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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT OCTOBER i, 19^7 \ %. FEDERAL RESERVE BANK OF PHILADELP ■4k ■'A «, x’ V- a --------------------- <P Business and Banking Conditions in the United Sifktes In August industrial activity ad vanced from the level of the two preceding months and on a seasonally adjusted basis was close to the volume of last spring. Early reports for Sep tember indicate a decline in steel out put and a seasonal decrease in the pro duction of automobiles. Production and employment. Volume of industrial production, as measured by the Board’s seasonally adjusted in dex, was 117 per cent of the 1923-25 average in August as compared with a level of 114 per cent in June and July and 118 per cent during the spring. Steel production rose slightly further and was close to the high level prevailing before strikes curtailed out put in June. Automobile production was maintained in considerably larger volume than is usual in the month pre ceding the shift to new model produc tion. Lumber output declined follow ing a period of increase. In the nondurable goods industries output in creased in August, reflecting chiefly increases at cotton and woolen textile mills, following considerable declines in the preceding month. Activity at meat packing establishments increased somewhat from an extremelv low level. INDUSTRIAL PRODUCTION Shoe production showed less than the usual seasonal rise. At mines, output of coal increased less than seasonally, while crude petroleum production con tinued to expand. Value of construction contracts awarded, as reported by the F. W. Dodge Corporation, declined somewhat in August and the first half of Sep tember. Awards for private residential building showed little change and were in about the same volume as in the corresponding period of 1936, while publicly-financed residential building declined and was in considerably smaller volume than last year. Factory employment, which had in creased in July, showed less than a seasonal rise in August. Factory pay rolls increased by about the usual sea sonal amount. The number employed at steel mills increased somewhat fur ther, while at automobile factories, railroad repair shops, and sawmills employment declined. In the textile industries employment in the produc tion of fabrics decreased somewhat, while employment in the production of wearing apparel increased. Changes in employment in most other manufactur ing industries were small. FACTORY EMPLOYMENT AND PAYROLLS PERCENT PE Jh. }r Daftirtment of Agricul ture crop estimate? based on Septem ber 1 conditions were about the same as the estimates a month earlier, ex cept for an increase in cotton and a decrease in corn. Output of leading crops is substantially larger than last season. Supplies of livestock and meats are expected by the Department of Agriculture to continue smaller than last year. Distribution. Mail order sales and sales at department stores showed somewhat less than the usual seasonal increase from July to August. Freightcar loadings continued at the level of the previous month. Agriculture. EXCESS RESERVES OF MEMBER BANKS Billions or ooll*rs ILLIONS or DOLLARS MEMBER'BANKS J_. /if /A A " OUTSIDE f 1932 M/ * I T vi yysllilc 1933 1934 1936 1936 1937 Wednesday figures of estimated excess reserves for all member banks and for New York City, January 6, 1932, to September 22, 1937. MEMBER BANK RESERVES AND RELATED ITEMS 140 130 130 120 120 110 110 |M3.B 100 90 100 wr_; Employment 90 80 80 70 70 60 60 50 Payrolls. 50 1929 1930 1931 1932 1933 1934 1935 1936 1937 Index of physical volume of production, ad justed for seasonal variation. By months, January 1929 to August 1937. Indexes of number employed and payrolls, without adjustment for seasonal variation. By months, January 1929 to August 1937. Indexes compiled^by the United States Bureau of Labor Statistics. Wednesday figures. January 3, 1934, to Sep tember 22, 1937. Page One Cottun prices de clined considerably further from the middle of August to the third week of September and there were smaller decreases in cotton goods, silk, hides, steel scrap, and lumber. Prices of live stock and livestock products, after some decline in the latter part of Aug ust and the first week of September, advanced sharply in the middle of September. Bank credit. Excess reserves of member banks increased in the fiveweek period ending September 22 from Commodity prices. $800,000,000 to $1,000,000,000 as the result of a release of gold by the Treasury from its inactive account. The bulk of the increase in excess re serves went to New York City banks and on September 22 these banks had excess reserves of $350,000,000, Chi cago banks had $50,000,000, and banks elsewhere $600,000,000. Commercial loans at reporting mem ber banks in 101 leading cities, reflect ing in part seasonal demands, con tinued to increase substantially during the four weeks ending September 15, both in New York City and outside. Holdings of United States Government obligations and of other securities showed a further decrease, with the result that total loans and investments declined somewhat. Rates on nine-month Treasury bills declined from 0.71 per cent early in September to 0.44 per cent later in the month, and average yields on long-term Treasury notes declined from about per cent to below \y2 per cent. Money rates. