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THE BUSINESS «B VICE FEDERAL RESERVE BANK OF PHILADELPHIA MAY 1, 1944 R.ECORDS of the past few months suggest that manufacturing output is near the wartime peak. Frequent readjustments have been nec essary in the munitions industries with chang ing military requirements, but reductions in some categories have largely offset increases in others. The output of civilian goods has con tinued to fluctuate narrowly for some time. The raw materials situation might permit small in creases or a limited resumption in operations in some civilian lines, but, as pointed out pre viously, the persistence of a tight manpower situation in certain areas and in specific indus tries delays it. With the war production program at an ad vanced stage, inventories are beginning to re ceive greater attention. The size of manufac turers’ stocks and the form in which they are held are of growing importance in view of the problems of liquidation and financial settlement associated with continuing shifts in war de mand. The extent to which distributors’ stocks, particularly holdings by retail stores, conform to the expanded purchasing power of con sumers, is significant as it influences Govern ment policy with respect to production sched ules and the rationing of scarce items. Data collected by the Department of Com merce indicate that the aggregate value of bus iness inventories decreased about $600 million during 1943 to an estimated $27.3 billion. The decline followed annual accumulations ranging from about $1 billion to nearly $6 billion from 1939 through 1942. The proportion of total inventories in producers’ hands has risen stead ily over the past four years, reflecting princi pally increases in raw material stocks and goods in process at war plants, consistent with the unprecedented expansion in shipments of fin ished munitions. Total stocks at manufacturing plants have expanded almost without interruption since the outbreak of war in 1939. The rate of growth reported last year, however, was much less than in earlier periods. The greater stability of pro ducers’ inventories during 1943 was attribut able in large part to the leveling off in produc tion and the fact that material needs were more nearly balanced with available supplies through smoother operation of the Controlled Materials Plan. In addition, there has occurred a shift in the type of inventories carried by manufacturers, with stocks at war plants declining. Metal fab ricating industries, which have been producing the bulk of the munitions, accounted for a con siderable part of the inventory accumulation at manufacturing plants from 1939 until 1943. The total holdings of these producers, however, began to level off about the middle of last year, and subsequently declined through February 1944. According to the Department of Com merce, the greatest reduction was in the value of goods in process, which declined steadily after March 1943. Inventories of raw mate rials continued to increase during the first six months of 1943, but thereafter showed some decline. The value of finished goods held by this group of industries has fluctuated narrowly over the entire period of the war. Continued on pane 8 Page One The Economy of The Third Federal Reserve District An Inventory of the Population—1940 The Second World War has imposed changes upon the economy of the Third Federal Reserve District that are best approached by a study of its population. Population embodies the most important resource — the labor force — those employed or seeking employment in the produc tion of goods and services for the satisfaction of human wants, both material and spiritual. The labor force is dynamic. Changes in its location, composition, size, and occupational status are readily initiated by economic, polit ical, and social developments. The ever shifting labor force is like a gauge that records eco nomic activity. To understand the full signifi cance of the changes in the district’s labor force which have ocurred during the war period, it is necessary to take an inventory of its popula tion as of the last pre-war year, 1940. This inventory should answer the following ques tions: Where did the people live? Who were the people living in the district? How many were gainfully employed? and, How did the employed earn their living? Where the People Lived The number of people living in any given area depends upon two things: first, the ex istence of local resources and, second, the op portunities created by man himself. Where economic activity is confined essentially to ag riculture, the number of people that the land can support on a high standard of living is rather limited. Population density is usually higher where mineral resources are found, but the number of people engaged in mineral ex traction varies with the richness and extent of the deposits. The greatest clusters of people are found where manufacturing is the predomi nant activity. Land and, in many instances, local raw materials play only a minor role in manu facturing in contrast to the large amount of labor required for this kind of production. An average population density of 210 per sons per square mile for the district, in contrast to 44 for the United States, is indicative of the high degree of industrialization and urbaniza tion which the district has attained. A glance at the map of population, however, reveals that Page Two this over-all average is by no means the whole story. Population is highly concentrated in the eastern section of the district and is very sparsely distributed over the northern and western parts. Actually the range is from a low of 14 persons per square mile in Pike County to a high of 14,306 in Philadelphia County. This extremely wide range reflects vast differences in natural resources and eco nomic development. Philadelphia, with its tremendous concen tration of manufacturing and allied activities, is in a class by itself in respect to population density. In three of the neighboring counties— Montgomery, Delaware, and Camden—popula tion density is also exceedingly high—between 500 and 2,000 persons per square mile. As well as swelling the labor force in Philadelphia, each of these counties is highly industrialized in its own right. Three other eastern counties, where eco nomic activity requiring a large labor force has developed, have an equally high population density. These are Mercer (New Jersey) by reason of Trenton with its strategic location and heavy industries; Lehigh, because of tex tiles and