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MONTHLY

REVI EW

o f Financial and Business Conditions

F ifth
Federal

Reserve
...... * 4

D

istric t

Federal Reserve Bank, Richmond, Va.

Buy
W ar
B onds




June 30,1942

Buy
S a v in g s
St a m p s

INVEST FOR VICTORY NOW

2

MONTHLY REVIEW

The General Situation in the Fifth District
T

RA D E and industry in the Fifth Reserve district show
the disruptive effects of the war economy more
clearly month by month, and business firms are having to
adjust to an increasing number of rules and regulations
made by Government agencies in the interest of all-out
war work.

Industries such as shipyards, airplane plants, textile
mills, steel mills, coal mines, chemical and ammunition
plants, and railroads are working at capacity, and in many
instances 24 hours a day. People who have training
which fits them for work in any of the many industries
making war material are in great demand and are fully
employed. Another group of industries, of which to­
bacco manufacturing is the outstanding example, is not
producing war material but is turning out products which
the public want and have money to buy, and these indus­
tries are also working at or near capacity. This group
uses comparatively little critical material, and has found
substitutes for items it cannot obtain. A third group of
industries formerly used raw material which either cannot
now be obtained or can be obtained only in small quantities.
Such of these as could convert to war work have done so,
but others have already substantially reduced their output
and still others have ceased operations for the duration.
The full fashioned hosiery industry, for example, was

severely hit by silk restrictions, and is now faced with
further shortage of material as Government requirements
expand into the synthetic fiber field. A year ago syn­
thetic yarns and cloths made from them were expected to
be available largely as a substitute for civilian use of silk,
cotton and wool, but further experiments and improve­
ments in their manufacture have indicated greatly enlarged
use of these fibers for war purposes. Fortunately the
Fifth district has relatively few industries using critical
material that cannot change over to some type of war
work.
In spite of greatly increased taxes this year and efforts
being made to sell War Bonds and Stamps to the public,
consumers have plenty of money with which to buy com­
modities they want, and stores which have adequate stocks
are doing a very large volume of business. Many retail
outlets, however, either cannot secure merchandise or find
themselves so restricted by freezing orders, priority rules
and rationing regulations that they cannot distribute the
merchandise their customers would like to buy. Others
have had the volume of business reduced by stiffening of
credit terms under which commodities may be sold. Fur­
niture sales particularly are affected by retail credit re­
strictions, owing to the large proportion of business done
on a credit basis.

FINANCIAL AND BUSINESS CONDITIONS IN THE FIFTH FEDERAL RESERVE DISTRICT

% Change
Year
Month

May 1942

April 1942

May 1941

Debits to individual accounts (25 cities).................... ............
Sales, 78 department stores, 5th district...................... ............
Sales, 113 furniture stores, 5th district...................... ............
Sales, 205 wholesale firms, 5th district...................... .............

$2,038,925,000
$ 17,187,817
2,513,770
15,849,000

$1,979,732,000
$ 18,203,702
2,942,668
16,778,000

$1,717,276,000
$ 16,474,309
3,346,754
13,694,000

+ 3
— 6
— 15
— 6

+
+
—
+

Number of business failures, 5th district...................................
Liabilities in failures, 5th district............................. .............
Value of building permits, 29 cities............................. ..............
Value of contracts awarded, 5th district.................... ..............

35
485,000
5,476,957
68,914,000

19
113,000
11,037,893
90,984,000

37
281,000
14,579,982
100,005,000

+ 84
+329
— 50
— 24

— 5
+ 73
— 62
— 31

Cotton consumption, 5th district (Bales).................................
Cotton price, cents per lb. end of month.................................
Rayon yarn shipments, U* S- (Pounds)...................................
Rayon yarn stocks, U. S. (Pounds)............................ ............
Bituminous coal mined, U. S. (T on s).......................... ............

452,996
19.66
37,600,000
6,800,000
48,250,000

468,454

413,387
12.89
40,200,000
5,800,000
42,892,000

—
—

+
+
—
+
+




20.11
37,600,000
5,400,000
49,000,000

3

2
0

+ 26
— 2

19
4
25
16

io
53

6
17

12

MONTHLY REVIEW
BANKING STATISTICS
RESERVE BANK STATEMENT ITEMS
Fifth District
000 omitted
June 15
1942

ITEMS
Discounts held .....................................
Foreign loans on gold.........................
Industrial advances .........................
U. S. Securities owned.....................
Total earning assets.......................
Circulation of Fed. Res. notes........
Members’ reserve deposits...............
Cash reserves .....................................
Reserve ratio .....................................

