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THE BUSINESS REVIEW ,<r VO RESERVE DISTRICT VA JULY i, 1939 THIRD FEDERAL PHILADELPHIA Tv '•2 % FEEjERAL RESERVE BANK OF PHILADELPHIAV2, r fo ' ■% ^21 Business and Banking Conditions in the United States Industrial production, which had been receding on a seasonally adjusted basis during the first four months of this year, showed little change in May and increased considerably in the first three weeks of June. The advance re flected principally larger output of steel and coal, which had previously shown considerable declines. Production. In May the Board’s seasonally adjusted index of industrial production was at 92 per cent of the 1923-1925 average, the same as in April. Volume of manufacturing pro duction declined somewhat further, ow ing chiefly to reductions in output of steel and automobiles, but mineral production increased as most bitumi nous coal mines were reopened after the middle of the month. Steel ingot production, which had been at an average rate of 52 per cent of capacity in April, declined to 45 per cent in the third week of May. About this time prices of some types of steel were reduced consider ably and orders were placed in sub stantial volume. Subsequently steel output increased and the current rate is about 55 per cent of capacity, ap proximately the level maintained dur ing the first quarter of this year. In the automobile industry output was reduced by about one fifth at the beginning of May, and in the latter part of the month there was further curtailment partly as a result of a strike at a body plant which led to the closing of most assembly lines of one major producer. In the early part of June the strike was settled and by the middle of the month output had risen to a level higher than that prevailing during most of May. Lumber produc tion increased further in May follow ing less than the usual seasonal rise during the first quarter of this year. Output of nondurable manufactures in the aggregate was at about the same rate in May as in April. At woolen mills activity increased sharply, fol lowing a decline in April, and at cotton and rayon mills output was main tained. Mill consumption of raw silk showed a further sharp decline. At meat-packing establishments output in creased more than seasonally, and as in March and April was considerably INDUSTRIAL PRODUCTION larger than a year ago, reflecting a sharp increase in the number of hogs slaughtered. Flour production con tinued in larger volume than is usual at this season, while at sugar refineries there was a decrease in output. Mineral production increased in May owing chiefly to the reopening of most bituminous coal mines. Anthra cite production, which had been in large volume in April, declined in May, while output of crude petroleum increased somewhat further. Value of residential building conMEMBER BANKS IN 101 LEADING CITIES BILLIONS OF DOLLARS BILLI0N8 OF DOLLARS 10 10 US. GOVT OBLIGATIONS 8 8 6 6 COMMERCIAL LOAN 4 4 OTHER SECURITIES 2 ____ _ .., ,i—--------V. 2 LOANS TO BROKERS'AND DEALERS 0 34 1935 1936 1937 1938 1939 Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934 to June 14, 1939. Commercial loans, which include industrial and agricultural loans, represent, prior to May 19, 1937, so-called “Other loans” as then reported. ^ FREIGHT-CAR LOADINGS V HOLESALE PRICE PERCENT 110 PERCENT PERCENT 110 100 on 90 FOODS /A 80 A \ V 80 50 40 w 1934 Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 tp May 1939. 1935 1936 1937 V COMMOOITIES \ 1938 FARM PRODUCT s 50 1939 Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 to May 1 QfQ t Lv 60 V-' 1934 1935 1936 1937 1936 1939 Indexes compiled by the United States Bureau of Labor Statistics, 1926 = 100. By weeks, 1934 tp week ending June 17, 1939. Page One tracts, which had shown a considerable decline in April, increased in May, according to figures of the F. W. Dodge Corporation. Public residential awards were higher owing to a greater volume of United States Housing Au thority projects; private awards also increased but on a seasonally adjusted basis were below the high level reached in February and March. Contracts for both public and private nonresidential construction declined in May, follow ing increases in the preceding two months. Employment. Factory employment and payrolls showed little change from the middle of April to the middle of May, according to reports for a num ber of states. Distribution. Department store sales declined from April to May, while sales at variety stores and by mail order houses showed little change. In the first two weeks of June department store sales increased. Freight-car loadings increased in the latter half of May, reflecting chiefly expansion in coal shipments. In the first half of June loadings of coal in creased further and shipments of other classes of freight also were in larger volume. Commodity prices. Prices of indus trial materials, such as steel scrap, hides, wool, and print cloths, advanced somewhat from the middle of May to the third week of June. Wheat, silk, and coal