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Twentieth oAnnual Itgport
of the

FEDERAL RESERVE BANK
OF PHILADELPHIA




Made to the Federal Reserve Board
by the Chairman of the Board
and Federal Reserve Agent
of the Third Federal Reserve District

193 4

Twentieth oAnnual '"Rgport
of the

FEDERAL RESERVE BANK
OF PHILADELPHIA

Made to the Federal Reserve Board
by the Chairman of the Board
and Federal Reserve Agent
of the Third Federal Reserve District




193

4




CONTENTS
Page

Profit and loss account
Statement of condition
Business conditions:
Foreword
Industrial activity:
Manufacturing
Coal and other fuels
Crude petroleum
Building and construction
Agriculture
General employment, unemployment and relief
Distribution, trade and service
Banking conditions:
Foreword
Gold Reserve Act of 1934
Reduction in gold content of dollar
Silver Purchase Act
Deposit insurance
Foreign exchange transactions
Securities Exchange Act
Reserve bank credit
Industrial loans
Changes in the supply of bank funds
Reserve position
Condition of member banks
Currency demand
Discount and interest rates
Rates on bank deposits
Bankers' acceptances
Changes in membership
Fiduciary powers
Departmental operations
Bank relations activities
Personnel and building
Banking and business information
Indexes of business conditions
Directors and officers, Jan. 1, 1935



5
6
7
9
13
15
15
17
20
22
28
29
29
30
30
30
. 31
34
36
38
43
45
48
50
51
52
52
54
54
56
57
58
61
64




Annual Report of the Federal Reserve Bank
of Philadelphia for 1934
Earnings of the bank from current operations declined from
$4,311,000 in 1933 to $3,725,000 in 1934, owing mainly to a reduction in income from discounted and purchased bills. These earnings, supplemented by $626,000 derived from other sources, were
drawn upon to the extent of $3,307,000 to meet current expenses
and other deductions such as reserves for contingencies and depreciation on buildings. The year's operations thus show $1,044,000
available for distribution, of which $926,000 was required for the
payment of dividends. The balance of $118,000 was added to the
surplus which is designated in the statement as "Surplus—Section 7" and which has been accumulated from the routine operations of the bank. As $14,621,000 was withdrawn from this surplus during 1934 to pay for stock of the Federal Deposit Insurance
Corporation, it shows a decline of $14,503,€00 for the year.
Profit and loss account
(000's omitted)

1932

1933

1934

Earnings:
From bills discounted
From bills bought
From United States securities
From other sources

$2,594
197
2,037
173

$1,550
60
2,658
43

I 456
10
3,152
107

Total earnings
Additions to earnings

$5,001
312

$4,311
117

$3,725
626

$5,313

$4,428

$4,351

$1,784

$1,965

$2,135

135
75
20
0
0
28

184
84
28
2,483
0
2

102
142
26
651
250
1

$2,042

$4,746

$3,307

Deductions from earnings:
For current bank operations
For federal reserve currency (mainly the cost of
printing new notes and taxes on bank note circulation)
Assessment for Federal Reserve Board expenses .
Furniture and equipment purchased
Reserves for contingencies
Depreciation on bank building and premises
All other
Total deductions from earnings
Net earnings available for dividends and
additions to surplus
Distribution of net earnings:
Dividends paid
Transferred to surplus account (Section 7)
* Deficit.

t Transferred from surplus.
5




$1,044

$3,271
$973
2,298

$951
l,269f

$926
118

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Statement of condition
December
30, 1933

December
31, 1934

Changes

$ 92,988
100,344
4,188
31,051

$271,119
0
2,525
35,662

+$178,131
- 100,344
1,663
+
4,611

Total reserves
Redemption fund — F. R. bank notes
Bills discounted:
Secured by U. S. Government obligations *. .
Other bills discounted

$228,571
1,300

$309,306
0

+$ 80,735
1,300

5,286
20,077

556
437

Total bills discounted
Bills bought
Industrial advances
United States securities
Other securities

$ 25,363
7,858
0
167,120
510

$

993
584
3,236
167,120
0

- $ 24,370
7,274
+
3,236
0
510

Total bills and securities
Due from foreign banks
Fed. res. notes of other banks
Uncollected items
Bank premises
All other resources

$200,851
368
1,066
36,896
3,841
4,576

$171,933
87
1,373
38,755
4,411
5,178

- $ 28,918
281
+
307
+
1,859
+
570
+
602

$477,469

$531,043

+$ 53,574

$236,128
20,390

$240,443
0

129,225
83
437
9,512

211,579
4,315
1,995
1,977

+$ 4,315
- 20,390
+ 82,354
+
4,232
+
1,558
7,535

Total deposits
Deferred availability items
Capital paid inSurplus — Section 7
Surplus — Section 13b
Reserves for contingencies
All other liabilities

$139,257
35,044
15,917
27,973
0
2,500
260

$219,866
37,578
15,131
13,470
1,049
2,996
510

+$ 80,609
+
2,534
786
- 14,503
+
1,049
+
496
+
250

Total liabilities
Ratio of total reserves to deposit and federal
reserve note liabilities combined
Contingent liability on bills purchased for
foreign correspondents
Commitments to make industrial advances....

$477,469

$531,043

+$ 53,574

60.9%

67.2%

(OOO's omitted)
RESOURCES
Gold certificates on hand and due from U. S.
Treasury
Gold
Redemption fund — F. R. notes
Other cash

Total resources
LIABILITIES
Federal reserve notes in circulation
Fed. res. bank note circulation — n e t . . . .
Deposits:
Member bank — reserve account
U. S. Treasurer — general account
Foreign bank
Other deposits

$400
0

$68
$399

-

+
+

4,730
19,640

6.3%
$332
$399

* Includes bills secured by obligations fully guaranteed by the United States Government.




Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Business conditions
Business in this district during 1934 generally was more active
than in 1933 and also than in 1932 when record low levels were
reached virtually in all lines of industry and trade. While the upward movement still lacks uniformity, it nevertheless shows that
the swings up and down have leveled off considerably in contrast
with extreme fluctuations that characterized the year 1933.
Industrial production and employment have increased further,
despite labor difficulties, curtailment of production in certain lines,
and continued price adjustments which affected costs and earnings.
Available data indicate that inventories at the end of the year held
by local industries in the aggregate show a decline from the previous year, particularly in the case of finished goods.
Building and construction have continued at an extremely low
level in contrast with the years before the depression. While
activity in private building particularly in the case of residential
buildings has shown almost no change from 1933, operations on
projects financed by public funds have increased sufficiently to raise
the general level considerably above that in the previous year, as
indicated by the volume of employment and wage disbursements
and by the value of building contract awards. Although the real
estate market has continued depressed, foreclosures have declined
substantially, after several years of sharp increase.
Agricultural operations in this section have resulted in a somewhat larger output of crops and livestock products than in the
previous year. Prices received by farmers for most products sold
have advanced sharply in addition to increases between 1932 and
1933, although the rise in prices of commodities that farmers buy
has tended to offset in varying degree the advantages of advancing
markets for their own products, particularly in the case of the dairy
and poultry industries which required the purchase of feed. Nevertheless, the estimated cash income of farmers in the aggregate
has increased materially in 1934, reaching the highest total since
1931. In consequence, the condition of farmers in this district on
the whole has improved further during the year.
Activity in the channels of distribution shows marked gains in
the movement of commodities and in the use of services. The value




Twentieth Annual Report, Federal Reserve Bank of Philadelphia

INDUSTRIAL

PRODUCTION

PHILADELPHIA FEDERAL RESERVE DISTRICT
I923-25AVCI00

ADJU5TCD TOR SEASONAL VARIATION

VALUE OF BUILDING CONTRACTS
200
175
150

125

—

—

•>Y V

i -

• vV
4

75

u

RESID ENTIAL V
v
1

•

AA
V—i

50

- -— - -

TOTAL

s

v

25
0

1928

1929




1930

1931

1932

1933

1934

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

of retail and wholesale trade sales has increased appreciably as
compared with the previous year, reflecting to some extent the
influence of higher prices. The rate at which accounts have been
settled has risen considerably. Shipments of various commodities
to and from this district by rail, boat and motor truck likewise
indicate a greater movement of goods than last year and substantially larger than was the volume in 1932. Other indicators such
as those measuring sales of new passenger automobiles, life insurance and activity of commercial hotels also substantiate this upward
trend since 1932. Description and analysis of activity by major
branches of business follow.
Industrial activity
Manufacturing Productive activity of manufacturing industries in
this district during 1934 showed considerable fluctuation, although major changes were much less extreme than were
those in the previous year. The rate of factory output rose almost
steadily in the first part of the year barring the usual seasonal
variation, was interrupted in the fall months partly by prevailing
labor disputes, and again increased sharply in the latter part of the
year, reaching the highest level since the middle of 1933 when production had expanded at a rapid pace just before the introduction
of industrial codes.
This bank's index number of factory production, which comprises 45 important manufacturing industries representing approximately two-thirds of the total output as measured by the value
added by the process of manufacture, rose to almost 67 per cent
of the 1923-25 average as 100 in comparison with 64 in 1933 and
61 in 1932 which was the record low year of the depression. It thus
appears that the average rate of production in 1934 was 4 per cent
higher than in the preceding year and 10 per cent higher than two
years ago; but it was 40 per cent below the peak level reached in
1929 and about 34 per cent below the 1928 rate of production.
Figures for the end of the year show that the relative increase
in the output of durable goods, such as certain fabricated metals,
transportation equipment, and construction materials, was greater
than in the case of consumers' goods, including such commodities
as textile and leather products. Our average index number for the
former group rose to 50 as compared with 40 in the previous year
and about 38 in 1932, indicating gains of 24 and 30 per cent respectively. The average index of productive activity in the case of




9

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

consumers' goods, on the other hand, dropped to 79 or 4 per cent
below that of a year ago, reflecting chiefly severe strikes and otherwise restricted production in some of the important textile industries. The average rate of activity in this class of industry, however, was 2 per cent higher than in 1932. The trend of production
in the case of durable goods on the whole has been upward since
early 1933, owing chiefly to increased activity in the metal and
transportation equipment industries, while in the case of consumers'
goods the rise was less pronounced, just as the recession between
1929 and 1932 was much more severe in the case of the former
than in that of the latter.
The following table gives comparisons of the average indexes
of productive activity in 1934 with the preceding five years:

Factory output

Philadelphia Federal Reserve
District

Manufacturing—total. . . .
Durable goods
Consumers' goods
Metal products
Textile products
Transportation equipment.
Food products
Tobacco and products
Building materials
Chemicals and products. . .
Leather and products
Paper and printing
Electric power output

Per cent change, 1934 compared with
1934 average
index numbers
(1923-25 = 100) 1929 1930 1931 1932 1933
66.9

-40

-31

50.2
79.2

-54
-30

-46
-21

55.7
72.0
45.0
73.1
88.5
26.0
100.2
118.0
79.1
192.0

-55
-33
-52
-24
-26
-69
-18
- 7
-33

-45
-19
-48
-20
-17
-60
-13
- 3
-30
- 1

+ 1

-13

+10
+30
+ 2
-10
+63
-13
+ 0
_ g
-23
-12
- 1
- 6 +13
-39
+ 2
— 3 +12
+ 3 +20
-20 - 5
+ 1 + 9
-17
-12

+ 4
+24
-

4

+32
-11
+36
+ 3
+ 9
+10
+ 6
+ 0
— 2
+ 6

Factory prices of manufactures have advanced noticeably since
the middle of 1933, although the fluctuation during 1934 was not
as pronounced as that in the year before. The index number of the
Bureau of Labor Statistics, which comprises wholesale prices of
manufactures including fuel and lighting, in 1934 averaged about
78 per cent of the 1926 average as 100, compared with 71 a year
before and 70 two years ago; in 1928 and 1929 this index fluctuated
around 92. The sharpest increases occurred in the case of raw
materials which include agricultural commodities; advances in
semi-finished products also were relatively greater than those in the
case of finished goods.
Reports on commodity stocks held by plants in this district at



10

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

the end of the year indicate that in a number of important lines for
which statistical information is available inventories of raw materials and finished goods were reduced toward the end of the year
in contrast with a tendency toward accumulation exhibited in the
same period of 1933. This situation also appears to be borne out
by the national figures on stocks of raw materials and manufactured goods.
The relation of factory employment and payrolls to production
has changed greatly since the fall of 1933. Indexes based on averages of the years 1923-25 show that prior to 1933 the relative level
of employment generally followed the trend of production, being
somewhat under that of output in active periods, but since then it
has shown a definite tendency to fluctuate considerably above the
level of factory production. Total wage disbursements, while rising
in much greater proportion than did production and employment,
have continued below the levels of both. The number of average
weekly hours worked has registered no material change, remaining
but slightly above that prevailing during the depression and considerably under the pre-depression working time, whereas hourly
earnings of workers have risen since the middle of 1933 to a considerably greater extent than have any of the other factors just
mentioned. These changes reflect in part the influence of industrial
codes which were put into effect in the latter part of 1933.
The following indexes, expressed in percentages of the 1923-25
average as 100, illustrate the relationship between factory production, employment and payrolls in this district:
Index numbers

Phila. Fed. Res. District
(1923-25 = 100)
Production..
Employment
Payrolls

1928

1929

1930

1931

1932

1933

1934

102
93
94

111
99
103

97
90
87

77
75
63

61
64
42

64
67
45

67
75
57

Jan.
1935

75
58

The manufacturing industry in this section on the average
employed nearly 12 per cent more wage earners and paid out 27
per cent more in wages during 1934 than in 1933. In comparison
with 1932, factory employment during 1934 was 17 per cent larger
and wage payments 34 per cent greater. Such figures as are available from the Bureau of Labor Statistics indicate that labor disputes in Pennsylvania industries were quite extensive, especially in
the early and the fall months of the year. For example, in two



11

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

EMPLOYMENT AND PAYROLLS
PENNSYLVANIA
PERCENT

ALL MANUFACTURING INDUSTRIES
100

PAYROLLS

100

•««. A

DURABLE GOODS
80
60
40
20

CONSUMERS GOODS

120

I

100

EMPLOYMENT

80

60
PAYROLLS

V

40

HOURS AND EARNINGS
1927-28:100

100

!

