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THE BUSINESS REVIEW
THIRD FEDERAL
PHILADELPHIA
RESERVE DISTRICT
FEBRUARY i, 1939
^ /,
0</
FEDERAL RESERVE BANK OF PHILADELPHIA
Business and Banking Conditions in the United States
Volume of industrial production de
clined seasonally in December and
showed little change in the first three
weeks of January, when an increase
is usual. Wholesale commodity prices
were steady. Employment and pay
rolls increased further in December,
and retail sales showed more than the
usual seasonal rise.
Production. In December volume of
industrial production declined by about
the usual seasonal amount and the
Board’s adjusted index was at 104 per
cent of the 1923-1925 average, about
the level reached in November follow
ing an exceptionally rapid advance
after the middle of the year. Changes
in output in most lines in December
were largely seasonal. In the steel in
dustry, however, production showed
a greater than seasonal decline, and
averaged 54 per cent of capacity in
December as compared with 61 per
cent in November. Lumber produc
tion showed little change from No
vember to December, although usually
there is a decline, and at textile mills
and shoe factories activity declined
less than seasonally. At meat packing
establishments there was a reduction
in output.
Automobile production increased
somewhat further in December. In
the fourth quarter of 1938 production
and sales of the new model cars were
in about the same volume as in 1937;
dealers’ stocks of new cars increased
seasonally in this period but at the
year end were much below the high
level of a year earlier.
Value of construction contract
awards increased considerably from
November to December, according to
F. W. Dodge Corporation figures for
37 Eastern States. The increase re
flected principally a further rise in
contracts awarded for Public Works
Administration projects, which ac
counted for most of the sharp increase
in awards that occurred in the last
half of 1938. Contracts for private
residential building decreased less than
seasonally in December, while other
private construction showed little
change and remained at a low level.
Employment. Employment and pay
rolls rose further between the middle
of November and the middle of De
INDUSTRIAL PRODUCTION
FACTORY EMPLOYMENT
cember. In most manufacturing lines
the number employed continued to in
crease, when allowance is made for
the usual seasonal changes, and in
the automobile and machinery indus
tries the rise was considerable. Em
ployment and payrolls in trade in
creased more than is usual in the holi
day season and in the construction
industry employment showed much less
than the usual seasonal decline.
Distribution. Distribution of com
modities increased more than season
ally in December. Sales at department
EXCESS RESERVES OF MEMBER BANKS
PI *
' «
Wednesday figures of estimated excess re
serves for all member banks and for selected
New York City banks, January 3, 1934, to
January 18, 1939.
WHOLESALE PRICES
PERCENT
110
100
90
nn
50
50
1934
Index of physical volume of production, ad
justed for seasonal variation. By months, Jan
uary 1934 to December 1938.
Index of number employed, adjusted for sea
sonal variation. By months, January 1934 to
December 1938.
1935
1936
1937
1938
1939.
Index compiled by the United States Bureau
of Labor Statistics. By weeks, 1934 to week
ending January 14, 1939.
Page One
stores showed the usual sharp expan
sion prior to Christmas and sales at
variety stores and mail order sales
showed a more than seasonal rise.
Freight-car loadings declined season
ally from November to December, re
flecting largely the customary decrease
at this time of year in shipments of
miscellaneous freight.
Bank credit.
As the result of the
post-holiday return of money from
circulation, together with Treasury
disbursements from its balances with
the reserve banks, and gold imports,
excess reserves of member banks in
creased nearly $600,000,000 in the
four weeks ending January 18 to a new
high level of $3,560,000,000. A large
part of the increase occurred at New
York City banks.
Total loans and investments of re
porting member banks in 101 leading
cities, which increased substantially in
the first three weeks of December, de
clined in the following four weeks.
There was some decline in loans and
a reduction in holdings of United
States Government obligations, reflect
ing in part distribution to the public
of new securities purchased by banks
in December. Deposits declined some
what in the latter part of December
but increased in January.
Money rates and bond yields. Average
yields on United States Government se
curities declined slightly in December
and the first three w'eeks of January.
For three consecutive weeks the entire
new issue of 91-day Treasury bills
sold on or slightly above a no-yield
basis. Commercial paper rates de
clined slightly in January while other
open market money rates continued
unchanged.
Business and Banking Conditions in the
Philadelphia Federal Reserve District
Industrial activity in the Philadel
phia Federal Reserve District ex
panded in December for the fifth
consecutive month, carrying the season
ally adjusted index of production to
78 per cent of the 1923-25 average
which compared with 74 in November
and 68 at the year’s low in April. The
level of activity in the latest month
represented an improvement over the
year before for the first time since
September 1937. The sharp expansion
in industrial output in the latter half
of 1938 was in decided contrast to
the almost steady decline which per
sisted throughout the greater part of
1937.
Improvement in December was
shown in the output of factory prod
ucts, anthracite, crude oil, and electric
power, but the production of bitumi
nous coal declined. The gain in manu
facturing was shared almost equally
by durable and consumers’ goods; the
year’s output of durable goods, how
ever, showed much the sharper decline
from 1937.
Employment and payrolls in twelve
branches of trade and industry in
creased 5 and 4 per cent respectively
from November to December. In re
tail lines the increases amounted to
approximately one-fourth, as dis
tributors hired additional help to
handle the Christmas trade. Wage pay
ments to anthracite miners also in
creased sharply, while employment re
mained near the level of the preceding
month. In the manufacturing indus
try, additional gains were recorded in
both employment and payrolls, al
though some recession is usual in De
cember. Preliminary tabulations for
January show' declines of about sea
sonal proportions.
