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MONTHLY REVIEW BUSINESS AND AGRICULTURAL CONDITIONS __________ W ILLIAM W. HOXTOIM CHAIRMAN AND FEDERAL RESERVE AGENT__________________ RICHMOND, VIRGINIA DISTRICT SUMMARY.— Business in the Fifth reserve district in August and early Sep tember was good in some lines and slow in others, but on the whole the volume of trade compared favorably with the seasonal average. Increased rediscounts at the Federal reserve bank and an increase in the circulation of Fed eral reserve notes during the past month indicate that fall trade opened up normally. Employment is slightly smaller than a year ago. Coal produc tion in the Fifth district continues very large. Textile mills are operating full time on a volume of forward orders sufficient to run them several months, in sharp contrast to the hand to mouth operations in 1926. Official crop estimates are on the whole favorable, cotton and fruit showing the only material declines in yields from last year, and in the Fifth district the increase in cotton prices will more than compensate for the decreased production this year. This year’s to bacco crop of the district bids fair to be more re munerative than last year’s profitable crop. Wholesale trade in August was in larger volume than in August last year in all lines reported upon except furniture, and all lines showed a healthy seasonal increase over Ju ly business. R e tail trade last month, as reflected in department store sales, exceeded the trade of Ju ly by ap proxim ately 10 per cent and was 4 per cent above that of August a year ago. Finally, debits to individual accounts in leading trade centers were larger during the five weeks ended Septem ber 14th than debits in the same cities during the corresponding five weeks of 1926. Statistics on construction work reveal the only serious weakness in the business situation in the Fifth district. Total valuation for all permits issued in twenty-nine leading cities of the dis trict was nearly 50 per cent less in August than in August a year ago, and this decline is felt in labor circles, by dealers in all kinds of building materials, and in retail trade as a result of the lower purchasing power of workers in building trades. August was the eleventh consecutive month during which the valuation of building permits was below that of the corresponding month of the preceding year. SEPTEMBER 30, 1927 RESERVE BANK OPERATIONS.— Seasonal demand for funds incident to tobacco and cotton m arketing brought about an increase in redis counts at the reserve bank between the middle of August and the middle of September this year. Rediscounts for member banks held by the F ed eral Reserve Bank of Richmond rose from $20,923,000 on August 15th to $26,837,000 on Sep tember 15th. The volume of Federal reserve notes in circulation turned upward during the past month, rising from $59,379,000 on August 15th to $63,296,000 on September 15th. Total bill holdings of the Federal Reserve Bank of Richmond, including bankers acceptances pur chased from member banks and in the open m ar ket, rose from $29,548,000 to $47,241,000. Mem ber bank reserve deposits rose from $70,119,000 on August 15th to $75,249,000 on September 15th. The several changes in the items enumerated re duced the cash reserves of the Federal Reserve Bank of Richmond from $88,713,000 at the mid dle of August to $82,794,000 at the middle of September, and lowered the ratio of cash re serves to note and deposit liabilities combined from 67.02 per cent last month to 59.42 per cent this month. The Fifth District was using a much smaller volume of reserve bank credit on September 15th this year than on September 15th last year, but the total earning assets of the Federal R e serve Bank of Richmond were higher on the 1927 date, due to increases in acceptances and Government securities purchased in the open market for the B ank’s investment account. R e discounts for member banks held by the Rich mond reserve bank declined during the year from $46,014,000 to $26,837,000, and Federal re serve notes in actual circulation dropped from $76,099,000 to $63,296,000. On the other hand, total earning assets of the Federal Reserve Bank of Richmond, including acceptances and Govern ment securities purchased and rediscounts for member banks, rose from $64,365,000 on Sep tember 15, 1926, to $71,614,000 on September 15, 1927. The cash reserves of the Richmond bank dropped from $90,499,000 to $82,794,000 during the year, and the ratio of cash reserves to note and deposit liabilities combined fell from 62.57 per cent to 59.42 per cent during the same period. Member banks increased their reserve deposits at the reserve bank from $67,873,000 at the mid dle of September last year to $75,249,000 on Sep tember 15, 1927. CONDITION OF SIXTY-SEVEN REPORTING MEMBER BANKS IN SELECTED CITIES ITEMS Sept. 14, 1927 Total Loans and Discounts (including all rediscounts) ...................................... ............ Total Investments in Bonds and Securities.. Reserve Balance with Federal Reserve Bank .......................................................... Cash in Vaults.................................................. Demand Deposits .............................................. Time Deposits .................................................... Borrowed from Federal Reserve Bank....... Aug. 10, 1927 Sept. 15, 1926 $528,853,000 162.765.000 $531,568,000 158.164.000 $520,485,000 140.049.000 44.288.000 13.725.000 397.788.000 236.414.000 9,012,000 44.648.000 13.328.000 402.460.000 235.443.000 2,991,000 41.766.000 14.061.000 381.731.000 209.232.000 22.247.000 The accompanying table shows the principal items of condition of sixty-seven regularly report ing member banks as of three dates, September 14th, 1927, August 10, 1927, and September 15, 1926, thus affording an opportunity for comparing the latest available figures with those of the preceding month this year and the corresponding month last year. It should be understood that the figures shown in the table reflect conditions as of the report dates only, and are not necessarily the highest or lowest figures that occurred during the interval between^ the dates. An examination of the figures reported for August 10th and September 14th, both this year, show a slight decline in accommodations extended to customers of the reporting banks. Total loans and discounts by the reporting banks declined $2,715,000 during the month. On the other hand, the sixty-seven banks increased their investments in. stocks and bonds by $4,601,000. Cash reserves of the reporting banks at the reserve bank declined $360,000 between August 10th and September 14th, but cash in vaults rose $397,000 during the same period. Demand deposits declined $4,672,000 last month, but time deposits rose $971,000. The changes enumerated in the statement made it neces sary for the reporting banks to use reserve bank credit in increased volume, and the reporting banks consequently increased their borrowing at the Federal Reserve Bank of Richmond by $6,021,000 be tween August 10th and September 14th. Between September 15, 1926, and September 14, 1927, all items except two in the statement in creased. Total loans and discounts for customers rose $8,368,000 during the year, and investment in bonds and securities increased by $22,716,000. A ggregate reserve balance at the reserve bank rose $2,522,000 during the year under review, but cash in vaults declined $336,000. Total deposits increased $43,249,000 between September 15th last year and September 14th this year, demand deposits gaining $16,057,000 and time deposits $27,182,000. The gain in deposits during the year provided for the ex pansion in loans to customers and the increase in investments, and also enabled the reporting banks to reduce their rediscounts at the reserve bank by $13,235,000, during the year. DEBITS TO INDIVIDUAL ACCOUNTS TOTAL DEBITS DURING THE FOUR WEEKS ENDED CITIES September 14, 1927 Asheville, N. G................................................... Baltimore, Md..................................................... Charleston, S. C................................................. Charleston, W. Va............................................. Charlotte, N. C.................................................. Columbia, S. C..................................................... Cumberland, Md................................................. Danville, Va........................................................ Durham, N. C..................................................... Greensboro, N. C............................................... Greenville, S. C.............. .................................... Hagerstown, Md...... .......................................... Huntington, W. Va........................................... Lynchburg, Va.................................................... Newport News, Va............................................. Norfolk, Va......................................................... Raleigh, N. C....................................................... Richmond, Va....................................................... Roanoke, Va........................................................ Spartanburg, S. C.............................................. Washington, D. C............................................... Wilmington, N. C............................................... Winston-Salem, N. C...................... .................. $ District Totals .................................................. $1,427,175,000 34,983,000 451,819,000 28.983.000 42.293.000 57.847.000 25.004.000 10.237.000 10.910.000 41.174.000 24.703.000 26.985.000 11.779.000 25.876.000 19.945.000 10.544.000 72,904,000 21,570,000 159,502,000 31,666,000 14,156,000 242,241,000 18.533.000 43.521.000 August 10, 1927 $ 34,764,000 493,814,000 28.140.000 46.822.000 58.216.000 24.331.000 11.786.000 9,911,000 34.761.000 26.632.000 23.112.000 11.969.000 29.614.000 21.905.000 10.524.000 84,307,000 28,945,000 145,094,000 33,104,000 14,276,000 274,584,000 18.578.000 49.392.000 $1,514,581,000 September 15, 1926 $ 41,205,000 428,391,000 29.941.000 39.535.000 53.176.000 20.536.000 9.637.000 8.334.000 34.327.000 27.517.000 20.459.000 11.808.000 28.133.000 20.280.000 12,507,000 79,532,000 22,184,000 151,963,000 31,671,000 13,252,000 236,745,000 20.858.000 40.114.000 $1,382,105,000 The accompanying table shows the total of debits to individual, firm and corporation accounts in 2 the leading trade centers of the Fifth Federal reserve district for three equal periods of five weeks, ended September 14 and August 10, 1927, and September 15, 1926. The figures for the latest available five weeks period, ended September 14th, may be compared with those reported for the preceding five weeks ended August 10th this year and with those for the corresponding five weeks ended September 15, 1926. The period ended September 