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THE BUSINESS REVIEW RESERVE DISTRICT APRIL i, 193 5 By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent FEDERAL RESERVE BANK of PHILADELPHIA Business and Banking Conditions in the United States In February industrial production increased by less than the usual sea sonal amount, following sharp advances in December and January. Wholesale prices of many leading commodities showed little change in February and declined in the early part of March; prices of livestock and meats, however, advanced further in February and con tinued at relatively high levels during the first three weeks of March. Production and employment. Daily average output of basic industrial com modities increased in February by an amount smaller than is usual at this season and the Federal Reserve Board’s index, which makes allowance for sea sonal variations, declined from 91 per cent of the 1923-25 average in Janu ary to 89 per cent in February. At steel mills activity increased further during the early part of February; later in the month and in the first three weeks of March, however, activity de clined, contrary to seasonal tendency. In the automobile industry produc tion continued to increase and the out put indicated for the first quarter is larger than in the corresponding period of any other year since 1929. Lumber production remained at a low level. At textile mills activity in February declined somewhat from the relatively high rate of the preceding month. In the meat packing industry output con tinued to decline. Factory employment increased be tween the middle of January and the middle of February by more than the usual seasonal amount, reflecting sub stantial increases in working forces in the automobile, machinery, iron and steel, and wearing apparel industries and smaller increases in many other lines. At meat packing establishments employment continued to decline and at tobacco factories it showed less than the usual seasonal growth. Payrolls at manufacturing establishments also increased considerably in February. In non-manufacturing industries employ ment and payrolls showed little change. Total value of construction contracts awarded in the period from January 1 to March 15, as reported by the F. W. Dodge Corporation, was smaller than in the corresponding period last year, reflecting a reduction in the volume of public projects. The value of contracts awarded for residential building during this period showed a slight increase over the low level of a year ago. INDUSTRIAL PRODUCTION CONSTRUCTION CONTRACTS AWARDED ... „„ HO HO 130 120 130 120 110 no 100 90 80 Index of factory employment, adjusted fo. seasonal variation. (1923-1925 average ~ 100.) MEMBER BANK CREDIT BILLIONS OF DOLLARS 8 0 U.S.6o»* Se grilles V, \r 80 70 60 60 FACTORY EMPLOYMENT BILLIONS OF DOLLARS 100 90 70 Daily average volume of revenue freight-car loadings showed a seasonal increase in February and little change in the first half of March. Department store sales increased in February, a month when there is usually little change, and the combined total for the first two months of the year was larger than a year ago by 5 per cent. Wholesale commodity prices. During the period from the beginning of Feb ruary to the middle of March there were w'ide movements in prices of many individual commodities, while the general level of wholesale prices, as measured by the Bureau of Labor Statistics’ index, showed little change. Distribution. Other Securities | __ _ 50 1929 1930 1931 1932 1933 1934 1935 Index of industrial production, adjusted for seasonal variation. (1923 1925 average = 100.) 1932 Three-month moving averages of F. W. Dodge data for 37 Eastern States, adjusted for sea sonal variation. Latest figure based on data for December and January and estimate for February. 1933 1934 1935 Wednesday figures for reporting member banks in 91 leading cities. Latest figures are for March 13. In the third week of March prices of cotton and other textiles, grains other than wheat, coffee, rubber and tires, scrap steel and tin were considerably lower than at the beginning of Feb ruary, while prices of livestock, meats and sugar were higher. Bank credit. During the four weeks ended March 20 member bank reserve balances declined by $280,000,000, principally in consequence of an in crease in Treasury deposits with Fed eral reserve banks built up in connec creased by $275,000,000. There was a further growth of $85,000,000 in hold ings of direct obligations of the United States Government and a smaller in crease in obligations guaranteed by the government. Loans to brokers and dealers in securities increased by $130, 000,000 while other loans showed little change. Yields on United States Govern ment obligations declined slightly fur ther, and open market money rates con tinued at a low level. tion with March 15 fiscal operations. Excess reserves of member banks de clined to about $1,950,000,000. De mand deposits (net) of weekly report ing member banks in leading cities increased further by $380,000,000 dur ing the four weeks ended March 13. The balances of other banks with re porting banks increased by $100,000, 000 while government deposits de clined, reflecting the withdrawal of funds from depository banks. Loans and investments of reporting banks in Business and Banking Conditions in the Philadelphia Federal Reserve District Business activity in this district gen erally showed improvement during February but some slackening in March, according to early indications. Industrial production