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k IA JL <*J- THE BUSINESS REVIEW FEDERAL RESERVE BANK '•1 o _ OF PHILADELPHIA a ‘ APRIL 2, 1945 Economic conditions on the home front do not yet reflect the increasingly favorable devel opments on the battle fronts which suggest that the conflict in Europe may be near the decisive stage, and that hostilities in the Pacific are pro ceeding well ahead of the original military time table. On the contrary, there are many indica tions of some further tightening in the civilian economy in the months immediately ahead. Thus, manpower controls are being extended in certain critical labor areas, and allocations of war metals to civilian claimant agencies have been reduced sharply for the second quarter. As for some time past, the domestic business situation is dominated by pressure to meet the higher munitions goals set for this year. With emphasis centering on the task of producing the equipment and supplies to finish the war in Europe and at the same time meet the require ments of stepped-up operations in the Pacific, the probable size of the cutbacks which will fol low the defeat of Germany must remain a mat ter of secondary consideration. Reconversion planning by the War Production Board, while reportedly making steady progress, continues to receive a minimum of publicity. Actual out put of civilian goods under the Spot Authoriza tion Plan will be held to insignificant levels dur ing the second quarter by manpower and mate rial shortages, and by the dearth of productive facilities likely to become available in that period. Estimates of the nation’s over-all supply of workers in February indicated that the civilian labor force rose above the wartime low of the preceding month and was several hundred thou s‘ r 7^ ?"0 -W sand larger than a year earlier. The manpower situation in war plants in the country as a whole also is said to have improved somewhat since the turn of the year. But acute worker shortages continue in certain industrial areas, where their very persistence emphasizes critical local situ ations. In Philadelphia, an emergency measure, known as the War Service Transfer Plan, was inaugurated in mid-March to shift workers from less essential industries to top priority war plants located within the city and in several nearby counties. The Plan is implemented through the lowering of employment ceilings and the volun tary release of workers by employers in selected lines. Transfers are being effected on an indus try-wide basis, and ultimately may include man ufacturers, distributors, and the services. Sweeping, and in some cases drastic reduc tions in second quarter allocations of steel, cop per, aluminum, and other war metals to civilian claimant agencies were announced by the War Production Board in the early part of March. Subsequently, a directive was issued which can celled deferred allotments of all forms of steel made under the Spot Authorization Plan. The tonnages so affected were those previously au thorized, but undelivered by the end of the first quarter. Some reductions in quarterly allocations were widely anticipated after directives regu lating end uses of various metals were succes sively reinstated as prospective shortages devel oped. The cancellation of deferred allotments under spot procedure stemmed directly from the heavy loss of steel production occasioned by ex ceptionally severe winter weather in the first six weeks this year. (Continued on page 9) Page One Ownership of Demand Deposits* in the Third Federal Reserve District The latest survey of demand deposits in the Third Federal Reserve District indicates a con tinuation of certain broad trends in ownership which were evident in earlier surveys. Personal deposits continue to grow more rapidly than business deposits and hence to increase grad ually in importance when deposit ownership is expressed in a percentage pattern. Of the business balances, those of trade enterprises exhibit the most consistent increase in relative importance, those of public utilities the most consistent decline. Yet these changes in ownership have not been sufficiently large to alter fundamentally the broad pattern which has prevailed for the past year. Reports from 300 banking institutions in the district classifying some 64,000 deposit accounts as of January 31, 1945, reveal that about one-third of all demand deposits of in dividuals, partnerships, and corporations are in personal accounts, including those of farmers. Nonfinancial businesses own around one-half, and financial businesses slightly more than 7 per cent. Changes in Ownership In the eleven months from February, 1944, to January, 1945, more than two-fifths of the expansion of demand deposits accrued to indi viduals and almost one-half to businesses. Yet, relatively speaking, personal balances grew at a rate more than half again as rapid as business deposits. It was this divergence in rate of growth which made for the increasing impor tance of personal accounts. Apparently indi viduals still are accumulating liquid bank bal ances, in addition to their holdings of currency, despite opportunities for further profitable in vestment in war bonds. of the Sixth Drive. Customers’ balances were at relatively low levels on the first two dates because the Government had not yet disbursed any substantial part of the funds obtained dur ing the drive periods. On the last date, how ever, two factors account for a higher volume of customers’ balances: first, such deposits de clined relatively less during the Sixth Drive than they had in the two previous drives; and second, more time had elapsed in which those accounts could recover from the decline during the drive. It seems likely, therefore, that the timing of the surveys in relation to War Loan Drives was of greater significance in the diverse rates of growth shown in Table I than the fact that changes in one instance covered a five-month period and in the other a six-month period. Although it is clear that this explains to a large extent the much greater increase in total demand deposits from July, 1944, to January, 1945 (12 per cent), than from February to July, 1944 (2 per cent), it is less apparent exactly what effects the timing of the surveys relative to War Loans has upon the ownership of deposits. It seems plausible, however, that because individuals’ purchases of Government securities are made in large amounts by payroll deduction, personal balances are less affected by War Loan Drives than are business accounts. OWNERSHIP OF DEMAND DEPOSITS BILLIONS $ THIRD FEDERAL RESERVE DISTRICT The most obvious factors affecting the de posit changes shown in Table I are the War Loan Drives. The February and July surveys in 1944 fell about half a month after the close of drives; the latest survey on January 31, 1945, occurred a month and one-half after the close * Throughout this analysis the terms “demand deposits”, or merely “deposits”, refer to demand deposits of individ uals, partnerships, and corporations. Page Two JULY SI, 1944 JAN. SI 1945 BILLIONS ) Table I OWNERSHIP OF DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS Third Federal Reserve District Millions of dollars Feb. 29,1944 Domestic business: Nonfinancial: Manufacturing and mining......................... Public utilities................................................. Trade................................................................. Other nonfin. business.................................. July 31, 1944 Per Cent Change Distribution Jan. 31,1945 Feb. 29,1944 July 31,1944 Jan. 31, 1945 Feb. 29, 1944 July 31, 1944 to to July 31, 1944 Jan. 31, 1945 $ 823 224 376 140 $ 851 209 392 146 $ 929 188 463 157 26.8% 7.3 12.3 4.6 27.2% 6.7 12.5 4.7 26.5% 5.4 13.2 4.5 + + + 3.4% 6.7 4.3 4.3 + 9.2% -10.0 +18.1 + 7.5 Total nonfinancial..................................... Financial business: Insurance companies..................................... Other financial................................................ $1,563 $1,598 $1,737 51.0% 51.1% 49.6% + 2.2% + 8.7% 69 156 82 141 77 178 2.2 5.1 2.6 4.5 2.2 5.1 +18.8 - 9.6 - 6.1 +26.2 Total domestic business........................................ Trust funds...... ........................................................ Nonprofit associations........................................... Personal, incl. farmers........................................... Foreign....................................................................... $1,788 191 98 987 2 $1,821 202 87 1,017 2 $1,992 223 114 1,172 2 58.3% 6.2 3.2 32.2 * 58.2% 6.5 2.8 32.5 ♦ 56.9% 6.4 3.2 33.5 * + 1.8% + 5.8 -11.2 + 3.0 + 9.4% +10.4 +31.0 +15.2 Grand total.............................................. $3,066 $3,129 $3,503 100.0% 100.0% 100.0% + 2.1% +12.0% * Less than 0.1 of one per cent. Another factor which should be taken into account in explaining the divergent changes was the payment of income taxes in January. This presumably would alfect personal bank bal ances less than business accounts, inasmuch as a large amount of individuals’ taxes had already been deducted from payrolls. Trust funds, particularly those of large size and in large banks, continue to increase despite the fact that such accounts are customarily drawn upon heavily for investment in Govern ment securities during drives. Deposits of non profit associations, although relatively small in size, exhibited the most rapid increase of any type of account between July and January. Presumably the building up of community chests and the like during the fall and winter was chiefly responsible. In direct contrast with the experience over most of the war period, demand deposits at Third District banks grew at a somewhat faster pace (12.0 per cent) than at all banks in the United States (10.7 per cent) during the sixmonth period from July, 1944, to January, 1945. In all major classifications of owner ship, deposits of Third District banks rose at rates almost equal to or slightly higher than those for the country as a whole. The relative increase shown by personal accounts was little less than in the national figures, while business balances, both nonfinancial and financial, in creased somewhat more rapidly in this district. Deposits of manufacturing and mining con cerns, the most important single business classi fication, exhibited much greater relative growth here than in the rest of the country. It is difficult to draw concrete conclusions from these comparisons because of the numer ous variables such as War Loans which must be taken into account. It is possible, how ever, that this most recent survey may provide the first indications that deposits in this district are beginning to regain some part of their po sition relative to the country as a whole which they have lost during the war period. Size of Bank and Size of Account It is doubtful whether any major change in the ownership pattern by size of bank can be anticipated. It would seem natural for manu facturing and mining, public utilities, insurance, and trust funds to remain important at large banks, and for trade and personal balances to be most important at small banks. But from July to January there was a noticeable change in the rate of deposit growth by size of bank. Whereas formerly demand deposits at small banks tended to grow at a faster pace, in the recent period there was no noticeable correla tion between rate of growth and size of bank. The largest banks (those with demand deposits over $100 million) held their own, increasing almost as fast as the smallest banks (those with demand deposits below $1 million). Nor was there any noticeable tendency for personal bal ances at small banks, or small personal accounts in general, to increase faster than those at large Page Three Table II OWNERSHIP OF DEMAND DEPOSITS OF INDIVIDUALS, PARTNERSHIPS, AND CORPORATIONS BY SIZE OF BANK Third Federal Reserve District Banks with deposits — Over $100 million $10 to $100 million $1 to $10 million Under $1 million July31,1944 Jan. 31, 1945 July 31,1944 Jan. 31,1945 July 31,1944 Jan. 31,1945 July 31,1944 Jan. 31,1945 Domestic business: Nonfinancial: Manufacturing and mining......................... Public utilities................................................. Trade................................................................. Other nonfinancial business........................ $ 443 139 96 46 * 486 121 119 55 *197 38 92 39 $207 31 107 37 *178 26 150 48 $ 201 29 176 54 * 33 6 54 12 * 35 8 61 11 Total nonfinancial..................................... Financial business; Insurance companies..................................... Other financial................................................ 1 724 $ 781 *366 *382 *402 * 460 *105 *115 51 58 48 76 25 46 21 60 5 33 6 37 1 5 1 5 Total domestic business........................................ Trust funds............................................................... Nonprofit associations........................................... Personal, incl. farmers.......................................... Foreign...................................................................... $ 833 114 25 256 1 $ 905 136 31 298 1 $437 53 25 210 1 *463 51 31 241 1 *440 32 27 375 $ 503 32 39 434 $111 4 10 175 $121 4 14 199 Grand total.................................................. $1,229 *1,371 *726 *786 *874 $1,008 *300 *338 banks or of large size. Balances of various sizes owned by manufacturing and mining concerns exhibited mixed changes from which no general conclusion may be drawn. On the other hand, there was a marked tendency for the larger trade accounts to increase more rapidly than the smaller balances. Corporate and Noncorporate indicates that unincorporated concerns, typically small, have improved their financial position during the period more than corporations. An analysis of the wartime earnings of small busi ness by the Board of Governors of the Federal Reserve System substantiates this conclusion. The relatively faster growth of noncorporate balances may indicate that small businesses will be better able to meet the difficulties of the post-war period than is commonly supposed. The survey of July, 1944, gave for the first time a breakdown of business accounts by cor The periodic surveys of deposit ownership porate and noncorporate concerns. That survey showed that almost three-fourths of all business have brought to light certain trends in the deposits were held by incorporated enterprises various types of deposits about which little and that only in trade and miscellaneous non- knowledge had previously existed. Although