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MONTHLY REVIEW
CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS

WILLIAM W. HOXTON, CHAIRMAN AND

FEDERAL RESERVE AGENT

FEDERAL RESERVE BANK OF RICHMOND

RICHMOND, VIRGINIA
LTHOUGH there was no
marked increase in the total
volume of business transacted in
the Fifth Federal reserve district in
August, some seasonal increases in
special lines were noted, and several
barometers of trade show more than
a mere seasonal rise. Definite im­
provement in nearly all classes of
business is reported from the Carolinas, where cotton and tobacco
play a more prominent part than
in other sections of the Fifth dis­
trict. Rediscounts at the Federal
Reserve Bank of Richmond de­
creased between the middle of
August and the middle of Septem­
ber, an unseasonal development, but the volume
of Federal reserve notes in actual circulation rose
with the begining of the fall crop marketing. Re­
porting member banks in leading cities lowered
their total loans to a slight extent, and also re­
duced their investments in stocks and bonds, but
their deposits increased during the past month.
Debits to individual accounts figures in the five
weeks ended September 14, 1932, showed a lower
total than in the preceding five weeks, ended
August 10, but eight cities in the Carolinas reported
higher figures for the more recent period. Com­
mercial failure figures for the twelve Federal re­
serve districts for August show that the Fifth dis­
trict made a poor record in number of insolvencies,
but was in line with other districts in liabilities in­
volved. The employment situation in the Fifth dis­
trict continued very unsatisfactory, although a con­
siderable number of industrial plants have recently
taken on some additional workers or have length­
ened hours of work for persons already employed.
Coal production in August showed about the normal
seasonal increase over July production, but con­
tinued much below the figures for 1931. The textile
situation improved more than any other industry
last month, higher cotton prices as a result of a
much smaller crop than in recent years having




SEPTEMBER 30, 1932
stimulated buying of textiles quite
materially. Cotton consumption in­
creased more than seasonally in
August, mills took on some addi­
tional employees and orders were
received in sufficient volume to run
the mills several weeks. Building
permits issued in Fifth district
cities continued at a very low level,
and contract award figures were
also relatively low, but were higher
than the awards in August 1931.
Retail trade as reflected in depart­
ment stores, in spite of very un­
favorable weather for early fall
trade, was up to seasonal level, and
wholesale trade showed seasonal
gains in all lines for which data are available, dry
goods and shoes reporting marked increases. In
agriculture, the outstanding developments last
month were rises in cotton and tobacco prices. The
crops of both cotton and tobacco are much smaller
this year than last, but the chief factor in the
decline in production is acreage reduction, and
therefore this year’s crops promise larger net re­
turns to farmers. In Virginia, and to a less degree
in Maryland, there has been so little rain that some
sections are experiencing a drought which ap­
proaches that of 1930 in severity, but it is not
State-wide and further, it developed late in the
season and early feed crops were harvested before
the dryness became serious. Taking the district as
a whole, the outlook for fall and winter trade ap­
pears definitely better than it was a year ago, and
for the first time since the beginning of the de­
pression there is a spirit of optimism in trade cir­
cles.

Reserve Bank Statement
As a rule, borrowing at the reserve bank tends to
increase slightly between the middle of August and
the middle of September, the credit needs of mer­
chants for discounting bills for fall goods exceed-

MONTHLY REVIEW

2
ITEMS

Sept 15
1932

000 omitted
Aug. 15 Sept. 15
1931
1932

Rediscounts held --------------- $ 23,555 $ 28,226 $ 23,032
2,628
2,767
2,495
Open market paper------------31,558
47,133
47,133
Government securities ---------700
0
0
Other earning assets................
57,918
78,126
73,183
Total earning assets.............
72,910
96,140
Circulation of Fed. Res. notes.. 104,740
60,017
49,786
49,007
Members* reserve deposits---91,596
77,632
96,417
Cash reserves -------------------64.88
51.83
59.95
Reserve ratio ...........................

