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THE BUSINESS REVIEW V THIRD FEDERAL PHILADELPHIA If | RESERVE DISTRICT FEBRUARY i, 1940 LJ1 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Industrial activity, after a rapid rise in recent months, declined less than seasonally in December. In the first half of January activity did not show the usual seasonal increase. Distribu tion of commodities to consumers was maintained in large volume. Production. Industrial output de creased in December, but by a smaller amount than is usual at this season, with the consequence that the Board’s index, which allows for usual seasonal variations, advanced further from 124 to 128 per cent of the 1923-1925 aver age. As in other recent months, the rise in the index continued to reflect mainly increased activity in industries producing durable goods. Automobile production rose sharply in December owing to the reopening of plants of one large producer which had been closed for almost two months. Plate glass production also increased. At steel mills activity was maintained near the high level that prevailed in October and November; fourth quar ter production of steel ingots was greater than in any other three-month period on record. Output of zinc and deliveries of tin continued to increase in December, and lumber production declined less than seasonally. In the nondurable goods industries, where production had been at high levels throughout the autumn, changes in output in December were largely seasonal in character. At woolen tex tile mills, however, there was a con siderable reduction in activity, and ac tivity at silk mills declined to a low level, reflecting in part continued high prices of raw silk. Output of crude petroleum continued at a high rate in December, while coal production was reduced, following a large volume of output in the two preceding months. In the first half of January steel ingot production was at a somewhat lower level than in December, while auto mobile assemblies were maintained at about the same high rate as in the pre vious month. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, increased further in December, owing to the inclusion in the December figures of a large amount for a dam under construction by the Tennessee Valley Authority. Contracts for private building, both INDUSTRIAL PRODUCTION residential and nonresidential, declined seasonally. Employment. According to reports from leading industrial states, factory employment decreased less than season ally in December and payrolls showed a further advance. Distribution. Distribution of com modities to consumers increased fur ther in December. Sales at variety stores showed about the usual sharp rise and sales at department stores and mail-order houses increased more than seasonally. MEMBER BANKS IN 101 LEADING CITIES Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934, to January 10, 1940. Commercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937, so-called "Other loans” as then reported. DEPARTMENT STORE SALES AND STOCKS WHOLESALE PRICES PERCENT PERCENT 110 100 SALES J A A—-'N 90 - a AT"C STOCK A-"\ 70 vV . m PERCENT 110 100 90 70 50 40 40 1934 Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 to De cember 1939. 1935 1936 1937 1938 1939 Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 averages 100. By months, January 1934 to December 1939. 50 1934 1935 1936 1937 1938 1939 Index compiled by the United States Bureau of Labor Statistics, 1926= 100. By weeks, 1934 to week ending January 13, 1940. Page One Freight-car loadings declined by more than the usual seasonal amount from November to December, reflecting chiefly a further reduction in coal ship ments and a decrease in loadings of ore, which had been at a high level in the previous month. Commodity prices. Prices of wheat, which had advanced sharply early in December and continued at the higher level during the rest of the month, de clined considerably in the first half of January. Smaller decreases occurred in some other commodities, including hides, tin, and zinc. Prices of most other basic commodities, such as cot ton, wool, lead, and steel scrap, showed little change. Government security market. Prices of United States Government securities continued to advance during December and were steady during the first two weeks of January. Bank credit. Total loans and invest ments of reporting member banks in 101 leading cities declined in the four weeks ending January 10, following an increase during the first half of De These changes reflected cember. largely a temporary rise and a subse quent decline in loans to security brokers and dealers in connection with the Government’s flotation of a new issue of bonds. Total holdings of United States Government obligations at city banks showed little net change during the period. As a result chiefly of further in creases in gold stock as well as the post-holiday return of currency from circulation, excess reserves of member banks increased sharply in the four weeks ending January 10. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District improved further in December. The index after allow ing for seasonal change increased 1 per cent, advancing for the seventh consecutive month to a level 17 per cent above a year earlier and 37 per cent above the recession low in July 1938. The gain in the month reflected smaller than seasonal declines in the output of manufactures. Production of coal and crude oil declined somewhat more than was to be expected. During 1939 as a whole industrial production averaged 17 per cent above the level in 1938, reflecting an im provement of 19 per cent in manufac turing activity, 13 per cent in coal mining, and 10 per cent in the produc tion of electric power. The output of crude oil was reduced somewhat in the year. Construction activity decreased in the last quarter of the year, after allowing for seasonal changes, and in December was somewhat below the level of a year earlier. Preliminary indications are that for the first time since last summer em ployment and payrolls in this district declined somewhat in January. Em ployment and income, however, con tinue near the peak levels reached in 1937. Distribution to consumers has been fairly well sustained. Retail trade sales showed the customary sharp advance in December and according to early re ports have shown the usual seasonal contraction in January. Wholesale trade has declined somewhat, as was to be expected, but a substantial vol ume of reordering continues in evi dence and spring sales to retailers are expected to exceed a year ago. Stocks at retail stores continue to decline and are low in relation to the current level of business. Manufacturing. The market for fac tory products in this district continued PRODUCTIVE ACTIVITY quiet from the middle of December to the middle of January, but manufac turers in some important lines expect increased orders within the next month. While inquiries and sales have de clined substantially from the high lev els last fall and are somewhat below late November and early December, the volume of new business is larger than a year ago in all lines except certain textiles. Prices have weakened some what since the turn of the year but are still higher than a year ago. The number of cancellations is still unusually small despite heavy place ments in the fall, and unfilled orders continue large for this season, although backlogs have been reduced consider ably in the past two months. Inventories of both raw and finished goods at reporting concerns have shown little change since the middle of December, but the volume of manu factured goods in producers’ stocks is INDUSTRIAL AND TRADE ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT TOTAL BUILDING CONTRACTS AWARDED RETAIL TRADE SALES I PRODUCTION MANUFACTURING ACTIVITY ANTHRACITE VALUE OF BITUMINOUS BUILDING CONTRACTS (l monlhs moving JJUSTfcP fOR SEASONAL VARIATION 1923 1925 1927 Page Two 1929 1931 1933 1935 1937 1939 1941 1934 1935 1936 i |............................. ,..................... 1937 1938 , 1939 smaller than in January 1939, particu larly at textile mills. Operations have been reduced some what from the levels in December but plants are much more active than last year. The recent high operating rates have required further replacement of equipment, especially in the textile in dustry. Some plant expansion contin ues in evidence. Employment and payrolls in Penn sylvania factories in December ap proximated the peaks reached a month before. The estimated number of wage earners was about 920,000 or 14 per cent more than in December 1938 and 16 per cent above the 795,000 employed in May. The volume of factory wage payments was estimated at $23,400,000 a week in December or 31 per cent more than a year earlier and 34 per cent above the $17,500,000 in May. At the end of the 1937-38 reces sion, factory payrolls in Pennsylvania amounted only to about $14,500,000 a week. Preliminary reports indicate that employment and payrolls in Jan uary declined more than seasonally for the first time since early last summer, the principal reductions being in the iron and steel industry. The chief gains in the sharp recov ery during the second half of 1939 were in industries producing capital goods, where employment advanced 26 per cent from May to December as against an increase of only 5 per cent in consumers’ goods industries. Wage payments by producers of capital goods expanded 50 per cent in the period, compared with an increase of only 10 per cent in consumers’ lines. During 1939 as a whole the number of factory wage earners averaged 838, 000 or 8 per cent more than the aver age the year before, and wage pay ments averaged $19,500,000 a week, an increase of 21 per cent over the 1938 level. From November to December em ployment and payrolls improved fur ther in the durable goods lines, par ticularly in the iron and steel industry at rolling mills, foundries, and in such finished lines as machinery, engines and pumps, and hardware and tools. Substantial improvement was also re ported by producers of nonferrous metal products, automobiles and trucks, locomotives and cars, and ships. At textile and clothing mills activity was fairly well sustained. Employment and payrolls increased sharply at factories producing men’s clothing, where there is usually a substantial decline at this time of year. The principal reductions Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not Dec. Oct. Nov. Dec. be typical. 