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MONTHLY

REVI EW

o f Financial and Business Conditions

F i f th
F ederal

Reserve
Distr ic t

Federal Reserve Bank, Richmond, Va.

January 31, 1944

Business in December 1943
C U C H data as are in hand for December seem to confirm
December 59 per cent under a year ago. Total employ­
^ past observations that the trend o f business in the ment in the District's manufacturing industries established
its highest level in the early part o f 1943 and thereafter
Fifth Federal Reserve District has reached its peak and
was under steady attrition. However, the overall pro­
on balance is holding at that level. Average daily bitu­
duction from the District’s manufacturing plants appears
minous coal production in December recovered from the
effects o f the work stoppage in November and stood at a to have risen on balance into the third quarter o f the
year, despite some reduction in the outturn o f the impor­
level which compares favorably with the best months o f
tant textile industry. Merchant shipbuilding reached its
the past two years. For the year 1943 coal production
in the District o f 179,723,000 tons exceeded that for the peak in the last half o f 1943 and has flattened off at that
level, while figures published by the Newport News Ship­
year 1942 by 1,175,O X tons.
C)
building and Dry Dock Company would seem
December average daily cotton consumption,
to indicate a similar trend.
on the other hand, declined 4 per cent from the
In the distribution field, department store
November level and was 5 per cent smaller
CTOKY
sales in 1943 exceeded those o f 1942 in all
than in December 1942. Consumption o f cot­
BUY
months, with the peak on a seasonally adjusted
ton by the mills o f the District in 1943 was
basis shown in November. Although Decem­
5,175,066 bales, which was 293,515 bales, or
ber sales did not rise from November levels by
5.4 per cent, less than in 1942, with practically
the normal seasonal amount, they were the
all o f the decline occurring in the last half year.
largest December sales o f record for this Dis­
Cigarette production in the Fifth District
trict and 8 per cent above December 1942.
experienced a rising trend throughout the year
1943 with the December seasonally adjusted
Wholesale sales o f five prominent lines main­
index within one point o f the year’s best level and 16
tained more or less o f a flat level throughout 1943 with
per cent higher than in December 1942.
the seasonally adjusted December index one per cent
The business o f manufacturing furniture became in­
lower than November, but 10 per cent above December
creasingly difficult as the year progressed with the short­
1942. Department store inventories declined somewhat
age o f both labor and materials intensified in the later
during 1943, but by a surprisingly small amount. Thus
months. Production, which held about even in the first
the record level o f sales was not appreciably at the ex­
half o f the year, declined in the latter part with December
pense o f inventories, but was effected by the store’s ability
output near the year's lowest level.
to obtain a larger quantity o f goods or higher-priced mer­
Construction activity for the most part trended down­
chandise.
ward during 1943 with the index o f contract awards in
Loans o f the forty-one weekly reporting banks at the
BUSINESS IN D E X ES— FIFTH FEDERAL RESERVE DISTRICT
Average Daily 1935-1939=100
Seasonally Adjusted

Bank Debits ...........................-...
Bituminous Coal Production*..
Building Contracts Awarded...
Building Permits Issued............
Cigarette Production .................
Cotton Consumption*.................
Department Store Inventories..
Department Store Sales.............
Electric Power Production.......
Life Insurance Sales............ .....
Wholesale Trade— 5 Lines........

*Not Seasonally Adjusted.



Dec.
1943
191
147
150
50
193
147
159e
187
219
112
173

Nov.
1943
197
124
207
50
194
153
155
215
217
120
174

Oct.
1943
197
140
163
64
182
146
165
191
212
120
176

Dec.
1942
183
132
369
49
166
154
164
173
199
81
157

% Change Dec. 1943 from
Nov. 1943
— 3
+ 19
—2,8
0
— 1
_

4

+ 3
— 13
+ 1
— 7
1

Dec. 1942
+ 4
+11
— 59
+ 2
+ 16
— 5
— 3
+ 8
+10
+ 38
+10

MONTHLY REVIEW

2

close o f 1943 stood at identically the same level as at the
end o f 1942 after having declined $48 million, or 17 per
cent, during the summer. Commercial and industrial
loans rose somewhat more than seasonally from the sum­
mer to the fall, and have since maintained most o f the
seasonal gain. They were, however, at the year end $6
million, or 4 per cent, below a year earlier. Loans on real
estate held at a flat level throughout the year, while other
loans for purchasing or carrying securities increased $13
million, or 118 per cent, from December 30, 1942, to

December 29, 1943. During the Second W ar Loan Drive
these loans rose from $11 to $19 million, and later re­
turned to the $11-million level, but in the Third W ar Loan
Drive they rose from $11 million to $50 million, and by
the year end they had declined to $24 million. Total in­
vestments o f the forty-one banks amounted to $984 mil­
lion at the end o f 1942. They reached a total o f $1,393
million early in November and declined steadily to $1,305
million at the end o f 1943, at which level they were $321
million, or 33 per cent, above the end o f 1942.

Tendencies In Tenant Farming
The national policy throughout the history o f this coun­
try has been to encourage and facilitate farm ownership
by those who operate the farms. From the beginning o f
the country’s independent existence up to 1891 the Federal
Government sold good land to farmers for $.50 cents,
$1.00, and $1.25 an acre. The Preemption A ct in 1841
recognized the vested right o f squatters who had estab­
lished farms on the public domain and proclaimed their
right o f possession. In 1862 the Homestead A ct enabled
persons to acquire land for farming purposes without
cost. Beginning with 1933 various Government activities
to aid low-income farm families was later consolidated
into the Farm Security Administration. The BankheadJones A ct became law in 1937 and this act established a
system o f tenant-purchase loans with the administration
o f this act given to the Farm Security Administration.
W ith the Government policy throughout its history de­
signed to foster the ownership o f farms by farm operators,
it might be supposed that ours is a land where operator
ownership would be next to universal. The facts, how­
ever, do not bear out any such supposition. For the
United States as a whole, the number o f farms operated
rose at a rapid rate from the middle o f the nineteenth
century to the turn o f the twentieth century. The num­
ber continued to increase for the next two decades, but
the rate o f increase slowed down progressively and there
was an actual decline between 1920 and 1930. The num­
ber o f tenants operating farms, however, increased much
more rapidly than the number o f farms between 1880 and
1935. In 1880, for example, only 25.6 per cent o f all
United States farms were operated by tenants, whereas
in 1930 tenants were operating 42.4 per cent o f the
Nation's farms, which was the highest proportion ever
attained. In 1935 tenants were operating 42.1 per cent
o f all farms, but by 1940, with farm prices and incomes
rising and land prices relatively low, their proportion had
diminished considerably to 38.7 per cent.
The question naturally arises: W here is tenant farming
prevalent and what are its causes? There are four areas
o f the country where tenant farming is most heavily conCONCENTRATION OF TENANT FARMING
April 1, 1940
All Farm Operation
% of
Number
U. S.
New England ............
Middle Atlantic ........
East North Central. . .
West North Central..
South Atlantic ..........
East South Central. .
West South Central..
Mountain ...................
United States . .
Fifth District




