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Business Conditions

in

the Philadelphia. Federal
Reserve District
federal

reserve

bank

OF PHI LADELPHI A

June 3, 1918

T

HE industries of the district are adjusting themselves to
meet the war requirements of the Nation, the output in many
lines being almost entirely devoted to filling Government

orders.

The concentration of all the energies of the business life

on the problems of the war is gradually resulting in a more smoothly
running machinery of production.

The district is singularly fortu­

nate in being able to render services of inestimable value to the
country in these times of emergency because of the central position
which it occupies with reference to supplies and materials of all
kinds.
Retail trade is reported to be about 40 per cent ahead of last
year in volume of business, wage-earners on account of their very
large earnings being large consumers of goods.

Seasonable lines

are particularly in good demand.
Manufacturers, as a rule, are extremely busy, but considerable
embarrassment is being caused by the scarcity of many kinds of
raw materials and the inadequate supply of competent labor.




Shipments of anthracite coal over the 9 principal anthracite
carrying railroads amounted to 6,368,372 tons during April
according to estimates of the Anthracite Bureau of Information.
This compares to 7,276,777 tons in March, which was the record
month in the history of the anthracite industry, and 5,592,209 tons
in April, 1917. While large quantities of coal continue to arrive,
dealers are unable to accumulate reserve supplies because of the
continuing strong demand. People are trying to secure a sufficient
stock of coal in their bins so as to preclude the possibility of a coal
shortage next winter. In order to conserve the supply of anthra­
cite coal for those who need it most, the Fuel Administration has
ordered that 24 western and southern states shall not receive
anthracite shipments except by special permits.
C oal

Bituminous coal production is steadily increasing, due to a
better supply of cars and more favorable operating conditions.
Labor difficulties are still strongly in evidence as men are attracted
elsewhere or drafted. Estimates of the United States Geological
Survey, of the production of bituminous coal since the beginning
of the year, are as follows:
BITUM INOUS COAL PRODUCTION
W eek
ending
J a n u a ry

January
January
January
February
t ebruary
February
February
March
March

Tons per
working day

5 ...........
1 2 ...........
1 9 ...........
2 6 ...........
2 ...........
9 ...........
1 6 ...........
2 3 ...........
2 ...........
9 ...........

____
____
____
____
____
____
____
____
____
____

1,8 75,000
1,7 35,0 00
1,428,000
1,683,000
1,580,000
1,685,000
1,854,000
1,840,000
1,852,0 00
1,878,000

W eek
ending

March
March
March
April
April
April
April
May
May

Tons per
working day

1 6 ........... .............
2 3 ........... .............
3 0 ........... .............
6 ........... .............
1 3 ........... .............
2 0 ........... .............
2 7 ........... .............
4 ........... .............
1 1 ..........................

1,820,000
1,833,000
1,816,0 00
1,853,0 00
1,811,000
1,840,0 00
1,967,000
1,927,000
1,968,0 00

The decline in raw cotton prices of late does not seem
to have been a determining factor in computing the prices
of manufactured cotton goods, as prices are still very high and are
governed mainly by supply and demand. Trading in cotton goods
has been rather quiet in contrast with the excited dealing
which existed a short time ago. The Government has entered the
market with very large orders, 70,000,000 yards of denim for over­
all manufacture alone having been ordered lately. This huge Gov­
ernment demand has displaced civilian orders completely in many
lines and it will be some time before any large amount of goods of
certain kinds can go to civilian consumers. Print cloths are not in
as great demand and there has been some lowering in prices.
Bleached goods are very scarce and it is almost impossible to secure
any without a Government order.
C otton




Reports of the United States Department of Agriculture
for May 1 show an estimated winter wheat and rye produc­
tion considerably in excess of the past few years. The economizing
in the consumption of wheat has resulted in a much greater con­
sumption of the smaller grains. Wheat flour is very scarce, but
the substitutes are plentiful and it is stated that there is a consider­
able surplus of corn meal.

