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JUNE 1951 T H E BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA BUSINESS ON THE NEW JERSEY SHORE New Jersey has over a hundred miles of shore line, naturally designed as a vacation land. There, each year, vacationists spend from a quarter to a half billion dollars. The attractions are wide beaches of white sand, an equable climate, good fishing, and a variety of built-in amusements. Accessible to millions of guests, the shore resort “industry” continues to grow and prosper. Still greater accessibility is offered by the New Jersey Turnpike and the Delaware Memorial Bridge, both nearing completion. Expanding industrialization on the Delaware augurs well for the resorts. CURRENT TRENDS Commercial and financial activity was maintained at high levels. Most business indicators reflected little change from the preceding month. THE BUSINESS REVIEW BUSINESS ON THE NEW JERSEY SHORE Atlantic City unlocks the Atlantic Ocean on Memorial Day. That marks the official opening of the season for the seashore resort industry on the New Jersey coast line. Ceremonies appropriate to the occasion include the opening up of the bathing beach, the arrival of the first contingent of life guards, and the decking out of the mannequins in the Boardwalk store fronts with the sea son’s new summer fashions. Throughout June, vacation ists drift into town slowly, if the weather is normal, and more rapidly if the month is unseasonably warm. By the Fourth of July, people arrive in great, uncounted multi tudes. Then the hotels fill up and so do the restaurants, the Boardwalk, the beaches, the cabanas, the taxis, the jitnies, the pleasure yachts, the fishing boats, the stores, the theatres and night clubs, the piers, and the auctions. Until Labor Day, the whole town is “jumping.” What happens in Atlantic City takes place on a smaller scale in the neighboring communities along the entire coastline of New Jersey all the way up to the northern end, which is almost within sight of New York City’s sky line, and all the way down to Cape May where New Jersey dips its toes into the ocean. No one really knows the exact size of the vacation “industry,” spread out over the full length of this strand of sand; but New Jersey, the self-styled “Vacation Host to the Nation,” entertains millions of visitors, and the volume of business runs into hundreds of millions of dol lars. This industry is estimated to be one of the largest of the state. New Jersey a Small But Mighty State Probably no other state has greater diversity of wealth and charm packed into an area so small and irregular as New Jersey. It has mountains and marshes, country-side and sea-side, pine barrens and green gardens, fresh water and salt water, peach orchards and cranberry bogs, in dustry and wilderness, traffic congestion and open roads. It has a variety of soil, of scenic beauty, of topography, of people, and of occupations. Yet, it is hard to find on a map of the country because it is a small state. Great Page 2 est over-all length from north to south is only 166 miles, and the longest east to west measurement is a mere 57 miles. It is possible to motor the shorter distance from Trenton to Raritan Bay in a half hour. Surrounded on the west and south by the meandering Delaware River and the • choppy Delaware Bay, and on the east by the waters of the Hudson and the Atlantic, the state has only one man-made boundary on the north where it is anchored to New York state. A diagonal drawn roughly from Trenton to Newark divides the state of New Jersey into essentially two geo graphic provinces. To the north are the Highland and Appalachian areas, characterized by mountainous ridges and long valleys of the extreme north and northwesterly parts. Here is where glaciers in time past carved out beautiful lakes and woodlands, now dotted with inland summer resorts. To the east, crowded between the Watchung Mountain range and New York Bay, is New Jer sey’s greatest concentration of commerce and industry in cities like Newark, Jersey City, Paterson, and Passaic. The dollar value increment of manufacturing activities of New Jersey is superseded by only five other states, all very much larger in size. South Jersey, most of which is within the Philadelphia Federal Reserve District, is a coastal plain. The land is gently rolling and flat, the soil is loamy and sandy, and it is the bigger half of the state in square mileage. It is also an area of exceedingly great economic diversifica tion. Within this area is Camden, a hive of industry making products as diverse and unrelated as cans of soup, television sets, and battle cruisers. Not far beyond the industrial belt are the broad, flat clay and marl acres of truck gardening for the fresh vegetable markets and com mercial gardening for the canneries and freezeries nearby. If you drive through this region in the spring when the farmers are planting, or in the summer when they are spraying, or in the fall when they are harvest ing, you will understand why New Jersey is called “The Garden State.” Beyond the vegetable gardens and fruit orchards, heading toward the shore, are the pine barrens, THE BUSINESS REVIEW miles of second and third growth inhabited by the “Pmeys” a people undisturbed by the twentieth century commotion all around them. A sage of the Pines best expressed their philosophy of life to Cornelius Weygandt, author of 338 delightful pages, and a good index, en titled Down Jersey.” “The nicest thing about ‘the Pines’ is that there is no such thing as time here. You