financial business accounts was there a larger these trends probably will continue as long as proportion of unincorporated than incorporated our present war economy prevails, it will be business deposits. This general picture also pre important to continue periodic surveys so that vailed in January, 1945, but between the two changes in trends, whether in magnitude or surveys deposits of unincorporated businesses direction, may be observed promptly when they experienced decidedly greater relative growth do occur. Such changes would seem to be than those of incorporated businesses. Total inevitable as we approach the end of the war deposits of unincorporated businesses increased or during the period of readjustment which 18 per cent between July and January, and bal will follow. For individual bankers this infor ances of corporations increased only 6 per cent. mation may be used as an aid to effective asset If rapid accumulation of bank balances is any in policy with an aim to full performance of their dication of financial well-being, this situation function as commercial banks. Page Four The Cigar and Tobacco Industry Ever since the Colonial period, tobacco has occupied an important place in our economy. In 1939 consumers spent $1,800 million for to bacco products. Manufacturers converted about $400 million of raw tobacco into $1,300 million of products on which about $600 mil lion was paid to the Federal Government in taxes. The relative importance of the leading branches of the industry is shown in the table. Cigarette production accounted for an over whelming portion of the total value of output; in 1939 output was in excess of one billion dol lars. From the standpoint of employment the manufacture of cigars is more important; this branch of the industry employs almost twice as many workers as the cigarette division. Chew ing tobacco, smoking tobacco, and snuff are the principal products of the third and least important branch of the industry. TOBACCO INDUSTRY OF THE UNITED STATES IN 1939 Number'of establishments 1 Average Number of wage earners As a result of the rapid mechanization of the industry, manufacturing costs were reduced quite substantially so that the cigar which re tailed at five cents before the war constituted a steadily rising portion of the total output. In 1926 the five-cent cigar accounted for 45 per cent of the total number of cigars produced and by 1939 it accounted for over 90 per cent. The extent to which the low-priced cigar displaced high-priced products during the two decades preceding the present war is indicated in Chart II. Less than one-fifth of the cigars were hand made, and they were about equally divided be tween high-priced quality cigars and cigars re tailed at five cents or less. CHART 1 PER CAPITA CONSUMPTION OF TOBACCO PRODUCTS POUNDS UNITEO STATES 601--------------- ----------------------------------------OTHER TOBACCO PRODUCTS Value of Product incl. federal tax (Millions $) 27,000 51,000 Economic Characteristics $1,038 161 Cigarettes.................... Cigars........................... Chewing and smoking tobacco and snuff. . P35 598 132 9,000 124 Total.................... 765 87,000 $1,323 The Cigar Industry Cigar manufacturing has gone through two major stages of development—the handmade and the machine-made stages. Prior to 1919 most cigars were made by hand in compara tively small factories widely distributed through out the country. Efforts were made as early as 1898 by the American Tobacco Company to mechanize cigar manufacture, but it was not until 1919 that a machine was developed to do the job successfully. Most cigars are now ma chine-made, and it was the mechanization of the process which brought vast changes in the industry. To this basic development may be ascribed the appearance of large factories, multi-plant companies, greater concentration of the industry in metropolitan areas, and the revival of the five-cent cigar. Production and consumption of cigars attained a peak in 1920; since then the decline has been fairly steady, as Chart I shows. CIGARS CIGARETTES 1907 '09 Tl T3 '15 17 19 ‘21 '23 '25 '27 '29 '31 '33 ’35 ’37 '39 '41 43 matra, but we also get some from Cuba and Java. Domestic wrapper is produced in the Connecticut Valley. Ordinarily, the cigar man ufacturers carry large raw material inventories. From one crop year to another, leaf tobacco varies considerably both in quality and in price. By following the practice of carrying large in ventories the manufacturer can average down his raw material costs and can exert consider able control over the quality of the tobacco by proper aging. CHART n OUTPUT OF CIGARS BY RETAIL PRICE CLASSES MILLIONS Of CIGARS 8.000 |------ ysr 7.000 ■■ UNITED STATES —/ 6.000 ------5.000 ----------4.000 -\------------ 5 CENTS AND LESS 2,000 LI T6 IS CENTS As a result of the mechanization of this in dustry, labor is a comparatively small part of manufacturing costs—about 20 per cent of total value including taxes. Mechanization has also increased the employment opportunities for female workers; about 80 per cent of the work ers in the industry are women. 5.1 TO 8 CENTS For many years cigars have been subject to Federal taxation. Federal excise taxes at pres ent range from $2.50 per thousand for the low est-priced cigars to $20 per thousand for the highest-priced cigars. Consumption of cigars does not appear to have decreased as a result of the taxes which consumers have to pay be cause the tax adds very little to the cost. 15.1 CENTS AND OVER 1918 '20 '22 '24 '26 '28 '30 '32 '34 '36 '38 40 42 44 ♦ * IMCHJDC5 6.1 TO ■ CCHT3 — 1943 AND 1944 Mechanization of the industry is likewise responsible for the growth of large establish ments and the consolidation of numerous fac tories into multi-plant companies. In 1939 over 50 per cent of the establishments produced be tween $5,000 and $20,000 of products but estab lishments in this class employed only 3 per cent of the workers in the industry. On the other hand, establishments turning out products in excess of one million dollars employed about 65 per cent of the workers in the industry. The two leading companies accounted for 25 per cent of the total output. Raw materials, which account for about 50 per cent of the value of products, are of both domestic and foreign origin. Manufacturers obtain filler tobacco in Pennsylvania and they also import it from Cuba and Puerto Rico. The choice wrapper tobacco is imported from Su Page Six Competition in this industry is particularly keen, primarily because of the shift to other forms of tobacco. The growing popularity of cigarettes has had an adverse effect upon cigar consumption. Manufacturers compete with each other by producing a variety of brands in the various price classes and their promo tional efforts are directed mainly toward the popularization of their low-priced lines. The large manufacturers have some advantage over their smaller competitors because well-adver tised brands move into consumption more rapid ly than the products of many small producers. This assures freshness of product, a matter of considerable importance to the discriminating buyer. Cigar Manufacturing During the War Since the outbreak of the war, demand for cigars has increased owing very largely to the higher