80

HOURLY EARNINGS C
A

60
TOTAL EMPLOYE
HOURS WORKED

40
20

1929

1930




1931

1932

12

1933

1934

1935

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

months, August-September, there were in progress 84 disputes,
involving over 78,000 workers and a consequent loss of approximately 400,000 man-days.
Our current indexes, supplemented by the data of the Census
of Manufactures, indicate the following trend in factory employment and payrolls since 1923:
Factory employment and payrolls
Philadelphia Fed. Res. District
(Estimates)

Employment
(average for year)
877,316
785,198
804,043
829,772
792,432*
762,487
810,862*
757,227
645,330*
547,240
573,507
640,034

1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

Payrolls (total)

$1,075,814,441
960,702,296
1,003,933,900
1,063,166,001
996,186,543*
946,309,341
1,033,815,162*
908,701,215
679,755,032*
459,514,400
487,544,778
617,231,691

* From the Census of Manufactures for 60 counties in eastern Pennsylvania, southern
New Jersey and Delaware; prior to 1927 these figures were not subdivided by counties.
Figures for other years were computed from the indexes of employment and payrolls
compiled by the Philadelphia Federal Reserve Bank.

The number of employee-hours actually worked in all factories
of Pennsylvania during 1934 averaged about 32.6 hours per week
as compared with 33.1 in 1933. The average earnings for the
manufacturing industry as a whole approximate 57 cents per hour
or 19 per cent more than in the previous year, reflecting in part the
effect of industrial codes upon the minimum wages and maximum
hours of work.
Coal and Production of solid fuels and fuel oil in this section was
other fuels appreciably larger in 1934 than in 1933. In the case
of industrial fuel as well as power, the demand reflected
improved conditions, particularly during the spring and late
months of the year.
Wholesale prices have advanced further except in the case of
anthracite, which on the average showed a decline of 3 per cent
as compared with 1933 and were 9 per cent lower than in 1932.
The following table gives detailed comparisons:




13

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Per cent change from

Fuels
(Output and shipment figures
are daily averages)
Anthracite
Production
Shipments
Stocks
Prices
Employment
Bituminous
Production
Shipments
Prices
Employment
Coke
Production
Prices
Fuel oil
Production
Prices

tons
tons
1000 tons
(1926 = 100)
Number

189,100
176,446
1,921
80.1
120,537

tons
Number cars
(1926 = 100)
Number

291,600
22,134
94.5
140,044

(1923-25 = 100)
(1926 = 100)

78
84.8

(1923-25 = 100)
(1926 = 100)

104.3
59.1

Sources: Bureau of Mines and Bureau of Labor Statistics.

Stocks of bituminous coal held by various industries in the
country at the end of 1934 were slightly smaller than at the same
time a year before. The supply of anthracite fuel in the storage
yards of producers, on the other hand, was substantially larger
than at the end of 1933. This was also true of by-product coke
at merchant plants.
The trend of employment and production of Pennsylvania
coal mines since 1923 is indicated by the figures below:

Coal mining
Employment and
production
Pennsylvania
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

Production (net tons)

Employment
Anthracite

Bituminous

Total

Anthracite

Bituminous

157,743
160,009
160,312
165,386
165,259
160,681
151,501
150,804
139,431
121,243
104,633
120,537p

194,981
169,322
156,798
155,999
153,699
133,414
131,774
130,150
116,726
104,532
115,453
140,044p

352,724
329,331
317,110
321,385
318,958
294,095
283,275
280,954
256,157
225,775
220,086
260,581p

93,339,000
87,927,000
61,817,000
84,437,000
80,096,000
75,348,000
73,828,000
69,385,000
59,646,000
49,855,000
49,541,000
57,385,000p

171,880,000
130,634,000
136,928,000
153,042,000
133,099,000
131,202,000
143,516,000
124,463,000
97,659,000
74,776,000
79,296,000
89,223,000p

Source: Bureau of Mines, United States Department of Commerce,
14



p—Preliminary.

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Crude
Production of crude oil in that part of Pennsylvania
petroleum which is located in this district has shown an additional
increase during 1934. Barring declines in the early
part and in the fall of the year, the trend was sharply upward
continuing the rise which began in the spring of the previous year.
The following figures show production of crude petroleum in the
Bradford field from 1928 to 1934:

1928
1929
1930
1931
1932
1933
1934

Bradford field
barrels produced*

Average price
per barrel (Pa.)

5,901,400
7,734,900
9,268,700
8,804,300
9,926,550
10,129,950
11,967,500

Crude petroleum output and prices

13.101
3.662
2.370
1.789
1.820
1.785
2.389

* Source: American Petroleum Institute.

Productive activity in the Bradford field has expanded very
rapidly in the past dozen years, owing largely to improved methods
of extracting oil. It is estimated that this field produces about
70 per cent of all the crude petroleum in Pennsylvania. Compared
with the three-year period 1923-25, the average for which is made
to equal 100, our index number of production in 1934 was over
356, or 256 per cent higher than in that base period. After declining almost steadily for several years, wholesale prices of crude oil
during 1934 advanced about 33 per cent as compared with the
low average in 1933.
Building and The volume of building and construction in this disconstruction trict during 1934 generally has continued at extremely low levels in spite of large expenditures for
public works. The value of all contracts awarded in this district
amounted to $94,178,900 as compared with a low of $67,788,600
in 1933 and with a record high of $503,542,800 in 1928. The
gain of 39 per cent over the previous year was due primarily to
increased volume of public works and educational buildings, as
shown by the accompanying table.
The amount of contract awards for public works and utilities
in 1934 was over 47 per cent of all awards, while that for residential buildings was less than 19 per cent, the remaining 34 per cent
being in non-residential buildings. Figures indicate significantly




15

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Building and real estate
Philadelphia Fed. Res.
District

Per cent change—1934 compared with

Amount
1934

1929

1930

1931

1932

1933

Contracts awarded:
Residential. .
$17,803,900
Apartments and hotels. . 3,127,700
14,676,200
Family homes
31,715,000
Non-residential
Commercial
8,858,600
Factories
7,025,800
Educational
8,141,500
7,689,100
All other

-88
-94
-84
-82
-86
-81
-78
-82

-74
-85
-69
-80
-83
-86
-63
-79

-57
-66
-54
-51
-37
+28
-51
-74

-28
-45
-23
-31
- 3
+76
-37
-61

+ 2
+ 77
- 6
+ 9
+ 20
- 22
+162
- 19

Total buildings
49,518,900
Public works & utilities . 44,660,000

-85
-37

-78
-56

-53
-46

-30
+40

+ 7
+109

-77

-71

-50

- 8

+ 39

91
-25
44

-83
-17
34

Grand total

$94,178,900

Building permits
Employment (Pennsylvania).
Payrolls (Pennsylvania)

-71
_ i
7
-87(a) -80(a) -69(b)
-40(b) -29(c)
+ 12(b) -13(c)

Mortgages recorded
Ordinary real estate deeds. . .
Sheriff deeds

-33
+16
+38

+
+
+
-54(d) -15(d)
22 (d)

11
11
28
27(d)
0(d)
28(d)

(a) 1 county, (b) 2 counties, (c) 3 counties, (d) 7 counties.

that the former importance of residential construction has diminished greatly, while that of public works and utilities has increased
materially in recent years. In the case of non-residential buildings,
no unusual trend seems to be apparent. The relative trend of the
value of building contracts by major classes was as follows:
Building contracts
Phila. Fed. Res. Dist.

1928

1930

1929

100.0% 100.0%
Total
44.4 " 37.° "
Residential..
40.2 " 45.2"
Non-residential
Public works & utilities. 15.4 " 17.6"

1931

1932

1933

1934

100.0%
20.7 "
48.7 "
30.6 "

100.0%
21.7"
34.6 "
43.7 "

100.0%
24.2 "
44.7 "
31.1 "

100.0%
25.7 "
42.8"
31.5"

100.0%
18.9 "
33.7 "
47.4 "

The number of workers in various building trades on the average increased by 11 per cent as compared with the previous year
and was 16 per cent larger than in 1932, as measured by employment indexes for Pennsylvania. The amount of wage disbursements increased 28 per cent over the preceding year and was 38
per cent larger than in 1932. These figures do not include workers



16

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

on special projects under the public works administration of the
Federal government.
Prices of building materials at wholesale showed little variation during the year but the general level was above that of 1933.
The index of the Bureau of Labor Statistics fluctuated around 86
per cent of the 1926 average as compared with 77 a year before
and 71 in 1932, which was a record low. In 1929 this index
averaged 95.
Agriculture The results of agricultural activity during 1934 in the
aggregate reflect a slightly larger output of crops in
this district generally and an increase in value of all marketable
products through higher prices in comparison with the previous
year.
The yield of most farm products was somewhat larger than
in 1933 owing mainly to favorable weather conditions which prevailed throughout the greater part of the growing season and the
absence of any widespread storms such as occurred in the fall of
1933. Although the effects of the record-breaking drought, causing
heavy damages to crops and livestock in other sections of the country, were apparent in a modified form in some parts of this district,
very little permanent damage to crops occurred and the condition
of pasturage on the whole was the best in several years.
Production of such leading field crops as corn, oats and white
potatoes was considerably larger than in 1933, while that of wheat,
tobacco and hay was somewhat smaller. The harvested acreage
of truck and vegetable crops also increased and yields per acre
were in most cases above those of last year. Yields of orchard
fruits, particularly peaches, were exceptionally small owing to
severe weather prevailing in February and March.
As indicated by market receipts, output of dairy products and
eggs, which are important sources of cash income to farmers in
this district, showed substantial gains, while that of poultry was
considerably smaller than in 1933. Cold storage holdings of both
dairy and poultry products declined more sharply than usual during
the last half of the year and at the end of December were noticeably
smaller than at the close of 1933.
Reflecting to some extent an improvement in industrial conditions, there were apparently fewer workers seeking jobs on
farms in 1934 than in the previous two years. But the demand
for farm labor showed a larger increase from early spring to midsummer and was maintained throughout the harvest season at a



17

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

PRICES
UNITED STATES

PERCENT

PERCENT

(ACTUAL)

(IK6-KX

225
90 STOCKS
200

175

150

A/

125

25

100

1928

1929




1930

1931

18

1932

1933

1934

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

considerably higher level than a year before. Between October
and the end of the year the opportunity for agricultural workers
diminished by a smaller percentage than was the case in 1933,
and on January 1, 1935 was estimated at nearly 75 per cent of
normal as compared with 69 per cent one year earlier.
Wholesale prices of farm products in the country as a whole
again have advanced substantially during 1934, largely as a consequence of severe drought and curtailed output. The recent trend
of farm prices for all agricultural commodities in this section and
in the country is indicated by the following official indexes:
Farm prices
of agricultural commodities
(Indexes: 1910-1914 = 100)
United States.
Pennsylvania.
Xew Jersey. •

1931

1932

1933

1934

113

57
71
86

62
76
99

86
94
108

Sources: United States Department of Agriculture; Federal-State Crop Reporting
Service.

It appears from preliminary estimates on the basis of data
presented by the Bureau of Agricultural Economics that prices
received by farmers for their products have risen more rapidly
than have the prices paid for commodities which farmers ordinarily purchase, so that the disparity between the two price series
has narrowed considerably since 1932-1933. For example, the
Bureau of Labor Statistics indexes show that the average increase
in wholesale prices of farm products from 1933 to 1934 amounted
to about 27 per cent in contrast with a rise of approximately 16 per
cent in foods, 10 per cent in other commodities (chiefly manufactures) and less than 14 per cent in all commodities (784) combined.
An exceptionally sharp increase in prices for grains and their
products has been reflected in livestock feed and as a result has
affected those producers of dairy and poultry products who have
to buy all or part of their feed supply.
Farmers' cash income in this district as a whole showed a
substantial increase from 1933 to 1934, despite a sharp decline in
value of potatoes and unusual shrinkage in some of the fruit crops.
Preliminary estimates made from the farm value of all crops and
sales of livestock and livestock products indicate that cash income
of local farmers was about 18 per cent larger in 1934 than in 1933.
These estimates do not include rental and benefit payments result


19

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
ing from the curtailment of production under the Agricultural
Adjustment Act. Pennsylvania farmers, for instance, were so
paid $1,200,000 in 1934 as compared with $425,000 a year before.

