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THE BUSINESS REVIEWrfyye THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT MAY i, 1940 ^ FEDERAL RESERVE BANK OF PHILADELPHIA % In i~£) /I ^r Business and Banking Conditions in the United States Industrial activity continued to de cline during March but at a somewhat slower rate than in the preceding two months, and in the first half of April there was little further decrease. Wholesale prices of basic commodities decreased somewhat in the latter half of March but recovered by the middle of April. Distribution of commodities to domestic consumers continued in large volume, and exports were at the high levels reached last December. Production. The Board s index of in dustrial production, which is adjusted for usual seasonal variations and for the number of working days, was 103 in March compared with 109 in Feb ruary. The decline reflected chiefly a further reduction in output of steel and considerable decreases in activity at cotton and woolen textile mills. Steel ingot production declined from an average of 69 per cent of capacity in February to an average of 64 per cent in March. In the first half of April output was at around 61 per cent of capacity. Automobile production in March and the first half of April was maintained at the high rate prevailing during January and February but did INDUSTRIAL PRODUCTION not show the increase customary at this season. Retail sales of automobiles continued in large volume, and dealers’ stocks of new cars declined somewhat from the high level reached earlier. In the machinery industries, activity showed some decline from the high rate of other recent months, while at aircraft factories and shipyards activity continued at peak levels. Output of lumber and plate glass advanced sea sonally in March. In the woolen textile industry, where activity had been declining from the high level reached last November, there was a further sharp reduction in March. Activity at cotton textile mills also declined considerably but re mained at a somewhat higher level than prevailed a year ago. Shoe pro duction likewise declined considerably in March. At silk mills activity re mained at an exceptionally low level, while rayon production was large. Mineral production was maintained in large volume in March. There was some further reduction in output of bituminous coal, but output of anthra cite increased, following a sharp de cline in February. Crude petroleum FACTORY EMPLOYMENT production continued at record levels. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, increased consid erably in March, as is usual at this season. The increase was principally in awards for private work, which in March approximately equalled those in the corresponding period last year. Public awards increased somewhat, fol lowing declines in January and Febru ary, but were in smaller volume than a year ago. Private residential build ing rose by about the usual seasonal amount. Distribution. Sales of general merEXCESS RESERVES OF MEMBER BANKS Wednesday figures partly estimated, January 3, 1934 to April 10, 1940. INCOME PAYMENTS Page One chandise at department and variety stores and by mail-order houses in creased by about the usual seasonal amount from February to March, with allowance for the earlier date of Easter this year. In the first week of April sales at department stores were at a higher level than in March. Freight car loadings showed little change from February to March, al though a rise is usual between these months. Shipments of miscellaneous freight showed considerably less than the usual seasonal increase, and there was some further decline in loadings of coal. Foreign trade. Exports of United States merchandise in March continued near the high level reached last De cember. Agricultural exports, prin cipally cotton, decreased from Febru ary to March, while there were substantial increases in shipments of commercial vehicles and in metal work ing, agricultural, and other types of machinery. During March, the country’s mone tary gold stock increased by $256,000, 000. In the first two weeks of April the rate of gold inflow was accelerated, acquisitions in this period amounting to $145,000,000. Commodity prices. Prices of a num ber of basic agricultural and industrial commodities, which had declined in the latter part of March, advanced during the second week in April. Prices of certain finished steel products, on the other hand, were reduced, and prices of most other commodities showed lit tle change. Government security market. Prices of Treasury bonds moved sharply up ward during March and the first few days of April to a new high level since last summer. On April 9, how ever, on receipt of news of the ex pansion of war activities in Europe, a decline of about