ing liquidation of agricultural loans, but this year
there was an unseasonal decline in rediscounts for
member banks at the Federal Reserve Bank of
Richmond amounting to $4,671,000 between August
15 and September 15, the decline being in borrow­
ing by banks in the smaller cities and in rural sec­
tions. The Bank’s portfolio of open market paper
also declined slightly last month, but no change
occurred in holdings of Government securities.
Total earning assets of the Richmond bank de­
creased by $4,943,000 between August 15 and Sep­
tember 15. The actual circulation of Federal re­
serve notes rose seasonally last month, but the in­
crease of $8,600,000 was more than usually occurs
at this time of year. Member bank reserve de­
posits at the Federal Reserve Bank of Richmond
declined by $779,000 last month, little more than a
daily fluctuation. The several changes in the state­
ment previously mentioned, with others of less
importance, resulted in a net gain in the cash re­
serves of the Richmond bank amounting to $18,785,000, and the ratio of cash reserves to note and
deposit liabilities combined rose by 8.12 points.
In comparison with condition figures on Septem­
ber 15 last year, those for September 15 this year
show some material changes. Rediscounts for
member banks on the 1932 date showed an increase
of $523,000, a minor change, and open market paper
holdings decreased by only $133,000, but Govern­
ment securities held by the Richmond bank rose
$15,575,000 during the year, and total earning assets
rose by $15,265,000. On September 15, 1932, the
circulation of Federal reserve notes exceeded the
circulation a year earlier by $31,830,000, a very
large amount in view of a smaller volume of busi­
ness being done this year. P art of the increase is
due to hoarding of currency, and the operation of
the check tax has also increased the use of cash by
reducing the number of checks drawn. Member
bank reserve deposits at the reserve bank declined
by $11,010,000 during the past year, chiefly due to
reduced deposits against which reserves are car­
ried. Aggregate cash reserves of the Federal Re­
serve Bank of Richmond rose by $4,821,000 be­
tween September 15, 1931, and September 15, 1932,
but because of the rise in note circulation, the ratio
of cash reserves to note and deposit liabilities com­
bined dropped 4.93 points.




Member Bank Statement
ITEMS

H omitted
)0
'Sept. 14 Aug. 10 Sept. 16
1932
1931
1932

Loans on stocks and bonds (in­
cluding Governments) ____ $120,458 $119,454 $157,408
198,448 203,568 247,706
All other loans____________
Total loans and discounts__ 318,906 323,022 405,114
Investments in stocks and bonds 251,683 257,718 233,384
39,371
Reserve bal. with F. R. Bank....
32,562
34,753
14,552
Cash in vaults_____________
13,189
12,690
Demand deposits _______
276,147 273,702 328,098
Time deposits_____________
228,413 228,860 259,630
8,358
Borrowed from F. R. Bank
7,871
7,786

The figures in the accompanying table show the
principal items of conditions reported by all mem­
ber banks in twelve of the largest cities in the Fifth
reserve district on three dates* September 14 and
August 10, 1932, and September 16, 1931, thus
affording opportunity for comparison of the latest
available figures with those of the preceding month
this year and the corresponding month last year.
Figures from forty-nine banks are included in the
tabulation.
During the five weeks between August 10 and
September 14, the reporting banks reduced their
loans by $4,116,000, and at the same time lowered
their investments in bonds and securities by $6,035,000. All of the reduction in loans was in com­
mercial, agricultural or industrial loans, those on
stocks and bonds increasing slightly. The report­
ing banks decreased their reserve balances at the
reserve bank by $2,191,000 during the past month,
but their cash in vaults rose by approximately half
a million dollars. Aggregate deposits increased be­
tween August 10 and September 14, demand de­
posits rising by $2,445,000 and time deposits de­
creasing by $447,000. The reporting banks de­
creased their borrowing at the reserve bank by
$85,000 last month. On September 14, nineteen of
the forty-nine banks were rediscounting at the
reserve bank, compared with twenty-one which
were borrowing on August 10.
On September 14, 1932, all figures on the condi­
tion statement were materially lower than cor­
responding figures on September 16, 1931, except
investments in stocks and bonds, which rose by
$18,299,000 during the year. Total loans dropped
$86,208,000, of which $36,950,000 was in loans on
securities and $49,258,000 was in all other loans.
Reserve balance at the reserve bank declined by
$6,809,000 during the year, in keeping with deposit
reductions amounting to $51,951,000 in demand de­
posits and $31,217,000 in time deposits. Cash in
vaults decreased by $1,363,000 during the year, and
the reporting banks also lowered their borrowing
at the Federal Reserve Bank of Richmond by
$572,000. On September 16, 1931, seventeen of the
forty-nine banks were borrowing at the reserve
bank, compared with nineteen of the same fortynine banks which were borrowing on September
14, 1932.

MONTHLY REVIEW

Time and Savings Deposits
Time deposits in forty-nine reporting member
banks and aggregate deposits in twelve mutual
savings banks in Baltimore totaled $434,776,728 at
the end of August 1932, a lower figure than either
$440,607,538 reported at the end of July this year
or $469,746,559 at the end of August 1931. For
the first time in a number of years, aggregate de­
posits in the twelve Baltimore savings banks at the
end of August were lower than deposit figures for
the corresponding date of the preceding year.

