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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT RICHMOND, VIRGINIA DISTRICT SUMMARY— February is a rela tively slack month in trade circles, coming as it does between the active Winter and Spring sea sons. During February this year business fol lowed seasonal trends, without any marked de viation either way. Credit demands at member banks and in turn at the reserve bank increased moderately, chiefly to meet the needs of farmers and merchants for early agricultural operations and the discounting of bills for Spring merchan dise. Debits to individual accounts during the four weeks ended March 13th were seasonally below those of the preceding four weeks, but exceeded debits in the corresponding period of 1928. Business failures in the Fifth district in February were fewer in numer and lower in liabilities involved than in February a year ago. Labor conditions were jtnuch better than in February 1928. Coal production held up bet ter than seasonal average in February, daily out put of bituminous coal being higher than in Janu ary and considerably above February last year. The textile *ndustry reported progress last month, some data indicating a considerably stronger demand for yarns and cloth than in recent months or a year ago. The value of build ing permits issued in the chief cities of the Fifth district in February was slightly below the value of the February 1928 permits, but contracts actually awarded in the district showed an in crease last month of approximately 50 per cent over awards in February last year. Cotton prices rose between the middle of February and the middle of March. Retail trade in department stores was about at seasonable levels, although total sales in February were 4 per cent below February 1928 sales. However, February 1928 contained an additional business day, which ac counts for the 4 per cent decline in this year’s sales. Present conditions are moderately favor able to agriculture. RESERVE BANK OPERATIONS— A seasonal increase in the demand for credit incident to early agricultural operations, including fertilizer pur chases, and discounting of bills for Spring mer chandise raised the volume of rediscounts for member banks held by the Federal Reserve Bank MARCH 31, 1929 of Richmond from $36,999,000 on February 15, 1929, to $40,706,000 on March 15, 1929. Due to a reduction of approximately $3,500,000 in bills purchased and Government security holdings, total earning assets did not rise in proportion to the increase in rediscounts, but rose only from $55,510,000 at the middle of February to $56,047,000 at the middle of March. At the same time the member banks reduced their reserve deposits at the reserve bank from $68,082,000 to $66,911,000. Book credit rather than cash being needed at this season, the circulation of Federal reserve notes continued the seasonal decline begun im mediately after Christmas, and dropped from $76,704,000 on February 15th to $73,761,000 on March 15th. The several changes mentioned, with others of less importance, lowered the cash reserves of the Federal Reserve Bank of Rich mond from $98,264,000 on February 15th to $93,970,000 on March 15th, and reduced the ratio of cash reserves to note and deposit liabilities com bined from 66.63 per cent to 66.41 per cent during the same period. In comparison with the figures reported on March 15, 1928, those for March 15, 1929, show material increases in rediscounts for member banks, total earning assets, and Federal reserve note circulation, but lower figures are shown this year for member bank reserve deposits, cash reserves, and reserve ratio. Rediscounts for member banks rose from $26,931,000 on March 15, 1928 to $40,706,000 on March 15, 1929. Total earning assets of the Federal Reserve Bank of Richmond rose from $47,837,000 last year to $56,047,000 this year. Federal reserve notes in actual circulation, which aggregated $62,407,000 at the middle of March last year, totaled $73,761,000 on March 15th this year. On the other hand, member bank reserve deposits totaled $71,464,000 on March 15th last year and $66,911,000 on the corresponding date this year, while the cash reserves of the Richmond bank declined between the same dates from $96,513,000 to $93,970,000. The changes in cash reserves, note circulation, and deposits, lowered the ratio of reserves to note and deposit liabilities combined from 71.41 per cent on March 15, 1928, to 66.41 per cent on March 15, 1929. CONDITION OF SIXTY-TWO REPORTING MEMBER BANKS IN SELECTED CITIES ITEMS Feb. 13, 1929 March 13, 1929 March 14, 1928 $526,445,000 $517,854,000 Total Loans and Discounts................................................. 158.408.000 154.410.000 Total Investments in Bonds and Securities.................... 41.241.000 41.713.000 Reserve Balance with Federal Reserve Bank.................. 11.293.000 11.412.000 Cash in Vaults.................................................................... 