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THE BUSINESS REVIE FEDERAL RESERVE RANK APRIL 1, 1942 ^ ■& War demands continue to give strong impetus to general business and industrial activity in the Third Federal Reserve District. New and ex panded plants are pushing operations higher in in dustrial centers. Other factories and shops are turning to an increasing extent from peace to war activity. Employment has expanded to new high levels and payrolls have reached new records. Consumers are buying actively and the stream of funds is augmented by increasing bank loans to industry. Wholesale and retail trade and the movement of freight continue heavy. Shortages are spreading over a wide range of goods, and the pressure of increased incomes upon increasingly limited supplies is forcing prices upward. General industrial production in the District reached a new peak in February. Manufacturing activity increased in both durable and nondurable lines and operations in heavy goods industries are sharply above a year ago. Output of anthracite expanded substantially in the month, and bitumin ous coal production is unusually well sustained. Output of oil and power continues at high levels. Construction awards are increasing and are sub stantially above the early part of 1941. Contracts for residences are confined largely to defense areas, and the total volume of residential building is below last year. Erection of plants continues active. Nonagricultural employment is well sustained at levels considerably above a year ago. In February payrolls increased substantially at factories, mines, and quarries and held fairly steady in other lines. Employment and payrolls in manufacturing plants continue to increase, and earnings of individual workers are rising with higher pay scales and longer hours of work. % ^ Retail trade was fairly well sustained in Feb ruary, following periods of unusually high activity in earlier months. Some anticipatory buying of goods in which shortages are in prospect is still in evidence. Wholesale trade is being stimulated by forward buying in spite of the increasing difficulties of getting delivery within reasonable periods. Freight shipments increased less than usual from January to February but were generally well above a year ago. Prices of staple commodities continue firm and quotations on wholesale and retail goods are ad vancing as low cost inventories are disappearing and are being replaced by higher priced supplies. The cost of living continues the steady increase which has been in evidence over the past year. The principal advances are still in costs of food, cloth ing, and housefurnishings. Bank loans to industry and trade to finance in creased working capital requirements have ex panded further. Purchases of Government bonds to meet the tremendous cost of war continue heavy. Reserves and deposits have decreased somewhat recently, reflecting to some extent payments to the Treasury and expansion in currency demand. Prices of Government bonds have been firm in March after some weakness in the previous month. Corporate bonds have been fairly steady, while stocks have shown some weakness in quiet markets. Expanding purchases by the Government are responsible for continued improve ment in the demand for factory products in this Manufacturing. Page One PRODUCTION AND PRICES FACTORY PAYROLLS PENNSYLVANIA PERCENT PERCENT PRODUCTION CAPITAL GOODS. PHIL*. rEDCRAl RCSEflVC "COST OF LIVING IN PHILADELPHIA CONSUMERS - GOODS. WHOLESALE COMMODITY PRICES US * Adjusfei For seasonal variation 1937 1938 1939 1940 1941 1942 District. Recent increases in sales reflected chiefly heavy commitments for iron and steel and its prod ucts. Contracts may be awarded shortly for sub stantial yardages of cotton and woolen textiles. Inquiries from civilian sources continue numerous, but actual sales remain well below earlier high levels, owing to the large volume of priority orders. Shipments have continued heavy in recent weeks and are sharply larger than at this time last year. Prices of manufactured goods not limited by ceil ings are still advancing. Activity has increased further at many plants operating on defense contracts, and production is well sustained in the case of establishments making essential civilian goods. Continued declines are shown in a growing number of nonessential lines, as supplies of materials are becoming increasingly tight. The volume of unfilled orders remains sub stantially heavier than a year ago in most industries. Inventories of finished goods at reporting plants are still declining and are smaller than at this time last year. Stocks of raw materials generally are above the level of 