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m SB yt < r _ THE BUSINESS REVIE THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT JANUARY i, i94o FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Following a rapid rise after the out break of the European war industrial activity continued at a high level in November and the first half of Decem ber. There was a considerable in crease in distribution of commodities to consumers while prices of basic commodities, which had been steady during November, rose somewhat in the first two weeks of December. Production. The Board’s seasonally adjusted index of industrial produc tion advanced from 121 to 124 per cent in November, reflecting sustained ac tivity at a period of the year when a decline is usual. Production of dura ble goods, which had advanced rapidly for several months, showed a further expansion. Record production of steel ingots continued in November and was followed by a less than seasonal de cline in the first half of December. Automobile production increased in November, notwithstanding the fact that plants of one important company remained closed pending settlement of an industrial dispute. After this was settled at the end of November assem blies rose sharply. Retail sales of new automobiles were in large volume in November and at the end of the month dealers’ stocks of new cars apparently were smaller than at the correspond ing time in other recent years. Lum ber production declined less than sea sonally in November but plate glass production, which had reached a high level in October, showed a reduction. Output of nondurable goods con tinued at a high level in November. At cotton and woolen mills, activity in creased somewhat further and was close to the record levels reached three years ago. Rayon production ad vanced to new high levels but at silk mills there was a sharp decline follow ing substantial increases earlier this fall. Output of flour and sugar de clined further from the levels reached in September while changes in activ ity at shoe factories and meat-packing establishments were largely seasonal in character. Coal production in November de clined somewhat from the high level reached in October. Output of crude petroleum increased further and iron ore shipments continued in exception ally large volume until the Great Lakes’ INDUSTRIAL PRODUCTION FREIGHT-OAR LOADINGS shipping season closed in the latter part of the month. Value of construction contracts, as reported by the F. W. Dodge Corpora tion, increased in November following a sharp decline in October. In both months changes in total awards re flected principally fluctuations in the volume of contracts for public con struction. Private residential awards declined somewhat less than season ally in November, while awards for other private projects showed little change. Contracts for private work, both residential and nonresidential, Were larger than a year ago, while MONEY RATES IN NEW YORK CITY For weeks ending January 6, 1934, to Decem ber 16, 1939. DEPARTMENT STORE SALES AND STOCKS «"«NT . PERCENT 110 100 too SALES , t' 90 - \C AT' nn \ ar J '''vA / 90 STOCK 70 ' " \_v 60 50 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 Novem ber 1939. Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 aver age = 100. By months, January 1934 to Novem ber 1939. 1935 1936 1937 1928 1939 Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average =100. By months, January 1934 to November 1939. Page One those for public projects were below the high level of that time when con tracts under the Public Works Ad ministration program were being awarded in large volume. Employment. Factory employment and payrolls continued to increase in November, reflecting chiefly further sharp advances in industries produc ing steel, machinery, and other durable goods. Distribution. In November distribu tion of commodities to consumers in creased considerably. The Board’s seasonally adjusted index of depart ment store sales, which had been around 90 in the three preceding months, advanced to 94, a level about the same as at the peak in 1937 when prices of commodities sold at depart ment stores were generally somewhat higher than at present. Freight-car loadings showed less than the usual seasonal decrease from October to November and the Board’s adjusted index increased from 80 to 82, which was only slightly under the re covery peak reached in the early part of 1937. Shipments of ore and mis cellaneous freight declined less than is usual in November, while loadings of coal decreased more than seasonally from the relatively high October level. Commodity prices. Prices of both in dustrial materials and foodstuffs ad vanced from the latter part of Novem ber to the middle of December. Wheat and silk prices rose considerably and there were smaller increases in cotton and hides. Prices of steel scrap and nonferrous metals, on the other hand, showed declines. Government security market. Prices of United States Treasury bonds ad vanced sharply during the last half of November to a level not far below the all-time high point of last June and remained steady during the first half of December. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities rose substantially during November and the first half of December, reflecting largely purchases of new United States Government se curities. Commercial loans, which had been increasing since August, contin ued to rise until the third week in No vember. Deposits increased further. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District improved further in November and the seasonally ad justed index advanced for the sixth consecutive month to the highest levels since the summer of 1937. More than half of the sharp gain in the six-month period occurred after the outbreak of war. Practically all lines have shown substantial improvement but the great est gains have been in the output of durable manufactured goods. Coal mining and the production of crude oil and electric power have been well sustained. Building activity is begin ning to decline, following the sharp expansion in the summer and early fall. Employment in twelve branches of trade and industry in Pennsylvania ad vanced further from October to No vember and was well above a year ago. Wage disbursements have been sus tained at unusually high levels. In the latest month increases were reported in manufacturing, petroleum produc tion, public utilities, and retail trade. Preliminary reports for December in dicate further advances in manufactur ing, contrary to seasonal expectations. Retail trade sales have expanded sharply and early reports indicate that holiday business this year will be sub stantially larger than in 1938. Whole sale trade has also been well maintained at levels above last year. Inventories in trade channels have increased some what but the advances have been smaller than the expansion in sales. Commodity prices showed strength in the early part of December, follow ing a decline from the peaks reached soon after the outbreak of war. Current industrial conditions gener ally appear favorable. Purchasing pol icies have been pursued along cau tious lines, despite the sharp upturn in industrial activity and the unset tling influences of the war abroad. Backlogs of orders continue large, and in many lines, particularly durable manufactured goods, appear adequate to sustain operations well into 1940. Consumer incomes have increased sharply and may be a strong stimulant to domestic trade in the coming months. The volume of foreign buying has not been as widespread as had been ex- MANUFACTURING ACTIVITY RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT SALES PRODUCTION EMPLOYMENT STOCKS PAYROLLS 1935 Page Two 1936 1937 1938 1939 1940 1933 1934 1935 1936 1937 1938 1939 pected but may increase if the war is Business Indicators prolonged. The commercial use of Philadelphia Federal Reserve District bank credit has expanded somewhat, but the volume of surplus funds avail Index numbers: percentages of the 1923-1925 average as 100 able to commerce, industry and agri Adjusted for seasonal variation Not adjusted Adjusted indexes allow for the usual culture continues unusually large. seasonal change in activity. Per cent change Manufacturing. The demand for fac Unadjusted indexes reflect merely the 1939 tory products has slackened further, actual change which may or may not Nov. Sept. Oct. Nov, Nov. 1939 from Nov Sept. Oct. Nov. from be typical. 1938 1939 1939 1939 1938 1939 1939 1939 following a period of active buying in 11 Month Year mos. September and October. As is usual 1938 ago ago at this time of year, many concerns Industrial production .... 74 84 90 92p + 2 + 24 +17 76 r 86 94 93p Manufacturing—total............... are deferring purchases until after the 88 72 81 90p + 2 + 26 +18 73 83 92 92 p Durable goods........................ 62 78 93 98p + 6 + 57 +32 year-end inventory period. The vol Consumers' goods.................. 80 87 90 89p - 0 + ii +12 Metal products...................... 62 73 91r 99 + 8 + 59 ume of both inquiries and sales was +32 61 73 94 r 98 Textile products.................... 72 80 85 85p - 0 + 18 +28 75 82 89 89p Transportation equipment. smaller in the month, especially in the 63 89 100 101 + 1 + 60 +40 60 84 95 97 Food products........................ 77 83 78 79p + 2 + 3 + 3 77 87 82 80p case of textiles and building materials. Tobacco and products......... 98 100 101 94 - 7 - 4 + 3 117 116 124 112 Building materials................ 35 41 46 r 47 + 3 + 34 But compared with 1938, sales con +21 35 44 49 r 47 Chemicals and products.... 113 128 131 137p + 4 + 21 +11 114 127 133 137p Leather and products........... tinue substantially larger, the sharpest 113 115 124 127p + 2 + 12 + 6 107 126 132 121p Paper and printing............... 84 89 89 89 + 0 + 6 + 2 84 88 90 90 gains being in iron and steel, leather Coal mining................................. 59 r 71 61 63p + 3 + 7 + 14 61r 72 76 66p Anthracite............................... 58 r 71 58 60p + 3 + 3 +13 products, and building materials. 60 r 72 74 62p Bituminous............................. 