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MONTHLY REVIEW of Financial and Business Conditions F ifth Federal Federal Reserve Bank, Richmond, Va. reserve nc ^ D istrict March 31,1938 O N LY an insignificant change in discounts at the ally awarded for construction in the district last month Federal Reserve Bank of Richmond occurred be totaled 33.3 per cent less than the aggregate amount of tween February 15 and March 15, but there was a rise contracts awarded in February last year. Coal produc in the actual circulation of Federal Reserve notes, an tion declined further in February, both on a monthly and unusual development at this season. Inquiries and ap daily basis, in line with lessened demand for fuel from plications received indicate increased interest in industrial industry, and was approximately 36 per cent below pro loans made by the Reserve bank direct to business for duction in the corresponding month in 1937. In cotton working capital. Member bank reserve deposits rose textiles, the rate of operations in February declined slight further during the past month. In reporting member ly from the January rate, and production exceeded sales, banks, the only marked change in condition figures be inventories at mills increasing after falling in January. tween the middle of February and the middle of March Rayon manufacturers, on the contrary, increased ship was a substantial decline in demand deposits. On the ments substantially over January shipments, and only a other hand, time deposits showed a small increase in small increase in inventories occurred. Reports indicate member banks during the month, but declined in mutual that rayon weavers and knitters further reduced stocks on savings banks from the record high figure at the end of hand. Spot cotton prices rose during February but turned January. Debits to individual accounts in leading cities downward at the end of the month and continued to de of the Fifth district continued the decline which began cline in the first half of March. Toward the end of Feb in the second half of 1937, and in February showed the ruary when spot cotton prices went above 9 cents per largest percentage decrease in comparison with debits in pound a considerable amount of cotton was withdrawn the corresponding month of the preceding year of any from Government loans and sold on the market. Tobacco sales in February were small, most markets having closed month since the banking holiday. for the season. Producers of tobacco received approxi All lines of business continued in the recession which developed last fall, and February showed few signs of mately $187,518,330 for the 1937 crop, an increase of improvement, but the recession appears to have leveled $48,651,870, or 35 per cent, over $138,866,460 received out since the turn of the year. Employment data show a for the 1936 crop. Retail trade in department stores in larger number of idle workers than at any other time February declined about 1 per cent under February 1937 for a year or more, and shortened hours reduced pay sales, but held up better than most other lines of business. rolls in many industries which have not reduced numbers Stocks in department stores at the end of February aver on the rolls materially. Bankruptcies in the Fifth dis aged 8.4 per cent less than stocks a year earlier, and in trict increased slightly in number and moderately in most wholesale lines inventories were also somewhat lower liabilities in comparison with the figures for February this year. 1937, but the record of the Fifth district was better in There follows a statistical summary of conditions de both number and liabilities than the National record. scribed above: Registrations of new automobiles in February fell 38.3 9/o Feb. 1938 Feb. 1937 Change per cent below the figures for February last year, but the Debits to individual accounts (24 cities) .......................................... .. $ 998,445,000 $1,145,612,000 — 12.8 record for last month was better than the one for January No. of busines failures, 5th district 45 44 + 2.3 when a decline of 48.3 per cent was reported. Construc Liabilities in failures, 5th district.. $ 491,000 $ 402,000 +22.1 Sales, 53 dept, stores, 5th distrist... $ 7,228,625 $ 7,303,561 — 1.0 tion continues to lag far below normal levels, although Sales, 125 wholesale firms, 5th dist.. $ 8,583,000 $ 9,511,000 — 9.8 new passenger autos. 