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3 THE BUSINESS REVIEW ■ FEDERAL RESERVE BANK OF PHILADELPHIA JANUARY 1, 1942 <b furchases for consumption have expanded to unt ► r " v usually high levels in the Third Federal Reserve District; production is being absorbed to an in creasing extent by growing defense requirements; and prices generally are advancing. Actual and threatened shortages of raw materials and finished manufactured goods have stimulated accumulations of inventories in some lines and have restricted civilian buying in others. Industrial operations generally are at high levels; further expansion of facilities is in evidence, and employment and pay rolls have been unusually well sustained for this period of the year. Freight shipments have been large for this season and productive and distribu tive activity generally is above a year ago. Industrial production in the District declined about seasonally from October to November and appears to have been well sustained in December. The output of manufactured goods has been re duced less than usual, owing to high rates of ac tivity in defense industries. The output of crude oil has declined less than seasonally, while produc tion of coal was reduced more than was to be ex pected. Production of electric power was reduced somewhat in November but sales, especially sales to industry, were active. Awards of building contracts expanded substantially in November, reflecting in large part fur ther industrial expansion. Nearly all types of building activity have continued substantially above the levels prevailing in 1940. Employment and payrolls in trade and industry continue near the peak levels reached in the fall. Preliminary reports indicate further advances in payrolls in December, particularly at factories pro ducing defense equipment and other heavy goods. Hourly earnings of factory workers have reached a new high level, and weekly income is substantially larger than a year ago. Some decline in retail sales was evident in the early part of December, but since then business has recovered substantially and the indications are that Christmas trade was the most active since the 1920’s. In November, retail sales improved con siderably more than was to be expected in all re porting lines. Wholesale buying has slackened somewhat as is to be expected at this time of year but is still well above the levels of 1940. Inven tories generally are substantially larger than a year ago but less accumulation of stocks is in evidence now than has been the case for some time. Freight shipments have been unusually active, especially the movement of manufactured goods. Commodity prices generally are advancing and are now at levels sharply above those prevailing when the war started in 1939. A large part of the increase has occurred in the past year. Among wholesale commodities the greatest advances have been in quotations on farm products. The cost of living is still rising. The volume of bank credit has expanded and in creasing currency requirements and payments to the Treasury have reduced deposits and reserves. The volume of commercial loans outstanding has increased again since the early part of December, and investments have reached new record levels, owing largely to purchases of Governments. Prices of securities generally are below a month ago, the largest declines having occurred in the first week of the war with Japan. Page One PRODUCTION AND PRICES FACTORY PAYROLLS PENNSYLVANIA PERCENT PERCENT PRODUCTION*' CAPITAL - GOODS sr COST OF LIVING IN PHILADELPHIA CONSUMERS' - GOODS • WHOLESALE COMMODITY PRICES U.S 1936 1938 1939 1940 1941 Manufacturing. An increasing proportion of the demand for factory products in this District is for military equipment and supplies. Growing short ages of material and the diversion of additional manufacturing facilities to the production of muni tions have further restricted sales to civilian con sumers. Inquiries from the regular trade continued to decline in the month ended the middle of De cember, principally because direct allocations, priorities, and in some cases rationing of crude and semifinished materials have prevented the delivery of an increasing number of nonessential products. Prices of manufactured goods have advanced some what further; in a number of lines measures are being taken to prevent additional increases. Factory operations continue at exceptionally high levels, with some establishments producing war materials seven days a week. Unfilled orders have increased in most of the heavy goods indus tries, but declines are reported in a number of consumers’ goods lines, including certain textiles, leather products, and paper. Inventories of fin ished goods have continued to decline, and in many lines are below the level of a year ago. Employment in Pennsylvania factories in No vember approximated the October peak of 1,150, 000 workers and wage disbursements showed only a slight decrease from the record volume of $36, 000,000 a week. Payrolls were well sustained in all major