The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FED
)RICHMOND
SEPTEMBER 1951
FIFTH DISTRICT MEMBER BANK LOANS
MILLIONS OF DOLLARS
0
200
400
600
800
mmd{
sss
.................
>♦♦♦<
i 1i 1i 1i i 1i r i ' i ' i ' i ' i 1i ' i ' i 1 i ' i ' i ' i ' i ' J ' i ' i i ' i ' i ' i ' i ' i 1i ' i ' i ' i ' i 1 ■
APRIL 1951
BSBSB1
1
—
M g
W ^i
if
i1
i -----i i .T
1 , 1 ,1-----1 1
i -----i 1 i 1—i I— i-J-----i 1_1.-1._.L_I
i i i i ----l l1
i i,)
1-----------I
----- 1
----- 1-1
1 1 iT, i ,Ti 1 i 1 i 1 i.1 i 1 i 1j 1 iT, i 1Li ■
JUNE 1951
e s p i t e the sharp reversal in the trend of busi
ness loans in the second quarter, shown by the
above chart, net loans at midyear were up 15.5%
from a year ago and largely accounted for the
record gross earnings of Fifth District member
banks. Higher taxes, however, brought net profits
after taxes below first half 1950 levels. These and
other developments are analyzed in the article be
ginning on page 4.
D
Also In This Issue
I
-----------
Fifth District Trend Charts______ ^______ Page
2
The Savings Bond D rive________________ Page
3
Bumper Crops Mean H igh Farm Incomes
in 1951-------------------------------------------- Page
7
Business Conditions and Prospects______ Page
9
Statistical Data_________________________ Page 11
National Business R eview ____.__________ Page 12
F e d e ra l Reserve Bank of Richmond
F
if t h
D
is t r ic t
T
r e n d s
WHOLESALE DRY GOODS
RETAIL FURNITURE SALES
Wholesalers’ sales of dry goods rose 17% after seasonal correction
during the month of July to a level 3% ahead of a year ago. These
sales currently are considerably below where they were last fall, or
earlier this year, but they are still what might be termed a high area.
Retail furniture net sales made no gains during July from the
previous month after seasonal adjustment but were down 20 % from
the same month in 1950, the decline chiefly being caused by the scare
buying sales of last summer.
BUILDING CONTRACT AWARDS-PUBLIC WORKS AND UTILITIES
BUILDING CONTRACT AWARDS “MANUFACTURING
Contract awards for public works and utilities in July rose 19%
(adjusted) from June and stood 126% ahead of July, 1950. The
bulk of this work is in expansion of public utilities facilities. There
has been a sharp upward trend in this type of construction over the
past year, and with the tight situation in structual steel, it might
be that some slowdown may be necessitated.
Construction contract awards in July rose 309% above those in
June to a level 173% above a year ago. A large backlog of this type
of construction exists, and work on these projects will require many
employees and continue for many months.
DEPARTMENT STORE SALES
MANUFACTURING EMPLOYMENT
Department store sales in this District rose 6 % after seasonal cor
rection from June to July and made a very good showing of only a
10% reduction against July, 1950, when sales were inordinately high
because of the scare buying wave. The drop in sales from a year
ago and the general downward trend in total retail sales has been
due mainly to hard goods.
Manufacturing employment in the Fifth District backed up in June
the latest figures available but has in the main been on a flat level
during much of the first six months. Non-manufacturing employ
ment, on the other hand, has shown a substantial rise with construc
tion and Government accounting for the greater part.
<2 y
S e p te m b e r 1951
y t f & r t M A / jfb A c s u *'
The Savings Bond Drive
United States Treasury is again in the midst of
a Savings Bond Drive (scheduled dates— Septem
ber 3 through October 2 7 ), the success of which can
aid greatly in preventing a resurgence of inflation in
coming months, as well as provide funds for the heavy
and rising Defense Program.
The Federal Reserve Bank of Richmond not only en
dorses the fiscal soundness of this Savings Bond P ro
gram, placing the debt as it does outside the banking
system, but feels that in their own interest bankers,
businessmen and the general public should lend their
full support to the drive.
The banking system is interested in this program for
many reasons, primarily since it can contribute toward
relieving inflationary pressures on the economic system
occasioned by the large expenditures necessary for re
armament. It is also in harmony with Federal Reserve
policies designed to accomplish the same purpose.
T
h e
Savings Bonds Vs. Inflation
Because of the recent moderate decline in the com
modity price level, many have considered that inflation
as a national problem has been eliminated. This can
hardly be the case. In the current fiscal year, defense
expenditures will probably run between $40 and $50
billion, and in subsequent years considerably higher.
Their impact on business is likely to be felt strongly in
the next two fiscal years.
Since such expenditures dispense income to the peo
ple and bring forth no offsetting supply of consumer
goods, they will create strong inflationary pressures.
A ny measures which can be taken to alleviate these
pressures are useful, and the Savings Bond Drive is of
primary importance in this respect. Savings Bond pur
chases, particularly among the rank and file of wage
and salaried workers, defer a part of their purchasing
power, and thus prevent market-place bidding now for
goods and services in relatively short supply. The heavy
military expenditures to which the nation is committed
might well be spent futilely if the economy is either
temporarily or permanently weakened by inflation.
W h y Bankers Should Back the Drive
Bankers are certainly interested in a sound currency.
The arguments currently advanced against the purchase
of Savings Bonds can be applied with equal emphasis to
time and savings deposits, currency, checking accounts,
life insurance policies, and pension funds. N o purpose
is served in deploring the “ 54-cent dollar” while ab
staining from the Savings Bond Drive, for to do so
could hasten the advent of a “ smaller” dollar.
W h y Individuals Should Buy Savings Bonds
Financial history indicates that families are in a much
better position when they have a “ nest egg” to cover
adverse contingencies. Here the Savings Bond Program
performs in admirable fashion, for it is essentially cash
bearing interest; it can provide an investment program
for the rank and file of small savers, with a higher yield
than other fixed income obligations of similar quality.
They can be cashed at any time after 60 days, or may
be allowed to run for 20 years, with no need for check
ing on market values.
In summary, the national defense should and must
be provided for— logically both by heavier taxation and
intelligent borrowing by the Treasury, with the bor
rowing done in a manner that keeps the national econ
omy strong and relatively stable instead of by means
contributing to the undesirable effects of inflation. En
couraging the sale of these bonds will strengthen the
financial position of millions of Americans and place
them later in a position to be active consumers when
the economy needs consumers.
