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MONTHLY REVIEW o f Financial and Business Conditions F ifth Federal Re s e r v e D is tr ic t Federal Reserve Bank, Richmond, Va. October 31, 1941 Summary of September Business Conditions T H E aggregate volume o f business and industry in the Fifth Federal Reserve district in September and early October expanded further, chiefly due to seasonal influences. In banking, Federal Reserve notes in actual circulation increased sharply as the demand for currency increased with the opening o f additional tobacco markets and the beginning o f the cotton marketing season. Mem ber bank reserve deposits and investments in securities rose last month, and loans to business and industry at reporting member banks advanced. The Federal Reserve Bank o f Richmond increased its holdings o f Government securities through a redistribution o f System holdings among the twelve Reserve banks. Distribution of consumer goods showed the usual sea sonal increase in September except in furniture and auto mobiles. Department store sales rose 11 per cent from August to September, and in the latter month were 19 per cent above September 1940 sales. There was a sub stantial wave o f buying of taxed items at the end o f September, especially in furs, jewelry, cosmetics, and certain light and heavy electrical household appliances. Furniture sales showed a normal decrease from August sales, in which month furniture stores run special sales, but September business was 9 per cent above that o f September last year. Wholesale trade in September in the Fifth district exceeded August 1941 trade by 10 per cent and September 1940 trade by 49 per cent. Auto- mobile sales dropped sharply from August sales and did not pick up seasonally after the introduction o f new models, partly because o f increased prices for 1942 cars and partly because o f a temporarily saturated market, many buyers having anticipated their needs for new cars by purchasing 1941 models before new taxes took effect, according to some dealers’ reports. Industrially the district worked at virtual capacity levels in September. Cotton textile mills, many o f them working on defense orders, consumed more cotton than in any previous September, and tobacco manufacturers set a new all time monthly record in the production o f cigarettes. Bituminous coal mined in September was 18 per cent above the September 1940 tonnage. Shipyards, airplane factories, rayon yarn mills, chemical industries and lumber mills continued operations at or near record levels and construction while somewhat handicapped by priorities, showed no signs o f recession. The long drought prevented planting o f fall crops and germination o f seeds, and caused deterioration o f late ma turing crops, but on the other hand was favorable for cotton picking. Tobacco prices advanced further on auc tion markets, and assured tobacco growers o f larger cash returns for a smaller crop in 1941 than they obtained from the 1940 crop. Cotton prices in September were also far above 1940 prices, but the 1941 yield o f cotton in the Fifth district is 45 per cent less than last year’s crop. BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT September 1941 Debits to individual accounts (25 cities)....... Sales, 79 department stores, 5th district....... Sales, 40 furniture stores, 5th district............. Sales, 207 wholesale firms, 5th district........... Registrations, new autos, 5th district............... $1,824,609,000 $ 17,355,089 1,601,960 $ $ 19,771,000 9,408 Tobacco sold in 5th district (Pounds)............. Average price o f tobacco, per 100 lbs............ Growers' receipts from tobacco, 5th district.. Number o f business failures, 5th district....... Liabilities in failures, 5th district..................... Value o f building permits, 29 cities............... 