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/7h - ^TTA/ THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT FEBRUARY i, i93i By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent FEDERAL RESERVE BANK of PHILADELPHIA Business and Financial Conditions in the United States Industrial activity declined from November to December by slightly more than the usual seasonal amount, while the volume of factory employ ment showed about the usual decrease. Wholesale prices declined further. Production and employment. Volume of November to the middle of Decem ber. In the automobile and shoe in dustries there were large increases in employment, while in the clothing in dustries employment declined; in most lines, however, changes were of a sea sonal character. For the year 1931 as a whole the average volume of industrial produc tion was about 16 per cent smaller than in 1930, reflecting large de creases in output of steel, automobiles, and building materials, offset in part by slight increases in production of textiles and shoes. Value of building contracts awarded, as reported by the F. W. Dodge Cor poration, declined considerably more than is usual from the third to the fourth quarter, and for the year as a whole was 32 per cent smaller than in 1930, reflecting reduced physical volume of construction, as well as lower building costs. partment store sales increased by ap proximately the usual amount. Value of foreign trade continued at a low level in De cember, and for the year as a whole exports showed a decline of 37 per cent from 1930 and imports a decline of 32 per cent, reflecting in part the reduction in prices. Foreign trade. of industrial output decreased some what more than is usual in December and the Board’s seasonally adjusted in dex declined from 72 per cent of the 1923-1925 average in November to 71 per cent in December. Activity in the steel industry decreased from 30 to 24 per cent of capacity for the month, partly as a result of seasonal influ ences ; in the first three weeks of January it showed a seasonal increase. Automobile output increased consider ably in December from the extreme low level of the preceding month, and daily average output at shoe factories, which ordinarily declines at this sea son, showed little change. At textile mills production was curtailed by more than the usual seasonal amount. The number employed at factories decreased seasonally from the middle Distribution of com modities by rail declined by the usual seasonal amount in December, and de Federal Reserve Board's index of factory em ployment with adjustment for seasonal vari ation. (1923-1925 average = 100.) INDUSTRIAL PRODUCTION M0NEY RATES IN NEW YORK RESERVE BANK CREDIT Index number of industrial production, ad justed for seasonal variation. (1923—1925 aver age =100.) Wholesale prices. Wholesale prices of commodities declined from 68 per cent of the 1926 average in November to 66 per cent in December, according 120 100 80> 60 Distribution. Monthly rates in the open market in New York: commercial paper rate on 4 to 6 month paper. Acceptance rate on 90-day bankers' acceptances. Latest figures are averages of first 20 days in January. FACTORY EMPLOYMENT PERCENT 1927 1928 1929 1930 1931 1932 Monthly averages of daily figures 12 Federal reserve banks. Latest figures are averages of first 20 days in January. Page One to the Bureau of Labor Statistics, re flecting decreases in the prices of many domestic agricultural products, sugar, silk, iron and steel, and petroleum products. During the first half of January prices of hogs, lard and butter declined further, while prices of cot ton, silk, coffee, and copper increased. Bank credit. Reserve bank credit, which had declined from the middle of October to the middle of December and had increased in the latter part of the month, declined again in the first three weeks in January. The growth in the latter part of December reflected a somewhat more than seasonal increase in the demand for currency, partly offset by reduc tions in member bank reserve balances, and in deposits of foreign central banks. In January the return flow of currency was considerably smaller than in other recent years, while mem ber bank reserve balances continued to decline. Acceptance holdings of the reserve banks, which had reached a total of $780,000,000 in October, have declined through maturing of bills held almost uninterruptedly since that time, and on January 20 totaled $190,000,000. The banks’ portfolio of United States Government securities showed some increase over the level of the early part of December, and discounts for member banks increased substantially. Loans and investments of member banks in leading cities declined further during December and the first two weeks of January, reflecting reductions in loans on securities, as well as in other loans, and in investments. In the middle of January buying rates for bankers’ acceptances at