The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
THE BUSINESS REVIEW ’'■Vf RESERVE DISTRICT^ THIRD FEDERAL PHILADELPHIA MARCH i, 1938 FEDERAL RESERVE BANK OF PHILADELPHIA % '■W Business and Banking Conditions in the United States The decline in business activity, which had been rapid during the last quarter of 1937, continued in January but at a slower rate. Production. Volume of industrial pro duction, as measured by the Board’s seasonally adjusted index, was at 81 per cent of the 1923-1925 average in January as compared with 84 per cent in December. Output of durable goods continued to decline, reflecting chiefly considerable decreases in pro duction of atuomobiles and plate glass and a further decline in output of lumber. Steel ingot production in creased somewhat, the output for Jan uary averaging 30 per cent of capac ity. In the first three weeks of Feb ruary, activity at steel mills showed little change at about 31 per cent of capacity, while production of automo biles was at a lower rate than in Jan uary. In the textile industries, activity at silk and rayon mills in January showed a sharp rise from the low levels reached in December. At cotton mills, however, there was less than the usual seasonal increase and output of woolen products continued in small volume. Shoe production, which also had been at a low rate in December, increased considerably in January,'and activity at meat packing establishments rose somewhat further. Output of tobacco products remained at a high level, while sugar meltings declined. At mines, bituminous coal production was considerably smaller than in Decem ber, and there was also a reduction in output of nonferrous metals. Pe troleum production continued at the high level of other recent months. Value of construction contracts awarded in January was smaller than in December and somewhat below the level maintained during the last four months of 1937, according to figures of the I1'. W. Dodge Corporation. Con tracts awarded for public projects in creased somewhat further, while awards for private work continued to decline, reflecting a further de crease in residential building and a sharp reduction in awards for factory construction. In the first half of Feb ruary awards for private projects were at about the same rate as in January, while those for public work showed a sharp decline. INDUSTRIAL PRODUCTION Factory employment and payrolls declined substantially further between the middle of Decem ber and the middle of January. In the durable goods industries, decreases in employment were general and were particularly large at factories produc ing automobiles, steel, and machinery. Employment in non-durable goods in dustries showed a somewhat smaller decline than in previous months. There was some increase in the number em ployed at shoe factories and little change in the food industries as a Employment. MEMBER BANKS IN 101 LEADING CITIES MLUOKS Of DOLLARS WLUOW OfDOLLARS s GOVT OBLIGATIONS COMMERCIAL LOA OTHER SECURITIES LOANS TO BROKERS AND DEALERS ’34 1935 1936 1937 1938 Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934 to Feb ruary JL6, 1938. Commercial loans, which in clude industrial and agricultural loans, repre sent prior to May 19, 1937 so-called “Other loans” as then reported. FACTORY EMPLOYMENT AND PAYROLLS WHOLESALE PRICES Aal EM RIOYMENT/-'*' r\ LA “V f PAYROLL Ay/ 1 'd i 1934 Index of physical volume of production, ad justed for seasonal variation. By months, January 1934 to January 1938. 1935 1936 1937 Indexes of number employed and payrolls, without adjustment for seasonal variation. By months, January 1934 to January 1938. Indexes compiled by the United States Bureau of Labor Statistics. Index compiled by the United States Bureau of Labor Statistics. By weeks, 1934 to week ending February 12, 1938. Page One group. But in other non-durable goods industries employment continued to decrease. Employment on the rail roads, in mining, and in the construc tion industry also declined. Distribution. Department store sales showed a seasonal decrease from De cember to January, while sales at va riety stores and mail order sales de clined by more than the usual seasonal amount. Freight-car loadings continued to decline in January, reflecting princi pally a reduction in shipments of coal. Commodity prices. Prices of steel scrap and non-ferrous metals declined from the middle of January to the third week of February, following some advance in December and the early part of January. There were further decreases in some other basic commodities, while prices of cotton and silk advanced. Livestock prod ucts continued downward and a num ber of finished industrial products de clined further. Prices of pig iron and most finished steel products have been reaffirmed for second quarter delivery. Bank credit. During the first three weeks of February excess reserves of member banks were little changed from the level of $1,400,000,000 reached at the end of January following the post holiday return of currency from circu lation. During January there were substan tial reductions in commercial loans and brokers’ loans and moderate in creases in investments at reporting member banks in 101 leading cities. In the first three weeks of February loans and investments of these banks showed little change. Money rates. Rates on Treasury bills and yields on Treasury notes and bonds continued in February at the low levels reached in the latter part of January. Business and Banking Conditions in the Philadelphia Federal Reserve District Business conditions in the Philadel phia Federal Reserve District failed to show improvement in the first month of the year but lately they have re flected some upturn in the market for consumer’s goods. The rate of indus trial recession in durable goods also has been less rapid than in the closing months of last year. The adjusted in dex of industrial production in Jan uary declined to 69 from 76 in the previous month and was the lowest since 1934. The value of building contracts awarded in December declined further by a larger amount than usual and was the lowest in the past two years. Income of farmers from dairy prod ucts continues fairly steady but that from the sale of farm products has been affected adversely by the con tinued decline in prices. Retail trade sales in January de clined more than seasonally and were noticeably smaller than a year ago. In February a further decline is indi cated by preliminary figures. Inven tories of merchandise have shown a substantial reduction since last fall, so that at the end of January they were close to the volume held at the same time last year. Business at wholesale also has continued smaller than last year. Sales of new passenger automobiles declined sharply in the month and as compared with a year ago. Life insurance sales, on the other hand, decreased much less than usual from December to January but were smaller in the year. Freight car load ings generally declined. Industrial employment and payrolls showed additional decreases from De cember to January and were substan tially smaller than a year ago. Pre liminary returns from manufacturing industries indicate that in February there were further decreases in cer tain durable goods industries but no ticeable increases in factories produc ing non-durable goods. INDUSTRIAL AND TRADE ACTIVITY Manufacturing. Manufacturing activ ity in this district has slackened fur ther since the turn of the year, although lately the recession has mod erated considerably and become less widespread than in the closing months of 1937. This has been especially true in the case of industries making con sumers’ goods, including textiles, leather goods and shoes. Current reports indicate that the market for factory products on the whole continues quiet and in a number of durable goods lines sales have de clined further and are much smaller than they were a year ago. The de mand for non-durable goods, on the other hand, shows signs of improve ment. As in several past months the greatest decreases have occurred at plants turning out iron and steel prod ucts, such as machinery and tools, castings, and virtually all building ma terials. The volume of unfilled orders about the middle of February was smaller than a month earlier and less WORKING HOURS AND HOURLY EARNINGS PHILADELPHIA FEDERAL RESERVE DISTRICT PENNSYLVANIA FACTORIES PERCENT CENTS HOURS PRODUCTION EARNINGS PER HOUR (avc.) RETAIL TRADE SALES VALUE OF BUILDING CONTRACTS HOURS WORKED ADJUSTED TOR StASONAL VARIATION 1932 http://fraser.stlouisfed.org/ Page Two Federal Reserve Bank of St. Louis 1934 1935 1936 1937 1938 1933 1934 1935 1936 1937 1938 than a year ago. Inventories of fin ished goods, especially at textile plants, have declined in recent weeks and supplies of raw materials at plants quite generally show marked reduc tions this year and as compared with a year ago. Prices quoted by local manufacturers for their products have decreased fur ther and in many instances are below the level of a year earlier. In the country, the price index of the Bureau of Labor Statistics for commodities other than farm products and foods showed a pronounced downward trend in the fourth quarter of last year but subsequently fluctuated rather nar rowly. On February 19 this index was 83.0 per cent of the 1926 average as compared with 83.7 four weeks earlier, 83.6 on January 1 and 84.2 a year ago. The number of workers employed in manufacturing industries in this dis trict decreased 6 per cent and their compensation declined 11 per cent from the middle of December to the middle of January. Preliminary data cover ing the payroll period nearest the mid dle of February show a small decline in employment and little change in wage payments. The decline was due to sluggish activity in durable goods industries. Factories producing non durable goods, including