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. V THE BUSINESS REVIEW V* THIRD FEDERAL PHILADELPHIA # RESERVE DISTRICT MARCH i, 1940 FEDERAL RESERVE BANK OF PHILADELPHIA Business and Banking Conditions in the United States In January and the first half of February industrial activity declined from the high level reached in the latter part of 1939. Retail trade, which had been in large volume, decreased more than seasonally, while merchan dise exports were maintained. Production. Volume of industrial pro duction declined somewhat from De cember to January, and consequently the Board’s index, which allows for a considerable seasonal increase, dropped sharply from the high level of 128 reached in December to 120 in Janu ary. Data available for the first half of February indicate a further sharp reduction in the index. Steel ingot production, which had been above 90 per cent of capacity during most of the fourth quarter of 1939, has declined steadily since the turn of the year and by the middle of February was at about 69 per cent of capacity. Plate glass production, which also had reached high levels in the latter part of 1939, was reduced in January and lumber production showed a considerable decrease owing in part to unusually cold weather in the South ern regions. Automobile production INDUSTRIAL PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1923-1925 aver age =100. By months, January 1934 to Jan uary 1940. in January was larger than is usual at this season. In the latter part of the month, however, and in the first half of February, as retail sales of new cars declined seasonally and dealers’ stocks, which had been lower than usual at the beginning of the year, rose rapidly, the output of cars declined. In the machinery industries activity was gen erally sustained at the advanced levels reached in December, Output of cotton textiles in January continued at about the high rate of other recent months but production of woolen textiles declined further from the peak levels of October and Novem ber, and output of silk products re mained in small volume. Activity at meat-packing establishments was main tained in January at the high level pre vailing for several months. Coal pro duction rose sharply, following a marked reduction in December, and was at about the high level reached last October. Output of crude petro leum continued in large volume. Value of contracts awarded for both public and private construction de clined considerably in January, accord ing to reports of the F. W. Dodge Corporation. Awards for private res idential building showed a greater than seasonal reduction and were lower than the level prevailing a year ago. Contracts for other private work de clined somewhat but remained in larger volume than in the corresponding pe riod last year. Employment. Factory employment and payrolls, which had risen sharply during the latter half of 1939, declined by somewhat more than the usual sea sonal amount from the middle of De cember to the middle of January, ac cording to reports from leading indus trial states. MEMBER BANKS IN 101 LEADING CITIES Wednesday figures, September 5, 1934, to Feb ruary 7, 1940. Commercial loans based on new classification beginning May 19, 1937. FACTORY EMPLOYMENT FREIGHT CAR LOADINGS Index of number employed, adjusted for sea sonal variation, 1923-1925 average — 100. By months, January 1934 to January 1940. Index of total loadings of revenue freight, ad justed for seasonal variation, 1923-1925 aver age = 100. Miscellaneous, coal, and all other expressed in terms of points in the total index. By months, January 1934 to January 1940. Page One Sales at department stores, variety stores, and mail-order houses in January declined more than seasonally from the high level of De cember. Total freight-car loadings showed a seasonal decline; shipments of miscellaneous freight and grain de creased, while coal loadings increased considerably. Foreign trade. Exports of United States merchandise, which usually de cline in January, were maintained this year at the high level reached in De cember. Shipments of cotton, which have been large in recent months, rose further, while exports of many indus trial products declined. Exports to the Distribution. United Kingdom increased sharply, owing mainly to larger cotton ship ments. Reflecting principally acquisitions of foreign gold, the country’s monetary gold stock increased by $287,000,000 during January and by $132,000,000 in the first two weeks of February. Commodity prices. Prices of copper, lead, and silk showed marked declines from the middle of January to the middle of February and there were smaller decreases in prices of some other basic industrial materials, such as steel scrap, wool, and textile yarns. Prices of foodstuffs, on the other hand, showed little change in this period. Government security market. Prices of United States Government securi ties declined slightly during the latter half of January from the recovery peak reached early in the month but re gained part of these losses during the first half of February. