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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT JUNE i, 1937 % ■St* FEDERAL RESERVE BANK OF PHILADELPHIA WOa, Business and Banking Conditions in the United States » Industrial activity in April and the first half of May was maintained at the relatively high level of recent months. The general level of whole sale commodity prices declined some what, reflecting considerable reduc tions in prices of many raw materials and semi-finished products. The Board’s seasonally adjusted index of industrial production in April con tinued at 118 per cent of the 1923 1925 average. Manufacturing produc tion rose further, reflecting increased output of durable goods. Activity at steel mills was at a rate slightly higher than in March and about equal to that in the peak month of 1929. Automo bile production continued to expand. In the first three weeks of May out put in these industries was maintained at the levels reached at the close of April. Increases in output in April were also reported for lumber and plate glass. At textile mills where output has been at a high level in re cent months there was a slight reduc tion in activity. At bituminous coal mines output de clined sharply following an increase in March, when consumers accumu lated stocks of coal in anticipation of a strike. Crude petroleum output, which had risen sharply from Novem ber to March, showed further growth in April. Production of most metals also increased. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, increased more than seasonally from March to April and continued higher than a year ago, reflecting, as in earlier months of the year, a larger volume of residential building and of other privatelyfinanced work. Contracts awarded for publicly-financed construction have been considerably smaller in the first four months of this year than in the corresponding period of 1936. Employment rose further between the middle of March and the middle of April. There was a considerable growth in the number of persons em ployed in manufacturing and on the railroads, little change in those em ployed in the public utility industries and in trade, and a decline at bitu minous coal mines. At factories the principal increases in employment were reported by the steel, machinery, and automobile industries, while the INDUSTRIAL PRODUCTION FACTORY EMPLOYMENT AND PAYROLLS Production, employment and trade. * number employed in the clothing in dustry declined. Working forces at textile mills were maintained, although a decrease is usual at this season. Fac tory payrolls increased more than em ployment, reflecting chiefly further in creases in wage rates. In April sales at department stores showed little change and mail order sales were also maintained at the March level, while sales at variety stores declined. Commodity prices. The general level of wholesale commodity prices, as measured by the index of the Bureau of Labor Statistics, declined from 88.3 EXCESS RESERVES OF MEMBER BANKS Wednesday figures of estimated excess reserves for all member banks and for New York City, January 6, 1932, to May 19, 1937. MEMBER BANK CREDIT * Poyrolls_^ Index of physical volume of production, ad justed for seasonal variation. By months, January 1929 to April 1937. * Indexes of number employed and payrolls, without adjustment for seasonal variation. By months, January 1929 to April 1937. In dexes compiled by the United States Bureau of Labor Statistics. Wednesday figures for reporting member banks in 101 leading cities. September 5, 1934, to May 19, 1937. Page One per cent of the 1926 average at the beginning of April to 86.9 in the mid dle of May. Prices of non-ferrous metals, steel scrap, cotton, and rubber declined considerably and there were also decreases in the prices of grains, cotton goods, silk, hides, and chemi cals, while prices of shoes and cloth ing showed further small advances. Since the middle of May prices of hogs and pork have advanced sharply and grain prices have also risen. Bank credit. Following upon the final increase in reserve requirements, which became effective on May 1, ex cess reserves of member banks de clined from $1,600,000,000 to about $900,000,000, and in the first three weeks of May fluctuated around the new level. Adjustments by banks to the new requirements were reflected in a decrease in interbank balances and in a small increase in borrowings. The Federal Reserve System in April purchased $96,000,000 of United States Government securities, for the purpose of easing the adjustment to the new requirements and preserving orderly conditions in the money market. Total loans and investments of re porting member banks showed a small decline from the middle of April through May 19. Holdings of United States Government obligations and other securities showed a decline, which was offset in part by increases in loans. While domestic interbank and United States Government deposits declined further, balances of foreign banks and other demand and time deposits at re porting member banks increased. Money rates. The open-market rate on 90-day bankers’ acceptances, which between January and the latter part of March had advanced from 3/16 to 9/16 per cent, was reduced to Yz per cent on May 7, and the rate on ninemonths’ Treasury bills declined to .62 per cent on May 24 compared with a high point of .74 per cent on May 3. Other short-term rates have shown little change in recent weeks. Yields on long-term