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MONTHLY REVIEW of Financial and Business Conditions wmm ‘ ✓ \ If R ich m on d * - o F ifth Reserve va. Federal ...... ' 4 D is t r ic t Federal Reserve Bank, Richmond 13, Va.______________ __________________ November 30, 1946 Business Conditions TDRICE controls were removed on most commodities remaining under control on November 9th and the business operators in the Fifth District, like those in the nation, are still feeling their way cautiously in the tran sition period to free market prices. Farm and food prices have shown the greatest rise nationally, but cotton prices are not far from where they were at the end of June while tobacco prices, though moderately above last year, have been trending lower' These are the two important crops in the Fifth District. Although overall textile prices had risen 20 percent be tween the end of June and November 9th, there has been a strong effort made by mails and selling agents to hold the prices of cotton goods at the last ceiling levels and with cotton prices showing some semblance of stabilization just above the 30 cent level it is possible that the line might be held since the late ceiling prices were based on cotton around 36 cents a pound. Cotton goods prices are more than 60 percent higher than in 1926 and while the general price level may hold for some years well above the 1926 level, it is problematical whether cotton goods can remain at present levels for an equal period of time. The price structure even after the recent sharp rise in selected prices is still under upward pressure, and in many quarters, it is badly out of balance. Announcements of rises in manufactured products prices are forthcoming almost daily, but even so the relative level of manufactured products prices is low in comparison with the price level in general. Rises in prices of those products importantly produced in the Fifth District include rayon and manu factures, underwear and hosiery, but these rises may be expected to stimulate production of these goods. Lumber prices are well above late ceilings, but reports indicate they are lower than previous black market levels. Lumber production, furthermore, is rising quite rapidly and this may very well put a damper on further increases. The price level is an important consideration in ap praising the outlook for the business level of this District. While cotton goods and lumber prices seem high by com parison and in relation to other manufactured products, BUSINESS IN DEXES—FIFTH FEDERAL RESERVE DISTRICT Average Daily 1935-39=100 Seasonally Adjusted Bank Debits ............................................................. ...................... Bituminous Coal Production*................................ ..................... Building Contracts Awarded.................................. ...................... Building Permits Issued.......................................... ...................... Cigarette Production................................................ ..................... Cotton Consumption ................................................ ..................... Department Store Sales............................................ ..................... Department Store Stocks...................... .... :.......... . .................... Furniture Sales— Retail .......................................... ..................... Life Insurance Sales................................................ .................... Wholesale Trade: Automotive Supplies** ........................................ .................. Drugs ..................................................................... ................... Dry Goods............................................................. ................... Electrical Goods**................................................ .................. Groceries ............................................................... ................. Hardware ............................................................. ................... Industrial Supplies** .......................................... ................ Paper and Its Products**.................................... ................... Tobacco and Its Products**................................ ...................... *Not seasonally adjusted **1938-41 = 100 Oct. 1946 278 143 259 192 255 161 285 274 266 263 Sept. 1946 303 153 261 211 234 154 298 262 267 265 304 284 230 58 285 114 286 174 124 286 282 221 54 267 116 275 181 111 Aug. 1946______ 298 151r 348r 175 229 154 306r 259 212 272 251 260 193 43 249 122 253 126 107 Oct. 1945 222 90 206 160 222 134 251r 196 193 178 182 248 165 39 215 85 139 120 98 % Change Oct. 1946 from Sept. 46 Oct. 45 _ 8 . + 25 — 7 + 59 — 1 + 26 — 9 -f 20 9 + 15 + 5 + 20 + — 4 -f 14 5 + 40 ■+ 0 + 38 — 1 -f 48 6 1 4 7 7 2 4 + — 4 + 12 + + + + + 4- 67 + 15 + 39 + 49 + 33 + 34 + 106 + 45 + 27 2 MONTHLY REVIEW they have not as yet shown indication of reducing the level of demand for these products. There have, how ever, been numerous indications of an unwillingness on the part of many consumers to continue purchasing poor quality merchandise. Thus far in 1946 current business indicators of the District have continued to mirror a rising trend, though it must be pointed out that sales of Department stores have risen at a rate that certainly cannot be sustained much longer. This does not mean, however, that trade levels must necessarily fall but that their rate of expansion may tend to flatten out. Department store sales in this District in both September and October failed to rise by normal seasonal proportions and the adjusted index fell moderately from the summer peak. In some lines of wholesale trade such as hardware, automotive, industrial and electrical supplies, the pipe lines are far from filled, and at the same time little has been done in the way of filling the existing consumer demand for these products. Textiles: The output o f cotton textiles .in the Fifth District, as measured by cotton consumption, is still in a rising trend; the October level of consumption after seasonal correction was 5 percent above September and 20 percent ahead of October last year. Cotton mills of the District continue to improve their employment levels, and further acquisitions of workers may witness the addi tion of third shifts. In this period of transition from controlled to free prices, there has been considerable hesitancy on the part of mills to sell goods for delivery beyond the first quarter of next year, but some mills are selling through June at the late ceiling prices and there are some indications that such selling might broaden if some of the tension can be relieved in the spot market for goods and yarn. Mill stocks o f finished goods are no more than one to two weeks supply. Coal: The bituminous coal outlook is not good as of the 23rd of November, and while it should not necessarily be expected that a work stoppage would last for any con siderable period of time, a shutdown of a few weeks will cause considerable slackening in industrial activity through out the country. The cotton textile industry of this District, however, would not be badly affected by a coal strike unless it was of long duration, since much of the industry derives it’s power from hydro-electric installa