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MONTHLY

REVI EW

of Financial and Business Conditions

F if t h
Federal

Federal Reserve Bank, Richmond, Va.

B uy
W ar
B onds




Reserve
D

is t r ic t

November 30, 1942

Buy
S a v in g s
St a m p s

INVEST FOR VICTORY NOW

2

MONTHLY REVIEW

Summary of October Business Conditions

B

U SIN E SS in the Fifth Federal Reserve district in
October and early November advanced perhaps more
than seasonally, and was in most lines substantially
above the volume of business transacted in the correspond­
ing period last year.

At the Federal Reserve Bank of Richmond, Government
security holdings rose by $36,393,000 between October 15
and November 15, and on the latter date were $164,204,000
higher than a year earlier. These increases occurred
through allocation to the Richmond bank of its share of
System purchases. Federal Reserve notes in actual circu­
lation rose $41,570,000 in the district last month, and at
mid-November totaled $329,137,000 above the November
15, 1941 figure, having increased 82 per cent during the
year. Member bank reserve deposits at the Federal Re­
serve Bank of Richmond increased by $27,075,000 during
the past month and $38,468,000 over reserves a year ago.
Cash reserves of the Richmond bank likewise rose last
month and during the year, but proportionately less than
the increases in note and deposit liabilities, and therefore
the ratio of cash reserves to note and deposit liabilities
combined, 75.41 on November 15, 1942, was lower than
either 77.07 on October 15, 1942 or 84.96 on November 15,
1941. At reporting member banks, loans declined slightly
between the middle of October and the middle of Novem­
ber, but investments in securities and both demand and
time deposits rose moderately. Debits to individual ac­
counts in the banks of 25 leading cities in the Fifth district
totaled $2,498,659,000 in October, showing increases of
10 per cent and 18 per cent, respectively, over debits in
September 1942 and October 1941.
Fifth district industries continued operations at virtual
capacity during October. Cotton textile mills, working
two and three shifts chiefly on Government orders, have
begun to feel a labor pinch, but no reduction in output of
textiles or consumption of cotton has occurred. Tobacco
manufacturers set a new production record in cigarettes
for the fifth consecutive month in October, and the Fifth

district alone made 18,998,155,000 cigarettes, or 82 per
cent of total production for the United States. Coal mines
in the district produced 15,795,000 net tons of bituminous
coal in October, 31 per cent of National production. Rayon
yarn mills continued operations up to full capacity, and in
the third quarter of this year set a new record for yarn
shipments to domestic consumers. Construction work is
still in very large volume in the district, in spite of re­
strictions on civilian work, the decline in private work
being more than made up by public construction connected
with war work and defense housing. Many relatively
small industries in various lines have Government contracts
and are working at an all-time high level. Shipyards and
airplane plants are of course using every human and me­
chanical facility to increase output.
Distribution of consumer goods in October set new
records in many lines where restrictions are not in effect.
People have money with which to buy the goods they want,
and apparently the public is not providing for next year's
sharply expanded payments on income taxes this far ahead
of the date of payment; in any event, holiday trade has
already opened in very large volume. Seventy-seven de­
partment stores in the Fifth district sold 26 per cent more
goods in October 1942 than in October 1941, and in spite
of restrictions on installment buying 105 furniture stores
sold 2 per cent more last month than a year ago. Two
hundred and fifteen wholesale firms in varied lines also
sold a little more in October this year.
Returns to farmers from their 1942 operations are far
above 1941 returns. Nearly every crop yielded better this
year, and prices were also generally higher. The two lead­
ing cash crops in the Fifth district, tobacco and cotton,
increased 26 per cent and 49 per cent, respectively, in yields,
and prices this year are approximately 31 per cent higher
for tobacco and 18 per cent higher for cotton. Yields of
feed crops were good, and farmers are better supplied than
usual with winter feed for their stock.