A3 V
F e d e ra l R eserve Bank of Richmond
Banking Developments in the First Six Months of 1951
net earnings from current operations of Fifth
District member banks for the first half of 1951,
largely due to increased earnings on loans, were more
than offset by the heavy impact of higher taxes, which
brought net profits after taxes to 3.2% below the same
period last year. Net profits of $18.7 million represented
a return on capital of 8.6% (on an annual basis) as com
pared with 9.5% for the first half of last year. For all
member banks throughout the nation, net returns av
eraged 7.8% for the first half of this year as compared
with 8.5% for the same period last year.
H
ig h e r
Taxes on net income of Fifth District member banks
were up 46.5% — more than $4 million— from first half
1950. Whereas these taxes took 41 cents of each dollar
of profits before income taxes in the first six months of
1951, they took 31 cents in the similar period in 1950.
This tax increase was due to a number of factors, among
them : larger bank income, increased tax rates, the new
excess profits tax, and tax accrual in anticipation of fur
ther tax increases.
Gross earnings of member banks in the Fifth Dis
trict reached their highest peak in the first half of 1951
— exceeding $81 million, or 9.4% above the first six
months of 1950. Dominant factor in this increase was
earnings on loans, which accounted for more than 55%
of total earnings for the period. The larger loan volume,
which continued to increase from January to mid-April,
along with increased rates on loans, accounted for vir
tually all of the $7 million rise in gross earnings for the
first six months.
Interest and discounts on loans rose $6.5 million, or
16.9%, over the same period in 1950. Interest on United
(Dollar amounts in thousands)
First
Half*
1951
81,424
Per
Cent
Change
+ 9.4
19,529
45,118
16,777
48,513
32,911
— 4.3
+ 1 6 .9
+ 8.7
+ 8.8
+ 10.3
2,225
— 2.9
3,619
31,517
12,828
18,689
6,452
12,237
— 11.2
+ 1 2 .3
+ 4 6 .5
— 3.2
+ 4.2
— 6.7
1 Includes service charges and other fees on banks’ loans.
2 Recoveries credited to valuation reserves not included.
3 Losses charged to valuation reserves not included.
4 Interest on capital notes and debentures, and dividends on pre
ferred stock estimated and included.
♦Preliminary.
Current expenses of member banks in the Fifth Dis
trict advanced to $48.5 million in the first half of 1951
or $3.9 million above the same period the previous year.
Since banks were able to increase total earnings (up
9 .4 % ) at a faster rate than the increase in expenses
(8 .8 % ), net current earnings increased more than gross
and were 10.3% above first half 1950. Net current ea;
ings before income taxes rose more than $3 million in
the first half of 1951 over the same period for the pre
vious year. After a small decrease in recoveries, profits,
and transfers from valuation reserves and a larger de
crease in losses, charge-offs, and transfers to valuation
reserves, profits before income taxes were up almost
$3.5 million, or 12.3%.
The increase of more than $4 million in taxes on net
income wiped out the entire gain in profits before taxes,
with the result that profits after taxes declined 3 .2% —
from $19.3 million in first half 1950 to $18.7 million in
first half 1951.
Cash dividends of almost $6.5 million were declared
by Fifth District member banks for the first half of 1951
— barely half the amount paid in taxes on net income.
Interestingly, banks paid a slightly larger dollar amount
in dividends than they did a year earlier and the decrease
in profits after taxes was thus reflected in lower retained
earnings.
Loans
M E M B E R B A N K E A R N IN G S , F IF T H D IS T R IC T
F IR S T H A L F 1950 A N D 1951
First
Half
1950
Earnings ______________________________________ 74,448
Interest and dividends on U. S. Govern
ment securities ___________________________ 20,394
Interest and discount on loans ----------------- 38,611
All other earnings1 ________________________ 15,438
Expenses ______________________________________ 44,603
Net current earnings before income taxes — 29,840
Recoveries, profits, and transfers from valua
tion reserves2 -------- -------------------------------- 2,291
Losses, charge-offs, and transfers to valuation
reserves3 __________________________________ 4,074
Profits before income taxes __________________ 28,057
Taxes on net income ______ ____ _____________
8,758
Net profits ___________________________________ 19,299
Cash dividends declared4 --------------------------------- 6,190
Net profits after dividends __________________ 13,109
States Government securities continued the downward
trend in the first half of the year, due to the declining
amount of these securities held by member banks, and
showed a decrease of 4.3% from the same period of last
year. All other earnings increased by 8.7% over the
first half of 1950.
Despite a loan increase of $85 million by Fifth District
member banks in the first quarter (to the highest point
on record), they fell $24 million in the second quar
ter and showed the smallest half year percentage gain
(3 .1 % ) since the end of W orld W ar II, except for first
half 1949. Many factors contributed to the decline in
the volume of loans held by Fifth District member banks,
including: open market operations, high reserve require
ments, selective credit controls, the program for volun
tary credit restraint, normal seasonal reductions in many
lines, and the fact that many businesses which normally
would be borrowing were instead liquidating their inven
tories and paying off loans.
The slackening loan volume in this District after midApril centered in business loans. Commercial and in
dustrial loans, which showed a counter-seasonal rise of
$61 million in the first quarter, declined $40 million from
April 9 to June 30. They were, however, up $158 mil
lion, or 27.2% , from a year earlier. If the $32 million
i 4 y
y tfc w M
S e p te m b e r 1951
ly jft& c s u *
41.9% . The half year increase ($18 million) was the
largest in dollar amount for any half year in the postwar
period, although the percentage increase was exceeded
in both 1947 and 1948.
L O A N S A N D D IS C O U N T S
F IF T H D IS T R IC T M E M B E R B A N K S
(Dollar amounts in millions)
June 30, Dec. 30, April 9, June 30,
1951*
1950
1950
1951
739
718
779
Commercial and industrial loans
581
54
55
43
61
Loans to farmers ----------------------Loans to brokers and dealers in
13
12
9
9
securities ____________________
Other loans for purchasing or car
64
68
rying securities ----------------------45
57
Real estate loans:
44
45
47
45
On farm land _____________ ____ _
380
375
376
389
On residential property ________
143
139
129
136
On other properties ____________
Instalment loans to individuals:
Retail automobile paper ______
107
117
115
117
46
47
46
36
Other retail paper ____________
24
24
24
Repair and modernization loans
23
74
74
74
Cash loans _____________________
70
Single-payment loans to individuals:
84
85
88
Less than $3,000 ________________
81
139
158
165
171
$3,000 and over __________ __
3
2
4
Loans to banks ___________________
6
50
58
61
63
All other loans ___________________
1,962
2,048
2,024
Loans— Gross _____________________ 1,752
19
21
22
22
Reserves __________________________
1,941
2,002
Loans— Net _______________________ 1,733
2,026
478
Number of banks ----------------------477
477
475
Loans for purchasing and carrying securities rose
5.5% in the second quarter to a level of $77 million.
