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THE BUSINESS REVIEW ■*> Ay,r.h,,,. FEDERAL RESERVED Ar% Cje OF PHILADELPH^ *•vA <?c<9 % % % JULY 1, 1941 '<5. \ * Trade and industrial activity is expanding fur ther, and additional gains are in prospect even though operations are at or approaching capacity in several basic lines. Both public and private demand is strong, and sales and backlogs gen erally have expanded. New plants are coming into production; existing space and facilities are being enlarged; and the use of subcontracting is becoming more widespread. An expanding pro portion of current output is for defense, and scarci ties of some types of materials and labor for civil ian production are increasingly in prospect. Productive activity in the Third Federal Reserve District increased substantially from April to May, and further gains were in evidence in early June. The output of manufactures, particularly heavy goods, increased in the month; operations at coal mines expanded to earlier high levels following the curtailment in the bituminous coal industry dur ing April; production of crude oil increased about seasonally; and the output of electric power ad vanced when there is ordinarily a small decline. Building activity increased from April to May, and a substantial volume of new contracts was awarded. Residential building continues to ex pand, and the construction of factories and the renovation of commercial buildings have been at unusually high levels. Consumer incomes continue to increase. Factory wage rates have reached new peaks, and under the pressure of defense production hours of work have lengthened. Large earnings in heavy manufactur ing industries appear to be attracting labor from other lines. Farm income is also considerably above the levels of 1940. The volume of retail trade is large. A wide variety of goods is being bought, particularly in heavy lines such as refrigerators and automobiles where production may compete with defense in dustries when scarcities of labor and materials become more acute. Sales at wholesale are also large but have been restricted somewhat in certain lines by inability to make prompt delivery. The movement of rail freight has expanded to new peaks, with further sharp increases in prospect this summer and fall. Prices of basic materials have advanced sub stantially during the past month, and widespread increases have been reported in quotations on manufactured goods. The cost of living has been rising more rapidly in recent months, the principal increases being in prices of foods. The demand for bank credit continues strong. The government requires increasing amounts to meet defense and other expenditures, and industry and trade need additional working capital to carry larger inventories and to pay higher costs for ma terials and labor as operations advance to new high levels. Outstanding credit at reporting banks in this District has increased further in the past month. Deposits and reserves have recently been re duced, partly by large payments to the Treasury for income taxes and purchases of securities. The mar kets for securities are steady and quiet. Trading has been restricted somewhat, owing to widespread uncertainties in domestic and foreign conditions, but the volume of funds available for investment con tinues large. Page One EMPLOYMENT AND PAYROLLS IN PENNSYLVANIA INDUSTRIAL AND TRADE ACTIVITY PHILADELPHIA FEDERAL RESERVE DISTRICT PER CENT PER CENT PRODUCTION PAYROLLS RETAIL TRADE SALES EMPLOYMENT ADJUSTED FOR SEASONAL VARIATION 1936 1937 1938 1939 1940 1941 Manufacturing. The demand for factory prod ucts is increasingly strong. Sales are sharply above a year ago and are expanding further in lines where deliveries can be made within a reasonable time. Defense purchases are increasing and in some cases, such as at steel and certain textile mills, plant capacity is booked for several months in advance. Some producers are no longer accepting new specifications, but advance ordering and back logs generally have increased further. Heavy cur rent and prospective demand, shortages of some types of key materials and labor, and rising costs have resulted in widespread advances in prices. 