% of Farms
Tenants
Operated
by
% of
Number
U. S. Tenants

135,190
348,100
1,006,095
1,090,574
1,019,451
1,023,349
964,370
233,497
276,173
6,096,799

2.2
5.7
16.5
17.9
16.7
16.8
15.8
3.8
4.6
100.0

10,009
50,675
280,342
462,400
429,799
512,602
506,892
57,414
51,138
2.361,271

.4
2.1
11.9
19.6
18.2
21.7
21.5
2.4
2.2
100.0

7.4
14.6
27.9
42.4
42.4
50.1
52.6
24.6
18.5
38.7

732,111

12.0

281,340

11.9

38.4

centrated, both in actual numbers and in percentage o f
the total farms operated. These areas by census classifi­
cations are the W est North Central, South Atlantic, East
South Central, and W est South Central. These areas
cover the western part o f the Corn Belt and all o f the
Southern States. Each o f the areas have farm tenancy
in excess o f 40 per cent o f all operated farms. The four
areas account for 67 per cent o f all the Nation’s farms
and 81 per cent o f all tenants.
It should be noted that the greatest proportions o f farm
tenancy are in the cash crop areas, where cotton, tobacco,
wheat, and corn are the chief sources o f cash returns. It
is not quite clear why this should be the case, but these
products in the main are those that experience the widest
income variations between depression and prosperity, and
consequently land owners must have a safe margin o f
financial strength to hold their land during unprofitable
seasons. It is very difficult for tenants to rise to the
owner class in any type o f farming in which the element
o f risk is marked; in fact, this uncertainty o f financial
return from farming over any given period o f time is
probably one o f the chief obstacles to the elimination o f
tenancy. W ide variability in the returns from farming
which retards the operator from being an owner also
creates absentee ownership whether o f the direct specu­
lative type or o f the mortgage company type. This out­
side force prevents the land from being priced at a level
in keeping with its ability to maintain service on debts
acquired at higher prices which also fosters farm tenancy.
Such evidence as is available strongly indicates that
farm tenancy has been one o f the important factors con­
tributing to a depletion o f soil fertility and to the erosion
and abandonment o f much good acreage. It is not here
suggested, however, that farm tenancy is any more devas­
tating to the soil than lack o f knowledge of the proper
farm technique on the part o f an owner, but the two prob­
ably are close companions in their adverse contribution.
Land purchased for the purpose o f selling at a higher price
by an absentee owner is not usually rented on other than
a year-to-year basis. Tenants have no incentive under the
yearly arrangement (usually verbal) to improve the land
or even to maintain its condition, for in so doing its sale
price is enhanced, or its rental basis raised. It seems
probable, also, that many o f those tenants who do graduate
into ownership do so at times when land prices are highest
and later they revert to the tenant class when reduced
prices o f farm products make it too difficult to meet debt
service. Farm land rented for cash is also subject to
serious soil depleting practices, if used in the growth o f
the above mentioned cash crops, as cash renters are not
as a rule interested in paying rent for soil building crops.
Furthermore, if a farm rented for cash carries a mort­

MONTHLY REVIEW
gage the soil-depleting practices may be even worse than
under share-cropping. The maintenance o f the produc­
tivity o f these important land resources and the extension
o f or even the continuance o f existing levels o f tenant
farming do not seem to be compatible.
Farm tenancy in the states o f the Fifth Federal Reserve
District is about the same proportion as for the entire
United States, but there are notable differences between
the several states. The percentage o f farms operated by
tenants on April 1, 1940, was 38.4 per cent for this Dis­
trict compared with 38.7 per cent for the United States.
On the same date, however, 56.1 per cent o f all the farms
in South Carolina were tenant operated while only 22.7
per cent o f those in W est Virginia were so operated. T o ­
gether, North and South Carolina in 1940 accounted for
71.3 per cent o f all the farm tenants in the District, where­
as only 57.6 per cent o f all the farms were located in these
states. Although North Carolina accounted for 43.9 per
cent o f all the tenant farmers in this District the propor­
tion o f tenancy in 1940, at 44.4 per cent o f all operators,
was considerably lower than in South Carolina. Farm
tenants in Maryland and Virginia operated 26.1 per cent
and 26.9 per cent, respectively, o f all o f the farms in
those states in 1940; however, fairly high proportions o f
tenancy were shown in the tobacco, cotton, peanut, and
truck crop areas.
PERCENT OF FARMS OPERATED BY TENANTS, APRIL 1,1940
FIFTH FEDERAL RESERVE DISTRICT

