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THE BUSINESS REVIEW
THIRD FEDERAL
PHILADELPHIA
RESERVE DISTRICT
NOVEMBER i, 1939
FEDERAL RESERVE BANK OF PHILADELPHIA
Business and Banking Conditions in the United States
Volume of industrial production,
which had turned up sharply last sum
mer, advanced still more rapidly in the
six weeks after the outbreak of war.
Employment also increased but at a
less rapid rate. Consumption of goods
by industry and by individuals has not
expanded so rapidly as production and
orders. Buying of basic commodities,
after a burst of activity in early Sep
tember, has slackened considerably,
but orders for many semifinished goods
and for finished products, particularly
machinery and railroad equipment,
have continued in large volume. Most
orders have come from domestic
sources. Prices of basic commodities
advanced sharply in the early part of
September, but in recent weeks prices
of foodstuffs have declined while prices
of industrial materials in most instances
have been maintained. Prices of fin
ished goods have shown a much
smaller advance.
Production. In September the Board’s
seasonally adjusted index of industrial
production advanced to 110 per cent
of the 1923-1925 average as compared
with 103 in August and 92 last spring.
Increases in output of iron and steel,
flour, sugar, meat products, and pe
troleum were particularly marked in
September. In the steel industry ingot
production rose from an average rate
of 61 per cent of capacity in August to
71 in September. In the first three
weeks of October the rate advanced
further to 90 per cent and actual vol
ume of output was at the highest level
on record. Flour production rose to
near record levels and at meat-packing
establishments activity was at the high
est rate reached in several years. The
sharp increase in output of crude pe
troleum followed a considerable reduc
tion in the previous month and cur
rently production is at about the high
rate prevailing before wells were closed
in the latter half of August.
In other industries increases in ac
tivity, though quite general, were not
so marked. Automobile production
showed a sharp seasonal rise as volume
production of new model cars was
begun at most plants, and in related
lines, such as plate glass, activity also
increased.
Textile production in
creased somewhat further from the
high level reached earlier. Shoe pro
duction, however, which had been in
INDUSTRIAL PRODUCTION
FREIGHT-CAR LOADINGS
WHOLESALE PRICES
Index of physical volume of production, ad
justed for seasonal variation, 1923-1925 aver
age =100. By months, January 1934 to Sep
tember 1939.
Index of total loadings of revenue freight, ad
justed for seasonal variation, 1923-1925 aver
age = 100. By months, January 1934 to Sep
tember 1939.
Indexes compiled by the United States Bureau
of Labor Statistics, 1926 =100. By weeks, 1934
to week ending October 14, 1939.
large volume in the first eight months
of the year, decreased in September.
Mineral production advanced generally
and iron ore shipment schedules were
expanded to build up stocks at lower
lake ports before the close of the ship
ping season.
Value of construction contracts, as
reported by the F. W. Dodge Corpora
tion, rose further in September, reflect
ing a contraseasonal increase in pri
vate residential building. Other pri
vate construction showed little change
and there was some reduction in the
MEMBER BANKS IN 101 LEADING CITIES
Wednesday figures for reporting member
banks in 101 leading cities, September 5, 1934,
to October 11, 1939. Commercial loans, which
include industrial and agricultural loans,
represent prior to May 19, 1937, so-called
“Other loans” as then reported.
Page One
volume of new public projects, both
residential and nonresidential.
Distribution. In September and the
early part of October department store
sales increased considerably. Freightcar loadings also advanced sharply,
with the most marked increases re
ported in shipments of coal and of mis
cellaneous freight, which includes most
manufactured products.
Commodity prices. Wholesale prices
of foodstuffs declined after the middle
of September, following sharp ad
vances earlier in the month. Prices
of industrial commodities, which rose
considerably until the third week in
September, subsequently were gener
ally maintained, although prices of
some materials, such as steel scrap,
hides, and rubber, declined from earlier
peak levels.
Bank credit.
Following reductions
during the early part of September,
Government security holdings by mem
ber banks in 101 leading cities increased
somewhat during the three weeks end
ing October 11, reflecting largely the
purchase of Treasury bills. Commer
cial loans continued to increase, but at
a less rapid rate than in late August
and early September. The volume of
demand deposits at city banks also in
creased further.
Excess reserves, which had increased
sharply at member banks during the
first half of September, showed fur
ther moderate increases during the
four weeks ending October 11.
Money rates and bond yields. Prices
of United States Government securities
increased in the latter part of Septem
ber and the first half of October, fol
lowing sharp declines early in Septem
ber. Average yields on long term
Treasury bonds declined from 2.79 per
cent on September 21 to 2.62 per cent
on October 16. Yields on Treasury
notes declined to 0.78 per cent from
1.30 per cent early in September.
Business and Banking Conditions in the
Philadelphia Federal Reserve District
heavier seasonal demand. Awards of
building contracts declined in Septem
ber but construction activity continued
to advance. Industrial and trade ex
pansion is resulting in some additions
to plants in a few basic lines, but the
general outlook for the building indus
try is somewhat clouded by rising costs.
Employment and payrolls are in
creasing substantially. In early Sep
tember little change was reported by
the manufacturing industry but since
then additional workers have been
hired and the volume of wage dis
bursements has been increased con
siderably more than was to be sea
sonally expected. In September the
sharpest gains were reported by the
coal mining industry and by retail dis
tributors.