8,543 13,849 —38.3 the estimated value of building permits issued in 31 Fifth Registrations, Value bldg. permits (31 c itie s )..... $ 7,218,914 $ 7,127,198 + 1.3 district cities in February exceeded February 1937 valu Value of contracts awarded, 5th dist. $ 14,741,000 $ 22,103,000 — 33.3 consumption, 5th dist. (bales) 208,857 311,195 — 32.9 ation by 1.3 per cent. On the other hand, contracts actu Cotton Soft coal mined, U. S. (tons).......... 27,000,000 42,110,000 — 35.9 2 MONTHLY REVIEW BA N K IN G CONDITIONS eserve B a n k Statem ent: Discounts at the Federal Reserve Bank of Richmond rose by $38,000 between the middle of February and the middle of March, and on the latter date were $412,000 above discounts a year earlier. Industrial advances declined further by $8,000 during the month and $552,000 during the year, but interest in in dustrial loans has recently increased. No change occurred in holdings of Government securities last month, but there was an increase of $2,880,000 during the year. Total earning assets rose $30,000 between February 15 and March 15, 1938, and $2,739,000 between March 15, 1937, and March 15, 1938. The actual circulation of Federal Reserve notes rose by $992,000 since the middle of Feb ruary, an unseasonal development, but during the year the volume of Federal Reserve notes in actual circulation decreased by $1,786,000. Member bank reserve deposits continued to rise last month, increasing by $4,468,000, and on March 15 reserve balances exceeded those on March 15 last year by $2,299,000. Cash reserves of the Federal Reserve Bank of Richmond rose $3,590,000 during the past month, but were substantially the same as at midMarch 1937. R 000 omitted Feb. 15 Mar. 15 1938 1938 $ 561 $ 523 24 24 1,699 1,707 136,297 136,297 138,581 138.551 195,377 196,369 222,014 226,482 311,520 307,930 70.05 69.81 ITEMS Discounts held ........................... Open market paper................... Industrial advances ................. Government securities ............ Total earning assets ............ Circulation of Fed. Res. notes. Members’ reserve deposits . . . . Cash reserves ........................... Reserve ratio ............................. Mar. 15 1937 $ 149 25 2,251 133,417 135,842 198,155 224,183 311,518 70.54 41 R e p o r t i n g M e m b e r B a n k s : Condi tion figures reported by 41 member banks in 12 Fifth district cities show two material changes during the past month. Between February 16 and March 16, both this year, investments in securities declined by $19,078,000, but nearly all of this drop occurred in one bank. At the same time, the reporting banks showed a decrease of $12,381,000 in demand deposits, a drop which was distributed rather evenly among the several institutions. Other changes in the statement between February 16 and March 16 were small, loans and time deposits rising while reserve balance at the Reserve bank and cash in vaults declined. Between March 17, 1937, and March 16, 1938, loans and discounts in the 41 banks rose $10,567,000, but all other items declined. Holdings of securities decreased $48,528,000 during the year, and reserve balance at the reserve bank dropped $4,261,000. Deposits declined sub stantially, demand deposits with a decrease of $ 3 3 ,933,000 accounting for nearly all of it, time deposits falling only $324,000 during the year. S tatem en t of ITEMS Loans & discounts ....................................... Investments in securities ........................... Reserve bal. with F. R. bank............... Cash in vaults ............................................. Demand deposits ........................................... Time deposits ............................................... Money borrowed ........................................... 