View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

MO N T H L Y R E V I E W
of Financial and Business Conditions

F ifth

R eserve

Federal

D

Federal Reserve Bank of Richmond, Richmond 13, Va.

istrict

June 30, 1947

Business Conditions
H ERE was considerable irregularity in business
movements in the Fifth District during May, but
nothing bordering on a business recession was then
visible. The trade level in the District, as measured by
seasonally adjusted department store sales, in May exceed­
ed April by 1 per cent and was 9 per cent higher than the
trade level for the same month a year ago. Other types of
District stores, as reported to the Bureau of the Census,
are still showing substantially larger gains than depart­
ment stores. Exceptionally large increases are continuing
in the automotive trade and in building supplies. There
was variability in the movements between April and May
in the nine lines of wholesale trade. In the main, these
trades are holding at high levels.
The employment situation in the District has stabilized,
and few further expansions are in sight in the next sev­
eral months. In numerous places there have been mod­
erate slow-downs in industrial activity, and a few plants
have found it necessary to shut down temporarily. These
are, in the main, small concerns, and thus far few workers
have been adversely affected.
Despite the high building costs and early general reports
of reduced activity, building permits are showing a sur­
prising amount of strength. After adjustment for sea­
sonal variation, building permits in the Fifth District in
May were 8 per cent higher than in April and 22 per cent
higher than in May 1946.
Reports are current that some wholesalers and retailers
in the District are again purchasing supplies equivalent to
their high rates of sales. It will be recalled that stores
generally had adopted a policy in the spring of reducing
inventories by purchasing considerably less than was being
sold. These reduced purchases have had their effect on
manufacturers’ activities as is shown in various industries
of our District, notably cotton yarns, certain types of fur­
niture, some types of clothing, and certain finished cotton
goods. It is interesting to note that some stores have
resumed purchases equivalent to their rate of sales, and it
indicates a strengthening factor in manufacturing output
and employment. There are, no doubt, some stores which
had accumulated much larger inventories relative to their
sales and which are still purchasing smaller supplies than
they are selling. At the going level of sales, however, most

T




stores' inventory positions should be in alignment by the
beginning of fall. This would seem to indicate that many
of the adjustments that have been taking place in the past
two months in manufacturing activity will be essentially
completed by the end of summer.
One of the strong factors in the District’s business out­
look is the fact that the cotton textile industry reduced its
spindle activity simultaneously with a reduction in market
demand. In May the seasonally adjusted index of cotton
consumption in the Fifth District dropped 13 per cent
from the April level and was 6 per cent smaller than that
of May 1946. This means that the manufacturers have
been unwilling to produce for stock and that there will be
no supplies of goods overhanging the market.
The market demand for cotton goods is spotty. Some
constructions— notably print cloths— are in extraordinar­
ily strong demand, and prices are strengthening. Other
constructions are moving slowly, but even in these no
weakness in price has been evident.
It is becoming clear that there are not likely to be any
material price concessions made in cotton goods until the
price of raw cotton itself has dropped materially. It is
further clear that nothing lower than around 30-cent cot­
ton (92.5 per cent of parity) need be anticipated through
the calendar year 1948. Exports of cotton goods are con­
tinuing at the highest level on record and are a little more
than double the level of a year ago. The demand for cotton
goods required for inventory accumulation in the several
stages of fabrication and distribution apparently has been
eliminated, but the increased demand for exports has to a
large extent offset this loss. The best anticipation that
could be justified at this stage would be that cotton con­
sumption after the summer holidays will resume a level
about the same as in the early part of the year.
Cigarette output of the District dropped notably in May
from April on a seasonally adjusted basis, but the major
part of this is undoubtedly due to labor troubles. There
has been little indication thus far that there has been any
weakening in the demand for cigarettes.
Lumber, which in 1946 approximated its production
record of four decades ago, has become a drug on the
market in the early months of 1947, and production has
fallen sharply from the year-end, 1946, level. This does

MONTHLY REVIEW

2

not mean that lumber production will stay at these reduced
levels, but it is an indication that price and cost adjust­
ments must be made. The demand for lumber under those
conditions which would permit the full development of
housing facilities will be very much greater than current
production. Rough lumber prices have broken sharply,
but this is not true of finished lumber where facilities for
production are much more limited.
Speculative building of residences has fallen off notably
from what it was over the past several months, but here
and there an occasional development of considerable size
has gotten under way. The current level of building per­
mits in the District must be fairly heavily weighted with
commercial, industrial, and government projects. There
have been some notable reductions in residential building
costs in the form of increased labor efficiency, but these
costs are still high and it remains to be seen whether or
not new starts can be attained in volume under these costs.
The lifting of restrictions on the number of square feet
and the number of bathrooms has resulted in some activity
in custom built houses. It is believed that considerably
more of this type of housing will evolve.
Although the record is not available for bituminous coal
output for May, it is probable that a considerably higher
level of production was attained than in April when a
mourning holiday period was called. June production,
h o w e v e r , will again be adversely affected because it is re­

ported that a substantial proportion of the miners has quit
work in protest over the new labor bill. Such labor stop­
pages and holidays as have been occurring will have their
effects largely on the volume of coal exports if miners re­
turn on July 7. This is unfortunate at a time when the
nation's best efforts should be exerted to reactivate the
production of foreign nations.
The crop outlook in general in the Fifth District is in
satisfactory shape despite the late spring. Cotton acre­
age will be in the neighborhood of 15 per cent higher than
that of a year ago, but boll wT
eevil emergence has been
greater than normal, and this may in part offset a gain in
production that might be expected from a larger acreage.
Tobacco stands are spotty in many areas of the District.
At this stage it does not appear that the poundage of
tobacco will equal that of last year. However, climatic
conditions in the next thirty days could change this out­
look completely. Tobacco prices will be lower than they
were last year unless the crop is unusually short or some
arrangement is made to finance purchases normally made
by Great Britain. The price of cotton, on the other hand,
on the basis of the current outlook appears to hold a sub­
stantial measure of strength.
The spring pig crop was only a few per cent higher than
that of a year ago in the District as well as in the nation.
This does not offer much hope for much reduction in the
price of meat this year.

BUSINESS IN DEXES—FIFTH FEDERAL RESERVE DISTRICT
Average Daily 1935-39 = 100—Seasonally Adjusted
May
1947
.................

Apr.
1947

Mar.
1947

May
1946

290

258

270
132
296
198
254
159
299
302
235
132
239r

238

246

293
165r
272
144
246
152
307
300
238
134
279
153
239

250
77
437
174
255
148
279
233
199
127
228
150
287

296
244
154
90
266
126
341
191
109

308
268
167
69
278
114
317
200
121
147
129

345
260
163
65
277
114
271
164
108
126
145

277
266
155
42
240
96
188
134
114
161
85

Bituminous Coal Production*....................................
...................
Building Permits Issued............................................ ..................
Cigarette Production .................................................. ...................
Cotton Consumption .................................................... ..................
Department Store Stocks............................................ .................
Electric Power Production........................................
Employment— Mfg. Industries* ..............................
Furniture Sales— Retail ...................-........................ ...............
Gasoline Consumption ................................................
Life Insurance Sales.................................................... .................
Wholesale Trade:
Automotive Supplies** ..........................................
................
Dry Goods ............................................................... ..................
...................
Hardware .................................................................. ..................
Industrial Supplies** ...... -....................................... ...................
Paper and Its Products**........................................ .................
Tobacco and Its Products**.................................. ................
Lumber Production ....................................................
Wheat Flour Production............................................
*Not seasonally adjusted
**1938-41 = 100