Sales to consumers increased more
than usual in September and since
Industrial production in the Third
Federal Reserve District has increased
sharply since the middle of September,
under the stimulus of the large vol
ume of orders placed shortly after the
outbreak of war. The index, after
adjustment for seasonal changes, ad
vanced 2 per cent further from August
to September and was 17 per cent above
September 1938 or the highest in nearly
two years. Reports for October indi
cate continued substantial gains and,
owing to an unusual accumulation of
orders at most plants, current high
levels are expected to be sustained
throughout the balance of the year.
In the manufacturing industry, the
greatest gains have been at iron and
steel and textile mills, where demand
has been exceptionally active. The
output of fuels has increased sharply
with expanding plant activity and
then have been sustained at high levels.
Purchases at wholesale also increased
sharply, owing in part to speculative
buying, and currently the volume of
business is being sustained by re
orders and the demand for holiday
goods. Markets for raw materials and
manufactured goods are generally
much quieter than in the period im
mediately following the outbreak of
war. Inventories at both wholesale
and retail establishments still appear
low in relation to sales.
Prices of staple industrial materials
continue firm near the peaks reached
in September but quotations on agri
cultural goods have declined sharply.
The index of wholesale prices of 813
commodities compiled by the Bureau
of Labor Statistics was 79.4 per cent
of the 1926 average in the week ended
October 21, compared with 79.5 at the
FREIGHT CAR LOADINGS
INDUSTRIAL AND TRADE ACTIVITY
PHILADELPHIA FEDERAL RESERVE DISTRICT
ALLEGHENY
DISTRICT
PERCENT
1923 -23AVa«IOO
RETAIL TRADE
SALES
PRODUCTION
COAL
ftjOTF L
MERCH ANDISE AN D
MISC,ELLANE0 JS
VALUE OF
BUILDING CONTRACTS
(3 months moving avf.)
i
1
»; FwDodge Corp (or contract*
ADJUSTED TOR SEASON AL VARlATIO
1934
Page Two
1935
1936
1937
1938
1939
1933
1934
1935
1936
1937
1938
1939
peak in September and only 74.8 in
the last week of August.
Manufacturing.
Sales of factory
products in this district again in
creased after the middle of September,
particularly at plants producing and
fabricating steel. Backlogs of orders,
which expanded substantially after the
outbreak of war, continued to increase
and are well above the levels of a year
ago. Gains were especially marked in
unfilled orders at steel and textile mills.
Prices of finished steel products have
not increased to any great extent as
yet, but in most other leading lines
quotations have advanced sharply.
Inventories of raw materials thus
far have shown no substantial increase
except at textile mills, as purchases in
most lines have apparently gone into
immediate production. Supplies gen
erally approximate the levels of a year
ago. Inventories of finished goods at
producing establishments have de
clined, owing to active sales, and are
much smaller than in 1938.
Operations have expanded materially
since the middle of September, follow
ing small gains in the previous month,
and are substantially above last year
in most major industries. At many
plants activity has approached effec
tive capacity, stimulating purchases of
equipment and, in some cases, plant
expansion.
Employment in Pennsylvania fac
tories increased over 1 per cent to
about 843,000 workers between the
middle of August and the middle of
September before any pronounced vol
ume of production was undertaken on
large orders received in the first half
of the month. Payrolls in this period
continued near the August level of
about $19,300,000 a week, owing partly
to the fact that operations in some
basic lines were curtailed during holi
day periods. Since the middle of Sep
tember, however, both employment and
payrolls have increased sharply. Ac
cording to reports from nearly 1,200
concerns, employment may have
reached nearly 900,000 in October,
and wage disbursements at factories
are apparently well above $21,000,000
a week, the gain being more than
double the usual increase from Septem
ber to October.
In the month ended the middle of
September, employment and payrolls
in the iron and steel industry were
above seasonal expectations, owing to
substantial improvement at plants turn
ing out such basic materials as pig
iron, steel sheets, bars and shapes, and
Business Indicators
Philadelphia Federal Reserve District
Index numbers: percentages of the 1923-1925 average as 100
Adjusted for seasonal variation
Adjusted indexes allow for the usual
seasonal change in activity.
Unadjusted indexes reflect merely the
actual change which may or may not Sept. July Aug. Sept.
be typical.
1938 1939 1939 1939
Sept. 1939
from
Month Year
ago
ago
Industrial production.......................
Manufacturing - total...............
Metal products.......................................
Textile products..............................
Transportation equipment...............
Food products.............................................
Tobacco and products................
Building materials............
Chemicals and products. .
Leather and products...............
Paper and printing.........
Coal mining........................
Anthracite........................
Bituminous..................
Crude oil......................................
Electric power
Output...............................
Sales, totalt.....................................
Sales to industries{........................
Not adjusted
Per cent change
72 r
71
57
83 r
52
75r
60
82
101
3.3 r
111
109
87
51
50
59
419
80
79 r
75
87 r
67
80 r
81
85
92
38
124
133
86
55
53
67
424
83
82
74
92
67 r
90
83
81
103
39
122
122
87
55
53
67 r
432
247 261 273
242 251 259
161 175 165
84p
82 p
78p
88p
73
80p
89
83p
100
39
131p
121p
89
71p
71 p
75
432
+
268
265
180
_
+
+
—
+
+
—
+
+
—
+
+
+
+
+
+
+
+
+
4
4
4
4
+
4
2
0
6
4
8
11
8
3
3
0
7
1
2
31
34
11
0
Sept July Aug Sept.
1938 1939 1939 1939
74
721
17
16
38
5
41
7
47
2
1
17
18
11
3
40
42
27
3
+15
+ 17
426
413
+24
428
+35
+ 3
+ 4
+ 10
+ 9
+ 4
+ 1
+ 14
+ 13
+ 11
- 7
51
76i
57
85
116
361
110
121
86
52 r
51 r
60
419
4
8
4 10
4- 12
+ 10
+11
+ 12
242 242 259
240 236 246
171 178 170
+
4
+
+
+
+
4
4
2
2
9
1939
from
9
mos.