All of the increase occurred in other loans for purchas
ing or carrying securities; loans to brokers and dealers
in securities remained constant.
Securities
Data may not add to totals because of rounding.
* Preliminary.
increase in single-payment loans to individuals of $3,000
and over (which are largely business loans) is included,
about 71% of the increase in total loans for the oneyear period was in business loans.
Real estate loans, which topped out for Fifth District
member banks at year end 1950, continued to decline
during the second quarter. The $9 million decline dur
ing the first half of the year contrasts sharply with first
half increases ranging from $40 million to $60 million
for all years since W orld W ar II, with the exception of
1949. The mortgage loan decline reflects the effects of
recent open market operations, materials allocations, and
the fact that Regulation X appears to be taking hold, as
well as the fact that for some time many banks have
felt that their mortgage portfolios were large enough.
All of the decline in real estate loans in the first half
year occurred in residential m ortgages; holdings of other
mortgages showed slight net increases for the first halt.
The effectiveness of Regulation W , in conjunction
with general credit controls, was reflected by consumer
borrowing at Fifth District member banks. Consumer
loans (excluding single-payment loans to individuals of
$3,000 and over), which had remained constant in the
first quarter, rose only $4 million in the second quarter.
This moderate rise contrasts with a $44 million increase
in first half 1950. All of the first half increase occurred
in single-payment loans to individuals, which are not
subject to Regulation W .
Loans to farmers rose by 13% to $61 million in the
second quarter; the increase for the entire first half was
Holdings of United States Government obligations,
which declined $171 million in the first quarter, rose
$19 million in the second quarter. A t $2,293 million
holdings of Governments were down 7.2% from a year
ago, and 6.2% below year end holdings. There was no
very decided shift during the second quarter in the pat
tern of maturities, although total holdings of Treasury
bills, certificates, and notes increased proportionately
more than did the longer term issues. The small rise
in Government obligations held by member banks in the
Fifth District in the second quarter is the first notice
able trend upward since late 1949. Before the price de
cline in Governments late in the first quarter, banks had
been joining with other investors in switching from Gov
ernments to other, higher yielding assets. The lower
price of these securities, together with other factors,
seems to have imposed a sufficient penalty on the sale of
Governments to reverse this tendency to switch into
loans. A s of April 9, loans comprised 43.8% and Gov
ernments 49.1% of total loans and investments; on June
30, the percentages were 43.3% in loans and 49.6% in
Government securities.
Holdings of non-Government securities, which had
declined $9 million in the first quarter from the record
$336 million held at year end 1950, rose $2 million from
April 9 to June 30. A t $329 million holdings of nonGovernment securities were 10.8% above holdings on
June 30, 1950.
Reserves
Reserves, cash, and bank balances of Fifth District
member banks fell by $103 million in the six months’
period from December to June, notwithstanding a $63
million increase in the amount of reserves carried with
the Federal Reserve Bank. The largest decrease for the
period was in balances with banks ($84 m illion), al
though cash in vault and cash items in process of col
lection showed appreciable declines. For the one-year
period from June 30, 1950 to June 30, 1951 primary
reserves of member banks rose 12.4%, accounted for
principally by an increase of $154 million (2 3 .4 % ) in
the amount of reserves held with the Federal Reserve
Bank.
i 5 y
F e d e ra l R eserve Bank of Richmond
Liabilities
Demand deposits rose $11 million (0 .2 % ) in the sec
ond quarter, a slightly smaller increase than that shown
for the country as a whole. A t $4,461 million demand
deposits were up $271 million (6 .5 % ) over the past
year. Demand deposits of individuals and businesses
were up $9 million in the second quarter; deposits of
state and local governments and of banks increased by
$27 million and $10 million respectively. U. S. Govern
ment deposits were down $31 million and miscellaneous
demand deposits were off $6 million. Adjusted demand
deposits at $3,540 million were virtually unchanged from
April 9, but were up $171 million (5 .1 % ) from a year
earlier.
Total time deposits were up $11 million in the second
quarter, although savings accounts of Individuals con
tinued to decline counter-seasonally, and at $1,231 mil
lion were off $26 million (2 .1 % ) from a year earlier.
All other categories of time deposits continued to in
crease during the quarter.
Total capital accounts showed a net increase of $12
million for the entire half year, and at $438 million were
up $23 million (5 .5 % ) from a year earlier. A t this level
total capital accounts were equal to 7.55% of total de
posits, up slightly from 7.50% a year earlier. For all
member banks in the United States capital accounts at
midyear were equal to about 7.7% of deposits, and had
declined slightly relative to deposits since June 1950.
A S S E T S A N D L IA B IL IT IE S
FIFTH DISTRICT MEMBER BANKS
(Dollar amounts in millions)
ASSETS
Loans and investments
Loans (including overdrafts)
U. S. Government obligations
Other secu rities_____________
Reserves, cash, and bank balances_____
Reserve with Federal Reserve Banks
Cash in v a u lt _______________________
Balances with b a n k s_________________
Other assets
Total assets___________________________________________________________
June 30,
1950
Dec. 30,
1950
April 9,
1951
June 30j
1951*
4,501
1,733
2,471
297
1,408
4,722
4,628
1,941
2,445
336
1,686
2,026
2,274
327
1,556
780
133
369
275
82
6,266
4,624
2,002
2,293
329
658
101
348
301
77
5,986
749
125
445
367
80
6,489
4,190
. 3,278
136
320
384
72
4,693
3,593
120
326
549
105
1,583
812
104
361
307
81
6,288
LIABILITIES
Demand deposits _____________________________
Individuals, partnerships, and corporations
U. S. Government__________________________
States and political subdivisions ___________
Banks
Certified and officers’ checks, etc.