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial and trade conditions in the Philadelphia Federal Reserve Dis trict have shown indeterminate tend encies over the past several weeks. Industrial production failed to main tain the seasonal level that usually prevails from July to August and the adjusted indexes for durable and non durable goods declined in about equal proportions. Output of coal and man ufactures slackened, while produc tion of crude oil expanded somewhat. For the year to date, however, indus trial output in the aggregate was 15 per cent larger. The value of build ing contracts awarded in August in creased, reflecting largely certain nonresidential types of construction, including public works, but the total was smaller than a year ago. Agri cultural conditions continue well main tained and farm cash income has been substantially larger than in several years. Industrial employment showed little change, while payrolls expanded some MANUFACTURING what from July to August, though not as much as was to be expected in that period. Increases in wage rates con tinued in evidence. Preliminary re ports for September indicate declines in the manufacturing industry as a whole. Retail trade sales in August in creased over July but the gain was smaller than usual; in September sales Business at increased seasonally. wholesale showed little change. Sales of new passenger automobiles declined further. Activity in commercial ho tels has expanded seasonally with respect to occupancy and income. Freight car loadings declined. Commodity prices at wholesale have eased off somewhat, owing chiefly to declines in farm products. Retail food prices have shown a similar tendency, though in both cases they are higher than last year, reflecting increased costs generally. Manufacturing. The market for manufactured goods on the whole has been rather quiet and further declines ACTIVITY in sales have been reported by several lines. Demand for iron and steel prodducts, especially machinery and tools, textiles, including cottons and wool ens, and virtually all building materials has declined as compared with last month and in some cases is less active than a year ago. Sales of leather goods, floor coverings, and clothing, on the other hand, appear to have in creased somewhat in recent weeks. Current reports covering the first half of September indicate that unfilled orders generally were smaller than a month before and in some lines, es pecially textiles, they showed decreases as compared with last year. Stocks of finished goods on the whole increased in the month and as compared with a year earlier. Inventories of raw ma terials, however, have not changed much in recent weeks but, as has been the case for several months, they are larger than they were a year before. Wholesale prices of manufactured goods continue to show little fluctua tion and are only a little below the INDUSTRIAL FUEL AND POWER PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT ELECTRIC POWER ■ USED BY INDUSTRIES iPRODUCTION (ADJ. FOR SEAS. VAR.) EMPLOYMENT FUEL OIL OUTPUT' PAYROLLS BITUMINOUS COAL OUTPUT ' 1932 1933 Digitized Page for FRASER Two 1934 1935 1936 1937 1932 1933 1935 1936 1937 high point for the recovery period reached in the latter part of April. In the week ended September 18, the in dex number of the Bureau of Labor Statistics, measuring changes in prices of commodities other than farm prod ucts and foods, was 85.9 per cent of the 1926 average, or the same as four weeks earlier but nearly 8 per cent higher than a year ago. Factory employment in this district increased fractionally from July to August and wage payments rose about 4 per cent. These changes failed to measure up to the seasonal gains which ordinarily occur in this interval and reflected in part interruptions occa sioned by industrial disputes. Early figures for September indicate declines. Estimates show that Pennsylvania manufacturing establishments about the middle of August employed ap proximately 990,000 wage earners re ceiving compensation of approximately $26,270,000 a week. This was an in crease over a year earlier of nearly 9 per cent in employment and 26 per cent in the case of wages. The aver age number of hours actually worked decreased steadily between April and July and, despite an increase in early August, was somewhat less than a year before. Hourly earnings, on the other hand, have risen continuously since the autumn of 1936 and in August were nearly 21 per cent higher than a year ago, reflecting largely increases in wage rates. Delaware factories in August re ported a gain of 1 per cent in employ ment but a decline of 1 per cent in payrolls. Compared with a year ago the number of workers employed was 7 per cent larger and the amount of wage disbursements 16 per cent greater. In southern New Jersey fac tory employment and wage payments rose about 8 per cent in August, ow ing chiefly to seasonal activity par ticularly in the canning industry. Output of factory products did not increase as much as it usually does from July to August. This bank’s ad justed index of productive activity de creased to 93 per cent of the 1923-25 average from 95 in July and a high of 98 in April. In August last year this index was 88. Comparative figures for eight months show that the rate of manufacturing output was 17 per cent higher this year than last. Productive activity in industries making durable goods such as pig iron, automobile parts and bodies, and lumber increased more sharply than usual from July to August. Less than Business Indicators Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Unadjusted indexes reflect merely the actual change which may or may not Aug. June July Aug. be typical. 