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FEDERAL RESERVE BANK OF RICHMOND

The Carolina Piedmont Region

Rapid Post-war Industrial Expansion and Continued Agricultural Diversification
Are Providing the Economic New Look in the South
this area is based on three industries: textiles, tobacco,
and furniture, and in each of these fields the Piedmont
enjoys world leadership. T h e point does not need to be
labored that in speaking of North and South Carolina as
the leading textile center of the country, it is the same as
saying that the Piedmont is the leading textile center of
the world. Camels, Chesterfields, and Lucky Strikes are
familiar to consumers the w orld over; in a sense they are
the trade-mark to the world of the N orth Carolina Pied­
mont area and Virginia. T h e greatest concentrations of
wooden furniture manufacturing in this country are
around High Point and L enoir; to say, therefore, that
North Carolina is the leading state in the nation in this
field is to say that the principal center of wooden furniture
production in the w orld is in the Carolina Piedmont
region.
W ithin any one of this area’s m ajor industries there are
a number of examples of w orld leadership— take the tex­
tile industry, for example: the w orld ’s largest wom en’s
seamless hosiery knitting plant— the largest weaver of
mass-market rayon dress goods— the largest consumer of
nylon textile yarn— the largest producer of ribbons—-the
largest output of towels and toweling— the largest weaver
of hotne-furnishings fabrics— the largest producer of men’s

Never in its history has the South had a period of in­
dustrial growth and diversification comparable to that of
the past five years. T h e Piedmont region of the Carolinas
furnishes an outstanding example of the industrial prog­
ress that has given rise to the “ N ew South.”
T h e Piedmont region has paced this industrial expansion
in the southeastern states, for by natural endowment and
human endeavor this area has not only become the in­
dustrial belt of the Carolinas and one of the fastest grow ­
ing industrial areas in the South but of the entire nation.
Although the Piedmont contains only about 5 0 % of the
population of the tw o states, it accounts for over threefourths of all the manufacturing workers and wages, al­
most 8 0 % of the value added by manufacturing, and 6 3 %
of all manufacturing enterprises in the two states. This
dominance is not a “ flash-in-the pan” ; since 1900, indus­
trial activity in the Piedmont has increased 1 600% — a
spectacular growth probably unmatched by any area of
comparable size in the nation.
T h e Piedmont’s industrial influence extends far beyond
the borders of North and South C arolina; to speak of the
Piedmont only in terms of these two states or even of the
Fifth Federal Reserve District would be to belittle the
achievements of the region. T h e industrial structure of




m

JUNE 1950

MONTHLY REVIEW

rayon summer suiting— the largest cotton mill in the
world under one roof— all these are located in the pro­
gressive Piedmont region.
T h e most dramatic aspects of the industrial progress in
the Piedmont area are the multi-million dollar new plants
and numerous expansions of old ones in the post-war
period. N ot too many years ago a new factory in this re­
gion costing a few million dollars was a relatively rare
occurrence; today the industrial strides of the Piedmont
are measured by multi-million dollar installations and ex­
pansions. T h e old college town of Rock H ill, for ex­
ample, made the nation’s headlines when Celanese C orpo­
ration of America surveyed its advantages and decided
upon it as the location for its new $40 million rayon yarn
plant. Operating at capacity, this textile giant w ill em­
ploy 5,000 workers (almost one-fourth of the total popu­
lation of the town in 1947) and augment the annual
payroll of a formerly one-industry county (cotton manu­
facturing) by $8-9 million.
In addition to having the most modern and efficient
machinery in the w orld, many of the new textile plants
are not only pleasant to look at but are architectural ex­
hibits of a new industrial age which is stressing the aesthe­
tic in factory appearance. Far from creating the dreary
factory towns so characteristic of the older, heavily indus­
trialized areas, such plants as the new nylon throwing mill
of Duplan Corporation in W inston-Salem, the $13 m il­
lion Grace bleachery of Springs Cotton M ills, and the
rural textile spinning plant built by Deering, M illiken and
Company in M cC orm ick, South Carolina, are positive
contributions to the appearance of the areas in which they
are located.

. . .

and

Textile Diversification

W h ile increasing the number of new large plants, the
Piedmont is gradually diversifying its industrial structure
and getting a jump ahead of other areas in industries
founded on recent technological advances. Camden, South
Carolina, is a good example; long famed as one of the
South’s leading pleasure resorts, it is the site of a huge new
du Pont plant for the manufacture of “ orlon” — the newest
synthetic fiber in science’s successful attempts to improve
upon nature.
Industrial leaders in the Piedmont are fully aware of
the fact that, in order to maintain leadership in the textile
industry, Piedmont plants must be able to turn quickly to
production based on laboratory-made fibers. T h e rayon
industry affords a good example of the flexibility of the
region in this respect. Burlington M ills, which got its
start in North Carolina, is the w orld ’s largest weaver of
rayon goods and has plants in 20 communities scattered
over the Piedmont region of North Carolina. W illiam ston, South Carolina, is one of the latest entrants in this
field with a new $4 million filament rayon weaving plant.
A ll told, there are rayon plants in over half of the 21
counties comprising the Piedmont region of South C aro­
lina.

http://fraser.stlouisfed.org/
[ 3]
Federal Reserve Bank of St. Louis

Diversification in the Piedmont’s textile industry has
progressed in another very desirable direction. In the past
the emphasis was much too heavy on semi-finished items
such as yarn and gray goods— now, as a consequence of
new constructions and expansions of finishing facilities, the
Piedmont is leading the South to a ranking position as a
supplier of finished textiles. King C otton’s domain has
been more recently invaded by the woolen and worsted
industry in w7
hat an N P A Committee of the South report
terms as “ probably the most significant textile develop­
ment” in the South during the post-war period. Again,
the Piedmont region is in the van of this development,
with mills recently established in M cC orm ick, Johnston,
Greenville, and Union, South Carolina.

. . . but not Enough Diversification in Other Lines
Although such developments have produced economic
conditions in the Piedmont superior to those of other com­
parable southeastern areas, a still greater industrial diver­
sification must be achieved to raise per capita incomes at
least to the national average. Progress is, however, being
made— and is illustrated by the recent growth in the im­
portant metal-working industries, including large plants
of the W estern Electric Company in W inston-Salem and
Burlington, and in food products, agricultural implements,
fertilizer plants, paper and container products, apparel, and
chemicals.
It is along such lines that new opportunities must be
created and realized throughout the South. T h e Pied­
mont Carolinas have an abundance of raw materials sup­
plied by its forests, farms, and mines capable of servicing
a wide range of local semi-finished and finished-goods in­
dustries such as synthetic boards, cement, plastics, paints
and varnishes, glass and china ware, fire brick, apparel,
food products. T h e list might be extended considerably,
but the point is that all too many of the raw materials are
still being shipped out of the area— to be bought back in
the form of processed goods. Certainly, many of them
could be economically utilized right in the region of their
origin.

