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% THE BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA DECEMBER 1, 1942 VICTORY FUND DRIVE WaR expenditures are now running at an av commercial banks will be limited to approxi mately $2 billion for each series. Applications of commercial banks in amounts up to $100,000 will be allotted in full, and larger subscriptions on an equal percentage basis. All other sub scriptions will be allotted in full. For com mercial banks the subscription books will be open from November 30 through December 2 on the 1% per cent bond issue and from De cember 16 through December 18 on the cer On November 30 the Secretary of the Treas tificate issue. For others the subscriptions will ury launched the largest single financial opera be received over a period of several weeks tion in history to cover major requirements for from November 30. December and January. The colossal sum of $9 In the interest of sound financing the Treas billion of Government securities will be sold. In addition to the War Savings bonds, Treasury ury is endeavoring to secure, with the help of tax savings notes, and the regular weekly offer the Victory Fund Committees, the widest pos ings of Treasury bills, three new issues of se sible public participation. As the Secretary curities are included in the offerings for place said, “Every American will have an opportunity to back the armed forces with bonds.” Sub ment in December. scriptions are invited from individual investors, The principal security is the 26-year, 21/2 per corporations, trusts and estates, pension funds, cent Victory Bond, due December 15, 1968 and educational, religious, and endowed institutions, callable December 15,1963. Subscription books fraternal and social organizations, insurance were opened on November 30 and will remain companies, mutual savings banks, credit associa open several weeks. These bonds are available tions, cemeteries, state, municipal, and local either in coupon or in registered form. They pension and sinking funds, and all types of may not be held by commercial banks until beneficial and savings institutions. Banking in stitutions will assist in every way possible to 10 years after the date of issue. place the largest amount of securities prac ticable in the hands of non-bank investors. The other two offerings, which are intended for banks as well as other investors, are the At the same time, the effort is so gigantic 1% per cent bonds due June 15, 1948 and a % per cent certificate of indebtedness due De that banks will also be called upon to play their cember 1, 1943. The maximum allotment to own full share to insure the success of the opera- erage rate of well over $200 million each work ing day. Federal budget and Government corporation expenditures of $85 billion are in prospect for this fiscal year, which ends June 30, 1943. The expanded tax program will yield a total of about $21 billion. Borrowing, therefore, must produce more than $60 billion, or at a rate of $5 billion a month. Page One WAR LOAN DEPOSIT ACCOUNT To avoid the inconveniences that might result from heavy payments on new Treas ury securities, all incorporated banks and trust companies are urged to qualify them selves as special depositaries for public monies, if they have not already done so. When so qualified, they may give deposit credit to the Treasury in payment for se curities purchased through the bank either for their own account or for their cus tomers, unless the terms of the offering specifically provide for cash payment. Under this plan funds remain on deposit until called by the Treasury; being de mand balances, no payment of interest is required. Steps to be taken by banks which wish to qualify as “War Loan De positaries” are outlined in Circular No. 1102 of the Federal Reserve Bank of Phila delphia, which will be mailed upon request. tion. To equalize the burden of war financing, all banks should subscribe to Treasury securi ties in accordance with their capacities. The Federal Reserve Banks have taken sev eral steps to facilitate bank participation in the Treasury efforts. They stand ready to buy Treasury bills at a discount rate of % per cent and give selling banks the option of repurchas ing bills before maturity at a like rate. All Fed eral Reserve Banks lend at par on Government securities and have established discount rates of XA Per cent on advances to member banks se cured by Governments maturing or callable within one year. Present reserves will not suf fice for