1938 1939 1939 1939 Dec. 1939 from Month Year ago ago Industrial production .... Manufacturing—total............... Durable goods........................ Consumers’ goods.................. Metal products...................... Textile products.................... Transportation equipment. Food products........................ Tobacco and products......... Building materials................ Chemicals and products... , Leather and products........... Paper and printing............... Coal mining.............................. . Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output..................................... Sales, total J............................ Sales to industries i............... 79 76 65 87 65 83 70 73 97 33 111 129 88 66 67 r 62 437 90 92 90 98 89 100 r 85 101 79 94 48r 133 88 93 90 91 85 100 78 101 46 131 124 89 61 58 85 460 122 89 63 60 86 482 248 273 244 271 177 198 93 p 91p lOOp 90p 104 86 p 97 78p 106 47 133p 118p 92 61p 59p 76 479 272 269 276 267 194 204 Employment and wages—Pa. Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 =100). . . . General (1932 =100) Employment................................. Payrolls........................................... Building and real estate Contracts awardedt—total............. Residential f..................................... Nonresidentialf.............................. Public works and utilities!.......... Permits for building—17 cities. . . . Real estate deeds—Philadelphia! . Writs for Sheriff sales—Phila.......... Distribution Retail trade —sales....................... stocks.................. Wholesale trade—sales..................... t _ stocks.................. Life insurance sales............................ New passenger auto, registrations . Hotels—Occupancy... (1934 =100) Income, total (1934 =100) Freight-car loadings—-total............. Merchandise and miscellaneous . Coal.................................................... + i + i 1939 from 1938 + 2 + 2 + S + 1 - 3 - 2 + 12 - 1 - 1 - 3 + 3 - 3 - 2 -11 - 1 + 17 + 20 +53 + 4 +60 + 3 + 39 + 7 + 1U +43 + 20 - 8 + 4 - 8 -12’ + 23 + 10 + 17 + 19 + 34 + 12 +35 +24 +40 + 3 + 3 +21 + 11 + 4 + 2 + 13 + 10 + 18 - 2 - 1 - 3 + 5 + 8 + 9 + 16 + 10 +11 + 13 - 0* + 14* + 8* +31* +21* +35* +25* + 0* + 1* Dec. Oct. Nov. Dec. 1938 1939 1939 1939 76 74 94 92 93 92 89p 88p 62 80 70 73 70 30 109 120 89 66 r 66 r 65 410 94 89 95 82 124 49 133 132 90 76 74 91 460 99 r 89 97 80 112 47 134 116 90 66 62 95 468 99 83p 98 77p 77 43 131p 112p 93 60p 58p 80 450 266 281 252 271 168 192 80 r 90 69 r 89 66 86 + 3* + 8* + 3* 112r 115 — 0* + 19* + 14* 143r 171 73 44 76r 66 r 41 98 206 86 21 22 43 52 341 313 80 r 77 r 64 r 61 r 43 95 33 54 264 64 53 54 88 19 50 287 - 1 -13 + 20 -37 -10 - 9 + 16 -16 -13 -24 - 7 -44 — 7 + 9 + 19 103 145p 89 72p + 5 + 38* - 2* - 3* + 22 + 21 + 16 133 122 101 124r 56 55 66 92 94 128 129 84 80 87 95 89 113 122 116 105p 129 83 73 80 73 82 75 71 34 64 30 81 20 63 14 101 87 91 112 29 33 36 30 77 68 73 80 79 78 75 79 67 73 84 78 79 75 79 67 72 84 78 78 75 79 68 72 84 77 78 74 - 1* -12* 85 104 + 22 +n + 8 35 -15 + 2 Number............................. Amount of liabilities.... Payment of accounts Check payments.................. Rate of collection (actual) Retail trade...................... 30 Prices—United States Wholesale (1026 =100). 0* Farm products............... Foods............................... Other commodities.... + 0* + 3* - 1* - 0* + - 1* — + 0* _ 1* - Retail Food....................... Philadelphia................... Scranton.......................... Sept. 1939 1938 Oct. 1939 0* 2* 4* 2* 0* 1* 117 121 171 171 131r 93 72r 88 -12* -59* 83 81 75 91 90 89 + 7 -22* -31* 127 +u 91 90 88 67 78r 64 r 59 42 65 r 64 r 51 77 40 46 49 114 200 106 103 14 23 31 13 53 50 53 61 348 156 296 293 + 0 + 11* + 12* -33 - 0* + 5* + 8* +34 +36 + 14 80 283 288 284 275 198 194 + 64 -24 +43 +65 + 6 -19 88p + 0 77p - 3 — 2* - 7* - 6 + 8* -10* + 5* + 1 + 4 - 5 88 Business liquidations (In millions of dollars) Not adjusted Per cent change + 10* - 2* — 5* - 4* - 0* — 2* - 2* - 1* Nov. 1939 Dec. 1939 % change from Month ago Year ago 0.7 218 588 81.0 +75 - 6 -2 + 2 -50 — 4 + 61 +u 431 734 1703 10.1 + + - + 4 + 1 + 19 — 7 Banking and credit Federal Reserve Bank Bills discounted.............................. $ 1.4 Other bills and securities............. 226 Member bank reserves.................. 366 Reserve ratio (per cent)............... 72.9 Reporting member banks Loans................................... $ 415 Investments..................................... 724 Deposits (a)..................................... 1428 Bankers’ acceptances outstanding. 10.9 $ $ 0.3 236 540 77.6 % 415 737 1617 8.6 $ * Computed from data unadjusted for seasonal variation, t Not included in production index. T 3-month moving daily average centered at 3rd month. 