FINANCIAL AND BUSINESS CONDITIONS IN THE FIFTH FEDERAL RESERVE DISTRICT

Debits to individual accounts (25 cities)......
Sales, 77 department stores, 5th district........
Sales, 105 furniture stores, 5th district...........
Sales, 215 wholesale firms, 5th district.........
Tobacco sold in 5th district (Pounds)...........
Average price of tobacco, per 100 lbs...... ;.....
Growers’ receipts from tobacco, 5th district..

October 1942
$2,498,659,000
$ 23,891,906
$ 26.050.000
17.857.000
238,970,501
42.19
$
100,830,027

Number of business failures, 5th district........
Liabilities in failures, 5th district...... ...........
Value of building permits issued, 29 cities....
Value of contracts awarded, 5th district........
Cotton consumption, 5th district (Bales)......
Cotton price, cents per lb., end of month........

515,000
2,707,847
81.713.000
454,121
19.07

Rayon yarn shipments, U. S. (Pounds).........
Rayon yarn stocks, U. S. (Pounds)................
Cigarettes made, 5th district................ ..........
Cigarettes made, U. S.....................................
Bituminous coal mined, 5th district (Tons)....
Bituminous coal mined, U. S. (Tons)...........

40.600.000
7,400,000
18,998,155,000
23,075,492,090
15.795.000
51.065.000




22

September 1942
$2,263,480,000
19,739,670
$ 23.791.000
$ 17,362,000
270,651,001
$
37.74
$ 102,150,130
$
$
$

17
315,000
8,989,501
78,946,000
458,495
18.68
38.400.000
8,000,000

18,180,351,000
21,798,447,820
15.145.000
48.760.000

October 1941
$2,116,532,000
$ 19,014,891
$ 25,430,000
$ 17,789,000
162,237,929
$
33.47
$ 54,301,996
$
$
$

28
180,000
11,494,803
83,065,000
442,728
16.21

41.700.000
5,400,000
16,572,086,000
19,632,466,010
16.625.000
51.328.000

% Change
Month Year
+10
+ 18
+21
+ 26
+ 9
+ 2
0
+ 3
—12
+ 47
+12
+ 26
— 1
+ 86
+29
+63
—70
+ 4
— 1
+ 2

— 21
+186
— 76
— 2
+ 3
+ 18

+
—
+
+
+
+

—
+
+
+
—
—

6
8
4
6
4
5

3
37
15
18
5
1

MONTHLY REVIEW
BANKING STATISTICS

EMPLOYMENT

RESERVE BANK STATEMENT ITEMS
Fifth District
000 omitted
Nov. 15
Oct. 15
ITEMS
1942
1942
$
10 $
10
Discounts held ..........................
220
220
Foreign loans on gold...............
747
777
Industrial advances ..................
262,807
299,200
Government securities .............
263,814
300,177
Total earning assets...............
728,458
686,888
Circulation of Fed. Res. notes.
500,393
527,468
Members’ reserve deposits.......
952,031
Cash reserves ...........................
984,268
75.41
77.07
Reserve ratio .............................

Nov. 15
1941

$

0
0

779
134,996
135,775
399,321
489,000
832,765
84.96

SELECTED ITEMS—41 REPORTING MEMBER BANKS
Fifth District
000 omitted
ITEMS
Nov. 11
Oct. 14
Nov. 12
1941
1942
1942
$143,454
$148,979
$161,107
Loans to business & agriculture.
146,497
149,559
170,473
All other loans.............................
891,734
832,036
Investments in securities...........
551,926
312,274
308,660
Reserve bal. with F. R. bank. . . .
321,854
33,720
Cash in vaults.............................
31,753
30,764
986,775
970,379
785,068
Demand deposits ..........................
210,210
Time deposits .............................
208,408
211,780
0
0
Money borrowed ..........................
0

Oct. 31, 1941
$225,557,877

DEBITS TO INDIVIDUAL ACCOUNTS
Fifth District
000 omitted
Oct.
Sept.
Oct.
1942
1941
1942

