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BUSINESS REVIEW L.IBR. APR 15 1946 '■aim FEDERAL RESERVE BANK OF PHILADELPHIA APRIL 1, 1946 Toward Economic Balance * * There is substantial basis for the impression that monetary conversion to war is easier than physical conversion but that monetary recon version to peace is more difficult than physical reconversion. The primary reason is that mone tary machinery performs a much larger part of the total economic job in time of peace than in time of war. Moreover, money created to finance the war remains at its close to exert its full and permeating effects, while the change over of physical plant has a relatively clear-cut beginning and end. In time of peace money is assigned the pri mary role in the distribution of goods and serv ices. Individuals and institutions may spend their money and their money income as they wish. Each dollar spent on a particular good or service is in effect a vote for the use of re sources in the production of that good or service. The distribution of total expenditures directs the use of all resources. In time of war, however, it is universally recognized that the Govern ment must direct the use of all human and phys ical resources if the war is to be prosecuted most effectively. Several important changes are made in the monetary machinery to assure this result. In the first place, the Government at war is given control over the use of all resources through such direct means as selective service, priorities, rationing, and controls over wages and prices. In this way an important function performed indirectly by money in time of peace is per formed directly by the Government in time of war. Direct control over distribution applies not only to that portion of output that is consumed by the Government but to the remainder that is consumed or invested by individuals as well. In general, this distribution is based on equality and need, and not, as in peace, on ability to pay. In the second place, the Government is as sured that all the funds it needs will be made available to it. Individuals may disagree as to how much can or should be raised in one way or another, but no responsible persons would have the Government forced to make decisions on the basis of monetary—as opposed to real— costs. For example, a decision to experiment with subatomic energy is and should be made to turn on availability of human and material resources and the likelihood of developing an atomic bomb in time rather than on the dollar cost. Speed, too, becomes more important than monetary cost. Page 39 The over-all magnitudes from January 1941, shortly after the start of the defense program, to the end of 1945 are shown in the following table: Amount (Billion $) Per cent 378 100 150 134 72 22 40 35 19 6 ^Includes $24 billion increase in Treasury balance. Three-fourths of the Government’s fiscal needs was met by taxation and borrowing involv ing the transfer of existing means of payment from the public to the Government. To this extent the increase in Governmental spending was offset by a roughly corresponding decrease in private spending. This 75 per cent consisted of two parts: 40 per cent was met on a pay-asyou-go basis and the other 35 per cent was borrowed from others than banks. The amount raised through taxes for the most part was trans ferred to the Government permanently and is evidenced now only in receipts held by the tax payers. The amount that was raised by bor rowing, however, was transferred only for specified periods. Large amounts have been loaned to the Government subject to redemption at the option of the holder, and comprise part of the liquid assets now held by the public. The final one-fourth of the Government’s fiscal needs was borrowed from the banking sys tem. Such borrowing did not result in a trans fer of existing money to the Government but in the creation of new money. These newly cre ated means of payment were not destroyed with the ammunition they purchased; they have re mained as a financial aftermath of the war. The flow of spendable income—received from the Government as well as business—was much greater than the flow at current prices of goods and services becoming available for civilians. The inflationary pressures arising from the in crease in monetary incomes relative to available civilian supplies were reflected in increases in prices until they were brought under effective control in 1942. The relative stability in prices since that time has been the result of price, wage, and other direct controls, not of any reduction in infla tionary pressures. At the end of last year the total means of payment was 285 per