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MONTHLY REVIEW o f Financial and Business Conditions Fifth Federal Re s e r v e District Federal Reserve Bank, Richmond, Va. September 30, 1941 Summary of August Business Conditions L T H O U G H the expansion in business caused by the preparedness program had gotten well under way in August last year, all indicators show a continuation during August 1941 o f greatly increased activity over the corre sponding month last year. In banking, circulation o f Federal Reserve notes o f the Richmond bank rose from $242,825,000 on September 15, 1940, to $360,870,000 on September 15, 1941, member bank reserve deposits ad vanced from $323,639,000 to $458,036,000, and the R e serve bank’s cash reserves rose from $520,860,000 to $767,512,000. On September 15, 1941, total resources o f the Federal Reserve Bank o f Richmond stood at $1,010,323,000, reaching the billion dollar mark for the first time. Forty-one regularly reporting member banks showed a rise in loans to business and agriculture from $125,800,000 on September 11, 1940, to $155,587,000 on September 10, 1941, and other loans rose from $155,166.000 to $170,596,000 between the same dates. Demand deposits in the 41 banks rose from $590,725,000 to $726,655.000 between mid-September last year and this. Debits to individual accounts, reflecting checks passing through the banks in 25 Fifth district cities, were 33 per cent higher in August than a year earlier. Distribution o f goods to consumers continued at record levels during recent weeks. Sales last month in 79 de partment and general merchandise stores were 34 per A cent above August 1940 sales, and retail furniture stores reported an average increase o f 42 per cent. Wholesale trade in 195 firms in many lines gained 36 per cent in August in comparison with August 1940 sales, and new automobile registrations in the Fifth district last month were at or near recent record levels. Industrial activity in August showed no recession, but on the contrary probably expanded further in such lines as shipbuilding and aircraft construction. Cotton textile mills, rayon yarn mills, and coal mines continued to work at capacity, and construction work provided for in per mits issued and contracts awarded was above the high level o f August last year. Tobacco manufacturing was in substantially larger volume in August 1941 than in August 1940. Auction tobacco markets opened in the Carolinas and part o f Virginia in August and the first half o f Septem ber, and opening prices were about 45 per cent above opening prices last year. Cotton prices also rose last month, and were about 70 per cent above 1940 prices. The 1941 tobacco crop in the Fifth district is estimated to be 13 per cent less than the 1940 crop, and cotton yield is 45 per cent lower than last year. Corn, hay, Irish po tatoes and peanuts also showed reduced yields this year, while wheat, oats, sweet potatoes, apples and peaches increased over 1940 yields. BUSINESS STATISTICS— FIFTH FEDERAL RESERVE DISTRICT August 1941 July 1941 August 1940 % Change Month Year Debits to individual accounts (25 cities)..... Sales, 79 department stores, 5th district......... Sales, 41 furniture stores, 5th district............ Sales, 195 wholesale firms, 5th district........... Registrations, new autos, 5th district............ $1,738,193,000 $ 15,699,692 2,204,783 $ $ 16,331,000 21,412 $1,779,790,000 $ 12,339,671 1,519,543 $ $ 14,720,000 33,740 $1,307,118,000 $ 11,754,625 1,548,889 $ $ 11,983,000 17,242 — + + + — Tobacco sold in 5th district (P ou nds)........... Average price of tobacco, per 100 lbs.............. Growers’ receipts from tobacco, 5th district.. Number of business failures, 5th district....... Liabilities in failures, 5th district.................... Value of building permits, 29 cities................. 