0.4 241 572 77.3 $ 422 729 1660 9.0 $ 0.4 231 598 79.6 $ 426 735 1696 10.2 S 1 0 o 1 r—Revised, p—Preliminary. (a) Less cash items in process of collection. Page Three OUTPUT OF STEEL INGOTS TEXTILE FIBERS %OF CAPACITY MILLIONS OF LBSp 400 A PERCENT UNITED STATES DOLLARS ■HPER. LB MILL TAKINGS — .150 COTTON, UNITED STATES EASTERN PENNSYLVANIA 1937 1938 1939 1940 1937 1938 1939 1940 1937 1938 1939 1940 in December were at plants turning out major lines of productive activity Output of by-product coke in De silk goods and hosiery, where the high failed to maintain the high levels cember was close to the high Novem price of raw materials and unsettled reached in November. ber level and was 40 per cent greater market conditions have disturbed pro Production of electric power in than in December 1938. Activity at duction. creased about 1 per cent less than usual gas and fuel oil refineries slackened in Average hourly earnings of factory in December and total sales declined December for the third successive workers increased fractionally to 71 about 3 per cent more than was to be month and was 3 per cent less than a cents in December compared with 69 expected. Sales to industry continued year earlier. Production of by-prod cents last May. Weekly earnings large, showing an expansion of 5 per uct coke expanded 35 per cent from reached $27.33 compared with only cent on a seasonally adjusted basis. 1938 to 1939 and gas and fuel oils, 7 $23.70 at the 1939 low point. Aver Coal and other fuels. Increased heat per cent. age weekly working time per man was ing requirements have stimulated the Building. Construction activity in this 38.7 hours, the same as in November demand for anthracite, and sales at the district has been decreasing more and about four hours a week longer mines have increased considerably since sharply than usual since fall and in than in May. the turn of the year. Conditions within December operations on contracts pre In Delaware factories employment the industry are improving as a result viously awarded were below the level increased fractionally in December and of a plan to stabilize production, re of a year earlier. The recession in the wage payments expanded about 2.5 per cently agreed upon by leading mine op final quarter of 1939 was due chiefly to cent. The only substantial declines in erators and their employees. slackening in residential building, the month were reported by producers Output of collieries declined some which had expanded rapidly in the of building materials, where activity what more than usual in December, preceding five months, reaching a ninehas been curtailed because of the se owing to sharply curtailed operations year peak in September. vere winter weather. During 1939 during the first half of the month. In The value of new contract awards employment averaged 10 per cent above early January, however, production ex increased 13 per cent in December to 1938 and payrolls 15 per cent higher. panded and was well above the level approximately $14,000,000 but was 24 In Southern New Jersey employ of a year earlier. Shipments showed per cent smaller than in the same ment and payrolls respectively declined some gain from November to Decem month of 1938. The gain over Novem 3 and 4 per cent from November but ber, but were the smallest on record ber reflected a sharp expansion in the for the year as a whole averaged 13 for that month. The volume of anthra dollar volume of contracts for public and 25 per cent above 1938. cite mined in 1939 totaled 50,800,000 works and utilities and unclassified The output of factory products in tons, as against 46.000.000 in 1938 and building, including hospitals and other this district declined less than season an average of 53,000,000 in the pre institutions. Awards for commercial ally from November to December and ceding five years. structures also increased, but substan the index, after allowing for seasonal Demand for Pennsylvania bitu tial declines were reported in the case change, increased 1 per cent to the minous coal continues considerably of residences, factories and educational highest level since the late summer of more active than a year ago, but sales buildings. The value of contracts let 1937 and 20 per cent above the 1938 to manufacturing plants and public in December for all classes of con peak reached in December of that year. utility companies have decreased since struction except industrial buildings On an adjusted basis the sharpest gains early January. Activity at the mines and miscellaneous structures was con in the month were in the output of slackened more than seasonally in De siderably smaller than a year earlier. tobacco products and metal goods. cember and early January, following Contjacts awarded during 1939 Textiles were well sustained, especially substantial increases during the preced amounted to nearly $200,000,000. at plants producing carpets and rugs. ing seven months, but was above a year While this total was the largest since Substantially larger