Estimated cash income
from farm production
Phila. Fed. Res. Dist.
1924.
1925.
1926.
1927.
1928.
1929.
1930.
1931.
1932.
19331
19341

Crops

Livestock
products

Total

$116,536,000
133,473,000
114,277,000
111,683,000
99,301,000
107,690,000
91,355,000
70,672,000
53,917,000
66,617,000
69,436,000

$126,312,000
134,627,000
141,945,000
142,238,000
152,410,000
176,707,000
161,904,000
128,305,000
100,384,000
98,824,000
126,495,000

$242,848,000
268,100,000
256,222,000
253,921,000
251,711,000
284,397,000
253,259,000
198,977,000
154,301,000
165,441,000
195,931,000

t Exclusive of benefit payments. * Preliminary estimate based on farm value of
crops and sales of such livestock products as eggs, poultry, milk, butter and cheese.
Source: U. S. Department of Agriculture.

General employment, There was in 1934 a further increase in emunemployment and
ployment and earnings in many important
relief
industries, trades and services. Our index
number representing twelve branches of trade
and industry in Pennsylvania averaged 108 for employment and

Employment
General employment and payrolls—Pennsylvania. (Figures for
12 occupations are combined proportionately; 1932 averages equal 100.) 1932
1933 1934

1932

1933

1934

83
84
80

Payrolls

January..
February.
March....
April
May
June
July
August. . .
September
October...
November
December.

108
106
103
102
100
97
93
93
98
101
100
99

91
91
89
90
92
96
99
104
109
109
110
109

102
104
108
108
111
110
107
106
107
109
108
110

118
115
111
108
101
93
86
87
92
100
96
93

85
93
98
110
115
116
112
111

107
113
122
121
129
126
115
116
113
120
118
121

Average...

100

99

108

100

97

118

79

Sources: U. S. Bureau of Labor Statistics, Pennsylvania Department of Labor and
Industry and Federal Reserve Bank of Philadelphia.
20



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

118 for earnings, relative to 1932 as 100, as compared with 99 and
97, respectively, in the preceding year. The fluctuation during the
year also was much less pronounced than in 1933; the percentage
of the minimum to the maximum month was 92 for employment
and 85 for payrolls in contrast with a ratio of 81 for employment
and 69 for payrolls in 1933. Monthly indexes since 1932 are given
in the preceding table.
The increase in the number of workers and in the amount of
their earnings naturally has been reflected in a decline in unemployment and in the average number of persons receiving public relief, as the accompanying table shows. Estimates of unemployment
have been made by the Bureau of Accounts and Statistics of the
Unemploy men t
and relief
Pennsylvania

Estimated
number
unemployed

Average number
of persons on relief
during month

Expenditures
for
relief*

1932—December

1,160,354

1,346,038

$ 5,509,183

1933—January
February
March
April
May
June
July
August
September
October
November
December

1,309,850
1,321,842
1,379,351
1,346,549
1,314,835
1,259,987
1,147,179
1,037,606
909,363
906,787
893,337
867,022

1,577,851
1,799,350
1,960,610
1,975,135
1,998,426
1,940,085
1,773,089
1,576,840
1,422,717
1,361,223
1,352,638
1,298,558

5,943,693
6,759,302
7,734,624
6,844,180
8,153,182
7,249,487
6,334,637
6,486,188
5,997,077
6,321,803
6,804,018
6,730,052

Total 1933
1934—January
February
March
April
May
June
July
August
September
October
November
December
Total 1934

$ 81,358,243
1,028,563
980,467
890,505
906,832
873,269
878,479
935,649
962,029
968,260
915,080
913,721
836,359

1,183,240
1,191,449
1,230,595
1,386,300
1,406,955
1,365,970
1,335,469
1,325,983
1,372,876
1,425,255
1,470,232
1,570,945

$

6,403,763
6,401,485
8,089,878
11,716,412
11,544,225
11,066,327
10,482,441
10,378,583
8,589,161
11,079,998
13,552,199
16,728,232

$126,032,704

Sources: Pennsylvania Emergency Relief Board and Department of Labor and Industry.
* Notes: (a) Direct and work relief only until June 1933; the period from June 1933
to December 1934 includes about $3,698,539 for special programs such as processing of
drought cattle, homeless transients, emergency education, and college students' aid.
(b) Figures do not include administration expenses which amount to about 5 per
cent of the total amount spent on relief from September 1932 to August 1934.
21



Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Pennsylvania Department of Labor and Industry and are intended
to be used only as approximations derived from such limited data as
are available at present. To indicate the extent of the unemployment and relief problem it should be remembered that according
to the decennial census of 1930, the total population of Pennsylvania was 9,631,350; those classified as gainfully employed numbered 3,722,428 or 38.6 per cent of the total. Since that year
obviously the total and the working population has increased
through the excess of births over deaths and through the continuous
maturing of minors.
The amount spent for relief purposes in Pennsylvania during
the twelve months ended December 1934, excluding administration,
totaled $126,033,000 as compared with about $81,358,000 expended
in the same period last year. This increase of about 55 per cent,
in contrast to a sharp decline in the average number of persons on
relief, is due to increased allowance per person. Approximately 60
per cent of this amount was distributed in those forty-eight counties
of eastern Pennsylvania which are included in this reserve district.
The total population in this area in 1930 was 66.7 per cent of the
total Pennsylvania population. No adequate figures are available
on relief expenditures by private agencies.
Distribution, trade, service
The movement of goods from the primary markets to distributing channels and subsequently to various consumers has shown
additional gains during 1934. Seasonal levels have been more than
maintained, particularly in the spring and fall months, despite
continued fluctuations which on the whole have not been as wide
as they were in 1933. Prices of commodities and services have
advanced a little further, though relatively not as much as they
did in the latter part of the previous year, reflecting the influence
of additional price increases at factories and in the case of raw
materials.
Total freight car loadings in this section again exceeded those
of last year by 5 per cent and were 10 per cent above the volume
of 1932. The largest relative increase occurred in the case of coal
shipments, both anthracite and bituminous, as was the case in the
previous year. Rail freight loadings of merchandise and miscellaneous commodities also increased, though in much smaller proportion than did shipments by motor truck.
The trend of freight car loadings originating in the Philadelphia industrial area has been downward for several years, declin


22

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
DISTRIBUTION
PHILADELPHIA FEDERAL RESERVE DISTRICT

RETAIL TRADE

ADjgSTCO FOR SEASONAL VARIATION

PERCENT

SALES
J

100
80

STOCKS

60
( /

40

WHOLESALE TRADE
120
100
STOCKS
SALES

60

**•••«...

-Sii"—

60
40

FREIGHT CAR LOADINGS
120
MERCHAND SE AND
100
80

MISCEL LANEOUS

>^
COAL—J

60
TOTAL40

SALES OF NEW PASSENGER AUTOMOBILES

100

75

50
25

1928

1929




1930

1931

23

1932

1933

1934

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

ing further during 1934. This is not an indication that the demand
for goods produced here has been diminishing but simply an
evidence that the means of transportation, especially over short
distances, has been shifting from rail to motor truck. This is
especially true of commodities in the late stages of manufacture,
the bulk of which make up current shipments from this territory.
Such figures as have recently become available show that since
January 1934 the activity of motor truck companies has increased
greatly as indicated by the employment and payrolls of these companies, while in the case of railroad freight there has occurred in
this period a decline of approximately 3 per cent. Barring fluctuations, the trend of the former during the year has been sharply
upward while that of rail freight has been noticeably downward.
The shipment of commodities through the Port of Philadelphia,
covering that portion of the Delaware River which extends from
Trenton to the sea, increased considerably in value but declined in
volume during 1934, reflecting largely the influence of price changes.
The value of exports was about 18 per cent greater while the tonnage was 1 per cent smaller than in 1933. Similarly, the value of imports increased approximately 7 per cent while the tonnage decreased 5 per cent as compared with the previous year. The following figures, compiled by the United States Engineer's Office for
the Philadelphia Customs District, show the trend of foreign trade
here since 1923:

Foreign trade
Port of
Philadelphia
(000's omitted)

1923
1924. .
1925.. .
1926. .
1927. .
1928. .
1929.
1930
1931. .
1932. .
1933. .
1934...

Imports

Total

Exports

Short
tons

Value*

Short
tons

Value*

Short
tons

Value*

4,458
3,593
4,133
4,013
4,073
4,988
5,870
5,377
4,389
4,062
4,396
4,159

$219,989
202,722
215,313
196,095
204,891
215,725
242,118
167,756
116,787
89,780
103,469
111,056

2,975
2,760
2,917
4,017
2,397
2,101
2,261
2,049
1,813
1,202
1,482
1,462

$134,300
134,475
158,613
123,306
110,264
104,650
130,277
106,368
76,503
42,461
48,742
57,775

7,433
6,353
7,050
8,030
6,470
7,089
8,131
7,426
6,202
5,264
5,878
5,621

$354,289
337,197
373,926
319,401
315,155
320,375
372,395
274,124
193,290
132,241
152,211
168,831

* Value declared at the time of shipment.
Source: United States Engineer's Office, Philadelphia Customs District.
24



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

In contrast with the local changes, the figures compiled by the
Bureau of Foreign and Domestic Commerce of the Department of
Commerce show that the value of exports from the United States in
1934 increased to about $2,133,000,000 as compared with $1,675,000,000 in 1933, a gain of 27 per cent in value and 8 per cent in
volume. Imports in the same period approximated $1,655,000,000,
an increase of 14 per cent in value but virtually no change in tonnage.
Domestic waterborne commerce of Delaware Bay and River apparently has shown little change; this is based on preliminary estimates since complete figures on coast-wise and intercoastal shipments during 1934 will not be available until about the middle of
1935. Traffic on the Chesapeake and Delaware Canal for the third
successive year has exceeded 1,000,000 tons of a varied line of
freight, according to the report of the Engineer's Office.
The dollar volume of wholesale trade sales of eight leading
lines, combined according to their relative importance, showed a
further gain of about 18 per cent over 1933, reflecting in part the
influence of higher prices. All lines have shared in this increase,
the largest rise taking place in the distribution of electrical supplies, jewelry, hardware, and groceries. The value of inventories in

RATIO OF COLLECTIONS TO RECEIVABLES
PHILADELPHIA FEDERAL RESERVE DISTRICT
PERCENT

WHOLESALE TRADE
70

60

50

RETAIL TRADE
I

30

20
RATIO Or COLLECTIONS DURING THE MONTH TO

— ADJUSTED FOR SEASONAL VARIATION

RECEIVABLES AT THE BEGINNING OF THE MONTH.

•••WITHOUT SEASONAL ADJUSTMENT

1926

1927




1928

1929

1930

25

1931

1932

1933

1934

Twentieth Annual Beport, Federal Reserve Bank of Philadelphia

the aggregate at the end of the year was only 7 per cent larger than
a year ago, suggesting that the tonnage on hand probably was
smaller in view of price increases. The largest gains in dollar
volume of stocks over last year were reported by dry goods and
grocery dealers. The rate of stock turnover was 8 per cent higher
than in 1933, the inventories turning nearly six times during 1934.
The ratio of collections to outstanding balances averaged about 17
per cent higher than last year.

Changes in distribution
Philadelphia Federal Reserve District

Per cent change—1934 compared with
1929

1930

1931

1932

1933

Freight car loadings:
Total
Merchandise and misc. (64.9% of
total)
Coal (23.5% of total)

-46

-36

-19

+ 10

+ 5

-49
-30

-41
-18

-25
- 2

+ 2
+20

+ 2
+ 11

Foreign trade—Port of Philadelphia—
value:
Imports
Exports

-54
-56

-34
-46

- 5
-24

+24
+36

+ 7
+ 18

Wholesale trade:
Sales
Stocks
Ratio of collections to outstandings..

-24
-35
+14

-12
-27

+ 3

+ 3
-16
+ 8

+27
+ 0
+22

+ 18
+14
+ 17

— 7

-29
-28
- 4

-20
-18
+ 0

+ 6
- 2
+ 10

+ 9
+ 8
+ 8

-44
+31
-29

-26
+ 19
-29

— 9
+ 5
-19

+41
+ 7
- 2

+ 18
+ 7
+ 8

Retail trade:
Sales
Stocks
Ratio of collections to outstandings..
Registrations of new passenger automobiles
Gasoline consumption
,
Life insurance sales

-35

The value of retail trade sales, as measured by reports from
representative department, apparel, shoe and credit stores in this
district, was 9 per cent larger than last year and 6 per cent greater
than in 1932. While the dollar volume of inventories during the
year on the average was larger, stocks of merchandise at retail
establishments at the end of the year were somewhat smaller than
at the same time last year, owing partly to exceptional increases in
sales during the latter part of the Christmas season. The rate at
which merchandise was moved showed a gain of about 5 per cent
as compared with that in the preceding year. Collections in relation



26

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

to customers' balances outstanding were 8 per cent larger than in
1932, showing a gain for the second year.
The estimated dollar volume of retail and wholesale trade sales
in this district is given below. The figures presented in last year's
report have been revised to conform with the change shown by the
Census of Distribution for 1929 and 1933, as reported by the
Department of Commerce.

