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THE BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA AUGUST 1, 1944 Productive activity in the country slack The decline in inventories at manufacturing ened slightly further from May to June, as the plants has continued well into the second quar output of factory products continued a gradual ter of the year, reflecting further liquidation of downward tendency from the record level of holdings of raw materials and goods in process. last November. Total employment in non-agri- The Department of Commerce estimated that cultural lines showed some gain in the month, total stocks in producing establishments at the reflecting principally a seasonal rise in the num end of May were about §200 million less than ber of workers employed in the transportation a year earlier and the smallest since the mid and utility industries. Factory employment de dle of 1942. Additional reductions in over-all inventories were predicted for this summer, creased a little further in June. although the Department indicated that chang Since July 1 the War Manpower Commission ing emphasis in parts of the war production has exercised supervision over employment program might be reflected in wide fluctuations shifts by male workers in an effort to overcome in certain munitions categories. the scarcity of labor persisting throughout a Reconversion is progressing very slowly, and few industries and in certain areas. Early in the month official estimates indicated that ap only in the case of approved programs inaugu proximately 200,000 additional workers were rated in areas where manpower is in adequate required in war essential industries and services. supply. The current shortage of steel, the still Shortages have become especially pronounced critical position of certain other raw materials, at steel mills, and in such lines as lumbering, and the difficulty of securing component parts have delayed the production of some authorized mining, and railroad transportation. items considered essential to the civilian econ Raw material supplies have continued to ease omy. Measures taken thus far to implement in a few instances, notably in the case of the the War Production Board’s plan for piecemeal light metals, aluminum and magnesium. But reconversion include the easing of regulations some forms of steel again are in short supply, on the use of aluminum and magnesium, per and large consumers have been directed to re mission to produce experimental models, and duce inventories to minimum working levels. authorization to place orders for machine tools. Reserves of copper still are insufficient to permit About mid-August the Board plans to put into the release of substantial tonnages for civilian effect a final directive, the “spot authorization use, as consumption continues high in war in order,” which would permit regional offices to dustries. The lumber situation has grown in relax limitation and conservation orders in the creasingly tight, necessitating sweeping Gov case of individual manufacturers having muniernmental controls to assure meeting the more tions-free facilities and manpower necessary to essential needs over the remainder of this year. proceed with civilian production. Page One The Economy of the Third Federal Reserve District Pre-War Trends in Factory Employment—1899-1939 Manufacturing is the cornerstone upon which the economic life of the Third District has been built and upon which much of its future pros perity depends. The factories of this district still employ one-third of its working population despite the growth of numerous service indus tries such as retail trade, transportation, public utilities and others. Manufacturing employment in this district increased about one-sixth in the four decades of the present century when other areas were undergoing rapid industrialization. There were pronounced disparities between the trends of individual industries. Some grew as much as 300 per cent, others declined as much as 80 per cent. Such differences can not be ignored in an appraisal of postwar prospects because the past trend of each industry is one of the best indica tions of its future course. In the absence of district data, it has been necessary to use figures for individual industries of the state of Pennsylvania. About 70 per cent of Pennsylvania’s manufacturing employment falls within the district, and with certain excep tions, such as electrical machinery, glass, coke, and steel works and rolling mills, the major por tion of each of the leading industries, listed in the accompanying table, is in the district. AVERAGE NUMBER OF WAGE EARNERS IN PENNSYLVANIA’S PROMINENT MANUFACTURING INDUSTRIES: 1899-1939 Industry 1899 Large expansion Women’s clothing............................................. 8,300 Electrical machinery, apparatus and supplies.............................................................. 7,800 Bread and bakery products............................ 7,400 Men’s clothing................................................... 17,200 Knit goods........................................................... 21,600 Petroleum refining............................................ 3,300 Canning and preserving.................................. 2,200 1939 Per cent change 32,600 +292 29,600 25,100 50,100 56,900 8,200 5,200 +279 +239 +191 +164 +148 +135 Moderate expansion Silk and rayon goods........................................ 21,000 36,700 Boots and shoes, except rubber..................... 9,100 14,700 Steel works and rolling mill products........... 94,800 141,800 Confectionery.................................................... 5,200 6,000 + 75 + 61 Decline Shipbuilding....................................................... Glass..................................................................... Clay products and non-clay refractories... Leather—tanned, curried, and finished___ Coke..................................................................... Woolen and worsted goods............................. Blast furnace products..................................... Cotton goods............ .................................. j.. 7,100 19,400 15,700 13,400 9,300 24,600 16,100 15,600 6,600 16,500 12,900 8,100 5,500 12,800 5,700 3,200 - 7 15 18 39 41 48 65 80 Total—nineteen industries.................... 319,100 478,200 + 50 Total—all manufacturing...................... 733,800 858,3Q0 +17 Page Two The nineteen industries shown in the table comprised 43 per cent of the factory workers in 1899 and 56 per cent in 1939. With a few exceptions for which complete data are unavail able, the table includes the most prominent industries in 1939. Because of the widespread interest in the prospects for post-war employ ment, number of wage earners is used in this analysis of pre-war industrial trends. Roughly, the industries may be divided into (1) those experiencing large expansion, (2) those undergoing moderate growth, and (3) those experiencing decline. Industries with large expansion 1899 to 1939 The women’s clothing industry ranks first among Pennsylvania’s leading industries in re spect to rate of growth since the beginning of the century. In 1899, it employed 8,300 work ers; by 1939 employment reached 32,600—a threefold increase. However, as will be seen in Chart I, the expansion has been by no means steady. The market for women’s ready-made apparel began to grow rapidly about 1880 with the rising importance of mechanization, heavy immigration of European labor, and a rising standard of living as more of the country’s rich resources were successfully exploited. Further more, with improved means of transportation and communication, style changes quickly pene trated every part of the country. The rapid in crease in this industry both in Pennsylvania and in the United States between 1899 and 1909 largely reflected the continuation of these devel opments. By the outbreak of the First World War, the trend for the country as a whole began to level off, for by this time women’s ready-made clothing had been accepted by virtually all classes. Very little stimulus was received from the prosperity of the twenties. In Pennsylvania, on the other hand, the industry declined from 1909 to 1919, and like the industry throughout the country, shared little in the prosperous decade which followed. The depression beginning in 1929 brought about a contraction in the industry which was more serious nationally than locally. The great- WOMENS CLOTHING CHART 1 GROWING INDUSTRIES KNIT GOODS PENNSYLVANIA 1899 TO 1939 INDEX OF EMPLOYMENT I899AVG.