1935 1936 1937 1938 1939 1940 1941 Substantial gains from April to May were re ported by the iron and steel industry, particularly blast furnaces, forges, foundries, and factories pro ducing machinery and electrical apparatus. Large increases also occurred in all lines of transporta tion equipment. In the case of consumers’ goods, the principal increases were at textile mills pro ducing cotton and woolen goods and floor cover ings, at dyeing and finishing plants, and at men’s clothing factories. Hourly earnings of factory workers have in creased to a peak of 79-*/2 cents, or about 8 cents more than a year ago. Advances in basic wage Stocks of finished goods at reporting factories rates have been reported by more plants than at are declining further, but supplies of raw materials any time since early 1937. Weekly earnings have are being maintained at or above recent high levels. increased to an average of well over $32.00, or Operations have increased in virtually all report $6.00 a week more than in May 1940. ing lines, necessitating further purchases of equip In Delaware, employment increased 4 per cent ment and additions to plants. and wage payments 9 per cent from April to May to Factory employment and payrolls in Pennsylva levels sharply above last year. In southern New nia increased more than seasonally from April to Jersey, employment increased 3 per cent and wage May and advanced still further in June, when there payments 8 per cent in May. is ordinarily some decline. The largest recent The output of factory products in this District gains have been at plants producing heavy goods, also increased more than seasonally from April to although the increases are general throughout in May and advanced further in June. Gains in pro dustry. The number of workers in Pennsylvania duction in the latest month were widespread, al factories advanced about 2 per cent in May to an though in several lines seasonal decreases were to estimated 1,080,000 or about 200,000 more than be expected. The greatest improvement was in the a year ago. Wage disbursements increased 5 per output of transportation equipment and leather cent in the month to more than $32,000,000 a products and such textiles as cottons and woolens, week, about $11,000,000 a week more than in where government buying has been active. May of last year and the highest since the last The output of electric power increased some war. Wage payments in the heavy industries have what in May instead of showing the customary expanded 70 per cent in the past twelve months decline. Total sales were reduced less than sea and at plants manufacturing consumers’ goods the sonally and sales to industry expanded further. increase has been about 25 per cent. Page Two ACTIVITY IN THE STEEL INDUSTRY TEXTILE ACTIVITY EMPLOYEE-HOURS IN PENNSYLVANIA EMPLOYEE-HOURS IN PENNSYLVANIA FACTORIES PER CENT PER CENT FOUNDRIES WOOLENS AND / WORSTEDS STEEL WORKS AND ROLLING MILLS \ •A ]'\ -■2-.A TEXTILES 1936 1937 1938 1939 1940 1941 Coal and other fuels. Sales of fuels for domes tic consumption continue active. The demand for bituminous coal is unusually heavy, reflecting the high levels of factory operations and rail traffic and the efforts of dealers to replenish stocks. Con sumers’ purchases of anthracite also have been stimulated somewhat by the suggestion that sup plies for next winter be bought now to avoid over-taxing rail facilities in the fall. Prices of fuels generally are firm. Production of Pennsylvania anthracite increased more than usual from April to May and expanded somewhat further in early June. Colliery output averaged 148,000 tons a day in May compared with 123,000 tons in April but was below a year ago. The volume mined during the first five months in 1941 was the smallest since 1938. Following the virtual suspension of operations at bituminous mines in April, production rose sharply in May to a high daily average of 432,000 tons, the largest for the month since 1929. The output thus far this year has been the largest since 1937. 