increased slightly more than usual from January to Feb ruary reflecting wholly larger output of manufactures and bituminous coal. Compared with a year ago, industrial output was 4 per cent greater and the total production in the first two months was nearly 7 per cent larger. Prices of raw materials and finished products were higher while those of partly manufactured goods were somewhat lower in February this year than last. The value of retail trade sales rose by a larger amount than was expected, following an exceptionally sharp de cline in the previous month. Whole sale trade, on the other hand, showed little change. Other indicators relat ing to distribution failed to measure up to their usual levels, except for the sales of new passenger automobiles which increased greatly since January. Comparisons with last year continue favorable, although in the case of re tail trade March sales are reflecting ployment continued 2 per cent and payrolls 11 per cent larger. Manufacturing. The demand for fac tory products has slackened and sales generally have declined since the mid dle of last month. The volume of un filled orders for most manufactures about the middle of March seemed considerably smaller than in the pre vious month and somewhat below that of a year ago. Current reports indi cate that lately there has appeared a marked degree of hesitation with re spect to new business commitments, particularly in the case of most textiles. Inventories of finished goods showed little change while stocks of raw mate rials have declined. The majority of reports indicate that in comparison with a year ago holdings of both classes of commodities about the middle of March were smaller, despite some individual cases showing in creases in stocks of certain merchan dise. Collections have fallen off noticeably during the month and with a few ex ceptions have been smaller than last the influence of the Easter season which occurs about three weeks later this year than last. Collections rela tive to outstanding balances continue to show improvement over last year. The value of shipments of dairy and poultry products by farmers in this section to the principal eastern markets has increased materially in comparison with last year, reflecting in part higher prices. Compared with the average for 1931-33, sales of these products early this year were about 40 per cent larger. Estimated cash income of local farmers largely from these products last year amounted to about $126,495, 000, or 65 per cent of their total cash income. The volume of employment and wage payments by twelve branches of indus try and trade increased a little more than usual from the middle of January to the middle of February, according to this bank’s indexes prepared from reports of 10,547 establishments in Pennsylvania which employed over 787,000 workers whose earnings amounted to about $17,364,000 a week. Compared with February 1934 em FREIGHT CAR LOADINGS INDUSTRIAL AND TRADE ACTIVITY ALLEGHENY DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT MERCHANDISE AND MISCELLANEOUS (i&4»% or total) COAL RETAIL TRADE u SALES (23 5% OF TOTAL) OUTPUT OF FACTORIES AND MINES VALUE OF BUILDING CONTRACTS TOTAL AOJUSTCD TOR SEASONAL VARIATION 1930 1931 1932 1933 1934 Source: F. W. Dodge Corporation for building contracts. Page Two 1935 1930 1931 1932 1933 Source: American Railway Association. 1934 1935 year. Price concessions at factories Business Indicators lately have been more numerous than Philadelphia Federal Reserve District for some months past, although whole sale quotations for finished products in Index numbers: percentages of the 1923-1925 average taken as 100 the aggregate have registered only a (AH figures are rounded from original data) fractional recession since last month. The index number of the Bureau of Adjusted indexes allow for the usual Adjusted for seasonal variation Not adjusted change which results from an Labor Statistics based largely on man seasonaldistribution of business be uneven ufactures in the week ended March 16 tween the months of the year. Percentage com parison was 77.3 per cent of the 1926 average Unadjusted indexes reflect merely the actual change which may or may not as compared with 77.7 a month ago and be up to the usual seasonal expecta Feb. Dec. Jan. Feb. Feb. 1935 FeD. Dec. Jan. Feb. 1935 1934 78.6 last year. tions. 1934 1934 1935 1935 1934 1935 1935 Wl th with Factory employment and wage dis 2 Month Year mos. bursements in this district increased a 1934 ago ago little more than usual from the middle of January to the middle of February, Industrial production............. 68 71 70p + 2 69 + 3 + 6 69 68 72p 69 Manufacturing—total....................... and both were fairly well maintained 3 6 + 8 66 71 69 70p + 3 + 14 +15 67 68 68 72p Durable goods.............................. 50 46 51 52p + + about the middle of March, according Consumers' goods......................... 82 86 85p + 3 82 + 3 + 7 Metal products............................... 48 58 61 61 49 55 59 62 - 0 +26 +26 to preliminary indications. Textile products............................. 79 81 86p + 3 83 + 9 +20 86 92p 85 79 Transportation equipment........ 42 53 At Pennsylvania factories, the num 47 47 - 0 +10 +12 43 53 46 47 Food products................................. 68 76 67p + 9 61 67 74 - 2 - 7 61 65p ber of wage earners rose almost 2 per Tobacco and products................. 88 97 79 83 + 5 75 70 - 6 - 8 65 70 Building materials......................... 23 20 21 + 21 17 18 cent and the amount of wages as well 21 102 99 lOOp + 4 -13 -11 21 102 97 99p Chemicals and products.............. 