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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT DECEMBER i, 1939 \ % FEDERAL RESERVE BANK OF PHILADELPHIA* Business and Banking Conditions in the United States Rapid expansion of industrial out put continued in October, and em ployment and payrolls increased con siderably. Distribution of commodities to consumers, which had increased in September, was maintained at the higher level in October. In the first half of November industrial activity increased further but, with production in many industries approaching capac ity, the advance was less rapid than in earlier months. Commodity prices generally showed little change during October and the first half of November, following the sharp rise in September. Production. Volume of industrial production showed a further sharp rise in October and the Board’s seasonally adjusted index advanced from 111 to 120 per cent of the 1923-1925 average. Marked increases in activity were re ported in the steel and steel-consuming industries and at mines. In the steel industry ingot production in October was at a rate of 90 per cent of capac ity and actual volume of output was the greatest for any month on record. Some further increase in the rate of output was reported in the first half of November. Pig iron production also MANUFACTURING PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age = 100. ^ Durable and nondurable series expressed in terms of points in the total index. By months, January 1934 to October 1939. advanced sharply and lake shipments of iron ore, which had increased con siderably in September, continued in exceptionally large volume. Activity in the machinery and shipbuilding in dustries and in most other steel-con suming lines rose in October but by a considerably smaller amount than out put of steel. In the automobile indus try, however, output showed less than the marked rise usual at this season. This was due to the fact that plants of one large producer were closed during most of the month by an industrial dispute. Mineral production in Octo ber was at record levels owing chiefly to a high rate of crude petroleum out put. In the nondurable goods industries activity was generally maintained at the high levels reached in August and September. Flour production declined sharply, however, following an excep tionally large volume of output in Sep tember. Value of construction contracts, as reported by the F. W. Dodge Corpora tion, decreased considerably in Octo ber, reflecting principally a reduction in awards for public construction. Wednesday figures for reporting banks in 101 leading cities, September 5, 1934 to November 11, 1939. Commercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937, so-called “Other loans” as then reported. WHOLESALE PRICES MONEY RATES IN NEW YORK CITY Index compiled by the United States Bureau of Labor Statistics, 1926 = 100. By weeks, 1934 to week ending November 11, 1939. For weeks ending January 6,1934 to November 11, 1939. Private residential contracts continued in substantial volume while awards for commercial and industrial building de clined somewhat following increases in the previous month. Employment. Reports from leading industrial states indicate that factory employment and payrolls increased sharply between the middle of Septem ber and the middle of October. In creases were particularly large at steel mills and in related industries. There was also a considerable increase in em ployment on the railroads in October. MEMBER BANKS IN 101 LEADING CITIES Page One Retail distribution of general merchandise in October showed about the usual seasonal rise from the advanced September level. In the early part of November depart ment store sales increased consider ably. Freight-car loadings rose further from September to October, reflecting a large increase in shipments of mis cellaneous freight, which includes most manufactured products, and smaller in creases in loadings of coal, forest prod ucts, and ore. Commodity prices. Price changes that have occurred since the general sharp Distribution. rise in September have reflected largely particular developments in individual commodities. From the middle of Oc tober to the middle of November prices of a number of foodstuffs continued to decline and there were also decreases in some industrial materials, such as print cloths, wool, tin, and steel scrap. Wheat, cotton, and burlap advanced somewhat while prices of most other commodities, including finished indus trial products, showed little change. Government security prices. Follow ing a sharp recovery from the low of September 21, prices of United States Government bonds showed irregular changes during the period from Octo ber 24 through the first half of Novem ber. On November 15 yields on long term Treasury bonds were at 2.47 per cent as compared with 2.79 per cent on September 21. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities increased substan tially during the six weeks ending November 8, reflecting largely pur chases of Treasury bills by New York City banks. Commercial loans con tinued to show moderate increases. Deposits at these banks rose to new high levels. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial production in the Third Federal Reserve District increased 6 per cent more than usual from Septem ber to October to the highest level in more than two years, and preliminary indications are that activity has been sustained at this level during Novem ber. In the latest recovery movement, which started in May, industrial oper ations have advanced 15 per cent after allowing for the customary increase. Nearly half of the gain occurred in September and October, owing to the sharp increase in purchases of manu factured and semifinished goods. The current level of plant activity is 25 per cent higher than in October 1938 and 13 per cent above the 1938 peak reached in December. Since the middle of October the domestic markets for both raw mate rials and finished goods have become quieter. In several basic industries backlogs are adequate to maintain pro duction at current levels to the end of the year and, in the case of durable goods, into next year. Prices generally have declined from recent peaks. The index of wholesale prices of raw materials, compiled by the United States Bureau of Labor Statistics, declined from 73.1 per cent of the 1926 average at the end of Sep tember to 72.2 in the third week in November. Prices of semifinished goods declined by about the same amount in this period, while quotations on finished materials continue near the peak reached in October. The sharp est reductions in recent weeks have been in quotations on basic industrial commodities, especially steel scrap. The largest gains in activity in October occurred in manufacturing in dustries, particularly those producing durable goods. Production of crude PRODUCTION AND PRICES oil and electric power also increased more than seasonally. The output of coal declined, on a seasonally adjusted basis, owing to a substantially smaller than customary increase in the produc tion of anthracite, which has been at high levels since the bituminous strike last May. The value of new construc tion contracts awarded in October was less than in the preceding month and the gain in actual building activity was smaller than usual, but the volume of new construction continued well above 1938 levels. Industrial employment in Pennsyl vania increased 6 per cent from Sep tember to October and payrolls ad vanced 16 per cent. The sharpest gains were in coal mining, manufac turing, and quarrying. The number of wage earners and the volume of payrolls respectively were 9 and 25 per cent above October of 1938. Early FACTORY PAYROLLS PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT INDUSTRIAL PRODUCTION (pHILA- FED. RCS- 0I5T.) CONSUMERS’ GOODS COMMODITY PRICES US CAPITAL GOODS . PRICES OF _ RAW MATERIALS 1934 1935 1936 1937 1938 1939 1940 Sovirc« for Prices - LLS Bureau of Labor Statist*:} Page Two 193 6 193 7 1938 19 40 » ► r reports for November indicate that Business Indicators the high levels of the previous month Philadelphia Federal Reserve District have been well sustained in most major lines of activity. Index numbers: percentages of the 1923-1925 average as 100 Retail sales to consumers expanded Adjusted for seasonal variation Not adjusted for the less than seasonally in October, fol Adjusted indexes allow activity.usual seasonal change in Per cent change lowing the unusually large gains in Unadjusted indexes reflect merely the 1939 the preceding month, and sales at actual change which may or may not Oct. Aug. Sept. Oct. Oct. 1939 from Oct. Aug. Sept. Oct. from be typical. 1938 1939 1939 1939 10 1938 1939 1939 1939 wholesale were smaller than during the Month Year mos. wave of buying in September. Retail 1938 ago ago trade sales have increased sharply dur 71 83 +16 75 82 86 94p 84 89p + 6 + 25 ing November. Stocks of goods at Industrial production........ Manufacturing—total............... 70 82 83 91p + 18 73 81 81 8Sp + 8 + 26 Durable goods............................ 4-21* 60 74 78 92p 4-17 + 52 retail establishments increased some Consumers’ goods...................... 79 92 +13 87 90p + 3 + 13 what more than usual in October and Metal products.................... . 73 93 55 70 67 +28 57 73 90 +24 + 64 Textile products.................... 71 84 82 90p 90 +27 74 80 86p + 8 + 21 were slightly higher than in 1938. Transportation equipment. 84 95 65 79 83 89 100 +37 62 +12 + 54 Food products........................ 76 80 87 83p 81 + 3 79 83 77p - 7 + 2 Wholesale inventories also increased Tobacco and products. . . .. 100 103 100 101 + 4 122 110 116 124 +1 + 1 Building materials................ and were above a year ago. 37 44 44 r 47 39 +19 39 41r 44 + 9 + 20 Chemicals and products... 111 122 128 128p - 0 + 15 + 9 113 123 127 130p Leather and products........ Manufacturing. The domestic market 106 122 115 118p + 3 + 11 + 5 113 125 126 125p Paper and printing............. 83 88 90 84 85 87 + 1 89 89 - 0 for goods manufactured in this district Coal mining............................... 