Full text of Economic Quarterly (Federal Reserve Bank of Richmond) : September 1928

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MONTHLY

REVIEW

BUSINESS AND AGRICULTURAL CONDITIONS

WILLIAM^W. HOXTON, CHAIRMAN AND FEDERAL RESERVE AGENT

RICHMOND, VIRGINIA
DISTRICT SUMMARY— Business in the fifth
reserve district in August and early September
showed a seasonal increase over July, but was
in less volume than during the corresponding
period of 1927. Increased rediscounts at the
Federal reserve bank and an increase in the cir­
culation of Federal reserve notes during the past
month, together with a larger volume of de­
partment store sales and increased wholesale
business over sales in July, indicate that fall
trade opened up normally. Employment condi­
tions appear to have improved somewhat in re­
cent weeks, and coal production was only a little
below the tonnage mined in August last year.
On the other hand, textile mills continue un­
able to sell their output and are forced to curtail
operations considerably to prevent an accumula­
tion of goods in their warehouses. Official crop
estimates as of September 1st are unfavorable
when considered in connection with prices now
prevailing for farm products. Should the dis­
trict’s cotton crop exceed last year's yield, this
year’s prices are between $20 and $25 a bale
lower than a year ago, and money returns from
the 1928 crop will be much lower than the re­
turns from the 1927 crop. This year’s tobacco
crop is forecast to be somewhat smaller than the
1927 crop, the quality of the weed is lower, and
present prices are below those of last fall. Other
crops have been more or less seriously damaged
by storms, floods and excessive rains, and the
outturns are highly problematical. Retail trade
in August was below the volume of trade in
August 1927, and wholesale trade was also in
smaller volume last month than during the same
month a year ago. Building permits issued in
August in leading cities and contracts actually
awarded for construction and engineering pro­
jects in the fifth district were in lesser amounts
than in August 1927. Finally, debits to in­
dividual accounts in the banks in leading trade
centers were lower during the four weeks ended
September 12th than during the corresponding
period last year.




SEPTEMBER 30, 1928
RESERVE BANK OPERATIONS — There
was a seasonal increase in the demand for re­
serve bank credit in the fifth district between
August 15th and September 15th, incident to the
opening of tobacco markets, early marketing of
cotton, and discounting of bills for early fall
merchandise. The volume of rediscounts held
by the Federal Reserve Bank of Richmond rose
from $53,442,000 on August 15th to $58,371,000
on September 15th, and the circulation of Federal
reserve notes turned upward, rising from
$53,544,000 last month to $60,406,000 this month.
Total earning assets of the Federal Reserve
Bank of Richmond rose in about the same
amount as the increase in rediscounts, totaling
$64,511,000 on August 15th and $70,134,000 on
September 15th. Member bank reserve deposits
increased between the middle of August and the
middle of September from $67,690,000 to $71,958,000. The several changes in the statement
mentioned, with other less important ones,
raised the cash reserves of the Federal Reserve
Bank of Richmond from $64,743,000 on August
15th to $72,866,000 on September 15th, and
brought the ratio of reserves to note and deposit
liabilities combined up from 52.39 per cent to
53-43 per cent.
On September 15, 1927, rediscounts held by the
Federal Reserve Bank of Richmond totaled only
^26,8^yy
ooo} in comparison with $58,371,000 held
by the Bank on September 15th this year, but
disposal of a large volume of Government securi­
ties held a year ago reduced the total earning
assets of the Bank from $71,614,000 at midSeptember last year to $70,134,000 at the same
time this year. The volume of Federal Reserve
notes in actual circulation amounted to $63,296.000 a year ago, but totaled $60,406,000 this
year. Member bank reserve deposits declined
from $75,249,000 on September 15, 1927, to $71,958.000 on September 15, 1928. The cash re­
serves of the Richmond bank totaled $82,794,000
a year ago, but declined to $72,866,000 on Sep­
tember 15th this year, and during the same
period the ratio of cash reserves to note and
deposit liabilities combined dropped from 59.42
per cent to 53.52 per cent.

CONDITION OF SIXTY-FOUR REPORTING MEMBER BANKS IN SELECTED CITIES
ITEM S

Sept. 12, 1928

Aug. 15, 1928

Loans Secured by U. S. Government Obligations...........
Loans Secured by Other Stocks and Bonds......................
A ll Other Loans and Discounts, Largely Commercial....
Total Loans and Discounts..................................
Total Investments in Bonds and Securities......................
Reserve Balance with Federal Reserve Bank.................
Cash in Vaults.......................................................................
Demand Deposits ...................................................................
Time Deposits .........................................................................
Borrowed from Federal Reserve Bank..............................