the Federal reserve banks were reduced and open market rates on 90-day bills declined first from 3 to 2J4 per cent and later to 2J4 per cent. Yields of high grade bonds, after advancing for a period of about four months, de clined after the turn of the year, re flecting a rise in bond prices. Business and Financial Conditions in the Philadelphia Federal Reserve District Productive activity in industries slackened seasonally in December and in early January. As in other years, industrial employment also declined in December by about the customary per centage. Retail sales showed more than the usual December gain, but have continued below the level of other years. Wholesale trade has been com paratively quiet and prices show con tinued weakness. Borrowings from the reserve bank increased sharply in the week before Christmas, reflecting mainly the in fluence of Treasury operations; but with the return of currency thereafter, which substantially exceeded the outgo of money in the month prior to the holidays, borrowings were reduced. Manufacturing. Manufacturing ac tivity has slackened as it usually does at the turn of the year. Demand for finished products has declined fur ther, so that sales have been at the lowest level in several years. The volume of unfilled orders at the mid dle of January was materially smaller than a year before, although a num ber of reports show gains. Prices of commodities have continued almost uniformly downward; the largest de clines occurred in hides, textiles, house furnishings, and miscellaneous manu factures. Stocks of finished goods at report- Page Two ing plants show reductions compared with a year ago. This is also true of inventories of raw materials. In the United States as a whole, stocks of raw materials, however, are noticeably greater than in several years past, while those of finished products ap pear to be lower. Settlements of accounts in this district are not as satisfactory as during last year. Factory employment in this section declined about one per cent, while wage payments increased one per cent from November to December; in the United States factory employment and wage earnings registered decreases of less than one per cent. In compari son with December 1930, the employ ment index was 13 per cent and the payroll index 27 per cent lower; in the United States employment was 13 per cent and payrolls 24 per cent less than a year ago. The average weekly factory employment in 1931 was 17 per cent and the average wage pay ments 30 per cent less than in 1930 as against a decline of 15 per cent in factory employment and 25 per cent in wage payments for the country as a whole. Output of manufactures was greater than the usual seasonal decline in this district as in the country. Our index of productive activity in manufactur ing declined one per cent from Novem ber to December even after the al- Index adjusted for seasonal variation Manufacturing activity Philadelphia Federal Reserve District Index without sea sonal adjustment (1923-1925=100) Novem ber Total manufactures............................................... Textile products................................................. Transportation equipment............................. Tobacco and products..................................... Building materials.............................................. Allied chemical products................................. Leather and products....................................... Paper and printing............................................ Electric power...................................................... f Preliminary, .subject to revision. Per cent change from Novem ber 71.2 46.4 78.1 60.1 75.8 105.4 38.4 104.7 96.3 92.3 191.1 Decem ber Decem ber 67.5t 48.2 73.4f 64.0 74.5T 62.9 38.0' 104.L 82.992.3 195.9 69.7 46.2 75.5 62.9 76.2 89.1 38.7 104.2 100.7 91.5 183.8 68.9f 50.5 73.3f 64.3 76.6t 85.7 38.9t 105.7t 85.3t 91.4 183.1 Month ago Year ago - 1.1 + 9.3 - 2.9 + 2.2 + 0.5 - 3.8 + 0.5 + 1.4 —15.3 - 0.1 - 0.4 -15.9 -34.6 - 9.3 — 5.9 — 5.9 - 4.7 -17.2 - 0.6 -14.6 — 15.4 - 1.8 METAL PRODUCTS - PAYROLLS EXTILES------ PRODUCTIVE ACTIVITY ______ PHILADELPHIA FEDERAL RESERVE DISTRICT PENNSYLVANIA PERCENT 1923-25 AVG—100 1923-25 AVG.