% of

Month

Change
Year

+11

+

+

+
+
+ 1
1

+

+

+

7

11

3

3
5

0
9

+ 32
+ 29
— 4

+ 1
5

+ 36

— 6
+ 69

+ 20

+ 1
6

+ 5
+ 1
1
+ 21

+ 1
8
+ 14
+ 8

+
—
—

—

10
12

11

— 14

+

23

+ 3
+ 75
— 1
—241

+ 43

-- 16

+ 1
1
+ 4
+ 7
+ 1
1
_±_ 3
+ 10

+
+
+
+

0

352
33
62
28

BITUMINOUS COAL MINING

Goal mining continued at a high rate in October, and
mines in the United States produced 51,065,000 net tons
of bituminous coal, against 48,760,000 tons mined in Sep­
tember and 51,328,000 tons in October 1941. Daily pro­
duction in October of 1,891,000 tons showed a decline
from the daily average of 1,950,000 tons in the shorter
month of September. Total production of soft coal this
calendar year to November 7 amounted to 491,197,000
tons, an increase of 14 per cent over 430,499,000 tons pro­
duced to the corresponding date last year. In the Fifth
district production of coal in October 1942, September
1942 and October 1941 was as follows:
SOFT COAL PRODUCTION
REGIONS
Oct. 1942
West Virginia ....................
13,826,000
1,825,000
Virginia ...............................
Maryland .............................
144,000
5th District ......................
15,795,000
United States ................
51,065,000
% in District..................
31

IN TONS
Sept. 1942
13,319,000
1,681,000
145,000
15,145,000
48,760,000
31

Oct. 1941
14,614,000
1,845,000
166,000
16,625,000
51,328,000
32

CONSTRUCTION

+ 7
— 2
+ 18

Figures on insolvencies in the Fifth District and the
United States, as compiled by Dun & Bradstreet for several
recent periods, are as follows:




Maryland .........
Dist. of Col. .. .
Virginia ...........
West Virginia .
North Carolina
South Carolina

Percentage change from
September 1942 to October 1942
In number
In amount
on payroll
of payroll
—0.5
+ 0.4
+ 0.9
+ 0.9
—0.6
— 1.7
—0.2
+ 3.8
—0.4
+ 3.2
+ 0.1
+ 0.3

0

-- 8
-- 20
-- 6

COMMERCIAL FAILURES

PERIODS
October
1942.............
September 1942.............
October
1941.............
10 Months 1942.............
10 Months 1941.............

Labor shortages are developing in additional lines in
the Fifth Reserve district, caused partly by induction of
workers into the armed forces and partly by a shift of
younger people to defense work which pays better than
civilian employment. Mechanics of all kinds are in great
demand and there are not nearly enough skilled men to
meet the demands of industry. Farm laborers have left
the land in large numbers for employment in industry, and
in some sections the labor shortage on farms is quite acute.
Skilled white collar workers are in strong demand, partly
as replacements for people called to arms and partly to do
the expanded clerical and stenographic work arising from
the war program. Retail distributors are losing younger
employees and are replacing them with older people, many
of whom are new workers. The following figures, com­
piled for the most part by the Bureau of Labor Statistics,
show the trends of employment and payrolls in Fifth dis­
trict industries from September to October:
STATES

MUTUAL SAVINGS BANK DEPOSITS
9 Baltimore Banks
Oct. 31, 1942 Sept. 30, 1942
$228,250,410
$225,881,379
Total deposits ..................