lines. Increases over a year ago continued especially sharp in the heavy industries turning out transportation equipment, certain pri mary iron and steel, a wide range of steel manu factures, and nonferrous metal products. The number employed in all manufacturing industries was 16 per cent and the volume of wage disburse ments 40 per cent above the levels prevailing in Page Two 1936 1937 1938 1939 1940 1941 November 1940. Activity was maintained at an unusually high rate in December, according to preliminary reports. In durable goods lines, employment and pay rolls in November showed increases over a year ago of 27 and 52 per cent respectively. The sharpest expansion in activity was at shipyards, aircraft factories, locomotive and car shops, and automotive plants. The number employed in non durable goods industries continued about 4 per cent greater than in 1940 and wage payments were 18 per cent larger, the most pronounced gains being at woolen mills, clothing factories, can neries, and establishments producing leather and its products, chemicals, and drugs. Hourly earnings of factory workers in Penn sylvania rose to a new high level in November, averaging nearly 84 cents as against 73 cents a year ago. Working time, however, decreased to about 41 hours a week from an eleven-year peak of 41^/2 in October. Average weekly income in November receded to $33.82 from $34.02 in the preceding month, when it was the highest in rec ords back to 1923. In Delaware factories employment declined slightly further from October to November but payrolls showed a small gain. The number em ployed at plants in southern New Jersey decreased 2 per cent in the month and the volume of wage disbursements about 3 per cent. The output of manufactured products in this District did not show the usual decline in Novem ber, being maintained at a level 27 per cent above 1940. Operations in both durable and nondurable goods industries on a seasonally adjusted basis were at about the same rate as in October. Ac- ACTIVITY IN THE STEEL INDUSTRY TEXTILE ACTIVITY EMPLOYEE-HOURS IN PENNSYLVANIA EMPLOYEE-HOURS IN PENNSYLVANIA FACTORIES PERCENT PER CENT FOUNDRIES WOOLENS AND ^ WORSTEDS STEEL WORKS AND - ROLLING MILLS • v*—----V MACHINERY AND PARTS 193 7 TEXTILES 938 1939 194-0 1937 1938 1939 1940 1941 tivity has continued to show the greatest gains in difficulties. The production of soft coal in the the heavy industries, where output in the first first eleven months of 1941 was 110 million tons, eleven months was one-half again as large as a the largest for the period in eleven years. year earlier. In nondurable lines, gains on the Activity at by-product coke ovens continues at average have been much smaller, although many peak levels, and output thus far in 1941 has been factories in this District have been producing in creasing quantities of supplies for the armed forces. 9 per cent above 1940. Output of electric power decreased in Novem Building. Awards of new construction contracts ber, contrary to seasonal expectations, but con in this District increased substantially from Oc tinued substantially above the level of a year ago. tober to November, but operations on outstanding Total sales were well sustained in the month; sales awards declined further. The greatest gains in to industry were 24 per cent above 1940. new contracts and operations as compared with a month and a year ago have been in the case of Coal and other fuels. Sales of bituminous coal manufacturing plants, owing to expanding defense continue heavy, reflecting expanding industrial re requirements. Awards for residential building quirements under the defense program. The de have declined, as materials are becoming more mand for anthracite has slackened further, owing difficult to obtain. Prices of building materials to continued mild weather and substantial sales have risen almost uninterruptedly since the first in the summer months. Prices of coal are firm. of the year to the highest level in many years. Awards of new contracts increased 46 per cent Monthly shipments of Pennsylvania anthracite from June to October were well ahead of a year in November to $27,800,000, the largest for the ago but in November were below the same month month in thirteen years. This increase reflected in 1940. Production declined more than season principally a sharp expansion in contracts for fac ally from October to November and decreased fur tories, which were eight times as heavy as in Oc ther in early December. Colliery output averaged tober and the heaviest for November in records 166,600 tons daily in November compared with going back through 1924. Increases were also 206,900 tons in October, but was the largest for reported in the case of apartments and hotels, edu the month since 1937. The volume of hard coal cational structures, and miscellaneous buildings. mined in the first eleven months aggregated about Contracts let for one- and two-family houses de clined substantially to the lowest level since Febru 50 million tons, or 8 per cent above a year ago. ary and