can always put off until tomorrow what is a trouble to do today. The only thing you need to do at any moment is what you want to do. There is alwmys time to do what you want to do.” Continuing your travel south by east, before you emerge from the Pines, you are alerted of your approach to the shore by an invigorating change of atmosphere. The shore itself cannot be missed because there are 125 miles of it. All roads end where the endless blue begins. A Multi-Million Dollar Climate Visitors to the shore resorts of New Jersey spend be tween a quarter and a half billion dollars annually. While the resorts offer numerous attractions, the outstanding attraction common to all of them is the climate. When the days get hot and sticky in the cities of the interior, it is always cooler and more comfortable at the shore. This is borne out by official records of the Weather Bureau, going back more than a half century. At the shore the mean monthly temperature averages 53 degrees throughout the year. It drops to an average of only 34 degrees in the winter and rises to an average of only 73 degrees in the summer. Compared with New York, 1 hiladelphia, and Washington, it is usually six to ten degrees cooler during the summer and warmer during the winter. At the shore, wind and water cooperate to make good climate. With the change of seasons, large bodies of water absorb and lose heat more reluctantly than land masses. Prevailing winds from the wide watery wastes of the Atlantic envelop the shore resorts with cool tem peratures in July and August when people in the interior mainland must endure higher temperatures and high humidity as best they can. At seaside communities, the monthly mean temperatures in July and August have never risen above 77 degrees over a period of threequarters of a century. Hence, the mass influx of people from areas where temperatures are not so equable. An other climatic factor favoring the seashore is the abun dance of days with sunshine. On this score, likewise, long-distance official records can be cited to show that daylight hours, for the most part, are gilded with sun light. Another natural attraction is found in the bathing beaches. New Jersey is favored with gently sloping beaches carpeted with fine, white sand. Every community makes the most of this asset by providing crews to keep the beaches clean, and life guards to make them safe. The resort industry has attained its present size and dimensions because the New Jersey shore is so easy to get to by so many people. Here is the case where the small size of the state is an asset. Summer vacationing is easily and quickly available to the millions of people living in the heavily industrialized New York-Philadelphia-Baltimore-Washington axis—the country’s largest cluster of people. When a heat wave strikes Philadelphia, untold numbers of people leave their places of business at the end of the work-day and motor down to the shore for a dip in the ocean. The market gardens, in the im mediate hinterland of the shore, supply fresh vegetables and fruits to feed the summer multitude, and off-shore commercial fishermen supply fish and other seafoods to add variety to the seashore dining rooms. The Seashore Communities From Highland Beach, north of the Trenton parallel, to Cape May, south of the Washington parallel, are more than fifty resort communities ranging in size from less than 1,000 to over 50,000 year-round residents. Some communities have quaint names, like Ship Bottom and Love Ladies; others have famous names, like Atlantic City and Cape May. Some of these communities, like Asbury Park and Long Branch, are at the water’s edge on the mainland; others, like Toms River and Pine Beach, are a short way up-stream; but most of them are on islands separated from the mainland by innumerable bays and inlets that dot the jagged New Jersey coast line. As seen on the map, there is a profusion of islands of all sizes and shapes—some long and slender like pencds and others very irregular like broken cookies in the bottom of the jar. In the back bays behind these islands, it is possible for a vessel to travel almost threequarters of the New Jersey coast lines from Point Pleas ant to Delaware Bay through the Inland Waterway with out once getting into the Atlantic Ocean. En route, the mariner is sheltered by the major insular beaches— Page 3 THE BUSINESS REVIEW 'WILKES-BARRE PATERSONo1- NEWARK, HvlEW YORK 'BROOKLYN EASTO gOMERVILLE HIGHLAND BEACH °FREEHOLD fASBURY PARK TRENTON PHILADELPHlAo, 'SEASIDE PARK BEACH HAVEN ATLANTIC CITY iCEAN CITY DOVER DELAWARE BAY WILDWOOD IAPE MAY Page 4 THE BUSINESS REVIEW Brigantine, Absecon, Peck’s Beach, Ludlam’s Beach, Seven-mile Beach, and Five-mile Beach. The resort communities have many characteristics in common—the bathing beaches, boardwalks, the back bays, the seagulls, the hotels, restaurants, apartments for rent, and salt water taffy. They are all as American as “hot dogs” and popcorn. Yet no two are alike, and each attracts its own particular clientele. Cape May is the oldest and southernmost. Sitting on the very edge of the cape, it has been host to a century and a half of patrons. In days gone by it has enter tained the country’s leading citizens—Presidents, Con gressmen, merchants, and socialites. It has charm, indi viduality, folklore, and tradition. It has old houses with widow s walks” on the roofs where wives kept vigil for their husbands returning from whaling expeditions. It has one of the first Ford cars, left behind as collateral by Henry Ford, who had to borrow money to return