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MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, C h a irm a n an d F e d e ra l R e serv e A gent FEDERAL RESERVE BANK OF RICHMOND RICHMOND, VIRGINIA JUNE 30, 1932 pound early in June, and cotton con ENERAL business conditions in sumption in May was much lower FIFTH FEDERAL RESERVE DISTRICT the Fifth Federal reserve dis-^ than consumption in May 1931. On <* trict were somewhat more unsatis the other hand, exports of cotton in factory during the period covered May were larger than exports in the by this report. The usual spring in corresponding month last year. The crease in business was very small in output of manufactured tobacco the district this year, and trade in products, which held up longer than May and early June was poor. There any other line of industry during the were some important developments present depression, has declined ma in banking between the middle of terially during the past two or three May and the middle of June, among months. Prospects for agriculture them being a material increase in this year are fair as to quantity, but reserve bank purchases of Govern there is little sign of improvement ment securities with the aim of counteracting liquidation, a seasonal in prices. The weather in May was decline in Federal reserve notes in unfavorable for best development of circulation, and an unusual increase crops, but warmer weather and gen in member bank reserve balances at the reserve eral rains in June improved the outlook. There bank. Among regularly reporting member banks have been acreage reductions in most money crops, in leading cities, loans and discounts declined dur but not enough to offset large surplus stocks of ing the past month, but both demand and time de farm products carried over from last year. Except posits increased. These banks increased their re for Government work in the District of Columbia, serve deposits at the Federal Reserve Bank of Rich there is very little construction work going on in mond, and also increased their investments in the Fifth district, and consequently all industries bonds. Debits to individual accounts figures connected with building are feeling the full force in clearing house banks in the Fifth district of current conditions. Retail trade as reflected in totaled nearly 7 per cent less in the five weeks department store sales were 17 per cent less in May ended June 15 than in the preceding five weeks this 1932 than in May last year, and wholesale trade in year and 26 per cent less than debits in the cor leading lines was also much behind the volume of responding five weeks last year. The business fail trade in 1931. ure record in May in the Fifth district was dis tinctly better than the National record in both Reserve Bank Statement number of insolvencies and in the aggregate of 000 omitted liabilities involved. No improvement occurred in ITEMS June 15 May 15 June 15 employment circles in May and early June, but 1932 1932 1931 on the contrary the ranks of unemployed apparent ly increased further and additional concerns were $18,273 forced to reduce wage scales. Coal production de Rediscounts held....................... $24,537 $23,793 3,787 2,054 4,314 Open market paper.................... clined by more than the seasonal amount in May, Government securities----------27,975 47,133 29,983 partly due to a strike in part of the bituminous 53,822 75,457 52,570 Total earning assets----------field. The textile industry in the Fifth district re Circulation of Fed. Res. notes.. 88,324 92,579 73,083 48,434 61,209 59,022 stricted operations further, and in some cases closed Members' reserve deposits-----98,534 84,656 86,753 mills entirely, thereby adding to the unemployment Cash reserves............................ 67.15 *55.55 65.43 Reserve ratio............................ problem. Cotton prices declined below 5 cents per 2 MONTHLY REVIEW There were several important changes in the statement of condition of the Federal Reserve Bank of Richmond between May 15 and June 15, 1932, chiefly in the nature of an expansion of reserve bank credit. Rediscounts for member banks rose only $744,000 during the month, but the portfolio of open market paper increased by $1,733,000, and holdings of Government securities rose by $19,158,000, the last named increase being due to co-opera tion with a System policy designed to put additional funds into circulation. These changes in earning assets brought with them a net increase of $21,635,000 in total earning assets during the past month. Between May 15 and June 15 there was an unusual rise of $12,775,000 in member bank reserve deposits at the Federal Reserve Bank of Richmond, but nearly all of this increase was accounted for by a few large banks in Baltimore, Richmond and W ash ington. About the usual seasonal decline occurred in the circulation of Federal Reservee notes last month, a decrease of $4,255,000 being reported. The several changes mentioned in the statement, espe cially the material increase in holdings of Govern ment securities, reduced the cash reserves of the Richmond bank by $13,878,000 between May 15 and June 15, and also lowered the ratio of cash reserves to note and deposit liabilities combined by 11.60 points. In comparison with condition figures reported for June 15, 1931, those for June 15, 1932, show a ma terially larger use of reserve bank credit this year. Rediscounts for member banks at the Federal Re serve Bank of Richmond rose $6,264,000 during the year. There was a decline of $527,000 in holdings of open m arket paper, but Government securities held rose $17,150,000 between June 15 last year and June 15 this year. These changes resulted in a net increase of $22,887,000 in total earning assets during the year. The circulation of Federal Re serve notes continues much higher than at this time last year, the amount outstanding on June 15, 1932, being $15,241,000 larger than the amount outstand ing a year earlier. Member bank reserve deposits rose by $2,187,000 between the middle of June last year and this. Cash reserves of the Federal Re serve Bank of Richmond declined $2,097,000 in the year between the dates given, a relatively small change, but because of the increased circulation of Federal Reserve notes this year the ratio of cash reserves to note and deposit liabilities combined de creased 9.88 points, a comparativly large decline. Member Bank Statement The accompanying table shows the principal items of condition reported by all member banks in twelve leading cities of the Fifth reserve district as of three dates, June 15 and May 11, 1932, and June 17, 1931, thus affording opportunity for comparison of the latest available figures with those of the preceding month this year and the corresponding month last year. Forty-nine banks are included in the tabulation. ITEMS ooo omitted June 15 May 11 June 17 1932 1932 1931 Loans on stocks and bonds (in cluding Governments)_____ $123,955 $132,686 211,632 212,659 All other loans_____________ Total loans and discounts___ 335,587 345,345 Investments in stocks and bonds 247,689 239,117 33,433 Reserve bal. with F. R. Bank.... 44,282 Cash in vaults_____________ 12,625 11,915 Demand deposits....................... 288,403 280,931 Time deposits............................. 226,282 225,999 5,164 Borrowed from F. R. Bank. 6,315 $161,092 258,775 419,867 220,818 38,252 15,384 333,405 262,495 4,234 Between May 11 and June 15, this year, total loans and discounts at the forty-nine reporting banks declined by $9,758,000, loans on stocks and bonds decreasing $8,731,000 and all other loans de creasing $1,027,000. The decline in loans during the month was larger than normally occurs at this sea son; in fact, prior to the past two years loans tended to change relatively little at this time of year. The reporting banks increased their invest ments in bonds by $8,572,000 during the past month, and also increased their reserve deposits at the Federal reserve bank by $10,849,000, the latter an unusually large increase which is prob ably temporary. Cash in vaults decreased mod erately between May 11 and June 15, dropping $710,000, but for the first time since July 1931 both demand and time deposits increased. Demand de posits rose $7,472,000 during the month, in spite of the decline in loans previously mentioned, and time deposits rose $283,000. The reporting banks increased their borrowing at the Federal reserve bank by $1,151,000 between May 11 and June 15 this year. A comparison of the condition figures for June 15,1932, with those for June 17, 1931, shows marked changes in loans, investments and deposits. During the past year, loans on securties declined by $37,137,000 and all other loans, which are chiefly agri cultural or commercial, decreased by $47,143,000, a total decline in loans and discounts amounting to $84,280,000. During