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MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT FEDERAL RESERVE BANK OF RICHMOND RICHMOND, VIRGINIA MARCH 31, 1934 RADE, industrial and banking in nearly 18 per cent above the February FIFTH FEDERAL RESERVE DISTRICT 1933 dices for February and the first output. Textile mills in th half of March followed seasonal trends Fifth reserve district continued full in most instances, although there were time operations in February, but lost a few variations above or below the ground to other sections in the percent age of the National total of cotton normal line. The outstanding feature in the past month was the marked con used. Spot cotton prices sagged slight trast to developments in the corre ly between the middle of February and sponding period last year, especially the middle of March, but domestic con in banking. Last month rediscounts sumption and exports of cotton both for member banks at the Federal Re exceeded the February 1933 figures. serve Bank of Richmond fell to less Tobacco markets handled the end of than two million dollars, in contrast last season’s crop in February, and with a sudden rise to nearly fifty mil sold considerably more tobacco for bet lion dollars in rediscounts in late Feb ter prices than in the same month last ruary and early March last year. At year. Construction continued to be the the middle of March 1934 the volume weakest spot in the present business of Federal reserve notes in circulation was nearly sixty- and industrial set-up, permits issued in the leading cit seven million dollars less than outstanding circulation ies of the Fifth district totaling only 909 last month, a year ago. Member bank reserve deposits^ rose thirtythree millions during the year. Reporting member and contract awards for both city and rural work were banks increased their loans, investments in securities, also relatively low, although double those reported for and deposits between the middle of February and the the corresponding month last year. Retail trade as in middle of March this year, and on March 14 their in dicated by department store sales averaged 11 per cent vestments, reserve balances, and deposits were material above sales in February 1933, in spite of unfavorable ly higher than on March 15, 1933, while their cash in weather this year, and collections of outstanding ac vaults and their borrowing at the reserve bank was counts were better than a year earlier. Wholesale trade much lower. Debits to individual accounts figures in last month showed some seasonal recession in several the four weeks ended March 14 showed an average lines, but continued in much larger volume than last increase of nearly 5 per cent over aggregate debits in year. Intentions to plant reports issued by the De the four weeks ended February 14, fifteen of the partment of Agriculture show that Fifth district far twenty-three reporting cities showing higher figures. The commercial failure record in both the United mers expect to reduce acreage in money crops this year, States and the Fifth reserve district was better in Feb especially in tobacco. Extremely severe weather in ruary 1934 than for any other month since 1920, and February and early March damaged winter crops in the in both number of failures and in liabilities involved the district, and also hurt many fruit trees. Reports indi district showed larger decreases in comparison with cate that many truck crops on the coast were so badly February 1933 figures than the National average. The damaged that they had to be abandoned or replanted. volume of employment in the middle of March was Farmers on the whole are stronger financially this year somewhat less than in earlier months of this year, owing in large part to the tapering off of Federal relief work than they were a year ago, and are consequently better since the end of February. Coal production in Febru able to equip their farms with needed live stock and ary on a daily basis was above January production, and machinery, and to buy commercial fertilizer. T MONTHLY REVIEW 2 Reserve Bank Statement 000 omitted ITEMS Rediscounts held ---------------Open market paper--------------Government securities ---------Total earning assets----------Circulation of Fed. Res. notes.... Cir. of Fed. Res. bank notes— Members* reserve deposits-----Cash reserves_________ ____ Reserve ratio -------------------- Mar. 15 1934 Feb. 15 1934 Mar. 15 1933 $ 1,919 $ 2,593 2,582 1,193 93,563 93,563 98,738 96,675 147,694 147,329 4,402 0 94,974 100,660 166,339 165,416 