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THE BUSINESS REVIEW' /9> THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT JULY i, i936 6 V • J> 4tf By RICHARD L. AUSTIN, Chairman and Federal Reserve Ag^$t9 FEDERAL RESERVE BANK «/ PHILADELPHIA % Business and Banking Conditions in the United States Volume pf industrial production, and the middle of May, contrary to the which had increased sharply in April, usual seasonal tendency. Increases were was maintained in May, and there was reported at plants producing iron and an increase in distribution of commodi steel products, machinery, and most ties to consumers. other durable manufactures. Changes in employment in industries producing Production and employment. The Board’s seasonally adjusted index of in nondurable manufactures were largely dustrial production in May was 101 per of a seasonal nature. Factory payrolls cent of the 1923-1925 average, as com were somewhat larger in the middle of pared with 100 per cent in April. Pro May than a month earlier. Total value of construction contracts duction of durable manufactures in creased further, reflecting larger output awarded, according to figures of the of steel and lumber, partly offset in F. W. Dodge Corporation, declined the total by a reduction in the output slightly from April to May. Awards of automobiles from the high level of for residential building continued to April. At steel mills the rate of ac increase and in May, as in other months tivity in May was higher than at any this year, were substantially larger than other time since the spring of 1930. a year ago when residential building This level has been maintained in June, was first beginning to increase from reflecting in part some accumulation the extreme low level of the depres of steel by fabricators in advance of sion. the effective date of recently announced Distribution. Department store sales, price increases. Declines in produc which usually decline at this season, tion were reported for many nondurable increased from April to May and there manufactures; at woolen mills, how was also a rise in sales at variety stores ever, actively increased. Output of and mail order houses. Freight-car bituminous coal declined from April to loadings increased by slightly more May, while output of crude petroleum than the usual seasonal amount. continued in large volume. Commodity prices. Wholesale prices Factory employment increased of commodities, which had declined slightly between the middle of April from the middle of April to the INDUSTRIAL PRODUCTION middle of May, have advanced some what since that time and in the week ending June 20 were at 78.7 per cent of the 1926 average, according to the index of the Bureau of Labor Statis tics. In recent weeks prices of live stock and livestock products, grains and flour, and textile raw materials and finished products have advanced. For many steel products price increases have been announced to take effect early in the third quarter. Bank credit. Excess reserves of mem ber banks, after a slow increase in May and the early part of June, declined MEMBER BANK RESERVES AND RELATED ITEMS Wednesday figures. June 17, 1936. FACTORY EMPLOYMENT AND PAYROLLS January 31, 1934, to WHOLESALE PRICES Employment _L Other _ Commodities Farm Products 1929 Index of physical volume of production, ad justed for seasonal variation. Indexes of number employed and payrolls, without, adjustment for seasonal variation. Indexes compiled by the United States Bureau of Labor Statistics. 1934 1935 1936 Indexes compiled by the United States Bureau of Labor Statistics. By months, 1929 to 1931; by weeks, 1932 to date. Latest figure is for week ending June 20, 1936. Page One by $900,000,000 in the week ending June 17. The reduction in excess re serves was due principally to an in crease in the deposits maintained at the reserve banks by the Treasury, which received large payments for new securities issued, as well as quarterly tions held by reporting member banks in leading cities, which had increased somewhat in May and early June, showed a further sharp increase in the week ending June 17 in connection with the new issue of government se curities. Bank loans also increased. tax installments. At that time the Treasury began to distribute checks and adjusted service bonds to veterans and there was an increase in the de mand for currency in connection with the cashing of these bonds and checks. United States Government obliga Business and Banking Conditions in the Philadelphia Federal Reserve District Trade and industrial activity in the Philadelphia Federal Reserve District has continued well sustained. Indus trial production increased further in May and showed little change in early June. This bank’s index of industrial output, adjusted for seasonal varia tion, reached a new high of 85 per cent of the 1923-25 average. The in crease from the low level of about 57 of four years ago has been steady except for some unusual fluctuations; but compared with the six-year aver age, 1923 to 1928, the current level of production is still about 17 per cent lower. Building operations have in creased seasonally and the value of ac cumulated contracts for all types of construction continues much larger than last year, though some declines occurred in May. Agricultural conditions have im proved recently through