metal products made in the Allentown-Bethlehem area; and Lackawanna, where population has been drawn in the past by the existence of anthracite deposits and is now also utilized in the silk and rayon factories and rail road shops of Scranton. The counties having a population density ranging from 150 to 499 per square mile may be said to make up the backbone of the district, both geographically and economically. They form a virtually solid block near the center of the district—with branches at the eastern and western ends—and present a good cross-section of its economic life. Here the three primary industries—manufacturing, mining, and agri culture—are well represented. The lower tiers of counties in this group have a topography that is generally flat or gently rolling, with ex ceptionally rich soil. Flourishing farms are in tensively cultivated, producing crops that re quire considerable labor—tobacco, corn, mush rooms, and a variety of fruits and vegetables. Within the boundaries of the northern counties in this group—Northumberland, Schuylkill, Carbon, and Luzerne—are anthracite coal fields; and in Cambria, at the western edge of the district, bituminous deposits are mined. Interspersed in these agricultural and mining regions is a variety of towns which serve the surrounding areas in the capacity of trading and transportation centers and which are at the same time important centers of manufacturing. These include Lancaster, Reading, and York, noted for their textile and metal products; the steel manufacturing cities of Bethlehem and Johnstown; and Wilmington, where chemical manufacturing predominates. dustries, but agriculture far outstrips the other two in importance. The land is generally not so rich or so flat as that of the “backbone” group and some of it still remains in forests. In the southwestern counties — Franklin, Adams, and Cumberland—apple orchards cover the hillsides, and diversified farming is characteristic of the cluster of counties located on the lowlands of the Susquehanna. Dairy, poultry, truck, and fruit farms are prominent in the southern counties of New Jersey and Delaware. Some industrial development in small urban centers is found in all three of these regions. Clearfield and McKean, the most forested areas of this group, are the min eral counties, producing soft coal and petro leum, respectively. The second lowest population concentration, between 50 and 149 per square mile, is found in the counties on the fringe of this “back bone.” They, too, represent the three basic in The most sparsely inhabited counties, those under 50 persons per square mile, suffer from I_________ :*MeKEAN ' BRADFORD SUSQUEHANNA | lI POTTER __ • WAYNE I ■“ /wYOMING LACKA- SULUVAN WflNNA^ r* pike luzerne rtONROE. Clearfield;;/. CARBON NORTH SrtPTON SNYDER**. v.; --c;; . '"It DAUPHIN CHUYLKILL LEHIGH BERKS EBANON LANCASTER / /‘FRANKLIN X* ADAMS.* /.*..... *.* \.\\>>>YORK POPULATION DENSITY THIRD FEDERAL RESERVE DISTRICT H BS PHILADELPHIA 14,306 PERSONS PER SQUARE MILE. S=2 5Q0- 2 000 PERSONS PER SQUARE MILE. 150-499 PERSONS PER SQUARE MILE. E3 50-1149 PERSONS PER SQUARE MILE. □ UNDER 50 PERSONS PER SQUARE MILE. ;:VW:i-‘Av5 SUSSEX .. Page Three a topography which makes agriculture unat tractive and accessibility to outside markets somewhat difficult. Some are thin-soiled and rocky, others are extremely mountainous, and still others are characterized by sharp ridges and narrow valleys. The whole northern tier, except McKean, is of the first type; rolling hills are put to pasture and hay, with a few small urban centers devoted to the dairying industry. In Pike and Monroe counties the land is almost completely unsuitable for any kind of agriculture but has a picturesque scen ery, upon which a year-round resort industry thrives. Elk, Cameron, and Clinton Counties exhibit the rugged features of the Allegheny Mountains. Most of this area remains forested and its population is clustered in small and widely scattered manufacturing communities. Small, self-sufficing farms are found in the few cleared areas. A somewhat more prosperous farmland, however, is found in the valleys be tween the forested ridges of the southwestern counties—Bedford, Fulton, Huntingdon, Juni ata, Perry, and Centre. Such was the distribution of the district’s population in 1940, but population is always undergoing change. Even in normal times peo ple shift from one place to another in response to such factors as improvements in transporta tion and communication, discovery of new re sources or exhaustion of old ones, the rise of new industries, and social legislation. But war speeds up migration of people because it im poses an entirely different scale of values. Owing to the heavy drain on resources, many peacetime industries must give way to war pro duction; and in the process labor surpluses occur in some areas and shortages in others. These conditions promote abnormal migration. age-sex distribution also shows the potential labor that might be brought into the labor force in a war emergency. The best labor resources are found among those with the health and vigor of youth. The group—and particularly the males—between the ages of 15 and 34 supplies what may be termed the “prime” labor force. Though it is difficult to draw a sharp line of dis tinction, people between the ages of 35 and 64 supply the “secondary” labor force. The age-sex distribution of the district’s pop ulation in 1940 is shown in Figure I. The fig ure has a shape somewhat like a sawed-off dia mond, the bars tapering off in both directions from the largest group which consists of males and females between 15 and 19 years of age and accounts for 9.5 per cent of the total popu lation. Half of the population was over 29 years of age and there were about as many peo ple 55 and over as 9 and under. Compared with the United States, the district’s population was somewhat “older”—proportionately more peo ple in the upper age groups and less in the younger age groups. The age distribution of the district’s popula tion shows the effect of declining birth and death rates. This is revealed by the narrow base of the figure and the gradual taper of the bars above the 15-19 age group. If birth and death rates continue to decline, the groups from which the prime labor force is drawn eventually will be smaller both relatively and absolutely, while the groups supplying the secondary labor force will increase in numbers. Ultimately this will require some adjustment of labor stand- AGE AND SEX DISTRIBUTION OF POPULATION-1940 THIRD FEDERAL