Treasury and other high-grade bonds have declined some what. H Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Philadel phia Federal Reserve District has been well sustained at a comparatively high level, when allowance is made for the usual seasonal variation. Output of manufactures, anthracite fuel and crude oil during April was at a some what higher rate than in March and substantially above that of a year ago. Building and construction activity ex panded seasonally and the value of contract awards increased, following a decline in March. Agricultural con ditions on the whole reflect favorable seasonal developments and the current income of farmers continues materially larger than in recent years. The volume of industrial employ ment and payrolls increased further in April but in May seasonal reces sions were indicated. Wage disburse ments in April showed unusually large gains, owing primarily to increases in wage rates in a number of basic in dustries. Retail trade sales have been in larger volume than last year, the Easter season considered, although the re sults of April business were less satis factory than is usually to be expected. Some improvement is reported in early May. In the case of wholesale trade, dollar sales increased from March to April and the current index for the eight lines combined is the highest since 1923. Deliveries of goods by rail, motor truck and water have continued substantially larger than in recent years. Other indicators measuring the movement or purchase of goods have risen in the month and are consider ably higher than last year. Manufacturing. The market for fac tory products reflects the impact of seasonal influences so that the trend of current demand may be character ized as mixed. Sales generally have declined since the middle of last month but they continue larger than last year, particularly in the case of fabricated metal products and building materials. The volume of unfilled orders appears to have been reduced sharply in most of the important industries during the month but the backlog of forward com mitments accumulated in the previous V! months is still sufficiently large to sus tain operations for some time at con siderably higher levels than those pre vailing at the same time in recent } years. No significant changes in the inven tories of finished goods held by plants in this district generally have been re ported, aside from a few random in stances showing increases. Purchases of raw materials on the whole haveeK\ .V declined during the month but con- -A . tinued substantially larger than last X I STOCKS OF RAW MATERIALS AND FOODSTUFFS MANUFACTURING ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT WORLD PRODUCTION (aDJ. FOR SEAS. VAR.) * EMPLOYMENT UNITED STATES PAYROLLS 1932 1933 Page Two 1934 1935 PRICES OF RAW MATERIAL5-U.S 1937 * ■ ^ year. The supply of raw materials Business Indicators including foodstuffs at source and in Philadelphia Federal Reserve District warehouses in this country and else where has decreased sharply in recent Index numbers: percentages of the 1923-1925 average as 100 years; this trend in stocks has been Not adjusted Adjusted for seasonal variation indexes allow for the usual accompanied by increasing production Adjusted seasonal change in activity. Per cent cha nge and rising prices, a fact which reflects Unadjusted indexes reflect merely the 1937 1937 Apr. Feb. Mar. Apr. a normal development in a period of actual change which may or may not Apr. Feb. Mar. Apr. April from from 1936 1937 1937 1937 be typical. 1936 1937 1937 1937 4 business recovery. Month Year mos. Prices of manufactured products 1936 ago ago have declined slightly in May as com 82 r 95 98 99p 84 r 94 98 lOlp + 2 +22 +20 production pared with the preceding month but Industrial 79 95 96 95p Manufacturing—total............... 96 97p + 2 81 94 +25 +20 Durable goods.......................... 74 r 89 92 96p + 4 +29 +43 continued higher than for several Consumers’ goods................... 87 98 99 99p + 1 +14 +15 81 r 104 108p IlOp Metal products...................... 83 r 102 106p 112p + 6 years. The index number compiled +35 +48 81 105 100 93p Textile products..................... 97 98p + 1 85 99 +18 +15 by the Bureau of Labor Statistics for 73 85 88 90 Transportation equipment. 83 85 70 84 +29 +22 + 2 73 75 79 78p Food products........................ 74 76 80 79p ~ 1 + 8 + 7 commodities other than farm products 89 107 102 91 Tobacco and products......... 98 108 116 112 - 4 + 14 + 16 38 43 47 51p 53 52p - 2 Building materials................ 38 49 +67 and foods in the week ended May 22 +34 112 121 127p 124 Chemicals and products.... 110 125 121 125p + 3 + 13 +15 was 86.3, relative to the 1926 average, 120 150 151 144p Leather and products.......... 122 141 146 146p - 0 +19 +16 85 94 97 98 Paper and printing............... 95 96 84 94 + 1 +14 +15 as compared with 78.7 a year before. 71r 59 71 95p Coal mining................................. 69 r 54 83 92 p +11 +33 - 1 67 99p 72r 54 Anthracite............................... 69 r 50 81 95p +17 - 7 +38 Factory employment and payrolls in 66 95 100 64 Bituminous............................. 73 87 98 70 +28 -29 - 3 this district increased from the middle Crude oil...................................... 409 467 459 467 +15 422 467 468 481 + 2 +14 Electric power of March to the middle of April but Output..................................... 229 236 244 254 +11 224 250 249 249 + 4 +11 Sales, total?............................ 