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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON. CHAIRMAN AND FEDERAL RESERVE AGENT RICHMOND, VIRGINIA DISTRICT SUMMARY.— On the whole, business in the Fifth reserve district was below sea sonal average in October. Conditions were spotted, with both favorable and unfavorable in fluences plainly discernible, but the unfavorable factors were more pronounced at the end of October than in September or in October a year ago. Unemployment spread noticeably last month, the volume of new construction work undertaken declined to the lowest level in five years, both wholesale and retail trade fell be low October 1926 business, and cotton produc tion estimates and cotton prices declined below the September figures. The employment situ ation appears to be the chief obstacle to the de velopment of a normal fall and winter trade, and there are no signs at present of much early improvement. In spite of the discouraging developments enumerated, favorable factors that seem to offer encouragement for the near future are visible. Customers of member banks are liquidating the year’s indebtedness in seasonal volume, and the banks in turn are retiring their rediscounts at the reserve bank and are building secondary reserves by increasing their investments in se curities. Debits to individual accounts figures for the four weeks ended November 9th exceed ed debits during the preceding month and the corresponding four weeks a year ago. Bank deposits, especially savings and time deposits, are at record levels. Business failures in the Fifth district were relatively low in number during October, and the liabilities involved were the smallest for any month this year. West Virginia coal output continued to lead the country last month. Textile mills continued operations on full schedules in October and consumed more cotton than in October 1926. The agricultural prospects in the district are better on the aver age than last year, higher prices compensating for reduced yields in cotton and apples. The total farm income this year will probably exceed the 1926 income, and as a rule farm expenses were lower this year. Finally, collections appear to be better than last year, especially in cotton growing and textile sections. NOVEMBER 30, 1927 RESERVE BANK OPERATIONS.— A sea sonal reduction in the demand for reserve bank credit occurred in the Fifth district between October 15th and November 15th, both this year, member banks reducing their obligations with the proceeds of crop marketing. The volume of rediscounts held by the Federal Reserve Bank of Richmond declined during the month from $29,176,000 to $20,535,000. Increased needs for currency incident to crop marketing and the approach of the holiday shopping season raised the circulation of Federal reserve notes from $71,151,000 on October 15th to $76,509,000 on November 15th. Total earning assets of the Richmond bank, including Government securi ties owned and bills purchased in the open mar ket, declined during the period under review from $91,732,000 to $80,522,000. Member banks built their reserve deposits up from $71,403,000 to $80,522,000 during the month. As a result of the changes enumerated, the cash reserves of the Richmond bank rose from $61,794,000 on Oc tober 15th to $74,024,000 on November 15th, and the ratio of cash reserves to note and deposit li abilities combined rose from 42.11 per cent to 47.52 per cent. On November 15, 1927, member banks were borrowing much less from the Federal Reserve Bank of Richmond than was the case a year ago, and the demand for currency was also smaller, due probably to the lessened volume of construction work in the district. On No vember 15th last year rediscounts for member banks at the Richmond bank totaled $37,160,000, compared with $20,535,000 this year, and the circulation of reserve notes was $82,247,000 on November 15, 1926, compared with $76,509,000 on November 15, 1927. However, total earning assets of the Federal Reserve Bank of Richmond rose during the year from $59,249,000 to $80,522,000, as a result of increased holdings of Gov ernment securities and acceptances purchased in the open market. Reserve deposits of member banks, which aggregated $68,846,000 last year, rose to $75*065,000 at the middle of November this year. The cash reserves of the Richmond bank totaled $108,791,000 on November 15, 1926, but declined to $74,024,000 on the corresponding date this year, while the ratio of cash reserves to note and deposit liabilities combined declined during the year from 68.'86 per cent to 47.