1937 1938 1939 1940 1941 Awards of building contracts in May declined 3 per cent to approximately $21,300,000. Sub stantial increases in contracts for residences and public works and utilities were offset by sharp declines from earlier high levels in awards for other types of construction. The value of contracts let for one- and two-family dwellings, which included defense housing projects in Philadelphia, was con siderably larger than in any month of the past 12 years, and accounted for nearly one-half of all contracts awarded in May. Aggregate awards exceeded the dollar volume of a year ago by 38 per cent, the sharpest increases being in contracts let for factory buildings. Quotations on building materials have risen nearly 13 per cent since the outbreak of war, most of this increase being in the second half of 1940. The advance since the turn of the year has been only about one per cent. Agriculture. Widespread rains have substan tially improved growing conditions in this District By-product coke ovens continue unusually active, since early June. Farm work continues to be im and production in May was 14 per cent above a peded by the shifting of agricultural labor to both year ago. Operations at oil refineries increased civilian and defense manufacturing industries. Consumer demand for farm products is increasingly somewhat from April but were below May 1940. active. Prices of most agricultural commodities Building. Activity in the building industry in are advancing steadily, and in the case of certain this District expanded further during May, al staples are the highest in several years. though the volume of new awards declined slightly. The yield of early garden vegetables was sharply Operations against existing contracts for manu curtailed by dry weather over much of the growing facturing plants and facilities were sustained at a high level, and further increases occurred in the season, but the outlook for later varieties has im case of dwellings and public works and utilities. proved considerably in the past several weeks. Wholesale prices of building materials reached a Production of the winter grains is expected to be new fifteen-year peak about the middle of June. smaller than in 1940 and somewhat below the Page Three FREIGHT CAR LOADINGS BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT ALLEGHENY DISTRICT PERCENT MILLIONS MERCHANDISE AND MISCELLANEOUS- TOTAL TOTAL RESIDENTIAL rV/v-K INDUSTRIAL 1936 937 1938 1939 1940 ten-year average, owing partly to insufficient mois ture in the early spring. The first crop of hay was unusually small and some fields were used for pasturage. The condition of other field crops such as oats, corn, and white potatoes is generally satis factory. Transplanting of tobacco in Pennsylva nia has been nearly completed and the early out look for the crop is favorable. Fruit prospects are somewhat less promising than at the beginning of the season. Farm cash income in Pennsylvania, New Jersey, and Delaware is expanding more sharply than in the spring of 1940, reflecting principally advanc ing prices. Receipts from the sale of crops and livestock products totaled $122,400,000 in the first four months of 1941, or nearly 10 per cent more than a year ago. Government benefit payments were decreased about 27 per cent in this period to approximately $3,600,000. 1936 1937 1936 1939 1940 1941 hold equipment. Purchases of automobiles were sustained in May at the record high levels reached in April. Sales of women’s apparel declined substantially less than usual in May, and sales by men’s apparel and credit stores were reduced slightly less than was to be expected. The only large decline in the month on a seasonally adjusted basis was in sales by shoe stores. Inventories at retail estab lishments were generally well maintained in May, and at most establishments were above last year. Buying in wholesale channels has been heavy. Business increased substantially in May and was about one-third larger than a year ago. The sharp est gains in the month were in sales of paper and groceries; in the year the largest increases have been in electrical supplies, hardware, and jewelry. Stocks of goods at wholesale establishments are somewhat small in relation to sales. Freight-car loadings in the Allegheny District Trade. Distribution of goods to consumers con increased 15 per cent from April to May to a tinues active. Wage income has already reached level about one-third above May of 1940. The record levels and is expanding steadily. Retail sales largest gains were in loadings of coal and coke, in May and early June were well maintained around shipments of which were sharply curtailed the the peak levels reached in April