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■ THE BUSIN\El5S REVIEW PR b AM 9 TJ^IRD FEDERAL PHILADELPHIA C3 RESERVE DISTRICT APRIL i, 1940 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Industrial activity showed a further sharp decline in February and a less marked reduction in the first half of March. Wholesale commodity prices generally were steady, following some decline in January and early February. Production. In February the Board’s seasonally adjusted index of industrial production was 109 per cent of the 1923-1925 average as compared with 119 in January and 128 in December. A further decline at a slower rate is indicated for March on the basis of data now available. In August 1939, the month prior to the outbreak of war, the index was 103. Steel production, which had risen sharply in the latter part of 1939 and then decreased considerably in Janu ary, showed a further marked reduc tion in February to 69 per cent of capacity. In the first half of March output was steady at a rate of about 65 per cent. Plate glass production declined further in February and out put of lumber, which had dropped sharply in January, showed less than the usual seasonal rise. Automobile production in February was main tained at the high level prevailing in January. Dealers’ stocks of new cars rose to high levels in this period, not withstanding the fact that retail sales of cars were in large volume for this time of the year. In the first half of March output of automobiles showed less than the customary sharp increase. In some industries not included di rectly in the Board’s production index, particularly the machinery, aircraft, and rayon industries, activity contin ued at high levels. Changes in output of nondurable goods were largely seasonal in Feb ruary except at textile mills and sugar refineries. At cotton textile mills ac tivity declined somewhat from the high levels prevailing since early last au tumn. Activity at woolen mills, which had decreased considerably in Decem ber and January, declined further in February and output of silk products was reduced to an exceptionally low level. Sugar refining showed less than the sharp rise usual at this season. Mineral production declined in Feb ruary, owing chiefly to a considerable reduction in output of anthracite. Bi tuminous coal production declined somewhat, following a rise in January, INDUSTRIAL PRODUCTION FREIGHT CAR LOADINGS POINTS IN TOTAL 100 while output of crude petroleum in creased to new high levels. Value of construction contract awards in . February showed little change from the January total, re flecting a further decrease in contracts for public construction and a contraseasonal increase in private contracts, according to figures of the F. W. Dodge Corporation. The increase in private residential awards nearly equalled the decline that occurred in the previous month when severe storms curtailed building operations in many areas. Distribution. Retail distribution of MONEY RATES IN NEW YORK CITY For weeks ending January 6, 1934. to March 16, 1940. WHOLESALE PRICES POINTS IN TOTAL INDEX [100 ----TOTAL iMHHL Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. Durable manufactures, nondurable manufactures, and minerals expressed in terms of points in the total index. By months, January 1934 to February 1940. Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 aver age =100. Miscellaneous, coal, and all other expressed in terms of points in the total index. By months, January 1934 to February 1940. Index compiled by the United States Bureau of Labor Statistics, 1926 = 100. By weeks, 1934 to week ending March 9, 1940. Page One general merchandise showed little change from January to February and remained somewhat below the high level of the latter part of last year, with due allowance for seasonal changes. Sales at variety stores and mail-order houses showed about the usual seasonal rise in February, while at department stores, where some in crease is also usual at this time of year, sales remained at about the January level. Freight-car loadings declined con siderably from January to February, reflecting for the most part a sharp reduction in coal shipments and some further decrease in loadings of mis cellaneous freight. Foreign trade. Exports of United States merchandise in February de clined less than seasonally from the high levels reached in December and January. The principal decreases were in shipments of cotton, copper, and aircraft, which had been excep tionally large in previous months. Ex ports to Japan fell sharply and there were declines also in shipments to the United Kingdom, The Netherlands, and Russia, while exports to Belgium and the Scandinavian countries in creased. There has been little change in the rate of gold inflow. The monetary gold stock increased by $246,000,000 in February