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MONTHLY REVIEW
o f Financial and Business Conditions

_

F ifth
Federal

\

Richmond® - o if

va.

..... ' 4

~

Reserve
Dist r ic t

Federal Reserve Bank, Richmond, Va.
D ISCOUNTS at the Federal Reserve Bank of Rich­
mond rose slightly between the middle of September
and the middle of October, and on the latter date were
approximately four times as large as a year earlier. Fed­
eral Reserve note circulation continued a seasonal rise
last month as crop marketing and the beginning of Fall
trade created a demand for more money in the hands of
the public, and withdrawals of currency by member banks
lowered their reserves at the Reserve bank. The cash
reserves of the Federal Reserve Bank of Richmond rose
materially during the past month. Regularly reporting
member banks in leading cities showed a seasonal expan­
sion in loans on their statement, and there was also a con­
siderable rise in demand deposits, but the banks reduced
their holdings of securities and also lowered their reserve
balances at the Reserve bank. Cash in vaults increased,
as Fall needs for additional currency developed. Debits
to individual accounts figures in 24 Fifth district cities
rose 5.9 per cent in September in comparison with August,
reflecting increased business activity in many lines, and
also exceeded September 1936 debits by 8.6 per cent.
Trade in September normally shows a marked increase
over the volume of business done in August, and this year
developments appear to have been up to seasonal levels.
There was not much net change in employment during the
past month, some employers who are especially active in
the Fall taking on workers while others who are adversely
affected by inclement weather reduced the number of per­
sons on their payrolls or cut down hours of work. Com­
mercial failures were relatively more numerous and lia­
bilities were higher in the Fifth district in September than
in the United States as a whole, but the record of the
month was not a bad one. Registrations of new automo­
biles in the district declined from August figures, due to
the pending introduction of new models, but exceeded
the number of cars registered in September 1936 in all
sections of the district except the District of Columbia.
Construction activity held up well for this season of the
year, although it showed some recession from the mid­
summer level. The estimated valuation of building permits
issued in 31 Fifth district cities in September 1937 was 15.1




October 31, 1937
per cent higher than September 1936 valuation, and con­
tracts actually awarded last month exceeded those awarded
in the corresponding month last year by 35.3 per cent.
Coal production increased sharply in September over that
of August, a seasonal development, but also exceeded Sep­
tember 1936 production by 3.8 per cent. Textile mills in
the district did not share in last month’s upturn, although
cotton consumption in Virginia and the Carolinas increased
slightly. Mills are not receiving many forward orders at
present, in the face of very weak cotton prices, and a
considerable part of last month’s output went into storage.
Cotton prices declined between the middle of September
and the middle of October, and the Department of Agri­
culture’s forecast of 17,573,000 bales for this year’s crop,
released October 8 , was the second largest on record.
Prospects for the cotton crop in the Fifth district im­
proved somewhat last month, but much less than the im­
provement for the Nation. Tobacco production in the
district is considerably larger this year than last, and
prices are slightly better also. The tobacco growers, there­
fore, occupy a very favorable economic position this Fall,
but unless and until cotton farmers secure subsidy pay­
ments from the Government they are in a weaker position
than a year ago. Tobacco manufacturing continued in
September at a level higher than a year ago. Retail trade
as reflected in department store sales increased seasonally
in September over sales in August, and ran approximately
10 per cent ahead of sales in September 1936, while whole­
sale trade in four of five reporting lines was also in larger
volume last month than a year earlier. Favorable weather
for harvesting increased prospects for 1937 agricultural
yields last month.
There follows a summary of conditions described above:
September
1937
Debits to individual accounts (24
cities ............................................ $1,272,240,000
30
No. of business failures, 5th ^district
347,000
Liabilities in failures, 5th district.. $
Sales, 49 dept, stores, 5th district.. . $ 10,090,385
6,464,058
Sales, 54 wholesale firms in 5 lines. $
16,693
Registrations, new passenger autos.
7,891,998
Value bldg. permits (31 Cities)----- $
$ 27,475,800
Value of contracts awarded, 5th dist.
297,279
Cotton consumption, 5th dist. (Bales)
38,620,000
Soft coal mined, U. S. (Tons............