rainfall, fol lowing a prolonged drought. Income of farmers from the sale of dairy and poultry products has increased steadily, reaching this spring the largest amount of cash realized in the same period for several years. Retail trade sales during May showed exceptional gains over the previous month and a year ago, and continued well maintained in June. This also appears to be true of whole sale trade. Inventories of merchan dise, while showing little change in the month, are larger than a year ago. Sales of new passenger automobiles have increased very sharply. The transportation of commodities by vari ous means has been at a relatively steady level and in larger volume than last year. Industrial employment and payrolls increased from the middle of April to the middle of May, contrary to the usual seasonal tendency, and the cur rent levels continue appreciably higher than a year ago. Early reports from manufacturing industries indicate that the number of workers, and the volume of wage payments and the working time have been continued in June at about the same level as in May. Manufacturing. The market for products manufactured in this district has been well maintained since early April and the volume of sales con tinues to exceed that of a year ago in all important lines except some of the tex tile branches, particularly silk and knit goods. Fabricated metal products and building materials generally have been in the most active demand, although there has been some improvement in cotton and woolen manufactures, leather, paper and tobacco prod ucts. Prices at reporting factories have shown little change during the month and have continued higher than a year ago. While increases in inventories of finished goods and raw materials have been numerous, they have been virtu ally offset by equally numerous de clines, so that for the industry as a whole there has not been any unusual change during the month and as com pared with a year ago. Shipments of manufactured products originating in this section have been well above last year during the past three months. Factory employment and payrolls showed increases in May and in the first part of June, contrary to the usual seasonal tendency. The index showing the number of wage earners in Pennsylvania in May was 79 per cent of the 1923-25 average, or 5 per cent higher than last year. The pay roll index was 74, or 20 per cent above that in May last year and was the highest since the latter part of 1930. The number of wage earners in Pennsylvania factories in May was estimated at about 852,000, receiving a compensation of approximately $19,- SALES OF ELECTRIC POWER INDUSTRIAL ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT TOTAL INDUSTRIAL PRODUCTION 60 BUILDING CONTRACTS (value) TO INDUSTRIES ADJUSTED TOR SEASONAL VARIATION 1931 1932 Page Two 1933 934 1935 1936 1932 1934 1935 1936 000,000 a week. Average weekly earn ings were $22.46 in May as compared with $22.28 in April and $19.72 a year ago. These earnings were the highest since the early part of 1931 and lately have reflected a correspond ing increase in the average number of hours worked each week,—from 33.9 in May 1935 to 38.2 in April and 38.4 in May of this year. Hourly earnings have remained practically unchanged for about two years. Reports from Delaware factories showed an increase from April to May of 2.4 per cent in employment and 3.8 per cent in wage payments, the textile products group alone reg istering decreases in both employment and payrolls. Compared with a year ago, all reporting establishments showed gains of 5 per cent in em ployment, 17 per cent in payrolls and 14 per cent in working time. Output of manufactures in May in creased further for the fourth succes sive month and apparently was well sustained in the early part of June, as indicated by the number of employeehours actually worked. This bank’s index of productive activity, which is adjusted for seasonal change and the number of working days, was 83 per cent of the 1923-25 average as com pared with 82 in April, 75 in March, 74 in February and 75 in January; in May 1935 this index was 72. Despite irregular fluctuations, out put of factory products in this district has moved forward since 1932-33, fol lowing a drastic decline for a period of over three years. At present this in dex is more than half-way between the low level of the depression and the 1923-25 average. The rate of in crease so far this year over last has averaged about 8 per cent. As in the case of the two previous months, the increase in productive activity was due principally to indus tries producing durable goods, espe cially iron and steel products, trans portation equipment, and building materials. In the case of industries manufacturing consumers’ goods, the rate of activity has declined owing chiefly to rather unusual recessions in silk manufactures, hosiery, underwear, and shoes. Cigars and foods as a whole reported some improvement ex cept for sugar refining. Leather and chemicals, including petroleum prod ucts, likewise showed a higher level of activity in May than in April. Output of electric power showed a fractional decline from April to May, Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not May Mar. Apr. May be typical. 