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FEDERAL RESERVE BANK OF PHILADELPHIA

A Tempest in the Sugarbowl
The $ 6 0 0 Billion Question

BUSINESS REVIEW

is produced in the Department of Research. Evan B. Alderfer was primarily
responsible for the article, " A Tempest in the Sugarbowl" and Kathryn Kalmbach for "The $600 Billion
Question." The authors will be glad to receive comments on their articles.
Requests for additional copies should be addressed to Bank and Public Relations, Federal Reserve Bank
of
Philadelphia,
Philadelphia I, Pennsylvania.

A TEM PEST IN TH E
SUGARBOWL
You may not know it but you consume almost

Inside the warehouse sits a mound of raw

a hundred pounds of sugar a year. Multiply that

sugar of 40 million or 50 million pounds. In

by all the people in the country and it comes to

another building sits refined sugar, packaged for

almost 10 million tons. A monstrous mountain

shipment to retail outlets; and huge silos hold

of sugar that would be; but it arrives in many

bulk sugar for the bakers, candy manufacturers,

smaller mounds from many places. Most of the

and other large buyers in Philadelphia and en

craving for sweetness is currently appeased with

virons. The transformation of the raw amber-

sugar grown in half the states and imported from

colored cane sugar into pure snow-white gran

about 25 foreign countries.

ulated table sugar and other finished forms adds

Pennsylvania grows no sugar, but does con

comparatively little to the value of the raw ma

siderable refining of raw sugar from nearby and

terial, and that is one reason why sugar refining

faraway sources. Pennsylvania’s refineries, both

is done by relatively few, but large, establish

of them, are in Philadelphia hard by the Dela

ments operating expensive equipment. Whether

ware River which affords deepwater access to the

in Philadelphia or elsewhere, sugar refining is

oceanic waterways of the world. Most ships com
ing up the Delaware are usually heavily laden

a big-volume operation.

with some industrial raw material such as iron

S u g a r in a bu n d an ce

ore for the smelting furnaces, crude oil for the

The overwhelming abundance of sugar seen at

petroleum refineries, or raw sugar for the sugar

a seaboard refinery should dispel all fears of a

refineries.
Almost any time, a sugar ship may be seen

sugar shortage. Shelves in grocery stores and

moored with a stout hawser to the wharf of a
refinery, and the chances are that the vessel has

and the sugarbowls in the country’s 55 million

supermarkets are usually well-stocked with sugar,
households

are

never

empty— almost

never.

a Latin American name and flies a Latin Ameri

Sugar is a well-behaved household and industrial

can flag. Suspended from a high overhead struc

commodity. It is seldom given any thought, is

ture reaching out over the vessel is a vertical

seldom scarce, is generally taken for granted. As

flume. This is a marine leg supporting an end

a source of energy, quick and sweet, sugar has

less chain with scoops that hoist raw sugar, like

long been a readily available, low-priced food.

so much sand, out of the hold and dump it on

Ordinarily, the price of sugar is well-behaved

a moving belt overhead for transport to the ware

also. Unlike the prices of some commodities that

house. Deep down in the hold, power-driven drag

are notoriously jumpy, the price of sugar is cus

lines keep feeding the flume with sugar gathered

tomarily calm, serene, sedate. Sugar prices are

from the remotest recesses of the hold until the

rarely noteworthy enough to be lifted out of the

entire cargo is unloaded.

financial section of the press for front-page dis

business review

play, very seldom indeed. For almost a decade,

latest prices are posted as fast as sales are con

the price of a hundred-pound bag, which the

summated.

baker and the confectioner buy, has not varied

Two of the four walls of the Exchange floor

as much as a half-dollar between the high and

are lined with telephone stalls connecting the

the low in any one year. And for years the price

sugar pit with the rest of the United States and

of the 5-pound bag that the housewife buys has

other countries. Calls to buy and sell keep com

hovered around 60 cents, plus or minus a cent

ing in constantly as the price of sugar jumps up

or two.

