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MONTHLY REVIEW o f Financial and Business Conditions F ifth Federal Re s e r v e D is tr ic t Federal Reserve Bank, Richmond, Va. June 30, 1939 % April 1939 May 1939 $1,162,879,000 48 779,000 $ 9,989,266 $ 1,129,646 $ $ 11,463,000 19,822 $ 11,524,997 $ 31,619,000 292,286 9.40 4.50 25,900,000 41,500,000 17,880,000 Mav 1938 Change Mo. $1,076,528,000 + 1 58 — 13 756,000 + 48 $ 8,602,975 + 13 $ __ 933,400 $ $ 10,272,000 + 9 12,591 — 2 6,630,214 + 34 $ $ 21,152,000 — 25 202,647 + 13 8.06 + 7 4.25 16,200,000 + 12 67,800,000 — 4 21,321,000 + 66 Year Debits to individual accounts (24 cities).................... ....... Number of business failures 5th dist.................................... Liabilities in failures, 5th dist.......................... ................ Sales, 30 department stores, 5th dist..................... . Sales, 38 furniture stores, 5th dist............................... ........ Sales, 204 wholesale firms, 5th dist...................................... Registrations, new passenger autos, 5th dist............. ...... Value of building permits, 31 cities.................................... Value of contracts awarded, 5th dist.................................... Cotton consumption, 5th dist. (B ales)................................. Spot cotton price, c per lb., end of month......................... Print cloths, 3 8 ^ in., 64x60s, mid-June price..................... Rayon yarn shipments, U. S. (P ou nds)................. .. .......... Rayon yarn stocks, U. S. (P ou nds).................... .......... ....... Soft coal mined, U. S. (T o n s).............................. ................ $1,146,848,000 55 $ 525,000 $ 8,842,875 $ ........... $ 10,507,000 20,188 $ 8,579,777 $ 42,008,000 259,795 8.81 N E A R L Y all available measures o f trade and industry very active shipbuilding program, and finally, Govern ment payments to farmers under various crop control and soil conservation plans have greatly increased income in agricultural sections. In construction, P W A projects ac count for a large part o f the heavy work, while F H A insured loans appear to be encouraging a considerable volume o f residential building and, at the moment, slum clearance projects fostered by Governmental assistance are getting started or are being planned in a number o f Fifth district cities. Cotton textile mills continue opera tions at a considerably higher level than a year ago, and operatives have consequently experienced no diminution in their wages. Rayon mills shipped more yarn to domes tic consumers in May than in April, and 60 per cent more than in May last year, while surplus stocks o f yarn de clined further to a point 39 per cent below stocks held a year ago. The coal shutdown in April and the first half o f May hit one o f the district's leading industries a hard blow, but reserve stocks o f coal were materially reduced during the suspension and mines will be busier than the seasonal average until the depleted stocks are rebuilt. Agriculture is getting off to at least an average start for 1939. in the Fifth Federal Reserve district showed favor able trends from April to May, and also indicated sub stantial improvement over a year ago. Debits to individual accounts in 24 Fifth district cities in May were higher than in either April 1939 or May 1938, reflecting increases in business passing through banks. Retail trade in de partment and furniture stores advanced from April to May, and was materially above the level o f sales in May last year, and wholesale trade in many leading lines also was larger in May than in the preceding month this year or the corresponding month last year. Registrations of new automobiles sold in May declined probably less than seasonally from April registrations, and were far above those o f May last year, South Carolina leading the district with an increase of 99 per cent in May 1939 over May 1938. These