The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
AUGUST 1953 bu ■ness review J , Iglij FEDERAL RESERVE BANK OF PHILADELPHIA RD DISTRICT CORNUCOPIA , soils, topography, markets, favor farming in this area, for industry, the district also produces many kinds of , but poultry and dairy output predominate. PERSPECTIVE: GUNS AND BUTTER focuses attention on the period of fighting there. , is a brief economic history of the period. FIRST-HALF BAN KIN G — THIRD DISTRICT Loans continued to expand in first half of 1953. Gross earnings rose substantially and profits were higher. CURRENT TRENDS Variety is the word for agriculture in the Third than any other county in the nation. These are Federal Reserve District— a fact particularly evi dent at this season. Over the district, farmers’ some indications of the variety and importance of farm pursuits in this Reserve District and in markets, county fairs, and picnics burst with Dutch” the sixty counties within its boundaries. They are the three counties in Delaware, nine in the country, “ supper” tables sag with meats, fruits, southern half of New Jersey, and forty-eight in and vegetables transformed into unpronounce the eastern two-thirds of Pennsylvania. bounty. Through the “ Pennsylvania able dishes like G’shtuptaful Lew’r and Schnitz What are some characteristics of agriculture in un Knepp.* Truckloads of produce pour into the the Third District? First, much of the agricul world’s largest soup company at Camden, New tural importance of the district arises from its Jersey. dense population. The world’s largest commercial truck Good highway and railway farm enterprise in Cumberland County, New facilities lead to excellent markets in and ad Jersey, keeps up to 6500 people busy processing jacent to the region. About 8.5 million people 65 million pounds of vegetables yearly from live within its borders, and around its perimeter seed to freezer. are the metropolitan areas of New York, Pitts It is true that the district’s prominence in manufacturing burgh, Baltimore, and Washington. and mining tends to obscure somewhat its farm production, but this is not Cities influence types of farms due to lack of agricultural achievement nor fail Cities are important to farming not only for ure to recognize its successes. For example, a their distribution centers, market places, and monument honors the man who developed the consuming populaces but also for their influence York Imperial apple in York County, Pennsyl on the types of farming which prevail within vania. A “ city” is named for the potato in their orbit. For example, bulky, perishable prod Potter County; a bologna carries the name of ucts like vegetables and products requiring rela Lebanon. Who has not heard of Philadelphia scrapple, cream cheese, and ice cream? tively little land, like poultry and eggs, are Truck produced close to cities— as is the case in Del farms give New Jersey the name of “ Garden aware, New Jersey, and eastern Pennsylvania. State.” The nickname “ Blue Hen’s Chickens” is Milk, another perishable product, is produced again fitting for Delaware since Sussex County and shipped in from farms somewhat farther is the nation’s leader in number of chickens sold away. This is true of farms in the northern tier and value of poultry and poultry products sold. and western counties of the district, as shown Surprising to many people is the fact that Lan in the map. Hogs, sheep, beef cattle, butter and caster County, Pennsylvania, raises more tobacco cheese are concentrated and more costly products * Stuffed baked liver, and dried apples and dumplings. per pound, and can be shipped long distances 2 business re v ie w TA B LE at relatively little cost. Livestock and livestock products (other than poultry) account for more Percentage d istrib u tio n U nite d T h ird D ist. States than 16 per cent of the value of farm products sold by farmers in the Pennsylvania section of Products the district, but a large share comes from the sale of feeder cattle shipped there for fattening and marketing. Physical factors are important Physical factors, such as climate, soil, and topog raphy— all of which vary considerably in the tri-state area— help determine the variety as well as the abundance of farm production. Normally, I VALUE OF FARM PRODUCTS SOLD— 1949 T h ird D ist. as percent of U .S . total Fie ld crops ........................... Vegetables .......................... F ru it and n u ts...................... H o rtic u ltu ra l sp e c ia ltie s.. D a iry p ro d u c t s ................... P o u ltry and p o u ltry products .................................... O th e r livestock and livestock products ............... Fo re st products ................. 12.5 6.1 3.3 5.3 28.1 36.2 2.8 3.6 1.8 14.0 1.0 6.2 2.5 8.2 5.6 31.2 8.3 10.4 13.1 .4 32.7 .6 l. l 1.9 A ll products ............... 