MONTHLY REVIEW CREDIT, BUSINESS AND AGRICULTURAL CONDITIONS WILLIAM W. HOXTON, Chairm an and F e d e ra l R eserv e A gent FEDERAL RESERVE BANK OF RICHMOND RICHMOND, VIRGINIA MAY 31, 1933 USINESS in the Fifth Federal additional running time and the em­ Reserve district in April and the FIFTH FEDERAL RESERVE DISTRICT ployment of more workers. A number first half of May showed seasonal im­ of textile mills have recently raised provement in most lines, and there their wage scales. South Carolina led were some signs of revival more all states for the second month in ac­ marked than seasonal trends alone ac­ tive spindle hours of operation per count for. In banking, rediscounts spindle in place during April. Cotton for member banks at the Federal Re­ prices rose further in late April and serve Bank of Richmond declined mod­ the first half of May, and reached the erately last month, at a time when highest point since the middle of 1931. member bank needs for loans to Tobacco factories produced more ciga­ finance crop planting might have been rettes, smoking and chewing tobacco, expected to cause an increase in re­ and snuff in April this year than in discounts. Federal reserve notes in April 1932. Retail trade in depart­ actual circulation decreased somewhat ment stores during April showed some­ more than seasonally. Cash reserves what more than the seasonal increase at the reserve bank rose between April over March trade, and wholesale trade 15 and May 15. Reporting member banks in leading was also better than in other recent months, but col­ cities decreased their loans last month, but increased lections in both retail and wholesale lines were mate­ their investments in securities by about the same rially slower than collections in April last year, prob­ amount. Bank deposits rose, demand deposits at the ably reflecting the unfavorable influence of frozen de­ middle of May exceeding those of mid-May a year ago. posits^ in unlicensed or closed banks this year. Con­ The reporting banks reduced their borrowing at the struction continues in very small volume, but permits reserve bank to a very low point. Debits to individual issued in leading Fifth district cities in April totaled accounts in four weeks ended May 10 showed a sea­ more than for any other month since last fall. Agri­ sonal decline in comparison with debits in the pre­ cultural prospects in the Fifth district as a whole are ceding four weeks this year, and were also materially better than they were at this time last year. Crops are lower than debits in four weeks ended May 11, 1932. coming up to good stands, there is plenty of mois­ The commercial failure record in the Fifth district in ture in the soil in most of the district, and more fer­ April was relatively good, the number of insolvencies tilizer has been used this year than in 1932, all of being the lowest for any April since 1923 and the these factors indicating favorable prospects insofar as liabilities involved being the smallest in amount for physical yield is concerned. any April since 1920. Employment conditions regis­ tered improvement during April and early May for the Reserve Bank Statement first time since the depression began, and there were even a number of wage advances in certain lines of Most of the changes in the statement of the Federal industry. Coal production in April declined seasonally Reserve Bank of Richmond during the past month in comparison with March, but on a daily basis equaled were seasonal, and were in the nature of a return to April 1932 output, and stocks of coal in bins of com­ a more nearly normal condition after the recent bank­ mercial consumers and retail yards are materially ing holiday. Rediscounts for member banks declined smaller than stock on hand a year ago. The textile in­ by $3,487,000 between April 15 and May 15, both this dustry in the Fifth district made distinct progress last year, and the portfolio of open market paper decreased month, increased orders at better prices stimulating by $4,264,000. There was no change in the holdings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 2 MONTHLY REVIEW 3 000 omitted son of the latest available figures with those a month and a year earlier. Formerly we used approximately ITEMS May 15 April 15 May 15 1933 1932 fifty banks in this statement of condition, but some of 1933 those used did not reopen after the banking holiday, and one city was dropped entirely because the elim­ Rediscounts held ...................... $ 18,459 $ 21,946 $ 23,793 ination of some banks probably caused sufficient changes Open market paper.................... 