Estimates of
retail and wholesale trade sales
Phila. Fed. Res. Dist.
1929
1930
1931
1932
1933
1934*

Retail

1
'

Wholesale

$3,092,000,000
2,755,000,000
2,378,000,000
1,725,000,000
1,591,000,000
1,760,000,000

$3,247,000,000
2,705,000,000
2,166,000,000
1,575,000,000
1,609,000,000
1,895,000,000

* Preliminary, subject to revision.

Sales of new passenger automobiles, as measured by the registration of units in this district, showed a substantial gain during
the year in addition to a marked increase in the previous year. The
trend of sales in this district has been very much the same as that
in the country at large, save for minor variations. The number of
all new passenger automobile sales since 1923 is given in the following table:
New passenger automobile registration
Philadelphia Federal Reserve District
1923
1924
1925
1926
1927
1928

1929
1930
1931
1932...
1933
1934

155,036
159,487
167,835
197,880
166,688
177,915

210,002
158,816
128,703
82,589
99,037
116,787

Consumption of gasoline in this section also has continued upward, showing an increase of 7 per cent during the year.
Improvement in general commercial activity is indicated further
by business done by commercial hotels that cater primarily to business travelers in this district. Room occupancy during the year
increased 14 per cent and total revenue from all sources rose 21 per
cent as compared with 1933. The trend of hotel operations in the
past two years is shown by the table on the next page.



27

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Hotel activity
Philadelphia Federal
Reserve District

Room occupancy—
per cent of capacity
used

1934 in percentages
of the 1933 average
as 100
January
February
March
April
May
June
July
August
September
October
November
December

Revenue from
Guest
rooms

Food

Other

Total

113.9

112.8

115.4

153.9

121.8

110.2
108.2
123.8
119.7
119.1
113.5
114.5
105.9
116.8
116.1
108.2
109.1

102.3
103.2
121.1
119.1
119.6
113.0
112.7
106.9
118.0
117.6
109.5
109.8

110.0
106.8
133.2
132.2
122.6
115.3
116.5
108.0
116.0
110.5
103.8
114.1

170.4
156.8
196.0
180.2
163.4
152.7
146.4
140.9
160.5
166.5
159.7
103.8

117.5
114.7
138.9
134.6
128.5
121.1
120.4
113.6
124.8
123.3
116.7
109.5

Banking conditions
The rehabilitation of banks proceeded rapidly during 1934.
Many banks that at the beginning of the year were operating
under restrictions and were unable to serve their communities
effectively, subsequently were licensed to operate fully or were succeeded by new institutions. The number of licensed member banks
in this district increased from 606 to 656 during the year. In
numerous instances banks were strengthened by the provision of
new capital; although most of this was supplied by the Reconstruction Finance Corporation, local subscriptions sufficed in some cases.
The insurance of deposits, which under the law applies to all
member banks and in which most of the nonmembers participate
voluntarily, contributed to banking stabilization. In this district
no member banks that had been in full operation were closed in
1934 nor did currency demands give any evidence of lack of public
confidence in banks. Bank deposits increased substantially, but
the demand for funds from responsible business concerns was
small and opportunities for the profitable investment of bank funds
also were limited by low returns on high grade securities and
medium and short-term paper. The result was an accumulation of
idle funds on deposit at the reserve bank and at correspondent
banks on which no interest was received.



28

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Gold
Reserve Act
of 1934

One of the fundamental legislative measures affecting the monetary system was the Gold Reserve Act
of 1934, approved January 30. This act vested in
the United States Government the ownership of all
gold coin and bullion held by or for the Federal Reserve Board, the
reserve banks, and the federal reserve agents, and provided for
reimbursement by credits in funds established in the Treasury
as described in section 16 of the Federal Reserve Act; these funds
are payable in gold certificates and not in gold as was the case
theretofore. However, gold certificate credits of the Federal reserve banks may be exchanged for gold for export at the discretion
of the Secretary of the Treasury. It further provides that federal
reserve notes are to be redeemable in lawful money, that gold is
not to be coined, and that all gold coins in the possession of the
Government are to be melted into bars. In the event that the
weight of gold in the dollar should be reduced, the minimum reduction was to be forty per cent and the increase in the value of gold
held by the Government was to be treated as a miscellaneous receipt, out of which a $2,000,000,000 fund was to be set up for the
purpose of stabilizing the exchange value of the dollar; the Secretary of the Treasury, with the approval of the President, might
"deal in gold and foreign exchange and such other instruments of
credit and securities as he may deem necessary to carry out the
purposes" of the fund. The Secretary may, with the approval of
the President, invest in direct obligations of the United States any
portions of the fund not currently required for stabilization.
In accordance with this act the reserve banks and federal reserve agents turned over to the Government all gold coin and
bullion, holding so much of it as physically was in their possession
in joint custody for the Treasurer of the United States pending his
call for delivery, and in return received credits payable in gold
certificates.
Reduction The President, in a proclamation dated January 31,
in gold
reduced the weight of the gold dollar from 25.8 to
content of 15 5/21 grains, nine-tenths fine. This was a reduction
the dollar of nearly 41 per cent. The purchase price of the
mints for gold from natural deposits, scrap gold and
imported gold was raised to $35 per fine troy ounce, less mint and
handling charges. While this change had no effect upon the immediate position of the reserve banks, since all gold had been
turned over to the Treasury, it supplied the Treasury with approxi-




29

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
mately $2,800,000,000 which could be used to set up the stabilization fund and still leave a very considerable balance for other uses.
Silver
Purchase Act

The Silver Purchase Act, approved June 19, stated
in part: "It is hereby declared to be the policy of
the United States that the proportion of silver to
gold in the monetary stocks of the United States should be increased, with the ultimate objective of having and maintaining,
one fourth of the monetary value of such stocks in silver". To
this end the Secretary of the Treasury is "authorized and directed"
to buy silver at home and abroad at prices not exceeding the monetary value, which now is approximately $1.29 an ounce, although
no more than 50 cents an ounce can be paid for silver located in the
continental United States on May 1, 1934. Silver certificates are
to be issued in a face amount not less than the cost of the silver so
purchased.
Another section of the Act authorized the President to require
the delivery of silver to the mints. In consequence, the executive
proclamation of August 9 ordered the delivery of silver situated in
the continental United Statas with certain exceptions, among which
were coins and fabricated articles; silver so turned in was paid
for at the rate of 50+ cents a fine troy ounce, which was the monetary value less seigniorage and other charges aggregating 61% 5
per cent. The acquisition, importation and exportation of silver
are subject to regulation by the Secretary of the Treasury, as in
the case of gold.
Deposit
Section 12B of the Federal Reserve Act, which proinsurance vided for the insurance of bank deposits, was amended
by an act approved June 16, 1934. This amendment
increased the amount coverable by insurance from $2,500 to $5,000
for each deposit account, extended the operations of the temporary
insurance fund for one year to July 1, 1935, and prolonged the
time in which nonmember banks may avail themselves of deposit
insurance under the act for one year to July 1, 1937.
Foreign
Over most of the year foreign exchange transactions
exchange
were subjected to the control instituted in March
transactions 1933, under which licenses were required for all
foreign exchange transactions and transfers of funds
except those covering normal commercial or business requirements, reasonable traveling expenses and other personal needs,




30

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
or the fulfilment of legally enforceable obligations incurred prior
to March 6, 1933. In actual practice amounts of $100 or less
were presumed to be for legitimate purposes and no license was
needed.
In a regulation dated November 12, 1934, the Secretary of the
Treasury granted a general license for "transactions in foreign
exchange, transfers of credit, and exports of currency (other than
gold certificates) and silver coin", unless "prohibited by any other
order or by any law, ruling, or regulation". Under earlier regulations dealers in foreign exchange were required to make daily
reports to the Federal Reserve Bank. The later ruling extended
the requirement of reports to all those who handled foreign transactions ; banks, bankers, and brokers and dealers in securities must
report weekly and certain exporters, importers and industrial companies doing business abroad monthly, except that no reports are
required of those who do not carry accounts abroad or have domestic accounts for non-residents and those who do not have transactions exceeding $5,000 in any seven-day period.
Securities
The Securities Exchange Act of 1934, approved
Exchange Act June 6, provided for the registration of securities
exchanges and of securities to be dealt in on such
exchanges, as well as for the supervision of their operations and
those of their members by a commission.
In its seventh section the act permits members of such exchanges and brokers and dealers to extend credit on registered
securities (other than exempted securities) only when in accordance with rules and regulations issued by the Federal Reserve
Board, which is charged with the duty of issuing such regulations.
Section 8a provides that in their capacity as brokers and dealers
they can borrow on registered securities (other than exempted
securities) only from member banks of the federal reserve system,
or from nonmembers that have filed agreements with the Board,
or from one another only when in conformity with the rules prescribed by it.
In September the Federal Reserve Board issued Regulation T,
effective October 1, to cover transactions of the kinds described
in the act, and subsequently made numerous rulings to cover many
specific points. Regarding this regulation, the Board stated in its
October Bulletin: "The regulation places no restrictions on loans
for industrial, agricultural or commercial purposes, nor does it




31




INDUSTF
PHILADELPHIA FE[

KEY:
^ DIVERSIFIED
— DISTRICT BOUNDARY

3 BITUMINOUS
1 ANTHRACITI

— AREA BOUNDARY

1 CRUDE OIL
3 AGRICULTUF

•

CITY DESIGNATING AREA

AREAS
RESERVE DISTRICT




Twentieth Annual Report, Federal Reserve Bank of Philadelphia

apply to loans by banks. Restrictions to be imposed under the
Securities Exchange Act of 1934 on security loans by banks are
being studied by the Board in connection with other laws regulating the activities of banks, and regulations on the subject will be
issued by the Board at a later date". In an earlier statement the
Board said: "Insofar as banks are concerned, the Federal Reserve
Board's authority under this act relates to loans made for the purpose of purchasing or carrying securities registered on national
securities exchanges. It does not apply, therefore, to loans made
solely for industrial, agricultural, or commercial purposes, regardless of the question whether these loans are secured or unsecured,
and, if secured, regardless of the character of the collateral. The
determining factor is the purpose of the loan and not the nature
of the security offered".
Reserve bank credit
The earning assets of this bank averaged 179 millions in 1934.
Although this was a reduction from the exceptional figures of
190 and 196 millions in 1932 and 1933, respectively, it was much
Bill and security holdBills
ings
(000,000's omitted)
discounted
F. R. Bk. of Phila.
Annual averages:
1927
1928
1929
1930
1931
1932
1933
1934
Monthly averages:
1933—December. . .
1934—January
February....
March
April
May
June
July
August
September.. .
October
November...
December. . .

Bills
bought

$42
75
89
29
42
73
45
10

$18
25
13
4
5
4
4
2

26
24
20
17
14
12
8
6
5
5
2
1
1

7
7
5
2
1
1
1
1
1
1
1
1
1

* Includes foreign loans on gold.




Industrial U.S.
Other
advances securities securities* Totals

—

•

—

—

—

—

—

t
—
—
—
—
—
.
—
—
t
t
t
1
2

$29
26
20
49
53
111
146
167
167
167
167
167
167
167
167
167
167
167
167
167
167

f Less than $1,000,000.

34

$1

t

1
1
2

2

1

t
t
t
1

1

1

t
t
t
t
t
t
0

126
123
83
102
190
196
179
200
199
192
187
183
180
176
174
173
173
170
170
171

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

BILL AND SECURITY HOLDINGS
FEDERAL RESERVE BANK OF PHILADELPHIA
MILLIONS

1

tOTAL

1 ^
1

250

200

^

150

- U

i

—

—

s. SECURITIES-

100

• BILLS
• DISCOUNTED
50
'*"••.

