaneous (43) ........ District Totals (1 7 8 ).. + + + + + + + + + + + + 23 13 2 7 47 4 16 36 3 14 14 14 Source: Department of Commerce. + 4 — 54 — 9 -3 5 + 29 — 6 -1 0 - 3 - 2 — 5 + 7 — 8 Stocks Dec. 31, 1940 compared with Dec. 31 Nov. 30 1939 1940 + 6 — 18 + 6 + 19 — 1 + 23 — 11 - 7 — 1 + 3 + 13 + 18 — 4 + 1 + 3 + 1 + 3 + 22 + 19 0 + 11 + 3 Ratio Dec. collections to accounts outstanding Dec. 1 62 62 89 48 85 93 52 74 56 80 63 66 7 MONTHLY REVIEW A G R IC U L T U R E IN 1940 In agriculture, the year 1940 turned out better than average in the Fifth district in all crops except sweet potatoes, although the district’s yield of tobacco was 36 per cent below the record production o f 1939. The tobacco reduction was due chiefly to voluntary acreage restriction in cooperation with the Department o f A gri culture's crop control program. A ll principal crops ex cept sweet potatoes returned higher yields than in the ten-year base period 1929-1938. In comparison with 1939 yields, those for 1940 were higher for cotton, cotton seed, Irish potatoes, oats, wheat, hay and peanuts, but those for corn, tobacco, sweet potatoes and commercial apples were lower. The corn reduction was chiefly due to flood losses on bottom lands last summer. Total farm values of 1940 crops were higher for all crops except tobacco Yrs. CROPS Corn (bus.) ............. ................... 1940 1939 Av. 1929-1938 Maryland 17,535,000 18,216,000 15,923,000 Virginia 36,490,000 36,530,000 32,255,000 and sweet potatoes than the 1939 values, but the decline in the aggregate value o f the tobacco crop was sufficient to wipe out gains on all other crops. Except in the tobacco growing counties o f the Carolinas and Virginia, purchasing power o f farmers in 1940 was somewhat higher than in 1939, and even in the tobacco sections the cash income was up to the average o f the past ten years. Cotton seems to have been the most profitable crop in the Fifth district last year, with record per acre yields re ported by all cotton growing states in the district. Since practically all Fifth district cotton is grown in the two Carolinas, they experienced a substantial rise in purchas ing power except in the counties which grow both cotton and tobacco. W . Virginia 12,852,000 13,994,000 12,448,000 N. Carolina S. Carolina 44,7313,000 47,619,000 42,517,000 24,304,000 25,433,000 22,306,000 135,914,000 141,792,000 125,449,000 $100,846,000 97,977,001 District Farm Value Cotton (bales) ......... ................... 25,000 13,000 37,000 740,000 457,000 658,000 970,000 871,000 820,000 1,735,000 1,341,000 1,515,000 83,883,000 63,736,000 Cotton Seed (tons) . ..................... 11,000 6,000 16,000 329,000 203,000 292,000 431,000 387,000 364,000 771,000 596,000 672,000 16,9*64,000 12,956,000 1940 1939 Av. 1929-1938 1940 1939 Av. 1929-1938 Tobacco (lbs.) ......... ................... 31,920,000 32,800,000 26,096,000 97,540,000 143,847,000 97,395,000 2,7901,000 2,736,000 3,262,000 506,820,000 811,675,000 496,101,000 81,590,000 133,200,000 81,068,000 720,660,000 1,124,258,000 703,922,000 121,189,000 171,237,000 Irish Potatoes (bus.) ................. 2,898,000 2,375,000 3,098,000 10,412,000 6,786,000 11,507,000 3,630,000 3,040,000 2,925,000 8,720,000 8,200,000 7,976,000 3,192,000 3,108,000 2,424,000 28,852,000 23,509,000 27,930,000 19,254,000 18,5*96,000 Sweet Potatoes (bus.) ............... 1,485,000 1,440,000 1,090,000 3,875,000 4,128,000 4,156,000 7,104,000 8,624,000 8,163,000 5,040,000 6,834,000 5,220,000 17,504,000 21,026,000 18,629,000 13,200,000 13,642,000 ............. ................... 1,120,000 1,128,000 1,344,000 1,932,000 1,600,000 2,197,000 1,462,000 1,460,000 2,086,000 5,952,000 5,512,000 4,228,000 10,890,000 11,515,000 8,910,000 21,356,000 21,215,000 18,765,000 10,370,000 9,018,000 ......... ................... 