and down. Some of the buying and selling is for
purposes of hedging, some for speculation. When

Thar she b lo w s

a commodity goes into orbit, as sugar did last

This year, sugar stepped out of character, aban

spring, the phenomenon inevitably attracts “ out

doned its serenity, acted up. As the year opened,

siders” who go along for the ride. Many also

the spot price of raw cane sugar in the New
York market was $6.62 per 100 pounds— nothing
unusual. Soon, thereafter, the market strength
ened and prices began to rise. Through the re

R A W SU G A R : A V E R A G E W H O L E S A L E PRICE PER
POUND
CENTS

mainder of the winter and well into spring, sugar
prices continued to climb. Late in May, the price
reached a peak of $13.20— almost double the
price at the beginning of the year. Nothing like
this had happened in more than 40 years.
As a consequence of the sharply rising price
of raw sugar, the price of refined cane sugar was
raised a dozen times or more for a total increase
of about 70 per cent. Sympathetic but smaller
price increases occurred in retail sugar markets.
Not since World War I had sugar attracted so
much attention.
At the New York Coffee and Sugar Exchange,

23 peak. Within a few weeks, sugar suffered a

where the two commodities are bought and sold

net decline of more than 400 points, which is

for future delivery, the sugar pit became a scene

4 cents in the jargon of the trade. Thereafter,

of feverish activity and pandemonium continues

prices continued an erratic course, as shown in

to prevail. Traders crowd around the ring ges

the chart.

ticulating and shouting like madmen. What ap
pears like mass lunacy is in fact an organized

End of the su g a r surplus

exchange, for the shouts and gestures are bids

The booming price did not mean that the country

and offers, and proof of the fact that there is a

had gone on a sugar jag. Consumption of sugar

meeting of the minds midst the apparent mad

changes very little from one year to another,

ness is the constant rushing of messengers back

except for a rising trend to accommodate the

and forth between the ring and the board where

needs of a growing population. There was, of

business review

course, some scare buying for the purpose of

Sources o f our su g a r

augmenting inventories. Even some housewives

Sugar consumption in the United States is con

stocked up.

siderably in excess of our production, so we im

The basic reason for the tempest in the sugar-

port from countries that grow more sugar than

bowl is that the longstanding worldwide sugar

they consume. We obtain about 60 per cent of

surplus had come to an end. The trouble started

our requirements from domestic areas and buy

in Cuba. Under Castro’s mismanagement of the

the rest from foreign countries.

country, production of cane sugar in Cuba has

A little less than half of the sugar from domes

declined to about half of what it was formerly.

tic areas is beet sugar, and practically all of the

Coincident with the Cuban debacle, world pro

imported sugar is cane sugar. The consumer,

duction of sugar was adversely affected by two

spooning sugar from

successive years of low-yield sugar beet crops in

whether he is sweetening his coffee with beet or

Europe owing to unfavorable weather conditions.

cane. They look alike, taste alike, serve alike.

Cuban production in the 1962-1963 crop year

Though cane and beet sugar serve the same

was an estimated 3.8 million metric tons in con

dietary needs, they are of different botanic, geo

trast with her 1960-1961 crop of 6.8 million

graphic, and industrial origin.

the bowl,

cannot tell

tons. Western Europe’s sugar beet production in
the 1962-1963 crop year, estimated at less than

R a isin g cane

8 million metric tons, is in contrast with a 1960-

Sugar cane, a giant-stemmed perennial grass,

1961 crop of 10.8 million tons. Curtailed output

thrives best in the frost-free tropics and semi

in these two important areas was chiefly re
sponsible for an estimated worldwide production

tropics where sunlight and rainfall are abundant.
It throve best of all in pre-Castro Cuba where

in 1962—1963 only slightly over 51 million metric

the original stems produced seven or more good

tons.