65.58 65.30 $ 47,012 20,542 48,149 115,703 214,449 0 67,642 183,573 63.62 $33,018,000 during the year, accumulating to an amount totaling more than $100,000,000. Cash re serves of the Richmond reserve bank decreased $17,234,000 between March 15, 1933, and March 15, 1934, but the ratio of reserves to note and deposit liabilities combined rose 1.68 points, the drop in note circulation more than balancing the decline in cash reserves and the increase in deposits. Member Bank Statement ITEMS Mar. 14 1934 000 omitted Feb. 14 Mar. 15 1934 1933 Changes during the past month in the statement of Loans on stocks & bonds (in cluding Governments) _____ $ 59,593 $ 59,313 $ 59,680 condition of the Federal Reserve Bank of Richmond were relatively unimportant. Rediscounts for member All other loans_____________ 112,284 109,223 114,019 Total loans & discounts____ 171,877 168,536 173,699 banks declined further, by $674,000, and holdings of Investments in securities_____ 180,431 179,422 138,655 open market paper decreased by $1,389,000. No change Reserve bal. with F. R. Bank.... 36,611 36,779 29,433 23,287 10,891 11,443 occurred in the Bank’s investments in Government se Cash in vaults_____________ curities, but the decreases in rediscounts and holdings Demand deposits ---------------- 203,215 198,883 164,870 124,897 deposits_____________ 132,759 130,701 of open market paper reduced total earning assets by Time Borrowed from F. R. Bank.__ 22,487 0 0 $2,063,000 between February 15 and March 15. Dur ing the month under review there was a slight increase The figures in the accompanying table are totals of of $365,000 in the circulation of Federal reserve notes. the principal items of condition as of three mid-week Also, during the month, provision was made for the retirement of $4,402,000 Federal Reserve bank notes dates for twenty-eight member banks in the Fifth Fed outstanding by the deposit with the U. S. Treasury of a eral reserve district. March 14, 1934, figures are com like amount of gold certificates to cover their redemp pared with those of February 14, 1934, and March 15, tion when and as presented. Member banks continued 1933, thus affording opportunity for study of the to increase their reserve accounts at the reserve bank changes during the past month and the past year. Between February 14 and March 14, both this year, last month, this item showing a rise of $5,686,000 and loans and discounts rose by $3,341,000, a seasonal rise reaching on March 15 a total more than double the legal required reserve. The several changes in the due to borrowing by merchants to discount bills for statement, with others of less importance, raised the spring merchandise. Loans on stocks and bonds rose total cash reserves of the Federal Reserve Bank of $280,000, and all other loans, which are chiefly com Richmond by $923,000 between the middle of Febru mercial and industrial at this season, rose $3,061,000. ary and the middle of March, but the ratio of cash The reporting banks increased their investments in sereserves to note and deposit liabilities combined de i curities by $1,009,000 during the month, but their re| serve deposits at the Federal reserve bank declined by clined approximately a quarter of a point. | $2,168,000, merely a daily fluctuation. Cash in vaults A comparison of the March 15, 1934, figures with ! rose $552,000 between the middle of February and the those for March 15, 1933, shows very marked changes j middle of March. Deposits in the twenty-eight banks during the year, due to the fact that the 1933 figures ! rose $6,390,000 last month, demand deposits gaining reflect the unusual conditions which existed at the end | $4,332,000 and time deposits rising $2,058,000. None of the banking holiday. In contrast with rediscounts I of the reporting institutions were borrowing at the re totaling only $1,919,000 held by the Richmond reserve serve bank on either February 14 or March 14. bank on March 15 this year, a year ago member banks On March 15, 1933, the reporting banks were just in this district were borrowing $47,012,000, a decrease reopening after the banking holiday, and comparison of of $45,093,000 during the year. The portfolio of open the figures as of that date with those for March 14, market paper, which increased greatly just before the j 1934, reflects banking trends in the Fifth district cities banking holiday last year, declined by $19,349,000 be I since the crisis. Little change occurred in total loans tween March 15 last year and this. On the other hand, ; and discounts during the