97 0 + 3 + 0 90 Leather and products................... 128 111 113 118p + 4 as the number of hours actually worked - 8 — 6 136 105 117 125p Paper and printing....................... 82 79 79 80 + 2 — 2 - 2 82 80 79 80 increased about 7 per cent in the Electric power output.................. 185 194 191 187 - 2 + i + 2 197 207 202 198 Industrial use of electricity. . . . 151 136 140 144 + 3 + 6 + 10 135 143 136 143 month. This upturn was slightly Coal mining......................................... 86 70 74 68 - 8 73 -20 -13 92 70 80 Anthracite........................................ 89 72 76 68p -10 larger than usual; it compares favor 73p -24 -16 95 71 82 Bituminous...................................... 59 61 60 70 +16 + 15 +n 67 62 69 76 ably with changes in the same period Employment and wages—Pa. Factory wage earners....................... of the past ten years, though the gains 75 76 + 2* + 5* + 7* 72 75 Factory payrolls................................. 58 62 + 7* + 16* +19* 53 58 Employe-hours (1927-28=100) . . were not as large as they were a year +13* 55 57 57 61 + 7* + 11* General—12 occupations: Employment (1932= 100)......... ago. + 1* + 2* + 2* 104 110 105 106 Payrolls (1932=100)____ + 6* + 11* + 11* 113 121 118 126 Wage earners in the payroll period Building and real estate about the middle of February on the Contracts awardedf—total. ..... 23p -14 -29 -28 30 25 21 22p Contracts awarded!—residential. lip +12 -31 -34 14 9 7 9p average worked around 34 hours a Permits for building—17 cities.... 4 -29 8 4 3 3 -59 -48 Mortgages recorded—Philadelphia 6 -32 20 15 10 -69 -58 6 week as compared with 32.8 hours a Real estate deeds—Philadelphia . 45 + 8 42 51 42 45 + 1 Sheriff deeds (1930 = 100).......... +12* - 3* — 0* 141 98 month ago and 32.5 hours a year be 122 137 Other deeds (1930 =100).......... 56 + 5* +22* +16* 46 88 53 Writs for Sheriff sales—Phila. . . . fore. Average earnings per worker 987 795 892 761 -15 -23 - 5 1007 811 1026 776 Distribution approximated fifty-eight cents an hour, Retail trade—sales. :....................... 54 67 55 59p + 7 + 8 + 3 45 110 45 48p Retail trade—stocks......................... 63 showing little change from the previous — 4 58 61 63 61p - 0 - 3 + 7 60 81 56 58p Wholesale trade—sales.................... 73 72 79 79p + 8 67 70 72p Wholesale trade—stocks................. month, but in comparison with last 65 70 67 70p + 4 + 7 65 66 66 69p Life insurance sales........................... 93 115 146 105 — 28 107 121 130 121 + 13 +31 year they have continued 5 per celjt New passenger auto, registrations 54 93 83 98 +18 +80 +96 45 72 40 50 Freight car loadings—total............ 61 57 60 59 — 1 - 2 — 0 59 52 58 55 larger. Mdse, and misc. (64.9% of total) 58 56 60 60 54 50 52 55 — 1 + 2 + 2 Coal (23.5% of total).............. 77 63 The February index of employment 70 70 + 0 75 76 - 9 — 4 84 66 Business liquidations in Pennsylvania factories was 76, rela-\ Number............................................... -14* +22* + 18* 85 69 54 99 Amount of liabilities....................... +36* -16* -28* 60 35 36 50 tive to the average of 1923-25, or 5 per Payment of accounts cent higher than a year ago. The pay h Check payments.............................. 75 75 76 75 64 81 + 0 + 17 + 18 Rate of collections (actual) roll index rose to 62, or 16 per cent Retail trade................................... 28 +10 25 29 32 + 6 Wholesale trade........................... 62 72 71 66 - 2 + 5 above last year. The trend of em Prices—United States ployment, payrolls and working time Wholesale (1926= 100).............. 79 79 + 1* + 8* + 9* 74 77 Farm products.............................. 78 79 + 2* +29* +31* 61 72 has been upward since the low levels Foods............................................... 80 83 + 3* +24* +24* 67 75 Other commodities..................... - 0* — 2* - 1* 79 78 78 77 reached early in 1933, barring the Retail food (1913=100)......... + 3* +13* +13* 108 114 118 122 Philadelphia.................................. minor and major fluctuations which + 3* + 8* + 9* 117 118 123 126 Scranton......................................... + 2* + 8* + 8* 115 117 121 124 occurred in the past two years. Productive activity of manufactur Per cent change ing lines in this district during Febru from (000,000’s omitted Feb. Nov. Dec. Jan. Feb. ary expanded to a larger extent than in dollar figures) 1934 1934 1934 1935 1935 Month Year usual. This bank’s index of output, ago ago which is adjusted for the normal sea sonal changes, rose to 70 per cent of Banking and credit Federal Reserve Bank the 1923-25 average as 100, compared Bills discounted................................ $ 20 -95 $169 1 $ 170 1 $ 1711 $ 171 1 0 Other bills and securities.............. with 69 in January and 66 in February 172 0 Member bank reserves.................. — 1 150 198 204 217 216 +44 last year. In consequence, the loss —0 Ratio..................................................... 63.1% 66.2% 67.2% 67.2% 67.5% +0 + 7 Reporting member banks sustained in January was virtually off Loans to customers......................... $471 $434 $432 $428 $421 -2 -11 Other loans and investments... . 570 613 618 643 661 +3 + 16 set, so that the rate of production for Net deposits....................................... 988 1051 1068 1107 1112 +0 + 12 Bankers’ acceptances outstanding. 