tions. Transportation, however, would be quickly af fected by the coal strike and reduce business activity of the District all along the line, and particularly hamper the movement of goods for the Christmas trade. Construction: It is noted in some quarters that can cellations of some construction contracts for industrial buildings have taken place. This could happen in con siderable volume without materially affecting the level of on site activity since contract awards were large and the near prospect of their being placed under construction rather small. Furthermore, the supply of building mate rials is still woefully short, and the need for industrial capacity pressing; while at the same time priority is given to residential building. It would be very surprising, therefore, if contract cancellation would be large enough to reduce on site activity in the construction industry in the immediate future. Building permits in the Fifth District continue to hold at a high level, while the contract awards have declined notably from the spring peak. Some of this decrease in contract awards is no doubt due to the inability to secure permission to build and to the avoid ance of costs arising from delays in completion of struc tures. Cigarettes: Production of cigarettes in the third quar ter of 1946 was 3 percent below the second quarter output but 14 percent higher than in the third quarter of 1945. Since July our seasonally adjusted index of cigarette out put has been rising, but the three months average JulySeptember is below the level of the previous three months. Production in October, however, established a new high record, and our seasonally adjusted index returned to the peak reached in May. Furniture: The large potential requirements for house hold furniture are finding reflection in a rising level of shipments of respondents to the Southern Furniture Manu facturers’ Association. Although orders booked in sub sequent months have not equaled the June peak, unfilled orders are still at an unusually high level and point to continued high level of furniture production. Lumber: Rising requirements for lumber together with a low level of mill and yard stocks has given impetus to the production of lumber. The mills of the Fifth District have been more successful in expanding their output than have the mills in the nation as a whole. In the first eight months of 1946, Fifth District miills pro duced 3,619 million board feet of lumber which amount exceeded the output in the same months last year by 36 percent. This compares with a gain of 12 percent for the nation. The Fifth District accounted for 16.2 per cent of the Nation’s output in the first eight months of 1946 compared with 13.2 percent in a like period of 1945. Taken all together the factors in the business outlook, baring a prolonged coal strike, appear to point toward some further expansion, although the sharp rise in com modity prices is bound to have many disturbing effects and may lead sooner or later to some recession in business. MONTHLY REVIEW 3 American Cotton Exports1 Exports of American cotton are expected to total 3.0 million running bales this season, the year beginning August L Last season exports totaled 3.5 million bales. That level was the highest since 1939, but otherwise the lowest since the early 1880’s. In examining the export prospects for American cotton in the years ahead it is helpful to review the history o f our exports; also, to note some o f the forces that have affected exports of cotton in years past. It is an oft-told story how cotton used to be the leading export product of the United States, and how it was largely responsible for the “ favorable” balance of pay ments which serviced our foreign obligations during the years before World War I. In 1790, three years before Eli Whitney invented the cotton gin, only 379 bales (equivalent 500 lbs. gross weight) of cotton were ex ported. The first year in which exports exceeded 100,000 bales was 1806. Twenty years later they first exceeded 500,000 bales, and in 1837 they pushed above the 1 million bale mark. Exports first exceeded 2 million bales in 1848 and in 1859 they reached the pre-Civil War High of 3.5 mil lion bales. This level was not again attained until 1879. Ex ports exceeded 4 million bales in both 1880 and 1882, but beginning in 1885 and running through 1937-38, a period of 53 years, exports held above 4 million bales in all years and in both 1911 and 1926 totaled nearly 11 million bales. American cotton exports ranged between 62 and 72 per cent of production every year from 1869 through 1913, a period of 45 years. During the 20 years 1914-33 in clusive, exports equalled or exceeded 62 per cent in only 3 years and fell below 50 per cent on 5 occasions. In the 12 years since 1933, exports were between 50 per cent and 60 per cent in 3 seasons, between 25 per cent and 50 per cent in 4 seasons and under 25 per cent in 5 seasons. Against the background of such a high level o f exports, it is not surprising that the falling-off of exports in 193839 to the lowest level in more than half a century caused FiG. I COTTON* EXPORTS FROM UNITED STATES AS A PERCENTAGE OF WORLD TOTAL EXPORTS, 1920-1945 considerable alarm in cotton circles. Looking backward, however, it is evident that the export position of American cotton was weakening; in fact, it had been weakening for quite some time. During the 5 years 1909-13 American cotton comprised 69 per cent of the cotton entering inter national trade. This was higher than the percentage in any post World War I year. From Figure 1 it is seen that the U. S. accounted for only 48 per cent of the world exports of raw cotton in 1922. This was mainly because of the restricted U. S. production which was occasioned largely by boll weevil damage. However, with this ex ception, exports of cotton from the U. S. accounted for from 52 to 68 per cent of the world total from 1920 through 1933. From 1934 through 1945, the latest year for which complete data are available, American exports comprised from 17 to 49 per cent of the world total, the higher level having occurred in 1939 when the exportation of American cotton was first aided with an export subsidy program. Before the Civil War, foreign spinners were so com pletely dependent on American cotton that the falling-off of cotton exports during the war wrought real hardship in many areas. Under the stimulus of exceedingly high prices foreign production expanded very materially. Even after U. S. cotton again re-entered world trade these new pro ducers found cotton a profitable enterprise and were re luctant to give up all of their increased production. Importing countries favored expanded production out side the U. S. as a means o f avoiding repetition of the catastrophe which resulted from the cutting-off of U. S. exports. For many years the efforts of foreign spinning interests to promote cotton production outside the U. S. and thus lessen their dependence on any one source met with only moderate success. Following World War I, however, these efforts coupled with the fostering of cotton production by the Governments of many agricultural coun tries resulted in a marked expansion of foreign cotton production. One reason their efforts met with such sue cess was the abnormally high price of American cotton