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THE BUSINESS REVIEW warns FEDERAL RESERVE BANK , 9 OF PHILADELPHIA . - >■'*• t £- NOVEMBER 1, 1944J PRODUCTIVE activity continues to fluctuate narrowly, reflecting the stabilization of over-all war production, where continuing reductions in some programs have been virtually offset by increased requirements in others. Total indus trial production in the country has shown small declines quarter by quarter since the turn of the year, with output in the three months ended Sep tember about 6 per cent below the wartime peak reached in the final quarter of 1943. Nonagricultural employment decreased some what from August to September, when the De partment of Labor estimated that the number of wage earners was over a million less than a year earlier. The decrease in the month was partly seasonal, as it reflected the return to school of young people temporarily in the labor market. Cutback production schedules at cer tain war plants, however, also were a factor in the decline, as they accounted for a consider able part of the reduction in manufacturing employment, estimated at nearly 200,000. Em ployment in agriculture reached a seasonal peak during September, the beginning of the prin cipal harvest season. Although the total num ber of workers was little less than a year earlier, and only 5 per cent below the pre-war average, approximately three-quarters of them were un paid members of farm families. Hired labor accounted for the smallest proportion of the total reported in more than a decade, accord ing to the Department of Agriculture. The over-all manpower situation is somewhat less tight than earlier this year, as withdrawals ... ; 1 , . If, ?y Tfl .. . . ' ! « by the armed forces have diminished, an in creasing number of ex-service men are re entering the labor market, and turnover, except among women employees, has declined for sev eral successive months. Nevertheless, man power shortages persist in a few categories of munitions manufacture and in supporting lines. Additional workers also are urgently needed in certain critical areas, including Philadelphia and several nearby counties. Regional repre sentatives of the War Manpower Commission recently instituted an intensive recruitment cam paign in the interest of local war plants, sug gesting that the situation has not eased to the extent anticipated when the area was officially designated one of critical labor shortage. The number of applications for reconversion approved by the War Production Board under its “Spot Authorization Plan" has increased con siderably, although the productive facilities in volved and the quantity of raw materials allo cated thus far are of little immediate significance to the economy as a whole. From the imple mentation of the program on August 15 until mid-October, some 1,100 firms were given per mission to resume the output of a wide range of items for civilian use. The number of plants authorized to reconvert their facilities in Phila delphia has been increased from 2 to 24 over the past several weeks. In the same period, the applications of 34 establishments elsewhere in the Third Federal Reserve District, some of them likewise in critical or potentially tight labor markets, also received approval. These (Continued on page 11) Page One The Economy of the Third Federal Reserve District Building and Construction Building and construction played a highly important part in the economic development of the United States during the 19th century, pro viding our industries with railroads, highways, factories and utilities, and supplying public works and houses for a rapidly expanding popu lation. In performing these functions the in dustry has contributed much to the total in dustrial activity of the United States. It is es timated that dollar volume of construction averaged 7 per cent of gross national product between 1929 and 1941. In the post-war period, construction may occupy an even more impor tant position in our economy as consumers put into effect the demands which have been pent up during the war for new houses and improved facilities of all kinds. From the standpoint of employment, con struction was a relatively small segment—less than 5 per cent—of our economy in 1940. In the Third Federal Reserve District it employed only one-seventh as many people as manufactur ing and somewhat less than the other two branches of basic economic activity—agri culture and mining. EMPLOYMENT IN 1940 Third District United States Thousands Per cent Per cent Manufacturing..................................... Agriculture............................................ Mining.................................................... Construction................... ..................... Other...................................................... 880 170 134 128 1,341 33.2 6.4 5.1 4.8 50.5 23.5 18.5 2.0 4.6 51.4 Total employed........................... 2,653 100.0 100.0 But the importance of any economic activity is not reflected solely by the number of people for which it provides a living. From another point of view, construction, like trade, trans portation, and other services, is an integral part of the economic system. It is related to almost the whole field of raw material production and about 70 manufacturing industries are involved in processing materials for construction. Page Two The industry is characterized by great ir regularity of activity which is related to business cycle fluctuations. Dollar volume of construc tion varies from 5 to 10 per cent of gross na tional product between the low and high points of the business cycle. Since the products of building and construction are among the most durable, demand is easily postponed if the general business outlook is uncertain or unfavor able. On the other hand, as producers’ ex pectations become more optimistic, construction is frequently one of the first industries to re spond. Recognition of the fact that construc tion plays a prominent part in the general busi ness cycle has given rise to a widespread opinion in some circles that careful timing of public construction may be an effective way of reduc ing the great extremes of business cycle fluctua tions. In addition to great irregularity of activity, the building and construction industry has other peculiar characteristics which set it apart from practically every other industry. It uses a tre mendous variety of raw materials; its products are of almost infinite variety in design; and it is widely dispersed geographically. Contracts vary in size from $5 to $100,000,000. Another peculiarity of the industry is its organization. It is generally small scale, complicated, and on the whole poorly organized. In 1938, an aver age year from the standpoint of contracts awarded, there were 150,000 enterprises in this industry and over one-half of the operators, whether contractors or subcontractors, em ployed from one to three workers. A large number of contractors and subcontractors par ticipate in each project; efficiency of work, therefore, may be low because responsibility may be divided. For these reasons the construction industry is generally considered backward in comparison with most manufacturing industries which have made great progress in applying mass produc tion techniques. Because of the varied nature of the industry, however, it may be unfair to make such a comparison. Some types of con struction are more efficiently conducted than others; building is probably on the whole less efficient than other types of construction such as highways, and dams, and housing construc tion is probably less efficient than other build ing construction. Moreover, greater efficiency of operation has been attained in recent years, particularly under the impetus of urgent war demands. CHART I VALUE OF BUILDING CONTRACTS AWARDED MILLIONS THIRD FEDERAL RESERVE DISTRICT TOTAL NONRESIDENTIAL //^ . 