May 15
1942

June 15
1941

$

$

$

50
22
619
153,114
153,805
501,602
483,992
876,016
85.12

108
0
852
121,486
122,446
309,206
394,524
678,548
84.04

0
0
654
148,687
149,341
473,124
456,017
843,530
84.87

SELECTED ITEMS— 41 REPORTING MEMBER BANKS
Fifth District
000 omitted
June 10
1942

ITEMS
Loans to business & agriculture. ..
All other loans ...................................
Investments in securities.................
Reserve bal. with F. R. B a n k .....
Demand deposits ...............................
Time deposits .....................................
Money borrowed .................................

May 13
1942

June 11
1941

$152,405
163,816
624,131
315,213
31,112
866,027
199,844
0

$161,726
170,723
599,469
293,866
31,564
836,264
200,615
0

$148,400
161,278
458,814
269,162
27,929
696,815
207,584
0

MUTUAL SAVINGS BANK DEPOSITS
9 Baltimore Banks
Total deposits

.................

May 31, 1942
$219,575,973

April 30, 1942
$219,666,308

May
1942

April
1942

Dist. of Col.
$ 422,584
$ 427,943
Washington
Maryland
566,739
593,473
Baltimore ............
9,755
9,604
Cumberland ........
8,853*
Frederick ...........
Hagerstown ........
14,651
15,148
North Carolina
17,576
18,362
Asheville ............
122,287
113,029
Charlotte ............
52,052
37,123
Durham ..............
23,969
24,796
Greensboro ..........
4,477*
Kinston ................
44,051
68*774
Raleigh ................
Wilmington..........
25,946
25,901
4,370*
Wilson .................
52,122(1)
*48,378
Winston-Salem . .
South Carolina
32,374
Charleston ..........
30,563
41,577
42,747
Columbia ............
33,059
33,876
Greenville ............
Spartanburg ........
18,213
16,919
Virginia
10,104*
Charlottesville . ..
10,313
Danville .............
11,472
Lynchburg ..........
17,706
18,919
Newport News ..
17,668(1)
15,368
109,497(1)
93,680
Norfolk ...............
Portsmouth ........
12,343(1)
10,262
232,704(1)
Richmond ............
215,367
Roanoke .............
34,496(1)
34,247
West Virginia
Bluefield .............
21,668*
Charleston ..........
65,080
*65*084
Clarksburg ..........
12,590*
Huntington ..........
23,059
*23,112
Parkersburg ........
12,370
12,319
District Totals .. .. $2,038,925
$1,979,732
♦Figures not included in District Total.

May
1941

COMMERCIAL FAILURES
PERIODS

%

of Change
Month Year

May
April
May

Number of Failures
District U. S.

Total Liabilities
District
U. S.

1942.....................
1942.....................
1941.....................

35
19
37

955
938
1,119

$ 485,000
113,000
281,000

5 Months, 1942.....................
5 Months, 1941.....................

161
206

4,819
5,732

1,491,000
2,381,000

$

9,839,000
9,282,000
10,065,000
50,679,000
62,707,000

Source: Dun & Bradstreet

$ 358,663

- 1

+ 18

493,412
9,352

+ 5
+ 2

+ 20
+ 4

EMPLOYMENT

*11*656

— *3

+ 33

16,774
96,343
33,975
27,309

- 4
+ 8
+ 40
— 3

+ 5
+ 27
+ 53
— 12

5*1*214
17,425

— 36
0

— 14
+ 49

There have been no changes of importance in the labor
situation in the Fifth district in the past month, except
that there has not been quite as much difficulty in obtain­
ing necessary farm labor as was feared earlier in the
season. In the cities a decided shortage in household
servants has developed, apparently partly due to the fact
that many cooks and maids whose husbands are now
working at good wages no longer find it necessary to sup­
plement the family income. There are people who have
been forced to seek new work because their former jobs
were abolished, such as employees in automobile sales
agencies, filling stations, establishments handling electric
refrigerators and similar items, and other businesses which
have experienced a drying up of the merchandise they sell.
These people, however, usually find other employment in
a short time. The following figures, compiled for the
most part by the Bureau of Labor Statistics, show the
trends of employment and pay rolls in the Fifth district
from April to May:

*4*7*254

+ *8

+ 10

30,494
42,753
28,629
16,859

+
—
—
+

6
3
2
8

+ 6
— 3
+ 15
+ 8

9,838
16,959
16,466
75,720
6,833
181,474
36,044

— 10
— 6
+ 15
+ 17
+ 20
+ 8
+ 1

+ 5
+ 4
+ 7
+ 45
+ 81
+ 28
— 4

*60,093

*0

+ *8

*19,732
12,605
$1,717,276

*0
0
+ 3

+ 17
— 2
+ 19

(1) Additional banks began reporting in May, 1942, and May figures are
not exactly comparable with figures for earlier months. The addi­
tional banks added $19,979,000 to the District Total, not quite 1%.

The accompanying table of debits in leading Fifth dis­
trict cities has been revised to give better coverage of the
Fifth district; six new cities are shown this month. In




addition, one or more banks that for various reasons have
not previously been included in debits figures have been
added to the reporting banks in six other cities. The new
cities are Frederick, Md., Kinston and Wilson, N. C.,
Charlottesville, Va,, and Bluefield and Clarksburg, W.
Va. Total debits in these six cities amounted to $62,063,000 in May 1942. Of the individual banks added in cities
previously on the debits list one was in Winston-Salem,
two were in Newport News, three in Norfolk, two in
Portsmouth, two in Richmond, and one in Roanoke; a
total of eleven banks with aggregate debits of $19,979,000
in May 1942. The addition of the eleven banks in these
six cities brings figures for all reporting centers up to 100
per cent coverage for all banks doing a commercial busi­
ness and maintaining open checking accounts. Items in­
cluded in debits are all checks drawn against deposit ac­
counts of individuals, firms and corporations; all pay­
ments from Trust funds; checks against accounts of
Federal, State, county and local governments; and with­
drawals from savings accounts including certificates of
deposit paid. Debits against deposit accounts of other
banks are not included, since they usually reflect transfers
of funds rather than actual business transactions.

May 31, 1941
$224,836,673

DEBITS TO INDIVIDUAL ACCOUNTS
Fifth District
000 omitted
CITIES

3

STATES
...................
Dist. of Columbia ......................... ...................
...................
...................
West Virginia ....................... ..
North Carolina ............................. ...................
...................
District Average ....................... ...................

Percentage change from
April 1942 to May 1942
In number
In amount
on payroll
of payroll
+ 2.1
+ 2.2
+ 0.6
+ 0.2
— 0.9
- 0 .8
+ 0 .4

— 0.1
+ 2.3
+ 6.8
+ 2.7
+ 2.9
+ 2.7
+ 2.4

MONTHLY REVIEW

4
AUTOMOBILE SALES

Stocks of new automobiles continue frozen, except
where prospective purchasers have priority ratings, but
no restrictions have as yet been placed on sales of used
cars. The tire shortage and gasoline rationing have dealt
a severe blow to the used car market, and used cars are
not selling nearly as well as was expected before the gaso­
line rationing program went into effect. Another obstacle
for the used car dealer is the disposal of cars, frequently
at a sacrifice, by young men inducted into the armed
forces. The automobile repair business has fallen off
more than was expected, owners of cars apparently being
reluctant to spend money on their cars until it is abso­
lutely necessary.
BITUMINOUS COAL PRODUCTION

Production of bituminous coal continued at high levels
in May, and output of 48,250,000 net tons exceeded May
1941 production of 42,892,000 tons by 12 per cent, al­
though May last year contained 1.1 more working days
and mines were trying to rebuild reserve stocks depleted
during the April strike. Total production of 237,424,000
tons in the United States in the first five months of 1942
exceeded production of 182,628,000 tons in the corre­
sponding period last year by 30 per cent, but output in
April 1941 was merely nominal. Distribution of coal in
recent weeks has been retarded to some extent by car
shortage, but more householders than usual have pur­
chased fuel supplies in advance of actual need. Increased
coal for heating will be required next winter because of
difficulty in obtaining fuel oil in Atlantic Coast states, and
when fall demands come the car shortage may be serious.
The danger of transportation difficulties in the fall and
winter is the basis of a drive retail coal dealers are mak­
ing to persuade consumers to stock their coal bins during
the summer.
SOFT COAL PRODUCTION IN TONS
REGIONS
West Virginia .....................
Virginia ...........'....................
Maryland ...............................
5th District .......................
United States ...................
% in District ..................