which in turn was attributable to the reduction in the size of the American crop caused by the boll weevil. In some foreign countries this expansion in cotton pro duction was accompanied by an increase in their domestic cotton textile production. Except in so far as total cotton textile consumption increased in these countries, their increased domestic textile production either reduced the export outlets for textiles of countries such as the U. K. or increased the quantity of cotton textiles avail able for export in competition with textiles from raw cotton importing countries. This type of development was one of the factors which contributed to a decline in cotton imports into the U. K. from an average of 4.2 million bales during the 5 years 1909-13 to an average of 2.8 million bales in 1935-39. This is further illustrated by Figure 2 which shows the exports of cotton to foreign countries as a percentage of total cotton consumption in foreign countries. This long time down trend in the proportionate importance of inter national trade in raw cotton reflects what is often called the shift of cotton mills to the fields. iN o attem pt is m ade in this article to appraise the need fo r a sizeable ex port outlet fo r A m erican cotton. F o r brevity’ s sake it m erely has been assumed that a sizeable export trade in cotton is desirable. 4 MONTHLY REVIEW FIG. 2 COTTON« EXPORTS TO FOREIGN COUNTRIES AS A PERCENTAGE OF FOREIGN CONSUMPTION, 1920-1945 YEAR BEGINNING AUGUST FEDERAL RESERVE BANK OF RICHMOM The severe depression in the early 1930's and factors associated therewith had very definite repercussions on the competitive position of American cotton abroad. In Brazil changes in the prices of cotton and coffee were such as to make the expansion of cotton production in Southern Brazil relatively quite profitable. In the U. S., tariff rates had been revised upward. This, coupled with our strong creditor position since World War I made it harder for our former customers to obtain desired amounts of dollar exchange. Consequently, a larger and larger proportion of available foreign exchange was used for the purchase of goods which could not be easily obtained elsewhere, and the more readily available articles such as cotton were obtained from other countries. Germany, Italy, and Japan were three countries which had a strong desire to become more self sufficient economi cally. Since they were unable to produce enough cotton to meet their needs for textile fibers, they actively encour aged the synthetic fiber industries in their countries. Most of this increased synthetic fiber production was in the form of rayon staple fiber. In these three countries total rayon production increased from the equivalent of about 16,000 bales of cotton in 1920 to the equivalent of nearly 3.0 million bales in 1938. During the same period rayon production in other foreign countries increased from the equivalent o f 38,000 bales to the equivalent of 814,000 bales. Most of these increases occurred in the 1930’s. O f course, not all of this rayon was consumed at the ex pense of cotton, but large amounts o f it did take the place of cotton. As a further means of bolstering their domestic econo mies, some foreign countries resorted to direct controls over the use of foreign exchange. Also, some countries made it a general practice to resort to bilateral trading. In most, if not all, instances this worked to the disadvan tage of American cotton exports. For example, during the 5-year period 1934-38, Germany imported 1,253,000 bales of cotton as against 1,743,000 bales during the pre ceding 5 years. Between these periods, German imports of American cotton dropped from an average of 1,317,000 bales to an average of 411,000 bales while imports of Brazilian increased from 6,000 bales to 248,000 bales, and the combined imports of cotton into Germany from all other foreign countries increased from 369,000 bales to 466,000 bales. It has already been noted that the U. S. entered the inter-war period in a strong creditor position as contrasted with its traditional debtor position before the war. The full effect of this changed status was not brought home immediately to American cotton because of the extensive foreign credits which were granted during the middle and latter 1920’s. With the coming of the crash in 1929, cotton prices dropped very sharply despite the efforts of the Federal Farm Board to support the market. During the early 1930’s, cotton interests were prone to blame their plight on the general business recession, and thus to minimize or completely ignore the elements of weakness which had been developing for some years in the export position of American cotton. Commencing in 1933, the United States adopted a policy of production control. As a means of furthering its policy for price supports which was first adopted in 1929 Congress also adopted a policy of price supporting loans to farmers. This resulted in a price that made it advantageous for farmers in this country to increase pro duction on their reduced acreage by means of increasing yields. It also helped to bring about a world price of cotton which encouraged farmers in many foreign coun tries to expand production. Although this was by no means the sole factor affecting cotton production in the various countries, Table 1 reveals the changes which occurred. COTTON: P R O D U C TIO N IN SPEC IFIED C O U N TRIE S, A V E R A G E S , 1928-32 A N D 1936-40 ______ 1936-40 average______ AREA 1928-32 A ctual P ercentage increase ___________________________________ average___________________ over 1928-32 avg. 1,000 W orld U nited States Foreign countries L arge India Russia China Brazil E gypt Medium P eru M exico A rgen tina U ganda A n glo-E gy p tia n Chosen Turkey Iran B elgian Congo Small Sudan 1,000 bales bales P e r cent 26,448 14,667 11,781 10,173 4,118 1,530 2,521 504 1,500 1,261 255 203 145 171 143 135 85 77 47 347 31,763 13,534 18,229 15,084 4,686 3,580 2,793 2,106 1,919 2,348 384 332 260 289 257 180 272 188 184 797 20 —8 55 48 14 134 11 318 28 86 51 64 79 69 80 33 220 144 291 130 In 1938-39 U. S. exports of cotton declined to 3.3 million bales, the lowest in over 50 years. Not only was such a low level of exports alarming, but the domestic carry-over of American cotton which had increased from 4.4 million bales on August 1, 1937 to 11.4 million a year later rose even further to the all-time high of nearly 13.0 million bales on August 1, 1939. Four days before the opening o f the new season the Government announced its first export subsidy on raw cotton. (This program is not to be confused with the 1941 and 1944 export subsidy programs which are referred to later in this article). The initial subsidy rate of 1.50 cents per lb. which was in effect from July 27 to December 5, 1939 was made appli MONTHLY REVIEW cable to the export of 4.8 million bales. The rate was reduced several times during December and the subsidy on raw cotton was discontinued on January 30, 1940. Under the program a total of 5,787,559 bales of cotton were exported. Most of this cotton was actually exported in the 1939-40 season. Also during 1939 some 600,000 bales of Government owned cotton were exchanged for rubber in a barter arrangement between the United States and the United Kingdom. During 1939-40 cotton