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NOVEMBER 194: TH E * BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA CAPITAL EXPENDITURES IN 1950 * * Manufacturing concerns in Philadelphia are cutting back on expenditures for plant expansion and new equipment. $111 million was invested last year. $84 million is scheduled for next year. Over half is to be for new equipment. Chemical manufacturers and oil refiners are the biggest spenders. Food and tobacco concerns plan to spend as much next year as they did last year. Unlike most others making durable goods, firms making transportation equipment are still stepping up their outlays. Philadelphia's peak of capital spending occurred in 1947; the nation’s, in 1948. Across the country, capital outlays in 1950 may decline less than indicated locally. THE MONTH'S STATISTICS The month before the steel strike, business showed definite signs of recovery. Gains were widespread. Employment, pay rolls, and trade were up. THE BUSINESS REVIEW CAPITAL EXPENDITURES IN 1950 With 1950 just around the corner, the year-end forecast ing season is almost upon us. Naturally, every business man would like to know what kind of a year it will be. He would like to know whether consumers are going to spend more or save harder, whether the Government is going to economize or spend and tax, whether the export surplus is going to grow larger or smaller. While all these things have a direct influence upon the volume of next year’s business, there is still another strategic element and that is the economic behavior of businessmen themselves. The money that businessmen spend to erect new plants, to enlarge existing plants, to buy new machinery and equipment runs into billions of dollars. The amount so spent by American manufacturers alone in the four years since the end of the war is over half the estimated re placement value of all manufacturing facilities in existence just before the war. Money so spent is a strong stimulant to the economy because it diffuses spending power far and wide long before we enjoy the benefits of the increased flow of goods and services pouring out from these en larged and improved facilities. If we could find out how much businessmen were bud geting for plant expansion and improvement of equip ment, it would throw considerable light on the prospects for next year. No one knows the answer, but through the cooperation of Philadelphia’s leading manufacturing con cerns the most reliable information, so far as industrial Philadelphia is concerned, is available in the results of a survey just completed by this Bank. Capital expenditures are definitely on the decline in this area. Local manufacturers have made outlays of almost a half billion dollars for plant expansion and modernization of equipment since the end of the war. The peak occurred in 1947 when they spent $153 million. Ever since that time the amount has been declining, as shown in the ac companying chart. Apparently the decline is going to con tinue. Proposed expenditures for the year ending Septem ber 1950 are $84 million, or one-fourth less than the $111 million spent in the past year ended September 1949. These annual surveys, including the latest, show rather convincing evidence that the heavy backlog of post-war plant improvement and renovation is running down. This Digitized for Page FRASER 112 is not to say that such business expenditures are headed toward zero. A certain amount of capital improvement is always being made; it could hardly be otherwise in the face of ever-growing markets, ever-changing technology, and ever-present depreciation. Another reason why capi tal expenditures are unlikely to collapse is that costs of construction and equipment are receding, and numerous concerns have hitherto postponed their programs await ing more favorable conditions. It is a mistake to think of the “backlog” of unfinished plans as a fixed amount that runs down without renewal. MORE FOR EQUIPMENT THAN CONSTRUCTION Local manufacturers are planning to spend more money on equipment than on construction in the year to come. Slightly over half of the total expenditures planned are for new equipment. This is in line with the experience re ported during the past year when 62 per cent of total capital outlays went for equipment. Emphasis upon plant modernization rather than mere expansion of floor space is especially desirable in this area because Philadelphia is an old manufacturing center. Plants going up in new industrial centers of the South and West naturally install ESTIMATED CAPITAL EXPENDITURES MANUFACTURING INDUSTRIES IN PHILADELPHIA (In thousands of dollars) All manufacturing............. Durable goods industries. Nondurable goods indus- Lumber and furniture. . Paper and printing........ Chemicals and Machinery (incl. elec.).. Transportation equip... Miscellaneous.................. Oct. 1946 to Oct. 1947 Nov. 1947 Oct. 1948 To be spent within next to to Sept. 1948 Sept. 1949 year 152,471 39.498 130,130 28,431 111,261 32,833 84,397 24,643 112,973 14,132 10,856 2,829 855 36,151 101,699 19,589 24,784 1,028 1,141 26,052 78,428 15,680 23,882 2,538 1,283 12,358 59,754 15,396 8,836 1,220 853 5,299 40,450 626 5,550 2,101 19,365 10,491 9,065 25,460 449 6,684 833 11,031 7,648 5,431 17,738 955 8,513 494 13,486 7,035 7,299 25,417 891 3,913 872 9,441 8,655 3,604 THE BUSINESS REVIEW the latest equipment, and local manufacturers realize that they too must make generous capital outlays to meet the competition of new plants springing up all around them. In practically every field, manufacturers are taking ad vantage of improved equipment on the market. These de velopments range all the way from machinery used in the manufacture of basic metals, such as steel and aluminum, cording to present plans they are scheduling $39 million on new construction next year. This could mean that out lays for new plant have adjusted to a “normal” level, but the readjustment in demand for new equipment has not yet been completed, as revealed by the fact that outlays for equipment are apparently going to be about one-third less than last year. CAPITAL EXPENDITURES BY PHILADELPHIA MANUFACTURERS SPENT YEAR ENDED OCT. 1947 8153,000,000 SPENT YEAR ENDED SEPT. 1948 8130,000,000 SPENT YEAR ENDED SEPT. 1949 8111,000,000 y EQUIPMENT % % 877,000,000 y. TO BE SPENT IN YEAR ENDING SEPT. 1950 864,000,000 Y/ EQUIPMENT Y, y 870,000,000 y % EQUIPMENT y y, y 868,000,000 '// 868,000,000 y y EQUIPMENT y 845,000,000 CONSTRUCTION ■ 876,000,000 ■ CONSTRUCTION ■ 860,000,000 ■ to machinery turning out finished consumer goods like paper and textile products. Innovations developed under the heavy pressure of wartime demand have since been applied to the production of everyday peacetime products. Modern processing machinery is made to run more auto matically, requiring less attention and manipulation by the operator. Machines are equipped with more automatic controls to reduce the element of human judgment and to cut down spoilage and waste. A great many concerns are installing material-handling equipment to reduce the costs of internal plant transportation. Philadelphia manufacturers are planning to spend just about the same amount of money on new construction in the coming year that they spent during the year just past. Last year they spent $43 million on construction, and ac- CONSTRUCTION | 843,000,000 ■ CONSTRUCTION ■ 839,000,000 ■ WHICH INDUSTRIES ARE DOING THE SPENDING? Almost three-quarters of the total spending planned for next year is by industries making nondurable goods. One reason, of course, is the fact that Philadelphia has more concerns in that category than in durables. Chemical and petroleum companies are by far the biggest spenders— they plan to spend $25 million, or about 30 per cent, of total outlays scheduled by all industries. Philadelphia is already one of the country’s leading pe troleum refining centers, and local refineries are in the midst of an extensive expansion and modernization pro gram. The petroleum industry has barely been able to keep up with demand for its products ever since the end of the war. While shortages in some markets were caused Page 11$ THE BUSINESS REVIEW by transport difficulties, nevertheless demand for petro leum products has been rising rapidly as a result of wide spread shifts from coal to petroleum products. Fuel oil is being used more and more for space heating, railroad lines are shifting from coal to oil-burning locomotives, and numerous industrial concerns also find it to their ad vantage to use fuel oil for their power and heat require ments. Philadelphia is also an important chemical manufac turing center. Among the chemical industries represented here are concerns making alcohol, ammonia, resinous products, drugs, medicines, fertilizers, ink, paint, varnish, soap, sulphuric acid, perfume and cosmetics. Some of these are consumer goods, but a great many are products that enter into the manufacturing processes of other in dustries. High levels of industrial output always spell a heavy demand for chemicals because so many chemicals are indispensable materials in many other industries. Textile manufacturers were the heaviest investors in new plant and equipment last year, but for the ensuing year they plan to spend only about three-eighths as much as last year. This indicates that the expansion and im