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BUSINESS THIRD FEDERAL PHILADELPHIA AUGUST i, 1940 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Volume of industrial production in creased rapidly during June and rose somewhat further in the first half of July. Distribution of commodities through retail and wholesale markets and by rail continued active. Production. The Board’s seasonally adjusted index of industrial production advanced from 106 in May to 114 in June. In that month, as in May, in creases in activity were most marked in the iron and steel and textile indus tries where declines earlier in the year had been greatest. Steel ingot production rose from 60 per cent of capacity at the beginning of May to 87 per cent in the latter part of June and was maintained at about that level in the first three weeks of July. Production of coke and pig iron showed similar sharp increases and iron ore shipments down the Lakes were at near-capacity levels. Demand for steel was general as most domestic steel-consuming industries were oper ating at high rates. Exports of steel, which had declined in April, rose to earlier high levels in May and June, amounting to about 10 per cent of steelproducing capacity. INDUSTRIAL PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 to June 1940. Automobile production, which had for public construction increased fur begun to decline in May, continued to ther in June, owing in part to expan decrease in June and the first half of sion in the construction of Army and July reflecting in large part seasonal Navy air bases. influences. Retail sales of automobiles Distribution. Department store sales were in large volume and dealers’ in June were maintained at the May stocks of new and used cars declined level, although usually there is a con from the high levels prevailing earlier. siderable decline, and the Board’s sea In the textile industry there was a sonally adjusted index advanced to 93 further sharp advance in activity at woolen mills, and at cotton mills out as compared with 87 in May and a put was reduced less than seasonally. level of about 89 earlier in the year. Rayon production was maintained at Sales at variety stores showed little earlier high levels while at silk mills change from May to June, continuing activity remained near the unusually at the advanced level that has pre vailed since the beginning of the year. low rate reached in May. Coal production continued in large In the early part of July department volume during June, but output of MONEY RATES IN NEW YORK CITY CENT CENT crude petroleum declined in the latter part of the month, owing to reduced TREAS IRY BONDS production in Texas fields. (* Value of construction contract rVl awards showed little change from May RESERVE BANK 1 V" . DISCOUNT RATE . to June, according to F. W. Dodge Corporation figures for 37 eastern I ■L C ) W states. Awards for private residential >URY BILLSjHA \ 1 TRE.A building decreased more than season —yC v 1938 1939 1940 1934 1935 1936 1937 ally, following a sharp rise in May, and contracts for private nonresiden- For weeks ending February 6, 1934 to July 13, tial building also declined. Contracts 1940. per j s team DEPARTMENT STORE SALES AND STOCKS Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average =100. By months, January 1934 to June 1940. WHOLESALE PRICES OF BASIC COMMODITIES Federal Reserve groupings of Bureau of Labor Statistics’ data. Thursday figures, January 4, 1934 to July 11, 1940. Page One store sales declined seasonally from the June level. Freight-car loadings increased fur ther in June. Shipments of coal and miscellaneous merchandise continued to expand and loadings of coke, which usually decline at this season, showed a substantial rise. Commodity prices. Prices of a num ber of industrial materials, particu larly steel scrap, copper, rubber, and silk, declined from the middle of June to the middle of July. Wheat prices also showed decreases in this period, while prices of livestock and prod ucts advanced owing partly to seasonal influences. Agriculture. Production of major crops this season, according to the July 1 report of the Department of Agriculture, may be slightly lower than last season. Tobacco production will be sharply reduced from last year, when the crop was unusually large. Domestic supplies of wheat and other field crops as well as of vegetables and fruit are expected to show little change from last season. Indicated hog pro duction this year will be about 10 per cent smaller than last year. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities increased during the five weeks ending July 10, chiefly as a result of increases in holdings of short-term United States Government obligations and in commercial loans. Holdings of United States Govern ment bonds and loans to security bro kers and dealers declined. The monetary gold stock increased by $885,000,000 in this five-week pe riod, the largest gold acquisition for any corresponding period on record. This inflow of gold was reflected in a growth of $310,000,000 in foreign bank balances with the Federal Re serve Banks and in increased deposits and reserves of member banks. On July 10, excess reserves of member banks amounted to $6,833,000,000. Government security market. Prices of Government securities, which had advanced sharply in June, showed fur ther increases after July 8 when the Treasury announced a new bond issue for cash subscription. Between June 10 and July 15 the price of the 1960-65 bonds rose about 3 points, and the yield on this issue declined from 2.52 per cent to 2.34 per cent as compared with 2.26 per cent at the year’s peak in prices on April 2. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District increased further from May to June and preliminary in dications are that the expansion con tinued in July. The output of heavy manufactured goods has shown sub stantial increases. Production for na tional defense is beginning to get under way, and private buyers have been placing large orders in anticipation of future needs. The demand for fuels has also been active. The output of consumers' goods in general has declined, owing in part to the usual seasonal lull. The stimulus to buying power resulting from the increasing activity in armament and other capital goods industries appar ently has not yet registered in the de mand for consumers’ goods to any large extent but prospects generally appear favorable. Construction activity increased fur ther in June. Possible needs for addi tional plant capacity are still some what uncertain and no widespread in dustrial building activity is as yet in evidence. Retail trade sales have improved sub stantially, following a moderately dull spring season. Purchases from whole sale establishments continue largely for replacement, and both wholesale and retail distributors are drawing upon inventories rather than placing forward orders. MANUFACTURING ACTIVITY Incomes from wages received by workers in twelve branches of trade and industry have increased further and are considerably larger than a year ago. Cash farm income also is above that of last year. Prices of raw materials and manu factured goods have shown some tend ency to decline in recent weeks, re flecting the confused outlook as to the domestic demand in many lines and, in the case of agricultural products, the loss of important foreign markets. Manufacturing. The demand for heavy goods manufactured in this dis trict continues active, but some sea sonal slackening has appeared in a variety of consumers’ lines. The volFACTORY PAYROLLS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT CONSUMERS’ GOOOI PRODUCTION EMPLOYMENT CAPITAL GOODS PAYROLLS 1934 1935 1936 Page Two 1937 1938 1939 1940 1936 1937 193 8 1939 1940 ume of inquiries for steel products and building materials has increased fur ther in the past month and sales by the iron and steel industry have been expanding. Many buyers appear to be placing orders in anticipation of difficulties in getting deliveries later this year when the armament program is expected to absorb a substantial part of productive capacity in the heavy in dustries. Shipyards are operating at capacity and have received additional contracts in the past month. Orders for tanks and other armament are increasing, and the immediate demand for aircraft engines is considerably in excess of the supply. Seasonal activity in build ing and the prospect of plant expan sion under the defense program are stimulating the demand for construc tion materials. In consumers’ lines, especially tex tiles, private buying has slackened after having been active in the late spring. Substantial government or ders have been received, however, especially for blankets, uniform cloth, and a variety of knit goods. Prices of manufactured articles have been somewhat weak, except in the steel industry where levels have been sus tained. The large volume of unfilled orders accumulated in the heavy industries during the past several months has been generally maintained and in cer tain lines further increases are re ported. Compared with the same period a year ago, when industrial activity was expanding rapidly, the volume of unfilled orders shows increases in the steel industry and declines in textiles and some other lines. Manufacturing operations have in creased further in the past month and in the case of heavy goods are at levels above a year ago. The expansion in business has not as yet occasioned any widespread additions to plants, but purchases of equipment have been fairly numerous. Inventories of both raw and finished products at reporting establishments in general have shown some further increases in the past month and are larger than a year ago. This is to be expected in view of the general tend ency for the demand to rise and the desire to avoid delays in deliveries. Employment and payrolls at Penn sylvania factories increased in June following steady declines in the first part of the year from the high points reached late in 1939. From the middle of May to the middle of June, when Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-25 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not June April May June be typical. 