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MONTHLY REVIEW o f Financial and Business Conditions F ifth Federal Re s e r v e D is tr ic t Federal Reserve Bank, Richmond, Va. November 30, 1939 Summary of October Business Conditions In the field o f construction, contracts awarded in O c tober declined from the September level and were also lower in amount by 17 per cent than contracts awarded in October 1938, but building permits issued last month exceeded in value those o f any other month in eleven years. S the fall season advances and holiday shopping be gins, distribution o f goods to consumers takes on greater importance. In October the weather was unseasonally mild and department store sales showed less than a normal rise over the high September sales, but ex ceeded those in October last year by 4 per cent. Retail furniture sales last month increased over sales in Sep tember 1939 and October 1938, and wholesale trade also exceeded last year’s volume, although it declined from the level o f September. Introduction o f new models caused a sharp rise in automobile sales, and new car registration figures in October rose 39 per cent over September and 78 per cent above October 1938. Employment in October increased further, though at a slower rate than in September. Payrolls advanced more than employment, due partly to the change on October 24 from 25^ to 30^ per hour as base pay under the Fair Labor Standards A ct. Completion o f some highway p roj ects released workers during the past month, but expan sion in industrial activity more than balanced that decline in employment. INDUSTRIAL EXPANSION CONTINUES CROP YIELDS EXCELLENT Industrial activity continued to expand in October, and cotton textile mills in the Fifth district consumed more cotton than in any other October on record. Bituminous coal mines also increased production notably and mined 29 per cent more coal than in October last year. Tobacco manufacturing in October was in larger volume than in either the preceding month this year or the corresponding month last year. Rayon mills worked full time, but ship ments were so large that stocks o f yarn which were already low were further reduced. Weather in October and the first half o f November was almost ideal for crop harvesting and marketing, and a majority o f the forecasts o f production are now higher than they were during the summer. Tobacco markets, which resumed selling in October, handled a very large poundage, and prices, though much lower than a year ago, showed a moderate rise during the month. Prospective cotton yield in the Fifth district is 32 per cent above the 1938 yield, and this year's price is also from $3 to $5 a bale higher than the price a year ago. A BUSINESS STATISTICS— FIFTH FEDERAL Debits to individual accounts (24 cities)— ........................... Sales, 31 department stores, 5th district....--- .--------------------Sales, 38 furniture stores, 5th district.—.... ........................ . Sales, 200 wholesale firms, 5th district..—.................... ......... Registrations, new autos, 5th district......................... ....... ...... T obacco sold in 5th district (Pounds)...... ........ ...................... Growers’ receipts from tobacco, 5th district....... .... ............. Average price of tobacco, per 100 pounds--------------------------Number o f business failures, 5th district.—-------- -------------Liabilities in failures, 5th district.............................................. Value o f building permits, 31 cities.................... ....... ............ Value o f contracts awarded, 5th district..... ~...... ......... ..... . Cotton, consumption, 5th district (B ales)---------------------------Cotton price, c per pound, end of month---------------------------Print cloths, 385^ in., 64x60s, end o f month......... ..............— Rayon yarn shipments, U. S. (P ou nds)— ......... - ........ .......... Rayon yarn stocks, U. S. (P ounds)----------- --------------- -------Bituminous coal mined, U. S. (T on s)— ........ ......... — RESERVE DISTRICT October 1939 $1,401,632,000 $ 11,330,531 1,511,849 $ $ 13,032,000 15,260 September 1939 $1,293,601,000 $ 10,407,815 1,460,434 $ $ 14,306,000 10,988 October 1938 $1,330,878,000 $ 10,922,782 1,311,001 $ $ 11,735,000 8,575 305,771,128 48,240,022 15.78 47 750,000 $ $ 14,032,486 $ 28,276,000 320,999 9.09 5.50 34,100,000 9,400,000 45,255,000 111,366,137 14,160,093 12.71 31 381,000 $ 7,765,960 $ $ 32,058,000 297,816 9.08 5.50 32,900,000 13,000,000 38,150,000 209,862,870 52,473,352 25.00 51 442,000 $ 8,383,620 $ $ 34,205,000 260,773 8.70 4.50 25,100,000 36,100,000 34,989,000 $ $ $ $ $ $ % Change Year Month + 8 + 5 + 4 + 9 + 4 + 15 — 9 + 11 + 78 - f 39 +175 +241 + 24 + 52 + 97 + 81 + — — — + + 46 8 37 8 70 67 — 12 + 8 0 0 + 4 — 28 + 19 — + + + + — + 17 23 4 22 36 74 29 MONTHLY REVIEW 2 CROP MARKETING INCREASES NOTE CIRCULATION Government security holdings of the Federal Reserve banks, including the Richmond bank, declined somewhat further between October 15 and November 15, the Sys tem allowing part of its short term bills to run off at maturity. Federal Reserve notes in actual circulation rose more than seasonally last month, probably due chiefly to reopening of auction tobacco markets and unusually large sales for that period of the year. Other changes in the statement of the Reserve bank were seasonal developments or daily fluctuation. RESERVE BAN K STATEMENT ITEMS Fifth District 000 omitted ITEMS Nov. 15 Oct. 15 Nov. 15 1939 1939 1938 Discounts held ............................................ $ 256 $ 360 $ 89 Foreign loans on gold .............................. 142 142 0 Open market paper .................................... 0 24 23 Industrial advances .................................... 1,007 1,023 1,421 Government securities .............................. 135,062______139,408______120,321 $136,467 $140,957 $121,854 Total earning assets ............................. Circulation of Fed. Res. notes ............... 225,548 215,245 212,514 279,791 283,686 230,287 Members’ reserve deposits ..................... Cash reserves ............................................... 417,333 413,613 385,853 Reserve ratio .............................................. 75.94 74.75 76.84 LOANS INCREASE, INVESTMENTS DECREASE Loans and discounts continued a moderate rise in 41 regularly reporting member banks between October 11 and November 15. On the contrary, investments in securities declined and reserve balances at the Reserve bank rose. Deposits rose by about the same amount as the increase in loans and discounts. SELECTED ITEMS— 41 REPORTING BANKS Fifth District 000 omitted ITEMS Nov. 15 Oct. 11 1939 1939 $260,721 $255,652 Loans & discounts ...................................... Investments in securities ....................... 437,513 446,514 Reserve bal. with F. R. b a n k ................. 185,381 180,616 20,406 23,413 Ca&h in vaults ............................................ Demand deposits ........................................ 535,113 530,923 Time deposits .............................................. 301,392 200,504 Money borrowed .......................................... 0 0 Nov. 16 1938 $240,548 429,097 146,548 17,696 475,854 199,294 200 MUTUAL SAVINGS SHOW SEASONAL RISE Deposits in 10 mutual savings banks in Baltimore rose from $219,921,027 on September 30 to $220,944,398 on October 31, and on the latter date exceeded deposits totaling $218,785,221 on October 31 last year. Mutual savings usually increase between vacation and holiday shopping seasons. COMMERCIAL FAILURES SHOW INCREASE Commercial failures in the Fifth district and the United States were reported by Dun & Bradstreet as follows: ployees, and increases in base pay on October 24 under the Fair Labor Standards A ct raised the purchasing power o f many o f the district’s lowest paid industrial workers. The weather has not caused any delay in outside work, and therefore practically no seasonal recession in employ ment has yet occurred. The following figures, compiled for the most part by the Bureau o f Labor Statistics, show the trends o f employment and payrolls in the Fifth district from September to O ctober: STATES Maryland ............. Dist. of Columbia Virginia ................. West Virginia . . . North Carolina . . South Carolina . . CHECK T R A N SA C T IO N S IN C REA SE The volume o f business reflected in debits to individual accounts in 24 Fifth district cities rose substantially in October, and also exceeded October 1938 business by 5 per cent. Especially large gains were reported for O c tober over September in Danville and Durham, caused by resumption o f tobacco marketing, and in Charleston, S. C. Noteworthy increases over October 1938 figures were also reported by Charleston, S. C., and by Newport News. CITIES Total Liabilities District U. S. $ 750,000 $ 16,140,000 381,0009,402,000 442,00013,219,000 10 Months, 1939 ................... 