May 1942
13,838,000
1,850,000
186,000
15,874,000
48,250,000
33

Apr. 1942
13,761,000
1,750,000
183,000
15,694,000
49,000,000
32

May 1941
13,429,000
1,660,000
135,000
15,224,000
42,892,000
35

CONSTRUCTION WORK

Restrictions laid on private building by the Federal
Government in the interest of conservation of materials
for necessary war work reduced building permits issued
in Fifth district cities in May to the lowest point for any
month since January 1940. Permits issued last month
totaled only $5,476,957, in contrast with permits issued
in May 1941 totaling $14,579,982. In every month of
this calendar year permits issued totaled less than those
issued in corresponding months last year, and the total
of $39,962,857 for permits issued since January 1, 1942, is
34 per cent less than the total of $60,256,047 for permits
issued in the first five months of 1941. In permits issued
in May 1942, Baltimore led with a total of $2,603,868,
Washington was second with $1,485,880, Columbia was




third with $362,677, Richmond was fourth with $348,153,
and Norfolk was fifth with $238,385.
Contracts awarded for construction in the Fifth Re­
serve district in May 1942 totaled $68,914,000, compared
with $90,984,000 for awards in April this year and $100,005,000, in May last year. Contract award figures cover
all types of construction, and include rural as well as
urban projects. With priority regulations severely re­
stricting civilian construction, contract awards reflect very
largely the volume of public work for which provision is
made, and the recently adopted policy of the Federal
Government toward conversion of existing plant facilities
to war work instead of erecting new buildings naturally
holds contract award figures below the level which would
be reached if construction of additional plants had not
been substantially curtailed.
Figures by states for April 1942 contract awards, which
were not available when the May 31 Review went to
press, were reported by the F. W. Dodge Corporation as
follows:
CONSTRUCTION CONTRACTS AWARDED
STATES
Apr. 1942
Apr. 1941 % Change
Maryland .............................
$ 21,399,000
$ 10,391,000
+106
Dist. of Col...........................
26,957,000
3,895,000
+592
Virginia ...............................
32,606,000
14,598,000
+123
West Virginia .....................
2,759,000
3,394,000
— 19
North Carolina .................
4,125,000
9,125,000
— 55
South Carolina ................. ................3,138,000________ 6,695,000______ — 53
Fifth District ................
$ 90,984,000
$ 48,098,000
+ 89

COTTON TEXTILES

The cotton textile industry is so closely involved in the
war economy of the country that the civilian market has
become distinctly secondary in importance. Under Gov­
ernment orders, most mills which have machinery suitable
for heavy work have been changed over to production of
ducks, osnaburgs, sheetings, and other constructions
needed in large quantities by the Army or Navy, or for
important civilian uses such as bagging for agricultural
requirements. Mills are standardizing more and more,
and reducing types and patterns turned out. The amount
of cloth available for ordinary trade channels is relatively
small, but retailers anticipated their needs months ahead
and to date most merchants have sufficient textiles to
supply their customers. Price fluctuations have been
largely prevented in recent weeks by ceiling prices fixed
by Government regulation.
Cotton consumption figures by states in the Fifth dis­
trict for May 1942 and the first five months of this year
are compared in the accompanying table with correspond­
ing figures for 1941.
COTTON CONSUMPTION—FIFTH DISTRICT
In Bales
MONTHS
May
April
May
5 Months,
5 Months,
% Increase

No. Carolina So. Carolina Virginia District
241,904
188,998
22,094
452,996
1942.................
1942.................
252,790
193,005
22,659
468,454
1941................
223,743
169,452
20,192
413,387
1942.................
1,205,978
925,824
110,330 2,242,132
1941................
1,063,514
808,001
88,330 1,959,845
in i942........................ 13
15
25
14