235,402,972 29.18 68,679,635 25 367,000 $ $ 13,876,928 Value of contracts awarded, 5th district....... Cotton consumption, 5th district (B a les)..... Cotton price, cents per lb., end of month......... Print cloths, 39 in., 80x80s, end of month....... Rayon yarn shipments, U. S. (Pounds)....... Rayon yarn stocks, U. S. (Pounds)..............„ Bituminous coal mined, U. S. (T o n s )............. Ceiling price established by O P A C S ....... Digitized for ♦ FRASER $ $ $ 77,738,000 408,449 16.99 10.75* 37,000,000 4,900,000 45,464,000 August 1941 September 1940 % Change Month Year $1,738,193,000 $ 15,699,692 $ 2,165,273 $ 17,904,000 21,412 $1,309,689,000 $ 14,535,036 1,464,228 $ $ 13,244,000 10,463 + + — + — 113,426,399 26.66 30,243,063 32 $ 377,000 $ 12,511,101 224,219,844 15.87 35,582,505 37 348,000 $ $ 12,163,781 $ 146,093,000 393,671 16.54 10.75* 37,300,000 4,200,000 45,650,000 $ +108 + 9 +127 — 22 — 3 + 11 — 47 + 4 + 3 0 — 1 + 17 — 0 $ $ $ $ 34,192,000 302,833 9.42 7.00 30,900,000 8,300,000 38,650,000 5 11 26 10 56 + + + + — 39 19 9 49 10 4“ ^ + 84 + 93 — 32 + 5 + 14 +127 + 35 + 80 + 54 + 20 — 65 + 18 2 MONTHLY REVIEW E M PLO Y M E N T BANK ING STATISTICS RESERVE BAN K STATEMENT ITEMS Fifth District 000 omitted ITEMS Oct. 15 Sept. 15 Oct. 15 1941 1941 1940 Discounts held .............................................. $ 0 $ 38 $ 40 Foreign loans on g o l d ................................ 0 9 22 Industrial advances .................................... 793 811 821 134,996______119,663______123,938 Government securities ............................. Total earning assets ............................. $135,789 $120,521 $124,821 Circulation of Fed. Res. notes................. 390,164 360,870 256,825 Members* reserve deposits ..................... 483,451 458,036 340,160 Cash reserves ................................................ 809,474 767,512 541,669 Reserve ratio ................................................ 85.11 85.78 82.08 SELECTED ITEMS— 41 REPORTING MEMBER BANKS Fifth District 000 omitted Oct. 16 Oct. 15 Sept. 10 ITEMS 1940 1941 1941 $131,961 $155,587 $161,296 Loans to business & agriculture........... 155,905 170,596 172,429 All other loans .......................................... 455,402 505,380 518,040 Investments in securities ....................... 225,268 303,481 325,689 Reserve bal. with F. R. b a n k ............... 21,758 28,845 26,593! Cash in vaults ............................................ 615,758 726,655 778,491 Demand deposits ........................................ 203,763 210,660 211,656 Time deposits .............................................. 0 0 0 Money borrowed ........................................ M UTUAL SAVINGS BANK DEPOSITS 9 Baltimore Banks Total deposits Sept. 30, 1941 Aug. 31, 1941 Sept. 30 1940 $224,490,776 $223,974,988 $222,792,230 DEBITS TO INDIVIDUAL ACCOUNTS Fifth District 000 omitted Sept. Aug. 1940 1941 Sept. 1941 CITIES Dist. of Col. Washington of Change Month Year % ......... $ 359,671 $ 347,499 $ 263,524 + Maryland Baltimore ............. Cumberland ......... Hagerstown ......... 491,249 10,643 12,164 499,706 10,351 11,833 358,270 7,967 9,044 + + 18,753 94,055 66,612 25,906 52,942 21,280 59,313 18,026 89,911 53,725 26,259 49,568 19,222 49,170 28,110 38,835 30,003 16,460 Virginia Danville ............... Lynchburg ........... Newport News . . Norfolk ................. Portsmouth ......... Richmond ............. Roanoke ............... West Virginia Charleston ........... Huntington ......... Parkersburg ........ District Totals .. 4 + 36 — 2 3 3 + 37 + 34 + 34 13,624 63,278 42,771 19,406 38,464 12,213 41,430 + + + + + + + + 38 49 56 33 38 74 43 28,067 36,448 27,496 15,527 18,487 28,092 19,348 10,255 + o + 7 + 9 + + + + 52 38 55 61 17,026 18,404 13,492 73,899 6,647 236,403 34,601 9,818 16,761 14,214 74,798 6,937 202,956 34,925 10,361 14,599 13,515 53,521 4,766 164,069 28,184 + 73 + 10 — 5 — 1 — 4 + 16 — 1 + 64 + 26 — 0 + 38 + 39 + 44 + 23 63,892 21,594 12,655 $1,824,609 61,188 21,351 12,437 $1,738,193 46,947 17,236 10,318 $1,309,689 + 4 + 1 + 2 + 36 +25 + 23 + 39 North Carolina Asheville . . . . . . . . Durham ................. Greensboro ........... Raleigh ................. Wilmington ......... Winston-Salem . . South Carolina Charleston ........... Columbia ............. Greenville ........... 