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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT AUGUST i, 1932. By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent FEDERAL RESERVE BANK of PHILADELPHIA Business and Financial Conditions in the United States Industrial activity decreased fur ther from May to June by somewhat more than the usual seasonal amount and there was a considerable reduc tion in factory employment and payrolls. The general level of com modity prices advanced between the middle of June and the middle of July, reflecting chiefly a rise in the prices of livestock and meats. Production and employment. Volume of industrial production as measured by the Board’s seasonally adjusted in dex, declined from 60 per cent of the 1923-1925 average in May to 59 per cent in June. There were large de creases in output in the steel, coal, and meat-packing industries, while at au tomobile factories daily average pro* duction showed a smaller decline than is usual at this season, and at woolen mills activity increased, contrary to seasonal tendency. Consumption of cotton by domestic mills showed the usual seasonal decline. At manufacturing establishments there was a further reduction of 3.6 per cent in the number of employees INDUSTRIAL PRODUCTION Index number of industrial production, ad justed for seasonal variation. (1923-1925 aver age = 100.) and of 7.8 per cent in earnings be tween the middle of May and the middle of June. Decreases in employ ment were general, with the excep tion of the automobile and tobacco industries, and of seasonally active industries, such as vegetable and fruit canning and the manufacture of ice cream. The largest decreases were in the steel, textile, chemical and ma chinery industries and at railway re pair shops. Daily average value of building contracts awarded, as reported by the F. W. Dodge Corporation, declined in June but increased in the first half of July. Department of Agriculture estimates as of July 1 indicate a corn crop of 3,000,000,000 bushels, the largest since 1923; a winter wheat crop of 432,000, 000 bushels, 45 per cent smaller than last year and 21 per cent less than the five year average; a spring wheat crop of 305,000,000 bushels, three times as large as last year and slightly larger than the average; and a tobacco crop one fifth smaller than usual. Volume of railroad freight traffic declined somewhat fur ther in June and value of merchandise sold by department stores decreased by more than the usual seasonal amount. Distribution. Wholesale prices. The level of prices in wholesale markets, after declining steadily during May, was relatively stable early in June, and after the middle of the month there was an ad vance which continued through the second week in July. Prices of sev eral leading commodities, including RAILROAD FREIGHT-CAR LOADINGS Merchandise fev. Tot \ '* ;-v \j L_ Indexes of daily average number of cars loaded; adjusted for seasonal variation. (1923— 1925 average =100.) RESERVE BANK CREDIT and FACTORS in CHANGES RESERVE BANK CREDIT Monthly averages of daily figures. Latest fig Monthly averages of daily figures for 12 Fed ures are averages of first twenty days in July. eral reserve banks. Latest figures are averages of first twenty days in July. Page One livestock and meats, cotton, and sugar, increased considerably during June and the first half of July, but later showed some recession. Prices of wheat declined to unusually low levels and markets for copper and lead con tinued weak. Bank credit. Volume of reserve bank credit continued to increase between the middle of June and the middle of July, reflecting principally further pur chases of United States government securities by the reserve banks. In addition, member banks obtained re serve bank funds through an increase in the monetary stock of gold and a decline in deposits held with the re serve banks by foreign central banks. Funds released from these sources were absorbed by an increase in the demand for currency which also caused the member banks to draw on their balances with the reserve banks and to increase their discounts some what. The demand for- currency, which for the period amounted to $270,000,000, was caused by banking disturbances, largely in the Chicago district, by seasonal requirements at the turn of the month and the Fourth of July holiday and by increased use of cash to avoid the tax on checks. Loans and investments of reporting member banks, after fluctuating widely during June, declined in the first two weeks of July, and on July 13 totaled $18,475,000,000, about $540,000,000 less than on June 1. There was a fur ther decline in loans while the banks’ investments in United States govern ment securities, after increasing sub stantially during the period of Treas ury financing in mid-June, declined gradually but on July 13 were still $90,000,000 larger than six weeks earlier. Money rates in the open market de clined further during June and the first half of July. At the Federal Reserve Bank of New York buying rates for bankers’ acceptances matur ing within 90 days were reduced from 2to 1 per cent on June 24. On the same