15.2 13.7 the first two months of the year was 12.3 13.0 12.7 -16 -2 about 8 per cent higher than in the * Computed from data unadjusted for seasonal variation, p—Preliminary. same period last year. t Three-month moving daily average. Page Three OUTPUT OF SHOES AND HOSIERY FOOD PRODUCTS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT SHOES OUTPUT - WHOLESALE EOOD PRICES HOSIERY 1930 1931 1932 1933 1934 1930 1935 193 I 1932 1933 1935 Source: U. S. Bureau of Labor Statistics. Output of such textile products as woolens and worsteds, knit goods, and floor coverings showed increases larger than usual while in the case of silk and cotton manufactures gains were smaller than customary. Indus tries fabricating iron and steel products as well as shipyards reported improve ment while activity in the manufacture of electrical apparatus and automo bile parts and bodies declined more than was expected. Production of the principal building materials has continued at extremely low levels, reflecting a similar condi tion prevailing in building and con struction. Nevertheless, output of cement and brick registered rather ex ceptional gains while that of lumber and its products failed even to main tain the usual rate of activity. Most of the other indicators, particularly those including some of the foods, cigars, leather products, and explo sives registered improvement to a larger extent than customary between January and February. • Output of electric power during Feb ruary was 2 per cent smaller than in the preceding month ; usually it shows little change in this period. Compared with a year ago, production of elec tricity was 1 per cent larger. Total sales for all purposes during the month increased 4 per cent, owing almost en tirely to larger consumption of power by industries which purchased about 51 per cent of all electrical energy sold by ten systems during February. Coal and other fuzls. Output and shipments of anthracite during Febru ary declined by larger than usual vol umes, after three months of an excep tionally high rate of activity which was accompanied by sizeable reductions in inventories. Figures for the first part Page Four of March indicate a further drop in productive activity, reflecting largely a seasonal trend and some labor diffi culty prevailing in certain anthracite sections. Production and shipments of bituminous coal again increased nqt.ceably instead of declining as usual be tween January and February. This upward trend has continued since Au gust, reflecting largely increased in dustrial consumption by steel works and rolling mills, many other manu facturing lines and to some extent elec tric power plants, railroads and by product coke ovens. The trend of coal production since September generally has been upward, although in compari son with last year the output of an thracite show's a considerable decline while that of bituminous coal an in crease of about 10 per cent. Output of by-product coke for the third successive month showed an ex ceptional rise. The volume of gas and fuel oil produced by the petroleum refining industry has fallen off a little further and was considerably smaller than a year ago. (Output and shipment figures are daily averages) Per cent change from 1935 Month Year ago ago Anthracite Production............. tons 194,000 — 11 Shipments...............tons 179,343 -15 1,4151' —26 Stocks............1000 tons Prices. . . .(1926=100) 82.3 0 Employment...........No. 110,777 + 2 Bituminous Production..............tons 365,000 +11 Shipments.. . .No. cars 26,653 + 4 Prices. . . .(1926 = 100) 96.4 + 0 Employment...........No. 132,636 + 1 Coke Prod... (1923-25 =100) 91.7 +10 Prices. . . .(1926=100) 88.8 + 3 Gas and fuel oil 98.0* - 1 Prod. . .(1923-25 = 100) 58.5t + 3 Prices. . . .(1926 = 100) -23 -24 +»5 + 1 + 2 +15 + 4 + 6 + H fll + 6 -13 0 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. t January. Wholesale prices of solid fuel have continued firm for several months. The index number of the Bureau of Labor Statistics for fuel and light ing materials was 73.8 for the week of March 16, compared with 74.0 a month ago and 72.6 a year ago. Awards of building contracts in this district in February totaled about $4,493,000, a decrease of 14 per cent from January and a drop of nearly 17 per cent as compared with a year ago. This de cline in the month was contrary to the usual seasonal tendency and continued the downward trend that has been in evidence since last October. Some sea sonal upturn in March is indicated by preliminary reports. The value of contracts awarded largely. for apartments and hotels showed an exceptionally large gain from January to February while awards for family houses registered only a small increase. Contract awards for public works and utilities, on the other hand, decreased sharply, while the non-residential class increased ow ing solely to miscellaneous buildings. Thus far this year the value of all contract awards has been 28 per cent smaller than in the first two months of 1934. Prices of building materials show only a small degree of fluctuation since early February, following a gradual recession that began in July of last year. The index of the Bureau of Labor Statistics on March 16 was 84.6 per cent of the 1926 average, or the same as a month earlier, and compared with 86.2 per cent a year ago. Ordinary conveyances in February increased in the city areas of Philadel phia, York and Wilkes-Barre but deBuilding and real estate. INDUSTRIAL FUEL AND POWER RATIO OF COLLECTIONS TO RECEIVABLES PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT * ADJUSTED FOR SEASONAL VARIATION WHOLESALE TRADE “■ without adjustment ELECTRIC POWER USED BT INDUSTRIES FUEL OIL OUTPUT RETAIL TRADE BITUMINOUS COAL ~ OUTPUT RATIO OF COLLECTIONS DURING THE MONTH TO RECEIVABLES AT THE BEGINNING OF THE MONTH. 