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THE BUSINESS REVIEW &t,v, RESERVE Disfetezr. DECEMBER i, i937 THIRD FEDERAL PHILADELPHIA S?/! // 59 -i- FEDERAL RESERVE BANK OF PHILADELPHIA/^ ________________ ________________________________________________ Business and Banking Conditions in the United States Volume of industrial production showed a further sharp decrease in October and the first three weeks of November, and there was a reduction in employment. Commodity prices continued to decline. Distribution of commodities to consumers was main tained at the level of other recent months. Production and employment. In October the Board’s seasonally ad justed index of industrial production was 103 per cent of the 1923-1925 average as compared with 111 per cent in September and an average of 116 per cent in the first eight months of this year. There was a marked curtailment of activity in the durable goods industries. Output of steel in gots, which had shown a steady de cline since August, was at an average rate of 59 per cent of capacity in Oc tober and by the third week in No vember the rate had declined to 36 per cent. Automobile production in creased considerably in October as most manufacturers began assembly of 1938 model cars. In the first three weeks of November output of auto mobiles showed little change from the level reached at the end of October, with assemblies by one leading manu facturer continuing in exceptionally small volume. Production of lumber and of plate glass declined further in October. In the nondurable goods in dustries, where output had been de clining since the spring of this year, there was a further decrease in Octo ber. Cotton consumption showed a sharp reduction and activity at woolen mills and shoe factories continued to decline. There was an increase in output at sugar refineries, where ac tivity had been at a low level in Sep tember. In most other lines changes in output were largely seasonal. Min eral production continued at about the level reached at the close of 1936 and maintained throughout this year. Value of construction contracts awarded in October and the first half of November was smaller than in the preceding six weeks, according to fig ures of the F. W. Dodge Corporation. The decline was chiefly in private nonresidential construction. Factory employment declined sub stantially in October and payrolls showed little change, although an in crease is usual at this season. De clines in the number employed were Wednesday figures for reporting member banks in 101 leading cities. September 5, 1934, to November 17, 1937. INDUSTRIAL PRODUCTION FACTORY EMPLOYMENT WHOLESALE PRICES reported by factories producing steel, machinery, lumber, and textiles, and in many smaller industries. There was a seasonal increase in employment at Employment automobile factories. and payrolls increased seasonally at mines and at establishments engaged in wholesale and retail trade. Distribution. Sales at department stores and mail order sales increased seasonally in October. Throughout the year sales at department stores have been sustained, with seasonal fluctua tions, and the Board’s adjusted index of these sales has shown little change. Freight car loadings declined in October and the first half of Novem ber, reflecting smaller shipments of MEMBER BANK CREDIT Commodities 1929 1930 1931 Index of physical volume of production, ad justed for seasonal variation. By months, January 1929 to October 1937. 1932 Index of number employed, adjusted for sea sonal variation. By months, January 1929 to October 1937. 1933 1934 1933 1936 1937 Indexes compiled by the United States Bureau of Labor Statistics. By weeks, 1932 to date. Latest figure is for week ending November 20, 1937. Page One of November the Federal reserve banks purchased $28,525,000 of United States Government securities, in accordance with the policy adopted in-September, to provide additional reserves for meeting seasonal currency and other requirements. From the middle of October to November 17, excess re serves of member banks increased from about $1,000,000,000 to $1,100,000, 000, reflecting the Federal reserve security purchases and a considerable decline in required reserves at member banks in New York City, caused partly by a reduction in demand de foreign products, ore and miscellane ous freight. Commodity prices. Prices of indus trial materials, particularly nonferrous metals, steel scrap, rubber, and hides, declined further from the middle of October to the third week of Novem ber, and there were some decreases in the prices of finished industrial prod ucts. Livestock and meat prices de clined substantially and coffee prices dropped sharply following the an nouncement by Brazil of modification of its control policy. Bank credit. During the first half posits arising from a liquidation of brokers’ loans. Loans to brokers and dealers re ported by banks in leading cities de clined by $250,000,000 during the four weeks ending November 17. Commer cial loans, following a steady increase for several months, declined after the middle of October. Member banks in New York City increased their hold ings of United States Government securities by over $150,000,000, while banks outside New York City showed a further reduction. Deposits con tinued to show