263
213
207
139
303
292

% Change
May 1947 from
A pr. 47
May 46
+

16

— 11
+ 8
— 19
— 13
+
1
— 3

—
4—
—
+
+

40
22
19
6
9
25

+

8

4- 13

—

3

— 17

— 4
— 9
— 8
+ 30
— 4
-f 11
+ 8
— 4
— 10

4- 7
— 8
— 1
+114
+ 11
4- 31
+ 81
+ 43
— 4

+

7

MONTHLY REVIEW

3

The Banker Looks at the Soil
Most people, when out driving in their local community
on a Sunday afternoon, are impressed by the beauty of a
wr kept and well operated fertile farm. Fewer people
ell
are disturbed by the all too frequent evidences of poor soil
management and exploitative practices. If they notice it
at all, they are prone to dismiss it with the thought that it
is the other man’s land and not their own. They fail to
see that if John Jones, a farmer in their community,
abuses his soil, the adverse effects of it will be felt by him,
yes, but also to a greater or lesser degree by the entire
community. Self interest demands that a banker view
with alarm the exploitation and destruction of the soil and
fertility on the farms in his banking community, whether
the farmers are customers of his bank or not.
O f all the aspects of soil management, bankers are per­
haps most affected by the problem of soil erosion and the
problem of under-utilization of available land resources.
Although these are but two of the numerous aspects of
soil management, they are the two in which most bankers
hold the greatest vested interest in having the farmers in
their communities use their soil to the best advantage.
All agree that the soil of a farm is the underlying basis
for its present and future productivity. So far as the
individual farmer is concerned it is the economic base of
his farming operations. If he abuses his land through the
use of exploitative practices or sheer neglect, the wealth
producing capacity of the land— its productivity— will be
wasted away. In fact, the land itself may go.
The farmer who operates his farm at, say, 50 per
cent of its practical capacity does so at the loss of income
in much the same manner as a manufacturing concern that
willfully operates at only 50 per cent of the level at which
it could produce and sell its output at a satisfactory profit.
In fact, the situation in the case of the farm may be more
difficult to rationalize, in view of the family labor situa­
tion and the inability of most farmers to reduce their ex­
penses significantly as production declines.
Banks are intimately tied in with the economic life of
their community. If the economic development of their
community is one of growth, the bank itself has the maxi­
mum opportunity to grow and proper. If, on the other
hand, the wide scale dissipation of soil resources causes
the economic position of the community to deteriorate, it
is hard indeed, if not actually impossible, for the business
firms in towns that function primarily as service centers
for farming communities to grow and prosper. The same
naturally holds for the banks in such communities, since
the bank and the agriculture that makes up its farming
community are too closely interrelated for banks to grow
and prosper for any long period of time while farmers
are becoming more and more depressed as their soil re­
sources are dissipated.
STOPPING SOIL AND F E R T IL IT Y LOSSES
It has been estimated that before the war at least 3
billion tons of soil from the croplands and associated pas­
tures of the nation were lost each year through erosion.
These 3 billion tons contained an estimated 43 million tons
of phosphorus, potassium, and nitrogen, the principal in­
gredients of commercial fertilizer, and a like amount of
calcium and magnesium. The losses of nitrogen, phos­
phorus, and potassium were more than 60 times the



amount of these elements of plant food used in the entire
United States as commercial fertilizers in a typical pre­
war year. Unfortunately, the states of the Fifth Federal
Reserve District pay all too heavy a share of this na­
tional cost from their meager “ welfare fund” — the agri­
cultural land of their farms.
Importance of Sheet Erosion
Much of the soil that washes away is lost through
what is commonly known as sheet erosion— a slow insidi­
ous type of loss that occurs before our very eyes and yet
so often goes undetected. It eats away the top soil wher­
ever the combination of ground cover, slope ,and soil
characteristics are unable to slow up the run-off suffi­
ciently. Much of the top soil of the agricultural lands of
the District is already thinner than it was when first
cleared. In fact, on much of the land it is so thin, if it
exists at all, that production of annual crops has been dis­
continued and the land either lies idle or has returned to
timber. Sheet erosion however is an important problem
on much of the remaining agricultural land of the Dis­
trict, where it is carrying away what top soil remains
particle by particle, handful by handful, bushel by bushel,
and ton by ton.
The soil goes, and it takes away with it much of the
available plant nutrients. It also takes humus, or organic
matter, which is important in soils for many reasons. Or­
ganic matter is the storehouse for practically all of the
nitrogen in soils, and it also supplies a considerable part
of the other available plant foods. In fact, one-third to
one-half of the total phosphorus, much of the sulphur
and smaller amounts of calcium, potash, and other ele­
ments are held in the organic matter for use by plants.
The presence of organic matter in the soil helps keep the
soil in better physical condition, or tilth.
Because of its absorptive nature, organic matter has a
high water holding capacity and therefore will enable the
soil to hold more water and be less susceptible to drought.
Since most of the organic matter in the soil is contained in
the top few inches, or what is commonly called the plowlayer, it is evident that sheet erosion which digs away at
the top soil removes the most valuable portion of the soil
from the standpoint of its agricultural use.
Much of the cropland in the Fifth District lacks ade­
quate protection against erosion. Except for some of the
hay crops, the cropland of the District is plowed one or
more times each year and, particularly in the southern
part of the District, a large portion of the cropland is in
row crops. This type of cover affords the least protec­
tion of any against erosion. Since many of the soils on
which crops are widely grown are especially susceptible to
erosion by virtue of their slope and inherent properties,
the more successful soil managers have in many cases used
terraces, contour plowing, strip cropping, grassed water­
ways, appropriate rotations, and winter cover crops as
means of preventing soil and fertility losses.
It has not been so many years since it was a fairly com­
mon practice for farmers to burn their corn and cotton
stalks. By so doing they took all of their crops from
the soil and never gave as much in return. Although the
burning of stalks is less common today, there are still
many farmers who try to shortchange their land by sup­

4

MONTHLY REVIEW

plying the soil with too little organic matter. Erosion
coupled with the decline in organic matter and fertility
adversely affects crop yields. Many times the operators
attribute the drop in yields to too much or too little rain­
fall, or to any number of other things that merited little
or none of the responsibility for the lower yields. This
was done instead of placing the blame where the blame
belonged, namely, on their poor soil management prac­
tices.

a great deal of valuable research, and their findings can
be drawn upon by all. Present day agricultural imple­
ments also make the job much easier today than ever
before. In addition, large numbers of technically trained
men on the staffs of the Land Grant Colleges and the De­
partment of Agriculture are available to work with the
farmers on problems of soil management, to inventory
the conditions of their farms, and to prepare recom­
mended programs of action.
Erosion has made heavy inroads on much land where
crop yields have been quite well maintained or increased.
Lest the maintenance of yields lull people into thinking
that safe farming practices are being followed, it is well to
examine what really has happened. Actually, two oppos­
ing sets of forces are in operation. One set— the loss of
top soil, the declining level of organic matter, and, close­
ly related thereto, the drop in fertility— operate to reduce
crop yields. At the same time use of higher yielding
varieties; increased use of commercial fertilizers, sprays,
and fungicides; and better tillage practices tend to im­
prove crop yields. Another factor that has tended to im­
prove the average level of yields has been the retirement
from cultivation of large amounts of “ worn out” land.
The plea has been made in this article for stopping soil
and fertility losses. It was pointed out that it is generally
the productive capacity of the soil that gives a farm its
value. The land is a resource in which the owner-operator has much of his capital invested, and from the use of
which he expects to derive his income. Under such cir­
cumstances, the farmer can ill afford to abuse the land to
the point that current yields are reduced or that future
productive capacity is impaired.