than seasonal de ago. Total production in this state in 1930 and was 19 per cent greater than clines were reported in silk manufac 1939 approximated 90,800,000 tons, or in 1938, it was only about one-half of tures and cotton products. Most other 18 per cent more than the year before. the 1923-29 average and compared with Page Four VALUE OF RESIDENTIAL BUILDING CONTRACTS FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE DISTRICT ALLEGHENY PERCENT DISTRICT PERCENT 192. -25AVC. = IOO IOO ONE AND TWO COAL ft+0T/ FAMILY HOUSES 75 50 MERCHANDISE AN D MISCELLANE0 JS TOTAL 25 0 1935 1938 a record high of $500,000,000 in 1928. The value of contracts let for family houses was 46 per cent greater than in 1938 and awards for apartments and hotels were considerably more than double the small volume of a year earlier. Sharp increases also were re ported in industrial buildings, and pub lic works and utilities, but contracts for educational and unclassified struc tures were substantially smaller in 1939 than in 1938. Building contracts Philadelphia Federal Reserve District Per cent Per Dec. change cent 1939 (000’s From 1939 of 1939 omitted) month from total ago 1938 Residential................... Apts, and hotels. . . . J amily houses.......... Nonresidential............. Commercial............... Factories.................... Educational.............. All other..................... 41.3 $ 4,147 - 39 + 64 10.1 808 - 66 + 164 31.2 3,339 - 24 + 46 28.3 4,974 + 31 - 24 8.0 1,345 + 19 + 21 5.7 766 - 21 + 74 3.3 739 - 40 - 74 11.3 2,124 +361 - 24 Total buildings. . . Public works and utilities............................. 30.4 69.6 S 9,121 - 14 + ii 5,002 + 154 + 43 Grand total........... 100.0 $14,123 + 13 + 19 Source: F. W. Dodge Corporation. Distribution, trade and service. Retail trade sales in the Philadelphia district showed the customary sharp increase in December. Although the Christmas buying season started slowly, business improved substantially before the holi day. For the month as a whole sales at apparel and shoe stores expanded more than seasonally, and the aggre gate index, after allowing for seasonal gains, continued at the November level, which was the highest since Jan uary 1937. Preliminary reports indicate that the decline in business during the postChristmas lull has been of about sea sonal proportions. In the second half of January, consumer purchases of 1939 1940 ADJUSTED TOR SEASONAL VARIATIO 1933 1934 winter clothing and promotional goods were stimulated by unusually severe weather. Christmas trade in all reporting lines was substantially better than in 1938. The largest gain was at credit stores where sales of radios, furniture, and other household equipment were 19 per cent above the year before. The small est increase was 7 per cent at women’s apparel stores. Department stores re ported an expansion of 9 per cent from December 1938. The volume of retail business was sustained at relatively high levels throughout 1939 and averaged 7 per cent above the preceding year, during the first half of which general business conditions were sharply depressed. In May 1938, the adjusted index of retail trade sales reached a three-year low, but in the next eight months sales im proved 20 per cent. After losing a substantial part of this gain in the first six months of 1939, trade was stimu lated by improved consumer incomes, and the level of business in November and December was more than 30 per cent above the 1938 low. Stocks of goods at retail establish ments were reduced more than season ally from November in all lines except women’s specialty shops. The average level of inventories was about the same at the end of the month as a year earlier when sales and general business conditions were considerably less ac tive. Sales at wholesale averaged 2 per cent less in December than in Novem ber, owing to sharp declines at estab lishments selling paper, dry goods, and footwear. Reorders of Christmas merchandise increased trade substan tially in jewelry, electrical supplies, and drugs. 1935 1936 1937 1938 1939 Wholesale trade sales in December were 11 per cent above the year before, the principal increases being in elec trical supplies, paper, and hardware, and for the year as a whole aggregate sales were 10 per cent larger than in 1938. Stocks of goods declined in all reporting lines in December but were 12 per cent larger than a year earlier. Shipments of freight by rail in the Allegheny District declined less than usual from November to December, and the seasonally adjusted index reached the highest level since Janu ary 1937. The gain was due primarily to a substantially smaller than expected decline in shipments of miscellaneous goods, which, after allowing for sea sonal changes, were the largest since 1930. Loadings of coal, grain, forest products, ore, and less-than-car lots de clined somewhat more than usual, and loadings of coke increased less than was to be expected, following a heavy movement in the preceding months. All types of shipments were consider ably larger in 1939 than 1938 except livestock and forest products. Particu larly large gains were reported in the case of coke and ore, owing to the high level of activity in the steel industry. Registrations of new passenger au tomobiles in December were about the Hotel business Philadelphia Federal Reserve District Room occupancy.................... Per cent of capacity used: Dec. 1939................. 