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MONT

j uce 2 0 % of the nation's broilers.
District farm s produce 20

F E D E R A L R E S E R V E B A N K OF R I C H M O N D



M A Y 1958

Taking a trip to some Fifth District tourist
attraction this summer? Is your itinerary plan­
ned? N o? Then this travelogue may help you
to decide just what route you will take. It carries
you on an extensive tour of the five-state Fifth
District, featuring side views of the farming areas
— scenes you will encounter as you travel. These
on-the-farm scenes will give you an idea of just
what Fifth District agriculture is like, and the
narrative accompanying these panoramic shots
points up interesting side lights of the agriculture
of this five-state area.
By the time we have finished our tour we shall
have enjoyed some of the most beautiful scenery
in the country and visited areas steeped in the
history of the nation. In fact, the birthplace of
the nation’s history is in this District, and much
of the country’s subsequent history was made here.
As we have already indicated, however, our main
concern in this travelogue is economic— the agri­
cultural pattern of this District.
M AN Y TYPES OF FARMS
One of the most out­
standing features noticed as the travelogue unfolds
is the diversity of agriculture in the District.
Starting our tour on the Eastern Shore of Vir­
ginia, we find poultry and truck farming, along
with small grains, potatoes, and sweet potatoes.
The upper Eastern Shore of Maryland, on the
other hand, is one of the state’s three important
dairy regions.
Moving across the flying roadbed of the Chesa­
peake Bay Bridge, we pass through the tobacco
country of southern Maryland into northern Vir­
ginia. Here is a heavy concentration of dairy and
beef cattle farms. According to our tour nar­

2



rator, it is Virginia’s leading cattle area. As
would be expected with large numbers of cattle,
there are also thousands of acres of pasture land
and hay crops.
From northern Virginia, the roving camera
tour moves over to the Shenandoah Valley— to
the northern end of Virginia’s fruit belt where
acres and acres of apple and peach orchards stand
in review. Here, too, are the Shenandoah Valley’s
well-known commercial broiler and turkey farms
with their characteristic long and low poultry
houses. “ Rockingham County,” comments the
narrator, “ produces more turkeys than any other
county in the nation. And, of course, it is famed
for its broilers.” As the camera carries us still
farther south on U. S. Route 11, large apple and
peach orchards continue to stand out as important
income producers, but beef cattle and dairy farms
are also numerous.
Southwest Virginia comes into view, and we
still notice large numbers of beef and dairy cattle.
A good-sized sheep population also dots the hill­
sides, for this is Virginia’s leading sheep-producing area. Field-crop farms predominate, how­
ever, with burley tobacco being chief among the
crops. As the tobacco fields flash by, the nar­
rator notes, “ Burley is one of the light air-cured
tobaccos used in making cigarettes. It is also
important in the manufacture of smoking tobacco
for pipes and ‘roll-your-own’ cigarettes.”
AN ALTERNATE ROUTE At this point, the nar­
rator states: “ Should you prefer another route,
turn northwestward after crossing the Chesapeake
Bay Bridge.” The camera then shifts from south­
west Virginia to the alternate route through Mary­

- , , '' j |^

land and West Virginia. As we travel by camera
through the gently rolling countryside of Mary­
land’s Piedmont Plateau, we readily notice that
dairying is the most important agricultural enter­
prise. Beef cattle compete with dairy herds for
the pasture land, however, and wheat is the pre­
vailing cash crop.
Westward into the Hagerstown Valley, dairy­
ing continues to be a leading means of livelihood.
Fruits, however— particularly apples and peaches
— become big business as the camera carries us
farther west through Washington County, Mary­
land, into the valley area of West Virginia.
Leaving the northern end of West Virginia’s
valley area and heading south through the South
Branch, Tygarts, and Greenbrier River Valleys,
it is soon apparent that livestock is the most im­
portant source of farm income. Specialized com­

