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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT JULY i, 1935 By RICHARD L. AUSTIN, Chairman and Federal Reserve Agent V FEDERAL RESERVE BANK of PHILADELPHIA Business and Banking Conditions in the United States There was a further slight decline in industrial production in May and factory employment and payrolls also showed a decrease. Activity in resi dential construction continued to be above the level of a year ago. Production and employment. Vol ume of industrial production, as meas ured by the Board’s seasonally adjusted index, declined from 86 per cent of the 1923-25 average in April to 85 per cent in May, which was the fourth con secutive month of gradual decline from the recent high level of 90 in January. At steel mills output declined some what in May and the first three weeks of June, as is usual at this season. In the automobile industry, where output this spring has been at a level substan tially higher than in other recent years, production showed a marked decline in May, reflecting in part the effects of a strike. At cotton mills there was little change in activity, while at woolen mills production increased further, con trary to seasonal tendency. Production of shoes declined seasonally. Output of coal, which has fluctuated widely in recent months, reflecting partly devel opments in the labor situation, showed a marked increase during May and the early part of June. Factory employment and payrolls declined between the middle of April and the middle of May. Decreases in employment were reported for the auto mobile, radio, lumber, clothing, cotton, silk, and shoe industries, while at woolen mills employment increased and in many other lines little change was reported. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, was about the same in May as April. Residential work continued in excess of a year ago, while the volume of contracts for pub lic projects was smaller than in the cor responding month of 1934. Department of Agriculture estimates based on June 1 reports indicate that conditions for wheat, oats, barley, rye, hay, and pastures were at the ten year average for 1923-32, in contrast with conditions a year ago, which were un usually poor as a consequence of a pro longed drought. The winter wheat crop this year is estimated to be some what larger than last year and, with a considerable increase indicated for INDUSTRIAL PRODUCTION CONSTRUCTION CONTRACTS AWARDED PER CENT .. 140 spring wheat, present conditions, ac cording to the Department of Agricul ture, suggest a total crop of about 670.000. 000 bushels as compared with 496.000. 000 bushels last season and a ten year average of 828,000,000 bush els. Domestic stocks of wheat have been materially reduced this season. Distribution. Total volume of freightcar loadings increased in May by about the usual seasonal amount. Coal ship ments showed a marked increase, while loadings of miscellaneous freight de clined. Department store sales, as measured by the Board’s seasonally ad justed index, increased from 73 per WHOLESALE PRICES .ent 120 no 110 100 100 90 90 0 her 80 aC 80 70 Food* 60 70 W I*" 60 50 50 Form Pr ducts 40 40 30 1929 1930 1931 1932 1933 1934 1935 Indexes of the United States Bureau of Labor Statistics. (1926 = 100.) By months 1929 to 1931; by weeks 1932 to date. FACTORY EMPLOYMENT PER CENT 120 100 110 r\ V\ 100 A V I" 50 1929 1930 1931 100 A\ \ s/ \r V 1932 1933 VA 1 1934 "V Index of industrial production, adjusted for seasonal variation. (1923-1925 average = 100). 50 1935 1929 Three-month moving averages of F. W. Dodge data for 37 eastern states, adjusted for sea sonal variation. Latest figure based on data for March and April and estimate for May. 1930 1931 1932 1933 1934 1935 Index of factory employment, adjusted for seasonal variation. (1923-1925 average = 100.) cent of the 1923-25 average in April to 76 per cent in May and were at ap proximately the same level as a year ago. Commodity prices. The general level of wholesale prices, which was 80.3 per cent of the 1926 average at the end of April and also in the week ending May 25, had declined to 79.8 per cent by the week ending June 15, according to the index of the Bureau of Labor Statistics. Grain prices de creased considerably during May and the first half of June. Cotton prices, after a sharp decline at the end of May and a subsequent increase, also were lower in the middle of June than at the beginning of May. Prices of commodi ties other than farm products and foods as a group advanced slightly during this period. Bank credit. During the five weeks ending June 19 reserve balances of member banks increased by $175,000, 000 as a result of gold imports, offset in part by an increase in Treasury cash and deposits with the reserve banks. Excess reserves of member banks on June 12 were above $2,500,000,000 for the first time, but declined somewhat in the following week. At reporting member banks in lead ing cities there was an increase of $540,000,000 in net demand deposits in the four weeks ending June 12, due in part to gold imports. Time deposits declined by $150,000,000, of which $70,000,000 represented a decline at New York City banks consequent upon a ruling of the New York Clearing House in May prohibiting the pay ment of interest on new time deposits maturing in less than six months. Total