and by $109,000,000 in the first two weeks of March. Commodity prices. Prices of nonferrous metals advanced from the middle of February to the middle of March, while steel scrap and textile materials declined somewhat further. Most other commodities showed little change and in the week ending March 9 the general index of the Bureau of Labor Statistics was at 78.3 per cent of the 1926 average as compared with 78.5 a month earlier. Government security market. Fol lowing a relatively steady market dur ing February, prices of long-term Treasury bonds increased sharply after the announcement by the Treasury early in March that its operations dur ing that month would be limited to the issuance of a five-year note to refund a note maturing next June. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities rose during the six weeks ending March 13, largely as a result of increases in investments at New York City banks. Following a reduction during January, commercial loans increased, mostly at banks in cities outside New York. Bank re serves and deposits continued to in crease during the period. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District has slackened somewhat further from the peak reached at the end of last year, al though some seasonal expansion in February and March was to be ex pected. The seasonally adjusted index of production declined 6 per cent from January to February, and some further recession occurred early in March. The level in February was about 11 per cent below the December high but was still 7 per cent above February 1939 when activity in this District was well sustained. In the first two months of the year industrial produc tion averaged 11 per cent above the corresponding period a year earlier. The decline from January to Febru ary reflected reduced output of manu factured goods and fuels, especially anthracite. Production of crude oil, bituminous coal, and manufactures, however, continued well above a year earlier. Construction activity increased from January to February, owing largely to an expansion in awards for nonresidential structures. Preliminary in dications are that the usual spring upturn is now in evidence. Employment and payrolls in twelve lines of trade and industry declined further from January to February, the MANUFACTURING ACTIVITY decrease in payrolls being especially large at mines and quarries. In the manufacturing industry the downward trend extended into March. Distribution of commodities to con sumers also decreased in the second month of the year but has since shown some improvement. Freight-car load ings and wholesale and retail trade sales declined in February when some expansion was to be expected. Inven tories at retail establishments increased and stocks at both wholesale and re tail were larger than in early 1939. Prices of raw and finished com modities have fluctuated irregularly since the end of January with a gen- WHOLESALE PRICES PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT 7 INDUSTRIAL STAPLES PRODUCTION 813 COMMODITIES PAYROLLS 7 AGRICULTURAL STAPLES I 1934 Page Two 1935 1936 1937 1938 1940 1937 1938 1939 1940 eral downward tendency. Temporary advances in quotations, especially on grains and certain metal products, have appeared from time to time, in fluenced in part by foreign develop ments. The lack of domestic demand has been a depressing influence on many prices. The index of 813 quota tions for wholesale commodities, com piled by the Bureau of Labor Statistics, was 77.9 per cent of the 1926 average in the week ended March 23 as com pared with a high of 79.5 early in January. Manufacturing. The demand for most factory products in this District de creased further from the middle of February to the middle of March and, except in the steel industry, was below a year ago. Inquiries and orders for building materials are beginning to increase seasonally, but buying inter est in other products is slow. Prices of manufactures continue weak, es pecially in textiles and leather, but are above the levels of early 1939. The volume of unfilled orders for most factory products in this district is still declining and appears to be be low a year ago. The principal excep tion is in steel and steel consuming industries, where backlogs are larger than in early 1939. Plant activity continued to decline in the four weeks ended the middle of March except at establishments pro ducing building materials. As a re sult of the reductions in operations, purchases of equipment and expansion of facilities have slackened. Inventories of raw materials at re porting factories in March continued at about the same level as a month and a year earlier. Supplies of finished products at most of these concerns in creased somewhat in the month but were about same as a year ago, except at steel producing plants where stocks seem smaller than in March 1939. Employment in Pennsylvania fac tories declined 1 per cent from Janu ary to February but was 10 per cent above February 1939. Payrolls de clined 3 per cent in the month, instead of showing the usual gain, but were 17 per cent above a year earlier. Prelimi nary reports indicate that both em ployment and payrolls declined some what further from February to March, especially in the textile industry, al though seasonal improvement was to be expected. The largest declines in February were in the building material and iron and steel industries. Decreases were particularly sharp at foundries, steel Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not Feb Dec. Jan. Feb. be typical. 