were slightly smaller than a year ago. Stoppages at many collieries reduced the output The dollar volume of contracts awarded during of bituminous coal in Pennsylvania from a daily average of 452,000 tons in October to 391,700 the first eleven months of 1941 was 48 per cent tons in November. This was the smallest output ahead of a year ago. Increases were sharpest in since August 1940, with the exception of April awards for factories, commercial structures, and when operations were suspended owing to labor private dwellings. Page Three DEPARTMENT STORE SALES AND STOCKS FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE OISTBICT ALLEGHENY DISTRICT PERCENT PERCENT MERCHANDISE AND MISCELLANEOUS- SALES STOCKS ADJUSTED fQR SEASONAL VARIATION 1937 1938 1939 1940 1941 1942 1936 1937 1936 1939 1940 1941 Trade. Preliminary reports on Christmas trade The dollar volume of wholesale business de indicate that retail sales recovered quickly from clined from October to November in all reporting the setback immediately following the declaration lines except paper, where sales were almost double of war, and that total sales in December were the those of a year earlier. Sales of dry goods, elec heaviest since the 1920’s in this District. Dollar vol trical supplies, and jewelry also showed large gains ume in November was substantially larger than a in the year. Aggregate volume in the first eleven year ago, reflecting in part the higher prices on months was 36 per cent ahead of the correspond many lines of merchandise. Business at whole ing period of 1940; gains of more than 40 per sale also was considerably ahead of 1940, and the cent were reported in electrical supplies, hardware, movement of freight by rail was unusually well jewelry, and dry goods. maintained by heavy shipments of manufactured Wholesalers of electrical supplies increased goods. stocks on hand by 11 per cent in November, but changes in other lines were small and the aggre The increase in retail sales from October to No gate change was an increase of only 1 per cent vember exceeded seasonal expectations in all re over the month before. Inventories were still 21 porting lines, so that adjusted indexes showed ad per cent above last year, reflecting chiefly sub vances ranging from 11 per cent at department stantial increases in holdings of electrical supplies stores to 31 per cent at stores specializing in credit and groceries. sales of durable consumers’ goods. Comparisons Rail freight shipments declined substantially with November 1940 also reflected the current less than usual from October to November, so that high level of consumers’ incomes; the smallest gain was 11 per cent at women’s apparel stores the seasonally adjusted index rose 7 per cent to a and the largest, 20 per cent at those handling men’s level 15 per cent above November 1940 and was clothing and accessories. Department store sales the highest for the month since 1929. Loadings of ore declined much less in November than was expanded 16 per cent in the year. customary, but the over-all improvement was due Retail inventories declined in November. De principally to the unusually large shipments of creases for the most part were small, and at the end miscellaneous freight; in the case of coal only of the month stocks were still much heavier than a were shipments below seasonal expectations. Load year ago. In the case of department and credit ings were considerably heavier than a year ago in stores the increase in dollars over a year earlier all major lines but livestock, where volume was was about 30 per cent. Expansion was nearly as about the same as in 1940. great at women’s apparel stores; the smallest in Sales of new passenger automobiles expanded crease was 14 per cent at shoe stores. Outstand in November as supplies of the new models in ing orders placed by department stores declined creased, but were 45 per cent smaller than a year substantially in November, but at the close of the ago, reflecting in part exceptionally active sales month were still considerably larger than a year earlier this year. In the first eleven months, sales were 10 per cent greater than in 1940. ago. Page Four MEMBER BANK RESERVES COMMERCIAL LOANS PHILA. FED RES. DISTRICT REPORTING MEMBER BANKS MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS $ 800 TOTAL 600 940 400 EXCESS f§p 200 REQUIRED; 1939 JAN. FEB. MAR. APR. MAY JUNE JULY AUG SEPT OCT. NOV. DEC Banking conditions. The volume of bank credit outstanding has been increased sharply in 1941 through large purchases of securities and heavy advances to supply industry with increased work ing capital. At reporting banks in this District, earning assets have risen to a new peak in the past month, reflecting allotments of Treasury bonds and investments in short term Government issues. Loans again turned upward after the outbreak of war, but for the month as a whole declined moder ately. Deposits also declined but are considerably larger than a year ago. The reserves of member banks continue sub stantially above