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MONTHLY REVI EW of Financial and Business Conditions ■a _____ Fifth Federal i *• ic n n a K h io id « x _ :" " va. 3 R eserve D istric t Federal Reserve Bank, Richmond, Va. July 31, 1942 Buy W ar B onds in v est Buy S a v in g s St a m p s for v ic t o r y now 2 MONTHLY REVIEW Summary of June Business Conditions ITH plants working to capacity on the war pro gram, and workers having higher incomes than ever before, business activity has shown less than the usual seasonal recession in recent weeks, and continues much above the rate of activity a year ago in those lines which are not artificially restricted in the interest of public de fense. The Federal Reserve Bank of Richmond increased its holdings of Government securities between the middle of June and the middle of July, and there was a further in crease in the volume of Federal Reserve notes in circu lation. The bank’s cash reserves also rose during the month, but member bank reserve deposits showed a mod erate decline. In 41 regularly reporting member banks loans decreased slightly between June 17 and July 15, but there was a substantial increase in investments, chiefly Government securities. During the same period demand deposits rose sharply, and there was also a slight increase in time deposits. At mutual savings banks in Baltimore, aggregate deposits rose during June, reversing a down ward trend which had been noted in earlier months this year. Debits to deposit accounts in 25 Fifth District cities rose 3 per cent in June over debits in May, re flecting an increased volume of checks passing through the banks. Commercial failures in the Fifth District in June were less numerous than in either May this year or June last year, and the total number of failures in the first half of this year was 23 per cent below the number in the first half of 1941. Industry continues to concentrate on war work. In the Fifth District the cotton textile industry is working at capacity, and practically all mills which could do so have converted their machinery to the manufacture of the types of textiles required by the armed forces and for essential civilian needs. In the rayon field, manufacturers are working 24 hours a day and are producing all of the yarn which can be turned out by available plant facilities. Bituminous coal production in June exceeded production in either May 1942 or June 1941, and in the first half of this year coal mined in the United States exceeded by 24 per cent the amount of coal produced in the correspond W ing period last year. In tobacco manufacturing, a new monthly record was set in the production of cigarettes in June, output reaching twenty billion for the first time. Eighty-seven per cent of these cigarettes were manufac tured in Virginia and North Carolina. The distribution of merchandise to consumers con tinues at high levels, in spite of the fact that numerous commodities are frozen or are no longer manufactured. Sales in 78 department stores in the Fifth District in June were 12 per cent above sales in June 1941, and total sales for the first half of this year were 2 1 per cent above sales in the first half of last year. Retail furniture sales in 117 stores showed a decrease of 23 per cent in June 1942 sales in comparison with sales in June 1941, but this decline was at least partly due to restrictions on instalment selling laid down in Regulation W. Wholesale trade by 207 firms in a number of leading lines rose 15 per cent in June over sales a year ago. ■ Agricultural statistics issued by the Department of Agriculture indicate better than average prospects for most 1942 crops in the Fifth District. A. slight decrease in the expected yield of wheat in the district is forecast on the basis of July 1 conditions, and the yield of peaches is also expected to be less than in 1941. On the other hand increases in yields are forecast for oats, corn, hay, Irish potatoes, sweet potatoes, and tobacco. In tobacco, which is the leading cash crop in the Fifth District, the increase in acreage planted was 10 per cent this year, and the prospective yield of 734,267,000 pounds is 13 per cent above the 1941 yield of 650,557,000 