cent of the volume in 1939 whereas the rate of industrial Page 40 output was only 150 per cent of the rate in 1939 and even the maximum rate achieved during the war was 227 per cent. The economy is faced with many bare shelves that cannot be filled immediately, and with both a high level of current income and unprecedented holdings of liquid assets, which can be spent immediately. It should not be surprising that relegation of monetary cost to a secondary role during a long and costly war should create difficulties for the reconversion of the monetary system to peace. It is extremely difficult to develop a policy and program that will minimize the frictions incident to re-establishment of money in its full and use ful role in the economy. An attempt to do so overnight could easily result in disaster. There are many important segments in the battle line against inflation. There is no single easy solution. An important sector is the supply of money. Reasonable price stability cannot be maintained in the long run unless the supply of money is brought under effective control. A great expansion took place during the war be cause one-fourth of the total cost was met through sales of Government securities to the banking system. A number of methods are avail able to control such monetization of debt. One method is to keep Governmental expenditures to a minimum. Another is to secure as much as possible through taxation and to use fiscal surpluses to reduce the amount of Government securities held by banks rather than those held by others. Yet another is to sell as many Gov ernment securities as possible to nonbank in vestors so that bank holdings may be corre spondingly reduced. The present program to push sales of savings bonds to individuals is designed to achieve this purpose. A related segment of the front against infla tion is the disposition that the public makes of its large holdings of liquid assets. The real value of these assets can be conserved only if the pub lic holds on to them. If the public uses both its large income and its accumulated savings to bid for scarce goods, it will end merely by dissipat ing the real value of its savings in price in creases. An important influence on spending by business and the public is the degree of con fidence in the relative stability of prices. Obviously the real standard of living depends on the physical volume of goods and services. Rising standards can be achieved only through increased production. Increased production, however, is not, of course, a panacea for infla tion; it cannot do the job alone. If additional production is secured only with corresponding expansion in the money supply, it does not re store equilibrium between money and goods. The production of goods and services implies the production of income adequate to purchase the output. The importance of increasing pro duction is rather that it would help to restore a more stable relationship between the volume of money and the volume of production. Whether a given volume of money is inflationary or not depends largely on the existing level of prices and the volume of physical production. Production can play its greatest role in com bating inflation when part of the income re ceived for producing is saved and invested in Government securities. On the other hand, drawing on earlier savings to spend more than current income is highly inflationary. The present is a particularly critical period for a number of reasons. The public is anxious to secure goods. It has the money with which to buy but reconversion of production and dis tribution has not gone far enough to provide an adequate supply of goods. Furthermore, the public receives income during the whole period in which goods are being produced and dis tributed but the goods become available only at the end of the process. This characteristic of the production and distribution process is par ticularly important when the volume of output is rising rapidly. Another transitory element is that in many areas short supplies cannot be distributed most equitably through competitive bidding in a free market. For example, in the face of a critical housing shortage it is not wise public policy simply to permit scarce building materials to go to the highest bidder. It is obvious to every one that the relative importance of homes for veterans and of race tracks is not measured by the ability of prospective owners to pay. A prime objective of policy should be free and open markets but the war has created a tem porary problem that cannot be solved with equity and less friction through immediate establishment of such markets. Eager desire to secure goods