000 Mar. 16 1938 $243,798 365,449 136,582 16,172 428,730 196,189 0 omitted Feb. 16 1938 $243,670 384,528 136,854 16,194 441,111 195,731 0 Mar. 17 1937 $233,231 413,977 140,843 17,692 462,663 196,513 0 : Aggregate deposits in 10 mutual savings banks in Baltimore declined slightly during February, totaling $219,508,921 on February 28 in M u tu al S a v in g s B a n k D e p o s it s comparison with the record figure of $219,551,305 on January 31, 1938, but continued higher than deposits a year earlier, which totaled $214,538,516 on February 28, 1937. Deposits in 4 of the 10 banks rose during Feb ruary, but declined in 6 of them. e b it s to I n d i v i d u a l A c c o u n t s : Checks cashed against depositors’ accounts in banks in 24 Fifth district cities in February 1938 decreased seasonally by 16.9 per cent from January debits, and also totaled 12.8 per cent less than debits in February 1937. Every reporting city returned lower figures for February 1938 than for January, and all except Portsmouth, Va., reported lower figures than for February 1937. The February decline in debits in comparison with February 1937 debits was larger on a percentage basis than in any other month since the bank ing holiday, and reflects the decreased volume of general business activity this year. D CITIES Maryland Baltimore .......... Cumberland Hagerstown ----Dist. of Col. Washington Virginia Danville . . . . . . . Lynchburg ........ Newport News . Norfolk .............. Portsmouth ___ Richmond .......... Roanoke ............ West Virginia Charleston ........ Huntington ___ North Carolina Asheville ............ Charlotte .......... Durham ............ Greensboro ........ Wilmington . . . . Winston-Salem . South Carolina Charleston ........ Columbia .......... Greenville ........ Spartanburg . . . District Totals , - Feb. 1938 000 omitted Jan. Feb. 1937 1938 % of Change Year Month $ 280,982 6,111 6,533 $ 333,781 6,291 7,538 $ 333,259 7,456 7,412 — 15.8 — 2.9 — 13.3 — 15.7 — 18.0 — 11.9 207,524 246,204 236,526 -1 5 .7 — 12.3 6,660 12,421 7,477 40,880 3,487 123,049 20,913 9,396 15,281 8,208 48,509 4,089 160,984 24,308 9,097 13,437 8,819 47,018 3,476 131,888 25,286 — 29.1 — 18.7 — 8.9 — 15.7 — 14.7 — 23.6 — 14.0 — 26.8 — 7.6 — 15.2 -1 3 .1 + .3 — 6.7 — 17.3 42,714 13,686 49,657 15,602 44,570 15,573 — 14.0 — 12.3 — 4.2 — 12.1 9,954 45,096 22,463 15,170 33,544 9,148 31,744 12,296 51,749 28,612 17,571 39,959 10,196 40,702 10,896 54,915 25,946 17,540 35,768 10,137 35,106 — 19.0 — 12.9 — 21.5 — 13.7 — 16.1 — 10.3 — 22.0 - 8.6 — 17.9 — 13.4 — 13.5 - 6.2 — 9.8 — 9.6 13,743 22,503 14,983 7,660 $ 998,445 16,766 26,472 18,707 9,054 $1,201,932 16,405 26,557 19,606 8,919 $1,145,612 — 18.0 — 15.0 — 19.9 — 15.4 — 16.9 — 16.2 — 15.3 — 23.6 — 14.1 — 12.8 B U SIN E SS CONDITIONS E m ploym ent: Conditions in employment in the Fifth district continue unsatisfactory, with many people idle and others working shortened hours. Conditions in Balti more and in the Hampton Roads ports are apparently better than elsewhere, with conditions probably worse in coal mining sections of West Virginia and textile areas in the Carolinas. Construction work is giving employ ment to only a portion of the workers in building trades, and unskilled labor finds it especially hard to secure work. The following figures, compiled by the Bureau of Labor Statistics from records submitted by a large number of identical industries, show the trends of employment and payrolls in the Fifth district from January to February: STATES Maryland ................................................................ D. of Columbia .................................................... Virginia .................................................................. West Virginia ...................................................... North Carolina .................................................... South Carolina ...................................................... Percentage change from Jan. 1938 to Feb. 1938 In number In amount on payroll of payroll +1*7 + .2 4- 1*0 -f- 1-0 4* *4 +- 3.7 4- 2.1 + 8.6 — .6 -j- 4.5 + .1 +2.0 MONTHLY REVIEW o m m e r c ia l F a il u r e s : Bankruptcies in both the Fifth district and the United States declined seasonally in Feb ruary in comparison with January, when year-end settle ments usually cause a rise in failures, but the February record this year was worse than the February 1937 record. The number of insolvencies rose 2.3 per cent in the district and 48.5 per cent in the Nation in February 1938 over those in February 1937, and liabilities involved in failures rose 22.1 per cent in the district and 36.7 per cent in the Nation. The Fifth district showed the smallest percentage increase in number of failures of all the twelve Federal Reserve districts, but five districts reported a better record on liabilities involved. Dun & Bradstreet insolvency figures are as follows: C PERIOD February 1938 .................... January 1938 ...................... February 1937 ...................... 