Even in livestock areas where most of the land is in
grass the same type of deterioration of soil goes on. In
grass areas the comparable situation is for the farmer to
let the fertility of his pasture land drop to the point where
it is difficult to maintain a good soil cover. This lowers
the carrying capacity of the pasture, which is conducive
to overgrazing. Both tend to accelerate run-off, and
away goes the soil.
Land is sufficiently variable that what works best in
stopping erosion on one farm or in one field may be total­
ly inadequate on another farm or in another field on the
same farm. Very often also the practices have to be used
in some definite pattern. For example, terraces are an
important practice in stopping erosion on many farms.
However, use of terraces often calls for grassed run-off
areas. Other erosion control practices that are of im­
portance in parts of this District are strip cropping, con­
tour plowing, contour furrowing, reforestation, and add­
ing enough lime, phosphate, and new seed to grass lands
to support a sufficient growth of grass to hold the soil in
place. At the individual farm level, therefore, the need
is for farmers to recognize that soils are different and to
determine how each soil area on the farm should be han­
dled. Having done these two things, they should proceed
to institute the appropriate soil saving practices.

NEED FOR INCREASED YIELD S

Preventing Soil Losses Much Easier Today
Some farmers have always done a good job of manag­
ing their soil. A generation ago to do a successful job
required rare insight and ingenuity. Today the job-is
much easier. Research workers in the Land Grant Col­
leges and the Department of Agriculture have conducted



While farmers cannot afford to let the fertility of their
farms decline or their soil wash away, it is just as true
that they must do more than merely stop soil and fertility
losses. Many farmers are tolerating yields of only half
or less what they could achieve with better soil manage­
ment and farm management practices. Furthermore,
achieving this higher level of yields would be one of the
easiest ways for individual farmers to increase both their
gross and their net farm income.
Many of the farmers that could profit relatively most
from a fuller utilization of their land are on farm units
that are too small, considering their present mode of
operation. Such farmers have three alternative courses
of action aside from doing nothing. One approach is to
increase the number o f acres in the operating unit. An­
other approach is to find gainful employment off the farm
for the time that can be spared from farming operations.
Many, if not most, small farmers can do neither of these
things. As a practical matter, therefore, the only real
hope for the majority of small farmers of improving their
income is by increasing the economic size of their farming
operations within the boundaries of their present farm.
Higher rates of production is an important means of doing
this.1
Higher Yields— A Means of Increasing Income
Theoretically, farmers can go to such length to increase
yields that the rise in costs of so doing will exceed the
xH ereafter the term “ yield” w ill be used instead o f “ rate o f production.”
The term yield though m ore lim ited in m eaning has the m erit o f brevity.

MONTHLY REVIEW

benefits. As a practical matter, however, it is most un­
usual for farmers with exceptionally favorable yields to
find them associated with lower net incomes than would
have been receivevd had yields been lower. This is borne
out in numerous farm management studies, which quite
generally reveal a fairly close and direct relationship be­
tween yields and whatever measure of net income is used
in the study for analysis purposes.
Most farmers know how to improve the yields on their
farm, but most farmers do not know how to go about
building up yields to the maximum level justified by costs
and returns. To obtain assistance in determining what
direction to go, and how far to go, farmers have the opportuinty to confer with local extension service personnel,
local vocational agriculture teachers, the local personnel of
the soil conservation service, and other professional agri­
cultural workers of State and Federal agencies. These
people are in a position to give rather precise recommen­
dations based on a knowledge of research findings and
local conditions.
Lime and Phosphate Keys to Increased Yields of
Grasses
In the grass land sections of the District, the recom­
mendations for increasing rates of production center
mainly around the application of lime and phosphate. The
primary job is to increase grass production, especially the
species that are most nutritious. One of the steps in doing
this is to correct the soil reaction by the application of
lime. Another step is the application of phosphate. For
many permanent pastures these two practices are ade­
quate, but some will require reseeding and some also will
require application of potash and any other plant nutrients
of which there is a deficiency.
From this it is seen that the practices that will control
erosion in the grass land areas of the District are the same,
except possibly in degree, as those that will achieve full
production. In other words, it can be said with safety
that the farmer who handles his pasture and hay lands in
such a way as to get the highest yields has nothing to fear
from erosion, unless the land is so steep or otherwise so
unsuited for grass that it should be returned to timber.
Winter Cover Crops Build and Conserve Soil
Some farmers put winter cover crops on their cultivated
land. Such crops make a two- or three-fold contribution.
In the first place, they add organic matter to the soil and
increase its fertility; secondly, they provide resistance to
erosion; and in the third place, they often provide winter
grazing. Aside from the use of winter cover crops, how­
ever, direct efforts to increase the productive capacity of
cultivated land has but little to do with the control of
erosion. Only to the extent that the larger amount of
organic matter in a high producing soil can absorb more
moisure and thereby reduce run-off, can the higher pro­
ductive capacity of the soil be said to aid in the control
of erosion. On the other hand, the control of erosion on
cultivated land can be said to contribute to a higher level
of crop yields. The role of winter cover crops already
has been noted. Where the cover crops are legumes, the
effect on fertility is even more pronounced than where
they are grasses. Besides this, the control of erosion
whether by mechanical or other means, stops soil and fer­
tility losses. The arresting of such losses results in im­



5

proved crop yields even where there is no improvement in
cultural practices.
Regardless of the extent and direction of any causal
relationships between the elimination of soil and fertility
losses and the achievement of high yields, the fact remains
that both pay high returns to the enterprising farmer. In
view of the returns to be derived from good soil manage­
ment, it is depressing to realize what a large part of the
total job remains to be done. Fortunately, some progress
is being made. In recent years the rate of progress has
been more rapid than ever before. Passages in “ Chart­
ering A Route for Agriculture in West Virginia,” a bulle­
tin that was prepared by the Postwar Planning Commit­
tee of that state and published by the West Virginia Agri­
cultural Experiment Station, illustrate the need for great­
er accomplishments. In this report it is pointed out that
in 1944 West Virginia farmers used 1,600 tons of nitro­
gen, 17,000 tons of superphosphate, and 2,100 tons of pot­
ash for fertilizer purposes. Although this is a marked
increase over earlier years, the report stated that five times
as much of these fertilizer elements should be used anually by West Virginia farmers.
The report also states that 600,000 tons of liming mate­
rials were used in 1944, also a marked increase over ear­
lier years. However the report goes on to state that West
Virginia farms need an initial foundation application of
8 million tons of lime plus annual applications thereafter
of 600,000 tons per year. Although these two illustrations
are for West Virginia, conditions elsewhere in the District
are more or less similar. Progress is being made, but the
rate of progress needs to be greatly accelerated along all
fronts.
Tenancy has an important bearing on soil management
in large parts of the District, particularly the cash crop
areas. Traditional rental agreements in such areas are
built entirely around crop enterprises. On many tenant
operated farms soil conditions are such that a good soil
management plan would provide for the development of
improved permanent pasture and beef cattle or dairy en­
terprises. However, share rental arrangements involving
important livestock enterprises are at least unusual if not
actually non-existent in many communities. Thus, much
research and educational work needs to be done in the
development of equitable rental provisions for the shar­
ing of both expenses and receipts before this obstacle to
sound soil management is removed. Meanwhile, the most
rapid progress in achieving sound soil management pro­
grams will be on owner-operated farms.
TH E CONTRIBUTIONS OF GOOD SOIL
M ANAGEM ENT
By way of summary, let us appraise some of the con­
tributions that good soil management can make to the
economy of the various parts of the Fifth Federal Re­
serve District. First, let us look at w*hat it means to the
farmers themselves.
What It Means to Farmers
Good soil management affords the farmer an opportu­
nity to keep his investment in his land intact, in fact actu­
ally to increase it. It enables him to increase the eco­
nomic size of his farm without enlarging his acreage. It
means increasing his expenses, but, if operated efficiently,
income will rise more than expenses, except at the outset,
with the result that the net farm income will increase.