1939 1939 1940 1940 Feb. 1940 from Month Year ago ago 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 industries!............... Not adjusted Per cent change 94 r 77 93 r 75 67 r 101 92 85 63 r 106 89 82 97 71 78 75 106 104 34 r 46 137 111 116 110 92 86 61 61 59 61 76 61 414 479 88 83 p 82p 89p 83p 86p 75p 92 77p 110 99 38 r 35 131 132p 106 nip 88 89 74 53p 75 51p 70 68 449 444 86 94 85 97 r 76 97 79 269 275 267 281 204 192 261 264 183 + 7 + 9 +32 - 2 +38 - 8 +30 + 3 - 4 + 2 +19 + 1 + 3 -13 -16 - 6 - 4 — 6 — 2 -11 - 1 6 2 -10 - 8 +1 + 5 + 1 -29 -32 - 4 - 1 +n + 7 1940 from Feb. Dec. Jan. Feb. 1939 1939 1940 1940 2 mos. 1939 +n 79 90 + 13 76 89 +39 - 0 +45 64 r 101 - 6 88 86 r +35 72 98 77 + 3 74 77 + 9 88 +15 29 42 110 135 +16 109 - 1 117 86 + 4 93 - 1 66 60 66 + 1 58 +22 66 80 + 8 414 450 87 84 94 r 88p 78 80p 97 93 77 76p 91 84 32 r 30 128 132p 110 USp 88 89 56p 81 81 54 p 80 74 431 444 - 5 - 6 - 5 + 6 - 7 + 3 + 9 262 +10 268 + 7 175 - 1* - 3* — 3* +10* +17* +21* + 11* 80 r +21* 70 r +26* 67 91 90 90 _ + 5* +10* + 6* 105 r 121 +13 - 8 +17 +23 +44 - 7 +27 - 7 -15 -19 +19 -13 56 - 6 39 -30 59 + 4 97 + 3 14 +28 46 - 9 324 59 52 51 42 49 44 103 100 13 13 61 59 293 244 - 6 + 4 3* 4* -13 - 1* + 0* + 0* -13 -13 -15 - + 3 146 72 -f 2* + 8* - 5 +39* + 3* - 3* + 17 +16 + 7 + -17* -56* -16* -51* -13* 84 r - 6* 32 104 - 5 + 8 +16 30 + 4 + 4 - 1* 247 248 177 84p 83p + 2* + 2* - 1* + 4* + 2* 288 292 i277 275 289 286 194 186 181 Employment and wages—Pa. Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 = 100)........ General (1932=100) Employment................................. Payrolls.......................................... 1* 4* 89 84 r 84 r 111 88 82 81 110 +14* 138r 170 159r 152 Building and real estate Contracts awardedf—total.. . . Residential!.............................. Nonresidentialf........................ • Public works and utilities!. . Permits for building—17 cities. Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila.. . . 57 r 53 47 56 r 52 51 58 r 45 40 81 r 85 78 19 23 18 50 55 43 318 287 212 53 47 47 96 33 51 270 +88 +19 -15 52 33 48 115 26 55 275 Distribution Retail trade —sales.................... stocks................ Wholesale trade—sales................... stocks................ Life insurance sales......................... 85 New passenger auto, registrations Hotels—Occupancy.. . (1934 =100) Income, total (1934 =100) Freight-car loadings—total............. Merchandise and miscellaneous. Coal............................................. 80p 81 p 84 93 0 59 75 62 71 8* -14 +54* + 2* - 1* +25 +26 +18 89 83 98 122 113 81 I16r 106 r 118 133 r 136r 129 73 70 56 73 69 55 75 81 65 59p 78p 93 112 119p 129p 64 64 70 Business liquidations Number............................. Amount of liabilities___ 69 85 35 70 14 83 112 95 90 30 30 36 31 79 68 79 69 72 84 79 72 84 77 77 78 78 74 77 75 77 75 16 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ Prices—United States Wholesale (1926 =100). Farm products............... Foods............................... Other commodities.... Retail food........................ Philadelphia................... Scranton.......................... (In millions of dollars) _ + + + Feb. 1939 1* 1* 1* 1* 1* - 1* 1* + 2* + 3* 77 + 3* 67 - 71 4* 80 1* 77 1* 78r 2* 74 0* + + - + 69 71 83 % change from Nov. 1939 Dec. 1939 S 0.4 231 598 79.6 $ 0.7 218 588 81.0 8 209 401 76.7 $ 395 713 9.7 $ 413 725 $ 418 728 $ 414 745 Jan. 1940 Feb. 1940 Month ago Year ago -14 - 0 - 3 - 0 -50 - 1 +50 + 7 +1 + 0 + 6 + 5 - 2 Banking and credit Federal Reserve Bank Bills discounted.............................. Other bills and securities............. Member bank reserves................. Reserve ratio (per cent)............... Reporting member banks Loans................................................. Investments.............................. .. . . Bankers’ acceptances outstanding. $ 1.2 10.2 * Computed from data unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. ! Not included in production index. 