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MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT FEDERAL RESERVE BANK OF RICHMOND OCTOBER 31, 1931 RICHMOND, VIRGINIA trade began September, ness took a seasonal upturn. The volume of busi F ALLSeptember andinearly Octoberand general busi ness in was less than in recent years, but showed about the usual increase over the business done in August. In banking, September and early October witnessed some marked changes, among them being exceptional withdrawals from sav ings and time deposits in member banks, an unusually rapid rise in the outstanding circulation of Federal re serve notes, a decline in loans at member banks, and a material increase in rediscounts at the Federal Reserve Bank of Richmond. Debits to individual accounts fig ures for five weeks ended October 14, 1931, showed about the usual seasonal increase over debits in the pre ceding five weeks, ended September 9, 1931, but were nearly 14 per cent less than debits in the correspond ing five weeks last year, ended October 15, 1930. Com mercial failures in the Fifth district in September were 10.5 per cent less in number than failures in September 1930, but aggregate liabilities involved in insolvencies in the 1931 month were approximately 50 per cent greater. Employment conditions showed no improve ment in September or the first half of October. Coal production in September showed a seasonal increase over August production, but was much below the pro duction of September 1930. Fifth district textile mills continued to operate on orders for immediate shipment, but cotton consumption in the district and in the United States in September exceeded consumption in Septem ber last year. Cotton prices declined further during September, but the decline was at least temporarily checked in the first half of October. Retail and whole sale trade in September both showed seasonal increases over August trade, but was in less volume than in Sep tember last year. The Department of Agriculture fur ther increased its estimate of cotton production for 1931 in its October 8 report. Tobacco markets in the Carolinas and border counties in Virginia were open in Sep tember and sold about the usual amount of tobacco at prices below those of last year. September weather was too dry and hot for development of late crops, except cotton, but was ideal for curing and harvesting crops which matured before September. The district has fine yields of all crops this year, but the prices for nearly all agricultural products are very low and the year’s operations will not be profitable to many far mers. One of the best features of the situation in agri culture is the abundance of food and feed crops raised in the Fifth district this year, and the possession of these products will enable farmers to get along with less cash or credit this coming winter than they needed last year, when the drought in Maryland, Virginia, West Virginia, and to some extent in North Carolina, killed all gardens, reduced fruit and truck yields to a minimum, cut yields of corn and hay in half or worse, and burned up pasture grasses. Reserve Bank Statement ITEMS Oct. 15 1931 Rediscounts held __________ Open market paper------------Government securities_______ Other earning assets______ ___ Total earning assets_______ Circulation of Fed. Res. notes... Members* reserve deposits-----Cash reserves_____________ Reserve ra tio _____________ $32,157 33,056 21,558 700 87,471 93,119 59,443 82,853 50.48 000 omitted Sept. 15 Oct. 15 1931 1930 $23,032 2,628 31,558 700 57,918 72,910 60,017 91,596 64.88 $18,002 8,392 16,983 0 43,377 66,809 63,822 97,236 72.37 Rediscounts for member banks held by the Federal Reserve Bank of Richmond rose by $9,125,000 between September 15 and October 15, both this year, an un usual rise at a season when liquidation of agricultural indebtedness normally exceeds mercantile borrowing. As a matter of fact, the increase in rediscounts was not due to increased borrowing at member banks, but was caused by the needs of the banks for funds with which to meet deposit withdrawals. During the past month the Richmond bank also increased its portfolio of open market paper by $30,428,000, but reduced its holdings of Government securities by $10,000,000. T h e s e changes increased the Bank’s total earning assets by $29,553,000 between September 15 and October 15. The volume of Federal reserve notes in actual circu lation increases moderately at this season in most years but a rise during the past month totaling $20,209,000 is much larger than is accounted for by seasonal in MONTHLY REVIEW 2 fluences. The large increase in note circulation is due in large part to the desire of banks to strengthen their cash position and to withdrawals from commercial banks, chiefly of savings deposits which have not been redeposited. Member bank reserve deposits dropped $574,000 last month. The several changes mentioned, with others of less importance, reduced the cash re serves of the Federal Reserve Bank of Richmond by $8,743,000 between September 15 and October 15, and lowered the ratio of cash reserves to note and deposit liabilities combined by 