6

MONTHLY REVIEW

It is generally accepted that money invested in good seed,
fertilizers, and lime, up to the maximum levels of appli­
cation recommended by the respective Agricultural Ex­
periment Stations, gives about the highest rate of return
of any money invested in the farm business. In other
words, from the standpoint of the farmer’s own welfare,
there is every reason to commend to the farm operators
of the District that they as individuals institute good soil
management programs for their farms. This includes
among other things, the control of erosion and the achieve­
ment of high rates of production.

flected in a higher level of farm income.
It is fair, therefore, to conclude that a generally higher
level of soil management throughout a community aids a
bank both through its direct effect on the volume of loans
to, and deposit levels o f farmers, and through the indirect
effect on the mechandising and service trades in the com­
munity. Aiding in the development of such economic
strength in the entire community is one of the best ways
a bank in an agricultural community can insure itself of
a good chance to grow and prosper in the years to come.
How Bankers Can Assist Farmers

What It Means to Bankers
Now to shift and look at what good soil management
can mean to banking and to business generally. It has
been stated that farm expenses will rise if farmers achieve
the desirable level of good soil management about which
we have been talking. A part of this will reflect the ex­
penditures for larger amounts of lime and fertilizer, and
the development of appropriate mechanical erosion con­
trol devices such as terraces. Also, a part of the in­
creased expenditure will be a natural outgrowth of the
larger volume of business the farmers are doing. Ex­
cept at the outset, gross income will tend to rise more than
expenses with a consequent rise in net incomes. All in
all this means more total business in the trade territory.
Mention was just made o f the fact that, at first, ex­
penses rise faster than incomes. If a farmer is going to
improve his pasture or meadow it means a heavy applica­
tion of lime and phosphate and possibly potash and nitro­
gen. It also may mean reseeding. Terracing for the
small farmer with insufficient equipment means custom
work. All this costs money and the returns in the form
of greater production are not so large before the second
or third year. This lag in returns forces the farmer who
wants to improve his land to make a choice. He must
either go into debt to do the job, or improve a few acres
a year out of whatever margin of income can be spared
from other uses. The kind of credit that will enable the
farmer to make most rapid progress in improving his
land is the kind that will supply the funds when needed
and provide for repayment in the second or third year
after the soil treatments have had a chance to be re­




Now to consider what bankers can do to encourage
better soil management. One of the first things for a
banker to do is to develope the point of view that what­
ever helps each and every farmer in his banking commu­
nity to become a better farmer, and his farm a better farm,
contributes to the economic strength of his community. It
follows, then, that he is justified in concerning himself
with ways and means of helping the farmers to help them­
selves to become better farmers.
With some farmers it may involve no more than a few
words of appreciation and an expression of respect for
the way they are already going about becoming better
farmers. A sincere compliment from a highly respected
banker can mean a lot to a farmer. Other farmers may
respond to a suggestion that they talk over some of their
farming problems with their County Agent or other tech­
nically trained agricultural workers or a successful farmer
in their community. Other farmers will need credit on
appropriate terms.
Today especially when there are indications that AA A
benefit payments, that heretofore have been a stimulus to
improved soil management, may be substantially reduced,
there is an especially great need for bankers and other
business leaders to provide a high quality of constructive
leadership in helping farmers to realize that they simply
cannot afford to let the curtailment of Government pay­
ments induce them to abandon the improved practices they
have been following. Government payments or no Gov­
ernment payments, good soil management practices pay
good dividends and they should by all means be expanded
— not contracted.

7

MONTHLY REVIEW

Banking
Loans of the weekly reporting banks of the Fifth Fed­
eral Reserve District gave decided evidence in May and
early June of leveling off from the steady upward trend
of the past nine months. During the five-week period
ended June 18, total loans fell from their May 14 peak
of $495 million to $492 million. Totals on the four W ed­
nesdays between these two dates ranged from $490 mil­
lion to $492 million as compared with the range of $492
million to $494 million of the six weeks preceding May 14.
The occurrence of a similar leveling-off period in the same
months of last year leads, however, to the question as to
whether the decline is a temporary one to be followed
by a renewal of week-to-week gains or a stop or reversal
of the two-year growth of loans that has occurred.
During the five weeks, commercial, industrial, and agri­
cultural loans declined from $257 million to $251 million,
while real estate loans and “ other” loans continued their
upward movement, the former rising $2 million to $87
million and the latter increasing by $1 million to $110
million. Loans to brokers and dealers for purchasing and
carrying securities remained constant at $5 million and
loans to others for the same purpose declined from $38
million to $37 million. The chart below shows the changes
that have occurred during the past twelve months in the
major classes of loans outstanding.

LOANS OF WEEKLY REPORTING MEMBER BANKS

H O LD IN G S OF U N ITE D S T A TE S G O VE R N M EN T O B L IG A T IO N S
W E E K L Y R E P O R T IN G M EM B E R B A N K S
F ifth D istrict
(M illions o f dollars)
Date

Bills

C. o f I.

N otes

Bonds*

T otal

May 14
21
28

16
18
13

173
181
177

69
69
64

998
998
997

1,256
1,266
1,251

June

15
11
11

167
171
178

62
59
60

995
998
997

1,239
1,239
1,246

4
11

18

♦Includes obligations guaranteed by the United States.

Withdrawals of Treasury funds— concentrated princi­
pally in the first and third weeks of June— led to a small
decline in the reserve funds of Fifth District member
banks during the five-week period. Currency transac­
tions had little net effect upon reserves as gains were just
about offset by losses, and commercial and financial trans­
actions alternately withdrew and supplied funds, a sub­
stantial inward movement taking place in the first week
of June followed by a smaller yet considerable outflow in
the following week. Locally extended reserve bank credit
similarly fluctuated from week to week as the reserve po­
sition of member banks was reflected in Treasury bill
transactions and changes in the volume of borrowings at
the Federal Reserve Bank. A summary is presented in
the table below from which it may be seen that the gains
from commercial and financial transactions and the small
net increase in reserve bank credit were insufficient by $7
million to offset the losses from Treasury transactions and
the increased currency demand.
F A C TO R S A F F E C T IN G M E M B E R B A N K R E S E R V E S
F ifth D istrict
Change fo r 5 weeks
ended June 18, 1947
(M illions o f dollars)

Factors increasing ( + ) or
decreasing (— ) reserves:

Reserve bank credit extended locally
Comm ercial and financial transactions
Treasury transactions
Currency transactions
Other fa ctors
N et change in reserve balances

.+ 3
+38
.— 47
— 1
— *
— 7

♦Less than $500,000

1946

1947

In spite of a $1 million increase in portfolios of securi­
ties other than United States Government obligations,
total investments of weekly reporting member banks de­
clined $9 million to $1,366 million between May 14 and
June 18. As may be seen from the table following, there
were decreases in holdings of all types of Governments
other than certificates of indebtedness, which increased by
$5 million to $178 million.



May saw deposits of Fifth District member banks, as
measured by average daily deposits of the last half of the
month, remaining substantially at the level of the preced­
ing month, and since there was but a slight change in the
total deposits of member banks in the United States, the
proportion held by the Fifth District banks remain un­
changed. There was some redistribution among the states
of the District as Maryland, the District of Columbia, and
West Virginia increased fractionally while the remaining
three states lost similarly small amounts. The table below
gives the comparative holdings for April and May.

