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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT RICHMOND, VIRGINIA DISTRICT SUM M ARY. October probably measured up to seasonal average in the volume of business transacted in the Fifth Reserve District, and certain developments were somewhat more favorable than had been expected. Fall liquidation of indebtedness at member banks and at the Federal reserve bank might have been relatively slow on account of the marked decline in cotton prices, but thus far this year the payment of loans and rediscounts has been up to seasonal average. Crops were generally above the 1925 crops in yield, and the tobacco crop was more profitable than for several years. Except in western and northwestern South Carolina and a few counties in North Carolina and Virginia, agricultural conditions this year are probably at least as good as those of 1925, and the sections dependent primarily upon Bright tobacco or fruit are considerably better situ ated than for several years. Debits to individual accounts during the four weeks ended November 10th exceeded debits during the preceding like period, in spite of a holiday during the later period and the occurrence in the earlier period of October 1st, a quarterly payment date. Savings deposits reached record figures at the end of October, evidencing the large reserve purchasing power of the public. Labor is seasonally employed at the same wage levels of the past year. Bituminous coal production in West Virginia is exceptionally high, and coal exports are running several times normal figures, chiefly as a result of the British coal strike. Textile mills are handicapped by uncertainty over future cotton prices, but they are running practically full time on orders for early shipment and in October the Fifth District mills consumed more cotton than in October 1925. Building permit figures for October were moderately below those of a year ago, but were in large volume nevertheless, and assure workers in the building trades employment for several months. Wholesale trade was less favorable than most lines of business in October, but retail trade was at seasonal levels. The cotton price situation is the chief obstacle to an optimistic attitude toward the near future in the Fifth District, but it is too early to judge the extent to which general business will be influenced. RESE R V E BA N K O PERAT ION S. Reserve bank operations at the Federal Reserve Bank of Richmond followed seasonal trends between the middle of October and the middle of November, in spite of lower cotton prices which might have been expected to retard the fall liquidation of indebtedness in the lower half of the Fifth District. Rediscounts for member banks declined from $47,855,000 on Oc tober 15th to $37,160,000 on November 15th, reflect ing the marketing of agricultural products, but as a result of the increased demand for currency incident to crop marketing and the approach of the holiday NOVEMBER 30, 1926 shopping season the volume of Federal Reserve notes in actual circulation rose during the month from $80,081,000 to $82,247,000. The reduction in redis counts lowered the total bill holdings from $61,152,000 to $52,190,000 during the period under review. Re serve deposits of member banks changed little during the month, rising from $68,812,000 to $68,846,000. As a result of the several changes mentioned, the cash reserves of the Federal Reserve Bank of Richmond rose from $94,556,000 on October 15th to $108,791,000 on November 15th, and the ratio of reserves to note and deposit liabilities combined rose from 61.57 per cent to 68.86 per cent between the same dates. Member banks are using Reserve bank credit con siderably less at present than they were a year ago. On November 15, 1925, rediscounts held by the Fed eral Reserve Bank of Richmond totaled $44,527,000, and the actual circulation of Federal Reserve notes was $90,074,000, while on November 15th iliis year rediscounts totaled $37,160,000 and Federal Reserve notes in actual circulation aggregated $82,247,000, the figures showing declines of $7,367,000 and $7,827,000 in rediscounts and note circulation, respec tively. Total bill holdings of the Federal Reserve Bank of Richmond rose during the year, however, from $49,317,000 to $52,190,000, due to an increase of approximately $10,000,000 in bankers acceptances purchased in the open market. Member bank reserve deposits declined within the same period from $70,657,000 to $68,846,000, and as a result of the changes in the items enumerated the cash reserves of the Federal Reserve Bank of Richmond dropped from $117,505,000 on November 15, 1925, to $108,791,000 on November 15, 1926. The ratio of cash reserves to note and deposit liabilities combined, which stood at 71.91 per cent at the middle of November last year, was 68.86 per cent on November 15, 1926. SA V IN G DEPOSITS Deposits in fourteen mutual savings banks in Bal timore increased last month to the highest point on record. The fourteen banks had aggregate deposits of $157,836,179 at the close of business October 31, 1926, compared with $156,255,880 on deposit at the end of September this year and $151,139,262 at the end of November last year. Time deposit figures de clined slightly in sixty-eight regularly reporting mem ber banks between October 13th and November 10th, this year, but the decrease was probably due to the shift of Christmas savings funds from time to demand deposits. The reporting member banks had time de posits aggregating $208,972,000 on November 10, 1926, compared with $209,133,000 on October 13, 1926, and $201,244,000 on November 11, 1925. In Richmond alone, nearly $2,000,000 were paid into Christmas savings clubs during 1926. CONDITION OF SIXTY-EIGHT REPORTING MEMBER BANKS IN SELECTED CITIES 1. 