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THE BUSIN[e:SS REVIEW'"' THIRD FEDERAL PHILADELPHIA RESERVE DI§?R]£t4M Q 2' OCTOBER i, 1938 ST/. : FEDERAL RESERVE BANK OF PHILADELPHIA ' !jU Business and Banking Conditions in the United States Industrial activity increased consid erably in August and advanced further in September. Factory employment and payrolls also showed a substantial rise in August, and distribution of com modities to consumers increased sea sonally. Production. Volume of industrial pro duction showed a further considerable increase in August, and the Board’s seasonally adjusted index rose from 83 to 88 per cent of the 1923-1925 average. In manufacturing, increases in output were general except in the automobile industry where there was a sharp sea sonal decline as plants were closed for inventory taking and for preparations for the shift to new model production. At steel mills, where activity had risen considerably in July, there was a fur ther advance in August and production was at an average rate of 42 per cent of capacity as compared with 35 per cent in the previous month. Output of lumber and plate glass also increased. In the textile industry the sharp ad vance that had been under way since early summer continued. Mill con sumption of wool and cotton increased further, and deliveries of rayon were INDUSTRIAL PRODUCTION maintained at the high level reached in July. Shoe production showed a fur ther increase and activity at meat pack ing establishments showed less than the usual seasonal decline. Production of bituminous coal and crude petroleum increased somewhat further. In the first three weeks of September steel ingot production continued to in crease, while automobile production remained at the low level reached in August. Output of crude petroleum was reduced, as wells in Texas were closed on both Saturdays and Sun days, whereas in August only Sunday closings had been required. Value of construction contracts awarded in 37 eastern states increased considerably in August, according to figures of the F. W. Dodge Corpora tion. The increase was in publiclyfinanced projects and reflected partly the expansion of the Public Works Ad ministration program and the award of the first contract for the slum clearance projects of the United States Housing Authority. Awards for private resi dential building continued at about the same rate as in July and were close to the level reached in the spring of 1937. CONSTRUCTION CONTRACTS AWARDED p„ Commercial building, which had in creased in July owing to the award of a contract for a large office building, de clined in August to about the level of other recent months. Employment. Factory employment and payrolls showed a marked rise from the middle of July to the middle of August, while in nonmanufacturing in dustries employment showed little change. The number employed at fac tories producing durable goods in creased for the first time since the MONEY RATES IN NEW YORK CITY Discount rate of Federal Reserve Bank; weekly averages of daily yields on 3 to 5-year Treasury notes and on Treasury bonds callable after 8 years, and weekly average of daily dealers' quotations on 90-day Treasury bills or rate on new bills offered in week. For weeks ending January 6, 1934, to September 17, 1938. MEMBER BANK RESERVES AND RELATED ITEMS 140 130 120 _____ MO ^ / A-/ \ V 1934 / V 80 OTHER •f-_ | RESERVE BALANCES ■[-RESERVE BANK ^ JV 1933 1936 1937 Index of physical volume of production, ad justed for seasonal variation. By months, Jan uary 1934 to August 1938. TREASURY DEPOSITS IT F 9 MMVC I 1938 Three-month moving averages of F. W. Dodge data for value of contracts awarded in 37 Eastern States, adjusted for seasonal varia tion. Latest figures based on data for June and July and estimate for August. Wednesday figures, January 3, 1934, to Sep tember 21, 1938. Page One summer of 1937 and in the nondurable goods industries, where employment had increased in July, there was a fur ther rise. Most leading industries re ported increases in the number of workers. Distribution. Distribution of com modities to consumers increased season ally from July to August. Department store sales showed about the usual rise and mail order sales increased, while variety store sales declined. In the first half of September sales at department stores increased more than seasonally. Freight car loadings increased some what further in August, reflecting chiefly larger shipments of miscellane ous freight. Commodity prices. Prices of silk and rubber showed some advance from the middle of August to the third week of September and there were also in creases at the end of the period in nonferrous metals. Wheat prices fluctu ated considerably but showed little net change in this period. Prices of cotton and wool declined somewhat, and there were further decreases in prices of some finished industrial products. Bank credit. A heavy inflow of gold from abroad during the five weeks end ing September 21 resulted in an in crease of over $500,000,000 in the monetary