MONTHLY REVIEW o f Financial and Business Conditions

Transcription

1 MONTHLY REVIEW o f Financial and Business Conditions Fifth Federal Reserve D is t r ic t Federal Reserve Bank, Richmond, Va. May 31, A L L branches o f trade and industry expanded further in April and early May in the Fifth Reserve district except bituminous coal mining and railroad car loadings, both exceptions resulting from the month-long shut-down in the Appalachian coal fields. This trouble was at least ttempararily settled at the end of April, and during May the miners were exceedingly active. New records were set in several production lines during April. The outstanding feature o f business in the district is the strong effect exerted by defense construction and industrial work. In the Hampton Roads area, great expansion in shipbuilding, with several hundred million dollars in naval and merchant ship contracts, has brought in thousands of new workers who have made necessary a number of housing projects and have swelled retail trade in Norfolk, Newport News and Portsmouth to record levels. Cantonments and new defense industries in other sections of the district, expansion of airplane plants at Baltimore, and record activity iti the cotton textile and rayon yarn industries have brought large volumes of business to many cities, towns and counties. There is hardly a section of the district which has not felt the impact of the defense work. With more work available than in many years, consumer purchasing power has naturally risen sharply, and practically all retail outlets are reporting large sales. A uto Summary of April Business Conditions mobile sales in April were the highest for any month on record in the Fifth district, sales of cars being further stimulated by a fear of rising prices and higher taxes on 1942 models. Department store sales, profiting by the later date of Easter this year and favorable weather, rose 35 per cent in April above April sales. Furniture sales in 39 stores were 24 per cent higher last month than a year ago, and 212 wholesale firms in various lines gained 3 per cent in sales. Construction continues in large volume in the Fifth district. Building permits issued in April in 29 cities were 27 per cent in valuation above April permits, and constructon contracts actually awarded for all types of work showed a rise of 51 per cent over contracts awarded in the corresponding month last year. Although parts of the Fifth district need rain very badly, prospects for agriculture both as to production and cash receipts are good at present. Grains came through the winter in fair condition, spring weather was favorable for setting fruit buds and for farm work, and prices for farm products appear to be definitely on the up grade. High government loans provided for on cotton and tobacco will help substantially the district s two leading cash crops, and prices on most other crops are rising as demand for them expands. It should be remembered, however, that it is too early in the season to do more than estimate roughly on probable crop yields. BUSINESS STATISTICS FIFTH FEDERAL RESERVE DISTRICT % Change March April Month Y ear. April Debits to individual accounts (25 cities)... $1,628,471, Sales, 79 department stores, 5th district... 16,75,814 Sales, 39 furniture stores, 5th district... 1,476,75 Sales, 212 wholesale firms, 5th district.... $ 14,91, Registrations, new autos, 5th district ,958 Number of business failures, 5th district Liabilities in failures, 5th district , Value of building permits, 29 cities ,15,339 Value of contracts awarded, 5th district... $ 47,873, Cotton consumption, 5th district (B ales) ,856 Cotton price, cents per lb., end of month Print cloths, 39 in., 8x8s, end of month Rayon yarn shipments, U. S. (Pounds)... 38,7, Rayon yarn stocks, U. S. (Pounds)... 7,3, Bituminous coal mined, U. S. (T ons)... 6,266, $1,674,663, $1,338,1, $ 13,995,665 $ 11,917,225 -f $ 1,119,994 $ 1,194, $ 14,62, $ 11,496, ,742 26, $ 547, $ 348, $ 12,128,896 $ 1,311, $ 57,17, $ 31,625, ,352 39, f ,4, 31,1, ,2, 11,7, ,25, 32,79, 87 81