^2 per cent. CONDITION OF SIXTY-SEVEN REPORTING MEMBER BANKS IN SELECTED CITIES ITEMS Nov. 9, 1927 Oct. 12, 1927 Nov. 10, 1926 Total Loans and Discounts (including all rediscounts) ............................................... Total Investments in Bonds and Securities.J Reserve Balance with Federal Reserve Bank Cash in Vaults .......................................... Demand Deposits .......................... ................. Time Deposits ............................................... Borrowed from Federal Reserve Bank......... $522,774,000 172.603.000 44.159.000 15.213.000 394.648.000 248.866.000 13.171.000 $536,452,000 170.257.000 42.179.000 14.244.000 395.299.000 241.835.000 15.664.000 $520,344,000 135.185.000 42.612.000 14.688.000 386.855.000 208.972.000 16.570.000 The accompanying table shows the principal items of condition of sixty-seven regularly re porting member banks as of three dates, November 9, 1927, October 12, 1927, and November 10, 1926, thus affording an opportunity for comparing the latest available figures with those of the corres ponding dates a month and a year earlier. It should be understood that the figures in the table reflect conditions as of the report dates only, and are not necessarily the highest or lowest figures that occurred during the interval between the dates. During the month between October 12th and November 9th, both this year, a seasonal reduc tion of about normal proportions occurred in outstanding loans to customers of the sixty-seven re porting banks, rediscounts and loans held declining $13,678,000 between the two dates. The report ing banks increased their investments in bonds and securities by $2,346,000 and reduced their redis counts at the reserve bank by $2,493,000 during the same period. The reporting banks increased their reserve deposits at the reserve bank by $1,980,000 and their cash in vaults by $969,000. Demand de posits naturally declined with the repayment of loans by their customers, but the decrease in de posits of $651,000 between October 12th and November 9th was very small, and in time deposits an increase of $7,031,000 was reported. Comparing the November 9, 1927, figures in the table with those reported for November 10, 1926, a small increase of $2,430,000 in outstanding loans and discounts for customers during the year is noted, while investments in bonds and securities rose $47,418,000. The reporting banks’ reserve bal ances at the Federal reserve bank rose $1,547,000 during the year, and cash in vaults gained $525,000. Deposits rose $47,687,000 during the year, demand deposits rising $7,793,000 and time deposits $39,894,000. The stronger position of the reporting banks this year enabled them to reduce their bor rowing at the reserve bank by $3,399,000 between the middle of November last year and the corres ponding time this year. DEBITS TO INDIVIDUAL ACCOUNTS TOTAL DEBITS DURING THE FOUR WEEKS ENDED CITIES November 9, 1927 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..... . Washington, D. C...... Wilmington, N. C...... WinstonnSalem, N. C. $ District Totals ......... $1,343,270,000 25,940,000 413,677,000 28,126,000 35,419,000 57,516,000 22 ,866,000 9,290,000 15,246,000 40,105,000 26,861,000 33,228,000 10,030,000 23,926,000 17,531,000 8,407,000 74,517,000 22,785,000 151,153,000 26,803,000 16,986,000 217,079,000 20,895,000 44,884,000 2 October 12, 1927 $ 36,870,000 407,623,000 29,456,000 37,644,000 56,596,000 21,451,000 8,482,000 9,770,000 34,934,000 24,368,000 26,948,000 10,003,000 22,376,000 21,757,000 9,246,000 65,351,000 21,255,000 140,814,000 29,398,000 14,174,000 228,282,000 20,874,000 47,768,000 $1,325,440,000 November 10, 1926 $ 31,353,000 390,905,000 39,089,000 35,147,000 49.148.000 18.676.000 8,633,000 15,258,000 33,785,000 24,539,000 21,357,000 10,693,000 24,354,000 18,551,000 10,712,000 75,639,000 23,317,000 136,130,000 29,511,000 13,603,000 230,619,000 21,285,000 40,724,000 $1,303,028,000 Debits to individual, firm and corporation accounts in clearing house banks in twenty-three lead ing trade centers of the Fifth reserve district totaled $1,343,270,000 during the four weeks ended November 9th this year, an increase of $17,830,000 over the preceding four weeks ended October 12th, when debits aggregating $1,325,440,000 were reported. The earlier period contained a large volume of quarterly payments on October 1st, and the occurrence of the Election day holiday dur ing the later period gave the earlier period an additional business day. In view of these facts, the larger figures reported for the four weeks ended November 9th reflect a very satisfactory beginning of fall business. Fifteen of the twenty-three cities reported higher figures for the more recent pe riod. In comparison with the four weeks ended November 10, 1926, when debits totaling $1,303,028,000 were reported, the aggregate of $1,343,270,000 reported for the corrpesonding period ended Novem ber 9th this year shows an increase of $40,242,000, but a majority of the cities declined