369.679.000 368.035.000 Demand Deposits ............................................................... 244.786.000 239.668.000 Time Deposits ................................................................ 20.094.000 16.820.000 ........................ . from Federal Reserve Bank Borrowed $515,327,000 171.710.000 42.111.000 11.891.000 373.280.000 246.274.000 17.590.000 In the accompanying table, the chief items of condition reported by sixty-two regularly reporting member banks are shown, three dates being given to allow for comparison of the latest available figures, those of March 13, 1929, with those of the previous month, February 13, 1929, and those of the preceding year, March 14, 1928. This month the figures are from only sixty-two banks, but are comparable with figures reported by sixty-three banks last month and sixty-six banks a year ago, the reduction in number being due to consolidations of reporting institutions. It should be understood that the figures shown refer to the report dates only, and are not necessarily the highest or lowest figures that occurred between the dates under review. A comparison of the figures reported for March 13th writh those reported on February 13th, both dates this year, shows a seasonal increase in loans amounting to $8,591,000. This increase is due chiefly to early agricultural needs and credit demand for discounting of bills for Spring merchandise. The reporting banks reduced their investments in bonds and securities by $3,998,000 during the month, and increased their borrowing at the reserve bank by $3,274,000. The aggregate reserve account of the sixty-two reporting banks rose $472,000 during the month, probably a daily fluctuation only. Cash in vaults changed little, declining $119,000. Demand deposits decreased $1,644,000 during the month, but time deposits rose $5,118,000, resulting in a net deposit gain of $3,474,000. The volume of credit extended by the reporting member banks in the form of loans and discounts on March 13, 1929, was $11,118,000 more than the volume of loans and discounts outstanding on March 14, 1928, but total investments in bonds and securities owned by the reporting banks were $17,300,000 lower on the 1929 date than a year earlier. Aggregate reserve balances at the reserve bank on March 13th this year were $398,000 below those of a year ago, and cash in vaults declined during the year $598,000. Demand deposits decreased $5,245,000 and time deposits dropped $1,488,000 between March 14, 1928, and March 13, 1929, a total deposit decline of $6,733,000. The reporting banks increased their rediscounts at the reserve bank by $2,504,000 this year. DEBITS TO INDIVIDUAL ACCOUNTS CITIES TOTAL DEBITS DURING THE FOUR WEEKS ENDED March 13, 1929 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....................................................... Portsmouth, Va................................................ Raleigh, N. C........................................... ........ Richmond, Va............................................... . Roanoke, Va..................................................... Spartanburg, S. C...... .................................... Washington, D. C............................................ Wilmington, N. C............................................ Winston-Salem, N. C......................... ............. $ 30,861,000 394,638,000 23,923,000 36,967,000 55,440,000 21,731,000 8,919,000 8,279,000 27,612,000 24,918,000 22,872,000 9,307,000 19,846,000 17,239,000 9,482,000 57,549,000 4,548,000 16,307,000 125,864,000 27,829,000 12,325,000 244,329,000 16,968,000 35,467,000 Totals ............................................................... $1,253,220,000 * This Norfolk figure includes Portsmouth figure also. 2 February 13, 1929 $ 25,078,000 372,268,000 25,768,000 37,931,000 55,202,000 22,810,000 8,740,000 9,597,000 31,686,000 23,838,000 23,224,000 9,645,000 20,610,000 18,738,000 9,956,000 59,353,000 4,927,000 25,541,000 138,233,000 27,419,000 13,097,000 253,381,000 16,174,000 41,934,000 $1,275,150,000 March 14, 1928 $ 25,424,000 375,083,000 24,588,000 35,466,000 51,114,000 20,364,000 8,010,000 9,254,000 27,518,000 22 ,886,000 23,710,000 9,185,000 20,284,000 17,196,000 7,789,000 *62,339,000 17,644,000 119,526,000 26,831,000 11,356,000 218,260,000 16,840,000 32,874,000 $1,183,541,000 The accompanying table show 5 debits to individual, firm and corporation accounts in the clearing house banks of twenty-four trade centers in the Fifth reserve district, three equal periods of four weeks being given to allow for comparison of the latest available figures with those of the preceding like period and the corresponding period last year. Total debits in the twenty-four reporting cities during the four week ended March 13, 1929, amounted to $1,253,220,000, compared with $1,275,150,000 reported for the