and were substan month before by the shutdown of bituminous mines. tially larger than a year ago. Wholesale trade Further increases were also reported in the move sales have expanded sharply, and further large ment of merchandise and miscellaneous materials. gains are in view as long as goods are available Shipments of ore increased sharply but not so for early delivery. The movement of rail freight much as seasonally, owing to the heavy volume has also increased substantially. of traffic in April accompanying the early opening Sales by department stores in May continued of the Great Lakes. The largest gains in the past at the high level reached the month before, and year have been in loadings of forest products, further increases were reported in the first two coke, ore, and coal, reflecting heavy defense re weeks of June. Buying has been well diversified, quirements. Freight shipments originating in Phil but particularly heavy in the case of such durable adelphia reached the highest levels in a decade in consumers’ goods as refrigerators and other house May and were well sustained in early June. Page Four REPORTING MEMBER BANKS MILLIONS MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT INVESTMENT IN US.GOV’T OBLIGATIONS (direct and guaranteed) TOTAL COMMERCIAL LOANS REQUIRED 1938 1939 1940 1941 Banking conditions. The volume of bank credit four weeks has been due largely to a further ad outstanding at reporting member banks in this vance of $10,000,000 in commercial loans to District has advanced to the highest point in nearly $286,000,000 or 32 per cent above a year ago. a decade. The demand for credit from industry and Requirements for working capital have increased trade has been exceptionally active over the past owing to the larger inventories required for higher month and other classes of loans also were in industrial operations, rising prices and wage costs, creased. Investments were reduced somewhat. and the extension of subcontracting in the defense Deposits declined considerably, reflecting tax pay industries. Smaller gains were shown in the four ments, the redemption of securities, and an increas weeks in loans to carry securities and real estate, ing demand for currency. and in the miscellaneous group, which includes personal and installment loans. The reserve balances of all member banks de clined $84,000,000 to $700,000,000 in the four The expansion in loans during the past month weeks ended June 18, but continue about double was offset to the extent of $10,000,000 by a decline requirements. Reserves in this District still exceed in holdings of securities. The investment in cor the level of a year ago by $32,000,000, although porate and municipal obligations was reduced a substantial reduction has occurred in the country $11,000,000 to the lowest point in two years and as a whole. The reduction in the past month has a decline also occurred in the case of guaranteed been due chiefly to losses in transactions with other securities. The increase in direct governments was districts, the withdrawal of funds from the market only $3,000,000 in spite of the recent new issue by operations of the Federal Government, and a of Treasury bonds. In the past twelve months the further unusually sharp increase in currency re investment in direct and guaranteed Treasury obli quirements. gations has risen $55,000,000 to one-half billion Net payments into the Treasurer’s account dollars or nearly two-fifths of the outstanding credit amounted to almost $40,000,000 in the period, of the reporting banks. in spite of continuing heavy expenditures on defense A contraction of $82,000,000 to $1,889,000,000 and the additional disbursements for interest on in deposits at these banks was caused largely by debt and routine governmental operations. Quar payments from state and municipal balances inci terly installments on the income tax were heavy, dent to the redemption of securities. On June and Treasury receipts were further increased by 18 cash assets, other than cash items, were equal the sale of savings securities and other bonds. to 40 per cent of deposits after similar adjustment. Cash subscriptions to the new per cent bonds This compared with 38 per cent at reporting banks of 1956-58 were $472,000,000 in this District and in 101 leading cities of the