RAYON

Shipments of rayon filament yarn to domestic con­
sumers in May totaled 37,600,000 pounds. Shipments in
the preceding month, April, were exactly the same, but

MONTHLY REVIEW

yarn delivered in May 1941 totaled 40,200,000 pounds.
Rayon Organon reports shipments in the first five months
of this year amounting to 192,400,000 pounds, an increase
of 6 per cent over 180,900,000 pounds shipped in the same
period last year. At the end of May producers held
6.800.000 pounds of filament yarn, compared with 5,800,000 pounds held a year ago.
Deliveries of rayon staple fiber during May totaled
12.600.000 pounds, compared with 13,000,000 pounds in
April and 11,500,000 pounds in May 1941. In the first
five months of 1942, 62,000,000 pounds of staple fiber
delivered to consumers showed an increase of 19 per cent
over 51,900,000 pounds delivered in the first five months
of 1941. Rayon staple fiber has increased in importance
in recent months, since it blends better than filament yarn
with wool and cotton.
On June 1, the War Production Board amended Wool
Conservation Order M-73. One amendment requires that
acetate rayon staple fiber be made available to manufac­
turers for blending with wool. Formerly only viscose
rayon staple fiber was set aside for such purposes. The
percentage of production to be allocated each month to
eligible wool consumers will be designated by the Director
of Industry Operations.
In the June issue, Rayon Organon presents an up-todate list of American rayon yarn manufacturers. The
list shows that the American rayon industry consists of
fifteen companies operating twenty-seven plants. Nine
of the twenty-seven plants are located in the Fifth Re­
serve District.
COTTON STATISTICS

Spot cotton prices on ten Southern markets declined
from an average of 20.28^ per pound, middling grade,
on May 8 to 18.62^ on June 12, but on June 19 the
average rose to 18.84^. The decline resulted chiefly from
favorable development of the 1942 cotton crop. On June
20, 1941, the average price on the ten Southern markets
was 14.09^. The Commodity Credit Corporation made
loans to farmers on 2,221,224 bales of the 1941 cotton
crop, but on June 13 only 1,027,481 bales were still held
under loan, the growers having repaid their loans on
1,193,743 bales. The cotton upon which loans have been
repaid was of course sold at the relatively attractive prices
offered in recent months.
COTTON CONSUMPTION AND ON HAND—BALES
May
1942

May
1941

Aug. 1 to May 31
This Year Last Year

Fifth district states:
Cotton consumed ...................
Cotton growing states:
Cotton consumed ................
Cotton on hand May 31 in
Consuming establishments . .
Storage & compresses..........

452,996

413,387

4,319,839

3,612,134

823,058

795,050

7,829,432

6,753,198

United States:
9,202,508

7,916,109

TOBACCO MANUFACTURING

Production of cigarettes in May 1942 was higher than
in either April 1942 or May 1941, but output of all other
tobacco products was less last month than in either of
the two earlier periods. Production figures released by
the Bureau of Internal Revenue are as follows:



May 1942

Apr. 1942

May 1941

21,956,402
18,455,318,320
457,767,155
3,224,368

Smoking & chewing
tobacco, pounds ..............
Cigarettes, number ................
Cigars, number .....................
Snuff, pounds .........................

23,790,440
17,379,870,280
503,536,469
4,034,899

25,621,949
17,858,111,310
475,067,340
3,609,796

RETAIL AND WHOLESALE TRADE
Department Store Trade
Percentage increase or decrease in sales, stocks,
outstanding orders and outstanding receivables in
May 1942 in comparison with May 1941:
Sales
Stocks
Orders
Receivables
Richmond (5) .................
+ 86
+ 2 ( + 16) + 42
+ 5
Baltimore (10) ..............
+ 3 ( + 24) + 69
+ 63
— 3
Washington (7) ..............
+ 55
+ 12 ( + 29) + 71
+ 7
Other Cities (12) ..........
• 0 (+ 20) + 40
+ 52
— 3
Fifth District (78)*........
+ 62
+ 4 ( + 23) + 63
+ 3
Same stores by states,
including stores reporting
sales only:
Maryland (13) ..............
Virginia (16) .................
West Virginia (15) ___
North Carolina (16) . . . .
South Carolina (11) ___

+ 3 ( + 25)
+ 2 ( + 19)
— 16 (+ 6)
— ( + 5)
12
+ 17 (+ 20)

♦Includes stores reporting sales only.
Note: Second figure in parentheses under Sales compares combined sales
in 5 months of 1942 with sales in the first 5 months of 1941.

