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MONTHLY REVIEW of Financial and Business Conditions F ifth Federal \ y Richmond® o T yA. r ..... ' 4 If Federal Reserve Bank, Richmond, Va. R eserve D ist r ic t September 30,1938 Debits to individual accounts (24 cities)........................................ ............................. Number of business failures, 5th district........................................ Liabilities in failures, 5th district.—.............................................. ............................. Sales, 59 Department stores, 5th district........................................ ............................. Sales, 199 wholesale firms, 5th district........................................... ............................. Registrations, new passenger autos................................................ Value of bldg. permits (31 cities)................................................ . ............................. Value of contracts awarded, 5th district........................................ ............................. Cotton consumption, 5th district (Bales) ...................................... Tobacco sold in district (Pounds).................................................. Coal mined, U. S. (Tons)..................................................... ............ U SIN E SS in the Fifth Federal Reserve district achieved somewhat more than seasonal improvement in August and early September, and nearly all indices com pared more favorably with last year than in earlier months this year. Changes in bank statements last month were minor and for the most part seasonal in character. Federal Reserve note circulation rose between August 15 and September 15, to supply needs for additional currency to move tobacco and other crops. Member bank loans rose moderately, probably as a reflection of mercantile needs of funds with which to discount bills for fall merchandise. Debits to individual accounts figures, reflecting transac tions through banks, showed a decrease of only 6 per cent in August in comparison with August 1937, the best com parison made in any month since December. A much more unfavorable comparison was registered by commer cial failures, which in August rose 169 per cent in num ber and 184 per cent in liabilities over corresponding fig ures for August 1937. Registrations of new automobiles in the district in August, while 50 per cent below regis trations in August last year, showed the smallest decline from the corresponding month of the preceding year for any month since April. Coal production on a work-day basis rose 12 per cent in August over July, but continued substantially below 1937 figures for the same month. Cot ton textile mills increased operating time further in Au gust and cotton consumption in the district lacked only 6 per cent of equaling August 1937 consumption, while _ August 1938_____ August 1937 % Change — 6 $1,201,523,000 $1,125,303,000 +169 26 70 +184 514,000 181,000 $ $ 7,720,242 0 7,728,252 $ $ — 6 $ 13,837,000 $ 14,774,000 21,855 — 50 10,903 8,518,978 — 21 6,757,976 $ $ + 10 $ 32,347,000 $ 29,456,000 273,351 289,841 — 6 140,430,629 90,357,981 + 55 28,280,000 33,988,000 — 17 shipments of rayon yarn by producers set a record and surplus stocks of rayon were greatly reduced. Construc tion work under way in the Fifth district increased sharply during August, contract award figures rising 51 per cent above the July figures and 10 per cent above August 1937 contracts. Tobacco manufacturing increased materially last month over July, and in all lines except snuff exceeded output in August last year. Tobacco auction markets in the Carolinas which opened in August sold considerably larger quantities of tobacco than in August last year, and at prices slightly better than those of August 1937. These improvements were reflected in employment, which in creased in nearly all sections of the district. Retail trade in August as reflected in department store sales was prac tically the same as in August 1937, and cumulative sales in the first 8 months of this year were only 4 per cent lower than sales in the same period last year. Wholesale trade reported by 199 firms in the Fifth district was 6 per cent less in dollar amount in August 1938 than