to Detroit, after having lost a race on the sands at Cape May. It has a fresh-water pond hard by the bay where British men-of-war and pirate vessels stopped to re plenish their store of drinking water, and there are legends of buried treasure cached by Captain Kidd. It has famous hotel registrations, like “A. Lincoln and wife,” and a beach studded with Cape May “diamonds” —not real, of course, but just as pretty and “finder’s keeper.” The city does not fret over its loss of patronage to resorts up the coast but is content to entertain each year the visitors who love its streets shaded with trees almost to the beach itself, its three- and four-story hotels with tall columns, high windows and spacious verandas, and its atmosphere of peace and quiet conducive to com plete relaxation. Wildwood, just a short distance above the cape, is different. It is livelier and larger. Including the ad jacent communities, it has a population of 10,000 perma nent residents. Claiming the “World’s Finest and Safest Bathing Beach, this resort has been growing rapidly. Its growth is attributable to excellent bathing facilities afforded by a wide and moderately sloping beach, a variety of boardwalk amusements, and good fishing. Mid way along the boardwalk is an amusement center de signed for those who like motion and thrills with their fun. The amusement center includes the usual roller coaster, whip, carousel, ferris wheel, scooter, and a number of unusual features like the “Rollaplane” and other marvels of mechanical ingenuity. The seasonal revenue of a million dollars is proof of the popularity of these amusements. Fishing is obviously a popular sport along the entire New Jersey coast, but at Wildwood it is riot only a sport but also a livelihood and a big business. At Cold Spring, there is an excellent deep water inlet which affords good shelter in time of storm, and there are also good harbor facilities. It is only a short run from Wildwood to a number of good fishing banks off the coasts of New Jersey, Delaware, and Maryland. Cape May Lighthouse and numerous jetties constructed over the years are addi tional safety factors that have contributed to the growth of commercial fishing out of Wildwood. Many of the boats are equipped with ship-to-shore communication facilities so that masters of the vessels can make quick sales of their catch in the best markets to representatives of the buyers awaiting at the wharves. Shipments leave Wildwood by rail or truck to the large markets in Wash ington, Philadelphia, and New York, with the latter tak ing the largest share of the best quality by reason of premium prices offered. Wildwood is a city of small hotels and apartments. Its Bureau of Public Relations lists over 4,000 hotel and apartment rooms available to summer guests. The city has an airport accommodating trans-Atlantic ’planes, spe cializing in overseas freight, and recently the airport has become the nucleus of a rapidly growing industrial development. However, income derived from the enter tainment of summer guests is the basis of the city’s eco nomic life. Ocean City, farther up the coast and within sight of Atlantic City, is a resort of still another type. With a permanent population of 6,000, that swells to an esti mated 60,000 at the peak of the season, Ocean City takes pride in being “The Country’s Greatest Family Resort.” This grows out of the fact that it was started as a Metho dist camp meeting, and in line with that tradition the sale of alcoholic liquor is still forbidden within the city limits. With one or two exceptions, the city has no really large hotels but numerous smaller hotels with 15 to 100 rooms each, and a large number of guest houses that are available by the week, the month, or the entire sea son. Long popular as a family resort and placing some what less emphasis upon commercial forms of entertain ment than its neighboring communities, Ocean City is steadily gaining in the size of its permanent population, Page 5 THE BUSINESS REVIEW which according to the latest census has increased over 25 per cent during the past decade. Over 1,000 homes, at a cost of almost $10 million, have been built during the post-war period and many of these new homes are equipped with heating facilities for year-round occupa tion. Atlantic City is in a class by itself. It has been de scribed as “an amusement factory operated on the straight-line, mass production pattern. The belt is the boardwalk, along which each specialist adds his bit to assemble the finished product—the departing visitor, sated, tanned, and bedecked with souvenirs.” Founded on sand, surrounded by water, and flooded with sunshine, Atlantic City is endowed with all the natural advantages that go with a seashore resort. What puts the city in a class all by itself are the added attractions built in by its enterprising promoters. With a permanent population just in excess of 60,000, Atlantic City is by far the largest of the New Jersey re sort centers. On popular week-end holidays, at the height of the season, the population rises to 360,000, in cluding the day-trippers. According to the best official estimates, the city entertains 12 million to 14 million visitors annually. To take care of such multitudes re quires physical and entertainment facilities in the grand manner, and Atlantic City has them. It is a city of hotels—448 of them, big hotels with capacity up to 1,000 rooms. In addition to the hotels there are about 1,600 guest houses. Total sleeping accommodations are so large you just would not believe it—but the city sel