Debits to Individual Accounts
CITIES

Asheville, N. C.-----Baltimore, Md...........
Charleston, S. C.-----Charleston, W. Va.—
Charlotte, N. C.-----Columbia, S. C.------Cumberland, M d.___
Danville, Va........ .....
Durham, N. C_____
Greensboro, N. fC----Greenville, S. C____
Hagerstown, Md........
Huntington, W. iVa....
Lynchburg, Va. ..... ~
Newport News, Va...
Norfolk, Va...............
Portsmouth, Va.........
Raleigh, N. G -------Richmond, Va............
Roanoke, Va..............
Spartanburg, S. C_
_
Washington, D. C.. Wilmington, N. C ..
Winston-Salem, N. C.
Fifth District Totals

000 omitted
Total debits, five weeks ended
Sept. 14,
Aug. 10,
Sept. 16,
1932
1932
1931
$

8,545
292,349
11,162
26,856
37,415
13,127
5,466
4,456
16,756
10,662
9,848
5,481
10,333
12,027
6,659
32,994
3,204
12,140
105,490
17,919
5,469
186,232
7,122
22,770

$ 864,482

8,181
337,787
9,705
30,276
31,158
13,125
6,923
4,695
15,288
10,834
9,041
6,356
11,178
12,877
7,463
39,293
3,729
14,327
111,189
19,219
5,051
221,473
7,094
25,646

$ 12,326
‘ 378,702
17,276
37,474
44,196
18,914
8,860
6,193
28,910
17,059
13,970
9,092
15,751
17,576
11,643
47,556
4,334
19,439
132,145
27,155
9,665
230,556
11,101
30,302

$ 961,908

$1,150,195

$

The debits to individual accounts figures shown
in the table for three equal periods of five weeks
include all checks drawn against depositors’ ac­
counts in the banks of twenty-four leading trade
centers in the Fifth Federal reserve district.
Figures for the five weeks ended September 14,
1932, are included, and for comparison the cor­
responding figures for the preceding five weeks
this year, ended August 10, 1932, and the same five
weeks last year, ended September 16, 1931, are also
listed.
Aggregate debits in the reporting cities declined
10.1 per cent in the latest five weeks, compared
with figures for the preceding like period, only
eight of the twenty-four cities showing higher
figures. In most years about half the cities report
increased debits between mid-August and mid-September, chiefly as a result of crop marketing get­
ting under way and early fall trade beginning.
Some of the decline in debits in the more recent
period is no doubt due to the new check tax law,
which has reduced materially the use of checks in




3

trade channels. Every one of the eight cities re­
porting increased debits during the later period is
in the Carolinas, in which better cotton and tobacco
prices have stimulated trade to a considerable ex­
tent.
Debits in every one of the twenty-four reporting
cities were lower during the five weeks ended
September 14, 1932, than during the like period a
year ago, the average decline being 24.8 per cent.
This decline can be attributed in part to the lower
prices prevailing in many lines this year, and in
part to the influence of the check tax.

Commercial Failures
Commercial insolvencies in the Fifth Federal re­
serve district in August 1932 totaled 171, with ag­
gregate liabilities amounting to $3,892,210, an in­
crease in number of 167 per cent and a rise in
liabilities of 50 per cent in comparison with 64
failures and estimated liabilities totaling $2,595,092
in August 1931. The number of failures in August
was the largest for any August on record, and last
month's liabilities were also the largest for any
August since 1924, but the amount of liabilities in­
volved in August 1932 failures was exceeded in five
of the seven earlier months this year and February,
March, June and July exceeded last month in num­
ber of insolvencies. The record of the Fifth dis­
trict in August was much, worse than the National
average in number of failures, but in liabilities in­
volved the district record was approximately in line
with the National increase. In the United States
as a whole, failures in August 1932 increased 44 per
cent and liabilities rose 45 per cent in comparison
with the figures for August 1931. P art of the
large percentage increase in Fifth district failures
in August was due to the unusually small number
of bankruptcies in the district in August 1931. In
the United States, all of the twelve reserve districts
reported more failures in August 1932 than in
August 1931, and all districts except San Francisco
also reported increased liabilities.

Employment
Reports on employment conditions in the Fifth
reserve district are conflicting, but on the whole
there appears to have been some improvement in
recent weeks. A number of industrial plants, espe­
cially in the textile field, have either taken on addi­
tional workers or have increased hours of work for
people already employed. On the other hand, in­
dustrial plants and business houses which have as
yet felt no stimulation in trade continue to lay off
workers. The states in the Fifth district are plan­
ning extensive highway construction programs for
the near future, partly in co-operation with Federal
aid funds and plans.

Coal Production
Bituminous coal produced in the United States in
August totaled 22,465,000 net tons, a seasonal in­
crease over 17,857,000 tons mined in July this year

4

MONTHLY REVIEW

but less than 30,534,000 tons brought to the surface
in August 1931. Total production of bituminous
coal this calendar year through September 10
amounted to 192,685,000 net tons, a decrease of 26.3
per cent under 261,483,000 tons mined in the cor­
responding period last year. The August 20 report
of the Bureau of Mines, Department of Commerce,
gave coal production figures by States for the
month oi July, 1932, W est Virginia with 5,632,000
tons holding first place over Pennsylvania, which
mined 5,015,000 tons. Total production in the Fifth
district was 6,224,000 net tons, or 34.9 per cent of
National production for July, compared with 9,677,000 tons, or 32.5 per cent of National production,
mined in the Fifth district in July 1931.