50 72 77p 55 54 71 61p -15 + 22 + 15 63 Anthracite............................. 72 75p 49 53 53 71 58p -18 + 18 + 14 63 continues relatively quiet, following the Bituminous........................... 59 r 67 76 91 + 15 63 r 63 75 85 + 14 + 44 Crude oil.................................... sharp upturn in inquiries and orders in 394 432 432 460 - 5 394 432 432 460 + 17 + 6 Electric power September and early October. The Output.................................... 240 273 268 273 +n 247 259 262 281 + 2 + 14 Sales, totalt.......................... 239 259 265 271 + 2 + 13 +n 239 246 263 271 volume of inquiries and sales declined 172 165 180 198 + 15 +13 167 170 191 192 +10 Sales to industries %............. from the middle of October to the middle of November except in the case Employment and wages—Pa. Factory—Wage earners.................. 79 80 85 + 7* + 15* + 7* 74 Payrolls........................................... 81 82 97 of iron and steel products. No signifi +18* + 34* + 19* 72 Man-hours (1927-28 = 100)___ 72 86 +19* + 37* +22* 63 r 71 cant cancellations have been received General (1932 = 100) Employment.................................. 107 113 + 6* + 9* + 2* 104 104 on the large orders placed earlier this Payrolls........................................ .. 152 156 180 +16* + 25* +12* 144 fall and markets generally are much Building and real estate stronger than a year ago. There are Contracts a wardedt—total.. . . 72 77 78 71 +30 56 79 - 3 + 39 Residentialf.............................. 58 62 66 62 +80 39 67 - 0 + 70 evidences that foreign buying of cer Nonresidentialf........................ 60 42 45 40 41 -21 46 -11 - 33 tain goods has been increasing. Public works and utilities!. . 195 200 167 212 +108 +63 96 184 - 3 Permits for building—17 cities. 32 18 23 20 36 +70 19 +13 + 24 Increased shipments of goods in re Real estate deeds—Philadelphia! • 47 50 51 53 + 6 43 55 - 5 + 16 Writs for Sheriff sales—Phila.. 335 244 -19 164 321 283 156 +28 - 5 cent weeks have reduced backlogs ex cept in the iron and steel industry, but Distribution Retail trade —sales................... 86 93p + 6 87 r 59 85 79p - 6 + 7 unfilled orders are larger than last year stocks................ 81 86r 73 90p 75 80p + 6 Wholesale trade—sales................... in all reporting lines. The stimulus - 7* + 17* + 9 _ _ stocks................ + 2* to business occasioned by the flood of Life insurance sales.......................... 69 73 92 101 +12 78 +11 + 17 New passenger auto, registrations 79 66 94 +44* + 85* +48* 51 orders two months ago has resulted Hotels—Occupancy.. . (1934 = 100) +19* + 4* - 3* 124 106 110 130p Income, total (1934 = 100) in a substantial volume of purchases 91 103 130p +26* - 0* - 3* 130 Freight-car loadings—total............. 65 79 84 +20 62 + 9 + 35 of equipment and, in scattered in Merchandise and miscellaneous. 65 76 80 + 19 62 +10 4- 29 Coal............................................. 79 87 59 +15 64 + 1 + 35 stances, in plant expansion. Stocks of finished goods at iron and Business liquidations Number............................. 60 71 64 -10* - 30* + 1* 92 steel and textile mills and at plants Amount of liabilities___ 13 32 30 - 5* + 33* - 6* 23 manufacturing leather products have Payment of accounts declined since the middle of October, Check payments.................... 78 87 87 + 9 85 - 7 + 2 Rate of collections (actual) while in other lines little change was Retail trade........................ 29 30 33 32 - 6 + 4 reported. Finished inventories in basic Prices—United States lines are smaller than a year ago. Wholesale (1926 = 100). 75 79 79 + 0* + 2* — 3* 78 Farm products.............. - 2* + 0* — 6* 67 61 69 67 Stocks of raw materials at reporting Foods............................... 67 75 73 — 2* - 0* — 5* 73 Other commodities.... 80 82 84 + 2* + 3* — 1* 81 plants continue at about the same level Retail food............................ 75 79 78 _ 1* - 0* - 3* 78 Philadelphia................... - 1* + 1* — 3* 79 77 80 80 as last month and in November 1938, Scranton.......................... - 2*|+ 3* — 2* 73 71 77 75 except at textile mills where supplies % change from have declined. Oct. Oct. July Aug. Sept. (In millions of dollars) Month Year Employment in Pennsylvania fac 1938 1939 1939 1939 1939 ago ago tories increased 7 per cent and the vol and credit ume of wage payments 18 per cent Banking Reserve Bank Federal from the middle of September to the $ 1.1 $ 0.3 $ 0.3 $ 0.3 $ 0.4 +33 —64 226 217 209 236 + 2 + 7 middle of October and were respec 384 540 + 6 502 516 572 +49 72.6 77.9 79.5 77.6 — 0 + 0 77.3 tively 15 and 34 per cent above Octo Reporting member banks $ 406 $ 412 $ 418 $ 415 $ 422 + 4 ber 1938. Since August factory em + 2 713 710 738 737 1 + 2 729 ployment in this state has expanded 1,426 1,558 1,617 1,591 +16 1,660 + 3 Bankers’ acceptances outstanding. 10.9 8.6 8.1 8.8 -17 9.0 + 5 by approximately 73,000 workers, 01* Computed from data unadjusted for seasonal variation. p—Preliminary. r—Revised. more than twice the number custom ! 