ex ports totaled 6.5 million bales. In 1941 the United States changed its loan policy by increasing the Government loan level on cotton to 85 per cent of parity. This raised the price of American cotton to such an extent that at one time Brazilian cotton was being delivered to Canadian mills at from 3 to 4 cents below the delivered price of American cotton. This re sulted in Canadian mills, which up to 1938 had received little if any cotton from Brazil, switching so heavily that during the first half of the 1941-42 season Brazilian cotton comprised 72 per cent of all cotton consumed by Canadian mills. As a means of enabling American cotton to regain its traditionally dominant position in the Canadian market and to strengthen its export position generally, the U. S. inaugurated two programs. The first was to sell Govern ment-owned cotton for export at 13*4 cents per pound which was then several cents below the domestic market price. The other program was a subsidy on exports of cotton to Canada. The export subsidy rate was raised from time to time but ranged between 2 and 3 cents per pound. The subsidy program which commenced Sep tember 29, 1941 ran through March 13 following, by which time the world ocean shipping situation had become so tight as to render impossible the export of Brazilian cotton to Canada. Under this subsidy program 233,000 bales were exported. The development of Lend-Lease in 1941 was even more important, so far as the export of American cotton during the war years was concerned, than these other two Gov ernment export programs. The United Kingdom was the principal recipient of cotton under Lend-Lease and such cotton accounted for a sizeable proportion of our exports during the time it was in effect. Still another Governmental program that has con tributed very materially to the level of American raw cotton exports is the export subsidy program which is now in effect. This program was provided for in the Surplus Property Act. Under the export program which was announced November 15, 1944, registered sales in an amount totaling 3.8 million bales had been made through November 15, 1946. Under this program the subsidy rate has been 4.00 cents per pound. Several other Government programs assist the ex portation of American cotton although this is not neces sarily one of their major objectives. Among these pro grams were Army shipments of some raw cotton into ex enemy controlled areas as a means of aiding in the resto ration of their respective domestic economies. O f the same general nature are exports of raw cotton by U N R R A and Government credits such as loans by the ExportImport Bank. It is indeed gratifying that exports of cotton from the U. S. totaled 3.5 million bales (excluding War Depart ment shipments) in 1945-46. This was considerably more 5 than in any of the preceding five years when total exports of cotton from the U. S. ranged from 1.1 to 2.0 million bales. It is also gratifying to know that exports are ex pected to total about 3.0 million bales this season. These figures represent a sizeable recovery from the low war time level, and yet they compare unfavorably with the pre-war situation. Unfortunately many o f the factors which caused the export position of American cotton to deteriorate during the interwar period are still operating. American cotton prices are still being supported out of line with the prices of important competitive growths. An increasing pro portion of foreign cotton consumption is occurring in countries that produce their own raw cotton. Although foreign rayon production declined during the later war years, production in some countries is now at record high levels and recovery in rayon production is expected in other countries. The U. S. is in an even “ stronger” creditor position than after World War I, and many countries may need to conserve their dollar exchange for the purchase of those things which cannot so readily be obtained elsewhere as cotton. In summary, therefore, it seems fair to conclude that despite the more favorable current level of cotton exports .than during the war years, the outlook for American cot ton exports over a period of several years is unfavorable. As long as we have a “ surplus” of cotton and are willing to subsidize its exports; as long as we are willing to loan foreign countries the money with which to buy cotton at the subsidized price; as long as we are in a position to encourage use of cotton in Germany and Japan rather than production and use of synthetic fiber, we can post pone feeling the full effect of our domestic cotton price policy. Although some of these factors which are cur rently aiding in the exportation of American cotton may outlive others, each will be seen to be of a political nature and thus subject to the forces which govern politi cal decisions generally. If the U. S. is to retain a size able export trade in raw cotton in the event these meas ures end, it will be necessary for us to resort to some form of multilateral action, such as an international com modity agreement on cotton, or to revert to the time honored methods of offering our cotton for export at competitive world prices while at the same time willing to accept payment in the form of exports from other countries. So much is at stake for American cotton in terests and society generally, that the implications of con templated Government policies should be carefully studied to insure that we not unwittingly surrender our export trade in raw cotton if it be in our national interest for it to be preserved. There are several reasons why it may be impossible to insure a level of cotton exports that will be satisfactory to many in this country. One of these reasons is that the growth of the cotton textile industry in raw cotton pro ducing countries and the growth of synthetic fiber pro duction in both cotton producing and cotton importing countries may reduce the level of international trade in raw cotton. Also, the conditions of trade and the bal ance of payment may be such as to induce importing countries to obtain their cotton elsewhere, and use their dollar exchange for the purchase of goods that cannot so easily be obtained elsewhere. MONTHLY REVIEW 6 Banking The rate of increase of the total loans o f the weekly reporting member banks of the Fifth Federal Reserve District fell off somewhat during the four weeks ended November 13: loans increased to $453 million, a gain of $7 million for the four weeks as compared with net new loans of $21 million during the preceding four-week period. Once again strong gains were made in com mercial, industrial and agricultural loans, which increased by $8 million to $236 million, while real estate loans ac celerated their increase, rising from $67 million to $71 million. Other types of loans either remained constant or showed a decrease, loans to brokers and dealers for purchasing or carrying securities decreasing by one-third from their mid-October figure of $9 million. “ Other loans/’ which include consumer loans to individuals, showed a decrease of $2 million to a figure of $93 million. Investments continued their decline which commenced last March with the initiation o f the Treasury’s redemp tion program, the total falling from $1,586 million on October 16 to $1,533 million on November 13. The de