preceding four weeks ended February 13, a decrease of$21,930,000, or 1.7 per cent. The later period contained one less business day than the earlier period, due to Washington’s Birthday holiday in all banks. Seven cities reported higher figures for the four weeks ended March 13th, but seventeen cities reported lower debits, seven of the seventeen decreases being small and chiefly due to the shorter period actually included. Debits aggregating $1,253,220,000 reported for the four weeks ended March 13th this year show an increase of $69,679,000, or 5.9 per cent, over the total of $1,183,541,000 reported for the corresponding four weeks ended March 14, 1928. Comparative figures are available for both years from twentythree cities, of which seventeen reported higher and six reported lower figures for the 1929 period. SAVING DEPOSITS—At the end of February 1929, twelve mutual savings banks in Baltimore had aggregate deposits amounting to $187,823,332, compared with $187,929,960 on January 31, 1929, and $179,358,523 on February 29, 1928. On the other hand, time deposits in sixty-two regularly reporting member banks, located in thirteen Fifth district cities, increased during the past month but at the middle of March were lower than a year ago, total time deposits in the reporting banks aggregating $244,786,000 on March 13, 1929, compared with $239,668,000 on February 13, 1929, and $246,274,000 on March 14, 1928. BUSINESS FAILURES—Dun’s Review for March 9th, in commenting on the February failure record, says, “A relatively favorable insolvency record is shown in returns for February, improvement appearing in both the number of commercial defaults in the United States and the amount of liabil ities. With the shorter month, a reduction in the business mortality was to be expected, yet the bet terment is more marked than that which occurred a year ago. Thus, last month’s 1,965 failures are 22.5 per cent below those of January, whereas the decrease during the same period last year was 17.7 per cent. Moreover, the latest reported indebtedness of $34,035,772 is 36.8 per cent under January’s total, while there was a falling off a year ago of only 5.5 per cent. Supplementing the foregoing sat isfactory comparison, last month’s insolvencies show a decline of 10 per cent from the 2,176 defaults of February 1928, and are 3.7 per cent less than those of the coresrponding period two years ago. More than that, the liabilities showrn in the present statement are approximately 25.5 per cent under the $45,070,642 of February last year, and are, in fact, the smallest for the month since 1920. The high point for February was reached in 1922, at more than $72,600,000, and in 1921 the amount ex ceeded $60,800,000. At about $17,300, the average indebtedness per failure last month compares with an average of some $20,700 for February 1928.” Business failures in the Fifth reserve district in February this year numbered 128, with liabilities of $1,942,076, compared with 170 insolvencies for $2,165,331 reported for January 1929 and 158 failures and liabilities totaling $4,304,424 reported for February 1928. Both the number of failures and the total of liabilities involved were lower last month than in 1927, also, but exceeded those of February 1926. Last month’s liabilities were the lowest for any February since 1920, with the single exception of 1926, which was 5 per cent smaller. LABOR—The industries of the Fifth district as a whole are employing their usual quotas of work men, and an extensive construction program is taking care of building trades people. Weather con ditions in recent weeks have been favorable for outdoor work, and employment conditions appear to be much better than they were a year ago, when unemployment was much more extensive that at present. COAL—Bituminous coal production in the United States in February totaled 47,271,000 net tons, compared with 51,456,000 tons mined in January this year and 41,351,000 tons in February 1928. The average daily rate of production, however, was higher in February than in January, 1,970,000 net tons in the later month comparing with a daily average production of 1,949,000 tons in January. Total production during the present coal year to March 9th (approximately 288 working days) amounts to 475,389,000 net tons, compared with 446,075,000 tons for the corresponding period in 1927-1928. On March 16, 1929, the Bureau of Mines, Department of Commerce, issued an interesting report on consumption of bituminous coal by uses in a typical year of industrial activity. This report shows that railroads use approximately 27.7 per cent of all bituminous coal consumed in the United States each year. Coke ovens use 16.0 per cent, electric utilities 7.7 per cent, steel works 5.4 per cent, general manufacturing 19.5 per cent, coal and water gas plants other than by-product coke ovens owned by city gas companies 1.0 per cent, coal mine fuel 1.1 per cent, mines and quarries other than coal 0.8 per cent, bunker coal 1.5 per cent, domestic fuel and all other uses 19.3 per cent. The large proportion of total coal consumption chargeable to railroads will be surprising to many people. 