215 240 241 241 +12 +12 222 259 238 248 - 0 in May decreases were reported, re 166 180 Sales to industries?............... 158 185 174 178 + 2 +12 +14 160 183 flecting such factors as seasonal reces Employment and wages—Pa. sions, industrial disputes and lack of 91 92 Factory—Wage earners.................. + 1* +16* +16* 79 90 98 103 business in some lines. The most Payrolls.......................................... + 6* +41* +39* 73 94 Man-hours (1927-28 = 100).. .. — 0* +28* +35* 77 96 r 98 98 striking development during April was General (1932 =100) 122 123 Employment................................. + 1* +10* +13* 112 121 a widespread increase in wage rates, Payrolls.......................................... + 4* +32* +31* 141 174 179 187 a fact which largely accounted for a and real estate sharp rise in wage payments. In Penn Building 56 60 Contracts awarded?—total........... 47 60 40 74 60 51 -16 +28 +16 35 40 Residential?................................... 27 36 sylvania factories, for example, the +70 24 46 37 35 +50 - 4 60 62 55 61 Non-residential?.......................... - 7 49 71 64 56 -12 +14 number of wage earners employed in Public works and utilities?. .. . 85 125 107 109 90 154 162 .116 -28 +29 +ii 48 31 22 Permits for building—17 cities.. . 34 24 28 38 22 -42 8 +64 April increased about one per cent as 26 46 Real estate deeds—Philadelphia . 35 25 36 25 +77 -13 26 47 +31 compared with March, while the Writs for Sheriff sales—Phila.. . . - 9 709 470 508 630 676 461 498 600 +20 -11 amount of wages paid expanded by Distribution 83 79p —sales................... Retail trade 79 63 nearly 6 per cent. +10 73 r 80 86 78p - 9 82 83 70 77 stocks................ 80 81 68 80 + i +19 The April employment index reached 95 98p Wholesale trade—sales................... 77 95 83 104 102 106p + 4 +22 +28 79 79 stocks................ 69 r 77 69 r 78 79 r 79 + 1 +15 92, relative to the 1923-25 average, 98 115 112 114 Life insurance sales......................... +10 88 100 101 102 +16 146 174 New passenger auto, registrations + 19* + 5* +33* 165 109 and the payroll index was 103, both Hotels—Occupancy......................... 129 137p + 7* + 6* + 8* 129 127 being the highest since 1929 and early 135 11 Op Income, total ............... + 10* + 9* + 9* 137 134 73 78 79 Freight car loadings—total........... 66 68 80 83 0 +22 +24 83 1930. Estimates show that Pennsyl 79 83 Merchandise and miscellaneous 69 73 67 80 82 81 +20 +27 - 1 87 71 Coal................................................. 63 82 70 75 89 79 -12 + 12 +12 vania factories in the payroll period nearest the middle of April employed Business liquidations 56 61 Number. ........................... - 8* — 8* -16* 66 58 approximately 988,000 wage earners, 18 64 Amount of liabilities.... -71* -19* +18* 23 30 or 16 per cent more than a year ago. of accounts The amount of wages paid out was Payment Check payments.................... 77 93 105 89 +15 +16 77 92 107 88 -18 Rate of collections (actual) about $26,400,000 a week, or 41 per 33 32 Retail trade........................ 30 28 33 33 + i 30 29 +11 cent larger than in the same period 78 79 Wholesale trade................. 72 73 74 78 79 + 2 + 9 last year. Prices- United States 88 88 Delaware factories in April reported Wholesale (1926=100). + 0* + 10* + 9* 80 86 94 92 Farm products............... - 2* +20* + 19* 77 91 a gain of 3 per cent in employment Foods............................... 87 85 - 2* + 7* + 6* 80 87 85 86 Other commodities. . .. + 1* +10* + 8* 79 84 and 7 per cent in payrolls. Compari Retail food.......................... 85 86 + 0* + 8* + 6* 79 84 87 88 Philadelphia................... + 0* + 7* + 6* 82 86 sons with a year ago show that the 82 82 Scranton.......................... 0* + 7* + 6* 76 81 number of wage earners increased 30 % change from per cent and the amount of wage dis Apr. Apr. Jan. Feb. Mar. (In millions of dollars) Year Month 1937 1936 1937 1937 1937 bursements rose 46 per cent. Simi ago ago larly, payrolls of manufacturing plants and credit in southern New Jersey increased al Banking Federal Reserve Bank $ (a) $ (a) $ (a) $ 1 $ 1 most 5 per cent while employment Other bills and securities............. +17 183 200 199 200 214 + 7 registered only a fractional gain. Member bank reserves................. +47 292 387 365 390 430 +10 Reserve ratio (per cent).............. 75.0 +1 74.3 76.1 75.0 - 1 74.1 But both continued considerably larger Reporting member banks Loans to customers....................... +1 $ 410 $ 415 $ 411 $ 408 $ 416 + 2 than last year. Other loans and investments. . . - 2 - 1 757 778 776 765 753 Total deposits (adjv ited)............ 1,389 + 6 1,483 1 ,437 1,429 1,479 * + 3 Output of manufactures has been Bankers’ acceptances mtstanding. +54 17.2 17.2 0 11.2 13.8 15.0 well maintained, showing some im * Computed from data unadjusted for seasonal variation. p—Preliminary. r—Revised. provement during the month under re ? Not included in production index. ? 