during the 1927 period. Eleven cities reported higher 1927 figures while twelve cities reported lower figures, but the increases wrere larger than the decreases, resulting in the district gain. Most of the cities in the Carolinas reported substantial gains this year, probably due to higher cotton prices, a larger tobacco crop, and increased activity of textile mills. SAVINGS DEPOSITS—Total deposits in thirteen mutual savings banks in Baltimore at the end of October this year totaled $172,642,769, compared with $169,873,170 on deposit at the end of Sep tember this year and $157,786,271 at the end of October 1926. On November 9, 1927, sixty-seven regularly reporting member banks in leading cities of the Fifth reserve district had time deposits ag gregating $248,866,000, compared with $241,835,000 on October 12th this year and $208,972,000 on November 10th last year. BUSINESS FAILURES— According to Duns Review of November 5th, “ The number of commer cial failures in the United States invariably rises during the late months of a year, and the October total of 1,787 insolvencies is about 1 3 ^ per cent above that for September, when, however, there were fewer business days. The present aggregate also is the highest reported, since last June, and defaults in each month this year have shown an increase over those for the corresponding periods of 1926. The comparison with the 1,763 insolvencies of October of last year is quite close, but last month’s liabilities of about $36,236,000 are considerably in excess of the $33,231,000 of October 1926. For ten months of the current year failures have numbered 19,120, which is materially above the 17,874 defaults of the same period of 1926, and the present year’s indebtedness of $432,895,442 contrasts with $330,929,000 in the ten months of the earlier year.” Contrary to seasonal trends, business failures in the Fifth district did not increase in October over September ,and liabilities involved in October failures were the lowest for any month since Sep tember 1926. Insolvencies in the district last month numbered 104, compared with 104 in September and 127 in October last year, while October liabilities totaling $1,761,672 compared with $3,740,473 in September and $3,394,205 in October 1926. LABOR— With the approach of winter, unemployment in the Fifth reserve district has spread and there are more idle workers at present than there have been at any other time for several years. Some of the larger cities, to which workers from smaller centers go when work slackens at home, have a distinct labor problem. A number of industrial plants in the district are closed entirely or are using only a part of their normal quota of workmen. Textile mills are busy and tobacco factories are running full time, but practically all other industries in the district are operating on restricted schedules. Throughout the Fifth district as a whole a much smaller volume of construction work is under way than was the case a year ago. Employment conditions appear to be worse in the upper half of the district, labor being better employed in the Carolinas than in Virginia and Maryland. COAL—The total production of bituminous coal in October amounted to 44,000,000 net tons, as against 41,928,000 tons in September this year and 54,127,000 tons in October 1926, according to the November 19th report of the Bureau of Mines, Department of Commerce. The average daily rate of production in October was 1,692,000 tons, an increase of 2.5 per cent over the September rate. West Virginia continued to lead all states in total production. Lessened activity in the steel, auto mobile and other industries during recent weeks kept coal consumption figures below the seasonal average, and on October 1st reserve stocks of soft coal were only 1,500,000 tons below the Ju ly 1st figure. Retail coal prices continue relatively low in comparison with prices in other strike years, and coal yards have adequate stocks to fill all orders promptly. The mild fall weather has retarded the retail coal trade. TEXTILES—Textile mills in the Fifth reserve district continued full time operations during Oc tober, and consumed 260,114 bales of cotton, but all three states used less cotton than in September. North Carolina mills consumed 141,940 bales last month, South Carolina mills 106,681 bales, and V ir ginia mills 11,493 bales. In October last year the Fifth district mills consumed 236,566 bales. Un certainties as to this year’s cotton crop have reduced the volume of forward orders at the mills, but 3 practically no manufactured goods have accumulated. The mills expect the amount of forward buy ing- to increase as soon as the December ginning report is issued, unless it shows unexpectedly large figures. The gradual shift of textile mills from New England to