evidences o f relatively large consumed pur chasing power are based partly on a large volume of construction work which has been under way in the dis trict all of this spring, partly on sustained activity in all branches o f the textile industry, and partly on steady employment in the tobacco manufacturing industry. In addition, the Hampton Roads section is beefiting from a 23,100,000 43,400,000 10,747,000 + — + + + + + + + + + + + — — 8 17 3 16 21 12 57 74 49 44 17 6 60 39 16 2 MONTHLY REVIEW R eserve Bank Statem ent: The a c c o m p a n y in g table s h o w s ch a n g e s in ce rta in im p o r ta n t ite m s o n th e sta te m e n t o f c o n d itio n o f th e F e d e r a l R e s e r v e B a n k o f R ic h m o n d d u r in g th e m o n th a n d th e y e a r e n d e d J u n e 1 5 , 1 9 3 9 . fig u r e s are n o t n e c e s s a r ily th e h ig h e s t or The lo w e s t w h ic h o c cu rre d d u r in g th e tw o p e r io d s , re fle c tin g co n d itio n s on th e re p o rt d ates o n ly . 000 omitted June 15 May 15 June 15 1939 1939 1938 $ 365 $ 277 $ 627 24 24 23 1,169 1,172 1,540 134,227_____ 134,227_____ 139,979 $135,785 $135,700 $142,168 193,540 194,239 188.523 249,513 246,064 220,312 380,127 374,682 33 L,802 74.39 74.27 70.72 ITEMS Discounts held ......................................... Open market paper ................................. Industrial advances ............................... Government securities ........................... Total earning assets ........................... Circulation of Fed. Res. notes ............ Members’ reserve deposits ................... Cash reserves .......................................... Reserve ratio ............................................ D e b it s t o I n d iv id u a l A c c o u n t s : D ebits t o in dividu al accoun ts in 24 F ift h d istrict cities, reflectin g tran saction s passing th rou g h the banks, rose 1 per cent in M a y o v e r A p r il o f this year, and e x ce e d e d M a y 1938 fig u re s b y 8 per cent. F o u rte e n o f the 24 cities sh ow ed h igh er figures in M a y 1939 than in A p r il 1939, and 21 sh ow ed high er figures than in M a y 1938. C olum bia, S. C., rep orted the largest in crease f o r both p eriod s, M a y 1939 figures b e in g 26 per cent la rger than th ose f o r A p r il 1939 and 29 per cent ab ove th ose f o r M a y 1938. Maryland Baltimore ........... Cumberland . . . . Hagerstown . . . . ite m s o n th e s ta te m e n ts o f 41 m e m b e r b a n k s in 1 2 F if t h d istrict citie s h a v e ta b le , t o s h o w b een co m b in e d th e c o m p o s ite in th e a c c o m p a n y in g of th e re p o r tin g c o n d itio n in stitu tio n s o n J u n e 14, 1 9 3 9 , in c o m p a r is o n 10, 15, 1938. 1 9 3 9 , and June D u r in g th e w ith p a st M ay m o n th d e m a n d d e p o sits ro se $ 9 ,0 0 0 ,0 0 0 , b u t th e re w a s a sm all se a so n a l d eclin e in tim e d e p o s its , d u e to v a c a tio n w ith d r a w a ls . ITEMS Loans & discounts................................... Investments in securities ..................... Reserve bal. with F. R. bank .............. Cash in vaults .......................................... Demand! deposits ..................................... Time deposits ........................................... Money borrowed ....................................... M u t u a l S a v in g s B a n k 000 omitted June 14 May 10 1939 1939 $240,659 $241,819 436,509 434,511 158,683 159,331 20,178 20,065 485,870 476,866 202,106 202,466 0 0 D e p o s it s : June 15 1938 $233,061 377,444 142,014 16,793 440,483 199,265 0 D e p o s it s in 1 0 m u % of Change Month Year $ 323,042 7,842 8,073 $ 318,990 7,883 8,324 $ 306,043 7,213 7,410 + 1 — 1 — 3 253,197 256,489 232,636 - 1 Dist. of ColWash ington S t a t e m e n t o f 4 1 R e p o r t i n g M e m b e r B a n k s : T h e c h ie f 000 omitted April May 1939 1938 May 1939 c it ie s Virginia Danville ............. 