Economic Review
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FEDERAL RESERVE BANK OF RICHMOND General Business and Agricultural Conditions in the Fifth Federal Reserve District By CALDW ELL HARDY, Chairman and Federal Reserve Agent RICHMOND, VIRGINIA, DECEMBER 31, 1921 November witnessed a met with the usual seasonal continued reaction against CONTENTS slump, though this phase of th e revival of business Introduction business is holding up better which appeared to have set Condition of Member Banks than most lines. in at the end of September. Reserve Bank Operations The month of November Cotton declined further, tfte Debits to Individual Account and early December wit price reaching 16j4 cents Monthly Clearings nessed a continuation of per pound on December 1, on Business Failures satisfactory prices for to the Carolina markets, result Labor bacco in North Carolina and ing in limiting sales. Li Textiles Virginia, and large sales quidation of debts in the Clothing and Shoes were made during that period. cotton section, which had Coal Due to satisfactory returns begun in September, was Tobacco from these tobacco sales, checked late in October and Cotton although the sales of cotton November, though it con Building Operations an d other agricultural tinued in smaller volume. Retail Trade products were limited, the Owing to the uncertan cot Wholesale Trade credit situation shows im ton market, orders for tex National Summary provement in seasonal li tiles came in less freely. Cotton Prices and Credit quidation. A considerable The labor situation has im number of member banks proved but little since our paid off their outside loans October Review was issued. Coal production con and reduced their borrowings at the Federal Re tinues at a very low rate, little if any better pro serve Bank. In turn, the Federal Reserve Bank duction being reported than for the dull months of Richmond repaid, on December 5, the remainder of summer. Retail trade has not held up to the of its discounts with other Federal Reserve Banks, seasonal volume , and shows an actual decrease in and in view of the improvement in its reserve po sition, on December 10 reduced its discount rate to comparison with that of October. Wholesale member banks from Sy2 per cent, to 5 per cent, for trade is sluggish, and appears to be waiting until all classes and maturities of paper. This was the first of the year inventories are taken before second reduction in five weeks, the rate having placing further orders. Building construction been lowered early in November from 6 per cent. CONDITION OF SEVENTY-EIGHT REPORTING MEMBER BANKS IN SELECTED CITIES. ITEMS December 7, 1921 November 2. 1921 December 3, 1920 1. Total Loans and Discounts (exclusive of rediscounts) _________________ $ 402,788,000 $ 406,348,000 $ 484,328,000* 2. Total Investments in Bonds and Se curities ______________________ __ 117.553.000 120.922.000 76,874,000** 3. Total Loans and Investments_______ 520.341.000 527.270.000 561.202.000 4. Reserve Balance with Federal Reserve Bank ___________________________ 31.402.000 29.163.000 35.099.000 5. Cash in Vaults______________________ 14.367.000 13.430.000 17.970.000 6. Demand Deposits______________ ___ - 294.818.000 290.629.000 332.729.000 7. Time Deposits _____________________ 120.838.000 123.563.000 108.317.000 8. Discounts with Federal Reserve Bank 52.010.000 57.042.000 74.743.000 In the preceding table, we give figures showing the principal items of condition for seventy- eight identical reporting member banks, located in thirteen of the leading cities of the Fifth District, at the close of business December 7, 1921, November 2, 1921, and December 3, 1920, thus affording Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis comparisons of the current month with the preceding* month this year and the corresponding month last year. All items are comparable except items 1 and 2, which were differently calculated in 1920 and 1921. Comparing the figures as at the close of business December 7, 1921 with those of December 3, 1920, all items show decreases within the year, excepting number 7, Time Deposits. The decreases shown in all items except number seven are as follows: Total Loans and Investments decreased from $561,202,000 as of December 3, 1920 to $520,341,000 as of December 7, 1921, a decline of 7.3%; Reserve Balance with the Federal Reserve Bank decreased from $35,099,000 to $31,402,000, a decline of 10.5%; Cash in Vaults decreased from $17,970,000 to $14,367,000 a decline of 20%; Demand Deposits decreased from $332,729,000 to $294,818,000, a decline of 11.4%; and Rediscounts with the