pounds. In creased acreage figures are shown this year for oats, hay, Irish potatoes and tobacco while reductions of 1 per cent were made in the acreage planted in wheat, corn, and sweet potatoes. No production figures are released on cotton until August, but on July 8 the Department of Agricul ture announced that the cotton acreage is 3.8 per cent larger this year than last, and unofficial reports indicate that the development of the crop has been satisfactory throughout most of the belt. In view of the prices pre vailing this year for agricultural products, and favorable prospects for final yields, the farmers of the Fifth District appear to occupy a strong position. FINANCIAL AND BUSINESS CONDITIONS IN THE FIFTH FEDERAL RESERVE DISTRICT Debits to individual accounts (25 cities).................... .......... Sales, 78 department stores, 5th district...................... Sales, 117 furniture stores, 5th district.............. .................... Sales, 207 wholesale firms, 5th district................................... June 1942 $2,098,939,000 '$ 16,563,972 $ 2,353,855 $ 17,853,000 May 1942 $2,038,925,000 $ 17,187,817 $ 2,785,324 $ 17,758,000 Number of business failures, 5th district.................... Liabilities in failures, 5th district.......................................... Value of building permits, 29 cities.............................. Value of contracts awarded, 5th district.................... ........... 19 $ 882,000 $ 8,373,433 $ 160,508,000 $ $ $ Cotton consumption, 5th district (Bales).................... ........... Cotton price, cents per lb., end of month.................... .......... Rayon yarn shipments, U. S. (Pounds)...................... .......... Rayon yarn stocks, U. S. (Pounds)........................... Bituminous coal mined, U. S. (Tons)............... ...... .......... 458,572 19.88 39,000,000 5,800,000 48,410,000 35 485,000 5,476,957 68,914,000 452,996 19.66 37,600,000 6,900,000 48,250,000 June 1941 $1,807,218,000 $ 14,802,900 3,054,167 $ $ 15,582,000 $ $ $ % Change Month Year + — — + 3 4 15 1 + + — + 16 12 23 15 27 152,000 13,533,100 92,503,000 — 46 + 82 4- 53 +133 — 30 +480 — 38 + 74 392,479 14.82 38,300,000 4,600,000 43,319,000 + 1 + 1 + 4 — 16 0 + + + + + 17 34 2 26 12 MONTHLY REVIEW BANKING STATISTICS RESERVE BANK STATEMENT ITEMS Fifth District July 15 1942 50 Discounts held ............................. Foreign loans on gold............... Industrial advances..................... Government securities . . .......... Total earning assets ............. Circulation of Fed. Res. notes. Members’ reserve deposits........ Cash reserves ............................... Reserve ratio ............................. 000 omitted June 15 1942 $ 50 July 15 1941 $ 0 22 ITEMS 0 619 818 153 114_____ 119,663 120,481 153,805 321,434 501,602 414,644 483,992 713,046 876,016 85.60 85.12 767 186,441 187,324 522,452 466,784 910,332 82.80 SELECTED ITEMS— 41 REPORTING MEMBER BANKS Fifth District 000 omitted July 16 ITEMS July 15 June 17 1941 1942 1942 $150,691 $147,234 $141,624 Loans to business & agriculture. 167.624 161,756 162,324 All other loans............................... 628,623 459,037 690,632 Investments in securities................ 284,896 299,906 Reserve bal. with F. R. bank... . 304,775 26,141 Cash in vaults............................... 29,579 29,486 860,351 711,959 888,578 Demand deposits ........................... 199,892 208.624 201,615 Time deposits ................................. 0 0 Money borrowed ............................ 0 MUTUAL SAVINGS BANK DEPOSITS 9 Baltimore Banks Total deposits June 30, 1942 $221,023,216 ............... May 31, 1942 $219,575,973 June 30, 1941 $224,593,340 DEBITS TO INDIVIDUAL ACCOUNTS Fifth District June 1942 CITIES Dist. of Col. Washington $ 419,803 000 omitted May June 1942 1941 $ 422,584 Month Year $ 359,738 ■1 + 17 + 1 + 8 + 11 — 2 + 7 — 5 + 10 — 2 + 18 + 24 — 7 + 5 + 4 + 21 + 5 + + + + Maryland Baltimore ............ Cumberland.......... Frederick.............. Hagerstown.......... 599,477 10,511 9,795* 14,409 593,473 9,755 8,853* 14,651 559,072 11,035 North Carolina Asheville ............ Charlotte ............ Durham ................ Greensboro .......... Kinston ................ Raleigh .................. Wilmington.......... Wilson ................. Winstom-Salem .. 19,371 120,297 61,560 29,629 4,183* 46,181 26,994 5,308* 54,718 17,576 122,287 52,052 23,969 4,477* 44,051 25,946 4,370* 52,122 17,169 96,732 37,862 26,877 South Carolina Charleston .......... Columbia.............. Greenville.............. Spartanburg ___ 35,380 42,755 32,982 17,584 32,374 41,577 33,059 18,213 30,603 39,748 26,890 14,654 Virginia Charlottesville .. . Danville ............. Lynchburg .......... Newport News .. Norfolk ............... Portsmouth .......... Richmond ............ Roanoke .............. 10,519* 11,918 19,532 19,564 115,313 13,758 241,653 35,969 10,104* 10,313 17,706 17,668 109,497 12,343 232,704 34,496 10,093 17,493 15,364 73,862 6,848 193,695 34,966 West Virginia Bluefield .............. 18,688* 21,668* Charleston .......... 71,675 65,080 Clarksburg .......... 13,732* 12,590* Huntington .......... 24,729 23,059 Parkersburg 13,177 12,370 District Totals . . 2,098,939 $2,038,925 K Figures not included in District Total. </o of Change Vl,82i ’60,094 19,369 48,783 62,293 20,465 11,692 $1,807,218 + + 9 3 0 - 3 + + + + + + + + 4 16 10 11 5 11 4 4 -1 4 + 10 + 9 + 7 + 7 + 3 + 22 13 24 63 10 — 23 + 39 + 12 + 16 + 8 + 23 + 20 are having in securing sufficient goods to meet the needs of their customers. However, the failure statistics do not tell the whole story of the effects of rationing, freezing, etc., since many firms have liquidated before reaching the bankruptcy point. Figures on insolvencies in the dis trict and the United States, as compiled by Dun & Bradstreet for several recent periods, are as follows: PERIODS June 1942............ ....... May 1942............ ........ June 1941............ ........ 6 Months, 1942............ ........ 6 Months, 1941............ ........ Number of Failures District U. S. 19 804 35 955 27 970 180 233 5,623 6,702 Total Liabilities District U. S. $ 882,000 $ 9,906,000 485,000 9,839,000 152,000 9,449,000 2,373,000 2,533,000 60,585,000 72,156,000 EMPLOYMENT As workers continue to be absorbed into the armed forces of the Nation it is becoming harder to secure effi cient labor in numerous fields, especially those not directly connected with some phase of war work. Many young men entering the army or navy are being replaced by older men and to some extent by women. At the same time dislocations in business due to priority regulations, rationing, freezing orders, etc., are causing unemploy ment. Some of these workers are readily absorbed by industries doing war work, but others are specialists or are too old to make the shift to new lines, and these are forced into the ranks of the unemployed. Increasing economic pressure on family groups resulting from greatly increased taxes, rising costs of living and bond buying is making it necessary for additional people to obtain remunerative employment, particularly in the large white collar group which has had little or no increase in income in recent months. The following figures, com piled for the most port by the Bureau of Labor Statistics, show the trends of employment and payrolls in the Fifth District from May to June: STATES ..................... Dist. of Col.................................. ..................... ..................... West Virginia ........................... ..................... North Carolina ........................... ..................... South Carolina ........................... ..................... District Average ................... ..................... Percentage change from May 1942 to June 1942 in number in amount on payroll of payroll + 2.0 + 5.4 — 1.3 — 0.1 +0.3 — 1.7 + 0.5 + 1.8 —0.4 - 0 .5 + 0.4 +1.1 + 0.7 + 1.6 BITUMINOUS COAL PRODUCTION + 18 + 12 + 27 + 56 + 101 + 25 + 3 + is + 21 + 13' + 16 COMMERCIAL FAILURES Commercial failures in both the Fifth district and the United States were less numerous in June this year than in June 1941, notwithstanding the difficulty many firms 3 Production of bituminous coal in the United States in June 1942 totaling 48,410,000 net tons exceeded the May 1942 output of 48,250,000 tons and was 12 per cent above 43,319,000 tons mined in June 