2. 3. 4. 5. 6. 7. ITEMS Total Loans and Discounts (including all rediscounts ............................................ Total Investments in Bonds and Securi ties .................... ............................................. Reserve Balance with Federal Reserve Bank ............................................................. Cash in Vaults................................................ Demand Deposits .......................................... Time Deposits ................................................ Borrowed from Federal Reserve Bank.... Nov. 10, 1926 $ 520,344,000 135.185.000 42.612.000 14.688.000 386.855.000 208.972.000 16.570.000 1 Oct. 13, 1926 Nov. 11, 1925 $ 529,272,000 139,294,000 40,649,000 15,020,000 388,682 000 209,133,000 22,698,000 $ 524,775,000 127.994.000 41.930.000 15.224.000 382.990.000 201.244.000 20.916.000 The accom panying table shows totals of the principal items of condition reported by sixtyeight identical member banks of the Fifth Federal reserve district on three dates, November 10, 1926, October 13, 1926, and November 11, 1925. These data afford an opportunity for comparing the latest available figures with those of a month and a year earlier. A comparison of the figures for November 10th with those of October 13th, both this year, shows the usual fall liquidation about up to seasonal levels, in spite of the retarding effect of low cotton prices. The volume of loans and discounts outstanding declined $8,928,000 during the month under review, and the reporting banks reduced their rediscounts at the Richmond R eserve bank by $6,128,000. D uring the same period, the reporting banks’ investm ents in bonds and securities dropped $4,109,000, but they increased their reserve deposits at the Reserve bank by $1,963,000. Cash in the vaults of the reporting banks declined $332,000 between October 13th and November 10th, and both demand and time deposits also declined, the form er decreasing $1,827,000 and the latter $161,000. T hat the customers of the sixty-eigh t reporting banks are in a stronger financial position this fall than they w ere a year ago is shown by a comparison of the November 10, 1926, figures with those of November 11, 1925. T otal loans and discounts outstanding on the 1926 date w ere $4,431,000 below the loans and discounts on the corresponding date last year, demand deposits w ere $3,865,000 higher this year than last, and time deposits rose $7,728,000 during the year. This improvement in the po sition of the banks’ customers enabled the banks to increase their investm ents in bonds and securi ties by $7,191,000 during the year, and to reduce their rediscounting at the Reserve bank by $4,346.000. Reserve balances and cash in vaults changed comparative little during; the year, the form er in creasing $682,000 and the latter decreasing $536,000. DEBITS TO INDIVIDUAL ACCOUNTS CITIES Asheville, N. C....................................................... Baltimore, Md........................................................ Charleston, S. C.................................................... Charleston, W. Va............................................... Charlotte, N. C...................................................... Columbia, S. C....................................................... Cumberland, Md.................................................... Danville, Va............................................................ Durham, N. C........................................................ Greensboro, N. C................................................... Greenville, S. C..................................................... Hagerstown, Md................................................... Huntington, W. Va............................................. Lynchburg, Va....................................................... Newport News, Va............................................... Norfolk, Va............................................................ Raleigh, N. C........................................................ Richmond, Va........................................................ ! Roanoke, Va............................................................ ! Spartanburg, S. C................................................. I Washington, D. C................................................. ! Wilmington, N. C................................................. ! Winston-Salem, N. C........................................... Totals......................................................... TOTAL DEBITS DURING THE FOUR WEEKS ENDED Nov. 10, 1926 Oct. 13, 1926 Nov. 11, 1925 $ 31,353.000 $ 31,245,000 $ 25,630,000 390,905,000 376,970 000 370,839,000 39,089.000 27,262,000 26,541.000 35,147,000 33,709.000 33,135,000 49,148 000 50,521 000 47,526,000 18,676,000 21,732,000 18,831.000 8,633.000 8,326,000 8,272,000 15 258 000 9,216.000 10.433,000 33,785 000 30,667.000 28,032,000 24 539 000 23 584.000 19,885,000 21,357.000 21.143,000 24,330,000 10,693,000 10,110.000 9,968.000 24.354 000 24,408 000 25,542,000 18,551,000 20.548,000 18,469,000 10,712 000 11,022 000 8,736,000 75 639,000 76,350,000 73,518,000 23,317,000 21,160.000 27,696,000 136.130.000 145.336,000 150,686,000 29,511.000 27,370,000 25,962,000 13.603 000 13.170,000 14,875,000 230,619,000 222,219,000 225,262,000 21.285,000 22,258,000 21,887,000 40,724,000 37,905,000 35,337,000 $1,303,028,000 $1,266,231,000 $1,251,392,000 Debits to individual, firm and corporation accounts in tw enty-three trade centers of the F ifth Federal reserve district are shown in the accom panying table. Three equal periods of four w eeks 2 are used, ended Novem ber ioth and October 13, 1926, and N ovem ber 11, 1925, thus affording an op portunity for com paring the transactions of the latest four w eeks w ith the preceding like period this year and the corresponding period last year. Debits in the tw enty-th ree reporting centers totaled $1,303,028,000 during the four w eeks ended Novem ber 10, 1926, an increase of $36,797,000, or 2.9 per cent, over the total of $1,266,231,000 for the preceding four w eeks this year, ended October 13th. In view of the large volum e of quarterly p ay ments that fell in the earlier period and the occurrence of the Election day holiday in the later period, the increase w as probably up to seasonal average. F ifteen of the tw enty-th ree reporting centers showed higher figures during the period ended N ovem ber ioth than for the preceding like period this year, while eight centers reported low er totals. The four w eeks ended Novem ber 11, 1925, w itnessed debits totalin g $1,251,392,000 in comparison w ith a total of $1,303,028,000 reported for the four w eeks ended Novem ber 10, 1926, an apparent gain this year of $51,636,000. The 1925 period contained tw o holidays, how ever, while the 1926 period contained only one holiday. Sixteen cities reported higher figures this year than last, while seven cities reported low er figures, five of the seven being largely affected by the low er prices prevailing this year for cotton and cotton textile products. BUSINESS FAILURES — Comm ercial failures in O ctober rose to 1,763 in number, compared with 1,437 failures in Septem ber this year and 1,581 failures in October last year. L ast m onth’s indebted ness of $33,230,720 also compares unfavorably with $29,989,817 reported for Septem ber 1926 and $29,543,870 for October 1925. Some increase 111 insolvencies during the last quarter of the year is sea sonal, but the O ctober record is more unfavorable than seasonal trends alone account for. In the F ifth D istrict, October insolvencies numbered 127, w ith a gg rega te liabilities of $3,394,205, the largest number since A pril and the greatest total of liabilities since January. The number of failures last month was below the 149 reported in October 1925, but last m onth’s liabilities wrere a third larger than the $2,524,656 of October last year. BUILDING OPERATIONS FOR THE MONTHS OF OCTOBER 1926 AND 1925. Z0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Increase or Per Cent Premits Issued M a w fY k r» c+ riir‘tir» « A lte ra tin n o Decrease of New Repairs CITIES of Increase 0 Total or 1926 | 1925 1926 I 1925 1926 1925 1926 1925 Valuation Decrease Z Baltimore, Md. , 506 7061 1,228' 1,234 $ 2,417,040 $ 4,372,080 $ 701,520 $ 621,360 1 —$1,874,880 — 37.5 % 1 Cumberland, Md... 35 23 5 5 5,230 22,929 68.3 2 28,330 1,242 55,247 Frederick, Md___ 10 5 01 2 39,100 28,830 1,150 9,120 30.4 3 0 Hagerstown, Md.. 20 29 9 5 31,720 52,715 2,755 — 21,875 — 39.4 4 1,875 Danville Va......... 12 11 7 3 103,830 540 100,410 1,443.7 5 6,415 3,535 Lynchburg, Va..... 22 13 40 27 18,641 — 6,725 — 13.7 6 20,145 30,605 22,376 Norfolk, Va........... 102 87 68 46 159,248 143,478 24,085 28,518 17.0 7 36,833 Petersburg, Va..... 9 9 6 4 13,700 840 — 199,490 — 86.1 8 230,885 18,535 Richmond, Va. 74,541 115 148 87 80 405,594 306,921 86,201 22.6 9 62,069 Roanoke, Va. 86 113 34 35 252,855 289,519 11,340 — 34,476 — 11.5 10 13,528 Bluefield, W. Va. 4 6 16 27 33,115 78,378 3,875 — 48,518 — 59.0 11 620 Charleston, W. Va. 52 34 14 20 118,995 26,720 — 106,868 — 45.8 12 206,468 7,325 Clarksburg, W. Va 17 26 9 8 13,420 2,450 — 26,530 j— 64.2 13 38,900 1,400 Huntington, W.Va. * 57 * 1 * 191,670 * 2,500 14 Parkersburg,W.Va 39 44 4 7 150,285 125,975 5,350 1,500 20,460 15.6 15 Asheville, N. C..... 25 58 54 73 268,500 344,195 33,978 — 79,908 — 21.1 16 29,765 Charlotte, N. C..... 71 60 17 25 778,446 1,062,875 26,280 43,940 — 302,089 — 27.3 17 Durham, N. C. 9 19 382,100 49 52 11,815 157,225 391,775 604,835 357.8 18 Greensboro, N. C. 66 63 41 34 382,685 363,254 — 348,637 — 46.4 19 387,843 19,775 8 191,910 High Point, N. C.