CITIES
Dist. of Col.
$ 451,303
$ 406,390 $ 412,871
Washington ...
Maryland
648,051
692,826
614,763
Baltimore .......
11,469
10.357
11,374
Cumberland . . .
10,090*
10,385*
Frederick .......
15,190
14,756
Hagerstown . . . .
lV 6 i
,6
North Carolina
19,697
20,751
20,835
Asheville .......
141,631
141,707
Charlotte .......
107,293
97,744
89,360
Durham ...........
75,534
27,868
31,035
28,916
Greensboro . . . .
21,461*
Kinston ...........
24,355*
57,072
42,008
Raleigh.............
60,82i
32,869
Wilmington
37,727
22,351
37,790*
Wilson .............
33,763*
76,904
64,334
Winston-Salem
66,553
South Carolina
37,294
35,511
Charleston . . . .
31,608
46,752
54,220
Columbia .......
41,103
34,628
Greenville .......
38,367
35,584
Spartanburg . . .
23,854
19,681
19,407
Virginia
12,086*
11,699*
Charlottesville .
42,662
D anville...........
24.358
29,888
18,863
Lynchburg . . . .
18,706
18,884
66,586
19,526
14,736
Newport News.
113,866
105,376
Norfolk ...........
85,815
12,952
10,799
Portsmouth----8,013
319,874
301,771
249,109
Richmond .......
37,738
32,665
37,692
Roanoke .........
West Virginia
20,219*
18,203*
Bluefield .........
69,356
66,592
70,114
Charleston.......
13,703*
Clarksburg ----12,770*
27,234
24,600
Huntington----25,551
Parkersburg . .
13,830
13,429
14,056
District Totals..
$2,498,659
?,263,480 $2,116,532
* Figures not included in District Total.

3

Number of Failures
Total Liabilities
District U. S.
District
U. S.
22
673
$ 515,000 $ 7,181,000
17
556
315,000
5,473,000
28
809
180,000
7,333,000
262
8,314
88,568,000
4,067,000
334 10,108
3,655,000
113,438,000

Building for civilian use has almost ceased under prior­
ity regulations made in the interest of conserving materials
and labor for use in war work, and for the most part city
building permits now represent necessary repair jobs to
preserve existing structures. In the Fifth district in Oc­
tober, building permits issued in 29 leading cities totaled
only $2,707,847 for all classes of work except Government
projects in Washington. This was the smallest total figure
reported for any month in many years, and compared with
permits totaling $11,494,803 issued in October last year.
The total of permits issued in the 29 cities in the first 10
months of 1942 amounted to $73,212,839, compared with
$123,256,356 in the corresponding period last year. In
October 1942, Washington led in permits with $1,566,663

MONTHLY REVIEW

4

(Federal building not included) and Baltimore was second
with $309,340. Durham with $253,722 was third, WinstonSalem with $117,081 was fourth, and Portsmouth with
$106,496 was fifth.
In spite of the great decline in city building permits,
which reflect private work for the most part, a large
volume of construction connected with the war effort is
going on, and contracts awarded in the Fifth district in
October totaled $81,713,000, in comparison with contract
awards totaling $78,946,000 in September this year and
$83,065,000 in October last year. A large volume of hous­
ing contracts was let in October, chiefly in regions in which
a great deal of defense work has drawn thousands of ad­
ditional workers to communities which could not absorb
them. These housing projects are publicly financed, and
are in some cases temporary developments designed to
furnish quarters for defense workers for the duration
only.
Figures on contract awards by states for September
1942, which were not available when the October 30
Review went to press, were reported by the F. W . Dodge
Corporation as follows:
CONSTRUCTION CONTRACTS AWARDED
STATES
Sept. 1942
Sept. 1941 % Change
Maryland ...............................
$26,108,000
$15,797,000
+ 65
Dist. of Col............................
—5,963,000
6,755,000
Virginia .................................
34,144,000
32,596,000
+ 5
West Virginia ......................
3,220,000
2,171,000
+ 48
11,512,000
11,119,000
+ 4
North Carolina ....................
South Carolina ................................... 9,925,000_______9,300,000______+ 7
$78,946,000
$77,738,000______ + 2
Fifth District ....................
Note: The District of Columbia figure is shown negatively, due to revision
of figures for an earlier month.