3

est, and the longest periods o f occupancy in those areas
where the proportions o f tenancy were lowest.
Figures on tenant farming are available as far back as
1880 and for the states o f this District these figures pre­
sent some interesting contrasts. In all o f the states o f
the District the total number o f farms expanded 66 per
cent between 1880 and about 1920, but the total land in
farms over the entire period was not greatly changed.
Although the total number o f farm tenants in the District
rose 100 per cent in this period or at a more rapid rate
than the number o f farms, both Maryland and Virginia
showed downward trends in both the number o f tenants
and the percentage o f all farms operated by tenants since
1900, though low tobacco incomes in 1930 and 1935 oc­
curred concurrently with a reversal o f the downtrend in
Virginia.
W est Virginia, which has consistently had the lowest
percentage o f its farms operated by tenants o f any state
in the District, was likewise adversely affected by the late
depression. The largest percentage, 21.8 per cent, o f
the State’s farms operated by tenants prior to W orld
W ar I was in 1900, and by 1920 the proportion had fallen
to 16.2 per cent, and it would appear that an important
number o f the State’s tenant farmers purchased their land
in the boom between 1900 and 1920. In the main they
were able to hold on until the depression o f the 1930's
when tenancy established its highest level o f 25.8 per
cent o f all farms in the year 1935. Another factor in­
fluencing the trend o f tenant farming in the state is per­
haps the increase o f subsistence farming in the principal
coal mining areas o f the state during the low employment
period o f the depression. It is interesting to note that
the largest percentage o f farms operated by tenants in
the state are in the largest coal mining counties, which
may be due to the coal companies owning most o f the
land since these lands are largely rented for cash.
High farm tenancy in the Carolinas was a natural con­
sequence o f the freeing o f the slaves. This was more o f
a problem to South Carolina at the time than to North
Carolina and the earliest figures on farm tenancy seem to
bear this out. A s early as 1880 over 50 per cent o f South
Carolina’s farms were operated by tenants while less than
35 per cent o f North Carolina’s farms were run by ten­
ants in that year. The growth in cotton acreage and later
o f tobacco acreage was accompanied by marked increases
in the percentage o f farms operated bv tenants in each
state.
In South Carolina the highest proportion o f tenantoperated farms was established in 1925. The same pro­
portion held through 1930 but declined markedly during
the next decade. In North Carolina the expansion o f
tobacco acreage through the latter' 1920’s found tenant
farming increasing in proportion o f total farms through
1930.

The accompanying map shows the relative importance
o f tenant farming in the states composing the Fifth Fed­
eral Reserve District. A s was true for the United States
so are the largest percentages o f the farms operated by
tenants o f the District in the cotton, tobacco, peanut, and
truck farming areas. This map shows the percentage of
all farms in each county which are operated by tenants in
four classifications. It is significant that the shortest
length o f time which 1940 tenants had occupied the farms
they were then operating were most heavily concentrated
in those areas where the proportions o f tenancy were high­



PERCENTAGE OF ALL FARMS OPERATED BY TENANTS
1880....
1 8 9 0 ...
1 900..,.
1 910....
1920....
1925___
1 930....
193 5 ....
1940.....

Md.
30.9
31.0
33.6
29.5
28.9
26.4
26.5
27.2
26.1

Va.
29.5
26.9
30.7
26.5
25.6
25.2
28.1
29.5
26.9

W. Va.
19.1
17.7
21.8
20.5
16.2
16.3
18.6
25.8
22.7

N. C.
33.5
34.1
41.4
42.3
43.5
45.2
49.2
47.2
44.4

S. c.
50.3
55.3
61.1
63.0
64.5
65.1
65.1
62.2
56.1

5th Dist.
33.7
34.5
40.1
39.7
40.5
40.2
42.9
42.1
38.4

U. S.
25.6
28.4
35.3
37.0
38.1
38.6
42.4
42.1
38.7

The accompanying table shows the percentage o f all
farms in the states o f this District which were operated

4

MONTHLY REVIEW

by tenant farmers o f all types from 1880 to 1940. The
trends discussed above are clearly shown in the figures.
Some progress was made between 1935 and 1940 in
the reduction of the proportion o f farms operated by ten­
ants in all states o f the District, and in the Carolinas,
where tenancy is o f greatest importance, the downward
trend has been in evidence since 1930. It remains to be
seen whether the current speculation in land values will
have the effect of inordinately lowering the tenancy level
on. an unsound financial and temporary basis which will
later boomerang and create a worsened state o f affairs.
Though sufficient evidence to formulate an accurate con­
clusion in this regard is lacking, such information as is
available does not yet seem to indicate that current land
turnover is importantly involving the tenant operators.

Although tobacco growing is still a hand labor crop
the cotton picking machine has reached the stage o f per­
fection where in postwar years it may be expected to gain
wide usage. Widespread acceptance o f the cotton picker
would seem to materially lessen the practice o f tenant
farming, though all areas where cotton is now grown are
not o f the proper terrain to accommodate a mechanical
picker. In such areas the tendency may be expected to be
away from the production o f cotton and, in turn, tenant
farming. In areas where the cotton picker will be adapt­
able, it would seem logical to expect an enlargement o f
the size o f the individual farms and a tendency to reduce
farm tenancy. Thus some long-run economic tendencies
would seem to work toward a reduction in the level o f
farm tenancy but the repercussions, both economic and
sociological, will remain as perplexing problems o f policy.

Demand Deposits After the War
An increasing amount o f attention, both by bankers and
by the interested public, has recently been devoted to the
problem of demand deposits in the postwar period. In the
past three years there has been a tremendous increase in
the total of demand deposits, and though not all commu­
nities have gained in the same proportion, the increase has
nevertheless been widely distributed. The question arises,
therefore, whether this process of deposit increase will
continue in the postwar period, or whether deposits will
remain the same or even decrease. And even more im­
portant from the point o f view o f the individual bank is
the possibility o f a shifting o f deposits between commu­
nities, even if the total o f deposits should remain un­
affected.
The principal reason for the increase in deposits in the
war period has been the sale o f Government securities to
the banks. W hen securities are sold to the nonbanking
public, deposits are decreased at the time o f the purchase;
but the subsequent expenditure o f the funds by the G ov­
ernment increases income in the hands o f the public, thus
increasing deposits once more. The total o f deposits
therefore remains the same. But when the banks pur­
chase securities, funds are put at the disposal o f the
Government, with no simultaneous drawing-down o f de­
posits ; and the subsequent expenditure creates a net addi­
tion to total income and a net addition to total deposits.
The increase in deposits that has taken place in the war
period can be accounted for almost entirely by such pur­
chases o f securities by the banks. The only possible
limitation to such a process o f deposit expansion is an in­
sufficiency o f reserves, and this can, and has, been cir­
cumvented by Federal Reserve action designed to create
additional reserves and make possible further purchases
o f securities.
W ill this process o f deposit increases be continued or
reversed in the postwar period? O f course no unquali­
fied answer can be given, for the postwar level o f total
deposits will depend on a number o f factors which will in
some instances exert opposite influences, and whose po­
tential quantitative importance cannot be known at pres­
ent. But a statement o f some o f the more important
determinants can be valuable from the point o f view o f
the possibilities involved.
There are four principal factors which will affect the
level o f demand deposits in the postwar period. One o f
these is the flow o f currency into or out o f circulation.