quickly backed by accumulated liquid savings and high current income would force prices to higher and higher levels. Rising prices in turn would stimulate demand as the public would attempt to buy before prices rose still further. These very attempts, however, would force prices still higher. Rising prices would also result in demands for higher wages. For a temporary period priorities, allocations, and rationing of scarce articles are a lesser evil than inflation despite the serious objection to these methods in principle and inevitable shortcomings in their administration. These methods necessarily imply price control. Since the flow of goods will not, of course, be in creased unless production is profitable, costs must be controlled as well as prices. Price and wage controls are necessary weapons in the cur rent fight against inflation. On March 26, 1946, Mr. Bernard M. Baruch testified before the Banking and Currency Com mittee of the House of Representatives as to the complexity of the problem that now con fronts the country. After indicating that what was applicable when he had testified in 1941 was still applicable, he said: I have advocated for wartime an over-all price control, including wages, adjusting in justices or hardships where they exist. Price control by itself will not be effective. It must go hand in hand with a sharply defined tax program; the siphoning off of excess savings and earnings by selling Government bonds to individuals instead of banks; by controlling all loans; by not favoring any one segment of society over another; by priority, licensing and allocation to the greatest needs, and above all, by increasing production. A condition of economic stability is that pro duction be in balance with aggregate demand at current prices. At present demand far exceeds supply. It is desirable that a new equilibrium be established at as near current prices as pos sible by controlling demand while giving pro duction time to expand. Direct controls can fa cilitate the transition to the new equilibrium by preventing chaotic markets from destroying faith in the efficacy of free markets to distribute goods and services equitably in a real peacetime economy. Page 41 Wartime Developments in the Anthracite Industry The anthracite industry made a substantial contribution to the heavy wartime demands for fuel. Owing to the large military demands for fuel oil and the great industrial needs for bitu minous coal and metallurgical coke, many household furnaces had to be converted to an thracite during the emergency. Anthracite pro duction was increased each year between 1989 and 1944 in spite of a constantly diminishing labor supply and difficulties in obtaining equip ment and supplies. Anthracite deposits underlie significant por tions of ten counties in eastern Pennsylvania but 97 per cent of the output comes from Carbon, Lackawanna, Luzerne, Northumberland, and Schuylkill counties. In these five counties an thracite mining is the predominant economic activity. The five counties comprise only 8 per cent of the Third District’s land area but they had 15 per cent of its population in 1940, and they account for about 60 per cent of the dollar value of the mineral output of this district. In 1940 over one million people lived in the anthracite region and their livelihood was de pendent in large measure upon the prosperity of the hard coal industry. Anthracite mining em ployed 28 per cent of the working population, I I CULM BANK K//J STRIP-PIT manufacturing employed 19 per cent, and agri culture only 3 per cent. Trade, transportation, and other service industries are largely depend ent upon mining. The manufacturing is not highly diversified but is confined largely to tex tile and clothing establishments that have been attracted to the region by availability of female labor. These two industries employed almost 60 per cent of the manufacturing wage earners in 1940. Since apparel and textiles and particularly silk and rayon manufacturing occupied such a prominent place in the pre-war industrial struc ture, the region was not able to participate very extensively in the war manufacturing program. Silk was a war casualty and clothing received only a moderate wartime stimulus. The anthra cite region received only 2.3 per cent of the war supply contracts and 3.4 per cent of the facilities contracts awarded to this Federal Reserve Dis trict. Anthracite Production Between the First and Second World Wars anthracite production declined from a peak of 100 million tons to a level of about 50 million tons annually. This was a period of painful read justment caused primarily by the rise of other heating fuels, particularly