year, there being a net dethere was a marked increase amounting to $45,414,000 j crease of $1,822,000. On the other hand, the banks in the Bank's ownership of Government securities. To j increased their investments in securities, mostly in Govtal earning assets showed a net decrease of $19,028,000 | ernment obligations, by $41,776,000 in the year, and during the year. Federal reserve notes in circulation ; their reserve balances at the Federal reserve bank rose rose very sharply in February and March last year, but I by $5,178,000. Cash in vaults registered a decline of began to decline again immediately after the termina j $11,844,000 between March 15 last year and March 14 tion of the banking holiday. By March 15, 1934. notes this year, most of which occurred very soon after the in circulation had dropped by $66,755,000, but still were 1933 date, when it became evident that depositors were considerably higher in amount than in average years. sufficiently confident of the security of reopened banks Member bank reserve deposits show an increase of to leave their funds in them. Deposits rose by $46,- MONTHLY REVIEW 207,OCX) during the year, of which $38,345,000 was in demand deposits and $7,862,000 in time deposits. Most of the rise in deposits occurred during the latter half of the year under review. At the middle of March last year the twenty-eight reporting banks were borrowing $22,487,000 from the Federal Reserve Bank of Rich mond, but the last of this was paid off in November and none of the twenty-eight institutions were borrowing on March 14, 1934. Most of the borrowing last year was for the purpose of improving the banks’ cash position, and the loans were repaid shortly after the banks re opened. Time and Savings Deposits Time deposits in twenty-eight reporting member banks and aggregate deposits in eleven mutual savings banks in Baltimore totaled $320,697,855 at the end of February 1934, a higher figure than $317,206,433 re ported at the end of January this year but a lower fig ure than $326,849,566 at the end of February last year. Both the reporting member banks and the savings banks gained in deposits during the past month, but the savings banks report a lower total than at the end of February 1933. Debits to Individual Accounts CITIES 000 omitted Total Debits, four weeks ended March 14, Feb. 14, Percentage 1934 1934 + o r- Asheville, N. C.-----Baltimore, Md............ Charleston, S. C.---Charleston, W. Va.... Charlotte, N. C.-----Columbia, S. C........... Cumberland, Md........ Danville, V a.______ 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----------Washington, D. C---Wilmington, N. C---Winston-Salem, N. C. $ 7,347 232,802 9,993 35,045 39,641 J4,860 4,919 4,769 19,567 8,453 13,628 4,626 10,262 12,509 5,776 33,266 2,749 J 5,146 102,878 17,094 151,922 6,799 25,049 $ 8,187 208,511 9,853 25,426 35,297 13,081 4,996 7,352 25,665 9,007 11,906 J4,619 8,926 12,952 5,556 33,004 2,582 21,610 102,575 15,576 143,360 6,461 27,162 —10.3% +11.6 + 1.4 +37.8 +12.3 +13.6 — 1.5 —35.1 —23.8 — 6.2 +14.5 + .2 +15.0 — 3.4 + 4.0 + .8 + 6.5 —29.9 + .3 + 9.7 + 6.0 + 52 — 7.8 Fifth District Totals $779,100 $743,664 + 4.8 The figures in the accompanying table show aggre gate debits to individual, firm and corporation accounts in the banks of twenty-three Fifth district cities for two equal periods of four weeks, one ended March 14, 1934, and the other ended February 14, 1934. No fig ures for 1933 are included in the table this month, all banks having been closed part of the corresponding pe riod last year. 3 Total debits in reporting cities during the four weeks ended March 14 amounted to $779,100,000, an in crease of $35,436,000, or 4.8 per cent, over debits total ing $743,664,000 reported for the preceding four weeks, ended February 14. Fifteen of the twenty-eight cities show higher figures for the more recent period, and several of the eight decreases were due to closing of tobacco markets in the latter part of February. All of the five largest cities reported higher figures for the period ended March 14, Baltimore increasing 11.6 per cent, Washington 6.0 per cent, Richmond 0.3 per cent, Norfolk 0.8 per cent, and Charlotte 12.3 per cent. Charlestown, W. Va., with an increase of 37.8 per cent, made the best record for the four weeks ended March 14, the marked increase in that city being due in large part to State financing around March 1. Commercial Failures Dun & Bradstreet Monthly Review for March says, “Insolvencies in February were the lowest in number and amount fon any month in fourteen