10 Months, 1938 ................... $5,528,000 6,798,000 10,013 10,977 $144,634,000 197,675,000 EMPLOYMENT LEVELS OFF Employment apparently made some further gains early in November, after rising sharply in September and Oc tober. Increases in industrial activity since September 1 called many workers back to jobs, construction held fully up to seasonal levels, resumption of tobacco marketing required several hundred handlers and warehouse em DEBITS TO IN D IV ID U AL ACCOUNTS Fifth District 000 omitted Nov. Oct. Nov. 1939 1939 1938 Maryland Baltimore ............. Cumberland ......... Hagerstown ......... Dist. of Col. Washington ......... Virginia Danville ............... Lynchburg ........... Newport News . . ............... Norfolk Portsmouth ......... Richmond ............. Roanoke ............... West Virginia Charleston ........... Huntington ......... Parkersburg ......... North Carolina Asheville ............... C harlotte............... Durham ................. Greensboro ........... Raleigh ................. Wilmington ........ Winston-Salem .. South Carolina Charleston ........... Columbia ............. Greenville ............. Spartanburg District Totals . . Number of Failures PERIODS District U. S. October 1939 .......................... 47 916 September 1939 ..................... 31 758 October 1938 .......................... 51 997 479 540 Percentage change from Sept. 1939 to Oct. 1939 in number in amount on payroll of payroll + 6.7 + 3.7 + 3.6 + 3.1 + 2.9 + 1.1 + 13.9 + 7.3 + 3.8 + 2.1 + 3.2 + 4.9 % of Change Month Year $ 386,664 8,859 9,571 $ 355,028 7,833 10,115 $ 355,242 7,467 8,541 +12 — 5 4-19 4~ 12 277,873 263,294 252,503 4- 6 4-10 14,484 14,767 11,985 52,433 4,188 187,297 27,452 9,114 14,661 11,247 49,575 4,398 170,576 25,886 20,484 14,384 8,039 47,626 4,183 211,579 25,100 4*59 4- 1 4* 7 4- 6 — 5 4-10 — 29 + 3 + 49 +10 4- 7 50,880 18,902 10,794* 47,526 17,514 9,522* 46,417 17,303 13,006 71,940 44,114 19,879 45,851 11,571 45,857 12,898 64,911 35,558 20,241 42,162 11,617 42,067 12,283 59,175 51,058 18,488 41,141 11,607 46,835 22,662 26,277 22,104 13,016 $1,40/1,632 18,017 26,698 21,101 11,564 $1,293,601 16,064 24,290 20,111 10,958 $1,330,878 + 9 4- 6 4- 9 0 — 11 + 9 +10 4- 8 + 9 + 1 +11 + 24 + 6 + 13 — 2 + 9 0 + 22 — 14 + 8 +11 0 + 9 — + 26 2 + 5 + 13 + 41 — + 8 2 + 8 +10 + 19 + 5 N E W MODELS ST IM U LA TE A U T O SALES All automobile manufacturers having brought out 1940 models by mid-October, sales of new cars in the Fifth district last month increased 39 per cent over September sales, and were 78 per cent above October 1938 sales. In November, sales were held back to some extent by inability o f one leading manufacturer’s dealers to secure new cars because o f an industrial dispute. Sales o f used cars are reported good, and dealers say they have no unusual stocks o f second-hand cars on hand. The following registration figures on new cars were furnished by R . L. Polk & C o. : 3 MONTHLY REVIEW REGISTRATION OF N E W PASSENGER CARS— NUMBER Oct. 1939 STATES Maryland ........... Dist. of Col. . . . Virginia ............. West Virginia . . No. Carolina . . . So. Carolina . . . District ........... 2,570 2,221 2,986 1,837 3,780 1,866 15,260 Oct. 1938 1,966 1,065 1,574 928 2,100 942 8,575 % Change 10 Months 10 Months % Change 1939 1938 + 31 + 109 + 90 + 98 + 80 + 98 + 78 32,066 21,412 34,665 18,752 37,320 20,488 164,703 20,802 13,678 24,453 12,987 24,569 11,652 108,141 + + + + + + + 54 57 42 44 52 76 52 PERM ITS IN CREASE, CO N TR A C TS D ECREASE Building permits issued in 31 Fifth district cities in October 1939 registered an unseasonal increase and totaled $14,032,486, the highest figure for any month since N o vember 1928. Washington with $8,499,995 accounted for the high district total last month. Baltimore ranked sec ond with $2,479,440, Richmond third with $295,708, Charlotte fourth with $289,145, and N orfolk fifth with $217,131. In October 1938 the 31 cities