Evening star., 1933-07-05
FEDERAL RESERVE
BANK REPORTSGA|N
Business Improves Further in
This Section During
Month of May.
BY EDWARD c. STONE.


Federal Reserve Bank Of Richmond'S
monthly review of credit business and
agricultural conditions in the fifth dis
t1Ct show that the improvement in
business is spreading rapidly to addi-
tlonal lines of trade and industry.
Agent w. W. HoXton states that
banking developments during May were
mostly seasonal but some changes in
statements of the Reserve Bank and
member banks were greater than are
accounted for by seasonal influences. At
the Bank of Richmond rediscounts for
member banks declined moderately but
the bank increased its holdings Of Gov
ernment securities sufficiently to bring
about a net increase in total earning
assets.
The circulation of Federal Reserve
notes declined much more than sea-
sonally, rejecting decrease in boarded
funds. Reporting member banks in
leading cities in the fifth district re-
duced outstanding loans, and also low
cred their investments in securities apd
their reserve balance at the Reserve
Bank, but at the same time they re-
duced their borrowing at the Reserve
Bank, and reported an increase in de-
mand deposits.
Debts to individual accounts in five
weeks ended June IA showed an in
preceding five weeks, ended May 10.
this rise indicating an actual increase
in business transactions no seasonal
/ influences affecting debts figures at this
time of the year The record OF COM
mercial failures was favorable, May wit
Messing 25 per cent decline IN NUMBER
| of inSolvencies in comparison With May
last year. although liabilities were larger
last month than year ago.
Emplovment Conditions Better.
Emplovment conditions improved fur
ther in May and the first half OF June,
and the ranks of unemployed were ma
terially reduced in number. In ADDITION,
the past month witnessed some pay ad-
vances. thus increasing purchasing
power of the people who are employed.
Coal production in May increased over
April production. an unSeasonal de-
Velopment, and also exceeded produc-
ton in May 1882, probably ref1ectlng
increased industrial activity in many
lines which call for greater fuel con-
sumption.
Fifth district textile mills kept pace
with a national rise in textile activity.
and most of the mills increased operat-
ing time, employed additional workers.
and in some cases granted advances IN
nav to employees. Tobacco factories
. continued full time operations, and
some plants added to their working
forces.
Retail trade in department stores in
Nav made the best comparison with
the corresponding month Of the pre-
ceding year that has been shown Tor
two years. stores in textile sections do
ing especially well as a result OF pet
ter employment by mill workers. re
ports from several lines of wholesale
trade show better business than LOT
many months. hardware and dry goooS
doing particularly well. -
Agricultural prospects IN the n1tn ols-
trict improved during May, and are
better than they were year ago. Inc
most unfavorable factors in the sltua-
tion continue to be the small volume
of construction work under way ana
frozen funds in closed banks whlch
make collections on old debts very slo"
Bonds Disregard Imitation Talk.
The American Bankers Association
journal discusses the effects OF lnild-
ton talk on the bond market as 1ol-
lows in its July issue:
Business. stocks commodities anu
sentiment have not. in their recent I'M,
nressive recovery. outdistanced the bond
market. Prices and trading volume
have risen substantially. and, after
lapse of several weeks, new munlclpal
issues have begun to appear. bonos
have drawn sustenance from MANY
sources. not the least important OF
which is that portion OF the specu-
latiye fraternity able to see through
the seeming paradox Of advancing oond
prices when the air is thick with in
flation talk.
In one month with no hesitation
whatever, the principal bond averages
have recaptured all OF the ground tney
Welded with little show OF fight IN the
Hl,o
the bond the greater its speculative
appeal has been and the sharper lts
rise. While from the years lows
representative selection of bonds has
recovered about II per cent. the sec
ond-grade issues have gone up 80 per
cent or more. 1t should be noteo that
the acuter phase of this rally mas oc-
CURED since President Roosevelt With
drew the gold base from the dollar
and launched the currency on an un-
Travelled sea disturbed by lnt1atlonary
proposals.
1T is orthodox for bond prices to
decline at the first mention OF imitation
The price of most issues has acted ol1-
ferently at this time because OF the pos
eibility that a rise in prices might, even
if only temporarily. help earnings and
tax collections. making the payment of
bond interest more certain and defaults
less likely
Local Banks Awaiting Call.
washington banks are awaiting the
call for condition which is expected to
be issued bv the controller of the cur
rency any day now. 1t is presumed 1t
will be made as of June 30, based en-
the fact that q call has been issued on
the last day of the Government hScal
year as far bacl, as the Oldest lnhab-
liant can remember.
Twenty banks are now doing COM
rlate banking business in the District OF
Columbia They will be called en- for
statements. which will also be pub
lished in the newspapers 1t is not tx-
pCcted that the 10 closed banks Will be
asked for any statement of condition to
he published at this time. The Treas
ury already has full information from
tn conservatoTs Of these banks, which
is being used in connection with the ef-
fcYts being made to get most OF them
reopened.
Eight Of these institutions are now
III hing merger. plans and nope to open
on August l. Two others are seeking
to reopen on the same cate, or about
that time. while the ether two have not
announced definite plans. Ten OF tle5e
banks hope and expect they viii be
O. rating on complete schedules before
the second call for the year is issued
and be in pOSltlOn 10 make lull re-
ports.
Bonds Lead Exchange Trading.
Trading in Washington Railway &
Electric IS led business cn the Wash
incton Stock EXcha-ge after the fCu--
Gav shutdown. Four 1000 sales were
recorded, all made at 6512.
Washington Gas Light 6S, Series B.
came out in cne small sale at 104,
while $500 Washington Gas Light IS,
1860, changed HANDS at l04i2 The re-
maining trading was in stocks. Lam