1 Pre-war trends ' f k Construction in the Third Federal Reserve District, according to the F. W. Dodge reports RESIDENTIAL ' of contracts awarded, averaged $245 million annually during the two decades from 1919 to 1939. Except for a slight interruption in 1923, activity during the prosperous twenties rose PUBLIC WORKS consistently as business expanded and consumer V AND UTILITIES incomes attained high levels. The economic ex pansion during this period was partly an out growth of the rapidly developing automobile and allied industries. Building and construc tion were stimulated by our growing needs for hard-surfaced highways, service stations, gar COMMERCIAL ages, and other structures related to the pro duction and servicing of automobiles. Increased mobility of the population afforded by the motor car also hastened the development of suburban residential construction. During the subse INDUSTRIAL' quent business depression construction activity declined to almost a tenth of its former peak, while manufacturing, as measured by value added, declined only 50 per cent. From 1933 to the outbreak of the war there was another wave of expansion in construction, and in 1939 total value of building contracts awarded in the Third District was $200 million—about prone to excesses in both the expanding and three times the volume in the preceding de- contracting phases of the cycle. pression period. _ From 1920 to 1922 residential construction in the district rose at a much faster rate than Residential construction, shown in Chart I, construction activity as a whole. This post-war followed the same general course as total con boom was due in part to the unleashing of the struction, but cyclical fluctuations were more housing demand pent up during the war. In violent. They were less violent than in in view of the present accumulation of unpre dustrial construction, however. Residential, cedented amounts of liquid savings, a similar which varies from 20 to 50 per cent of total development is likely to occur upon the removal construction, is characterized by a considerable of current wartime restrictions on residential element of speculation. In his testimony be construction. High levels of residential con fore the Temporary National Economic Com struction came in the middle and late twenties mittee, Willard Thorp estimated that “some after which there was a sharp drop to 1933. The where between one-third and one-half of all one- post-depression recovery was considerably more family residential building is done for selling or rapid than that in total construction, and in renting, and that is mostly for selling.” This 1939 the value of contracts awarded was more is essentially speculative building and therefore than 3y? times above the depression low point. Page Three Nonresidential building depends more on productive activity, financial conditions of busi ness, and enterprisers’ expectations. Chart 1 also shows two important kinds of nonresiden tial building—industrial and commercial. The former includes all types of building for manu facturing, processing, and assembling; commer cial construction consists of such structures as garages, service stations, banks, office and loft buildings, stores, restaurants, and commercial warehouses. Public utilities and public works, another important type of non-residential con struction, are also shown separately on the chart. toward fulfilling the direct wants of consumers. There are evidences that in the last two decades, for the country as a whole, the construction of educational, recreational, and other public fa cilities for consumers has increased in im portance relative to total construction activity. Residential construction averaged about 40 per cent of total construction in this district in the two decades shown in Chart II. As busi ness recovered and incomes rose after the de pression of the early thirties, residential con struction expanded rapidly until checked by the war which required the imposition of re strictions on all unessential construction. It is likely that after the war residential con struction will again attain high levels of activity as a result of the cumulating needs. Industrial construction is characterized by more violent and more frequent fluctuations than commercial construction. Factory con struction declined after the last war and was affected adversely by the 1921 slump. Com Industrial construction experienced wide va pared with physical volume of manufacturing riations in importance, ranging from 29 per output in the Third District, industrial construc tion showed generally similar but more violent cent in the 1920’s when the post-war boom was movements. After reaching a peak in the late in full swing to 3 per cent in 1931. Commer twenties, industrial construction suffered the cial construction ranged less widely—from 17 sharpest decline shown by any of the types of per cent in 1927 to 7 per cent in 1931. The out construction. In the 1938 recession it again standing change in the pattern of construction showed a steeper decline than any other type of over the two decades took place in public utili construction, and by 1939 had recovered to only ties and public works which declined less in amount and consequently were proportionately 70 per cent of the 1937 level. large during the depression, partly as a result On the whole, commercial construction has of Government expenditures for public works. been more stable than industrial construction. Public works and utilities exhibit movements Wartime developments which do not necessarily coincide with fluctua In total war all economic activity becomes a tions of the business cycle. Although utilities part of the total effort. Those branches of in and public works cannot be separated for the dustry which by nature can be utilized immed Third District, data for 37 states east of the iately for war production are pressed into servRocky Mountains indicate that public works construction comprised from 77 per cent of the CHART II two combined in 1939 to 90 per cent in 1932. DISTRIBUTION OF BUILDING CONTRACTS AWARDED The proportion fluctuated during the 1930’s, de THIRD FEDERAL RESERVE DISTRICT clining as business expanded and increasing as PER CENT OTHER NON RESIDENTIAL business receded. As was intended, public COMMERCIAL works’ construction apparently modified some CONSTRUCTION of the extremes of total construction. INDUSTRIAL CONSTRUCTION Pattern of construction by types Construction is part of the process of capital formation which thrives in an expanding econ omy. As a country becomes wealthier it can afford to divert a larger part of its efforts to producing durable goods which in turn will assure a larger volume of consumers’ goods and services in the future. Similarly, as a country builds up its industrial plant it can afford to divert a larger portion of construction activity Page Four PUBLIC WORKS AND UTILITIES 3 RESIDENTIAL 1940 1943 ice; other industries must abandon their peace time products, if not essential to civilian wel fare, and convert to war production; and still others, which are nonessential, are curtailed so as not to divert effort from the common objec tive. Moreover, the shifting character of war is such that an industry which is vital to the war effort at one time may be less vital or non essential at another time. The wartime developments in construction reflect clearly this shifting nature of our war effort. In the pre-defense period during 1939 and the first half of 1940 the construction in dustry was still recovering from the depression of the thirties. Residential construction was re sponding to rising individual incomes and was at a higher level than industrial and commer cial construction combined. Beginning in mid1940 when the national defense program was put into effect, industrial and commercial con struction experienced a sudden and sharp rise as a. multitude of defense construction contracts were made. From 1940 to 1942 the combined value of industrial and commercial building contracts in this district tripled, rising from around $54 million to $161 million. During the same period total construction rose from $222 million to $424 million. Military and naval construction and public works and utilities were largely responsible for the huge increase. In addition to the obvious need for plant ex pansion in the early part of the war period, a large amount of housing was necessary to take care of migrating labor and the tremendous in flux of population experienced by many war centers. But as such housing became adequate, residential construction fell to a level approxi mating its pre-war position. Restrictions on nonessential construction were being tightened constantly. By placing a ceiling on the value of nonessential construction contracts, by gradually lowering this ceiling, and by operating through the medium of priorities, the authori ties were able to control the volume of such construction. An enormous expansion of plant and facilities was necessary as a foundation for the actual production of war materials. Even as war pro duction began to attain unbelievable levels, commercial and industrial construction con tinued to mount, while residential building declined from its 1941 peak. In 1943, how ever, construction fell off precipitously and continued to decline throughout the year. By this time essential construction was largely com pleted and nonessential building continued to be sharply restricted. In the stress of emergency it was neces sary that construction be started immediately and that the building program be coordinated effectively with other segments of the war effort. Much of the construction, particularly military work, naturally fell within governmental func tions. The result was that two-thirds of all con struction in the 37 eastern states from 1939 to 1943 inclusive was for public ownership. (37 Eastern States) Public Private Total 48% 45 58 87 82 52% 55 42 13 18 100% 100 100 100 100 67% 1939......................................................... 