moderate reductions. Business and Banking Conditions in the Philadelphia Federal Reserve District sharply over September and as com pared with a year ago, though the total continued substantially smaller than in the pre-depression years. Residential construction declined no ticeably but for the year to date it was still larger than last year. Crop yields this year have been sub stantial, exceeding the average for previous years. Income of farmers from the sale of crops and livestock products has continued the largest in several years, although recently prices of farm products have declined. Industrial employment and payrolls showed little change from September to October, although the usual tend ency is to show a marked rise. Pre liminary returns for November from manufacturing industries indicate a sharp recession in the number t)f wage earners as well as in wage dis bursements and working time. In the period from January to October this year, general employment was 10 per cent and payrolls 25 per cent larger. Business conditions in the Philadel phia Federal Reserve District gener ally reflect a further slackening in in dustrial activity and in employment. The usual seasonal improvement in trade has not materialized to the ex tent that had been expected. Com modity prices at wholesale and retail have declined. The output of manufactures, crude oil and bituminous coal decreased sharply, while production of anthracite increased from September to October. The gain in the output of electric power was smaller than usual during this period. The combined index of productive activity therefore declined to 85 as compared with 91 in Septem ber, 92 in August and a high of 101 in April. A year ago this index was 90. However, in the first ten months this year the average rate of industrial production was 12 per cent higher than in the same period last year. The value of building contracts awarded during October increased Activity at retail trade establish ments failed to show the usual rate of increase from September to October but there was some improvement in the early part of November. Sales this year to the end of October con tinued larger than last year. This was also true of wholesale trade. Inven tories oj merchandise at retail and wholesale establishments are larger than a year ago. Improvement in the month was reported in the sale of life insurance and in income of commercial hotels, while automobile sales in this district declined considerably. Freight car loadings also decreased during the month. Manufacturing. Manufacturing ac tivity in this district has declined further. Current'reports indicate that the market for factory products has been unusually quiet and sales have de creased sharply since the middle of last month. In most lines the volume of new business continues greatly reduced WORKING HOURS AND HOURLY EARNINGS INDUSTRIAL AND TRADE ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PENNSYLVANIA FACTORIES_________ PERCENT .• CENTS HOURS PRODUCTION EARNINGS PER HOUR (avc.) RETAIL TRADE SALES VALUE or BUILDING CONTRACTS HOURS WORKED Sources: F.W.Dodoe Corn tor contracts Minnft for CO.il ADJUSTED TOR SEASONAL VARIATION 1932 Page Two 1933 1934 1935 1936 1937 1938 1932 1933 1934 1935 1936 1937 and unfilled orders generally are smal ler than they were a year ago. Inventories of finished goods showed little change during the month but they were somewhat larger than a year earlier. The supply of raw materials at reporting plants has decreased in re cent weeks and as compared with last year. This has been especially true in the case of woolen textiles, leather goods, and shoes. Prices of factory products at most reporting plants have declined and in some lines they are lower than a year ago. In the country as a whole quo tations for commodities other than farm products and foods increased slightly in the week ended November 20, following decreases for seven con secutive weeks, according to the index compiled by the Bureau of Labor Sta tistics. The latest index was 84 per cent of the 1926 average, as com pared with a high for this year of nearly 87. A year ago this index was 81. Factory employment and wage pay ments in this district declined about 2 per cent from September to October and additional decreases were shown by preliminary data covering the pay roll period nearest to the middle of November. These changes did not measure up to seasonal expectations. The average number of workers em ployed at factories in the first ten months of 1937 was 12 per cent larger than a year ago and the amount of wage disbursements nearly 30 per cent greater. Reports for Pennsylvania indicate that all manufacturing establishments in October employed approximately 980,000 wage earners receiving com pensation of about $24,370,000 a week. A month earlier nearly 992,000 work ers were employed and their wages totaled $24,918,000 a week. Employment and wage payments in Delaware factories showed decreases respectively of 8 and 6 per’cent from September to October. In southern New Jersey employment and payrolls were 7 per cent smaller than in Sep tember. In both sections, however, they continued higher than a year before. Manufacturing output in this district decreased further in October, contin uing a downward trend that has been virtually uninterrupted since April. The seasonally adjusted index pre pared by this bank was 84 per cent of the 1923-25 average in October or 6 per cent lower than a month ago and as compared with October last year. This compared with an in Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not Oct Aug. Sept Oct. be typical. 