day the bank lowered its dis count rate from 3 per cent to 2J4 per cent and on the following day the rate at the Chicago bank was reduced from 3>4 per cent to 2J4 per cent. Business and Financial Conditions in the Philadelphia Federal Reserve District Business in general has shown fur ther declines, reflecting partly sea sonal influences. There have been, however, apparent signs of improve ment in several lines of trade and in dustry, indicating largely replace ment demand. Commodity prices have continued to exhibit strength, display ing an upward instead of the down ward tendency shown in many past months. Output of manufactures in the aggregate declined more than cus tomary in June, but there were more individual lines than a month ago that showed rather unusual increases. Pro duction of coal decreased sharply in June and continued downward in July. Building activity was consid erably below the usual rate, but some improvement is noted in early July. Retail sales declined in June, but there was a little more activity in early July. Wholesale trade sales changed little in June. Comparisons with recent years continued unfavorable. Industrial employment and wage earnings in June showed more than usual reductions. Reports for occu pations, representing 70 per cent of all persons gainfully employed in Pennsylvania, indicate that employ ment, industrial and service in char acter, was 5 per cent smaller and pay rolls 12 per cent less in June than in May. Compared with a year ago, fac tory employment was 20 per cent less Page Two and payrolls 42 per cent smaller; the decline in factory output in the same period amounted to 30 per cent. Manufacturing. The market for fac have declined somewhat since last month and they have been consider ably below those of a year ago. Factory employment in this section showed a drop of 3 per cent and wage payments 4 per cent from May to June, as compared with a decrease of 4 per cent in employment and 8 per cent in payrolls for the country as a whole. The local employment index in June was 60 or 19 per cent lower than a year ago, and the payroll index was 38, showing a drop of 40 per cent from June 1931; the decline in the country from a year ago amounted to 21 per cent in employment and 37 per cent in payrolls. tory products continues seasonally quiet, although several lines manufac turing consumers’ goods report a somewhat more active demand for their products. In early July reports showing increases in unfilled orders were more numerous than in the pre vious two months, but comparisons with a year ago continued unfavor able. Fluctuations of prices for man ufactured products have been less pro nounced than for many months and since the middle of June there has INDUSTRIAL PRODUCTION been a slight ten PHILADELPHIA FEDERAL RESERVE DISTRICT dency toward PERCENT higher levels in MANUFACTURING several commod ities. Stocks of fin ished goods in the middle of July were reduced fur ther in most lines, and they were COAL MINING smaller than at the same time last year. This is also true of raw ma terials held by factories. Settle 1930 1927 1928 ments of accounts 1932 Supplement to The Business Review August i, 1931 TRADE ACCEPTANCES A description prepared by The Department of Research and Statistics of The Federal Reserve Bank of Philadelphia A renewal of interest in the use of trade ac ceptances in this country is resulting in in quiries concerning the nature and advantages of trade acceptances as means of settling ac counts between buyers and sellers of goods. At the suggestion of the local Committee on Bank ing and Industry, recently appointed by the Governor of this bank, a brief description is given here of some of the salient features of trade acceptances. buyer accepts such a bill, he expresses a binding promise to pay for the goods purchased a speci fied amount on a definite date, generally 60 or 90 days in the future. A trade acceptance, to be in good faith, should arise out of current transactions only, representing actually existing values in the form of goods transferred from the ownership of the seller to that of the buyer. It differs from a draft such as may be drawn in mercan tile transactions to settle an account which is What Is a Trade Acceptance past due, and it is not an ordinary note which A trade acceptance is defined as a draft or may cover almost any kind of obligation, not bill of exchange drawn by the seller on the pur involving the sale of merchandise. chaser of goods sold, and unconditionally ac cepted in writing upon its face by the purchaser. A trade acceptance is a negotiable bill. It is It is an unqualified acknowledgment of a debt a convenient and practicable type of com by the buyer in favor of the seller. When the mercial credit instrument which can be used to (date) 8 z fS Oh m ON—October thirty-flrat, 1! ( date op mat r jrity) 8 . One thousand seven htinr£gj>rl nnrl THE TRANSACTION WHICH CIVEsJWE TO TH INSTRUI THE DRAWEE MAY ACCEPT THIS BILL HAYABLE A* ANY 1$ DRAWEE MAY DESIGNATE. . u < TO THE ORDER OF OURSELVES DOLLARS (p.,750—________) IF GOODS BY THE ACCEPTOR FROM THE DRAWER. COMPANY IN THE UNITED STATES WHICH SUCH TO