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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT FEBRUARY i, 1936 By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent FEDERAL RESERVE 3ANK of PHILADELPHIA Business and Banking Conditions in the United States Industrial production and employ ment showed a further increase in De cember, when allowance is made for the usual seasonal changes, and dis tribution of commodities to consumers was in increased volume. Production and employment. The Board’s seasonally adjusted index of industrial production, which takes ac count of the considerable decline that usually occurs in December, advanced from 98 per cent of the 1923-1925 average in November to 103 per cent in December, the highest level reached by this index since the spring of 1930. As in other months during the last half of 1935, the rise in the index was due in large part to increases in out put of durable manufactures, particu larly iron and steel, and automobiles. During the first half of January pro duction of steel and automobiles in creased somewhat, following declines in the holiday period. Output at mines was also larger in December than in November. Activity at cotton and silk textile mills declined less than is usual in December, while at woolen mills there was a more than seasonal de crease in operation. Output at shoe factories increased. Factory employment showed little INDUSTRIAL PRODUCTION change between the middle of Novem ber and the middle of December, when a slight decline is customary. The number employed continued to increase at steel mills, automobile factories, foundries and machine shops, and at railroad car building plants. There was also an increase in employment at shoe factories. Seasonal declines were reported by many other important in dustries. Factory payrolls were larger in the middle of December than a month earlier. The value of construction contracts awarded increased sharply in Decem ber, according to figures of the F. W. Dodge Corporation, although a decline is usual in that month. There was a further substantial growth in the vol ume of awards for publicly-financed projects and residential building also increased. Distribution. Sales at department stores and variety stores, as well as sales by chain stores and mail order houses serving rural areas, showed larger increases than are usual in De cember. Freight-car loadings de creased by less than the usual seasonal amount in December, and the Board’s adjusted index increased from 66 per cent of the 1923-1925 average in No vember to 71 per cent, continuing the advance begun last August. Commodity prices. The general level of wholesale prices showed little change during December. In the first three weeks of January there was some decline in the general index, reflecting in part lower prices for cotton gray goods, flour, pork, and silk. Prices of hogs, rubber, and petroleum increased. Bank credit. Excess reserves of member banks, which declined by $600,000,000 in the third week of De cember, increased by $320,000,000 dur ing the following five weeks, reflecting the usual seasonal return flow of cur rency from circulation, a decline in Treasury balances with the Federal reserve banks, and a small increase in FACTORY EMPLOYMENT RAILROAD FREIGHT CAR LOADINGS PER CENT prR CFNT 110 5 - too Indexes of value of sales. 100 70 70 50 50 1929 m Adjusted for seasons/ variation — Without seasonal adjustment 110 1923- Index of physical volume of production, ad justed for seasonal variation. DEPARTMENT STORE SALES 1930 1931 1932 1933 1934 1935 Index of number employed, adjusted for sea sonal variation. Indexes of number of cars loaded, adjusted for seasonal variation. Page One monetary gold stock. On January 22 excess reserves totaled $3,030,000,000, as compared with the peak of $3,300,000,000 on December 11, 1935. Changes in the condition of reporting member banks in leading cities between December 18 and January 15 reflected largely the influences of seasonal factors. Business and Banking Conditions in the Philadelphia Federal Reserve District Business conditions in the Philadel phia Federal Reserve District at the turn of the year generally reflected a higher rate of activity than for sev eral years past. Industrial production in December reached the highest level since early 1931, after allowance is made for the usual seasonal fluctua tion; the index of manufacturing and mining combined in December rose to 80 per cent of the 1923-25 average. For the year 1935 as a whole the average rate of production was 8 per cent higher than a year earlier, 14 per cent higher than two years ago and nearly 20 per cent above the low reached in 1932. The value of building contracts awarded during December increased substantially over November and was larger than a year ago. The largest relative increases in 1935 as compared with 1934 occurred in the case of con tracts let for residential construction and unclassified buildings. Contracts awarded for public works and utilities, on the other hand, declined during the year. The real estate market on the whole has shown further improvement since 1934, particularly with respect to renting demand, foreclosures and the availability of mortgage funds. Retail trade sales in December showed a considerable improvement over the usual seasonal change and as compared with the same month of recent years. This was also true of wholesale trade sales. Stocks of mer VALUE OF BUILDING