crops without renewal planting and with a corre

Meanwhile the demand for sugar grows as the

sponding saving in labor.

world population increases and living standards

At harvest time, the tall stalks are cut and

rise. Each year the world’s population increases

hauled to a nearby sugar mill where they are run

by about 60 million. Current world consumption

through crushers to extract the juice. The juice

of sugar is estimated at 56 million metric tons,

is then treated to remove some of the impurities,

or about 4 million tons in excess of production.

after which it is processed into brown crystals

A strange state of affairs for a commodity that

of raw sugar retaining a protective film of

has been in abundance, often overabundance, for

molasses.

so many years!

Three of our states produce cane sugar—

The shift in the world sugar situation altered

Louisiana, Florida, and Hawaii. These states, to

numerous trade channels both here and abroad.

gether with the Commonwealth of Puerto Rico

Substantial changes were wrought in the United

and, to a lesser extent, the Virgin Islands, are

States because of our large sugar consumption

our leading domestic sources of cane sugar.

and because of a complex sugar situation, partly
self-imposed, that existed here before the world

R e fin in g cane

wide supply-demand imbalance occurred.

Refining of cane sugar in the United States is

business review

THE C A N E S U G A R R E FIN IN G P R O C E SS
CANE SUGAR REFINING CON
SISTS OF CONVERTING RAW
SUGAR INTO REFINED SUGAR.
RAW SUGAR CRYSTALS ARE
SURROUNDED BY A FILM OF
M O U S S E S ALONG WITH A
NUMBER OF IMPURITIES, ALL
OF WHICH MUST BE REMOVED
DURING THE REFINING PROC
ESS. AFTER PURIFICATION A
VARIETY OF REFINED SUGARS
ARE PRODUCED IN PACKAGED,
BULK, OR LIQUID FORM. IT
TAKES ABOUT 107 POUNDS
OF RAW SUGAR TO PRODUCE
100 POUNDS OF REFINED
SUGAR. ONLY THE MAJOR
STEPS OF THE HIGHLY TECH
NICAL REFINING PROCESS
ARE HERE ILLUSTRATED.

THE TREATED SYRUP IS
FORCED THROUGH FILTERS
WHICH REMOVE ALL INSOLU
BLE IMPURITIES.

RAW
SUGAR

RAW SUGAR IS MIXED WITH
A SYRUP IN A MINGLER TO
SOFTEN THE MOLASSES SU R
ROUNDING THE CRYSTALS.

A SUBSTANCE THAT HELPS
REMOVE THE IMPURITIES IS
ADDED TO THE SYRUP IN A
SPECIAL TANK.

THE FILM OF MOLASSES IS
SPUN OFF THE CRYSTALS IN
A CENTRIFUGAL MACHINE.

THE CRYSTALS ARE DIS
SOLVED IN WATER IN A
MELTER SO THAT THE RE
SULTING SYRUP CAN BE FIL
TERED.
THE AMBER SYRUP IS PER>'
COLATED THROUGH A CHAR
COAL-LIKE SUBSTANCE IN A
CHAR FILTER WHICH AB
SORBS SOLUBLE COLOR-PRO
DUCING IMPURITIES.

Source: United States C a n e S u g a r Refiners’ A sso cia tio n .

performed by 17 companies operating 22 re

fornia. Those on tidewater are among the largest

fineries in 11 states— Massachusetts, New York,

and have excellent locations and facilities for

Pennsylvania,

handling raw sugar arriving by the shipload

Maryland,

Georgia,

Louisiana,

Texas, Missouri, Illinois, Wisconsin, and Cali

from offshore areas.

business review

THE COLORLESS SYRUP IS
THICKENED BY EVAPORATION
AND BOILED IN A VACUUM
PAN UNTIL CRYSTALS FORM.

PACKAGED
SUGAR
THE FAMILIAR VARIETIES OF
REFINED SUGARS ARE PACK
AGED IN CARTONS AND BAGS.

