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MONTHLY REVIEW of Financial and Business Conditions F ift h Federal i x Richmond® - o va. ‘iiir.....' 4 // _ Reserve District June 30, 1938 Federal Reserve Bank, Richmond, Va. B U SIN E SS in the Fifth Federal Reserve district in May and the first half of June continued at about the same levels as in earlier months this year. There were a few instances of improvement, but on the whole little progress out of the recession was indicated. Increased ac tivity in the cotton textile industry in June was the chief improvement, a number of mills resuming operations after several weeks of idleness because of excess inventories. Tobacco manufacturing in May increased substantially over April in all lines, and production of tobacco products was larger than in May 1937 in all lines except cigars. The number of cigarettes manufactured in May 1938 was 9.6 pier cent above the number made in May last year, and the Fifth district manufactures approximately 83 per cent of American cigarettes. In banking, no important developments occurred between May 15 and June 15. At the Federal Reserve Bank of Richmond, discounts rose moderately and there was also an increase in loans made direct to industry for working capital, but both items were lower than on June 15, 1937. Circulation of Federal Re serve notes declined seasonally last month, and continued below the volume of notes in circulation a year ago. Mem ber bank reserve deposits rose between the middle of May and the middle of June, and on the latter date were higher than on June 15 last year. Regularly reporting member banks showed declines between May 11 and June 15 in loans, investments in securities, cash in vaults and demand deposits, while increases were reported in reserve balances and time deposits. Debits to individual accounts in twen ty-four cities showed a seasonal decrease in May in com parison with April, partly due to Easter buying in the earlier month but chiefly because quarterly payments al ways increase debits materially early in April. Dtebits in May were 14.5 per cent less than in May last year, the largest percentage decline in any month this year. Em ployment showed no material change in May, but work increased in the textile industry in early June and there are signs of some betterment in prospects for workers in building trades. Commercial failures were more num erous in May in the Fifth district than in either April this year or May last year, and liabilities involved also ex ceeded those of the other two months. Sales of new pas senger automobiles declined further in May, and were 51.2 per cent lesisi than sales in May 1937, when the re cession was just beginning in certain lines. Building per mits issued in 31 Fifth district cities in May showed a de crease of 25 per cent under April figures and were nearly 35 per cent less than in May 1937. Contracts actually awarded last month for construction work in the district made a better comparison, declining only 11.7 per cent from the May 1937 awards. Coal production in May was in less amount than in either April 1938 or May 1937, and coal mined this calendar year was 32 per cent less than production in the first five months of last year. Se vere curtailment of operations in late April and May in the textile field reduced excess inventories at the mills and improved conditions sufficiently to allow resumption of operations on restricted schedules in June. Rayon yarn deliveries to fabricators were about the same in May as in April, and approximately equaled production. Rayon yarn prices were reduced late in May. Cotton prices de clined during the second half of May but turned upward in June and recovered part of the May decline. Cotton consumption in American mills in May wras 36 per cent less than consumption in' May last year, and exports of cotton last month were 40 per cent less than a year ago. Wheat and oats crops in the Fifth district are turning out somewhat better than last year, while prospects for fruit are fair in comparison with exceptionally large yields in 1937. It is too early in the season to comment on other crops. There follows a statistical summary of conditions de scribed above: % May 1938 Debits to individual accounts (24 cities .............................................. ... $1,076,528,000 No. of business failures, 5th dist... 55 Liabilities in failures, 5th dist......... ....