3-month moving daily average centered at 3rd month. (a) Less cash items in process of collection. arily added to payrolls in this period, ! Not included in production index. Page Three OUTPUT OF STEEL INGOTS TEXTILE ACTIVITY %OF CAPACITY PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT HOSIERY UNITED STATES A ! W WOOLENS AND WORSTEDS EASTERN PENNSYLVANIA , (GOODS AND SPINDLE HOUR^ 1937 2.5 1938 1939 and weekly payrolls by the middle of October were nearly $3,700,000 larger than two months earlier. Estimated employment in manufacturing indus tries reached 905,000 and payrolls ad vanced to about $23,000,000 a week, the highest levels since the fall of 1937. Preliminary reports indicate that these high levels were generally maintained in November, with further gains being reported in the case of primary iron and steel, nonferrous metals, and fabri cated metal products. The largest gains from September to October occurred in heavy manu factured goods, including iron and steel, nonferrous metal products, and transportation equipment. Substan tial advances were also reported at plants producing building materials, chemicals, and coke. In textiles, gains were marked at cotton, woolen, and hosiery mills and at factories produc ing women’s clothing. In nearly all lines of manufacturing, employment and payrolls were at sub stantially higher levels than in the fall of 1938. Among the major lines, the sharpest gains in the year were 57 per cent in the payrolls at iron and steel plants and 56 per cent in transporta tion equipment. Delaware factories reported a de cline of about 1 per cent in employ ment from September to October, re flecting reduced activity at canneries and at plants producing building mate rials, but the number of workers was still 17 per cent larger than in October 1938. Wage disbursements expanded about 6 per cent in the month and were 24 per cent above a year ago. Employment in Southern New Jer sey factories advanced 3 per cent in the month and was 26 per cent above last year, and wage disbursements in Page Four 1940 LUI I UN ,APJgSTC0 roR SEASONAL VARIATION 1936 1937 ' 193 8 1940 creased 11 per cent in October to a more than in the same month last year. level 43 per cent above October 1938. Output declined sharply in the first half The output of factory products in of November but continued above the creased 8 per cent, on a seasonally ad 1938 level. Shipments increased in justed basis, from September to Octo October for the third consecutive ber and was 26 per cent above 1938. month and were the largest since last The level of production was the highest April, when the closing of bituminous since the early fall of 1937. The sharp mines created an unusually active de est gains in the past several weeks mand for hard coal as a substitute fuel. have been in the production of durable In the first ten months of this year goods, which increased 17 per cent production and shipments were re more than usual from September to spectively 14 and 17 per cent greater October, while the output of consum than in the same period of 1938. ers’ goods advanced 3 per cent after Demand for Pennsylvania bitumi allowing for the seasonal increase. nous coal has slackened somewhat, re Activity at plants producing metal flecting chiefly smaller takings by man products improved 24 per cent in Octo ufacturers, who made heavy purchases ber, and in the case of transportation during September and October. equipment and building materials re The output of mines has expanded spectively gains were 12 and 9 per more sharply than usual for six suc cessive months and in October was the cent. In the textile industry output was 8 largest since March 1937. Production per cent larger than was to be sea remained at a high level in the first sonally expected, owing to gains at half of November. Shipments of soft silk, woolen, and cotton mills. Pro coal continued the upward trend that duction of leather goods was about the has been in evidence since the sixsame as in September although there weeks suspension of mine operations is usually a slight decline, while oper last spring. Colliery output in the first ations in the food industry were re ten months of 1939 was 15 per cent duced. Other lines reported about sea .above the level of a year earlier and sonal changes from September to shipments increased 14 per cent. October. Continued expansion in the opera Production and sales of electric tions of iron and steel plants resulted power increased 2 per cent more than in a further sharp increase in the pro usual from September to October, and duction of by-product coke in October sales to industry expanded 10 per cent to the largest of any month since on a seasonally adjusted basis. 