CONTRACTS MANUFACTURING ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT ADJUST tO TOR SC ASOt AL VARIATION *» 192.J-25AVG-IOO PERCENT PERCENT 200 — i * j . PRODUCTION | (aDJ. FOR SCAS VAR.) Page Two maintained at about the usual seasonal levels for December and January. Sales of goods have fallen off some what since the middle of December, re flecting largely the customary seasonal slackening in demand and the year-end listing of inventories at both produc ing and distributing establishments. It appears that stocks of finished goods at manufacturing plants are moderate and only in a few instances seem to be larger than a year ago. The pur chase of raw materials has fallen off somewhat during the month and on the whole the volume at present does not seem to show much change from a year ago. Stocks of raw materials held at various sources in the country appear to have been considerably smaller toward the end of 1935 than at the same time for several years past. The volume of unfilled orders for goods manufactured here, while de clining seasonally during the month, continues larger than a year ago owing partly to increased commitments in the case of iron and steel products, wool manufactures, chemicals, lumber, and slate. Shipments of goods produced in this section have increased almost steadily since August last year reach ing early this year the largest volume since 1931 and the early part of 1932. Prices at factories generally have continued firm, although lately some recessions have occurred particularly in the case of certain textile products and processed food articles. The index chandise at retail and wholesale estab lishments at the end of the year were larger than a year before, reflecting in part higher prices. The rate of stock turnover indicates a more rapid movement of merchandise through these channels in 1935 than in 1934. Sales of new passenger automobiles increased by a much larger proportion than usual and exceeded greatly the number of units sold last year. Ship ments of commodities by rail and motor truck have been well sustained in recent months and the volume in 1935 was larger than in 1934. Industrial employment and payrolls, as reported by twelve branches of trade and industry in Pennsylvania, were well maintained throughout 1935, despite some irregular fluctuations. General employment and payrolls in creased further from the middle of November to the middle of December, owing largely to a higher rate of activ ity at mines and retail trade establish ments. Relative to the 1932 average, the December index of employment was 113 or about 3 per cent higher than a year ago; the payroll index was 138 or 14 per cent higher than in De cember 1934. Preliminary returns from manufacturing establishments in dicate that declines in employment and payrolls from December to January were in about the same proportion as is to be seasonally expected. ManufacturingManufacturing ac tivity in this district has been well EMPLOYMENT 150 v 1 \ PUBLIC W0 3KS / i\ ____ *_________ ; \ IOO PAYROLLS AND UTILETIES ty~ ■ 1 *\ V 50 RESIDENT •• r\______ / v-\.< » \ ■ \ \ •./ I • • INUWnLOlULIMI / j nL • •■ if • ffCOjc 1 AL^" 0 1933 1934 1935 1936 1931 1932 1933 1934 1935 1936 of the Bureau of Labor Statistics, Business Indicators which excludes farm products and foods but includes fuel and lighting Philadelphia Federal Reserve District materials, was 79.0 per cent of the 1926 average on January 25 as com Index numbers: percentages of the 1923-1925 average as 100 pared with 77.9 a year ago and 78.5 two years ago. Adjusted for seasonal variation Adjusted indexes allow for the usual Not adjusted seasonal change in activity. Factory employment and payrolls at hange the turn of the year were well sus Unadjusted indexes reflect merely which may or may Dec. Oct. Nov. Dec. Dec. 1935 1935 tained and were at the highest levels the actual change from from Dec Oct. Nov Dec. not be typical. 1934 1935 1935 1935 1934 1935 1935 1935 since early 1931. Changes between mos. the middle of November and Decem 1934 ago ber on the whole were more favorable Industrial production........... 74 77 77 80p 4 + 8 71 81 79 77p + Manufacturing—total............... 71 76 77p 76 2 + than is commonly to be expected. + 9 68 80 78 75p Durable goods....................... + : 49 62 62 61p 2 +12 Consumers’ goods.......... ...... The December index showing the 86 88 86 89 p 4 + + 9 Metal products...................... 56 68 70 69 4 + : +16 53 71 67 67 number of wage earners in Pennsyl Textile products.................... 82 90 85 89p 5 + +22 79 94 88 86p Transportation equipment. 51 58 62 0 + 21 62 + 5 vania factories was almost 79, relative 51 56 59 62 Food products........................ 79 67 72 70p 2 - 11 - 6 76 69 72 70p Tobacco and products......... 97 to the 1923-25 average, or about 6 per +13 92 86 97 + 0 70 113 103 70 Building materials................ 25 34 36 29 -18 — + 180 + 6 23 36 36 27 Chemicals and products___ cent higher than a year before. The 104 104 111 109p - 1 + 5 + 3 103 106 111 108p Leather and products.......... 111 118 125 132p + 6 + 19 + 6 105 125 119 125p payroll index was 68, or 17 per cent Paper and printing............... 78 82 81 + 3 + 6 83 + 3 79 83 82 84 Coal mining................................. 70 higher than in December 1934. Esti 49 49 70 +43 -10 70 62 52 69 Anthracite..............!!!!!!” 72 48 48 71 +48 -11 70 62 50 69 Bituminous............................. — 1 + 2 60 65 67 mates made from current indexes and 58 61 61 65 + 8 + 14 69 Crude oil............................. . 