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities rose during the five weeks ending February 7 as a result of increases in holdings of government securities at New York City banks. Loans to security brokers and dealers and commercial loans declined. De mand deposits continued to increase during the period. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District has declined since December, following an uninterrupted expansion during the preceding seven months. Production in January de creased about 5 per cent from the De cember level which was the highest in two and one-half years, but it was 16 per cent larger than a year ago. The decline in the first month of 1940 reflected larger than customary reductions in the output of manufac tured goods and crude oil. Production of bituminous coal continued at the December level, although some expan sion was to be expected, while output of anthracite increased substantially more than was usual at that time of year. The volume of construction declined in January, when there is ordinarily no change from the month before, and was substantially smaller than in Jan uary 1939. Building activity has de creased sharply from the nine-year peak reached last summer. Employment in twelve lines of trade and industry in Pennsylvania declined 8 per cent from December to January, and payrolls were reduced 5 per cent. The number of workers and the volume of wages paid in January, however, were well above a year earlier and, ex cept for the last quarter of 1939, were the highest since the fall of 1937. The distribution of commodities was less active than was to be expected in January. The volume of freight-car loadings and retail sales declined more than seasonally, and purchases at wholesale were smaller than in Decem ber. Inventories increased at whole sale establishments and were reduced slightly less than usual at retail stores. Stocks are generally larger than in PRODUCTION AND PRICES early 1939 but still appear low in rela tion to the volume of trade. Prices of both crude and manufac tured materials are lower than at the turn of the year. Some firmness ap peared in February in the prices of staple agricultural goods. The general index of wholesale prices of 813 com modities, compiled by the United States Bureau of Labor Statistics, in the week ended February 17 was 78.3 per cent of the 1926 average, the lowest since the beginning of September, and compared with 79.4 at the end of De cember and 76.6 in the middle of Feb ruary 1939. Manufacturing. The demand for goods manufactured in this district continues quiet. The volume of in quiries received by producers in the first half of February was smaller than a month earlier in all reporting FACTORY PAYROLLS PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT INDUSTRIAL PRODUCTION ^ (pHILA. TCP. RES- OIST.) | CONSUMERS' GOOD; COMMODITY PRICES US (other than farm products _ PRICES OF CAPITAL GOODS _ RAW MATERIALS 1934 1935 1936 1937 1938 1939 1940 Source for Prices - US Bureau at Labor S+eHsiics Page Two 1936 1937 1938 1939 1940 lines. Sales also declined and, except Business Indicators in the case of steel, were somewhat Philadelphia Federal Reserve District below the level a year ago. Prices of factory products show weakness but Index numbers: percentages of the 1923-1925 average as 100 continue higher than in the first eight Not adjusted Adjusted for seasonal variation months of 1939. Adjusted indexes allow for the usual Per cent seasonal change in activity. The volume of specifications on the change orders placed last fall is still moder Unadjusted indexes reflect merely the Jan. 1940 actual change which may or may not be Jan. Nov. Dec. Jan. Jan. Nov Dec. Jan. ately large and cancellations have been from typical. 1939 1939 1939 1940 1939 1939 1939 1940 few. As shipments are exceeding new Month Year orders, backlogs have declined further ago ago and are now below a year ago, except Industrial production .... 88p 93 5 94 r 89p 92 + 16 77 84p in the steel industry. 92 Manufacturing—total.............. 7 +17 86p 74 91 r 92 Durable goods......................... 98 101 95p 5 +48 65 Plant operations have receded Consumers’ goods.................. 8 90 r 92 84 p 83 + 1 61 99 101 r 95 Metal products...................... 6 +56 64 r 100 106r 99 further since the turn of the year. At 77p 91 r 85 Textile products.................... 82 87 r 89 76p - 15 - 5 80 97 98 iron and steel mills, activity con Transportation equipment. 97 +40 69 97 97 + 0 69 101 77p Food products....................... 75 80 77 78 + 3 79 78p + 1 76 tinues substantially above the rela 91 77 Tobacco and products......... 106 73 112 94 110 + 4 +25 88 42 r 33 Building materials............... 47 46 r 39 +34 25 48 16 29 tively low levels prevailing in January 127p Chemicals and products. . . 134 135 + 14 111 133 137 130p - 5 114 llOp Leather and products......... 113 116 109 122 and February a year ago, but at textile 116 106p - 9 - 3 109 93 Paper and printing............... 