1937. Output was approximately Coal and other fuels. Sales of anthra double the volume reported last May. cite at the mines slackened somewhat Activity at oil refineries slackened in November, following substantial somewhat in October but continued gains in the preceding two months, but above the level of a year ago. Pro retail demand continues active, owing duction of by-product coke and of gas and fuel oils respectively was 34 and to colder weather. In October 4,955,000 tons of anthra 9 per cent larger in the first ten months cite were produced, or nearly one-fifth this year than last. VALUE OF BUILDING CONTRACTS AWARDED PHILADELPHIA FEDERAL RESERVE DISTRICT SALES OF NEW PASSENGER AUTOMOBILES THOUSANDS OF CARS PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT PRICES OF BUILDING MATERIALS 1937 1936. NON-RESIDENTIAL RESIDENTIAL 1938 CONTRACTS ADA FOR SEAS. VARIATION 1934 1935 IRR3-2SMOO (amontha 1936 1937 Building. Construction activity in this district on contracts awarded in the three latest months increased less than usual in October, after continuing above seasonal levels in the five pre ceding months. Total building activ ity on outstanding contracts remained considerably above October 1938. The value of new contracts awarded declined 13 per cent from September to approximately $16,500,000 in Octo ber and was in about the same volume as a year ago. Contracts for com mercial and educational buildings in creased substantially in the month, but awards for other classes of construc tion were below the September level. Building contracts Philadelphia Federal Reserve District Per cent change October 1939 1939 (000’s From from omitted) month 10 ago mos. 1938 Residential........................... $ 6,802 Apts, and hotels............. 714 Family houses................. 6,088 Nonresidential..................... 4,609 Commercial...................... 2,438 Factories........................... 725 Educational..................... 336 All other........................... 1,110 - 26 - 75 - 4 + 8 +137 - 19 + 46 - 47 + 80 +214 + 58 - 21 + 13 + 110 - 74 - 24 Total buildings........... $11,411 Public works and utilities. 5,126 - 15 - 5 + 19 + 63 Grand total................. $16,537 - 13 + 30 Source: F. W. Dodge Corporation. In the first ten months of 1939 awards of building contracts in this district amounted to nearly $171,000, 000. This total was 30 per cent larger than a year earlier and exceeded any similar period since 1931. Substantial gains over 1938 were reported in con tracts for residential buildings, indus trial structures, and public works and utilities. Wholesale prices of building mate rials softened slightly in November. 1938 1939 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT OCT NOV. DEC In the week ended November 18 the price index of the Bureau of Labor Statistics was 92.9 per cent of the 1926 average, compared with a two-year high of 93.1 earlier in the month and 89.7 at the beginning of September. Distribution. Retail trade sales in creased about 6 per cent less than sea sonally in October, following an unex pectedly sharp upturn in the first month of the fall trading season. Preliminary figures for November, however, indi cate that sales at retail have increased substantially further. From September to October sales advanced 8 per cent at department stores, or about one-half the usual in crease in this period. At men’s apparel establishments and credit stores han dling durable consumers’ goods business showed approximately the usual sharp advance. Sales by women’s specialty shops continued at about the Septem ber level, and at shoe stores the volume of business declined sharply, whereas ordinarily there is little change in this period. Compared with last year, however, sales by nearly all types of reporting stores showed improvement, the aggre gate gain over October 1938 amounting to 7 per cent. The largest increases were 11 per cent at men’s apparel stores and at credit stores. Shoe stores were the only class reporting a decline from a year ago. In the first ten months of 1939 all types of establish ments sold a larger dollar volume of goods than in the same period of 1938. Inventories at retail stores were in creased 6 per cent more than usual in October. Aggregate inventories at the end of the month were still only 4 per cent above a year ago, when the volume of sales was 6 per cent smaller. The rate of stock turnover in the first ten months of this year has been con siderably higher than in the same period of 1938. Sales at wholesale declined 7 per cent, after having increased sharply in a wave of buying during September and early October. Hardware estab lishments reported the only material increase. Sales of drugs and paper were about the same as in the previous month, while other reporting lines de clined from 6 per cent in the case of dry goods to 15 per cent in footwear. Sales of groceries at wholesale de clined 11 per cent as the unusual war stimulus disappeared from the market. In all reporting wholesale lines, the volume of business was above October 1938 and in the first ten months aver aged 9 per cent higher than in the corresponding period a year earlier. Stocks of goods at wholesale estab lishments increased 4 per cent from September to October and were slightly above those at the end of October 1938. Freight shipments by rail showed marked improvement during October, so that the adjusted index reached the highest level since June 1937. The