Full text of Economic Quarterly (Federal Reserve Bank of Richmond) : July 1927

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MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

W ILLIAM W. H O XTO N, CHAIRMAN AND FEDERAL RESERVE AGENT

JULY 31, 1927

RICHMOND, VIRGINIA
DISTRICT SUMMARY. Business in the
Fifth Federal reserve district was relatively
better in June than in May, although there was
a seasonal decline in the total volume. At the
turn of the year, both favorable and unfavorable
influences are at work, and it is difficult to strike
a balance between them. The greatest improve­
ment in comparison with conditions a year
earlier is noted in the textile industry, which at
present occupies a more favorable position than
for several years. The agricultural outlook in
the district is also probably better than it was
last year, except for growers of fruit, but it is
difficult to draw conclusions on probable yields
so early in the growing season. West Virginia's
coal industry is producing a larger tonnage than
would be marketable without the influence of the
strike of miners in the central competitive field,
and the tobacco industry of the district is in
process of expansion. Member banks are bor­
rowing less at the reserve bank than in July
1926, and deposits in member banks are at
record levels, testifying to the ability of the pub­
lic to purchase merchandise in large quantities.
Wholesale trade is about at seasonal levels, and
the wholesale dry goods trade in distinctly im­
proved this year.
Most of the unfavorable factors may be traced
back to a district wide recession in construction
work in comparison with last year. For nine
consecutive months the volume of work provided
for in building permits issued in the district's
leading cities has been less than during the cor­
responding months of the previous year. Labor
is not so well employed as a year ago, and in
most of the cities there is a considerable amount
of unemployment. This situation is reflected in
retail trade, which last month and during the
first half of this year ran moderately behind the
volume of trade reported in 1926. Business fail­
ures have increased this year in both number
of insolvencies and in liabilities involved. Debits
to individual accounts in clearing house banks,
while increasing seasonally during the past five
weeks in comparison writh the preceding like
period this year, were lower than during the cor­
responding five weeks of 1926, chiefly due to a
large decrease in Baltimore.
RESERVE BANK OPERATIONS.

Between

June 15th and Ju ly 15th, this year, rediscounts

for member banks held by the Federal Reserve


Bank of Richmond rose from $19,590,000 to $23,411,000, an unusual expansion in credit needs at
this season of the year. Country banks reduced
their borrowing somewhat during the month,
but city banks increased their rediscounts enough
to counterbalance the reduction in rural sections.
Federal reserve notes in actual circulation con­
tinued to decline, falling from a total of $61,880.000 at the middle of June to $60,176,000 at
the middle of July. Total bill holdings of the
Federal Reserve Bank of Richmond rose from
$27,919,000 on June 15th to $33,339,000 on July
15th, the increase being composed of approxi­
mately $4,000,000 in rediscounts and $1,500,000
in bankers' acceptances purchased from member
banks and in the open market. Member bank
reserve deposits decreased slightly last month,
declining from $70,888,000 on June 15th to $69,266.000 on Ju ly 15th. The several changes in the
items mentioned caused a reduction in the cash
reserves of the Federal Reserve Bank of Rich­
mond from $98,738,000 at the middle of June to
$89,157,000 at the middle of July, and lowered the
ratio of cash reserves to note and deposit liabili­
ties combined from 74.11 per cent to 67.75 Per
cent.
Rediscounts held for member banks amount­
ing to $23,411,000 on Ju ly 15, 1927, showed a
marked drop from rediscounts totaling $ 4 1,111,000 held by the Federal Reserve Bank of Rich­
mond on Ju ly 15, 1926. Notes in circulation
totaling $60,176,000 on the 1927 date were also
considerably less in volume than $70,591,000 in
circulation a year ago. The circulation of the
country at large also is materially less at this
time. Total bill holdings of the Reserve bank
declined during the year from $50,153,000 to
$33>339>000> approximately the same amount of
reduction shown in rediscounts for member
banks. Reserve deposits of member banks rose
during the year from $67,459,000 to $69,266,000,
an increase made necessary by larger deposits in
member banks. The cash reserves of the Rich­
mond reserve bank changed little during the
year, declining from $89,467,000 on Ju ly 15, 1926,
to $89,157,000 on Ju ly 15, 1927. The ratio of
reserves to note and deposit liabilities combined
rose between the 1926 and 1927 dates from 63.35
per cent to 67.75 Per cent, the higher figure this
year being chiefly due to a smaller note circula­
tion.

CONDITION OF SIXTY-SEVEN REPORTING MEMBER BANKS IN SELECTED CITIES
ITEMS
1. Total Loans and Discounts (including
all rediscounts) ......................................
2. Total Investments in Bonds and Secu­
rities ..........................................................
3. Reserve Balance with Federal Reserve
Bank ............................. ...........................
4. Cash in Vaults............................................
5. Demand Deposits ........................................
6. Time Deposits ............................................
7. Borrowed from Federal Reserve Bank..