14th this' year contained one business day less than the period ended August 10th, the Labor Day holiday occurring on September 5th. A ggregate debits of $1,427,175,000 in the reporting banks during the five weeks ended September 14th show about the usual decline under the total of $1,514,581,000 reported for the like period ended August 10th. Fifteen cities reported lower figures during the later five weeks, compared with eight cities reporting higher figures. Among the four largest cities Richmond banks reported higher debits in the past five weeks, but Baltimore, W ashington and Norfolk banks reported decreases. A consid erable part of the decline was of course due to the shorter period covered, the Labor Day holiday reducing the actual number of business days during the more recent period by 3 1/3 per cent. Debits totaling $1,427,175,000 during the five weeks ended September 14th this year exceeded the total of $1,382,105,000 reported for the corresponding period ended September 15, 1926, by $45,070,000. Tw elve cities reported higher figures and eleven reported lower figures this year. Among the larger centers, Baltimore, Richmond, Washington and Charlotte reported increased figures during the 1927 period, but Norfolk reported a decline this year. SAVINGS DEPOSITS —Total deposits in thirteen mutual savings banks in Baltimore at the end of August this year amounted to $168,271,415, compared with $167,669,978 on deposit at the end of Ju ly this year and $155,133,987 at the end of August 1926. The increase last month was contrary to the seasonal movement of deposits,. wrhich declined in August during ea,ch of the preceding four years. On September 14th this year, sixty-seven ^regularly reporting member banks in leading cities of the Fifth district had time deposits aggregating $236,414,000, compared with $235,443,000 on August 10, 1927, and $209,232,000 on September 15, 1926. BUSINESS FAILURES —As was expected, the business m ortality in the United States declined again during August in both number of failures and liabilities involved, according to Dun’s Review of September 3rd. Commenting on the insolvency record, Dun‘s said, “ Fo r five consecutive months, commercial failures have declined in number, with the total reported for August being 1,708. This is 2.7 per cent under the number for Ju ly, and marks the low point for the year to date. Comparing with the 2,465 defaults of last January, the high level for the year, a falling off of 30.7 per cent is shown. The present total is 7.2 per cent above the 1,593 insolvencies of August 1926, but this is a better exhibit than was made in Ju ly of the current year, when the increase over the failures of the corresponding period of last year was 9 1 / 3 per cent. The record of August liabilities is the best, with the exception of that of June and May, of any month this year, an aggregate of $39,195,953 be ing reported. L ast month's indebtedness shows a contraction of 9.2 per cent under the Ju ly total, but the aggregate for last month was 39 per cent above the $28,129,660 of August 1926, one insol vency in the brokerage class contributing largely to the rise in last month’s liabilities.” In the Fifth reserve district, August failures numbered 143, compared with 114 in Ju ly this year and 107 in August 1926. Liabilities last month totaled $2,155,805, compared with $4,065,583 in Ju ly 1927 and $1,433,713 in August 1926. LABOR —The labor situation in the Fifth reserve district varies considerably in different locali ties. Reports indicate a rather acute situation in Baltimore, and there appears to be a large number of idle workers in most of the other cities of the district. There is a difference of opinion as to the ex tent of unemployment at the present time, but construction work is under w ay in considerably less volume than a year ago and a considerable number of both skilled and unskilled workmen in the build ing trades are unable to find steady employment. There are also a number of industrial plants op erating part time or closed entirely, such as the American Locomotive W orks in Richmond and sev eral railroad shops in the district. W orkers in building material plants are mostly employed on a part time basis. On the other hand, textile workers, tobacco factory hands and coal miners are fully employed. On the whole, while there is undoubtedly a larger number of idle workers in the district than at any other time during the past three or four years, the situation is not serious except in scat tered localities. A large volume of building is still under way, and prospects at present suggest a probability that unemployment will not spread beyond seasonal limits during the next few months. COAL —According to the estimate of the Bureau of Mines, Department of Commerce, bitumi nous coal output in the United States in August totaled 41,705,000 net tons, compared with 33,637,000 tons mined in Ju ly. In spite of the bituminous strike which began on April 1st, August production this year was only 10 per cent under 46,352,000 net tons dug in August 1926, when the British coal strike was stimulating American mining. Total output during the calendar year 1927 to September 10th amounts to 365,454,000 net tons, compared with 372,959,000 tons mined during the corresponding pe riod in 1926 and 332,345,000 tons in 1925. In the Fifth district, W est Virginia is leading the country in production wTith around three and a quarter million tons