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MONTHLY REVIEW
of Financial and Business Conditions

F ifth
Federal

eserve
nc.

Federal Reserve Bank, Richmond, Va.
T

H E Federal Reserve Bank of Richmond, with the
approval of the Board of Governors of the Federal
Reserve System, lowered its basic discount rate from 2
per cent to \y 2 per cent on August 27, in order to assist
member banks in financing seasonal crop movements in
the district. Discounts at the Reserve bank did not ad­
vance in the first half of September, but on the contrary
declined from the August level. Between August 15 and
September 15 the seasonal rise in Federal Reserve note
circulation continued as additional tobacco markets opened
and other crops began to move. Member bank reserves
were increased during the month, and the Reserve bank's
cash reserves also rose. Reporting member banks showed
some increase in loans and discounts between August 11
and September 15, but their investments showed a mate­
rial decline. Both demand and time deposits showed small
declines last month, but deposits in mutual savings banks
rose to the highest point on record. Debits to individual
accounts figures in 24 Fifth district cities declined season­
ally by 9.2 per cent in August in comparison with July,
but exceeded August 1936 debits by 6.9 per cent.
There were no marked changes in business and indus­
try in the Fifth Reserve district in August and early Sep­
tember, and on the whole developments followed seasonal
trends. In employment fields, the trend was upward,
with additional workers being needed at tobacco markets,
coal mines, and in agricultural sections for harvest work,
while employment in construction and other lines subject
to weather conditions held up well. The commercial fail­
ure record in the district in August was much better than
the National record, the district showing fewer failures
and lower liabilities than in August 1936 while both num­
ber and liabilities increased for the country as a whole.
New auto registrations, which in July fell below July 1936
registrations, rose in August 6.8 per cent above August
1936 figures. There was a seasonal decline in new car
sales last month in comparison with July sales. Construc­
tion provided for in August building permits was 21.2




^

R

i sD r i c t
t

September 30, 1937
per cent above that of August last year, and contracts ac­
tually awarded last month exceeded those awarded in Au­
gust 1936 by 4.2 per cent. Bituminous coal production
rose 1.7 pper cent last month over production in the same
month last year. Textile mills, after a seasonal decline
in operations in July, increased working time and cotton
consumption in August and again exceeded figures for the
corresponding month of the preceding year. Both cotton
prices and quotations on yarn, gray goods and finished
goods declined steadily during August and the first half
of September, being adversely affected by increasing evi­
dence of an unusually large cotton crop this year. To­
bacco manufacture exceeded August 1936 production in
all branches of the industry last month. Auction tobacco
markets in the Carolinas reported large sales in August,
with prices at relatively high levels in view of materially
increased production this year. Retail trade in department
stores was between 3 and 4 per cent higher in dollar vol­
ume in August than in August last year, South Carolina
stores making the best record with a gain of 9.2 per cent.
Wholesale trade in August was in larger dollar volume
than in August 1936 in all five lines for which data are
available, hardware leading with an increase of 13.7 per
cent.
Crop prospects on the whole remained about the same
during August, with some crops improving while others
lost ground. Perhaps the most important change was a
reduction in cotton estimates for Fifth district states while
the National estimate was rising.
There follows a statistical summary of conditions de­
scribed above:
%
Aug. 1937_____ Aug. 1936 Change
Debits to individual accounts (24
cities) ............................................ ... $1,201,523,000 $1,124,464,000
+ 6.9
No. of business failures, 5th district
26
38 — 31.6
Liabilities in failures, 5th district.. $
182,000 $
294,000
—38.1
Sales, 53 dept, stores, 5th district.. . $
7,137,517 $
6,910,707
+ 3.3
Sales, 59 wholesale firms in 5 lines $
6,279,487 $
5,986,422
+ 4.9
Registrations, new passenger autos.
21,855
20,466 + 6.8
Value bldg. permits (31 cities)........ ... $
8,518,978 $
7,027,510
+21.2
Value of contracts awarded, 5th dist. $ 29,456,600 $ 28,273,600
+ 4.2
Cotton consumption, 5th dist. (Bales)
289,841
271,480 + 6.8
Soft coal mined, U. S. (Tons)..........
33,665,000
33,086,000 + 1.7