country. allotments aggregated about $38,000,000. Industrial advances by this Bank increased Loans of the reporting banks have increased $400,000 to $3,400,000 and discounts for member $87,000,000 in the past year to $539,000,000 on banks increased slightly to one-quarter million dol June 18. Expansion of $15,000,000 in the past lars. Holdings of governments were unchanged. Page Five BUSINESS STATISTICS Employment and Income Production in Pennsylvania Philadelphia Federal Reserve District Industry, Trade and Service Not adjusted Adjusted for seasonal variation May Apr. May 1941 1941 1940 1941 from May Apr. May 1941 1941 1940 Year mos. ago 1940 May 1941 from Mo. ago 108p 109p 129p 96p 133 88p Transportation equipment. . . 185 89p 110 53 Chemicals and products......... 140p INDUSTRIAL PRODUCTION MANUFACTURING................ 92 Individual Lines 89 110 88p 156 190 32 Automobile parts and bodies. 116 64 939 89 80 60 129 93 145 75 65 34 103 105 85p Canning and preserving......... 109 86 93 166 123p 159 94 163p 139 57 COAL MINING.......................... 51 101 CRUDE OIL................................ 391 ELEC. POWER—OUTPUT... 339 324 233 BUILDING CONTRACTS 97 TOTAL AWARDSt................... 71 109 Public works and utilities'}"... 141 Slaughtering, meat packing. . 83 r + 4 103 82 + 3 106 85 + 4 125 80 + 2 94 0 133 86 87 65 + 2 99 +13 163 84 + 3 86 114 -11 124 53 r 43 + 1 120 + 3 135 127 104 r +13 91 + 4 88 + + + + + + + + — + + + + 29 33 52 19 54 36 88 6 4 24 17 39 1 100 105 82 123 80 90 150 105 144 91 161 132 38 43 2 391 318 304 218 105 60 78 113 80 93 108 99 95 80 152 122 57 r 54 r * 77 445 0 289 r + 6 274 + 7 183 + 7 + 23 + 44 + 25 + 93 + 70 +169 + 56 + 79 + 96 + 28 + 52 + 45 + 40 + 22 + 14 + 9 + 67 + 12 + 5 2 + 75 + 9 4 + 7 0 + 53 + 24 + 67 + 17 + 7 + 14 0 — 6 + 3(J 12 + 18 + 18 + 28 88 66 110 94 66 54 47 158 + 48 + 32 +130 - 11 72 86 76 109 70 91 139 80 192 r 112 12 31 74 103 56 r 36 817 478 87 r 69 53 76 41 55 123 92 93 76 152 r 127 69 77 39 64 r 30 32 + 4 + 1 - 3 + 12 - 1 + 1 +12 + 14 + 15 + 3 + 6 + 8 + 4> 0 - 4 - 3 + 2 + 6 + 5 + 3 0 + 4 -12 + 7 + 3 +10 +17 +10 + 4 + 1 + 5 +47 +19 +11 + 7 - 1 +50 + + + + + + + + + + + + + 21 24 45 9 44 14 72 6 1 35 9 13 1 83 81 107p 101 108p 104 132 85p 194 87p 106 56 142p 131p 92 129 86 63 83 172 103 80 84 113 111 53 r 45 137 122 94 125 91 90 93 115 91p 162 175 40 122 63 967 86 75 59 125 93 147 85 69 32 94 103 129 69 p 105 86 94 161 112p 161 100 163p 144 60 56 91 406 315 311 238 97 114r 94 142 167 r 39 112 60r 833 85 r 70 57 116 93 149 r 77 67 30 90 r 98 136 69 112 81 92 150 102 146 95 r 161 138 41 46 2 403 312 313 220 75 80 73 84 103 15 78 35 493 67 50 40 89 76 129 78 41 28 90 105 74 59 110 80 94 98 91r 96 85 152 127r 60 59 r 70 463 268 263 186 85 61 112 87 63 57 50 111 + 22 + 35 + 25 + 80 + 59 + 108 + 50 + 43 + 81 + 16 + 35 + 16 0 + 6 + 3 + 29 + 62 + 12 + 3 - 4 + 52 + 15 0 + 4 0 + 21 + 1 + 50 + a - 1 + 13 c - 1 + 1 - 1C + 14 + 15 + 22 + 40 94 + 2E 75 +118 114 - 23 | 99 f 3-month moving daily average centered at 3rd month. * Shut down in April. York.................. Employment Payrolls Building permits value Debits Apr. 1941 May 1940 Apr. 1941 May 1940 Apr. 1941 May 1940 Apr. 1941 May 1940 Apr. 1941 May 1940 +2 +4 +1 +i +1 +3 +1 0 +2 -2 +i +2 +4 +24 +17 +34 +22 + 16 +29 +19 +12 + 14 + 18 + 13 +29 +21 + 4 + 6 + 3 0 + 6 + 9 + 4 + 4 + 9 + 2 + s + 8 + 11 +58 +42 +64 +54 +44 +54 +54 +22 +32 +43 +28 +54 +53 + 142 + 20 - 2 + 1 + 66 - 58 - 19 - 33 - 67 - 51 - 89 - 33 - 25 +372 + 39 + 7 +123 + a + 74 + 45 - 58 - 15 - 84 + 93 - 81 - 2 - 1 + 7 + 6 + 8 +14 - 4 +1 - 1 - 1 -10 +23 +16 +20 +21 +19 +15 +19 + 3 +22 + 8 + + + + - + 9 0 +25 +20 +27 + 10 +25 +23 +17 +27 + 14 + 5 +27 + 5 +35 +19 +32 * Area not restricted to the corporate limits of cities given here. Six Digitized Page for FRASER GENERAL INDEX............ Manufacturing...................... Anthracite mining............... Bituminous coal mining... . Building and construction.. Quar. and nonmet. mining. Crude petroleum prod......... Dyeing and cleaning........... 8 2 5 4 6 0 + 8 + 13 +25 + 5 + 12 — 7 +10 130 161 65 151p 61 125 137 98 113 124 108 116 112 + 7 + 2 - 0 +i4 + 5 + + 2 3 3 3 5 4 0 +18 +23 - 6 +46 +17 + 9 + 3 + 1 + 6 + 5 + 1 +12 + 5 * Shut down iQ April. 