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JL THE BUSINESS REVIE THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT DECEMBER i, 1938 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States > * I Industrial production continued to increase sharply in October and the first three weeks of November, reflect ing principally larger output of steel and automobiles. Wholesale commod ity prices showed little change in this period. Volume of employment and national income increased in October. Production. In October the Board’s seasonally adjusted index of indus trial production was at 96 per cent of the 1923-1925 average, as compared with 90 per cent in September. Steel ingot production increased consider ably, averaging 53 per cent of capacity in October, and in the first three weeks of November there was a further sub stantial advance. In the automobile industry output was increased rapidly during October and the first three weeks of November both to stock dealers with new model cars and to meet the increased volume of retail demand accompanying the introduc tion of new models. Production, which in the first nine months of 1938 had been at a considerably lower level, was at nearly the same rate as in the corresponding period in other re- cent years. Output of plate glass also increased sharply further in October. Cement production showed a consid erable increase, while lumber produc tion declined slightly. Activity at textile mills, which had risen sharply during the summer, con tinued at about the August and Sep tember rate, although usually there is an increase at this time of the year. Shoe production declined somewhat further in October, and there was a decrease in output of tobacco prod ucts, while in most other industries manufacturing nondurable goods, changes in output were largely sea sonal in character. Mineral produc tion showed a further moderate rise, reflecting in large part increased out put of crude petroleum and nonferrous metals. Lake shipments of iron ore also were in larger volume, al though a decrease is usual in October. Coal production increased seasonally. Value of construction contracts awarded in 37 Eastern States increased considerably in October, according to figures of the F. W. Dodge Corpora tion, reflecting chiefly a sharp rise in awards for public projects. Contracts for hospital, educational, and other public buildings included in the Public Works Administration program were in large volume, and there was a further increase in contracts awarded for slum clearance projects of the United States Housing Authority. Employment. Employment and pay rolls increased somewhat further be tween the middle of September and the middle of October. At automobile fac tories employment continued to rise MEMBER BANK RESERVES y///, lavloo nutnit* ’'--TV fc-. /T7/ Wednesday figures of total member bank re serve balances at Federal reserve banks, with estimates of required and excess reserves, Jan uary 3, 1934, to November 23, 1938. FACTORY EMPLOYMENT AND PAYROLLS WHOLESALE PRICES Index of physical volume of production, ad justed for seasonal variation. By months, Jan uary 1934 to October 1938. Indexes of number employed and payrolls, without adjustment for seasonal variation. By months, January 1934 to October 1938. In dexes compiled by the United States Bureau of Labor Statistics. Index compiled by the United States Bureau of Labor Statistics. By weeks, 1934 to week ending November 19, 1938. Page One sharply and there were further mod erate increases in most other durable goods industries. The number em ployed at canning establishments de clined and in other nondurable goods industries showed little change. Em ployment increased somewhat at mines, on the railroads, and in the construc tion industry, while in trade the rise was less than seasonal. Distribution. Sales at department and variety stores and by mail order houses showed less than the usual seasonal in crease in October, partly because con sumer buying of winter merchandise was retarded by unseasonably warm weather during most of the month. In the first two weeks of November de partment store sales increased mod erately. Freight-car loadings rose consider ably further in October, owing largely York City banks and reflected the re tirement of State and local government obligations held by these banks. Ad justed demand deposits, which reached an all-time peak of $16,000,000,000 at reporting banks in the last week in October, also decreased somewhat in the first half of November. Member bank reserves in the middle of Novem ber were at about the high level reached a month earlier. Money rates and bond yields. The prevailing rate on open-market com mercial paper declined slightly in November to ^ of 1 per cent, a new low level. Other short-term open-mar ket rates were unchanged. Yields on U. S. Government securities and on high-grade corporate bonds showed only small changes during November, continuing close to the low levels reached in October. to increased shipments of grains, coal, and miscellaneous freight. In the first half of November loadings showed a seasonal decline. Commodity price*. Wholesale com modity prices generally showed little change from the middle of October to the third week of November. Prices of steel scrap and leather advanced. Tin plate prices, on the other hand, were reduced, and there were also de creases in zinc, hides, and rubber. Prices of farm products and foods showed small fluctuations in this period. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities declined by about $150,000,000 during the first half of November, following a substantial in crease during October. The decline in November was almost entirely at New Business and Banking Conditions in the Philadelphia Federal Reserve District tive month, aggregate contract awards exceeded the levels of a year ago, but the total for the ten months was well below the comparable period in 1937. The number of workers employed at manufacturing and nonmanufacturing establishments increased 2 per cent and the amount of wages disbursed, 7 per cent from September to October, but the volume of both continued substan tially smaller than a year ago. The largest gains in the month occurred in the coal mining industry, manufactur ing, building and construction, retail trade, and hotels. Preliminary reports from manufacturing industries indi- creased less than is usual in this pe riod. Production of crude petroleum in this district registered an actual de cline. Early reports indicate a further recession in textile activity. The value of building contracts awarded in October increased sub stantially over the previous month and, except for last April, was at the high est level in more than a year and a half. The latest gain was due for the most part to an increase in nonresidential construction, although contracts let for family houses also showed marked im provement, following a sharp reduction in September. For the second consecu Industrial production in the Phila delphia Federal Reserve District, after advancing more than seasonally for two successive months, continued at about the same level in October as in the previous month, but was still no ticeably lower than a year ago. The October level was sustained by the ex panding output of durable goods, in cluding iron and steel products, trans portation equipment, and building materials. This upward trend con tinued in November. Production of consumers’ goods, on the other hand, declined from September to October, and the output of anthracite coal in MANUFACTURING ACTIVITY RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT I PRODUCTION * SALES (ad.l tor seas variation) EMPLOYMENT PAYROLLS STOCKS 1932 1933 Page Two 1934 1935 1936 1937 1938 1933 1934 1935 1936 1938 cate further gains in activity at plants producing durable goods. Following a sharp increase from August to September, wholesale trade contracted slightly in October, and re tail trade sales increased less than is usual at this season. In both lines, however, the declines from a year ago were the smallest since last spring. Inventories of merchandise at retail establishments increased in October but were considerably smaller than those on hand in 1937. Similarly, stocks of goods at wholesale establish ments increased sharply, although they were further below 1937 levels than they had been at any other time this year. In November more seasonable weather appears to have stimulated re tail trade sales. A' slight improvement also is in evidence in wholesale busi ness. Prices of staple agricultural com modities declined considerably in Oc tober owing to sharp decreases in quotations on corn and hogs, but since that time there has been some recovery. In the industrial group, prices of hides and copper advanced substantially, and other lines also showed some strength. Quotations leveled off in most cases during November. The index pre pared by the Bureau of Labor Statistics on the basis of 813 commodities de clined from 78 per cent of the 1926 average on October 1 to 77.3 per cent in the week ended November 19. Manufacturing. The market for man ufactured goods in this district has improved further since the middle of October, particularly in the case of iron and steel products, woolens, ho siery, and clothing. Despite increases in both sales and operations, how ever, the volume of unfilled orders has remained practically unchanged from earlier periods and continues substantially below a year ago. Stocks of raw materials for the most part are maintained at the low levels which have prevailed over the past several months, while inventories of finished goods have been reduced further, especially at plants producing textile products. Factory employment in this district in October increased for the fourth consecutive month, the index being 1 per cent above the September level. At the same time wage disbursements increased more than 5 per cent. Com pared with a year ago, however, em ployment and payrolls respectively were 17 and 22 per cent smaller. In Pennsylvania, employment has 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. October 1938 from be typical. 