A return flow o f some o f the very large increase in cur­
rency circulation that has taken place in the war period
would increase the total o f deposits. Should the cur­
rency have been held to some extent for tax evasion pur­
poses, a return to the banks in the form o f deposits is to
be expected, whether the return is made directly by
present holders, or indirectly through producers and
traders when such holdings are used for purchases. T o
the extent that some o f the increase in currency circula­
tion has been necessitated by migration to new localities
where banking connections have not been established, a
considerable return flow is to be expected when remigration or more or less permanent settlement takes
place. A s for the increase in currency circulation neces­
sitated by increased income payments and prices, little
can be said about the possible postwar return flow in the
form o f deposits. But it is unlikely that there will be
any further increase in currency circulation on this score,
even if the level o f income remains high and prices rise
somewhat. On balance, therefore, some return flow o f
currency circulation is likely and can be expected to lead
to an increase in the total o f demand deposits.
A second factor which will affect the level o f demand
deposits is bank lending. A n increase in loans by the
banks would lead to an increase in demand deposits for
the banking system taken as a whole. It is difficult to
say whether or not such a development is likely on any
significant scale. The recent survey o f deposit owner­
ship carried out by the Federal Reserve System indicates
that about 70 per cent o f the total o f demand deposits o f
individuals, partnerships, and corporations is owned by
business concerns o f all kinds, and that perhaps threefourths o f the $18 billion increase in demand deposits
since the end o f 1941 may have been in business accounts.
For the country as a whole, it is quite probable that even
reconversion needs will not necessitate an important in­
crease in borrowing from banks. For individual commu­
nities, however, bank borrowing and resultant deposit in­
creases will depend on investment and sales prospects, and
on the needs o f local concerns for additional working
capital.
A third factor affecting the level o f deposits is the effect
o f gold movements and o f the level o f international lend­
ing. A net inflow’ o f gold would increase the total o f
deposits. Here again it is difficult to say whether such a
movement is likely to take place. W e can expect, after

MONTHLY REVIEW
the war, a heavy demand for American products by fo r­
eign countries, for relief, for rehabilitation, and for long­
term investment. Should Americans, as individuals or
business concerns, give or lend heavily to foreign coun­
tries, current payments by means o f gold, and hence de­
posit increases, would thereby be averted. On the other
hand, to the extent that foreign needs are met by Govern­
ment grants or by some form o f postwar lend-lease, the
expenditures would constitute a net addition to Govern­
ment borrowing or a reduction in the amount o f debt
retirement. Thus deposits would increase to some extent,
or at least the possible reduction o f deposits would there­
by be less. In addition, should an international currency
stabilization plan be set up, it is quite likely that deposits
would increase on that account, though the amount o f the
increase would depend both on the mechanism o f the plan
and on the extent of our commitment to it. Deposit in­
creases resulting from an inflow o f gold will thus depend
considerably on our attitude towards foreign relief and
lending, in addition to disposable stocks o f gold held by
foreigners.
Finally, and perhaps most important, the fourth factor
affecting the level o f demand deposits is the total o f the
public debt and changes in the ownership o f the debt.
A n increase in the debt would in all probability lead to an
increase in deposits, through purchase o f additional se­
curities by the banks. But even should the debt be re­
duced, there is the possibility o f a net sale o f Government
securities beyond the amount which the Government will
be in a position to redeem. In this case banks would have
to increase their purchases o f securities, unless the yields
on these securities should be allowed to rise to the point
where the public is induced to maintain their holdings, on
balance. Barring such a decline in the price o f Govern­
ments, the purchase o f securities by the banks will increase
demand deposits in the same way as purchases in the war
period have. It is difficult to say how great the demand
for cashing-in o f securities will be. Many consumers will
probably attempt to purchase durable goods denied them
during the war, and will plan to use their savings bonds
to this end. Many producers, in addition, will seek to
convert securities into cash for renovation and expansion.
Should such cashing-in o f securities exceed retirement,
and assuming that the prices o f securities will not be
allowed to decline, banks will increase their purchases and
the total o f demand deposits will rise.
The factors making for a decline in total deposits would

5

be the reverse o f the above. A n increase in currency in
circulation, a decrease in loans by the banks, an outflow
o f gold from the country, retirement o f the debt at a
faster rate than cashing-in by the public, and a net ab­
sorption o f debt by the public from the banks— all o f
these would tend to decrease the total demand deposits.
It is difficult to say with certainty whether the factors
making for an increase will be more powerful than those
making for a decrease, but on balance such an outcome
is not unlikely.
Thus far we have dealt only with the total o f demand
deposits. Even should the total increase, there may still
be important shiftings o f deposits between communities,
so that some will lose and others will gain. In the war
period the rate o f deposit increase has not been uniform
throughout the country: the greatest relative increases
have been experienced by those communities where disbursment o f income, directly or indirectly connected with
war activity, has been the greatest. In the postwar pe­
riod, those communities which are able to maintain or
increase their income levels will gain deposits. Con­
versely those communities which are adversely affected
by cessation o f war and which are unable to re-establish
profitable peacetime pursuits will lose deposits.
D em and, deposits in any particular community after
the war will be intimately connected with the general
business prosperity o f that community. A high level o f
investment and income will materially ease the problem
of management for banks taken as a whole. But the
shift to peacetime production is bound to create shifts
in income and deposits between particular communities,
and to that extent particular banks will be affected differ­
ently, depending on their surrounding business conditions.
Aside from the level o f national income, there are likely
to be important changes in the composition o f the national
product that will affect particular communities. The post­
war period is likely to witness a decline in the relative
importance o f heavy industries and a rise in the relative
importance o f consumer goods industries, especially dur­
able consumer goods. In addition, even should national
income remain high, agricultural income may constitute a
smaller proportion o f total income than it has in the war
period, once foreign demand for relief and rehabilitation
has abated. Changes in the composition o f total income,
and shifts between communities, will be highly important
to particular communities and their banks, whether or not
the total o f demand deposits should increase.