July 13, 1927

June 15, 1927

July 14, 1926

$523,984,000

$520,040,000

$512,649,000

152.720.000

146.033.000

139.194.000

42.476.000
13.962.000
394.027.000
229.229.000
9,809,000

42.520.000
13.038.000
385.965.000
225.567.000
4,774,000

41.017.000
14.109.000
378.285.000
209.082.000
14.345.000

The chief items of condition for sixty-seven regularly reporting member banks are shown in the
accompanying table, three dates being included to allow for comparison of the latest available
figures, those of Ju ly 13, 1927, with those of June 15, 1927, and July 14, 1926, the preceding month
and the preceding year, respectively. It should be understood that the figures shown reflect condi­
tions as of the report dates only, and are not necessarily the highest or lowest figures that occurred
during the interval between the dates.
A comparison of the July 13th figures with those of the preceding month shows some increase in
loans to customers, an unseasonal development. Total loans and discounts in the reporting banks
increased $3,944,000 between June 15th and July 13th, while investments in bonds and securities rose
by $6,687,000. Reserve deposits of the reporting banks at the Federal reserve bank showed only a
daily fluctuation during the period under review, declining by $44,000, but cash in vaults dropped
$924,000. Demand deposits increased $8,062,000 and time deposits gained $3,662,000 between June
15th and July 13th. The reporting banks more than doubled their borrowing at the reserve bank
during the past month, rediscounts by the sixty-seven institutions at the Federal Reserve Bank of
Richmond rising by $5,035,000, doubtless incident to July settlements including the payment of
dividends.
Between Ju ly 14, 1926, and July 13, 1927, the sixty-seven reporting member banks increased
their loans to customers by $11,335,000, and raised their investments in bonds and securities by
$13,526,000. They also increased their reserve deposits at the Federal reserve bank by $1,459,000.
At the same time, the reporting institutions reduced their own borrowing at the reserve bank by
$4>536,000. These changes in the items mentioned were made possible by deposit gains during the
year under review, demand deposits having increased $15,742,000 and time deposits $20,147,000 be­
tween July 14th last year and July 13th this year. Cash in the vaults of the reporting banks re­
mained practically the same during the year, declining $147,000.
DEBITS TO INDIVIDUAL ACCOUNTS
CITIES
Asheville, N. C................
Baltimore, Md...................
Charleston, S. C..............
Charleston, W. Va..........
Charlotte, N. C................
Columbia, S. C................
Cumberland, Md..............
Danville, Va.....................
Durham, N. C...................
Greensboro, N. C............
Greenville, S. C...............
Hagerstown, Md..............
Huntington, W. Va........
Lynchburg, Va.................
Newport News, Va........
Norfolk, Va.......................
Raleigh, N. C...................
Richmond, Va..............
Roanoke, Va. .................
Spartanburg, S. C..........
Washington, D. C..........
Wilmington, N. C.........
Winston-Salem, N. C.—
District Totals.............




TOTAL DEBITS DURING THE FIVE WEEKS ENDED
July 13, 1927

June 8, 1927

July 14, 1926

$

$

$

39,512,000
497,091,000
32,631,000
45,719,000
60,536,000
25,464,000
12,211,000
11,118,000
32,487,000
29,541,000
27,076,000
12,838,000
30,770,000
22,565,000
10,761,000
85,835,000
37,583,000
154,289,000
34,915,000
15,231,000
296,596,000
20,510,000
48,613,000

$1,583,892,000

47,165,000
440,792,000
30,614,000
42,040,000
60,409,000
29,515,000
11,017,000
9,506,000
32,304,000
28,690,000
25,848,000
12,411,000
26,978,000
22,397,000
10,882,000
86,719,000
24,449,000
145,043,000
32,887,000
16,041,000
299,779,000
22,286,000
46,091,000

$1,503,863,000
2

SEMI-ANNUAL TOTALS
1927

1926

47,365,000
559,785,000
28,710,000
43,651,000
56,446,000
19,774,000
12,410,000
11,344,000
33,602,000
30,884,000
24,341,000
12,859,000
29,747,000
25,074,000
15,046.000
91,628,000
41,369,000
160,376,000
35,081,000
15,903,000
308,697,000
21,937,000
44,976,000

$ 220,428,000
2,443,522,000
166,385,000
225,894,000
314,513,000
141,363,000
54,249,000
58,629,000
166,459,000
152,664,000
136,909,000
65,331,000
149,159,000
117,378,000
63,035,000
448,015,000
148,428.000
807,985,000
171,587,000
85,737,000
1,495,125,000
119,288,000
252,097,000

$ 222,630,000
2,628,144,000
163,927,000
221,819,000
305,589,000
109,736,000
53,440,000
54,728,000
159,229,000
162,100,000
143,472,000
62,841,000
153,940,000
126,681,000
59,214,000
460,706,000
163,897,000
813,591,000
168,712,000
91,643,000
1,471,637,000
130,500,000
233,901,000