gold stock. Member bank re serves were increased by Treasury pay ments for gold acquired but were sharply reduced in the last week of the period by payments to the Treasury for cash purchases of new securities and quarterly income tax collections. As a consequence of these transactions, ex cess reserves, which had increased to $3,130,000,000, were reduced to $2,740, 000,000 on September 21. Total loans and investments of re porting member banks in leading cities increased sharply during August and the first three weeks of September, re flecting chiefly an increase in holdings of United States Government obliga tions. Balances held in New York City for foreign banks showed a substantial increase. Money rates and bond yields. The average yield on long-term Treasury bonds increased in September from the low point reached at the end of August. The average rate on new issues of Treasury bills increased to 0.11 per cent, compared with 0.05 per cent. Yields on high grade corporate bonds increased slightly. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial production in the Philadel phia Federal Reserve District, after declining slightly in July, increased 3 per cent in August, reaching the high est level since March of this year. The seasonally adjusted index rose to 71 per cent of the 1923-25 average com pared with 68 in July and 92 a year ago. Substantial gains in the manu facture of consumers’ goods and in the production of bituminous coal were off set to some extent by a further con traction in the seasonally adjusted out put of anthracite and by a slight re duction in durable manufactured goods. Total production continued 28 per cent below last year. The value of contract awards for family houses and for commercial, fac portant field crops will be above the five-year average. Retail sales increased less than was to be seasonally expected from July to August, and the decline from a year ago widened from 12 to 14 per cent. Reports for the first half of September from a limited number of stores show a somewhat smaller decline from a year ago. Wholesale trade expanded slightly in August, most lines show ing increased sales. Stocks of goods in both channels of trade were some what larger than in July but substan tially below the volume on hand in 1937. Prices fluctuated irregularly through out August with agricultural staples showing some weakness. Industrial tory, and other buildings increased sharply from July to August. Total awards of building contracts advanced 17 per cent in the month but for the first eight months of the year remained 13 per cent under 1937. Industrial employment increased slightly from July to August but re mained 20 per cent below last year. Payrolls gained 6 per cent in the month but continued nearly one-third below August 1937. Early reports for Sep tember indicate that factory employ ment, payrolls, and man-hours have in creased further. Agricultural income this year has been relatively well maintained, show ing a decline of only 7 per cent from 1937. The yield of most of the im MANUFACTURING ACTIVITY RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT I (adj PRODUCTION — SALES rod SEAS VARIATION^ EMPLOYMENT PAYROLLS STOCKS 1933 Page Two 1934 1935 1936 1937 1933 1932 1933 1934 1935 1936 1937 1938 s * ► A raw materials, on the other hand, have remained generally firm. Quotations on steel scrap have receded somewhat from the high levels prevailing at the beginning of the month but other com modities have recently shown advances. Prices of all commodities, raw and finished combined, have advanced al most steadily since the low point reached in the third week of August. Manufacturing. Demand for most factory products in this district has continued to improve. Sales of textile products have shown further gains but the increase in this group appeared to be less pronounced than that in other lines. The volume of unfilled orders also has increased generally since July, but it remains substantially below the levels prevailing last year. Plant operations appear to have increased considerably since July but very few firms have reported any ad vance over a year ago. Stocks of both finished goods and raw materials have continued to decline, textile manufac turers reporting the greatest reduc tions. Factory employment in this district advanced 4 per cent from July to August, while the amount paid out in wages expanded more than 8 per cent. Preliminary reports for September in dicate that payrolls and working time have increased further, though they are still much lower than last year. In the first eight months of this year, as well as in August, employment aver aged approximately one-fifth and pay rolls one-third below the levels pre vailing in the corresponding periods a year ago. In Pennsylvania, employment in August also increased 4 per cent over the previous month, the greatest gains being at railroad repair shops, men’s clothing establishments, and plants producing leather goods. Small gains were also registered in the number of persons employed by iron