996 5,260 2,054 in others to destroy the comparableness of all bank fig­ Government securities ............. 48,149 48,149 27,975 ures in that city. Total earning assets............... 67,604 75,355 53,822 Circulation of Fed. Res. notes.. 169,581 177,182 92,579 Between April 12 and May 10, 1933, total loans in Members' reserve deposits........ 62,628 56,429 48,434 the reporting thirty banks declined by $3,225,000, and Cash reserves........................... 189,660 175,626 98,534 on the latter date were $31,533,000 lower than out­ Reserve ratio ........................... 76.11 70.63 67.15 standing loans on May 11,1932. Investments in stocks of Government securities. Total earning assets and bonds rose by $5,292,000 last month, and $25,- dropped by $7,751,000 during the month. The circu­ 205,000 last year, nearly all of the increase last month lation of Federal reserve notes declined by $7,601,000 being in Government securities. The reporting banks between April 15 and May 15, a seasonal decrease made increased their reserve balance at the Federal Reserve larger than usual by a partial return of notes put into Bank of Richmond by $1,558,000 between April 12 circulation incident to the reopening of the banks in and May 10, and on the last named date their reserve March. Member bank reserve deposits at the Federal balance was higher by $6,155,000 than on the corre­ Reserve Bank of Richmond rose by $6,199,000 last sponding date in 1932. Cash in vaults declined by month. The several changes in the statement raised $993,000 last month, relatively little cash being needed the cash reserves of the Bank by $14,034,000 between at this season of the year, but cash on hand on May the middle of April and the middle of May, and also 10 exceeded that on hand May 11, 1932, by $1,280,000. raised the ratio of cash reserves to note and deposit Demand deposits in the thirty banks rose by $6,322,000 liabilities combined by 5.48 points. last month, and on May 10 exceeded demand deposits In comparison with items on the reserve bank’s state­ a year earlier by $12,289,000. Time deposits also ment on May 15, 1932, the items on May 15 this year showed some rise last month, increasing by $876,000, all show increases except rediscounts held and open but at the end of the period were $1,334,000 less than market paper owned. Rediscounts for member banks time deposits on May 11, 1932. Borrowing by the decreased $5,334,000 during the year, and open market thirty reporting banks at the reserve bank was very paper holdings dropped $1,058,000. On the other hand, small on May 10, totaling only $413,000, a decrease of there was an increase of $20,174,000 in Government $397,000 during the past month and a drop of $1,512,- security holdings, which caused a net rise of $13,782,000 000 in the past year. in total earning assets during the year. Federal re­ serve notes in actual circulation rose by $77,002,000 Debits to Individual Accounts between May 15, 1932, and May 15, 1933, the very Total debits, in thousands, unusual rise in note circulation being due in large part CITIES 4 weeks ended to hoarding of currency. Member bank reserve de­ May 10, April 12, May 11, posits on May 15 this year were higher by $14,194,000 1933 1933 1932 than reserve deposits a year earlier. Cash reserves of the Federal Reserve Bank of Richmond rose by $91,- Asheville, N. C.......... $ 6,491 $ 7,294 $ 7,977 126,000 during the past year, and the ratio of reserves Baltimore, Md........... 190,131 221,467 265,949 Charleston, S. C......... 8,611 7,122 10,568 to note and deposit liabilities combined rose 8.96 points, Charleston, W. Va.... 24,864 28,558 26,413 in spite of the very large increase in note circulation. Charlotte, N. C......... 30,659 31,893 32,212 Columbia, S. C.......... 5,114* 13,833* Member Bank Statement Cumberland, Md........ 4,457 4,807 5,233 000 omitted Danville, Va.............. 3,837 3,976 4,305 Durham, N. C........... 17,084 15,054 13,482 ITEMS May 10 April 12 May 11 Greensboro, N. C.----- 2,553 2,510 9,303 1933 1933 1932 Greenville, S. C......... 8,956 6,522 9,111 Hagerstown, Md....... 3,721 3,303 5,713 Loans on stocks and bonds (in­ Huntington, W. Va.... 8,334 9,640 10,936 cluding Governments) .......... $ 59,846 $ 61,022 $ 71,565 Lynchburg, Va........... 10,725 11,087 12,036 All other loans------------------- 111,632 113,681 131,446 Newport News, Va,.... 4,781 6,500 6,781 Total loans and discounts.....