1939 1940 1940 1940 June 1940 from Month Year ago ago Industrial production.... Manufacturing—total............... Durable goods........................ Consumers’ goods.................. Metal products...................... Textile products.................... Transportation equipment. Food products........................ Tobacco and products......... Building materials................ Chemicals and products.... Leather and products.......... Paper and printing............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output...................................... Sales, total!............................ Sales to industries!............... Not adjusted Per cent change 82 84 78 77 r 81 82 67 r 84 85 83 r 80 80 86 86 66 r 75r 68 65 77 95 99 81 79 84 108 114 95 40 42 43 115 122 120 121 99 103 88 91 r 87 56 59 60 54 57 59 65 r 74 77 419 433 445 85p 82 p 87p 78p 91 62p 103 85p 97 39 125p 108p 89 76p 75p 83 405 + 1 - 0 + 3 - 2 + 5 - 6 + 4 + 2 -15 - 8 + 4 + 4 - 1 + 28 + 32 + 7 - 9 266 255 169 283 277 196 - 2 + i + 7 285 288 270 274 185 183 + 8 + 7 + 29 6 + 38 — 18 + 34 + 6 + 1 — + 1 9 — 11 + + + + — + + + 3 27 27 28 3 6 9 16 1940 April May June from June] 1939]1940 1940 1940 6 mos. 1939 + 8 + 9 + 31 - 4 + 38 78 r 76 r 83 81 84p 81p 67 r 84 86 -11 73r 65 63 100 103 +34 78 + 3 77 76 80 + 7 103 99 111 + 10 44 41 45 +11 116 124 122 - 8 118 98 94 + 3 86 89 91 - 1 53 r 57 58 - 7 52 r 56 57 + 51 57 r 67 70 + 3 435 ' 446 463 92 6Cp 104 80p 104 43 126p 105p 89 67p 66p 73 421 + 8 252 + 9 247 + 10 170 269 269 198 81 80 279 268 278 263 187 186 Employment and wages—Pa. Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 = 100).... General (1932 = 100) Employment................................. Payrolls.......................................... + 1* + 7* + 8* 80 r + 4* + 16* + 17* 71 r + 3* + 17* + 21* 68 85 79 78 84 79 78r 85 82 80 + 1* + 5* + 3* + 13* + 7* 106r 110 110 + 14* 140r 151 154 111 + 5 + 1 + 3 — 13 + 18 + 18 -10 + 7 -14 — 14 + 3 + 10 -12 — 33 - 6 -10 71 58 57 135 29 56 254 159 Building and real estate Contracts awarded!—total............. 68 r 65 66 Residential..................................... 63 r 56 54 Nonresidentialf.............................. 47 r 52 47 Public works and utilities!......... 133 r 121 158 Permits for building—17 cities.. . . 27 r 16 27 Real estate deeds—Philadelphia!.. 51 49 54 Writs for Sheriff sales—Phila......... 377 236 289 69 55 56 142 23 56 254 70 62 63 67 52 57 48 53 50 126 111 111 33 r 23 30 51 48 52 -12 377 248 303 -16 + 10 + 4 + 14 Distribution Retail trade —sales...................... stocks.................. Wholesale trade—sales..................... stocks.................. Life insurance sales............................ New passenger auto, registrations. Hotels—Occupancy.. . (1934 = 100) Income, total (1934 = 100) Freight-car loadings—total............. Merchandise and miscellaneous. Coal.................................................... 84p 77 p 80 84 91 + 4 - 2 - 1* _ i* + 8 - 3* - 1* + 9* + 7 + 6 + 13 + + + + + + + + + + + 12 3 8* 4* 14 33* 8* 30* 24 20 27 + 3 + 6* 75 r 70 - 0 83 + 34* 120 + 5* 119 + 8* 115 + 21 61 +16 63 + 29 55 74 81 84 79 84p 72p 88 90 150 164 132 130 145 137 72 63 66 72 62 66 94 159 128p 149p 76 75 70 Business liquidations Number............................. Amount of liabilities___ + 6* + 6* -20* + 134* -11* 74 r 104 -23* 11 43 + 2 - 2 + - 2 + 3 74 31 79 25 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ 99 87 90 97 32 33 33 33 3* + 3* 76 6* + 5* 62 4* + 2* 68 2* + 3* 80 5* + 2* 76 2* — 0* 78 4* + 3* 73 79 78 69 72 82 78 79 76 68 77 66 b Prices—United States Wholesale (1926 = 100). + + Farm products............... Foods............................... Other commodities.... Retail food........................ Philadelphia................... Scranton.......................... (In millions of dollars) June 1939 March 1940 1* + + + + 3* 2* 0* 1* 1* 0* + + + 71 82 70 82 80 80 ■76 79 79 76 % change from April 1940 May 1940 June 1940 Month ago Year ago Banking and credit Federal Reserve Bank Bills discounted.............................. Other bills and securities............. Member bank reserves................. Reserve ratio (per cent)............... Reporting member banks Loans................................................. Investments..................................... Bankers’ acceptances outstanding. $ 0.4 209 493 79.0 $ 0.3 206 611 82.9 $ 0.2 200 S 0.1 200 $ 0.1 200 683 83.9 697 84.2 667 84.0 -4 0 0 -0 -75 - 4 + 35 $ 401 694 7.9 $ 427 726 9.7 $ 437 719 9.5 $ 446 723 9.2 $ 453 728 8.9 +2 + 13 + 5 + 13 * Computed from data unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. ! Not included in production index. p—Preliminary. + 1 -3 + 6 r—Revised. Page Three METAL PRODUCTS-EMPLOYEE HOURS WORKED PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT TEXTILE FIBERS MILLIONS OF LBS. — 400 A STEEL WORKS "AND ROLLING MILLS UNITED STATES PRICES MILL TAKINGS DOLLARS in PER. LB — .150 COTTON, COTTON WOOL "VFOUNDRIES AND MACHINE SHOPS 1935 1936 1937 1938 there is usually a small reduction, em ployment increased about 1 per cent and wage disbursements nearly 4 