BILLS BOUGHT

1932

1933

1934

greater than in most years of the bank's history. United States
securities made up the bulk of the investment in bills and securities; 167 millions, representing principally our participation in
federal reserve system holdings of such securities, was held almost
continuously throughout the year. The average was 21 millions
above that in 1933 and was the highest on record.
At the opening of the year the bank had about 25 millions of
bills discounted; from this point there was a rather steady decline
to about three quarters of a million dollars in the middle of November, and at the end of 1934 the amount was one million dollars.
These figures include bills secured by collateral which is not eligible
for1 discount or purchase; such bills, acquired under the provisions
of section 10b of the Federal Reserve Act, declined from nearly 2
millions on January 1st to $163,000 on December 31. The opera-




35

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
tion of section 10b was extended by Presidential proclamation for
one year from March 3, 1934. No bills were discounted for individuals, partnerships and corporations (other than banks) under
section 13 of the act, or for nonmember banks. During the year
the act was amended to permit the reserve banks to make advances
to member banks on their notes secured by bonds of the Federal
Farm Mortgage Corporation or by bonds issued under section 4(c)
of the Home Owners Loan Act, and to buy and sell such securities
if maturities did not exceed six months.
Nearly 8 millions of purchased bills were held at the beginning of the year, reflecting chiefly participation in the holdings of
the system, but by the middle of May the only purchased bills on
hand were about half a million dollars of foreign paper. Local purchases of $150,000 were made in January.
Industrial Included in the earning assets of the bank were indusloans
trial loans made under Section 13b, an amendment to
the Federal Reserve Act approved June 19, 1934. Under the terms of this section the reserve banks may, pursuant to
authority granted by the Federal Reserve Board, make credit available to established industrial and commercial businesses for working capital purposes on a reasonable and sound basis with maturities not exceeding five years. The reserve banks also may discount
for, or purchase from, financing institutions, obligations incurred
for working capital, or lend on the security of the same; and as
well, make commitments to discount or purchase such obligations
at a future date. In all these cases the member bank or other
financing institution must either take at least 20 per cent of the
loan, or, if it desires the reserve bank to take it all, must make itself
responsible for at least 20 per cent of any loss which the reserve
bank may eventually suffer. In exceptional circumstances, where a
business concern is unable to obtain the necessary credit on a reasonable basis through the usual sources, the reserve bank may deal
directly with the prospective borrower.
Under the law and regulations of the Board, this bank is
authorized to make working capital loans in the approximate
amount of $28,000,000. Of this amount, $13,352,000 represents its
surplus as of July 1, 1934 and $14,620,000 the amount which the
Secretary of the Treasury is authorized, under such rules and
regulations as he may prescribe, to pay to this bank when and as




36

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

such loans are actually made. This latter amount represents the
par value of the stock of the Federal Deposit Insurance Corporation purchased and held by this bank pursuant to the requirements
of law. This stock is now held by this bank unencumbered, subject
to liens in favor of the United States to the extent of amounts
reimbursed by the Secretary of the Treasury as just referred to.
The arrangement between the Secretary of the Treasury and this
bank is covered by an agreement entered into pursuant to the regulations issued by the Secretary under date of August 15, 1934. As
of the close of the year, the Secretary had reimbursed this bank in
the sum of approximately 11,050,000, which amount is carried in
the bank's statement under the heading "Surplus—Section 13b".
Toward the close of June, the Federal Reserve Board issued
Regulation S relating to loans to provide working capital for industrial and commercial businesses and authorized the reserve
banks, in appropriate circumstances, to make direct loans to applicants. This was followed shortly by the appointment of a local
Industrial Advisory Committee which, under the law, was to be
set up in each reserve district to examine and consider applications and make recommendations regarding them to the reserve
bank. The membership of the committee appointed in this district
follows:
Charles E. Brinley
President—American Pulley Co.
Philadelphia, Pa.
J. Ebert Butterworth (Chairman)
Vice-President—H. W. Butterworth & Sons Co.
Philadelphia, Pa.
John S. Chipman
President—Chipman Knitting Mills
Easton, Pa.
W. F. R. Murrie*
President—Hershey Chocolate Co.
Hershey, Pa.
Richard D. Woodf
President—Millville Manufacturing Co.
Millville, N. J., and Philadelphia, Pa.
* Resigned — succeeded by H. W. Prentis, Jr.,
President — Armstrong Cork Co.,
Lancaster, Pa.
f Resigned near end of year. Vacancy not filled by end of year.
37



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

The committee members have given most freely of their time
in reviewing the many applications that have come before us. This
service, tendered without compensation, is deserving of the highest
praise.
During the year, four meetings were held by this bank at which
its officers discussed with the representatives of the various banks
throughout the district the provisions of the law relating to working capital loans and the work done by the Industrial Advisory
Committee and this bank in connection therewith. Two of the
meetings were held in Philadelphia and one each in Williamsport
and Altoona. A regular meeting of Group 3 of the Pennsylvania
Bankers' Association also was addressed on this subject by an
officer of this bank.
Numerous applications were received, but many had to be
disapproved because they failed to conform to the "reasonable and
sound" standard set by the act, as manifested in unsatisfactory
financial condition, doubtful earning prospects, or lack of adequate
security where deemed necessary. Some also were withdrawn
voluntarily before final action could be taken. The number of loans
and commitments approved in 1934 was 67 for a total amount of
$6,338,000; actual advances up to and including December 31 were
$3,509,000,* of which $48,000* had been repaid.
Changes in the supply of bank funds
Changes in the condition of banks during 1931, 1932 and 1933
caused substantial variations in their use of reserve bank credit.
In 1934 fluctuations in reserve bank credit were much less pronounced, owing to the fact that member banks held a large volume
of reserves in excess of requirements.
Reserve bank credit extended within the district declined 22
millions in the year. Bank borrowings decreased 24 millions and
there was a small decline in reserve bank float, but these reductions
were offset somewhat by 3 millions of advances made to provide
working capital for industry. The reduction in borrowings in
many individual cases can be traced directly to advances made by
the Reconstruction Finance Corporation to banks that were in the
hands of conservators and to purchases of preferred stock by the
corporation.
While borrowings from the reserve bank gradually were being
paid off, the banks accumulated excess reserves. From 129 mil* Including participations of financing institutions.
38



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

RESERVE BANK CREDIT AND FACTORS WHICH AFFECT IT
PHILADELPHIA FEDERAL RESERVE DISTRICT
MILLIONS

(changes cumulated from Jan. i, 1932 which is taken as zero)
RESERVE BANK CREDIT
EXTENDED IN DISTRICT

-

100

- 150
+ 350
+ 300
+ 250

COMMERCIAL AND FINANCIAL
- TRANSFERS (chiefly interdistrict) *

+ 200
+ 150
+ 100
+ 50
0
TREASURY OPERATIONS *
-

50

X

**.**"-"**•"•+*
-

100

- 150
-200

1932

1933

1934

* AN INCREASE IN THE AMOUNT TENDS TO REDUCE DEMAND FOR RESERVE BANK CREDIT AND VICE VERSA
* AN INCREASE IN THE AMOUNT TENDS TO INCREASE DEMAND FOR RESERVE BANK CREDIT AND VICE VERSA




39

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Reserve deposits of licensed
member banks
(000,000's omitted)
Philadelphia Fed. Res. District

1933—December.
1934—January..
February.
March....
April
May
June
July
August
September
October...
November
December.

Average reserves held
Banks in Banks
Phila- outside
delphia Phila.
$53
56
60
65
68
72
73
78
78
75
79
76
76

$68
78
87
128
123
124
133
140
120
115
119
122
128

Total

Excess reserves
Banks in Banks
Phila- outside Total
delphia Phila.

$121

$ 7

134
147
193
191
196
206
218
198
190
198
198
204

14
22
61
54
55
63
69
49
44
47
50
54

$10
13
15
20
22
25
25
30
30
27
29
26
26

$17
27
37
81
76
80
88
99
79
71
76
76
80

lions at the end of 1933 member bank reserve deposits rose to
217 millions in the middle of March. A recession to 176 millions
at the end of April followed, to be succeeded in turn by an advance
to the year's high point of 225 millions on July 9. Thereafter
figures on member bank reserves were somewhat lower, but on
December 31 they totaled over 211 millions, an advance of 82
millions in the year. Although a portion of the rise in such reserves was absorbed by an increase in deposits held by the banks,
Number of banks having —
Distribution of reserves
of member banks
Last half of Nov. 1934 Deficient
rePhila. Fed. Res. District
serves
Banks having net demand and time deposits of —
Less than $250,000
$250,000-$499,999
$500,000-$999,999
$l,000,000-$4,999,999. ..
$5,000,000 and over
Total n u m b e r . . . .

Reserves in excess of requirements

Total
number

0- 10.1- 2 0 . 1 - 3 0 . 1 - 4 0 . 1 - 5 0 . 1 - Over
10% 20% 30% 40% 50% 100% 100%

0
3
4
2
0

9
15
31
64
19

8
19
24
51
9

3
16
17
32
6

5
7
19
17
6

5
11
9
17
3

14
22
29
39
6

21
27
26
34
7

65
120
159
256
56

9*

138

111

74

54

45

110

115

656

* The deficiencies of the nine banks aggregated less than $10,000, only
requirements.
40



below

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

the greater part represented the development of substantial excesses above requirements. Excess reserves appear to have been
rather widely distributed, as the accompanying tables show. In
December the aggregate reserves of Philadelphia banks on the
average were 74 per cent above the amounts stipulated by law,
and the excess in the case of the country banks also was large—
51 per cent.
The accompanying table shows the sources from which the
banks obtained the funds to reduce their dependence upon reserve
bank credit and to add so heavily to reserve deposits. Currency
demand as given in the table does not indicate exact changes in
the amount of money circulating within the district, but measures
the extent to which the banks have received more or less currency
from this bank and the Treasury than they have returned.
It will be observed that currency demand changed little in
1934, and consequently had little influence on the level of member
bank reserves. It also appears that commercial and financial
transfers resulted in a loss of funds to the banks, which would
reduce bank reserves if not compensated for by other changes.
The decline in the unexpended capital funds of this bank, moreover, had little direct effect on bank reserves as it was due mainly
to the payment of 14 Va millions to the Federal Deposit Insurance
Corporation for stock as provided in the law. The outstanding
Analysis of Factors Affecting the Demand for Reserve Bank Credit
Philadelphia Federal Reserve District
(000,000's omitted)
Sources of funds
Reserve bank credit extended in district
Commercial and financial transfers (chiefly interdistrict). .
Treasury operations
Total.
Uses of funds
Currency demand
Member bank reserve deposits
Nonmember deposits at reserve bank *. . .
Unexpended capital funds of reserve bank.
Total

1932

1933

- $ 79 -$23
+ 152 + 88
- 94 - 56
$ 91

+$ 9

-$ 20 -S
2 +
0 +
+ 1 -

1934

- $ 22
- 20
+ 104
+$ 62

5
8
9
3

+$ 2
+ 82
7
- 15

-$ 21 +$ 9

+$ 62

* Includes special deposits of member and nonmember banks held over part of 1933
and 1934.
41



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

factor tending to raise bank reserves was the operations of the
Treasury.
Treasury disbursements within the district were 104 millions
greater than local receipts. Receipts included income taxes, process taxes, the withdrawal of 132 millions from deposits that had
been set up in payment for new Government securities, 39 millions
of cash payments for such securities at time of issue and payments
for issues of agencies of the Government, the return to the Government of substantial amounts of postal savings funds for which
banks could not find profitable use, the payment of this bank for
F. D. I. C. stock noted above, as well as many miscellaneous sources
of revenue. Government payments were much heavier than in
1933, including not only redemptions of maturing securities and
payment of interest on indebtedness as well as pensions and other
routine expeditures, but also large amounts for public works and
relief, loans to railroads, purchases of preferred stocks of banks
and other items not to be found in the expenditures of more normal years. In the early part of the year receipts continued to
exceed disbursements, conforming to tendencies to be found in
earlier years, but thereafter the balance was heavily the other way,
as the chart on page 39 shows.
A reversal of trend also was evident in the figures which are
designated in the table as "Commercial and financial transfers
(chiefly interdistrict)". These figures include chiefly transfers of
funds to and from other districts, excluding transactions for the
account of this bank or the Treasury, and mint purchases of
gold from the public. Funds disbursed through mint payments
for gold were more than balanced by a loss of funds to the banks
of 36 millions through interdistrict operations. Ordinarily these
transfers, which arise out of transactions of many kinds, result in
a substantial gain to the district, which may be explained partly
by the fact that the banks usually sell a portion of the new Treasury securities allotted to them to individuals and concerns in the
New York District.
In the first quarter of 1934 the district had a distinctly favorable balance in the interdistrict settlements, no small portion being
ascribable to the sale of bonds by the State of Pennsylvania to New
York firms for the purpose of obtaining funds to pay a soldiers'
bonus. Thereafter there was a rather steady array of unfavorable
settlement balances till late in the year, more than offsetting the
gains in the first three months. It is noteworthy that these losses




42

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
of funds in commercial and financial transactions were accompanied
by substantial excesses of local Treasury disbursements over receipts. Possibly recipients of Treasury funds had to make large
payments to other sections of the country for materials and services
necessary for construction programs. Relief funds allotted to
Pennsylvania and New Jersey and disbursed here doubtless were
transferred in part to sections of those states located in other districts. Other factors contributing to the adverse settlement balances may have been purchases of miscellaneous securities and
accumulation of balances in New York City as manifested in the
figures of the reporting member banks.
Reserve position
The ratio of total cash reserves to the federal reserve note
and deposit liabilities, generally known as the "Reserve ratio" of
the bank, was 60.9 per cent at the opening of 1934. Following a
decline to 59.8 per cent on January 19, it rose for nearly two
months, reaching 69.6 per cent on the 17th of March, the high
point of the year. This figure was approximately equalled in April.
Over the balance of the year the ratio fluctuated within a range
from 65.1 to 69.3 per cent and on December 31 was 67.2 per cent.
The 1934 average was 66.3 per cent, as against 60 per cent in
the previous year.
Cash reserves and total deposits moved in much the same
manner, as shown by the chart on page 44. Increases owing to
an inflow of funds in February and March were followed by some
recession in the latter part of April and a subsequent advance to
high points in July, with later figures at somewhat lower levels.
The increase in cash reserves in the year was 81 millions, of which
76 millions was in gold certificates or funds payable in such certificates. Analysis of the changes in gold certificates shows that
there was a loss of funds to the district in commercial and financial
transactions with other parts of the country and that nearly 14
millions was paid to the Treasury as a retirement fund for federal
reserve bank notes, but that these and other smaller losses were
much more than offset by amounts received from the Treasury.
The great bulk of Treasury transactions passes through its
deposits at the federal reserve banks, which now bear the caption:
"Deposits: U. S. Treasurer—general account." Government expenditures for the most part are made by checks payable at the
reserve banks. Inasmuch as these expenditures here during 1934




43

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

RESERVE POSITION
FEDERAL RESERVE BANK OF PHILADELPHIA
PERCENT

70
65
60

" \

wA

RESERVE RATIO

A

t

55

J

I

50
45
40
MILLIONS
%

CASH RESERVES

325
300

FED. RES. NOTES
IN CIRCULATION

275
250
225
200
175
150
125
100
1932




1933

44

934

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

were much greater than local receipts, the Government, to maintain its deposit balance, transferred large sums from other sections of the country and also made direct deposits of substantial
amount in the gold settlement fund for credit to this bank.