49.6 Nov. 1939................. 54.8 Dec. 1938................ 46.9 Revenue from: Guest rooms.......................... Food........................................ Other sources........................ Total revenue................... Dec. per cent change from Month Year ago ago 1939 from 1938 + o -10 — l + 5 -2 - 8 + 9 +20 + 11 + 7 + 7 -2 -3 -3 + 5 + 8 -3 Page Five same as in December 1938 but for 1939 as a whole averaged 38 per cent larger than the year before. Total revenue of nonresort hotels in the district was 5 per cent larger in December than in November and 8 per cent above December 1938. For the year as a whole, however, revenue was 3 per cent less than the year be fore. Banking conditions. The reserves of member banks in this district during 1939 showed the sharpest increase on record, rising $224,000,000 to $598, 000,000 at the close of the year. More than $200,000,000 was gained in com mercial and financial transactions with other districts, partly as a result of the sale of newly-issued securities, and op erations of the Federal Treasury and government agencies also supplied more than $60,000,000 of reserve funds. Approximately $50,000,000 was ab sorbed by an expansion in currency demand, owing! chiefly to a need for more hand-to-hand money for indus trial payrolls and trade purposes. Average reserves in the first half of January increased further to a new peak of $621,900,000 and exceeded re quirements by $311,800,000. The pro portion of excess to required reserves was 110 per cent at member banks in Philadelphia and 80 per cent at coun try banks, as against 41 and 53 per cent respectively a year ago. Member bank reserves (Dollar figures in millions) Held Re quired Ex cess Philadelphia banks: 1939—Dec. 1-15 $418.5 $209.4 $209.1 Dec. 10-31 418.0 209.6 208.4 1940—Jan. 1-15 446.2 212.3 233.9 1939—Jan. 1-15 Country banks: 1939—Dec. 1-15 Dec. 16-31 1940—Jan. 1-15 1939—Jan. Ratio of excess to re quired 100% 99 » 110 ” 246.3 174.8 71.5 41 * 167.1 172.8 175.7 97.6 98.2 97.8 69.5 74.6 77.9 71 * 76 ” 80 » 1-15 148.1 96.5 51.6 53 * In the five weeks ended January 24 member bank reserves increased $19, 600,000, reflecting a combination of factors. The volume of currency re turned from circulation amounted to $25,000,000, approximating that re ported a year earlier. Payments from the Treasurer’s deposits at this bank, including an advance by the Federal Deposit Insurance Corporation on the assets of a bank which had its deposit liabilities assumed by other institutions, exceeded local government receipts by more than $19,000,000. On the other Page Six Federal Reserve Bank of Philadelphia (Dollar figures in millions) Jan. 24, 1940 Changes in— Five weeks Reporting member (000,000’s omitted) Bills discounted............. $ 0.7 Bills bought..................... 0.0 Industrial advances... . ' 3.1 U. S. securities............... 203.2 - $0.2 - $0.5 0.0 - 0.0 + 0.0 + 0.1 - 10.6 - 2.7 Total............................. Note circulation............. Member bank deposits. U. S. general account. . Foreign bank deposits.. Other deposits................ Total reserves................. Reserve ratio................... -$10.8 - 10.5 + 19.6 - 33.2 + 0.8 4- 3.6 + 4.6 + 1.9% $207.0 342.2 608.0 42.7 40.5 17.0 863.5 82.2% Jan. 24, 1940 bdolis One year Five wks.* Assets Commercial loans................... S 191 -$ Open market paper................ 23 Loans to brokers, etc............. 23 Other loans to carry seeur... 32 Loans on real estate............... 50 Loans to banks........................ 1 Other loans............................... 92 + - S3.1 + 28.5 + 196.7 + 4.3 + 23.9 + 10.1 + 264.0 + 6.0% hand, funds were taken from the mar ket by a shrinkage in reserve bank float, which expanded during the holi day delays in the mails, by a loss of $7,700,000 in interdistrict commercial transactions, and by some absorption of funds in miscellaneous deposits at this bank. Advances for working capital to in dustries by the Federal Reserve Bank of Philadelphia increased slightly, while borrowings of member banks de clined somewhat. The principal change in earning assets of this bank was a decrease of $10,600,000 in hold ings of governments to $203,200,000. This reflected a reduction in the pro portionate share of this bank in System holdings of securities at the beginning of the year, when the usual quarterly reallocation among the reserve banks was made, and sales from the System investment portfolio over part of the period. Deposits at reporting member banks increased seasonally over the turn of the year, establishing a new record on January 3. For the five weeks to Jan uary 24 the statements show a net gain in deposits of approximately $27,000, 000, after adjustments for the figures of a discontinued bank. This increase was due largely to an increased vol ume of funds held for correspondent banks. Outstanding credit of these banks on a comparable basis increased $21,000,- Changes in— 6 2 2 0 0 0 i One yr * + $15 0 + 4 0 + 2 1 5 Total loans........................... S 412 -$ 9 + $15 Government securities.......... $ 372 +$15 + $12 Obligations fully guaranteed. 