dom sleeps. There are over 500 restaurants, the largest with a seating capacity of 3,000. The Convention Hall is big enough to seat the entire population of the city. There are a hospital, two airports, three radio stations, four bus lines, five libraries, six miles of boardwalk, and an official city flower. The boardwalk is one of the country’s most famous fashion highways, where Easter styles go on parade each year. Amusement and diversion facilities are almost endless —sports and entertainment compete with stores for space on the five large piers jutting out into the ocean. In addition to entertainment and recreational opportunities at the theatres, on the golf links, at the race track, on the dance floors, or in the night clubs, there are also fishing, yachting, boxing, wrestling, ice hockey, basket ball, steeplechasing, and, of course, surf bathing and sun bathing to prove that you have been at the shore. Page 6 By reason of the ideal climate and all of the added attractions, Atlantic City is a great convention city. Americans are probably the world’s greatest “conven tioneers.” Whether it be bankers, doctors, teachers, or diamond cutters, they all have their annual conventions and sooner or later they convene at Atlantic City. And why not? The city has the facilities to house them, feed them, and entertain them. Atlantic City gets about 19 per cent of the country’s annual conventions, and there is no better place for large conventions, like the Lions International, which may draw an attendance of 16,000 members. In still another respect, Atlantic City is a good place for conventions. The city can guarantee betterthan-average convention attendance because convention eers meeting in Atlantic City do not have as many cousins or other relatives to visit while in town as they have in New York or Chicago or San Francisco. Atlantic City’s Convention Bureau has bookings into 1961, with commitments in every month of the year. But the heaviest bookings are on either side of July or August, the months always most popular with the vacationing crowds. Although most people motor to the shore in their own cars, the services and facilities of the common carriers have been improved very much in recent years. For those who prefer to travel by rail, the Pennsylvania-Reading Seashore Lines have installed a large number of Dieselpowered, air-conditioned coaches as part of an extensive modernization program begun in July, 1949. Those who prefer to travel by air can get to any of the major New Jersey resorts on frequently scheduled flights of the AllAmerican Airways or the Eastern Airlines. Resort cities are also served by Public Service and Lincoln buses be tween Philadelphia and New York with over 200 buses arriving and departing every week-end during the vaca tion season. The Nature of the Resort Business Founded upon the changing seasons of the year, the most obvious and obstinate characteristic of the resort busi ness is its seasonality. The greatest influx of people natur ally occurs during July and August, and it is the job of the various business proprietors at the seashore to pro vide shelter, food, basic utilities, and amusement. The month-to-month fluctuations in dollar volume of business by the producers of any or all of these services shows the mid-summer upsurge as surely as the hump on the dromedary’s back. THE BUSINESS REVIEW The seasonality is revealed not only by the turnstiles to the boardwalk amusements but also by hotel occupancy rates, consumption of kilowatts, bank deposits, sales at gasoline stations along shore highways, and volume of passenger car traffic over the Delaware River bridges. Not all seashore resort communities roll up their board walks for winter storage and go into hibernation after Labor Day. A study of the monthly composition of the total business volume of Atlantic City over a representa tive period of years shows that 25 per cent of the total is concentrated in July and August, with three-quarters of the total transacted during the remaining ten months. By various means, the season is extended beyond the peak months. Atlantic City extends its season by such attractions as the annual Miss America Pageant in Sep tember and the scheduling of conventions in the off season months. Reduced hotel and apartment rates also attract a considerable number of guests in the lessfavored months of the year. In addition to a small amount of manufacturing ac tivity at the larger resorts, most of them provide consid erable year-round employment for the provision of the basic needs such as education, utilities, and trade for the permanent population. Many of the resorts are grow ing communities, with a substantial volume of new con struction for residential and commercial use. Much of the repair and maintenance work is concentrated in the off season period. Carpenters, electricians, painters, and other handicraftsmen are usually hard to find in the spring months because they are all busy on maintenance and renovation work in preparation for the coming sum mer season. Off-season employment is also provided in the main tenance of the bathing beaches. Sand, sea, and sunshine the sources of the New Jersey shore’s prosperity— also bring with them a major problem, erosion. The shore line is forever changing, advancing here and receding there. It is a slow process that can be measured with the kind of stop watch used to time the movement of glaciers, but it is nevertheless very real to the seashore communi ties. Occasionally, though fortunately not very often, high winds of the