1941. Total production this calendar year through July 11 was 300,658,000 net tons, an increase of 24 per cent above 243,111,000 tons produced to the corresponding date last year. The de mand for bituminous coal is much greater this year than last, due chiefly to the greatly expanded production pro gram in industry as a result of the war effort, and to build up supplies for heating to supplement sharply diminished supplies of fuel oil. It is feared that if householders do not stock their bins with coal before winter comes, trans portation facilities may be so severely strained that they will not be able to move sufficient coal to meet all needs for both industry and heating. MONTHLY REVIEW 4 SOFT COAL PRODUCTION IN TONS REGIONS West Virginia ..................... Virginia ................................. Maryland ............................... 5th District ..................... United States ................. c in District..................... /o June 1942 13,750,000 1,787,000 181,000 15,718,000 48,410,000 32 May 1942 13,29i6,000 1,755,000 175,000 15,226,000 48,250,000 32 June 1941 13,035,000 1,642,000 155,000 14,832,000 43,319,000 34 CONSTRUCTION Building permits issued in leading Fifth District cities in June 1942 totaled $8,373,433, an increase of 53 per cent over permits totaling $5,476,957 issued in May this year but 38 per cent less than the total of $13,533,100 for June last year. Building permit figures reflect civilian construction for the most part, and are showing the effects of restrictions on the use of building materials for work not connected with the war effort. Most of the con struction for war purposes is in rural communities or comparatively small cities and is not reflected in city permits. Contracts actually awarded for construction work in the Fifth District in June 1942, including rural as well as urban projects, reached the unprecedented total of $160,508,000, according to figures compiled by the F. W. Dodge Corporation. This total includes all additions to plant facilities in industry, road and bridge work. Federal and private housing projects, Government building of all kinds, and port facilities such as docks and piers. Pub licly financed projects account for most of the amount, as has been the case for a year or more. Contracts awarded in the Fifth District in the first half of 1942 totaling $583,990,000 exceed the value of contracts awarded in the first half of 1941, totaling $373,513,000, by 56 per cent. Figures by states for contracts awarded in May 1942, which were not available when the June 30 Review went to press, were reported by the F. W. Dodge Corporationt as follows: CONSTRUCTION CONTRACTS AWARDED STATES May 1942 May 1941 % Change Maryland ............................. $ 15,021,000 $ 15,974,000 — 6 Dist. of Col............................. 8,693,000 4,934,000 +76 Virginia ................................. 24,341,000 13,151,000 +85 West Virginia ................... 3,629,000 4,669,000 —22 North Carolina..................... 10,130,000 42,686,000 — 76 South Carolina ..................... ................7,100,000_______ 18,591,000______ — 62 Fifth District ...... ........... $ 68,914,000 $100,005,000 — 31 COTTON TEXTILES The cotton textile industry continued operations at approximate capacity during June, working for the most part on war orders. Nearly all mills which have machin ery suitable for weaving medium and heavy goods have converted to ducks, osnaburgs, sheetings, and other types of material needed in the prosecution of the war, and comparatively little cloth is being manufactured for civil ian use. However, jobbers and retailers bought large stocks of textiles when they were available, and have con sequently been able to meet most of the needs of their customers to this time. Stocks of many kinds of textiles are being depleted steadily in stores, and the number of items which can no longer be purchased is increasing. With army and navy needs steadily increasing, textiles available for civilian use are correspondingly decreasing. Ceiling price regulations have, prevented any substantial price rise in the face of shrinking supplies. Cotton consumption figures by states in the Fifth Dis trict for June 1942 and the first six months of this year are compared in the accompanying table with correspond ing figures for 1941. COTTON CONSUMPTION— FIFTH DISTRICT In bales MONTHS June 1942.............. May 1942.............. June 1941.............. 