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MAY 1952 T H E BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA STEEL ON THE DELAWARE When steel flows from the fiery furnaces at Fairless, the Delaware valley’s steel capacity will be increased by one-third. More steel is the basis for a great forward march of industrial expansion in the valley. Scores of industrial concerns are enlarging their capacity and many new plants are coming into the area. Faced with diminishing reserves of high-grade domestic iron ores, other steel concerns are considering the Delaware valley region which offers accessibility to foreign ores and access to large eastern steel-consuming markets. CURRENT TRENDS 4 Business trends in the Third District were conflicting during March. Industrial production was stable and construction contract awards declined. Business borrowing increased in March, but declined in April. Additional copies of this issue are available upon request to the Department of Research, Federal Reserve Bank of Philadelphia, Philadelphia 1, Pa. THE BUSINESS REVIEW STEEL ON THE DELAWARE Twenty-five miles up the river from Philadelphia, William Penn built his country home—Pennsbury Manor. Facing the river, the spacious and substantial home is sur rounded by flower gardens, an herb garden, an orchard, and a vineyard. He erected separate buildings to serve as an office,, an ice house, a smoke house for curing meat, and a large stable for his horses. The estate was restored in 1938, and present-day visitors can appreciate the founder s taste for gracious living in a scenic country side setting. Mr. Penn was usually too busy to enjoy the quiet comfort of his country estate, and Mrs. Penn found the lovely manor lonely. Were the Penns to return to Penns bury today, they would see a strange sight indeed. Only a short way across the meadows and around a big bend in the river are rising the stacks and stoves of blast furnaces and the chimneys of a big steel mill—the larg est ever built on the Delaware. Loneliness is forever banished at Pennsbury. Farms to Furnaces For years, the gently rolling farmland of Bucks County between Pennsbury and Morrisville was given over to growing spinach and other truck crops for Philadelphia and nearby markets. The 1950 harvest was the last for a good many farmers in the area, because in March 1951 the president of the country’s largest steel com pany turned over a ceremonial spadeful of earth as the first step in the construction of the Fairless mill. Within a short time, scores of power shovels and bulldozers were re-shaping the landscape. Steelmaking takes a lot of elbow room, and this plant takes more than the equivalent of fifty Bucks County farms. The Fairless mill takes so much room because it is an integrated plant. That means many plants working to gether as a unit in the elaborate process of converting the raw materials into finished steel products. Economy of operation is attained by heating and shaping the metal in large masses so that the successive operations are performed without the time and cost of re-heating. Naturally, big masses of materials require gigantic machines. The largest pieces of equipment are the two blast furnaces for smelting the iron from the ore. Each furnace is a 105-foot high cylindical steel stack lined with refractory brick to withstand the high temperatures. The raw materials are fed into the top of the furnace by mechanically operated hoists that keep the furnace supplied with its proper diet of iron-bearing ore, coke, which serves as the fuel, and limestone, the fluxing agent. Standing between the pair of furnaces and easily confused with them because of their huge size and cylindrical shape is a battery of six stoves to pre-heat air for the blast furnaces. Hot air makes the hot fires hotter. In the zone of combustion, temperatures up to fourteen times that of boiling water are attained, and piping between the furnaces and stoves is so arranged that the hot by-product gases from the furnace circulate through the chambers of one team of furnaces while the other team of furnaces supplies hot air for furnace combustion. The operation of a blast furnace takes you into the coke business, and that takes you into the chemical busi ness. Coke, the furnace fuel, is made from bituminous coal produced in two batteries of by-product coke ovens. These, in turn, require facilities for handling the valu able by-products derived from the coke-making process. In addition to the 1200 to 1400 pounds of coke, a ton of coal also yields approximately 10,000 cubic feet of highgrade gas and substantial quantities of tar, ammonium sulphate, ammoniacal liquor, and light oils. Curiously, the blast furnaces, which are designed to produce 1,200,000 tons of pig iron, actually produce for the market, little or no pig iron at all. Instead, the liquid iron, periodically tapped from each blast furnace, flows into a huge ladle for transport to the open hearth department where a battery of open hearth furnaces immediately cooks up the liquid iron into liquid steel. During the cooking process, carbon and other impur ities are burned out. At the same time, ferro -manganese and other alloys are added to the molten bath to obtain Page 3 THE BUSINESS REVIEW steel of the desired quality. Someone has said that making open hearth steel is analogous to an old-fashioned cook making vegetable soup—she adds a bit of this and a pinch of that to suit her taste. Pyrotechnics on a grand scale attend the tapping of the open hearth furnace. The liquid and livid steel poured into a hollow mold becomes an ingot upon solidification. Capacity of steel mills