1938
77 r 82
76 r 81
64
74 r
79
81 r
99
41
123
121
83
46
44
59
424
86p
83 p
73
82p
84
88p
116
42
130p
132p
88
72p
72p
76
432
70 r
84
79
80
110
44
123
125
85
54
53
63 r
432
262
263
191
Employment and wages—Pa.
4 6*
417*
420*
3*
2*
4-j- 1 5*
5*
4 1* 102
410* 136
4 57
4 56
4 4
4121
4 3
4 9
25
+34
486
-19
469
477
7
1
38 s1
2*
11
17*
4s1
12*
13
7
23
4 11
4 1
41*
4 12
4- 64*
4*
6s
4 30
4 23
+ 34
+ 6
4- 18=
-i-i aft*
31:!
37*
4-
+
General (1932 = 100)
73
69
59
1* 4- 8s*
0* -j- 19*
1* + 22*
4-
4-
+
77 78
76 r 82 r
66 71
80
82
72
102 104 r 107
143
Building and real estate
Contracts awarded!*—total.............
Residential!......................................................
Nonresidentialf.............................................
Public works and utilities!..........
Permits for building—17 cities ....
Real estate deeds—Philadelphia!. .
Writs for Sheriff sales—Phila..........
50 ! 65 71
62
43 61
45 49 41
96 |114 167
19 20 36
53
50 51
325 1296 335
79
67
46
212
20
55
244
+
+
+
+
11
10
13
27
45
+ 4
- 27
-20
49 67 72
40 64 58
44 47 42
88 121 184
17 24 32
43 51
51
377 281 321
77
62
45
195
18
47
283
Distribution
Retail trade
—sales.......................
Life insurance sales..........................
75 r 76
75 r 75
78
76
77
82
81
84 p +
75p
44-
91
4*
4-
4-
Freight-car loadings—total.............
Merchandise and miscellaneous
Coal....................................................
54
55
56
62
62
66
62
63
61
70
67
76
+
+
+
77 r 54
80 r 67
59
73
85p
81p
65 74 69
+12
445* 40 103 79
- 3* 115r 96 106
- 4* 109 r 81
91
60 63
65
+17
61 63 65
+ 17
59 59 59
+ 12
73
66
llOp
102p
79
76
79
4 8*
Business liquidations
4 4* 103
- 9* 23
99
j 42
60
13
71
32
Payment of accounts
Check payments.................................
Rate of collections (actual)
79
89
92
91
—
32
32
33
34
+
1
+ 16
6
4-
+ 9
9
75
87
78
87
28
32
29
30
78
68
74
81
79
80
73
75
63
67
80
76
78
74
75
61
67
80
75
77
71
79
69
75
82
79
80
77
Prices—United States
-f 5* 4
-f 13* 4+ 12* 442* 44 5* 44
4* 4
Scranton...........................................
+
8* +
1*
1*
1*
1*
0*
0*
5*
- 3*
- 6*
- 5*
— 2*
— 3*
- 3*
- 2*
% change from
(In millions of dollars)
Sept.
1938
June
1939
July
1939
Aug.
1939
Sept.
1939
Month
ago
Year
ago
0.3
236
540
77.6
0
+ 13
+ 5
- 2
+ 0
+n
415
737
1617
8.6
- 1
- 0
+ 2
- 2
4- 3
4- 4
4-17
-13
Banking and credit
Federal Reserve Bank
Bills discounted.............................. 8 1.0
Other bills and securities.............
235
Member bank reserves.................
353
Reserve ratio (per cent)...............
70.1
Reporting member banks
Loans................................................. $ 404
Investments.....................................
710
Deposits (a).....................................
1377
Bankers’ acceptances outstanding.
9.9
$
$
0.4
209
493
79.0
$
413
704
1537
*
7.9
* Computed from data unadjusted for seasonal variation.
t Not included in production index.
f 3-month moving daily average centered at 3rd month.
0.3
217
502
77.9
$
412
710
1558
8.1
$
0.3
209
516
79.5
$
418
738
1591
8.8
*
-70
+53
p—Preliminary.
r—Revised,
(a) Less cash items in process of collection,
Page Three
METAL PRICES
TEXTILE FIBERS
MILLIONS
OF LBS. —
PERCENT
UNITED STATES
DOLLARS
PER LB
MILL TAKINGS
COTTON,
COTTON
STEEL SCRAP
COPPER
FINISHED STEEL
1936
1937
1938
structural steel products. At plants
producing transportation equipment,
employment and payrolls also showed
some improvement, but in the case of
most textiles substantial declines were
reported instead of the usual gains in
the month. At canning and preserv
ing establishments the number of wage
earners and the volume of wage pay
ments increased sharply.
Employment in Delaware factories
increased over 6 per cent from the
middle of August to the middle of
September, and payrolls were ex
panded nearly 9 per cent, owing
principally to substantial gains at can
neries and at plants producing trans
portation equipment. In southern New
Jersey, employment advanced 5 per
cent in the period and payrolls about
6 per cent.
Compared with September 1938
when the expansion of that year was
well under way, employment showed
gains of over 8 per cent in Pennsyl
vania factories, 10 per cent in Dela
ware, and about 14 per cent in southern
New Jersey. Wage disbursements
were more than 18 per cent higher
this year than last in Pennsylvania,
12 per cent larger in Delaware, and 28
per cent in southern New Jersey.