incomes. Although tax-paid withdrawals rose 20 per cent between 1939 and 1942, they fell off 30 per cent in 1944, due largely to in creased tax-free sales to the armed forces. Wartime shortages of both labor and materials prevented manufacturers from meeting the in creased demands for their products. Many of the pre-war cigar factory workers were attracted The years from 1913 to the present marked to higher paying jobs in war industries. Manu a second era of expansion in cigarette produc facturers were confronted with not only a ser tion characterized not only by further mechan ious labor shortage but also with higher labor ization but also by emphasis on the production costs arising from high wartime labor turnover. of one leading brand by each of the major manu Raw material scarcities developed shortly after facturers. In 1913 the R. J. Reynolds Com the outbreak of the war when this industry was pany introduced “Camels” and concentrated cut off from its foreign supplies of tobacco, promotional efforts on that one brand. The particularly East Indian wrapper tobacco. De other major companies were quick to follow the ficiencies of these tobaccos were made up par example. The American Tobacco Company tially by increased imports from Cuba and brought out the “Lucky Strike” and Liggett and Puerto Rico and greater reliance upon domes Meyers introduced the “Chesterfield.” Each of tic varieties. Nevertheless, the industry was the “big three” made a standardized pack of unable to meet the demand for its products and twenty cigarettes consisting of blended tobacco it had to ration cigars to distributors for civilian and promoted by extensive advertising. Since consumption. that time cigarette smoking has gained increas Greater spending power accounted not only ing popularity and production has attained for an increase in demand but also a change in higher levels each succeeding year with almost its characteristics, as shown in Chart II. Con no interruptions. sumption of higher-priced brands increased and that of low-priced cigars decreased. In 1944, Economic Characteristics higher-priced cigars constituted over 50 per The cigarette industry is characterized by cent of total output. This shift also reflected large-scale production. In 1939 the entire out the discontinuance by many manufacturers of put was produced by 35 establishments. The their five-cent brands, which they could not sell three leading companies, which at one time profitably at ceiling prices. However, cigars produced 90 per cent of the total output, still selling for eight cents or less rose from 49 per accounted for 70 per cent of the total in 1939. cent of the total in December, 1944, to 59 per The process of manufacture is very highly cent in January of this year as a result of the mechanized. Workers for the most part are new OPA regulation, requiring increased vol merely inspectors and supervisors of automatic ume in the lower brackets. machines that turn out from 1,200 to 1,600 Another interesting change in consuming cigarettes a minute. Wages are only 2^ per habits has been the increased popularity of cent of the value of products including taxes. cigars among young men in the armed services. This is a much smaller proportion than in cigars Approximately 20 per cent of the current output and it reflects the difference in mechanization is consumed by service men at home and abroad. between the two industries. An important factor has been the cellophaning Competition is very keen, but rivalry between of all cigars sent overseas, which insures their the producers takes the form of extensive adver arrival in good condition. tising rather than price competition. There is one outstanding exception; in 1931, ten-cent The Cigarette Industry brands were introduced and they were turned The cigarette industry, like cigar manufac out in substantial volume during the depression turing, has gone through two major stages of era. development. The first period, from 1870 to Cigarette consumption is characterized by an 1913, was characterized by diversification of products. Invented by an Egyptian, the ciga unusual stability of demand because consumers rette became popular in this country when it easily acquire the habit which guarantees re was introduced to soldiers in the Civil War. In peat sales. For example, sales decreased very the eighties the manufacture of cigarettes was little during the depression of the thirties. mechanized and as a result costs were greatly Cigarettes are a heavily taxed product. The reduced. Production expanded rapidly and Federal excise tax is now seven cents a package ruinous competition ensued. This, in turn, led and thirty-one states also impose an excise tax to the consolidation of numerous companies and ranging from two to six cents a package. High the formation, in 1890, of the American To taxes apparently have not discouraged consump bacco Company. tion. Page Seven Cigarette Manufacturing During the War The effects of the war on the cigarette indus try have been largely responsible for the cur rent cigarette shortage. There has been a tre mendous increase in demand as a result not only of higher incomes but of nervous tension on the fighting lines and the home front. Output rose to 320 billion cigarettes in 1944, a new high, 77 per cent above 1939, but this was insufficient to meet the increased demand. The industry, with a nonessential rating, has been unable to get enough machinery to enlarge plant capacity adequately, even though the latter was doubled between 1937 and 1944. Wartime scarcity of labor is also a handicap to expansion. Another effect of the war, which has intensi fied the shortage for civilians, is the Govern ment’s purchases for the armed forces. In 1944 overseas shipments were 79 billion, or twice the 1943 shipments. This left about 240 billion for civilians and the armed forces stationed in this country, or 45 billion short of the estimated re quirements based on the accelerated wartime demand. There will probably be even fewer cigarettes for civilians in 1945, since production is not likely to increase and the army proposes to expand its purchases by 9 billion. The current cigarette shortage is not attrib utable to the Government’s agricultural ad justment program. Stocks of aged tobacco have declined over 500 million pounds between 1941 and 1944, but during that period production of cigarette tobacco increased almost 600 million pounds as a result of larger acreage harvested and higher yields. However, manufacturers’ in ventories of tobacco have declined from a cus tomary two years’ supply to 18 months owing to the rapidly accelerated demand for cigarettes. Taking all these factors into consideration, it is likely that the cigarette shortage will con tinue until manufacturers can obtain more labor and equipment. The Federal Trade Commission has reported that meanwhile some relief is pos sible by more equitable rationing at all trade levels. from France, but fortunately a domestic paper was developed in time to prevent a shortage. Glycerine, and licorice and other flavoring mate rials have also become scarce, requiring the use of substitutes. Tobacco Industry in Philadelphia Philadelphia manufactures cigarettes and other forms of tobacco but it is primarily a cigar-manufacturing