in August 1937, but showed a seasonal rise of 23 per cent over the volume of trade in July this year. Developments in agri culture during August were chiefly unfavorable, dry weather having hastened maturity of late crops and thereby reduced prospective yield figures. On the whole, how ever, Fifth district crops are up to average in condition, and yields will compare favorably with ten-year average yields in all crops except in a few instances of material re duction in acreage this year. 2 MONTHLY REVIEW B a n k S t a t e m e n t : T w o items changed mate^ rially on the statement o f the Federal Reserve Bank of Richmond between August 15 and September 15. Fed eral Reserve notes in actual circulation rose $3,965,000 as the opening o f additional tobacco markets in North Caro lina and early sales of cotton required an increased volume o f money, a seasonal development at this time. Cash re serves o f the bank rose by $13,537,000 during the same period, due chiefly to an increase o f approximately $10,000,000 in the deposit balance o f the Treasurer o f the United States. The substantial increase in cash reserves on September 15, 1938, over those on September 15, 1937, was caused by a corresponding rise in the Treasurer’s balance. 000 omitted R eserve ITEMS Discounts held ........................................... Open market p ap er................................. Industrial advances ................................. Government securities ........................... Total earning assets ......................... Circulation of Fed. Res. notes.............. Members’ reserve deposits ................... Cash reserves .......................................... Reserve ratio .......................................... 000 omitted Sept. 15 Aug. 15 Sept. 15 1938 1938 1937 $ 553 $ 919 $ 677 23 23 25 1,472 1,479 1,929 127,873_____ 127,224_____ 133,035 129,921 129,645 135,666 199,151 195,186 203,779 221,881 223,113 221,413 353,254 339,717 322,600 74.00 73.52 71.20 S t a t e m e n t o f 41 R e p o r t i n g M e m b e r B a n k s : Loans and discounts in reporting member banks rose by $4,753,000 between August 10 and September 14, and in vestments in securities increased $7,286,000. There was a rise of $19,134,000 in demand deposits during the same period. In comparison with figures on September 15, 1937, the statement for September 14, 1938, shows sub stantial increases in investments in securities and reserve balances, and a decline in loans and discounts. ITEMS Loans & discounts ........................... Investments in securities ................ Reserve bal. with Fed. Res. bank... Demand deposits ............................... Time deposits ...................................... , , Money borrowed ..................................... 000 omitted Sept. 14 Aug. 10 1938 1938 $234,138 $229,385 384,509 377,223 147,415 18,425 439,826 198,683 197,934 0 0 Sept. 15 1937 $246,931 374,854 135,951 17,057 462,402 197,560 0 S avings B a n k D eposits : For the fourth suc cessive month deposits in 10 mutual savings banks in Baltimore declined in August. Some recession in savings usually occurs during vacation season, but the decrease was greater this year than in most years. Total deposits in the 10 banks amounting to $217,598,810 on August 31, 1938, compared with the record figure of $219,926,013 on April 30 this year: and with $217,294,470 on August 31 last year. Deposits in 8 of the 10 banks declined during August. M u tu a l : Debits to individual, firm and corporation accounts in banks in 24 Fifth district cities were 1 per cent less in August than in July, a smaller than normal seasonal decrease, and were only 6 per cent less than August 1937 debits, the smallest decline from the corresponding month of the preceding year since last December. Twelve cities reported larger August fig ures than those for July, Durham leading with an increase of 67 per cent, and 5 cities increased over August 1937, Durham again leading with 26 per cent. Durham made the only gains over 1937 figures in May, June and July, in addition to leading in percentage increase in August. D e b its t o I n d iv id u a l A c c o u n t s CITIES Maryland Baltimore ............ Cumberland ........ Hagerstown ........ Dist. of Col. Washington ........ Virginia Danville .............. Lynchburg .......... Newport News .. Norfolk ................ Portsmouth ........ Richmond ............ Roanoke .............. West Virginia Charleston .......... Huntington ........ North Carolina Asheville .............. Charlotte ............ Durham .............. Greensboro .......... Wilmington ........ Winston-Salem .. Sputh Carolina Charleston .......... Columbia .......... Greenville ............ Spartanburg District Totals .. Aug. 1938 July 1938 Aug. 1937 % of Change Month Year $ 303,924 7,485 7,717 $ 324,984 7,950 9,099 $ 344,857 9,533 8,700 — 6 — 6 — 15 — 12 — 21 — 11 221,504 242,216 228,398 — 9 — 3 8,749 13,443 7,683 42,439 3,738 164,377 22,223 7,560 15,797 7,701 43,230 4,225 136,686 23,602 8,518 13,939 8,638 47,073 3,701 159,849 27,286 + 16 -1 5 0 — 2 — 12 + 20 — 6 + 3 — 4 — 11 — 10 + 1 + 3 — 19 38,701 14,252 46,226 14,442 50,858 17,788 — 16 — 1 — 24 — 20 11,707 51,250 46,634 15,556 36,448 11,350 36,658 11,308 50,616 27,936 15,494 38,628 9,894 34,772 13,897 55,715 37,106 16,948 31,174 11,496 39,584 + 4 + 1 + 67 0 — 6 + 15 + 5 — 16 — 8 + 26 — 8 + 17 — 1 — 7 13,938 21,738 15,814 7,975 $1,125,303 15,003 22,654 15,095 7,936 $1,133,054 16,259 23,718 18,042 8,446 $1,201,523 — 7 — 4 + 5 0 — 1 — 14 — 8 — 12 — 6 — 6 Increase in employment in Fifth district industries which was noted in July continued moderately in August. Rayon manufacturers and cotton textile mills further expanded operations, and tobacco factories in creased output. Opening of additional auction tobacco markets gave work to several hundred handlers. Con struction work as reflected in contract awards increased notably last month, most of it in suburban and rural areas which are not included in city building permits. The fol lowing figures, compiled chiefly by the Bureau of Labor Statistics from reports furnished by a large number of identical industries, show the trends of employment and payrolls in the Fifth district geographical divisions from July to August 1938, the latest available figures: E m p lo y m e n t: Percentage change from July 1938 to Aug. 1938 In number In amount on payroll of payroll + 3.7 + 5.4 — 2.4 — 2.6 + 6.8 + 3.6 + 4.2 + 10.1 + 6.5 + 11.3 + 4.5 + 1.1 STATES Maryland .............. Dist. of Columbia Virginia ................ West Virginia . . . North Carolina .. South Carolina .. C o m m e r c ia l F a i l u r e s : Insolvencies in the Fifth Re serve district in August increased 169 per cent in number over those in August 1937, while the United States showed a total increase of only 38 per cent. In liabilities involved, a district rise of 184 per cent compared with a National decline of 2 per cent. Total insolvency figures for 8 months of 1938 show rises in number of bankrupt cies of 32 per cent for the district and 45 per cent for the United States, and increases in liabilities involved of 66 per cent for the district and 52 per cent for the Nation. Dun & Brad street insolvency figures are as follows: PERIODS Number of Failures District U. S. August, 1938 ................ 70 August 1937 .................. 26 974 995 707 8 Months, 1938 ............ 8 Months, 1937 ............ 430 326 8,661 5,967 Total Liabilities District U. S. $ 514,000 $ 11,692,000 440,000 10,793,000 181,000 11,916,000 $4,543,000! $113,347,000 2,745,000 74,497,000 MONTHLY REVIEW A utomobile N ew Car R egistrations : Purchases o f new automobiles tend to decline gradually after the spring months, and in August registrations o f new cars in the Fifth district declined from the July number in all states except South Carolina, in which sales of tobacco stimu lated nearly all lines o f trade. The number of new cars sold in the Fifth district in August was 50 per cent below the number sold in August last year, but the percentage o f decrease in sales in August was lower than in any other month since April. Used cars sold well during the summer and most dealers cut down the backlog they were carrying earlier in the year. The following figures, com piled by R. L. Polk & Co., o f Detroit, show August and 8 months’ registration figures for new passenger cars in Fifth district states: Registration of New Passenger Cars STATES Maryland .......... Dist. of Col......... Virginia .......... West. Va. No. Carolina . . . So. Carolina