is always stated in castings and ingots—the stubby chunks of solid steel of which the Fairless mill will turn out 1,800,000 tons annually. After proper conditioning in a gas-fired furnace called a soaking pit—the ingots, aglow with white heat, go to the roughing mills where they get rough treat ment. Here huge power-driven rolls flatten out the ingots like so much dough into greater length and smaller cross-sectional dimensions. The finishing mills then turn out finished and semi-finished products such as hot rolled sheet steel, cold rolled sheet steel, bars, and tin plate in various dimensions as required by the customers. The National Tube Company, a subsidiary of United States Steel, is also building on the premises separate facilities for the production of standard pipe. These in clude a mill to make skelp (the narrow ribbons of steel for pipemaking), and separate mills to form and finish the pipe. These are the principal units of the Fairless plant. There are also an ore unloading slip and dock, an ore storage yard, a power house, maintenance shop, and a water-treatment plant. Approximately 75 miles of rail road track are required to transport raw materials and goods in process from one mill or department to another, and there is much additional equipment like cranes, ladles, conveyor belts, and other facilities that make up a completely integrated steel mill. Such are the logistics of steel in the making. It takes land, labor, and capital on a grand scale. The Fairless plant occupies 3800 acres of land, it will employ 6000 workers and tie up $400 million of capital. Boom on the Upper Delaware Discovery of oil could scarcely have touched off a greater boom in the region. This new steel mill, which was begun only last year, is being constructed under forced draft as part of the program to make available more steelmaking capacity for national defense. To that end a construction crew in excess of 6000 workers is bring ing about a rapid transformation on the upper Delaware. Page 4 The little borough of Morrisville, where Robert Morris and the French Marshall Moreau once lived, is over whelmed with an eruption of business activity. The town has long been accustomed to the endless caravan of inter-city trailer trucks rumbling over U. S. Route 1 that goes right through the main thoroughfare; but traffic is now ever so much heavier and frequently is snarled up with cement mixer trucks and trucks hauling dirt for fill. An army of construction workers has boosted business for the local merchants and other bus inessmen of the community. The local bank has been swamped with new customers opening accounts, and deposits have gone up sharply. On pay day, the lobby is crowded with people cashing their pay checks. The bank has had to enlarge its quarters to accommodate the greatly increased volume of business. The real es tate offices are busy making land transfers, and prices of unimproved land skyrocketed from $300 to as high as $2000 an acre. The influx of a large permanent population requires housing facilities far beyond anything Morrisville can supply, for the steel mill will employ more workers than the total population of the town itself. To house the steel workers and their families, two new large-sized communities are being developed. Fairless Hills, the smaller of the two developments, is going up on a 1250 acre plot near Oxford Valley. This is a 1500-home project, including schools, a civic center, a modern shopping area, a fire station, parks, playground, swim ming pool, a dispensary, and areas set aside for a high school and churches. Levittown is a big 16,000-home project, spreading out over a 3000-acre tract between Fairless Hills and Bristol. It is designed in the form of master blocks of about 1400 residences, each block separated by wide two-lane, through roads and walled garden strips. Each block is a unit with its own schools, playgrounds, shops, churches, swimming pool, and other community facilities. Although it is a huge development, the houses will not be of one pattern. In addition to moderate-priced houses, the de velopment also includes a “country club” section for those in the higher-income classes. The expansion taking place in lower Bucks County is overloading all facilities. Local communities will have to install their own water works and sewage treatment plants. Most of the schools are already overcrowded, and many of the pupils are attending half sessions, some of THE BUSINESS REVIEW STEELMAKING ON THE DELAWARE MORRISVILLE BOROUGH TRENTON FAIRLESS HILLS LEVITTOWN FAIRLESS WORKS , BRISTOL/A BOROUGHT , PH I LADELPHI. CAMDEN PENNA. RGLOUCESTER PAULSBORO the classes meeting in lodge halls and church basements. Additional police and fire protection will have to be provided, as well as adequate accommodation for health and welfare. Lower Bucks County citizens at present must depend upon the hospitals of nearby Trenton and Philadelphia. Expansion of business and industrial activity is not confined to the west bank of the Delaware River. A new bridge is already under construction, crossing the river from Morrisville to Trenton, where George Wash ington once ruined a Hessian Christmas party. Trenton is a city of 128,000 population and although the capital Page 5 THE BUSINESS REVIEW of New Jersey, politics is not its principal business. Most of Trenton’s working population is employed in the more than 300 industrial plants which make structural steel, steel wire and cable, automotive hardware, refrig eration equipment, rubber products, plastics, electrical equipment, linoleum, ceramic products, textiles, steam turbines, and composition and stuffed