1935 1936 1936 1936 May 1936 fr 3m Month Year ago ago Industrial production................... Manufacturing—-total....................... Durable goods.................................... Consumers’ goods............................. Metal products............................... Textile products............................. Transportation equipment.......... Food products................................. Tobacco and products.................. Building materials................ . . . . Chemicals and products........ Leather and products................... Paper and printing........................ Coal mining......................................... Anthracite....................................... Bituminous...................................... Crude oil.............................................. Electric power Output.............................................. Sales, total J..................................... Sales to industriesj....................... Employment and wages—Pa. Factory—-Wage earners.................... Payrolls............................................ Man-hours (1927-28 =100)........ General (1932 =100) ■ Employment................................... Payrolls............................................ Building and real estate Contracts awarded!—total............. Residential!..................................... Non-residentialf............................ Public works and utilities!......... Permits for building—17 cities... . Mortgages recorded—Philadelphia. Beal estate deeds—-Philadelphia.. . Sheriff deeds (1930 =100)........... Other deeds (1930 =100)............. Writs for Sheriff sales—-Phila......... Distribution Retail trade —sales..................... stocks.................. Wholesale trade—sales..................... _ stocks.................. Life insurance sales........................... New passenger auto, registrations. Hotels—Occupancy (1934 =100). . Income, total (1934 =100) Freight car loadings—total............. Merchandise and miscellaneous. Coal................................................... Business liquidations Number................................................ Amount of liabilities......................... Payment of accounts Check payments................................. Rate of collections (actual) Retail trade..................................... Wholesale trade............................. Prices—United States Wholesale (1926=100)................. Farm products................................ Foods................................................ Other commodities........................ 75 72 57 85 63 84 44 73 94 30 105 129 82 70 71 62 386 76 75 61 84 82 73 90 82 89 70 74 98 38 86 85p 83 p 77p 88p 84p 83p 76 77p 67 85 64 71 100 91 29 43 108 110 114p 120 122 127p 81 84 r 85 49 64 69 48 63 69 57 73 73 406 409 417 205 r 216 229 190 211 215 160 158 134 228 214 160 48 19 65 131 18 8 34 928 458 676 66 65 81 66 88 85 75 75 79 67 68 86 83 70 67 88 91 99 110 77 80 525 79 69 89p 69 94 138 80 + + + + — + + + + + + + + + + + Philadelphia.................................... Scranton........................................... May 1935 + + + + + + + + + + + + + 1 1 5 2 2 7 9 3 2 12 3 4 2 8 10 0 2 13 14 35 3 33 1 74 s 6 4] 9 1 4 1 3 17 8 + 11 + 12 + 19 1936 May Mar. Apr. May from 1935 1936 1936 1936 5 mos. 1935 + + + + + — + + + + + — + + + + + 8 74 8 71 23 0 21 63 4 80 53 45 6 71 10 91 19 32 10 107 1 117 3 82 2 69 1 71 56 1 4 401 82 80 84p 81p 68 80 88 85 67 73 70 73 84 89 26 38 109 112 123 120 82 85 42 65 40 65 58 66 414 422 84p 79p 79 76p 97 45 116p 116p 86 69 69 65 434 76 76 212 205 163 + 12 191 r 220 224 + 14 183 209 222 + 14 137 152 160 — + _ 0 1 1 + + + 0* + 5* + 3* 75 1* + 20* + 13* 62 2* + 27* + 18* 62 + + 1* + 5* + 2* 107 5* + 20* + 12* 124 78 69 71 79 74 78 79 73 r 76 r 107 111 134 141 112 149 + 7 + 12 + 7 — 22 — 18 — 5 + 27 +109* + 17* — 22 + 151 + 100 +121 +444 +187 + 28 + 10 - 8* + 22* - 43 + 146 + 102 +162 +171 +151 + 53 — 10 — 36* + 13* — 32 20 17 27 15 8 5 44 109 66 974 45 47 19 27 60 55 86 85 23 34 8 9 34 35 57 48 63 69 467 709 51 33 60 82 22 7 49 100 81 551 + 5 + 2 + 7 — 1 + 8 + 26 — 7* — 11* + 0 + 2 — 2 + 20 + 7 + 8 + 5 + 10 67 64 76 65 94 123 112 115 58 59 62 73 79 69 70 80 77 67 70 101 98 111 165 117 129 117 135 56 66 59 69 55 63 81 69 83p 68 101 199 119 120 70 72 64 + 62 + 7* + 5* + 19 + 22 + 2 + 6 _ 12 + 20 + 6* + 7* + 8 + 9 + 1 62 20 66 23 66 22 74 78 77 79 32 71 31 74 30 72 32 72 80 81 84 78 81 82 78 80 76 80 79 79 81 77 80 77 80 79 79 82 76 79 75 78 79 80 82 78 — 0* + 9* 16* 61 r 2* - 48* _ — 40* 43r + 5 + 7 + 6 3 + + 4 3 _ 1* 2* 3* 0* 1* 0* 2* _ + _ - 2* 7* 7* 2* 2* 0* 1* — — — + + + Retail food§............................................ (In millions of dollars) Not adjusted Per cent ch ange + + — + + + + 6 0* 2* 2* 2* 0* 2* 1* % change from Feb. 1936 Mar. 1936 (a) 184 283 71.4 183 295 73.4 Apr. 1936 May 1936 Month ago Year ago (a) 183 276 73.1 0 - 5 - 1 + 7 +25 + 7 410 763 1,371 10.6 0 +1 - 1 - 5 - 1 +15 + 8 -15 Banking and credit Federal Reserve Bank Bills discounted.............................. « i Other bills and securities............. 171 Member bank reserves................. 221 Reserve ratio (per cent).............. 68.5 Reporting member banks Loans to customers....................... * 416 Other loans and investments.... 664 Total (gross) deposits................... 1,267 Bankers* acceptances outstanding. 