one point occurred in long-term bonds. Subsequently the market recovered part of the loss. The yield on the 1960-1965 Treasury bonds was 2.31 per cent on April 15, com pared with a low of 2.26 per cent on April 2. Bank credit. Reflecting continued heavy gold imports, excess reserves of member banks increased during the four weeks ending April 10 to a record high level of $5,950,000,000. Total loans and investments at banks in 101 leading cities, which had shown little net change during March, increased in the first two weeks of April, reflecting purchases of United States Govern ment obligations. Business and Banking Conditions in the Philadelphia Federal Reserve District The decline in industrial and trade activity in the Third Federal Reserve District appears to have leveled off in March and April, and some signs of improvement are in evidence in several important lines. Operations have been well sustained in some basic industries, such as machine tools and shipbuild ing, and substantial increases in orders and operations have been reported in building materials. Domestic buying of most manufactured goods continues sporadic, but foreign demand, particu larly for armaments and other heavy materials, has been well maintained. Inventories at reporting manufactur ing plants in this district are somewhat larger than a year ago but are not generally regarded as excessive in view of prevailing conditions. The index of industrial production in this district declined no more than usual in March, so that on a seasonally adjusted basis it continued at the same level as in February, 12 per cent below the two afid a half year peak reached in December. In the first quarter, production in this district averaged 8 per cent below the fourth quarter of 1939, compared with a decline of 11 per cent in the country as a whole. The shift in production in this dis trict from February to March reflected a decline in the output of crude oil, a somewhat greater than usual reduction in manufacturing, and a small increase in the output of anthracite, when a sharp drop was to be expected. Employment and payrolls in twelve lines of trade and industry in this dis trict increased slightly from February to March and were well above a year ago. The gains in the month reflected improvement in the case of coal min ing, quarrying, construction, and trade. Construction activity increased sub stantially more than usual from Feb ruary to March, owing chiefly to a sharp gain in residential building. Ac tivity in March was near the level of a year ago but in the first quarter was less than in 1939. Retail trade sales increased slightly less than was to be expected in March, metal and textile activity PRODUCTION AND PRICES EMPLOYEE-HOURS PERCENT PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT INDUSTRIAL PRODUCTION IRON AND STEEL PRODUCTS COMMODITY PRICES U.S. (other than farm products AND foods) i ,<* __ NON-FERROUS _ _ _ i METALS PRICES OF RAW MATERIALS 1934 1935 Page Two 1937 1938 1939 TEXTILES 1935 1936 1937 1938 1939 1940 and wholesale trade increased about 3 per cent. Stocks of goods at both types of establishments increased about as much as was to be expected, and in retail stores were somewhat larger than a year earlier. Prices of commodities were gener ally weak throughout March but showed firmness in April, particularly in the case of staple agricultural prod ucts and foods. Basic industrial mate rials were mixed, with some strength appearing in quotations on such goods as metals, rubber, and hides. Manufacturing. The demand for fac tory products in this district continued to slacken somewhat from the middle of March to the middle of April, but the decline appeared to be substantially smaller than in any of the four pre ceding months. The sharpest reduc tion in inquiries and sales appeared to be at reporting textile mills, and the only significant gain was at plants producing building materials. Pur chases of primary steel continue slow, but some signs of improvement have appeared in the markets for several finished and semifinished steel prod ucts. Prices of most manufactured goods in this district are reported to have declined somewhat further but are still well above a year ago. The volume of unfilled orders at re porting factories is still being reduced and is lower than last year, except in the iron and steel industry. Opera tions declined again from the middle of March to the middle of April except at those plants turning out building materials. Less is being spent at pres ent on new equipment and plant expan sion than was the case last fall. Inventories of finished manufactured goods at reporting concerns increased somewhat in the month, except at plants producing primary iron and steel prod ucts, and were near the level of a year ago. Stocks of