Contracts awarded for construction
have increased further, exceeding sub-
For the year as a whole total contracts
awarded were still somewhat smaller
than in 1937, the only gain being in
public works and utilities.
Retail trade sales increased more
than seasonally during December, sur
passing the dollar volume in the pre
vious December. For the entire year
1938, distribution at retail was 10 per
cent smaller than in 1937. Inven
tories at reporting establishments con
tinued below those at the end of 1937.
Business at wholesale was practically
unchanged in the month but smaller
than a year ago. Inventories were
down sharply from the preceding
month and continued nearly one-fifth
below those on hand at the end of
1937.
Commodity prices showed little
change in December, although some
slight weakness appeared toward the
end of the month, particularly in foods.
The prices of industrial staple com-
WORKING HOURS AND HOURLY EARNINGS
PRODUCTION AND PRICES
P E NN SYLVAN IA FACTORIES
CENTS
HOURS
PERCENT
INDUSTRIAL PRODUCTION
! (pHILA. TED. RES. DIST.) I
EARNWGS PER HOUR (avo)
COMMODITY PRICES-U.S.
(other THAN FARM PRODUCTS
AND FOODS)
JHOURS WORKED'
PRICES OF RAW MATERIALS
1932
1933
Page Two
1934
1935
1936
1937
1938
1932
1933
1934
1935
1936
1938
modities declined somewhat from the
year’s high point reached in Novem
ber and quotations on agricultural sta
ples remained near the low level which
has prevailed since the middle of Au
gust. The same general tendencies
continued into January and the index
of all commodity prices prepared by
the Bureau of Labor Statistics in the
third week of this year was 76.6 per
cent of the 1926 average, unchanged
from a month earlier, as against 80.8
in the corresponding week of 1938.
Manufacturing.
Demand for fac
tory products in this district over the
year-end contracted somewhat, re
flecting the customary lull in business
activity at this time. The reduction in
sales was particularly apparent in the
textile industry but the volume was
still substantially above that of a year
ago. Producers of iron and steel re
ported some improvement during the
four-week period ended January 15.
Operations of most reporting plants
have declined seasonally but continue
above the level prevailing twelve
months earlier. Reporting lines show
further improvement in their statis
tical positions, the stocks of both fin
ished goods and raw materials having
been reduced further to a volume con
siderably smaller than the large hold
ings at the beginning of 1938. Prices
in general have shown little variation
during the month.
The number of workers employed at
factories in this district increased for
the sixth consecutive month to a level
about 1 per cent above November and
was only 6 per cent below December
1937. The volume of wage payments
was 3 per cent larger than in Novem
ber and 1 per cent higher than the
year before. December was the first
month to show a net gain in a twelve
month period since October 1937,
which was the beginning of the pre
cipitous decline in both employment
and payrolls that culminated in the
late spring last year.
Preliminary reports indicate that
there were declines in January of ap
proximately seasonal proportions in
the number of factory workers and
the volume of wage payments in the
district. Activity in the iron and steel
group appears to have contracted
somewhat less than seasonally, and in
textiles and clothing the decrease was
about the same as usual at this time of
year.
In Pennsylvania, factory employ
ment again advanced about 1 per cent
and payrolls nearly 3 per cent from
November to December, continuing the
Business Indicators
Philadelphia Federal Reserve District
Index numbers: percentages of the 1923-1925 average as 100
Not adjusted
Adjusted for seasonal variation
seasonal change in activity.
Per cent change
Unadjusted indexes reflect merely the
actual change which may or may not Dec. Oct. Nov. Dec.
1937 1938 1938 1938
be typical.
Dec. 1938
from
Month Year
ago
ago
Industrial production.............
Manufacturing—total.......................
Metal products...............................
Textile products.............................
Transportation equipment..........
1' ood products.................................
Tobacco and products..................
Building materials.........................
Chemicals and products...............
Leather and products....................
Paper and printing........................
Coal mining..........................................
Anthracite........................................
Bituminous......................................
Crude oil..............................................
Electric power
Output..............................................
Sales, total{.....................................
Sales to industries!........................
76
71r
71 r
70 r
74
72
78 p
75p
65p
62 64
72
55
58
71 r 72 80p
63 70
71 r 65
77 73p
79
76
98 97
86
100
37 r 35 r 33
34
113 113p
120 111
96
106 r 113 122p
83
84 r 88
91
50
58 66p
68
57 66p
70 r 49
60
63 62
56
531
228
225
155
394
240
239
172
419 437
244 248
240 244
162 177
Employment and wages—Pa.
Man-hours (1927-28 = 100).........
General (1932 = 100)
and real estate
Building
Contracts awarded!—total.............
66
Residential!..................................... 30
Nonresidential!............................ 102
Public works and utilities!.......... 73
Permits for building—17 cities. . . . 12
Real estate deeds Philadelphia! . 47
Writs for Sheriff sales—Phila.......... 401
Distribution
Retail trade
—sales......................
Wholesale trade—sales.....................
Life insurance sales............................
New passenger auto, registrations.
Hotels—Occupancy.. . (1934 = 100)
Income, total (1934 = 100)
Freight-car loadings—total.............
Merchandise and miscellaneous.
Coal...............................................