3 TEXTILES—Chiefly due to higher prices for raw cotton which prevailed in February, the de mand for textiles broadened and reports from semi-official sources indicate that sales and shipments by American mills exceeded production. Cotton consumption figures in the Fifth district show 256,777 bales used in February, of .which North Carolina mills used 139,207 bales, South Carolina mills 108,888 bales, and Virginia mills 8,682 bales. The North and South Carolina figures were higher but the Virginia figure was lower for February this year than in the longer month of Febru ary 1928, when the Fifth district mills consumed a total of 246,145 bales. The Fifth district increase of 4.3 per cent last month over the same month a year ago was slightly less than the national increase of 4.4 per cent. Conditions in the textile field, while not satisfactory, are better than they were a year ago, when production so far exceeded orders and shipments that many mills were forced to operate on curtailed schedules to prevent a burdensome accumulation of manufactured goods in their warehouses. BUILDING OPERATIONS FOR THE MONTHS OF FEBRUARY 1929 AND 1928. CITIES 2 Permits Issued New Repairs 1929 1928 1 Baltimore, Md..... 2 Cumberland, Md... 3 Frederick, Md..... 4 Hagerstown, Md... 5 Danville, Va......... 6 Lynchburg, Va.... 7 Norfolk, Va. 8 Petersburg, Va.... 9 Portsmouth, Va.... 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Richmond, Va...... Roanoke, Va........ Bluefield, W. Va... Charleston, W. Va. Clarksburg, W. Va. Huntington, W.Va. Parkersburg, W. Va.... Asheville, N. C...... Charlotte, N. C.... Durham, N. C...... Greensboro, N. C. High Point, N. C... Raleigh, N. C....... Rocky Mount, N.C. Salisbury, N. C.... Wilmington, N. C... Winston-Salem, N. C._ 582 14 10 12 7 14 49 7 11 62 25 1 24 21 9 4 6 54 17 16 12 13 7 3 9 44 9 1929 486 628 7 13 26 30 45 3 23 89 51 4 45 16 32 3 6 8 28 82 39 37 40 30 18 5 15 88 0 6 7 14 60 7 14 58 14 1 14 7 4 5 25 22 8 24 3 6 3 3 9 42 36 36 7 Charleston, S. C...„ 20 24 Columbia, S. C .... 6 32 20 Greenville, S. C... 12 9 26 Spartanburg, S. C. 388 159 Washington, D. C. 171 Totals............. 1,248 1,514 1,479 1928 New Construction 1929 1928 824 $ 1,932,280 $ 1,560,700 1 35,982 20,725 1 25,500 37,035 7 26,670 27,100 5 13,330 269,105 21 57,300 147,601 82 179,175 97,300 9 10,450 12,500 21 13,725 33,460 62 1,271,630 556,440 118,502 188,756 18 2 5,000 1,845 13 108,307 132,655 10 76,010 20,060 2 47,600 27,775 8 45,300 25,800 19,200 470,290 37 959,425 33 399,575 14 347,490 212,671 30,850 361,360 43 7 27,980 162,125 15 101,450 113,415 12,800 33,300 6 9 6,075 16,025 10 67,800 32,450 59 157,677 520,560 35 17,800 9,440 52 94,200 78,250 29 14,900 178,800 50,900 65,450 23 3,972,675 247 3,718,740 1,705 $ 8,793,564 $10,586,027 Alterations 1929 1928 $ 421,520 $ 0 3,175 7,640 8,600 5,600 265,690 11,580 17,685 52,679 79,539 1,000 22,671 1,775 6,000 10,200 7,690 23,730 16,300 11,239 2,300 6,200 2,950 1,950 7,000 57,105 17,633 11,885 21,355 36,850 357,740 $1,497,281 Increase or Per Cent of Decrease Increase 0 or Total 2 Valuation Decrease 391,850 $ 13,985 401,250 1,272 1,000 13,710 3,850 3,360 272,305 — 519,480 10,649 — 95,350 48,796 135,319 46,765 — 37,235 42,800 — 44,850 94,802 673,067 33,827 — 24,542 200 3,955 9,215 j — 10,892 3,575 54,150 2,100 — 15,925 8,000 21,700 8,700 — 452,100 23,243 — 559,363 11,983 — 130,502 59,952 — 379,223 6,400 — 138,245 14,450 — 20,215 3,400 — 20,950 13,925 — 21,925 4,850 37,500 49,310 — 355,088 11,625 14,368 85,410 — 89,475 12,045 — 154,590 i8,650 13,650 181,065 — 77,260 $1,478,727 $— 1,773,909 20.6% 1 3.7 2 51.7 10.9 — 95.9 — 60.3 59.4 — 62.8 — 58.8 103.4 — 11.0 193.4 — 7.7 229.1 — 32.0 64.2 — 94.4 — 56.9 — 36.3 — 90.0 — 82.0 — 15.8 — 57.1 — 73.2 100.5 — 62.3 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 68.2 27 — 49.8 28 — 81.0 29 18.4 30 — 1.9 31 — 14.7% —- 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. For the second month in succession, building permits issued in the leading cities of the Fifth dis trict fell off in February in both number and estimated valuation in comparison with the correspond ing month of last year, but the figures exceeded those of January this year. Last month the building inspectors in twenty-four cities issued 1,248 permits for new construc tion, compared with 1,041 permits for similar work issued in January 1929 and 1,514 permits issued in February 1928. Estimated valuation figures for new work last month totaled $8,793,564, compared with $8,009,124 for January this year and $10,586,027 for February 1928. Alteration and repair per mits issued in February 1929 totaled 1,479, with estimated valuation of $1,497,28)1, compared