~ 59 63 12 177.120 5,250 10,350 19,890 10.9 20 Raleigh, N. C. 44 54 15 11 184,275 270,732 25,395 — 73,812 — 24.9 21 38,040 Salisbury, N. C..... 16 27 13 11 48,575 65,700 1,980 — 9,847 — 14.5 22 9,258 Wilmington, N. C. 21 9 5 5 377,150 25,300 3,500 9,000 357,350 1,240.8 23 Winston-Salem, N. C. 99 76 54 93 252,275 280,839 65,169 — 18,128 — 5.2 24 75,605 Charleston, S. C... 16 17 30 36 28,085 8,762 10,818 18,240 26,745 136.6 25 Columbia, S. C..... 17 26 44 53 63,325 13,652 — 9,319 — 10.9 26 71,602 12,610 Greenville, S. C..... 10 16 28 22 55,000 109,000 3,255 — 50,530 — 45.0 27 6,725 Spartanburg, S. C. 29 26 14 38 68,500 57,400 15,790 — 1,930 — 2.6 28 2,760 Washington, D. C. 309 173 527 472 3,632,160 3,013,390 414,255 343,055 547,570 16.0 29 Totals.......... !1,867 1,995 2377 2,388 $10,527,280 $11,971,482 $1,865,596 $1,810,928 —$1,389,534 — 10.1% * These figures not included in totals. —Denotes decrease NOTE- The figures in the above table reflect the amount of work provided for in the corporation limits of the several cities, but take no account of suburban developments. The accom panying table shows the number of building permits issued in October 1926 and O c tober 1925 in tw en ty-eigh t leading F ifth D istrict cities, together w ith estim ated valuation figures for 3 the contem plated projects. Perm its for new construction totaled 1,867 'm O ctober this year, com pared with 1,995 permits issued during the corresponding month last year, while October 1926 valu ation figures for new w ork aggregated $10,527,280 compared w ith $11,971,482 in October 1925. In alteration and repair w ork, the figures for both number and valuation w ere alm ost the same, 2,377 permits estimated to cost $1,865,596 issued in O ctober this year com paring w ith 2,388 permits and a valuation of $1,810,928 issued in O ctober a year ago. Total valuation figures for all classes of w ork amounted to $12,392,876 in October 1926 and $13,782,410 in October 1925, a decline this year of $1,389,534, or 10.1 per cent. Eleven of the tw en ty-eigh t cities showed higher figures this year than last, while seventeen cities reporter low er totals. Contracts awarded for construction w ork in the F ifth D istrict in October, according to figures compiled by the F. W . D odge Corporation, totaled $35,249,973, of which $8,698,408 was for residential construction. LABOR — The labor situation in the F ifth D istrict is good, sufficient w orkers being available for all needs w ithout any m arked surplus of w orkers at any point. T extile em ployees are fully employed, with some over time w ork. Coal miners are seasonally busy. Common labor throughout the dis trict is busy with road, street, sew er and other construction w ork, and the building trades are as fully employed as usual at this season of the year. In some agricultural sections farm labor is com paratively scarce, but not to a greater extent than in most recent years. W age levels remain un changed in practically all lines of w ork, perhaps the best indicator of the balance existin g in the sup ply of and the demand for w orkers. COAL — Bitum inous coal production in October totaled 54,592,000 net tons, the fifth consecutive increase over production in the preceding month. Total production this calendar year to N ovem ber 6th amounts to 474,014,000 tons, the highest figure in any recent year except 1923, when reserve stocks had to be rebuilt after the long strike of 1922. Export figures continued very high in October, a total of 3,477,506 net tons goin g abroad, of which the three F ifth D istrict ports at Baltim ore, Ham pton Roads and Charleston handled 85 per cent. T otal exports this calendar year, to Novem ber 1st, reached 15,079,976 tons, nearly four times the tonnage usually sent abroad, the large 1926 figures resulting from the British coal strike. D uring October, W est V irginia dropped slightly below Penn sylvania in coal production. TEXTILES — Consumption of 236,566 bales of cotton by F ifth D istrict mills in O ctober showed a slight decline from the 240,748 bales used in Septem ber but a substantial increase over 205,929 bales consumed in O ctober 1925. North Carolina mills used 128,999 bales in O ctober this year, South C aro lina mills used 96,996 bales, and V irginia mills 10,571 bales. M ost of the F ifth D istrict mills are run ning from 85 to 100 per cent full time, and some instances of overtim e operations have been reported. The mill authorities are carefully lim iting their operations to w ork on orders, thereby preventing accumulation of cloth or yarn for storage. The continued decline in cotton prices has reduced the placing of forw ard orders even below the low level which has prevailed for several years, but a con siderable volume of hand to mouth buying is being done and the relatively low stocks of goods in secondary hands would seem to ju stify the expectation of improvem ent in demand for textile products in the near future. COTTON — Cotton prices continued to decline during the month since our October 31st Review was w ritten, but the decline w as much less m arked than that of the preceding month, during w hich it had become clear that a very large cotton crop had been grow n this year. The