textiles and shoes, show marked increases in em ployment, payrolls and working time. In all industries of this district, nearly 14 per cent fewer workers were em ployed in January this year than last and wage disbursements were about 25 per cent less. In Pennsylvania factories the pre liminary index of employment for Jan uary was about 76, relative to the 1923-25 average, and that of payrolls was 65. In both instances these in dexes were the lowest in any month since 1935. Working time, as meas ured by total employee-hours, has de creased continuously since August and in January was 36 per cent less than in the same month last year. Factory employment and wage pay ments in Delaware declined 5 and 9 per cent respectively from December to January. Compared with a year earlier, 14 per cent fewer workers were employed and an equally large decrease occurred in wage disbursements. Man ufacturing plants in southern New Jer sey likewise reported marked reces sions in employment and payrolls during January. Output of manufactures decreased sharply in January, continuing a 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 Jan. be typical. 1937 Not adjusted Per cent change Nov. Dec. Jan. 1937 1937 1938 Jan.1938 from Jan. 1937 Nov. 1937 Dec. 1937 Jan. 1938 93 92 81 78 r 74 70 69p 64p Month Year ago ago Industrial production.... Manufacturing—total............... Durable goods....................... Consumers’ goods.................. Metal products...................... Textile products.................... Transportation equipment. Food products........................ Tobacco and products......... Building materials................. Chemicals and products.... Leather and products........... Paper and printing............... Coal mining................................. Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output..................................... Sales, total!............................ Sales to industries!............... 79 76 94 69p 94 r i 76 72 65p 88 76 r 68 58p 98r 75 73 67p 104 72 81 62 99 r 59 57 47p 82 93 85 76 78 77 79 75p 101 95 86 90 42 38 34 r 25 130r 125 120 116p 135 96 r 96 103p 92 90 91 86 68 58 65 65p 56 67p 65 69 76 61 56 49 496 520 531 522 -14 - 8 -15 -17 -11 - 5 + 5 -28 - 3 + 8 - 5 - 4 - 3 -14 - 2 -27 -31 -34 -31 -41 -53 - 8 - 5 -11 -42 -11 -23 - 6 + 12 +20 -35 + 5 101 102r 82 76 84 37 127 140 92 64 61 86 476 81 62 90 77 113 38 126 92 r 90 67 67 68 505 69 56 87 76 63 31r 119 91 92 67 68 59 499 59 48p 76 74p 75 21 113p 107p 86 70p 72p 56 502 236 234 185 - 3 - 1 - 2 - 6 - 5 -18 250 241 180 242 238 168 244 232 148 235 229 148 - 7* -11* -13* -14* -27* -36* 88 89 91 86 83 75 81 74 66 76 65 58 -10* -17* — 11* 119 — 23* 167 121 165r 118 155 106 129 + 3 -16 -12 +25 +27 4- 3 -26 - 3 -51 +56 -18 -38 -10 -41 59 38 80 73 22 61 367 61 28 92 85 8 57 409 53 20 82 87 9 51 343 - 2 +1 +1 _ 4 +10 — 48* + 13* — 1* - 2 + 0 — 5 - 9 - 0 -17 - 6 -16 92 91 101 80 101 101 125 146 61 61 68 129 74 97 69 85 102 108 136 52 49 64 58p 70p 77 69 79 54 121p 134p 50 49 61 118 39 233 231 164 228 225 155 222 222 153 - 9 -10 Employment and wages— Pa. Factory—Wage earners......... Payrolls................................. Man-hours (1927-28= 100) General (1932=100) Employment........................ Payrolls................................. Building and real estate Contracts awardedf—total........... Residential!.................................. Non-reside ntialj.......................... Public works and utilities!.... Permits for building—17 cities. . . Real estate deeds—Philadelphia!. Writs for Sheriff sales—Phila. . . . 66 71 51 57 112 24 53 504 59 37 75 65 23 62 328 30 102 73 12 47 401 84 79 104 76 106 79 80 88 77 96 78 78 86 74 81 76p 79p 87 71 89 84 82 75 60 61 62 58 56 61 57 56 57 69 25 90 91 15 48 298 55 40 52 106 14 57 580 Distribution Retail trade —sales................... stocks................ Wholesale trade—sales................... stocks................ Life insurance sales.......................... New passenger auto, registrations Hotels—Occupancy.. . (1934= 100) Income, total (1934= 100) Freight car loadings—total........... Merchandise and miscellaneous Coal................................................. 64 r 70 r 89 74 94 98 — 0* 121 + 3* 130 -33 72 -31 71 -24 81 Business liquidations Number............................. Amount of liabilities.... +62* + 3* + 11* 62 35 39 16 73 38 Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ 95 80 85 81 - 4 -14 97 86 92 83 28 33 28 29 + 2 + 3 33 34 28 34 * 86 + 0* 5* 91 87 83 85 88 82 83 76 83 84 84 83 77 82 73 80 84 83 84 77 81 72 76 83 80 82 75 Prices—United States Wholesale (1926 = 100). Farm products............... Foods......... ....'............. Other commodities. ... — _ — - Retail Food....................... Philadelphia..................... Scranton............................ (In millions of dollars) Jan. 1937 Oct. 1937 1* 2* 4* 0* 3* 3* 2* 6 - 8* % change from Nov. 1937 Dec. 1937 Jan. 1938 Month ago Year ago Banking and credit Federal Reserve Bank Bills discounted............................ $ 0.5 Other bills and securities........... 200 Member bank reserves............... 387 Reserve ratio (per cent)............. 75.0 Reporting member banks Loans................................................ S 451 Investments................................... 741 Deposits (a)................................... 1,483 Bankers’ acceptances outstanding 13.8 $ 2.1 217 365 72.5 * 2.6 219 361 72.3 $ 2.9 221 355 71.7 $ 2.4 216 380 72.7 -17 - 2 + 7 +1 +380 + 8 - 2 - 3 S 469 681 1,374 15.8 $ 464 677 1,353 16.1 $ 460 662 1,336 15.4 $ 456 656 1,362 12.9 - 1 - 1 + 2 -16 + i - 11 - 8 - 7 * Computed from data unadjusted for seasonal variation, t Not included in production index. J 3-month moving daily average centered at 3rd month. p—Preliminary. r—Revised, (a) Less cash items in process of collection. Page Three TEXTILE FIBERS METAL PRICES Mil LIONS or LBS PERCENT UNITED STATES 450 COTTON 400 A \ T 250 = 40 COPPER V 67 5 4 A 1937 Px\ r \ SILK H Ap v\ ZJ r 1935 .075 — ssJ VI.WAv 19 3 8 .100 f 050 3 1936 .125 WOOL WOOL Sr 20 1935 A A V /A 30 FINISHED STEEL j a 300 STEEL SCRAP COTTON ■ K J 350 0 OLLARS PER LB. .150 PRIC ES MILL TAKINGS 1936 1937 1938 .00 . .60 SILK 2.00 r V 4 fV v7 V 1935 1936 1.00 \ 1.75 1.50 . 125 1937 1938 Source: Iron <ge marked downward trend since August, and was the smallest for the month since 1934. This bank’s seasonally ad justed index of productive activity re ceded to 65 per cent of the 1923-25 average as compared with 72 in De cember, 76 in November and nearly 94 in January, 1937. As in months immediately preced ing, the decline during January in the output of consumers’ goods, though sharp, was neither so widespread nor so drastic as that at plants making durable goods. Production of non durable goods such as leather, shoes, cigars and petroleum products was larger than in December. Activity at meat packing establishments also was at a higher rate in January than in the previous month. In the case of durable goods, an outstanding excep tion to the general recession was the increase in the output of pig iron. Production of motor vehicles also ex panded substantially. Electric power output by eight cen tral stations showed a decline from December to January that was larger than seasonal, continuing a downward trend for about six months. Total sales for all purposes fell off slightly. The rate of consumption of electrical energy by industries was virtually un changed, although a small increase is usual; compared with a year ago, in dustrial consumption was 18 per cent smaller. Coal and other fuels. Reflecting the prevalence of relatively mild weather, demand for anthracite declined. ' There was an increase in output from Decem ber to January, but this fell somewhat short of the volume usually to be ex pected. Compared with a year ago, however, production increased 20 per cent. Shipments also increased con Page Four siderably in January and were 18 per cent greater than a year ago. Producers report little activity in the market for bituminous coal, with further decreases in sales to industries, railroads and utilities. Continuing the decline which occurred in the last quarter of 1937, colliery output de creased 6 per cent from December to January, although an increase is usual in that month. Production was the smallest since the autumn of 1935 and was 35 per cent less than a year earlier. Shipments also declined, reflecting re duced industrial consumption and ade quate supplies of coal for current needs. Per cent change from January (Output and shipment figures are daily averages) 1938 Month Year ago ago Anthracite Production............... tons Shipments.................tons Stocks.............. 1000 tons Prices.......... (1926 = 100) Employment............. No. Bituminous Production............... tons Shipments.........No. cars Prices.......... (1926= 100) Employment............. No. Coke Prod. ...(1923-25=100) Prices.......... (1926=100) Gas and fuel oil Prod.. . .(1923-25=100) Prices.......... (1926=100) 191,600 192,240 2,154t 80.1 94,926 + 6 +13 -10 + 0 - 3 +20 +18 - 5 - 2 - 9 265,200 22,092 103.2 122,355 - 6 -13 + 2 - 1 -35 -27 + 7 -10 82.3 105.5 - 2 0 155.8* 76.1 +1 0 Building. The value of building con tracts awarded in January amounted to approximately $10,000,000, a decline of 26 per cent from December as against the estimated seasonal decrease of 15 per cent. This change was due principally to a sharp drop in awards for public works and utilities, family houses and miscellaneous construction; substantial increases were reported in the case of educational and commer cial buildings. The January total was the smallest for the month since 1935; it showed a decline of 18 per cent from a year ago, despite a much larger volume of contracts let for educational buildings and unclassified structures. The de crease in awards for family dwellings contributed largely to the falling off in the total. Building contracts Philadelphia Federal Reserve District Per cent January change from 1938 (000’s Jan. Dec. omitted) 1937 1937 -37 + 8 $ 1,748 238 1,510 5,648 1,130 Commercial..................... 