385 390 406 415 +10 362 390 394 + 2 the census data show that all Penn 390 Electric power + 8 Output..................................... 194 198 197 205 + 4 + 6 sylvania manufacturing industries + 2 207 204 205 219 Sales, total!..........................[ 191 192 194 202 + 4 + 6 + 2 197 192 200 208 Sales to industries t..................... 151 around the middle of December em Employment 144 145 158 + 9 + 5 + 7 144 140 148 150 and wages—Pa. ployed approximately 850,000 wage Factory—Wage earners............. — 0* + * + 4* 75 79 79 79 Payrolls...................................... earners and paid in wages nearly $17, + 12* 58 70 68 68 — 0* Man-hours (1927-28= 100).. 1* 554,000 a week. It appears from a General (1932 = 100) +n* 57 71 69 69 Employment............................. + 4* o* 110 112 109 113 like estimate that all these industries Payrolls...................................... + 5* + 7* 121 139 131 138 in the entire year 1935 paid out ap Building and real estate Contracts awardedt—total.. .. 39 +36 + 39 + 0 35 36 39 49 proximately $847,000,000 in wages as Residential!.............................. 21 +12 + 84 +45 12 21 22 23 Non-residentialf....................’ 26 compared with $756,300,000 in 1934, +97 + 66 + 17 28 33 28 47 Public works and utilities!. . 103 + 8 + 10 -30 119 86 115 131 Permits for building—17 cities___ an increase of about 12 per cent. 10 -25 + 26 +29 4 11 9 5 Mortgages recorded—Philadelphia. 10 +55 + 10 -19 16 5 10 17 Compared with the low point reached Real estate deeds—Philadelphia . . +16 — 3 44 + 2 51 54 47 50 Sheriff deeds (1930= 100).... -12* in 1932, employment at the end of 1935 — 6* 98 161 107 93 Other deeds (1930 = 100)........... +17* + 8* 88 68 74 86 Writs for Sheriff sales—Phila.. . . 795 1212 610 672 was 24 per cent larger and payrolls 67 Distribution +10 - 15 - 6 811 606 683 686 per cent greater. Retail trade —sales.................... 67 70 70 74p + 6 + 10 + 4 110 79 84 121p stocks................ Production of manufactures in De 62 65 65 65p + 0 + 5 59 72 75 62p Wholesale trade—sales................... 72 78 75 80p + 7 + 11 + 6 81 88 85 90p cember declined less than usual and the . . stocks................ 66 66 67 69p + 3 + 3 62 69 69 64p Life insurance sales......................... 115 106 105 101 - 3 - 12 level of factory operation continued + 0 121 97 111 106 New passenger auto, registrations 93 66 143 245 +71 +162 +36 50 54 100 132 Hotels—Occupancy (1934 = 100) the highest for that month since 1930. -11* + 231 + 6* 95 116 108r 96 Income, total (1934= 100) — 8* + 8* 108 119 119 + 2 s1 110 Freight car loadings—total............. This bank’s index of manufacturing + 7 + 15 + 3 52 65 62 59 Merchandise and miscellaneous. + 3 + 16 + 4 50 66 activity, which is adjusted for the usual 63 57 Coal............................................. +15 + 4 - 1 66 65 61 69 liquidations seasonal variation and for the number Business Number.......................................... +17* + 38* + 19* 54 74 of working days, was 77 per cent of 64 75 Amount of liabilities................... +24* + 18* - 35* 35 49 34 41 Payment of accounts the 1923-25 average as compared with Check payments. . . 75 77 81 82 79 87 89 76 in October and November; this + 2 + 10 +15 81 Rate of collections (actual) Retail trade.................... — 6 index was 71 a year ago, 64 two years 29 29 Wholesale trade............ + 1 - 4 - 3 72 ago and 54 three years ago. The aver Prices—United States Wholesale (1926 = 100). + 0* + 5* age rate of productive activity for 1935 80 81 81 Farm products................ + 7* 77 + 1* + 9* +20* 72 78 77 78 Foods................................. was 73 as compared with 67 for 1934, + 1* + 14* +19* 75 85 85 86 Other commodities......... — 0* + 1* - 1* 78 78 79 79 64 for 1933 and a low of 61 for 1932; Retail food (1913 = 100) + 2* + 11* Philadelphia..................... +n* 14 124 126 28 + 2* + 12* + 8* 18 128 131 33 the high of 111 was reached in 1929 Scranton............................ + 1* + 10* + 8* 17 126 127 29 and then continued to decline sharply % change from until the middle of 1932. Dec. (In millions of dollars) Nov. Dec. 1934 Industries comprising consumers’ 1935 1935 1935 1935 Month Year ago ago goods during December showed a gain and credit of 4 per cent over the usual seasonal Banking Federal Reserve Bank Bills discounted............................ change, reflecting mainly increases in $ 1 $ 1 $ (a) 8 (a) Other bills and securities........... 170 181 184 185 184 — 1 + 8 silk and wool manufactures, carpets Member bank reserves............... 204 242 262 269 266 — 1 +30 Reserve ratio (per cent).......... ’ 67.2 69.9 72.1 70.1 and rugs, shoes, canning and preserv 70.5 +1 + 5 Reporting member banks Loans to customers..................... ing, and cigars. The seasonally ad $ 432 t 408 $ 403 $ 402 $ 402 0 — 7 Other loans and investments. . . 618 681 694 698 706 + 1 +14 justed index showing the output of Total (gross) deposits................. 