oil, by-product coke, and bituminous coal. Fuel oil afforded the con sumer greater convenience, coke has a lower ash content than anthracite, and bituminous coal is lower priced. Domestic consumption of all three was stimulated also by aggressive mer chandising. During the recent war, shortages of other fuels, expanded purchasing power of domestic consumers, and the high rate of industrial con sumption created a greater demand for anthra cite. Gross output, including coal dredged from rivers flowing out of the anthracite region, rose from 51 million tons in 1940 to a peak of 64 million tons in 1944. Total output receded to 56 million tons in 1945 when the labor shortage became acute and production was temporarily interrupted by a strike. 1942 Page 42 1943 Greater wartime output was attained in part by pronounced changes in the type of opera- < tions. Although conventional deep-pit mines in creased their output in 1941 and 1942 they de clined subsequently. Most of the increased pro duction, as shown in the chart, was acounted for by strip-pit and culm bank operations. In strip ping, which now accounts for 20 per cent of the fresh-mined coal, giant mechanical shovels scoop off the overburden, and the coal is then quar ried. Modern walking-type machines, equipped with a bucket capacity of 25 cubic yards, cost a half million dollars, but productivity is much higher than in underground mining. The largest strip-pit operations are carried on in the Lehigh and Schuylkill regions—the southern part of the anthracite area—where thick bed outcrops jus tify the large investment in this specialized equipment. * Culm bank coal also contributed a steadily rising proportion of the total wartime output. This coal, consisting of the small sizes formerly discarded, is obtained by reworking the piles of culm. The growing use of stokers has increased the marketability of this fine-sized anthracite. However, this source of anthracite is being de pleted rapidly and it is doubtful whether pro duction can be maintained for more than a few years. ^ * Labor , t Throughout the war the anthracite industry was handicapped by a decline in the labor sup ply. In 1940 about 91,000 workers were engaged in mining and by 1945 the number of employees had declined to 76,000. Declining employment had accompanied the falling trend in produc tion for more than two decades prior to the war, but during the war the downward trend in em ployment was accelerated by the draft and op portunities for more remunerative jobs in nearby war manufacturing centers. Increased output of anthracite in the face of a diminishing labor supply was obtained in part by expansion of working time. In 1940 the in dustry averaged only 187 working days but this was stepped up to successively higher levels throughout most of the war period. In 1944 the industry operated 292 days, including some Sun day work, which was exceeded only by the rec ord 293 days in ^918. Total man-days worked rose from 17 million in 1940 to almost 23 million in 1944. However, output fell off in 1945 when both employment and man days of operation declined as shown in the accompanying chart. EMPLOYMENT AND MAN-DAYS IN ANTHRACITE PRODUCTION EMPLOYMENT’ 1944 Greater wartime output of anthracite was attained not only by increasing the working time but also by further development in mechaniza tion. The industry extended its strip-pit opera tions, as already mentioned, and underground operations were mechanized by the substitution of mechanical loading for hand loading. Be tween 1940 and 1944 tonnage loaded by ma chines was increased from 12 to 15 million and hand loading declined from 29 to 27 million tons. The greatest development in mechanical loading took place in the Wyoming region, that is, in the Scranton and Wilkes-Barre area, where the flatter coal beds are more adaptable to cur rent machine loading methods. Earnings of anthracite miners have increased very substantially during the war as a result of higher wage rates, longer working hours per week, and extra compensation for overtime. Weekly earnings rose from an average of $28.63 in 1940 to $64.92 in 1945. The wartime pros perity of the anthracite region is reflected in department store sales. Dollar volume of de partment store sales at Wilkes-Barre is esti mated to have risen from $7% million in 1940 to almost $16 million in 1945. Prices The pressure of rising costs of mining and preparing coal for the market caused anthracite prices to rise considerably above pre-war levels. Page 43 Since labor constitutes about 70 per cent of the total costs of production, operators asked for higher prices to compensate for the rising wage