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MONTHLY REVIEW o f Financial and Business Conditions _ F ifth Federal \ Richmond® - o if va. ..... ' 4 ~ Reserve D ist 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.
@FedFRASER