100.0 100.0 2.8 Source: U n ite d Sta te s Census of A g ric u ltu re , 1950. droughts over the entire district are not expe rienced. Most of the excellent limestone valleys of Pennsylvania sweep northeastward over the from his poultry flock; 28 cents from his dairy; district from the Maryland border to the Del field crops like tobacco, corn, and wheat; 6 cents aware River at Easton, and the fertile flatlands from vegetables; 5 cents from his mushrooms, of New Jersey and Delaware are farmed exten flowers, and greenhouse plants; 3 cents from his sively. The topography of the district provides orchards; and less than a cent from forest prod good watersheds and drainage. Elevation varies ucts. from 3,000 feet in the western part of the dis value of all farm products sold in the United trict to sea level along the Atlantic Coast. States is also shown in Table 1. Almost 70 cents 13 cents from other livestock; 13 cents from For comparison, the distribution of the of each dollar of farm products sold in the na This is a poultry and dairy district tion came from field crops and livestock, other Agriculture in the Third District reflects these than poultry. economic and physical factors. Ours is a poul TA BLE 2 try and dairy district. Nearly 60 cents of each dollar of products sold by farmers (compared with 22 cents nationally) come from the sale of SOURCES OF FARM INCOME IN THIRD DISTRICT COUNTIES chickens, turkeys, eggs, milk, and allied prod ucts. The poultry business provides the district with its primary source of farm income, as shown in Table 1, but in a majority of the counties— 36 out of 60— dairy products rank first, as shown in Table 2 and on the first map. How would each dollar of sales be broken down for an average Third District farmer? Ac cording to the most recent census of agriculture, our hypothetical farmer received about 31 cents Products N um ber of counties Second Prim a ry la rgest source source Fie ld c r o p s ................................................... Vegetables ................................................... F ru it and n u ts .............................................. H o rtic u ltu ra l s p e c ia lt ie s ........................ D a iry p ro d u c ts ........................................... P o u ltry and p o u ltry p ro d u c ts.............. O th e r livestock and livestock prod ucts ............................................................ Fo re st products ......................................... 3 1 0 2 36 17 8 5 2 1 12 24 1 0 8 0 A ll p ro d u c t s .................................. 60 60 Source: U nite d Sta te s Census of A g ric u ltu re , 1950. 3 business re v ie w Horn of plenty 6 per cent of all dairy products, 2.5 per cent Smallest of the twelve Federal Reserve Districts, of all fruits and nuts, and 1 per cent of all others the Third District covers 1.2 per cent of the combined, namely, forest products, field crops, land area of the United States but produces, ac and livestock and livestock products, other than cording to the 1950 Census of Agriculture, about poultry. 3 per cent of the value of all farm products sold This output is achieved with less than half It supplies, in value of the area devoted to farming, compared with products sold, 10 per cent of all poultry and about two-thirds of the country as a whole, and poultry products, 8 per cent of all horticultural with fewer than five of each 100 employed per specialties, 6 per cent of all vegetables, nearly sons at work on farms, compared with over in the United States. PRIMARY SOURCES OF FARM INCOME VARY AMONG THIRD DISTRICT COUNTIES . P R IM A R Y S O U R C E S O F FA RM IN C O M E— 1949 ijiiijiijjii Dairy products IB B Poultry and poultry products | lif t Other livestock and livestock products 11I11P11 Horticultural specialties ' Field crops Hill Vegetables Third D istrict— Poultry and poultry products United States— Field crops 4 business re v ie w twelve out of each 100, nationally. The average have sales of $10,000 or over. The average value value of output per farm worker in this district of farmland and buildings per acre in the district is $3900 compared with less than $3200 for the is $130— double that of the United States aver United States. age. New Jersey and Delaware lead all other states in the percentage of farms selling products worth Variety is characteristic $10,000 or more. Almost one-third of all farms in Variety of products distinguishes agriculture— New Jersey, and more than one-fourth in Dela as it does industry— in the district. A recent re ware, are in this class; about 9 per cent of the port of the 1950 Census of Agriculture ranked farms in Pennsylvania, as in the United States, the 100 leading counties of the nation’s 3,050 ONE MEASURE OF THE IMPORTANCE OF AGRICULTURE WITHIN THE THIRD DISTRICT COUNTIES IS THE VALUE OF FARM PRODUCTS SOLD PER CAPITA United States — $ 148 5 business re v ie w counties in each of 56 selected items of farm ally in number of chickens, other than broilers, inventory and production— like the number of on farms, and thirteen additional counties of this chickens sold, acres of Irish potatoes harvested, region are among the first 100. pounds of tobacco harvested, pounds of milk listed with the leaders in number of chickens sold, the number of apple and peach trees, sold, including, in addition to the counties given and so on. Fifteen are above, Sussex, Kent, Lebanon, Berks, Bucks, were