BUSINESS INDEXES - FIFTH FEDERAL RESERVE DISTRICT
1935-39=100)

Nov.
1943
BANK DEBITS ........................................
DEFT. STORE SALES.............................
DEPT. STORE INVENTORIES..............
ELECTRIC POWER PROD.....................
CIGARETTE PRODUCT.— 5th DIST...
LIFE INS. SALES.....................................
BITUMINUOUS COAL PROD...............
BUILDING CONTRACTS .....................
BUILDING PERMITS .............................
COTTON CONSUMPTION ...................
FURNITURE ORDERS ..................... ..
FURNITURE SHIPMENTS .................
FURN. UNFILLED ORDERS...............
WHOLESALE TR.— 5 LINES...............
Drugs ......................................................
Dry Goods ..............................................
Groceries ................................................
Hardware ................................................




.
,
.
.
.

.
,
,
.
.
.
.

Oct.
1943

ADJUSTED____________________NOT ADJUSTED
Nov. 1943
% dig from
Sept.
Nov.
Oct.
Nov.
Last
Last
1943
1943
Year
1943
1942
Mo.

197
215
155
217
194
120
124
207
50
153
184
142
452
174
193
110
187
113
239

197
191
165
218
182
120
142
163
64
146
117
112
381
176
213
136
186
115
191

239
193
177
220
174
138
150
134
36
154
95
116
307
159
205
124
167
105
174

184
187
161
193
165
84
148
442
43
161
169
164
591
154
180
138
154
128
290

+
+
—
4--+
+
+
+

-----+

-+

0
13
6
0
7
0
13
27
22
5
57
27
19
1
9
19
1
2
25

~r 7
+ 15
4
+ 12
+ 18
+ 43
16
— 53
+ 16
— 5
9
+
— 13
—
24
+ 13
7
+
—
20
21
+
—
12
— 18

200
252
185
214
194
122
127
178
44
161
183
141
405
176
197
143
187
117
172

210
212
190
215r
186
119
147
152
57
154
100
137
371
187
217
184
193
128
205

Sept.
1943

Nov.
1942

230
208
189
210
181
122
154
133
38
162
115
153
425
181
215
194
185
122
254

179
220
192
190
158
85
140
381
38
163
161
156
SD
O
150
177
173
148
126
200

Nov. 1943
% chg. from
Last
Last
Year
Mo.
— 5
+ 19
__ 3
0
4- 4
+ 3
— 14
+ 17
— 23
+ 5
+ 83
+ 3
+ 9
—
6
—
9
— 22
— 3
— 9
— 16

+ 12
+ 15
— 4
+ 13
+ 23
+ 44
— 9
— 53
+ 16
— 1
+ 14
— 10
— 20
+ 17
+ 11
— 17
+ 26
— 7
— 14

MONTHLY REVIEW

6

FEDERAL RESERVE BANK OF RICHMOND

DEBITS TO INDIVIDUAL ACCOUNTS

(All Figures in Thousands)

000 omitted

January 12
1944
ITEMS
Total Gold Reserves .................
$1,,143,180
23,542
Other Reserves...........................
Total Reserves ....................... .
$1,,166,722
2,210
Bills Discounted .......................
233
Gov’t Securities, Total.............. .. $ 584,909
110,902
46,000
170,647
Certificates .............................
257,360
Bills ........................................
$ 587,352
Total Bills & Securities..............
.
$ 117,544
.. $ 21,649
,893,267
,
Fed. Res. Notes in Cir............... • $1:13-7,937
Deposits, Total ........................... .. $ 636,912
530,985
Members’ Reserves ................
48,363
U. S. Treas. Gen. Acct.
54,101
3,463
Other Deposits .......................
.. $ 98,933
Deferred Availability Items
217
.. $ 19,238
.= $1,893,267
Total Liabilities .....................

Change in Amount from
12-15-43
1•13-43
+ 162,837
+ 80,499
597
5,562
+
+
+ 163,434
+ 86,061
2,003
— 1,440
+
3
—
—
443
— 30,676
+ 241,127
— 57,718
— 18,880
— 35,316
— 9,287
— 7,918
+ :107,712
+ 226,449
5,409
+
+ 242,687
— 32,119
— 39,279
+ 14,941
5,332
■
— 2,263
+
+ '418,799
* + 19,995
■
+ 358,628
+ 12,146
+ 28,471
+ 49,213
8,406
3,617
+
+
+ 24,593
+ 30,148
— 3,885
22,700
+
643
—
— 7,252
— 20,761
8,411
+
—
—
129
163
268
+ 2,710
+
+ 418,799
19,995
+

41 REPORTING MEMBER BANKS— 5TH DISTRICT
(All Figures in Thousands)
ITEMS
,
Bus. & Agric. Loans............
All Other Loans..................... .
Total Security Holdings..............
U. S. Treas. Bills .....................
U. S. Treas. Certificates ..........
U. S. Gov. Bonds ....................
Obligations Gov. Guaranteed..
Other Bonds, Stocks & Sec.. . .
Cash Items in Process of Col... .

,
Total Demand Deposits................ .
Deposits of Individuals . . . . . . .
Deposits of U. S. G o v ............
Deposits of State & Local Gov.
Certified & Officers’ Checks...
Total Time Deposits.....................
Deposit'? of Individuals............
Other Time Deposits...............
Liabilities for Borrowed Money. .
All Other Liabilities. . . . ............ .
Capital Account .........................
,

January 12
1944
$ 276,171
131,332
50,167
94,672
$1,291,367
100,660
254,895
168,580
674,353
38,419
54,460
$ 86.391
$ 151,991*
$ 37,007
$ 287,154
$ 64,776
$2,194,857
$1,769,352
1,075,387
206,272
79,020
392,891
15,782
$ 248 176
231,549
16,627
$
0
$ 66,273
$ 111,056
$2,194,857

Change in Amount from
12-15-43
1-13-43
717
+
6,302
+
— 2,697
— 1,899
—
729
588
+
2,826
+
8,9S0
+
— 50,710
+ 299,286
+
3,617
— 31,292
-— 10,849
+ 126,113
—
175
+ 49,519
5
+ 147,610
+
— 6,784
— 13,116
— 14,457
— 1,615
— 12,553
+
3,936
— 6,691
— 35,459
—
474
+
2,363
9,707
— 25,051
+
—
891
+
8,957
— 60,895
+ 260,337
— 63,463
+ 223,915
— 19,584
+ 169,963
— 23,912
+ 91,263
3,543
— 9,010
+
— 11,823
— 29,388
— 11,687
+
1,087
5,5^0
+ 31,081
+
+ 27,^77
5.660
+
100
—
+
3,4^4
—
1,^00
0
—
398
+
352
—
1,094
+
4.989
+ 260,337
— 60,895

♦Net figures, reciprocal balances being eliminated.