*I00 ELECTRICAL APPRATUS BREAD AND BAKERY PETROLEUM REFINING CANNING AND PRESERVING BOOTS AND SHOES CONFECTIONERY SILK AND RAYON STEEL WORKS AND ROLLING MILLS MENS CLOTHING 1899 1909 1919 ’29’33 1939 ’29’33 1939 1909 1919 '29’33 1939 Page Three est expansion in Pennsylvania occurred between 1933 and 1939, the number of wage earners in creasing 26 per cent. To a large extent this gain was the result of firms moving into those sections of the state where large supplies of inexpensive and relatively unorganized female labor were available. Since labor represents a large part of over-all costs in the manufacture of women’s clothing, such labor offered a genuine competitive advantage. bakeries and afforded women many new oppor tunities and interests outside of the home. But for a shift in dietary habits over this period which reduced per capita bread consumption, expansion of this industry would have been even greater. The trend of the industry in Pennsylvania, as shown in Chart I, is almost identical with that of the country as a whole—steady growth inter rupted only slightly by the decline of consumer Ranking next to the women’s clothing indus purchasing power in the early thirties. Migra try in rate of growth over the past forty years is tion to gain competitive advantages is impos the electrical machinery industry. This includes sible since the perishability of its products neces the manufacture of products which in a short sarily limits competition to local markets. For span of time have revolutionized industrial and this reason the future of the industry in Penn everyday life. The products include equipment sylvania will depend largely upon the nature required by electrical power companies, tele and size of its population and the amount and phone and telegraph companies, broadcasting distribution of consumer incomes. Owing to stations, railroads, hospitals, and also radios, physiological limitations, however, a continuous phonographs and some household appliances. It rise in the standard of living will not bring about is essentially a producers’ goods industry. In a proportionate increase in this industry. ventions of new types of equipment, constant Men’s clothing has become increasingly im improvements in existing equipment, and price reductions made possible by the development of portant in Pennsylvania’s industrial structure. large scale production methods have contrib Employment in this industry increased 190 per uted to an ever-increasing demand for these cent in Pennsylvania between 1899 and 1939 in products. Thus, tremendous expansion charac contrast to 90 per cent for the country as a terized the industry over the first three decades whole. It will be seen in Chart I that prior to of this century, raising employment over 500 1919, Pennsylvania followed the almost level per cent in Pennsylvania and almost 700 per trend of the United States, but from that year to 1939 it expanded rapidly and consistently. cent for the country as a whole. Labor difficulties in New York City sent many The depression temporarily halted this firms to Pennsylvania, and particularly to growth, reducing employment by about 50 per Philadelphia. cent both in Pennsylvania and in the United Philadelphia has benefited by its proximity States. By 1939, the industry on a nation-wide basis had recovered about half of this loss but to New York, the center of garment manufac Philadelphia specialized in men’s in Pennsylvania it regained less than one-fifth turing. of its depression loss. Nevertheless, the future clothing of intermediate quality but in recent of this industry is limited only by the ability to years the price range has been broadened to devise new and better products. For unlike an include both high- and low-priced clothing. industry such as women’s clothing, its potential Gains at the expense of some other clothing cen market is virtually unlimited. At the same time, ters also reflect a policy of manufacturing un the problem of extreme cyclical fluctuation is a branded products on which the retailers get serious one not only for the industry but for more substantial mark-ups. areas in which it plays a large part. The knit goods industry of Pennsylvania also Third among Pennsylvania’s leading indus has expanded rapidly during the past four tries which have experienced large growth is decades. Knit goods include full-fashioned and the bread and bakery products industry. De seamless hosiery, knitted cloth, knitted under mand for the products of this industry is rela wear, knitted outerwear, and gloves and mit tively inelastic, and its development has been tens. Of these, hosiery accounts for about 60 contingent chiefly upon the decline of home per cent of the total employment in the industry. baking and the growing urban population. Ur To this important component may be attributed banization increased the number of persons much of the growth of the industry both nation within reach of marketable areas of local ally and locally. Page Four It will be noted in Chart I that this industrymade steady progress in the United States over the first three decades of this century but even better progress in Pennsylvania. Growth before 1919 reflects normal increases in consumption which grew out of the expanding population and rising standards of living. However, the expansion in Pennsylvania, between 1919 and 1929, was largely a result of the rapid strides made by the full-fashioned hosiery branch of the industry after the First World War. In this period, per capita consumption of women’s fullfashioned hosiery increased more than three fold, from 1.8 pairs per year to 7.6 pairs. Style changes in this period were largely responsible for this increase. Shorter skirts gave hosiery new emphasis; sheerer hosiery, made of silk, which became fashionable required frequent replacement; and the development of varied shades called for hosiery to match different costumes. Per capita consumption of full-fashioned ho siery, stimulated by price declines, continued to increase over the thirties, reaching 10.4 pairs per year in 1939. Pennsylvania, however, did not benefit from this expanded market to the same extent as the country as a whole. In fact, the knit goods industry in this state had recov ered only half of its depression losses by 1939 while in the rest of the country it was consider ably above its 1929 level. The onset of the depression brought extreme price competition to the hosiery industry, and to survive, every opportunity to cut costs was ex plored. Thus, the situation in Pennsylvania is largely attributable to the migration of the in dustry to southern states to take advantage of cheaper labor. The average wage in Pennsyl vania hosiery mills was 45 cents per hour in 1933 as compared with 32 cents in North Carolina. Furthermore, tax exemptions and free factory sites were offered as special inducements by certain localities. Realizing the seriousness of southern compe tition, northern manufacturers and the union embarked upon a rehabilitation program in the late thirties. In order to prevent further declines in this area, the union agreed to accept wage reductions on the condition that such savings would be utilized to buy new equipment in order to raise general operating efficiency. The number of wage earners in the petroleum of Pennsylvania increased refining industry about one and one half times between 1899 and 1939. In comparison with other Pennsylvania industries this appears to be a rapid rate of growth but when contrasted with the increase of slightly over 500 per cent in the industry for the United States as a whole, it becomes less sig nificant. Petroleum refining in this state is con centrated along the Delaware River from Phil adelphia to Marcus Hook where oil tankers may unload in deep water and large markets are readily accessible. The development of the automobile in the first two decades of the twentieth century accounts for the tremendous expansion in refining both locally and nationally. Subsequent to 1919, the trend of the industry in Pennsylvania leveled off while the national trend continued upward as consumption attained new heights, interrupted only temporarily by the early depression years. Pennsylvania’s position is explained by the fact that most refineries built since 1919 have been located to take care of other growing markets— in California, Texas, New Jersey, and Ohio. Petroleum consumption at a high level will undoubtedly continue in the future. Pennsyl vania’s share of the refining industry