September
1936
$1,171,276,000
28
$
289,000
$
9,168,420
$
6,163,770
16,061
$
6,857,223
$ 20,309,600
297,042
37,192,000

Change
+

7.1

+ 20.1

+ 10.1
+ 4.9
+ 3.9
+ 15.1
+ 35.3

+ -I
+

3.8-

MONTHLY REVIEW

2

BA N K IN G CONDITIONS
B a n k S ta te m e n t : Discounts for member
banks registered a small increase between September 15
and October 15, and on the latter date were 316 per cent
higher than discounts on October 15 last year. On the
other hand, holdings of open market paper and industrial
advances both declined last month, but not sufficiently to
balance the increase in discounts. Total earning assets
therefore showed a small net rise between September 15
and October 15. Federal Reserve note circulation in­
creased seasonally last month, and withdrawals in cur­
rency reduced member bank reserves, but by much less
than the rise in circulation. Cash reserves o f the Federal
Reserve Bank of Richmond rose materially during the
month, and there was also a small rise in the ratio o f re­
serves to note and deposit liabilities combined.
R eserve

000 omitted
Oct. 15
Sept. 15
1937
1937

ITEMS
Discounts held ............................................
Open market paper . , ...............................
Industrial advances ...................................
Total earning assets...............................
Circulation of Fed. Res. notes ...............
Cash reserves ..............................................
Reserve ratio ..............................................

s
;

769
109
2,435
133,035
55136,348
212,734
220,486
334,486
72.02

$

677
120
2,481
133,035
$136,313
203,779
221,413
322,600 '
71.20

Oct. 15
1936
$

185
121
3,418
125,510
$129,234
201,480
210,150
303,788
70.98

S t a t e m e n t o f 41 R e p o r t i n g M e m b e r B a n k s :
Regularly reporting member banks in 12 leading cities of the
Fifth Reserve district increased loans and discounts by
$3,276,000 between September 15 and October 13 this
year, and also built up cash in vaults by $3,442,000, but
their investments in securities dropped by $8,009,000 and
their reserve balances were drawn down by $7,975,000.
Demand deposits registered a gain of $16,344,000 during
the month, while time deposits declined by $248,000.
ITEMS
Loans & discounts ................... ............... .
Investments in securities ........
Reserve bal. with F. R. Bank . .................
Cash in vaults ........................... ...............
Demand deposits ....................... .................
Time deposits .............................
Money borrowed .......................

Oct. 13
1937
$250,207
366,845
127,976
20,499
478,746

000 omitted
Sept. 15
1937

Oct. 14
1936

$246,931
374,854
135,951
17,057
462,402
197,560
0

$213,267
448,054
138,366
19,403
452,492
197,587
0

I n d iv id u a l A c c o u n t s :
September trade is
normally larger in volume than trade in August, and this
rise in business activity was reflected in debits to individual
accounts in 24 Fifth district cities last month, September
debits increasing $70,717,000, or 5.9 per cent, over those
of August. Last month also made a better record than
September 1936 by $100,964,000, or 8.6 per cent. All
cities reported higher figures for September than for
August except Newport News, Roanoke and Huntington,
and all except Newport News reported higher figures for
September 1937 than for September 1936. Debits in
Newport News are influenced materially by activity in
ship building.
D e b it s to




Sept.
1937

CITIES
Maryland
Baltimore ............
Cumberland ........
Hagerstown ........
Dist. of Col.
Washington ........
Virginia
Danville ..............
Lynchburg ..........
Newport News ..
Norfolk ...............
Portsmouth ........
Richmond ............
Roanoke ..............
West Virginia
Charleston ..........
Huntington ........
North Carolina
Asheville ............
Charlotte ............
Durham ..............
Greensboro ..........
Wilmington ........
Winston-Salem ..
South Carolina
Charleston ..........
Columbia ............
Greenville ..........
Spartanburg ___
District, 24 Cities