COTTON TEXTILES

Cotton textile mills in the Fifth district continued to
operate in October above the National level, and with 50
per cent of spindles in place accounted for 53 per cent of
actual spindle hours of operation. With 11,865,816 spindles
in place, Fifth district mills operated 6,049,670,682 spindle
hours in October, an average of 510 hours per spindle
against the National average of 478 hours. South Carolina
with 529 hours and North Carolina with 498 hours both
bettered the National figure, but Virginia with 455 hours
fell behind. North and South Carolina are first and sec­
ond, respectively, in spindles in place, but Virginia ranks
seventh. Labor in textile mills is beginning to present a
serious problem, due to inductions of workers into the
armed forces, and to shifts of personnel to industries
paying higher wages. The relationship between textile
prices and costs appear to have become fairly well bal­
anced, and mill margins for 17 constructions of medium
and coarse fabrics averaged 21.85 cents in October, com­
pared with 22.03 cents in September and 20.45 cents in
October last year.
COTTON CONSUMPTION—FIFTH DISTRICT
In Bales
MONTHS No. Carolina So. Carolina
Virginia District
October
1942................
244,472187,302
22,347
454,121
September 1942................
243,817192,449
22,229
458,495
October
1941.................
244,667177,431
20,630
442,728
10 Months 1942................
2,428,020
1,872,393
222,361 4,522,774
10 Months 1941................
2,187,602
1,641,611
186,684 4,015,897
% Inc. in 1942................
+11
+ 14
.+ 19
+13




RAYON YARN

Rayon filament yarn deliveries to domestic consumers
totaled 40,600,000 pounds in October, compared with
38.400.000 pounds delivered in September and 41,700,000
pounds ‘ in October 1941, according to data released in
Rayon Organon for November. Shipments slightly ex­
ceeded production, and stocks on hand at mills declined
from 8,000,000 pounds on September 30 to 7,400,000
pounds on October 31. Rayon staple fiber deliveries
totaled 12,600,000 pounds in October, compared with
12.400.000 pounds in September this year and 13,200,000
pounds in October last year. Staple fiber stocks also de­
clined during October, from 4,300,000 pounds to 4,100,000
pounds.
During the third quarter of 1942, the rayon industry
set a new quarterly record for production in both the fila­
ment yarn and staple fiber divisions. Filament yarn pro­
duction during the quarter totaled 119,600,000 pounds, and
staple fiber production totaled 39,800,000 pounds.
In the latter part of October, the Government approved
a plan offered by the rayon industry to convert certain
viscose rayon producing facilities to the manufacture of
high tenacity rayon yarn for military purposes, chiefly for
use in tires. The quantity of high tenacity yarns to be fur­
nished approximates 50,000,000 pounds on an annual
basis, and five viscose producing companies are included
in the program. The program is expected to produce ap­
proximately 100,000,000 pounds annually when the con­
version is completed.
One of the large rayon producing companies recently
announced a new contribution to the war effort in the form
of a special rayon tow for mechanical packing in hydraulic
presses, pumps, etc. In the past mechanical packing came
chiefly from braided rope made of imported flax, but
shipping difficulties have greatly reduced the supply of
flax and the development of a substitute material is im­
portant. Performance reports indicate that the new rayon
tow is equally as good as flax tow, and has one or two
definite advantages over the older material.
COTTON STATISTICS

Spot cotton prices on ten Southern markets advanced
moderately between the middle of October and the middle
of November. From an average price of 18.95 cents on
October 16, the average price for middling grade, upland
cotton rose to 19.73 cents per pound on November 6, but
then turned down again to 19.27 cents on November 20,
the latest date for which official figures are available.
The fourth forecast of 1942 cotton production, issued on
November 8 by the Department of Agriculture, lowered
the estimate from 13,818,000 bales at the first of October
to 13,329,000 bales on the first of November, but the per­
spective yield is still much higher than 10,744,000 bales
raised in 1941. In the Fifth Reserve District, South Caro­
lina’s perspective yield was reduced from 757,000 bales
last month to 735,000 bales, Virginia’s yield was lowered
from 35,000 bales to 33,000 bales, and North Carolina’s
prospects declined from 750,000 to 705,000 bales.