with 1,705 permits and total valuation of $1,478,727 issued for alteration and repair work in February 1928. Combined valuation figures last month for all classes of work amounted to $10,290,845, compared with $9,437,955 in January 1929 and $12,064,754 in February 1928, an increase of 9.0 per cent over January but a decrease of 14.7 per cent under the February 1928 figure. Clarksburg and Bluefield, both in West Virginia, showed the highest percentage gains in February in comparison with February a 4 year ago, but both gains were due more to low figures last year than to high figures this year. Richmond, writh an increase of 103.4 Per cent, probably has the best record of the reporting cities for February, although Baltimore and Washington reported higher figures. If figures for several recent months are considered, Washington ranks ahead of any other Fifth district city in construction activity at this time. Building contracts awarded in the Fifth district in February totaled $34,251,706, including both urban and rural construction, compared with $22,301,238 awarded in February 1928, an increase this year of 53.6 per cent. Of the February 1929 total, $9,104,771 represented contracts for 'residential types of construction, according to statistics collected by the F. W. Dodge Corporation. COTTON—Spot cotton prices ruled generally higher during the month between the middle of February and the middle of March than during the preceding month. On February 15th, the latest date mentioned in the Review last month, the average price on ten Southern markets for middling cotton was 18.82 cents per pound. On February 22nd the average price was 18.88 cents, and on March 1st the average was 19.35 cents. By March 8th the average price had risen to 20.25 cents per pound, but during the following week there was a slight recession and the average dropped to 20.07 cents on March 15th, the latest date for which figures are available. The Census Bureau’s cotton consumption report for February, issued on March 14th, showed 598,098 running bales used during the month, compared with 668,389 bales consumed during the longer month of January and 572,875 bales used in February last year, which was also a longer month. Total consumption for the seven months of the present season—August 1st to February 28th —amounted to 4,049,461 bales, compared with 4,200,369 bales consumed in the corresponding period ended February 29, 1928. Manufacturing establishments held 1,746,537 bales on February 28th, com pared with 1,767,742 bales held on January 31st and 1,668,649 bales on February 29, 1928. Public warehouses and compresses held 3,876,215 bales in storage at the end of February this year, com pared with 4,615,337 bales so held a month earlier and 4,313,843 bales on February 29th last year. February exports totaled 613,394 bales, compared with 626,148 bales sent abroad in February 1928. Exports during the seven months of this cotton year totaled 6,188,075 bales, compared with 5,122,396 bales shipped over seas during the corresponding seven months ended February 29, 1928. Spindles active in February numbered 31,007,936, compared with 30,757,552 in January this year and 31,726,452 in February 1928. Cotton consumption in the cotton growing states totaled 454,864 bales in February, compared with 508,537 bales used in January and 428,741 bales in February 1928. Last month’s consumption in the cotton growing states amounted to 76.05 per cent of National consumption, compared with 74.84 per cent of National consumption used in the cotton growing states in February last year. Of the 454,864 bales of cotton consumed in the cotton growing states in February, the Fifth district mills used 256,777 bales, or 56.45 per cent. The final ginning report on the 1928 cotton crop was issued by the Census Bureau on March 21st, and showed the year’s production to be 14,269,313 running bales, the equivalent of 14,450,007 bales of 500 pounds gross weight. The final ginning figure was only 54/iooths of 1 per cent above the final crop estimate of the Department of Agriculture made in December. The final ginning report credited North Carolina with only 834,205 equivalent 500 pound bales, compared with a forecast of 840,000 bales for the year, and South Carolina ginnings totaled only 724,525 bales, compared with a forecast of 725,000 bales, but Virginia ginnings totaled 43,462 bales against a forecast of 43,000 bales. The two Carolinas grew smaller crops in 1928 than in 1927, but Virginia grew a larger crop. The district total of 1,602,202 bales in 1928 showed a decline of 9,888 bales under the 1927 yield of 1,622,090 bales. The financial returns to the growers of cotton in the Fifth district was much less satis factory last fall than the production figures alone indicate, the average price secured for the crop having ruled around $10 a bale lower during the fall of 1928 than in the same