000 omitted
Aug.
Sept.
1936
1937

% of Change
Year
Month

+
-6
+
-1
+ 2.7

+ 6.5
+ 10.1
+ 6.4

231,097

+

+

8,518
13,939
8,638
47,073
3,701
159,849
27,286

6,860
14,572
8,890
42,757
3,815
166,339
25,709

+ 11.0
+ 9.6
— 4.6
+ 1.6
+ 5.9
+ 16.0
— 2.2

+ 37.8
+ 4.8
— 7.3
+ 11.9
+ 2.7
+ 11.5
+ 3.8

51,346
17,427

50,858
17,788

41,952
17,080

+ 1.0
— 2.0

+ 22.4
+ 2.0

13,946
60,432
43,176
17,957
35,471
12,505
42,728

13,897
55,715
37,106
16,948
31,174
11,496
39,584

12,133
54,305
38,099
15,894
27,901
10,702
36,712

+
.4
+ 8.5
+ 16.4
+ 6.0
+ 13.8
+ 8.8
+ 7.9

+
+
+
+
+
+
+

20,147
32,372
21,335
9,644
$1,272,240

16,259
23,718
18,042
8,446
$1,201,523

19,463
26,054
20,287
8,005
$1,171,276

+
+
+
+
+

+ 3.5
+24.2
+ 5.2
+20.5
+ 8.6

$ 346,830
9,546
8,934

$ 344,857
9,533
8,700

$ 325,579
8,677
8,394

231,540

228,398

9,453
15,271
8,241
47,833
3.919
185,495
26,692

1.4

23.9
36.5
18.3
14.2
5.9

.2

14.9
11.3
13.3
13.0
27.1
16.8
16.4

M u t u a l S a vin g B a n k D e p o s i t s :
Ten mutual savings
banks in Baltimore had deposits totaling $217,676,535 on
September 30, 1937, an increase o f two-tenths o f 1 per
cent over $217,294,470 on deposit on August 31, 1937,
and 3.6 per cent above $210,180,830 on September 30,
1936. Aggregate deposits in the ten reporting banks on
September 30, 1937, reached a new record level.

B U SIN E SS CONDITIONS
E m ploym ent:
Changes in employment in September
and early October were seasonal in character, and prob­
ably offset each other. Construction work declined mod­
erately, as is usually the case as winter approaches, but
opening of additional tobacco markets called for more
helpers, coal production increased and swelled pay envel­
opes of miners, and certain harvesting jobs, especially
apple and cotton picking, created a need for qualified
workers. The textile industry has begun to curtail opierations, but not enough yet to affect labor in the mills
very seriously. The following figures, compiled by the
Bureau of Labor Statistics from records submitted by a
large number of identical industries, show the trends of
employment and payrolls in the Fifth district from July
to August 1937, the latest available figures:

STATES
.....................
D. of Columbia ............................. .....................
.....................
.....................
North Carolina ............................. .....................
South Carolina ............................. .....................

Percentage change from
July to Aug. 1937
In number
In amouot
on payroll
of payroll
+ 2.7
+
.6
— 1.7
— .8
+ 3.3
+
.5
+ 6.9
+
-3
+ 2.4
+ 1 .2
+
-3
+
.2

C o o m m e r c ia l F a il u r e s :
The record of business fail­
ures in the Fifth district in September was poorer than
the record in the United States as a whole. According
to Dun & Bradstreei figures, failures in the district last
month increased 7.1 per cent in comparison with insol­
vencies in September last year, while the Nation showed a
decline of 3.8 per cent. In aggregate liabilities involved
in bankruptcies, September 1937 increased 20.1 per cent

MONTHLY REVIEW

in the district but decreased 14.5 per cent in the United
States.
Number of failures
PERIOD
District U. S.
September 1937................. ......... 30
564
August
1937................. ......... 26
707
September 1936........................... 28
586

Total Liabilities
District
U. S.
$ 347,000
$ 8,393,000
182,000
11,916,000
289,000
9,819,000

9 Months, 1937................... ........ 356
9 Months, 1936................... ........ 364

$3,093,000
5,830,000

6,531
7,194

$ 82,890,000
115,167,000

A utomobile N ew Car R egistrations :
Automobile
factories shifted over to new models during September,
and buyers began waiting for the 1938 cars to come out.
Registrations of new cars consequently declined seasonally
from August figures, but in all geographical divisions o f
the Fifth district except the District o f Columbia regis­
trations last month exceeded those o f September 1936.
Registrations in the district o f the three most popular
makes made up 68.1 per cent o f all registrations in Sep­
tember this year, compared with 74.3 per cent in Sep­
tember last year. The following figures were collected
by R. L . Polk & Company, o f D etroit:
STATES
Maryland ..........
D. of Col.............
Virginia ............
West Va..............
No. Carolina . . .
So. Carolina___
District ........