1940......................................................... 1941......................................................... 1942......................................................... 1943......................................................... 33% 100% The percentage of building for private owner ship rose to a peak in 1940 but subsequently de clined to a level considerably below its pre-war position. Construction for public ownership rose to a peak in mid-1942 after which it de clined. During the remainder of the war period the volume of construction activity will hinge on military developments. As victory approaches it is possible that civilian construction will grad ually be resumed and restrictions on nonessen tial activity become less rigid. The extent to which construction will be car ried on immediately after the war will depend on the availability of materials and the manner in which individuals and businesses employ their accumulated resources. Construction during the first post-war decade in the 37 states east of the Rocky Mountains has been forecast as $5 billion annually. This volume, which the F. W. Dodge Corporation believes to be a conservative esti mate, would be slightly greater than the average for the 1920-29 decade and almost twice that of the 1930-39 decade. This appraisal takes into consideration deferred demands, housing needs of new families, prospects of industrial and com mercial expansion, and anticipated needs for community developments and public improve ments. Because construction is for the most part essentially a local industry, activity in the Third Federal Reserve District will depend largely on conditions peculiar to this area. Page Five Electrical Machinery Industry Electrical machinery is one of the largest manufacturing industries of the United States. In 1939 the industry produced goods valued at $1,700 million and employed over 250,000 work ers. It turned out a great variety of electrical apparatus for industrial purposes and household use. The relative importance of the major divi sions of the industry is shown in the accompany ing table. . Electrical equipment for industrial use is the largest branch of the industry; it employed 95,000 wage earners in 1939, which represented 37 per cent of all workers in the industry. This division embraces such products as generators, motors, switch boards, electrical measuring in struments, wiring devices, and related items used by the electric light and power industry. The second largest division is communication equip ment, including telephone and telegraph equip ment, radios, radio tubes, and phonographs, and signaling apparatus. This branch employed over 75,000 workers in 1939, or 29 per cent of all workers employed in the industry. The prin cipal components of the “other electrical prod ucts” division are storage batteries, X-ray and therapeutic apparatus. Growth of the industry Electrical machinery has been one of the fast est growing manufacturing industries of the United States. Output increased from $95 mil lion in 1899 to $1,700 million in 1939. During this same period employment rose from 43,000 to CHART 1 ELECTRICAL MACHINERY - NUMBER OF WAGE EARNERS THOUSANDS UNITED STATES 1919 '21 '23 '25 '27 ’29 ’31 '33 '35 '37 '39 Page Six a quarter million workers (Chart I). The vast growth of the industry is the result of (1) a rapidly changing technology in the production, U. S. PRODUCTION AND EMPLOYMENT OF ELECTRICAL MACHINERY 1939 Value of output ($000,000) Wage earners 95,130 19,890 15,696 17,495 9,622 37 8 6 7 4 $ 625 146 120 110 85 36 9 7 6 5 75,627 23,007 29 9 467 175 27 10 256,467 Electrical equipment for industrial use. Electrical appliances............................... Insulated wire and cable....................... Automotive electrical equipment.... Electrical lamps....................................... Communication equipment —including radios and phonographs............. Other electrical products...................... Per cent Per cent 100 $1,728 100 f Source: Census of Manufactures. distribution and utilization of electrical energy; (2) the development of a constant stream of new electrical products for both industrial and household use; and (3) the declining costs of electrical power. In 1943 the average price of residential electricity was 41 per cent of the 1913 price, whereas the cost of living during this period rose 75 per cent. Economic characteristics of the industry One of the outstanding characteristics of this industry is the importance of engineering. Prod uct development ordinarily takes a considerable period of time. Between the laboratory stage and the commercial launching, a great amount of work is required to assure the absence of technical flaws. Many of the 200 firms that participated in the manufacture of mechanical refrigerators in the twenties failed because of errors in designing and engineering, or because they went into mass production before the product had attained technical maturity. Another outstanding characteristic of this in dustry is product diversification. There has been a very definite trend on the part of the leading companies to diversify their output in two distinct ways. Owing to the importance of engineering, the leading companies have fol lowed a policy of manufacturing complete units of such apparatus of which the electrical equip ment is but a part, in order to assure good per formance in the hands of the user. They have also taken on the manufacture of a great variety of products that were not directly related to the electrical equipment that originally consti tuted their principal output. For example, the principal companies have added such lines as electrical locomotives, elevators, Diesel motors, mechanical stokers, and many other items. The industry is also characterized by largescale production. Although there are some rela tively small companies that specialize in one or a few related products, large companies are dominant. Large-scale operation has been a natural development because of the heavy capi tal requirements and control of basic patents. A large amount of capital is required for plant and machinery, particularly in that branch of the industry which manufactures heavy equip ment for industrial use, such as turbines and motor-generator equipment. Furthermore, con siderable capital is required for product devel opment—3 to 5 years or more may elapse before the manufacturer realizes returns from the sale of a new product. Another characteristic is the decentralization of plant extensions. As the leading companies attained larger size, they established regional plants in various parts of the country in order to utilize available supplies of labor and raw materials, and to reduce costs of shipping prod ucts to the market. Since electrical equipment manufacturing is primarily a capital goods industry, its output is subject to severe business cycle fluctuations. For example, value of output dropped from $2,400 million in 1929 to $675 million in 1933, a decline of more than 70 per cent, but with the resumption of improved business conditions, output rose to $1,900 million in 1937. Wartime developments in the industry With the outbreak of the war, demand for products of this industry skyrocketed. Sales of the two leading companies, General Electric and Westinghouse, rose to $2 billion in 1943 which was four times their 1939 output and more than the pre-war output of the entire industry. A large part of the pre-war output, such