weekly, and Virginia mines are producing better than a quarter of a million tons each week. Retail coal yards are busy filling orders, but coal 3 in all sizes and quantity is immediately available. Prices have been practically stationary since the first advances of the fall season went into effect six weeks or two months ago, and present retail quotations are low in comparison with prices of other strike years. TEXTILES —Textile products have advanced in price during recent weeks, in keeping with cot ton quotations, and unfilled orders at the middle of September are reported higher than a month earlier. Some uncertainty has developed in the trade because of recent fluctuations in cotton prices, but textile mills continue full time operations. Fifth district mills consumed 261,638 bales of cotton in August, compared with 239,653 bales used in Ju ly this year and 205,019 bales in August last year. Last month the North Carolina mills consumed 137,502 bales, South Carolina mills 112 ,119 bales, and Virginia mills 12,017 bales, higher figures in each case than those reported for Ju ly 1927 or August 1926. The improvement in the textile industry this year in comparison with the same period last year is probably more marked than any other business development during the year. A t this time in 1926 mills wrere operating part time only, and forward orders were exceedingly difficult to secure, but at present mills are running full time and most of them have orders in sufficient volume to carry them well into the winter. The change in conditions developed as crop reports continued to indicate a considerably reduced cotton crop: this year. BUILDING OPERATIONS FOR THE MONTHS OF AUGUST 1927 AND 1926. Permits Issued New CITIES z 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 1927 Baltimore, Md...... Cumberland, Md... Frederick, Md...... Hagerstown, Md... Danville Va.......... Lynchburg, Va..... Norfolk, Va........... Petersburg, Va..... Richmond, Va....... Roanoke, V a ........ Bluefield, W. Va... Charleston, W. Va. Clarksburg, W. Va Huntington, W.V a. Parkersburg,W.V a Asheville, N. C..... Charlotte, N. C— Durham, N. C ...... Greensboro, N. C. High Point, N. C... Raleigh, N. C........ Salisbury, N. C..... Wilmington, N. C. Winston-Salem, N. C. Charleston, S. C ... Columbia, S. C...... Greenville, S. C.... Spartanburg, S. C. Washington, D. C. New Construction Alterations Repairs 1926 1927 1926 1926 1927 1927 1926 444 23 4 33 15 29 66 6 103 65 17 54 20 45 15 33 65 51 72 46 27 10 8 131 6 16 9 29 203 501 28 4 19 9 30 56 5 92 86 13 18 17 60 21 54 42 20 51 62 48 10 8 94 22 17 12 25 338 1,577 8 1 12 15 39 67 5 73 46 6 19 16 4 10 56 14 :4 47 10 11 6 7 84 21 51 39 13 473 1,278 $ 1,354,900 $ 5,624,880 10 77,323 56,827 3 3,930 9,895 108,450 135,265 7 13 40,715 717,841 30 254,468 66,170 65 190,435 78,985 8 26,500 25,440 64 1,149,212 441,365 33 205,745 1,054,237 6 20,190 107,554 16 217,970 64,030 17 22,860 37,650 1 132,940 270,484 :;6 33,975 130,500 46 297,700 347,955 20 663,365 683,110 13 170,775 117,340 37 186,414 221,711 7 178,075 269,515 12 120,925 223,795 3 57,000 f-22,625 11 15,000 ‘ 17,100 38 672,877 566,865 31 55,815 £14,570 37 75,600 43,350 36 79,500 88,550 25 108,270 69,900 477 3,156,125 8,549,640 $ 626,400 $ 1,471,800 5,255 10,975 1,400 1,690 22,000 1,065 3,641 732,726 83,565 20,297 52,540 26,388 2,300 13,390 82,911 83,490 23,696 9,570 5,887 6,065 206,535 24,800 4,900 4,965 1,500 2,400 8,100 2,050 21,005 75,270 27,920 12,723 f 4,950 21,725 43,465 59,480 14,050 7,275 6,725 156,525 2,100 115,200 16,100 10,800 27,476 65,650 7,145 11,470 11,250 12,440 28,465 18,190 5,040 18,215 440,815 422,435 Totals........... 1,645 1,762 2,734 2,350 $ 9,712,351 $1,974,144 $20,021,852 Increase or Per Cent Decrease of of Increase 0 Total or 2 Valuation Decrease $—5,115,380 14,776 — 6,255 — 5,880 — 1,406,211 251,566 137,602 — 10,030 707,268 — 834,366 — 87,542 335,675 — 14,855 — 136,644 — 90,475 4,010 — 34,942 536,660 ^19,282 — |98,215 [46,930 "47,475 z 3,200 "67,838 .36,920 *33,440 — 19,325 *25,195 — 5,375,135 — 72.1% 21.8 — 54.0 — 4.3 — 96.9 290.9 130.6 — 25.8 134.8 — 78.4 — 77.0 377.9 — 34.9 — 50.2 — 68.3 1.1 — 4.9 26.4 7.8 — 34.6 20.4 192.0 11.5 10.7 141.8 61.2 —116.5 28.6 —\,59.9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 $3,132,061 —$11,467,418 — 49.5% — Denotes decrease. NOTE— The figures in the above table reflect the amount of work provided for in the corporation limits of the several cities, but take no account of suburban developments. Building permits issued in twenty-nine leading Fifth district cities in August exceeded those issued in Ju ly this year in both number and valuation, but fell below those issued in August 1926. Perm its issued last month totaling 1,645 f ° r new construction compared with 1,604 issued in Ju ly 1927 and 1,762 issued in August 1926. Valuation figures for new work totaled $9,712,351 in August 1927, compared with $9,052,010 in Ju ly this year and $20,021,852 in August a year ago. For alteration or repair work, 2,734 permits issued last month exceeded 2,287 permits issued in Ju ly and 2,350 issued in August 1926. Valuation figures for alteration or repair work totaled $1,974,144 last month, an in crease over $1,4 15,18 5 reported for Ju ly but a decrease from $3,132,061 reported in August a year ago. Combined valuation figures for all classes of work totaled $11,686,495 in August, an increase of 11.6 per cent over $10,467,195 reported for Ju ly, but a decrease of 49.5 