6 Months, 1942............. 6 Months, 1941............. % Increase in 1942 No. Carolina So. Carolina 247,142 189,444 241,904 188,998 215,790 157,443 1,453,021 1,115,268 1,279,304 965,444 14 16 Virginia District 21,986 458,572 22,094 452,996 19,246 392,479 132,316 2,700,605 107,576 2,352,324 23 15 RAYON Rayon Organon for July states that deliveries of rayon filament yarn to domestic consumers in June 1942 amount ed to 39,000,000 pounds, compared with 37,600,000 pounds in May this year and 38,300,000 pounds in June 1941. Production of yarn last month was less than total ship ments, and reserve stocks in manufacturers’ hands there fore declined from 6,900,000 pounds at the end of May to 5.800.000 pounds at the end of June. On June 30, 1941, reserve stocks of yarn totaled 4,600,000 pounds. In the first half of this year rayon yarn shipments totaled 231,400.000 pounds, an increase of 6 per cent over shipments totaling 219,200,000 pounds in the corresponding period last year. Deliveries of rayon staple fiber during June totaled 13.600.000 pounds, compared with 12,600,000 pounds de livered in May and 12,400,000 pounds in June 1941, and in the first half of this year deliveries of staple fiber total ing 75,600,000 pounds exceeded shipments of 64,300,000 pounds in the first six months of 1941 by 18 per cent. American textile manufacturers are turning more and more to rayon in staple fiber form, since it blends with other materials more readily than filament yarn. No official announcements on prices of dissolving pulp for the third quarter of the year have been made, but it is understood in the trade that prices will remain unchanged for the period at $85 per 2 ,000-pound ton for base-grade pulp and $10 0 per ton for the special grade pulp used by the acetate division of the industry. On June 22, the OPA issued Maximum Price Regula tion No. 167 establishing maximum prices for rayon yarn and staple fiber, and simultaneously issued a companion order, No. 168, setting ceiling prices for converted rayon yarns and converting charges, both regulations to become effective June 27. Regulation 167 is, in effect, only a formalization of the prices which producers of rayon yarn and staple fiber have observed at the request of the OPA since October 1941. COTTON STATISTICS Spot cotton prices on 10 Southern markets rose during the second half of June by more than $5.00 per bale, but lost about half of the increase in the first half of July. From an average of 18.62 cents per pound for middling grade upland cotton on June 1 2 , the average rose to 19.88 cents on July 3, but by July 17, the latest date for which official figures are available, the average dropped to 19.30 cents. On July 18, 1941, the average price on the 10 markets was 15.48 cents. On July 8 the Department of Agriculture issued a report on cotton acreage for 1942, in comparison with acreage figures in 1941 and during the period 1931-1940. MONTHLY REVIEW The United States as a whole showed an increase in 1942 acreage over 1941 acreage amounting to 3.8 per cent. In the Fifth District, Virginia with 44,000 acres is 22 per cent above last year, North Carolina with 861,000 acres in creased 6 per cent this year, and South Carolina with 1,247,000 acres rose 1 per cent. No official report on the condition of the growing crop has been released, but un official reports indicate that the prospects are good for at least average yields throughout most of the belt, and some sections are expecting considerably better than aver age yields if the weather is favorable during the balance of the growing season. COTTON CONSUMPTION AND June 1942 Fifth district states: 458,572 Cotton consumed .................. Cotton growing states: 831,550 Cotton consumed .................. Cotton on hand June 30 in 1,934,113 Consuming establishments 8,100,603 Storage & compresses United States: 966,940 Cotton consumed ................. Cotton on hand June 30 in 2,441,130 Consuming establishments 8,458,912 Storage & compresses........ Spindles active ............................. 23,090,560 ON HAND—BALES Aug. l.to June 30 June 1941 This Year Last Year 392,479 4,778,411 4,004,613 743,295 8,660,982 7,496,493 875,812 10,169,448 8,791,921 1,524,593 10,175,849 1,920,197 10,574,730 22,994,980 .. ... TOBACCO MANUFACTURING Cigarette production in June 1942 established a new record and reached the twenty billion mark for the first time. Output of all other tobacco products except smok ing and chewing tobacco also exceeded output in June last year. Production figures released by the Bureau of In ternal Revenue are as follows: June 1942 Smoking & chewing tobacco, pounds .............. Cigarettes, number ................ Cigars, number ..................... Snuff, pounds .......................... 24,579,958 20,003,674,760 532,390,210 3,226,884 May 1942 June 1941 21,956,402 18,455,318,320 457,767,155 3,224,368 24,729,260 18,522,764,920 478,802,003 2,930,255 RETAIL AND WHOLESALE TRADE Richmond (5) ............. Baltimore (10)................. W ashington (7) ............. Other Cities (12)............. Department Store Trade Percentage increase or decrease in sales, stocks, outstanding orders and outstanding receivables in June 1942 in comparison with June 1941 : Receivables Orders Sales Stocks + 60 — 8 + 11 ( + 15) + 46 — 16 + 14 (+ 2 2 ) + 68 + 13 — 6 + 16 ( + 27) + 78 0 — 16 + 6 ( + 18) + 43 + 9 — 10 + 12 (+ 2 1 ) + 66 + 11 Same stores by states, including stores reporting sales only: Maryland (13)............... Virginia (16) ............... West Virginia ( 1 5 ) .... North Carolina (16) ___ South Carolina (11) .. + 14 11 + — 10 ( + 22) ( + 18) ( + 3) ( + 4) 20 + 22 ( + ) — 2 * Includes stores reporting sales only. Note: Second figure in parentheses under Sales compares combined sales in 6 months of 1942 with sales in the first 6 months of 1941. WHOLESALE TRADE, 207 FIRMS Net Sales Stocks Ratio June collections June 1942 June 30, 1942 compared with compared with to accounts June May June 30 May 31 outstanding LINES 1941 1942 1941 1942 June 1 — 37 — 19 85 Auto supplies (8 ).......... + 22 — 8 + 46 65 Shoes (4) ....................... + io + 22 — 4 106 Drugs & sundries (13).. + 5 + 19 50 — 9 + 50 Dry goods (7) .............. + 19 + 5 — 8 57 Electrical goods (12) .. + 2 + 18 + 1 — 7 113 Groceries (66) .............. + 9 + 2 + 19 — 14 — 13 — 3 62 Hardware (12) .............. + 3 Industrial supplies (10). — 3 — 17 0 - 3 92 - 3 + 25 Paper & products (10). 77 + 6 + 4 + 12 + 35 Tobacco & products (6) — *4 81 Miscellaneous (59) . . . . + ‘5 + 13 + 4 District Average (207) 0 77 + 15 + 11 + 1 Source: Department of Commerce 5 RETAIL FURNITURE SALES % Changes in June 1942 Sales Compared with Compared with June 1941 May 1942 INDIVIDUAL CITIES Baltimore, Md. (10)*........... Washington, D. C. ( 8 ) * ... Richmond, Va. (9)*.............. Danville, Va. (3)*.............. Norfolk, Va. (3)*................ Roanoke, Va. (3)*............... Charleston, W. Va. (4 )*.. Charlotte, N. C. (5)*........... Winston-Salem, N. C. (3)*. Columbia, S. C. (4)*.......... Greenville, S. C. (4)*........ Other Cities (61)*.............. Fifth District (117)*.__ — 12 — + 5 — 28 — 55 — 2 — 40 — 37 — 47 — 40 — 37 — — — 22 0 — 26 — 5 — 12 — 13 — 33 20 — 25 -1 5 + 22 — 34 — 23 Same Stores, Grouped By States: Maryland (10)* .................. Dist. of Col. ( 8 ) * ................. Virginia (39)* ................... West Virginia (15)*......... North Carolina (25)*......... South Carolina (20)* ......... Fifth District (117)* *Number of reporting stores. 