provement program in textiles in this area is nearing com pletion. Most of the contemplated change, however, is to take place in sharply reduced outlays for construction. Next year’s expenditures for new equipment, though re duced by half, are still quite large. The manufacture of cloth for apparel, household and industrial purposes is one of the oldest of industrial arts, but numerous changes are taking place as a result of the war and its aftermath. The ever-growing volume of synthetic fibers is breaking down the barriers that formerly existed between the cot ton, wool, and silk industries. More and more fabrics are being made out of a blend of fibers, including synthetics which require machinery capable of processing such mix tures. Changes in style stimulate changes in technology, and manufacturers find they cannot afford to be without the most modern equipment. Food and tobacco concerns rank next to chemicals and petroleum in volume of proposed capital outlays for next year; in fact, they are planning to spend just as much next year as they did in the year gone by. However, there is a significant change in the nature of their ex penditures. Compared with last year, they are apparently going to put less money in equipment but more in con struction. It might be supposed that processors of food, one of the most basic and recurring of our needs, would have been among the first to complete their post-war ren Page 114 ovation and expansion programs. Such does not seem to be the case. New facilities have been necessitated by a rising demand for processed and packaged foods required by modern apartment living, a shift to deep freezing, and an ever-greater emphasis upon the sanitation afforded by stainless equipment. Contrary to plans of most industries in the durable goods category, the producers of transportation equip ment are planning to spend more money next year than they did last year. According to reports from these con cerns, they are contemplating substantial outlays for mod ernization of equipment; they are not planning much in the way of enlarging facilities. Philadelphia has a num ber of nationally known concerns in this industry, and they are making liberal appropriations for modernizing their facilities. SOURCES OF FUNDS As in previous surveys, most of the local concerns re port that they have ample financial resources to finance most of their expansion and improvement programs. Company funds are apparently sufficient to supply 93 per cent of scheduled expenditures. Only $5 million, or about 6 per cent, of the funds required is to be obtained from banks, and an inconsequential amount from other sources. Business concerns generally are in a strong fi nancial position. This is revealed not only by the fact that they plan to finance the lion’s share of their own capital expenditures, but also by improved financial ratios. Examination of the record for all non-financial corpora tions throughout the country shows moderate improveSOURCES OF FUNDS FOR CAPITAL EXPENDI TURES TO BE MADE WITHIN THE NEXT YEAR (Per cent) (a) Less than .5 per cent. Own Banks Other 93 88 95 6 10 5 1 2 (a) 97 100 76 73 60 100 92 91 100 76 100 95 3 7 27 40 i7 (a) 8 23 9 i 5 THE BUSINESS REVIEW ment in their liquidity position as of mid-1949 compared with a year earlier. They had more cash and Government securities on hand in relation to their current liabilities, and the ratio of current assets to current liabilities was likewise more favorable than it was a year ago. Their better cash position was brought about in part through the extensive reduction in inventories that took place during the first half of this year. EMPLOYMENT PROSPECTS The widespread readjustment that occurred in business during the first half of this year left its mark on industrial employment in Philadelphia. Local manufacturing con cerns employed 324,000 people in September of this year, which was about 6 per cent less than were employed in September a year ago. Local concerns report that they expect some further reduction in employment by Decem ber of this year. These estimates on the part of the manu facturers were made before the coal and steel strikes had become a reality, but not before they were expected. Substantial improvement in the local employment sit uation is anticipated by September 1950. At that time, manufacturing concerns expect to have more workers on their pay rolls than they did last September. This ap praisal was, of course, predicated on the assumption of harmonious labor-management relations which may or may not obtain. All of the gain expected to take place in employment by September of next year is anticipated among concerns making nondurables. Among producers of durable goods, some improvement in employment is expected in the first three-quarters of next year, but employment next Septem- . | 11 pwffwpfp i' -> |Ph|!ip mj ESTIMATED EMPLOYMENT i ' * PHILADELPHIA MANUFACTURING FIRMS (In thousands of persons) 3 months I year Current from now from now (Sept. 1949) (Dec. 1949) (Sept. 1950) All manufacturing................................. Durable goods industries.................. Nondurable goods industries........... 