raw materials in gen eral were about the same as a month and a year earlier. Employment in Pennsylvania fac tories declined about 2 per cent from February to March, when there is usually no change, and payrolls were reduced 1 per cent, as against an ex pected small seasonal rise. Preliminary figures showed a somewhat greater than seasonal reduction in employment and payrolls early in April. An estimated 904,000 workers were employed in Pennsylvania factories in March, representing a reduction of 5 per cent from the peak levels reached 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. I Month Year ago ago Unadjusted indexes reflect merely the actual change which may or may not Mar. Jan. Feb. Mar. 1939 1940 1940 1940 be typical. Industrial production........ 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............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output...................................... Sales, total!............................ Sales to industriest............... 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.................................................. 258 292 277 245 289 286 157 186 181 88 r 84 85 r 82 253 275 261 248 281 264 165 192 183 270 271 189 + 3 + 2 + 3 + 7 + 9 +14 + 8 +10 + 9 — 2* - 1* - 2* + 8* +13* +17* +10* +18* +23* + 0* + 1* + 6* +11* + 6* 105r 111 111 r 111 +13* 139 r 159 152r 154 +20 +20 - 8 +30 -24 + i -16 + 0 -11 -22 +65 +22 +18 - 8 - 8 -28 +23 + 0 +17 - 9 - 1 - 0 + 3* + 2* + 7 + 33* + 0* + 0* + 2 + 3 + 1* - 1* +11 +40* + 0* + 3* + 4 63 r 64 r 56 r 76r 21 44 249 47 53 51 47 40 47 78 96 23 33 55 51 212 270 63 57 44 125 25 52 226 78 77 85 77 80 80 79p 80p 77 93 81 86 62 63 64 81 81 76 71 70 64 68 66 70 - 9 94 79 r 97 77 91 32 128 117 r 88 81 81 80 431 82p 81p 88 85 81 74p 99 93 76 76p 84 96 28 r 35 119 118p 117 107p 89 88 56 57p 54 55p 74 70 444 426 81 r 89 71 r 84 68 84 275 268 179 87 81 79 88 82 81 55 52 52 48 42 33 56 44 48 69 100 115 26 13 26 41 59 55 254 244 275 75 80 55 43 44 114 32 49 231 79p 82p 61 r 60 77 71 + 5* - 3 +10 - 6 + 8 + 5 + 8 86 83 93 -10 +41* 107 113 112 + 2* 119 118 119 + 1* 125 129 129 59 70 64 +17 +16 61 69 64 70 +13 62 81 +13* +36* -19* -76* -15* -50* 99r 85 35 91 70 16 80 21 +10 82 95 90 91 33 36 31 32 3* 77 3* 0* 4* 1* 1* 2* 66 70 80 76 78 73 79 69 72 84 79 69 71 83 78 77 75 78 68 70 83 84 93 89 93 + 5 +u 34 31 32 32 + 2 - 5 — - + 2* + 3* 0* + 3* + 1* - 1* + 3* Prices—United States Wholesale (1926 = 100). Farm products............... Foods............................... Other commodities.... Retail 65 r 88 75 76 93 35 110 127 87 52 50 67 426 79 78 81p 83 72p 93 77p 105 40 117p 104 p 87 66p 66p 69 417 Number............................. Amount of liabilities.... Check payments.................... Rate of collections (actual) Retail trade........................ + 9 + 9 +32 - 3 +40 - 9 +34 + 2 + 7 + 6 +10 - 4 + 3 + 2 + 2 +14 + 5 + 0 - 1 + 1 — 3 - 4 - 5 +1 + 0 + 6 +28 - 2 - 5 - 3 +26 +29 +1 - 6 82p 80p Business liquidations Payment of accounts + 4 + 4 +23 - 8 +31 — 15 +32 - 0 + 3 - 0 + 7 -15 + 1 + 8 + S + 5 - 0 Mar. Jan. Feb. Mar. 1939 1940 1940 1940 79 r 89 r 82 78 86 81 80 88 85 83 64 r 97 86 85 77 r 76 97 92 71 77 79 77 101 110 99 38 32r 41 110 131 119 123 113r 110 86 88 89 74 53 61 75 51 61 65 70 68 418 449 444 Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 = 100). . . . General (1932 = 100) Employment................................. Payrolls.......................................... Contracts awarded f—total........... Residential!................................... NonresidentialJ. ................... Public works and utilities! . . . . Permits for building—17 cities. .. Real estate deeds—Philadelphia!. Writs for Sheriff sales—Phila........ 1940 from 3 mos. 1939 Mar. 1940 from Employment and wages—Pa. Building and real estate Not adjusted Per cent change food....................... Philadelphia................... Scranton.......................... o* 1* 1* 0* 1* 0* 1* + + + + + 77 77 75 95 149 119 129 63 64 67 77 77 75 % change from Mar. 1939 Dec. 1939 Jan. 1940 Feb. 1940 Mar. 1940 $0.5 $0.7 $0.7 $0.6 $0.3 209 410 77.3 (In millions of dollars) 218 588 81.0 207 618 82.4 206 602 82.3 206 611 82.9 -50 0 + 1 + 1 -40 - 1 +49 + 7 $399 709 9.6 $418 728 10.1 $414 745 10.0 $419 747 9.5 $427 726 9.7 + 2 - 3 + 2 + 7 + 2 Month ago Year ago Banking and credit Federal Reserve Bank Reporting member banks Bankers’ acceptances outstanding. * Computed from data unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. X Not included in production index. p—Preliminary. +1 -Revised. Page Three METAL PRODUCTS-EMPLOYEE HOURS WORKED PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT TEXTILE FIBERS MILLIONS OF LBS. 400 A STEEL WORKS 'AND ROLLING MILLS UNITED STATES MILL TAKINGS PRICES DOLLARS ■HPER. LB — .150 COTTON, COTTON “V FOUNDRIES AND MACHINE