loans and investments of reporting banks showed no important changes. Short term open-market interest rates continued at low levels in May and the first half of June. Business and Banking Conditions in the Philadelphia Federal Reserve District Business activity in the Philadelphia Federal Reserve District has slackened seasonally since April. After rising for three months, factory production declined a little more than usual during May, while activity at coal mines in creased for the second consecutive month. Output of crude oil has con tinued downward. Industrial produc tion in the aggregate, as measured by these three branches combined accord ing to their relative importance, failed to maintain its usual May level by about 2 per cent, but for the year to date the rate of output has been 4 per cent greater than last year. The value of all building contracts awarded in creased in the month, owing to larger volume in the non-residential type of construction. The conditions of crops and livestock indicate increased pro duction, and farm income continues larger mainly because of higher prices and rental and benefit payments. The value of retail trade sales during May fell off more than usual, but some improvement was indicated in June. For the year to date dollar sales have been slightly smaller than last year. Virtually no important change has been noted in the case of wholesale trade sales, which continue larger than in the first part of last year, largely be cause of higher prices. Sales of new passenger automobiles, while again de clining in May, have been the largest since 1930. Freight car loadings have been well sustained, partly because of increased shipments of coal. Industrial employment and payrolls generally showed little change from the middle of April to the middle of May. This bank’s index of employ ment in twelve branches of trade and industry of Pennsylvania was 107 per cent of the 1932 average in May, or about the same as in the previous month, but about 3 per cent lower than a year ago. The payroll index was 123, showing practically no change in the month but a drop of 4 per cent from May 1934. Seasonal recessions in both have been apparent during June. Manufacturing. Manufacturing ac tivity continues to reflect seasonal quiet, although current sales of factory products in general appear to be well sustained when compared with the vol ume last year. Prices of manufactures on the whole have shown a slight rise since the middle of May, reflecting mainly advances in wool fibers and their products as well as in some of the other commodities, particularly cement and lumber. The price index of manufactures, including fuel and light materials, as compiled by the Bureau of Labor Statistics, was 77.9 per cent of the 1926 average in the week ended June 15 in comparison with 77.6 a month ago and 78.9 a year ago. It was less than one' per cent above the low and only three-tenths of one per cent below the high reached this year. FACTORY EMPLOYMENT INDUSTRIAL PRODUCTION PENNSYLVANIA PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT CRUDE OIL (BRADFORD FIELD) CONSUMERS GOODS MANUFACTURING —ALL MANUEACTURING DURABLE GOODS ADJUSTED FOR SEASONAL VARIATION 1931 http://fraser.stlouisfed.org/ Page Two Federal Reserve Bank of St. Louis 1934 1935 1930 1932 1933 1934 No significant changes seem to have occurred in stocks of finished goods or raw materials held at reporting plants in June as compared with the previous month. Inventories in the aggregate continue to be smaller than a year ago. This also appears to be true for the country as a whole, as indicated by the indexes of the Department of Com merce for raw materials and manu factured goods. Factory employment, payrolls and working-hours showed somewhat smaller declines than usual from the middle of April to the middle of May. Incomplete reports for June indicate a further recession which seems to be slightly larger than customary. The May index of employment in sixtyeight manufacturing industries of Pennsylvania was 75.5 per cent of the 1923-25 average or virtually the same as a year ago. The payroll index was nearly 62, showing a drop of about 2 per cent from May 1934. The average weekly earnings about the middle of May were estimated at $19.72, as compared with $19.96 a month ago, reflecting a corresponding decline in working-hours; a year ago average earnings amounted to $20.03. The average number of hours actually worked in May approximated 33.9, as compared with 34.3 in the previous month and 34.6 a year before. Hourly earnings averaged about 58.1 cents as against 58 cents in April and 58.8 cents in May 1934. Since February this year there has been no important change in the relative fluctuation of working-hours and wage earnings. Production of manufactures during May declined by a larger proportion than is seasonally to be expected, fol lowing a marked improvement in the preceding three months. This bank’s index of productive activity dropped from 74 in April to 72 in May, or about the same level as it was in March, when adjustment is made for working days and the usual seasonal variation. Com pared with a year ago, it was 4 per cent higher and for the year to date 6 per cent above the average level in the first five months last year. A slight gain in the activity of the durable goods industry was more than offset by substantial declines in the manufacturing of consumers’ products. The sharpest decreases during the month were reported by the textile in dustry, reflecting mainly substantial recessions in the case of silk and knit goods, inasmuch as the rate of opera tion at the woolen and worsted mills has continued upward since last fall. Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average taken as 100 (All figures are rounded from original data) Adjusted indexes allow for the usual seasonal change which results from an uneven distribution of business between the months of the year. Percentage com parison Unadjusted indexes reflect merely the actual change which may or may not be up to the usual seasonal expecta May Mar. Apr. May tions. 1934 1935 1935 1935 May with Month Year ago ago Industrial production................... Manufacturing—total....................... Metal products............................... Textile products............................. Transportation equipment.......... Food products................................. Tobacco and products.................. Building materials......................... Chemicals and products.............. Leather and products................... Paper and printing........................ Electric power output.................. Industrial use of electricity........ Coal mining.......................................... Anthracite........................................ Bituminous...................................... Employment and wages—Pa. 70 70 57 80 64 71 40 76 92 32 104 134 80 196 131 75 76 67 71 72 54 87 62 88 43 68 85 24 97 126 80 185 140 57 54 81 74 74 57 90 72p 72p 57p 85p 66 65 92 85p 42 44 69 69p 93 94 27 27 95 95p 134 132p 81 82 197 200 136 134 67 70p 69 71p 52 63p General—12 occupations: Payrolls (1932-100).................... Building and real estate Contracts awarded—total!............. 30 Residential!..................................... 11 Non-residential!............................ 29 Public works and utilities!......... 93 Permits for building—17 cities.... 5 Mortgages recorded—Philadelphia 11 Real estate deeds—Philadelphia . . 36 Sheriff deeds (1930-100) Other deeds (i930“100)'............. Writs for Sheriff sales—Phila......... 778 Distribution Retail trade—sales............................ 70 63 Wholesale trade—“sales..................... 83 67 Life insurance sales........................... 103 New passenger auto, registrations. 71 Freight car loadings—total............. Mdse, and misc.............................. Coal.................................................... Business liquidations Payment of accounts Check payments................................. Rate of collections (actual) Not adjusted Adjusted for seasonal variation 23 26 67 17 13 23 26 10 6 13 41 7 44 11 750 61 60 68 17 13 24 13 7 5 41 + — + — + + + + — + + 2 3 1 5 0 8 5 0 1 1 1 1 1 2 1 67 61 79 69 98 98 69 62 83 71 93 94 66p 64 61 82 57 58 58 57 56 62p 83p 69p 88 85 68 3 4 o 6 2 +21 +12 - 9 + 3 -17 - 8 - 2 + 2 + 2 + 2 - 7 - 7 - 6 + 4 + 6 + 10 + 6 +15 +17 + 8 — 6 — 2 - 6 — 4 - 2 - 0 + 1 + 5 69 69 71 73 72 72 71p Vlp 64 63 91 46 64 87 44 68 41 73 89 34 105 68 68 79 65 81p 46 68p 91 28 97p 120p 83 186 137 69p 71p 57 p 75 62 62 81 182 134 -20 74 -21 76 - 2 60 98 129 81 189 133 49 45 83 85 27 96 132 82 193 138 69 72 48 — 1* 0* + 3* 75 _ 2* — 2* -10* 63 _ i* — 5* + 6* 65 77 64 63 76 63 62 — 0* — 3* — 1* 111 - 0* _ 4* + 4* 129 106 125 4 3 +20 - 2 + 2 + 5 -51 + 8 -25 — 6 - 7* + 11* +18 801 928 + + + + + May Mar. Apr. May 1935 1934 1935 1935 1935 with 5 mos. 1934 -39 - 7 -16 -86 -67 +25 — 1 -51 -29 +13 + 7 + 11* — 2* +15* +16* +19 + 2 122 31 -43 +22 12 -16 30 91 6 11 39 98 58 817 70 63 78 - 5 — 1 — 4 + 1 — 1 + 7 + 0 + 0 + 3 — 2 -14 + 6 - 6 +19 +53 - 9 — 6* + 8* + 9* — 8* + 8* + 8* + i - 5 — 2 - 7 - 3 — 1 - 0 +18 - 4 66 110 21 21 11 24 44 13 13 41 100 61 765 61 63 74 70 108 107 107 124 123 20 20 15 25 25 9 17 27 15 8 8 5 43 44 117 109 60 66 841 974 74 67p 63 62p 77 78p 71 68p 105 94 142 123 121 114p 125 llop 55 58 59 59 53 62 103 106 107 62 63 62 110 110 —1.2* + 19* +22* 50 — 15* — 57* —45* 97 101 68 61 48 60 41 70 109 61 59 79 71 80 77 75 - 3 + 6 79 78 74 29 72 30 72 29 75 30 73 + 4* - 2* + 6* + 2* 29 72 29 71 29 73 31 74 + + — + — + + 9* + 9* 74 +35* +32* 60 +25* +25* 67 — 2* - 1* 79 + 15* +14* 108 + 7* + 8* 118 + 8* + 7* 115 79 78 82 77 +12 Prices—United States Scranton........................................... (000,000’s omitted in dollar figures) 0* 0* 0* 1* 0* 1* 1* May 1934 Feb. 1935 Mar. 1935 Apr. 1935 May 1935 $ 12 168 196 66.9% $ * $ $ $465 563 1035 13.8 $421 661 122 125 122 80 80 80 81 84 84 77 78 125 124 128 127 124 125 Per cent change from Month ago Year ago 0 0 0 -0 -92 + 2 +13 + 2 +i — 11 +18 + » — 9 Banking and credit Federal Reserve Bank Bills discounted.............................. Other bills and securities............. Member bank reserves................. Ratio.................................................. Reporting member banks Loans to customers....................... Other loans and investments. . . Net deposits.................................... Bankers’ acceptances outstanding. 