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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT @ JUNE i, 1940 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States Industrial activity was steady during April after three months of sharp de cline, and in the first half of May in creases appeared in some lines, particu larly steel. Prices of basic commodities showed mixed changes toward the mid dle of May, accompanying the exten sion of active warfare in Europe, while stock prices declined sharply. Production. The Board’s seasonally adjusted index of industrial production for the month of April was 102, com pared with 104 for March and 109 for February. Steel ingot production was steady during April at slightly over 60 per cent of capacity as compared with an average rate of 64 percent in March; in the first half of May output rose sharply and currently is scheduled at about 70 per cent of capacity. Auto mobile production in April continued at about the March rate, although ordina rily there is an increase at this season, and in early May declined somewhat. Retail sales of new cars approximated production in April and dealers’ stocks of both new and used cars remained at earlier high levels. Output of plate glass, used largely by the automobile industry, declined considerably in April, and lumber production showed somewhat less than the usual seasonal increase. In the machinery, aircraft, and shipbuilding industries activity continued at the high rate of other re cent months. In the textile industry activity at cotton and woolen mills declined some what further in April, following con siderable reductions in March. At silk mills activity remained at a low level, while rayon production was maintained at a high rate. Output at meat-packing establishments continued in large vol ume. There was some further curtail ment in shoe production in April; in most other industries producing non durable goods changes in output were largely seasonal in character. Coal production, which usually de clines sharply in April, showed only a small decrease this year. Output of crude petroleum, which had reached record high levels in March, was largely maintained in April and the first half of May, although stocks of crude oil were increasing and gasoline stocks were unusually large. For weeks ending January 6, 1934, to May 18. 1940. FREIGHT CAR LOADINGS DEPARTMENT STORE SALES AND STOCKS Value of construction contract awards increased further in April, re flecting principally a rise in contracts for private building, according to fig ures of the F. W. Dodge Corporation. Awards for private residential build ing were in somewhat larger volume than a year ago. Private nonresidential building was about one-third greater than at this season last year and was near the previous peak level reached in mid-1937. Awards for pub lic construction, however, were consid erably below the level of last spring. Distribution. Distribution of com modities to consumers showed little MONEY PEB CENT RATES IN NEW YORK CITY . PER CENT TREAS IRY BONO! • ‘ \ ft \ 1 V \ RESEf VE BANK UNT RATE , TREASURY NOTES (»-* YtMt) ^ j\fi 4 Y BILLS TREASU ssues) ir ./V'-V 1934 1935 1936 kVa, ■\A t‘ n V 1937 1938 ->.A1939 1940 salesA a/ y\A/ AT —__ Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. Durable manufactures, nondurable manufactures, and minerals expressed in terms of points in the total index. By months, January 1934 to April 1940. Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 aver age =100. ^ Miscellaneous, coal, and all other expressed in terms of points in the total index. By months, January 1934 to April 1940. STOCK — r"\ V ' Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average = 100. By months, January 1934 to April 1940. Page One change in April and the first half of May. The Board’s seasonally adjusted index of department store sales was 90 per cent of the 1923-1925 average in April, about the level that has pre vailed since the first of the year but below the peak of 96 reached last December. Total freight-car loadings in April were in about the same volume as in March. Shipments of coal declined less than seasonally, while loadings of miscellaneous freight, which include most manufactured products, showed less than the sharp rise that is cus tomary at this season. In the early part of May increases were reported in shipments of most classes of freight. Foreign trade. Exports of United States merchandise, which have been at a high level since last December, declined somewhat in April. A large part of the decrease in April was ac counted for by the complete cessation of shipments to northern European countries after outbreak of hostilities there, but declines were also reported in shipments to most other countries. Exports to Canada, the Union of South Africa, and France, however, increased. Shipments of commercial vehicles de clined sharply, following a considerable rise in March, and exports of iron and steel products, which had been increas ing steadily since last summer, also