2 2 MONTHLY REVIEW ITEMS Discounts held... Foreign loans on gold... Industrial advances... Government securities... Total earning assets... Circulaiton of Fed. Res. notes. Members reserve deposits Cash reserves... Reserve ratio... BANKING STATISTICS RESERVE BANK STATEMENT ITEMS $ , ,39 299, , , Apr. 15 $ , , ,853 4,82 65, SELECTED ITEMS 41 REPORTING MEMBER BANKS ITEMS May 14 Apr. 9 Loans to business and agriculture.... $148,9 $146,5 All other loans ,79 159,392 Investments in securities... 48, ,461 Reserve bal. with F. R. banks... 32,684 27,921 Cash in vaults... 26,893 27,444 Demand deposits , ,971 Time deposits... 27,496 27,54 Money borrowed... Total deposits MUTUAL SAVINGS BANK DEPOSITS 1 Baltimore Banks $ , , ,259 32,841 44, Apr. 3 Mar. 31 Apr. 3 $225,433,881 $225,9,656 $224,288,123 DEBITS TO INDIVIDUAL ACCOUNTS Apr. Mar. Apr. % of Change Month Year Dist. of Col. Washington.... $ 335,672 $ 342,396 $ 289, Maryland Balimore , , , Cumberland 9,486 8,694 8, Hagerstown... 11,245 11,74 9, North Carolina Asheville... 16,36 15,798 12, Charlotte... 92,486 99,621 64, Durham... 3,553 32,35 26, Greensboro... 25,9 24,986 21,352 + o + 17 Raleigh... 51,79 57,714 42, Wilmington... 16,667 15,455 11, Winston-Salem.. 42,136 48,231 37, South Carolina: Charleston... 26,721 26,77 19, Columbia... 38,53 41,821 27, Greenville... 25,327 24,834 19, Spartanburg 17,134 17,852 11, Virginia Danville... 8,827 8,938 8, Lynchburg... 16,513 16,759 15, Newport News.. 15,738 16,556 11, Norfolk... 71,25 72,632 53, Portsmouth... 6,679 6,494 4, Richmond ,29 184, , Roanoke... 34,121 33,511 28, West Virginia Charleston... 55,583 56,52 48, Huntington... 19,814 19,559 17, Parkersburg 11,545 1,866 1, District Totals.. $1,628,471 $1,674,663 $1,338, COM M ERCIAL FAILURES $122,2 147, , ,225 2,52 556,38 22,146 Dun & Bradstreet reports commercial failures in the Fifth district and the United States for several recent periods as follow s: Number of Failures Total Liabilities PERIODS District U. S. District U. S. April... 1,149 $ 281, $ 13,827, March , , 13,444, April , , 16,247, 4 Months, ,613 2,1, 52,642, 4 Months, ,767 2,11, 56,679, EM PLOYM ENT There was a decline in total employment in the Fifth district in April, due chiefly to idleness of bituminous coal miners in West Virginia, Virginia and Maryland. Further, construction work on certain army cantonments in the district was virtually completed last month, and several thousand workers were laid off. However, coal miners returned to work on April 3 and May 1, and many of the cantonment construction workers have caught on in private construction, industrial work or in agriculture. Industrial work continued to expand, and skilled men were added to working forces as rapidly as they could be found. Some scarcity of farm hands is reported, and there are insufficient trained mechanics to meet the needs of shipyards, airplane plants, and other industries which have substantially expanded operations. The following figures, compiled for the most part by the Bureau of Labor Statistics, reflect the trends of employment and payrolls in the Fifth district from March to A pril: STATES Maryland... Dist. of Columbia.. Virginia... West Virginia North Carolina South Carolina District Average AUTOM OBILE REGISTRATIONS Percentage change from Mar. to Apr. In number In amount on payroll of payroll Sales of new passenger automobiles set a new monthly record in April in the Fifth district, according to figures gathered by R. L. Polk & Company, of Detroit. Individual state records were reported for Maryland, District of Columbia, North Carolina and South Carolina. V irginia showed the only decline in registrations from April, but this was due chiefly to the largest April sales on record in Virginia last year. Increased consumer purchasing power accounts for the larger part of the rise in new car registrations this year, but in addition sales are being stimulated by expectations of higher prices and sharply increased taxes on 1942 models. Most dealers believe that many sales are being borrowed from next year s business. Used cars taken in exchange on new car sales have accumulated on all dealers lots, but a substantial business is being done in the used car field and present stocks are not burdensome. REGISTRATION OF NEW PASSENGER CARS NUMBER STATES Apr. Apr. % 4 Months 4 Months % Change Change Maryland... 7,485 5, ,96 16, Dist. of Col.... 4,12 2, ,413 9, ,392 7, ,86 18, West Virginia.. 4,354 3, ,628 9, No. Carolina... 8,448 5, ,34 18, So. Carolina... 4,177 2, ,534 1, ,958 26, ,61 81,

3 MONTHLY REVIEW 3 CONSTRUCTION Construction work provided for in permits issued in April in 29 Fifth district cities totaled $13,15,339, an increase of 8 per cent above $12,128,896 for permits issued in March this year and 27 per cent above $1,311,- 986 in April last year. Total permits in the 29 cities in the first 4 months amounted to $45,752,85 this year and $34,215,345 last year. Baltimore led in April with permits totaling $4,934,556, followed by Washington with $4,349,24, Charlotte with $433,15, Richmond with $385,296, and Charleston, W. Va., with $352,9. W ashington permits do not include Federal Government work. Contracts actually awarded for all types of construction in the Fifth district in April totaling $47,873, were below March contracts amounting to $57,17,, but were 51 per cent above $31,625, for April. The bulk of construction at present is connected with defense work, and a decrease in that type of work accounted for the decline from the March figure. Residential work accounted for 45 per cent of the April total, including a number of housing projects to provide additional quarters near defense industries. Figures by states for March, which were not available when the April 3 Review went to press, were reported by F. W. Dodge Corporation as follows: CONSTRUCTION CONTRACT AW ARDS STATES Mar. Mar. % Change Maryland... $22,244, $11,95, + 87 Digt. of Col ,481, 4,7, +162 Virginia... 