Food

The sugar situation is easing up a little, but the approaching
canning season will result in a stronger demand. However, the
National Food Administration is limiting the use of sugar by manu­
facturers of nonessential products to 80 per cent of their 1917
requirements, except in certain special instances where the amount
used is negligible.
The canned goods situation is still very considerably tangled.
Canners will not quote prices, only in exceptional cases, because
of their inability to estimate the increased costs of canning. Buyers
are holding off until prices are quoted. Government regulations are
preventing speculation. While the canners and jobbers are being
held down to reasonable prices, the growers are asking high figures.
The Government is having from 15 to 25 per cent of the pack of
various commodities reserved for its needs.
Collections in the wholesale grocery business are only fair.
This is explained by the great increase in the amount of capital
required to carry an adequate stock, according to a leading whole­
saler.
The holdings of the various meat and dairy prod­
ucts in the main compare very favorably with the
holdings a year ago, with the exception of lamb, mutton and poul­
try. The estimates of the Bureau of Markets of the United States
Department of Agriculture are given below:

F o o d stora g e

COM PARISON OF COLD STORAGE HOLDINGS
Commodity
Frozen beef ..........................
Cured b e e f .............................
Frozen lamb and mutton. .
Frozen pork ...........................
Dry salt p o r k ........................
Sweet pickled p ork .............
Lard ..........................................
Total frozen p o u ltr y ...........
Cold storage eggs................
Frozen eggs ...........................
Creamery butter ................
Packing stock butter...........
American cheese ............. .
*Cases




HOLDINGS IN POUNDS

May 1. 1917

1 18,391 ,00 0
2 9 ,4 0 8 ,0 0 0
4 ,3 6 8 ,0 0 0
7 6 ,0 9 1 ,0 0 0
2 1 9 ,8 1 8 ,0 0 0
3 7 7 ,2 8 0 ,0 0 0
6 1 ,6 4 0 ,0 0 0
4 2 ,3 1 6 ,0 0 0
2 ,0 8 2 ,0 0 0 *
3 ,3 2 8 ,0 0 0
3 ,6 0 7 ,0 0 0
173,000
7 ,9 2 7 ,0 0 0

May I, 1918

Per cent increase

2 0 6 ,4 0 0 ,0 0 0
2 9 ,4 0 9 ,0 0 0
3 ,6 6 3 ,0 0 0
1 2 5 ,1 3 4 ,0 0 0
4 5 5 ,9 0 8 ,0 0 0
3 9 4 ,7 5 3 ,0 0 0
9 7 ,7 1 6 ,0 0 0
1 4 ,295 ,00 0
2 ,9 1 5 ,0 0 0 *
8 ,8 4 7 ,0 0 0
10 ,100 ,00 0
1,229,0 00
19 ,839 ,00 0

or decrease
74
+
+ 0 .0 0 4
—
16
64
+
107
+
5
+
58
+
66
a~
40
166
180
+
610
+
150
+

Iron and steel The iron and steel industry is operating at
greater capacity. It is stated that the general
average of pig iron production is now around 95 per cent of capacity,
while in the case of the subsidiaries of the largest corporation manu­
facturing iron and steel it has been estimated that 95 per cent
of capacity would not represent an excessive figure. The daily aver­
age production of coke and anthracite pig iron during April was
109,607 tons, which represents an increase of approximately 6 per
cent over March, 1918, and a slight decrease as compared to April,
1917. On May 1, production was estimated at 113,440 tons per day.
The output of steel ingots during April totalled 3,163,410 tons, com­
pared with 3,110,381 tons in March.
The Government requirements have resulted in an appreciable
tightening in the supply of pig iron and steel which civilian con­
sumers are getting. Control of the situation is passing more and
more into the hands of the Government. Steel manufacturers in
this district have pledged 100 per cent of their capacity to the Gov­
ernment until further notification. This, it is hoped, will bring
about such an improvement in the general situation that it will be
possible to devote further capacity to non-war business at a later
date. Meanwhile the Government has announced its intention to
co-operate with two of the largest steel companies in the erection
of large ordnance factories. This will cause a large demand for
structural steel and other equipment. The large orders for cars
and locomotives which have just been placed will also tend to inten­
sify the demand for iron and steel in all their forms.
Deliveries of coke have shown some improvement and the
bettering of the transportation situation has enabled a large amount
of manufactured products which were held up to be delivered and
make room for further production. The situation in general is
showing a very great advance over the stringent days of the winter
months, but efforts must continue in order to insure an increasing
supply of coke to take care of increasing demands.