showed a decline. Exports of cotton and copper decreased further from earlier high levels, while machinery and aircraft shipments continued in large volume. During April, the nionetary gold stock of the United States increased by $337,000,000, the largest increase since August 1939. Acquisitions of gold in the first two weeks of May totaled $169,000,000. Commodity prices. Prices of a num ber of basic commodities, which had been declining after a rise in April, advanced from May 10 to May 14. Increases in this period were particu larly marked for imported materials, such as rubber, tin, and silk. Grain prices rose at first but subsequently showed sharp declines. Price changes for other commodities were mixed; steel scrap advanced, while cotton de clined considerably. Prices of certain steel products, which had been reduced early in April, were restored to earlier levels on May 1, and producers an nounced that steel purchased at the lower prices must be taken by the buy ers on or before June 30. Government security market. Prices of United States Government securi ties declined sharply from May 10 to May 14, accompanying the further spread of war in Europe. Prices of long-term Treasury bonds on May 14 were 3points below the high point reached on April 2. The yield on the 1960-65 2Y\ per cent bonds rose from 2.26 per cent on April 2 to 2.48 per cent on May 14. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities increased during the four weeks ending May 8. Most of this increase was at New York City banks and reflected purchases of United States Government obligations. De posits and reserves of banks in leading cities continued at record high levels. Business and Banking Conditions in the Philadelphia Federal Reserve District Productive activity in the Third Fed eral Reserve District in April con tinued about the same as in March at a level well above that of last year, but below the two and one-half year peak reached in December. In the past month the markets for a wide va riety of basic industrial products have improved considerably, owing princi pally to the widespread shifts in de mand and in the sources of supply occasioned by war developments. The principal gains in the past several weeks have appeared in armament and other heavy industries. Little change is as yet in evidence in the case of consumers’ goods where markets are unsettled and forward ordering gener ally restricted. Manufacturing activity in April de clined somewhat less than usual, and the production of oil and electric power expanded. The output of coal was maintained at about the level of March. INDUSTRIAL AND TRADE ACTIVITY WHOLESALE PRICES PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT. Construction activity increased further. General industrial employment and payrolls in Pennsylvania declined somewhat from March to April, and at factories further small declines in employment appear to have occurred in early May. Reductions in April were reported in the case of manufacturing, mining, and distribution, while in creases occurred in the construction, quarrying, and service industries. Both employment and payrolls were substan- PERCENT PRODUCTION 7 INDUSTRIAL STAPLES 813 COMMODITIES RETAIL TRADE SALES 7 AGRICULTURAL STAPLES 1935 1936 Page Tzvo 1937 1938 1939 1940 1937 1938 1939 1940 tially above the levels of a year earlier. Retail trade sales declined somewhat from March to April, but preliminary reports indicate improvement in May. Sales by wholesale establishments have increased. Distributors’ inventories were reduced in April. Wholesale commodity prices ad vanced slightly in April and were fairly well maintained in the first half of May. Quotations on staple indus trial materials have been generally firm since the middle of April, while prices of agricultural goods have declined. Manufacturing. The demand for fac tory products in this district has im proved substantially since early May, despite unsettlement in the markets for several products occasioned by war de velopments. Purchases of steel in creased in the early part of the month when the price structure in the indus try became firmer, and after the inva; sion of Holland, Belgium, and Luxem bourg, an important steel-pr;oducing re gion, both foreign and cjhmestic de mand expanded sharply. 'The market for building materials has been improv ing steadily now that construction ac tivity, which was delayed by unseason able weather, has gotten under way. The largest purchases and highest rates of activity continue in the shipbuilding, aircraft, machine tool, and other indus tries affected by the demand for arma ments?