issued permits totaling $8,383,620. Permits issued in the first 10 months o f 1931 amounting to $105,269,094 show an increase o f 43 per cent over permits totaling $73,493,046 issued in the first 10 months o f 1938. Contracts actually awarded in October for construction work in the Fifth district totaled $28,276,000, a decrease from $32,058,000 awarded in September 1939 and 17 per cent below the October 1938 total o f $34,205,000. A de cline in contract awards in October from September is seasonal, chiefly because little new work on highway con struction is undertaken at this season. Figures collected by the F. W . Dodge Corporation by states for October 1939 and 1938 on construction contracts awarded are as fo llow s: CONSTRUCTION CONTRACTS AW ARDED STATES Oct. 1939 Oct. 1938 % Change Maryland .......................................... $ 6,012,000 $ 8,166,000 — 26 Dist. of Col........................................ 4,035,000 5,007,000 — 19 Virginia ............................................ 7,270,000 8,084,000 — 10 West V ir g in ia .................................. 2,394,000* 3,084,000* — 22 North C arolina................................ 4,448,000 5,871,000 — 24 South Carolina ............................. ............. 4,431,000_______4,435,000___________ 0 Fifth District ............................. $28,596,000* $34,647,000* — 17 * Includes some contracts outside 5th district. C O A L P R O D U C TIO N A G A IN RISES Bituminous coal production in the United States rose further in October and totaled 45,255,000 net tons, com pared with 38,150,000 tons mined in September this year and 34,989,000 tons in October last year. Total output this calendar year to November 11 totaling 324,578,000 tons shows an increase o f 13.9 per cent over 284,865,000 tons mined in the corresponding period last year. Most o f the sharp increase in production in September and O c tober was due to buying by industrial consumers, but since the beginning o f the war in Europe a substantial increase has also occurred in foreign cargo coal loaded at Hampton Roads. Total loadings o f coal at Hampton Roads, in cluding New England and other coastwise shipments, amounted to 16,720,252 tons prior to Nvember 11 this year, compared wilh 14,183,788 tons loaded to the same date last year. Fifth district coal states have kept pace with the National increase in production, and coal carry ing railroads in the district have recently handled a near record tonnage. C O T T O N CO N SU M PTION SETS O CTO BER RECO RD Cotton textile mills continued operations at a very high rate in October, and cotton consumption in the United States and the Fifth district reached all-time high figures for that month in the year. New orders did not keep pace with production and there was consequently some reduc tion in the back-log o f orders placed in early September. Prices o f textiles held firm during October, but quotations on a few constructions tended to soften in November in spite o f an advance in spot cotton prices. Consumption o f cotton by states in the Fifth district in October 1939, September 1939, and October 1938, in bales, is shown below : COTTON CONSUMPTION— FIFTH DISTRICT In Bales MONTHS No. Carolina So. Carolina Virginia District October 1939 ........................... September 1939 ....................... October 1938 ........................... 181,068 166,640 138,181 126,700 118,362 109,728 13,231 12,814 12,864 320,999 297,816 260,773 10 Months, 1939 ..................... 10 Months, 1938 ................... 1,577,468 1,241,167 1,172,394 964,999 119,001 115,529 2,868,863 2,321,695 R A Y O N SHIPM ENTS CO N TIN U E H IG H ....Rayon Organon for November states that shipments of rayon yarn to domestic consumers in October amounted to 34,100,000 pounds, compared with 32,900,000 pounds in September and 25,100,000 pounds in October 1938. Last month’s shipments again exceeded production, and re serve stocks o f yarn dropped from 13,000,000 pounds on September 30 to 9,400,000 pounds on October 31. On October 31, 1938, reserve stocks o f yarn totaled 36,100,000 pounds. A number o f price advances on yarn were made by two producers in October on acetate process yarn. Viscose producers had previously advanced quo tations on a few deniers, but no changes have been an nounced on