75 85 86 63 + 1 + 36 +18 69 r 76 91 95 Crude oil...................................... A decline in the amount of unfilled 419 432 460 482 + 5 + 15 - 3 406 432 460 468 Electric power orders has been due largely to high Output..................................... 244 268 273 272 - 0 + 12 +n 253 262 281 283 Sales, total!............................ 240 265 271 276 + 2 + 15 +n 247 263 271 284 operating rates and heavy shipments; Sales to industries!............... 162 180 198 194 - 2 + 19 +13 166 191 192 198 orders continue larger than at the same time last year when activity was ex Employment and wages—Pa. Factory—Wage earners§................ + 2* + 15* + 8* 79 84 90 91 Payrolls §........................................ panding. Backlogs at iron and steel + 1* + 34* +20* 67 75 89 90 Man-hours (1927-28=100)___ + 2* + 38* +24* 64 72 86 88 mills have been fairly well sustained, General (1932 =100) Employment §............................... +1* + 10* + 3* 107 109 116 117 while those at textile plants declined Payrolls §........................................ + 0* + 25* +13* 137 148 171 171 noticeably. Building and real estate Inventories of finished steel and tex Contracts awarded!—total........... 62 79 77 65 -15 + 6 +25 77 78 65 62 Residential!.................................. tile products at manufacturing estab 39 67 67 63 - 7 + 62 +75 40 62 66 65 Nonresidential!............................ 65 46 41 43 + 6 - 33 -23 69 45 40 46 lishments in the Third District were Public works and utilities!. . . . 94 212 206 95 -54 + 1 +52 105 195 200 106 Permits for building—17 cities.. . 17 20 22 33 +48 +100 +74 15 18 23 31 somewhat lower in late November and Real estate deeds—Philadelphia! 47 55 52 54 + 4 + 18 + 7 46 47 50 53 Writs for Sheriff sales—Phila.. . . early December than both a month and 328 244 313 264 -16 - 19 -19 367 283 156 296 a year earlier, while stocks of raw ma Distribution Retail trade —sales................... terials in nearly all reporting lines are 76 r 88p +n + 16 + 7 89 86 93 103p stocks................ 77 r 80p + 2 + 4 86 88 90p 81 about the same as in October and the Wholesale trade—sales.................. - 0* + 17* +10* . . stocks................ + 1* + 5* latter part of last year. Prices of man Life insurance sales......................... 91 90 -11 - 1 +11 96 73 92 95 New passenger auto, registrations ufactured goods are generally about + 20* + 17* +45* 96 66 94 113 Hotels—Occupancy (1934=100) - 9* - 2* - 2* 121 110 128 118p the same as a month ago but are higher Income, total (1934 =100) — 2* - 6* - 4* 138 103 129 128p Freight-car loadings—total............. + 8 + 42 +22 59 79 84 83 than in 1938. Merchandise and miscellaneous. + 9 + 36 +20 59 76 80 80 Coal................................ - 2 + 28 Employment and payrolls in Penn +17 79 87 82 64 sylvania factories increased nearly 2 Business liquidations Number............................. +25* - 18* - 1* 99 per cent from October to November 71 64 81 Amount of liabilities___ -32* - 34* - 8* 31 32 30 20 when employment customarily shows Payment of accounts little change and payrolls decline. Pre Check payments................... + 0 + 6 + 9 86 87 87 91 Rate of collections (actual) liminary reports indicate further ad Retail trade........................ + 8 + 8 33 30 33 36 vances in December, the sharpest gains being in the durable goods industries. Prices—United States Wholesale (1926=100). 79 79 79 - o* + 2* - 2* 77 Wage disbursements at textile mills Farm products............... + 0* - 1* — 5* 68 69 67 67 Foods............................... - 1* — 2* - 5* 74 also appear to have increased further 75 73 72 Other commodities.... + 0* + 3* - 1* 81 82 84 84 Retail food........................ despite the usual contraction at this - 1* + 0* - 3* 78 79 78 78 Philadelphia................... - 2* + 1* — 2* 78 80 80 78 time of year. Scranton.......................... + 0* + 4* - i* 72 77 75 75 Estimates show that nearly 925,000 % change from wage earners were employed in Penn Nov. Aug. Sept. Oct. Nov. (In millions of dollars) 1938 1939 1939 1939 Month Year 1939 sylvania factories in November, the ago ago largest number in the past two years and credit and nearly 128,000 more than at the Banking Reserve Bank Federal Bills discounted.............................. $ 1.3 low point of 1939 last May. Most of $ 0.3 $ 0.3 $ 0.4 S 0.4 -69 0 Other bills and securities............. 226 209 236 241 231 - 4 +2 the gain has occurred since August, ap Member bank reserves................. 378 516 540 572 598 4* 5 +58 Reserve ratio (per cent)............... 72.8 79.5 77.6 77.3 79.6 + 3 + 9 proximately 91,000 workers having Reporting member banks Loans................................................. $ 411 been taken on in the first three months $ 418 $ 415 $ 422 $ 426 + 4 + 1 Investments..................................... 721 738 737 729 735 + 1 +2 of the war or nearly three times the Deposits (a)..................................... 1425 1591 1617 1660 1696 +19 + 2 Bankers’ acceptances outstanding. 