113,426,399 26.66 30,243,063 32 377,000 $ $ 12,511,101 $ 145,492,000 393,671 16.54 10.75* 37,300,000 4,100,000 45,650,000 Value of contracts awarded, 5th district....... Cotton consumption, 5th district (B ales)..... Cotton price, cents per lb., end of month....... Print cloths, 39 in., 80x80s, end of month....... Rayon yarn shipments, U. S. (P ou nds)........... Rayon yarn stocks, U. S. (Pounds)................ Bituminous coal mined, U. S. (T on s)............. * Ceiling price established by OPACS. $ $ $ $ $ 16 198,000 11,584,377 64,333,000 418,620 15.94 10.75* 39,400,000 3,600,000 43,300,000 $ $ $ $ $ 2 27 45 11 37 + + + + + 33 34 42 36 24 52,687,557 18.36 9,671,969 42 713,000 9,885,738 +100 + 90 + 8 +115 + 45 +213 — 24 — 47 + 27 47,363,000 298,696 9.62 6.50 34,000,000 9,900,000 39,010,000 +126 — 6 + 4 0 — 5 + 14 + 5 +207 + 32 + 72 + 65 + io — 59 + 17 MONTHLY REVIEW 2 BA N K IN G STATISTICS E M PLO Y M E N T RESERVE BAN K STATEMENT ITEMS Fifth District 000 omitted Aug. 15 ITEMS Sept. 15 1941 1941 $ 38 Discounts held .............................................. $ 175 Foreign loans on gold ................................ 9 0 Industrial advances .................................... 811 788 Government securities .............................. 119,663 119,663 Total earning assets .............................. 120,521 120,626 Circulation of Fed. Res. notes ............. 360,870 334,910 Members’ reserve deposits ..................... 458,036 417,214 Cash reserves .............................................. 767,512 718,165 Reserve ratio ................................................ 85.78 85.18 Sept. 15 1940 $ 250 13 849 121,994 123,106 242,825 323,639 520,860 81.51 SELECTED ITEMS— 41 REPORTING MEMBER BANKS Fifth District 000 omitted ITEMS Sept. 10 Aug. 13 Sept. 11 1941 1941 1940 Loans to business & agriculture ........... $155,587 $149,700 $125,800 All other loans ............................................ 170,596 168,808 155,166 Investments in securities ......................... 505,380 475,612 >135,123 Reserve bal. with F. R. b a n k ................. 303,481 290,896 213,120 Cash in vaults .............................................. 28,845 27,467 24,374 Demand deposits .......................................... 726,655 722,107 590,725 Time deposits .............................................. 210,660 209,543 202,935 Money borrowed .......................................... 0 0 0 M UTUAL SAVINGS BANK DEPOSITS 9 Baltimore Banks Total deposits Aug. 31, 1941 $223,974,988 ........... July 31, 1941 $223,993,945 000 omitted July Aug. 1941 1940 CITIES Dist. of Col. Washington % of Change Month Year $ 347,499 $ 351,981 $ 268,453 — 1 + 29 Maryland Baltimore ............. Cumberland ......... Hagerstown ......... 499,706 10,351 11,833 536,045 11,348 12,238 365,968 9,042 9,092 — 7 — 9 — 3 + 37 + 14 + 30 North Carolina Asheville ............... C h arlotte............... Durham ................. Greensboro ........... Raleigh ................. W ilmington ......... Winston-Salem . . 18,026 89,911 53,725 26,259 49,568 19,222 ■49,170 17,926 90,057 33,625 24,327 61,704 19,198 48,765 14,752 60,299 38,815 19,448 37,033 11,561 41,891 + 1 — 0 + 60 + 8 — 20 + o + 1 + + + + + + + 22 49 38 35 34 66 17 South Carolina Charleston ........... Columbia ............. Greenville ............. Spartanburg 28,067 36,448 27,496 15,527 29,721 38,303 27,082 15,470 19,112 28,420 18,935 11,114 — — + + 6 5 2 o + + + + 47 28 45 40 Virginia Danville ............... Lynchburg ......... Newport News . . Norfolk ................. Portsmouth ......... Richmond ........... Roanoke ............... 9,818 16,761 14,214 74,798 6,937 202,956 34,925 10,088 18,405 14,827 78,287 7,039 196,369 34,243 7,311 13,065 13,931 50,357 5,839 155,626 28,729 — — — — — + + 3 9 4 4 1 3 2 + + + + + + + 34 28 2 49 19 30 22 West Virginia Charleston ........... Huntington ......... Parkersburg ----District Totals. . . 