the South continues, a large corpo ration owning plants in both sections having recently closed its Northern properties and let contracts for extensive additions to its South Carolina holdings. BUILDING OPERATIONS FOR THE MONTHS OF OCTOBER 1927 AND 1926. Permits Issued CITIES z New 298 22 7 4 Hagerstown, Md— 28 16 5 Danville Va......... 16 6 Lynchburg, Va.... 85 7 Norfolk, Va.......... 5 8 Petersburg, Va..... 9 Richmond, Va...... 105 61 10 Roanoke, Va........ 11 Bluefield, W. Va... 17 12 Charleston, W. Va. 50 31 13 Clarksburg, W. Va 14 Huntington, W.Va. 53 15 Parkersburg,W.Va 27 25 16 Asheville, N. C..... 58 17 Charlotte, N. C.... 60 18 Durham, N. C...... 60 19 Greensboro, N. C. 42 20 High Point, N. C... 31 21 Raleigh, N. C....... 15 22 Salisbury, N. C.... 9 23 Wilmington, N. C. 97 24 Winston-Salem, N. C. 16 25 Charleston, S. C ... 19 26 Columbia, S. C..... 10 27 Greenville, S. C .... 35 28 Spartanburg, S. C. 29 Washington, D. C. 180 Alterations Repairs 1927 1926 1 Baltimore, Md..... 2 Cumberland, Md... 3 Frederick, Md..... New Construction 506 35 10 20 12 22 102 4 115 86 16 52 17 57 39 25 71 49 66 59 44 16 21 99 16 17 10 29 309 1927 1926 740 1,228 $ 4 5 0 10 14 27 97 7 77 49 7 8 6 4 4 49 31 4 87 9 10 12 11 94 26 49 27 17 422 1926 1927 0 5 7 40 68 9 87 34 4 14 9 1 4 54 17 9 41 12 15 13 5 54 30 44 28 14 527 815,800 $ 2,417,040 25,338 55,247 43,050 39,100 551,320 31,720 47,078 103,830 35,881 20,145 181,710 159,248 15,035 13,700 635,619 405,594 139,432 252,855 43,080 33,115 103,048 118,995 77,620 13,420 99,056 191,670 71,100 150,285 176,260 268,500 339,325 778,446 289,840 382,100 299,210 382,685 137,200 191,910 247,185 184,275 53,540 48,575 23,200 377,150 303,250 252,275 25,060 28,085 77,800 63,325 57,200 55,000 82,285 68,500 1,907,885 3,632,160 Totals......... 1,478 1,924 1,902 2,378 $ 6,903,407 $10,718,950 1926 1927 $ 185,000 $ 805 Increase or Per Cent of Decrease of Increase 0 Total or Z Valuation Decrease 29,175 364,445 6,050 96,487 2,840 5,685 4,100 20,700 39,598 17,685 12,750 9,615 3,710 364,795 701,520 $—2,117,760 — 67.9% 1,242 — 30,346 — 53.7 3,950 0 10.1 523,850 1,559.2 1,875 3,535 — 57,172 — 53.3 22,376 81,531 191.7 62,664 36,833 32.0 18,535 — 11,650 — 36.1 62,069 226,803 48.5 13,528 — 91,282 — 34.3 11,320 620 33.6 9,541 7,325 7.6 1,400 65,050 438.9 2,500 — 91,664 — 47.2 1,500 — 79,685 — 52.5 29,765 — 92,830 — 31.1 26,280 — 100,956 — 12.5 391,775 — 477,985 — 61.8 6,763 — 1.7 19,775 — 10,350 — 62,220 — 30.8 30,555 38,040 13.7 193 — 0.3 9,258 — 9,000 — 342,250 — 88.6 75,605 14,968 4.6 3,580 — 7.7 18,240 — 14,615 12,610 19.2 6,725 5,090 8.2 14,735 2,760 20.7 343,055 —1,702,535 — 42.8 $1,479,440 1 2 $1,868,096 —$ 4,204,199 — 33.4% 0 6,125 3,115 88,171 77,035 5,550 58,847 35,669 1,975 32,813 2,250 3,450 1,000 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 — 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. Building permits providing for new construction issued in twenty-nine Fifth district cities dur ing October were the lowest in number for any month since January 1925, and the estirhated valua tion for new work last month was the lowest reported for any month since February 1922. October witnessed 1,478 permits for new work, valued at $6,903,407, compared with 1,924 permits issued for similar work in October 1926, with estimated valuation of $10,718,950. Alterations and repair per mits issued last month numbered 1,902, valued at $1,479,440, compared with 2,378 permits and a valu ation of $1,868,096 in October last year. Combined valuation figures for all classes of work totaled $8,382,847 in October 1927 and $12,587,046 in October a year ago, a decline during the 1927 month of $4,204,199, or 33.4 percent. Among the larger cities Norfolk, Richmond and Winston-Salem report ed higher aggregate figures last month in comparison with the corresponding month last year, but Baltimore, Charlotte and Washington reported lower figures this year. Thirteen of the twenty-nine cities reported higher valuation figures for October 1927 than for October 1926, but only ten cities re ported a larger number of permits. Building contracts awarded in the Fifth district in October totaled $29,552,455, including both urban and rural construction. Of this amount, $10,267,845 was for residential work, according to statistics collected by the F. W. Dodge Corporation. COTTON—In our Review last month we quoted weekly average prices paid to growers for spot cotton on the Carolina markets through October 8th, when the price was 20.86 cents per pound. From that figure the price gradually declined to 20.19 cents during the week ended October 22nd, and then rose again to an average of 20.61 cents on November 5th. Favorable weather for late cot ton and the unexpectedly high figures of the Department of Agriculture’s condition report of No vember 9th lowered the average price to 20.16 cents per pound during the week ended November 12th, the latest period for which quotations are available. 