55
39
62
99
18
45
328
73
62
39 44
65 86
98
94
17 21
47 43
328 341
77 r
76r
75
74
74
71
81
86
91
127
58
57
58
56
61
58
56
60
58
62
62
62
79p
71p
Business liquidations
Number....................................
Payment of accounts
Check payments.................................
Rate of collections (actual)
+ 4
+ 6
+ 6
+ 4
+ 12
+11
- 5
- 2
- 6
- 0
+ 9
+ 6
+ 14
+ 16
- 3
+ 4
— 8
+16
-11
+38
- 2
- 8
+12
- 3
- 6
+27
- 3
- 4
- 6
+ 9
-18
61
78p
70
73p
70
31
lllp
113p
89
65p
65p
65
406 410
- 2 244
- 2 232
- 9 148
253 266
247 252
166 188
247
239
167
- 1*
-19* 81
-29* 75
-36* 66
+ 5*
+ 4*
- 8*
- 3*
-17* 119
-25* 156
104 109
104
144 r 144 r 151
+ 18
+ 15
+31
+ 4
+24
- 7
+ 4
+ 10
+49
-16
+34
+73
- 7
-15
- 5
61
- 8 28
- 7 92
+ 3 85
-38
8
57
-1J
-31 409
39
60
96
19
43
164
+ 6
+ o
- 0
-15
+39
+27*
-16*
- 9*
+ 7
+ 4
+ 3
- 5
+ 6
-18
+56
+20*
- 8*
-10*
+ 8
+11
+ 2
-10 129
86
71 r 82
-16 97
84
66
69
78
-17 85
-46* 102
51
- 6* 109r 124
- 5* 137 r 130
-28*
+11*
-16*
-77*
+64* 85 r
-44* 148r
-10
+ i*
- 9
80
94
+16
+10
32
29
-11
+
~ 1*
- 0*
- 1*
- 0*
- 6*
- 7*
- 8*
— 4*
- 5*
— 6*
- 3*
+
+
+
Philadelphia....................................
Scranton...........................................
61
75
60
77
117
35r
113
107
84
59
58
70
- 6*
83
Retail food......................................................
76p
73p
+ 1*
+ 3*
+ 3*
+14
31
Foods.................................................
75
73
-22 73 r 75r
-24 69 r 73
— 36
-15
57
-46 69
-23 57
74 r
71 r 62
-21
- 4 76
79
122
- 4 63
-28 31
39 r
113
-15 119
113
-14 91
84
- 8 92
-15 68 r 63
-13 69r 63
-30 59
64
-11 499 394
+ 2
+ 2
+ 9
28
(1926=100).................
Dec. Oct. Nov. Dec.
1937 1938 1938 1938
+ 9
+ 9
85
Prices—United States
Wholesale
+ 6
+ s
1938
from
12
mos.
1937
1*
1*
4*
74
72 r
62 r
56
75 76
73r 75
64 66
62 67
40 42
69 77
105 114
15 14
46 53
367 348
82
89
66
96
96
121
134
132p
67p
89
56
133
122
lOlp
123p
88
-28
52
62
59
56
-27
-22
49
64
62
64
59
64
55
66
92r
23 r
99
31
71
34
92
85
86 101
28
32
33
29
82
73
80
84
- 7* 83
- 8* 84
- 8* 77
78
67
73
81
78
79
77
77
68
74
81
78
78
72
68
73
80
79
78
75
2
9*
-21*
-14*
_ 4*
-
73
% change from
(In millions of dollars)
Dec.
1937
Sept.
1938
Oct.
1938
Nov.
1938
Dec.
1938
S 2.9
221
355
71.7
$ 1.0
235
353
70.1
S 1.1
226
384
72.6
$ 1.3
226
378
72.8
$ 460
662
1,336
15.4
$ 416
720
1,377
9.9
S 418
723
1,426
10.9
8 423
731
1,425
11.2
Month
ago
Year
ago
$ 1.4
226
366
72.9
+8
0
-3
+0
-52
+ 2
+ 3
+ 2
8 427
734
1 ,428
10.9
+1
+0
+u
-3
- 7
+ii
+ 7
-29
Banking and credit
Federal Reserve Bank
Bills discounted..............................
Other bills and securities.............
Member bank reserves.................
Reserve ratio (per cent)...............
Reporting member banks
Loans.................................................
Investments.....................................
Deposits (a).....................................
Bankers’ acceptances outstanding.
* Computed from data unadjusted for seasonal variation.
t Not included in production index,
f 3-month moving daily average centered at 3rd month.
p—Preliminary.
r—Revised,
(a) Less cash items in process of collection.
Page Three
OUTPUT OF METAL PRODUCTS
TEXTILE
ACTIVITY
EMPLOYEE-HOURS IN PENNSYLVANIA
PHILADELPHIA FEDERAL RESERVE DISTRICT
PERCENT r
PERCENT
CARPETS
AND RUGS
ELECTRICAL
APPARATUS
WOOLEN AND
WORSTED
•" GOODS
MENS CLOTHING
STEEL PRODUCTS
1932
1933
1934
1935
1936
consistent upward trend which had
been in evidence since June and July.
Both the volume of payrolls and the
number of workers employed reached
the highest point of the year. The
sharpest gains again occurred at plants
producing transportation equipment,
although substantial improvement was
apparent in the iron and steel and tex
tile and clothing industries. Employ
ment and wage payments at shoe fac
tories increased sharply in December,
in preparation for spring business.
