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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS W ILLIAM W. HO XTO N, CHAIRMAN AND FEDERAL R ESER VE AGENT RICHMOND, VIRGINIA Seasonal dullness marked February business in the Fifth reserve district, and in some lines the recessions from recent activity were greater than can be ex plained by seasonal trends alone. Rediscounts held by the Richmond reserve bank declined between the mid dle of February and the middle of March, an unseasonal development at a time when increased demands for agricultural loans usually cause a rise in borrowing by banks in rural sections. City member banks slightly increased their borrowing at the reserve bank to counteract deposit withdrawals by correspondent banks in agriculutral sections and by merchants for use in discounting bills for spring merchandise. Debits to individual accounts figures for four weeks ended March 9th were 6.2 per cent below total debits during the pre ceding four weeks ended February 9th, and were also 9.9 per cent below aggregate debits for the correspond ing period ended March 10, 1926. Business failures were more numerous and total liabilities involved were greater in the Fifth District in February than in any other February since 1922. Unemployment spread con siderably between the middle of February and the mid dle of March, and in some localities reached rather serious proportions. Construction work provided for in permits issued in February was less than that pro vided for in February 1926 permits, and for the fifth consecutive month, total valuation figures for permits issued fell below the figures for the same month of the preceding year. The outlook in the textile field improved during Feb ruary and early March, and practically all Fifth Dis trict mills are running full time, with a larger volume of forward orders on the books than they have had in many months. Increased domestic cotton consumption and higher exports of cotton in comparison with the same period in 1926 caused spot cotton prices to rise slightly during the past two months, and this firmness in raw material prices had a beneficial effect upon the textile industry. Retail trade in February was mod erate only, but was probably up to seasonal average for years in which Easter occurs as late as it does this year. Present indications suggest a favorable agri cultural season, but it is too early to put much de pendence upon crop prospects. SAVING DEPOSITS — Deposits in thirteen mutual savings banks in Baltimore increased last month, rising from a total of $161,231,987 at the end of January to $161,981,216 at the end of February. On February 28, 1926, the same reporting banks had aggregate de posits of $152,665,800, indicating an increase during the past year of slightly more than 6 per cent. On the other hand, time deposits in sixty-seven reporting member banks in the Fifth District declined last month, dropping from $219,122,000 on February 9th to $214,489,000 on March 9th. Time deposit figures in com mercial banks do not represent as large a percentage of actual savings as mutual saving bank deposits, however, the commercial bank deposits containing a considerable volume of temporarily idle funds in ex pectation of withdrawal for commercial use. MARCH 31, 1927 RESERVE BANK OPERATIONS — Rediscounts for member banks at the Federal Reserve Bank of Richmond declined from $23,658,000 on February 15th to $20,313,000 on March 15th, both this year, a move ment contrary to seasonal experience. In most years discounts increase in the Fifth District between the middle of February and the middle of March, due to agricultural demands incident to fertilizer purchases and other expenses incurred in connection with crop planting. This year all reports indicate a marked fall in fertilizer tonnage purchased by the farmers of the District, and this probably accounts for the unusual reduction in the volume of rediscounts. Total bill holdings of the Federal Reserve Bank of Richmond declined during the month under review from $33,840.000 to $30,015,000, the decrease being partly due to a reduction of approximately $500,000 in the hold ings of ban k ed acceptances purchased from member banks and in the open market. The actual circulation of Federal Reserve notes dropped from $74,493,000 on February 15th to $72,542,000 on March 15th, a seasonal decline, and member bank reserve deposits registered only a daily fluctuation during the four weeks, falling from $69,175,000 to $68,920,000 between February 15th and March 15th. The several changes mentioned did not materially affect the Bank’s cash reserves, which rose from $110,956,000 at the middle of February to $111,173,000 at the middle of March. The ratio of cash reserves to note and deposit liabilities combined rose a little over 3 points during the month, from 74.89 per cent on February 15th to 77.99 per cent on March 15th. Between March 15, 1926, and March 15, 1927, the volume of rediscounts held by the Federal Reserve Bank of Richmond dropped approximately 56 per cent, de clining from $46,575,000 a year ago to $20,313,000 on the 1927 date. Total bill holdings of the Richmond