the same period, the reporting banks increased their investments in stocks and bonds by $26,871,000, and on June 15, 1932, their in vestments in securities amounted to approximately 74 per cent of their loans, an unusually high per centage. Aggregate reserve balances of the fortynine reporting banks at the reserve bank rose by $6,030,000 during the year, but on June 15, 1932, their cash in vault was lower by $3,469,000 than on June 17, 1931. Total deposits in the reporting in stitutions declined $82,215,000 between the middle of June last year and the corresponding date this year, demand deposits decreasing $46,002,000 and time deposits falling $36,213,000. On June 15 this year the forty-nine banks were borrowing $2,081,000 more from the Federal Reserve Bank of Rich mond than they were borrowing on June 17 last year. Sixteen of the forty-nine reporting banks were borrowing from the reserve bank on the 1932 MONTHLY REVIEW date, while only eight of the same banks were bor rowing a year ago. Time and Savings Deposits Time deposits in forty-nine regularly reporting member banks and aggregate deposits in twelve mutual savings banks in Baltimore totaled $439,403,447 at the end of May 1932, a decrease under time and savings deposits totaling $439,768,151 at the end of April this year, and materially less than $470,421,317 in deposits at the end of May last year. Debits to Individual Accounts CITIES ooo omitted Total debits, five weeks ended May 11, June 15, June 17, 1932 1932 1931 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_______ Portsmouth, Va_____ Raleigh, N. C.-------Richmond, Va______ Roanoke, Va---------Spartanburg, S. C.__ Washington, D. \C.__ Wilmington, '.N. C_ _ Winston-Salem, N. C $ 9,145 309,942 12,577 34,468 38,017 14,254 6,217 4,871 17,199 11,798 9,672 6,633 12,125 14,341 8,650 41,762 4,002 14,852 114,223 20,911 6,472 224,403 8,574 26,531 $ 10,223 336,674 13,548 33,799 40,038 17,653 6,603 5,301 16,870 11,368 11,560 7,168 13,506 14,961 8,482 42,059 4,153 15,767 121,354 23,032 7,462 246,119 9,253 25,366 $ 13,261 430,325 20,891 44,176 51,355 26,818 9,213 6,711 25,423 21,352 17,038 9,297 19,962 18,984 12,347 58,396 5,616 21,128 138,817 29,394 10,898 280,316 13,273 35,840 Fifth District Totals $971,639 $1,042,319 $1,320,831 Aggregate payments by checks drawn on clear ing house banks in twenty-four cities of the Fifth Federal reserve district are shown in the accom panying table for three equal periods of five weeks, ended June 15, 1932, May 11, 1932, and June 17, 1931, thus affording opportunity for comparison of the latest available figures with those for the pre ceding like period this year and the corresponding period a year ago. In comparing 1932 with 1931 figures, it should be remembered that lower price levels in many lines this year affect the comparison. For the five weeks ended June 15 this year, five cities reported higher figures than for the preceding five weeks, ended May 11, but no city reported higher figures than for the corresponding five weeks of 1931. The cities which showed higher figures than for the preceding month were Winston-Salem, with an increase of 4.6 per cent, Greensboro with an increase of 3.8 per cent, and Charleston, W. Va., Durham and Newport News, all with increases of 2.0 per cent. The district debits for the five weeks ended June 15, 1932, averaged 3 6.8 per cent less than debits for the five weeks ended May 11, 1932, and 26.4 per cent less than debits for the like period ended June 17, 1931. The daily average of debits during the five weeks ended June 15, 1932, was approximately the same as the daily average for the five preceding weeks this year, the later period containing fewer business days on account of holidays throughout the entire district or in one or more of the several states. Commercial Failures The record of business failures in the Fifth Fed eral reserve district in May was better than the record for the United States as a whole. Bank ruptcies in the Fifth district numbered 165 in May, compared with 149 in May 1931, an increase of 10.7 per cent, but last month’s aggregate liabilities in volved were only $2,032,935 compared, with $2,296,923 in May last year, a decrease of il.5 per cent. The number of failures in May 1932 was next to the lowest reported for any month this year, but exceeded the number of failures in May of any other year since 1922. May 1932 liabilities were the lowest for any