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F E D E R A L R E S E R V E BANK O F RICHM OND C A L D W E L L HARDY. FEDERAL RESERVE AGENT General Business and Agricultural Conditions in the Fifth Federal Reserve District for the Month of March, 1920. [Compiled April 15, 1920] Since our report for February, there has been little change in commodity prices and wages, except in building materials which have steadily advanced. The public continued to purchase all goods freely during March, and retailers recovered the ground lost during the severe weather in February. In spite of improvement in foreign exchange, export business continued small. The feeling of unrest and uncertainty in commercial circles continues, and there are signs of a reaction against high prices on the part of the general public. There seems to be a wide-spread belief, based more on desire than on evidence, that the crest of prices has been reached, and that material reductions must come soon. No facts now in hand, however, justify hope for much decrease during the next few months. COLLECTIONS— Merchants are meeting their obligations when due and are discounting their bills freely. Dealers in agricultural implements report many sales to farmers for cash, and say that practically all notes are met when due. Failures reported for March totaled thirty-six, with liabilities of $464,017, as against thirty-six failures with liabilities of $457,495, in March, 1919, and forty failures with liabilities of $1,335,730 in February, 1920. BANKING OPERATIONS.— Bank clearings in March, 1920, increased 35.3% over the corresponding month last year, as shown in tabular form elsewhere in this report. Part of this increase is doubtless due to the collection of Federal income taxes, but bankers agree that most of the increase represents greater business activity. The legitimate needs of the District are being cared for by the banks, and some concerted effort is being made by them to restrict unnecessary loans. The wave of real estate activity continues, but this seems due more to the extreme difficulty in renting homes than to desire or disposition to speculate. LABOR.-—Reports indicate that there is enough labor available, but a scarcity of people who actually put in full time and give full value in work for the high wages paid them. As stated last month, negro laborers make enough in three or four days to live the entire week, and so do not work full time. Carpenters and brick masons continue dissatisfied and demand increases with nearly every new job. The march from the farms to the cities continues, and farmers are turning rapidly to machines in an effort to keep their fields under cultiva tion. Farm labor appears to be the only type which is really scarce, though what labor there is in the rural sections is probably more efficient and gives more honest service for wages paid than city and industrial workers. A report to us recently stated that in a certain city in the District some masons and carpenters are working on Sunday only, on which day double pay is given. CROPS.— During March cotton prices rose to the unprecedented figure of 4 3 / and a considerable portion of the farmers’ holdings were sold, but many planters are still holding and talk of 5 0 / a pound. This year’s crops will be late, due to much wet weather which in some sections has delayed planting three or four weeks. This delay will prove especially costly in boll weevil territory, where only the early cotton can reach maturity. The strikes of dock and railroad workers hit the trucking industry a severe blow, thousands of dollars worth of produce having spoiled before deliveries could be made. Truck crops were short and late because of the cold, wet spring. Indications point to considerable increases in tobacco and potato acreages for 1920. TOBACCO.— Manufacturers complain that they have thousands of dollars tied up in export goods for which there is no market. These export goods are lower grade than domestic consumers demand, and there fore the goods cannot be sold at home. Orders for home consumption are abundant. Several manufacturers are planning large additions to their cigarette making facilities. FERTILIZER.— Dealers are finding it difficult to secure sufficient fertilizer to supply farmers* demands, due principally to car shortage for moving both raw materials and completed product. The consumers’ demands are heavy, both because farmers have plenty of money and because of a tendency to more intensive cultivation as a partial remedy for the marked shortage of farm labor. COAL.— Coal production remains below normal, chiefly because of inability to secure cars to move output. In addition to the actual lack of sufficient cars owned by railroads, railroad strikes have tied up cars, and embar goes have blocked shipping at some points. Few mines have been able to run full time. Material increases in coal prices for fall are assured, the recent increase in wages to miners being given by producers as the reason. TEXTILES.