4,450
3,413
227
324
408
79
4,461
3,422
196
351
418
73
1,341
1,328
1,332
Individuals, partnerships, and corporations______________________________ , 1,257
30
U. S. Government and Postal S avin gs___
52
States and political subdivisions________
2
Banks __________________________________
5,531
Total deposits ___________________________
6
Borrowings
35
Other liabilities
1,235
31
50
12
1,234
32
54
13
1,343
1,231
35
60
18
6,021
1
40
5,783
6
39
5,804
4
42
Total liabilities____________________
Total capital accou n ts______________
Total liabilities and capital accounts
5,572
415
5,986
6,062
426
6,489
5,827
439
6,266
5,849
438
6,288
Demand deposits a d ju sted ______________
Number o f ba n k s_______________________
3,369
478
3,657
477
3,542
477
3,540
475
Time d ep osits______________________
Data may not add to totals because o f rounding.
* Preliminary.
i 6 y
S e p te m b e r 1951
Bumper Crops Mean High Farm Incomes In 1951
District farmers are harvesting a big crop. In
some areas adverse weather has made it a difficult
year in which to produce a crop. Labor has not been
plentiful, and farm wage rates, though low compared
with most industrial and other off-the-farm jobs, are,
nevertheless, considerably higher than farmers ever be
fore have paid. Other costs in the aggregate also have
been higher than ever before.
total grain and hay production will be substantially the
same as in 1950 and much above the 10-year average.
Thus, with prospects for
a sustained high level of economic activity and the tonic
of sharply higher prices of farm commodities ever since
Korea, most farmers made an all-out effort to expand
production in 1951. There has been the patriotic appeal
for all-out production and farmers have been told that
high-level production would be a genuine contribution
to the nation’s defense program. Acreage allotments for
tobacco and peanuts were raised substantially from pre
vious levels, while those for cotton were suspended for
the year.
Thus, even after repaying
production loans, farmers as a group will have a sub
stantial amount of money to use for other purposes.
Some will go to repay farm debts or for investment
in the farm business. Some also will go for improv
ing the farm home, buying automobiles, major appli
ances, and other consumer durables and nondurables.
It is expected that many farmers will take a substan
tial share of their larger 1951 net farm income and
add it to their present working capital or savings. Both
uses would be expected to strengthen their long-run
competitive position and their capacity to withstand ad
versities.
if t h
F
Higher Net Income in Prospect
Although some price weakness has recently been evi
dent— especially in cotton— farm commodity prices gen
erally are 12% higher than a year ago and 4 % above
parity. Most individual products, however, are still be
low parity. In fact, only 9 of the 43 commodities for
But, despite these high costs and difficulties, farmers
which data are available are equal to or above parity.
have had a real incentive to do their best in 1951. The
The larger marketings of crops this year will mean that
slight softening that has recently been in evidence in
gross cash income in the District will be considerably
some parts of the economy has been at least partially
higher than last year. Through May cash income from the
offset by continued evidence of strength in other sectors.
sale of farm products in Fifth District states was 20%
above th e c o r r e s p o n d i n g
On net balance the national
economy is running in high
period of 1950. In the case
BALES OF COTTON REQUIRED TO REPAY $100 DEBT
gear, and appears likely to
o f l iv e s t o c k and livestock
BALES
BALES
continue to do so for the
products, from which about
foreseeable future. A t cur
40% of the income is nor
rent prices the gross output
mally received in these five
of goods and services was
months, receipts this year
running at an annual rate of
were running 25% ahead of
$329 billion in the second
1950. Although only 14%
quarter of 1951. During the
of the income from sale of
same period personal dis
crops is normally in hand
posable income was at an
by the end of May, income,
annual rate of $225 billion.
up to that time, was running
Demand for farm and non
13% higher than in 1950.
farm products for both do
Indications are that rising
mestic use and export is ex
gross farm income will ma
pected to continue strong
terially exceed higher farm
over all though not uniform
c o s t s w ith a c o n s e q u e n t
ly strong for all products.
increase in net farm income.
According to the August crop report, states of the
Fifth Federal Reserve District have increased produc
tion of cotton by 152%, tobacco by 9 % , and peanuts by
5% over 1950 levels. These three cash crops normally
account for about three-fourths of the District’s income
from crops and around 45% of the total cash income
from the sale of crops, livestock, and livestock products.
A 7% smaller corn crop is in sight for this area. In
creased production of other feed grains and hay, how
ever, will about offset the decline in corn so that the
Farm Products Have High Purchasing Power
Much is heard today of the existing 50-cent dollar.
Farmers and others have been apprehensive over the
general decline in the purchasing power of the dollar.
Be that as it may, the economic position of farmers in
the economy has improved in numerous respects, in
i 7 }►
F e d e ra l Reserve Bank of Richmond
eluding their purchasing power. For example, during
the period 1935-39 it would have taken eighteen bales
of cotton to buy a one-and-a-half ton farm truck. A t
the current parity price for cotton, twelve and a half
bales will buy the same sized truck. In terms of beef
cattle, it would now take only 7,300 pounds of beef to
buy the truck— again much less than in 1935-39 when
13,500 would have been required. Not all farmers, how
ever, have been so fortunately affected by price changes
— a dairy farmer, for example, would have to pay for a
truck about the same amount of milk now as in 1935-39.
For comparative purposes it might be noted that in 1939
it took well over a year for the gross wage of a fully em
ployed southern cotton mill worker to equal the purchase
price of a new car, whereas at the present time only
60% as many weeks work are required.
1945. In this five- state area the aggregate farm-mort
gage debt outstanding January 1, 1951, was $346 mil
lion. Insured commercial banks held $85 million of farm
mortgages or one-fourth of the total. This compares
with $38 million or 16% of the total in 1945.
Although the dollar amount of farm debt has in
creased, the relationship of debt to value of assets or to
farm income has shown a decided reduction through
time. For example, on January 1, 1940, the total mort
gage and nonmortgage debt of Fifth District farmers
was $336 million. This debt was equivalent to 62% of
the previous year’s cash returns from farm marketings.
By 1951 the total debt was up to $465 million or 39%
above 1940. However, income had risen at so much
faster a rate than debt that the 1951 debt was only 25%
of the corresponding 1950 farm income.
Farm commodities also have gained in purchasing
power so far as debt repayment is concerned. For ex
ample, during the period 1935-39 two bales of cotton
were required to repay a $100 debt. Last year only onehalf a bale would do the job. Even with lower prices
in prospect for 1951, only three hundred pounds of cot
ton at current parity prices would repay a $100 debt.
So far as the twentieth century is concerned, 1919 and
1950 are the only two years in which less than three
hundred pounds of cotton would have been required
to repay a debt of $100.