requirements, although reduced $74 million to $680 million in the five weeks ended December 24 by heavy seasonal demands for currency and operations of the Treasury. In the last half of November, the latest period for which complete data are available, reserve bal ances exceeded requirements by $313 million; at banks in Philadelphia the proportion of excess to required reserves was 75 per cent and at members elsewhere in the District, 61 per cent. Subscriptions to the new 2 per cent bonds of 1951-55 and the 2^’s of 1967-72 totaled $714 million in this District, and allotments were close to $100 million. Payment for these securities was chiefly in cash. Treasury receipts over the past five weeks were further increased by large amounts of income taxes and substantial sales of savings bonds and tax-anticipation notes. Reserves were absorbed also by heavy withdrawals of currency. The principal support to reserve balances was that given by large gains in inter-district transactions. The participation of the Federal Reserve Bank in securities held in the System Open Market Ac count increased during the month from $172 mil ’31 32 33 '34 ’35 '36 '37 '36 '39 '40 '41 lion to $177 million. The number of borrowing banks increased somewhat, but at the close of the period total discounts for members were only about one million dollars. Over the past year loans and investments of the reporting banks have increased $200 million to $1,415 million. Substantial expansion in the five weeks through December 24 was principally in in vestments. Holdings of United States bonds were increased $16 million, chiefly through allotments of the new issues. Other additions to the portfolio included $11 million in the short term Treasury bills and $7 million in guaranteed securities. The loan account declined $7 million to $561 million, but was still $82 million above a year ago. The demand for commercial credit expanded after the opening of hostilities, but gains were not sufficient to offset earlier declines, caused in part by repayment from the proceeds of a flotation of securities. Over the month as a whole commercial loans declined $7 million to $295 million; they exceed the volume outstanding before the defense program was initiated by about 40 per cent. Throughout the country the gain in this period amounted to 55 per cent. Holdings of open mar ket paper decreased several millions in the month, while securities loans and loans on real estate in creased somewhat. Deposits have declined $53 million since the latter part of November, in the face of heavy Treas ury disbursements for defense. This reflected pay ments from state and municipal and interbank bal ances, and factors such as the currency demand, tax payments, and purchases of new Government securities. At the present level of $1,956 million, aggregate deposits are still $129 million above a year ago. Page Five BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Adjusted for seasonal variation Q Not adjusted Industry, Trade and Service 1 Per cent cl lange Indexes: 1923-5 *=100 Nov. Oct. 1941 1941 INDUSTRIAL PRODUCTION MANUFACTURING.................. Durable goods............................. Consumers’ goods.................... Metal products............................ Textile products.......................... Food products.................. Tobacco and products. . Building materials.......... Chemicals and products Leather and products... Paper and printing........ Individual lines Pig iron............................... Steel..................................... Iron castings..................... Steel castings.................... Electrical apparatus.... Motor vehicles................. Automobile parts and bodies. Locomotives and cars............... Shipbuilding................................. Silk manufactures...................... Woolens and worsteds.............. Cotton products.......................... Carpets and rugs........................ Hosiery........................................... Underwear..................................... Cement........................................... Brick................................................ Lumber and products............... Bread and bakery products. . Slaughtering, meat packing. . Sugar refining............................... Canning and preserving.......... Cigars.............................................. Paper and wood pulp............... Printing and publishing........... Shoes................................................ Leather, goat and kid............... Explosives......... ............................ Paints and varnishes................. Petroleum products................... Coke, by-product........................ COAL MINING............................ Anthracite..................................... Bituminous.................................... CRUDE OIL................................... ELEC. POWER—OUTPUT.. . Sales, total..................................... Sales to industries...................... BUILDING CONTRACTS TOTAL A WARDS f..................... Residential!.................................. Nonresidentialf........................... Public works and utilities!.. . 