the expansion of bank investment which is to be anticipated as the war is prolonged, and it is fully in line with expectations that banks will have to borrow from time to time to par ticipate adequately in the war financial effort. than 6 per cent of all war contracts, and is thus benefiting from the vast expenditures of the Government. It is imperative that we do our full share in marketing Government se curities. This is our opportunity to fight on the home front. Business summary. The shift from the defen sive to the offensive by our armed forces was made possible in part by the productive achieve ments of American industry. At the same time it increases the urgency of the need for military equipment and supplies. These new demands are being met through expansion in total output and through reductions in civilian supplies. Construction activity is limited almost entirely to publicly-financed projects. Payrolls continue to establish new records as employment and working time expand to new peaks and average hourly wages continue at a high level. Despite unusually large volumes of savings, large increases in retail sales of many commodities indicate that much of the expand ed income is being spent and that the full effect of the war has not yet been felt. In a few wholesale lines, however, shortages are being reflected in smaller sales. Manufacturing. Demand for products of the heavy industries in this district is reaching new peaks as direct war orders expand to meet the increased requirements accompanying intensifi cation of the war effort. The greater urgency of military needs is further reflected in the con tinued decline in orders for a wide range of less essential goods. Manufacturing operations at establishments producing military equipment and supplies re main close to capacity. But in numerous civil ian lines production schedules are being revised downward, as shortages of labor and materials become _ more pronounced and transportation difficulties increase with the heavier movement of war goods. The volume of unfilled orders generally remains well above the level of other recent years. The success of the operation can be assured only if every section of the country participates to the utmost. The Third Federal Reserve Dis Factory employment in Pennsylvania rose trict is a very important unit in the national slightly further in October to a new high of economy. It comprises over 6 per cent of na about 1,190,000 workers and the volume of tional totals in labor force, manufacturing es tablishments, wages, value of products, retail wage disbursements increased 3 per cent to a record level estimated at $44,260,000. Activity sales, and in banking resources. The district is in durable goods industries continued to expand also playing an active part in producing war in the month, and larger than seasonal gains weapons and materials and has secured more were reported at certain textile mills and estabPage Two HOURLY EARNINGS AND WORKING TIME MANUFACTURING ACTIVITY PENNSYLVANIA FACTORIES THIpn rrnrRAI RESERVE DISTRICT PERCENT # 9 175 9 a' AVERAGE HOURLY EARNINGS PAYROLLS ____ V- - - - - 150 V e** 1 HOURS WORKED 125 100 AVG. PER WORKER PER WEEK 4T EM PL0YMENT PF ODUCTION ADJ. ro R SEAS. VARIA NON 75 1938 1939 1940 1941 1942 1943 lishments turning out leather products. In creases over a year ago, amounting to 4 per cent in employment and 23 per cent in payrolls, re flected chiefly gains in the heavy industries. Since the outbreak of war over three years ago, the number employed in these lines has consid erably more than doubled and wage payments have nearly tripled, while at plants making lighter products employment has shown a small decline and payrolls have advanced by less than one-third. Hourly earnings of factory workers in Penn sylvania averaged 94^/2 cents in October, as in the preceding month, but were nearly 15 per cent above the level of a year ago. Working time increased to an average of over 43 hours a week from 42 in September and 41^/2 iu Octo ber 1941. Weekly income advanced to a new peak, averaging $40.61, as against $39.48 in September and $34.02 a year ago. The average weekly wage in October was $15 more than in August 1939, and the highest in records back to the early 1920’s. 1937 1938 193 9 I 940 1941 1942 than seasonally from September to October but was 7 per cent greater than a year ago. Total sales failed to gain in the month, but sales to industries were unusually well maintained at a level 14 per cent above October 1941. Coal and