price for spot cotton in the Carolinas fluctuated betw een 11.50 cents and 11.75 cents per pound during m ost of the month between October 15th and N ovem ber 15th, averaging 11.72 cents for the w eek ended N ovem ber 13th, the latest complete w eek for which figures are available. The D epartm ent of A griculture estim ates this y e a r’s crop of cotton to be the largest on record. In its report on condition as of Novem ber 1st, the year's probable production w as given as 17,918,000 bales, compared w ith final ginnings of 16,104,000 bales in 1925, an increase this year of approxim ately I,800,000 bales, based on the Novem ber 1st estim ate. The report states that October w eather w as generally favorable for the developm ent of late bolls. There is some disposition to leave low er grade cotton in the fields, how ever, since the price has declined, and some late bolls and open cotton suf fered rain and frost dam age early in November, all of which m ay possibly have some effect on the final figures for the year. The Census B ureau’s ginning report to Novem ber 1st showed 11,250,038 bales, in comparison w ith II,207,197 bales ginned to Novem ber 1, 1925. Ginning figures to October 1st this year w ere behind those to the same date last year, but during O ctober the backw ard position of the crop w as over come, and ginnings to Novem ber 1st exceeded those of 1925 to the same date. Both the ginning re port and the D epartm ent of A gricu ltu re’s estim ate of probable production w ere higher than traders had expected, but the cotton m arket w as not g re a tly influenced. Cotton consumption by Am erican mills totaled 568,532 bales in O ctober this year, compared w ith 571,105 bales in Septem ber 1926 and 543,679 bales in October 1925. T otal consumption for the 4 three months of this season to Novem ber is t amounted to 1,640,289 bales, compared w ith 1,477,997 bales used during the corresponding three months of 1925. Cotton held by m anufacturing establish ments on Novem ber is t this year totaled 1,215,873 bales, compared w ith 1,216,571 bales so held a year ago, but cotton in public warehouses and compresses amounted to 5,469,809 bales on Novem ber 1, 1926, compared w ith 4,499,000 bales in storage on Novem ber 1, 1925. E xports in October totaled 1,369,820 bales, against 794,584 bales sent abroad in Septem ber, and 1,421,482 bales exported in O c tober last year. E xports since A u gu st is t total 2,555,733 bales against 2,489,631 bales sent over seas during the corresponding period in 1925. A total production of 2,^18,000 bales of cotton w as forecast for the F ifth D istrict states by the D epartm ent of A gricu ltu re m its report for Novem ber ist. N orth Carolina leads the D istrict w ith an indicated yield of 1,210,000 bales, South Carolina and V irginia follow ing w ith 1,160,000 bales and 48,000 bales, respectively. Production in both Carolinas this year exceeds the 1925 production, but V irginia's 1926 crop appears to be approxim ately 5,000 bales below 1925. North Carolina’s prospective increase this year is 108,000 bales and South C arolina’s gain is 271,000 bales. The crop is being ginned much later this year than in 1925 in the F ifth D istrict, and picking is also considerably be hind that of last year. A s a result of the low prices, especially for the poorer grades, it is possible that a considerable amount of the crop w ill not be picked. One report from an eminent cotton pro ducer states that in certain places in this D istrict cotton is bringing very much more than in others and that this difference is due to the production of superior varieties, to proper handling and proper m arketing. The same authority expressed regret that many planters in the D istrict persist in raising quantities of cotton which is of such short staple and so poorly handled that it brings the bottom of the m arket. One prominent textile m anufacturer reports that he had bought a considerable quantity of very excellent 1 1-16 inch cotton which had been raised by foresighted planters from superior se lected seed. TOBACCO — N O R T H C A R O L IN A apparently has the largest tobacco crop in the United States this year, the D epartm ent of A gricu ltu re’s forecast of 371,580,000 pounds for that state exceeding K e n tu ck y ’s yield by approxim ately 3,000,000 pounds. A uction m arkets in North Carolina sold 107,403,917 pounds of producers’ tobacco in October, at an average of $26.73 Per hundred, and total sales this season to Novem ber is t aggregated 190,246,474 pounds at an average of $25.90 per hundred pounds. W ilson led October sales w ith 20,415,266 pounds, and Greenville sold 14,221,152 pounds, but in average price paid in October Greenville led w ith $30.70, Farm ville ranking second w ith an aver age of $29.54. The season opened w ith considerably higher prices than last year, but October did not w itness as large an increase over Septem ber figures as usually occurs, and therefore prices at the end of O ctober w ere very little higher than at the same time a year ago. On the whole, however, prices are rem unerative and grow ers are pleased w ith the m arket. V IR G IN IA auction warehouses