bank also declined, falling from $57,040,000 to $30,015.000 during the year. The volume of Federal Re serve notes in actual circulation stood at $78,508,000 on March 15th last year, but dropped to $72,542,000 on March 15, 1927. Member bank reserve deposits rose during the year from $67,046,000 to $68,920,000. The lessened demand for Reserve bank credit this year re sulted in increased cash reserves of the Federal Reserve Bank of Richmond from $92,570,000 on March 15, 1926, to $111,173,000 on March 15th this year, and the ratio of cash reserves to note and deposit liabilities combined rose from 63.34 per cent to 77.99 per cent during the same period. CONDITION OF SIXTY-SEVEN REPORTING MEMBER BANKS IN SELECTED CITIES ITEMS March 9, 1927 1. Total Loans and Discounts (including all rediscounts) ...................................... 2. Total Investments in Bonds and Se curities ................................................... 3. Reserve Balance with Federal Reserve Bank ....................................................... 4. Cash in Vaults........................................... 5. Demand Deposits ..................................... 6. Time Deposits ........................................... 7. Borrowed from Federal Reserve Bank.— February 9, 1927 March 10, 1926 $ 516,929,000 $ 520,674,000 $ 520,883,000 140.599.000 137.618.000 126.981.000 41.847.000 13.839.000 379.938.000 214.489.000 10.844.000 39.374.000 13.686.000 384.988.000 219.122.000 9,748,000 41.423.000 13.969.000 370.718.000 206.604.000 22.101.000 F ig u re s in the above table show the principal item s of condition reported by sixty-seven identi cal m em ber banks on three dates, M arch 9, 1927, F e b ru a ry 9, 1927, and M arch 10, 1926, thus affordin g data for a com parison of the latest available figures w ith those of the preceding month this y e a r and the corresponding month last y ear. The figures are from all m em ber banks in thirteen leading cities of the F ifth R eserv e D istrict. C om paring the changes in the item s betw een F e b ru a ry 9th and M arch 9th, both this y e a r, total loans and discounts show a decrease of $3,745,000 during the four w eeks. T he rep ortin g banks in creased their investm ents in bond and securities b y $2,981,000 betw een F e b ru a ry 9th and M arch 9th, and added $2,473,000 to their reserve deposits at the Fed eral reserve bank. Cash in vau lt changed little during the month, risin g by $153,000. D eposits declined m aterially, p robably due chiefly to w ith d raw als by correspondent banks in agricu ltu ral sections and to discounting b y city m erchants of bills fo r spring m erchandise. Dem and deposits declined $5,050,000 and tim e deposits dropped $4*633,000 during the period under review . T h e several changes in the principal item s necessitated an increase in rediscounts at the reserve bank, w hich rose $1,096,000 during the month. T o tal loans and discounts for custom ers reported by the sixty-seven m em ber banks w as $3,954,000 less on M arch 9th this y e a r than on M arch 10th a y e a r ago, w hile investm ents of the rep ortin g banks in bonds and securities rose $13,618,000 during the year. A g g re g a te reserve balances of the rep o rt ing institutions at the F ed eral reserve bank rose $424,000, w hile cash in vau lt decreased $130,000, both daily fluctuations m erely. Dem and deposits rose $9,220,000 during the y e a r under review , and tim e deposits increased by $7,885,000. In creased deposits, w ith a decline in the demand fo r credit b y custom ers, enabled the rep ortin g banks to reduce the volum e of b o rrow in g at the reserve bank by $11,257,0 0 0 betw een M arch 10, 1926, and M arch 9, 1927, a reduction of ap p roxim ately 51 per cent. DEBITS TO INDIVIDUAL ACCOUNTS TOTAL DEBITS DURING THE FOUR WEEKS ENDED CITIES March 9, 1927 Asheville, N. C................................................ Baltimore, Md.................................................. Charleston, S. C.............................................. Charleston^ W. Va.......................................... Charlotte, N. C................................................ Columbia, S. C................................................ Cumberland, Md............................................. Danville, Va..................................................... Durham, N. C.................................................. Greensboro, N. C............................................. Greenville, S. C................................................ Hagerstown, Md.............................................. Huntington, W. Va.......................................... Lynchburg, Va.................................. ............... Newport News, Va......................................... Norfolk, Va...................................................... Raleigh, N. C.................................................. Richmond, Va................................................... Roanoke, Va..................................................... Spartanburg, S. C........................................... Washington, D. C........................................... Wilmington, N. C............................................ Winston-Salem, N. C....................................... $ 34,103,000 365,490,000 27,141,000 32,359,000 47,686,000 20,783,000 7,826,000 8,906,000 24,412,000 22,770,000 20,801,000 9,409,000 22,566,000 17,669,000 9,453,000 67,856,000 19,237,000 119,744,000 25,654,000 11,713,000 211,068,000 17,567,000 34,091,000 Totals ............................................................... $ 1,178,304,000 February 9, 1927 $ 30,765,000 383,971,000 24.921.000 36.300.000 46.624.000 18.286.000 7.799.000 12,668,000 23.618.000 23.230.000 21.135.000 9.849.000 23.749.000 18.719.000 9.854.000 72.889.000 32.405.000 136,848,000 26,846,000 13,867,000 224,046,000 18,360,000 39,147,000 $ 1,255,896,000 March 10. 1926 $ 29,044,000 409,612,000 25.570.000 37.209.000 46.439.000 16.244.000 7.956.000 10.068.000 27.332.000 25.597.000 24.609.000 9.507.000 24.391.000 20.862.000 10.109.000 74.179.000 45.671.000 141,094,000 26,709,000 14,248,000 221,032,000 21,317,000 38,515,000 $ 1,307,314,000 The accom panying table show s total debits to individual, firm and corporation accounts at clear ing house banks in tw en ty-th ree o f the leading cities of the F ifth Fed eral reserve district during three 2 periods of four w eeks each, ended M arch 9, 1927, F eb ru ary 9, 1927, and M arch 10, 1926. Debits figures include all checks draw n again st depositors’ accounts, and th erefore form one of the best barom eters of business activity. The total of debits during the four w eeks ended M arch 9, 1927, am ounted to $1,178,304,000, com pared w ith $1,255,896,000 during the preceding four w eeks ended F e b ru a ry 9th, a decline during the m ore recent period of $77,592,000, or 6.2 per cent. Seventeen of the tw en ty-th ree cities reported low er figures for the period ended M arch 9th, w hile increased figures w ere reported by A sh eville, C h arles ton, S. C., Charlotte, Columbia, Cum berland and Durham . The four larg e st cities, Baltim ore, W ash ington, Richm ond and N orfolk, showed declines. In com parison w ith the four w e e k s’ period ended M arch 10, 1926, in which total debits in the re porting cities am ounted to $1,307,314,000, the corresponding period this y e a r w itnessed a recession to $1,178,304,000, a decline of $129,010,000, or 9.9 per cent, a considerable part of which w as prob ably due to decreased ac tiv ity in construction w o rk this y ear in m ost of the reportin g cities. A low er price level this y e a r also reduced the am ount of debits to some extent. T he decline w as quite ge n eral throughout the F ifth R eserv e D istrict, only four cities— A sheville, Charleston, S. C., Charlotte and Colum bia— attain ing higher figures during the 1927 period than in the corresponding four w eeks a y ear earlier. BUSINESS FAILURES— In com m enting on the business m ortality record for F e b ru a ry 1927, D un’s R ev iew for M arch 5th says, “ A seasonal decline in the number of failures in the U nited S tates in variab ly begins in F eb ru ary , and the total reported for last month w as 2,035. Th is is 17.4 per cent below the 2,465 com m ercial defaults of Ja n u a ry , but a part of this substantial decrease is accounted for by the fact that F e b ru a ry is the shortest month of a year, and is made still shorter by holidays. C om paring w ith the 1,801 insolvencies of F eb ru ary 1926, an increase of 13.0 per cent appears, although in this connection some allow ance should be made for the larg e r number of firms and individuals now engaged in business. L ik e the num ber of failures, last month’s liabilities of $46,940,716 show a fallin g off from the $51,290,232 of Ja n u a ry , the reduction being 8.5 per cent. On the other hand, the am ount for F e b ru a ry exceeds by 37.4 per cent the $34,176,348 of the corresponding month of 1926. T h ere w ere m ore large defaults last month than a y ear ago, those for $100,000 or m ore of indebted ness in each case num bering 54, again st 44 in the earlier year, and the liabilities of last m onth’s large insolvencies approxim ate $25,200,000, as com pared w ith only about $13,500,000 for such failures in F e b ru a ry 1926. The defaults of unusual size supply 53.7 per cent of last m onth’s a g g re g a te indebted ness, w hile in F eb ru ary last y ear the large insolvencies provided 39.6 per cent of the total liabilities of all failu res.” In the F ifth D istrict, F e b ru a ry failures numbered 156, com pared w ith 170 in Ja n u a ry this y ear and 11 8 in F eb ru ary 1926, w hile F eb ru ary 1927 liabilities of $4,248,597 exceeded the $3,533,544 of Ja n u a ry 1927 and the $1,845,307 of F eb ru a ry last year. Both the number of failures and the total of lia bilities involved exceeded those of any F eb ru ary since 1922, and liabilities w ere the highest for any month since M ay 1925. LABOR— U nem ploym ent has spread furth er since the middle of F eb ru ary , and in some of the larger cities an unusual num ber of w o rk ers are idle. The volum e of construction w o rk under w a y is sm aller than at this time in 1926, and this fact together w ith increased efficiency of w orkm en who are em ployed has