Gloucester, Pike, Atlantic, Montgomery, Salem, among the leading counties in the United States for 38 items— almost 70 per cent of all items tioned in the top 100 in eggs produced; and listed. Ocean, Lancaster, York, and Cumberland (New Thirty-nine counties in this district There are relatively few farm products — citrus fruits, cotton, sugar cane would be among them— which are not produced to some extent in the Third District. and Northumberland. Fourteen counties are men Jersey ) are in the first ten, nation-wide. Sussex County is a national leader in soybean production. Bradford, Lancaster, and Susque Counties in the Third District rank high in the general classifications. In sales of poultry and poultry products, 18 counties are among hanna counties have the largest acreage in the district in hay— Northampton County has the most acreage in alfalfa. the nation’s leaders. Sussex is first in the coun Eleven counties, led by Lehigh, Mercer, and try; Lancaster, fourth; Ocean, ninth; Cumber Lancaster, are major growers of Irish potatoes; land, New Jersey, thirteenth; York, fifteenth; and five counties, of sweet potatoes— Gloucester, and thirteen other counties range from 27th to Atlantic, Cumberland, Salem, and Camden, all 100th place. in New Jersey. In acres of vegetables harvested for sale, the Lancaster produces practically all the tobacco nine counties in this area among the top 100 in this district and ranks number one nationally are Cumberland, New Jersey, Sussex, Gloucester, for quantity harvested and number two in acre Bucks, Salem, Lancaster. age. Our major sweet corn-raising counties are Burlington, Kent, York, and Burlington, York, Bucks, New Castle, Cumber In sales of dairy products, Lancaster, Chester, land, New Jersey, Lancaster, Adams, Montgom Bradford, Susquehanna, Berks, Wayne, and Bur ery, and Bedford. Sussex is our leading water lington counties are included in the first 100 melon county. nationally. As might be expected, six of the nation’s lead In sales of fruits and nuts, Burlington, Adams, ing tomato counties are in southern New Jer Franklin, Berks, and Gloucester counties are sey, two in Delaware, and four in southeastern among the country’s 100 leaders. Pennsylvania— all near large soup, canning, and Among national leaders in specific items are: freezing factories. Luzerne is the other county. Lancaster for the number of horses on farms; Trees of apples, peaches, plums, and cherries Lancaster and Chester counties for number of abound in such leading fruit counties as Adams, cattle sold and, with Bradford, Susquehanna, Franklin, Lehigh, Berks, Schuylkill, Burlington, Berks, and Wayne, for pounds of whole milk and Gloucester. sold. Lancaster, Ocean, York, and Cumberland Nursery and greenhouse products are also (N. J.) counties are among the first ten nation grown close to cities. Chester County (third, 6 b usiness re v ie w nationally), Montgomery, Delaware, Lancaster, Bucks, Cumberland (New Jersey), Berks, Sus sex, and Philadelphia counties are, successively, among the leading 100 in sales of horticultural specialties. Leading farm counties of the district Which are the leading agricultural counties of the Third District? Several measures may be used to determine the district’s leading farm counties. We have used three, shown in the first table on page 10: (1) value of farm products "SEVEN SWEETS AND SEVEN SOURS" To see how the horn of plenty spills over in a rich agricultural section of the Third District, have dinner with Elmer C. Stauffer “ In the Pennsyl vania Dutch Country.” * A regular dinner calls for seven sweets and seven sours. At the instant I cannot tell which is which. Meat, potatoes, beans, and sold by counties, as a percentage of district total; (2) percentage of each county’s employed people who work on farms; and (3) number of times each county is listed among leading 100 counties in the United States in 56 basic items of farm inventory or production. Farm employment peas are sweets. Pickles, and pickled beets The importance o f farming to a county is not with hard-boiled eggs in the beet brine, are only a matter of dollar value. For example, Ful sours. Pie may be either. ton County ranks fiftieth in the district based To refuse a second helping is impolite; on value of products sold, but first in the pro not to finish your plate is just as bad. It re portion of employed persons in the county who flects upon the hostess; it suggests you do work on farms. About one-third of the workers not consider the food good. Roast beef, fried in Fulton, Susquehanna, and Wayne counties ham, bologna, and pork sausage often ap are employed on farms, and about one in four pear at the same meal. Two kinds of cake in Juniata, Wyoming, Bradford, Bedford, Sus with cookies, as well as pie and a pudding, sex, and Potter counties. Fewer than one in are the dessert. eight work on farms in Lancaster and Chester When menfolk gather for a winter evening, counties. In two other important agricultural it’s the ‘eats’ that keep us together— eats and counties— Berks and Lehigh— less than 5 per conversation. Fried oysters served on a big cent work on farms. platter in the center