center. It is one of twentythree counties included in the First Pennsyl vania Internal Kevenue District, which is the largest cigar-making area in the entire cigar industry, with an output almost twice that of Florida, the next in size. In 1939 the tobacco industry in Philadelphia produced $45 million of tobacco products and employed 8,300 work ers. In 1943 the industry produced $49 million of products and employed 8,900 workers. CHART HI TOBACCO INDUSTRY PHILA. TH0US. UNITED STATES AND PHILADELPHIA U.S. TH0U5 WAGE EARNERS UNITED STATES PHILADELPHIA VALUE OF PRODUCTS MILLIONS MILLIONS J t UNITED STATES PHILADELPHIA The war has had other effects on the industry in addition to “the shortage.” Imports of Turk ish and Greek tobaccos were curtailed, so that manufacturers had to reduce the percentages of these tobaccos in their blends. The war cut off supplies of cigarette paper formerly imported Page Eight ISIS '21 '23 !25 '27 29 '31 ’33 '35 '37 33 * * Tobacco production in Philadelphia through out the twentieth century, as shown in Chart III, paralleled that of the United States. Dur ing this period wage earners in the tobacco in dustry in Philadelphia increased—contrary to the trend of the tobacco industry in the United States. Thus, Philadelphia gained a larger pro portion of the tobacco industry of the country from the standpoint of the number of workers employed. This city became a more prominent cigar-manufacturing center as a result of mech anization. It caused a substantial shift from small and widely scattered plants turning out handmade cigars to large and highly mecha nized urban establishments. The value of output per worker in Philadel phia was about $5,400 in 1939, in contrast to $3,200 per worker in the cigar industry of the United States. The larger output per worker in Philadelphia is attributable primarily to largescale highly mechanized operations in this city. On the basis of confidential returns from the manufacturers to the Philadelphia Committee for Economic Development, it appears that 17 per cent of the local industry’s output was for war; but Government purchases have accounted for a larger proportion of the output of some of the leading manufacturers. The special survey further indicates that Philadelphia manufac turers expect to produce $55 million of products in the first year after the war, which would be 22 per cent above their 1939 output, and they expect to employ 10,000 workers in the first year after the war or 22 per cent above their 1939 employment. The industry is not con fronted by any reconversion problems. Of the cooperating firms, 86 per cent reported that they had an official or a group of officials in charge of post-war planning. The survey also indicates that 14 per cent of the cooperating firms plan to turn out new products after the war, but new products will constitute an insignificant percent age of their total post-war output. The Outlook The post-war outlook for the tobacco indus try as a whole will depend very largely upon the general level of business activity and the volume of purchasing power. The cigar branch of the industry is particularly susceptible to in come fluctuations because demand for cigars is more sensitive to changes in buying power than demand for cigarettes. Cigar manufac turers are optimistic on the post-war outlook based in part upon the increased consumption by men in the armed forces, but the fact re mains that the long-time trend has been down ward. The wartime shift to higher-priced cigars is dependent upon high levels of income. Cig arette manufacturers may expect an expanding market, but it is not likely to continue at the high wartime rate of growth. Competition within the industry promises to be more inten sive than ever judging from the success which some of the smaller manufacturers have had in obtaining a larger part of the total market. Business and Banking (Continued from page 1) Industrial production in the Phila delphia Federal Reserve District on an adjusted basis was maintained from January to Febru ary, but was about 8 per cent below the level of a year earlier. Small declines in the month oc curred in the activity of both heavy and light manufacturers. Reductions from February 1944, however, continued most pronounced in durable goods lines, where output was down 10 per cent, as against a decrease of only 1 per cent reported for nondurables. Production of coal was sub stantially above the low level of January, but about one-fifth less than in February of last year. Output of crude petroleum decreased for the third successive month and was consider ably smaller than a year ago. Industry. Prices at both wholesale and retail levels con tinue to show a remarkable degree of stability but are a little above the levels prevailing in the early months of last year. At wholesale, quota tions on farm products increased slightly from January to February, but there were no signifi cant changes in other major groups. Similarly, the cost of goods and services purchased by wage earners and lower salaried workers was virtually unchanged, nationally and locally, al though in Philadelphia minor advances were reported in the cost of food, fuels, and house furnishings during February. A major price development in March was the sweeping order freezing retailers’ mark-ups at levels prevailing March 19 on a wide range of Page Nine FACTORY PAYROLLS INDUSTRIAL AND TRADE ACTIVITY THIRD FEDERAL RESERVE OISTRICT PENNSYLVANIA PERCENT PERCENT CAPITAL GOODS PRODUCTION GOODS DEPARTMENT STORE SALES ADJUSTED TOR SEASONAL VARIATION LV---------- I------IT- -........................................... Lw------- ............ ■ ...r. ......... i -— . . 1939 1940 1941 * * * * *■“ ■ ■ ■ ■ *........... Ij................... ............... 1942 1943 1944 1945 specific items in such broad categories as wear ing apparel, household textiles, and home fur nishings. The directive applied to an estimated several hundred thousand retailers, and super seded General Maximum Price Regulations and four minor orders for all of the items covered. This measure supported the concerted efforts of production and price control authorities to chan nel more textile raw materials into the manu facture of lower-priced lines of essential civilian wearing apparel. Employment, wage payments, and total work ing time in Pennsylvania factories was main tained from January to February at levels lower than a year earlier. The number employed ap proximated 1,200,000 for the fifth successive month, but showed declines of 6 per cent from February 1944 and 7 per cent from the wartime peak reached in the fall of 1943. Payrolls were estimated at $54 million a week in February; they closely approximated those of the preced ing two months, but were down 4 per cent from the record high of a year earlier. Total em ployee hours worked showed a decrease of 7 per cent from February 1944. Average weekly earnings of employees at re porting plants in Pennsylvania have fluctuated narrowly for several months around $48.50, comparing with $48.81, the high point reached in October 1944, and $46.97 in February of last year. Hourly earnings in February averaged $1.08, slightly below the peak of the preceding month, but 4 per cent above the level of a year ago. The number of