82 2,544 1,892 -16 + 1 -19 -21 +23 -29 +86 -60 - 64 + 60 - 65 + 26 - 36 - 92 +184 +131 + 3 +10 Total buildings...... $ 7,396 Public works and utilities. 2,675 -20 -38 - 21 - 9 $10,071 -26 - 18 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. f 1st of month. There was a small decline in the out put of by-product coke in eastern Penn sylvania from December to January instead of the usual seasonal increase. Production was the smallest in two and one half years and 37 per cent be low that in January 1937. Production of gas and fuel oils increased slightly in January, according to preliminary figures. Apts, and hotels............. Family houses................. Source: F. W. Dodge Corporation. Wholesale prices of building mate rials have shown an almost continu ous drop since September. The index of the Bureau of Labor Statistics for the week ended February 19 was 91.1 per cent of the 1926 average, about 1 per cent low'er than in the first week of the year and 6 per cent under the high point fo'r recent years reached in May. A year ago the index was FREIGHT CAR LOADINGS SALES OF ELECTRIC POWER ALLEGHENY PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT DISTRICT 1923-25AVG s IOO 192 3-25AVG. *100 250 COAL TOTAL TOTAL 200 / 150 100 r:\, :*-V* * V* *; ♦V*<■ 50 ADJUSTED FO SEASONAL VARIATION 1933 1934 1935 . MERCHANDI 5E AND MISCEL LANE0US TO INDUSTR ES ADJUSTED Ft R SEASONAL VARlATlON 1936 92.8. Lower quotations for brick and tile, lumber, and paint materials were among those which caused the de cline. Distribution, trade and service. The value of retail sales by department, apparel, shoe and credit stores in this district in January was 9 per cent smaller than a year ago. Decreases ranged from 3 per cent at men’s ap parel stores to 21 per cent at credit stores which sell merchandise on the installment plan. Department store sales in the district as a whole were 7 per cent smaller in January this year than last; at Philadelphia stores the decline was 5 per cent and else where it amounted to 9 per cent. Total dollar sales decreased a little more than they usually do from De cember to January, so that the sea sonally adjusted index declined from 78 to 76 per cent of the 1923-25 aver age. In January, 1937, this index was 84. Inventories of merchandise at re tail establishments declined a little less than usual but at the end of the month showed virtually no change as compared with a year earlier. The trend of retail inventories was defi nitely upward in the first three quar ters of 1937, as indicated by a rise in the seasonally adjusted index from 76 in December 1936 to 85 in Septem ber 1937. Subsequently, stocks of goods were reduced almost steadily to 79 in January. The rate of stock turnover was slightly less rapid in January this year than last. Collec tions, in relation to outstanding bal ances, were somewhat higher than a year ago. Business at wholesale, as measured by total dollar sales, was considerably less active in January this year than V\ /. 1937 1938 1933 1934 last. Decreases were substantial in all lines except groceries, which showed a small gain over a year ago. Stocks of goods at the end of the month were about 6 per cent smaller than a year earlier. Total freight car loadings in this section decreased further in January and were nearly one-third smaller than in the same month last year. Ship ments of merchandise and miscellane ous commodities showed about the cus tomary rate of change as compared with December but loadings of coal declined appreciably instead of increas ing as they usually do in January. The volume of rail freight consisting chiefly of manufactures originating in the Philadelphia industrial area decreased somewhat less than was to be expected from December to January, following larger than seasonal declines in the last two months of 1937. Compared with a year ago, however, shipments were almost 17 per cent smaller." Sales of new passenger automobiles increased somewhat for two months following the introduction of new mod els last autumn but declined drasti cally in January and were the smallest since February 1936. Although the decrease in the month was sharp in all parts of this district, it was more pronounced in eastern Pennsylvania than in southern New Jersey or Dela ware. Room occupancy at non-resort com mercial hotels increased sharply in January but total revenue declined slightly, owing to smaller receipts from food and miscellaneous sources. Com pared with a year ago, room occu pancy showed virtually no change but revenue from all sources was some what larger. 