Sept.
1937
2,879
1,549
3,921
2,340
4,038
1,966
16,693

Sept.
% 9 Months 9 Months
1936Change
1937
1936
2,743+ 5.0
37,917
1,857— 16.6
23,583
3,675+ 6.7
41,366
2,318+
-9
30,183
3,576+12.9
42,943
1,892+ 3.9
22,499
16,061
+ 3.9 198,491

34,250
26,039
39,559
30,329
36,172
18,212
184,561

%

Change
+10.7
— 9.4
+ 4.6
— .5
+18.7
+23.5
+ 7.5

C o n s t r u c t i o n : There were 2,996 building permits is­
sued in 31 Fifth district cities in September, an increase
of 5.5 per cent over 2,840 permits issued in September
1936, and in the more important matter of estimated
valuation the September 1937 total of $7,891,998 exceed­
ed the September 1936 total of $6,857,223 by 15.1 per
cent. Twenty-one of the 31 cities reported higher valu­
ation figures last month.
Contract award figures for August, now available by
States in F. W. Dodge Corporation reports, show an in­
crease in the Fifth district of 3.9 per cent over awards
in August 1936. Contract awards, which include rural
as well as urban projects, are a better measure of con­
struction activity than building permits:
Construction Contracts Awarded
STATES
Maryland ...................................
D. of Col......................................
Virginia .....................................
West Virginia .......................
North Carolina . ........................
South Carolina .........................
District .................................

August 1937

August 1936

$ 8,922,200
4,230,200
8,624,300
1,649,200
4,166,400
2,018,500
$29,610,800

$ 4,491,800
3,340,700
3,382,700
1,874,700
8,096,500
7,300,500
$28,486,900

% Change

+ 98.6
+ 26.6
+155.0
— 12.0
— 48.5
— 72.4
+
3^

C o a l M i n i n g : In September 1937, bituminous coal pro­
duction in the United States* totaled 38,620,000 net tons,
an increase of 3.8 per cent over 37,192,000 tons mined in
September 1936, and total output this calendar year to
October of 326,627,000 tons was 7.8 per cent larger
than 303,114,000 tons dug in the corresponding period
last year. Hampton Roads ports shipped 16,659,633 tons
between January 1 and October 9 this year, an increase of
13.1 per cent over 14,723,889 tons shipped to October 9
last year. Official figures by States for August production
in tons this year and last are now available from reports
of the National Bituminous Coal Commission:




Soft Coal Production in Tons Percentage
August 1937 August 1936
Change
10,033,000
9,401,000
+ 6.7
1,160,000
930,000
+24.7
124,000________ 130,000______ — 4.6
11,317,000
10,461,000
+ 8.2
33,984,000
33,086,000
+ 2.7

STATES
West Virginia .........................
Virginia ...................................
Maryland .................................
5th District .........................
United States ......................

C o t t o n T e x t i l e s : The demand for cotton textile prod­
ucts declined sharply in the past two months. Few new
orders are being booked, and a considerable number of
cancellations have occurred of orders placed earlier in the
season. The mills postponed reduction of operating time
as long as possible and stored surplus output during Sep­
tember, but unless demand for goods improves materially
in the near future it will become necessary to restrict
operations. The dearth of orders is a result of prospects
for a near record cotton yield this year, which buyers of
textile products believe will bring lower prices for all
cotton goods later in the season. Consumption of cotton
by States in the district in September 1937, August 1937,
and September 1936, in bales, is shown below:
MONTHS

Registration of New Passenger Cars

3

No. Carolina So. Carolina Virginia

District

September, 1937...........................
August
1937...........................
September 1936...........................