$ 2,997,000
186.109.000
332.583.000
521.689.000
156.676.000
39.699.000
11.872.000
358.800.000
245.405.000
26.054.000

$ 3,197,000
184.363.000
331.284.000
518.844.000
159.790.000
40.285.000
11.129.000
354.805.000
247.503.000
26.842.000

Sept. 14, 1927
$

3,341,000
155.748.000
369.764.000
528.853.000
162.765.000
44.288.000
13.725.000
397.788.000
236.414.000
9,012,000

The accompanying table shows the principal items of condition of sixty-four regularly reporting
member banks as of three dates, September 12th and August 15th this year and September 14, 1927,
thus affording an opportunity for comparison of the latest available figures with those of the pre­
ceding month and year, respectively. It should be understood that the figures shown reflect condi­
tions as of the report dates only, and are not necessarily the highest or lowest figures that occurred
during the interval between the dates.
Between August 15th and September 12th, both this year, loans secured by U. S. Government
obligations decreased $200,000, but loans on other stocks and bonds rose $1,746,000 and all other loans
and discounts rose $1,299,000, a net increase in total loans to customers of $2,845,000. The report­
ing banks reduced their investments in bonds and securities during the month by $3,114,000, and
lowered their balance at the reserve bank by $586,000, only a daily fluctuation. The opening of the
Fall season with its increased demand for cash raised the cash in vaults by $743,000 between August
15th and September 12th. Demand deposits increased $3,995,000 during the period under review, but
time deposits declined $2,098,000, a net deposit gain of $1,897,000. The reduction in investments and
the gain in deposits provided for the increases in loans to customers and in cash in vaults, and en­
abled the reporting banks to reduce their rediscounts at the reserve bank by $788,000.
In comparison with the figures reported on September 14, 1927, those reported on September 12,
1928, show a decrease of $344,000 in loans on Government securities and a decline of $37,181,000 in
commercial, agricultural and industrial loans, but loans on stocks and bonds other than Government
securities rose $30,361,000. These changes give a net decrease during the year in total loans to cus­
tomers amounting to $7,164,000. The sixty-four banks reduced their investments in bonds and securi­
ties by $6,089,000 during the year, and their aggregate reserve deposits at the reserve bank declined
$4,589,000. Cash in vaults dropped $1,853,000 during the twelve months under review. Aggregate
deposits in the reporting banks declined $29,997,000 between September 14th last year and September
12th this year, demand deposits decreasing $38,988,000 while time deposits rose $8,991,000. The re­
duction in deposits so far exceeded the combined reductions in loans, investments, reserve deposits
and cash in vaults that an increase in rediscounts at the reserve bank amounting to $17,042,000 re­
sulted.
DEBITS TO INDIVIDUAL ACCOUNTS

Debits to individual, firm and corporation accounts in the leading trade centers of the fifth
reserve district are shown in the accompanying table for three periods of four weeks each, ended
September 12, 1928, August 15, 1928, and September 14, 1927. The figures for the latest available
four weeks period, ended September 12th, may be compared with those reported for the preceding
four weeks ended August 15th this year and with those for the corresponding four weeks ended
September 14, 1927.
Aggregate debits in the reporting banks totaled $1,042,043,000 during the four weeks ended
September 12, 1928, compared with $1,137,552,000 reported for the preceding like period, ended
August 15th. A moderate decline in debits during the more recent period occurs in most years,
partly due to the occurrence of the Labor Day holiday early in September and to a State holiday in
Maryland on September 12th. Only seven of the twenty-four reporting cities showed increased
totals during the four weeks ended September 12th, while seventeen cities showed lower totals.
Durham and Richmond reported comparatively large increases, and Baltimore, Raleigh and WinstonSalem reported large decreases. Other fluctuations were relatively small.
In comparison with debits totaling $1,132,231,000 for the four weeks ended September 14, 1927,
the aggregate of $1,042,043,000 reported for the corresponding period this year shows a decline of
$90,188,000, or about 8 per cent. Six cities reported higher figures for the 1928 period, these being
Cumberland, Lynchburg, Norfolk-Portsmouth, Raleigh, Richmond and Washington, but seventeen
cities failed to reach the totals reported last year.