of the table start things off. And, of course, these are followed by Rankings several kinds of prepared sausages, cheeses, pies, jellies and preserves, white and rye In 56 agricultural pursuits, the ten leading farm bread, apple butter, ‘smierkase’ (‘smearcase,’ counties listed above were ranked a total of 134 or cottage cheese, to some Americans I, times among the leading 100 counties of the pickles, pickled cabbage, pickled green toma toes intermixed with nasturtium seeds. We empty the dishes, go to bed, sleep, and look for breakfast in the morning! * The National Geographic Magazine, Copyright, July 1941. United States, according to the 1950 Census of Agriculture. Diversification of farming in our top counties is brought out by these rankings. Lancaster was a prime producer in 24 items; York, Berks, and Cumberland I New Jersey) in (continued on page 10) 7 business re v ie w b usiness re v ie w KOREA IN PERSPECTIVE: GUNS AND BUTTER Truce in Korea focuses attention on the period o f fighting there. Here, graphically, is a b rief economic history o f the period. B IL L IO N S $ .IO N S $ PRIVATE MONEY SUPPLY Consumers at first spent heavily to protect them selves from shortages they expected when more A renewal of The increased spending by consumers, business this “ protective” buying took place after the men, and the Government could not have taken Chinese entered the conflict, but for the past two place without an expanded money supply, or a years, consumers have been saving at a near more rapid turnover or use of money. output was to go for defense. 100 TUR NO VER TURNOVER OF DEPOSITS * 1 9 4 7 -4 9 = 1 0 0 120 record level. CONSUMER PRICES^, + ------- - WHOLESALE 180 Like consumers, businessmen at first sought to The surges of consumer buying and inventory guard against possible shortages, so they rapidly accumulation following the outbreak of fighting accumulated inventory. After the initial surges, and the Chinese intervention caused prices to inventory accumulation continued at a slower rise. Anti-inflationary policies, higher savings and rate. Business spending on new plant and equip increased production combined to check rising ment remained at a high level throughout the prices. 1935 - 3 9 = 100 2 40 r 210 INDUSTRIAL PRODUCTION period. FEDERAL GOVERNMENT SPENDING CSTEEL 80 1952 PRICES In spite of the tremendously increased bite that REAL PER CAPITA SPENDING $ 1450 Government spending and investment in produc 8 PRICES Federal Government spending for defense pur tive capacity are taking from our economy, and poses has increased rather consistently and only recently has shown signs of levelling off. Total population, the country’s real per capita consump in spite of a higher price level and an increasing Federal spending, which absorbed about 7 per cent of all goods and services produced in the tion of goods and services— its standard of liv second quarter of 1950, now takes 16 per cent. Korean fighting. ing— is higher today than at the start of the STRIK E} CONSUMER 1400 IJ5L> 1950 1951 1953 9 b usiness re v ie w 15 items each; Sussex and Bucks in 13 items; Gloucester in 12; and Burlington. 11. The com plete list, shown in the following table, men tions Third District counties a total of 236 times. Value of sales percent of d is tric t Lancaster .............. Sussex ...................... C h e s t e r ................... Y o rk ........................ Bucks ........................ Berks ........................ Cumberland ( N .J .) B urling ton ............ M ontgom ery . . . . Fra nklin ................... Bradford ................. G louc ester ............ Salem ...................... Ocean ................... Adams ................... Kent ........................ Lebanon ................. Lehigh ............ Susquehanna . . . . Northam pton . . . . W ayne ................... Cumberland (Pa.) A tla n tic ................. Tioga ...................... M ercer ................... Colum bia ............... Dauphin ................. New C astle .......... Bedford ................. Northum berland S c h u ylkill .............. Lycom ing ............ Luzerne ................... Pe rry ...................... Lackawanna .......... B la ir ........................ W yom ing .............. M ifflin ...................... Delaware ............... Po tter ...................... H unting d o n .......... Camden ................. Snyd er ................... Union ...................... Cambria ................. C le a rfie ld .............. M o ntour ................. 10 1 1.4 9.2 5.1 4.2 3.8 3.7 3.5 2.8 2.6 2.6 2.5 2.4 2.1 2.1 2.1 2.0 1.9 1.8 1.8 1.6 1.6 1.6 1.5 1.4 1.4 1.3 1.3 1.3 1.2 l. l l. l l. l l. l .9 .9 .8 .8 .7 .7 .7 .7 .7 .7 .7 .6 .6 .6 .4 .4 .4 Em ploym ent* percent in ag riculture 1 1.8 25.0 12.0 8.1 9.5 4.9 14.8 8.6 2.9 13.6 26.0 10.8 15.1 13.3 18.4 21.3 7.4 3.6 31.3 3.3 31.0 8.1 5.0 21.9 2.0 12.6 2.8 2.6 25.0 5.2 10.9 3.3 6.3 1.6 19.4 1.7 3.2 27.9 9.7 28.1 1.0 24.5 13.5 l. l 20.1 14.7 2.0 37.1 4.9 13.5 Tim e s ranked in 100 top U .S . counties) 24 13 11 15 13 15 15 11 8 9 5 12 7 4 II 4 3 4 4 2 3 2 9 — 1 2 1 1 2 4 1 5 — 3 2 — — — — 1 2 — 3 — — 2 T h ird D is tric t 9.0 6.9 5.9 2.8 3.4 .2 12.1 22.1 2.8 2.2 .4 .3 .3 .3 .3 .2 .2 .2 .1 — Cape M a y ............ M onroe ................. C lin to n ................... C arbon ................. McKean ................. Philadelphia .......... Pike ........................... Su lliv a n ................... Elk ............................. Cameron ............... 100 .0% 4 .8 % — — — 1 1 — — — 236 Per capita sales A measure of the importance of farming within a county is the value of products sold for each of its inhabitants. The existence of large towns in a given county, however, tends to limit the significance of this indicator. (The map on page 5 gives the general picture.) in g c o u n t ie s , b a se d on The twenty lead- p e r c a p ita s a le s , a re as f o llo w s : Sussex ................. Susquehanna W a yne .............. Ke nt ................... Lancaster .......... B ra d f o r d ............ Junia ta .............. Adam s .............. W y o m in g .......... Salem ................. ............ $921 ............ 340 ............ 334 ............ 316 ............ 297 ............ 293 ............ 287 ............ 284 ............ 272 ............ 263 Fulton ........................ . . .$252 Po tte r ........................ . . . 246 Tio g a ........................ . . . 244 C um berland (N . J..) . . 239 P e r r y ........................... . . . 228 Ocean ...................... . . . 223 Fra nklin ................... . . . 206 S u lliv a n ...................... . . . 201 C he ste r ................... . . . 195 Bedford .................... . . 177 Summary The Third Federal Reserve District is primarily a poultry district, but dairying is almost as im portant. Together, they produce 60 cents of each dollar received from the sale of farm products by district farmers. The “ milk check” is of primary importance in more than half the coun ties of the district. Based on value of farm products sold, the ten leading agricultural counties in the Third Dis trict and their rank among the top 100 counties in the United States are: — — — — * 1950 f Fo r 56 ite m s business re v ie w Lancaster ................... . . . . 9 Sussex ........................... . . . . 13 C he ster Y o rk ( N . J .) . M ontgom ery .............. ...................... ____47 ............................. . . . . 6 5 Bucks Berks ................................. . Cumberland ........................... 84 89 * ing in many of our counties is of major signifi * cance to their economies. Importance of agri ♦ culture within the counties of the district varies * considerably as to employment, value of prod ucts, land use, and value of production per * N o t in f ir s t 100. capita. These counties account for almost 50 per cent Lancaster County and Sussex County are the of all products sold by Third District farmers. district’s most productive counties, but almost Lancaster and Sussex counties combined ac two-thirds of our counties are among the lead count for more than 20 per cent of all sales. Favorable economic and physical factors re ers in 68 per cent of the major items of farm production and inventory among the 3,050 coun sult in a varied agriculture in the region. The ties of the nation. Although a small district, the value of farm products sold accounts for only Third Federal Reserve District cornucopia over about 3 per cent of the national total, but farm flows. FIRST-HALF B A N K IN G -TH IR D DISTRICT The upward sweep in loans of Third District member banks continued over the first half of 1953. In keeping with this trend, gross earn ings also rose materially, but additions to dis tributable funds were limited by rising expenses Loan expansion The importance of loans among the assets of banks has been rising since the close of World War II, while investments have been declining and income taxes. Nevertheless, net profits after relatively. At the mid-year the proportions in taxes were higher than they were a year earlier. terms of total assets were 36 and 41 per cent M EM BER BANK LO A N S Changes in June 30, M ill. $ Typ e s of loans: B u s in e s s .......................................................................................................... Se c u rity ........................................................................................................ Real estate ................................................................................................. O th e r loans to in d iv id u a ls— Instalm ent paper ............................................................................... Sing le-paym ent .................................................................................... A ll other lo a n s............................................................................................ $1,288 74 796 522 260 84 M ill. $ % + $128 — 6 + 67 + M% — 8 + 17 + 6 +22 + + 138 20 + II +36 + 8 + 15 6% 4 + $358 + 6 + 1 3% + 15 6% +$352 + 1 3% M ill. $ + — + $45 6 22 + + + 75 14 15 % + — 4% 8 + 3 L O A N S , total ....................................................................................... Less reserves ......................................................................................... $3,024 51 + $165 2 + + L O A N S , n e t ............................................................................................ $2,973 + $163 + t P re lim in a ry. One year* S ix m onths* 1953 T h ird Federal Reserve D istric t + + 9 *A d ju ste d fo r m ergers and changes in membership. 11 business re v ie w respectively. This was still far afield from the Bank earnings rise 55-26 ratio reported late in the 1920s, as might Net profits of member banks in the Third Fed be expected in view of the growth in Federal eral Reserve District increased to $25.9 million debt to more than a quarter of a trillion dollars. in the first half of 1953 from $22.4 million in Loans of Third District member banks have the corresponding period a year ago and divi more than tripled since June 1945. Over the dend payments were increased somewhat. The first six months of the present year the increase increase in profits, however, was only about one- was $163 million or 6 per cent. Percentagewise, this increase was exceeded in the corresponding fourth as large as the expansion in total earn ings, owing to rising expenses and heavier in periods of several other postwar years, but in come tax payments. dollars it was topped only in 1951. offs and transfers to valuation reserves was about What kind of loans have the banks been The total of net charge- the same as a year ago. making? Gains in the first six months and in Growth in total earnings from $110.3 million the year ended June 30 were concentrated in to $123.9 million reflected chiefly expanded in advances to business concerns and in consumer come on loans, which in the past few years have instalment paper, with automobile paper ac counting for about half of the rise in the latter. been supplying more than half of the gross earn Real estate loans also contributed materially to upward, following declines earlier in the post the continued upward movement in portfolios, war period. Higher average rates or yields were as shown in the preceding table. factors in both cases. The miscellaneous group ings. Income on securities also has been turning The composition of loan portfolios naturally varies considerably from bank to bank, reflect ing among other factors the type of community served, lending opportunities, and bank policies. Business loans continue to dominate the port folios of reserve city banks and real estate loans constitute the largest component at coun try banks. The latest over-all figures for the district show that business loans made up more than two-fifths of aggregate loans and real estate loans approximately one-quarter — proportions not markedly different than those prevailing shortly after the close of the last World War. A little more than one-third of the real estate loan total was insured by the Federal Housing Administration or guaranteed by the Veterans Administration. Rapid expansion in consumer E A R N IN G S , E X P E N S E S A N D P R O F IT S T h ird D is tric t M em ber Banks (D o lla r amounts in m illio n s) F irs t half 1953* Change from a year ago $ % E A R N IN G S : On U . S . G o v’t se c u ritie s. . . On other se c u ritie s................... On lo a n s ...................................... O th e r earnings ........................ $ 27.1 8.8 68.4 19.6 T$ 1.8 4“ -2 + 10.3 + 1.3 + 7% + 2 + 18 To ta l e a rn in g s ........................ $123.9 -|-$ 13.6 + 1 2% EXPEN SES: Sa la rie s and w ages................... In te re st on tim e d e p o sits. . . O th e r e x p e n se s........................ $ 34.7 10.3 27.4 + $ 2.7 + -9 + 2.0 + + + 8% 9 8 To ta l expenses ...................... $ 72.4 + $ 5.6 + 8% $ 51.5 + $ 8.0 + 1 9% $ + $ + N ET C U R R EN T E A R N IN G S . . Recoveries, p ro fits on sales and tra n sfe rs from valuation reserves ...................................... Losses, charge-offs and tra nsfe rs to valuation reserves. . . Taxes on net incom e................... 2.9 7.9 20.6 + + .2 -4 4.3 + 7 7% + 5 + 26 instalment paper has raised this class to over N E T P R O F IT S ............................... $ 25.9 + $ 3.5 + 1 6% one-sixth of the loans of district member banks Cash dividends de c la re d............ $ 12.2 + $ + from one-twentieth in the middle of 1946. 12 * Pre lim ina ry .9 8% b usiness re v ie w of earnings, including service charges on de the increase in expenses from $66.8 million a posits, trust departments, etc., while growing, year ago to the $72.4 million shown by the latest accounts for less than one-sixth of the income figures was in salaries and wages, but in per of district banks. centage the increase was much the same in inter Current expenses, which exclude income taxes, have been rising steadily, but not as rapidly as est on deposits and in the miscellany of other expenses. earnings, with the result that the proportion to Income tax payments, including excess profits total earnings has declined from 64 per cent in taxes, were up substantially, absorbing nearly the first half of 1947 to 58^2 per cent in the one-sixth of total earnings and two-fifths of net first six months of 1953. current earnings during the