1941. Employment in Pennsylvania factories in Feb ruary increased 1 per cent to a new peak exceeding 1,150,000 workers, and wage payments rose 4 per cent to a record high estimated at $38,500,000 a week. The number employed and the volume of wage disbursements showed increases over a year ago of 14 and 39 per cent respectively, reflecting chiefly substantial gains in the heavy industries. Preliminary reports indicate that payrolls increased somewhat less than was to be expected in March, following larger than seasonal expansion in other recent months. In durable goods lines employment in February was 23 per cent and wage payments 50 per cent Page Two 1937 1938 1939 1940 1941 1942 above the level of 1941, owing principally to the sharp rise in activity at metal working establish ments. At plants making nondurable goods the number employed was about the same as a year ago but payrolls were 14 per cent larger. Earnings of factory workers in Pennsylvania con tinued to increase in February, averaging 861/2 cents an hour, as against 74% a year earlier. Working time also increased to nearly 42% hours a week from 41% in January, and average weekly income rose to a new high level of $36.28, or about $6.60 more than in February 1941. Manufacturing plants in Delaware reported only fractional increases in employment and wage pay ments from January to February. In southern New Jersey the number employed also increased less than 1 per cent; payrolls rose about 2 per cent. The output of factory products in this District in creased somewhat more than usual from January to February, reflecting gains in both durable and non durable goods industries. Production on a season ally adjusted basis rose 2 per cent to a level 27 per cent above a year ago. In heavy industries the in crease over 1941 was 51 per cent while in the case of lighter products it was only 6 per cent. Production of electric power showed virtually no change in the month but was 14 per cent greater than in February 1941. Total sales and sales to indus tries increased more than seasonally and were re spectively 15 and 24 per cent greater than a year ago. Coal and other fuels. The industrial demand for bituminous coal continues active, and sales of anthracite are well sustained. Consumers of fuels are being urged to accumulate inventories while transportation facilities are available. ACTIVITY IN THE STEEL INDUSTRY TEXTILE ACTIVITY EMPLOYEE-HOURS IN PENNSYLVANIA EMPLOYEE-HOURS IN PENNSYLVANIA PERCENT PERCENT COTTON " GOODS STEEL WORKS AND ROLLING MILLS BLAST FURNACES WOOLENS AND WORSTEDS 1937 1938 1939 940 1941 1937 1938 1939 1940 194 I 1942 Shipments of anthracite since October have aver these lines contracts were about five times as great aged less than in the 1940-41 period, reflecting as in February 1941. Awards for commercial struc chiefly consumer stocking last summer. Produc tures declined substantially from January to Feb tion increased 16 per cent in February, although ruary. a seasonal decline was to be expected, and was the Per cent change largest for the month since 1936. Feb. Operations at bituminous mines in Pennsylvania continue at relatively high levels to meet heavy industrial requirements. Colliery output declined less than usual from January to February. It was the largest for the month since 1937, and in the first two months of the year was the heaviest for any similar period since 1929. The production of by-product coke in January was the largest in records extending back to the early 1920’s. Preliminary reports indicate a further increase in February. Building contracts Philadelphia Federal Reserve District From month ago From year ago 1942 from 2 mos. 1941 $ 4,503 544 3,959 12,386 981 9,301 272 1,832 + 5 - 20 + 9 + 35 - 42 + 48 +777 + 59 - 6 +152 - 14 +203 - 7 +390 - 44 +180 - 12 + 12 - 15 + 53 - 35 +108 - 68 +103 $16,889 9,764 + 25 + 74 + 90 +394 + 26 +196 $26,653 + 40 +145 + 56 --------- - 1942 (000’s omitted) Source: F. W. Dodge Corporation. Difficulties in obtaining materials continue to limit new residential construction. The volume of contracts placed for residences in this District Building. Building operations against existing increased somewhat in February, but continued contracts slackened somewhat further from January smaller than a year ago. They accounted for only to February, but awards for new construction in 19 per cent of total awards in the first two months creased considerably. Publicly-financed projects of 1942 as compared with 34 per cent a year account for an increasing proportion, reflecting earlier. chiefly contracts for building to meet the expanding needs of the war program. Wholesale prices of Trade. High levels of industrial