period of 1927. At the end of the year the price rose to the level of the preceding year and in the first two months of 1929 was higher than in the same period of 1928, but farmers do not benefit very much by increases in cotton prices which occur after the active selling season from August to Christmas. TOBACCO—V IR G IN IA leaf tobacco sales on auction markets during February totaled 14,986,465 pounds, which sold for an average of $11.0 1 per hundred pounds. Sales this season to March 1st reached a total of 113,214,869 pounds, about 92 per cent of the estimated Virginia sales for the entire season. Last year 137,343,288 pounds, or 96 per cent of the crop, were sold prior to March. Several markets closed during February and the remainder, excepting a few fire-cured and sun-cured houses, closed during the first half of March. Flue-cured sales in February totaled 6,586,418 pounds, at an average of $10.54 per hundred, compared with 11,254,410 pounds sold for an average price of $13.07 in February 1928. Fire-cured sales last month totaled 6,036,580 pounds and the average price was $10.35 Per hundred pounds, compared with 7,740,370 pounds sold for $10.14 per hundred in February last year. Sun-cured sales totaled 1,706,492 pounds, and averaged $10.22 per hundred, compared with 1,565,776 pounds sold for $15.43 per hundred in February a year ago. Sales of burley in February 5 totaled 656,974 pounds, at an average of $23.79 Per hundred, compared with 94,816 pounds of this type sold for an average of $25.14 in February 1928. Total sales of burley for the season were 5,017,120 pounds, the largest crop since records were begun in 1920, and the average season price of $30.43 was the highest for burley tobacco since 1921. In the number of pounds sold in February, Danville led all markets with 2,865,505 pounds, South Boston ranking second with 1,736,220 pounds, both selling flue-cured tobacco. Farmville led the fire-cured, or dark, markets with 1,526,526 pounds, Lynchburg ranking a close second with 1,411,952 pounds. In price paid, Lawrenceville led the fluecured, or bright, markets with $12.00 per hundred, and Blackstone led the fire-cured markets with $13.43 per hundred. All burley sales mentioned were at Abingdon and all sun-cured sales were at Richmond. NORTH CAROLINA tobacco markets nearly all closed before March, and the Crop Reporting Service has issued a report on season sales. Total sales of producers’ tobacco from the 1928 crop amounted to 484,063,873 pounds, compared with 472,408,338 pounds sold from the 1927 crop. Average prices were $18.78 per hundred pounds for the 1928 crop and $22.00 per hundred for the 1927 crop. In spite of a larger crop last year, the lower price made the financial returns from tobacco approxi mately $13,000,000 less than the returns for the 1927 crop. In aggregate season sales, Wilson with 75,561,417 pounds led the North Carolina markets, Greenville ranking second with 64,238,186 pounds. Mebane led in average price, paying $22.08 per hundred for the season, with Fuquay Springs second at $21.23 per hundred. M AN UFACTU RE of tobacco in February was in larger volume in some lines and smaller in some than in February 1928. Cigarettes manufactured in continental United States in February this year numbered 8,063,592,885, on which a tax of $24,195,621.08 was paid, compared with 7,532,613,690 ciga rettes manufactured and $22,601,209.61 tax paid in February 1928. The Fifth district manufactures between 79 and 80 per cent of all American made cigarettes. Cigars made last month numbered 437,476,207, compared with 453,605,097 made in February a year ago. Chewing and smoking tobacco manufactured totaled 25,814,698 pounds in February 1929 and 28,436,420 pounds in February 1928. Taxes in February 1929 on all tobacco products, including cigars, cigarettes, chewing and smoking tobacco, and snuff, totaled $30,925,565.20, compared with $29,982,237.04 paid in February 1928. AGRICULTURAL NOTES—There is little activity on farms between the middle of February . and the middle of March except in the Southern section of the Fifth district and in dairying regions. Some early truck has begun moving to market from the coastal counties of South Carolina, and farmers have been generally cleaning up and preparing for their 1929 operations. Fertilizer sales this year are running behind sales at this time last year, but manufacturers seem to expect that about the usual tonnage will be used. The weather has been favorable for outdoor work, and sea sonal farm tasks are well advanced. In the Fifth district, farmers are probably in a less favorable position this year in comparison with the early spring of 1928, last year's crops on the whole having been less remunerative than those of the preceding year. ________ ___________________ WHOLESALE TRADE, FEBRUARY 1929 __________________________ Percentage increase in February 1929 sales, compared with sales