1936 1937 1937 1937 Oct. 1937 from Manufacturing—total.............. Durable goods.......................... Consumers’ goods.................... Metal products...................... Textile products.................... Transportation equipment. Food products........................ Tobacco and products......... Building materials................ Chemicals and products.. . . Leather and products........... Paper and printing............... Coal mining................................ Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output...................................... Sales, total!............................ Sales to industries!............... 92 92 94 91 109 85 90 89 122 147 93 92 55 r 41 52 r 37 78 76 459 528 91 89 91 89 106 80 87 80 100 43r 130 122 93 55 52 79 532 232 231 173 246 237 244 234 171 178 86 92 96 90 91 74 99 47 88 82 97 44 121 124 248 239 166 Distribution Retail trade —sales.................... stocks................ Wholesale trade—sales................... stocks................ Life insurance sales.......................... New passenger auto, registrations Hotels—Occupancy. . .(1934 =100) Income, total (1934 =100) Freight car loadings—total........... Merchandise and miscellaneous Coal................................................. 82 81 73 82 100 84 71 r 76 102 98 3* + 3* + 9* - 5* + 12* 88 +31* 88 +19* 92 92 104 95 92 91 97 r 95 90 87 0* 1* + 4* + 10* + 10* 121 +25* 169 123 126 126 189r 183r 186 - 6 -20 + 2 + 10 +10 + 4 — 10 - 3 _ 4 — 4 + 4 1* 2* +37 — 36 +52 +23 - 3 2 — + 33 — 10 + 3 7 1 _ — 8 — + 5 + 8 — 21* + 0* + 8* — 6 — 6 + 50* +206* 88 85 32 81 Wholesale (1926 = 100). Farm products............... Foods............................... Other commodities.... Philadelphia................... Scranton.......................... July 1937 + 16* + 7* + 4* + 12 + 13 + 5 +20* +57* -10* 42 +79* 19 + 8 - 2 _ _ 2* 6* 3* 1* 1* 1* 2* — Oct. 1936 +33* - 6* - 9* - 8 - 8 — 2 +1 +1 — — — — — Retail food.......................... + 6 + 16 2 Aug. 1937 + _ + + -i+ 5* 4* 4* 6* 3* 2* 0* + 8* +12* + 6* + 8* + 4* + 5* + 4* 57 39 72 71 22 53 572 94 64 80 81 96 93 75 r 77 93 83 68 154 112 140 152r 100 78 80 78 79 78 60 +1 0 5 -23 +35 +26 - 6 60 49 52 108 19 47 262 +14 + 3 + 10 + Prices—United States (In millions of dollars) 241 244 242 234 181 172 -11 2 Number............................. Amount of liabilities.... Check payments.................... Rate of collections (actual) Retail trade........................ Wholesale trade................. 236 227 171 -12 + 4 + 7 — 8 + 26 83p 83 86p 78p 107 Business liquidations Payment of accounts + 8 239 + 9 231 + 9 168 92 12 — 1 + 2 55 40 74 71 21 28 67 61 493 509 100 + 2 + 1 + 2 7 7 3 3 — 52 44 59 73 90 r 85 93 75 98 75p 92 81p 113 44p 127p 115p 93 70p 69p 77 518 93 _ 56 41 71 65 24 55 428 106 81 83 85 116 46 r 129 134 93 r 56 53 81 532 -11 - 1 -19 + 6 + 1 - 6 10 + 10 — + + Residential!.................................. Non-residential!.......................... Public works and utilities!. . . . Permits for building—17 cities. . . Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. .. . 90p 87p _ 10 Factory—Wage earners......... Payrolls................................. Man-hours (1927-28=100) General (1932=100) Employment........................ Payrolls.................................. Building and real estate Contracts awarded!—total........... 92 91 - 1 + 1 + 3 - 8 +13 92 + 12 94 93 +13 92 +23 + 6 +28 98 114 + 5 94 80 +17 87 87 83 + 5 78 + 7 121 103 +23 50 49 124 +n 123 +ii 130 150 +n 94 89 - 7 68 41 -10 67 r 37 +10 84 71 +16 459 528 6 8 Employment and wages— Pa. Oct. Aug. Sept. Oct. 1936 1937 1937 1937 inos. 1936 - 5 - 6 - 1 6 6 72 518 1937 from 10 Month Year ago ago Industrial production .... Not adjusted Per cent change 51 57 40 40 57 72 67 69 19 28 58 58 254 367 85 r 95p 88 92 106 98p 78 82p 80 98 114 90 131 131 128 139 81 74 80 72 71 77 68 34 208 10 51 31 91 75 81 89 32 77 29 78 28 81 33 78 81 84 83 80 83 85 80 87 87 85 80 85 85 85 87 80 86 86 87 86 85 89 83 88 86 86 88 81 % change from Sept. 1937 Oct. 1937 Month ago Year ago Banking and credit Federal Reserve Bank Bills discounted.............................. % 0.2 Other bills and securities............. 214 Member bank reserves................. 406 Reserve ratio (per cent)............... 73.3 Reporting member banks Loans................................................. $ 449 Investments..................................... 732 Deposits (a)..................................... 1,491 Bankers’ acceptances outstanding. 12.7 $ 1.1 218 385 73.1 $ $ 463 714 1,417 13.4 $ 0.9 217 369 72.9 $ 474 708 1,394 13.5 $ * Computed from data unadjusted for seasonal variation. ! Not included in production index. ! 3-month moving daily average centered at 3rd month. 