activity and con building materials have advanced substantially dur sumers’ incomes continue to stimulate rail traffic ing the past twelve months to a level 23 per cent and trade, maintaining them at levels considerably above August 1939. above a year ago. Retail sales have been show ing greater margins over 1941 than the probable Contract awards increased sharply to $>26,600,000 in February, and were the largest for the advance in selling prices, although this margin was month since 1929. Increases of 40 per cent over reduced somewhat in the period immediately pre January and 145 per cent over a year ago were ceding the income tax date. Business at wholesale due chiefly to much heavier placements for manu has been generally brisk, limited in some lines by facturing plants and public works and utilities. In difficulties in obtaining goods. The movement of Page Three BUILDING ACTIVITY FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE DISTRICT PER CENT 100 PERCENT PRICES OF BUILDING MATERIALS (i.m.ioo) 7* "A /------- N 80 f 60 40 ALLEGHENY OISTRICT ------------- 1- - - - - - - - - - - - - - J\ MERCHANDISE AND MISCELLANEOUS — \ , 'resident IAL C0NTRA(:ts 0! 23-23.100) 20 0 CONTRACTS A OJ. TOR SEAS VARIATION (j 1937 1938 1939 onths moving »vg 1940 1941 1942 Source ' Conl-icta - W. f. OoiIg* Corp. freight by rail since the first of the year has been the heaviest for this period since 1930. 1937 1938 1939 1940 1942 drugs, virtually no change in groceries, and in creases in other lines, especially jewelry. In com parison with February 1941 the over-all increase in sales was 41 per cent, with gains ranging from well over 100 per cent in paper and 70 per cent in dry goods to a minimum of 4 per cent in the case of electrical supplies. The combined inven tories of reporting wholesalers showed only a small increase in February, and the expansion of 20 per cent over a twelve-month period reflected partly the higher price levels now prevailing. Following exceptionally heavy consumer buying in January, sales by department stores in this Dis trict increased somewhat less than seasonally in February. Gains of about 30 per cent over a year ago were shown both in Philadelphia and out side of the city. Substantial increases over Feb ruary 1941 were reported in cash and charge ac count sales, but the expansion in instalment sales was small. Detailed reports for January showed that increases over last year were considerable in Shipments of freight by rail in this section did virtually all departments, with some of the greatest not expand as much as usual from January to Feb in those handling men’s clothing and other soft ruary, but continued 8 per cent heavier than a year goods lines. ago. Comparisons with early 1941 show gains in all classes of freight but livestock, where volume Sales by shoe stores in February were one-half was about the same, and in ore. The movement again as large as a year earlier. Similar gains of miscellaneous freight, which includes shipments were reported by men’s apparel stores, but the in of heavy manufactures and accounts for one-half crease in the case of women’s apparel and credit of total loadings, was the largest for the month of stores was smaller. February in records reaching back to 1923. Coal Stocks of goods were increased considerably in shipments, the next most important segment of February in all reporting lines, but gains were for freight traffic, increased 5 per cent over a year ago. the most part seasonal. At the month-end, the In the first half of March car loadings averaged value of stocks was more than one-third larger than about the same as in February; both in the District a year ago at department and women’s apparel and in the vicinity of Philadelphia freight ship stores and 57 per cent greater at credit stores. Re ments continued heavier than a year ago. ports from representative department stores show that merchandise commitments were expanded Banking conditions. The demand for commer further in February, with the result that outstand cial credit has been active over the past month, ing orders continue more than twice as large as a raising advances by reporting banks to finance in dustry and trade to a new peak. Substantial pur year ago. chases of government bonds also were made, but The volume of business at wholesale showed the growth in total investments was restricted by mixed changes from January to February, small declines in other securities. Heavy income tax declines being reported in electrical supplies and payments and the demand for currency were rePage Four MEMBER BANK RESERVES REPORTING MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE OISTRICT MILLIONS MILLIONS