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THE BUSINESS REVIE THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT JUNE i, 1939 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Volume of industrial production de clined sharply in April, reflecting chiefly shutdowns at bituminous coal mines and reduction in activity at tex tile mills. Retail purchases by consum ers were maintained. Production. In April the Board’s seasonally adjusted index of output at factories and mines was at 92 per cent of the 1923-1925 average, compared with 98 in March and 77 a year ago. In the steel industry production de clined in April and the first three weeks of May, but in the fourth week ingot output increased to 48*4 per cent of capacity, about the rate prevailing a month earlier. Around the middle of May substantial concessions were made in prices of some types of steel and it is reported that a considerable volume of orders for steel was placed during this period. Automobile production in April was at about the same rate as in March, although usually there is some in crease, and in May output declined owing in part to the fact that stocks of new cars were larger than is usual at this time of the year. Plate glass pro duction decreased sharply in April, fol lowing smaller declines earlier in the year. In the lumber industry output in creased somewhat in April, while ce ment production, which had risen sharply in February and March, showed less than the usual increase. Textile production declined sharply in April, particularly at woolen mills, where output had been at a high level, and in the silk goods industry where further curtailment reflected in part re cent high prices for raw silk. Output of shoes showed a decrease from the high level maintained during the first quarter of this year. At flour mills and sugar refineries activity increased further, while in most other nondurable goods lines changes in output were largely seasonal in character. Bituminous coal production was in small volume during April and the first half of May as most mines were closed pending settlement of contract negotia tions between mine operators and workers. After the middle of May agreements were reached at most mines and output began to increase rapidly. For weeks ending January 6, 1934, to May 20. 1939. FACTORY EMPLOYMENT AND PAYROLLS DEPARTMENT STORE SALES AND STOCKS INDUSTRIAL PRODUCTION Production of anthracite, which had been reduced in March, increased sharply in April and crude petroleum production rose further. In the first half of May anthracite production was maintained, but petroleum output de clined somewhat. Value of construction contracts awarded, according to the F. W. Dodge Corporation, was larger in April than in March, owing chiefly to a rise in awards for public projects. Contracts for private construction showed little change in the aggregate as private MONEY RATES IN NEW YORK CITY PERCEtfT 110 120 110 110 EM >L0YMENT 100 90 80 s/ \ r / rv> f\f J SALES AA—"N 100 90 s\ps 80 aC S' STOCK Av 60 /V 1934 70 60 / 1935 1936 1937 1938 1939 - Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 to April 1939. V \__ PAYROLLS 70 V Indexes of number employed and payrolls, without adjustment for seasonal variation, 1923-1925 average = 100. By months, January 1934 to April 1939. Indexes compiled by the United States Bureau of Labor Statistics. 50 1934 1935 1936 1937 1938 1939 Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average = 100. By months, January 1934 to April 1939. Page One • residential contracts declined, contrary to seasonal tendency, while contracts for commercial, factory, and other pri vate construction increased. In the first half of May awards for private work increased somewhat, while the volume of public contracts declined. Employment. Employment in nonagricultural pursuits declined some what from the middle of March to the middle of April, reflecting a sharp drop at bituminous coal mines offset in part by seasonal increases in construction and trade. At factories the number employed showed little change, while payrolls declined considerably because of fewer hours of work. Distribution. In April distribution of commodities to consumers showed about the usual seasonal increase. The Board’s adjusted index of department store sales remained at 88 per cent of the 1923-1925 average, about the level that has prevailed since last autumn. Railroad freight-car loadings de clined sharply, owing mainly to a re duction in shipments of coal. Load ings of miscellaneous freight showed less than the usual seasonal rise. Commodity prices. Prices of grains and cotton advanced from the middle of April to the third week of May and there were also increases in prices of silk, hides, and bituminous coal. Prices of copper and steel scrap, on the other hand, were reduced and sub stantial concessions were granted in prices of several leading steel prod ucts. Bank credit. Total loans and in vestments at reporting member banks in 101 leading cities, which had in creased in April, declined during the first half of May. The decline was at New York City banks and reflected a reduction in loans to security brokers and dealers and redemption of obliga tions of New York state and city gov ernments. After increasing substan tially in April, demand deposits at banks in leading cities showed little change in the first half of May. Bank reserves increased further in May to a new high level. Money rates. Prices of TJnited States Government bonds and notes increased sharply during the last half of April and the first three weeks of May to new high levels. The average yield on long term Treasury bonds declined from 2.34 per cent on April 11 to 2.13 per cent on May 22. 