14.40 points. Effective October 20, 1931, the discount rate on all classes of paper was raised from 3 to 4 per cent. A comparison of the figures on the statement for October 15, 1931, with corresponding figures reported on October 15, 1930, shows marked changes in most items. Rediscounts for member banks rose $14,155,000 during the year, an increase of 78.6 per cent, the rise occurring during the past two months. The Bank also increased its portfolio of open market paper by $24,664,000 during the year, and its holdings of Govern ment securities by $4,575,000. These transactions raised the total earning assets of the Federal Reserve Bank of Richmond by $44,094,000 between October 15, 1930, and October 15, 1931, most of which oc curred between September 15 and October 15 this year, as shown in the tabulation. The circulation of Federal reserve notes at the middle of October this year showed an increase of $26,310,000 in comparison with the cir culation on the corresponding date a year ago; likewise most of this increase occurred within the month ending October 15, 1931. Member bank reserve deposits de creased by $4,379,000 during the year, partly due to lower deposits in member banks and partly to a re duction in the number of member banks. The large increase in holdings of open market paper and Govern ment securities lowered the cash reserves of the Fed eral Reserve Bank of Richmond by $14,383,000 during the year, and the ratio of reserves to note and deposit liabilities combined declined by 21.89 points. Member Bank Statement ITEMS Loans on stocks and bonds (in cluding Governments) ---------All other loans--------------------Total loans and discounts------Investments in stocks and bonds.. Reserve bal. with F. R. Bank.---Cash in vaults---------------------Demand deposits____________ Time deposits___________ ___ Borrowed from F. R. Bank.___ Savings and Time Deposits Oct 14 1931 000 omitted Sept. 16 Oct. 15 1931 1930 $147,752 $157,408 $174,239 246,846 247,706 294,213 394,598 405,114 468,452 242,325 233,384 191,492 37,786 39,371 41,235 14,552 10,913 15,485 330,044 328,098 351,720 243,727 259,630 256,208 12,494 8,358 4,787 The accompanying table shows the principal items of condition of fifty member banks in thirteen leading cities of the Fifth district as of three dates, October 14, 1931, September 16, 1931, and October 15, 1930, thus affording an opportunity for comparison of the latest available figures with those of the corresponding dates a month and a year earlier. It should be under stood that the figures in the table reflect conditions on the report dates only, and are not necessarily the high est or lowest figures that occurred during the interval between the dates. Total loans and discounts in the reporting banks de creased by $10,516,000 during the past month, contrary to seasonal trend in city banks. Loans on stocks and bonds declined $9,656,000, while all other loans de creased $860,000. On the other hand, investments in bonds and securities rose in the reporting banks by $8,941,000 between the middle of September and the middle of October, and cash in vaults rose by $933,000. In spite of the decrease in loans, there was an increase of $1,946,000 in demand deposits during the month, but in time deposits there was an exceptionally large decrease amounting to $15,903,000. The fifty report ing banks increased their borrowing at the Federal Reserve Bank of Richmond by $4,136,000 between September 16 and October 14. Twenty-one of the fifty banks were rediscounting at the reserve bank at the middle of October. In comparison with figures reported last year, those for October 14, 1931, showed some marked changes. Total loans and discounts at the reporting banks drop ped $73,854,000 between October 15, 1930, and Oc tober 14, 1931, loans on stocks and bonds declining $26,487,000 and all other loans decreasing $47,367,000. On the other hand, investments in stocks and bonds rose by $50,833,000 during the year, and cash in vaults increased by $4,572,000. Deposits declined materially during the period under review, demand deposits de creasing $21,676,000 and time deposits dropping $12,481,000. As a result of lower deposits, reserve bal ances of the reporting banks declined $3,449,000 be tween the middle of October last year and this. On October 14, 1931, twenty-one of the reporting banks were borrowing $12,494,000 from the Federal Re serve Bank of Richmond, an increase of $7,707,000 over total borrowings by 12 of the same banks on Oc tober 15, 1930. Savings deposits in twelve mutual savings banks in Baltimore increased in September, and at the end of the month totaled $212,323,816, compared with $210,116,559 on August 31, 1931, and $196,729,159 on Septem ber 30, 1930. In fifty reporting member banks in lead ing cities of the Fifth district, savings and time de posits declined sharply during the past month, totaling only $243,727,000 on October 14, 1931, compared with $259,630,000 on September 16, 1931, and $256,208,000 on October 15, 1930. Debits to Individual Accounts The accompanying table shows debits to individual, firm and corporation accounts in clearing house banks in the leading cities