prices declined early in June, following increases in May, and there were further declines in prices of live stock and meats. Bank credit. During the four weeks ending June 14 total loans and invest ments at member banks in 101 leading cities increased by $270,000,000, fol lowing a decline of $200,000,000 in the preceding four weeks. The major in crease was in holdings of Treasury notes and bonds at New York City banks. Demand deposits increased sharply to new high levels both in New York and in the leading cities outside New York. During the first three weeks of June excess reserves of member banks showed little change from the new high level of $4,300,000,000 reached on May 24. Continued gold imports largely went into earmarked gold and into balances held for foreign account at the Federal Reserve banks. Money rates. Prices of United States Government securities, which had ad vanced sharply from April 11 to June 5, reaching a new high level, eased slightly during the next two weeks. The yield on the longest-term Treas ury bond outstanding declined from 2.49 per cent on April 11 to 2.26 per cent on June 5 and increased to 2.32 per cent on June 19. Other money rates showed little change. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial production in the Third Federal Reserve District declined slightly further from April to May but continued at a substantially higher level than a year ago. The decrease in the output of coal and crude oil during May was somewhat greater than usual, and manufacturing activ ity did not measure up to seasonal expectations. The production of both consumers’ and durable goods de clined, following an upward tendency for several months. Decreases in the output and sales of electric power were less than seasonal. In the first five months of the year total industrial production continued 13 per cent above the corresponding period in 1938. Virtually all lines of activity reported substantial increases over last year, except bituminous coal mining, where output was reduced by the shutdown. Awards of building contracts in creased sharply in May, owing to an increase in the construction of apart ments and hotels, family houses, and public works and utilities. Awards for nonresidential structures declined. Building activity so far this year has been well above 1938 except in the case of nonresidential construction. MANUFACTURING ACTIVITY General employment conditions im proved from April to May as prac tically all lines except manufacturing reported increases in wage disburse ments and in the number of workers employed. The sharpest gains were reported by the coal mining, construc tion, and service industries. Both em ployment and wage payments were above last year. A marked improve ment in plant activity in June is indi cated in several important lines of manufacturing, as shown by early re ports on employment and payrolls. Retail trade sales declined slightly less than usual from April to May, WORKING HOURS AND HOURLY EARNINGS PHILADELPHIA FEDERAL RESERVE DISTRICT PENNSYLVANIA FACTORIES PERCENT HOURS CENTS PRODUCTION (adj. tor SEAS, variation} EARNINGS PER HOUR (avg.) EMPLOYMENT PAYROLLS HOURS WORKED' 1934 Page Two 1936 1936 1939 1933 1934 1939 1936 1937 1938 1939 while sales at wholesale were sub stantially larger. Dollar sales in both channels of trade were again well above a year ago. Inventories declined in April and continued smaller than in 1938. Trade activity in June ap parently has been well maintained, though some seasonal slackening has been in evidence. Prices of staple industrial commodi ties increased in May and June, owing principally to higher quotations for hides, silk, and steel scrap. Following a sharp advance in May, prices of farm products have declined as grow ing conditions in the grain belt have improved. The wholesale price index of 813 commodities compiled by the Bureau of Labor Statistics continued to decline and in the week ended June 17 was 75.4 per cent of the 1926 average compared with 75.9 a month earlier and 78.4 in the corresponding period of 1938. Manufacturing. The demand for fac tory products in this district showed little change from the middle of May to the middle of June except in the case of building materials. Inquiries for these materials, stimulated by the current high level of residential con struction activity, increased in the month, while there appeared to be less interest in the market for metal and textile products. The volume of current sales of con struction materials has been increasing substantially, while sales of other man ufactured goods continue about the same as in early May. Backlogs in most lines have not changed materially for several months. Inventories of both raw and finished goods are still at minimum levels in contrast to a year ago when a sub stantial volume of surplus stocks had yet to be worked off. Prices of fin ished goods in all reporting lines are well below last year. Preliminary reports indicate that factory employment and payrolls in Pennsylvania in June increased al though usually there is a seasonal de cline in the latter. The most favor able comparisons with May are in the iron and steel and miscellaneous man ufacturing groups. Activity at tex tile mills continues rather sluggish. Factory employment declined about 2 per cent and payrolls 1 per cent from April to May, when there is usually no change. Employment, however, was still 7 per cent above a year earlier, when the sharp contraction in activity was in progress, and 9 per cent above the low point reached last summer. 