1936 1937 1937 1937 Aug. 1937 from Month Year ago ago Industrial production...... Manufacturing—total.............. 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............... Coal mining................................ Anthracite............................... Bituminous............................. Crude oil...................................... Electric power Output...................................... Sales, totalt............................ Sales to industries J............... 89 r 79 r 96 88 r 99 80 77 95 42 117 135 85 54 r 51r 76 443 r 97 95 r 92r 98 108 94 87 82 97 45 131 153 98 75 74 79 481 234 227 167 253 248 248 242 239 239 175 170 166 88 95 92p 95 93 p 96 94p 95 93p 112 109 89 86p 86 88 84 85p 95 97 45 r 45 135 129p 155 142p 94 r 92 51 41p 47 37p 79 76 518 528 Employment and wages—Pa. Factory—Wage earners.................. Payrolls.......................................... Man-hours (1927-28 = 100).... General (1932 =100) Employment................................. Payrolls.......................................... Building and real estate Contracts awarded f—total........... Residential f.................................. Non-residentialf.......................... Public works and utilities!*. . . . Permits for building—17 cities. . . Real estate deeds—Philadelphiat Writs for Sheriff sales—Phila. . . . Distribution Retail trade —sales.................... stocks................ Wholesale trade—sales................... stocks................ Life insurance sales.......................... New passenger auto, registrations Hotels—Occupancy.. . (1934 =100) Income, total (1934 =100) Freight car loadings—total........... Merchandise and miscellaneous Coal................................................. 62 43 62 115 24 48 515 53 38 61 67 18 65 684 54 56 40 41 71 71 64 65 17 24 55 55 657 428 — — + + + — — — — — — + + 88 91 88 32 78 Farm products............... Foods............................... Other commodities.... Philadelphia................... Scranton.......................... Aug. 1936 May 1937 96 95 91 91 92p 93 p +33 + 13 +16 +13 - 8 -11 + 14 + 16 92r 93 78 78 102 48 118 137 83 53r 51r 72 443 110 91 88 78 104 49 132 149 97 65 65 69 500 107 82 84 r 81 103 49 133 141 91r 42 38 70 518 114 81p 87 82p 103 51 130p 146p 89 41p 37p 71 528 + + + 9 +10 + 11 222 216 172 241 231 236 235 225 227 176 173 171 +14* +36* +25* 85 82 85 0* + 9* 4* + 26* 4* + 11* _ + 0* + 8* + 11* 114 3* + 22* + 28* 154 + + + + — + + — — — _ — — + — — — — food....................... 89 r 88 + + + Wholesale (1926 =100). (In millions of dollars) +15 + 17 +20 + 10 +34 + 10 +20 + 6 3 4 1 1 39 0 35 6 5 1 10 +26 — 4 + 15 + 6 44 -18 +33 — 1 + 14 + 26 17 - 4 2 1 0 + + 2 + 1 + 5* + 4* + 4* + 3 + 2 + 4 0 19 15 13 1 25* 8* 11* 4 5 3 + 45* + 66* +576* +963* Prices—United States Retail + 4 + 5 + 19 3 + 24 13 + 10 + 10 + 1 + 8 + 10 + 6 + 8 23 — 26 — 1 + 19 Aug. June July Aug. 1936 1937 1937 1937 — 81 82 81p 81 83 83p — 87 r 103 100 l()0p — 67 r 77 75 76p + 98 101 98 98 + 73 76 63 3 3 2 3 2 4 3 1 1 0 4 8 3 18 21 4 2 1937 from 8 mos. 1936 0 0 2 70 Number............................. Amount of liabilities___ Check payments.................... Rate of collections (actual) Retail trade........................ Wholesale trade................. _ = 81 Business liquidations Payment of accounts Not adjusted Per cent change 3 + 0 0 0 + + 0 0* 3* 1* 0* 0* 0* 1* + + + + + + + June 1937 7* 3* 2* 4* 2* 56 57 61 46 42 39 72 69 72 76 68 71 22 21 22 65 56 53 684 624 411 64 67 82 r 68 r + 6 82 +15* 124 + 9* 104 + .5* 91 74 + 17 + 18 75 + 7 63 +20 82 58 64p 77 75 80p 98 92 93p 75 74 riv 105 94 83 180 163 lo4 127 108 112p 126 96 loop 80 79 78 81 80 79 64 59 60 48 37 46 68 31 208 75 96 88 75 29 74 33 81 32 80 29 78 82 84 83 80 84 87 88 87 88 89 86 85 80 80 87 80 86 86 86 89 84 89 83 -11* +90* 41 +13 + 9* +15* + 6* + 8* + .5* + 5* + 5* 92 92 98 r 103 91r 95 127 123 123 192 182 188 63 40 63 126 22 47 494 + 7 5 4* 8* 92 103 97 20 86 81 85 89 82 % change from July 1937 Aug. 1937 Month ago Year ago 0.9 217 369 72.9 -18 - 0 - 4 - 0 +200 + 0 + 15 + 5 474 708 1,394 13.5 + 2 - 1 - 2 +1 + 4 - 4 - 1 + 10 Banking and credit Federal Reserve Bank Bills discounted.............................. $ 0.3 Other bills and securities............. 216 Member bank reserves................. 320 Reserve ratio (per cent)............... 69.6 Reporting member banks Loans................................................ $ 464 Investments..................................... 734 Deposits (a)..................................... 1,412 Bankers’ acceptances outstanding. 12.3 S 1.8 218 422 73.8 S 1.6 218 384 73.0 $ S 454 730 1,459 17.0 $ 460 716 1,420 16.2 $ * Computed from data unadjusted for seasonal variation, t 3-month moving daily average centered at 3rd month, t Not included in production index. 