1.190 1,283 1,319 1,306 1,319 + 1 +11 Bankers’ acceptances outstanding 12.3 13.4 14.1 13.7 12.3 consumers’ goods in December was 89 -10 0 as compared with 86 a year ago, 78 * Computed from data unadjusted for seasonal variation (a) Less than $500,000. T 3-month moving daily average centered at 3rd month. two years ago and 76 three years ago. p—Preliminary, 4 Not included in production index. r—Revised. Page Three INDUSTRIAL FUEL AND POWER OUTPUT OF MANUFACTURES BY CLASSES PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT ELECTRIC POWER — USEO BV INDUSTRIES CONSUMERS’ GOODS FUEL OIL OUTPUT DURABLE GOODS BITUMINOUS COAL “ OUTPUT ADJUSTED TOR SEASONAL VARIATION ADJUSTED FOR SEASONAL VARIATION 1930 193 1 1932 1933 1932 1933 1935 1934 anthracite fuel at mines, retail yards, Building and real estate. The value electric power plants and on Lake of all contract awards in this district docks appeared to be smaller but in amounted to $17,772,000 in December, the hands of the principal railroads a gain of 82 per cent from the month considerably larger at the end of 1935 before and the largest monthly total recorded since October 1931. This un than a year before. Production of bituminous coal in usually sharp rise reflected largely sub creased for three consecutive months stantial increases in the dollar volume of contracts let for apartments and and in December was 8 per cent above the usual seasonal change from No hotels, such non-residential structures vember. The seasonally adjusted as factory and educational buildings, index in December was 65 per cent and public works and utilities. of the 1923-25 average as compared Awards for one and two-family dwell with 61 in October and November and ings and commercial buildings declined 58 in December 1934. The total vol in December but continued materially ume mined in 1935 was about 2 per larger than a year ago. cent larger than in 1934 and con Per cent siderably larger than in 1932 or 1933. change (Output and shipment figures are daily averages) Per cent change from Month Year ago ago 3 2 0 3 +14 + 7 + 2 — 3 + 5 + 1 +39 + 5 97.9* - 2 64.4t +1 — 7 +14 327,040 26,216 98.7 128,068 100.4 89.6 + + + + Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. t November. Production of by-product coke in creased further in December. Output in 1935 as compared with 1934 showed an increase of 11 per cent. The trend of output since the low point in 1932 has been sharply upward, though the fluctuations have been marked and erratic during this period. Output of gas and fuel oils decreased somewhat in December, after a noticeable rise in the previous month. + 22 +319 - 31 +191 - 11 +210 +730 + 35 Total buildings .... . 10,433 Public works and utilities 7,339 +116 + 48 +27 -30 17,772 + 82 + 0 o — 1 — 4 — 12 +1 — 6 2,624 1,352 1,272 7,809 672 1,299 4,541 1,297 , +40 184,800 +34 178,941 2,244t + o - 0 82.9 +23 98,615 Dec. 1935 1935 (000’s from from omitted) month 12 mos. ago 1934 C O< N•— 1 Anthracite Production............. tons Shipments...............tons Stocks............1000 tons Prices........ (1926= 100) Employment...........No. Bituminous Production............. tons Shipments... .No. cars Prices........ (1626 = 100) Employment........... No. Coke Prod.. .(1923-25=100) Prices........ (1926 = 100) Gas and fuel oil Prod.. .(1923-26 = 100) Prices........ (1926=100) Dec. 1935 Building contracts Philadelphia Federal Reserve District + + + + + + + +*9 Page Four 1931 1930 1935 in 05 t- In the case of durable goods, in creases in primary and secondary steel products as well as in certain lines of transportation equipment were more than offset by decreases in the output of other products, particularly such building materials as cement, brick, and lumber and its products. The index measuring productive activity in the durable goods industries in Decem ber was 61, relative to the 1923-25 average in contrast with 49 a year before, 44 two years ago and a low of 33 in December 1932. Activity of electric power stations has continued to expand since 1932 despite some irregular fluctuations. There was a further increase in output and sales during December as com pared with the previous month and a year before. Reports from ten sys tems, whose sales of electricity ap proximate 95 per cent of the total electrical energy consumed in this dis trict, show that in 1935 the volume of electricity sold for all purposes was 2 per cent larger than in 1934. Indus trial consumption of electrical energy in the same period was 7 per cent greater. Our latest index of power sales to industry reached the highest level in the past thirteen years. Coal and other fuels. Production of anthracite has increased sharply after declining in November, reflecting a more active demand largely as a result of cold weather. The Decem ber index of output, which is adjusted for seasonal change and for the num ber of working days, rose to 71, rela tive to the 1923-25 average, as com pared with 48 in the previous two months; a year ago this index was 72. Total production in 1935 as a whole, however, was 11 per cent smaller than in 1934. Supplies of 1934 Source: F. W. Dodge Corporation. Total awards of building contracts in 1935 showed virtually no change from the year before. Contracts awarded for residential buildings con stituted nearly 28 per cent of the year’s total and those for non-resi dential structures about 39 per cent, the remaining 33 per cent being for public works and utilities. These per centages, when compared with those for earlier years, indicate that the rela tive importance of residential construc tion increased appreciably in 1935, after continuing greatly diminished since 1929. Although the value of last MERCANTILE TRADE WHOLESALE GROCERY SALES AND PRICES PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT 1926 AVG.