1937 1938 1938 1938 Month Year ago ago Industrial production.... Manufacturing—total............... Durable goods....................... Consumers’ goods.................. Metal products...................... Textile products.................... Transportation equipment. Food products...................... . Tobacco and products......... Building materials................ Chemicals and products... . Leather and products........... Paper and printing............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output...................................... Sales, total!............................ Sales to industries t............... Not adjusted Per cent change 85 83 85 81 95 71 9G 75 93 42 130 71 70 51 84 49 77 61 79 99 33 105 100 123 92 84 59r 40 57 r 38 72 53 518 | 431 34 r 111 109 87 51 50 59 419 237 [ 254 234 243 178 155 247 240 242 239 161 172 73 72 54 84 52 r 76 71 82 101 73p 71p 57p 81p 55 73p 74 76p 100 37 108p 109p 83 50p 49p 60 394 -15 -14 -32 - 1 - 1 + + + - 1938 from Oct Aug. Sept. Oct. 10 1937 1938 1938 1938 mos. 1937 6 4 7 3 4 7 -42 + 4 -23 - 1 +10 - 3 + 0 - 4 - 2 - 2 + 8 -10 -26 -27 -41 -19 -50 -30 -21 - 4 - 7 -33 -17 -19 - 9 -16 -14 -35 - 9 - 1 + 1 + 7 -11 -17 -14 -14 -17 -24 + 1 - 6 76p 74p 90r 87 98 73 92 80 113 44 132 106 93 73 r| 73 r 77 518 51 72 59 79r 106 38 106 127 82 39 38 50 431 51 77 67 85 116 37 r 110 120 51 50 60 419 241 231 160 242 247 240 239 171 167 74 75 70r 74 59r 62 86 + 1 - 3 244 - 4 234 -12 172 + 1 -18* -23* -28* -20* + 6* + 6* 91 -33* 95 -40* 87 72 67 57 + 2* -17* -21* -18* 126 -27* 185 98 130 102 136 +9 - 1 -171 57 40 72 69 28 58 -35 254 46 39 39 84 13 46 289 49 40 44 - 3 + - - 71 + 2 3 57 76p 71 80p 122 40 llOp 116p 84 63p 63p 64 394 Employment and wages—Pa. Factory—Wage earners.................. Payrolls........................................... Man-hours (1927-28= 100)___ General (1932=100) Employment................................. Payrolls........................................... + 7* 104 146 Building and real estate Contracts awarded—total............. Residential f................................... Nonresidentialf........................... Public works and utilities!.... Permits for building—17 cities. .. Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. . . . 55 40 74 71 28 61 509 46 42 38 76 14 48 301 50 43 45 96 19 50 325 328 - 9 +38 + 3 6 +39 -35 + 1 -36 - - 9 -19 - 4 - 2 -42 88 17 43 377 56 39 60 96 19 i64 Distribution Retail trade —sales...................... 84 r stocks.................. 81 r 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.................................................... 70 70 75p 74p 74 81 86 - 6 + - 2 3* + 6* + 7 +27 + 8* +20* + 5 + 6 +0 -10 - 9 -14* -19* -20 -44 - 76 86p 75 82p 87 84 62 66 65 78 40 51 114 124p 108 130p 60 62 61 62 59 64 96 r 91 r -17* 98 r 82 -23 98 -54 90 - 6* 131 - 5* 138r -32 74 72 -31 -26 77 -13 6* - 7* -15 -14 -16 Business liquidations Number............................. Amount of liabilities.... -10* +75* -30* +72* -35* +5 - 4 -12 2 - 3 +10* 101 35 99p 89p 20p 22p Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ 79 r 32 - 75r 28 Prices—United States Wholesale (1926 = 100). - 9* -17* -14* - 5* Farm products............... Foods............................... Other commodities.... Retail food....................... - Philadelphia................... Scranton.......................... (In millions of dollars) 8* 10* - 9* - Oct. 1937 July 1938 - 9* -23* -15* - 4* - 7* - 8* - 9* % change from Aug. 1938 Sept. 1938 1.2 234 358 69.9 & 1.0 & & 5 Oct. 1938 Month ago Year ago 1.1 226 384 72.6 +10 - 4 + 9 + 4 -48 + 4 + 5 418 723 1,426 10.9 +0 + + 0 4 + + Banking and credit Federal Reserve Bank Bills discounted.............................. 5 2.1 Other bills and securities............. 217 Member bank reserves................. 365 Reserve ratio (per cent)............... 72.5 Reporting member banks Loans................................................. 5 469 Investments..................................... 681 Deposits (a)..................................... 1,374 Bankers’ acceptances outstanding. 15.8 5 5 1.3 234 375 70.4 l 418 706 1,388 8.9 > 418 714 1,372 9.1 * Computed from data unadjusted for seasonal variation, t Not included in production index. ! 3-month moving daily average centered at 3rd month. 