1.1 218 385 73.1 * 463 714 1,417 i3.4 $ p—Preliminary. r—Revised, (a) Less cash items in process of collection. Page Three METAL PRODUCTS-EMPLOYE HOURS WORKED PHILADELPHIA FEDERAL RESERVE DISTRICT PRICES OF TEXTILE FIBERS PERCENT STEEL WORKS AND ROLLING MILLS COTTON FOUNDRIES AND MACHINE SHOPS RAYON 1932 1933 1934 1935 seasonal gains occurred, however, in the output of steel, steel castings, and brick, while substantial declines were reported in the production of iron cast ings, goat and kid leather, and paints and varnishes. Improvement in August occurred in the output of such non-durable goods as electrical apparatus, locomotives and cars, and carpets and rugs. Ship building activity and canning and pre serving also expanded more sharply than usual, but smaller than seasonal gains were reported in the output of shoes, hosiery, and woolens and worsteds. Production of motor vehicles decreased by a larger percentage than it ordinarily does in August. Output of silk manufactures was considerably less active than in July, reflecting larg;ely the effect of strikes. Electric power output by eight cen tral stations showed about the usual rate of increase from July to August; it was 6 per cent greater than a year earlier and was 9 per cent larger in the first eight months this year than last. Consumption of electricity by industries declined slightly during the month and showed little change as com pared with a year agp. For the year to date total sales of electricity were 10 per cent larger than last year. Coal and other fuels. Output of an thracite showed a further decline in August instead of the usual seasonal increase; preliminary reports for Sep tember, however, indicate some in crease in the first half of that month. Shipments also decreased in August, continuing a downward trend since May and, as was the case in July, they registered a marked decline from a year ago. Comparative figures show that production was 11 per cent and Page Four 1936 1937 1934 1935 shipments 6 per cent smaller in the first eight months this year than last. The market for Pennsylvania bitum inous coal has been somewhat more active lately, reflecting principally larger takings by manufacturing plants. Colliery output in August in creased by a smaller percentage than usual, following larger than seasonal gains in the two preceding months. In early September production showed some expansion, according to prelim inary figures. Shipments of soft coal increased further in August, continu ing a pronounced upward trend since early this year. In the first eight months of 1937 output and shipments both registered substantial increases over a year earlier. (Output and shipment figures are daily averages) Per cent August change from 1937 Month Year ago ago Anthracite - 3 Production.................tons 99,400 Shipments..................tons 101,539 - 1 1,895t + 28 Stocks............... 1000 tons 76.8 + 0 Prices........... (1926=100) Employment..............No. 79,307 - 8 Bituminous + 3 Production.................tons 340,308 Shipments.......... No. cars 23,726 + 3 98.7 Prices........... (1926=100) + 0 + 9 Employment..............No. 129,530 Coke Prod. . . .(1923-25=100) 136.2 + 3 Prices........... (1926 = 100) 104.9 0 Gas and fuel oil 149.7* + 1 Prod. . . .(1923-25=100) 68.6 Prices........... (1926 = 100) + 2 -26 -18 +22 - 3 0 + + 1 1 2 3 +18 + 12 +27 + 3 Sources: Bureau of Mines and Bureau of Labor Statistics. * Estimated. f August 1. Coke production in this section showed some additional gain in Aug ust, as did that of gas and fuel oils. Compared with a year ago output of coke was 18 per cent larger and that of gas and fuel oils 27 per cent greater. In both cases, production was consid erably larger in the first eight months this year than last. 1936 19 3 7 The ag gregate value of building contracts awarded in this district in August rose to nearly $16,000,000, following a sharp drop a month before. This was a gain of 32 per cent as com pared with July but a decrease of 7 per cent from a year ago. The im provement in the month reflected larger awards for public works and utilities and non-residential buildings, includ ing factory, commercial and educa tional structures. Building and real estate. Building contracts Philadelphia Federal Reserve District Per cent change August 1937 1937 From (000’s from omitted) month 8 mos. ago 1936 Residential......................... $ 4,156 Apts, and hotels............ 125 Family houses............... 4,031 8,578 Non-residential................ Commercial.................... 1,532 Factories......................... 5,393 Educational.................... 566 All other.......................... 