mercial broiler and turkey houses are numerous,
and large numbers of sheep, beef and dairy cattle
graze the highland pastures. As would be ex­
pected with such large numbers of livestock, hay
and small grains are the principal crops.
Shortly after leaving the lower Greenbrier Val­
ley, our alternate camera route converges with
the main route at the Virginia-North Carolina
border. Traveling eastward across the mountains
of the Tar Heel state from this point, we notice
that here, too, burley tobacco is one of the princi­
pal crops. Commercial truck crops are grown
extensively, and there are large apple orchards in
the foothills and on the tablelands of the plateaus.
Poultry farming is a major enterprise. Not only
is there a heavy concentration of commercial
broiler farms, but there are also many farms which
specialize in flocks for the production of hatching
eggs. Beef and dairy cattle are other major in­
come producers.
From the mountains of North Carolina, the
filmed tour moves southward through the North
and South Carolina Piedmont. Here dairying
provides a regular means of support for many
farmers, while tobacco is a big money-maker for
others. There are large acreages of cotton in
North Carolina’s southern Piedmont and in the
South Carolina Piedmont, and commercial turkey
production is concentrated in the border counties
of both states. There are also huge specialized
peach farms in Spartanburg and Greenville Coun­
ties, South Carolina.
CO N TRA CT FARM ING

“ Production of commer­

cial broilers has become a major enterprise on
many Piedmont farms,” comments the narrator.

Beef cattle, long im portant in some are as, are now cushioning losses in income resulting from cuts in tobacco and cotton acreages.




Flue-cured
is the

to b acco —the

chief

m oney

p rin cip al

crop

in

kind

V irg in ia

used
an d

in

cigare ttes—

N orth

C a ro lin a .

‘‘Faced with the need for adding to their income
because of cuts in cotton acreage and encouraged
by the contract financing arrangements of feed
dealers and poultry processors, farmers have gone
into the broiler business in a big way. North
Carolina has rapidly become a major broiler-pro­
ducing state and now ranks third in the nation
in total output. In fact, with Maryland and V ir­
ginia standing seventh and ninth, the Fifth District
can claim title to three of the top ten broiler states
in the nation.
“ Contract arrangements differ, of course, but
they usually provide financing for the grower.
Such arrangements greatly reduce a grower’s fi­
nancial risks and involve joint production decisions
between the growr and the dealer or processor.
er
These decisions include the selection of chicks,
kinds of feeds to use, weights at which the broilers
will be marketed, and market outlets. Usually
the dealer or processor has fieldmen who furnish
technical supervision or advice.”
As the travelogue moves southeastward across
the sandhills, cotton continues to dominate the
farm scene. But here in the sandhills, as in the
Up Country, peaches and broilers are important
enterprises on many farms.
Across the narrow sandhill region into the
South Carolina coastal plain, known locally as the
Low Country, cotton is the big money crop. Com­
mercial production of vegetables is significant, and
watermelons are a specialty. There is some dairy­
ing, but other livestock are of more significance.
At this point, our travelogue circles north to
pick up Highway 301 near Lake Marion. Travel4



Cotton no lon ger reign s as king o f the District's agricu ltu re
but

it still

has

an

im portant

p lace

in

m any

farm

plans.

ing north 0 301 we soon notice tall distinctive11
looking barns. The older ones, many of which
are still used for curing tobacco, are made of logs
and chinked with mud. Large acreages of to­
bacco, somewhat different from that seen earlier,
are growing in the fields. “ This,” says the nar­
rator, “ is the land of the famous flue-cured to­
bacco. Here in the warehouses at Dillon, Smithfield, Wilson, and Rocky Mount rings the auction­
eer's chant as he sells some of the world’s finest
cigarette tobacco grown on nearby farms.”
As we continue northward through the Tar Heel
state, cotton appears to be second to tobacco as a
major crop. Because of small-sized farms, nearly
all cotton is picked by hand rather than by the machine-monsters used on the huge farms out west.
“ Truck farming,” the narrator notes, “ is a lead­
ing enterprise in the Tidewater sections. Through­
out the coastal plains and Tidewater counties,
farmers are attempting to offset the losses in in­
come resulting from reduced acreages of the big
money crops. As a result, hogs and beef cattle
are rapidly gaining in importance as sources of
cash income, and the poultry business— both broil­
ers and turkeys— is booming.”