scales. For all sizes of anthracite the average sales realization per ton on breaker shipments rose from $4.27 in 1940 to $5.91 in 1944, an in crease of close to 40 per cent. Percentage wise, there was practically no difference in war time price increases between the larger domestic sizes of anthracite used almost exclusively for domestic heating and the smaller steam sizes used for both heating and industrial purposes. Retail prices of anthracite rose from an aver age of $11.41 per ton in 1940 to $14.43 in 1945, an increase of approximately 25 per cent. Prices of competitive fuels rose also; bituminous prices increased almost as much as anthracite, and fuel oil prices were much higher because of the acute wartime scarcity. Of course, during the war years salability did not depend upon competi tion ; all fuels were scarce and would have sold in larger quantities if more could have been produced. Markets Anthracite has been used principally to heat homes because it is a clean, slow-burning, smokeless fuel. About 75 per cent of the annual output is used for domestic heating; manufac turing industries, railroads, electric power utili ties, and anthracite collieries consume most of the remainder. For most industrial purposes, anthracite cannot compete with bituminous coal, which is much more plentiful, easier to mine, and considerably lower in cost. No great change occurred during the war in the market distribution of anthracite. In 1944, as before the war, the Middle Atlantic states— New York, Pennsylvania, and New Jersey— took three-quarters of the total shipments; the New England states consumed 10 per cent and exports, chiefly to Canada, accounted for 7 per cent. Exports to Canada were higher than before the war because of the fuel shortage during the war period. High costs of transportation make it difficult to extend the market for anthracite beyond its present bounds. The Outlook The position of the anthracite industry in relation to other competitive fuels depends very Page 44 largely upon developments in the way of re duced costs of mining, new uses for anthracite, and the perfection of low-cost automatic burn ing equipment. Although domestic consumers are probably less sensitive to price than indus trial consumers, the market could no doubt be expanded if prices were reduced. The price paid for anthracite comprises roy alties, labor, taxes, transportation charges, pumping costs, materials and supplies. Rela tively high over-all mining costs reflect in part a low rate of productivity. In recent years an thracite production per man-day has increased materially but it is still only about 3 tons com pared with 5 tons in bituminous mining. Con tinued growth in the practice of strip-pit opera tions offers one of the best means of reducing unit operating costs. In the light of our present knowledge, oppor tunities for the development of new uses for anthracite seem rather limited. Among pros pective new uses one hears such suggestions as synthetic textiles, plastics, carbon black, activ ated charcoal, filtering materials, and liquid motor fuels made by the process of hydrogena tion. Prospective tonnage of anthracite in most of these chemical processes would be relatively small and technology has not been developed far enough for practical utilization. Revival of the use of anthracite in blast furnaces and foundry cupolas, which has also been suggested, seems remote. Automatic equipment to improve efficiency and convenience in burning anthracite for do mestic heating seems to offer attractive possi bilities. Approximately 100,000 mechanical stokers have been installed in anthracite-fired houses. Just before the war, installations were being made at the rate of 12,000 to 17,000 annually. During the war, production of this equipment practically ceased but it is now being resumed. A comparatively new development recently announced by the Anthracite Industries labora tory is a very small tubular furnace capable of heating an eight- or ten-room house with greater coal burning efficiency than conventional fur naces. This so-called “heat-jeep” designed by combustion engineers for a syndicate of thirty leading coal companies is an attempt to expand the outlet for anthracite in domestic heating, which is still the largest market. BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Not adjusted Adjusted for seasonal variation Indexes: 1923-5 = 100 Per cent change Feb. 1946 1946 from from 2 Mo. Year rnos. 1945 ago ago Feb. Jan. Feb. 1946 1946 1945 108 109 129 95 126 63 230 120 138 47 148 79 114 137r 142 215r 91 r 172 r 63r 526 117 112 37 178 88 96 -14 -15 -32 + 2 -57 + 3 -10 - 1 - 4 - 3 + 2 + 2 + 4 _ 32 — 35 _ 59 + 4 69 + 3 — 61 + 2 + 19 + 25 — 16 — 9 + 22 — 27 — 29 — 50 + 3 49 0 — 59 + 1 + 26 + 24 — 15 — 13 + 20 90 95r 85 92 202 55 105 r 68r 103r 127 r 76 202 283 61 123 100 77 81 64p 65r 46 46 64p 63 66 70 131 133 75p 72 57r 50 25 26 r Slaughtering, meat packing. 