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. 1938 1939 1939 1939 May 1939 fro m Month Year ago ago Industrial production........ Manufacturing—total............... Durable goods....................... Consumers’ goods................. Metal products...................... Textile products.................... Transportation equipment. Food products........................ Tobacco and products......... Building materials................ Chemicals and products.... Leather and products.......... Paper and printing............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output..................................... Sales, total J............................ Sales to industries!............... Not adjusted Per cent change 69 r 65 r 56 r 75 51 58 52 r 79 94 34 108 116 87 62 64 46 442 80 78 78 75 70 70 88 83 63 64 85 76 71 71 77 76 101 98 37 41 110 110 123 118 86 85 61 71 61 80 65 1 418 436 77p 74p 69p 82p 64 73p 74 80p 106 34p 107p 113p 87 69p 73p 33 423 _ — _ 238 222 151 253 260 248 244 165 174 268 252 166 + + 1 1 2 1 _ 1 — 5 + 4 + 5 + 8 9 — 3 — 4 + 2 4 — 9 + 2446 — 3 Employment and wages— Pa. Factory—Wage earners......... Payrolls.................................. Man-hours (1927-28 = 100) General (1932 = 100) Employment. Payrolls. + + + + + + + + + — + + + — 13 14 23 10 24 25 43 1 1-' 2 1 2 i a 14 28 4 1939 from May Mar. Apr. May 1938 1939 1939 1939 5 mos. 1938 79 77 13 68 15 64 r 78 74 17 15 13 51 64 63 88 r 73 37 57 23 54 r 75 75 76 74 2 77 7 92 93 89 19 36 35 37 4 97 110 112 2 105 127 117 87 87 0 87 52 74 + 14 61 50 83 + 17 64 1 67 5 42 459 426 449 + 12 + + + + + + + + + + + + 3 + 12 + 12 222 3 + 14 + 12 213 5 + 10 + 14 154 _ 2* + 7* + 3* 70 1* + 13* + 13* 65 1* + 18* + 16* 55r + + 1* + 2* + 0* 7* + 3* 100 6* 131 258 254 245 252 157 176 76 78 68 103 147 76 74 65 77p 73p 64 7 Op 77 78p 103 35p 109p 103p 88 68p 73p 30 440 249 242 170 75 73 64 99 r 100 136 139 Building and real estate Contracts awardedf—total........... 50 Residential!................................... 26 Nonreside ntialf............................ 80 Public works and utilities!.... 59 Permits for building—17 cities... 13 Real estate deeds—Philadelphia!. 49 Writs for Sheriff sales—Phila.. . . 535 59 51 50 47 60 51 105 86 21 12 44 45 249 260 60 53 54 96 25 49 277 + 21 + 106 — 32 + 62 + 87 + i - 48 + 19 + 13 + 5 + 12 + 100 + 8 + 7 + 22 60 +m 33 89 — 27 + 48 69 + 71 15 0 47 28 562 — + + — + + — — + + - + 5 + 5* 55 60 48 54 56 57 69 80 26 18 41 44 254 273 72 67 61 112 28 47 291 Distribution Retail trade 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.......... 67 80 r 78 77 77 77 72 77 77 77 49 50 52 62 63 64 53 60 32 55 58 49 77p + 75p + 0 3 7* 3* + 0 4* 3* _ 10* + 3 4 + 51 16 6 6* 2* 7 44* 7* 8* 12 16 7 + 14 + 44* 6* _ 5* + 12 + 15 + 3 70 r 80 r 75 80 82 79 82 86 86 77 107 128 123 86 118p 126 119 122 132 r 125 136 122p 50 1 59 52 r 56 61 62 61 52 45 62 29 48 Business liquidations Number............................. Amount of liabilities___ + 14* + 98* + 19* 71r 129 123 20* - 9* 5* 33 r 91 37 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ 81 30 84 82 34 30 88 32 + + 7 + 9 7 + — _ — 2* 6* 5* j* 3* 3* 3* 141 30 7 80 82 83 87 30 + 9 0* 0* 81p 75p 33 31 33 78 67 72 82 79 81 77 77 66 70 80 76 78 73 76 64 69 80 77 78 73 76 64 68 81 76 79 75 Prices—United States Wholesale (1926 = 100). Farm products............... Foods................................ Other commodities.... Retail _ + food....................... Philadelphia................... Scranton.......................... + + 1* 0* 0* 1* 2* _ _ _ _ - 4* 6* 5* 3* 3* 3* 3* % change from Feb. 1939 May 1938 (In millions of dollars) Mar. 1939 May 1939 Apr. 1939 Month ago Year ago Banking and credit Federal Reserve Bank $ 1.6 213 388 74.6 $ 1.2 209 401 76.7 S 0.5 209 410 77.3 $ 0.2 210 444 77.7 $ 0.3 210 466 78.3 + 50 0 + 5 + 1 —81 — 1 +20 + 5 $ 422 656 1385 10.4 8 407 723 « 411 719 1455 9.6 $ 411 707 1487 9.0 $ 411 700 1504 8.2 0 — 1 + 1 - 9 — 3 + 7 + 9 -21 Reporting member banks Bankers’ acceptances outstanding. 9.7 * Computed from data unadjusted for seasonal variation, t Not included in production index. ! 