BULK
SUGAR

LIQUID
SUGAR

REFINED SUGARS ARE PRE
PARED FOR MANY INDUS
TRIAL USERS IN BULK OR
LIQUID FORM.

It is amazing how much machinery and equip

complex— centrifugals to separate molasses from

ment is required to refine raw sugar, which is

the sugar crystals, huge melting tanks to re

already all sugar except for the 2 or 3 per cent

duce the crystals to a syrup, various types of

of impurities. A cane sugar refinery is a vast

filters to remove insoluble impurities, large char

business review

cisterns for color removal, great vacuum pans

About half of the sugar produced or refined in

for

the West is traditionally marketed in Wisconsin,

crystalization,

automatic

packaging

chinery, and related equipment.

Illinois, Indiana, Michigan, and Ohio, where
supplies from all markets converge. Curiously,

The su g a r beet

beet sugar goes to market as just plain “ sugar,”

A sugar beet looks like a beet, grows like a beet,

while cane sugar is always marketed as “ cane

is a beet. In most areas it is planted in the spring,

sugar” — probably because of consumer prefer

diligently cultivated, and, if necessary, irrigated

ence for cane sugar, particularly on the part of
many housewives.

throughout the summer, harvested in the fall,
processed for its 12 to 15 teaspoons of sugar,
and tenderly godfathered by Uncle Sam.

THE UNITED STATES S U G A R SYSTEM

At various times and different places through

Throughout the civilized world, sugar has long

out the country, efforts had been made to grow

had a peculiar susceptibility to Government reg

and process sugar beets. Prior to 1880 there were

ulation. In the United States for almost a cen-

14 such attempts and 14 failures. Eventually,

tury-and-a-half— from 1789 to 1934— the sugar

the industry was established with the aid of a
tariff and considerable technical assistance from

industry has been protected and regulated al
most solely by tariff duties. Thereafter, regula

both Government and private sources.

tions became more complex.

Sugar beets are grown in numerous states—
with California, Colorado, and Idaho the lead

Since 1934 the industry has operated under a
quota

system.

The

Sugar Act o f

1948,

ers, in that order. Now a highly mechanized

amended and currently in effect, establishes

farming operation, beets are grown as a cash

marketing quotas for domestic producing areas

crop in a diversified rotation system. Beets must

and import quotas for foreign countries.

be processed as soon as possible after harvesting

Under the provisions of the Act, the Secretary

because of their perishability. Farmers grow

of Agriculture determines how much sugar will

beets on contract for the processor, who extracts

be needed in the Continental United States each

the sugar and does the marketing.

calendar year. Thereupon domestic and specified

The entire crop of approximately 2^2 million

foreign-producing areas are assigned quotas.

tons is processed by about 60 regional sugar fac

Consumption for this year was originally esti

tories. At a factory, the beets are washed and

mated at 9,700,000 tons of which domestic areas

sliced into long strips resembling shoestring

were to supply 5,810,000 tons assigned as shown
in the table.

potatoes. The strips are immersed in large hotwater tanks, called diffusion batteries. There the
sugar juice escapes through the cell walls, which

BASIC QUOTA AT 9,700,000 TONS

somehow trap most of the impurities. The sub
sequent processing of the sugar juice is similar
to that of cane sugar refining.
Most of the domestic beet sugar is refined in
the Western irrigated portion of the Great Plains,
the inter-mountain and Pacific

Coast states.

Area

Tons

Domestic beet a r e a ..............................................
Mainland cane area (Louisiana and Florida)
Hawaii .....................................................................
Puerto R i c o .............................................................
Virgin Islands .......................................................

2,650,000
895,000
1,110,000
1,140,000
15,000

Total domestic ...................................................

5,810,000

business review

SUGAR BEETS (GROWN FOR SUGAR)
Value of Production 1961.

