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THE BUSINESS REVIEW - n 'i' u V ■ s« jL' of FEDERAL RESERVE BANK ISM JUL 10 WO QF 5PHILADELPHIA JULY 1, 1944 . ... Ito WE I NDUSTRIAL production and total nonagricultural employment in the country as a whole have been declining gradually since the latter part of 1943. Over-all labor Supply has not changed significantly in recent months, and man power problems persist in certain areas and throughout several critical industries. Raw ma terial supplies on the whole have continued to improve since the early months of this year. With the long awaited invasion of Western Europe well under way, two things stand out clearly in the general business picture. The situation on the fighting fronts, while highly favorable, requires that the output of munitions be continued on an all-out basis for the pres ent, with production schedules maintaining the necessary flexibility to meet any changes in the military demand. On the other hand, the prog ress of our armed forces throughout the world suggests that the groundwork must be laid for a prompt reconversion to peacetime output of whatever facilities subsequently may be re leased from war production. Recent pronouncements by the War Produc tion Board indicate full recognition of these elements of the present situation. While prophe sying that from the standpoint of munitions manufacture the next several months may well prove the most critical of the entire war period, the Board emphasizes the growing urgency of reconversion problems by revealing plans to facilitate an early resumption of civilian output by producers whose Government contracts are completed or cancelled. Manpower and raw material supplies permitting, the program en visages a “stagger system” of reconversion, in asmuch as a given plant may have to continue in munitions production, while that of a pre war competitor or a firm entirely new to the field prepares to turn out goods for non-military use. Although the hardships attending the pro posed system are at once apparent, the Board’s position in authorizing it is summed up in the Chairman’s statement that—“The country can not afford to delay the return to civilian produc tion until all manufacturers in each industry have terminated their essential work . . .” Other features of the program include pro visions for assisting qualified producers in their efforts to obtain necessary raw materials through some relaxation of restrictions govern ing the end uses of war metals and other con trolled items. After July 1 it is planned to permit purchases of machinery, tools, and dies from surpluses listed with the War Production Board and with the Defense Plants Corporation. Those in a position to reconvert also will be allowed to make a single working model of the approved product, and materials and compo nents will be authorized for its construction. On the manpower front, the principal de velopments have been the nation-wide extension of the system of controlled referrals, formerly operating only in tight labor markets, and a decentralization of authority for the administra tion of the regulations by granting wider dis cretionary powers to regional representatives of the War Manpower Commission. Beginning July 1, the United States Employment Service Continued on page 7 Page One The Economy of The Third Federal Reserve District What was the structure of the manufactur ing industries in the Third Federal Reserve Dis trict before the war? How is it being altered by the war? Answers to these questions may help to deal with post-war problems and prospects. This analysis attempts to answer the first question. Manufacturing industries in 1940 The high degree of industrialization of this district has enabled it to play an important role in the war effort. Since its industrial structure was highly diversified, the district was in a position to supply a great variety of urgently needed products at the outset of the war. The armed forces, whether in training or in battle, need not only a vast array of specialized war gear but also most of the things which they normally consume as civilians. As a conse quence, a nation at war needs the products of practically every major industry, though of course, with varying degrees of urgency. In 1939, the Third District had over 12,000 manufacturing establishments producing $5,000 or more of products a year. As previously noted, the industries employed 9 per cent of the coun try’s wage earners and accounted for $1,994 million or 8.1 per cent of the country’s value added by manufacturing. Throughout a long history of industrial development, manufactur TABLE 1: MANUFACTURING EMPLOYMENT IN THE THIRD DISTRICT—1940 • Third District Industry Textile mill products........................ Iron and steel and their products*. Apparel and other fabricated toxlile products............................. Food and kindred products........... Machinery*......................................... Chemicals and allied products---Printing, publishing, and allied industries......................................... Transportation equipment,except automobiles*.................................. Stone, cluy, and glass products*... Leather and leather products.. . . Paper and allied products.............. Furniture and store fixtures*........ Automobiles and auto equipment* Petroleum and coal products........ Nonforrous metals and their prod ucts*................................................. Other manufacturing........................ United States Percent Third Thou Percent Thou Percent Dist. sands of total sands of total of U.S. 154 123 17% 14 1,170 1,263 n% 13.2% 12 9.7 103 72 71 42 12 8 8 5 781 1,094 1,072 440 7 10 10 4 41 5 631 6 6.5 40 35 32 26 20 18 18 5 4 4 3 2 2 2 306 337 364 328 362 575 201 3 3 4 3 3 6 2 13.1 10.4 8.8 7.9 5.5 3.1 9.0 12 73 i 8 279 1,370 3 13 4.3 5.3 880 • Durable goods. Page Two 13.2 6.6 6.6 9.5 100% 10,573 100% 8.3% ing in this district has become highly diversi fied. Almost every major industry is repre sented in this area. The relative importance of the principal industries is indicated in Table 1 which shows the number of people each in dustry group employed in 1940. Since this dis tribution embraces all workers engaged in manufacturing in any capacity, it shows the relative importance of the major industrial groups from the standpoint of industrial em ployment. Textile industries were the largest. They em ployed over 150,000 or 17 per cent of all the district's workers engaged in manufacturing and are much more important to the economy of this district