Textiles

There has been marked improvement in condi­
tions in the textile industry since the first week in
August, and the mills of the Fifth district have in­
creased operating time. Orders are in larger vol­
ume than for many months, and some mills are
sold up a month or two ahead. This increased
activity resulted from cotton price advances in
August. The mill authorities state that prices for
finished products have not advanced as yet to
profitable levels, but the management of most mills
are optimistic for business in textiles in the next
few months. In August 1932, Fifth district mills
consumed 185,548 bales of cotton, an increase of
30.3 per cent over 129,389 bales used in July this
year, but 6.0 per cent less than 197,404 bales con­
sumed in the district in August 1931. Last month
North Carolina mills consumed 91,994 bales, South
Carolina mills used 84,700 bales, and Virginia mills
8,854 bales, the Virginia figure being higher than
the one reported for August last year. Fifth dis­
trict consumption figures in August 1932 were 46.1
per cent of National consumption, compared with
46.4 per cent of National consumption attained by
the Fifth district mills in August last year.

Cotton Statistics

Cotton prices paid on ten leading Southern spot
markets rose from the middle of A i^u st through
the first week in September, but then declined and
lost more than half the recent advance. The drop
in price was caused by the unexpectedly high esti­
mate on 1932 production issued by the Department
of Agriculture on September 8. In our Reviezv last
month we told of the advance in prices from 5.65
cents per pound on August 5 to 7.11 cents per pound
on August 19, following the release of the first con­
dition report of the year on August 8. On August
26 the average price had risen to 8.27 cents, and on
September 2 the price was 8.41 cents. However,
the second condition report, released on September
8, was higher than the cotton trade expected, and
the price fell to 7.85 cents on September 9, and de­
clined further to 6.83 cents on September 16, the
latest date for which figures are available.
Condition figures on the 1932 cotton crop, the sec­
ond report of the year, were issued by the Depart­




ment of Agriculture on September 8. This report
estimated probable production in 1932 at 11,310,000
bales, based on the September 1 condition of 56.6
per cent of a normal on 36,611,000 acres remaining
in cultivation. The production estimate compares
with a forecast of 11?
306,000 bales made on August
1 and a crop of 17,096,000 bales ginned in 1931. The
September report placed Virginia’s 1932 crop at
30.000 bales, compared with 35,000 bales forecast
on August 1 and final ginnings of 42,000 bales in
1931. North Carolina’s probable production was
given as 514,000 bales, compared with 509,000 bales
forecast on August 1 and 758,000 bales grown last
year. South Carolina’s September 1 estimate of
599.000 bales compares with the August 1 estimate
of 590,000 bales and a 1931 crop of 1,005,000 bales.
The Department of Agriculture’s report raised the
figures for the Fifth district states to a total of
1.143.000 bales, an increase of 9,000 bales over the
August 1 forecast, but 660,000 bales below final
production figures for 1931. The decrease in 1932
production in the Fifth district is due to acreage
reduction, use of less fertilizer, and sharply in­
creased activity of boll weevils.
Ginning figures on this year’s crop, released by the
Census Bureau on September 8, indicate that the
crop is much earlier than the 1931 crop, warm and
dry weather having caused the cotton to open
early. Ginnings this year prior to September 1
totaled 865,232 bales, compared with only 565,753
bales ginned before the corresponding date last
year, but in 1930 ginnings to the same date totaled
1,879,919 bales.
Cotton consumption in the United States in August
1932 rose notably, and totaled 402,601 bales, com­
pared with 278,656 bales used in July this year and
425,030 bales in August 1931. Manufacturing estab­
lishments held 1,090,421 bales on August 31, com­
pared with 1,218,863 bales held on July 31 and
840,783 bales on August 31, 1931. Public ware­
houses and compresses held 6,547,563 bales in stor­
age at the end of August this year, compared with
6,703,453 bales so held a month earlier and 4,426,399
bales on August 31 last year. August exports
totaled 452,154 bales, compared with 449,476 bales
sent abroad in July 1932 and 211,030 bales exported
in August 1931. Spindles active at some time dur­
ing August numbered 22,022,490, compared with
19,758,252 in July this year and 25,630,136 in August
1931.
Cotton growing states consumed 338,170 bales in
August, compared with 239,186 bales used in July
and 341,765 bales in August 1931. Last month’s
consumption in the cotton growing states amounted
to 84.0 per cent of National consumption, a lower
percentage than 85.8 per cent in July this year but
above 80.4 per cent in August 1931. Of the 338,170
bales of cotton consumed in the cotton growing
states in August, the Fifth district mills used 185,548 bales, or 54.8 per cent, a lower percentage than
57.7 per cent of Southern consumption attained by
Fifth district mills in August last year.