92 88 - 5 89 84 + 5 84 90 60 88 plants operations appear to be some 66 81p Coal mining................................ 73 61 68 63 74p + 22 + 10 81p Anthracite............................... 74 58 59 62 75p + 27 + 9 60 69 what lower than last year. Reflecting 80 80 Bituminous............................. 76 +20 67 r 95 70 - 8 59 r 86 Crude oil..................................... + 5 409 468 450 431 the reduction in operating rates, in 426 482 479 449 - 6 Electric power dustrial purchases of equipment seem Output..................................... +12 261 283 288 292 2 246 272 269 275 Sales, totalt............................ +13 257 284 275 289 5 249 276 267 281 to have declined slightly during Febru Sales to industries!.............. +10 169 198 194 186 192 - 6 175 194 204 ary, following a period of active buy ing in the preceding three months. A Employment and wages—Pa. 89 91 +14* 79 r Factory—Wage earners.................... 85 +27' 67 r 90 Payrolls............................................ moderate amount of plant expansion is 90 r 85 Man-hours (1927-28=100)........ +33* 64 still in evidence but not to the same General (1932=100) 111 121 Employment................................... + 8* 103 r extent as in December. 161 +20* 135r 171 Payrolls............................................ Inventories of finished goods at re Building and real estate porting factories increased slightly 52 59 11 Contracts awardedt—total................. 64 -19 58 r 59 r 53 r 47 42 51 Residential!........................................ + 3 64 50 r 57 r 52 r 51 - 2 from the middle of January to the 44 49 10 NonresidentialJ.................................. -40 46 67 r 46r 45 r 40 middle of February but continued -10 Public works and utilities!............. 106 103 100 86 r 92 r 85 r 78 - 9 13 13 Permits for building—17 cities.......... 19 -46 31 33 23 + 24 43 smaller than a year ago. Stocks of 59 53 61 Real estate deeds—Philadelphia!. .. 50 +18 55 + 9 54 47 Writs for Sheriff sales—Phila............. 296 293 244 26 raw materials at plants showed little 214 264 287 212 - 1 change in the month and were about Distribution 62p 103 146 Retail trade —sales..................... 86p - 4 the same as in early 1939 except at +6 71p 72 89 stocks.................. 77p + 1 + 2 textile mills, where some increase was 8* +13* Wholesale trade—sales.................... _j_ 4* + 6* stocks.................. reported in the year. 83 89 113 Life insurance sales........................... 84 -27 95 90 93 + 10 - 7* +55* 73 113 122 113 Newr passenger auto, registrations Employment and payrolls at Penn + 12* + 2* 117r 116 105 118p Hotels—Occupancy.........(1934 =100) 129p sylvania factories declined about sea 6* + 1* 128r 129 137 Income, total... (1934 =100) 70 73 57 Freight-car loadings—total................. +27 - 3 83 sonally in January, and preliminary 69 73 +26 55 80 Merchandise and miscellaneous... - 5 Coal....................................................... reports indicate that the usual improve + 7 +19 68 82 75 81 ment was not apparent in February. Business liquidations + 23* -10* 95 89 r 69 r 85 Number..................................................... 35 22 20 14 Amount of liabilities............................. +153* +57 The number of wage earners de creased 2 per cent in January to an Payment of accounts 95 112 +13 104 - 10 Check payments..................... estimated 903,000 or 14 per cent more Rate of collections (actual) 36 30 30 than in January 1939 and 23 per cent Retail trade......................... + 2 +2 above the low in the summer of 1938. Prices—United States 79 Wage disbursements were reduced 5 79 Wholesale (1926=100). + 0* + 3 69 + 2* + 3* 67 Farm products............... per cent in the month to about $21, 72 + 0* 72 Foods................................. - 0 84 + 5* 84 Other commodities........ 800,000 a week, which was 27 per cent 0* 77 + o* - 1 Retail food........................... 78 77 2* — 2 * 78 more than the amount paid a year Philadelphia.................... 75 75 Scranton......................... . + 1* + 2* earlier and over SO per cent more than % change from in July 1938. Jan. (In millions of dollars) Wage payments in January declined Month Year 1939 1940 1939 1939 1939 ago ago 6 per cent at plants producing nondura ble goods; in the durable goods indus Banking and credit Federal Reserve Bank tries the reduction amounted to 5 per -42 $0.4 0 $0.7 $0.7 $0.4 $1.2 - 1 231 -5 241 218 207 210 cent. At plants manufacturing metal +54 598 618 572 588 +5 401 products, payrolls declined about 5 per + 8 79.6 82.4 +2 77.3 81.0 76.0 Reporting member banks cent, reflecting substantial reductions + 4 $413 $414 $409 $418 -1 $397 + 4 725 745 +2 719 728 713 at steel works and rolling mills and in 0 10.2 9.0 10.1 10.0 -1 Bankers’ acceptances outstanding... . 10.0 several nonferrous metal lines. Activ * Computed from data unadjusted for seasonal variation. p—Preliminary. r—Revised. ity at foundries, forges, and at estab ! 3-month moving daily average centered at 3rd month (seasonal factors revised), j Not included in production index. lishments producing such finished Page Three TEXTILE ACTIVITY METAL PRICES PERCENT EMPLOYEE - HOURS IN M 0 NTNLT WCCKLV 250 s TEEL SCRAP 1932-33 AVG.