$ 462,000 Sales, 57 department stores, 5th dist $ 9,395,769 Sales, 179 wholesale firms, 5th dist.. $ 10,823,000 Registrations, new passeger autos.. 12,591 Value bldg. permits (31 cities)............$ 6,630,214 Value of contracts awarded, 5th dist. $ 21,473,000 Cotton consumption, 5th dist. (bales) 202,647 Soft coal mined, U. S. (tons)......... 21,995,000 May 1937 $1,259,069,000 42 $ 310,000 $ 10,772,918 $ 12,765,000 25,795 $ 10,178,457 $ 24,330,000 309,778 30,077,000 Change — 14.5 +31.0 +49.0 — 12.8 — 15.2 — 51.2 —34.9 — 11.7 —34.6 — 26.9 MONTHLY REVIEW 2 BA N K IN G CONDITIONS R eserve B ank Statement : Discounts held by the Fed eral Reserve Bank of Richmond increased $117,000 be tween May 15 and June 15, 1938, but on the latter date were $76,000 less than on June 15, 1937. Industrial ad vances for working capital rose by $63,000 last month, but declined $502,000 during the past year. Holdings of Government securities on June 15, 1938, were the same as on May 15 this year, but rose $6,944,000 over hold ings on June 15 last year. Total earning assets of the Richmond bank were $179,000 higher on June 15 than a month earlier, and $6,355,000 higher than on June 15, 1937. Federal Reserve notes in actual circulation declined $1,725,000 between the middle of May and the middle of June, and dropped $3,041,000 during the past year. The decline last month was probably due to return of currency after the spring shopping season, but the decrease in cir culation in comparison with 1937 reflects a smaller need for money with which to carry on a lesser volume of trade and industry. Member bank reserve deposits rose by $5,727,000 between May 15 and June 15, and showed an increase of $3,782,000 since June 15, 1937. The sev eral changes previously mentioned in the bank's state ment, together with fluctuations in the balance to the credit of the Treasurer of the United States, caused a decline of $5,940,000 last month in the cash reserves of the Rich mond Reserve bank, but raised them $22,093,000 over ag gregate cash reserves on June 15, 1937. The ratios of cash reserves to note and deposit liabilities combined were within less than one point of each other on June 15 and May 15, 1938, and June 15, 1937. ITEMS Discounts held .............................................. Government securities ............................... Total earning assets ............................. Circulation of Fed. Res. notes .................. Members’ reserve deposits ....................... Cash reserves ................................................ Reserve ratio ............................. i.................. S ta te m e n t o f 41 000 June 15 1938 $ 627 23 1,540 139,979 142,169 188,523 220,312 331,802 70.72 omitted May 15 1938 $ 510 24 1,477 139,979 141,990 190,248 214,585 337,742 71.32 R e p o r tin g M e m b e r B a n k s : June 15 1937 $ 703 54 2,042 133,035 135,834 191,564 216,530 309,709 70.39 Loans and discounts at reporting member banks declined $4,525,000 between May 11 and June 15 this year, and drop ped $8,275,000 since June 16 last year. Investments in securities also declined, by $246,000 during the month and by $26,165,000 during the year. On the other hand, the 41 reporting banks increased reserve balances at the Reserve bank by $4,443,000 last month and $9,500,000 in the year. Cash in vaults decreased $1,812,000 between May 11 and June 15, and on the latter date was $54,000 less than on June 16, 1937. Deposits declined in the past month and year, in keeping with the drop in loans, ITEMS Loans & discounts .............. ..................... Investments in securities. .. ..................... Reserve bal. with Fed. Res. ..................... Cash in vaults .............. Demand deposits ................. ..................... Time deposits ....................... ..................... Money borrowed ......................................... 