reduced the demand for both skilled and unskilled labor in all lines either d irectly or indirectly connected w ith building. There is a m arked surplus of clerical w o rk ers in all the cities, and the supply of dom estic servan ts is considerably gre ater than the demand. F arm labor is som ew hat m ore abundant than in recent years, as is nearly alw ays the case when lack of em ploy m ent in the cities drives some unskilled laborers back to the rural districts. F a c to ry em ployees are b etter em ployed than other groups, especially in textile and tobacco industries, although during the latter part of F e b ru a ry and ea rly M arch a few cotton mills operated on a short tim e schedule. The threat of trou b le in union coal m ining regions has kept the demand for bitum inous coal at an un usu ally high level for this season, and W est V irgin ia m iners have th erefore continued to have steady em ploym ent, in spite of the settlem ent of the B ritish coal strike. On the w hole the w eath er in the F ifth D istrict has been favorable for outside w ork since the middle of F eb ru ary, and laborers w ith jobs w ere able to put in reg u lar hours. COAL— The total production of bitum inous coal during the month of F e b ru a ry is estim ated by the Bu reau of M ines, D epartm ent of Comm erce, at 52,904,000 net tons, and total production during the present coal y ear to M arch 12th — approxim ately 292 w orkin g d ays— am ounts to 566,474,000 tons, the highest output of any recent year. D aily production in F e b ru a ry w as about 1.5 per cent under that of Ja n u a ry , a seasonal decline, but the decrease w as som ew hat less m arked than norm ally occurs at this season, probably due to the building up of reserve stocks of coal again st possible trouble in the unionized fields afte r the expiration of present w orkin g agreem ents betw een mine ow ners and m iners. R eta il yard s have larg e stocks on hand, and m any industrial plants have accum ulated re serve piles of fuel sufficient to run them from six ty to ninety days. R eta il prices have dropped slig h tly in m any y ir d s during the past month as the demand from consum ers lessened w ith the ap proach of m oderate w eather. 3 TEXTILES— Th e concensus of opinion indicates some im provem ent in outlook in the textile field during the past month. A larg e volum e o f goods is m oving into trade channels, and w hile m ost of it m oves on short orders, the m ills have m ore future d elivery business booked than they have p re viou sly had in recent months. Spot cotton prices did not fluctuate w idely betw een the middle of F eb ru a ry and the middle of M arch, and the m ills w ere able to hold their quotations firm. In some cases jobbers and retailers who postponed orders have been obliged to p ay prem ium s for im m ediate or short tim e d elivery of u rg en tly needed goods. A few m ills operated on reduced schedule during part of F e b ru a ry and into M arch, due to an accum ulation of m anufactured goods in their w arehouses, but these goods have p ractically all been m oved and the m ills have resum ed full tim e operations. F ifth D istrict m ills consumed 249,638 bales of lint cotton in F eb ru ary , of which N orth Carolina m ills used 137,094 bales, South Carolina m ills 101,595 bales, and V irg in ia m ills 10,949 bales. The F e b ru a ry figures com pare w ith 255,398 bales consumed during the longer month of Ja n u a ry this y ear and 233,236 bales used in F e b ru a ry 1926. Consum ption in the F ifth D istrict in F eb ru a ry totaled 42.6 per cent of N ational consum ption, com pared w ith 4 1.1 per cent in 1926 and 39.9 per cent in 1925. BUILDING OPERATIONS FOR THE MONTHS OF FEBRUARY 1927 AND 1926. Permits Issued CITIES 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 New Repairs 1927 1926 327 Baltimore, Md. 15 Cumberland, Md... 6 Frederick, Md. 18 Hagerstown, Md... 12 Danville Va......... 38 Lynchburg, Va.... 61 Norfolk, Va.......... 6 Petersburg, Va..... 101 Richmond, Va. 88 Roanoke, Va. 7 Bluefield, W. Va... 76 Charleston, W. Va. 12 Clarksburg, W. Va Huntington, W.Va. 37 12 Parkersburg,W.Va 28 Asheville, N. C..... 46 Charlotte, N. C.... 40 Durham, N. C. 55 Greensboro, N. C. 55 High Point, N. C... 23 Raleigh, N. C....... 15 Salisbury, N. C.... Wilmington, N. C. 7 85 W inston-Salem, N. C. 18 Charleston, S. C ... 18 Columbia, S. C..... 11 Greenville, S. C. 21 Spartanburg, S. C. Washington, D. C. 233 New Construction 274 18 2 9 12 19 93 6 112 82 7 39 7 74 15 91 45 35 45 59 50 16 7 83 11 13 8 12 124 1927 886 3 3 5 21 27 69 6 62 34 8 14 10 1 7 42 17 14 20 5 11 2 5 24 18 35 30 16 252 1926 1927 1926 816 $ 2,191,200 $ 1,616,160 1 75,390 33,495 0 27,330 7,700 9 30,530 55,995 11 60,225 462,885 26 96,101 79,729 36 181,275 210,350 7 9,430 17,504 63 454,625 1,486,764 21 241,532 198,941 3 20,700 23,090 10 156,738 133,481 6 9,275 18,730 4 193,420 219,635 3 21,550 44,850 26 151,105 839,475 14 263,234 221,440 11 179,725 243,510 29 300,556 995,750 6 158,300 154,600 7 80,125 148,264 5 60,145 52,700 7 11,350 195,500 32 540,350 224,300 23 32,860 17,635 39 133,500 38,440 22 158,800 39,800 23 14,610 70,275 230 3,645,925 3,232,765 Totals......... 