of the Fifth Federal reserve dis trict for three equal periods of five weeks each, ended October 14 and September 9, 1931, and October 15, 1930. If proper allowance be made for price changes during the periods under review, the figures serve as an approximate measure of general business. MONTHLY REVIEW CITIES 000 omitted Total debits, five weeks ended Oct. 15, Sept. 9 Oct. 14, 1931 1930 1931 15,941 10,104 18,133 20,007 12,068 52,427 5,073 22,473 152,674 28,837 10,033 279,439 12,731 40,181 12,171 388,087 19,026 36,333 41,973i 19,594 8,399 5,987 27,973 16,438 13,726 8,207 15,587 16,639 11,560 47,123 4,201 22,615 126,361 26,059 9,074 221,216 10,762 29,537 40,770 512,062 30,483 44,874 54,882 27,741 11,075 8,733 30,402 24,445 19,609 10,712 22,710 24,892 13,001 61,778 4,827 31,783 178,373 32,141 14,033 295,827 16,342 42,978 $1,343,715 $1,138,648 $1,554,473 Asheville, N. C._____ Baltimore, Md....... ...... Charleston, S. C------Charleston, W. Va._ _ Charlotte, N. C.-------Columbia, S. C.--------Cumberland, Md. ----Danville, Va----- -----Durham, N. C---------Greensboro, N. C ----Greenville, S. C.-----Hagerstown, Md......... Huntington, W. Va— Lynchburg, Va............. Newport News, Va.— Norfolk, Va................ Portsmouth, Va. -----Raleigh, N. C. Richmond, V a.--------Roanoke, Va............... Spartanburg, S. C.— Washington, D. C----Wilmington, N. C---Winston-Salem, N. C. 13,751 450,326 18,368 41,640 49,114 21,156 10,463 8,067 30,609 District Totals ------ 20,100 During the five weeks ended October 14, 1931, ag gregate debits to individual accounts showed a seasonal increase of $205,067,O X or 18 per cent, over debits C ), during the preceding like period this year, ended Sep tember 9, the increase being due to quarterly settlements on October 1 and to the opening of early fall trade during the later period. Twenty-two of the twentyfour reporting cities showed higher figures for the more recent period, Charleston, S. C., and Raleigh, N. C., being the only cities which failed to make the seasonal gain. In comparison with figures reported for five weeks last year, ended October 15, 1930, corresponding fig ures for the five weeks ended October 14, 1931, show a total decrease of $210,758,000, or 13.6 per cent. All of the reporting cities showed lower figures for the 1931 period except Durham, N. C., and Portsmouth, Va. Commercial Failures Business failures in the Fifth reserve district in Sep tember 1931 numbered 102, with estimated liabilities totaling $2,740,714, compared with 64 failures and lia bilities amounting to $2,595,092 in August this year and 114 failures and $1,831,506 in liabilities reported in September 1930. The increase in insolvencies in September over the August number is seasonal, but is larger this year than in most years, chiefly due to very low figures in August. Bankruptcies in the United States numbered 1,936 in September 1931, with liabili ties aggregating $47,255,650, compared with 1,963 fail ures and liabilities totaling $46,947,021 in September 1930. The Fifth district showed a decline of 10.5 per cent in number of failures in September in comparison with the number in September last year, while the 3 United States reported a decline of only 1.4 per cent, but in the aggregate of liabilities involved in September 1931 bankruptcies the district showed an increase of 49.6 per cent, while the United States as a whole in creased only 7/10ths of 1 per cent. Employment The outlook for improvement in employment con ditions in the Fifth district did not improve during the past month, although in a few lines of industry and trade there was some seasonal increase in activity. Social agencies expect the coming winter will bring more calls for assistance than last winter, but they also state that the public now has a better understanding of the need for the extension of help this year. The problem of handling relief work is being left to local organizations, but both National and local agencies are striving to arouse financial support for relief agencies. Coal Production There was a seasonal increase in the production of bituminous coal in September, and 31,919,000 net tons were mined, compared with 30,534,000 tons dug in August this year and 38,632,000 tons in September 1930. Total production of soft coal in the United States in the present calendar year to October 10 (ap proximately 240 working days) amounted to 293,440,000 net tons, compared with 353,164,000 tons mined during the corresponding period last year, and 406,472,000 tons in 1929. In its September 26 report, the Bureau of Mines, Department of Commerce, gave bituminous coal pro duction figures for the month of August, and West Virginia with 8,747,000 continued to lead the country, Pennsylvania ranking second with 7,476,000 tons. Local coal yards raised retail coal prices to winter levels around October 1, and all sizes of coal are in stock, so that immediate deliveries can be made on all orders. Textiles Although textile mills are receiving a very small volume of forward orders, stocks in secondary hands are low, making necessary a considerable volume of replacement orders at frequent intervals. Fifth dis trict cotton