as gen erators, ship propulsion machinery, searchlights, and electrical instruments, was easily adaptable to war purposes. In the radio and home ap pliance fields, however, some difficulties were encountered in converting to radar and related communication equipment. This shift was made early in 1942 as a result of growing military needs and the shortage of labor and copper, the industry’s principal raw material. The war stepped up considerably the tempo of technological change. This may be illus trated with reference to the developments in power-generating machinery. In the late twen ties the mercury-arc rectifier began to replace the old rotary type of apparatus to convert al ternating to direct current which is required in numerous manufacturing industries. Just before the outbreak of the war, a new device for con verting AC to DC appeared on the market. This apparatus, the ignitron, developed by Westinghouse, was accepted rapidly because of its im proved efficiency. It found its greatest appli cation in the manufacture of magnesium and aluminum which require DC power. These new devices released substantial tonnages of copper for ship propulsion machinery and other vital war needs. Further examples of wartime changes in technology are portable packaged power plants, increased application of electrical welding, improved incandescent and fluorescent lighting, and high frequency induction applied to heating metals and setting plywood plastic aircraft parts. Another outstanding wartime development is the standardization of design and repetitive manufacture which has speeded up war produc tion. For example, large turbines were custombuilt before the war, but as a result of the huge wartime ship-building program, marine turbines were standardized and as a result they were built ahead of schedule and at lower cost to the Government. After the war, public utilities may benefit by the technical advantages of such standardization. Special committees of the American Society of Mechanical Engineers and the American Institute of Electrical Engineers have studied the subject over the past two years and report considerable progress. Nevertheless, standardization of turbines for public utilities was questioned at the recent in dustry forum conducted under the auspices of the Philadelphia Committee for Economic De velopment. In view of the variations in steam conditions found in different power plants and differences of opinion among manufacturers and buyers as to turbine specifications, standardiza tion, though desirable from the standpoint of economy, is expected to take place rather slowly. Reconversion and post-war outlook The post-war period of transition to the manufacture of peacetime products should not be difficult for most branches of the electrical Page Seven machinery industry. The manufacturers of heavy equipment for industrial use can switch to their peacetime products almost immediately because they will not have to re-design their products or change the equipment in their plants. The pre-war manufacturers of radios, refrigerators, and household appliances, it is estimated, will require from five to six months to re-convert to their regular line of products. chart n ELECTRIC POWER OUTPUT VS CAPACITY TOTAL CAPACITY MILLIONS OF KILOWATTS OUTPUT The long-time outlook for the industry as a whole is quite favorable but complicated by the great variety of its products. For this reason, the major branches must be considered separately. Post-war demand for heavy equipment such as public utility and industrial power plant facilities is expected to be well sustained despite the fact that considerable power producing ca pacity was installed in recent years. In 1943 the power output of the country’s public utili ties was almost double the 1935-39 average; yet the industry increased its capacity only 30 per cent. Meeting these increased loads was ac complished chiefly by multiple-shift operation of war plants and the flexibility of power distri bution afforded by the power industry’s inter connected lines. After the war, total demand for power will doubtless recede from its high wartime level, but this is not expected to bring about any great shrinkage in demand for power generating equipment. On the contrary, it is estimated that public utility expenditures for new construction in the post-war decade will average 500 to 800 million dollars annually. This seeming paradox grows out of peculiarities of the power industry and unusual wartime developments. Electric power cannot be stored; it must be generated as required and at certain hours of the day individual plants must be prepared to supply rapidly developing peak demands far above the average load. Thus, each plant must have considerable reserve capacity. During the war many plants came perilously close, on cer tain occasions, to their critical top capacity. It cannot be assumed that reserve capacity will be restored automatically as a result of dis appearing wartime power demands because substantial amounts of war-built capacity were installed in the Southwest and Northwest for defense plants producing aluminum and other urgent war materials. Power plants in the longPage Eight established industrial centers will need new equipment for both replacement purposes and to take care of normally increasing power re quirements which the companies were unable to provide for during the emergency when cop per was scarce. In many localities, transition from war to peace will entail for an extended period of time little or no reduction in peak capacity re quirements despite substantial declines in kilo watt hour output. Losses of wartime industrial demand will be absorbed in part by rapid re building of the commercial load—electric signs, gas stations, drug stores, and similar uses which have been curtailed materially or eliminated completely because of the war. This is especi ally true of diversified areas like Philadelphia which have large residential, industrial, and commercial power requirements. CHART III CONSTRUCTION EXPENDITURES OF ELECTRIC UTILITIES MILLIONS JUNITED STATES IOOO '38 '40 The need for replacing obsolescent equip ment with improved and more economical ma chinery will be another source of post-war de mand. Turbines are being improved constantly by the use of new alloy metals that withstand higher steam pressure and temperature. The topping turbine is an example of advanced power technology growing out of recent im provements in metallurgy. Future develop ments may be expected in the mercury turbine and also the gas turbine now used in conjunc tion with the Houdry process of petroleum re fining. The electrical machinery manufacturers are optimistic with respect to the post-war market for lighter industrial equipment such as elec tric motors. There is expected to be a consider able backlog of demand in these lines. Machine tools for example, most of which are equipped with built-in motors, quite customarily are re placed every three or four years by reason of the high rate of obsolescence. Post-war prospects for electrical household appliances are distinctly favorable. In the years before the war this branch showed a rapidly rising trend, as indicated in Chart IV. The market for household appliances has been ex panding as a result of the growing availability of electricity at constantly reduced costs, im proved design and performance of equipment, aggressive merchandising by the manufacturers, distributors, and public utilities, and the gen erally rising consumer buying power. About 28 million homes and farms in the United States are wired for electricity; and in view of the war time curtailment in the manufacture of house hold appliances, the accumulated backlog of demand, together with the large post-war pur chasing power that will be available, the in dustry is expecting a huge post-war market and is preparing to meet it. In 1943, 63 per cent of the wired houses of the country had electric washers, half of them had floor cleaners, a fifth had electric heaters, only 13 per cent had elec tric ranges, and only 7 per cent had ironers. The pre-war market for refrigerators was growing rapidly, as indicated in Chart IV. Physical volume of output rose from 840,000 units in 1929 to 3*4 million in 1941. Although 72 per cent of the wired homes now have re frigerators, a large post-war market is expected because of the need for replacing obsolete and worn out models and the development of new CHART IV VALUE OF