3-month moving daily average centered at 3rd month, view. This bank’s index of produc(a)—Less than $600,000. t Page Three OUTPUT OF METAL PRODUCTS OUTPUT OF TEXTILE GOODS PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PER CENT PERCENT ELECTRICAL _ APPARATUS STEEL PRODUCTS ' \ WOOLENS i \ AND .» \ WORSTEDS 'COTTON 1932 1933 1934 1935 tive activity, which is adjusted for the usual seasonal change and for the number of working days, rose in April to 97, relative to the 1923-25 average, , as compared with 96, in March and 94 \ in January and February; a year ago \ it was 81. The greatest improvement occurred in durable goods such as primary and secondary metal products and trans portation equipment. Activity also expanded in the output of industrial chemicals and such allied products as explosives and paints and var nishes. In the case of non-durable \ goods, some improvement occurred in such textile products as cotton manu factures, hosiery, and underwear, while production of silk and woolen goods, shoes, certain food products, and cigars declined. Compared with a year ago activity in both durable and non-durable goods was substantially higher, but the rate of gain for the former was much greater than that for consumers’ goods as a whole. Productive activity in the aggregate during the first four months this year was about 25 per cent higher than in the same period last year and the cur rent rate continues the highest since 1929-30, with one exception. Electric power production by eight central stations in April was main tained above its customary seasonal . level for the third consecutive month and exceeded that of a year ago by 11 per cent. Total sales of electricity by 10 stations showed about the usual rate of gain from March to April and were 12 per cent greater in the first four months this year than last. Industrial consumption of electrical energy ex panded by a larger percentage than it ordinarily does in April and was 12 per cent above the level of a year earlier. Coal and other fuels. Anthracite out DigitizedPage for FRASER Four 1936 1937 1932 put and shipments showed additional sharp gains in April, owing chiefly to reduced prices which stimulated de mand by householders. Production was the largest for that month since 1928 and shipments exceeded those of any month in the past six years. In early May output and demand declined. The market for Pennsylvania bitu minous coal has slackened further since the middle of last month, owing chiefly to smaller takings by manu facturing plants and public utility companies, which made unusually large purchases during February and March. Demand by railroads, however, has been well maintained in recent weeks. Shipments of soft coal declined 40 per cent in April from the relatively high level prevailing a month before and were 9 per cent smaller than a year earlier. Production also decreased more sharply than usual from March to April, but expanded somewhat in early May, according to preliminary reports. Over the first four months of 1937 the output of by-product coke has been close to the relatively high level reached in the closing months of 1936; the April figure was 25 per cent larger than a year ago. Produc tion of gas and fuel oil, on the other hand, in April was only 4 per cent greater than a year ago and was sub stantially under the peak for recent years attained in January 1937. In April the wholesale price index of the Bureau of Labor Statistics for fuel and lighting materials was 76.8 per cent of the 1926 average, little changed from that of 76.4 a year ear lier. Anthracite prices in April were below April 1936, but in the case of bituminous coal an . coke increases of about 2 and 10 per cent, respectively, were recorded. 1933 1934 1935 (Output and shipment figures are daily averages) Anthracite Proauction.................tons Shipments..................tons Prices........... (1926=100) Employment..............No. Bituminous Production.................tons Shipments.......... No. cars Prices........... (1926 —100) Employment..............No. Coke Prod. . . . (1923-25=100) Prices........... (1 926 —100) Gas and fuel oil Prod. . . .(1923-25=100) Prices........... (1926-100) 1936 1937 Per cent change from April 1937 Month Year ago ago 263,000 249.190 72.4 96,806 +49 +47 - 7 +10 +38 +42 - 9 + 8 304,000 19.590 98.6 123,136 -36 -40 +1 -11 + - 133.9 102.8 0 + 5 +25 +10 125.4* 64.4 + 4 - 2 + 4 -13 3 9 a 1 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. c The value of building and construction contracts awarded in this district in April amounted to approxi mately $15,600,000, an increase of 32 per cent as compared with March and a gain of 5 per cent over a year ago. Building. Building contracts Philadelphia Federal Reserve District Per cent change April 1937 (000’s From 1937 omitted) month from 4 mos. ago 1936 Residential........................... $ 6,717 Apts, and hotels............. 307 l'amilv houses................. 6,410 Non-residential.................. 5,458 Commercial..................... 2,288 Factories........................... 1.153 Educational..................... 990 All other........................... 1,027 + 62 + 70 - 76 +274 +124 + 57 + 14 - 7 + 18 + 15 + 8 + 191 + 15 - 53 + 10 - 11 Total buildings............... $12,175 Public works and utilities. 3,419 + 36 + 21 + 18 + 11 Grand total................. $15,594 + 32 + 16 Source: F. W. Dodge Corporation. This was the largest April contract total since 1931. The improvement in the month reflected principally a marked expansion in the dollar volume of contracts awarded for one and twofamily dwellings and to a lesser ex tent increased awards for other types of construction except apartments and hotels. In the first four months this * FREIGHT CAR LOADINGS BUILDING AND CONSTRUCTION PHILADELPHIA FEDERAL RESERVE ALLEGHENY DISTRICT DISTRICT 1923-25AVG.