The output of manufactured goods
in this district expanded seasonally
from August to September, and since
then activity has advanced rapidly.
Production of durable goods increased
about 6 per cent in September, owing
chiefly to gains in the output of pig
iron, steel, steel castings, and transpor
tation equipment. The production of
consumers’ goods declined about 4 per
cent after allowing for seasonal change,
principally because of reductions in the
output of silk manufactures, woolens
and worsteds, cotton products, and un
Page Four
19 3 9
Source: lror> Apc
1937
1938
derwear, which usually increases in the
period. Activity at carpet and rug
mills expanded somewhat but failed
to measure up to seasonal expectations.
The output of electric power in
creased 2 per cent less than usual from
August to September, but total sales
were 2 per cent larger than was to be
expected. Sales to industries ex
panded 9 per cent more than seasonally.
Coal and other fuels. The market for
fuel has improved greatly since early
September, owing to increased sea
sonal heating requirements and to the
heavy demand for industrial power ac
companying rapidly expanding pro
ductive activity. Output, sales, and
shipments of coal and fuel oils rose
sharply in September and were sus
tained at high levels in the first half
of October.
The demand for anthracite has in
creased substantially in the past two
months, sales to domestic households
being supplemented by large ship
ments to Canada. Colliery output
expanded sharply in the second half
of September so that the seasonally
adjusted index advanced about 34 per
cent. Production in the first half of
October continued at a high level.
Demand for bituminous coal by rail
roads, public utilities, and manufactur
ing plants, especially iron and steel
mills, has been unusually large in re
cent weeks. The output of mines in
creased about 11 per cent more than
usual in September and continued to
advance sharply in the following
month, reaching the highest level since
the spring of 1937. Shipments were
the largest in nearly two years and
prices have been advanced to a level
considerably above 1938.
The output of by-product coke, stim
ulated by rapidly expanding activity in
1939
1940
1937
1938
1939
1940
the iron and steel industry, continued
above seasonal levels in September for
the fourth successive month and was
the largest in the past two years. In
the first nine months, production was
nearly one-third above a year earlier.
Activity at oil refineries also increased
in September, after being sharply cur
tailed in the preceding month, and was
substantially above the level of a year
ago. Output of gas and fuel oils was
about 9 per cent larger in the first nine
months this year than last.
Building. Construction activity in
this district, as indicated by a threemonth moving average of contract
awards, increased further in Sep
tember, continuing the sharp upward
trend that has been in evidence since
the spring. Operations on public proj
ects showed the most pronounced
gains and the private construction of
both single and multiple family dwell
ings remained at a high level. Fac
tory and commercial building activity
was well above the low levels of 1938.
Building contracts
Philadelphia
Federal Reserve
District
Per cent
change
Sept.
1939
1939
From
(000’s
from
omitted) month 9 mos.
ago
1938
Residential...................... $ 9,219
Apts, and hotels.........
2,873
Family houses.............
6,346
Non-residential..............
4,266
Commercial.................
1,029
894
Factories......................
Educational.................
230
All other.......................
2,113
+ 8
+ 104
- 11
+ 60
- 17
+ 43
+ »
+257
+ 86
+214
+ 63
- 19
+ 5
+ 144
- 73
- 17
Total buildings. . . . $13,485
Public works and utili5,422
ties.................................
+ 20
+ 23
- 62
+ 69
Grand total............. $18,907
- 26
+ 34
Source: F. W. Dodge Corporation.
New awards of building contracts
decreased 26 per cent in September to
approximately $18,900,000, but were
still over one-third greater than a year
INDUSTRIAL FUEL AND POWER
RETAIL TRADE
PHILADELPHIA FEDERAL RESERVE DISTRICT
PHILADELPHIA FEDERAL RESERVE DISTRICT
PERCENT
PERCENT
ELECTRIC POWER
USED BY INDUSTRIES
SALES
FUEL OIL OUTPUT
BITUMINOUS COAL
OUTPUT
1934
1935
1936
1937
1938
earlier. The decline from August re
flected a sharp reduction in the value
of new contracts let for public works
and utilities and a seasonal slackening
in awards for family houses. Com
pared with a year ago, contracts for
all classes of construction except edu
cational buildings were much larger.
Contracts awarded in the first nine
months of this year aggregated $154,
000,000, or 34 per cent more than in
1938 and the largest since 1930.
Marked gains over a year ago were re
ported in the case of residential build
ings, which comprised 42 per cent of
total awards as against 30 per cent
last year. Contracts for factory con
struction were two and one-half times
the small volume of a year ago.
Wholesale prices of building ma
terials have been rising for six suc
cessive weeks and in the middle of
October were the highest since 1937.
Recent advances have been due to
higher quotations for metal products,
lumber, and paint materials.
Agriculture. Harvesting and fall plant
ing are virtually completed, and in the
southern part of this district winter
grains are germinating. Widespread
rains in early October were beneficial
to late truck crops and grass lands.
Production of leading field crops in
the district will be smaller this year
than last, except in the case of the
tobacco crop, which is expected to be
the largest since 1932. The wheat
harvest probably will be nearly 15 per
cent smaller than in 1938, but slightly
above the 1933-1937 average. The
apple harvest in Pennsylvania will be
unusually heavy, estimates indicating a
commercial crop of approximately 5,
900,000 bushels, or 55 per cent more
1939
1940
1934
1935
1936
1937
1938
1939
than last year and well above the ten- low last June and is 11 per cent above
September 1938, when business activ
year average.