324 128 196 320 123 197 327 127 200 Food and tobacco.............................. Textiles................................................. Apparel................................................. Lumber and furniture...................... Paper and printing........................... Chemicals and petroleum............... Leather................................................. Iron and steel..................................... Nonferrous metals............................. Machinery (incl. elec.).................... Transportation equipment............. Miscellaneous..................................... 40 38 30 5 44 19 8 34 6 54 27 19 39 38 31 6 44 19 9 32 6 52 25 19 40 40 31 5 44 19 9 33 6 55 26 19 ber is not expected to recover to the level of last Septem ber. This lends support to the rather widely held view that the readjustment process among nondurable indus tries has been completed, but that further readjustments may take place among producers of durable goods generally. WILL THE ESTIMATES HOLD? Some indication of the reliability of these estimates is afforded by a comparison of estimates made a year ago with actual results. On this basis it appears that estimates of businessmen, like those of professional forecasters, are good on the whole but not necessarily in the parts. For example, in September 1948, local businessmen estimated that they would spend $113 million on capital outlays in the ensuing year. Actually, they spent $111 million, which came within 2 per cent of the estimate. However, on new construction, they spent a third less than they had esti mated and on equipment, they spent almost 40 per cent more than they estimated September a year ago. Expendi tures during the year ending September 1948 were within 7 per cent of the amount estimated the preceding year. On the basis of this experience, it may be reasonable to expect the $84 million program projected into September 1950 to be fairly reliable, though actual expenditures for new plant and new equipment by particular industries may deviate from the estimates made last September. NATIONWIDE CAPITAL EXPENDITURES At this writing, no nationwide survey of proposed capi tal expenditures for next year has appeared, and it would be presumptuous to assume that the country will go as goes Philadelphia. Manufacturing industries throughout the country attained their peak dollar volume of capital expenditures in 1948 when total outlays were $8.3 billion. In Philadelphia, the peak occurred a year earlier, and the rate of decline after that time was much sharper than that of the rest of the nation. Quarterly estimates made by the Securities and Exchange Commission and the Department of Commerce indicate that the highest rate of capital ex penditures on the part of manufacturing concerns through out the country occurred in the fourth quarter of 1948, with an irregular downward trend since that time, includ ing the estimate for the fourth quarter of the current cal endar year. While no final conclusions can be drawn with respect to anything concerning the future, from all available evi Page 115 THE BUSINESS REVIEW dence it appears that over-all business activity in the months lying just ahead is going to contain less rather than more support from capital expenditures. Capital ex penditures by commercial and mining enterprises, rail roads and other transportation companies likewise seem to be over their post-war hump. Until quite recently, such outlays by electric and gas utilities have been running high but they too show evidence of a turn. Last year, all American business, exclusive of agricul ture, spent slightly over $19 billion on plant and equip ment. The latest estimate for 1949 is almost $18 billion. Apparently the descent has begun, but there is no reason to suppose that 1950 will be a shut-out. Many concerns have a large amount of unfinished construction and equip ment installation to do, and there are other supporting factors, such as reduced building costs, high wage rates, and the ever-tightening pressure of competition which puts a premium on modernization for the purpose of re ducing costs of production. While some additional slack ening in capital expenditures appears to be in prospect, it is unlikely that the decline for the nation will be as sharp as that indicated by Philadelphia manufacturers. THE MONTH S STATISTICS SUMMARY OUTPUT # Manufacturing production. Construction contracts.. .. Coal mining........................... EMPLOYMENT AND INCOME Factory employment---Factory wage income. . . TRADE** Department store sales... Department store stocks. BANKING (All member banks) Deposits........................... Loans................................ Investments.................... U. S. Govt. Securities. Other.............................. PRICES Wholesale. . Consumers. OTHER Check payments.... Output of electricity. Third Federal Reserve District United States Per cent change Per cent change 9 Sept. 1949 mos. Sept. 1949 from from 1949 from mo. year year mo. year ago ago ago ago ago + 2* -16* -11* + 3 +34 +29 -10 + 4 -38 -60 -29 -43 + 2* -13* _ 9* + 3* -15* - 7* + 3 + 7 +1 + 2 + 1 + 2 0 + It - 03 - + + + + 6 8 1 1 4 4 6 - 3t - 8 - 6 - 5 + 05 2 - 3 + 3 - - It - 5 - 2 + + + 2 2 4 + 2 9 mos. 1949 from year ago 8 - 7 +27 -61 + -231 - -10 -6 - 9 - 3 - 4 Employment Payrolls Per cent change Sept. 1949 fr om Per cent change Sept. 1949 fr Dm mo. ago year ago mo. ago year ago Sales Check Payments Stocks Per cent Per cent change change Sopt. 1949 Sept. 1949 fr Dm fro m Per cent change Sept. 1949 fr Dm mo. ago mo. ago year ago year ago mo. ago year ago Allentown... -f- l —13 + 4 —13 - 2 -11 — 2 —33 +15 —29 - 4 - 4 Harrisburg. . + 2 — 8 + 4 —13 - 2 + 4 Johnstown... 3 —10 + 2 —14 - 3 - 7 Lancaster. . . +1 - 9 + 2 -11 +28 - 1 +n - 8 + 5 + 3 Philadelphia. + 4 -10 + 6 - 9 +52 - 7 +14 -u 0 - 8 Reading........ 0 - 9 - 1 -14 +26 - 8 +13 - 7 0 0 Scranton.... + 3 — 7 + 5 — 9 - 4 - 2 - 5 Wilkes-Barre. + 4 -10 + 2 -14 6 Williamsport. + 3 - 8 + 4 -11 - 1 Wilmington.. — l — 7 - 2 - 4 York.............. + 6 -12 + 2 -19 - - 8 6 0 + 4 - 2 - 3 + 4 - - 1 * Pennsylvania. ** Adjusted for seasonal variation, t Philadelphia. Page 116 LOCAL CONDITIONS Department Store Altoona......... -10 0 0 +2 91 00 + + 9 +1 +9 +1 0 Factory* Trenton......... +33 - 4 +14 - 2 -13 +27 - 9 +13 -15 - 1 0 + 5 - 1 +13 -19 - 4 -10 +16 - 3 +15 - 6 * Not restricted to corporate limits of cities but covers areas of one or more counties. THE BUSINESS REVIEW MEASURES OF OUTPUT EMPLOYMENT AND INCOME Per cent change Sept. 1949 from month ago MANUFACTURING (Pa.)*................ Durable goods industries. _.................... Nondurable goods industries................ Foods............................................T............. Tobacco...................................................... Textiles....................................................... Apparel....................................................... Lumber....................................................... Furniture and lumber products.......... Paper........................................................... Printing and publishing......................... Chemicals................................................... Petroleum and coal products............... Rubber........................................................ Leather....................................................... Stone, clay and glass..................... .. Iron and steel............................................ Nonferrous metals................................... Machinery (excl. electrical).................. Electrical machinery............................... Transportation equipment (excl. auto) Automobiles and equipment................ Other manufacturing.............................. 9 mos. 1949 year ago year ago + 2 + 1 + 4 - 16 - 22 - 7 -11 -13 - 8 + + + + + + + + + + + + - 7 12 13 3 16 16 8 1 15 5 13 2 18 23 20 31 14 17 10 12 - 5 -13 -18 - 5 - 9 -20 -12 - 2 - 7 - 2 -20 - 8 -13 -11 -16 -19 -11 - 1 -26 -15 + + + + + 5 6 4 5 5 9 5 4 3 1 7 2 0 0 4 0 6 2 1 7 COAL MINING (3rd F. R. Dist.)f.. Anthracite.................................................. Bituminous................................................ -38 -39 -39 - 60 - 58 - 66 -29 -29 -25 CRUDE OIL (3rd F. R. Dist.)ff.... + 1 - 11 -11 CONSTRUCTION — CONTRACT AWARDS (3rd F. R. Dist.)