0.8 217 360 72.5 $ 479 692 1,374 14.6 $ 2.1 217 365 72.5 469 681 1,374 15.8 +162 +950 0 + 1 0 + 1 - 10 - 1 + 0 8 + - 4 7 - 8 + 24 p—Preliminary. r—Revised, (a) Less cash items in process of collection. Page Three TEXTILE FIBERS METAL PRODUCTS-EMPLOYE HOURS WORKED UNITED STATES MILLIONS OF LBS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT MILL TAKINGS PER LB PRICES 450- STEEL WORKS AND ROLLING MILLS FOUNDRIES AND MACHINE SHOPS 50 - 1935 1932 1933 1934 1935 dex of 89 in September, 92 in August and a high for this year of 98 in April. Production in the first ten months, however, was 13 per cent above the corresponding period of 1936. The decrease in the month was somewhat more pronounced in indus tries producing consumers’ goods than in those manufacturing durable goods, although in both cases the reduction was substantial. The decline in ac tivity of plants making non-durable goods has been almost continuous since last March, whereas in the case of the heavy industries the recession did not begin until August. Production of durable goods was about one per cent smaller in October this year than last and that of consumers’ goods was 11 per cent smaller. Productive activity in all the major groups except transportation equip ment: was at a lower level in October than in September. Compared with a year ago, there were exceptionally sharp decreases in the case of textiles, building materials and leather manu factures. Marked declines in October were shown in the output of such metal products as pig iron, steel and castings. Production of motor vehicles declined but there was a substantial increase in the manufacture of automobile parts and bodies and in activity at shipbuild ing establishments. At textile plants operations in the cotton and woolen branches were sharply curtailed and there was a drastic decline in carpet and rug pro duction. Output of knit goods, in cluding hosiery and underwear, failed to show the usual expansion in Oc tober and was in smaller volume than a year earlier. In the case of the food industries, Page Four 1936 1936 1937 1938 1935 1936 1937 sugar refining receded to a very low level in October and activity of can neries showed a small decline instead of the customary sharp increase. Output of building materials, chiefly cement, brick and lumber, declined more than it usually does in October. Shoe production decreased to the low est level this year and activity at plants engaged in the manufacture of goat and kid leathers slackened. Electric power production increased by a smaller percentage than usual from September to October but was 2 per cent larger than a year ago. Out put of eight central stations was 8 per cent greater in the first ten months this year than last. Sales of electrical energy decreased in October following a larger than seasonal gain in Sep tember. Coal and other fuels. The anthracite market has been somewhat more active lately, reflecting largely an improve ment in the demand for steam sizes. Colliery output in October increased by a larger percentage than usual but decreased noticeably in early Novem ber. Shipments in October showed a pronounced gain for the second con secutive month and were the largest since February 1936. Production in the first ten months was 10 per cent and shipments 4 per cent smaller than a year ago. Demand for Pennsylvania bitumi nous coal has slackened since the middle of last month, owing principally to smaller takings by manufacturing plants. Output of mines declined in October, contrary to seasonal tendency, and showed some further decrease in early November. Shipments increased in the month but were less than in October of last year. In the first ten months of 1937 production was 10 per cent and shipments were 4 per cent greater than in the same period last year. (Output and shipment figures are daily averages) Anthracite Production.................tons Shipments..................tons Stocks................1000 tons Prices........... (1026-100) Employment..............No. Bituminous Production.................tons Shipments.......... No. cars Prices........... (1926=100) Employment..............No. Coke Prod. . . .(1923-25=100) Prices........... (1926-100) Gas and fuel oil Prod. . . .(1923-25=100) Prices........... (1926-100) Per cent October change from 1937 Month Year ago ago 183,200 192,000 2,39It 78.8 98,161 +31 +37 + 6 + 0 + 6 + 3 +14 + 2 - 4 366,077 29,464 99.3 132,322 + + + + + 5 3 0 2 + 2 8 2 2 1 120.3 105.3 -12 + 0 - 1 + 8 134.9* 71.6 - 5 + 5 + 5 + 2 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. f October 1. Output of by-product coke declined sharply in October, following substan tial gains in the preceding quarter. Production of gas and fuel oils also decreased from the relatively high level prevailing in September. Com pared with a year earlier, production of coke was smaller, but that of gas and fuel oils was larger. Building. Awards of building con tracts in this district in October reached nearly $15,800,000, a gain of 34 per cent as compared with a month and year ago. The increase over September was larger than customary and reflected a marked expansion in the volume of unclassified construction of non-residential character. Con tracts let for dwellings were consider ably smaller in October than a month' before, owing to a sharp decrease in awards for one and two family houses. The value of awards for public works and utilities also declined and was 29 per cent smaller than a year earlier. Total awards for the first ten months VALUE OF BUILDING CONTRACTS AWARDED STOCKS OF MERCHANDISE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT 1923-25AVG.