Cash income from the sale of both ity was improving.
crops and livestock products in Penn
Despite the improvement in sales to
sylvania, New Jersey, and Delaware consumers, inventory buying by retail
continues somewhat less than in 1938. establishments continues unusually cau
Wholesale prices of agricultural com tious. Increases in fall stocks in Sep
modities in the country as a whole have tember were slightly smaller than is
declined from the peaks in early Sep customary at that time of year, al
tember but remain substantially above though orders were placed somewhat
August levels. The price index of the further in advance because of possible
Bureau of Labor Statistics on October increases in prices and delay in deliv
21 was 67.5 per cent of the 1926 aver eries. Inventories were at approxi
age, as against 60.4 two months ago mately the same level as in September
and a fourteen-month high of nearly 1938, although business was much
70 in mid-September.
better.
Sales at wholesale also advanced
Distribution, trade and service.
Re
tail trade sales improved substantially sharply in the month, particularly in
from August to September at the start the case of dry goods and jewelry.
of the active fall buying season. The The volume of business was 24 per cent
index of sales, after allowing for sea larger than in September 1938, all
sonal change, was 7 per cent higher lines except footwear reporting sub
than in August, registering improve stantial increases, which in part re
ment for the third successive month. flected a wave of speculative pur
The adjusted index in September was chases early in the month. Stocks at
the highest in the past two years and wholesale establishments increased
was only about 6 per cent below the somewhat in September but were about
recovery peak reached in early 1937.
the same as a year earlier.
Preliminary reports covering the first
Shipments by rail freight increased
half of October indicate additional
more
than usual during September to
gains.
Practically all lines advanced more the highest level in two years. Total
than was to be expected in September, shipments in the Allegheny district
the gains ranging from 9 per cent at advanced 13 per cent, after allowing
department stores to 16 per cent at for seasonal expansion, owing to a
shoe stores. At establishments spe gain of 23 per cent in loadings of coal
cializing in credit sales of durable con and 7 per cent in shipments of mer
sumers’ goods, the increase in the vol chandise and miscellaneous commod
ume of business was slightly smaller ities. Reflecting the markqd expansion
than usual but sales of these articles in industrial and trade activity, load
have been maintained at a high level ings of coke, livestock and forest prod
for some time.
ucts also increased more than usual,
The volume of sales at retail, after and shipments of grain and ore exadjustment for usual changes, has in # panded greatly instead of registering
creased 13 per cent from the year’s the customary decline in the month.
Page Five
The high level was sustained in the
first half of October.
Registrations of new passenger auto
mobiles declined 17 per cent from
August to September, as dealers were
unable to get any substantial number
of 1940 models. Sales were 64 per
cent above a year earlier, however,
when the 1938 model season was just
ending. In the first nine months of
the year sales in this district were 45
per cent above 1938.
The total income of nonresort hotels
in this district increased 12 per cent
from August to September but was
6 per cent below a year ago.
Hotel business
Philadelphia Federal
Reserve District
Sept.: per cent 1939
change from
from
9
Month Year mos.
1938
ago
ago
Room occupancy....................
Per cent of capacity used:
Sept. 1939................ 52.0
Aug. 1939................ 49.9
Sept. 1938............
53.7
Revenue from:
Guest rooms..........................
Food.......................................
Other sources.......................
- 0
+ 4
—1
-4
-3
+ 3
+29
+15
-5
—7
-8
-4
-5
-3
Total revenue...................
+12
-6
-4
Banking conditions. Member bank re
serves and deposits at reporting banks
in this district advanced to new high
levels in the past month, largely as a
result of heavy disbursements by the
Treasury. Expanding business ac
tivity was reflected in an increased
volume of loans for commercial and
industrial purposes. Total bank credit,
however, showed little change, as se
curity holdings were reduced.
The reserves of member banks on
October 18 were at a record level of
$582,200,000, showing an increase of
nearly 50 per cent over a year earlier.
In the first half of the month, when the
average was only $560,500,000, re
serves of Philadelphia banks were 92
per cent in excess of requirements and
those of country banks, 80 per cent.
Member bank
reserves
(Dollar figures in
millions)
Philadelphia banks:
1939: Sept. 1-15
Sept. 16-30
Oct. 1-15
1938: Oct. 1-15
Country banks:
1939: Sept. 1-15
Sept. 16-30
Oct. 1-15
1938: Oct. 1-15
Held
Re
quired
Ex
cess
$357.5 $195.9 $161.6
379.2 199.0 180.2
385.1 200.5 184.6
237.1 167.7
69.4
171.1
172.9
175.4
143.6
97.3
97.7
97.7
94.8
73.8
75.2
77.7
48.8
Ratio of
excess
to re
quired
82%
91 *
92 ’
41 »
76
77
80
51
"
”
*
*
Member bank reserves increased
$32,500,000 in the four weeks ended
October 18. More than $40,000,000
was made available to the local mar
ket through operations of the Treasury,
Page Six
Federal Reserve
Bank of Philadelphia
(Dollar figures in
millions)
Bills bought..................
Industrial advances. .
Oct.
18.
1939
$
0.4
0.1
3.1
236.3
Total.......................... $239.9
Note circulation......... 331.9
Member bank deposits 582.2
U. S. general account.
11.6
Foreign bank deposits 40.5
9.5
754.4
Reserve ratio...............
77.3%
Changes in—
Four
weeks
Reporting member
One
year
+$0.0
+ 0.0
+ 0.5
- 5.0
-$ 0.7
+ 0.0
- 0.0
+ 13.5
$4.5
+ 4.6
+32.5
-33.1
- 7.6
+ 4.7
+ 4.7
+ 0.4%
+$12.8
+ 25.6
+190.3
- 16.1
+ 21.2
+ 6.9
+211.2
+ 4.6%
and small amounts were supplied
through a gain in commercial and fi
nancial transactions with other dis
tricts and an increase in reserve bank
credit.