10.1 0.7 207 618 82.4 10.0 $ 0.6 206 602 82.3 * 419 747 9.5 p—Preliminary. - 5 -Revised. Page Three ACTIVITY IN THE STEEL INDUSTRY EMPLOYEE-HOURS PERCENT TEXTILE ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT FOUNDRIES HOSIERY STEEL WORKS AND ROLLING MILLS A / W WOOLENS AND WORSTEDS '-MACHINERY AND PARTS , (goods 1935 1936 1937 1938 works and rolling mills, and plants producing structural steel, and heat ing and plumbing supplies. Declines also were reported in nonferrous metals, transportation equipment, and leather and shoes. At textile mills producing cotton goods and woolens and worsteds, payrolls were reduced substantially instead of showing the expected increase. Some improvement was reported by manufacturers of car pets and rugs and by producers of women’s clothing and shirts and furnishings. Most other industries showed smaller than seasonal increases. Average hourly earnings of factory workers in Pennsylvania declined frac tionally to 71 cents in February, and average weekly earnings declined to $25.78 from $26.36 in January. At Delaware factories, employment declined 1 per cent from January to February but was 6 per cent above February 1939. Wage disbursements showed no change in the month and were 11 per cent larger than a year earlier. Declines from January to February in payrolls at plants produc ing building materials, metals, and leather and rubber products were off set by increases in the case of trans portation equipment, foods and tobacco, and paper and printing. At factories in Southern New Jersey, employment declined 3 per cent and payrolls 2 per cent in February but were 15 per cent and 29 per cent re spectively above February 1939. The output of manufactured goods in this District declined 4 per cent fur ther in February, after allowing for the usual seasonal change. This was due chiefly to a decrease of 6 per cent in the production of durable goods. Output of iron and steel products de clined 11 per cent in the month, owing Page Four 1939 1940 1935 COTTON and spindle 1936 primarily to sharp reductions in crude steel and iron and steel castings. The output of building materials and of transportation equipment on an ad justed basis also was lower than in January. Activity at plants producing ships and locomotives improved, but declines were reported by producers of automobiles and bodies and parts. In nondurable goods lines, activity was reduced 2 per cent in the month, reflecting decreases in the output of tobacco and products, foods, and tex tiles, after adjustment for seasonal changes. In textile lines the sharpest decline was in cotton products. While recent declines have been greatest in the production of durable goods, activity in these lines of indus try in February was 32 per cent above February 1939, while in consumers’ goods industries activity was 2 per cent lower than a year earlier. Total pro duction of manufactured goods in February was 9 per cent above a year ago, and in the first two months ex ceeded output in 1939 by 13 per cent. Production of electric power de clined 5 per cent from January to February, when there is usually no change, and total sales were 6 per cent smaller on an adjusted basis. Sales to industry declined about 3 per cent instead of showing the customary in crease. In the first two months of this year output has averaged 9 per cent and total sales 10 per cent above the corresponding period in 1939. Coal and other fuels. Demand for an thracite at the mines has slackened. Dealers are purchasing only small quantities for immediate needs in an ticipation of a seasonal decline in prices after April 1. But sales to house holders continue active, owing to un usually cold weather. HOURS 1937 ■ 1938 1939 1940 Production of anthracite increased in March, following a considerably larger than seasonal decline from Jan uary to February that reduced output to a level about 16 per cent below 1939. In the first two months of 1940, production approximated the volume of a year earlier. The market for Pennsylvania bitu minous coal remains quiet. Industrial consumption has been decreasing for several months and in March was smaller than last year. Prices con tinue weak at a level somewhat below a year ago. The output of collieries decreased more than usual in February but re covered in the first half of March and continued well above the 1939 level. Production in the first two months this year was the largest since 1937. Production of by-product coke de clined sharply in February, reflecting a further recession in activity at plants turning out primary iron and steel. The output of gas and fuel oils con tinued at a high level, relative to other recent months. Production of coke was 35 per cent and that of gas and fuel oils 21 per cent greater in the first two months this year than last. Building. Construction activity in this district was unusually well maintained in February but continued below the high level of early 1939. Operations on contracts previously awarded for public works and utilities and indus trial buildings expanded considerably in the month and the construction of one and two-family dwellings decreased less than seasonally, following sharper than usual declines in the previous three months. The value of new contracts awarded increased 5 per cent in February to $12,700,000 and was nearly 50 per cent SALES OF NEW PASSENGER AUTOMOBILES VALUE OF BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT 923-25AVC.