in February 1928: 30 Groceries 10 Dry Goods 5 Shoes 15 Hardware U Furniture 13 Drugs — 7.7 — 12.3 — 12.8 — 8.3 — 10.7 — 3.7 Percentage increase in February 1929 sales, compared w^ith sales in January 1929: —10.7 9.6 35.4 — 16.4 8.7 — 29.2 Percentage increase in total sales since January 1, 1929, compared with sales during the first two months of 1928: — .8 — 15.2 — 14.9 — 8.4 — 13.4 10.3 Percentage increase in stock on February 28, 1929, compared with stock on February 29, 1928: 8.3(11*) —20.7 (4*) .8(4*) — 1.5(8*) Percentage increase in stock on February 28, 1929, compared with stock on January 31, 1929: — .6(11*) 1.9(4*) 2.3(4*) 5.5(8*) Percentage of collections in February to accounts receivable on February 1, 1929: 59.3(19*)_______ 33.7(7*)__________ 25.5(5*)__________ 30.5(12*)_________ _________________ 59.5(9*) — Denotes decreased percentage. * Number of reporting firms. Seventy-seven wholesalers and jobbers, representing six leading lines of trade, sent confidential reports to the Federal Reserve Bank of Richmond on their February business. Dry goods, shoe and furniture sales in February were higher than in January of this year, but grocery, hardware and drug sales were less. In comparison with sales in February 1928, sales in February this year showed a falling off in every line reported upon, part of which was no doubt due to the additional business day in February last year. In total sales since January ist this year, all reporting lines show lower figures than in the first two months of last year except drugs, which gained 10.3 per cent. The de crease in groceries was less than 1 per cent, and is probably due to the shorter time actually included in the 1929 period. 6 Stocks of dry goods, shoes and hardware increased moderately during February, while grocery stocks declined very slightly. At the end of February 1929, stocks of groceries and shoes were larger than stocks on the shelves of the reporting firms a year earlier, but dry goods and hardware stocks were lower this year. Collections in February were better than in January in groceries, but were slower in dry goods, shoes, hardware and drugs. February collections this year showed some improvement over collec tions in February 1928 in dry goods and drugs, but grocery, shoe and hardware collections last month fell below those of the earlier year. Furniture could not be figured this month, less than three firms having reported on receivables and collections. FIGURES ON RETAIL TRADE As Indicated By Reports from Thirty-Two Representative Department Stores for the Month of February 1929 Percentage increase in February 1929 sales over sales in February 1928: Baltimore Richmond Washington Other Cities District — 7.6 — .6 — .05 — 11.2 — 4.2 Percentage increase in total sales since January 1st, over sales during the first two months of 1928: — 3.9 1.4 1.4 — 7.7 — 1.7 Percentage increase in February 1929 sales over average February sales during the three years 1923-1925, incl.: — 3.4 19.4 22.4 — 12.3 7.2 Percentage increase in stock on hand February 28, 1929, over stock on February 29, 1928: — 1.4 — 5.1 — .2 — 8.5 — 2.3 Percentage increase in stock on hand February 28, 1929, over stock on January 31, 1929: 4.7 3.4 7.9 7.2 6.1 Percentage of sales in February 1929 to average stock carried during that month: 21.0 24.8 25.8 16.1 22.5 Percentage of total sales since January 1st, to average stock carried during each of the two months: 43.8 51.1 50.3 32.6 45.3 Percentage of collections in February to total accounts receivable on February 1st: 24.6 31.3 29.9 28.4 27.5 — Denotes decreased percentage. Thirty-twro leading department stores in the Fifth reserve district sold an average of 4.2 per cent less goods in February 1929 than in February 1928, but February this year contained one less busi ness day than the same month last year. All cities for which individual averages are available showed lower figures last month, but Richmond and Washington decreases were undoubtedly due to the shorter month. Cumulative sales since the beginning of the year averaged 1.7 per cent less than sales during the first two months of 1928, Richmond and Washington again showing up well with increases of 1.4 per cent this year. February 1929 sales averaged 7.2 per cent above average Febru ary sales during the three years 1923-1925, although the Baltimore and the Other Cities stores failed to maintain the average of those years. Stocks on the shelves of the reporting stores increased seasonally an average of 6.1 per cent during February, but at the end of the month were 2.3 per cent below stocks on hand on February 29, 1928, all reporting cities showing reductions during the year. The percentage of sales to average stocks carried during February 1929 was 22.5 per cent for the district as a whole, and the percentage of total sales during the first two months of this year to average stocks carried during each