61,188 21,351 12,437 $1,738,193 67,059 21,959 13,724 $1,779,790 50,415 17,684 10,226 $1,307,118 — — — — 9 3 9 2 + + + + 21 21 22 33 C O M M E R C IA L FAILU RES Number of Failures District U. S. PERIODS August July August 8 months, 8 months, 1941.......... 1941........... 1940.......... 1941........... 1940........... , , ,. Source: Dun & Bradstreet 32 16 42 282 387 954 908 1,128 8,564 9,422 Total Liabilities District U. S. $ 377,000 198,000 713,000 3,108,000 4,885,000 $ 11,134,000 13,422,000 12,977,000 96,712,000 112,691,000 Percentage change from July 1941 to Aug. 1941 in amount in number of payroll on payroll STATES + + + + + + + Maryland ................. Dist. of Col............... Virginia ................. West Virginia North Carolina . .. South Carolina . . . District Average Aug. 31, 1940 $222,488,398 DEBITS TO INDIVIDUAL ACCOUNTS Fifth District Aug. 1941 There were no substantial changes in employment in the Fifth district in August and early September. Skilled labor may be said to be practically fully employed, and there is relatively little idleness in unskilled ranks. Many workers in agricultural sections have gone into construc tion or industry, and farm labor for harvesting is hard to obtain at wages farmers can afford to pay. Demands for machinists and workers in allied lines continue to exceed the supply o f available men. Although some un employment is expected to result from restrictions in the manufacture o f civilian goods, none o f consequence has yet been noted. The following figures, compiled for the most part by the Bureau o f Labor Statistics, show the trends o f employment and payrolls in the Fifth district from July to A ugust: 3.3 0.4 2.0 2.0 1.3 0.5 1.8 + — + + + + + 1.5 0.5 2,4 5.6 1.4 2.1 2.6 A U TO M O B ILE R E G ISTRA TIO N S Sales o f new passenger automobiles tapered off in August in anticipation o f the introduction o f new models in September, but in most o f the Fifth district continued much above the level o f sales in the corresponding month last year. Dealers cleaned out their stocks o f 1941 models in August and early September, and also reduced the number of used cars on their lots. Used car stocks are only sufficient to meet current needs, and with re strictions on production o f new cars in force there may not be enough cars to meet the demand later in the fall and winter. However, price advances and a considerable volume o f forward buying done in recent months will probably reduce the demand for both new and high grade used cars during the 1942 model year. The following registration figures for new passenger cars were furnished by R. L. Polk & Co., of Detroit: REGISTRATION OF N E W PASSENGER CARS—NUMBER STATES Maryland ........... Dist. of Col. . . . Virginia ............. West Virginia . . No. Carolina . . . So. Carolina . . . District ........... Aug. 1941 3,912 2,119 6,870 1,525 4,354 2,632 21,412 Aug. 1940 2,971 1,580 4,568 2,069 4,064 1,990 17,242 % Change + 32 + 34 + 50 — 26 + 7 + 32 + 24 8 Months 8 Months 1941 1940 47,039 34,724 25,788 19,379 59,874 39,158 27,598 22,556 53,144 36,135 29,080 19,728 242,523 171,680 % Change + 35 + 33 + 53 + 22 + 47 +47 + 41 BU ILDIN G PERM ITS A N D CO N STR U C TIO N C O N TR A C TS A continuation o f construction activity at a very high level is indicated by building permits issued and contracts awarded in the Fifth district in August. Permits issued in 29 cities last month totaled $12,511,101, an increase o f 8 per cent over $11,584,377 in July this year and 27 per cent above $9,885,738 in August last year. Washington with permits totaling $4,891,990 (exclusive o f all Govern ment w ork) led last month, Baltimore was second with $3,182,046, N orfolk third with $944,245, Richmond 3 MONTHLY REVIEW fourth with $468,536, and Spartanburg fifth with $330,- 021. The aggregate value o f August contract awards for construction in the Fifth district was $145,492,000, set ting a new monthly record and exceeding $47,363,000 in awards in August 1940 by 207 per cent. National fig ures for August 1941 showed an increase of 83 per cent over award figures for August last year. Figures on contract awards by states for July 1941, which were not available when the August 31 R eview went to press, were reported by the F. W . D odge Corporation as fol lows : CONSTRUCTION CONTRACTS AW ARDED STATES Maryland .............................. Dist. of Col............................. Virginia ................................ West Virginia ..................... North Carolina ................... South Carolina ................... Fifth District ...............- July 1941 $16,122,000 7,802,000 15,462,000 14,995,000 6,845,000 3,097,000 $64,333,000 July 1940 % Change $ 7,951,000 +103 6,197,000 + 26 31,728,000 — 51 1,575,000 +852 5,882,000 + 16 3,901,000______ — 21 $57,234,000 + 12 BITU M IN OU S C O A L M IN IN G Bituminous coal mines in the United States produced 45,650,000 tons in August 1941, an increase o f 5 per cent over 43,300,000 tons mined in July this year and a rise of 17 per cent over 39,010,000 tons in August last year. On a basis o f daily output, however, August fell 5 per cent below July, but was 22 per cent above August 1940. Total production this calendar year to September 1 o f 314,352,000 tons exceeded output o f 294,483,000 tons in the corresponding period last year by 7 per cent. Shipments o f coal through Hampton Roads ports to September 6 totaled 14,952,322 tons this year, a decline from 15,621,320 tons to the same date last year. The decline was chiefly due to lower figures on foreign cargo and bunker loadings. In the Fifth district production of coal in August 1941, July 1941 and August 1940, was as fo llo w s: SOFT COAL PRODUCTION IN TONS REGIONS West Virginia ....................... Virginia .................................... Maryland .................................. 5th District ..................... United States ................. % in District ............... Aug. 1941 13,294,000 1,748,000 156,000 15,198,000 45,650,000 33 July 1941 12,517,000 1,675,000 148,000 14,340,000 43,300,000 33 Aug. 1940 11,471,000 1,310,000 114,000 12,895,000 39,010,000 33 C O TTO N TEX TILES Primary textile markets were relatively inactive in August, mills hesitating to accept additional orders in the face o f advancing costs of production and ceiling prices for their products. In addition, practically all mills are sold up months ahead. Wholesale markets for finished cotton goods were quite active most of the month. The price ceiling schedule on cotton gray goods was ex tended to cover combed lawns, dimities, voiles, and high grade combed broadcloths, in addition to the previous list o f print cloths, carded broadcloths, combed broadcloths, narrow sheetings, osnaburgs and tobacco cloths. Mill margins for 17 constructions of medium and coarse cloths widened during August to 20.53 cents, compared with 19.06 cents for July and 11.23 cents for August 1940. COTTON CONSUMPTION— FIFTH DISTRICT In bales MONTHS No. Carolina So. Carolina Virginia August 1941..................... 211,53(7 163,146 18,988 July 1941..................... 227,576 171,346 19,698 August 1940..................... 159,631 127,934 11,131 8 Months, 1941..................... 8 Months, 1940..................... 