117p 118p 158p 90p 147 74p 282 92p 113 57 161p 151p 94 117 117 157 89 144 75 288 r 91 114 55 r 151 130 93r 1941 from ' Nov. Oct. Nov. 1940 11 1941 1941 Mo. Year mos. ago ago 1940 94 r 93 105 83 111 74 143 82 100 50 134 107 85 0 +1 0 0 + 2 - 1 - 2 + 2 0 + 3 + 6 + 16 + 1 + + + + + + + + + + + + + + + - + 19 + 22 + 35 + 5C + 50 + 65 + 14 + 89 +147 - 10 + 20 + 7 - 1 - 13 + ii + 14 + 21 + 7 +10* - 5 + 18 + 28 + 15 + 17 + « + 14 + 82 + 19 + 15 + 27 + 4 338 268 3 3 1 1 0 + 8 +12 + 1 - 6 - 1 +1 - 6 - 1 - 6 + 2 + 12 - 3 - 3 + 2* 100 - 4 99 106 +52 82 68 - 6 92 113 97 - 1 89 77 + 2 87 + 1 94 135 + 6 144 82 r +27 117 192 153 - 5 92 81 + 1 175 154 + 12 151 152 + b 76 63 r -16 74 61 r -16 89 r 81 -16 439 412 + 2 340 294 - 3 339 297 0 255 215 + 5 105 104 76 + 1 87 98 146 68 79 96 -12 +25 + 6 104 87 108 131 127 107 73 99 97 194 195 130 187 186 125 48 45 29 139 124 122 88 87 r 46 1542 1641 r 623 70 71r 78 74 73 62 51 55 r 48 91 92 92 74 79 85 152 148 137 89 78 80 68 70 r 56 32 33 30 95 126 87p 112 90 95 153 149p 182 94 196p 158p 63 62p 75 449 331 77 122 155 Employment Nov. 1941 from + + + + + + + + + 25 27 5C 8 33 1 97 12 14 14 20 40 10 Nov. 1940 + + + + + + + + + + + 51 11 44 147 15 76p 91 274 9 93p 6 135 28 57 13 161p 20 144p 4 95 + 23 + 32 + 34 + 66 + 65 +113 + 41 + 80 +m + 13 + 36 + 23 + 9 + 4 + 13 + 24 + 47 + 12 + 6* — 5 + + + + + + + + 29 7 8 3 18 21 44 15 + 5 105 126 100 181 198 42 127 82 1542 71 79 54 102 84 153 87 67 32 100 105 82 98p 134 90 96 144 144p 182 96 196p 152p + 9 0 + 9 65 2 + 8 63p 8 + 7 82 9 - 3 436 13 + 16 345 14 + 17 348 24 + 24 273 38 + 51 13 + 44 55 + 96 60 - 2 * Unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. 115 86 122 178 Indexes: 1932 =■ 100 95 94 + 26 118p 121 + 28 120p 121 GENERAL INDEX............. Manufacturing........................ Anthracite mining................. Bituminous coal mining.... Building and construction . Quar. and nonmet. mining . Crude petroleum prod.......... Public utilities......................... Retail trade.............................. Wholesale trade...................... Hotels.......................................... Laundries................................... Dyeing and cleaning............. 149 110 78 76 275 r 137 100 83 139 118 59 50 154 134 138 102 94 r 86 107 127 103 186 203 r 41 118 82 1575r 72 79 56 102 86r 161 r 89 71r 34 98r 103 69 130 139 90r 95 155 121 194 99 176 148 88 103 75 121 132 26 112 43 623 78 66 50 103 97 138 77 56 30 111 69 74 117 77 88 127 79 153 84 155 146 80 65 r 78 62 r 95r 90 439 399 350 306 339 248 Employment month and year ago Oct. 1941 Nov. 1940 Oct. 1941 Nov. 1940 Oct. 1941 Nov. 1940 Oct. 1941 Nov. 1940 Oct. 1941 Nov. 1940 Allentown......... Altoona............. Harrisburg.... Johnstown.... Lancaster......... Philadelphia... Reading............ Scranton........... Trenton............. Wilkes-Barre. . Williamsport. . Wilmington. .. York................... -1 -1 0 -1 -1 +i 0 -2 -3 0 0 +2 -1 + 9 +20 +20 + 18 + 14 +23 + 10 + 7 + 4 +22 +19 +31 + 7 0 -6 -1 -4 -3 +i 0 -3 -5 -3 0 +3 -2 +36 +27 +40 +37 +38 +51 +32 +16 +23 +64 +47 +62 +26 -51 -43 +66 -76 -24 - 9 -58 -28 -35 -63 + 2 -19 -75 - 49 - 1 + i - 80 + 101 + 22 - 61 - 31 +124 - 33 + 61 +174 - 69 +22 + 18 +30 + 6 +22 +25 +25 - 6 +29 +20 +21 +12 + 18 +23 +28 +15 +17 0 +14 +24 +15 +27 + 7 +22 -16 -11 - 8 - 9 -14 -16 -15 - 7 +14 - 5 - 9 -17 - 8 +12 + 8 +15 +27 +17 +15 — 8 + 5 +14 +19 + 19 + 1 +23 * Area not restricted to the corporate limits of cities given here. Page Six -2 -1 +3 -1 +7 0 -3 - 2 - 1 -15 - 7 - 6 - 9 +1 - 2 0 0 +ii - 1 - 5 +34 +40 -12 +38 +41 +33 + » +10 +15 +13 +21 +22 +16 Payrolls* Per cent Per cent Nov. change from Nov. change from 1941 1941 index Oct. Nov. index Oct. Nov. 1941 1940 1941 1940 Indexes: 1923-5 = 100 TOTAL........................................ Iron, steel and products___ Nonferrous metal products. Transportation equipment. Textiles and clothing............ Textiles.................................... Clothing................................... Food products......................... Stone, clay and glass............ Lumber products.................... Chemicals and products. . . Leather and products........... Paper and printing................ Printing................................... Others: Cigars and tobacco.............. Rubber tires, goods............ Musical instruments........... 111 0 0 +i +i -1 -1 -1 0 -1 117 182 97 94 85 129 119 99 66 114 98 108 95 +16 +25 +32 +37 +1 - 2 135 -1 0 0 +1 + 16 + 14 + 8 + 5 189 267 124 104 95 148 135 117 74 150 114 126 110 +1 +10 + 18 + 5 77 131 95 +n +13 -2 74 99 74 +2 -2 -1 -1 -3 0 -1 -1 -2 0 +40 +50 +50 +65 + 17 +12 +38 +16 -2 +26 -5 0 0 +2 +3 +13 +35 +43 +20 +14 +3 -2 +25 +41 +6 + 4 * Figures from 2,883 plants. Hours and Wages Factory Workers Averages November 1941 and per cent change from year ago Retail sales 331 72 307 115 298 179 124 156 146 146 162 148 + 16 0 0 +11 + 7 + 1 + 4 + 7 + 4 + 11 + 11 + 2 Employment* p—Preliminary, r—Revised. Percentage change— November Payrolls 241 +12 Manufacturing 76 79 111 Local Business Conditions* Building permits value 0 0 0 0 -5 -4 172 66 108 64 123 138 105 127 127 110 117 107 83 100 94 154 136 305 220 107 Payrolls Per cent Per cent Nov. change from Nov. change from 1941 1941 index Oct. Nov. index Oct. Nov. 1941 1940 1941 1940 Debits TOTAL............................... Iron, steel and prod. .. Nonfer. metal prod. . . Transportation equip.. Textiles and clothing. . Textiles.......................... Clothing......................... Food products................ Stone, clay and glass. . Lumber products.......... Chemicals and prod. .. Leather and products . Paper and printing.... Printing.......................... Others: Cigars and tobacco . . Rubber tires, goods. . Musical instruments . Weekly working time* Hourly earnings* Aver •Aver- Ch’ge age Ch’ge age hours 41.8 40.3 44.1 37.2 37.6 36.3 40.9 36.7 40.3 38.9 37.8 40.7 38.5 + S $ .837 + 5 .931 .745 + 3 + 7 .940 .598 + 5 + 4 .618 +10 .548 + 1 .646 - 2 .803 +1 .600 .915 + 2 +11 .611 + 6 .757 .908 + 8 39.1 38.3 45.4 + 2 + 9 - 5 40.8 * Figures from 2,646 plants. .486 .766 .739 Weekly earnings! Aver- Ch’ge age +15 $33.82 + 15 38.92 + 11 30.04 + 18 41.41 + 12 22.19 + 14 23.16 20.13 +11 + M 26.66 + 13 29.37 23.91 + 2 +13 35.19 +10 23.23 + 5 31.62 - 2 36.15 + 9 + 4 + 3 18.97 29.37 33.52 +20 +20 +14 +26 +18 +18 +23 +n + 3 +15 +22 +10 + 6 +12 +13 - 2 ! Figures from 2,883 plants. Distribution and Prices Adjusted for seasonal variation Per cent change Nov. 1941 from Wholesale trade Unadjusted for seasonal variation Month Year ago ago Sales Total of all lines..................... - 9 — 22 -10 -18 - 6 -30 - 6 +17 + 1 + 1 + 11 - 2 + 2 - 1 - 1 Dry goods............................... Electrical supplies............... Groceries................................. Hardware................................ Jewelry.................................... Paper........................................ Inventories +30 +16 +40 +32 +15 + 3 +32 +91 Indexes: 1935-1939 = 100 Basic commodities (Aug. 1939 = 100). Wholesale (1926 = 100)............................ +21 + 8 +41 +39 +19 -14 +14 Living Costs (1935-1939 = 100) United States........... Philadelphia............. Clothing................... Housefurnishings . Other........................ +i 92 91 89 93 0 +i 0 0 110 108 109 115 106 103 115 108 +1 0 0 +3 0 0 +2 0 Nov. 1941 from Nov. 1940 1941 from 11 +17 +17 + 11 +20 +10 Nov. 1940 mos. 1940 +16 +15 Nov. Oct. 1941 1941 +36 RETAIL TRADE Sales Department stores—District!.... Philadelphia %. Women’s apparel!................................ Men’s apparel......................................... Shoe............................................................ Credit!...................................................... 132p 127 109 142 125p 140p 119r 113 115r 110 99 96r 117 119 101 108 107 120 Inventories _ Department stores—District!...... Philadelphia !, Women’s apparel................................... Shoe............................................................ Credit......................................................... +41 +67 +19 +50 +44 +36 Per cent change from Nov. 1941 Month Year Aug. 1939 ago ago 154 Nov. Oct. 1941 1941 Month Year ago ago ____ ________________________ Source: U. S. Department of Commerce. Prices Not adjusted Per cent change 1941 from 11 mos. 1940 127p 119 127 107p 153p 132r 98 94 122r 135 101 107 94 117 160 146 147 108 124 254 183 133 114 104 137 138 106 127 171 182 132 113 99 127 126 96 113 221 163 115 104 104 + + 124 133 102 - 7 + 16* FREIGHT-CAR LOADINGS Total...................................................... Merchandise and miscellaneous Merchandise—l.c.l......................... Coal..................................................... Coke............................ Forest products. . . . Grain and products Livestock................... +32 +54 + 16 +33 +23 +n +23 +49 +33 + 17 +10 + 10 + 16 + 13 + 2 + 5 +12 + 6 +12 +11 +17 +16 + 3 + 7 +15 + 7 Source: TJ. S. Bureau of Labor Statistics. MISCELLANEOUS Life insurance sales................................................. New passenger auto, registrations.......... Hotels—(1934 = 100) Occupancy...................................................... Income, total.................................................. Business liquidations Number. . ....................................................... Amount of liabilities................................... Check payments............................................. 168p 169 124 157 121p 177p 136 133 109 131 113 133 144 147 113 131 104 150 154p 144 150 114p 168p 156 146 162 115 179 118 113 +23 146 146 150 147 +12 112 112 127 125 99 123 172 168 109 118 120 +15 + 15 + 14 + 16 + 17 4 3 6 0 4 +30 +26 +26 +14 +31 7 7 +15 +17 +13 +22 +10 +18 +26 +30 +39 + 8 - 5 + 2 - 3 120 100 129 135 198 189 126 131 120 145 232 182 133 116 119 +22 -45* +10 132 +10* 74 121 +16* + 7* + 9* 115p 124 r 103 141p 136r 121 -13* + 6* +26 73 162 +15 +13 +15 + 49 + 1 + 1 + 1 + 5 +11 0 20* - + 113* 142 151 * Computed from unadjusted data. ! Revised. Earlier figures available upon request. +47* 126 p—Preliminary. 