PRODUCTION OF ELECTRICAL EQUIPMENT UNITED STATES MILLIONS GENERATORS SWITCHBOARDS HOUSEHOLD ' APPLIANCES MILLIONS MOTORS AND PARTS RADIOS AND TUBES REFRIGERATORS ■25 '27 '29 '31 '33 '35 '37 '39 '25 '27 '29 '31 '33 '35 '37 '39 machines like the deep-freeze unit. One au thority has estimated an annual post-war de mand of 2 to 3 million units almost indefinitely if price reduction policies of former years con tinue. In view of the expanding market for radios and radio tubes as shown in Chart IV, rising de mand is expected to continue in the post-war period. Output of radio receiving sets rose from 4.4 million units sold at an average price of $136 in 1929 to 13.7 million units sold at an average price of $30 in 1941. The war gave this branch of the industry a tremendous stimu lus. Since early in 1942 the entire capacity of the industry was given over to the production of military communication equipment. Although there are 30 million receiving sets in the 28 million wired homes of the United States, the Page Nine market is by no means saturated because many homes will be equipped with two or more sets. Furthermore, there is a large potential market for automobile radios since only one-third of the cars now have them and the industry may undergo vast technological change in years to come. Frequency modulation had just reached the commercial stage of development when civilian radio production was cut off, and after the war, demand for FM receiving sets is ex pected to increase very substantially. One manufacturer expressed the opinion that there will be a post-war demand for 28 million re ceiving sets of all kinds after the war. Obvi ously the industry could not satisfy such a huge market in one year. A recent survey of post-war prospects of the entire household appliance field, based upon the average estimate of 100 distributors, shows ex pected sales in the first post-war year to be 75 per cent above the 1940-41 average. The esti mates range from a 37 per cent increase for roasters to a 480 per cent increase for dish wash ers. This same survey reveals similar percent age increases in anticipated sales to be sustained for at least five years after the war. A substantial rural market for electrical ap pliances is also expected to develop after the war. About 2.4 million of the country’s 6 mil lion farms are already electrified and one-third of these, or 800,000, were wired in the three years preceding Pearl Harbor. It was pointed out at the industry forum in Philadelphia that the market for electrical ap pliances may be enlarged quite substantially by a well-planned program of standardization. The need for simplification and standardization may be illustrated by the fact that, before the war, there were almost 700 different models of water heaters. Reduced costs and wider markets can be obtained not only for water heaters but also electric ranges, refrigerators, transformers, meters, and wiring devices. Another avenue to larger post-war markets is the need for rewiring homes. As a result of the growing number of electrical appliances used in the home, household wiring is said to be hopelessly inadequate. It is alleged that few of the 650,000 wired houses in the Philadelphia area are adequately wired and it is not merely a case of too few outlets but insufficient copper to carry the load satisfactorily. Page Ten Export markets Electrical machinery is typical of American manufacturing industries in that export markets have not been cultivated aggressively. Exports of electrical machinery are ordinarily about 2 to 5 per cent of the dollar value of output. The reasons for the small percentage of exports are (1) the large domestic market, (2) competition of German and English firms, and (3) a large part of the equipment manufactured here is not suitable to the needs of our foreign markets. Many of the foreign countries use 50 cycle 220 volt current for which equipment produced here is not adapted. However, in view of the pro ductive capacity of the domestic industry and the large foreign market that may be expected after the war as a result of the wartime destruc tion and the inability to obtain equipment dur ing the war, this field might be exploited with profit if equipment is designed to meet the pe culiar needs in these markets abroad. The electrical machinery industry of Philadelphia The electrical machinery industry of Phila delphia produced $76 million worth of products and employed 11,000 workers in 1939. By 1942 both output and employment had doubled as a result of the war stimulus. Based upon esti mates turned in to the Philadelphia Committee for Economic Development, the local industry, which manufactures radio equipment, storage batteries, switchgear, insulated wire products, telephone equipment, small household appli ances, refrigerators, electrical instruments, and other items, expects to produce $150 million worth of products in the first year after the war. This would be 96 per cent above its 1939 output. Employment in the first year after the war is expected to be 19,000 workers which would be 75 per cent higher than the 1939 em ployment. About 95 per cent of the industry’s current output is for war purposes, but the industry does not anticipate a serious reconversion problem. Our survey shows that 42 per cent of the firms in Philadelphia will have no reconversion prob lem, a like proportion reports that reconversion will require three months or less, and the re maining 16 per cent of the firms expect to com plete their reconversion in three to six months. Manufacturers expect to meet the costs of re conversion from their own resources. Returns from the firms reporting to the spe cial survey of the Philadelphia Committee for Economic Development indicate that 93 per cent of the companies have designated an in dividual in their organization to take charge of post-war planning. About 43 per cent of the reporting firms are planning to produce new products after the war and the reports indicate that new products will constitute 5 per cent of their anticipated post-war output. This estimate applies to the entire range of electrical prod ucts; in certain individual lines, such as radios, laundrying equipment, and household appli ances, sales are expected to be much higher. Business and Banking (Continued from page 1) authorizations were in line with the agency’s announced policy to allow any small producers —generally those employing 50 or less workers —to participate in the program, provided neither manpower nor materials were diverted from the war effort. Industry. Industrial production in the Phila delphia Federal Reserve District decreased an other 2 per cent on an adjusted basis in Sep tember to a level 7 per cent below a year earlier. The output of factory products and crude oil declined in the month while the production of coal increased somewhat, owing to a higher rate of operations at anthracite collieries. The de crease in manufacturing was chiefly in nondur able goods lines; in heavy industry, which ac counts for the bulk of war production, opera tions were maintained at about the August level. In the nine months ended September produc tive activity was down about 2 per cent from a year earlier, reflecting decreases in the output of factory products and petroleum, offset in part by an increase in the production of anthra cite and bituminous coal. Employment in Pennsylvania factories de clined slightly further in September, continuing a gradual downward tendency in evidence for nearly a year. Small decreases occurred in all major lines except nonferrous metal products, where the number of wage earners was about the same as in August. Payrolls also showed a slight reduction in September, following equally narrow fluctuations in other recent months a little below the wartime peak reached early this year. Changes were mixed, with increases re ported for nonferrous metal, food, leather, and paper products, while declines occurred in the case of transportation equipment, textiles, and building materials. The number employed was about 5 per cent less than in September 1943, but the volume of wage disbursements remained about the same. Total working time has fol lowed rather closely the trend of employment, declining gradually since last fall and reaching in September a level 4 per cent below a year earlier. The average weekly income of wage earners at reporting plants in Pennsylvania declined slightly in September from a near-record level of $48.02 in the