MONTHLY REVIEW
On September 20, the Department of Commerce
issued a report on spindles in place, spindles active
in August, total spindle hours of operation in
August, and average hours of operation per spindle
in place in August. On August 31, 1932, there were
31,643,898 spindles in place in the United States,
Massachusetts leading with 6,167,572, or 19.49 per
cent of the total, North Carolina ranking second
with 6,165,616 spindles, or 19.48 per cent, and South
Carolina third with 5,695,614 spindles, or 18.0 per
cent. The Fifth district as a whole had 39.63 per
cent of total spindles in place in the United States
at the end of August 1932. In actual spindle hours
of operation, South Carolina led all states *for
August with 1,578,987,767 hours, or 28.5 per cent
of the National total of 5,539,006,107 hours, and
North Carolina ranked second with 1,247,779,366
hours, or 22.5 per cent, while Massachusetts had
only 444,894,614 hours, or 8.0 per cent. The Fifth
district, with 39.63 per cent of total spindles in the
United States in place in August, showed 53.4 per
cent of total hours of operation. In actual hours
of operation per spindle in place, the Fifth district
states did not compare quite so favorably with
others, South Carolina with an average of 277
hours per spindle ranking second, North Carolina
with 203 hours ranking fifth, and Virginia with
190 hours ranking sixth. The average hours of
operation for the United States was 175, consider­
ably lower than the average in any Fifth district
state.

Tobacco

South Carolina auction tobacco markets opened early
in August, and during the month sold 12,284,791
pounds of growers' tobacco for a total of $1,449,835,
an average of $11.80 per hundred pounds. The
price Was slightly higher than the average of
$10.62 per hundred pounds paid for 24,473,743
pounds in August 1931. The market at Mullins led
in sales last month with 4,215,230 pounds, Lake
City ranked; second with 2,411,232 pounds, and
Timmonsville third with 2,071,418 pounds. On a
basis of the September 1 condition, the South Caro­
lina tobacco crop for this year is estimated to be
33.280.000 pounds, an increase over the August 1
forecast of 32,000,000 pounds but much below the
1931 production of 70,070,000 pounds. This year's
production is only half of the five-year average
production of 68,328,000 pounds.
North Carolina had only a few tobacco markets
open during August, and figures on sales are not
available. The crop improved during the month,
and the forecast of production was raised from
266.560.000 pounds on August 1 to 277,032,000
pounds on September 1. The crop in 1931 totaled
479.526.000 pounds, and the five-year average is
403.133.000 pounds.
Virginia markets were not open in August. To­
bacco deteriorated during August, so the Septem­
ber forecast of 56,648,000 pounds is 2 per cent below
the August forecast. Flue-cured production is ex­
pected to be 33,000,000 pounds this year, compared




5

with the 1931 crop of 57,828,000 pounds. Fire-cured
tobacco is forecast at 14,274,000 pounds, only about
one-half of last year's production. The indicated
yield of burley tobacco this year is 7,228,000 pounds,
compared with 8,692,000 pounds in 1931. Sun-cured
tobacco was damaged by the August drought and
the indicated production of 2,030,000 pounds is only
two-thirds of the small crop harvested last year.
Maryland tobacco is forecast at 25,702,000 pounds
this year, compared with 32,160,000 pounds cured in
1931 and a five-year average production of 24,369,000 pounds.
West Virginia has a very small tobacco crop this
year, estimated production being only 2,875,000
pounds, compared with 5,320,000 pounds harvested
in 1931.

Agricultural Notes

Prospects for agricultural yields in the Fifth re­
serve district are nearly all below the ten-year
average, the composite figures, based on average
production from 1919 to 1928 as 100, being Mary­
land 86.0, Virginia 81.6, W est Virginia 79.9, North
Carolina 83.4, and South Carolina 88.7.
Maryland crops suffered during August from dry,
hot weather, and average indicated production for
all crops declined 2.2 per cent. Corn prospects de­
clined half a million bushels, and on September 1 a
yield of only 15,540,000 bushels was forecast, com­
pared with 20,710,000 bushels harvested in 1931.
The oats crop is estimated at 1,440,000 bushels,
which is slightly less than the August 1 forecast,
and 570,000 bushels less than the 1931 yield. Pro­
duction of Irish potatoes is now forecast at 3,162,000 bushels, compared with 3,360,000 bushels
harvested last year. An average crop of sweet
potatoes is in prospect and a yield of 1,350,000
bushels is forecast, compared with last year's large
crop of 2,013,000 bushels. Maryland's hay crop is
expected to be approximately 473,000 tons, com­
pared with 469,000 tons cured last year, but the
condition of pastures on September 1 was much
worse than last year.
Virginia crop prospects declined considerably dur­
ing August as a result of unfavorable weather con­
ditions. Rainfall was unusually light throughout
the state, with some sections having practically no
rain, but in the Eastern and Southwestern counties
conditions were more favorable. All crops were
seriously injured and late crops of corn, potatoes,
and hay will be almost complete failures. Early
crops were good, however, and therefore feed sup­
plies are larger than in 1930, although some sec­
tions of the state have had nearly as severe a
drought this year as in the earlier year. Plowing
for fall grains has been considerably delayed, pas­
tures and farm gardens have dried up completely
in most sections, and there will be a shortage of
late vegetables. Corn prospects declined last month
and on September 1 the crop was forecast at 27,000,000 bushels, compared with 43,061,000 bushels
gathered in 1931 and a five-year average of 35,-