1935 1936 1937 1938 Jan. per cent change from Hotel business Philadelphia Federal Reserve District Month ago Year ago Capacity......................................... Room occupancy......................... Per cent of capacity used: Jan. 1938...................... 53.3 Dec. 1937...................... 50.0 Jan. 1937...................... 57.9 Income from: Guest rooms.............................. Food............................................ Other sources............................ + 0 +13 +0 -0 +12 - 6 -12 +3 +1 +6 Total revenue....................... - 1 +3 Banking conditions. The reserve bal ances of reserve city or Philadelphia member banks have shown substan tial fluctuations over the past six months. Semi-monthly averages have varied within upper and lower limits of $236,700,000 and $207,400,000, the latest figure covering the first half of February being $230,400,000. The proportion of excess reserves to re quirements declined as low as 10 per cent early in September, but subse quently increased and in January was 26 per cent. Reserve balances of member banks (Dollar figures in millions) Held Re Ex quired cess Ratio of excess to re quired Reserve city banks Dec. 16-31........... 8216.2 *185.0 *31.2 Jan. 1-15........... 233.6 185.9 47.7 Jan. 16-31........... 236.7 187.4 49.3 Feb. 1-15........... 230.4 186.4 44.0 17% 26” 26” 24” Country banks Dec. 16-31........... Jan. 1-15........... Jan. 16-31........... Feb. 1-15........... 25” 27 ” 26” 28” 144.1 145.8 143.1 143.8 115.5 114.4 113.3 112.6 28.6 31.4 29.8 31.2 The reserves of country member banks have been relatively more sta ble, showing a range of only $142,300, 000 to $148,600,000 and a proportion of excess to requirements which has averaged close to 26 per cent in SepPage Five tember and over the past six months as a whole. A recent study shows that the great majority of member banks in this district carry reserves substan tially in excess of requirements and that they also have large balances of available funds on deposit with their correspondents. Preliminary figures as of the close of the year show that there was a decline of $3,000,000 in the loans of member banks in Philadelphia during 1937. A substantial increase in un classified loans, largely of commercial or industrial character, was more than offset by declines in loans on securi ties and other classes. Investments decreased $87,000,000, of which $40, 000,000 was in direct issues of the United States Government. The situation at the country banks was quite different. Loans increased $19,000,000, owing largely to expan sion in those made on real estate, and the shrinkage in investments was only $15,000,000'. Holdings of United States Government obligations, direct or guaranteed, increased $18,000,000, while those of other securities declined $33,000,000. Outstanding credit of the reserve bank changed very little in the four weeks ended February 16. A small increase in discounts was offset by declines in industrial advances and in float. Holdings of United States se curities remain at $211,600,000, com paring with $194,800,000 a year ago. The district had an unfavorable bal ance of payments in interdistrict com mercial and financial transactions of $21,000,000, but much of this loss was offset by funds received from other sources, so that reserves declined only $5,300,000. The principal factor tend ing to sustain reserves was the op erations of the Treasury. The excess of Government disbursements over re ceipts amounted to $12,800,000, re flecting largely the redemption of Treasury bills; apart from public debt operations, expenditures of the Treas ury were about $5,000,000 larger than receipts. To meet the drain upon its deposits at the reserve bank, the Treas ury transferred funds from other dis tricts, and its balances at this bank in creased by $4,000,000, The seasonal return of currency from circulation was completed in the sec ond half of January as usual. Subse quently there was a small increase in the demand for money but the net change in the four weeks ended Feb ruary 16 was negligible. Page Six Federal Reserve Bank of Philadelphia Feb. 16, (Dollar figures in 1938 millions) Bills discounted.... $ 2.5 Bills bought.............. 0.1 Industrial advances. 3.4 United States securities...................... 211.6 Total bills and securities............... $217.6 Federal reserve note circulation............. 310.7 Member bank reserve deposits.... 372.3 U. S. Treasurer— general account. . 10.9 Foreign bank deposits...................... 15.0 Other deposits.......... 1.0 Total reserves........... 513.7 Reserve ratio............ 72.4% Changes in— Four weeks One year Reporting member banks (000,000’s omitted) Changes in— Feb. 16, Four One 1938 weeks year +$0.2 0 - 0.1 +$ 2.0 - 0.2 - 1.0 0 + 16.8 +$0.1 +$17.6 - 0.5 + 5.6 Assets Commercial, industrial and agricultural loans: On securities........................ $ Otherwise secured and unsecured.............................. Open market paper................ Loans to brokers and dealers in securities................... Other loans to purchase or - 5.3 + 5.8 Loans on real estate.............. + 4.1 - 1.4 Other loans: - + + - 4.2 0.7 0.9 1.2% 1.4 0.8 6.5 0.5% The reserves of reporting banks in leading cities declined $13,000,000 and their balances with correspondents $10,000,000 in the period from Jan uary 5 to February 16. Nearly half of these declines occurred in the first four weeks, although deposits were quite stable at a level somewhat about $1,360,000,000. The banks reported the repayment of $5,000,000 in com mercial loans, but a substantial ex pansion in their outstanding credit through the purchase of $6,000,000 of open market paper, $8,000,000 of di rect and guaranteed obligations of the United States Government, and $4, 000,000 of other securities. In the two following weeks, ended February 16, the reporting banks re duced reserves and balances with other banks by $12,000,000; in addi tion they decreased their holdings of securities and purchased paper by $3, 000,000. The principal reason for these changes was a decrease of $17, 000,000 in deposits, only part of which may be accounted for by the repay ment of loans by customers. While commercial loans increased $3,000,000, other classes of loans declined $6, 000,000. Deposits of the reporting banks on February 16 continued above the low 50 +$ 2 158 26 + 3 2 * * 18 - 2 -$10 35 58 2 - 1 1 - * * 50 Otherwise secured and unsecured.............................. 54 Total loans........................... $ 451 United States Government 307 securities............................... Obligations fully guar, by 92 261 5 - 5 -$ 8 -$ 2 + - 40 2 + 7 - 37 Total loans and investments................................. $1,111 Reserve with Federal Re239 serve Bank........................... Cash in vault.......................... 15 Balances with other banks.. 140 Other assets—net................... 85 -1 6 -$72 + 1 - 10 - 1 — 5 - 4 Liabilities Demand deposits, adjusted. $ Time deposits.......................... U. S. Government deposits. . Interbank deposits................. 766 279 23 277 —$16 + 5 - 2 - 5 —$60 + 19 - 12 - 36 Other liabilities....................... 18 227 + - 6 2 5 1 3 1 * Comparable figures not yet available. levels reached in December, but they were $89,000,000 smaller than a year earlier. The principal source from which funds were obtained to meet withdrawals was through the sale of $70,000,000 of investments, of which $33,000,000 represented a reduction in obligations of the United States Gov ernment. The shrinkage in deposits in the past year has been due partly to a de crease in balances held for other banks. Another factor has been the substan tial amount by which Government ex penditures within the district fell short of its local receipts, the latter includ ing a very considerable volume of un employment trust funds which the States turned over to the Treasury for investment. MEMBER BANK RESERVES AND RELATED FACTORS Changes in weeks ending— Philadelphia Federal Reserve District (Millions of dollars) Jan. 26 Feb. 2 Feb. 9p Feb. 16p Changes in four weeks Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict).......... Treasury operations..................................................... -0.8 -8.3 +6.0 - 2.4 - 9.6 +10.6 +2.0 -3.6 +0.8 +1.2 +0.4 -4.6 - 0.0 -21.1 +12.8 Total............................................................................ -3.1 - 1.4 -0.8 -3.0 - 8.3 Uses of funds: Currency demand......................................................... Member bank reserve deposits................................. “Other deposits” at reserve bank........................... Unexpended capital funds.......................................... -2.3 +2.3 -0.6 -2.5 +1.9 - 3.1 - 0.1 - 0.1 -0.2 -0.4 -0.1 -0.1 +1.1 -4.1 +0.0 +0.0 + - Total............................................................................ -3.1 - 1.4 -0.8 -3.0 - 8.3 p—Prelimi nary. 0.5 5.3 0.8 2.7 Employment and Payrolls in Pennsylvania SECURITY HOLDINGS MILLIONS $ (All figures are rounded from original data) 400 US.GOVERNMEN T DIRECT OBLIGAT ONS 300 r y~'—. ER^ OTH S ICURITIES 200 US.GOV’T FULL OBLIGATIONS r GUARANTEED - 100 ^J...I...L..i..,J..,l....l...l...l... I...I.. 1935 Manufacturing Indexes - r 1936 1937 1938 DEPOSITS REPORTING MEMBER BANKS PHILA. FED. RES. DISTRICT MILLIONS Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weight Jan. change from Jan. change from 1938 1938 ed proportionately.) index Jan. Dec. index Jan. Dec. 1937 1937 1937 1937 All manufacturing .. 76 -14 - 7 Iron, steel and products . 72 -13 - 8 Non-ferrous metal prods. 112 - 6 - 4 Transportation equip. . . 57 -19 - 6 Textiles and clothing.... 84 -23 - 5 Textiles........................... 81 -22 - 4 Clothing.......................... 95 -24 - 5 Food products................... 102 - 1 - 2 Stone, clay and glass.... 67 - 8 -15 Lumber products.............. 47 -25 -13 Chemicals and products . 89 - 4 - 1 Leather and products___ 81 -16 + i Paper and printing........... 