-I00 SILK •FOUNDRIES WOOL (MILL AND STEEL WORKS ' ROLLING MILLS TAILINGS) COTTON ADjqsTLl) .TQR SLASQMl,VARIATIONS 1928 1930 1929 Sources: Silk Association of America, Bureau of the Census lowance is made for the seasonal drop that usually occurs in this pe riod. The average monthly index for 1931 was 20 per cent lower than in 1930, indicating the extent to which the output of manufactures fell off during the year. Latest comparisons of activity in selected groups as well as in manufacturing are shown in the table on page 2. With the exception of the spring and, to a lesser extent, the fall season, the output of manufactures has shown a pronounced downward trend since the fall of 1929, and at the end of 1931 production reached the lowest level in the last nine years, a period for which reliable district figures are available. A most drastic decline in this period occurred in iron and steel and their products. Activity of plants making building materials also showed an ex ceedingly sharp recession which, un like that in other branches of manu facture, commenced in 1927 or nearly three-quarters of a year before the record peak was reached in building construction. Of the manufacturing industries that showed the greatest stability throughout the year, in spite of considerable irregularity, are those comprising textiles, food, leather, and such chemical products as paints and varnishes, explosives and petroleum products. Output and industrial consumption of electric power also showed a fairly even trend up to the last quarter of 1931, but since then have declined more than customary. Latest com parisons follow: December 1931 Percentage change from Business indicators Philadelphia Federal Reserve District Amount Nov., 1931 Retail trade*—estimated net sales (161) stores. Department (68)........................................................ Men’s apparel (24)................................................... Women's apparel (15)............................................. Shoe (36)....................................................................... Credit (18).................................................................... Wholesale trade*—net sales (100 firms). Boots and shoes (5)..................................... Drugs (10)...................................................... Dry goods (12)............................................ Electrical supplies (8)................................. Groceries (29)............................................... Hardware (20)............................................... Jewelry (9)..................................................... Paper (7)........................................................ Productive activity*— Employment—822 plants in Penna........................................ Wage payments (weekly average).......................................... Shoe production f—78 factories.........................................prs. Hosiery productionf—132 mills............................doz. prs. Underwear production!—53 mills........................doz. pcs. Wool consumption!—59 mills............................................lbs. Active cotton spindle hours........................................................ Pig iron production............................................................. tons. Iron casting production—30 foundries....................... tons. Steel casting production—9 foundries.........................tons. Anthracite................................................................................tons. Bituminous coal—Penna....................................................tons. Petroleum receipts at Port of Philadelphia...............bbls. Cement..................................................................................... bbls. Electric power output—10 systems...........................KWH. Financial and credit— Debits (check payments)*—17 cities..................................... Bankers’ acceptances outstanding—end of month. Commercial failures—number....................................... Commercial failures—liabilities.................................... ) Building and real estate— Building permits*—17 cities.. . Building contracts awarded*.. . Number of real estate deeds recorded* (Philadelphia county). Value of mortgages recorded* (Philadelphia county). Sheriff sales writs issued—(Philadelphia county) . . . . Miscellaneous*— Freight car loadings (Allegheny district)......................... Sales of life insurance (Penna., N. J., and Del.)............ Automobile sales registrations of new passenger cars. * Daily average of monthly figures. Dec., 1930 Per cent change 1931 from 1930 $1,208,600 $1,061,200 $36,300 $77,500 $11,100 $22,500 + + + + + + 45.3 46.7 72.0 24.0 27.6 38.9 - 15.1 15.0 17.1 15.6 19.8 12.1 -12.6 -12.5 -16.0 -11.0 -19.9 -10.1 $236,692 $2,825 $50,958 $10,828 $12,852 $86,752 $44,896 $16,495 $11,086 + + - 4.2 22.7 6.1 12.2 25.9 7.0 11.7 62.8 11.9 - 16.2 11.6 7.2 9.6 38.9 9.0 18.5 26.4 16.3 -14.9 -20.0 - 5.2 -17.4 -22.5 -13.4 -19.1 -35.2 -18.5 247,702 $4,761,254 34,411 54,009 10,874 146,106 460,334 2,120 80 61 179,700 275,200 40,500 46,258 18,078,000 + + - 0.4 2.2 20.2 12.6 20.7 24.8 10.5 17.4 10.1 25.9 0.2 9.3 0.7 32.2 2.5 + + - 13.0 26.9 2.4 9.7 14.3 8.3 20.8 45.3 38.2 52.2 22.8 26.7 4.7 26.0 1.8 -16.9 -30.7 + 2.4 - 9.1 +27.6 + 2.9 - 4.2 -52.0 -42.0 -49.2 -14.2 -21 .3 -28.9 -19.3 - 1.6 -18.8 *78,282,800 *1,221,000,000 *117,500,000 $16,943,000 123 $3,147,937 + 2.7 1.7 + 8.5 - 2.0 - 5.4 - 39.5 - 27.4 - 6.6 + 327.3 -31.1 - 4.7 - 30.8 — — +12.6 +40.5 *62,034 $322,175 - 45.3 - 2.7 - 31.5 - 59.3 -42.2 -42.7 168 $636,580 1,381 - 7.7 +105.7 - 24.6 - 2.3 - 23.4 - 12.8 - 4.5 -29.6 +17.0 19,234 *4,505,000 314 - 11.6 + 0.4 + 7.5 - 18.7 + 7.1 + 16.7 -21.0 -11.3 -19.0 ! Bureau of the Census preliminary figures. Page Three BUILDING MATERIALS PRODUCTIVE HOSIERY ACTIVITY PHILADELPHIA PERCENT SEASONALLY ADJUSTED PRODUCTION FEDERAL RESERVE DISTRICT CEMENT 175 FULL FASHIONED 150 BRICK 1 25 fV A :yy\ r v \h A, / N*\ \ //Wr 1 00 // V \ 75 LUMBER & PLANIN6 MILLS^> SEAM .ESS 50 V\ '-V 1 A, K Ar V S\ 25 J82a-2?frv<?