month since last October, and were exceeded by May figures in ten of the past thirteen years, 1919, 1920 and 1926 being the only years in which lower liabilities were reported in May than were reported for May 1932. The United States reported 2,788 failures in May, compared with 2,248 in May last year, an increase of 24.0 per cent, and liabilities last month totaling $83,763,521 showed an increase of 56.9 per cent in comparison with $53,371,212 in liabilities for May 1931. Ten of the twelve reserve districts reported more failures for the 1932 month, and seven districts reported in creased liabilities. Employment The employment situation in the Fifth District is giving officials and welfare agencies more and more concern as month after month passes without any reduction in the number of persons who are unable to obtain steady employment. I t was hoped that there would be some revival of work in the spring, but the seasonal increase has been very slight this year. Construction work in the cities is almost non-existent, and practically no industrial building is being done. About the only construction work be ing carried on in any volume is Government work in Washington and public work on streets, sewers, roads, etc., but even this type of work is in smaller amount than it was two years ago. In an effort to meet the general demand for lower—or at least for no higher—taxes, cities, counties and states are holding back work that probably would be done in more prosperous times. Reduced purchasing power has lowered the public’s demands for consumers’ goods, and therefore practically all industrial plants are operating on restricted schedules, and in many cases are temporarily closed to prevent ac cumulation of manufactured goods in their ware houses. 4 MONTHLY REVIEW Cotal Production The total production of bituminous coal in the United States in May 1932 amounted to 18,384,000 net tons, compared with 20,300,000 tons mined dur ing April and 28,314,000 tons in May last year. Total production of soft coal during the present calendar year to June 11 (approximately 138 working days) amounted to 133,284,000 tons, the lowest figure for the corresponding period of recent years. In addi tion to the effects of the depression, bituminous coal production has been reduced in the past two months by a strike extending from the W est Vir ginia Panhandle to Illinois. A report of the Bureau of Mines, Department of Commerce, issued early in June, gave coal produc tion figures by states for the month of April. West Virginia held first place with 6,212,000 net tons. The states of W est Virginia, Virginia and Mary land mined a total of 6,901,000 tons in April, or 34 per cent of the National production. The relatively high percentage of total output shown by the Fifth district states was due partly to the strike in some other producing sections. Tidewater shipments of coal through Hampton Roads in April 1932 totaled 1,429,000 tons, compared with 1,496,000 tons shipped in March this year and 1,629,000 tons shipped in April last year. Hampton Roads, Baltimore and Charleston loaded 67 per cent of total tidewater shipments during April 1932. Textiles The textile industry in the Fifth reserve district, which held its own better than many other indus tries during the early part of the depression, has recently restricted operations further, and in some cases mills have been closed entirely for the pres ent. Cotton consumption in the Fifth district in May 1932 totaled 158,464 bales, of which North Carolina mills used 78,550 bales, South Carolina mills 71,421 bales, and Virgina mills 8,493 bales. Consumption of cotton in the district totaled 178,266 bales in April 1932 and 208,822 bales in May 1931. May 1932 consumption in Virginia and the Carolinas was 47.67 per cent of National consump tion, a lower figure than 48.54 per cent of National consumption in April this year but higher than 44.87 per cent in May last year. Cotton Statistics recovered somewhat and moved upward to 4.99 cents on June 17, the latest date for which figures are available. The June 17 price compared with 8.21 cents per pound on June 19, 1931, a difference of $16 per bale in favor of the earlier year. The following values of a 500-pound bale of middling grade upland cotton on the Friday nearest the mid dle of June of each of the past eleven years shows how seriously the cotton planter has been hit by the current depression: 1932, $24.95; 