Working time increased over 3 per
cent in December, continuing the ad
vance which began in August. Aver
age hourly earnings also improved and
weekly earnings increased from an
average of $23.65 to $24.09, the highest
level since October 1937 and well above
the past year’s low of $21.22 reached
in July.
In Delaware, employment increased
nearly 3 per cent and payrolls over 5
per cent from November to December,
owing principally to the larger output
of textile, leather, and rubber prod
ucts and to an expansion in activity in
the railway equipment industry. Com
pared with December 1937, however,
employment was down nearly 6 per
cent and payrolls 11 per cent. For the
year as a whole the number of workers
and the amount of wage payments, re
spectively, were one-fifth and onefourth smaller than in the preceding
period. At southern New Jersey fac
tories, employment and payrolls con
tinued to advance, being respectively
1 per cent and 3 per cent higher than
in November.
The upward trend of productive ac
tivity in this district, dating from last
June, has raised this bank’s adjusted
Page Four
1937
1938
1935
index of manufacturing output from
65 per cent of the 1923-25 average to
75. December was the first out of
fifteen months in which the index
was above the level of a year earlier.
The increase of 6 per cent over De
cember 1937 was due principally to
greater activity in those industries
which turn out consumption goods.
Expansion in the output of consum
ers’ goods has been in progress since
early 1938. Improvement in the dur
able goods industries was somewhat
delayed, but the output of this group
has been increasing for the last sev
eral months. In December durable
and consumers’ goods showed about
equal gains, carrying the adjusted in
dex of manufacturing output up 5 per
cent from the November level.
Pronounced improvement in De
cember in the output of transportation
equipment reflected betterment in the
motor vehicle, locomotive and car, and
particularly in the shipbuilding indus
tries. Equally sharp was the rise in
the index of textile production, to
which all leading lines contributed.
The greatest gain in textiles was in
the carpet and rug division, which
was operating at a rate more than
double that reported a year earlier.
Other industries registering substan
tial improvement from November to
December included shoes, pig iron,
electrical apparatus, some of the build
ing materials, and printing and pub
lishing.
Total manufacturing production in
1938 showed a decline of 24 per cent in
comparison with 1937, reflecting the
very sharp recession in output from
the summer of 1937 to the late spring
of last year.
1936
1937
1938
1939
Sales of electric power again ex
panded somewhat more than season
ally, owing principally to increased
purchases by industries.
Coal and other fuels. Production of
anthracite slackened somewhat in the
first half of January, following an un
usual gain in December. Output in
1938 as a whole receded to the record
low level of 45,000,000 tons, compared
with 51,800,000 tons in 1937 and an
average of 52,600,000 in the five years,
1932-36. Shipments also increased
sharply in December to the largest
volume since the early part of the
year, but the aggregate for 1938 was
down sharply from 1937 and sub
stantially less than in any other recent
year.
Demand for Pennsylvania bituminous
coal has been well sustained, despite
a seasonal slackening in takings by
manufacturing plants. Output of col
lieries decreased somewhat more than
usual in December, following sub
stantial gains in the preceding six
months. Some increase in production
in early January, however, was indi
cated by preliminary reports. Ship
ments of soft coal fluctuated narrowly
during the last quarter of 1938 around
the highest level of the year. Both
production and shipments for the
twelve months as a whole, however,
showed substantial decreases from 1937
and were the smallest since the depres
sion low in 1932.
Output of by-product coke decreased
in December, after expanding sharply
for five successive months. Total pro
duction in 1938 was over one-third less
than in the previous period and the
smallest in four years. Gas and fuel
oil output receded in December and
RETAIL TRADE
VALUE OF BUILDING CONTRACTS AWARDED
PHILADELPHIA FEDERAL RESERVE DISTRICT
PHILADELPHIA FEDERAL RESERVE DISTRICT
PERCENT
PERCENT
SALES
.PRICES OF BUILDING
MATERIALS (i»26-ioo)
it
f Ji
NON-RESIDENTIAL
STOCKS
RESIDENTIAL
SEASONAL VARIATION. 1923-23* 100 (3mgr.tka
1932
1933
1934
1935
1936
was substantially below the high level
reached twelve months earlier. Pro
duction in 1938 was the smallest of any
year since 1935.
Building.
The value of building
contracts awarded in the district in
creased 25 per cent in December to
$18,625,000. This total was the larg
est since April and exceeded any De
cember in the past eight years. Com
pared with a year ago, the value of
contract awards was 37 per cent
greater, reflecting substantial gains in
all types of construction except com
mercial buildings and certain unclas
sified structures.
Improvement in the month was due
chiefly to an expansion in the dollar
volume of contracts let for public
works and utilities and educational
buildings. Awards for factories de
clined sharply, and a small decline also
was reported in awards for one- and
two-family dwellings.
Building contracts
Philadelphia
Federal Reserve
District
Per cent
change
Dec.
1938
1938
(000’s
From from
omitted) month
12
ago
mos.
1937
Residential........................... $ 5,055
Apts, and hotels.............
1,108
Family houses.................
3,947
Nonresidential....................
7,753
Commercial.....................
752
Factories...........................
355
Educational.....................
4,836
All other...........................
1,810
+1
- 8
+18
- 3
+24
+44
-77
+78
+25
+1
-10
- 7
-23
-61
+43
+ 3
Total buildings........... $12,808
Public works and utilities.
5,817
+ 14
+59
+ 3
Grand total................. $18,625
+25
- 5
- 8
Source: F. W. Dodge Corporation.