CROP P R O D U C T IO N IN T H E F IF T H D IS T R IC T
1951 A N D C O M P A R ISO N S
Crop
Tobacco:
Flue-cured_______
Fire-cured_______
Burley __________
Maryland ________
Sun-cured _______
Consideration also needs to be given to how much
more it now costs to produce a crop than it did some
years ago. Costs of things farmers buy have risen by
varying amounts and sharp changes have also occurred
in the relative importance of certain items.
Total _________
Cotton ____________
Peanuts ______ ___ _
..Mil.
-M il.
..Mil.
—Mil.
..Mil.
lbs.
lbs.
lbs.
lbs.
lbs.
1,242
13
44
46
4
_M il. lbs.
-.1,000 bales
...1,000 lbs.
+37
— 6
+35
—
J
—39
+33
+
9
— 1
+
9
+• 15
+
5
1,349
+36
+
1,489
509,785
+14
— 2
+152
+ 5
184,058
29,959
42,087
7,907
1,028
+21
9
Feed Crops:
The cost of fertilizer is currently only 50% higher
than in 1935-39 while farm machinery prices are 97%
higher than prewar and farm wage rates are nearly
four times as high as in 1935-39. These figures par
tially demonstrate the wisdom of many farmers who
have striven for higher yields by the liberal and wise
use of fertilizer and who have purchased machinery as
a means of reducing the necessary amount of hired
labor.
Corn ____________
Wheat __________
Oats ____________
Barley __________
Rye ______________
Grain Sorghum*
Hay ____________
1,000
1,000
1,000
1,000
1,000
1,000
1,000
bu.
bu.
bu.
bu.
bu.
bu.
tons
Soybeans for Beans
Potatoes __________
Sweet Potatoes ___
Apples ____________
Peaches ... ........... .....
1,000
1,000
1,000
1,000
1,000
bu.
bu.
bu.
bu.
bu.
+ 13
+33
+30
__ 22
1,000
5,095
9,354
20,498
12,500
18,175
13,184
+
5
+96
— 20
— 27
+18
+53
— 7
+ 31
+
7
+
7
+
6
+ 15
+
2
+
6
— 19
— 26
— 7
+ 343
* North Carolina only.
Source: USDA, BAE, Crop Reporting Board.
Farm D eb t Increasing
O u tlook in B rief
Since many farmers normally use borrowed funds to
pay a considerable part of their production expenses, it
is not surprising that the higher prices for items bought
have been reflected in larger borrowings. The non-realestate debt of Fifth District farmers has risen each year
since 1945, when it totaled $61 million. By 1950 it had
risen to $110 million and on January 1, 1951 totaled
$120 million. Comparable data as of June 30 would
show a considerably higher non-real-estate debt. The
percentage share held by insured commercial banks has
risen from about 40% in 1945 to 58% in 1951.
Farm-mortgage debt also has risen year by year since
Unit
__________ 1951 Production______
Indicated
% Change from :
August 1,
1940-49
1951
Average
1950
Fifth District farms are harvesting a big crop. It was
difficult to produce and costs were high. Larger crops
and generally favorable prices should result in both
higher gross and net farm income this year than last.
Farm debt is at a higher level but is not considered dan
gerous, though it is true that a considerable number of
individual farmers are so heavily involved that a poor
crop or a break in prices could put them in more or
less serious trouble. For the most part farmers in the
Fifth Federal Reserve District are enjoying a level of
living and a degree of prosperity which is approximately
equal to the best they have ever experienced.
{ 8 y
S e p te m b e r 1951
Business Conditions and Prospects
retail trade situation has been at the base of the
soft industrial activity in evidence for the past few
months. It is interesting, therefore, that District de
partment store sales in July and early August did not
decrease by the normal seasonal proportions. The ad
justed index rose 6% from June to July. Adjusted
furniture store sales held at the fairly good level of
June, while most lines of wholesale trade either rose by
moderate percentages or remained at June levels. There
was a fairly substantial increase in wholesalers' dollar
sales of dry goods. Similar trends in varying degrees
have been noted in other areas of the country, and this
indicates possible early resumption of operations at a
higher level, particularly in the nondurable goods in
dustries of this District. One optimistic sign is the fact
that new business has been written in fairly substantial
amounts in the textile industries in the last half of
August.
Lumber markets, which have been soft for several
months, have shown signs of stabilizing, and new busi
ness again is running ahead of production. Bituminous
coal production on an adjusted basis held substantially
at June levels, though actual output was reduced sub
stantially by miners’ holidays and this, in turn, caused a
reduction in stockpiles.
Life insurance sales in July, though below the very
high figures of last year, are continuing a rather sharp
upward trend. Cashing of savings bonds during July
continued the downward trend in evidence since Jan
uary, while new purchases rose moderately above those
in June, and may be expected to rise sharply due to the
current bond drive.
Nonagricultural employment levels, despite the cur
rent lay-offs, have continued to rise in the District, re
cent gains having been mainly outside the manufactur
ing fields. Manufacturing industries in both Maryland
and W est Virginia continued to show a rising level of
employment, with other States generally leveling off.
The volume of construction in the District rose no
tably above the June level, with a gain accounted for
mainly by commercial buildings, factories, public works
and utilities.
Trade
T
h e
Although the total trade level in the United States
continued to recede through June, the latest date of rec
ord, there are some indications that this trend may have
begun to reverse during July and August. Department
store trade figures in this District have indicated a mod
erate upward trend since April. The general trade level
nationally is not keeping pace with personal income, and
it is reasonable to expect that the trade level may soon
reverse, since the income level should continue to rise.
Soft goods lines have sold in good volume this sum
mer and some of the hard lines have completed their
downward adjustment. Some indicators in mid-August
pointed to the fact that sales of such things as house
hold appliances, radio, television, etc., were either gain
ing or showing smaller percentage losses from the very
high figures of August 1950. Sales of automobile es
tablishments, though below last year’s very high figures,
also have begun to show some signs of holding. A uto
mobile sales in the months ahead, however, will be
handicapped by short supplies of materials allocated for
their manufacture. Building materials and hardware
retailers have also shown a sales decline, along with
the reduction in residential building, but these sales like
wise are giving evidence of holding at current levels.
On balance, it seems that the trade level will again trend
upward in the autumn and that the rise will result in
higher production levels in this District. If this occurs,
many concerns, unfortunately, may find that part of their
labor supply has been drained away by defense installa
tions and the military.