1 171 216 67.5% 1112 12.7 * Computed from data unadjusted for seasonal variation. t 3-month moving daily average. Indexes revised. i 171 i 171 1 171 222 68.8% 221 68.8% 221 68.5% $418 667 1123 13.2 $413 665 1124 12.5 $416 664 1130 12.5 -0 +i 0 p-Preliminary. Page Three OUTPUT OF TEXTILE GOODS VALUE OF BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT ADJUSTED FOR SEASONAL VARIATION PUBLIC WORKS AND UTILITIES WOOLENS ~ AND WORSTEDS I NON - RESIDENTIAL COTTON RESIDENTIAL ADJUSTED TOR SEASONAL VARIATION 1930 1932 1933 The most pronounced gains in the ac tivity of heavy products occurred in pig iron, iron castings, shipbuilding, lumber and explosives. Output of electric power in May de clined by a smaller extent than usual. Total sales of electricity were about 5 per cent smaller in May than in April, but 3 per cent larger than a year ago. Industrial consumption of power has declined steadily for three months, when allowance is made for the usual seasonal change, but in comparison with last year it has been 5 per cent larger. Coal and other fuels. Production of anthracite in May did not decline as much as it usually does from April, thus indicating an additional improve ment in activity. Shipments have con tinued upward since March. The sup ply of anthracite at retail yards at the beginning of May was 25 per cent larger than a month before, while stocks at producers’ yards in the same period were reduced 41 per cent. Fig ures for the first half of June indicate an increase in production, and demand for domestic and steam sizes is re ported to be fair. Following a sharp gain in the first three months of this year and a large decline in April, output of bituminous coal showed an increase of 19 per cent during May, in contrast to the cus tomary slight decline at this time. Ship ments also increased greatly, reflecting in part labor unsettlement. Industrial stocks of this fuel have declined. The most noticeable reduction in consump tion was at beehive coke ovens, where as cement mills again showed a decided increase, both changes being seasonal. For the first week in June, figures indi cate a further increase in output. Production of by-product coke has Page Four 1934 1935 1931 1932 continued downward since February. For the period from January to May, production was one per cent below the same interval in 1934. Output of gas and fuel oils has declined a little further in May. For this year to date, it was 10 per cent below the same period last year. (Output and shipment figures are daily averages) Anthracite Production........... tons Shipments.............tons Stocks.......... 1000 tons Prices.... (1926 = 100) Employment.........No. Bituminous Production........... tons Shipments. . .No. cars Prices___ (1926=100) Employment.........No. Coke Prod. .(1923-23=100) Prices.... (1926 =100) Gas and fuel oil Prod. .(1923-25 = 100) Prices___ (1926 = 100) Per cent change from May 1935 Month Year ago ago 189,600 181,119 456t 73.0 92,061 - 1 + 4 -41 - 3 + 2 - 6 - 3 -61 - 4 -15 269,923 19,671 95.7 127,157 +19 +26 4- 0 - 1 — — + - 80.0* 88.7 - 3 -16 + 5 0 87.6* — 2 62.4t +1 6 1 i 3 -11 + 4 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. t April. Wholesale prices of fuels on the whole have changed little during the month. The index of the Bureau of Labor Statistics for fuel and lighting materials was 74.9 for the week of June 15, compared with 74.2 a month ago and 73.7 a year ago. Anthracite has advanced somewhat since early June, after three months of seasonal decline. Bituminous coal prices also have risen again. Prices of coke were slightly lower in the middle of June, while petroleum advanced further. Building. The value of all building contracts awarded in this district dur ing May totaled about $5,214,000, which indicates a rise larger than usual from April chiefly because of in 1933 1934 1935 1936 creased volume in such nonresidential construction as factories and educa tional buildings. The customary trend in June is downward. In May 1934 total awards amounted to $6,735,000, while in the same month of 1928 the value of all building contracts was re ported to be $17,727,000. According to the index of the Bureau of Labor Statistics, prices of building materials so far this year have fluc tuated around 85 per cent of the 1926 average as compared with about 87 last year and the average of 94 for 1928, which was a high year in build ing operations. The decline in prices of building materials between 1928 and this year thus appears to have been about 10 per cent whereas the drop in the value of building contracts has been 70 per cent. Following an upward movement in the post-war years up to about 1928, general activity in building and con struction has fallen off drastically and since 1932 the level of operations has been extremely low. The accompany ing chart shows relative trends in the value of building contracts awarded since 1931 by three principal classes of construction in this district. The most striking fluctuation has occurred in the case of public works and utilities, which last year accounted for about $44,660,000, or 47 per cent of the value of all contract awards. The large increases in 1931 and 1934 and the sharp decreases in 1933 and so far this year reflect chiefly the influence of public works involving federal funds. For example, by the end of October 1934, total allotments to Penn sylvania by the Public Works Admin istration amounted to over $150,000, 000, including loans to railroads. The nonresidential class also has shown FREIGHT CAR LOADINGS ACTIVITY OF COMMERCIAL HOTELS ALLEGHENY DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT MERCHANDISE AND