mills used 215,410 bales in September, of which North Carolina mills used 112,879 bales, South Carolina mills used 91,368 bales, and Virginia mills 11,163 bales. In August this year the Fifth district mills consumed 197,404 bales, and in September 1930 they used 177,575 bales. Consumption of cotton in the Fifth district in September amounted to 46.45 per cent of National consumption, compared with 46.36 per cent of National consumption used in the district in August this year and 45.14 per cent in September 1930. Cotton Statistics Spot cotton prices on ten leading Southern markets continued to decline to October 2, when the average price for 7/8 inch upland cotton, middling basis, was down to 5.10 cents per pound. Since that time there has been a slight recovery, and on October 16, the latest date for which official figures are available, the 4 MONTHLY REVIEW average price was 5.71 cents. This price compares with 5.79 cents on September 18, 1931, and 9.50 cents on October 17, 1930, a month and a year earlier, respec tively. Present cotton prices are very near the all time low record. Condition figures on the 1931 cotton crop, based on the October 1 condition, were issued by the Depart ment of Agriculture on October 8. This report raised the estimate of probable production in the United States to 16,284,000 equivalent 500-pound bales, in compari son with an estimate of 15,685,000 bales on September 1, 1931, and final ginnings of 13,932,000 bales in 1930.. The October 1 report raised this year’s probable pro duction figures for North Carolina, left South Caro lina’s unchanged, and lowered Virginia’s estimate, all in comparison with forecasts made a month earlier. South Carolina’s yield is estimated at 929,000 bales, compared with the same figure on September 1 and 1.001.000 bales grown last year. North Carolina’s estimated crop of 730,000 bales compares with an esti mate of 715,000 bales on September 1, and 775,000 bales ginned in 1930. Virginia’s prospective yield of 39.000 bales compares unfavorably with 41,000 bales predicted a month earlier and 42,000 bales in 1930. Total production in the Fifth district is forecast at 1.698.000 bales, an increase of 13,000 bales during Sep tember but 120,000 bales less than last year. The de cline in prospective yield this year in the Fifth district is entirely due to acreage reduction. Ginning figures to October i, released by the Census Bureau on October 8, showed 5,408,307 bales ginned from this year’s crop, compared with 6,303,895 bales of last year’s crop ginned before October. This year weather conditions were favorable for continued growth of cotton, and the crop did not open prematurely as it did over much of the district last year. This has made ginning later in 1931. Cotton consumption in the United States in Septem ber 1931 showed an increase over consumption in the longer month of August, and was materially larger than in September last year. The number of bales used totaled 463,704 in September 1931, compared with 425,819 bales used in August this year and 393,390 bales in September 1930. Total consumption this cotton year—August 1 through September 30—amounted to 889,523 bales, against 746,016 bales consumed in the corresponding two months of last season. Manufac turing establishments held 775,523 bales on September 30, compared with 839,850 bales held on August 31 and 970,988 bales on September 30, 1930. Public warehouses and compresses held 6,296,546 bales in storage at the end of September this year, compared with 4,426,154 bales so held a month earlier and 5,241,062 bales on September 30 last year. September ex ports totaled 558,192 bales, compared with 211,030 bales exported in August and 902,956 bales sent abroad in September 1930. Total exports during the two months of the present cotton year—‘ ugust 1-SeptemA ber 30, inclusive—totaled 769,222 bales, a substantial decrease under 1,268,992 bales shipped over seas during the corresponding two months last year. Spindles ac tive at some time during September numbered 25,- 236,916, compared with 25,622,526 in August this year and 26,066,510 in September 1930. Cotton growing states consumed 375,911 bales in September, compared with 341,542 bales in August and 313,912 bales in September 1930. Last month’s consumption in the cotton growing states amounted to 81.07 per cent of National consumption, a higher per centage than either 80.21 per cent in August this year or 79.80 per cent in September 1930. Of the 375,911 bales of cotton consumed in the cotton growing states in September, the Fifth district mills used 215,410 bales, or 57.3 per cent, a slightly higher figure than 56.57 per cent of Southern consumption attained by Fifth district mills in September last year. Tobacco South Carolina auction m a r k e t s sold 28,271,959 pounds of producers’ tobacco in September, at an av erage price of $9.37 per hundred pounds, compared with 36,306,991 pounds sold in September 1930, at $13.13 per hundred. Total sales for the 1931 season to the end of September amounted to 52,745,702 pounds, and the average season price was $9.95 per hundred. Mullins led in sales last month with 12,332,194 pounds, Lake