C onstruction
Although contract awards for factory construction re
bounded sharply in July from its June decline (M ay
witnessed an all-time high level), there have not been
many announcements of intended construction thus far
in August. This may be due to the tight situation in
structual steel or the fact that there have been some
plant construction delays due to inability to secure ma
terials. It is probable that some further delays may be
experienced in plants already projected. '
Commercial contract awards in July rose sharply from
June’s adjusted figures, but are still running about onethird below a year ago. These July awards must have
been authorized by D P A since this is necessary in most
instances of this type of construction. Residential build
ing also rose moderately above seasonal proportions,
with the gain mainly in one- and two-family houses.
Several large public housing projects were placed under
contract in July, but the aggregate of multiple structural
dwellings in the District declined sharply on an adjusted
basis from June. Public works and utilities awards, ad
justed, rose 19% from June to July and were 126%
ahead of a year ago. Relaxation in credit terms and an
expanded defense housing program should prove a
sustaining influence in residential housing in coming
months.
The military construction detailed in H R4914 and
passed by the House of Representatives on August 14
called for a national outlay of $5.7 billion. O f this
amount, $509 million or 9% of the total was scheduled
for construction in the Fifth Federal Reserve District.
O f this $509 million total, $144 million will be in Mary
land; $173 million in V irginia; $120 million in North
Carolina; $66 million in South Carolina and $6 million
in the District of Columbia.
A 9 y
F e d e ra l Reserve Bank of Richmond
Banking Developments
Business loans of Fifth District weekly reporting
member banks continued to decline contra-seasonally to
mid-August. According to reports from selected banks
accounting for a large proportion of the District’s loan
volume, the decline was attributable in large part to
reduced loans to manufacturing and mining concerns—
principally textiles. Since mid-July, however, loans to
agricultural processors and commodity dealers have in
creased sharply, reflecting largely the opening of the
tobacco markets. This seasonal loan upturn resulted
in an increase in total business loans in the District in
the week ended August 22.
Business loans of weekly reporting member banks in
the United States began to rise in late July— thus
preceding the District rise by several weeks— with
principal increases indicated in loans to agricultural
processors, commodity dealers, metals and metal product
manufacturers, public utilities, and sporadic increases in
loans to sales finance companies.
Another interesting comparison is the currently di
verging pattern of trade loans in the District and the
United States. Fifth District loans to wholesale and
retail trade rose slightly from mid-July through the week
ended August 22, while the latest available national data
indicate a decline in trade loans.
Loans on defense contracts and defense supporting ac
tivities have been trending sharply upward in the United
States. In contrast, however, by late August there was
still little evidence of any real increase in defense loans
in the Fifth District. Nondefense loans, both in the
District and in the United States, declined from midMay through July, and began a belated seasonal rise in
August.
Fifth District bank debits (adjusted) were about 1%
higher in July than a month earlier, and had recovered
approximately half of the 2 % loss experienced from
May to June. The index was almost 15% higher than
in July 1950. Total deposits, which were being turned
over at an annual rate of 15.1 times in June, showed a
rate of turnover of 14.0 times. This contrasts with an
annual turnover of 12.8 times for July 1950.
D E B IT S TO I N D IV ID U A L AC C O U N T S
51 R E P O R T IN G M E M B E R B A N K S-—5TH D IS T R IC T
( 000 ) omitted)
(000 omitted)
July
1951
Dist. of Columbia
Washington
$ 1,036,625
Maryland
Baltimore
Cumberland
Frederick
Hagerstown
July
1950
$
855,469
7 Month
1951
$
7,422,435
7 Months
1950
$
5,797,705
1,226,023
29,499
21,106
31,528
1,103,714
23,744
17,737
28,817
8,636,093
178,412
145,093
225,630
7,127,030
154,256
122,275
189,873
North Carolina
Asheville
Charlotte
Durham
Greensboro
Kinston
Raleigh
Wilmington
Wilson
W inston-Salem
58,232
318,779
110,750
92,504
17,034
143,763
40,582
15,732
158,021
51,996
279,423
94,159
85,819
13,506
134,849
36,035
14,086
130,342
415,731
2,342,717
697,630
703,938
112,726
1,149,665
294,558
124,106
1,149,839
344,321
1,863,622
575,820
566,684
87,944
948,913
231,210
96,600
934,205
South Carolina
Charleston
Columbia
Greenville
Spartanburg
74,191
124,158
104,006
57,104
59,478
102,008
90,302
47,205
520,852
876,126
777,908
548,124
425,337
716,307
605,669
335,893
Virginia
Charlottesville
Danville
Lynchburg
Newport News
Norfolk
Portsmouth
Richmond
Roanoke
26,810
25,646
41,274
39,701
216,521
24,097
534,926
110,847
25,246
22,803
40,026
31,457
179,850
21,690
437,575
106,356
188,340
204,831
321,597
291,033
1,502,026
174,755
3,807,527
789,410
164,219
164,198
269,278
202,806
1,416,617
146,112
3,274,423
675,511
W est Virginia
Bluefield
Charleston
Clarksburg
Huntington
Parkersburg
43,506
148,196
33,403
62,591
30,710
39,929
134,942
31,099
62,560
27,951
326,505
1,058,367
240,807
462,671
213,686
278,170
873,866
399,201
179,074
District Totals
$ 4,997,865
$ 4,330,173
$ 35,813,138
$ 29,370,005
ITEMS
202,866
August 15,
1951
Change in Amount from
July 18,
August 16,
1951
1950
Total Loans ____________________ $1,150,064**
Business and Agricultural ____
545,956
Real Estate Loans __________
233,280
All Other Loans _____________
385,333
Total Security Holdings ______
1,721,200
U. S. Treasury Bills _________
221,319
U. S. Treasury Certificates
77,897
U. S. Treasury Notes _______
326,961
U . S. Treasury Bonds _______
924,208
Other Bonds, Stocks & Secur.