TOTAL INVESTMENTS IN U S GOV’T OBLIGATIONS (direct and guaranteed) v. EXCESS COMMERCIAL LOANS REQUIRED 1940 fleeted in further reductions in deposits and in reserves. Member bank borrowings from the Re serve Bank continue light; the discount rate of the Bank was reduced from 1^2 Per cent to a new record low of 1 per cent, effective March 21. The reserve balances of all member banks in the District declined $22 million to $622 million in the four weeks ended March 18. A decrease of approximately $100 million has taken place in the past year, but balances at the present time are estimated to be more than 40 per cent above requirements. Analysis of the position of indi vidual banks in the first half of February showed that three-fourths of these institutions had reserves and demand balances with other banks equal to two or more times required reserves. The Treasury has continued to disburse large amounts for war materials, but the full record of its operations for the past month shows that receipts exceeded disbursements by $92 million. Receipts were heavy early in the period, when payments were made on a new bond issue, and again at the close, when income taxes were pouring in. These taxes were paid partly through the tender of tax anticipation notes, but cash payments were much larger than a year ago. A further increase in currency demand also tended to reduce the level of reserves. The funds absorbed by Treasury and currency transactions were offset partly by heavy transfers from other districts. 942 increased $12 million to $307 million in the past four weeks, and have risen 46 per cent since the defense program was started. Recent gains have been partly seasonal in character. Small declines were shown in holdings of open market paper, security loans, and in the miscellaneous group which includes direct personal and instalment loans to individuals. The investment in United States bonds increased $25 million in the month, reflecting in part the allotment of new securities late in February. The expansion in the total investment portfolio, how ever, was limited to $2 million by the redemption of $11 million of Treasury bills, reducing the in vestment in these securities to $8 million, and a decline in holdings of guaranteed securities. The securities portfolio now totals $863 million, show ing an increase of $109 million in the last twelve months. Deposits at the reporting banks have decreased further since mid-February. Lower individual and corporate balances reflected tax payments, currency demand, and payments for Treasury securities. Withdrawals from these balances and from inter bank deposits were partly offset by increased de posits of States and municipalities and by credits to United States Government deposits in connection with security allotments. Aggregate deposits on March 18 were $1,912 million, or about 7 per cent below the all-time high reached last September. Expansion over the level of a year ago has nar Earning assets of the reporting banks have been rowed to $43 million; demand deposits of indi at record high levels in the past month. On March viduals and corporations show a substantial gain 18 loans and investments aggregated $1,427 mil in this period and are being used more actively, lion, showing an increase of $185 million in com but time deposits and interbank balances have parison with a year ago. Commercial loans have declined. Page Five BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Adjusted for seasonal variation Not adjusted Industry, Trade and Service Per cent c iange Indexes; 1923-5 = 100 Feb. Jan. Feb. 1942 1942 1941 Feb 1942 fr om Mo. ago INDUSTRIAL PRODUCTION MANUFACTURING................ Durable goods.......................... Consumers’ goods................. Metal products.......................... Textile products........................ Food products........................... Tobacco and products............ Building materials.................... Leather and products............. Paper and printing.................. Individual lines Pig iron....................................... Steel.............................................. Motor vehicles.......................... Automobile parts and bodies. Silk manufactures.................... Woolens 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............. Paints and varnishes............... Petroleum products................. Coke, by-product..................... COAL MINING.......................... Anthracite.................................. Bituminous................................. CRUDE OIL................................ ELEC. POWER—OUTPUT. . Sales, total................................. Sales to industries.................... BUILDING CONTRACTS TOTAL AWARDSt................... Residential t............................... Nonresidentialf........................ Public works and utilitiesf. . . 1942 from Feb. Jan. Feb. 1942 1942 1941 2 Year mos. 1941 ago 124p 125p 177p 90p 151 71p 90p 138 62 132p 93 120 122 172 87 155 68 90 134 63 119 93 98 98 117 85 121 76 r 81 101 52 112 89 + 3 + 2 + 3 + 3 - 3 + 4 - 1 + 3 - 1 +11 + 1 +26 +27 +51 + 6 +25 - 7 +11 +37 +20 +18 + 6 +26 +28 +52 + 5 +26 - 7 +10 +34 +23 +18 + 6 124p 119 125p 120 99 99 153 iso 76p 70 87p 89 116 111 52 52 141p 124 93 93 123 81 80 85 44 119r 89 108 124 48 117 75 61p 51 64p 84 137 104 72 31 116 130 55 129 68 62 49 64 78 145 102 71 34 92 106 34 100 76 r 67 46 117 87 130 76 67 r 29 94 25 102p 138 90 94 132 132p 100 204p 166p 71 69p 86 455 344 360 286 98 57 100 134 91 93 125 115 104 183 156 60 57 83 474 343 357 275 95 77 72 100 79 90 139 86 r 89 155 141 67 65 83 396 302 312 231 - 7 - 4 -14 - 9 +11 - 2 + 3 1 + 6 — 6 + 2 + 2 -10 + 3* - 4 -56 + 2 + 3 - 2 + 1 + 6 +15 - 4 +11 + 7 +18 +21 + 3 - 4 0 + 1 + 4 +17 +18 +41 +17 — I - 9 +10 -45 - 4 + 5 +37 + 9 + 7 + 9* - 1 -68 +41 +38 +13 + 4 - 5 +54 +12 +32 +17 + 6 + 6 + 4 +15 +14 +15 +24 +23 +19 +57 +22 - 3 - 3 + 2 -42 - 4 + 7 +45 + 8 +11 + 9* + 1 -62 +42 +34 +15 + 4 - 3 +50 +13 +26 +11 0 - 1 + 5 +13 +14 +15 +25 111 131 48 127 80 62p 54 65p 87 149 73 69 30 98 95 32 95p 116 90 94 139 143p 98 202p 174p 78 76p 94 455 365 389 283 95 111 34 108 81r 69 49 119 91 142 53 64 28 91 97 100 67 84 79 90 146 93 r 87 152 149 73 71 90 396 320 337 228 107 50 157 156 96 50 158 121 64 64 84 55 +11 + 1 - 1 +29 +66 -21 +85 +184 +53 106 36 -28 +82 158 +140 188 Unadjusted for seasonal variation. T 3-month moving daily average centered at 3rd month. 113 128 49 128 69 62 50 63 82 r 142 71 66 32 96 107 39 97 110 90 93 127 122 94 182 156 69 66 95 455 364 368 266 107 40 170 155 64 45 85 66 Employment Payrolls Per cent Per cent Feb. change from Feb. change from 1942 1942 index Jan. Feb. index Jan. Feb. 1942 1941 1942 1941 Indexes: 1932 »100 GENERAL INDEX. . Manufacturing...................... Anthracite mining................ Bituminous coal mining .. . Building and construction . Quar. and non-met. mining. Crude petroleum prod......... Public utilities....................... Retail trade............................ Wholesale trade.................... Hotels...................................... Laundries......................... Dyeing and cleaning............ 131 173 65 105 48 114 135 104 109 124 95 114 101 + 9 + 14 - 4 - 4 +14 +15 - 2 + 5 + 4 + i - 7 + 7 + 2 0 +i 0 -1 -2 -1 -3 -1 -2 0 -2 0 0 252 356 86 323 87 309 181 128 147 147 127 160 129 + 4 + 4 +26 + 7 - 2 + 9 + 1 + 1 0 +1 - 1 - 1 - 1 +34 +39 +n +38 +31 +55 + 8 +14 +16 +ii + 3 +17 + 9 Manufacturing Employment* Payrolls* Per cent Per cent Feb. change from Feb. change from 1942 1942 index Jan. Feb. index Jan. Feb. 1942 1941 1942 1941 Indexes: 1923-5 = 100 TOTAL..................................... Iron, steel and products.... Nonferrous metal products. Textiles and clothing.......... 1 ex tiles................................. Clothing................................ Food products....................... Stone, clay and glass........... Lumber products.................. Leather and products......... Paper and printing.............. Printing................................. 112 120 185 92 83 126 111 98 62 98 105 93 Cigars and tobacco............ Rubber tires, goods........... Musical instruments......... 73 89 71 +i +14 +1 +20 -1 +21 +2 - 3 +1 - 5 +3 + 2 -1 + 6 0 +13 + 2 +3 + 4 0 + 7 0 + 4 145 205 296 105 96 150 131 120 68 120 127 109 + 4 + 4 0 + 7 + 6 +10 0 + 4 + 3 + 7 + 2 + 4 +1 -1 +2 72 125 87 + 1 +25 + 1 +14 + 5 + 2 + 11 - 2 - 2 +39 +45 +43 +11 +10 +16 +17 +28 +21 +19 +18 +n * Figures from 2,864 plants. p—Preliminary. r—Revised. * Hours and Wages Local Business Conditions* Percentage change— February 1942 from month and year ago Allentown........ Altoona............ Harrisburg... . Johnstown.... Lancaster......... Philadelphia... Reading........... Scranton........... Trenton............ Wilkes-Barre.. Williamsport. . Wilmington. . . York.................. Employment Payrolls Jan. 1942 Feb. 1941 Jan. 1942 +2 +2 0 0 +1 +2 +1 +2 -3 +1 0 0 +1 +n +21 +13 +12 +11 +21 + 6 + 9 - 2 +22 +13 +23 + 7 +5 +9 +5 +4 +4 +5 +4 +6 -1 +4 +2 0 +1 Feb. 1941 Building permits value Jan. 1942 +39 - 17 +43 +1203 +34 - 46 +30 + 59 +33 + 3 +52 + 7 +27 - 85 +19 + 210 +22 0 +73 - 74 +45 + 3 +49 4 +35 + 549 Retail sales Page Six -------------------n i .. Deblta Feb. 1941 Jan. 1942 Feb. 1941 Jan. 1942 + 44 +663 - 29 - 76 + 32 + 76 - 75 + 8 - 81 - 71 + 31 + 76 - 5 + 3 + 3 - 3 +24 -14 - 1 - 1 - 9 + 1 - 6 +30 +16 +26 +20 +42 +31 +32 +17 +25 +30 - 3 - 1 +33 +29 -12 -10 - 9 -12 - 2 -12 -13 - 7 -15 -16 -12 -18 -16 * Area not restricted to the corporate limits of cities given here. Factory worker* Feb. 1941 --------+19 + 8 +25 +18 +42 +19 + 4 +23 +36 +13 +22 +14 +20 Averages reDruary and per cent change from year ago Weekly working time* Hourly earnings* Weekly earningst Aver Aver Ch’ge Aver Ch’ge age Ch'ge age hours age TOTAL.............................. 