*-Markets for such manufactured consumers’ goods as textile and leather products continue unsettled and little forward buying in these lines is as yet in evidence. Production in general ap pears to have been moderatdy well bal anced with demand, and prices in many lines have shown renewed firmness. The volume of unfilled orders for manufactured products is substantially smaller than was the case a few months ago but in several lines increases are now being reported. Operations re cently have been fairly well sustained and purchases of new equipment con tinue relatively numerous. Only scat tered instances of plant expansions are in evidence. Inventories at reporting factories have shown little change in the past month and except in the case of textile mills approximate the levels of a year ago. Supplies of both raw and finished textile products at producing establish ments are smaller than last year. Employment and payrolls at Penn sylvania factories declined about 2 per cent from March to April as was to be seasonally expected. The latest indica tions are that gains occurred in May Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not Apr. Feb. Mar. Apr. 1939 1940 1940 1940 be typical. 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, totalJ............................ Sales to industries t............... Not adjusted Per cent change Apr. 1940 from Month Year ago ago 1940 from 4 mos. 1939 83 83 p 82p 81 81 83 p 81 81p 86 83 86 75 r 70 71p 92 93 95 77 78 7Sp 99 105 108 32 40 42 110 119 129 127p 118r 109r 106 95p 85 89 87 88 71 53 66 56p 80 66 51 54 p ** 68 69 74 436 444 417 433 + 0 + 1 + 3 + 1 + 3 + 1 + 2 — 0 + 4 + 3 — 1 — 10 + 1 — 15 — 18 + 7 + 4 + + + + + + + + + + _ - + 8 77 83 r 82 82p + 9 73 r 82 81 80p +31 - 3 +39 63 88 85 84 - 9 73 81 73 67p +34 75 93 99 100 + 3 74 76 77 70p + 8 89 84 96 99 + 8 36 28 35 41 +13 112 119 129 129p - 8 116r 116 r 109 94p + 3 87 89 88 89 - 5 74 56 57 57p - 7 83 54 55 ** ** 74 70 67 + 4 449 444 426 446 260 244 174 + — 6 0 2 + 10 + 10 + 6 _ — — - 78 75 65r 83 64 76 71 76 98 37 82 81 80 83 261 264 183 270 285 271 270 189 185 6 9 28 2 34 8 34 3 11 14 15 19 3 21 32 ** 1 Apr. Feb. Mar. Apr. 1939 1940 1940 1940 + 8 +10 + 8 254 277 252 286 176 181 275 279 268 278 179 187 2* + 8* 2* + 17* 2* + 19* + 9* +18* +22* 80 r 88 68 r 82 66 r 81 87 85 81 79 80 r 78 1* + 9* 2* + 17* + 7* 101 r 111 + 14* 129r 152 111 109 153r 151 - 5 - 7 -23 +27 +13 +16 - 9 55 62 43 52 44 53 114 111 32 23 49 48 231 248 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!................................... Nonresidentialf............................ Public works and utilities!............ Permits for building—17 cities. . . Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. .. . 62 r 53 58 r 47 56 r 47 87 r 96 13r 33 45 51 260 270 63 65 57 56 44 52 125 121 25 16 52 49 226 236 + 3 — 2 + 19 — 3 — 37 — 5 + 4 + 4 - 4 - 7 + 38 + 23 + 0 - 9 60 52 54 33 57 48 80 115 18 26 44 55 273 275 Distribution Retail trade —sales.................... stocks................ Wholesale trade—sales................... , . stocks................ Life insurance sales......................... 77 New passenger auto, registrations . Hotels—Occupancy.. . (1934 = 100) Income, total (1934 = 100) Freight-car loadings—total........... Merchandise and miscellaneous Coal.................................................. 72p _ 79p — + 81 86 79 — + + + — — 9 1 3* 2* 8 1* 10* 12* 4 2 1 - 6 + 2 + 5* — o* + 3 + 17* + 9* + 6* + 24 + 7 +112 +1 + 5* 82 79 60 77 79 82 - 4 86 93 +38* 128 112 + 3* 122 119 + 2* 136 129 + 19 52 64 + 15 62 64 +27 29 70 74p 95 88 149 150 119 132 129 145 63 63 64 66 67 62 Business liquidations Number............................. Amount of liabilities___ + 30* + 10* +100* + 16* - 9* -37* 94 r 70 37 16 +10 87 r 90 91 87 31 31 32 33 76 64 69 80 77 78 73 79 69 71 83 78 77 75 78 68 70 83 77 77 75 79 69 72 82 78 79 76 80 104 21 43 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ + 8 + 3 + U 0 + + + — + + + 0* 2* 2* 0* 1* 2* 1* + + + + + + + Prices—United States Wholesale (1926 = 100). Farm products.............. Foods............................... Other commodities.... Retail food....................... Philadelphia................... Scranton.......................... (In millions of dollars) 3* 9* 4* 2* 2* 0* 3* + + + + + + 3* 4* 1* 3* 1* 1* 2* Apr. 1939 Jan. 1940 Feb. 1940 Mar. 1940 Apr. 1940 $0.2 210 444 77.7 $0.7 207 618 82.4 $0.6 206 602 82.3 $0.3 206 611 82.9 $399 697 9.0 $414 745 10.0 $419 747 9.5 $427 726 9.7 % change from Month ago Year ago $0.2 200 683 83.9 -33 - 3 +12 + 1 0 - 5 +54 + 8 $4.37 719 9.5 + 2 - 1 - 2 +10 + 3 + 6 Banking and credit Federal Reserve Bank Bills discounted.............................. Other bills and securities............. Member bank reserves................. Reserve ratio (per cent)............... Reporting member banks Loans................................................. Investments..................................... Bankers’ acceptances outstanding. * Computed from data unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. + Not included in production index. p—Preliminary ** Strike last year. r—Revised. Page Three OUTPUT OF STEEL INGOTS TEXTILE ACTIVITY %OT CAPACITY EMPLOYEE - HOURS IN PENNSYLVANIA PERCENT PERCENT CARPETS _ AND RUGS i UNITED STATES < WOOLENS — AND WORSTEDS- HOSIERY EASTERN PENNSYLVANIA 193 7 19 3 8 1939 at iron and steel mills, when there is usually a small decline, and that larger than usual reductions were made in the textile