214 294 57 258p 100 293 171 118 140 137 131 156 157 +11 + 5 +37 +17 + 8 + 2 + 2 - 1 0 + 5 + 5 - 3 +39 +51 — 16 +37 +31 +34 + 7 + o +10 +11 + 4 + 13 + 9 p—Preliminary. Manufacturing Payrolls* Employment* Per cent Per cent May change from May change from 1941 1941 index Apr. May index Apr. May 1941 1940 1941 1940 Indexes: 1923-5=100 Clothing................................ Food products....................... Stone, clay and glass........... Lumber products.................. Chemicals and products. . . Leather and products......... Paper and printing.............. Printing................................ 104 107 167 81 98 91 126 107 94 63 107 95 102 92 +2 +2 +2 +2 0 0 0 +1 +2 +2 +2 0 +2 +2 +23 +34 +36 +39 +17 + 16 +20 + 4 +25 +12 +14 +18 + 3 + 2 120 168 245 97 100 94 133 119 108 65 133 102 116 105 + + + + + + + + + + + + + + 5 5 8 8 5 5 4 5 5 9 6 4 5 4 +61 +72 +63 +56 +39 +37 +46 + t +42 +25 +26 +48 +10 + 6 Rubbei tires, goods........... Musical instruments......... 68 79 74 +5 +7 0 + 7 - 1 +12 61 107 90 + 8 +14 - 2 + 6 +17 +33 TOTAL..................................... Iron, steel and products.. . . Nonferrous metal products. Transportation equipment. Textiles and clothing.......... * Figures from 2,419 plants. Hours and Wages Factory Workers Averages May 1941 and per cent change from year ago Retail sales Per cent Per cent May change from May change from 1941 1941 index Apr. May index Apr. May 1941 1940 1941 1940 Indexes: 1932=100 p Preliminary. r—Revised. Local Business Conditions* Percentage change— May 1941 from month and year ago Payrolls Employment Per cent change Indexes: 1923-5 = 100 Weekly working time* Hourly earnings* Weekly earningsf Aver Aver Ch’ge Aver Ch’ge age Ch’ge age age hours 40.8 42.0 41.0 44.2 37.3 37.4 Clothing....................... 37.0 Food products.............. 39.5 Stone, clay and glass.. 38.1 Lumber products......... 40.0 Chemicals and prod.. . 39.8 Leather and products. 38.6 Paper and printing. . . 40.6 Printing........................ 37.1 Others: Cigars and tobacco. . 36.3 Rubber tires, goods. . 39.7 Musical instruments . 44.8 TOTAL............................ Iron, steel and prod... . Nonfer. metal prod.. . . Transportation equip.. * Figures from 2,205 plants. +11 $.796 +11 $32.33 .898 +13 37.68 +14 .710 + 7 29.06 + 6 .861 + 6 38.07 +12 .551 + 7 20.54 +13 .560 + 5 20.92 +13 .519 +13 19.38 +13 .635 + 2 25.66 - 2 .750 + 4 28.54 + 8 .592 + 6 23.34 + 5 .848 + 6 33.43 + 3 .572 + 2 22.09 +22 .736 + 2 31.08 + 3 .940 + 2 36.50 - 1 +24 +29 +14 +19 +21 +19 +26 + 1 + 12 + 12 +10 +24 + 6 + 4 16.53 31.56 31.70 - 2 +18 +17 - 2 +10 + 6 .456 .795 .708 0 + 7 + 11 t Figures from 2,419 plants. Distribution and Prices Adjusted for seasonal variation Per cent cheinge Wholesale trade Unadjusted for seasonal variation 1941 from 5 mos. 1940 May 1941 from Month Year ago ago Total of all lines................... Dry goods............................ Electrical supplies.............. Paper..................................... Inventories + 5 + 4 4- i + 2 + 1 + 8 + 5 + 7 +10 +33 +37 + 7 +26 +62 +24 +55 +47 +29 0 0 — 8 - 2 + 1 - 1 +13 +11 -14 +19 +26 +29 0 + 6 ____ E-------------------------------- Indexes: 1935-1939=100 +31 Basic commodities 7 agricultural.......... Wholesale (813)*... Raw materials......... Finished products.. Food.......................... Other......................... Retail food* (1935-9=100)___ Philadelphia............ Scranton................... Mo. ago Year ago 1941 from 5 mos. 1940 125 125 122 96 124 125 0 108 108 - 1 101 + i 94 + 7 92 - 10 108 + 1 + 16 + 15 +23 + 9 +21 +17 +17 +17 +17 + 9 +22 +15 107p 105 103 101 96p 96 103p 99 I34p 125 97 + 2 93 + 2 0 93 104 + 4 116 + 7 +10 +10 + 3 - 1 +15 + 15 + 1 +33 +30 +17 +36 +53 +65 +78 + 5 + 2 +24 +27 +12 + 8 +79 +42 +52 + 3 0 May 1941 from May Apr. May 1941 1941 1940 May Apr. May 1941 1941 1940 RETAIL TRADE _ Sales _ 125p 124 124p 103p mp 127p +23 +69 +16 +53 +44 +17 # , Department stores—District.......................... Philadelphia................. Inventories FREIGHT-CAR LOADINGS Source: U. S. Department of Commerce. Commodity prices Index: 1926=100 Not adjusted Per cent change Per cent change from May 1941 Month Year Aug. 1939 ago ago 90 66 85 80 87 76 79 87 +i +7 +2 +3 +2 +3 +2 +2 +14 +23 + 8 +11 + 7 +13 + 11 + 6 +28 +38 +13 +20 +10 +25 +18 + 9 102 100 103 +1 +3 +2 + 5 + 6 + 5 + 9 + 8 +12 Coal ........................................................... MISCELLANEOUS 144 137 109 150 204 190 121 120 109 125 136 107 51 380 121 107 134 108 108 106 93 111 134 115 68 114 106 99 95 91 +195 - 46 + 56 + 13 - 10 + 1 Hotels (1934 =100) Business liquidations Check payments................................................ 