SHOPS 1935 1936 1937 1936 at the end of last year. The number of workers, however, was still 8 per cent larger than in March 1939 and 10 per cent above the year’s low point last May. Factory wage payments in March were estimated at $21,800,000 a week, a decline of 10 per cent from the December high but a gain of 13 per cent from a year ago and 19 per cent from the low last May. The largest declines in employment and payrolls from February to March were in the iron and steel, nonferrous metal, and textile industries. In the iron and steel group the least favorable reports were from such primary pro ducing plants as blast furnaces, steel works and rolling mills, and foundries. Some improvement was indicated in the case of forgings and a wide variety of finished products. In the textile industry, substantial declines were re ported in woolens and worsteds, textile dyeing and finishing, carpets and rugs, and hosiery. Compared with March of 1939 the greatest improvement was in iron and steel, nonferrous metal prod ucts, and transportation equipment, while the sharpest decline in any in dividual line was in hosiery. Hourly earnings of factory workers in Pennsylvania continued at about 71 cents in March. Working time in creased fractionally in the month to about 37 hours a week, so that average weekly wages advanced to $25.97. Employment at Delaware factories increased 1 per cent from February to March to a level 6 per cent above March 1939. Wage payments expanded over 2 per cent in the month and were 11 per cent above a year earlier. In southern New Jersey, employment and payrolls increased 1 per cent in the month and were respectively 16 and 26 per cent above a year earlier. Page Four 1939 1940 1937 1938 The output of factory products in this district declined 1 per cent from February to March, on a seasonally adjusted basis, but was 4 per cent larger than in March 1939. During the first quarter, production averaged 9 per cent higher this year than last. Output of durable goods increased 1 per cent in March, reflecting an un usually sharp expansion in the output of building materials and some fur ther improvement in transportation equipment. Operations in durable goods industries in March averaged 23 per cent and in the first quarter 32 per cent higher this year than last. By far the sharpest gains over a year ago were in metal products and trans portation equipment. In the nondurable goods industries, where production was 3 per cent lower in March than in February, the great est decline was in textile products, owing primarily to sharp reductions in the output of hosiery and carpets and rugs. Compared with last year pro duction of nondurable materials in March was 8 per cent less, and in the first quarter was 3 per cent smaller. Production of electric power declined 3 per cent less than usual from Febru ary to March; total sales were 2 per cent and sales to industry 3 per cent higher, on an adjusted basis. Coal and other fuels. Production of anthracite has continued active this spring when there is ordinarily a sub stantial decline, as demand has been unusually well sustained by continued cold weather. The output of mines in March aver aged about 145,000 tons a day, or slightly more than in the preceding month. Production in the first half of April, however, decreased to approxi mately 130,000 tons daily and was 1939 1940 1937 1938 1939 1940 much smaller than a year earlier. Nearly 13,000,000 tons of hard coal were mined in the first three months of 1940, an increase of 2 per cent from 1939 and the largest total since 1936. The market for Pennsylvania bitu minous coal remains quiet and the de mand from manufacturing plants, rail roads, and public utility companies has slackened somewhat further. Prices generally continue weak and are lower than in early 1939. Colliery output was well sustained in March, showing an increase of 5 per cent over a year ago. Productive ac tivity in the first half of April de creased about in line with seasonal expectations. In the first quarter of this year the production of soft coal totaled 27,300,000 tons, 14 per cent more than in 1939. Output of by-product coke declined about 3 per cent in March, continuing the downward trend that has been in evidence since December, when opera tions at plants turning out basic iron and steel began to slacken. Produc tion of gas and fuel oils showed little change from February to March and remained well about the level of a year ago. Activity of coke ovens and oil refineries has been substantially higher thus far this year than last. Building. Construction activity in this district increased further in March, ow ing chiefly to expanding operations on family dwellings and public works and utilities. Industrial building activity decreased somewhat, following a sub stantial gain in the preceding month. The value of new contract awards in March was about $16,000,000, an increase of 27 per cent from February but a decline of 11 per cent from the unusually large volume reported in March 1939. Contracts for all classes RETAIL TRADE VALUE OF RESIDENTIAL BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT 1923 -25AVC.