other fuels. The market for an thracite remains strong, in spite of unusually large purchases by dealers and householders earlier this season. The demand for bituminous coal and coke also is active, sustained princi pally by the peak rate of operations in the heavy industries. Reserves of solid fuels are still being accumulated to avoid the possibility of shipping delays during the winter. Mine operators in some regions report con siderable difficulty in maintaining production schedules, owing to an acute shortage of labor. Output of anthracite and bituminous coal in Pennsylvania declined contraseasonally from September to October and was below the level of a year earlier. But in the first ten months, the production of both fuels was above 1941 levels. Coal shipments decreased somewhat in October following an exceptionally heavy movement In Delaware factories the number employed decreased somewhat from September to Octo through the summer and early fall. ber, but wage payments showed a small gain. Building. Construction activity in this district Employment and payrolls in southern New Jer in October continued near the highest levels of sey decreased slightly in this period. the year. As in other recent months, operations The output of factory products in this district were principally against contracts awarded for increased further in October to a level 18 per war facilities and other essential projects. cent above a year ago. In the heavy industries, New awards of building contracts declined output in October was 40 per cent greater than about one-third from the peak reached in Sep in 1941, but the production of lighter goods tember. The only increase in October was in showed a decline of about 6 per cent. residential contracts, reflecting principally Production of electric power increased less larger placements for one and two-family Page Three ACTIVITY IN THE STEEL INDUSTRY BUILDING CONTRACTS EMPLOYEE-HOURS IN PENNSYLVANIA PERCENT THIRD FEDERAL RESERVE OISTRICT MILLIONS STEEL WORKS AND ROLLING MILLS TOTAL BLAST FURNACES INDUSTRIAL ji 1937 1938 1939 1940 194 1 1942 houses. Awards for factories decreased 38 per cent from a high of $25 million in September, but they still accounted for one-half of all con tracts; declines also were sharp in the case of commercial structures and public works and utilities. Awards totaling $302 million in the ten months ended October were the largest in re cent years. The increase over the 1941 period was 10 per cent, the most pronounced gain being in contracts for factories, which expanded 85 per cent to $115 million. Drastic restrictions on private residential building imposed earlier in the year were reflected in a decline of 37 per cent in awards for these projects. Trade. Distribution at retail continues active as consumer incomes advance to new peaks. Sales by department and women’s apparel stores in this district increased on an adjusted basis from September to October, but at men’s apparel and shoe stores business did not meas ure up to seasonal expectations. Increases over a year ago were sharp in all reporting lines ex cept men’s apparel, where the dollar volume was substantially unchanged. Preliminary re turns indicate that retail sales generally ex panded further in early November. At department stores, sales for cash in Oc tober were sharply larger than twelve months earlier; purchases made on regular charge ac counts also increased slightly in the period, while those on the instalment plan declined. Collections on both charge and instalment ac counts improved in the month and were much more rapid than in 1941. Page Four 1936 1939 1940 1942 1943 Retail inventories in October increased less than usual at department and women’s apparel stores and were unchanged at shoe stores. Al though the dollar volume of stocks in most lines remained above the 1941 level, the increase has been narrowing sharply, reflecting in part the heavy purchases last year. Outstanding com mitments for merchandise by department stores increased somewhat further in October and were larger than a year ago for the first time since May. Aggregate sales in eight branches of whole sale trade increased about 2 per cent from Sep tember to October, reflecting gains in all lines except jewelry and paper. Sales showed mixed changes compared with a year ago, substantial increases being reported for shoes, drugs, gro ceries, and dry goods, while substantial declines occurred in the case of hardware, paper, elec trical supplies, and jewelry. In the first