96 - 1 - 2 Printing........................... 92 - 1 - 2 Others: Cigars and tobacco........... 56 - 4 -18 Rubber tires, goods. . . 76 -15 - 3 Musical instruments .. 54 + 0 - 2 * Figures from 2327 plants. Employehoursf Jan. 1938— per cent change from Jan. Dec. 1937 1937 65 65 118 45 64 62 77 102 51 35 89 74 92 91 -27 -34 -10 -32 -34 -35 -27 + 3 -20 -31 - 7 -22 - 5 - 2 -11 -14 -13 -15 - 6 - 8 + 3 - 4 -21 -22 - 4 +12 - 8 - 7 -36 -13 -42 -14 -24 -34 -13 -40 - 7 -42 - 9 -31 + 6 - 8 - 7 -36 -23 -39 -22 -23 - 2 -25 -14 -11 - 8 - 4 - 6 43 71 50 - 5 -25 + 7 -34 - 7 -14 - 9 -32 - 2 -35 - 6 -14 t Figures from 2078 plants. DEMAND (adjusted) General Index Numbers Covering twelve branches of trade and industry (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) INTERBANK General index (weighted)... US GOVERNMENT 1936 1937 1938 Percentage change—January 1938 from January 1937 City areas* Manufacturing Employ ment Wage payments Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... -11 -19 -10 -23 -11 -13 -15 -18 -13 -12 - 7 -14 -28 -20 -48 -25 -45 -21 -16 -30 -19 -24 -23 -14 -14 -37 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... - 8 - 5 - 8 - 9 - 5 - 5 - 6 - 8 - 9 - 7 - 4 - 5 -19 Building permits (value) -f - 41 46 89 85 77 37 29 59 85 69 9 57 80 Debits - 6 -12 - 8 - 8 - 9 -13 -13 -15 + 3 -17 -18 - 5 Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing .. . Public utilities............................. Retail trade................................... Wholesale trade........................... Hotels............................................. Laundries....................................... Dyeing and cleaning................... Employment Jan. 1938 index 106 119 80 115 63 83 165 98 105 115 111 100 94 Per cent change from Jan. 1937 Dec. 1937 -11 -14 - 9 -10 -12 -23 + 5 + 6 - 6 + 0 + 3 - 2 - 2 -10 - 7 - 3 - 1 -20 -21 + 2 - 1 -26 - 2 - 4 - 2 - 6 Payrolls Jan. 1938 index 129 159 80 147 83 103 178 104 121 115 127 117 99 Per cent change from Jan. 1937 Dec. 1937 -23 -27 - 0 -35 - 1 -44 +14 + 6 + 1 + 2 + 9 + 7 + 2 -17 -11 - 9 -31 -21 -30 + 1 - 5 -20 - 3 — 2 - 9 Retail trade •sales - 9 -26 — 4 -14 - 2 - 6 -14 - 6 -11 - 3 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA PERCENT PAYROLLS + 4 January 1938 from December 1937 - 9 -13 -11 - 4 - 9 - 9 -14 -10 - 9 -18 - 7 - 9 -25 + 49 - 40 + 144 - 93 - 60 + 4 - 63 - 73 + 82 +119 - 46 + 31 -10 -13 -20 -20 -20 -12 -15 -10 -18 -20 -16 -42 -23 -58 -58 -58 -59 -58 -58 -62 -61 -66 -59 EMPLOYMENT -59 1933 1934 1935 1936 1937 1938 * Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRADE Index numbers of individual lines of trade and manufacture PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT Philadelphia Federal Reserve District Index numbers: percentages of the 1923- 1925 average as 100 Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not be typical. Not adjusted Adjusted for seasonal variation Per cent change Jan. 1937 Nov. Dec. 1937 1937 Jan. 1938 Jan. 1938 from Jan. 1937 Nov. 1937 Dec. 1937 Jan. 1938 Month Year ago ago Retail trade Sales Stocks of goods 84 76 r 79 104 82 99 79 78 67 94 75 80 78 72 71 108 72 81 79 80 59 105 71 104 78 55 109 71 103 118 100 2 2 9 9 i 4 - 9 - 7 - 3 - 6 -10 -21 64 r 55 r 74 93 64 65 92 89 77 113 73 103 129 130 120 162 93 125 58p 51p 72p 88 58p 51p 79p + i 55p + i - 2 107 68 - 4 lOOp - 2 - 0 - 6 -10 + 5 + 0 70 r 52 r 101 59 95 91 69 129 75 117 74 52 102 66 95 70p 49p 91 62 95p 76p 71 p 77p 98 73p 78p + + - Rate of stock turnover 0.28 - 3* 0.29 Wholesale trade Sales Stocks of goods Output of manufactures 75 100 79 119 120 21 78 40 231 101 86 64 171 111 148 40 61 34 88 119 61 100 75 95 165 107 86 95 167 130 40 35 50 58 49 54 74 89 89 108 19 22 22 79 64 r 51 27 39 32 286 r 279 r 252 57 78 71 31 33 36 31 38 33 40 52 44 63 79 86 100 92 93 20 48 44 37 34 r 29 25 32 28 50 69 59 110 111 83 87 81 79 81 136 56 55p 54 93 84 89 63 64 r 60 97 92 95 127 106 120 81p 87 r 73 73 86 90 71 82 81 168p 170 165 103 87 82 * Computed from data unadjusted for seasonal variation. Page Eight -21* -12* - 9* -49* - 3* -24* -77* _ 2* — 17* 89 -55* -30* -37* + 2* -25* -25* -25* 101 97 77 + t* +19* + 12* + 6* - 1* + 3* -39* + 1* - 6* 74 -13* + 5* -18* 0* + 4* -25* -ii* 80 69 69 + 13 -14 - 8 -17 -18 + 15 -19 -14 -10 -20 -15 - 6 -47 —50 -38 -38 -26 + 3 -34 -31 + 9 -44 -64 -52 -76 -43 -37 -49 -53 -27 73 98 72 126 113 19 77 39 235 103 87 65 160 116 146 28 56 31 + 0* - 5 -32 -11 -11 -19 - 4 -23 -24 -16 -25 + i -37 88 96 -22 -20 + 1 -54 -16 — 12 - 2* + 3 -40 - 1 + 5 - 6 — 5 +n -16 -13 + 2 - 5 82 60 82 74 95 168 113 86 86 165 130 p—Preliminary. 51 66 61 103 117 19 72 36 286 r 79 35 40 48 98 101 48 37 32 91 96 51 59 111 63 96 100 84 r 90 85 171 99 39 35 49 54 45 50 78 86 83 105 19 15 51 62 27 32 293 r 257 58 73 31 34 31 35 39 50 66 77 91 91 14 36 33 r 27 23 28 91 88 92 87 56 88 54 p 56 73 61 65r 60 92 98 102 129 86p 80 73 86 79 64 165 167p 82 84 r—Revised. WOMENAPPAREL STORES
@FedFRASER