- 100 100 ALES ■ i FAMILY HOUSES 80 & V L /T\Z ''stocks 60 V ■TOTAL 4-0 1 ADJUSTED roft SEASONAL VARIATION 1935 1937 1938 1939 1940 1934 1935 1936 1937 1938 1939 1940 reports from a limited number of stores cent from February to March but were show a declining trend in the volume 1 per cent less than in March 1939. Shipments by rail freight in the Al of post-Easter sales. Sales in March, after allowing for legheny District declined somewhat in the earlier date of Easter and the usual March, when there is ordinarily a seasonal expansion, decreased 1 per small increase. Loadings of merchan cent from February so that the ad dise and miscellaneous materials failed justed index reached a level 10 per to advance seasonally. Shipments of cent below the three-year peak last coke declined more than usual, and ore December. The decline in the month increased less than was to be expected, was due chiefly to a smaller than cus owing to the reduced level of steel op Per cent change tomary gain in sales by women’s spe erations. Loadings of coal, on the other Mar. Building contracts Philadelphia 1940 1940 cialty shops, which ordinarily do a hand, receded less than usual and ship From from (000’s Federal Reserve omitted) month 3 mos. District large amount of Easter business. Sales ments of grain, livestock, and forest ago 1939 of durable consumers’ goods also in products increased, when there is cus -11 Residential........................... $ 7,563 + 94 creased less than was to be expected in tomarily a decline or no change. Ship Apts, and hotels............. 1,791 + 105 - 8 the month, following sharp gains in ments of rail freight originating in the -12 5,772 + 91 Family houses................. 3,794 - 24 -22 Nonresidential..................... the late fall and winter. The greatest Philadelphia area increased somewhat - 8 1,227 + 47 Commercial..................... +87 521 - 72 Factories........................... improvement was reported by shoe from February to March and continued -35 887 +261 Educational..................... stores, although sales at both depart substantial in the first half of April. -51 1,159 - 44 All other........................... ment and men’s apparel stores infSales of new passenger automobiles -16 Total buildings........... *11,357 + 28 +65 4,813 + 25 Public works and utilities. creased somewhat more than usual. Y\ in this district remain active. Regis Compared with March of 1939 retail - trations increased 33 per cent from + 0 Grand total................. *16,170 + 27 trade sales showed a gain of 2 per centA \ February to March and were 40 per Source: F. W. Dodge Corporation. after allowing for the earlier date of \ cent over March 1939. During the Contracts awarded in the first quar Easter this year than last. Improve first quarter sales were 41 per cent ter of the year totaled $41,000,000 or ment was reported in all lines except larger than a year ago. about the same as in the corresponding credit stores and women’s apparel Income and occupancy of commercial period of 1939. Sharp increases over stores. In the first quarter of this hotels in this district were unchanged a year ago were reported in contracts year aggregate sales were 4 per cent from February to March. for factories and public works and util above the same period of a year ago. ities, but awards for other classes of Mar. per cent 1940 Buying by retailers continues cau change from from Hotel business construction showed declines ranging tious, but inventories increased by the Philadelphia Federal from 8 to 51 per cent. Month Year mos. Reserve District usual amount from February to March, 1939 ago ago Wholesale prices of building mate and were 3 per cent larger than in -0 -1 rials decreased somewhat during the +0 +2 +0 Room occupancy.................... first half of April, but continued above March 1939. Per cent of capacity used: Wholesale trade sales in this district Mar. 1940................ 53.1 the level of a year ago. Feb. 1940___ J.. . 52.8 increased 3 per cent from February to Mar. 1939................ 52.7 Distribution, trade, and service. Re Revenue from: March, owing to substantial gains in -0 -0 +1 G uest rooms........................ tail trade sales in this district in April +2 +0 +7 Food....................................... continued to be restricted by unfavor footwear, electrical supplies, and hard +5 -0 _2 Other sources...................... ware. Aggregate sales in March were able weather conditions, but the vol +0 +3 +1 Total revenue.................. ume of business thus far this year has in about the same volume as in March 1939, but in the first quarter averaged been better than in the same period of 1939. Easter trade was not so good 5 per cent more than a year ago. In Banking conditions. Deposits have as was to be expected, and preliminary ventories at wholesale increased 2 per increased sharply and the reserves of Page Five of construction other than factories and miscellaneous buildings increased substantially in the month. Gains over last year in contracts for houses, commercial buildings, and public works and utilities were more than offset by smaller awards for apartments and hotels, factories, educational buildings, and unclassified structures. member banks in this district have risen to new high points as a result of a heavy inflow of funds from other dis tricts and substantial net disbursements by the Treasury. A moderate increase in outstanding credit of reporting banks was chiefly in loans to commerce and industry. The reserves of all member banks were at a record level of $692,600,000 on April 23 and in the first half of the month, when the average was $660, 000,000, were more than double the amounts required to be held against deposits. Excess reserves were 121 per cent of requirements at banks in Philadelphia and 91 per cent at country banks. Member bank reserves (Dollar figures in millions) Held Re quired Ex cess Philadelphia banks: 1940: Mar. 1-15 $421.6 $209.7 $211.9 Mar. 16-31 434.9 209.9 225.0 Apr. 1-15 478.3 216.7 261.6 1939: Apr. 1-15 278.7 176.5 102.2 Country banks: 1940: Mar. 1-15 181.9 85.9 96.0 Mar. 16-31 182.7 87.3 95.4 Apr. 1-15 181.4 95.2 86.2 1939: Apr. 1-15 150.4 95.3 55.1 Ratio of excess to re quired 101% 107 ” 121 * 58 ” 90 91 91 58 ” ” ” ” Reserves increased $76,700,000 in the five weeks ended April 24. Ap proximately $40,000,000 was gained in commercial and financial transactions with other districts, and $26,000,000 was placed in this market by operations of the Treasury, reflecting funds to be used for unemployment benefits, pay ments to local manufacturing and ship building concerns, work relief, and So cial Security expenditures. Additional funds were made available through the deposit of outstanding officers’ checks of this bank, an increase in float, and a decline in the demand for currency. The principal change in credit ex tended by this bank was a reduction of $6,000,000 in holdings of United States Government obligations. This decline was due for the most part to a reduc tion in the proportion of System hold ings allotted quarterly to this bank. On April 24 approximately 40 per cent of the total assets of reporting member banks were in cash, cash items, and balances with other banks. Deposits were at a record level, and about one-fifth larger than a year earlier. Adjusted demand deposits have increased $78,000,000 in the past five weeks, owing to sharp increases in balances of states and political sub divisions and a rise in deposits of in dividuals and business enterprises. Page Six Federal Reserve Bank of Philadelphia Apr. 24, (Dollar figures in 1940 millions) Changes in— Five weeks Reporting member banks (000,000’s omitted) One year Bills discounted.......... $ 0.1 Bills bought................. 0 Industrial advances. . 2.7 U. S. securities............ 197.0 -$0.0 0 - 0.5 - 6.0 -$ + - Total.......................... Note circulation......... Member bank deposits U. S. general account. Foreign bank deposits Other deposits............. Total reserves............. Reserve ratio............... —$6.5 - 0.8 +76.7 -39.6 - 0.5 - 8.3 +32.0 + 0.8% -$10.0 + 31.0 +226.6 - 16.8 + 15.1 + 10.9 +275.6 + 6.1% $199.8 345.3 690.0 27.0 37.2 15.9 935.9 83.9% 0.1 0.1 0.1 9.9 The volume of commercial loans out standing lately has been the greatest, on a comparable basis, since 1937. These loans are now nearly 14 per cent larger than they were last year at this time, reflecting the higher level of industrial payrolls and operations. The expan sion in the past few months has been greater than that reported a year ago. About $8,000,000 of the increase of $10,000,000 in total loans in the past five weeks has been in commercial loans. Smaller increases also were re ported in open market paper and mis cellaneous loans, while slight declines were shown in advances to brokers and in those made on real estate. Approximately $6,000,000 of United States bonds were sold by reporting banks in the period, reducing total holdings of direct issues of the Federal Government to the lowest point since last summer. At the same time, how ever, purchases of guaranteed obliga tions and corporate and municipal se curities were made, restricting the decline in aggregate investments of the reporting banks to $1,000,000. The loans and investments of all member banks in this district totaled $2,307,000,000 on March 26, according to preliminary tabulations. A con traction of about $18,000,000 was shown in the first quarter of the year, after allowance for the liquidation of one bank. Holdings of United States Government obligations were reduced $31,000,000 and the investment in cor porates $15,000,000. Partly offsetting Apr. 24, 1940 Assets Commercial loans................. $ 210 Open market paper.............. 