RESERVE DISTRICT The Composition of the Population MALE FEMALE The composition of the population in the Third District is just as important as its geographical distribution with respect to the adjustments re quired for war production. Population charac teristics, such as age and sex, have a direct in fluence upon the amount of productive labor that the district can contribute in a war emer gency. The age-sex distribution of the district’s pop ulation is perhaps the most important of its char acteristics in the light of the number of people actually in the labor force, that is, those seeking employment as well as those employed. The Page Four IL 400 3SO 300 250 200 ISO 100 50 0 SO 100 ISO 200 250 300 350 400 ---------- -------------------------------------------------THOUSANDS---------------------------------------- - ----- ► ards but it has little effect upon the immediate future. THIRD FEDERAL RESERVE DISTRICT Employment and Unemployment In 1940, over 3 million men and women, or 42 per cent of the total population of the dis trict, were in the labor force—those employed or seeking employment. This was only slightly above the proportion of the country’s popula tion (40 per cent) in the labor force. Men con stituted approximately 75 per cent of the labor force in both the district and the United States. imwKmm UNEMPLOYMENT IN 1940 EXPRESSED AS A PERCENTAGE OF THE LABOR FORCE TABLE 1 DISTRICT LABOR FORCE 1940 Thou sands Per cent of male labor force Thou sands Per cent of female labor force Thou sands Per cent of total labor force Employed. . . Unemployed. 1,937 444 81 19 716 37 84 16 2,653 580 82 18 Total........... 2,381 100 753 100 3,233 100 As Table 1 shows, 18 per cent of the district’s labor force was unemployed in 1940. This is in contrast with 14 per cent of unemployment in the country’s labor force. Some of the un employed were “between” jobs and therefore their unemployment was of short duration. Oth ers had just entered the labor market as they attained working age or finished their educa tion. The majority, however, had been unem ployed for some time because of the scarcity of jobs. A considerable number of the unem ployed were engaged on Federal work relief programs such as the W. P. A., N. Y. A., and the C. C. C. The relative severity of unemployment throughout the district in 1940 is portrayed by the accompanying map. The anthracite coun ties had the highest percentages of unemploy ment, and large numbers of people were ad versely affected because of the heavy concentra tion of population in that area. Although the percentage of unemployment was relatively high in the western agricultural and mining counties, the absolute number of people without jobs was much greater in the southeastern industrial counties—Berks, Camden, Delaware, and Phila delphia. Unemployment in the district, as in the United States, was more prevalent among males than females. Conditions in the anthracite industry, 20.17. OR OVER .. 13.1% TO 20 0 „ I0 t% TO . 10.0% OR LESS 13.0 T otal Fensale Male UNEMPLOYED a large employer of male labor, were partly re sponsible for the relatively greater unemploy ment among the male labor force. In the five principal anthracite counties, 32 per of the male labor force was unemployed and this accounted for 25 per cent of the total male unemployment in the district. Furthermore, females enter and leave the labor force more readily than males. The labor force is flexible and dynamic. It derives its elasticity from those people who, with changing economic conditions, enter and leave the labor market. The 3 million people in the labor force in 1940 did not represent the full labor potential of the district in that year. Theoretically, the total labor resources of the district consisted of all people old enough to work. This would mean about 5*4 million peo ple. Actually the labor resources were much smaller. A large number of women are unable to enter the labor market because of their home responsibilities. Many of the people 65 years of age and over have retired. There are also those who cannot perform useful work because they are confined to institutions or because they have physical or mental deficiencies. Finally, students in professional training cannot be counted part of the normal labor resources. However, between the theoretical labor re sources and the actual labor force there is a sub stantial number of people who can be drawn upon in a war emergency. How the Employed Earned Their Living It was pointed out above that 42 per cent of the district’s population was in the labor force Page Five TABLE 2 INDUSTRIAL DISTRIBUTION OF EMPLOYED PERSONS IN THE THIRD DISTRICT —1940 Not reported................................................................... u. s. % 634 272 88 165 140 133 125 17 52 73 57 47 46 31 9 15 2 31 32.7 14.0 4.5 8.5 7.2 6.9 6.5 .9 2.7 3.8 3.0 2.4 2.4 1.6 .5 .7 .1 1.6 24.2 13.2 4.3 23.2 6.2 2.7 5.9 .8 2.6 4.2 3.0 3.0 2.3 1.4 .5 .9 .3 1.3 1,937 100.0 100.0 in 1940. How the employed were distributed among the various industries and occupations is of prime importance—first, to indicate the types of industrial skills of the population and, secondly, to suggest sources within the employed labor force from which labor may be drawn to aid in the adjustment of the economy to the war period. The industrial distribution of the district’s population in 1940 is compared with that for the United States as a whole in Table 2. This table reveals clearly the relative composition of the two economies, the comparison serving to emphasize the outstanding features of the dis trict. In both the district and the United States, manufacturing far outstripped all other indus trial groups in importance but by a much wider margin in the district. Agriculture was a close second to manufacturing in the country as a whole but held fourth place in the district, em ploying only 6 per cent of the employed work ers in contrast to 19 per cent in the United States. Mining, however, was considerably more impor tant in the district than in the United States. In the district it occupied sixth place, with 5 per cent of the employed population in contrast to twelfth place and 2 per cent in the country. In view of the relatively great industrializa tion and heavily concentrated population in this district, it is not surprising to find retail trade ranking next to manufacturing as an employer of labor. However, the place occupied by retail trade in the national economy is not much in ferior to its position in the district, which em phasizes the importance of