88 108 135 64 82 34 146 110 50 135 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Dec. 24, 1941 Reporting member banks (000,000’s omitted) Assets Commercial loans.................. Open market paper.............. Loans to brokers, etc........... Other loans to carry secur.. Loans on real estate............. Loans to banks....................... Other loans............................... 295 41 29 32 51 Changes in weeks ended— Changes inOne year -$ 7 - 3 +$ 58* 7 0 + 4 + 2 + 1 1 + 1 + 113 Nov. 26 13* $ 561 -$ 7 +$ 82 Government securities......... $ 479 106 Obligations fully guar’teed. 269 Other securities...................... +$27 + 7 + 1 $ 854 +$35 +$119 Dec. 10 Dec. 17 Dec. 24 Changes in five weeks +0.2 +8.7 -4.9 + 2.0 +10.9 + 1.9 - 1.6 +16.3 + 6.3 + 0.4 +27.9 -85.0 +11.3 + 3.9 -13.7 +12.3 +67.7 -95.4 + 14.8 +21.0 -56.7 + 1.5 -15 ..4 +8.9 -4.3 -0.6 -0.0 + + + - + + + - 9.3 9.4 2.3 0.0 +11.5 -70.4 + 1.3 + 0.9 + 16.7 -13.6 - 1.6 - 0.0 +53.7 -74.1 + 4.3 + 0.7 +4.0 +14.8 +21.0 -56.7 + 1.5 -15.4 Uses of funds: Currency demand........................................................ Member bank reserve deposits.............................. “Other deposits” at Reserve Bank..................... Other Federal Reserve accounts........................... +1111 - Sources of funds: Reserve Bank credit extended in district......... Commercial transfers (chiefly interdistrict).. . Treasury operations................................................... Dec. 3 +4.0 Philadelphia Federal Reserve District (Millions of dollars) Five weeks Total loans. Total investments Total loans & investments $1415 477 Reserve with F. R. Bank.. . 26 Cash in vault........................... Balances with other banks. 200 74 Other assets—net.................. Liabilities Demand deposits, adjusted $1263 223 Time deposits..................... 32 U. S. Government deposits. 438 Interbank deposits................ Borrowings............................... 18 Other liabilities....................... 218 Capital account...................... +$28 - 69 + 16 8 +$201 - 27 - 1 - 4 - 37 - 2 - 6 +$ 3 - 25 + - 11 42 0 +$195 - 37 9 20 + 0 2 Member bank reserves Daily averages: (dollar figures in millions) Held Re quired Ex cess Phila. banks: 1941: Nov. 1-15.. $557.1 $305.6 $251.5 Nov. 16-30.. 532.4 303.9 228.5 Dec. 1-15.. 536.2 1940: Dec. 1-15.. 483.1 228.9 254.2 Country banks: 1941: Nov. 1-15.. Nov. 16-30.. Dec. 1-15.. 1940: Dec. 1-15.. 223.2 223.6 223.6 200.3 Ratio of excess to re quired 82% 75 • 111 * 137.7 138.8 85.5 84.8 62 » 61 * 102.7 97.6 95 ” 7.3 4.8 2.9 0.2 Federal Reserve Bank of Phila. (Dollar figures in millions) Dec. 24, 1941 Five weeks One year Bills discounted......... Bills bought................ Industrial advances. U. S. securities.......... Total.......................... Note circulation . • • • Member bk. deposits U. S. general account Foreign bk. deposits. Other deposits............ Total reserves............ Reserve ratio.............. $1.0 0 3.6 177.0 $181.6 578.2 680.2 86.3 77.0 15.3 1268.4 88.3% + $0.6 0 - 0.1 + 5.0 + $5.5 + 47.3 - 74.1 + 35.4 - 23.2 + 4.3 - 26.9 - 1.2% + $0.5 0 + 1.5 - 6.0 - $4.0 +162.3 - 1.2 + 71.1 + 1.2 - 16.5 +215.9 + 2.0% Changes in— * Revised. Page Seven National Summary of Business Conditions INDUSTRIAL Industrial activity was maintained at a high rate in November and the first half of December and distribution of commodities continued in large volume. Our entry into the war was reflected in a sharp advance in the prices of some commodities, some decline in security prices, and further curtailment of nonmilitary production. PRODUCTION Production Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average = 100. By months, January 1935 to November 1941. WHOLESALE PRICES OF BASIC COMMODITIES Bureau of Labor Statistics* indexes based on 12 foodstuffs and 16 industrial materials, August 1939 = 100. Thursday figures, January 3, 1935 to December 11, 1941. Volume of industrial output was sustained in November at the high rate of the previous two months, although a decline is usual at this season. The Board’s adjusted index ad vanced from 163 to 167 per cent of the 1935-39 average. In industries engaged in produc tion of armament and munitions activity continued to increase and in most other lines volume of output was maintained or declined less than seasonally. Output of materials, such as steel and nonferrous metals, was maintained at about capacity. In the automobile industry activity increased, reflecting larger output of both military and civilian products, and at lumber mills and furniture factories activity declined less than seasonally. At cotton and rayon textile mills activity rose to new record levels, and at woolen mills the high production rate of other recent months was maintained. Less than seasonal declines in output were indicated for shoes and manufactured food products. Crude petroleum production increased further in November. Bituminous coal produc tion declined somewhat owing to temporary shutdowns at some mines