1930 1931 1932 1933 1934 1935 1930 1932 1933 1934 1935 Sourer: Bureau of Mines for coal and fuel oil. Per cent change Building contracts Philadelphia Federal Reserve District Residential........................ Apts, and hotels......... Family houses............. Non-residential............... Commercial.................. Factories........................ Educational.................. All other........................ Feb. 1935 (000’s omitted) $ 977 441 536 1 ,818 522 386 136 774 From month ago 1935 from 2 mos. 1934 + 53 -50 +270 + 3 + 16 - 0 - 30 - 34 + 167 -63 -40 -15 +10 +16 -61 -22 Total buildings.. . . Public works and utili ties .......................... 2,795 + 26 -31 1,698 - 43 -25 Grand total.............. $4,493 - 14 -28 Source: F. W. Dodge Corporation. dined in most other sections. The value of mortgages recorded at Scran ton and Lancaster showed a large per centage increase while in Philadelphia, as in several other large city areas, they declined sharply. Foreclosures in Philadelphia increased 12 per cent in February and showed practically no change in the first two months this year as compared with last. Ship ments of commodities by railroad freight in this section, which have been well sustained since last November, showed somewhat less than the usual rate of gain from January to February and were about 2 per cent below the level of a year ago. Deliveries of mer chandise and miscellaneous commodi ties, which constitute nearly 65 per cent of all freight car loadings in this region, failed to maintain their cus tomary seasonal level in February, as did those of grain and forest products, while shipments of coal and coke regis tered further gains. Rail freight load Distribution, trade and service. ings, chiefly of manufactures, originat ing in the Philadelphia industrial area showed a larger than usual increase from January to February and were at approximately the same level as a year ago. Shipments in early March were well sustained, though compari sons with last year were less favor able than in previous months. Business at wholesale, after showing an unusually small decline at the turn of the year, was maintained at about its customary seasonal level in Febru ary, when the dollar sales of eight im portant lines combined registered an increase of 4 per cent over January. As compared with a year ago, dollar sales were 8 per cent larger, all lines with the exception of shoes and jewelry, which declined sharply, re porting increased sales. In early March demand showed little change as compared with the month before, ac cording to preliminary reports. Stocks of merchandise at wholesale establish ments increased 5 per cent in February, a somewhat larger gain than is .to be expected, and were 7 per cent larger than a year ago. The rate of stock turnover was 6 per cent more rapid in the first two months this year than last. Retail trade sales of department, ap parel, shoe and credit stores combined increased 7 per cent from January to February, after allowance is made for the number of trading days and the usual seasonal change. In early March, however, demand for general merchandise slackened considerably, ac cording to preliminary reports, and was less active than a year earlier, reflect ing partly the late occurrence of Easter this year. Our seasonally adjusted in dex number of dollar sales was 59 in February, relative to the 1923-25 aver age as 100, in comparison with 55 in January and 54 a year ago. The value of retail sales in the aggregate was 3 per cent larger in the first two months this year than last. Inventories at re tail establishments increased less than usual and at the end of the month were 3 per cent smaller than a year ago. The rate at which stocks of merchan dise moved in the first two months this year was 10 per cent higher than last year. At retail stores the ratio of collec tions to receivables declined less than usual in February so that there appears to have been an improvement of about 6 per cent, while in wholesale lines the payment of accounts failed to maintain its customary seasonal level by 2 per cent. As compared with a year ago collections in relation to outstanding balances in both channels were larger, the extent of this improvement amount ing to 10 per cent at retail and 5 per cent in the case of wholesale. Sales of new passenger automobiles, as measured by registrations in this district, increased by a much greater percentage than is usual from January to February and were the largest for that month since 1930. Our seasonally adjusted index stood at 98 per cent of the 1923-25 average in February, as compared with 83 in January and 54 a year earlier. In the first two months this year the number of units sold was nearly twice as large as in the same period last year. Activity of commercial hotels in this district has slackened, following a sharp increase in January. Room oc cupancy and income from all sources Page Five decreased from January to February but continued substantially above a year ago. Further comparisons follow: Per cent change Hotel business Philadelphia Federal Reserve District Feb. 1935 from 1935 from 2 mos. 1934 Jan. 1935 Feb. 1934 Capacity..................... Room occupancy. . . Per cent of capacity used: Feb. 1935............. 51.2 Jan. 1935............. 52.1 Feb. 1934............. 