101 + 3 + 14 Other securities....................... 284 + 12 + 21 Total investments.............. $ 757 + $30 + $47 Total loans & investments. $1,169 + $21 + $62 Reserve with F. R. Bank. . . 448 + » Cash in vault........................... 19 - 5 Balances with other banks.. 227 + i Other assets—net................... 88 - 1 Liabilities Demand deposits, adjusted.. S 964 + $ 4 Time deposits........................... 261 + 1 U. S. Government deposits. . 54 0 Interbank deposits.................. 441 + 22 Borrowings................................ Other liabilities........................ 17 - 1 Capital account....................... 214 - 1 * Adjusted for changes in reporting banks to preserve comparability. 000 in the period, owing to substantial purchases of securities. The invest ment in direct government issues in creased $15,000,000 to a new high of $372,000,000; holdings of United States bonds expanded $19,000,000 while Treasury notes declined $4,000, 000, partly as a result of exchange transactions. Other changes in the investment portfolio comprised in creases of $3,000,000 in guaranteed obligations and $12,000,000 in corpo rate and municipal securities. Loans of the reporting banks were decreased $9,000,000 in the five weeks. Open market paper and accommodation extended to brokers and dealers de clined somewhat, but the largest reduc tion was $6,000,000 in commercial loans as the seasonal need for funds declined. While the volume of com mercial loans at present is about 10 per cent larger than a year ago, the rate of increase since the spring of last year has lagged considerably behind the ex pansion in business activity. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Changes in weeks ended— Jan. 3 Jan. 10 Jan. 17 Jan. 24 -14.7 + 10.1 + 8.0 + 2.0 + 6.3 + 4.7 - 1.0 + 1.8 + 3.8 - 1.3 -20.5 + 1.1 - 5.4 + 3.4 Sources of funds: Reserve bank credit extended in district........ Commercial transfers (chiefly interdistrict). . Dec. 27 + 13.0 + 0.6 + 6.2 + 0.1 - 9.3 +23.4 - 0.9 - 0 2 + 3.4 + 13.0 Changes in five weeks -13.9 - 7.7 + 19.4 -29.0 Uses of funds: Member bank reserve deposits.......................... “Other deposits” at reserve bank..................... Other Federal Reserve accounts....................... - 6.1 + 11.0 - 0.3 + 0.0 +n.T -26.5 - 0.2 - 0.0 -25.1 + 19.6 + 3.6 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes TOTAL Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weighted Dec. change from Dec. change from 1939 1939 proportionately.) index Nov. Dec. index Nov. Dec. 1939 1938 1939 1938 ■MB All manufacturing . 91 Iron, steel and products . 85 Nonferrous metal prods . 123 Transportation equip.. . . 05 Textiles and clothing.... 95 Textiles........................... 90 Clothing.......................... 115 Food products.................... 107 Stone, clay and glass.... 82 Lumber products.............. 65 Chemicals and products . 95 Leather and products___ 89 Paper and printing........... 101 Printing........................... 92 EXCESS REQUIRED; ’32 '33 ’34 ’35 36 ’37 '38 ’39 *0 '41 Cigars and tobacco... . Rubber tires, goods. . . Musical instruments . . CURRENCY DEMAND PHILADELPHIA FEDERAL RESERVE DISTRICT Changes from Jan. 1,1932 63 86 62 -0 -0 +1 -4 -5 +i -2 -2 -0 +0 +0 -0 + 25 + 24 - 1 _ 2 + 2 + 3 + 16 +6 0 + 19 + 16 + 1 + 6 +0 + 2 -5 + 7 -0 + 9 * Figures from 2,442 plants. MILLIONS + 14 +2 + 29 90 112 156 77 87 83 106 114 85 62 108 86 109 101 +0 +2 +2 +2 -6 -7 +2 +1 -3 -2 56 98 71 +31 + 57 + 41 + 46 - 0 - 3 + 12 + 7 +24 +32 +i +22 +4 + 1 +3 +10 +5 + 5 -1 - 6 +2 +ii -0 + 17 Employeehourst Dec. 1939— per cent change from Nov. Dec. 1939 1938 +i +2 +1 +5 -4 —5 +5 +1 -3 -2 +0 +7 +2 +4 -1 +1 -1 +35 + 54 +43 + 50 + 2 + 0 + 10 + 6 +31 + 22 + 28 + 4 + 9 + 2 - 6 +n + 14 t Figures from 2,191 plants. General Index Numbers + 160 1940 Covering twelve branches of trade and industry Employment (Indexes are percentages of the Per cent 1932 average taken as 100. In dividual indexes are combined Dec. change from proportionately into general in 1939 index Nov. Dec. dex number.) 1939 1938 General index(weighted)......... Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing .. . 1938 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV DEC Retail trade................................... Wholesale trade........................... Dyeing and cleaning................... 