Reserve position
(000,000's omitted in dollar figures)
Federal Reserve Bank of Phila.

Total
deposits

Fed. res.
note circulation

Total
reserves

Reserve
ratio

$124
135
205

$252
246
243

$224
228
297

59.6%
60.0 "
66.3 •

140
155
162
211
215
215
224
230
209
203
206
206
215

236
231
234
238
244
248
249
250
248
245
240
240
244

232
234
250
306
309
310
322
328
303
295
296
295
309

61.7 »
60.6 "
63.1 "
68.2 "
67.4 "
66.8 "
68.0 "
68.3 "
66.4 "
65.9 "
66.4 "
66.2 "
67.2 "

Annual averages:
1932
1933
1934

Monthly averages
1933—December.
1934—January...
February..
March.. . .
April
May
June
July
August. . .
September
October...
November.
December.

Deposits at this bank averaged 205 millions in 1934, of which
approximately 191 millions was reserve deposits of member banks.
In the last ten months of 1933 special deposits of member and
nonmember banks were carried and were so designated in the
public statements of the bank. These balances, which represented
the redeposit of segregated balances subject to immediate withdrawal, amounted to 9 millions on January 1, 1934. They continued to decline and in April were merged with "Other deposits"
in published reports.
Condition of member banks
According to the latest information about 70 per cent of the
banking resources of all licensed banks in the district was held
by member banks. In the following table a summary is given of
the condition of all licensed member banks in the Third Federal
Reserve District at the end of the years 1933 and 1934:



45

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

ALL MEMBER BANKS
PHILADELPHIA FEDERAL RESERVE DISTRICT
(Call date figures; licensed banks only beginning June 30,1933)
MILLIONS

^ ^ ^ ^

TOTAL LOANS
AND INVESTMENTS

_

2400

TOTAL DEPOSITS

*

—

1600
LOANS TO CUSTOME RS

k

1200

INVESTMENTS AND
LOANS TO OPEN M ^RKET
800

CASH, RESERVES,
DUE FROM BANKS*
400

••——•

^

^

-

^

-

0
1932

1933

* Includes items in process of collection, exchanges for clearing houses, etc.




46

1934

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Licensed member banks
Philadelphia Federal Reserve District
(000,000's omitted)

Dec. 30,
1933

Dec. 31,
1934

Changes

ASSETS
Loans on securities:
To brokers and dealers in N. Y. City.
To brokers and dealers elsewhere....
To others

6
17
374

21
18
309

Total loans on securities
Commercial paper and bankers' acceptances.
Loans on real estate
Other loans

397
15
204
445

348
23
212
429

Total loans
United States Government securities
Securities fully guaranteed by U. S. Goverment.
Other securities

$1,061
464
5561

$1,012
505
62
606

{+ 112

Total loans and investments
Banking house, furniture and fixtures
Other real estate owned
Cash in vault
Reserve with Federal Reserve Bank
Balances due from other domestic and foreign banks
Checks and items in process of collection
Other assets

$2,081
86
43
32
127
128
64
52

$2,185
88
55
42
211
255
96
34

+$104
+ 2
+ 12
+ 10
+ 84
+ 127
+ 32
- 18

$2,613

$2,966

+$353

829
939
64
168

S 995
1.012
93
268

+$166
+ 73
+ 29
+ 100

Total assets.
LIABILITIES
Demand deposits
Time deposits
Government deposits
Due to banks (including Federal Reserve Bank). . .
Certified and officers' checks, cash letters of credit
and travelers' checks outstanding
Total deposits
National bank notes outstanding.
Bills payable and rediscounts:
With Federal Reserve Bank. . .
All other
Other liabilities
Capital account:
Preferred stock
Common stock
Surplus
Undivided profits—net
Reserves for contingencies

14

+ $ 15
+
1
- 65
-$ 49
+
8
+
8
- 16
-9 49

+ 4
1

+

6

+$374
2
- 12
9
6

$2,008
75
13
10
36

31
164
215
41
28

$2,613

,966

+ 30
+
2
- 14
+
1
- 11
+$353

606

Number of banks.

I
1
30

1
162
229
40
39

Total liabilities.

$2,382
73

656

+

50

It will be noted that the number of licensed members increased
from 606 to 656 in the course of the year. This was due principally to the organization of new institutions to succeed banks that




47

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

at the close of 1933 were operating under restrictions or were then
in liquidation or receivership; one additional new bank was organized and several others were added to the list of members from
the ranks of the nonmembers.
Of outstanding interest in the table is the sharp rise in
deposits. The increase was chiefly in the demand and due to
bank classifications; of the total increase of 374 millions, only about
53 millions can be accounted for by accessions to membership
referred to in the preceding paragraph.
Although the increase in deposits was accompanied by a rise
in earning assets, the inability of the banks to find acceptable use
for a large part of the growing volume of funds at their disposal
was evidenced by a material expansion in amounts due from banks
and an increase in reserves at the Federal Reserve Bank substantially in excess of that necessary under the law to support the
deposits. In this connection it also may be pointed out that postal
savings deposits held by these banks decreased in the year from
73 to 45 millions, reflecting in part at least the voluntary return
to the Government of funds for which the banks could not find a
sufficiently profitable use to warrant their retention.
The figures on loans and investments reveal a substantial
decline in loans to customers on securities. Loans to customers
without security collateral also decreased somewhat despite the
increase during the year in the number of active member banks.
There was an expansion of 23 millions in loans to the open
market, in which category loans on securities to New York City
brokers and dealers and bought commercial paper and bankers'
acceptances are included. Holdings of direct obligations of the
United States increased 41 millions, and the banks also acquired
substantial amounts of obligations fully guaranteed by the Government and other miscellaneous securities.
Currency demand
Changes in the demand for currency have presented no unusual features in the past year, as may be noted in the chart on
page 39. Following a post-holiday low in the latter part of January, there was a gradual rise to early summer, a decline in the
summer months, and the expected seasonal rise in connection with
the Christmas shopping period.
Over the first quarter there was little variation in the liability
of this bank for federal reserve bank notes in circulation. There-




48

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

after, the need for this currency having passed, the bank ceased
to pay out such notes. Several deposits aggregating nearly 14
millions were made in a retirement fund with the United States
Treasury and a sufficient amount of these notes also was retained
in the bank's possession to reduce its liability for the amount in
actual circulation to zero. The notes so held by the bank, however,
constitute a liability to the Treasurer of the United States to secure which 12 millions of United States securities have been
pledged.
Figures for the country show a decline of about 100 millions
in the amount of national bank notes in circulation during 1934.
The liability of licensed national banks in this district for outstanding notes declined from 75 millions at the end of 1933 to over 72
millions on December 31, 1934; a reduction from 14 to about 7
millions on the part of banks in Philadelphia was partly balanced
by a rise elsewhere in the district.
The total of outstanding silver certificates in the country increased about 200 millions in the year. Shipments of new notes
by the Treasury to this bank rose from 48 millions in 1933 to 70
millions in 1934, and the bank's payments of new and fit currency
of this kind increased from 97 to 128 millions.
Federal reserve notes have continued to be the largest single
element in the currency supply. At the end of the year national
figures show that 62 per cent of all paper currency in circulation
was federal reserve notes, as compared with 16 per cent for national bank notes and 12 per cent for silver certificates, the next
most important varieties of currency. Issues of new and fit federal reserve notes to this bank aggregated 129 millions in 1934;
in 1933 such issues, together with those of federal reserve bank
notes, amounted to 188 millions, reflecting extreme demands for
money in the early part of that year.
With a decline in member bank borrowings and an increase
in gold certificates held by this bank, a greater proportion of the
collateral pledged to secure federal reserve notes took the form of
gold certificates. United States securities also continued to make
up part of the collateral; the largest volume of these securities
pledged was 62 millions early in the year and the lowest was 15
millions in March, contrasting with high and low points of 88
millions and 27 millions, respectively, in 1933. The privilege of
pledging such securities against federal reserve note issues terminated in March of this year; legislation in that month extended it
to March 3, 1935 and gave to the President the power to continue




49

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

it for a further period not exceeding two years.
A statement follows which shows federal reserve notes outstanding and the collateral held to secure them at the end of each
of the past three years:

Federal reserve note issues and collateral
(000's omitted)
Federal Reserve Bank of Phila.
Notes received from comptroller
Notes on hand (held by Federal Reserve Agent)
Notes issued to bank (outstanding)
Collateral held to secure outstanding notes:
Gold certificates on hand and due from U. S.
Treasury
Gold
Eligible paper
United States Government securities
Total collateral held

December 31
1932

1933

1934

$353,179
101,790

$394,621
145,440

$394,661
132,340

$251,389

$249,181

$262,321

$72,000
80,000
47,463
52,000

$86,750
83,750
18,930
60,000

$223,000
0
830
40,000

$251,463

$249,430

$263,830

Discount and interest rates
Open market rates for prime commercial paper as quoted at
New York declined from H/2 to %-l per cent in 1934, and the
offering rate for ninety-day bankers' acceptances from V2 to %
of one per cent. Reports received from some of the larger member banks in Philadelphia also show a decrease in rates on prime
commercial loans to local customers from an average of about
4V2 P e r c e n t m the last quarter of 1933 to a little over 4 per cent
in the last three months of the current year.
This bank's established rate of discount for advances to and
rediscounts for member banks under sections 13 and 13a of the
Federal Reserve Act was unchanged at 2!/2 per cent, at which it
was set in November 1933 and which was the lowest ever established here. No changes were made in discount rates on the following classes of paper:
Advances to member banks under sec. 10 (b) of the Federal Reserve Act—(notes
of member banks secured by collateral which is not eligible under other sections
of the act)
4%
Discounts for individuals, partnerships and corporations:
Under third paragraph of sec. 13 of Federal Reserve Act—(paper which would
be eligible for rediscount if presented by a member bank)
6%
Secured by direct obligations of the United States, under last paragraph of sec.
13 of Federal Reserve Act
4%
50



Twentieth Annual Report, Federal Reserve Bank of Philadelphia
In the case of industrial loans, interest rates for direct advances to industrial or commercial organizations ranged from 4
to 6 per cent; advances to financing institutions bore a rate of
one per cent above the prevailing discount rate on that portion
of the loan for which the institution is obligated, while on the remainder the rate was the same as that originally charged the
customer but not less than 4 per cent.
Rates on
The Banking Act of 1933 forbade member banks
bank deposits to pay interest on demand deposits with certain
minor exceptions and provided that the Federal
Reserve Board should limit the rate to be paid on time deposits.
In Regulation Q, approved August 29, 1933, the Board set a maximum of 3 per cent for time and savings deposits, effective November 1, 1933, unless a contract entered into prior to June 16*
still was in effect and could not be set aside.
In view of the low return afforded by suitable investments,
many bankers in this district felt that 3 per cent was too high a
rate to pay on time deposits. Some banks paid lower rates, while
others who wished to do so were deterred from taking such action
by the fear that deposits might be attracted to neighboring or
competing banks. In the endeavor therefore to determine whether
or not some kind of uniform district action could be taken on the
rate question, a small group of bank officials asked this bank to
call a meeting of representatives of all banking institutions in
this federal reserve district. Pursuant to this request, an invitation was extended to them to gather in Philadelphia on July 12
to discuss the general subject of the adoption of uniform interest
rates on time deposits. The bank assumed no responsibility for
the meeting or for the program.
At the meeting, which was attended by over 700 bankers from
all parts of the district, it was decided to take a ballot by mail of
all banks in the district, member and nonmember, on several tentative resolutions and memorials that had been presented for adoption and concerning which there were pronounced differences of
opinion. These proposals, to be addressed to various Governmental agencies, among other things called for the reduction to 21/2
per cent of the maximum rate of interest to be paid on time deposits by banks in this district, the establishment of varying maxima according to the class of time deposits, the abolition or
modification of the postal savings system, and the establishment
* The date on which the Banking Act of 1933 was approved.
51



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

of a committee on banking relations between federal and state
governmental agencies and all banking institutions of the Third
Federal Reserve District.
In the subsequent balloting by mail all of the proposals were
carried. Copies of the resolutions and memorials were forwarded
to the appropriate Government agencies and a committee on banking relations was appointed.
On December 15 the Federal Reserve Board revised Regulation Q, relating to the payment of interest on deposits, to the
effect that after January 31, 1935 no member bank may pay more
than 2Y2 per cent on time or savings deposits.
Bankers' acceptances
At the end of 1934 outstanding acceptances of banks in this
district amounted to $12,287,000, a decline of 21 per cent in the
year, according to figures of the American Acceptance Council.
About half of the total was in bills covering import transactions
and one quarter in those based on domestic warehouse credits.
These two classifications showed relatively small contractions in
the year; export bills, however, decreased 72 per cent and now
constitute only about 5 per cent of the outstanding bills of local
banks as compared with over 13 per cent at the close of 1933.