11 — 9 — 7 12 — + 5 11 — 9 — 23 — 42 — 37 — 11 — 18 — 34 — 17 — 15 CROP FORECASTS The following figures, issued by the Department of Agriculture, show forecasts of production in 1942 based on July 1 conditions, compared with final yields in 1941 and in the 10-year period 1930-39, and percentage changes in acreage this year over or under 1941 acreage: Wheat (Bushels) % Change Yield 1930-39 8.342.000 8.643.000 2.154.000 4.807.000 1.364.000 25,310,000 Yield 1941 7,245,000 7,665,000 1,628,000 7,110,000 3,146,000 26,794,000 Yield 1942 6,600,000 7,568,000 1,552,000 7,410,000 3,335,000 26,465,000 Oats (Bushels) 1.325.000 9 10 2.116.000 1.931.000 + 4 4.460.000 + 8 9.238.000 + 6 19,070,000 + 7 1,024,000 2,625,000 1,776,000 6,300,000 12,100,000 23,825,000 1,120,000 3,248,000 1,848,000 6,800,000 12,534,000 25,550,000 (Bushels) 16,173,000 32,418,000 12,610,000 43,507,000 22,831,000 127,539,000 15,164,000 32,942,000 12,307,000 52,096,000 22,316,000 134,825,000 16,835,000 36,575,000 12,840,000 46,596,000 22,442,000 135,288,000 Hay (Tons) 467.000 924.000 642.000 744.000 + 5 10 398.000 3,175,000 + 5 472,000 1,250,000 793,000 1,071,000 470,000 4,056,000 519,000 1,364,000 875,000 1,208,000 524,000 4,490,000 Irish Potatoes (Bushels) 0 2.997.000 1,920,000 — 4 10,661,000 6,916,000 + 9 2.844.000 3,795,000 8.182.000 + 5 6,636,000 2,475,000 + 8 2,548,000 27,159,000 + 3 21,815,000 2,200,000 8,030,000 4,140,000 8,632,000 3,108,000 26,110,000 Acreage Maryland ........ Virginia ............ West Virginia . North Carolina South Carolina District Total Maryland ........ Virginia ............ West Virginia ., North Carolina . South Carolina District Total 11 — — 7 — 8 + 4 + 20 —1 + + Com 2 5 6 4 3 1 Maryland ............... Virginia ............... West Virginia . . . North Carolina . . . South Carolina . .. District Total . .. Maryland .......... Virginia ........... West Virginia . . . North Carolina . South Carolina . District Total Maryland ........ Virginia ............ West Virginia North Carolina South Carolina District Total 1 — + 5 + 3 + ) Maryland ........ Virginia .......... North Carolina South Carolina District Total - 10 + 13 — 1 1.071.000 4.061.000 8.354.000 5.401.000 18.887.000 1,040,000 2,970,000 6,880,000 4,400,000 15,290,000 1,530,000 4,000,000 7,848,000 5,890,000 19,268,000 Maryland ........ Virginia .......... West Virginia North Carolina South Carolina District Total Tobacco (Pounds) 26.901.000 3 10 99.861.000 2,985,000 + 14 529.366.000 11 85.656.000 11 10 744.759.000 30,225,000 88,572,000 2,610,000 459,490,000 69,660,000 650,557,000 31,125,000 96,180,000 3,052,000 513,910,000 90,000,000 734,267,000 Peaches (Bushels) 372.000 899.000 285.000 1.938.000 1.424.000 4.918.000 563,000 1,860,000 590,000 3,167,000 4,095,000 10,275,000 544,000 1,840,000 560,000 2,320,000 3,800,000 9,064,000 Maryland ........ Virginia .......... West Virginia North Carolina South Carolina District Total (Compiled July 21, 1942) + 13 - 3 + + + + + 6 MONTHLY REVIEW SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) I N D U S T R IA L P R O D U C T IO N Industrial activity continued to advance during June and the first half of July. Volume of goods distributed to consumers continued substantially below a year ago and commodity prices generally showed little change. PRODUCTION Federal Reserve monthly index of physical vol ume of production, adjusted for seasonal varia tion, 1935-39 average = 100. Latest figures shown are for June 1942. COST O F L IV IN G Industrial output increased further in June and the Board’s seasonally ad justed index rose from 174 to 177 per cent o f the 1935-39 average. Production in the machinery, transportation equipment, and other armament industries con tinued to advance, reflecting further progress toward meeting the requirements of the war production program. Steel production declined somewhat in June but increased to earlier high levels in the first three weeks of July. Lumber produc tion increased seasonally in June, while in the furniture industry, where activity usually rises at this time of year, there was a decline, reflecting in part the fact that a number of plants in the industry are being converted to the manufacture of war products. In industries manufacturing nondurable goods, output as a whole showed little change from May to June. Textile production declined somewhat, reflecting a reduction in activity at cotton mills from earlier peak levels. Paperboard pro duction decreased sharply further and there was also a decline in activity in the printing industry. On the other hand, output of manufactured food products in creased and shoe production showed less than the customary seasonal decline. Mineral production continued large in June. Coal production was main tained at peak levels; output of crude petroleum showed little