distribution in the organization of our economic life. Professional Page Six Total Female Male Dist. % Thous. Dist. % u. s. % 33.2 14.4 7.4 6.4 5.4 5.1 4.8 4.7 3.5 3.5 3.1 2.0 1.9 1.3 .7 .7 23.5 14.0 7.3 18.5 4.8 2.0 4.6 5.2 3.7 3.9 3.2 2.7 1.9 1.2 .9 2.1 880 382 196 170 145 134 128 125 94 92 81 54 50 34 20 18 2 49 1.9 1.5 100.0 2,653 100.0 100.0 Dist. % U. s. % 247 110 108 5 4 1 2 108 42 19 23 7 4 4 11 3 34.5 15.4 15.1 .7 .6 .1 .3 15.1 5.8 2.6 3.3 1.0 .5 .5 1.5 .5 20.9 16.6 16.6 4.4 .7 .1 .3 18.5 7.3 3.0 4.1 1.6 .7 .5 1.9 .7 18 2.5 716 100.0 Thous. Thous. .9 .2 I and related services, including educational (by far the most important component in the dis trict), medical, legal, religious, and charitable services among others, ranked third in the dis trict, with about half as many workers as in retail trade. Three other industries, also complementary to an industrialized economy, and also more im portant in the district than in the United States, were transportation, construction, and utilities, in fifth, seventh, and fourteenth places respec tively. Railroads, including railroad repair shops and railway express, were the most im portant components of the district’s transporta tion industry. The proportion of people employed in domes tic service is smaller in this district than in the country. Just the opposite might be expected, owing to the age and wealth of this district. However, the comparatively greater employ ment opportunities afforded by manufacturing in this district may well be responsible for this situation. Wholesale trade also is relatively less impor tant in the industrial structure of this district than in that of the country. This is accounted for, in part, by the prominence of clothing and other industries in which wholesalers are rela tively unimportant. The breakdown of employment in these indus tries by sex, in Table 2, indicates the employ ment opportunities existing in these various in dustries for men and women. Manufacturing employed both more males and more females ' than any other industrial group. In the district, manufacturing employed one-third of the men and one-third of the women; in the United States, manufacturing employed one-fourth of the men and one-fifth of the women. The larger proportion of female workers in the district is due primarily to the predominance of textile and clothing manufacturing, which are particularly adapted to female labor. L * , t Retail trade, another large employer of both men and women, gave employment to a slightly larger proportion of women. Domestic service and professional and related services (educa tion and medical services predominating in the latter group) were on a par with retail trade. Together with manufacturing, these industries employed 80 per cent of the district’s women workers. Agriculture, transportation, mining, and construction employed primarily men and, together with manufacturing and retail trade, accounted for about three-quarters of the total district male employment. The distribution of this same segment of the district’s population among the various occupa tions, indicating the type of work actually per formed, is shown in Table 8. Professional and semi-professional workers include those whose occupations require extensive preliminary train ing. They are the highest types of specialists and for this reason are not apt to shift from one occupational group to another. The district and the United States are approximately equal as to the proportion of total employment in this group. In both areas relatively more of the female workers than of male workers are em ployed in this segment, owing to the inclusion of teachers and nurses. Farm owners and tenants and farm managers comprise the group responsible for the organi zation and general operation of the farm. As might be expected, they are a relatively smaller group in the district than in the United States. Of all those engaged in agriculture, this group represents only 56 per cent in contrast with 61 in the United States. The occupational group—proprietors, man agers, and officials—performing similar organi zational functions in enterprises other than farms, is fourth in importance in the district, with almost 8 per cent of all employed workers. Clerical, sales, and kindred workers—essen tially the “white collar” group—account for 26 per cent of the district’s female employment and 14 per cent of the male. From the standpoint of total employment this group ranks second. The members of this group are particularly apt to shift to other occupational groups as their skills often are readily acquired and as readily abandoned when better opportunities beckon. The relative importance of this group in the dis trict reflects the position of retail trade and manufacturing, shown in Table 2. Craftsmen, foremen, and kindred workers, the group which includes the most highly skilled of the manufacturing, construction, and trans portation industries, is of greater importance locally than nationally, primarily owing to the prominence of manufacturing in this district. It is second as an occupation for employed males but of only minor importance for females. Over a quarter of the employed workers in the district in 1940 were “operatives and kin- TABLE 3 OCCUPATIONAL DISTRIBUTION OF EMPLOYED PERSONS IN THE THIRD DISTRICT —1940 Dist. % Total Female Male Thous. u. s. % Thous. Dist. % u.s.% Professional workers..................................................... Semi-professional workers........................................... Farmers and farm managers...................................... Proprietors, managers, and officials except farm. . Gleric^d, sales, and kindred workers........................ Craftsmen, foremen, and kindred workers............ Operatives and kindred workers............................... Domestic service workers............................................ Service workers except domestic.............................. Farm laborers (wage) and f oremen.......................... Farm laborers (unpaid family workers)................. Laborers except farm.................................................... Not reported.................................................................... 89 23 91 186 272 345 507 7 124 53 16 207 16 4.6 1.2 4.7 9.6 14.0 17.8 26.2 .4 6.4 2.8 .8 10.7 .8 4.4 1.1 14.7 9.8 12.8 14.5 18.2 .4 6.5 5.4 2.8 8.7 .7 77 6 2 22 188 9 217 104 71 1 2 7 9 10.8 3.0 26.3 1.2 30.4 14.5 10.0 .1 .2 1.0 1.3 12.3 .9 1.4 3.8 28.3 1.0 18.4 17.7 11 3 .9 2.0 .9 1.2 Total............................. 