dolls. The home of world-famous Lenox china and Roebling wire and cable, the city’s growth and prosperity are not dependent upon high bridges and high-grade tableware alone. There is industrial variety aplenty. Wedged between two much larger cities, Philadelphia to the southwest and New York to the northeast, Trenton is apologetic to neither. What the city thinks of itself is printed in big letters on a bridge across the river: “Trenton Makes, the World Takes.” Trenton has already felt the stimulus of the big new steel mill at its back door. A nearby steel supply is an obvious advantage to the steel-fabricating concerns of Trenton. Numerous local industries are expanding their productive capacity, and the city has received scores of inquiries from outside concerns investigating the Trenton area as a possible location for new plants. Iron and steel is a basic industry that inevitably at tracts many other industries which feed on steel. Cus tomarily, the largest steel consumers are the automotive, railroad, and construction industries, but heavy tonnages are also taken by shipbuilders, aircraft manufacturers, the oil and gas industry, the builders of machine tools, industrial equipment, and electrical machinery, the ap pliance manufacturers, producers of metal containers and agricultural equipment, and the manufacturers of household equipment of all kinds. In fact, there is no industry that can operate without steel in some form or other. Per capita consumption of steel in the United States is greater than that of any other country. This is due to a number of interacting causes: our extensive use of machinery, homogeneous markets that absorb a flood-like stream of standardized products, and hitherto an abundance of steelmaking raw materials. Another basic reason, often overlooked, is the fact that steel is our lowest-cost industrial metal, and with the addition of alloys special qualities can be built into the metal so that it is easily tailored to the exacting requirements of par ticular markets. The immediate effects of basic iron and steelmaking capacity on the upper Delaware are, of course, most apparent in the Trenton-Morrisville area. However, the Page 6 Fairless mill is bound to attract other concerns to the Delaware all up and down the valley. Some of these companies will be the suppliers of materials, goods, and services needed for the operation and maintenance of the steel mill itself. Among these are refractory brick, fuel oil, lubricants, coal, chemicals, and other supplies needed to keep a steel mill running. A still larger number of concerns coming into the area are the steel fabricators—those who buy so-called finished steel in the form of bar, plate and sheet steel for further manufacture into automobiles, automobile parts, railway equipment, ships, refrigerators, air con ditioning equipment, office furniture, agricultural ma chinery, and an almost endless list of products. Among the first that have made definite commitments to come into the area are manufacturers of electronic equipment, fire brick, kitchen ware, automobile bodies, pressed steel ware, and sponge iron products. Others will follow. Down-river companies in the area, already heavily indus trialized, are expanding their plant facilities. Among these are aircraft, radio, electrical equipment, chemicals, oil refineries, and pipe mills. Power companies on both sides of the river are installing additional generating capacity to take care of heavier loads on their lines, and the railroads are expanding facilities to handle the in creased traffic. Steel Capacity in the Delaware Valley While the Fairless mill, with 1,800,000 tons of basic steelmaking capacity, will have far-reaching effects, the area has been by no means devoid of steel facilities. Trenton has furnaces with slightly over 200,000 tons of annual capacity used principally in wire and cable manu facturing. The Midvale furnaces in Philadelphia, with an annual capacity in excess of 400,000 tons, make armor and ordnance, turbine and generator shafting, crank shafts, and high-pressure containers, locomotive and carwheel tires, forgings for cement and mining machinery— all heavy steel products. Claymont, Delaware, has a mill with almost a half-million tons of ingot capacity, with finishing facilities for sheared steel plates used in ship building and the manufacture of locomotives and marine boilers and fireboxes. At Conshohocken, on the Schuylkill River, is a steel mill with an ingot capacity slightly in excess of half million tons. This is an integrated plant with two blast furnaces and by-product coke ovens, together with THE BUSINESS REVIEW rolling facilities to produce a variety of steel plate and sheet steel. Farther upstream, on the Schuylkill, at Phoenixville is another small mill, as steel mills go, with somewhat less than a half-million ton capacity. Its fin ishing facilities are given over to rolling heavy and light structural shapes, angles, beams, channels, and related steel products used in the construction industry. A larger mill with almost 700,000 tons of ingot capacity is located on the Brandywine at Coatesville. This mill is equipped to produce heavy steel plates with unusually wide dimensions and also a variety of special alloy steel products. The largest steel capacity in the area is at Bethlehem, on the Lehigh River tributary to the Delaware. The Bethlehem mills are a completely integrated unit. The blast furnaces have an annual pig iron capacity of more than 2 million tons, and the steel mills have in excess of 3 million tons of ingot capacity. A large propor tion of the finishing facilities are specially built