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 from March to April, owing to curtailed output of bituminous coal and of manufactured consumers’ goods. Production of durable goods contin ued unchanged. Industrial activity in the four months this year averaged about 14 per cent higher than in the same period last year. Preliminary reports for May indicate some im provement, particularly in certain lines producing durable goods. Construc tion of family houses, factories, com mercial buildings and public works and utilities increased further, while that of apartments, hotels, and educational buildings declined from March to April. Employment and payrolls in twelve lines of trade and industry declined from March to April. Early reports from the manufacturing industry show a further drop in employment but an increase in payrolls and working time in May. Compared with last year, wage disbursements continue larger, while the number of wage earners em ployed declined somewhat. Retail trade sales have increased seasonally, while business at wholesale establishments has slackened some what. Compared with a year ago, dollar sales at retail and wholesale have continued larger. Inventories of merchandise in both channels of trade declined. Following a slight decline in April, prices of industrial staples have lev eled off somewhat. Agricultural com modities have advanced recently, ow ing chiefly to higher prices for wheat, corn, and cotton. The index of 813 commodity prices compiled by the Bu reau of Labor Statistics in the week ended May 20 was 75.9 per cent of the 1926 average, having shown little change since the end of March. Manufacturing. Demand for factory products in this district showed little change in April and continued rela tively steady in May. Inquiries have been in about the same volume as in the previous month in practically all reporting lines, and sales have been INCOME PRODUCTION AND PRICES * PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT INDUSTRIAL PRODUCTION (PHILA. FED- RCS- OIST.) SALES OF FARM PRODUCTS COMMODITY PRICES U.S. (SEASONALLY ADJUSTER} _ PRICES OF _ RAW MATERIALS 1934 Page Two 1937 1938 1939 INDUSTRIAL PAYROLLS PENNSYLVANIA 194-0 ___________ Source for Prices - U.S. Bureau of Labor SMiahcs 1934 1935 1936 1937 1938 1939 1940 moderately well maintained except for seasonal declines in the case of textiles and shoes. Production is still closely geared to consumption, and backlogs have continued larger than last year. Inventories of finished goods and raw materials have continued to de cline, particularly in the iron and steel and textile industries. Plant activity in the aggregate was well sustained in May, as shown by preliminary returns from more than one-half of the reporting factories. While the number of wage earners ap parently declined slightly from April, the volume of wage disbursements and working time expanded somewhat. Employment in Pennsylvania facto ries in April was in about the same volume as in March. Following the rapid recovery throughout the last six months of 1938, the number of workers employed declined in January but in the next month recovered to the December high and since then has been comparatively steady. The amount of wages paid out, however, declined about 4 per cent in April from the level in March, which was the highest since November 1937. The April indexes of employment and pay rolls were respectively 5 and 13 per cent higher than a year earlier. The most substantial declines in wage payments from March to April occurred at factories producing such consumers’ goods as clothing, shoes, and foods. Declines also somewhat ex ceeded seasonal expectations in the case of some durable goods. Among the major lines, lumber products, chemicals and nonferrous metal prod ucts showed improvement. Hourly earnings of Pennsylvania factory workers increased fractionally to 69.3 cents in April. These rates have fluctuated narrowly near the high level reached about the middle of 1937. Weekly earnings, however, declined from $24.75 in March to $23.83, after having shown improvement in the two preceding months. In Delaware factories, employment and payrolls increased about 2 per cent in April, reflecting gains at plants producing building materials, trans portation equipment, and metal prod ucts. In Southern New Jersey the number of workers employed and the volume of wages paid showed only fractional changes in the month. The output of manufactured prod ucts declined about 2 per cent in April, after allowing for seasonal changes, 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 Apr. Feb. Mar. Apr. be typical. 