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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA RESERVE DISTRICT OCTOBER i, 1940 r-‘ i. 7 “ * : -• i. -i c g, FEDERAL RESERVE BANK OF PHILADELPHIA -&0T 8—,5‘;! Q Business and Banking Conditions in the United States Production and employment in August showed a further rise from the level maintained in June and July and distribution to consumers also in creased. Prices of industrial materials were somewhat higher in the middle of September than a month earlier. Industrial production. The Federal Reserve index of industrial production is estimated at 123 in August as com pared with 121 in June and July and 111, the low point for the year, in April. This rise has reflected chiefly the direct and indirect effects of the defense program on industries produc ing durable goods and textiles. Steel production rose further in August as new orders for steel continued in large volume, and for the month as a whole mills operated at 90 per cent of capac ity. Following a temporary decline over the Labor Day week, the rate of output advanced to 93 per cent of capacity in the third week of Septem ber. In most branches of the machin ery industries activity showed a con tinued expansion in August and there were further sharp increases in ship building and the manufacture of air INDUSTRIAL PRODUCTION Index of physical volume of production, ad justed for seasonal variation, 1935-1939 aver age =100. By months, January 1934 to Au gust 1940. craft. With the growth in production of finished durable goods, consumption of nonferrous metals advanced to the highest levels since last winter. Output of automobiles was in small volume in August owing to the sea sonal change-over to 1941 model cars. The low point in production was reached early in August; there was a gradual rise later in that month fol lowed by a sharp advance in the first two weeks of September as most com panies began volume production on new models. Lumber production, which had declined in July, rose con siderably in August. Textile mill activity continued to in crease in August and was at the high est level since last January. Cotton consumption advanced considerably further and silk deliveries rose from the small volume of recent months. Activity at wool textile mills increased seasonally, following a sharp rise in July, while at rayon mills activity showed a less than seasonal increase but continued at a high level. Mining of bituminous coal in August was maintained in large vol Three-month moving averages of F. W. Dodge Corporation data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. Latest figures based on data for July and August and estimate for September. FACTORY EMPLOYMENT DEPARTMENT STORE SALES AND STOCKS Index of number employed, adjusted for sea sonal variation, 1923-1925 average =100. By months, January 1934 to August 1940. ume for the season, while production of anthracite declined. Output of crude petroleum declined somewhat further. Value of new construction work undertaken in August was at about the same level as in July, according to reports of the F. W. Dodge Cor poration and the Federal Reserve Bank of San Francisco. The volume of contracts for public projects continued unusually large and the amount of new private work started was larger CONSTRUCTION MILLI DNS OF DO LLARS CONTRACTS AWARDED NS OF DOL LARS 500 4 300 / 1 / I ' W f VWv V % ALL OTHER 1 / V , ___ RESIDEN IAL 0 1934 1935 1936 1937 1938 1939 1940 Indexes of value of sales and stocks, adjusted for seasonal variation, 1923-1925 average =100. By months, January 1934 to August 1940. Page One than in July. Residential building was at the highest level in recent years, on a seasonally adjusted basis, reflecting further increases in both private and public contracts. Distribution. Distribution of com modities to consumers increased con siderably from July to August. Sales at department stores and by mail order houses showed a sharp rise and there was a less than seasonal decline in variety store sales. In the early part of September department store sales continued to increase. Freight-car loadings advanced from July to August when little change is usual. Shipments of coal and mis cellaneous freight increased while load ings of grain showed more than a sea sonal decline. Commodity prices. Prices of several industrial materials, including copper, zinc, steel scrap, lumber, hides, and print cloth, advanced somewhat from the middle of August to the middle of September and, owing partly to sea sonal developments, prices of food stuffs were also higher. Prices of most other commodities showed little change in this period, although some paper items were reduced and several new models of automobiles were an nounced at advanced prices. Agriculture. Production prospects