2

u rn as

T O T A L DEBITS D U R I N G T H E F O U R W E E K S E N D E D
September 12, 1928

Asheville, N. C..................................................
Baltimore, Md......................................................
Charleston, S. C..................................................
Charleston, W. V a.............................................
Charlotte, N. C...................................................
Columbia, S. C....................................................
Cumberland, Md.................................................
Danville, V a.............................................. ..........
Durham, N. C.....................................................
Greensboro, N. C...............................................
Greenville, S. C..................................................
Hagerstown, Md....... .........................................
Huntington, W. V a...........................................
Lynchburg, V a....................................................
Newport News, V a............................................
Norfolk, V a..........................................................
Portsmouth, V a..................................................
Raleigh, N. C......................................................
Richmond, V a......................................................
Roanoke, V a........................................................
Spartanburg, S. C.............................................
Washington, D. C..............................................
Wilmington, N. C..............................................
Winston-Salem, N. C........................................

$

24,528,000
287,436,000
22,433,000
30,968,000
44,283,000
17,500,000
8,226,000
7,022,000
27,410,000
19,293,000
15,391,000
8,282,000
18,670,000
15,896,000
8,180,000
52,299,000
5,054,000
16,689,000
131,278,000
25,228,000
10 ,022,000
200,196,000
13,464,000
33,095,000

District Totals ..................................................

$1,042,043,000

August 15, 1928
$

23,745,000
363,316,000
22,252,000
32,594,000
46,851,000
17,780,000
8,503,000
6,649,000
23,855,000
19,182,000
16,338,000
9,085,000
18,789,000
17,391,000
8,497,000
56.525,000
5,269,000
21,575,000
113,362,000
25,576,000
10,044,000
213,128,000
12,575,000
44,671,000

$1,137,552,000

September 14, 1927
$

28,469,000
356,764,000
22,979,000
33,311,000
46,128,000
20,083,000
8,004,000
8,840,000
33,979,000
19,311,000
21,665,000
8,994,000
20,407,000
15,852,000
8,313,000
*56,459,000

.............

15,752,000
129,790,000
25,293,000
11,232,000
191,281,000
15,242,000
34,083,000
$1,132,231,000

* This Norfolk figure includes total fo r Portsmouth.

SAVINGS DEPOSITS— Savings and time deposits decreased slightly during the past month,

but continued well
more had deposits
$183,584,146 at the
regularly reporting
ber 12th this year,
1927 -

above the corresponding 1927 figures. Twelve mutual savings banks in Balti­
aggregating $183,521,480 at the close of business August 31, 1928, compared with
end of Ju ly this year and $168,117,568 at the end of August 1927. Sixty-four
member banks had aggregate time deposits amounting to $245,405,000 on Septem­
compared with $247,503,000 on August 15, 1928, and $236,414,000 on September 14,

BUSINESS FAILURES—Dun's Review for September 8th says, “ Following the improvement re­
vealed in July, the insolvency statistics for August disclose a higher business mortality. The rise
occurred in both number of commercial failures and amount of liabilities, and the upward trend is
in contrast to the reduction shown a year ago. Numbering 1,852, commercial failures in the United
States last month are 127, or 7.4 per cent above the total of 1,723 for July, while there is an increase
of 144, or 8.4 per cent, over the 1,708 defaults in August 1927. The increase in the August indebted­
ness is much more marked than the rise in the number of defaults, the amount involved being swelled
to $58,201,830. That unusually high aggregate resulted from several insolvencies of exceptional size,
particularly in the classification designated as ‘Other Commerciar, which includes brokerage, in­
surance and other similar enterprises. The liabilities for last month are far above those of the four
immediately preceding months, and establish a new maximum for the current year. The next high­
est total is the $54,300,000 of March. Comparing with the $39,105,953 of August 1927, last month's
indebtedness shows an increase of more than 48 per cent.”
The fifth district insolvency record for August was better than the record for the entire country.
Failures numbering 114 last month show a decrease of 20 per cent under 143 failures reported in
August 1927, and last month’s liabilities totaling $2,546,548 are only 18 per cent larger than $2,155,805
in August last year, in contrast with the National increase of 48 per cent.
LABOR—The employment situation appears to have improved in the fifth district since the first
of August, and there does not seem to be a burdensome surplus of workmen anywhere in the district
at present. A large amount of construction work of various types is under way, and industrial
plants are using their normal quotas of workers, although some of them are not operating full time.
There are undoubtedly many people who are not able to secure steady work, but it is doubtful if the
number is now larger than was considered normal before the b o o m period during and immediately
following the World War. Conditions in the textile industry and in the coal fields are least satis­
factory in - the fifth district, but textile employees have at least part time work to provide for
necessities and coal miners are as fully employed as the summer season and the over-development in
mining allows.