4 + 5 + 24 — 1 + 7 + 11 + 21 + 6 + 5 C O M M E R C IA L FAILU RES PERIODS September August September 9 Months, 1941............... 1941............... 1940............... 1941............... Source: Dtm & Bradstreet Number of Failures District U. S. 25 32 37 307 735 954 976 9,299 10,398 Total Liabilities District U . S. $ 367,000 377,000 348,000 3,475,000 5,233,000 $ 9,393,000 11,134,000 11,397,000 106,105,000 124,088,000 The following figures, compiled for the most part by the Bureau o f Labor Statistics, show the trends o f em ployment and payrolls in the Fifth district from August to September 1941 : Percentage change from Aug. 1941 to Sept. 1941 in number in amount on payroll of payroll STATES +1.6 + 1.1 Maryland ................. Dist. of Col............... Virginia ................... West Virginia . . . . North Carolina . . . South C arolina___ District Average + 4.1 + 3.4 + 3.4 — 1.5 + 1.4 +1.1 +0.1 +1.0 +2.1 +2.2 +2.1 + 1.3 A U TO M O B ILE RE GISTRA TION S Sales o f new passenger automobiles declined sharply in September from August, and were below sales in September 1940, the first decline from the corresponding month o f the preceding year since September last year. Sales last month were the lowest for any month since October 1938. A t the opening o f September dealers had incomplete stocks o f 1941 model cars, and when 1942 models appeared the usual seasonal advance in sales failed to materialize. Some dealers report that so many buyers anticipated their needs for new cars that the 1942 models attracted* relatively little attention and increased prices met stiff resistance from the public. W ith restricted out put o f cars ordered by the Government, higher prices for cars due to increased taxes and costs o f manufacture, and a temporarily saturated market, the prospects for new car sales in the 1942 model year are not bright, and new car salesmen in many instances are trying to secure other work. Stocks o f good used cars are quite low on many dealer lots, but the demand for used cars also has declined. The following registration figures for new passenger cars were furnished by R. L. Polk & Co., o f Detroit: REGISTRATIONS OF N E W PASSENGER CARS— NUMBER Sept. 1941 STATES Maryland ........... Dist. of Col. . . . Virginia ............. West Virginia . . No. Carolina . . . So. C a rolin a___ District ........... Sept. 1940 1,572 753 2,994 1,013 1,972 1,104 1,945 1,146 2,611 1,232 2,447 1,082 9,408 10,463 % Change 9 Months 9 Months 1941 1940 19 34 15 18 19 2 48,611 26,541 62,868 28,611 55,116 30,184 36,669 20,525 41,769 23,788 38,582 20,810 — 10 251,931 182,143 — — + — — + % Change + + + + + + 33 29 51 20 43 45 + 38 CO N STR U C TIO N Building permits issued in 29 Fifth district cities in September 1941 totaling $13,876,928 showed increases o f 11 per cent over $12,511,101 in August this year and 14 per cent over $12,163,781 in September last year. Baltimore led in September 1941 permit valuation with $5,080,902, Washington was second with $3,942,950, Richmond third with $1,450,925, N orfolk fourth with $528,650, and Charlotte fifth with $325,352. The aggregate value o f September contraot awards for construction in the Fifth district is not yet available, but will exceed the September 1940 figure by a substantial margin. Figures on contract awards in August 1941, which set a Fifth district record but were not available MONTHLY REVIEW by states when the September 30 R eview went to press, were reported by the F . W . Dodge Corporation as fo llo w s: CONSTRUCTION CONTRACTS AW ARDED STATES Aug. 1941 Maryland ............................. Dist. of Col............................. Virginia .................................. West Virginia ..................... North Carolina ................... South Carolina ................... Fifth District ................. Aug. 1940 $ 20,034,000 $ 10,103,000 10,209,000 3,114,000 44,615,000 11,695,000 6,611,000 2,392,000 47,585,000 15,733,000 16,438,000_________ 4,326,000 $145,492,000 $ 47,363,000 % Change + 98 +228 +281 +176 +202 +280 +207 BITU M IN OU S C O A L M IN IN G Production o f bituminous coal continued at a very high level in September and output o f 45,464,000 net tons exceeded September 1940 output o f 38,650,000 tons by 18 per cent. On a daily basis production o f 1,819,000 tons in September 1941 exceeded August output o f 1,756,000 tons by 4 per cent. Total production this calen dar year to October 11 of 382,737,000 tons exceeded output o f 348,205,000 tons in the corresponding period last year by 10 per cent. Shipments o f coal through Hampton Roads ports to October 11 totaled 17,118,386 tons, a decline o f 3 per cent from 17,676,862 tons to the same date last year. In the Fifth district production of coal in September 1941, August 1941 and September 1940, was as follow s: Sept. 1941 West V ir g in ia ......................... Virginia .................................... Maryland .................................. 5th District ....................... United States ..................... % in District ..................... Aug. 1941 12,851,000 1,687,000 169,000 14,707,000 45,464,000 32 13,492,000 1,675,000 156,000 15,323,000 46,026,000 33 Sept. 1940 11,471,000 1,310,000 114,000 12,8j 5,UO0 39,010,000 33 C O TTO N TEX TILES Cotton textile mills were very active in September and cotton consumption o f 875,682 bales in the United States was the highest figure on record for that month of the year. Mills worked chiefly on forward orders, new busi ness being small because both buyers and manufacturers preferred to await an expected readjustment of ceiling prices to bring them more nearly into agreement with raw cotton. In secondary markets, sales o f finished cotton goods were large in September. Mill margins for 17 con structions of medium and coarse cloths averaged 19.93 cents for the first four weeks in September against 20.53 cents in August 1941 and 12.26 cents in September 1940. COTTON CONSUMPTION— FIFTH DISTRICT In bales MONTHS September 1941................... August 1941................... September 1940................... 9 Months, 9 Months, 1941................... 1940................... No. Carolina So. Carolina 224,429 164,228 211,537 163,146 164,788 124,872 1,943,074 1,487,307 1,463,664 1,157,029 A fter advancing steadily from the middle o f August to 17.74 cents per pound on September 12, spot cotton prices for middling grade, 15/1 6 inch staple, on 10 Sou thern spot markets turned downward, and by October 17 had declined to 16.16 cents per pound. The decline was due in part to an increase in prospective yield o f the 1941 crop, and in part to the refusal o f Congress to pass legis lation freezing Government owned cotton for the dura tion o f the emergency. On October 18, 1940 the average cotton price on the 10 Southern markets was 9.33 cents. ‘ The third forecast on the 1941 cotton crop, issued on October 8 by the Department o f Agriculture, raised the estimate from 10,710,000 bales as o f September 1 to 11,061,000 bales on October 1, an increase o f 351,000 bales, or 3 per cent. In the Fifth district, prospective yields increased 14,000 bales in North Carolina and 1,000 bales in Virginia, but decreased 11,000 bales in South Carolina. Production figures in Fifth district states are on page 4. COTTON CONSUMPTION AN D ON HAND— BALES Virginia 19,792 18,988 13,173 District 408,449 393,671 302,833 166,054 109,830 3,572,792 2,754,166 R A Y O N Y A R N PRO D U CTIO N Rayon Organon reports shipments o f rayon filament yarn to domestic consumers totaling 37,000,000 pounds in September 1941, a slight decline from 37,300,000 pounds shipped in the longer month of August but a substantial increase over shipments of 30,900,000 pounds in September 1940. In the first 9 months o f 1941 ship ments of 333,000,000 pounds o f yarn