2 Months, 1938 .................. 2 Months, 1937 .................. Number of District 45 49 44 104 105 failures U. S. 1,071 1,320 721 2,391 1,532 Total Liabilities District U. S. $ 491,000 $13,359,000 719,000 15,035,000 402,000 9,771,000 $1,210,000 $28,394,000 925,000 18,432,000 A utomobile N ew Car R egistrations : Automobile sales in February continued to lag far behind sales a year earlier, but the comparison in February with the corre sponding month o f 1937 was better than the comparison in January. Last .month sales o f new passenger cars in the Fifth district declined 38.3 per cent from the number sold in February 1937. Virginia made the best record with a decline of 30.7 per cent, while South Carolina with a decrease o f 44.3 per cent showed the largest drop. January registrations of new cars declined 48.3 per cent from January 1937 registrations, giving a combined de crease for the first two months of 1938 of 44.1 per cent. The following registration figures for new passenger cars were furnished by R. L. Polk & Co., o f Detroit: Registrations of New Passenger Cars states Maryland ......... D. of Col............. Virginia ........... West Virginia . . No. Carolina . . . So. Carolina----District ....... Feb. 1938 1,512 1,063 2,023 1,015 1,825 1,105 8,543 Feb. 1937 2,341 1,880 2,921 1,664 3,060 1,983 13,849 % Change — 35.4 —43.5 — 30.7 — 39.0 —40.4 — 44.3 —38.3 2 Months 2 Months 1938 1937 3,160 5,714 2,178 4,017 4,464 6,997 2,139 3,967 4,229 8,051 2,289 4,291 18,459 33,037 % Change —44.7 —45.8 —36.2 —46.1 — 47.5 — 46.7 —44.1 3 totaled $22,103,000. February 1938 figures therefore show a decline of 33.3 per cent. Of the February con tract awards this year, 39.2 per cent represented resi dential construction, compared with 40.3 per cent in February last year. Contract award figures are now available by States for January 1938 and 1937, and are as follows: Construction Contracts Awarded STATES Jan. 1938 Jan. 1937 Maryland ................................. $ 2,935,000 $ 8,978,000 1,565,000 3,650,000 Dist. of Col................................ Virginia ................................... 8,736,000 6,710,000 West Virginia .......................... 1,684,000 760,000 North Carolina ........................ 2,839,000 5,046,000 South Carolina ........................ 1,921,000 7,586,000 Fifth D istrict......................$19,680,000 $32,730,000 % Change — 67.3 — 57.1 + 30.2 +121.6 — 43.7 — 74.7 — 39.9 oal M in in g : Bituminous coal production declined further in February and was 35.9 per cent below Feb ruary 1937 output. Coal mined in February 1938 in the United States totaled 27,000,000 net tons, compared with 30.880.000 tons in January 1938 and 42,110,000 tons in February 1937. Total production of bituminous coal during the present coal year to the latest available date— April 1 , 1937, to March 12, 1938—amounting to 381,141.000 net tons shows a decrease of 11.3 per cent from 429.738.000 tons dug during the corresponding period of the 1936-1937 season. Shipments of coal through Hamp ton Roads ports totaled 3,561,288 tons from January 1, 1938, to March 12, 1938, a decrease of 29.2 per cent from 5,032,305 tons shipped through the same ports in the corresponding period ended March 13, 1937. C C otto n T e x t il e s : There was little change in the rate of operations in cotton textile mills in the Fifth district in February and early March, but the slight change noted was downward. Trade reports indicate that sales of un finished cloth did not equal production during most of February and the first half of March, and mill stocks con sequently increased again after declining in January. Prices of textiles sagged further in early March, and mill margins narrowed somewhat. Consumption of cotton by States in the Fifth district in February 1938, January 1938, and February 1937, in bales, is shown in the accom panying table: C o n s t r u c t io n : Building permits issued in 31 Fifth dis MONTHS No. Carolina So. Carolina Virginia District trict cities in February 1938 numbered 1,807, with esti February 1938 ........................ 112,662 86,242 9,953 208,857 mated valuation of $7,218,914, compared with 2,101 per January 116,448 89,303 10,552 216,303 1938 ........................... February 1937 .......................... 