3-month moving daily average centered at 3rd month. Preliminary. r—Revised. ” cash items in process of collection. Page Three TEXTILE ACTIVITY STEEL PRICES AND INGOT PRODUCTION EMPLOYEE-HOURS IN PENNSYLVANIA PERCENT PERCENT CARPETS AND RUGS PRODUCTION UNITED STATES WOOLEN AND LWORSTED t i GOODS g PRICES or FINISHED ■ STEEL ■ MENS CLOTHING STtp-PRODUCTION ML. PHILA FED RES. DISTRICT , 1932 1933 1934 1935 1936 1937 Wage payments were over 13 per cent above May of last year and 20 per cent higher than in July. The decline from April to May re flected decreased operations at railroad repair shops and at plants producing such nondurable consumers' goods as apparel, shoes, and leather goods. Payrolls were well sustained at mills producing textiles other than clothing, particularly in the case of woolens and worsteds to be used in fall suitings. At iron and steel mills, the level was maintained from April to May, despite a customary small decline. Plants handling food and lumber products reported sharper than seasonal in creases. Hourly earnings of factory work ers continued near the April level of about 69 cents, which is approximately the same as the rate that has prevailed since the sharp increases in 1936 and early 1937. At Delaware factories there was practically no change in employment from April to May, while payrolls declined about 1 per cent. The num ber of workers employed was 15 per cent higher than in May 1938, and wage payments were 19 per cent greater. Factories in southern New Jersey likewise reported little change in em ployment and payrolls from April to May. The number on the rolls, how ever, was 10 per cent greater than in May last year and wage disbursements were 15 per cent greater. The output of manufactured goods' in May declined 1 per cent further, after having receded the month before from the March peak. The level of activity, however, was 14 per cent higher than a year earlier and in the Page Four 1938 1939 1935 first five months averaged 15 per cent above the corresponding period of 1938, when industry and trade were receding sharply. In May the production of durable goods declined about 2 per cent on a seasonally adjusted basis and the out put of consumers’ goods was 1 per cent smaller. The 1937-38 recession in activity was much the sharper in the case of durable goods, output declin ing 48 per cent from April 1937 to a low in June 1938 as against a decline of only 34 per cent in consumers’ goods between December 1936 and January of last year. Since then the produc tion of durable goods has recovered about one-third of the decline, while the consumers’ group has regained about 40 per cent of its loss. The reduction in output from April to May of this year in the durable group reflected sharp decreases in the production of brick, cement, and by product coke. In the consumers’ goods group the output of shoes and certain textiles declined substantially. Some part of the loss was attributable to the current high price of silk, which has influenced hosiery and silk goods mills to curtail operations. The weaving of carpets and rugs was also reduced substantially further in May, after hav ing increased sharply from last July to March of this year. The output and total sales of electric power in May declined 3 per cent less than usual from the April levels. Sales to industry, on the other hand, de creased 5 per cent more than was to be seasonally expected. Coal and other fuels. Sales of anthra cite coal have decreased considerably in the past month, reflecting less active buying of household fuel and a decline 1936 1937 1938 1939 in the demand from industrial con sumers whose purchases had been un usually large during the soft coal shut down. Output of hard coal slackened, following the resumption of operations at bituminous mines about the middle of May, and continued low through the first three weeks of June. Both production and shipments, however, were well above the 1938 level. Purchases of Pennsylvania bitumi nous coal have expanded sharply as railroads, public utilities and manu facturing plants replenished stocks which had been greatly depleted by the six weeks’ closing of mines in the Appalachian region. Output was substantial in the latter part of May and increased further in early June. The shortage of bituminous coal further curtailed the output of by product coke in May, but production continued larger than a year ago. Out put of gas and fuel oils also slackened somewhat in the month, following marked increases in March and April. In the first five months of this year, however, production was 8 per cent greater than in the same period of 1938. Building and real estate. Awards of building contracts in this district in May increased 20 per cent to $20,855, 000. This total was more than double that of a year earlier and, with one exception, it was the largest reported since October 1931. Although the value of contracts let for commercial buildings, factories and unclassified structures was below the April volume, all other classes of construction showed substantial increases, the gains being particularly sharp in the case of apart ments and hotels, and educational in stitutions. Contracts for family houses in May were the largest in over two VALUE OF BUILDING CONTRACTS RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT SALES INDUSTRIAL RESIDENTIAL ■STOCKS 1935 1937 1936 1938 years, and were 66 per cent above the 1938 level. Contract awards in the first five months of 1939 approximating $79, 000,000 were 22 per cent more than in the same period last year. In the case of family houses, the most im portant single classification, the in crease over 1938 was 74 per cent. Awards for this class of construction have comprised 30 per cent of the total thus far this year as against 21 per cent a year ago. Building contracts Philadelphia Federal Reserve District Per cent change May 1939 (000’s From 1939 omitted) month from ago 5 mos. 1938 Residential........................... $10,309 Apts, and hotels............. 