largest gains in the month were in the movement of ore and coke. Ship ments of coal, forest products, and of miscellaneous merchandise also expanded somewhat more than sea sonally, while the volume of less-thancarload lots declined slightly. Load ings of grain and livestock also were reduced. Freight-car loadings originating in the Philadelphia area and consisting primarily of manufactured goods in creased more than seasonally in Octo ber and were unusually well mainPage Five tained in the first three weeks of November. Registrations of new passenger auto mobiles increased sharply, advancing 44 per cent from September, when the new model season was just getting under way. Sales continued substan tially above last year’s levels, when the new cars were introduced at a somewhat later date. Total revenue of nonresort hotels increased 26 per cent from September to October and was at about the same level as in October 1938. Hotel business Philadelphia Federal Reserve District Oct.: per cent change from Month Year ago ago - 0 +19 —1 -4 1939 from 10 mos. 1938 Room occupancy.... Per cent of capacity used: Oct. 1939............... 58.1 Sept. 1939............... 48.9 Oct. 1938............... 55.6 Revenue from: Guest rooms........... F ood.......................... Other sources......... + 19 +38 +28 +i -3 +i -3 -4 -2 Total revenue. .. . +26 -0 -3 -3 Banking conditions. Reporting banks in this district have gained deposits in the past month and have increased their outstanding credit. Commercial loans declined somewhat from the year’s peak, but were unusually well sustained for the season. The reserves of member banks were at an all-time high of $615,300,000 on November 3, and in the first half of that month averaged $602,800,000. At Philadelphia banks, reserves were more than double requirements and were substantially larger than a year ago. While the growth in the year at coun try banks has been less spectacular, the excess of these banks was 78 per cent in the first fifteen days of November as against 50 per cent a year ago. Member bank reserves (Dollar figures in millions) Held Re quired Ex cess Ratio of excess to re quired Philadelphia banks: 1939—Oct. 1-15 $385.1 $200.5 $184.6 92% Oct. 16-31 410.9 205.0 205.9 100 ” Nov. 1-15 429.6 210.0 219.6 105 ” 1938 Nov. 1-15 238.7 171.3 67.4 39 » Country banks: 1939—Oct. 1-15 175.4 97.7 77.7 80% Oct. 16-31 172.9 97.1 75.8 78 ” Nov. 1-15 173.2 97.2 76.0 78 " 1938—Nov. 1-15 142.4 94.8 47.6 50 * Federal Reserve Bank of Philadelphia (Dollar figures in millions) Changes in— Reporting member banks (000,000’s omitted) Nov. 22, 1939 Five weeks One year Bills discounted........ $ 0.5 Bills bought............... 0 Industrial advances . 3.1 IT. S. securities......... 222.4 + $0.1 - 0.1 + 0.0 - 13.8 - $0.8 - 0.1 - 0.1 - 0.3 Total........................ Note circulation. . . . Member bank deposits U. S. general account T< oreign bank deposits Other deposits........... 1’otal reserves........... Reserve ratio............. -*13.8 + 8.1 + 9.0 + 41.4 - 2.3 + 3.4 + 73.7 + 2.7% - $1.3 + 24.3 +221.3 + 22.4 + 17.5 + 4.3 +286.4 + 7.4% $226.0 339.9 591.2 53.0 38.2 12.9 828.0 80.0% ment for new issues of public and cor porate securities originating in this district. The much smaller increase in reserves reflected the loss of funds through payments into the Treasury’s account for securities issued by the Re construction Finance Corporation and a substantial amount of unemployment trust funds which the states deposited with the government for investment. Total Treasury receipts exceeded local disbursements by about $28,000,000. Another factor tending to reduce the level of bank reserves was an expan sion of more than $14,000,000 in the demand for currency. The only material change in reserve bank credit was a decline of $13,800, 000 to $222,400,000 in the participation of this Reserve Bank in System hold ings of securities. Bonds and notes were sold from the investment account and Treasury bills were allowed to mature without replacement. Deposits at reporting banks estab lished a new record early in Novem ber. Some decline has since taken place, but the total of $1,696,000,000 reported on November 22 was still $20,000,000 greater than five weeks before and surpassed the low point in the spring of 1938 by $382,000, 000 or 29 per cent. Much of the recent gain has been in deposits of states and local governments. Bal ances of individuals, firms and cor porations also expanded, while inter bank deposits declined. Nov. 22, 1939 Changes in— Five weeks One 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............................. 196 24 21 31 56 1 98 -* 2 +$ - 2 + 3 + 0 + 1 + 0 + 4 + Total loans......................... $ 427 +® 4 +$ 14 Government securities........ # Obligations fully guar’teed. Other securities..................... 362 102 275 0 +*10 + 1 +* 19 + 5 7 Total investments............ $ 739 +*11 +* 17 Total loans & investments $1,166 Reserve with F. R. Bank. . 433 Cash in vault......................... 19 Balances with other banks. 