8.8 8.6 11.2 9.0 10.2 +13 - 9 number usually added to the rolls in * Computed from data unadjusted for seasonal variation, this period. Weekly payrolls in No p—Preliminary. r—Revised, t Not included in production index. (a) Less cash items in process of collection. vember are estimated to have exceeded T 3-month moving daily average centered at 3rd month. § Revised. See footnotes page 7. Page Three ACTIVITY IN THE STEEL INDUSTRY METAL AND TEXTILE ACTIVITY EMPLOYEE-HOURS EMPLOYEE-HOURS PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PHILADELPHIA FEDERAL RESERVE DISTRICT FOUNDRIES IRON AND STEEL PRODUCTS ,<* STEEL WORKS AND ROLLING MILLS NON-FERROUS I METALS MACHINERY AND PARTS TEXTILES 1935 1936 1937 1938 $23,000,000 a week or nearly $6,000, 000 more than in May. This expan sion was several times the usual sea sonal advance. More than $4,000,000 of the increase occurred since August. In November the number of work ers and the volume of wage payments increased substantially at iron and steel plants, particularly in such basic lines as steel works and rolling mills, forg ings, foundries, electrical apparatus, and machinery and tools. Gains were also reported in nonferrous metal prod ucts and transportation equipment, especially locomotives and cars and railroad repair shops. The levels reached in October were maintained in such consumers’ goods as textiles and foods. The only signifi cant declines were at clothing mills, particularly those turning out men’s apparel. In Delaware factories, employment showed practically no change from Oc tober to November and payrolls in creased about 1 per cent. At factories in Southern New Jersey employment and payrolls increased about 4 per cent from October to November and were 27 and 46 per cent respectively above November 1938. Manufacturing activity in Novem ber was sustained contrary to the usual seasonal tendency, so that the adjusted index advanced 2 per cent to the high est level since the summer of 1937. The output of durable goods increased 6 per cent from October, while consum ers’ goods were virtually unchanged. From September to November manu facturing activity increased 11 per cent more than usual and from the low point of the year, reached last May, the gain was 21 per cent. The output of durable goods from May to No vember expanded 43 per cent, of which Page Four 1939 1940 1935 1936 1937 1936 1939 33 per cent occurred after August. In several days. Anthracite shipments consumers’ goods the advance in the declined about 29 per cent from Octo six months was only 8 per cent, and ber to November and were the smallest from August to November production since midsummer. In the first eleven declined 3 per cent when due allow months of 1939, however, both produc tion and shipments were substantially ance is made for seasonal change. The principal increases in Novem greater than in the same period last ber were in the output of metal prod year. Purchases of Pennsylvania bitumi ucts, particularly pig iron and steel castings. Most other lines also re nous coal by manufacturing plants and ported improvement, the exceptions other industrial consumers have slack being textiles, where there was prac ened further in the past several weeks, tically no change, and tobacco prod following heavy buying earlier in the ucts. Compared with November of fall. Current demand, however, is de 1938, when manufacturing activity was cidedly more active than a year ago, approaching the peak for that year, reflecting improved industrial condi the output of factory products showed tions. The output of collieries has in a gain of 26 per cent, reflecting an creased more than usual every month expansion of 57 per cent in durable since the shutdowns last spring and goods and 11 per cent in consumers’ in November was 36 per cent above goods. In the first eleven months of November 1938. Production early in 1939 the output of manufactured prod December slackened seasonally. In the ucts averaged 18 per cent more than in first eleven months of 1939 output was the corresponding period of the year 18 per cent and shipments 14 per cent greater than a year earlier. before. Production of by-product coke de The output of electric power from October to November increased about clined slightly more than seasonally in seasonally. Total sales advanced 2 per November, following unusually sharp cent more than usual and sales to in increases for five consecutive months. dustry increased 2 per cent less than Output was still 30 per cent more than in November 1938 and the largest for was to be expected. Coal and other fuels. Sales of anthra the month since 1929. Activity at oil cite at the mines decreased in Novem refineries expanded considerably from ber for the second successive month October to November and was well and continued quiet in the early part above the level of a year earlier. In of December. Some improvement was the first eleven months of 1939 pro reported after the middle of the month, duction of by-product coke was 34 per but demand is somewhat less active cent and gas and fuel oils 9 per cent greater than in the same period last than a year ago. Production declined less than season year. ally in November from the high levels Building. Activity in the construc of the preceding two months but was tion industry in this district declined sharply curtailed in the first half of De