7,621, 7,57, + 8 West Virginia.... 2,584, 2,2, + 28 North Carolina... 7,427, 4,216, + 76 South Carolina ,66, 2,337, $57,17, $31,542, + 81 COAL PRODUCTION The output of bituminous coal mines in the Fifth district was nominal in April, all mines being officially closed by a labor dispute until the last day of the month. Since May 1, however, production has been at a very high rate, and some progress has been made toward rebuilding stocks which were depleted in April. Total production in the United States this calendar year to May 1 of 156,967, tons is 5 per cent less than output of 165,65, tons to the same date last year, the decrease being entirely due to the April shut-down. Although shipments of coal drawn from reserve stocks through Hampton Roads ports held up moderately in April, between January 1 and May 1 loadings totaled only 7,617,291 tons against 9,84,396 tons in the corresponding period last year, a decline of 16 per cent this year. Shipments through Hampton Roads ports, Wjhile at a relatively high level, have not kept pace with production of coal this year. In the Fifth district, coal mined in April, March and April, was as follow s: SOFT COAL PRODUCTION IN TONS REGION Apr. Mar. Apr. West Virginia... 12,741, 9,72, Virginia... 1,566, 1,156, Maryland , 137, 5th District... 14,479, 11,13, United States... 6,266, 48,25, 32,79, % in District , COTTON TEXTILES Cotton cloth and yarn mills operated at the highest rate on record in April, but did not materially reduce the large backlog of forward orders on hand. Some mills are sold up to December, especially those producing ducks, twills, drills, and other fabrics entering directly into the defense program. The market for textiles was less active than in March, but was sufficiently strong to sustain price gains made earlier. Cotton consumption in both the Fifth district and the United States set new monthly records in April, and activity continued at the same level in the first half of May. Consumption of cotton by states in the Fifth district in April, March and April, is shown below: COTTON CONSUMPTION FIFTH DISTRICT In bales. MONTHS No. Carolina So. Carolina Virginia District April ,32 171,865 18, ,856 March... 21, ,442 16, ,352 April , ,493 14,383 39,622 4 Months, , ,549 68,138 1,546,686 4 Months, ,19 531,817 54,396 1,281,322 RAYO N Y A R N PRODUCTION Shipments of rayon filament yarn to domestic consumers, according to Rayon Organon, totaled 38,7, pounds in April, a record for a single month, and 24 per cent above shipments of 31,1, pounds in April. Last month s deliveries exceeded production by nearly 3,, pounds, and reserve stocks of yarn consequently dropped from 1,2, pounds on March 31 to 7,3, pounds on April 3. Total rayon yarn consumption in the first 4 months of amounted to 14,7, pounds, an increase of 15 per cent over 122,5, pounds consumed in the corresponding period last year. The National Rayon Weavers Association and the National Federation of Textiles report the inventory of rayon filament yarn in the hands of broad weavers on April 3 totaled 27,3,- pounds as compared with 25,4, pounds on March 31 this year and 21,2, pounds on April 3 last year. Based on the high rate of rayon consumption by weavers and the tight rayon yarn situation, this four weeks supply of yarn is considered moderate. COTTON STATISTICS Spot cotton prices on 1 Southern markets declined slightly during most of April to 1.99 cents per pound on the 25th, but then turned upward and advanced to cents by May 16, making a gain of $8.4 per bale in three weeks. Several influences played their parts in stimulating the rise, among them being the bill passed by Congress making loans of 85 per cent of parity mandatory, the rising tendency in the general level of commodity prices, and the continued strong demand for cotton textile products. The May 16 price was the highest average for middling grade cotton on the 1 Southern markets since July 1937, and compares with an average of 9.58 cents on May 17,. Spot cotton is now approximately $15 a bale higher than last fall when the crop was picked.