42.3 Iron, steel and prod____ 43.4 Nonfer. metal prod.. . . 41.9 Textiles and clothing. . 38.2 Textiles.......................... 38.6 Clothing......................... 37.0 Food products.............. 40.5 Stone, clay and glass.. 38.3 Lumber products.......... 40.0 Leather and products. 39.9 Paper and printing.... 41.0 Printing......................... 38.3 Others: Cigars and tobacco.. . 37.5 Rubber tires, goods.. 39.8 Musical instruments. 44.5 * Figures from 2,641 plants. +5 $.865 +5 .949 +5 .776 +4 .607 +5 .624 +1 .562 +4 .666 +2 .794 +6 .600 0 .620 +5 .772 +4 .919 +4 +4 -1 .483 .779 .723 +16 $36.28 +15 41.20 +15 32.54 +12 22.96 +14 23.96 + 7 20.86 + 8 27.37 +10 30.40 + 5 23.70 +11 24.45 + 5 32.46 - 2 36.13 +22 +21 +20 +15 +19 + 8 + 12 +13 +11 +11 +10 + 2 + 7 18.07 +11 + 6 31.03 +11 + 5 32.16 + 4 t Figures from 2.864 plants. Distribution and Prices Feb.1942 from Month Year ago ago Sales Total of all lines.................... Boots and shoes.................. Drugs..................................... Dry goods............................. Electrical supplies.............. Groceries............................... Hardware............................. Jewelry.................................. Paper..................................... Inventories p . + + + - 4 9 1 4 4 0 + 4 +36 +19 + 41 + 38 + 17 + 70 + 4 + 25 + 52 + 23 +132 + + + — + + + + + + + + + + 3 2 3 1 5 3 1 4 Not adjusted Adjusted for seasonal variation Per cent change Wholesale trade Unadjusted for seasonal variation Per cent change 1942 from 2 mos. 1941 Indexes: 1935-1939 = 100 + 39 + Si + 12 + 71 + 6 + 28 + 50 + 13 +105 20 4 30 5 30 16 6 29 Feb. 1942 fro m Month Year ago ago 1942 from 2 mos. 1941 +37 +37 +27 +49 +50 +24 Feb. Jan. Feb. 1942 1942 1941 RETAIL TRADE Sales Department stores—District.......................... Philadelphia................. Women’s apparel................................................ Men’s apparel..................................................... Shoe....................................................................... Credit.................................................................... 116p 116 97 130 118p 117p 115 115r 111 170 119 98 135p 128 134 115p 179p 115 97 93 110 113r 100 99 r 90 156 114 +10 +13 + 8 + 4 - 7 + 8 +10 +17 0 135 138 107 137 63 192 105 115 93 134 138 103 132 66 196 106 122 103 123 123 98 131 69 183 96 96 93 + 13 +56 123 186 109 + 3* + 3* + 6* + 7* + 5* 116p 114 + 7* 132p 128 109 122 -16* - 5* + 4 -48* -79* +23 -41* 69 -69* 23 +19 147 157p 155 135 164 176p 152p 161 158 128 186 156 158 121 r 119r 107 111 114 125 r - 3 - 2 + 5 -12 +12 - 4 +29 +30 +26 +47 +54 +22 ] 37p 130 137 124p 178p 132 124 130r 100 164 113r + 4 + 6 +23 + 8 +38 +37 +34 +17 +57 FREIGHT-CAR LOADINGS Total....................................................................... Merchandise and miscellaneous..................... Merchandise—l.c.l............................................. Coal........................................................................ Ore.......................................................................... Coke....................................................................... Forest products................................................... Grain and products............................................ Livestock.............................................................. 149 151 109 126 262 175 106 110 97 158 162 113 124 316 190 116 130 99 137 135 100 120 289 166 97 93 97 - 6 - 7 - 4 + 2 -17 - 8 - 9 -15 - 1 + 8 + 12 + 9 + 5 - 9 + 5 +10 +19 0 MISCELLANEOUS Life insurance sales.............................................. Hotels—(1934 = 100) 107 209 95 -49 Inventories Feb. Jan. Feb. 1942 1942 1941 90 89 77 88 77 r 96r Source: U. S. Department of Commerce. Prices Basic commodities (Auk. 1939-100).. Wholesale (1926 = 100).......................... Farm.......................... Food.......................... Other......................... Living costs (1935— 1939 = 100) United States.......... Philadelphia............ Food........................ Clothing................. Rent........................ Fuels........................ Housefurnishings . Other...................... Per cent change from Feb. 1942 Month Year Aug. 1939 ago ago 165 +i +36 +65 97 101 95 95 +i 0 +i 0 +20 +44 +29 +12 +29 +66 +41 +18 113 in 114 115 106 103 118 108 +1 0 +1 +1 0 0 +1 0 +12 +12 +21 +15 + 2 + 4 + 16 + 7 +14 +13 +23 + 16 + 3 + 7 +18 + 8 Business liquidations Check payments................................................. 146 * Computed from unadjusted data. Source: U. S. Bureau of Labor Statistics. 140 r 118 p—Preliminary. 82 133 24 112 142r 120 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (000,000’s omitted) Assets Commercial loans................. $ Open market paper.............. Loans id brokers, etc........... Other loans to carry secur.. Other loans............................. Mar. 18, 1942 Changes in— Changes in weeks ended Four weeks One year 307 41 26 32 49 +$12 - 1 0 - 1 +$ 58 + 6 + 2 + 2 109 - + 1 Philadelphia Federal Reserve District (Millions of dollars) Sources of funds: 8 Uses of funds: Total loans........................... $ 564 +$ 9 +$ 76 Government securities........ $ Obligations fully guar’teed Other securities..................... 505 92 266 +$14 - 11 - 1 +$118 + 2 - 11 Total investments.............. $ 863 +$ 2 +$109 Total loans & investments $1,427 Reserve with F. R. Bank . . Cash in vault......................... Balances with other banks. Other assets—net................. 431 26 190 69 +$11 +$185 - 16 0 - 6 0 - 116 + 3 - 19 - 12 Liabilities Demand deposits, adjusted $1,253 —$20 +$135 186 - 3 - 73 Time deposits........................ U. S. Government deposits 40 + 19 + 30 Interbank deposits............... 433 - 9 - 49 0 0 Borrowings............................. 0 3 Other liabilities..................... 14 + 2 Capital account.................... 217 0 + i Member bank reserves Daily averages: (dollar figures in millions) Held Re quired Ex cess Ratio of excess to re quired Phila. banks 1941: Mar. 1-15.. $525.3 $237.2 $288.1 121% 1942: Feb. 1-15.. 443.1 297.8 145.3 49 ” Feb. 16-28. . 417.7 295.2 122.5 42 » Mar. 1-15. . 422.6 Country banks: 1941: Mar. 1-15.. 1942: Feb. 1-15.. Feb. 16-28. . Mar. 1-15.. 192.2 103.0 212.9 142.7 210.8 143.4 211.5 89.2 70.2 67.4 87 " 49 ” 47 ' Feb. 25 March 4 March 11 March 18 Changes in four weeks + 3.5 + 14.0 -69.9 - 5.1 +32.4 +19.6 - 0.5 + 9.2 + 2.9 - 6.0 +29.0 -44.8 - 8.1 +84.6 -92.2 -52.4 +46.9 +11.6 -21.8 -15.7 + 6.9 -57.2 - 2.1 + 0.0 + 3.6 +44.0 - 0.5 - 0.2 + 1.5 + 10.5 - 0.4 + 0.0 - 1.1 -19.5 - 2.0 + 0.8 +10.9 -22.2 - 5.0 + 0.6 -52.4 +46.9 +11.6 -21.8 -15.7 Federal Reserve Bank of Phila. (dollar figures in millions) March 18, 1942 Changes in— Four weeks One year Bills discounted.......... $ 0.6 Bills bought................. 0 Industrial advances. . 4.0 U. S. securities............ 177.6 -$0.1 0 + 0.6 - 0.1 + $0.4 0 + 1.8 + 2.7 Total.......................... Note circulation......... Member bank deposits U. S. general account. Foreign deposits......... Other deposits............. Total reserves............. Reserve ratio............... +$0.4 +10.1 -22.2 -21.4 +10.9 - 5.0 -19.2 + 0.4% + $4.9 +184.2 - 99.3 - 71.3 - 5.7 - 10.7 - 2.4 0 $182.2 605.6 622.5 0.2 70.3 13.1 1160.0 88.4% Page Seven National Summary of Business Conditions INDUSTRIAL Industrial activity increased further in February and the first half of March. Retail trade was sustained at high levels and commodity prices continued to advance. PRODUCTION Production Federal Reserve monthly index of physical volume of production, adjusted for seasonal variation, 1935-39 average = 100. Subgroups shown are expressed in terms of points in the total index. Latest figures shown are for February 1942. WHOLESALE PRICES J w~ J L/ »■ ALL COMMODITY ■A r»*M products J •---------1937 I933 Bureau of Labor Statistics’ weekly indexes, 1926 average = 100. Latest figures shown are for week ending March 21, 1942. MEMBER BANKS IN I0I LEADING CITIES In February the Board’s seasonally adjusted index of industrial production rose from 171 to 173 per cent of the 1935-39 average. As in other recent months, activity in the durable goods manufacturing industries, where the majority of military products are made, continued to advance, while in industries making nondurable goods and at mines activity was maintained at about the levels reached last autumn. Steel production rose to 96 per cent of capacity in February and increased further to 98 per cent in the third week of March—which corresponded to an annual rate of nearly 87 million net tons. Lumber production also increased, following less than the usual seasonal decline during the previous two months. In the machinery and transportation equipment industries, now engaged mainly in armament production, activity continued to advance rapidly as plant utilization increased and capacity expanded. Conversion to armament production in the automobile industry, where