MUTUAL SAVINGS BANK DEPOSITS
9 Baltimore Banks
Total Deposits

___

Dec. 31, 1943
$258,926,658

Nov. 30, 1943
$256,586,779

Dec. 31, 1942
$231,298,969

COTTON CONSUMPTION-FIFTH DISTRICT
In Bales
MONTHS
N. Carolina S. Carolina Virginia District
December 1943.................
227,009
179,361
19,714
426,084
November 1943..................
230,627
176,086
20,695
427,4n
8
December 1942.................
242,454
184,090
21,227
447,771
12 Months, 1943..................
2,789,998
2,136,682
248,386 5,175,066
12 Months, 1942..................
2,901,201
2,232,437
264,943 5,398,581




Dec.
1943
Dist. of Columbia
Washington ................ ..
Maryland
Baltimore ...................
Cumberland ................
Frederick ...................
Hagerstown ..............
North Carolina
Asheville ...................
Charlotte ....................
Durham .....................
Greensboro .................
Kinston .....................
Raleigh .......................
Wilmington ................

$ 517,378

% Change
from
Dec. 1942

% Change
12 Mos.
from
1943
12 mos. *42

4

$ 5,086,702

808,492
13,518
12,186
18,625

+ 10
+ 14
+ 2
+ 18

7,351,280
124,425
78,069
176,101

+ 17
+ 14

25,580
123,922
76,967
35,829
7,573
57,400
37,259

231,652
1,489,036
702,288
336,279
82,408
653,488
351,409
119,136
726,923

+
—
+
+

73,521

+ 6
— 12
+ 48
— 2
— 5
0
+ 7
+ 37
— 8

41,010
55,850
38,346
21,719

+ 2
— 1
— 9
0

409,638
557,856
407,371
226,652

14,482
24,814
24,293

+ 9
+ 30
+ 4
— 3
+ 3
— 2
+ 4
— 5

88,855
204,770
227,898
284,341
1,287,833
150,958
3,085,853
428,133

Winston-Salem ..........
South Carolina
Charleston .................
Columbia .....................
Greenville ...................
Spartanburg ..............
Virginia
Charlottesville ..........
Danville .....................
Lynchburg ..................

+

+

9

+ ’?
10
8
13
15

— *4
+ 26

+ 15
+ 8
+ 11
+ 9
+
+

Norfolk . . . .................
136,984
Portsmouth ............... .
18,209
Richmond ..................
349,618
Roanoke .....................
41,863
West Virginia
Bluefield ................
27,931
+ 16
160,984
Charleston ..................
94,270
+ 4
830,202
Clarksburg ..................
17,412
+ 19
104,306
Huntington ................
32,437
299,812
+ 5
Parkersburg ........
16,022
154,41)6
+ 7
District Totals .......... . . $2,801,262
+ 5
$26,419,154
Cumulative figures for 12 cities not comparable with 1942 data.

3
6

+ ii
+ 8
+ 12 '

COMMERCIAL FAILURES
Number of Failures
PERIODS
District U. S.
December 1943.................
2
145
November 1943.................
2
155
December 1942................
18
506
12 Months, 1943.................
47
3,021
294
9,405
12 Months, 1942.................

Total Liabilities
District
U. S.
5,000
$ 2,055,000
110,000
2,402,000
192,000
6,950^000
$1,105,000
$ 45,339,000
4,390,000
100,763,000
$

Source: Dun & Bradstreet.

COTTON CONSUMPTION AND ON HAND— BALES
Dec.
Dec.
1943
1942
Fifth District States:
Cotton consumed ..............
426,084
447,771
Cotton Growing States:
Cotton consumed ..............
749,456
810,242
Cotton on hand Dec. 31 in
Consuming establishments 2,101,199 2,150,451
Storage & compresses.
12,443,511 13,290,198
United States:
Cotton consumed ...............
852,016
935,870
Cotton on hand Dec. 31 in
Consuming establishments 2,400,170 2,549,911
Storage & compresses----- 12,649,909 13,573,163
22,596,322 22,923,406

Aug. 1 to Dec. 31
1943
1942
2,102,755

2,230,436

3,741,050

4,073,208

4,271,407

4,706,523

RAYON YARN DATA
Dec. 1943

Nov. 1943

Dec. 1942

Rayon Yarn Shipments Lbs........
Staple Fiber Shipments, Lbs___

43.200.000
14.500.000

42.900.000
13.900.000

41,000,000
13,200,000

Rayon Yarn Stocks, Lbs.............
Staple Fiber Stocks, Lbs.............

6,100,000
1,800,000

7.200.000
2.600.000

8.700.000
3.300.000

Source : Rayon Organon.

'

7

MONTHLY REVIEW

SOFT COAL PRODUCTION IN THOUSANDS OF TONS

BUILDING PERMIT FIGURES
Fifth Federal Reserve District
December 1943 and
and
Annual Valuation, 1943
Dec. Valuation Figures
1942
1943
Maryland
Baltimore ............ .
Cumberland ........
Frederick ............
Hagerstown ........
Salisbury ............
Virginia
Danville ..............
Lynchburg ..........
Norfolk ................
Petersburg ..........
Portsmouth ........
Richmond ............
Roanoke ..............
West Virginia
Charleston ............
Clarksburg ..........
Huntington ........
North Carolina
Asheville ............
Charlotte ............
Durham ...............
Greensboro ..........
High Point ........
Raleigh ................
Rocky Mount . . . .
Salisbury ............
Winston-Salem ..
South Carolina
Charleston ..........
Columbia ..............
Greenville ............
Spartanburg ........
Dist. of Columbia
Washington ........
District Totals ..,