ten months, sales were above the 1941 level in all lines but electrical supplies, where there was a decrease of 13 per cent. Rail freight shipments in this section were heavy in October, when deliveries of commodi ties other than coal and coke exceeded seasonal expectations. Although the number of cars loaded continued somewhat smaller than a year earlier, the volume of freight handled by the carriers was greater, owing to heavier loadings per car. The number of cars loaded in the ten months ended October was slightly larger than in the 1941 period. Banking conditions. With over one-half of current production going into the war effort and steady building up of the armed forces, the DEPARTMENT STORE SALES AND STOCKS MEMBER BANK RESERVES THIRD FEDERAL RESERVE DISTRICT THIRD FEDERAL RESERVE DISTRICT PER CENT MILLIONS STOCKS 1> TOTAL, EXCESS SALES REQUIRED 1937 1938 1939 1940 1941 1942 cost of war has been rising rapidly. A sub stantial part of these funds has been supplied by the banks. In the third quarter of the year commercial bank holdings of Treasury securi ties are estimated to have risen $6 billion. In the Third Federal Reserve District the invest ment in Governments by weekly reporting banks in some of the principal cities increased $291 million in the period from July 1 to November 18, raising their total holdings to $965 million, or 58 per cent of all earning assets. Over $70 million of Treasury tax savings notes were sold in this district in September, more than $60 million in October, and sales continued substantial in November. Large amounts also are being raised through sales of War Savings Bonds as ever-increasing numbers of wage and salaried workers avail themselves of payroll savings plans for the purchase of these securities and increase their allotments for this purpose to 10 per cent or more of com pensation received. The only major open market issue placed in the past month was % Per cent Treasury cer tificates of indebtedness, on which payment was made November 5; subscriptions in this district were $96 million and the allotment, $58 million. Allotments were reflected in an increase of $18 million in certificate holdings of the reporting member banks in the four weeks ended Novem ber 18. Banks continued to bid actively on the weekly offerings of Treasury bills, with the re sult that holdings of these securities expanded $8 million to a new peak of $129 million at the reporting institutions; practically all of these have been acquired in the past year. Expansion of $22 million in aggregate invest ments of the reporting banks in the' four weeks ended November 18 was in contrast to further contraction in the loan portfolio, which de creased $17 million to $462 million, the lowest point since the early summer of 1940. Shrink age in recent months has been the result partly of a reduction in consumer instalment loans and a decline in open market paper, but principally of the decrease in commercial loans. At the present level of $251 million, commercial ad vances are $56 million under the March peak. The over-all expansion in bank credit, to gether with funds gained in interdistrict trans actions, has raised deposits to new peaks and resulted in heavier reserve requirements. Since the early fall of 1941 the reserve balances of member banks in Philadelphia have declined considerably, but on November 18 they were still about 20 per cent above requirements. At the country member banks reserves have in creased somewhat and are estimated at the present time to be from 35 to 40 per cent over requirements. In the latest period, covering the four weeks ended November 18, aggregate reserve balances increased $27 million to $643 million. The dis trict gained sharply in interdistrict transfers, but part of these funds was absorbed by the continued expansion in currency demand and operations of the Treasury. Among the principal receipts of the Treasury were funds from the sale of savings bonds, tax notes, bills and cer tificates, and withdrawals from depositaries, to gether with quarterly Social Security taxes and unemployment trust funds turned over by the States for investment. Page Five BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Industry, Trade and Service Adjusted for seasonal variation Not adjusted Employment Per cent cl lange Indexes: 1923-5=100 Indexes: 1932=100 Oct. 1942 from Oct. Sept. Oct. 1942 1942 1941 Oct. Sept. Oct. 1942 1942 1941 Mo. ago INDUSTRIAL PRODUCTION MANUFACTURING.............. 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................ Individual lines Pig iron...................................... Steel............................................ Silk manufactures.................. Woolens 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........... Paints and varnishes............. Coke, by-product.................... COAL MINING........................ Anthracite................................. Bituminous............................... CRUDE OIL............................... ELEC. POWER—OUTPUT. . Sales, total............................... Sales to industries.................. BUILDING CONTRACTS TOTAL AWARDS!................. Residential f............................. Nonresidentialf...................... Public works and utilitiesf.. Year ago 1942 from 10 mos. 1941 - 2 - 1 - 2 0 - 3 + 4 - 2 - 7 + 6 + 5 - 3 + 2 + 2 + 16 + 18 + 40 - 6 + 8 - 11 + 101 + 1 + 1 - 6 - 10 - 25 - 5 + 19 + 20 + 45 — 3 + 16 - 12 +114 + 7 + 11 + 3 - 4 - 9 0 139p 139 142p 140 121 121 162 69p 554 104p 141 56 137 103p 90 162 65 560r 109 127 54 138r 105 87 149 78 275 lOIr 139 59 154 138 94 no 119 108 - 8 130 136r 127 - 4 77 75 71 + 3 52p 53 0 73 59 63 57 r - 6 50p 50 92 - 1 74 69 79 + 7 139 144 148 - 3 75p 71 80 + 5 70 68 r 70 + 3 29 27 33 + 8 — 4* 98 96 99 44 70 82 -37 86p 107 97 r -19 115 109 113 + 6 80 78r 89 + 3 91 90 94 + 1 119 115 144 + 3 76p 76 117 0 83 90 92 - 8 162 166 151 - 2 72p 86 78r -17 70p 85 76r -18 85 97 r 92 r -13 458 465 439 -1 365 378 340 - 3 371 380 339 - 2 290 280 255 + 4 + + + + + + + + + + + + n + 10 0 - 16 + 4 - 50 - 12 0 109 130 79 107 127 72 79 58r 102 86 161 89 71 34 + + + + + + + + 81 152 84p 3 70 3 30 8* 110 0 102 21 37 15 134p 11 141 0 82 0 92 11 129 5 8 Op 7 89 7 159 6 76p 5 74p 13 91 14 458 10 376 11 371 15 282 112 129 75 56 60 51 69 144 84 68 28 114r 98 60 141 126 78 r 89 131 79 85 159 84 82 99r 465 371 376 297 103 69 135r 139 90 95 155 122r 99 148 83 r 81r 98r 439 350 339 248 126 45 243 110 + 21 - 48 +148 - 25 + + + 11 33 29 55 120 39 195 184 107 100 94 154 136p 139p 220p 84p 156 68p 578 93p 116 52p 136 97p 89 139 140 226 83 160 65 591 r 100 109 50r 140r 95 88 124 33 208 202 117 117 157 90r 144 76r 288 92 r 114 55 151 130 93 104 87 98 146 + 2 +38 +17 —46 ♦Unadjusted for seasonal variation. f3-month moving daily average centered at 3rd month. T.nr'ol T^ilQinPOd Oct. 1941 Sept. 1942 + 1 - 1 0 - 2 + 1 + 1 - 1 - 1 + 2 + 1 0 + 5 - 3 + 7 - 5 + 1 - 9 + 7 +16 - 7 - 4 — 9 +17 + 5 +33 - 4 + 6 + 5 + 2 - 1 + 5 + 2 + 8 + 4 + 8 +11 +10 + 6 - 1 +24 + 4 +22 - 1 +31 +45 +10 +10 +14 +60 +25 +81 +23 +20 + 3 i i + i i i -93 -26 284 410 83 310 125 335 196 131 156 145 142 160 157 + 3 + 3 - 5 0 - 1 - 6 - 3 - 1 - 8 - 2 • 5 - 2 +11 +16 +23 - 2 - 6 + 1 - 2 + 9 + 2 0 - 2 +14 - 2 0 Manufacturing Employment* Payrolls* Per eent Per cent Oct. changefrom Oct. changefrom 1942 1942 index Sept. Oct. index Sept. Oct. 1942 1941 1942 1941 Index: 1923-5=100 TOTAL...................................... Iron, steel and products__ Nonferrous metal products. Transportation equipment. Textiles and clothing.......... Textiles................................. Clothing................................ Food products....................... Stone, clay and glass........... Lumber products.................. Chemicals and products... Leather and products......... Paper and printing.............. Printing................................. Others: Cigars and tobacco........... Rubber tires, goods........... Musical instruments......... 115 0 126 0 191 0 124 + 3 88 - 1 80 - 1 121 - 1 121 - 2 94 +1 53 0 118 0 91 0 100 +1 91 +1 167 234 350 204 113 105 156 154 125 71 176 122 128 112 + 3 +23 + 8 + 6 +31 - 8 - 8 - 7 + 2 - 6 -22 + 3 - 7 - 7 - 4 + + + + + + + + + + + + 2 5 6 8 9 8 1 7 6 1 6 3 2 +23 +27 +65 + 7 + 8 + 3 +14 + 5 - 9 +16 + 7 + 2 + 5 69 111 62 - 6 +14 -18 81 183 100 + 7 +10 +38 + 8 +37 0 +12 + 4 +u ♦Figures from 2877 plants. Factory workers Averages October 1942 and per cent change from year ago Debits Oct. 1941 Sept. 1942 Oct. 1941 H6 b 8 -b 2 + -66 + 8 +103 — 6 +25 -95 -37 +26 -97 - 1 + 4 - 8 -10 -17 - 9 - i - 2 - 5 -12 - 1 - 7 - 8 +1 0 - 1 - 2 - 2 - 2 - 3 0 + 8 0 + 2 - 1 + 3 Hours and Wages Sept. 1942 +21 - 6 +26 bl5 bll bl4 b 3 L10 b 7 +20 +21 +22 -18 +18 +12 0 - 8 +15 - 8 + 3 - 6 +10 +13 +17 +30 +13 + 4 +16 + 2 + 9 + 3 + 3 -32 + 9 + 7 + 4 + 4 + 1 ♦Area not restricted to the corporate limits of cities given here. Page Six 130 52 233 116 sales Oct. 1941 j Sept. 1942 1 Oct. 1941 ! Sept. 1942 —— Scranton....... Trenton............... Wilkes-Barre___ Williamsport.... Wilmington........ York..................... Building permits value 11 m Philadelphia.... Fayroils + + /lift run o* —O >M Allentown........... Altoona........... Harrisburg.......... Johnstown...... employment + + 61 GENERAL INDEX........... 135 M anufacturing...................... 179 Anthracite mining................ 62 Bituminous coal mining... 96 Building and construction . 56 Quar. and nonmet. mining. 118 Crude petroleum prod......... 139 Public utilities...................... 104 Retail trade........................... 117 Wholesale trade.................... 114 Hotels...................................... 99 Laundries............................... 110 Dyeing and cleaning........... 103 p—Preliminary. r—Revised. ► 'J-'lV O O N Percentage change— October 1942 from month and year ago 2 2 10 28 4 45 6 6 5 1 12 11* 1 47 11 2 9 4 17 35 10 7 8 8 8 4 7 9 14 Payrolls Per cent Per cent Oct. change from Oct. change from 1942 1942 index Sept. Oct. index Sept. Oct. 1942 1941 1942 1941 - 7 - 1 + 3 +42 +12 +16 TOTAL............................. Weekly working time* Aver- Hourly earnings* Weekly .eamingst hours Gh’ge Aver- Cli’ge Aver- Gh’ge age age 43.3 + 4 $.945 Nonfer. metal prod .. . Transportation equip.. Textiles and clothing.. Textiles........................ Clothing....................... Food products.............. Stone, clay and glass.. +14 $40.61 43.4 + 2 .878 +19 47.7 + 5 1.094 +18 39.0 + 4 .664 +12 39.7 + 4 .687 +12 37.4 + 3 .606 +1# 42.2 + 2 .709 +11 38.7 + 2 .854 + 8 43 0 + 2 .656 +10 Chemicals and prod... 40.6 + 4 .984 + 8 39.8 + 3 .669 +12 Paper and printing. . . 41.1 .825 +10 0 Printing........................ 38.9 + 1 .949 + 5 Others: Cigars and tobacco. . 39.4 + 2 .546 +14 Rubber tires, goods.. 42,4 + 6 .866 +14 Musical instruments. 46.5 + 6 .908 +28 *Figures from 2688 plants. +19 38.11 52.18 25.73 27.26 22.66 30.02 33.03 27.96 39.55 26.68 34.78 38.36 +18 +12 +13 +10 +13 +13 +15 +11 + 9 21.49 36.75 42.17 +15 +20 +36 fFigures from 2877 plants. +21 +25 Distribution and Prices Wholesale trade Unadjusted for seasonal variation Per cent change 1942 Oct. 1942 from from 10 Month Year mos. ago 1941 ago Sales - 2 b 6 b 2 - 3 - 4 - 4 - 6 -14 - 9 Inventories Paper.'..................................... + 3 +56 +16 + 9 -22 +14 -10 -23 -19 - 7 + 7 - 6 -20 - 7 - 8 - 3 - 2 Boots and shoes................... Adjusted for seasonal variation Indexes: 1935-39=100 -14 +1 +10 -48 -23 -27 -14 + 1 +14 +21 +11 +33 -13 +13 +17 + 4 +33 Oct. Sept. Oct. 1942 1942 1941 RETAIL TRADE Sales Department stores—District...................... Philadelphia............. Women’s apparel............................................ Men’s apparel.................................................. Shoe.................................................................... Not adjusted Per cent change 1942 from 10 mos. 1941 Oct. 1942 frenn Month Year ago ago 139p 138 123 117 143p 133 132 118 128 143 118 115 96 117 106 + + + - 5 4 5 8 1 +18 +20 +28 0 +34 157p 157* 149 104p 174 176 151 104 132 122 133 107 -10 -11 - 2 0 +19 +29 +12 — 3 130 126 75 121 200 197 132 132 118 131 122 73 137 193 205 129 117 115 137 138 106 127 171 182 132 113 99 - 1 + 3 + 3 -12 + 4 - 4 + 3 +13 + 2 - 5 - 8 -29 - 5 +17 + 8 0 +17 +19 85 88 133 [-13 -15 -11 -10 1-26 Oct. Sept. Oct. 1942 1942 1941 160p 160 141 131 160p 143 143 137 115 163 136 133 109 131 119 185p 187* 182 112p 184 185 177 112 156 146 162 115 +1 - 2 -18 + 7 +14 + 9 + 1 + 2 +12 143 151 79 138 271 197 134 136 142 148 139 77 143 308 197 138 119 137 150 147 112 145 232 182 133 116 119 78 Inventories Source: U. S. Department of Commerce. Prices Basic commodities (Aug. 1939=100).... Per cent change from Oct. Month Year Aug. 1939 1942 ago ago +n + 8 +70 +1 + 9 119 117 + 9 +1 +15 126 + 2 0 +13 126 0 + 1 107 0 0 104 0 + 8 Housefurnishings... 122 0 + 5 Other.......................... 113 Source: U. S. Bureau of Labor Statistics. +21 +20 +35 +27 + 4 + 7 +22 +12 (1926-100)................ Food.............................. Other............................ Living costs (1935-1939=100).... 170 +1 100 109 103 95 0 + 1 + 1 0 +21 +16 + 2 Philadelphia............... Food............................ Clothing.................... +33 +79 +54 +19 FREIGHT-CAR LOADING Total................................................................... Merchandise and miscellaneous................. Merchandise—l.c.l.......................................... Coal.................................................................... Ore...................................................................... Coke................................................................... Forest products.............................................. Grain and products........................................ Livestock........................................................... MISCELLANEOUS Life insurance sales.......................................... Hotels—(1934 = 100) - 3 Check payments............................................... 140 ♦Computed from unadjusted data. 151 142 p—Preliminary. -12 71 121 + 7* +13* + 8* 132p 127 +14* 155p 133 124 136 + 6* -24* - 7 Income, total................................................... Business liquidations -36 + 4* +16* -38* -46* - 1 -33* 51 -55* 19 + 5 145 82 34 146 48 25 143 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (000,000’s omitted) Nov. 18, 1942 Assets $ 251 26 25 30 Other loans to carry secur.. 47 83 Changes in— Four weeks One year -$ - 9 2 1 2 -$ 51 - 18 4 - 3 - 3 - 30 $ 462 —$17 -$106 Government securities......... $ 902 Obligations fully guar’teed.. 63 245 +$24 - 1 - 1 +$450 - 36 - 23 $1210 +$22 +$391 Total loans & investments. $1672 Reserve with F. R. Bank... 430 28 Balances with other banks.. 108 66 +$ 5 + 26 + 1 + 5 +$285 - 116 + i Liabilities _ Demand deposits, adjusted. $1482 160 U. S. Government deposits.. 42 389 +149 - 1 - 31 + 22 +$222 - 88 + 21 Hi - + 12 219 2 - 10 4 4 Changes in weeks ending— Changes in four weeks Philadelphia Federal Reserve District (Millions of dollars) Oct. 28 Nov. 4 Sources of funds: Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict)....................... Treasury operations.................................................................. -12.1 +17.1 +15.0 - 2.3 +31.2 -38.8 +17.8 +19.9 +13.9 - 2.3 + 8.1 + 3.1 + i.i +76.3 - 6.8 Total............................................................................................ +20.0 - 9.9 +51.6 + 8.9 +70.6 + + + - 7.9 9.2 3.1 0.2 +12.6 -25.2 + 3.0 - 0.3 + 6.5 +46.2 - 0.8 - 0.3 + + - 5.7 3.1 6.7 0.4 +32.7 +27.1 +12.0 - 1.2 +20.0 - 9.9 +51.6 + 8.9 +70.6 Uses of funds: Currency demand...................................................................... Member bank reserve deposits.............................................. “Other deposits” at Reserve Bank....................................... Other Federal Reserve accounts............................................ Total............................................................................................ Federal Reserve Bank of Phila. (Dollar figures in millions) Changes in— Nov. 18, 1942 Bills discounted.... $ Four weeks One year 0.9 -$ 0.2 +$ Industrial advances. U. S. securities......... 5.1 361.7 - 0.2 + 43.1 + 1.3 + 189.7 Note circulation... . Member bk. deposits U. S. general account Foreign deposits---Other deposits......... $367.6 802.1 642.6 12.7 67.6 21.4 1192.8 77.1% +$42.7 + 31.7 + 27.1 - 28.6 - 2.1 + 12.0 - 3.8 - 2.3% +$191.5 + 271.2 - 111.7 - 38.3 - 32.6 + 10.4 - 102.5 - 12.4% Reserve ratio........... 0.5 Member bank reserves (Daily averages; dollar figures in millions) Phila. banks 1941: Nov. 1-15.. 1942: Oct. 1-15.. Oct. 16-31.. Nov. 1-15.. Nov. 11 Nov. 18 Re Held quired Ex cess Ratio of excess to re quired $557 388 391 393 $306 324 335 337 $251 64 56 56 82% 20 17 17 Country banks 1941: Nov. 1-15.. $223 1942: Oct. 1-15.. 233 Oct. 16-31.. 233 Nov. 1-15.. 235 $138 162 168 170 $ 85 71 65 65 62% 44 39 39 ♦Reciprocal bank balances now reported net. Page Seven National Summary of Business Conditions INDUSTRIAL Industrial output expanded further in October and the first half of No vember. Retail food prices continued to advance while prices of other commodi ties generally showed little change. Distribution of commodities to consumers was maintained in large volume. PRODUCTION Federal Reserve monthly index of physical volume of production, adjusted for seasonal variation, 1935-39 average = 100. Latest figures shown are for October 1942. DEPARTMENT STORE SALES AND STOCKS Federal Reserve monthly indexes of value of sales and stocks, adjusted for seasonal vari ation, 1923-25 average =100. Latest figures shown are for October 1942. COS OF LIVING HI 130 120 „„ 130 120 ALL ITEM " r/ 1 RENT 100 r/--------- -----------FOOD 1936 1937 1938 130 1939 1940 1941 1942 Bureau of Labor Statistics’ indexes, 1935-39 average = 100. Fifteenth of month figures. Last month in each calendar quarter through September 1940, monthly thereafter. Latest figures shown are for October 1942. EXCESS RESERVES OF MEMBER BANKS BSSh SIMMS Wednesday figures, partly estimated. Latest figures shown are for November 