change, following the sharp decline that occurred during March and April. Lake shipments of iron ore in June amounted to 12,600,000 gross tons and at the month end stocks at lower Lake ports totaled 31,000,000 tons as compared with 26,600,000 tons a year ago. Value of construction contracts awarded, as reported by the F. W. Dodge Cor poration, continued to increase in June and was 57 per cent above the previous record high month of August 1941. The sharp rise in June reflected a continued increase in awards for public projects, which accounted for about 93 per cent of all contracts let during the month. DISTRIBUTION Bureau of Labor Statistics’ indexes, 1935-39 average = 100. Fifteenth of month figures. Last month in each calendar quarter through Sept. 1940, monthly thereafter. Latest figures shown are for June 1942. M E M B E R B A N K S IN 101 L EAD IN G C IT IE S WLUdlt O* DOLLARS Distribution of commodities to consumers declined somewhat further in June. Smaller sales were reported by both department stores and mail-order houses, while sales at variety stores were maintained at about the May rate. In the first half of July department store sales showed less than the customary sharp sea sonal decline. Volume of railroad freight traffic was maintained in large volume during June and the first half of July. The number of cars loaded was below the level that prevailed a year ago, however, reflecting a sharp reduction in carloadings in less-than-carload lots as a result of orders by the Coordinator of Transportation which raised the minimum permissible weights for such loadings and thereby effected a fuller utilization of existing equipment. COMMODITY PRICES 1936 1937 1938 1939 1940 194! 1942 Wednesday figures. Commercial loans, which include industrial and agricultural loans, repre sent prior to May 19, 1937 so-called “ Other loans” as then reported. Latest figures shown are for July 15, 1942. EXCESS 1936 1937 RESERVES 1938 OF M EM B E R 1939 1940 BANKS 1941 Wednesday figures, partly estimated. figures shown are for July 15, 1942. 1942 Latest Prices of most commodities both at wholesale and retail continued to show little change from the middle of June to the middle of July. Prices of cotton, wool, and some other agricultural commodities, which had declined in the early part of June, advanced in this period. About twenty additional maximum price schedules were announced covering a wide variety of products and in some cases requiring price reductions. On the other hand, Federal approval was given for higher prices on various processed fruits and vegetables, textile products, petroleum products sold on the East Coast, and services supplied to consumers. Retail prices of uncontrolled foods advanced sharply from May to June and the Bureau of Labor Statistics price index for all foods rose 1 1/2 points to 123 per cent of the 1935-39 average— an increase of one-fourth since the beginning of the current advance in March 1941. BANK CREDIT Member banks in leading cities increased their holdings of Government secu rities sharply during the first half of July. Purchases included portions of in creased Treasury bill issues and of the new 2 per cent 7- to 9-year bond. This followed a substantial growth in the second quarter of the year when member banks absorbed about 3.3 billion dollars, or more than half of the increase in Treasury open-market issues. All classes of banks showed large increases, the largest percentage increases being in Chicago and at reserve city banks. Excess reserves of member banks have been at a lower level in July than in June, because of increased need for reserves arising out of deposit growth, the continued currency drain, and a large temporary increase in Treasury deposits at Reserve Banks. Substantial System open-market operations partially offset the loss of reserves from these sources. The decrease in excess reserves was concentrated in New York and Chicago, reducing excess funds in those cities to low levels. Adjusted demand deposits continued to rise at reporting banks in leading cities except in New York. Yields on United States Government securities and other money rates have shown little change in recent weeks.