1,471 1,368 1,647 1,490 $ 9,499,906 $11,083,763 Alterations 1927 $ 462,360 $ 1,375 1,500 3,325 5,862 29,655 46,796 2,935 82,896 11,200 48,300 95,750 8.085 500 10,750 22,430 314,675 11,520 9,570 4,800 3,950 675 9,800 23,475 5,405 6,230 16,730 3,285 242,820 $1,486,654 1926 Increase or Per Cent Decrease of of Increase 0 Total or 2 Valuation Decrease 688,384 $ 349,016 415 42,855 0 21,130 — 3,610 25,750 9,115 — 405,913 23,499 22,528 31,439 — 13,718 13,080 — 18,219 48,155 — 997,398 49,076 4,715 1,300 44,610 5,950 113,057 1,750 — 3,120 6,500 — 32,215 2,350 — • 14,900 43,835 — 709,775 17,385 339,084 31,275 — 83,540 — 706,176 20,552 12,050 — 3,550 28,050 — 92,239 6,700 1,420 5,800 — 180,150 15,306 324,219 7,867 12,763 7,920 93,370 12,350 123,380 — 56,245 3,865 324,340 331,640 15.1% 126.4 274.4 — 43.2 — 86.0 21.8 — 5.7 — 59.6 — 65.0 24.1 182.9 81.1 — 15.2 — 14.2 — 31.6 — 80.4 142.0 — 30.4 — 69.5 — 2.1 — 52.3 2.4 — 89.5 135.3 50.0 201.4 236.6 — 75.9 9.3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 $1,377,557 —$1,474,760 — 11.8% — Denotes decrease. NOTE— The figures in the above table reflect the amount of work provided for in the corporation limits of the several cities, but take no account of suburban developments. Construction w o rk provided fo r in perm its issued in F eb ru a ry by building inspectors in tw en tynine leading centers of the F ifth R e se rv e D istrict exceeded the volum e of w o rk provided for in p er m its issued in F e b ru a ry 1926 in the num ber of p rojects, but fell below last y e a r ’s figures in total esti-* m ated valuation fo r the w ork. P erm its fo r new w o rk issued in the 29 cities in F e b ru a ry num bered 1,4 7 1, w ith estim ated valuation of $9,499,906, com pared w ith 1,368 perm its estim ated to cost $11,0 8 3,76 3 issued in the sam e cities in F e b ru a ry 1926. Sixteen cities show increases this y e a r in the num ber of perm its and 14 report higher valuation figures. In creases in valuation figures of m ore than 100 per cent w ere reported by Cum berland, F red erick, Bluefield, Charlotte, W inston-Salem , Colum bia and G reenville. A m o n g the four larg e st cities of the D istrict, B altim ore and W ashington reported higher figu res fo r F e b ru a ry this year, w hile N orfolk and Richm ond reported low er totals. In alteration and repair w ork, 1,647 perm its issued in F e b ru a ry 1927 com pare w ith 1,490 perm its issued in F e b ru a ry last year. V aluation figures for alteration and repair w o rk in F e b ru a ry this y ear to talin g $1,486,654 also exceeded $1,377,557 reported by the sam e cities for the corresponding month in 1926. Combined valuation figures fo r all classes of w o rk totaled $10,986,560 in F e b ru a ry 1927 and $12,4 6 1,320 in F e b ru a ry 1926, a decline this y e a r o f $1,474,760, or 11.8 per cent. C ontracts actu ally aw arded during F e b ru a ry fo r construction w o rk in the F ifth D istrict totaled 4 $ 24 , 943 > 43 > ° f w hich $9,552,638 w as fo r residential w ork, according to statistics collected by the F . W . 6 Dodge Corporation. T h ese figu res include suburban and rural construction in addition to the city w o rk covered by building perm it figures. COTTON— Spot cotton prices continued to advance slo w ly during the month betw een F e b ru a ry 12th and M arch 12th, m aking a net gain of approxim ately half a cent a pound, according to figures released by the Cotton Q uotation S ervice of the D epartm ent of A gricu ltu re. The av erage price paid g ro w e rs in the Carolinas fo r m iddling grade upland short staple cotton during the w eek ended F e b ru a ry 12th w as 13 .16 cents per pound, and the av erage price paid during the w eek ended M arch 12th w as 13.67 cents. Since the w eek ended Decem ber 1 1 , 1926, when the ave rag e price w as 1 1 . 1 7 cents per pound, the price has advanced 2.50 cents, or approxim ately $12.50 per bale, but at present the quota tions are 4. cents, or $20 a bale, under the .figures quoted at the middle of M arch last year. The Census B u rea u ’s cotton consum ption report for F eb ru ary , issued on M arch 14, showed 590,447 bales used during the month, com pared w ith 604,584 bales consumed during the lon ger month of Ja n u a r y and 5 6 5 118 bales used in F e b ru a ry last year. T o tal consum ption fo r the seven m onths of the present season— A u gu st 1s t to F eb ru ary 28th— am ounted to 4,024,487 bales, com pared w ith 3,745,552 bales consumed in the corresponding period ended F e b ru a ry 28, 1926. Cotton g ro w in g states used 425,442 bales in F e b ru a ry 1927, again st 437,778 bales in Ja n u a ry this y e a r and 396,640 bales in F e b ru a ry a y ear ago. M an u factu rin g establishm ents held 1,933,077 bales on F e b ru a ry 28th, com pared w ith 1,852,987 bales on Ja n u a r y 3 1 s t and 1,832,655 bales on F e b ru a ry 28, 1926. P ublic w arehouses and com presses held 5,433,820 bales in sto rage at the end of F eb ru a ry this y ear, com pared w ith 6,070,020 bales so held a month earlier and 4,740,450 bales on F e b ru a ry 28th last year. F e b ru a ry exports totaled 1,010,507 bales, a