29 Loans to brokers, etc........... 24 Other loans to carry secur.. 31 Loans on real estate............ 49 Loans to banks...................... 1 Other loans............................. . 95 Total loans. Five One weeks year* +$ 8 +$25 + 2 + 439 +$10 +$41 $ 342 -$ 6 102 + 276 + 3 2 -$ 7 + 13 + 25 1 +$31 +$ 9 + 79 +$72 $ 720 Total loans & investments $1,159 Reserve with F. R. Bank.. . 527 Cash in vault............................ 20 Balances with other banks.. 216 Other assets—net................... 83 Liabilities Demand deposits, adjusted.. $1,017 Time deposits.......................... 266 U. S. Government deposits. . 53 Interbank deposits................. 439 Borrowings............................... Other liabilities........................ 15 Capital account....................... 215 -$ - 10 1 - 1 - +$78 + 3 - 3 1 0 - 1 0 * Adjusted for change in reporting banks. these declines, holdings of state and local government securities were in creased by $12,000,000 and loans by $16,000,000. In the past ten years the proportion of loans to total loans and investments has declined from 77 to 36 per cent at member banks in Philadelphia and from 63 to 45 per cent at the country banks. Security holdings of Philadel phia banks were in record volume at the end of 1939. The investments of country member banks, on the other hand, have shown a generally down ward trend since 1936. The net profits of member banks in this district in 1939 were $21,200,000, or more than double the $10,000,000 earned in the previous year, the in crease being due chiefly to profits from the sale of securities. Net earnings from current operations, increasing from $35,300,000 to $35,900,000, con tinued the almost steady expansion since 1933. Dividend disbursements were reduced from $18,000,000 in 1938 to $17,400,000 in 1939. 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). . Total............................................. Changes in weeks ended— Mar. 27 Apr. 3 Apr. 10 Apr. 17 Apr. 24 Changes in five weeks* -5.2 +3.6 -1.4 + 6.1 +31.4 + 1.7 +0.5 -0.7 +9.1 - 0.7 - 2.2 + 1.0 + 8.0 + 6.4 + 1.7 +40.1 +26.3 -3.0 +39.2 +8.9 +15.4 +68.1 -2.6 +0.7 -1.1 +0.0 +44.6 - 4.1 + 0.1 +0.8 +9.1 -1.0 -0.0 + 2.1 +15.0 - 1.7 + 0.0 - 0.5 +76.7 - 8.3 + 0.2 -3.0 +39.2 +15.4 +68.1 Uses of funds: Member bank reserve deposits................. “Other deposits” at reserve bank.................... Other Federal Reserve accounts.................... Total............................................. * Preliminary. 6 - 1 + 3 0 - 1 - 1 + 1 0 + 2 $ Government securities........ Obligations fully guar’teed. Other securities..................... Total investments. Changes in— + 7.3 - 0.4 + 0.1 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT (All figures are rounded from original data) MILLIONS Manufacturing Indexes TOTAL Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weight ed proportionately.) EXCESS REQUIRED; ’34 3 ’ 5 COMMERCIAL LOANS AND INDUSTRIAL PRODUCTION MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT INDEX Per cent Per cent Mar. change from Mar. change from 1940 1940 index Feb. Mar. index Feb. Mar. 1940 1939 1940 1939 All manufacturing .... 87 Iron, steel and products . 81 Non-fer. metal products . 122 Transportation equip.. . . 62 Textiles and clothing.... 90 Textiles........................... 81 Clothing.......................... 123 Food products................... 103 Stone, clay and glass .... 77 Lumber products.............. 52 Chemicals and products . 96 Leather and products.... 92 Paper and printing........... 98 Printing........................... 90 Others: Cigars and tobacco___ 60 Rubber tires, goods . . . 81 Musical instruments . . 65 Mar. 1940— per cent change from Feb. Mar. 1940 1939 +17 +26 +23 +37 - 9 -11 + 2 + 2 +11 + 4 - 2 +20 - 4 -16 - 0 + 3 - 1 + 0 -2 -3 -2 -1 -4 -5 +0 -1 +8 -5 +i -2 -0 -0 + 8 + 19 + 17 +17 - 8 -11 + 3 + 2 +14 + 1 +15 - 4 + 3 + 1 81 97 147 65 80 72 120 108 75 44 105 85 105 98 - 1 - 4 - 1 + 5 - 4 - 7 + 5 + 0 +15 _ 2 - 1 - 2 + 1 + 2 + 13 +26 +24 + 19 - 8 -13 + 8 + 3 +14 + 2 +16 -12 + 4 + 2 + + + +2 -3 +i +17 - 0 +13 53 86 67 +10 - 0 + 1 +26 - 9 + 16 +10 - 1 + 1 * Figures from 2,426 plants. COMMERCIAL LOANS REPORTING BANKS Employehoursf Payrolls* 2 4 1 5 4 6 5 1 7i +27 - 8 +14 t Figures from 2,183 plants. General Index Numbers Covering twelve branches of trade and industry Employment Payrolls (Indexes are percentages of the Per cent 1932 average taken as 100. In Per cent dividual indexes are combined March change from March change from proportionately into general in 1940 1940 index Feb. Mar. index Feb. Mar. dex number.) 