= 100 90 RETAIL .PRICES OF BUILDING MATERIALS (i926»ioo) 1■ iM» 70 1 1 NON RESIDENTIAL WHOLESALE 60 RESIDENTIAL 50 40 1932 1933 1934 1935 1936 of 1937 amounted to $144,000,000 and were the greatest for that period since 1931. Even so, this amount is only about 40 per cent of the average for the same period from 1923 to 1929. Building contracts Philadelphia Federal Reserve District Per cent change October 1937 1937 (000’s From from omitted) month 10 ago mos. 1936 * 4,800 1,414 3,380 8,424 Commercial..................... 1,191 633 524 All other........................... 6,076 12 + 39 — 24 + 136 + 16 + 3 — 61 +911 + 19 + 10 + 13 +123 — 30 + 13 Total buildings.......... $13,224 Public works and utilities. 2,549 + 47 - 7 + 13 - 23 Grand total................. *15,773 + 34 + + 16 2 Source: F. W. Dodge Corporation. Wholesale prices of building mate rials have shown a declining tendency for several months, though the current level continues higher than last year. In the third week of November the Bureau of Labor Statistics’ index measuring prices of essential mate rials used in building and construction was about 94 per cent of the 1926 aver ages as compared with a high for this year of 97. A year ago this index was about 88. The general price index covering 784 commodities in the week ended November 20 was 82.9 as against 82.4 a year ago. Agriculture. Agricultural production in this district, as in the country, dur ing 1937 was one of the largest in many years and cash income of farm ers in the first three quarters of this year reached the largest volume since 1930. Rising income reflected in part higher prices earlier in the year for farm products, including livestock and 1937 ADJUSTED FOR EASONAL VARIATION 1934 1938 poultry. However, in recent months a marked recession has occurred in prices for farm crops, particularly grains. The extent of recovery in farm in come since the depression is shown in the figures below: Sales of farm products— Pennsylvania, New Jersey and Delaware First 9 months of 1937 (000’s omitted) 1936 1933 1929 Crops.................. Livestock and products......... $88,893 +24 +78 + 2 187,603 +n +67 -13 Total.......... $276,496 + 15 +70 - 8 Per cent change from Wholesale prices of farm products have shown a pronounced downward tendency since September. In the week ended November 20 they were nearly 21 per cent below the 1937 high reached early in April, and were 11 per cent lower than a year ago. Distribution, trade and service. Dollar sales by department, apparel, shoe and credit stores in October were 12 per cent greater than in September, but this increase was not as large as was to be anticipated at the season. General hesitation in buying on the part of the public was indicated by the fact that indexes of sales, when ad justed for seasonal variations, declined in all of the lines covered, the smallest decrease being 2 per cent in the case of department stores. Compared with October 1936, sales were slightly larger, and for the year to date they show a gain of 6 per cent over the same period of 1936. Business at wholesale dropped be low the usual seasonal level in Octo ber when aggregate sales registered a decline of 8 per cent instead of the usual increase of 1 per cent. In only two of the eight lines for which data 1935 1936 1937 1938 are received was the change in sales from September to October up to ex pectations. Compared with a year ago total sales showed a gain of 3 per cent, and for the first ten months of the year wholesale trade was 16 per cent larger than in the same period of 1936. Total freight car loadings in this section, seasonal changes apart, have been declining since March. The de crease in October reflected smaller shipments of livestock, coke, forest products, ore, and merchandise and mis cellaneous commodities. Grain alone showed a more than seasonal gain. Rail freight consisting for the most part of manufactures shipped from the Philadelphia industrial area showed a substantial increase in October over September and as compared with last year. Sales of new passenger automobiles in this district declined further. How ever, sales in October were substan tially greater than a year ago and were the largest for that month in any year since 1929. The dollar volume of re tail sales for the country as a whole increased in the month and was sub stantially larger than in the previous two years. There was practically no change in room occupancy of Hotel business Philadelphia Federal Reserve District Room occupancy.................... Per cent of capacity used: Oct. 1937................ 61.0 Sept. 1937........... v. 60.6 Oct. 1936............... 64.6 Income from: Guest rooms........................ Food....................................... Other sources...................... Total revenue.................. non-resort com- Oct. per cent change from from Month Year ago ago mos. 1937 10 1936 - 0 + 0 — 0 - 6 + 1 +20 + 8 - 5 - 9 -17 +4 +0 + 8 - 9 +4 +7 +7 Page Five mercial hotels from September to Oc tober. An increase of 8 per cent in revenue was due largely to a gain in income from food. Banking conditions. The reserves of member banks averaged $363,000, 000 during the first half of November. At this level the excess was $60,000, 000 or 20 per cent above requirements. This proportion was substantially the same as that for the entire country, as indicated by weekly estimates. The ratio of excess at reserve city banks in this district was 17 per cent, com paring with an average of 16 per cent in October, 11 per cent in September, and 33 per cent in May, when the final increase in requirements became effective. Excess reserves of country banks ranged from 24 to 28 per cent of requirements in the period from May to October, and in the first fif teen days of November averaged nearly 25 per cent. Reserve balances of member banks (Dollar figures in millions) Held Re Ex quired cess Ratio of ex cess to re quired Reserve city banks Averages: Oct. 1-15............... $219.6 $189.6 $30.0 16% Oct. 16-31................. 217.4 187.6 29.8 16” Nov. 1-15............... 218.4 187.1 31-3 17” Country banks Averages: Oct. 1-15............... Oct. 16-31............... Nov. 1-15............... 148.6 116.8 31.8 27 ” 144.5 116.3 28.2 24 ” 144.6 116-1 285 25 ” Borrowings of member banks from this bank increased from $1,800,000 to $2,400,000 in the four weeks ended November 17, and there was some in crease in the number of banks ac commodated. Discounts, while still small, are $2,100,000 larger than a year ago. In late weeks this bank’s holdings of United States securities have increased $2,600,000 to $216,000, 000 as a result of its participation in Federal Reserve System holdings. The System purchased $28,000,000 of se curities in the two weeks ended No vember 17. In the four weeks to November 17 Treasury receipts from taxes and other usual sources were augmented by sub stantial amounts of unemployment in surance funds, turned over by the states for investment, and supple mented by the withdrawal of $6,000, 000 from depositary banks in this dis trict. Nevertheless disbursements were in even greater amount, the net result of Treasury operations being the addi tion of nearly $10,000,000 to the sup ply of available funds. The effect of this addition upon reserves, however, was more than offset by other factors, Federal Reserve Bank of Philadelphia (Dollar figures in millions) 17, 1937 Bills discounted......... $ 2.4 Bills bought................ 0.3 Industrial advances. . 3.6 United States securi ties ........................ 216.0 Total bills and se curities ................. Federal reserve note circulation............... Member bank reserve deposits.................... U. S. Treasurer— general account. . . Foreign bank deposits Other deposits............ Total reserves............. Reserve ratio.............. Changes in— Nov. Four weeks One year +*2.1 - 0.0 - 1.4 Assets Commercial, industrial and agricultural loans: + 2.6 + 7.0 Otherwise secured and unsecured....................... Open market paper............. Loans to brokers and deal- +$3.2 +*7.7 315.5 + 1.7 +13.9 5.2 26.2 6.2 514.8 72.3% (000,000’s omitted) +$0.6 + 0.0 - 0.0 $222.3 359.4 Nov. 17, 1937 Reporting member -10.7 + + - 3.8 -44.5 + 2.5 +21.3 + 4.4 -12.1 0.3% - 1.4% 1.2 0.1 6.9 chief among which were an adverse balance of $14,000,000 in commercial and financial transactions with other parts of the country and an increase of $4,400,000 in currency demand. Ac cordingly, member bank reserve de posits declined $10,700,000. Expan sion in the demand for hand to hand currency was only about half of that in the corresponding period last year, reflecting the influence of business re cession on seasonal currency require ments. Deposits at the reporting member banks on November 17 were little above the level reached a fortnight earlier, which was the lowest point since 1935. The decrease in the past four weeks has amounted to $20,000, 000. Half of this was in deposits held for other banks. There also has been a further de crease in the credit extended by the reporting banks. A decline of $4,000, 000 in loans was due chiefly to re payments by commercial customers. Commercial loans now are $9,000,000 under the peak reached in September. Loans of all types on November 17 exceeded those of a year ago by $17, 000,000, reflecting chiefly larger bor rowings by industry, commerce and agriculture. Investments have decreased $4,000, 000 in the last four weeks, continuing the generally downward trend shown over most of this year. Only $1,000,- $ Chan ges in Four weeks One year -$ 4 - 1 * * 44 171 22 * 19 Other loans to purchase or carry securities.................. 36 60 -$11 - * 1 - 2 2 Other loans: On securities...................... Otherwise secured and unsecured....................... Total loans........................ $ United States Government securities............................. Obligations fully guar, by U. S. Government........... Other securities..................... 49 + i * 59 + i * +S17 462 -* 4 314 ~ 1 - 19 94 269 - 2 1 + i - 37 Total loans and investments............................... $1,139 Reserve with Federal Reserve Bank......................... 228 Cash in vault........................ 18 Balances with other banks. 135 88 Liabilities Demand deposits, adjusted $ 796 Time deposits........................ 286 U. S. Government deposits. 8 Interbank deposits............... 