Georgs Blank and flnmf^ny w Q * a 3 < w (street address) (signature of drawer) Philadelphia, Pa,) ( city op drawee This is a sample of an executed trade acceptance in accordance with a standard form approved by the American Acceptance Council and by the Federal Reserve Board. Names and data used are fictitious. advantage in financing business. The use of trade acceptances is designed as a substitute for the open book account whenever business is not conducted on a cash basis. How Trade Acceptances Are Used When a sale of goods is made, the seller may draw a draft on the buyer, using a trade accept ance form such as that shown by the ac companying sample, and send it to the buyer together with the invoice for the goods sold. This invoice may cover a single large purchase or several small purchases during the month, depending on the trade custom. Other docu ments, such as the bill of lading and delivery order, may accompany the invoice and the trade acceptance. sented by a bona fide trade acceptance may thus become immediately available to the seller for his current use, whereas the money represented by an open book account may remain tied up more or less until maturity, especially when business conditions are unsettled. Trade acceptances, as well as certain other types of paper, are exempt from the legal re striction under which national banks as well as banks and trust companies in some states are prohibited from lending to any one borrower more than 10 per cent of the banks’ capital and surplus. In discounting trade acceptances, a bank naturally must have sufficient evidence that the credit standing of the names which appear on these bills is satisfactory. The bank, having The buyer may either pay cash, taking ad vantage of the customary discount, or he may acquired a trade acceptance, may hold it until sign the trade acceptance by writing his name, it is due, or, if it needs funds for business re the date and the place of payment across the quirements, it may rediscount the bill with the face of the draft, thereby assuming the obliga Federal reserve bank. tion to pay the amount specified in the accept In order to be eligible for rediscount, a trade ance at maturity. The acceptance so executed acceptance must bear on its face evidence that is then sent back to the seller and becomes a definite asset among his “trade acceptances re it is drawn by the seller on the purchaser of goods sold, and must have a maturity at the time ceivable.” of rediscounting of not more than 90 days, ex The seller may hold this acceptance until ma clusive of days of grace, excepting that if turity when he may ask his bank to collect it in drawn for agricultural purposes or against the the same manner as in the case of any other sale of live stock it may have a maturity at the maturing commercial paper handled by banks time of rediscounting of not more than six months, exclusive of days of grace. A trade as collecting agents. acceptance offered for rediscount must be en If on the other hand the seller finds himself dorsed by a member bank and supported, if re in need of funds to be used in the further pro quired, by a recent financial statement of one duction or distribution of goods, he may ar or more parties to the bill. range to have the acceptance negotiated; for. Federal reserve banks also may purchase example, he may discount it along with other trade acceptances in the open market. As in the acceptances at his bank, or sell it in the open market through brokers or dealers in com case of rediscounting, acceptances purchasable mercial paper. In this way he may readily con by the reserve bank must conform in all re vert the acceptance into actual cash required spects to the requirements which govern eligible for his business operations. The funds repre paper. Output of manufactures continued Business Indicators downward even though the decline in Philadelphia Federal Reserve District June was not as severe as in May, nor was it as sharp as in the previous two Index numbers—expressed in percentage of 1923-1925 average, which years. The bank’s index, which ac ‘Adjusted” index numbers make is taken as 100 allowance for the usual seasonal counts for the difference in the num changes which result from an ber of working days and for seasonal uneven distribution of business Adjusted for seasonal variations Not adjusted changes, was 53 per cent of the 1923 They are the most significant indexes because they show im 25 average as compared with 56 in Percentage comparison provement or decline beyond the May and 76 per cent in June 1931. level usually to be expected. June 1932, June May June 6 This is a decline of 4 per cent from “Unadjusted” indexes reflect June May June 1931 with 1932 1932 months 1931 1932 1932 merely the actual changes which the preceding month and of 30 per 1932 may or may not be up to the with 6 cent from a year ago, as compared usual seasonal expectations. Month Year months 1931 ago ago with a drop in the national index of 2 per cent from a month ago and over Productive activity 29 per cent from June 1931. Manufacturing—total............... 