1,718,645 1,322,519 1,299,436 1,032,157 146,262 96,657 District 393,671 418,620 298,-696 3,164,343 2,451,333 R A Y O N Y A R N PRO D U CTIO N Rayon filament yarn shipments to domestic consumers totaled 37,300,000 pounds in August, according to Rayon Organon, a decline from 39,400,000 pounds shipped in July but an advance over 34,000,000 pounds in August 1940. Stocks o f yarn increased slightly last month, ris ing from 3,600,000 pounds on July 31 to 4,100,000 pounds on August 31. On August 31, 1940, stocks o f yarn totaled 9,900,000 pounds. On August 23, the O P A C S issued mandatory ceiling prices for 52 constructions o f rayon gray goods, effective August 25. The ceilings fixed average prices about 10 per cent below recent mar ket quotations. N o ceilings were set for finished rayon goods, but the O P A C S made it clear that price actions in the finished goods markets will be observed closely. The inventory o f rayon yarn held, by broad weavers at the end o f August 1941 totaled 24,900,000 pounds, compared with 28,300,000 pounds a month and 24,100,000 pounds a year earlier. C O TTO N STATISTICS Spot cotton prices on 10 Southern markets rose $10 a bale during the past month, advancing from an average o f 15.74 cents per pound for middling 1 5/16 inch cotton on August 15 to 17.74 cents on September 12, the latest date for which an official average is available. The rise was stimulated by a scarcity of free cotton outside loan stocks, a small volume o f hedge selling, and lateness o f the new crop. On September 13, 1940, the average base price on the 10 Southern markets was 9.42 cents. The second forecast o f the 1941 cotton crop, issued on September 8 by the Department o f Agriculture, lowered the estimate from 10,817,000 equivalent 500-pound bales as o f August 1 to 10,710,000 bales on September 1, a decrease o f 107,000 bales, or 1 per cent. In the Fifth district, prospective yields increased 19,000 bales in North Carolina and 1,000 bales in Virginia, but decreased 17,000 bales in South Carolina. Production figures in Fifth district states are on page 4. COTTON CONSUMPTION AND ON HAND— BALES Aug. 1941 Fifth district states: Cotton consumed ..................... Aug. 1940 393,671 298,696 Cotton growing states: Cotton consumed ......................... Cotton on hand August 31 in Consuming establishments. Storage & compresses......... 740,270 561,1314 1,322,995 8,901,770 538,869 9,020,372 United States: Cotton consumed ......................... Cotton on hand August 31 in Consuming establishments. Storage & compresses ___ 874,113 650,888 1,697,056 9,296,898 738,051 9,131,474 34,967 23,029,066 65,425 22,084,474 Exports of cotton ............................. Spindles active in month................. MONTHLY REVIEW A U C T IO N TO B A C C O M ARK ETIN G CROP FORECASTS Auction tobacco markets opened in the Border belt on August 12, and 14 markets in the North Carolina New Bright belt opened on August 26. Prices in August were much higher than prices a year ago, and sales were larger, the latter increase being due to earlier openings of mar kets this year. The 1941 tobacco crop in the Fifth dis trict is estimated to be 12.5 per cent below the 1940 crop, but if the August price proves indicative o f the seasonal average, receipts from this year’s crop should be larger than 1940 receipts. Sales in August, all o f flue-cured type tobacco, were as fo llo w s : Priducers’ Tobacco Sales, Lbs. August 1940 August 1941 STATES 38,984,015 74,442,384 ' South Carolina North Carolina Total ............... Throughout the Fifth district the weather in Ailgust was too dry for crop needs, and many crops deteriorated during the month. The following figures show forecasts of production made by the Department o f Agriculture on the basis o f September 1 condition. Yield figures marked ( + ) were raised between August 1 and September 1, and those marked ( — ) were lowered. Cotton (Bales) % Change Acreage Price per Hundred 1941 1940 $26.24 26.88 $26.66 25,346,105 __ 2.7,341,452 52,687,557 $17.78 18.89 $18.36 North Carolina . .. South Carolina . . , Fifth District + — — - 6 4 2 3 West Virginia . . . North Carolina South Carolina . , , Fifth District . . — — — — — - 8 4 7 2 2 3 Bureau of Internal Revenue receipts for August show production of tobacco products as follows in the United States: August 1941 July 1941 August 1940 24,489,824 17,776,522,190 491,027,685 2,971,991 25,246,366 18,404,257,790 487,033,145 3,588,223 25,931,262 15,839,874,477 487,641,197 2,917,649 R E T A IL A N D W H O LESALE TR A D E DEPARTMENT STORE TRADE Percentage increase or decrease in sales, stocks, outstanding orders and outstanding receivables in August 1941 in comparison with Aug. 1940 figures: Orders Receivables Stocks Sales + 17 + 32 + 91 Richmond (5) ....................... +20 ( + 16) + 19 + 119 + 31 Baltimore (10) ..................... 