$1,671,005,000

$8,004,180,000

$8,162,077,000

The accompanying table shows total debits to individual, firm and corporation accounts in the
clearing house banks of twenty-three trade centers in the Fifth Federal reserve district during three
periods of five weeks each, and in addition the table this month shows semiannual totals in the sev­
eral cities for the first half of 1927 in comparison with corresponding figures for the first half of
1926. The figures for the latest available five weeks period, ended Ju ly 13th, may be compared with
those reported for the preceding five weeks ended June 8th this year and with those of the cor­
responding five weeks ended Ju ly 14, 1926.
Aggregate debits of $1,583,892,000 in the reporting banks during the five weeks ended Ju ly
13th show a seasonal increase over the total of $1,503,863,000 reported for the preceding like period,
ended June 8th, the semiannual and quarterly payments occuring on and around July 1st increasing
debits totals materially. The increase during the more recent period was rather smaller than in most
years, and only sixteen of the twenty-three reporting cities showed higher figures.
In comparison with the corresponding five weeks in 1926, ended Ju ly 14th, when debits totaling
$1,671,005,000 were reported, the total of $1,583,892,000 for the five weeks ended July 13, 1927,
shows a decline of $87,113,000, sixteen of the twenty-three cities reporting lower figures this year.
The following cities reported higher figures during the 1927 period: Charleston, S. C., Charleston, W.
Va., Charlotte, Columbia, Greenville, Huntington and Winston-Salem.
Total debits for the first half of 1927 amounted to $8,004,180,000, compared with $8,162,077,000
reported during the first half of 1926. Twelve cities showed higher figures while eleven cities
showed lower figures during the first half of this year in comparison with the corresponding six
months of 1926, but the decreases were larger than the increases, chiefly due to a drop of $184,622,000 in Baltimore, and the district total for the past six months was $157,897,000 lower than the
total in the first six months of 1926. The 1927 total of debits is $344,691,000 above the total for the
first half of 1925, however.
SAVINGS DEPOSITS—Savings and time deposits reached new high levels at the end of June.
Thirteen mutual savings banks in Baltimore had deposits aggregating $167,218,144 at the close of
business June 30, 1927, compared with $165,558,711 at the end of May this year and $155,193,114 at
the end of June 1926. Sixty-seven regularly reporting member banks had aggregate time deposits
amounting to $229,229,000 on Ju ly 13th this year, compared with $225,567,000 on June 15, 1927, and
$209,082,000 on Ju ly 14, 1926.
BUSINESS FAILURES—Dun's Review for July 2nd comments upon the June failure record as
follows: “ Insolvencies in the United States during the month of June numbered 1,833, with liabili­
ties of $34,465,165, these figures contrasting with 1,852 similar defaults for $37,784,773 in May this
year and 1,708 in June 1926, involving $29,407,523. The increase in the number of defaults in June
this year over a year ago is 7.3 per cent, practically the same as in May. There has been a normal
decline in practically every month this year from January, the decrease amounting to 25.6 per
cent, exactly the same as in 1926, while in 1925 it was 24.6 per cent.
“ For the first six months of this year insolvencies numbered 12,292, with liabilities of $291,527,518, in contrast with 11,476 a year ago, involving $209,888,501. There were only two years, the
first half of 1922, and 1915, in which the number of commercial defaults exceeded those of this year,
and likewise as to the indebtedness involved, only in 1924, 1922 and 1921 did liabilities for the first six
months exceed the aggregate this year. In connection with the larger number of defaults this
year consideration must be given to the larger number of firms in business.”
June failures in the fifth district numbered 142, compared with 125 in May this year and 96 in
June 1926. Last month's liabilities of $2,255,430 compare favorably with $5,707,404 reported for May
1927, but exceed $1,719,126 in June last year. Fifth district failures in the first six months of 1927
numbered 863, with liabilities totaling $23,131,574, compared with 772 insolvencies in the first half of
1926, with aggregate liabilities of $14,369,247.
LABOR—The labor situation is spotted, some sections reporting a considerable volume of un­
employment while others report only a normal number of idle workmen. Almost all industrial plants
in the fifth district are operating full time and are using their regular quotas of workers, but in a
number of the district’s cities there is a smaller amount of construction work under way than at this
time in recent years, and it is in these cities in which there is complaint of unemployment. There
does not appear to be an unusually large number of workmen who are involuntarily idle anywhere in
the district, however, although the situation in scattered centers compares unfavorably with the re­
cent more or less abnormal years.
COAL—Bituminous coal production in June 1927 totaled approximately 36,627,000 net tons, com­
pared with 41,992,000 net tons mined in June 1926, according to the weekly report of the Bureau of
Mines, Department of Commerce, for Ju ly 16th. Production has steadily increased since the begin­
ning of the strike in union bituminous fields on April 1st, and last month was only 12.8 per cent less
than total production in June last year. On April 1st, when the strike began, reserve stocks were
reported to be the highest on record for that date, and since that time the mines still in operation