000 omitted June 15 May 11 1938 1938 $233,061 377,444 16,793 440,483 199,265 0 $237,586 377,690 137,571 18,605 444,409 198,355 23 June 16 1937 $241,336 403,609 132,514 16,847 466,501 199,288 0 but to a much greater degree during the year* Demand deposits decreased $3,926,000 between May 11 and June 15, 1938, and dropped $26,018,000 since mid-June last year. Time deposits on June 15 were slightly higher than on May 11, and remained practically unchanged in com parison with time deposits a year earlier. M u t u a l S a v i n g s B a n k D e p o s i t s : Deposits in 10 mu tual savings banks in Baltimore declined in May from the record figure of $219,926,013 on April 30, 1938, to $219,376,413 on May 31, but on the latter date were 1.4 per cent higher than deposits totaling $216,298,343 on May 31, 1937. Deposits in 7 of the 10 banks declined during the month of May. D e b i t s t o I n d i v i d u a l A c c o u n t s : Debits to individual, firm and corporation accounts in the banks in 24 Fifth district cities declined 6.1 per cent in May in comparison with debits in April, a seasonal decrease due chiefly to quarterly payments early in April. Reflecting a smaller volume of business activity this year, debits in May were 14.5 per cent less than those of May 1937, a slightly larger percentage decline than was shown for any earlier month this year in contrast with the corresponding month last year. Only four cities, Roanoke, Durham, Charleston, S . C., and Columbia, reported higher debits in May than in April 1938, and only Durham exceeded May 1937 figures. May 1938 CITIES Maryland Baltimore .......... Cumberland . . . . Hagerstown . . . . 000 omitted April May 1938 1937 % of Change Year Month $ 306,043 7,213 7,410 $ 337,582 7,249 8,165 $ 354,792 9,200 8,692 — 9.3 — .5 — 9.2 — 13.7 — 21.6 — 14.7 Dist. of Col. Washington . . . 232,636 253,283 265,533 - 8.2 -1 2 .4 Virginia Danville ............ Lynchburg ........ Newport News . Norfolk .............. Portsmouth . . . . Richmond .......... Roanoke ............ 6,318 12,850 7,784 41,473 3,775 128,301 25,245 7,000 13,496 7,886 45,774 4,047 133,041 23,297 8,712 15,616 9,430 49,293 4,139 144,669 33,107 West Virginia Charleston ........ Huntington . . . . 42,441 16,455 43,607 16,662 Wilmington . . . . Winston-Salem . 11,020 47,497 24,413 16,117 32,587 9,361 33,629 South Carolina Charleston ........ Columbia .......... Greenville ........ Spartanburg . . . District Totals 16,248 24,474 15,812 7,426 $1,076,528 North Carolina Asheville .......... Charlotte .......... Durham ............ Greensboro . . . . — — — — — — + 9.7 4.8 1.3 9.4 6.7 3.6 8.4 — 27.5 — 17.7 — 17.5 — 15.9 — 8.8 — 11.3 — 23.7 59,127 20,549 — 2.7 — 1.2 — 28.2 — 19.9 11,236 50,687 23,580 16,819 35,530 9,753 34,851 13,121 59,721 24,383 18,404 34,422 10,436 39,355 — 1.9 — 6.3 + 3.5 4.2 — 8.3 — 4.0 — 3.5 — 16.0 — 20.5 + .1 — 12.4 — 5.3 — 10.3 — 14.5 16,181 22,541 16,125 8,017 $1,146,409 18,755 27,297 20,633 9,683 $1,259,069 .4 8.6 1.9 — 7.4 — 6.1 — 13.4 — 10.3 — 23.4 — 23.3 — 14.5 + + B U S IN E S S CONDITIONS E m p lo y m e n t: Unofficial reports indicate that moderate improvement occurred in employment in the cotton textile industry in the Fifth Reserve district in early June, a num ber of mills resuming operations on part time after com plete shut-downs for brief periods. Otherwise little change occurred in the number of persons gainfully em ployed in the district during late May and early June. The following figures, compiled for the most part by the Bur eau of Labor Statistics from reports furnished by a large number of identical industries, show' the trends of em ployment and payrolls in the Fifth district geographical divisions from April to May 1938, the latest available figures: MONTHLY REVIEW Percentage change from April 1938 to May 1938 In number In amount on payroll of payroll — 1.8 — 1.1 — 1.2 + .3 — 2.4 — .7 — 1.8 + -6 — 4.7 — 4.1 — 11.6 — 7.4 STATES Maryland .............................................. . ............. Dist. of Columbia................................................ Virginia ................................................................ West Virginia ................... .................................. North Carolina .................................................... South Carolina .................................................... C o m m e r c ia l F a i l u r e s : Business failures in the Fifth district in May were more numerous than in either April of this year or May of last year, and liabilities involved in May failures were also larger than liabilities in either of the earlier months mentioned. The number of failures in May was 31 per cent larger than the number in May last year, and last month’s liabilities were 49 per cent larger than liabilities a year earlier. The United States showed an increase of 26 per cent in number of failures in the same period, while liabilities rose 74 per cent. The Fifth district, therefore, made a poorer comparison in number of failures in May 1938 and May 1937 than the United States as a whole, but made a better comparison in liabilities involved. Dun & Bradstreet insolvency fig ures are as follows: Number of failures District U. S. PERIODS May 1938 ............................. April 1938 ........................... May 1937 ............................. 5 months, 1938 ................... 5 months, 1937 ................... 55 39 42 248 236 1,053 1,116 834 5,648 3,972 Total Liabilities District U. S. $ 462,000 421,000 310,00*0 $2,916,000 1,942,000 $14,559,000 20,106,000 8,364,000 $78,626,000 46,624,000 3 reported $1,867,425 for May 1938 and $4,122,135 for May 1937. Washington permits reached the highest valuation in May this year with $1,867,425, Norfolk was second with $1,257,729, and Baltimore third with $1,073,668. Contracts actually awarded in the Fifth district in April and May are shown in the accompanying table by states, figures from F. W. Dodge Corporation reports being used: Construction Contracts Awarded STATES April 1938April 1937 % May 1938May 19*37 % Maryland ___ $ 6,550,000 $ 5,269,000 +24.3 $ 3,324,000 $ 5,448,000 — 39.0 D. of Col......... 1,799,000 4,855,000 — 62.9 4,611,000 5,564,000 — 17.1 Virginia ___ 5,593,000 10,276,000 — 45.6 3,801,000 4,356,000 — 12.7 West Va.......... 4,783,000 3,933,000 +21.6 2,320,000 2,139,000 + 8,5 No. Carolina 4,636,000 5,895,000 —21.4 5,231,000 3,669,000 +42.6 So. Carolina . 2,451,000 2,716,000 — 9.8___ 2,186,000 3,154,000 —30.7 District $25,812,000 $32,944,000 —21.7 $21,473,000 $24,330,000 — 11.7 Some large contracts let in the Fifth district during April and May were as follows: State Penitentiary, Roxbury, Md., $2,000,000; Apartment House Group, Baltimore, Md., $1,000,000; Apartment House, Richmond, Va., $830,000; Veteran’s Hospital, Roanoke, Va., $495,000; Warehouse, Washington, D. C., $1,000,000; College Fac ulty Building, Washington, D. C., $400,000; Ohio River Flood Control Project, Huntington, W. Va., $2,625,000; Highway Bridge, Morgan County, W. Va., $338,000; Hydro-electric Dam, Greenwood County, S. C., $617,000; Apartment House, Winston-Salem, N. C., $430,000; and Apartment House, Raleigh, N. C , $700,000. : Mining of bituminous coal declined further in May, and totaled only 21,995,000 net tons, in comparison with 22,380,000 tons dug in April this year and 30,077,000 tons in May 1937. Total production this calendar year to June 1 amounting to 129,413,000 tons is 32 per cent less than 191,141,000 tons mined in the first five months of 1937. Prior to June 1 1, shipments of coal through Hampton Roads ports totaled 7,525,471 tons, compared with 10,085,611 tons shipped to the same date in 1937. Reserve stocks of coal held by industrial con sumers decreased 4.3 per cent during April, but consump tion of coal in industry declined 10.4 per cent in compari son with March. In terms of current rates of consump tion, industrial stocks on May 1, 1938, were sufficient to last 42 days. C o a l P r o d u c tio n Sales of new passenger automobiles in the Fifth district declined some what more than seasonally in May in comparison with April sales, and were 51.2 per cent below sales in May 1937, the largest percentage decline in any month this year. Virginia sales in May 1938 made the best com parison with May 1937 sales, while South Carolina sales compared most unfavorably. Cumulative sales in the five elapsed months of 1938 were 47.4 per cent below sales in the first five months of 1937, Virginia with a decline of 41.1 per cent making the best record and West Virginia with a decline of 57.3 per cent the worst. The following figures, compiled by R . L. Polk & Co., of Detroit, show May and five-months’ registration figures for new cars in Fifth district sales: A u t o m o b ile N ew C ar R e g is tr a tio n s: Registration of New Passenger Cars STATES Maryland ........ Dist. of Col. Virginia .......... West Va............ No. Carolina .. , So. Carolina District . . . . May 1938 May 1937 % Change 2,532 1,735 3,004 1,479 2,650 1,191 12,591 5,179 3,179 5,459 3,981 5,301 2.696 25,795 — 51.1 — 45.4 — 45.0 — 62.8 — 50.0 — 55.8 — 51.2 5 Months 5 Months % 1938 1937 Change 11,246 7,656 13,615 6,675 12,383 6,067 57,642 20,809 13,415 23,101 15,634 23,993 12,578 109,530 — 46.0 — 42.9 — 41.1 — 57.3 — 48.4 — 51.8 — 47.4 C o n s t r u c t i o n : Building permits issued in 31 Fifth dis trict cities totaling $6,630,214 in May 1938 was 25 per cent below permits amounting to $8,861,313 issued in April this year, and 34.9 per cent below the May 1937 valuation of $10,178,457. Permits issued in 5 Maryland cities totaled $1,164,416 and $2,388,705 in May 1938 and 1937, respectively; 7 Virginia cities totaled $1,772,306 and $1,299,937 for the same periods; 4 West Virginia cities reported $475,908 and $422,074 ; 9 North Carolina cities showed $1,083,510 &nd $1,461,266; 5 South Carolina cities $266,649 and $484,340; and the District of Columbia C o t t o n T e x t i l e s : Operations in cotton textiles in May continued at the very low level reached in the latter half of April, but reports indicate some improvement in early June. A number of mills which closed temporarily in late April or May have recently reopened. Moderate re ductions in inventories occurred during May in the in dustry, and stocks of cotton goods in department and dry goods stores are lower than a year ago. Consumption of cotton by states in the Fifth district in May 1938, April 1938, May 1937, and in the first five months of this year and last is shown in the accompanying table: MONTHS No. Carolina So. Carolina Virginia District May 1938 ................................... April 1938 ................................. May 1937 ................................... 112,139 109,676 168,744 80,354 84,296 125,731 10,154 10,182 15,303 202,647 204,154 309,778 5 months, 1938 ......................... 5 months, 1937 ......................... 586,143 896,973 442,606 656,014 54,361 73,776 1,083,110 1,626,763 Spindle activity in April registered a marked decline from that of March, falling from an average of 245 hours per spindle in place to 198 hours. South Carolina declined 4 MONTHLY REVIEW from 302 hours in March to 244 hours in April, Virginia dropped from 280 hours to 206, and North Carolina from 247 hours to 203. Total spindle hours of operation in the United States declined from 6,485,416,000 hours in March to 5,265,957,000 hours in April, a decrease of 18.8 per cent. The Fifth district accounted for 52.3 per cent of total spindle hours of activity in April, the same figure as in March. R a y o n : The daily rate of domestic rayon yarn deliver ies by producers during May is measured by 444 on the Rayon Organon index, compared with 445 in April and 724 in May last year, these figures being based on daily deliveries in 1923-1925. Producers’ stocks of yarn at the end of May amounted to a 3.8 month’s supply, based on average monthly shipments over the previous 12 months. The Organon states that the decline in rayon shipments in May reflected a seasonal lull between the end of the spring season and preparation for fall activities. Adjust ments in rayon yarn prices were made in the latter part of May, quotations being marked down to levels which in some instances reached all time lows. The reductions were timed to take effect between seasons and when yarn stocks in the hands of converters are very low, thus mini mizing yarn inventory