4-36 ( + 22) + 20 + 98 + 29 Washington (7) ................. +32 (+ 2 3 ) + 136 + 18 + 27 Other Cities (12) ............... +32 ( + 18) + 30 + 106 + 19 Fifth District (79)* ........... +34 ( + 22) Same stores by States: Maryland (13 ....................... +36 (+ 2 2 ) Virginia (16) ....................... +28 (+ 2 3 ) West Virginia (15) ........... +42 ( + 21) North Carolina (16) ........... +27 ( + 19) +54 (+ 2 7 ) South Carolina (12) ........... * Includes stores reporting sales only. Note: Second figure under Sales, in parentheses, compares combined sales in 8 months of 1941 with sales in first 8 months of 1940. % Changes in Sales, August and 8 Months of 1941 Compared with Compared with 8. Months August 1940 Maryland (9) ........... Dist. of Col. (7) . . . Virginia (13) ........... North Carolina (5) South Carolina (7) . District (41) + + + + + + 40 38 30 75 74 42 Individual Cities: Baltimore (9 ) ........... Richmond (5) ........... Washington (7) + 40 + 21 + 38 + + + + + + 28 40 28 30 43 33 + 28 + 14 + 40 W HO LESALE TRADE, 195 FIRMS LINES Automotive supplies (9) Shoes (4) ......................... Drugs & sundries (13) . Dry goods (8) ................. Electrical goods (15) Groceries (58) ............... Hardware (15) ............... Industrial supplies (8 ). Paper & products (9) Tobacco & products (9) Miscellaneous (47) ___ District Average (195) Net Sales August 1941 compared with Aug. July 1941 1940 + 34 + 67 + 6 + 37 + 26 +- 1 + 62 + 66 + 64 — 1 + 20 0 + 52 + 10 + 58 + 4 + 56 + 9 + 31 + 6 + 42 + 8 + 36 + 11 West Virginia . . . North Carolina , , . South Carolina . . . Fifth District . . Stocks Ratio Aug. Aug. 31, 1941 collections compared with to accounts Aug. 31 July 31 outstanding August 1940 1941 77 + 25 + 5 — 4 40 + 5 + 32 91 + 6 49 - 8 + 19 74 + 83 + 12 100 + 20 + 3 — 1 45 + 1 + 16 + 10 90 — 3 69 + 3 + 19 0 92 + 38 27 + 7 + 25 70 + 3 + 11 + 25 + 4 + 5 + 5 + 7 + 25,000 739,000 966,000 1,730,000 33,000 629,000 824,000 1,486,000 16,596,000 32,389,000 — 12,404,000 47,400,000 — 22,964,000 131,753,000 — 17,535,000 36,490,000 12,852,000 44,733,000 24,304,000 135,914,000 16,173,000 32,418,000 12,610,000 43,507,000 22,831,000 127,539,000 + 1 0 2 + + 8 2 1,248,000 + 2,415,000 1,562,000 6,500,000 11,700,000 23,425,000 + 1,120,000 1,932,000 1,462,000 5,952,000 10,890,000 21,356,000 1,325,000 2,116,000 1,931,000 4,460,000 9,238,000 19,070,000 550,000 1,252,000 833,000 975,000 539,000 4,149,000 467,000 924,000 642,000 744,000 398,000 3,175,000 31,920,000 100,509,000 2,790,000 526,505,000 82,215,000 743,939,000 26,901,000 99,861,000 2,985,000 529,356,000 85,656,000 744,759,000 2,898,000 10,412,000 3,630,000 8,720,000 3,192,000 28,852,000 2,997,000 10,661,000 2,844,000 8,182,000 2,475,000 27,159,000 1,485,000 3,875,000 7,104,000 5,040,000 17,504,000 1,071,000 4,061,000 8,354,000 5,401,000 18,887,000 216,000,000 371,000,000 23,250,000 610,250,000 149,865,000 249,288,000 9,041,000 408,194,000 Hay (Tons) West V ir g in ia ___ North Carolina . .. South Carolina . .. Fifth Dirstrict .. 