cuprammonium yarn. C O TTO N PRICES A D V A N C E Spot cotton prices rose sharply between October 13 and November 17, advancing from 8.97 cents per pound to 9.51 cents. A considerable part o f the increase was at tributed to an announcement that the Government would make cotton loans on the 1939 crop. Exports o f cotton, which jumped substantially in September, were again high in October, but around mid-November cargo space for cotton was becoming scarce and ocean freight rates were advanced. A s a result o f these unfavorable developments, cotton exports dropped at least temporarily. The Department o f Agriculture’s November 1 estimate of probable production was reduced further, the forecast of 11,845,000 bales comparing with 11,928,000 bales on October 1 and 1938 production o f 11,943,000 bales. One change was made in the Fifth district, South Carolina’s probable yield declining from 910,000 bales a month ago to 895,000 bales on November 1. COTTON CONSUMPTION AND ON HAND (Bales) Oct. Oct. Aug. 1 to Oct. 31 1939 1938 This Year Last Year Fifth district states: Cotton consumed ..................... 320,999 260,773 918,010 794,384 Cotton growing states: Cotton consumed ..................... 579,589 460,078 1,645,956 1,387,210 Cotton on hand Oct. 31 in Consuming establishments . . 1,296,055 1,333,733 ........... ........... Storage & compresses ........... 15,440,544 15,255,359 .......... .......... United States: Cotton consumed ....................... 686,936 543,857 1,940,286 1,636,665 Cotton on hand Oct. 31 in Consuming establishments . . 1,465,228 1,508,813 ........... ........... Storage & congresses ........... 15,468,299 15,307,727 ........... ........... Exports of cotton ............................ 886,332 464,439 1,754,181 1,053,940 Spindles active, U. S ....................22,658,994 22,113,316 4 MONTHLY REVIEW T O B A C C O PRICES H IG H ER T H A N IN SEPTEM BER Auction tobacco markets resumed sales on October 10, and in the remainder o f that month held heavy sales. Prices were about 37 per cent below October 1938 prices, but showed a moderate advance over September prices. Season sales through October were 12 per cent above sales in the same period last year, but the average price this season was 34 per cent lower. Sales o f tobacco in the Fifth district in October after the reopening o f the mar kets were as follows, compared with a full month's sales in October 1938: Productrs’ Tobacco Sales, Pounds October 1939 October 1938 STATES South Carolina ......... North Carolina ......... Virginia ....................... District ..................... Season through ........ 20,030,159 241,343,218 44,397,751 305,771,128 641,537,033 1,256,891 167,989,520 40,616,459 209,862,870 571,004,534 Price per Cwt. 193fr 1938 $11.28 16.23 15.34 15.78 15.30 $14.99 25.21 24.46 25.00 23.28 T O B A C C O M A N U F A C T U R IN G INCREASES The Bureau o f Internal Revenue reports that all types o f manufactured tobacco except smoking and chewing to bacco increased in output in October over September, and all types exceeded October 1938 production. October figures as released by the Bureau are as follow s: W H O LESALE TRADE, 200 FIRMS Net Sales October 1939 compared with Oct. Sept. 1939 1938 Auto supplies (9) ........... — 6 + 10 + 8 + 7 + 44 Drugs (12) ....................... Dry goods (8) ................. Electrical goods (15) Groceries (59) ................. Hardware (21) ............... Indus, supplies ( 12) . . . Plumbing & heating (4) Paper & products (8) . . Tobacco & products (7) Miscellaneous (40) ......... District Totals (200) . + 3 + 15 + 42 + 5 + 20 + 6 + 10 + 11 Stocks Ratio Oct. Oct. 31, 1939 collections compared with to accounts Oct. 31 Sept. 30 outstanding 1938 1939 Oct. 1 + 10 — 29 0< — 14 — 11 — 15 — 7 0 + 8 + 7 — 20 + 2 + 2 + 3 + 5 + 1 + 6 —1 — 4 + 33 + 11 + 9 + 6 —1 + 15 + 4 — 3 + 9 — 5 — 1 — 9 + 3 + 8 + 1 — 1 67 G O 80 41 68 92 47 27 55 75 81 69 65 CROP FO RECASTS The following figures show forecasts o f production based on November 1 conditions, compared with yields in 1938 and in the 10-year period 1928-1937, and percentage changes in acreage this year over or under 1938. Produc tion figures marked ( + ) were raised between October 1 and November 1, and those marked ( — ) were lowered. Cotton (Bales) TOBACCO PRODUCTS MANUFACTURED % Change October 1939October 1938 % Change Smoking & chewing tobacco, Pounds ............... Cigarettes, Number ............... Cigars, Number ....................... Snuff, Pounds ............................ 