1938 1939 1939 1939 April 1939 from 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!............................ Sales to industries!............... Not adjusted Per cent change 68 77 75 80 78 70 79p 76p 70p 86p 64 82p 71 76p 98 37 112p 119p 85 70p 79p 1939 from Apr. Feb. Mar. Apr. 1938 1939 1939 1939 4 mos. 1938 67 r 79 64 r 76 +18 + 16 +20 +16 +16 +37 +33 + 3 + 6 + 8 + 9 + 2 + 2 +56 +76 -97 - 4 + + + + + + + + 14 16 16 17 10 42 19 3 61 61 65 1 418 436 - 0 - 2 + o - 3 +1 - 4 + ] - 2 - 4 - 9 + 2 - 3 - 0 + 14 +30 -98 + 4 + + + + + - 25 5 3 1 14 15 0 14 253 260 248 244 165 174 + 3 - 1 + 5 + 12 + 11 +17 + ii 227 262 + ii 227 268 + 15 151 175 — o* - 4* _ 4* + 5* + 2* 73 + 13* + 12* 66 +17* + 15* 56 _ 4* - 7* - 5* + 3* -14 - 6 -14 -18 -40 + 3 + 4 - 2 +95 -43 +19 +18 + 1 -16 - 2 - 1 - 2* — i* - 1 +20* + 2* + 9* -15 - 4 -50 3 + 4 3* + 3* + +36* + — 4* _ — 2* + 5 + +15 + -36 + _ 4* -59* +53* + +48* - - 2 - 0 -12 + 5 + + + + _ 66 r 58r 74 55 60 53 r 73 92 34 103 117 84 45 45 46 453 111 110 63 85 71 77 101 41r 110 123 86 61 61 61 414 231 247 68 85 62 82 71 75 104 35 220 248 149 177 88 86 54 63 58 88 57 r 72 72 74 84 88 34 29 104 110 116 117 85 86 46 66 47 66 42 66 467 414 79 78 78p 75p 64 63 89 77V 75 75 76 75p 93 89 35 r 37 110 113p 127 lisp 87 87 52 73p 82p 50 67 1 426 449 254 252 176 258 245 157 Employment and wages—Pa. Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 =100).... General (1932=100) Employment. Payrolls. Building and real estate Contracts awarded!—total........... Residential!................................... Nonresidential!............................ Public works and utilities!.... Permits for building—17 cities . . . Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. . .. 52 69 24 51 90 69 72 119 11 18 45 43 309 318 59 50 60 105 21 51 47 51 86 12 44 45 249 260 76 76 r 67 77 77 r 68 76 74 65 103 146 103 147 98 136 56 + 6 61 + 104 28 39 - 34 100 59 + 24 68 97 14 + 64 15 - 0 43 46 - 19 325 324 55 48 56 69 26 41 254 60 54 57 80 18 44 273 - 3* 104 + 6* 132 Distribution Retail trade —sales................... stocks................ Wholesale trade—sales................... . . stocks................ Life insurance sales.......................... New passenger auto, registrations. Hotels—Occupancy.. . (1934 =100) Income, total (1934 =100) Freight-car loadings—total............. Merchandise and miscellaneous.. Coal............................................... 75 r 80 r 77p 77p + + - 82p 79p 83r 59 82 r 75 75 80 81 98 94 81 128 118 138 132 49 56 54 55 45 65 86 107 119 125 59 61 62 86 128 122 136 51 62 29 5* 81 r 86 4* 25 r 32 129 91 123 37 2 5* 14 42* 4* 4* a 13 5 Eusiness liquidations Number............................. Amount of liabilities.... Payment of accounts Check payments. . , Rate of collections (actual) Retail trade. 6 83 83 82 83 30 + 30 33 31 79 68 72 82 79 81 76 77 67 71 80 77 79 74 77 66 70 80 76 78 73 76 64 69 80 77 78 73 Prices—United States Wholesale (1926 =100). Farm products.............. Foods............................... Other commodities.... Retail food.......................... Philadelphia................... Scranton.......................... (In millions of dollars) i* 3* 2* 0* 0* 1* 0* 3* 7* 5* 2* 4* 3* 4* _ — - 4* 6* 5* 3* 3* 3* 2* % change from Apr. 1938 Jan. 1939 Feb. 1939 Mar. 1939 Apr. 1939 $ 2.1 214 391 74.2 $ 1.2 401 76.0 $ 1.2 209 401 76.7 8 0.5 209 410 77.3 $ 0.2 210 S 428 641 1357 10.8 $ 409 723 1457 10.0 S 407 723 1455 9.7 $ 411 719 1455 9.6 $ 411 707 1487 9.0 Month ago Year ago -60 -90 - 2 +14 + 5 Banking and credit Federal Reserve Bank Bills discounted............................ Other bills and securities........... . Member bank reserves............... . Reserve ratio (per cent)............. Reporting member banks Loans................................................ Investments................................... Deposits (a)................................... Bankers’ acceptances outstanding. 210 * Computed from data unadjusted for seasonal variation. ! Not included in production index. ! 3-month moving daily average centered at 3rd month. 444 77.7 +0 + + 8 1 - 0 2 + - 2 6 - 4 +10 +10 -17 p—Preliminary. r—Revised, (a) Less cash items in process of collection. Page Three METAL PRODUCTS-EMPLOYEE HOURS WORKED OUTPUT OF KNIT GOODS PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT rLKCLN1 192 3-25AVG.= IOO 175 STEEL WORKS AND ROLLING MILLS UNDEFM EAR v,. 150 V/ /v* 125 IOO FOUNDRIES AND MACHINE SHOPS 75 - ■.