171,997 125,472 13,726 311,196 mits issued in February 1937, valued at $7,127,198, a Months, 1938 ........................ 229,110 175,545 20,505 425,160 decrease of 14.0 per cent in number of permits but an 22 Months, 1937 ........................ 346,412 253,171 27,032 626,615 increase of 1.3 per cent in valuation in the 1938 month. Spindle activity in January was the same as in Decem However, the increase in valuation is chiefly accounted for by a rise of 114 per cent in Baltimore, where one ber, an average of 214 hours per spindle in place for the permit for a group of apartments was issued for more United States as a whole. However, South Carolina with than $1,000,000. Other large increases in valuation figures an average of 272 hours dropped from first to third place were reported for Charleston, W. Va., High Point, N. C., among the cotton manufacturing states, while Virginia and Columbia, S. C. The five highest valuation figures with 231 hours was seventh and North Carolina with 217 for February were reported as follows: Baltimore $3,hours was eighth. Both South Carolina and Virginia 339,507, Washington $1,396,435, Charleston, W. Va. showed lower figures for January than for December, but $452,706, Richmond $282,379, and Columbia, S. C. North Carolina hours of operation rose slightly in the $248,965. Contracts actually awarded for all types of construction later month. Total spindle hours of operation in January work in the Fifth district in February totaled only numbered 5,682,452,696 hours, of which the Carolinas and $14,741,000, according to figures collected by the F. W. Virginia accounted for 3,012,465,647 hours, or 53 per Dodge Corporation. Last year February contract awards cent, compared with 53.4 per cent in December 1937. MONTHLY REVIEW 4 R ayon : The Rayon Organon index of deliveries of rayon yarn by manufacturers £o weavers and knitters rose from 240 in December through 372 in January to 493 in February, but shipments in February were far below those of February last year when the index stood at 721. These figures are based on average monthly shipments in 1923-1925 as 100. Inventories of yarn rose slightly dur ing February, in spite of sharply increased shipments, and the supply on hand at the end of the month represented 3 months’ requirements compared with 2.8 months’ supply on hand at the end of January. Reports indicate that rayon grey goods and finished goods continued to decline in February, the increased shipments of yarn during the month having been used to meet current requirements. Loom activity showed substantial increase during Feb ruary, and at the middle of the month reached the highest point since last October in most constructions. Spot cotton prices advanced during February and middling grade upland cotton averaged 9.20 cents per pound on ten Southern markets on February 25, but after that date the price weakened and gradually declined to an average of 8.58 cents on March 18, a decrease of ap proximately $3 per bale. While the price was above 9 cents some cotton was withdrawn from Government loan stocks and sold by the growers. The Commodity Credit Corporatibn reports that about 5,112,000 bales from the 1937 crop were pledged on Government loans through March 18, of which 114,000 bales had been repossessed by producers for sale on the market. Consumption of cotton in American mills in February was the lowest for any month since July 1935, and exports were also low. Japan again led in cotton taken with 107,878 bales, the United Kingdom ranking second with 97,610 bales. C o tto n : Cotton Consumed and On Hand (Bales) Feb. Feb. 1938 1937 Fifth district states: Cotton consumed ................. Cotton growing states: Cotton consumed ................. Cotton on hand Feb. 28 in Consuming establishments Storage & Compresses----United States: Cotton consumed ......... Cotton on hand Feb. 28 in Consuming establishments Storage & Compresses . . . Exports of cotton ............. 208,857 311,195 360,558 555,118 2,992,415 3,778,643 665,677 3,512,826 4,520,965 1,814,997 2,061,120 11,655,837 5,961,745 486,411 4,230,991 398,744 3,921,493 obacco M a r k e t in g : Only a little tobacco was sold during February in the Fifth district, most of the markets T L iv e S t o c k o n F KINDS Horses & colts........... 