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THE BUSINESS REVIEW > mm FEDERAL RESERVE BANK OF PHILADELPHIA JANUARY 1, 1943 VICTORY FUND DRIVE A SUCCESS The Treasury Victory loan campaign during December was an overwhelming success throughout the country. Whereas the goal was set at $9 billion on November 30, the actual amount raised through December 26 totaled almost $12 billion. About 40 per cent of these funds came from commercial banks and 60 per cent from others, including insurance com panies and mutual savings banks. of our armed forces and also upon prices for war equipment. War requirements for the cal endar year 1943 may exceed substantially the $74 billion estimated for the present fiscal year. The crucial problem is how to divert the growing excess of spendable consumer income into Government securities instead of using this income for the purchase of the shrinking sup plies of goods and services. Such diversion is Subscriptions in this district exceeded $500 essential to assist in checking inflationary tend million, and it is expected that the final total encies and in building up reserves of buying will surpass $550 million. Incomplete figures power for the post-war readjustment. This is show the following results, exclusive of Treas also true with respect to the accumulation of reserves by business concerns. ury bills and Series E Savings bonds. November 30 through December 29 TOTAL......................................................................................... Number Amount 6,662 735 791 586 280 3,229 7,225 $132,164,000 117,598,500 17^420,500 128,239,000 48.691.000 49,973,400 10.458.000 19,508 $504,544,400 Purchases in this district of all types of Treas ury issues during 1942 approximated $2,650 mil lion as contrasted with about $744 million in 1941. For the country as a whole, total sub scriptions to marketable issues other than Treas ury bills exceeded $47 billion as compared with $39 billion in the previous year. War expenditures have been running at the rate of about $6 billion a month and must reach the gigantic sum of $7 billion if the budget esti mate for the fiscal year is to be reached. The amount, of course, will depend upon the needs Largely to that end, the Treasury is pushing continuously the sale of War Savings Bonds and Tax Savings Notes. Purchases of War Savings Bonds, Series E, in this district exceeded $275 million during 1942. The largest proportion of these bonds was bought by wage and salary workers under the Payroll Savings Plan, and current sales are increasing. Likewise, pur chases of Series F and G bonds by larger indi vidual and institutional investors totaled about $240 million, a substantial gain over the pre vious year. Sales of Tax Savings Notes, chiefly to business concerns, reached a record amount of about $450 million. Series A Tax Savings Notes enable individuals to accumulate funds to meet their rising tax obligations. Series C notes provide an excellent medium for larger tax payers to meet their taxes and also to invest short-term idle balances at a good return in a security not subject to market fluctuations. 807 Page One MANPOWER Only a few years ago it seemed inconceivable that this country with its 130 million people would ever face a shortage of manpower. Yet the current crisis has produced an acute short age. Estimated civilian popula tion, May 1, 1942 Metropolitan district and counties Estimated civilian popula tion, April 1, 1940 Estimated change in the civilian population be tween April 1, 1940 and May 1, 1942 Number Per cent Allentown—Bethlehem—Easton (Lehigh and Northampton Cos. Pa.).......................................................... Altoona (Blair Go., Pa.).!!!.!.!! Atlantic City (Atlantic Co., N. J. Harrisburg (Dauphin Co., Pa.).. . Johnstown (Cambria Go., Pa.) .. . Lancaster (Lancaster Go., Pa.).. . Philadelphia (Delaware, Montomery, and Philadelphia Cos., (a.; Burlington, Camden, and Gloucester Cos., N. J.)................ Reading (Berks Co., Pa.)............... Scranton—Wilkes-Barre (Lacka wanna and Luzerne Cos., Pa.). Trenton (Mercer Co., N. J.). . . . Wilmington (New Castle Co., Del.)...................................................... York (York Co., Pa.)........................ 