117 iii Sugar refining.......................... 61 81 Canning and preserving.... 162 162 Cigars.................................. 134 139 Paper and wood pulp............ 94 94 Printing and publishing........ 123 118 Shoes.......................................... 104p 106 Leather, goat and kid........... 57p 52 Explosives................................. 71 72 Paints and varnishes.......... . 90 107 r Petroleum products............... 216 197 r Coke, by-product................... 144p 155 COAL MINING..................... 74 78 Anthracite................. 76 72 Bituminous........................... 92 87 CRUDE OIL........... 301 316 ELECTRIC POWER............ 394 405 Sales, total................................ 410 415 Sales to industries.................. 295 297 HUILDING CONTRACTS TOTAL AWARDSf................. 63T 68 Residential f..................... -44? 48 Nonresidentialf..................... lilt 116 Public works and utilities, t 33 50 81 60r 41 57 r 65 129 29 51 33 -50 -60 -12 -61 -59 -36 -35 -57 + 2 + 5 0 - 1 + 1 + 6 - 2 + 5 -12 - 3 — 2* + 6 -25 0 - 4 + i + 4 - 2 + 8 0 -16 +10 - 7 + 5 + 6 + 5 - 5 — — — — — — — — _ 56 70 2 82 70 42 45 71 63 0 + 6 + 11 + 13 + 7 + 2 +161 — 3 — 23 _ 4* + 32 — 28 — 1 + 21 + 12 + 24 — 12 — 4 — 68 — 7 — 2 — 9 + 8 + 9 + 7 — — — — — — — — _ — + + + + INDUSTRIALPRODUCTION MANUFACTURING.............. Metal products........................ Textile products...................... Transportation equipment.. Food products......................... Tobacco and products.......... Building materials................. Chemicals and products.... Leather and products........... Paper and printing................ Individual lines Pig iron..................................... Steel............................................ Iron castings............................ Steel castings........................... Electrical apparatus.............. Motor vehicles...................... . Automobile parts and bodies Locomotives and cars........... 93p 93p 87p 95p 54 64p 207p 119p 133 45 150p 80p 118 46 38 75 36 84 35 68 29 Silk manufactures.................. Woolen and worsteds............ Cotton products..................... Carpets and rugs.................... Hosiery...................................... Underwear................................ Cement...................................... Brick.......................................... Lumber and products........... Employment Feb. Jan. Feb. 1946 1946 1945 93p 106 92p 106 137r 141 r 54 68p 205 116p 112 38 149 85p 118 121 64 231 118 114 39 144 81 113 174 67 r 522 114 94 33 17 8r 93 96 47 40 76 40 80 36 73 30 88 93r 77 97 190 48 103 66 r 106 r 134 r 78 226 272 61 133 101 86 66 49 65 73 143 53 48 24 122 116 79 151p 112 94 123 109 61 71 88 213 152 79 r 65 47 61 69 131 50 53 r 24r 125 119 56 156 114 93 118 108 56 72 96 r 195r 155 79 86 62 r 44 58 r 68 140 20 49 32 128 87 109 151 93 84 99 124 64r 224 94 217 167 75 72 73r 3 4 7 — 6 8 — 7 301 417 304 429 313 448 - 7 + 89 +122 5 - 9 +742 +726 - 5 + 60 + 88 T 63 W 31 75 33 89 84 164r 111 84 99 118 59 224 96 220 159 72 70 86r 313 422 - 3 — 445 - 1 368 - 1 — — 20 33 50 1 70 50 34 32 53 63 2 5 10 10 4 2 +134 + 4 23 _ 4* + 23 — 35 0 + 28 + 11 + 22 — 14 — 13 — 67 — 2 — 2 — 8 + 13 + 13 + 9 33 69 28 -34 + 17 * Unadjusted for seasonal variation. t 3-month moving daily average centered at 3rd month. 76 100 443 292 — 18 112 39 + 52 99 427 288 70 93 r 480 364 39 126 64 Allentown........... Altoona................ Fac tory Employment Fac tory Payrolls Jan. 1946 Feb. 1945 Jan. 1946 - 7 +1 - 4 -13 0 -13 - 5 +1 -26 - 3 -18 -11 -16 -30 - 9 -19 -13 - 2 -10 -21 0 -16 0 + 7 Feb. 1945 + + + - Feb. 1945 40 - 31 65 +174 58 Johnstown.......... 5 - 76 Lancaster............ 79 + 66 Philadelphia___ 39 - 65 Reading............... 24 +835 Scranton.............. 0 +527 — 45 +479 Wilkes-Barre___ - 5 -30 - 2 -41 - 21 Williamsport___ -14 -15 -24 -34 - 52 +195 Wilmington........ - 9 -43 - 9 -49 + 8 +706 York..................... -10 -14 -34 +191 -19 * Area not restricted to the corporate limits of cities given here. -50 -10 —40 -52 -17 -42 -15 -22 Payrolls Per cent Per cent Feb. change from Feb. change from 1946 1946 index Jan. Feb. index Jan. Feb. 1946 1945 1946 1945 GENERAL INDEX............ Manufacturing...................... Bituminous coal mining___ Building and construction.. Quar. and nonmet. mining.. Crude petroleum prod......... Public utilities..................... Retail trade............................ Wholesale trade..................... Hotels...................................... Laundries................................ Dyeing and cleaning............ 110 130 77 54 74 138 105 129 117 113 102 99 -11 -14 -16 -27 0 + 7 - 6 +34 - 6 - 1 0 + 9 0 — 9 - 1 +n + 2 +13 + 1 +13 + 2 + 6 + 1 + 6 235 289 386 117 223 266 168 195 180 222 199 198 -16 -22 + 7 -13 - 4 + 6 + 1 - 1 + 4 + 3 - 1 - 5 -27 -40 +16 + 16 - 3 + 6 -12 -24 +19 +27 + 16 +26 Manufacturing Payrolls* Employment* Per cent Per cent Feb. change from Feb. change from 1946 1946 index Jan. Feb. index Jan. Feb. 1946 1945 1946 1945 Indexes: 1923-5=100 Total........................................... Iron, steel and products. . . Nonferrous metal products. Transportation equipment. Textiles and clothing.......... Textiles................................. Clothing................................ Food products....................... Stone, clay and glass.......... Lumber products.................. Chemicals and products.. . Leather and products......... Paper and printing.............. Printing................................. Others: Cigars and tobacco............ Rubber tires, goods............. Musical instruments........... 84 59 173 91 80 75 97 120 92 50 109 82 117 114 -16 -42 - 4 -14 + 3 + 4 + 3 - 1 +16 + 2 - 2 + 2 + 2 + 2 -27 -52 -20 -40 + 3 + 5 - 4 - 5 +15 - 2 - 6 +15 +18 +21 118 94 356 133 137 130 169 192 144 77 189 141 198 186 -22 -48 —20 + 7 + 7 + 7 - 2 +20 + 1 - 3 + 4 + 6 —65 -27 -52 +10 +13 - 1 0 +16 -13 -11 +17 +29 +36 47 134 108 + 1 + 2 - 2 - 1 - 9 +16 72 319 168 - 2 + 8 - 3 - 2 - 4 +24 — 5 + 2 -40 * Figures from 2770 plants. 4 70 Hours and Wages p—Preliminary, r—Revised. Buil drag per mits va ue Jan. 1946 Indexes: 1932=100 33 Factory workers Averages February, 1946 and per cent change from year ago Local Business Conditions* Percentage change— February 1946 from month and year ago Industry, Trade and Service Re tail sa es De fits Jan. 1946 Feb. 1945 Jan. 1946 Feb. 1945 +12 - 2 + 1 +18 +17 + 8 + 9 +18 +39 +12 +12 +20 +15 +23 +20 +16 +24 +24 +29 +26 + 8 +23 +19 +20 +12 +26 +48 +23 +11 +14 + 7 + 8 +26 +29 +14 + 4 - 2 +14 — 3 -13 - 5 -15 - 7 - 5 + 8 -18 - 3 -38 -12 TOTAL............................. Iron, steel and prods... Nonfer. 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........................ Others: Cigars and tobacco.... Rubber tires, goods. . Musical instruments.. Wee kly worl dng tin e* Hou rly earni ngs* Weel dy earnin gat Aver age Ch’ge Aver Ch'ge Aver Ch’ge hours age age 38.4 -15 $1.019 - 6 $39.13 34.8 -25 39.4 -16 39.2 -15 39.5 - 3 40.6 - 2 36.5 - 5 42.7 - 1 38.9 - 5 41.4 - 8 40.9 -11 41.1 - 4 44.3 0 42.5 + 2 37.4 45.7 43.4 * Figures from 2625 plants. -13 + 2 + 4 -19 - 2 + 2 -11 + 9 +10 + 8 + 5 + 6 - 1 + 9 + 6 + 10 +11 38.88 41.23 44.21 34.45 36.17 30.47 36.86 38.44 32.70 47.22 34.09 45.40 51.31 -27 -14 -25 + 6 + 7 + 2 + 4 + 1 - 9 - 3 +1 + 9 +13 .733 +13 1.156 + 8 .936 + 3 27.43 52.81 40.57 - 1 + 10 + 7 1.116 1.045 1.129 .874 .890 .830 .853 .989 .799 1.157 .827 1.022 1.208 t Figures from 2770 plants. Page 45 Distribution and Prices Per cent change Wholesale trade Unadjusted for seasonal variation Sales Total of all lines..................... Drugs....................................... Dry goods............................... Groceries................................. Hardware................................ Jewelry.................................... Paper........................................ Adjusted for seasonal variation Feb. 1946 from 1946 from 2 Month Year mos. 1945 ago ago +1 - 5 -14 - 9 - 8 +44 +33 + 7 H22 -73 bio -23 -15 H23 -67 b 8 0 9 1 2 3 +21 +56 4-28 0 +21 Inventories Groceries................................. Paper........................................ + — — + Basic commodities (Aug. 1939=100).... Wholesale (1926=100)................. Farm............................. Food............................. Other............................ Living costs (1935-1939=100) United States............. Philadelphia................ Food........................... Clothing..................... Fuels........................... Housefurnishings. . . Other.......................... Per cent change from Feb. 1946 Month Year Aug. 1939 ago ago 188 0 108 131 108 101 129 128 138 149 115 148 121 + 3 + 88 +1 +1 0 0 + + + + + 44 +114 + 60 + 26 0 0 - 1 0 0 0 0 + 2 + 1 2 3 3 2 + 3 + 4 0 + + + + + + + 31 31 48 51 19 48 20 Source: U. S. Bureau of Labor Statistics. Feb.1946 from Feb. Jan. Feb. 1946 1946 1945 Month Year ago ago RETAIL TRADE Sales Department stores—District......... Philadelphia, Women’s apparel............................... Men’s apparel.................................... Shoe....................................................... Furniture............................................. 