MISCELLANEOUS (64.9% or total) COAL or total) ROOM OCCUPANCY (23.5 js »’ TOTAL REVENUE TOTAL ADJUSTED fOB SEASONAL VARIATION 1930 1932 1933 1934 1935 considerable variation chiefly through below the 1928-32 average. The con contracts for such buildings as schools, dition of spring wheat, hay and oats hospitals and libraries. Contracts for also shows improvement. Fruit pros residences, particularly one and two- pects continue favorable; indications family houses, on the whole, have fluc now are that yields this year will be tuated sidewise since 1932 and in the substantially larger than in 1934. past three months have increased. The outlook for dairying appears to The figures used in the chart are be generally satisfactory and the con revised indexes constructed from the dition of cattle is about normal. Al original data reported by the F. W. though there has been no marked ten Dodge Corporation; they are expressed dency to increase the size of the herds, as percentages of the 1923-25 average. current reports indicate that their qual They are also adjusted for seasonal ity has been improving. variation. In order to smooth out to Prices received by farmers for their some extent such erratic fluctuations products generally have increased fur as those caused by the occasional ther and continue higher than last year awards of a few very large contracts as shown below. in a given month, moving averages of contracts for three months instead of Pennsyl United1 data for one month are used. This vania States 1 method facilitates the study of sus Wholesale prices of farm products tained movements and the determina Per Per (August 1909-July May cent May cent tion of seasonal changes. These in 1914 = 100) change change 1935 1935 dexes have been revised in order to index from index from May May 1934 obtain separate data for each of the 1934 six sub-divisions in addition to the All farm commodities . 103 +14 108 +32 group totals. Both seasonally adjusted Grain........................... 102 112 +19 +44 Fruits and vegetables 72 —49 98 — 11 and unadjusted indexes for all contracts Meat animals............ 114 +56 118 +84 Daily products.......... 115 and by three major groups are given + 11 108 +19 Poultry and products 101 110 +46 +53 for the past three months in the table Miscellaneous........... 83 +34 89 +51 on page 3. Any of the back indexes Source: U. S. Department of Agriculture may be obtained from this bank upon request. Distribution, trade and service. Agriculture. The agricultural situa Freight car loadings in this section tion in this district has improved fur were slightly larger in May than in ther since the middle of last month. April, owing to an exceptionally sharp Seasonal farming operations including increase in coal loadings and to a some haying and cultivating have progressed what smaller gain in livestock ship rapidly and the growth of crops has ments. Deliveries of merchandise and been stimulated by warmer weather miscellaneous commodities, grain and and frequent rains. coke failed to maintain their customary Department of Agriculture esti seasonal level, while those of forest mates, based on the June 1 condition products and ore increased by smaller of winter wheat and rye, indicate that percentages than usual. The volume of production of both crops would be railroad freight originating in the larger this year than last but somewhat Philadelphia industrial area showed practically no change from April to May and decreased slightly in the first two weeks of June. Business at wholesale was main tained at about its customary seasonal level in May. As compared with a year ago the dollar volume of May business showed virtually no change, increases in the sale of jewelry, gro ceries and hardware being largely off set by decreases in the remaining five lines. For the year to date, however, the total sales of all lines were 7 per cent larger than in 1934, continuing to reflect the influence of higher prices. Some decline in demand is indicated by preliminary reports for June. Retail trade sales of department, ap parel, shoe and credit stores combined declined 4 per cent from April to May, after allowance is made for the number of trading days and the usual seasonal change. In early June demand for general merchandise showed some im provement, according to early reports. Inventories of merchandise at wholesale declined 2 per cent more than usual from April to May, while stocks at retail establishments showed an in crease of about one per cent. As com pared with a year ago, wholesale stocks were 3 per cent larger, while at retail they were one per cent smaller. The rate of stock turnover in both lines of trade was 4 per cent more rapid this year than last. Collections during May increased 4 per cent more than was to be expected at retail, but showed a smaller gain than usual at wholesale. As compared with a year ago, the ratio of collections to balances outstanding was 6 per cent higher at retail and 2 per cent higher at wholesale. The number of new passenger auto mobiles, as measured by registrations Page Five in this district, decreased more sharply than usual in May, but was 19 per cent larger than a year ago. In the first five months this year total sales exceeded those of 1934 by S3 per cent and were the largest for that period since 1930. Activity of commercial hotels de clined in May, following a sharp in crease during April. The general trend of room occupancy and revenue since 1933 has been upward, allowing for seasonal and accidental fluctuations, as shown by the accompanying chart. Per cent change May 1935 from Hotel business Philadelphia Federal Reserve District Room occupancy............... Per cent of capacity used: May 1935 ........... 