Aggregate awards of building con
tracts in 1938 approximated $165,000,
000, or 5 per cent less than in the pre
ceding year and 3 per cent under the
1937
1938
1932
1933
1936 figure. The record high was
$500,000,000 in 1928, and the 1923-29
average was $390,000,000. Contracts
for the construction of family houses
decreased 10 per cent from the 1937
level and there was a sharp decline
in those let for industrial buildings.
Awards for other nonresidential struc
tures, including educational buildings,
hospitals, and public buildings were the
largest in several years.
Prices of building materials in the
country as a whole showed some de
cline in the first six months of 1938,
but remained comparatively stable dur
ing the last half of the year. In early
January increases were reported in
quotations for numerous grades of
lumber, prepared roofing, and certain
paint materials. About the middle of
the month the price index prepared
by the Bureau of Labor Statistics was
approximately 90 per cent of the 1926
average, compared with 89 a month
earlier and 92 a year ago.
Distribution, trade and service. Retail
trade sales in this district increased 6
per cent more than seasonally from
November to December and for the
first time in 1938 were above the levels
prevailing a year before. The extent
of the improvement at department,
credit, women’s apparel and men’s ap
parel stores was 5, 9, 10 and 13 per
cent respectively. The only line in
which holiday trade did not measure
up to seasonal expectations was shoes.
Aggregate sales were 3 per cent over
those in December 1937, registering an
improvement in the yearly comparison
for the fourth consecutive month. For
the year as a whole, however, the value
of retail trade was down 10 per cent
from the preceding twelve months, re
1934
1935
1936
1937
1930
flecting to some extent the influence of
lower prices.
The dollar volume of business at
wholesale establishments showed prac
tically no change from November,
sharp increases in actual sales of jew
elry and electrical supplies being off
set for the most part by reductions in
such staples as shoes and dry goods.
The decline in the aggregate from a
year ago, however, narrowed for the
third time and in December was only
9 per cent. For the entire year whole
sale business was down approximately
one-sixth from 1937 with all lines, ex
cept footwear, sharing the decline.
Inventories at retail establishments
were seasonally reduced and at the
close of the year were 5 per cent below
a year ago. Stocks of goods at whole
sale declined sharply in December and
continued nearly one-fifth smaller than
in 1937. Reductions in inventories of
merchandise at trade establishments
have been in progress since the fall.
Freight-car loadings in the district
were reduced less than seasonally in
December, so that the adjusted index
continued the upward trend which has
prevailed since the low point reached
in May. The further gain in the latest
period reflected less than usual de
clines in shipments of ore and miscel
laneous materials, an increased move
ment of coal, and an actual increase
in loadings of grain, shipments of
which ordinarily are sharply reduced
at this time of year. Total car load
ings were approximately 8 per cent
higher than a year earlier.
Following the introduction of new
models in September, registrations of
new passenger automobiles have ex
panded sharply. Sales in December
were one-quarter greater than in No-
vember and substantially larger than
in any other month of 1938. In com
parison with 1937, the December
figure was 20 per cent greater but the
total for the year 1938 was 46 per cent
smaller.
Total revenue of nonresort hotels
in this district declined seasonally in
December and was 10 per cent less
than in December 1937. In the twelve
month period, the decline from a year
before amounted to 5 per cent.
Hotel business
Philadelphia Federal
Reserve District
Room occupancy....
Per cent of capacity used:
Dec. 1938................ 46.8
Nov. 1938................ 55.7
Dec. 1937................ 50.8
Revenue from:
Guest rooms...........
Food.........................
Other sources.........
Total revenue. . .
Dec., per cent 1938
change from from
12
Month Year mos.
1937
ago
ago
0
-16
+ o
- 8
-6
-24
- 3
+ 8
-12
-10
- 7
—5
—6
-4
- 9
-10
-5
Banking conditions.
Deposits and
reserves of reporting banks have in
creased substantially in the past month,
following a period in which the supply
of funds was reduced by the holiday
demand for currency and payments to
the Treasury on income taxes and se
curities. Loans have declined since
the end of the year, following a small
upturn in the closing months of 1938.
Average reserve balances of all
member banks in the district declined
from $369,700,000 in the first half of
December to $362,700,000 in the last
half. Seasonal influences thereafter
were reflected in a rise to $394,400,000
in the first fifteen days of January,
which was the highest point for any
similar period since June. The vol
ume of surplus funds was indicated by
proportions of excess to required re
serves of 41 per cent at reserve city
banks in Philadelphia and 53 per cent
at country member banks.
Member bank
reserves
(Dollar figures in
millions)
Held
Ex
Re
quired cess
Ratio of
excess
to re
quired
Reserve city banks:
Dec. 16-31............
Jan. 1-15............
$171.4 $56.5
222.9 172.6 50.3
246.3 174.8 71.5
33%
29 ”
41 ”
Country banks:
Dec. 1-1S............
Dec. 16-31............
Jan. 1-15............
47.1
43.5
51.6
50 ”
45 ”
53 ”
141.8
139.8
148.1
94.7
96.3
96.5
By January 18 the reserves of mem
ber banks had risen to $402,000,000.
An increase of $49,000,000 in the four
weeks ended on that date was the re
Page Six
Federal Reserve
Bank of Philadelphia
(Dollar figures in
millions)
Jan.
18,
1939
$
Industrial advances . .
U. S. securities............
1.2
3.0
205.9
$210 1
Note circulation......... 313.7
Member bank deposits 402.2
U. S. general account.
45.9
Foreign bank deposits.