152,295
149,928
163,498

129,095
123,763
119,014

15,889
16,150
14,530

297,279
289,841
297,042

9 Months, 1937...........................
9 Months, 1936...........................

1,507,683
1,326,032

1,160,558
1,000,004

136,656
124,758

2,804,897
2,450,794

Figures on spindle activity in August were released by
the Bureau of the Census on September 21. There were
26,923,712 spindles in place in American mills on August
31, of which Fifth district mills had 12,388,324 spindles.
Actual spindle hours of operation in August totaled 8,184,561,738 hours in the United States, South Carolina rank­
ing first with 2,287,743,965 hours and North Carolina
second with 1,789,716,090 hours. South Carolina also
led in actual hours of operation per spindle in place with
402, compared with the National average of 304, and
Virginia was in third place with 331 hours. North Caro­
lina with an average of 296 hours per spindle was below
the National average.
C otton :
Spot cotton prices on ten Southern markets
continued downward from the middle of September
through the first week in October, and averaged 7.68 cents
per pound for middling grade on October 8 . However,
at this price farmers began to hold cotton off the market,
and the average price rose to 8.24 cents on October 15,
the latest date for which official figures are available. The
Government plan to lend 9 cents per pound on middling
grade cotton has probably modified the decline which
would have resulted from the latest estimate of production.
On October 8 , the Department of Agriculture issued a
forecast of 17,573,000 bales for this year’s crop, an in­
crease of 1,475,000 bales over the September 8 estimate,
and an increase of 5,174,000 bales, or 41.7 per cent, over
12.399.000 bales picked in 1936. The increase between
September 8 and October 8 was the largest for any single
month on record. In the Fifth district, prospects remained
unchanged during the past month in Virginia, but im­
proved moderately in the Carolinas. The Virginia fore­
cast of 40,000 bales is 21 per cent above last year's
yield, North Carolina with 695,000 bales is up 16.4 per
cent, and South Carolina with 875,000 bales is 7.2 per
cent higher than in 1936. The district total production of
1.610.000 bales is 11.3 per cent above the 1936 crop,
compared with the National increase of 41.7 per cent.

4

MONTHLY REVIEW
Cotton Consumed and On Hand
(Bales)
Sept.
Sept.
1937
1936

Fifth district states:
Cotton consumed ...................
Cotton growing states:
Cotton consumed ...................
Cotton on hand Sept. 30 in
Consuming establishments .
Storage & compresses . . . .

A G R IC U LT U R A L CONDITIONS
Aug. 1 to Sept. 30
This Year Last Year

297,279

297,042

587,120

568,522

511,838

526,319

1,017,287

1,007,187

803,787
6,864,291

702,132
6,615,806

United States:
Cotton consumed ...................
601,837
Cotton on hand Sept. 30 in
Consuming establishments .
991,224
Storage & compresses . . . . = 6,926,365
Exports of cotton .........................
617,444

...
....

....
....

629,767

1,206,217

1,204,781

848,431
6,652,334
569,624

...
..........
837,859

....
..........
752,111

M a r k e t in g :
Markets in the Carolinas were
open during September, and Virginia Old Belt markets
wjere open one day at the end of the month. All Sep­
tember sales were of flue-cured tobacco, ancf poundage
and price figures were as follows:
T obacco

Producer’s Tobacco Sales, Pounds Price Per Hundred
September 1937 September 1936
1937
1936

STATES
South Carolina..........
North Carolina . ------Virginia
.................

46,186,607
182,529,449
3,174,110

37,412,147
130,484,376
.........

$19.31
22.33
26.01

$2,0.28
21.91

Cotton (Bales)

Markets in Virginia did not open until October in 1936
and there were: no September sales in that year.
T obacco M a n u f a c t u r in g :
The Bureau of Internal
Revenue reports tobacco products manufactured in Sep­
tember 1937 and 1936 as follows:
Sept. 1937
Smoking & Chewing
Tobacco, Pounds .............
Cigarettes, Number ............. . Cigars, Number ....................
Snuff, Pounds .......................
R e t a il

T rade

in

D epartment

Net Sales
Sept. 1937
comp, with
September
1936
Baltimore (8)
Washington (6)
Other Cities (14)
District (28) .

+ 13.3
+ 5.7
+ 12.1
+ 9.4

Same stores by
States with 21
stores added:
Virginia (11)..
West Va. ( 7 ) ...
No. Carolina (6)
So. Carolina (10)
District (49 )..

+
+
+
+
+

W holesale

l in e s

Groceries (20).
Dry Goods (7)
Shoes (6) . . . .
Hardware (10)
Drugs (11) . . .

26,317,580
14,853,803,420
498,835,303
3,279,023

17.5
14.0
8.7
16.5
10.1

T rade,

Sept. 1936

9c Change

26,862,561
14,341,883,483
489,293,034
3,233,843

—

2.0

+ 3.6
2.0
+ 1.4

+

Stores:

Net Sales
Stocks
Jan. 1 to date
Sept. 30, 1937
compared with compared with
same period Sept. 30 Aug. 31
last year
1936
1937
+ 8.5
+ 5.7 + 9.0
+ 1.6
+ 6.4 + 10.6
+ 10.4 + 6.7
+ 8.1
+ 5.2
+ 6.8 + 9.2

Ratio Sept.
collections
to accounts
outstanding
September 1
27.9
23.6
27.4
25.6

+ 9.2
+ 6.1
+ 9.4
+ 13.2
+ 5.6

54

F ir m s :

+

Note: All figures in Retail & Wholesale tables represent percentage
changes except the collection ratios. Number of reporting firms shown in
parentheses.