1931, $41.05; 1930, $66.40; 1929, $92.50; 1928, $101.05; 1927, $79.05; 1926, $84.85; 1925, $115.70; 1924, $140.00; 1923, $138,80; 1922, $105,75; 1921, $51.40; 1920, $206.00. Consumption of cotton in the United States in May 1932 totaled 332,439 bales, compared with 367,280 bales used in April this year and 465,363 bales in May 1931. Total consumption for the ten months of the present cotton season—August 1 to May 31— amounted to 4,269,664 bales, compared with 4,358,189 bales consumed in the corresponding period of the 1930-1931 season. Manufacturing establish ments held 1,463,389 bales on May 31, compared with 1,532,967 bales held on April 30 and 1,257,616 bales on May 31, 1931. Public warehouses and com presses held 7,608,604 bales in storage at the end of May this year, compared with 8,163,937 bales so held a month earlier and 5,490,017 bales on May 31 last year. May exports totaled 500,871 bales, compared with 335,796 bales sent abroad in May 1931. Exports during the ten months of this cotton year totaled 7,897,867 bales, compared with 6,245,465 bales shipped over seas during the correspond ing ten months ended May 31, 1931. Spindles active at some time during May numbered 21,639,352, compared with 23,409,246 in April this year and 26,379,082 in May 1931. Cotton consumption in the cotton growing states totaled 287,655 bales in May, compared with 311,773 bales used in April and 361,680 bales in May 1931. Last month's consumption in the cotton growing states amounted to 86.53 per cent of National con sumption, a higher figure than 84.89 per cent in April this year and 77.72 per cent in May 1931. Of the 287,655 bales of cotton consumed in the cot ton growing states in May, the Fifth district mills used 158,464 bales, or 55.09 per cent, compared with 57.74 per cent of Southern consumption attained in the district in May last year. Tobacco Manufacturing Between the middle of May and the middle of June, spot cotton prices on ten leading Southern j On June 15, the Commissioner of Internal Revemarkets declined further and reached the lowest I nue issued a report on taxes collected in May and figure on record during the first half of June. In the eleven months ended May 31 on manufactured our Review last month we quoted the average price for tobacco products. May production of cigarettes in middling upland cotton, % inch staple, as 5.34 the United States numbered 8,685,337,417, compared cents per pound on May 13. On May 20 the aver with 10,447,680,180 cigarettes manufactured in May age price was up to 5.54 cents, but on May 27 it 1931. Smoking and chewing tobacco declined from was 5.28 cents. On June 3 the average price had 27,381,881 pounds in May last year to 24,996,958 dropped below the 5 cents line to 4.87 cents, and pounds in May this year. Cigars manufactured continued downward to 4.86 cents on June 10, but dropped from 467,299,661 in May 1931 to 368,553,366 MONTHLY REVIEW in May 1932. Snuff production fell from 3,397,806 pounds to 2,812,993 pounds. Since about 88 per cent of American made cigarettes are manufactured in the Fifth reserve district, the district manu factured approximately 7,643,000,000 cigarettes last month. During the eleven months ended May 31, 1932, taxes on cigarettes totaled $285,880,564, com pared with $324,430,473 collected in the correspond ing period of the preceding year. Taxes on smok ing and chewing tobacco decreased during the same period from $53,380,700 to $53,058,427. Agricultural Notes Maryland. A wheat crop of about 7,277,000 bushels is forecast for 1932. W heat prospects improved during the month of May, but it is not likely that this year’s crop will be as large as that of last year when production totaled 9,696,000 bushels. A peach crop just half the size of last year’s is in prospect, the forecast being 400,000 bushels compared with 800.000 bushels in 1931. Peach trees bloomed well this spring, considering the very heavy crop they bore last year, but suffered considerable loss of blossoms and fruit from cool, wet weather in May. Condition of apples is reported at 54 per cent, seven points below average for this date and 29 per cent lower than on June 1 last year. Rye prospects have improved since May 1, and a crop of 280,000 bushels is expected, compared with last year’s yield of 378.000 bushels. Hay crops and pastures improved slightly during May and the condition of these crops was about up to average on June 1. Farmers in