7,566,000 7,352,000 8,518,000 8,463,000 7,685,000 8,735,000 2,016,000 2,102,000 2,080,000 6,132,000 5,100,000 4,661,000 2,688,000 2,415,000 1,175,000 26,865,000 24,664,000 25,169,000 22,884,000 21,021,000 Hay (tons) ............... ................... 550,000 517,000 464,000 1,252,000 983,000 923,000 833,000 722,000 644,000 975,000 984,000 696,000 539,000 541,000 362,000 4,149,000 3,747,000 3,089,000 51,218,000 46,100,000 3125,125,000 290,700,000 242,658,000 14,250,000 11,840,000 8,607,000 536,175,000 491,715,000 397,971,000 18,711,000 17,808,000 18,232,000 19,952,000 17,758,000 12,142,000 11,433,000 1940 1939 Av. 1929-1938 1940 1939 Av. 1929-1938 1940 1939 Av. 1929-1938 Oats (bus.) Wheat (bus.) 1940 1939 Av. 1929-1938 1940 1939 Av. 1929-1938 1940 1939 Av. 1929-1938 Peanuts (lbs.) ......... ................... 1940 1939 Av. 1929-1938 Apples, Commercial (bus.) . 1940 1939 Av. 1929-1938 196,800,000 189,175,000 146,706,000 2,077,000 2,362,000 1,922,000 10,325,000 10,800,000 10,279,000 4,868,000 5,670,000 4,622,000 962,000 1,120,000 935,000 (Compiled January 22, 1941) MONTHLY REVIEW 8 SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) Industrial activity continued at a h igh rate in D ecem ber and the first h a lf o f January and distribution o f com m odities to consum ers w as m aintained in la rge volum e. There w as some increase in wholesale com m odity prices. INDUSTRIAL PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1985-1939 average =100. By months, January 1934 to December 1940. 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 1940. INCOME PAYMENTS U. S. Department of Commerce estimates of the amount of income payments to individuals, adjusted for seasonal variation. By months, January 1934 to December 1940. MONEY RATES IN NEW YORK CITY iu> V A N TREAStJRY BO DS (IS Y A EI l\V s V _A ' \ K ru AI RESERVE B NK D iCO N R 1■ , IS U T A E rf * \ t r K — TREASlJRY NOTES (s-s 1rmiti) j TREASURY BILL! (NE IS U S lW SE) i 1934 1935 1936 ^ 1937 1938 1939 1940 For weeks ending January 6, 1934, to January 4, 1941. P R O D U C TIO N Volum e o f industrial production showed little change fro m N ovem ber to Decem ber, although usually there is a decline at this season, and consequently the B oard’s adjusted index rose fu rth er by fo u r points to 136 per cent o f the 1935-39 average. Steel in got production w as sustained a t about 96 per cent o f capacity. New orders fo r steel continued large, accordin g to trade reports, and w ere equal to or slightly grea ter than p rodu ction ; consequently the volum e o f unfilled orders rem ained at about the peak level reached in Novem ber. In the first h a lf o f January steel output increased to around 98 per cent o f capacity. A ctiv ity in the m achinery, a ircra ft, and shipbuilding industries continued to increase sharply and w orkin g forces w ere expanded fu rth er. In these lines and in som e others, such as w ool textiles, unfilled orders are exceptionally large, ow ing in the main to the defense program . Autom obile production declined som ewhat m ore than seasonally in D ecem ber follow in g an unusually large volum e o f output in N ovem ber and O ctober. R e tail sales o f new cars during the last quarter o f 1940 w ere about on e-fourth grea ter than in the correspon din g period last year and used car sales also w ere large. In the nonferrous metals industries activity increased fu rth er in D ecem ber and output o f lumber and cem ent showed less than the usual seasonal decline. T extile production, w hich in Novem ber had exceeded the previous record levels reached a year