* - L i-V 1 / 1A \JJ V . A ___ V • I t Al . / 0• » 1 • IT It V Is I f 1 1 J ■ rsj /v HOSIERY^ 50 25 1934 1936 1937 but in the first four months of the year was 16 per cent above the correspond ing period of 1938. The expansion in manufacturing activity which had pre vailed throughout the second half of 1938 was temporarily halted in Jan uary but was subsequently resumed, so that by March the adjusted index reached the highest level since October 1937. Even after the decline in April, the index was slightly above the De cember high. The output of durable goods in the fourth month of the year was prac tically unchanged from March, but the production of consumers’ goods declined about 3 per cent after adjust ment for seasonal change. In this dis trict, the largest decreases from March were in the case of carpets and rugs, where activity has been sustained at an unusually high level for the past several months, and in the output of woolen and worsted products. Activ ity at hosiery and cotton mills through out the country is believed to have been reduced recently as a result of the increasing price of cotton and silk fibers. Other lines of consumers’ goods showing declines in April were foods, tobacco products, and shoes. The largest gain among durable goods lines was in the output of steel castings, which had declined sharply since last November. Production of electrical apparatus also increased fur ther, after allowing for seasonal changes, the adjusted index continu ing the rapid advance which has been in progress since last July. Other durable goods lines reporting improve ment were shipbuilding, which has ad vanced sharply to post-war highs since last summer; locomotives and cars, where activity is still near the de Page Four 1938 1939 ADJUSTED FC R SEASONAL 1934 1935 pressed levels of 1931-33; and iron castings. The durable goods group as a whole has improved almost steadily since June 1938 and now is about 20 per cent higher than a year ago. The current rate of output, however, is more than 30 per cent below the re covery peak reached in the late spring and summer of 1937. The output of electric power de clined 3 per cent less than usual from March to April. Total sales of power were increased by about the customary amount in April. Industrial consump tion of electricity increased sharply, the gain exceeding seasonal expecta tions by about 5 per cent. Coal and other fuels. Sales of anthra cite increased in April, reflecting the customary spring reduction in prices and the demand from commercial and industrial consumers, whose supply of soft coal had been cut off by the strike of bituminous miners. Output of hard coal expanded far more sharply than usual in April, and was the largest for any month in the past two years. Pro duction slackened somewhat in the first half of May, but continued substan tially above the level of a year ago. Anthracite shipments increased 44 per cent from March to April and were 65 per cent greater than in the same pe riod last year. Virtually all bituminous coal mines in Pennsylvania, as in other parts of the Appalachian region, suspended op erations on April 1, as a result of the failure of representatives of the work ers and the colliery operators to agree on a new contract. Production in this state dropped from 1,865,000 tons in the final week of March to a little over 200 tons in the first week of April and ARIATION 1936 1937 1938 1939 continued negligible until an agree ment was reached and the mines re opened on May 15. The shortage of bituminous coal was reflected in a substantial decline in the production of by-product coke from March to April. Usually production in April continues at the March level. Output of gas and fuel oils, on the other hand, increased further and was nearly 30 per cent larger than in April 1938. Building. The value of building con tracts awarded in this district in April exceeded $17,300,000, a decrease of 4 per cent from March, and a decline of 24 per cent from the unusually large total reported a year earlier. The reduction in the month reflected sub stantially smaller awards for apart ments and hotels, educational buildings, and unclassified structures, including public buildings, hospitals and other institutions. Building contracts Philadelphia Federal Reserve District Per cent change April 1939 From 1939 (000's omitted) month from 4 mos. ago 1938 $ 6,109 '465 5,644 6,292 i;208 2,755 ' 78 2,251 - 27 - 85 + 6 - 11 + 59 +270 - 93 - 50 +104 +322 + 76 - 34 - 9 +203 - 82 - 33 Total buildings........... $12,401 Public works and utilities. 