per cent. Manufacturing employment for the state as a whole was estimated at 892,000, or 7 per cent above a year ago, and weekly payrolls aggregated $22, 100,000, or 16 per cent more than in June 1939. Early reports indicate a further improvement in the demand for factory labor during July. The increase in June was due chiefly to further expansion in the durable goods industries. Payrolls in these lines were 30 per cent larger than a year earlier, reflecting sharp gains in activity at plants turning out metal products and certain types of trans portation equipment. Wage payments also increased somewhat from May to June in consumers’ goods industries, especially men’s clothing, shoes, hats, and certain seasonal food products. The general level of payrolls in con sumers’ lines, however, was 2 per cent below a year ago, owing chiefly to de clines in textiles. The total number of man-hours worked at reporting factories in Penn sylvania increased 3 per cent in June, but the average number per employee was only fractionally higher. An in crease in average weekly earnings from $26.16 in May to $26.60 in June was due partly to an advance of more than one-half cent in hourly earnings to 72j4 cents, the highest in records back to 1927. Reports from factories in southern New Jersey show increases from May to June of about 3 and 5 per cent re spectively in the number of wage earn ers and in wage disbursements. Em ployment and payrolls were 20 and 35 per cent above a year ago. At plants in Delaware the increases were somePage Four 1939 1940 1937 1938 what smaller, about 2 per cent in the month in both employees and wages, and 12 and 16 per cent respectively in comparison with a year ago. Manufacturing activity in this dis trict in June continued at the May level, as was to be seasonally expected, so that the adjusted index of production remained at 82. This level was 7 per cent higher than a year ago, but still 11 per cent under the peak of last De cember. Output in the first half of the year averaged 9 per cent larger than in the first six months of 1939, reflect ing sharp increases in the manufacture of durable goods. The production of durable goods has been expanding since February and in June was 29 per cent larger than a year ago. An improvement of 3 per cent in the month was principally in primary iron and steel and in trans portation equipment, particularly at shipyards. In contrast to the rising trend in capital goods, the output of consumers’ goods declined 2 per cent on an ad justed basis and was 6 per cent smaller than a year ago. Production in the textile group was not maintained at seasonal levels and was 18 per cent smaller than a year ago. The output of electric power in creased less than seasonally from May to June, but total sales and sales to in dustry increased more than was to be expected. Coal and other fuels. The demand for most fuels remains active for this season and prices generally are steady. Retail dealers in this section are still replenishing their stocks of anthracite in anticipation of fall requirements, and shipments to Canada continue un usually heavy. In New England the 1939 1940 1937 1938 1939 1940 demand for Pennsylvania coal has in creased substantially since the war started, as imports from Russia and Wales have declined sharply. Exports of coal in June were valued at $11, 200,000 as compared with $11,000,000 in May and $5,600,000 a year ago. Production of anthracite expanded considerably further in June and was well above seasonal levels in the first half of July. Colliery output averaged nearly 175,000 tons a day in June as against 152,000 in May and 138,000 a year ago. Industrial consumption of bitumi nous coal continues at a high level, considerably above a year ago. The output of mines expanded further in June, when there is ordinarily a de cline, and was the largest for that month since 1930. The volume of pro duction was sustained during the first two weeks of July, according to pre liminary reports. Production of by-product coke in creased substantially further from May to June, reflecting expanding activity at plants turning out primary iron and steel. Output of gas and fuel oils in June also was above the May level and considerably greater than a year ago. Building. General industrial and resi dential construction was unusually active in June and new awards for commercial structures and apartments expanded sharply. New contracts aggregated $21,300, 000 in June, or 38 per cent more than in May and 44 per cent above 1939. The only declines in June were in houses and educational and miscellane ous structures. Contracts for indus trial buildings and apartments were the largest for the month since 1930 and 1929, respectively. The sharp increase in total contracts over June 1939 re- VALUE OF RESIDENTIAL BUILDING CONTRACTS FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE DISTRICT ALLEGHENY DISTRICT PERCENT 1923 25AVC - 100 c 0AL *. ONE AND TWO FAMILY HOUSES TOTAL i'i MERCHANC ISE AND MISCELL ANE0US ■TOTAL ADJUSTED 1935 1936 1937 1938 fleeted gains in all types of construction except educational buildings. The greatest increases were in commercial and factory buildings and in public works and utilities. Building contracts Philadelphia Federal Reserve District Per cent June change 1940 (000’s From 1940 omitted) month from 6 mos. ago 1939 Residential........................... $ 7,885 + 22 Apts and hotels............. 