exceeded by 18 per cent shipments o f 283,200,000 pounds in the same period last year. Stocks o f yarn held in reserve by manu facturers rose from 4,200,000 pounds on August 31, 1941, to 4,900,000 pounds on September 30, nearly all o f the slight increase being attributable to the pool yarn set aside for Government allocation to for mer users of silk. A fter remaining generally stable since September 1939, rayon yarn prices were revised in September and early October, viscose yarns advancing 1 to 5 cents per pound, acetate yarns 3 to 5 cents, and cuprammonium yarns 2 to 5 cents. These increases are moderate not only as regards the absolute amount o f the increases but also as regards the relationship o f rayon price increases to those that have occurred in other textile fibers. For example Rayon Organon states that Sep tember 1941 rayon yarn prices were 18% below average prices in 1932, while during the same period cotton prices rose 171%, wool prices 135%, and silk prices rose 97% . The inventory o f rayon yarn held by broad weavers at the ei)d o f September 1941 totaled 23,400,000 pounds as compared with 24,900,000 pounds at the end o f August and 24,000,000 pounds on September 30, 1940. These inventory figures have declined steadily each month from a high o f 29,500,000 pounds held on June 30, 1941. C O T T O N STATISTICS SOFT COAL PRODUCTION IN TONS REGIONS 3 Fifth district states: Cotton consumed ..................... Cotton growing states: Cotton consumed ..................... Cotton on hand Sept. 30 in Consuming establishments Storage & compresses . . . . Sept. 1941 Sept. 1940 408,449 302,833 802,120 601,529 744,693 548,879 1,484,963 1,110,013 1,749,795 1,289,123 1,285,746 607,194 11,128,940 10,631,450 United States: Cotton consumed ................... 875,682 638,235 Cotton on hand Sept. 30 in Consuming establishments 1,636,521 784,116 Storage & compresses ........... 11,523,702 10,747,< Exports of cotton ........................... Aug. 1 to Sept. 30 This Year Last Year 189,215 90,555 Spindles active ................................ 22,963,944 22,281,476 ................................ 267,731 155,980 MONTHLY REVIEW 4 A U C T IO N T O B A C C O M A R K E TIN G W HOLESALE TRADE, 207 FIRMS Additional tobacco markets in North Carolina and flue-cured markets in Virginia opened in September, and sales in the Fifth district exceeded September 1940 sales by nearly 5 per cent. Prices this year are much higher than last year, the September average exceeding the Sep tember 1940 average by 84 per cent. The 1941 crop is ex pected to turn out 13 per cent below the 1940 yield, but even with this reduction the aggregate receipts received for this year’s crop should exceed 1940 receipts by 40 per cent or more. Sales in September, all o f flue-cured type Net Sales September 1941 compared with Sept. Aug. 1940 1941 LINES Automotive supplies (10) Shoes (5) ....................... Drugs & sundries (15) Dry goods (8) ............... Electrical goods (18) . Groceries (64) ............... Hardware (14) ............. Industrial supplies (8) Paper & products (10) Tobacco & products (7) Miscellaneous (48) . . . Dist. Average (207). $23.09 29.41 32.66 $29.18 28.36 41,193,905 175,372,553 7,653,386 224,219,844 276,907,401 18,740,881 197,172,013 19,490,078 235,402,972 348,829,371 $13.08 16.32 20.59 $15.87 16.34 TO B A C C O M A N U F A C T U R IN G Cigarette production in September set a new monthly record, and other tobacco products were turned out in large volume. Bureau o f Internal Revenue receipts for September indicate production o f tobacco products as follows in the United States: Smoking & chewing tobacco, pounds ............... Cigarettes, number ................. Cigars, number ....................... Snuff, pounds ........................... Sept. 1941 Aug. 1941 26,561,000 18,760,571,160 506,070,675 3,194,316 24,489,824 17,776,522,190 491,027,685 2,971,991 25,879,985 14,889,814,717 475,725,260 2,848,874 North Carolina . . . South Carolina . .. Fifth District . . Maryland ............... Department Store Trade outstanding orders and outstanding receivables in Sept. 1941 in comparison with Sept. 1940 figures: Receivables Orders Stocks Sales +20 (+ ] Richmond (5) ................... +20 (+ 5 Baltimore (10) ................. Washington (7) ............... +17 (+ i Other Cities (12) ............... + 19 ( + 22) Fifth District (79)* ........... Same stores by States: 20 22 Maryland (13) ................. + 22 ( + 23) Virginia (16) ................... + 18 ( + 2 0) W est Virginia (15) ......... + 17 ( + 19) North Carolina (16) . . . . + 35 ( + 28) South Carolina (12) . . . * Includes stores reporting sales only. + + + + + 36 34 31 26 32 + 62 + 82 + 85 + 113 + 81 + + + + + 17 15 16 15 16 (+ ) Maryland R ETAIL FURNITURE SALES Maryland Compared with Sept. 1940 Compared with 9 Months 1940 Maryland (9) ........... Dist. of Col. (7) Virginia (13) ........... North Carolina (5) . South Carolina (6) . District (40) + 15 + 21 — 3 — 22 + o + 9 + + + + + + 27 37 24 24 40 30 Individual Cities: Baltimore (9) ........... Richmond (5) ........... Washington (7) ___ + 15 — 19 + 21 + 27 + 9 + 37 ............... West Virginia North Carolina . . . South Carolina . . . Fifth District . . ............... West Virginia North Carolina . .. South Carolina . .. Fifth District .. Maryland i Change in Sales, Sept. and 9 Months of 1941 ............... West Virginia North Carolina . . . South Carolina . . . Fifth District .. Maryland N ote:— Second figure under Sales, in parentheses, compares combined sales in 9 months of 1941 with sales in first 9 months of 1940. + 5 — 21 + 9 — 5 — 9 + 5 — 0 — 11 + 2 + 1 + 2 — 3 77 46 90 44 73 103 52 108 72 91 76 72 Cotton (Bales) % Change West Virginia . . . North Carolina . . . South Carolina . . . Fifth District . . Percentage increase or decrease in sales, stocks, STATES 10 8 26 24 51 25 9 17 19 13 44 26 The drought throughout the Fifth district continued through September and the first half o f October, and late crops for the most part deteriorated further. The planting of fall crops has been delayed by hard ground, coupled with insufficient moisture to sprout seeds, and pasture grasses died so much earlier than usual that far mers were forced to begin feeding stock ahead o f the normal date. The following figures show forecasts o f production made by the Department o f Agriculture on the basis o f October 1 condition. Yield figures marked ( + ) were raised between September 1 and October l.t and those marked ( — ) were lowered. Sept. 1940 R E T A IL A N D W H O LESALE TR A D E + + + + + + + + + + + + + CROP FORECASTS Price per Cwt. 1941 1940 Producers’ Tobacco Sales, Pounds September 1941 September 1940 STATES + 7 + 12 + 13 + 4 + 28 + 8 + 4 — 2 + 4 — 3 + 10 + 10 Source: Bureau of the Census. tobacco, were as follow s: So. Carolina ......... No. C a rolin a......... Virginia ................. District Total . . Season through + 65 + 63 + 37 + 33 + 100 + 29 + 35 + 75 + 48 + 35 + 52 + 49 Ratio Sept. Stocks Sept. 30, 1941 collections to accounts compared with Sept. 30 Aug. 31 outstanding 1941 1940 Sept. 1 ............... North Carolina . . . South Carolina . .. Fifth District . . North Carolina . . . South Carolina . . . Fifth District . . Maryland ............... West V ir g in ia ----North Carolina . . . Fifth District .. (Compiled October 21, 1941) . .. Y ield Yield 1941 1940 Acreage 25,000 + 6 23,000 + — 4 530,000 + 739,000 — 2 966,000 400,000— — 3 953,000 + 1,730,000 Corn (Bushels) 16,596,000 17,535,000 — 8 — 4 33,050,000 + 36,490,000 12,626,000 + 12,852,000 — 7 — 2 47,400,000 44,733,000 — 2 22,964,000 24,304,000 — 3 135,914,000 132,636,000 + Hay (Tons) 465,000 — 550,000 + 1 0 995,000 + 1,252,000 833,000 + 2 812,000 1,021,000 + 975,000 621,000 + 539,000 + 8 3,914,000 + 4,149,000 Tobacco (Pounds) 31,920,000 + 3 29,325,000 — — 2 84,933,000 — 100,509,000 — 10 2,240,000 2,790,000 464,560,000 + 526,505,000 + 1 + 5 64,600,000 — 82,215,000 + 1 645,658,000 — 743,939,000 Irish