4,422 Family houses................. 5,887 4,203 Non-residential.................. Commercial..................... 1,081 Factories.......................... 873 Educational..................... 1,288 961 All other........................... + 69 + 851 + 4 - 33 - 11 - 68 + 1551 - 57 +m +335 + 74 - 27 - 3 + 180 - 70 - 33 Total buildings........... $14,512 Public works and utilities. 6,343 + + 17 29 + 15 + 48 Grand total................. $20,855 + 20 + 22 Source: F. W. Dodge Corporation. The local real estate situation con tinues to show improvement, as indi cated by a more active renting demand for small houses and apartments, and increased sales of new residences rang ing in price from $4,000 to $6,000. The market for commercial and factory space, however, remains limited. The number of industrial properties avail able for sale or rent is still substantial. Wholesale prices of building mate rials continued to fluctuate narrowly. In the week ended June 17 the index of the Bureau of Labor Statistics was 89.5 per cent of the 1926 average, compared with 89.3 a month earlier 1939 1933 1934 and 89.8 a year ago. The general level of wholesale prices in the week of June 17 was 75.4 as compared with 78.4 in the same week last year. Agriculture. Growing conditions in this district improved considerably in early June when beneficial rains re stored top soil moisture. The condi tion of pastures and meadows is de cidedly more favorable than a month ago, and the growth of corn, early potatoes, and garden vegetables has been stimulated. A substantial part of the oats crop, however, has been permanently stunted by insufficient moisture earlier this season. Winter wheat and rye have matured rapidly and are being harvested in a few of the southern counties. The first cutting of hay is nearly completed, with unusually small losses reported in cur ing. The condition of orchard fruits continues to compare favorably with a year ago and the ten-year average. This is especially true of commercial varieties of apples. Receipts from marketings of crops and livestock products in Pennsyl vania, New Jersey and Delaware did not measure up to seasonal expecta tions in April. Total sales of agri cultural coihmodities in these states in the first four months of 1939 were about 4 per cent less than a year ago. Distribution, trade and service. Retail trade sales in this district during May continued near the high level of the month before, although usually there is a small decline from April. The slight improvement in the adjusted index was the first reported in four months. Preliminary returns indicate that volume also was well sustained through the first three weeks of June. The uncertainty in general business 1935 1936 1937 1938 1939 conditions has been retarding the cus tomary expansion in retail sales, so that spring trade activity has been somewhat smaller than usual. Despite declines in February, March and April, however, the adjusted index of retail sales in May was 16 per cent above a year ago, when the low point in the 1937-38 recession was reached. In the first five months the dollar volume of sales was about 5 per cent larger this year than last. Improvement from April to May was reported by department stores, women’s apparel shops, and credit es tablishments selling furniture, electrical household appliances and other durable consumers’ goods. Sales by men’s apparel stores were about the same as in April, although ordinarily there is some increase. Shoe stores reported a decline in business instead of the customary expansion. In the wholesale trade, substantial gains in sales from April to May were registered in nearly all reporting lines, the aggregate volume of business in creasing about 7 per cent. Sales have increased in the past several months, owing in part to a larger volume of fill-in orders necessitated by the low level of inventories in retail outlets. Dollar sales at wholesale were 6 per cent above May 1938 and in the first five months averaged 5 per cent larger this year than last. Inventories in both channels of trade declined about 3 per cent from April to May and continued below the levels prevailing a year ago, when sales Vol ume was smaller. Forward buying is still greatly restricted, and stocks are being moved more rapidly than usual. Shipments of freight by rail increased about 3 per cent more than usual from April to May owing to the sharp ex Page Five pansion in the movement of coal, which was curtailed in the previous month by the closing of bituminous mines. Freight-car loadings, consist ing chiefly of manufactured goods originating in the Philadelphia area, declined in May and early June. Registrations of new passenger auto mobiles were 4 per cent fewer in May than in April as the seasonal peak in spring purchases of new cars was passed. Sales, however, were 44 per cent greater in May and in the first five months of the year than in the corresponding periods of 1938. Income of nonresort hotels in this district declined 10 per cent from April to May and was 8 per cent below a year ago. Hotel business Philadelphia Federal Reserve District May: per cent change from 1939 from Month Year 5 mos. 1938 ago ago Room occupancy.................... Per cent of capacity used: May 1939................ 