E S I OVER 20

I I10-20
I
I

I 5-10
11-5

Illinois, Iowa, Texas, and New Mexico less than y2 million dollars each
Source: United States Department of Agriculture.

The difference between the total estimated

to certain foreign countries. Another feature of

consumption and the domestic quota assignments

the Sugar Act was a device to fill the gap created

left 3,890,000 tons which was to be supplied by

by the suspension, since mid-1960, of imports

foreign countries. Among the foreign countries,

from Cuba. Until Cuba returns to the Free

the Republic of the Philippines has a priority

World, her quota to complete the United States

assignment of 1,050,000 tons, which left 2,-

sugar requirements is to be supplied by friendly

840,000 tons to be imported from about 25 other

foreign

foreign countries including practically all the

quota,” which means, in effect, on a “ first come,

countries

under

a so-called

“ global

Latin American countries and faraway countries

first served” basis. In other words, having for

such as India, South Africa, Australia, and the

the time being lost Cuba, we have lost a nice

Fiji Islands.

working arrangement for meeting our sugar im

Along with the quota system, the Sugar Act

port requirements and we are now thrust out

also provides for Government payments in cash

into the world market where we must compete

to growers, an excise tax on all sugar, and a

with other sugar-importing countries to buy our

tariff on sugar imports. In the 1962 amendments

own import requirements.

to the Act, the quota distribution formula was

Another significant feature of our sugar sys

revised to give domestic areas a larger share of

tem is the provision in the Act for the quota

the market and also to give larger specific quotas

premium recapture which was developed when

business review

world sugars were selling well below domestic

to the hazards of changes in inventory values

prices. The Act directs the Secretary of Agri

caused by fluctuating prices because of the nar

culture to levy an import fee on certain foreign

row margin on which they operate. Cost of raw

imports fixed at the difference between the world

material is about 80 per cent of the value of

price and the

product. Rising prices, to be sure, bring unex

(higher)

United States price

objective.

pected profits but they can be wiped out just as

The Sugar Act with its quota system and re

quickly by falling prices. Moreover, with Cuba

lated provisions was designed to support the

out of the picture the seaboard refineries have

American price above inordinately depressed
world prices by limiting the marketable supply

had to contend with the uncertainties and irreg
ularities of arrivals from distant sources during

in the United States. When, however, the world

chaotic market conditions.

sugar market tightened and rising world prices

Cane sugar marketing problems have multi

caught up with and surmounted our domestic

plied. Philadelphia and other seaboard refineries

prices, numerous adjustments had to be made.

from

Boston to

Baltimore have customarily

As early as August, 1962, restrictions on pro

served what the sugar industry calls the North

duction of the 1963 beet sugar crop were re

east— which embraces New England, the Mid

moved. Late in 1962 the import fee on global

dle Atlantic States, the Virginias, the Carolinas,

quota sugar was reduced, and in January of this

and the East-North Central states as far west as

year the import fee was eliminated. In March,

Chicago.

1963, acreage restrictions on domestic sugar cane

Chicago-West, extending to the Rockies, has cus

The

area known

the trade as

were relaxed and unrestricted production of

tomarily been served by the beet sugar indus

sugar beets was extended through 1964. In

try. Now, however, at higher price levels the

May unrestricted beet production was extended

beet sugar growers and processors can absorb

through 1965, and in the same month sugar

freight and compete

marketing quotas initially established at 9.8 mil

markets. Substantially increased amounts of beet

lion tons for 1963 were raised to 10.4 million

sugar are being marketed in the “ cane sugar

tons. These and other administrative actions

states” of the populous East; in fact, beet sugar

growing out of the Sugar Act were taken to cope

is being sold within the shadows of Philadelphia’s

with the rising price situation.

successfully

Eastern

cane refineries. Pennsylvania and Illinois are es
pecially attractive markets because of the im

C om petitive re a lig n m e n ts

portance of the confectionery industry in both

Subsequent to last spring’s spectacular gyrations

states.

in sugar prices the market has been feverish.