. . . including Agriculture
Progress in the Piedmont is not confined to the field of
manufacturing and to what the uninitiated think of as tex­
tiles, furniture and tobacco manufacturing.
Despite
rapid industrialization o f the area, the bulk o f the popula­
tion is rural, and agricultural activity is a m ajor source of
income. T here is, fortunately, growing realization that
agricultural diversification must accompany industrializa­
tion in order to achieve a well-balanced economy. E x­
panding industrialization of the Piedmont is itself pro­
viding a powerful incentive toward diversification in
agriculture. G row ing industrial towns create expanding
markets for milk, vegetables, poultry, eggs, and other farm
products.
Aided by local banks, colleges and various government
agencies, local and Federal, Piedmont farmers are turning
from traditional and almost complete dependence upon

FEDERAL RESERVE BANK OF RICHMOND

cotton and tobacco to hogs, poultry, and dairy cattle. A
unique example of a balanced economy catches the eyes of
tourists passing through the outskirts of Pendleton, South
Carolina. G razing in the “ front yard” of a new textile
plant is a herd of H ereford steers that is, figuratively
speaking, feeding off an experiment. Its pasture is a selfreseeding growth of alta Fescue grass and Ladino clover,
one acre of which is sufficient to graze one steer all year.
Agricultural experts at Clemson College feel that there is
a possibility that this high-protein, grass-legume combina­
tion w ill provide the type of winter pasture necessary for
the development of an important livestock industry in the
Piedmont counties.

O ver 400 national enterprises have regional offices in the
city, possibly a record for its population size. Charlotte
ranked 71st in the national population (January 1, 1950),
but in wholesale sales in 1947 it ranked 34th, and in per
family effective buying income it stood in 52nd place in
1949.1 Greensboro, with a greater population within a
50-mile radius than any other southeastern city, is one of
the most important distribution centers in the South. A l­
though ranked 152nd among American cities at the begin­
ning of 1950, Greensboro ranked 84th in effective buying
income per family, 126th in general merchandise store sales
and 113th in furniture, household, and radio sales in 1949.
In 1947, it was 81st in wholesale trade.1 M an y smaller
cities like Burlington, Reidsville, Salisbury, Statesville and
Hickory in North Carolina, and Anderson, South C aro­
lina, offer market; and distribution opportunities superior
to those of other cities of comparable size. Spartanburg
exemplifies this particularly well.
Although it has a
fairly small population (about 40,000) as compared with
the largest cities in the Piedmont, together with Green­
ville it lies in the center of a 50-mile market area with
over a million customers.

Although news of Y ork County in South Carolina in
the last few years has been dominated by the Rock H illCelanese development, its agricultural progress also merits
attention. T his county is the largest producer of turkeys
in the state, and its peach orchards have spread over the
countryside to the point where it is now one of the largest
peach producers in the Piedmont region. T h e textilepeach combination provides a balanced county economy
also in Spartanburg (the largest peach producer in the
region), enabling income sources to be based on a leader­
ship position in both manufacturing and agriculture.

, . . Overall View
Since the end of the war capital investment in the Pied­
mont counties has proceeded on an unprecedented scale.
M odernization and new construction in established indus­
tries as well as in new lines of activity have expanded and
diversified the industrial structure.
A relatively large
rise in consumer purchasing power has marked this area
as one of the most important markets in the county. M uch
remains to be accomplished before the Piedmont can attain
the desired goals of adequate employment opportunities,
high income levels (on a national basis) and a really stable
economy.

, . . growth made possible by Distribution
Facilities
Almost a century ago a writer brushed aside the South’s
failure to develop manufacturing by extolling achievements
in other respects, adding “ we have no cities, but we have
a meliorated country populace, civilized in the solitude,
gracious in the amenities of life, and refined and conserva­
tive in social habits.”
( D e Bow's R eview July, 1857.)
T oday, with all its industrialization, the Piedmont region
of the Carolinas has only one city with a population over
100,000, but there are many smaller cities and towns
strung along the network of highways that weaves the
region and its three million people into an integrated pat­
tern of mutually dependent economic interest.
In effect, the Piedmont is a huge continuous market ex­
tending 275 miles north and south, attracting the attention
of hundreds of national distributors operating out of
natural distribution centers like Charlotte, Greensboro,
W inston-Salem, Durham, Columbia, and Greenville. As
a consequence of relatively high incomes and of serving
areas that extend well beyond city limits, leading cities of
the Piedmont constitute better markets than their popula­
tion counts w ould indicate.

M ain supports of the area’s industrial structure— tex­
tiles, tobacco, and furniture— w ill grow with the nation;
as the country’s population expands and an increasing
number of families are formed, the demand for these pro­
ducts will also expand. In addition, this dynamic economy
has a relatively stable component in the form of its tobacco
industry. Although the area’s growth is in large part a
consequence of the nation’s war and post-war industrial
expansion, many of its gains have been greater than the
average, and much of its growth represents new business
activities and opportunities that are revamping the South
and giving it an economic N ew Look. T his N ew Look
is perhaps best reflected in the Piedmont region of the
Carolinas.

A considerable share of income earned in Charlotte, the
region’s largest city, stems from distribution activities.

1C op yrigh t 1950 Sales M a n a g e m e n t
reproduction not licensed.

S u rv e y o f B u y in g P o w e r ;

fu rth er

Credits for the photographs on the front cover are acknowledged as follow s:
(1) Cigarette manufacturing— courtesy,
Winston-Salem Chamber o f Com m erce; (2) Celanese plant, Fairchild A erial Surveys, Inc.— courtesy, Board of Trade, Rock
Hill, S. C .; (3) display in Southern Furniture Exposition Building— courtesy of High Point Chamber of Com m erce; (4) Dan
River Steam Plant— courtesy, Duke Pow er Com pany; (5) aerial view of business section, Charlotte, N. C .; (6) knitting ma­
chines in hosiery mill— courtesy, High Point Chamber o f Commerce; (7) nylon throwing mill— courtesy, Winston-Salem Cham­
ber of Com merce; (8) T illery hydro-electric plant— courtesy, Carolina Power & Light Company.




[4]

JUNE 1950

MONTHLY REVIEW

Valuation Reserves for Loan Losses
Increasing in use, they offer material tax savings while providing
a cushion against possible future loan losses.
are realized during years when earnings are so low that
additional tax credits would in large part be wasted.

Fifth District member banks saved an estimated $4.5
million in 1948 and 1949 under a ruling of the Commis­
sioner of Internal Revenue permitting more liberal deduc­
tions from income to provide for losses on loans. A t the
same time, banks taking advantage of this ruling were
creating a fund to ease the impact of any future period of
heavy loan losses.

In addition to the monetary saving gained from the use
of valuation reserves for losses on loans, there is a further
important advantage to banks in using this method. Such
reserves are carried as a deduction from loan accounts, so
that loans are shown net of reserves on the bank’s balance
sheet. As they are not capital reserves, the impact of losses
in bad years is not reflected as a reduction in capital ac­
counts. T his is a very satisfactory position for a bank to
be in if and when the lean years come. It is then that de­
positors become bank statement conscious.