12.5 * $ 398 746 1,370 12.2 * $ 402 745 1,383 12.3 * Computed from data unadjusted for seasonal variation, t 3-month moving daily average centered at 3rd month, (a) Less than $500,000. $ (a) 183 292 74.1 * 410 757 1,389 11.2 S p—-Preliminary. r—Revised. X Not included in production index. § Changed to 1923-1925 base. Page Three OUTPUT OF SHOES AND KNIT GOODS TEXTILE FIBERS MILLIONS OF LBS UNITED STATES DOLLARS PER LB. 20 COTTON 300 - 200 PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT ' UNDERWEAR 100 L 100 - SHOES 80 - HOSIERY 1933 1934 1935 1936 after allowance is made for the usual tinued to fall off slightly. Output in seasonal change. The trend of pro the first part of June declined further. duction has been sharply upward since For the year to date, production the end of last year, reaching in April showed only a fractional increase over the highest level shown by our records last year, while shipments were 7 per for the past fourteen years. Prelimi cent larger than in 1935. nary reports for June indicate a gain over May. Per cent change from Sales of electricity for all purposes (Output and shipment May figures are daily averages) 1936 Month Year showed a decline slightly larger than ago ago usual from April to May, although in dustrial consumption per working; day Anthracite - 3 Production............... tons 183,100 + 6 increased in the month and was 19 per Shipments.................tons 185,834 + 3 + 6 369t -19 Stocks.............. 1000 tons -19 cent greater than a year ago. Total Prices.......... (1926=100) 76.6 - 4 + 5 Employment............. No. 98,459 + 3 +10 sales for the year to date were 14 per Bituminous cent larger than in the first five months Production................tons 311,440 +17 - 1 + 7 Shipments.........No. cars 21,100 - 2 of last year. 96.5 + 1 Prices.......... (1926 = 100) - 0 Employment............. No. 126,693 - 0 +1 Coal and other fuels. Anthracite out Coke Prod.. .. (1923-25 = 100) 111.9 + 5 +34 put increased further in May, con + 6 Prices.......... (1926=100) 93.7 0 trary to the usual falling off at this Gas and fuel oil 124.8* + 3 + 19 Prod.. . .(1923-25=100) time, reflecting continued demand Prices.......... (1926=100) 74.1 + 15 0 which resulted largely from spring Sources: Bureau of Mines and Bureau of Labor reductions in prices. The seasonally Statistics. * Estimated. f May 1. adjusted index number rose to 69 per cent of the 1923-1925 average; ship Output of by-product coke again ments likewise advanced further in moved further upward in May, con May by about the same amount as did trary to the usual steadiness at this production. Figures for early June, time. Production of gas and fuel oils however, indicate the beginning of the turned upward a little, after a con customary summer decline in output. siderable reduction in the two previ Production for the year to date was ous months. For the year to date it only slightly larger while shipments was 33 per cent above last year. were 8 per cent greater than last year. Building and real estate. The Supplies of anthracite in producers’ amount of contracts awarded for all storage yards on May 1 were 19 per types of construction in this district cent and at electric power plants 16 as a whole declined by about 7 per per cent below a year ago, whereas cent to $13,704,000 from April to May, stocks held by retail dealers were 9 following increases during the spring per cent and by railroads 47 per cent months. As shown by the accompany above last year. ing table, all classes of building sus Production of bituminous coal in tained losses except in the case of fac May dropped a little less than custo tories and educational buildings. The mary after an unusual increase the volume of total construction and of month before. The seasonally ad the various classes of course has con justed index was 73 per cent of the tinued much larger than last year with 1923-1925 average. Shipments con the exception of factories, and apart Page Four 1932 1933 1934 1936 1935 ments and hotels. Substantial as the gains have been since the middle of last year the volume of current con struction and employment in building trades has been small when compared with the pre-depression years. The value of contract awards in May from 1923 to 1929 inclusive averaged $35, 562,000, so that awards in May this year were only 38 per cent of this average. Building contracts Philadelphia Federal Reserve District May 1936 (000’s omit ted) Residential........................ Apts, and hotels........... Family houses............... Non-residential................ Commercial................... Factories........................ Educational................... All other......................... Per cent change From month ago 1936 from 5 mos. 1935 4,412 207 4,205 5,889 992 502 3,433 962 - 2 - 12 - 2 - 7 - 72 + 41 +128 - 3 + 102 - 41 + 130 + 162 + 121 - 11 +1053 + 61 Total buildings......... 10,301 Public works and utilities 3,403 - 5 - 14 + 138 + 171 - + 146 Grand total................ 13,704 7 Source: F. W. Dodge Corporation. Residential building, the value of which is about one-third of all con tract awards, declined slightly in May, following marked gains in the three preceding months. The value of resi dential construction for which con tracts were given out during May amounted to about $4,413,000, or only 27 per cent of the average for that month in the seven-year period 1923-1929. Engineering construction, while de clining from April to May, was about five times as voluminous as in May 1935. The large fluctuations in this type of construction reflect chiefly projects financed by public funds. This has been an important factor, since the total volume of contracts for public works and utilities in May made RETAIL TRADE SALES FOOD PRODUCTS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT 192 -25AVO.