« 100 PENNSYLVANIA PERCENT CARPETS AND RUGS' A /\ / WOOLENS — AND WORSTEDS- 200 150 C0F PER HOSIERY 100 ^FINISHED STEEL 50 1936 1937 1938 1939 19 4 0 Source; Iron Ag« goods as structural steel, electrical ap paratus, engines and pumps, and stoves and furnaces was well sustained. In the transportation equipment industry, where activity increased sharply throughout 1939, substantial declines were reported at railroad re pair shops and automobile and truck factories. Other lines were well sus tained, particularly shipbuilding, where an expansion was reported instead of the customary large contraction. Wage disbursements at textile and clothing mills in January showed the usual decline of about 8 per cent. Un usually large decreases were reported in the case of cotton goods, woolens and worsteds, silk goods, and textile dyeing and finishing. Among other major industry groups, wage payments were well maintained at plants producing chemicals, and stone, clay and glass products and ex panded at factories producing leather goods. Average hourly earnings of Penn sylvania factory workers advanced fractionally in January to a new high of 71 j/2 cents, substantially above 1929 and about 2 cents an hour above Janu ary 1939. Average working time per week, however, declined to slightly over 37 hours, so that weekly wages were re duced 86 cents to $26.50 or about $2.50 a week more than a year earlier. The number of wage earners in Delaware factories declined 1 per cent in January but was 9 per cent above a year earlier. Wage payments were reduced 4 per cent to a level 11 per cent above January 1939. Decreases were shown in all reporting lines, the sharpest being in paper and printing, lumber, and textiles. In Southern New Jersey employ ment declined 5 per cent and payrolls Page Four 937 7 per cent from December but were 19 and 32 per cent respectively above a year ago. Manufacturing activity in this dis trict in January declined 7 per cent on a seasonally adjusted basis from the two and one-half year peak reached in December but was still 17 per cent above January 1939. The decline re flected primarily a sharper than sea sonal contraction of 8 per cent in the output of nondurable goods which re ceded to a level only 1 per cent above a year earlier. Production of durable goods declined 5 per cent but was still 48 per cent above January a year ago. The largest declines among the major industry groups, after allowing for sea sonal change, were in the output of building materials and textile products. Transportation equipment, foods, and tobacco were the only groups to show improvement from December to Jan uary. The output of electric power in creased 2 per cent more than usual in January and was 12 per cent above January 1939. Total sales increased 5 per cent on an adjusted basis, while sales to industry declined 6 per cent more than was to be expected. Total sales and sales to industry respectively were 13 and 10 per cent above the levels a year ago. Coal and other fuels. The market for anthracite continues moderately active and substantial stocks accumulated in the latter part of 1939 have been largely worked off. Consumption of anthracite by householders has been stimulated by continued cold weather, and sales during most of February were above the levels of a year earlier. Prices generally have been firm since the turn of the year. 193 8 193 9 1940 Production of anthracite in Janu ary expanded sharply from the unusu ally low level of last December to 5, 600,000 tons, the largest for that month since 1935. But in the first half of February output was again curtailed considerably and was much smaller than in the same period last year. Shipments of anthracite in January were the largest in nearly three years, averaging 4,400 cars a day as against 3,300 in December and about 4,000 a year ago. Demand for Pennsylvania bitumin ous coal decreased somewhat during February, reflecting smaller takings by manufacturing plants, railroads, and public utility companies. Aggregate sales to industrial consumers, how ever, remained well above the levels of early 1939. Colliery output failed to improve seasonally in January, but was 20 per cent greater than in the same month last year. Further reductions were re ported in the first half of February. Shipments of soft coal increased sharply in January, following substan tial declines in the two preceding months and, with the exception of last October, were the heaviest since early 1937. Production of by-product coke de creased slightly in January. The out put of gas and fuel oils also was less than in December. Activity at coke ovens was maintained at a substan tially higher rate than in January 1939, but operations at oil refineries were somewhat lower. Building. Construction activity in this district decreased sharply in Jan uary, continuing the downward trend that began last fall. Operations on contracts previously awarded were be- INDUSTRIAL FUEL AND