1940 1939 1940 1939 INDUSTRIAL PRODUCTION I General index 1936 1937 111 135 (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................... (unadjusted) 1940 69 107 40 98 129 94 111 119 103 100 90 + 0 - 2 + i - 1 + 2 +10 - 2 - 1 +10 + o - 1 + i + 3 + 6 + 8 + 2 + 4 -16 +n - 1 + 3 + 9 + 3 - 5 + 6 - 2 154 198 66 202 55 175 164 109 127 124 118 126 107 +1 - 1 +18 + 2 + 8 +18 + 0 - 0 + + 8 2 + 1 +10 +ii +13 +14 + 3 -11 +12 + 9 + 7 + 9 + 7 - 3 + 8 - 2 Percentage change—March 1940 from March 1939 City areas* Manufacturing Employ ment Wage payments Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading.................. Scranton................ Trenton.................. Wilkes-Barre........ Williamsport........ Wilmington........... York....................... +14 +17 +12 +31 + 7 + 5 - 3 - 7 +13 + 8 + 8 + 7 + 6 +20 +19 +17 +38 + 8 +10 - 5 -10 +24 +22 + 0 +12 +10 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre........ Williamsport........ Wilmington........... York........................ +1 - 1 - 3 - 3 - 1 - 2 — 5 - 2 +1 + 0 + 2 + 1 - 6 Building permits (value) - 87 - 19 + 2 + 55 +289 + 7 - 31 +231 - 32 + 19 +105 — 52 + 48 Debits +14 + 4 - 2 +18 +19 - 4 + 4 + 4 +10 + 1 +19 +21 + 2 Retail trade sales +10 + 3 + 0 +19 + 5 + 5 + 7 - 5 +21 - 8 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT 200 r PAYROLLS +17 +10 March 1940 from February 1940 + + + + + + + - 3 8 4 7 2 0 5 2 5 8 1 3 « 2 - 31 +124 - 38 +597 + 79 + 48 +104 + 95 + 33 + 33 +930 - 89 +202 +14 +10 +16 + 5 +46 + 6 +16 + 4 - 3 +12 +21 +50 +10 +22 +27 +28 - 1 +56 +30 +38 +40 +39 +40 +15 +35 EMPLOYMENT 1934 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven OUTPUT OF MANUFACTURES Index numbers of individual lines of trade and manufactures 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 change Unadjusted indexes reflect merely the actual change which may or may not Mar. Jan. Feb. Mar. 1939 1940 1940 1940 be typical. Mar. 1940 from Month Year ago ago 1940 from 3 mos. 1939 Mar. Jan. Feb. Mar. 1939 1940 1940 1940 Retail trade Sales Total of all stores........................... Department. '.............................. Men’s apparel............................. Women’s apparel........................ Shoe............................................... Credit............................................. Stocks of goods 78 70 69 r 88 r 85 96 r 85 71r 83 102 78 114 80 70 74 r 94 r 85 100 77 52 104 73 100 r 77 51r 101 68 103 SO 55 101 80 104 79p - 1 71 + 2 75 + 2 84p -11 94 +11 94p - 5 80p 54 102 74 107p — + — + + 2 + 2 + 9 — 5 + 11 — 2 0 0 1 8 3 + + + + 4 4 9 0 3 2 3 3 2 2 7 75 65 64 r 104r 90 84 r 61r 51r 76 84 59 65 80 53 114 76 103 r + + + + + + 71 77 46 53 89 100 61 74 98 104 60 79p 53 69 59 r 71 68 102p 57 103 73 86p 55 112 77 HOp Rate of stock turnover Monthly turnover on annual basis 3 93 Wholesale trade Sales + 3* +26* _ 4* + 5* +12* — 6* + 12* + 9* - 1* -1- 1* 5* + 0* 4* + 24* 7* + 6* 0* 3* 4+ + 4+ + 4- 5* 1* 1* 1* 21* 1* 13* 13* 7* Stocks of goods + 2* _ 1* + 2* 12* + 5* _ 2* + 1* + 1* + 1* + 16* + 1* 0* - 1* + 6* 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........................ 39 60 r 47 62 78 19 54 15 322 85 60 42 146 109 131 75 33 r 24 81 95 80 87 107 22 78 37 427 69 56 53 132 94 141 46 48 28 76 81 68 74 103 r 19 63 40 434 70 55 r 47 142 92 131r 37 38 r 25 69 73 66 68 108 15 67 40 443 69 50 45 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................................ 103 66 57 100 71 89 150 97r 76 78 145 101 112 95 59 61 98 77 91 133 88 99 85 147 100 + 6 51 62p 104 75 89 -14 99 60 110 78 90 131 96 r 91 86 169 140 122 120 80 137 67 38 26 120 89p 98 81 146p 118 * Computed from data unadjusted for seasonal variation. Page Eight + + + + + 77 23 39 11 39 _ 22 + 23 +155 + 38 — 19 — 16 + 5 — 18 — 27 + 5 - 9 - 9 - 3 - 7 + 5 -20 + 6 + — 2 2 2 8 5 -16 -13 + 4 +83 — + + + 3 — o* + 2 + 5 - 3 - 3 - 9 +1 - 2 - 4 - 1 - 3 — — + + + + 85 38 47 16 42 1 + 21 +153 + 39 17 9 + 11 4 16 + 5 10 5 15 + 24 7 + 8 0* + 0* 2 + 2 23 6 9 + 11 4 + 8 7 + 10 0 + 2 — 20 — 8 + 28 + 5 + 1 + 20 8 + 0 + 29 + 8 + 3 + 30 p—Preliminary. 45 64 r 50 69 72 20 59 17 335 88 58 45 144 114 142 57 33 r 23 89 99 101 50 92 72 90 159 96 r 76 79 144 102 78 78 93 85 73 69 92 83 100 99 r 19 19 78 68 36 41r 436 425 71 74 56 56 54 50 124 145 98 96 138 143r 32 2fi 45 37 r 26 24 86 90 111 97 77 77 58 56 90 83 78 77 90 91 134 139 102r 95 91 99 77 83 168 146 140 128 80 79 69 77 100 16 73 43 461 71 48 48 119 83 149 52 38 24 89 96 78 56p 95 77 91 128 88p 98 83 145p 123 r—Revised.
@FedFRASER