will be contingent upon the portion of the total market falling within a radius of her refineries and cheap methods of transportation to keep her re fineries supplied with crude oil. The growth of the canning and preserving in dustry reflects changes in living habits accom panying increased urbanization of population. The products of this industry include canned and pickled fruits and vegetables, preserves and jams, canned and cured fish, and quick frozen foods. Canned products are overwhelmingly the most important and thus are largely respon sible for the trend of the industry. Improvement in technology in the canning branch of the industry was an important factor in widening the market, first through a better product which eliminated the original prejudice against canned goods and secondly through making possible a tremendous variety of out-of season food products. Furthermore, productiv ity was substantially increased so that number of wage earners considerably understates the real growth of the industry. Food processing plants must be located near their source of raw materials. Pennsylvania with its wealth of diversified fruit and truck farms holds fourth place among the states in Page Five value of products although it ranks ninth in number of wage earners. It will be seen in Chart I that employment in Pennsylvania grew more rapidly than in the United States between 1899 and 1909 and also between 1933 and 1939. Potential markets arising from population growth and higher incomes may be supplied more and more by fresh foods stored in freezing lockers. However, further development of new products such as commercially frozen and de hydrated foods may offer avenues for expansion. Industries with moderate expansion between 1899 and 1939 • Thus far in the twentieth century, Pennsyl vania has led the rest of the states in production of silk and rayon goods. In 1939 almost onethird of the workers in this industry were em ployed in Pennsylvania. Its products of yarn, thread, and broad and narrow cloth more than filled the needs of the knit goods and clothing industries located in this state. The depression caused a sharp setback to the expansion of the silk and rayon industry in Pennsylvania. Employment declined 9 per cent in the United States in contrast to 20 per cent in this state. Moreover, the industry in Pennsyl vania continued to decline while nationally it recovered somewhat after 1933. This situation is due largely to a shift of the industry to the South. North Carolina, South Carolina, and Vir ginia increased their share of total employment from about 4 per cent in 1929 to more than 25 per cent in 1939 while Pennsylvania declined from 47 per cent to 31 per cent. Obviously the industry is still of great importance in Pennsyl vania, but its failure to hold its own here in spite of its proximity to large local markets is of serious concern. Over the first two decades of the twentieth century, Pennsylvania was the leading state in the leather tanning industry with a well-devel oped market in Philadelphia. This factor and proximity of large consumer markets stimulated development of the boot and shoe industry. It will be seen in Chart I that up to 1919, the Penn sylvania shoe industry paralleled that of the United States. Prior to 1919, very little rayon was produced commercially, so the growth of the silk and rayon goods industry was almost wholly attrib After 1919, however, the industry suffered a utable to silk. In the nineteenth century, the decline which was far more pronounced locally silk industry had its beginning in Paterson, New than nationally. The local decline was due not Jersey. Technological advances toward the end so much to depressed conditions in the industry of the century, however, made possible the use as to actual migration of the industry to the of less skilled labor, and silk mills began to Middle West following a shift in source of raw spring up in the nearby anthracite and cement materials and markets. Leather tanning ex towns of Pennsylvania where a plentiful supply panded in those areas having easy access to the of female labor was available. Labor difficulties by-product hides of the large meat-packing in Paterson around 1910 and thereafter, re houses of Chicago, and the rapid development sulted in actual migration of mills from New of the West as a whole gradually altered the Jersey to Pennsylvania. These two develop pattern of consumer markets. Thus over the ments explain the more rapid expansion of the twenties, Pennsylvania fell behind Illinois and industry locally than nationally during the first Wisconsin in the number of wage earners em two decades of the twentieth century. ployed in the shoe industry. During the twenties, silk consumption in the United States reached its peak while rayon con sumption more than doubled. Since the process ing of rayon is similar to that of silk, the silk and rayon weaving industry of eastern Pennsylvania rapidly adopted the new synthetic yarn. The products of this industry found a ready market in this area for the manufacture of clothing and knit goods. Furthermore, over this decade, Pennsylvania continued to expand at the ex pense of other localities—primarily Connecti cut, New Jersey, and New York. Pennsylvania gained 8,000 workers while the industry as a whole gained only 4,000. Page Six Pennsylvania staged a remarkable recovery between 1933 and 1939—employment increased 46 per cent in contrast to 14 per cent for the country as a whole. This growth is due to the nature of the industry in this state—Pennsyl vania specializes in misses’ and children’s shoes. Consumption of this type of footwear increased steadily between 1934 and 1939, a total increase of 22 per cent compared with 18 per cent in per capita consumption of all types of shoes. Penn sylvania’s share of the total production of this line of footwear rose from 13 per cent in 1930 to 19 per cent in 1938, indicating that production of misses’ and children’s shoes was concentrat- mg more and more in this area. By specializing in a rapidly growing line, the industry here is more than holding its own. nity devoted almost entirely to confectionery production. The Hershey chocolate plant is one of the largest in the world. The largest of Pennsylvania’s industries is Like other food industries, demand for the products of the confectioner has been influenced by the long-time growth of population, less home preparation of foods, and rising income. Increasing consumption was stimulated also by the multiplication of retail outlets, populariza tion of five and ten cent bars and improved packaging which enlarged marketable areas for branded products. steel works and rolling mills. . In the nineteenth century, Pennsylvania offered the ideal com bination of raw materials and markets for this industry, and by 1899 it had become well estab lished in the state, accounting for over half of the workers employed in steel works and rolling mills of the United States. Between 1899 and 1909, the industry grew rapidly in response to the growing demands for industrial equipment and construction mate rials. The First World War resulted in even greater demands for the products of this indus try, but at the same time afforded a stimulus to areas outside of Pennsylvania. The outcome was a more rapid expansion for the industry in the United States as a whole than in this state. The more rapid growth of the industry na tionally than locally is due to its development in the West, notably Chicago. The industry’s peak employment of 76,000 workers reached in 1919 reflects the abnormally large demand of a boom year. By 1929 employment had declined to 64,000, due to advances in mechanization. The contraction of income during the depression years had a marked effect on this industry as a whole. By 1939, employment in Pennsylvania showed some improvement. With almost 60 per cent of its output consisting of molded chocolate bars and penny goods, in contrast to less than 30 per cent in the United States, the local industry was in a much better position to ride out the depression and to benefit from the first increases in purchasing power. Steel producing centers outside of Pennsyl vania attained greater prominence over the decade of the twenties. Employment in the in dustry as a whole increased 5 per cent but de clined 15 per cent in Pennsylvania. The intro duction of by-product coke in 1915 divorced the steel industry from its long-standing dependence upon Pennsylvania’s Connellsville coke which was the standard fuel as long as only