$1,076,640
1,050
2,652
68,967
4,830

1942
and 1942
|
! Annual Valuation Figures
1942
j
1943

5,755
5,226
102,928
60,000
31,905
55,958
7,465

2,664
7,042
826,399
0
4,325
46,152
7,$83

$12,787,743
304,773
36,157
445,968
84,584

$20,313,583
166,085
83,215
844,623
373,791

105,337
74,301
2,973,978
64,740
3,419,488
1,375,567
153,943

$ 574,730
5,475
1,715
15,825 1
4,121

317,332
413,344
8,172,783
74,572
1,346,292
3,153,564
520,004

14,235
175
190

8,757 i
|
300 j
j
923 |

280,932
25,621
196,223

682 836
98,836
873,950

4,410
30,400
32,030
8,178
14,321
465
200
585
29,598

1,675 !
9,571 I
6,825
4,189
10,075
1,570
650
1,975
44,953

130,475
274,811
455,928
125,839
274,384
182,539
16,565
54 052
343.754

135,960
1,188,770
1,451,693
634,544
369,647
628,612
112,265
149,779
894,527

1,224,004
223,288
128,529
284,547

1,824,836
1,354,458
756,034
568,154

490,380
3,615
5,150
13,681

102,358
20,035
11,350
8,575

!
1
j
|

921,452

480,388 i

19,278,051

$2,580,808 i

$45,326,121

Maryland . . . .
Dist. of Col...
Virginia . . . .
West Virginia
No. Carolina.
So. Carolina.
Fifth District

% change from
Dec. 1942
+ 4
+ 11
+ 20
+ 5
+ 6

12 Mos.
1943
158,356
19,620
1,747
179,723
589,000
31

% change from
12 Mos. *42
4- 1
— 1
— 8
+ 1
+ 2

RETAIL FURNITURE SALES
Percentage Changes in Dec. and 12 Months 1943
Compared with Compared with
December 1942 12 Mos. 1942

STATES

Maryland (5)* ...........................
Dist. of Columbia (4 )*..............
Virginia (27)* ...........................
West Virginia (11)*..................
North Carolina (19)*.................
South Carolina ( 1 4 ) * .................
Fifth District (80)*..................

— 23
— 3
— 8
— 2
— 6
— 11
— 10

— 20
— 13
— 1
+ 4
+ 6
— 5
— 7

Individual Cities
Baltimore, Md. (5)*..................
Washington, D. C. (4)*..............
Danville, Va. (3)*.......................
Lynchburg, Va. (3)*...................
Richmond, Va. (7)*...................
Charleston, W. Va. (4 )*..........
Charlotte, N. C. (5)*.................
Winston-Salem, N. C. ( 3 ) * ....
Columbia, S. C. (4 )...................

— 23
— 3
+ 22
— 11
— 10
— 18
— 19
+ 11
— 11

— 20
— 13
+ 11
— 11
+ 9
— 1
— 1
.
+
_15
O

♦Number of reporting firms.

$78,498,819

CONSTRUCTION CONTRACTS AWARDED
STATES

Dec.
1943
13,836
1,756
144
15,736
52,600
30

30,994,700

$2,621,933

REGIONS
West Virginia . . . .
Virginia ................
Maryland ..............
5th District . . . .
United States . .
% in District..

Nov. 1943

% chg. from
Nov. 1942

$ 9,529,000
4,669,000
14,847,000
353,000
7,550.000
6.862.0M
$43,810,000

— 50
+ 21
— 34
__ 97
— 81
+ 222
— 53

11 Mos.
1943

c chg. from
fc
11 Mos. ’42

$ 97.735,000
30,929,000
162,483,000
16,674,000
86,138,000
49,202,000
$443,161,000

— 54
— 70
— 53
— 74
— 44
— 51
— 56

Note: 1942 collection percentages in parentheses.

TOBACCO MANUFACTURING
Dec.
1943

% Change
from12 Mos.
Dec. 1942

DEPARTMENT STORE TRADE
Richmond
Baltimore
Washington
Other Cities
District
Percentage change in Dec. 1943 sales, compared with sales in Dec. 1942
+
6
+ 3
— 2
+16
+ 3
Percentage change in 12 months’ sales, compared with 12 mos. in 1942
+ 20
+10
+ 5
+25
+11
Change in stocks on Dec. 31, 1943, from stocks on Dec. 31, 1942
+
1
+ 6
— 6
+
3
0
Change in outstand’g orders Dec. 31, 1943, from orders on Dec. 31, '42
+ 54
+ 53
+108
+108
+ 79
Change in receivables, Dec. 1, 1943 compared with December 1, 1942
+
4
— 2
-— 16
0
— 8
Percentage of current receivables as of Dec. 1, 1943, collected in Dec.
58(63)
54(55)
60(58)
60(60)
57(58)
Percentage of instalment rec’v’bles as of Dec. 1, 1943, collected in Dec.
35(33)
36(32)
25(21)
36(27)
29(24)

% Change
from
1943 12 Mos. ’ 42

Smoking — chewing to­
bacco (Thousands of lbs.)
21,980
+ 9
259,588
Cigarettes (Thousands).. 22,799,081+ 16
257,737,351
Cigars (Thousands) ........
403,858
— 41
5,161,241
Snuff (Thousands of lbs.).
3,849
— 3
46,047

— 7
+ 9
— 17
+ 12

Maryland

Dist. of Col. Virginia West. Va. N. Carolina S. Carolina
Percentage change in Dec. 1943 sales from Dec. 1942 sales, by S ta tes:

+ 3
— 2
+ 8
+ 9
+ 9
4-11
Percentage change in 12 mos.’ sales, 1943, compared with 12 mos. in ’42:
+ 10
+ 5
+18
4-12
4-21
+25

WHOLESALE TRADE, 204 FIRMS
AUCTION TOBACCO MARKETING
Producers’ Tobacco
STATES
Dec. 1943
No. Carolina (Flue-cured). . . 13,710,-026
(Burley) ........
3,919,720
No. Carolina, Total.............. 17,629,743
Virginia (Flue-cured) ..........
9,740,020
(Fire-cured) ..........
1,302,438
(Burley) ..............
6,899,772
(Sun-cured) ..........
165,226
Virginia, Total ..................... 18,107,456
District Total, December... 35,737,202
N. C. season to 12-31............ 528,889,243
Virginia season to 12-31___ 109,580,025
S. C. entire season................ 77,588,742
District, season to 12-31... 716,058,010

Sales, Lbs. Price per hundred
Dec. 1942
1943
1942
2,697,762
$38.53
$35.71
3,431,440
49.44
41.16
6,129,202
40.76
38.76
1,345,222
39.21
35.50
2,896,506
26.69
16.61
5,105,355
48.83
43.89
430,520
39.92
18.95
9,777,603
41.98
33.56
15,906,805
41.38
35.56
556,413,042
40.76
39.49
99,262,078
41.55
41.19
87,385,846
38.86
37.37
743,060,966
40.68
39.47

Note: Season sales include figures for markets closed prior to December.