478,000 — 984,000 + 812,000 + 998,000 — 613,000 + 3,885,000 + Tobacco (Pounds) West Virginia . . . . North Carolina . .. South Carolina . .. Fifth District . . + 3 — 2 — 10 + 1 + 5 + 1 31,280,000 — 85,097,000 — 2,240,000 — 461,580,000 — 70,550,000 — 650,747,000— Irish Potatoes (Bushels) West V ir g in ia ----North Carolina . .. South Carolina . . . Fifth District .. — 3 + 1 0 + 1 + 7 + 1 2,489,000— 6,776,000 3,630,000 + 6,723,000 + 2,730,000 22,348,000 + Sweet Potatoes (Bushels) North Carolina . . . South Carolina . . . Fifth District . . + 11 + 3 + 8 + 3 + 6 North Carolina . . . South Carolina . . . Fifth District .. — 6 — 5 — 30 - 7 1,500,000 — 3,680,000 — 7,840,000— 5,200,000 + 18,220,000 — Peanuts (Pounds) 157,500,000— 284,760,000 13,650,000 — 455,910,000 — Apples, Commercial (Bushels) Maryland ............... West Virginia ----North Carolina . .. Fifth District .. Source: Bureau of the Census. Yield 1930-1939 Oats (Bushels) RETAIL FURNITURE SALES STATES 22,000 + 516,000 + 411,000 — 949,000 + Yield 1940 Com (Bushels) T O B A C C O M A N U F A C T U R IN G Smoking & chewing tobacco, pounds ............... Cigarettes, number ................. Cigars, number ....................... Snuff, pounds ........................... Yield 1941 (Compiled September 20, 1941) 2,250,000 11,859,000 — 5,102,000 1,400,000 20,611,0 0 0 - 2,077,000 10,660,000 4,868,000 962,000 18,567,000 1,996,000 10,366,000 4,796,000 966,000 18,124,000 MONTHLY REVIEW, September 30, 1941 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 TR IA L PRODUCTION Industrial activity increased fu rth er in A u g u st and the first h a lf o f Sep tem ber, and com m odity prices continu ed to advance. D istribution o f com m odi ties to consum ers expanded considerably. P R O D U C TIO N In A u gu st industrial output increased som ew hat m ore than seasonally and the B oa rd’ s adju sted in dex advanced fro m 160 to 161 p ercen t o f the 1935-39 average. There w ere sharp fu rth er advances in activity in the m achinery, air c ra ft, shipbuilding, and railroad equipm ent industries. L um ber p rodu ction also increased, w hile fu rn itu re production, w hich had been unusually large in July, show ed less than the custom ary seasonal rise in A ugust. O utput o f steel and n on ferrou s metals continued at n ear-ca pacity rates. In the autom obile industry output o f finished cars declined sharply as plants w ere closed during the changeover to new m odel production and output in f a c tories prod u cin g bodies and parts also was red u ced considerably. In the first h alf o f Septem ber autom obile assem blies increased as p rodu ction o f new m odels Federal Reserve index of physical volume of was begun bu t from n ow on, ow in g to G overnm ent restriction on passenger car production, adjusted for seasonal variation, 1935production, output w ill be considerably below that during the previous m odel 39 average=100. By months, January 1935 to year. August 1941. In m ost nondurable g oods industries p rodu ction in A u gu st continued around the high levels reached earlier this year. A t cotton mills activity declined FR EIG H T-C A R LOADINGS slightly fr o m the record level reached in July, w hile at w oolen m ills there was som e increase. R ayon ou tpu t continued at peak levels. In the silk industry operations w ere curtailed sharply, as the G overnm ent requisitioned all supplies o f raw silk, and deliveries o f silk to mills declined fr o m 28,000 bales in July to 2,000 in A ugust. R ubber consum ption also decreased, ow in g to a G overn m ent curtailm ent program . Shoe production, w hich had been unusually large, increased less than seasonally in A ugust, and output o f m anu factu red fo o d products and chem icals show ed seasonal increases fr o m the high levels pre vailing in June and July. A t m ines coal produ ction in A u gust, as in other recen t m onths, w as un usually large fo r the season, and output o f crude petroleu m rose to a record level o f 4,000,000 barrels daily in the latter pa rt o f the m onth. Iron ore ship m ents dow n the Lakes am ounted to 11,500,000 tons, the largest m onthly total on record. V alue o f construction con tra ct awards show ed a fu rth er sharp increase in A u gu st and w as