**.......... Residential............................................... Nonresidential.......................................... Public works and utilities..................... +34 +70 + 10 +33 + 29 - 4 + 7 +141 -10 -13 -25 +20 ♦Temporary series—not comparable with former production indexes. ♦♦Source: F.W. Dodge Corporation. Changes computed from 3-month moving averages, centered on 3rd month. tU. S. Bureau of Mines, tt American Petroleum Inst. Bradford field. Pennsylvania Manufacturing Industries* Indexes (1939 avg. =100) All manufacturing... Durable goods industries................. Nondurable goods industries................. Foods.......................... Tobacco..................... Textiles...................... Apparel...................... Lumber...................... Furniture and lumber products... Paper.......................... Printing and publishing............... Chemicals.................. Petroleum and coal products.................. Rubber....................... Leather...................... Stone, clay and glass.......................... Iron and steel........... Nonferrous metals.. Machinery (excl. electrical)................ Electrical machinery............... Transportation equipment (excl. auto)............. Automobiles and equipment........ .. Otner manufacturing Employment Average Weekly Earnings Payrolls Per cent Per cent Sept. change Sept. change from 1949 from 1949 (Inllndex) mo. year dex) mo. year ago ago ago ago Average Hourly Earnings % chg. from year ago Sept. 1949 Sept. 1949 113 + 2 -13 259 + 3 -15 $51.40 - 3 $1,340 129 + 1 -17 278 + 2 -20 56.00 - 4 % chg. from year ago 0 1.477 +1 + 3 - 7 237 + 5 - 5 46.03 +1 1.183 +1 128 87 74 91 87 + + + + - 5 3 3 3 1 - 5 -13 -12 - 1 - 9 271 202 189 234 191 + + + + - 7 7 4 7 6 - 2 -10 -14 0 - 7 47.43 30.59 45.29 36.32 41.24 + + + + 3 4 1 1 2 1.136 .782 1.185 .941 1.086 + + + 84 115 + R + 3 -12 - 3 198 262 + 9 + 5 -12 - 3 43.43 49.09 - 1 0 1.018 1.198 - 1 + 5 134 110 + 2 + 3 - 1 -12 301 240 + 5 + 5 + 4 -12 63.29 51.78 + 5 0 1.668 1.316 + 7 + 3 149 118 88 0 - 1 + 2 - 5 -20 +1 315 250 189 0 + 4 + 3 - 5 -12 + 2 64.41 52.84 36.85 0 +13 + 1 1.645 1.412 1.044 + 1 + 6 + 2 116 117 113 + 1 - 1 + 2 -15 -17 -19 255 246 245 + 1 + 1 + 5 -17 -23 -17 50.32 56.58 56.31 - 2 - 7 +1 1.280 1.547 1.432 + 2 + 1 0 160 - 1 -24 337 - 1 -28 53.64 - 5 1.417 + 2 199 + 4 -14 439 + 6 -13 61.76 + 2 1.559 + 1 202 + 3 -15 401 + 1 -14 60.61 + 1 1.584 + 3 127 123 + 2 + 5 - 9 -10 290 247 + 4 +10 - 5 62.82 42.08 + 4 + 2 1.558 1.162 + 6 + 3 99 - 8 4 2 1 3 3 * Production workers only. TRADE Per cent change Third F. R. District Sept. Sept. 1949 from 1949 Indexes: 1935-39 Avg. =100 (Index) month Adjusted for seasonal variation year ago ago 9 mos. 1949 from year ago Sales Departmental Sales and Stocks of Independent Department Stores Third F. R. District SALES 277 221 + 3 + 1 + 4* — 6 -16 - 9* 232 210 + 7 +13 + 6* - 8 — 7 -17» — 5 — 5 - 5* STOCKS Recent Changes in Department Store Sales in Central Philadelphia Week Week Week Week Week ended ended ended ended ended October 1 October 8 October 15 October 22 October 29 Per cent change from year ago - 9 -14 -16 -16 -12 Stocks (end of month) % chg. % chg. % chg. Ratio o sales Sept. 9 mos. Sept. (mot th’s 1949 1949 1949 suPI3ly) from from from Septe mber year year year 1949 1948 ago ago ago Total — All departments......................................... - 8 - 5 -12 2.6 2.7 Main store total........................................................... Piece goods and household textiles...................... Small wares................................................................. Women’s and misses’ accessories......................... Women’s and misses’ apparel................................ Men’s and boys’ wear.............................................. Housefurnishings....................................................... Other main store....................................................... - 8 -18 - 4 - 5 -11 - 5 - 9 - 6 - 6 - 6 - 3 - 4 - 3 - 2 -ii - 8 -12 -14 - 6 -10 - 6 - 6 -17 -21 2.8 3.1 3.2 2.6 1.8 4.2 2.7 3.7 2.9 2.9 3.3 2.7 1.7 4.2 3.0 4.3 Basement store total.................................................. Small wares................................................................. Women’s and misses’ wear..................................... Men’s and boys* wear.............................................. Housefurnishings....................................................... - 9 0 - 9 -12 - 8 - -11 - 6 - 8 -14 -24 1.9 2.1 1.5 2.5 2.0 1.9 2.2 1.5 2.6 2.4 Nonmerchandise total................................................ - 4 — 2 4 5 2 4 8 * Not adjusted for seasonal variation. Page 117 THE BUSINESS REVIEW BANKING CONSUMER CREDIT Receiv ables (end of month) Sales Sales Credit % chg. % chg % chg. Sept. 9 mos. Sept. 1949 1949 1949 from from from yearago yearago yearago Third F. R. District Department stores -12 - 3 - 6 - 6 - 2 - 6 - 2 -16 -14 0 -13 -11 Furniture stores Loans made Loan Credit +1 + 4 + 4 Loan bal ances out standing (end of month) % chg. % chg. % chg. Sept. 9 mos. Sept. 1949 1949 1949 from from from yearago yearago yearago Consumer instalment loans +14 0 + 1 +25 + 6 - 6 + 6 +15 +17 + 2 + 8 +22 MONEY SUPPLY AND RELATED ITEMS Chang ss in— United States (Billions $) Sept. 28, 1949 Money supply, privately owned........................................ 