industry. The number of factory wage earners in April was estimated at about 890,000, or 7 per cent below the high level in December. Wage disbursements in the middle of April amounted to approxi mately $21,500,000 a week, or about 12 per cent less than at the peak in December. Compared with April 1939, however, when manufacturing activity was approaching the year’s low, em ployment showed a gain of 6 per cent and payrolls 17 per cent. The sharpest declines in the month occurred at plants producing transpor tation equipment, shoes and other leather products. Large reductions were in evidence in the case of loco motives and cars and automobiles and trucks. Wage payments continue un usually large at shipyards and aircraft factories. In the transportation equip ment industry payrolls are still near the levels of late 1939, which were the highest since 1937. The greatest improvement was at plants producing building materials, especially lumber and cement. In the iron and steel industry the de cline in employment and payrolls from March to April, which was contrary to the seasonal tendency, was due pri marily to reductions at blast furnaces and steel works and rolling mills. At a variety of plants producing finished materials, payrolls were well sustained. At textile mills the decline in April was smaller than usual. At clothing factories, however, wage payments were reduced substantially more than was to be expected, the sharpest cur tailment being in the case of men’s clothing. Four Digitized Page for FRASER 1937 Employment in manufacturing indus tries in Delaware expanded 2 per cent from March to April and payrolls ad vanced nearly 5 per cent, reflecting gains in the case of lumber, transpor tation equipment, and chemicals. Em ployment was about 6 per cent higher than a year earlier and wage payments over 13 per cent larger. In southern New Jersey, employment and payrolls were approximately unchanged from March to April but were 15 and 27 per cent respectively above April 1939. The output of factory products in this district on a seasonally adjusted basis increased slightly in April and was 9 per cent above a year ago. The output of durable goods increased 3 per cent, reflecting improvement at metal working plants, shipyards, and lumber mills. Compared with April 1939 the output of durable goods was 28 per cent larger and in the first four months of this year production was 31 per cent above the corresponding period a year ago. The output of consumers’ goods increased 1 per cent in the month but was 2 per cent below April 1939 and in the first four months averaged 3 per cent less than last year. The output of electric power in creased 6 per cent more than usual from March to April and total sales expanded about seasonally. Sales to industry advanced 2 per cent less than was to be expected. Both output and sales continued substantially larger than a year earlier. Coal and other fuels. The market for anthracite has been quiet since the middle of last month, reflecting a sea sonal slackening in the demand for fuel by householders. Production ap pears to have been in balance with de mand, and mine stocks have shown no appreciable increase. 193 8 193 9 1940 Colliery output increased less than seasonally from March to April and was considerably smaller than a year ago, when the closing of bituminous mines stimulated the demand for a sub stitute fuel. Production was fairly well sustained in early May, according to preliminary reports. Approximately 16,700,000 tons were mined in the first four months of 1940, or about 7 per cent less than in the same period last year. Industrial demand for Pennsylvania bituminous coal has been steady since early April and continues substantially greater than a year ago. The output of mines in April exceeded seasonal ex pectations for the second successive month and in the first half of May pro duction showed a small increase instead of the usual decline. Activity at by-product coke ovens showed virtually no change from March to April but production con tinued well above the level of a year earlier. The output of gas and fuel oils increased somewhat further in April and was the largest for that month in recent years. Building. Building activity in this district expanded substantially in April, after having been delayed earlier this year by unseasonable weather. Con struction of family houses and nonresidential buildings increased more than usual in the month. New contracts awarded in April ap proximated $17,600,000, or 9 per cent more than in the preceding month and slightly above April 1939. Sharp in creases in all classes of nonresidential structures in the latest month were partly offset by smaller awards for residences and public works and utili ties. The volume of awards for houses was about the same as a year ago, but VALUE OF BUILDING CONTRACTS AWARDED FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE DISTRICT | ALLEGHENY DISTRICT [ PRICES OF BUILDING MATERIALS (1926=100) 1923 -23AVG.-I00 IOO tsmxxffx OCCCCCCCC^QD * » \ i • • •j i »1 I1 1 1 • » ■ » r.: • i* » ii M *A.