Leather After due deliberation with cattle raisers, importers,
packers, etc., prices have been fixed by the Government
for all kinds of domestic and foreign hides and skins. Dealers in
leather are expecting the promulgation of a price-fixing schedule
for their commodity within a short time and it is thought that this
may render the cost of civilian footwear more equitable.
The demand for leather has been gaining momentum of late.
Jobbers and retailers of boots and shoes are beginning to realize that




they had better order early from the manufacturer if they desire to
get their goods in the proper season. The demand for spring foot­
wear was not as heavy as was anticipated, but the Government
demands have been so pressing that there is never a lack of business
in the shoe market.
Various organizations of leather-producers have in contempla­
tion a merging of the individual organizations into one large body
so that they may be better able to serve the country at this time
and meet the competition which is expected after the war.

The raw silk market does not show much change
from week to week. Buying is rather slow and
much difficulty is experienced in interpreting the situation, though
in some quarters a fall in prices is expected.
Silk g o o d s

On the other hand the manufacturers of silk have been display­
ing great activity. Buyers are trying to get their goods de­
livered on time but this is often impossible as the mills are behind
schedule. There is a strong demand for seasonable goods and prices
have risen. The mills are rather cautious about taking orders for
delivery very far in the future as changes affecting the markets of
supply and demand take place with disconcerting rapidity.
The general purchasing public does not seem to heed
the increased prices of textile products as much as might
have been expected. They want good materials and are willing to
pay for them. Demand is very strong both from the civilian users
and the Government, but in many lines the Government demands
have represented such a large proportion of the possible output that
other buyers have been somewhat neglected.
T ex tile s

Materials are very expensive, not only because of the high cost
of the raw products necessary to their manufacture, but also be­
cause of the inability to secure sufficient labor to keep all the
machinery in operation.
The railroad situation is showing improvement
as the season advances. The figures for the
movement of cars on the Pennsylvania Railroad past Lewistown
Junction show a total of 188,000 cars east and west during April,
compared with 176,000 cars in March, and 185,000 in April, 1917.
The necessity for equipment of all kinds is very urgent as the greatly
increased demand for transportation facilities cannot be met by the
T ransportation




means now at the disposal of the Railroad Administration. In an
attempt to partially satisfy this need, orders have been placed by
the Government for 1,025 locomotives and 95,654 cars of various
types, deliveries of which are to begin in July. The benefit to be
derived from these increases in equipment will no doubt be con­
siderable.
The Philadelphia-Baltimore-Pittsburgh Conference Committee
of the Eastern Railroads, which is a branch of the National Railroad
Administration, has issued an order, which became effective May
15, to the effect that all carload shipments of freight into Philadel­
phia and Baltimore must be accompanied by a permit which is to
be secured by the consignee. This ruling is expected to be in effect
for the duration of the war, and it is intended to relieve congestion
around these seaports and guard against the wasteful misuse of
railroad facilities through the forwarding of freight in excess of the
consignee’s needs or his ability to unload.
Motor trucks have been coming more and more into use as the
congestion has increased around the principal ports and industrial
centers of this district. Shipments by motor trucks between cities
are being made on regular schedules maintained by numerous com­
panies operating trucks. The Philadelphia Chamber of Commerce
has instituted a “ Return Loads Bureau” to bring shippers and truck
operators together and avoid inefficiency due to return trips made
without any load or a load below capacity of the truck. While
shipments by truck are more costly in the majority of cases, the
advantages of certainty and rapidity of transportation more than
offset that disadvantage in the case of the lighter and more valuable
commodities.

W ool The Government is now taking more complete control of
the woolen industry. Prices are usually given as of July
30, 1917. All stocks of wool in the dealers’ hands have been listed
with the W ool Administrator at Boston. Valuation committees
in the various markets are examining wools and fixing prices for
those qualities title to which the Government wishes to take over
promptly, in order to accelerate the manufacture of uniform fabrics.
Deliveries of spot wools when taken over are being made to ap­
proved mills by the W ool Distributor, and the wants of those mills
having Government contracts supplied with Government-owned
wools. The Government has taken over the new clip and shipments
are being made to preferred dealers.