Leaving Highway 301 just before reaching the
Virginia border, the camera swings farther east
into the Virginia-North Carolina coastal plains.
“ This area,” remarks the narrator, “ is the oldest
and most intensive peanut-producing area in the
country. It is here that most of the large-sized
salted nuts and the roasted-in-the-shell ball park
peanuts are grown.”
It is quite evident, however, that peanuts are in
keen competition with cotton and flue-cured to­
bacco. And there are large acreages of corn and
soybeans. “ Hogs,” remarks the narrator, “ also add
substantial sums of money to farmers’ pockets.”
PART-TIME AN D RESIDENTIAL FARMS A map of
the entire five-state area flashes on the screen to
show the location of noncommercial farms— those
part-time and residential farms which generally
contribute little to the market place. It also high­
lights the areas wfhere off-farm employment is
heaviest. “ A significant fact about Fifth District
agriculture,” comments the narrator, “ is that twofifths of all farms are operated as part-time or as
residential farms. In actual numbers this means
about 260,000 out of the approximately 630,000
farms enumerated by census takers.”
Focusing close attention to the map, it is evi-

The lure of extra cash incom e p rovided by o ff-fa rm w ork is
e n co u ra gin g thousands of farm people to farm only p art time.




dent that part-time and residential farms are not
necessarily associated with the large metropolitan
areas. They are widely distributed, in fact, and
their concentration tends to be heaviest in areas
where manufacturing, mining and forest-product
industries are located. A case in point is the
South Carolina Piedmont, with its many textile
mills, where nearly 60% of all farms— far more
than anywhere else in the state— are classified as
either part-time or residential. A similar situa­
tion exists in the coal mining areas of southwest
Virginia. Fewest noncommercial farmers, on the
other hand, are found in the tobacco-growing
coastal plains of the Carolinas.
“ Of even more significance,” notes the narrator,
“ is the fact that nearly half— some 293,000— of
the District’s farm operators work off their farm,
either at a nonfarm job or on someone else’s farm
for pay. Two-thirds of these farmers are em­
ployed in nonfarm work for 100 days or more
during the year. Still another indicator of the
importance of off-farm wT
ork to today’s District
farmer is that 35% of all farm families are receiv­
ing more than half their income from nonfarm
sources.
“ Since the number of farmers who engage in
off-farm work is some 33,000 more than the num­
ber of part-time and residential farmers, this
points up the fact,” the narrator adds, “ that a sub­
stantial number of commercial farmers— probably
those with the smallest sales— also have nonfarm
jobs at some time during the year.” This is a
significant feature of today’s farm scene, for it tells
much of the changes now taking place.

Com m ercial

production

of h ogs, im portant incom e-producers

for years, is fa st becom ing a m ajor enterprise on m any farm s.

FEDERAL FUNDS-A UNIQUE
WHAT THEY ARE

The Federal funds market is m ade up of lenders and
borrowers of reserves which member banks have on deposit with Federal Reserve
Banks. These deposits are Federal funds—a special, unique kind of money, for
they are the only kind of money which can be used by member banks to meet
legal reserve requirements. One w ay banks with a reserve deficiency m ay
obtain additional reserves is to "buy" Federal funds from banks w ishing to "sell"
reserves. A ctually, of course, these purchases are borrow ings and these sales,
loans. M any transactions in Government securities are settled in reserve funds,
and nonbank Government securities dealers sometimes also have Federal funds
to sell or wish to buy them.




HOW THE MARKET WORKS

Banks w ishing to trade in Federal funds m ay find
buyer through direct contact with other banks, through a correspondent relationship, or
services of a broker in New York City. Although this broker neither buys nor sells Feder<
arranges a sufficiently large number of the Federal funds transactions to be accepted as tl
on the going price for them. This price is the Federal funds rate quoted am ong money ra
papers.
Once a transaction is arranged between two com mercial banks, usually by telephone,
of reserves on the books of the Federal Reserve from one to the other is a sim ple matter. I
are within the same Federal Reserve district, a phone call, followed by a confirm ing le
Federal Reserve Bank is usually sufficient. If the banks are in different districts, funds ar
over the System's w ire transfer service. In the reversing transaction on the follow ing
move in the sam e manner. A slightly different procedure is used for a transaction betw
and a nonbank Government securities dealer; the dealer, having no account at a Fede
Bank, has to arrange for a bank to handle the transfer.
About three-fourths of all Federal funds transactions are in the form of "straight" Fed<
unsecured overnight loans. However, in the Fifth District, and in several others, repurc!
ments and buybacks are more popular; essentially they both involve acquiring Federal fu
the sale of securities and repaym ent through the repurchase of these securities. The typ
funds trading unit, regardless of the form of the transaction, is $1 million or some multip

fHE NEW YORK TIMES, SA TU RD /
Mays

OF Money

6 mos. to Jar

F r id a y , A p r il 1 1 , 1 9 5 8
F e d e ra l F u n d s :
O p e n . H ig h .
Low .
F in a l.