3

COAL—Bituminous coal production in the United States in August 1928 total 41,108,000 net tons,
as against 36,276,000 tons mined in Ju ly and 41,705,000 tons in August 1927. Total production dur­
ing the present calendar year to September 8th (approximately 212 working days) amounts to 321,699,000 net tons, the lowest figure since 1924. West Virginia continues to lead in tonnage. The
Bureau of Mines, Department of Commerce, issued a summary of 1927 coal statistics for West Vir­
ginia on September 15th, and reported 145,122,447 net tons mined, with a total value at the mines of
$249,730,000. This coal was dug by 66,585 miners, 17,385 haulers and 17,814 others working under­
ground, while 18,015 workers were employed on the surface, making a total of 119,799 people actually
working at West Virginia coal mines. The average number of days worked by each employee was
235, and each miner dug an average of 5.15 tons of coal per day. The total number of mines of
commercial size that produced coal in 1927 was 1,149.
TEXTILES —The unsatisfactory conditions in the textile field continued during August and early
September, and there were few signs of probable improvement in the near future. Textile mills in
the fifth reserve district consumed 222,987 bales of cotton in August, a seasonal increase over 187,601
bales used in July this year but a decided decline from 261,638 bales consumed in August 1927. In
the face of falling cotton prices, buyers continue unwilling to place forward orders, and mills are
forced to operate on restricted schedules or to accumulate manufactured goods in their warehouses.
The mills are consequently running part time, and are keeping surplus stocks as low as possible. No
mills are closed entirely, however, and there are few textile employees out of work, although most
of them are living on reduced incomes as a result of the fewer hours or days worked.
BUILDING OPERATIONS FOR THE MONTHS OF AUGUST 1928 AND 1927.
Permits Issued
New

CITIES

0

z

Repairs

1928 1927

1928

1927

iNcw i/onsirucuon
1928

1927

/iiicrauuus
1928

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
30
31

$ 978,880 $

31
57
37
38
453

1,577 $ 1,419,100 $ 1,354,900
8
25,092
77,323
1
11,730
3,930
12
28,575
108,450
15
80,185
40,715
39
83,155
254,468
67
73,105
190,435
5
5,800
26,500
*24,435
73
618,337
lj 149^212
46
123,643
205,745
6
34,925
20,190
19
236,660
217,970
16
17,865
22,860
4
164,010
132,940
10
74,250
33,975
56
125,460
297,700
14
548,175
663,365
4
177,000
170,775
369,845
47
221,711
10
128,075
178,075
11
164,510
120,925
10
75,115
49,690
6
8,950
57,000
42,200
7
15,000
84
337,940
672,877
21
17,105
55,815
51
119,900
75,600
39
159,800
79,500
13
136,420
108,270
473 2,062,525
3,156,125

Totals.............. 1,407 1,663 2,192

1
2

2,744 $ 7,469,452 $ 9,762,041

$2,034,378

Baltimore, Md......
Cumberland, Md...
Frederick, Md......
Hagerstown, Md...
Danville, Va.........
Lynchburg, Va.....
Norfolk, Va.
Petersburg, Va.....
*Pr»rt<;mrnith Va
Richmond, Va......
Roanoke, Va........
Bluefield, W. Va...
Charleston, W. Va.
Clarksburg, W. Va.
Huntington, W.V a.
Parkersburg, W. Va....
Asheville, N. C......
Charlotte, N. C....
Durham, N. C......
Greensboro, N. C.
High Point, N. C...
Raleigh, N. C.......
Rocky Mount, 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.

387

12
6
17

6

24
46

2

444
23
4
33
15
29

66
6

*18

100

38

8

39
19
39
15

21

90
38
55
34
26

22

103
65
17
54

20

45
15
33
65
51
72
46
27
18

10
8

7
9
67

131

11

6

26
30
18
195

— Denotes decrease.

16
9
29
203

985
3

2
10

13
30
65

8

*32
82
25
3
14
23
7

11

44
30

6

67
9

10
2
8
9

110

1,200

5,080
4,100
17,100
15,625
81,600
7,735
*17,679
264,862
28,152
650

11,000

16,835
8,150
9,700
14,890
9,707
18,850
46,556
6,900
6,750

11,200

5,450
19,800
50,850
9,690
16,940
16,131
10,090
339,905

1927

Increase or Per Cent
of
Decrease
Increase
of
or
Total
Valuation Decrease

626,400 $
416,680
21.096
5,255 — 56,286 — 68.2
1,400
215.4
11,480
22,000 — 97,775 — 75.0
3,641
119.3
52,929
83,565 — 239,253 — 70.8
52,540 — 88,270 — 36.3
2,300 — 15,265 — 53.0
82,911
23,696
5,887
206,535
4,900
2,400

8,100

75,270
12,723
4,950
43,465
7,275
156,525
27,525
15,200
16,100
27,476
7,145
12,440
18,190
5,040
440,815

— 348,924 —
— 77,646 —
9,498
— 176,845 —
6,940
36,820
41,875
— 232,620 —
— 118,206 —
20,125
151,225
— 50,375 —
— 106,190 —
9,100
— 57,800 —
30,900
— 311,563 —
— 36,165 —
48,800
78,241
33,200
—1,194,510 —

28.3
33.8
36.4
41.7
25.0
27.2
99.5
62.4
17.5
11.5
57.0
27.2
38.3

11.8

80.1
99.4
44.5
57.4
55.4
80.1
29.3
33.2

0

2

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
30
31

$2,001,669 $ —2,259,880 — 19.2%

* Portsmouth figures not included in totals.