355.000 133.000 116.000 182,000 238.000 209.000 346.000 140.000 124.000 177.000 213.000 213,000 + 9,000 - 7,000 - 8,000 + 5,000 +25,000 - 4,000 + 2.6 - 5.0 - 6.5 + 2.8 + 11.7 - 1.9 According to the Manpower Commission the number in civilian jobs and in the armed forces increased from 48 million to 57 million in the f two years ended last June. By the end of next 3,027,000 2,953,000 +74,000 + 2.5 234,000 242,000 - 8,000 - 3.3 year it is expected to reach 65 million, includ 664.000 743.000 -79,000 -10.6 ing over 9 million in the armed forces. Induc 202.000 197.000 + 5,000 + 2.5 tion of this tremendous number into the services 186,000 178,000 + 8,000 + 4.5 and concentration of many more in war indus 180,000 178,000 + 2,000 + 1.1 tries cut deeply into the number of workers available for the manufacture of goods for civil areas prepared by the Bureau of the Census. ian use. Unemployment has declined sharply These changes reflect adjustments of popula and the principal avenues left to fill require tion to the requirements of war production. ments are increased employment of individuals above or below usual working ages, attraction People have moved from those areas that have of women who heretofore were outside the la been awarded few Government contracts to those that have received large awards. Some bor force, and increasing hours of work. additional movements may be anticipated since, The great expansion in total production and with few exceptions, areas that have experi conversion from peace to war activities have enced the largest outward movement are still had uneven impacts upon employment condi listed as having labor surpluses, whereas those tions in this district, which is highly diversified. that have had the largest influx of people are Although all sections have shown some in still listed as having or anticipating labor crease in employment since the outbreak of the shortages. war, the rates of increase have not been uni form. The Scranton area, at one extreme, has A rough measure of labor mobility among had an increase of only 3 per cent in the num industries is afforded by changes in employ ber of factory workers since August 1939. The ment indexes. Outstanding increases have been number in the Wilmington area, at the other registered in transportation equipment and extreme, increased 115 per cent. most branches of the iron and steel industries. A number of important groups have shown de These differences are reflected in recent esti creases or no considerable increases since the mates of civilian population in metropolitan outbreak of the war. HOURS AND WAGE RATES IN PENNSYLVANIA HOURS AVERAGE HOURLY EARNINGS - HOURS W0RKE0 AA? 1929 Page Two 1932 1934 1935 1936 1937 1940 1941 1942 » Although all branches of industry in this dis trict have increased average weekly hours per employee, no branch has yet reached the aver age worked in all industries in 1929. At that time, of course, Federal law set no minimum rates of pay for overtime. The rise in working hours since January 1940 has been greatest in the heavy goods lines, which contribute most to the war effort. Yet the highest average of 48 hours per week in the transportation equip ment industry is below the 50 hours worked by all industries in 1929. Reports for October showed that at 44 per cent of 2,800 Pennsyl vania factories employees were working 40 hours or less per week. INDUSTRIAL AND TRADE ACTIVITY THIRD FEDERAL RESERVE DISTRICT PERCENT 193 J-39AV<U100 175 £ 150 /s // '■ * _/4J -l_i 125 Vi * V\ /* gji 100 A 75 \jr • \j V V— Department STORE sales ADJUSTED FC 1938 1939 1940 1941 19 42 1943 30 30.1 35.z 40.1 45.1 50.1 Over No. of Distribution of number of plants or 60 plants less 35 by hours worked per employee 40 45 50 60 Iron and steel products......................... Non-ferrous metal products............... Transportation equipment.................. Textiles and clothing.............................. Stone, clay and glass products .... Lumber products....................................... Chemicals and chemical products.. Leather and its products..................... Paper and printing................................... Other manufactures................................. 2% 3% 15% 25% 29% 24% 2% 647 5 1 6 6 3 4 1 2 5 3 3 1 12 6 8 4 3 8 13 13 2b 9 53 22 37 31 35 49 36 35 2b 20 23 33 32 26 42 30 32 28 29 36 5 22 12 24 14 9 11 13 11 33 1 10 7 11 3 2 3 7 2 0 i 1 0 1 0 0 1 88 103 767 286 208 114 187 80 239 102 in recent weeks. A temporary decline in orders for certain products of the heavy industries re flects the shift in emphasis to equipment for offense, as dictated by military strategy. Operations remain at peak levels in most war plants, and capacity is expanding steadily with the completion of new manufacturing facilities and conversion of equipment. Productive ac BUSINESS SUMMARY tivity in the textile and leather industries was The record of business in this district dur fairly well sustained in the month ended about ing 1942 reflected in many respects the the middle of December, but additional de changes wrought by war. Increasing diver creases were reported in certain other classes sion of existing facilities and the erection of nondurable goods. Unfilled orders in some of new plants for the production of war ma lines have declined from the peaks reached terials were shown in sharply expanded produc during the summer and early fall. tion of durable goods, which in November was more than twice as large as at the beginning of Employment in Pennsylvania factories ad the defense effort. With increasing require vanced slightly in November to a