3

have been able to keep practically up with current consumption, thus making it unnecessary to
draw upon reserve stocks to any appreciable extent. West Virginia continues to lead all states in
coal mined, running between two and a half to three million tons per week. Coal at retail can be
had in practically all prepared sizes and on immediate delivery, with prices averaging from 50c to
$1.00 a ton higher than a year ago. Anthracite coal, of which comparatively little is used in the
fifth district, is cheaper than last year, when the shortage resulting from the strike of 1925-1926 had
not been made up.
TEXTILES —Cotton consumed in the three textile manufacturing states of the fifth district dur­
ing June this year totaled 273,414 bales, of which North Carolina mills used 149,810 bales, South Caro­
lina mills 111,7 5 1 bales, and Virginia mills 11,853 bales. In the longer month of May the fifth dis­
trict mills consumed 264,507 bales, and in June 1926 used 212,398 bales. The mills are operating ap­
proximately full time, and having in hand a larger volume of forward orders than for several years,
they are shipping the goods as made and are accumulating little stock in their warehouses. Due
to the steady rise in cotton prices during recent months, many mills report that they are shipping
goods on orders previously accepted at less than replacement costs, although some profit is being
made on the business, the goods coming from cotton bought before the advance in price. Most of
the textiles recently sold appear to have gone into the hands of consumers, stock figures received
from wholesale dry goods jobbers and department stores indicating little accumulation of goods in
secondary hands. On the whole, the fifth district textile industry appears to be in about the most
favorable position it has occupied since early 1920.
BUILDING OPERATIONS FOR THE MONTHS OF JUNE 1927 AND 1926.
Permits Issued

0*

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

New

CITIES

z

Winston-Salem, N. C.

Charleston, S. C ...
Columbia, S. C.....
Greenville, S. C,....
Spartanburg, S. C.
Washington, D. C.

568
17
14
34
20
28
106
5
93
58
14
54
25
46
18
26
64
49
42
61
37
16
8
109
10
23
10
27
232

Alterations

Repairs

1927 1926
Baltimore, Md......
Cumberland, Md...
Frederick, Md......
Hagerstown, Md...
Danville Va..........
Lynchburg, Va....
Norfolk, Va..........
Petersburg, Va.....
Richmond, Va......
Roanoke, Va.........
Bluefield, W. Va...
Charleston, W. Va.
Clarksburg, W. Va
Huntington, W.V a.
Parkersburg,W.V a
Asheville, N. C.....
Charlotte, N. C.....
Durham, N. C.......
Greensboro, N. C.
High Point, N. C...
Raleigh, N. C........
Salisbury, N. C.....
Wilmington, N. C.

New Construction

1927

1926

1926

1927

620 1,421 1,375 $ 3,217,800 $ 3,610,428
25
8
5
66,250
90,771
34
1
10
149,514
23,520
28
12
16
53,910
71,405
15
16
7
126,785
104,829
39
29
29
138,120
51,169
89
78
96
570,435
260,990
4
13
11
8,950
11,165
146
69
78
1,086,618
686,130
96
28
41
353,940
233,247
20
8
7
80,950
41,925
61
16
29
214,754
77,650
23
31
30
107,200
125,595
70
4
7
76,767
136,595
29
9
9
134,600
188,575
109
111
65 2,780,167
989,470
54
12
16
324,960
1,029,306
44
4
16
221,050
423,630
44
30
75
310,860
735,378
76
8
15
203,900
816,275
46
9
4
173,000
357,175
6
8
7
64,225
13,240
9
6
5
13,400
30,800
58
55
40
831,911
138,792
13
28
25
24,725
29,380
14
41
22
123,250
333,463
12
24
59,650
35
71,750
24
71,075
35
28
127,187
444
162
405
2,511,685
5,520,385

Totals.......... 1,814 2,009 2,539 2,488 $13,322,479 $17,108,197

1927
$1,016,648 $
7,975
50
4,845
13,290
6,680
87,305
48,810
177,069
11,325
2,035
5,850
5,065
600
6,400
36,645
12,208
223,100
33,635
8,462
6,750
3,390
10,400
60,886
18,015
23,565
17,635
8,919
451,195
$2,308,744