i%%

i%%

iy2%

II Loans to B eaters; Ob
o v em m en ts *. 2 @ 2 Vi %
,1 Loans to Brokers: Stock
1
xch. C ollateral * *3 % % -4 %
me L oa n s:
30«§§ days . . . . . . 3 & % - 4 %
4 - 6 m onths * *. . . Z % % -4 %
E ffe c tiv e Jan* 22, 1958.
om m ercia i P a p er:
4-8 m o n ^ s ^ ^ . ,2 % -2 % %
E ffe ct!;

%

srties.

i%%




Shr. e a r n s ..
Shrs. outstd
♦Excludes

M iller
Year to Fel
Net sa le s..
N et Income
Cm.shr.earr
Shrs. outstd
Results fo.
Millner Corn^
1957. for eo

Nort

WHEN THE MARKET BEGAN

The Federal funds
market originated in New York City during the early '20's,
only to become inactive when the large excess reserves of
the '30's appeared. It did not revive until after 1951, when
more restrictive credit policies forced member banks to rely
to a greater extent on borrow ings and higher interest rates
encouraged banks with excess reserves to sell them for the
income. New York City is the hub of the present national
Federal funds market, but Chicago dealers also handle a
sizeable share. Both centers, on balance, gen erally acquire
funds from the rest of the country. Without an y form al
structure or organization of dealers the 150 banks which
participate actively in the Federal funds market have had
a d aily ave rage trading volume in recent years of an esti­
mated $ 8 0 0 -$ l, 100 million.

In early April, the U. S. Treasury offered to
pay an annual interest rate of 2
for the use
of $3.5 billion for four years and ten months.
Investors and dealers were so eager to provide
funds at these terms that they put in subscriptions
for over four times the amount the Treasury
wanted. Just six months earlier, the Treasury
had to pay 4% for a loan with an almost identical
maturity.
An even more spectacular drop in borrowing
costs has occurred in the very short-term Treas­
ury bill market. Last November the Treasury
paid 3.47% for $1.7 billion maturing in 91 days.
Borrowing with an issue of bills dated April 24
cost the Treasury only 1.05%.
Similar reflections of increasing availability of
funds were apparent in the long-term capital mar­
kets between late summer 1957 and the end of
this January. A state guaranteed tax-exempt
bond issue with Aaa rating was sold in August
1957 at an interest cost of 3.60% ; in January a
state Aaa issue with a similar maturity sold at a
cost of only 2.33%. A top quality corporate long­
term bond issue was offered to the public last
September at a yield of 4.75%, while an equally
high quality corporate issue was offered at only
3.65% in late January. The prices of long-term
bonds weakened during February and March
(that is, interest yields rose), this being in large
measure a response to continuing very heavy de­
mands for funds by corporations and state and
local governments. Since late March, however,
the cost of borrowing in the long-term capital
markets has again edged lower.
NEW EASE IN BA N K RESERVES
In addition to
these signs of increased availability of funds in the

8



money and bond markets, the nation’s commercial
banks have experienced a considerable relaxation
in recent months in the pressure against their
reserves. Reserve requirements of member banks
w ere reduced in late February, again toward the
r
end of March, and yet again in the last half of
April. These reductions freed approximately
$1,440 million of reserve funds. It is estimated
that these freed reserves could support as much as
$9 billion of additional bank credit. During this
period, the banks experienced a relatively weak
loan demand, and a large share of their funds,
consequently, has been diverted to the securities
markets, thus contributing to the decline in yields
experienced there. Federal Reserve Bank dis­
count rate reductions since last November have
brought the cost to member banks of borrowing
from their Reserve Banks down from 3 32% to
/
124 % , and have also had repercussions in the
money and bond markets.
Rising bond prices and more readily available
bank credit directly affect the lending activities of
other financial organizations. Sales finance com­
panies, for example, rely on both the securities
markets and the banks for a very large share of
their lendable funds. When money becomes more
readily available to them and at lower cost, they,
and other lenders, tend to stimulate consumer
borrowing by increased advertising and by alter­
ing the terms of the loans they make. The easing
of credit conditions in the capital markets and in
the banking system is already resulting in credit
being offered to consumers on more attractive
terms than just a few months ago, thus providing
one offset to reluctance to go into debt to purchase
automobiles, home appliances, and the like.