and steel fabricators, while producers of unfin ished steel reduced the number on their payrolls. An increase of 10 per cent was reported in aggregate em ployee-hours from July to August. Wages paid by Pennsylvania manu facturers advanced over 9 per cent from July to August, the largest in creases being reported in the textile and clothing group. Average weekly earnings of employees in all lines com bined increased nearly 6 per cent from the previous month, despite a slight contraction in hourly earnings. The index of weekly earnings in Pennsyl- Business Indicators 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. Unadjusted indexes reflect merely the actual change which ‘may or may not Aug. June July1 Aug. 1937 1938 1938 1938 be typical. Aug. 1938 from 69 68 71p 65 66 7 Op 50 51 50p 74 77 83p 46 47 49 59 62 75p 88 65 66 61 82 78 83 82p 97 97 89 99 33 31 44 33 124 103 106 103p 147 103 128 116p 86 92 85 85 46 r 68 47 41p 42r 71 47 39p 76 47 50 r 53 528 423 424 431 248 239 166 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............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output..................................... Sales, totalt............................ Sales to industries!............... + + + + 3 5 1 8 4 +21 - 8 - 2 +12 + 8 Year ago -28 -30 -42 -23 -51 -36 ^Aug. Aug. June July 1937 1938 1938 1938 mos. 1937 -23 -24 -46 - 9 -56 -15 -17 + 5 + 1 92 92 94 91 109 85 Manufacturing—total............... 1938 from 8 Monti ago Industrial Production.... Not adjusted Per cent change -11 - 4 -31 - 0 + 3 -25 -17 -10 - 0 -21 - 8 -21 92 92 65 64 70p 69p 114 47 45 80 58 57 87 64 66 83 74 80 103 105 96 36 34 49 124 104 105 150 100 117 89 85 82 45r 60 40 42r 62 39 71 41 44 528 440 424 50 71 p 59 79p 106 38 103p 120p 82 40p 39p 50 431 68 64 + 5 + 7 + 0 + 2 + 2 - 5 - 5 + 4* + 9* + 10* -22* -36* -41* -21* 92 -34* 104 —42* 95 +1* + 6* -20* -31* -18* 123 -28* 189 + 9 +15 -18 + i -46 + 18 -40 -14 -30 -13 + 14 - 3 - 4 - 4 + 3 + 3* + 3* + 3 -10* + 1* + 2* + 0 + 3 - 3 -14 -14 64 69 -15 79 r 68r -17* -17* 93 76 -15* 77 65 -25 -25 83 79 -62* -54* 154 84 -12* - 5* 111 r 122 -14* - 3* 99r 121 51 -29 -35 78 -30 -34 79 53 -18 -29 47 60 55p 67 77 65 62 66 59 97 r 98 83r 85 52 54 53 55 47 49 + 18* +17* 243 241 254 230 227 243 150 155 155 -18 - 5 - 9 -37 -17 -23 - 9 -16 -14 -38 - 5 +50* -83* +63* 68 -38* 208 86 86 101 28 30 35 -14 -12 - 7 -31 - 7 -14 231 224 241 223 214 231 152 158 160 236 227 171 Employment and wages—Pa. Factory—wage earners................... Payrolls.......................................... Man-hours (1927-28 =100).. . . General (1932=100) Employment................................. Payrolls.......................................... 69 62 52 72 67 56 69 61 51 99 97 98 129 122 130 Building and real estate Contracts awardedf—total........... Residential!.................................. Non-residentialf.......................... Public works and utilities!.... Permits for building—17 cities. . . Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. . . . 56 41 71 65 24 55 428 52 30 42 46 36 42 34 38 76 76 14 13 49 48 315 301 66 77 10 48 426 +11 + 0 -21 - 7 -15 -47 -19 -35 59 57 39 72 71 35 77 86 22 13 53 48 411r 426 43 46 38 39 33 39 81 84 15 13 49 46 299 289 Distribution Retail trade —sales................... stocks................ Wholesale trade—sales................... _ stocks................ Life insurance sales.......................... New passenger auto, registrations . Hotels—Occupancy.. .(1934 = 100) Income, total (1934 =100) Freight car loadings—total............. Merchandise and miscellaneous . Coal............................................. 69 71r 98 76 70p 70 72 Business liquidations Number............................. Amount of liabilities... . 51 63 75 63 69 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ - 4 _ 1* Farm products............... Foods............................... Other commodities.... Retail food....................... Philadelphia................... Scranton......................... Aug. 1937 (In millions of dollars) May 1938 - 2 -11* — 9* — 3* - 2* 0* - 2* - i* - 4* Prices—United States Wholesale (1926 = 100). -10 + 6 -22* -16* - 5* - 8* - 9* -ii* -24* -15* — 4* - 7* - 8* - 9* July 1938 1938 Aug. 1938 75 85 80 68 29 31 30 28 87 78 69 73 81 80 82 77 79 69 74 81 80 81 78 67 73 81 78 81 86 87 86 85 89 82 r 77 73 % change from Month ago Year ago -8 0 -1 +33 + 8 - 3 - 4 0 +1 -1 +2 + 1 - 2 -33 Banking and credit Federal Reserve Bank Bills discounted............................ Other bills and securities........... Member bank reserves............... Reserve ratio (per cent)............. Reporting member banks Loans.............................................. Investments.................................. Deposits (a)................................... Bankers’ acceptances outstanding $ $ 0.9 217 369 72.9 $ 474 708 1,394 13.5 $ 1.6 214 388 74.6 434 $ 1.4 213 386 74.5 425 $ $ $ 666 686 1,385 10.4 1,385 9.0 * Computed from data unadjusted for seasonal variation. 1 Not included in production index. ! 3-month moving daily average centered at 3rd month. 