MONTHLY REVIEW
COTTON CONSUMPTION AND ON HAND—BALES
Oct.
1942
Fifth district states:
Cotton consumed .................
Cotton growing states:
Cotton consumed ................
Cotton on hand Oct. 31 in
Consuming establishments
Storage & compresses . . .
United States:
Cotton consumed ..................
Cotton on hand Oct. 31 in
Consuming establishments.
Storage & compresses .......
Spindles active ..........................

RETAIL AND WHOLESALE TRADE

Oct.
Aug. 1 to Oct. 31
1941 This Year Last Year

454,121

442,728

1,351,057

1,244,836

838,039

807,996 2,477,572 2,296,158

1,744,613 1,648,718
12,372,847 12,937,595
972,490

955,657 2,863,728 2,705,663

2,117,902 1,993,595
12,674,414 13,318,190
23,012,046 23,054,236

Note: 1941 collection percentages in parentheses.

TOBACCO MANUFACTURING

Cigarette production continues to set new records, and
in September the number manufactured reached a new
high for the fifth successive month. The output of cigars
in October also exceeded production in October 1941, but
the amount of snuff and chewing and smoking tobacco
manufactured declined last month from the corresponding
month of the preceding year. Production figures released
by the Bureau of Internal Revenue on November 21 are
as follows:
Oct. 1942
Smoking & chewing
tobacco, pounds .................
Cigarettes, number .............
Cigars, number ....................
Snuff, pounds ......................

Sept. 1942

Oct. 1941

27,393,220
24,238,452
23,075,492,090 21,798,447,820
633,349,780
519,975,860
3,563,073
3,090,569

28,485,698
19,632,466,010
621,989,890
3,693,671

AUCTION TOBACCO MARKETING

Tobacco markets closed in South Carolina during Oc­
tober, and North Carolina markets in the Carolina Border
Belt also completed sales for the 1942 season, but sales
on other North Carolina and Virginia markets continued
large. Average prices advanced about 12 per cent in
October, and were 26 per cent above October 1941 prices.
Through October, Fifth district tobacco sales from the
1942 crop brought growers $263,934,000, an increase of
70 per cent over $155,005,000 received prior to November
1 last year. All sales so far this year have been of fluecured tobacco. Sales in October, both this year and last,
were as follows in the Fifth district:
STATES
South Carolina.........
North Carolina.........
Virginia ....................
District Total
Season through .




Producers’ Tobacco
October 1942
441,981
182,132,504
56,396,016
238,970,501
671,169,378

Sales, Lbs.
October 1941
225,640
121,737,343
40,274,946
162,237,929
517,506,012

DEPARTMENT STORE TRADE
Richmond
Baltimore Washington
Other Cities
District
Change in October 1942 sales in comparison with sales in October 1941
+ 34
+21
+25
+30
+26
Change in Jan.-Oct. 1942 sales in comparison with sales in Jan.-Oct. 1941
+ 17
+19
+ 21
+16
+19
Change in stocks on Oct. 31, 1942 compared to stocks on Oct. 31, 1941
+ 19
+21
+ 19
+ 7
+19
Change in outstanding orders on Oct. 31, 1942 compared with Oct. 31, 1941
+ 36
+ 2
+13
+ 23
+13
Change in total receivables on Oct. 31, 1942 compared with Oct. 31, 19-41
—26
—34
—29
—32
— 31
Percentage of current receivables as of Oct. 1, 1942 collected in October
57 (37)
59 (35)
59 (44)
61 (40)
59 (41)
Percentage of instalment receivables as of Oct. 1, 1942 collected in October
30 (15)
33 (21)
22 (16)
26 (15)
25 (17)