Prior to 1947, banks (and other businesses) were per­
mitted by the Treasury to deduct realized losses on a cur­
rent basis, or to make “ reasonable” deductions from cur­
rent earnings for transfers to valuation reserves for tax
purposes. As it was rather difficult to establish the reason­
ableness of any specific deduction, banks in the Fifth D is­
trict in general chose to charge off losses on a current
basis. Further difficulty was involved in that differences
of opinion can exist as to when a bad debt loss is actually
realized. T h e only deduction which could not be ques­
tioned was under the provision that banks could deduct
charge-offs ordered by examiners.

N ot all member banks in the Fifth District have so far
taken advantage of this ruling of the Commissioner of In­
ternal Revenue. H a lf of the Fifth District member banks
currently carry some balance in a valuation reserve for bad
debt losses. Far more than half of the loan volume of the
District is covered by such valuation reserves since their use
is more prevalent among the larger banks.

Mimeograph 6209 of the Office of Commissioner of In­
ternal Revenue, December 8, 1947, laid down specifically
what would be considered as a “ reasonable” addition to a
reserve for bad debt losses on banks’ loans for tax purposes.

T able 1 shows the extent to which such valuation re­
serves have been adopted by Fifth District member banks
during the past two years.

In computing net income for tax purposes, a twentyyear moving average of net losses experienced as a per­
centage of average loans outstanding at the year end is
computed. T h e bank is permitted to establish and main­
tain a minimum balance as a reserve equal to this same
percentage multiplied by loans outstanding at the end of
the year. T h e maximum balance which can be held in
this account is three times this moving average of net losses
experienced— three average years’ net losses. W ithin any
one year the maximum allowable transfer to bad debt re­
serves is (1 ) a percentage of current loans equal to the
twenty-year moving average percentage loss on loans, or
( 2 ) enough to bring the balance in the reserve to the
minimum amount, whichever is the larger.

Table 1
NUMBER OF BANKS USING VALUATION
RESERVES FOR LOAN LOSSES
B Y S T A T E A N D D E P O S IT S IZ E

STATE
D ist. o f Col.
V ir g in ia
W e s t V ir g in ia
N orth C arolina
South C arolina
M arylan d
F ifth D istrict
D E P O S IT S IZ E
(m illion s o f dolla rs)
less than 2
2 - 5
5 - 10
1 0 -2 5
25 - 50
50 - 100
100 and over

In order to take advantage of this tax-saving device, it
is not necessary that the bank’s records be kept on an ac­
crual basis. A bank maintaining records on a cash basis
is still permitted to use reserve accounting for bad debt
losses on loans for income tax purposes.
In utilizing the provisions of this ruling, Fifth District
member banks reduced their income tax liability by an es­
timated $2.9 million in 1948, and by an estimated $1.6
million in 1949— a saving in two years of $4.5 million.
Since total income taxes paid in 1948 and 1949 were $26.8
million, Fifth District member banks saved about 14% of
their income tax liabilities. M ost of such saving is net
since the alternative is to take deductions for bad debt
losses as actually realized. Large scale loan losses usually



P e r Cent o f Banks
U s in g V a lu a tion R eserve
fo r B ad D ebt L osses on
D ec. 31, 1949

1947

1948

1949

3
29
10
9
5
9

13
91
44
36
19
33

86.7
45.0
45.8
66.7
57.6
42.9

65

13
83
41
34
18
30
219

236

49.3

7
20
14
17
2
0
5

20
72
45
44
16
12
10

25
76
48
47
17
12
11

18.5
45.5
64.9
77.0
94.4
92.3
100.0

Transfers to valuation reserves are to some extent over­
stated, particularly for 1948, as some banks carried reserves
for contingencies at year-end 1947 which were later trans­
ferred in whole or in part to valuation reserves for losses
on loans. Data as given in this article are as reported by
member banks, and thus involve some over-reporting of
such transfers.
A t year-end 1947 only 65 banks were carrying valuation
reserves for losses on loans. By year-end 1949, 236 banks

[51

FEDERAL RESERVE BANK OF RICHMOND

reserves are still possible, even for banks which currently
carry valuation reserve accounts, since the maximum
amount which can be transferred to this reserve for tax
purposes is approximately 2 % of current loans (three times
the D istrict’s average loss experience).

carried such reserves. In 1949 all but two banks with de­
posits of more than $25 million used valuation reserves and
more than three-fourths of banks with deposits of more
than $5 million carried such reserves. A t the other ex­
treme, fewer than one-fifth of the D istrict’s member banks
with deposits of less than $2 million carry valuation re­
serves, although small banks also have reason to avoid un­
necessary tax payments. T h e state with the highest per­
centage of banks using these reserves was the District of
Columbia (8 6 .7 % ) ; the lowest percentage was in M ary­
land (4 2 .9 % ). F or other states the percentages using valu­
ation reserves were North Carolina, 6 6 .7 % ; South C aro­
lina, 57.6% ; W est Virginia, 4 5 .8 % ; and Virginia 4 5 .0 % .

Table 3
VALUATIO N RESERVES FOR LOAN LOSSES
(P e rce n ta g e o f N et L oans o f M em ber Banks U s in g Such R eserv es)
BY

F ifth D is trict

1948

16,980

0.92
1.05
1.17
1.35
1.11
1.18
1.42

0
0.62

VALUATIO N RESERVES FOR LOAN LOSSES
(P e rce n ta g e o f M em ber B ank N et L o a n s)
B Y S T A T E A N D D E P O S IT S IZ E
STATE

13
123
178
397
*
0
1,503

75
578
1,047
2,249
1,408
1,504
4,697

139
882
1,450
3,309
2,061
2,348
6,790

D istrict o f Colum bia
V ir g in ia
W e s t V ir g in ia
N orth C arolina
South C arolina
M arylan d
F ifth D istrict

* T w o ban k s; data w ithheld.

1947
P e r C ent

1948
P e r C ent

1949
P e r Cent

0.11
0.14
0.16
0.36
0.04
0.05

0.54
0.68
0.95
1.04
0.67
0.53

0.80
0.88
1.25
1.60
1.10
0.83

0.16

0.73

1.05

0.03
0.08
0.12
0.14
*
0
0.34

0.13
0.33
0.61
0.75
0.70
0.68
1.01

0.21
0.46
0.82
1.10
1.03
1.12
1.42

D E P O S IT S IZ E
(m illion s o f d olla rs)

N o te : D ata m ay not add to totals because o f rounding.

less than 2
2 - 5
5 - 10
1 0 -2 5
25 - 50
50 - 100
100 and over

T able 3 shows the ratio of reserves to loans of banks
using valuation reserves for bad debt losses. F or the D is­
trict, coverage increased from 0 .5 8 % of loans at year-end
1947 to 1.29% in 1949. Further transfers to valuation




0.45
0.71
0.95
1.04
0.84
0.72
1.02

Table 4

D E P O S IT S IZ E
(m illion s o f d olla rs)
less than 2
2 -5
5 -1 0
1 0 -2 5
25 - 50
5 0 -1 0 0
100 and over

0.92

0.85
1.17
1.85
1.75
1.23
0.85
1.29

1949

11,558

0.60
0.94
1.43
1.19
0.77
0.68

A n even greater potential expansion of valuation re­
serves is shown in T able 4, which gives the percentage of
coverage of total loans of all Fifth District banks. A t
1.05 % , this ratio could be roughly doubled under the pro­
visions of this ruling. Thus Fifth District member banks
can still transfer roughly $15 million to valuation reserves
for bad debt losses on loans, with a saving of some $4 mil­
lion in income taxes. Further, losses reasonably expected
to occur eventually would be provided for in advance.