1926

Increase or Per Cent
Decrease
of
of
Increase 0
Total
or
Z
Valuation Decrease

833,520 $— 209,508 — 4.7 %
1,420
— 17,966 — 19.5
20,860
— 146,804 — 86.2
9,232
— 21,882 — 27.1
2,590
32,656
30.4
10,766
— 91,037 — 61.1
37,682
— 259,822 — 42.7
4,950
46,075
331.5
138,518
439,039
53.2
10,760
— 120,128 — 32.9
7,730
33,330
67.1
36,625
— 167,879 — 66.8
7,300
— 20,630 — 15.5
3,650
— 62,878 — 44.8
6,600
— 54,175 — 27.8
31,800
1,795,542
175.8
44,150
— 736,288 — 68.6
9,400
11,120
2.6
14,493
— 405,376 — 54.1
19,850
— 623,763 — 74.6
2,950
— 180,375 — 50.1
200
54,175 403.1
12,300
— 19,300 — 44.8
13,735
740,270 485.3
8,685
4,675
12.3
342,253
— 528,901 — 78.3
12,220
—
6,685 — 8.0
.34,785
— 81,978 — 50.6
543,595
—3,101,100 — 51.1

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

$2,222,619 —$ 3,699,593 — 19.1%

— Denotes decrease.
NOTE— The figures in the above table reflect the amount of work provided for in the corporation limits of the
several cities, but take no account of suburban developments.

Construction work provided for in permits issued in June in the fifth district was in larger
volume than that of May this year, but for the ninth consecutive month was below that of the cor­
responding month of the preceding year. Permits for new construction issued last month by build­
ing inspectors in twenty-nine fifth district cities numbered 1,814, with estimated valuation of $13,322,479, compared with 1,7 11 permits and a valuation of $10,347,903 in May and 2,009 permits and $17,108,197 valuation in June last year. For alteration and repair work, 2,539 permits issued last month
exceeded 2,488 permits for this class of work in June last year, and June valuation figures totaling



4

$2,308,744 also exceeded the June 1926 total, $2,222,619. In combined valuation for both new and
repair or alteration work, the twenty-nine cities totaled $15,631,223 last month and $19,330,816 in
June a year ago, a decrease during the 1927 month of $3,699,593, or 19.1 per cent. Nine of the re­
porting cities showed higher valuation figures for June 1927 than a year ago, but twenty cities re­
ported lower figures, indicating clearly that the recession in construction activity noted in recent
months was district wide. Larger figures for June 1927 were reported by four cities in North Caro­
lina, three in Virginia, and one each in West Virginia and South Carolina.
Building contracts awarded in the fifth district in June total $ 3 5 >5 02>5 2 3 > including both urban
and rural construction. Of this amount, $11,295,833 was for residental work, according to statistics
collected by the F. W. Dodge Corporation.
COTTON—The upward movement of cotton prices continued between the middle of June and
the middle of July, the total rise slightly exceeding a cent a pound, or $5 per bale. In our Review
last month wre quoted 15.66 cents per pound as the average price paid on Carolina markets during
the week ended June nth. From this price there was a gradual rise to 16.69 cents per pound dur­
ing the week ended Ju ly 16th, the latest period for which statistics are available. The past month
witnessed the official announcement of a substantial acreage reduction this year, and June consump­
tion figures were larger than the trade had expected.
Cotton consumption in American mills in June was the highest on record for that month, and
was the second largest for any month. The Bureau of the Census reported 662,630 bales of lint
consumed last month, compared with 633,024 bales used in M ay this year and 518,607 in June 1926.
Total consumption for the eleven months of the season to date—August 1, 1926, to June 30, 1927—
amounted to 6,633,474 bales, compared with 5,994,109 bales consumed in the corresponding period
ended June 30, 1926. Cotton on hand at manufacturing establishments on June 30, 1927, amounted
to 1,607,676 bales, compared with 1,794,284 bales held on May 31st this year and 1,268,707 bales held
at the end of June last year. Bales in public warehouses and compresses numbered 2,164,108 at the
end of June this year, 2,868,947 at the end of May, and 2,410,261 on June 30, 1926. Exports of cot­
ton in June totaled 481,943 bales, compared with 628,132 bales sent abroad in May 1927 and 346,533
bales exported in June last year. Exports during the eleven months of the present cotton year
totaled 10,794,580 bales, compared with 7,788,848 bales shipped out of the country during the eleven
months ended June 30, 1926. Imports in June totaled 36,055 bales, compared with 21,347 bales in
May 1927 and 22,137 bales in June 1926, while total imports during the past eleven months amounted
to 368,813 bales, in comparison with 313,421 bales imported during the corresponding period of the
previous year. Active spindles in June 1927 numbered 32,753,428, compared with 32,906,580 in May
this year and 31,755,874 in June last year. Consumption in the cotton growing states totaled 474,577 bales in June, or 71.6 per cent of National consumption, compared with 365,782 bales, or 70.5 per
cent of National consumption, used in the cotton growing states in June 1926.
Prospects for the cotton crop this year are problematical. In addition to the usual difficulty
in estimating probable yields this early in the season, the Department of Agriculture has been re­
stricted in the number and kinds of condition reports it may issue, and the only data now available
comes from private agencies. On Ju ly 10th, the Department of Agriculture issued a preliminary
acreage report as of Ju ly 1st, at which time a reduction of 12.4 per cent under the 1926 acreage was
reported. In the fifth district, South Carolina showed a reduction of 5 per cent, the smallest reported
for any state. North Carolina’s reduction this year is 10 per cent, and Virginia’s acreage is 23 per
cent below that of last year. In South Carolina the crop got off to a better start than in several
years, but frequent rains in June caused rapid and sappy growth. Plants are blooming freely, but
weevils are numerous in eastern and southern counties and are a real menace to the crop. Less
fertilizer was used under this year’s crop in South Carolina than any other of the past four years,
although fertilizer was cheaper this year. In North Carolina the crop is reported in fairly good con­
dition, but the plants are small. The stand is better than last year, but the weevil infestation ap­
pears to be more general and intensive than for several years, due to excessive rain and grassy con­
dition of the fields. In Virginia, many of the more northern counties, which began raising cotton
four or five years ago, have practically abandoned the crop this year. The stand is fairly good, al­
though considerable replanting was necessary. Growth is quite backward as a result of the cold
weather in May and early June, but weather conditions late in June and the first half of July were
better and the crop is beginning to make more progress.
AGRICULTURAL NOTES—M ARYLAN D crops have improved somewhat during recent weeks,
although the weather remained too cool for the season. Wheat was harvested under almost ideal con­
ditions and the crop ranged from fair to good. Yields, however, are not up to last year, when a
record average of 23 bushels per acre was harvested. The early potato crop, which is moving to
market, is reported as turning out one of the best yields in years and will be profitable to growers
unless prices decline greatly as the season advances. Fruit yields promise not more than half a
crop this year. Corn remains the most dubious of the State’s crops. The cool weather has greatly
retarded development, but the color of the plant is good and if favorable weather occurs during the