1936

40,000
695,000+
875,000 +
17,573,000+

1928-1932

33,000
597.000
816.000
12,399,000

45,000
752.000
856.000
14,667,000

18.396.000
30.014.000
11.569.000
43.475.000
23.635.000
1,529,327,000

14.431.000
30.388.000
11.054.000
38.415.000
20.240.000
2,554,772,000

Corn (Bushels)
Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina
United States

18,060,000
37.350.000
14.256.000
44.194.000
25.017.000 +
2,561,936,000 +

Irish Potatoes (Bushels)
Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina .
United States

3.304.000 —
10,998,000 +
3.360.000
9.384.000 +
2.875.000
398,785,000 —

2.940.000
7.380.000
1.920.000
5.986.000
1.656.000
329,997,000

3.339.000
14,328,000
3.445.000
7.540.000
2.748.000
372,115,000

Sweet Potatoes (Bushels)
Maryland ..........
Virginia ............
North Carolina
South Carolina
United States

1,280,000 —
4.875.000
8.670.000
4.860.000
75,058,000 +

1,200,000
4.366.000
7.560.000
4.845.000
64,144,000

1.299.000
4.270.000
7.141.000
4.648.000
66,368,000

29.600.000
96.734.000
1,282,000
457,373,000
73.350.000
1,158,083,000

24.318.000
98.409.000
4,224,000
469,135,000
75.918.000
1,42J7,174,000

327.000
605.000
508.000
680.000
442,000
63,309,000

448.000
868.000
639.000
571.000
255.000
70,146,000

2.014.000
8.500.000
4.395.000
1.890.000
117,506,000

2.067.000
13,116,000
6.837.000
3.199.000
164,355,000

151.200.000
243.960.000
8,160,000
1,300,540,000

148.324.000
223.450.000
8,760,000
946.231.000

Tobacco (Pounds)
Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina .
United States

24,850,000
104.384.000 +
2,465,000
573.275.000 +
106.400.000 41,474,683,000 +
Hay (Tons)

+

+

1937
Virginia ............
North Carolina .
South Carolina .
United States

Maryland ..........
Virginia ............
West Virginia .
North Carolina .
South Carolina
United States

Net Sales
Net Sales
Stocks
Ratio Sept.
Sept. 1937
Jan. 1 to date
Sept. 30, 1937 collections
comp, with compared with compared with to accounts
Sept.
Aug same period Sept. 30 Aug. 31 outstanding
1936
1937
last year
1936
1937 September 1
8.2 + 7.4
+ 11.5
+ 13.4 — 1.7
126.0
+ 4.1 +2,1.5
+ 62.0 — 16.6
+ 4.7
38.5
— 4.3 — 6.0
+ 9.8
+ 52.4 — 12.4
51.8
+13.3
10,6
22.6
+ 13.3 — .7
43.7
11.0 + 12.5
+ 13.1
+ 5.7 + 3.8
79.4

+

C rop C o n d it io n s a n d E s t i m a t e s :
The weather con­
tinued favorable for crop development during September,
and on the whole prospects improved during the month
in the Fifth district. The Maryland estimate for apples
rose in September, but prospects for Irish potatoes and
sweet potatoes declined. In Virginia, Irish potatoes, to­
bacco, hay and peanuts improved. North Carolina esti­
mates for cotton, Irish potatoes, tobacco and apples rose
in September, and so did South Carolina estimates for
cotton, corn, tobacco and hay. South Carolina’s tobacco
crop this year is the largest on record, and is also the most
valuable crop ever raised in that State. Returns from
live stock in Virginia, West Virginia and North Carolina
will be much higher this year than in 1936, there being
about the same number of cattle and hogs for market at
prices about 40 per cent higher for cattle and 20 per cent
higher for hogs.
Forecasts of probable production in the Fifth Reserve
district and the United States this year, based on October
1 condition figures, are shown herewith in comparison
with yields in 1936 and the five-year period 1928-1932:

520.000
1,202,000 +
754.000
796.000
506.000 +
74,576,000 —
Apples (Bushels)

Maryland ..........
Virginia ............
West Virginia .
North Carolina .
United States

3.042.000 +
18,000,000
9.760.000
4.505.000 +
206,716,000 +
Peanuts (Pounds)

Virginia .................
North Carolina . . .
South Carolina . . .
United States . . .