-I00 1923 25AVC «IOO z— c/5 1 COAL CO WARDED Nk h A f\ • • • ■ • 1 \ V^A. * A/ i / */ u v/ A I Ms// ' * 1 w J'ilL J . ADJUSTED OR SEASONA VARIATION 1932 1933 1934 MERCHAN DISC AND , MISC ELLANE0US » w » * • • \lf I n DUCTON'O PRC L JMBER, BRI :k !• TOTAL F WD CEMEK T ADJUSTED FOR SEASONAL 1935 1936 1937 1938 1932 1933 year the value of all contracts awarded pared with $39,000,000 received by was 16 per cent greater than a year farmers in the first quarter of 1933 earlier and exceeded that of any sim and was the largest total for that in terval since 1930. ilar period in the past five years. As partly indicated by employment, operations on contracts awarded ear Percentage change First Sales of farm from— products— quarter lier this year expanded considerably 1937 Pennsylvania, during April; this was especially true (000’s New Jersey, 1929 1933 omitted) 1936 Delaware of general building construction and $19,996 +44.2 +114.9 — 15.4 highway repair work. Employment in Crops..................... Livestock and industries producing important build products........... 53,456 +14.7 + 80.6 -21.3 ing materials has increased steadily Total............. $73,452 +21.4 + 88.8 -19.8 since the turn of the year, following a slight decline from the relatively high Higher prices for most agricultural levels which prevailed last fall. Wholesale prices of building mate commodities have been the principal rials in the country as a whole have influence in raising the cash income increased considerably since early this of farmers in this section as in other year, reflecting chiefly advances in parts of the country. For example, quotations for lumber, structural steel, the index of prices received by Penn brick, and tile. About the middle of sylvania farmers in mid-April was the May the Bureau of Labor Statistics’ highest for that month since 1930 and index was nearly 97 per cent of the was 25 per cent above the average 1926 average, compared with 90 at the for the pre-war years, 1910-14. Com beginning of this year and about 85 pared with April 1936, this index showed an increase of 21 per cent. in May 1936. Distribution, trade and service. Re Agriculture. Farming operations in this district were delayed by cool, wet tail trade sales by department, apparel, weather at the beginning of the grow shoe and credit stores in this district ing season, but lately plowing and were 6 per cent larger in April this seeding have progressed rapidly. Win year than last after allowance is made ter grains are growing satisfactorily for the difference in the date of Eas and the germination of spring grains ter. Comparing March and April this has been more even this year than year with the same two months of last. The growth of pastures and 1936, both periods including the Easter meadows has been rather slow, as has buying season, the gain in total sales that of nearly all forms of vegetation, was nearly 7 per cent and for depart hut lately conditions have improved ment stores alone about 6 per cent. considerably as a result of more favor In the first four months of 1937 dollar sales in the aggregate showed an in able weather. Department of Agriculture reports crease of 10 per cent over a year show that sales of farm products in earlier; this improvement was shared the three states included in this dis bv all lines except shoes and was espe trict amounted to nearly $73,500,000 cially pronounced in the case of credit in the first three months of 1937, a stores handling chiefly furniture and gain of 21 per cent over the same other household equipment. period last year. This figure com Business at wholesale in April was ARIATION 1934 1935 1936 1937 26 per cent greater than in the same month of 1936 and in the first four months was 22 per cent larger this year than last. Compared with March, the value of sales in eight important lines combined showed a 3 per cent increase instead of the usual small decline; consequently, our seasonally adjusted index in April rose to 106, relative to the 1923-25 average, from 102 a month before. In both channels of trade, inventory changes during April were minor and about in line with seasonal expecta tions. Compared with a year ago, the value of stocks at retail was 19 per cent larger and at wholesale 15 per cent greater. Installment buying in the country as a whole, as evidenced by the number of new and used automobiles financed at retail and by the sales of credit stores, dealing largely in furniture and such other household appliances as washers, radios and refrigerators, has increased considerably, continuing an upward trend that has been quite pro nounced for more than a year. In the case of automobiles, Department of Commerce reports show that the dollar volume of purchases so financed ap proximated $364,000,000 in the first quarter of 1937, a total 14 per cent larger than a year earlier and 67 per cent greater than two years ago. Com pared with the same period of 1928 and 1929, automobile financing so far this year was 72 per cent and 19 per cent higher, respectively. Transportation of commodities by railroad freight in this section has been expanding steadily since early this year. While the gain in April was somewhat less pronounced than during February and March, shipments were the largest for that month since 1930. In the case of commodities consisting Page Five chiefly of manufactures originating in the Philadelphia industrial area, car loadings in April showed a small de cline instead of increasing slightly as they ordinarily do. Comparative fig ures for four months, however, show that they were 16 per cent larger than a year earlier and exceeded those of any like period in the past five years. Activity at non-resort commercial hotels increased considerably in April, as shown by room occupancy and total revenue. Hotel business Philadelphia Federal Reserve District Capacity............................. Room occupancy............... Per cent of capacity used: April 1937........... 