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MONTHLY REVIEW o f Financial and Business Conditions F i f t F e d R h e r a l e Z ^ ' n'c . . . . . . . . . D i s t r i c s e r v e t Federal Reserve Bank, Richmond, Va. November 30, 1941 Summary of October Business Conditions I N spite o f some difficulties in obtaining priorities for Distribution o f consumer goods continued in larger volume than a year ago except in automobiles. Depart ment store sales in 79 stores in the district showed a 9 per cent rise in October above sales in September, and ex ceeded October 1940 sales by 13 per cent, while retail furni ture sales in October in 40 stores exceeded September 1941 and October 1940 sales by 4 and 10 per cent, respectively. Sales by 174 wholesalers and jobbers declined 5 per cent from September to October, but in the latter month were 33 per cent above sales in October last year. Sales o f new passenger automobiles in October, while showing some seasonal increase over September, fell much below October 1940 sales, ascribed by dealers to increased prices and taxes on 1942 models, to some restrictions in selling terms, and to a large amount o f forward buying o f 1941 models in anticipation o f higher prices and taxes. certain construction and industrial materials, the v o l ume o f trade and industry in the Fifth Reserve district in October and the first part o f November was about up to seasonal level, and on the whole far exceeded October 1940 volume. A t the Federal Reserve Bank o f Richmond, Federal R e serve notes in actual circulation continued to rise season ally between October IS and November 15, and on the lat ter date stood 51 per cent above outstanding circulation on November 15 last year. Member bank reserve deposits also increased last month, and at mid-November were 37 per cent higher than a year ago. Holdings of Government securities rose 14 per cent and the Bank’s cash reserves increased 48 per cent during the year. Reporting member banks in leading cities showed relatively few changes in their statements during the past month, but between N o vember 13, 1940 and November 12, 1941, their loans to business and agriculture rose 18 per cent, while all other loans rose 7 per cent, investments in securities rose 25 per cent, reserve balances at the Reserve bank rose 35 per cent, demand deposits rose 25 per cent, and time deposits rose 3 per cent. Debits to individual accounts in 25 cities, re flecting checking transactions, rose 16 per cent in October over September 1941 and 35 per cent over October 1940. Industrial activity continued at recent high levels or increased further in October. Construction work provided for by permits issued and contracts awarded was about at the high level o f recent months, although some contem plated projects were postponed because o f inability to se cure certain needed materials, notably steel. Rayon yarn shipments in the United States to domestic consumers set an all time monthly record in October, and cotton consumption in both the United States and the Fifth dis- BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT October 1941 September 1941 October 1940 Change Month Year Debits to individual accounts (25 cities)..... Sales, 79 department stores, 5th district......... Sales, 40 furniture stores, 5th district............. Sales, 174 wholesale firms, 5th district........... Registrations, new autos, 5th district............. $2,116,760,000 $ 18,951,340 1,666,438 $ $ 14,824,000 13,988 $1,824,609,000 $ 17,355,089 1,601,960 $ $ 15,655,000 9,408 $1,572,148,000 $ 16,714,381 1,517,927 $ $ 11,167,000 22,610 + 16 + 9 + 4 — 5 + 49 + + + + — 35 13 10 33 38 Tobacco sold in 5th district (Pounds)............. Average price of tobacco, per 100^ lbs.............. Growers’ receipts from tobacco, 5th district.. Number o f business failures, 5th district..... Liabilities in failures, 5th district.................... Value o f building permits, 29 cities................ 160,587,968 33.48 53,763,718 28 180,000 $ $ 11,494,803 32 15 22 12 51 17 — + + — — — 33 74 16 30 64 2 $ 240,367,011 19.23 46,219,415 40 498,000 $ $ 11,758,551 $ 51,758,000 354,688 9.36 7.13 36,700,000 6,900,000 38,700,000 — + — + — — Value o f contracts awarded, 5th district....... Cotton consumption, 5th district (B ales)....... Cotton price, cents per lb., end of month....... Print cloths, 39 in., 80x80s, end of month..... Rayon yarn shipments, U. S. (Pounds)........... Rayon yarn stocks, U. S. (P ounds).............. Bituminous coal mined, U. S. (T on s)............. * Ceiling prices established by OPACS. 