.NOTE— The figures in the above table reflect the amount o f work provided fo r in the corporation limits of the
several cities, but take no account o f suburban developments.

Prospects for construction work declined last month. Building permits issued for , new con­
struction in thirty leading cities of the fifth reserve district totaled 1,407 in August this year, com­
pared with 1,663 permits issued for similar work in August a year ago, and the estimated valuation
of the August 1928 work totaled $7,469,452 in comparison with $9,762,041 in August 1927. In altera­
tion and repair work, August 1928 permits numbered 2,192, estimated to cost $2,034,378, compared
with 2,744 permits and a valuation of $2,001,669 in August last year. Total estimated valuation for




4

all classes of work was $9,503,830 last month, a decrease of $2,259,880, or 19.2 per cent, under ^the
total of $11,763,710 for all permits issued in August 1927. Fourteen of the thirty reporting cities
showed higher valuation figures last month than a year ago, but sixteen cities reported lower figures.
Seven cities reported gains of more than 50 per cent, but in some of them the high percentage gain
was due to low figures in August 1927 rather than to particularly large figures this year.
Contracts awarded in August for construction work in the fifth district, including both rural and
urban projects, total $30,171,855, compared with $31,813,073 awarded in August 1927, according to
figures collected by the F. W. Dodge Corporation. Of the awards in August this year, $12,069,030
was for residential work.
COTTON—Spot cotton prices on principal Southern markets declined nearly 1.75 cents per pound
between the middle of August and the middle of September, practically all of the drop occuring
after the unexpectedly high estimate of probable production released by the Department of Agricul­
ture on September 8th. The average price on ten markets was 16.88 cents per pound on September
14th. Cotton has declined more than 5 cents per pound since July 1st, and is now about 4.5 cents
below the price level at this time last year.
The second cotton condition report of the year, issued by the Department of Agriculture on
September 8th, estimated probable production in 1928 at 14,439,000 bales, based on the September
1st condition of 60.3 per cent of a normal on 44,916,000 acres in cultivation. This figure compared
with a forecast on August 1st of 14,291,000 bales and a crop in 1927 of 12,955,000 bales. The report
estimated Virginia’s crop at 46,000 bales, compared with 48,000 bales forecast on August 1st and
final ginnings of 31,000 bales in 1927. North Carolina’s probable production was given as 970,000
bales, compared with 973,000 bales forecast on August 1, 1928, and 861,000 bales grown last year.
S o u t h Carolina’s September 1st estimate of 890,000 bales compares with the August 1st forecast
of 897,000 bales and a 1927 crop of 730,000 bales. The Department of Agriculture’s estimate for the
two Carolinas was somewhat larger than is generally expected in those states. Since September
1st, general rains have been frequent in both Carolinas, and boll rot has developed to such an extent
that some of our best informed correspondents contend that the probable yield in each of the Caro­
linas has been reduced considerably below the September 1st prospect. Some carefully conducted
boll counts made in the Pee Dee section of South Carolina on September 6th and 7th showed the
presence of rot in more than 15 per cent of the bolls counted. The general rains of September 18th
and 19th further damaged the cotton crop in the fifth district. v
Cotton consumption in American mills in August showed a seasonal increase over Ju ly con­
sumption, but was less than that of August 1927. The Bureau of the Census reported 526,729 bales
of lint consumed last month, compared with 438,743 bales used in Ju ly this year and 634,520 bales
consumed in August 1927. Cotton on hand at manufacturing establishments on August 31st this year
totaled 782,068 bales, compared with 1,007,017 bales held on Ju ly 31st this year and 1,120,784 bales
held on August 31st last year. Bales in public warehouses and compresses numbered 1,188,861 at the
end of August, 1,189,565 bales at the end of July, and 2,172,945 bales on August 31, 1927. Exports
of cotton totaled 259,489 bales in August, compared with 340,311 bales sent abroad in August last
year, and imports last month totaled 25,258 bales, compared with 28,041 bales imported in August
1927. Consumption of cotton in the growing states totaled 403,888 bales in August, compared with
464,530 bales used in August last year. Last month’s consumption in the cotton growing states
amounted to 76.68 per cent of National consumption, compared with 73.21 per cent of National
consumption reported for the cotton growing states in August last year.
The Bureau of the Census ginning report, issued on September 8th and including ginnings to
September 1st, indicates that this year’s crop is much later than the 1927 crop. Ginnings this year
prior to September 1st totaled 956,486 bales, compared with 1,533,577 bales ginned before the cor­
responding date last year. In the fifth district, only 3,394 bales were ginned in August this year,
compared with 22,966 bales ginned during the same period last year.
TOBACCO—Tobacco markets are now open in both North and South Carolina, and large sales
have been made, but the quality of tobacco is poorer than in 1927 and this year’s prices are also said
to be very unsatisfactory. The weather in the fifth district was highly unfavorable for tobacco
growing this year, with a late Spring, a dry July, and a wet August. August weather was so un­
favorable that the official production forecasts on September 1st lowered the estimates made on
August 1st from 482,410,000 pounds to 470,000,000 pounds for North Carolina, from 131,323,000
pounds to 123,743,000 pounds for Virginia, and from 79,922,000 pounds to 75,531,000 pounds for South
Carolina. On August 1st both Virginia and South Carolina appeared to have larger crops than in
1927, with North Carolina only slightly behind last year, but on September 1st the Virginia and
North Carolina estimates were about 3 per cent lower than the 1927 production, and the South Caro­
lina figure was also slightly below that of the previous season. The position of the growers is even
more unfavorable than the production figures indicate, since this year’s tobacco appears to be gen­
erally of lower grade than last year’s, and because prices are much lower this season.