District ......... Aug. 1938 1,868 1,189 2,269 1,172 3,015 1,390 10,903 Aug. 1937 4,245 2,435 4,490 3,370 4,741 2,574 21,855 % Change — 56 — 51 — 50 — 65 — 36 — 46 — 50 8 Months 8 Months % 1937 Change 1938 35,038 -5 0 17,667 — 46 11,901 22,034 21,170 37,445 — 44 27,843 — 59 11,295 38,905 20,789 -4 7 9,870 20,533 — 52 92,692 181,798 — 49 C o a l P r o d u c t i o n : Output of bituminous coal in August totaling 28,280,000 net tons increased 2 1 per cent over 23.357.000 tons in July 1938, but was 17 per cent less than 33.988.000 tons in, August 1937. On a work-day basis, production of 1,047,000 tons per day in August showed an increase of 12 per cent over output in July this year but a decline of 20 per cent from the August 1937 daily average. Total production of bituminous coal this calen dar year to September 10 of 211,948,000 tons compares with 300,538,000 tons mined in 1937 and 355,156,000 tons in 1929 to the same date. Shipments of coal through Hampton Roads ports to September 10 totaled 11,140,833 tons in 1938, against 14,645,368 tons in 1937 and 15,066,542 tons in 1929. Cotton mills further increased oper ations in August, and cotton consumption in Fifth dis trict mills not only rose 2 1 per cent over consumption in July but lacked only 6 per cent of equaling August 1937 consumption. Reports indicate, however, that out put at the mills was in excess of distribution in August, and early in September there was a tendency to re duce output to some extent. Cloth prices softened slightly between the middle of August and the middle of September. Cotton consumption figures in Fifth district states in August 1938, July 1938, August 1937, and in the first 8 months of last year and this are shown here with : C o tto n T e x t ile s : MONTHS No. Carolina So. Carolina Virginia District August 1938 ............................... July 1938 ..................................... August 1937 ............................... 143,560 119,305 149,928 114,916 93,542 123,763 14,875 12,818 16,150 273,351 225,665 289,841 8 Months, 1938 ........................... 8 Months, 1937 ........................... 964,160 1,355,388 744,991 1,031,463 91,511 120,767 1,800,662 2,507,618 : After setting a record for daily shipments of rayon yarn in July, producers went further in August and shipped 895 per cent of average daily shipments in 19231925 against 841 per cent in July and only 473 per cent as recently as June of this year. Surplus stocks of yarn R ayon 3 were reduced from 3.1 months’ supply on July 31 to 2.3 months’ supply on August 31. The Rayon Organon states that stock of rayon in pounds showed a reduction of 38 per cent from the high point in June to the end of August. Weaving mill activity also increased substantially in July and August, and production of such staples as twills and serges, faille taffetas and the pigment taffetas, as well as box loom fabrics, showed notable improvement. C o n s t r u c t i o n : Building permits issued in 31 Fifth dis trict cities in August rose 7 per cent in number over per mits issued in August 1937, but estimated valuation fig ures declined 21 per cent. Permits issued last month totaled 2,775, with estimated valuation of $6,757,976, com pared with 2,591 permits and a valuation of $8,518,978 in August last year. Washington reported the largest val uation in August 1938, $3,114,975, Baltimore was second with $1,044,587, Norfolk third with $245,169, Richmond fourth with $234,205, and Winston-Salem fifth with $200,932. Among the five largest cities, Richmond and Norfolk reported higher figures than for August last year, while Baltimore, Washington and Charlotte reported lower figures. Seventeen cities showed higher figures for the 1938 month, while 14 cities showed lower figures. Contract award figures, furnished by F. W. Dodge Cor poration, totaled $32,347,000 for the Fifth district in August, an increase of 50 per cent over contracts totaling $21,560,000 awarded in July this year and 10 per cent above $29,456,600 awarded in August last year. Con tract award figures are a better measure of construction activity than city building permits, since contracts include all types of work located anywhere in the district while city permits cover activities within corporate limits only. C