The beet sugar industry understandably is tak

Both domestic and world prices are still at ex

ing advantage of the prevailing situation by ex

alted levels in contrast with prices in former

panding its operations. Last year the industry

years of world sugar surpluses. The initial price

turned out a record crop of slightly in excess of

disturbances and the continuing high levels have

2.6 million tons raw value, and this year’s beet-

substantially altered competitive relationships in

sugar output promises to be slightly over 3 mil

the United States market.
Cane sugar refineries are especially susceptible

lion tons. As previously indicated, planting re
strictions are off and processing facilities are

business review

being enlarged to handle larger production.

caloric soft drinks, particularly on the part of

Moreover, in the maneuvering for larger quotas

women eager to maintain their streamlined fig

the beet sugar industry has the good fortune of

ures. That, of course, might be only a current fad

abundant Congressional representation.

destined to fizzle.

beet sugar ventures are being

American consumers long in the habit of pay

considered in other states such as Maine, New

ing higher than world prices for sugar by reason

York, and Delaware. It may be difficult, how

of the Government-sponsored price-propping are

ever, to raise beets in these areas because of

seldom heard to complain. One reason may be

climatic shortcomings. It may also be difficult to

that sugar, after all, is still relatively cheap and

raise the venture capital. A modern processing

sugar had a long history of price stability prior

plant costs about $20 million and stands idle

to the recent upsurge. Another reason may be

except for the few months during the beet harvest.

the fact that housewives no longer buy much

Continental cane sugar growing is also being

sugar for home baking, canning, and cooking.

expanded. Thus far the greatest expansion has

A generation ago about two-thirds of the sugar

taken place in Florida, where production has al

consumption was bought at retail for use in the

most tripled since our Cuban imports have been

home. Now about two-thirds of the sugar goes

cut off.

to the commercial bakers, confectioners, canners,

Brand-new,

The entire sugar industry, cane and beet, is

and manufacturers of soft drinks, ice cream, and

concerned about the growing competition of

other products, and only one-third is bought

competitive sweets. Higher sugar prices have

by housewives.
Although 1963 has been a most unusual sugar

opened wide the gates for dextrose and corn
sirup as well as synthetic sugar products. When

year, we make no predictions about next year.

sugar

competitive

One might reasonably expect high sugar prices

products captured a larger share of the sweet

to stimulate production and perhaps ultimately

ening market— some of which they may retain

restore the status quo. But sugar production

permanently even if sugar prices ultimately re

cannot be increased overnight. Moreover, sugar

turn to former levels.

is so worldwide and has so many ramifications—

prices

skyrocketed,

these

Another development of some concern to the
sugar industry is the growing popularity of non

botanic, climatic, geographic, and politic— that
we prefer to wait and see.

TH E $600 BILLION
QUESTION

G R O S S N A T IO N A L PRODUCT

(s. a.)
INDEX (trough = 100)

The present period of busi
ness expansion has reached
a ripe age. It is already
eight months older than the
shortest postwar expansion.
It only

has to

continue

through February of 1964
to become the longest (ex
cept for 1949-53 which was
influenced by the Korean
W a r). Can it keep going
all through 1964?

business review

DEMAND
PROFITS
(s. a.; a. r.)

BILLIONS OF DOLLARS

The picture looks good in the corporate sector—
Profits have increased throughout most of the
present recovery period to a new high,

(s. a.)

partly because producers have been using a
rising proportion of capacity,
PRODUCTIVITY
(s. a.)

INDEX (Feb. 1961 = 100)

because of increasing productivity,

LABOR COST
(s. a.)

INDEX (1957-59 = 100)

and declining labor costs.
F

1961

1962

1963

PRICES
(industrial)

INDEX ( 1 9 5 7 -5 9 = 100)

Lower labor costs have helped producers keep
prices down.