LINES
Auto Supplies (13)*........
Drugs & sundries (8 )*..
Dry Goods (6)*.................
Electrical goods ( 9 ) * ....
Groceries (61)* ..............
Hardware (11)* ............
Industrial supplies (8)*.
Paper & products (9)*..
Tobacco & products (5)*
Miscellaneous (74)* . . . .
District Average (204)*

Net Sales
Stocks
Dec. 1943
Dec. 31, 1943
compared with
comparc■ with
d
Dec.
Nov. Dec. 31 Nov. 30
1942
1943
1942
1943
— 6
+ 26
— 6
— 5
+ 8
+ 11
+ 40
+ 10
+

0
4

Source: Department of Commerce.
♦Number of reporting firms.

— 1
+ 5
— 33
— 7
— 4
— 12
— 1
— 4
__ 2
—1
— 6

Ratio Dec.
collections
to acc’ts
outstand’g
Dec. 1

— 11

0

— 25
— 45
+
7
0
— 10
— 11

+ 25
— 10
— 1
+ 8
+ 2
4- 7

104
108
83
76
157
98
99
90

+
—

+ 12
+ 7

120
107

'9
6

8

MONTHLY REVIEW

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

Industrial activity declined slightly in December from
the record levels reached in preceding months. Prices of
commodities at retail showed little change and distribution
was maintained in large volume.

Industrial Production
The Board’s seasonally adjusted index o f industrial pro­
duction, which had been at 247 per cent o f the 1935-39
average in October and November, declined to 245 in
December, reflecting largely decreases in output o f steel
and chemicals.
Steel production dropped 6 per cent in December to
the same rate as in December 1942. Output for the year,
however, totaled 88.9 million tons, which was 2.8 million
tons larger than the year before. Activity in the trans­
portation equipment and machinery industries was main­
tained in December at a high level. The number o f air­
craft accepted during the month was slightly larger than
in November and was at approximately the average month­
ly rate scheduled for 1944. The average weight o f planes
to be produced, however, will continue to increase. De­
liveries of merchant vessels in December were the largest
on record, bringing the total for the year to 19,238,626
deadweight tons, as compared with 8,089,732 tons in 1942.
Lumber production in the last two months o f 1943 was
above the level of a year ago in contrast to the first 10
months o f 1943 when output averaged 10 per cent below
the same period in 1942.
Activity in the chemical industry declined 5 per cent
in December, reflecting a large reduction in output of
small arms ammunition in accordance with plans of the
armed forces. Cotton consumption declined further in
December to a level 13 per cent below December 1942.
Newsprint consumption declined seasonally. Further re­
strictions on its use, as well as on the use of printing paper
in books and magazines, were made effective January 1,
1944, owing to inadequate supplies o f pulpwood. Out­
put in the petroleum refining and rubber products indus­
tries increased further.
Crude petroleum production showed little change in De­
cember and output o f coal was restored to a high level.
Bituminous coal production for the year exceeded 1942 out­
put by 1.6 per cent. Iron ore production continued to de­
cline seasonally in December and output for the year was
approximately 4 per cent below 1942.
The value o f construction contracts awarded in Decem­
ber, according to reports o f the F. W . Dodge Corporation,
was greater than in recent months, reflecting mainly in­
creased Federal awards for manufacturing and other nonresidential buildings.

Distribution
December department store sales were slightly larger
than a year ago and combined with November sales were




11 per cent larger than in the corresponding months last
year. For the year 1943 total value o f sales reached a new
peak— about 12 per cent larger than 1942 and 55 per cent
larger than 1939. Sales during the first two weeks o f
January were about the same as last year.
Railway freight traffic in December and the first part
of January was unusually heavy for this season. For 1943
total freight carloadings were about the same as'in 1942.
Shipments o f grain and livestock averaged about 20 per
cent above 1942, while loadings o f ore, forest products,
and less-than-carload-lot freight averaged 8 per cent low er.:

Commodity Prices
Wholesale prices o f agricultural and industrial com ­
modities showed little change from the middle o f Decem­
ber to the middle o f January and the general index o f the.
Bureau o f Labor Statistics remained at 103 per cent o f
the 1926 average.
Retail food prices declined slightly from mid-November
to mid-December, while other groups o f cost-of-living
items increased and the total index advanced .2 to 124.4
per cent o f the 1935-39 average.

Bank Credit
During the latter part o f December and the first two
weeks of January excess reserves at all member banks were
maintained at an average level close to 1.1 billion dollars.
Purchases o f Government securities by the Federal R e­
serve Banks offset the effect on reserves o f increases in
nonmember deposits at the Reserve Banks and the increase
in currency in circulation. The System portfolio o f G ov­
ernment securities increased by 900 million dollars in the
five weeks ending January 19. A fter allowance for ex­
pected seasonal movements, currency in circulation in­
creased less in December than in November but there was
little post-Christmas return flow.
Loans and investments o f reporting member banks in
101 leading cities, which had been decreasing steadily since
late October, declined by an additional 620 million dollars
during the five weeks ended January 19. A large part o f
the decline reflected sales o f Government securities, prin­
cipally Treasury bills, to the Federal Reserve Banks.
Holdings o f United States Government securities were
reduced by 370 million dollars. Total loans declined by
230 million dollars, representing reductions in loans to
banks, in commercial and industrial loans, and in “ other”
loans, mainly instalment credit. Adjusted demand de­
posits, which had increased sharply from the middle o f
October to the middle o f December, declined somewhat
over the year-end, but increased again in the first half of
January. United States Government deposits at banks
continued to decline.