«IOO PHILADELPHIA FEDERAL RESERVE DISTRICT THOUSANDS OF CARS SMC S. MOVING AVG. 35 — 80 1929 RESIDE NTIAL INDUSTRIA L 60 1937 - iN >* % / f\\j* »\ 40 i -v*' x* » 1940 l ■/ \; ✓w 1939 20 o ADJUSTCO TOR EASONAL VARIATIC N 1936 1937 1938 1939 greater than in the same month last year. Pronounced gains over January in contracts for family houses, fac tories, educational buildings, and un classified structures were partly offset by reductions in the volume of awards for public works and utilities, com mercial buildings, and apartments and hotels. Compared with February 1939 contracts awarded for all classes of construction except residences and edu cational buildings were substantially larger. Building contracts Philadelphia Federal Reserve District Per cent cha nge Feb. 1940 (000’s From 1940 omitted) month from 2 mos. ago 1939 Residential........................... Apts, and hotels............. Family houses................. Nonresidential.................... Commercial..................... Factories........................... Educational..................... All other........................... $3,904 875 3,029 4,982 837 1,841 246 2,058 + 2 - 53 + 56 + 48 - 30 + 46 +154 +155 - 12 + 44 - 27 - 1 - 27 +161 - 58 - 22 8,886 + 24 - 3,853 - 22 + 57 Grand total.................. 812,739 + 5 Total buildings........... $ Public works and utilities. + 7 9 Source: F. W. Dodge Corporation. In the first two months of 1940 awards of building contracts in the aggregate amounted to nearly $25, 000,000, or 9 per cent more than a year earlier and, with the exception of 1937, were the largest for the period since 1931. Awards for public works and utilities, factories, and multiple dwellings were substantially above the levels of a year ago, but contracts for other classes of construction decreased from 22 to 58 per cent in the year. Distribution, trade and service. Re tail trade sales showed contra-seasonal declines from January to February, but business in March improved consider 1940 JAN. FEB. MAR. APR MAY JUNE JULY AU& SEPT. OCT. ably. Preliminary reports indicate that the volume of business in March was substantially above March 1939, even after allowing for the earlier date of Easter this year. While consumer purchases have been somewhat re stricted both by unusually severe weather and by the decline in indus trial activity, retail sales in the first three months were larger than in the first quarter last year. This was due primarily to the heavy backlog of buying power resulting from increased industrial activity between May and December of 1939. In February the aggregate index of retail trade sales declined 6 per cent, after allowing for seasonal change, to about the same level as in February 1939. The sharpest reductions in the month were reported by apparel and credit stores, where the volume of business in the three preceding months was unusually large. Compared with a year ago, sales were larger at depart ment and apparel stores and smaller at establishments specializing in foot wear and in furniture and household equipment. Aggregate inventories at reporting establishments increased 4 per cent more than seasonally in February, and were 4 per cent larger than in Feb ruary 1939. The largest increase in the month was 17 per cent at shoe stores. Stocks at department stores expanded 6 per cent and at women’s apparel and credit stores were un changed from the month before. The increases in the month and the year were due in part to early purchases of merchandise for the Easter season. Wholesale trade sales declined 3 per cent from January to February, the sharpest reductions being at estab lishments dealing in drugs and elec NOV. DEC. trical supplies. Sales of dry goods, paper, hardware, and groceries also were somewhat smaller than in the month before, while the volume of business in footwear and jewelry in creased sharply. Total sales were about 2 per cent above the level of February 1939. Inventories at wholesale establish ments declined 4 per cent from Janu ary to February but were 8 per cent larger than in February 1939. Shipments of freight by rail in the Allegheny District declined more than usual from January to February but continued well above the levels of a year earlier. Larger than customary declines occurred in shipments of mer chandise and miscellaneous materials and livestock. Following an unusually heavy movement