1,962
4,669
2,031
5,029
1,218
2,070

2,289

0.36
0.61
0.92
0.90
0.61
0.22

* T w o ban ks; data w ithheld.

(in thousands o f d allars)
1,326
3,414
1,433
3,232
772
1,381

1949
P e r Cent

0.49
0.53
0.68
0.51
*

less than 2
2 - 5
5 - 10
10 - 25
2 5 -5 0
50 - 100
100 and over

B Y S T A T E A N D D E P O S IT S IZ E

255
655
209
1,016
36
118

1948
P e r Cent

D E P O S IT S IZ E
(m illion s o f d olla rs)

Table 2

1947

S IZ E

0.58

F ifth D istrict

VALUATION RESERVES FOR LOAN LOSSES

D istrict o f C olum bia
V ir g in ia
W e s t V ir g in ia
N orth C arolina
South C a rolin a
M arylan d

D E P O S IT

1947
P e r Cent

D istrict o f C arolina
V ir g in ia
W e s t V ir g in ia
N orth C arolina
South C arolina
M arylan d

T h e amount held in valuation reserves for year-end
1947, 1948, and 1949 is shown in T able 2. Valuation re­
serves for bad debt losses on loans increased from $2.3
million in 1947 to $17.0 million at year-end 1949, an in­
crease of 64 1.8% . T h e $50-100 million size-group showed
the largest percentage increase, as no banks in this group
carried valuation reserves for bad debt losses on loans at
year-end 1947. South Carolina, which expanded its valua­
tion reserve thirty-three times, showed the greatest expan­
sion of any state. T h e size-group showing the smallest
percentage increase was for banks with more than $100
million deposits. N orth Carolina banks’ valuation reserves
showed the smallest rate of growth for any state. In each
case substantial reserves were held at the beginning of the
period.

STATE

STATE AND

STATE

* T w o ban ks; data w ithheld.

[6]

MONTHLY REVIEW

JUNE 1950

Business Conditions and Outlook
sales, possibly setting a new high record this year. Prom i­
nent in passenger car registration gains have been the
Carolinas and Virginia. M aryland registrations are run­
ning at peak levels for the season, but gains have not been
as marked as in the above-mentioned states.
Commercial car registrations in M arch rose 19% above
February but were still 2 % under M arch a year ago. T he
Carolinas and Virginia again showed better sales records
than other states in the District.

Continued high level construction and record trade
levels in durable goods continue to spark the business situ­
ation in the Fifth Federal Reserve District. Hesitation,
evident in the textile industries in A pril and early M ay,
began to reverse itself late in the month as buyers entered
the market and made substantial forward coverage, in
many cases running through the fourth quarter of the
year. T h e durable goods industries, lumber, furniture,
and w ood products have continued their expansion. In
fact, the lumber situation is quite tight and prices have
risen notably. Construction contracts awards in A pril re­
ceded moderately from M arch, but much less than might
have been expected in view of the heavy M arch volume
anticipating expiration of certain Federal loan guarantees.
Trade levels have improved in practically all lines.

Construction
Construction contract awards in A pril were 8 % lower
than in M arch after seasonal correction but were 4 2 %
ahead of a year earlier. F or the first four months, total
contract awards were 7 6 % higher than a year earlier.
Commercial buildings is the only group which showed
better than seasonal performance between M arch and
April, having risen 7 7 % after correction. T his classifi­
cation is still near peak levels despite the drop of 65%
shown from April a year ago when one contract of over
$20 million was awarded.

Motor Vehicles
Passenger car registrations in this District in M arch
were at an all-time high level for that month and within
striking distance of the peak established in O ctober 1949.
Indications point to further expansion in passenger car

BUSINESS INDEXES—-FIFTH FEDERAL RESERVE DISTRICT
AVERAGE DAILY 1935-39= 100— SEASO N ALLY ADJUSTED
A p ril
1950
N ew A u tom obile R e g istra tio n 1.............................................................
N ew C om m ercial Car R e g istra tio n s1.................................................
Bank D ebits ............ .......................................................................................
B itum inous Coal P r o d u ctio n ..................................................................
B u ild in g C ontracts A w a rd e d , T o ta l...................................................
C om m ercial C on stru ction C on tracts...............................................
M a n u fa ctu rin g C on stru ction C on tracts........................................
P u b lic W o r k s and U tilitie s ................................................................
R esiden tial C on stru ction C on tracts— .........................................
A p artm en ts and H o te ls .......................................................................
O ne and T w o F a m ily H o u s e s ...........................................................
B u ild in g P erm its Iss u e d ...........................................................................
B usiness F a ilu res— N o ..............................................................................
Cigarette P rod u ction ................................................................................
Cotton C on sum ption .................................................................................
C otton S pindle H o u r s ...............................................................................
D epartm en t S tore Sales3............. ...........................................................
D epartm en t Store S tock s3......................................................................
E le ctric P ow er P ro d u ctio n .............. .......................................................
E m ploym en t— M fg . In d u strie s1 ...........................................................

M a rch
1950

356
167
516
456
493
323
697
1131
630
379
76
198p
145
141
324p
328

201
175
338
160
561r
258
492
440
700r
1239
713
442
89
229
144
142
288p
324
305
123

F e b ru a ry
1950
182
147
337
24r
477
540
199
240
660
652
636
349
63
208
149
148
299r
307
296
123r

A p r il
1949
179
172
328
165
363
1285
414
245
304
428
292
285
128
216
111
112
304
315
259
124

F u rn itu re— R e t a il:3/ 4 ..............................................................................
N et Sales ...................................................................................................
Cash ......................................................................................................
C redit .................................................................................................
R eceivables ..............................................................................................
C ollections .................................................................................................
In ven tories ................................................................................................
G asoline Con sum ption ..............................................................................
H ou seh old A p p lia n ce Store S ales........................................................
L ife In su ran ce S ales................................................................................

181
195
160
133
173
131

177
214
151
143
181
138

206
251
185
137
181
129

108
257

90
275

88
259

175
217
151
106
173
151
202
98
241

W h olesale T r a d e :
A u tom otive S u p p lies2 .........................................................................
D ru gs ..........................................................................................................
D ry Goods .................................................................................................
E lectrica l G ood s2 ...................................................................................
G roceries ...................................................................................................
H ardw a re ...................................................................................................
In du strial S u p p lies2 ...........................................................................
P aper and Its P ro d u cts 2 ............. ......................................................
T ob a cco and Its P ro d u cts2.................................................................