— Large profits and capacity business continues in the textile field. Many mills are making extensive improvements and additions, especially in the mill villages. Textile mill stocks sell briskly at several times par value, and a number of plants have issued large stock dividends, some of these amounting to more than 100% on original capital. A South Carolina mill was recently sold for $600 per share, par $100, and another issued a 300% stock dividend, and paid 7% cash dividend on this stock. Mill operatives seem better satisfied than labor generally, and mill owners are spending money freely on settlement and community houses, athletic fields, libraries, welfare workers, schools, etc., in an effort to keep their help contented. CLOTHING AND SHOES.— No reduction in wholesale or retail prices in clothing or shoes is noticeable, nor do dealers feel hopeful that present high costs will be materially lowered in the near future. In spite of high prices consumers continue to purchase goods freely and no decided determination to practice economy is discernable, unless the over-all movement, which has just started is evidence of that purpose. Department of Labor figures show that clothing prices have advanced 64% in the past twelve months. HOUSING.— One of the most serious problems facing the city wage earners and medium salaried people is the matter of homes. Available houses are not sufficient to supply the demands, and further increases in rents already indicated in most of the larger cities of the District, will still further burden the workers. Numbers of low salaried people have been forced to purchase homes far beyond their means, and many hastily and poorly built houses have been purchased at high figures. The high prices of building material, together with actual shortages in stocks and the inefficiency and independence of labor, will very likely prevent a quick betterment in the housing situation. We print elsewhere in this report a comparative table of building opera tions in twenty-three cities for March, 1920, and the corresponding month last year, which shows an increase in total valuation of 165.9%. LUMBER.— Mills are operating from 50% to 75% capacity, wet weather and labor shortage being respon sible for short production. There is much complaint about labor, manufacturers claiming that workers are only 60% to 75% efficient. Railroad embargoes at terminals and junction points have delayed deliveries and cut down the supply of cars, thus tending to retard production. Lumber continues to bring high prices, with a marked tendency toward higher figures as the spring and summer building program gathers headway. Bricks are scarce, even at constantly increasing prices, and hollow tile manufacturers have jumped their quotations ahead of brick. FURNITURE.— Furniture manufacturers report inability to keep up with orders, due to scarcity of suitable lumber and labor that will work steadily. Furniture in demand today is of a higher grade than before the late war, and of course is sold at far higher prices. Few if any lines of manufactured goods have advanced in cost to the consumer as much as furniture. No signs of marked reduction are to be seen as yet. Manufac turers state that labor will not work full time while the present high wages continue. This applies just as much to skilled as to common labor. RETAIL TRADE.— Reports from representative department stores in the three largest cities in the District, indicate that business in February was not generally satisfactory, probably due to severe weather, but during March the increase in business done in dollars was 23.1% over the corresponding month last year, Baltimore making the largest gain with 42.3%. Combined sales for the first three months of 1920 increased 14.6% over sales during the corresponding months last year. Stocks on hand at the close of March, 1920, were 53.4% greater in money value than on the same date last year, and 18.1% greater than those on hand at the close of February, 1920. The percentage of average stocks at the close of each month since January 1, 1920, to average monthly net sales during the same period, was 408.2%, which indicates a well stocked position. These averages were made up from reports sent to us by several department stores in each city, all reports used being given in actual figures. We print herewith the figures for Baltimore, Richmond and Washington, and for the District as a whole. BUSINESS OUTLOOK FOR 1920 In March we sent ten questions to leading manufacturers and wholesalers in the Fifth District, asking opinions as to expected developments during summer and fall. Most of the answers received are instructive and carefully given, and we