Bankers' acceptances
outstanding

Acceptances of banks in
Third Fed. Res. District
Dec. 30, 1933

Based on—
Imports
Exports
Domestic shipments
Domestic warehouse credits. . .
Dollar exchange
Goods stored in or shipped be
tween foreign countries

Total

Dec. 31, 1934

$6,707,000
2,078,000
1,487,000
3,328,000
0

$6,095,000

Changes in year
Third
District

United

States

1,007,000
3,276,000
0

- 9%
-72 "
-32"
— 2"
0

— 5 /u
-32 "
-46"
-29 "
-40"

1,896,000

1,319,000

-30"

-35"

$15,496,000

$12,287,000

590,000

-21%

-29%

Changes in membership
At the end of 1933 there were 658 member banks in this
district, but only 606 of these were operating without restrictions.
Changes in 1934 were numerous, reflecting for the most part the




52

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

working out of difficulties involved in the reopening of restricted
banks. Although in some cases it was not found feasible to effect
a satisfactory plan of reorganization, in most instances this was
made possible by the provision of new capital in the form of cash
or through voluntary reductions in the amounts of depositors'
claims.
Of the 52 restricted banks at the beginning of the year, 35
were succeeded by new banks, 3 were licensed, 3 withdrew from
membership, and 11 were placed in receivership. In a number of
cases, too, banks that were in liquidation or receivership at the
end of 1933 were succeeded by new institutions. On December 31,
1934 the number of member banks in this district was 656, all
of which were in active operation.
Changes in membership during 1934 are given in detail in
the following table:
Changes in membership—1934
Philadelphia Fed. Res. District

National
banks

State bank
members

Total

Membership *—Dec. 31, 1933
Gains in 1934—
New banks succeeding banks operating
under restrictions
New banks succeeding banks in liquidation or receivership
New organizations
Converted from nonmembers
New state bank members

594

64

658

28

2

30

15
1
2
0

0
0
0
2

15
1
2
2

46

4

50

32
11
2

3
0
0

35
11
2

0

3

3

0

1

1

45

7

52

595

61

656

Losses in 1934—
Restricted banks succeeded by new banks.
Restricted banks placed in receivership. . .
Banks absorbed by member banks
Withdrawal of restricted banks from
system
Withdrawal of unrestricted bank from
system

Membership f—Dec. 31, 1934

* Included 46 national and 6 state institutions operating under restrictions; excluded
non-licensed national banks which, at the end of the year, were being liquidated by
conservators.
t All members on Dec. 31, 1934 were in active operation.
Note: Figures on gains and losses given in table do not include one licensed bank
that was reorganized.
53



Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Fiduciary powers

The number of licensed national banks in this district having
the privilege of exercising fiduciary powers declined in 1934 from
272 to 257. Original grants of full powers were made to five banks
and in two other instances banks were given the right to exercise
full powers under certain restrictions. On the other hand, two
banks voluntarily surrendered their privileges and twenty others
were removed from the list because of liquidation or receivership.
Of the 257 banks having fiduciary powers at the end of the year,
201 were in Pennsylvania, 46 in New Jersey and 10 in Delaware.
National banks having fiduciary powers
Philadelphia Fed. Res. District
December 31:
1929. .
1930
1931
1932
1933
1934

Number of banks having
Totals
Full powers

Partial powers

262
268
264
262
252
240 f

30
29
25
23
20

292
297
289
285
272*

17

257

* Excludes 7 non-licensed banks which, at the end of 1933, were being liquidated
by conservators.
t Includes two banks granted powers with restrictions.

Departmental operations
In 1934 there was a decline in the volume of discounts for
member banks, and the number of transfers of funds and of collection items handled (other than Government coupons) also fell
off, while in several other departments an expanded volume was
reported.
Although the further development of group clearings systems
and direct sendings of checks by member banks to other districts,
procedures instituted to save time in the collection of checks, tend
to reduce the number sent to this bank, the number of transit checks
handled increased from 57,265,000 in 1933 to 61,524,000 in 1934.
Group clearings plans place a heavier burden on the accounting
department which, upon advice of interbank sendings, arranges
for the settlement of the debits and credits in the accounts of the
participating banks.
There was a further substantial increase in the use of the
reserve bank's facilities for the custody of securities. The average



54

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Departmental operations
Federal Reserve Bank of Philadelphia
(000's omitted)

1931

1932

1933

Number of pieces or transactions handled:
78
Notes and bills discounted
!
68
161
Notes (currency) counted
! 199,377 179,004 164,556
308,220 291,563 264,069
Coins counted
Ordinary checks handled (including return
70,134 63,154 57,265f
items)
2,130
2,054
2,261
U. S. Gov't checks handled
Items payable at a future date (collection
items):
1,378
1,361
1,356
United States coupons paid
548
594
476
All other items
122
116
96
Transfers of funds
U. S. Gov't direct obligations—issues, redemptions and exchanges by fiscal
187
agency department
80
73

1934

13
177,718
264,018
61,524
4,915
1,482
373
83
292

f Revised.

amount held for member banks increased from $326,000,000 in
1933 to $396,000,000 in 1934. Cash and securities held in the
vault for our own account, the Treasury and others shows an expansion in average holdings from $826,000,000 to $969,000,000.
The vault department reports that 543,000 coupons were detached
in the past year.
An increase in work performed also is reported by the securities department. Purchases and sales handled for other than the
bank's own account increased from $122,000,000 to $280,000,000
and the number of transactions rose from 16,700 to 24,200.
Fiscal agency activities were materially heavier than in 1933,
as may be gauged by the fact that the number of United States
securities issued, redeemed or exchanged expanded from 187,000
in 1933 to 292,000 in 1934, the number of Government checks
handled from 2,261,000 to 4,915,000, and the number of Government coupons paid from 1,378,000 to 1,482,000.
Subscriptions from this district for Treasury bonds, notes
and certificates of indebtedness totaled 1,248 millions in 1934 and
295 millions was allotted. As several issues were made only on
the basis of an exchange for outstanding securities, it is not surprising to find that 104 millions of the allotments were for exchanges ; of the balance, 32 millions was paid for in cash and 159
millions by deposit credit. In addition the banks were allotted
7*/2 millions of Treasury bills and portions of the new obligations
of the Federal Farm Mortgage Corporation and the Home Owners'
Loan Corporation.




55

Twentieth Annual Report, Federal Reserve Bank of Philadelphia
Bank relations
The Committee on Federal Reserve Relations, composed of representatives of the various banking groups
in this district, held a meeting here in October, which
also was attended by directors, officers and members
of the bank relations department of this bank.
After Richard L. Austin, chairman of the board of this bank,
had extended greetings to the bankers, an address was made by
Governor George W. Norris. Following his address the committee considered several subjects of special interest such as the
establishment of more uniform service charges, the group or county
clearings systems, the frequency of bank examinations, the rate
of interest on savings accounts, and the lack of uniformity with
regard to notice and withdrawal requirements in the case of thrift
accounts. The plan of operation followed in extending direct loans
to industry also was explained to them.
The committee passed a resolution requesting this bank to
make available to the banks a compilation of data on bank earnings and expenses. Accordingly, a study of member bank figures
during 1934 now is in progress and the results will be made available as early in 1935 as possible.

Committee
on Federal
Reserve
Relations

Other
meetings
held

In addition to several meetings called by the bank to
disseminate information regarding direct loans to industry, reference to which was made on page 38 of this
report, a meeting was held in December to which many
nearby banks were invited to send representatives. This was addressed by officials connected with the Federal Housing Administration, who explained the technique of making home modernization
loans and the operation of the Government guarantee on such loans.
In addition, detailed information in printed form was distributed
to the bankers so that they might have all the facts about these
loans and their advantages to both borrowers and lenders concretely before them for later perusal.
Bank
In 1934 the members of the bank relations department
relations
made 1,241 visits to member and nonmember banks
department in the district. Of the total 424 were classed as special visits, having as their purpose principally the extension of the group or county clearings systems to sections not
previously covered, as well as the straightening out of any difficul-




56

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

ties that may have arisen in the course of the bank's routine
operations.
The number of group clearings systems in operation was
raised from 16 to 20, the total number of participating banks from
323 to 636, and the amount of items interchanged by these banks
from $94,000,000 in 1933 to $306,000,000 in 1934. After pending
arrangements have been completed, all but a few sections of the
district will have this method of clearance in operation.

Personnel and building
Board of directors
Name

Class
Group 1
Group 2

A

Group 3
Group 1
Group 2

B

Group 3

(

1

Joseph Wayne, Jr., President,
Philadelphia National Bank,
Philadelphia, Pa.
George W. Reily, President,
Harrisburg National Bank,
Harrisburg, Pa.
J. B. Henning, President,
Wyoming National Bank,
Tunkhannock, Pa.
C. Frederick C. Stout, Member,
John R. Evans & Company,
Philadelphia, Pa.
Arthur W. Sewall, President,
General Asphalt Company,
Philadelphia, Pa.
J. Carl De La Cour, Vice President,
Wm. S. Scull Company,
Camden, N. J.
Richard L. Austin,
Chairman of the Board
Alba B. Johnson,
Deputy Chairman of the Board
Harry L. Cannon

Residence

Term exDires

Philadelphia, Pa.

Dec. 31, 1935

Harrisburg, Pa.

Dec. 31, 1936

Tunkhannock, Pa.

Dec. 31, 1934

Ardmore, Pa.

Dec. 31, 1934

Philadelphia, Pa.

Dec. 31, 1935

Riverton, N. J.

Dec. 31, 1936

Philadelphia, Pa.

Dec. 31, 1935

Rosemont, Pa.

Dec. 31, 1936

Bridgeville, Del.

Dec. 31, 1934

Effective February 7, John C. Cosgrove resigned as a class A
director representing group 3 banks. Three eligible candidates
were nominated to fill the vacancy and at the succeeding special
election John B. Henning, president of the Wyoming National Bank
of Tunkhannock, Pennsylvania, was chosen for the balance of Mr.
Cosgrove's term.
The terms of C. Frederick C. Stout, a class B director representing the banks of group 1, and of Mr. Henning expired at the
end of December. Mr. Stout and Mr. Henning were re-elected for
terms of three years beginning January 1, 1935. The Federal Re57



Twentieth Annual Report, Federal Reserve Bank of Philadelphia

serve Board reappointed Harry L. Cannon as a Class C director
for a like term.
The Federal Reserve Board appointed Richard L. Austin as
chairman of the board and federal reserve agent, and Arthur E.
Post and Ernest C. Hill as assistant federal reserve agents for the
year 1934.
Howard A. Loeb, chairman of the board of the Tradesmens
National Bank and Trust Company of Philadelphia, represented
the bank on the Federal Advisory Council during 1934, a position
which he has held since 1930.
The board of directors, at the annual meeting, appointed the
following officers: governor—George W. Norris; deputy governors
—William H. Hutt, John S. Sinclair; cashier and secretary—C. A.
Mcllhenny; assistant cashiers—W. J. Davis, J. M. Toy, R. M.
Miller, Jr., S. R. Earl; comptroller—William G. McCreedy. In
April the title of Mr. Mcllhenny was extended to include that of
deputy governor, W. J. Davis and L. E. Donaldson were made
assistant deputy governors, and G. K. Morris was made an assistant cashier.
The death of Robert M. Miller, Jr., an assistant cashier, on
December 3, brought real sorrow to his associates in the bank, most
of whom had known him for many years. The following minute
was adopted by the board of directors:
The Board of Directors of the Federal Reserve Bank of Philadelphia has learned
with deep regret of the sudden death of Mr. Robert M. Miller, Jr., Assistant Cashier.
In his fifteen years of service as an officer of the bank, Mr. Miller was called upon
to oversee and direct the operations of a number of important departments, and to
perform many services calling for a high degree of industry, patience and judgment.
All of these services he rendered in a way to earn the high regard of his fellow officers,
of his subordinates and of the customers of the bank.
The Board desires to record its sense of the loss which the bank has suffered in his
death, and to extend to his family its sympathy in their bereavement.