235,402,972 29.18 68,679,635 25 367,000 $ $ 13,876,928 $ 77,738,000 408,449 16.99 10.75* 37,000,000 4,900,000 46,880,000 7 8 — 5 0 + 13 + 8 + 6 + + + + + — + 60 25 73 51 14 23 29 $ $ 83,065,000 442,728 16.21 10.75* 41,700,000 5,300,000 49,800,000 $ $ $ $ + + MONTHLY REVIEW 2 trict reached new high figures. Tobacco manufacturing in October was in large volume, and cigarette production set a new monthly record p f 19,632,466,010 cigarettes, of which 84 per cent, or 16,572,086,000 cigarettes, were made in the Fifth Reserve district. Bituminous coal pro duction o f 49,800,00 net tons in the United States in O c tober 1941 exceeded October 1940 production by 29 per cent. O f last month’s tonnage, approximately 13,590,000 tons, or 27 per cent, were mined in the Fifth district. In agriculture the Fifth district suffered severely this year from too much rain in South Carolina in the first half o f the season and from drought throughout the entire dis trict in the latter half o f the season. But in spite o f these adverse conditions, crops with the exception o f cotton in South Carolina turned out fair in most instances, and in view o f present agricultural product prices the farmers of the district are on the whole economically better off this fall than a year ago. Even in cotton an advance this year o f about 70 per cent in price should nearly compensate for a decline o f 45 per cent in yield, and in tobacco a yield decrease o f 13 per cent is much more than made up by a price increase o f about 80 per cent. BAN K IN G STATISTICS C O M M E R C IA L FAILU RES RESERVE B A N K STATEMENT ITEMS Fifth District 000 omitted Oct. 15 Nov. 15 ITEMS 1941 1941 $ Discounts held .............................. Foreign loans on g o l d ............... Industrial advances ................... Government securities ............... Total earning assets ............. Circulation of Fed. Res. notes Members’ reserve deposits ----Cash reserves ................................ Reserve ratio ................................ 0 0 779 134,996 $135,775 399,321 489,000 832,765 84.96 $ Nov. 15 1940 $ 80 35 815 118,321 $119,251 264,697 356,891 563,022 82.88 0 0 793 134,996 $135,789 390,164 483,451 809,474 85.11 SELECTED ITEMS— 41 REPORTING MEMBER BANKS Fifth District 000 omitted Oct. 15 Nov. 12 ITEMS 1941 1941 $161,296 $161,107 Loans to business & agriculture 172,494 170,473 All other lo a n s .............. .................. 518,040 551,926 Investments in securities ........... 325,689 321,854 Reserve bal. with F. R. bank . . . 26,593 30,764 Cash in vaults . ................................ 778,491 785,068 Demand deposits .............................. 211,656 211,780 Time deposits .................................. 0 0 Money borrowed .............................. Nov. 13 1940 $136,700 159,420 441,804 238,240 26,180 626,102 204,792 100 Total deposits ................... CITIES Dist. of Col. Washington . . . . Maryland Baltimore ............. Cumberland ........ Hagerstown ........ North Carolina Asheville ............... C h arlotte............... Durham ............... Greensboro ........... Raleigh ................. Wilmington ......... Winston-Salem . . . South Carolina Charleston ........... Columbia ............. Greenville ............. Spartanburg......... Virginia Danville ............... Lynchburg ........... Newport News . . Norfolk ................. Portsmouth ......... Richmond ............. Roanoke ............... West Virginia Charleston ........... Huntington ......... Parkersburg ........ District Totals . . Oct. 31. 1940 $223,668,715 Sept. 30, 1941 $224,490,776 DEBITS TO IND IVID UAL ACCOUNTS Fifth District 000 omitted Oct. Sept. Oct. 1940 1941 1941 October 1941............... September 1941............... October 1940............... 10 Months, 1941............... 