75.7 55.5 53.4p - 3.8. -29.5 -23.5 75.7 54.6 53.2p More than normal seasonal gains Metal products......................... 60.7 32.4r 30.5 - 5.9 -49.8 -45.6 61.2 32.Ir 30.8 Textile products.......................... SO. 6 52.8 52. Op - 1.5 -35.5 -20.7 79.3 50.9 50.8p were reported by groups comprising Transportation equipment... 52.5 50.0 54.2 + 8.4 + 3.2 -10.9 53.8 51.9 55.2 I1 ood products. . . 79.7 70.6 71.7p + 1.6 -10.0 -10.3 78.9 70.4 70.5p transportation equipment, food prod Tobacco and products............ 103.8 79.3 80.9 + 2.0 -22.1 -20.0 110.0 77.1 85.8 Building materials................. ucts, allied chemicals, and cigars, 42.9 24.6 23.5 -45.2 -35.6 47.7 25.5 25.9 Allied chemical products.......... 103.5 91.1 93.7p + 2.9 - 9.5 -11.3 104.3 92.6 94.4p while the increase over a month ago Leather and products................ 112.4 97.5p 78. Op -20.0 -30.6 -17.4 110.3 88.7p 76.6p Paper and printing................ 98.6 77.8 73.2 - 5.9 -25.8 -17.9 97.6 78.5 72.4 in the output of building materials was Electric power output............ 192.5 178.2 169.4 - 4.9 -12.0 - 5.2 182.9 165.7 160.9 Elec. pwr. used by industries. . 133.3 116.0 110.0 - 5.2 -17.5 - 9.9 134.6 118.3 111.1 smaller than it ordinarily should have Factory employment—Penna. been. Production in the remaining — 2 8* Factory wage payments—Penna. - 4.3* —42 0* —35 4* 61 5 37 3 35 7 groups continued downward. The combined index for eleven manufac Coal mining................ 74.6 49.2 42.6 -13.4 -42.9 -24.6 65.6 48.5 37.5 Anthracite.............. 75 49 42 — 14 3 turing groups was 24 per cent lower in Bituminous............. 71.9 50.4 46.4 - 7.9 -35.5 —29^6 63.3 45.4 40.8 the first half of this year than last. Out of twenty-nine leading indus Building and real estate Contracts awardedf—total. 59.6 32.6 30.9 - 5.2 -48.2 -45.4 82.9 39.8 38.0 tries fifteen showed improvements be Contracts awardedf—residential 31.1 16.7 15.1 - 9.6 -51.4 -43.6 37.6 21.4 18.3 Permits for building......... 13.4 6.7 10.8 +61.2 -19.4 -41.7 16.5 7.4 13.3 yond the usual seasonal change. Sub Mortgages recorded in Phila. 41.4 22.8 31.3 +37.3 -24.4 -27.2 37.3 21.2 28.2 Real estate deeds recorded in stantial gains over the preceding Philadelphia........... 58.9 60.3 53.4 -11.4 - 9.3 - 3.4 63.6 65.1 57.7 Exclusive of Sheriff deeds month were especially noticeable in (1930 = 100) . . + 4 7* — 3 3* — 7 1* 85 0 78 5 the output of iron castings, motor Sheriff deeds (1930 = 100) +35 0* +28 5* +15 2* 137 0 130 4 176 1 Writs for Sheriff sales in Phila. .. 1035.6 1003.5 1365.8 +36.1 +31.9 +12.5 1035.6 1053.7 1365.8 vehicles, shipbuilding, such textiles as cotton goods, hosiery and underwear, Distribution Retail trade—sales............ brick, paints and varnishes, and most 84.8 63.5 61.Op - 3.9 -28.1 -22.0 82.6 64.1 59.3p Retail trade—stocks 74.0 61 .Or 62.0 + 1.6 — 16 2 71 0 of the items comprising the food Wholesale trade—sales.... 76.0 63.2r 62.9p - 0.5 -17.2 -17.7 72.6 60.3r 60.5p "W holesale trade—stocks... 81.2 67.5 67.6 r + 0.1 — 16 7 78 6 66.5 65.2p group. In comparison with a year freight car loadings (Allegheny district) ............. 70.2 48.9 47.4 - 3.1 -32.5 -25.8 71.6 50.9 48.3 ago, a higher rate of operation pre Life insurance sales... 131.9 98.1 100.5 + 2.4 -23.8 -16.3 137.2 105.0 104.5 vailed in shipbuilding, meat packing, New passenger auto registrations 77.2 50.5 63.5 +25.7 -17.7 -29.3 108.1 72.7 88.9 sugar and petroleum refining indus Business liquidations tries ; other lines continued materially Number................. Amount of liabilities... lower. +99.0* +134.5* 107! 2 243.0 213^3 Production of electric power in June Payment of accounts Check payments.................... declined instead of increasing as is 93.2 62.0 59.6 - 3.9 -36.1 -31.3 96.9 61.4 62.0 Rate of collections (actual, not usually to be expected and was 12 indexes) Retail trade.............. per cent smaller than a year ago. Con Wholesale trade......... + 1 7 - 4^0 55.6 52.5 53.4 sumption of electrical energy by in dustries also showed a larger than Per cent change fron usual decrease and was 18 per cent (000,000’s omitted in dollar figures) June Mar. Apr. May June less than in June 1931. In the first 1931 1932 1932 1932 Month 1932 Year half of this year industries used 10 ago ago per cent less power than in the same Banking and credit period last year. Activity in the construction and contracting in dustry as a whole declined in June instead of increasing as is customary. Reports from 16 city areas of Penn sylvania, 14 of which are located in this district, showed that employment in building trades declined 10 per cent and payrolls 13 per cent from May to June. Operating time in the same period showed a reduction of Building and real estate. Reporting member banks Loans to customers................... Open market loans and investments................... *770 $693 $671 $652 *637 - 2.3 - 17.9 584 458 433 455 462 +1.5 - 20.9 All member banks—net demand and time deposits.... 2,405 1,983 1,964 1,962 1,962 0.0 - 18.4 Bankers’ acceptances outstanding.............................................. 23.8 15.2 15.1 14.1 13.6 — 3.5 - 42.9 Federal Reserve Bank Bills discounted... Other bills and securities. . . Reserve ratio.................. 