the bee hive method of coking was known. Steel-pro Declining industries—1899-1939 ducing centers along the Great Lakes had the advantages of low cost ore transportation from Shipbuilding in the United States has been a the Minnesota fields and of nearness to one of feast or famine industry. Production fluctuates the greatest steel consuming centers—the auto from one extreme to another, rising to great mobile industry in Michigan, which was also a heights in times of war and contracting sharply rich source of scrap. Furthermore, during the in times of peace, owing to our inability to com twenties steel consumption shifted to a large ex pete with the low costs of foreign builders. It tent to light steel used for automobiles, refrig has been estimated that in 1931 American-built erators, washing machines, and other durable merchant ships cost 50 to 60 per cent more than consumers’ goods. Pennsylvania, on the other similar ships built abroad. In view of this, ship hand, was primarily a producer of heavy steel building in the United States has been dependent used for industrial equipment. It was this fact, largely upon naval construction and Govern however, which contributed to its recovery after ment subsidies to the merchant marine. What the steep slump of the early thirties since re conditions in this industry will develop after the vival first manifested itself in renewal of obso war, of course, cannot be predicted at this time. lete and worn out plant equipment. The Delaware River Valley was an important The confectionery industry is of long standing shipbuilding center as far back as the Colonial in Pennsylvania, dating back at least 150 years. period, and its shipyards were among the first to It has tended to concentrate in the larger cities pioneer in the construction of steel hulls. The of the state, particularly Philadelphia, to keep opportunities for westward expansion in the down costs of distribution and to take advan United States diverted efforts from shipbuilding tage of the unskilled female labor. However, a and maritime affairs. From 1899 to 1909, as notable exception is Hershey, a small commu shown in Chart II, shipbuilding other than that Page Seven done in Government establishments continued on its downward course but the decline was greater in Pennsylvania than in the United States. The First World War gave the industry a tremendous stimulus. The Government entered the business when it created the Emergency Fleet Corporation to buy, build, and operate ships. Shipways were increased from 184 to 1,200 and during the war period 2,300 ships were built, more than were constructed in the twenty years preceding and the twenty years following the war. All ship construction on the ways at the time of the Armistice was completed, which explains the sustained high level of em ployment as late as 1919. The expansion of em ployment between 1909 and 1919 was greater in Pennsylvania than in the United States— about 1500 per cent as compared with 850 per cent. Post-war efforts to maintain shipbuilding ac tivity met with little success. The United States Shipping Board was authorized in 1920 to make loans for private ship construction and the Post master General was authorized to let mail-car rying contracts to merchant ships, but these efforts to stimulate demand were woefully inad equate in view of the huge legacy of war-built tonnage. In Philadelphia, the Hog Island ship yard and Cramp’s shipyard were closed. The major activity still carried on was the construc tion of oil tankers by the Sun Shipyards at Ches ter and ship repairing by the Delaware River shipyards of Pennsylvania, Delaware, and New Jersey. Capital to revive shipbuilding was offered under favorable terms by the Jones-White Act of 1928 but again the results were disappoint ing. By 1929 employment in Pennsylvania and the United States was about 90 per cent below the 1919 levels. The Merchant Marine Act of 1936 provided more effective means for stimulating the indus try. A definite program was set up to build 500 vessels at the rate of 50 a year and the Govern ment paid for a substantial part of the costs of construction under the national defense budget. The first contracts under the ten-year program to replace the obsolescent merchant marine were let in 1938. Pennsylvania benefited but not to the same extent as the remainder of the United States. Employment in Pennsylvania in creased about 20 per cent between 1933 and 1939 in contrast to 50 per cent in the United States. Page Eight Glass manufacturing is a prominent industry of Pennsylvania because of its abundance of fuel and raw materials. Although container glass manufacturing is one of the leading industries of the southern New Jersey section of the Third District, most of the glass manufacturing of Pennsylvania is centered in the Pittsburgh area, outside of the Third Federal Reserve District. Marked technical progress was made over the twenties. One of the most important develop ments was the perfection of a continuous process for manufacturing plate and window glass. By 1929, about 80 per cent of window glass was produced by the new process. In the container branch, productivity increased 42 per cent be tween 1923 and 1931. Wage earners per unit of product for the industry as a whole declined at an average annual rate of 5.6 per cent over this decade which accounts for a large part of the decline in employment. In recent years the glass industry has introduced a variety of new products, such as safety glass, building blocks, and fiber glass products. These developments have assisted materially in bringing about a re covery since 1933 and may be expected to play a significant part in determining the future of the industry. The clay and pottery industry covers a large variety of products made from a common raw material—clay. The principal products are: building materials, such as brick, terra cotta, and tile products; refractories; chinaware and sanitary ware; and porcelain products. A large proportion of the output is used in building and construction, and therefore, production is char acterized by pronounced cyclical irregularity. Pennsylvania has a rich supply of mineral resources suitable for the production of these products. Refractories, used in the metallurgical industries, are especially important in this state. In 1939, refractory manufacturing employed about one-half of the workers in the clay and pottery industry of Pennsylvania in contrast to less than one-fifth in that of the United States. The industry grew rapidly during the nine teenth and first part of the twentieth centuries. Behind this expansion was the growing demand of the West for building materials, drainage pipes, street paving materials, and the demand resulting from the general rise in the standard of living throughout the country. As would be expected, the industry grew more rapidly na tionally than locally between 1899 and 1909. i ( 11 . ' CHART II BLAST FURNACES WOOLENS AND WORSTEDS DECLINING INDUSTRIES PENNSYLVANIA 1899 TO 1939 INDEX OF EMPLOYMENT 1899AV& = 100 COTTON GOODS SHIPBUILDING u.s | If CLAY AND POTTERY GLASS 1909 1919 29'33 1939 1909 1919 '29'33 1939 LEATHER TANNING 1909 1919 ’29’33 1939 Page Nine Following 1909, there occurred a decline in Per capita consumption of leather has been construction activity which was further accen declining, especially since 1919. The automo tuated by the restrictions imposed by the war. bile has diminished the demand for shoe and More important for the brick and tile division, harness leather, unit drive of industrial equip however, was the development of steel re-en ment has reduced the market for belting leather, forced concrete construction. By 1910 building and the use of substitute materials, such as fab brick was meeting growing competition from rics, plastics, and rubber, in shoe manufacturing Portland cement of improved quality and re has made serious inroads on the leather market. duced cost. Since brick making is a local indus try consisting of small establishments with small Competition was intensified when shoe manu overhead costs, employment responds rapidly to facturers and meat packers entered the indus changes in demand. These developments con tributed largely to the contraction in employ try. The former have gone into tanning to sta ment of the clay and pottery industry of the bilize their raw material costs and the latter to United States between 1909 and 1919, shown in increase revenues from the sale of by-products. The rise of heavy leather tanning in the