8

MONTHLY REVIEW
A V E R A G E D A IL Y T O T A L D E PO SITS* OF M EM B E R B A N K S
Last h a lf o f M ay

Last h a lf o f A p ril
$ thousands
977,429
M aryland
618,610
R eserve City Banksi
C ountry Banks
358,819
927,893
D istrict o f Columbia
907,252
Reserve City Banks
20,641
Country Banks
1,270,386
V irginia
i
290,642
Reserve City Banks
979,744
C ountry Banks
540,055
W est V irginia
814,832
N orth Carolina
Reserve City Bankss 369,517
445,315
Country Banks
416,491
South Carolina
4,947,088
F ifth D istrict
103,300
U. S. (M illions)

% o f U .S.

$ thousands
989,798
629,767
360,031
933,278
912,403
20,875
1,264,587
287,319
977,268
542,979
804,822
365,254
439,568
412,773
4,948,237
103,284

.95
.60
.35
.90
.88
.02
1.23
.28
.95
.52
.79
.36
.43
.40
4.79
100.0

% o f U.i
.96
.61
.35
.90
.88
.02
1.22
.28
.94
.53
.78
.35
.43
.40
4.79
100.0

♦Excluding interbank demand deposits.

ASSETS A N D L IA B IL IT IE S OF M EM BER B A N K S
F ifth Federal Reserve D istrict
M ay 28, 1947
Prelim inary
(M illions o f D ollars)
Chg. from
Reserve
A p r. 30, *47
A ll
city
Other
m ember
m ember m ember
all member
banks
banks
banks
banks
ITEM S

Assets
2,326
707
1,468
151
686
317
82

4,274
1,232
2,797
244
1,343
711
124

— 26
+ 12
— 39
+ 2
— 31
+ 4
+ 8

227
3

310
5

— 25
0

58
37
3,049

193
79
5,696

— 18

2,022
286
35
1,702
450
2,472
2
13
160

1,973
85
43
1,845
860
2,833
6
14
196

3,995
371
77
3,547
1,310
5,305
8
27
356

— 51
— 15
— 23
— 13
— 1
— 52
— 6

2,647

3,049

5,696

— 53

Loans and investments
1,948
525
a. Loans and discounts
1,329
b. U. S. G ov’ t obligations
93
c. Other securities
656
Reserves, cash, and bank balances
393
a. Reserves with F. R . bank
43
b. Cash in vault*
c. D<emand balances with banks
83
in U. S.
2
d. Other bank balances*
e. Cash items in process
135
o f collection
42
3. Other assets*
2,647
4. Total assets

+ 3
— 53

Liabilities and Capital
5.

6.
7.
8.
9.
10.
11.

Gross demand deposits
a. Deposits o f banks
b. W a r loan accounts
c. Other demand deposits
Tim e deposits
T O T A L DE PO SITS
B orrow ings from F. R. bank
Other liabilities*
T otal capital accounts*
Total liabilities and capital
accounts

+
+

3
2

♦Estimated
Details m ay not add to total due to rounding.

O W N ER SH IP OF D EM AN D DEPOSITS
Increases in the non-business demand deposits of banks
of the Fifth Federal Reserve District more than offset the
slight decline in business deposits to bring about an in­
crease in total demand deposits of individuals, partner­
ships and corporations o f $136 million in the seven-month
period from July 31, 1946 to February 26, 1947. The
gains were found principally in personal deposits and in
the deposits of non-profit associations which rose from
their July levels by $69 million and $67 million respec­
tively. Gains and losses among business concerns were
unevenly distributed, the largest losses being shown in
deposits of trade establishments, which fell by $36 million,
while the greatest gain wr shown by manufacturing and
as
mining concerns whose deposits increased by $13 million.



The table below presents the February pattern of owner­
ship, together with the changes in the dollar amounts of
each class from preceding survey dates.
CH AN GES IN O W N E R S H IP OF D EM AN D DE PO SITS OF IN D IV ID U A L S ,
P A R T N E R S H IP S A N D C O R P O R A T IO N S
F ifth Federal Reserve D istrict
(Estimates in m illions o f dollars)*
Dollar Increase
Am t. out­ Percent o f
standing
or Decrease from
Total
Type o f H older
J a n .1946
Feb. 26, ’ 47 Feb. 26, ’ 47 July 1946
T otal Business
N onfinancial busin ess:
M anu factu ring & M ining
P ublic utilities
Trade
Other nonfinancial
Financial busin ess:
Insurance companies
Other financial
Personal
Trust funds
N onprofit association
Foreign
T otal

2,223

50.7

— 13

+

90

1,916

43.7

— 15

+

53

581
231
853
251
307

13.3
5.3
19.4
5.7
7.0

+ 13
+
5
— 36
+
3
+
1

+ 53
+
3
— 35
+ 33
+ 38

83
224
1,805
85
271

1.9
5.1
41.2
1.9
6.2

+
7
—
6
+ 69
+ 17
+ 67

+
+
+
+
+
—

+ 136

+ 355

4,383

100.0

_

5

11
27
172
15
79
2

♦Owing to rounding, details m ay not add to totals.
Complete data on the seven preceding sem i-annual surveys o f deposits
ownership m ay be found in the M onthly R eview o f this Bank fo r June 30,
1946 and O ctober 31, 1946.

The $13 million increase from July 1946 shown by
deposits of manufacturing and mining concerns was just
proportional to the increase in the total of demand de­
posits of individuals, partnerships and corporations. Since
the institution of the surveys, however, a seasonal decline
of these deposits has been noted in the first-of-the-year
surveys of ownership. Thus the increase in the dollar
amount that occurred from July to February represented
a substantial gain in view of this seasonal factor. A p­
parently the reconversion drains upon the funds of these
concerns have been reversed and increased cash require­
ments brought about by increased current expenses arc
being reflected in larger bank balances.
Deposits of public utility, transportation and communi­
cations concerns reversed their previous declining trend
and increased sufficiently to maintain the relative position
reached in July 1946. Here again greater liquidity re­
quirements have been reflected in the increased deposits
carried by these firms. The large units commonly found
in these fields are as a rule quite careful to maintain their
funds at a level consistent with their requirements and
the level of deposits serves as an accurate measure of the
requirements of the concerns.
As might have been expected deposits of trade estab­
lishments showed some decline from their July level. The
first half of 1946 saw but little change as compared with
the almost steady growth that had occurred in the inter­
survey periods prior to that time. Indications then were
that forces were operating to reduce cash balances of these
firms even in the face of greater cost of goods sold and
other increased expense items. Balances had been accu­
mulated in many cases without regard to estimated re­
quirements for funds, and inventory requirements and in­
creases in credit sales have tended to reduce bank balances
of these establishments.
Other non-financial establishments decreased slightly in
relative importance although registering a small dollar
gain. This is a heterogeneous group which includes con­
struction contractors, amusement places, hotels, laundries,

MONTHLY REVIEW

garages, repair shops, and the business accounts of pro­
fessional people. There are obviously conflicting forces




9

at work to determine the total deposits carried by the
members of this group. For many members financial re­
quirements rose in varying degree during these months
as in the case of trade establishments. However, it is
probable that many establishments were carrying bank
balances prior to this time that were considerably in ex­
cess of their requirements and that increased requirements
were simply reflected in increased use of previously held
balances. In addition, the seven months between July
and February saw some slackening of demand for the
products of service establishments and it is possible that
this was reflected in reduced requirements for some mem­
bers of this group of deposit owners.
. The deposits of insurance companies increased substan­
tially on a relative basis while other financial business lost
in relative importance due to a decline in actual dollar
amount of balances.
Personal deposits continued the growth that has been
characteristic of the years covered by the surveys, increas­
ing by four per cent. As in former years the increase in
deposits held by farmers contributed to the gain in total
personal accounts; farmers’ accounts grew from $317
million to $362 million, a fourteen per cent gain in the
seven months covered. Personal accounts other than
farmers showed a gain o f two per cent during the same
period.
Trust funds of banks showed a twenty-six per cent
gain, rising to $85 million while the most spectacular gain
of the period was shown by the non-profit associations,
which grew by thirty-three per cent and increased in rela­
tive importance from 4.8 per cent of total demand de­
posits of individuals, partnerships, and corporations to
6.2 per cent.