figure slig h tly below the total of 1,115 ,7 9 2 bales sent abroad during the lon ger month of Ja n u a ry but n early double the 556,185 bales exported in F eb ru a ry 1926. E x p o rts during the seven months of this cotton y e a r totaled 7,699,553 bales, com pared w ith 5,986,630 bales shipped over seas dur ing the corresponding seven months ended F e b ru a ry 28, 1926. Spindles active m F e b ru a ry numbered 32,872,102, com pared w ith 32,633,550 in Ja n u a ry this y e a r and 33,009,138 in F eb ru a ry last year. TOBACCO— V IR G IN IA tobacco m arkets sold 27,787,995 pounds of producers’ tobacco in F e b ru ary, at an average price of $10.56 per hundred pounds. T o tal sales this season to M arch 1s t reached 138,200,860 pounds, which is ap p roxim ately 98.5 per cent of the estim ated sales for the year. S everal m arkets closed during F e b ru a ry and the rem ainder, excepting a few Fire-cu red houses, w ill close by the middle of M arch. Flue-cured, or B rig h t, tobacco sales for F e b ru a ry totaled 9,703,471 pounds, com pared w ith 8,120,921 pounds sold during the corresponding month last year, w hile Fire-cured, or D ark, tobacco sales totaled 15,052,196 pounds, the larg e st am ount ever sold during a single month and n early four tim es the 3,977,595 pounds of this type sold in F e b ru a ry 1926. Sun-cured sales on the Richm ond m arket totaled 2,485,051 pounds, com pared w ith 631,500 pounds sold in the sam e month last year. The average price of Flue-cured fo r the month w as $15.9 6 per hundred pounds, com pared w ith $10.96 in F e b ru a ry 1926. Fire-cu red tobacco averaged $7.18, com pared w ith $ 11.7 8 in F eb ru a ry last year. The av e rag e fo r Sun-cured w as $9.58 in F e b ru a ry 1927 and $15.9 0 in F e b ru a ry 1926. The quality of tobacco sold last month w as com paratively poor, grades running 15 per cent good, 30 per cent medium, and 55 per cent common. D anville led all m arkets w ith sales a g g re g a tin g 4,790,431 pounds of Flue-cured, L yn c h b u rg ran kin g second w ith sales of 3,482,272 pounds of Fire-cured. In season sales, D anville leads w ith 44,003,368 pounds, South Boston ran kin g second w ith 18,178,949 pounds. L yn c h b u rg leads the F ire-cu red m arkets for the season w ith sales o f 8,949,997 pounds prior to M arch 1st. N O R T H C A R O L IN A auction m arkets sold only 8,136,678 pounds of tobacco fo r gro w e rs in F e b ru ary, com pared w ith 12,702,929 pounds sold during the corresponding month last year, but total sales fo r the season to M arch 1s t reached 370,233,624 pounds this y ear com pared w ith 343,858,832 pounds sold prior to the sam e date a y e a r ago. The average price paid in F e b ru a ry this y e a r w as $ 15 .9 1 per hundred pounds, com pared w ith $ 13 .5 1 per hundred in F eb ru a ry 1926. In total sales in F eb ru ary , W in ston-Salem led w ith 3 ,17 1,3 8 3 pounds, O xford and Durham ran kin g second and third w ith sales to ta l ing 1,085,779 pounds and 1,038,884 pounds, respectively. AGRICULTURAL NOTES— The w eath er during the past month w as mild, and in a number of localities considerable ea rly farm w o rk w as done. On the whole, how ever, the ground has been too w et fo r plow ing. Soil is in excellent condition, w ith plenty of m oisture, and early prospects appear to be unusually favorable. A cold spell at the end of F eb ru ary checked prem ature developm ent of fru it buds, but m ost of M arch has been mild and there is considerable danger to fru it from a late freeze. F e rtiliz e r sales during the ea rly p art of this season w ere much below those of the corre sponding period in 1926, w hich m ay affect yields of this season’s crops. M an y farm ers, especially gro w e rs of cotton and dark tobacco, found last y ear unprofitable, and are forced to plant their 1927 crops at less expense than in m ore favorable seasons. The demand fo r farm labor has been below the supply during the past month, but w hen h eavy w o rk gets fu lly under w a y additional help w ill be needed and em ployed, and some scarcity of labor m ay develop. 5 FIGURES ON RETAIL TRADE As Indicated B j Reports from Thirty-One Representative Department Stores for the Month of FEBRUARY 1927 Percentage increase in February 1927 sales over sales in February 1926: Baltimore Richmond Washington Other Cities District — Percentage — Percentage — Percentage — Percentage 1.6 12.6 .4 — 2.9 .3 increase in total sales since Jan. 1st, over sales during the same two months in 1926: 2.1 5.8 — 1.4 — 2.5 — 1.2 increase in February 1927 sales over average February sales during the three years 1923-1925, inclusive: 1.2 23.5 11.7 6.6 6.2 increase in stock on hand February 28, 1927, over stock on February 28, 1926: 3.1 1.5 — .5 3.4 — 1.0 increase in stock on hand February 28, 1927, over stock on January 31, 1927: 4.9 2.8 9.6 9.8 6.9 Percentage of sales in February 1927 to average stock carried during that month: 21.1 24.0 24.6 18.4 22.2 Percentage of total sales since Jan. 1st, to average stock carried during each of the two months: 45.0 47.6 49.0 38.2 45.9 Percentage of outstanding orders on February 28th to total purchases of