# * / \ i i * i< V • /',! aJ c OAL CCCCb TOTAL N0N-RESID ENTIAL 75 / i i 1/ jrj \Xn P: 50 MERCHANC ISE AND MISCELL ANEOUS ) 25 RESIDENTIAL CONTRACTS A >J. TOR SEAS. VARIATION 1923- -3=100 (3months' moving *vg.) 1935 1936 1937 1938 1939 contracts for apartments and hotels, commercial structures, and educational buildings were substantially higher. Building contracts Philadelphia Federal Reserve District Per cent change April 1940 1940 (000’s From from omitted) month 4 mos. ago 1939 $ 6,956 1,344 5,612 1,440 1,546 1,039 1,965 — 8 — 25 — 3 + 58 + 17 +197 + 17 + 70 +10 +16 -43 Total buildings........... $12,946 Public works and utilities. 4,629 + 14 - 4 +38 + +1 5,990 Educational..................... $17,575 9 + 9 - 8 -17 -10 Source: F. W. Dodge Corporation. Contracts totaling $58,600,000 in the first four months this year were the largest for the period since 1931. Awards for all classes of construction except one- and two-family houses, commercial buildings, and unclassified structures such as hospitals and insti tutions, showed gains over a year ago, the sharpest increase being reported in contracts for public works and utilities. Agriculture. Seasonal farming oper ations in this district have progressed normally since the middle of May, after being delayed from ten days to two weeks by unfavorable weather earlier this year. Corn planting is nearly completed in most sections, truck crops are being set out in the southern coun ties, and potatoes are coming up satis factorily, after a poor start at the be ginning of the season. The condition of wheat, rye, and pastures is unusually favorable for this time of the year. The outlook for orchard fruits is prom ising and no damaging frosts have been reported. Growing conditions for berries are generally satisfactory. 0 1940 ADJUSTED 1934 OR SEASONA 1935 Planting intentions of farmers at the beginning of the season indicated that the acreage to be allotted to hay, po tatoes, oats, and corn will be about the same as in 1939, while increases are contemplated in the case of spring wheat, tobacco, and soybeans. The cash income from sales of crops and livestock products by farmers in Pennsylvania, New Jersey, and Dela ware in the first quarter of 1940 was 3 per cent greater than a year ago and the largest since 1937. Distribution, trade and service. Re tail trade sales in this district declined somewhat from March to April, when there is customarily a small expansion, but improved substantially in May, ac cording to preliminary reports. The reduction in April was due chiefly to continued unfavorable weather condi tions which curtailed the market for spring goods. The seasonally adjusted index declined 9 per cent in the month to a level about 18 per cent below the three-year peak reached near the end of 1939. The sharpest decreases were reported by stores handling shoes, men’s apparel, and durable consumers’ goods. Compared with a year ago sales by reporting retail distributors in April showed a decline of 6 per cent, owing to the restricted purchases of footwear and apparel. Sales by department stores in the month were fractionally larger than in the same period of 1939, and credit stores reported only a small decline. In the first four months of this year, aggregate sales at retail were 1 per cent larger than a year ago. Stocks of goods at retail establish ments declined 1 per cent on a season ally adjusted basis from March to April, but were about 2 per cent larger VARIATION 1936 1937 1938 1939 1940 than a year earlier. Increases over April 1939 were shown in all report ing lines but women’s specialty stores, where inveniories declined 8 per cent. Sales by reporting wholesale dis tributors in this district increased 3 per cent from March to April, reflect ing substantial gains in hardware and paper, smaller increases in drugs and electrical supplies, and declines in foot wear and jewelry. In April and in the first four months of this year wholesale trade sales were 5 per cent above the levels of a year earlier. Inventories at wholesale declined about 2 per cent in the month to a level approximating that of April 1939. The sharpest reduction from March to April was reported by hardware deal ers, and the largest decline from April 1939 Tas in inventories of dry goods. Total freight-car loadings in the Al legheny District in April continued about the same as in March although some increase was to be expected. The voluree of loadings was still 24 per cent above April 1939, when practically no bituminous coal was being shipped, and in th; first four months averaged 19 per cent more than a year earlier. Less than carlot shipments of merchandise increased in April, when there is usually no change, but miscellaneous shipnents failed to improve. Loadings of ore increased substantially less than usual, while shipments of coal, coke, and forest products declined somewhat more :han was to be expected. Freght shipments originating in Philatelphia have increased sharply since :he middle of April to the highest level )f this year. Shipments thus far this year have continued above the level in 1939. Saes of new passenger automobiles Page Five Hotel business Philadelphia Federal Reserve District Apr. per cent change from Month Year ago ago - 0 + 10 Room occupancy.... Per cent of capacity used: April 1940............. 