10 Months, 1940............... $ 412,871 $ 359,671 $ 307,184 + 15 + 34 614,763 11,374 13,661 491,249 10,643 12,164 431,213 8,614 10,379 + 25 + 7 + 12 + 43 + 32 + 32 20,835 107,293 75,534 28,916 60,821 22,351 66,553 18,753 94,055 66,612 25,906 52,942 21,280 59,313 16,182 76,729 54,030 22,597 51,103 13,735 51,050 + + + + + + + 11 14 13 12 15 5 12 + + + + + + + 29 40 40 28 19 63 30 31,608 41,103 35,584 19,407 28,110 38,835 30,003 16,460 23,809 34,854 24,460 14,902 + 12 + 6 + 19 + 18 + + + + 33 18 45 30 29,888 18,884 14,736 85,815 8,013 249,109 37,692 17,026 18,404 13,492 73,899 6,647 236,403 34,601 17,833 15,525 15,535 62,387 5,640 197,573 30,684 + 76 + 3 + 9 + 16 + 21 + 5 + 9 + 68 + 22 — 5 + 38 + 42 + 26 + 23 70,114 25,551 14,284 $2,116,760 63,892 21,594 12,655 $1,824,609 55,116 19,460 11,554 $1,572,148 + + + + + + + + 10 18 13 16 27 31 24 35 809 735 1,111 $ 180,000 367,000 498,000 7;333,<KI6 9,393,000 12,715,000 464 10,108 11,509 3,655,000 5,731,000 113,438,000 136,803,000 Source: Dun & Bradstreet EM PLOYM ENT The demand for workers continues unabated in Fifth district industries, and employers in distributive lines who add help for the holiday season are wondering where ad ditional workers can be obtained. N o noticeable decline in work has yet occurred as a result o f priority allocations o f materials needed in defense projects. The following fig ures, 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 October 1941: Percentage change from Sept. 1941 to Oct. 1941 in number in amount on payroll of payroll Maryland . . . . . . . . . Dist. of Col............... Virginia ................. West Virginia North Carolina . .. South Carolina District Average % of Change Month Year Total Liabilities District U. S. 40 28 STATES M UTUAL SAVINGS BANK DEPOSITS 9 Baltimore Banks Oct. 31, 1941 $225,557,877 Number of Failures District U. S. PERIODS + 0.7 + 1.1 + 1.0 — 0.2 + 0.3 + 0.8 + 0.6 + + + + + + + 5.0 2.8 2.6 3.5 5.2 . 5.6 4.2 A U TO M O B ILE REGISTRA TIO N S Sales o f new passenger automobiles in the Fifth dis trict in October were substantially below seasonal level, although some increase was shown over September sales. In comparison with sales in October 1940, however, sales last month dropped 38 per cent. Unofficial reports from trade papers and dealers indicate that stocks o f new cars are accumulating in dealers’ hands, but in view o f further restrictions on new car manufacturing expected later in the current model year the moderate excess o f receipts o f new cars over sales is not regarded as a disadvantage. Used car sales, while slower than in the summer, are somewhat more active than new car sales, and stocks o f used cars are unusually low for this time o f year. The following registration figures for new passenger cars were furnished by R. L. Polk & Co., o f Detroit: REGISTRATIONS OF Oct. STATES 1941 Maryland ........... 2,636 Dist. of Col. . . . 1,250 3,557 1,334 West Virginia . . 3,566 No. Carolina .. . So. Carolina .. . 1,645 District ........... 13,988 N E W PASSENGER CARS— NUMBER Oct. 10 Months 10 Months % % Change 1940 1941 1940 Change 4,454 — 41 51,247 41,123 +25 3,109 — 60 27,791 23,634 + 18 4,358 — 18 66,425 46,127 +44 2,427 — 45 29,945 + 14 26,215 5,479 — 35 58,682 44,061 + 33 2,783 — 41 31,829 23,593 + 35 22,610 - 38 265,919 204,753 + 30 3 MONTHLY REVIEW CO N STR U C TIO N The value o f building permits issued in October 1941 in 29 Fifth district cities totaled $11,494,803, compared with $13,876,928 in September this year and $11,758,551 in October last year. Baltimore reported the highest O c tober 1941 figure, $3,738,534, and Washington was sec ond with $3,034,610. Federal Government work is not in cluded in the Washington figure. Durham ranked third last month with $1,020,305, Richmond was fourth with $701,288, and N orfolk was fifth with $298,542. Contract award figures for October totaled $83,065,000 in the Fifth district, a higher figure than either $77,738,000 for September 1941 or $51,758,000 for October 1940. The high award figures in recent months are chiefly due to de fense projects and publicly financed housing. Figures on contract awards in September 1941, which were not avail able on a state basis when the October 31, 1941 R eview went to press, were reported by the F . W . Dodge Corpora tion as follow s: CONSTRUCTION CONTRACTS AW ARDED STATES Sept. 1941Sept. 1940 % Maryland ................................ $ 15,797,000 $ 7,453,000 Dist. of Col................ .............. 6,755,000 5,381,000 Virginia .................................. 32,596,000 7,664,000 2,171,000 4,330,000 West Virginia ..................... North Carolina ................... 11,119,000 7,129,000 South Carolina ..................... ................. 