44.4 Revenue from: Guest rooms.......... Food......................... Other sources.... -0 -1 - 0 +n -0 -8 -4 + 9 +11 + 10 + 9 +14 Total revenue.. -4 + 9 +10 + 7 +ii Banking conditions. Loans to CUS tomers at reporting member banks re cently have varied little. Those with out stock or bond collateral, which probably are most representative of accommodation extended to business, have been running at a level somewhat under that of a year ago. Reserves of member banks in total remain greatly in excess of the requirements of law. Contrasting with the situation over most of the past year, the balance of payments in commercial and financial transfers to and from other sections of the country was in favor of this dis trict during the four weeks ending March 20. Operations of the Treas ury likewise helped to make funds available to local banks, although the \iy2 million excess was not as great as in the previous month owing to a sharp rise in receipts caused primarily by income tax payments. Funds ac quired in interdistrict transactions and amounts supplied by operations of the Government were absorbed partly by a rise of 2 millions in currency demand and an increase of 9y2 millions in non member deposits at this bank, which was due mainly to outstanding checks issued in connection with the Govern ment’s relief program. A sufficient sum remained to add more than 6 mil lions to the reserve deposits of mem ber banks. Borrowings of member banks from this bank totaled little over half a mil lion dollars on March 20, much the same as the figure of a month earlier. Industrial advances actually made show a small decline, as repayments ex ceeded further advances; the total of loans and commitments approved by the bank to provide working capital for established industrial and commer Page Six cial businesses, however, increased from $6,828,000 to $7,280,000. There was a rise in the reserve ratio of this bank from 67.3 to 69.2 per cent; this reflected a small decline in Federal reserve note circulation and an increase of 26 millions in cash re serves, caused chiefly by transfers and deposits made to the credit of the bank by the Treasury, which were only partly offset by an expansion in the deposit liability. Deposits of the weekly reporting member banks reached a new high point for the year on March 13 but declined in the following week, owdng no doubt largely to income tax pay ments. Comparison of the figures on March 20 with those for four weeks earlier shows decreases in time funds, in balances to the credit of the Gov ernment, and in amounts due to banks, but a rise in demand deposits. Bal ances held with correspondent banks declined, but there was some increase in reserves at the Federal reserve bank and in the total of loans and invest ments. The change in the latter was due to a rise of 4 millions in loans to the open market and 4 millions in mis cellaneous securities, which more than offset decreases in holdings of securi ties of the United States and in obli gations fully guaranteed by it, and a Mar. 20, 1935 Reporting member banks (000,000’s omitted) Feb. 20 1935 Mar. 21, falling off of 2 millions in loans to customers. Average reserves of all member banks declined from 217 millions in January to 216 millions in February. In the latter month reserves in excess of legal requirements amounted to nearly 90 millions or 70 per cent over the required amount; this was far in excess of figures for the years prior to 1934. Actual reserve deposits on March 9 were nearly 234 millions, a new high point. The only offers of new Govern ment securities for cash during the last four weeks were those of savings bonds, made through the post-offices, and Treasury bills. Treasury bonds and notes were offered under date of March IS, but only in exchange for older securities. Outstanding acceptances of banks in this district declined from $13,046,000 to $12,671,000 during February, and the national total decreased from 516 to 493 millions according to the Amer ican Acceptance Council. In the past year the figures for the entire coun try have dropped 257 millions, or more than one third; 91 millions of this was in bills covering domestic ware house credits, 80 millions in export bills, and 75 millions in bills based on goods stored in or shipped between foreign countries. 1934 Federal Reserve Loans on securities: To brokers and dealers in N. Y. City......................... $ To brokers and dealers elsewhere............................ To others................................ 20 $ 18 S 22 15 164 15 165 12 208 Total loans on securities. . . . $ Acceptances and commercial paper................................... Loans on real estate................ Other loans................................. 199 $ 198 S 242 24 72 168 22 72 j 169 14 249 Total loans............................ $ U. S. Government securities. Obligations fully guaranteed by U. S. Government . . Other securities......................... 463 $ 300 461 * 301 505 56 269 58 } 265 245 288 Total loans and invest ments ................................... SI,088 SI,085 *1,038 Net demand deposits.............. 658 751 735 Time deposits............................ 306 312 310 62 Government deposits............. 74 65 Due from banks....................... 158 16c 134 Due to banks............................. 257 248 203 Reserve with Federal Re serve Bank........................ 148 148 144 Philadelphia (Dollar figures in millions) Changes in— Mar. 20, 1935 Bills discounted.... * 0.0 Bills bought............... 0.5 Industrial advances. 3.7 United States secu rities......................... 167.1 Other securities......... 0 Total bills and securities.. . . $171.9 Fed. res. note cir culation ................... 