output of civilian products was discontinued in early February, is apparently being effected much more rapidly than had been anticipated earlier. There were further increases in output at cotton textile mills and at chemical factories, reflecting an increasing amount of work on military orders. At meatpacking establish ments activity was maintained near the high rate reached in January. Shoe production increased by less than the usual seasonal amount. Anthracite production rose sharply in February and bituminous coal production was maintained near the high rate of other recent months. Output of crude petroleum, which had been at record levels in December and January, declined somewhat in the latter part of February and in the first half of March, reflecting transportation difficulties. Construction Value of construction contract awards increased considerably in February, according to figures of the F. W. Dodge Corporation, owing mainly to a sharp rise in awards for public projects. Total awards in February were half again as large as last year, and public awards were about three times as large. In nonresidential building, awards for public projects increased materially, while those for private projects continued to decline. There was a slight rise in awards for public utility construction. In residential building, contracts for private work changed little from January, while those for publicly-financed projects increased sharply and amounted to about half of the total for the first time on record. For the past six months there has been a noticeable shift in privately-financed housing activity from building for owner-occupancy to building for sale or rent; in February, awards for the former constituted only about one-fifth of the small-homes total. This shift is attributable mainly to the activity in defense areas and to legislation enacted last spring making possible the insurance of mortgages taken out by builders. Distribution L> S. OOVT OBLIGATIONS J count RCUU. LOANS r Wednesday figures. Commercial loans, which include industrial and agricultural loans, rep resent prior to May 19, 1937 so-called “Other loans” as then reported. Latest figures shown are for March 11, 1942. MEMBER BANK RESERVES AND RELATED ITEMS Value of retail trade continued large in February. Sales at general merchandise stores and variety stores increased more than seasonally, while sales at department stores declined. In the first half of March department store sales increased by about the usual seasonal amount. Freight-car loadings, which in January had been unusually large for this time of year, declined somewhat in February owing to smaller shipments of coal, grain, and miscellaneous freight. Commodity Prices Wholesale prices continued to advance from the middle of February to the middle of March, particularly those for finished consumer goods such as meats, fruits and vege tables, shoes, clothing, and household items. Temporary maximum price orders were issued covering wholesale prices of some of these products, including pork, canned fruits and vegetables, finished cotton and rayon fabrics, cotton rugs, and bedding equipment. These orders, according to statute, used as maximums the prices prevailing within five days prior to issuance. They are effective for only 60 days and may be replaced by regular schedules. Treasury Financing and Bank Credit In March income tax receipts by the Treasury for the first time reflected the higher schedule of rates. The effect of these receipts on the money market was largely offset by redemption of Treasury bills previously issued to mature during the tax collection period, by tax-anticipation notes turned in on payment of taxes, and by continued heavy Treasury expenditures. As a consequence a record volume of Treasury operations was effected with little influence on conditions in the market. Excess reserves of member banks showed no large change and on March 18 amounted to about $3.2 billion. United States Government obligations held by member banks in leading cities showed little change during the first three weeks of March following a sharp rise in February. Commercial loans increased further. United States Government Security Prices Wednesday figures. Latest figures shown are for March 11, 1942. Page Eight Prices of United States Government bonds advanced steadily from the middle of February to the middle of March. Long-term taxable bonds yielded 2.35 per cent com pared with an average of 2.39 per cent in February. Prices of short-term securities have held steady since the first of the year, with Treasury bills selling at around .20 per cent.
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