11, 1942. Page Eight Production. Industrial production continued to advance in October and the Board’s seasonally adjusted index rose 3 points to 188 per cent of the 1935-1939 average. Gains in armament production accounted for most of the increase, and it is estimated that currently well over 50 per cent of total industrial output is for war purposes. In lines producing durable manufactures, approximately 80 per cent of output now consists of products essential to the war effort. Steel1 output reached a new high level in October as production expanded to 100 per cent of rated capacity. In the first half of November output declined slightly to around 99 per cent, reflecting some shutdowns for furnace repairs, according to trade reports. Activity in industries producing nondurable goods declined less than seasonally in October. Production of foods, especially can ning, was unusually large for this time of year and output of textiles continued at a high level. Mineral production, which usually increases in October, de clined slightly this year owing chiefly to a decrease in coal production which had been maintained in large volume throughout the summer. Value of construction contracts awarded in October increased somewhat over that of September, according to reports of the P. W. Dodge Corporation. Publicly-financed projects continued to account for over 90 per cent of total awards. The Department of Commerce estimates that, in the third quarter of 1942, expenditures for new construction amounted to 4.2 billion dollars, of which 3.5 billion came from public funds. For the first nine months of this year the cor responding figures were 10.2 and 7.7 billion dollars. Construction of military and naval facilities and of industrial buildings accounted for the bulk of the expenditures. Distribution. Department stores sales increased in October and the Board’s seasonally adjusted index rose to 129 per cent of the 1923-1925 average as com pared with 123 in September and 130 in August. In the first half of November sales increased further and were 17 per cent larger than in the corresponding period last year, reflecting in part price advances of about 10 per cent. Railroad shipments of freight were maintained in large volume during October and declined seasonally in the first half of November. Commodity prices. Retail food prices continued to advance sharply from the middle of September to the middle of October and further increases are indi cated in November. Prices of most other goods and services increased slightly in this period. In the early part of October maximum price controls were es tablished for a number of additional foods. Maximum price levels for many other food products have been raised, however, and the Office of Price Admin istration reports on the basis of a recent survey that in numerous instances sellers are not complying fully with the regulations now in effect. Bank credit. Excess reserves of member banks were 2.5 billion dollars in the middle of November, a somewhat higher level than generally prevailed in the preceding four months. At New York City banks excess reserve amounted to about 500 million dollars. Additions to member bank reserve balances during the four weeks ending November 18 were the net result of an increase of 500 million dollars in Re serve Bank holdings of Government obligations, which approximately covered the continued heavy currency drain, and a decrease of 200 million in Treasury balances at the Reserve Banks. Holdings of Government securities by reporting banks in 101 cities in creased by 1.9 billion dollars to 24 billion during the four weeks ending Novem ber 11. Almost half of the increase occurred at New York City banks. There were substantial increases in holdings of Treasury notes, bonds, and certificates, and a smaller increase in Treasury bills, while holdings of guaranteed obliga tions declined. These changes reflected new offerings and retirements by the Treasury during the period. Commercial and industrial loans at reporting member banks in leading cities increased somewhat during the first two weeks of November. Brokers’ loans in New York City increased around Government financing dates, but sub sequently declined. United States Government security prices. Prices of United States Government securities were steady in the four weeks ending November 18. Long-term taxable bonds yielded 2.32 per cent, and 3-month Treasury bills sold at a yield of 0.37 per cent. t
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