per cent under $23,153,913 re ported for August 1926. Increases in total valuation of more than 100 per cent in comparison with August 1926 figures were reported last month by Lynchburg, Norfolk, Richmond, Charleston, W. Va., Salisbury and Charleston, S. C. Some of these increases were due to unusually small 1926 fig 4 ures, however, rather than to high totals this year. L arge decreases in valuation estimates were reported in August for Baltimore, Danville, Roanoke and Washington. Building contracts awarded in the Fifth district in August totaled $31,813,073, including both ur ban and rural construction. Of this amount, $11,387,158 was for residential work, according to sta tistics collected by F. W. Dodge Corporation. COTTON — Stimulated by further indications of a relatively small cotton crop this year, cotton prices continued to advance during the past month. In our Remew a month ago we quoted the average price paid for upland middling cotton in the Carolinas during the week ended August 13th as 18.44 cents per pound. During the weeks ended August 20, August 27, and September 3rd, prices averaged 18.97 cents, 20.49 cents, and 21.85 cents, respectively. On September 8th, the Department of A gricul ture’s second condition report of this season lowered the estimate of probable production more than the trade had expected, and prices advanced sharply again, averaging 22.56 cents per pound for the week ended September 10th. During the following week, ended September 17th, the average price dropped to 21.41 cents. Since Ju ly 1st prices have risen approximately 5.5 cents per pound, and since Jan u ary 1st a rise of nearly 10 cents has occurred. The second condition report of this year, issued by the Department of Agriculture on Sep tember 8th, reduced the August 8th estimate by 800,000 bales. The probable yield for this year was set at 12,692,000 bales, compared with a forecast of 13,492,000 bales made a month earlier and a final production of 17,977,374 bales in 1926. In all important cotton states the weevil is the dominat ing factor in the situation. Propagation of this pest has been accelerated by wet weather over much of the belt. Infestation has increased m aterially in all infested areas, and the area where weevils are prevalent extended northward m aterially during August. The Bureau of the Census ginning report to September 1st showed 1,540,025 running bales ginned prior to that date this year, compared with 696,556 bales ginned to the same date in 1926 and 1,886,399 bales ginned before September 1st in 1925. The crop was very late last year, which doubtless accounts for the increase in this season’s ginnings to date. Cotton consumption in American mills in August totaled 633,434 bales, according to the report of the Bureau of the Census made public on September 14th. This figure shows a substantial increase over 569,250 bales consumed in Ju ly this year, and a large gain over 500,553 bales consumed in A u g ust 1926. Cotton on hand at manufacturing establishments on August 31st this year totaled 1,122,059 bales, compared with 1,404,358 bales held on Ju ly 3 1st this year and 916,786 bales held on August 3 1st last year. Bales in public warehouses and compresses numbered 2,172,945 at the end of August, 1,822,671 bales at the end of Ju ly, and 1,715,371 bales on August 31, 1926. Exports of cotton totaled 340,311 bales in August, compared with 389,358 bales sent abroad in Ju ly this year and 391,295 bales in August 1926. Imports last month totaled 28,041 bales, compared with 13,279 bales imported in A u g ust 1926. Consumption of cotton in the grow ing states totaled 464,198 bales in August, compared with 359,494 bales used in August last year. Last month’s consumption in the cotton grow ing states amounted to 73.28 per cent of National consumption, compared with 71.82 per cent of National con sumption used in the cotton growing states in August last year. During August and early September prospects for cotton declined in the Fifth District. The Department of Agriculture, in its report based on September 1st conditions, estimated South Caro lina’s probable yield this year as 784,000 bales, compared with 1,008,000 bales ginned in 1926. W ee vils damaged the crop extensively in southern and eastern counties and through the middle section of the state. In an area comprising about nine or ten northwestern counties wreevil damage is negli gible and this section will likely make the best crop since 1924. On the other hand, the remainder of the state as a whole will have the shortest crop since 1924. North Carolina’s 1927 production is expected to be 911,000 bales, compared with 1,212,819 bales raised1 last year. The crop has been more extensively damaged by weevils this year than in any previous year, and very few of the late squares and bolls will mature. Virginia is expected to raise 37,000 bales of cotton this year, compared with 51,000 bales in 1926, most of the decline being due to acreage reduction which followed the low price secured for the 1926 crop. The weevil has done practically no damage in Virginia. The cotton crop is late in the state, and there is considerable danger from early frosts. TOBACCO — SO UTH C A R O LIN A tobacco, with a September 1st condition of 79, indicates a crop of 75,151,000 pounds, compared with 57,510,000 pounds last year and a five year average of 60,600,000 pounds. Tobacco prices in South Carolina averaged above 20 cents in August, and present indications are that this yea r’s crop will sell for considerably more money than the 1926 crop. NO RTH C A R O LIN A tobacco m arkets in the South Carolina belt opened in August and sold 21,886,060 pounds for growers, at an average price of $22.36 per: hundred pounds. This compares with 9,983,519 pounds of producers’ tobacco sold at an average of $24.78 per hundred on the same markets in August 1926. V IR G IN IA is expected to produce 133,585,000 pounds of tobacco this year, but the markets will not open until October. Flue-cured, or Bright, tobacco is curing well, with unusually good color. L ate tobacco has improved and will make a good crop. There is considerable complaint of leaf spot and wild fire, especially in the fire-cured, or Dark, district. 