--|oo 1928 1929 1930 1927 Sources: Department of Commerce, Fairchild’s Publications, Dun’s Review Electric power Philadelphia Federal Reserve District 11 systems Dec., 1931, per cent change from Dec.. 1930 Rated generator capacity........... + 1.9 Nov., 1931 - 0.1 Generated output.......................... Hydro-electric............................ Steam............................................. Purchased..................................... - 1.8 +219.3 - 20.8 + 10.9 + 2.5 +310.2 - 14.4 - 2.8 Sales of electricity.......................... Lighting........................................ Municipal................................ Residential and commerical Power............................................. Municipal................................ Street cars and railroads . . Industries*.............................. All other sales............................. - 3.4 - 0.8 + 0.6 - 1 .0 - 8.0 + 17.8 - 13.2 - 7.3 + 28.5 - 6.3 + 1.2 + 2.2 + 1.0 - 8.9 - 6.4 + n.i - 12.5 - 5.4 * Working days average—other items are com puted on calendar days. Employ ment in building construction in Pennsylvania was 11 per cent smaller and wage payments were 16 per cent less in December than November. Decreases in employee hours worked amounted to 16 per cent in Philadel phia and Scranton and 23 per cent in Reading, as compared with 14 per cent for Pennsjdvania. Awards of building contracts de creased in December and were the smallest of any December in recent years. Last year’s dollar volume of contract awards was nearly 43 per cent less than in 1930 and was below that of any year since 1921; this de cline was due partly to lower con struction costs and partly to unfavor able conditions within the building industry. The proposed expenditure under permits issued in 17 cities of this dis Building and real estate. pose Four Coal. Demand for anthracite has been relatively quiet since the middle 1931 (000’s omitted) Per cent change from 1930 1926-29 average $ 54,921 3,170 1,237 2,209 3,817 3,913 119,347 -57.9 + 8.7 -67.0 -49.0 + 5.5 -46.2 -32.5 -71.7 -52.0 -73.3 -77.7 -56.0 -45.7 -46.2 Total: Phila. F. R. District including all cities................... $188,614 -42.7 -58.3 Reading....................... Scranton...................... Camden....................... Trenton....................... Wilmington................ “All other”................ 1929 VI. .19 27—100 1930 1931 Source: Bureau of the Census trict declined in December and was substantially smaller than in the same month of 1930; for the year as a whole, the value of building permits issued was materially smaller than in recent years. The local real estate situation re mains quiet; renting demand for houses and apartments has been con fined chiefly to dwellings of the less expensive type, let at from $25 to $40 a month. Mortgage money generally remains scarce and prospective buyers are said to find difficulty in financing their purchases. The number of deeds recorded in Philadelphia county de clined in December, while the value of recorded mortgages increased sharply; in comparison with the same month of 1930, however, both were smaller. Foreclosures in Philadelphia declined in January contrary to the trend in the past four years. In 1931 sheriff’s sales reached the largest volume in the past thirteen years, the yearly increase being rather sharp since 1923. Contracts awarded in selected cities and district 1928 .................... ^.Al of last month. Output of collieries, which amounted to about 180,000 tons daily, showed less than the usual de cline between November and Decem ber, but was substantially smaller than in the corresponding period of 1930; in early January production showed a further slight decline. For the year as a whole, output averaged about 196,000 tons daily, which was the smallest reported for any like period since 1925, when labor disturbances interfered with production. Ship ments declined in December and were about 21 per cent less than those of a year ago. Average prices of anthra cite in the country increased last month and were nearly 6 per cent higher than in December 1930. Production of Pennsylvania bitumi nous coal declined in December and in the first fortnight of January. Chiefly because of unsatisfactory in dustrial conditions, production of bituminous coal was 21 per cent smaller in 1931 than in 1930. Ship ments were noticeably curtailed last month and were the smallest since July; compared with December 1930, they showed a decline of 23 per cent. Wholesale