for most major crops increased during August, according to the Department of Agriculture. On the basis of Sep tember 1 conditions the cotton crop was estimated at 12,772,000 bales, about 1,340,000 bales more than was indi cated at the beginning of August. Preliminary estimates by the Depart ment indicate that cash farm income, including government payments, will be about $8,900,000,000 for the calen dar year 1940 as compared with $8,540,000,000 last year. Bank credit. Commercial loans in creased somewhat at banks in New York City and in 100 other leading cities during the four weeks ending September 11, while their holdings of investments showed little change. United States Government security prices. United States Government security prices half of August September and second week in increased in the last and the first week in were steady in the September. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial and trade activity in the industries have been operating at un Third Federal Reserve District has usually high levels for some time. expanded substantially since the mid Production of nondurable goods, how dle of the summer. The demand for ever, advanced 5 per cent more than manufactured goods has increased fur usual in the month. The output of ther and its scope has broadened con coal on an adjusted basis declined in siderably, Production under the na August, while production of crude/oil tional defense program is increasing and electric power increased slightly. in the case of both durable and non I Construction activity in August in durable goods, and increased consumer creased less than seasonally hut con buying power has stimulated output for tinued well above a year ago. \An in n creasing amount of factory construction civil consumption. Productive activity in August ex is under way, and commercial building panded 2 per cent more than usual in and renovation continue active. Industrial employment in Pennsyl this district and further increases were evident in September. In the manu vania increased from July to August facturing industry, the output of du and wage disbursements advanced 5 rable goods increased slightly less than per cent to a level 16 per cent above was to be seasonally expected, as these a year ago. Substantial increases were ' INDUSTRIAL AND TRADE ACTIVITY reported at factories and bituminous mines, and by the building and quarry ing industries. Retail trade sales in this district ex panded sharply in August and increased seasonally in September. Consumers are buying actively in both urban and rural areas, and sales generally are larger than a year ago. Wholesale trade has also increased, and stocks at both retail and wholesale establish ments are relatively small. Prices of manufactured goods have been firm under the pressure of in creasing demand, and quotations on staple industrial materials have been rising with the expansion of produc tive activity. Supplies of most basic commodities continue ample. Prices of FREIGHT CAR LOADINGS PHILADELPHIA FEDERAL RESERVE DISTRICT ALLEGHENY DISTRICT PERCENT 1923 25AVG.» 100 PRODUCTION c 0AL TOTAL MERCHANt)ISE AND MISCEL .ANE0US RETAIL TRADE SALES ADJUSTED 1935 1936 Page Two 1937 1938 1939 1940 OR SEASONA VARIATION 1934 1935 1936 1937 1938 1939 1940 agricultural materials also have firmed somewhat recently but are still rela tively low. Manufacturing. With the national defense program getting under way and an active fall season in prospect, the demand for goods manufactured in this district has improved sharply since the middle of August. Inquiries and sales have broadened, plant activ ity has expanded, and employment and payrolls have increased further. The current stimulus to buying and the favorable outlook are due primarily to sustained consumer incomes, moder ately low inventories on hand in both manufacturing and distributing estab lishments, the generally higher level of industrial operations, and the pros pects for extensive expansion of plants in basic defense lines. Inquiries and sales have increased sharply in all reporting lines of manu facturing in this district, the largest gains in the month being in textiles and textile products, which had for some time lagged in the general indus trial improvement. In most industries except textiles, demand is more active than at the time the war broke out a year ago. Prices of factory products are generally strong and in many lines above the levels prevailing last year. Backlogs at reporting plants in this area have increased and are above a year ago in several important indus tries. As inventories of finished goods have declined and in some cases are below the levels prevailing in 1939, operations have expanded further. Employment in Pennsylvania fac tories increased 3 per cent from July to August to an