235 353 70.1 416 720 1,377 9.9 +10 +0 -11 6 4 -31 p—Preliminary. _ r—Revised. ________ (a) Less cash items in process of collection. Page Three TEXTILE FIBERS STEEL PRICES AND INGOT PRODUCTION UNITED STATES MILLIONS OT LBS PERCENT, 460 PRODUCTION COTTON UNITED STATES f ; PRICES MILL TAKINGS PRICES OF FINISHED STEEL [•^-PRODUCTION _ PHILA. FED RES.. DISTRICT , 1932 1933 1934 1935 1936 1937 increased steadily since July, and the number of wage earners working in October was about 1 per cent greater than in the preceding month. Wage payments increased about 6 per cent from September to October, reaching the highest level since December of last year. The largest gains again occurred at plants turning out transportation equipment, although substantial in creases were also reported by those producing iron and steel, and stone, clay, and glass products. Despite re cent continuous additions to payrolls, however, the number employed in the sixty-eight industries was nearly 18 per cent below October of last year, while disbursements for wages were 23 per cent smaller. Working time in October increased over 6 per cent, after having gained but half that in the preceding month. Hourly earnings also advanced slightly for the first time since April, and average weekly earnings increased for the third consecutive month to the highest level since October 1937. Employment in Delaware factories declined more than 7 per cent in Octo ber and payrolls were 4 per cent less than in the previous month. These decreases were almost entirely due to a sharp seasonal reduction in the ac tivity of canneries. All other lines showed either negligible declines or ac tual increases in employment and pay rolls during this period. In Southern New Jersey, the number of workers was reduced 7 per cent, and payrolls declined 1 per cent. Output of factory products in this district increased slightly less than seasonally from September to October, so that the index adjusted for seasonal Page Four 1938 1939 1935 1936 variation declined to 71.3 per cent of the 1923-25 average as compared with 71.8 in September, 70.1 in August, 66.7 in July, and a low of 64.7 in June. This index was 83.2 in October 1937, having declined steadily from the year’s high of almost 98 reached in April. The slight drop in the total index from September to October this year was due chiefly to declines in the activity at textile industries, after a marked ex pansion in the earlier months. In con trast, production of durable goods, after allowing for seasonal influences, increased 6 per cent. Actual declines in activity were reg istered at plants producing textile, food, and paper products in October, while less than seasonal gains oc curred at those turning out tobacco products. The output of such durable commodities as metal products, trans portation equipment, and building ma terials showed substantial increases, the largest gains being in the output of au tomobile parts and bodies and cement. Total sales of electric power in Oc tober showed a slight decline from September but were about 2 per cent above a year ago. The contraction in the month was due to a decrease of 2 per cent in sales for power; con sumption of electricity for lighting in creased somewhat, as is to be expected at this time of year. Total output of electricity advanced 2 per cent from September and was 1 per cent above 1937. Coal and other fuels. Production of anthracite registered less than the usual sharp increase from September to October and continued below sea sonal levels during the early part of 1938 1935 1936 1937 1938 November. In the first ten months this year, colliery output was 14 per cent below 1937 and was the small est for the period in recent years. Shipments increased in October but were 13 per cent under a year ago. Demand for Pennsylvania bitumi nous coal has improved considerably over the past several weeks, reflecting larger takings by manufacturing plants, railroads, and public utility companies. Output of mines increased over 6 per cent in October, exceeding sea sonal expectations for the third con secutive month. Shipments also showed a further substantial gain in October and were the largest reported this year. In the first ten months of 1938, however, production and ship ments respectively declined 35 and 26 per cent from a year ago. Output of by-product coke has ex panded steadily since June, reaching in October the largest volume in nearly a year. Although production in re cent months has continued at a lower rate than in 1937, the decline from last year has narrowed considerably. Pro duction of gas and fuel oils, on the other hand, has slackened somewhat, after a substantial gain in September, and was nearly 13 per cent less than a year earlier. Building. The value of building contracts awarded in this district in creased 19 per cent in October to ap proximately $16,600,000. This total was 5 per cent greater than a year ago and, with the exception of last April, was the largest reported since Feb ruary 1937. October was the third consecutive month to show a gain in contract awards, the increase since May amounting to 68 per cent. VALUE OF BUILDING CONTRACTS AWARDED SALES OF NEW PASSENGER AUTOMOBILES PHILADELPHIA FEDERAL RESERVE DISTRICT THOUSANDS PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT OF CARS 1937 PRICES OF BUILDING MATERIALS (imi-kx} i i » NON-RESIDENTIAL 1936 RESIDENTIAL 1938 CONTRACTS AOJ. TOR SEASONAL VARIATION. 