6,881 6,869 6,318 Lynchburg ......... 12,905 12,925 12,850 8,9R4 8,411 7,784 Newport News . Norfolk ............... 46,246 46,941 41,473 Portsmouth . . . . 4,437 4,336 3,775 Richmond ......... 133,875 132,807 128,301 Roanoke ............. 25,076 25,204 25,245 West Virginia Charleston ......... 42,273 41,855 42,441 Huntington . . . . 14,951 16,455 14,888 Parkersburg 9,739 North Carolina Asheville ............. 11,905 11,389 11,020 Charlotte ........... 58,051 55,815 47,497 Durham ............. 26,837 21,834 24,413 Greensboro ......... 18,769 17,729 16,117 Raleigh ............... 37,352 37,586 32,587 Wilmington 10,560 10,172 9,361 Winston-Salem . 36,234 36,630 33,629 South Carolina Charleston ......... 16,984 17,669 16,248 Columbia ........... 31,521 25,072 24,474 ......... Greenville 17,828 18,218 15,812 Spartanburg 9,066 8,812 7,426 District Totals . 1,162,879 $1,146,848 $1,076,528 Note: Parkersburg, W . Va., not included in Totals. + — + + — + 0 0 7 1 2 1 1 1 0 + 6 + 9 j_ <) + 9 + 9 0 + 15 + 12 + 18 + 4 — 1 - 0 9 + 5 + 1 + 23 + 6 — 1 + 4 — 1 -4- 8 + 22 + 10 + 16 + 15 + 13 + 8 — 4 + 26 — 2 + 3 + 1 + 5 + 29 + 13 + 22 + 8 tu a l s a v in g s b a n k s in B a lt im o r e d eclin ed f r o m th e re co rd fig u re o f $ 2 2 0 ,5 4 5 ,4 0 6 o n A p r i l 3 0 , 1 9 3 9 , t o $ 2 2 0 ,1 3 0 ,3 3 4 o n M a y 3 1 , b u t o n th e la tte r d a te w e r e h ig h e r th a n $ 2 1 9 ,3 7 6 ,4 1 3 o n M a y 3 1 , 1 9 3 9 . M u t u a l s a v in g s b a n k d ep o sits u s u a lly d eclin e in M a y , J u n e a n d J u ly o n a c c o u n t o f v a c a tio n sp e n d in g . E m ploym ent : T h e s e ttle m e n t o f th e d isp u te in b it u m i n o u s c o a l field s in M a y r e sto re d e m p lo y m e n t c o n d itio n s in th e F i f t h M arch . d is tr ic t to a p p r o x im a te ly th e sa m e le v e l as in S u c h c h a n g e s as h av e o c cu r re d sin ce th a t tim e w e r e u p w a r d , d u e to in cre a se d c o n s tr u c tio n w o r k . In d u s trial e m p lo y m e n t in th e d istrict h as n o t ch a n g e d m a te ria lly in th e p a s t tw o o r th re e m o n th s , e x c e p t d u r in g th e s ix w e e k s o f th e co al str ik e , bu t b u ild in g is m o r e a c tiv e th a n in a n y o t h e r s p r in g an d e a r ly su m m e r sin ce 1930 and b u ild in g tr a d e s m e n a r e , as a ru le , f u lly e m p lo y e d at lea st p a rt o f th e tim e . h ow ever, w ork ers an d has T h e r e is a su rp lu s o f c o m m o n la b o r, w ork not fig u r e s , c o m p ile d fo r clerical in cre a se d fo r th e and o th e r a p p re c ia b ly . m ost p art by w h ite -c o lla r The th e fo llo w in g B ureau of L a b o r S ta tis tic s , s h o w th e tr e n d s o f e m p lo y m e n t a n d p a y r o lls in th e F i f t h d istrict f r o m A p r i l to M a y : STATES Maryland ............................................................ Dist. of Columbia ............................................ Virginia .............................................................. West Virginia .................................................... North Carolina ................................................ South Carolina .................................................. Percentage change from Apri> 1939 to May 1939 In number In amount on payroll of payroll + 0.3 + 1.5 + 0.3 + 0.7 — 1.7 + 1-5 +28.2 + 4.7 — 2.2 — 2.6 — 2.3 + 0 .1 C o m m e r c i a l F a i l u r e s : Bankruptcy figures in the Fifth district in May were fewer in number but higher in lia bilities than in May 1938, reversing the trend shown in earlier months this year when failures were more numer ous but liabilities were lower than in corresponding months last year. The average amount o f liabilities per failure in the district was $10,000 in the first 5 months o f 1939, compared with nearly $15,000 per failure in the corre sponding period in 1938, a decrease o f 33 per cent this year. The United States shows the same general trend, but the average decline was only 20 per cent in the Nation. Bankruptcy figures as reported by Dun & Bradstreet are as follow s: PERIODS May 1939 ....................... April 1939 ..................... 