-IOO OUTPUT - PHILADELPHIA SALES OF A PPAREL AND SHC£S V * \ » »• A #Y| • \y » 1 K •• •« A/ S;s Si S. d f m (1 ?4 DEPARTMENT Yf\ \N STORE SALES'^ WHOLESALE FOOD PRICES ADJUSTED TOR SEASONAL VA RIATION 1931 1932 1933 1934 1935 1936 1931 Saint: U.S. Bur«avi ol Labor Spatial in up about one-quarter of all contracts awarded. There has been some further im provement in the real estate situation, as indicated largely by the number of ordinary conveyances in Philadelphia and in other parts of the district. The transfer of properties resulting from forced sales, especially in Philadelphia, on the other hand, increased substan tially during May as compared with the previous months, though it con tinued smaller than last year. The demand for family dwellings appears to have been increasing somewhat and there has been some stiffening in rents over a period of several months. Agriculture. Recent rains have re lieved the drought situation, which for a time seriously threatened the growth of crops, particularly in the southeastern counties of this district. Truck and garden vegetables were not far advanced when the dry weather began, consequently much of the drought damage has been repaired with the return of favorable growing conditions. Pastures and meadows also have resumed their normal growth and their condition has improved noticeably in the past two weeks. In the case of the straw crops, particu larly oats and the first growth of hay, there has been little improvement, since the drought occurred at a more critical stage in their development. Department of Agriculture esti mates, based on the June 1 condition of the winter grains, wheat and rye, indicate that the harvest of these crops will be smaller this year than last and below the 1928-1932 average. At 77 per cent of normal, the June 1 condi tion of spring wheat in Pennsylvania was unchanged as compared with a year earlier but considerably below the five-year average for that date. The outlook for orchard fruits in gen eral is for much smaller yields this year than last. In the case of peaches in this district, preliminary estimates indicate a crop of approximately 2,300,000 bushels, or about 400,000 bushels less than last year. Wholesale prices of farm products in the country as a whole have shown a pronounced upward trend since about the middle of last month, re flecting largely increases in quotations for fresh fruits, vegetables, livestock and poultry. Distribution, trade and service. Dol lar sales by department, apparel, shoe and credit stores in May were 20 per cent larger than a year ago, all lines sharing in this increase. Sales in the first five months this year continued about 10 per cent larger than in the same period last year; the most pro nounced relative gain was shown by credit stores which handle chiefly fur niture and other household articles. The index of retail trade sales rose to 79 per cent of the 1923-25 average as compared with 75 a month ago and 66 for May 1935. This index is ad justed for the usual seasonal variation and for the number of trading days. The index of inventories showed little change during the month but was higher than a year ago. The rate of stock turnover has been 8 per cent higher this year than last. The ratio of collections to receivables also in creased about 6 per cent over April and 4 per cent as compared with May 1935. Business at wholesale showed some improvement from April to May and total sales by eight leading lines were 8 per cent larger than in May 1935. The most pronounced improvement in 1932 1933 V V 1934 v 1 I93S 1936 the month occurred in the sale of elec trical supplies, jewelry and shoes, while groceries alone failed to main tain their customary level. Stocks of merchandise at wholesale establishments were, slightly smaller at the end of May than at the same time in April but were 5 per cent larger than a year ago. The rate of stock turnover was 5 per cent higher this year than last. The amount of col lections in relation to receivables did not maintain its usual seasonal rate but was 3 per cent above a year ago. Sales of new passenger automobiles have increased sharply month by month since February. The index of registrations in May at about 138 per cent of the 1923-25 average is the high est for that month since 1926. About 20 per cent more automobiles have been sold in the first five months this year than last. The number and amount of financing both of new and used cars have increased sharply dur ing the past two years, particularly in the spring this year, indicating the growth of purchases on the installment plan. Shipments of commodities in this section by rail, truck and water on the whole have been well sustained, par ticularly in the case of merchandise and miscellaneous goods. Deliveries of coal alone in May failed to keep up the usual seasonal rate. Com pared with a year ago, freight car loadings were 8 per cent larger. Activity of non-resort commercial hotels declined seasonally in May but continued at a higher rate than a year ago. Summer resort hotels show the usual improvement since early spring, as indicated by the increased number of employees and their earnings. Data below give current changes in business of the former type of hotels: Page Five Hotel business Philadelphia Federal Reserve District May per cent change from 1936 from Month Year ago ago mos. 1935 Room occupancy.................... Per cent of capacity used: May 1936...................54.3 April 1936.................. 