171,085
Cash Items in Process of Col__
258,457
182,591*
Due from Banks _____________
Currency and Coin ____________
68,291
Reserve with F. R. Banks _____
550,189
Other Assets __________________
53,877
Total Assets _________________ 3,948,669
— 9,304
— 5,121
—
741
— 3,382
+ 60,401
+44,952
+ 31,502
— 29,480
+ 10,640
+ 2,787
+16,450
— 1,381
— 2,490
+ 8,080
+
729
+ 72,485
+ 156,898
+ 103,955
—
221
+ 55,552
— 31,487
+ 135,135
— 4,322
+
5,269
— 177,312
+
9,743
+
820
+ 28,021
+
3,832
+ 101,403
—
6
+259,481
Total Demand Deposits ______
Deposits of Individuals ______
Deposits of U. S. Govt. _____
Deposits of State & Loc. Gov—
Deposits of Banks ___________
Certified & Officers’ Checks
Total Time Deposits ___________
Deposits of Individuals ______
Other Time Deposits _______
Liabilities for Borrowed Money
All Other Liabilities ___________
Capital Accounts _____________
Total Liabilities ____ ___ _____
+51,903
+40,565
+
642
— 6,334
+ 18,019
—
989
+ 4,909
+ 1,059
+ 3,850
+11,900
+ 1,976
+ 1,797
+72,485
+233,326
+ 114,161
+ 27,192
+ 37,190
+ 58,461
— 3,678
+ 10,444
— 9,658
+ 20,102
— 4,550
+
7,953
+ 12,308
+259,481
3,069,048
2,296,875
110,717
167,819
443,485*
50,152
622,837
556,354
66,483
12,400
30,646
249,738
3,984,669
* Net figures, reciprocal balances being eliminated.
** Less losses for bad debts.
i 10 V
S e p te m b e r 1951
S E L E C T E D F IF T H D IS T R IC T B U SIN E S S IN D E X E S
AVERAGE
D A IL Y
1935-39 = 100— S E A S O N A L L Y
July
1951
Automobile Registration1 ___________________________
Bank Debits __________________________________________
Bituminous Coal Production_________________________
Construction Contracts Awarded ____________________
Business Failures— No. .............. ........................................
Cigarette Production -------------------------------------------------Cotton Spindle Hours __________________________ _____
Department Store Sales ______________________________
Electric Power Production ___________________________
Employment— Manufacturing Industries1 ___________
Furniture Manufacturers: Shipments ______________
Life Insurance Sales _________________________________ ____
427
157
590
74
260
134
351
A D JU S TE D
June
1951
May
1951
July
1950
199
423
158
507
202
268
372
118
505
430
161
2773
45
253
162
331
330
150
326
289
86
242
160
331
341
152
249
289
314
122
236
133
391
304
139
302
317
% Change-—Latest Month
Year Ago
Prev. Mo.
—
+
—
+
—
+
+
+
—
+
—
1
1
1
+
—
16
14
7
16
6
3
1
24
9
+
+
+
—
28
15
33
17
39
+
+
—
10
1
10
+
+
—
—
14
9
15
1
1 Not seasonally adjusted.
Back figures available on request.
W H O LE SA LE TRADE
B U IL D IN G P E R M IT F IG U R E S
Sales in
July 1951
compared with
July
June
1950
1951
LINES
+12
Auto supplies (1 0 )_________________— 32
Electrical goods (5) _____________ _— 20
Hardware (13) ___________________ _— 21
Industrial supplies (7) __________ _+ 1 5
Drugs & sundries (12) ___________ _+ 1 0
Dry goods (16) ___________________ _— 10
Groceries (52) ____________________ _— 14
Paper & products (5) ____________ _+ 1 0
Tobacco & products (11) _________+ 3
Miscellaneous ( 8 8 ) _______ ____ _____— 22
District Totals (219) ___________ _— 14
— 9
+ 2
0
Stocks on
July 31, 1951
compared with
July 31 June 30
1950
1951
+ 16
+
122
+ 3
+23
— 4
+
+
+
+
+
— 4
— 13
— 4
+ 34
— 44
— 38
—10
—
2
—10
+ 3
+ 4
—
2
+
4
36
32
16
40
18
Percentage comparison of sales
in periods named with sales in
same periods in 1950
7 Mos. 1951
July 1951
INDIV ID U AL CITIES
Baltimore ( 6 )
Washington, D. C. (7)
Richmond, Va. ( 6 ) -----Charleston, W . Va. (3)
Charlotte, N . C. (3) -----
+
+
4
19
18
21
18
50
19
7 Month
1951
7 Months
1950
$13,431,175
24,945
380,325
92,130
238,770
$ 5,184,475
75,075
148,441
1,533,155
135,855
$ 54,879,575
459,230
1,348,585
1,083,280
1,186,869
$ 51,036,055
716,815
1,485,596
2,481,240
947,832
138,097
158,471
160,785
8,315,593
244,299
181,400
9,201,848
835,097
197,110
192,743
123,393
1,098,323
2,116,130
559,595
3,034,261
892,125
1,582,022
2,209,218
942,745
18,554,741
2,477,399
4,024,680
19,094,797
12,309,955
1,978,813
2,489,273
1,146,448
8,862,573
4,181,113
2,232,014
15,789,750
11,410,099
569,812
122,961
661,490
1,519,829
265,675
901,470
3,223,946
773,508
4,797,920
9,776,903
1,112,525
4,078,413
North Carolina
Asheville
Charlotte
Durham
Greensboro
High Point
Raleigh
Rocky Mount
Salisbury
Winston-Salem
152,740
2,050,681
408,358
888,821
347,510
271,420
97,127
48,700
349,654
777,151
3,020,470
480,720
947,760
349,242
523,800
564,884
1,089,784
4,006,515
13,934,245
3,270,421
5,250,540
2,128,904
6,925,814
1,600,287
813,231
11,868,266
3,075,820
18,258,894
10,169,988
7,588,874
2,407,094
9,165,585
3,080,502
2,162,560
7,653,133
South Carolina
Charleston
Columbia
Greenville
Spartanburg
95,657
699,279
627,250
1,142,300
109,036
773,805
1,039,725
465,617
1,001,381
9,216,296
7,156,629
1,847,240
1,826,763
6,672,083
4,780,674
2,381,663
Dist. of Columbia
Washington
4,604,152
District Totals
$46,540,847
5,278,777
$33,664,412
38,535,423
$236,521,662
43,090,441
$242,039,533
West Virginia
Charleston
Clarksburg
Huntington
R E T A IL F U R N IT U R E SALES
Maryland ( 6 ) ---------------------------------------------—
District of Columbia (7) ____________ ___ —
Virginia (18) _________________________ ___ —
West Virginia (10) __________________ ___ —
North Carolina (16) ________ _______ ____ —
South Carolina ( 6 ) __________________ ___ —
District (63) _______________ ___ _____
—
July
1950
Virginia
Danville
Lynchburg
Newport News
Norfolk
Petersburg
Portsmouth
Richmond
Roanoke
Number of reporting firms in parentheses.