6

MONTHLY REVIEW

681.000 bushels. Oats turned out slightly better
than expected and total production of 3,145,000
bushels compared with 4,838,000 bushels last year
and a five-year average of only 2,971,000 bushels.
Late hay crops were badly damaged, and the fail­
ure of pastures caused cattle to be turned on the
hay fields. As a result, very little late hay will be
harvested, but the early crop turned out well, and
final production estimated at 847,000 tons is there­
fore not seriously below last year’s yield of 993,000
tons. The peanut crop on September 1 was criti­
cally in need of rain, and it is probable that the
crop was materially reduced by the dry weather
of September. However, indications on September
1 were for a yield of 126,000,000 pounds of nuts
this year, compared with 164,160,000 pounds grown
in 1931 and a five-year average of 124,463,000
pounds. The late Irish potato crop was so seri­
ously damaged by the August drought that in some
sections growers state that the crop is a total fail­
ure, and under best conditions in September the
final yield will be small. Most of Virginia's potato
crop is dug in June and July, however, so the esti­
mated production of all potatoes, 9,400,000 bushels,
compares with 14,278,000 bushels dug last year.
Sweet potatoes declined in condition during August,
and the September 1 forecast of 3,800,000 bushels
is materially less than the 1931 yield of 4,750,000
bushels. Fruit prospects on September 1 were lower
than on August 1, dry weather having reduced the
size of apples, peaches and pears. The 1932 com­
mercial apple crop of 1,920,000 barrels is only a
little more than half the 1931 yield of 3,500,000
barrels.
North Carolina crops improved on the whole dur­
ing August.Corn was helped by rains during the
month, but not sufficiently to overcome the ex­
treme dryness of July, and therefore this year’s
forecast of 35,520,000 bushels is not only lower than
last year's large crop of 48,072,000 bushels but is
also below the five-year average production. The
oats crop of 3,978,000 bushels is less than last year's
yield of 4,531,000 bushels, but is above the five-year
average production of 2,756,000 bushels. A peanut
crop of 239,400,000 pounds is forecast on the basis
of the September 1 condition, compared with 305,900.000 pounds in 1931 and a five-year average of
198.039.000 pounds. The acreage in peanuts in
North Carolina is the same this year as last. The
hay crop is forecast at 551,000 tons, compared with
677.000 tons in 1931, and pastures on September 1
showed an average condition of 64 per cent, com­
pared with 89 per cent a year earlier. North Caro­
lina's 1932 sweet potato crop forecast is 7,120,000
bushels, compared with 6,560,000 bushels dug in
1931 and 6,185,000 bushels the five-year average.
Prospects for apples are much below those of last
year, a total of 1,752,000 bushels this year com­
paring with 5,328,000 bushels in 1931 and a fiveyear average of 4,479,000 bushels. This year's com­
mercial app1* crop is only 114,000 barrels.
South Carolina weather was favorable in August




for growing crops and prospects improved. Com­
pared with a month earlier, the outlook on Septem­
ber 1 was for 2 per cent more cotton, 4 per cent
more tobacco, 5 per cent more corn, 14 per cent
more potatoes, and 50 per cent more hay. The
combined production outlook for these five crops
was 7 per cent better than on August 1 but was
28 per cent below the 1931 final production. The
tobacco crop is off 53 per cent from last year, cot­
ton is off 40 per cent, and corn 22 per cent. Hay
and sweet potatoes are 13 and 51 per cent, re­
spectively, above the 1931 yields. A corn crop of
18.040.000 bushels is forecast, compared with 22,994.000 bushels harvested in 1931. This year's
sweet potato crop of 4,800,00 bushels is much more
than 3,180,000 bushels dug in 1931. A hay crop of
178.000 tons compares with 202,000 tons cured last
year. Present prospects are for a yield of peanuts
totaling 9,100,000 pounds, exactly the same yield
secured last year. Tree fruits were only fair in
South Carolina this year, the peach crop being less
than half that of last year, which was unusually
large.
West Virginia crops generally declined during
August, and on September 1 lower condition figures
were reported than on August 1 for most crops.
Corn prospects indicate a yield of 10,388,000 bush­
els this year, compared with 12,934,000 bushels
harvested in 1931. The present low condition of
oats indicates a crop of 2,584,000 bushels, compared
with the 1931 yield of 3,552,000 bushels. The Irish
potato crop improved during the month of August,
and the forecast of 3,280,000 bushels is above 3,200,000 bushels harvested in 1931. Hay production of
551.000 tons is predicted this year, compared with
650.000 tons last year. Dry weather in August
further reduced pasturage, and the September 1
condition of 66 per cent compares with 86 per cent
last year. A commercial apple crop of 651,000 bar­
rels is expected to move into commercial channels
this year, compared with 1,700,000 barrels in 1931.