City ranking second with 5,974,262 pounds. South Carolina tobacco production in 1931 was forecast on October 1 as 74,120,000 pounds, compared with 96,250,000 pounds grown in 1930, and a five-year average of 73,843,000 pounds. North Carolina growers sold 93,355,542 pounds of tobacco on auction floors in September, at an average price of $9.56 per hundred pounds, compared with 111,800,168 pounds sold in September 1930 for $11.84 per hundred. Prices are distinctly lower than a year ago as a result of a large crop in the United States and a record carry-over of tobacco from previous years. On October 1 the 1931 tobacco yield for North Caro lina was estimated at 496,760,000 pounds, compared with 584,000,000 pounds harvested last year and a fiveyear average of 450,863,000 pounds. Greenville led in September sales with 14,512,400 pounds, Wilson rank ing second with 13,862,331 pounds. Virginia tobacco warehouses opened at the end of September and sold 916,596 pounds for an average of $7.51 per hundred pounds. Last year the Virginia markets sold 615,321 pounds in September. The to bacco sold during September was of inferior grade. Weather was favorable for harvesting tobacco in Sep tember, and 98 per cent of the crop was in by October 1. The October forecast of 114,112,000 pounds is above the short crop of 111,776,000 pounds harvested in 1930, but is less than the five-year average of 121,753,000 pounds. Maryland's prospective yield of 33,000,000 pounds of tobacco this year compares with 19,040,000 pounds grown in 1930 and a five-year average of 24,423,000 pounds. West Virginia tobacco declined in condition in Sep tember, but the October 1 forecast of 6,044,000 pounds exceeds 5,040,000 pounds grown in 1930 and is nearly equal to the five-year average of 6,130,000 pounds. MONTHLY REVIEW Agricultural Notes Weather during September in the Fifth Federal reserve district was hot and dry, and in some instances reduced production of crops below expectations, but on the other hand conditions were almost ideal for har vesting and probably this more than balanced the few losses in yield. Maryland crops were generally in good condition on October 1. Prospects for oats, barley, hay, sweet po tatoes, grapes and pears improved during September, prospects for corn and Irish potatoes remained un changed, and prospects for tobacco, apples, peaches and buckwheat declined slightly. Maryland crops of tobac co, sweet potatoes, oats and barley promise the largest yields since 1900. October 1 estimates of probable production for the leading crops were as follows: corn, 20.400.000 bushels, compared with 7,276,000 bushels in 1930 and 21,593,000 bushels the five-year average; oats, 2,172,000 bushels, compared with 1,592,000 bush els in 1930 and 1,664,000 bushels the five-year average; hay, 526,000 tons, compared with 344,000 tons in 1930 and 642,000 tons the five-year average; tobacco, 33,000,000 pounds, compared with 19,040,000 pounds in 1930 and 24,423,000 pounds the five-year average; Irish potatoes, 3,360,000 bushels, compared with 2,427,000 bushels in 1930 and 4,051,000 bushels the five-year average; sweet potatoes 1,824,000 bushels, compared with 660,000 bushels in 1930 and 1,452,000 bush els the five-year average; and commercial apples, 679,000 barrels, compared with 330,000 barrels in 1930 and 444.000 barrels the five-year average. Virginia farms have an abundant supply of food and feed this season, in contrast with last year when all supplies were short. A large part of the com crop had been cut by October 1, and throughout the State the crop was reported the best ever grown. Total pro duction is forecast at 47,833,000 bushels, compared with the short crop of 17,227,000 bushels in 1930 and 44,077.000 bushels the five-year average. The oat crop this year of 5,216,000 bushels exceeds 2,831,000 bush els threshed in 1930 and also 4,289,000 bushels the five-year average production. Conditions of the late Irish potato crop are spotted, the weather having been too wet in August and too dry and hot in September. Total production of Irish potatoes in Virginia this year is forecast to be 14,756,000 bushels, compared with 13.989.000 bushels in 1930 and 16,374,000 bushels the five-year average. Sweet potatoes declined slightly in September, and this year’s crop of 4,940,000 bushels compares with 2,960,000 bushels last year and 5,643,000 bushels the five-year average. Peanuts matured earlier than usual and digging was progressing rapidly at the beginning of October. The forecast of 120,930.000 pounds for the 1931 peanut crop in the State is above the low yield of 83,790,000 pounds in 1930, but is lower than the five-year average of 138,079,000 pounds. Excellent crops of late hay were harvested during September, and this year’s total hay crop is fore cast at 1,126,000 tons, compared with the unusually short crop of 512,000 tons in 1930 and a five-year av erage crop of 1,213,000 tons. All fruit crops were un usually good this season, but the commercial apple crop 5 declined in condition in September. This year’s crop of apples entering into commercial channels is fore cast at 3,780,000 barrels, compared with only 1,300,000 