15.2
Other deposits.............
6.8
Total reserves.............. 594.2
Reserve ratio...............
75.8%
Changes in—
Four
weeks
One
year
— $ 0.2
- 0.0
- 0.1
- 16.9
—$1.1
- 0.0
- 0.5
- 5.8
—$17 2
- 10.9
+ 49.2
- 16.8
- 3.9
- 0.3
+ 33.4
+ 2.6%
— $7.4
+ 2.5
+24.5
+39.1
- 1.2
+ 5.0
+74.0
+ 2.9%
sult largely of the seasonal return of
currency and coin, which aggregated
$24,000,000. Funds also were sup
plied by net Treasury disbursements
of approximately $16,000,000 and by a
gain of $8,000,000 in commercial and
financial transactions with other dis
tricts.
At no time in the past year have
this bank’s discounts for members been
as high as $3,000,000, and the latest
report shows only $1,200,000 on the
books, representing accommodation ex
tended to 27 banks. The principal
change in the bill and security holdings
recently was a reduction of nearly
$17,000,000 at the beginning of Janu
ary in the bank's participation in Sys
tem holdings of United States Govern
ment securities. This decline was
routine in character, reflecting the
usual quarterly reallocation among the
reserve banks in accordance with
earnings and other factors prescribed
by the Federal Open Market Com
mittee.
Deposits of reporting member banks
on January 18 aggregated $1,458,000,
000, the highest volume since May 1937.
Expansion of $30,000,000 in the past
four weeks was due chiefly to a rise
in balances held for other banks, a
development which is quite usual at
this time of the year. Individual and
corporate balances registered only a
small increase, despite the return of
currency and net Treasury disburse
ments in this period.
Reporting member
banks
(000,000’s omitted)
Jan.
18,
1939
Assets
Commercial loans................... $
Open market paper................
Loans to brokers, etc.............
Other loans to carry secur.. .
Loans on real estate...............
Loans to banks........................
Other loans...............................
181
22
18
33
57
2
107
Changes in—
Four
weeks
One
year
-$ 4
0
- 2
0
- 1
0
- 2
—$28
- 2
- 2
- 2
- 2
- 1
- 2
Total loans........................... $
420
-$ 9
—$39
Government securities.......... $
Obligations fully guaranteed
Other securities.......................
360
90
281
-$ 5
- 3
— 5
+$55
- 2
+ 20
Total investments.............. $
731
—$13
+S73
$1,151
269
17
175
82
Total loans & investments
Reserve with F. R. Bank . . .
Cash in vault...........................
Balances with other banks . .
Other assets—net...................
Liabilities
Demand deposits, adjusted . $
Time deposits...........................
U. S. Government deposits..
Interbank deposits..................
—$22
+ 41
— 5
+ 9
- 1
+*34
+ 24
0
+ 30
- 2
795
281
54
328
+$ 5
- 2
- 1
+ 28
+S13
+ 7
+ 29
+ 46
Other liabilities........................
Capital account.......................
16
220
—
-
3
5
3
6
A sharp rise in reserves of the re
porting banks reflected additions to
deposits and a steady decline in out
standing credit. Repayment of loans
and sales of securities were princi
pally responsible for the decrease of
$22,000,000 in credit, although chargeoffs at the end of the year also con
tributed. Reductions of $8,000,000 in
holdings of government obligations
and of $5,000,000 in other securities
were shown, but total investments at
the close still were $82,000,000 above
the low point of last spring.
Approximately $4,000,000 of a $9,
000,000 decrease in loans was in com
mercial accommodation, which cur
rently is at the lowest point of the
past two years. In the last half of 1938
the trend of commercial loans gave
virtually no indication of the marked
expansion in trade and business activity
that was taking place. In late weeks
such loans have averaged about 13 per
cent below the corresponding dates of
last year, although production and re
tail distribution in December exceeded
the levels of a year earlier.
MEMBER BANK RESERVES AND RELATED FACTORS
Changes in weeks ending—
Jan.
11
Jan.
18
Changes
in four
weeks
+ 0.2
+ 8.1
- 2.4
+ 0.1
+ 3.0
+ 4.3
+ 0.8
-11.5
+ 8.1
- 0.4
+ 8.6
+15.8
+13.3
+ 5.9
+ 7.4
- 2.6
+24.0
Uses of funds:
Currency demand....................................................................
Member bank reserve deposits.............................................
"Other deposits” at reserve bank........................................
Unexpended capital funds.....................................................
- 2.7
+ 16.1
+ 0.0
- 0.1
-10.5
+17.1
- 0.3
- 0.4
- 7.5
+ 14.6
+ 0.4
- 0.1
+
-
3.4
1.4
0.4
0.2
-24.1
+49.2
- 0.3
- 0.8
Total........................................................................................
+13.3
+ 5.9
+ 7.4
- 2.6
+24.0
Philadelphia Federal Reserve District
(Millions of dollars)
Dec.
28
Jan.
4
Sources of funds:
Reserve bank credit extended in district...........................
Commercial transfers (chiefly interdistrict)......................
Treasury operations................................................................
- 1.5
+ 9.0
+ 5.8
Total........................................................................................
'
Bills covering domestic shipments increased $130,000
during December, but total acceptances of banks in this
district declined. This was due principally to a reduction
of $350,000 in bills relating to domestic warehouse credits.
At the end of the month $10,907,000 was outstanding, as
compared to $15,351,000 a year earlier, and a high point
for the past ten years of $26,309,000 on February 28, 1930.