19 50 88.3% 97 71 64.9% 74 82 67.3% 63 112 62.5% 66 134 65.6% + 48 + 19.6 -11.0 +247 4 + 168.0 - 37.0 * Computed from unadjusted indexes, f 3-month moving average. p-Preliminary. r-Revised. Page Three FREIGHT CAR LOADINGS BUILDING CONTRACTS ALLEGHENY DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT TOTAL RESIDENTIAL 1932 ADJUSTED FOR SEASONAL VARIATIONS 1929 I93Q Source: American Railway Association Source: F. W. Dodge Corporation nearly 7 per cent. The sharpest de creases in the number of workers and in their earnings occurred in plaster ing and bricklaying trades, while operations of structural iron workers showed the largest gain. The value of building contracts awarded increased in June instead of declining seasonally. This gain was due to larger awards for other types of construction than dwellings, since residential contracts fell off 21 per cent in this period. In early July, residential contracts declined further, while awards for other types of build ings increased. June awards for all classes of building were about 57 per cent of those let in the same month of last year. The value of mortgages recorded in Philadelphia in June was 33 per cent larger than in May; usually a decline of 3 per cent takes place in this period. The number of recorded deeds, on the other hand, declined. First half year comparisons show re ductions of 27 per cent for mortgages and 3 per cent for deeds as compared with the same period last year. Con veyances, exclusive of sheriff’s deeds, fell off 7 per cent from the first half of 1931 and in June were 3 per cent smaller than a year earlier. Owing to a deficiency in the supply of moisture, the growth of vegetation has been retarded since the middle of last month. Maturing crops have thus far suffered little dam age, but later plantings are badly in Per cent need of rain. The condition of pas Six change from months Contracts awarded tures and meadows has deteriorated 1932 in selected cities and rapidly because of drought. (000's district omitted) 1931 1926-30 Production estimates as of July 1 average indicate that yields of leading crops Philadelphia.................... 14,130 - 48.3 -86.9 in this district will be smaller this 1,076 - 57.3 -65.9 Reading............................ 1,714 +192.5 -35.3 Scranton. ......................... year than last. Fruit prospects also 223 - 87.0 -95.9 Camden............................ have declined and indications now are 587 - 55.7 -87.2 Trenton............................ 1,408 - 36.4 -63.8 Wilmington..................... that this year’s harvest will he smaller “All other”...................... 36,686 - 41.6 -68.0 than the average of the five-year Total for district .... 55,824 - 43.4 -76.9 period from 1924 to 1928. The con dition of livestock varies widely, al Source: F. W. Dodge Corporation though in most sections it compares The proposed expenditure under favorably with that of a year earlier. permits issued in 17 cities of this dis Cold storage holdings of dairy, poul trict increased in June by a larger try and poultry products increased no amount than usual; first half year ticeably in this section between May comparisons, however, show a decline of nearly 42 per cent from a year ago, and June; as compared with a year owing partly to lower prices for build ago, stocks of butter and poultry were ing materials. The index number of larger, while those of cheese and eggs building permits in June was 13 per showed a decline. Supply of farm labor continues to cent of the 1923-25 average as against 7 per cent in May and 17 per cent in exceed the demand, reflecting partly a movement of urban labor to rural June 1931. Page Four Agriculture. communities in search of a livelihood. Wholesale prices of farm products in the United States were nearly 2 per cent lower in June than in May, in creases in the average prices of live stock and poultry being more than offset by declines in other classes of agricultural commodities. As com pared with a year ago, the price level of the farm products group was about 30 per cent lower. Coal. Output of coal for both domes tic and industrial consumption declined sharply during June. In Philadelphia, sales of hard coal by retail yards showed a marked reduction during the month and were unusually small as compared with those of other years. Production of anthracite, which aver aged less than one hundred thousand tons daily, showed a drop of 25 per cent as compared with the rate of the preceding month and was the smallest of any June in recent years. During the first fortnight of July the weekly output of collieries declined further. Shipments also were smaller than in May and were exceedingly light as compared with the corresponding pe riod of last year. Wholesale prices of anthracite continued to decline during June and were 4 per cent lower than a year earlier. Production of Pennsylvania bitumi nous coal also declined last month, although the recession was less pro nounced than in the case of anthracite. As compared with June of last year, however, the daily output of collieries was about 35 per cent smaller. Pro duction declined further in early