goods in 1926: 6.9 6.3 5.2 5.0 6.0 Percentage of collections in February to total accounts receivable on February 1st: 22.1 27.2 29.4 29.9 25.5 — Denotes decreased percentage. R eta il trade, as reflected in sales of thirty-on e leading departm ent stores in the F ifth Fed eral R e serve D istrict, w as three-tenths of I per cent g re a te r in dollar amount in F e b ru a ry 1927 than in F e b ru a ry 1926, although the B altim ore stores averaged a decline of 1.6 per cent and the group of stores in M iscellaneous Cities showed a decrease of 2.9 per cent. Richm ond sales increased 12.6 per cent and W ashington sales gained four-tenths of 1 per cent. T o tal sales during the first tw o m onths of 1927 averaged 1.2 per cent below sales in the corresponding 1926 months, Richm ond w ith an increase of 5.8 per cent show ing the only gain this year. F eb ru a ry sales this y ear averaged 6.2 per cent above av e rag e F e b ru a ry sales during the three y ears 19 23-1925, inclusive, the B altim ore stores alone failin g to reg iste r a gain. A v e ra g e stocks on the shelves of the rep ortin g stores at the end of F e b ru a ry w ere 1.0 per cent below those of F eb ru ary 28, 1926, in retail selling value, but w ere 6.9 per cent above those of Ja n u a ry 3 1s t this y ear, the latter increase being seasonal and due to the receipt of sp ring m erchandise. The p ercen tage of sales to av erage stocks carried during F eb ru ary w as 22.2 per cent fo r the D is trict as a w hole, and the p ercentage of total sales during the first tw o months of this y e a r to ave rag e stocks carried during each of the tw o m onths w as 45.9 per cent, indicating an annual turn over of 2.75 tim es. Collections b y the reportin g stores during F e b ru a ry totaled 25.5 per cent of outstanding receiv ables on F e b ru a ry 1st, all cities show ing low er figu res than in Ja n u a ry . 6 WHOLESALE TRADE, FEBRUARY 1927 Percentage increase in February 1927 sales, compared with sales in February 1926: 3U Groceries 12 Dry Goods 6 Shoes 16 Hardware 5 Furniture — 7.3 — 4.0 13.8 5.2 — 11.7 Percentage increase in February 1927 sales, compared with sales in January 1927: — 6.3 4.7 18.1 — 7.5 17.3 Percentage increase in total sales since Jan. 1, 1927, compared with sales during the same two months — 6.9 — 4.5 19.1 .3 — 29.5 Percentage increase in stock on February 28, 1927, compared with stock on February 28, 1926: — 3.9(11) — 13.9(5) 32.1(4) — 7.3(7) Percentage increase in stock on February 28, 1927, compared with stock on January 31, 1927: — .1(11) 7.4(5) — 1.4(4) 2.6(8) Percentage of collections in February to accounts receivable on February 1, 1927: 59.9(21) 30.8(8) 27.1(5) 33.4(12) 37.4(3) 12 Drugs — 4.3 — 13.8 in 1926: — 6.8 51.3(8) — Denotes decreased percentage. NOTE: The number of firms reporting stock and collection data in each group is shown immediately fol lowing the percentages. E ig h ty-fiv e w holesale firm s, rep resen ting six leading lines, sent confidential reports on F e b ru a r y ’s business to the F ed eral R eserv e B an k of Richm ond. F e b ru a ry sales w ere g re a te r than sales in Ja n u a ry 1927 in dry goods, shoes and furniture, but w ere less in gro ceries, h ardw are and drugs. The few er business days in F e b ru a ry doubtless accounted in part for the declines. In com parison w ith F e b ru a ry 1926 sales, those made in F eb ru ary this y ear w ere less in all lines, except shoes and hard w are, which gained 13.8 per cent and 5.2 per cent, respectively. Shoe and h ardw are sales since J a n u a ry 1s t w ere g re ater than sales during the first tw o months of 1926, but total sales for the tw o months declined this y ear in groceries, d ry goods, furniture and drugs. P a rt at least of the decline in dry goods w as due to low er prices fo r cotton goods this year, and much of the decrease in furn itu re sales w as due to unusually large sales in Ja n u a r y 1926. Stocks of dry goods and h arw are increased m oderately during F eb ru ary , w hile g ro ce ry and shoe stocks declined v e ry slightly. A t the end of the month stocks of gro ceries, dry goods and hardw are w ere low er than on F eb ru a ry 28, 1926, but shoe stocks w ere 32.1 per cent la rg e r on the 1927 date. Collections during F e b ru a ry in gro ceries totaled 59.9 per cent of accounts receivable on F e b ru a ry 1st. D rugs, w ith an average of 5 1.3 per cent, ranked next in percentage of outstanding receivables collected during the month, follow ed by furn itu re w ith 37.4 per cent, hard w are w ith 33.4 per cent, d ry goods w ith 30.8 per cent, and shoes w ith 27.1 per cent. D ry goods, shoe, hardw are and furn itu re p ercentages w ere higher in F e b ru a ry this y e a r than a y e a r ago, but g ro ce ry and d ru g figu res w ere low er this year. (Compiled March 19, 1927) 7 BUSINESS CONDITIONS IN THE UNITED STATES. (Compiled by the Federal Reserve Board) Industrial output increased further in February and was slightly larger than a year ago, and distribution of commodities by pre t ecn p r e t the railroads was larger than for the corresponding period of any ecn previous year. The general level of