1,937 100.0 100.0 716 100.0 100.0 I .9 .3 Thous. Dist. % u. s. % 166 30 94 208 460 354 725 111 196 54 17 214 25 6.3 1.1 3.5 7.8 17.3 13.3 27.4 4.2 7.4 2.0 .7 8.1 .9 6.4 1.0 11.4 8.3 16.6 11.2 18.3 4.7 7.7 4.3 2.6 6.8 .8 2,653 100.0 100.0 Page Seven dred workers,” in contrast to 18 per cent in the United States as a whole. The highly industrial ized nature of the district economy was further reflected in this group since operatives in manu facturing, mining, and transportation far out numbered all others in the district. Members of this group with further training may move upward into the higher wage earning classes. The occupational groups listed below “oper atives, etc.,” are, in general, those requiring less skill and training. This break is further borne out by a sharp drop in rates of pay which comes at this point. Twenty-three per cent of the dis trict’s employed workers are found in these groups, in contrast to 27 per cent for the United States as a whole. Female workers in the dis trict tended to concentrate in the domestic or other service worker groups, and males were most numerous among the “labor other than farm” group. Farm laborers, both wage and unpaid, were relatively unimportant in the dis trict. The distribution of the district’s employed population among these industries and occupa tions denotes an economy which may be con verted rapidly to war production. A large part of the working force is accustomed to industrial life and is adept at handling industrial tools. The fact that such a large proportion of the women workers were engaged in manufacturing in 1940 is particularly significant for the war pe riod since they were well qualified to replace the men leaving essential industries for the armed services. Since many of these women were employed in textile and clothing manufac turing, industries which are not apt to be over loaded with large war orders, the possibility of transfer is even more likely. Two other indus tries in the district suggest themselves as a source of additional labor for the war industries —retail trade and domestic service. Both are large employers of female labor, which may easily be attracted by high wartime wages in manufacturing. What this district can contribute to the war effort depends in large part upon the people who live here. The pre-war inventory of its population reveals many favorable characteristics of its people. The district has a high density of population with concentration especially heavy in the east. Compared with the United States, the district had a slightly older popula tion and a larger proportion of its adults, both men and women, were in the work force. Also a larger percentage of those employed were trained industrial workers. The unemployed, proportionately greater in the district than in the United States, were an immediate source of additional labor for expansion of war produc tion. Business and Banking Continued from page 1 Distributors’ inventories reached a wartime peak during 1942, at the end of the first quarter in the case of wholesalers, and about mid-year at retail stores. In wholesale lines, the decline which followed was sharp for about six months, reflecting the depletion of stocks of consumers’ durable goods, no longer replaceable owing to the conversion of productive facilities for the manufacture of war goods. Since the latter part of 1942 the value of wholesale inventories has fluctuated around the lowest levels of the war. ing the second and third quarters of 1942 retailers’ stocks exceeded by about one-fourth consumer needs suggested by the inventorysales pattern prevailing from 1939 through 1941. Thereafter supplies declined rapidly in relation to sales, and by the final quarter of 1943 the situation had become reversed to the extent that stocks were nearly one-sixth less than the requirements indicated by the pre Pearl Harbor relationship. The value of retail inventories rose somewhat in the early months this year, reflecting chiefly accumulations at department stores. Retail stocks over the war years have shown the most pronounced changes, ranging from an increase of approximately $2 billion in the twelve months ended June 1942 to a liquidation of nearly the same magnitude in the succeeding year. Inventories also have fluctuated widely in relation to the dollar volume of sales. Dur Industry and trade. Industrial activity in the Philadelphia Federal Reserve District slackened somewhat from February to March but remained above the level of a year earlier. The decrease in the month reflected a slightly lower level of factory operations, and a sharp reduction in the Page Eight f j . 1 k k y t *r output of coal, principally at anthracite mines. The production of crude petroleum increased about in line with seasonal expectation. Total output of factory products and minerals in the three months ended March closely approximated the peak reached in the preceding quarter and was 3 per cent greater than a year ago. Factory employment in Pennsylvania has con tinued to fluctuate narrowly around 1% mil lion, and wage payments have remained near a record level of $55 million a week. The number employed in March was slightly less than a month and year ago, while payrolls were about the same as in February and 8 per cent greater than in 1943. Increases over the twelve months in wage disbursements occurred in most major lines. Total employee-hours worked in March did not show significant changes from the pre ceding month or a year ago. The weekly income of wage earners in re porting Pennsylvania factories continued to ad vance in March, averaging $47.17, as against $46.97 in February and $43.29 a year earlier; weekly earnings were about 75 per cent above the average for June 1940, when the defense program was initiated. The increase in the month reflected a further rise in average hourly earnings to nearly $1.05. Average working time per employee remained at 45*4 hours. The persistence of a tight manpower situa tion at both anthracite and bituminous coal mines and the small reserves in producers’ stor age yards suggest difficulty in meeting over-all fuel requirements later this year. Output of an thracite in the first quarter was about the same as a year earlier, although an unusually large volume was mined in February, when collieries were operated seven days a week. With a re turn to the six-day work-week in March, pro duction declined sharply and was less than in the same month last year. The tonnage of bitu minous coal mined in Pennsylvania was some what larger in the first three months