print this month a summary of replies, giving the idea set forth in each answer. The majority of the manufacturers expect no material price changes before 1921, but on the contrary expect present levels to be maintained at least another year. The feeling is general that production must be largely increased before any noticeable reductions in market prices can occur, and most of the replies indicate a belief that it will take from two to five years to bring production to the point at which the creation of a surplus will be possible. Several manufacturers feel that this condition will be brought about not so much by increased production in America as by importation of foreign goods, or at least a combination of these two. There seems small hope that exports from this district will be important for the next few months. Manufac turers believe that consumers will continue to purchase recklessly as long as wages are high, and the feeling is general that wages will continue high for several years, this condition being offset to some extent, however, by a belief that labor’s efficiency and dependability will steadily, though slowly, increase. BUSINESS C Do you expect any ma terial changesin gen eral price levels? 1. Organ manufacturer....................... What will be contributing causes to change? No. How long do you think our present prosperity will con tinue? At least two years. What causes will bring about a change? Overproduction, settled. and labor u 2. Canners............................................ Yes; lower. Less demand, and foreign competition. Through this year. Stoppage of speculative profits. 3. Automobile manufacturer.............. No. Slowing up of industry. Production should equal demanc 4. Box manufacturer........................... Generally, no. 5. Clothing manufacturer................... Decline in the fall. Cessation of Government support of Ten years. of labor unions. Moderation of speculation. 6. Shoe manufacturer....... .................. No. Growing conservation and deflation. Reduction of credits by Reserve b 7. Hosiery mill................ .................... No. 8. Textile manufacturer......... ............. Lower prices on raw Production will approach consumption Through this year. materials. Realization by public that every is too high. 9. Furniture manufacturer................. Yes. June, 1921. As long as people own bonds and gold. Long period. While high wages and under Increased production, lessened production continue. tion, and competing foreign lat Inflated prices and increased supply. Some time. Competition from foreign countric 10. Glass manufacturer......................... Yes, upward. Materials and wages are increasing. Till Europe is producing. Importations. 11. Hardware manufacturer................. Optimism and speculation. May be two years. Unrest, and the tax on er skill. 12. Lumber exporter.............................. Yes, lower. Hesitation of small buyer. Several years. Increased stocks on hand. 13. Lumber manufacturer.................... Yes. Tight money. As long as Federal Reserve system can carry the load. 14. Cotton oil mill................................. Yes; decline in fall. New crops and increased production. At least two years. Nothing. 15. Paper manufacturer........................ Radical advances. Consumption of reserve stocks. Several years. Curtailment in consumption or creased output. 16. Wholesale grocers............................ Decline. 17. Meat packer..................................... Tendency lower. No. Government should remove res tions on business. General complaint; desire by packers Gradual decline. to reduce; Government withdrawal from market. 18. Tobacco manufacturer.................... Little change. 1920. 19. Trunk and bag maker.................... No. Release of warehoused stores. 20. Wagon manufacturer...................... Slight changes. Prices should decline as production We are not really prosperous. increases. Less than twelve months. Absence of foreign buying. Tight money, lack of foreign trade resulting surplus at home. Curtailed consumption. Increased production. 21. Wholesale dry goods........................ No. Three to five years. Increased supply, less demand. 