North Atlantic storms whip the waters into an angry sea that rises up against the coast with consid erable damage both to the shore line and to shore prop erties. Over $30 million has already been spent in the construction of protective structures such as sea walls, bulkheads, jetties, and groins. Jetties, built with quarry stone, and groins, built entirely out of timber, are con structed at right angles to the shore line so as to trap and hold sand to form and build up beaches. According to the latest report of the Beach Erosion Commission, additional expenditures of $30 million are required along the beach frontage. While it would appear from these figures that the half-way mark has been reached, actually progress made thus far is greater because the dollars already invested in days gone by did more work than today s dollars. The cost of beach-protecting structures is split fifty-fifty between the local communities and the state. Seashore Banking Seasonality of the resort communities is reflected in sea shore banking, as shown in the accompanying charts. While the seasonal changes are pronounced, they are not as marked as the extraordinary publicity given to sum mer business might lead one to expect. The average of debits at the high point in August is only about onehalf again as large as in February, usually the low month. Check payments in the third quarter of the year, during which deposit turnover is most active, account for only about 30 per cent of the year’s total. If it were possible to include transactions in currency, the propor tion undoubtedly would be higher. BANK DEBITS Atlantic City, N. J. MILLIONS 8 MILLIONS S 80 ---------- 80 i i i i i i i | i i i i i i 1948 While deposits at banks in resort cities also exhibit char acteristic seasonal changes, the general level of deposits is more stable than the volume of check payments. For a group of 10 member banks in seashore resorts in the area extending from Cape May up the coast beyond At lantic City, the monthly average of deposits in the three Page 7 THE BUSINESS REVIEW summer months was only about one-seventh higher than the average for other months. The expansion of deposits during the summer months, however, is of sufficient mag nitude to pose special problems for bankers in the resort area. Since the growth in the summer is largely tem porary, bankers adjust to the changing supply of funds by investing substantial proportions of the surplus funds in Government securities. The peculiar nature of the resort industry is also re flected in the lending operations of banks, but seasonal changes in loans are less pronounced than those in de posits. The peak in bank loans is reached in May or DEPOSITS AND EARNING ASSETS Seasonality of the resort business puts a premium on liquidity in seashore banking. This is indicated in the composition of bank assets. Last June, banks at the shore had, on the average, 39 per cent of their total assets in highly liquid form such as cash assets and short-term Governments—bills, certificates, and notes. That was in contrast with 26 per cent in cash assets and short-term Governments for all member banks of the Philadelphia Federal Reserve District. These proportions were based on mid-year figures, before the usual seasonal expansion in available funds had made real headway. While the emphasis upon liquidity naturally varies from one bank to another, seashore banks generally make adjustments in the liquidity of their assets to meet conditions peculiar to their localities. Ten Banks in New Jersey Seashore Resorts Expectations MILLIONS S MILLIONS I 200 200 TOTAL DEPOSITS INVESTMENTS LOANS 1948 1949 1950 June as the season opens and preparations for summer activities are completed. Repayment occurs as funds flow into trade and service establishments, and loans ordinarily reach their low point in September or October. A rela tively narrow spread between high and low points reflects, in part, the fact that a large proportion of the portfolio consists of relatively long-term real estate and consumer credit. Page 8 Shore “shop talk” is always in terms of “the season.” It may be heard at hotel desks, in the cafes, at the teller s cage, at the fishing wharf, at the Rotary meeting, and, of course, at the real estate office. As you listen in, you learn that last year’s season was inevitably bad it did not come up to expectations. The 1951 season is expected to be good. This is based upon recent apartment and hotel inquiries which have been running from 25 to 40 per cent above last year s. Of course, that does not mean that the number of people coming to the shore this year or the amount of money they will spend will be above last year’s averages by those percentages, but it is some indication of the prospect. When the rental season opens, owners of apartments and guest homes hold out for guests who want to rent for the entire season. Later on, if demand does not come up to expectations, those with rooms still available make bookings by the month or by the week to accommodate guests who, for lack of time or financial resources, take only a short vacation. Prospects for the current season are good because of prevailing high levels of business activity, employment, and income. The resort business is a luxury industry in which gross receipts rise and fall in harmony with changes in business activity generally. Delightful to millions when they can afford it, a vacation at the shore is something that they can forego if they must. The resort industry has en joyed a series of good seasons growing out of high