121 142 68 111 49 105 133 96 142 118 102 100 94 + 3 - 0 - 1 - 1 - 9 - 6 + i - 0 + 25 - 0 - 2 + 3 - 1 + 8 + 14 - 0 + s -10 + 16 ~ 1 + 2 + 4 + 3 - 8 + 3 - 3 Payrolls Per cent Dec. change from 1939 index Nov. Dec. 1939 1938 171 222 46 216 69 207 160 109 161 123 118 128 109 - 0 + 0 -37 -11 -11 - 9 + 0 + 0 + 23 + 0 - 1 + 0 - 9 + 19 +31 -37 + 9 - 5 +36 + 9 + 5 + 5 + 6 — 5 + 4 - 4 Percentage change—December 1939 from December 1938 City areas* Manufa cturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre. . . . Wilmington.......... York....................... Wage payments Building permits (value) Debits + 23 + 18 + 18 +42 + 8 + 7 + 8 0 + 18 + 10 + 7 + 13 + 17 +37 +35 + 50 +78 + 10 + 15 + 13 + 6 + 28 + 14 + 10 + 19 +23 + 59 + 187 - 54 - 11 - 72 + 17 - 89 + 110 + 72 - 84 +330 + ii +447 + 12 5 — 4 + 17 — 2 + 7 + 6 — 1 + i 4 + 8 + 11 + 18 Retail trade sales +n + 14 + 9 +21 + 7 + 8 + 9 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT + 18 + 5 PAYROLLS + 20 + 8 December 1939 from November 1939 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... York....................... + + "f + + — — + + — + — 1 1 1 3 0 1 1 3 0 0 2 1 1 ' + + + + + + + - 0 2 6 1 1 0 1 1 2 2 3 3 4 - 77 - 83 - 85 - 69 - 63 - 52 - 96 + 228 + 23 + 144 - 59 + 60 + 65 + 9 + 11 + 21 + 9 + 10 + 28 + 12 + 19 + 36 + 26 — 4 + 100 + 22 +73 + 64 + 67 + 71 + 72 + 36 + 65 + 58 + 64 + 54 + 80 + 76 EMPLOYMENT 1934 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRAD Index numbers of individual lines of trade and PHILADELPHIA FEDERAL RESE RVE DISTRIC T UJJ 25»«"K>0 TOTAL manufactures SALES STOCKS / Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted indexes allow for the usual Adjusted for seasonal variation Unadjusted indexes reflect merely the actual change which may or may not Dec. Oct Nov Dec be typical. 1938 1939 1939 1939 Not adjusted Per cent ch ange Dec. 1939 from 1939 from Month Year 1938 ago ago DEPARTS ENT SALES Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ STOR ES Dec. Oct Nov Dec. 1938 1939 1939 1939 60 ‘.•V.. *V 80 r 70 76 99 r 93 r 89 79 69 74 98 81 97 77 r 51 108r 62 105 78 53 109 67 103 88 88p 78 76p 81 84p 102 106 93 98 107 106p + + + + - 0 3 4 4 6 1 + 11 + 9 + 11 + 7 + 5 + 19 + 7 + 7 + 7 + i + 3 + 13 131r 127 127 151r 111 140 93 80 83 111 91 121 103 95 89 115 90 130 STOCKS 145p 139p 142p 161* 117 167p men’s ap =>AREL STO TES Stocks of goods 80 77p — 3 + 54 — 5 + 108 109 + l 466 65p — i + 106 103p — 4 0 ____ / 1 96 115 117 ViV 94p / SALES Rate of stock turnover 4.11 4.51 Wholesale trade VOMENS A ’PAREL . ST 5RES Sales - 2* + 11* -30* 16* + 8* + 1* —23* + 2* + 18* + 32* - 2* + 1* - 5* + 29* +31* + — 14* + 30* Boots and shoes.......................... Drugs............................................ Groceries...................................... Hardware..................................... + 10* 4- 1* + 32* + 1* STOCKS Electrical supplies...................... Groceries...................................... Jewelry.......................................... Paper............................................. + 81 + 72 + 66 + 51 + 37 + 29 + 9 + 156 + 56 _ 6 + 10 + 22 + 30 2 + 9 58 + 65 + 12 + 4* + 11 + 170 + 15 + 10 + 19 + 2 _ 16 + 7 + 39 + ^SALES 40 Pig iron.................................................. Steel....................................................... Iron castings........................................ Steel castings........................................ Electrical apparatus........................... Motor vehicles..................................... Automobile parts and bodies........... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... W oolen and worsteds......................... Cotton products.................................. Carpets and rugs................................. Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and products........................ 42 62 46 77 75 19 74 14 264 87 62 43 115 109 138 43 35 26 71 93 64 127 87 23 91 28 417 91 65 57 r 126 105 147 65 57 29 80 77 102 106 67 76 144 116 96 r 103 20 25 96 81 33r 36 413 411 92r 82 65 68 56r 52 126 150 103 106 155 150 69 68 58 57 29 29 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................................ 89 31 52 95 68 93 176 84 79 79 144 103 103 102 53 100 79 91 151 99 91 82 174 138 97 99 112 84 58 60p 93 104 81 80 91 94 144 148 100 91p 105 110 83 86 170 166p 146 145 i * Computed from data unadjusted for seasonal variation. - 1 - 1 + i _ 4* + 2 -25 + 3 + 13 - 0 + 4 + 2 - 9 + 4 + 4 + 10 16 - 2 + 40 - 1 + +55 +41 + 18 +44 +25 +21 +38 +22 +45 + 9 +33 +33 +82 + 18 +23 + 19 +43 + 10 42 58 43 74 73 15 73 14 277 89 58 46 109 106 136 36 33 26 bll bl4 - 8 - 4 96 20 53 68 68 94 150 92 78 76 143 + 13 + 0 - 8 + 28 + 14 + 9 + 35 + 8 p—Preliminary. 100 70 93 68 121 95 21 86 26 401 93 71 59 r 144 115 160 73 58 30 88 108 86 70 123 81 91 163 103 92 88 175 135 81 98 59 134 102 r 18 88 31 r 413 93 r 71 59 r 144 117 157 r 68 57 29 76 100 70 111 100 20 79 36 432 84 63 56 141 103 148 56 55 29 108 73 64 111 81 92 136 97 105 85 171 141 SHOE STORES 107 55 63p 75 81 95 125 99p 109 84 165p 141 SALES j/W ‘‘* /*.V/N* 60 4 A* STOCKS CREDIT STORES L/’-\ STOCKS + A TXJ A. r—Revised. 1936 / V SALES 193 5 $ .\PV 12* 9* 22* 12* 14* 1* + 24* Output of manufactures Page Eight *■■' 4-13* + + + + + - 4 + 4 +32 -19 + 8 +23 -16 + 10 - 1 -10 + 4 - 7 + 19 + 3 - 3 *, A Stocks of goods _ 7* - 6* —23* - 1* — 3* -16* - 0* A / 1937 1938 1939
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