26,977,566 15,384,360,207 551,229.569 3,261,057 24,740,880 13,264,393,*97 525,662,072 3,128,')93 + 9 — 16 + 5 + 3 Acreage Virginia ....................... ........— 15 North Carolina ........... ........— 11 0 South Carolina ........... Yield 1939 Yield 1938 12,000 12,000 Yield 1928-1937 388.000 648.000 40,MO 702.000 827.000 29.250.000 98.906.000 2,208,000 516,850,000 98.800.000 25.217.000 98.075.000 3,400,000 493,927,000 79.624.000 18.537.000 34.775.000 15.617.000 32.225.000 12.384.000 41.355.000 21.335.000 475,000 895,000- Tobacco (Pounds) R E T A IL A N D W H O LESALE T R A D E DEPARTMENT STORE TRADE Net Sales Oct. 1939 comp, with October 1938 Richmond (3) . . . Baltimore (8) . . . Washington (6) . Other Cities (14) District (31) . . + + + + + Same stores by states, with 26 stores added: Virginia (13) . . . + W est Va. (10) . . + No. Carolina ( 9). — So. Carolina (11) + Net Sales Stocks Jan. 1 to date Oct. 31, 1939 comp, with comp, with Sept. same period Oct. 1839 last year 1938 + 3.0 + 2.6 + 4.5 + 4.1 + 3.6 2.5 8.1 1.0 1.3 3.7 +11.0 + + 0.7 6.0 + 5.3 +12.6 Ratio Oct. collections to accounts outstanding Oct. 1 + 10.4 + 6.8 + 10.4 4 12.9 + 9.4 32.9 32.5 28.2 29.7 30.3 29,562,000 130.198.000 + 2,025,000 — 696.525.000 + 118.750.000 Corn (Bushels) Maryland ..................... ........+ Virginia ........................ West Virginia ...................+ North Carolina ................... — South Carolina ...................— 1 0 18,216,000 + 36,166,000 + 1 13,737,000 1 5 47,151,000 25,433,000 12.640.000 46.398.000 26.767.000 Irish Potatoes (Bushels) Maryland ........ Virginia .......... West Virginia North Carolina South Carolina + 3.4 + 3.2 + 7.3 + 13.8 1*8 5.4 2.5 4.5 M aryland................................+ 1 Virginia ................................ + 1 6 West Virginia ...................— 6 North Carolina ................... + 2 1 South Carolina ................... + 2 0 — 4 0 — 3 + 10 + 17 2,250,000 6,873,000— 2,945,000+ 8,265,000+ 3,108,000 2,990,000 10,349,000 4,635,000 8,690,000 2,784,000 3.257.000 12,352,000 3.818.000 8.028.000 2,476,000 1,040,000 3,570,000 8,748,000 6,468,000 1.156.000 4.285.000 7.896.000 4.965.000 1,419,000 7,268,000 3,227,000 480,000 1.331.000 8.153.000 3.576.000 657,000 146,010,000 249,075,000 9,100,000 148.630.000 238.750.000 9,032,000 Sweet Potatoes (Bushels) RETAIL FURNITURE SALES % Change in Sales, October and 10 Months 1939 STATES Compared with October 1938 Compared with 10 Months 1938 Maryland, 10 stores ............................ Dist. of Col., 7 stores ....................... Virginia, 10 stores .............................. North Carolina, 4 stores ................. South Carolina, 6 stores ................. District, 38 stores* .......................... +21 + 6 + 7 +34 +29 +15 + 8 + 6 + 8 +13 +27 + 9 Individual Cities: Baltimore, 10 stores .............................. Richmond, 5 stores ............................ Washington, 7 stores ....................... +21 + 6 + 6 + 8 + 2 + 6 * Includes one W . Va. store. Maryland ..................... Virginia ....................... North C a ro lin a........... South Carolina ........... + 0 0 0 5 1,200,000 4,420,000+ 8,991,000+ 7,038,000 4* Commercial Apples (Bushels) Maryland ..................... Virginia ....................... West Virginia ........... North C a rolin a........... .. .. .. .. 1,700,000 7,500,000— 4,000,000 580,000+ Peanuts (Pounds) Virginia ....................... North Carolina ........... South Carolina ........... (Compiled November 21, 1939) + + + 5 5 6 184,800,000 282,720,000— 11,400,000— MONTHLY REVIEW, November 30 ,1 9 3 9 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) Note: The charts usually printed with this Summary are not available this month. Rapid expansion o f industrial output continued in O ctober, and em ploy m ent and pay rolls increased considerably. D istribution o f com m odities to consum ers, which had increased in September, w as m aintained at the higher level in O ctober. In the first h alf o f N ovem ber industrial activity increased fu rth er but, w ith produ ction in m any