in the previous six months, loadings of coal decreased, and shipments of coke declined sharply instead of showing the customary in crease. Shipments of grain and for est products reached about the same volume as in January, and the move ment of ore increased, but not so much as is customary at this time of year. Total freight loadings in the district in the first three weeks of March were below the February average, whereas usually there is some expansion. The movement of freight origina ting in Philadelphia declined from Jan uary to February but increased in March. Freight-car loadings of prod ucts other than grain for export through the Port of Philadelphia reached nearly 2,000 cars in February or 125 per cent more than a year earlier. Sales of new passenger automobiles declined 1 per cent from January to February but were 39 per cent above February 1939. For the first two Page Five months of the year sales of automobiles were 54 per cent above the same period a year ago. Income of nonresort hotels was un changed from January to February but 3 per cent less than in February 1939. Hotel business Philadelphia Federal Reserve District Feb., per cent 1940 change from from Month Year ago ago —0 +0 Room occupancy.................... Per cent of capacity used: Feb. 1940................. 52.8 Jan. 1940................. 52.6 Feb. 1939................. 51.2 Revenue from: Guest rooms........................ Food....................................... Other sources...................... mos. 1939 —0 +3 -1 -2 -6 +0 -0 +0 -3 -1 -3 Banking conditions. During the past month, loans increased while invest ments decreased at the reporting mem ber banks in this district. Although tax payments were heavy, the volume of deposits changed little and member bank balances at this bank increased. A continuing large volume of sur plus funds in the hands of member banks is partly indicated by reserve balances averaging $603,500,000 in the first half of March, which were about $196,000,000 larger than a year earlier. The proportion of excess to required reserves was 101 per cent at banks in Philadelphia and approxi mately 90 per cent at country member banks in this district. Banks gener ally are also carrying heavy balances with correspondents. Member bank reserves (Dollar figures in millions) Philadelphia banks: 1940—Feb. 1-15 Feb. 16-29 Mar. 1-15 1939—Mar. 1-15 Country banks: 1940—Feb. 1-15 Feb. 16-29 Mar. 1-15 1939—Mar. 1-15 Held Re quired Ex cess $429.9 $211.5 $218.4 420.6 210.3 210.3 421.6 209.7 211.9 258.0 175.3 82.7 174.4 178.7 181.9 149.0 96.2 96.0 96.0 95.3 78.2 82.7 85.9 53.7 Ratio of excess to re quired 103% 100 ” 101 * 47 * 81 » 86 ” 90 * 56 ” Member bank reserves increased $17,900,000 in the four weeks ended March 20 to $613,300,000. This was due primarily to a gain of over $40, 000,000 in transactions with other dis tricts, reflecting chiefly sales of se curities and in some measure the collection of income tax checks re ceived here but payable elsewhere. The principal factor tending to reduce reserves was net Treasury receipts of about $22,000,000. This withdrawal of funds from the local market was the result of income tax payments, Page Six March 20, 1940 Changes in— Four weeks 0.2 0 3.2 203.0 -$ 0.4 Total............................. $206.4 346.1 Member bank deposits. 613.3 U. S. general account. . 66.6 Foreign bank deposits.. 37.6 24.2 903 .9 83.1% -$ 0.5 4* 0.7 4- 17.9 4- 22.3 4- 2.5 — 2.1 4- 43.4 4-0.9% $ Industrial advances.. . . + — 0 0.1 0.2 Reporting member banks (000,000’s omitted) One year -$ 0.1 — 4- o.O 0.3 2.9 -$ 2.7 4- 33.9 4-200.9 - 8.6 4* 14.9 4- 19.2 4-262.9 4-5.6% +2 +1 -1 +0 Total revenue.................. Federal Reserve Bank of Philadelphia (Dollar figures in millions) which were substantially heavier than a year ago. The seasonal increase in demand for currency was small. No significant changes in the bill and security holdings of the Federal Reserve Bank have taken place in the past month. Outstanding industrial advances increased slightly, but bor rowings of member banks were down somewhat. A small sale of govern ments from System holdings was re flected in a minor reduction in the par ticipation of this bank. An expansion of $8,000,000 in loans of the reporting banks to $429,000,000 was due largely to continued demand for credit from commercial and indus trial sources. The volume of commer cial loans increased $11,000,000 from the low at the end of January to $202, 000,000 on March 20, approximately 12 per cent above a year ago and the highest point since the spring of 1938. Holdings of open market paper also were increased somewhat in the past four weeks. Investments, on the other hand, de clined $21,000,000 in this period to $721,000,000, reflecting the sale of $22, 000,000 of United States bonds. Total holdings of direct government issues, reduced by these transactions to $348, 000,000, are $30,000,000 under the record high early in February and are also smaller than a year ago. The investment in guaranteed obligations did not change, and holdings of cor porate and municipal securities were increased slightly. Mar. 20, 1940 Assets Commercial loans................... $ Open market paper................ Loans to brokers, etc............. Other loans to carry secur.. . Loans on real estate............... Loans to banks........................ Other loans............................... Chanj;es in— Four One weeks year* +t 27 + 25 + 31 50 202 4- $21 + 4 42 1 43 93 - 6 2 1 0 0 0 1 Total loans........................... $ 429 + *8 + $29 Government securities.......... $ 348 —$22 0 Obligations fully guaranteed 99 Other securities....................... 274 + i - $14 1 Total investments............. $ 721 0 0 Total loans & investments $1,150 —$13 Reserve with F. R. Bank. . . 448 + n 21 4- l Balances with other banks.. 226 - l 84 — 2 + 18 + —$21 $10 4- $39 Liabilities Demand deposits, adjusted. * 939 -$ 4 263 4- i 0 U. S. Government deposits. . 54 442 — 2 0 16 4215 i o * Adjusted for changes in reporting banks. Deposits at reporting banks show but a small reduction in the past month to $1,698,000,000, owing principally to payments from individual, partnership and corporate balances; deposits to the credit of states and local governments increased. The sharp rise in aggre gate deposits over the past year has heavily increased the volume of funds at the disposal of the reporting banks, but outstanding credit shows only moderate expansion, most of the funds being held on deposit with the Federal Reserve Bank and correspondents. In the last half of January gross de posits averaged $1,620,000,000 at Phil adelphia banks and $1,550,000,000 at country member banks in this District. In comparison with a year earlier in creases of 18 and 6 per cent respec tively have been shown in these figures. The greater expansion, relatively and actually, at banks in Philadelphia, has resulted in large measure from in creased balances held for other do mestic banks. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Changes in weeks ended Feb. 28 Mar. 6 Changes Mar. 13 Mar. 20 weeks* Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict).......... Treasury operations..................................................... -0.5 -1.4 +3.7 -0.9 +1.4 -2.6 + 1.0 +20.5 + 1.5 - 0.6 +21.0 -24.6 - 1.0 +41.5 -22.0 Total............................................................................. +1.8 -2.1 +23.0 - 4.2 +18.5 Uses of funds: Currency demand......................................................... Member bank reserve deposits................................. " Other deposits” at reserve bank........................... Other Federal Reserve accounts............................... -1.2 +3.8 -0.9 +0.1 4-0.8 -3.6 4-0.7 -0.0 + 0.4 +24.1 - 1.5 - 0.0 + + 1.9 6.4 0.4 0.7 + 1.9 +17.9 - 2.1 + 0.8 Total............................................................................. +1.8 -2.1 +23.0 - 4.2 +18.5 * Preliminary. Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT, MILLIONS (All figures are rounded from original data) Manufacturing Indexes TOTAL Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group in dexes are weighted propor tionately .7 REQUIRED; 36 4-0 37 Per cent Per cent Feb. 1940— per cent Feb. change from Feb. change from change from 1940 1940 index Jan. Feb. index Jan. Feb. Jan. Feb. 1940 1939 1940 1939 1940 1939 All manufacturing .... 88 - 1 +10 Iron, steel and prods.. . . 83 - 2 +24 Non-fer. metal prods.. . . 125 + 0 +23 Transportation equip... . 63 - 2 +19 Textiles and clothing.... 93 + 2 - 5 86 - 0 - 8 Textiles........................... Clothing.......................... 123 + 6 + 5 Food products................... 104 + 1 + 4 Stone, clay and glass.. . . 71 - 9 + 8 Lumber products............. 55 - 8 + 7 Chemicals and prods........ 95 +1 +18 Leather and products. . . 93 + 2 - 1 Paper and printing.......... 98 - 0 + 4 Printing........................... 90 + 0 + 2 EXCESS '41 Cigars and tobacco. . . Rubber tires, goods. . . Musical instruments. . DEPOSITS AT MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS * Employehours f Payrolls* 60 83 64 +11 - 1 + 5 Figures from 2,434 plants. 82 - 3 +17 - 5 +34 - 1 +28 - 4 +21 + 4 - 7 + 1 -10 +14 + 7 + 1 + 6 66 -14 + 7 45 -12 + 7 106 + 1 +21 87 - 3 - 7 103 + 1 + 6 96 +1 + 3 101 149 62 84 77 114 108 - 2 + 4 +14 50 82 66 + 8 - 4 +13 - 3 - 5 - 2 — 2 + 1 - 1 + 10 + 1 -12 - 8 + 1 - 2 + 1 +1 + 6 + 9 - 7 - 4 +16 +10 +21 +34 +27 +36 - 8 - 9 - 0 + 5 +12 + 7 +31 -11 + 5 + 2 + 6 - 8 +16 f Figures from 2,190 plants. General Index Numbers Covering twelve branches of trade and industry COUNTRY __ BANKS 1500 Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) Feb. 1940 index General index (weighted)... 