9,300,000_________ 2,235,000 $ 77,738,000 $ 34,192,000 District ............................. Change +112 + 26 +325 — 50 + 56 +316 +127 BITU M IN OU S C O A L M IN IN G Bituminous coal mining in the United States increased from September to October by 6 per cent, but declined on a daily output basis by 2 per cent. In comparison with October 1940, last months’ tonnage rose by 29 per cent. In October 1941 output o f 49,800,000 net tons compared with 46,880,000 tons mined in the shorter month o f Sep tember 1941 and 38,700,000 tons in October 1940. On a daily basis October tonnage o f 1,844,000 tons compared with 1,875,000 tons in September and 1,433,000 tons in October last year. Total production this calendar year to October 31 o f 411,608,000 tons was 11 per cent above 371,833,000 tons mined to the corresponding date in 1940. Shipments o f coal through Hampton Roads ports totaled 18,969,495 tons to November 8, a decrease o f 2 per cent from shipments o f 19,272,677 tons to the same date last year, the decline occurring chiefly in foreign cargo and foreign bunker loadings. In the Fifth district, produc tion o f bituminous coal in October 1941, September 1941 and October 1940 was as follow s: SOFT COAL PRODUCTION IN TONS REGIONS Oct. 1941 West Virginia ....................... Virginia .................................. Maryland ................................. 5th District ......................... United States ..................... % in District ..................... 11,915,000 1,534,000 141,000 13,590,000 49,800,000 27 Sept. 1941 Oct. 1940 13,487,000 10,280,000 1,712,000 1,270,000 168,000__________120,000 15,367,000 11,670,000 46,880,000 38,700,000 33 30 C O TTO N TEX TILES During the first half of October the market for cotton textiles was unsettled, neither buyers nor sellers being anxious to make commitments until ceilings on a sliding scale were established by the O P A C S . This was done shortly after the middle o f the month, and future prices for textiles were related to average spot cotton prices on ten Southern markets. A number o f additional constructions were also brought under ceilings. Textile mills operated at the highest level on record in October, and set a new record in cotton consumption. Mills are working on backlogs o f orders previously obtained, many o f them for fabrics en tering into defense. Finished textiles are scarce and all lots offered for sale are quickly taken. Trade papers re port some recent sales for export at prices above ceiling quotations, indicating that there are some textiles in reserve which owners do not care to sell fo r ceiling prices. In the Fifth district specifically, cotton consumption in October was the highest for any month on record, this being the fourth month this calendar year in which a new record was established. COTTON CONSUMPTION— FIFTH DISTRICT In bales MONTHS October September October 10 Months, 10 Months, 1941, 1941 1940, 1941, 1940, No. Carolina So. Carolina Virginia 244,667 177,431 20,630 224,429 164,228 19,792 196,823 143,374 14,491 2,187,741 1,641,095 186,684 1,684,130 1,300,403 124,321 District 442,728 408,449 354,688 4,015,520 3,108,854 R A Y O N Y A R N PRO D U C TIO N Rayon yarn shipments in the United States to domestic consumers set a record o f 41,700,000 pounds in October, 13 per cent above September 1941 shipments o f 37,000,000 pounds and 14 per cent above October 1940 shipments o f 36,700,000 pounds. Production last month exceeded ship ments for the fourth successive month, and reserve stocks consequently rose from 4,900,000 pounds on September 30 to 5,300,000 pounds on October 31. Rayon Organon says that shipments o f yarn in the 10 elapsed months o f 1941 to taled 374,700,000 pounds, an increase o f 17 per cent over shipments o f 319,900,000 pounds in the first 10 months o f 1940. Part of the recent increase in poundage was due to an increase in the average denier o f yarn spun in viscose and cuprammonium plants, offset to some extent by a reduc tion in average denier o f acetate yarn. Rayon yarn price scales have recently been agreed upon by manufacturers and the Office o f Price Administration, and the latter an nounced that the imposition o f rayon price ceilings would not be necessary, at least for the present. The inventory o f filament yarn held by broad weavers at the end o f October totaled 21,800,000 pounds, a smaller figure than either 23,400,000 