63.6 March 1937......... 60.1 April 1936........... 57.4 Income from: Guest rooms..................... Food.................................. Other sources.................. Total revenue............. April per cent change from Month ago + o + 7 Year ago + 6 1937 from 4 mos. 1936 + 8 + 9 +12 „ + 9 + 8 + 9 +11 4-11 4- 8 + 9 +10 + 9 + 9 With the final increase in reserve requirements on May 1, member banks in reserve cities are required to maintain balances at the reserve bank equal to 20 per cent of their demand deposits and 6 per cent of their time deposits. In the case of country banks these ratios are 14 and 6 per cent, respectively. Over the greater part of April ex cess reserves of member banks in Philadelphia, a reserve city, averaged over 110 millions; despite the subse quent increase in requirements, the ex cess in the first fortnight of May still was more than 70 millions. Tabula tions for country banks in this dis trict covering the first half of May show that their reserves in the aggre gate were about 30 millions over re quirements. While there has been some expan sion in the number of member banks that are borrowing from this bank, the dollar volume of bills discounted has increased only moderately. In the first nineteen days of May the range of fluctuation was from $1,507,000 to $2,252,000, the closing figure being $1,542,000. Reserve deposits of member banks declined nearly 7 millions in the four weeks ended May 19, but remained al most 150 millions above a year ago. The recent decline was due chiefly to an adverse balance of payments of about 18 millions in commercial trans actions with other districts, which doubtless was caused partly by bank Banking conditions. Six DigitizedPage for FRASER purchases of securities. Another fac tor tending to reduce reserves was a 6% million increase in currency de mand, which was nearly double that in the same period last year. Funds absorbed by these transactions were supplied partly by a 10 million excess of Treasury disbursements over local receipts and by a decline of 7]/2 mil lions in miscellaneous deposits at this bank. Federal Reserve Bank of Philadelphia (Dollar figures in millions) May 19, 1937 Bills discounted.......... * 1.5 Bills bought................. 0.4 Industrial advances. . 4.1 United States securi ties ......................... 213.3 Total bills and se curities .................. Federal res. note cir culation ..................... Member bank reserve deposits................ U. S. treasurer—gen eral account............. Foreign bank deposits. Other deposits............. Total reserves............. Reserve ratio............... $219.3 Changes in— Four weeks One year +$0.4 + 0.1 - 0.1 +$ 1.3 - 0.1 - 1.1 + 3.7 + 36.2 +*4.1 +$36.3 312.1 + 3.4 + 31.4 422.6 - 6.7 +147.9 2.3 12.3 1.2 553.4 73.7% + 0.0 Reporting member banks (000,000's omitted) May 19, 1937 Assets Commercial, industrial and agricultural loans: On securities...................... $ Otherwise secured and unsecured....................... Open market paper............. Loans to brokers and deal ers in securities................. Other loans to purchase or carry securities................. Loans on real estate............ Loans to banks..................... Other loans: On securities...................... Otherwise secured and unsecured...................... Total loans.................. $ II. S. Government securi ties ..................................... Obligations fully guaran teed by U. S. Gov't.. . . Other securities. ............... Following a sharp rise in deposits at reporting member banks early in April, changes over the next few weeks were relatively small. From April 21 to May 19, however, there was a decline from 1,478 to 1,467 millions. An increase of 13 millions in demand deposits of individuals, cor porations and others was accompanied by a decrease of 7 millions in funds credited to the Federal Government and a drop of 17 millions in interbank balances, which have shown a general tendency downward since early this year. The deposit loss and an in crease of 17 millions in outstanding credit were reflected in decreases of 14 millions in balances with the re serve bank and 13 millions in those with correspondents. The principal change in credit ex tended by the reporting banks was a rise of 16 millions in investments. Twelve millions of this was in direct securities of the United States Gov- Liabilities Demand deposits, adjusted $ Time deposits........................ U. S. Government deposits. Interbank deposits............... Borrowings............................. Other liabilities..................... Capital account.................... One year 44 * * 156 27 * * * * 25 38 61 2 i -$ -$ * - 2 * 1 - 4 46 * 55 * * 454 +* i +* 10 347 + 12 + 32 92 294 + + - 8 20 Total loans and invest ments ............................... $1,187 Reserve with Federal Re serve Bank......................... 291 Cash in vault........................ 16 Balances with other banks. 