Potatoes (Bushels) 2,294,000 — 2,898,000 + 1 6,776,000 10,412,000 0 3,630,000 3,630,000 6,885,000 + 8,720,000 + 7 2,730,000 3,192,000 + 1 22,315,000 — 28,852,000 Sweet Potatoes (Bushels) 1,400,000 — + 11 1,485,000 + 3 3,264,000 — 3,875,000 + 8 7,200,000 — 7,104,000 + 3 4,745,000 — 5,040,000 + 6 16,609,000 — 17,504,000 Peanuts (Pounds) — 6 153,750,000 — 216,000,000 — 5 269,640,000 — 371,000,000 — 30 13,650,000 23,250,000 — 7 437,040,000 — 610,250,000 Apples, Commercial (Bushels) 2,160,000 — 2,077,000 11,682,000 — 10,660,000 4,867,000 — 4,868,000 1,435,000 + 962,000 20,144,000 — 18,567,000 Yield 1930-1939 33,000 629,000 824,000 1,486,000 16,173,000 32,418,000 12,610,000 43,507,000 22,831,000 127,539,000 467,000 924,000 642,000 744,000 398,000 3,175,000 26,901,000 99,861,000 2,985,000 529,356,000 85,656,000 744,759,000 2,997,000 10,661,000 2,844,000 8,182,000 2,475,000 27,159,000 1,071,000 4,061,000 8,354,000 5,401,000 18,887,000 149,865,000 249,288,000 9,041,000 408,194,000 1,996,000 10,366,000 4,796,000 966,000 18,124,000 MONTHLY REVIEW, October 31, 1941 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) IN DUSTRIAL PRODUCTION Federal Reserve index of physical volume of production, adjusted for seasonal variation, 19351939 average=100. By months, January 1935 to September 1941. Federal Reserve indexes of value of sales and stocks, adjusted for seasonal variations, 1923-1925 average=100. By months, January 1935 to Sep tember 1941. WHOLESALE PRICES OF BASIC COMMODITIES r I. ■ — r aa f / ! V \ * TOTAL.- \ «. i "1 !iI S V j ii i\ Bureau of Labor Statistics’ indexes based on 12 foodstuffs and 16 industrial materials, August 1939=100. Thursday figures, January 3, 1935 to October 16, 1941. MEMBER BANKS IN 101 LEADING CITIES Wednesday figures, January 2, 1935 to October 8, 1941. Commercial loans, which include indus trial and agricultural loans, represent prior to May 19, 1937 so-called “ Other loans” as then re ported. Industrial activity continu ed at a high rate in Septem ber and the first h alf o f O ctober. Further advances in the output o f defen se products w ere accom pa nied by curtailm ent in som e lines o f civilian goods, particu larly autom obiles, rubber, and silk. P rices o f industrial products increased fu rth er but agricu l tural prices declined a fter the m iddle o f Septem ber, and on O ctober 16 dropped sharply in response to international developm ents. PR O D U C TIO N Industrial output increased by about the usual seasonal am ount in Septem ber and the B oard's adjusted index rem ained at 160 per cent o f the 1935-1939 average, the same as in July and A ugust. C ontinued increases in activity w ere reported in the m achinery, aircra ft, and shipbuilding industries. A t steel mills activity in Septem ber and the first h alf o f O ctober was m aintained at about 97 per cen t o f capacity. O utput and deliveries o f n on ferrou s m etals likew ise re m ained at about capacity levels, w hile lum ber produ ction declined som ewhat fro m the high A ugust rate. A u tom obile produ ction increased less than seasonaJly in Septem ber, follow in g the ch angeover to new m odels, and, accordin g to prelim inary estimates, output in Septem ber w as considerably below the m axi mum quota that had been authorized by the G overnm ent. In the textile industry a ctivity declined som ew hat in Septem ber, reflectin g m ainly a fu rth er sharp reduction at silk mills. A ctiv ity at w ool mills rose to a new high level, while at cotton mills there was little change fro m a rate slightly below the peak reached last M ay. Shoe produ ction continued in large volum e, and output o f m anu factu red fo o d products was m aintained near the peak A u gust level. O utput o f chem icals likewise continued at earlier high rates, but at rubber plants activity was considerably below the level o f last summ er ow ing to cu r tailm ent program s ordered by the G overnm ent. Coal production, w hich during the summ er m onths had been unusually