(All figures are rounded from original data)
Manufacturing Indexes
Employment*
Payrolls*
(Indexes are percentages of
the 1923-25 average taken
Per cent
Per cent
as 100. Total and group in
dexes are weighted propor Dec. change from Dec. change from
1938
1938
tionately.)
index Dec. Nov. index Dec. Nov.
1937 1938
1937 1938
REPORTING MEMBER BANKS
MILLIONS.
Employment and Payrolls
in Pennsylvania
PHILADELPHIA FEDERAL RESERVE DISTRICT
1600
All manufacturing ..
Iron, steel and products..
Non-fer. metal products.
Transportation equip... .
Textiles and clothing... .
Textiles...........................
Clothing..........................
F ood products...................
Stone, clay and glass. . . .
Lumber products.............
Chemicals and prods.. . .
Leather and products. . .
Paper and printing..........
Printing..........................
Others:
Cigars and tobacco___
Rubber tires, goods . . .
Musical instruments. .
DEPOSITS
1400
1200
TOTAL LOANS x
AND INVESTMENTS
*
76
- 6
66
-16
-15
-15
+ 9
+ 8
+11
99
51
95
91
111
104
71
52
82
88
95
90
63
81
56
Figures from 2,286 plants.
75
+i
+1
-10
- 3
-10
+ 9
_ 2
- 4
-1
+3
+2
+2
+2
-1
+0
-8
+0
+2
+1
+1
- 6
+ 3
+ 1
—5
+2
+1
- 0
71
111
54
86
85
93
106
69
45
88
85
99
96
59
89
60
+ i
- 5
-IS
- 7
+3
+2
+2
+8
+4
+26
+26
+25
+4
+2
+ 0
-0
+ 6
- 2
- 4
+26
- 1
- 2
-0
-9
+i
+8
+4
+6
- 9
+ 15
+ 3
-3
+5
+5
Employehourst
Dec. 1938—
per cent
change from
Dec. Nov.
1937 1938
- 1
- 7
-16
-11
+31
+32
+26
- 1
+ 1
- 1
+3
+3
+2
+9
+4
-1
+0
+23
- 1
- 4
-1
-7
+1
+6
+4
+7
-11
+16
- 0
+6
+4
t Figures from 2,057 plants.
INVESTMENTS
General Index Numbers
Covering twelve branches of trade and industry
LOANS
(Indexes are percentages of the
1932 average taken as 100. In
dividual indexes are combined
proportionately into general in
dex number.)
BALANCES AT RESERVE BANK
AND OTHER BANKS
19 3 7
General index
(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..................
1939
19 3 8
Less cash Hews in process of collection
Percentage change—Dec. 1938 from Dec. 1937
City areas*
Allentown.............
Altoona..................
Harrisburg............
Johnstown............
Lancaster..............
Philadelphia.........
Scranton ................
Trenton.................
Wilmington..........
Y ork.......................
Manufacturing
Employ
ment
Wage
payments
- 3
- 8
- 7
-23
+ 2
— 5
- 1
+ 2
+ 4
- 4
+ o
— 5
+1
+ 8
+28
- 1
- 6
+n
- 3
+ 16
+19
+22
+ 4
+10
-11
+ 9
Building
permits
(value)
+
+
21
83
6
88
17
26
+ 43
- 2
— 77
+ 146
- 18
Debits
- 7
+ 4
+ 7
-14
+ 4
+ 6
+26
+ 3
+20
+ 2
- 0
- 2
-11
Employment
Dec.
1938
index
109
120
69
102
oo
90
134
94
139
114
110
97
97
Per cent
change from
Dec. Nov.
1937
1938
- 8
- 6
-16
-12
—30
-14
-16
- 5
- 2
- 3
— 6
— 5
- 3
+ 5
+ 1
+ 1
+
0
- 4
- 9
0
- 1
+27
+ 1
- 1
- 1
— 5
Payrolls
Dec.
1938
index
151
183
73
194
73
152
156
104
154
116
124
122
114
Per cent
change from
Dec. Nov.
1937
1938
- 3
+
i
-17
- 9
-30
+ 3
-10
— 4
0
- 3
- 7
+ 1
+ 6
+ 4
+ 3
+ 17
- 2
- 2
-13
+ 2
+
1
+24
+ 1
- 1
0
-13
Retail
trade
sales
+
+
—
+
-
4
2
2
1
1
2
INDUSTRIAL EMPLOYMENT AND PAYROLLS
PENNSYLVANIA
PERCENT
+ 3
+ 2
+ 2
PAYROLLS
— 5
+ 2
December 1938 from November 1938
Allentown.............
Altoona..................
Harrisburg............
Johnstown............
Lancaster..............
Philadelphia.........
Reading.................
Scranton................
Trenton.................
Wilkes-Barre....
Williamsport........
Wilmington..........
York.......................
+
+
+
+
+
+
+
+
+
-
0
2
4
H
0
2
3
0
1
0
1
4
3
+ 0
+ 8
+ 8
- 0
+ 2
+ 5
+ 3
+ 2
+ 5
+13
- 3
+ 0
+ 2
- 87
- 60
+ 32
— 54
+274
- 29
+656
+ 85
- 7
+353
- 75
+ 181
- 80
+14
+22
+41
+15
+22
+28
+26
+21
+57
+30
+ 7
+88
+1»
+88
+73
+63
+76
+80
+46
+7H
+68
+71
+66
•• •
EMPLOYMENT
+87
+87
1933
1934
1935
1936
1937
1938
* Area not restricted to the corporate limits of cities given here.