135 Other assets—-net................. 90 - 23.3 + 4.4 - 7.4 - 0.7 -11.9 + 123.7 - 0.8% + 1.0% Changes in Four weeks 892 284 7 284 * 1 3 +*17 +* 14 - 14 + 102 + 2 - 17 + i - 13 - 1 +$13 - 7 - 17 25 227 +$143 + 10 - 50 8 + + * Comparable figures not yet available. ernment; as a result holdings of such securities currently amount to 347 mil lions, a figure only 5 millions below the January peak and 32 millions larger than a year ago. In May the report form used by these banks was revised with respect to the classification of loans. The principal effect was to segregate com mercial, industrial and agricultural loans, and loans to purchase or carry securities. While these changes make comparisons with a month ago diffi cult, it does not appear that there has been any material change in commer cial loans lately, whereas figures for the preceding month indicated that a substantial rise had taken place. Loans in total increased one million between April 21 and May 19. Although acceptances of banks located in the Philadelphia Federal Re- MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Sources of funds: Reserve bank credit extended in district......... Commercial transfers (chiefly interdistrict) . . Treasury operations............................................... Uses of funds: Currency demand................................................... Member bank reserve deposits........................... ‘‘Other deposits” at reserve bank.................... Unexpended capital funds of reserve bank. . . 3 4 Changes in weeks ended-r— April 28 May 5 May 12 May 19 Changes in four weeks +0.5 +4.5 +1.8 + 1.3 -10.6 + 7.2 + 0.1 -12.3 - 1.1 -1.9 +0.7 +2.3 + 0.0 -17.7 +10.2 +6.8 - 2.1 -13.3 +1.1 - 7.5 +4.5 +4.6 -2.3 -0.0 + + - 0.0 2.7 4.8 0.0 + 3.8 -16.9 - 0.2 + 0.0 -1.6 +2.9 -0.1 -0.1 + - +6.8 - 2.1 -13.3 +i.i - 7.5 6.7 6.7 7.4 0.1 serve District declined slightly during April, the total of $17,200,000 at the end of the month was about $6,000,000 above a year ago. Of this increase, $4,400,000 was in im port bills and $1,000,000 in bills based on domestic ship ments. Smaller gains also were shown in several other classifications. (All figures are rounded from original data) Manufacturing Indexes EmployeEmployment* Payrolls* hours t (Indexes are percentages of the 1923-25 average April 1937— Per cent Per cent taken as 100. Total and per cent group indexes are weight April change from April change from change from 1937 1937 ed proportionately.) index April Mar. index April Mar. April Mar. 1936 1937 1936 1937 1936 1937 REPORTING MEMBER BANKS MILLIONS Employment and Payrolls in Pennsylvania PHILADELPHIA FEDERAL RESERVE DISTRICT All manufacturing___■. DEPOSITS TOTAL LOANS AND INVESTMENTS 92 Iron, steel and products . Non-ferrous metal prods. 1 ransportation equip. .. Textiles and clothing.... Textiles........................... Clothing.......................... Food products................... Stone, clay and glass. . .. Lumber products.............. Chemicals and products . Leather and products.... Paper and printing........... Printing.......................... 90 132 70 105 100 128 101 91 64 97 95 100 95 Cigars and tobacco.... Rubber tires, goods. . . Musical instruments .. 66 93 56 * +16 +30 +20 +19 + 7 + 6 + 9 + 0 +19 +24 + 8 + 4 + 8 + 8 + 6 + 19 + 8 Figures from 2306 plants. +1 + 3 + 3 ~ 1 - 2 - 2 - 3 103 +1 + 2 +11 + 1 - 2 + i + i 122 158 68 96 93 111 98 96 57 107 92 104 99 + 0 - 1 + 3 61 103 52 +41 +65 +40 +30 + 17 + 16 + 18 + 8 +47 +43 +32 +28 +17 + 14 +34 +35 +37 + 6 +28 + 12 +36 + 8 - 2 - 3 - 2 - 9 - 4 + o - 8 + 3 + 3 +24 +24 + 16 + 16 + 14 - 2 +34 +33 +21 +22 + 14 +15 + 6 + 8 + 2 +27 +15 +33 +n + 6 - 0 + 1 +1 - 2 - 4 - 4 - 8 - 6 + 4 + 7 + 1 -13 + 0 + 1 + 5 + - 31 t Figures from 2064 plants. General Index Numbers Covering twelve branches of trade and industry LOANS (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) BALANCES AT RESERVE BANK AND OTHER BANKS 19 3 5 1936 General index (weighted)___ Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing . . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning................... 193 7 Less cash Hems in process of collection Employment April 1937 index 123 145 87 117 80 124 162 93 118 119 110 102 103 Payrolls Per cent change from April 1936 Mar. 1937 + 10 + 16 + 8 - 1 + 5 +20 -19 + 4 + 4 + 4 + 6 + 7 + S +1 + i +n -11 +13 + 9 0 + 1 + 1 - 2 + 0 + 2 + 3 April 1937 index 187 251 119 156 97 259 183 99 128 117 121 115 118 Per cent change from April 1936 Mar. 1937 + 32 + 41 + 123 - 11 + 12 + 53 - 8 + 3 + 11 + 10 + 14 + 15 + 2 + 4 + 6 +69 -40 +20 +19 + 3 - 2 + 2 - 0 - 0 + 6 + 12 Percentage change—-April 1937 from April 1936 City areas* Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Wilmington.......... Manufacturing Employ ment Wage payments +18 + 2 +17 +52 +19 +14 + 6 +18 +18 + 2 + 9 +27 + 16 +58 - 3 +44 +93 +40 +34 +20 +20 +40 +17 +14 +46 +43 Building permits (value) + 100 - 9 +217 + 6 + 20 — 5 + 129 - 96 - 33 + 165 +213 + 37 Debits +25 +32 +28 +61 +27 +20 +20 +15 + 8 + 6 + 9 +36 +33 Retail trade sales + i -12 -10 - 7 - 2 +1 - 4 - 6 + 4 - 5 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 MANUFACTURING AND NON-MANUFACTURING INDUSTRIES AND SERVICES PERCENT 1932 AVG.=IOO # 1 0 175 PAYRC LL5 150 »— » N IT April 1937 from March 1937 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... Y ork....................... +1 - 3 + 2 + 1 + 1 + 1 - 1 - 0 + 2 - 1 + 2 + 4 + 3 + 8 - 7 + 1 + 10 + 4 + 1 + 10 - 0 + 9 + 1 + 1 + 7 + 8 +122 + 152 +156 +753 - 82 - 52 +110 - 73 - 66 +275 + 12 + 69 + 13 - 1 + 8 - 0 + 5 - 1 -19 + i - 4 - 5 - 1 - 1 - 9 + 6 + 2 -34 -11 + 7 -29 - 7 125 \ v♦» 100 - 7 - 1 + 2 + 6 -13 !