levels of business activity with almost no interruptions through out the post-war period. Current and prospective business trends seem to assure another good season. THE BUSINESS REVIEW The long-run prospects for the resort industry of the area are especially auspicious. The region is favored by natural geographic factors which have already been turned to good account, and New Jersey is at present undergoing extensive alterations and improvements that will benefit the resort communities immeasurably. Accessibility to the New Jersey shore will be ever so much easier to the millions of people on the fringe of the state by the end of this year when the New Jersey Turn pike is completed. This multi-lane, high-speed, super-high way will uncork the country’s greatest bottle-neck of traffic along the densely populated New York to Washington route. The northern terminus of the turnpike will be at State Highway No. 6, with access to the George Washing ton Bridge over the Hudson to New York. The southern terminus of the Turnpike will be at the Delaware Memorial Bridge at Deepwater below Wilmington, Delaware. This bridge, now under construction, is also scheduled for com pletion this year. Numerous interchanges along this great artery of traffic will provide better access for more people to the beach resort areas of southern New Jersey. The Turnpike will be an important link with traffic northward up the Hudson River Valley and eastward over U. S. Route No. 1 across Connecticut by the Merritt Parkway and the Wilbur Cross Parkway through Massachusetts by highways existing and in process of extension, along the New Hampshire Turnpike, soon to be completed, and along the Maine Turnpike as far as Portland. Southward, the New Jersey Turnpike will afford free traffic movement across the Delaware Memorial Bridge over the DuPont Parkway through Delaware and U. S. Route No. 40 to Bal timore, Washington, Richmond, and points south. North of Philadelphia, a connecting link with the Pennsylvania Turnpike will afford easier traffic movement to and from the west. The New Jersey Turnpike is designed to accom modate an annual volume of traffic expected to increase from an initial 8 million vehicles in 1952 to 22 million by 1975. In addition to the Turnpike there are a number of smaller public improvement projects sponsored by the state. Among these are a newly projected ferry from Cape May to Lewes, Delaware, a Delaware River Parkway from Trenton to Port Jervis, a freeway across the state from the Delaware Memorial Bridge and the Turnpike to the sea shore, dualizing of the White Horse Pike, a Garden State Parkway from Paterson to Cape May, development of recreational centers on Sandy Hook and Island Beach, and the improvement of a half million acres of submarginal land throughout the state. Central and southern New Jersey are in the process of great industrial development, stimulated by the expansion of steel manufacturing along the Delaware. A large, fully integrated plant on the Pennsylvania side of the river across from Trenton, now in the bulldozer and power-shovel stage, is to be in partial operation before the end of the year. Another mill in the vicinity of Paulsboro, south of Camden, where land and river frontage have been re served, is expected to be under development in the near future. A third and possibly a fourth are in the contem plated or survey stages. Whether one steel mill or whether more than one, the result will be an influx of auxiliary industries—some to feed raw materials and supplies to the new steel plants; and others, steel consuming plants, to feed on finished steel, together with a host of allied trade and other service industries that are indispensable ad juncts to a new large-scale industrial development. Sub stantial growth in population accompanying the expan sion and diversification of industrial activity, almost at the back door of the coastal resort industry, is destined to stimulate the demands for the services of the seashore vacationlands. Additional copies of this issue are available upon request. Page 9 THE BUSINESS REVIEW CURRENT TRENDS Commercial and financial activity in the Third Federal Reserve District during April was maintained at about the same high level as in the previous month with most business indicators showing little or no change. The forward march of prices in Philadelphia was at a practical standstill. For the second consecutive month, the movement of the consumer price index was fractional. Retail buying during the month was relatively quiet. Department store sales showed a slight improvement over March, and compared with a year ago, they were up only 2 per cent, the smallest gain for any month this year. It is quite evident, in view of today’s higher prices, that physical volume is below that of April 1950. With consumer buying at a compara tively low level, efforts to reduce inventories met with little success. Stocks rose during the month, and at the end of April the ratio of stocks to sales was 4.2 compared with 3.0 last year. Production in Pennsylvania factories showed no change in April. Although the durable goods industries continued to increase their output, curtailments in nondurable plants offset the gain. Manufacturers of hard goods also expanded the size of their work forces and payrolls, but again these advances were counter-balanced by declines in the soft goods group. Although down somewhat from the previous month, the volume of construction contracts continued well above last year s level. The increase was most noticeable in the