prices increased fraction ally but were materially lower than those of a year ago. Distribution. Business at wholesale declined seasonally in December and in the early part of January. In com parison with a year ago, dollar sales were 16 per cent smaller, and for the year as a whole, sales were 15 per cent less than in 1930. Smaller dollar sales reflect partly the influence of lower prices; for example, the average CONTRACTS AWARDED-CUMULATIVE ___ PHILA. FED. OUTPUT OF COAL RES. DIST. IN PENNSYLVANIA 1923-25 AVG—100 residentiAlI total ANTHRACITi: 1930 JFMAMJJASOND BITUMINOUS J FMAMJ JASOND 1928 Source: F. W. Dodge Corporation decline in the national indexes of wholesale prices from a year ago was 9 per cent in shoes, 8 per cent in drugs, 17 per cent in groceries, and 5 per cent in paper. Inventories at wholesale houses at the end of the year were smaller than a month before. Settlements of ac counts during December were not quite as favorable as a year earlier, as indicated by the ratios of collec tions during December to outstanding accounts at the beginning of that month. Retail sales in December showed more than the usual seasonal gain over November which was an exceptionally poor month. The largest percentage increases occurred in the sales of de partment, men’s apparel, and credit stores. Among the city trading areas, the most pronounced seasonal gains were recorded in Trenton, Lancaster, Johnstown, Altoona, Wilmington, Harrisburg, and Allentown-Bethlehem and Easton. Compared with a year ago, dollar sales were IS per cent smaller, and for the entire year they were 13 per cent less than in 1930. Industrial condi tions, lower prices, and unfavorable weather, particularly in the latter part of the year, were among the adverse factors in retail trade. Retail stocks of merchandise de clined sharply from November to December and were 15 per cent smaller than at the end of December 1930, all lines showing considerable reductions. The rate of turnover was a trifle higher than in the previous year. Pay ments on accounts were about at the same rate as a year earlier. 1930 Source: Bureau of Mines Percentage change Retail trade Philadelphia Federal Reserve District December 1931 Net sales: 1931, compared with 1930 Rate of turnover twelve months Stocks: Dec. 31, 1931, compared with Ratios of collections to receivables, December Dec. Twelve months Dec. 31, 1930 Nov. 30, 1931 1930 1931 1930 1931 All reporting stores___ -15.1 -12.6 -15.3 -20.7 4.00 4.06 29.0 29.2 Department..................... in Philadelphia.......... outside Philadelphia. Men’s apparel................ in Philadelphia.......... outside Philadelphia Women’s apparel.......... in Philadelphia.......... outside Philadelphia. Shoe.................................... Credit................................ -15.0 -16.1 -12.2 -17.1 -18.3 -16.1 -15.6 -17.0 - 5.6 -19.8 -12.1 -12.5 -13.8 - 9.1 -16.0 -19.9 -12.6 -11.0 -11.4 - 7.4 -19.9 -10.1 -15.0 -14.9 -15.0 -13.3 -15.8 -11.2 -16.5 -18.1 - 8.0 -21.4 -22.5 -20.8 -20.7 -20.9 -15.3 -12.8 -17.2 -25.7 -26.6 -20.9 -12.4 -22.0 4.03 4.41 3.23 2.32 2.50 2.18 6.37 6.72 4.21 2.69 2.58 4.07 4.34 3.50 2.30 2.45 2.19 6.77 7.25 4.19 2.59 2.85 32.6 31.4 35.4 29.7 32.2 23.2 11.2 29.5 29.4 11.1 Wholesale trade Philadelphia Federal Reserve District December 1931 (Percentage change is indicated by + and — signs) Net sales— Twelve months, 1931, com pared with twelve months, 1930..................... Dec., 1931, compared with: November, 1931............... December, 1930............... Actual index:* December, 1931................ November, 1931............... December, 1930............... Seasonally adjusted index: * December, 1931................ November, 1931.............. December, 1930............... Stocks—Dec. 31, 1931 Change from: November 30,1931......... December 31, 1930......... Ratios of collections to re ceivables : November 30, 1930........... Boots and shoes Drugs Dry goods -20.0 -5.2 -22.7 -11.6 -6.1 -7.2 48.1 62.2 54.4 50.6 58.7 57.3 32.0 35.5 Elec trical supplies Grocer ies Hard ware -17.4 -22.5 -13.4 -19.1 -35.2 -18.5 -12.2 - 9.6 +25.9 -38.9 - 7.0 - 9.0 -11.7 -18.5 +62.8 -26.4 -11.9 -16.3 95.3 101.5 102.7 49.0 55.8 54.2 69.5 55.2 113.7 86.6 93.lt 95.2 64.2 72.7t 78.8 107.3 65.9 145.8 57.6 65.4 68.8 93.4 98.5 100.7 47.1 43.3 52.1 41.9 42.5 68.5 85.7 85.4f 94.3 58.9 65.5t 72.3 52.3 46.1 71.1 60.6 62.3 72.4 -3.4 -7.6 -16.1 -19.8 - 4.8 -17.5 - 2.4 - 1.4 -10.9 -20.6 - 6.3 -18.3 80.5 80.7 46.9 49.1 95.0 97.7 37 9 37.2 31.0 21.3 52.0 61.3 Jewelry Paper * These indexes are percentages of the 1923-25 average taken as 100. t Revised. Page Five COST OF LIVING PERCENT PHILADELPHIA UNITED STATES DEC. 1914 — 100 Source: United States Bureau of Labor Statistics Retail prices of merchandise gener ally handled by department and spe cialty stores decreased in the month and were 17 per cent lower than a year ago, according to the Fairchild index. Retail food prices in Philadelphia and