5

AGRICULTURAL NOTES—M ARYLAN D crops were quite generally damaged by excessive rains
in August and the first half of September. The corn crop was damaged seriously, many apples burst
on the trees, and the quality of the tobacco crop was lowered. On the Eastern Shore, canning to­
matoes were seriously damaged and there will be little late fruit. Live stock prospects in Maryland
are much better than crop prospects, and the farmers of western Maryland did well with their large
crop of peaches.

V IRG IN IA crop prospects declined during August as a result of heavy storms, according to the
Crop Reporting Service. The production forecasts on September ist were lower than a month
earlier for corn, tobacco, cotton ,hay and sweet potatoes. Since September ist the weather has
been unfavorable for most crops and probably corn and tobacco have been seriously damaged. The
September corn forecast based upon the condition of 79 per cent was 45,362,000 bushels, which is
2.605.000 bushels less than the 1927 crop. The peanut crop seems to be good, the September forecast
of 143,792,000 pounds greatly exceeding the short crop of 116,128,000 pounds grown last year. Late
hay crops were improved by the August rains, but there was considerable damage to hay crops on
lowgrounds and to hay already stacked. A production of 1,289,000 tons is indicated, compared with
1.469.000 tons harvested last year. Pastures are excellent in all parts of the State, although grasses
have too high moisture content for best grazing. The early potato crop yielded unusually well and
the production this season was the largest on record. Prospects for late potatoes have declined,
however. The production of both early and late potatoes is estimated to be 19,814,000 bushels, com­
pared with 19,760,000 bushels dug last year. The condition of sweet potatoes declined during August
and the September forecast of 5,646,000 bushels is less than the August indications and also below
last year’s crop. The yield on the Eastern Shore, where nearly 75 per cent of the total State crop
is grown, has been disappointing. Apples grew rapidly during August, so the size is larger than
usual. The forecast of production increased nearly 7 per cent during August to 14,128,000 bushels,
compared with 6,000,000 bushels produced last year. The oat yield is better than had been expected
and will be better than last year, although the rains caused some damage to crops stacked in the
fields, especially in the southwest where threshing is later than in other parts of the State.
NORTH CAROLINA corn production is estimated to be 45,393,000 bushels this year, compared
with 53,626,000 bushels last year. Grasses and pastures are generally good, the hay yield of slightly
over a ton per acre indicating a crop of 904,000 tons, compared with 845,000 tons harvested last year.
The sweet potato crop this year is 8,331,000 bushels, as compared with 10,146,000 bushels in 1927.
About half of the Irish potato acreage in North Carolina is confined to the early truck crop which is
shipped principally during June and July. The September ist estimate amounts to about 4,000,000
bushels this year. The early or commercial crop made one of the best yields for many years, but
prices were quite unsatisfactory. The peanut crop is estimated to be 213,560,000 pounds, as com­
pared with the final estimate of 157,527,000 pounds last year. The commercial apple crop is fore­
cast at 236,000 barrels and the agricultural crop at 4,722,000 bushels. The commercial crop is almost
three times larger than that of last year.
SOUTH CAROLINA crops were damaged by numerous wind storms, heavy to excessive rains,
and flooded lowlands during August, but despite the unfavorable weather, prospects were still fair
to good for most crops on September ist. Some crops have been further damaged by wet weather
and storms in September, however. Corn prospects declined about 1,500,000 bushels in August, and
on September ist the outlook was for a crop of approximately 21,440,000 bushels, compared with the
final estimate of 25,449,000 bushels made last year. Sweet potatoes improved during August and on
September ist indicated a crop of 4,428,000 bushels, compared to 5,300,000 bushels produced last
year. Prospects for a smaller crop than last year are due mostly to a reduction of about 6 per
cent in this year’s acreage. Unfavorable weather during August reduced peanut prospects some­
what and the September ist condition gives promise of about 7,654,000 pounds this year, compared
to the final estimate of 8,525,000 pounds last year. All tame hay improved during August and a crop
of about 336,000 tons is indicated, which compares with a crop of 356,000 tons last year. This has
been a good year for fruit. The South Carolina peach crop was probably the largest ever produced
in the State, and prospects are for fair to good crops of apples, pears and grapes.
W EST V IR G IN IA crop prospects changed little during August and conditions on September ist
were about average. Weather conditions since August ist were favorable for the growth of crops
but somewhat unfavorable for the harvesting of hay and small grains, due to excessive rainfall. Corn,
sweet potatoes, tobacco, sorghum cane and pastures show slight improvement over the August ist
condition, Irish potatoes remain unchanged, and oats, buckwheat, and hay show slight decreases in
condition.