5 AGRICULTURAL NOTES — M A R Y L A N D agricultural prospects improved slightly during A u g ust, the average condition for all crops rising 1.3 per cent above the August 1st condition and equaling the ten year average on September 1st. M aryland’s wheat yield this year totaled 9,275,000 bushels, in comparison with 11,960,000 bushels in 1926. This yea r’s corn condition on September 1st indicated a probable yield of 17,905,000 bushels in comparison with 22,049,000 bushels in 1926. Tobacco pros pects are for a yield of 26,957,000 pounds, against 28,800,000 pounds raised last year. The 1927 apple crop of 1,583,000 bushels is about half of last year’s crop, and the expected production of 315,000 bush els of peaches is also far below the yield of the previous year. Oats are better than a year ago, a crop of 1,754,000 bushels comparing with 1,706,000 bushels in 1926, and Irish potatoes also show an im provement this year, a crop of 4,705,000 bushels comparing with 3,690,000 bushels dug in 1926. This year’s hay crop of 721,000 tons is much above the 516,000 ton crop of last year. V IR G IN IA crops improved during August and the composite condition of all crops on September 1st was 2.1 per cent above the ten year average, according to the Virginia Crop Reporting Service. The weather was generally favorable for farm work, but in some sections frequent rains interfered with plowing and harvesting the hay crop. The corn crop improved in all parts of the state except the northern and western districts. There was too much rain during the latter part of August and there is some complaint of unfilled ears. The September 1st condition indicates a production of 45,054.000 bushels, compared with 46,585,000 bushels last year. The oat crop turned out poorly, as the heads were not well filled. Total production is estimated to be 4,095,000 bushels, compared with 4.836.000 bushels last year. This yea r’s production of Irish potatoes in Virginia will be very large, owing to the unusually heavy yield of the early crop. During August the condition of the late crop de clined on account of heavy rains. The yield of early potatoes in the commercial sections w as more than 200 bushels per acre and the shipments were the largest on record. The total production of Irish potatoes for the state is estimated to be 22,532,000 bushels, compared with 11,658,000 bushels last year. The sweet potato crop declined during August as the result of heavy rains. There is a large growth of vines but there are few potatoes in the hills. The forecast on September 1st was 5.057.000 bushels, compared with 5,375,000 bushels last year. There will be a large supply of hay on farms throughout Virginia this year. Total production is estimated to be 1,369,000 tons, compared with 1,092,000 tons last year. The condition of pastures improved during August except in the north ern district. / In the southwest, which is the principal grazing section, pastures are unusually good and excellent fall grazing seems assured. The peanut crop is poor, owing to a bad stand and the lateness of the crop. Based upon the September 1st condition of the crop, the forecast of production is 121,970,000 pounds, compared with 131,100,000 pounds in 1926. The Virginia commercial apple crop improved slightly during August, and the September 1st forecast of 1,176,000 barrels showed an in crease of 61,000 barrels over the August 1st forecast, but was far below the 1926 crop of 3,700,000 barrels. SO UTH C A R O LIN A crop prospects declined during August, the composite figure for all crops on September 1st being 94.1 per cent of the ten year average. However, most of this decline is due to the 18 point drop (from 66 to 48) in the condition of cotton, and prospects are still good to excellent for yields on all crops except cotton. Corn suffered somewhat from drought in places up-state and the condition of 75 per cent is 2 points below that of August 1st, but still 1 point above the ten-year average condition. Prospective production from this condition is 23,688,000 bushels, as compared with 22.103.000 bushels last year. The condition of sweet potatoes indicates a crop of 5,178,000 bushels, compared with 4,160,000 bushels last year. The state has the best crop of cowpeas in years, and the outlook for hay is also the best in years. A yield of 291,000 tons of hay is expected, compared with 202.000 tons cured in 1926. Peanut prospects are for a crop of about 10,767,000 pounds, which com pares with 6,500,000 pounds last year. Most of this increase is due to a 50 per cent increase in pea nut acreage this year. The most important tree fruits are considerably short of last year’s excellent crops. Peaches are estimated at 615,000 