1,087 - 20 - 90 + 2 + 91 + 29 +242 + 22 - 14 + 26 + 11 + 28 + 6 + 11 +181 - 33 - 13 Total buildings......... $12,734 Public works and utilities 3,232 + 31 + 36 + 13 - 18 Grand total................. $15,966 + 32 + 4 Source: F. W. Dodge Corporation. Comparative figures for eight months show that the dollar volume of all contract awards was 4 per cent greater this year than last and the largest for that period since 1931. The most pronounced gains over 1936 oc curred in the value of contracts let for factories, one and two-family dwellings and commercial structures. The local real estate situation on the whole has shown some improve ment in recent weeks. Renting demand for houses and apartments has con tinued quite active since early this year; leasing of commercial space, however, slackened noticeably during the summer months and currently in- PER CENT BUILDING CONTRACTS-VALUE PRIMARY DISTRIBUTION PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PUBLIC WORKS AND UTILITIES WHOLESALE DOLLAR SALES TOTAL RESIDENTIAL NON-RESIDENTIAL v SHIPMENTS OF MERCHANDISE AND MISCELLANEOUS COMMODITIES 1932 1933 1934 1935 1936 1937 1932 1933 1934 1935 1936 1937 Sour-c«; F.W Dodge Cpfp. quiries are less numerous than they were last spring. Rentals generally have advanced further, continuing an upward trend that has been quite pro nounced since the turn of this year. Sales of small houses have shown some increase lately, following an inactive period of about five months duration. Agriculture. The agricultural situa tion in this district has improved fur ther since the middle of August and as in the previous month, compares favorably with 1936 and the average for other years. Late crops appear to be developing well and seasonal farming operations such as harvesting, plowing, and seeding winter grains, have progressed about as usual. Yields of nearly all important field crops, save tobacco, will be substan tially larger this year than last and above the average for the five years 1931-35. Production of orchard fruits, particularly apples and peaches, also is expected to be the largest in several years and considerably above average. Preliminary estimates show that this year’s cranberry crop in New Jersey may approximate 135,000 barrels, ex ceeding that of any year since 1933, when 142,000 barrels were produced. Farm cash income in this section as in the country generally expanded sharply in July, according to Depart ment of Agriculture reports. In the three states included in this district receipts from the sale of farm products amounted to about $40,000,000 in July; this was a gain of 8 per cent as com pared with June and was the largest monthly total since August, 1929. Farm cash income in the aggregate was 19 per cent larger in the first seven months this year than last and exceeded that of any like interval in the past six years. Wholesale prices of farm products in the country as a whole decreased somewhat between the middle of August and early September; there en sued, however, a pronounced rise in the week ended September 18, reflect ing principally higher prices for live stock, poultry and certain grains, es pecially corn and rye. Distribution, trade and service. Pre liminary reports indicate that retail trade sales in September have in creased seasonally and are slightly larger than a year ago. In August dollar sales by department, apparel, shoe and credit stores increased a little less than they usually do as compared with July, and in consequence this bank’s seasonally adjusted index re ceded to 81 per cent of the 1923-25 average from 82 in July. The value of sales in all reporting lines combined was 7 per cent greater in the first eight months this year than last, owing in part to higher prices. Business in wholesale lines regis tered about the customary small in crease from July to August so that the adjusted index measuring total dol lar sales in eight important branches remained unchanged at 100. The ag gregate value of wholesale trade sales in August was 15 per cent larger than a year ago and showed an increase of 20 per cent in the first eight months this year as compared with last. Sales of new passenger automobiles in this district, as shown by registra tions in August, were about 25 per cent above a year ago. Compared with July, they showed a decline of approximately 5 per cent, reflecting in part the approach of the season when new models are introduced. Shipments of commodities by rail road freight in this section, eliminating seasonal changes, have shown a down ward tendency since March, reflecting principally smaller loadings of mer chandise and miscellaneous commodi ties and coal-. Total loadings in Au gust were 4 per cent higher than a year ago and over the first eight months were 17 per cent greater than last year. The volume of rail freight consisting chiefly of manufactures originating in the Philadelphia indus trial area also decreased somewhat in August, following a substantial gain a month before. Some decline was in dicated from a year ago but thus far this year shipments have registered an increase of 6 per cent over the same interval of 1936. Activity at non-resort commercial hotels increased in August and was at a higher level than a year ago. Hotel business Philadelphia Federal Reserve District Room occupancy.................... Per cent of capacity used: Aug. 1937................ 49.0 July 1937................ 50.2 Aug. 1936................ 47.9 Income from: Guest rooms......................... Food....................................... Other sources....................... Total revenue.................. Aug., per cent change from 1937 Month Year ago ago 8 mos. 1936 0 +4 + 0 + 8 +6 +3 +1 +14 +10 + 5 +7 +4 +11 +5 +9 +2 Reserve de posits of member banks declined fur ther in the last half of August, but have been relatively stable over the first three weeks of September. In the first half of September the average of reserves was $360,000,000, representing a substantial decline from $429,000,000 held during the first fif teen days of May, immediately follow ing the final increase in the percentages Banking conditions. 