50.5 Apr. 1939................ 52.0 May 1938................ 54.2 Revenue from: Guest rooms......................... Food..................... Other sources....................... + o - 3 — 1 - 7 - 6 - 5 -14 -13 — 9 -10 - 3 — 7 — 4 — 2 Total revenue.................. -10 - 8 — 5 Banking conditions. The reserves of member banks on June 21 aggregated $498,900,000, the largest volume on record. The average of $491,600,000 in the first fifteen days of the month likewise was the largest for any half month and was $94,500,000 greater than a year earlier. The recent ex pansion has been due largely to trans fers of funds to this district in con nection with the sale of new tax anticipation notes by the Common wealth of Pennsylvania. In the first half of June the excess reserves of member banks averaged $210,000,000, the proportion to requirements being 81 per cent at Philadelphia banks and 62 per cent at banks elsewhere in the district. Member bank reserves (Dollar figures in millions) Philadelphia banks: 1939—May 1-15 May 16-31 June 1-15 1938—June 1-15 Country banks: 1939—May 1-15 May 16-31 Jure 1-15 1938—June 1-15 Held Re Ex quired cess $318.8 S181.7 $137.1 313.1 181.1 132.0 337.8 186.8 151.0 260.5 165.4 95.1 149.7 151.2 153.8 136.6 94.7 94.4 94.7 91.1 55.0 56.8 59.1 45.5 Ratio of excess to re quired 75% 73 ” 81 * 57 ” 58 60 62 50 • w » * Federal Reserve Bank of Philadelphia (Dollar figures in millions) June 21, 1939 Changes in— Four weeks Reporting member banks (000,000’s omitted) One year Bills discounted.......... $ 0.4 Bills bought............... 0.1 Industrial advances .. 2.5 U. S. securities............ 206.9 +*0.1 - 0.0 - 0.1 0.0 —$ + — - Total.......................... Note circulation......... Member bank deposits LI. 8. general account. Foreign bank deposits Other deposits............. I otal reserves.............. Reserve ratio............... + S0.0 - 3.0 +35.4 — 0.6 + 7.0 - 0.7 + 39.8 + 1.1% -$ 4.9 + 12.5 + 120.5 — 7.1 + 19.7 + 3.2 + 154.6 + 4.9% $209.9 313.0 498.9 45.5 34.4 4.7 710.1 79.2% 0.9 0.0 0.4 3.6 Chang esin— June 21, 1939 Four One weeks year Assets 400,000 in member bank reserves in the four weeks ended June 21. Treas ury disbursements locally were nearly $2,000,000 larger than receipts, de spite a heavy movement of funds into the Treasurer’s account in payment of the quarterly installment on the income tax. Funds supplied to the banks from these sources were some what reduced by a small increase in currency demand and a decline in re serve bank float. As a result of widespread holdings of surplus funds and the sluggish de mand for credit, borrowings by mem ber banks from the Federal Reserve Bank of Philadelphia have continued negligible, currently amounting to less than half a million dollars. On June 21 only nine banks were receiving discount accommodation. There was a sharp increase in de posits at reporting member banks in leading cities to $1,549,000,000, which was a new record. The expansion of $37,000,000 in the past four weeks has been chiefly in balances of states and local governments and in funds to be held for other banks. Outstand ing credit increased only $4,000,000 to $1,118,000,000, most of the additional funds received being left on deposit with the Federal Reserve Bank. The increase in credit reflected pur chases of securities. Holdings of guaranteed obligations and of corpo rate and municipal securities increased $7,000,000 and $4,000,000 respectively, while the investment in direct issues Open market paper................ Loans to brokers, etc............. Other loans to carry secur. . $ Other loans............................... 188 24 -* i 20 - 3 32 53 1 93 + 2 —$ + + — — + Total loans........................... $ 411 -$ 2 +* i Government securities........... $ Obligations fully guaranteed 340 103 264 -$ 5 + 7 + 4 +$ 7 + 13 Total investments.............. * 707 +$ 6 + *20 Total loans & investments $1,118 + * 4 Reserve with F. R. Bank . . . 359 + 37 Cash in vault........................... 18 + 1 Balances with other banks. . 191 — 2 Other assets—net................... 101 - 1 + *21 + 104 + 1 + 32 - 3 Liabilities Demand deposits, adjusted . $ Time deposits........................... U. S. Government deposits.. Interbank deposits.................. 854 280 53 362 + S28 + *79 — 1 — 11 + 33 + 10 + 58 Other liabilities........................ Capital account....................... 