during November, and anthracite production was curtailed as a result of unusually warm weather in some areas and the existence of considerable stocks of coal accumulated in earlier months. Iron ore shipments continued in large volume until the shipping season closed early in December; during 1941 about 80 million tons of ore were brought down the Lakes as compared with the previous record of 65 million tons in 1929. Stocks of ore at lower Lake ports on November 30 amounted to about a seven months’ supply at the current consumption rate of around 6.5 million tons a month. Following a declaration of war by this country in early December further steps were taken to curtail output of nondefense goods using critical materials. Output quotas for passenger cars and household appliances were greatly reduced and cessation of output of some other products was ordered as of the end of January. Also, the production and sale of new automobile tires and tubes for civilian use were halted temporarily, pending establish ment of a system for controlling their distribution. Value of construction contracts awarded in November declined sharply from the high level of other recent months, according to figures of the F. W. Dodge Corporation. Awards for privately-financed construction decreased more than seasonally and contracts for pub licly-financed projects also declined following a continued large volume of awards since last spring. Total awards in November were about a fifth larger than a year ago, while for the first ten months of the year they were three-fifths larger. Distribution Volume of retail trade increased in November following some decline in the previous month. Department store sales, as measured by the Board’s seasonally adjusted index, advanced to 115 per cent of the 1923-25 average as compared with 105 in October and 116 in September. Larger sales in November were also reported by variety stores. Sales of automobiles increased somewhat, according to trade reports, but, as in other recent months, new car sales were smaller than output and dealers’ stocks rose further. In the second week of December sales at department stores rose" less than seasonally, particularly in the coastal regions. Freight traffic on the railroads continued in large volume in November and the first half of December. Grain shipments increased considerably and loadings of miscellaneous mer chandise, which includes most manufactured products, were maintained at the high level reached several months earlier. Coal loadings declined somewhat, owing in part to tem porary shutdowns at some mines. Shipments of most other classes of freight decreased less than is usual at this season. MONEY RATES IN NEW YORK CITY Commodity Prices Weekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935 to December 13, 1941. MEMBER BANK RESERVES AND RELATED ITEMS MU.IONI CP DOLLAR* MEMBER BA K /V " RESERVE BALA! C2r tV* Ml NET IN CIRIAILATION , _____ TREASURY CAS AND DEPOSITS y*^v\ NONMEMBER I940 I94I I939 — 1940 Wednesday figures, January 4, 1939 to Decem ber 10, 1941. Following the entry of the United States into the war, prices of grains, livestock, and foods rose sharply. Prices of most industrial materials traded in the organized markets, being limited by Federal regulation, showed little change. Additional measures to prevent ad vances in wholesale prices were soon announced for wool and shellac and for such imported foods as cocoa, coffee, pepper, and fats and oils. Retail food prices, as measured by the Bureau of Labor Statistics’ index, increased 1J4 per cent further from the middle of October to the middle of November to a level 18 per cent above a year ago. Indications are that retail prices of both foods and other commodities continued to rise in December. Bank Credit Total loans and investments at banks in leading cities continued to advance during November and the first two weeks of December, owing mostly to increased holdings of Government securities at banks outside New York City. Commercial loans, after showing little net change in November, again increased sharply in the first two weeks of December. Excess reserves increased through most of the period' as a result of Treasury expendi tures from Reserve Bank balances, but declined sharply on December 15 when these balances were replenished in connection with the issue of 1.6 billion dollars of new Government securi ties. Money in circulation has continued to show a marked increase. Yields on United States Government Securities The yield on 2:/l per cent United States Government bonds of 1967-72, which reached a record low level of 2.32 per cent on November 5, advanced somewhat in November and, after the entry of the United States into the war, rose to 2.50 per cent. Yields on short-term Government securities increased further. The yield on Treasury notes of December 1945 advanced to 0.93 per cent on December 17, compared with 0.62 per cent on September 15, and the rate on three-month bills rose to .295 per cent.
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