268 -$ 8 —$38 - 9 + i - 4 - 58 + i - 35 -* 3 - 3 - 4 - 10 —*27 + 11 - 47 - 69 23 227 + + 1 1 * Comparable figures not yet available 000 of this decline was in direct secur ities of the United States Government, holdings of which have been quite stable recently. Net profits of member banks in this district amounted to $16,000,000 dur ing the first half of 1937. This was the highest point since the depression low reached in the last half of 1932 and represented an increase of ap proximately $2,800,000 over the first six months of 1936. This gain was due only in small measure tq expan sion in earnings from current opera tions, as increases in gross earnings were largely balanced by heavier expenses. The principal factor was a reduction of $6,600,000 in losses and depreciation, which more than offset a decline of $4,000,000 in recoveries on charged-off assets and profits on security sales. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Oct. 27 Nov. 3 Nov. 10 Nov. 17 Changes in four weeks Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict).......... Treasury operations..................................................... + 3.1 -12.0 - 1.1 -6.5 +0.8 +6.9 + 1 .2 + 8.8 + 3.9 + 0.3 -11.6 -0.1 - 1.9 -14.0 + 9.6 Total............................................................................. -10.0 +1.2 +13.9 -11.4 - 6.3 Uses of funds: Currency demand......................................................... Member bank reserve deposits .................................. “Other deposits” at reserve bank........................... Unexpended capital funds.......................................... + 1.2 -11.4 + 0.2 + 0.0 +3.0 -2.1 +0.3 -0.0 + + - - 4.1 7.1 0.1 0.1 + 4.4 -10.7 + 0.1 - 0.1 Total............................................................................. -10.0 + 1.2 +13.9 -11.4 - 6.3 Changes in weeks ending— 4.3 9.9 0.3 0.0 Employment and Payrolls in Pennsylvania SECURITY HOLDINGS REPORTING MEMBER BANKS PHILA. FED. RES DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes Employment* U S GOVERNMENT DIRECT OBLIGATIONS (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weight ed proportionately.) OTHER SECURITIES U.SG0VT FULLY GUARANTEED OBLIGATIONS 1935 193 7 193 6 CURRENCY DEMAND PHILADELPHIA FEDERAL RESERVE DISTRICT (Changes cumulated from Jan.1,1932) MILLIONS + 100 MILLIONS Employehoursf Payrolls* Oct. 1937 Per cent Per cent Oct. per cent Oct. change from index change from change from index 1937 1937 Oct. Sept. Oct. Sept. Oct. Sept. 1936 1937 1936 1937 1936 1937 All manufacturing........ Iron, steel and products. . Non-ferrous metal prod.. . . Transportation equip.. . . Textiles and clothing.... Textiles........................... Clothing.......................... Food products................... Stone, clay and glass........... Lumber products.................. Chemicals and products. Leather ana products.... Paper and printing.......... Printing.......................... 91 90 127 68 101 97 120 108 89 65 97 90 100 94 + 3 + 13 + 8 1 — 6 — 6 — 7 + 1 + 3 2 + 6 6 + 4 + 2 -1 -2 -5 -1 -2 -2 -2 +i -1 -2 +i -2 +i +i 95 105 149 67 91 90 95 112 91 60 105 76 104 99 + 9 +18 +16 - 1 - 6 - 5 -12 +10 +11 - 0 + 16 -15 + 7 + 5 -2 -6 -5 +5 +1 +1 +1 +1 +3 -1 -1 -6 +2 +3 - 5 - 3 - 2 - 7 -15 -15 -17 - 3 - 1 -12 - 1 -20 - 1 - 1 -3 -6 -4 +5 -2 -2 —3 +1 +1 -1 -1 —5 +i +i Cigars and tobacco. . . Rubber tires, goods......... Musical instruments. . 70 83 57 + 1 2 + 4 +2 -1 +1 69 91 60 +10 + 8 +22 +5 +4 +4 +1 -11 + 7 +5 +5 +3 * Figures from 2340 plants. t Figures from 2096 plants. - General Index Numbers 1937 + 60 Covering twelve branches of trade and industry (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) 1936 General index - 40 - -60 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV DEC. Percentage change—October 1937 from October 1936 City areas* Manufacturing Employ ment Wage payments Allentown............. Altoona................. Harrisburg........... Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. . . . Williamsport.... Wilmington.......... York...................... + 8 - 6 +12 +18 + 1 + 2 + 0 + 0 + 2 + 5 + 2 + 2 +17 -11 +12 + 19 + 3 + 9 + 6 + 0 + 2 + 8 +13 +10 + 0 Allentown............. Altoona................. Harrisburg........... Johnstown............ Lancaster............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre.... Williamsport. . . . Wilmington.......... York....................... + 1 - 1 - 1 - 1 - 2 - 1 - 1 - 1 - 1 + 0 + o — 5 +1 Building permits (value) + 138 + 30 + 53 - 8 - 72 + 23 - 12 + 27 + 15 + 75 +543 + 28 Debits (weighted)___ Manufacturing............................. Anthracite mining...................... Bituminous coal mining............ Building and construction........ Quarrying and non-met. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning.................. Employment Oct. Payrolls Per cent change from Oct. index Oct. Sept. 1936 1937 126 143 + 4 + 3 +0 82 + 2 + 1 +6 +2 125 98 125 164 100 122 119 117 108 111 Per cent change from 1937 1937 186 232 95 245 136 244 176 111 135 121 131 125 133 -1 +15 + + + + index -1 -1 +1 +1 +5 +1 +2 5 1 7 3 + 5 + 8 + 6 + 3 -2 +0 Oct. Sept. 1936 1937 +10 +1 - 2 + 9 + 5 + 9 +22 + 13 + 11 + 9 +10 +11 +14 + 9 +62 +10 + 1 - 3 - 1 + + + + 3 4 1 6 - 0 + 3 Retail trade sales + 7 + 8 + 9 +21 + 5 -10 + 5 - 4 + 6 - 5 + 8 - 9 + 4 - 3 + 6 +1 +1 +10 + 2 +28 + 4 - 1 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT PAYROLLS October 1937 from September 1937 - 3 + 7 - 6 -11 - 3 +1 + 2 + 3 - 5 + 2 + 4 - 4 - 3 +210 - 61 + 85 - 27 - 34 + 25 + 76 + 83 + 94 - 49 - 17 +336 + 8 +20 + 9 + 8 + 5 +10 +15 +13 . +13 +19 + 8 + 11 - 4 + 7 +24 + 6 + 7 + 8 +21 +15 +14 +13 +10 +12 EMPLOYMENT +25 1932 1933 1934 1935 1936 1937 * Area not restricted to the corporate limits of cities given here. Page Seven Index numbers of individual lines of trade and WHOLESALE TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT manufacture Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 BOOTS AND SHOES Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted Per cent ch ange Unadjusted indexes reflect merely the actual change which may or may not Oct. Aug. Sept. Oct. be typical. 