barrels harvested in 1930 and a five-year average of 2.718.000 barrels. The size of the fruit in Virginia is generally above average this year, but the quality is irregular and prices are so low that growers report that they cannot afford to pack the poorer grades of apples. West Virginia crop yields are much above those of 1930, but in most cases are lower than the five-year av erage production. This year’s corn crop has been cut and is of good quality, totaling 15,624,000 bushels in comparison with only 5,772,000 bushels last year and a five-year average of 16,432,000 bushels. Oats yielded 4.004.000 bushels in West Virginia this year, compared with 2,972,000 bushels in 1930 and 5,490,000 bushels the five-year average. A 1931 hay yield of 890,000 tons is approximately twice the 1930 yield of 446,000 tons, but is below the five-year average of 1,126,000 tons. The tobacco crop of 6,044,000 pounds is much larger than 5,040,000 pounds grown last year, but is slightly below the five-year average of 6,130,000 pounds. Irish potatoes did not do as well as most other crops this year, and the forecast of production of 3,510,000 bushels, while larger than 2,800,000 bushels dug last year, is much lower than the five-year average of 5,800,000 bushels. Sweet potatoes yielded 206,000 bushels this year, compared with 150,000 bushels in 1930 and 254.000 bushels the five-year average production. The commercial apple production is estimated at 1,877,000 barrels, compared with only 680,000 barrels last year and a five-year average of 1,334,000 barrels. Fall pas tures in West Virginia are in excellent shape. North Carolina corn production this year totaling 60.513.000 bushels is the largest on record for the State, and compares with 51,865,000 bushels last year and a five-year average production of 48,754,000 bush els. The stand of com was unusually good this year and the ears are well filled. The oat crop in North Carolina turned out 8,181,000 bushels this year, com pared with 6,521,000 bushels in 1930 and a five-year average of 5,570,000 bushels. A hay yield of 990,000 tons is the highest per acre since 1923, and compares with 748,000 tons in 1930 and the five-year average production of 697,000 tons. The tobacco crop of 496,760.000 pounds is considerably less than 584,000,000 pounds harvested last year, chiefly due to a 7 per cent acreage reduction and a lighter leaf this year, but is above the five-year average production of 450,863,000 pounds. The peanut crop of 279,300,000 pounds ex ceeds last year’s crop of 191,700,000 pounds, and also the five-year average of 207,819,000 pounds. The qual ity of the nuts this year is extra good. Late Irish po tatoes suffered a decline in condition during Septem ber, but the prospective yield of 10,544,000 bushels is larger than last year’s crop of 8,590,000 bushels and the five-year average crop of 7,394,000 bushels. The per acre yield this year, however, is less than the aver age for the past ten years. Sweet potatoes also declined in September, but this year’s crop of 11,385,000 bushels is larger than either 9,506,000 bushels in 1930 or 8,342.000 bushels the five-year average. MONTHLY REVIEW 6 South Carolina crop prospects were cut by unusually 1930, but an increase of 6.8 per cent over September dry and hot weather in September, but major crops had 1930 valuation figures totaling $5,663,587. O n l y about matured good yields and the outlook is above twelve of the thirty-two cities reported higher figures the ten-year average. This year's corn crop of 25,000,- for the 1931 month, but Washington showed an in 000 bushels is slightly smaller than 25,806,000 bushels crease of nearly a million and a quarter dollars and gathered in 1930 but is larger than the five-year average several smaller cities reported relatively large increases. production of 21,484,000 bushels. The tobacco esti In proportion to population, the best records for the mate of 74,120,000 pounds is lower than the record month were made by Clarksburg, W. Va., and Durham, crop of 96,250,000 pounds last year, but is larger than N. C. the five-year average of 73,843,000 pounds. Much of Contracts awarded in September for construction the decline in comparison with last year is due to acre work in the Fifth district, including both rural and ur age reduction. Dry weather last month cut the sweet ban projects, totaled $20,573,415, compared with only potato prospects, and the forecast of 3,850,000 bushels $12,548,985 in August 1931 and $16,162,532 in Sep is lower than 5,200,000 bushels dug in 1930 and the tember 1930. Of the awards in September this year, five-year average of 4,377,000 bushels. South Caro $4,034,385, or only 19.6 per cent, was for residential lina^ peanut crop is forecast to be 8,960,000 pounds work, while last year residential contracts in September this year, compared with 8,400,000 pounds in 1930 and totaled $6,496,947, or 40.2 per cent of all awards. a five-year average of 6,581,000 pounds. The hay yield is smaller per acre than last year, but total production Retail Trade, 34 Department Stores of 178,000 tons is slightly above the crop of 171,000 Richmond Baltimore Washington Other Cit. District tons cured in 1930. Fruit crops were excellent in South Carolina this year, and the peach crop of 1,428,000 September 1931 sales, compared with sales in September 1930: —11.1 — 52 — 1.3 —16.8 — 5.7 bushels was the largest on record. Building Permits Issued, Fifth District Cities, September 1931 and 1930 Permits Iss’d CITIES Total Valuation 1931 1931 1930 1930 Baltimore, Md.............. 1,234 1,380 $1,463,160 $2,005,952 30,110 23,149 10 Cumberland, Md........... 11 2,875 38,899 8 Frederick, M d.