1937 Aug. 1-15 1936 Aug. 16-31 Sept. 1-15 Sept. 1-15 Reserve city banks: Reserves at Fed eral Reserve Bank................... $225.3 $218.2 $212.6 $216.8 Required reserves. 199.0 196.6 193.0 150.1 Excess reserves. . . 26.3 21.6 19.6 66.7 Ratio of excess to required............. 13% n% 10% 44% Country banks: Reserves at Fed eral Reserve Bank................... $147.9 $147.4 $147.5 $ 129.0 Required reserves. 117.0 116.7 116.2 82.6 Excess reserves. . . 30.9 30.7 31.3 46.4 Ratio of excess to required............. 26% 26% 27% 55% In the five weeks from August 18 to September 22 the decrease in member bank reserves was $10,000,000. This reflected a decrease of $15,500,000 in the fortnight ended September 1, when there was a substantial adverse bal ance of payments in commercial trans actions with other districts. In this two-week period most of the decline in reserves was at reporting banks in leading cities, which experienced a drop in deposits of $13,000,000, chiefly in funds held for other banks. A de cline of $9,000,000 in adjusted demand deposits was accompanied by a rise of $8,000,000 in time funds, reflecting in part a transfer of funds from the demand to the time classification fol lowing the passing of the date up to which member banks were permitted to pay interest on certain classes of de Federal Reserve Bank of Philadelphia (Dollar figures in millions) Bills discounted......... * Bills bought................ Industrial advances. . United States securi- Five weeks One year 0.7 0.3 3.7 - 0.0 - 0.1 -so.i +$0.3 - 0.0 - 1.3 213.3 Changes in— Five One weeks year Assets Commercial, industrial and agricultural loans: Otherwise secured and unsecured......................... Open market paper............... Loans to brokers and dealers in securities.......................... Other loans to purchase or carry securities.................... $ 179 25 Loans to banks........................ Other loans: On securities........................ Otherwise secured and unsecured......................... Total loans........................... Lnited States Government Obligations fully guar, by U. S. Government............. Other securities....................... * 44 * * +* 8 - 1 24 - 3 37 60 3 - 1 + 1 49 + i 57 - 1 * + 2 1 * * +$25 316 - 11 97 273 - 2 6 - 4 - 39 $1,164 — $15 —$18 228 18 123 88 - 10 + 2 + 3 + i - 12 + 3 - 35 793 290 18 268 1 23 228 — $25 + 10 +$14 + 14 Total loans and investReserve with Federal Reserve Bank........................... Cash in vault........................... Balances with other banks. . Other assets—net................... Liabilities Demand deposits, adjusted. . $ Time deposits.......................... U. S. Government deposits.. Interbank deposits................. Borrowings............................... - 9 + i + 4 - 58 - 37 + i + vestments, loans of the reporting banks have moved rather steadily upward, registering an increase of about $30, 000,000 in the past six months. This trend has been due to an expan sion in accommodation extended to commerce, industry and agriculture. Since May 12, when such loans first were separately classified, they have increased from $200,000,000 to $223, 000,000 of which $8,000,000 was taken on in the past five weeks. The rise in commercial loans was more pro nounced than a year ago, when loans of similar type increased from March to the middle of September. Outstanding acceptances of banks in this district increased slightly during August. The total of $13,460,000 at the end of the month was about $1,200, 000 larger than a year ago. + 2.1 -$0.2 +11 1 + 1.3 +21.6 -10.1 + 4.2 - 4.1 -12.0 + 3.4 - 3.1 -11.3 - 0.3% +16.5 + 4.3 +34.6 + 1-4% MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Changes in weeks ending— Aug. 25 Sept. 1 Sept. 8 Sept. 15 Sept. 22 Changes in five weeks Sources of funds: Reserve bank credit extended in dis trict.......................................................... Commercial transfers (chiefly inter district) ................................................... Treasury operations................................ - 0.2 -0.5 +0.7 +3.7 - 4.5 - 0.8 -11.0 + 0.6 -8.4 +1.6 +2.9 +4.4 -5.7 +1.2 +13.7 -11.2 - 8.5 - 3.4 Total........................................................ -10.6 -7.3 +8.0 -0.8 - 2.0 -12.7 + + 1 .0 9.7 0.1 0.0 +0.9 -5.8 -2.3 -0.1 +4.4 +4.3 -0.7 -0.0 -1.2 -0.6 +0.2 +0.8 + - 3.3 1.7 0.4 0.0 - 0.2 -10.1 - 3.1 + 0.7 -10.6 -7.3 +8.0 -0.8 - 2.0 -12.7 Uses of funds: Currencv demand..................................... Member bank reserve deposits............. “Other deposits” at reserve bank. . . . Unexpended capital funds..................... Total........................................................ 4 * Comparable figures not yet available. Changes in— Sept. 22, 1937 Total bills and sec unties................. $218.0 Federal reserve note circulation........... 316.6 Member bank reserve deposits............... 363.0 U. S. Treasurer— general account.. 9.7 Foreign b a n k d e posits.................... 22.4 Other deposits............ 6.2 Total reserves............. 522.2 Reserve ratio.............. 