for heavy structural shapes, armor plate, ordnance, forgings, cast ings, and heavy machinery. At mid-century, total steelmaking capacity in the Dela ware valley was almost 6 million tons. Of the seven steel mills along the Delaware and its tributaries, only two of the installations, those at Conshohocken and Bethlehem, are integrated plants. But they are landlocked in the sense that they have to depend upon rail transpor tation to deliver iron ores, fuel, and limestone to the furnace-side. The five non-integrated mills make steel from pig iron and scrap iron and steel, also assembled by rail. When the Fairless mill goes into full operation, the Delaware valley’s steelmaking capacity will be in creased by one-third. STEEL ON THE DELAWARE The location of an integrated mill on the riverside affords advantages peculiar to the steelmaking process. The manufacture of a ton of steel requires four tons of raw materials—two tons of ore, one ton of coke, a half-ton limestone, and about a half-ton of ferro-alloys. In other words, roughly four pounds of raw material must be assembled and processed to make a pound of steel worth an average price of about four cents. Thus, it is appar ent why it is advantageous for a steel mill to be located on a navigable waterway where the raw materials can be brought to the furnace in bulk by low-cost water trans portation. Few if any other industries are so dependent as iron and steel upon navigable waterways for the assembly of raw materials from distant sources. The Changing Raw Material Situation The importance of water transportation is well illustrated by the heavy concentration of steel mills clustered along the shores of the Great Lakes and nearby Pittsburgh. Exactly 100 years ago a small shipment of Lake Superior iron ore was sent by way of Detroit to Newcastle, Penn sylvania, in the western part of the state. That was the beginning of the Pittsburgh and Great Lakes iron and steel producing regions, which today produce almost three-quarters of the country’s annual output. Other factors contributing to this development were the open ing of the Sault Ste. Marie Canal, which permitted ship ment of Great Lakes ores to lower lake ports, the de velopment of high-grade coke in the Connellsville area southeast of Pittsburgh, and the opening up and in dustrialization of the West. Basic to all of these de velopments, however, was the seemingly inexhaustible supply of rich deposits of high-grade iron ores in Min nesota and the northern peninsula of Michigan. In season, year after year, lake ore boats carried everincreasing tonnages of iron ore from the Mesabi, Gogebic, Marquette, Menominee, and Vermillion ranges to the steel mills along the lower lake ports and for trans shipment by short rail hauls to the furnaces at Pitts burgh, Youngstown, Sharon, and the south Ohio River section. The industrial might of the United States was scooped right out of these ore beds. During the past century, the Lake Superior region shipped over 2y2 billion gross tons of iron ore. Unfortunately, the ore deposits are not inexhaustible. The second world war took a huge toll out of these, our best iron ore resources. Reserves of high-grade ore remain ing in this region are estimated to be about 1300 million tons, and the drain on the region continues at the rate of 100 million tons annually. If the estimates of the reserves remaining are reasonably accurate, it is apparent that we shall have exhausted our rich heritage by about 1965 or 1970—and that is not far distant. The steel industry cannot operate on a hand-to-mouth basis. With huge amounts of capital at stake, as required by the technology of steel, the industry must plan for years ahead. In view of the rapidly diminishing reserves of our best ore deposits, steel companies are now making long-range plans, as they must, to provide for adequate Page 7 THE BUSINESS REVIEW supplies of future raw materials. There are two possible solutions: one to develop ways and means for utilizing lower-grade domestic ores; the other to import more highgrade foreign ores. The industry is turning to both solutions. Taconite, or iron-bearing rock, occurs in immense quan tities in the Lake Superior district; but it is low iron bearing ore—about 25 per cent, in contrast with the Mesabi ores of 60 per cent or better iron content that we have been using for many years. Someone has said that the Mesabi and other ore ranges are small pockets of high-grade ore in a long sheet of low-grade taconite similar to rich raisins in a poor cake. The difficulty with taconite is not only the fact that it is low in iron content, but also the fact that it requires extensive processing. It must be ground very fine, passed over a magnetic sepa rator, and then it has to be agglomerated by sintering or pelletizing into larger-sized chunks for use in blast fur naces. In other words, it must be “manufactured” and this requires a huge investment in special equipment. Several companies have already expended huge sums to process taconite. The alternative is to conserve the use of our remaining high-grade ores by importing more iron ore from abroad. We have long imported iron ore from Sweden and Cuba. Morocco, Liberia, Brazil, Venezuela, Newfoundland, Lab rador, and Quebec also have extensive iron ore deposits. All of these foreign sources, fortunately, are in the Great Atlantic Basin and therefore accessible to the Delaware River. As a result of our declining domestic ore reserves, the country’s leading steel companies have been re combing the available foreign sources. Among these, the most suitable from the standpoint of size of deposits, iron content, and