years. For the month just closed, there were 1,049 failures in the United States, as compared with 2,378 similar defaults in February 1933 and 2,732 in February 1932, de creases of 55.9 per cent and 61.6 per cent, respectively. As to the liabilities for the insolvencies that occurred last month, the amount was $19,444,718, while in Feb ruary 1933 liabilities recorded totaled $65,576,068, a decrease in the 1934 month of 70.3 per cent.” Every section of the country made a better showing for Feb ruary 1934 than in the corresponding month a year ago, but in the main the greatest improvement was in the South. In the Fifth reserve district specifically, February 1934 defaults numbered only 62, with aggre gate liabilities amounting to $850,365, compared with 150 defaults and liabilities totaling $9,782,518 in Feb ruary last year, decreases for the current month of 58.7 per cent in number and 91.3 per cent in liabilities. In both number of failures and in liabilities involved, the February 1934 record of the Fifth district was better than the National average. Last month’s insolvencies were the fewest for any month since November 1920, and last month’s liabilities were the lowest since August 1920. Employment Employment conditions in the Fifth Federal reserve district are not so good in the latter part of March as they were earlier in the year, owing in large part to the tapering off of Federal relief work since the end of February. Some industries have added additional work ers in recent weeks, notably in the textile field, but the workers taken on have been fewer than the number laid off by lessened activity in Governmental aided projects. The weather has been very unfavorable for outside work during the past month, and work on many projects had to be suspended entirely during the last week in February and the first few days in March. The severe weather also prevented farmers making preparations for spring planting, and thereby postponed agricultural employment for some workers. Building 4 MONTHLY REVIEW tradesmen and other workers in construction fields con tinue to be the most generally unemployed class of peo ple in the district. Coal Production Bituminous coal production in the United States totaled approximately 31,950,000 net tons in February 1934, a smaller output than 32,916,000 tons mined in January this year, but 17.7 per cent more than 27,134,000 tons dug in February 1933. February had two less working days than January 1934, however, and there fore on a daily basis last month’s average production of 1,331,000 tons exceeded daily production of 1,266,000 tons in January. Total production during the pres ent coal year through March 10 amounted to 327,034,000 net tons, an increase of 15.7 per cent over 282,763,000 tons dug to the same date last year. In its February 24 report, the Bureau of Mines, De partment of Commerce, gave production figures by states for January 1934. West Virginia mined 8,460,000 tons during that month, ranking ahead of 7,930,000 tons mined by Pennsylvania, the second state, and ex ceeding by 18 per cent 7,157,000 tons produced in West Virginia in February 1933. Tidewater shipments of coal through Hampton Roads ports this calendar year through March 10 to taled 3,813,233 net tons, a higher figure than 3,691,526 tons shipped through the same ports to March 10 last year. Textiles Although the rate of operations last month in Fifth district textile mills was slower than the rates in either January this year or February last year, the mills as a rule sold their production for several weeks ahead. Cotton mills in the district consumed 210,481 bales of cotton in February 1934, a decrease of 9.1 per cent under 231,555 bales used in January 1934 and a drop of 4.7 per cent under 220,749 bales consumed in Feb ruary 1933. Of the 210,481 bales used last month, North Carolina mills consumed 107,463 bales, South Carolina mills 91,972 bales, and Virginia mills 11,046 bales. Consumption of cotton in the Richmond reserve district in February this year totaled only 44 per cent of National consumption, compared with 46 per cent of National consumption for the district in January 1934 and 50 per cent in February 1933. Cotton Statistics Spot cotton prices on ten leading Southern markets declined slightly during the past month, falling from an average of 12.29 cents per pound on February 16 to 12.15 cents on March 16. The average price a year ago, March 17, 1933, was 6.32 cents per pound. The average price on February 16 this year, 12.29 cents, was the highest price since the middle of