22. Peanut products.............................. Two or three years. Increased production. No. DK FOR 1920 uld we experience busi esdepression, what classes 1be least affected? Do you believe the labor situation wil improve as regards stability and effi ciency? iers in luxuries. Yes. i I What will be the trend of wages in 1920? J Possibly down. you expect you anticipate an Do What is your opinion of the outlook Do public extrava attempt at price cut gant as regards foreign trade? purchasing ting in your goods? to continue? Excellent. No. Yes. I lers in necessities. Not until demands for No change. labor lessen. Less exports, even if exchange improvesi Yes. Yes. slasses will suffer. Yes; Cannot be worse. High for at least twelve months. Depends upon exchange. No,not before July, 1921. Yes. 1mills. Yes. Decline, followed by slow recovery. No. Yes. led labor. Yes, if G o v e rn m e n t Stationary. allows manufacturers to insist upon effi ciency. Less exports. Yes, at end of year. Yes. i and wearing apparel alers. Yes. Stationary. Unfavorable. No. Yes. Upward. Poor. An exchange question. No. Yes. Little change. Unfavorable. No. Yes. Unfavorable. Not to any extent. No. Stationary. te collar man and middle Not soon. isses. or, and all conservatives. Yes. would suffer. Eventually, soon. but not Upward. Eventually, but not yet Upward. Very good. When we learn to say, Five to ten per cent, higher. "N o.” 3umers ant. and small mer- Yes. Steady. No. Yes. To slight extent. Yes. Depends on Government’s attitude Considerable free sel Yes, labor; no, toward merchant marine. ling. salaried man. Don’t know. Yes. ding trades. Notforlaboruntil wages fall. tie of independent means. Yes; gradually. Stationary. b earners. Yes. Upward. No. Yes. Tendency upward. Depends upon supply and demand. Finally, but not soon. Steady. Outlook bad. No. Yes. Some increase. Unfavorable. Already going on. Yes. aers. ers of necessities, including Very slight. )acco. Favorable in South America; gradual Probably in the fall. improvement in Europe. Yes. Yes. ilers most affected. N o; not soon. Reduction in 1921. Will take our surplus. Not during 1920. No. •ied and creditor classes. Yes. Wages will follow prices. Normal for several years. No. Yes. :s and farmers. Yes. , clothing, cotton and Yes, slowly. ilders’ supply dealers. Higher. Unfavorable. No. Yes. Slight increase. Increased imports, decreased exports. Yes. Yes. CLEARINGS For Month of March No. 1920 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Increase or Decrease CITIES 1919 Per cent, of Increase or Decrease Asheville, N ..C .. Baltimore, M d .. Charleston, S. C .. Charlotte, N. C .. Columbia, S. C ...... Frederick, M d........ Greensboro, N. C . . Greenville, S. C ... =. Hagerstown, M d___ Huntington, W. Va. Newport News, Y a .. Norfolk, V a...... Raleigh, N. C ... Richmond, Y a .......... Washington, D. C. Wilmington, N. C .. $ 6,095,215 412,330,661 22,692,000 49,882,436 17,542,423 2,722,958 6,080,453 13,876,237 3,920,482 t8,458,125 3,812,447 46,628,615 8,010,298 286,643,935 79,667,899 5,396,377 $ 4,120,393 330,738,055 13.999.000 19.100.000 8,902,639 2,467,973 3,740,227 5,657,724 2,704,344 1,974,822 81,592,606 8,693,000 3b,782,436 8,639,784 254,985 2,340,226 8,218,513 i; 216,138 47.9 24.7 62.1 161 97 10.3 76.3 145.3 45 4,683,246 33,808,292 3,676,376 213,532,709 62,985,853 3,581,801 *870,799 12,820,323 4,333,922 73,111,226 16,682,046 1,814,576 *18.6 37.9 117.9 34.2 26.5 50.7 Total.. $965,302,436 $713,698,632 $251,603,804 35.3 No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 BUILDING OPERATIONS FOR THE MONTH OF MARCH, 1919 AND 1920 Permits Issued New Construction No! CITIES New Alterations Repairs 1920 1919 17 458 38 46 18 28 328 38 21 10 29 6 15 5 1920 1919 1920 18 1,084 9 77 869 15 87 6 86 21 5 Per Increase or cent. Decrease of Inc. No. Total or Valuation Dec. 1919 1920 $ 58,337 3,117,720 289,637 97,625 281,325 154,400 277,992 , 47,900 11,788 679,597 87,385 80,000 67,390 12,815 32,113 17,500 $ 16,020 325,002 16,435 88,763 2,450 18,784 5,930 2,315 76,600 53,800 3,550 94,280 7,300 654,600 22,700 3,700 45,285 40,000 13,105 9,450 320 36,455 13,776 733,491 60,000 560,552 44,220 16,565 4,350 697,035 20,300 6,375 82,310 10,000 339,474 10,520 5,100 346,107 7,500 11,125 69,100 4.500 85,654 5,825 375 150 132,550 1.500 56,250 42,225 17,285 246,630 9,555,409 | $3,409,581 $1,696,302 $821,828 $7,020,302 1919 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Asheville, N. C .... Baltimore, M d .. . . Charleston, S. C . . Charleston, W. Va Charlotte, N. C ... Columbia, S. C__ Cumberland, Md.. Durham, N. C . ... Frederick, Md...... Greenville, S. C ... Greensboro, N. C. High Point, N .C .. Huntington, W.Va Lynchburg, V a.... Norfolk, Va.......... Parkersburg, W.Va Richmond, Va...... Roanoke, Va......... Spartanburg, S. C. Staunton, Va........ Washington, D. C. Wilmington, N. C. WinstonSalem.. . ,N. C Total.. 17 ... .jN.R. 41 ' 36 26 81 8 75 6 11 11 14 82 21 7 3 N.R. 18 25 10 5 15 22 7 20 118 410,300 174,750 50,125 251,355 25,450 574,561 25.000 529,005 146,850 250,140 27.000 2,381,097 106,900 277,940 8 68 85 74 122 4 197 10 47 76 19 3 136 7 10 3 401 2 64 38 3 1 251 2 50 25 98 37 1,000 11,946 1,619 j 1,426 Decrease. Not included in Total. 