1923-25« 100 (3rr<ooHv) moving avO.) 1932 1933 1934 1937 Contracts let for all classes of con struction except apartments and hotels, educational buildings, and public works and utilities increased substantially in October. The most pronounced im provement was in the dollar volume of awards for industrial structures, which was the largest reported in the past six months. Contracts awarded for fam ily houses in October approximated $4,700,000, an increase of 35 per cent over September and a gain of 38 per cent as compared with a year ago. In only one other month this year has the value of awards for this type of con struction been above the corresponding 1937 level. Building contracts Philadelphia Federal Reserve District Per cent change October 1938 1938 (000’s From from omitted) month 10 ago mos. 1937 Residential........................... $ 4,891 Apts, and hotels............. 220 Family houses................. 4,671 Nonresidential................... 7,498 Commercial...................... 1,480 Factories........................... 924 Educational...................... 1,668 All other........................... 3,426 + 18 - 68 + 35 + 42 + 110 +276 - 43 + 142 -19 -20 -19 - 4 -20 -72 -13 +59 Total buildings........... $12,389 Public works and utilities. 4,193 + 31 - 8 -11 - 2 Grand total.................. $16,582 + 19 - 9 Source: F. W. Dodge Corporation. Over the first ten months of 1938 contracts aggregated $131,600,000, or about 9 per cent less than a year earlier. Contracts let for residential buildings totaled $39,400,000 in this period, a decrease of 19 per cent from 1937. Wholesale prices of building mate rials in the country as a whole con tinue to fluctuate narrowly at levels 1938 JAN. FEB. MAR. APR. lower than in the autumn of last year. About the middle of November the price index of the Bureau of Labor Statistics was 89 per cent of the 1926 average, compared with an average of 90 in October and 94 a year ago. Distribution. Retail trade in this dis trict increased less than seasonally in October so that, after allowing for sea sonal changes, the index declined 6 per cent from the September level. Changes in the adjusted indexes for individual lines ranged from a decline of 21 per cent at women’s apparel stores to an increase of 4 per cent at credit stores. Department store sales increased 4 per cent less than usual in this period. Compared with October 1937, aggregate retail trade showed a contraction of 10 per cent, which was the smallest decline from last year’s levels since April. For the first ten months of 1938, total sales were 13 per cent below the comparable period a year ago. Sales by wholesale establishments showed an actual decline of 3 per cent from September to October, the great est contractions being in footwear and jewelry. The only increase in this period was reported by hardware deal ers. In comparison with 1937, ag gregate wholesale trade sales declined 14 per cent as against a contraction from a year ago of 18 per cent in September. For the ten months to date, sales in nearly all lines have de creased substantially from the preced ing year. Inventories in both channels of trade increased somewhat from Sep tember. Stocks of goods at retail stores rose 2 per cent on a seasonally MAY JUNE JULY AUG. SEPT OCT NOV DEC adjusted basis, owing to a substantial gain in inventories at credit stores. The amount of goods on hand at de partment and women’s apparel stores increased less than usual, while at shoe stores an actual decline was reported. Wholesalers’ inventories increased 6 per cent but were 19 per cent below last year’s levels, widening the de cline from a year ago for the fifth con secutive month. Freight-car loadings in this district in October continued the upward move ment which has been in evidence since June and were only 15 per cent below the level of a year earlier. The mar gin of decline from last year has nar rowed consistently since April, when shipments were 39 per cent less than in 1937. The increase in the latest month reflected a contraseasonal rise in loadings of iron ore and merchan dise and miscellaneous commodities and an increase in shipments of grain, coal, and coke. Sales of new passenger automobiles in October increased 27 per cent from the four-year low reached the month before but were more than 40 per cent under last year’s level. In the first ten months of 1938, registrations were Hotel business Philadelphia Federal Reserve District Oct., per cent change from Month Year ago ago 1938 from 10 mos. 1937 Capacity.................................... Room occupancy.................... Per cent of capacity used: Oct. 1938................ 56.2 Sept. 1938............... 51.9 Oct. 1937................ 57.6 Revenue from: Guest rooms........................ Food....................................... Other sources...................... 