POWER RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT ELECTRIC POWER USED BY INDUSTRIES FUEL OIL OUTPUT STOCKS BITUMINOUS COAL OUTPUT ADJUSTED FOR SEASONAL VARIATION j 1934 1935 1936 1937 1938 low the level of a year ago and the smallest for any January since 1935. The recent recession has been due largely to decreased activity in resi dential building, which last year reached the highest level since 1929. New awards of construction con tracts in January approximated $12, 000,000, or 14 per cent less than in December and 15 per cent below a year ago. These decreases reflected sharp reductions in the value of con tracts ■ awarded for family houses and all classes of nonresidential buildings except factories. Expansion of indus trial plants began to increase last fall, and in January the value of awards for factory construction was 64 per cent above December and over 40 per cent above January 1939. Awards for multiple-family dwellings more than doubled in January and exceeded the same month last year. Contracts for public works and utilities con tinued at about the December level but were one-third greater than in Jan uary 1939. Building contracts Philadelphia Federal Reserve District Per cent Jan. change 1940 (000’s From From omitted) month year ago ago Residential........................... S 3,827 - 8 Apts, and hotels............. 1,881 +133 Family houses................. 1,946 - 42 Nonresidential..................... 3,366 - 32 Commercial..................... 1,202 — 11 Factories........................... 1,259 + 64 Educational..................... 97 - 87 All other...................... 808 - 62 -12 +23 -31 -45 —45 +43 -75 -70 Total buildings........... $ 7,193 Public works and utilities 4,945 - 21 - 1 +33 Grand total................. $12,138 - 14 -15 -32 Source: F. W. Dodge Corporation. Wholesale prices of building mate rials have shown only minor fluctua 1939 1940 1934 1935 tions since the substantial advances reported in the first few weeks of the war. Distribution. Retail trade sales in the Philadelphia District in January declined 4 per cent more than usual from the three-year peak reached the month before. Preliminary reports in dicate that the volume of business showed little improvement in Febru ary, owing in part to unusually severe weather. The largest decline from De cember to January was 20 per cent at shoe stores. Sales by department stores decreased 6 per cent in the month, while consumer purchases of men’s and women’s apparel were bet ter sustained. The most favorable re ports for the month were again re ceived from credit stores, where the index of sales of such durable consum ers’ goods as refrigerators, radios, and other household equipment increased 5 per cent to the highest level since the same month of 1937. These compari sons are made on the basis of figures which are adjusted for the usual sea sonal changes and the number of trad ing days. Compared with January 1939, total retail sales showed an improvement of 6 per cent, gains over a year ago being reported in all lines except shoes. Sales by credit stores were 12 per cent above last year. Inventories at retail establishments declined 1 per cent less than seasonally from December to January but were only 2 per cent larger than in January 1939. All types of reporting establish ments showed increases over a year earlier, ranging from 1 per cent at shoe stores to 5 per cent at credit stores. Wholesale trade sales declined 8 per 1936 1937 1930 1939 1940 cent in January, the sharpest reduction being in the case of jewelry, where post-Christmas business is especially dull. The volume of sales of footwear was about unchanged in the month, while drug and grocery establishments reported increases. Compared with a year ago, sales at wholesale were 13 per cent higher. Inventories at whole sale establishments increased 4 per cent from December to January and were 6 per cent larger than January 1939. Shipments by rail freight declined 3 per cent more than usual in the Allegheny District in January, as the movement of all types of products ex cept coal showed larger than seasonal contractions. Shipments of merchan dise and miscellaneous goods, account ing for about two-thirds of total freight moved in this area, decreased 5 per cent more than seasonally, while coal loadings, representing nearly one-quar ter of the total, increased 7 per cent more than was to be expected. The sharpest declines on an adjusted basis were in shipments of grain and ore. Car loadings of roads in the Phila delphia area also declined more than usual in January. Shipments, com prising chiefly manufactured goods, were well sustained in the first two weeks of February, but a sharp reduc tion was reported here as in other parts of the country in the third week, owing largely to severe snowstorms. Sales of new passenger automobiles in January were 7 per cent less than in the preceding month but 55 per cent above January 1939. Preliminary reports indicate that sales were well sustained in February. Total revenue of nonresort hotels declined 6 per cent in January but was 1 per cent above a year ago. Page Five Jan. per cent change from Hotel business Philadelphia Federal Reserve District Federal Reserve Bank of Philadelphia (Dollar figures in millions) Feb. 21. 