1938 1937 Mules & mule colts.. ,,1938 1937 Cattle & calves......... ., ..1938 1937 Sheep & lambs........... , , ,1938 1937 Hogg & pigs...................1938 1937 Maryland 80,000 81,000 28,000 28,000 310.000 307.000 81,000 84,000 191.000 184.000 arm s Virginia 167.000 167.000 94.000 96.000 869.000 852.000 391.000 395.000 663.000 663.000 1937-1938 1936-1937 % Increase $141,056,845 $100,132,806 41 21,112,830 13,890,189 52 25,348,655________24,843,465_______2_ $187,518,330 $138,866,460 35 STATES North Carolina ............... South Carolina ............... Virginia .......................... 3 States ...................... T obacco M a n u f a c t u r in g : The Bureau of Internal Revenue reports tobacco products manufactured in Feb ruary 1938 and 1937 as follows: Feb. 1938 Smoking & Chewing Tobacco, Pounds ............. Cigarettes, Number ............... Cigars, Number ...................... Snuff, Pounds ........................ R e t a il T rade in D Sto epartm ent Same stores by States, with 23 stores added: Virginia (11). . . West Va. ( 9 ) ... No. Carolina (7) So. Carolina (11) District (53).. + 9.5 — 3.8 — 4.8 — .9 — T holesale + + — — 1.0 rade, — 125 F < >Change Feb. 1937 22,239,585 11,492,025,877 338,887,418 2,837,798 23,518,835 12,328,242,420 362,935,056 2,924,683 res Shoes (4) Elec. Goods (20) ........... Groceries (23) ................. Gen. Hardware (21) . . . . Indus. Supplies (11) ----Plumbing & Heating (9) Paper & Products (6 ).. Miscellaneous (11) ......... All Firms (125) ......... — 15.7 — 10.0 — 13.5 —25.2 — 5.3 — 6.8 —30.8 — 12.3 — 15.9 + 5.4 — 9.8 — — 6.8 6.6 — 3.0 Batio Feb. collections to accounts outstanding February 1 30.1 30.3 26.1 26.6 27.9 8.9 2.9 3.7 3.7 .2 ir m s : Net Sales Stocks Feb. 1938 Febc 28, 1938 compared with comp. with Feb. Jan. Feb. 28 Jan 31 1937 1938 1937 1938 LINES — 5.4 : Stocks Net Sales Net Sales Feb. 1938 Jan. 1 to date Feb. 28, 1938 comp, with compared with compared with February same period Feb. 38 Jan. 31 last year 1937 1938 1937 + 11.5 + 10.1 + 3.5 + 4.8 — 4.5 — 1.8 — 9.8 +11.8 — 1.2 — 1.7 — 11.6 + 8.8 — 6.6 — 3.4 — 2.4 +10.7 — 1.3 — .5 — 8.4 + 9.6 Richmond (3) Baltimore (8) Washington (6) Other Cities (13) District (30) . W Aug. 1 to Feb. 28 This Year Last Year 1,529,373 1,723,964 11,565,954 5,851,494 427,528 having closed prior to or early in that month. However, a few markets in Virginia did not close until the second week in March, and therefore total sales figures for the 1937-1938 season are not yet available. On the basis of sales made to the end of February, cash receipts by tobacco growers from the 1937 crop were approximately as follows, in comparison with receipts from the 1936 crop: + 65.7 — 11.1 — 1.0 + 8.9 — 4.9 — 9.9 — 2.0 — 8.9 - 3.8 - 1.8 + .9 — 19.6 + -5 — 14.5 + 14.7 - 9.1 + 4.4 — 4.1 —27.8 + 7.6 + 1.1 - 5.6 — 2.1 + 1.5 0.0 + 1.5 — 3.1 + 2.2 — 2.9 —22.1 + 4.1 - 4.1 — 2.1 Ratio Feb. collections to accounts outstanding February 1 40.8 93.2 38.7 82.1 93.2 45.6 63.9 48.1 61.5 60.9 60.3 Note: The wholesale trade figures are included through the courtesy of the Bureau of Foreign & Domestic Commerce. Only 97 of the 125 whole sale firms reported on receivables and collections, and only 76 on stocks. , J a n u a r y 1, W. Virginia 96.000 96.000 12,000 12,000! 588.000 576.0001 552.000 547.000 209.000 213.000 1938 and 1937: No. Carolina 69.000 69.000 305.000 301.000 638.000 651.000 62,000 62,000 1.133.000 1.111.000 (Compiled March 21, 1938) So. Carolina 20,000 20,000 187.000 189.000 352.000 374.000 11,000 11,(000 540.000 550.000 District 432.000 433.000 626,000 626,000 2,757,000 2,760^000 1.097.000 1.099.000 2.736.000 2.721.000 u. a 11.1163.000 11.445.000 4,477,0*00 4,571,000 <65,930,000 66,448,000 52.918.000 52.588.000 44^418,000 42,948,000 MONTHLY REVIEW, March 31, 1938 FEDERAL RESERVE BANK: OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) Volume of manufacturing production showed little change from January to February, while output of minerals declined further. Awards for residential building increased somewhat in February and rose considerably in the first half of March. INDUSTRIAL PRODUCTION PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 average =100. By months, January 1934 to February 1938. F R E IG H T -C A R LOADING S The Board’s seasonally adjusted index of industrial production, which in cludes both manufacturing and mining, was 79 percent of the 1923-1925 aver age in February as compared with 80 percent in January. The decline in