July 1930. Cotton consumption in the United States in Febru ary 1934 totaled 477,890 bales, compared with 508,034 bales used in January this year and 441,203 bales in February 1933. Total consumption for the seven months of the present cotton season—August 1 to Feb ruary 28—amounted to 3,401,614 bales, compared with 3,253,390 bales consumed in the corresponding period ended February 28, 1933. Manufacturing establish ments held 1,654,369 bales on February 28, compared with 1,602,044 bales held on January 31 this year and 1,449,413 bales on February 28, 1933. Public ware houses and compresses held 8,638,995 bales in storage at the end of February this year, compared with 9,500,915 bales so held a month earlier and 9,377,783 bales on February 28 last year. February exports totaled 628,457 bales, compared with 739,352 bales sent abroad in January this year and 557,022 bales exported in Febru ary last year. Exports during the seven months of this cotton year totaled 5,547,907 bales, compared with 5,596,746 bales shipped over seas during the correspond ing seven months ended February 28, 1933. Consump tion of cotton in the cotton growing states numbered 376,211 bales in February 1934, compared with 406,343 bales used in January and 369,805 bales in February 1933. Last month’s consumption in the cotton growing states amounted to 78.72 per cent of National consump tion, compared with 83.82 per cent of National con sumption used in the cotton growing states in February last year. Of the 376,211 bales of cotton used in cot ton growing states in February, the Fifth district mills used 210,481 bales, or 55.95 per cent, compared with 59.69 per cent of Southern consumption attained in the district in February last year. Spindles active in the United States at some time in February 1934 numbered 26,355,498 compared with 25,653,324 in January this year and 23,669,146 in February last year. The final ginning report on the 1933 cotton crop was released by the Census Bureau on March 20, and showed the year’s production to be 12,659,953 run ning bales, the equivalent of 13,043,110 bales of 500 pounds gross weight. The final ginning figure was 1 per cent below the final crop estimate of the Depart ment of Agriculture made early in December. In the Fifth district, all of the cotton growing states showed lower ginning figures than the estimates of probable production. North Carolina ginned 685,661 equivalent 500 pound bales, compared with a forecast of 690,000 bales for the year, a decrease of 0.6 per cent; South Carolina ginnings totaled 735,103 bales, compared with a forecast of 742,000 bales, a decrease of 0.9 per cent; and Virginia ginnings totaled 34,366 bales against a forecast of 38,000 bales, a decrease of 9.6 per cent. All three states grew larger crops of cotton in 1933 than in 1932, due chiefly to unusually favorable weather during most of the growing season. The district total production of 1,455,130 bales shows an increase of 44,381 bales, or 3.1 per cent, over the 1932 yield of 1,410,749 bales. Tobacco Marketing Virginia sales of leaf tobacco during February amounted to 15,122,589 pounds, for an average price of $9.76 per hundred, compared with February 1933 sales amounting to 6,774,786 pounds, for an average of $6.12 per hundred pounds. Total sales for the sea son through February amounted to 106,836,739 pounds MONTHLY REVIEW this year and 62,518,688 pounds last year, and this year’s average price of $14.41 per hundred pounds compares with last season’s average of only $8.73 per hundred. Flue-cured markets sold 4,616,527 pounds at an average price of $12.65 in February 1934, com pared with 3,086,319 pounds sold for $4.54 per hun dred in February 1933. Season sales of flue-cured types totaled 80,900,471 pounds this year, and the average price was $16.18 per hundred pounds, compared with 42,796,623 pounds and a price of $8.11 last year. Most of the flue-cured markets completed their sales in Feb ruary, but a few remained opened the first week of March. Fire-cured sales in February were unusually large, amounting to 7,236,675 pounds, of which about 6 per cent was low grade tobacco sold to by-products plants. Sales in February 1933 totaled only 3,198,097 pounds, but last year’s average price of $7.57 per hun dred pounds was higher than the average of $7.05 paid in February this year. Total sales of fire-cured tobacco during the present season were 11,503,965 pounds, at $6.98 per hundred pounds, compared with season sales to February 28, 1933, totaling 12,808,710 pounds, at $8.28 per hundred. Burley