515
257
184
63
244
134
271
158
63

575
278
198
57
249
126
238
148
56

474
256
157
55
229
123
210
182
64

260
268
156
77
238
124
255
125
89

’ N ot seasonally adju sted
21938-41 = 100
3R ev ised Series— back figures available on request
±1941 = 100




17]

% Chg —-L atest M on th
Y e a r ago
P re v . M o.
+ io
+ 19
+
5
+
4
-8
-4- 77
0
- 27
0
—
9
— 12
— 14
— 15
— 14
+
1
—
1
+ 13
+
1
+
3
0

+

__

23

2

+
9
+
1
+ 42
— 65
+ 19
+ 32
+ 129
+ 164
+ 116
+ 33
— 41
—
8
+ 31
+ 26

+
+
+
—

7
4
14
3

+

2

+

—
+
—
—
—

9
6
7
4
5

—

—

+
—

20
7

+
+

10

—
—
—
+
—
+
+

10
8
7
11
2
6
14

+
—
+
—
+
+
+

+
+

7

+

13

—

98
4
18
18
3
8
6
26
29

~h
+

3
10

6
25
0
13

7

FEDERAL RESERVE BANK OF RICHMOND

In one- and two-fam ily houses the decline of 12% after
seasonal correction was surprisingly small in view of the
M arch termination of certain loan guarantees. Awards
for one- and two-fam ily houses, however, were 116%
higher than a year ago, while apartments and hotels de­
clined 9 % after seasonal correction from M arch to April
but continued 164% ahead of a year ago. In the first four
months of 1950, apartments and hotels were 174% ahead
of last year, while one- and two-fam ily houses were 134%
ahead. It is noteworthy that awards for factory buildings
ran at the same seasonal level as in M arch, and 19% ahead
of a year ago. In the first four months of the year, fac­
tory buildings were 4 1 % higher than a year earlier, while
educational buildings showed gains of 160% .
Construction is always difficult to forecast, but financ­
ing terms are extremely easy and very favorable to a con­
tinuance of present high levels.

Textiles
Surprisingly little readjustment occurred in cotton con­
sumption or spindle hours in A pril after seasonal allow ­
ance. Consumption was up 1% from M arch while spindle
hours were off a like amount. Relative to a year ago,
cotton consumption is 31 % higher and spindle hours are
up 2 6 % . Variations in the year-to-year gains are ap­
parently reflected in better levels in the heavier weight
goods than have obtained thus far in the lighter construc­
tions.
In m id-M ay a substantial amount of forward business
was written by the mills, which may be sufficient to re­
verse the slowdowns in mill activity reported late in April
and early in M ay. This buying wave has subsided, but
business already written may maintain fairly steady opera­
tion, seasonal factors considered, through the summer.
N ew business in the w ork clothing industries has been
slow but this has not retarded operations of the producers.
It reflects over-buying earlier in the year, arising from
fears of price increases due to the new minimum wage.
T h e seamless branch of the hosiery industry has ade­
quate orders to continue current operating rates. T h e
full-fashioned industry, on the other hand, is not so well
off and faces the approach of summer when bare legs are
the vogue.

Bituminous Goal
W eekly coal output has been receding since the middle
of M arch— a normal seasonal tendency in pre-war years.




T he industry is still operating at an annual rate in excess
of 500 million tons, a high level considering the difficulties
of the past year. T h e supply outlook is in a more favor­
able position than in years, giving the consumer hope that
requirements w ill be met as needed, and the industry hope
of regaining lost customers. T h e industry faces some
painful adjustments in getting production down to some
500 million tons annually; but these changes are taking
place and the outlook is considerably more hopeful than
it has been.

Retail Trade
Department store sales recovered in A pril to a level
13% above M arch after seasonal (and Easter) correction
and sales were 7 % ahead of a year ago.
In the soft goods trade it appears that the weather was
the principal cause of the earlier softness. T h e A pril up­
turn in sales carried the adjusted index to within 4 % of
the all-time peak, a possible indicator of better business in
the soft goods lines.
Furniture store sales revived moderately in April after
seasonal correction, and were 3 % ahead of that month a
year ago. A pril ran considerably below the last half of
1949, but is still high by long-term comparison. T here
is little cause for concern over furniture store sales at this
time in view of the continued high level of new residential
building.
Household appliance sales continue their upward trend
with A pril showing a gain of 10% over a year ago. In­
dependent household appliance stores are making a better
showing than the appliance departments in department
stores. Again the high level of residential construction
and new family formation are important factors both for
current sales and for coming months.

Bank Debits
Indicative of continued revival in dollar volume of
business in the Fifth District, bank debits in A pril estab­
lished a new all-time high, 5 % ahead of M arch on an ad­
justed basis, and 9 % higher than a year ago. T h e revival
is particularly marked in the District of Columbia, the
Carolinas, and Virginia. Although W est Virginia showed
a marked recovery from the drop w^hich occurred in 1949
and in February and M arch of 1950, it has not yet risen
to its previous peak. In M aryland debits gave indication
of revival in January, but this was not maintained in the
three succeeding months.

JUNE 1950

MONTHLY REVIEW

PRINCIPAL

ASSETS

AND

L IA B IL IT IE S

UNITED STATES AND

FIFTH

OF

MEMBER

BA NKS

DISTRICT

LAST WEDNESDAY OF MONTH FIGURES

LOANS

LOANS AND INVESTMENTS
5th Dist.

U S.

BILLIONS OF DOLLARS

5th.

Dist.

DEMAND DEPOSITS ADJ.
5th. Dist.

Data

BILLIONS

U.S. GOVT.
U. S.

BILLIONS OF DOLLARS

TIME DEPOSITS

OF DOLLARS

5th. Dist.

L atest

Partly Estimated.

BILLIONS

Figure

P lotted :

B ILLIO N S

718,597

$ 3,101,350

911,529
21,126
18,714
26,351

3,800,810
82,538
66,269
104,018

3,699,284
81,092
68,876
104,555

43,746
219,072
72,219
70,690
11,575
131,082
30,302
18,531
114,476

189,771
1,046,539
307,745
310,822
50,063
533,741
126,807
57,294
525,027

184,345
904,683
327,699
291,685
52,530
501,196
122,9 92
60,562
471,496

60,627
96,624
74,582
42,021

240,560
401,443
337,270
192,275

237,011
380,347
314,527
181,216

23,360
22,103
36,790
30,744
210,602
21,493
457,323
94,443

21,046
21,246
35,685
31,166
169,817
19,802
480,387
87,838

90,977
94,815
150,153
111,212
832,917
81,107
1,857,989
364,672

87,438
91,982
144,141
128,627
694,810
76,548
1,892,158
353,278

41,685
124,087
28,164
56,094
25,995

39,869
124,096
27,164
57,507
25,010

149,407
477,982
110,593
217,750
97,704

182,853
539,077
115,922
235,141
102,430

....$ 3,983,365

$ 3,822,497

$16,111,620

$15,534,119

S O U T H C A R O L IN A
Charleston ................
60,133
101,872
C olum bia ..............
83,632
G reen ville ............
46,988
Spartan burg
V IR G IN IA
Charlottesville
D an ville .................
L yn ch b u rg
.........
N ew port N ew s
N orfolk .................. .
P ortsm outh ..........
............
R ich m on d
R oanoke ................
W E S T V IR G IN IA
B luefield
..................
C harleston ............
C larksbu rg
..........
H u n tin gton .........
P a rk ersbu rg
.......
D ist. T otals

,

A p r. 1950

$ 2,905,618

M ARYLAND
895,610
B altim ore
............
19,366
Cum berland ..........
17,172
Frederick ..............
H agerstow n ..........
26,446
N O R T H C A R O L IN A
A sh eville ..................
48,686
264,477
Charlotte ..............
81,910
D urham ................
77,047
G reen sboro
.........
11,714
K in ston .................
R a leigh
.................
120,485
30,458
W ilm ington .........
14,544
W ils o n ...................
125,108
W in ston -S alem




OF D O LL A R S

Fi,,h Dis,rict > APril 26. 1950
United States, March 2 9 . 1950

4 M onths
1949

$

U.S.