Middle Chart II. West to gain the advantage of proximity to the meatpacking houses took place during the first Although building was largely curtailed over two decades of this century. The westward shift the war period, in certain areas, notably eastern was facilitated by the change from tanbark to war centers, including Philadelphia, there oc tannin extract which reduced the dependence curred an expansion of construction activity of tanneries upon local forest products. These which continued into 1919. Moreover, there was developments contributed to the declining em an increase in the demand for refractories, ployment in Pennsylvania tanneries between needed to enlarge metallurgical capacity. For 1909 and 1919. these reasons, the industry in Pennsylvania ex perienced a moderate growth over this period. From 1919 to 1939, the leather industry of Pennsylvania paralleled that of the United The dependence of this industry upon con States. High prices, during the First World War struction is further illustrated by its expansion and immediately after, caused over-expansion of over the twenties and subsequent contraction tanning facilities and the period of readjustment during the business depression of the thirties. was prolonged by the declining per capita con Although it shared in the recovery of the late sumption of leather. thirties, by 1939 the industry both in Pennsyl vania and in the United States was still below its Coke is another declining industry in Pennsyl 1899 level of employment. vania. In 1899, the state employed 55 per cent of the country’s coke oven workers, in 1939 only The leather industry has encountered numer 25 per cent. A revolution in technology is the ous difficulties in the first four decades of the explanation of this decline. present century. Since the supply of hides is de pendent upon meat consumption, it is frequently In 1899 coke was manufactured in beehive far out of line with demand. The foreign supply ovens which required high grade bituminous has also been uncertain, but in recent years im ports have supplied an increasing portion of our coal to make good blast furnace coke. Pennsyl needs. In kid and goat tanning, so important in vania had the advantages of good coking coal the vicinity of Philadelphia, about 98 per cent and a ready market in its iron and steel industry of the skins are imported. Uncertainty of sup within easy reach of the coal fields. Therefore, ply, and declining imports as a result of the de it is not surprising that its coke industry grew velopment of foreign tanning industries and war rapidly between 1899 and 1909. shipping restrictions have further complicated the problem of raw materials. Buying raw mate The revolutionary change in technology began rials in foreign markets plus a slow manufac at the time of the First World War when the by turing process forces the tanner to make finan product oven came into general use. This method cial commitments long in advance of the sale oi of coke manufacture utilizes various grades of finished leather. These two factors have led to bituminous coal as a raw material and permits tremendous price fluctuation in both raw mate the recovery of gases from which a vast variety rials and finished products. of valuable by-products are manufactured. Page Ten Thereupon, coke plants were established in other areas that supplied bituminous coal and afforded markets for metallurgical coke and by product gas. This explains the declining trend in employment in Pennsylvania between 1909 and 1919 in spite of continued growth for the country as a whole. Over the next decade Pennsylvania continued to lose, relative to the United States as a whole, and the industry in this state replaced most of its beehive with by-product ovens. A declining de mand for blast furnace coke with improved effi ciency of fuel utilization and the growing use of ferrous scrap in steel manufacturing largely ac count for the general decline in employment over this and the next decade. In 1913, 2,173 pounds of coke were required to produce one net ton of pig iron and ferro-alloys in contrast to 1,781 pounds in 1940. Also partially responsible for declining employment was a substantial in crease in productivity of coke oven operation and cyclical contraction of demand for metal products in the thirties. The woolen and worsted industry, like leath er, encountered numerous problems which re tarded its growth, particularly after the First World War. The industry prospered between 1899 and 1919. With the rising standard of liv ing, per capita adult consumption of wool piece goods increased from 5.7 square yards in 1899 to 7 square yards in 1909, and the abnormal con ditions of the war brought about an even greater increase in demand. By 1919 the war demand had disappeared and for the country as a whole employment was only slightly above the 1909 level. In Pennsylvania, employment was con siderably below 1909 owing largely to a contrac tion of 56 per cent in output of worsted suitings and dress goods and of 34 per cent in output of yarns. After the First World War per capita con sumption of wool piece goods turned downward and by 1929 had fallen to less than 4 square yards. Closed automobiles and better heated buildings made woolen clothing unnecessary, and other fabrics, particularly rayon, gained in popularity. However, for some time the indus try was not responsive to consumer demand and lighter woolen fabrics were not developed until a substantial part of its markets were lost to competitive fabrics. Over this period an increasing proportion of the industry’s output consisted of goods subject to short-run style changes which required sub stantial adjustments in equipment. These con ditions intensified the problem of excess capacity built during the war boom. In Philadelphia, the war had stimulated the development of special ized weaving mills which did no spinning. Few of these became integrated in the following years and they were seriously affected by the mill liquidation of the late twenties. Techno logical developments, particularly the automatic loom, increased productive capacity and re duced employment. The competitive position of those firms which did not keep pace with these improvements was weakened further by the problem of obsolescence. The depression in the early thirties eliminated some of the excess capacity. As shown in Chart II, considerable recovery was made on a na tional basis between 1933 and 1939 although to a much lesser extent in Pennsylvania. Undoubt edly the migration of mills from Pennsylvania to Rhode Island and other New England states, begun in 1919, was partially responsible for this. The blast furnace products industry has not declined as rapidly as the falling employment trend suggests because productivity has in creased tremendously during the past four decades. Larger furnaces have increased ca pacity three and four fold with only a slight in crease in the size of crews required to operate them. Operating efficiency has been raised by such developments as improved burdening prac tices, higher temperatures, and greater mechan ization. Between 1899 and 1909 the greatest in crease in output occurred—79 per cent—to meet the increasing demand for metal products for industrial expansion. Yet employment declined both nationally and locally because productivity was almost doubled during this period. Production was 20 per cent higher in 1919 than in 1909 but productivity failed to make rapid strides over the war years and employ ment increased slightly. Huge wartime demands called inefficient plants into production and other plants were unable to halt production to install improvements. The depression of 1921, however, afforded an opportunity for plant im provement and the Department of Labor esti mates that by 1926 almost all plants had mod ernized to the extent of eliminating the old hand methods of casting and charging. The decade of 1919 to 1929 recorded the greatest increase in productivity. Wage earners per unit of product declined at an annual rate of 8.7 per cent, a record surpassed only by the automobile industry. Page Eleven Other factors that accentuated the decline of employment over these years were increased substitution of scrap for pig iron in steel mills, and improved methods of steel manufacture which utilized less pig iron per ton of steel. Output fell rapidly in the early years of the depression. By 1933 it was 70 per cent below the 1929 level and employment declined 50 per cent. Some recovery was made by 1939 but Pennsylvania lagged