10

MONTHLY REVIEW

D EBITS TO IN D IV ID U A L A CC O U N TS

FE D E R A L R E S E R V E B A N K OF RICHM O N D .

(000 om itted)

(A ll Figures in Thousands)
June 18
ITEM S
1947
Total Gold R eserves................................. $ 918,152
Other Reserves ............................. ............
12,656
Total Reserves ........................................
930,808
Bills Discounted ................................
9,128
Industrial Advances .......................
■
0
Gov. Securities, T ota l................................ 1,420,339
Bonds .........................................................
44,840
Notes .........................................................
22,766
Certificates ..............................................
376,164
Bills ...........................................................
976,559
Total Bills & Securities........................... 1,429,467
U ncollected Items ................................
275,868
15,731
Other Assets . .......... ...................................
Total Assets ........ ................................... 2,651,874
Fed. Res. Notes in C ir............................. $1,654,314
Deposits, Total ..........................................
729,247,
Members’ Reserves ...............................
711,959
U. S. Treas. Gen. A c c ...........................
517
Foreign .................................... ..................
14,725
Other Deposits ........ ............................ .
2,046
Def. A vailability Item s.............................
232,410
Other Liabilities ..................................
762
Capital A ccounts ............... . . . . . ..............
35,141
Total Liabilities .................................... 2,651,874

Chg. in A m t. from
6-12-46
5-14-47
+ 19,882
— 86,947
4,475
— 2,940 —
+ 15,407
— 89,887
9,037
— 7,491 —
28
0 —
+ 20,619 — 52,934
— 11,819
—
663
+ 1,116 — 86,932
— 18,756
+ 24 ,66 8
+ 64,573
— 4,502
— 61,999
+ 13 ,12 8
+ 100,299
+ 37 ,82 7
+
774 — 16,447
+ 37,260
— 38,158
■ 9,336
—
— 53,965
— 6,539
— 34,432
— 12,748
— - 246
+ 2 4 ,69 3
+
32
+
418
— 38,158

+
6,313
— 46,282
+ 6,292
40,070
8,708
3,796
+ 73,217

+
+
+

22

3,990
37,260

41 R EPO RTIN G M E M B E R B A N K S — 5th D ISTRIC T
(A ll Figures in Thousands)
June* 18Chg. in A m t. from
1947
5-14-47
6-12-46
— 3,471
+ 89,544
Total Loans ................................................ $ 492,270
Bus. & A g r i .............................................
250,875
— 6,348
+ 71,371
Real Estate L oa n s..................................
87,173
+ 1,936
+ 30,251
A ll Other L oa n s......................................
154,222
+
941
— 12,078
Total Security H o ld in gs........................... 1,336,736
— 8,715
— 380,194
U . S. Treasury Bills ..............................
11,147
— 4,849
— 19,584
U. S. Treasury Certificates .................
178,042
+ 4,958
— 223,488
U. S. Treasury N otes ..............................
60,032
— 9,296
— 117,684
U . S. Gov. Bonds ....................................
997,299
—
487
— 25,816
Other Bonds, Stocks & Sec...................
90,216
+
959
+
6,378
Cash Items in Process o f C ol.................
160,383
• 10,806
—
+ 19,123
Due from B an ks..........................................
130,935*
+ 6,134
— 13,569
Currency & C oin ........................................
41,577
+
764
+
1,837
Reserve with F. R. B an k .......................
333,211
— 8,744
— 15,852
Other Assets ................................
72,212
— 1,412
—
9,130
Total Assets ................................................ $2,567,324
— 26,250
— 308,241
T otal Demand D eposits..............................$1,913,419
Deposits o f Individuals ......................... 1,431,758
Deposits o f U. S. Gov.............................
16,191
Deposits o f State & Local Gov..........
111,821
317,347*
Deposits o f Banks ................. ................
Certified & Officers’ C hecks...............
36,302
Total Tim e D eposits..................................
399,176
Deposits o f Individuals.......................
382,446
Other Tim e D eposits..............................
16,730
Liabilities fo r B orrow ed M on ey.............
2,760
A ll Other L ia bilities.............................
99,608
Capital A ccoun ts ........................... ..
152,361
Total Liabilities ........................................$2,567,324

— 11,336
+ 33 ,91 8
— 35,610
+ 1,105
— 17,313
+ 6,564
—
255
—
257
+
2
— 7,750
— 8,045
+ 1,136
— 26,250

— 323,419
+ 10,962
— 299,895
+ 17,572
58,721
+ 6,663
+ 17,065
+ 16,105
+
960
+
•
—■ 8,240
—
3,690
+ 10,043
— 308,241

♦Net figures, reciprocal balances being eliminated. ,

DE PO SITS IN M U T U A L S A V IN G S B A N K S
8 Baltim ore Banks
Total Deposits

May 31, 1947
$385,215,236

...

A p r. 30, 1947
$386,575,159

May
1947.
District o f Columbia
W ashington ______
..'.$
Maryland
Baltim ore
. . . . . . . . . ...
Cum berland .................
F rederick .....................
H agerstown .................
N orth Carolina
Asheville ...........
Charlotte .................
Durham .............
Greensboro .................
Kinston .......................
R aleigh .........................
W ilm ington .................
W ilson .........................
W inston-Salem
.........
South Carolina
Charleston . . . . . . . . . .
Columbia .....................
Greenville ...................
S partanburg ...............
V irgina
Charlottesville .............
D anville . . . . . . . . . . . .
L ynchburg ___________
N ew port N ews ........
N orfolk .......................
Portsm outh .................
Richm ond ................... . . .
R oanoke .......................
W est Vinginia
Bluefield .......................
Charleston
.................
Clarksburg .................
H untington .............
P arkersburg ...............

% Chg.
from
M ay 1946

5 Mos.
1947

670,568

+

8

$ 3,171,472

874,462
20,640

+ 6
+ 16
+ 13
+ 19

% Chg.
from
5 Mos. '46

4.328,967
100,545
85,682
121,282

25,364

+
+
. ..... +
65,133
+
+
+
+
+
97,538
+

19,760
21,948
32,615
31,104
157,489
18,056
395,171

218,224
989,793
•
452,736
307,176
60,731
481,139
168,483
71,451
553,639

+ 3
+ 18
+ 28
+ 23

48j879
81,202
65,624
40,265

20
18
2
19
19
48
25
52
11

243,640
409,736
333,539
198,912

+

5

+ 8
+ 14
+ 22
+ 18
+
+
+
+
+
+
+
+
+

22
27
12
20
22
39
7
38
30

+ 1
+ 23
+ 29
+ 30

—
+
+
+
+
+
+
+

—
+
+
+
+
+
+
+

9
29
18
28
17
8
15
23

70
32
34
26
10

166,753
576,467
130,839
233,906
118,506

+
+
+
+
+

29
20
21
18
22

+ 13

District Totals ...............