o t t o n : Spot cotton prices, after advancing somewhat in the second half of August, declined in September to the lowest point registered since last December. From an average of 8.27 cents per pound for middling grade, the average of ten Southern spot markets rose to 8.40 cents on August 26, but then dropped to 8.01 cents on Sep tember 16. The second condition report on the 1938 crop, issued by the Department of Agriculture on Sep tember 8 , estimated the yield at 11,825,000 equivalent 500-lb. bales, a reduction of 163,000 bales below the August 1 estimate, 7,121,000 bales less than the 1937 crop, and 1,376,000 bales less than the 1927-36 average pro duction. In the Fifth district, prospective yield figures were reduced for South Carolina in August, but remained unchanged in North Carolina and Virginia. r Cotton Consumed and On Hand (Bales) Fifth district states: Cotton consumed ....................................... Aug. 1988 Aug. 1937 273,351 289,841 Cotton growing states: Cotton consumed ......................................... Cotton on hand August 31 in Consuming establishments ..................... Storage & compresses ............................. 472,693 505,365 851,213 9,757,377 733,266 3,432,201 United States: Cotton consumed ........................................ Cotton on hand August 31 in Consuming establishments ..................... Storage & compresses ............................. 561,406 603,617 1,052,631 9,825,616 958,887 3,500,711 Exports of cotton ............................................ 200,851 220,415 Spindles active in month ............................... 22,152,526 24,341,192 MONTHLY REVIEW 4 : Auction tobacco markets in South Carolina and 7 towns in North Carolina opened early in August, and later in the same month 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 : CROP FO REC A STS T obacco M a r k e tin g Producers* Tobacco Sales, Lbs. Price per Cwt. Aug. 1938 Aug. 1937 1938 1937 STATES South Carolina ................... North Carolina ................... 58,683,790 81,746,839 41,372,414 48,985,567 $23.86 23.93 $23.56 23.66 The weather in the Fifth district was too dry during August, and curtailed yields of many crops by hastening maturity. The dry weather was favorable for harvesting, however. The accompanying figures show forecasts based on September 1 conditions, compared with yields in 1937 and in the ten-year period 1927-1936. Estimates for 1938 which were increased or decreased last month are indicated by + or — signs, respectively. Figures for peanuts, commercial apples and peaches are shown this month for the first time this season. M a n u fa c tu r in g : The Bureau of Internal Revenue reports tobacco products manufactured in Au gust 1938 and 1937 as follows: T obacco Aug. 1938 Smoking & Chewing Tobacco, Pounds ............ Cigarettes, Number ............... Cigars, Number ..................... . Snuff, Pounds ....................... * R e t a il T rade in Same stores by States, with 29 stores added: Virginia (13). . . West Va. (10). . No. Carolina (8) So. Carolina (12) District (59). . + — — — + 25,351,631 15,097,837,400 452,897,908 3,009,478 + 9 +5 +5 —1 + -2 - 6.0 — 2.5 — 10.2 — 4.1 43,000 780,000 1,023,000 40,000 710,000 798,000 18,576,000 37,740,000 14,245,000 45,357,000 24,945,000 15,477,000 32,199,000 12,104,000 40,787,000 21,161,000 1,083,000 1,680,000 1,520,000 4,830,000 10,076,000 1,407,000 2,389,000 2,366,000 3,682,000 8,316,000 518,000 1,204,000 741,000 824,000 502,000 468,000 907,000 661,000 630,000 309,000 3,480,000 10,920,000 3,264,000! 9,894,000 3,120,000 3,348,000 12,998,000 3,150,000 7,729,000 2,419,000 1,200,0003,990,000 — 8,600,000 — 5,610,000 — 1,000,000 5,070,000 8,160,000 5,130,000 1,205,000 4,282,000 7,915,000 4,898,000 West Virginia . . . . . . North Carolina . . . . . . South Carolina . .. . . . Tobacco (Pounds) 7 30,030,000 + 0 100,115,000 + + 17 3,798,000 — — 4 529,590,000 — 7 90,900,000 25,200,000 107,276,000 3,408,000 595,530,000 108,080,000 25,560,000 99,838,000 3,304,000 481,939,000 76,724,000 .... North Carolina , . , . . . South Carolina .. . . . . + 5 + 5 + 9 173,650,000 278,460,000 7,865,000 145,288,000 228,960,000 8,539,000 Commercial Apples (Bushels) 1,400,000 1,750,000 7,200,000 10,391,000 3,300,000 5,500,000 500,000 875,000 1,266,000 7,609,000 3,410,000 597,000 North Carolina . . . . . . South Carolina . . . . . . — 18 —23 Maryland — 2 — 2 Shoes (4) .............. , Drugs (10) ............ , . Dry Goods (7) ----Elec. Goods (27) . Groceries (72) . , Hardware (23) Industrial Supplies (8) . Plumbing & Heating (9) Paper & Products (6). . Tobacco Products (16). . Miscellaneous (17) . All Firms (199) 18,000 453,000 643,000 — Com .............. . . . ... West Virginia North Carolina .. . South Carolina . . . . . . + 12 (Bushels) 18,216,000 33,350,000 — 12,116,000 — 43,475,000 — 27,014,000 — + + + + + 7.5 6.9 5.0 11.7 6.7 Ratio Aug. collections to accounts outstanding August 1 28.7 28.2 25.9 24.0 26.7 Maryland .............. . . . ... West Virginia North Carolina . . . South Carolina . . . . . . + 3 + 10 0 0 + 2 Maryland .............. . . . .... West V irginia___ . . . North Carolina . .. . . . South Carolina . . . . . . + + + + + Maryland — 7 — 13 0 — 13 — 15 1,170,000 + 1,892,000 — 1,596,000 — 5,060,000 10,648,000 Hay (Tons) 3 4 5 6 4 576,000 + 1,158,000 802,000 925,000 468,000 White Potatoes (Bushels) 199 + 3.7 + 5.3 —21.7 — 15.1 — 7.9 — 4.5 — 13.5 — 9.7 + 8.0 + 3.6 — 6.8 - 6.3 + + + + + + + + + + + + 161.2 7.8 67.6 3.7 9.6 36.1 51.7 10.4 16.9 8.3 9.6 22.7 3,276,000 — 10,243,000 — 2,720,000 — 9,828,000 2,596,000 Sweet Potatoes (Bushels) Maryland ............. Maryland .............. . . . ... North Carolina . . , ... South Carolina . . . . . . F ir m s : Net Sales Aug. 1938 comp, with Aug. July 1938 1937 .............. . . . West Virginia North Carolina . . . . . . South Carolina . . . . . . — 1.0 — 14.8 — 7.3 - 8.8 — 4.5 3.1 8.6 2.1 2.4 .1 LINES — .4 -1 2 .2 — 8.3 — 6.1 — 8.6 Yield 1927-1936 Oats (Bushels) Net Sales Stocks Jan. 1 to date Aug. 31, 1938 comp, with comp, with same period Aug. 31 July 31 1938 1937 last year + 2.4 — 4.1 + 3.9 — 4.9 .1 + W h o lesale T rade, 27,506,542 15,891,586,977 477,595,984 2,966,448 % Change Yield 1937 Yield 1938 Acreage D e p a r t m e n t S t o r es : Net Sales Aug. 1938 comp, with August 1937 Richmond (3) Baltimore (8) Washington (6). Other Cities (13) District (30). Aug. 1937 Cotton (Bales) % Change Stocks Aug. 31, 1938 comp. with July 31 Aug. 31 1938 1937 — 30.0 + .6 — 36.2 — 18.9 -1 8 .6 — 5.2 — 4.7 — 16.9 -1 4 .3 + 7-1 — 5.8 -1 7 .0 + 1.3 + -3 + 3.9 - 4.8 — .5 + -8 + 1.4 - 8.9 — 3.8 + 1.5 — .7 — .8 Ratio Aug. collections to accounts outstanding August 1 54.8 104.01 44.2 72.2 103.5 42.3 58.3 56.4 57.2 91.6 66.2 68.4 0 — 3 + 1 +16 + Peanuts (Pounds) Maryland ............. West Virginia . , . North Carolina . .. Maryland .............. West Virginia . . . North Carolina . . . South Carolina . . . (Compiled September 21, 1938) 141,300,000 262,500,000 8,400,000 Peaches (Bushels) 368,000 1,161,000 204,000 2,232,000 1,515,000 448,000 1,599,000 528,000 1,984,000 1,080,000 374,000 767,000 299,000 1,813,000 1,095,000 MONTHLY REVIEW, September 30, 1938 FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) IN D U S T R IA L PRODUCTION Industrial activity increased considerably in August and advanced further in September. Factory employment and payrolls also showed a substantial rise in August, and distribution of commodities to consumers increased seasonally. PRODUCTION Index of physical volume of production, adjusted for seasonal variation, 1923-1925 average=100. By months, January 1934 to August 1938. CONSTRUCTION CONTRACTS AWARDED Three-month moving averages of F. W. Dodge data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. Latest figures based on data for July and August and estimate for September. Volume of industrial production showed a further considerable increase in August, and the Board’s seasonally adjusted index rose from 83 to 88 per cent of the 1923-1925 average. In manufacturing, increases in output were general except in the automobile industry where there was a sharp seasonal decline as plants were closed for inventory taking and for preparation for the shift to new model production. At steel mills, where activity had risen consid erably in July, there was a further advance in August and production was at an average rate of 42 percent of capacity as compared with 35 percent in the previous month. Output of lumber and plate glass also increased. In the tex tile