Federal Re serve Bank decreased from $74,743,000 to $52,010,000, a decline of 30.4%. Comparing the figures as of December 7, 1921 with those reported for November 2, this year, in creases are noted in Reserve Balances with Federal Reserve Bank, Cash in Vaults, and Demand De posits; decreases are shown in Total Loans and Discounts, Investments in Bonds and Securities, Time Deposits, and Rediscounts with Federal Reserve Bank. The increase in Demand Deposits and the decrease in Loans and Discounts and in Rediscounts with the Federal Reserve Bank indicate an im provement in the credit situation. This is also reflected in the weekly published statements of the Reserve Bank. FEDERAL RESERVE BANK OPERATIONS Between November 2, 1921 and December 7, 1921, Cash Reserves in the Federal Reserve Bank increased from $69,373,368.62 to $72,390,438.67, Total Bills on Hand decreased from $103,716,454.97 to $99,245,288.18; Federal Reserve Notes in Actual Circulation decreased from $111,417,655 to $110,892,215; and Total Member Bank Reserves increased from $54,483,097.91 to $55,544,263.82. The increases and decreases enumerated all tend to show improvement in credit condition in the District. DEBITS TO INDIVIDUAL ACCOUNT IN CLEARING HOUSE CITIES. CITIES For the Weeks Ending December 7, 1921 November 2, 1921 December 8, 1920 Baltimore, Md. _______________________ $ 112,746,000 $ 115.282,000 $ 110,435,000 Charleston, S. C---------------------------------- 5.455.000 5.899.000 5.203.000 Charlotte, N. C------------------------------------ 6.365.000 6.565.000 6.886.000 Columbia, S. C. ______________________ 5.526.000 5.357.000 5.696.000 Greenville, S. C------------------------------------ 4,181,000* 3,700,000* Huntington, W . Va------------------------------ 5.103.000 6.873.000 ~6~282,000 Norfolk, V a ._________________________ _ 18.978.000 14.827.000 23.017.000 Raleigh, N. C__________________________ 3.400.000 3,700,000 4.900.000 Richmond, Va. ----------------------------------- 37.319.000 30.033.000 32.890.000 Washington, D. C--------------------------------- 42.151.000 37.904.000 37.615.000 Wilmington, N. C_____________________ 4,939,000* 5,482,000* Totals for 9 cities________________ $ 237,043,000 $ 226,440,000 $ 232,924,000 Totals for 11 cities_______________ $ 246,163,000 235,622,000 j -------------- * Not included in Totals for 9 cities. Debits to Individual Account in nine clearing house centers for the week ending December 7, 1921 totaled $237,043,000, compared with a total of $232,924,000 reported from the same cities for the week ending December 8, 1920, an increase for the 1921 week of 1.8 per cent. The average increase reported by 153 clearing house centers for the United States between the same weeks was 1.3%. Commenting upon the combined reports from the 153 centers, the Federal Reserve Board says, “ For the first time since January 8 the volume of business for the week under review (the week ending December 7, 1921) was larger than for the corresponding week in 1920, the excess being about $109, 000,000. Larger figures for the most recent week of the current year are shown for the centers on the Atlantic and on the Pacific coasts, while the cities of the interior report reduced totals.” As compared with the week ending November 2, 1921, the week ending December 7, 1921 shows an increase of 4.7%, but the increase is confined to four cities, Columbia, S. C., Norfolk, Va., Rich mond, Va., and Washington, D. C.. The other five of the nine cities show smaller figures than for the corresponding week a month ago. Of the two additional cities shown in the table given here with, Greenville, S, C, shows an increase during the month but Wilmington, N. C., reports a decrease. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis MONTHLY CLEARINGS. Per Cent of For Month of November Increase or CITIES Increase or No. No. Decrease 1921 1920 Decrease 1. Baltimore. Md. _______________ $ 294,809,371 $ 397,840,545 $ 103,031,174— 25.9—% 1 2. Charleston, S. C. _____________ 8,900,286 13,827,729 4,927,443— 35.6— 2 3. Charleston, W . V a .____________ 14,450,785* 3 4. Charlotte, N. C. ______________ 9,798,226 11,259,757 1*467,531— 13.0- 4 5. Columbia, S. C. _______________ 8,662,534 11,475,320 2,812,786— 24.5— 5 6. Frederick, Md. _______________ 1,670,799 2,778,181 1,107,382— 39.9— 6 7. Greensboro, N C ._____________ 5,611,125 5,460,634 150,491' 2.8 7 8. Greenville, S. C. ______________ 6,655,461 8,085,220 1,429,759— 17.7— 8 9. Hagerstown, M d .______________ 2,373,252 2,877,669 504,417— 17.5— 9 10. Huntington, W . Va. __________ 6,843,600 9,416,585 2,572,985— 27.3— 10 11. Newport News, Va.