0 + 8 —4 -6 -6 + 11 +35 +20 -9 -6 -1 -5 -5 -3 Total revenue.................. +20 -7 -5 less than one-half the number reported the previous year. The income of nonresort hotels was one-fifth greater than in September but was 7 per cent less than in October 1937. Banking conditions. In the past month the volume of loans and invest ments at reporting member banks has increased, while deposits have declined somewhat from the year’s peak, owing in part to a seasonal increase in the demand for currency. From $380,700,000 in the first half of October, the aggregate reserves of member banks increased to $388,000, 000 in the second half of the month, which was the highest level since June. In the first fifteen days of November, total reserves declined to an average of $381,100,000, but excess reserves con tinued substantial, being equal to 39 per cent of requirements at banks in Philadelphia and to 50 per cent at country member banks. Member bank reserves (Dollar figures in millions) Held Re Ex quired cess Ratio of excess to re quired Reserve city banks: Oct. 1-15........... $237.1 $167.7 $69.4 Oct. 16-31........... 245.8 170.8 75.0 Nov. 1-15........... 238.7 171.3 67.4 41% 44 ” 39 ” Country banks : Oct. 1-15........... Oct. 16-31........... Nov. 1-15........... 51 ” 50 ” 50 ’’ 143.6 142.1 142.4 94.8 94.5 94.8 48.8 47.6 47.6 Over the five-week period from Oc tober 19 to November 23 member bank reserves declined $21,800,000. This reduction resulted principally from an adverse balance of $18,900,000 in trans actions with other districts, which ap parently was due in part to purchases of securities, and from a rise of $14, 800,000 in currency demand. The call for currency was somewhat greater than a year ago, but was not equal to that experienced in the correspond ing weeks of 1936, when industrial and trade activity was increasing sharply. Another factor contributing to the de cline in reserves was the movement of $6,000,000 into miscellaneous deposits at the reserve bank. On the other hand, local disbursements by the Treas ury exceeded receipts by $18,000,000, despite the fact that receipts included a substantial volume of unemployment insurance funds and Social Security taxes. In the same five-week period banks in leading cities reported declines of Page Six Federal Reserve Bank of Philadelphia (Dollar figures in millions) Nov. 23, 1938 Changes in— Five weeks Reporting member banks (000,000's omitted) One year Bills discounted............ $ 1.2 Bills bought................... 0.1 Industrial advances. . . 3.2 U. S. securities.............. 222.8 +$0.1 0 + 0.1 0 -$1.5 - 0.2 - 0.4 + 5.9 Total............................ Note circulation........... Member bank deposits. U. S. general account.. Foreign bank deposits. Other deposits............... Total reserves................ Reserve ratio................. +$0.2 + 9.4 -21.8 + 2.9 + 1.4 + 6.0 - 1.6 - 0.1% +$3.8 - 3.5 +12.1 +25.4 - 5.8 + 2.9 +28.3 + 0.8% $227.3 315.7 370.0 30.6 20.7 8.6 541.6 72.6% $17,000,000 in reserves with the Fed eral Reserve Bank and of $20,000,000 in balances with correspondents, which at the beginning of the period had been at the highest point in recent years. These changes reflected the combined influence of expansion in outstanding credit and contraction of deposits. Loans and investments increased $16,000,000. Total loans increased $7, 000,000, of which $3,000,000 was in loans to brokers and dealers in secu rities, and $1,000,000 in each of several other classifications. Commercial loans continued to decline until the begin ning of November, in contrast to the usual increases in the summer and early autumn. A' gain in this type of credit in the first week of November, however, more than offset the contrac tion in the weeks immediately preced ing, with the result that a slight rise was shown for the five weeks as a whole. The purchase of $9,000,000 of se curities, chiefly miscellaneous corpo rate and municipal liens, raised the total of investments to $732,000,000 on November 23. This was the largest amount held at any time since the spring of 1937 and represented a gain of $83,000,000 over the low last April. About $50,000,000 of the increase from the low point has been in direct and Nov. 23, 1938 Changes in— Five One weeks year Assets Commercial loans................... * Open market paper................ Loans to brokers, etc............. Other loans to carry secur. . Loans on real estate.............. Loans to banks........................ Other loans............................... 186 24 19 33 58 2 103 +* 1 + 1 + 3 0 0 + 1 + 1 Total loans........................... $ 425 +* 7 —$37 +*31 + 4 + 24 -*26 + 1 0 - 3 - 2 0 - 7 Government securities.......... $ Obligations fully guar’teed.. Other securities....................... 343 97 292 +* 1 + 2 + 6 Total investments.............. t 732 +* 9 +$59 Total loans & investments $1,157 Reserve with F. R. Bank.. . 239 Cash in vault........................... 19 Balances with other banks. . 164 Other assets—net................... 84 +316 - 17 + i - 20 + i +$22 + 12 + 1 + 37 - 4 Liabilities Demand deposits, adjusted. $ Time deposits.......................... U. S. Government deposits.. Interbank deposits................. 774 288 38 319 -$10 - 2 0 - 9 —$22 + » + 30 + 58 Other liabilities........................ Capital account....................... 