than to that of the entire United States. In addition, composition of the textile industries of the district is entirely different from that of the country. Cotton textiles, which employ over 40 per cent of the country’s textile workers, are of comparatively minor importance in this district. The textile industries include all manufac turers engaged in any stage of converting fibrous raw materials into fabrics. This em braces a group of industries with many sub divisions, of which the two major ones are pri mary textiles and textile products. The primary textile industries are those that convert natural or synthetic fibers into yarn or woven cloth. The textile products industries, for the most part, convert the output of the primary textile manufacturers into finished products, such as knit goods, housefurnishings, and industrial tex tiles but they do not include the clothing in dustries that make apparel from woven cloth. In 1940, more than half of the textile workers of the Third District were employed in the in dustries making finished textile products. The leading industry within this group was hosiery manufacturing. Women’s full-fashioned hose, as distinguished from seamless hose, employed about 80 per cent of the district’s hosiery work ers. This branch of the industry has been promi nently identified with this district since the ’20’s, when full-fashioned hose displaced seam less hosiery in the women’s wear market. Knit goods other than hosiery ranked second among the textile products industries of the district. Other important industries in this group were ' floor coverings, housefurnishings, hats, lace goods, and industrial textiles. These industries have very little in common except that they per form the final processing of materials of fibrous origin. dustrial economy of the district than in that of the United States; for the country as a whole these industries employed 12 per cent of its manufacturing employees. These industries, like textiles, consist of two principal types—the primary producers and the fabricators. The primary steel producers operate blast furnaces that convert iron ore into pig iron; steel furnaces that convert pig iron and ferrous scrap into steel ingots; and rolling mills that reduce ingots into semi-fin ished products, such as plates, sheets and bars and some finished products, such as rails and car wheels. The fabricators convert semi-fin ished steel into a great variety of finished prod ucts, such as heating and plumbing supplies, foundry products, machine-shop products, hard ware, tools, structural steel, wire, forgings, and other items. Primary textiles, which accounted for less than half of the district’s textile employees, consisted chiefly of rayon, silk, and woolen and , worsted manufacturing. Dyeing and finishing, which is closely associated with cotton textiles, was of only minor importance in this area. Industries making iron and steel and their products ranked second among the major in dustry groups of the Third District. These in dustries employed 123,000 or 14 per cent of the district’s manufacturing employees. They were of greater relative importance in the in DISTRIBUTION OF MANUFACTURING-1940 i____ TIOGA POTTER SULLIVAN LYCOMING CLE.ARFlE.LO CENTRE SCHUYLKILL' PERRY / V s* ~ ( ■ K CUMBERLAND LANCASTER OCEAN / FRANKLIN YORK THIRD FEDERAL RESERVE DISTRICT ATLANTIC NUMBER OF WORKERS PER COUNTY OVER 50,000 25,000 TO 49,999 10,000 TO 24,999 UNDER 10,000 ► Page Three The steel industry of this district includes both primary steel producers and fabricators. However, more than half of the steel mill work ers within the district were employed in fabri cating plants in contrast to the Pittsburgh area, where most of the steel mill workers were em ployed in primary steel manufacture. Manufacturing of apparel and other fabri cated textile products ranked third—employing 12 per cent of the district’s manufacturing em ployees. The leading industries in this group were, in order of importance—men’s and boys’ furnishings, women’s clothing, and men’s and boys' clothing. The manufacture of women’s clothing is confined largely to big cities which are style centers. The food industries employed 8 per cent of the manufacturing employees. Prominence of baking—the largest industry within the group— grows out of the dietary importance of its prod ucts. Bakeries are scattered in about the same proportion as population density because their products are perishable. In view of the growing dependence upon commercially processed foods and the heavy concentration of population in this district, the food industries might be ex pected to occupy a more prominent place in the district’s industrial structure. However, many food processing industries must be near their source of raw materials; and agriculture is a relatively minor activity in this district in comparison with some other areas. The machinery industries also employed 8 per cent of the manufacturing workers of the district. This includes a wide range of industrial equipment as well as electrical machinery. These industries occupied a somewhat smaller position in the industrial economy of the dis trict than they did in that of the United States. The remaining industries accounted for more than 40 per cent of the district’s employed workers in manufacturing. The fact that none of these employed over 5 per cent of the work ers is indicative of the industrial diversification of the district. Further evidence of the industrial diversifica tion in this district is indicated in Table 2 which shows the percentages of manufacturing work ers employed by the three leading industrial groups. Compared with other industrialized Page Four areas, this district had the smallest percentage of its workers employed in its leading industrial group and a smaller proportion in the three leading industrial groups with the exception of New York and California. For the country as a whole the leading industry group employed 12 per cent and the three leading industry groups 33 per cent of all manufacturing em ployees. TABLE 2: PERCENTAGE OF MANUFACTURING EM PLOYEES IN LEADING INDUSTRIAL GROUPS Per Gent Employed in Area Third District............ Massachusetts........... New York................... Ohio.............................. Michigan..................... North Carolina.......... Texas............................ California.................... Leading Industry Group 17% 23 21 26 51 58 20 19 Two Leading Groups 31% 35 30 44 60 67 37 31 Three Leading Groups 43% 47 39 50 69 74 47 40 A comparison of the industrial pattern of the district with that of the United States shows that six industries were of greater relative im portance to the economy of this district than they were in the United States economy. They were textiles, steel, apparel, chemicals, trans portation equipment—exclusive of automobiles —and stone, clay and glass products. The dis trict had a well-balanced industrial structure as shown by the fact that 36 per cent of its manufacturing workers were employed in dur able goods industries compared with 40 per cent for the United States. The durable goods industries are stimulated by the periodic up surges of business activity because they manu facture producers’ goods to a large extent. The non-durable goods industries afford a measure of economic stability because their products are largely consumer goods. . ' Distribution of manufacturing Manufacturing in the Third District was heavily concentrated in the southeastern sec tion. Philadelphia, the leading industrial cen ter, accounted for 28 per cent of the district’s manufacturing workers. Ten southeastern coun- v ties, including Philadelphia, had 65 per cent of the workers and an additional 21 per cent were in 12 counties, most of which were located in the southeastern industrial area. The remain ing 14 per cent were scattered throughout 38 counties where manufacturing was of compara tively minor importance. Table 3 shows the concentration and the map shows the location of manufacturing in the district. i TABLE 3: MANUFACTURING WORKERS IN 1940 Size of group Over 50,000................ 25,000 to 49,999.. 10,000 to 24,999........ Under 10,000.............. Number of counties Thousands of workers 9 12 38 60 district 248 326 183 28% 37 21 14 880 100% Philadelphia is the most important center of manufacturing owing largely to its advan tageous position. Located on a tidal estuary, 90 miles upstream with a deep-water channel, it is both a seaport and an inland city. A good harbor and adequate port facilities accommo date both coastwise and ocean-going vessels that bring in raw materials for manufacture , and carry out finished products to distant mar kets. The city’s location on both the Delaware and Schuylkill rivers is favorable to manufac turing because most processes require large amounts of water. Other factors accounting for the importance of Philadelphia as a center of manufacturing are its railroad facilities for gathering inland raw materials and bituminous coal, its abundance of flat land for low cost home and factory sites, its large local market ► TABLE 4: MANUFACTURING EMPLOYMENT IN LEADING INDUSTRIAL COUNTIES OF THIRD DISTRICT—1940 Industrial group Philadelphia 9-county* area 12-countyf area Total 3rd Dist. %of %of %of Thous. total Thous. total Thous. total Thous. Textile mill products........ 40 16 65 20 3ft Iron and steel and their products........................... 22 9 53 16 41 Apparel and other fabricated textile products. . 33 13 28 9 26 Food and kindred prods.. . 23 9 21 6 18 10 Machinery........................... 26 10 29 9 Chemicals and allied prods. 9 4 9 3 12 Printing, publishing, and allied products.............. 18 7 12 4 Transportation equipment (ex. automobiles)........... 14 6 16 5 4 Stone, clay, andglassprods. 13 1 16 5 Leather and leather prods. 7 3 10 3 9 Paper and allied prods.. . . 8 3 9 3 5 Furniture and store fixtures 5 2 8 2 Automobiles and auto equipment....................... 7 3 10 3 1 Petroleum and coal prods. 6 2 8 2 Nonferrous metals and their products................. Other manufacturing........ 3 24 1 10 4 28 1 9 1 10 6 73 Total................................. 248 100 326 100 183 100 880 Note: These data, taken from the Census of Population, are based on place of residence of the workers. Place of employment, which would be more accu rate, is not available by industrial classification. * Berks, Camden, Delaware, Lancaster, Lehigh, Mercer, Montgomery, North ampton, and York. 6 t Backs, Burlington, Cambria, Chester, Cumberland, Dauphin, Lackawanna Lebanon, Luzerne, Lycoming, New Castle, and Schuylkill. and accessibility to still larger markets of the heavily populated middle Atlantic seaboard, its abundant supply of skilled labor and a plenti ful supply of food available in the adjacent agricultural regions of Pennsylvania, New Jer sey, Delaware, and Maryland. Philadelphia is outstanding in many lines of products. The variety of industries and their relative importance from the standpoint of em ployment are shown in Table 4. In 1940, the largest industrial group was textile mill prod ucts which employed 40,000 or 16 per cent of the workers. Specific industries which ac counted for most of these textile workers were hosiery; knit goods, such as sweaters, bathing suits and underwear; carpets and rugs; wool ens and worsteds; pile fabrics; and narrow fabrics. The needle trades which manufacture cloth ing from woven cloth ranked second. The larg est industry in this group was men’s clothing but the manufacture of women’s and children’s clothing employed approximately three-fourths as many workers. Machinery ranked third among the major in dustries of Philadelphia. Employment was dis tributed almost equally between electrical ma chinery and general industrial machinery. A large part of Philadelphia’s electrical products consisted of power plant equipment, storage batteries, and radios. The machinery industries of Philadelphia are extremely diversified. They comprise such products as mechanical power transmission equipment, machine tools, con veyors, gas engines, and a great variety of spe cialized machinery for the printing trades, food industries, textile industries and others. Industries making iron and steel and their products also constituted an important part of Philadelphia’s industrial structure. Philadel phia had no integrated steel companies per forming all of the operations from smelting the ore to fabrication of finished steel products. But it did have several firms that operate furnaces to make primary steel which they subsequently shape in their rolling, forging, drawing, or cast ing departments. However, most of the steel mill workers of Philadelphia were employed by companies engaged in fabricating steel prod ucts, such as bearings, boilers, drums, cans, pipes, tubing, hardware, sheet metal, orna mental ware, and many other items. Page Five Food processing employed about as many workers as the iron and steel group. Food proc essing—baking, meat packing, etc.