more than seasonally from October to cember, when a number of collieries November. But compared with a year suspended operations completely for ago, operations continue larger, owing WHOLESALE PRICES VALUE OF BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT 7 INDUSTRIAL STAPLES INDUSTRIAL 813 COMMODITIES RESIDENTIAL 7 AGRICULTURAL STAPLES I 1935 1936 1937 1939 to a greater volume of residential building. New contract awards in November approximated $12,500,000, or 24 per cent less than in the preceding month and 16 per cent below the 1938 total. The value of contracts let for apart ments and hotels, factories, and edu cational buildings increased sharply in the month, but awards for other classes of construction were considerably smaller than in October, the most pro nounced decline being reported in pub lic works and utilities. Contracts for residential and commercial buildings were larger than in November of last year, while awards for other types were smaller. Building contracts Philadelphia Federal Reserve District Per cent change Nov. 1939 1939 From (000’s from omitted) month 11 mos. ago 1938 Residential...................... $ 6,790 Apts, and hotels......... 2,393 Family houses............. 4,397 Nonresidential................ 3,794 Commercial................. 1,130 Factories...................... 964 Educational................. 1,239 All other....................... 461 - 0 +235 - 28 - 18 - 54 + 33 +269 - 58 + 75 +206 + 53 - 23 + 17 + 72 - 71 - 26 Total buildings. . . . $10,584 Public works and utilities................................. 1,967 - Grand total............. $12,551 7 + 16 - 62 + 52 - 24 + 25 Source: F. W. Dodge Corporation. In the first eleven months of 1939 aggregate contract awards were the largest for any corresponding period since 1930. The total of over $183, 000,000 was 25 per cent greater than a year earlier, reflecting principally gains in residential contracts. Wholesale prices of building mate rials advanced to a new two-year high about the middle of December, owing chiefly to increases in quotations for 1937 lumber, brick, and certain paint ma terials. Distribution, trade and service. Re tail trade sales have expanded more than usual since the temporary slack ening in October. The dollar volume of business at reporting stores in creased 11 per cent in November, when there is customarily little change, so that the seasonally adjusted index ad vanced to the highest level since 1937. Preliminary indications are that the volume of sales in the Christmas buy ing season was substantially larger than usual and considerably greater than in 1938, when business was stimu lated by a rapid improvement in gen eral industrial conditions. The sharpest gain from October to November was an expansion of 19 per cent, on a seasonally adjusted basis, at department stores in Philadelphia. Sales by shoe stores advanced 15 per cent more than was to be expected, and credit stores reported an improve ment of 11 per cent from October levels. Total dollar retail sales by report ing stores in November were 16 per cent above November 1938, reflecting advances ranging from 7 per cent at women’s specialty shops to 22 per cent at men’s apparel stores and establish ments selling such durable consumers' goods as furniture and household equipment. In the first eleven months of the year total sales averaged 7 per cent higher than in the corresponding period of 1938. Inventories at retail establishments increased about 2 per cent more than seasonally from October to November. Compared with November of 1938 stocks on hand were 4 per cent larger. The small increases in inventories re flect the cautious buying policy which 1933 193 9 1940 has been followed for the past two years or more by retail purchasing agents. In the first eleven months of this year the rate of stock turnover has been higher than in 1938. Sales at wholesale declined fraction ally further from October to Novem ber, the sharpest contraction being 19 per cent reported by establishments distributing footwear. The only sub stantial increase in the month was in sales of electrical supplies, which are an especially prominent feature in Christmas trade. Compared with November 1938, dol lar sales at wholesale were 17 per cent higher, reflecting a sharp expansion in sales of electrical supplies, jewelry, hardware, and paper. For the first eleven months of 1939 wholesale trade sales averaged 10 per cent above the corresponding period in the preceding year. Inventories at wholesale establish ments also increased slightly in No vember and were about 5 per cent above November 1938. The expansion in stocks in most cases was substan tially less than the increase in the vol ume of business. Railway freight shipments in the Al legheny District declined less than sea sonally from October to November. The movement of grain and coke in creased more than is customary in the period, and loadings of ore declined much less than was to be expected, owing to the sustained high rate of ac tivity in the steel industry. Shipments of less-than-carload lots increased in stead of showing the customary decline, and shipments of miscellaneous mer chandise were reduced less than was to be expected. Shipments originating in the Phila delphia area expanded slightly from Page Five Hotel business Philadelphia Federal Reserve District Capacity................................. Room occupancy................ Per cent of capacity used: Nov. 1939................ 51.4 Oct. 1939.............. 56 2 Nov. 1938................ 51.9 Revenue from: Guest rooms............. Food............................ Other sources.................. . Total revenue... Nov. per cent change from 1939 from Month Year ago ago mos. 1938 — 0 - 9 -2 -2 -12 + 5 -hi -8 —5 -5 —4 -4 -4 - 2 -6 -4 The large vol ume of surplus funds held by member banks in this district has shown some decline from the record levels reached in November. Deposits at reporting banks have expanded recently, and loans are now at the highest point since the spring of 1938. The volume of in vestments has been reduced somewhat and is about the same as a year ago. In the first half of December the reserves of member banks averaged $585,600,000 or $215,900,000 more than in the corresponding period of 1938. Excess reserves were $278,600, 000, equal to 91 per cent of require ments. Two months earlier excess re serves and balances held with corre spondents totaled nearly twice required reserves at Philadelphia member banks and almost three times at other banks in this district. Banking conditions. Member bank reserves (Dollar figures in millions) Held Re quired Ex cess Philadelphia banks: 1939—Nov. 1-15 $429.6 $210.0 *219.6 Nov. 16-30 422.6 210.2 212.4 Dec. 1-15 418.5 209.4 209.1 1938—Dec. 1-15 227.9 171.4 56.5 Country banks: 1939—Nov. 1-15 173.2 97.2 76.0 Nov. 16-30 169.8 97.0 72.8 Deo. 1-15 167.1 97.6 69.5 1938—Dec. 1-15 141.8 94.7 47.1 Ratio of excess to re quired Page Six *4 ■ © + 11 0.9 0 3.1 213.8 Changes in— Four weeks OOO CO Dec. 20, 1939 Bills discounted.......... $ Industrial advances. . $217.8 Note circulation......... 352.7 Member bank deposits 588.4 U. S. general account. 75.9 Foreign bank deposits 39.7 13.4 Total reserves............. 858.9 80.3% - $0.5 - 0.1 - 0.0 - 9.0 —$8.3 +12.8 - 2.8 +22.9 + 1.5 + 0.5 +30.9 + 0.3% - $9.6 + 28.1 +235.3 + 13.2 + 20.5 + 6.4 +298.1 + 7.1% Dec. Changes in— 20, Four 1939 weeks One year Reporting member banks (000,000’s omitted) One year 000,000 in currency demand, which was larger than a year earlier. Reserves were sustained by a gain of over $26, 000,000 in transactions with other dis tricts and an expansion of $13,700,000 in reserve bank credit extended locally. Treasury receipts were over $19, 000,000 larger than disbursements in this district, owing principally to pay ments of quarterly installments on the income tax. Government receipts also were sharply increased by the sale of 2 per cent bonds of 1948-50. The amount of these securities allotted in this district totaled about $31,200,000, of which over $25,000,000 was paid for in cash, while the balance was by credit at depositary banks. The increase in reserve bank credit in this district was almost entirely in float, arising from holiday delays in the mails. Discounts for members in creased very little and industrial ad vances declined slightly. The partici pation of the Federal Reserve Bank in System holdings of governments de creased $8,700,000 to $213,800,000, re flecting unreplaced maturities of Treas ury bills from the Investment Account and sales of bonds in the market. Outstanding credit of the reporting banks declined $1,000,000 in the four weeks ended December 20 to $1,165, 000,000. Investments decreased $8, 000,000, while loans increased $7,000, 000. The principal changes in loans were increases of $4,000,000 each in commercial accommodation and in bor Assets Commercial loans..................... S 200 +*4 Open market paper............... 25 + 1 Loans to brokers, etc............... 25 + 4 Other loans to carry secur.... 32 +1 Loans on real estate................ 56 0 Loans to banks......................... 1 0 Other loans................................. 95 - 3 Total loans........................ $ 434 +S7 Government securities............ $ 357 —$5 Obligations fully guaranteed. 99 - 3 Other securities. . . 275 0 Total investments..... $ 731 —*8 Total loans & investments. $1,165 ~$1 Reserve with F. R. Bank.. . . 429 - 4 Cash in vault........... 24 + 5 Balances with other banks... 