6

FIGURES ON RETAIL TRADE

As Indicated By Reports from Thirty Representative Department Stores for the Month of August 1928
Percentage increase in August 1928 sales, compared with sales in August 1927:

Baltimore

Richmond

Washington

Other Cities

District

—
Percentage
—
Percentage

4.3
2.6
— 1.4
— 11.8
. — 3.4
increase in total sales since January 1st, over sales during the first eight months o f 1927:
1.5
2.7
2.4
— 6.7
—
.2
increase in August 1928 sales over average August sales during the three years 1923-1925, inclusive:
9.9
29.5
24.2
— 2.5
15.3
Percentage increase in stock on hand August 31, 1928, over stock on August 31, 1927:
.2
— 3.9
— 1.0
.1
— ' .6
Percentage increase in stock on hand August 31, 1928, over stock on July 31, 1928:
1.0
1.4
2.8
3.3
2.0
Percentage of sales in August 1928 to average stock carried during that month:
21.2
26.3
24.5
17.9
22.4
Percentage of total sales since January 1st to average .stock carried during each of the eight elapsed months:
194.1
223.2
213.9
152.7
198.5
Percentage of collections in August 1928 to total accounts receivable on August 1st:
21.4
26.2
28.5
25.6
24.5

— Denotes decreased percentage.

Retail trade in the fifth reserve district in August showed a seasonal increase over the volume
of business in Ju ly of this year, but dropped 3.4 per cent behind the business done in August 1927,
according to confidential reports received from thirty leading department stores. Total sales this year
were two-tenths of 1 per cent less than total sales during the first eight months of last year.
August 1928 sales averaged 15.3 per cent above average August sales during the three years 19231925, inclusive, partly due to store expansion in two or three cities.
S t o c k s on hand in the thirty reporting stores at the end of August showed a seasonal increase
of 2.0 per cent over stocks on July 31st this year, but were six-tenths of 1 per cent less than stocks
on hand at the end of August a year ago. The percentage of sales in August to average stocks car­
ried during that month was 22.4 per cent, and the percentage of total sales since January i, 1928, to
average stocks carried during each of the eight elapsed months was 198.5 per cent, indicating an
annual turnover of 2.647 times. The rate of turnover during the first eight months of 1927 . was
2.636 times.
Collections during August in the thirty reporting department stores averaged 24.5 per cent of
receivables outstanding on August 1st this year, compared with 24.2 per cent of outstanding receiv­
ables collected in August 1927. Baltimore, Richmond and Washington stores showed slightly
higher percentages this year than last, but the group of Other Cities stores reported slower col­
lections last month than in August a year ago.
_____________________________ WHOLESALE TRADE, AUGUST 1928_________ ______________ ____
Percentage increase in August 1928 sales, compared with sales in August 1927:
32 Groceries
10 Dry Goods
5 Shoes
16 Hardware
5 Furniture
13 Drugs
2.7
—26.6
— 10.3
— 18.3
— 16.4
— 4.7
Percentage increase in August 1928 sales, compared with sales in July 1928:
8.3
75.5
83.9
15.1
30.6
7.4
Percentage increase in total sales since Jan. 1, 1928, compared with sales in the first eight months of 1927:
1.1
— 18.3
— 3.6
— 12.7
— 25.5
— 2.9
Percentage increase in stock on August 31, 1928, compared with stock on August 31, 1927:
5.7(11*)
— 2.0(4*)
— 5.5(4*)
— 1.4(8*)
____
____
Percentage increase in stock on August 31, 1928, compared with stock on July 31, 1928:
3.4(11*)
— 8.5(4*)
— 7.4(4*)
.5(8*)
.......
.......
Percentage of collections in August to total accounts receivable on August 1, 1928:
62.0(18*)________ 31.5(7*)
21.7(5*)
27.7(12*)
22.9(3*)
58.8(9*)
— Denotes decreased percentage.