—is naturally important in an area that is almost entirely metropolitan. Printing, publishing, and allied industries also were important, accounting for 7 per cent of the city’s manufacturing employees. These industries are usually located in large industrial or commercial centers because of the advan tage of being near their markets to give quick service. Philadelphia was also a leading center in the manufacture of transportation equipment exclusive of automobiles. Although no automo biles were produced here, the city had several large companies specializing in automobile and truck bodies, motor buses, and automobile parts. Availability of raw materials is an important locational factor in both iron and steel and stone, clay, and glass manufacturing. The prominence of these industries in the outlying counties is due also in part to their need for low-priced land since considerable space is re quired, particularly by the integrated steel pro ducers. Textiles often complement the heavy industries by utilizing the available female labor. , The smaller relative importance of the ap parel, food, and printing and publishing groups in the nine counties is a result of the fact that these industries can operate to better advan tage in large metropolitan centers where their largest markets are found. Ranking next to Philadelphia was a sec ondary area consisting of nine counties in each of which 25,000 to 50,000 were employed in manufacturing. This group consisted of Mont gomery on the northwest of Philadelphia, Dela ware county on the southwest, Camden and Mercer counties in New Jersey, and five coun ties running diagonally in southeastern Penn sylvania—Northampton, Lehigh, Berks, Lan caster, and York. Though they were all highly industrialized, the nine counties differed considerably in the ' composition of their manufacturing industries. In Montgomery county the largest proportion of workers (22 per cent) was employed in tex tiles, followed closely by iron and steel (20 per cent) and these together with apparel ac counted for more than half of the workers. In Delaware county, largely by reason of its river frontage, transportation equipment, consisting of ships, locomotives, and automobiles, ac counted for 22 per cent of manufacturing. Petroleum refining ranked second owing chiefly to the convenience of bringing in crude oil by coastwise tankers. In Camden, which also fronts on the Delaware river at tidewater, shipbuild ing was likewise a leading industry but em ployment in its machinery industries was just as large, due primarily to radio manufacturing. Mercer county, on the New Jersey side of the Delaware river, had somewhat greater indus- ■ trial diversification than Camden or Delaware. Iron and steel, made up largely of wire prod ucts, steam boilers, and automotive hardware, ranked first and clay products, for which Tren ton is noted, employed almost as many workers. As a group, these nine counties are akin to Philadelphia in the variety of their manufac tures. However, there were notable differences in the composition of their leading industrial groups. Compared with Philadelphia, the nine counties had larger proportions in textiles, iron and steel, and stone, clay, and glass industries. Conversely, they had smaller proportions em ployed in apparel, food, and printing and pub lishing. The outstanding industries in the five counties cutting across southeastern Pennsylvania were either iron and steel or textiles. The Bethlehem . steel mills put this industry far in the forefront in Northampton county. About 37 per cent of the workers in that county were employed in iron and steel manufacturing and 18 per cent in textile mills. The industrial pattern of Le high, the adjoining county, was similar to that of Northampton county—steel industries ranked The varied industrial structure of pre-war Philadelphia made for greater stability of in dustrial activity and employment than is found in areas dependent upon one or a few industries. Less than a third of the workers were employed by the city’s two leading industries—textiles and apparel—and their products are in constant demand because they are nondurable. About 68 per cent of Philadelphia’s workers were em ployed in the production of nondurable goods which is in contrast to 64 per cent for the Third District and 60 per cent for the United States. Page Sics first, followed by textiles; however, steel manu facturing was not as highly integrated in the Lehigh area. and underwear, were the principal employers of manufacturing workers in Schuylkill county which is part of the anthracite region. Berks county manufacturing was primarily textile (50 per cent of the workers) by reason of the heavy concentration of hosiery manufac turing in Reading. Steel industries ranked sec ond, employing about 16 per cent of the county’s manufacturing workers. In Lancaster county, the leading industries were likewise steel and textiles in that order, but these two industry groups employed smaller percentages, 28 and 10 respectively, of the county’s manufacturing employees, which reflects greater diversifica tion. Steel and machinery were the leading in dustries in the adjacent county of York. How ever, apparel, textiles, and furniture were also quite prominent, thus making a rather diversi fied industrial pattern. Although other industries have developed in recent years, chemicals were still predominant in New Castle county, Delaware, and glassware in Cumberland county, New Jersey, where local supplies of glass sand are abundant. In the twelve counties (lightly shaded on the map) that accounted for 21 per cent of the dis trict’s manufacturing employees, there was somewhat less diversification than in the ninecounty area and Philadelphia. Iron and steel predominated in Burlington, Chester, Lebanon, Dauphin, and Cambria counties. In Cambria county, three-quarters of the employees were steel workers, most of them employed in the Johnstown plants of the country’s two leading steel companies, U. S. Steel and Bethlehem. Textile products were outstanding in two of the anthracite counties—Lackawanna and Lu zerne. Silk throwing and silk and rayon weav ing were developed in this area to take ad vantage of the female labor supply. Textiles were also predominant in Lycoming and Bucks counties; silk and rayon were the principal products in Lycoming and hosiery in Bucks county. The apparel industries, mostly shirts There was some manufacturing in each of the remaining 38 counties of the district but the group as a whole employed only 14 per cent of the district’s manufacturing employees in 1940. In the individual counties manufacturing was not diversified, as might be expected, be cause in many instances one or a