1.3 234 375 70.4 $ 418 706 1,388 8.9 $ 1.2 234 358 69.9 418 714 1,372 9.1 -5 -12 p^Preliminary. r—Revised (a) Less cash items in process of collection ‘ Page Three SALES or ELECTRIC POWER STEEL PRICES AND INGOT PRODUCTION PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT PRODUCTION UNITED STATES TOTAL PRICES OF FINISHED STEEL ' TO INDUSTRIES [/^-PRODUCTION L PHILA. FED. RES DISTRICT , 1932 1934 1935 1937 vania manufacturing plants was higher in August than at any time since last November. Employment and payrolls in south ern New Jersey advanced nearly 9 per cent from July but remained approxi mately one-fifth below 1937. In Dela ware, employment increased more than 13 per cent in August and payrolls ap proximately 4 per cent. The index of employee-hours stood at the high est level since December 1937. Output of manufactures in August increased for the second consecutive month on a seasonally adjusted basis, the combined index rising from 66 to 70, compared with an advance from 65 to 66 in the previous period. Last year manufacturing activity declined in these months. Factory output in August, however, was nearly onefourth below a year ago and in the first eight months averaged 30 per cent less than in the same period of 1937. Output of durable goods receded slightly, losing the gain which oc curred in the previous month. Con sumers’ goods, however, showed a sub stantial increase, the adjusted index of production advancing from 77 in July to 83 in August. Compared with 1937, the output of consumers’ goods in August declined only 9 per cent, while the volume of durable goods was scarcely more than half that produced a year earlier. Of the various groups, textile prod ucts showed the greatest increase from July to August, advancing over 20 per cent. Within this group the most sig nificant gains occurred in the produc tion of floor coverings, men’s cloth ing, and silk products. A small expan Page Four 1939 1933 1934 sion in the production of metal prod ucts was accounted for by substantial gains in the output of pig iron and steel castings. Both output and sales of electric power in August increased somewhat over July. The seasonally adjusted index of total sales of electricity was the highest since December 1937, while the index of output was at the highest level since April of last year. Coal and other fuels. Mining com panies report some increase in the demand for anthracite coal, and pre liminary data for the opening weeks of September indicate a higher level of operations than in the preceding month. August output on a daily average basis was virtually the same as in July, although a substantial in crease is to be expected seasonally. Accordingly, the adjusted index of pro duction dropped from 47 to 39 per cent of the 1923-25 average. Shipments of hard coal declined from July to Au gust and in the latter month were smaller than a year earlier. Output likewise compared unfavorably with a year ago, figures for August showing a decline of 7 per cent and for the first eight months of 1938, a decrease of 14 per cent. A measure of improvement in the industrial situation is indicated by numerous reports of an increased de mand for bituminous coal in Septem ber. The seasonally adjusted index of tonnage mined in Pennsylvania has shown a steady rise from 46 per cent of the 1923-25 average in April to 53 in August, and reports for the early part of September show further gains in actual output. Production in Au 1935 1936 1937 1938 gust, however, was still 31 per cent under a year earlier and for the year to date has shown a decline of 38 per cent. There was a rise of 15 per cent in the output of by-product coke from July to August, when little change ordinarily occurs, but production still was much under a year ago. Prelim inary figures indicate that the output of gas and fuel oils in August de clined about 6 per cent from the pre vious month and 16 per cent from August 1937. Building and real estate. The value of building contracts awarded in this dis trict increased 17 per cent in August to $13,157,000 but continued 18 per cent smaller than a year ago. The gain over July reflected larger awards for all types of construction except apart ments and hotels, educational buildings, and public works and utilities. Con tracts let for family houses, which have increased sharply since January, were 26 per cent greater than in July and 19 per cent above a year ago. This Building contracts Philadelphia Federal Reserve District Per cent change August 1938 1938 (000’s From from omitted) month 8 mos. ago 1937 $ 5,418 + 26 + 57 + 71 +306 - 31 +107 - 21 + 4 - 24 - 7 - 23 - 77 - 5 + 119 $ 9,956 3,201 + 24 - 2 - 13 - 15 Grand total................. *13,157 + 17 - 13 627 4,791 4,538 1,497 767 748 1,526 Public works and utilities. + 6 - 52 Source: F. W. Dodge Corporation. VALUE OF BUILDING CONTRACTS AWARDED PHILADELPHIA FEDERAL RESERVE DISTRICT SALES OF NEW PASSENGER AUTOMOBILES THOUSANDS OF CARS PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT 1937 .PRICES OF BUILDING