new high ments for the armed forces and lend-lease op estimated at about 1,200,000 workers, and wage erations, the supply of materials and labor for the manufacture of civilian goods has been cur payments increased 3 per cent further to a tailed and in recent months output has been record volume of nearly $45y% million a week. These gains were contrary to seasonal expec less than a year ago. tations, reflecting chiefly continued expansion in the output of military equipment by the Greatly expanded employment and payrolls heavy industries. have sharply increased purchasing power. In part these funds have been used in the purchase Weekly income of wage earners in Novem of War Savings Bonds, the reduction of con ber rose to a new high average of $41.46 from sumer debt, and increased savings in the form $40.70 in October, and less than $27 at the be of bank balances or cash. Retail sales reached ginning of the defense program in the summer new high points, although gains over 1941 have of 1940. Average hourly earnings increased been narrowing. slightly in the month to 95 V2 cents. Working time, averaging over 431/2 hours a week, ex Manufacturing. The market for factory ceeded that for any period since June 1930. products in this district remains active, al The output of manufactured goods in this though new business has slackened somewhat Percentage "distribution, total . . Number of plants, total.................. 4% 7% 33% 28% 17% 10% 106 211 932 783 478 285 1% 100% 26 2,821 Page Three FACTORY PAYROLLS ACTIVITY IN THE STEEL INDUSTRY PENNSYLVANIA EMPLOYEE-HOURS IN PENNSYLVANIA PER' CENT PERCENT STEEL WORKS AND ROLLING MILLS CAPITAL GOODS CONSUMERS' GOODS 1937 1938 1939 BLAST FURNACES 1940 1941 1942 district expanded 4 per cent in November to a level 22 per cent above a year ago. The gain in the month reflected increased produc tion of both durable and nondurable goods, which on a seasonally adjusted basis rose 5 and 8 per cent respectively. In the heavy in dustries, output was 48 per cent greater than in November 1941, but in lighter products a decline of 6 per cent was reported. Coal and other fuels. The demand for fuels remains active. Purchases of anthracite by dealers increased somewhat further in the month ended the middle of December, and sales to householders continued large. Indus trial consumers maintain substantial reserves of bituminous coal in anticipation of shipping difficulties later this season. Expanding capac ity at blast furnaces is stimulating the demand for by-product coke. Output of anthracite exceeded seasonal ex pectations in November. Production continued above the 1941 level in the first half of Decem ber; in the first eleven months more than 55 million tons were mined, as against 52 million in the same period last year. 1937 939 1940 1941 struction industry in this district continue at a high rate against the heavy volume of contracts awarded in recent months for war facilities and other essential projects. Activity in the private residential field has continued to slacken and is sharply below the 1941 level. Awards of building contracts, totaling $64 million in November, were more than double the dollar volume of the preceding month, and the largest since the spring of 1929. The in crease from October reflected principally ex ceptionally heavy awards for public works and utilities. These were the largest in records back through 1920, and accounted for over 50 per cent of the contract total. The value of contracts awarded in the first eleven months approximated $366 million, a new high for recent years, and an increase of 21 per cent over 1941. Compared with last year, gains were sharpest in contracts for public works and utilities and factory buildings, which increased 84 and 70 per cent respectively. Awards for residential structures were about one-third smaller this year than last, owing to restrictions on the construction of small houses. Production of Pennsylvania bituminous coal Trade. Value of retail sales in this district declined contraseasonally in November, but re rose to new high levels during the first three mained above the 1941 level. Operations at the weeks of December, when Christmas buying mines decreased slightly further in early De apparently exceeded all previous records. In cember, according to preliminary reports. Col most lines, however, increases over a year ago liery output averaging about 445,000 tons a were less pronounced than earlier in the season. day in November was 5 per cent larger than a In November, sales by department and apparel year ago; for the first eleven months the in stores increased on an adjusted basis and those crease was 13 per cent. of shoe stores were well maintained. Increases over November 1941 were substantial except at Building. Operations in the building and con men’s apparel stores, where sales declined. Page Four * - Inventories declined contraseasonally from October