Offsetting transactions in
cluded a rising demand for currency
as factory payrolls and trade volume
expanded and an increased volume of
miscellaneous deposits at the Federal
Reserve Bank.
Government securities held by the
Federal Reserve Bank in the four
weeks ended October 18 were reduced
$5,000,000 to $236,300,000, reflecting
unreplaced maturities of Treasury bills.
Industrial advances by this bank in
creased $500,000 to $3,100,000 in the
period and float also expanded, while
discounts for member banks were vir
tually unchanged.
An increase of $7,000,000 in com
mercial loans to $198,000,000 was the
most significant change in outstanding
credit of the reporting member banks
in the four weeks to October 18. These
loans have expanded $21,000,000 since
the low in February and currently are
about 8 per cent larger than a year
ago. Extensions of credit to business,
however, are still considerably smaller
than in October 1937, although indus
trial and trade activity is approaching
those earlier levels.
Small increases also were reported
in holdings of open market paper and
in loans to brokers and dealers in se
curities. The investment portfolio,
however, shows a further reduction of
$7,000,000 to $728,000,000. This was
Oct.
18,
1939
(000,000’s omitted)
Changes in—
Four
weeks
One
year
Assets
Commercial loans................. $
Open market paper.............
Loans to brokers, etc...........
Other loans to carry secur..
Loans on real estate............
Loans to banks.....................
Other loans............................
198
26
18
31
55
1
94
+« 7
+ 1
+ 1
0
0
0
0
+$
+
+
+
Total loans......................... $
423
+$ 9
+$ 17
Government securities........ $
Obligations fully guar’teed.
Other securities.....................
362
92
274
-$ 1
- 2
- 4
+$ 20
3
2
Total investments........... $
-
15
3
2
2
1
0
2
728
-* 7
+$ 15
Total loans & investments $1,151
Reserve with F. R. Bank. .
420
Cash in vault.........................
18
Balances with other banks.
224
Other assets—net.................
100
+$ 2
+ 33
0
+ 13
0
+$ 32
+ 164
0
+ 40
Liabilities
Demand deposits, adjusted.
Time deposits........................
U. S. Government deposits.
Interbank deposits...............
Borrowings.............................
Other liabilities.....................
Capital account....................
+*21
~ 1
0
+ 28
0
0
0
+*133
9
+ 15
+ 97
0
2
3
917
281
53
425
0
14
223
—
5
due chiefly to sales of guaranteed obli
gations and other securities, including
corporate bonds. Holdings of direct is
sues of the United States Government
declined only slightly, and the current
volume of $362,000,000 is within $4,
000,000 of the all-time peak for the
reporting banks reached earlier this
year.
Deposits at these banks continued
to expand sharply, rising $48,000,000
in the four weeks to $1,676,000,000.
Substantial increases were reported in
balances of individuals, firms and cor
porations and in deposits held for
other banks, but deposits of states and
local governments decreased to the
smallest volume since May.
The trend of deposits has been gen
erally upward since March 1938 for
an aggregate gain of $362,000,000.
Outstanding credit has shown an in
crease of only about $70,000,000, while
the combined total of reserves and bal
ances with correspondents has risen
$287,000,000 to $644,000,000 or ap
proximately three times the reserves
required to be held against deposits.
MEMBER BANK RESERVES AND RELATED FACTORS
Changes in weeks ended—
Sept.
27
Oct.
4
Oct.
11
Oct.
18
Changes
in
four
weeks
Sources of funds:
Reserve bank credit extended in district..........................
Commercial transfers (chiefly interdistrict)......................
Treasury operations.................................................................
- 0.9
+ 3.2
+18.9
+i.i
-4.7
+3.2
- 0.9
- 1.8
+ii.i
+ 1.8
+ 4.8
+ 8.2
+ i.i
+ 1.5
+41.4
Philadelphia Federal Reserve District
(Millions of dollars)
Total........................................................................................
+21.2
-0.4
+ 8.4
+14.8
+44.0
Uses of funds:
Currency demand.....................................................................
Member bank reserve deposits.............................................
“Other deposits” at reserve bank........................................
Other Federal Reserve accounts..........................................
+ 2.5
+10.9
+ 7.8
- 0.0
+1.2
-1.3
-0.2
-0.1
+
+
+
-
7.2
0.5
0.7
0.0
- 4.1
+22.4
- 3.6
+ 0.1
+ 6.8
+32.5
+ 4.7
- 0.0
Total........................................................................................
+21.2
-0.4
+ 8.4
+14.8
+44.0
Employment and Payrolls
in Pennsylvania
INDUSTRIAL PRODUCTION AND COMMERCIAL LOANS
INDEX
MILLIONS
PHILADELPHIA FEDERAL RESERVE DISTRICT
(All figures are rounded from original data)
Manufacturing Indexes
INDUSTRIAL
PRODUCTION.
(unadjusted)
Employment*
Payrolls*
(Indexes are percentages of
the 1923-25 average taken
Per cent
Per cent
as 100. Total and group in
dexes are weighted propor Sept. change from Sept. change from
1939
tionately.)
1939
index Aug. Sept. index Aug. Sept.
1939 1938
1939 1938
All manufacturing___
Iron, steel and prods.. . .
Non-fer. metal prods.. . .
Transportation equip.. .
Textiles and clothing.. . .