hours worked per man per week averaged just over 45 in February, show ing only minor deviations in the month and year. Page Ten 1940 1942 1944 1945 With the supply outlook for anthracite and bituminous coal still critical in spite of a sea sonal decrease in heating requirements, new measures have been taken to facilitate an equit able distribution of the tonnages to be produced in the new coal year beginning April 1. Thus, in states east of the Mississippi River, consump tion of coal by householders will be restricted to 80 per cent of normal requirements during the 1945-46 heating season; previously dealers’ quotas for February and March had been re duced 5 per cent to 82)4 per cent of their 1942 43 base tonnage year. For the protection of in dustrial users, the Solid Fuels Administration has prepared a priority list for emergency use whenever national or local shortages threaten to reach more serious proportions. Continuing reductions in the nation’s stock pile of solid fuels are suggested by latest official estimates that production of anthracite and bitu minous coal in 1945 may fall short of total re quirements by nearly 50 million tons. The great est element of uncertainty in the supply outlook remains the failure of mine operators and union representatives to conclude new working agree ments replacing those which expire April 1 in the soft coal fields and one month later at an thracite mines. At the request of Federal agen cies bituminous pacts have been extended for one month to assure uninterrupted operations while negotiations are continued. Output of anthracite rose from an average of a little over 161,000 tons a day in January to about 184,000 in February; however, produc tion on this basis was nearly one-fourth less than a year earlier, and the smallest of any like month since 1940. Operations at bituminous mines in Pennsylvania showed a much smaller rise from January to February, and production also was down from the unusually high level prevailing a year earlier. In the first two months this year the tonnage of anthracite mined was about 20 per cent smaller than in the 1944 period, and bituminous output in the state was 15 per cent less. Construction activity still is severely restricted by manpower and material shortages, although recently the prolonged down trend appears to have levelled off somewhat as emergency pro jects have been undertaken to supplement the fa cilities available for making munitions and other war essential products. In this district, the value of contracts awarded increased sharply in Feb ruary to a level considerably above that of a year earlier, reflecting a substantial rise in place ments for factory and other industrial buildings. Awards for facilities in this broad category in cluded large contracts let for the construction of a briquet manufacturing plant, an oil storage depot, and a factory to make heavy truck tires. Pronounced declines in the month and year were reported in the case of nearly all other classes of construction. The outlook for agriculture as the season opens compares favorably with the situation a year ago, and in many sections above average conditions are reported. Soil conditions in most parts of this district will permit an early start on plowing and other seasonal operations. Mois ture supplies generally are ample, with sub-soil conditions especially favorable, owing to an un usually heavy snow cover through the winter. Extremely low temperatures in January and early February do not appear to have injured fruit trees; on the contrary there is evidence that the prolonged cold destroyed many insect pests and the spores of fungus diseases affecting orchard fruits. As was the case last year, man power on the farms promises to become a most critical problem in the 1945 season. In many parts of this district the situation already is acute, owing to the heavy backlog of work ac cumulated over the winter, when many types of outdoor activity were delayed by the severe weather. Traffic congestion on the railroads persisted over most of February and into the early part of March, necessitating the imposition of two additional freight embargoes in the eastern part of the country. Subsequently, the high demur rage charges in effect during the fourth quar ter of 1944 were reestablished in an effort to speed the unloading of box and tank cars. Freight car loadings in this section were un usually well maintained from January to Feb ruary, although declines from a year ago were reported in all major categories. On an ad justed basis loadings of forest products and live stock declined sharply in the month, while in creases ranging from 2 to 27 per cent occurred in other freight classifications. Total loadings were 6 per cent smaller in the first two months this year than last. Trade. Wholesale trade sales in this district increased a little in February when dollar vol ume in the eight reporting lines was slightly larger than a year earlier. Increases in the month in sales of electrical supplies, groceries, hardware, jewelry, and paper, were largely off set by substantial reductions in the case of dry goods, shoes, and drugs. Mixed changes also were shown in comparison with February, 1944, the most pronounced being an increase of 22 per cent in sales of groceries and a decline of like amount in the business of jewelry stores. Wholesalers’ inventories were somewhat larger than in January but over the twelve months they were down nearly one-tenth. Retail dollar sales by department, apparel, and shoe stores in this district in February ex ceeded seasonal expectation by a substantial margin, and showed large percentage gains over a year earlier. The year to year increases re ported by these establishments in February and by a limited number of department and apparel stores during the first three weeks of March were attributable in part to the earlier date of Easter, although they also reflected a continua tion of the higher level of consumer purchases in evidence since last summer. In the first two months of 1945 the value of sales by department stores was 15 per cent greater than a year ear lier; gains of over 20 per cent were reported by men’s and women’s apparel stores in this period, and sales by shoe stores were up almost one-fifth. Inventories in retail lines showed mixed changes from January to February, with the value of stocks on an adjusted basis declining at department and shoe stores, but increasing Page Eleven at establishments specializing in women’s ap parel. Compared with a year ago, supplies ot merchandise were smaller in all reporting lines, the sharpest decline—33 per cent—being at DEPOSITS AND EARNING ASSETS THIRD FED. RES, DISTRICT REPORTING MEMBER BANKS MILLIONS shoe stores. 2600 The goal for sales of Series E savings bonds during the Seventh War Loan has been set at $4 billion, an amount more than $800 million greater than actual sales in any earlier loan drive. The goal for total sales to individuals is $7 billion, comparing with sales of $5.9 billion during the Sixth Loan. The ac companying table shows comparisons of Seventh War Loan goals for the three states of this dis trict with quotas and sales in the previous drive. 