markets remained open longer than usual this season, and sold 2,976,146 pounds in February, for an average of $11.85 per hundred pounds. No burley sales were made in February 1933, the markets closing in January. Total sales of this type this season through February amounted to 12,775,328 pounds at an average price of $10.62 per hun dred, compared with 5,755,418 pounds sold last year for an average of $14.74 per hundred. Sun-cured sales in February were smaller than usual, but the price im proved over the price paid in earlier months. Sales totaling 293,241 pounds at $10.10 per hundred last month compared with 490,370 pounds sold for an aver age of $6.66 per hundred in February 1933. The Feb ruary price was the highest since 1930. Season sales of sun-cured tobacco totaled 1,656,975 pounds this year, at $8.44 per hundred, compared with 1,157,937 pounds at $6.63 sold last year. The quality of tobacco sold during February was considerably better than a year ago. Warehousemen estimated that sales graded 18 per cent good, 35 per cent medium, and 47 per cent common, compared with the February 1933 classifica tion as 9 per cent good, 33 per cent medium, and 58 per cent common. North Carolina auction markets sold only 7,077,825 pounds of growers’ tobacco in February this year, and markets which had not previously closed did so during the month. Season sales for North Carolina are not yet available, but will be published in the Review next month. Agricultural Notes Weather has been unfavorable for early farm work this season, and preparations for planting are behind. Extreme cold, with some ice, damaged winter crops and trees in certain sections of the Fifth district, and caused the abandonment of considerable acreage in trucking counties along the coast. The Department of Agriculture issued an “intentions to plant report” on March 15, covering the chief crops except cotton. The 5 report says, “In using these March 1 reports, allow ance should be made for the fact that crop acreage re duction programs are still in progress and plantings may differ more from March 1 intentions than in ordinary years.” In the Fifth reserve district, Maryland farm ers expect to increase acreage in hay, Irish potatoes and sweet potatoes, but will reduce acreage in corn, oats, barley and tobacco. Virginia reports increased acreage in barley, Irish potatoes, sweet potatoes and peanuts, but reduced acreage in com, hay and tobacco. Approximately the same acreage in oats will be planted. West Virginia acreage in oats and Irish potatoes is ex pected to increase this year, but acreage in corn, hay and tobacco will be smaller. North Carolina farmers anticipate increases in acreage in oats, barley, Irish po tatoes and sweet potatoes, no change in peanuts, and decreases in corn, hay and tobacco. Farmers in South Carolina expect to grow more corn, oats, hay and Irish potatoes, but will reduce their tobacco acreage and plant about the same in sweet potatoes and peanuts. All Fifth district states plan to reduce tobacco acreage by 25 to 30 per cent, and all except South Carolina expect to plan less corn. Farmers are generally in better po sition financially this spring than they have been for a number of years, and they are buying more and better work stock and are putting their farm machinery in order or buying new machines. Construction Building Permits Issued in February 1934 and 1933 Baltimore, Md...... .— Cumberland, Md.-----Frederick, Md-------Hagerstown, Md........ Salisbury, Md--------Danville, Va---- -----Lynchburg, [Va-------Norfolk, Va.............. Petersburg, Va-------Portsmouth, Va.-----Richmond, Va.; ------Roanoke, Va. -------Bluefield, W. Va----Charleston, W. Va..... Clarksburg, W. Va— Huntington, 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 -----Winston-Salem, N. C. Charleston, S. C.---Columbia, S. C ------Greenville, S. C-----Rock Hill, S. C......... Spartanburg, S. C.— Washington, D. C.