considerably behind the United States as a whole. The cotton goods industry is the only one of the prominent industries of Pennsylvania that has declined steadily from 1899 to 1939. It had been established here, largely in the Philadel phia area, in the 19th century with the aid of experienced immigrant labor. The industry spe cialized in the finer types of cotton goods— fancy woven fabrics, lace, lace curtains, and tap estries. Most Philadelphia firms did weaving only and they were smaller than the average for the industry as a whole. The rise of cotton manufacturing in the South which had the advantage of lower cost labor spelled the decline of the industry in Pennsyl vania as well as New England. Although the southern mills first specialized in coarse cotton goods, it was not long before they entered the finer goods branch. Between 1899 and 1909, the combined production of fine woven fabrics of Georgia, North Carolina, and South Carolina in creased from less than 10 million square yards to over 100 million square yards. Production in Pennsylvania, on the other hand, increased from 31 million to 33 million square yards. Produc tion of some items such as ticking, denims, cottonades, and yarns showed actual decreases in Pennsylvania. Between 1909 and 1919 production of woven goods in Pennsylvania decreased 29 per cent and yarns 31 per cent, in contrast to decreases of 6 and 13 per cent respectively in the United States. By this date severe contraction in capac ity had taken place in this state. Total spindles in Pennsylvania declined from 307,000 in 1899 to 209,000 in 1919 while looms were reduced from 7,000 to 4,000 over this period. The south ern mills had created more capacity than was warranted in view of the demand for cotton goods but because they were more modern and could draw upon cheaper labor, they held a superior competitive position over the northern mills. Page Twelve Despite the availability of technological im provements, many northern firms were unable to take advantage of them because of inade quate financial resources, and owing to the de pressed condition of the industry very little out side capital was invested. As seen in Chart II, both Pennsylvania and the United States fol lowed a downward trend over the decade of the twenties and into the depression years. With the upturn in consumer incomes in the latter half of the thirties, consumption in creased. Nationally, the industry benefited from this, but in Pennsylvania employment continued to decline. In a long established industrial area like Penn sylvania, decline of certain industries is inevi table. Industrial decentralization is stimulated by such developments as the discovery of nat ural resources, the westward movement of pop ulation, the extension of electrical power distribution lines, technological changes, mech anization of manufacturing processes, and im proved transportation facilities. Industries will naturally gravitate to low cost areas. If fuel or power is a large item in the cost structure as in glass, aluminum, paper, and cement manufacturing, areas with newly devel oped coal, petroleum, or natural gas resources offer a strong attraction to these heavy fuel con suming industries. On the other hand, low wage areas are especially attractive to high labor cost industries such as full-fashioned hosiery and cot ton textiles. Decentralization is facilitated by im proved technology which permits utilization of lower grade raw materials as in coke manufac turing and by mechanization which reduces the dependence upon skilled labor as in glass manu facturing. Improved transportation facilities are beneficial to both old and new industrial centers because the raw materials of larger areas are made available and larger markets can be reached. Economic activity is always in a state of flux. In the foregoing discussion it has been observed how some Pennsylvania industries have been employing more workers and others fewer. At the same time more and more workers have found employment in service activities which have been attaining increased prominence. An other development, not revealed by this analysis, is the rise of new manufacturing industries, such as radio, plastics and synthetic fibers. These lines, as yet small in comparison with the well established industries, will be analyzed in a forthcoming study. The future of manufactur ing in Pennsylvania depends upon efficient util ization of all resources at her disposal. With good management and plant modernization the available resources can be used to produce a wide range of new and improved products for which local resources are particularly adapted. Before attempting a more specific appraisal of postwar prospects of manufacturing in this district it would be well to inquire how the war affected our industries. This will be the subject of the next study. Business and Banking Industry and trade. Industrial production in the Philadelphia Federal Reserve District de creased somewhat in June, reflecting reductions in the output of both factory products and fuels. The decline in manufacturing was attributable to lower activity in certain heavy industries, particularly transportation equipment. In non durable goods lines output was maintained at about the May level. Total productive activity in the six months ended June was virtually un changed from a year earlier. In this period fac tory operations approximated those prevailing in 1943, production of solid fuels was substan tially greater, but the output of crude petroleum showed a pronounced decline. A growing shortage of manpower in Philadel phia, the adjacent industrial counties of Chester, Delaware, Montgomery, Bucks, in Pennsylvania, Camden, Gloucester and a small part of Burling ton in New Jersey, has resulted in the reclassi fication of the area as a critical labor market by the War Manpower Commission. A 48-hour week becomes effective in essential industries September 1, and war procurement agencies are directed to divert new contracts into areas where an easier labor situation prevails, provid ing the required materials can be produced. Employment, payrolls, and total working time in Pennsylvania factories did not change signifi cantly from May to June. The number of wage earners and aggregate employee-hours worked showed small declines from a year ago, but the volume of wage payments was about 4 per cent greater. Comparable increases over the twelve months were reported in the payrolls of durable and nondurable goods industries. Throughout the four years of defense and war activity, how ever, wage disbursements in heavy goods lines almost tripled, as against an increase of only 60 per cent in the case of lighter products. In the six months ended June, employment, payrolls, and hours in Pennsylvania factories showed trends entirely different from those which prevailed through earlier periods of de fense and war production. The number em ployed showed the first prolonged decline since early 1940, although the decrease from Decem ber to June amounted to only about 3 per cent. Wage payments tended to stabilize in this period, following a steep rise that began about the middle of 1940. Total working time, while fluctuating rather narrowly in recent months, is somewhat below the wartime peak reached late last fall, reflecting some decline in muni tions production since November 1943. Anthracite and bituminous coal mines con tinue short of manpower, and in spite of recent increases in the productivity of their working forces, the supply of solid fuels in the coal year ending March 31, 1945 is expected to fall below estimated requirements. According to the Solid Fuels Administration, the deficit will amount to approximately 5 million tons of anthracite and 16 million tons of bituminous coal, respec tively iy2 and 2l/2 per cent of anticipated needs this coal year. Although the production of both fuels so far this year has been exceeding the 1943 volume, domestic consumption and ex port needs have risen more proportionately, and reserves are below normal working levels. Construction activity in the country as a whole has risen slightly since the early spring, following a steady decline which began in the summer of 1942. The War Production Board anticipates a further slight rise in operations over the near future, as the volume of privately financed building continues to more than offset the uninterrupted decline in public construction in progress for nearly two years. The value of new contracts awarded in June increased na tionally and locally, although