few leading companies dominated the scene. For example, a large chemical establishment employed over 60 per cent of the employees of Salem county in New Jersey and a single rayon plant em ployed 60 per cent of the workers in Mifflin county, Pennsylvania. About 40 per cent of the workers in Carbon county were employed in zinc smelting and refining. Manufacturing in Center and Clearfield counties was mostly brick, terra cotta, and fire clay products. The importance of manufacturing in the Third District is due in part to the develop ment of textiles and apparel—in 42 of the district’s 60 counties either textiles or apparel was among the two leading industries. These industries, providing substantial opportunities for employment of women, have been estab lished in many areas where the male labor is employed in the heavy industries such as steel, machinery, and coal mining. The combination of both light and heavy industries makes for greater industrialization, more diversification and increased stability of employment and in come. Business and Banking Continued from page 1 tural enterprises may obtain personnel entirely through their own efforts. and such other existing agencies as may be of ficially designated will endeavor to channel all male workers over seventeen years of age to business and industrial establishments through out the country. Only the smallest firms—those employing up to eight workers—and agricul The procedure being established by the War Production Board depends in large measure for its successful operation on these changes in the administration of manpower controls. Thus, regional representatives of the Board will con sult with local officials of the War Manpower Page Seven Commission on the availability of labor in areas where munitions makers released from war con tracts are to be permitted to obtain necessary raw materials and to convert facilities to the manufacture of civilian goods. Industry and trade. Industrial activity in the Philadelphia Federal Reserve District in May was maintained close to the level of a month and year ago. Output of manufactures rose 1 per cent on an adjusted basis, reflecting principally small gains in nondurable goods lines; the pro duction of durable goods was about the same as in April. Output of coal increased in the month and was greater than in May 1943. Production of crude petroleum was somewhat smaller than in April and below last year’s level. Wholesale commodity prices have shown a slight rise since the turn of the year, following narrow fluctuations for many months. Simi larly, the cost of goods purchased by wage earn ers and lower-salaried workers in large cities throughout the country has not changed sig nificantly for some time, according to the Bu reau of Labor Statistics. Retail prices of house furnishings, and to a lesser extent articles of clothing and certain miscellaneous items, have risen steadily over the past four months, but these advances have been largely offset by a downtrend of quotations on foods. Factory employment in Pennsylvania de creased slightly further from April to May, re flecting small declines in both durable and non durable goods industries. The number em ployed, estimated at approximately 1% million, was down 2 per cent from a year earlier and 4 per cent from last fall’s all-time high. The vol ume of wage payments exceeded $55 million a week, a total 2 per cent greater than in April, and close to the highest on record. Most major lines reported increases in payrolls during May, the largest rise being in the transportation equipment and food processing industries. Gains over a year ago occurred in all lines ex cept textile and leather products. Total work ing time showed some increase in the month but was less than in May 1943. The weekly income of wage earners at re porting plants in Pennsylvania rose to a new high in May, averaging $48.17, as against $46.69 in April, and $44.54 a year ago. This gain reflected a further advance in average Page Eight PRODUCTION AND PRICES PERCENT PRODUCTION * WHOLESALE COMMODITY PRICES US ' COST OF LIVING IN PHILADELPHIA 1939 1940 1942 1943 hourly earnings to about $1.06, and an increase in the average number of hours worked per employee to 45a week. Average working time in May was the highest reported in nearly fifteen years. Anthracite and bituminous coal mines have been returned to private operation after re maining under Federal jurisdiction for more than a year. New working agreements ap proved by the War Labor Board have been signed by operators and representatives of the miners; back-dated to May 1, 1943 for anthra cite and April 1 in the case of bituminous, they cover compensation and working conditions over a two-year period. According to the Ad ministrator for Solid Fuels, the productivity of the nation’s hard and soft coal miners reached a new high level during the extended period of Government operation. This was accomplished in spite of a continuing drain on young man power, which was reflected in an increase in the average age of miners from 32 to 45 years. The output of both anthracite and bituminous coal increased in May and was substantially larger than a year earlier, as producers con tinued their efforts to build up reserves from the unusually low levels prevailing in recent months. The tonnage of anthracite mined in the first five months of 1944 was little larger than in the same period last year, but produc tion of bituminous coal in Pennsylvania in creased about 7 per cent. Building construction has continued to slacken nationally and locally with the com- HOURLY EARNINGS AND WORKING TIME HOURS PENNSYLVANIA METAL PRODUCTS FACTORIES EMPLOYEE-HOURS IN PENNSYLVANIA PERCENT AVERAGE HOURLY — EARNINGS -t IRON AND STEEL NON -FERROUS METALS HOURS WORKED AVG. PER WORKER PER WEEK 1940 1941 1943 1944 pletion of military installations, industrial fa cilities, and war housing projects. Manpower and material shortages necessitate the continu ance of rigid restrictions on new undertakings of a non-critical nature. In this district, the value of new contracts awarded in May de creased 15 per cent to approximately $10 mil lion. Placements aggregating $45 million in the five months ended May were about onehalf the dollar volume reported a year earlier; they were the smallest for the period since 1935, and compared with a wartime peak of $138 million in the initial five months of 1942. The agricultural situation in this district showed some further improvement during June. The distribution of rainfall was rather uneven over much of the month, but growing condi