to November at department stores, but on a seasonally adjusted basis increased some what at women’s apparel and shoe stores. In creases over a year ago were much smaller than in the summer. Merchandise on order by de partment stores at the end of November, how ever, was sharply larger than a year ago. Wholesale trade sales increased in November, reflecting gains in all reporting lines except shoes, jewelry, and paper. Aggregate sales in the eight branches in November and in the first eleven months were 14 per cent greater than a year ago. Inventories generally declined in the month, the only increase being in the case of electrical supplies. A decline of 19 per cent from 1941 was reported. ' * * « Inventory limitation. The War Production Board in its order L-219 of December 29, 1942, announced the expected federal inventory con trol plan. The purpose of this plan is to assure a fair distribution of consumer goods by limit ing inventories of larger concerns to the same level, relative to sales, as maintained in the base period, 1939-41. The order applies to firms with inventories of consumer goods of at least $50,000, cost value, and annual sales of $200,000 or more. It will operate on a quarterly basis effective with the second quarter of 1943. Merchants with excessive inventories will be limited in their purchase of new goods. C0MMERCIAL' LOANS PH1LA. FED RES. DISTRICT REPORTING MEMBER BANKS MILLIONS 1942 1940 1939 JAN. FES. MAR. APRIL MAY JUNE JULY AUG SEPT OCT NOV. DEC fers to this district for payments on new securi ties and income taxes. Income tax payments were met to a considerable extent by the tender of tax savings notes. Outstanding Reserve Bank credit increased considerably, but this reflected chiefly partici pation in System purchases of Governments, largely in the New York market, and an in crease in float. Bank borrowing from the Re serve Bank continued virtually non-existent, with discounts totaling less than $1 million. Reporting banks in leading cities have built their earning assets to new high levels in late weeks. The total of $1,737 million on Decem ber 23 was $65 million greater than on Novem The control plan aims to provide larger ber 18. This gain was due to increased hold quantities of consumers’ goods for distribution ings of direct Governments, which have doubled through smaller retail outlets. Manufacturers in the past year. The sharp rise recently has and wholesalers under this plan are urged to been due principally to allotment of new Treas distribute scarce commodities to all customers ury 1%% bonds and increased investments in on an equitable basis. Distributors likewise are Treasury bills, which now account for 9 per advised to make special efforts to supply retail cent of the outstanding credit of the reporting banks. Loans continued to decline as a result ers in war plant areas. of further net repayments on commercial ad Banking conditions. The reserve positions of vances and the running off of open market member banks in this district generally were paper held in the portfolios. Holdings of these well maintained during the Victory Fund drive. classes of paper, now amounting to $267 mil In the five weeks ended December 23 reserves lion, are down nearly one-fourth from the peak increased $10 million to $653 million. Nearly level of the past year. $100 million of reserves was absorbed by cash Despite periodic withdrawals for tax pay operations with the Treasury, and an addi tional $68 million through the active holiday ments, the purchase of Government securities, demand for currency. But these losses were and currency needs, deposits at the reporting offset by funds gained in other ways. Chief banks continue to expand. The record level of among these was nearly $150 million in inter $2,150 million in the middle of December was district transactions, which included large trans more than $200 million greater than on July 1. Page Five BUSINESS STATISTICS Production Employment and Income in Pennsylvania Philadelphia Federal Reserve District Industry, Trade and Service Not adjusted Adjusted for seasonal variation Employment Per cent change Indexes: 1932 =100 Indexes: 1923-5=100 Nov. Oct. 1942 1942 Nov. 1942 from Nov. 1941 Mo. ago INDUSTRIAL PRODUCTION MANUFACTURING................... Metal products.............................. Textile products............................ Transportation equipment.. . Food products................................ Tobacco and products............... Building materials........................ Chemicals and products........... Leather and products................ Paper and printing..................... Individual lines Pig iron............................................... Steel...................................................... Silk manufactures........................ Woolens and worsteds............... Cotton products............................ Carpets and rugs.......................... Hosiery............................................... Underwear........................................ Cement............................................... Brick.................................................... Lumber and products................ Slaughtering, meat packing. . Sugar refining................................. Canning and preserving........... Cigars.................................................. Printing and publishing........... Shoes.................................................... Leather, goat and kid................ Paints and varnishes.................. Coke, by-product.......................... COAL MINING............................... Anthracite......................................... Bituminous....................................... CRUDE OIL....................................... ELEC. POWER—OUTPUT. . Sales, total........................................ Sales to industries....................... RUILDING CONTRACTS TOTAL AWARDSt....................... Residential..................................... Nonresidentialf............................. Public works and utilities!... 141p 136 144p 139 232p 221 83 166 157 r 65p 65 603 578 lOOp 95 104 116 54 52 146p 136 114p 97 93 90r 117 119 157 91 147 76 281 94 113 57 164 138 94 108 139 79 55p 58 50p 70 155 81 70 29 104 130r 71 74 54r 91 74 152 89 67 32 110 130 78 r 54 59 52 74 139 77 69 r 29 107 73 lOlp 103 83 95 139 9 Op 86 172p Year ago + + + + + 4 4 5 3 6 0 + 4 + 5 -10 + 2 + 7 +17 + 3 - 2 + 7 + 2 + 1 - 3 - 4 - 4 +n + 5 + I 0 + 1* 95 +10 126 +68 95 r + 4 112 -10 90 + 2 95 + 3 153 +17 123r +18 93 + 4 155 + 6 66r + 7 64 r + 9 81r - 4 449 - 2 173 48 277 326 +37 + 64 + 5 — 38 +14 +127 +196 105 77 122 155 118 120 166 68p 596 102p 125 53 146p 108p 94 163 r 68 554 104 141 56 137 104 91r 147 78r 274 95 135 56 164 131r 95 + 10 + 9 + 1 — 17 + 4 — 50 — 11 0 + 3 + 3 4 + 8* + 1 23 + 16 + 9 1 0 — 11 — 7 — 7 + 7 + 7 6 + 13 + 12 109 133 80 59p 61 53p 80 156 79 69 29 105 125r 71 79 57 r 102 84 153 87 67 32 80p 78p 93 436 109 130 79 59 61 55 81 152 86 70 30 110 102 37 131 141 83r 93 r 129 80 89 159 76 74 95 r 458 + 5 + 11 + 15 379 385 311 376 371 282 345 343 273 + 16 34 + 37 + 61 188 54 277 375 130 52 233 116 115 86 122 178 + 4 + 6 + 12 — 25 + 7 — 45 — 5 + 2 — 9 + 3 10 + 11* + 13 — 42 + 6 — 7 7 —, 0 — 9 26 — — 8 + 11 + 17 + 19 + 5 0 + 10 + 11 + 14 +111 ♦Unadjusted for seasonal variation. f3-month moving daily average centered at 3rd month. Nov. 1941 139 142 + 19 + 20 4- 46 4 + 16 — 12 +114 + 8 + 9 + 2 — 5 — 10 0 0 +1 + 5 Nov. Oct. 1942 1942 143p 146p + 21 + 22 4- 48 6 + 13 — 15 +114 + 6 — 8 — 6 — 11 — 17 — 1 98 44 97 115 82 r 92 r 119 77 83 162 72 77p 76p 70 88r 85 458 449 365 365 331 338 374 371 268 290 305 126 45 243 110 1942 from 11 mos. 1941 119 48 113p 124 83 96 131 87p 89 165p 105 82 104 r 134 90 96 144 119r 96 149 68 r 65 r 89r 436 Allentown............. Altoona.................. Harrisburg........... Johnstown............ Lancaster.............. Philadelphia.... Reading.................. Scranton ................ Trenton.................. Wilkes-Barre.... Williamsport.... Wilmington.......... York......................... Employment Oct. 1942 + + + + + + - 2 1 1 1 1 1 0 1 0 0 1 6 1 Payrolls Building permits value Debits Oct. 1942 Nov. 1941 Oct. 1942 Nov. 1941 Oct. 1942 Nov. 1941 Oct. 1942 Nov. 1941 +10 - 5 0 - 7 + 6 +15 - 7 - 1 - 5 +16 + 6 +37 - 4 + 3 + 5 0 + 2 - 3 + 4 + 1 + 2 0 -14 + 3 + 6 - 2 +29 +16 +23 + 6 +31 +49 +11 +16 +21 +41 +28 +88 +23 -56 -34 -77 -74 -63 -81 -44 - 3 -34 +258 -29 -51 +56 -89 -65 -97 -24 -47 -68 -49 -55 -86 -86 -67 +10 +15 +18 + 5 + 8 +14 +16 + 5 +19 +11 + 8 -10 + 13 - 8 + 7 + 10 + 11 + 3 + 8 + 5 -14 -13 -14 - 8 -14 - 3 - 5 + 6 +17 - 1 - 9 -20 -10 + 2 -10 + 8 - 7 + 3 + 8 +10 + 7 + 2 + 6 +41 + 9 +14 0 +11 ♦Area not restricted to the corporate limits of cities given here. Page Six + 4 +14 +1 0 0 -2 -2 -3 +2 -1 +4 0 -2 +i -3 -1 +4 -7 -12 -14 -8 +4 -5 -7 -11 -5 -2 -6 290 422 86 295 126 344 197 133 157 145 143 162 149 +2 +3 +2 -4 +i +1 0 +1 +3 +1 +1 0 -7 +20 +28 +19 - 3 + 9 +11 + 7 + 6 - 1 0 + 6 + 2 0 Manufacturing Employment* Payrolls* Per cent Per cent Nov. change from Nov. change from 1942 1942 index Oct. Nov. index Oct. Nov. 1942 >1941 1942 1941 Indexes: 1923-5=100 TOTAL............................................ Iron, steel and products. . . Nonferrous metal products. Transportation equipment. 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........... 116 127 189 127 87 79 118 119 94 52 119 91 101 93 68 115 82 0 +1 - 1 + 2 - 1 0 - 3 - 2 0 - 2 +10 +12 + - 1 + 4 + 8 b 4 172 - 9 - 4 -31 - 8 - 8 - 8 0 - 5 -22 + 4 - 7 6 - 2 242 361 215 113 106 150 154 126 70 179 121 136 120 - 8 +16 86 192 137 +11 + + + + 3 3 3 5 0 1 4 0 0 1 2 0 4 6 +28 +35 +75 + 8 +11 + 1 +14 +10 - 5 +19 + 6 + 7 +10 - 1 + 5 + 12 +14 +46 +44 + + + + +28 ♦Figures from 2908 plants. Factory workers Averages November 1942 and per cent change from year ago Retail sales 135 180 62 94 55 114 145 101 120 113 97 112 101 Hours and Wages Nov. 1941 GENERAL INDEX............. Manufacturing.......................... Anthracite mining.................. Bituminous coal mining .. . Building and construction . Quar. and nonmet. mining Crude petroleum prod.......... Public utilities.......................... Retail trade................................ Wholesale trade........................ Hotels............................................. Laundries..................................... Dyeing and cleaning............. p—Preliminary. r—Revised. Local Business Conditions* Percentage change— November 1942 from month and year ago Payrolls Per cent Per cent Nov. change from Nov. change from 1942 1942 index Oct. Nov. index Oct. Nov. 1942 1941 1942 1941 TOTAL.................................. Iron, steel and prod.. . Nonfer. metal prod .. . Transportation equip.. Textiles and clothing.. Textiles............................. Clothing........................... Food products................ Stone, clay and glass.. Lumber products.......... Chemicals and prod.. . Leather ara\ products . Paper and printing. . . Printing............................ Others: Cigars and tobacco . . Rubber tires, goods. . Musical instruments. Weekly working time* Hourly earnings* Aver Aver Ch’gc age Ch’gc age hours 43.7 44.5 44.2 47.7 39.6 40.2 38.1 42.8 38.6 43.0 41.2 39.5 41.9 39.1 41.2 42 6 48.4 ♦Figures from 2721 plants. Hb J-- -- 7 $.956 2 1.033 .909 1.115 .663 .692 .591 .715 .861 .657 .991 .675 .840 .980 + 9 +11 + 7 .552 .872 .895 - --- r r r 6 9 8 6 7 5 4 5 7 6 4 3 Weekly earningsf Aver age +14 $41.46 45.94 + II +22 +18 + 11 +12 + 8 Ch'ge +23 + 18 +34 +28 +17 +20 + 8 +11 + 11 + 8 40.18 53.10 25.95 27.77 22.31 30.81 33.22 28.07 40.35 26.66 36.13 39.99 +14 +14 +14 +n +13 +14 +21 22.75 37.12 43.35 +23 +26 +29 + 11 + 7 + 9 fFigures from 2908 plants. +ii +16 +14 +17 Distribution and Prices Per cent change Wholesale trade Unadjusted for seasonal variation Sales Total of all lines......................... Boots and shoes........................ Drugs.............................................. Dry goods..................................... Electrical supplies.................. Groceries....................................... Hardware..................................... Jewelry.......................................... Paper............................................... Inventories Paper............................................... Source: Nov. 1942 from Month Year ago ago + 6 -37 + 6 + 4 +12 + 12 + 3 - 5 - 6 +14 +26 +20 - 2 +16 +40 - 5 -27 -35 +14 +2L + 12 +30 -11 + 16 +15 + 1 +27 - 6 — 2 —10 + 7 - 5 - 6 -15 - 2 -19 +10 — 7 —31 -27 —36 —35 - 1 Per cent change Indexes: Nov. Oct. 1942 1942 1935-1939 =100 Nov. 1941 |1942 from 11 mos. 1941 Nov. 1942 fro m Month ago Year ago Nov. Oct. INov. 1942 1942 '1941 RETAIL TRADE Sales Women’s apparel.................................................... Men’s apparel........................................................... Shoe................................................................................ + 12 + 14 +12 + 8 +24 181 184 147 141 139 160 160 141 131 161 167 177p 178 111 185 187 181 111 154 144 153 114 136 127 82 138 230 201 121 118 129 143 146 135 79 138 271 197 134 136 142 146 112 135 198 189 126 131 119 92 78 132 127p 146p 132 155 115 140 51 19 145 88 73 162 142 137 131 128 144p 139 138 123 117 143 132 126r 109 142 130 + + + 2 1 6 9 0 + 8 + 9 +19 -10 +10 145p 147p 151 105 157 157 148 103 127 119 129 107 — — + + 7 6 2 2 +14 +24 +17 - 2 136 129 79 127 295 195 127 104 112 130 126 75 121 200 197 132 132 118 146 + 5 147 108 124 254 183 133 114 104 + 2 + 5 +48 - 1 - 4 -21 - 5 - 7 -13 -27 + 2 + 16 + 6 - 4 - 9 + 8 86 85 124 +1 -30 -13 - 4* - 6* +n* + 3* + 9* +12* — 18* -13* + 8 -53* -78* 0 -35* -57* + 5 42 16 162 124 126 Inventories laop U. S. Department of Commerce. FREIGIIT-CAR LOADINGS Total................................................................................ Prices Basic commodities (Aug. 1939 = 100). . Wholesale (1926 = 100)............. Farm................................ Food................................. Other................................ Living costs (1935-1939 = 100). . United States............. Philadelphia................ Food............................... Clothing...................... Rent............................... Fuels.............................. Housefurnishings. . Other............................. Source: Not adjusted Adjusted for seasonal variation 1942 from 11 mos. 1941 Per cent change from rNov. Month Year Aug. 1942 1939 ago ago 170 0 +10 +70 100 110 103 96 0 +1 0 0 + 8 +22 + 16 + 2 +34 +81 +54 +20 120 119 128 126 107 104 122 114 + 1 + 1 + 2 0 0 0 0 + 1 + 9 +10 +18 +11 + 1 0 + 7 + 6 +22 +21 +38 +27 + 4 + 7 +22 +13 Merchandise—l.c.l................................................ Coke............................................................................... Forest products...................................................... Grain and products.............................................. Livestock..................................................................... MISCELLANEOUS Life insurance sales............................................... Hotels—(1934 = 100) + 5 +1 - 3 -19 + 7 +14 + 9 + 1 + 1 +12 Business liquidations Check payments....................................................... 152 ♦Computed from unadjusted data. U. S. Bureau of Labor Statistics. 140 151 p—Preliminary. r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (000,000’s omitted) Dec. 23, 1942 Assets Commercial loans...................... $ 245 22 Open market paper................... 29 30 Other loans to carry secur.. . 47 Other loans..................................... 82 Total loans.................................. $ 455 One year -$ 6 - 4 + 4 -$ 50 - 19 — - 1 -$ 7 - 2 4 31 -$106 +$73 + 2 - 3 +$496 - 41 - 27 Total investments.................. $1282 +$72 +$428 Total loans & investments. $1737 Reserve with F. R. Bank. . . 427 Cash in vault................................ 30 Balances with other banks. . 197 61 Other assets—net....................... +$65 - 3 + 2 - 1 - 5 +$322 - 50 + 4 * - 13 Sources of funds: Reserve Bank credit extended in district.... Commercial transfers (chiefly interdistrict)... Treasury operations..................................................... . Total. 13 219 —$41 - 4 +123 - 21 +$178 - 67 + 133 + + i ♦Reciprocal bank balances now reported net. Dec. 9 Dec. 16 Dec. 23 Changes in five weeks + 1.4 +20.8 +22.6 + 4.9 +10.5 +68.3 -49.8 -12.4 + 1.2 +16.7 +13.4 -37.3 - 1.5 +41.8 -32.4 + 18.8 +147.3 - 97.9 + 7.5 +29.0 +26.9 - 3.1 + 7.9 + 68.2 +18.1 +20.1 + + Uses of funds: Currency demand..................... ............... Member bank reserve deposits. .. . “Other deposits” at Reserve Bank. Other Federal Reserve accounts... + 1.1 -11.3 - 0.4 + 9.2 +24.4 - 4.1 - 0.5 + 7.8 + 8.5 Total............................................................... + 7.5 +29.0 Federal Reserve Bank of Phila. (Dollar figures in millions) Bills discounted.... $ Industrial advances. Other liabilities........................... Dec. 2 Changes in weeks ended— Philadelphia Federal Reserve District (Millions of dollars) Five weeks Government securities........... $ 975 Obligations fully guar’teed. . 65 242 Other securities........................... Liabilities Demand deposits, adjusted. $1441 156 Time deposits.......... .................... U. S. Government deposits. . 165 Interbank deposits.................... 368 Nov. 25 Changes in— 5 i Note circulation... . Member bk. deposits U. S. general account Foreign deposits___ Other deposits........... Reserve ratio.............. Changes in— Dec. 23, 1942 Five weeks 1.0 0 5.0 420.7 +$ 0.1 0 - 0.0 + 59.0 -$ 0.1 0 + 1.5 + 243.7 +$59.1 + 50.4 + 10.2 - 11.8 + 1.5 - 8.0 - 37.4 - 4.4% +$245.1 + 274.1 - 27.3 - 85.5 7.9 1.9 - 113.0 - 15.6% $426.7 852.4 652.9 .9 69.2 13.3 1155.4 72.7% One year +11.2 67.9 -16.2 + 4.0 0.6 - 6.9 - 5.1 - 0.4 0.0 1.9 +26.9 3.1 + 7.9 + 68.2 - Member bank reserves (Daily averages: dollar figures in millions) Held - 10.2 8.0 Re quired 1+ cess Ratio of excess to re quired Phila. banks 1941: Dec. 1-15.. 1942: Nov. 1-15.. Nov. 16-30. . Dec. 1-15. . $536 393 414 424 $303 337 341 $233 56 73 77% 17 21 Country banks 1941: Dec. 1-15.. 1942: Nov. 1-15.. Nov. 16-30. . Dec. 1-15.. $224 235 233 241 $141 170 170 $ 83 65 63 59% 39 37 Page Seven National Summary of Business Conditions Aggregate industrial production in November was maintained close to the October level, reflecting a continued growth of output in war industries and a seasonal decline in production of civilian goods. Distribution of commodities to consumers rose further in November and the first half of December, reducing somewhat the large volume of stocks on hand. Retail food prices continued to advance. Production. Maintenance of industrial production in November when the sea sonal tendency is downward was reflected in a rise of the Board’s seasonally adjusted index from 189 to 191 per cent of the 1935-39 average. This rise was largely accounted for by a further advance in output of durable manufactures. Nondurable manufactures declined seasonally, while output of minerals showed less than the usual seasonal decrease. In all groups of products the proportion of output for war purposes was considerably larger than a year ago. 1936 1938 1940 1942 1936 (938 1940 The increase reported for durable manufactures from October to November was in finished munitions and industrial equipment for new plants which will Federal Reserve monthly index of physical be completed in large number over the next few months. Steel production, at volume of production, adjusted for seasonal variation, 1935-39 average =100. Subgroups 98 per cent of capacity in November and the first three weeks of December, was shown are expressed in terms