A. firm money market prevailed during the past month,
6 per cent being asked on both call and time loans. Com­
mercial paper ranged from 5^4 to 6 per cent, with but little paper
selling under the higher rate.

M on ey

While loan and investment operations of the Federal Reserve
Bank averaged about $2,000,000 per day during April, and more
than $2,500,000 during the first three weeks of May, borrowings by
member banks have not been as heavy as had been anticipated, and
it is apparent that the Third Liberty Loan has been floated thus
far without any undue strain on the money market. The bulk of
the discounting has been in the form of notes secured by Govern­
ment obligations. Such loans amounted to $35,100,000 in April,
compared with $21,100,000 in March and $40,500,000 from May 1
to May 21, inclusive.

Loan and investment operations of the Federal Reserve Bank, and earnings from
investments, are given in the following table :

January

February

March

April

First Fou Months
1918

Discounts of eligible
paper or member
banks’ collateral notes
secured by eligible
paper...................... $28,236,402 11,185,312 17,977.768 11,903,817 69,303,299
Discounts secured by
Government obliga­
tions ........................
Acceptances purchased

16,907,280 26,262.056 21,119,160 35,102,271

10,000

Government obliga­
tions purchased . . .

843,750

Total— 1917 . . . .

1917 . . .




99,390,767

10,000
451,000

1,336,000 3,334,000

1,422,767

5,964,750

4,598,300

$51,165,269 47,069,568 53,562,290 61,161,414 212,958,541
3,940,771 11, 766,311 12,220,424 7,780,935
January

Earnings from invest­
ments: 1918 . . .

7,642,058

5,167,837 9,171,200 13,129,362 10,821,326 38,289,725 22,045,316

Municipal
w
arrants
purchased..............

Total— 1918 . . . .

1917

$181,212
36,868

February

March

April

—
Total

158,443

194,086

212,440

746,181

42,145

43,664

46,938

169,583

—
35,708,441

BUSINESS IN DICATORS
Percentage increase or decrease compared with
May 20, 1918
Philadelphia banks:
Loans ...................................
Deposits .............................
Ratio ...................................

Previous month

$ 6 2 4 ,2 7 8 ,0 0 0
6 3 8 ,7 2 4 ,0 0 0
98%

Year ago

+
4
-0 .5
(A ctu al)

93%

+
(A ctu al)

12
2
85%

Federal Reserve Bank:
Discounts and collateral
loans .............................
Cash reserve.....................
90-day discount rate. . .
Commercial paper................

3 7 ,7 8 7 ,0 0 0
72%
4 y4%
6%

+ 324

+ 47.
2
(A ctu al) 4 2 4 %

(A ctu al)

4%

(A ctual)

(A ctu al)

5%

6%

+

2

Percentage increase or decrease compared with

April, 1918

Previous month

Year ago

Bank clearings:
In Philadelphia................
Elsewhere in district. . .

$ 1 ,5 7 9 ,8 2 5 ,0 0 0
1 2 0 ,7 7 7 ,0 0 0

44-

n
19

+
+

12
19

Total ..............................

$ 1 ,7 0 0 ,6 0 2 ,0 0 0

+

11

+

13

$ 3 9 ,9 6 2 ,4 5 6
13 ,086 ,63 0

4- 21
4- 30

+

18

$ 2 ,3 8 1 ,0 7 5

4 -1 2 0

-

53

$846,082

457

39

(A ctu al) 63

Port of Philadelphia:
E x p o r t s ................................
Im p o r ts ................................
Building permits — Philadelphia ..........................
Post-Office r e c e i p t a—
Philadelphia .....................
Commercial failures in district (per Bradstreet’ s) .

+ 0 .2

— 18
(A ctu al)

56

Commodity prices:
Bradstreet’ s .......................

$1 8 .9 1 3 3

4-

3

Compiled May 22. 1918
The purpose of this report is to provide member banks and the
business community in general with a brief monthly review of prevailing
business conditions in this particular Federal reserve district.




+ 25