214 Other assets—net................. 102 Liabilities Demand deposits, adjusted. $ 953 Time deposits........................ 279 U. S. Government deposits. 52 Interbank deposits............... 412 Other liabilities..................... Capital account.................... 16 222 +S15 +* 31 + 13 + 194 + 1 0 - 10 + 50 + 2 4 +S36 - 2 - 1 - 13 0 - 1 +*179 9 + 14 + 93 0 1 — 5 Loans and investments increased $15,000,000 to $1,166,000,000 and are in the largest volume in well over two years. The increase reflected chiefly the purchase of $10,000,000 of guaran teed securities, part of which is ac counted for by the allotment of newlyissued notes of the Reconstruction Finance Corporation. Holdings of cor porate and municipal securities also are up slightly, but the investment in direct issues of the United States Gov ernment at $362,000,000 shows no net change in the month. All but $39,000, 000 of this amount was in bonds. An increase of $4,000,000 in loans resulted principally from the extension of additional credit to brokers and dealers in securities and from an ex pansion in loans not otherwise classi fied. Commercial loans declined $2, 000,000 in the period to $196,000,000 but remain approximately 7 per cent larger than a year ago. The increase over last year was about in line with the expansion shown by reporting banks outside of central reserve cities. MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending— Changes in five weeks* Philadelphia Federal Reserve District (Millions of dollars) Oct. 25 Nov. 1 Nov. 8 Sources of funds: Reserve bank credit extended in district.... Commercial transfers (chiefly interdistrict). . Treasury operations.............................................. -1 .4 -1.0 +3.2 + 0.6 +10.3 + 2.2 - 3.5 +35.4 - 0.9 + 2.1 + 4.4 -24.1 +2.3 +5.3 -8.0 + 0.1 +54.4 -27.6 Nov. 15 Nov. 22 Total...................................................................... Reserves increased $9,000,000 in the five weeks ended November 22. Ap proximately $54,000,000 was gained in interdistrict transactions, chiefly as a result of incoming transfers in payPage Six 12 0 2 2 2 1 i +0.8 +13.1 +31.0 -17.6 -0.4 +26.9 Uses of funds: Currency demand.................................................. Member bank reserve deposits.......................... “Other deposits” at reserve bank.................... Other Federal Reserve Accounts..................... +0.7 -1.1 +1.2 +0.0 + + + + 1.2 4.2 7.7 0.0 + 7.9 +24.3 - 1.2 + 0.0 - 1.9 -14.4 - 1.3 - 0.0 +6.5 -4.0 -3.0 +0.1 +14.4 + 9.0 + 3.4 + 0.1 Total...................................................................... +0.8 +13.1 +31.0 -17.6 -0.4 +26.9 * Preliminary. Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS % ml (All figures are rounded from original data) Manufacturing Indexes 600 Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weight Oct. change from Oct. change from 1939 1939 ed proportionately.) index Sept. Oct. index Sept. Oct. 1939 1938 1939 1938 All manufacturing__ Iron, steel and products Non-ferrous metal prods Transportation equip. . Textiles and clothing. . . Textiles......................... Clothing........................ Food products................. Stone, clay and glass. . . Lumber products............ Chemicals and products Leather and products... Paper and printing......... Printing........................ Others: Cigars and tobacco... Rubber tires, goods. . Musical instruments . LXCESS REQUIRED 31 32 '33 ’34- '35 36 ’37 38 *39 40 41 CURRENCY DEMAND PHILADELPHIA FEDERAL RESERVE DISTRICT MILLION S $ +140 (Changes from Jan 1,1932) m jj 97 104 151 75 93 89 112 114 88 63 108 87 106 97 +18 +27 + 14 +27 +14 +15 + 8 - 2 + 15 + 10 +12 + 2 + 3 - 1 62 91 60 + 1 + 6 + 4 - 9 +12 +12 57 111 68 +12 + 9 * Figures from 2346 plants. +34 +57 +38 +56 +10 + » +16 +32 + 17 +29 +10 + 12 + 7 +19 +27 +16 +26 +12 + 14 + 2 - 1 +15 + 0 +15 + 2 + 5 + 0 +37 +55 +41 -56 -12 rl3 - 8 - 5 +32 +11 +40 + 6 +12 + 4 -12 +24 +25 + 2 + 13 + 9 -13 +23 +24 f Figures from 2115 plants. + 100 1938 ,'\ + 80 ^_ _ _ ,_ _ _ _ _ _/V .— 1936 60 % + 40 A ^ / \ 1937 « 1 + - - - - - - -■- - + 40 + 20 + 20 0 ***** - -20 -40 - ■ ■ 1 ■ . 1 ■ . JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT OCT. NOV DEC. - 40 Percentage change—October 1939 from October 1938 Manufacturing Employ ment Wage payments Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... Y ork....................... +21 +14 +19 +33 +10 +15 +13 - 0 +18 + 8 + 5 +17 + 6 +38 +43 +45 +67 +14 +22 +19 Allentown............. Altoona.................. Harrisburg. . . Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... York....................... + 9 +10 + 8 +11 + 3 + 5 + 6 + 5 + 9 + 4 + 3 + 9 + 6 +31 +21 +11 +26 + 19 Building permits (value) Debits + 8 - 18 +247 + 67 - 12 + 31 - 14 +177 +172 - 30 - 26 + 3 - 54 +13 + 9 - 8 +12 +11 + 2 +18 +15 + 7 + 3 +11 +12 +ii - 13 - 74 + 9 - 15 - 28 + 66 - 37 + 22 + 16 - 28 +582 - 32 - 45 +12 + 8 + 9 + 5 + 1 +14 +15 - 2 + 6 + 7 + 2 + 5 Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) Oct 1939 index General index Oct. 1939 index Sept. 1939 Oct. 1938 + 6 + 7 + 5 +13 + 1 + 2 - 1 - 0 + 5 + 2 + 0 - 2 + 2 113 134 68 110 58 111 132 95 109 118 104 97 98 (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................... Payrolls Per cent change from + 9 +15 - 2 +n - 5 +n - 2 +1 +1 + 4 - 7 - 3 - 7 Per cent change from Oct. 1938 + 16 + 18 +30 +27 180 236 89 245 83 238 154 105 128 125 118 127 119 Sept. 1939 +25 +34 +19 +37 - 3 +34 + o + 1 + 5 + 9 - 4 + 6 -15 +13 - 2 - :i + 7 + 4 + 3 + 3 - 0 Retail trade sales + 3 + 7 + 1 +13 + 4 + 7 - 1 + 3 +10 + 7 +11 - 1 October 1939 from September 1939 +19 +34 +22 +19 + 4 + 7 +19 +17 +10 +10 +11 +11 + 7 Covering twelve branches of trade and industry + 100 + 80 + 60 N. General Index Numbers + 120 1939. City areas* +15 +24 +23 +31 + 7 + 7 + 8 + 3 +18 + 9 +17 + 2 + 8 + 4 Sept. Oct. 1939 1938 + 140 - 0 + 7 +12 +10 +11 + 6 + 8 + 1 - 0 + 5 + 5 + 6 + 1 + 3 + 1 Oct. 1939— per cent change from $ + 120 - 20 ILL IONS 85 79 121 64 100 94 122 110 81 64 94 90 100 91 Employehours f INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES Of TRADE AND INDUSTRY 932AVG. slOO 200 AYROLLS M 1 _/ 150 + 7 - 3 - 0 +16 +11 + 9 - 1 +14 — 0 + 9 +25 - 2 /Vm \\ •/ 175 t 1 V’, t: l V-/ —A— r • *« * A .1i «v 125 1 ----------1~ 1 1 1 * •. A V V ------v too V* EMPL OYMENT 75 50 1933 1934 1935 1936 1937 1938 1939 * Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRADE Index numbers of individual lines of trade and manufactures TOTAL SALES Philadelphia Federal Reserve District STOCKS /v r\ / V J Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted Per cent chfinge Unadjusted indexes reflect merely the actual change which may or may not Oct. Aug. Sep Oct. be typical. 1938 1939 1939 1939 Oct. 1939 fro m Month Year ago ago DEPARTMENT STORES 1939 from Oct. Aug. Sep. Oct. 1938 1939 1939 1939 10 mos. 1938 SALES ■y Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel........................ Shoe............................................... Credit.......................................... 74 r 64 r 67 r 9b r 83 r 88 r Stocks of goods 77r 51r 104 r 63 r 103 r 78 85 67 74 70 76 96 106 84 98 100 98 79p - 6 69 - 7 74p - 2 98 - 8 81 -17 98p - 0 76 75 80p 52 51 53 107 105 109 70 67 67 95 94 108p + 6 + 5 + 4 + 1 +15 + 7 + 7 + 11 + 3 — 2 + 11 + + + + + + 6 87 r + 6 75 + 5 76 r + 0 108r + 2 93 r +11 110 4 4 5 7 5 Rate of stock turnover 86 r 58 r 125r 68 116 59 86 93p 50 74 80 53 69 83p 66 110 111 50 111 91 84 102 123p 73 81 48 54 101 121 71 72 92 103 +10* 3.05 STOCKS men’s APPAREL STORES 90p 61 131 73 121p 3.36 Wholesale trade Sales - 7* -15* _i_ x* - 6* - 9* -11* + 13* -14* +1* Stocks of goods Output of manufactures Pig iron.................................................. 39 52 58 71 Steel........................................................ 55 65 73 93 Iron castings......................................... 49 56 56 64 Steel castings........................................ 73 62 84 127 Electrical apparatus.......................... 57 76 77 84 Motor vehicles..................................... 17 22 20 23 Automobile parts and bodies........... 61 70 83 91 Locomotives and cars........................ 13 20 22 27 Shipbuilding......................................... 264 356 373 417 Silk manufactures............................... 80 89 82 90 Woolen and worsteds......................... 47 64 58 64 Cotton products.................................. 42 54 49 r 56 Carpets and rugs................................. 74 142 127 126 Hosiery................................................... 94 117 102 105 Underwear............................................ 122 164 144 147 Cement.................................................. 58 60 58 65 Brick....................................................... 34 36 45 r 50 Lumber and products........................ 26 27 28r 29 99 116 45 98 65 87 145 69 72 72 153 94 106 104 63 102 74 90 150 94 r 85 83 162 112 103 148 59 99 74 92 143 87 89 87 r 167 125 103 102 49p 100 79 91 151 86p 91 82 164p 138 * Computed from data unadjusted for seasonal variation. Page Eight 17* 2* 3* 16* 37* 6* 42* 29* 20* + 9* + 3* + 2* +28* + 1* + 19* +21* + 9* + 4* + _ + 4* + 4* +10* + 0* + 4* - 6* 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................................ + + + + + + + + + 2* 1* + 3* + 13* 5* + 6* + 5* + 2* + 82 + 70 + 31 + 75 + 48 + 33 + 48 +114 + 58 + 12 + 35 + 33 + 69 + 11 + 20 + 12 + 48 + 11 + 0* + 5 -31 — 12 -17 + 8 +1 + 2 + 7 + 22 - 2 + 4 + 6 + 5 - 2 + 25 + 3 + 26 - 6 + 13 - 2 + 7 +10 + 46 +23 +29 +13 +52 + 9 +18 + 10 +21 + 12 +10 +10 +14 - 1 + 2 + 2 +11 +12 + 4 — 4* +45 +34 +13 +39 +19 +20 +43 + 4 +41 +10 +38 +34 +99 +21 +25 +15 +34 +10 — o* +12 + 8 + 4 + 4 +12 - 0 - 8 +29 + 8 + 9 + 6 +34 39 55 52 69 62 16 58 12 254 82 52 43 83 103 133 65 34 27 88 103 98 59 121 «« 88 156 72 73 77 155 92 p—Preliminary. 46 67 54 60 84 18 66 21 352 87 65 49 130 101 153 76 37 30 85 89 89 71 109 74 87 161 91 85 85 163 109 54 69 57 76 84 17 78 21 355 82 64 46 140 102 144 68 45 r 29 70 93 68 121 91 21 86 26 401 92 70 57 144 115 160 73 51 30 103 128 76 115 74 91 163 91 89 83 169 120 108 86 73p 123 81 91 163 89p 92 88 165p 135 r—Revised. CREDIT STORES
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