The number of employees, exclusive of officers, rose from 850
to 866 during 1934.
The bank occupied quarters in that portion of the new building erected to the west of the old structure. The old building is
being razed preparatory to replacing it by a new building.

Banking and business information
This bank has continued to collect, analyze and issue economic
and statistical information on business and banking conditions in
this district. Cooperation from industry and trade has been as generous as in the previous years, evidencing the continuance of friendly



58

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

and confidential relationship established between business and this
bank over a period of years. It is gratifying to report this fact and
to express our appreciation of the steady assistance given to us by
business enterprises of this district.
Efforts have been made on our part to acquire and develop dependable information on current activity in most of the important
branches of business throughout this district in order to obtain accurate measurements of the rate at which goods are being produced
and marketed and the extent to which our working population is
employed and earning a livelihood. We are receiving at present approximately 4000 reports from various establishments, giving us
monthly their confidential data on business conditions. On the basis
of this information, together with figures received from the official
agencies, our statistical department has been able to construct and
develop over 175 individual series of index numbers and to determine the extent of seasonal fluctuation in many lines of industry
and trade. The active statistical files at present contain about 400
record cards which are kept up to date monthly, and many of them
on a weekly and even daily basis. Most of these records extend back
to 1923. This accumulation of statistical data has made it possible
for us to furnish accurate information on current changes and
trends in business activity to the Federal Reserve Board, directors
and officers of this bank, cooperating enterprises and business as
well as other agencies.
Numerous studies and developments in the statistical data have
been made during 1934 in addition to the usual work of the collection,
analysis and presentation of current information. Figures on factory employment and payrolls in this section have been adjusted
further to the level shown by the biennial Census of Manufactures
in order to account for such changes as those which arise from new
establishments coming into the market and old ones going out of
business for one reason or another. To determine the extent to
which manufacturing fluctuates from one season to another, statistical factors have been computed for factory employment in 68
industries of Pennsylvania and indexes have been adjusted by these
seasonal factors; the results will be published as soon as possible
since there appears to be a considerable demand for these figures,
particularly in connection with the study of unemployment and
stabilization of labor.
Special industrial surveys have been made continuously since
June this year for the use of the Industrial Advisory and Discount



59

Twentieth Annual Report. Federal Reserve Bank of Philadelphia

Committees incident to the consideration of loans for working capital to established industrial and commercial enterprises in this district under section 13b of the Federal Reserve Act as amended by
the Act of June 19,1934.
At the request of the Federal Reserve Board, unusually extensive statistics were collected from member banks, which cooperated
most generously, on such important subjects as deposits, debits to
individual accounts, new loans, loans paid off, and loans written off
by banks. The report forms used by the weekly reporting member
banks have been revised and expanded in order to obtain more detailed classifications of loans, investments, deposits and other items
than have been rendered heretofore. A study of earnings and expenses of member banks also was undertaken toward the end of
the year and carried into 1935.
Confidence in our reports is evidenced by the constant requests
for economic and statistical information from banks and business
establishments. Requests have been especially numerous for statistical data showing changes in production, trade, agriculture, employment, earnings, and banking conditions not only for the district
as a whole but also by industrial areas. We have continued to supply
industry and commerce with a comprehensive summary of business
conditions monthly through our bulletin, The Business Review, in
addition to furnishing advance releases on such subjects as industrial employment, retail and wholesale trade, and the output and
consumption of electric power. The following shows our active
mailing list, indicating the extent and character of the monthly
distribution of The Business Review:
Industrial and trade concerns
Banks in this district
Colleges and Universities
Trade organizations
Individuals
Foreign (mostly banks)

5,098
962
100
75
690
280

Total

7,205

The library continues to serve the staff of the bank, member
banks and others by making available to them several thousand
volumes on finance and business, as well as official documents and
other source material.




60

Twentieth

Annual

Report,

Federal Reserve Bank

of Philadelphia

Indexes of business conditions
Philadelphia Federal Reserve District
Adjusted for seasonal variation
(1923-1925 average = 100)
Coal mining

New
pasFreight WholeRetail senger
car
sale
autotive ac- awards Total Anthra- Bitumi- load- sales sales mobile
ings
tivity (value)
regiscite
nous
trations

BuildFactory ing conproduc- tract

1933
Jan
Feb.
Mar
April
May
June
July
Aug
Sept.
Oct
Nov
Dec

56
56
52
59
64
70
75
72
69
67
65
64

25
17
12
13
15
18
20
20
24
31
41
44

52
62
74
45
45
65
69
62
71
53
71
67

53
64
77
44
43
65
67
61
74
55
73
68

47
49
46
48
54
65
77
72
44
38
59
61

49
48
45
46
49
59
66
63
58
55
54
57

60
55
55
60
66
71
71
70
64
64
63
63

51
49
47
62
59
60
57
61
69
63
57
61

61
57
38
44
52
61
73
75
83
78
71
66

1934
Jan
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec

62
66
68
70
70
70
66
67
62
65
66
71

36
32
31
29
27
24
25
25
33
38
41
33

79
86
106
73
75
69
63
51
61
53
63
70

82
89
109
73
76
68
63
50
62
53
64
72

56
61
77
68
67
66
61
57
55
56
56
57

59
61
63
60
61
62
57
52
52
51
53
57

73
73
73
75
83
80
79
78
72
73
71
72

55
55
71
65
69
69
62
62
69
66
60
67

38
54
60
75
71
79
89
81
69
71
64
93

Seasonal factors
(Used in adjusting the actual indexes for seasonal changes. The average for the year
equals 100)
Jan
Feb
Mar
April
May
June
July. . . .
Aug
Sept
Oct
Nov
Dec

99
101
101
98
98
99
96
100
103
105
103
97

81
95
117
122
123
108
98
96
100
97
86
77




108
107
82
104
100
88
82
100
100
128
103
98
61

114
109
102
91
90
88
88
94
102
107
110
105

92
97
96
97
102
101
100
103
110
109
102
91

88
92
95
93
94
96
93
94
114
114
114
113

82
82
98
101
101
98
72
79
90
113
120
164

54
74
112
151
144
140
113
110
96
82
70
54

Twentieth

Annual

Report, Federal Reserve Bank

of

Philadelphia

Indexes of business conditions
Philadelphia Federal Reserve District
Without adjustment for seasonal variation
(1923-1925 average = 100)
Coal mining
New
Fac- BuildpasFreight Wholetory ing conRetail senger
car
produc- tract
sale
autotive ac- awards Total Anthra- Bitumi- loadsales sales mobile
ings
tivity (value)
regiscite
nous
trations
Annual
averages
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

103
95
103
108
104
102
111
97
77
61
64
67

75
107
118
137
160
165
132
108
62
34
22
31

115
107
78
104
98
93
92
86
72
60
60
70

115
109
76
104
99
93
91
86
74
62
61
71

117
89
94
105
91
90
98
85
67
51
54
61

104
96
100
106
101
102
106
90
71
52
55
57

104
99
97
98
94
94
98
85
73
59
63
75

99
99
102
106
102
101
100
91
80
61
58
65

97
99
104
123
104
111
131
99
80
51
62
73

1933
Jan
Feb
Mar.
April
May
June
July
Aug
Sept.
Oct.
Nov
Dec

56
57
53
57
62
69
72
72
71
70
66
62

20
16
14
16
19
20
19
19
24
30
35
34

56
66
61
45
44
57
57
62
72
68
74
66

57
68
63
45
43
57
55
61
75
71
75
67

53
53
47
43
49
57
67
68
45
41
65
64

46
47
43
45
50
58
66
65
65
60
56
53

53
51
52
56
62
67
66
66
73
72
71
70

42
40
43
66
59
59
42
49
62
71
68
100

33
42
42
66
75
86
82
82
79
64
50
36

1934
Jan
Feb
Mar
April
May
June
July
Aug
Sept,
Oct
Nov
Dec

61
67
69
68
69
69
63
67
64
68
68
68

29
30
36
36
34
26
25
24
33
36
35
25

86
92
88
75
75
60
53
50
61
67
65
70

89
95
89
76
76
60
52
50
62
68
65
71

64
67
78
62
60
58
54
54
57
60
61
60

55
59
61
58
62
63
58
54
57
55
54
52

64
67
69
69
78
77
73
74
82
83
81
81

45
45
69
65
70
67
45
49
62
75
73
110

20
40
67
113
103
111
101
89
66
58
45
50




62

Twentieth Annual Report, Federal Reserve Bank of Philadelphia

Indexes of factory employment, payrolls and
employe-hours in Pennsylvania
Without adjustment for seasonal variation
Employment

(1923-1925 average = 100)

Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Avg.
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

105
101
97
99
98
92
94
96
78
68
59
68

107
102
99
101
98
94
97
96
79
68
61
72

108
102
99
100
99
94
97
96
79
67
58
75

107
100
98
99
97
91
98
95
79
65
58
76

108
97
98
98
96
91
98
93
77
62
61
75

109
93
97
98
96
92
99
91
74
61
65
76

108
90
95
97
94
91
99
86
71
58
67
74

107
90
96
98
94
93
100
85
72
59
72
74

99
100
98
101
100
90
95
96
67
49
34
47

102
104
100
104
103
96
102
98
69
49
35
53

107
105
102
106
104
96
103
98
70
48
33
58

106
102
99
103
101
89
104
96
70
44
34
59

113
97
99
101
98
92
105
92
67
40
38
63

113
89
96
101
98
92
104
87
62
38
43
62

106
82
93
97
91
86
99
78
57
34
46
55

107
86
95
99
95
93
105
79
58
35
54
57

107
92
98
98
68
54
41
49

103
96
99
100
93
94
98
81
70
62
71
75

107
96
98
99
96
93
98
89
75
63
66
74

111
101
107
100
70
54
42
55

107
89
94
104
92
93
103
79
56
38
54
53

111 106
94 93
102 99
108 105
95 94
98 97
107 103
80 74
56 52
41 40
56 53
57 56

105
100
103
106
94
97
98
71
53
38
51
58

107
95
98
103
97
93
102
86
61
41
44
57

(1927-1928 average = 100)

Employe-hours
1927
1928
1929
1930
1931
1932
1933
1934

107 106
94 94
98 98
101 101
94 94
94 95
102 100
85 84
72 71
65
64
75 74
75
74

(1923-1925 average = 100)

Payrolls
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

107
92
96
100
95
94
101
86
72
63
75
73

112
101
108
99
70
53
39
59

109
94
110
99
72
49
41
60




107
98
109
96
67
45
47
65

103
96
109
90
62
43
56
65

63

97
90
106
82
57
38
61
56

100
98
108
82
58
40
64
58

98
96
106
82
56
44
59
52

98
101
109
81
58
49
59
56

97
100
105
76
55
47
55
55

97
100
99
72
56
45
54
57

103
97
106
88
62
47
51
57

Federal Reserve Bank of Philadelphia
Directors and Officers Appointed and Elected for the Year 1935
DIRECTORS
Class A
John B. Henning, Tunkhannock, Pa.
George W. Reily, Harrisburg, Pa.
Joseph Wayne, Jr., Philadelphia, Pa.

Class B
J. Carl De La Cour, Camden, N. J.
Arthur W. Sewall, Philadelphia, Pa.
C. Frederick C. Stout, Philadelphia, Pa.

Class C
Richard L. Austin (Chairman), Philadelphia, Pa.
Harry L. Cannon, Bridgeville, Del.
Alba B. Johnson (Deputy Chairman), Philadelphia, Pa.
(Reappointed for another term; died Jan. 8, 1935)

Member of Federal Advisory Council
Howard A. Loeb, Philadelphia, Pa.

OFFICERS
Richard L. Austin,
Chairman and Federal Reserve Agent
Arthur E. Post,
Assistant Federal Reserve Agent
Ernest C. Hill,
Assistant Federal Reserve Agent

George W. Norris,
Governor
William H. Hutt,
Deputy Governor
John S. Sinclair,
Deputy Governor
C. A. Mcllhenny,
Deputy Governor, Cashier
and Secretary

W. J. Davis, Assistant Deputy Governor
L. E. Donaldson, Assistant Deputy Governor
J. M. Toy, Assistant Cashier
S. R. Earl, Assistant Cashier
G. K. Morris, Assistant Cashier

William G. McCreedy, Comptroller





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102