other considerations seem to be those in Venezuela and in Labrador-Quebec. Preparations are being made to bring in ore from the extensive Cerro Bolivar deposits in Venezuela in large ocean ore-carriers. Venezuelan ores are to be used here on the Delaware in large quantities upon completion of transportation facili ties from the mines to the ocean and the deepening of the Delaware River channel above Philadelphia. Similarly, development of the Labrador-Quebec deposits is under way. This requires construction of a railroad from the ore deposits in the interior to the St. Lawrence River, where ocean carriers can pick up the ore and trans port it to steel mills along the Delaware and other Atlantic ports. While Pittsburgh and the Great Lakes region will Page 8 continue to operate largely on Great Lakes ores, foreign ores are destined to play a more important role in our national economy as a result of the changing raw ma terial situation. Current developments definitely point toward further expansion of the steelmaking facilities on the Delaware River. The Fairless mill has ample room for future expan sion to two or three times its present capacity. Another large steel company has already obtained a site on the New Jersey side of the river below Camden, and still others are considering Delaware River sites for new mills. This is not to say that the Delaware valley will become another Pittsburgh, as some enthusiasts have dreamed, but with the increasing dependence upon foreign ores, new steel making centers will arise. Expansion on the Delaware has begun and will no doubt continue, not only because of its strategic location with respect to foreign ores but also by reason of proximity to markets. Changing Markets Markets are just as important as raw materials in the geography of steel. The finished products are heavy and ofttimes bulky, so that it is to the interest of the consumer to buy from the nearest mill that manufactures the type of steel required. This is all the more important now that the buyer pays the freight. During the past half century, the geographic center of the steel industry has been moving slowly westward. Accessibility to raw materials was a predominant factor, but the growth of markets also exerted a powerful influ ence. The rise of automobile manufacturing in Detroit, the growth of the midwestern agricultural machinery industry, and the development of the oil industry in the South created ever-larger demands for steel. As a result of these trends, steelmaking capacity was increased faster in the Mid-West than in the East. It is apparent from the new steel capacity now under construction that the geographical center of steel produc tion will start reversing its westward movement. In this development, market considerations go hand in hand with the changing raw material situation already mentioned. With respect to the choice of a site on the Delaware for the Fairless mill, an official of the company said in a public statement that a considerable peacetime market for steel products of all sorts would be available to a major finish ing mill on the eastern seaboard. Steel mills on the Delaware are in an excellent position I THE BUSINESS REVIEW to serve eastern markets. The Middle Atlantic and the New England regions can be reached economically by coast wise water transportation. Interior markets within this area can be served by comparatively short rail hauls as well as by motor truck delivery over the new expressways. This entire area, including the country’s largest and third largest cities, is heavily populated and highly industrial ized. During the war and since, a great number of new plants have come into this area. Many of them are metal fabricators, like automobile assembly plants, automotive hardware, aircraft, office furniture and equipment, bear ings, pipe fittings, and miscellaneous machine products— all of which are heavy consumers of steel. The market for finished steel in the Trenton-Philadelphia-Washington area is far in excess of the region’s steel producing capac ity. It has been estimated that almost half of the finished steel consumed in the area is shipped in from Pittsburgh, Youngstown, and Chicago. The eastern market is not only short of over-all steel capacity but especially short of capacity for certain par ticular kinds of finished and semi-finished steel. An un usually large part of the local steel-producing capacity in the Delaware valley is heavy casting and forging steel and steel plate. The region is notably lacking in finishing facilities for bars, galvanized products, and light sheet steel. The latter products are always in great demand for the manufacture of containers to supply the food process ing, chemical, and petroleum refining industries so promi nent along the Delaware. Another deficiency of the area that is being taken care of is provision for the production of cold-rolled sheet, which is being consumed in everlarger quantities in response to more exacting specifica tions particularly in defense orders. Steelmaking capacity on the Delaware is also favorably situated with respect to export markets. Foreign markets for American steel can be reached most economically by seaboard mills that can load finished steel directly on shipboard for export. Once domestic needs have been taken care of, foreign markets for American steel can be recultivated. In the meantime, Delaware River steel is to play a sig nificant role in the emergency mobilization program. The North Atlantic Treaty Organization relies heavily upon the United States for military material in which steel, of course, plays a very important part. Our