* Number of reporting firms.

Wholesale trade in August in the fifth district was in larger volume than in Ju ly in all lines re­
ported upon, a seasonal development, but August sales this year were smaller in every line except
groceries than sales in August 1927. Total sales this year were also less in all lines except groceries
than total sales in the first eight months of 1927.
Stocks on the shelves decreased during August in all of the four lines for which figures are
available except groceries, and at the end of the month were in smaller amount than a year ago in
dry goods and shoes, while grocery and hardware stocks were slightly larger than a year earlier.
Collections in August were better than in August 1927 in dry goods and drugs, but grocery,
shoe, hardware and furniture collections last month were slower than those in the same month
last year.
(Compiled September 21, 1928)




7

BUSINESS CONDITIONS IN THE UNITED STATES
(Compiled by the Federal Reserve Board)

The volume of industrial and trade activity increased in August, and there was a further advance
in wholesale commodity prices. Reserve bank credit outstanding increased in September, reflecting
in part seasonal demands for currency and credit. Money' rates remained firm.
PRODUCTION. Production of both manufactures and minerals increased considerably in Aug­
ust, the output of manufacturing plants being larger than at this season of any earlier year. Auto­
mobile production was in record volume in August, and available information indicates that output
was maintained by many producers at a high level during September. Iron and steel production con­
tinued large in August and September, and output of non-ferrous metals increased between July
and August. Textile mill activity, which had been somewhat reduced in recent months, also showed
a substantial increase. Factory employment and payrolls have increased since mid-summer and in
August were close to the levels^ of a year ago. In the building industry there was evidence of re­
cession in a sharp decline after the early summer in contracts awarded, which were in smaller volume
during August than in the corresponding month of any year since 1924. In the first three weeks of
September, however, awards were somewhat larger than last year.

Estimates of the Department of Agriculture for September 1 indicate that yields of principal
crops will be larger than last year and above the average for the preceding five years.
TRADE. Distribution of commodities showed seasonal increases in August, although sales in
most lines of wholesale and retail trade did not equal the unusually large sales of August 1927. De­
partment store stocks increased as is usual in August but continued smaller than a year ago, while
inventories in several lines of wholesale trade were somewhat larger than last year. Freight car
loadings were in about the same volume in August as a year earlier. Shipments of miscellaneous
commodities and grains were larger and those of coal, livestock and forest products smaller than
last year.
PRICES. The general level of commodity prices increased in August and the Bureau of Labor
Statistics index, at 98.9 per cent of the 1926 average, was the highest in nearly two years. Increases
in August were chiefly in the prices of livestock and livestock products, which are now higher than at any
time since 1920. There were also small increases in fuels, metals and building materials. Grains and
cotton showed sharp declines, and there were decreases also in hides and skins and wool. Since the
first of September there have been some declines in livestock and meats, and a sharp further decline
in cotton, while prices of pig iron, copper and petroleum have advanced.
BANK CREDIT. Between the middle of August and the middle of September there was a con­
siderable increase in the loans and investments of member banks in leading cities. Part of the in­
crease was in loans on securities and part reflected a seasonal increase in other loans. Deposits of
member banks also increased during the period.

The volume of reserve bank credit outstanding increased during the four weeks ended Septem­
ber 19 in response to seasonal demands for currency and growth in member bank reserve require­
ments. The increase in total bills and securities was largely in holdings of acceptances and in dis­
counts for member banks.
During the same period there were further increases in open market rates on collateral loans
and on commercial paper, while rates on Bankers’ Acceptances were reduced from 4 5/8 per cent to
4 1 / 2 per cent.
NOTE.




Lack of time prevented 'the preparation of the illustrative charts this month.

8