MONTHLY REVIEW

2

BA N K IN G CONDITIONS

CITIES

R eserve B a n k S ta te m e n t : Discounts for member
banks declined between the middle of August and the
middle o f September, after advancing to the highest point
in several years, and industrial advances for working capi­
tal also declined slightly, while the portfolios o f open
market paper and Government securities remained un­
changed. The net reduction in total earning assets was
$647,000 during the month. There was a seasonal in­
crease in Federal Reserve notes in actual circulation
amounting to $8,397,000 between August 15 and Septem­
ber 15, due in large part to opening of additional auction
tobacco markets in North Carolina and the beginning of
the new cotton marketing season. Member banks in­
creased reserve deposits by $7,677,000 last month, and
cash reserves of the Federal Reserve Bank o f Richmond
rose by $16,053,000. On Augusi: 27 the Richmond R e­
serve bank lowered the discount rate from 2 per cent to
\y2 per cent.
000 omitted
Aug. 15
Sept. 15
1937
1937

ITEMS
Discounts held ............................................
Open market paper ....................................
Industrial advances ...................................
Government securities ...............................Total earning assets ............................. .
Circulation of Fed. Res. Notes...............
Members’ reserve deposits .........................

677
120
2,481
133,035
136,313
203,779
221,413
322,600
71.20

$

1,266
120
2,539
133,035
136,960
195,382
2,13,736
306,547
70.12

V
,

Sept. 15
1936
$

140
121
4,133
128,011
132,405
190,136
202,444
294,891
70.06

Maryland
Baltimore ..........
Cumberland ........
Hagerstown ........
Dist. of Col.
Washington . . . .
Virginia
Danville .............
Lynchburg ..........
Newport News ..
Portsmouth ........
Richmond ............
Roanoke ..............
West Virginia
Charleston ..........
Huntington ........
North Carolina
Asheville ............
Charlotte ............
Greensboro ..........
Wilmington ........
Winston-Salem ..
South Carolina
Charleston ..........
Columbia ............
Greenville ..........
Spartanburg . . . .
District, 24 Cities

Aug.
1937

000 omitted
July
Aug.
1936
1937

% of Change
Year
Month

$ 344,857
9,533
8,700

$ 380,479
11,082
11,020

$ 321,479
8,836
8,074

— 9.4
— 14.0
— 21.1

+
+
+

7.3
7.9
7.8

228,398

266,015

221,447

-1 4 .1

+

3.1

8,518
13,939
8,638
47,073
3,701
159,849
27,286

9,509
17,497
11,161
54,397
4,246
160,072
30,761

6,596
13,592
9,483
43,243
3,630
146,389
25,877

— 10.4
— 20.3
— 22.6
— 13.5
— 12.8
— .1
-1 1 .3

+ 29.1
+ 2.6
- 8.9
+ 8.9
+ 2.0
+ 9.2
+ 5.4

50,858
17,788

60,078
19,493

43,413
16,690

— 15.3
— 8.7

+ 17.1
+ ' 6.6

13,897
55,715
37,106
16,948
31,174
11,496
39,584

14,306
57,824
27,752
20,170
40,144
10,834
40,498

12,268
53,108
32,728
18,064
33,276
9,562
34,952

— 2.9
— 3.6
+ 33.7
— 16.0
— 22.3
+ 6.1
- 2.3

+ 13.3
+ 4.9
+ 13.4
— 6.2
— 6.3
+ 20.2
+ 13.3

16,259
23,718
18,042
8,446
$1,201,523

19,160
26,897
20,541
9,488
$1,323,424

12,656
22,121
18,914
8,066
$1,124,464

— 15.1
-1 1 .8
— 12.2
-1 1 .0
— 9.2

+ 28.5
+ 7.2
- 4.6
+ 4.7
+ 6.9

M utual Savings Bank D eposits: Ten mutual savings
banks in Baltimore had deposits totaling $217,294,470 on
August 31, 1937, an increase of three-tenths of 1 per
cent over $216,704,389 on deposit on July 31, 1937, and
3.6 per cent above $209,767,995 on deposit on August 31,
1936. Aggregate deposits in the ten reporting banks on
August 31, 1937, were the highest on record.