bushels, compared with 1,054,000 bushels last year, and ap ples are estimated at 363,000 bushels, compared with 647,000 bushels last year. _______________________ WHOLESALE TRADE, AUGUST 1927______________________________ Percentage increase in August 1927 sales, compared with sales in August 1926: 3k Groceries 12 D ry Goods 5 Shoes 16 Hardware 5 Furniture 13 Drugs .4 6.3 15.6 6.9 — 2.4 5.5 Percentage increase in August 1927 sales, compared with sales in July 1927: 6.1 65.4 91.9 16.9 39.3 10.8 Percentage increase in total sales since Jan. 1, 1927, compared with sales in the first eight months of 1926: — 5.6 — .005 3.9 4.5 — 4.7 — 1.4 Percentage increase in stock on August 31, 1927, compared with stock on August 31, 1926: .7(12*) 1.2(4*) — 3.2(4*) — 6.3(8*) Percentage increase in stock on August 31, 1927, compared with stock on July 31, 1927: — .5(12*) — 5.3(4*) — 10.9(4*) — .03(8*) Percentage of collections in August to total accounts receivable on August 1, 1927: 64.3(20*) 28.9(8*)* 24.2(5*) 32.6(12*) 26.2(3*) 58.0(8*) * Number of reporting firms. — Denotes decreased percentage. 6 Wholesale trade in August improved seasonally over the business of Ju ly, all lines included in the reports to the Federal R eserve Bank of Richmond showing larger sales during the later month. A u g ust sales in groceries, dry goods, shoes, hardware and dri^gs also exceeded August 1926 sales, but furniture sales last month were lower than in 1926. Total sales during this calendar year to Sep tember 1st, however, were below total sales during the first eight months of 1926 in all lines reported upon except shoes and hardware. Stocks decreased in August in all lines reported upon, but at the end of the month grocery and dry goods stocks were larged than on August 31, 1926, while shoe and hardware stocks were lower. Contrary to seasonal expectations, collections in groceries, dry goods and hardware improved dur ing August in comparison with Ju ly, while collections in shoes, furniture and drugs followed seasonal trends and slowed up moderately. FIGURES ON RETAIL TRADE _____________ As hdicated By Reports fromThnrty RepreseBtathre Department Stores for the Month of August 1927 Percentage increase in August 1927 sales, compared with sales in August 1926: Baltimore Richmond Washington Other Cities District — .6 10.0 6.8 6.9 4.0 Percentage increase in total sales since January 1st, over sales during the first eight months of 1926: — 3.8 3.6 — 1.5 — .5 — 1.9 Percentage increase in August 1927 sales over average August sales during the three years 1923-1925, inclusive: 10.9 26.2 ‘ 26.1 15.8 18.1 Percentage increase in stock on hand August 31, 1927, over stock on August 31, 1926: — 3.1 .07 1.8 5.2 — .04 Percentage increase in stock on hand August 31, 1927, over stock on July 31, 1927: — 2.4 2.4 .7 2.4 — .3 Percentage of sales in August 1927 to average stock carried during that month: 21.9 24.2 24.4 21.0 22.9 Percentage of total sales since January 1st to average stock carried during each of the eight elapsed months: 193.6 209.5 209.7 166.7 197.7 Percentage of outstanding orders on August 31st to total purchases of goods in 1926: 7.5 7.3 8.4 7.9 7.5 Percentage of collections in August 1927 to total accounts receivable on August 1st: 21.2 26^0____________________ 27JL____________________ 290____________________ 2 i 2 _______ — Denotes decreased percentage. Confidential reports from 30 leading department stores scattered throughout the Fifth reserve district showed average sales in August 4.0 per cent above sales in August 1926, and 18.1 per cent above average August sales during the three years 1923-1925, inclusive. Sales last month were slightly more than 10 per cent greater than Ju ly sales, indicating the usual beginning of fall trade toward the end of August. Total sales during the eight elapsed months of 1927 fell 1.9 per cent below the vol ume of sales during the corresponding eight months of 1926. Stocks of merchandise on the shelves of the reporting stores declined four-hundredths of 1 per cent between August 31st last year and this, and between Ju ly 3 1st and August 31st, both this year, stocks dropped three-tenths of 1 per cent. Both of these declines were due to decreases in B alti more, the other cities showing larger stocks on August 3 1st this year than on either Ju ly 31, 1927, or August 31, 1926. The rate of stock turnover during August w as slightly higher than in either Ju ly this year or August last year, the percentage of sales during the month to average stocks carried totaling 22.9 per cent in August, compared with 20.3 per cent in Ju ly this year and 22.1 per cent in August a year ago. Cumulative sales since the first of the year amounted to 197.7 per cent of average monthly stocks carried during the eight elapsed months, indicating an annual turnover rate of 2.966 times. The rate of turnover during the first eight months of 1926 was 3.009 times. Collections in August averaged 24.2 per cent of receivables outstanding on August 1st, a slightly smaller.percentage than 25.0 per cent of receivables collected in Ju ly this year and 24.4 per cent col lected in August X926. (Compiled September 20, 1927) 7 BUSINESS CONDITIONS IN THE UNITED STATES. (Compiled by the Federal Reserve Board) 1923 192A- ___ 1925 ___ 1926 ___ 1927 Index numbers of production at manufactures and minerals, adjusted for seasonal variations (1923-25 average : 1 00 ). Latest figures, August, manufactures 106, minerals 106. WHOLESALE PRICES i A // Commodities m.m.m Agricultural — Non-Agricuituro/ 1923 _1 192^ 1925 1926 ■vJlOQ 1927 Indexes of United States Bureau of Labor Statistics (1913 * 1 00 ). Latest figures, August, all commodities 144.5, non-agricultural commodities 144 .2, agricultural commodities 1 44 .4. PER CENT PERCENT 150T 150 A — A Payrolls A VA /*'*V Employment FACTCDRY EMPLOYMENT AhID PAY ROL.LS 1 1 Federal Reserve Board’ s indexes of factory employment and payrolls, (1919 * 1 00 ). Latest figures, August employment 91.2, payrolls 1 04 .4. 