5 Months, 1939 ............. 5 Months, 1938 ........... Number of Failures District U. S. 1,122 55 1,140 1,123 295 260 5,611 5,988 Total Liabilities District U. S. $ 779,000 $ 14,757,000 525,000 17.492.000 756,000 19.139.000 $2,951,000 3,894,000 $ 82,074,000 123,054,000 of N e w A u t o m o b il e s : Sales o f new passenger cars declined slightly in the Fifth district in May, but exceeded M ay 1938 sales by 57 per cent, and total sales this calendar year through May were 47 per cent larger than sales in the first 5 months o f 1938. South Carolina continues to lead the district in improvement with a total gain o f 76 per cent for the first 5 months o f this year over the corresponding period last year. The following registration figures for new cars were furnished by R. L. Polk & Co., o f Detroit: R e g is t r a t io n s 3 MONTHLY REVIEW Registration of New Passenger Cars STATES Dist. of Col. . . . Virginia ............ West Va............... No. Carolina . . . So. Carolina . . . District ......... May 1939 May 1938 3,959 2,567 4,457 2,167 4,302 2,370 19,822 2,532 1,735 3,004 1,479 2,650 1,191 12,591 % Change + + + + + + + 56 48 48 47 62 99 57 5 Months 5 Months 1939 1938 17,123 11,555 17,735 8,578 18,828 10,657 84,476 11,246 7,650 13,615 6,675 12,383 6,067 57,642 % Change + + + + + + + 52 51 30 29 52 76 47 : Building and engineering work in the Fifth Reserve district continues to run ahead of any other recent year and is contributing to the maintenance o f con sumer purchasing power. Permits issued in May in 31 cities totaled $11,524,997, an increase o f 74 per cent over $6,630,214 in May 1938, and total permits issued in the first 5 months of 1939 amounting to $49,493,066 exceeded valuation o f $34,367,546 in the first 5 months o f 1938 by 44 per cent. Washington led all cities in valuation o f per mits in May with $5,370,530, followed by Baltimore with $1,367,118, Columbia with $937,635, Durham with $526,705, and Winston-Salem with $487,350. Twenty-two o f the 31 cities reported higher figures for May 1939 than for May 1938. Contract awards in the Fifth district in May 1939 to taling $31,619,000 showed a decline from $42,008,000 awarded in April, but exceeded May 1938 contracts, amounting to $21,152,000, by 49 per cent. Total awards in the first 5 months of 1939 amounting to $157,239,000 were 50 per cent higher than awards in the same period last year, and in fact were higher than in the correspond ing period o f any other year since 1930. Figures collected by the F. W . Dodge Corporation by states for May 1939 and 1938 on construction contracts actually awarded are as follow s: C o n s t r u c t io n STATES May 1939 May 1938 % Change Maryland ........................................ $ 7,491,000 $ 3,324,000 +125 6,027,000 4,611,000 + 31 Dist. of Columbia ....................... Virginia .......................................... 5,824,000 3,801,000 + 53 West Virginia .............................. 3,276,000* 2,320,000* + 41 North C a r o lin a ........................................ 6,102,000 5,231,000 + 17 South Carolina ........................................... 3,339,000_______2,186,000_______ + 53 Fifth District ............................ $32,059,000* $21,473,000* + 49 * Includes some W . Va. contracts outside Fifth district. C o a l : Since the settlement o f the coal shutdown in midMay, weekly production o f bituminous coal has been higher than usual for this season of the year, due to the necessity for rebuilding reserves pulled down during the six weeks’ idleness. However, since the trouble was not settled until the middle of May, output for that month totaled only 17,880,000 net tons, against 21,321,000 tons mined in May 1938. Total production this calendar year of 133,357,000 tons exceeds 128,127,000 tons mined in the first 5 months of 1938. Shipments of coal through Hampton Roads ports this year to June 10 totaled 7,820,467 tons, compared with 7,525,471 tons shipped in the same period last year. The daily rate o f domestic mill ac tivity slackened somewhat during May but there were three more working days in that month than in April and therefore cotton consumption in the Fifth district rose by 12.5 per cent in the later month. There were some advances in cloth prices in May and in a few constructions mill margins widened slightly in spite o f higher cotton prices. In the last week in May and the first week in June sales o f unfinished cotton cloth exceeded mill output. C otton T e x t il e s : Print cloth sales were substantially larger than production and stocks were reduced. Sales o f finished goods also were reported active. However, around the middle o f June recessions occurred in sales o f unfinished cloth and yarn, although finished goods continued active and prices strengthened. Consumption o f cotton by states in the Fifth district in M ay 1939, April 1939, and May 1938, in bales, is shown below : MONTHS No. Carolina So. Carolina May 1939 ................................ 159,984 120,746 April 1939 .............................. 140,596 108,766 May 1938 ................................ 112,139 80,354 5 Months, 1939 ................... 5 Months, 1938 ................... 775,360 586,143 587,598 442,606 Virginia 11,556 10,433 10,154 District 292,286 259,795 202,647 58,264 54,361 1,421,222 1,083,110 R a y o n : Sh ipm ents o f ra y on yarn to d om estic con su m ers in M a y totaled 25,900,000 p ou n d s, an in crease o f 12 per cent o v e r the A p r il fig u r e o f 23,100,000 p ou n d s, and 60 per cent ab ov e the 16,200,000 p ou n d s sh pped in M a y 1938. Sh ipm ents e x ce e d e d p r o d u c tio n in M a y , an d in ven tories o f y a rn d eclin ed d u rin g the m on th fr o m 43,400,000 pou n d s to 41,500,000 p ou n d s. A t the end o f M a y last year r e serve stock s am ou n ted to 67,800,000 p ou n d s. A t m id M a y tw o m a n u fa ctu rers raised p rices o n certain fine yarns, and the trade ex p ects fu rth e r p rice changes on fine den ier yarns to b rin g th em in to line w ith th e h igh er costs o f m a k in g them in com p a ris o n w ith the co a rse r den iers. A n annual stu d y o f w o r ld ra y on p r o d u c tio n w a s in clu d ed in Rayon Organon f o r June. P r o d u c tio n o f yarn plu s staple fiber totaled 1,948,045,000 p ou n d s in 1938, an in crease o f 7 per cent o v e r 1937 p r o d u c tio n an d a n ew record . H o w e v e r , fo r the first tim e in 24 years p r o d u c tion o f ra y on filam ent y a rn declin ed fr o m 1937 to 1938, the n ew r e co rd bein g du e t o an in crease o f 55 per cent in p ro d u c tio n o f staple fiber. C ertain cou n tries, n otab ly th ose in clu ded in the “ n ation a listic” ca te g o ry , in ten sified th eir effo rts d u rin g 1938 to bu ild up staple fiber p r o d u c tio n to m ake u p f o r th e la ck o f adequ ate supplies o f co tto n and w o o l. S taple fib er m ade up ov e r 60 per cent o f all ra y on p ro d u ctio n in G erm a n y, Japan and Ita ly, bu t w as o n ly abou t 22 per cen t o f total p ro d u ctio n in G rea t B ritain , 15 per cent in F ra n ce, and 10 p er cent in the U n ite d States. C o t t o n : C h iefly due to a sca rcity o f c o tto n sp inn in g ou tside G ov ern m en t loa n stock s, sp ot tinu ed to ad va n ce fr o m 9.05 cents per p ou n d to 9.58 cents on Ju n e 9, but at o r near the Cotton Consumed and On Hand (Bales) May May 1939 1938 Fifth district States: Cotton consumed ..................... 292,286 202,647 Cotton growing states: Cotton consumed ..................... 516,324 356,688 Cotton on hand May 31 in Consuming establishments . . 976,918 1,315,401 Storage & compresses ........... 