B U SIN E SS CONDITIONS
41 R e p o r t i n g M e m b e r B a n k s : Fortyone regularly reporting member banks in 12 Fifth district
cities increased their loans and discounts by $4,909,000
between August 11 and September 15, and also built up
their reserves at the Reserve bank by $7,268,000, but their
investments in securities declined by $23,482,000 and their
cash in vaults dropped by $1,166,000. Demand deposits
showed a decrease of $249,000 during the five weeks under
review, and time deposits declined by $658,000.
S t a t e m e n t of

Sept. 15
1937

ITEMS

000 omitted
Aug. 11
1937

Sept. 16
1930

$242,022
398,336
128,683
18,223
462,651
198,218
0

$208,780
432,097
133,340
16,626
437,645
196,737
0

...........

$246,931

...........
...........
Demand deposits
........................... ............
...........
Money borrowed ...........................................

135,951
17,057
462,402
197,560
0

Reserve bal. with F. R. Bank

D eb its to I n d iv id u a l A c c o u n t s : There was a seasonal
decline in debits to individual accounts in the banks of
24 Fifth district cities in August in comparison with
debits in July, due chiefly to semi-annual payments made
in the earlier month, but debits in August this year were
6.9 per cent above those of A ugt st last year. A ll report­
ing cities except Durham and Wilmington, N. C., reported
lower figures for August than for July, but all o f the
24 cities except Newport News, Greensboro, Raleigh and
Greenville reported higher figures, than for the correspond­
ing month last year.




E mployment :

On the whole, employment appears to
have increased slightly in the Fifth district last month.
Opening of North Carolina tobacco markets in August
and September increased the need for workers in the
market towns. Coal production also increased in August
in comparison with July, and harvesting materially raised
the demand for agricultural workers. The textile and
tobacco industries operated at approximately the same
rates in August as in July, and little change was noted
in construction work. The following figures, compiled
for the most part by the Bureau of Labor Statistics from
records submitted by a large number of identical indus­
tries, show the trends of employment and payrolls in the
Fifth district from June to July 1937, the latest available
o

*
STATES

Maryland ................................................................
D. of Columbia....................................................
Virginia ................................................................
West Virginia ....................................................
North Carolina.................................................... «
'
South Carolina ..................................................

Percentage change from
June to July 1937
In number In amount
on payroll
of payroll
+
.9
— 1.9
— 2.9
- 2.0
-1 .0
- 3.1
- 1.5
- 4.9
— 2.3
- 7.4
+
.1
- 1.3

Commercial Failures: Dun & Bradstreet reports that
business failures in the Fifth Federal Reserve district in
August declined 31.6 per cent in comparison with failures
in August 1936, and liabilities involved declined 38.1 per
cent, in contrast with increases of 7.9 per cent in number
of insolvencies and 44.1 per cent in liabilities involved
in failures in the United States. Only 3 of the 12 Fed­
eral Reserve districts had fewer failures in August 1937

MONTHLY REVIEW

than in August 1936, and only 5 districts reported lower
liabilities last month.
Number of failures
District U. S.

PERIOD

Total Liabilities
District
U. S.

August 1937........................... .........26
July
1937........................... .........27
August 1936....................................38

707
618
655

$ 182,000
180,000
294,000

$ 11,916,000
7,766,000
8,271,000

8 Months, 1937..................... ........ 326
8 Months, 1936..................... ........336

5,967
6,608

$2,746,000
5,541,000

$ 74,497,000
105,348,000

A utomobile N ew C ar R egistrations : Automobile
sales in the Fifth district in August showed a seasonal
decline from July sales, but in comparison with sales in
the same month last year August made a better record
than July. Four o f the 6 geographical divisions o f the
district showed larger sales in August 1937 than in A u ­
gust 1936, while in July 1937 only one division exceeded
July 1936 sales. Registrations in the district of the three
most popular makes made up 62.5 per cent o f all regis­
trations in August this year, compared with 72.6 per cent
in August last year. The following figures were collected
by R. L. Polk & Company, o f Detroit:
Registration of New Passenger Cars
STATES
Maryland ........
D. of Col.............
Virginia ..........
West Va............
No. Carolina .
So. Carolina . . .
District ........