5

balance of the season much of the retardation may be made up. Haylands and pastures are in ex­
cellent shape.
V IR G IN IA agricultural prospects improved during the first half of July, according to the V ir­
ginia Crop Reporting Service. Frequent rains and warm weather caused crops to grow rapidly.
The corn crop is now unusually good in Southern and Eastern districts, but in the Northern, West­
ern and Southeastern districts corn is still backward. Fields have been well cultivated, and good
weather during the next six weeks would probably bring good yields. In the Southern half of the
state most of the wheat crop has been threshed, and the yield was disappointing. The hay crop has
been good, with favorable conditions for cutting and curing. Late hay crops are making rapid
growth and should make good yields. Tobacco has grown rapidly since the recent rains and grow­
ers now expect good yields. The acreage planted in flue-cured tobacco is approximately the same as
last year, but in fire-cured sections the acreage has been reduced probably 25 per cent as a result of
the dissatisfaction over prices received for dark tobacco last season. The peanut crop is backward,
with poor stands and some grassy fields, but prospects are better than a month ago. Fruit pros­
pects are very poor except in a few districts. The commercial apple crop is expected to be less than
half of the 1926 crop. Farm gardens have improved wonderfully and are now providing a variety
of vegetables for home use.
NORTH CAROLINA farm conditions are vastly better than on June 1st, following the breaking
of a long drought. The condition of corn is about normal, and considerable improvement is ex­
pected later in the season. The wheat crop was quite disappointing in both yield and quality, but
hay crops are very good, due to June and Ju ly rains. Tobacco is irregular in growth and quality;
but about the same yield as last year is expected on an increased acreage. The prices of most
truck crops were good during the spring. The commercial Irish potato crop is perhaps the largest for
many years. Sweet potato and peanut crops are somewhat below normal in condition, but larger
acreages were planted in both crops. The state's peach and apple crops are distinctly below the pro­
duction of 1926, but it is possible that more peaches may be shipped than is now expected.
SOUTH CAROLINA acreage estimates, released on Ju ly 11 and relating to Ju ly 1st, show an
increased acreage over last year in all important crops except cotton. Conditions of the growing
crops were much better than at this time last year and equal to or above the five-year averages in
most instances. Ample rainfall during June caused rapid growth of all vegetation and the state of
cultivation is not so good as on June 1st. This year's corn crop is expected to make .larger yields
than last year, but not quite up to the five-year average. An upward revision of the wheat acreage
and a better outturn at the thresher than was indicated by condition reports give a crop larger than
previous forecasts. The yield of 11 bushels per acre this year is 5 bushels less than last year’s ex­
cellent yield, but is exactly the ten-year average for the state. This year's tobacco acreage is 125
per cent of the 1926 acreage, and a crop condition of 75 per cent on Ju ly 1st indicates a yield of 69,069.000 pounds in comparison with 57,510,000 pounds last year and a five-year average production of
60.600.000 pounds. Pastures are in excellent condition.
FIGURES ON RETAIL TRADE