Maryland report heavy infestations of insects in nearly all parts of the State, wheat is suffering from leaf rust, and blight has developed in many pear and apple orchards. Virginia crops did not make satisfactory progress during May as weather conditions were unfavor able, and therefore prospects on June 1 were much less promising than a year ago. Farmers reported that they were having considerable difficulty in securing a stand of corn, cotton and peanuts be cause of poor germination of seed and injury to the young plants from cut worms. Tobacco grow ers report considerable injury to plants from blue mold and insects. Dry weather has greatly re tarded transplanting tobacco and on June 1 a much smaller percentage of the crop than usual had been set out. Prospects for fruit, with the exception of berries, are much below last year’s large crop and even below the ten-year average. There is general complaint throughout the State that damage from insects has been more severe this season than usual. The wheat crop in Virginia is expected to yield 8.190.000 bushels this year, compared with the large crop of 13,266,000 bushels in 1931. The oat crop made favorable progress during the first part of May but the recent dry weather retarded growth. Hay crops made considerable growth during the first part of May but prospects declined the latter part due to the lack of rainfall. The first cutting of alfalfa was very good, but prospects for the sec 5 ond cutting were poor on June 1. General rains in the first half of June probably improved most crops materially, but official estimates as to the im provement are not yet available. The production of early potatoes, based on the June 1 condition, was forcast as 7,806,000 bushels, compared with 10.639.000 bushels harvested last year, most of the decline in probable production being due to reduced acreage. W eather conditions in the second half of May were very unfavorable for the growth of pota toes, but good rains in June probably improved prospects considerably. West Virginia crops suffered in May from cool nights, light frosts in some sections, and a lack of moisture. On June 1, the wheat crop showed a con dition of 78 per cent in comparison with 85 per cent at this time last year, indicating production of only 1.539.000 bushels in 1932 against 2,373,000 bushels in 1931. Rye prospects are similar to those of wheat, and the forecast of probable production is only 105.000 bushels this year compared with 259,000 bushels harvested last year. May was too cold and dry for the oat crop and on June 1 the condition of oats was 70 per cent as against 88 per cent a year earlier. All hay crops are short. Pastures show the effect of the lack of moisture, and are short in most sections of the State. Prospects for apples are poorer than last year. Conditions are w orst in the Ohio Valley where freezing weather caught the trees in bloom. Prospects for the peach crop are the poorest of all fruit crops. After extremely large production in 1931 a light bloom was reported from many sections and frost damage during April caused further injury. The Carolinas have less favorable crop prospects this year than they had a year ago, on the whole. The weather has been cool, and South Carolina especial ly suffered from lack of moisture during May. Prospective yields of grain crops are generally lower than the excellent yields of 1931. Cor respondents report to the State agricultural statis ticians that approximately a third less fertilizer was used under 1932 crops than under the crops last year. Construction jBuilding permits issued in thirty-two leading Fifth district cities in May 1932 numbered 2,835, com pared with 3,432 permits issued in May 1931, a de crease of 17.4 per cent. Estimated valuation figures for all classes of permits issued last month totaled only $3,984,336, compared with $10,192,488 valua tion for permits issued in May 1931, a decrease this year of 60.9 per cent. A much larger part of this year’s permits was for small jobs, chiefly of repair work, than was the case last year. Among the larger cities Richmond and Charleston, W. Va., re ported increased valuation figures for May this year, but Baltimore, Norfolk, Charlotte, WinstonSalem and Washington reported lower figures. Only six of the thirty-tw o cities showed higher figures MONTHLY REVIEW 6 BuildingPermits Issued in May 1932 and 1931 CITIES Permits Issued 1932 1931 Baltimore, Md--------- 1,289 Cumberland, Md.