50.3 April 1935........... 58.9 May 1934........... 45.8 Revenue from: Guest rooms.................... Food.................................. Other sources.................. Total revenue............. 1935 5 mos. 1934 April 1935 May 1934 — 0 - 6 — 0 + 7 +9 - 9 — 5 + 5 + 9 -11 +11 +9 +7 +9 — 8 + 7 +8 During the four weeks ending on June 19 both receipts and payments through the gold settlement fund were in larger volume than a year ago, but the rise in receipts was greater so that the balance of interdistrict payments was over 4 mil lions in favor of this district and not adverse as was the case last year. In these figures transactions for the ac count of the reserve banks and the Treasury are omitted, so that commer cial and financial transactions of banks, business firms and individuals may be indicated. Treasury operations in the past month have included a variety of transactions that reached substantial totals; among these were income tax payments and withdrawals from de positary banks, which tend to reduce the reserve deposits of banks, and se curity redemptions, payments of inter est on debt and relief payments which tend to raise such deposits. Treasury transactions show an 11 million excess of local disbursements over receipts. There was a 2million increase in currency demand but, after this was cared for, a sufficient sum remained to add nearly 14 millions to the reserve deposits of member banks. The bank acquired an additional 10 millions of participation in the Federal reserve system’s holdings of -United States securities, but changes in other forms of oustanding credit of this bank Banking conditions. Digitized Page for FRASER Six were minor. The total of loans and commitments approved by this bank for the purpose of providing working capital for established businesses rose from $8,853,000 to $9,533,000, and the aggregate of actual advances from $4,811,000 to $5,022,000; owing to re payments the amount of outstanding advances on June 19 was $3,509,000. The accompanying table shows that there was a sharp increase in net de mand deposits at the reporting member banks during the four-week period; although a portion of this was due to the transfer of funds from the time to the demand classification, a sub stantial part also reflected a decline in amounts due from banks, which is a deduction item in the figuring of “net” deposits. The total of net demand and time funds increased 17 millions; Gov ernment deposits decreased 7 millions. Outstanding credit of the reporting banks increased 8 millions. Turning Changes in Reporting member banks (000,000’s omitted) Loans on securities: To brokers and dealers in N. Y. City............. $ To brokers and dealers elsewhere...................... To others......................... 19, 1935 Four weeks 15 One year 0 -$n 12 0 158 —$ 2 - 4 - 34 Total loans on securities $ Acceptances and commercial paper......................... Loans on real estate.......... Other loans.......................... 185 -$ 2 — $49 25 71 176 “P + 1 + 12 — 5 Total loans.................. * U. S. Government obligations................................... Obligations fully guaran teed by U. S. Government.................................. Other securities.................. 457 +$ 1 — $42 290 + - 68 273 Total loans and investments................ #1,088 826 Net demand deposits........ 275 Time deposits...................... 42 United States deposits. . . 159 Due from banks................. 258 Due to banks...................... Reserve with Federal Re156 serve Bank...................... + - U 3/ 1 81 2J 2 + 89 +* 8 + 50 - 33 - 7 - 22 - 3 +$45 +156 - 33 - 31 - 1 + 29 + 15 + 20 to the subdivisions it is found that loans on securities to customers show a further decrease of 2 millions, while other loans to customers, which rose 4 millions in the period, on June 19 were at the highest point since Decem ber and only 5 millions less than a year ago. A rise in obligations fully guaranteed by the Federal Govern ment probably was due mainly to an exchange for securities guaranteed as to interest only, which find classifica tion under “Other securities”; as the total of the latter decreased only 2 mil lions, it appears that purchases of securities were made during the period. Reserves of these banks ex panded 15 millions in the four weeks. Although reserve deposits of all member banks in this district averaged over 221 millions in May, almost the same as in April, requirements in creased somewhat owing to a rise in net demand deposits. The excess of reserves over legal requirements there fore declined from 92j4 to 90 millions ; the latter figure was over 68 per cent above requirements. Federal Reserve Bank of Philadelphia (Dollar figures in millions) Changes in June 19, 1935 Bills discounted . . . $ 0.5 0.5 Bills bought............ 3.5 Industrial advances United States securities................. 177.1 0 Other securities. . . Total bills and securities......... $181 .6 Fed. res. note circulation............... 