4 The Department of Agriculture’s fourth cotton condition report on the 1927 crop estimated this year’s probable yield at 12,842,000 bales, based 011 the November 1st condition. This compares with 12.678.000 bales indicated on October 1st, and final ginnings of 17,977,374 bales in 1926. The No vember 1st estimate showing an increase of 164,000 bales over the October 1st estimate was higher than the trade expected and cotton prices declined nearly a cent a pound. The Bureau of the Census ginning report to November 1st showed 9,925,759 bales ginned prior to that date this year, compared with 11,253,873 bales ginned to the same date in 1926 and 11,207,197 bales ginned before November 1st in 1925. Cotton consumption in American mills in October totaled 612,935 bales, according to the report of the Bureau of the Census made public on November 14th. This figure shows a slight decline from 627,321 bales consumed during the month of September this year, but is approximately 8 per cent above 568,361 bales consumed in October 1926. Total consumption during the three months of the present cotton year amounted to 1,873,690 bales, compared with 1,639,184 bales consumed during the three months ended October 31, 1926. Cotton on hand at manufacturing establishments on October 31st this year totaled 1,327,095 bales, compared with 1,118,776 bales held on September 30th this year and 1,213,199 bales held on October 31st last year. Bales in public warehouses and compresses num bered 5,433,129 at the end of October, 3,964,680 at the end of September, and 5,471,533 on October 31, 1926. Exports of cotton totaled 1,126,509 bales in October, compared with 631,041 bales sent abroad in September this year and 1,369,820 bales in October 1926. Imports last month totaled 19,235 bales, compared with 28,346 bales imported in September this year and 30,877 bales in October last year. Consumption of cotton in the growing states totaled 449,040 bales in October, compared with 404,196 bales used in October last year. Last month’s consumption in the cotton growing states amounted to 73.26 per cent of National consumption, compared with 71.12 per cent of National con sumption used in the cotton growing states in October last year. Estimates of probable yields of cotton this year were reduced during October for South Caro lina and Virginia, but the prospects for North Carolina remained unchanged. A South Carolina crop of 730,000 bales is indicated by the November 1st condition. The October 1st estimate was. 750,000 bales and the decline in prospective production was due to a poorer outturn in the northern part of the State than was expected a month earlier. North Carolina’s crop is expected to yield 845,000 bales this year. The Virginia cotton crop is estimated to be 34,000 bales, compared with 37,000 bales pre dicted on the October 1st condition. Weather conditions during the latter, half of October and the first part of November were excellent for maturing late bolls and for gathering the open cotton. The dry weather of October kept down rotting of weevil punctured bolls, and also enabled the growers to pick most of the crop without discoloration of the lint. In view of the higher prices prevailing this year, the 1927 cotton crop will be much more profitable to the growers than the 1926 crop, in spite of the reduced yield. TOBACCO—SOUTH CAROLINA tobacco has been sold for approximately two million dollars more than the 1926 crop. This year’s production of 74,463,000 pounds compares favorably with 57,510.000 pounds grown in 1926 and a five-year average production of 60,600,000 pounds. The quality of this year’s crop was 77 per cent, compared with a ten-year average of 72 per cent. NORTH CAROLINA has the largest tobacco crop in the history of the State, the November 1st forecast being 437,488,000 pounds. The weather during the growing season wras unusually fav orable, and this resulted in a crop of good color and fair body or quality. Prices during September were considered very low, and there was much complaint from growers, but October prices were decidedly better. The auction markets in North Carolina sold 133,620,441 pounds of producers’ to bacco during October, for an average of $22.81 per hundred pounds, compared with 107,403,917 pounds sold in October 1926, at an average price of $26.73 Per hundred. Wilson led in October sales with 23,421,694 pounds, Greenville ranking second with 18,422,626 pounds. Washington led in price, selling 1,674,044 pounds for an average of $27.52 per hundred pounds. V IRG IN IA auction markets sold 26,058,685 pounds of growers’ tobacco during October, com pared with 19,619,457 pounds sold in