RETAIL FURNITURE SALES

During the past three years we have carried a table in
the Review each month showing sales by approximately
40 retail furniture stores and furniture departments of
department stores. Realizing that the coverage of the
retail furniture business was not satisfactory, the field has
been canvassed in the Fifth Reserve district and the num­
ber of reporting firms greatly increased. This month we
include percentages compiled from sales reported by 113
stores.
For May, sales data only are included in the accom­
panying table, but we expect to include percentages on
outstanding receivables, collections, and inventories as
soon as tabulation of the data is completed.
Percentage Changes in May 1942 Sales
Compared with Compared with
May 1941
April 1942
— 21
— 17
— 10
+ 8
— 30
— 14
+ 6
0
— 30
— 5
— 50
— 6
-3 8
— 30
— 48
— 22
— 53
— 22
— 40
— 15
— 35
— 16
— 25
— 15

INDIVIDUAL CITIES
Baltimore, Md. (11)* .....................
Washington, D. C. (9)* .................
Richmond, Va. (11)* .....................
Norfolk, Va. (3)* .............................
Roanoke, Va. (3)* ...........................
Charleston, W. Va. (3)* ..................
Huntington, W. Va. (3)* ..............
Charlotte, N. C. (5)* .....................
Winston-Salem, N. C. (3)* ..........
Columbia, S. C. (4)* .....................
Other Cities (58)* ...........................
Fifth District (113)* ..................
Same Stores, Grouped
By States:
Maryland (11)* .................................
Dist. of Col. (9)* .............................
Virginia (37)* .................................
West Virginia (13)* .......................
North Carolina (23)* .....................
South Carolina (20)* .....................
Fifth District (113)* .................

— 21
+ 8
— 20
— 42
— 47
— 40
— 25

— 17
— 10
— 7
— 18
— 20
— 18
— 15

♦Number of reporting stores.

2,078,720 1,539,937
9,034,591 11,014,494

Cotton consumed .................
957,015
923,518
Cotton on hand May 31 in
Consuming establishments . . 2,589,456 1,931,565
Storage & compresses.......... 9,402,969 11,399,982
Spindles active ............................. 23,120,666 23,004,082

5

WHOLESALE TRADE, 205 FIRMS
Net Sales
Stocks
Ratio May
May 1942
May 31, 1942
collections
compared with
compared with
to accounts
May
LINES
Apr.
May 31 Apr. 30 outstanding
1941
1942
1941
1942
May 1
Auto supplies (7J ..........
— 8
— 8
0
+ 15
71
Shoes (4) ........................
-1 6
+ 55
+ 10
+ 17
62
Drugs & sundries (8)
+ 5
— 7
101
Dry goods (8) .................
+ 35
- 9
+ 55
'6
49
Electrical goods (14) ___
+ 80
— 6
54
— 8
+ 7
Groceries (63) ................
+ 10
- 6
— 4
105
+ 9
Hardware (16) ..............
+ 6
— 2
— 10
— 8
64
Industrial supplies (9)
+ 31
+ 12
0
— 5
86
Paper & products (11)
— 5
+ 30
74
+ 3
+ 4
+ 10
Tobacco & products (7)
+ 2
Miscellaneous (58) ........ _+ 4
— 12
+ ‘9
— *6
76
+ 16
District Average (205)
- 6
— 2
71
+ 15
Source: Department of Commerce

(Compiled June 20, 1942)

6

MONTHLY REVIEW

SUMMARY OF NATIONAL BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
IN D U S T R IA L

P R O D U C T IO N

Industrial activity continued to advance in May and the first half o f June.
Commodity prices showed little change after the middle o f May when the
general maximum price regulation went into effect. Retail trade declined
further in May but increased somewhat in the first half o f June.