12,323,962 9,967,036 United States: Cotton consumed ..................... 605,353 426,149 Cotton on hand May 31 in Consuming establishments . . 1,175,290 1,581,433 Storage & compresses ........... 12,369,578 10,051,704 Exports of cotton ........................... 142,577 193,002 Spindles active, U. S..................... 21,975,222 21,341,846 suitable f o r co tto n c o n on M a y 12 latter p rice Aug. 1 to May 31 This Year Last Year 2,769,841 2,378,400 4,877,502 4,123,631 ........... ........... ........... ........... 5,755,393 4,856,482 ........... ........... 3,106,675 ------- ........... ........... 5,226,831 --------- fa rm ers w ith d rew som eth in g like 2 0 0 ,0 0 0 bales fr o m loan stock s and sold the co tto n on the m arket. T h is eased the dem an d to som e ex ten t and the average p rice f o r m id d lin g 4 MONTHLY REVIEW grade spot cotton on Southern markets declined to 9.47 cents on June 16. On June 17, 1938, the average price was 8.43 cents. N o official data are available on pros pects for the 1939 cotton crop, but unofficial reports indi cate that the crop has made about an average start on approximately the same acreage as in 1938. A ll forms o f tobacco manu facturing increased in May over April, and also exceeded May 1938 output, according to figures released by the Bureau o f Internal Revenue on June 22. Figures for May this year and last were as follow s: T obacco M a n u f a c t u r e r s : Smoking & Chewing Tobacco, Pounds ............. Cigarettes, Number ................. Cigars, Number ....................... Snuff, Pounds ............................ R e t a il T rade in May 1939 May 1938 26,973,918 15,445,195,753 470,579,558 3,525,026 25,800,026 14,423,650,620 417,137,506 3,120,500 D epartm ent Same stores by States, with 21^ stores added: Virginia (13) . . West Va. ( 10) . . No. Carolina (8) So. Carolina ( 12) + + + + + 12.9 15.1 18.8 11.6 16.1 + 14.4 + 1 5 .0 + 8.4 +12.2 + + + + + 1.3 1.1 5.0 3.7 3.0 + 5 + 7 + 13 + — — + — 3.2 4.0 1.6 5.7 1.1 3.6 2.8 3.7 1.4 2.2 Ratio May collections to accounts outstanding May 1 33.2 32.9 29.7 29.4 31.1 -8 + 5.1 + 10.5 N otes: In Maryland excessive rainfall in April, followed by the dryest May since 1911, damaged growing crops and made land preparation difficult. Corn planting was delayed to such an extent that the intended acreage may not be put in. Wheat prospects declined 3/2 bushel per acre during May but remained slightly above 10-year average. Oats, barley and hay, while in poorer condition than a year ago, are about up to the 1928-1937 June 1 average, and the peach crop is better than either last year or the 10-year average. Virginia crop pros pects declined rapidly during May as the dry, cool weather was unfavorable for most crops. Truck crops, especially early potatoes, green peas and snap beans, were seriously injured, and growth o f farm gardens, hay crops and pas tures were greatly retarded. On the other hand, weather conditions were favorable for small grains such as wheat, barley and rye. General rains on June 1 were very bene A g r ic u l t u r a l Maryland, 10 stores .......... Dist. of Colt, 7 stores Virginia, 10 stores ............ North Carolina, 3 stores , South Carolina, 7 stores , District, 38 stares* + + + + + + Individual Cities: Baltimore, 10 stores . .. Columbia, 3 stores ........ Richmond, 5 stores Washington, 7 stores ., + 17 + 3 + 8 + 21 17 21 15 28 54 21 + 0 + 6 + 6 + 16 + 18 + 5 0 9 — 1 + 6 + — * Includes 1 W . Va. Store. W holesale T rade, 204 F ir m s : + 13 + 1.8 + % Change in Sales, May and 5 Months 1939 Compared with Compared with May 1938 5 Months 1938 LINES + — — — — Sales: STATES % Change S to res: Net Sales Net Sales Stocks May 1939 Jan. 1 to date May 31, 1939 comp, with compared with compared with May same period May 31 Apr. 30 1938 last year 1938 1939 Richmond (3) . Baltimore (8) . Washington (6) Other Cities (13) District ( 30) . . R e t a il F u r n it u r e Auto Supplies ( 7 ) ........ Shoes (5) ..................... Drugs (11) ................... Dry Goods (9) ............... Electrical Goods ( 15) . . Groceries (70) Hardware (21) ........... Indus. Supplies (11) Plumbing & Heating (4) Paper & Products (7) Tobacco & Products ( 10) Miscellaneous (34) Average (204) ........... Net Sales May 1939 compared with April May 1938 1939 + 54 + 11 + 12 + 9 + 34 + 6 + 22 + 6 + 12 + 13 + 14 + 6 + 12 - 3 — 15 + 5 + 23 + 10 + + + + + + + 11 14 18 35 5 9 12 + 9 Stocks Ratio May May 31, 1939 collections compared with to accounts May 31 Apr. 30 outstanding 1938 19*39 May 1 0 + 24 + 3 — 20 — 4 + 5 _ 2 — + - 3 7 5 6 3 5 4 0 + - 1 3 3 4 - 2 —15 — 3 + 3 + 3 69 61 83 42 83 88 47 49 55 87 82 69 67 ficial and there has been great improvement in all crops since that date. Fruit prospects are not as good as had been expected earlier in the season, peaches being about 25 per cent below 10-year average and apples about 1 per cent below. W est Virginia suffered from lack o f rain in May but general rains since June 1 improved prospects. Wheat declined in May, but on June 1 the condition was a little better than average, but oats showed the second low est June 1 condition figure since 1924. Pastures are very poor, but prospects for apples are better than a year ago and about equal to the 10-year average. The Carolinas on the whole have better crop prospects than the states in the upper section o f the Fifth district, dry weather in May having done less damage. Grains and hay turned out better than in average years, and the crops hit hardest by unfavorable weather, such as fruits, are less important in the Carolinas than in some other Fifth district states. (Compiled June 21, 1939) MONTHLY REVIEW, June 30, 1939 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 average =1 0 0. By months, January 1934 to May 1939. FR EIG H T-C A R LOADINGS Ind'ex of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 average = 1 0 0. By months, January 1934 to May 1939. WHOLESALE PRICES Indexes compiled by the U. S. Bureau of Labor Statistics, 1926—100. By weeks, 1934 to June 17, 1939. MEMBER BANKS IN 101 LEADING C iTIES Wednesday figures for reporting member banks in 101 le a d in g cities, Sept. 5, 1934, to June 14, 1939. Commercial loans, which include indus trial and agricultural loans, represent prior to May 19, 1937, so-called “ Other loans” as then re ported. Industrial production, w hich had been reced in g on a seasonally adjusted basis during the first fo u r months o f this year, show ed little change in M ay and increased considerably in the first three w eeks o f June. The advance reflected prin cipally larger output o f steel and coal, w hich had previously shown con siderable declines. PR O D U C TIO N In M ay the B oard’ s seasonally adju sted index o f industrial p rodu ction was at 92 per cent o f the 1923-1925 average, the same as in A pril. V olu m e o f m a nu factu ring production declined som ew hat fu rth er, ow in g chiefly to red u c tions in output o f steel and autom obiles, but m ineral p rodu ction increased as m ost bitum inous coal m ines w ere reopened a fte r the m iddle o f the m onth. Steel in got production, w hich had been at an average rate o f 52 p er cent o f capacity in A pril, declined to 45 per cent in the third w eek o f M ay. A b o u t this tim e prices o f som e types o f steel w ere redu ced considerably and orders w ere placed in substantial volum e. Subsequently steel output increased and the curren t rate is about 55 per cent o f capacity, ap proxim ately the level m ain tained during the first quarter o f this year. In the autom obile industry output w as reduced by ab ou t on e-fifth at the begin ning o f M ay, and in the latter part o f the m onth there was fu rth er cur tailm ent partly as a result o f a strike at a b od y plant w hich led to the closin g o f m ost assem bly lines o f one m a jor producer. In the early part o f June the strike