BILLIONS OF DOLLARS

INTERNAL FUNDS
(s. a.; a. r.)

At the same time, corporations have been
generating a large volume of internal funds,

BILLIONS OF DOLLARS

(s. a.; a. r.)

enabling them to expand capital outlays.

business review

The consumer sector has shown more vigor
recently—

RETAIL SALES
BILLIONS OF DOLLARS

Retail sales have been a strong spot.
1963

CO N SU M ER SENTIMENT
IN D EX (fall of 1 95 6 = 100)

Buyer confidence in the future has pick
ed up.

AUTOMOBILE SALES
(s. a .; a. r.)

The strongest point has been automobile
sales which will set a record this year
and are expected to stay high in 1964.

H O U SIN G STARTS
(private nonfarm, s. a .; a. r.)

Housing starts have been rising recently.
Most forecasts for 1964, however, indi
cate little or no change from 1963.
Less strength than in recent years can be
STATE A N D LOCAL EXPENDITURES
(s. a.)

BILLIONS OF DOLLARS

expected to come from the Government
sector—-

50
40

Large state and local outlays continue to

lend support to the economy.

1
1954

1956

1
1958

I9 6 0

1962

1
1
I9 6 3 e

FEDERAL BUDGET EXPENDITURES
BILLIONS OF DOLLARS

(fiscal years)

Budget estimates for fiscal ’64 appear
to indicate a high level of spending into
next year, but a big question is whether
spending will be held down if and when
taxes are cut.

business review

One reason some believe there will be no

INVENTORY-SALES RATIO

recession next year is that there have
been few excesses produced by this
expansion. This seems generally true,
but there are some spots to watch—
The inventory-sales ratio is now at
an extremely low level,
CORPORATE LIQUIDITY

but at the same time, corporate
liquidity has declined considerably.

AS PERCENT OF DISPOSABLE PERSONAL INCOME

Consumer credit repayments are now
consuming a higher percentage of
disposable income,

BILLIONS OF DOLLARS

yet compared with earlier periods
of recovery, consumer assets (most
of which are liquid) are up more
than debt in the latest expansion.

19 54IV -19 57 III

1958 111-1960 II

196111-1963 II

TH E "ANSW ER”
G R O S S N A T IO N A L PRODUCT
INDEX (trough = 100)

(s. a.)

140 -

135 -

130 -

Forecasts generally indicate
further steady gain in GNP

125 -

for 1964. Assuming a tax cut,
120

they call for an increase over

1963 of about 5 per cent.
115 -

110 105 -

100 Quarters from trough

UNEMPLOYM ENT RATE
PER CENT

(s. a.)

But the unemployment rate,
which

has

around

been

a high

hovering
point

for

some time, promises to re
main a problem in 1964.

1963

BALANCE O F PAYMENTS
BILLIONS OF DOLLARS

(s. a . ; a. r.)

And the deficit in our bal
ance of payments seems cer
tain to continue a difficult
problem.

2
3
1963

business review
F E D E R A L

R E S E R V E

B A N K

P H I L A D E L P H I A

TABLE O F C O N T E N T S - 1 9 6 3
JA N U A R Y
(Annual Report Issue)

Monetary Discipline: A Reappraisal
Competition in Banking: A New O ld Problem
1962: Accomodation in the Political Economy

FEBRUARY

Paleozoic Pains in Pennsylvania
How M any Years to M aturity?

MARCH

Common Markets and the Common G ood
The Quarter-Acre Living Room

APRIL

The Steel Saga
Cars and Consumers: A Stormy Romance

MAY

Struggle tor Savings
The Recession That Didn't Happen

JUNE

Leaning Against the W inds of Change
Pennsylvania's Economic Growth: Problems and
Recommendations
W hat's Happening to Labor C osts?