Aug.
Aug.
Change 8 Months 8 Months
19371936
1937
1936
4,245
3,583+18.5
35,038
31,507
2,435
2,525— 3.6
22,034
24,182
4,490
4,582— 2.0
37,445
35,884
3,370
3,032+11.1
27,843
28,011
4,741
4,529+ 4.7
38,905
32,596
2,574
2,215+16.2
20,533
16,320
21,855
20,466
+ 6.8 181,798
168,500

Change
+11.2
— 8.9
+ 4.4
— .6
+19.4
+25.8
+ 7.9

Construction : There were 2,564 building permits is­
sued in 31 Fifth district cities in August, a decrease of
12.3 per cent under 2,922 permits issued in August 1936,
but in the more important matter of estimated valuation
the August 1937 total of $8,518,978 exceeded the August
1936 total of $7,027,510 by 21.2 per cent. Seventeen of
the 31 cities reported higher valuation figures last month.
Contract award figures for July, now available by States
in F. W. Dodge Corporation reports, show an increase
in the Fifth district of 28.5 per cent over awards in July
1936. Contract award figures include rural as well as
urban projects, and are a better measure of construction
activity than building permit figures.
Construction Contracts Awarded
STATES
Maryland ................................. .
D. of Col....................................
Virginia ....................................
West Virginia ....................... .
North Carolina .......................
South Carolina
...................
District .................................

July 1937
$ 6,450,100
5,663,800
5,177,900
2,721,500
5,002,200
2,913,900
$27,929,400

July 1936% Change
$ 4,348,100
+ 48.3
4,867,100
+ 16.4
3,385,600
+ 52.9
2,716,100
+
.2
4,411,200
+ 13.4
2,013,900
+ 44.7_
$21,742,000
+ 28.5

Coal M ining : In August 1937 bituminous coal produc­
tion in the United States totaled 33,665,000 net tons, an
increase of 1.7 per cent over 33,086,000 tons dug in Au­
gust 1936, and total output this calendar year to Septem­
ber of 287,688,000 tons was 8.2 per cent larger than
265,922,000 tons mined in the corresponding period last
year. Hampton Roads ports shipped 15,043,920 tons be­
tween January 1 and September 11 this year, an increase
of 14.7 per cent over 13,114,642 tons shipped to Sep­
tember 1 1 last year. Official figures by States for July
production in tons this year and last are now available




3

from reports of the National Bituminous Coal Commis­
sion :
Soft Coal Production in Tons Percentage
July 1937
July 1936
Change

STATES
West V irginia................
Virginia ...................................
Maryland .................................
5th District .......................
United States ...................

9,460,000
1,077,000
110,000
10,647,000
31,912,000

9,488,000
900,000
120,000
10,508,000
32,005,000

— .3
+19.7
— 8.3
+ 1.3
— .3

Cotton T extiles : In spite of a steady decline in raw
cotton and cotton textile products prices during the past
month, textile mills in both the Fifth district and the
United States increased operations in August over July,
an increase which occurs at that time in most years.
Cotton consumption in the Fifth district in August again
exceeded consumption in the corresponding month last
year, after falling below the 1936 figure in July this year.
Consumption of cotton by States in the district in
August 1937, July 1937, and August 1936, in bales, is
shown below:
MONTHS

No. Carolina So. Carolina Virginia

District

August 1937.................................
July
1937.................................
August 1936.................................

149,923
143,568
146,433

123,763
118,014
111,304

16,150
14,833
13,743

289,841
276,415
271,480

8 Months, 1937...........................
8 Months, 1936...........................

1,355,388
1,162,534

1,031,463
880,990

120,767
110,228

2,507,618
2,153,752

Figures on spindle activity in July were released by the
Bureau of the Census on August 20. There were 26,987,716 spindles in place in American mills on July 31,
of which Fifth district mills had 12,394,382 spindles.
Actual spindle hours of operation in July totaled 7,665,035,632 hours in the United States, South Carolina rank­
ing first with 2,036,964,470 hours and North Carolina sec­
ond with 1,685,432,647 hours. South Carolina also led in
actual hours of operation per spindle in place with 358,
compared with the National average of 284, and Virginia
was in third place with 319 hours. North Carolina with
an average of 279 hours per spindle was below the Na­
tional average.
Cotton : Continuation of favorable weather for cotton
growth during August, and a forecast of probable pro­
duction on September 8 considerably larger than the
Cotton Consumed and On Hand
(Bales)
August 1937

Fifth district states:
Cotton consumed ...................................
Cotton growing states:
Cotton consumed ...................................
Cotton on hand August 31 in
Consuming establishments................
Storage & compresses .....................
United States:
Cotton consumed .................................
Cotton on hand August 31 in
Consuming establishments ..............
Exports of cotton ....................................