4 4 MONTHLY REVIEW Fifth district states: COTTON CONSUMPTION AND ON HAND BALES Cotton consumed. Cotton growing states: Cotton consumed... Cotton held April 3 in Consuming establishments Storage & compresses United States: Apr. Apr. Cotton consumed... Cotton held April 3 in Consuming establishments 92,142 1,933,57 623,98 1,47,527 Storage & compresses... 12,374,839 1,732,29 Aug. 1 to Apr. 3 This Year Last Year 39,622 3,197,43 2,847, , ,588 5,969,811 5,68,81 1,556,431 1,199,884 12,,443 1,663,6 Exports of cotton, U. S... 74,9 344,69 Spindles active, U. S... 22,787,396 22,288,832 TOBACCO M ANUFACTURING 6,995,238 5,953,999 94,1 5,694,962 Production of tobacco products continued to increase in April over March, and also exceeded April output in every branch of the industry. Percentage increases for April over production in March and April, respectively, were 2 and 7 for cigarettes, 14 and 15 for cigars, 3 and 2 for smoking and chewing tobacco, and 8 and 3 for snuff. Production figures released by the Bureau o f Internal Revenue are as follow s: Apr. Mar. Apr. Smoking & chewing tobacco, pounds... 25,619,96 24,993,372 25,82,562 Cigarettes, number ,853',661,71 15,528,629,2 14,819,57,68 Cigars, number ,584,765 43,326,2 425,14,424 Snuff, pounds ,57,55 3,26,69 3,398,17 Richmond (5)... Baltimore (1).... Washington (7) Other Cities (12) (79)* Same stores by states, including stores reporting sales only: Maryland (13)... Virginia (16)... West Virginia (15). North Carolina (16) South Carolina (12). RETAIL AN D W HOLESALE TRADE DEPARTMENT STORE TRADE Percentage increase or decrease in sales, stocks, outstanding orders and outstanding receivables in April in comparison with April figures: Sales ( + 16) ( + 2) (+21) ( + 14) (+2) ( + 19) (+22) ( + 15) ( + 16) ( + 19) Stocks Orders Receivables * Includes stores reporting sales only. Note: Second figure in parentheses under Sales compares combined sales in 4 months of with sales in first 4 months of. STATES Maryland, 8 stores... Dist. of Col., 7 stores Virginia, 13 stores... North Carolina, 5 stores. South Carolina, 6 stores District, 39 stores... Individual Cities: Baltimore, 8 stores... Richmond, 5 stores... Washington, 7 stores RETAIL FURNITURE SALES % Change in Sales, April and 4 Months Compared with Compared with Apr. 4 Months WHOLESALE TRADE, 212 FIRMS Net Sales Stocks Ratio Apr. April Apr. 3, collections compared with compared with to accounts Apr. Mar. Apr. 3 Mar. 31 outstanding LINES Apr. 1 Auto supplies (1) Drugs & sundries (11) _ 3 85 Dry Goods (8) \ Electrical goods (21) Groceries (61) Hardware (14) Indus, supplies (1) Paper & products (9) Tobacco & products (11) Miscellaneous (53) District Average (212) Source: Bureau of the Census. (Compiled May 21, )

5 MONTHLY REVIEW, May 31, FEDERAL RESERVE BANK OF RICHMOND SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) PRODUCTION INDUSTRIAL PRODUCTION Federal Reserve index of physical volume of production, adjusted for seasonal variation, average=1. Subgroups shown are ex pressed in terms of points in the total index. By months, January 1935 to April. WHOLESALE PRICES OF BASIC COMMODITIES Bureau of Labor Statistics indexes based on 12 foodstuffs and 16 industrial materials, August 1939=1. Thursday figures, January 3, 1935 to May 8,. In A p ril the B oard s seasonally ad ju sted in dex o f industrial production declined to 139 per cen t o f the average, a drop o f 4 points fr o m M arch. The decline reflected chiefly a sharp redu ction in ou tpu t o f bitum inous coal, as m ost m ines w ere closed during the en tire m onth. The m ines w ere reopened on A p ril 3 and in the first h a lf o f M ay coal output increased rapidly. A u tom obile production also declined in A pril, ow in g to stoppage o f w ork at plants o f the F ord M otor Com pany during an industrial dispute. This was settled about the middle o f the m onth and dom estic ou tpu t has since advanced to a high m on th ly rate o f ov er 5, cars and trucks. A n n ou n cem en t by the O ffice o f P roduction M anagem ent that ou tpu t in the tw elve m onths ending July 31 w ould approxim ate 5,29, units indicates that a rate close to that n ow prevailin g should be m aintained through July, although there is usually a considerable decline in this period. Steel production w as curtailed som ewhat in the latter h a lf o f A p ril by shortages o f coal and coke and output declined fr o m a level o f 1 p er cen t o f capacity to 94 per cent at the m onth end. Subsequently ou tpu t increased, reachin g 99 per cent b y the m iddle o f M ay. In m ost other lines activity continued to increase during A p ril