MATERIALS (ism.ioo) NON-RESIDENTIAL RESIDENTIAL CONTRACTS ADJ. FOB SEASONAL VARIATION. l9g3-25» 100 (a 1932 1933 1934 1935 1936 was the first month in 1938 to show an increase over the corresponding month of 1937. In the first eight months of this year awards of building contracts approxi mated $101,000,000, or 13 per cent less than in the same period of 1937. Although the local real estate situa tion continues less active than in the spring of last year, conditions generally have shown improvement over the past few months. In the residential field, demand for new houses has increased considerably since early this year. Sales of old properties, particularly in the price range above $6,000, however, have not been numerous. There has been some seasonal gain in the renting demand for apartments and small houses, and in the case of the latter few vacancies exist. Rentals generally continue firm although concessions have been made in the higher brackets. Inquiries for commercial and industrial space have increased somewhat in re cent weeks, and the available number of desirable properties in this class is smaller than in the autumn of 1937. Wholesale prices of building mate rials have shown greater firmness, re flecting chiefly increased quotations for face brick and yellow pine flooring. The price index of the Bureau of Labor Statistics, after reaching at the close of July the lowest level in eighteen months, showed virtually no change during August but advanced slightly in September. Agriculture. Although fall plowing and seeding were delayed by excessive rains in mid-September, growing con ditions for late crops and pastures sub sequently have shown marked improve ment. A considerable portion of the 1938 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT OCT NOV rye crop has been planted, and wheat seeding, which was postponed because of dry weather earlier in the month, is progressing rapidly. The harvest of most field crops in this district is nearly completed. Yields appear to be above the five-year aver age except in the case of white pota toes, which have been damaged con siderably by blight. Production of tobacco, an important crop in Penn sylvania, is expected to be 13 per cent greater than a year ago and 10 per cent larger than the 1932-36 average. The harvest of orchard fruits, on the other hand, will be somewhat smaller this year than last hut will probably exceed the average. Farm cash income in the three states included in this district continues below 1937 levels, the decline in the firstseven months this year amounting to 7 per cent. This unfavorable compari son reflected substantially lower prices received for crops. In the country as a whole average prices for agricultural commodities have shown a rising tendency since the third week of August, when they reached the lowest level in several years. Distribution, trade and service. Retail trade sales of general merchandise, wearing apparel and shoes increased less than was to be expected from July to August so that the index, adjusted for seasonal variation, declined 4 per cent. Contractions from July ranged from 5 per cent in the case of de partment stores to 19 per cent at credit stores. The index of women’s apparel stores was the only one to show an increase over the previous month. The volume of goods sold by all re DEC porting establishments declined 14 per cent from August 1937, while in May, June, and July, contractions from the corresponding months in the previous year were 22 per cent, 16 per cent, and 12 per cent, respectively. Sales by women’s apparel stores in August compared least unfavorably with a year ago, showing a decrease of 9 per cent compared with reductions of 15 and 17 per cent respectively in sales by department and men’s apparel stores. In the first eight months of the year also, the volume of sales was 14 per cent below the same period in 1937. Aggregate sales by reporting whole salers increased slightly from July to August but remained substantially below a year ago. Compared with July, electrical supplies and groceries were the only lines to show actual de creases. The volume of boots and shoes distributed to retailers was more than double that in July. In the eight months’ period, groceries, drugs, and footwear showed the smallest declines in comparison with last year, while sales of jewelry and electrical sup plies showed the greatest. Inventories on hand at both retail and wholesale establishments increased in August but at the end of the month were 15 per cent less than a year ago. Compared with the earlier year, de clines in retail stocks ranged from 13 per cent at department stores to 16 per cent at credit stores. Inventories in all wholesale lines except drugs showed significant contractions in the same period. The volume of freight shipped by rail increased for the third successive month, owing to a gain in loadings of Page Five merchandise and miscellaneous mate rials. The margin of decrease from a year ago has narrowed consistently since May, total car loadings in August being 29 per cent below August 1937. Shipments of coal, however, have de clined on a seasonally adjusted basis in each of the last two months. Sales of new passenger automobiles in this district were over 60 per cent below a year ago. This is attributable partly to the fact that automobile pro ducers closed their plants for model change-overs earlier this year than last. Total revenue reported by nonresort hotels in this district increased 2 per cent from July but was 14 per cent under August 1937. Hotel business Philadelphia Federal Reserve District Aug.: per cent 1938 change from from 8 Month Year ago ago mos. 1937 0 + o Room occupancy.................... Per cent of capacity used: Aug. 1938................ 