14 224 + + 1 1 - Page Six 3 1 of the United States Government de clined $5,000,000 to $340,000,000, the smallest amount held since last Sep tember. The volume of loans has fluctuated narrowly in recent months and in the past four weeks dropped off $2,000, 000 to $411,000,000 as a result of re payments by brokers and dealers in securities. Commercial loans show no net change in this period and, at $188, 000,000, are about 2 per cent under a year ago. On June 21 deposits at the report ing banks were $235,000,000 above the low point in March 1938, showing an increase of 18 per cent. Half of this gain has been in deposits of in dividuals, corporations, states and mu nicipalities and the remainder chiefly in interbank deposits. Outstanding credit shows an increase of only $38, 000,000, loans declining $25,000,000 and investments rising $63,000,000. Reserves and balances with cor respondents, on the other hand, have increased $193,000,000 to $550,000, 000 and now are equal to approximately 279 per cent of required reserves. MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending— May 31 June 14 June 21 Changes in four weeks — 1.4 +0.6 —3 2 + 0.9 + 33.4 + 5.5 — 1.1 — 15.8 + 0.4 + 18.4 - 2.7 — 1 2 +36.6 + 1.8 + 39.8 -14.7 + 16.1 +37.2 +4.8 —7 6 — 1 .1 —0 1 Sources of funds: Reserve bank credit extended in district........................... Commercial transfers (chiefly interdistrict)... June 7 -4.0 Philadelphia Federal Reserve District (Millions of dollars) - 1.1 + 40.8 + 0.1 - 6.6 + 2.6 -18.4 + 1.2 - 0.1 +20.6 - 0.9 + 0.9 + 1.8 +35.4 - 0.7 + 0.7 -4.0 + 39.8 -14.7 + 16.1 Uses of funds: A gain of more than $36,000,000 in commercial and financial transac tions with other districts was chiefly responsible for an increase of $35,- 3 3 4 2 1 1 i Member bank reserve deposits...................... “Other deposits” at reserve bank.................... . Other Federal Reserve accounts...................... Total.................................................................. 1 Employment and Payrolls in Pennsylvania INVESTMENTS OF ALL MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes US GOVERNMENT OBLIGATIONS Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and change from group indexes are weight May change from May 1939 1939 ed proportionately.) index April May index April May 1939 1938 1939 1938 OTHER SECURITIES All manufacturing .. 75 Iron, steel and prods. . . . 67 | Non-ferrous metal prods . 106 6 Transportation equip.. . . 51 ^ Textiles and clothing. . . . 90 Textiles........................... 86 [f Clothing.......................... 107 Food products................... 102 Stone, clay and glass.... 68 Lumber products.............. 55 Chemicals and products . 84 Leather and products.... 84 Paper and printing........... 97 Printing........................... 92 Others: Cigars and tobacco... . 58 Rubber tires, goods . . . 78 Musical instruments .. 58 STATE AND MUNICIPAL SECURITIES '30 ’31 '34 ’35 '36 37 BOND YIELDS PERCENT —2 -0 +0 -5 -4 -3 -8 +2 -5 +7 +1 —8 -0 +0 + 7 + 6 + 5 + 13 + 9 + 10 + 7 + 2 + 5 + 12 + 3 + 4 + 4 + 3 73 74 121 47 77 75 89 108 64 49 88 70 99 96 * Figures from 2352 plants. May 1939— per cent change from April May 1939 1938 — 1 - 0 + i - 7 — 2 — 1 - 7 + 7 - 5 + 12 - 7 -21 + 0 + 1 + 18 + 22 + 17 + 36 + 19 + 19 + 19 + 2 + 9 + 12 + 5 - 2 + 3 - 1 50 + 10 — 9 + 12 91 + 2 +23 + 2 49 -14 +36 -13 +3 - 6 -2 + 8 — 2 + 38 — 1 - 1 + 2 — 9 - 3 - 0 -12 + 8 - 3 + 14 - 3 -15 — 1 - 1 Employehoursf + 13 + 20 +ii + 16 + 12 + 11 + 15 + 4 + 8 + 20 + 5 + 4 + 5 + 4 -11 + 19 + 29 t Figures from 2115 plants. US TREASURY General Index Numbers Covering twelve branches of trade and industry CORPORATE Aaa Payrolls Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) CORPORATE Baa General index (weighted)___ ’29 ’30 '31 '32 '33 '34 '35 '36 '37 Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing .. . Public utilities.............................. Retail trade................................... Wholesale trade........................... '38 Laundries....................................... Dyeing and cleaning................... Percentage change—May 1939 from May 1938 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre.... Wilmington.......... Y ork....................... Wage payments Building permits (value) Debits + 6 + 76 + 0 — 0 + 9 + 9 + 17 — 3 + 7 - 0 + 5 + 18 + 6 + 14 + 159 + 8 + 28 + 15 + 16 + 19 - 5 + 17 + 3 + 15 + 21 + 14 +369 + 324 + 100 — 18 - 39 + 168 - 18 - 67 — 43 + 78 — 53 - 15 — 55 +n + 10 + 0 + 1 +11 + 13 +25 + 14 + 34 + 10 + 8 + 15 + 11 — — — — — + + - 1 — 15 - 7 - 0 — 2 + i — 5 — 9 — 0 - 1 + 2 - 2 + 3 May 1939 index 100 118 69 39 56 102 132 93 105 114 109 98 104 Wilmington.......... York....................... 2 2 4 0 1 1 2 6 1 5 0 i i +299 + 100 + 24 - 28 — 57 + 89 + 87 - 60 + 122 + 63 + 90 + 138 + 7 - 2 + 0 + 0 - 3 - 7 + 10 + 4 + 18 + 8 + 9 + 3 ~11 - 4 April 1939 May 1938 + + 0 + 7 - 2 -61 - 3 + 2 — 12 - 0 + 2 + 2 - 4 - 4 - 8 1 2 — 1 +296 + 8 + 3 + 1 + 1 + 2 — 0 + 1 + 3 + 6 Per cent change from May 1939 index April 1939 + 2 - 1 + 31 + 39 + 18 + 15 + 0 + 3 + 2 + 1 + 2 + 10 +20 139 179 97 21 78 188 154 104 122 116 122 130 138 May 1938 + 7 + 13 +47 -84 - 0 +n - 9 + 3 + 1 + 1 — 5 + 3 — 1 Retail trade sales + 13 + 15 + 1 + 10 + 8 + 21 + 13 + 9 + 14 + 12 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES OF TRADE i J32AVG.