Textiles...........................
Clothing.....................
Food products...................
Stone, clay and glass....
Lumber products.............
Chemicals and prods.. . .
Leather and products___
Paper and printing..........
Printing......................
Others:
Cigars and tobacco. ..
Rubber tires, goods . . .
Musical instruments. .
COMMERCIAL LOANS’
REPORTING BANKS
193 5
1936
* ALL OTHER* LOANS UP TO MAV 12.1»37
1937
1938
1939
REPORTING MEMBER BANKS
MILLIONS
80
71
110
59
93
87
119
110
76
61
88
89
98
90
+i
+3
-0
+6
-3
-3
-1
+5
+3
+2
+3
-1
+2
+2
+ 8
+ 14
+ 9
+25
+ 0
- 1
+ 4
+ 2
+ 18
+ 4
+ 11
+ 4
+ 4
+ 2
82
82
132
58
82
77
104
115
74
57
97
86
103
97
+ o
+1
+ 2
- 1
- 7
- 7
- 8
+ 6
+ 2
+ 2
+ 2
+ 2
60
86
57
-4
+0
+2
- 8
+ 8
+ 19
56
100
62
PHILADELPHIA FEDERAL RESERVE DISTRICT
* Figures from 2355 plants.
Employehoursf
Sept. 1939
per cent
change from
Aug. Sept.
1939 1938
+ 6
+ 19
+35
+ 19
+35
- 3
- 4
+ 3
+ 3
+26
+ 7
+19
+ 8
+ 9
+ 8
+
+
+
+
+
+
+
+
+
+
+
1
2
1
2
5
5
9
8
2
1
4
2
4
4
+22
+34
+24
+43
+ 2
+ 2
+ 0
+ 2
+24
+ 3
+28
+ 2
+ 6
+ 2
- 3
+n
+17
-12
+37
- 4
+10
+ 12
-15
+ 6
+34
t Figures from 2123 plants
DEPOSITS
General Index Numbers
Covering twelve branches of trade and industry
1400
(Indexes are percentages of the
1932 average taken as 100. In
dividual indexes are combined
proportionately into general in
dex number.)
LOANS AND INVESTMENTS
19 3 8
19 3 9
94 0
Percentage change—September 1939 from September 1938
City areas*
Sept.
1939
index
General index (weighted)..
EXCESS RESERVES.
(PHILADELPHIA BANKs)
19 3 7
Employment
Manufacturing
Employ
ment
Wage
payments
Building
permits
(value)
Debits
Allentown............
Altoona..................
Harrisburg............
Johnstown............
Lancaster..............
Philadelphia.........
Reading.................
Scranton...............
Trenton.................
Wilkes-Barre....
Williamsport........
Wilmington..........
Y ork.......................
+ 13
+ 5
4" 8
+23
+ 5
+11
+ 6
- 2
+ 12
+ 1
+ 3
+ 11
+ 6
+21
+41
+19
+42
+19
+ 16
+ 7
+ 1
+27
+ 4
+ 4
+ 14
+ 8
+ 12
+294
- 42
- 29
+ 7
- 14
+ 68
+ 28
+219
+ 43
- 76
+465
+ 4
+19
+ 11
- 2
+ 11
+ 16
+ 14
+ 7
+ 0
+17
+13
+14
+20
+13
Allentown.............
Altoona..................
Harrisburg. . .
Johnstown............
Lancaster.............
Philadelphia.........
Reading.................
Scranton................
I renton.................
Wilkes-Barre....
Williamsport........
Wilmington..........
Y ork.......................
+ 0
+ 1
+ 3
+13
+ 2
+ 1
- 1
- 0
+11
+ 1
+ 2
+ 5
+ 5
Manufacturing.............................
Anthracite mining.......................
Bituminous coal mining............
Building and construction........
Quarrying and non-met. mining
Crude petroleum producing. .
Public utilities..............................
Retail trade...................................
Wholesale trade...........................
Hotels...................................
Laundries................................
Dyeing and cleaning..................
107
125
65
98
57
108
131
96
106
115
104
100
96
Per cent
change from
Aug
1939
Sept.
1938
+ 5
+ i
+ 2
+ 6
+ u
- 0
— 2
- 0
+ 13
+ 1
+ 2
- 1
+ 5
+ 8
+ 5
+ 1
- 4
+ 7
- 4
+ 1
+ i
+ 2
- 4
- 0
-10
Payrolls
Per cent
change from
Sept.
1939
index
156
199
68
190
80
205
151
105
121
120
114
125
122
Aug.
1939
Sept.
1938
+ 2
+ 15
+ 19
+35
+ 19
+ 3
+21
- 5
+ o
+ 18
+ 10
+ 2
- 3
— 3
- 2
+ 9
+ 2
+ 2
+ 0
+13
+ 2
+ 3
+ 6
_ 2
+ 3
-14
Retail
trade
sales
+ 17
+28
— l
+ 8
+ 8
+ 9
+ 9
+ 6
+24
INDUSTRIAL EMPLOYMENT AND PAYROLLS
PENNSYLVANIA
PERCENT
PAYROLLS
+12
+10
September 1939 from August 1939
- 3
- 7
+ 3
+10
+ 3
+ 1
- 4
- 8
+ 13
- 2
- 1
+ 9
+ 8
+ 2
+ 27
+ 49
+221
+713
— 65
- 16
+ 62
+ 32
- 36
- 71
- 30
+ 40
+ 2
+ 6
+ 1
+ 5
+13
- 3
+ 6
+ 8
- 2
+ 5
+ 3
+22
+ 4
* Area not restricted to the corporate limits of cities given here.