2600 Banking conditions. DEPOSITS 2400 2200 LOANS AND ' INVESTMENTS 2000 VJ r JASON DjkJ rM 1943 Sales to Individuals* War Loan Drives (Millions $) Pennsylvania Qu New Jersey: _ , T _ Delaware: ”T 11 T E Bonds Total 180 204 288 370 422 506 94 101 148 181 231 261 6 6.3 10 15 18.3 22 — * Includes individuals, partnerships and personal trusts. Promotion of sales of Series E bonds will begin April 9, particularly in the payroll savings field. Marketable issues will be on sale from May 14 to June 30, but all sales of savings bonds and savings notes processed between April 9 and July 7 will apply toward drive quotas. Deposits at reporting banks in leading cities of this district have been unusually well sus tained in the interdrive period, as shown in the chart. The $2,798 million held on March 21 was only slightly below the high point attained at the opening of the year. Shifts within total de posits are in line with expectations between drives. Over the past eleven weeks, United States Government balances have been drawn down $157 million and interbank balances also have fallen somewhat, but these losses were little greater than the gains in customers’ funds, Page Twelve JJ A SON OX J T M A M J J A 3 0 N P; M AM J 1944 1945 as reflected in adjusted demand and time depos its. Latest reports, approximately thirteen weeks after the close of the Sixth War Loan, show cus tomers’ deposits of $2,040 million, up $167 mil lion over the corresponding date following the previous drive. Loans on Governments at the reporting banks are down to $7 million, and are only a few mil lions higher than they were before the Sixth War Loan started. Advances to industry and trade have declined considerably from a year ago and are at the lowest levels in years. In vestments of these banks in Government securi ties, on the other hand, approach closely the rec ord level earlier this year, increasing $27 million over the past four weeks to $1,891 million. Reserves of all member banks expanded $52 million to $736 million over the period from February 21 to March 21. Treasury disburse ments in the district were considerably larger than receipts. While this net payment was due chiefly to redemption of Treasury bills from the Reserve Bank portfolio, a substantial portion represented payments to the market. Gains from this source and those from interdistrict commercial transactions provided a greater vol ume of funds than the amounts absorbed by currency demand and repayments on direct bank borrowings from the Federal Reserve Bank. BUSINESS STATISTICS Production Employment and Income in Pennsylvania Philadelphia Federal Reserve District Industry, Trade and Service Not adjusted Adjusted for seasonal variation Indexes: 1923-5=100 Per cent change Feb. 1945 j94r> from from 2 Mo. Year mos. ago ago 1944 Feb. Jan. Feb. 1945 1945 1944 INDUSTRIAL PRODUCTION MANUFACTURING.............. 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 •.............. Individual lines Pig iron...................................... Steel............................................ Silk manufactures................... Woolen and worsteds............ Cotton products...................... Carpets and rugs.................... Hosiery...................................... Underwear................................ Cement...................................... Brick.......................................... Lumber and products........... Bread and bakery products Slaughtering, meat packing. Sugar refining.......................... Canning and preserving.... Cigars........................................ Paper and wood pulp........... Printing and publishing.... Shoes.......................................... Leather, goat and kid........... Paints and varnishes............. Coke, by-product................... COAL MINING........................ Anthracite................................. Bituminous............................... CRUDE OIL.............................. ELEC. POWER—OUTPUT.. Sales, total............................... Sales to industries.................. BUILDING CONTRACTS TOTAL AWARDSf................. Residential!............................. Nonresidentialf....................... Public works and utilities!.. 138p 143p 218p 91 p 174 63p 526 116p 138 144 219 92 180r 64 529 150r 0 154r - 1 243 r - 1 92 r - 1 185 - 3 67 - 2 642 r 0 120 116r - 3 112 104 106 + 8 39 38 37 + 2 179p 171 165 + 5 95p 94 97 96 97 r 95 - 7 8 - 10 - 1 6 - 6 - 18 0 - lOOr 104 129 137 136 81 81 85 58p 60 61 41 43 45 58p 58 53 65 65 73 129 140 r 136 36 34r 27 51 5lr 56 33 34 33 + - + 11 10 + 6 + 34 - - + - - 97 143 159 103 85 99 r 125 67 104r 166 62 r 60r 78r 327 431 444 358 127 63 145r 106 85 97 116 79 98 162 91 90 98 r 373 411 429 359 4 - 2 0 + 3 33 5 69 28 25 35 35 47 26 +31 -12 +34 6 51 26 -8 + 8 -1 - 1 - 8 8 + 5 +15 +17 + + + + 6 - + 1 6 - 5 - 17 138p 136 142p 142 150r 154r 175 68p 522 113p 94 34 178p lOOp 96 173r 66 533 117 86 33 167 97 96 r 186 72 637 r 114r 89 34 165 103 95 105 135 86 60p 44 S9p 8 10 68 6 140 2 25 9 49 2 32 5* 128 27 87 16 109 10 150p 4 93 0 84 1 98 3 124 13 78p 3 94 2 184p 20 72 22 70 15 90 17 313 3 448 2 480 0 364 97 r 135 83 60 43 58 68r 137 24r 47 31 129 105 99 154 85 85r 99 r 127 71 93 166 63r 60r 89 r 314 457 458 347 107 142 90 63 48 54 76 149 19 54 31 123 128 81 134r 89 85 97 122 86 96 170 92 90 107 r 373 436 464 356 28 5 55 34 34 25 47 31 + 3 1 - - - + - + 8 + 3* + 30 34 + 10 + 0 1 + 2 + 9 2 8 + 21 22 16 16 3 + 4 + 2 -3 -85 +48 |+ 8 8 8 11 - + 5 5 + - + 1 - 1* + -41 + 0 + 89 84 16 Op 111 84 98 118 72p 96 175p 71 70 82 313 422 445 368 6 2 5 4 4 9 2 6 0 - 3 - 4 0 0 8 8 +2 1 - + + +1 -1 102 - Employment Feb. Jan. Feb. 1945 1945 1944 + I+ 1 4 4 1 6 5 3 2 9 19 85 19 4 33 4 70 33 Indexes: 1932 =100 Philadelphia.... + 2 + 1 0 0 0 - 1 o o + 1 0 - 2 — 9 -11 + + + 7 - 9 -11 2 1 2 1 Jan. 1945 + 3 + 1 + 2 0 + 2 - 2 + 5 + 5 + 5 + + + 1 2 3 2 Feb. 1944 Jan. 1945 +20 - 4 9 Do + 10 + 27 Jan. 1945 -84 - 7 0 - 8 8 +1 Feb. 1944 +16 +12 +11 +19 +13 + 6 +13 +22 + 7 -20 -19 -90 - 79 +215 + 42 - 64 -75 +12 +11 +48 * Area not restricted to the corporate limits of cities given here. Re tail sa es - 4 - 6 - 2 -10 - 1 -11 - 3 - 1 + 7 - 1 - 1 - 6 - 1 324p 487 93p 329 101 227 252 150 158 152 174 170 159 0 0 + 8 - 3 - 2 0 + 3 0 - 3 + 2 - 1 - 1 + 5 - 4 - 4 -22 -15 0 -14 + 2 + 8 + 7 + 5 + 6 - 1 + 4 p — Preliminary. Manufacturing Employment* Payrolls* Per cent Per cent Feb. change from Feb. change from 1945 1945 index Jan. Feb. index Jan. Feb. 1945 1944 1945 1944 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. . . . 114 124 216 152 77 72 101 126 81 51 116 71 100 94 0 0 +1 0 0 0 0 0 - 2 +1 0 0 0 + 1 - 6 - 6 + 9 -14 - 6 - 5 - 8 + 3 - 9 + 2 - 4 - 6 - 2 0 199 0 273 0 470 + 2 273 - 3 124 + 3 115 + 2 169 + 6 192 - 1 124 + 1 88 + 6 212 0 121 + 4 153 0 136 +1 — 4 - 4 + 8 -12 0 0 0 + 5 --6 +10 — 1 + 3 + 4 + 6 49 154 93 - 1 + 1 + 2 -14 + i - 5 74 334 135 — 7 + 7 -26 + 1 - 1 - 2 * Figures from 2808 plants. Factory workers Averages February 1945 and per cent change from year ago Debits Feb. 1944 Jan. 1945 Feb. 1944 +20 +21 +26 +24 +15 +20 +12 +32 1 25 +13 +36 ^"+24 +27 +25 +27 -15 -11 -13 ■ ■ 15 — 1 -21 - 4 —11 + 6 -13 0 +14 - 8 + — - -22 —12 0 — 5 - 2 9 1 6 3 Weekly working time* Hourly earnings* Weekly earnings! Aver age Ch’ge Aver Ch’ge Aver Ch’ge hours age age 45.1 - 1 $1.080 + 4 $48.50 46.5 - 1 1.142 + 4 53.07 46.1 - 1 1.025 + 3 47.19 46.3 - 1 1.271 + 5 58.77 40.7 0 .799 + 7 32.53 41.6 0 .810 + 6 33.73 38.6 + 2 .772 +10 29.95 43.2 - 2 .810 + 1 35.46 41.0 0 .931 + 3 38.13 45.0 + 1 .809 + 8 36.11 45.8 0 1.070 + 4 48.94 43.0 + 3 .784 + 7 33.80 44.0 + 2 .934 + 5 41.41 41.4 + 2 1.095 + 6 45.38 TOTAL............................ Iron, steel and prods... Nonfer. metal prods.. . Transportation equip.. Textiles and clothing. . Tertilea........................ Clothing....................... Food products............ Stone, clay and glass... Lumber products......... Chemicals and prods.. Leather and products.. Paper and printing... . Printing........................ Others: Cigars and tobacco... 42.6 Rubber tires, goods... 44.9 Musical instruments. 41.8 * Figures from 2664 plants. + 1 + 2 -16 .646 + 7 27.52 1.069 + 5 47.99 .908 - 7 38.00 t Figures from 2808 plants. — Trenton............... Wilkes-Barre.... Williamsport.... Wilmington........ York..................... Feb. 1944 Bui] ding perinits va ue 0 0 + 5 0 - 4 - 2 - 3 0 0 + 1 - 1 - 1 + 1 t-vo^© + + + + + + + + + + + + + es t +eo + 7 Harrisburg.......... Johnstown.......... Jan. 1945 Fac tory payirolls 129p 177 49p 72 40 73 129 96 117 104 99 96 94 Hours and Wages Local Business Conditions* Fac fcory emplo yment Per cent Per cent Feb. change from Feb. chang* from 1945 1945 index Jan. Feb. index Jan. Feb. 1945 1944 1945 1944 GENERAL INDEX............ Manufacturing...................... Anthracite mining.... Bituminous coal mining.. . . Building and construction.. Quar. and nonmet. mining.. Crude petroleum prod........ Public utilities...................... Retail trade......................... Wholesale trade.................... Hotels.................................... Laundries......................... . Dyeing and cleaning............ * Unadjusted for seasonal variation. p—Preliminary T 3-month moving daily average centered at 3rd month, r—Revised. Percentage change— February 1945 from month and year ago Payrolls Page Thirteen Distribution and Prices Wholesale trade Unadjusted for seasonal variation Sales Total of all lines..................... Drugs....................................... Dry goods.............................. Electrical supplies............... Groceries................................. Hardware............................... Jewelry.................................... Paper....................................... Inventories Paper....................................... Per cent change 1945 Feb. 1945 from fro m 2 Month Year mos. ago 1944 ago +1 —10 - 6 -18 + 4 + 6 +19 +15 + 2 + 2 - 8 + 7 -12 -21 +22 + 5 -23 + 5 + 2 - 6 +12 — 3 + 4 +17 0 Not adjusted Adjusted for seasonal variation Pei; cent change Feb.1945 1945 Feb. Jan. Feb. Feb. from Feb. Jan. from 1945 1945 1944 1945 1945 1944 Month Year 2 mos. 1944 ago ago Indexes: 1935-1939 -100 + 2 - 9 -41 + 9 -18 0 -14 -14 + 5 -11 - 8 +16 +10 -23 0 RETAIL TRADE Sales # 173 170 174 130 152 156r 149 r 173 133 133r + 9 + 4 +33 +34 +14 +11* +21 +18 +34 +31 +30 +15* 138 142 135 133 192p 183 56p 74 151 153 197 84 r - 3 + 1 + 5 -24 + 5* Inventories 133 134 151 133 119 123 r 121r 125 r 104 97 r 136 124 132 119 187p 159 58p 64 +15 +15 +23 +24 +19 - 9 -12 - 3 -33 - 8* 189p 176 232p 174p 173p 149 15« 193 87 r 149p 143 167p 136p 126p Source: U. S. Department of Commerce. Prices 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. 1945 Month Year Aug. 1939 ago ago 183 0 + 2 + 83 105 127 105 99 0 + 1 0 0 + 2 + 4 0 + 1 0 0 + 1 0 + 1 + 1 0 + + + + + + + + + + + Coke MISCELLANEOUS 2 3 2 8 0 +13 + 3 29 29 46 46 15 42 20 137 139 87 125 166 190 102 139 150 132 136 85 116 130 164 118 121 164 147 141 90 152 175 201 146 152 154 + 4 + 2 + 3 + 8 +27 +16 -13 +15 - 8 - 7 - 2 - 4 -18 - 5 - 6 -30 - 9 - 2 - 6 - 1 - 4 -16 -21 -10 -20 -11 + 3 126 126 82 130 63 203 83 123 136 126 127 80 130 50 188 95 118 166 135 129 85 158 66 216 118 134 140 122 ........................................................... + 40 + 108 + 56 + 24 127 126 136 145 111 143 121 FREIGHT-CAR LOADINGS 118 115 + 3 + 6 + 4 132 112 124 -83* -95* + 1 -77* 1 -50* + 3 189 3 5 196 9 2 187 Business liquidations Amount of liabilities................................... * Computed from unadjusted data. i95' 1.98 -50* -98* - 2 i.93 p—Preliminary. r Revised. Source: U. S. Bureau of Labor Statistics. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Chang as in— Reporting member banks (Millions $) 21, 1945 Assets Commercial loans.................. $ 217 Loans to brokers, etc.............. 36 14 Other loans to carry secur— 34 Other loans.............................. 109 Four weeks One year -$ 6 + 2 - 1 -$ 45 3 1 4 - 2 - 1 Total loanR............................ $ 410 -$ 7 -$ 54 Government securities......... $1837 Obligations fully guar’teed... 54 Other securities...................... 172 +$27 +$209 + 21 2 Total investments............... $2063 +$28 +$21 + 23 + 4 4 +$174 + 51 + 4 + l - 10 +$95 + 3 - 76 + 28 - 8 + I + i +$239 + 28 - 96 + 35 1 + 3 + 12 Liabilities Demand deposits, adjusted.. $1843 Time deposits.......................... 197 U. S. Government deposits. . 397 Interbank deposits................. 361 Borrowings............................... 18 Other liabilities....................... 241 Capital account...................... Page Fourteen + - 1 Changes in four weeks Feb. 28 Mar. 7 Sources of funds: _ _ Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict)....................... Treasury operations.................................................................. - 2.4 - 3.5 +17.2 -10.2 + 0.2 +25.7 -46.9 - 8.4 +69.0 -25.8 +68.5 -21.2 -85.3 +56.8 +90.7 Total............................................................................................ +11.3 +15.7 +13.7 +21.5 +62.2 + + + + + + - 7.7 8.6 0.5 0.1 + 3.5 +10.0 + 0.1 + 0.1 - 3.9 +25.7 - 0.3 + 0.0 +11.1 +51.7 - 0.7 + 0.1 +15.7 + 13.7 +21.5 +62.2 Uses of funds: Member bank reserve deposits.............................................. “Other deposits” at Reserve Bank....................................... Other Federal Reserve accounts............................................ +$228 Total loans & investments.. $2473 Reserve with F. R. Bank.... 429 Cash in vault........................... 32 Balances with other banks.. . 76 Other assets—net................... 47 Changes in w eeks ended— Third Federal Reserve District (Millions of dollars) 3.8 7.4 0.0 0.1 +11.3 Member bank reserves (Daily averages; dollar figures in millions) Held Re quired Ex cess Phila. banks 1944: Mar. 1-15.. 1945: Feb. 1-15.. Feb. 16-28. Mar. 1-15.. $350 392 387 398 $340 380 381 391 $10 12 6 7 Country banks 1944: Mar. 1-15.. 1945: Feb. 1-15 .. Feb. 16-28.. Mar. 1-15.. 266 301 300 309 211 251 253 257 55 50 47 52 Ratio of excess to re quired 3% 3 2 2 26 20 19 20 Federal Reserve Bank of Phila. (Dollar figures in millions) Mar. 14 Mar. 21 Changes in 21, 1945 Four weeks One year Discounts and 0.7 advances............... $ 3.1 Industrial loans.... U. S. securities......... 1309.4 -$11.0 + 0.3 + 49.2 -$ i.i 0.7 + 520.5 Total........................ $1313.2 Note circulation... . 1468.8 Member bk. deposits 735.7 U. S. general account 0.8 Foreign deposits___ 103.9 4.1 Total reserves.......... 1005.9 43.5% Reserve ratio........... +$38.5 + 9.7 + 51.7 - 41.3 - 5.8 - 0.7 - 26.2 - 14% +$518.7 + 291.4 + 107.5 - 37.6 - 31.1 2.0 - 195.2 - 17.0%
@FedFRASER