Source: Department of Commerce.
STATES
July
1951
Maryland
Baltimore
Cumberland
Frederick
Hagerstown
Salisbury
— 4
— 19
— 26
+ 5
— 30
2 6 5 ,9 8 6
Number of reporting firms in parentheses.
ADDITION TO PAR LIST
D E P A R T M E N T ST O R E O P E R A T IO N S
(Figures show percentage change)
Rich.
— 8
Sales, July ’51 vs. July ’5 0 ----Sales, 7 Mos. ’51 vs. 7 Mos. ’5 0 - . + 8
+25
Stocks, July 31, ’51 vs. *50_____
Orders outstanding,
—41
July 31, ’51 vs. ’50 ...........
Current receivables July 1
24
collected in July ’51 ________
Instalment receivables July 1
14
collected in July ’51_________
Md.
Sales, July ’51 vs. July __’50
Sales, 7 Mos. ’51 vs. 7 Mos. ’50
+ 6
The Bank of W est Virginia, Charleston, W est
Other Dist.
Cities Total
— 14
— 16
+ 5
+ 4
+28
+21
Balt.
— 8
+ 6
+33
Wash.
— 19
+ 3
+30
— 35
—46
—28
—40
Office, has agreed to remit at par, effective at once,
46
40
35
37
for checks drawn on it when received from the Fed
15
18
19
16
eral Reserve Bank. The combined A .B .A . transit
D.C.
— 19
+ 3
Virginia, a newly chartered nonmember bank lo
cated in the territory served by the Richmond Head
Va. W .V a . N.C. S.C.
— 10 — 16 — 15 — 19
+ 7
+ 6
+ 1 + 6
i ii y
number-routing symbol of the bank is- 69-447.
515
F e d e ra l R eserve Bank o f Richmond
NATIONAL SUMMARY OF BUSINESS CONDITIONS
(Compiled by the Board of Governors of the Federal Reserve System)
Industrial output in July and August was somewhat below
earlier peak rates, reflecting in part the reduced rate of con
sumer buying earlier this year and consequent accumulation
of business inventories. After the early part of July, con
sumer buying apparently increased more than seasonally.
Defense expenditures continued to expand rapidly. Prices of
raw materials generally changed little after mid-July, follow
ing substantial declines from earlier peak levels. Business
loans at banks showed some expansion.
Industrial Production
The Board’s index of industrial production declined in July
to 213 per cent of the 1935-39 average, as compared with a
half-year plateau of around 222 and a year-ago level of 196
per cent. The decline from June was mainly due to plantwide employee vacations in a number of industries, but there
were also more than seasonal reductions in output of auto
mobiles, textiles, and certain other goods. Preliminary indi
cations are that output in August will be above July but
still somewhat below the first half level.
Passenger car assemblies in July were curtailed by about
one-fifth from the June rate, reflecting mainly the cuts or
dered by the National Production Authority for the third
quarter. Production declines were less marked for furniture
and other household durable goods. Output of producers
equipment and of primary metals was generally maintained
close to earlier peak levels. Production of lumber was re
duced. Among the nondurable goods pronounced decreases
occurred in the output of textile and leather products while
chemicals production continued to rise slightly.
Mining output decreased from the high June level largely
as a result of the coal miners’ vacation in early July. Crude
petroleum production continued in excess of 6 million bar
rels daily, as compared with about
million a year ago.
Contruction
Value of construction contract awards, according to the
F. W . Dodge Corporation, showed little change in July as
decreases in most types of privately financed awards were
offset by increases in public awards. Value of work put in
place, allowing for seasonal influences, continued to decline
from the peak reached earlier this year, reflecting chiefly
further declines in private residential building. Business con
struction activity continued to rise from already advanced
levels.
Employment
Employment in nonagricultural establishments in July,
after adjustment for seasonal influences, was maintained at
about record June levels. The average work-week in manu
facturing industries declined somewhat; hourly earnings con
tinued at a peak level of $1.60 per hour. There were about
1.9 million persons unemployed in July, the lowest number
for this month since 1945.
Agriculture
Crop prospects decreased slightly during July with over
all prospects at the beginning of August indicated to be 6
per cent larger than last year and 3 per cent below the 1948
record. The cotton harvest was forecast at 17.3 million bales
i
as compared with the small crop of 10 million bales last
year. Beef slaughter has increased from the reduced level
of June and early July.
Distribution
Seasonally adjusted sales at department stores in July and
the first three weeks of August were moderately above the
level of the preceding three months, reflecting increases in
the volume of apparel and household durable goods stimu
lated partly by extensive promotions. Consumer buying of
new passenger cars also expanded moderately after declin
ing in the early part of July. Value of stocks at department
stores changed little during July, according to preliminary
data, following some reduction in May and June. Stocks of
household durable goods continued at high levels.
Commodity Prices
The general level of wholesale commodity prices has con
tinued to decline since mid-July, but at a slower rate than in
the preceding month. Prices of most basic commodities have
shown little further decrease. Reductions in wholesale prices
of consumer goods have become more numerous. Some au
tomobile manufacturers, however, have requested higher
Federal ceiling prices. Price increases for machine tools will
be permitted under recent Federal action.
The consumers price index advanced slightly in July.
Since then retail prices of apparel, housefurnishings, and
some other goods have declined somewhat further, while
food prices have been maintained at the high level reached
in February and rents have increased somewhat further.
Bank Credit and the Money Supply
The total volume of bank credit outstanding has changed
only slightly in recent weeks. Business loans at banks in
leading cities, however, increased seasonally during late July
and early August. Loans to finance direct defense contracts
and defense supporting activities, principally loans to metal
manufacturers and public utilities, expanded further. Loans
to commodity dealers and food manufacturers also began to
increase after a steady decline during the spring and early
summer months.
Holdings of Government securities by commercial banks
and the Federal Reserve Banks have shown little change
since June. Increased weekly offerings of bills by the Treas
ury during July and the first half of August were largely
absorbed outside the banking system.
Deposits and currency held by businesses and individuals
increased somewhat in July, while Federal Government bal
ances declined. In the first half of August deposits at banks
in leading cities declined.
Security Markets
Prices of common stocks in the first week of August
reached the highest levels since May 1930 and declined
slightly thereafter. Prices of long-term U. S. Government
securities and high-grade corporate bonds have risen some
what since the end of June. Yields on Treasury bills ad
vanced somewhat in July and August, while other short
term rates declined.
12 y
@FedFRASER