preceding month. Earnings on this basis were $2.14 a week more than a year ago, and over the entire period of defense and war activity they have shown an increase of about 80 per cent. The decrease from August to Sep tember was attributable to a reduction in aver age working time from 45>^ to 45 hours a week, a change that was influenced in part by the occurrence of Labor Day in the latest reporting period. Average hourly earnings rose to a new peak of $1.07j4 in September, continuing a rising tendency that has been interrupted on but few occasions since the middle of 1940. Production of coal in this district, as in the country, has risen somewhat above the midsumPR0DUCTI0N AND PRICES PERCENT PRODUCTION * WHOLESALE COMMODITY PRICES US ' COST OP LIVING IN PHILADELPHIA 1940 1941 1943 1944 Page Eleven the working force available when the nation went to war. FACTORY PAYROLLS PENNSYLVANIA PERCENT The manpower situation in Pennsylvania’s an thracite field likewise is critical, with the pro portion of miners who have left the collieries thus far in the war period nearly the same as in the country’s bituminous coal industry. Approxi mately 72,000 hard coal miners were employed at the beginning of September, as against nearly 88,000 reported on January 1, 1942. The in dustry’s employment is said to be at the lowest level in the past seventy-five years. CAPITAL . GOODS consumers’ GOODS \ 1939 1940 1941 1942 1943 1944 mer low, although the current rate of output still suggests an aggregate tonnage for the year ending next March considerably short of the over-all requirements estimated by the Adminis tration for Solid Fuels. The anticipated deficit for anthracite has not changed significantly in recent months, but the indicated shortage of bituminous coal at the end of September was greater than expected earlier. Further in creases in the production of both fuels are in prospect locally and nationally, as the labor difficulties involving supervisory employees in Pennsylvania and several other important pro ducing states appear to have been settled. Work stoppages incident to these disputes are said to have prevented the production of substantial tonnages of anthracite and bituminous coal be tween the middle of June and the end of September. Although the expected shortage of solid fuels this coal year reflects to some extent a scarcity of new mining equipment and repair parts, transportation difficulties, and various other wartime factors, the greatest deterrent to in creased production is the difficulty of maintain ing an adequate force of experienced labor at the collieries. The critical nature of the man power problem in the bituminous industry is emphasized by reports from the Solid Fuels Administration anticipating a shortage of 32, 500 workers within six months. Employment in September, estimated at about 390,000, was less than at any time since the turn of the cen tury. In the thirty-three months following Pearl Harbor, the Administration reported the loss of some 80,000 employees, or nearly one-sixth of Page Twelve Construction activity continues limited to the few remaining military installations still needed, and to war-essential projects, such as housing and public works, designed for civilian use. Following small increases for several successive months, the dollar volume of new construction throughout the country decreased 4 per cent in September to a level 44 per cent below a year earlier. According to the War Production Board, the total value of construction installed during the first nine months of 1944 approxi mated $2.9 billion, as against nearly $6.5 billion in the same period last year. The proportion of privately financed work rose steeply from Janu ary through September, accounting for almost two-fifths of the aggregate dollar amount, com pared with less than one-fifth a year earlier. In the Philadelphia Federal Reserve District contemplated construction, as indicated by the value of contracts awarded, decreased 5 per cent from August to September and was nearly one-third less than a year ago. Although resi dential awards showed an increase over August, dollar volume was 64 per cent less than in the preceding year, and the smallest of any Sep tember in the past decade. Awards for nonresidential buildings declined about one-fifth in the month to approximately the level of a year earlier. Moderate increases were reported in September in contracts for factories and un classified construction, but sharp declines oc curred in other categories. Total awards in the nine months ended September were only twothirds of the dollar volume reported last year and they were the smallest of any similar period since 1935. In spite of the persistence of unfavorable con ditions in some sections over much of the grow ing season, total output of farm products in the country is expected to rank with that of 1942, as the greatest ever achieved. An easier live stock feed situation is in early prospect, owing in large part to a record crop of corn, and to the near record production of other feed grains only recently in extremely short supply. In this district, the past season was character ized by an unusually late spring, a prolonged summer drought, and an early fall frost which damaged late vegetables and checked the growth of pastures. Seasonal farming opera tions were delayed repeatedly by unfavorable conditions; this created a difficult situation for many growers, particularly since the supply of farm labor remained tight throughout the sea son. Nevertheless, with an increase this year in the total planted acreage, farmers in the dis trict as a whole are expected to harvest sub stantially larger crops of corn, wheat, oats, and tobacco than in 1943. Estimated yields of hay and white potatoes may be somewhat smaller than a year ago, although output will not fall far short of the 1939-43 average. Vegetable and truck crops suffered most from adverse growing conditions this past season. The pro duction of orchard fruits generally was much larger than a year ago; this was particularly true of the apple crop, which is expected to be considerably above average. Improvement in the rail freight transportation situation in Philadelphia was reflected in a re cent announcement by the Office of Defense Transportation that after November 1 the agency will discontinue its supervision of all rail shipments through the port. A similar step is contemplated in several other Atlantic Sea board cities, including both New York and Balti more. Freight carloadings in the Allegheny section as a whole decreased about 8 per cent on an adjusted basis from August to September to about the level of a year ago. Declines in the month were reported in all commodity classi fications except grain products, and they were especially pronounced in the case of solid fuels, ore, and livestock products. Shipments in the nine months ended September were up about 6 per cent from a year earlier, reflecting larger loadings in all categories of freight. ume in September 1943. Increases over August occurred in all lines but shoes and paper; sales were larger than a year ago only in the case of electrical supplies, groceries, and hardware. Dollar sales in the aggregate were little larger in the first nine months this year than last. Wholesalers’ inventories decreased somewhat in September, but were larger than a year earlier, particularly in the case of electrical sup plies, which recently have been produced in somewhat greater quantity by permission of the War Production Board. Retail sales by department and men’s apparel stores showed greater than seasonal gains in September, reflecting in part early purchases of gift merchandise for shipment overseas. At women’s apparel stores the increase over August was about in line with expectations, but at shoe stores, dollar volume on an adjusted basis showed a small decline in September. Increases over a year ago and the first nine months of 1943 occurred in all reporting lines except shoes. Dollar sales by furniture stores expanded con siderably further from August to September and were nearly one-tenth greater than a year earlier. Inventories at department and women’s ap parel stores increased much less than usual in September, and they showed a contra-seasonal decline at establishments specializing in foot wear. Stocks at furniture stores were somewhat smaller than in August. With the exception of shoe stores, retailers’ inventories at the close of September were little