of points in the down slightly from the October peak, but the reduction appeared temporary as total index. Latest figures shown are for the scrap supply situation had been relieved and as further progress was being November 1942. made on construction of additional iron and steel capacity. Supplies of iron ore on hand are regarded as sufficient for operations at capacity until movement of DEPARTMENT STORE SALES AND STOCKS ore down the lakes is resumed in the spring. Shipments from Upper Lake ports this year totaled 92 million tons, and were ,15 per cent above the record estab lished in 1941. At cotton textile mills activity was maintained at a high level in November and at shoe factories production declined less than is usual at this season. Out put of manufactured foodstuffs showed a seasonal decline. Construction contract awards in November were 10 per cent below the level of the three preceding months, according to data of the F. W. Dodge Corpora tion, but were still about forty per cent higher than in November of last year. As in other recent months, publicly-financed work accounted for over ninety per cent of all awards. Distribution. Distribution of commodities to consumers increased further in November and December with active Christmas buying. At department stores, variety stores, and mail-order houses serving rural areas, sales in November ex Federal Reserve monthly indexes of value of panded more than seasonally. In the first half of December department store sales and stocks, adjusted for seasonal varia sales continued to rise sharply and were considerably larger than a year ago. tion, 1923-26 average =100. Latest figures shown are for November 1942. Freight-car loadings in November declined about 7 per cent from their peak levels in September and October but on a seasonally adjusted basis rose slightly C03T OF LIVING over the October level. Coal loadings rose somewhat although a decline is usual in November. Shipments of other commodities declined seasonally. Commodity prices. Grain prices advanced from the middle of November to the middle of December, while most other wholesale commodity prices showed little change. Retail food prices increased further by 1 per cent in the five weeks ending November 17 to a level 16 per cent higher than in November 1941. Prices of such fresh foods as are uncontrolled—fruits, vegetables, and fish—showed the largest advances from October to November, but price increases in controlled items con tributed about two-fifths of the total rise. Bank credit. During the period of large-scale Treasury financing in December, total excess reserves of member banks were generally above 2.5 billion dollars. Substantial purchases of Government securities for the Federal Reserve System offset the effect of drains on reserves by the continued heavy currency outflow Bureau of Labor Statistics’ indexes, 1935-39 and further increases in required reserves resulting from a rapid growth in average =100. Fifteenth of month figures. bank deposits. Last month in each calendar quarter through September 1940, monthly thereafter. Latest Reserve Bank holdings of Government securities showed an increase of figures shown are for November 1942. 850 million dollars in the four weeks and reached a total of 5.5 billion on December 16. At reporting member banks in 101 leading cities holdings of United States Government securities increased by 800 million dollars in the four weeks ending December 9. Treasury bills accounted for practically the entire increase, with almost two-thirds of the amount going to New York City banks. In the week ending December 16, bond holdings rose sharply as banks received their allotments of the new 1% per cent bonds subscribed on November 30December 2; allotments of this issue to all banks totaled 2 billion dollars, representing 85 per cent of subscriptions. Total loans showed little change over the four weeks ending December 9. Commercial loans declined by 200 million dollars, with about half the decline at New York City banks, while loans to brokers and dealers increased over the period, reflecting largely advances made to security dealers in New York in connection with the Victory Fund drive. Payments by bank depositors for new Government security issues resulted in a decline of adjusted demand deposits and a rise of U. S. Government deposits to 5.8 billion dollars in mid-December, the largest total on record. United States Government security prices. Prices of United States Government securities have been steady in the past three weeks following an adjustment in the latter part of November when the Treasury announced the drive to sell 9 billion dollars of securities in December. Long-term taxable bonds are selling on a 2.36 per cent yield basis on the average and long partially tax-exempt bonds on a 2.09 per cent basis. NDUSTR AL PRODUCTION Page Eight
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