4,925 - 20 + 83 + i + 24 - + $17,326 4 6 Source: F. W. Dodge Corporation. Contracts let for one- and two-family dwellings, which have continued in large volume in recent months, in creased 6 per cent further in April and SALES OF NEW PASSENGER AUTOMOBILES VALUE OF RESIDENTIAL BUILDING CONTRACTS PHILADELPHIA FEDERAL RESERVE DISTRICT THOUSANDS OF CARS PERCENT 80 PHILADELPHIA FEDERAL RESERVE DISTRICT ONE AND TWO FAMILY HOUSES 1937 1939 TOTAL JAN FEB. MAR. APR. MAY JUNE JULY AUG. SEPT OCT. NOV DEC 1934 1935 1936 1937 were about 50 per cent greater than a year ago. Awards for industrial build ings and public works and utilities in creased sharply in the month. Contract awards in the first four months of 1939 reached a total of $58, 271,000, the largest for that period since 1931. Awards for residential buildings were double those reported in 1938 and the value of contracts let for factories was three times as large. Wholesale prices of building mate rials have shown a declining tendency over the last two months. The index of the Bureau of Labor Statistics re ceded from 90.2 per cent of the 1926 average in the week ended March 18 to 89.3 per cent in the week ended May 20. A year ago this index was 90.4. Agriculture. Seasonal farming oper ations in this district are progressing normally, after having been delayed by excessive rains at the beginning of the season. Rainfall has been unusually light during recent weeks, and a threat ened deficiency of moisture in top soil is reported in some sections. The condition of truck crops and early vegetables is generally satisfac tory, but pastures and meadows are be coming somewhat dry. The outlook for orchard fruits is decidedly more favorable than at this time last year, fruit settings having been unusually heavy and frost damage negligible. Department of Agriculture estimates as of May 1 indicate that the produc tion of winter wheat will be somewhat smaller than in 1938, owing chiefly to a higher rate of abandonment reported thus far this year. This season’s rye crop, however, is expected to show a substantial gain over a year ago, a slightly lower yield being more than offset by the increased acreage planted last fall. 1938 1939 Farm cash income in the three states comprising this district increased more than seasonally in March but was slightly smaller than a year earlier. The improvement in the month re flected principally a gain in sales of live stock products. In the first three months this year receipts from the sale of crops and livestock products com bined were about 4 per cent less than in the same period of 1938. Distribution, trade and service. Retail trade sales in this district increased further in April, the peak month of the spring buying season, and prelim inary reports indicate that business was well sustained in early May. Pur chases of apparel and shoes from spe cialty stores were unusually large. Sales by department stores and by credit establishments handling electri cal appliances, furniture, radios, and other durable consumers’ goods, how ever, failed to measure up to expecta tions in April. Last year the adjusted index of re tail sales reached the recession low in May, following which there was an al most steady improvement until after the turn of the year. Since January this year the expansion in trade has been somewhat smaller than usual, so that the seasonally adjusted index of retail sales has declined slightly in each of the past three months. Compared with April 1938, retail trade sales showed a gain of about 3 per cent, after allowing for the earlier date of Easter this year. In March and April combined, the volume of business was about 5 per cent greater this year than last, reflecting general improvement in industrial conditions. Sales reported by wholesale estab lishments declined about 2 per cent from March to April, after having shown substantial gains in the previous two months, but business continued more active than a year earlier. Sharp seasonal declines were reported in April in sales of jewelry and footwear. Wholesalers of dry goods, paper, and groceries also had less business than in March, while in the case of elec trical supplies and hardware, sales in creased. Inventories at retail stores declined slightly in April and continued below the levels of a year ago. Reductions from March and from April 1938 were reported by all types of stores except the apparel group. At wholesale estab lishments stocks of merchandise also decreased slightly in the month and continued smaller than in 1938. Freight-car loadings in the Alle gheny district declined about 15 per cent from March to April, owing in large measure to the reduced volume of coal shipments accompanying the shut down in bituminous mines throughout the Appalachian area. Shipments of merchandise and miscellaneous freight increased slightly, but the gain was less than expected. Freight shipments originating in the Philadelphia area in creased from March to April and were well sustained in early May. Compared with a year ago, railway freight traf fic showed substantial improvement, although shipments of coal were re duced by more than one-third. Registrations of new passenger cars in this district increased further from March to April and were 36 per cent above a year earlier. Sales of new cars in May apparently have been well sustained. Revenue of nonresort hotels in this district increased 9 per cent from March to April but was 2 per cent below April 1938. Page Five Hotel business Philadelphia Federal Reserve District Apr., per cent change from 1939 from Month Year 4 mos. 1938 ago ago Capacity............................. Room occupancy . Per cent of capacity used: Apr. 1939................ 