— 268 3 6 5 0 8 19 61 2 11 61 5 2 45 9 8 8 19 16 19 4 13 2 5 32 26 17 26 5 9 195 390 6 9 6 12 13 19 77 4 24 53 20 2 67 10 3 16 23 9 15 2 8 3 5 31 25 27 25 5 13 286 Total Valuation 1934 1933 $1,778,880 $ 397,080 1,575 825 4,477 5,118 9,290 1,405 0 7,700 3,900 6,975 18,919 13,313 32,226 51,090 7,000 1,550 3,518 5,000 45,333 87,316 16,731 720 235 10,300 6,935 6,409 5,205 8,575 10,590 1,070 26,987 9,775 399,220 19,851 43,274 9,125 17,605 5,080 15,350 27,350 12,415 12,147 3,100 2,690 6,740 2,800 16,150 26,610 11,901 6,255 .10,675 2,986 71,575 15,110 1,485 11,250 1,795 8,200 515,095 425,560 Totals --------------- 909 1,208 $2,668,107 $1,619,309 CITIES Permits Issued 1933 1934 Building permits issued in thirty-one cities of the 6 MONTHLY REVIEW Fifth district totaled only 909 in February 1934, a de crease of 24.8 per cent in comparison with 1,208 per mits issued in the corresponding month last year. Total valuation for all permits issued last month amounted to $2,668,107, an increase of 64.8 per cent in comparison with a valuation of $1,619,309 in February 1933. Nine teen of the thirty-one cities reported higher valuation figures last month than for the same month last year, but most of the 64.8 per cent increase occurred in Balti more; in fact, Baltimore showed a larger increase than the net gain reported for the entire district. Richmond reported higher figures last month than for February 1933, but Washington, Norfolk and Charlotte re ported lower figures. Contracts actually awarded for construction work in the Fifth reserve district in February this year totaled $19,341,529, including both rural and urban projects, compared with $8,326,270 in contracts awarded in Feb ruary 1933, according to figures collected by the F. W. Dodge Corporation. Of the February 1934 contracts, $2,311,554, or 12.0 per cent, was for residential struc tures, compared with $1,339,250, or 16.1 per cent of the total, for residence work in February 1933. Retail Trade, 30 Department Stores Richmond Baltimore Washington Other Cities District February 1934 sales, compared with sales in February 1933: +15.9 +13.3 + 7.1 +17.5 +11.3 Jan.-Feb. 1934 sales, compared with sales in Jan.-Feb. 1933: +22.9 +11.8 + 8.4 +21.0 +12.4 Feb. 28, 1934, stocks, compared with stocks on Feb. 28, 1933: +17.1 +26.6 +19.7 + 1.5 +20.0 Feb. 28, 1934, stocks, compared with stocks on Jan. 31, 1934: + 8.7 + 9.9 + 9.9 +11.4 + 9.9 Number of times stock was turned in February 1934: .261 .213 24 216 229 Number of times stock was turned since January 1, 1934: .546 .439 .476 .443 .465 Percentage of Feb. 1, 1934, receivables collected in February: 28.1 27.0 26.2 26.8 26.8 Department store sales in the Fifth Federal reserve district in February 1934 averaged 11.3 per cent above sales in February 1933. Thirty stores reported on their February business, and among the individual cities from which three or more reports were received Rich mond made the best record with an average gain of 15.9 per cent. However, the Other Cities group, in which West Virginia and North Carolina stores are important, made an even better comparison with a rise of 17.5 per cent. In total sales during the first two months of 1934 the thirty stores average a gain of 12.4 per cent in comparison with sales in the first two months of 1933. Stocks in the reporting stores increased seasonally during February, rising by 9.9 per cent over those on hand at the end of January, and on February 28 this year stocks averaged 20.0 per cent above stocks on hand a year earlier. The reporting stores turned their stock an average of .229 times during February, and between January 1 and February 28 stocks were turned .465 times, both of these averages being lower than those for the corresponding periods in 1933. The percentage of collections in February 1934 to total accounts receivable on February 1 was higher than the percentage for February 1933. Richmond reported the highest collection percentage, while Wash ington reported the lowest. W holesale Trade, 58 Firms 21 7; Groceries Dry Goods 6 Shoes 13 Hardware 111 Drugs February 1934 sales, compared with sales in February 1933: +37.3 +87.5 +60.5 +59.7 +23.5 February 1934 sales, compared with sales in January 1934: + .4 — 7.3 +44.0 —23.6 —11.3 Jan.-Feb. 1934 sales, compared with sales in Jan.-Feb. 1933: +30.6 +88.7 +63.9 +68.7 +17.9 Feb. 28, 1934, stocks, compared with stocks on Feb. 28, 1933: +18.6(8*) +87.8(3*) +13.5(4*) +18.4(7*) Feb. 28, 1934, stocks, compared with stocks on Jan. 31, 1934: — .5(8*) +22.6(3*) — 3.2(4*) + 1.0(7*) Percentage of Feb. 1, 1934, receivables collected in February: 71.7(12*) 43.3(4*) 48.7(6*) 38.0(11*) 56.3(7*) ♦Number of reporting firms. In February 1934 sales reported by fifty-eight whole sale firms in five lines made substantial gains over sales in February last year, although three of the five lines showed seasonal decreases in comparison with January 1934 sales. Cumulative sales for the first two months of the current year were well above sales in the first two months of 1933. Stocks on the shelves of the reporting dry goods and hardware firms advanced during February, but grocery and shoe stocks declined slightly. All lines reported larger stocks on hand at the end of Feb ruary than a year ago. Collections in February 1934 were distinctly bet ter in all of the five lines than collections in Feb ruary last year. (Compiled March 21, 1934) rfff.T" ..s': ...i s ..................... ■ ...