101,319
128,761
165,836
143,052
767,613
90,481
1,959,592
357,720

+
+
+
+
+

125,404
27,444
48,313

9
14
15
50
21
9
13
23

$17,237,992

+ !4

COTTON CO N SU M PTIO N A N D ON H A N D — B A L E S
May
May
1947
1946
F ifth D istrict S tates:
Cotton consumed ...........
395,356
420,845
Cotton Grow ing S tates:
Cotton consumed ...............
728,180
763,321
Cotton on hand M ay 31 in
consum ing establishments 1,613,596 1,936,455
Storage & com presses. . 1,780,804 6,266,520
United States:
Cotton consumed ...............
827,234
871,470
Cotton on hand M ay 31 in
consum ing establishments 1,928,815 2,331,747
Storage & com presses. .
1,835,991 6,405,726
Spindles active, U. S.............. 21,624,002 21,351,204

A ug. 1 to May 31
1947
1946
4,155,195

3,707,363

7,566,609

6,736,242

8,629,564

7,641,287

COTTON CON SU M PT IO N — F IFTH D IST R IC T
(In Bales)
M ONTHS
N o. Carolina So. Carolina
M ay 1947
207,663
166,675
A p ril 1947 .
228,521
181,716
May 1946
229,620
168,318
5 Mos. 1947 , . , . . 1,128,611
880,364
5 Mos. 1946.. . . 1,057,277
792,054

V a.
18,467
19,819
18,829
95,894
85,210

Md.
2,551
3,363
4,078
16,045
16,821

D istrict
395.356
433,419
420,845
2,120,914
1,951,362

May 31, 1946
$364,434,391
PR ICE S OF U N F IN ISH E D COTTON T E X T IL E S
May 1947

CO M M ER C IA L F A IL U R E S
M ONTHS
May 1947. . . , .............
.
A p ril 1947. , , ..............
.
May 1 9 4 6 ... .
5 Mos., 1947 .............
5 Mos., 1946 .............

........

N um ber Failures
U. S,
D istrict
7
378
277
7
1
92
1,349
35
9
431

S ou rce: Dun & Bradstreet




Total Liabilities
District
u. S.
$17,326,000
$ 291,000
16,080,000
358,000
3,656,000
4,000
$76,826,000
$1,897,000
89,000
19,217,000

A verage, 17 constructions
..........
P rintcloths, average ( 6 ) . . . . ...........
Sheetings, average ( 3 ) ........... ...........
Tw ill (1) ....................................
Drills, average ( 4 ) ................... ...........
Sateen (1) .................................. ...........
Ducks, average (2) ............... ...........

83.50
104.71
76.79
64.76
97.61
62.54

A p ril 1947

May 1946

86.15
110.41
79.81
79.86
65.03
97.61
62.54

50.72
54.90
45.67
51.94
46.85
66.58
44.92

N ote: The above prices are those fo r the approxim ate quantities o f
cloth obtainable from a pound o f cotton with adjustments fo r
salable waste.

’

,

11

MONTHLY REVIEW

D E P A R T M E N T STORE T R A D E

B U ILD IN G PE R M IT FIG U R E S
M ay 1947
Maryland
B altimore
Cumberland
Frederick
H agerstown
Salisbury .

Total V aluation
M ay 1946

$ 2,661,595
83,475
27,750
382,950
84,313

V irgin ia
Danville .........................................................
Lynchburg .....................................................
N orfolk ...........................................................
Petersburg ....................................................
Portsm outh ...................................................
Richm ond .......................................................
R oanoke ................................... .......................
W est V irginia
Charleston .....................................................
C larksburg ................................................ ..
H untington .....................................................
North Carolina
Asheville .........................................................
Charlotte .........................................................
Durham ...........................................................
Greensboro .....................................................
H igh Point .....................................................
Raleigh ...........................................................
Rocky M o u n t ..................................................
Salisbury .........................................................
W inston-Salem ..............................................
South Carolina
Charleston .....................................................
Columbia .........................................................
Greenville .......................................................
Spartanburg ..................................................
Dist. o f Columbia
W ashington ..................................................
District Totals . ....................................
5 Months .....................................................

$ 4,599,745
41,510
76,950
104,550
724

584,250
424,498
1,699,980
114,100
107,200
1,547,201
264,821

72,494
261,360
266,985
47,450
69,484
887,370
261,733

349,348
47,200
443,813

161,071
80,828
234,610

324,879
750,200
739,558
260,775
360,974
438,900
356,600
148,370
431,887

113,466
1,217,950
229,300
218,308
94,412
204,940
65,700
76,610
204,602

288,318
506,121
114,950
102,057

STATES
M aryland ...................
Dist. o f C olu m bia. .
V irgin ia .....................
W est V irgin ia .........
N o. Carolina ...........
So. Carolina .............
F ifth D i s t r i c t -----

Percentage
+ 17
Percentage
+ 15
P ercentage
+ 34
P ercentage
— 68
P ercentage
+ 59
Percentage
41
P ercentage
24

109,646
147,222
128,875
108,650

3,599,383
$17,245,466
$76,840,669

4,009,699
$14,096,244
$80,833,552

CON STRU CTIO N CON TRA C TS A W A R D E D
% Chg.
from
A p r. 1946
— 41
+ 70
+ 57
— 38
— 28
— 48
— 19

A pril
1947
$18,410,000
. . 8,643,000
. . 23,454,000
, , 9,768,000
. . 18,352,000
. . 6,750,000
. .$85,377,000

Richm ond

4 Mos.
1947
$ 77,946,000
28,042,000
73,872,000
24,896,000
49,852,000
19,272,000
$273,880,000

% Chg.
from
4 Mos. ’ 46
— 6
+ 46
+ 35
— 20
— 17
— 47
— 4

Baltim ore

W ashington

Other Cities

D istrict

chg. in M ay 1947 sales, com pared with sales in M ay 1946:
+12
+ 8
+10
+12
chg. in 5 m onths’ sales 1947, com pared with 5 m onths in *46:
+ 6
+ 3
+ 6
+ 7
chg. in stocks on M ay 31, 1947, com pared with M ay 31, ’ 46:
+13
+23
+35
+22
chg. in outstanding orders May 31, ’ 47 from M ay 31, *46:
— 66
— 65
— 61
— 66
chg. in receivables M ay 31, *47 from those on M ay 31, ’ 46:
+29
+33
+33
+36
o f current receivables as o f M ay 1, 1947 collected in M a y :
53
49
53
49
o f instalm ent receivables as o f M ay 1, ’ 47 collected in M a y:
30
25
32
27

M aryland D ist.of Col. V irgin ia W . V irginia N o. Carolina So. Carolina
Percentage chg. in May 1947 sales fro m M ay 1946 sales, by sta tes:
+ 12
+ 8
+15
+19
+14
+13
Percentage chg. in 5 m onths’ sales 1947 from 5 m onths’ 1946 sales:

+

6

+ 3

+

+12

8

+

+11

5

W H O L E S A L E T R A D E , 189 FIRM S

LIN ES

N et Sales
M ay 1947
com pared with
May
A pr.
1946
1947

Stock
May 31, 1947
com pared with
M ay 31 A p r. 30
1946
1947

A uto Supplies ( 8 ) * ...........
Drugs & sundries (1 1)*
Dry goods ( 6 ) * .................
E lectrical goods ( 5 ) * . . .
Groceries (7 0)* ...............
H ardware (1 1)* .............
Industrial supplies ( 4 ) * . .
P aper & products ( 3 ) * . .
T obacco & products (9 )*
Miscellaneous (6 2)* . . . .
D istrict A vg. (1 8 9 )* ..