1936 1937 1937 1937 Retail trade Sales Total of all stores........................... 82 81 Department................................. 73 r 72 Men’s apparel............................. 81 75 Women’s apparel....................... 107 r 126 Shoe............................................... 87 r 64 Credit............................................ 92 r 87 90 r 76r 84 132 92 104 r 83p 74 81 110 87p 92 Oct. 1937 from 1937 from 10 Month Year mos. ago ago 1936 Oct. Aug. Sept. 1936 1937 1937 - 7 - 2 - 4 -16 — 5 -12 +1 + 2 + 0 + 3 + 0 - 1 + 6 94 + 5 84 r + 10 85 + 8 120 r + 2 89 r + 9 113r 64 56 57 86 48 83 — 1 - 1 -12 — 6 — 1 +14 + 8 + 3 + 7 +17 81 64 126r 73 104 r 80 57 110 79 106 85 r 75 r 70 114 94 99 r Oct. 1937 95p 85 85 123 89p 112 Nr Stocks of goods 73 56 99 r 66 98 r 82 61 125 79 108 85 83 61 60 116 102 76 71 116 114 92 V f^yj SALES 50 126 129 Rate of stock turnover - 7* 3.34 3.11 ELECTRICAL APPARATUS Wholesale trade Sales Total of all lines............................. 84 100 Boots and shoes.......................... 54 54 Drugs............................................ 108 r 108 Dry goods.................................... 52r 56 Electrical supplies...................... 69 r 130 Groceries...................................... 111 129 Hardware..................................... 62 60 Jewelry................................ 71 67 Paper............................................. 80 81 93 86p 44 36 112 109p 49 50 96 84 p 125 115p 63 63 95 69 74 71 - 8 -19 - 3 + 3 -12 - 9 + 0 -28 - 5 + 3 -34 +1 - 2 +22 + 3 + 1 - 3 -12 +16 90 - 9 67 +n 105r + 17 69 r +56 89 r + 7 121 +12 71 +25 95 +14 86 93 61 101 52 107 126 54 59 77 106 98p 63 44 116 106p 65 67 115 108p 139 125p 66 72 118 92 76 75 75 78p 37 30 50 50 105 112 78 83p 83 85 60 68 64 61 + 5 -18 - 2 + 7 + 7 + 3 +13 - 4 +10 + o +11 +12 + 7 + 7 +14 +1 75r 29 47 112r 82 r 76 62 62 77 41 52 109 78 82 63 67 78 82p 38 30 55 52 112 125 Stocks of goods Boots and shoes.......................... 71 r 30 45 lOOr 76 38 49 102 77 x 83 80 83 59 56 60 66 81 65 65 GROCERIES 81 71 62 Rate of stock turnover + 9* Output of manufactures Pig iron.................................................. Steel..................................................... Iron castings......................... Steel castings....................................... Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies........... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds......................... Cotton products.................................. Carpets and rugs........... Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and products........................ Slaughtering, meat packing............. Sugar refining...................................... Canning and preserving.................... Cigars................................. Paper and wood pulp........................ Printing and publishing.................... Shoes.................................................. Leather, goat and kid........................ Explosives................................. Paints and varnishes......................... Petroleum products........................... Coke, by-product............................... 58 95 69 120 105 19 75 37 287 102 70 56 130 105 137 64 53 33 87 43 57 98 69 98 144 101 98 83 151 124 91 104 81 136 12o 13 76 45 264 86 54 69 109 111 125 50 on 34 84 89 67 96 77 95 167 127 92 76 160 139 91 102 72 143 118 20 69 r 42 264 92 r 48 60 91 109 HOr 47 58 r 32 90 60 59 99 72 98 r 136 109 94 80 170 142 75 87 60 114 118 16 87 43 291 89 40 49 54 99 104 46p 56 31 86 30 43p 91 70 96 111 105p 94 82 162p 123 * Computed from data unadjusted for seasonal variation. Page Eight -17 -15 -17 -20 + 0 -21 +25 + 10 - 3 -18 -18 -40 - 9 - 6 - 3 - 3 - 4 + 1* - 4 -49 -19 - 8 - 3 - 1 -19 - 3 +1 + 3 — 5 -14 +29 - 8 -13 - 5 +13 -17 + 15 +18 + 1 -13 -43 -13 -58 - 5 -25 -29 + 6 - 8 - 0 -30 -15 - 7 +1 - 1 -23 + * - 4 - 2 + 8 ~ 1 +63 +27 +20 +28 +28 +52 + 13 +37 +12 + 8 - 6 +25 + 7 - 1 - 1 +34 +22 -11 + 4 + 4 +12 +ii +15 + 5 + 12 + 10 + 9 + 19 4.96 58 95 73 114 114 17 71 35 276 104 77 58 148 115 150 72 53 35 90 91 36 75 120 71 99 155 105 99 89 152 121 p—Preliminary. 5.41 81 106 79 131 139 11 71 45 262 84 85 97 72 130 130 17 66 40 251 92 r 62 100 97 116 63 58 37 57 99 109 llOr 55 59 r 34 75 87 63 109 129 14 82 41 279 91 43 51 59 109 113 51p 57 32 STOCKS A SALES JEWELRY 1 STOCKS S’- f> Li** S 73 76 74 102 77 92 179 122 92 77 161 136 90 26 73p 112 72 97 120 llOp 95 88 163p 120 r—Revised y»V* 92 52 77 115 72 97 156 113 94 76 172 136 JP/ SALES SALES ---------------- STOCKS-"' 1933 1934 i 1935 1936 1937
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