opened in October and sold 19,515,298 pounds of tobacco, com pared w ith 10,197,129 pounds sold in October 1925. The quality sold w as low, as is* usual at the open ing of the season, but w as considerably better than last year. There has been an increase in the number of warehouses operating this year, larg ely as a result of the closing of the Co-operative A ssociation receiving stations. O ctober prices averaged $24.51, compared w ith $15.76 paid in October last year. Both the number of pounds sold and the average price paid in October w ere the highest for any month since 1922. Danville sold 10,048,903 pounds in October, leading all m arkets in poundage, but D rak e’s Branch led in average price w ith $27.10 per hundred. South Boston w as second in both pounds and price, selling 3,452,970 pounds for $25.44 per hundred. V irg in ia ’s crop this year is esti mated at 137,080,000 pounds, compared w ith 129,497,000 pounds grow n in 1925. The state ranks third in national production this year, but grew only about 35 per cent as much as either N orth C aro lina or K entucky. SO U T H C A R O L IN A tobacco m arkets w ere nearly all closed in October, only an occasional w are house rem aining open to clean up the crop. Production in South Carolina totaled 60,060,000 pounds this year, compared with 71,040,000 pounds in 1925 and a five-year average of 59,178,000 pounds. Prices in South Carolina w ere much higher this year than in 1925, and the 1926 crop w as therefore more profit able, even though shorter in pounds. M A R Y L A N D tobacco improved notably during October, and on N ovem ber is t a crop of 28,480,000 pounds w as indicated, in comparison w ith 24,690,000 pounds grow n last year and a five-year average of 21,442,000 pounds. The quality of the M aryland tobacco is m ostly medium fair to good. AGRICULTURAL NOTES — M A R Y L A N D crop yields this year w ere reasonably good, w ith e x amples of both good and poor production. Prices for m ajor crops are reported low and the general level of the farm ers’ financial position is probably below that of last year. The 1926 w heat yield of 12,181,000 bushels w as above either last y ear’s crop or the five-year average, and the same m ay be said of both Irish and sw eet potato production, w hich totaled 4,176,000 bushels and 1,800,000 bushels, respectively. A s previously mentioned, a very large tobacco yield is reported this year, and other 5 increases in yield over 1925 crops occurred for oa"s and all orchard fruits. The corn crop w as dis appointing, a yield of 22,386,000 bushels com paring very unfavorably w ith 25,560,000 bushels har vested last year. Other decreases in 1926 yields were in rye, barley, buckw heat and hay. V IR G IN IA reports since the harvest of crops which had m ostly been completed by Novem ber 1st indicate that the combined yield of all crops produced during 1926 w as 9 per cent above the tenyear average, while last year the average was 16 per cent belowr the ten-year average, according to the Virginia Crop Reporting Service. The produc.ion of corn, w heat, w hite potatoes, sw eet potatoes, tobacco, hay and apples was greater than in 1925. Oats, peanuts and cotton w ere the only m ajor crops showing reduced yields this year in comparison with 1925. O w ing «to the unsettled m arket con ditions, the income which will be derived from crops produced this year is still som ewhat uncertain, but from present indications the total value of all money crops will be slightly larger than last year, largely due to the increase in the value of the B right tobacco crop. Production estim ates for some leading crops this year are: corn, 46,712,000 bushels; tobacco, 137,080,000 pounds; apples, 19,902,000 bushels; commercial apples, 3,296,000 barrels; w hite potatoes, 11,700,000 bushels; and cotton, 48,000 bales. N O R T H C A R O L IN A . Unusually favorable w eather for harvesting m arked the fall season to the middle of November, according to the State A gricultural Statistician. On N ovem ber 1st, a corn crop of 50,468,000 bushels w as indicated, compared with 42,014,000 bushels grow n in 1925. The Irish po tato crop was forecast at 7,447,000 bushels and the sw eet potato crop at 7,872,000 bushels. A n apple crop of 5,986,000 bushels and a yield of 2,900,000 gallons of sorghum syrup both exceed 1925 yields. On the other hand, the peanut crop of 209,000,000 pounds is much below the 1925 yield of 223,400,000 pounds, and this y e a r’s tobacco yield of 371,580,000 pounds is below the 378,490,000 pounds harvested last year. As mentioned elsewhere in this Review, North Carolina’s cotton crop is 1,210,000 bales, compared with 1,102,000 bales ginned in 1925. S O U T H C A R O L IN A farm ers are harvesting much better yields per acre and a greater total production from practically all crops this fall than w as raised during the past several years, says the A gricultural Statistician of that state. But despite the bountiful yields, the total farm income will be less this year than last, due to the low price of cotton. Good crops of food and feedstuffs and high prices for tobacco are factors tending to offset the poor returns from the cotton