+ 52
+
3
+
5
+132
+ 13
+ 43
+ 75
+ 51
—
3
+ 14
+ 19

+ 67
+ 11
+ 83
+ 125
+ 35
+ 77
+ 92

—
—
—
+
—
+
+
—
—
—

15
10
5
21
2
7
10
1
5
4

+ 17
+ 64
+ 41

— 2

R atio May
collections
to a cc’ts
outstand’ g
M ay 1

3
2
7
6
6
5
17

134
135
71
119
155
96
111

— 5
— 4

173
88
108

+
—
+
—
—
+
+

+

1

S ou rce: Departm ent o f Com m erce
♦Number o f reporting firms.

S ou rce: F. W . Dodge Corp.

RE-TAIL F U R N IT U R E S A L E S

RAYON YAR N DATA
May 1947

A p ril 1947

May 1946

Rayon \ arn Shipments, Lbs..........
Staple Fiber Shipments, Lbs........

60,400,000
17,900,000

60,000,000
18,600,000

56.900.000
15.900.000

R ayon Y arn Stocks, Lbs...................
Staple Fiber Stocks, Lbs....... ...........

8,400,000
3,800,000

7,700,000
2,900,000

2.100.000

ST ATE S
M aryland (5 )* .......................
D istrict o f Columbia (6 )*
V irgin ia (1 9)* .........................
W est V irgin ia ( 7 ) * ...................
N orth Carolina (1 6 ) * .............
South Carolina ( 1 0 ) * ...............
F ifth D istrict ( 6 3 ) * .............

% Chg.
from
5 Mos. ’ 46

IN D IV ID U A L CITIE S
Baltim ore, Md., ( 5 ) * ...............
W ashington, D. C., (6 )*
Lynchburg, V a., ( 3 ) * ...............
Richm ond, Va., ( 6 ) * ...............
Charleston, W . V a., (3 )*
Charlotte, N. C., ( 4 ) * ...........
Columbia, S. C., ( 3 ) * ...............

8.700.000

S ou rce: R ayon O rganon

TOBACCO M A N U F A C T U R IN G
M ay
Sm oking & C hew ing tobacco
(Thousands o f l b s .) ...........
12,633
Cigarettes (thousands) . . . . 25,067,746
Cigars (thousands) .............
473,968
Snuff (thousands o f l b s .) . .
3,478




% Chg.
from
5 Mos.
1947
M ay 19461947
—
—
—
+

30
16
5
8

75,713
133,685,645
2,273,329
16,370

—7
+2
—5
—4

♦Number o f reporting stores.

Percentage Chgs. in M ay and 5 Mos. 1947
Compared with Compared with
M ay 1946
5 Mos. 1946
+ 21
+ 14
— 5
+ 24
+ 15
+ 16
+ 7
+ 24
+ 24
+ 32
+ 16
+ 14
+ 10
+
—
+
+
+
+
+

21
7
37
14
16
5
55

+ 14
— 5
+ 14
+ 19
— 9
+ 24
— 1

12

MONTHLY REVIEW

SUMMARY OF NATIONAL BUSINESS CONDITIONS
(Com piled b y the Board o f Governors o f the Federal Reserve System )

Output and employment at factories showed further
slight declines in May, although employment in the econo­
my as a whole increased seasonally. Value of retail trade
in May and the early part of June was at earlier record
levels. The general index of wholesale prices advanced
silghtly after the early part of May, with widely varying
changes for individual commodities.
Industrial Production
Production of manufactured goods showed a further
slight decline in May, while output of minerals increased
considerably, and the Board’s preliminary seasonally ad­
justed index of industrial production was maintained at
the April rate of 186 per cent of the 1935-39 average.
Activity in durable goods industries in May was some­
what below the April rate, reflecting small decreases in
most lines. Steel production increased, however, and was
at the highest level since May 1945. Activity at electrical
machinery plants declined somewhat further in May, and
output of passenger cars and trucks was curtailed about
10 per cent, mainly because of a shortage o f steel sheets.
Automobile production increased in the first three weeks
of June but remained below the April rate. Nonferrous
metal fabricating activity declined somewhat further in
May; and output of most building materials continued
to show a smaller increase than is usual at this season.
Production of nondurable goods, as measured by the
Board’s index, continued to decline in May. Output at
cotton and most wool textile mills declined further. Cot­
ton consumption in May was about 10 per cent below the
peak rate reached last November and apparel wool con­
sumption has been reduced by a larger amount. Output
at wool carpet and rayon fabric mills, on the other hand,
increased in that period. Production of most manufac­
tured food products declined somewhat in May after al­
lowance for usual seasonal changes. Activity in rubber
products industries continued to be curtailed. Output of
paperboard, however, rose to a new record rate, which
was 84 per cent above the 1935-39 average. Production of
most other nondurable goods showed little change or de­
clined slightly.
Output of minerals rose 7 per cent in May, reflecting
a substantial gain in fuels production to the highest rate
on record. Output of coal advanced sharply after de­
clining in April because o f work stoppages early in that
month, and output of crude petroleum advanced further
to a new peak rate.
Employment
Manufacturing employment continued to decline some­
what in May, owing mainly to production curtailments
in various industries, while employment in most other
types of nonagricultural establishments increased some­
what. The number of persons unemployed in May de­
clined to about 2 million from a level of about 2.4 million
during the first four months of this year.
Construction
Construction contract awards, according to the F. W.
Dodge Corporation, were 12 per cent larger in May than
in April, owing chiefly to a sharp rise in public awards.




Value of awards for commercial and industrial buildings
showed little change. Awards for private residential con­
struction declined further in value; the number of dwell­
ing units, however, showed little change, with an increase
in apartments and a decrease in single-family dwellings
built for sale or rent.
Distribution
Department store sales increased in May and the
Board’s seasonally adjusted index rose from a level of
about 275 in March and April to 290 per cent of the 193539 average, equaling the all-time high reached in August
1946. Sales in the first two weeks of June continued at
the high May level.
Retail sales at most other types of stores also increased
in May and were at about the same levels as those pre­
vailing during the first quarter of the year, after allowance
for seasonal changes.
Loadings of railroad revenue freight increased in May
and the first half of June, reflecting larger shipments of
coal and ore. Shipments of manufactured goods, after
allowance for seasonal changes, declined somewhat fur­
ther.
Commodity Prices
The general level of wholesale prices increased slightly
from the beginning of May to the third week of June,
reflecting chiefly increases in prices of cotton, corn rattle,
and beef. Prices of wheat, flour, and vegetable oils de­
clined further.
Crude rubber prices dropped from 25 cents per pound
to 14 cents, which is 3 cents lower than the price prevailing
at the outbreak of war in 1939. Prices of various other
industrial materials showed further declines but some
items like hides, coke, and steel scrap increased. Prices
of automobile tires and soap were reduced, while prices
of most other manufactured goods continued to show
little change.
Treasury Finance and Bank Credit
During May and the first three weeks of June reserve
funds were supplied by a substantial gold inflow and by
a decline in foreign deposits at Reserve Banks. As a result
member bank reserve balances increased and Reserve
Bank holdings of Government securities declined further.
Treasury debt retirement continued in May and June with
redemption for cash of a part of certain bill issues and
one billion dollars of certificates maturing June 1.
Holdings of Government securities at member banks
in leading cities declined somewhat in May and the early
part of June. Commercial and industrial loans continued
to decline, while real estate and consumer loans increased
moderately.
Treasury war loan deposits at commercial banks were
reduced to about one-half billion dollars as a result of
withdrawals for debt retirement. Deposits of businesses
and individuals increased further in May and June, re­
flecting in part cash redemption of certificates held by
these groups.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102