JULY

The Life and Times of a Refractory Brick
Today's Mild-Mannered Inventories
The Sun Shines Brighter in Vacationland

AU G U ST

The Quality of Credit— Is It Strained?
W h y Mrs. Smith Launders W hen Mrs. Singh Does Not

SEPTEMBER

The Broiler Imbroglio
The Search for W ork

O CTOBER

W h o Changed the Rules of the G am e ?
Another Problem Year for Farmers

NOVEMBER

Will Growth Stop the G old Drain?
Dowsing for the Investment Stream

DECEMBER

A Tempest in the Sugarbowl
The $600 Billion Question

FOR THE R EC O R D
BILLIONS $
INDEX

M EMBER B A N K S 3RD E.R.D.

_
A FA \ V i i
lV r y

B A N K IN G
13

CHECK
PAYMENTS

,
1

(20 CITIES)

f* \ f\ _____/

/ V\ i

____________

I f

\ !

d e p o s it s

■■
i

6
LOAhl l —

S^1

<f
4

YEAR
AGO

2 YEARS
AGO

Third Federal
Reserve District

United States

Per cent change

OCT.
1963

Department Storet

Factory*
Employ
ment

Payrolls

Sales

Stocks

Check
Payments

Per cent
change
Oct. 1963
from

mo.
ago

SUM M ARY
Oct. 1963
from
mo.
ago

year
ago

10
mos.
1963
year
ago

10
mos.
1963

Oct. 1963
from
mo.
ago

year
ago

LOCAL

year
ago
mo.
ago

MANUFACTURING
+
Electric power consumed....... + 2
Man-hours, total*................ - 1
0
Employment, total.................
Wage income*.................... - 1
CONSTRUCTION**................ - 9

+ 6
- 2
- 1
+ 1
-

+ 5
- 2
- 1
+ 1
- 6

+ 4

+ 21

+11

TRADE***
Department store sales............ - 1 3
Department store stocks.......... + 1

- 4
+ 2

COAL PRODUCTION..............

BANKING
(All member banks)
0
Deposits............................
0
loans................................
Investments......................... - 1
U.S. Govt, securities............. - 1
0
Other..............................
Check payments................... + 10+

+ 4
+ 7
+ 4
- 4
+22
+ 5t

+ 5
+ 8
+ 4
- 2
+20
+ 7+

+ 16

+26

+10

+ 2

+11

+ 8

+ 3

0
0
0
0
+ 9

+ 5
+n

+ 2
- 7
+22
+10

+ 7
+11
+ 4
- 4
+23
+ 10

PRICES
Consumer........................... +
•Production workers only.
••Value of contracts.
•••Adjusted for seasonal variation.

It + 2t + 2t

year
ago

mo.
ago

year
ago

0
0

0
+ 1

+20 Cities
^Philadelphia

0 -

— 2 + 2

0 - 4

Lancaster......... -

1 -

Philadelphia......

0 -

Reading........... +

Scranton.......... + 1
Trenton...........

+ 6 + 8

+ 14 + 2 0

0 -

2 -

1 +

1 -1 7

0 +

1 + 8 -

1 + 2 + 4 -

0 + 4 +
0 -

1 + 10

4 + 3 + 2
1

0 + 12 + 6

2 + ^ + 3

0 + 14 + 1 5

-1 0

+ 2

+ 2 -

Wilmington....... -

1 + 4 -

1 + 6 - 9 + 8 -

1 +13

York..............

0 -

0 +

0 -

1 -

+ 2

2 -

+ 6 -

2 + 13 + 2 3

Wilkes-Barre.. . . -

2 + 5 -

- 9 +

0 + 11 + 8

1 + 8 + 9 + 11
-

3 +

6 - 3

•Not restricted to corporate limits of cities but covers areas of one or more
counties.
fAdjusted for seasonal variation.

Full text of Business Review (Federal Reserve Bank of Philadelphia) : December 1963

FRASER