57.4 May 1935................... 50.3 Income from: Guest rooms........................ Food....................................... Other sources...................... 0 - 7 +0 +7 +6 - 9 -11 -16 +6 +5 .+4 +5 +9 +7 Total revenue................. -11 +5 +7 Banking conditions. In the middle of June routine banking operations were overshadowed by transactions of the Treasury, which involved large new issues of securities, cash payments for a considerable part of them, and income tax collections. Allotment of new United States securities, other than adjusted service bonds, to this district totaled 74 millions, of which 14 millions was in exchange for exist ing securities; payment for 33 millions of the remainder was made in cash and 27 millions by deposit credit. Ad justed service bonds and checks for fractional amounts were mailed to veterans, but several days intervened before any considerable amount of checks representing either the frac tional sums or redemptions of such bonds were returned to this bank and charged against the Treasurer’s ac count. In the four weeks from May 20 to June 17 local Treasury receipts ex ceeded disbursements by 17 millions, although over this period sizeable pay ments on account of work relief con tinued. The drain upon the reserve deposits of banks was augmented by a rise of 13 millions in currency de mand, most of which was in the last week and doubtless reflected prepara tions by banks for the cashing of ad justed service checks. The principal factor tending to sustain the level of member bank reserves was a favorable balance of payments of ISJ4 millions in commercial and financial transac tions with other Federal reserve dis tricts, a substantial part of which ap parently was due to payments for se curities sold by local banks or to the transmission of funds to this dis trict to make payment for new Gov ernment issues. Reserve balances of member banks declined from 275 to 260 millions, the lowest point in any weekly statement since the autumn. That reserves con tinued ample is indicated by the fact that in May the average of 275 mil lions was 127 millions or 86 per cent in excess of legal requirements. Page Six Changes in reserve bank credit con tinue to reflect mainly variations in float, which measures the extent to which credit has been given for checks before this bank has received payment. The bank’s reserve ratio advanced in the four weeks from 72.7 to 73.8 per cent despite increased Federal reserve note circulation and a rise in the Treasurer’s general account from 25 to 58 millions; this was due partly to the decline in member bank reserve deposits, but more largely to an in crease of 27 millions in total cash re serves which were expanded by Treas ury transfers and deposits of funds to the credit of this bank in the inter district settlement fund. Reporting member banks (000,000’s omitted) Assets Loans to brokers and dealers: Outside New York City. . Loans on securities to others (except banks)............... Acceptances and commercial paper bought.................. Loans on real estate.............. June 17, 1936 $ Other loans.............................. Total loans...................... $ U. S. Government securities. Obligations fully guaranteed by U. S. Gov’t___ Other securities...................... 10 18 Changes in Four One weeks year +$ 1 -$ 5 + 6 149 + 3 - 7 23 64 2 179 + - 1 1 - 3 — 4- 2 7 2 5 445 323 +* i + 8 —$12 + 33 103 315 + + + 35 + 42 3 1 Total loans and investments....................... $1,186 Reserve with Federal Reserve Bank...................... 178 Cash in vault.......................... 15 Balances with other banks. . 147 Other assets—net................... 88 +$I3 +$98 - 11 + 1 - 5 - 1 + 22 + i - 12 - 1 Liabilities Demand deposits, adjusted.. * Time deposits.......................... U. S. Government deposits. . Interbank deposits................. -$ 4 - 7 + is - 8 +$62 + 3 + 30 + 10 + + + Capital account...................... 745 267 72 284 0 22 224 i 1 2 In the three weeks ending June 10 reporting member banks reduced their holdings of United States Government securities from 315 to 301 millions. Funds derived from this source and from a 6 million increase in deposits, though partly absorbed by -the pur chase of 4 millions of other invest ments and an increase of 3 millions in loans to the open market, were prin cipally responsible for a rise of 11 mil lions in balances at the reserve bank and at correspondents. In the follow ing week, however, a substantial quan tity of Government securities was al lotted to these banks and their holdings increased 22 millions, payment for part of these being made through the credit ing of 15 millions to United States Government deposits. Other classes of deposits dropped off, those of indi viduals, corporations, etc., by 7 mil lions and interbank balances