pounds held on September 30 this year or 24,300,000 pounds held on October 31 last year. C O T T O N STATISTICS In this R eview last month the average price for 15/16 inch staple middling grade cotton on October 17, 1941 on 10 Southern markets was quoted as 16.16 cents per pound. A fter that date prices registered some advance, and by November 14 had risen to 16.39 cents. On November 15, 1940 the average price on the same markets was 9.75 cents. Demand for the better grades o f cotton has been strong, but the price differentials between the higher and lower grades have encouraged some mills to turn to the medium grades. General satisfaction on the part o f cotton growers with prices this year is evidenced by the report that to N o vember 8 the Commodity Credit Corporation had made loans on only 553,836 bales of the 1941 crop against loans made on 1,650,000 bales o f the 1940 crop to the corres ponding date last year. MONTHLY REVIEW 4 The fourth forecast on the 1941 cotton crop, issued on November 8 by the Department of Agriculture, lowered the estimate from 11,061,000 bales as of October 1 to 11,020.000 bales on November 1, a decrease of 41,000 bales. In the Fifth district, however, prospective yields increased 25.000 bales in North Carolina and 3,000 bales in V ir ginia, while the South Carolina estimate remained un changed. COTTON CONSUMPTION AND ON HAND — BALES Fifth district states: Cotton consumed .. Oct. 1941 Oct. 1940 442,728 354,688 Cotton growing: states: 805,975 652,843 Cotton consumed ................. . Cotton on hand Oct. 31 in Consuming establishments . . 1,648,371 1,172,276 Storage & compresses ........... 12,955,370 13,700,798 United States: Cotton consumed ................. . 953,600 770,832 Cotton on hand Oct. 31 in Consuming establishments . . 1,993,293 1,355,460 Storage & compresses ........... 13,342,123 13,836,566 Exports of cotton ..................... Spindles active 161,668 Aug. 1 to Oct. 31 This Year Last Year 1,244,848 956,217 2,290,938 1,762,856 DEPARTMENT STORE TRADE Percentage increase or decrease in sales, stocks, outstanding orders and outstanding receivables in . 1941 in comparison with Oct. 1940 figures: Receivables Sales Stocks Orders + 30 + 12 + 4 ( + 15) + 42 + 17 ( + 21) + 33 + 83 + 11 + 12 ( + 20) + 38 + 44 + U + 12 ( + 18) + 28 + 75 + 12 + 53 + 13 ( + 21) 4-36 + 11 Richmond (5) . . . Baltimore (10) . . . Washington (7) Other Cities (12) Same stores by states: Maryland (13) ............... + 17 ( + 2 1 ) Virginia (16) ................. + 8 ( + 21) West Virginia (15) . . . + 15 ( + 19) North Carolina (16) . . . + 10 ( + 18) South Carolina (12) .. + 18 ( + 26) * Includes stores reporting sales only. Note: Second figure under Sales, in parentheses, compares combined sales in 10 months of 1941 with sales in the first 10 months of 1940. RETAIL FURNITURE SALES % 2,703,395 194,700 429,399 2,059,955 350,680 23,043,310 22,470,784 Auction tobacco prices continued high on Fifth district markets in October, and sales in South Carolina were com pleted for the season. Total sales in the district last month were much less than sales in October 1940, but this was chiefly due to earlier market openings this year, a larger part o f the 1941 crop having been sold in September. Sales in October and for the season through October, all o f flue-cured type tobacco, were as follow s: Producers’ Tobacco Sales, Pounds October 1941 October 1940 225,640 8,263,570 120,187,382 190,599,446 40,174,946 41,503,995 240,367,011 160,587,968 515,956,051 517,274,412 STATES Maryland (9) ........... Dist. of Col. (7) ___ Virginia (13) ........... North Carolina (5) . South Carolina (6) . District (40) ......... Change in Sales, Oct. and 10 Months of 1941 Compared with Compared with Oct. 1940 10 months 1940 +24 + 7 +22 + 35 +22 + 9 — 13 + 19 + 36 + 6 +10 + 27 Individual Cities: Baltimore (9) ........... Richmond (5) ........... Washington (7) ----- AU C TIO N TO B A C C O M ARK ETIN G STATES South Carolina ........... North Carolina ........ Virginia ....................... District Total ........ Season through .. . R E T A IL A N D W H O LESALE TR A D E Price per Cwt. 1941 1940 $19.38 $11.99 33.51 19.42 33.45 20.28 $33.48 $19.23 31.88 17.68 + 7 — 0 + 25 + 8 +22 + 35 W HOLESALE TRADE, 174 FIRMS LINES Automotive supplies (9) . Drugs & sundries (5) Dry goods (8) ................... Electrical goods (9) . . . . Groceries (57) ................... Hardware (13) ................. Industrial supplies (9) . Paper & products ( 8 ) . . . Tobacco & products (8 ). . Miscellaneous (44) ......... District Average (174). Net Sales October 1941 compared with Oct. Sept. 1940 1941 + 33 + 48 + 38 + 30 + 52 + 16 + 33 + 29 + 53 + 25 + 37 +33 Stocks Ratio Oct. Oct. 31, 1941 collections to accounts compared with Oct. 31 Sept. 30 outstanding 1940 1041 Oct. 1 — 1 — 17 + 3 — 7 — 23 — 1 + 5 — 5 + 5 + 2 + 7 — 5 + *8 -1 4 + 36 + 33 + 27 + o — 2 + 24 + '? + 43 + 22 + *7 — 0 — + — — + 4 5 4 2 1 75 68 79 47 63 109 61 81 82 89 78 71 Source: Bureau of the Census. A G R IC U L T U R E TO B A C C O M A N U F A C T U R IN G Tobacco manufacturers operated at capacity during O c tober, and cigarette production set a new record for the second consecutive month. Bureau of Internal Revenue receipts for October indicate production of tobacco prod ucts as follows in the United States: Smoking & chewing tobacco, pounds ............... Cigarettes, number ................. Cigars, number ....................... Snuff, pounds ........................... Oct. 1941 Sept. 1941 Oct. 1940 28,485,698 19,632,466,010 621,989,890 3,693,671 26,561,000 18,760,571,160 506,070,675 3,194,316 31,150,014 16,448,241,230 583,508,410 3,567,501 In spite o f continued drought throughout the Fifth dis trict in October, forecasts o f agricultural production as o f November 1 raised district estimates in cotton, corn, tobacco, Irish potatoes, sweet potatoes and peanuts, but lowered the commercial apple figure. Final yields this year will be larger than the 10-year averages in wheat, corn, oats, hay, peanuts and apples, but lower yields will be shown in cotton, tobacco, Irish potatoes and sweet pota toes. Prices for cotton and tobacco this year are much above 10-year averages, and the farmers will receive more money for those crops than their average receipts in the past ten years. (Compiled November 22, 1941) MONTHLY REVIEW, November 30, 1941 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) INDUSTRIAL PRODUCTION Industrial activity continued to increase in O ctober and the first h a lf o f N ovem ber and there w as som e fu rth er advance in prices o f industrial m aterials and finished products. D istribution o f com m odities to consum ers declin ed in this period fo llo w in g an unusually large volum e o f trade in the preced in g three m onths. PRODUCTION Federal Reserve index of physical volume of pro duction, adjusted for seasonal variation, 1935-39 average=100. Subgroups shown are expressed in terms of points in the total index. By Months, January 1935 to October 1941. Federal Reserve indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average=100. By months, January 1935 to Oc tober 1941. MONEY RATES IN NEW YORK CITY V olum e o f industrial p rodu ction increased fu rth er in O ctober and the B oa rd ’s seasonally adju sted in dex advanced fr o m 161 to 164 per cent o f the 1935-39 average. Increases in a ctivity occu rred m ainly in industries produ cin g m achinery, armament, and other durable m a nu factu res requ ired under the de fen se program . In the m eatpacking industry a ctivity also advanced consider ably and output o f other m a nu factu red fo o d products, w hich has been unusually large in recen t months, declined less than seasonally. A u tom ob ile production increased during O ctober and in the first h a lf o f N ovem ber w as sustained at about the rate reached at the begin n in g o f the m onth. P rodu ction in O ctober approxim ated the quota perm itted f o r the m onth, w hereas in A u g u st and Septem ber output had been considerably below the quotas set, ow ing in part to delays in cident to the changeover to new m odel p rodu ction and to difficulties in obtain in g certain m aterials. Since the begin n ing o f the m odel year p rodu ction has been substantially in excess o f retail sales and dealers’ stocks have risen sharply. O utput o f cars and trucks in O ctober w as about on e-fou rth sm aller than in O ctober last y ea r; in the in dustry as a w hole, how ever, activity as m easured b y m an-hours w orked, was a b ou t the same as a year ago, apparently reflectin g a sh ift to arm am ent p ro duction. In m ost other m a n u factu rin g industries output in O ctober was m aintained at or near the rates prevailin g in other recen t months. A t