crease was accounted for almost entirely by the smaller holdings of certificates of indebtedness; bills and notes decreased somewhat, while bonds held increased. A com plete record of holdings of Governments for the fourweek period is presented herewith: (A m ou nts in m illions o f dollars) Bills C. o f I. N otes Blonds Total 16 23 30 24 19 19 309 303 298 133 130 129 1,032 1,037 1,037 1,498 1,489 1,483 N ovem ber 6 13 18 21 250 255 126 126 1,044 1,044 1,438 1,446 DATE October The effects of war loan account calls and of redemptions may be noted. The week ended November 6 marked the first week in which heavy war loan account withdrawals were accompanied by an increase in bond holdings; this may possibly be accounted for by the fact that sufficient time elapsed after redemption payments to allow of port folio adjustment within the same week, although during that week there was considerable pressure upon reserves. Total deposits of member banks of the Fifth District— as measured by the average daily total deposits other than interbank— have continued to show month-to-month in creases while those of member banks in the country as a whole have fallen. As is shown in the table, the ratio of Fifth District deposits to those of the United States stood at 4.85 for the last half of October, a total gain of .13 during the past three months. This has been ac counted for by gains in Virginia and North and South Carolina; Maryland, West Virginia, and the District of Columbia have lost deposits at about the same rate as the national decrease. HOLDINGS OF U.S. GOVERNMENT OBLIGATIONS FIFTH DISTRICT MEMBER BANKS MILLIONS OF OOLLARS 7 MONTHLY REVIEW Currency demands and Treasury transactions placed substantial drains upon member bank reserves in this Dis trict during the four weeks ended November 13 although the net change was a slight increase. Commercial and financial transactions provided a sufficient inflow of funds to the District banks to offset the drains, to decrease Fed eral Reserve credit extended locally, and to allow of a small increase in reserves for the period. To some extent these transactions included the withdrawal of interbank balances carried outside this District as well as inflows of funds to cover purchases in commodity markets within the District. A complete statement of factors affecting mem ber bank reserves follow s: (M illions o f dollars) — 6 + 106 — 67 + + ♦Less than $500 thousand. H o l d in g s of U n it e d S tates G overnment O b l ig a t io n s Member banks of the Fifth Federal Reserve District increased their holdings of United States Government obligations by more than seven times from the last semi annual call date prior to the war to the first one following the ending of the war. On June 30, 1941, total holdings amounted to $422 million, increased to $3,558 million on December 31, 1945, and subsequently declined to $3,354 million on June 29, 1946. The chart presents a graphic picture of the increase over the prewar level and the com position of portfolios at semi-annual call dates. Beginning with December 1943 it has been possible to derive average maturity figures of the holding of com mercial banks in this District on the basis of aggregate figures supplied by the Treasury Department from the monthly surveys of ownership of United States Govern ment obligations. These show a constant trend toward the shortening of maturities in bank portfolios during the later years of the war, followed by a reversal for the last two call report dates. The table below gives the average maturities in months for the call dates on which they are available: Dec. 1943 June 1944 Dec. 1944 66.0 63.3 L oans, I nvestm ents M and June 1945 D e p o s it s em ber of (A m ou nts in m illions o f dollars) Change fro m June 29, *46 Sept. 30, *46 T O T A L L O A N S A N D IN V E S T M E N T S 4,525 + 3 Loans (including overd rafts) United States Governm ent direct and guaranteed obligations Obligations o f States and political subdivisions Other bonds, notes, and debentures C orporate stocks (including Federal R eserve Bank stock) Demand deposits o f individuals, p a rt nerships, and corporations 1,051 + 97 3,247 — 108 9 3,267 + + 5 3 + * + 188 Dec. 1945 June 1946 64.6 65.7 F i f t h D is t r ic t Banks The net change in earning assets during the three months was quite small but the aggregate figure conceals substantial changes that occurred in distribution of various types of assets as among banks. Loans greatly acceler ated their rate of increase over the first six months of the year while the overall increase was 10 per cent, reserve city banks showed net new loans equal to 8 per cent of their June 29 total while other banks showed an increase of 12 per cent. Holdings of United States Government securities fell by 5 per cent among reserve city banks and by 1 per cent for other banks, giving an aggregate decrease of 3 per cent. State and municipal obligations increased at a slightly higher rate in the portfolios of non-reserve city banks, while almost the entire gain in corporate obli gations was concentrated in reserve city banks. Demand deposits of individuals, partnerships, and cor porations increased by 6 per cent as compared with an increase of 2 per cent for the United States. Reserve city banks increased their deposit liability in this category by 5 per cent while other banks of the Fifth District showed a 7 per cent gain. average Preliminary compilations of certain items of the con dition reports of Fifth District member banks for Sep d a il y total d e p o s it s * o f Last half o f Sept. $ millions % o f U . S. Maryland Reserve city banks Country banks District o f Columbia Reserve city banks Country banks V irgin ia Reserve city banks Country banks mem ber banks Last half o f October $ millions % o f U . S. 1,061 684 376 .98 .63 .35 1.052 675 377 .98 .63 .35 946 924 22 .87 .85 .02 945 924 22 .88 .86 .02 1,357 339 1,018 1.25 .31 .94 1,357 324 1,033 1.26 .30 .96 W est V irgin ia 567 .52 572 .53 N orth Carolina Reserve city banks Country banks 832 361 471 .77 .33 .44 852 364 488 .79 .34 .45 South Carolina F ifth D istrict 93 125 *Less than $500 thousand. Changes fo r 4 weeks ended N ovem ber 13, 1946 Reserve Bank credit extended locally Comm ercial and financial transactions Treasury transactions Currency transactions Other factors N et change in reserve balances tember 30 are given in the table below, together with changes from the preceding call report date. 428 .40 439 .41 5,191 4.80 5,217 4.85 ♦Excluding interbank demand deposits. Details m ay not add to totals due to rounding. 8 MONTHLY REVIEW F E D E R A L R E S E R V E B A N K OF RICHM OND DE B ITS TO IN D IV ID U A L A CCOU N TS (A ll Figures in Thousands (000 omitted) N ovem ber 13 Change in A m t. from ITE M S 1946 10-16-46 11-14-45 Total Gold R eserves............... ...........$1,160,439 + 117,154 + 42,541 Other Reserves ......................... + 1,518 + 5,946 Total Reserves ..................... . + 118,672 + 48,487 Bills Discounted ....................... + 6,938 — 853 Industrial A dvances ............... 0 — 65 Gov. Securities, T ota l............. — 74,704 + 34,116 Bonds ...................................... — 1,170 — 14,422 N otes ........................................ + 7,210 — 70,448 Certificates ............................ ........... 436,092 — 28,111 — 14,275 Bills .......................................... — 52,633 + 133,261 Total Bills & Securities........... ........... 1,413,204 — 68,766 + 33,198 U ncollected Items ................... — 3,204 + 53,720 Other Assets ............................. ........... 29,534 + 1,152 + 11,046 Total Assets ......................... ........... 2,860,497 + 47,854 + 146,451 Fed. Res. N otes in C ir............ Deposits, Total ......................... Members’ Reserves ............. U. S. Treas. Gen. A c c t ........ Foreign .................................. Other Deposits ..................... D ef. A vailability Items ......... Other Liabilities ..................... Capital A ccoun ts ..................... Total Liabilities ................. .......... $1,788,094 ........... 824,309 742,568 ........... ........... 50,925 ........... 28,035 ........... 2,781 .......... 214,125 + + + + + — + + + + ........... 33,291 ........... 2,860,497 24,039 21,239 419 16,942 4,166 288 2,081 107 388 47,854 + + + + — — + + + + 66,745 19,697 6,347 23,834 5,642 4,842 53,744 82 6,183 146,451 41 R E PO RTIN G M EM BER B A N K S — 5th D ISTRIC T (A ll Figures in Thousands) N ovem ber 13 1946 ITEM S Total Loans ...................................... . .$ 454,064 Bus. & A gri. L o a n s..................... 71,085 Real Estate L oa n s ......................... A ll Other L oa n s............................ Total Security H old in gs................. , , 1,534,019 21,492 U. S. Treasury Bills ..................... U. S. Treasury Certificates .. 255,216 126,125 U. S. Treasury N otes ................... U. S. Gov. Bonds ......................... . . 1,044,484 87 O bligations Gov. G u aran teed ... Other Bonds, Stocks & Sec........ 86,615 204,461 Cash Items in Process o f Col........ . . 142,502* Due from B an k s................................ 44,599 C urrency & C oin ................................ 354,852 Reserve with F . R . B a n k ............... 73,263 2,807,760 Change in A m t. from 10-16-46 11-14-45 6,783 + 123,004 + 8,763 + + 85,121 3,981 + + 21,525 5,961 + 16,358 — 51,621 190,640 — 31,718 — 2,196 — 54,237 — 55,617 — 6,898 153,681 + 28,078 + 12,846 0 66 — 1,136 + 22,364 + 51,867 + 22,726 3,253 12,029 + 5,548 3,388 + + 1,980 9,866 — — 927 324 34,600 — 16,218 Total Demand D ep osits................... . .$2,165,737 Deposits o f Individuals ............... . . 1,466,334 122,975 Deposits o f U. S. Gov................... 89,632 Deposits o f State & Local Gov. 450,817* Deposits o f Banks ....................... .. . 35,979 Certified & Officers’ Checks 396,607 Total Tim e D ep osits......................... 383,397 Deposits o f Individuals................. 13,210 Other Tim e D eposits..................... 5,000 Liabilities fo r B orrow ed M o n e y .., 92,333 All Other L iabilities........................... 148,083 Capital A ccounts ................................ Total Liabilities .................................. . 2,807,760 ___ 19,684 ___ 79,992 7,811 36,643 — 3,737 6,221 + 6,664 + 1,847 + 1,851 + 4 800 + — 143 962 + — 16,218 + 98,898 — 153,065 3,200 + 34,782 5,757 + + 38,925 + 39,009 84 — 6,000 — 3,110 + 15,577 — 34,600 + . District o f Columbia W ashington ....................... M aryland Baltim ore ............................ Cumberland ............ .......... F rederick ............................ H agerstow n ........................ North Carolina Asheville ........................... Charlotte ............................ Durham .............................. Greensboro ....................... K inston ................................ Raleigh ................................ W ilm ington ....................... W ilson .................................. W inston-Salem ................. South Carolina Charleston ......................... Columbia ........................... Greenville ............................ S partanburg . . ................. V irginia Charlottesville ................... Danville .............................. L yn chburg ......................... N ew p ort N e w s ................. N orfolk ................................ Portsm outh ....................... R ichm ond ............................ Roanoke .............................. W est V irgin ia Bluefield ..................... . Charleston ......................... Clarksburg ....................... H untington ....................... Parkersburg ..................... District Totals ..................... $ 599,118 % chg. from Oct. 1945 10 mos. 1946 + 10 $ 6,111,535 +11 8,131,643 189,748 147,554 221,044 + 3 +30 +20 +28 384,749 1,742,929 1,047,176 528,408 163,771 741,356 326,781 199,507 957,214 + + + + + + — + + 36 26 25 31 31 28 9 18 35 17 45 45 55 491,333 713.121 575.122 337,135 + + + + 19 34 38 39 + 8 +10 + 31 + 20 864,105 20,318 16,191 25,167 + 35 43,977 210,336 179,352 58,411 37,890 90,666 35,291 56,397 132,216 + 40 - -3 9 — 27 --5 0 --3 1 — 35 —1 + 29 + 37 51,589 85,132 77,697 44,081 + + + + 22,134 55,848 33,937 27,539 144,517 18,287 503,617 73,564 + + + + + + + 35 45 31 15 13 24 53 219,190 253,269 296,868 237,273 1,352,935 169,565 3,822,981 630,004 36,141 114,913 25,990 48,178 24,038 + + + + + 40 35 31 35 33 289,921 1,037,657 226,933 418,946 210,592 + 22 $32,176,260 3,756,637 % chg. fro m 10 m os. ’ 45 + 8 + 22 + 34 + 2 +12 + 2 +11 + 40 +18 + 19 + 28 +11 + 11 +14 COTTON CON SU M PT IO N A N D ON H A N D — B A LE S O ctober October 1946 1945 F ifth D istrict S tates: Cotton c o n s u m e d ................. 441,478 366,301 Cotton G row ing S tates: Cotton consumed ........... 811,434 667,484 Cotton on hand Oct. 31 in consum ing establishments 1,680,533 1,645.316 storage & com presses . . . . 5,812,139 9,610,474 United States: Cotton consumed ................. 931,229 759,763 Cotton on hand Oct. 31 in consum ing establishments 2,018,941 1,910,875 5,887,999 9,727,799 storage & com p resses.. . . Spindles active, U . S ................. 21,753,942 21,443,371 A ug. 1 to Oct. 31 1946 1945 1,238,677 1,068,926 2,283,710 1,938,542 2,605,189 2,198,656 COTTON C O N S U M P T IO N -F IF T H DISTRICT In Bales M O NTH S October September October 10 Months 10 Months *Net figures, reciprocal balances being eliminated. Oct. 1946 N . Carolina 1946.................... 242,321 1946.................... 212,325 1945.................... 198,080 1946.................... 2,129,744 1945.................... 2,053,954 S. Carolina 180,377 160,991 151,948 1,596,392 1,564,395 V irgin ia 18,780 17,518 16,273 174,685 180,682 D istrict 441,478 390,834 366,301 3,900,821 3,799,031 C O M M ERCIAL F A IL U R E S N um ber Failures D istrict U .S . M O N TH S October September O ctober 10 Months 10 Months 1946.................... 1946.................... 1945.................... 1946................... 1945.................... S ou rce: Dun & Bradstreet 2 3 1 20 16 123 96 62 885 708 T otal Liabilities D istrict U .S . ‘ $ 15,000 94,000 9,000 $ 363,000 1,518,000 $ 6,400,000 4,800,000 3,114,000 $40,733,000 27,303,000 DEPOSITS IN M U T U A L SAV IN G S B AN K 8 Baltimore Banks Oct. 31, 1946 Total Deposits .........$376,497,711 Sept. 30, 1946 $375,476,030 Oct. 31, 1945 $337,725,426 9 MONTHLY REVIEW B U ILD IN G PE R M IT FIGU RES C ON STR U C TIO N C O N TR A C T S A W A R D E D Total V aluation Oct. 1946 Oct. 1945 M ARYLAND Baltimore .................................... Cumberland ................................ Frederick ...................................... H agerstown ................................ Salisbury ...................................... V IR G IN IA Danville ........................................ Lynchburg .................................. N orfolk ........................................ . Petersburg .................................. Portsmouth .................................. Richmond .................................... Roanoke ........................................ W E S T V IR G IN IA Charleston .................................... Clarksburg .................................. Huntington .................................. N O R T H C A R O L IN A Asheville ...................................... Charlotte ...................................... Durham ........................................ Greensboro .................................. H igh P oint .................................. Raleigh ........................................ Rocky Mount .............................. Salisbury ...................................... W inston-Salem ......................... S O U TH C A R O L IN A Charleston ..................................... Columbia ...................................... Greenville .................................... Spartanburg ................................ D IS T R IC T OF COLU M B IA W ashington .................................. $ $ 3,302,705 43,225 36,050 103,135 86,746 2,881,056 65,800 46,150 58,365 29,690 69,872 122,133 232,880 118,100 116,270 1,343,090 209,936 210,689 162,753 282,340 4,900 69,125 987,479 201,079 312,857 52,495 206,570 387,079 70,828 620,142 195,350 449,500 250,065 286,230 166,444 239,027 118,875 71,995 172,534 286,692 303,222 258,790 305,605 160,515 101,400 116,400 69,685 123,283 133,365 117,160 143,450 98,530 167,276 88,125 23,626 70,062 Sept. STATES 1946 Maryland ..................... $26,322,000 Dist. o f Colum bia___ 3,328,000 V irginia ....................... 9,961,000 W est V irgin ia ........... 5,389,000 N orth C a r o lin a ........... 15,588,000 South Carolina ........... 2,928,000 F ifth D istrict .........$63,516,000 S ou rce: F . W . Dodge Corp. % Change fro m Sept. 1945 9 mos. ’46 +279 $238,022,000 +109 50,416,000 + 97 155,285,000 +221 57,383,000 + 66 147,109,000 +184 91,843,000 +148 $740,058,000 % Change from 9 mos. ’ 45 +219 + 80 + 87 +262 +193 +552 +179 R E T A IL F U R N IT U R E SALE S 3,620,173 2,245,524 $ 12,418,762 $150,339,983 $ 10,397,680 $ 54,342,977 P ercentage Changes in October and 10 Mos. 1946 C ompared with Compared with October 1945 10 Mos. 1945 + 39 + 49 + 20 + 52 + 39 + 58 + 26 + 55 + 28 + 52 + 43 + 54 + 33 + 53 ST AT E S Maryland (5 )* ......................... Dist. o f Columbia ( 5 ) * ........... V irgin ia (2 1 )* ......................... W est V irgin ia (1 0 )* ............. N orth Carolina ( 1 5 ) * ............. South Carolina (1 4) * ............. F ifth D istrict (7 0 )* ........... IN D IV ID U A L C ITIE S Baltimore, Md., '( 5 ) * ............... W ashington, D. C., ( 5 ) * ......... Lynchburg, V a., ( 3 ) * ............. Richmond, V a., ( 7 ) * ............... Charleston, W . V a. ( 3 ) * .. Charlotte, N . C., ( 4 ) * ............. Columbia, S. C., ( 4 ) * ............... + + + + + + + 39 20 53 38. 12 33 72 + + + + + + + 49 52 75 62 58 68 72 ♦Number o f rep orting stores District Totals .................................. 10 Months .......................................... W H O L E S A L E T R A D E — 209 FIRM S RAYON YAR N DATA Oct. 1946 Sept. 1946 Oct. 1945 R ayon Y arn Shipments, L b s . . . . . , 57,400,000 Staple Fiber Shipm ents, L b s.......... . .14,000,000 53,900,000 14,000,000 53.200.000 15.100.000 9,000,000 R ayon Y a rn Stocks, L bs.................. Staple Fiber Stocks, L b s................ , , 2,600,000 8.900.000 2.600.000 7.300.000 4.600.000 Source : R ayon O rganon A U C TIO N TOBACCO M A R K E TIN G Produ cers’ T obacco Sales, Lbs. P rice per Cwt. STATES O ctober 1946 October 1945 1946 1945 South Carolina ............... 9,346,000 782,956 $38.75 $40.42 N orth Carolina ............... 282,984,024 244,383,558 53.09 44.71 V irgin ia ........................... 58,348,278 55,575,374 51.69 44.41 T otal ..............................350,696,302 300,741,888 $52.47 $44.64 Season Through .........902,027,199 851,510,575 51.51 43.78 LIN ES N et Sales October 1946 com pared with Oct. Sept. 1945 1946 Auto Supplies ( 1 0 ) * ........... Drugs & Sundries ( 1 0 ) * . .. Dry Goods ( 5 ) * ..................... E lectrical Goods ( 4 ) * ......... Groceries (7 3 )* ................... H ardware ( 1 3 ) * ................... Industrial Supplies (6 ) * .. P aper & Products ( 7 ) * . . . T obacco & Products (9 ) *. Miscellaneous (7 2 )* ........... D istrict A vg. ( 2 0 9 ) * .. . + 13 + 15 + 64 + 103 + 33 + 66 + 75 + 35 + 25 + 32 + 38 + 25 + 5 f-23 - 9 -20 -31 -17 -16 1-19 + 15 + 19 Stock R atio Oct. Oct. 31, 1946 collections com pared with to a cc’ts Oct. 31 Sept. 30 outstand’g 1946 Oct. 1 1945 + 39 + 6 + 110 0 0 — 3 + + + 21 69 45 + *5 — 1 0 + *21 + 27 + 36 + *2 + 3 + 1 126 116 87 92 108 114 103 94 171 134 127 S ou rce: Departm ent o f Comm erce ♦Number o f rep orting firms. D E P A R T M E N T STO R E T R A D E TOBACCO M A N U FAC TU RIN G Oct. 1946 Smoking & chewing tobacco (Thousands o f l b s .) ......... 21,822 Cigarettes (Thousands) ..32,777,855 Cigars (Thousands) ......... 588,067 Snuff (Thousands o f lbs.) 3,809 % Change from 10 mos. Oct. 1945 1946 —20 + 5 + 15 + 1 178,312 271,083,323 4,823,628 33,099 % Change from 10 mos. ’ 45 — 24 +20 + 18 —10 SOFT C O A L PRODU CTION IN TH O U SAN D S OF TONS Oct. 1946 REG ION S 14,078 W est V irgin ia . . . V irginia ............... . . 1,715 165 Maryland ............. . . F ifth District . ..15,958 United States . . . .56,000 % in D is tr ic t.. . . 28.5 Oct. 1945 8,748 1,414 163 10,325 39,192 26.3 % Chg. + 61 + 21 + 1 + 55 + 43 10 Mos. 1946 118,395 14,272 1,702 134,369 446,899 30.1 10 Mos. % 1945 Chg. 126,524 — 6 15,249 — 6 1,446 + 18 143,219 — 6 478,430 — 7 29.9 Richm ond P ercentage + 14 Percentage + 27 P ercentage + 69 P ercentage + 27 Baltim ore W ashington Other Cities change in Oct. 1946 sales, com pared with sales +15 + 7 +18 change in 10 mos. sales 1946, com pared with 10 +19 +17 +25 chg. in stocks on Oct. 31, ’ 46, com pared with +33 +25 +47 chg. in outstanding orders Oct. 31, ’ 46, from +14 + 1 +16 D istrict in Oct. 1945: +12 mos. in 1945: +20 Oct. 31, ’ 45: +36 Oct. 31, ’ 45: +13 P ercentage change in receivables Oct. 31, ’ 46, from those on Oct. 31, ’ 45: + 66 +48 +45 +45 +49 Percentage o f current receivables as o f O ctober 1 collected in O ctober: 51 55 57 59 55 Percentage o f instalm ent receivables as o f Oct. 1 collected in O c t .: 34 38 30 36 33 Maryland Dist. o f Col. V irg in ia W . V irgin ia No. Carolina So. Carolina Percentage change in Oct. 1946 sales from Oct. 1945 sales by S ta tes: + 18 + 7 +15 +22 +23 + 7 Percentage change in 10 mos. sales 1946 from 10 mos. sales 1945 : + 24 +17 +24 +29 +30 +15 10 MONTHLY REVIEW BUSINESS IN DEXES—FIFTH FEDERAL RESERVE DISTRICT Average Daily 1935-39=100 Seasonally Adjusted Bank Debits ................................................................... Bituminous Coal Production*..................................... Building Contracts Awarded........................................ Building Permits Issued............................................... Cigarette Production..................................................... Cotton Consumption ..................................................... Department Store Sales.................................................. Department Store Stocks.............................................. Furniture Orders........................................................... Furniture Shipments ............................................... . Furniture Unfilled Orders........................................... Furniture Sales— Retail............................................... Life Insurance Sales..................................................... Wholesale Trade: Automotive Supplies**............................................. Drugs .......................................................................... Dry Goods................................................................... Electrical Goods**..................................................... 54 Groceries .................................................................... Hardware ................................................................... Industrial Supplies** ............................................... Paper and Its Products**......................................... Tobacco and Its Products**..................................... Sept. 1946 Aug. 1946 July 1946 Sept. 1945 303 153 261 211 234 154 298 262 185 210 438 267 265 298 15 lr 348r 175 229 154 306 259 206 242 437 212 272 259 153 330 184 216 140 307 263r 117 244 409 249 297 243 142 106 83 207 134 225 200 119 126 362 167 153 286 282 221 251 260 193 239 280 213 55 246 112 237 137 116 195 230 148 40 197 81 137 115 94 43 267 116 275 181 I ll 249 122 253 126 107 % Change Sept. 1946 from Aug. 46 Sept. 45 + 25 + 2 + 1 8 — 25 + 146 + 154 + 21 + 2 + 13 0 + 15 3 + 32 + 31 + 1 10 + 55 — 13 + 67 0 21 + 26 60 73 14 8 15 26 7 5 + 9 + 44 + + + + + + 4 + 47 + 23 + 49 + 35 + 36 + 43 +101 + 57 + 18 *Not seasonally adjusted **1938-41 = 100 SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) Output and employment at factories were maintained at record peacetime levels in October. The total value of goods distributed was maintained at a high level but below the level of production, and inventories increased further. Prices in wholesale and retail markets generally advanced considerably following the lifting of controls. most other durable goods industries was maintained at about the September level. During the first three weeks of November steel output rose slightly to an average scheduled rate of 91 per cent of capacity, but in the fourth week output dropped sharply owing to a cessation of opera tions at most bituminous coal mines on November 21 as a result of work stoppages. I n d u s t r ia l P r o d u c t io n Output at factories and mines, as measured by the Board’s seasonally adjusted index, increased slightly further in October and was at a level of 182 per cent of the 1935-39 average as compared with 180 in September. Production was maintained at this level in November up to the beginning of work stoppages in bituminous coal mines. Production of nondurable manufactures in October was at a postwar peak rate of 169 per cent of the 1935-39 average. Output of manufactured food products rose sharply, reflecting chiefly the exceptionally large volume of meat production after the middle of October when Federal price controls were removed. The number of animals slaughtered under Federal inspection declined somewhat from late October levels during the first half of November. Output of textile products advanced in October to a level of 170 per cent of the 1935-39 average and there were also small gains in activity in some other nondurable goods in dustries. Output o f durable manufactures increased slightly in October as activity in the nonferrous metals and machinery industries continued to advance. The number of pas senger cars and trucks produced increased further to a rate 14 per cent above the 1935-39 average and continued to advance in the first two weeks o f November. Activity in C o n s t r u c t io n Value of construction contracts awarded, as reported by the F. W . Dodge Corporation, declined further in October to a level two-fifths below the May peak, but they were still about double the 1939 average. Awards for resi dential building decreased by one-fifth in October, more than offsetting an increase in the value of contracts awarded for factory construction. D is t r ib u t io n Department store sales, which usually increase from Sep tember to October, showed little change this year, and the Board’s seasonally adjusted index declined to 258 per cent of the 1935-39 average as compared with 269 for Sep tember and 290 for August. Sales increased seasonally, however, in the first half of November and were 22 per cent larger than a year ago. Department store stocks con tinued to rise in October and the Board’s seasonally ad justed index reached a new high of 235 per cent of the 1935-39 average, notwithstanding a further marked de crease in stocks in the New York City area as a result of a trucking strike. During October and the early part of November rail road carloadings of livestock were in exceptionally large 11 MONTHLY REVIEW volume and shipments of most other classes of railroad revenue freight were also maintained at high levels. C o m m o d i t y P r ic e s Following the initial sharp increases in prices of many basic commodities in October and the early part of Novem ber, after the lifting of controls, prices of some agricultural products, like cotton, corn, and poultry products, declined, while prices of wheat, flour, and sugar advanced. Initial advances in prices of nonferrous metals, steel scrap, and rayon were maintained, and in the latter part of November prices of some of these industrial materials advanced further. There were also reported in this period substan tial increases in wholesale prices of a number of finished manufactured products. Retail prices of foods and numerous miscellaneous pro ducts increased considerably further in October and No vember. Most of the increases occurred after the middle of October, at which time the consumers’ price index was 2 per cent higher than in September and 15 per cent above the level at the end of the war. B a n k C r e d it Commercial and industrial loans at reporting banks in 101 leading cities showed further sharp increases ift Octo ber and the first three weeks of November. Real estate and consumer loans also continued to increase steadily. Government security holdings declined further, reflecting principally Treasury debt retirement. Deposits of busi nesses and individuals have shown little further change. Member bank reserves showed little over-all change during October and the first three weeks of November. Losses of funds by member banks as a result of an outflow of currency and a transfer of deposits from member banks to Reserve Banks due to Treasury operations were about equal to the funds banks obtained by borrowing at Reserve Banks and from an inflow of gold. Government security holdings at Reserve Banks fluctuated considerably in Oc tober but were little changed over the period.
@FedFRASER