45 .9 July 1938................ 45 .3 Aug. 1937................ 52.0 Revenue from: Guest rooms........................ Food....................................... Other sources...................... +t -12 -5 +2 -14 -17 -12 -3 -4 -3 Total revenue.................. +2 -14 -3 +3 +3 Banking conditions. A sluggish de mand for commercial loans, an increase in investments, and large excess re serves have been the principal features of the banking situation. For some months the ratio of excess to required reserves has fluctuated narrowly around 50 per cent at the country banks. While a substantial decline has oc curred at banks in Philadelphia since early June, the surplus funds in the first half of September still averaged 32 per cent of requirements. The com bined excess of all members in this half-month was $98,800,000. The virtual absence of borrowing by banks and their large balances with correspondents give further evidence of easy money conditions. At the end of June member banks in the Phila delphia Federal Reserve District re ported $267,000,000 of demand bal ances with domestic banks as against an average of but $109,000,000 in 1929. Reserve require ments of member banks (Dollar figures in millions) Held Reserve city banks: Aug. 1-15........... $220.9 $164.2 $56.7 Aug. 16-31........... 217.8 163 2 54.6 Sept. 1-15........... 215.5 162.7 52.8 35% 33 * 32 ’ Country banks: Aug. 1-15........... Aug. 16-31........... Sept. 1-15........... 52 * 50 ” 50 • 92.0 91.8 92.2 47.6 45.6 46.0 Sept. 21. 1938 Bills discounted.......... $ 1.1 Industrial advances. . U. S. securities............ 3.3 230.8 Total.......................... Note circulation......... Member bank deposits U. S. general account. Foreign bank deposits Other deposits............. Total reserves............. Reserve ratio............... $235.2 304.4 354.2 56.4 19.1 2.4 521.7 70.8% Changes in— -$0.1 + 6.0 0 -$0.1 + 1.8 - 0.1 +21.5 + 7.7 + 0.3 +28.7 + 0.9% Five weeks One year 187 -$ 6 —#36 — 5 - 9 — 3 — 2 - 1 - 7 Assets Commercial loans................. S +$ 0.4 - 0.2 - 0.5 + 17.4 20 Loans to brokers, etc........... Other loans to carry secur. +$17.1 - 12.2 - 8.7 + 46.7 - 3.3 - 3.8 - 0.5 - 1.9% Changes in— Sept. 21, 1938 Reporting member banks (000,000’s omitted) One year Five weeks Other loans............................. - 99 1 + 15 34 58 3 2 Total loans......................... $ 415 -$ 4 —$63 Government securities........ $ Obligations fully guar’teed. Other securities.................... 348 95 284 +#u + i + i +$32 — 2 + 11 Total investments........... $ Lately the fluctuations in reserves have been comparatively small and the aggregate of $354,200,000 on Septem ber 21 was virtually the same as that reported five weeks earlier. Large sums flowed into the' Treasurer’s ac count at the reserve bank as a result of income taxes and cash payments for new issues of government secur ities, but the net amount taken from the local market by all Treasury oper ations was only $18,600,000 for the period as a whole. The effect of this loss upon reserves was almost entirely offset by a favorable balance of $16, 300,000 in commercial and financial transactions with other districts and by funds derived from other sources. Currency demand has shown little change other than the temporary ex pansion over Labor Day. The improvement in business activity and in equity prices since the spring has had little effect upon the amount of credit extended in this district. Commercial demand has not been suf ficient to cause even a seasonal rise in the volume of loans, and the ac commodation extended to brokers, dealers, and individuals to purchase or carry securities has varied little for months past. In the five weeks ended September 21 the trend of loans at the reporting member banks in leading cities con tinued generally downward, declining $4,000,000 in this period. A contrac tion of $6,000,000 in commercial loans was in sharp contrast to an expansion 727 +$13 +#41 Total loans & investments $1,142 Reserve with F. R. Bank. . 229 17 Cash in vault........................ Balances with other banks. 151 83 Other assets—net................. Liabilities Demand deposits, adjusted $ 740 294 U. S. Government deposits. 