BUILDING PERMIT FIGURES

4 M onths
1950

D IS T . of C O L U M B IA
784,834
....... . . . $
W a sh in gton

A p r il
1949

SECURITIES

BILLIONS OF DOLLARS

TOTAL DEPOSITS

OF DOLLARS

DEBITS TO INDIVIDUAL ACCOUNTS
A p r il
1950

5th. Dist.

A p r . 1949

4 M os. 1950

4 M os. 1949

M ARYLAND
B altim ore ........... $
C u m berland
...........
F re d e rick
H ag erstow n
Salisbu ry .............

5,574,390 $
108,250
193,725
267,280
135,852

5,166,520 $ 32,916,720 $ 13,491,765
70,220
341,395
168,110
79,730
1,138,875
175,045
140,910
660,870
342,945
137,717
415,592
707,368

495,691
264,710
1,248,150
185,585
418,435
1,039,402
1,390,406

354,627
803,651
951,761
113,409
162,370
1,829,979
1,743,922

1,200,409
1,249,180
5,239,360
1,517,467
1,166,784
6,906,703
7,514,351

1,006,806
1,550,002
3,020,797
494,335
522,853
5,301,962
3,663,599

668,046
122,442
745,751

354,045
74,750
665,050

6,895,242
481,223
1,951,194

2,555,943
321,195
1,337,450

244,287
1,124,974
202,295
2,460,126
163,071
1,622,929
128,853
134,292
921,959

1,749,223
9,240,714
8,308,387
3,763,691
1,237,631
7.004,891
2,0 72,377
1,443,088
3,747,241

741,055
5,648,785
1,851,777
3,576,869
609,691
3,600,790
441,810
320,457
2,098,986

80,839
689,298
414,990
109,100

883,938
4,393,063
2,464,529
514,706

1,182,750
2,394,906
2,102,140
555,027

4,710,709

22,759,145

14,357,167

V IR G IN IA
D an ville
.............
L y n ch b u rg
........
N o rfo lk ................
........
P etersbu rg
Portsm outh ........
R ichm ond ...........
Roanoke
.............
W E S T V IR G IN IA
C h arleston
Clarksbu rg
H u n tin gton
NORTH

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

C A R O L IN A

A sh e v ille
...........
C harlotte
...........
Durham ................
G reen sboro ........
H igh P o in t
R aleigh ................
R o ck y M ou n t
S alisbu ry .............
W in ston -S alem ..
SOUTH

474,806
3,106,811
1,104,627
1,062,663
546,685
3,180,255
1,033,279
203,655
1,230,183

C A R O L IN A

Charleston ...........
C olum bia .............
G reen ville ...........
Spartan burg ......

264,973
708,020
671,836
173,850

D IS T . of C O L U M B IA
W ash in gton .........
D istrict

[9]

7,497,308

T o ta ls ..$ 34,117,066 $ 25,656,383 $139,177,989 $ 74,142,385

FEDERAL RESERVE BANK OF RICHMOND

F
CONSTRUCTION

if t h

d is t r ic t

CONTRACTS AWARDED

B u ild in g perm its in A p r il fe ll below the M a rch level w hich was
con trary to seasonal tendencies.
P erm its, how ever, in the 29 cities
in the D istrict con tin u ed 3 3 % ahead o f a year ago and all but fo u r
cities show ed gains o ver a year ago.
C h ie f cause o f the drop from
M arch to A p r il w as ex ce p tio n a lly large con tracts in B altim ore, R ic h ­
m ond, and R oanoke in M arch.

<> <> < >
$ § $-

- <> <> <>■
e s $

CIGARETTE PRODUCTION

COTTON CONSUMPTION

C igarette p ro d u ctio n on an adju sted basis declin ed 1 4 % fro m M arch
to A p r il and stood at a level 8 % u nd er a year ago.
F o r the first
f o u r m onths, cig arette consum ption in the U n ite d States w as around
3 % ahead o f a y ear ago.
T h u s the drop in p ro d u ctio n is m ore than
accou n ted fo r by d e clin in g exports.

C ut-back in output indicated b y trade in fo rm a tio n w as not v e ry
p ronoun ced in the statistics d u rin g A p ril. C otton consum ption rose 1 %
in this D istrict, w hereas cotton spindle hours operated fell 1 % fro m
M arch. It m ay be that the ch ie f im pact o f the cu t-b ack w ill be w it­
nessed in M a y. M ark et con dition s, h ow ever, have tu rn ed about and
a better outlook is in sight.

-<^ <> < $ s>

-< > <> < $ e s>
BITUMINOUS COAL PRODUCTION

DEBITS

A p ril output w as 4 % higher than M a rch on an adju sted basis and
1 % higher than a year ago. T h e w eek ly output is d ow n w a rd , but is
m ore in the nature o f a resum ption o f p rew ar seasonal tendency.
B ased on t\ie cu rren t business outlook, it is probable that bitum inous
coal output w ith in the cu rren t year w ill run in excess o f 500 m illion
tons.

B ank debits a dju sted, alw ays a u se fu l in dica tor o f business, rose 5 %
fro m M a rch and 9 % fro m last year. T h ese indexes contin ue to show
an overall rise fo r the F ifth D is trict in a rather persistent fashion,
p articu larly in the D is trict o f C olum bia, V ir g in ia , and the C arolinas.
A stron g revival is indica ted in W e s t V ir g in ia , but in M a ry la n d a
sidew ise m ovem ent is apparent.




r e n d s
BUILDING PERM ITS

A n adju sted decline in total aw ards— M a rch to A p r il— w as small
and m ost types con tin u ed to run substantially ahead o f a year ago.
C om m ercial re v iv e d fro m the M a rch slum p, and fa c to r y aw ards held
at the im p roved levels o f M arch .
R esidential in the first fo u r m onths
accounted fo r 4 7 .5 % o f total, com pared w ith 3 4 .4 % a year ago.

BANK

T

[

10]

JUNE 1950

MONTHLY REVIEW

FEDERAL RESERVE BANK OF RICHMOND
(All Figures in Thousands)

W HOLESALE TRADE
Sales in
A p ril 1950
com pared w ith
A p r il
M arch
1949
1950

L IN E S
A u to supplies (8 ) ....................
E lectrical ( 5 ) ............................
H ardw a re (1 2 ) ......................... + 4
Industrial ( 3 ) ............................
D ru gs (1 1 ) ................................
D ry goods (1 3 ) .................... .
G roceries (5 6 ) ............................
P aper (5 ) .....................................
T ob a cco ( 7 ) ......................... .......
M iscella n eou s (8 9 ) ............. .