2,336 + 507 Family houses................. 5,549 - 9 Nonresidential..................... 5,728 + 24 Commercial...................... 3,265 + 106 Factories.......................... 1,072 + i Educational..................... 127 - 81 All other........................... 1,264 - 2 -29 - 4 - 2 + 36 + 15 - 9 -31 Total buildings.......... $13,613 Public works and utilities. 7,641 + 23 + 77 - 8 + 28 Grand total................. $21,254 + 38 + i -11 Source: F. W. Dodge Corporation. In the first half of the year con tracts for residential construction were smaller than a year ago, but awards for commercial and industrial build ings and for public works and utilities were considerably larger. Total con tracts amounted to $95,300,000 or slightly more than in 1939 and were the largest for the period since 1931. Agriculture. Growing conditions in this district continued favorable until the middle of July, but the absence of general rains retarded vegetation some what later in the month. The condition of truck crops gener ally is satisfactory, although moisture is needed in some localities. Fruit prospects vary considerably. An ex cellent crop of peaches is indicated, but the outlook for apples and pears is somewhat less favorable, owing partly to insect damage. The tobacco crop in Pennsylvania is late, and the plants appear to be developing some what unevenly. 1939 1940 1934 OR SEASONA 1935 Yields of hay, white potatoes and oats will be larger this year than last, according to official estimates based on the condition on July 1. Output of corn and wheat is expected to show some decline from a year ago, and the tobacco harvest will be considerably smaller than the unusually large crop produced last season. Receipts from the sale of farm prod ucts in Pennsylvania, New Jersey and Delaware increased 8 per cent in May to approximately $31,300,000, slightly more than a year earlier. In the first five months of 1940 the cash income from crops and livestock products to taled $142,117,000, or 3 per cent more than in the same period last year. Government payments this year also have been larger than in 1939. Distribution, trade and service. Re tail sales in this district in June ex ceeded seasonal expectations for the second successive month and in the first three weeks of July declined less than usual, according to preliminary figures. The adjusted index increased 4 per cent from May to June to within 5 per cent of the high point of the past three years reached last December. The greatest gains in the month were at shoe and men’s apparel stores, al though sales by other types of stores were also somewhat larger than was to be expected. The volume of sales in June was 12 per cent above June 1939, increases ranging from 4 per cent at women’s specialty shops to 17 per cent at shoe stores. During the preceding five months, sales averaged only about 1 per cent above a year earlier. Con sumers’ incomes have been substan tially larger this year than last but VARIATION 1936 1937 1938 1939 1940 spring buying was relatively limited, owing to unseasonable weather and general unsettlement. Stocks of goods at retail establish ments declined somewhat more than usual during June and at the end of the month were only 3 per cent larger than a year ago. Wholesale business in June was slightly smaller than in May. Sub stantial declines in the sale of shoes and jewelry and smaller reductions in electrical supplies and dry goods were almost offset by gains in the distribu tion of groceries, drugs, hardware, and paper. Sales in all lines but dry goods were larger in June than a year ago. Inventories of wholesale establish ments at the end of June were 4 per cent larger than last year. Freight-car loadings in the Alle gheny District increased more than seasonally in June to the highest level since the fall, and were unusually well sustained in early July. The increase from May to June reflected chiefly larger shipments of miscellaneous freight and of coal and coke, which ordinarily decline in this period. The movement of less than carlot freight was about the same as in May. Sales of new passenger automobiles in June were only 3 per cent smaller than in May and were nearly onethird greater than a year ago. Deal ers’ stocks of both new and used cars were at moderately high levels over most of June but subsequently have been reduced considerably as factory production has declined. The income of nonresort hotels in this district increased 9 per cent in June and was 30 per cent larger than a year ago. Page Five Hotel business Philadelphia Federal Reserve District Room occupancy.................... Percent of capacity used: June 1940................ 57.0 May 1940................ 57.9 June 1939................ 52.8 Revenue from: Guest rooms........................ F ood....................................... Other sources....................... Total revenue.................. June: per cent change from 1940 from 6 Month Year ago ago + o - 1 +25 -15 + 13 + 9 + 0 + 8 + 36 + 19 + 31 + 30 mos. 1939 Re quired Ex cess Philadelphia banks: 1940—June 1 15 $473.9 $220.5 $253.4 June 16-30 478.5 221.1 257.4 July 1-15 479.0 221.4 257.6 1939—July 0 0 + 0.1 - 3.1 - $0.1 - 0.1 - 0.0 - 16.6 +9 T otal.......................... Note circulation......... Member bank deposits U. S. general account. Foreign bank deposits Other deposits............. Total reserves............. Reserve ratio............... $197.3 361.0 659.8 32.1 72.9 10.9 962.1 84.0% —$2.9 + 0.7 - 8.1 + 4.8 + 8.2 - 7.1 + 12.0 + 0.8% -$16.8 + 44.5 + 161.2 - 0.6 + 44.9 + 2.4 +268.4 + 6.2% +8 +6 +8 Ratio of excess to re quired 115% 116 ” 116 * 1-15 345.4 187.7 157.7 84 ” 189.5 191.1 189.1 97.2 97.5 97.4 92.3 93.6 91.7 95 ” 96 ” 94 ” 157.1 95.2 61.9 65 ” 1-15 Reserves totaled $659,800,000 on July 24, having declined $8,000,000 in the last five weeks. The Treasury withdrew $16,000,000 from the deposi tory banks in this district and received $29,100,000 in cash on allotments to this district of $38,600,000 of new 2*4 per cent bonds of 1954-56. The net amount taken from the local market by Treasury operations, however, was only $8,400,000, as on other accounts government disbursements exceeded receipts. Other factors tending to reduce re serve balances were the heavier de mand for currency and a decline in float. Member banks gained funds in transactions with other districts and through payments from miscellaneous deposits at this bank. The principal change in the bill and Page Six One year 2.7 194.4 Country banks: 1940—June 1-15 June 16-30 July 1-15 1939—July Changes in— Five weeks Bills discounted.......... Bills bought................. Industrial advances. . U. S. securities............ Credit extended by reporting member banks increased in the past month to the highest point in recent years, as commercial loans continued to expand and investments were increased through purchases of new Treasury bonds at time of allot ment. The volume of deposits con tinues substantially larger than last year. The relative increase over a year ago in the reserves of all member banks in this district has been some what greater than that shown for the country as a whole. In the1 first fifteen days of July reserves averaged $668, 000,000, or considerably more than double the requirements against de posits. Held July 24, 1940 +5 Banking conditions. Member bank reserves (Daily averages; dollar figures in millions) Federal Reserve Bank of Philadelphia (Dollar figures in millions) $0.2 + *9.l security holdings of this bank was a de cline of $3,100,000 in governments to $194,400,000. This decline was due to a reduction in the proportion of the System Open Market Account allotted here and to sales of governments by the System early in the period. The loans and investments of the re porting member banks have increased $12,000,000 in the past five weeks to $1,192,000,000 on July 24. Among the changes shown were an expansion of $9,000,000 in holdings of direct gov ernments to $362,000,000, which re flected the new bonds purchased on subscriptions; increases of $5,000,000 in commercial loans and $4,000,000 in loans not specifically classified; and a reduction of $5,000,000 in holdings of corporate and municipal securities. The advance in commercial loans was in contrast to declines in the cor responding periods of the two preced ing years. These loans currently ag gregate $220,000,000, the largest vol ume in recent years, and are about 20 per cent more than a year ago. Deposits at reporting banks have declined $4,000,000 in the past five weeks to $1,760,000,000, as against a record high of $1,792,000,000 in the middle of May. This contraction re flected withdrawals from United States Government, State and municipal, and interbank balances, and partly offset ting gains in the deposits of individ uals and business concerns. The loans and investments of all member banks in this district totaled Reporting member banks (000,000’s omitted) July 24, 1940 Changes in— Four One weeks year* Assets Commercial loans................... $ Open market paper................ Loans to brokers, etc............. Other loans to carry secur... Loans on real estate............... Loans to banks........................ Other loans............................... 106 + 4 + 13 Total loans........................... $ 461 +$ 9 + *57 362 90 279 +$ 9 - 1 - 5 + *13 - 6 + 19 731 +$ 3 + *26 Government securities.......... Obligations fully guaranteed Other securities....................... Total investments.............. $ 220 31 23 30 50 +* + + - 1 5 1 1 2 0 0 + $37 + 5 + 2 - 2 + 2 0 Total loans & investments $1,192 + $12 + $83 Reserve with F. R. Bank. . . 492 - 2 Cash in vault........................... 20 0 Balances with other banks. . 204 - 17 Other assets—net................... 80 + 1 Liabilities Demand deposits, adjusted . $1,027 + $10 262 + 1 U. S. Government deposits. . 46 - 8 425 — 7 0 o 14 — 1 Capital account....................... 