57.4 Mar. 1939................ 55 9 Apr. 1938................ 59.5 Revenue from: Guest rooms...................... Food.................................... Other sources.................... - 0 + 2 + 7 +12 + 8 Total revenue... + 9 -2 Re quired Ex cess Philadelphia banks: 1939—Apr. 1-15 *278.7 *176.5 35102.2 Apr. 16-30 310.6 180.8 129.8 May 1-15 318.8 181.7 137.1 1938—May 1-15 258.8 166.1 92.7 Country banks: 1939—Apr. 1-15 150.4 95.3 55.1 Apr. 16-30 147.9 94.5 53.4 May 1-15 149.7 94.7 55.0 1938—May 1-15 131.9 91.7 40.2 -$ + - -6 -2 -2 Total.......................... Note circulation......... Member bank deposits U. S. general account. Foreign bank deposits Other deposits............. Total reserves............. Reserve ratio............... -S0.1 + 3.4 + 5.0 + 1.7 + 5.8 - 0.8 +15.1 + 0.4% -$ 5.4 + 14.0 + 77.9 - 2.6 + 14.3 + 3.9 +110.3 + 3.5% -4 Ratio of excess to re quired 58% 72 » 75 " 56 * 58 57 58 44 * ” ” » In the five weeks ended May 24 Treasury disbursements in the district were about $5,500,000 greater than re ceipts, although receipts included sub stantial amounts of unemployment trust funds and quarterly payments of Social Security taxes. Additional amounts were supplied to the local market by gains in commercial and financial transactions with other districts, and by the release of funds from miscel laneous deposits at the reserve banks. The only significant factor tending to reduce reserves was an expansion of $4,500,000 in currency demand. The demand for currency was approxi mately triple the amount called for in the corresponding period a year ago. The net increase in reserves during the period was $5,000,000. Page Six Reporting member One year +$0.1 + 0.0 - 0.2 0 a further accumulation of surplus funds at banks in this district, as in the coun try at large. The reserves of member banks here increased to an average of $468,500,000 in the first half of May, a level which was approximately $78, 000,000 higher than a year ago. A new record of $477,800,000 was estab lished on May 9. Reserves of banks in Philadelphia were 75 per cent above requirements and those of country banks were 58 per cent higher. Balances with cor respondents also continue'large. Early in April these balances were well in excess of $300,000,000, nearly threefifths of the banks showing correspond ent balances as large as or substan tially in excess of required reserves. Held Changes in— Five weeks Bills discounted.......... $ 0.3 Bills bought................. 0.1 Industrial advances. . 2.6 U. S. securities............ 206.9 Banking conditions. There has been Member bank reserves (Dollar figures in millions) May 24, 1939 -4 -4 -6 +4 +1 Federal Reserve Bank of Philadelphia (Dollar figures in millions) $209.9 316.0 463.4 46.1 27.3 5.4 670.2 78.1% 1.3 0.0 0.5 3.6 Changes in this bank’s outstanding credit were minor. Discounts in creased slightly to $328,000, represent ing accommodation extended to 14 banks, while industrial advances to provide working capital declined to $2,600,000. The trend of deposits at the report ing member banks has been generally upward since March 1938, reaching a new high record of $1,512,000,000 on May 24, 1939. An expansion of $15, 000,000 since April 19 reflected for the most part increases in funds held for other banks, and for state and local governments. There was only a slight increase in loans to $413,000,000, resulting from the extension of additional credit to brokers and dealers in securities. Commercial loans fluctuated narrowly over the period, following a rise from February to the latter part of April. On May 24 these loans were still about 3/4 per cent less than a year ago, when business was less active. The reporting banks’ holdings of se curities declined considerably from December to April, but in the aggre gate did not show any material change in May. The investment in direct is sues of the United States Government declined $7,000,000 in the five weeks ended May 24, principally as a result of the sale of bonds, which comprise nearly nine-tenths of the total hold ings of governments. This reduction was largely offset by the purchase of (000,000’s omitted) Assets Commercial loans................... * Open market paper................ Loans to brokers, etc............. Other loans to carry secur... Loans on real estate.............. Loans to banks................... Other loans............................... Total loans...................... Changes in— May 24, 1939 Five One weeks year 188 25 23 32 53 1 91 $ 0 -$ 1 + 2 + 0 + 1 0 - 1 + * 413 +* i -$ 4 Government securities.......... S Obligations fully guar’teed.. Other securities....................... 345 96 260 -$ 7 + 4 + 2 +$38 + 5 + 3 Total investments.............. * 701 -* 1 +S46 Total loans & investments $1,114 Reserve with F. R. Bank. . . 322 Cash in vault........................... 17 Balances with other banks. . 193 Other assets—net................. 102 $ 0 0 0 + 17 - 1 +$42 + 57 - 1 + 26 - 3 Liabilities Demand deposits, adjusted . * 826 Time deposits.......................... 