— 5
+ 3

+ 2
+ 9
0
— 1
— 17
— 18
— 10
— 6
— 1
— 8

+16
0
— 1
— 1
+ 1
— 9
+16

D istrict totals (2 0 9 )...

+

Stocks on
A p ril 30, 1950
com pared w ith
A p r. 30
M ar. 31
1949
1950

7

—

+

2

0

Bills
+ 3

—

1
1
4
3

—
—
+

—
—
—

—
—

8
3
1

D iscou n ted

+ 1

T otal

L oans

U n collected

+

399

—

18,407

+

+

83

1,124,178
264,838
372,850
104,623
381,867
1,128,989

—

7
10,111
7,230
1.138
10,686
26,889

— 140,909
—
4,085
— 58,413
+ 81,570
— 159,981

—

9,705

— 159,233

269,979

32,053

+

22,371

+
+

811

—

2,551,890

-f

4,771

& Securities...
Item s

O ther A ssets ....
N um ber o f reportin g firm s in parentheses.

Chg. in A m t. F rom
4-12-50
5-18-49
16,383
+ 33,403
— ■ 2,005
+
5,507
—
18,388
+ 27,896

—

121

Industrial L oans ............
Gov. Secu rities, T o ta l...................
Bills .................................................
Certificates .....................................
N otes ..............................................
Bon ds ..............................................

+ 3
+ 4

—

8

3
1
2

M a y 17
1950
$1,117,201
13,350
1,130,551
4,690

IT E M S
T otal G old R eserves ....................
O ther R eserves ..............................
T otal R eserves ............................

Total A ssets

+
+
—

42,764
8,959

- 97,532

S o u r c e : D epartm en t o f C om m erce.
F ederal R eserv e N otes in C ir...

------------------ + + + ------------------R E T A IL F U R N IT U R E SA L E S
P ercen tag e com parison o f sales in
periods nam ed w ith sales in same
periods in 1949
A p ril 1950
4 M os. 1950

STATES

M a ryla n d (7 ) ......................................................... + 3
D ist. o f Col. ( 7 ) .............................. ...................... + 1 4
V ir g in ia (1 9 ) ......................................................... — 2
W est V ir g in ia ( 1 0 ) ......................... ...................... + 2 4
N orth C arolina ( 1 1 ) ............................................. + 1 0
S outh C a rolin a ( 9 ) ......................... ...................... + 2
D istrict (6 3 )

D e f.

A v a ila b ility

Item s...

Capital A ccou n ts

-+

+10
+ 8
— 3
+ 6
— 6
+17
+ 8

—

5

—

8

Sales, 4 m os. ’ 50 vs. 4 m os. ’ 49...

—

1

—

6

—
—

4
2

Stocks, A p r. 30, ’ 50 vs. ’ 49....

+

5

—

6

+

Total S e cu rity H o ld in g s ..........
U . S. T re a su ry B ills ................
U . S. T re a su ry Certificates ..
U . S. T re a su ry N otes .............
U . S. T re a su ry B onds ___________
O ther B on ds, Stocks & Secur.
Cash Item s in P rocess o f Col...
D ue F ro m Banks....

O ther
Cities

Dist.
Total

C u rren cy & C o in .....................
R eserve w ith F. R. Bank...

_ 2
_

—

5

+

20,101

+

21,975

62

—

2,193

+
+

51
2,933

+

4,771

—

97,532

*

+

—

3

T otal A ssets

+

1

+ 13

—

29

Instalm en t receivables A p r. 1
collected in A p r. ’ 50....................
M d.
—
—

Sales, A p r. ’ 50 vs. A p r. ’ 4 9 .......
S ales, 4 mos. ’ 50 vs. 4 mos. ’ 49...

8
6

+

46

13
—- 4
—- 2

Vai.
—
—

4

+ 14
41

18

17

D .C .

1
0

48

6

4
2

+

0
0
0 + 2

17
S.C .
— 4
—

1

D em and D e p o sits.................

T otal T im e D ep osits...........................
D eposits o f In d iv id u a ls ------------O ther T im e D e p o sits....................
Liabilities fo r B orrow ed M on ey...
A ll O th er L ia b ilitie s........
Capital A cco u n ts ..
T otal Liabilities .

A p ril
1949

F ifth D istrict S tates:
C otton consum ed ...............

361,923

302,229

3,466,559

3,139,270

C otton G row in g S tates:
Cotton consum ed ...................

643,513

537,319

6,060,371

5,510,827

1,235,847
5,837,676
598,502
1,449,180
5,869,427

1,782,941
102,631
164,163
234,728
1,127,533
153,886
233,173

6,688,902

___

+
+
—

+ 100,416
+ 40,402
+ 31,321
+ 31,759
+ 138,488
+ 40,831
16,613
+ 195,058
100,539
+ 19,751
+ 26,989

+
+

1,283
4,460
15,390
10,261
12,883
7,025

—

3,004
1,023
1,642

+

—

+

2,613

13,200

—

39,169
2,775

—

+
—
—

161,622*
65,340

779
940
3,530
5,290

453,611

-j-

10,782

+

2,130

+

3,677,809

+

7,599

242,894
+ ■

—

1,088
12,548
12,469
5,981
892
3,922

2,794,786
2,090,671
91,476
169,176
395,073*
48,390
621,301
574,109
47,192

+
+

1,204
1,804
600

+ 221,555
+ 138,672
+ 48,022
19,443
+ 50,630
3,674
+
+ 13,942
3,342
+
+ 10,600

7,675
20,629

+
—

7,675

—

233,418
3,677,809

+
+

+
—
—

+
+

1,496
1,304
7,599

5,250
2,486
+
+ 10,161
+ 242,894

------------------ + + + -----------

Cotton on hand A p ril 30, in

711,511

928 ,550 **
420,181
223,980
295,620

*Less reserves fo r losses on bad loans.

A u g . 1 to A p r. 30
1950
1949

A p ril
1950

1,759,305
7,369,348

Chg. in A m t. from
A p r. 12,
M a y 18,
1950
1949

*N et figures, reciprocal balances being elim inated.

COTTON CONSUMPTION AND ON HAND— BALES

U n ited S tates:
C otton consum ed .................
Cotton on hand A p ril 30 in

-------------

52,572

.....

D eposits o f U . S. G o v ’ t ........... .
D eposits o f State & L ocal G o v ’t ..
D eposits o f Banks ............................
C ertified & O fficers’ C h eck s......

9
42

18

W .V a . N .C .

Total

■+ + + -

1,522,701
7,330,646

$

O ther A ssets .....

—

5

O rd ers outstanding,
A p r. 30. ’ 50 vs. ’ 4 9 ...........
C u rren t receivables A p r. 1
collected in A p r. ’ 50.................

+

M a y 17,
1950

Total L oans ...................................
B usiness & A g r ic u ltu r e ........
Real E state L o a n s ............. ......
A ll O th er L o a n s .............. ........

D E P A R T M E N T S T O R E O P E R A T IO N S
(A ll fig u re s sh ow p e r c e n ta g e c h a n g e )

Sales, A p r. ’ 50 vs. A p r. ’ 49..—......