wholesale prices continued to decline and was in February at the lowest level since the summer of 1924. PRODUCTION. Production of manufactures increased in Feb ruary for the second consecutive month, and the output of minerals, after declining in January, advanced once more in February to the record level reached last December. Factory production and em ployment, however, continued smaller than during the corresponding month of last year. Production of iron and steel has increased steadily since December, and reports indicate that operations of steel mills in March were at almost the same high rate as in March, 1926. Automobile production increased from 234,000 cars in Janu ary to 298,000 cars in February, and weekly figures of employment in Detroit factories indicate some further additions to production in March, but output has continued much smaller than a year ago. Daily average consumption of cotton by mills in February was Index numbors of production of manufactures & minerals, adjusted for seusonal variations (1923-25 average a 100). Latest figures, larger than in any previous month on record, but activity of woolen February, manufactures 106, minerals 120. and silk mills decreased as compared with January. Production of bituminous coal has been maintained in large volume, while that of anthracite has been considerably reduced. The output of building materials was smaller during the first two months of this year than in the corresponding period of 1926. The value of building con tracts awarded in February was 3 per cent smaller than in the same month of last year, but awards for the first three weeks in March were in approximately the same volume as in 1926. Contracts in Southeastern and Northwestern states have been considerably smaller than a year ago, while those in the Central West have been much larger. TRADE. Retail trade showed less than the usual seasonal decline between January and February. Sales of department stores and chain stores were larger than in February of last year, while those of mail order houses were smaller. Wholesale firms reported a smaller volume of business in February than a year ago, and this decline occurred in nearly all leading lines. Inventories of depart ment stores increased in February in anticipation of the usual ex Indexes of U. S. Bureau of Labor Statistics (1913 = 100. Latest figures, February, all commodities 146.4, non-agricultural com pansion in spring trade, but the growth was less than is customary modities 148.3, agricultural commodities 113,8. at this season and at the end of the month stocks were slightly smaller than a year ago. Stocks of merchandise carried by whole sale firms also increased in February, but they were generally smaller than in the corresponding month of last year. Railroad shipments of commodities have increased steadily since January by more than the usual seasonal amount and have exceeded those for the same period last year, owing to larger shipments of coal, of miscellaneous commodities, and of merchandise in less-thancarload lots. PRICES. Wholesale prices, according to the index of the Bureau of Labor Statistics, continued to decline in February. Among non-agricultural products decreases occurred in the prices of coal, petroleum, iron and steel, nonferrous metals, and lumber, and the index for non-agricultural prices as a group was at the lowest post war level. Prices of livestock and livestock products and of clothing materials advanced in February. During the first three weeks of March there were decreases in prices of grains, livestock, sugar, Federal Reserve Board's indexes of factory employment and pay silk, wool, coal, petroleum and gasoline, while prices of potatoes, rolls (1919=100). Latest figures, February, employment 93,7, payrolls 108.5. pig iron, hides and rubber advanced. BANK CREDIT. Demand for commercial credit at member PERC EN T 6 banks in leading cities increased seasonally between the middle of February and the middle of March. There was also growth in the volume of funds used in the security market as indicated by in creases in loans to brokers and dealers in securities. Consequently total loans of the reporting banks at the end of the period were close to the level of last autumn. Financial operations of the United States Treasury around the middle of March, with disbursements temporarily in excess of receipts, resulted in a temporary abundance of funds which was reflected at member banks in leading cities in a growth of deposits, in reduced indebtedness at the reserve banks, and in increased holdings of securities. At the reserve banks, following changes in holdings of bills and securities accompanying the financial operations of the Treas ury, the total volume of credit outstanding on March 23 was some what larger than four weeks earlier. Conditions in the money market in March were slightly firmer Weekly rates in New York money market: nmcrcial paper rate on than in February. Rates on prime commercial paper advanced from 4 to 6 months paper and acceptance rate l 90-day paper. 4 per cent to 4-4 x per cent and call money was also higher, while /4 rates on acceptances declined somewhat, 8