40 304 Interbank deposits............... +$ 9 + 5 + 1 - 10 + 1 + i - 1 + 28 — 5 Other liabilities..................... + —$22 —$53 + 4 + 22 + 36 - 1 — 5 - 2 -#11 + 20 - 6 18 226 3 — of $8,000,000 in the corresponding period last year. Approximately $187, 000,000 of commercial loans were out standing, indicating a decrease of $36, 000,000 or 16 per cent from a year earlier. Investments of the reporting banks, on the other hand, have shown further expansion. The portfolio of $727, 000,000 on September 21 was $78, 000,000 over the low point for the current year reached last April and was at the highest level since the spring of 1937. All but $2,000,000 of the gain of $13,000,000 in the past five weeks was in United States Govern ment securities, reflecting allotment of the new issues. A reduction of $11,000,000 in ad justed demand deposits is accounted for by customers’ payments in connec tion with income taxes and Treasury securities. Similar factors probably account for a decrease of $6,000,000 in balances held for other banks. Total deposits, however, increased slightly, owing to an expansion of $20,000,000 in deposits of Federal Government rep- MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending— Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 21 Changes in five weeks Sources of funds: . Reserve bank credit extended in district. . . Commercial transfers (chiefly interdistrict). Treasury operations........................................... + 1.5 +1.6 -7.0 +1.0 — 5.5 +9.4 -2.8 +0.9 +5.2 +4.6 -9.2 +4.6 - 1.0 +28.5 -30.8 + 3.3 +16.3 -18.6 Total................................................................... Ratio of Ex excess Re quired cess to re quired 139.6 137.4 138.2 Federal Reserve Bank of Philadelphia (Dollar figures in millions) -3.9 +4.9 +3.3 +0.0 - 3.3 + 1.0 Uses of funds: Currency demand................. .............................. Member bank reserve deposits....................... “Other deposits” at reserve bank................. Unexpended capital funds................................ -1.5 -2.6 +0.2 -0.0 +0.9 +4.0 +0.0 -0.0 +3.4 -0.7 +0.6 -0.0 -0.6 -1.2 + 1.9 -0.1 + + + + + +4.9 +3.3 +0.0 - 3.3 Philadelphia Federal Reserve District (Millions of dollars) Total................................................................... -3.9 2.0 0.4 2.4 0.7 0.2 0.1 0.3 0.6 + 1.0 resenting payment for deposit credit for Treasury securities. Assets of the reporting banks, other than cash items in process of collection, on September 21 were $1,622,000,000. While this amount was practically the same as a year earlier, material changes have taken place in its composi tion. Loans have declined $63,000,000, while investments and balances with correspondents increased $41,000,000 and $28,000,000 respectively. REPORTING MEMBER BANKS MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT (All figures are rounded from original data) Manufacturing Indexes Employment* Iron, steel and products Non-fer. metal prods. . . Transportation equip.. . Textiles and clothing. .. Textiles......................... Clothing........................ Food products................. Stone, clay and glass. . . Lumber products........... Chemicals and products Leather and products... Paper and printing......... Printing........................ Others: Cigars and tobacco... Rubber tires, goods. . Musical instruments . DEPOSITS' TOTAL LOANS AND INVESTMENTS 72 -22 61 -34 -26 -27 100 48 90 84 112 103 64 54 79 84 92 86 66 80 47 -12 -13 - 9 - 3 -28 + + + + + 4 67 -36 1 1 60 105 43 80 77 96 108 58 47 82 79 91 85 -52 -35 -37 +11 - 4 - 4 -16 + 5 + 6 + 3 -11 * Figures from 2314 plants. Aug. July 1937 1938 -41 0 6 5 1 2 0 0 -11 -12 - 8 - 6 + 18 + 18 + 17 - 2 +14 +13 + 3 + 4 + 1 - 0 + 10 -52 +10 -35 + 3 -52 +11 -12 +18 -13 +18 - 6 + 17 - 9 - 2 -42 + 12 -31 + 10 -35 + 2 -12 + 7 -11 + 2 - 7 - 0 - 8 +1 41 8 8 - 7 - 5 -17 + 9 + 10 Aug. 1938— per cent change from 88 9 + + + + + -21 Employehours f Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weight Aug. change from Aug. change from 1938 1938 ed proportionately.) index Aug. July index Aug. July 1937 1938 1937 1938 All Manufacturing. . . 1600 IOOO Employment and Payrolls in Pennsylvania -26 + 5 + 3 + 3 - 7 - 1 -26 62 -37 -27 -27 -16 - 9 - 1 +11 + 4 + 4 + 4 t Figures from 2085 plants. INVESTMENTS General Index Numbers Covering twelve branches of trade and industry LOANS Employment (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 193 6 General index 19 3 7 19 3 8 Less cash items in process of collection Percentage change—August 1938 from August 1937 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... Y ork....................... Wage payments -18 -32 -31 -61 -35 -58 -16 -25 -25 -13 -22 -39 -14 -20 -18 -12 -16 -10 + 1 -27 -16 -22 - 8 - 7 -31 -23 Building permits (value) - 30 93 90 92 66 + 24 + 148 + 99 + 3 - 48 - 76 - 77 Debits -13 -22 + 8 —32 -16 - 7 + 7 - 7 + 3 -13 + 15 -14 (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................... Aug. 1938 index 98 113 50 94 58 100 Aug. 1937 July 1938 -20 -22 -22 -38 -22 -15 - 3 -12 111 - 6 - 3 - 8 - 1 107 100 105 Aug. 1938 index +1 +4 -16 +2 + 2 +2 - 3 +1 - 2 +o - 1 - 2 - 4 -24 138 96 95 Retail trade sales 130 163 34 144 