latest report period. Nearly one-half of CURRENT TRENDS Until recently, much of the business thinking was freely. Total dollar sales by retail stores in the in terms of a moderate downturn after mid-year. United States have run close to record levels Sentiment now appears to be taking a more op since last fall. timistic turn. And there are signs of stability has been well above $14 billion monthly since in various sectors of the economy justifying this change in perspective. Most observers are in the beginning of this year, or about 7 per cent more than in the 1952 period. People have Volume on an adjusted basis clined to feel that the Korean armistice is not bought houses almost as fast as they could be to touch off a cut in Federal spending in the im built. Purchases of new automobiles and major mediate future. Business outlays for productive household appliances were exceptionally heavy facilities promise to be greater than expected earlier this year. Then, during May and June, — another important factor supporting high-level production, employment, and income. No one the general merchandise stores experienced a spurt in business, with dollar volume rising well can predict with certainty what consumers will above its first-quarter level. This reflected, in do. But there might be good reason to expect large part, increased activity in soft goods lines that this new feeling of optimism, if not caught at the country’s department stores. directly by consumers, may be passed on through proves to be the case, the potential problem some Department store business above a year ago observers see in the recent build-up of inventories Nationally and locally, the value of department in their finished stage may dissolve. store sales has maintained a fair margin of in high incomes to maintain liberal spending. If this crease over the first half of 1952. Throughout Retail volume is high by almost any standard the Third Federal Reserve District, monthly Certainly, the record indicates that up to now nounced than a year ago. But in every city for consumers have been spending, and spending which figures are available — except Wilkes- fluctuations in dollar sales have been more pro 13 business re v ie w DEPARTMENT STORE SALES AND STOCKS (Third Federal Reserve District) buoyancy of consumer demand for a wide range of merchandise. INDEX Buying emphasis has shifted recently Sales reports on a departmental basis indicate that buying interest in the early months of this year was quite active in categories such as housewares, floor coverings, and furniture and bedding. Major appliance sales have been some what erratic. They got off to a poor start in January, were maintained in large volume through March and April, but fell off in May. Radio and television business was most active in the late winter, and again in June. Air-con ditioning units sold very slowly until about May, Barre— the over-all trend has been upward since when they rose to a position of leadership in January, with some months showing exception many home-furnishings departments. Most retail Since Easter, the soft goods departments of outlets in Pennsylvania’s hard-coal region have Third District stores have been experiencing experienced a sales lag attributable to depressed some over-all improvement, with sales in an conditions in the anthracite industry, and the increasing number of lines showing appreciable department stores have been no exception. Mer gains over a year earlier. Business in piece goods chants in Trenton, Reading, Lancaster, and York and household textiles started the year very ally large year-to-year increases. — where industry is much more highly diver quietly, but by April, sales volume was above sified— report the largest gains over the first the 1952 level and continued high through June. half of 1952. In women’s apparel and in various ready-towear accessories, some improvement also has At Philadelphia department stores, business generally was disappointing in January, but that been apparent in recent months. Sales of men’s was the only month in which sales fell below and boys’ wear, too, picked up after February, their year-ago level. May sales were exception and May volume was quite high compared with ally large almost everywhere. In the district as a year ago. a whole, the adjusted index for that month was the highest since the post-Korean buying waves Instalment volume has grown of July 1950 and January 1951. In York and In the first four months of this year, instalment Lancaster, dollar volume on an adjusted basis sales were running well ahead of those reported broke all records. Sales declines were the rule in most metropolitan areas in early June. But in early 1952, so that much of the year-to-year this reaction was not entirely unexpected and the preliminary figures covering weekly sales and regular charge-account business was fol lowing closely the 1952 pattern at no increase through July clearly indicated the continuing in 14 increase in total sales was from this source. Cash level. With buying interest focused on business re v ie w items in homefurnishings departments frequently tion of January