FEDERAL RESERVE BANK OF RICHMOND General Business and Agricultural Conditions in the Fifth Federal Reserve District By CALDWELL HARDY, Chairman and Federal Reserve Agent RICHMOND, VIRGINIA, OCTOBER 31, 1921 Signs that seem to point Textile manufacturers con­ to a healthy business revival CONTENTS tinue to receive increasing are slowly but steadily be­ orders, and are making some coming more apparent in the profits out of the new busi­ Fifth Reserve District, a de­ Introduction ness. Prospects in the cloth­ velopment that has its origin Condition of Member Banks ing trade are fair, and the with the improved demand Debits to Individual Account shoe business is good. Hos­ for cotton, cotton goods, and Monthly Clearings iery and knit goods manu­ profitable prices for tobacco. Business Failures facturers are operating their The cotton crop report, is­ Textiles mills full time, with suffi­ sued by the Department of Clothing cient orders ahead to take Agriculture, as of Septem­ Foods their output for several ber 25, was more optimistic Coal months. Food dealers re­ than had been expected, but Tobacco port good business in all the prices have not declined Cotton lines during September, with seriously, and are hovering Building Construction an increasing tendency for persistently near the twenty Retail Trade jobbers to buy for future cent mark. The effects of Wholesale Trade requirements. The coal out­ the present prices for cot­ put is increasing steadily, ton and tobacco have been probably sufficiently to take felt in every line of business care of increased orders as in the District, and the reports received from lead­ industry gets back into operation. Tobacco and ing firms in numerous lines are full of optimistic cotton are bringing the producer prices that ap­ predictions for the future of business. pear to be sufficient to cover production costs, Condition reports received weekly from eighty and some liquidation is noted of last year's obli­ three member banks in leading cities show in­ gations. Building construction in September was creased reserves and lowered borrowings from the particularly good, more permits having been is­ Reserve Bank. Other reports indicate that the sued than in the corresponding month in either selling of cotton and tobacco has enabled many 1919 or 1920, and more permits than were issued banks to strengthen their position by reducing during any month in 1920. Wholesale trade in loans due to other than Federal Reserve Banks. dry goods, shoes and furniture is considerably Debits to Individual Account at clearing house ahead in the volume of sales for September, 1921, centers show business in the Fifth District rela­ in comparison with September, 1920. Sales re­ tively more active than the average for the United ported for September by sixty-six firms handling States, as shown by the Federal Reserve Board’s groceries, dry goods, boots and shoes, hardware weekly statement. Business failures in the Fifth and furniture show an increase of 6% over August, District in September were 57.4% more numerous 1921 sales, and a decrease of only 13.3% under than in September, 1920, but the average increase sales in September, 1920. Retail trade is tak­ for the twelve Federal Reserve Districts was ing on the usual seasonal briskness, though the 116.5%. The labor situation has not changed ma­ warm weather somewhat slowed down this de­ terially as compared with former months this year. velopment during September. CONDITION OF SEVENTY-EIGHT REPORTING MEMBER BANKS IN SELECTED CITIES. ITEMS October 5, 1921 September 7, 1921 October 8, 1920 I 1. Total Loans and Discounts (exclusive of rediscounts) -------------------------- $ 405,391,000 : $ 403,523,000 $ 49$,064,000* 2. Total Investments in Bonds and Se­ curities -------------------------------------- 124.899.000 119,291,000 76,983,000** 3. Total Loans and Investments----------- 530.290.000 522,814,000 573.047.000 4. Reserve Balance with Federal Reserve Bank ___________________________ 30.732.000 28,723,000 35.947.000 5. Cash in Vaults--------------------------------- 14.089.000 14,200,000 18.389.000 6. Demand Deposits___________________ 287.413.000 291,629,000 341.126.000 7. Time Deposits -------------------------------- 117.646.000 117,776,000 105.791.000 8. Discounted with Federal Reserve Bank ___________________________ 66.983.000 i 68,168,000 81.925.000 * Includes some miscellaneous investments. ** Government Securities only. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis In the table given above, the principal items of condition are shown for seventy-eight identical banks, located in thirteen cities of the Fifth Reserve District, as of the close of business October 5, 1921, September 7, 1921, and October 8, 1920, thus giving comparisons for the current month with the pre­ ceding month of this year and with the corresponding date last year. In the table, all items are com­ parable except items 1 and 2, these having been calculated differently in 1921 and 1920. Comparing the figures as of October 5, 1921, with those as of October 8, 1920, all items show de­ creases between the two dates except item 7, Time Deposits, which continues to hold up remarkably well, having increased from $105,791,000 on October 8, 1920, to $117,646,000 on October 5, 1921, a gain of $11,855,000, or 11.2%. Every month this year has shown higher Time Deposits than the cor­ responding month of 1920. The decrease shown in all items except number seven are as follows : Total Loans and Investments decreased from $573,047,000 as of October 8, 1920, to $530,290,000 as of October 5, 1921, a decline of 7.5%; Reserve Balance with the Federal Reserve Bank decreased from $35,947,- 000, to $30,732,000, a decline of 14.5%; Cash in Vaults decreased from $18,389,000 to $14,089,000, a de­ cline of 23.4%; Demand Deposits decreased from $341,126,000 to $287,413,000, a decline of 15.7%; and Discounts with the Federal Reserve Bank decreased from $81,925,000, to $66,983,000, a decline of 18.2%. Comparing the figures as of October 5, 1921, with those as of September 7, 1921, some interest­ ing facts are seen. Total Loans and Discounts increased within the month five-tenths of one per cent., and Total Investments increased 4.7%. Reserve Balance with the Federal Reserve Bank also shows an increase, amounting to 7%, but Demand Deposits, Time Deposits, and Discounts with the Federal Reserve Bank all register declines for the month. The figures alone, however, do not indicate the full amount of liquidation that has taken place, for at this time of the year there is a seasonal liqui­ dation in county banks, as crops are marketed, but there is also a seasonal increase in loans in the city banks to finance the merchants, wholesalers and buyers of agricultural products, the liquidation of which loans normally occurs later in the season. In view of this counter demand for loans, the small increase for this period in immaterial. The decrease in bills discounted with, and the increase in reserves with the Federal Reserve Bank show that the reporting banks occupy a stronger position than previously this year. DEBITS TO INDIVIDUAL ACCOUNT IN CLEARING HOUSE CITIES. CITIES For the Weeks Ending October 5, 1921 September 7, 1921 October 6, 1920 Baltimore, Md. ----------------------------------- $ 112,468,000 $ 94,105,000 $ 124,101,000 Charleston, S. C---------------------------------- 6,186,000 6.090.000 7.461.000 Charlotte, N. C------------------------------------ 6.554.000 4.941.000 7.360.000 Columbia, S. C. --------------------------------- 6.591.000 3.614.000 6.928.000 Greenville, S. C---------------------------- *------- 4,582,000* 2,695,000* Huntington, W . Va------------------------------ 4.393.000 3.566.000 6.196.000 Norfolk, V a .__________________________ 15.044.000 10.723.000 19.359.000 Raleigh, N. C_______________________— 4,000,000 3.700.000 4.280.000 Richmond, Va. ----------------------------------- 28.974.000 22.759.000 27.589.000 Washington, D. C-------------------------------- 39.948.000 29.998.000 38.992.000 Wilmington, N. C_____________________ 5,837,000* 4,016,000* Totals for 9 cities------------------------- $ 224,158,000 $ 179,496,000 $ 242,266,000 Totals for 11 cities----------------------- 234,577,000 186,207,000 * Not included in Totals for 9 cities. Debits to Individual Account in nine clearing house centers for the week ending October 5, 1921, totaled $224,158,000, compared with a total of $242,266,000 reported from the same cities for the week ending October 6, 1920, a decline in debits for the 1921 week of 7.5%. The average decline between the two dates reported by 151 leading centers for the entire United States was 16.3%. As compared with the week ending September 7, 1921, the week ending October 5, 1921, shows an increase of 24.9%, “which may,” says the Federal Reserve Board, “be ascribed chiefly to large volume of end-of-month and end-of-quarter settlements effected during the week.” The national increase be­ tween the two dates mentioned was 15.2%. It will be noted that the percentage changes in both com­ parisons made herein show that the volume of business transactions in the Fifth District is above the national average. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis MONTHLY CLEARINGS. For Month of September increase or Per Cent of Increase or No. No. CITIES Decrease 1921 1920 Decrease 1 Baltimore, Md. _______________ $ 274,010,837 j $ 419,609,008 $ 145,598,171— 34.7— 1 2. Charleston, S. C. ______ ______ 8,754,640 14,216,834 5,462,194— 38.4— 2 3. Charleston, W . V a .____________ 12,905,950* 3 4.