the total index was accounted for chiefly by a reduction in output of minerals, par ticularly of crude petroleum. Steel ingot production showed about the usual seasonal increase and averaged 32 percent of capacity in February. Auto mobile production decreased slightly further, and output of plate glass con tinued to decline. Lumber production rose seasonally. In the first three weeks of March activity at steel mills and automobile factories was at about the same average rate as in February. In the nondurable goods industries there were moderate increases in output in February at textile mills and shoe factories, where production has recently been at low levels, while at meat-packing estab lishments activity declined. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, showed a sharp decline from January to February, reflecting chiefly a marked reduction in awards for publicly-financed projects. Contracts for residential building increased moderately. In the first half of March there was a considerable further increase reported for residential building and awards for other construction also increased. EMPLOYMENT justed for seasonal variation, 1923-1925 average =100. By months, January 1934 to February 1938. Factory employment and payrolls increased by somewhat less than the usual seasonal amount between the middle of January and the middle of Feb ruary. The Board’s seasonally adjusted index of factory employment was at 83 percent of the 1923-1925 average in February as compared with 84 in January. In the durable goods industries decreases were general in February, though not so large as in preceding months. Employment in nondurable goods industries increased somewhat following a period of rapid decline. Employ ment in trade, at mines, on the railroads, and in the construction and public utility industries decreased somewhat from the January level. DISTRIBUTION W H O L E SA L E Value o f department store sales, as measured by the Board’s seasonally adjusted index, declined from 90 percent of the 1923-1925 average in January to 88 percent in February, and in the first three weeks of March there was a further decrease. Sales at variety stores and mail order houses in February showed somewhat less than the usual seasonal increase. Freight-car loadings decreased further in February, reflecting chiefly re duced shipments of coal and grain, and showed a seasonal increase in the first two weeks of March. The current level of carloadings is about 25 percent less than a year ago. P R IC E S J COMMODITY PRICES --------- Index compiled by the U. S. Bureau of Labor Statistics, 1926 =100. By weeks, 1934 to week ending March 19, 1938. EXCESS RESERVES OF MEMBER BANKS The general level of wholesale commodity prices, as measured by the Bureau of Labor Statistics’ index, showed little change from the middle of February to the third week of March. There were seasonal increases in prices of livestock and meats, while prices of such basic commodities as wheat, cotton, rubber, zinc, and bituminous coal declined. BANK CREDIT Excess reserves of member banks increased during the first three weeks of March to over $1,500,000,000, the highest level since last April. The bulk of the increase occurred at New York City banks, which in the third week of the month held over $700,000,000 of excess reserves. During February and the first half of March, there was little net change in deposits and in total loans and investments at reporting member banks in 101 leading cities. Holdings of United States Government obligations declined at banks in New York but increased in Chicago. Commercial loans, which had decreased sharply in the four preceding months, showed a further moderate decline. MONEY RATES AND BOND YIELDS of all member banks and for selected New York City banks, January 3, 1934, to March 12, 1938. Conditions in the short-term money market continued easy in March. Rates on Treasury bills were slightly lower and prime commercial paper was quoted at a range of from % to 1 percent as against the flat 1 percent rate which had prevailed since a year ago. Yields on Treasury bonds and notes, after declining for the past six months, advanced slightly around the middle of March. Yields on corporate bonds also advanced in March, reflecting principally declines in prices of railroad bonds.
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