by 18 millions; this probably reflected, among other factors, the influence of loan repayment, cash payment for new securities, and income taxes. As a re sult of these happenings balances of reporting banks at the reserve bank declined 20 millions in the week and funds with correspondents dropped 7 millions. Over the month as a whole small offsetting changes were shown in loans to the open market and in those on real estate, but loans to customers on securities increased 4 millions and now are little below a year ago. Other loans, commonly termed commercial, reached a peak of 183 millions on June 10, but dropped off to 179 mil lions on the 17th; at this point they still were equal to the high point last year and 14 millions above the 1936 low attained on March 4. Federal Reserve Bank of Philadelphia (Dollar figures in millions) Changes in— June 17, 1936 Bills discounted.... $ Bills bought.............. Industrial advances. United States securi- Four weeks 0.4 0.3 5.2 +$0.1 - 0.1 - 0.1 177.1 0 Total bills and sec unties............... $183.0 Federal res. note circulation.................. 291.4 Member bank reserve deposits.... 260.0 U. S. Treasurer— general account.. . 58.1 Foreign bank de5.7 posits...................... Other deposits.......... 3.5 Total reserves........... 456.8 Reserve ratio............ 73.8% One year - $0.1 - 0.2 + 1.7 -$0.1 + $1.4 +10.7 + 56.5 -14.7 + 26.8 +32.5 + 47.3 - 2.1 + 1.6 +27.0 +1.1% + 3.0 - 5.3 +125.2 + 6.2% MEMBER BANK RESERVES AND RELATED FACTORS May 27 June 3 June 10 June 17 Changes in four weeks Commercial transfers (chiefly interdistrict).......... Treasury operations..................................................... -0.0 -1.9 +4.4 + 1.5 +11.3 + 6.1 -3.0 -6.8 +6.3 + 2.7 +13.3 -34.0 + 1.2 +15.9 -17.2 Philadelphia Federal Reserve District (In millions of dollars) Changes in weeks ending— Sources of funds: Total............................................................................ +2.5 +18.9 -3.5 -18.0 - 0.1 Uses of funds: Currency demand......................................................... Member bank reserve deposits................................. “Other deposits” at reserve bank........................... Unexpended capital funds of reserve bank........... +2.7 -0.2 -0.1 +0.1 + 1.7 +15.0 + 2.2 - 0.0 -0.4 -1.5 -1 .6 +0.0 + 9.0 -28.0 + i .i - 0.1 +13.0 -14.7 + 1 ,6 - 0.0 Total............................................................................ +2.5 +18.9 -3.5 -18.0 - 0.1 Employment and Payrolls in Pennsylvania CURRENCY DEMAND PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes Employehours f Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weight May change from May change from ed proportionately.) 1936 1936 index May April index May April 1935 1936 1935 1936 All Manufacturing ... 934 193 5 Iron, steel and products Non-ferrous metal prods Transportation equip. . 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 . 19 3 6 LOANS TO CUSTOMERS REPORTING MEMBER BANKS 79 71 112 56 96 91 114 101 79 57 86 87 91 87 64 80 51 + 5 + 0 +11 + 3 + 13 + 1 + 15 - 2 - 1 - 3 - 1 - 3 - 1 - 3 - 1 - 0 + 5 + 3 + 8 +12 - 1 - 3 - 6 - 5 + 2 - 0 + 3 - 1 + 1 + 3 - 6 + 4 + 2 - 1 May 1936— change from May April 1935 1936 74 76 116 56 77 75 89 93 69 46 79 71 88 85 +20 +36 +26 +46 - 1 +1 - 8 +1 + 4 + 5 + 2 - 6 - 7 - 5 + 3 +20 + 6 +20 +14 + 8 + o - 9 - 1 + 5 - 1 + 2 - 2 +27 +38 +36 +53 + 3 + 4 - 5 + 4 +24 +24 +12 - 7 + 8 + 2 + 2 + 3 + 4 + 2 - 5 - 5 - 5 + 3 + 8 +15 - 1 - 2 + i + 0 54 80 36 + 10 +29 -13 + 7 +25 - 6 +23 + 4 - 0 +20 + 5 - 4 PHILA. FED. RES. DISTRICT * Figures from 2285 plants. MILLIONS t Figures from 2052 plants. General Index Numbers LOANS ON SECURITIES Covering twelve branches of trade and industry OTHER LOANS May 1936 index General Index (weighted)... Manufacturing............................. Anthracite mining...................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing . . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels............................................. Laundries....................................... Dyeing and cleaning................... LOANS ON REAL ESTATE 1934 1935 1936 Loans to banks and open market excluded Payrolls Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) 112 124 89 119 77 112 201 90 113 110 107 99 109 Per cent change from May 1935 April 1936 + 5 + 5 + 3 - 0 +20 +1 - 5 + 2 + 3 + 6 + 1 + 4 +12 +1 + 0 +10 + 1 + 2 + 9 + 0 + 0 - 0 - 3 + 3 + 3 +13 May 1936 index 149 180 106 184 95 200 199 98 117 107 110 108 138 Per cent change from May 1935 April 1936 +20 +20 +14 +32 +60 +40 +18 + 9 + 8 + 9 + 5 + 13 +27 +96 +10 +18 + 0 + 2 + 1 - 0 + 3 + 8 +20 Percentage change—May 1936 from May 1935 City areas* Allentown............. Altoona................