of the two months was 45.3 per cent, indicating an annual turn over of 2.718 times, compared with business at an annual rate of 2.73 times during the first two months of 1928. Collections by the reporting stores during February totaled 27.5 per cent of receivables that were outstanding on February 1st, exactly the same percentage attained in February last year. Baltimore and Richmond collections showed slight improvement this year, Washington reported no change, and the Other Cities experienced a slowing down in collections last month. (Compiled March 21, 1929) 7 BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Industry and trade continued active in February and the first part of March and there was a growth in the volume of bank loans. Borrowing at reserve banks increased during the period and money rates advanced further. PRODUCTION—Production continued at a high rate throughout February and the first half of March and was substantially above a year ago. Automobile output was at a record rate in Feb ruary, and there was also an unusually high daily average production of copper and iron and steel. Large output in the iron and steel industry reflected demands from manufacturers of automobiles, machine tools, and agricultural implements, and from railroad companies. Preliminary reports for the first half of March indicate further expansion in automobile and iron and steel production. Dur ing February the daily average output of coal and crude petroleum also increased, and production of cotton and wool textiles continued large, while silk output declined somewhat from the unusually high level of January. There was also some decline from January in the production of lumber and ce ment, and in the output of meat packing companies. The high rate of activity in manufacturing during February was reflected in a larger than sea sonal increase in factory employment and payrolls, both of which were considerably above the level of February 1928. Building activity declined further in February, and the value of contracts awarded was over 20 per cent smaller than a year ago. Residential building contracts showed the largest decline in com parison with February 1928, while those for public works and utilities were only slightly smaller in value, and commercial and industrial building awards increased. During the first half of March there was some seasonal increase in total building awards, but they continued to be substantially below a year ago. DISTRIBUTION—In February shipments of commodities by rail increased more than is usual for the season, reflecting larger loadings of coal and coke and miscellaneous freight, which includes automobiles. During the first two weeks of March, freight-car loadings continued to increase. Sales of wholesale firms were generally smaller in February than a year ago. In comparison with January, sales of dry goods, shoes, and furniture increased seasonally, while sales of groceries and hardware were smaller. Department stores reported about the same daily volume of sales in Feb ruary as in the preceding month, and larger sales than a year ago. PRICES—The general level of wholesale prices declined slightly in February, and was approxi mately the same as a year ago. The decline from January reflected primarily decreases in the prices of hides and leather, livestock, and meats, and small declines in the prices of wool, cotton and woolen goods. The influence of these declines on the general average was partly offset by increases in the prices of copper, lead, iron and steel, rubber, and grain. During the first two weeks of March, prices of wool and petroleum continued to decline, and rub ber prices receded somewhat after a marked rise in February, while leather prices declined sharply. Prices of copper rose further and there were small increases in prices of hides, raw cotton, and certain grades of lumber. BANK CREDIT—Between the middle of February and the middle of March there was a rapid growth of loans at member banks in leading cities. The increase was in loans chiefly for commercial purposes, which on March 13 were more than $200,000,000 larger than four weeks earlier. Invest ments of the reporting banks declined further during the period. Total volume of reserve bank credit declined somewhat between February 20 and March 20, re flecting for the most part so m e further gold imports from abroad. Member bank borrowing at Federal reserve banks was nearly $80,000,000 larger on March 20 than four weeks earlier, while ac ceptances showed a further decline of about $120,000,000 during the period. Security holdings showed relatiyely little change. Money rates continued to advance. Rates on 4-6 months commercial paper rose from 5^2-5% to 5%-6 per cent and rates on 90 day bankers’ acceptances increased from 5-5^ per cent on February 13th to $y2 per cent on March 21st. Open market rates for collateral loans also increased. 8