MORE M O N EY FOR M O RTGAG ES M o r t g a g e
credit availability has also been strongly influenced
by the changing conditions in the money and capi­
tal markets and in the banking system. As in­
terest yields on bonds decline, investors find the
return from mortgage loans more attractive. This
is particularly true of Government guaranteed or
insured mortgages which have maximum interest
charges fixed by law, 5^4% in the case of FH A
loans and 4Ya% for V A loans. Until the recent
declines in the money and capital market rates,
these maximum mortgage rates, after allowance
for the higher cost of making mortgage loans and
the cost of monthly servicing of the loans after
they are made, were just not competitive with the
returns that investors could obtain elsewhere.
Now that other rates have declined, these mort­
gage rates are beginning to appear attractive and
a greatly increased volume of funds is consequent­
ly being made available for this type of financing.
Recent changes in the rates charged on conven­
tional mortgage loans (not guaranteed or insured
by the Government) reflect the increasing desire
of investors for this type of investment. Six
months ago, most conventional mortgage loans
were being made at 6% — currently the average
in the Fifth District is 5 ^ % with “ choice” loans,
that is, those with high owner’s equity and top
credit rating, being made as low as 5%.
SIG N IFIC A N C E OF EASIER CREDIT
Recent cred­
it developments highlight a very basic aspect of
the nation’s financial system— the absence of credit

stringency as a cause or aggravating influence in
recession. While the economy has been making
its adjustments from the unsustainable rate of ex­
pansion of 1956-57, the credit mechanism has re­
sponded in a manner to help facilitate and cushion
other adjustments in the economy as well as to
promote recovery.
In the face of declining sales and cutbacks in
production, the supply of lendable funds, from
both commercial banks and savings institutions,
has increased. This increasing availability of
credit reflects a declining demand for some types
of credit, an increasing supply of savings, and
credit easing actions taken by the Federal Reserve
System. These developments have greatly in­
creased the liquidity of the country’s financial
organizations and are leading them to seek more
actively means of profitably employing funds
which have grown to exceed the liquidity require­
ments imposed on them by the nature of their
liabilities. The highly competitive nature of the
financial markets is making these funds available
on terms to attract potential borrowers.
While ready availability of credit on attractive
terms are not the only factors considered by po­
tential borrowers, they do provide some induce­
ment to utilize credit for the promotion of business
and personal endeavors. To the extent that such
inducement outweighs other considerations, in­
creased availability of credit at lower cost during
recession makes a positive contribution to eco­
nomic recovery.

A fter rising alm ost steadily fo r over three years, the yield on 3-m onth Treasu ry bills has declined sh arp ly since late fa ll o f 1957.




9

The Fifth District
Recessionary forces are still strong in the Fifth
District business picture, but some hopeful signs
are now appearing. Final reports on March ac­
tivity presented a better picture than was expected
in view of the adverse weather that prevailed, and
some April developments— notably in textiles,
lumber, and department store sales— were im­
provements from the recent past.
The favorable aspects, while providing relief
from widespread declines, cannot be taken as
marking a turning point in the recession. Bitumi­
nous coal production lost further ground in April,
and unemployment continued to number substan­
tial, although widely varying, proportions of the
labor force in each District state.

indications of a slow expansion in demand for
print cloth for immediate or early delivery.
A pickup in demand was also reported for some
lines of synthetic gray goods, particularly nylon
but also acetate fabrics. This was accompanied
by a firming of prices. The rise in demand for
synthetic fabrics was particularly significant be­
cause it brought the first sizable forward buying
of the year in these markets.
Shipments of southern pine lumber, an impor­
tant product of District lumber mills, ran slightly
ahead of a year ago during the first three weeks
of April, with production reportedly in balance
with shipments. New orders exceeded both pro­
duction and shipments during the three weeks.