= 100 RETAIL DOLLAR SALES SAL ES <Vi RHILA. RCSCRV E DISTRICT (adj TOR 51 AS. VAR.) WHOLESALE --------[DOLLAR SALES V "o .. ■ O 193 I year’s contracts — $94,259,000 — was nearly 40 per cent above the low of $67,789,000 in 1933, it was still small when compared with the three-year average, 1923-25, of $305,501,000 and the record high of $503,543,000 reached in 1928. The real estate situation last year showed some improvement over 1934 but continued to reflect quiet in com parison with more normal years before the depression. Renting demand for small houses and apartments was more active than for several years past and rents have shown an upward tendency since 1933. Sales of the less expensive types of dwellings have increased somewhat. Ordinary conveyances in most of the larger city areas including Philadelphia registered fairly large gains over 1934 and in the WilkesBarre, Lancaster, York and Harris burg sections they were the largest in several years. Funds for mortgage purposes generally have been plentiful and the trend of interest rates has been downward when compared with earlier years. Foreclosures decreased further. Distribution, trade and service. Retail trade sales by department, apparel, shoe and credit stores showed an in crease of 44 per cent from November to December; this was a larger gain than is usual for this period, indicat ing an improvement of about 6 per cent in the value of December trade. In comparison with a year ago sales were 10 per cent greater, all lines ex cept shoes reporting an increased dol lar volume of business this year. For the year as a whole sales were 4 per cent larger than in 1934. Business in January slackened seasonally but com pared with a year ago the dollar vol ume of clearance sales seemed larger by a fair margin. 1931 1934 1932 Inventories held by retail stores in this district at the end of the year de clined by about the usual percentage but were 5 per cent larger than at the close of 1934, owing in some measure to higher prices for certain classes of merchandise. The rate at which stocks of merchandise moved during 1935 was about 6 per cent more rapid than in the preceding year. Business at wholesale, as measured by the dollar sales of eight important lines combined, increased 7 per cent from November to December, after allowance is made for the usual seasonal change. Early reports for January indicate that wholesale busi ness was well sustained. Dollar sales by wholesale establish ments in 1935 were 6 per cent larger than in 1934, the most pronounced in creases occurring in the sale of jew elry, hardware and paper. This gain in total sales reflected partly the in fluence of higher prices, particularly in the case of groceries. The trend of grocery sales and prices for common articles handled by wholesale establishments including co operatives in this district has been al most steadily upward since the low levels reached in 1932 and 1933, as shown by the accompanying chart. Changes in sales and prices follow: Wholesale grocery sales and prices (Indexes 1926=100) Per cent change from 1935 (aver Year Two Three age) years years ago ago ago Grocery sales (value) 115.0 + 6 +27 +41 Prices, all foods........ Cereals.................... Fruits and vege tables .................. Milk, butter and cheese................. Meats...................... Other foods........... 83.7 94.1 + 19 + 6 +38 +25 +37 +42 63.6 - 6 + 3 +10 79.8 94.5 77.7 +10 +50 +17 +31 +89 +27 +30 +62 +28 Sources: Bureau of Labor Statistics and Federal Reserve Bank of Philadelphia. 1933 1934 PRICES (o. 5.) 1935 1936 Sales of new passenger automobiles, as measured by registrations in this district, increased sharply in Decem ber and, with the exception of last April, were the largest of any month in the past five years. This gain re flects in part the introduction of new models at an earlier date than was the case in other years. The number of new units sold last year totaled nearly 159,000, an increase of 36 per cent over 1934 and was the greatest since 1929, when the all-time record of 210,000 cars was established. Factory sales of passenger cars and trucks in the country have risen sharply in the past three years, the most pro nounced increase occurring during 1935, when nearly 1,108,000 more units were sold than in the preceding year. Retail financing of new passenger auto mobiles has followed the upward trend of production since 1932. According to figures compiled by the Bureau of Foreign and Domestic Commerce, the dollar volume of new cars financed at retail in 1935 was about 26 per cent greater than the year before, 87 per cent larger than in 1933 and 146 per cent above the low level of 1932. Total freight car loadings in this section, which have been maintained at higher than seasonal levels for sev eral consecutive months, were about 7 per cent larger than usual in De cember and exceeded those of a year ago by 15 per cent. For the entire year 1935 shipments of all commodi ties by rail were 3 per cent greater than the year before and showed an increase of about 13 per cent as compared with 1932, when they were the smallest since 1923. The volume of rail freight con sisting largely of manufactures orig inating in the Philadelphia industrial area showed virtually no change from Page Five November to December but continued at higher levels than in recent years. Business at commercial hotels, ex cluding resort hotels, slackened at the end of the year, as shown by room oc cupancy and receipts from all sources. For the year 1935, room occupancy was 6 per cent larger than in 1934 and the total revenue was 8 per cent greater. Barring seasonal fluctuations, the rate of activity has been steadily upward in the past three years. Hotel business Philadelphia Federal Reserve District Room occupancy.................... Per cent of capacity used: Dec. 1935................... 