smaller than in the same period last year. DEPARTMENT STORE SALES AND STOCKS THIRD FEDERAL RESERVE DISTRICT PERCENT STOCKS SALES Wholesale trade in this district in creased moderately from August to September, as retailers began purchasing in anticipation of the holiday season. Total value of sales in eight reporting branches rose 5 per cent in the month, but was a little short of the dollar vol Trade. ADJUSTED FOB SEASONAL VARIATION 1939 1940 194 1 1943 1943 1944 Page Thirteen Banking conditions. The Sixth War Loan Drive, to raise $14 billion from non-bank inves tors, will run from November 20 through De cember 16. Marketable issues will be virtually identical with those tendered in the last drive and comprise the following: 2y2% Treasury bonds of 1966-71 2% Treasury bonds of 1952-54 1*4% Treasury notes of 1947 %% Certificates of indebtedness Sales of savings bonds—Series E, F, and G— and savings notes processed by the Reserve Banks during all of November and December are to be included in drive totals. Apart from the drive, commercial banks with savings bal ances are again to have the opportunity for limited investments in certain issues. In line with somewhat smaller national goals, the over-all quota for Pennsylvania was reduced from $1,082 million in the Fifth Drive to $938 million, and the quota for sales to individuals from $442 million to $370 million. Actual sales in the Fifth War Loan totaled $1,251 million, in cluding $428 million to individuals, partnerships and personal trust accounts. INVESTMENT IN TREASURY SECURITIES MILL.* REPORTING MEMBER BANKS THIRD FED. RES. DISTRICT LOAN WIVES BONDS CERTIFICATES \ m /S-/’ NOTES BILLS O AJ 1943 1944 liquidation of securities, and principally from a decrease of $190 million in holdings of Treasury bills and certificates. As shown in the chart, this development is typical of a between-drives period. Holdings of such securities usually are expanded as reserves are released during a drive by the flow of funds into reserve-free war loan accounts; but with the reversal of this flow, they are drawn down to support reserve positions. Loans decreased $30 million, partly as a result of repayments on loans to purchase or carry Government securities, which reduced these ad vances to the level prevailing before the last loan drive. A large supply of funds will be available for investment during the loan drive. As of the end of June liquid assets of individuals were estimated roughly to be about $111 billion, in cluding some $72 billion of bank deposits and currency. Notes of this Bank in circulation on October 25 were nearly two and one-half times The growth in reserves of all member banks the amount outstanding at the time of Pearl in the district has been small in recent weeks, Harbor. With heavy Government expendi but over the period from July 12 to October 25 tures, adjusted demand and time deposits at re a rise of $40 million to $682 million was re porting banks in leading cities of the Third corded. Currency outflow of $84 million and Federal Reserve District have risen consider net payments to the Treasury in somewhat ably in recent months. The latest report shows larger amount were more than offset by gains $1,888 million, exclusive of State and local gov in interdistrict commercial transactions, partly ernment balances, exceeding slightly the record the result of bank sales of securities, and by in high point at the opening of the Fifth Drive. creased use of Reserve Bank credit. Discounts State and local government deposits were re and advances by this Bank rose from $1 million duced considerably during that drive and sub to nearly $13 million, a new high for recent sequently changed little. A decrease of nearly years, and Treasury bills held under repurchase $200 million to $2,553 million in total deposits option moved up from $113 million to $192 over the period from the end of the Fifth War million. Loan to October 25 reflected chiefly active with drawals from Federal Government balances. Country banks continue to hold the bulk of the excess reserves of all member banks in this Reductions in loans and investments of the district. In the first half of October their average reporting banks over the past three and one- excess reserves were $61 million, equal to 25 per half months were sufficient to offset the decline cent of reserve requirements; for the member in aggregate deposits and to add moderately to banks in Philadelphia these figures were re their reserves. The bulk of the funds came from spectively $11 million and 3 per cent. Page Fourteen BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Adjusted for seasonal variation Per cent cl ange Indexes: 1923-5=100 Sept. Aug. Sept. 1944 1944 1943 Sept. 1944 from Mo. ago Year ago _ - INDUSTRIAL PRODUCTION MANUFACTURING.............. Durable goods........................ Consumers’ goods................ Metal products....................... Textile products..................... Transportation equipment. . Food products......................... Tobacco and products.......... Building materials................. Chemicals and products. . . . Leather and products........... Paper and printing................ Individual lines Pig iron..................................... Steel........................................... Silk manufactures.................. Woolen and worsteds............ Cotton products..................... Carpets and rugs.................... Hosiery..................................... Underwear................................ Cement..................................... Brick.......................................... Lumber and products........... 141p 144p 225p 88p 177 66p 570 109p 80 34 L70 96p 98 * 108 144 80 57 46 54 68 136 30 48 30 144 147 225 93 172 72 584 117 90 34 164 99 98 152 156 254 87 181 r 66 705r ill 92 37 164 100 97 - 2 - 2 0 - 6 + 3 - 9 - 2 - 7 -10 + i + -i - 3 0 114 135 88 59 49 59 80 151 28 49 30 116 149 81 54 52 46 74 146 40 54 25 Slaughtering, meat packing. Sugar refining.......................... Canning and preserving.... Cigars........................................ Paper and wood pulp........... Printing and publishing.... Shoes.......................................... Leather, goat and kid........... Paints and varnishes............. Coke, by-product................... COAL MINING........................ Anthracite................................ Bituminous............................... CRUDE OIL.............................. ELEC. POWER—OUTPUT.. Sales, total............................... Sales to industries.................. BUILDING CONTRACTS TOTAL AWARDSt................. Residentialf............................. Nonresidentialf...................... Public works and utilities!.. 107 60 122 79 81 102 107 85 103 172 83 81 101 356 428 433 336 123 113 135 89 85 101 118 81 98 171 81 78 106 382 442 442 320 110 98 140 r 91 83 99 112 88 103 172r 83 81 102 r 403 414 442 r 347 - 5 + 7 - 9 - 4 - 7 - 8 -15 -10 + 7 - 2 0 0* -13 -46 -10 -11 - 4 +1 - 9 + 5 + 6 + 7 + 3 + 4 - 5 - 7 - 3 - 2 + 5 41 7 72 76 49 8 87 99 49 36 59 47 -16 -11 -18 -23 + _ — _ _ + + _ _ _ + + _ _ __ + + — — — _ + _ + — — + _ — 7 7 11 1 2 0 19 2 12 7 3 4 2 7 3 1 6 11 17 8 7 25 12 17 g* 3 38 13 14 2 3 5 4 0 1 0 0 1 12 4 2 3 16 80 _ 21 + + 61 _ * Unadjusted for seasonal variation. t 3-month moving daily average centered at 3rd month. Not adjusted 1944 from 9 mos. 1943 _ _ + 2 2 5 2 3 3 9 10 16 18 4 4 3 Sept. Aug. Sept. 1944 1944 1943 141p 144 145p 148 181 68 539 572 120p 119 93 96 37p 38 168 164 105p 101 98 96 183r 66 668 r 121 106 39 163 109 96 4 0 1 1 18 + 3 10 __ 9 _ 41 18 _ + 14 101 137 80 62 43 54 68 136 35 48 31 100 137 86 61 44 55 70 140 35 51 33 109 141 81 58 49 46 74 146 46 55 27 + 21 + 28 + 11 16 0 + 4 5 _ 3 + 5 + 5 + 7 + 6 + 8 _ 11 + 6 + 6 + 7 109 52 165p 91 81 101 122 88 98 166 83 81 103 356 420 429 356 105 97 149 95 85 98 126 77 100 168 80 78 100 382 420 420 330 112 84 182 106 83 98 128 91r 98 165 84 r 81 104r 403 406 438 368 40 9 67 69 48 9 80 86 48 42 56 43 _ + __ + + 180 152 156 _ + + _ _ 50 65 40 41 p—Preliminary, r—Revised. Fac tory emplo yment month and year ago Aug. 1944 Altoona............... - 4 — 3 — 1 — 3 - 1 — 1 0 Sept. 1943 — + 6 1 0 6 6 — — - 7 — 5 +18 Fac tory pay rolls Bui ding per mits va lue Aug. 1944 Sept. 1943 Aug. 1944 Sept. 1943 + - + 7 +133 + 72 +661 - 96 - 54 +529 1 8 + 4 — 5 - 1 +100 + + 10 + + + + + + + + + + 32 22 29 18 41 52 34 35 34 28 81 - 45 69 - 25 80 0 Scranton............. - 7 - 25 49 + 97 14 0 +12 Wilkes-Barre.... - 6 +35 + 44 +120 -11 Williamsport . . . - 1 - 1 - 9 - 6 + 8 Wilmington........ - 2 -14 - 6 -16 - 71 - 41 + 18 0 York..................... — 5 + i +325 +255 + 15 * Area not restricted to the corporate limits of cities given here. Philadelphia.... - 3 - 3 +37 Aug. 1944 Sept. 1943 +15 +27 + - + +30 +16 +10 +15 +26 +21 +20 +10 +21 131 180 49 75 51 82 135 98 112 - 4 5 3 9 -11 -16 - 4 - 3 + 2 - 3 102 101 0 - 1 0 98 96 330 491 96 + 5 345 - 4 131 238 -10 266 + 7 146 155 148 169 169 159 + 4 - 1 - 1 0 0 +2 8 0 - 9 -25 +18 - - 1 +5 0 0 -2 Manufacturing Em ployment* Payrolls* Per cent Per cent Sept. chang e from Sept. chang e from 1944 1944 index Aug. Sept. index Aug. Sept. 1944 1943 1944 1943 Indexes: 1923-5=100 TOTAL.............................. Iron, steel and products.. . . Nonferrous metal products. Transportation eq uipment. 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. ... 116 126 206 158 78 71 104 126 83 51 116 72 99 93 - 1 - 1 0 - 2 - 2 - 2 - 1 - 1 - 2 - 3 - 1 — 2 - 2 - 1 - 5 - 4 + 7 -11 - 6 - 5 - 7 + 4 - 8 0 - 6 200 279 449 278 119 110 160 196 126 83 209 — 1 o + 4 - 8 - 1 — 1 + 1 + 1 - 2 — 4 — l - 3 0 152 138 + 2 + S + 4 + 6 51 147 78 - 3 +1 - 9 -14 + 5 -19 75 326 117 + 3 + 6 -32 — 7 +19 —31 +13 + 2 + 2 +12 * Figures from 2836 plants. Debits Sept. 1943 +12 Pa yrolls Per cent Per cent Sept. change from Sept. change from 1944 1944 index Aug. Sept. index Aug. Sept. 1944 1943 1944 1943 GENERAL INDEX......... Manufacturing................... Anthracite mining............. Bituminous coal mining. . Building and construction. Quar. and noninet. mining. Crude petroleum prod.. . . Public utilities.................... Retail trade......................... Wholesale trade.................. Hotels. . . *.......................... Laundries............................. Dyeing and cleaning. . . . . Factory workers Averages September 1944 and per cent change from year ago Re tail sa les Aug. 1944 Employment Indexes: 1932=100 Hours and Wages Local Business Conditions* Percentage change— September Industry, Trade and Service 2 1 1 +12 - 1 + 4 +58 0 + 3 +16 -10 8 +23 -18 - 6 0 -20 - 4 TOTAL............................ Iron, steel and prods... Nonfer. metal prods.. . Transportation equip.. 1 extiles and clothing. . Textiles........................ Clothing...................... F ood 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. Wee kly work ing tim e* Hou rly earniilgS* Wee kly earnii igst Aver age Ch’ge Aver Ch’ge Aver Ch’ge hours age age 44 9 46.5 46.2 45.3 39.3 40.4 36.7 44.3 40.5 43.1 46.0 42.8 44.5 42.5 43.2 45.7 43.6 * Figures from 2688 plants. 0 $1,075 + 5 $47.96 0 1.143 + 4 53.15 + 2 1.003 + 4 46.33 - 5 1.252 + 7 56.73 .785 + 7 30.80 +1 + 2 .802 + 6 32.36 .738 +10 27.52 + 1 + 2 .810 + 4 36.14 .935 + 4 37.77 + 2 0 .786 + 6 33.67 + 4 1.057 + 2 48.57 .767 + 7 33.02 + 6 .924 + 5 41.36 + 3 + 3 1.071 + 3 45.64 + 5 + 4 + 6 + 2 + 9 + 7 +11 + 7 + 6 + 5 + 6 +14 + 8 + 6 + 3 + 5 .629 + 5 27.17 + 8 1.073 + 7 49.06$ + 13 -11 .898 - 4 39.17 -15 t Figures from 2836 plants. Page Fifteen Distribution and Prices Per cent change Adjusted for seasonal variation ®l Inventories _ Month Year ago ago mos. 1943 - 2 -15 - 3 -14 + 8 + 3 + 3 -13 - 7 + 2 + + Sales 1944 from + 5 —24 + 5 + 7 + 4 + 8 + 2 +15 - 7 Wholesale trade Unadjusted for seasonal variation + 5 - 1 +40 + 4 + 5 - 1 - 8 2 6 2 2 1 3 2 Indexes: 1935-1939=100 + + 2 3 4 7 5 0 + 9 Sept. Aug. Sept. 1944 1944 1943 RETAIL TRADE Sales Department stores—District........................ Philadelphia............... Women’s apparel.............................................. Men’s apparel................................................... Shoe...................................................................... Prices Month Year ago ago 149 r 145r 137 145 133 84 156 157 181 r 91 12 15 16 9 - 2* +14 137 130 89 146 171 191 100 145 123 149 133 90 176 195 214 103 137 137 138 131 87 145 183 200 109 131 123 - 8 - 2 - 2 -17 -12 -11 - 2 + 6 -10 - 1 0 + 2 + 1 - 6 - 5 - 8 +u 0 + 6 + 2 + 4 +13 + 4 + 8 + 4 +13 +18 114 118 109 - 3 + 5 +14 220 -60* —69* + 8 -75* -83* -13 Sept. Aug. Sept. 1944 1944 1943 — 15 - 3* 77p + 2 + 82 + 1 0 - 1 + 1 + 39 +101 + 55 + 23 + + + + + + + + + + + + 2 2 1 7 0 + 3 +11 + 4 1944 from 9 mos. 1943 + 10 0 +39 - 1 +13* 173 162 179 171 151p + 9 + 6 +10 + 5 - 3 +12 +27 - 4 +10* 152r 148r 160 135 157 123 107 122 97 106 Inventories Per cent chang e from Sept. 1944 Month Year Aug. 1939 ago ago Basic commodities 0 (Aug. 1939=100)... . 182 Wholesale 0 104 0 123 - 1 104 0 99 Aug. Living costs (1935-1939 =100).... 1944 0 126 0 126 136 + 1 0 139 0 107 0 109 0 Housefurnishings. . . 138 0 Other.......................... 120 Sept. 1944 from 158 143 153 133 129 170 157 153 184 128p Source: U. S. Department of Commerce. -------------------------------- Not adjusted Per cent ch*mg© Sept. 1944 from 28 28 46 41 4 13 37 19 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 * Computed from unadjusted data. Source: U. S. Bureau of Labor Statistics. 176 191 Check payments................................................ p—Preliminary. 165 165 3 83 94 154 142 92 161 276 202 125 143 148 151 137 90 160 290 199 125 133 132 154 142 90 160 295 212 137 130 148 101 99 95 -69* 3 -86* I + 6 172 7 3 157 12 6 198 79p r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Changes Changes in weeks ended — Changes in— Reporting member banks (Millions $) Oct. 25, 1944 One year Commercial loans.................. $ 235 40 Loans to brokers, etc............ 12 Other loans to carry secur... 38 Loans on real estate.............. Loans to bonks....................... 102 Other loans.............................. -$ t + 5 -$ n + — - — 5 - 4 Sept. 27 Oct. 4 Oct. 11 Oct. 18 Oct. 25 weeks Sources of funds: _ ... Reserve Bank credit extended in district............ Commercial transfers (chiefly interdistrict).... Treasury operations.................................................. Five weeks 1 3 1 in five Third Federal Reserve District (Millions of dollars) +28.3 - 8.8 -18.4 -12.4 +18.6 - 6.0 + 1.8 + 6.6 +23.6 -12.1 - 4.3 +13.0 + 2.6 - 5.3 +12.0 + 8 2 + 6.8 +24.2 Total............................................................................. + i.i + 0.2 +32.0 - 3.4 + 9.3 +39.2 + + + + + + 6.7 8 8 2.2 0.1 +18.6 +15.9 - 2.5 - 0.0 + + - + + + + 2.7 6.5 0.1 0.0 +34.9 + 4.1 + 0.2 + 0.0 + 0.2 +32.0 - 3.4 + 9.3 +39.2 Uses of funds: Currency demand....................................................... Member bank reserve deposits............................... “Other deposits” at Reserve Bank....................... Other Federal Reserve accounts............................ Total loans............................ $ 427 -$ 6 -$ 22 Government securities.......... $1599 62 Obligations fully guar’teed.. 156 Other securities...................... —$72 -$ 48 — 10 Total............................................................................. Total investments............... $1817 — $73 -$ 88 Total loans & investments. $2244 Reserve with F. R. Bank.. . 410 31 Balances with other banks.. 79 52 Other assets—net................... —$79 + 12 + 4 + 6 + 1 -$110 + 46 4* i + 2 - 10 Member bank reserves (Daily averages; dollar figures in millions) Held +$74 + 1 -130 — 15 + 12 +$224 4- 26 — 357 + 11 + 12 + 4 Phila. banks 1943: Oct. 1-15.. 1944: Sept. 1-15. . Sept. 16-30. . Oct. 1-15.. $347 372 379 378 $329 364 367 367 $18 8 12 11 + + Country banks 1943: Oct. 1-15 . 1944: Sept. 1-15 .. Sept. 16-30. . Oct. 1-15. . 272 296 309 304 196 238 241 243 76 58 68 61 Liabilities Demand deposits, adjusted.. $1751 187 Time deposits.......................... U. S. Government deposits . 268 347 Interbank deposits................. 12 Borrowings............................... 17 Other liabilities....................... 234 Capital account...................... Page Sixteen 2 9 Re quired Ex cess Ratio of excess to re quired 6% 2 3 3 39 24 28 25 5.7 4.9 0.3 0.0 + i.i Federal Reserve Bank of Phila. (Dollar figures in millions) 12 4.6 0.1 0.1 Changes in October 25, 1944 Five weeks One year Discounts and advances............... $ 12.7 Industrial loans.... 3.6 U. S. securities......... 1149.8 +$10.4 - 0.5 + 20.7 +$ 11.8 1.0 + 465.1 Total......................... $1166.1 Note circulation. . . . 1355.6 Member bk. deposits 682.2 U. S. general account 10.9 Foreign deposits.. . . 110.0 Other deposits......... 6.1 Total reserves.......... 1013.7 Reserve ratio............ 46.8% +$30.6 + 31 .6 + 4.1 - 23.7 - 16.8 + 0.2 - 27.6 - 1.2% +$476.0 + 289.9 + 78.5 - 18.4 5.2 + 19 - 125.2 - 15 8%
@FedFRASER