October 1926. Last month’s prices averaged $19.25 per hundred pounds, compared with $24.51 last year. The quality of the crop varies considerably in the differ ent markets, and some relatively wide differences in prices were reported. Practically all tobacco sold in October was of the flue-cured, or Bright, type, the fire-cured markets not opening until No vember 1st. Virginia’s total production of tobacco this year is expected to be 125,457,000 pounds, compared with 137,032,000 pounds harvested in 1926. AGRICULTURAL NOTES—M ARYLAN D crops benefitted by the absence of damaging frosts and freezes in October, and on November 1st the composite condition of all crops was 107.3 Per cent of average conditions during the past ten years. Corn cured much better than had been expected, and the estimated yield of 21,566,000 bushels compares fairly well with the five-year average of 22,845.000 bushels. The white potato yield this year was 5,490,000 bushels, compared with the five-year average of 3,740,000 bushels, and the sweet potato crop of 1,728,000 bushels compared with 1,359,000 bushels the five-year average. A tobacco yield of 25,685,000 pounds was also above the five-year 5 average production of 23,875,000 pounds. On the other hand, apples and other fruits yielded much smaller crops this year than the five-year average, but on the whole the prices received were good. Winter wheat1 has come up in exceptionally good condition in most of Maryland and had ideal weather in which to get started. V IR G IN IA crops improved during October, and on November ist averaged 106.9 Per cent of av erage conditions for the past ten years. The total production of corn, white potatoes, sweet potatoes and hay will be larger than last year, while the production of cotton, tobacco, wheat ,and fruits will be less. Improved prices for cotton and fruits, and for live stock,; is expected to hold up the farm income to the 1926 level. The corn crop in Virginia matured much later than usual, but the crop is yielding better than last year in nearly1 all parts of the State. Production this year is estimated at 48,140,000 bushels, compared with 46,585,000 bushels last year. Late potatoes yielded better than-had been expected, and production for 1927 is estimated at 19,650,000 bushels, compared with 11,658,000 bushels dug in 1926. Favorable growing conditions during October permitted the sweet potato crop to remain in the ground longer than usual. Production is estimated to be 5,670,000 bushels, compared with 5,375,°°o bushels in 1926, but this year’s prices are low. The peanut crop was unusually late this season, but the yield is expected to be about 133,760,000 pounds, compared with 131,100,000 pounds last year. The Virginia commercial apple crop of 1,300,000 barrels compares quite unfavor ably with 3,700,000 barrels gathered in 1926, but prices are better this year and in many of the com mercial sections the growers will receive larger returns than last year. The fruit is not as high grade this year as last, but the fruit is sound and will probably keep well. Practically every apple has been sold this year, while a year ago many were left in the orchards or fed to livestock. NORTH CAROLINA crops this year promise to average unusually well in production and prices are fairly satisfactory. The few crops that are making yields below the average are cotton, apples and most fruits. The gross value of crops will probably be ahead of last year. With a production of 52,380,000 bushels, North Carolina has the best corn crop for many years, except 1923 when the yield was the same. A sweet potato crop of 9,718,000 bushels shows a decided increase over the fiveyear average. The quality of potatoes is also extra good. The growing conditions were almost ideal throughout the season, following an unfavorable planting period. SOUTH CAROLINA crop yields, with the exception of cotton,are all above the ten-year aver age. Judging from reported yields per acre, 1927 has been the best year since 1920 for all crops except cotton. A corn crop of approximately 25,000,000 bushels is 3,000,000 bushels more than the 1926 crop. A sweet potato yield of about 5,500,000 bushels compares with a crop of 4,160,000 bushels last year. The year’s white potato crop is given as 2,975,000 bushels, compared with 3,219,000 bushels last year. The peanut crop of 11,250,000 pounds far exceeds 6,500,000 pounds harvested in 1926. W EST V IR G IN IA agricultural returns are somewhat belowr those of 1926. The production of all fruits is far below that of last year, and corn, wheat, oats, rye, tobacco and sorghum show de creased yields. A few crops show larger yields this year, but not enough to offset the decreases. WHOLESALE TRADE, OCTOBER 1927 Percentage increase in October 1927 sales, compared with sales in