crop. Yields of corn, sweet potatoes, peanuts, sorghum syrup and cotton are above yields last year, to bacco being the only m ajor crop to sh ow .a reduced yield for 1926. The sections of the state in which tobacco, peanuts and potatoes are grow n extensively will not suffer from the decline in cot ton as much as will the w estern and northern counties, in which cotton is the only im portant money crop. W E S T V IR G IN IA has an apple crop of 10,875,000 bushels this year, over tw o and a half times last y e a r’s crop. The comm ercial crop is estim ated at 1,688,000 barrels, compared w ith 749,000 bar rels in 1925. The ’fruit is of exceptionally good quality, but is som ewhat lacking in color. L arg er yields this year than in 1925 are indicated for buckw heat, Irish potatoes, sw eet potatoes, tobacco, sorghum syrup and w heat, while low er yields this year are expected from corn, oats and hay. The yield of corn was som ewhat above expectations earlier in the season, but the quality of the corn is rather low and a low er percentage of the crop is merchantable than usual. 6 FIGURES ON RETAIL TRADE As Indicated By Reports from Thirty-one Representative Department Stores for the Month of OCTOBER 1926 Percentage increase in October 1926 sales over sales in October 1925: Baltimore Richmond Washington Other Cities District — 5.3 — 3.8 — 2.6 — 3.7 — 4.0 Percentage increase in cumulative sales from January 1st through October, over sales during the corresponding ten months in 1925: .4 4.3 5.2 2.7 2.7 Percentage increase in October sales over average October sales during the five years 1920-1924, inclusive: 7.9 36.1 23.0 4.5 15.6 Percentage increase in stock on hand October 31, 1926, over stock on October 31, 1925: — 1.7 7.5 9.2 — .7 2.9 Percentage increase in stock on hand October 31, 1926, over stock on September 30, 1926: 9.8 9.8 10.8 9.4 10.1 Percentage of sales in October 1926 to average stock carried during that month: 30.8 30.2 31.6 24.2 30.3 Percentage of cumulative sales since January 1st to average stock carried during each of the ten months: 248.6 260.3 269.2 218.1 253.5 Percentage of outstanding orders on October 31st to total purchases of goods in 1925: 6.6 9.4 5.7 6.3 6.5 Percentage of collections in October to total accounts receivable on October 1st: 23.1 27.6 37.6 33.3 27.7 — Denotes decreased percentage. Department store sales in the Fifth District in October averaged 4.0 per cent below the dollar amount of sales in October 1925, only six of thirty-one reporting stores showing increased sales for the 1926 month. The decline in sales this year was to be expected, however, since the volume of business done in October 1925 was swelled above seasonal levels because September weather was so unfavorable for early fall buying that much of it was held over until October. Cumulative sales since January 1st are still ahead of 1925 sales, the total for the ten months this year being 2.7 per cent above sales from January 1st to November 1st last year. Oc tober 1926 sales exceeded average October sales during 1920-1924, inclusive, by 15.6 per cent, most of the increase occurring in Washington and Richmond as a result of increased stocks carried since 1920. Stocks on the shelves at the end of October 1926 averaged 2.9 per cent above stocks on hand a year ear lier, and also showed a seasonal increase of 10.1 per cent during the past month this year. The percentage of sales in October to average stocks carried rose to 30.3 per cent, a seasonal increase. The percentage of total sales this calendar year up to November to average monthly stocks was 253.5 per cent, indicating an annual stock turnover of 3.04 times, exactly the same average attained in the first ten months of 1925. Collections in October averaged 27.7 per cent of receivables outstanding on October 1st, showing a dis tinct improvement over 23.9 per cent of outstanding receivables collected in September. WHOLESALE TRADE, OCTOBER 1926 Percentage increase in October 1926 sales, compared with sales in October 1925: 36 Groceries 11 Dry Goods 7 Shoes 16 Hardware 5 Furniture 12 Drugs — 9.9 —10.1 .7 3.2 1.9 — 4.4 Percentage increase in October 1926 sales, compared with sales in September 1926: — 2.2 —12.9 —18,7 2.5 9.1 — 4.0 Percentage increase in total sales since January 1st, compared with sales during the same ten months in 1925: — 2.7 — 4.1 7.5 2.4 — 7.2 .4 Percentage increase in stock on October 31, 1926, compared with stock on October 31, 1925: — 3.9(12) — 8.3(5) 33.8(4) 6.0(8) Percentage increase in stock on October 31, 1926, compared with stock on September 30, 1926: 7.3(12) 2.0(5) 1.0(4) — .4(8) Percentage of collections in October to total accounts receivable on October 1, 1926: _______ 63.6(21)____________31.1(7)_____________ 35.4(6)_____________37.7(12) 41.5(3) 55.9(8) — Denotes decreased percentage. NOTE: The number of firms reporting stock and collection data in each group is shown immediately follow ing the percentages. October sales reported by eighty-seven wholesale firms were on the whole disappointing. Sales of groceries, dry goods and drugs were lower than in either September 1926 or October 1925, and shoe sales were lower than