229 +15 Other assets—net.............. 101 - 1 +$ 17 + 3 + 5 1 — - 78 75 71 50 ” ” » " Philadelphia Federal Reserve District (Millions of dollars) Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict). Treasury operations........................... -$ + - 8 6 1 -* 3 +$ 14 + 201 + 2 - rowings by brokers and dealers in se curities. Commercial loans reached a new high point for 1939 of $200,000,000 and exceeded last year’s volume by 9 per cent. Despite the allotment of new bonds, the reporting banks reduced their hold ings of direct issues of the Federal Government by $5,000,000 to $357, 000,000 in the period. The investment in guaranteed obligations also was $3,000,000 lower, while corporates and municipals were unchanged. Total in vestments of $731,000,000 on Decem ber 20 were down $14,000,000 from the year’s high at the close of August. Aggregate deposits at the reporting banks increased $11,000,000 to within $2,000,000 of the record peak of $1, 709,000,000 on November 8. Balances of individuals, firms, and corporations were built up substantially in the fourweek period and interbank deposits also advanced. Deposits of states and local governments, on the other hand, decreased materially to the lowest level since May. Changes in weeks ending— Nov. 29 Dec. 6 Dec. 13 Dec. 20 Changes in four weeks* -0.0 -0.0 +1.2 + 0.5 +13.3 - 1.9 - 1.8 + 1-7 -16.6 +15.0 +11.4 - 1.9 +13.7 +26.4 -19.2 +1.2 +11.9 -16.7 +24.5 +20.9 +2.3 +1.1 -2.1 -0.1 + + + + 7.9 2.3 1.6 0.1 + 4.1 -24.5 + 3.7 - 0.0 + 7.8 +18.3 - 2.7 + 1.1 +22.1 - 2.8 + 0.5 + 1.1 Total................................................... +1.2 +11.9 -16.7 +24.5 +20.9 Preliminary. 4 Liabilities Demand deposits, adjusted. . $ 952 -$1 +$162 lime deposits............................ 279 0 4 U. S. Government deposits. . . 54 + 2 1 Interbank deposits................... 422 +10 + 122 Borrowings............. 0 0 Other liabilities......................... 19 + 3 0 222 | Capital account................. 0 3 Uses of funds: Currency demand........................... Member bank reserve deposits............. “Other deposits” at reserve bank Other Federal Reserve accounts. . . . * 1 8 +$ 17 MEMBER BANK RESERVES AND RELATED FACTORS 105% 101 ” 100 * 33 " Reserves declined only $2,800,000 to $588,400,000 in the four weeks from November 22 to December 20, al though substantial amounts were taken from the market by Treasury opera tions and the seasonal increase of $22, Federal Reserve Bank of Philadelphia (Dollar figures in millions) ' October to November, when the move ment of this freight usually decreases, and preliminary reports indicate that the level was well sustained in early December. Registrations of new passenger au tomobiles increased 20 per cent fur ther from October to November and continued well above the correspond ing period of 1938. Total revenue of nonresort hotels declined 2 per cent in the month and was 6 per cent below a year ago. Employment and Payrolls in Pennsylvania EXCESS RESERVES OF MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT %or "1 MILLIONS REQUIRED (All figures are rounded from original data) i Manufacturing Indexes 100 PHILADELPfBANKS 200 PHILADELPHIA BANKS V 150 COUNTRY BANKS 100 50 COUNTRY BANKS 1937 1938 1939 1937 1940 1938 1939 1940 L»+e»t- Nov.w-JO** LOANS AND INVESTMENTS REPORTING MEMBER BANKS 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 Nov. change from Nov. change from 1939 1939 tionately.) index Oct. Nov. index Oct. Nov. + 1939 1938 1939 1938 All manufacturing......... m Iron, steel and prods....... 83 1 Non-fer. metal prods.. . . 123 \£ Transportation equip... .. 65 Textiles and clothing... 99 Textiles........................... 95 Clothing.......................... 115 F ood products................... 109 Stone, clay and glass.... 84 Lumber products............. 66 Chemicals and prods.. . . 94 Leather and products. . . 89 Paper and printing.......... 102 Printing.......................... 92 Others: Cigars and tobacco. . . 60 Rubber tires, goods. . . 91 Musical instruments. . 61 +2 +5 +2 +1 -1 +1 -6 -1 +2 +2 -0 -1 +1 +1 +15 +28 +24 +29 + 6 + 7 + 4 + 8 +18 + 11 +16 + 3 + 7 + 3 901 109 153 77 92 90 105 113 88 63 106 82 106 97 -3 -1 +2 -10 +15 +10 56 96 69 + + + + + _ + - Employehours! Nov. 1939 per cent change from Oct. Nov. 1939 1938 i 4 2 3 1 o 7 1 2 0 3 6 0 0 +34 +57 +41 +60 +ii +10 +14 + 6 +27 +25 +21 + 6 +12 + 6 + + + + + 2 +38 4 +55 2 +44 2 +55 2 +ii 1 +12 6 + 6 1 3 +34 0 + 10 3 +28 6 + 4 1 +12 0 + 4 - 2 -14 + 2 - 8 + 14 +21 - 4 -12 + 3 -10 +16 +21 PHILA. FED. RES. DISTRICT * Figures from 2422 plants. t Figures from 2180 plants, t Adjusted to 1937 Census. Revised figures for earlier periods may be ob tained from this bank. MILLIONS General Index Numbers "U.S. GOVT OBLIGATIONS (direct and guaranteed) Covering Twelve Branches of Trade and Industry Employment (Indexes are percentages of the 1932 average taken as 100. In Per cent dividual indexes are combined Nov. change from proportionately into general in 1939 index Oct. Nov. dex number.) 1939 1938 OTHER SECURITIES General index 'OTHER LOANS COMMERCIAL LOANS I 938 1937 1940 1939 Percentage change—November 1939 from November 1938 City areas* Manufacturing Employ ment Wage payments permits (value) Debits Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... +21 +19 +21 +41 + 8 +12 +12 + 2 +18 +10 + 7 + 19 +16 +37 +43 +54 +80 +12 +22 +17 + 9 +36 +32 +n +28 +32 - 11 + 574 + 307 + 31 + 186 + 73 +1803 + 18 + 30 - 71 + 170 + 95 - 32 +17 + 4 +12 +23 + 9 + 7 +19 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Williamsport........ Wilmington.......... York....................... + + + + + + + + + + + +16 - 1 +20 + S +10 Retail trade sales +21 +21 + 6 +25 +12 + 16 +13 +11 +22 +13 (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.................. 117* 142t 60 113 54 112 131 95 114 118 103 97 95 +1 +2 +1 +2 -6 +0 -0 0 +5 +1 -1 +0 -2 +10 +15 + 1 +10 - 5 +13 - 2 + i + 4 + 5 - 7 - 1 - 6 Payrolls Per cent change from Nov. 1939 index Oct. 1939 + 0 + 1 -18 - 1 - 6 - 5 + 5 + 2 + 3 - 2 - 1 - 1 - 1 171* 221! 