214 - 1 *On comparable basis. $2,342,000,000 on June 29, according to preliminary tabulations. Loans were increased $34,000,000 above the level of March 26 to $984,000,000, the largest volume since early 1935. In creases of $21,000,000 and $13,000,000 respectively were reported by banks in Philadelphia and by country banks. Supplementary data contained in weekly reports indicate that the ex pansion in this city was principally in commercial accommodation and in un classified loans. Investments showed virtually no net change in the second quarter of 1940; holdings of State and local govern ment securities increased $9,000,000, while corporates declined $8,000,000, and holdings of obligations of the United States Government were re duced about $1,000,000. The invest ments of Philadelphia banks were within 2 per cent of the highest point reached on any call date, but security holdings of country banks on June 29 were 12 per cent less than at the high point reported at the end of 1936. MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending— June 26 July 3 July 10 July 17 July 24 Changes in five weeks* Sources of funds: Reserve bank credit extended in district. . . Commercial transfers (chiefly interdistrict) . Treasury operations............................................ -5.6 + 9.9 +4.1 - 1.6 - 8.5 + 2.6 +0.8 -2.0 +2.2 + 1.8 + 5.6 + 3.0 - 1.1 - 2.2 -20.3 - 5.7 + 2.8 - 8.4 Philadelphia Federal Reserve District (Millions of dollars) Total................................................................... + 8.4 - 7.5 +1.0 + 10.4 -23.6 -11.3 Uses of funds: Currency demand................................................ Member bank reserve deposits........................ “Other deposits” at reserve bank................. Other Federal Reserve accounts..................... + 3.1 + 6.2 -0.9 -0.0 + 6.7 -11.4 - 2.5 - 0.3 -2.5 + 3.8 -0.3 -0.0 - 1.4 + 15.4 - 3.5 - 0.1 - 1.6 -22.1 + 0.1 - 0.0 + - Total................................................................... + 8.4 - 7.5 + 1.0 + 10.4 -23.6 -11.3 * Preliminary. 4.3 8.1 7.1 0.4 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes TOTAL Employment* Payrolls* (Indexes are percentages of the 1923-25 average taken Per cent as 100. Total and group in June Per cent June dexes are weighted propor 1940 change from 1940 change from index index tionately.) May June May June 1940 1939 1940 1939 All manufacturing Iron, steel and prods........ Non-fer. metal prods.. . . Transportation equip.. . Textiles and clothing.. . Textiles........................... Clothing.......................... Food products................... Stone, clay and glass. . . Lumber products............. Chemicals and prods........ Leather and products... Paper and printing.......... Printing...................... Others: Cigars and tobacco . . . Rubber tires, goods . . . Musical instruments. . EXCESS 38 ’39 DEPOSITS AT MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS 85 82 126 +3 + 20 +3 + 16 +2 + 12 -2 - 7 -3 - 9 +2 - 2 +2 + 2 +1 + 5 +9 + 6 -0 + 14 +2 - 8 +0 + 2 -1 - 3 00 83 76 108 104 76 61 94 82 99 89 64 80 67 +0 +0 +1 * Figures from 2,428 plants. + 3 - 1 + 15 82 103 156 59 72 67 97 115 77 56 106 81 105 96 62 93 68 Employeehours! June 1940—• percent change from May June 1940 1939 + + + + + 4 + 16 + 3 + 17 6 + 33 + 5 + 31 4 +22 + 1 + 19 0 + 9 — 2 + 18 0 - 8 - 2 -11 2 -10 - 2 — 10 5 - 2 - 0 -12 3 + 5 + 2 + 2 + 7 + 2 + 6 + 9 + 8 + 7 + 9 + 17 + 0 + 24 + 19 + 1 + 12 -11 - 1 + 6 - 1 + 7 - 2 +1 - 4 + i + 6 + 13 + 5 + 12 + 3 - 3 + 3 - 3 + 0 + 26 + 0 +24 t Figures from 2,188 plants. General Index Numbers 1600 COUNTRY __ BANKS Covering twelve branches of trade and industry Employment (Indexes are percentages of the 1932 average taken as 100. In Per cent dividual indexes are combined June change from proportionately into general in 1940 dex number.) index May June 1940 1939 1400 PHILADELPHIA BANKS 193 7 19 3 8 General index (weighted)... 193 9 194 0 Percentage change—June 1940 from June 1939 City areas* Manufacturing Employ ment Wage payments Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... Y ork....................... + 14 + 16 + 12 + 33 + 24 + 2 +2! +38 - 1 + 2 + 1 - 6 +ii + 1 ■ + 6 + 11 + 7 + i Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... Y ork....................... + + + + + + + + + 9 + 3 -12 +20 + 8 + 2 + 16 +20 Building permits (value) + + 25 58 72 42 + u - 28 + 228 - 46 + 438 + 29 - 26 - 21 +270 Debits trade sales + 2 + 9 - 4 + 17 + 0 -14 - 2 + 3 + o + 10 + 16 + 15 + 18 + 33 + 12 + 9 + 18 + 4 Manufacturing............................. Anthracite mining...................... Bituminous coal mining............ Building and construction........ Quarrying and non-met. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels............................................. Laundries....................................... Dyeing and cleaning.................. 