58.7 March 1940............ 53.1 April 1939............. 54.0 Revenue from: Guest rooms........... Food.......................... Other sources......... Total revenue.. . —0 +9 1940 from 4 mos. 1939 +13 + 12 +11 +6 +7 +7 +2 +3 +1 +12 +6 +2 Loans and in vestments of the reporting banks have increased moderately in the past month, deposits have again expanded, and cash assets have recently been at the high est levels on record. The combined reserves of all mem ber banks in this district in the first half of May averaged $706,200,000, of which $384,000,000 was in excess of requirements. The proportion of ex cess to required reserves was 130 per cent at banks in Philadelphia and 94 per cent at the country barks, as against 75 and 58 per cent respectively twelve months earlier. Philadelphia banks: 1940: Apr. 1-15 Apr. 16-30 May 1-15 1939: May 1-15 Country banks: 1940: Apr. 1-15 Apr. 16-30 May 1-15 1939: May 1-15 Held Re quired Ex cess Ratio of excess to re quired $478.3 $216.7 $261.6 121% 505.4 222.4 283.0 127 * 520.4 226.3 294.1 130 * 75 * 318.8 181.7 137.1 181.4 181.8 185.8 149.7 95.2 95.5 95.8 94.7 86.2 90 86.3 90 90.0 | 94 55.0 | 58 ” ” » * Reserves reached a new hijh of $714,300,000 on May 11 and ever after a reduction to $700,100,000 on May 22 were still $10,100,000 larger than on April 24. The increase ir this four-week period was due primarily to a gain of over $18,000,000 in traisactions with other reserve districts. The volume of funds supplied by Treasury operations was much smaller than in the preceding period. Treasury dis bursements averaged about the same, but receipts were increased sulstantially by quarterly payments of Social Security taxes and by an increaie in the amount of State unemployment trust funds turned over to the Treasury Page Six Changes in— May 22, 1940 Four weeks One year Bills discounted................ $ 0.1 Bills bought....................... 0 Industrial advances......... 2.6 U. S. securities.................. 197.9 -*0.0 0 - 0.1 + 0.9 - $0.2 - 0.1 + 0.1 - 9.0 Total............................... Note circulation............... Member bank deposits. . US. general account. . . Foreign bank deposits.. . Other deposits.................. Total reserves................... Reserve ratio..................... +*0.8 + 2.4 +10.1 - 1.5 + 7.4 + 2.5 +21.9 +0.4% - *9.2 + 31.7 +236.7 - 20.6 + 17.3 + 12.9 +287.6 +6.2% Reporting member banks (000,000’s omitted) May 22, 1940 Assets for investment. Additions to the sup ply of funds through interdistrict and Treasury transactions were offset in part by an increase in currency de mand, a reduction in float, and an ex pansion in nonmember clearing bal ances at the reserve bank. The earning assets of the Federal Reserve Bank were increased somewhat in the latest month by a rise of $900,000 in holdings of governments to $197, 900,000. This reflected participation in open market purchases made by the System to aid in maintaining orderly markets. Loans and investments of reporting member banks increased $13,000,000 in the four latest weeks to $1,172, 000,000, and on a comparable basis are now about $80,000,000 higher than a year ago. Aggregate loans increased $7,000,000 as a result of expansion in commercial accommodation, holdings of open market, paper, and loans to pur chase or carry securities. Commercial loans in the month established a new high for the past two years and, al though reduced slightly from this peak by the close of the period, were about 14 per cent larger than a year ago. Purchases of additional securities comprising $13,000,000 of United States bonds and $4,000,000 of cor porate and municipal securities were partly offset by a reduction of $11, 000,000 in guaranteed obligations, which reflected in part repayments at Four One weeks year 212 31 26 33 50 1 93 $ 446 +* 7 +$45 $ 355 91 280 +*13 - 11 + 4 +*13 - 4 + 26 $ 726 +$ 6 +$35 Total loans & investments $1,172 Reserve with F. R. Bank. . . 531 20 Balances with other banks. . 215 83 Liabilities Demand deposits, adjusted . $1,033 262 U. S. Government deposits . 