write-downs by fabricators. : Average prices for middling grade spot cotton declined during the second half of May, but rose in the first half of June, chiefly due to reports of unfavorable W/eather over most of the cotton belt since June 1. The average price on 10 Southern markets declined from 8.79 cents per pound on May 13 to 8.06 cents on June 3, but then rose to 8.16 cents on June 10 and further to 8.43 cents on June 17, the latest date for which official figures are available. Consumption of cotton in American mills in May was 36 per cent below May 1937 consumption, and exports declined 40 per cent in the 1938 month. C o tto n Cotton Consumed and On Hand (Bales) MayMay Aug. 1 to May 31 1937 This year Last Year Fifth district states: Cotton consumed .................. Cotton growing states: Cotton consumed ................. Cotton on hand May 31 in Consuming establishments Storage & compresses . . . . United States: Cotton consumed .................. Cotton on hand May 31 in Consuming establishments Storage & compresses . . . . Exports of cotton ..................... 202,647 309,778 1,083,110 1,626,763 355,895 558,769 4,128,553 5,572,905 1,316,307 9,973,762 1,473,891 3,478,517 425,684 669,665 4,863,843 6,686,547 1,585,551 10,058,430 193,002 1,814,701 3,583,781 323,736 5,226,831 5,086,093 T o b a c c o M a n u f a c t u r i n g : The Bureau of Internal Rev enue reports tobacco products manufactured in May 1938 and 1937 as follows : Smoking & Chewing Tobacco, Pounds Cigarettes, Number . Cigars, Num ber........ Snuff, Pounds .......... R e t a il T rade i n D Shoes (4) ......................... Drugs (14) ..................... Dry Goods (7) ................ Elec. Goods (27) . . . . . . . Groceries (45) ................. Hardware (23) .............. Indus. Supplies (11) . . . . Plumbing & Heating (19) Paper & Products ( 5) . . . Tobacco Products ( 8) . . . Miscellaneous (16) ........ All Firms (179).......... 24,639,079 13,069,936,403 430,628,149 2,917,691 + + — + 4.7 9.6 3.1 7.0 S tores: Net Sales Stocks Ratio May Jan. 1 to date May 31, 1938 collections comp, with comp, with to accounts same period May 31 Apr. 30 outstanding last year 1937 1938 May 1 + 2.4 + 2.5 — .1 30.4 — 4.9 — 5.8 — .8 30.8 — 3.9 — 5.5 — .1 26.9 — 9.4 — 2.8 — 1.1 27.0 — 4.0 — 4.4 — .4 28.5 — 14.1 — 8.1 — 10.6 — 4.4 12.8 W h o le s a le T rad e, 25,800,026 14,323,650,620 417,143,506 3,120,500 % Change + 1.0 — 7.9 — 27.5 — 14.5 — 18.4 — May 1938 epartm ent Net Sales May 1988 oomp. with May 1937 Richmond (3) — 5.5 Baltimore (8) — 14.5 Washington (6). — 10.5 Other Cities (13) — 17.1 District (30) . — 11.9 Same stores by States, with 27 stores added: Virginia (13) .. West Va. ( 10). . . No. Carolina (8) So. Carolina (11) District (57) . . May 1938 179 F ir m s : Net Sales May 1938 comp, with May May 1937 1938 — 7.8 — 30.0 — 6.7 — 7.3 — 25.0 — 8.1 — 26.9 + 5.2 — 10.6 + .4 — 25.2 — 4.4 — 29.5 + 4.1 — 10.2 + 10.9 — 10.2 — 1.5 — 1.9 + 1.3 — 10.1 — .1 — 15.2 — 3.1 Stocks May 31, 1968 May 31 1937 — 38.6 — 3.4 — 23.3 — 8.9 — 19.3 — 2.5 — 6.8 — 16.6 + ’ 7.0 — 1.8 — 13.3 Ratio May collections to accounts April 30 outstanding 1938 May 1 — 15.2 64.1 — 5.3 96.1 — 2.3 40.3 — 7.1 80.4 — 5.6 100.9 — 2.6 49.0 — .9 33.5 — 4.2 58.9 85.2 —’ 1.6 — .3 69.9 — 5.1 67.9 Note: Wholesale trade figures are included by arrangement with the Bureau of Foreign & Domestic Commerce. Only 129 of the 179 firms reported on receivables and collections, and only 104 on stocks. (Compiled June 21, 1938) MONTHLY REVIEW, June 30, 1938 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) In May and the first three weeks of June industrial activity showed little change from the April level. Wholesale commodity prices generally declined further, but in June wheat and cotton prices advanced and at the end of the period some other staple commodities showed increases. IN D U S T R IA L PRODUCTION PRODUCTION In May the Board’s seasonally adjusted index of industrial production was at 76 percent of the 1923-1925 average as compared with 77 in April and an average of 79 in the first quarter of the year. Steel ingot production, which in March and April