281 U. S. Government deposits . . 53 Interbank deposits................. 352 Borrowings............................... Other liabilities....................... 13 Capital account...................... 223 +$ 9 - 3 0 + 9 0 0 + 1 +*43 - 7 + 33 + 59 - Sources of funds: Reserve bank credit extended in district.... Commercial transfers (chiefly interdistrict).. Treasury operations.............................................. 2 5 $4,000,000 of guaranteed obligations and $2,000,000 of corporate and mu nicipal securities. Despite the decline in recent months, investments of the reporting banks remain $46,000,000 above a year ago, while total loans are smaller than they were at that time. The greater part of the funds received from a substantial expansion in deposits has been added to reserves and balances with cor respondents, which now are equivalent to 34 per cent of deposits and are about 2.7 times the required reserves of these banks. Acceptances of banks in this district have been declining steadily since No vember, the amount outstanding show ing a contraction of nearly $2,200,000 to $8,973,000 at the end of April. All classes of bills show substantial de clines in the past year with the excep tion of those covering goods stored in or shipped between foreign countries, which increased sharply in February and did not change materially in the subsequent two months. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) 7 2 7 2 1 1 2 Changes in weeks ending— April 26 May 3 May 10 May 17 May 24 Changes in five weeks -0.0 -0.7 +5.7 -2.3 +8.1 -3.3 - 0.9 + 9.2 + 1.9 +3.4 -2.8 -1.5 - 0.2 -10.6 + 2.7 -0.0 +3.2 +5.5 +5.0 +2.5 +10.2 -0.9 - 8.1 +8.7 Uses of funds: Currency demand.................................................. Member bank reserve deposits................... “Other deposits” at reserve bank.................... Other Federal Reserve accounts....................... +1.3 +5.0 -1.2 -0.1 +1.7 +0.7 -0.2 +0.3 + + + - 2.0 7.7 0.5 0.0 +0.4 -0.3 -0.8 -0.2 + - 0.9 8.1 0.9 0.0 +4.5 +5.0 -0.8 -0.0 Total..................................................................... +5.0 +2.5 +10.2 -0.9 - 8.1 +8.7 Employment and Payrolls in Pennsylvania MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes REQUIRED 31 '32 ’33 '34 '35 '36 DEPOSITS MILLIONS REPORTING MEMBER BANKS PHILA. FED RES. DISTRICT Apr. 1939— per cent change from All manufacturing. . .. Iron, steel and products . Non-ferrous metal prods. Transportation equip. . . 1 extiles and clothing... Textiles........................... Clothing.......................... k ood products................... Stone, clay and glass. . . Lumber products........... Chemicals and products . Leather and products... Paper and printing........... Printing.......................... EXCESS 929 ’30 Employehours f Employment* Payrolls * (Indexes are percentages of the 1923—25 average Per cent Per cent taken as 100. Total and group indexes are weight April change from April change from 1939 ed proportionately.) 1939 index Mar. April index Mar. April 1939 1938 1939 1938 TOTAL 76 68 106 53 94 89 116 100 70 52 83 92 97 92 - 4 +13 - 3 +18 + 0 +16 - 6 +18 -10 + 9 -10 + 7 -10 +15 - 4 - 1 - 2 +14 - 1 +13 + o + 9 -14 + 8 - 1 + 7 + 0 + 6 - 4 - 3 + 1 - 6 - 9 - 9 - 7 - 5 - 2 - 2 + 1 -15 - 1 + 0 +17 +18 +20 +34 +17 +18 +15 - 1 +19 + 5 +10 + 7 + 4 + 0 Cigars and tobacco.... Rubber tires, goods. . . Musical instruments .. 56 80 60 7 + 8 - 6 - 1 -11 +16 +34 + + + + + + + 0 0 2 0 3 3 4 1 4 0 o 4 2 3 + 5 + 4 + 5 +11 + 6 + 7 + 6 + 1 + 8 +10 - 0 + 6 + 3 + 2 74 74 119 50 79 75 100 100 65 43 91 82 99 97 +10 “ 1 + 5 -10 +20 45 88 57 * Figures from 2,265 plants. + 8 - 6 - 2 - Mar. April 1939 1938 +19 +36 f Figures from 2,037 plants. DEMAND (adjusted) General Index Numbers Covering twelve branches of trade and industry 700 b INTERBANK (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) General index (weighted)... Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing .. . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning................... US. GOVERNMENT 1937 1938 193 9 Percentage change—April 1939 from April 1938 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre.... Williamsport........ Wilmington.......... Y ork....................... Wage payments Building permits (value) Debits + 7 +59 + 4 - 0 + 9 + 4 + 7 + 6 + 7 + 1 + 4 + 19 + 8 + 18 +153 + 17 + 31 + 17 + 10 + 18 + 13 + 17 - 0 + 12 + 25 + 17 -35 +43 + 10 +78 - 0 +70 -41 -81 -75 -25 +19 -55 -59 + 5 + 5 -13 - 4 + 4 + 3 +10 - 1 +45 - 3 — 1 + 3 + 8 Wilmington.......... York....................... + 1 + 0 - 1 - 3 - 0 - 0 - 2 +1 - 0 - 1 - 1 + 1 + 1 + 0 — 10 — 4 — 7 — 2 — 4 — 5 — 6 — 1 — 10 3 + 2 1 -86 +37 -72 -43 +19 -30 -47 +51 -63 +29 —46 -58 -61 + 6 - 4 -13 - 1 - 4 -12 +1 -12 +18 - 7 — 5 -11 + 2 Payrolls Per cent change from April 1939 index Mar. 1939 April 1938 - 4 - 0 + 3 -91 + 9 +11 - 0 + 1 + 1 - 2 - 0 + 0 + 5 98 120 70 10 52 98 130 93 103 114 108 95 97 Per cent change from April 1939 - 5 + 5 - 8 -91 - 6 + 3 -16 - 1 - 9 - 3 - 2 - 4 -10 Mar. 1939 - 7 - 4 +32 -93 + 7 + 4 - 0 - 0 + 2 - 2 - 2 +1 + 5 136 180 77 14 66 163 149 101 119 114 120 119 116 April 1938 + 3 +13 +15 -89 - 7 + 6 -14 - 1 - 6 - 2 - 4 +1 -17 Retail trade sales + + + - 1 1 6 0 6 5 o 0 o 8 PERCENT - 2 - 4 175 April 1939 from March 1939 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre.... Employment INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES OF TRADE AND INDUSTRY i 932AVG. = I00 200 \ « f t + 9 + 2 V' \ ■ * f 150 +26 -20 - 1 +18 -18 r 4 h 7 - 4 -19 h 7 /% PAYR0LLS X .