- • MONTHLY REVIEW ----• ............-........— ... — .. ■== 7 BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Volume of industrial activity increased in February for the third consecutive month and there was a con siderable growth in factory employment and payrolls. Wholesale commodity prices, after advancing for two months, showed little change between the middle of February and the middle of March. Production and Employment Output of manufactures and minerals, as measured by the Board's seasonally adjusted index of industrial production, increased from 78 per cent of the 19231925 average in January to 81 per cent in February. The advance reflected chiefly increases of considerably more than the usual seasonal amount in the output of steel and automobiles, while activity at meat-packing establishments declined. Activity at textile mills, which in January had increased from the low level prevailing at the end of the year, showed a further moderate in crease in February, partly of seasonal character. In the first week of March steel production showed a further increase and in the following two weeks remained un changed. Factory employment and payrolls increased substan tially between the middle of January and the middle of February to a level higher, on a seasonally adjusted basis, than at any other time since the summer of 1931. Working forces on railroads also showed an increase, while at mines there was little change in the volume of employment. The number on the payrolls of the Civil Works Administration declined from about 4,000,000 in January to about 2,900,000 in the week end ing March 1. At automobile factories there was a large increase in the number employed to approximate ly the level prevailing four years ago. Substantial in creases were reported also for the textile, clothing, shoe and tobacco industries. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a decline in February, followed by an increase in the first half of March. The total volume indicated for the first quar ter is somewhat smaller than in the last quarter of 1933 but considerably larger than in the first quarters of 1932 and 1933. Distribution Freight traffic increased seasonally during February and the early part of March. Dollar volume of depart ment store sales on a daily average basis showed little change in February. Dollar Exchange The foreign exchange value of the dollar in relation to gold currencies declined in the second week of Feb ruary to within 2 per cent of its new parity and in the latter part of February and the first three weeks of March showed a further slight decline. Commodity Prices Wholesale prices of commodities showed little change from the middle of February to the middle of March, after a considerable increase earlier in the year. The index of the Bureau of Labor Statistics for the week ending March 17 was at 73.7 per cent of the 1926 aver age, compared with 73.8 per cent the week before and 72.4 per cent at the end of January. Bank Credit Between the middle of February and the third week of March imports of gold from abroad resulted in a growth of about $550,000,000 in the country’s monetary gold stock. Funds arising from these imports of gold and from expenditure by the Treasury of about $140,000,000 of its cash and deposits with the Federal Re serve banks were for the most part added to the re serves of member banks, which consequently increased by $600,000,000 during the four-week period. At the close of the period member bank reserves were nearly $1,500,000,000 in excess of legal requirements. Total deposits of reporting member banks increased by about $1,000,000,000 between the middle of Febru ary and the middle of March, reflecting the imports of gold, purchases by the banks of United States Govern ment and other securities, and a growth of bankers’ balances. During March money rates in the open market de clined further. Rates on 90-day bankers’ acceptances were reduced from 1/2 per cent to 1/4 per cent, and rates on prime commercial paper were reduced by 1/4 per cent to a range of 1-1 1/4 per cent. Yields on United States Government securities also declined con siderably. On March 16, the Federal Reserve Bank of Minneapolis reduced its discount rate from 3 1/2 to 3 per cent.
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