-----13 Frederick, Md--------16 Hagerstown, Md.---8 Salisbury, Md--------18 Danville, Va---------14 Lynchburg, Va-------31 Norfolk, Va.----------- 119 Petersburg, Va------5 Portsmouth, Va.-----26 Richmond, Va.-------- 112 Roanoke, Va.--------20 Bluefield, W. Va....... 12 Charleston, W. Va.— 79 Clarksburg, W. Va..... 21 Huntington, * Va— W. 14 Asheville, N. C------34 Charlotte, N. C.------36 Durham, N. C.____ 19 Greensboro, N. C....... 44 High Point, N. C, 8 Raleigh, N. C._____ 11 Rocky Mount, N. C_ 3 Salisbury, N. C....... . 5 Wilmington, N. C. 12 Winston-Salem, N. C. 49 Charleston, S. C____ 37 Columbia, S. C_____ 67 Greenville, S. C_____ 24 Rock Hill, S. C. 14 Spartanburg, S. C, 16 Washington, D. G.... 659 Totals __________ 2,835 Total Valuation 1931 1932 1,407 $2,087,520 3,556 13 9,438 17 2,410 20 7,950 34 9,235 13 27,761 38 100,235 155 2,230 10 24,258 .39 174,277 124 9,745 38 12,045 9 58,510 31 16,037 20 13,725 24 5,755 20 117,195 49 109,625 22 16,759 61 14,740 16 22,610 19 1,670 6 8,025 9 8,050 17 66,730 209 12,055 32 53,405 39 34,125 21 6,080 11 2,445 26 946,135 883 $3,287,160 6,830 31,150 55,315 35,100 3,800 47,659 160,050 19,930 25,005 168,080 282,448 8,180 33,965 30,490 23,590 38,012 189,676 66,845 100,017 20,305 14,907 13,500 180,500 17,100 228,000 28,615 58,685 61,585 14,180 8,230 4,933,579 3,432 S3,984,336 $10,192,488 for May 1932 than for May 1931, these being, in addition to Richmond and Charleston, W. Va., previously mentioned, Bluefield, Danville, Durham and Raleigh. Contracts actually awarded for construction work in the Fifth district in May 1932 totaled $30,540,265, according to figures collected by the F. W. Dodge Corporation. This figure is the largest total re ported for any of the eleven reserve districts for which Dodge figures are collected, the Twelfth, or San Francisco, district figures not being available. The large total for the Richmond district is due entirely to extensive Government projects in the District of Columbia. Last month’s contracts in the Fifth district were 45 per cent greater in amount than $20,971,802 in awards in May last year. Contracts for residential types of construc tion last month totaled $3,174,805, or only 10.4 per cent of the whole, compared with about 32 per cent in May 1931, when residential contracts totaled $6,681,837. Retail Trade, 33 Department Stores Department store sales in the Fifth reserve dis trict in May were 17.2 per cent less in dollar amount than sales in May 1931, but at least a part of the decline was doubtless due to price recessions during the year. Aggregate sales in the first five months of 1932 were 17.5 per cent less than total sales in the corresponding period last year. Richmond Baltimore Washington Other Cities District May 1932 sales, compared with sales in May 1931: —23.6 —18.2 —12.6 —232 —17.2 Total sales since January 1, 1932, compared with sales in January-May 1931: —19.2 —18.8 —14.0 —24.3 —17.5 May 31, 1932, stocks, compared with stocks on May 31, 1931: —12.5 —15.2 —10.7 —19.0 —13.7 May 31, 1932, stocks, compared with stocks on April 30, 1932: — 1.7 — 3.1 — 2.9 — 3.8 — 3.0 Number of times stock was turned in May 1932: .303 .309 .334 .228 .309 Number of times stock was turned since January 1, 1932: 1.459 1.471 1,524 1.050 1.441 Percentage of May 1, 1932, receivables collected in May: 292 22.5 29.2 25.3 25.7 Stocks on the shelves of the reporting stores on May 31, 1932, totaled 13.7 per cent less, at retail selling values, than stocks on May 31, 1931, and also showed a decline of 3.0 per cent since April 30 this year. Stocks were turned an average of .309 times during the month of May, and since January 1 stocks have been turned an average of 1.441 times, a lower figure than 1.537 times stocks were turned during the first five months of 1931. Collections in 32 of the 33 reporting stores aver aged 25.7 per cent of receivables outstanding on May 1, a lower percentage of receivables collected during the month than 28.2 per cent collected in May, 1931. Wholesale Trade, 62 Firms 22 9 Groceries Dry Goods 6 Shoes 13 Hardware 12 Drugs May 1932 sales, compared with sales in May 1931: —20.5 —31.6 : —19.5 —25.6 -20.5 May 1932 sales, compared with sales in April 1932: - 4.6 — 6.0 —12.5 —11.8 —13.4 Jan.-May 1932 sales, compared with sales in Jan.