M AN UFACTURIN G
A number of manufacturing
industries improved their operations between Feb­
ruary and March, causing total manufacturing
man-hour figures for March to show a better re­
lation to February totals than had been true in
the two preceding years. The situation was spot­
ty, and many of the gains were due to seasonal
forces.
There was an increase in man-hours worked in
durable manufacturing industries in March as
compared with February. The modest rise, less
than 1%, compares with no change between the
same months last year and a slight decline the
year before. It stemmed from small gains in the
lumber industry, electrical machinery, metal fabri­
cation, and transportation equipment.
Among nondurable manufacturers, chemicals
and apparel made the best showing in gains over
the preceding month. Printing and allied oper­
ations posted a small gain, and in doing so, they
almost recovered their year-ago position. For
nondurables as a whole, total man-hours were
down less than 1% from the preceding month and
held within 6°/ of March 1957.
o
Textiles, currently accounting for nearly half
of nondurable manufacturing man-hours in this
District, slid off further in March. Since then,
however, there have been signs of improvement
in the making for this industry. The undertone
of the cotton gray goods market, especially those
unfinished fabrics intended for print cloth, was
reported to have improved recently, with increased
interest expressed in deliveries throughout the
remainder of the year. This was reinforced by

CIGARETTES
Cigarette production alone among
all District industries showed a year-to-year gain
in man-hours in March. This is a capsule picture
of an industry in which output is currently ex­
pected to exceed the record level of 1957.
The 1957 total and the current high rate of
output are part of an interesting period in the
history of cigarettes. The previous peak— which
was bettered by nearly 2% last year— had come
in 1952, and the two years following brought de­
clines in output as widespread health fears cut
consumption and domestic sales. Pessimists
sketched a gloomy future for cigarette manufac­
turers, but domestic sales last year exceeded those
in 1952 by 4% and are continuing strong. E x­
ports were up similarly, and only sales to the
armed forces overseas showed a decline from 1952.
Underlying this resumption of growth has been
a product revolution of substantial magnitude. In
just a few years the cigarette industry shifted from
concentration on a relatively few brands of “ stand­
ard” length, unfiltered cigarettes to numerous
brands involving various combinations of lengths
and filters. Of these the filter brands have shown
spectacular growth. Accounting for little more
than 1% of the market in 1952, they were 38%
of last year’s domestic sales.
King-size cigarettes, like filter tips, grew from
a position of little importance to one of promi­
nence, but the timing differed. First marketed
on a broad scale after World War II, the longer
brands had captured one-fourth of the domestic
market by 1954. The growth of filters came
partly at the expense of king-sizes, however, and

10



N ew ca p a city fo r a still-gro w in g industry: P. Lo rillard C o m p an y 's recently opened cigarette p lant at G reen sboro, N. C .

last year's sales were down to 21% of the U. S.
total.
In addition to the innovation of the filter-tip
cigarette, the menthol cigarette has grown in popu­
larity, and several new brands have come onto the
market in the last few years. Menthol cigarettes
are said to be likely to capture 8% or 9% of the
market this year as compared with an earlier posi­
tion of relative insignificance.
The revolution in the industry has extended
also to the packaging of the product. New designs
have been introduced by all the companies in the
shape and appearance of containers. Such changes
were undoubtedly inspired by the recent radical
product changes, but competition in the cigarette
industry appears to have brought forth every
effort to increase the product’s attractiveness to
the consumer.
Despite the recent gains in production, average
per capita consumption of tobacco in cigarettes
has declined since its peak in 1953. Cigarette
sales have not kept abreast of the growth in popu­
lation of a smoking age, and the decline in the
role of king-size cigarettes and the smaller tobacco
content of filter-tip brands have cut back the
tobacco content of the cigarettes sold. The smaller
consumption, combined with lower exports, has
been responsible for the substantial acreage re­
duction in District flue-cured tobacco planting last
year.
Few geographic areas dominate an industry to
the extent that North Carolina and A^irginia stand
out in cigarette output. Their production, con­
centrated in Richmond, Durham, Greensboro,
Reidsville, and Winston-Salem, currently accounts
for nearly 81% of total national output. It affords
full-time employment to more than 25,000 workers




and gives seasonal employment to an additional
20,000 workers in processing leaf tobacco.
Industry spokesmen have estimated that con­
sumer expenditures for cigarettes in 1957 exceeded
$5 billion, which is a new high level for the indus­
try and compares with $4,765,000,000 reported by
the Department of Commerce for 1956. Consumer
expenditures for cigarettes accounted for 85% of
all tobacco products, a newThigh after a continuous
rise for many decades.
RETAIL TRADE Department store sales in April
made a good showing. The estimated index for
the month, after seasonal adjustments that include
the shifting date of Easter, was up 11% from
March, passing the year-before mark for the first
A fter a sh arp decline from the 1952 p eak, Fifth District c ig a ­
rette output g a in e d stea d ily to reach a new h igh in 1957.