October 1926: 32 Groceries 12 Dry Goods 5 Shoes 16 Hardware 5 Furniture 13 Drugs — 4.8 — 10.5 .7 — 3.0 — 18.0 2.7 Percentage increase in October 1927 sales, compared with sales in September 1927: .05 — 20.4 — 18.3 — 4.2. — 7.0 — 2.4 Percentage increase in total sales since Jan. 1, 1927, compared with sales in the first ten months of 1926: — 5.5 — 1.3 3.1 3.5 — 6.3 — .6 Percentage increase in stock on October 31, 1927, compared with stock on October 31, 1926: 1.2(12*) 9.6(4*) — 16.5(4*) — 6.4(8*) Percentage increase in stock on October 31, 1927, compared with stock on September 30, 1927: 10.3(11*) — 2.3(4*) _ 4 .6 (4 * ) — 1.1(8*) Percentage of collections in October to total accounts receivable on October 1, 1927: _______ 66.3(19*)__________ 34.5(8*)___________ 36.4(5*)___________ 39.0(12*) 31.2(3*) 54.2(8*) — Denotes decreased percentage. * Number of reporting firms. Wholesale trade reports from 83 firms in 6 lines showed slightly larger sales in October than in October last year in shoes and drugs, but grocery, dry goods, hardware and furniture sales decreased during the 1927 month. The furniture business experienced the greatest decline, being adversely affected by current interest in electric refrigerators, radio, and other relatively novel household de vices. Grocery sales in October were a very small fraction of 1 per cent above September sales, but the other five lines showed lower totals for the later month. In cumulative sales since January 1st, sales in shoes and hardware were ahead of sales during the first ten months of 1926, but grocery, dry goods, furniture and drug sales ran behind those of last year. Stocks reported by wholesale grocers were larger on October 31st than on September 30th this year, but dry goods, shoe and hardware stocks decreased moderately during the month. Grocery and dry goods firms reported larger stocks on October 31st than a year ago, but shoe and hardware jobbers reported smaller stocks. Collections improved during October, the percentage of collections to receivables as of October 1st being higher in every line except drugs than the corresponding percentages for September. The October 1927 percentages were also higher than those of October last year in all lines except fur niture and drugs. FIGURES ON RETAIL TRADE As Indicated By Reports from Twenty-Nine Representative Department Stores for the Month of October 1927 Percentage increase in October 1927 sales, compared with sales in October 1926: Baltimore Richmond Washington Other Cities District — 5.2 — 5.3 .04 — 6.9 — 3.4 Percentage increase in total sales since January 1st, over sales during the first ten months of 1926: — 3.2 2.2 — 1.0 — 1.2 — 1.6 Percentage increase in October 1927 sales over average October sales during the three years 1923-1925: — 1.4 3.6 3.7 — 5.9 .5 Percentage increase in stock on hand October 31, 1927, over stock on October 31, 1926: — 4.7 — .7 3.6 7.7 .2 Percentage increase in stock on hand October 31, 1927, over stock on September 30, 1927: 9.3 7.4 13.4 11.2 10.9 Percentage of sales in October 1927 to average stock carried during that month: 31.3 28.5 31.0 21.1 29.6 Percentage of total sales since January 1st to average stock carried during each of the ten elapsed months: 251.2 263.3 264.2 205.9 251.6 Percentage of outstanding orders on October 31st to total purchases of goods in 1926: 5.9 6.8 5.7 5.0 5.9 Percentage of collections in October 1927 to total accounts receivable on October 1st: 24.9 29.4 30.1 34.1 27.8 — Denotes decreased percentage. Retail sales in October in the Fifth reserve district, as reflected by sales of twenty-nine leading department stores, increased less than the usual amount over September, and averaged 3.4 per cent below sales in October 1926. Mild weather last month delayed fall buying to a considerable extent, and unsatisfactory employment conditions in some of the cities further handicapped the merchants. Cumulative sales since January 1st averaged 1.6 per cent below sales during the first ten months of 1926. Compared with average October sales during the three years 1923-1925, sales in October this year showed an increase of 5/ioths of 1 per cent. Stocks on the shelves in the reporting stores rose seasonally during October with the receipt of some holiday goods, and at the end of the month averaged practically the same as on October 31, 1926. October 31, 1927, stocks were 2/ioths of 1 per cent larger than stocks a year ago and 10.9 per cent larger than a month earlier. The rate of turnover increased seasonally in October. The percentage of sales in October to average stock carried that month was 29.6 per cent, and the percentage of total sales since January 1st to average stocks carried during each of the ten months was 251.6 per cent, indicating an annual rate of turnover of 3.02 