non-residential field, but more residential contracts were awarded as well. Activity in public works and utilities remained below that of 1950. Business loans of Third District reporting member banks increased less than 1 per cent in the four weeks through May 23, and there was little change in real estate and consumer loans. For the country as a whole, business loans were un changed over the same period. Total loans at all commercial banks registered a small decline in April, after increasing by more than $2 billion in the first quarter of the year. The Nation’s money supply rose in April, reflecting in part a shift in deposits from Government to private accounts as tax receipts were spent. This was in contrast to the first quarter of the year when the private money supply declined seasonally by $4% billion. Third Federal Reserve District Per cent change SUMMARY United States Per cent change Apr. 1951 from mo. ago OUTPUT Manufacturing production. Construction contracts. . . . Coal mining............................. 0* 1 + 26 4 mos. 1951 from year ago Apr. 1951 from mo. ago year ago 0 + 18* + 17* + 10 + 35 + 22 21 - 3 + 7 + 17 + 15 - 9 LOCAL CONDITIONS 1951 from year ago + 20 + 20 + 20 year ago TRADE** Department store sales. . . Department store stocks.. OTHER Check payments.. ... Output of electricity. - 1 Page 10 Sales Stocks Per cent change Apr. 1951 from Per cent change Apr. 1951 from Per cent change Apr. 1951 from Per cent change Apr. 1951 from Per cent change Apr. 1951 from mo. ago mo. ago year ago + 25 year ago 2 + 33 + 4 + 2 +13 year ago + 19 0 + 42 - 5 + 24 -1 + 42 - 7 +14 +25 0 +32 -16 + 28 1 0 mo. ago year ago mo. ago year ago + 28 + 4 10 13 + 4 Of + 13 + 26 - 8 -11 + i +12 f +ut + 22 + 10 + 20 + 11 0 0 0 0 0 0 0 -11 + 3 + 31 + 7 + 26 - 8 -12 + 15 +20 + 10 + 25 -1 + 36 - 5 + 19 0 + 9 0 +25 -26 -9 +7 + 29 -21 - 2 Philadelphia....................... + 3 + 1 •Pennsylvania ' ~ . , , . ••Adjusted tor seasonal variation, fPhiladelphia. Payrolls + 12 + 13* + 12* + 32* + 31* BANKING (All member banks) Deposits.............................. Loans................................... Investments........... U. S. Govt, securities . Other............................... . PRICES Wholesale.. Consumers. Check Payments Employ ment mo. ago A 11__ a EMPLOYMENT AND INCOME Factory employment. . . Factory wage income... Department Store Factory* 0 + 14 0 + 33 - 6 -3 +1 + 34 - 6 + 22 Reading................................ 0 + 8 -1 + 28 + 5 +i +5 + 37 -13 +10 + 4 —3 + 16 - 9 + 10 + 13 + 6 + 26 - 8 -12 + 18 + 20 +10 + 25 a 1 -2 +7 + 28 + i + 18 - 7 -8 -1 + 33 -15 + 17 Wilkes-Barre...................... +2 + 14 +i +35 Williamsport....................... -3 + 12 -4 + 36 - 7 + 27 Wilmington......................... -3 + 9 -4 + 25 -19 + 23 York...................................... -5 + 4 -5 + 20 - 2 + 37 -11 -5 +2 + 27 ♦Not restricted to corporate limits of cities but covers areas of one or more counties. THE BUSINESS REVIEW MEASURES OF OUTPUT EMPLOYMENT AND INCOME Per cent change April 1951 from month ago MANUFACTURING (Pa.)......... Durable goods industries..................... Nondurable goods industries............ F oods..................... Tobacco....................... . Textiles.......................... Apparel........................ Lumber................. Furniture................... Paper....................... Printing and publishing................. Chemicals.............. Petroleum and coal products.. . Rubber................ Leather................ Stone, clay and glass.................... Primary metal industries . . Fabricated metal products Machinery (except electrical)............ Electrical machinery............ Transportation equipment................. Instruments and related products. . . Misc. manufacturing industries. . . COAL MINING (3rd F. R. Dist.)*. . Anthracite..................... Bituminous............ CRUDE OIL (3rd F. R. Dist.)** CONSTRUCTION — CONTRACT AWARDS (3rd F. R. Dist)! Residential.......... Nonresidential......... Public works and utilities.... 0 + 1 - 2 4 mos. 1951 year ago year ago + 18 + 26 + 8 + 17 +27 + 26 + 33 - 2 - 1 + 12 - 1 -35 + 3 + 15 + 6 + 2 + 18 +22 +34 + 31 +28 + 47 + 40 + 21 + 18 -21 -23 -14 0 +10 + 16 -54 Indexes (1939 avg. =100) All manufacturing.... Durable goods industries.................. Nondurable goods industries................... + 13 0 - 8 0 0 + 1 + 4 + 1 - 8 + 1 + 1 0 + 1 -j- 2 + 4 + 2 - 3 Pennsylvania Manufacturing Industries* +37 +33 +24 + 27 + 37 + 24 - 3 + 4 + 35 -17 *U.S. Bureau of Mines. **American Petroleum Inst. Bradford field. (Source: 1. W. Dodge Corporation. Changes computed from d-month moving averages, centered on 3rd month. Foods.......................... Tobacco................... Textiles...................... Apparel......................... Lumber...................... Furniture................... Paper........................... Printing and publishing................. Chemicals............... Petroleum and coal products................... Rubber........................ leather.................. Stone, clay and glass ........................ Primary metal industries................... Fabricated metal products................... Machinery (except electrical)................... Electrical machinery................. Transportation equipment................. Instruments and related products. . . Misc. Manufacturing Industries.................. | Em ployment Apr. 1951 (In dex) Average Weekly Earnings Payrolls Per cent change from mo. ago Apr. 1951 (In dex) year ago Per cent change from mo. ago year ago Average Hourly Earnings % chg. from year ago 1951 Apr. 1951 % chg. from year ago +n 142 0 + 13 403 0 + 32 $63.63 + 17 $1,572 170 +i + 20 462 +i + 40 70.04 + 17 1.689 +u 115 -1 + 4 326 -1 + 19 54.39 + 15 1.393 + 9 120 92 83 139 159 130 150 -2 +2 -1 -1 -1 -6 0 + + + + + 4 5 I 3 1 7 8 287 239 247 417 418 376 445 0 -1 -5 -2 +1 -9 0 + 16 + 32 + 16 +24 + 12 - 1 + 25 53.46 34.30 52.95 42.41 45.70 53.35 64.11 + 11 +25 + 15 + 20 + 13 + 6 + 16 1.326 .917 1.382 1.153 1.092 1.255 1.453 + 9 + 8 + 11 + 10 + 9 + 7 + 9 120 154 0 0 + 2 + 13 314 429 0 0 + 9 +26 73.79 66.41 + 7 + 12 1.873 1.571 + 5 + 9 155 245 90 +1 0 -3 + 2 + 27 0 445 696 233 +7 +2 -7 + 18 +41 + 14 86.39 70.40 44.39 + 16 + 11 + 15 2.059 1.733 1.206 + 12 + 8 + 8 147 +2 + 14 414 +2 + 32 64.35 + 15 1.589 + 11 141 0 + 17 391 +1 + 37 77.12 + 17 1.895 + 12 187 +1 + 26 521 0 +51 66.14 +20 1.581 + 13 + 11 243 +1 + 20 685 +2 +43 71.56 + 19 1.637 271 0 + 22 633 +3 + 43 65.25 + 17 1.574 + 10 162 +5 +43 428 +4 + 59 75.16 + 11 1.868 + 8 186 +2 + 31 547 +2 + 58 67.01 + 20 1.607 + 13 149 -2 +20 384 -4 + 32 52.96 + 10 1.266 + 9 ♦Production workers only. TRADE Per cent change Third F. R. District Indexes: 1935-39 Avg. =100 Adjusted for seasonal variation SALES Department stores.............. Women’s apparel stores.. . Furniture stores............ .. . STOCKS Department stores............ Furniture stores.......... . Apr. 1951 Apr. 1951 from (Index) month year ago ago 286 234 331r 261 + 1 + 16 + 3* + 2 - 2 _ j* + 3 - 3 - 2 + 33 + 20 + 32* Recent Changes in Department Store Sales in Central Philadelphia Week Week Week Week ended ended ended ended May 5, 1951 May 12, 1951 . . May 19, 1951 May 26, 1951. . * Not adjusted for seasonal variation. Sales 4 mos. 1951 from year ago + 13 + 5 + 13* Per cent change from year ago +2 -1 +5 +2 Departmental Sales and Stocks of Independent Department Stores Third F. R. District % chg. % Chg. April 4 mos. 1951 1951 from from year year ago ago Stocks (end of month) % chg. April 1951 from year ago 1951 1950 Ratio to sales (months’ April Total — All departments.................... - 6 + 9 + 34 4.2 3.0 Main store total..................................... Piece goods and household textiles Small wares............................................ Women’s and misses’ accessories.. Women’s and misses’ apparel......... Men’s and boys’ wear........................ Housefurnishings................................. Other main store.................................. - 5 + 12 - 4 -17 - 4 -15 + 7 —16 + 10 + 20 + 2 + 7 + 9 + 10 + 15 + 4 + 34 +35 + 17 + 20 + 17 + 30 +51 + 57 4.6 5.4 5.0 3.9 2.4 6.2 5.7 5.3 3.3 4.5 4.1 2.7 1.9 4.1 4.0 2.9 Basement store total............................ Domestics and blankets................... Small wares............................................ Women’s and misses’ wear.............. Men’s and boys’ wear........................ Housefurnishings................................. Shoes........................................................... - 8 +ii -32 -12 -10 + 15 -12 + 5 + 21 - 9 + 3 + 8 + 2 + 11 +35 + 99 + 17 + 13 + 42 + 53 + 23 2.7 5.2 2.6 1.7 3.5 3.7 3.5 1.8 2.9 1.5 1.3 2.2 2.8 2.5 - 4 + 5 Nonmerchandise total.......................... p-preliminary. Page 11 THE BUSINESS REVIEW BANKING CONSUMER CREDIT Receiv ables (end of month) Sales MONEY SUPPLY AND RELATED ITEMS United States (Billions $) April 25 1951 Changes in— four weeks year 173.3 - 8 -20 Furniture stores + 5 + 46 + 9 + 14 + 32 + 17 22.5* Loans made Loan Credit Third F. R. District 0 + 10 + o + 5 - 4 + 8 + 13 + 11 •. ■ n + 14.8* - .4 + 5.1 54.3 . j ................ » - .1 - .3 0 + 10.6 - 7.1 + L6 + .2 + 3.3 - .1 + .3 + 3.3 0 + 8 Loan bal ances out standing (end of month) % chg. % chg. % chg. April April 4 mos. 1951 1951 1951 from from from year ago yearago yearago Consumer instalment loans r i + 1.8* 12.6 + 18 + 5 + 5.2 - .2 0 125.4 + 6 + 17 - 1 + .5 + -1 + .2 18.5 .7 Department stores + 5.0 19.2 Third F. R. District + -8 89.5 59.2 24.6 % chg- % chg. April 4 mos. 1951 1951 1951 from from from yearago yearago yearago Xs ______ Changes in reserves during 4 weeks ended April 25 reflected the following: Effect on (Billions $) reserves Increase in Reserve Bank holdings of Governments.. . Decrease in loans to member banks................................. + .4 + .3 -.3 -.2 + .2 - 1 + 9 + 10 +23 * Annual rate for the month and per cent changes fr orn inon h and year ago at leading cities outside N. Y. City. PRICES Changes in— OTHER BANKING DATA 1951 Per cent change from April Index: 1935-39 average-100 (Index) month ago 228 267 235 212 0 _1 0 0 0 0 0 +1 + 10 + 12 + 14 + 13 153 225 171 -1 0 0 . + 20 + 27 + 19 + 17 185 185 219 204 Consumer prices year ago Weekly reporting banks—leading cities United States (billions $): Loans— . + 19 + s + 5.8 - .3 + .9 + .1 + 1.2 + -l - .5 -1.1 + 7.7 - 5.1 + 3.9 755 51 140 7 389 + 5 - 5 + i 0 + i + 256 + 4 + 27 - 3 + 64 1,342 Third Federal Reserve District (millions $): Loans— . 0 0 0 + .i 0 33.0 36.9 78.8 + 13 Member bank reserves and related items United States (billions $): Week ended June 5..................................... Source: U.S. Bureau of Labor Statistics. Page 12 All com modi ties Farm prod ucts Foods Other 227 226 226 226 226 261 259 261 263 260 239 237 237 238 237 211 ?11 211 210 210 year 19.1 2.0 5.5 .5 5.9 + 2 + 2 + 2 + 348 -292 + 112 + + + + 2.7 + 5.1 - 2.5 + -3 + .3 — Weekly Wholesale Prices—U.S. (Index: 1935-39 average =100) four weeks Federal Reserve Bank of Phila. (millions t): 18.6 22.4 21.8 27.3 .8 1,424 .6 .5 .1 .1 .1 - 30 - 16 863 + 35 1,224 46.1% + 1.0% + 268 + 30 + 103 -107 - 7.7%
@FedFRASER