234.9 Fed. res. banknote 0 circulation—net. Member bank reserve deposits. . . 233.2 U. S. Treasurer—■ 10.8 general account. Foreign bank de2.7 posits.................... 8.7 Other deposits.... 331 .6 67.6% Reserve ratio.......... One year Four weeks +$ 0.0 + 0.0 + 0.1 -$ 6.3 — 0.1 + 3.5 + 10.0 + 10.0 - 0.5 0 +$10.1 +$ 6.6 1.6 - 12.2 + 0 + 13.9 + 9.8 + 0.6 + 0.1 + 15.5 0.5% - 5.0 + 27.5 + 2.0 + + - 2.4 3.1 8.6 0.6% RESERVE BANK CREDIT AND THE FACTORS THAT AFFECT IT Philadelphia Federal Reserve District Changes in weeks ending (In millions of dollars) Changes in four weeks June 5 June 12 June 19 -0.6 +1.1 - 0.3 +0.3 + 0.5 +2.6 -9.6 -4.5 +9.4 + 6.1 + 4.6 +1.0 +6.6 + 5.2 + 11 .0 Total........................................................................ -7.6 +6.0 + 10.4 +7.9 +16.7 Uses of funds Currency demand......................................................... Member bank reserve deposits................................. Nonmember deposits at reserve bank.................... Unexpended capital funds of reserve bank........... +6.2 -8.5 -5.3 — 0.0 -3.7 +5.9 +3.8 +0.0 + 1.8 + 12.3 — 3.8 + 0.1 -1.6 +4.2 +5.3 +0.0 + 2.7 + 13.9 + 0.0 + 0.1 -7.6 +6.0 + 10.4 +7.9 + 16.7 May 29 Sources of funds Reserve bank credit extended in district........ Commercial and financial transactions (chiefly interdistrict)............................................................... Treasury operations..................................................... Note: This table gives, in balance sheet form, a summary of the banking changes which have had an influence on the amount of reserve bank credit in use in this district. Employment and Payrolls in Pennsylvania DEPOSITS REPORTING MEMBER BANKS MILLIONS (total or PHILA. FED. RES DISTRICT (All figures are rounded from original data) NET DEMAND, TIME, AND GOVERNMENT DEPOSITS) Manufacturing Indexes (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weight ed proportionately.) 1933 1934 May 1935 index All manufacturing......... 75 Iron, steel and products. 64 Non-ferrous metal prods. 98 Transportation equip... . 50 Textiles and clothing.. . . 97 Textiles........................... 92 Clothing.......................... 115 Food products................... 101 Stone, clay and glass... . 75 Lumber products............. 52 Chemicals and products . 87 Leather and products. . . 93 Paper and printing.......... 89 Printing.......................... 84 Utlitiiis • Cigars and tobacco. . . 63 Rubber tires, goods. . . 78 Musical instruments. . 52 1935 RESERVE DEPOSITS OF LICENSED MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS * Figures from 2249 plants. TOTAL Employehoursf Payrolls* Employment* May 1935 per cent change from Per cent Per cent change from May change from 1935 index May Apr. May Apr. 1934 1935 1934 1935 0 — 0 + 0 -1 +i -10 +4 -4 —4 + + + + + — - 3 4 0 1 2 6 -2 3 5 +8 2 1 2 - 3 -18 + 4 -1 +n -3 -3 -2 -2 +4 -0 -6 May Apr. 1934 1935 - 2 - 5 +1 — 6 - 1 — 1 + 6 -23 -11 + 7 -12 +11 - 9 - 5 + 0 + 2 + 4 + 7 +13 + 7 — 2 - 6 - 7 - 6 — 1 +1 - 0 + 2 62 56 92 37 78 74 97 89 57 37 74 78 83 83 - 2 — 6 +1 -15 + 3 + 2 + 5 + 4 + 18 + 4 — 5 - 1 + 5 + 5 49 62 39 - 5 + 7 -22 + 8 -19 - 3 -16 - 4 + 7 -20 + 9 -20 + — + - 1 0 3 4 8 8 8 1 2 +10 _ 2 - 9 - 1 +1 t Figures from 2038 plants. General Index Numbers Covering twelve branches of trade and industry EXCESS OVER LEGAL REQUIREMENTS General index (weighted)___ Percentage change—May 1935 from May 1934 Allentown............. Altoona................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. . . . Wilmington.......... York. . . Manufacturing Employ ment Wage payments — 5 - 8 -18 - 4 -26 + 14 + 7 - 4 - 7 — 2 + 2 + 10 - 5 +ii -10 + 5 -14 + 9 + 5 + T -12 — 5 +1 + 5 - 7 — 2 Per cent change from May 1934 Apr. 1935 107 119 — 3 86 120 -15 - 3 -26 - 3 + — + — May 1935 index Per cent change from May 1934 Apr. 1935 - 4 - 2 + 1936 1934 City areas* Payrolls Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined May proportionately into general in 1935 dex number.) index Building permits (value) — 24 - 10 +526 - 33 + 85 + 27 + 16 - 48 + 92 + 28 + 25 + 61 — 4 Debits Retail trade sales +1 + 0 + 9 — 3 +24 + 4 + 8 - 1 +45 -14 + 8 + 14 + 12 + 8 — 4 - 1 — — — + -11 + 2 + 1 - 6 + 8 - 8 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.................. -14 + 2 -13 - 8 89 109 104 106 95 97 +12 1 0 2 1 1 -11 — + + + + 0 1 2 1 +12 +10 +20 + 0 - 3 - 2 +1 +1 - 1 123 150 93 139 59 142 168 91 108 98 106 96 109 -22 -12 -15 - 8 - 5 + 4 + 1 + 2 + 6 + 1 -13 0 2 1 7 +12 +15 + 3 + 1 - 2 - 1 + 2 + 3 - 2 INDUSTRIAL EMPLOYMENT AND PAYROLLS -11 — 4 - 5 -10 64 111 212 0 PENNSYLVANIA MANUFACTURING AND NON-MANUFACTURING INDUSTRIES AND SERVICES PERCENT PAYROLLS May 1935 from April 1935 Allentown............. Altoona................. Harrisburg........... Johnstown............ Lancaster............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Wilmington.......... York - 3 - 0 - 1 - 2 - 0 — 1 - 0 - 8 +1 - 0 — 0 + 1 + 3 - 3 + 10 - 1 + 7 - 0 - 3 — 4 - 6 + 0 — 1 — 3 - 0 + 6 -64 -10 +30 -62 -45 +32 — 53 -83 +54 +50 — 31 + 5 8 5 5 4 1 2 1 8 +22 + + + + i EMPLOYMENT -15 - 5 - 6 -11 1 3 — 5 1 1932 1933 1935 * Area not restricted to the corporate limits of cities given here. Page Seven Index numbers of individual lines of trade and manufacture WHOLESALE TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT ADjusrco ran seas NAL VARIATION 1623-23AVS,. IOO TOTA Philadelphia Federal Reserve District r Index numbers: percentages of the 1923-1925 average taken as 100 (All figures are rounded from original data) Adjusted indexes allow for the usual seasonal change which results from an uneven distribution of business between the months of the year. Adjusted for seasonal variation Not adjusted 25 BOOTS AND SHOES Unadjusted indexes reflect merely the actual change which may or may not be up to the usual seasonal expecta Maj Mar Apr May tions. 