this year than last year. Estimated requirements for an thracite in 1944 have been set at 66 million tons, nearly 6 million more than actual produc tion last year. The nation’s need for bituminous coal has been estimated at 620 million tons, as against the 589 million mined in 1943. Reductions from year ago levels continue in nearly all fields of building construction; ac PR0DUCTI0N AND PRICES PERCENT PRODUCTION * WHOLESALE COMMODITY PRICES US 'COST 0E LIVING IN PHILADELPHIA 75 1 » ADJ. fog, 1939 SEASONAL VARIATION 1940 1941 1942 1943 1944 cording to the War Production Board, the value of work completed in 1944 may show a decline of about one-half from the preceding twelve months. In this district, the value of new con tracts awarded increased in March from the exceptionally low level reached in February, but showed a decline of about 70 per cent from a year ago. Placements in the three months ended March were the smallest for the period since 1935, and little more than one-third the dollar volume reported a year ago. Farming operations in this district, as in many parts of the country, have been delayed by the excessive rains of recent weeks; the reports from local crop correspondents indicate that plowing and seeding are from ten days to two weeks behind schedule. Growing conditions for win ter grains were generally favorable during March, usually a critical month for these crops, and the outlook for both wheat and rye has im proved considerably. Fruit prospects in the commercial growing areas of Pennsylvania are said to be more encouraging than a year ago, as the trees suffered little winter injury. The feed grain situation is considerably tighter than last spring. Department of Agriculture re ports for the country as a whole indicate that the consumption of corn in the three months ended March was the highest on record, while the use of wheat for feeding purposes was ex ceeded only once in records covering many years. Farm stocks of the principal feed grains in this district also are unusually small, reflecting below average production last year and in creased numbers of livestuck and poultry. Page Nine Distribution of commodities by rail has con tinued heavy, with total freight-car loadings in this section during the first quarter 7 per cent greater than in the same period last year. In creases were reported in all major classifications of freight except ore. The sharpest gain was in livestock shipments. Business at wholesale decreased somewhat from February to March as retail merchants had largely completed their purchases for an early Easter season. The value of sales in seven reporting lines, however, was 6 per cent larger than in 1948 and in the first quarter was oneeighth greater this year than last. Wholesale inventories increased in March and at the end of the month dollar volume was up 8 per cent from a year earlier, owing chiefly to substan tially larger holdings of dry goods and groceries. The value of retail sales by reporting depart ment, apparel, and shoe stores in this district expanded more than seasonally in March, and at furniture stores dollar volume was over onefourth greater than in the preceding month. Al lowing for the variation in the date of Easter, sales at department stores were 15 per cent larger in March this year than last. Heavy buying of goods subject to higher taxes be ginning April 1 was a contributory cause. In creases over 1948 in sales also were reported by apparel and shoe stores, but a small decline was shown at furniture stores. First-quarter sales by department and women’s apparel stores showed gains of 9 per cent over a year earlier, while declines were reported by establishments specializing in men’s apparel and shoes. Banking conditions. War expenditures of the Federal Government reached a record high of $7.9 billion in March. Month by month, total disbursements have been sharply exceeding tax revenues; and the huge volumes of funds added to the Treasury working balance by the war loan drives are drawn down rapidly. Plans now are under way for the Fifth Drive, scheduled to start June 12 and continue through July 8. The goal of $16 billion set for sales to investors other than commercial banks includes $6 billion for sales to individuals, who pur chased $5.3 billion in each of the two preced ing drives. Special emphasis will be placed on sales to individuals. Seeking to meet the needs of every investor, the Treasury has added 1% per cent notes of 1947 to the list of securities which will be made available during the coming drive. This list also includes 2 per cent bonds of 1952-54, 2y% per cent bonds of 1965-70, % per cent certificates, savings notes, and Series E, F and G savings bonds. Entirely apart from the drive, commer cial banks will be given the opportunity to make limited investments in certain issues. Meanwhile funds have been accumulating rapidly in the deposit accounts of bank cus tomers as the Treasury makes heavy disburse ments from its war loan accounts. At reporting member banks in this district deposits of indi viduals and business concerns have increased $106 million to $1,850 million in the period from February 16 following the last drive, to April 19. Balances of states and local governments were up $55 million to $90 million. The accumulation of funds in bank accounts and contin uing large wage and salary payments do not measure the full potentialities for investment in Treasury securities. Currency in the hands of the public has risen sharply; notes of the Federal Reserve Bank of Philadelphia in circu lation have increased $273 million in the past year, much of which is available for the pur chase of Treasury securities. > . Withdrawals from Government balances at reporting banks were somewhat larger than the gains in other deposits during the four weeks ended April 19; nevertheless reserves were in creased somewhat. This was accomplished principally through sales of Treasury obliga tions, holdings of which declined $33 million. Loans at the reporting banks also decreased, largely as a result of repayments on credits ex tended during the drive to purchase or carry Government securities. Heavy payments were made to the Treasury during the latest period and currency demand was moderately active, but a greater volume of funds came into the banks through sharp gains in interdistrict transactions and the use of additional Reserve Bank credit; the result was a moderate increase in the combined reserves of all member banks. Latest reports show that Philadelphia banks as a whole continue to keep fully invested, with reserves only about 3 per cent larger than requirements. Excess reserves of the country banks in the district have been larger than those of the city banks, relatively as well as absolutely. „ ' Page Ten 1 BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Not adjusted Adjusted for seasonal variation Industry, Trade and Service Per cent change Indexes: 1923-5 =100 Mar. Feb. 1944 1944 INDUSTRIAL PRODUCTION 150p 153 MANUFACTURING.............. 