industries approach in g capacity, the advance w as less rapid than in earlier m onths. Com m odity prices generally show ed little change during O ctober and the first h alf o f N ovem ber, fo llo w in g the sharp rise in Septem ber. PRODUCTION V olu m e o f industrial produ ction showed a fu rth er sharp rise in O ctober and the B oa rd's seasonally adju sted index advanced fr o m 111 to 120 per cen t o f the 1923-1925 average. M arked increases in activity w ere rep orted in the steel and steel-consum ing industries and at mines. In the steel industry in got p rodu ction in O ctober was a t a rate o f 90 per cen t o f capacity and actual volum e o f output was the greatest fo r any m onth on record . Som e fu rth er increase in the rate o f ou tpu t w as reported in the first h alf o f N ovem ber. P ig iron p ro du ction also advanced sharply and lake shipm ents o f iron ore, w hich had in creased considerably in Septem ber, continued in ex ception ally large volum e. A ctiv ity in the m achinery and shipbuilding industries and in m ost oth er steel consum ing lines rose in O ctober bu t by a considerably sm aller am ount than ou tpu t o f steel. In the au tom obile industry, how ever, ou tpu t show ed less than the m arked rise usual at this season. This w as due to the fa c t th at plants o f one large p rod u cer w ere closed during most o f the m onth b y an industrial dis pute. M ineral produ ction in O ctober was at record levels ow in g chiefly to a high rate o f crude petroleu m output. In the nondurable g ood s industries activity w as g en erally m aintained at the high levels reached in A u gu st and Septem ber. F lou r p rodu ction declined sharply, how ever, fo llo w in g an ex ception ally large volum e o f output in Septem ber. V alue o f construction contracts, as reported b y the F. W . D odge C orpora tion, decreased considerably in O ctober, reflectin g prin cipally a red u ction in aw ards fo r pu blic construction. P rivate residential contracts continu ed in sub stantial volum e w hile aw ards f o r com m ercial and industrial b u ildin g declined som ew hat fo llo w in g increases in the previous m onth. EMPLOYMENT R eports fr o m leading industrial States indicate that fa c to r y em ploym ent and pay rolls increased sharply betw een the m iddle o f Septem ber and the m id dle o f O ctober. Increases w ere particularly large at steel m ills and in related industries. Th ere w as also a considerable in crease in em ploym ent on the rail roads in O ctober. DISTRIBUTION R etail distribution o f general m erchandise in O ctober show ed ab ou t the usual seasonal rise fr o m the advanced Septem ber level. In the early part o f N ovem ber departm ent store sales increased considerably. F reigh t-car loadings rose fu rth er from Septem ber to O ctober, reflectin g a large increase in shipm ents o f m iscellaneous freigh t, w hich includes m ost m anu fa ctu red products, and sm aller increases in loadings o f coal, fo r e s t products, and ore. COMMODITY PRICES P rice changes that have occu rred since the general sharp rise in Septem ber have reflected la rg ely particular developm ents in individual com m odities. F rom the m iddle o f O ctober to the m iddle o f N ovem ber prices o f a num ber o f fo o d stuffs continued to decline and there w ere also decreases in som e industrial m aterials, such as print cloths, w ool, tin, and steel scrap. W heat, cotton , and burlap advanced som ewhat w hile prices o f m ost other com m odities, in cluding finished industrial products, show ed little change. GOVERNMENT SECURITY PRICES F ollow in g a sharp r e co v e ry fr o m the low o f Septem ber 21, p rices o f U nited States G overnm ent bonds show ed irregular changes du ring the period fr o m O ctober 24 through the first h alf o f N ovem ber. On N ovem b er 15 yields on lon g-term T reasu ry bonds w ere at 2.47 per cen t as com pared w ith 2.79 p er cen t on Septem ber 21. BANK CREDIT T ota l loans and investm ents a t rep ortin g m em ber banks in 101 leading cities increased substantially during the six w eeks ending N ovem ber 8, reflect in g largely purchases o f T reasu ry bills b y N ew Y ork C ity banks. Com m ercial loans continued to show m oderate increases. D eposits at these banks rose to new high levels.