_ _ _ _ _ _ _ _ _ _ _ _ _ _ As Indicated By Reports from Thirty Representative Department Stores for the Month of June, 1927_ _ _ _ _ _ _ _ _ _ _ _ _ _
Percentage increase in June 1927 sales, compared with sales in June 1926:
Baltimore
Richmond
Washington
Other Cities
District
— 3.3
— 2.0
— 3.3
— .4
— 2.9
Percentage increase in total sales since January 1st, over sales in the first half of 1926:
— 3.2
3.2
— 1.9
— 1.2
— 1.9
Percentage increase in June 1927 sales over average June sales during the three years 1923-1925, inclusive:
— 5.6
17.9
3.9
2.8
.7
Percentage increase in stock on hand June 30, 1927, over stock on June 30, 1926:
— 4.7
.5
.3
2.8
— 1.5
Percentage increase in stock on hand June 30, 1927, over stock on May 31, 1927:
— 8.1
— 4.9
— 4.4
— 5.0
— 6.1
Percentage of sales in June 1927 to average stock carried during that month:
25.8
29.3
28.6
21.4
26.6
Percentage of total sales since January 1st to average stock carried during each of the six elapsed months:
152.1
163.0
162.8
127.1
154.0
Percentage of outstanding orders on June 30th to total purchases of goods in 1926:
6.1
3.4
6.3
4.6
5.8
Percentage of collections in June 1927 to total accounts receivable on June 1st:
23.7
27.5
30.3
31.2____________________ 26.7
— Denotes decreased percentage.

Retail trade in thirty of the fifth district's leading department stores in June was in smaller
volume than during the corresponding month a year ago, eighteen stores reporting lower sales dur­



6

ing the past month. The average decline in June sales under sales in June 1926 was 2.9 per cent,
and cumulative sales in the thirty stores during the first half of this year averaged 1.9 per cent less
than total sales during the first half of last year. June sales averaged 7/ios of 1 per cent above
average June sales during the three years 1923-1925, inclusive, but outside of Baltimore most of the
stores showed a higher average increase than the district figure.
Stocks of merchandise on the shelves of the reporting stores were 1.5 per cent lower in selling
value at the end of June 1927 than a year earlier, and were 6.1 per cent smaller than a month earlier.
The perecentage of sales in June to average stocks carried was 26.6 per cent for the district as a
whole, and the percentage of total sales during the first half of this year to average stocks carried
during each of the six months was 154.0 per cent, indicating an annual turnover of 3.08 times. Dur­
ing the first six months of 1926 the turnover was at a rate of 3.12 times.
Collections by twenty-nine of the thirty reporting stores during June totaled 26.7 per cent of
outstanding receivables as of June 1st, a slightly higher percentage than was reported in May this
year but a lower figure than 28.4 per cent collected in June 1926.
WHOLESALE TRADE, JUNE 1927
Percentage increase in June 1927 sales, compared with sales in June 1926:
3U Groceries
12 D ry Goods
6 Shoes
16 Hardware
5 Furniture
13 Drugs
— 4.3
2.1
— 4.6
5.9
— 17.8
1.1
Percentage increase in June 1927 sales, compared with sales in May 1927:
2.1
— 2.4
— 17.7
— 7.9
— 33.6
— 3.4
Percentage increase in total sales since Jan. 1, 1927, compared with sales during the first half of 1926:
— 6.2
— 2.4
— .3
5.1
— 7.4
— 2.3
Percentage increase in stock on June 30, 1927, compared with stock on June 30, 1926:
3.0(11)
— 2.4(5)
5.5(4)
— 5.0(8)
Percentage increase in stock on June 30, 1927, compared with stock on May 31, 1927:
— 5.4(11)
19.6(5)
— 1.9(4)
2.3(8)
Percentage of collections in June to total accounts receivable on June 1, 1927:
66.4(21)
31.2(8)
32.0(5)
38.2(12)
33.8(3)
58.3(8)
— Denotes decreased percentage.
NOTE:

The number of firms reporting stock and collection data in each group is shown immediately follow­
ing the percentages.

Eighty-six wholesale firms reported on their June business in comparison with the preceding
month this year and the corresponding month last year. Dry goods, hardware and drug firms sold
more merchandise in June 1927 than in June a year ago, but grocery, shoe and furniture sales last
month were in smaller volume. June 1927 sales of groceries exceeded May 1927 sales, but the other
five lines reported lower figures for June than for the preceding month. Total sales during the
half-year just closed exceeded sales in the first six months of 1926 in hardware, but grocery, dry
goods, shoe, furniture and drug sales were less than in 1926. Stocks of dry goods and hardware in­
creased during June, while grocery and shoe stocks declined. At the end of June this year, stocks
of groceries and shoes on the shelves of the reporting firms were larger than on June 30, 1926,
but dry goods and hardware stocks were smaller than a year earlier. The percentages of collections
during June to outstanding receivables as of June 1st were higher in every line of trade reported
upon except furniture than in June last year.