+29
+25
+42
+ 19
+39
+52
EMPLOYMENT
+47
+49
+50
+15
+45
1933
1934
1935
1936
1937
1938
1939
Page Seven
OUTPUT OF MANUFACTURES
Index numbers of individual lines of trade and
manufactures
Philadelphia Federal Reserve District
Index numbers: percentages of the 1923-1925 average as 100
Adjusted indexes allow for the usual
seasonal change in activity.
Adjusted for seasonal variation
Not adjusted
Per cent change
actual change which may or may not
Sept July Aug. Sept
be typical.
1938 1939 1939 1939
Sept 1939
frc>m
Month Year
ago
ago
1939
from
9
mos.
1938
Sept. July Aug. Sept.
1938 1939 1939 1939
Retail trade
Sales
Total of all stores........................... 75r 76
Department................................. 66 r 67
Men’s apparel............................. 72r 63
Women’s apparel........................ lOOr 97
Shoe............................................... 87 r 82
Credit............................................ 79 r 94
Stocks of goods
75r
50r
105r
66
92 r
78 84p + 7
67 73p + 9
70 76 + 9
96 107p + 12
84 98 + 16
100 97p — 3
75 76
—
51 52
51p
96 107 105 _
_
68 70 67
99 95 94p _
_
1
2
2
4
0
+n
+ 9
+ 5
+ 7
+ 12
+22
+
+
+
+
+
6 77r
6 66 r
4 66 r
0 104 r
+ 3 99 r
+ 12 83
+
+
+
1
1
o
2
2
80 r
121 r
71
101
54
46
49
56
68
69
59 85p
50 73p
53 69
66 llOp
50 in
81 101p
67 73 81p
45 48 54 p
75 101 121*
59 71 72
92 103p
91
Rate of stock turnover
+ 11*
2.66
2.95
Wholesale trade
Sales
Stocks of goods
+ 38*
4- 5*
4- 58*
+ 4*
4- 30*
4- 34*
4-183*
+ 28*
+24*
+ 3*
+20*
+49*
+ 17*
+30*
+31*
+ 18*
2*
2*
3*
5*
0*
8*
5*
+ 1*
— 9*
+ 15*
+ 2*
+ 1*
+ 1*
+ t>*
11
11
0
34
1
10
18
9
5
9
8
10
11
13
12
4
8
0
7*
3
43
4
3
1
2
5
5
5
+59
+41
+ 19
+23
+44
+21
+56
+57
+45
- 3
+ 15
+ 12
+4R
+ 2
+15
+15
+25
+15
— 5*
+ 4
+21
+15
- 0
+ 9
+ 2
- 7
+52
+20
+ 13
+15
+46
+
_
+
+
+
+
Output of manufactures
Pig iron..................................................
Steel........................................................
Iron castings........................................
Steel castings........................................
Electrical apparatus...........................
Motor vehicles.....................................
Automobile parts and bodies...........
Locomotives and cars........................
Shipbuilding.........................................
Silk manufactures...............................
Woolen and worsteds........................
Cotton products..................................
Carpets and rugs.................................
Hosiery..................................................
Underwear............................................
Cement..................................................
Brick.......................................................
Lumber and products........................
36
51
47
68
53
16
53
14
257
84
51
43
86
100
125
51
31
24 r
44
65
56
65
74
15
68
20
371
74
58
53
104
109
172
63
36
24
52
65
56
62
76r
22
70
20 r
356
89
64
54
142r
117
164
60 r
36r
27
Slaughtering, meat packing............. 98 110 106
Sugar refining...................................... 123 66 104
Canning and preserving.................... 53 75 63
Cigars..................................................... 99 90 102
Paper and wood pulp........................ 68 73 74
Printing and publishing.................... 90 89 90
Shoes....................................................... 155 155 150
Leather, goat and kid........................ 65 112 95
Explosives............................................. 74 78 85
Paints and varnishes.......................... 78 83 83 r
Petroleum products............................ 151 172 162
Coke, by-product................................ 86 102 112
58 +
73 +
56 +
84 +
77 +
20 —
83 +
22 +
373 +
82 —
58 —
48 —
127 —
102 —
144 —
58 —
39 +
27 +
4103
148 +
61p —
99 —
74 +
92 +
143 —
99p +
89 +
88
+
174p +
125 +
* Computed from data unadjusted for seasonal variation.
Page Eight
6
7
12
8*
3*
0*
+ 27*
+ 1*
+ 16*
+
+ 8*
+
+
+ 39
+ 30
+ 11
+ 33
+ 17
+ 18
+ 42
— 4
+ 39
+ 10
+ 39
+ 34
+ 104
+ 23
+ 26
+ 16
+ 30
+ 9
0*
+ 12
+ 11
+ 4
+ 4
+ 11
1
— 10
+ 31
+ 6
+ 9
+ 6
+ 32
34
49
48
62
59
14
50
14
244
84
55
41
93
100
125
59
31
25 r
96
98
106
68
115
68
89
176
68
74
74
153
82
p—Preliminary.
40
60
54
58
78
16
66
20
360
73
54
46
95
90
142
73
34
26
93
97
68
61
98
70
86
144
98
77
78
173
100
46
67
54
60
84 r
18
66
21
352
87 r
65
49
130
101
153r
76
37 r
30
85
89
89
71
109
74
87
161
91
85
85 r
163
109
54
69
57
76
84
17
78
21
355
82
64
46
140
102
144
68
39
29
91
103
128
82p
115
74
91
163
103p
89
83
176p
120
r—Revised.
'
@FedFRASER