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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.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102