times. Collections in October totaled 27.8 per cent of receivables outstanding on the first of the month, a higher figure than either 234 per cent attained in September 1927 or 27.7 per cent in October last year. (Compiled November 21, 1927) 7 BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Industry and trade were less active in October than in the preceding month and were in smaller volume than a year ago. The general level of wholesale commodity prices showed a further slight advance. PRODUCTION. Production of manufactures declined in October, contrary to the usual seasonal tendency, while the output of minerals remained in practically the same volume as in September. In Oc tober and November activity of iron and steel mills and of automobile plants was smaller than at any pre vious period of the year. There were also decreases during October in cotton consumption and in the pro duction of building materials, crude petroleum, and boots and shoes. The output of bituminous coal and the number of hogs and cattle slaughtered increased by less than the usual seasonal amount. Production of flour, copper and anthracite coal showed increases in October. Building contracts awarded increased con siderably owing to unusually large! awards in New York and Chicago in the last week of the month. The in creases were largest in contracts for residential and commercial buildings. Unusually favorable weather during October in agricultural states resulted in increased yields for late fall crops. The indicated pro duction of corn, according to the November crop report of the Department of Agriculture, was placed as 2.753.000,° ° ° bushels, an increase of 150,000,000 bushels over the estimate of the previous month and 106.000.000 bushels over the yield a year ago. Larger yields, as compared with the previous month’s esti mates, were also indicated for cotton, tobacco and potatoes. TRADE. Trade at wholesale and retail showed less than the usual seasonal increase in October. Com pared with October a year ago, wholesale trade in all leading lines except meats and drugs was smaller. Department store sales were approximately 3 per cent smaller than in October 1926, while sales of mail order houses and chain stores were somewhat larger. Inventories of merchandise carried by wholesale firms were smaller in all reporting lines at the end of the month than in September. Compared with a year ago, stocks were smaller in all lines except drugs. Stocks of department stores increased in October in an ticipation of the growth in sales that usually occurs in November and December, but at the end of the month they were no larger than a year ago. Freight car loadings declined in October and the first part of November, and were smaller than in the corresponding period of last year for all classes of freight except grain and grain products. PRICES. Wholesale commodity prices increased slightly in October, continuing the advance which be gan early in the summer, and the Bureau of Labor Statistics index for October was higher than for any pre vious month of this year. The advance in the average for all commodities from September to October reflected increases in the prices of livestock, meats, and dairy products. Prices of corn, cotton, coal, metals, paint materials and automobile tires, on the other hand, declined. During the first three weeks in No vember there were increases in the prices of grains, cattle, copper, hides and rubber, and decreases in hogs, cotton, silk, coal, petroleum, and iron and steel. BANK CREDIT. Total loans and investments of member banks in leading cities increased by nearly $300,000,000 during the latter part of October and the first half of November and on November 16th were the highest ever reported. Investments increased by more than $200,000,000, reflecting in large part pur chases of Treasury Certificates issued on November 15th, and loans 011 securities increased by about $125,000,000. Loans chiefly for commercial and agricultural purposes declined during the period from the sea son’s peak reached early in October. There was a continued increase in the demand for reserve bank credit between October 19th and November 23rd, arising chiefly out of further exports of gold. Discounts for member banks declined somewhat, while acceptances and holdings of United States Government securities increased. Conditions in the money market remained moderately easy in November. Call loan rates re mained at the level reached in the latter part of October, and rates on prime commercial paper and bankers’ acceptances were unchanged. Note. The occurrence of the Thanksgiving holiday and a Sunday in the last week of a short month made it advisable to omit the usual charts this month rather than delay the printing and distribution of the Monthly Review.