1940 Month ago Year ago Capacity................................ Room occupancy................. Per cent of capacity used: Jan. 1940......................... 52.6 Deo. 1939......................... 46.9 Jan. 1939......................... 51.4 Revenue from: Guest rooms...................... Food.................................... Other sources................... - 0 +12 -0 +2 Industrial advances. . + 8 - 8 -19 +1 +2 -0 Total revenue............... - 6 +1 $206.9 Note circulation......... 345.4 Member bank deposits 595.5 U. S. general account. 44.3 Foreign bank deposits 35.2 26.3 860.4 82.2% Loans at re porting banks have increased in the past month, but holdings of securities have been reduced. Deposits have de creased further from the peak level of early January. The reserves of all member banks in this district also de clined, but the average of $604,000, 000 in the first half of February was still nearly half again as large as a year earlier and $297,000,000 or 96 per cent in excess of requirements. Banking conditions. Member bank reserves (Dollar figures in millions) Held Re quired Ex cess Philadelphia banks: 1940—Jan. 1-15 $446.2 $212.3 $233.9 Jan.16-31 444.5 212.6 231.9 Feb. 1-15 429.9 211.5 218.4 Ratio of excess to re quired no% 109” 103 ” 1939—Feb. 1-15 260.7 176.3 84.4 48 ” Country banks: 1940—Jan. 1-15 Jan. 16-31 Feb. 1-15 175.7 170.5 174.4 97.8 96.6 96.2 77.9 73.9 78.2 80” 77 ” 81 ” 1939—Feb. 1-15 146.1 95.1 51.0 54 ” Member bank reserves declined $12, 500,000 in the four weeks ended Feb ruary 21 to $595,500,000. The de crease reflected a seasonal upturn of approximately $11,600,000 in currency demand, the absorption of over $10, 000,000 by Treasury operations, and the movement of funds into miscel laneous deposits at the Federal Reserve Bank. These influences were offset in part by substantial gains in com mercial and financial transactions with other districts. The excess of Treas ury receipts over disbursements was due chiefly to quarterly installments on Social Security taxes, large trans fers of unemployment trust funds to the government for investment, and sales of savings bonds. Credit extended by this bank was virtually unchanged in the past month, following a decline in holdings of gov ernments during the preceding month resulting from System sales of secur ities and a reduction in the proportion of the Investment Account allotted to this bank. Outstanding industrial ad Page Six Changes in— Four weeks *0.6 -80.1 3.1 203.2 - 0.0 -$0.1 + 3.1 -12.5 + 1.6 - 5.3 + 9.2 - 3.1 One year - $0.6 - 0.1 + 0.2 - 2.7 - $3.1 + 28.3 +200.3 - 22.3 + 13.2 + 18.9 +238.5 + 5.2% vances of $3,100,000 were slightly larger than a year ago, but discounts for member banks have declined. The volume of commercial loans at reporting banks has increased $5,000, 000 in the past four weeks and on a comparable basis is close to the high point of 1939. Increases also were reported in holdings of open market paper and in miscellaneous loans, with the result that total loans expanded $9,000,000 to $421,000,000. In the corresponding periods of the three pre ceding years the volume of commer cial loans showed little or no change. Investments, on the other hand, were reduced by $15,000,000 to $742, 000,000. Holdings of direct govern ments, following an advance to a rec ord level early in February, turned downward and for the four weeks as a whole show a decline of $2,000,000. The investment in guaranteed obliga tions was reduced by the same amount, and holdings in the corporate and municipal groups decreased $11,000, 000 to approximately the amount held at the end of last year. Balances held for other banks re cently have been at peak levels. Ad justed demand deposits, however, have declined considerably in the past four weeks, partly as a result of Social Se curity taxes and transfers of unem ployment trust funds. Aggregate deposits at all member banks in this district were at a new high average of $3,197,000,000 in the first half of January, and a month later, Reporting member 'banks (000,000’s omitted) Feb. 21. 1940 Assets $ Other loans to carry secur.. Changes in— Four One weeks year* 196 25 24 31 50 1 94 +* + + - 5 2 1 1 +*20 + 2 + 4 - 1 + 2 + 2 +*24 +$ 9 + 7 + 9 - 3 $ 421 +$ 9 Government securities........ $ Obligations fully guar’teed. 370 99 273 -$ 2 - 2 - 11 * 742 —$15 +*25 Total loans & investments $1,163 Reserve with F. R. Bank.. 437 20 Balances with other banks. 