and the first h a lf o f M ay. M achinery p rodu ction rose fu rth er and activity in the air c ra ft and shipbuilding industries continues to expan d rapidly. Consum ption o f n on ferrou s metals also advanced, and, as in M arch, dom estic sou rces o f copper w ere supplem ented b y large supplies fr o m Latin A m erica. T extile pro du ction rose fu rth er fr o m the high rate prevailin g in M arch. C onsum ption o f raw cotton in A p ril am ounted to 92, bales, a new record level, and rayon deliveries also rose to a neiw peak. A t w ool tex tile m ills a ctivity w as m ain tained near the high M arch rate. C ontinued advances w ere rep orted in the chem ical, paper, and fo o d industries. A n th racite production declined considerably in A pril, ow in g to a delay by dealers in placing usual spring orders, bu t increased in the first h a lf o f M ay. Output o f crude petroleum show ed little change fr o m the M arch rate, fo llo w in g som e increase fro m the redu ced level o f the w in ter months. Iron ore shipments in A p ril am ounted to about 7,, tons, an excep tion ally la rg e am ount f o r this tim e o f year, and m ine output o f n on ferrou s m etals continu ed at n ear capacity rates. V alue o f construction con tra ct aw ards in A p ril declined som ew hat fro m the high M arch total, ow in g principally to a sm aller volum e o f d efen se plant contracts, accordin g to F. W. D odge C orporation reports. There w as an increase in contracts f o r publicly financed d efen se housing, and aw ards fo r private resi dential bu ildin g rose b y a b ou t the usual seasonal am ount. DISTRIBUTION MEMBER BANKS IN 11 LEADING CITIES Sales o f general m erchandise at departm ent and variety stores showed about the usual seasonal rise from M arch to A pril, m aking allow ance f o r the changing date o f Easter. Retail sales o f new autom obiles, w hich had am ounted to 526, cars and trucks in M arch, rose fu rth er in A p ril and sales o f used cars w ere at peak levels. F reigh t-car loadings declined sharply in A pril, reflectin g a reduction in shipm ents o f coal and coke, bu t increased in the first h a lf o f M ay w hen coal mines w ere reopened. B y the middle o f the m onth total loadin gs had risen to a w eek ly rate on e-fourth higher than in the correspon din g period last year and abou t the same as the seasonal peak reached in the autum n o f. COMMODITY PRICES Wednesday figures, January 2, 1935 to May 7,. Commercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937 so-called Other loans as then reported. P rices o f m ost basic com m odities, both dom estic and im ported, advanced sharply fu rth er in the first h alf o f M ay fo llo w in g a short period o f little change during the latter part o f A pril. P rice increases w ere m ost pron ou n ced fo r agricultural com m odities reflectin g in part the p rospect o f legislation raising Federal loan rates fo r basic farm crops. P rices o f a num ber o f sem im anufac tu red industrial products, in cluding petroleum products, coke, leather, textile yarns and fab rics, and bu ildin g m aterials, also advanced. M etal prices, n ow fo r the m ost part su bject to F ederal con trol, rem ained at the maxim um levels established earlier. BANK CREDIT EXCESS RESERVES OF MEMBER L»RS BANKS SILLIN8 Of DOLLARS Bank loans and investm ents have shown a m arked rise since last summ er, the increase at reportin g banks in 11 leading cities am ounting to $4,,,. In A p ril and early M ay holdings o f investm ents by these banks increased considerably, m ostly at N ew Y ork C ity banks, reflectin g substantial purchases o f n ew ly issued R econ stru ction F in an ce C orporation notes. Increases in com m ercial loans in this period w ere som ew hat sm aller than during the preced in g tw o months. Excess reserves o f m em ber bank w ere $5,7,, on M ay 14. Since January th ey have declined b y a b ou t $1,1,,, ow in g la rgely to increases in Treasury deposits w ith the R eserve Banks and in cu rren cy in circulation. The decrease has occu rred en tirely at N ew Y ork C ity banks. UNITED STATES GOVERNMENT SECURITY PRICES Wednesday figures partly estimated, January 2, 1935, to May 7,. Digitized for FRASER P rices o f United States G overnm ent securities, w hich had risen sharply from A p ril 9 to A pril 21, subsequently declined irregu larly through M ay 15. On that date the bonds w ere % o f a poin t low er than on A p ril 21 and about 1*4 points below the all-tim e peak reached on D ecem ber 1,. The yield on this issue is curren tly about 2.9 per cent, com pared w ith 2.3 per cent on D ecem ber 1.