54 441 +$13 + 4 +$80 Other loans to carry secur... $200.6 347.7 700.1 25.5 44.6 18.4 957.8 84.3% Changes in— $ Obligations fully guar’teed.. +3 Banking conditions. Member bank reserves (Dollar figures in millions) Federal Reserve Bank of Philadelphia (Dollar figures in millions) +++++ in this district in April increased 1 per cent from March and were 17 per cent above April 1939. Income of nonresort hotels increased 12 per cent from March to April and was 6 per cent higher than a year ago. 15 216 Capital account....................... - - +$26 + 6 + 3 + 1 + 3 2 + 1 +$16 - 4 + 1 + 2 + i maturity. The total investment port folio continues larger than a year ago, but at $726,000,000 on May 22 was $39,000,000 under the peak at the close of January. The effect of this contrac tion on total credit outstanding was largely balanced by expansion in loans. Deposits at the reporting banks have increased $15,000,000 in the last four weeks to $1,790,000,000, owing prin cipally to larger balances carried for states and local governments. These balances have increased substantially in the past year, although not as much as have deposits to the credit of indi viduals and business enterprises and those carried for other banks. Gross deposits at all member banks in this district have shown a further increase in the past few months, reach ing $3,233,000,000 in the last half of April, or $580,000,000 more than the low point in late March of 1938. The gain in this period, which was entirely in demand balances, was greatest in Philadelphia, where deposits increased 34 per cent as against 11 per cent at the country banks. MEMBER BANK RESERVES AND RELATED FACTORS May 1 May 8 May 15 May 22 Changes in four weeks* Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict).......... Treasury operations..................................................... -4.9 +1.2 +5.2 + 2.5 +20.8 - 4.1 +0.9 +3.6 +0.1 -0.4 -7.3 -0.2 - 1.9 +18.3 + 1.0 Philadelphia Federal Reserve District (Millions of dollars) Changes in weeks ending— Total............................... t........................................... +1.5 +19.2 +4.6 -7.9 +17.4 Uses of funds: Currency demand.......................................................... Member bank reserve deposits................................. “Other deposits” at reserve bank........................... Other Federal Reserve accounts............................... +1.1 +2.6 -2.1 -0.1 + 2.1 +17.3 - 0.2 - 0.0 +0.1 -3.4 +8.0 -0.1 + 1.7 -6.4 -3.2 +0.0 + 5.0 +10.1 + 2.5 - 0.2 Total............................................................................. +1.5 + 19.2 +4.6 -7.9 +17.4 * Preliminary. 6 Employment and Payrolls in Pennsylvania COMMERCIAL LOANS REPORTING MEMBER BANKS PHILA. FED. RES DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes 1940 Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group indexes are weight ed proportionately). Per cent Per cent Apr. 1940— per cent April change from April change from change from 1940 1940 index Mar. April index Mar. April Mar. April 1940 1939 1940 1939 1940 1939 All manufacturing__ 1939 JAN. FEB MAR. APR. MAY JUNE JULY AUG. SEPT OCT' NOV. DEC DEPOSITS AT MEMBER BANKS 85 80 121 59 Iron, steel and products Non-ferrous metal prods Transportation equip.. . Textiles and clothing. . . Textiles......................... Clothing........................ Food products................. Stone, clay and glass. . . Lumber products............ Chemicals and products Leather and products... Paper and printing......... Printing........................ Others: Cigars and tobacco... Rubber tires, goods. . Musical instruments . -2 -2 -0 -4 -2 -1 -6 -1 +2 88 81 116 101 78 52 94 87 98 90 79 96 149 64 77 71 106 107 77 47 104 72 103 97 + 6 +17 +15 +14 - 7 - 9 + 0 + 2 + « 41 +0 -5 -0 +0 60 78 65 PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS Employehoursf Payrolls* +12 - 5 +1 - 2 41 -4 54 4 7 - 4 0 47 * Figures from 2,441 plants. 86 66 417 - 2 428 - 1 425 4 1 +28 - 6 - 3 - 6 - 5 - 5 4 6 -10 4 8 - 2 416 4 3 410 4 8 415 4 2 -12 -16 4 4-0 4 0 4 1 419 +27 +24 +36 - 5 4 2 419 4 2 - 3 - 1 - 0 416 420 - 3 413 2 2 - 4 1 - 5 - 4 2 -11 - 1 + 2 4 7 - 4 2 -15 - 1 - 1 - - 420 -18 4 4 4 2 - 1 0 6 4 2 4 6 414 414 f Figures from 2,198 plants. General Index Numbers COUNTRY BANKS Covering twelve branches of trade and industry Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) 1400 1300 PHILADELPHIA BANKS 1938 General index (weighted)... Manufacturing...................... Anthracite mining....................... 1939 1940 Percentage change—April 1940 from April 1939 City areas* Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . Williamsport........ Wilmington.......... York....................... Manufacturing Employ ment Wage payments +12 416 + 9 430 + 4 + 3 - 1 -11 +13 + S + 7 + 7 + 7 +20 +29 +1S +37 +12 - 0 - 7 +23 +27 + 6 +15 +12 Building permits (value) Debits + 66 + 81 — 65 - 25 + 66 + ii +269 4 46 +235 - 14 4 40 4803 +529 4 9 4 7 417 415 412 413 4 5 4 8 - 5 419 413 418 + 7 Retail trade sales - 7 -11 April 1940 from March 1940 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ W ilmington.......... Y ork....................... + 0 - 2 - 4 - 4 - 3 - 1 +1 - 3 - 1 - 2 - 2 + 2 + 2 + — + + + 1 4 5 6 6 2 0 5 2 6 3 5 1 + 69 4207 - 90 - 73 - 49 - 27 4182 - 33 + 85 - 7 - 63 +687 4 64 4 1 - 1 4 4 — 4 — 10 4 4 4 2 — 8 4 2 +10 — 9 -13 + 8 * Area not restricted to the corporate limits of cities given here. Building and construction......... Quarrying and non-met. mining Crude petroleum producing . . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries................................ Dyeing and cleaning................... - 1 - 2 - 2 — 3 +14 +16 + 1 + 2 - 4 - 3 +1 + l +ii + 9 4 6 - 3 -11 +13 4 l 4 4 - l 4 4 - 4 * 4 8 + 3 Mar. 1940 April 1939 151 194 62 178 63 192 157 108 122 123 124 - 2 - 2 — 6 417 4l7 — 16 415 416 + 1 4 1 - 2 - 2 4 4 - 5 418 4 2 4 7 4 3 4 6 4 3 129 .