73 243 78 225 162 107 132 123 117 126 118 Nov. 1938 +25 +34 +17 +23 + 4 +29 + 6 + 3 + 6 + 7 - 6 + 3 -10 * Revised. Figures for earlier periods may be obtained from this bank, t Adjusted to 1937 Census. Revised figures for earlier periods may be ob tained from this bank. INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT PAYROLLS +26 +13 November 1939 from October 1939 2 3 2 6 0 0 0 1 5 2 2 3 6 + + + + + + + ~ + + 3 3 3 7 4 0 1 1 5 4 1 2 6 + 67 + 158 - 18 — 65 - 24 1 +2839 - 60 - 40 - 62 - 54 - 23 + 25 - 9 - 3 - 3 + 3 - 9 - 2 - 8 -11 +18 -10 +10 -14 - 4 +14 +21 +16 + 9 +20 +22 + i +17 +11 +14 +18 «y( * EMPLOYMENT 1934 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven 0 UTPUT OF MANUFA :tures PHILA DELPHIA FE DERAL RES ERVE DISTR CT Index numbers of individual lines of trade and Pf.RCEN — ADJUSTED TC " 3C»SCWAL VAR STEEL IOC — manufactures 75 5C Philadelphia Federal Reserve District -------- 25 —— 0 Unadjusted indexes reflect merely the actual change which may or may not be typical. 50 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted 25 Per cent change Nov. Sept, Oct. 1938 1939 1939 • Nov. 1939 from Month Year ago ago 1939 from 11 mos. 1938 Stocks of goods Total of all stores. . . Department........... Women’s apparel. Shoe......................... Credit...................... _ SILK Nov Sept Oct Nov. 1938 1939 193£ 1939 IOO -V - V? 75 a 50 25 76 r 85 67 74 66 r 76 96 r 106 90 98 87 r 98 +n +14 + 9 + 5 +15 + 11 + + + 77r 75 78 51 51 53 lOlr 105 109 61r 67 67 104 r 94 103 + 16 + 16 + 22 + 7 +* 4 + 22 + + + + + 2 3 0 2 3 + 7 + 7 + 7 + 1 + 3 +13 89 82 73 108 87 107 86 93 103p 74 80 95 69 83 89 110 111 115 111 91 90 102 121 130p 86 60 110 65 115 4 7 7 8 2 Rate of stock turnover 11 months (actual, not indexes) 81 88 90p 54 61 64p 121 130r 127 72 73 70 103 115 117p WOOLENS AND WORST EDS 125 IOO 75 50 25 O HOSIERY 150 125 /\A \f\pl aA- IOO +10* 3.43 3.79 Wholesale trade \ 75 60 Sales Total of all lines .... Boots and shoes. . . Drugs...................... Dry goods................ Electrical supplies. Groceries................. Hardware................ Jewelry.................... Paper....................... - 0* -19* — 4* + 1* +15* — 5* - 5* - 0* + 2* Stocks of goods Total of all lines. Dry goods.............. Electrical supplies. Groceries................ Hardware................. Jewelry...................... Paper......................... + 4+ + + + 17* 6* 1* 4* 71* 3* 39* 26* 31* +10* + 2* + 2* +32* + 1* +21* +22* +11* C EMENT IOO 50 75 25 l/V /VA /M /~w, P /W r O LUMBE 75 PRODUCT* 50 + 1* + 5* - 7* + 5* 0* + 21* + 9* - i* - 0* + 5* + 0* - 3* + 3* + 17* j- 25 O •.... ................ PAPER AND WOOD PU LP IOO 75 50 Output of manufactures Pig iron......................................... Steel............................................... Iron castings............................... Steel castings............................... Electrical apparatus.................. Motor vehicles............................ Automobile parts and bodies. Locomotives and cars............... Shipbuilding................................. Silk manufacture' ................ 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....................... ----------- / O Retail trade Sales Total of all stores. . . Department........... Men’s apparel. . . . . Women’s apparel. Shoe......................... Credit...................... --------J LOCOMOT IVES AND CARS 75 Index numbers: percentages oi tne 1923-1925 average a 38 61 49 83 65 18 69 13 230 79 55 41 90 95 131 55 33 25 58 71 80 73 93 102 56 64 67 84 127 144 77 87 r 92 20 23 20 83 91 96 22 28 r 32 373 417 413 82 91 r 93 58 65r 65 49 56 55 127 126 126 102 105 103 144 147 155 58 65 69 45 57 r 58 28 29 29 93 90 51 97 67 87 149 79 76 75 152 105 103 148 59 99 74 92 143 87 89 87 167 125 * Computed from data unadjusted for seasonal i 103 102 53 100 79 91 151 99 91 82 174 138 97 112 57p 93 81 91 144 HOp 105 83 182p 137p +13 + 9 -10 +13 + 6 -12 + 6 +17 - 1 + 2 + 1 - 2 + 0 - 1 + 5 + 7 + 1 0 + 2* - 6 +10 + 9 - 7 + 2 + 0 - 5 +n +15 + 1 + 5 - 1 +113 + 68 + 18 + 73 + 41 + 16 -f 40 +150 + 80 + 18 + 19 + 34 + 40 + 9 + 18 + 27 + 74 + 15 - 1* + 4 + 24 + 13 - 4 + 20 + 4 - 3 + 40 + 38 + 10 + 20 + 30 +52 +38 +14 +43 +22 +19 +42 +14 +44 +11 +36 +34 +92 +20 +24 +16 +41 +10 - 0* +11 + 9 + 5 + 3 +13 + 0 - 8 +32 +n + 9 + 8 +34 p—Preliminary. 38 58 50 77 69 15 63 12 230 80 59 43 102 108 132 54 33 25 91 103 59 55 116 67 88 140 76 76 78 152 101 54 69 57 76 84 17 78 21 355 82 64 46 140 102 144 68 45 29 92 103 128 76 115 74 91 163 91 89 83 169 120 70 81 93 98 68 59 121 134 95r 98 21 18 86 88 26 30 401 413 93 r 94 71 r 71 58 r 58 L44 144 L15 117 160 156 73 68 58 r 57 30 29 88 90 .08 108 86 73 70 64p 123 in 81 81 91 92 163 136 L03 107p 92 105 88 85 75 ^82p L35 131p -Revised. 25 HOES 200 175 150 125 IOO 75 — COAT AND KID LEATH :r A Ak ~ y\ 125 IOO p rV '-V 75 50 PETROLE UM REFININ G 200 — 175 150 125 100 C CARS 150 1 125 IOO fAr* 75 50 1935 Page Eight 1936 1937 1936 1939
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