Scranton declined 2 and 3 per cent respectively from November to Decem ber; compared with a year ago, the drop amounted to 16 per cent in Scranton and 13 per cent in Philadel phia as compared with a decrease of 17 per cent in the United States. The cost of living in December, as com puted from the family budget require ments of industrial workers, in Phila delphia and Scranton as well as in the country was 9 per cent lower than in December 1930, as shown by the ac companying table. Sales of new passenger automobiles in December, as shown by registra tions, increased 8 per cent instead of Items included in the cost of living index December 1931, compared with December 1930, per cent change United States Phila delphia Scranton Food................................ Clothing........................ Housing......................... Fuel and light............. House furnishings.... Miscellaneous.............. -16.7 -11 .4 - 7.0 - 4.0 -11.3 - 1.3 -12.9 -13.9 - 7.2 - 2.1 -12.1 - 1.4 -16.0 -16.1 - 4.6 + 2.0 -12.7 - 1.0 Total...................... - 9.3 - 8.5 - 9.3 Source: Bureau of Labor Statistics. declining as is usual. Sales were also considerably larger than in December 1930, although the aggregate for the year registered a decline of 19 per Page Six cent from 1930. Shipments o f commodities b y railroad freight showed about the usual seasonal reduction from November to De cember ; the de cline in total ship ments in 1931 as compared with the previous year amounted to 21 per cent. In early January this year, the usual small upturn was noted. Financial conditions■ Banks in Phila lions in the reserve deposits of mem ber banks. The high point of currency demand was reached on December 23. In the four weeks following, money received from the banks exceeded payments to them by 28 millions, materially ex ceeding the outflow in the month pre ceding Christmas, and the district also benefitted by a favorable balance in the interdistrict settlements. Treas ury operations absorbed only a small part of these funds, so that the banks reduced their borrowings from this bank by 23 millions. Member banks in four of the largest cities of the district report a decline in deposits of 51 millions from De cember 16 to January 20; time funds changed little in amount, but govern ment deposits decreased 22 millions and net demand deposits, 29 millions. There was a decline in loans to cus tomers, but the outstanding change in loans and investments was a falling off of 52 millions in investments and open market loans, which was due principally to a drop of 36 millions in holdings of United States securities. Ordinarily such substantial sales of securities, doubtless made in large measure outside of the district, might have been expected to result in a large favorable balance in the interdistrict settlements of commercial and finan cial transactions. These settlements include transactions of the whole dis trict as well as those which take place through the reporting banks, but the fact that this favorable balance was only 5 or 6 millions in the five weeks suggests that some of the decline in delphia reduced their borrowings from the Federal Reserve Bank by 11 millions during the five weeks ended January 20; this was partly balanced by an increase in accommodation ex tended to banks in other parts of the district, so that the decrease in bills discounted of this bank was only 3 millions. The reserve ratio, owing chiefly to transfers made for the Treasury, declined from 64 to 61.6 per cent. The five-week period may be di vided into two parts. The first, cov ering the week of December 23, was dominated by Treasury operations; in this district 24 millions, derived mainly from income tax collections and drafts upon deposits set up in payment for new issues of govern ment securities, was with drawn from the market LOANS - INVESTMENTS - DEPOSITS and largely transferred to REPORTING MEMBER BANKS -PHILA. DISTRICT New York to meet pay MILLIONS ments there. The banks also called for an addi TOTAL DEPOSITS tional 7 millions of cur rency, which appears to have been the only sub stantial indication of the usual holiday demand for TOTAL LOANS currency. In past years as much as from 30 to 40 millions of currency has been called for in the five weeks preceding Christ INVESTMENTS mas. The result of these operations was a rise of 20 millions in borrowings from this bank and a de 1929 1930 1932 ♦ Average of first Ihree Wednesdays cline of more than 6 mil Dec. 31, 1930 All member banks (000,000’s omitted) Sept. 29, 1931 Loans to banks..................... $ 56 $ 47 1,536 Loans to other customers. 1,655 Loans to the open market 56 36 United States securities... 366 219 755 Other securities.................... 