44.4 Nov. 1935................... 44.9 Dec. 1934................... 44.8 Income from: Guest rooms........................ Food....................................... Other sources...................... Dec., per cent 1935 change from from 12 Month Year mos. 1934 ago ago — 0 -a —0 +2 + 6 -17 — 3 + 2 +0 +3 +4 + 5 + 8 +n - 8 +2 + 8 Total revenue.................. Banking conditions. Deposits showed a strong tendency upward at the re porting member banks in December and the first three weeks of January. The increase of 48 millions in the five weeks ending January 22 was due prin cipally to a rise of 37 millions in de mand deposits, adjusted for cash items in process of collection, and an expan sion of 13 millions in interbank bal ances. The total of the various classes on January 22 was 1,380 millions, a new high for the past year. Although holdings of United States Government Reporting member banks (000,000's omitted) Assets Loans to brokers and dealors: In New York City............. $ Outside New York City. . Loans on securities to others (except banks).................... Acceptances and commerLoans on real estate.............. Other loans............................... Total loans........................... $ U. S. Government securities. Obligations fully guaranteed by U. S. Government.... Other securities....................... Jan. 22, 1936 9 14 Changes in Five One weeks year 0 — $13 -* i - 3 145 - 3 - 20 21 67 — 3 171 + 1 - 4 2 - 1 430 -8 3 — $41 295 - 5 + 5 109 292 + 14 + 4 + 59 + 28 Total loans and investments................................. $1,126 +$10 +$51 Reserve with Federal Reserve Bank........................... 222 + 29 + 75 Cash in vault........................... 14 - 3 + 1 Balances with other banks*. 172* + 16 + 1 Other assets—net................... 86 - 9 — 1 Liabilities Demand deposits—adjusted. Time deposits.......................... U. S. Government deposits.. Interbank deposits................. Other liabilities....................... Capital account...................... 780 + 37 +177 257 + 6 — 45 38 — 8 - 36 305 + 13 + 39 0 17 — 4 — 11 223 - 1 + 3 * Figures reported prior to January 8 excluded a certain amount of time balances and balances with private banks; amount excluded December 31 approximated 10 millions. Page Six securities declined 5 millions, the banks added 14 millions to their holdings of obligations fully guaranteed by the Federal Government and acquired 4 millions of other securities. They also increased somewhat their balances with correspondents, but the greater part of the funds made available to them through expansion in deposits and some repayment of loans was reflected in an increase of 29 millions in reserve balances at the Federal Reserve Bank. There were declines of 4 millions in loans on securities and one million in those made on real estate. Other loans to customers, generally regarded as most typical of credit extended to commerce and industry, increased two millions in the five-week period and now are only slightly smaller than a year ago. If allowance is made for amounts charged off during the year, it is quite likely that such loans would be at a somewhat higher level than in mid-January of 1935. Reserve deposits of all member banks increased 32j4 millions in the five weeks ending January 22, to a record high. The factors bearing upon local reserve balances were somewhat obscured by the payment of over 31 millions to the Reconstruction Finance Corporation for securities sold by it; this payment, received from another district, greatly enlarged the favorable balance in the interdistrict settlements and correspondingly increased Treas ury receipts. If this transaction be eliminated from the figures, in view of the fact that it did not directly affect reserve deposits here, it would be shown that the district had a small gain in the settlements, despite security purchases by the banks, and that Treasury disbursements exceeded re ceipts from local sources although the latter were augmented by the with drawal of 11J4 millions from deposi tary banks. In addition to these fac tors, which tended to increase reserves, over 20 millions of currency and coin was returned by the banks, reflecting the passing of the holiday season. Outstanding credit of this bank con tinued to show small changes apart from variations in reserve bank float incident to the effect of holidays and transportation delays upon the time needed to collect checks. The reserve ratio of the bank rose from 71.2 to 73.3 per cent in the five weeks, reflect ing an increase of 40 millions in total cash reserves and a somewhat smaller rise in the combined federal reserve note and deposit liabilities. In December reserve balances of member banks in this district averaged 266 millions; as legal requirements ag gregated only 142 millions, an excess of 124 millions or 87 per cent was indi cated. This excess was several mil lions below the November figure, but compared favorably with 80 millions a year ago. As reserve balances aver aged 293 millions in the first 22 days of January, it is clear that the excess then was even greater than in Decem ber or November, despite a probable increase in requirements. Although outstanding acceptances of banks in this district decreased from $13,700,000 to $12,300,000 during De cember, the latter figure still was a trifle higher than at the end of 1934. The national total decreased from 543 to 397 millions during 1935, owing to declines in bills covering exports and domestic warehouse credits and in those based on goods stored in or shipped between foreign countries. Federal Reserve Bank of Philadelphia Jan. 22, (Dollar figures in 1936 millions) Bills discounted.... Bills bought.............. Industrial advances. United States se curities ............... Changes in Five weeks One year $0.4 0.5 6.7 —$0.1 + 0.0 — 0.2 - $0.6 - 0.1 + 3.1 177.1 0 + 10.0 Total bills and securities............... $184.7 Fed. Res. note circulation............. 