22 Ip 198 298 188 240 Inventories Department stores—District......... Philadelphia Women’s apparel............................... Shoe....................................................... Furniture............................................. Source: U. S. Department of Commerce. Prices Indexes: 1935-1939=100 +18 +15 +17 +23 +27 +48 +10 Not adjusted Per cent ch ange 188 175r 232 172 169 149p 149 137 145r 132 150 207 193 192 59 64 64 FREIGHT-CAR LOADINGS Total.................................................. Merchandise and miscellaneous, Merchandise—l.c.l........................ Coal................................................... Ore..................................................... Coke.................................................. Forest products............................. Grain and products...................... Livestock......................................... MISCELLANEOUS Life insurance sales.. Business liquidations Number...................... Amount of liabilities Check payments........ 121 112 90 138 87 110 104 155 134 137 139 87 125 166 190 102 139 150 204 175 206 + 8 + 4 +46 +21 +26 + 8* +18 +13 +28 + 9 +42 +65* 0 3 7 8 8* + 8 +14 + 8 - 8 +15* + + + 113 96 90 153 50 97 101 160 126 211 * Computed from unadjusted data. 206 190 204 156 191 Feb. Jan. Feb. 1946 1946 1945 +17 +14 +23 +14 +33 175p 161 215 147 175 158 150 177 163 149 149 142 r 167 135 123 144p 129 133 145 129 r 128 202 169 188 61 56 66 104 88 85 159 19 104 82 141 115 115 104 85 154 33 126 85 151 136 126 126 +23 -70 -49 - 1 +15 -16 -13 -24 + 5 +21 -53 -41 - 6 +22 -17 +70 +59 224 166 —67* +100* +167* 3 -82* * +163* 2 + 2 + 9 '+ 6 205 9 11 204 132 i 0 189 - 7 -14 0 +n -43 -12 - 3 + 3 - 6 -18 -30 122 +19 195 p—Preliminary. 1946 from 2 mos. 1945 82 130 63 203 83 123 136 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (Millions $) Mar. 20, 1946 Changes in— Four weeks One year Assets Commercial loans................... $ 276 Loans to brokers, etc............. 40 Other loans to carry secur... 69 Loans on real estate.............. 36 1 146 +$22 + 2 - 11 + 2 +$ 59 + 4 + 55 + 2 + l + 37 Total loans............................. $ 568 +$15 +$158 Government securities.......... $1991 —$81 Other securities....................... - 3 +$154 - 54 + 32 Total investments................ $2195 — $84 +$132 Total loans & investments. $2763 Reserve with F.R. Bank___ 426 32 Balances with other banks.. 83 Other assets—net................... 43 —$69 + 6 +$290 3 + - + - 204 Liabilities Demand deposits, adjusted.. $1804 Time deposits.......................... 229 U. S. Government deposits.. 649 Interbank deposits................. 381 Borrowings............................... 7 21 256 t- Page 46 4 4 +$30 + 2 - 85 - 2 - 8 7 4 -$ 39 + 32 + 252 + 20 + 7 + 3 + 15 Changes in weeks ended— Changes in four weeks Third Federal Reserve District (Millions of dollars) Feb. 27 Mar. 6 Sources of funds: Reserve Bank credit extended in district............................ Commercial transfers (chiefly interdistrict)....................... Treasury operations................................................................... -25 +18 +12 - 9 - 1 +16 -24 + 8 +17 -15 +44 -22 -73 +69 +23 + 5 + 6 + 1 + 7 +19 + + + + + + - 0 8 2 0 - 1 + 3 - 1 + o + + + 3 8 1 1 - 3 +20 + 1 + 1 + 6 +1 + 7 +19 Mar. 13 Mar. 20 Uses of funds: Member bank reserve deposits............................................... “Other deposits” at Reserve Bank....................................... O ther Federal Reserve accounts............................................ Total............................................................................................. Member bank reserves (Daily averages; dollar figures in millions) Held Re quired Ex cess Phila. banks 1945: Mar. 1-15.. 1946: Feb. 1-15.. Feb. 16-28.. Mar. 1-15.. $398 415 406 408 $391 408 399 400 $ 7 7 7 8 Country banks 1945: Mar. 1-15.. 1946: Feb. 1-15.. Feb. 16-28.. Mar. 1-15.. $309 370 364 370 $257 298 299 301 $52 72 65 69 Ratio of excess to re quired 1 1 3 0 + 5 Federal Reserve Bank of Phila. (Dollar figures in millions) Disc, and advances.. Industrial loans........ 2% U. S. securities.......... 2 Total......................... 2 Fed. Res. notes......... 2 Member bk. deposits U. S. general account 20% Foreign deposits... . Other deposits.......... 24 Gold certificate res.. 22 Reserve ratio............. 23 Changes in— Mar. 20, 1946 $ 12 1 1611 $1624 1605 785 53 59 4 877 35.0% Four weeks One year -$ 8 - 0 - 4 +$ H 2 + 302 —$12 - 10 + 20 - 29 - 5 + i - 3 +0.2% +$311 + 136 + 49 + 52 - 45 0 - 109 - 7.6%
@FedFRASER