July. Shipments continued to fall off during June and were smaller than those of a year earlier. Average quotations for soft coal throughout the country were Per cent change June 1932, compared with COST OF LIVING Cost of living— items composing the index number PERCENT Phila. Phila. PHILADELPHIA Food.... Clothing, Housing................................. Fuel and light...................... House furnishing goods. . . Miscellaneous...................... UNITED STATES Total.................................. Source: United States Bureau of Labor Statistics. establishments, comprising eight lines, in June in- MERCANTILE TRADE PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT RETAIL SALES WHOLESALE SALES ADJUSTED rOjR SEASONAL VARIATIONS Page Five NEW PASSENGER AUTOMOBILE REGISTRATION PHILADELPHIA FEDERAL RESERVE DISTRICT_____ PERCENT CHECK PAYMENTS AND PRICES PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT - - - - - -ADJUSTED FOR —1—j . SEASONAL VARIATIONS! UNITED STATES UNADJUSTED 1927 1928 WHOLESALE PRICES 1930 1932 Sources: R. L. Polk Company, Pennsylvania Motor List Company 1927 1928 204 to 197 millions. Large transfers to other districts were made for the Treasury, and this bank also had to make payments to New York as a re sult of the participation in system operations. A decrease in the re serve ratio from 54.5 to 52.4 per cent reflected chiefly the change in cash reserves, as an increase in the federal reserve note liability was largely off set by a decline in total deposits. Loans to customers at the weekly reporting member banks totaled 624 millions on July 20, which was 18 per cent less than a year earlier. Eleven millions of this decline has taken place in the last four weeks. Nevertheless, deposits, other than those to the credit of the government, show an actual increase of 9 millions in the month, owing in part no doubt to government disbursements and to a decline in amounts due from banks, one of the deductions permitted in figuring deposits. Government de posits at these banks declined 28 WAGE PAYMENTS millions, the funds ALL MANUFACTURING INDUSTRIES being provided largely by calling in sums on deposit DELAWARE in other districts and by selling in NEW JERSEY vestments ; open market loans and investments d e PENNSYLVANIA dined 12 millions. Average figures for June, cover ing all member banks, show net demand and time deposits of 1928 1929 1930 1931 1932 1,962 millions, During the past four weeks cur rency receipts at this bank have ex ceeded payments to the banks by a little over 5 millions; there was a rise of probably more than the usual amount over the week which included July 4, but this was offset in part by the return of money in the following fortnight. Treasury collections and receipts amounted to 46 millions, while government disbursements here to taled 28 millions; in meeting this net withdrawal of 18 millions from the local market and in providing the ad ditional currency, the banks did not greatly increase their borrowings from this bank. Most of the funds were ac quired through a favorable balance of 20 millions in the settlements with other districts, which probably was the result mainly of drafts upon deposits held elsewhere and investment sales. Despite the settlement balance in favor of the member banks, the cash reserves of this bank decreased from PERCENT 1927 DigitizedPage Six for FRASER 1929 *930 1931 1932 Source: Prices: United States Bureau of Labor Statistics July 20. 1932 Reporting member banks (000,000’s omitted) Loans to customers: On securities............. $ All other..................... Loans to open market. United States securities Other securities............ July 22, 1931 June 22, 1932 315 309 8 185 268 Total loans and investments......... SI,085 Net demand and time 899 deposits...................... Government deposits . 7 $ S 319 316 7 196 270 409 358 48 223 322 $1,108 $1,360 890 35 1,179 19 practically unchanged from May. The stability of the total figures in May and June contrasts with pronounced declines in the last four months of 1931 and the first four in 1932. In June country banks reported a de crease of 8 millions in such deposits, but this was balanced by gains in Philadelphia. Federal Reserve Philadelphia (Dollar figures in millions) Changes in— July 20, 1932 Bills discounted for member banks in— Philadelphia........ $ 12.8 20 other large 27.1 Other communi32.4 Four weeks One year +$0.7 +$ + 1.7 + 23.9 + 2.5 + 22.2 $ 72.3 3.2 +$4.9 - 2.2 +$ 55.7 0 138.2 1.5 + 6.8 - 0.1 + + $215.2 +$9.4 +$140.4 255.6 + 8.0 + 109.8 117.1 + 1.4 - 1.0 - 0.8 - Total bills disUnited States secuOther securities.... Total bills and seFederal reserve note circulation Member bank reserve deposits. . Foreign bank deGovernment* de- + - 6.5 1.6 - 6.9 196.6 52.4% - 2.1% - 9.6 83.7 1.0 28.3 5.0 0.7 60.7 33.9% Employment June 1932 LOANS AND INVESTMENTS REPORTING MEMBER BANKS—PHILA. DISTRICT MILLIONS Employment and wages in Pennsylvania Payrolls June 1932 Per cent change since June* index LOANS TO -CUSTOMERS Per cent change since June* index June 1931 May 1932 June 1931 May 1932 All manufacturing industries (51)....................................... 