1
1

time since August. Good weather and aggressive
merchandising were both in evidence in April and
both contributed to the higher volume of sales.
Furniture stores and appliance stores shared
with department stores in a moderately good
March volume. All three groups showed betterthan-seasonal gains from February, despite the
effects of bad weather during the month.
CO N STRU CTIO N
Contracts for future construc­
tion awarded in March were 29% above those in
February and only 7% short of March 1957.
Residential construction contracts led the rise,
gaining 71% from the previous month and ex­
ceeding the year-ago total. This is at least con­
sistent with reports from District builders and
lenders that easier mortgage terms and more ready
availability of funds are being reflected in in­
creased plans for home building.
Nonresidential building contracts still lag, de­
spite a substantial increase in March. Awards
for public w’orks and public utility construction
declined by one-fifth from February, reversing
their good showing in that month.
BITUMINOUS C O A L The early weeks of April
cut short the improved District production of coal
that appeared in March. Output declined, and
the first three weeks of April fell short of the
same weeks last year by one-third.
District mines have run somewhat behind those
in other part of the country, in some measure be­
cause of their heavy reliance upon foreign sales.
Foreign coal cargoes loaded at District ports since
January 1 were down 28% from last year; this
was reflected in the accumulated production figures
for the period, which showed District mines lag­
ging 1957 by one-fourth while the United States
total was down slightly more than one-fifth.
EMPLOYM ENT District employment responded
mildly to upward seasonal pressures in March.
The rise was less than that which occurred in the
past two years, however, and it came entirely in
occupations other than manufacturing. Contract
construction increased its workers by 6% from
the previous month, and trade employment was
up seasonally.
The number of unemployed receiving compensa­
tion, the principal regional measure of unemploy­
ment, has recently shown a wide diversity among
District states. The table gives a measure of the
extent and progress of recession in each state.
12



IN SU RED U N E M P L O Y M E N T AS A
PER CENT OF COVERED E M P L O Y M E N T
Mid-April
1958
Maryland
District of Columbia
Virginia
West Virginia
North Carolina
South Carolina

Mid-April
1957

2.0
1.2
1.8

6.5
1.9
4.4
13.6
7.9
5.7

8.1

United States

3.7
5.6
3.9
3.7

West Virginia’s sharp rise in unemployment
resulted principally from declines in bituminous
coal, steel, and glass. The resulting rate of in­
sured unemployment was one of the five highest
for the individual states of the country. Other
District states were at mid-April doing somewhat
or appreciably better than the national average.
BA N KIN G
Business borrowers, who figured
T
prominently in the increased demand for loans at
Fifth District member banks during the final
month of the first quarter, did not maintain their
demand. Early in the second quarter, emphasis
shifted momentarily from business to bank and
security loans, which shot upward to push total
loans outstanding to their highest 1958 level. In
subsequent weeks, however, sharp reductions in
these two types of loans, supplemented by slight
declines in commercial, industrial, and agricul­
tural loans, brought loans outstanding on April
23 to 1.2% below their level at the beginning of
the year.
The recent reductions in reserve requirements
freed a substantial amount of bank funds which—
in the absence of strong loan demand— were used
primarily to purchase Government securities.
Holdings of Governments on April 23 were more
than 7% above the first of the year.

P H O TO C R ED ITS
C o ve r—Southern States C o o p e rative 2. V irg in ia C h a m ­
ber of Com m erce

3. V irg in ia Dept, of A gricu ltu re

4. U n ive rsal

Tobacco

Lea f

C o m p an y

Cotton M anufacturers Institute, Inc.

-

A m erican

5. A gricu ltu ra l

P h o to grap h y by G ra n t H eilm an , Lititz, Pa. - V irg in ia
C h am b e r of Com m erce

11. P. Lorillard

C om p an y.