154p 157 243p 251 93p 92 Metal products.......... ......... 184 185 69p 67 Textile products..................... Transportation equipment.. 648 682 r Food products......................... 116p 115 106 Tobacco and products.......... 102 35p 37 Building materials.................. Chemicals and products.... 154p 165 99p 97 Leather and products........... 94 95 Individual lines 90 104 r 130 136 r 85 87 63p 61 Woolens and worsteds......... 46 45 Cotton products..................... 53p 53 Carpets and rugs.................... 71 73 136 136 22p 27 53 56 33 33 Lumber and products........... 133 61 140p 101 83 Printing and publishing........ 96 120 80p Leather, goat and kid........... 96 Coke, by-product................... 154p 79 COAL MINING........................ 77 99 Bituminous............................... CRUDE OIL.............................. 376 ELEC. POWER—OUTPUT.. 420 443 Sales to industries.................. 351 BUILDING CONTRACTS 34 TOTAL AWARDS!................. 22 40 Nonresidentialt...................... Public works and utilitiesf. . 47 Slaughtering, meat packing. Canning and preserving----- Mar. 1944 from Mo. ago Year ago 1944 from 3 mos. 1943 147 150 243 r 89 r 177 r 70 623 r 98 r 122 50 149r 107 r 91 - 2 - 2 3 + 1 - 1 + 2 - 5 +1 - 4 - 6 - 7 + 2 - 1 + + + + — + + — — + — 4- 2 3 0 4 4 2 4 17 17 30 4 7 4 + 3 + 4 + 2 + 4 + 7 0 + s + 17 - 18 - 28 + 9 - 5 + 4 91 129 83 65 56 56 79 149 69 68 29 — + + — — — — — — — + + + -|+ — + + — — + — — — — + + + 1 1 4 2 18 7 10 8 68 21 14 11* 39 52 21 18 1 4 3 13 9 1 5 5 3 10 7 10 11 65 — 72 — 59 64 Mar. 127 63 138 106 85 97 116 79 98 162 91r 90r 97 373 411 429 359 96 40 115r 123 82 92 123 92 r 88 155 83 81 101 416 393 404 316 -14 - 4 + 2 + 4 + 1 0 - 3 0 -20 - 4 0 0* + 5 - 3 +1 - 5 - 2 - 1 + 3 0 - 2 - 5 -13 -14 + 2 + 1 + 2 + 3 - 2 35 35 47 26 96 79 99 128 - 1 -38 -14 +81 * Unadjusted for seasonal variation. t 3-month moving daily average centered at 3rd month. Mar. Feb. Mar. 1944 1944 1943 151p 153 156p 157 149 152 184 71p 678 113p 94 32p 155p 102p 96 186 r 72 676 r 112 89 34 165 103 95 178r 72 652 r 95r 113 44 150r llOr 93r + + + + + + + — + + + + + + + 0 4 6 0 20 0 8 7 61 19 14 11* 38 26 20 16 2 5 5 5 6 4 7 1 3 11 9 11 12 103 140 90 62p 49 53p 74 148 17p 52 31 123 127 93 127p 93 85 98 127 79p 98 160p 80 77 101 384 428 439 333 107 r 142 r 90 63 48 54 76 149 19 54 31 123 128 81 128 89 85 97 122 86 96 170 92 r 90r 106 373 436 464 356 104 138 86 63 59 57 83 162 53 66r 27 111 92 61 103 r 113 84 94 131 91r 90 162 83 81 104r 425 401 400 300 - 73 58 69 87 30 17 40 42 34 25 47 31 84 60 99 117 + + - Philadelphia.... Wilkes-Barre---Williamsport.... Wilmington........ York..................... Fac tory payi oils Fact ory employfment Feb. 1944 Mar. 1943 Debits Feb. 1944 Mar. 1943 Feb. 1944 Mar. 1943 Feb. 1944 Mar. 1943 + 7 + 23 +17 + 69 + 4 +293 + 7 - 86 +17 - 48 + 9 - 76 + 4 + 17 +36 - 92 + 56 + 3 - 57 +130 + 8 + 28 - 4 +277 - 26 + 7 +680 - 85 - 7 - 82 - 5 - 9 - 33 - 70 + 56 - 79 +135 +28 +46 +32 +22 +28 +34 +25 +42 +19 +46 +18 +25 +13 +24 +22 +19 +15 +34 +24 +35 +28 +29 +36 +28 + 3 +12 +15 + 6 + 7 +11 + 8 +16 -15 + 6 + 8 +27 + 2 +18 +18 + 7 +10 +18 + 9 + 6 +17 + 8 +12 - 7 + 9 +13 5 5 1 7 6 0 - 4 +21 - 3 + 5 0 - 5 - 1 + 1 0 +1 0 - 1 - 2 - 2 - 5 + 3 0 - 1 - 3 * Area not restricted to the corporate limits of cities given here. - 1 - 1 - 8 -11 - 5 -22 0 - 2 + 3 - 6 + 3 - 6 + 6 334 - 1 501 0 100 -16 385 - 2 105 + 4 262 - 1 233 - 6 139 0 154 + 3 0 147 163 - 1 174 + 2 163 + 7 + 7 + 8 + 7 + 7 + 6 -14 +15 + 4 + 6 + 1 +12 + 7 +15 Pa yrolls* Em]ployment* Per ent Per ent Mar. chang jfrom Mar. chang*)from 1944 1944 index Feb. Mar. index Feb. Mar. 1944 1943 1944 1943 Indexes: 1923-5 =100 TOTAL..................................... Iron, steel and products.... Nouferrous metal products. Transportation equipment. 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......... 121 130 199 174 82 75 109 122 87 50 119 76 102 94 - 1 - 1 +1 - 1 0 0 0 0 - 2 0 - 2 - 1 - 1 0 - 0 + 4 + 4 - 7 - 6 - 9 + 9 - 4 - 3 - 2 -15 + 2 + 3 1 205 279 431 312 125 115 172 183 130 79 211 117 149 131 0 - 2 - 1 0 0 0 +1 0 - 1 - 1 - 1 0 +1 +1 + a + 7 +14 +13 + 2 + 2 + 2 +19 + 7 + 8 + 8 - 8 + 8 + 9 56 152 91 - 2 0 - 7 -14 +23 +24 81 309 162 + 2 0 -12 - 3 +43 +35 * Figures from 2880 plants. and per cent change from year ago Retail Sa] es 0 - 1 - 1 - 1 0 - 2 +1 0 + 2 0 - 2 +1 + 5 Manufacturing Factory Workers Averages Mar. 1943 + + GENERAL INDEX........... 134 Manufacturing...................... 188 Anthracite mining............... 50 Bituminous coal mining---80 Building and construction. 40 Quar. and nonmet. mining.. 81 Crude petroleum prod.......... 134 Public utilities...................... 97 Retail trade........................... 112 Wholesale trade.................... 105 Hotels...................................... 99 Laundries............................... 103 Dyeing and cleaning............ 100 Hours and Wages Feb. 1944 - 2 0 0 - 1 — 1 - 1 0 0 0 - 8 Builcling pernlits val tie Per cept Per cent Mar. chang from Mar. clmng from 1944 1944 index Feb. Mar. index Feb. Mar. 1944 1943 1944 1943 Indexes: 1932 =100 p—Preliminary, r—Revised. Local Business Conditions* Percentage change— March 1944 from month and year ago I*ay rolls Em ploy ment TOTAL............................. Iron, steel and prods... Nonfer. metal prods.. . Transportation equip.. Textiles and clothing.. Textiles........................ Clothing....................... Food products.............. Stone, clay and glass. . Lumber products......... Chemicals and prods.. Leather and prods.. . . Paper and printing. . . Printing........................ Others: Cigars and tobacco . . Rubber tires, goods.. Musical instruments. Weekly working time* Hou rly earni ngs* Week K eamin gst Aver age Gh’ge Aver Gh’ge Aver Ch’ge hours age age 2 $1 .041 + 7 $47.17 3 1.097 + 5 51.34 .983 + 8 45.37 3 1 1.204 + 8 57.84 .754 + 8 30.50 1 .770 + 7 31.94 1 1 .713 +11 27.50 .806 + 8 35.41 1 .910 + 6 37.15 5 .739 + 8 32.63 2 4 1.035 + 6 47.52 .736 + 6 30.68 2 .891 + 4 39.28 3 1 1.041 + 5 42.69 45.5 46.8 46.2 47.7 40.5 41.5 38.1 43.6 41.0 44.5 45.9 41.6 43.8 40.9 + + + + + + + + + + + + 42.7 44.4 48.0 + 3 + 4 0 * Figures from 2730 plants. .618 + 9 1.014 +12 .966 + 9 26.39 45.02 46 36 + 9 + 7 +11 + 8 +10 + 9 +11 + 9 +11 +10 +10 + 9 + 6 + 5 +12 +16 + 9 t Figures from 2880 plants. Page Eleven Distribution and Prices Per cent change Wholesale trade Unadjusted for seasonal variation Adjusted for seasonal variation March 1944 1944 from from 3 Month Year mos. ago ago 1943 Sales Total of qll lines..................... - 2 Dry goods............................... Electrical supplies............... Groceries................................. Hardware............................... Jewelry................................... Paper....................................... 1 9 2 2 3 6 + 6 6 - 6 + 5 + 9 + 8 +18 +16 + 5 +19 - 6 — 2 + 5 + 8 +18 -15 +15 + 8 + + + Inventories Percent change from Mar. 1944 Month Year Aug. 1939 ago ago Basic commodities (Aug. 1939=100),... Wholesale (1926=100)................ Farm............................. Food.............................. Other............................ Living costs (1935-1939=100)... . United States............. Philadelphia............... Food........................... Clothing.................... Rent............................ Fuels........................... Housefurnishings. . . Other.......................... 181 +1 + 2 + 81 104 124 105 98 0 + i 0 0 0 + 1 - 3 + 2 + 38 +103 + 56 + 22 124 123 132 136 107 110 126 117 0 0 - 1 + 2 0 0 0 0 + + + + + + + + + + + 1 1 1 7 0 + 3 + 2 Mar. Feb. Mar. 1944 1944 1943 RETAIL TRADE Sales Department stores—District......... Philadelphia. Women's apparel.............................. Men’s apparel.................................... Shoe...................................................... Furniture............................................. 177 176 178 162p 147 26 25 42 37 4 14 25 16 Source: U. S. Bureau of Labor Statistics. FREIGHT-CAR LOADINGS Total.................................................. Merchandise and miscellaneous. Merchandise—l.c.l........................ Coal................................... ............... Ore.................................................... Coke................................................. Forest products............................ Grain and products...................... Livestock......................................... MISCELLANEOUS Life insurance sales. . Business liquidations Number....................... Amount of liabilities Check payments......... * Computed from unadjusted data. Mar. 1944 1944 Mar Feb. Mar. frc>m from 1944 1944 1943 Month Year 3 mos. 1943 ago ago 168 163 173 133 135 153r 156 r 147 156 138 + 5 + 8 + 3 +22 + 9 +26* +15 +13 +21 + 4 + 7 _ 2* 149p 151 149 153 172 197 80 87 130 128 145r 94 - 1 - 3 -13 - 8 - 5* +15 +16 +19 -15 —28* 143 137 89 143 150 220 135 132 153 147 141 90 152 175 201 146 152 154 140 134 87 141 188 215 122 117 104 - 3 - 3 - 1 - 6 -14 + 9 - 8 -13 - 1 + 2 + 2 + 3 + 1 -20 + 3 +10 +12 +47 115 115 99 0 178 i.93 162 - 8 Inventories Department stores—District............. Philadelphia.. . Women’s apparel................................... Shoe........................................................... Furniture................................................. Paper....................................... + 6 -16 Source: U. S. Department of Commerce. Prjces Per cent change Indexes: 1935-1939=100 +12 +14 + 9 +14 + 9 + 9 +24 Not adjusted P—Preliminary. + + + - 9 6 9 7 8 162 160 190 143 150 124 122 124 104 98 135 136 146 126 131 154p 149 153 150r 189 193 90 90 134 132 158r 104 + 7 + 6 + 8 +11 - 5 + 9 + 11 +10 +41 134 132 89 147 66 207 117 125 142 135 129 85 158 66 216 118 134 140 132 129 87 146 83 202 107 112 97 +16 +23 119 124 103 +10 +18 176 187 160 r—Revised. BAN KING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Changes in— Reporting member (000,000’s omitted) April 19, 1944 Assets Commercial loans.................. $ 256 Loans to brokers, etc............ 37 Other loans to carry secur.. . 12 38 Loans to banks.............. .. 8 Other loans............................... 105 Four weeks -$ 6 - 2 - 3 + - 8 5 One year +$ + — + - 15 1 1 6 5 11 3 Total loans............................. $ 456 -$ 8 +$ Government securities.......... $1596 Obligations fully guar’teed. . 32 Other securities...................... 175 —$32 - 1 + i +$376 - 41 - 50 Total investments............... $1803 —$32 +$285 Total loans & investments. . $2259 Reserve with F. R. Bank.... 388 28 Balances with other banks.. 72 Other assets—net................... 59 —$40 + 10 +$288 - 58 — l - 57 5 Liabilities Demand deposits, adjusted.. $1667 1 ime deposits.......................... 177 U. S. Government deposits. . 391 Interbank deposits................. 325 1 15 Capital account...................... 230 Page Twelve + 3 2 +$63 + 8 -102 - 1 + i +$ 84 + 14 + 101 - 46 + 1 + 4 + 9 | Changes Changes in weeks ended— Third Federal Reserve District (Millions of dollars) Mar. 29 April 5 Sources of funds: Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict). . . Treasury operations.................................... +34.7 + 4.3 -66.2 - 0.8 +17.9 + 1.2 -15.3 +32.7 - 4.8 + 1.9 +14.6 + 5.1 +20.5 +69.5 -64.7 -27.2 +18.3 +12.6 +21.6 +25.3 + 3.8 -31.6 + 0.6 - 0.0 + 9.2 +10.0 - 1.1 + 0.2 + + + + 0.1 9.5 2.9 0.1 + 2.7 +18.9 + 0.1 - 0.1 +15.8 + 6.8 + 2.5 + 0.2 -27.2 +18.3 +12.6 +21.6 +25.3 Total..................................................... Uses of funds: Currency demand................................. Member bank reserve deposits................ “Other deposits” at Reserve Bank...................... Other Federal Reserve accounts........................ Total.............................................. Member bank reserves (Daily averages; dollar figures in millions) Held Re quired Phila. banks 1943: Apr. 1-15 .. 1944: Mar. 1-15 .. Mar. 16-31.. Apr. 1-15. . $425 350 356 352 $373 340 346 343 $52 10 10 9 Country banks 1943: Apr. 1-15.. 1944: Mar. 1-15 .. Mur. 16-31. . Apr. 1-15. . 266 266 271 265 187 211 216 218 79 55 55 47 Ex cess Ratio of excess to re quired 14% 3 3 3 42 26 25 21 Federal Reserve Bank of Phila. (Dollar figures in millions) April 12 April 19 weeks Changes in April 19, 1944 Four weeks Disc’ts & advances.. $ 18 Industrial loans.... 5.5 U. S. securities......... 868.3 -$ 0.0 + 1.6 + 79.5 +$ 1.5 + 1.0 + 462.4 $875.6 Fed. Reserve notes.. 1193.6 Member bk. deposits 635.0 U. S. general account 9.6 Foreign deposits... . 132.0 Othej: deposits......... 8.7 1109.7 56.1% +$81.1 + 16.2 + 6.8 - 28.9 - 3.0 + 2.5 - 91.4 - 4.4% +$464.9 + 272.6 - 70.2 - 21.2 + 56.0 9.3 - 242.0 - 21.1% One year
@FedFRASER