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Wilmington.......... York. . . Manufa cturing Employ ment Wage payments + 7 +10 + 6 +15 + 7 + 4 + 7 + 1 - 2 + 3 + 6 + 7 +20 +35 +23 +60 +10 + 9 . +19 + 10 +12 + 5 +20 +18 + 3 Building permits (value) 12 0 13 +2,559 20 + 278 + 1 + H 6 48 + 87 + 121 3 Debits Retail trade sales + 8 +21 +16 +34 +21 + 2 +13 - 3 -29 +13 +27 +18 +44 +18 +65 +20 +14 +26 +17 +19 +28 Wilmington.......... - 0 +1 - 1 + 3 - 0 - 0 - 0 - 3 + i - 6 + o + 2 ' + + + + + + + + + + 1 2 2 0 0 3 5 0 7 7 1 3 4 *_ — — + — — — — — — _ + 67 67 33 5 41 19 40 96 48 51 41 44 57 - 0 +16 + 3 +15 - 5 + 3 + 1 + 9 - 9 - 0 - 0 - 7 + 1 PENNSYLVANIA 12 MANUFACTURING AND NON -MANUFACTURING INDUSTRIES AND SERVICES PERCENT +25 +n +17 ~ PAYROLLS May 1936 from April 1936 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... INDUSTRIAL EMPLOYMENT AND PAYROLLS - + 4 +11 + 5 +13 +17 + 2 + 5 + 4 + 8 + 1 EMPLOYMENT + 8 1932 1933 1934 1935 1936 * Area not restricted to the corporate limits of cities given here. Page Seven Index numbers of individual lines of trade and manufacture WHOLESALE Philadelphia Federal Reserve District SALES seasonal change in activity. May 1936 from Month Year ago ago BOOTS AND SHOES 1936 from 5 mos. 1935 May Mar Apr. May 1935 1936 1936 1936 +10 +10 +16 +12 + 7 67 62 53 85 78 72 Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe.............................................. Credit............................................ STOCKS' Not adjusted Per cent change Unadjusted indexes reflect merely the actual change which may or may not May Mar Apr. May be typical. 1935 1936 1936 1936 66 64 56 82 79 73 67 104 79 75 70 65 93 78 66 68 88 86 79 76 70 96 81 84 + + + + + - 5 9 8 3 3 2 +20 +19 +26 +17 +22 +23 +24 73 79 65 70 67 61 115 115 75 91 75 87 81 74 67 99 96 SALES Aa 66 87 66 74 68 66 89 53 72 84 69 54 70 97 70 84 + + + + — + 2 2 7 9 3 0 + 7 + i 64 54 66 88 69 + 6 +14 72 69 54 74 84 70 56 69 95 75 84 J r DRUGS STOCKS \V' wA 88 W-\ V . 67 52 65 97 72 82 -A* r\ 0 Stocks of goods 65 54 ----------- * Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation TRADE DJUSTtO ro« SCAM TOTA L f sales' DRY eoo DS 73 82 STpCKS Rate of stock turnover + 8* 1.58 1.70 SALES Wholesale trade Sales Total of all lines............................. 81 86 83 89p Boots and shoes.......................... 59 57 55 70 Drugs............................................ 87 96 93 95 Dry goods.................................... 39 45 46 48 Electrical supplies...................... 107 87 94 134p Groceries...................................... 108r 124 108 103p Hardware..................................... 48 47 57 57 Jewelry......................................... 39 42 51 64 Paper............................................. 66 72 74 76 + 7 +27 + 2 + 5 +41 - 5 +27 + 2 + 8 +17 + 9 +23 +25 - 5 +19 +65 +15 + 6 +12 + 9 + 10 + 15 - 1 + 12 + 3 +11 76 59 87 37 81 107 r 53 33 65 80 64 101 42 74 114 47 32 75 77 83p 58 69 94 95 40 45 87 lOlp 99 lOlp 58 63 33 54 74 75 ELECTRICAL UPPLIES STOCKS Vx Hi Y i -..•Kn .jji Stocks of goods 66 22 108 43 106 68 r 66 50 62 67 28 70 69 28 23 114 107 110 40 41 38 105 118 116 65 68 72 79 66 80 65 61 62 62 64 — 1 -16 - 7 — 6 — l + 5 — l + 5 + 5 — l 65 21 109 +in + 6 100 64 r + 4 + 4 61 67 31 111 ^SALES 70 68 28 22 116 108 41 38 115 111 0ROCER ES 68 66 68 84 81 63 59 62 r'VA/ A 64 Rate of stock turnover + 5* Output of manufactures Pig iron................................................. Steel....................................................... Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles.................................... Automobile parts and bodies.......... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds........................ Cotton products.................................. Carpets and rugs................................. Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and products....................... 2.29 2.41 ..y STOCKS 28 55 48 44 88 8 34 20 136 78 78 41 123 114 125 45 27 23 Slaughtering, meat packing............. 75 Sugar refining...................................... 82 Canning and preserving.................... 59 Cigars.................................................... 94 Paper and wood pulp........................ (59 Printing and publishing.................... 86 Shoes...................................................... 137 Leather, goat and kid........................ 121 Explosives............................................ 79 Paints and varnishes.......................... 74 Petroleum products........................... 140 Coke, by-product............................... 80 29 43 46 + 7 +62 +40 62 75 77 + 3 55 56 71P +26 +46 75 101 93 - 8 + 113 82 103 103 - 0 +17 +40 12 9 12 +27 55 57 62 + 9 +84 27 30 32 +59 + 9 197 224 242 + 8 +78 78 88 r 78 +1 -11 78 69 72 + 4 - 8 47 r 48 r 46 - 2 +13 117 118 126 + 7 + 3 98 108 -14 110 -10 135 146 r 140 - 4 +12 35 54 59 + 9 +31 35 42 47 +12 +72 22 27 31 +15 +33 + 2* + 1* 83 83 85 + 2 +12 47 95 88 - 8 + 8 56 59 62p + 5 + 6 90 97 99 + 2 + 6 62 67 r 69 + 4 +18 + 1 84 87 88 + 2 134 129 123 - 5 -10 106 115 131p +14 + 8 76 75 78 + 4 - 91 + 75 80 r 81 + 2 145 144 148p + 3 + 6 93 103 108 +34 + 5 * Computed from data unadjusted for seasonal variation. +72 +27 +26 +65 + 8 30 58 50 45 81 +20 10 +45 35 +45 20 +62 140 -12 74 + 5 73 +14 41 +14 119 -15 114 +n 126 51 +12 +33 29 +22 22 + 4* 87 + 8 76 +27 100 + 5 45 + 9 91 + 9 59 + 3 87 - 3 124 + 2 110 80 +11 + 12 79 + 7 140 +21 83 p—'Preliminary. 49 79 58 84 103 90 76 13 11 60 62 29 32 205 229 81 86 r 75 63 50 r 49 r 116 110 114 108 147 143 r 27 53 35 44 21 26 48 81 73p 97 95 15 65 32 249 75 67 46 72 124 50 50 83 89 64 68 r 86 89 r 142 129 105 112 76 76 76 84 r 144 144 97 107 108 51p 96 69 89 33 66 58 HARDWA *E SToq<s ••........................ SALES 122 98 142 67 50 29 JEWELRY ^ v**.. STOCKS >' y**' 86 88 88 79 82 85 S sj jT, V SALES r PAPER 112 119p SALES 79 86 148p 112 STOCKS 25 193 3 1934 193 5 1936 r—Revised. Page Eight r
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