-100 p AYROLLS \ + 20 + 6 — 13 + 14 - 0 — 5 + 12 + 2 — 11 + 2 + 2 - 6 + 8 - 6 AND INDUSTRY , /VM V 1\ tSi v J May 1939 from April 1939 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Per cent change from A A. v --..—1933 r* ■i 0» ■'V * r* \ /• n* — 0YMENT EMPL 1934 1935 1936 1937 1938 1939 * Area not restricted to the corporate limits o f cities giver^bere. Page Seven OUTPUT OF MANUFACTURES PHILADELPHIA FEDERAL RESERVE DISTRICT A0JUJTCD rod SCAS0N/U. VARIATION STEEL PERCENT! Index numbers of individual lines of trade and manufactures IMJ-2JAVC . IOO 100 75 50 Philadelphia Federal Reserve District 25 LOCOMOTIVES AND CARS Index numbers: percentages of the 1923-1925 average as 100 50 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted Per cent change Unadjusted indexes reflect merely the actual change which may or may not Mav Mar Apr. May be typical. 1938 1939 1939 1939 May 1939 fr am Month Year ago ago O 1939 from 5 mos. 1938 SILK May Mar Apr May 1938 1939 1939 1939 Stocks of goods 100 \T 75 50 Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ 25 25 67 59 r 60 r 90 69r 74 r 80 r 54 r 107 r 73 r 104r 78 70 67 89 85 97 77 68 74 96 94 82 77p + 0 71 + 3 73p — 2 97 + 1 80p -16 84p + 3 77 77 52 51 52 104 108 100 73 71 70p 101 97 95p — + — — — + + + + + + 16 + 18 + 21 + 8 — 15 + 14 + 70 r 60 r 57 r 89 r 90 r 81 75 82 81p 65 67 70 62 70 70p 105 116 96 90 110 104p 85 92 92p 5 80 r 55r 107 r 77 8 100 80 79 75p 53 53 52 114 107 100 76 76 104 99 91p 3 — 6 5 1 3 7 6 1 5 5 7 3 2 _ _ _ 6 WOOLENS AND WORSTEDS iOO \ v\ 75 50 25 HOSIERY 125 IOO Rate of stock turnover + 13* 1.48.. 1 67 Wholesale trade 75 50 Sales CEMENT _|_ 7* + 6* + 4* + 11* + 4* + 11* + 9* + 1* — 2* + 6* + 2* + 4* + 8* + 13* 2* + 17* + 10* + 9* + + + 5* 7* 7* 75 25 vV A /~W\ 50 + 19* 1* + 10* + 27* + 7* f J /v> V LUMBER PRODUCTS 50 Stocks of goods — + — _ — — _ 3* 1* 7* i* l* 9* 4* — _ + 2* 1* 1* 25 5* _ 9* 6* _ + 17* PAPER AND WOOD PULP 100 75 50 Output of manufactures Pig iron.................................................. 30 39 35 38 Steel....................................................... 47 58 57 56 Iron castings........................................ 50 47 50 50 Steel castings....................................... 35 62 71 72 Electrical apparatus.......................... 64 78 81 84 Motor vehicles..................................... 12 19 17 17 Automobile parts and bodies......... 38 54 54 58 Locomotives and cars........................ 19 15 16 19 Shipbuilding......................................... 234 322 332 335 77 85 82 r 76 Silk manufactures............................... Woolen and worsteds........................ 38 60 47 55 Cotton products.................................. 28 42 r 40 r 43 Carpets and rugs................................ 54 146 113 106 Hosiery.................................................. 84 109 100 95 Underwear............................................ 121 131 142 139 Cement.................................................. 59 75 62 48p Brick...................................................... 23 35 32 28 Lumber and products....................... 26 24 24 28 Slaughtering, meat packing............ 95 103 96 Sugar refining...................................... 67 66 82 Canning and preserving................... 64 57 60 Cigars.................................................... 93 100 97 Paper and wood pulp........................ 63 71 70 Printing and publishing................... 91 89 89 Shoes...................................................... 158 150 132 Leather, goat and kid....................... 76 r 98 106 Explosives............................................ 64 76 67 Paints and varnishes......................... 77 78 77 Petroleum products........................... 155 14b 153 Coke, by-product............................... '65 99 86 + 6 - 3 - 0 + 2 + 3 - 0 + 8 + 22 + i - 7 + 17 + 7 - 7 - 6 — 2 -23 -14 + 16 + 11* 104 + 8 57 -30 62p + 4 10b + 8 71 + 2 90 + 2 126 — 4 lOlp - 4 72 + 7 79 + 2 148p - 3 69 -20 * Computed from data unadjusted for seasonal variation. + 27 + 19 — 1 + 103 + 31 + 36 + 53 + 1 + 44 — + + + + + 1 44 57 95 12 15 — 18 + 23 + 9 + 6* + 9 — 15 — 3 + 13 + 13 — 1 — 20 + 33 + 12 + 3 — 4 + 5 + + + + + + + 28 21 8 35 1 9 24 28 + 31 + 17 + 58 + 37 + 149 + 29 + 26 + 19 + 26 + 5 + 2* + 11 + 5 — 1 + 8 + 11 — + — + + + 31 49 52 37 59 16 40 19 241 74 36 27 53 84 122 67 24 24 88 95 82 48 90 63 2 92 11 144 26 69 3 65 6 81 2 L55 20 68 p—Preliminary, 45 63 50 69 72 40 60 52 72 71 39 59 52 75 77 20 21 21 59 59 17 17 335 339 88 80 58 43 45r 42 r 144 106 114 100 142 139 57 62 34 34 23 23 89 85 r 99 94 101 106 50 50 92 88 72 70 90 90 159 132 97 102 76 68 79 81 144 153 102 90 61 19 345 73 51 42 102 95 140 30 26 94 103 70 50p 101 71 91 115 92p 73 84 148p 71 r—Revised. SHOES 200 175 150 125 IOO GOAT AND KID LEATHER 150 M 125 A\ IOO 75 vwy S ....J PETROLEUM REFINING 175 150 150 _ _ CIGARS 125 100 75 50 1935 Page Eight 1930 1937 1938 1939
@FedFRASER