166.6 - .3 - .4 Demand deposits, adjusted............................................... Time deposits........................................................................ Currency outside banks..................................................... 83.3 58.4 24.9 - .1 0 - .2 - .6 +i.i - .8 Turnover of demand deposits............................................. 18.6* +8.8* -4.1* four weeks year Commercial bank earning assets....................................... 118.8 + .8 +5.1 U. S. Government securities............................................. Other securities..................................................................... 41.8 66.8 10.2 + .6 + .1 + .1 + .1 +4.3 + .7 Member bank reserves held................................................ 16.0 - .5 -3.9 Required reserves (estimated).......................................... Excess reserves (estimated).............................................. 15.1 .9 - .1 — .4 -3.9 0 Changes in reserves during 4 weeks ended September 28, reflected the following: Effect on reserves Net payments to Treasury.................................................. Decline in loans to member banks................................. Other transactions................... .............................................. Decline in Reserve Bank holdings of Governments... Return of currency from circulation................................. Change in reserves............................................................. — — “ + + .6 .2 -1 .3 .1 — -5 * Annual rate for the month and per cent changes from month and year ago at leading cities outside N. Y. City. PRICES OTHER BANKING DATA Oct. 26, 1949 Changes infour weeks Per cent change from Sept. 1949 (Index) Index: 1935-39 average =100 month ago 191 215 205 179 Consumer prices Fuel................................................................................... Weekly Wholesale Prices—U. S. (Index: 1935-39 average =100) Week W eek Week Week ended ended ended ended October October October October 4.................................. 11................................. 18................................. 25................................. Source: U. S. Bureau of Labor Statistics. Page 118 170 170 200 186 121 144 192 152 ' +?; f All com Farm modi prod ties ucts 189 189 189 189 212 211 210 209 + 1 0 + 1 0 0 + 1 + 1 + 1 0 + 1 0 0 Foods 202 202 203 205 year ago - 9 -14 -13 - 5 - 3 3 6 5 + 1 - 6 + 2 Other 179 179 179 178 Weekly reporting banks — leading cities United Slates (billions $): Loans — ^ _ Commercial, industrial and agricultural. Security............................................................. Real estate....................................................... To banks........................................................... All other............................................................ 13.7 1.9 4.2 .2 4.2 + .3 - .4 Total loans — gross................................... Investments..................................................... Deposits............................................................ 24.2 42.9 75.5 - .1 + .8 Third Federal Reserve District (millions $) Loans — . Commercial, industrial and agricultural. Security............................................................. Real estate....................................................... To banks........................................................... All other............................................................ 480 33 103 Total loans — gross................................... Investments............................................... Deposits............................................................ 919 1,871 3,065 + 7 -1- 78 + 85 - 16 + 229 + 79 Member bank reserves and related items United States (billions $): Member bank reserves held........................ Reserve Bank holdings of Governments. Gold stocky.......... ............................................ Money in circulation..................................... Treasury deposits at Reserve Banks.... 16.1 17.4 24.6 27.3 .4 + .1 - .4 3.9 5.8 .6 Federal Reserve Bank of Phila. (millions $): Loans and securities...................................... Federal Reserve notes.......... ........................ Member bank reserve deposits.................. Gold certificate reserves............................... Reserve ratio (%).......................................... 1,194 1,592 742 1,229 51.0% 0 0 0 +1.1 - 1.7 + .5 + .2 .0 + .3 - .7 + 3.6 + 1.3 59 3 13 6 + 297 - 0 0 261 .8 .8 1.1 31 - 492 - 45 - 211 + 147 +11.9% 1 331 0
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