Price per Cwt.
1942
1941
$36.64
$19.38
42.27
33.53
41.49
33.37
42.19
33.47
39.32
29.95

State figures on sales, October 1942 compared with
October 1941, and total sales in 10 months this year com­
pared with total sales in the like 1941 period, show the
following percentage changes: Maryland + 2 2 & + 2 0 ;
Virginia + 3 5 & + 1 9 ; West Virginia + 1 0 & + 1 ;
North Carolina + 2 6 & + 6 ; South Carolina + 5 1 &
+27.
RETAIL FURNITURE SALES
Percentage Changes in October 1942 Sales
STATES
Compared with Compared with
Oct. 1941
Sept. 1942
Maryland (8)* .........
— 11
+ 6
Dist. of Col. (8)* ..
5
+ 6
Virginia (34)* .........
+ 12
+ 18
West Virginia (14)*
— 20
+ 13
North Carolina (22)*
+ 23
+ 11
South Carolina (19)*
+ 13
+ 9
District (105)* . . . .
+ 9
+ 2
Individual Cities
Baltimore ( 8 ) * .........
— 11
+ 6
Washington ( 8 ) * ___
—
5
+ 6
Danville (3)* ...........
45
+ 18
+
Lynchburg (3)* .......
+ 16
+ 21
Richmond ( 7 ) * .........
+ 12
+ 2
Charleston (3)* .......
—25
+ 24
Huntington (3)* . . . .
+ 31
+ 9
Charlotte (4)* .........
— 6
+ 13
Columbia (4)* .........
— 15
+ 3
Greenville ( 3 ) * .........
+ 18
+ 5
Greenwood (3)* . . . .
— 21
+ 21
* Number of reporting stores.
WHOLESALE TRADE, 215 FIRMS
Net Sales
Stocks
Ratio Oct.
October 1942
Oct. 31, 1942
collections
compared with
compared with
to accounts
LINES
Oct.
Sept.
Oct. 31 Sept. 30 outstanding
1941
1942
1941
1942
Oct. 1
Auto supplies (12) . . .
— 14
—23
+ 3
89
+ 3
Shoes (4) ..................
+ 13
-11
—25
+ 3
75
Drugs & sundries (8).
+ 13
+ 8
108
Dry goods (7 )...............
+ 25
— *3
— 13
+ 6
65
Electrical goods (16) .
— 33
- 6 • — 32
— 5
55
Groceries (61) ...........
+ 15
— 15
b 2
— 2
129
Hardware (14) .........
— 9
- 7
— 39
— 12
85
Industrial supplies (8).
- 5
+ 8
—24
— 8
77
Paper & products (10)
—22
- 2
+ 28
0
82
Tobacco & products (6)
+ 47
-15
Miscellaneous (69) . . . .
— 6
- 8
— 12
— *4
90
District Average (215)
0
- 3
-1 7
— 9
82
Source: Department of Commerce.

(Compiled November 21, 1942)

MONTHLY REVIEW

6

SUMMARY OF NATIONAL BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
INDUSTRIAL

PRODUCTION

Industrial output expanded further in October and the first half of Novem­
ber. Retail food prices continued to advance while prices of other commodities
generally showed little change. Distribution of commodities to consumers was
maintained in large volume.
PRODUCTION

Federal Reserve monthly index of physical vol­
ume of production, adjusted for seasonal variation,
1935-1939 average = 100. Latest figures shown
are for October 1942.
DEPARTMENT STORE SALES AND