262.5 Member bank reserve deposits. . 302.1 U. S. Treasurer— general account. 31.4 Foreign bank deposits.................. 4.7 Other deposits........... 10.2 Total reserves........... 447.7 73.3% Reserve ratio............ — $0.3 +*12.4 -11.2 + 35.0 +32.5 + 84.0 +15.9 + 29.2 - 2.8 + 1.5 - 5.8 — 0.0 +40.2 -143.5 + 2.1% h 6.3% MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending—• Dec. 25 Jan. 1 Jan. 8 Jan. 15 Jan. 22 Changes in five weeks Sources of funds: Reserve bank credit extended in district.... Commercial transfers (chiefly interdistrict). . Treasury operations.............................................. +3.8 -0.1 -0.2 - 4.8 - 5.1 + 5.7 - 0.4 +11.8 + 3.3 + 2.1 +18.8 -25.1 -0.1 +8.0 -3.6 + 0.6 +33.4 -19.9 Philadelphia Federal Reserve District (In millions of dollars) Total..................................................................... +3.5 - 4.2 +14.7 - 4.2 +4.3 +14.1 Uses of funds: Currency demand.................................................. Member bank reserve deposits......................... “Other deposits” at reserve bank.................... Unexpended capital funds of reserve bank... +6.2 -2.7 -0.1 +0.1 — 11.5 + 7.4 — 0.0 — 0.1 -10.0 +22.3 + 0.4 + 2.0 + — 2.9 1.3 0.1 0.1 -2.2 +6.8 -0.4 +0.1 —20.4 +32.5 — 0.0 + 2.0 Total..................................................................... +3.5 - 4.2 +14.7 — 4.2 +4.3 +14.1 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVE DEPOSITS FEDERAL RESERVE BANK OF PHILADELPHIA MILLIONS $ I 300 (All figures are rounded from original data) f— Manufacturing Employment* N I 1/ 200 (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weight ed proportionately.) An/ VVt T Per cent Per cent Dec. change from Dec. change from 1935 1935 index Dec. Nov. index Dec. Nov. 1934 1935 1934 1935 All manufacturing...... Iron, steel and products . Non-ferrous metal prods. Transportation equip___ Textiles and clothing___ Textiles........................... Clothing.......................... Food products................... Stone, clay and glass... . Lumber products............. Chemicals and products. Leather and products. . . Paper and printing.......... Printing........................ Others: Cigars and tobacco__ Rubber tires, goods. . . Musical instruments. . 0 1934 1935 1936 CURRENCY DEMAND PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS $ Employehoursf Payrolls* 79 + 6 66 +10 106 +17 56 + 3 101 + 4 99 + 3 112 +30 104 — 4 76 +n 60 +18 85 - 5 97 + 7 92 + 3 88 + 5 69 74 56 + 2 + 2 +13 * Figures from 2238 plants. -0 -0 +0 +2 -0 +0 —1 -2 —4 -0 —2 +2 -0 + 1 68 62 102 46 88 88 88 92 62 45 74 86 87 86 +17 +34 +26 +16 + 6 + 4 +15 + 1 +29 +27 + 3 + 9 + 9 +10 -1 -1 —2 59 63 53 + 2 - 0 + 0 — 1 + 4 - 1 — 1 — 2 + o — 7 - 4 - 1 +10 + 2 + 4 Dec. 1935— per cent change from Dec. Nov. 1934 1935 +21 +33 +37 +10 +12 +10 +22 + 0 +23 +31 +12 + 9 + 6 + 5 — 1 — 1 + 1 + 3 + 0 + o + o — 2 — 10 — 6 — 2 + 9 + 2 + 4 + 3 — 2 + 6 +14 +10 -14 +14 + 4 + 7 -15 f Figures from 2023 plants. + 40 + 20 General Index Numbers ____________ A 0 Covering twelve branches of trade and industry -20 ___________ J y -40 (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) V -60 General index -00 JAN. 1,1932 = 0 1934 1935 1936 Percentage change—December 1935 from December 1934 City areas* Manufacturing Employ ment Wage payments Building permits (value) Debits Allentown............. Altoona................. Harrisburg........... Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. . . Williamsport........ Wilmington.......... Y ork....................... + 5 + 6 + 9 + 8 +14 + 5 + 7 — 4 + 3 + 7 + 9 4- 8 + 12 +17 +19 +25 +45 +26 + 7 +12 — 6 +20 + 13 + 13 +19 + 14 +365 +365 — 0 - 31 +973 - 3 +180 - 48 — 76 + 2 +224 +104 - 65 + 7 +14 +14 +30 +17 +12 + 3 +16 + 6 + 8 +17 +34 +ii Allentown............. Altoona................. Harrisburg........... Johnstown............ Lancaster............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... 3 2 0 1 2 0 0 0 1 1 0 2 4 (weighted)___ Manufacturing............................. Anthracite mining...................... Bituminous coal mining............ Building and construction........ Quarrying and non-met. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels............................................. Laundries....................................... Dyeing and cleaning.............. Employment Dec. 1935 index 113 124 93 121 56 93 195 89 134 108 103 95 89 Per cent change from Dec. 1934 Nov. 1935 + 3 + 6 — 6 — 3 — 8 + 6 +19 + 0 + 5 + 3 - 3 +1 - 0 + 4 - 0 +23 + 3 - 7 - 5 — 2 — 1 +18 - 0 0 + 0 - 5 Payrolls Dec. 1935 index 138 167 104 190 57 128 179 92 128 104 105 96 89 Per cent change from Dec. 1934 Nov. 1935 +14 +17 + 6 +21 + 3 +37 +22 + 2 + 5 + 7 + 0 + 5 — 1 + 5 - 0 +95 +15 - 7 — 5 — 0 — 1 +14 + 3 - 0 + 0 — 8 Retail trade sales + 0 + 14 + 14 + 7 + 8 + 0 + 2 + 2 — l INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 13 MANUFACTURING AND NON-MANUFACTURING INDUSTRIES PERCENT PAYROLLS + 6 December 1935 from November 1935 — + + — — + — + — + — + _ 3 + 4 + 1 — 1 — 1 + 1 — 0 — 7 + 3 + 1 0 + 5 + 1 + 66 9 — 41 + 56 + 51 63 — 30 58 — — 82 + 2 30 +214 88 +14 +16 +19 + 8 + 8 +13 + 2 +20 +41 + 9 + 4 +50 +13 * Area not restricted to the corporate limits of cities given here. +61 +60 +52 +64 +54 +49 +46 EMPLOYMENT +40 +78 1933 1934 1935 Page Seven OUTPUT OF MANUFACTURES Index numbers of individual lines of trade and manufacture Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Not adjusted Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Per cent change Unadjusted indexes reflect merely the actual change which may or may not Dec. Dct. NTov Dec. 1934 935 935 935 be typical. Dec. 1935 from Month Year ago ago 1935 from 12 mos. 1934 Oct. ‘‘Jov Dec. 935 L935 1935 Dec. 1934 Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ Stocks of goods Total of all stores........................... Department............................... Men’s apparel............................ Women’s apparel....................... Shoe............................................. Credit.......................................... 67 65 58 90 68 61 70 65 66 93 74 70 70 66 64 88 72 70 62 52 57 65 55 66 65 54 67 53 77 57 80 74p + 6 + 10 + 4 110 116 70p + 5 + 6 + 3 63 — 1 + 8 + 6 98 .02 +16 + 14 + 5 134 8 + 1 89 63 -13 77p +10 + 25 + 11 95 59 49 58 83 52 71 65p + 0 + 5 52p - 3 — 0 65 — 4 + 13 + 6 + 7 95 56 r 56 +1 + 7 79 82p + 4 + 7 Rate of stock turnover 12 months (actual, not indexes) 79 84 1 74 80 69 72 105 107 74 76 85 90 + 6* L21p I23p 106 154 82 * 119p 72 75 62p 62 63 49p 70 77 66 109 111 88 61 60 r 56 85 89 76p 4.29 4.04 Wholesale trade Total of all lines........................... Boots and shoes........................ Drugs.......................................... Dry goods........ ......................... Electrical supplies................... Groceries.................................... Hardware................................... Jewelry....................................... Paper...................................... * • Stocks of goods Total of all lines........................... Boots and shoes........................ Drugs.......................................... Dry goods........ .......................... Electrical supplies................... Groceries.................................... Hardware................................... Jewelry....................................... Paper.......................................... 72 78 75 80p 31 48 45 35 93 87 87 98 37 41 37 41p 51 64 67 62p 111 112 106 119p 48 54 54 r 56 42 53 52 47 63 73 73 72 66 22 66 28 46 83 74 59 61 55 41 89 69 69 62 58 67 28 116 41 92 68 68 69 59 69p 42 + 7 + 11 -23 + 11 +12 + 6 + 13 + 13 - 7 22 +13 + 8 + 5 + L7 - 9 + 11 - 2 + 14 + 3 +50 Pig iron................................................ Steel..................................................... Iron castings...................................... Steel castings............... ...................... Electrical apparatus........................ Motor vehicles................... ............... Automobile parts and bodies........ Locomotives and cars...................... Shipbuilding................... .-................ 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.................... Explosives........................................ Paints and varnishes........ ............. Petroleum products....................... Coke, by-product........................... 45p + 9 _ 3 91p - 2 + 9 6 68 — 0 67 - 0 + 15 74 + 7 + 22 60 + 1 + 9 + 14 48 48 43 80 13 79 18 118 94 56 38 66 125 121 33 27 18 37 35 34 64 65 67 50 56 62 55 46 63 86 80 r 83 18 17 14 68 80 81 24 26 24 156 153 153 103 92 94 79 75 71 45 48 48 102 87 105 118 116 115 129 135 133 38 44 29 46 43 39 26 27 24 . 94 70 182 55 . 51 41 . 97 92 . 57 62 . 83 86 . 134 119 117 . 69 77 . 66 71 . 147 137 93 85 85 65 26 48 50j 85 96 61 60 85 88 123 158 126 10SI 82 74 73 75 147 145j 100 10^ — 4 + 2 +12 +39 + 4 + 6 +1 - 5 + 0 + 2 +11 + 0 +20 - 0 - 1 -35 -10 -10 + 0 s* + o -60 + 6 +13 — 2 + 3 +28 -14 -10 + 3 - 1 + 4 * Computed from data unadjusted for seasonal variation. Page Eight 62 18 111 40 74 72 56 49 53 + 3 + 89 Rate of stock turnover 12 months (actual, not indexes) Output of manufactures 81 30 94 38 84 112 + 12 53 + 17 86 + 10 60 + 6 + 6 + 2 + 4 + 6 +150 + 39 + 30 + 48 + 4 + 42 + 3 + 33 + 30 + 0 + 41 + 25 + 60 7 + 10 _ 13 + 44 + 31 + i" 9 — 86 — 2 — 0 + 6 + 6 + 17 + 21 + 7 + 13 1 + 39 88 85 90p 59 48 33 85 90 100 55 47 43p 82 87 103p 122 115 120p 62 60 r 61 70 74 96 78 77 68 69 69 1 27 26 1116 117 43 40 100 100 74 74 65 63 65 70 59 59 13 45 45 41 77 10 77 18 124 95 52 41 63 121 119 27 26 18 89 101 118 52 70 57 84 114 97 68 64 147 72 p—Preliminary. 39p 81p 70 64 60 57 5.71 3* 5.57 + 8 + 16 + 10 - 0 + 20 + 10 + 2 - 1 + 7 + 4 + 76 + 14 +104 + 13 + 19 — 5 + 17 + 9 — 0s1 - 20 - 26 — 5 + 0 + 6 + 3 + 6 + 6 - 3 + 5 + 2 + 11 64p 33 37 64 53 52 94 13 23 150 106 83 47 117 130 141 42 46 27 88 74 47 53 113 63 87 129 122 78 76 138 91 35 63 57 43 85r 15 74 24 153 93 77 50 99 132 136 43 43 27 89 93 42 52 102 61 86 116 122 82 75 147 96 33 63 58 61 81 14 80 24 161 96 73 51 99 112 132 24 38 23 89 91 17 52p 69 61 89 134 118p 73 73 144p 100 r—Revised. PAPER AND WOOD PULP
@FedFRASER