** t t+\ X J » V ** >.^4 * * V * * /*» * i a 125 • * k , A V't u ■ V EMPL OYMENT V 50 1933 1934 1935 1936 1937 1938 1939 Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRADf Index numbers of individual lines of trade and manufactures PHILAD ELPHIA FEDERAL RESE WE DISTRICT ADJUSTED ro* SEASOMAL M TOTAL T/v' Philadelphia Federal Reserve District V* t*# Index numbers: percentages of the 1923-1925 average as 100 Not adjusted Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. STOCKS —/ Per cent change Unadjusted indexes reflect merely tne actual change which may or may not Apr. Feb. Mar Apr. be typical. 1938 1939 1939 1939 April 1939 from Month Year ago ago 1939 from 4 mos. 1938 DEPARTMENT STOR ES Apr. Feb. Mar Apr. 1938 1939 1939 1939 SALES Retail trade Total of all stores........................... 75r Department................................. 63 r Men’s apparel............................. 73r Women’s apparel....................... 100 98 r Credit............................................ 79r Stocks of goods 80 r 52r 108r 72r 106 80 68 68 95 91 103 78 70 67 89 85 97 77p 68p 74 96 94 82p 77 77 77p 51 52 50p 103 104 108 75 73 71 100 101 97p - 2 - 3 +10 + 8 +11 -16 + - 1 3 4 2 4 — + 3 8 2 4 3 4 _ _ 59 75 82p 52 65 67p 55 62 70 68 105 116 61 90 110 75 85 92p 82 r 55 108r 77 108r + + + — — + 2 83r 2 64 r 1 73r 4 128r 0 120r 6 91r 75 80 79p 50 53 52p 102 114 107 69 76 76 100 104 99p 4 4 0 1 9 + + + + 8* 1.19 - 2* -14* + 1* — 7* +16* _ 4* + 4* -17* _ 7* Stocks of goods — — — — + 26 48 45 44 75 14 41 19 233 74 33 30 52 84 115r 60 24 25 43 58 45 67 74 18 55 17 323 85 59 43 132 107 132 56 33 23 Slaughtering, meat packing............. 83 94 Sugar refining...................................... 75 61 Canning and preserving.................... 57 54 Cigars.................................................... 91 103 Paper and wood pulp........................ 62 71 Printing and publishing.................... 88 89 Shoes...................................................... 163 132 Leather, goat and kid........................ 73 89 Explosives............................................ 74 79 Paints and varnishes......................... 70 76 Petroleum products........................... ,42 148 Coke, by-product............................... 72 97 39 58 47 62 78 19 54 15 322 85 60 r 43 146 109 131r 75 35r 24 35 57 50 71 81 17 54 16 332 81 47 42 113 100 142 63p 32 24 103 96 66 82 57 57p 100 97 71 70 89 89 150 132 98 107p 76 67 78 77 145 156p 99 86 * Computed from data unadjusted for seasonal variation. r'Vv\ v + + + + + + 3* 11* 6* 8* 19* 1* 9* 27* 0* + + + Page Eight V + + + + __ 5* 8* 8* 8* 21* 1* 9* 31* 6* STOCKS y* 1* 3* 5* 7* 2* + 5* 2* 7* 0* 9* 0* 7* 7* + 23* - 9 - 2 + 5 +15 + 5 -12 - 1 + 2 + 3 - 5 -22 - 4 -23 - 8 + 8 -15 - 7 + 0 _ 4* - 7 +24 + i - 3 - 1 + 0 -12 +10 -12 - 1 + 8 -12 + 34 + 18 + 11 + 61 + 8 + 15 + 31 — 18 + 42 + 9 + 41 + 38 +116 + 19 + 23 + 4 + 33 2 + 1* + 15 + 10 + 0 + 6 + 12 + 0 — 19 + 46 — 10 + 9 + 10 + 20 4 Wn s/W V ''SALES + 28 + 21 + 10 + 24 — 4 + 4 + 18 — 34 + 28 + 22 + 62 + 34 +164 + 33 + 29 + 41 + 26 + 3 + 1* + 12 + 9 — 1 + 5 + 11 - 2 — 9 + 23 — 6 + 7 + 4 + 23 30 51 47 45 65 18 45 21 238 73 31 31 50 84 113r 60 25 23 85 82 97 48 83 63 90 163 71 75 74 141 75 p—Preliminary. 45 61 46 75 71 18 60 17 317 90 60 46 134 111 144 39 32 22 88 96 80 50 86 71 89 139 96 79 75 146 102 45 63 50 69 72 20 59 17 335 88 58 46 144 114 142 r 57 34 r 23 89 99 101 50 92 72 90 159 97 76 79 144 102 y V SHOE STORES 40 60 52 72 71 21 59 17 339 80 43 43 106 100 139 62p 34 23 86 94 106 50p 88 70 90 132 104p 68 81 156p 90 SALES l\J ■ •* '“-VA. •i /HL ,\ STOCKS CREDI STORES STOCKS 1ys v\ .A + A V SALES r -Revised. 193 3 • — 5AREL STOF ES VOMEN S Al3PAREL ST JRES Sales Iron castings........................................ Steel castings....................................... Electrical apparatus........................... Motor vehicles..................................... Automobile parts and bodies........... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds......................... Cotton products.................................. Carpets and rugs................................. Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and products........................ men’ ap s 1.28 Wholesale trade Pig iron.................................................. . ^ ' s SALES Rate of stock turnover Output of manufactures STOCKS 1936 1937 1938 1939
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