289,841

August 1936
271,480

505,449

480,868

732,004
3,436,855

584,893
4,272,372

.604,380

575,014

960,899
3,504,127
220,415

755,788
4,308,995
182,487

trade expected, caused spot cotton prices to decline stead­
ily during August and the first half of September. The
average price of middling grade upland cotton on ten
Southern markets dropped from 11.18 cents per pound
on August 6 to 8.70 cents on September 17. However,
the Government's loan plan of 9 cents per pound on a
middling grade basis is expected to prevent prices falling
much below the September 17 quotation. On September
8 , the Department of Agriculture issued a forecast of
16,098,000 bales for this year's crop, an increase of 505,000 bales over the August 9 report, and an increase of

4

MONTHLY REVIEW

3,699,000 bales, or 29.8 per cent, over 12,399,000 bales
picked in 1936. In the Fifth district, prospects declined
last month in both Carolinas and Virginia, but remained
materially above the 1936 figures. The Virginia forecast
of 40,000 bales is 21 per cent above last year’s yield, North
Carolina with 686,000 bales is up 15 per cent, and South
Carolina with 856,000 bales is 5 per cent higher than in
1936.
T obacco M arketing : Auction tobacco markets in South

Carolina and 7 towns in North Carolina opened early in
August, and later in the same niDnth markets in the New
Bright belt in North Carolina opened. All sales in Au­
gust were of flue-cured tobacco, and figures were as fol­
lows :
Producers’ Tobacco Sales, Pounds Price per Hundred
August 1937
August 1936
1937
1936

STATES
South Carolina ............
North Carolina ............

41,372,414
48,172,893

20,076,330
20,576,369

$23.56
23.46

$22.78
23.49

The markets in the New Bright belt did not open in
1936 until September, but this year these markets sold
12,703,296 pounds in August.
The Bureau of Internal
Revenue reports tobacco products manufactured in Au­
gust 1937 and 1936 as follows:

crops in the district as a whole. In contrast with an
increase last month in the National cotton estimate, that
crop declined in the three cotton growing states in the
district. Corn prospects declined in August in Maryland,
Virginia and West Virginia, and remained unchanged in
the Carolinas. The estimates for Irish potatoes were in­
creased in all Fifth district states except Maryland. Mary­
land sweet potato prospects also declined, while Virginia
prospects remained unchanged and those in the Carolinas
rose. Tobacco declined in August in West Virginia, was
unchanged in Maryland, and improved in Virginia and
both Carolinas. Estimates for apple production were low­
ered for Virginia last month, remained unchanged for
West Virginia and North Carolina, and were raised for
Maryland. Pastures, which had been exceptionally good
all Summer, improved further in August throughout the
Fifth district except in West Virginia.
Forecasts of probable production in the Fifth Reserve
district this year, based on September 1 condition figures,
are shown herewith in comparison with yields in 1936 and
the five-year period 1928-1932:

T obacco M anufacturing:

Aug. 1937
Smoking & Chewing
Tobacco, Pounds .................
Cigarettes, Number ...............
Cigars, Number .....................
Snuff, Pounds ...........................

R etail T rade

in

+ 5.5
+ 2.4
+ 1-2
+ 3.3

Same stores by
States, with 25
stores added:
Virginia ( 1 0 )...
West. Va. (10 )..
No. Carolina (7)
So. Carolina (11)
District (53 )..

24,014,224
13,430,194,483
445,975,527
2,741,396

% Change
+ 5.6
+12.4
+ 1.6
+ 9.8

Net Sales
Jan. 1 to da ie
compared with
same period
last year
+ 7.8
+ 1.0
+ 7.5
+ 4.6

Stocks
Aug. 31, 1937
compared with
Aug. 31 July 31
1936
1937
+
+
+
+

9.0
10.6
13.8
10.5

+13.6
+ 4.5
+ 8.4
+ 8.7

Ratio Aug.
collections
to accounts
outstanding
August 1
27.7
24.4
26.4
25.8

1936

40,000 —
686,000 —
856,000 —

33,000
597.000
816.000

1928-1932

Corn (Bushels)
Maryland .........
Virginia ...........
West Virginia .
North Carolina
South Carolina
Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina .

18,080,000 —
37.350.000 —
14.256.000 —
44.194.000
24.210.000

18.396.000
30.014.000
11.569.000
43.475.000
23.635.000
Irish Potatoes (Bushels)
3.444.000 —
10,904,000 +
3.360.000 +
9.292.000 +
2.875.000 +

14.431.000
30.388.000
11.054.000
38.415.000
20.240.000

2.940.000
7.380.000
1.920.000
5.986.000
1.656.000

3.339.000
14,328,000
3.445.000
7.540.000
2.748.000

1,200,000
4.366.000
7.560.000
4.845.000

1.299.000
4.270.000
7.141.000
4.648.000

29.600.000
96.734.000
1,282,000
457,373,000
73.350.000

24.318.000
98.409.000
4,224,000
469,135,000
75.918.000

327.000
605.000
508.000
680.000
442,000

448.000
868.000
639.000
571.000
255.000

2.014.000
8.500.000
4.395.000
1,890,0010

2.067.000
13,116,000
6.837.000
3.199.000

151.200.000
243.960.000
8,160,000

148.324.000
223.450.000
8,760,000

Sweet Potatoes (Bushels)
Maryland ..........
Virginia ............
North Carolina
South Carolina

1.440.000 —
4.875.000
8,670,00l +
0
4.860.000 +
Tobacco (Pounds)

+ 3.5

+ 2.2
— 3.2
+ 9.2
+ 3.3

+ 7.6
+12.9
+ 9.6
+ 14.2
+ 5.3

Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina

W holesale T rade, 59 F irm s :
l in e s

1937
Virginia ..........
North Carolina
South Carolina

D epartment Stores:

Net Sales
Aug. 1937
comp, with
August
1936
Baltimore (8)
Washington (6)
Other Cities (14)
District (28) .

Aug. 1936

25,351,631
15,097,837,400
452,897,908
3,009,478

Cotton (Bales)

Net Sales
Aug. 1937
comp, with
Aug. July
1936
19317

Stocks
Net Sale3
Jan. 1 to date Aug. 31, 1937
compared with compared with
same period Aug. 31 July 31
last year
1936
1937
+ 11.6 +11.5
+ 12.0
+ 71.9 — 9.6
+ 4.8
+ 12.7
+ 46.9 + 1.9
+ 11.6 +
.2
+ 23.9
+ 4.0 +
.1
+ 7.0

Ratio Aug.
collections
to accounts
outstanding
August 1

118.7
— 2.2
40.5
+73.3
+ 86.6
33.2
38.9
+ 5.3
77.1
+ 1.1
Note: All figures in Retail & Wholesale tables represent percentage
changes except the collection ratios. Number of reporting firms shown in
parentheses.
Groceries (21). + 8.9
+ 2.5
+
•!
+ 13.7
+ 4.0

Maryland ..........
Virginia ............
West Virgina ..
North Carolina
South Carolina .

and

E stimates: Growing conditions

were not quite so favorable in August as in earlier months
this season, and a number of Fifth district crops deterio­
rated moderately, but prospects continued to be much bet­
ter than a year ago and larger yields are forecast for all




520.000 +
1,171,000 +
754.000 +
796.000 +
446.000 +
Apples (Bushels)

Maryland ........
Virginia ...........
West Virginia .
North Carolina

2.730.000 +
18,000,000 —
9.760.000
4.240.000
Peanuts (Pounds)

Virginia ............
North Carolina
South Carolina .

A G R IC U LT U R A L CONDITIONS
Crop Conditions

24.850.000
99.819.000 +
2,465,000 —
559.990.000 +
102.480.000 +
Hay (Tons)

161,000,000
243,000,000
8,400,000

Pasture Condition, September 1
Maryland ..........
Virginia ............
West Virginia .
North Carolina
South Carolina .

86+
93 +
86—
88+

78 +

56
63
56
80
71

68

74
78
78

Note: Estimates marked ( + ) were raised and those marked ( — )
were lowered between August 1 and September 1. The peanut estimates
were made on September 1 for the first time this season.

(Compiled September 21, 1937)

MONTHLY REVIEW, September 30, 1937

FEDERAL RESERVE BANK OF RICHMOND

SUMMARY OF NATIONAL BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)

In August industrial activity advanced from the level of the two preceding
months and on a seasonally adjusted basis was close to the volume of last
spring. Early reports for September indicate a decline in steel output and a
seasonal decrease in the production of automobiles.