Page Seven
OUTPUT OF MANUFACTURES
PHILADELPHIA FEDERAL RESERVE DISTRICT
MUUSTtD TON SEASONAL VARIATION
l*Z3'25AVCa 1C
m CENT
Index numbers of individual lines of trade and
manufactures
Philadelphia Federal Reserve District
Index numbers: percentages of the 1923-1925 average as 100
Adjusted, indexes allow for the usual
seasonal change in activity.
Not adjusted
Adjusted for seasonal variation
Per cent change
Unadjusted indexes reflect merely the
actual change which may or may not Dec Oct. Nov Dec.
1937 1938 1938 1938
be typical.
Dec. 1938
from
1938
from
Month Year
ago
ago
m os.
1937
Dec. Oct. Nov Dec.
1937 1938 1938 1938
12
Retail trade
Sales
Total of all stores. . .
Department...........
Men’s apparel. . . .
Women's apparel.
Shoe.........................
Credit......................
77 r
72
71
101 r
72
82 r
Stocks of goods
Total of all stores. . .
Department...........
Women’s apparel.
Shoe.........................
Credit.................... .
76 r
55
109
71
103
79p
71
72p
102p
75p
91
75
66 r
70
98
79
90
71p
74 71
52 52 51
93 92 97p
62 62 61
109 102 104
4- 5
-10
-11
-12
129
130
+10
- 7
- 7
162
93
126r
+
6
+13
- 4
+ 9
-10
120
71r
52
+ 0
- 3
+ 5
—
12
102
- 1
- 13
+ 1
66
+
2
-
o
8
96 r
Rate of stock turnover
12 months (actual, not indexes)
82
72
110 108
81 76
110 107
132p
129
120p
167p
96p
140
82 82
59 61
118 113
68
65
116 115
67p
47
90p
58
96
88
86
75
74
HOSIERY
4.19
Wholesale trade
Sales
Total of all lines....
Boots and shoes...
Drugs......................
Dry goods..............
Electrical supplies.
Groceries................
Hardware...............
Jewelry...................
Paper.......................
- 0
-22
+
6
-24
+36
- 7
+ 5
+45
-14
Stocks of goods
Total of all lines.
Drugs......................
Dry goods..............
Electrical supplies.
Groceries................
Hardware...............
Jewelry....................
Paper.......................
Output of manufactures
Pig iron.........................................
Steel...............................................
Iron castings...............................
Steel castings............................
Electrical apparatus...............
Motor vehicles..........................
Automobile parts and bodies.
Locomotives and cars.............
Shipbuilding..............................
Silk manufactures...................
Woolen 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....................
- 9
+ 36
2
- 15
- 31
- 4
+ 1
+
+
6
2
-16
2
- 2
-31
-39
- 7
-18
-20
LUMBER PRODUCTS
-23
- 18
+ 1
-
89
+
69
66
66
39
55
52
69
62
16
58
38
58
50
77
69 r
15
63
56
8
- 38
- 15
-
20
6
- 24
35
58
54
89
108
19
64
32
283r
71
36
33
52
79
92
44
34
28
39
55
49
73
57
17
61
13
264
80
47
42
74
94
122
58
34
26 r
38
61
49
83
65
18
69
13
230r
79
55
41r
90
95
131r
55
33
25 r
81
99 93
136 116 91r
56 45 51
84 98 97
64 65 67
97 87 87
120 145 149
74 69r 79
86
72 76
81
72 73
165 153 152
87 94 105
42
62
46
77
74
19
74
14
264
87
62
43
115
109
137
43
35
26
89
31
53p
95
68
93
176
71p
79
79
148p
103
* Computed from data unadjusted for seasonal variation.
+13
+
1
- 6
-
8
+13
+10
+ 8
+10
+15
+10
+12
+ 5
+28
+15
+ 5
-21
+
+
-
7
4
2*
4
-66
+ 3
—
2
+ 1
+ 7
+18
- 9
+ 4
+ 7
- 2
-
2
+
20
7
14
14
32
3
16
55
7
+
22
+ 69
+ 32
+
+
+
-
+ 121
+ 37
+ 49
2
+ 4
-
+
-
8
2*
10
77
- 5
+ 13
+
5
- 4
+ 47
- 3
8
- 3
- 10
+ 19
-54 35
-46 54
-40 50
86
-51
-46 105
-28 15
-31
62
-58 32
- 4 297 r
-19 73
-28 34
-37 35
-41
50
- 15 77
-10
91
- 6
36
-50 33
-29 28
- 3* 91
+ 1 87
-12
- 8
88
56
61
65
- 8
98
- 0 102
-32 80
-19 86
-17 79
-10 165
-35 84
- 4
^-11
p—Preliminary.
12
264
82
52
43
83
103
133
65
34
27 r
88
103
98
59
121
66
42
58
43
74
72
15
73
12
14
230r 277
80 r 88
59 58
43 r 46
102 109
108 106
132 136
54 36
33 34
25 r 26
91
89
103 96
59 20
55 55p
116 68
67 68
88
94
140 150
76 78p
76 78
76 76
152 147p
88
156
72r
73
77
155
92 101
GOAT AND KID LEATHER
2001------------------175------------------A—/*/'
\-vr2VW
100 .,
100
r—Revised.
1934
Page Eight
\f^
1935
1936
1937
193 8
@FedFRASER