+18 +12 r INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES OF TRADE AND INDUSTRY rLKLLN 1 193 2AVG. =100 200 PAYROLL 5 \v IQ0 * J/ 160 + 1 — 15 April 1939 Per cent change from * Strike last year. — 11 4 3 4 9 -13 — 5 - 8 — 12 — 4 -11 109 132 68 103 46 112 132 97 102 119 104 102 101 Mar. 1940 April 1940 1 • i 1 1 1 1 1 K # « t * J 140 , A - 6 — 5 120 + 3 IOO -14 -11 60 L/"7 1 x EMPLOYMENT 1934 1935 v**’,; * / \— 1937 April 1940 index Payrolls Per cent change from 1936 1937 v' U'L N/ 1936 1939 1940 Page Seven RETAIL TRADE PHILADELPHIA FEDERAL RESERVE OISTRICT AOJUSTCD TOA SCASONAL VARIATION Index numbers of individual lines of trade and l«J3-25AVC..IW TOTAL manufactures 100 SALES 80 Philadelphia Federal Reserve District yV ,/V - V ST0 KS 60 Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted 40 Per cent ch ange Unadjusted indexes reflect merely the actual change which may or may not Apr. Feb. Mar. Apr. be typical. 1939 1940 1940 1940 Apr. 1940 frtDm Month Year ago ago DEPARTMENT STORES 100 1940 from 4 mos. 1939 Apr. Feb. Mar. Apr. 1939 1940 1940 1940 ' BO SALES 60 '' ' Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ Stocks of goods 77 80 51 55 108 101 71 80 96 r 104 79 71 75 84 94 94 72p 68 66 81 70p 81p 80 79p 54 53 102 99 74 73 107 106p 6 0 13 — 14 — 26 - 1 - 9 - 4 -12 - 3 -26 -14 — + + + 3 + + — l + + + — + 1 2 2 5 8 1 2 3 8 2 9 82 67 72r llor 110 91r 60 53 59 68 57 73 79 69 71 102 103 86 74p 65 60 96 80p 87p 79 53 107 76 98 r 77 53 100 74 104 82 55 lllr 77 111 81p 55 99 78 108p Rate of stock turnover Monthly turnover on annual basis men’s apparel stores 120 IOO SALES ____ / 1 .Ns . 80 \ wX 3.99 Wholesale trade 40 Sales + 3* —32* + 5* — 1* + 8* + 2* +17* + + + + + + + + +17* + 25* 1* 2* 12* 1* 17* 9* 21* _ + 1* + 0* + 3* + —11* + + 2* + — 3* 0* 10* 4* 1* 8* 5* 2* + + + + + + 140 STOCKS 120 A 100 35 59 r 50 71 81 17 54 16 332 82 47 40 113 100 142 62 32 24 76 81 68 74 103 19 63 40 433 r 70 55 47 142 92 131 37 38 25 Slaughtering, meat packing............. 96 95 Sugar refining...................................... 82 59 Canning and preserving.................... 60 61 Cigars..................................................... 97 98 Paper and wood pulp........................ 70 77 Printing and publishing.................... 89 91 Shoes...................................................... 132 133 Leather, goat and kid........................ 104 r 87 r Explosives............................................. 67 99 Paints and varnishes......................... 77 85 Petroleum products........................... 153 147 Coke, by-product............................... 86 122 69 73 66 68 109 r 15 67 40 443 70 r 50 45 120 80 137 67 38 26 61 74 72 84 117 11 68 35 470 70 48 42 114 79 143 67 38 29 100 51 65 104 75 89 120 92 98 81 172 118 111 41 66p 107 76 90 102 89p 92 79 172p 118 + + + + + V" ‘w ‘ /. jjy SALES 80 60 SHOE STORES +22 + 7 -22 + 2 -11 + 6 - 0 - 6 - 5 - 5 - 1 + 4 + 1 - 1 +11 71 25 45 18 44 32 4- 27 4-122 + 42 14 + 2 + 5 + 1 21 + 1 + 9 + 20 + 18 82 35 47 18 43 8 + 23 4-145 + 40 16 7 + 10 3 17 + 4 0 + 23 + 11 40 62 r 52 72 71 21 59 17 339 80 43 42 106 100 139 62 33 23 78 85 69 83 99 19 68 41 425 74 56 50 145 96 143 26 37 24 +11 -19 + 3 + 4 + 0 + 1 -15 - 3 - 6 - 3 + 0 - 0 + 16 49 + 11 + 11 + 8 + 2 _ 23 — 14 + 37 + 2 + 12 + 37 + 94 106 50 88 70 90 132 lOlr 68 81 153 90 97 96 109 77 78 54 56 57 58p 83 95 98 77 77 76 91 91 92 139 128 102 94r 91 87p 98 93 99 83 83 83 146 170 171p 128 123 123 -12 + 0 WOMENS APPAREL STORES 160 5* 7* 1* 1* 19* 1* 14* 12* 10* Stocks of goods Pig iron.................................................. Steel....................................................... Iron castings........................................ Steel castings........................................ Electrical apparatus........................... Motor vehicles..................................... Automobile parts and bodies.......... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds........................ Cotton products.................................. Carpets and rugs................................. Hosiery.................................................. Underwear............................................ Cement.................................................. Brick....................................................... Lumber and products........................ 40 60 0* 4.00 Output of manufactures S' ^STOCKS 77 80 68 70 76r 74 95r 94 94 85 81r 100 + + + 4+ + + + + — + + + + 6 18 12 11 10 2 11 1 31 7 10 32 80 79 69 77 lOlr 16 73 43 461 73 r 48 48 119 83 150r 52 37 r 24 69 77 75 85 102 14 74 37 480 69 44 44 107 79 140 67 40 27 I2Q SALES IOO nZ JA, 4j 80 '' 60 /V, ft 'S' / STOCKS 40 CREDIT STORES |+, IOO rvu'|(y V A v 80 V V SAL ES 60 40 * Computed from data unadjusted for seasonal variation. Page Eight p—Preliminary. r—Revised. 1936 1937 1938 1939 1940
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