IN D U S T R IA L PRO DU CTIO N

PRODUCTION AND EMPLOYMENT

1929 1930

1931

1932

1933

1934

1935

1936

1937

Index of physical volume of production, ad­
justed for seasonal variation, 1923-1925 averages
100. By months, January 1929 to August 1937.

FACTORY E M P LO Y M EN T A N D P A YRO LLS

1929 1930

1931

1932

1933

1934

1935

1936

1937

Indexes of number employed and payrolls, with­
out adjustment for seasonal variation, 1923-1925
=100. By months, January 1929 to August 1937.
Indexes compiled by the U. S. Bureau of Labor
Statistics.

M E M B E R B A N K R E S E R V E S AN D RE LA T E D IT E M S
f
BILLIONS OF DOLLARS

BILLIONS OF DOLLARS

Volume of industrial production, as measured by the Board’s seasonally
adjusted index, was 117 percent of the 1923-1925 average in August as com­
pared with a level of 114 percent in June and July and 118 percent during the
spring. Steel production rose slightly further and was close to the high level
prevailing before strikes curtailed output in June. Automobile production was
maintained in considerably larger volume than is usual in the month preceding
the shift to new model production. Lumber output declined, following a period
of increase. In the nondurable goods industries output increased in August,
reflecting chiefly increases at cotton and woolen textile mills, following consider­
able declines in the preceding month. Activity at meat packing establishments
increased somewhat from an extremely low level. Shoe production showed less
than the usual seasonal rise. At mines, output of coal increased less than
seasonally, while crude petroleum production continued to expand.
Value of construction contracts awarded, as reported by the F. W. Dodge
Corporation, declined somewhat in August and the first half of September.
Awards for private residential building showed little change and were in about
the same volume as in the corresponding period of 1936, while publicly-financed
residential building declined and was in considerably smaller volume than last
year.
Factory employment, which had increased in July, showed less than a
seasonal rise in August. Factory payrolls increased by about the usual seasonal
amount. The number employed at steel mills increased somewhat further,
while at automobile factories, railroad repair shops, and sawmills employment
declined. In the textile industries employment in the production of fabrics de­
creased somewhat, while employment in the production of wearing apparel in­
creased. Changes in employment in most other manufacturing industries were
small.
AGRICULTURE

Department of Agriculture crop estimates based on September 1 conditions
were about the same as the estimates a month earlier, except for an increase in
cotton and a decrease in corn. Output of leading crops is substantially larger
than last season. Supplies of livestock and meats are expected by the Depart­
ment of Agriculture to continue smaller than last year.
DISTRIBUTION

Mail order sales and sales at department stores showed somewhat less than
the usual seasonal increase from July to August. Freight-car loadings continued
at the level of the previous month.

GoId Stock /

COMMODITY PRICES
Reserve Bo
/ Credit
Teos*”
Currency

1934

1935

1934

1935

1936

Wednesday figures, Jan. 3, 1934, to Sept. 22,
1937.

E X C E S S R E S E R V E S OF M E M B E R B A N K S

Cotton prices declined considerably further from the middle of August
to the third week of September and there were smaller decreases in cotton goods,
silk, hides, steel scrap, copper scrap, and lumber. Prices of livestock and live­
stock products, after some decline in the latter part of August and the first
week of September, advanced sharply in the middle of September.
BANK CREDIT

Excess reserves of member banks increased in the five-week period ending
September 22 from $800,000,000 to $1,000,000,000 as the result of a release of
gold by the Treasury from its inactive account. The bulk of the increase in
excess reserves went to New York City banks and on September 22 these banks
had excess reserves of $350,000,000, Chicago banks had $50,000,000, and banks
elsewhere $600,000,000.
Commercial loans at reporting member banks in 101 leading cities, reflecting
in part seasonal demands, continued to increase substantially during the four
weeks ending September 15, both in New York City and outside. Holdings of
United States Government obligations and of other securities showed a further
decrease, with the result that total loans and investments declined somewhat.
MONEY RATES

Wednesday figures of estimated excess reserves
for all member banks and for New York City,
January 6, 1932, to September 22, 1937.




Rates on 9-month Treasury bills declined from 0.71 percent early in Sep­
tember to 0.44 percent later in the month, and average yields on long-term
Treasury notes declined from about 1% percent to below IY2 percent.

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