ago, continued at this high rate in Decem ber, not show ing the usual seasonal decrease. A t cotton and rayon mills, a ctivity increased som e w hat fu rth er and at w ool textile m ills output w as sustained at peak rates. In the shoe industry, w here output had been in reduced volum e during the first ten m onths o f the year, there was less than the usual seasonal decline in N ovem b er and Decem ber and, on a seasonally adjusted basis, production w as close to earlier peak levels. A t mines bituminous coal production declined less than seasonally and an thracite production increased. Output o f crude petroleum showed a reduction in D ecem ber ow ing m ainly to the fa c t that w ells in Texas w ere closed f o r ten days as com pared w ith nine days in Novem ber. O utput o f m etals continued in large volume. Value o f construction contract aw ards, as reported by the F . W . D odge C or poration, increased contraseasonally in Decem ber, reflecting fu rth er sharp in creases in awards fo r defense construction and private nonresidential building. Contracts fo r private residential building declined by som ewhat less than the usual seasonal amount. D IS T R IB U T IO N D istribution o f commodities to consum ers increased m ore than seasonally in Decem ber. D epartm ent and v ariety store sales showed the custom ary sharp expansion during the Christmas season and sales at m ail-order houses rose m ore than is usual at this time o f year. F reigh t-car loadings showed a seasonal decline from N ovem ber to Decem ber. Shipm ents o f forest products and m iscellaneous fr e ig h t decreased less than sea sonally, w hile ore loadings, w hich had been unusually la rge in Novem ber, de clined sharply. W H O L E S A L E C O M M O D IT Y P R IC E S B asic com m odity prices generally increased from the middle o f D ecem ber to the middle o f January, follow in g little change during the preceding fo u r weeks. Currently these prices are substantially above the level prevailin g last summer. Increases in the past month w ere m ost m arked fo r foodstu ffs, especi ally hogs, pork, lard, and cottonseed oil, bu t there w ere advances also in a num ber o f industrial m aterials, p a rticu la rly p ig iron, cotton, cotton goods, paint m aterials, and hides. Steel scrap prices, a fter increasing during m ost o f the period, subsequently declined and lum ber prices also decreased som ew hat from the sharply advanced peak reached in N ovem ber. B A N K C R E D IT Total loans and investm ents at reportin g mem ber banks in 101 leading cities continued to increase substantially during the six weeks ending Janu ary 8, re flecting prin cipally increases in holdings o f U nited States G overnm ent obliga tions at N ew Y ork City banks. Com m ercial loans rose som ewhat fu rth er w hile loans to N ew Y ork security brokers and dealers, w hich had increased in D e cember, subsequently declined som ewhat. E xcess reserves, after declining during the first h a lf o f Decem ber, have since increased to about $6,900,000,000. The increase reflected reductions in T reasu ry deposits w ith the Reserve Banks, a continued inflow o f gold, and since Christm as a seasonal return flow o f cu rren cy from circulation. U N ITED S T A T E S G O V E R N M E N T SE C U R IT Y PR IC E S P rices o f United States Governm ent securities reacted som ewhat a fter reaching record high levels early in Decem ber. Bonds o f 1960-65 showed on Janu ary 8 a net decline o f about 2 3/8 points from the all-tim e peak o f D e cem ber 10 bu t subsequently fluctuated som ew hat above this level. The yield on this issue, w hich w as 2.03 per cent at the peak in prices, w as 2.16 per cent on Janu ary 14.
@FedFRASER