‘ V v - 9 A, t luTv V * * • **# V* EMP L0YMENT * 75 50 1932 1933 1934 1935 1936 1937 * Area not restricted to the corporate limits of cities given here. Page Seven Index numbers of individual lines of trade and manufacture WHOLESALE TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted Per cent ch ange Unadjusted indexes reflect merely the actual change which may or may not Apr Feb Mar Apr. be typical. 1936 1937 1937 1937 Apri 1937 fr om Month Year ago ago 1937 from 4 mos. 1936 Apr. 1936 Feb. Mar Apr. 1937 1937 1937 Retail trade Sales Total of all stores.......................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ Stocks of goods Total of all stores.......................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ 73 r 65r 65 93 79 r 86 80 86 78p 76 80 68p 77 72 67 107 109 92 72 89 68p 82 93 104 - 9 — 15 - 7 — 15 -24 +n + 6 + 4 + 3 — 0 — 14 + 21 68 80 80 81 63 61 62 69 76 77 123 112 106 72 71 77 107 108 108 + + -i— -f + + + + + + + 66 90 r 72 85 r 1 1 2 5 8 0 + + + + + 10 79 9 70 10 67 12 115 2 91 23 88 r 19 15 18 18 6 28 Rate of stock turnover 4 months (actual, not indexes).. 70 56 69 75 85r _ 4* 63 83 79p 57 74 69p 62 70 64 79 128 108 55 91 74p 73 84 100 DRUGS 77 82 83 60 63 68 77 82 116 123 66 73 79 105 110 108 1.25 GOODS 1 20 Wholesale trade Sales Total of all lines............................. Boots and shoes......................... Drugs............................................ Dry goods.................................... Electrical supplies..................... Groceries...................................... Hardware..................................... Jewelry......................................... Paper............................................. Stocks of goods Total of all lines............................. B tnd shoes......................... ‘ ry ods..................................... ^lec il supplies..................... roc s...................................... ird i..................................... welr> ..................................... per............................................. 83 55 95 r 47 r 87 r 12r 57 51 74 69 r 28 113r 42 r 110 r 68r 68 r 61 62 104 102 106p + 4 69 54 47 -13 +10 111 95 105 72 60 67 +11 124 130 143p +11 - 3 132 134 129 57 61 + 6 64 +23 56 62 77 92 86 95 +n + 26 — 15 + 11 + 41 + 66 + 15 + 13 + 51 + 28 78 79 r 79 33 37 36 107 108 112 50 49 52 157 156 158 76 79 79 78 82 79 59 57 r 54 68 64 65 + 15 + 32 1 + 23 + 44 + 15 + 16 12 + 5 +1 - 2 + 4 ■ + 7 + 1 - 1 - 3 - 5 + 2 Rate: stock turnover 4 months (actual, not indexes).. Output of manufactures Pig iron................................................. Steel....................................................... Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies.......... Locomotives and cars....................... Shipbuilding......................................... Silk manufactures.............................. Woolen and worsteds........................ Cotton products................................. Carpets and rugs................................ Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and products....................... Bread and bakery products............ Slaughtering, meat packing............ Sugar refining...................................... Canning and preserving................... Cigars.................................................... Paper and wood pulp........................ Printing and publishing................... Shoes...................................................... Leather, goat and kid....................... Explosives............................................ Paints and varnishes......................... Petroleum products........................... Coke, by-product............................... 22 77 r 7 58 12 96 r 38 4lr 73 80 r 8 103r 24 58 47 33 26 74 69 r 28 115r 42 r 108 r 68 r 73 r 59 62 + 14* 43 75 56 101 107r 9 57 30 224 88 69 48 118 108 146 54 42 27 70 96 79 113 120 25 68 42 245 104 87 61 181 113 148 61 63 34 66 97 86p 114 131 28 68 41 r 238 101 85 63 r 176 100 152 73 65 r 34 73 102 88p 122 140 25 S8 43 247 100 77 63 152 106 161 62p 66 37 83 95 59 97 67 87 129 115 75 80 144 103 92 52 61 107 75 98 179 105 85 91 159 125 102 72 62 115 75 99 176 118 89 90 148 129 102 74 63p 110 76 100 167 126p 94 94 153p 129 * Computed from data unadjusted for seasonal variation. Page Eight + + + + + + + + + + 11 + 4 + 2 + 7 + 6 -10 - 0 + 5 + 3 - 0 -10 + 1 -14 + S + 6 -15 + 2 + 9 - 3* - 0 + 3 + 2 - 4 +1 +1 - 5 + 6 + 5 + 5 + 3 0 + 68 + 35 + 57 + 21 + 31 +179 + 20 + 46 + 10 + 14 + 11 + 32 + 29 2 + 10 + 14 + 57 + 38 + 2* + 22 — 23 + 7 + 13 + 13 + 15 + 29 + 9 + 25 + 18 + 6 + 25 + 91 + 50 + 47 + 58 + 42 +100 + 17 + 55 + 22 + 23 + 14 + 35 + 49 + 2 + 16 + 73 + 70 + 49 + 1* + 15 - 2 + 13 + 15 + 17 + 14 + 25 + 4 + 13 + 19 + 10 + 31 95 95 98p 49 61 50 113 100 107 61 56 58 111 112 132p 123 123 119 46 59 66 39 47 50 90 90 95 77 79 79 40 41 36 109 109 48 50 52 147 151 155 79 81 79 80 86 84 52 53 52 67 65 65 GROCERIES 1 85 49 79 58 103 93 r 11 62 32 229 86 63 49 110 108 143 53 44 26 86 82 124 50 89 68 89 129 112 76 84 [44 107 p—Preli mi nary. 72 101 81 127 115 26 73 43 240 110 89 65 184 117 162 43 61 33 90 92 68 56 89 75 98 188 113 85 89 157 132 76 83 104 107 90p 91p 128 125 122 122 31 32 74 74 44 46 248 251 104 98 82 70 67 65 175 143 104 106 166r 157 56 61p 64 70 33 36 90 98 100 L10 96 55 55p 106 100 77 r 76 101 102 186 167 117 122p 89 95 91 99 .47 152p 134 134 r—Revised. 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