and June, both months in which bought on a time basis, a high ratio of instal business fell off appreciably, they have main ment to total sales was about what might have tained a fairly satisfactory relationship to sales. been expected in this period. But when con The improvement in sales volume in July, as sumers began purchasing more soft goods— in indicated by weekly figures, should remove most some cases at the expense of household durables of the distortion in the sales-inventory picture — this ratio declined and by June was approxi apparent at the end of the second quarter. Out mately the same as a year earlier. standing orders through the entire first half of Cash and regular charge-account business then began to 1953 followed closely the 1952 pattern, but at show small increases over 1952. a higher level, consistent with this year’s larger volume of business. Collections show some lag Although consumers have been buying more in Third District department stores this year than last, they have not been paying off on their balances as rapidly as in the first six months of 1952. CHECK ROUTING S Y M B O LPROGRESS REPORT The disparity has been much more Use of the check routing symbol continues to pronounced in the case of instalment business gain in this district and throughout the nation. than on regular charge accounts. To some ex A recent test indicates that ninety-one per cent tent this reflects an increase in the volume of of the checks handled by the twelve Federal this type of credit. But it also may be due in Reserve Banks had the symbol in the approved part to more liberal purchase terms available location on some items since the expiration of Regula was a gain of three percentage points in the tion W. Outstanding balances on instalment ac first half of the year. (the upper right-hand corner). This counts showed very little change during the first Third District banks as a group continue six months of 1953, whereas a year ago they among the leaders with 94 per cent, topping were declining. At the end of January, outstand the national average by three points. By states, ings were 16 per cent higher than a year earlier. New Jersey moved from fourth to third position, By June 30 this gap had widened to 22 per cent. Delaware from seventh to fifth, while Pennsyl The unpaid balances on charge accounts, mean vania remained twelfth. while, have not displayed any significant change The Check Routing Symbol Program is de so far this year and have continued to show a signed to speed up the collection of checks. For gap of around 10 per cent, compared with a maximum effectiveness, it is necessary that 100 year ago. per cent of all checks on par banks carry the symbol in the approved location. Attainment of Stocks up sharply in second quarter this goal requires continuing efforts and co Department store inventories rose sharply during operation on the part of bankers, businessmen the second quarter, reaching in June their high and check printers. est level since the fall of 1951. With the excep 15 FOR T HE R E C O R D . . . Factory* !w £ K c , Per cent change June 1953 from SUMMARY mo. ago O UTPUT M anufacturing prod u ctio n . . Construction co n tra c ts !......... C o a l m ining.............................. EM PLOYM ENT A N D IN C O M E Factory em ploym ent............... TRADE** Department store sales......... B A N K IN G ( A ll member banks) Deposits..................................... Loans.......................................... Investments................................ U.S. G ovt, securities........... O th e r ....................................... Check paym ents...................... year ago 6 mos. 1953 from year ago June 1953 from mo. ago year ago 6 mos. 1953 from year ago 0* +3 0 + 2 4 * + 7* 5 +24 - 3 -1 9 0 - 8 +10 +18 -1 0 +18 +12 + 3 - 9 0* 0* + 2 5 * + 6* +40* +16* + +11 + -6 0 + + 2 8 + 3 - 1 1 0 + + 3 9 + + 2 +16 - 5 - 6 0 +17 § +1 + + + 3 +14 - 2 - 3 + 1 +10§ + + + 1t + 1t 4 16 Per cent Per cent Per cent Per cent Per cent change change change change change June June June June June 1953 from 195 3 from 195 3 from 195 3 from 195 3 from mo. ago year mo. ago ago +1 +24 0 +40 + 8 +16 +5 +23 +4 +42 + 3 + year mo. ago ago year mo. ago ago year ago 4 Lancaster. . . +1 + 7 +1 +13 -2 0 + 5 - 8 + 8 + 1 +10 0 + 8 +1 +14 -1 1 + 1 - 7 + 8 + 5 +16 + 4 -1 +17 -1 3 + 3 - 8 +11 + 2 0 +14 +1 +30 - 2 + 5 -1 9 7 - 1 - Reading . . . . -2 + 7 + 3 +11 - 2 - 3 + 5 + 8 T re n to n ......... + 7 +1 +13 - W ilm ington . -1 + 9 +4 +22 -1 5 - 0 0 + + Y o rk ............... +2 +11 +4 +25 -2 3 +10 -1 7 2 1 W ilkes-B arre +1 0 + 1 +19 +13 + + 1 +10 - 5 - 6 4" 1 +10 2 1 year mo. ago ago P h ila d e lp h ia . 1 0 0 1 1 8 *Pennsylvania tP h ila d e lp h ia §20 Cities **A d iu s te d for seasonal va ria tio n . JBased on 3-month moving averages. Stocks Sales 7 PRICES Consum er.................................. Payrolls LOCAL CHANGES 0 +2 +4 +1 +1 -1 +7§ Check Payments Employ ment Per cent change Departm ent Store - 3 + 7 -1 4 + 1 - 3 5 +18 8 +10 +16 7 +38 +36 +12 +10 +28 * N o t restricted to co rp o ra te limits of cities but covers areas o f one or more counties.
@FedFRASER