1934 1935 1935 1935 Percentage com parison May 1935 with Month Year ago ago 1935 with 5 mos. 1934 May Mar Apr 1934 1935 1935 .A\ v May 1935 70 67 59 90 80 67 69 63 Stocks of goods Total of all stores.......................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ 63 55 60 91 58 72 61 52 62 91 55 70 67 66 54 88 69 65 58 92 78 66p 64p 56p 84 71 66p — — — - 4 - 5 — 1 — 5 — 4 - 6 + 9 - 7 + 9 - 12 8 - 0 + DRUG 62p 54p +1 + 2 1 1 70 3 .1 2 1 55 93 89 70 61 • 74 59 65 49 62 95 116 64 92 53 74 67p 63p 52p 63 55 60 92 59 70 63 54 62 99 56 72 62p 53p 66 STOCKS i V* A V W* 86 79 70p 50 DRY GOODS 62 53 60 84 58 72 — 1 - 3 66 + 9 + 10 87 + 4 - 5 56 - 3 - 4 71p - 2 — 2 63 55 64 90 59 72 66 88 + 4* + + + 7 78 0 0 68 Pig iron................................................. 41 21 20 Steel....................................................... 63 54 54 Iron castings........................................ 44 46 44 Steel castings....................................... 66 48 44 Electrical apparatus.......................... 74 88 100 Motor vehicles.................................... 11 14 13 Automobile parts and bodies......... 39 38 34 Locomotives and cars...................... 22 19 21 Shipbuilding........................................ 103 126 122 Silk manufactures.............................. 85 93 88 Woolen and worsteds........................ 39 65 69 Cotton products................................. 43 41 41 Carpets and rugs................................ 51 98 119 Hosiery.................................................. 112 125 119 Underwear............................................ 109 122 133 Cement.................................................. 50 34 44 Brick...................................................... 34 30 29 Lumber and products....................... 21 14 16 Slaughtering, meat packing............ 94 76 75 Sugar refining...................................... 75 65 89 Canning and preserving................... 67 53 55 Cigars.................................................... 91 85 92 Paper and wood pulp........................ 60 63 62 Printing and publishing................... 84 83 85 Shoes...................................................... 149 136 148 Leather, goat and kid....................... 120 116 120 Explosives............................................ 89 65 65 Paints and varnishes............................. 68 62 64 Petroleum products................................ 134 134 .28 Coke, by-product..................................... 91 83 79 1 53 :lectrical s JPPLIES 1.59 . 83p 59p 87 40p 106p 113 48p 39 66p + 0 +1(1 + 0 + 3 +34 - 8 - 2 -23 — 4 + 0 - 13 - 0 - 11 - 7 + 6 + 2 + 11 - 3 + 1 + + 69 p 22 108 43 1 ()3p 81 66p 50 62 87 4 43 + 15 87 + 9 106 + 7 52 + 14 29 + 6 67 74 53 88 77 57 88 78p 59p 87 38p 81p 37 34 70 73 107 114 112 43 50 53p 38 33 33 67 69 65p . STOCKS V** v |\LJ yj SAILS O GROCERI :s 3 2 21 26 + 19 82 92 60 59 22 SALES + 2 60 ——k 61 STOCKS + Output of manufactures SALES''^’^ 0 Wholesale trade Sales Total of all lines............................. 83 79 83 Boots and shoes......................... 68 46 54 Drugs............................................ 87 84 87 Dry goods.................................... 46 39 39 Electrical supplies..................... 115 82 79 Groceries...................................... 107 116 124 Hardware..................................... 47 44 49 Jewelry.......................................... 35 49 50 Paper............................................. 68 64 69 Stocks of goods 67 69 71 22 24 22 112 104 111 48 43 44 87 95 108 76 84 83 59 66 65 48 54 54 61 58 60 Rate of stock turnover ’ 57 69p Rate of stock turnover 28 55 48 44 96 +40 - 30 + i - 12 +10 + 10 + 0 - 33 - 4 + 31 11 -14 + 2 34 — 1 — 14 21 + 2 - 5 136 +n + 32 76 — 13 — 11 75 + 8 + 94 41 - 0 — 4 118 — 1 +133 114 — 4 + i 125 - 6 + 14 45 + 2 — 10 24 -17 - 29 17 + 9 - 17 + 0* _ i* 75 + 1 - 20 82 - 9 + 9 57p + 2 - 16 94 + 1 + 3 61 - 2 + 1 86 + 2 + 2 137 - 8 — 9 127p + 6 + 6 +21 — 12 79 65 + I — 5 I25p — 2 - 7 77p - 3 - 16 4* 2 28 — 29 43 + 5 66 + 1 46 + 0 68 + 36 68 + 0 14 24 41 + 19 22 + 26 106 _ 6 82 63 36 0 42 + 100 49 + 12 L12 + 32 110 _ 2 56 — 3 36 — 13 19 15 — 34 — 3 — + + _ __ — — 2 4 1 1 6 8 6 3 1 94 92 51 88 60 85 136 109 90 72 134 95 2.36 24 58 48 54 82 15 41 2J 131 95 63 43 97 130 133 26 30 13 73 100 47 78 64 85 145 114 65 63 133 87 23 57 46 44 87 16 37 30 58 50 45 22 21 HARDWA *E STOCKS A' 88 14 35 125 140 86 73 63 70 43 41 112 114 119 114 131 126 44 51 31 26 15 16 74 76 116 100 47 46p 84 91 63 61 86 87 148 124 116 116p 66 80 67 68 128 82 80p 0 JEWELR STOCKS /< p-Preliminary. . ... -1. -*•** SALES V PAPER STOCKS ------------------ SALES O 1932 * Computed from data unadjusted for seasonal variation. r'Kr O \ Sales Total of all stores.......................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ / SALES''’^** Retail trade Page Eight 1 ■£“*•*•........ 1933 1934 1935 .
@FedFRASER