59.7 -19.9 _ 2.8 35.7 -42.0 4.3 Metal products........................ Blast furnaces...................... Steel wks. and rolling mills Iron and steel forgings.... Structural iron work.......... Steam & hot wtr. htg. app. Stoves and furnaces........... Foundries.............................. Machinery and parts......... Electrical apparatus........... Engines and pumps............ Hardware and tools............ Brass and bronze products 51.0 36.4 44.9 47.9 71.2 73.0 57.1 50.0 56.6 72.1 32.7 60.4 53.4 -26.1 -18.9 -28.0 -35.0 -17.6 -19.1 -15.3 -27.3 -28.7 -22.2 -32.0 -14.3 -17.1 — — — — + — 4.1 0.0 5.9 2.0 5.1 0.3 5.6 3.8 4.7 1.1 7.9 0.5 2.7 26.1 15.0 21.3 27.8 33.8 44.9 33.6 21.2 28.7 44.1 13.9 33.9 30.5 -50.1 -55.5 -53.6 -53.8 -54.3 -27.1 -16.0 -55.5 -51.5 -44.6 -61.3 -35.7 -39.2 _ 6.5 _ 14.3 _ 9.7 _ 1.1 _ 8.4 _ 1.8 _ 10.9 _ 0.9 _ 13.6 + 3.3 24.5 + 2.7 0.3 Transportation equipment... Automobiles......................... Auto, bodies and parts.... Locomotives and cars........ Railroad repair shops......... Shipbuilding......................... 44.4p 45.6 54.4 21.2 60.3 51.9 -22.6 -32.1 + 4.8 - 7.0 -11.6 - 2.4 _ 0.4 +53.5 + 2.4 — 2.3 — L9.7 + 2.8 26.2p 26.4 30.6 12.7 29.5 65.7 -45.4 -21.2 - 1.9 -21.6 -52.5 - 9.8 _ 5.1 +131.6 _ 1.9 _ 7.3 _ 38.4 - 13.1 Textile products...................... 71.1 Cotton goods........................ 49.6 Woolens and worsteds.... 45.8 Silk goods.............................. 62.9 Textile dyeing & finishing. 74.9 Carpets and rugs................. 46.5 Hats........................................ 57.2 Hosiery.................................. 100.8 Knit goods, other ............. 80.7 Men’s clothing..................... 73.0 Women’s clothing............... 119.8 Shirts and furnishings.... 96.2 -16.0 -23.7 -20.9 -22.2 - 9.5 -28.8 -25.4 - 3.8 - 8.8 -13.4 - 3.7 -31.0 _ 3.4 + 9.3 — 3.8 — 8.2 — 8.9 — L5.1 — 1.4 + 0.1 — 0.7 — 0.5 — 2.3 — 4.0 43.9 31.1 25.0 43.6 52.8 24.2 37.6 61.4 52.2 43.8 88.8 55.1 -42.0 -48.3 -53.6 -42.9 -27.6 -55.7 -33.7 -38.6 -32.6 -44.1 -25.3 -54.7 _ + Foods and tobacco................. Bread and bakery products Confectionery...................... Ice cream............................... Meat packing....................... Cigars and tobacco............. 93.9 97.9 80.0 101.0 92.4 93.4 -10.3 - 9.0 -16.4 -16.4 - 1.8 - 9.0 + — — + — + 2.5 0.9 4.1 8.6 0.4 6.6 77.4 83.4 65.8 83.1 75.2 71.5 -20.0 -18.0 -27.2 -28.1 - 7.0 -19.9 _ + Stone, clay & glass products. Brick, tile and pottery. . . . Cement.................................. Glass....................................... 46.9 48.8 40.8 56.8 -20.2 -28.6 -25.8 + 3.5 + 6.6 — 5.6 +13.0 +13.6 24.2 22.1 20.9 38.0 -46.7 -48.6 -55.9 -18.3 + 9.0 + 3.3 + 13.6 + 9.5 Lumber products..................... Lumber and planing mills. Furniture............................... Wooden boxes...................... 44.1 30.6 44.8 57.5 -20.7 - 6.7 -27.5 -15.1 + 5.8 — 2.5 +14.3 0.0 28.3 21.8 26.6 39.6 -40.4 -27.8 -48.2 -33.7 + 7.2 7.6 + 17.2 + 8.2 Retail trade sales Chemical products.................. 78.0 Chemicals and drugs......... 54.0 Coke........................................ 60.2 Explosives............................. 67.1 Paints and varnishes......... 87.2 Petroleum refining.............. 114.2 -15.9 -20.6 -13.8 -17.1 - 7.5 -14.1 + — — — + + 0.3 63.2 8.5 43.0 1.5 19.6 0.4 49.3 1.4 78.5 3.6 107.4 -27.9 -32.1 -58.6 -37.4 -13.0 -19.9 _ 2.0 _ 9.7 _ 24.6 _ 6.1 + 7.1 + 2.5 —27 —37 —22 —32 8 7 2 9 Leather and rubber products Leather tanning.................. Shoes...................................... Leather products, other . . Rubber tires and goods. . . 78.2 85.0 75.1 59.8 79.7 - 9.9 -14.0 + 3.4 -28.2 -10.8 - 2.2 — 4.7 -25.9 — 9.4 + 0.6 57.1 60.1 40.4 43.5 99.1 -32.3 -35.2 -29.7 -53.7 - 8.8 10.6 _ 6.4 _ 39.4 _ 9.9 + 29.5 —25 9 —31.6 -19.8 —27 3 — 23 1 Paper and printing................. Paper and wood pulp......... Paper boxes and bags........ Printing and publishing.. . 82.7 73.0 66.6 88.4 -10.2 - 9.7 -15.8 - 9.8 _ 2.4 — 2.4 + 5.5 3.1 65.6 49.0 51.6 73.4 -27.1 -31.1 -36.0 -25.1 _ 8.1 _ 11.9 + 1.4 7.2 Anthracite mining................... 51.5 Bituminous coal mining........ Canning and preserving........ Construction and contracting Hotels......................................... Laundries.................................. Dyeing and cleaning.............. Public utilities......................... Quarrying and non-metallic mining.................................... Retail trade............................... 83.5 Wholesale trade...................... 81.5 -30.6 -20.8 - 2.1 +11.6 - 5.0 - 0.1 - 1.6 + 0.4 - 0.2 31.4 -43.8 35.4 11.0 + 9.9 10.0 3.1 3.2 3.4 2.8 OPEN MARKET LOANS AND ^ INVESTMENTS NET DEMAND AND TIME DEPOSITS ALL MEMBER BANKS-PHILA. FED. RES. DISTRICT MILLIONS 1400 1200 BANKS OUTSIDE _ _OF PHILADELPHIA 1000 PHILADELPHIA BANKS 1929 1930 1931 1932 Percentage change—June 1932, from June 1931 City areas* Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . Williamsport........ Wilmington.......... York....................... Payrolls -19.1 -35.4 -17.0 -12.5 -21.9 -17.8 -14.4 -30.0 -22.0 -11.5 -32.5 - 5.3 - 8.6 -42.4 -53.1 -33.8 -54.1 -46.8 -33.5 -49.2 -38.3 -33.3 -28.0 -46.8 -21.1 -23.0 Building permits (value) + 75.9 68.2 _ 36.1 _ 30.7 — 77.7 _ 67.6 — 81.8 +1354.4 73.3 _ 38.8 _ 15.2 _ 51.9 _ 81.1 Debits -29.8 -24.6 -24.3 -30.8 —41.1 -40.1 -21.3 -10.5 -17.6 —22.1 -30.3 -23.0 - 1.2 -10.9 -12.0 -13.5 - 3.3 - 1.7 - 3.4 - 4.1 - 4.1 + 4.2 + 1.4 + 0.7 + 4.9 - 3.1 -15.1 - 6.3 -11.3 - 5.9 - 1.8 -14.5 - 2.3 + 1.6 + 4.0 + 0.0 + 0.1 + 2.1 + 840.5 - 62.8 - 13.8 + 135.6 + 7.4 - 21.2 - 23.5 +1361.6 + 40.0 + 269.7 - 75.0 - 25.0 - 24.2 + 1.6 -15.2 + 1.9 - 0.2 - 5.1 + 4.9 + 3.0 + 1.3 +26.7 - 4.9 - 1.5 +10.6 + 4.3 * Area not restricted to the corporate limits of cities given here. — — — + _ _ _ + + _ _ + 2.7 7.2 7.4 10.7 14.8 31.6 23.7 7.0 1.1 10.2 9.4 0.2 + 2.4 1.8 3.8 2.1 1.7 + 12.2 —36 9 June 1932, from May 1932 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... _ - 5.8 -22.0 -19.5 -19.2 - 8.3 - 4.5 -10.5 -17.2 + 3.5 -22.4 - 3.4 * 1923 1925 average —100. - 2.0 - 9.4 - 2.2 - 0.8 - 0.5 14.5 p-Preliminary figures. Page Seven Index numbers of individual lines of trade and manufacture OUTPUT OF MANUFACTURES Philadelphia Federal Reserve District "Adjusted” index numbers make allowance for the usual seasonal changes which result from an uneven distribution of business between the months of the year. They are the most significant indexes because they snow im provement or decline beyond the level usually to be expected. "Unadjusted” indexes reflect merely the actual changes which may or may not be up to the usual seasonal expectations. Index numbers—expressed in percentages of the 1923-1925 average which is taken as 100 Not adjusted Adjusted for seasonal variations LOCOMOTIVES AND CARS Percentage comparison June 1931 May 1932 June 1932, with June 1932 Month ago May 1932 June 1932 Year ago 6 months June 1931 1932 with 6 months 1931 Retail trade Sales 84.8 82.8 80.2 102.9 94.8 78.8 63.5 64.4 56.4r 75.3r 75.0 54.2 61 Op 61.4p 55.6p 70.0 68.6 55.Op + 3.9 4.7 1.4 7.0 8.5 1.5 -28.1 -25.8 -30.7 -32.0 -27.6 -30.2 -22.0 82.6 -20.8 79.0 -29.7 83.4 -28.4 100.1 -24.9 109.0 -32.6 72.5 64.1 63.1 52.5r 77.7r 83.3 58.5 59.3p 58.5p' 57.9p 68.0 78.9 50.6p 74.0 69.9 72 .9 104 7 89.1 66.1 59.2 60.9r 82.3 69 1 54.5 62.0 58.7 64.8 82.0 66.3 58.2p + + + 1.6 0.8 6.4 0.4 4.1 6.8 -16.2 -16.0 -11.1 -21.7 -25.6 -12.0 71.0 67.1 69.5 93.3 87.3 64.8 61.0 58.9r 61. lr 83.1 70.5 54.0 59.5 56.4 61.7 73.4 65.0 57. Op Stocks of goods Rate of stock turnover 6 months (actual, not indexes) - 8.0 72.6 49.0 98.0 47.6 65.7 90.0 69.3 47.5 66.6 1.83 1.99 -17.7 -11.6 -12.7 -27.3 -37.1 - 8.8 -31.3 -23.7 -22.7 HOSIERY Wholesale trade Sales 63.2r 52.9 86.7 35.6 58.9 84.3 r 49.2 32.6r 51.8 62.9p 44.4 85.1 33.6 57.6 84.5p 45.9 51,5p 50.8 - 0.5 -16.1 - 1.8 - 5.6 - 2.2 + 0.2 - 6.7 +58.0 - 1.9 -17.2 -22.1 -16.7 -35.0 -28.1 - 4.2 -31.1 - 8.9 -26.8 81.2 67 5 116.4 100.1 51.4 41 9 112.3 77.7 95.1 81 8 77.3 65 9 59.4 53 ,4r 81.5 71.7 67.6p 104.8 40.6 83.3 83.6 65.6 + 0.1 + 4.7 - 3.1 + 7.2 + 2.2 - 0.5 -16.7 - 0.6 Stocks of goods 71.3 Rate of stock turnover 6 months (actual, not indexes) - 3.9 Output of manufactures 13.8 37.2 52.4 26.2 49.1 27.7r 46.1 24.5 83.5 48.6 34.0 11.3 Automobile parts and bodies.... 32.7 31.1 18.3 16.2 161.1 177.1 88.6 58.8 31.3 62.1 53.1 23.6 55.3 38.0 104.4 83.4 120.4 99.6 74.6 35.2 Brick................................................... 43.0 20.9 23.9 20.2 12.6 24.3 30.1 20.6 46.2 26.8 32.2 14.4 185.6 54.9 29.7p 29.9 26. Op 95.3 104.2 35.7 22.0 17.1 81.2 95.1 52.3 67.6 35.5 29.6 103.4 78.4 71.7 55.8 104.0 82.3 109.6 97.8 115.0 97.3p 65.1 46.4 83.5 65.4 134.7 134.1 83.6 49.9 103.5 79.9 30. Ip 80.1 49.7 77.9 73.8 82. Op 44. Op 72.6 137.Ip 47.3 Slaughtering, meat packing......... * Computed from unadjusted indexes. Page Eight - 8.7 - 7.3 + 8.7 -15.9 - 4.9 +137.2 + 3.5 -11.1 + 4.8 - 6.6 - 5.1 +26.7 -31 .6 + 14.3 + 4.6 + 1.4 + 5.3 -15.3 - 1.8* + 8.8 +18.2 + 1.7 + 2.2 -10.9 - 5.3 -24.5 -15.7 - 5.2 +11.0 + 2.2 - 5.2 p-Preliminary. -66.1 -53.6 -38.7 -55.3 -44.7 -21.2 - 1.5 -21.3 + 15.2 -38.0 -52.2 -43.7 -53.0 - 8.7 -13.5 -52.1 -48.8 -28.5 -18.0* +27.5 +52.8 -15.2 -22.5 -30.7 -25.1 -32.7 -28.7 -32.4 -13.1 + 1.8 -43.4 r-Revised. -57.2 -50.1 -44.4 -57.9 -39.7 -39.3 +14.5 -30.2 - 5.9 -22.8 -30.3 -27.4 -23.4 - 4.3 -11.4 -36.6 -48.1 -19.8 -16.1* +19.1 +20.4 -25.3 -20.6 -20.6 -17.6 -14.3 -20.4 -30.7 -13.0 - 2.0 -38.1 60.3r 52.4 86.7 33.5 44.8 83.5r 54.1 27.4r 51.3 60.5p 38.2 81.7 30.9 47.2 86.2p 47.7 43.3p 48.8 78.6 66.5 109.4 101.1 51.4 41.5 110.1 73.8 86.5 77.7 78.8 67.9 64.7 57.lr 81.5 71.0 -16.7 -10.0 -21 .0 -25.8 -12.1 -15.1 -25.1 -12.5 76.0 57.0 102.1 51.7 80.1 88.2 66.6 56.5 69.4 65.2p 98.5 40.6 81.6 76.1 66.9 48.5p 71.3 2.29 2.20 12.0 35.3 14.3 53.4 27.5 24.8 48.6 28.8r 29.8 47.9 25.5 21.4 83.5 44.7 46.2 41.5 14.2 32.7 32.7 32.7 32.2 18.8 15.9 14.8 159.5 ■182.4 183.7 84.2 56.4 52.2 59.6 29.4 28.5p 50.3 23.2 28.3 54.7 37.6 25.7p 102.3 83.4 93.4 120.4 100.6 104.2 89.5 39.8 42.8 44.7 22.2 22.9 18.8 17.4 24.4 101.7 84.9 83.4 93.7 96.8 76.1 56.0 83.1 85.5 25.6 22.5 21.7p 109.6 76.0 84.9 71.0 55.8 49.2 103.0 83.1 77.1 104.1 89.0 70.1 116.1 88.5p 82.8p 65.1 46.9 44. Op 85.2 69.3 74.1 135.4 134.3 137.7p 83.6 51.9 47.3 LUMBER PRODUCTS PAPER AND WOOD PULP SHOES PETROLEUM
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