1925 1926 1927 Monthly averages of weekly figures for banks in 101 leading cities. Latest figures are averages for first three weekly report dates in August. Industrial production increased in August, reflecting a growth in the output o f mines, and the distribution o f commodities, both at wholesale and at retail, increased by more than the usual seasonal amount. The general level o f wholesale commodity prices rose about one per cent, owing chiefly to advances in the prices o f farm products. PRODUCTION. Production o f anthracite and bituminous coal, which showed a considerable decline earlier in the season, increased sharply in August and the early weeks o f September, and this rise was reflected in an advance in,the Board’s index o f mineral output from 98 per cent o f the 1923-1925 average in July, to 106 per cent in August. The index o f manufactures as a whole showed practi cally no change fo r the month. The iron and steel industry con tinued during August and September with little change in demand or in production, and the output o f newsprint, lumber, and cement showed only customary seasonal changes in August. Consumptiono f cotton remained unusually large fo r this season o f the year, and there was an increase in the production o f automobiles, which, however, remained below the output o f August o f last year. Output o f shoes and rubber tires increased from July to August by less than the customary seasonal amount. Factory employment was in practically the same volume in August as in July, and both employ ment and production were smaller than a year ago. The volume o f building contracts awarded in August was smaller than in August, 1926, which was a month o f unusually large awards. The largest decreases, as compared with last year, were in the Boston, New York, and Chicago Federal reserve districts. In the first half o f September awards were in practically the same volume as in the corresponding period o f last year. The Department of Agriculture’s estimate o f corn production on the basis o f September 1 condition was 2,457,000,000 bushels, compared with 2,647,000,000 harvested in 1926. The total yield o f wheat is expected to be somewhat larger than a year ago. The forecast o f the yield o f cotton was 12,692,000 bales, representing a reduction o f 800,000 bales from the August estimate and o f over 5,000,000 bales from last year’s crop. TRADE. Distribution o f merchandise at wholesale and retail increased more than is usual in August, and sales were generally larger than in August o f last year. Sales o f wholesale firms in most leading lines were larger than a year ago. Inventories o f department stores showed less than the usual seasonal increase in August and at the end o f the month were in about* the same dollar volume as a year ago. Stocks carried by wholesale firms continued in August generally smaller than last year. Freight car loadings o f nearly all types o f commodities in creased considerably in August and the early part o f September, but, with the exception o f grains and miscellaneous products, load ings fo r all groups continued in smaller volume than in the same period o f last year. PRICES. Wholesale commodity prices, as measured by the index o f the Bureau of Labor Statistics, increased from 145 in July to 147 in August. There were large increases in the prices o f farm products and o f clothing materials, while most o f the other groups showed only slight changes. The price o f raw cotton ad vanced from 17 V2 cents a pound on August 1 to over 23 cents on September 8, but since that date has declined by about three cents a pound. Prices o f cotton goods, cattle, hogs, and sugar also increased during August and the first three weeks o f September, while those o f grains declined; recently there have been reductions in the prices o f some iron and steel products. BANK CREDIT. Total loans and investments o f member banks in leading cities between August 17 and September 21 increased by $400,000,000 to the largest figure on record. There were in creases in loans on securities and in investments as well as the usual seasonal growth in loans fo r agricultural and commercial purposes. . The volume o f reserve bank credit increased during the month ending September 21, reflecting the seasonal growth in the demand fo r currency and an export o f gold. The increase was entirely in the holdings o f acceptances and United States securities, as there was little change in the discounts fo r member banks. In the open money markets, rates on security loans increased slightly during September, while rates on commercial paper and 90-day bankers’ acceptances remained unchanged at the lowest levels o f the year. Discount rates at the Federal reserve banks o f Philadelphia, Chicago, San Francisco, and Minneapolis were reduced during September from 4 to 3 V2 per cent, the rate prevailing in the other eight districts. 8
@FedFRASER