in both instances contract totals for the first half year were sharply smaller than in 1943. Page Thirteen Bank credit expanded sharply over the period Growing conditions for crops over a large part of this district have deteriorated since early of the Drive both in this district and in the coun July, owing to continued high temperatures and try as a whole. Statements of reporting banks insufficient rainfall. Most late planted crops, in leading cities show an increase of 11 per cent including many garden vegetables, are badly in the Third Federal Reserve District and 14 in need of rain in the southeastern counties. per cent in the United States between June 14 The growth of pastures has been retarded con and July 12. The actual change in this district siderably in recent weeks and the second cut was an increase from $2,210 million to $2,450 ting of hay is expected to yield much less than million, a record high level from which there the season’s first harvest. Grain crops are being was only a moderate recession in the week fol lowing. Credit was extended chiefly through harvested, with high yields reported; the pro investment operations. Purchases in the market, duction of wheat in Pennsylvania is expected to from customers and on direct subscriptions, be the largest on record. Fruit prospects con raised the investment in Governments by ap tinue unusually favorable in spite of the dry proximately $200 million; more than one-half weather. A shortage of farm labor persists. of this increase was in Treasury certificates of indebtedness and the remainder largely in Primary distribution by rail continues well Treasury bills. Loans also increased somewhat, above year ago levels in this district, as in the reflecting in part advances to purchase or carry country. Business at wholesale slackened some Governments, but such paper continued to be what from May to June, reflecting declines in only a small proportion of the total loan port all reporting lines except groceries and hard folio. ware. Sales also were smaller than a year earlier, but in the six months ended June they While modified in part by the extension of showed a gain of 5 per cent over the 1943 bank credit, changes in the deposit structure period. Inventories decreased in most lines dur were similar to those shown in other drive ing June; they were slightly larger than twelve periods. Customers’ balances were drawn upon months earlier, owing principally to increased heavily to pay for the new securities. At re holdings of dry goods, groceries, and hardware. porting banks in this district adjusted demand deposits declined from an all-time high of $1,831 The value of sales at department and women’s million on June 14 to $1,554 million on July 19. apparel stores in this district declined more But gains in war loan accounts were larger, than they usually do in June, and at men’s ap with the result that total deposits at these insti parel stores a small decrease was contrary to tutions rose to new peaks approximating seasonal expectations. Sales by shoe stores rose $2ji billion. At this level they were $100 mil appreciably on an adjusted basis. Increases lion above the high point reached late in the over a year ago and the first six months of 1943 Fourth Drive and they showed an increase of were reported by department and women’s ap about one billion dollars over June 1940, when parel stores, but dollar volume showed a de defense preparations got under way. cline in both comparative periods in the case The movement of funds into reserve-free war of men’s apparel and shoes. Sales by furniture stores declined sharply in June to about the loan accounts reduced reserve requirements level of a year earlier. Inventories at depart considerably, but there was a decline also in re ment and women’s apparel stores exceeded the serve balances, amounting to $63 million in the dollar volume reported in June 1943 but they four weeks ended July 19. This decline was showed considerable declines at establishments due principally to payments made to the Treas ury ; currency demand also increased somewhat. specializing in shoes and furniture. The decline in member bank reserves was modi fied by gains in interdistrict commercial transac Banking conditions. Offerings of marketable tions. Little net change was shown in the vol securities in the Fifth War Loan Drive ended ume of Reserve Bank credit extended locally. on July 8, but subscriptions for savings bonds Discounts for member banks continued very and savings notes, applying toward the record small, and an increase of $7 million in Treas goals, continued through the balance of the ury bills held by this Bank under repurchase month. The over-all quota of $16 billion set option raised this account to only $132 million, for all non-bank investors throughout the na an amount one-half as large as peak holdings tion was considerably exceeded. late last year. Page Fourteen BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Adjusted for seasonal variation Indexes: 1923-5 =100 Per cent c lange 1944 from 6 Mo. Year mos. 1943 ago ago June 1944 from June May June 1944 1944 1943 INDUSTRIAL PRODUCTION 146p 149 MANUFACTURING.............. 150p 153 230p 237 95 Metal products....................... 183 185 Textile products...................... 70p 70 Transportation equipment. . 578 604 Food products......................... 125p 124 Tobacco and products.......... 83 96 Building materials.................. 35p 35 Chemicals and products.... 162p 157 Leather and products........... 108p 112 Paper and printing................ 97 94 Individual lines Pig iron...................................... 113 97 r Steel............................................ 138 131r Silk manufactures.................. 86 89 Woolen and worsteds............ 63p 64 Cotton products..................... 48 46 Carpets and rugs.................... 56p 54 Hosiery...................................... 72 70 Underwear................................ 145 142 Cement...................................... 28p 29 Brick.......................................... 48 47 Lumber and products........... 32 33 149r 157r 251 r 94 r 178r 72 r 678 r 114r 114 39 158 110r 95r - 2 - 2 - 3 0 - 1 0 - 4 +1 -14 - 1 + 3 - 4 + 3 +16 + 5 + 3 - 1 + 5 + 5 + 3 + 2 - 3 + 3 - 3 + 3* 128 126 110 + 2 84 107 85 -22 169p 166 150r + 2 82 95 114 -14 85 84 85r + 2 96 99 96 + 3 132 131 135 + 1 85p 95 85 r -10 96 94 94 + 2 168 164 156 + 3 86 88 50 - 2 81 84 47 - 4 122 116r 71 + 6 360 366 406 - 2 440 439 415 0 449 441 427 + 2 344 342 325 + 1 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 AWARDSt................. 45 Residential f............................. 17 Nonresidentialf...................... 56 Public works and utilities f.. 106 39 14 44 117 115 138 88 64r 59 55 80 161 37 61 28 46 33 60 48 +15 +20 +27 -10 + + + + + 2 4 8 1 3 4 15 10 28 10 3 1 2 + + + + + - 2 0 i 1 19 3 10 10 25 20 14 10* IT 1 13 28 + + + + + + + - 3 3 0 3 8 72 72 72 + + + + + + + + + + + + + + + 11 6 5 6 - 1 - 48 - 6 +120 Industry, Trade and Service Not adjusted 0 0 3 3 4 3 5 17 19 21 6 4 4 Indexes: 1932=100 145p 147 148p 151 148r 155r 185 68p 577 114p 89 37p 162p 105p 96 182 67 625 116 93 36 159 102 95 lOlr 109 138 141 83r 84 61 62 r 45 56 53 54 70 79 143 161 32 44 50 63 30 28 + + + + + + - 11 + 7 + 9 + ii 107 141 84 6lp 46 55p 70 145 33p 50 32 126 121 90 122p 88 85 98 125 86p 98 168 84 81 108 375 418 436 348 - 46 18 57 100 1 i 2 1 20 2 11 9 47 20 13 10* 30 39 24 18 0 4 5 3 7 6 13 12 13 62 61 59 62 Employment June May June 1944 1944 1943 126 132 127 92 84 97 119 87 100 170 86 r 84 104r 381 409 423 348 180r 71 675 r 104r 123 42 158 107r 94r 103 91 108r 123 84r 96 129 95 156 49 47 63 r 422 394 328 38 15 46 35 82 46 GENERAL INDEX......... Manufacturing.................... Anthracite mining............. Bituminous coal mining. . Building and construction. uar, and nonmet. mining, rude petroleum prod.. . . Public utilities.................... Retail trade......................... Wholesale trade.................. Hotels.................................... Laundries............................. Dyeing and cleaning.......... g Factory payrolls Building permits value Debits May 1944 June 1943 May 1944 June 1943 May 1944 June 1943 May 1944 June 1943 May 1944 June 1943 - 90 + 28 +280 - 60 - 81 - 57 + 21 + 3 - 17 - 22 + 58 + 26 - 62 +129 - 32 +104 - 72 + 4 - 63 - 5 +249 + 16 + 24 + 76 - 20 - 64 - 5 -10 -12 - 7 - 8 -13 -11 -10 - 9 - 7 -1 +13 0 +24 + 3 + 2 + 4 +18 - 3 +17 - 3 - 7 +16 +10 +23 +13 +26 +11 +13 +28 +23 +73 +21 + 9 + 9 +37 +19 +30 +20 +26 +15 +55 +25 +22 +93 +59 +16 -14 +29 +26 Allentown........... Altoona............... Harrisburg......... Johnstown.......... Lancaster............ Philadelphia.... Reading............... Scranton............. + + + + + 0 0 3 1 1 1 1 I - 5 - 2 0 - 6 + 1 - 5 - 6 +18 + 3 0 + 3 + 4 + 1 - 3 + 1 + 4 + 8 + 8 + 5 +11 + 7 + 1 0 +37 Wilkes-Barre.... Williamsport... . Wilmington........ York..................... + + + + 2 1 1 4 - 1 -10 - 6 - 6 + + + - 3 - 7 - 2 0 5 1 1 5 * Area not restricted to the corporate limits of cities given here. + + 0 0 0 1 1 -1 1 4 0 -1 -1 0 Employment* Payrolls* Per cent Per cent June change from June change from 1944 index May June index May June 1944 1943 1944 1943 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......... 119 128 200 169 80 74 108 122 87 53 116 74 101 94 0 0 1 1 1 1 1 2 1 4 0 + 1 + 1 + 1 - 3 - 3 +1 - 4 - 7 - 6 - 8 + 7 - 2 +1 - 5 -11 - 1 +1 204 283 435 299 121 112 165 190 130 86 208 117 149 131 0 +1 + 3 - 6 + 1 + 1 0 + 2 - 1 + 6 0 + 3 0 0 + 4 + 5 +10 + 3 - 1 - 1 0 +13 + 6 +12 0 - 1 + 5 + 7 55 146 91 + 2 — 2 + 7 -13 + 9 +33 79 296 153 + 6 - 2 +1 - 6 +17 +32 + — + + + + + + * Figures from 2854 plants. Factory workers Averages June 1944 and per cent change from year ago Retail sales 0 0 +1 0 -1 +1 0 0 Hours and Wages Local Business Conditions* Factory employment Per cent Per cent June change from June change from 1944 1944 index May June index May June 1944 1943 1944 1943 133 - 3 335 + 6 185 - 3 501 + 4 49 - 5 99 4-60 79 - 8 364 +50 47 + 2 - 4 121 - 9 84 -19 277 -10 136 - 2 246 +15 97 - 3 144 + 5 111 156 + 3 +2 104 4- 1 - 4 148 4- 1 + 2 103 + 2 + 2 172 4- 1 +12 105 + 2 - 4 181 + 4 104 - 3 189 + 2 Manufacturing * Unadjusted for seasonal variation. p—Preliminary, t 3-month moving daily average centered at 3rd month, r—Revised. " Percentage change— June 1944 from month and year ago Payrolls Weekly working time* Hourly earnings* Weekly earningst Averago Ch’ge Aver Ch’ge Aver Ch'ge hours age age TOTAL............................ 45.5 Iron, steel and prods... 47.3 Nonfer. metal prods.. . 45 8 Transportation equip.. 46.8 Textiles and clothing. . 39.7 Textiles........................ 40.9 Clothing....................... 37.1 Food products.............. 44.6 Stone, clay and glass. . 41.0 Lumber products......... 44.6 Chemicals and prods.., 45.9 Leather and prods........ 42 8 Paper and printing.. . . 43.7 Printing........................ 40.8 Others: Cigars and tobacco... 42.8 Rubber tires, goods.. 43.6 Musical instruments. 46.6 * Figures from 2705 plants. +1 $1,054 + 6 $47.76 + 3 1.119 + 4 52.91 + I 1.008 +10 46.18 - 2 1.222 + 7 57.17 - 1 .763 + 7 30.27 0 .780 + 6 31.89 - 2 .718 + 9 26.93 0 .813 + 5 36.52 + 3 .911 + 5 37.40 + 2 .763 + 8 33.83 + 3 1.049 48.07 + 7 .739 + 4 31.70 + 3 .894 + 4 39.49 + 1 1.041 + 4 42.77 + 7 + 7 +11 + 5 + 7 + 6 + 8 + 4 + 8 +10 + 7 +11 + 6 + 5 + 3 - 1 - 3 + 9 + 7 - 1 .614 + 5 1.032 + 8 .943 + 3 26.29 45.02 43.97 t Figures from 2854 plants. Page Fifteen Distribution and Prices i • -' • • a t ^ [jLH/u. f; t- ' Month Of Sales Total of all lines... Boots and shoes.. Drugs..................... Dry goods............. ElectricdTsuppliifes Groceries . i/.v* Hardware.............. Jewelry.................. Paper...................... June 1944 from Year ago ago 2 -11 - 9 - 7 - 3 -22 - 5 - 1::12 -12 +3 + 3 -17 + 6 +2i -14 -18 Inventories Total of all lines.............. Dry goods.. . C-----•*’. • — Electrical supplies........ Groceries...........>+:•'+'• • Hardware......... .".AV.v. i Jewelry............................. Paper................................. -3 1944 from Per cent change Indexes: 1935-1939=100 m: +5 —2 + 3 h4^l FT +6 May June 1944 1944 1943 RETAIL TRADE Sales , 160p 156 152 131 138 +19 + : 3 10 +1+' :; + 2„ - 7 + ■7 + -198 -- 41 0 Not adjusted Adjusted for seasonal variation Per cent change Wholesale trade Unadjusted for seasonal variation 168 166 169 160 127 151r 151r 139 139 185 June 1944 fro m Month Year ago ago - 5 - 6 -10 -18 + 9 —15* + 6 + 3 + 9 - 6 -25 + 1* + 2 0 + 8 + 6 + 7 -15 -14* It: Inventories -16 69 142 191 92 149 135 90 185 209 235 124 150 149 151 133 89 185 237 255 136 147 140 130 132 88 112 201 179 120 135 133 120 114 100 204 78 Source: U. S. Department of Commerce. 150 149 1944 from 6 mos. 1943 +n +14 - 3* June May June 1944 1944 1943 + 8 + 6 +10 - 1 - 7 144p 136 131 146 148 161 155 161 148 157 136 r 133r 120 156 200 143 139 166 75 150 149 177 76 132 132 157 89 Percent change from Prices 1944 Month Year ago ago Basic commodities (Aug. 1939=100).... Wholesale (1926—100)................ Food............................. Other............................ Living costs (1935-1939=100).. . . Philadelphia............... Clothing.................... Housefurnishings. . . Other.......................... Aug. 1939 182 +1 + 4 + 82 104 125 107 99 0 + 2 + 1 0 0 - 1 - 3 + 2 + 39 +10S + 58 + 23 125 125 135 139 107 109 138 120 0 + 1 + 1 +1 0 0 + 3 + 1 0 + 1 — 3 + 9 0 + 3 +11 4- 4 + + 4* + 27 27 45 40 4* 4 + 13 + 37 + 19 Source: U. S. Bureau of Labor Statistics. FREIGHT-CAR LOADINGS Coal ............................................................. - 1 +1 +10 -12 - 8 - 9 +2 +7 +14 + 2 + 2 +65 4- 4 +32 + 3 +11 +12 + 8 + 4 46 +19 +9 + 11 +10 +11 +27 153 137 90 167 307 219 141 130 136 152 137 89 165 301 2l6 131 137 127 134 135 88 101 296 166 137 118 121 +20 +18 122 113 102 -87* -67* +27 -74* 3 -90* 4 +10 215 16 10 162 22 13 169 MISCELLANEOUS Business liquidations 199 * Computed from unadjusted data. 162 156 p—Preliminary. + 5 -82* -59* +23 r Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS June 28 July 5 July 12 July 19 Changes in four weeks -16.7 +31.9 -60.8 - 9.2 + 0.5 +16.9 + 5.7 + 5.1 -13.3 +19.2 -16.0 -16.9 - 1.0 +21.5 -74.1 -45.6 + 8.2 - 2.5 -13.7 -53.6 + 2.9 -52.5 + 4.0 - 0.0 +12.3 + 0.9 - 4.9 - 0.1 + - 2.5 0.5 0.6 0.1 - 3.4 -11.3 + 0.9 + 0.1 + 9.3 -63.4 + 0.6 - 0.1 -45.6 + 8.2 - 2.5 -13.7 -53.6 Changes in weeks ended— Changes in— Reporting member banks (Millions $) July 19, 1944 Four weeks Assets Commercial loans................ $ 242 41 Loans to brokers, etc.......... 16 Other loans to carry secur.. 36 Loans on real estate........... 2 Loans to banks..................... 103 Other loans............................ +$ + + 2 7 3 + 4 i Total loans.......................... $ 440 +$ One year + + 4" + — n 10 5 8 2 6 9 +$ 14 Government securities.... $1764 Obligations fully guar’teed 54 170 Other securities.................... +$193 3 +$374 - 23 — 32 Total investments............. $1988 +$190 +$319 — Total loans & investments. $2428 Reserve with F. R. Bank.. . 369 29 Cash in vault........................ 75 Balances with other banks. 55 Other assets—net................. +$199 +$333 - 52 - 34 2 1 + 5 5 7 + 2 - Liabilities Demand deposits, adjusted. $1554 181 Time deposits........................ 626 U. S. Government deposits. 348 Interbank deposits.............. 2 Borrowings............................ 15 Other liabilities..................... 230 Capital account.................... -$226 + 2 + 376 9 + i 2 + i Page Sixteen -$121 + 20 + 393 - 14 + 2 + 2 + 7 Third Federal Reserve District (Millions of dollars) Sources of funds: Reserve Bank credit extended in district............................. Commercial transfers (chiefly interdistrict)......................... Treasury operations.............................................................. • • • Uses of funds: Member bank reserve deposits................................................ “Other deposits” at Reserve Bank......................................... Other Federal Reserve accounts.............................................. Held Re quired Ex cess Ratio of excess to re quired Phila. banks 1943: July 1-15.. 1944: June 1-15.. June 16-30. . July 1-15.. $380 403 394 364 $366 394 379 344 $ 14 8 15 20 4% 2 4 6 Country banks 1943: July 1-15.. 1944: June 1-15 .. June 16-30. . July 1-15.. 263 283 288 283 193 228 224 217 70 55 64 66 Member bank reserves (Daily averages; dollar figures in millions) 36 24 29 31 Federal Reserve Bank of Phila. (Dollar figures in millions) July 19, 1944 Changes in Four weeks One year Discounts and 2.5 advances............... $ 4.5 Industrial loans.... U. S. securities......... 1053.4 +$ 0.6 - 0.3 + 35.0 +$ 2.5 0.5 + 586.4 Total........................ $1060.5 Note circulation. . . . 1265.1 Member bk. deposits 631.2 U. S. general account 23.2 Foreign deposits.. . . 131.4 Other deposits......... 9.2 Total reserves.......... 1008.6 49.0% Reserve ratio............ +$35.3 + 12.0 - 63.4 + 22.0 - 9.4 + 0.6 - 65.9 - 2.2% + 588.4 + 272.8 - 10.1 + 9.5 + 36.3 + 6.1 - 281.5 - 24.9%
@FedFRASER