Construction
Building permits issued last month in thirty-two
cities of the Fifth Federal reserve district for all
classes of work totaled 2,424, compared with 3,282
permits issued in August last year, a decrease of
26.1 per cent, and last month's valuation of $2,991,712 was 51 per cent less than the August 1931
valuation of $6,102,074. Five of the thirty-tw o re­
porting cities showed higher valuation figures for
the 1932 month, but only one of them, Danville,
Va., reported figures in line with population figures.
Contracts awarded in August for construction work
in the Fifth district, including both rural and urban
projects, totaled $13,611,282, compared with $12,548,985 awarded in August 1931, according to
figures collected by the F. W. Dodge Corporation.
Of the awards in August this year, $2,621,202, or
only 19.3 per cent, was for residential work, while
last year residential contracts totaled $4,195,990, or
33.4 per cent of all awards.

MONTHLY REVIEW

Building Permits Issued, Fifth District Cities,
August 1932 and 1931
CITIES

Permits Issued
1932
1931

1,071
Baltimore, Md........
7
Cumberland, Md.....
18
Frederick, Md.........
19
Hagerstown, Md.....
12
Salisbury, Md. w
---10
Danville, Va...........
30
Lynchburg, Va.......
114
Norfolk, Va...........
9
Petersburg, Va.......
25
Portsmouth, Va......
94
Richmond, Va.........
18
Roanoke, Va...........
5
Bluefield, W. Va.........
97
Charleston, W. Va.
15
Clarksburg, W. Va.....
23
Huntington, W. Va.
22
Asheville, N. C___
43
Charlotte, N. C---10
Durham, N. C----41
Greensboro, N. C...
9
High Point, N. C...
16
Raleigh, N. G......... ..
10
Rocky Mount, N. C...
5
Salisbury, N. C__
14
Wilmington, N. G
46
Winston-Salem, N. C.
37
Charleston, S. C...
36
Columbia, S. C----21
Greenville, S. C__
13
Rock Hill, S. C.__
20
Spartanburg, S. C...
514
Washington, D. C...
Totals ________




2,424

1,034
6
3
16
15
12
32
119
7
41
112
51
9
24
19
26
29
50
17

32
23
20
4
9

17
66
48
52
27
13
19
1,330

Total Valuation
1932
1931
$ 886,320
$1,128,120
11,600
5,600
7,501
485
9,125
20,220
4,450
14,650
231,815
7,380
28,654
43,925
105,829
237,753
8,136
6,500
13,515
30,284
108,586
460,847
25,086
142,035
8,468
2,070
41,314
42,592
22,860
26,525
5,180
16,200
9,370
45,710
104,412
121,452
16,025
32,325
11,702
38,296
4,775
71,940
4,512
113,725
9,850
3,400
6,615
25,335
4,050
150,700
20,550
22,860
18,395
33,515
4,925
58,977
4,040
36,805
3,445
6,975
3,465
8,625
1,017,740
3,375,650

3,282 $2,991,712

$6,102,074

7

Retail Trade* 33 Department Stares

Richmond Baltimore Washington Other Cities District

August 1932 sales, compared with sales in August 1931:
—25.4
—26.3
—14.5
—30.1
—22.2
Total sales Jan.-August 1932, compared with Jan.-August 1931:
—21.6
-i21.3
—16.1
—26.3
—19.7 .
Aug. 31, 1932 stocks, compared' with stocks on Aug. 31, 1931:
—19.0
—15.9
—12.0
—22.2
—15.6
Aug. 31, 1932 stocks, compared with stocks on July 31, 1932:
— 6.3
+ 1.3
— 3.4
— 2.7
— 1.8
Number of times stock was turned in August 1932:
.237
226
255
.188
234
Number of times stock was turned since January 1, 1932:
2.232
2.227
2.348
1.594
22
Percentage of Aug. 1, 1932, receivables collectd in August:
24.7
19.7
26.4
20.6
22.6