in September. Furniture and hardware were the only lines reported upon which showed larger sales in October than in either September this year or October last year, and the increase in October sales over October 1925 sales reported by shoe jobbers was less than 1 per cent. Total sales for the ten elapsed months of 1926 were larger than in 1925 in shoes, hardware and drugs, but grocery, dry goods and furniture sales were behind those of 1925. Stocks reported by grocery, dry goods and shoe firms were larger on October 31st than on September 30th this year, but were lower in hardware lines. Shoe and hardware jobbers reporter large stocks than a year ago, but wholesale grocery and dry goods firms reported smaller stocks. Collection conditions did not change materially during October, but in view of depressed conditions in cot ton growing sections, collections are probably better than had been expected. (Compiled November 20, 1926) 7 BUSINESS CONDITIONS IN THE UNITED STATES. (Compiled by the Federal Reserve Board) Industrial activity continued in large volume in October, while the general level of prices de clined slightly. N otw ithstanding the seasonal increase in borrow ing for comm ercial purposes, the volume of bank credit outstanding declined in recent w eeks, reflecting the continued liquidation of loans on securities. PRODUCTION. Production in basis industries as measured by the Federal Reserve B oard’s in dex, which m akes allowance for the usual seasonal variations, showed little change in October as compared with Septem ber. T extile mill activity and the daily average output of iron and steel w as maintained during October but in Novem ber there w as a decrease in steel production. The output of bituminous coal w as stim ulated by export and bunker demand and attained new high records in October and November, and petroleum production was also large. There w as a sharp decline in auto mobile production and the output of cars w as sm aller in October than in any month since January. The volume of building activity, as indicated by the value of contracts awarded, has declined for the past three months, as is usual at this season of the year, and has been throughout the period at a slightly low er level than during the exceptionally active autumn season of 1925. Residential con tracts during the same period have been smaller than a year ago, while those for engineering pro jects and public w orks have been larger. TRADE. D istribution of commodities at w holesale declined in October, contrary to the usual trend for that month, and w as in smaller volume than in O ctober of any year since 1922. Sales of departm ent stores showed the usual seasonal grow th in October, but ow ing partly to less favorable w eather conditions and to a smaller number of trading days, w ere at a som ewhat low er level than in the same month of last year. Sales of mail order houses w ere also smaller than a year ago. Stocks of merchandise carried by wholesale firms w ere slightly smaller than a year ago, while departm ent store stocks increased more than is usual in September and October and at the end of October w ere larger than in 1925. F reig h t car loadings w ere in record volum e in O ctober and November, because of unusually large shipments of coal and ore and a continued heavy m ovem ent of other commodities. PRICES. W holesale prices of nearly all groups of commodities declined in October and N ovem ber. P rices of bituminous coal, how ever, advanced sharply as the result of foreign demand caused by the British coal strike, but recently there has been some decline in coal prices. The price of raw cotton, after falling rapidly in Septem ber and early October, has been steady in recent w eeks. Prices of non-agricultural commodities, as classified in the Bureau of Labor Statistics price indexes, de clined slightly betw een Septem ber and October, w hile those of agricultural products declined about tw o per cent to the low est level since the summer of 1924. BANK CREDIT. Seasonal grow th in loans for commercial and agricultural purposes at member banks in leading cities has been accompanied by continued liquidation of loans on securities, w ith the consequence that the total volum e of loans and investm ents of these banks in the middle of N ovem ber w as considerably smaller than a month earlier. A t the R eserve banks the decline in the volum e of member bank credit has been reflected in a reduction of the -total bills and securities to a level $37,000,000 below the corresponding date in 1925. Discounts for member banks w ere in about the same volum e as a year ago, while holdings* of acceptances and of United States securities w ere smaller. Easier conditions prevailed in the money m arket in November. R ates on prime com m ercial paper declined from 4^2-4% per cent in October to 4 per cent in Novem ber, and there w as also a reduction of Y% per cent in the rates on bankers acceptances. N O T E : The occurrence of the Th anksgiving holiday and a Sunday in the last w eek of a short month made it advisable to om it the usual charts this month rather than delay the printing of the Monthly Review. 8
@FedFRASER