w as settled and b y the middle o f the m onth output had risen to a level higher than that prevailing during m ost o f M ay. L um ber p rodu ction increased fu rth er in M ay follow in g less than the usual seasonal rise during the first quar ter o f this year. O utput o f nondurable m anu factu res in the a ggregate w as at ab ou t the same rate in M ay as in A pril. A t w oolen m ills activity in creased sharply, f o l low ing a decline in A pril, and at cotton and ray on mills output w as m aintained. Mill consum ption o f raw silk showed a fu rth er sharp decline. A t m eat-packing establishm ents output increased m ore than seasonally, and as in M arch and A pril was considerably larger than a year ago, reflectin g a sharp increase in the num ber o f hogs slaughtered. F lou r produ ction continu ed in larger volum e than is usual at this season, w hile at sugar refineries there w as a decrease in output. M ineral production increased in M ay ow in g chiefly to the reop en in g o f m ost bitum inous coal mines. A n th racite produ ction , w hich had been in large volum e in A pril, declined in M ay, while ou tpu t o f crude petroleu m increased som ewhat further. V alue o f residential building contracts, w hich had shown a considerable decline in A pril, increased in M ay, a ccord in g to figures o f the F. W . D odge C orporation. Public residential awards w ere higher ow in g to a greater volum e o f U nited States H ousing A u th ority p r o je c ts ; private awards also increased bu t on a seasonally adjusted basis w ere below the high level reached in F ebru ary and M arch. Contracts f o r both pu blic and private n onresidential construction declined in M ay, follow in g increases in the precedin g tw o months. EM P L O Y M E N T F a ctory em ploym ent and pay rolls show ed little change fr o m the m iddle o f A pril to the middle o f M ay, accord in g to reports f o r a num ber o f States. D IS T R IB U T IO N D epartm ent store sales declined from A p ril to M ay, w hile sales at v ariety stores and by m ail order houses showed little change. In the first tw o w eeks o f June departm ent store sales increased. F reigh t-car loadings increased in the latter h a lf o f M ay, reflectin g chiefly expansion in coal shipments. In the first h alf o f June loadings o f coal increased fu rth er and shipments o f other classes o f freig h t also w ere in larger volum e. C O M M O D ITY PR IC E S Prices o f industrial materials, such as steel scrap, hides, w ool and print cloths, advanced som ewhat from the m iddle o f M ay to the third w eek o f June. W heat, silk, and coal prices declined early in June, fo llo w in g increases in M ay, and there w ere fu rther declines in prices o f livestock and meats. B A N K C R E D IT D uring the fou r w eeks ending June 14 total loans and investm ents at m em ber banks in 101 leading cities increased b y $270,000,000, follow in g a decline o f $200,000,000 in the p recedin g fo u r weeks. The m a jo r increase was in h old ings o f T reasury notes and bonds at N ew Y o rk City banks. Demand deposits increased sharply to new high levels both in N ew Y ork and in the leading cities outside N ew York. D uring the first three weeks o f June excess reserves o f m em ber banks showed little change fr o m the new high level o f $4,300,000,000 reached on M ay 24. Continued gold im ports largely w ent into earm arked gold and into balances held fo r fo re ig n accoun t at the F ederal Reserve banks. M ONEY RATES P rices o f United States G overnm ent securities, w hich had advanced sharply from A pril 11 to June 5, reaching a new high level, eased slightly during the n ext tw o weeks. The yield on the lon gest-term T reasury bond outstanding declined fro m 2.49 per cent on A pril 11 to 2.26 per cent on June 5 and in creased to 2.32 per cent on June 19. Other m on ey rates showed little change.
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