1400 110 1300 PHILADELPHIA BANKS 19 3 8 19 3 7 193 9 194 0 Percentage change—February 1940 from February 1939 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... +15 +18 +16 +39 + 9 + 6 + 1 - 7 Allentown............. Altoona.................. Plarrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre........ - 1 - 1 + 0 - 0 + 1 + 1 - 0 - 2 - 2 - 3 Wilmington.......... York....................... - 1 - 8 +12 + 1 + 3 + 8 +14 Wage payments 1-21 -20 -30 -54 - 6 +1 - 2 - 6 +23 +n + 3 +12 +15 Building permits (value) + — 20 48 +1,227 Debits + 3 + 6 + 2 +17 - 0 + 2 ~ 1 - 7 +13 - 8 + 65 + 102 + 127 17 — + 134 + 41 64 — 55 — +21 52 + 11 +17 — February 1940 from January 1940 - 0 - 6 +1 - 2 - 0 - 0 - 4 - 2 - 4 + i + 2 + 0 -11 + — + — + + — — + + 62 31 326 75 275 20 67 47 31 32 10 +1,525 22 137 69 109 40 88 130 97 97 120 104 100 89 Jan. 1940 Feb. 1939 -1 -1 +i +0 + s +10 -2 -6 -2 +2 -3 +i +2 +0 -0 - 2 + 5 -14 + 8 - 1 + 5 - 4 +1 - 5 + 6 - 3 Payrolls Per cent change from Feb. 1940 index Jan. 1940 - 4 - 3 -39 152 200 55 204 51 139 157 107 116 Feb. 1939 + 10 - 1 - 7 -16 + 1 + 1 - 3 + 0 121 - 116 126 99 +17 -29 + 5 -13 + 4 - 4 1 0 1 + 6 +1 + 3 - 6 + 7 - 5 Retail trade sales +16 +11 +11 +24 - 2 +13 +16 + » +15 + 6 +20 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.................. Per cent change from -14 - 9 -13 - 7 -16 -18 -19 - 9 - 8 -19 — 11 -30 -13 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT PAYROLLS +20 - 1 + 6 +17 + 8 +36 - 5 - 1 - 0 - 1 + 0 - 8 - 2 + 7 EMPLOYMENT 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRADE 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 Unadj usted indexes reflect merely the Feb Dec. Jan Feb. actual change which may or may not 1939 1939 1940 1940 be typical. Feb. 1940 from 1940 Feb Dec. Jan Feb. from 1939 1939 1940 1940 2 Month Year ago ago mos. 1939 Retail trade Sales Total of all stores........................... 80 89 85 Department................................. 68 76 72 Men’s apparel............................. 68 84 83 Women’s apparel....................... 95 106 102 Shoe............................................... 91 98 78 Credit............................................ 104r 105 114 80p 70p 72 95 85 100 0 59 52 55 3 4 7 + 146 139 142 68 161 117 61 76r 166 5 3 62 52 76 84 59 65 75 50 + + + + 71 46 89 r 100 61r 74 98 104 - 6 - 3 -14 - 7 + 8 -13 — + + + 0 - 7 4 + 4 + + 4 6 2 102 100 + + 7 3 100 69 61 95 3 5 1 59p 53p 58 68 57 73 Stocks of goods 77 103 75 100 77 51 109 77 52 101 r 68 r 103 103 81p 101 80 104 + o -f-17 + 0 72 47 Rate of stock turnover Monthly turnover on annual + + + + 3.55 2* 8* 3.62 Wholesale trade Sales — 3* + +45* + — 20* — 13* — 2* _ 4* +34* — 6* + + + + + 2* 6* 5* 7* 9* 2* 12* 3* 7* 1* + + 2* + 17* + 20* + 12* Stocks of goods - 4 * + 8* — 11* + 1* — 17* + 13* — 6* + 7* — 8* + 17* +33* + 11* -10* + 11* 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....................... 43 60 r 45 67 74 18 55 17 323 85 59 43 132 107 132 56 32 r 23 Slaughtering, meat packing............. 94 Sugar refining...................................... 61 Canning and preserving................... 54 Cigars.................................................... 103 Paper and wood pulp........................ 71 Printing and publishing................... 89 Shoes...................................................... 132 Leather, goat and kid....................... 89 Explosives............................................. 79 Paints and varnishes......................... 76 Petroleum products........................... 148 Coke, by-product............................... 97 77 81 76 107 95 r 81 68 76 80 116 87 74 102 106 107 25 22 19 81 78 63 36 37 40 411 427 434 82 69 70 68 56 r 54 52 53 47 142 150 132 106 94 92 132 150 141 68 46 46p 53 48r 43 29 28 25 99 101 95 84 112 59 60p 60 60 104 110 98 81 78 r 77 94 90 91 133 148 131 86 95 91p 110 91 99 86 86 85 175 169 175p 145 140 122 * Computed from data unadjusted for seasonal variation. Page Eight + 74 + 36 + 49 + 10 + 38 + 5 + 14 +« + 139 + 2 + 34 + 2 — 17 - 6 -15 -15 -15 - 4 -15 -20 - 2 -11 + 8 - 2 - 7 - 0 -12 -12 + 4* - 5 -47 - 0 -10 - 2 + 2 + 1 - 5 + 9 - 1 + 4 -13 — + + — — — + + + + — + — + + + + + + + + + + + + 4- 89 46 51 20 43 + 10 + 21 +149 + 40 — 15 7 — 6 9 + 14 8 + 3 14 — 11 0 + 5 19 + 12 33 + 35 8 + 9 2* + 1* 1 + 4 3 + 10 10 + 11 4 + 15 9 + 12 2 + 3 0 — 1 2 + 11 25 + 29 11 + 10 19 + 13 26 + 35 45 62r 46 75 71 18 60 17 317 90 60 46 134 111 144 39 31 r 22 76 101 70 111 103 78 93 r 73 92 100 20 19 79 78 68 36 36 40 432 436 425 84 71 74 63 56 56 56 54 50 141 124 145 103 98 96 148 138 144 56 32 32p 52 45 r 41* 29 26 24 88 86 86 96 80 50 107 55 60 75 81 95 125 94 109 84 175 141 111 77 58 90 78 90 134 101 91 77 86 71 89 139 96 79 75 L46 102 p—Preliminary. 78 85 69 83 98 19 L68 140 97 77 56p 83 77 91 139 98p 99 83 174p 128 r—Revised CREDIT STORES
@FedFRASER