747 Total loans and investments............................... $2,733 $2,740 Dec. 31, 1931* $ 53 1,449 18 337 699 $2,556 * Preliminary. net demand deposits noted above was due to payments made to other dis tricts by the banks’ depositors; the decline in deposits probably also re flected income tax payments early in the period. During the fourth quarter of 1931 the loans and investments of all member banks in the Philadelphia Federal Reserve District declined Changes in— Federal Reserve Philadelphia (Dollar figures in millions) Jan. 20, 1932 Bills discounted for banks in-— Philadelphia. . . $53.1 Other communi ties ................... 61.2 Five weeks One year -*11.4 +$ 47.0 + + Total bills dis counted .......... $114.3 Bills bought........... 6.9 United States se 58.9 curities ........... Other securities .. 3.2 Total bills and securities.... $183.3 Member banks’ re serve deposits 122.8 Foreign bank de 6.8 posits .............. Cash reserves.... 242.5 61.6% Reserve ratio......... 8.1 41.5 -$ 3.3 + 2.5 +* 88.£ + 3.4 + - + + 4.8 2.6 8.3 3.2 +S 1.4 +$103.4 - - 4.9 + - 4.1 + - 21.6 - 2.4% - 19.7 6.3 4.5 21.8% 184 millions. De creases in assets due to bank sus pensions during this interval were offset by assets brought into the system as a result of bank consoli dations. The de cline in member bank credit re flected principally decreases in loans to customers, par ticularly in loans secured by stocks and bonds, and in investments. Reports from commercial paper dealers indicate a further decline in sales during December. Mem ber banks in this district on De cember 31 held only 12 millions of this paper; a like amount was held two years earlier, but on September 24, 1930 the holding amounted to 63 millions. Percentage change-—Dec., 1931, from Dec., 1930 City areas * Allentown.............. Altoona................... Harrisburg............ Johnstown............. Lancaster............... Philadelphia.......... Reading.................. Scranton................. Trenton.................. Wilkes-Barre......... Wilmington........... York Employ ment Wage payments Building permits (value) Debits -23.1 -10.3 -23.1 -37.9 + 1.6 - 7.1 - 6.2 -24.0 - 8.9 - 8.9 — 2 0 -11.0 — 16 0 -37.8 -31.5 -33.7 -39.8 -16.6 -14.7 -19.4 -28.9 -28.6 -25.8 — 5 3 -21.4 -29.1 - 73.5 - 35.6 - 93.3 - 12.5 - 12.4 + 11.4 + 8.6 +105.0 - 22.6 - 88.1 + 43.0 - 45.1 - 64.3 -21.1 -18.9 -21.5 -23.5 -23.6 -31.0 -18.0 - 7.8 - 1.2 - 8.5 -21.0 -19.1 -19.6 Retail trade sales -16.7 -26.4 -10.6 -18.9 - 9.2 -16.3 - 7.8 - 9.9 -10.9 - 7.6 -12.6 December 1931, from November 1931 Allentown.............. Altoona................... Harrisburg............. Johnstown............. Lancaster............... Philadelphia......... Reading.................. Scranton................ Trenton.................. Wilkes-Barre......... Wilmington........... + + + + + - 0.0 4.3 1.6 1.8 5.1 0.8 2.6 0.7 0.8 3.5 30 2.4 4.9 + 0.2 - 7.8 + 7.3 - 1.0 - 3.0 + 2.7 + 4.8 - 1.5 + 2.1 - 8.7 + 5.7 +11.9 + 1.5 + + - 28.3 13.1 90.2 43.8 52.3 6.9 51.3 23.5 68.4 1.3 68.5 79.0 45.3 +14.6 +16.4 +14.8 + 18.9 + 5.1 +22.8 + 15.2 + 9.7 +56.9 +17.0 + 14.3 +44.2 +29.2 * Area not restricted to the corporate limits of cities given here. +74.8 +77.6 +73.4 +77.3 +78.5 +53.6 +66.1 +45.8 +82.1 +56.4 Payrolls December 1931 Employment December 1931 Employment and wages in Pennsylvania Per cent change since Dec. ndex * Per cent change since ndex * Dec., 1930 Nov., 1931 Dec., 1930 Nov., 1931 All manufacturing industries (51).......................................... 71.1 -13.0 - 0.4 52.1 -26.9 + 2.2 Metal products............................ Blast furnaces.......................... Steel wks. and rolling mills . Iron and steel forgings......... Structural iron work.............. Steam & hot wtr. htg. app.. Stoves and furnaces............... Foundries................................... Machinery and parts............ Electrical apparatus.............. Engines and pumps............... Hardware and tools............... Brass and bronze products . 62.3 40.4 54.6 64.9 79.0 81.7 66.0 60.2 71.5 89.6 42.1 67.6 57.4 -20.8 -17.2 -23.7 -25.1 -17.7 -11.9 -10.7 -23.6 -18.8 -12.2 -38.8 -14.6 -22.3 + + + + 41.0 24.7 33.4 46.9 53.3 52.6 48.8 34.6 50.5 70.1 28.2 44.6 39.2 -36.6 -43.9 -41.9 -44.2 -29.8 -35.5 -11.1 -45.3 -31.8 -21.8 -51.3 -32.0 -41.4 + 5.7 + 6.9 + 7.6 + 8.4 - 1.7 - 6.2 - 8.6 + 10.9 + 5.4 + 4.2 + 6.4 - 1.8 - 7.5 Transportation equipment.... Automobiles.............................. Auto, bodies and parts......... Locomotives and cars........... Railroad repair shops............ Shipbuilding............................. 46.5t 47.2 76.7 19.1 66.0 46.9 -27.3 - 8.9 +43.4 -45.3 - 8.2 -40.4 + 8.9 +10.3 +23.7 - 1.0 - 0.6 +13.8 36.5t 22.4 81.9 14.1 45.7 56.4 -35.6 -15.8 +84.0 -49.5 -31.8 -53.2 + 6.1 +15.5 +12.8 + 3.7 - 6.0 + 0.2 - 1.5 + 6.8 +17.8 - 8.5 - 7.6 + 0.7 -18.5 + 8.8 - 5.6 - 2.7 -19.1 -15.6 0.0 + 1.5 + 0.5 + 1.5 + 1.7 - 9.1 - 5.1 + 2.9 -11.9 + 5.4 + 3.8 -15.8 74.7 55.1 45.3 88.4 69.4 41.4 46.5 107.3 51.9 47.4 85.6 93.1 -11.4 +13.4 - 3.2 -17.7 -16.4 - 6.8 -27.6 - 3.9 -22.0 -13.8 -31.4 -29.1 - 0.8 + 8.0 - 8.3 + 5.5 - 1.8 -19.6 - 2.3 + 1.3 -23.2 - 9.5 + 7.3 -20.1 Foods and tobacco..................... 