had been at a rate of 33 percent of capacity, averaged about 31 percent in May, and automobile output also showed a decrease. Tex tile production increased in May. Activity at woolen mills rose sharply and there was some increase at cotton mills, while silk mills showed a decline. Changes in output in most other manufacturing industries were largely seasonal in character. Output of crude petroleum was curtailed sharply in May, and bituminous coal production declined somewhat, while anthracite production in creased considerably. Lake shipments of iron ore were in very small volume, reflecting both the low rate of activity in the iron and steel industry and the large supply of ore remaining from the previous season. In the first three weeks of June output of steel and petroleum increased somewhat, but the rate of activity in these industries remained below the aver age for May. Automobile production showed a further decline and continued below sales, so that stocks of new cars were further reduced. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a substantial increase in May, reflecting chiefly a marked rise in awards for publicly-financed projects. Contracts for residential build ing increased moderately and were in about the same amount as in May a year ago. Other privately-financed work remained in small volume. Index of physical volume of production, adjust ed for seasonal variation, 1923-1925 average=100. By months, January 1934 to May 1938. F R E IG H T -C A R LOADING S EMPLOYMENT Factory employment and payrolls continued to decline from the middle of April to the middle of May. There were further decreases in employment in the machinery, steel, and automobile industries and a sharp decrease in the number employed in the men’s clothing industry. In most other manufactured lines changes in employment were small in amount. The number employed at mines and on the railroads continued to decline. Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 average =100. By months, January 1934 to May 1938. W H O L E SA L E P R IC E S DISTRIBUTION Department store sales declined considerably in May and the Board’s sea sonally adjusted index was at 79 percent of the 1923-1925 average as compared with 83 in April. Sales at variety stores and by mail order houses also de creased from April to May. Reports for the first half of June indicate about the usual seasonal decline in department store sales. The volume of railroad freight traffic showed little change in May follow ing sharp declines in previous months. COMMODITY PRICES Prices of both agricultural and industrial commodities decreased in the latter part of May. In the first three weeks of June wheat and cotton prices advanced, while prices of industrial products generally continued to decline. BANK CREDIT Reserves of member banks continued to increase in May and June, largely as the result of Treasury disbursements from its deposits with the Reserve banks. Excess reserves increased chiefly at city banks, reflecting retirement of Treasury bills and further expansion of bankers’ balances. Demand deposits at reporting member banks in 101 leading cities increased further during the first half of June, and total loans and investments, which had declined in May, also increased, reflecting substantial purchases of United States Government obligations by New York City banks. MONEY RATES Yields on Treasury bonds declined further in the four weeks ending June 18, and those on Treasury notes reached new low levels. Rates on open-market commercial paper declined somewhat about the middle of June. Indexes compiled by the U. S. Bureau of Labor Statistics, 1926=rl00. By weeks, 1934 to week ending June 18, 1938. M E M B E R BAN K R E S E R V E S A N D R E L A T E D IT E M S BILLIONS OF DOLLARS BILLIONS OF DOLLARS GOLD S'r o c K / / V ------- -J- MONEY IN CIPICULATION 1 ____ _______ / " M ember a 4NK RESERVE BALUNCES t REASURY CASH | < -■ j •-RESERVE BAIMK------------------ --------------------- j---------------------: CREDIT . \ TREASURY DEPOSITS ! N ___ 1 1934 1935 1936 1937 1938 Wednesday figures, January 3, 1934, to June 15, 1938.
@FedFRASER