--------25 9,825 6,080 Hagerstown, Md. -----13 14 23,700 14,005 Salisbury, Md............... 35 28 7,132 22,475 15 12 Danville, Va----- ------78,641 30,840 Lynchburg, Va.............. 53 44 142,779 199,702 Norfolk, Va........... ..... 156 125 7,535 5,730 Petersburg, V a.-------29 5 26,615 50,527 Portsmouth, Va............ 33 47 397,868 1,158,023 Richmond, Va............. 123 154 120,997 149,695 Roanoke, Va............... 46 41 2,440 15,745 Bluefield, W. Va------14 9 53,854 111,393 Charleston, W. Va....... 43 46 Clarksburg, W. Va----477,715 21,015 21 24 Huntington, W. Va.— 53,215 23 26,005 36 Asheville, N. C.-------6,115 69,482 35 33 Charlotte, N. C.-------109,477 94 141,001 46 Durham, N. C---------24 308,825 13 37,955 Greensboro, N. C.-----37 24,235 29,524 46 High Point, N. C.----- 9 29 44,000 6,555 Raleigh, N. C.--------24 19,342 22 53,100 Rocky Mount, N. C.— 12 8,475 6 18:265 Salisbury, N. C.-------6 13 79,060 1,725 Wilmington, N. C----22 20 24,050 34,800 Winston-Salem, N. C... 102 56.220 83 79,526 Charleston, S. C------30 35 37,773 66,573 Columbia, S. C.-------45 81,326 75 95,770 Greenville, S. C.____ 35 42 42,545 62,505 Rock Hill, S. C______ 9 12 12,435 5,164 Spartanburg, S. C-----29 15 3,795 19,940 Washington, D. C.___ 497 463 2,275,065 1,077,810 Totals ---------------- 2,852 2,968 $6,046,542 $5,663,587 Building permits issued by building inspectors in thirty-two cities in the Fifth reserve district in Septem ber totaled 2,852, with estimated valuation amounting to $6,046,542, a decrease of 3.9 per cent in number in comparison with 2,968 permits issued in September Jan.-September 1931 sales, compared with Jan.-September 1930: _ 6.2 — 4.9 .9 —12.3 — 3.5 Sept. 30, 1931, stocks, compared with stocks on Sept. 30, 1930: —12.6 —11.4 — 7.9 —13.6 —10.6 Sept. 30,1931, stocks, compared with stocks on August 31,1931: 4.2 15.2 14.1 9.6 12.9 Number of times stock was turned in September 1931: .299 .299 .324 22 29S Number of times stock was turned since January 1, 1931: 2.767 2.725 2.87 1.966 2.684 Percentage of Sept. 1, 1931, receivables collected in September: 27.2 21.9 28.0 23.4 24.6 Retail trade in the Fifth Federal reserve district in September showed a seasonal increase of approxi mately 25 per cent over the volume of business done in August, but fell 5.7 per cent below September 1930 business, according to reports from thirty-four leading department stores in the district. Total sales this year, through September 30, averaged 3.5 per cent less than sales from January 1 through September 1930, a de crease probably accounted for chiefly by price declines during the past year. Individual records of the report ing stores for the first nine months of this year show wide variations, some stores declining much more than the average and some others reporting higher figures for 1931 than for 1930. As a rule, the stores in smaller cities in which trade from farmers is relatively more important show greater declines in sales this year than the stores in the larger cities. Stocks on the shelves of the reporting stores in creased an average of 12.9 per cent during September, a seasonal rise, but on September 30 averaged 10.6 per cent less in retail selling value than stocks on hand on September 30, 1930. Part of this decrease in stocks is due to lower price levels in many lines this year. The reporting stores turned their stock .298 times in Sep tember, and since January 1 stocks have been turned an average of 2.684 times, a slightly higher figure than 2.383 times for the corresponding period last year. Collections during September in the reporting stores 7 MONTHLY REVIEW averaged 24.6 per cent of receivables outstanding on September 1, a slightly higher figure than 24.3 per cent collected in September a year ago. W holesale Trade, 64 Firms 23 9 Groceries Dry Goods 6 1 Shoes 14 Hardware 12 Drugs September 1931 sales, compared with sales in September 1930: —15.0 —17.3 — 8.1 —10.6 — 7.8 September 1931 sales, compared with sales in August 1931: 7.7 25.3 42 12.6 7.5 Jan.-Sept. 1931 sales, compared with Jan.