99.9 Bread and bakery products 103.5 Confectionery.......................... 100.8 Ice cream................................... 83.8 Meat packing........................... 96.9 Cigars and tobacco................ 95.7 + - 4.8 6.3 0.4 7.1 0.3 6.8 + - 3.1 1.0 3.2 0.5 0.7 5.0 89.3 93.7 94.5 79.7 84.6 78.6 -12.0 -13.2 - 5.5 -11.3 -13.1 -14.6 - 1.2 - 1.4 +12.1 + 1.0 - 1.1 - 9.7 Stone, clay and glass products Brick, tile and pottery.......... Cement....................................... Glass............................................ 56.4 64.0 46.9 65.3 - 7.5 - 7.0 -14.7 + 5.3 + + + 1.3 3.9 0.9 9.6 33.7 32.5 28.7 51.1 -31.4 -34.6 -36.8 -10.0 + Lumber products........................ Lumber and planing mills. . Furniture................................... Wooden boxes.......................... 51.5 29.3 58.5 59.3 -14.5 -30.1 -10.3 -10.7 - 6.5 -20.2 - 4.3 - 1.3 41.3 24.7 47.2 45.1 -19.5 -30.4 -17.0 -17.4 - 6.1 -19.0 - 6.5 + 8.9 Chemical products..................... 83.8 Chemicals and drugs............. 61.1 Coke............................................. 61.3 Explosives................................. 76.4 Paints and varnishes............. 91.5 Petroleum refining................. 123.3 - 5.4 -13.6 -18.4 - 0.9 + 5.3 + 1.7 + + - 1.3 3.6 0.7 1.3 3.9 1.0 75.4 54.4 29.6 77.3 80.4 123.7 -15.1 -22.4 -51.6 - 3.4 - 6.0 - 2.5 + 0.1 + 1.7 0.0 -13.9 + 3.1 + 0.2 Leather and rubber products . Leather tanning...................... Shoes............................................ Leather products, other.. . . Rubber tires and goods.... 87.6 88.7 93.0 70.7 90.6 - 3.7 -16.2 +18.3 - 9.9 +10.4 - 0.7 - 2.3 - 2.4 + 8.9 +10.6 69.8 70.3 66.4 73.2 82.5 -21.8 -30.0 - 4.7 -14.1 -10.1 - 0.4 - 8.5 - 1.5 +30.5 +42.2 Paper and printing..................... Paper and wood pulp............ Paper boxes and bags........... Printing and publishing. .. . 90.8 76.0 82.4 97.1 - - 1.5 2.7 7.3 1.0 84.8 58.0 84.6 94.4 -16.7 -26.5 -12.0 -13.9 0.0 - 7.6 - 1.5 + 1.0 Anthracite...................................... 77.7 -19.5 - 4.3 66.4 -21.9 + 6.6 Textile products.......................... Woolens and worsteds.......... Silk goods................................... Textile dyeing and finishing Carpets and rugs.................... Hats............................................. Hosiery....................................... Knit goods, other................... Men’s clothing......................... Women’s clothing................... Shirts and furnishings.......... 89.3 62.8 61.0 92.7 85.2 58.6 70.7 118.8 78.0 71.6 101.0 121.5 6.3 6.3 4.7 6.4 - 0.8 6.9 0.7 2.4 7.8 3.8 0.8 2.0 0.0 3.1 3.4 1.9 2.4 + 0.4 - 3.4 -15.7 Street railways............................ +73.8 * 1923-1925 average = 100. 74.7 - 5.3 - 1.5 84 0 -13 5 + 3.0 87.1 - 5 6 - 2.5 2.0 8.5 1.0 3.4 -16.9 74.7 - 9.7 - 1.1 t Preliminary. Page Seven Synopsis of Industrial and Trade Conditions in the Philadelphia Federal Reserve District Demand Operations Stocks Manufacturing Iron and steel Steel works Foundries and Quiet Output of pig iron declined but employment and payrolls in creased in December Quiet, some improvement increased rolling and machine Quiet, unfilled orders for iron and steel castings increased Declined Quiet Increased Transportation equipment Quiet Little change More active Little change Little change; prices lower Increased Textiles Some increase in broad silks Slow; prices lower Smaller Slow Declined Little change Slow, declined; prices lower Increased Declined, smaller than a year ago Quiet, declined; prices lower Declined less than usual Declined Slow, declined; smaller unfilled orders Declined sharply Slow, declined; prices lower Smaller than a year ago Declined Declined Leather products Slow, prices lower Declined more than usual Declined Quiet Slight decline Little change Fair, some gain Some gain Declined Building materials Brick ............................................. Slow, declined; smaller unfilled orders Declined Declined Slow, declined Declined Little change Slow Little change Smaller than a year ago Slow, little change; prices lower Increased contrary to the usual Little change trend Slow, unfilled orders smaller Little change Smaller than a year ago Slow, declined Little change Little change Miscellaneous Quiet, little change Declined Little change Quiet, unfilled orders smaller Declined Declined Quiet, little change Declined Little change Slow, declined Little change Smaller than a year ago Contract awards declined in De Employment cember clined Building and payrolls de Coal mining Anthracite ..................................... Declined Declined less than usual Bituminous Quiet Declined in December ................................... Trade Retail ................................................ Wholesale and jobbing........... Page Eight Quiet, December sales increased more than usual Declined, smaller than a year ago Declined seasonally Declined
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