first lines of national defense are far beyond the oceans which touch us. Steel in large tonnages will continue to be an indis pensable requirement for this outer perimeter of defense. Steel in the Delaware’s Destiny The arrival of a big new steel mill on the Delaware has created a tremendous stir throughout the whole valley. It is the largest single enterprise that has ever come into the region. It has touched off problems of planning, zon ing, taxation, transportation, housing, health, sanitation, education, safety, recreation, and others incident to the establishment of a new industry and a new community. The problems are being solved as best they can, as indeed they must, for the steel works are rapidly approaching completion. Iron and steel is big business with world-wide horizons. The advantages of a location on the Delaware that in duced the industry’s leading company to establish a mill here are just as attractive to other producers. Other con cerns are likewise laying plans for greater utilization of foreign ores, and as their older inland plants need to be replaced by modern mills, seaboard locations will very likely be sought. The new mills will also want accessibil ity to good markets, skilled labor, and a water supply. All these advantages are to be had on the Delaware. Steel on the Delaware is more than just another indus try. It is only the beginning of a development that may well change the basic character of the valley. THE BUSINESS REVIEW CURRENT TRENDS The economic picture in the Third Federal Reserve District during March was much the same as in previous months. The movements of business indicators lacked uniformity; trade declined, while industrial production was steady. The defense work received by Pennsylvania manufacturers apparently has not been sufficient to reverse the declines in other types of business—particularly in the nondurable lines. However, the high level of output of durables in March was able to sustain manufacturing employment and payrolls to a large degree. Although consumer purchasing power remained high, the public continued to show reluctance to buy. Department store sales declined slightly from February to March and, after a special allowance for this year’s later Easter, were unchanged from 1951. Department store stocks showed marked contrasts with conditions a year ago when they were rapidly advancing to an April peak. Seasonally adjusted inventories declined 3 per cent during the month and were 17 per cent under 1951. The value of construction contract awards declined sharply in March. A falling-off in both nonresidential, and public works and utilities awards was responsible for the drop. Residential construction registered a gain of 22 per cent. Activity in all major fields was considerably below a year ago. Business loans of weekly reporting member banks in the Third Federal Reserve District declined almost 3 per cent in the four weeks ended April 23 partly because repayments by food, liquor and tobacco manufacturers exceeded new borrowing. Last year business loans rose slightly in the same period. The nation’s privately held money supply declined about $400 million in March. This brought the reduction in private deposit and currency holdings to $2.8 billion since the end of 1951, reflecting mainly transfers of funds to the Government through Federal income tax payments. In the first quarter of last year, the privately owned money supply declined $4.4 billion. Third Federal Reserve District Per cent change SUMMARY United States Per cent change mo. ago year ago 3 mos. 1952 from year ago OUTPUT 0 0* - 3* _ 2* Manufacturing production. . Construction contracts.......... -11 -31 -25 4-12 0 -10 -11 4-30 - 2 - 8 0 -1 -9 0 - 3 0* - 4* - 3* + i* 4- 1* + 2* March 1952 from Employ ment -3 mo. ago EMPLOYMENT AND INCOME 3 mos. 1952 from year year ago ago March 1952 from 0 LOCAL CONDITIONS 0 -17 -10 - 1 - 2 0 -14 4- 3 + 6 0 - 2 + 8 + + 4- + i 0 0 0 + 1 + + + 4+ + 1 + 1 0 0 4- 1 3 8 1 3 7 mo. ago year ago 4- 3 + 7 - 4 +i year ago +10 + 4 -12 mo. ago year ago +1 mo. ago -9 Sales mo. ago year ago mo. ago year ago 6 h 5 4 8 Lancaster.......................... +8 +4 4-4 +7 +2 - 3 +2 - 2 + 34 -11 + 4 -13 + 6 - 9 0 - 2 +1 + 3 + 18 - 6 + 3 -20 + 7 - 7 Reading............................. 0 -10 -1 -15 + 3 -12 + 9 -20 + 5 -14 +1 - 4 + 7 - 3 + 2 + 17 PRICES Of 4- 2t + 3t OTHER 4- 8 — 2 - 6 0 0 + 2 ♦Pennsylvania # „ ♦♦Adjusted for seasonal variation, fPhiladelphia. Payrolls Philadelphia..................... BANKING (All member banks) Page 10 Check Payments Stocks Per cent Per cent Per cent Per cent Per cent change change change change change March 1952 March 1952 March 1952 March 1952 March 1952 from from from from from 0 TRADE** Department store sales.......... - 1 Department store stocks. . . . - 3 Department Store Factory* 0 0 - 4 + 2 -3 +3 Wilkes-Barre.................... +1 - 2 +2 + 9 - 3 +3 York.................................... +2 - 3 +1 -13 + 2 -13 4-14 + 3 4-30 - 8 + 10 -26 + 3 - 3 — 2 + 13 -12 + 10 -15 + 11 -15 •Not restricted to corporate limits of cities but covers areas of one or more counties. THE BUSINESS REVIEW MEASURES OF OUTPUT EMPLOYMENT AND INCOME Per cent change 3 mos. Mar. 1952 1952 from from month year year ago ago ago MANUFACTURING (Pa.)................. Durable goods industries..................... Nondurable goods industries................... 2 1 1 2 1 4 1 1 2 1 0 2 1 0 1 0 1 3 1 3 — 4 - 3 -18 -14 — 11 - 4 -11 - 1 + 1 + 1 + 2 -12 -10 + 3 - 7 + 2 + 5 + 22 + 1 -18 + 30 + 40 - 2 + + + + + -j+ + + + COAL MINING (3rd F. R. Dist.)*. Anthracite............................. Bituminous..................... CRUDE OIL (3rd F. R. Dist.)