cotton mills activity increased, follow in g som e reduction in the previous m onth, while at w ool mills there w as a slight decline fr o m the peak reached in Septem ber. Steel p rodu c tion rose to an average rate o f abou t 99 per cen t o f capa city during O ctober b u t declined slightly in the first h alf o f N ovem ber. Coal production declined som ewhat in O ctober and early N ovem ber, w hile output o f cru de petroleum increased fu rth er to new record levels. Iron ore shipm ents dow n the Lakes w ere m aintained at a high rate and th rough the end o f O ctober am ounted to 71,600,000 gross tons, a larger volum e than had pre viously been transported in any com plete shipping season. V alu e o f construction con tra ct aw ards decreased slightly in O ctober, a c cord in g to figures o f the F. W . D odge C orporation. D eclines in aw ards f o r publicly-financed w ork w ere partly offset in the total b y an increase in privatelyfinanced p rojects. A w ards fo r residential bu ildin g show ed little change, al though an increase is custom ary in this m onth. C on tract aw ards in O ctober continued in larger volum e than a year ago. T ota l aw ards w ere 60 per cent larger, reflectin g increases o f 13 per cen t in private con stru ction and o f 112 per cen t in pu blic w ork. DISTRIBUTION D istribution o f com m odities to consum ers declin ed in O ctober fo llo w in g an unusually large volum e o f trade in the preced in g three months. D uring the third quarter sales had been stim ulated considerably b y several fa ctors, n otab ly apprehension that there m ight be shortages and higher prices o f m any con sum ers’ g ood s later on, as w ell as desire to avoid stricter instalm ent cred it term s, effective Septem ber 1, and higher taxes on m any produ cts effectiv e O c tob er 1. R ailroad freig h t-ca r loadings declined som ew hat fr o m Septem ber to O c tob er, ow in g principally to decreased shipm ents o f grain produ cts and coal. Shipm ents o f livestock increased and ore loadings show ed less than the usual seasonal decline. COMMODITY PRICES Weekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds call able after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935 to November 15, 1941. MEMBER BANK RESERVES P rices o f agricultural com m odities, w hich had declined fr o m the early part o f Septem ber to the m iddle o f O ctober, have advanced som ew hat since that tim e and prices o f industrial com m odities have increased fu rther. R ecen t ad vances f o r industrial raw m aterials and finished products have been m ore restricted than in earlier periods, reflectin g partly an extension o f Federal maxim um price action particu larly to p etroleu m p rodu cts and to selected m etal, chem ical, and textile products. Prices in retail markets have continued to advance sharply. In Septem ber the cost o f living, as m easured b y the Bureau o f L ab or Statistics’ index, in creased 2 points to 108 per cen t o f the 1935-39 average and was 7 per cent above the level o f last M arch. Since Septem ber retail fo o d prices, w hich usually decline at this season, have increased fu rth er and prelim inary data in dicate that retail prices o f other com m odities have continued to rise. BANK CREDIT T ota l loans and investm ents at rep ortin g m em ber banks rose fu rth er du ring O ctober and the first tw o w eeks in N ovem ber. H oldings o f U nited States G ov ernm ent securities increased and com m ercial loans continu ed to advance. E xcess reserves o f m em ber banks declined fr o m 4.7 billion dollars to 3.5 billion on N ovem ber 1, reflectin g the increase in reserve requ irem ents p re viou sly announced b y the B oard to be effective on that date. UNITED STATES GOVERNMENT SECURITY MARKET Wednesday figures, January 2, 1935 to Novem ber 12, 1941. Required and excess reserves, but the total, are partly estimated. fornot FRASER Digitized L on g-term Treasury bonds declined slightly in price during th e ea rly part o f N ovem ber, follow in g a relatively sharp increase a fter the m iddle o f Septem ber to a record high level around N ovem ber 1. Y ields on sh ort-term issues have firmed since early in Septem ber, the yield on T reasu ry notes o f D ecem ber 1945 advancing from 0.62 per cent on Septem ber 15 to 0.83 on N ovem b er 15, and the bill rate rising to 0.258 p er cent.
@FedFRASER