-Sept. 1930 sales: —16.8 —22.1 — 62 —23.5 — 6.2 Sept. 30, 1931, stocks, compared with Sept. 30, 1930, stocks: —15.0(8*) —29.0(4*) —18.9(5*) —15.8(7*) _____ Sept. 30, 1931, stocks, compared with Aug. 31, 1931, stocks: 1.8(8*) — 4.5(4*) — 3.8(5*) — 2.2(7*) _____ Percentage of Sept. 1, 1931, receivables collected in September: 63.3(14*) 32.1(6*) 22.8(6*) 30.8(11*) 51.5(8*) —Denotes decrease. Wholesale trade showed a seasonal increase in Sep tember over August, but was in smaller volume in every line for which data are available than in Septem ber 1930. Cumulative sales this year since January 1 were also lower in every line reported upon than in the corresponding nine months last year. Stocks increased during September in groceries, but declined in dry goods, shoes and hardware. At the end of September 1931, stocks were smaller in all lines than a year ago. Collections in September were better than a year ago in groceries, shoes and hardware, but were slower in dry goods and drugs. Better collections in September than in August this year were shown in groceries, dry goods and hardware. (Compiled October 21, 1931) *Number of reporting firms. BUSINESS CONDITIONS IN THE UNITED STATES (Compiled by the Federal Reserve Board) Industrial production and factory employment, which usually increase at this season, showed little change from August to September, and, consequently, the Board’s seasonally adjusted indexes declined- The general level of wholesale prices also declined. Gold exports and earmarkings, together with an in crease in domestic currency demand between the middle of September and the middle of October, resulted in a large growth of reserve bank credit in use and a rise in money rates. P r o d u c tio n a n d E m p lo y m e n t Industrial production, as measured by the Board’s seasonally adjusted index, declined from 79 per cent of the 1923-1925 average in August to 76 per cent in September. Activity at steel mills decreased from 31 per cent of capacity to 28 per cent; output of automobiles was reduced substantially and lumber production continued to decline. At cotton mills pro duction increased seasonally, while activity at woolen mills and shoe factories declined contrary to the usual seasonal ten dency. Output of petroleum was smaller in September than in August, but the rate of output prevailing at the end of Sep tember was higher than at die end of August. The number employed at factories showed little change from the middle of August to the middle of September, a period when employment usually increases. In iron and steel mills, automobile factories and lumber mills, employment decreased further, contrary to the seasonal tendency; in the clothing and silk industries there were substantial increases in employment, partly of a seasonal character; in mills producing cotton goods, employment increased less than usual, and in wollen mills it de clined from recent relatively high levels. Data on value of building contracts awarded for the period between the first of August and the middle of October, as re ported by the F. W. Dodge Corporation, show a continuation of the downward movement of recent months for residential as well as for other types of construction. Estimates by the Department of Agriculture, based on Oc tober 1 conditions, indicated a cotton crop of 16,284,000 bales, the largest crop reported, except that of 1926, a total wheat crop somewhat larger than usual, and a corn crop of 2,700,000,000 bushels, 29 per cent larger than last year, and 2 per cent smaller than the five-year average. D is tr ib u tio n Freight-car loadings of merchandise and sales by department stores increased in September, but by less than the usual sea sonal amount. W h o le s a le P ric e s The general level of wholesale prices declined from 70.2 per cent of the 1926 average in August to 69.1 per cent in Sep tember, according to the Bureau of Labor Statistics. De creases in the prices of livestock, meats, hides, woolen goods, cotton and cotton goods were offset in part by increases in prices of dairy products, petroleum, and petroleum products. Further declines in the price of cotton during the first few days of Oc tober were followed by substantial increases in subsequent days. B a n k C r e d it During the four weeks following the suspension of gold payments in England on September 20, $600,000,000 of gold was withdrawn from this country’s monetary stock in the form of exports and earmarkings. Domestic demand for currency continued to increase, the growth for the month ending in the middle of October being about $400,000,000. The growth in the amount of currency outstanding, however, slowed down after the first few days in October. The demands for credit arising from gold movements and currency growth were met by member banks through the sale of acceptances to the reserve banks and by rediscounts. Volume of reserve bank credit out standing consequently increased between the week ending Sep tember 19 and the week ending October 17 by $904,000,000, and on October 17 stood at $2,169,000,000, the highest level for ten years. Gold and currency withdrawals resulted in a decrease of deposits at member banks in leading cities. Loans and invest ments of these banks also declined, reflecting reductions in loans to security brokers, as well as sales of acceptances to the re serve banks, and sales of United States securities. During this period there was a rise in short-time money rates in the open market and in yields on high grade bonds. On Oc tober 9 the Federal Reserve Bank of New York advanced its /2 discount rate from V to 2 per cent and on October 16 to 3j4 per cent. Discount rates were also advanced at the Boston, Philadelphia, Cleveland, Richmond, Chicago, St. Louis, Dallas and San Francisco reserve banks.