Wholesale Trade* 62 Firms
22

9

Groceries Dry Goods

6
Shoes

13

Hardware

12

Drugs

August 1932 sales, compared with sales in August 1931:
—16.8
—19.7
—16.2
—26.6
—19.5
August 1932 sales, compared with sales in July 1932:
-f- 6.6
+70.3
+116.3
+31.9
+10.2
Jan.-Aug. 1932 sales, compared with sales in Jan.-Aug. 1931:
—17.1
—27.9
—17.1
—21.9
—18.4
August 31, 1932 stocks, compared with August 31, 1931, stocks:
—-13.4(8*) —27.8(4*) —33.6(5*) —13.8(7*)
____
August 31, 1932 stocks, compared with Julv 31, 1932 stocks:
+ 2.2(8*) — 2.9(4*) — 5.4(5*) — 1.2(7*)
____
Percentage of August 1, 1932, receivables collected in August:
53.8(13*) 30.7(6*)
33.1(6*)
21.7(11*) 43.7(8*)
♦Number of reporting firms.

(Compiled September 21, 1932)

MONTHLY REVIEW

8

BUSINESS CONDITIONS IN THE UNITED STATES
(Compiled by the Federal Reserve Board)
Volume of industrial production increased from
July to August by considerably more than the usual
seasonal amount, reflecting chiefly expansion in
activity at textile mills. Wholesale prices advanced
during August and the general level prevailing in
the first three weeks of September was somewhat
higher than in other recent months. There was a
further growth in the country’s stock of monetary
gold and a non-seasonal return flow of currency to
the reserve banks.

Production and Employment
Industrial output increased substantially in Aug­
ust and the Board’s seasonally adjusted index show­
ed an advance from 58 to 60 per cent of the 192325 average. Activity at cotton, woolen, silk, and
rayon mills increased from the low level of other
recent months by considerably more than the usual
seasonal amount, and there was also a substantial
increase in activity at shoe factories. Output of
automobiles, however, declined further and pro­
duction in the steel and lumber industries showed
none of the usual seasonal increase in August. Dur­
ing the first three weeks of September there was
a slight advance in steel output.
Employment at factories increased slightly more
than is usual at this season. There were large ad­
ditions to working forces in the textile, clothing,
and leather industries, while in the automobile, tire,
and machinery industries and at car-building shops
the number employed decreased further. Aggre­
gate wage payments increased less than seasonally.
Building contracts awarded up to September 15,
as reported by the F. W. Dodge Corporation, indi­
cate that for the third quarter the total value of
contracts will be about the same as for the second
quarter, whereas usually awards for the third quar­
ter are smaller. Currently, contracts for public
works are a considerably larger part of the total
than they were at the beginning of the year and
residential contracts are a smaller part.
Department of Agriculture crop estimates based
on September 1 conditions indicate little change in
prospects during August. Indicated crops of wheat
and tobacco are considerably smaller than in other
recent years, while the corn crop is the largest
since 1925. The cotton crop is estimated at 11,300,000, a decrease of about 6,000,000 bales from the
large crop of a year ago.




Distribution
Volume of merchandise and other freight hand­
led by the railroads increased seasonally during
August, while during the corresponding period a
year ago no increase was reported. Department
store sales of merchandise increased from July to
August by somewhat less than the usual seasonal
amount.

Wholesale Prices

Wholesale commodity prices advanced from 64.5
per cent of the 1926 average in July to 65.2 per cent
in August, according to the monthly index of the
Bureau of Labor Statistics. During August prices
of many leading commodities including textile raw
materials and finished products, wheat, hides, nonferrous metals, sugar, rubber, and coffee, increased
substantially. In the first half of September there
were declines in the prices of many of these com­
modities, while prices of wool and woolen goods,
cattle, and hides advanced.

Bank Credit

During recent weeks further growth in monetary
gold stock, a return flow of currency from hoards,
and new issues of national bank notes have resulted
in additions to the reserve funds of member banks.
These banks have employed a part of the funds in
further reducing their borrowings at the reserve
banks, and have accumulated a part as reserve bal­
ances, which at the present time are more than
$300,000,000 in excess of required reserves. Re­
serve bank holdings of United States Government
securities and of acceptances remained practically
unchanged during the four weeks ending Septem­
ber 14, while the total of reserve bank credit de­
clined by $43,000,000 through the reduction of dis­
counts for member banks.
Loans and investments of reporting member
banks in leading cities showed little change be­
tween the middle of August and the middle of Sep­
tember. A further decline of more than $150,000,000 in loans by banks outside New York City
during the past four weeks was offset in large part
by continued increase in investment holdings,
chiefly at member banks in New York City. There
was a considerable growth in deposits of reporting
member banks, reflecting in part larger balances
held by city banks for the account of other banks.
Money rates in the open m arket remained un­
changed at low levels during August and the first
half of September.

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