(Compiled July 20, 1927)

7

BUSINESS CONDITIONS IN THE UNITED STATES.
(Compiled by the Federal Reserve Board)

The output of industry declined substantially in June to a
level close to that of a year ago, reflecting reduced activity both in
isormines and in factories. The value of building contracts awarded
was the largest for any month on record. The general level of
prices remained practically unchanged.
PRODUCTION. Production o f iron and steel and automobiles
declined considerably in June and curtailment in these industries
100 continued during the early part o f July. There were also decreases
in June in silk deliveries, sugar refining and production o f lumber,
_ copper and anthracite coal.
Cotton and woolen mills continued
active fo r this season of the year and consumption o f raw cotton
was larger than in any previous June on record. Meat packing,
shoe production and the manufacture o f building materials showed
increases. Production o f manufactures, as a group, was slightly
larger in June than in the same month o f 1926, but output o f
materials, owing largely to decreased production o f coal, was in
smaller volume than a year ago. The value o f building contracts
1923
192A
1925
1926
1927
awarded in June was larger than in any previous month on record,
Index numbers of production o f manufactures and minerals, adjusted^
owing chiefly to the steady increase within recent months o f con­
f o r seasonal variations (1923-1925 average = 100). Latest figures
June, manufactures 108, minerals 103,
tracts fo r public works and public utilities. Awards were particuPERCENT
* larly large, as compared with previous months o f the year and with
2001-----200 June o f last year, in the New York and Chicago Federal reserve
districts. Contracts were awarded during the first half o f July in
practically the same volume as in the corresponding period o f last
year. On the basis o f conditions on July 1st forecasts o f the De­
150
partment o f Agriculture indicate increases as compared with the
1926 harvested production in the output o f wheat, oats, barley, rye,
hay and potatoes, and decreases in corn, tobacco and the principal
fruit crops. Cotton, fo r which no production estimate was given,
shows a decrease of 12 per cent in acreage planted, while the total
area planted to all crops shows a reduction o f 2 per cent. A re­
duction of 371,000,000 bushels in the estimated production o f corn
50
compared with 1926 indicates the smallest crop since 1901.
TRADE. Wholesale trade in most leading lines increased
WHOLESALE PRICES
slightly between May and June, while retail trade showed less than
the customary seasonal decline. Sales o f department stores were
in about the same volume as a year ago while those o f mail order
1923
19241925
1926
1927
houses and chain stores were larger. Sales o f meats, dry goods and
Index of United States Bursau of Labor S ta tis tic s (1913 Z 100, base
adopted by Bureau). Latest fig u re, June 143.7.
hardware at wholesale were smaller than in June o f last year,
percen t while
sales o f groceries, shoes and drugs were about the same in
200 volume. Inventories of department stores declined further to a
level about 3 per cent below that of June 1926. Stocks carried by
wholesale firms showed no change fo r the month and were smaller
150 than a year ago. Daily average freight car loadings failed to show
the customary seasonal increase between May and June and were in
smaller volume from early in May to the middle o f July than during
the corresponding period o f last year.
Shipments o f almost all
too groups o f commodities have been smaller than a year ago. The
largest declines occurred in the shipment o f coal and coke.
PRICES. The general level o f wholesale commodity prices,
according to the Bureau o f Labor Statistics index, continued prac­
tically the same in June as in the two preceding months. The
prices o f agricultural commodities as a group declined slightly while
the average fo r the non-agricultural group remained practically un­
changed. There were declines between May and June in the
prices o f silk, iron and steel, non-ferrous metals, building materials
Federal Reserve Board's indexes of value of building contracts awarded, and rubber, and advances in grains, cotton, hides and skins, and
anthracite coal. During the first three weeks o f July prices o f
. wheat, bituminous coal, iron and steel and rubber declined, while
BILLIONS OF DOLLARS’
^ose
iivestock, cotton, wool, copper and hides advanced.
10
BANK CREDIT. The demand fo r member bank credit de­
creased from the latter part o f June to the middle o f July and on
8 July 20th the loans and investments o f member banks in leading
cities were more than $200,000,000 lower than a month before. The
decline was principally in the banks' investment holdings and in
6 loans secured by stocks and bonds.
Loans fo r commercial, agri­
cultural and industrial purposes decreased by about $45,000,000.
Demand fo r reserve bank credit in connection with settlements at
the end o f the fiscal year and increased currency requirements over
the holiday period carried total discounts fo r member banks on
July 6th to the highest level since the first o f the year. There2
after, largely in consequence of the return flow of currency from
circulation, there was a decreased demand fo r member bank accom­
modation and on July 20th total discounts were in somewhat smaller
o volume than fou r weeks earlier. Holdings o f United States securi­
19241925
ties showed a slight increase during July. Conditions in the money
Monthly averages o f weekly fig u res fo r banks in 101 leading c it i e s ,
market, after seasonal firmness at the end o f June, were easier in
la t e s t figu res are averages fo r f i r s t three weekly reports of July.
July.



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