227 86 -$ 6 - 11 + 1 +*49 Liabilities Demand deposits, adjusted. $ - 2 943 262 54 444 —$21 + 1 + 3 15 215 U. S. Government deposits. + 2 1 * Adjusted for changes in reporting banks to preserve comparability. despite a decrease of $30,000,000, were still $325,000,000 larger than a year ago. Increases in the past year have been greatest in the larger cities. Philadelphia banks showed an expan sion of $238,000,000 or 17 per cent, and banks in other cities with popula tions of 15,000 or more reported a gain of $60,000,000 or 8 per cent; in stitutions in smaller cities and towns showed an increase of only $27,000,000 or 4 per cent. At the close of 1939 member banks in this district had $2,342,000,000 of credit outstanding, loans comprising 41 per cent, obligations of the United States government 33 per cent, and corporate and municipal securities 26 per cent. In the course of the year loans expanded $14,000,000 at Phila delphia banks and $26,000,000 at coun try banks. Banks in Philadelphia also showed an increase of $15,000,000 in security holdings, while other mem bers reduced their investments by $40, 000,000, reflecting chiefly the sale of corporate bonds. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Jan. 31 Feb. 7 Feb.14 Feb. 21 Changes in four weeks* Sources of funds: Reserve bank credit extended in district............... Commercial transfers (chiefly interdistrict).......... Treasury operations...................................................... -2.1 -5.9 +2.6 - 1.6 +15.3 + 3.2 + 2.0 + 8.3 -14.8 +0.8 +1.6 -1.3 - 0.9 +19.3 -10.3 Total............................................................................. -5.4 + 16.9 - 4.5 +1.1 + 8.1 Currency demand......................................................... "Other deposits” at reserve bank........................... Other Federal Reserve accounts............................... +0.8 -7.1 +0.9 -0.0 + + + + + - 5.5 9.8 0.0 0.2 +3.6 -2.3 -0.2 -0.0 +11.6 -12.5 + 9.2 - 0.2 Total............................................................................. -5.4 +16.9 - 4.5 +i.i + 8.1 * Preliminary. Changes in weeks ending 1.7 6.7 8.5 0.0 Employment and Payrolls in Pennsylvania REPORTING MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS (All figures are rounded from original data) 1700 DEPOSITS Manufacturing Indexes 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 1940 1940 ed proportionately.) index Dec. Jan. index Dec. Jan. 1939 1939 1939 1939 LOANS AND INVESTMENTS All manfacturing. EXCESS RESERVES. 19 3 7 19 3 0 9 3 9 194 0 LOANS AND INVESTMENTS REPORTING MEMBER BANKS PHILA. FED. RES DISTRICT MILLIONS Iron, steel and products . Non-ferrous metal prods. Transportation equip.. . Textiles and clothing.. . Textiles........................... Clothing.......................... Food products................... Stone, clay and glass.... Lumber products............. Chemicals and products . Leather and products... Paper and printing........... Printing........................... Others: Cigars and tobacco... . Rubber tires, goods. . . Musical instruments .. -2 + 14 -1 +30 +0 +24 -0 +23 -4 - 4 -5 - 6 -3 + 3 -3 + 3 -5 +19 -7 +18 -1 +15 +2 - 0 -3 + 6 -2 + 2 89 85 125 64 91 86 115 104 79 60 94 91 98 90 60 84 62 -6 -3 +0 Jan. 1940— per cent change from Dec. Jan. 1939 1939 85 109 151 65 80 77 99 106 78 52 1C4 89 103 96 - 5 - 5 - 5 - 4 - 8 - 8 - 8 - 6 - 7 -16 - 3 + 4 - 6 - 5 +27 + 51 +34 +26 - 4 - 6 + 6 + 4 +25 +25 +20 - 1 + 9 + 6 - 5 - 4 - 51 - 4 - 8 - 8 - 9 - 8 - 9 -15 - 2 + o - 7 - 6 +33 +49 +37 +47 — 2 — 3 + 3 + 4 +31 +18 +27 — 3 + 8 + 3 51 86 73 +24 + 5 +14 * Figures from 2434 plants. Employehours f - 8 -12 - 2 +51 - 3 +33 - 8 -13 - 1 +59 — 3 +26 t Figures from 2186 plants. General Index Numbers U.S GOVT OBLIGATIONS (direct and guaranteed) Covering twelve branches of trade and industry Employment (Indexes are percentages of the 1932 average taken as 100. In Per cent dividual indexes are combined Jan. change from proportionately into general in 1940 dex number.) index Dec. Jan. 1939 1939 OTHER SECURITIES General index (weighted)___ Manufacturing............................. Anthracite mining....................... Bituminous coal mining............. Building and construction......... Quarrying and non-met. mining Crude petroleum producing ... Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning................... 'OTHER LOANS COMMERCIAL LOANS 1937 1938 1939 1940 - 8 - 2 + 1 - 4 -18 -17 + 3 - 1 -30 - 1 + o - 0 - 5 111 139 68 107 40 88 137 95 99 118 102 99 89 + 8 + 14 + 1 + 4 -17 + 8 + 4 + 3 0 + 3 - 6 + 5 - 3 Payrolls Per cent change from Jan. 1940 index Dec. 1939 - 5 - 5 +97 0 -20 -22 + 3 - 1 -26 - 3 - 0 - 1 - 7 161 209 89 220 55 159 161 106 118 121 118 126 101 Jan. 1939 +20 +27 +37 +17 -15 +23 + 9 + 4 + 1 + 4 - 2 + 6 - 3 Percentage change— January 1940 from January 1939 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton.................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... York....................... Wage payments +20 +25 +21 +43 + 8 + 8 + 5 - 4 +15 +13 + 4 +11 +24 +31 +27 +38 +74 + 9 + 15 + 8 + 3 +27 +29 + 3 +13 +37 Building permits (value) Debits trade sales + 9 - 27 + 150 +1539 - 48 - 51 + 109 + 721 - 89 - 51 + 9 - 53 - 79 +15 - 3 + 5 + 19 + 2 +19 + 19 +12 +26 + 4 +17 +22 +14 +16 + 8 + 8 +12 + 5 + 4 + 7 - 1 +18 + 8 + 9 + 9 January 1940 from December 1939 Allentown............. Altoona.................. Harrisburg............ Johnstown............. Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... Y ork....................... ... - 4 + 2 - 2 - 1 - 2 - 1 - 5 - 5 - 7 - 2 - 4 - 1 -10 - 9 - 5 -10 - 2 - 5 - 2 - 9 -11 - 8 - 3 - 7 - 4 -11 + + + + + + + _ _ _ _ — 82 21 316 808 46 28 77 »2 67 48 35 82 45 - 4 - 7 - 9 -11 — 6 - 6 - 9 - 2 —27 — 13 — 7 -35 -12 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES OF TRADE AND INDUSTRY PERCENT 19. 2AVG. *100 200 PAYROLL S \ 180 *> 160 —62 -63 -61 —66 —61 -60 -62 —64 —61 -62 -65 i « / > 1 1 1 1 i i i fj f 140 J -Vv j ^ 100 *sr KJv/ Ln r-*-! 120 1 X EMPL 0YMENT : / 80 1934 1935 1936 1937 1938 1939 1940 Area not restricted to the corporate limits of cities given here. Page Seven OUTPUT OF MANUFACTURES PHILADELPHIA FEDERAL RESERVE DISTRICT TEEL Index numbers of individual lines of trade and V-A manufactures / y •j Philadelphia Federal Reserve District LOCOMOTIVES AND CARS 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 be typical. Not adjusted Per cent change Jan. Nov. Dec. Jan. 1939 1939 1939 1940 Jan. 1940 fro m Jan. 1939 Nov. Dec. Jan. 1939 1939 1940 ...... Month Year ago ago Retail trade WOOLENS AND WORS rEDS 80 Credit.................................................. Total of all stores................................. Department....................................... Women’s apparel............................. Credit.................................................. 1 ^ 89 76 84 106 98 109 6 6 9 2 3 12 58 49 69 83 61 58 103 95 89 115 90 130 146 139 142 161 117 172 62p 52p 76p 84 59 65 68 76 101 80 102 102 93 76 50 80 54 108 101 68 98 81 107 66 106 77 51 109 65 103 89 63 127 70 117 72 47 lOOr 61 95 71p 46p 92 62 98 114 -20 + 5 + + + + — + 77p 51 p 104 69 103 + + + + + + + + 2 2 3 1 5 70 45 90 61 93 + 88 78 5 3.50 86p 72p 83p 102 78 - 4 6 1 3 1 1 4 5 0 Rate of stock turnover Monthly turnover on annual basis (actual, not indexes)...................... V \ H OSIERY 3.69 Wholesale trade Sales — 8* + 0* +11* — 10* — 16* + 4* — 17* -76* —10* + 4* + 1* +20* + 2* + 5* — 2* + 4* Stocks of goods ap Output of manufactures Pig iron....................................................... Steel.............................................................. Iron castings.............................................. Steel castings............................................. Electrical apparatus................................ Motor vehicles.......................................... Automobile parts and bodies................ Locomotives and cars............................. Shipbuilding............................................... Silk manufactures.................................... Woolen and worsteds.............................. Cotton products........................................ Carpets and rugs...................................... Hosiery........................................................ Underwear.................................................. Cement........................................................ Brick............................................................ Lumber and products............................. Slaughtering, meat packing.................. Sugar refining............................................ Canning and preserving......................... Cigars.......................... ................................ Paper and wood pulp.............................. Printing and publishing......................... Shoes............................................................ Leather, goat and kid. ........................... Explosives................................................... Paints and varnishes............................... Petroleum products................................. Coke, by-product..................................... 80 41 62r 102 57 52 72 144 96 72 19 20 96 62 33 14 293 413 92 80 65 58 56 44 133 126 103 102 155 129 69 29 35 r 58 30 26 94 96 54 87 68 87 133 87 68 79 156 100 97 112 58 93 81 91 144 100 105 83 170 146 77 107 r 76 116 106 r 25 81 36 411 82 68 52 150 106 150 81 98 80 87 107 22 78 37 427 69 55 53 132 94 141 68 46 53 r 51 29 28 99 ioi 84 112 59p 60 104 110 81 r 79 90 94 148 131 82p 86 110 91 86 175 145 * Computed from data unadjusted for seasonal variation. 86 168p 140 + 13* 4* + 7* + 14* + 29* + 1* + 21* + 38* + 17* + + 5 - 8 + 5 -25 + 0 -14 - 3 + 2 + 4 -16 -18 + 2 + 98 + 60 + 54 + 21 + 49 + 15 + 26 +162 + 46 — 14 — 4 -12 -12 - 6 — — + 6* 8* + 32* + 7* + 13* 8* + 22* + 20 1 8 10 -33 + 60 - 4 + 45 - 4 + 9 - 0* 2* + + 2 +32 - 1 + 5 - 2 - 5 8 + 16 + 10 + 26 + 15 + 3 2 -11 — - 4 — -17 - 1 - 4 - 3 LUMBER PRODUCTS 5 + 34 + 8 + 8 + 40 PAPER ANO WOOD PULP 40 81 60 r 98 47 59 76 134 67 102 17 18 62 88 14 31 299 413 82 93 59 71 45 59 125 144 106 117 126 157 20 68 57 66 52 30 90 108 73 64 33 24 87 103 71 67 87 136 92 68 71 154 100 p—Preliminary. 111 81 92 136 97 105 85 171 141 76 lOlr 70 111 103r 78 96 73 92 100 19 20 78 79 36 36 432 436 84 71 63 56 56 54 141 124 103 98 148 138 56 32 52 r 48 29 26 86 107 55 60 75 81 95 125 94 109 84 175 141 GOAT AND KID LEATHER 86 in PETROLEUM REFINING 77 59p 90 78 90 134 87p 91 77 166p 140 r—Revised 1936 Page Eight 1937 1938 1939 (940
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