-May 1931: —15.9 —26.6 —12.2 —18.3 —16.9 May 31, 1932, stocks, compared with May 31, 1931, stocks: —14.4(8*) —13.0(4*) —21.6(5*) — 8.7(7*) May 31, 1932, stocks, compared with April 30, 1932, stocks: — 2.0(8*) — 6.6(4*) —11.1(5*) — 2.7(7*) Percentage of May 1, 1932, receivables collected in May: 56.3(13*) 32.0(6*) 35.7(6*) 29.3(11*) 48.0(8*) * Number of reporting firms. t The accompanying table shows in percentage form how sales in five wholesale lines in May 1932 and in the first five months of this year compared with sales in May 1931 and in the first five months of last year. It also shows changes in stocks on hand, and finally gives the percentages of col lections during May to total accounts receivable as of May 1,1932. (Compiled June 21, 1932) MONTHLY REVIEW 7 BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Beserve Board) Volume of production in basic industries and em ployment at factories decreased further in May, and wholesale prices declined. Foreign withdrawals of gold, which had been in large volume in May and the first half of June, practically stopped after the middle of the month. Production and Employment Production at mines and factories declined fur ther in May, and the Board’s seasonally adjusted index of industrial production showed a reduction from 64 per cent of the 1923-1925 average in April to 61 per cent in May. Output of coal was sub stantially reduced, particularly in the anthracite fields; shipments of iron ore showed less than the usual seasonal increase, production of iron and steel declined, and activity at textile mills and shoe factories was further curtailed. In the automobile industry output increased considerably. In the first part of June activity in the steel and cotton industries was reported to have declined fur ther, while output of automobiles continued at about the same rate as in the latter part of May. Further reductions in employment and earnings of factory workers accompanied the smaller vol ume of manufacturing output in May, particularly in the steel and machinery industries, and in the textile and clothing trades. Employment at auto mobile plants and in the seasonally active food in dustries showed an increase. Value of building contracts awarded, according to reports to the F. W. Dodge Corporation, after increasing somewhat in April and May, declined slightly in the first half of June, reflecting chiefly smaller awards for public works and other nonresidential building. Distribution Railroad freight traffic decreased further in May, the largest reduction being in shipments of coal and miscellaneous freight. Sales of department stores in leading cities, which had increased substantially dur ing April, were smaller in May. Wholesale Prices Prices of commodities at wholesale were 1.7 per cent lower in May than in April, according to the Bureau of Labor Statistics. There were large de creases in prices of many domestic agricultural products and of hides and textiles. Prices of pe troleum products advanced. During the first three weeks of June, market quotations for a number of non-agricultural com modities were relatively steady, and prices of sugar, meats, and livestock increased. Prices of wheat, after considerable fluctuations, were at unusually low levels at the beginning of the third week in June. Bank Credit Withdrawals of gold from the United States con tinued through May and the first half of June, and the country’s stock of monetary gold declined by $435,000,000 between May 4 and June 15. A fter that date there was no further decline in the total stock of monetary gold, continued gold exports representing gold previously earmarked by foreign central banks. During the first part of May con tinued purchases of United States Government se curities by the reserve banks enabled member banks further to reduce their discounts; in later weeks, however, funds released through these purchases were absorbed by the demand for gold for export, and there was also a decrease in member bank re serve balances. Loans and investments of reporting member banks in leading cities, which had declined sharply earlier in the year, showed wide fluctuations after the middle of May. In the middle of June total loans and investments were larger than a month earlier, the increase in holdings of United States securities being more than sufficient to offset de clines in other investments and in loans. Money rates in the open m arket remained at low levels. Rates on prime commercial paper were re duced to a range of 2^£-2^ per cent in the second week of June.