PRODUCTION

Federal Reserve monthly index of physical vol­
ume of production, adjusted for seasonal varia­
tion, 1935-39 average — 100. Latest figures shown
are -for May 1942.
DEPARTM ENT

STO RE

SA LES

AND

STO CKS

an*

Federal Reserve monthly indexes of value of
sales and stocks, adjusted for seasonal variation,
1923-25 average = 100. Latest figures shown are
for May 1942.

Volume o f industrial production increased in May and the B oards season­
ally adjusted index advanced to 176 per cent o f the 1935-39 average, as com­
pared with 173 in April and 171 during the first quarter o f this year. Output
o f manufactured products continued to increase, reflecting chiefly further
growth in production o f war materials, while mineral production showed a
seasonal rise.
The largest increases in May, as in other recent months were in the
machinery and transportation equipment industries which are now making
products chiefly fo r military purposes. The amount o f copper smelted rose
sharply and output o f chemicals continued to advance. Activity in the auto­
mobile industry, which since January had been retarded during the conversion
o f plants fo r armament production, showed an increase in May.
Steel production was maintained at about 98 per cent o f capacity in May
and the first half o f June. Lumber production increased seasonally and activity
at furniture factories, which usually declines at this time o f year, was sustained
at a high rate. In industries manufacturing textiles and food products, output
continued large in May. Gasoline production declined further, however, re­
flecting the effects o f transportation difficulties. There was a further marked
decrease in paperboard production which, according to trade reports, reflected
a slackening in demand.
Coal production was sustained at a high rate in May and output o f crude
petroleum increased somewhat, follow ing considerable declines in March and
April. Copper production and iron ore shipments rose sharply to new record
levels.
Value o f construction contract awards increased sharply in May, follow ing
a decline in the previous month, and was close to the record high level reached
last August, according to figures o f the F. W. Dodge Corporation. Awards fo r
publicly financed work increased in May and, as in other recent months, consti­
tuted around three quarters o f the total. Awards fo r residential building con­
tinued to decline.

DISTRIBUTION
Retail trade declined further in May. Department store sales were about
7 per cent smaller than in April and sales by mail-order houses showed a similar
decrease. In the first half o f June department sales increased somewhat.
Carloadings o f revenue freight increased in May by about the usual seasonal
amount. There was a further substantial decline in the number o f cars loaded
with merchandise in less than carload lots, reflecting the effect o f Federal orders
raising the minimum weights fo r such loadings. Increases were reported in
shipments o f most other classes of freight, particularly coal, ore, and miscel­
laneous freight.

M E M B E R B A N K S IN 101 L EAD IN G C IT IE S

COMMODITY PRICES

Wednesday figures.
Commercial loans, which
include industrial and agricultural loans, repre­
sent prior to May 19, 1937 so-called “ Other loans”
as then reported. Latest figures shown are for
June 10, 1942.

Prices o f most commodities both at wholesale and retail showed little change
after the general maximum price regulation went into effect around the middle
o f May. Declines occurred in prices o f cotton and some other agricultural com­
modities, and prices o f some industrial commodities were reduced to conform
with the general order that prices should not exceed the highest levels reached
in March. Action was taken to exempt most military products from the general
regulation and to allow fo r special treatment o f women’s coats and dresses and a
few other nonmilitary items.

BANK CREDIT

M E M B E R B A N K R E S E R V E S A N D R E L A T E D IT E M S

During May and the first half o f June, the Federal Reserve Banks purchased
about 200 million dollars o f United States Government securities. Additions to
member banks’ reserves from this source, however, were offset by continued
withdrawals of currency by the public. Excess reserves fluctuated around 2,700
million dollars during the six-week period.
Reporting member bank holdings o f United States Government securities
increased by nearly a billion dollars during the period. Two-thirds o f the in­
crease came in the week ending May 20 with delivery of new Treasury 2 per
cent 1949-51 bonds, and the balance represented mainly increased bill holdings.
Loans declined somewhat in the period. Adjusted demand deposits continued
to increase, while United States Government deposits were reduced.

UNITED STATES GOVERNMENT SECURITY PRICES
Wednesday figures.
June 10, 1942.




Latest

figures

are

for

Prices o f taxable United States Government bonds, which declined by about
1/2 point at the time o f the early May financing, subsequently regained that loss
and during the first half of June remained steady.