233.5 Fed. res. bank note circulation—-net. . 0 Member bank re serve deposits.... 223.9 U. S. Treasurer —• general account . . 11.4 Foreign bank de 1.7 posits ........................ Other deposits........... 11.4 Total reserves........... 333.4 69.2% Reserve ratio............. Four weeks -S0.1 - 0.0 - 0.1 0 0 One year -$15.5 — 1.5 + 3.7 - 0 0.5 -$0.2 -$13.8 - 1.0 - 2.5 0 - 17.5 + 6.3 + 12.6 + 10.1 + + 0.3 + 9.6 +26.2 + 1.9% + i.i + 0.3 4- 13.5 - 0.1% 9.0 RESERVE BANK CREDIT AND THE FACTORS THAT AFFECT IT Philadelphia Federal Reserve District Feb. 21 to Mar. 20 inclusive—in millions of dollars Sources of funds Reserve bank credit extended in district. — 0.6 Commercial and financial transactions (chiefly intcrdistrict).................................. + 7.5 Treasury operations........................................ +11.4 Uses of funds Currency demand.......................................... Member bank reserve deposits................ Nonmember deposits at reserve bank. . Unexpended capital funds of reserve bank + 2.3 + 6.3 +9.6 +0.1 Total.......................................................... +18.3 Total............................................................. +18.3 Note: This table gives, in balance sheet form, a sur mary of the banking changes which have had an influence on the amount of reserve bank credit in use i: this district. Employment and Payrolls in Pennsylvania LOANS TO CUSTOMERS REPORTING MEMBER BANKS * PHILA. FED. RES. DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes SECURED BY — STOCKS AND BONDS Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weighted proportionately.) Feb. 1935 index 1933 All manufacturing......... Iron, steel and prods. . . . Non-fer. metal prods. .. . Transportation equip. . , Textiles and clothing. . . . Textiles............................. Clothing........................... Food products.................... Stone, clay and glass.... Lumber products............... Chemicals and prods. .. . Leather and products.... Paper and printing........... Printing............................ PHILADELPHIA FEDERAL RESERVE DISTRICT s 76 62 93 56 102 100 107 104 69 49 87 96 90 84 + 5 + 7 + « + 7 + 2 + 6 -10 + H +20 - 4 — 6 + 5 + 2 + 0 +2 +2 +3 -3 +3 +2 +9 +2 +2 -5 -0 +6 +2 +2 62 54 85 37 91 90 95 88 47 32 75 89 80 80 +16 + 7 +11 +29 +n +17 +15 + 5 +18 + 5 + 3 + 5 + 15 + 8 +13 +16 + 5 + 18 + 9 +21 — 6 +10 + 5 + 9 +18 - 0 + 13 + 2 - 1 + 3 + 1 + 1 + 8 + 9 + 2 + 6 + 3 + 0 + 6 + 4 - 2 + 8 +10 + 10 + 2 + 8 + 7 +18 + 5 + 2 + 1 + 10 + 8 + 2 + 3 Cigars and tobacco.... Rubber tires, goods. . . Musical instruments .. 1935 CURRENCY DEMAND MILLIONS Per cent Feb. 1935— per cent Feb. change from 1935 index Jan. Feb. Jan. Feb. Jan, 1935 1934 1935 1934 1935 Per cent change from Feb. 1934 y Employehoursf Payrolls* 62 77 53 + 7 - 7 + 7 —1 +3 +2 41 62 48 - 9 - 6 + 6 + 7 + 6 - 5 + 6 + 7 -25 -10 + 4 * Figures from 2,163 plants. t Figures from 1,947 plants. Note: Indexes of factory employment and payrolls for nrevious years, as revised, are given in our supplements aated August 1933 and February 1935 as well as in the Business Review of the latter date. + 50 General Index Numbers O ..... Covering twelve branches of trade and industry v''~N/41W V -50 Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) Y Feb. 1935 index JAN.1,1932=0 -100 !932 1933 1934 1935 General index Percentage change—February 1935 from February 1934 City areas* Manufacturing Employ ment r Allentown.............. Altoona................... Harrisburg............ Johnstown............. Lancaster............... Philadelphia......... Reading.................. Scranton................ I renton.................. Wilkes-Barre. . . Williamsport........ W ilmington........... \ ork........................ Wage payments — 1 + 7 + 7 + 8 + 11 + 10 + 18 - 5 - 4 — 0 +15 - 7 + 1 + 2 - 0 + 13 +41 + 19 + 15 +30 + 7 + 7 + o +21 - 4 + 14 Building permits (value) + 117 - 50 + 7 +m +422 - 80 - 21 + 46 +218 + 146 - 67 +240 Debits + 1 + 16 + 6 +22 +43 +20 +15 + 2 — 0 — 3 + 3 +21 + 11 Retail trade sales — 4 +15 + 8 + 6 +12 + 3 + 6 + 5 +22 + 3 (weighted)___ Manufacturing............................... Anthracite mining........................ Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing .. . Public utilities........................... .. Retail trade................ W holesale trade............................. Hotels............................. Laundries.................. Dyeing and cleaning.................... 106 120 103 125 46 78 161 88 105 106 106 92 83 Y 1 1 3 1 2 3 5 9 i 2 2 1 6 + 3 + 5 +10 + 10 + 4 + 3 + 8 + 1 + 4 + 5 + 4 + 2 — 4 - 59 + 8o + 88 +425 — 47 - 22 - 55 +109 - 38 + 110 - 37 + 82 -16 + 3 -21 + 0 - 3 -19 -11 -10 + 8 -16 -14 -26 -15 Feb. 1934 + 2 + 6 + 2 -10 Jan. 1935 Feb. 1934 -7 -0 +3 +3 +0 -1 -4 Jan. 1935 +11 +16 — 2 +27 + 6 + 7 + 12 +15 +38 126 151 120 192 45 106 154 90 103 98 105 90 83 +1 +2 +2 +1 -8 +24 + 2 + o + 1 + 3 + 2 — 2 — 5 + + + + + - 5 3 4 9 3 4 PENNSYLVANIA 12 MANUFACTURING AND NON-MANUFACTURING INDUSTRIES AND erviccs PERCENT + 7 . PAYROLLS x~ ? + 5 », \ : / /v V J + 4 + 3 +50 + 3 + 7 + 9 +27 - 7 Per cent change from Feb. 1935 index INDUSTRIAL EMPLOYMENT AND PAYROLLS • + + + + + + + — + + + — - Per cent change from + 5 + 2 + 8 -22 + 6 -13 - 1 — 1 February 1935 from January 1935 Allentown.............. Altoona................... Harrisburg............ Johnstown............. Lancaster............... Philadelphia.......... Reading.................. Scranton................. Trenton.................. Wilkes-Barre. . . . Williamsport......... Wilmington........... York........................ Payrolls \ /f\ * ,• i /• \ EMPLOYMENT “ • • • ••• ! % 80 +6 60 * Area not restricted to the corporate limits of cities given here. 1932 1933 1934 1935 Page Seven Index numbers of individual lines of trade and manufacture WHOLESALE Philadelphia Federal Reserve District PERCENT •>1 Index numbers: percentages of the 1923-1925 average taken as 100 (All figures are rounded from original data) '•............ Not adjusted Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change which results from an uneven distribution of business be tween the months of the year. TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT ADJUSTED TO* SEASON TOTAL ^SALES BOOTS AND SHOES 75 Percentage com parison Unadjusted indexes reflect merely the actual change which may or may not be up to the usual seasonal expecta Feb. Dec. Jan Feb 1934 1934 1935 1935 tions. AA_/ Al SALES Feb. 1935 with Month Year ago ago 1935 with 2 mos. 1934 Feb. 1934 Dee. Jan. 1934 1935 DRUGS \ STOCKS Retail trade / Sales Total of all stores. . . Department............ Men’s apparel. . . . Women’s apparel. Shoe.......................... Credit....................... 59p + 7 56p + 5 55p + 2 87p + 11 11 53p 53p + 21 + Stocks of goods Total of all stores. . . Department............ Men’s apparel. . . . , Women’s apparel. Shoe........................... Credit....................... 61p — 4 53p 0 58p - 16 0 89 55p + 7 7 69p — 3 — 5 + 6 + 3 — 7 — 6 8 +4 + 4 +15 + 5 + 17 Rate of stock turnover 2 months (actual, not indexes). r ^ Feb. 1935 + 3 + 3 +11 + 5 + 0 + 5 48p 46p 45p 64 p 43p 47p 110 115 97 137 91 96 J V V* 'vy S- DRY GOODS 58p 50p 57p 84 52p 68p " SALES''*^ LECTRICAL SUPPLIES + 10* 0.48 125 Wholesale trade Sales Total of all lines......... Boots and shoes. . . Drugs.......................... Dry goods....... Electrical supplies. Groceries................. Hardware.................. Jewelry......... ............. Paper........................ 79p - 0 0 46 0 89 42 + 4 10 67p 12 lp + 0 42 + 3 38 + 2 72 33 93 37 51 111 43 42 + 8 -10 + 1 + 0 +24 + 8 +13 — 6 12 + 11 4 4 + 7 + 7 1 5 2 1 1 0 — - 66 63 + 67 21 105 42 r 74 82 65 57 r 60 70p 20 106 45 91p 83 66 57 60 + + + + + - 22 69p 24 108 111 103 40 40 r 43 86p 74 71 86 85 87 5 + 2 — 5 + 6* 28 45 48 37 60 13 55 15 108 110 43 40 50 114 84 36 25 16 13 48 48 43 87 19 79 19 118 93 53 38 64 125 121 33 27 16 94 182 51 97 60 83 134 89 69 62 147 74 20 51 52 47 89 15 58 19 117 100 61 40 76 120 108 23 26 15 82 9 49 78 61 82 134 93 68 65 135 83 + + 78 35 49p 82 62 84 134 102p 77 62 134p 87 12 7 - 15 + 7 - 7 8 — 22 + 1 + 14 - 0 + 4 - 0 + 4 + 7 + 5 + 8 + 12' - 7 + 12* - 5 +306 - 1 + 5 + 0 + 2 + 0 + 10 + 13 - 4 - 1 + 4 * Computed from data unadjusted for seasonal variation. Page Eight 65 23 113 47 70 73 63 49 63 8 +23 +19 + 7 Rate of stock turnover 2 months (actual, not indexes). Pig iron.................................................. Steel........................................................ Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles.................... ............... Automobile parts and bodies. . . . Locomotives and cars...................... Shipbuilding......................................... Silk manufactures.............................. Woolen and worsteds....................... Cotton products............................... Carpets and rugs............................. Hosiery................................................... Underwear.......................................... Cement. Brick. Lumber and products............. Bread and bakery products. Slaughtering, meat packing. Sugar refining............................ Canning and preserving........ Cigars.......................................... Paper and wood pulp............. Printing and publishing......... Shoes........................... ................ Leather, goat and kid.......... Explosives................................... Paints and varnishes............ Petroleum products............... Coke, by-product..................... 81 32 94 38 84 112 53 86 60 70 28 92 33 50 112 32 22 62 STOCKS 72p 32 91 35 60p 112p 34 27 65 67 36 90 35 48 104 30 29 59 -v kJ-.-V' GROCERIES Stocks of goods Total of all lines............................ Boots and shoes........................ Drugs............................................. Dry goods.................................... Electrical supplies.................... Groceries...................................... Hardware..................................... Jewelry.......................................... Paper............................................. Output of manufactures + 7 -11 + 1 + 19 2 + + 9 + 8 - 3 +10 -17 +21 - 6 +36 +38 + 7 -19 +29 +24 — 9 +46 - 0 +58 + 13 +35 -31 + 16 -13 + 2* — 8 -41 + 2 - 7 + 2 - 2 — 1 -15 — 0 — 10 + 6 +11 -25 +19 - 4 +39 +43 + 1 -11 +30 +24 + 4 +54 + 7 +66 +25 +44 -26 + 6 - 7 - 3* -10 -75 + 8 - 8 + 3 - 2 + 4 -16 + 2 - 9 + 1 +12 66 17 56 49 53 66 21 66 50 59 150 SALES 68 - 50 59 '’"‘stocks'^ 0.81 28 47 49 42 57 13 60 15 106 116 44 43 51 119 91 25 24 16 84 87 78 44 74 60 86 143 129 77 68 125 82 p—Preliminary. HARDWARE 13 20 45 50 48 50 84 45 41 85 15 77 19 124 95 50 41 61 121 119 27 26 15 89 101 118 52 70 60 84 114 97 13 57 19 STOCKS 24 57 46 57 79 14 48 —................... ............. *..♦ 20 131 106 65 43 41 81 71 134 125 106 123 18 16 24 28 14 14 120 102 61 77 90 6 48 64 61 82 137 98 68 68 60 147 72 59 135 83 r—Revised. Jk.'-"-: r JEWELRY ~STOCKS /< v... SALES 86 79 46 46p 69 62 84 141 HOp 77 61 133p 92 PAPER 100 SALES -.......... ..... ••........ 1932 1933 1934 1935
@FedFRASER