large, increased less than seasonally in Septem ber, ow in g in part to tem porary w ork stoppages at som e bitum inous and anthracite mines. Crude petroleum p rod u c tion advanced to record levels in Septem ber and the first h alf o f O ctober, and output o f m etals and shipm ents o f iron ore dow n the Lakes continu ed at ab ou t capacity. V alu e o f construction con tra ct aw ards declined in Septem ber, a ccord in g to figures o f the F. W . D odge C orporation, reflectin g ch iefly decreases in aw ards fo r public p rojects w hich had been ex ception ally large in A u gust. A w ards fo r private residential building also declined, w hile contracts f o r other private w ork increased som ewhat fu rther. T otal awards in Septem ber, as in A u gust, w ere 80 per cent larger than in the correspon din g period last year. This higher level reflected m ainly a greater am ount o f public construction , w hich w as n early three tim es as large as a year ago, com pared w ith an increase o f abou t 10 per cent fo r private construction. On O ctober 9, the Supply P riorities and A lloca tion s B oard announced that, effective im m ediately, no pu blic or private con stru ction p r o je c ts w hich use critical m aterials could be started during the em erg en cy unless these p rojects w ere either necessary f o r d irect national defen se or essential to the health and sa fety o f the nation. D IS T R IB U T IO N D istribution o f general m erchandise show ed less than the custom ary sea sonal rise in Septem ber, fo llo w in g an unusually large volum e o f sales in A u gust. D uring the past three m onths sales have been larger than in the correspon din g period o f any previous year. In the first h a lf o f O ctober sales at departm en t stores declined from the peak reached in late Septem ber w hen there w ere c o n siderable consum er purchases, particu larly o f articles sub je t to higher taxes on O ctober 1. L oadings o f revenue freig h t in Septem ber increased less than seasonally, particularly those o f m iscellaneous freig h t, w hich have been high in recen t m onths, and loadings o f coal, w hich w ere curtailed during part o f the m onth by w ork stoppages at som e mines. Shipm ents o f fo r e s t products declined con siderably fr o m the high A u gust level. C O M M O D ITY P R IC E S P rices o f industrial products continued to advance in Septem ber and the first h alf o f O ctober and F ederal price ceilings w ere announced fo r additional com m odities, including leading types o f lum ber, coke, w astepaper, paperboard, acetic acid, alcohols, and carded cotton yarns. In som e cases these ceilings w ere below previously existing m arket quotations. P rice advances w ere perm itted, how ever, f o r some other com m odities under F ederal control. Prices o f cotton and o f food stu ffs increased fu rth er in the first h alf o f Septem ber, but subse quently declined, ow ing partly to seasonal influences. On Thursday, O ctober 16, prices o f these com m odities dropped sharply. B A N K C R E D IT Com m ercial loans at m em ber banks continued to rise during Septem ber and the first h alf o f O ctober, reflectin g in part defen se dem ands. Increases w ere substantial both in N ew Y ork and in oth er leadin g cities. H oldings o f U nited States G overnm ent obligations decreased, m ainly at banks in leadin g cities ou t side o f N ew Y ork. E xcess reserves o f m em ber banks show ed little change in this period. U N ITED S T A T E S G O V E R N M E N T S E C U R IT Y M A R K E T F ollow in g a slight decline in the first h alf o f Septem ber, prices o f lon g term Treasu ry partially tax-exem pt bonds increased during the la tter h alf o f Septem ber and in the first part o f O ctober. The yield on the 2 - % per cen t bonds o f 1960-65 reached a new record low o f 2.01 per cen t in O ctober. Prices o f taxable bonds m oved w ithin a relatively narrow range du rin g the period w ith yields slightly above previous low levels.