**.......... CONSTRUCTION—CONTRACT AWARDS (3rd F. R. Dist.) + . . Residential............................. Nonresidential............ Public works and utilities............. - 3 + 1 - 8 -11 -13 - 3 Foods............................................ Tobacco......................................... Textiles.............................. Apparel................................... Lumber............................ Furniture.................................. Paper................................... Printing and publishing........................ Chemicals...................................... Petroleum and coal products............. Rubber............................... Leather.......................... Stone, clay and glass.............................. Primary metal industries. . . Fabricated metal products. . . . Machinery (except electrical)............... Electrical machinery................... 1 ransportation equipment.......... Instruments and related products. . . Misc. manufacturing industries. . 0 0 0 + 6 -11 + 22 — 7 -46 — 2 + 3 - 7 -19 -13 — 6 -11 0 + 2 0 + 6 - 9 + 5 — 4 + 3 + 6 +28 + 3 -18 0 + l - 3 - 1 -31 -29 — 38 -18 0 — 25 + 28 *U.S. Bureau of Mines. ♦♦American Petroleum Inst. Bradford field. fSource: F. W. Dodge Corporation. Changes computed from 3-month moving averages, centered on 3rd month. Pennsylvania Manufacturing Industries* Indexes (1939 avg. = 100) All manufacturing. Durable goods industries.............. Nondurable goods industries.............. Foods........................ Tobacco................... Textiles.................... Apparel.................... Lumber.................... Furniture and lumber products..................... Paper............................. Printing and............... publishing................. Chemicals.................... Petroleum and coal products..................... Rubber......................... Leather......................... Stone, clay and glass ............................. Primary metal industries................... Fabricated metal products..................... Machinery (except electrical)................... Electrical machinery................. Transportation equipment................. Instruments and related products. . . Misc. manufacturing industries.... Em ployment Mar. 1952 (In dex) Per cent change from Average Weekly Earnings Payrolls mo. ago year ago Mar. 1952 (In dex) Per cent change from mo. ago Mar. 1952 year ago Average Hourly Earnings ciTg. chg. from year ago Mar. 1952 from year ago 136 0 - 4 406 +i + 1 $66.64 + 5 $1.64 + 5 168 0 - 1 478 +i + 5 73.22 + 5 1.76 + 5 106 118 91 69 127 145 0 -1 +i -1 +i 0 - 9 — 4 0 — 17 10 — — 10 311 294 247 212 382 383 +i -1 +2 -1 +3 -1 _ 6 + 2 + 2 8 0 - 8 56.44 55.77 35.76 54.40 42.69 46.18 + 3 + 6 + 2 1 0 + 3 1.45 1.38 .96 1.40 1.18 1.13 + + + + + + 127 137 +3 0 - 8 9 416 420 +4 -1 0 - 6 60.32 66.23 + 10 + 3 1.33 1.57 + 5 + 7 117 147 0 0 - 2 5 328 427 +5 +2 + 4 0 79.02 69.41 + 6 + 5 2.00 1.63 + 7 + 4 155 241 83 +1 -1 + 1 — 1 — 10 435 757 229 +2 0 -1 + 5 +ii — 9 84.27 78.06 47.42 + 4 + 12 + 1 2.07 1.92 1.21 + 4 + 12 + 1 132 +1 - 9 378 +1 - 7 65.63 + 2 1.65 + 4 143 0 + 2 404 0 + 4 78.60 + 2 1.92 + 2 174 0 - 6 496 -1 - 5 67.70 + 2 1.63 + 3 243 0 + 1 726 0 + 8 75.59 + 7 1.73 + 6 275 -1 + 1 692 +1 + 13 70.26 + 12 1.69 + 9 180 +1 + 17 520 +3 +26 81.97 + 8 1.94 + 4 187 +1 + 2 555 -1 + 4 67.62 + 1 1.64 + 3 123 -1 18 345 +4 -13 57.29 + 6 1.35 + 6 -1 — — 4 6 4 1 3 4 *Production workers only. TRADE Per cent change Third F. II. District Indexes: 1947-49 Avg.= 100 Adjusted for seasonal variation Mar. 1952 Mar. 19S 2 from (Index) month year ago ago SALES Department stores.............. Women’s apparel stores............ Furniture stores........................ 109 86 STOCKS Department stores........................ Women’s apparel stores............ Furniture stores.................... 110p 105 -1 -2 + 2* 0 + 8 - 3* -3 +1 + 2* -17 -13 -17* Recent Changes in Department Store Sales in Central Philadelphia Week Week Week Week ended ended ended ended April 12............................. April 19.................................. April 26........................... May 3.............................. ♦Not adjusted for seasonal variation. 3 mos. 1952 from year ago -10 - 6 + 10* Per cent change from year ago +3 -7 -4 -8 Sales Departmental Sales and Slocks of Independent Department Stores Third F. R. District Stocks (end of month) % chg. % chg. % chg. Mar. Mar. 3 mos. Ratio to sales 1952 1952 1952 (months’ supply) from from from March year year year 1952 1951 ago ago ago Total—All departments.................................... - 9 - 9 -18 3.2 3.6 Main store total..................................... Piece goods and household textiles. . . Small wares............................. Women’s and misses’ accessories......................... Women’s and misses’ apparel. . . Men’s and boys’ wear.......................... Homcfurnishings................................... Other main store........................ - 9 + 3 0 -16 - 5 - 9 -10 -21 -10 -15 - 2 -10 - 4 — 8 -15 -13 -25 -12 - 9 - 9 —14 -24 -24 4.1 4.1 3.1 1.8 5.6 47 28 1.9 4.6 3.9 5.4 4.1 Basement store total.............. Domestics and blankets.......................... Small wares......................... Women’s and misses’ wear....................... Men’s and boys’ wear........................ Homefurnishings.................................... Shoes.......................................... - 8 + 28 -29 -12 - 7 +n -23 - 6 - 5 -17 6 - 3 - 3 -12 -23 -46 - 6 20 2.5 2.2 6.0 17 — 28 -26 -13 2 3 3.3 3.0 5.0 2.6 Nonmerchandise total................................. - 3 — 1 p—preliminary. Page 11 THE BUSINESS REVIEW BANKING CONSUMER CREDIT Receiv ables (end of month) Sales OU(C OrcttTt % chg. % chg. % chg. Mar. Mar. 3 mos. 1952 1952 1952 from from from yearago yearago year ago Third F. R. District Department stores - 9 -10 - 8 - 6 -11 - 9 Mar. United States (billions $) 1952 four weeks year Money supply, privately owned............................................. 182.9 -.4 + 10.4 Demand deposits, adjusted.................................................... Time deposits............................................................................. Currency outside banks........................................................... 94.8 62.5 25.7 -.9 + .4 + .1 + 5.8 + 3.3 + 1.3 21.6* + ■9* - 2.3* Turnover of demand deposits.................................................. 0 -9 Changes in— MONEY SUPPLY AND RELATED ITEMS - 3 -17 + 9 Loans made Loan Credit Third F. R. District + 42 + 20 + 3 In + 41 + 35 + 12 + 15 + 6.8 U.S. Government securities.................................................... Other securities........................................................................... + .2 -.1 + .2 + 3.4 + 2.4 + 1.0 20.3 + .6 + 1.3 19.5 .8 + .2 + .4 + 1.0 + .3 0 Loan baft* ances ou tstanding (end of month) % chg. % chg. % chg. Mar. Mar. 3 mos. 1952 1952 1952 from from from yearag< yearage year ago Consumer instalment loans + .3 57.8 61.1 13.6 Required reserves (estimated)............................................... Excess reserves (estimated).................................................... + 2 -28 + 7 132.5 Member bank reserves held...................................................... Furniture stores Commercial bank earning assets............................................ - 3 + 13 + 16 + 5 Changes in reserves during 4 weeks ended March 26 reflected the following: Effect on reserves Net payments by the Treasury.......................................... Gold and foreign transactions............................................. Decrease in Reserve Bank loans........................................ Other transactions.................................................................... +.8 + 2 —.3 —-1 Change in reserves.................................................................... +-6 * Annual rate for the month and per cent changes from month and year ago at leading cities outside N. Y. City. OTHER BANKING DATA PRICES Per cent change from Mar. Monthly Wholesale and Consumer Prices Wholesale prices—United States (1947-49 Foods * (Index) month ago 100). . . ' year ago 112 108 109 114 0 0 0 0 -4 -8 -3 -3 188 188 224 200 154 216 174 0 0 0 +1 0 -1 +2 +2 +2 +3 -1 0 -4 +2 Consumer prices (1935-39 = 100) Fuel..."............................................................................... Weekly Wholesale Prices—U.S. (Index: 1947-49 average =100) All com modi ties 111.5 111.3 111.2 111.3 Source: U.S. Bureau of Labor Statistics. Page 12 Farm prod ucts 107.2 106.7 106.7 107.1 Proc essed foods Other 107.9 107.7 107.4 108.4 113.2 113.1 113.0 112.9 Weekly reporting banks—leading cities United States (billions $): Loans— Commercial, industrial and agricultural.................... Security.................................................................................... Beal estate.............................................................................. To banks................................................................................. April 23 1952 Changes in— four weeks year 20.9 2.3 5.7 .4 6.0 - .5 + .5 0 0 0 + + + — + 35.3 38.3 82.4 0 - .7 -2.1 + 2.4 + -9 + 2.4 791 61 133 14 401 - 23 + 19 + 2 0 - 8 + 41 + 5 — 6 + 7 + 13 Total loans—gross............................................................. 1,400 Investments.............................................................................. 1,531 Deposits..................................................................................... 3,271 - 10 - 13 - 69 + 60 - 1 + 71 - .4 - .2 0 0 + .9 + — + + + — 6 — 5 - 13 + 90 +2.0% - 67 + 89 + 49 + 195 + 4.7% Total loans—gross............................................................ I nvestments............................................................................. Deposits..................................................................................... 1.8 .3 .3 .1 .1 Third Federal Reserve District (millions $): Commercial, industrial and agricultural.................... Security.................................................................................... Heal estate............................................................................. To banks................................................................................. All other.................................................................................. Member bank reserves and related items United States (billions $): Member bank reserves held............................................ Reserve Bank holdings of Governments.................... Gold stock.............................................................................. Money in circulation.......................................................... Treasury deposits at Reserve Banks........................... 19.9 22.4 23.3 28.3 .9 Federal Reserve Bank of Phila. (millions $): I^oans and securities........................................................... 1,387 Federal Reserve notes........................................................ 1,718 928 Member bank reserve deposits...................................... Gold certificate reserves.................................................... 1,384 49.8% Reserve ratio (%)................................................................ .7 .6 1.5 1.2 -2
@FedFRASER