17 227 + + - i i 7 0 guaranteed obligations of the United States Government, which now make up 38 per cent of the total credit ex tended by the reporting banks. Balances held for other banks, which recently were at the highest levels since the beginning of 1937, decreased $9,000,000 in the period under review. A decline of $12,000,000 also was re ported in deposits of individuals, cor porations, and municipalities, owing partly to the demand for currency. To tal deposits still show an increase of $75,000,000 or about 6 per cent over a year ago, reflecting mainly a sub stantial rise in interbank deposits. Acceptances of banks in the Phila delphia Federal Reserve District again increased in October as a result of a heavier volume of import bills, which constitute nearly 60 per cent of the total of this type of credit. At the end of the month the aggregate outstand ing was $10,939,000, as compared to $15,844,000 a year earlier. MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ended— Philadelphia Federal Reserve District (Millions of dollars) Changes in five weeks Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Sources of funds: Reserve bank credit extended in district.... Commercial transfers (chiefly interdistrict).. Treasury operations.............................................. + ii -10.3 + 3.8 - 2.2 - 8.6 +15.3 -0.6 +8.1 -2.7 +1.7 +3.5 -1.5 - 0.2 -11.6 + 3.1 - 0.2 -18.9 +18.0 Total..................................................................... - 5.4 + 4.5 +4.8 +3.7 - 8.7 - 1.1 + + + + - 2.1 4.2 6.6 0.0 +8.2 -2.8 -0.6 +0.0 -2.8 +5.2 +1.4 -0.1 + 7.0 -14.5 - 1.2 + 0.0 +14.8 -21.8 + 6.0 - 0.1 + 4.5 +4.8 +3.7 - 8.7 - 1.1 Uses of funds: Currency demand.................................................. Member bank reserve deposits.......................... “Other deposits” at reserve bank.................... Unexpended capital funds................................... Total...................................................................... 0.3 5.5 0.2 0.0 - 5.4 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES (All figures are rounded from original data) PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS Manufacturing Indexes Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group in dexes are weighted propor tionately.) TOTAL All manufacturing. . .. Iron, steel and prods.. . . Nonfer. metal prods.. . . Transportation equip___ Textiles and clothing.... Textiles. . ....................... Clothing.......................... Food products................... Stone, clay and glass.... Lumber products............. Chemicals and prods.. . . Leather and products. . . Paper and printing.......... Printing........................... Others: Cigars and tobacco.... Rubber tires, goods. .. Musical instruments. . EXCESS REQUIRED SECURITY HOLDINGS REPORTING MEMBER BANKS PHIL A. FED. RES DISTRICT MILLIONS Employeehours t Payrolls* Per cent Per cent Oct. change from Oct. change from 1938 1938 index Oct. Sept. index Oct. Sept. 1937 1938 1937 1938 75 64 98 54 92 88 111 106 68 57 80 88 93 88 -18 -29 -23 -19 - 9 - 9 - 7 - 2 -23 -13 -17 67 82 54 * Figures from 2,306 plants. - 8 - 7 +1 + 2 - 3 + 6 - 0 + 0 - 2 - 2 + 5 + 0 + 1 + 3 - 1 - 0 74 67 108 59 85 82 96 108 66 52 84 79 94 90 - 5 - 2 - 5 + 1 + 2 +10 64 90 55 - 3 Oct. 1938— per cent change from Oct. Sept. 1937 1938 -23 + 6 -37 + 9 -27 - 3 -13 +21 - 7 + 1 - 8 + 2 - 0 - 4 - 3 - 3 -27 +11 -14 + 2 -21 + 2 + 3 - 0 - 9 - 0 - 9 - 0 -28 + 6 -38 +10 -27 + 1 -36 +16 - 2 + 1 - 3 + 2 + 5 - 5 - 6 - 3 -31 +10 -15 + 3 -29 + 3 - 1 - 9 - 1 -10 - 2 - 7 - 0 - 8 - 7 - 2 -12 - 0 - 4 +21 - 1 - 3 +18 t Figures from 2,075 plants. f 400 General Index Numbers US.G0VERNMEN T DIRECT OBLIGAT 0NS _/ J 300 Covering twelve branches of trade and industry OTH .R S! CURITIES ---- ^ Employment us.gov’t fullY GUARANTEED OBLIGATIONS 100 0 1935 1936 1937 1938 Percentage change—October 1938 from October 1937 City areas* Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... Manufacturing Employ ment Wage payments Building permits (value) — 15 -19 -21 -37 - 8 -17 -13 - 2 - 8 -13 + 3 -20 - 8 -18 -21 -27 -45 - 4 -19 -13 + i - 6 -17 - 2 -27 . -11 — 52 - 21 - 80 - 10 - 8 - 13 - 65 - 27 - 81 - 4 +176 - 73 + 19 Debits trade sales -13 -19 + 4 -29 -10 - 4 + 4 -10 -12 - 4 -13 + 3 -15 -17 -19 -13 -17 — 14 -13 -11 + 1 -10 - 5 -12 - 8 October 1938 from September 1938 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... Y ork....................... + + + + + + + + + + 2 3 2 2 1 2 0 3 3 2 2 2 6 +34 + 0 + 2 + 1 + 1 + 7 +10 + 7 - 4 + 4 + 0 + 3 - 9 +170 - 82 - 64 - 12 + 10 + 30 - 43 + 35 + 46 +122 +275 + 23 -18 • 5 -15 - 8 -10 -13 - 3 - 0 - 8 -16 - 9 h 9 h 7 (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) Oct. 1938 index General index (weighted)... Manufacturing............................. Anthracite mining....................... Bituminous coal mining............ Building and construction........ Quarrying and nonmet. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning.................. 104 118 70 100 61 101 140 94 108 113 112 99 106 Per cent change from Oct. 1937 Sept. 1938 -17 -18 -15 -20 -36 -19 -14 - G -11 - 5 - 4 - 8 - 4 + 2 - 1 -13 - 4 - 2 - 0 + 3 - 0 + 3 + 0 + 3 - 1 - 1 Payrolls Per cent change from Oct. 1938 index 146 179 74 177 85 180 155 102 123 115 123 120 140 Oct. 1937 Sept. 1938 -21 -23 -22 -28 -36 -25 -10 - 7 - 8 - 6 - 5 — 3 + 5 + 7 + 6 +48 +10 + 9 + 6 — 2 — 1 + 5 + 1 — 1 - 1 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES Or TRADE AND INDUSTRY PERCENT l»32 AVOslOO 200 1 /**'***• PAYROLLS \ .. ; V 175 • / 150 +22 +16 - 0 +14 +16 +13 + 11 +18 + 15 + 7 +26 +10 s/ A* A 125 A IOO EMPL01 MENT V 75 50 1933 1934 1935 1936 1937 1938 • Area not restricted to the corporate limits of cities given here. Page Seven OUTPUT OF MANUFACTURES Index numbers of individual lines of trade and manufactures PHILADELPHIA FEDERAL RESERVE DISTRICT ADJUSTED raw SCASOHAL V, PER CENT' Philadelphia Federal Reserve District LOCOMOTIVES AND CARS Index numbers: percentages of the 1923-1925 average as 100 Not adjusted Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Per cent change Unadjusted indexes reflect merely the October 1938 actual change which may or may not Oct. Aug. Sep. Oct. 1937 1938 1938 1938 be typical. Month Year ago ago 1938 Oct. Aug. Sep. Oct. 1937 1938 1938 1938 25--------- mos. 1937 50------------------ Retail trade - 25 w- Sales Total of all stores......................... Department............................... Men’s apparel........................... Women’s apparel..................... Shoe............................................. Credit.......................................... 84 r 74 81 110 87 95 r 70 80 62 68r 63 76 114 125 56 84 75 87 75p 65p 70 98 79p 90 - 6 - 4 - 8 -21 - 6 + 4 - 10 12 14 11 10 4 -13 96 r -13 86 r -12 85 - 9 123 - 9 89 -14 115r 55 76 48 67 r 49 63 78 107 43 86 83 r 71 86p 75p 74 110 81p 110 Stocks of goods Total of all stores......................... Department............................... Women’s apparel..................... Shoe............................................. Credit.......................................... 81 r 60 102 71 117r 70 72 74p 52 52 52p 107 106 r 93 67 66 62 92 99 109 + 2 - 0 -12 - 6 +n - 9 - 12 - 8 - 13 - 7 91r 67 r 129 78 124r 67 75 48 55 94 115 67 71 90 101 r 82p 59p 119 68 116 Rate of stock turnover 10 months (actual, not indexes) 3.20 — 5* WOOLENS AND WORSTEDS 3.05 Wholesale trade Sales Total of all lines............................ Boots and shoes........................ Drugs.......................................... Dry goods.................................. Electrical supplies.................... Groceries.................................... Hardware................................... Jewelry....................................... Paper........................................... - 3* — 15* - 1* _ 4* -10* - 2* + 5* -13* _ i* - 14* 24* 4- 5* - 23* - 43* - 7* - 16* - 18* + 2* Stocks of goods Total of all lines........................... Drugs.......................................... Dry goods.................................. Electrical supplies................... Groceries.................................... Hardware................................... Jewelry........................................ Paper........................................... 4+ + + - _ - 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...................... Bread and bakery 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.............................. -17* 99 _ 4* - 2* —27* -38* — 7* -23* —28* -21* 77 82 65 87 84 oo------------------75---------------- — 1 50 -----25 at — r O____________ ♦ 75 37 36 87 47 51 60 48 47 114 59 68 118 53 53 15 16 16 87 42 53 14 43 14 291 219 257 88 87 84 40 55 r 51 r 49 41 43 54 88 86 99 99 100 104 123 125r 50 54 51 54 27 31 23 26 r 31 39 55 49 73 57 17 61 13 264 79 48 42 74 94 122 58 32 28 86 93 98 99 30 77 123 116 51 59 53 41p 91 98 99 98 70 66 68 65 97 88 90 87 171 111 155 145 90 76 65 7op 94 72 74 72 84 73 78r 72 174 145 151 146p 123 76 86 94 * Computed from data unadjusted for seasonal variation. 6* 5* 0* 1* 3* 3* 5* 1* + 7 + 7 + 3 + 8 + 7 + 7 +16 -11 + 3 - 5 - 7 - 3 -13 - 6 - 3 +14 + 4 + y — 9* +1 - 5 -22 - 1 - 5 - 4 - 7 +15 - 3 - 7 - 4 +10 19* 4* 4* 40* 17* 20* 14* 19* 62 66 PAPER AND WOOD PULP - 48 - 37 - 18 - 36 - 52 + u - 29 - 71 - 9 - 10 + 19 - 13 + 36 - 5 + 18 + 17 - 40 - 10 — 8* + 15 +282 - 19 + 8 - 7 - 10 + 30 - 17 - 24 - 14 - 16 - 23 -59 -52 -43 -56 -47 -28 -37 -57 - 2 -23 -39 -44 -54 -20 -17 - 8 -56 -30 — 3* + 0 - 6 - 9 - 6 -14 - 8 - 7 -36 -21 -19 -10 -42 75 87 63 109 129 14 82 41 279 90 43 50 59 109 113 56 54 32 95 90 26 69 112 72 98 120 93 95 90 175 120 p—Preliminary. 33 48 47 57 58 13 40 14 217 84 56 r 37 80 86 114 68 28 25 89 79 66 64 105 66 85 183 73 72 74 146 74 34 49 48 62 59 14 50 14 244 84 55 41 93 100 125r 59 31r 27 r 96 r 98 106 68 115 68 89 176 68 74 74 r 153 82 39 55 52 69 62 16 58 12 254 81 52 43 83 103 133 . 65 32 29 88 103 98 62p 121 66 88 156 78p 73 77 147p 92 200 r 175- \ \j GOAT AND KID LEATHER | PETROLEUM REFINING - IGARS r—Revised. 3> Page Eight *
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