about fou r-fifth s larger than a y ear ago, a ccord in g to F. W . Federal Reserve index of total loadings of reve D odge C orporation reports. The rise fro m Ju ly w as substantial f o r all general nue freight, adjusted for seasonal variation, 193539 averages 100. Subgroups shown are expressed types o f construction bu t was m ost pron ou n ced fo r pu blicly-financed projects. in terms of points in the total index. By months, A w ards f o r residential bu ildin g continued to increase. January 1935 to August 1941. D IST R IB U T IO N Sales o f general m erchandise rose sharply in A u g u st and w ere at an exWHOLESALE PRICES OF BASIC COMMODITIES CTtrem ely high level fo r this tim e o f year. The B oa rd’ s seasonally adju sted index 6 N 1 0 o f departm ent store sales advanced to 133 p ercen t o f the 1923-25 average as 6 Ko com pared w ith 115 in Ju ly and an average o f 103 in the first h a lf o f this year. In the early part o f Septem ber departm ent store sales declined fr o m the peak 1 0 reached in the latter part o f August. 2 10 0 R ailroad freigh t-car loadings in A u gust w ere m aintained in the large vol1 0 ume reached in June and July. 8 Coal shipm ents increased, fo llo w in g som e I leo reduction in July, while loadings o f grain, w hich had been large since last spring, . declined. - 140 C O M M O D ITY P R IC E S 10 2 W holesale prices o f m ost grou ps o f com m odities continued to advance io from the m iddle o f A u gu st to the m iddle o f Septem ber. o P rices o f grains, other foodstu ffs, and cotton show ed large increases and there w ere advances also in prices o f a num ber o f industrial com m odities n ot covered b y F ederal p rice ce il ings. F ragm en tary data available indicate that retail prices o f fo o d s and other Bureau of Labor Statistics’ indexes based on com m odities rose fu rth er during this period. 12 foodstuffs and 16 industrial materials, August A G R IC U L T U R E 1939^=100. Thursday figures, January 3, 1935 to September 11, 1941. The ou tlook fo r agricultural production in 1941 show ed little change during August. Crop prospects w ere reduced slightly b y drought but a ggregate crop p roduction is expected to be tw o percen t larger than last year and the largest MONEY RATES IN NEW YORK C ITY f o r any year except 1937. T otal m arketings o f livestock and livestock products w ill p roba bly be the largest on record. P relim inary estimates o f the D epart m ent o f A gricu ltu re indicate that cash fa rm incom e, including G overnm ent paym ents, w ill be about $10,700,000,000, com pared w ith $9,120,000,000 in 1940. ......" TR :EASURY bo NDS.......... B A N K C R E D IT C om m ercial loans at rep ortin g m em ber banks in 101 cities continu ed to ’■ A s \s rise substantially during the fo u r weeks ending Septem ber 10. Bank holdings \A , o f U nited States G overnm ent securities showed little net change, w hile h oldings o f other securities increased som ewhat at N ew Y ork City banks. A s a result TREASURY NOTES o f the expansion in loans and investm ents bank deposits continued to increase. V 5t Y I /* UN ITED S T A T E S G O V E R N M E N T SE C U R IT Y M A R K E T vu TREASlJRY BILLS > -v . P rices o f Treasury bon ds increased in the latter pa rt o f A u g u st b u t sub sequently declined som ewhat in the first part o f Septem ber. On Septem ber 15, 1935 1936 1937 1938 1939 1940 1941 the partially tax-exem pt 2 % p ercen t 1960-65 bonds w ere y ield in g 2.06 percen t com pared w ith the record low yield o f 2.02 percent. Y ields on T reasu ry n otes Weekly averages of daily yields of 3- to 5-year showed little change in the period. tax-exempt Treasury notes, Treasury bonds call u 3 J \ able after 12 years, and average discount on new issues of Treasury bills offered within week. For forweeks ending January 5, 1935 to September 13, FRASER 1941. Digitized