138 * Computed from unadjusted data. * Source: U. S. Bureau of Labor Statistics. 136 107 103 96 94 120 119 109p 110 105 96p 96 109p 106 129p 127 98 94 94 111 112 149 145 111 138 284 190 127 107 95 118 139 108 46 197 125 105 112 94 112 111 95 102 186 115 71 101 93 107 219 97 154 + 4 0* +10 +43* + 5 106 +29* 219 - 4* 4* + 3* + 7* + 6* +11* 113p 117 121p 125 112 114 + 45* +14* +25* +28 - 2* + 5* +19 121 96 137 84 47 137 106 76 107 + 108 125 123 120 122 151 142 124p 119 110p 102p 144p 139p 2 P—Preliminary. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (000,000’s omitted) June 18, 1941 Commercial loans................. $ Open market paper............. Changes in— Four weeks One year (Millions of dollars) +$ 70* + 9 + 3 1 2 2 2 + — 1 5* 2 + 286 +$10 39 — 1 Other loans to carry secur.. Loans on real estate............ 31 + 52 + Other loans............................ 106 + Total loans........................... $ 539 +$15 +$ 87 Government securities........ $ Obligations fully guar’teed, Other securities..................... 416 +$ 3 83 — 2 261 +$ 63 — 8 Total investments............. $ 760 -$10 +$ 32 Total loans & investments $1,299 +$ 5 Reserve with F. R. Bank. . . 505 - 92 25 + 1 217 + 9 Balances with other banks. 7S — 3 +$119 + U + 5 — 4 Demand deposits, adjusted $1,133 — $89 +$116 _ Sources of funds: _ _ Uses of funds: Other Federal Reserve accounts............................................ U. S. Government deposits. Interbank deposits............... 16 + 479 + 3 4 + 38 47 Other liabilities..................... Capital account.................... 17 + 219 2 + + 2 4 ....... Changes Changes in weeks ended— Philadelphia Federal Reserve District Member bank reserves (Daily averages: dollar figures in millions) Held Re quired Ex cess Ratio of excess to re quired $569.9 $253.1 $316.8 125% May 16-31. . 569.6 254.4 315.2 124 ” 503.4 1940: June 1-15. . 473.9 220.6 253.3 115 " Country banks: May 16-31. . 1940: June 1-15.. 204.7 107.1 205.2 107.2 206.6 189.5 97.2 97.6 98.0 91 ” 91 ” 92.3 95 ” May 28 June 4 June 11 June 18 four weeks + 2.7 -16.2 + 1+ + 3.3 -42.6 -28.6 -0.9 -2.5 +4.8 -24.7 +33.5 -15.9 -19.6 -27.8 -38.3 -12.1 -67.9 +1.4 - 7.1 -85.7 + 9.5 - 7.0 -14.6 - 0.0 + 3.0 -70.8 - 0.1 - 0.0 +1.8 +0.6 -0.9 -0.1 + - 0.9 7.2 0.7 0.1 +15.2 -84.4 -16.3 - 0.2 -12.1 -67.9 +1.4 - 7.1 -85.7 Federal Reserve Bank of Phila. (Dollar figures in millions) Bills discounted........ $ Industrial advances. U. S. securities......... Changes in— June 18, 1941 Four weeks One year 0.3 +$ 0.2 +$ 0.2 + + 0.8 - 24.4 3.4 173.1 Total.......................... $176.8 Note circulation.... 454.4 Member bk. deposits 699.8 U. S. general account 83.3 Foreign bk. deposits. 117.2 19.6 Other deposits........... Total reserves........... 1248.7 90.9% Reserve ratio............. 0.4 +$ 0.6 + 13.2 - 84.4 + 40.2 + 35.9 - 16.3 + 8.7 + 1.5% -$23.4 +100.0 + 31.8 + 56.1 + 52.6 + 1.6 +299.5 + 7.1% * Revised. Page Seven National Summary of Business Conditions After a slight decline in April industrial activity increased sharply in May and the first half of June. Wholesale commodity prices showed a further considerable advance and retail prices also increased. Distribution of commodities to consumers was maintained in large volume. INDUSTRIAL PRODUCTION Production Volume of industrial output increased sharply in May, following a decline in April, and the Board’s seasonally adjusted index rose to 149 per cent of the 1935-1939 average, as compared with 140 in April and 143 in March. The decline in April had reflected mainly reduced output of bituminous coal and automobiles occasioned by shutdowns accompanying industrial disputes. These were settled during the month and in May and the first half of June output in these industries rose to the high levels prevailing earlier. Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average =100. Subgroups shown are expressed in terms of points in the total index. By months, January 1935 to May 1941. DEPARTMENT STORE SALES AND STOCKS Federal Reserve indexes of value of sales and stocks, adjusted for seasonal variation, 1923-25 average =100. By months, January 1935 to May 1941. WHOLESALE PRICES In a number of other lines activity increased steadily throughout the spring months, particularly in the machinery, aircraft, and shipbuilding industries. Steel production was maintained at 99 per cent of capacity, except for a short period during late April and early May when output was reduced somewhat owing to a shortage of coal. Output of nonferrous metals also continued near capacity; deliveries of foreign copper in May increased to 49,000 tons, amounting to about one-third of total deliveries to domestic consumers. Toward the end of the month, as it became apparent that combined military and civilian need for these metals would soon greatly exceed available supplies, a General Preference Order covering all iron and steel products was issued by the Priorities Division of the Office of Production Management and in June mandatory priority controls were established for copper and zinc. Textile production rose further in May, reflecting increased activity at cotton, wool, and rayon mills. A continued rise in output of manufactured food products was likewise reported and activity in the chemical and shoe industries was maintained at earlier high levels, although usually there is a considerable decline at this season. Petroleum production increased, and output of anthracite also advanced following some curtailment in April. Iron ore shipments amounted to 11,000,000 tons in May, a new record level and near the shipping capacity of the present Lake fleet. Value of construction contract awards rose sharply in May. reflecting increases in both public and private construction, according to F. W. Dodge reports. Awards for private residential and nonresidential building increased more than seasonally, and contracts for defense projects continued in large volume. Distribution Distribution of commodities to consumers was sustained at a high level in May. Department store sales showed a further rise, while sales at variety stores decl-ned by slightly more than the usual seasonal amount. Retail sales of new automobiles continued at the high April level and sales of used cars rose further. Freight-car loadings increased sharply in May, reflecting a marked rise in coal shipments and a further expansion in loadings of miscellaneous freight. In the first half of June total loadings were maintained at the advanced level of other recent weeks. Bureau of Labor Statistics’ indexes, 1926 =100. “Other” includes commodities other than farm products and foods. By weeks, January 5, 1935 to week ending June 14, 1941. MONEY RATES IN NEW YORK CITY u TREASURY NOTE si TREAS JAY BILLS 1935 Sr v---- 1936 J\ 1937 1936 Jyy, 1939 1940 K 1941 Weekly averages of daily yields of 3- to 5-year tax-exempt Treasury notes, Treasury bonds callable after 12 years, and average discount on new issues of Treasury bills offered within week. For weeks ending January 5, 1935 to June 14, 1941. Page Eight Commodity Prices Wholesale prices of a number of agricultural and industrial commodities showed further increases from the middle of May to the middle of June and the general index of the Bureau of Labor Statistics advanced two points to 87 per cent of the 1926 average. Federal action to limit price increases was extended to some consumer goods, principally new automobiles, hides, and certain cotton yarns. In retail markets prices of most groups of commodities have advanced, reflecting in part increases in wholesale prices earlier this year. Bank Credit Commercial loans at reporting banks in 101 cities continued to rise during the four weeks ending June 11. Bank holdings of United States Government securities increased further, chiefly through the purchase of bills by New York City banks and of bonds by banks in other leading cities. As a result of the expansion in loans and investments bank deposits continued to increase. United States Government Security Prices Following a rise in the latter part of May, Treasury bond prices declined slightly in the first half of June. On June 14 the 1960-65 bonds were % of a point below the all-time peak in prices of December 10. Yields on both taxable and tax-exempt 3- to 5-year notes declined slightly from the middle of May to the middle of June.
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