tions for crops and pastures on the whole were favorable. Seasonal farming operations are still behind schedule in some sections, owing to de lays earlier in the season and to a continued scarcity of labor. Larger crops of wheat, oats, and orchard fruits are in prospect this year than last; early indications also suggest a record crop of tomatoes for processing. Tobacco plant ing in Pennsylvania was still under way toward the close of June, with the condition of the crop about average for this time of the year. Primary distribution by rail in the country as a whole is increasing more rapidly than had been anticipated a few months ago, according to reports from Federal agencies concerned with the operations of the carriers. Meanwhile, 1940 1942 shortages of equipment have been only partially relieved as a result of authorized increases in the production schedules of freight car and loco motive builders; the scarcity of railroad per sonnel has grown more acute, with additional workers most urgently needed in the track maintenance and equipment repair depart ments. Total freight car loadings in this section have continued unusually heavy, and in the first five months of 1944 were 7 per cent greater than in the same period last year. The number of cars loaded has shown increases in all the principal commodity classifications; the sharp est rise—30 per cent—has occurred in loadings of livestock. Business at wholesale decreased slightly from April to May and dollar volume was somewhat less than a year ago. Declines in the month in sales of electrical supplies, groceries, and hard ware were only partly offset by increases in such lines as drugs, dry goods, jewelry, and paper. Aggregate sales in the five months ended May were 7 per cent larger this year than last. Inventories at wholesale establishments showed some reduction as compared with April, but they were larger than at the end of May 1943. The value of retail sales by reporting depart ment and women’s apparel stores in this dis trict on an adjusted basis increased in May, but sales at men’s apparel and shoe stores did not measure up to seasonal expectations. Increases over a year ago were substantial in all cases, ranging from 13 per cent at establishments Page Nine TEXTILE ACTIVITY DEPARTMENT STORE SALES AND STOCKS . EMPLOYEE - HOURS IN PENNSYLVANIA . Third federal reserve district PERCENT PERCENT STOCKS COTTON GOODS SALES vWOOLENS AND WORSTEDS ADJUSTED TOR SEASONAL VARIATION 1939 1940 1941 1942 1943 1944 specializing in footwear to 23 per cent at women’s apparel stores. Sales by furniture stores expanded 19 per cent in the month to a level 7 per cent above May 1943. Inventories at the end of May exceeded those of a year earlier except at shoe and furniture stores. Banking conditions. The effects of the Fifth War Loan Drive were reflected during the third week of June in reduced deposits of customers and in larger war loan accounts to the credit of the Government, although drafts on the former also included substantial amounts for income taxes. From the temporary low point at the close of the Fourth Drive, adjusted de mand deposits at reporting member banks in this district had increased well over $300 mil lion to a record high level of $1,831 million on June 14. This sharp gain was achieved in the face of a continuing heavy demand for cur rency. It represented heavy accumulations in the balances of individuals and business con cerns—largely a result of Government expendi tures—and a considerable expansion in deposits of states and local governments. During the four latest weeks, ended June 21, total deposits at the reporting institutions moved up $68 million to more than $2.5 billion, owing in part to the receipt of funds for credit to accounts held for other banks. Reserves and balances with correspondents were built up, but the largest increase among the assets was in the securities portfolio. The investment in Governments stood at $1,625 million on June 21, up $39 million in four weeks and $176 mil Page Ten 1939 1940 1942 1943 1944 lion in the past twelve months. Changes in the loan portfolio were small. A slight increase has taken place lately in advances to brokers and others to purchase or carry Government securi ties, but these loans now total only about $6 million, Or about the same volume as was on the books at the beginning of the last drive. For all member banks of the district the four latest weeks show a gain of $45 million in re serves to $695 million. Treasury receipts from taxes and sales of securities outstripped Govern ment disbursements in the area by about $75 million and currency demand continued active, save for a modest return flow toward the close of the period. But these factors tending to re duce reserves were more than balanced by heavy gains in commercial and financial trans actions with other districts. The inflow of funds was particularly large in the third week of June, when some transfers doubtless were made to take care of payments to the Treasury in this district. Earning assets of the Federal Reserve Bank now exceed $1 billion. An increase of $84 mil lion between May 24 and June 21 reflected par ticipation in System holdings of securities, which moved up sharply in the period. Discounts for member banks, at no time large in recent years, declined to less than $2 million; and the volume of Treasury bills held by this Bank under re purchase option showed little net change, con tinuing to hold around $125 million, despite the substantial volume of purchases from and re sales to banks. BUSINESS STATISTICS Production ► Employment and Income Philadelphia Federal Reserve District in Pennsylvania Industry, Trade and Service Adjusted for seasonal variation Indexes: 1923-5 =100 Ma y 1944 f rom May Apr. May 1944 1944 1943 Mo. ago INDUSTRIAL PRODUCTION MANUFACTURING Durable goods. .... Consumers’ goods. Melal products........ Textile products...................... Transportation equipment.. Food products.............. Tobacco and products Building materials.................. Chemicals and products.... Leather and products........... Paper and printing................ Individual lines Pig iron............................. Steel............................................ Silk manufactures.................. Woolens and worsteds........ .. Cotton products..................... Carpets and rugs.................... Hosiery...................................... Underwear................................ Cement...................................... Brick.......................................... Lumber and products........... Bread and bakery products. Slaughtering, meal packing. Sugar refining.......................... Canning and preserving___ Cigars Paper and wood pulp. Printing and publishing. blishin. ... Shoes.......................................... Leather, goat and kid........... Paints and varnishes............. Coke, by-product................... COAL MINING........................ Anthracite................................ Bituminous............................... CRUDE OIL.............................. ELEC. POWER—OUTPUT.. Sales, total................................ Sales to industries.................. BUILDING CONTRACTS TOTAL AWARDSt................. Residential!............................. Nonresidentialf...................... Public works and utilities!.. *y* 4, Not adjusted Per cent cl lange 152p 156p 247p 94p 185 7 Op 66 Op 116p 96 34p 155p 106p 94 151 155 247 93 189r 68 643 114 97 34 162 99 93 151 r 155r 248r 93r 181r 74r 649 r 106 r 114 40 162 117 90 96 93 101 132 131 r 134 86 85 88 64p 62 65r 46 42 58 55p 52 58 70 67 80 142 145 r 161 2:tP 24 41 47 48 58 32 32 29 126 107 137p 95 84 96 131 82p 94 165p 88 84 122 366 439 441 342 39 14 44 117 127 85 140 96 82 95 117 82 92 165 85 81 113 374 419 424 358 35 15 43 69 Year ago +1 +1 0 +1 - 2 + 2 + 3 + 2 - I 0 - 5 + 6 + 1 + + + + + + — — — — + + + + + + + + _ - 1 1 0 1 2 5 2 9 16 15 4 10 4 4 1 1 3 8 6 5 2 5 0 + 2 + 4* 104 - 1 76 +27 135r - 2 114 - 1 85 + 2 91 0 138 +11 97 0 86 + 3 155 0 81 + 4 78 + 4 105 + 8 406 - 2 414 + 5 400 + 4 316 - 4 4 1 2 2 21 5 12 12 45 18 12 10* 21 41 2 — 17 — 1 + 5 5 — 16 + 10 + 6 + 9 + 8 + 16 — 10 + 6 + 10 + 8 67 43 75 119 __ 41 _ — — — — — — — — — + + + + + +13 - 8 + 4 +70 variation. T J-month moving daily average centered at 3rd month, — — ~ + + + + + + + — — + + _ + + — —. _ — — — + + + + + — + — + + + + + + + + _ — — 67 41 1 Employment 1944 from 5 mos. 1943 2 2 1 3 5 3 3 16 17 24 6 6 4 1 2 3 1 21 3 11 9 54 20 13 10* 33 49 19 16 0 5 5 6 7 5 6 1 7 11 7 10 12 May Apr. May 1944 1944 1943 151p 149 155p 152 182 67p 683p 112p 93 34p 157p 96p 95 150r 154r 181 r 66 665 109 88 33 165 98 95 179r 71 672r lOOr 111 41 164 106 91 105 105 137 140 83 84 58 62 r 45 44 57 51 57 70 67 80 143 142 r 163 26p 24 46 50 61 30 30 27 123 118 111 126 124 104 132 94 no 113p 118 102r 92 88 111 84 83 85 97 97 92 119 117 125 75p 80 88 100 96 91 171p 171 161 87 83 80 84 81 78 109 103 95r 381 385 422 409 410 385 423 437 384 348 361 322 67 63 64 71 38 15 47 82 33 14 44 63 64 45 79 83 Factory Employment month and year ago April 1944 May 1943 April 1944 — 2 0 0 + 1 — 1 - 1 - 3 + 5 0 + 4 - 3 +1 - 1 - 3 + 1 Harrisburg.......... Philadelphia.... Trenton............... Wilkes-Barre.... Williamsport___ Wilmington........ York..................... Factory Payrolls May 1943 April 1944 - 94 + 94 + 24 +21 + 3 + 2 + 7 0 + 7 + 9 + s 0 +34 - 3 -13 - 5 + 1 - 5 + 7 - 9 -13 + 2 + 64 + 14 + 4 May 1943 +382 + 36 - 94 + 72 +120 - 56 + 71 +130 +142 + 52 - 94 April 1944 April 1944 May 1943 — 6 +1 0 + 2 + 6 + 2 +12 +20 + 3 +16 +51 + 3 +10 +24 + 1 + 9 +18 + 7 +27 +11 +15 +10 +22 1 • +25 + '5 + 2 +22 +11 - 7 - 6 -13 — 6 +12 -17 +12 + 9 + 3 * Area not restricted to the corporate limits of cities given here. ► 2 0 2 - 1 6 0 8 - 1 +10 -17 - 1 +1 0 - 32 0 +2 0 -3 0 + 2 + 2 - 5 + + 51 + 3 - - 336 501 99 367 133 280 237 141 153 146 170 183 189 + 3 + 2 + 7 + +211 + + 6 - 8 +28 +17 +17 + 10 6 - 5 + 2 +14 + 4 + 4 + 2 +12 + 5 + 3 + + 21 + + 2 6 +10 Manufacturing Employment* Payrolls* Per cent May change from May changefrom 1944 1944 index Apr. May index Apr. May 1944 1943 1944 1943 Indexes: 1923-5=100 TOTAL..................................... Iron, steel and products.. . Nonferrous metal products. Transportation equipment. Textiles and clothing.......... Textiles................................. Clothing................................ Food products....................... Stone, clay and glass.......... Lumber products.................. Chemicals and products.. . Leather and products......... Paper and printing.............. Printing................................. Others: Cigars and tobacco........... Rubber tires, goods........... Musical instruments. .. . . * Figures from 2862 plants! Debits May 1943 +1 + 3 8 Factory workers Averages May 1944 and per cent change from year ago Retail Sales 132 184 49 79 46 84 134 97 112 104 101 103 107 118 128 199 169 80 73 106 119 86 51 115 73 101 93 - 1 - 1 0 - 2 - 1 - 1 0 - 1 - 2 0 - 2 - 1 - 1 - 1 - 2 - 2 + 3 - 2 - 7 - 7 - 8 + 8 - 2 - 1 - 6 -13 0 + 2 204 280 424 313 120 111 165 186 131 81 211 114 148 130 + 2 + 2 0 + 4 + 3 + 3 + 4 + 4 0 54 148 85 - 2 - 1 - 8 -12 + 16 +38 73 302 151 + 2 0 + 1 0 0 -10 + 6 + 5 +11 + 9 - 3 - 3 - 2 +18 + 8 +10 + 3 - 5 + 7 + 9 -11 +29 +42 Hours and Wages p—Preliminary. r—Revised. Building permits value Per cent Per cent May changefrom May change from 1944 1944 index Apr. May index Apr. May 1944 1943 1944 1943 GENERAL INDEX........... Mnmiiucturing..................... Anthracite mining............... Bituminous coal mining... Building ond construction. uar. and nonmet. mining. rude petroleum prod........ Public utilities...................... Retail trade........................... Wholesale trade................... Hotels...................................... Laundries............................... Dyeing and cleaning........... 100 138 82 Local Business Conditions* Percentage change— May Indexes: 1932 —100 Payrolls TOTAL............................. Iron, steel and prods... Nonfcr. metal prods.. . Transportation equip.. Textiles and clothing.. Textiles........................ Clothing.................... . Food products.............. Stone, clay and glass. . Lumber products......... Chemicals and prods.. Leather and prods.. . . Paper and printing. . . Printing........................ Others: Cigars and tobacco. . Rubber tires, goods.. Musical instrument. Weekly working time* Hourly earnings* Weekly earnings! Aver age Gh’ge Aver Ch’ge Aver Ch’go hours age age 45.6 +1 $1,062 + 7 $48.17 47.0 + 2 1.117 + 5 52.46 46.0 + 2 .993 + 9 45.67 47.9 0 1.254 +10 60.09 39.7 - 2 .761 + 7 30.23 40.7 - 1 .777 + 6 31.65 37.3 - 4 .720 +11 27.28 44.5 +1 .816 + 5 36.58 41.5 + 6 .914 + 5 37.78 44.0 + 1 .759 + 8 33.20 46.2 + 3 1.060 + 5 48.98 41.8 + 3 .747 + 5 31.23 43.7 + 2 .899 + 4 39.78 40.5 + 2 1.046 + 4 42.87 40.3 44.0 48.4 * Figures from 2712 plants. - 4 - 1 - 1 .613 + 6 1.030 +13 .961 + 4 t Figures from + 8 + 7 +11 +10 + 6 + 5 + 8 + 7 +10 + + + + 9 9 7 7 24.72 + 2 +12 45.33 46.51 + 3 2862 plants. Page Eleven Distribution and Prices Sales Total of all lines..................... Drugs....................................... Dry goods............................... Electrical supplies............... Groceries................................. Hardware............................... Jewelry.................................... Paper....................................... May 1944 from 1944 from Month Year ago ago mos. 1943 - 2 +10 + 5 -23 - 2 - 8 +n + 9 - 3 + 9 - 7 -42 + 5 + 3 +12 +22 — — + — - 3 6 1 3 1 + 6 +16 — 7 +10 + 3 + 2 -12 + 7 - 1 + 7 - 5 +n + 7 +10 +21 Inventories Paper....................................... Per cent ch ange Basic commodities (Aug. 1939=100)........ Wholesale (1926-100).............. Farm............................. Food.............................. Other............................ Living costs (1935-1939=100)___ United States............. Philadelphia................ Food........................... Clothing.................... Rent............................ Fuels........................... Housefurnishings.. . Other.......................... May 1944 fro m May Apr. May 1944 1944 1943 Indexes: 1935-1939=100 1944 from 5 mos. 1943 Month Year ago ago RETAIL TRADE Sales Department stores—District........................ Philadelphia............... Women’s apparel.............................................. Men’s apparel.................................................... Shoe...................................................................... 148r 145r 137 135 113 168p 166 169 160 127 162 153r 145r 165 156r + 4 + 9 + 16 - 3 - 19 + 19* + + + + + + 14 15 23 19 13 7* 150 149 183 69 146 131 r 146 130 171 r 165 73 r 91 + + + — + + + + — — 15 15 11 24 14* 151 133 89 185 237 255 136 147 140 149 137 90 191 301 256 144 129 148 142 + i + 6 131 - 3 + 1 86 - 1 + 4 158 - 3 + 17 217 - 21 + 9 0 + 10 232 119 - 6 + 15 132 + 14 + 12 134 - 5 + 4 114 122 106 - 161 +264* - 22* +181* +148* - 8 + i May Apr. May 1944 1944 1943 162p 155 161 148 157 159 150 157 r 147 180 r 142 136 131 125 139 150 149 177 76 151 149 171 r 81 r 131 130 160 100 + 7 + 4 + 6 +12 +12 + 8 +12 +11 +30 152 137 89 165 301 216 131 137 127 142 135 90 153 156 207 121 120 136 143 135 86 141 276 197 114 12J 122 +18 113 122 105 -73* 16 -91* 10 + 7 162 4 4 174 21 4 161 + 9 + 7 +10 0 - 2 Inventories Source: U. S. Department of Commerce. Prices Not adjusted Adjusted for seasonal variation Per cent change Wholesale trade Unadjusted for seasonal variation Per cent change from May 1944 Month Year Aug. 1939 ago ago 181 0 + 3 + 81 104 123 105 99 0 0 0 0 0 - 2 - 5 + 2 + 39 +101 + 56 + 23 FREIGHT CAR LOADINGS Total..................................................................... Merchandise and miscellaneous................... Merchandise—l.c.l............................................ Coal...................................................................... Ore........................................................................ Coke..................................................................... Forest products................................................ Grain and products.......................................... Livestock............................................................ 125 124 133 137 107 109 133 119 0 0 0 + 1 0 - 1 + 1 0 0 - 1 - 6 + 7 0 + 3 + 8 + 4 + + + + 27 26 43 38 MISCELLANEOUS Life insurance sales............................................ Business liquidations + 13 + 33 + 18 Check payments................................................. * Computed from unadjusted data. Source: U. S. Bureau of Labor Statistics. 162 177 2 2 7 5 1* 7 + 7 r—Revised. p—Preliminary. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (Millions $) Assets Commercial loans.................. June 21, 1944 Changes in— Four weeks $240 34 13 36 6 102 -$ 3 Other loans to carry secur... Loans on real estate.............. Loans to banks....................... Other loans............................... Total loans............................. + + + 1 2 4 1 One year +$ + + + - 7 3 2 8 i 9 4 $431 +$ 1 -$ Government securities.......... $1571 Obligations fully guar’teed. . 54 Other securities....................... 173 +$17 + 22 - 2 +$195 - 19 - 34 Total investments................ $1798 +$37 +$142 Total loans & investments. $2229 Reserve with F. R. Bank.. . 421 Cash in vault........................... 30 Balances with other banks. . 80 O ther assets—net................... 53 +$38 + 22 + i + 1« - 7 +$138 + 21 + 2 3 — 7 Liabilities Demand deposits, adjusted.. $1780 Time deposits.......................... 179 U. S. Government deposits. . 250 Interbank deposits................. 357 Borrowings............................... 1 17 Capital account...................... 229 +$33 - 1 - 13 + 49 - 3 + 1 - 2 +$135 + 19 — 4 - 10 + i + 3 + 7 Page Twelve Changes in weeks ended— Changes in four weeks Philadelphia Federal Reserve District (Millions of dollars) May 31 June 7 Sources of funds: Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict)....................... Treasury operations................................................................... + 6.2 +10.1 + 3.8 - 5.9 +34.3 + 13 + 6.4 + 4.8 +14.1 + 1.2 +91.7 -94.7 + 7.9 +140.9 - 75.5 +20.1 +29.7 +25.3 - 1.8 + 73.3 Member bank reserve deposits.............................................. “Other deposits” at Reserve Bank....................................... Other Federal Reserve accounts;.......................................... +13.3 + 5.6 + 1.3 - 0.1 + 6.2 +25.4 - 2.0 + 0.1 +10.0 +15,0 + 0.3 + 0.0 + - + 25.9 + 44.7 + 2.8 - 0.1 Total............................................................................................ +20.1 +29.7 +25.3 - 1.8 June 14 June 21 Uses of funds: Member bank reserves (Daily averages: dollar figures in millions) Held Re quired Phila. banks 1943: June 1-15.. 1944: May 1-15.. May 16-31.. June 1-15.. $383 373 385 403 Country banks 1943: Jane 1-15.. 1944: May 1-15.. May 16-31. . June 1-15.. 252 268 269 283 Ex cess Ratio of excess to re quired $359 365 376 394 $24 8 9 8 7% 2 2 2 187 220 223 228 65 48 46 55 35 22 21 24 Federal Reserve Bank of Phila. (Dollar figures in millions) 3.6 1.3 3.2 0.1 +73.3 . Changes in June 21, 1944 Four weeks Bills discounted---- $ 1.9 Industrial advances 4.9 U. S. Securities .... 1018.4 -$ 5.0 - 0.7 + 89.6 +$ 1.7 + 0.2 + 579.0 Total...................... $1025.2 Note circulation . . . 1253.1 Member bk. deposits 694.6 U.S. general account 1.2 Foreign deposits ... 140.9 Other deposits........ 8.6 Total reserves......... 1074.5 51.2% Reserve ratio.......... +$84.0 + 25.6 + 44.7 - 25.3 + 2.8 + 2 8 - 45.2 - 3.5% +$580.9 + 290.9 + 55.7 + 0.7 + 51.5 + 3.5 - 191.9 - 23.5% One year
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