72.7% Sept, 22, 1937 Reporting member banks (000,000's omitted) 00 (Averages of daily figures; dollar figures in millions) mand deposits, such as those held for savings banks and public bodies. In the three weeks to September 22 member bank reserves increased over $5,000,000. Although substantial amounts were credited to the account of the Treasury at this bank in con nection with quarterly installments on the income taxes, they were largely offset by such Government payments as interest on the debt and redemptions of maturing Treasury bills, so that only about $5,000,000 was taken from the local market by Treasury opera tions. This was more than compen sated for by a gain of $11,000,000 in the interdistrict settlements, some part of which was due to a flow of funds to this district in connection with the tax payments. The increased demand for currency over the Labor Day week-end was approximately equaled by the amount subsequently returned. The gain in reserves during this period also was largely at the report ing banks. These banks sustained a further drop in deposits, as is to be expected around a tax payment period, but this loss of funds was more than met by funds derived from a reduction in security holdings. On September 22 the total invest ments of the reporting banks were $686,000,000, as compared with $705, 000,000 on August 18. The decrease was chiefly in direct securities of the United States Government, which de clined $11,000,000 and now are over $30,000,000 below the peak amount held last January. There also were declines of $2,000,000 in guaranteed obligations of the United States Gov ernment and of $6,000,000 in other securities. Holdings of securities of the latter type, composed largely of obligations of corporations and local governments, now amount to $273, 000,000, and have shown a general trend downward since August of last year, when $317,000,000 was held. •In contrast with the decline in in 4# of reserves to be maintained against deposits. This drop has taken place in the figures of reserve city banks whose excess over requirements has decreased from $74,700,000 to $19, 600,000, or from 36 per cent to 10 per cent of required reserves. Re serve balances of country banks, on the other hand, have increased a little in the four-month period, the excess fluctuating from 25 to 28 per cent of requirements. Employment and Payrolls in Pennsylvania DEPOSITS . REPORTING MEMBER BANKS PHILA. FED. RES. DISTRICT MILLIONS (All figures are rounded from original data) DEMAND (adjusted) Manufacturing Indexes INTERBANK U S. GOVERNMENT 1936 1937 1938 PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS Aug. 1937— per cent change from 92 + 9 All manufacturing...... Iron, steel and products . 92 +20 Non-ferrous metal prods. 135 +17 Transportation equip.. . . 68 + 7 Textiles and clothing... . 102 - 1 Textiles........................... 97 - 2 Clothing.......................... 123 + i Food products................... 106 + 3 Stone, clay and glass. . . . 90 +10 Lumber products............. 69 + « Chemicals and products . 95 + x Leather and products. . . 94 + 2 Paper and printing.......... 98 + 7 Printing.......................... 91 + 6 +n +20 +17 + 4 - 9 - 9 - 7 + 5 +10 + 8 + 9 - 1 + 9 + 7 + + + + + + + 4 5 4 2 1 0 6 4 + + - 1 4 1 0 3 - 2 -13 - 2 + 8 + o +30 Cigars and tobacco___ Rubber tires, goods. . . Musical instruments. . CURRENCY DEMAND (Changes cumulated from Jatu,i93£) MILLIONS Employehours! Employment* Payrolls* (Indexes are percentages of the 1923-25 average Per cent Per cent taken as 100. Total and group indexes are weighted Aug. change from Aug. change from index index proportionately.) 1937 Aug. July 1937 Aug. July 1936 1937 1936 1937 68 84 56 * Figures from 2,354 plants. + 1 - 0 + 5 + + + + 0 0 1 4 2 o 7 + + + ~ - +26 +48 +35 + 7 - 4 - 4 - 3 0 1 1 1 1 1 103 123 161 63 91 88 103 114 93 65 113 92 100 92 +26 +20 +29 + 7 +17 +12 + 4 + 6 + 6 + 0 + 4 + 3 +11 + 3 + 6 + 3 + 4 + i - 1 - 3 + 3 - 2 +22 67 87 56 + 8 + 9 + 6 +42 Aug. Julv 1936 1937 f Figures from 2,103 plants. General Index Numbers 1937 Covering twelve branches of trade and industry 1936 (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) General index JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT OCT. NOV DEC. Percentage change—August 1937 from August 1936 City areas* Manufacturing Employ ment Wage payments Allentown............. Altoona.................. Harrisburg........... Johnstown............ Lancaster............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. Williamsport........ Wilmington.......... Y ork....................... + 7 4- i +16 +30 +10 + 7 + 7 + 4 + 11 + 0 + o +11 + 4 +30 -18 +42 +63 + 14 +18 +17 Allentown............. Altoona.................. Harrisburg............ J ohnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton ................ T renton................. Wilkes-Barre. . . . Williamsport........ Wilmington.......... Y ork....................... - 2 + i - 0 +1 - 1 + i + 0 + II + 1 + 2 + 1 - 3 +1 +22 - 4 + 11 +20 + 18 Building permits (value) Debits + 49 +358 +341 +468 - 94 + 2 + 19 - 36 - 71 - 36 +103 + 70 +116 +16 + 17 +11 +32 +18 + 1 +13 - 4 —12 - 7 + 2 +10 +15 (weighted)___ Manufacturing............................. Anthracite mining....................... Bituminous coal mining............ Building and construction........ Quarrying and non-met. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels............................................. Laundries....................................... Dyeing and cleaning.................. Employment Aug. 1937 index 123 145 67 122 97 128 163 98 108 117 110 109 108 Payrolls Per cent change from Aug. 1936 July 1937 + 8 + 9 - 0 + 3 + 18 + 7 - 1 + 6 + 4 + 5 + 5 + 7 + 2 -0 +0 -9 +9 +i +0 -0 +i -3 +0 -3 +6 -2 Aug. 1937 index 188 250 51 217 130 267 177 107 123 122 119 125 124 4 1 6 0 6 2 9 3 2 2 7 3 4 + 41 - 35 +811 +304 +303 - 31 + 18 - 48 - 38 - 42 - 29 - 0 + 17 -11 -10 -11 + 6 - 9 -13 - 8 -15 -14 -11 - 2 -29 - 8 * Area not restricted to the corporate limits of cities given here. Aug. 1936 July 1937 +22 +26 -13 +16 +29 +20 +13 + 9 +12 +13 +13 +18 +16 + 3 + 4 -23 +15 + 6 + 7 + 2 + 1 - 1 + 2 - 41 + — 5 Retail trade sales + 1 -11 - 4 -10 + 4 - 0 - 6 + 2 + 1 - 2 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 MANUFACTURING AND NON-MANUFACTURING INDUSTRIES AND SERVICES PERCENT fig PAYROLLS - 2 August 1937 from July 1937 + + + + + + + + + Per cent change from + 2 + o +10 +10 -13 +15 - 6 + 5 EMPLOYMENT - 3 + 9 1932 1933 1934 1935 1936 Index numbers of individual lines of trade and manufactures RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT Philadelphia Federal Reserve District Index numbers: percentages of the 1923-1925 average as 100 Not adjusted Adjusted for seasonal variation seasonal change in activity. Per cent ch ange Unadjusted indexes reflect merely the actual change which may or may not Aug. June July Aug. 1936 1937 1937 1937 be typical. Aug. 1937 from Month Year ago ago DEPARTMENT STORES 1937 from 8 mos. 1936 Aug. June July Aug. 1936 1937 1937 1937 Retail trade 81 82 81p 75 73 72 85 69 75 98 95 126 79 72 64 88 108 87p - 2 - 1 + 9 +32 -12 -20 - 0 - 0 + 5 - 1 +12 - 2 83 83 p 81 60 59 61 87 106 82 64 108 110 127 125 68 71 66 79 88 r 106 .106 109p - 1 + 4 -23 - 2 +19 + 2 +19 +12 +28 + 16 +17 +23 81 73 72 127r 63r Credit............................................ 89 r Total of all stores.......................... 70 Rate of stock turnover + 7 + 6 +11 + 9 + 1 +11 64 56 56 87 r 48r 84 r 82 75 91 95 94 83 67 51 66 95 68 87 r - 6* 58 51 57 63 66 71 64p 56 59 86 48 83p men’s 2.41 < A,. v JwV 87 r 63 102r 51 Electrical supplies...................... 81 r 122 56 47 Paper............................................. 74 67 r 27 42r 89 r 75r 72 62 100 lOOp 42 54 111 I08p 56 55 158 130p 120 129p 53 60 57 67 79 81 - 0 +28 - 3 - 3 -18 + 7 + 12 + 19 + 2 +15 -14 + 7 + 0 +60 + a + 8 +43 +10 +20 82 r - 3 71 +12 95 r +24 48 +65 67 r + 7 120 +16 50 +31 41 +20 70 98 92 93p 49 35 61 105 105 lOlp 52 44 51 122 130 107p 129 121 126p 65 52 54 49 39 59 86 75 77 77 75 76p 37 45 38 50 50 49 120 108 102 82 78 85p 79 81 83 49 52 56 66 68 66 + 2 -16 - 3 - 6 + 9 + 2 + 9 - 3 +13 +39 +16 + 15 +13 +15 + 3 + 6 68r 29 45r 95 r 70 r 71 61 63 75 74 nP 35 45 41 51 52 50 117 108 109 79p 75 71 82 81 81 63 59 53 66 68 67 103 57 109 57 149 127 63 59 90 Rate of stock turnover +13* Lumber and products........................ 61 85 75 110 98 r 18 75 35 236 105 74 58 150 126 150 57 52 27 73 102 100 120 126 23 76 45 244 100 72 67 143 113 138 50 56 36 83 109 86 140 124 18 70 43r 255 97 56 72r 100 117 144 55 59 r 33 91 104 81 136 125 13 76 45 264 86 54 69 109 111 127 55p 56 34 Slaughtering, meat packing............. Sugar refining...................................... Canning and preserving.................... Cigars.................................................... Paper and wood pulp........................ Printing and publishing.................... Shoes...................................................... Lea ther, goat and kid........................ Explosives............................................ Paints and varnishes.......................... Petroleum products........................... Coke, by-product............................... 89 69 62 95 69 88 155 115 81 82 151 118 89 67 69 95 77 102 181 127 92 100 166 124 80 87 73 94 77 98 176 136 96 lOOr 170 134 84 89 7Sp 96 76 95 167 119p 92 77 171p 139 Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies........... Shipbuilding..................... ................... Silk manufacture................................ Carpets and rugs................................. Underwear............................................ * Computed from data unadjusted for seasonal variation. Page Eight r i ft *i\ S A t\ ,yi: ?;A fik yty & JNF ’''•SALES 1 WOMEN’S APPAREL STORES Total of all lines............................. Output of manufactures ___l_ STOCKS Wholesale trade Stocks of goods | 77 75 58 54 57 84 86 86 98 97 110 70 62 79 103 105 107p 2.57 APPAREL STORES j I_____ +10 - 5 - 5 - 2 +1 -30 + 8 + 4 + 4 -11 - 3 - 5 + 9 - 5 -12 + 0 - 5 + 3 - 2* + 4 + 2 + 6 + 2 - 1 - 3 — 5 -13 - 4 -23 +1 +49 +21 + 8 +24 +28 -31 + 1 +26 +12 -17 -27 +20 -27 -12 -15 - 5 + 7 +24 + 7* - 6 +29 +25 +1 + 3 +18 +n + 7 + 8 + 3 +13 - 6 +13 +69 +36 +29 +36 +31 +71 +14 +43 +14 +13 + 1 +33 +21 +19 + 4 +20 +43 +29 + 4* + 5 - 7 + 9 + 7 +14 +13 +24 + 5 +15 +14 +11 +23 p—Preliminary. prjh STOCKS \ , \ftf\ A A ■J 4.31 3.82 54 87 73 106 109 r 15 70 36 233 101 76 52 137 110 139 72 54 30 88 77 59 fir 101 69 86 166 111 81 83 152 115 SALES 70 104 99 125 126 28 76 47 242 95 69 64 137 110 138 60 59 37 94 85 71 50 103 77 101 172 128 92 102 167 124 76 99 82 124 130r 18 67 43r 247 95 52 r 63 92 96 119r 64 56 r 36 96 73 88 60 101 74 95r 164 119 94 93 r 171 132 r—Revised. 81 106 79 131 139 11 71 45 262 84 55 62 100 97 118 68p 58 37 95 73 76 69p 102 76 92 179 114p 92 79 172p 136 CREDIT STORES
@FedFRASER