111 133 66 101 55 110 +i +i -4 -2 +5 -3 133 98 +0 +1 110 +3 118 104 107 110 -0 -3 +3 +3 + 5 + 7 - 3 + 10 + 0 + 3 + 1 + 3 + 5 + 3 - 2 + 5 + 4 Payrolls June 1940 index Per cent change from May 1940 June 1939 159 +3 201 +4 +2 +1 +3 -4 + 13 + 16 + 13 + 17 + 7 69 190 78 211 158 -1 110 +1 +5 133 123 -0 120 -4 +3 +5 143 151 + 7 + + + + — + + 1 4 9 5 0 6 7 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES Of TRAOC AND INDUSTRY PERCENT +n + 17 + 8 + 12 + 8 PAYROLLS + 5 + 12 June 1940 from May 1940 i 0 2 4 0 1 1 0 1 9 1 0 3 + + + + + + + + 4 1 3 8 3 4 3 3 1 8 2 i 6 - 0 - 20 - 59 + 102 + 107 + 64 + 54 - 60 + 304 - 81 - 21 - 86 - 41 + - 6 0 2 3 7 -10 - 2 + 3 - 9 — 4 +30 - 5 * Area not restricted to the corporate limits of cities given here. + 8 - 1 - 2 + 1 - 8 - 1 - 5 - 8 + 15 - 1 EMPLOYMENT + 5 - 1 1934 1935 1936 1937 1938 1939 Page Seven RETAIL TRADE PHILADE _PHIA FEDEF AL RESERVE DISTRICT Index numbers of individual lines of trade and manufactures 1 PERCENT OTAL SALES Philadelphia Federal Reserve District jV (£r Adjusted for seasonal variation Not adjusted 40 Per cent change Unadjusted indexes reflect merely the actual change which may or may not lune April May June be typical. 1939 1940 1940 1940 DEPAR TMENT STC RES 100 June 1940 fro m Month Year ago ago 194C from June April May June 1939 1940 194C 1940 6 mos. 1939 SI LES W V7 60 Retail trade Sales Total of all stores.......................... Department............................ Men’s apparel............................ Women’s apparel....................... Shoe............................................... Credit............................................ V Yy___ -'V -->v0 ’ ^STOC s Index numbers: percentages of the 1923-25 average as 100 Adjusted indexes allow for the usual seasonal change in activity. Sr* v--x 75r 67 r 71 r 91 r 81 85 72 68 66 81 70 82 81 74 74 93 81 94 84p 75 81 95 95p 97p + 4 + 1 + 10 + 2 + 1S + 3 + + + + + + 12 12 14 4 17 14 + + + 3 4 4 4 — + 2 4 Stocks of goods 75 51 101 69 97 79 79 53 54 99 98 73 72 106 107 77p 52 97 70 106p 3 + 75r 65 81 r 83 r 96 81 74 84 65 74 60 71 96 92 80 105 88 104 84p 73 93 86 112p 'STOCKS 20 92p MENS APPAREL STORES 120 3 70 49 87 2 1) 66 89 79 81 55 54 99 98 78 76 108 103 72p 49 83 67 97p SALES '\/vY ____ 1 V V Rate of stock turnover 6 months—on annual basis (ac+ 2* 4.13 4.21 Wholesale trade 40 Sales 1* 4-1+ 6* + 5* 4* 4 + + 4 + 9* + 4 4 9* + 1* 8* + 0* 17* + 14* + 41* + 6* 0* 1* 0* WOMEN S APPAREL STORES 160 16* 0* 14* 16* 18* STOCKS •rdf Stocks of goods yA !fj 1* \ ( — 3* 12* + 3* — 1* 4 6* 0* -j- 12* + 1* + 12* + 2* — 6* Output of manufactures Pig iron................................................. Steel....................................................... Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies......... Locomotives and cars....................... Silk manufactures.............................. Woolen and worsteds........................ Cotton products.................................. Carpets and rugs................................ Hosiery.................................................. Underwear............................................ Cement.................................................. Brick....................................................... Lumber and products........................ Slaughtering, meat packing............ Sugar refining...................................... Canning and preserving................... Cigars..................................................... Pa per and wood pulp........................ Printing and publishing................... Shoes...................................................... Leather, goat and kid....................... Explosives............................................. Paints and varnishes......................... Petroleum products........................... Coke, by-product............................... SALES 60 140 43 61 r 58 68 61 72 74 76 72 70 84 80 117 112 80 11 12 17 68 74 62 35 36 19 352 470 478 70 69r 73 59 r 48 53 r 42 41 44 98 114 92 79 76 98 140 142 127 67 69 61 38 39r 38 29 30 r 27 102 111 24 70 94 72 90 142 41 69 107 76 90 101 S3 83 151 95 102 98 r 92 79 161 118 82 85 73 93 105 13 69 32 529 65 49 43 74 78 126 57 43 27 105 104 60 51 78 82p 113 96 83 80 93 r 91 108 126 91p 99 95 94 84 80 152 158p 122 135 * Computed from data unadjusted for seasonal variation. 91 40 25 37 32 _ 27 + 11 -12 + 63 + 14 + 12 + 4 + 15 - 6 + 7 - 7 - 6 - 6 + 3 -19 + 2 - 1 -17 +n -11 + 3* - 1 -16 + 5 -15 + 3 - 2 + 17 - 8 - 1 + 4 + 4 + 11 + + + + + 11 _ — — — — _ + 17 4 25 21 10 7 13 3 4 1* + 2 + 114 + 17 + + + 1 16 1 _ 11 — 10 + 13 + + + 1 5 42 85 41 69 75 36 62r 77 80 42 58 75 73 19 70 85 84 39 80 102 103 15 14 _ 15 21 62 + 21 74 78 + 118 20 37 35 4- 42 348 493 14 70 69 67 — 8 57 r 45 50 r + 5 42 44 40 107 89 — 7 94 18 96 79 76 — — 1 140 140 129 + 6 74 67 78 + 25 40 39 41 r + 8 28 27 28 r 0* 92 86 90 + 4 96 109 105 7 25 74 54 — 58 59 + 15 50 102 110 98 + 7 71 77 80 + 122 89 92 94 r + 12 102 135 98 — 95 r 90 — 4 102 93 96 + 285 83 83 85 84 + 6 152 160 + 39 95 123 152 126 + + + + + + p—Preliminary. 78 87 72 97 105 15 69 32 SALES VW/w ft L\ a 62 48 40 71 76 126 68 45 27 92 98 54 59 p 103 82 90 A~> s STOCKS 40 CF EDIT STOR ES 140 ! jV— > A 120 92p 94 1 V SAL ES 86 159p 135 r—Revised 40 1936 Page Eight \l 1937 1938 1939 1940
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