89,143
78,197
38,840
26,973
921

—

IT E M S

-------------------+ ♦ + --------------------

W ash .

33,348

—
—
—
+
+

51 REPORTING MEMBER BANKS— 5th DISTRICT
(All Figures in Thousands)

+ 8

Balt.

—

1,131
11,056
15,022
6,485
1,388

46,227
2,551,890

..

T otal Liabilities .

N um ber o f reportin g stores in parentheses.

R ich.

14,206

+
+

643

I N D I V I D U A L C IT IE S
B altim ore, M d . (7 ) ....................... ...................... + 3
W a sh in gton , D . C. ( 7 ) ...................................... + 1 4
R ichm ond, V a . ( 6 ) ......................... ...................... — 6
L yn ch bu rg, V a . ( 3 ) ............................................. — 11
C harleston, W . V a. ( 3 ) ...................................... + 2
C harlotte, N . C. ( 3 ) ........................................... + 9
Colum bia, S. C. ( 3 ) ....................... ...................... — 17

—

238,239

O ther Liabilities ..

+10
+ 8
+ 1
+14
+ 6
+15

......................... ............................. + 1 1

. $1,511,197
755,584
669,951
31,847
50,905
2,881

D eposits, T otal ..............................
M em b ers’ R eserves ..................
U . S. T reas. Gen. A cco u n t
..........................................
F o re ig n
O ther D eposits ............................

6,159,851

PRICES OF UNFINISHED COTTON TEXTILES
A p ril 1950
A v e ra g e , 17 co n stru ctio n s..
Prin tcloth s, average ( 6 ) ......
Sheetings, average ( 3 ) ........
T w ill ( 1 ) .............................D rills, average ( 4 ) ................
Sateen (1 ) ..............................
D u ck s, average ( 2 ) .............

M arch 1950

A p ril 1949

65.61
70.02
58.83
75.67
59.84
85.12
59.27

68.74
76.84
61.79
76.38
59.83
87.99
59.27

62.57
66.92
56.79
63.14
56.19
83.70
60.10

Spindles active, A p r. 30, U .S ...2 0 ,0 4 8 ,0 0 0 19,805,000

N o te : T h e above figures are those fo r the approxim ate quantities o f cloth
obtainable fro m a poun d o f cotton wT
ith adjustm ent fo r salable waste.

S o u rce : D epartm en t o f Com m erce.

S o u r c e : D epartm en t o f A g ricu ltu re .




[ii 1

FEDERAL RESERVE BANK OF RICHMOND

NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
Industrial and construction activity showed further gains in
A pril and M ay. Prices of many industrial materials and of
livestock and other farm products have advanced since midApril. Sales o f durable consumer goods have continued at ex­
ceptionally high levels. Common stock prices have risen further.

cline in awards for public construction. Residential awards
continued to increase sharply and were more than double the
dollar volume in A pril 1949.

INDUSTRIAL PRODUCTION

The B oard’s seasonally adjusted index of department store
sales in A pril was 292 per cent o f the 1935-39 average as com ­
pared with 293 in A pril 1949. Sales in the first three weeks of
M ay continued close to year-ago levels, despite low er apparel
sales.

DISTRIBUTION

Th e B oard’s index o f industrial production rose 2 points
further in A pril to 189 per cent of the 1935-39 average and in
M ay apparently showed a similar increase. T h e rise since
M arch has reflected mainly large gains in the iron and steel,
automobile, and machinery industries. Output o f other durable
goods and o f most nondurable goods has continued at advanced
levels. Minerals production, reduced somewhat in April, has

Retail sales o f radios, television sets, and other durable housefurnishings continued considerably above a year ago. Sales o f
automobile dealers were at new record levels in M ay. The
volume of instalment credit has continued to expand.

apparently recovered in May.

Shipments o f railroad revenue freight showed somewhat less
than the usual seasonal rise in A pril and the first half o f May,
mainly because of reduced loadings o f ore and coal. The v o l­
ume o f manufactured goods shipped continued to increase and
was substantially above that o f a year ago,

Steel output has been at record levels in A pril and M ay, and
during the week ending M ay 28 was scheduled at 102 per cent
o f present rated capacity. Automobile assemblies rose 10 per
cent in April, and in mid-M ay, follow ing settlement o f the labor
dispute affecting a m ajor producer, advanced about 20 per cent
further to a new peak rate.
Reflecting the recent general
strengthening o f demand for producers equipment as well as
the sustained high demand for household appliances, the B oard’s
machinery index advanced substantially further in A pril to 251
per cent o f the 1935-39 average, the highest since early 1949.

COMMODITY PRICES
The general level o f wholesale prices rose about 2.5 per cent
from m id-A pril to the third week in M ay. Prices o f livestock
and products, particularly hogs, rose sharply and grain prices
generally advanced. Reflecting a continuing strong business de­
mand, prices o f steel scrap, nonferrous metals, rubber, lumber,
and some other industrial materials increased further. W ool
prices continued to advance and in m id-M ay, cotton gray goods
prices, which had been declining, strengthened.

Output o f nondurable goods showed little change in A pril as
small declines in leather products, foods, paper, and petroleum
products were offset by gains in newsprint consumption and in
output o f paperboard, chemicals, and rubber products. Cotton
consumption and rayon deliveries were maintained in April,

Consumers’ prices rose .2 per cent further in A pril reflecting
mainly continued small advances in retail food prices.

follow in g small declines in M arch.
Coal output has declined considerably from the high levels
reached shortly after settlement o f the strike in early March.
Production o f crude petroleum, on the other hand, has increased
about 5 per cent from M arch to mid-M ay. Iron ore production,
which showed much less than the usual seasonal rise in April,
has increased sharply in May.

BANK CREDIT
Reductions in Treasury balances at the Reserve Banks during
most of A pril and again during the first three weeks o f M ay
supplied reserve funds to member banks. T h e Federal Reserve
continued to sell T reasury bonds during the period, and in M ay
also sold Treasury bills while purchasing notes and the shorter
maturities of certificates.

EMPLOYMENT
Employment in nonagricultural industries increased by 400,000
in April, after allowances for usual seasonal changes.

One-

Consumer and real estate loans continued to increase at banks

third o f the increase reflected a substantial gain in durable

in leading cities during A pril and the first half o f M ay. Busi­
ness loans declined further but the reduction appeared less than
might be seasonally expected.

manufacturing industries. There were also increases in trade,
transportation and construction and a large temporary expan­
sion o f Federal Census employment.

Unemployment declined to

3.5 million, 1 million below February but 500,000 above year-

SECURITY MARKETS

ago levels.

Common stock prices rose 3.5 per cent further in the first
three weeks o f M ay and were at the highest level since June
1946.
Yields on T reasury and high-grade corporate bonds
showed relatively little change. Early in the month the T re a s­
ury announced the offering of 13-month 1% per cent notes in
exchange for certificates maturing on June 1 and July 1.

CONSTRUCTION
Value o f construction contracts aw arded in April, according
to the F. W . D odge Corporation, continued at the record M arch
level, as a substantial increase in private awards offset a de­




[ 12 ]

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