165,025,000 +
243,000,000
8,400,000
1,270,150,000+

Note: Estimates marked ( + ) were raised last month, those marked
( — ) were lowered, and others remained unchanged from September 1 to
October 1.

(Compiled October 21, 1937)

MONTHLY REVIEW, October 31, 1937

FEDERAL RESERVE BANK OF RICHMOND

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

IN DU STRIAL PRODUCTION

Declines in industrial production in September and the first part of Oc­
tober reduced output to the level o f a year ago, and commodity prices continued
to decline. The volume of distribution to consumers was maintained at the
level of previous months.
PRODUCTION AND EMPLOYMENT

Index of physical volume of production, ad­
justed for seasonal variation, 1923-1925 averager100. By months, January 1929 to September 1937.

DEPARTMENT STORE SALES

Indexes of value of sales, 1923-1925 averages
By months, January 1929 to September 1937.

100.

WHOLESALE

PR IC E S

Volume of industrial production, as measured by the Board's seasonally
adjusted index, declined in September to 111 per cent of the 1923-1925 average
as compared with 114 in June and July and 117 in August. At steel mills,
where output in August had been at a high level, partly on the basis of orders
placed earlier in the year, activity was reduced to an average rate of 75 per
cent of capacity in September. This decline continued in October, as new
orders were in limited volume, and the rate of steel output in the fourth week
of the month is estimated at about 52 per cent of capacity. There were also
declines in September in activity at woolen mills, shoe factories, and at sugar
refineries, and activity at cotton mills showed little change, although an in­
crease is usual at this season. Increases in output were reported at silk mills
and meat packing establishments where activity recently had been at a low
level. Automobile production showed a decline from the high level of August,
but in the first three weeks of October advanced sharply as most manufacturers
began assembling 1938 models.
Mineral output increased in September, reflecting an expansion in coal
production. Output of crude petroleum declined somewhat but continued in
large volume.
Value o f construction contracts awarded, as reported by the F. W. Dodge
Corporation, was smaller in September and the first half of October than in
the preceding six weeks, with a moderate decline in private residential building
and sharp declines in awards of other private work and for publicly financed
work. Currently the dollar volume of private work is about the same as a year
ago, while awards for public work are in smaller volume.
Factory employment showed little change from August to September, al­
though an increase is usual at this season. There were declines in the number
employed at textile mills, shoe factories, railroad repair shops, and lumber
mills. At canning establishments employment increased seasonally. Factory
payrolls, which usually expand in September, declined substantially, reflecting
principaly a reduction in the average number of hours worked by those em­
ployed. The levels of employment and payrolls continued to be considerably
above last year.
DISTRIBUTION

Distribution of commodities to consumers by department stores and mail
order houses increased more than seasonally in September, and variety store
sales showed about the usual seasonal expansion. Freight-car loadings increased
by the usual seasonal amount from August to September.
COMMODITY PRICES

Indexes compiled by the United States Bureau
of Labor Statistics, 1928=100.
By weeks, 1932
to October 16, 1937.

M EM BER BANK LOANS AND INVESTMENTS

The general level of wholesale commodity prices, according to the Bureau
of Labor Statistics’ index, declined from 87.5 per cent of the 1926 average in
the latter part of September to 85.2 in the middle of October. During that
period price declines occurred in most commodities traded in on organized
exchanges and in some manufactured products. In the ten days ending October
25 commodity markets were steadier. New models of automobiles are currently
being introduced at higher prices.
BANK CREDIT

Excess reserves of member banks, after increasing in September from
$750,000,000 to over $1,000,000,000, showed little further change in October.
Total loans and investments of reporting member banks in 101 leading
cities declined somewhat in the four weeks ending October 20, reflecting chiefly
a steady reduction throughout the period in loans to security brokers and deal­
ers. Commercial loans increased further.
MONEY RATES AND SECURITY PRICES
Wednesday figures for reporting member banks
in 101 leading cities. September 5, 1934, to Oc­
tober 20, 1937. Loans on real estate and loans
to banks excluded.




Rates on* 9-month Treasury bills in October declined to about % of 1 per
cent, the lowest since last January. Prices o f high-grade bonds showed little
change in September and October, while prices of lower-grade bonds and o f
common stocks declined sharply to the lowest levels since the middle of 1935.

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