78 181 158 104 110 111 113 121 125 Per cent change from Aug. 1937 July 1938 -31 -36 -32 -33 -39 -32 - 9 +6 +9 - 1 +16 + 5 +12 - 2 +2 - 3 - 2 - 1 - 3 - 7 - 2 -11 + 9 5 3 3 INDUSTRIAL EMPLOYMENT AND PAYROLLS -16 -28 -14 - 9 -15 -13 - 4 Per cent change from Payrolls • PENNSYLVANIA PERCENT -10 - 6 PAYROLLS -15 -11 August 1938 from July 1938 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... Y ork....................... + 0 +24 + 2 + 1 + 5 + 3 + 9 - 1 + 1 + 8 + 1 0 + 7 + 4 +35 + 7 + 6 + 8 + 4 +24 +12 +16 + 6 + 2 +11 + + - 87 24 17 34 +100 - 0 + + + - 18 51 4 35 67 72 27 - 4 - 1 + 5 + 5 + - 6 8 2 -11 +10 7 +1 +10 - 7 - 4 - 2 +10 - 7 + 5 -13 - 2 - 5 EMPLOYMENT - 4 +1 1935 1936 1937 1938 * Area not restricted to the corporate limits of cities given here. Page Seven I OUTPUT OF MANUFACTURES PHILADELPHIA FEDERAL RESERVE DISTRICT Index numbers of individual lines of trade and manufactures AOJUSTtO ron SEASONAL VARIATION STEEL PER CENT IM3-S5AVG-100 IOO---------- 50 Philadelphia Federal Reserve District 25---------O LOCOMOT VES AND C RS 751---------- Index numbers: percentages of the 1923-1925 average as 100 Not adjusted Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Aug. 1938 from 1938 from Month Year ago ago O mos. 1937 8 X. 25 —/ Per cent change Unadjusted indexes reflect merely the actual change which may or may not Aug. I une July Aug. 1937 1938 1938 1938 be typical. 50--------- Aug. June July Aug. 1937 1938 1938 1938 SILK 125 °°1X V ^ I 50--------- Retail trade Sales Total of all stores........................... 81 Department................................. 73r Men’s apparel............................. 75 Women’s apparel....................... 126 Shoe............................................... 64 Credit............................................ 88 r Stocks of goods 82 60 r 125 79 109 r 25 69 63 «7 88 73 73 71r 53 97 67 93 73 65 70p 62 66 63 85 r 114 64 56 p 92 74p - 4 - 5 - 5 +33 -13 -19 68 + + + + + 70 51 52 100 107 64 67 88 91 7 5 3 51 46 54 57 r 59 60 -14 -14 — 15 - 9 64 56 59 r 86 86 -12 -10 87 -16 -16 48 83 79 r 56 r 68 r 63 3 2 69 63 73 -14 — 15 -17 - 9 -13 -14 -15 -16 Rate of stock turnover 110 79 107 r 68 51 86 66 90 47 75 60 88 55p 48 49 78 43p 70p 67 48 94 67 90 75---------- 50 25---------O H OSIERY 1501---------125---------- 2.33 2.48 /V" V + 3* -17* +120* +11* + 1* + 2* +16* -25* - 8* —41* — 2* — 9* + 3* —20* +16* -41* +16* -20* -17* 93 - 8* - 3* -28* -37* — 6* -25* -31* -25* 76 75 77 c EMENT IOO --------- 50 ------ r, 25 O LUMBE R PRODUCT 75 50--------- Stocks of goods + + + + + + - 3* 9* 4* 9* 2* 0* 7* 2* 77 — 15* + 1* - 8* -17* — 16* — 16* - 8* -27* 65 63 65 25 PAPER AND WOOD PULP lOOi--------75--------50 -------25 Output of manufactures 26 27 37 91 104 43 46 47 49 48 81 51 136 42 45 59 53 125 55 51 15 13 12 13 76 38 37 42 13 16 14 45 264 248 257 219 86 74 69 r 84 54 43 47 54 38 40 68 r 31 109 57 58 88 111 83 87 99 125 114 129 123 50 58 51 54 55 22 26 27 Lumber and products........................ 34 23 21 23 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.................................................. 84 89 88 93 89 33 48 77 67 72 71p 67 96 96 87 98 77 63 66 66 95 91 89 88 167 135 178 171 127 74 80 63p 92 66 72 72 76 76 75 73 160 143 149 140p 139 64 66 76 +38 + 2 - 2 +33 + 3 + 14 + 14 + 8 -15 +23 +16 + 7 +51 +13 - 4 + 6 + 5 +11 - 9* + 5 +62 - 2 + 12 - 0 - 0 - 4 -22 - 1 - 3 - 7 +15 -59 -55 -40 -57 -58 -17 - 3 + 0 -41 -19 -60 -54 -46 -58 -46 -32 -40 -55 - 1 -27 -46 -49 -62 -11 -22 - 1 + 9 -51 -31 -23 -13 -59 -33 - 3* - 2 -24 - 5 - 9 -16 - 8 +20 -44 -68 + 6* +u -13 + 6 + 3 -14 - 7 + 2 -51 -22 - 4 -13 -45 81 106 79 131 139 11 71 45 262 84 55 61 r 100 97 116 63 58 37 94 73 76 74 102 77 92 -10 179 -38 122 -20 92 -21 77 - 9 161 -44 136 25 25 33 44 42 48 50 47 47 44 40 57 55 54 58 14 14 13 38 36 40 16 13 14 246 250 217 70 67r 82 41 44 55 29 33 36 55 53 80 81 71 86 114 107 114 69 60 68 23 25 28 24 23 25 89 97 89 85 79 79 36 49 66 48 59 63p 104 94 105 62 64 66 90 86 86 128 166 183 74 71 60p 66 71 72 77 70 74 144 150 141p 64 65 74 SHOES 175--------- ---------------------------- * Computed from data unadjusted for seasonal variation. p—Preliminary. r—Revised. ,, AA/ v IOO--------75 N \ — GOAT AND KID LEATH ER 1501--------- :iaA \AvA \ f** 75--------- — 50 PETROL EUM REFINIh G 2001--------175--------- w- ISO —— vA 100 ........ CIGARS 150-------125 --------- y-VV/syN — 50 19 34 — 150------ r 75-------- Page Eight \ H- 75--------50 Sales Leather, goat and kid........................ Explosives............................................. Paints and varnishes.......................... Petroleum products............................ Coke, by-product................................ IOO---------- co - 6* Wholesale trade Slaughtering, meat packing............. Sugar refining...................................... Canning and preserving.................... Cigars..................................................... Paper and wood pulp........................ Printing and publishing.................... WOOLENS 4.ND WORST EDS 125 1935 1936 1937 1938
@FedFRASER