68 14,065 4,000 $ 37,829 136.2 1 2,767,721 275.5 2 208,517 200.8 3 *67,438 *39.9 4 256,770 367.7 5 162,801 515.2 6 253,054 665.2 7 37,535 189.4 8 320 9 356,090 392.8 10 130,726 226.2 11 46,575 1312.0 12 157,075 166.6 13 20,700 186.1 14 *145,720 *18.1 15 *29,500 *45.7 16 222,273 34.4 17 96,805 193.4 18 243,720 1438.7 19 27.600 613.3 20 1,897,619 228.7 21 92.600 470.6 22 335.4 23 165.9 CONDITION OF EIGHTY-TWO SELECTED MEMBER BANKS, FIFTH FEDERAL RESERVE DISTRICT (In thousands of dollars) March 5, 1920 April 9, 1920 Total United States Securities owned___ . $ Loans secured by U. S. war obligations......................................... Loans secured by stocks and bonds other than U. S. se curities ..................................... ................................ ........ All other loans and investments........................ Reserve balance with Federal Reserve Bank.............. Net demand deposits on which reserve is computed.. Time deposits........... ................. * 88,141 30,707 $ 108,852 353,190 36,425 354,795 100,850 90,536 33,157 ♦April 1I> 1919 $ 108,210 351,559 37,418 364,418 100,314 147,096 38,217 371,980 35,126 324,536 79,051 Eighty-three banks. FIGURES ON RETAIL TRADE as indicated by reports from several Representative Department Stores in each city for the month of March, 1920 [Compiled by the Federal Reserve Bank of Richmond] 1. A. Percentage of increase in net sales during March over same month last year: Baltimore.. Richmond___ Washington......... District average......... B. ............ ... 42.3% 24.0% 9.8% 23.1% Percentage of increase in net sales from January 1 through March 31, 1920, to net sales during same period last year: Baltimore... Richmond........ Washington_____ District average.. 2. A. 28.3% 16.2% 5.2% 14.6% Percentage of increase in stocks at close of March, 1920, over stocks at same date last year: Baltimore......... Richmond........ Washington......... District average___ B. .................... ..... . 58.8% 36.3% 57.9% 53.4% Percentage of increase in stocks at close of March, 1920, over stocks at close of February, 1920: Baltimore___________________________________________________________________ 32.8% Richmond.......................................................................................................................... 12.8% Washington......... .............................................................................................................. 11.2% District average... 18.1% 3. Percentage of average stocks at close of each month since January 1, to average monthly net sales during same period: Baltimore.. . . Richmond..... ................................................................................................................ . Washington.................................................................................................................... District average. . . . . 372.3% 453.4% 396.5% 408.2% FEDERAL RESERVE BANK OF R I C H M O N D WEEKLY STATEMENT A t Close of Business Friday, March 12, 1920. RESOURCES Gold Coin and Certificates..........................................................................................................................................................$ Gold Settlement Fund—Federal Reserve Board...................................................................................... ............................. Gold with Foreign Agencies........................................................................................................... ........... ..................... ........... 2,362,000 31,268,000 5,526,000 TOTAL GOLD HELD BY B A N K .................................... ............................................................................... . . ........... $ 39,156,000 Gold with Federal Reserve Agent............................................................................................................ .................. ............ $ Gold Redemption Fund....................................................................................................................... ......................... 28,646,000 7,143,000 TOTAL GOLD RESERVES..................................................................................................................... . . ........... . $ 74,945,000 Legal Tender Notes, Silver, etc.......................................................................................................... ........ ............................$ 320,000 TOTAL RESERVES.................................................................................................. ........................ ................................$ 75,265,000 Bills Discounted—Secured by Government War Obligations............................................................................ ............... $ Bills Discounted—All Other.................. .................................................................................................................................... Bills Bought in Open Market............................................................................................... ........ ................ ........................... 80,752,000 27,235,000 9,428,000 TOTAL BILLS ON H A N D ................................................................................................................................................ $ 117,415,000 U. S. Government Bonds.............................................................................................................................................................. $ U. S. Certificates of Indebtedness................................................................................................................................... ......... 1,235,000 12,260,000 TOTAL EARNING ASSETS.............................................................................................................................................$ 130,910,000 Bank P r e m i s e s ........... . ........................................................ .................................................................................................$ Uncollected Items and Other Deductions from Gross Deposits........................................................................................ 5% Redemption Fund against Federal Reserve Bank Notes............................................................................................ All Other Resources.. .......... ............. .................................. — ............................................. ....................................... 580,000 51,027,000 451,000 785,0000 TOTAL RESOURCES.........................................................................................................................................................S 259,018,000 LIABILITIES .7 Capital Paid in............................................................................................................................................. .................. ............ $ Surplus............................................... ............................................................................................................. .......... .................... TOTAL C A P IT A L .................................................................................................................. ............................................ $ 4,544,000 5,820,000 10,364,000 Government Deposits............................................................................................................................................ ...................... $ Due to Members—Reserve Account...................................................................................................... ................ ............. .. Deferred Availability Items.......... ....................................... .................................................................................................... All Other Deposits including Foreign Government Credits............................................................................................... 1,927,000 61,916,000 42,159,000 3,591,000 TOTAL GROSS DEPOSITS............................................................................................................................................ $ 109,593,000 Federal Reserve Notes in Actual Circulation........... .•••.*:........................................................................................... * •* ^ Federal Reserve Bank Notes in Circulation—Net Liability.............................................................................................. All Other Liabilities...................................................................................................................................................................... 127,100,000 10,590,000 1,371,000 TOTAL LIA BILITIES................................................................................................................................. ......................$ 259,0183)00 FEDERAL RESERVE NOTES OUTSTANDING AND IN ACTUAL CIRCULATION Federal Reserve Notes Outstanding............................................................................................ ................................. .......... $ Federal Reserve Notes Held by Bank........................................................................................... ......................................... 132,946,000 5,846,000 Federal Reserve Notes in Actual Circulation........................................................................................................................ $ 127,100,000 Total Amount of Bills Discounted and Bought for the Week Ending March 12, 1920........................................ . $ Due U. S. Treasurer by Member Depositary Banks............................................................................................................. 70,643,000 922,000 GEORGE J. SEAY, Governor.
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