industry the sharp advance that had been under way since early summer continued. Mill consumption o f wool and cotton increased further, and de liveries of rayon were maintained at the high level reached in July. Shoe pro duction showed a further increase and activity at meat-packing establishments showed less than the usual seasonal decline. Production of bituminous coal and crude petroleum increased somewhat further. In the first three weeks of September steel ingot production continued to increase, while automobile production remained at the low level reached in August. Output of crude petroleum was reduced, as wells in Texas were closed on both Saturdays and Sundays, whereas in August only Sunday closings had been required. Value of construction contracts awarded in 37 Eastern States increased considerably in August, according to figures of the F. W. Dodge Corporation. The increase was in publicly-financed projects and reflected partly the expan sion of the Public Works Administration program and the award of the first contract for the slum clearance projects of the United States Housing Author ity. Awards for private residential building continued at about the same rate as in July and were close to the level reached in the spring o f 1937. Com mercial building, which had increased in July owing to the award of a contract for a large office building, declined in August to about the level o f other recent months. EMPLOYMENT Factory employment and payrolls showed a marked rise from the middle of July to the middle of August, while in nonmanufacturing industries em ployment showed little change. The number employed at factories producing durable goods increased for the first time since the summer of 1937 and in the nondurable goods industries, where employment had increased in July, there was a further rise. Most leading industries reported increases in the number of workers. DISTRIBUTION Distribution of commodities to consumers increased seasonally from July to August. Department store sales showed about the usual rise and mail order sales increased, while variety store sales declined. In the first half of Sep tember sales at department stores increased more than seasonally. Freight-car loadings increased somewhat further in August, reflecting chiefly larger shipments of miscellaneous freight. COMMODITY PRICES Discount rate of Federal Reserve Bank; weekly averages of daily yields on 3-5 year Treasury notes and on Treasury bonds callable after 8 years; and weekly average of daily dealers’ quotations on 90-day Treasury bills, or rate on new bills offered in week. For weeks ended January 6, 1934, to September 17, 1938. Prices of silk and rubber showed some advance from the middle of August to the third week of September and there were also increases at the end of the period in nonferrous metals. Wheat prices fluctuated considerably but showed little net change in this period. Prices of cotton and wool declined somewhat, and there were further decreases in prices of some finished industrial products. BANK CREDIT A heavy inflow of gold from abroad during the five weeks ending Septem ber 21 resulted in an increase of over $500,000,000 in the monetary gold stock. Member bank reserves were increased by Treasury payments for gold acquired but were sharply reduced in the last week of the period by paymnts to the Treasury for cash purchases of new securities and quarterly income tax col lections. As a consequence of these transactions, excess reserves, which had increased to $3,130,000,000, were reduced to $2,740,000,000 on September 21. Total loans and investments of reporting member banks in leading cities increased sharply during August and the first three weeks of September, re flecting chiefly an increase in holdings of United States Government obliga tions. Balances held in New York City for foreign banks showed a substantial increase. MONEY RATES AND BOND YIELDS Wednesday figures, January 3, 1934, to Septem ber 21, 1938. The average yield on long-term Treasury bonds increased in September from the low point reached at the end of August. The average rate on new issues of Treasury bills increased to 0.11 percent, compared with 0.05 percent. Yields on high-grade corporate bonds increased slightly.
@FedFRASER