STOCKS

Industrial production continued to .advance in October and the Board’s sea­
sonally adjusted index rose 3 points to 188 per cent of the 1935-1939 average.
Gains in armament production accounted for most of the increase, and it is
estimated that currently well over 50 per cent of total industrial output is for
war purposes. In lines producing durable manufactures, approximately 80 per
cent of output now consists of products essential to the war effort.
Steel output reached a new high level in October as production expanded to
100 per cent of rated capacity. In the first half of November output declined
slightly to around 99 per cent, reflecting some shutdowns for furnace repairs,
according to trade reports. Activity in industries producing nondurable goods
declined less than seasonally in October. Production of foods, especially canning,
was unusually large for this time of year and output of textiles continued at a
high level. Mineral production, which usually increases in October, declined
slightly this year owing chiefly to a decrease in coal production which had been
maintained in large volume throughout the summer.
Value of construction contracts awarded in October increased somewhat
over that of September, according to reports of the F. W. Dodge Corporation.
Publicly-financed projects continued to account for over 90 per cent of total
awards.
The Department of Commerce estimates that, in the third quarter of 1942,
expenditures for new construction amounted to 4.2 billion dollars, of which 3.5
billion came from public funds. For the first nine months of this year the cor­
responding figures were 10.2 and 7.7 billion dollars. Construction of military and
naval facilities and of industrial buildings accounted for the bulk of the expen­
ditures.
DISTRIBUTION

1936

1937

1938

1939

1940

1941

1942

Federal Reserve monthly indexes of value of
sales and stocks, adjusted for seasonal variation,
1923-25 average = 100. Latest figures shown are
for October 1942.
COST OF LIVING

Department store sales increased in October and the Board’s seasonally ad­
justed index rose to 129 per cent of the 1923-1925 average as compared with 123
in September and 130 in August. In the first half of November sales increased
further and were 17 per cent larger than in the corresponding period last year,
reflecting in part price advances of about 10 per cent.
Railroad shipments of freight were maintained in large volume during
October and declined seasonally in the first half of November.
COMMODITY PRICES

Retail food prices continued to advance sharply from the middle of Sep­
tember to the middle of October and further increases are indicated in Novem­
ber. Prices of most other goods and services increased slightly in this period.
In the early part of October maximum price controls were established for a
number of additional foods. Maximum price levels for many other food products
have been raised, however, and the Office of Price Administration reports on the
basis of a recent survey that in numerous instances sellers are not complying
fully with the regulations now in effect.
BANK CREDIT

1936

1937

1938

1939

1940

194!

194?

Bureau o f Labor Statistics* indexes, 1935-89
average = 100. Fifteenth of month figures. Last
month in each calendar quarter through Sept. 1940,
monthly thereafter. Latest figures shown are for
October 1942.
EXCESS RESERVES OF MEMBER BANKS

Excess reserves of member banks were 2.5 billion dollars in the middle of
November, a somewhat higher level than generally prevailed in the preceding
four months. At New York City banks excess reserves amounted to about 500
million dollars.
Additions to member bank reserve balances during the four weeks ending
November 18 were the net result of an increase of 500 million dollars in Reserve
Bank holdings of Government obligations, which approximately covered the
continued heavy currency drain, and a decrease of 200 million in Treasury
balances at the Reserve Banks.
Holdings of Government securities by reporting banks in 101 cities increased
by 1.9 billion dollars to 24 billion during the four weeks ending November 11.
Almost half of the increase occurred at New York City banks. There were
substantial increases in holdings of Treasury notes, bonds, and certificates, and a
smaller increase in Treasury bills, while holdings of guaranteed obligations
declined. These changes reflected new offerings and retirements by the Treasury
during the period.
Commercial and industrial loans at reporting member banks in leading cities
increased somewhat during the first two weeks of November. Brokers’ loans in
New York City increased around Government financing dates, but subsequently
declined.
UNITED STATES GOVERNMENT SECURITY PRICES

1936

1937

1938

1939

1940

1941

1942

Wednesday figures, partly estimated.
figures shown are for Nov. 11, 1942.




Latest

Prices of United States Government securities were steady in the four weeks
ending November 18. Long-term taxable bonds yielded 2.32 per cent, and 3month Treasury bills sold at a yield of 0.37 per cent.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102