estimated 930,000 workers, or 8 per cent more than in August 1939. Wage . disbursements also increased about seasonally, rising 6 per cent from July to an estimated $23,800,000 a week, or 19 per cent more than a year earlier. Preliminary re ports indicate further substantial in creases in employment and payrolls in September. Wage payments expanded in both the capital and consumers’ goods in dustries in August. In durable goods lines, where payrolls aggregated 34 per cent more than in August 1939, the principal gains were in iron and steel forgings, structural steel, foun dry and machine shop products, hard ware, some nonferrous metals, automo biles and parts, railway equipment, and cement. At plants producing con sumers’ goods, wage disbursements were still 2 per cent below August of 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. 1939 1940 1940 1940 Aug. 1940 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, totalJ............................ Sales to industries:}:............... 84 r 82 68 r 92 67 90 83 81 103 39 122 121r 87 72 r 73 r 68 r 432 85 83 87 80 91 64 103 86 97 40 128 108 89 73 r 72r 83 405 273 259 165 283 292 294 277 276 290 196 184 193 89 86 93 82 99 r 69 108 87 92 40 129 115 88 83 82 87 411 91p 89p 92p 87p 95 78p 121 85p 104 42 127p 108p 88 73p 72p 82 413 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........................................... Aug. June July Aug. 1939 1940 1940 1940 + 2 + 3 - 1 + 5 - 3 + 13 + 12 - 2 + 12 + 3 ~ 1 - 6 + 0 -11 -12 - 6 + i + 8 + 9 + 35 - 5 +41 -13 +47 + 6 + 1 + 7 + 4 -11 + 1 + 1 - 1 +20 - 4 + 8 + 9 + 32 - 4 +40 -12 +36 + 3 + '5 + 9 + 10 - 9 + 3 + 3 - 2 +42 + 1 83 r 81 84 82 70 84 79 80 110 44 123 124 r 85 55r 54 r 64 r 432 92 63 104 81 104 44 128 105 89 67 r 66 r 73 421 + 8 + 12 + 17 + 8 + 10 + 10 259 246 170 269 272 280 269 260 276 198 187 198 + 5 Factory—Employment................... Payrolls.......................................... Man-hours (1927-28 = 100). . . . General (1932 = 100) Employment................................. Payrolls.......................................... Residential!................................... Nonresidentialf.......................... Public works and utilities!........ Permits for building—17 cities. . . Real estate deeds—Philadelphia! Writs for Sheriff sales—Phila. . . . 1940 from 8 mos. 1939 + i + 5 Employment and wages—Pa. Building and real estate Contracts awarded!—total........... Not adjusted Per cent change + 3* + 8* + 8* + 6* + 19* + 18* + 7* + 21* +21* 83 r 75 r 72r 86 82 80 85 83 89p 89p 94 r 99 64 73p 105 117* 82 81p 100 111 44 48 127 128p 105 111 p 85 86 65 64 53p 76 77 411 413 87 83 81 89 89 87 + 1* + 7* + 7* 106r 112 111 113 + 5* + 16* + 15* 144r 159 159 167 74 r 69 93 90 52 r 55 51 49 45r 56 94 104 211 r 142 187 187 36 23 21 22 53 56 58 57 335 254 256 340 78 76 84 77 79 78 - 3 - 4 + 10 - 0 + 5 - 1 + 33 92p 78p 82 91 93 91 62 63 61 75 73 80 7b 73 79 7b 73 77 + 16 - 1 + 3* + 0* - 2 -42* + 12* + 15* - 0 + i - 3 + 22 - 4 + 131 -11 -38 + 9 + 2 + 18 + 2 + 8* + 5* +ii + 16* + 3* + 6* +21 + 16 +26 + 3 - 9 + 10 + 12 - 2 + 13 -10 72 58 42 184 32 51 321 + 4 59 73 + 7* 71 86 88 58 58 55 57 87 96 135 161 162 29 26 20 56 58 55 254 243 327 84 72 55 70 69p 75p 69 94 90 77 +30* 79 159 158 91 + 5* 106 128 97 109p + 7* 92r 151 85 98p + 22 65 76 78 79 + 17 65 75 75 76 + 28 59 70 70 74 Business liquidations Number............................. Amount of liabilities... . Payment of accounts Check payments.................... Rate of collections (actual) Retail trade........................ -32* + 5* - 9* + 47* — 8* -23* 62 r 14r + s 78 97 87 81 29 33 33 31 75 61 67 so 75 77 71 77 66 70 82 80 80 76 78 70 82 77 66 70 82 78 79 74 92 93 89 95 + 6 + 3 33 32 33 35 + 6 + 7 — + + + + + + + 79 25 95 22 65 20 Prices—United States Wholesale (1926 = 100). Farm products............... Foods............................... Other commodities.... Retail pood.......................... Philadelphia................... Scranton.......................... (In millions of dollars) Aug. 1939 0* 1* 0* 0* 1* 2* 3* 3* 8* 4* 2* 4* 2* 4* + + + + + + + 3* s* 3* 3* 2* 0* 3* 79 80 76 % change from May 1940 June 1940 July 1940 Aug. 1940 0.1 200 0.1 200 0.2 0.2 697 84.2 667 84.0 197 670 84.5 196 650 85.2 +1 446 723 9.2 453 728 8.9 460 725 9.1 475 731 9.7 +3 +1 +7 Month ago Year ago Banking and credit Federal Reserve Bank Bills discounted.............................. 0.3 Other bills and securities............. 209 Member bank reserves................. 516 Reserve ratio (per cent)............... 79.5 Reporting member banks Loans................................................. $ 406 Investments..................................... 727 Bankers’ acceptances outstanding. 8.8 Computed from data unadjusted for seasonal variation. J m PJ°duction index. ! 3-month moving daily average centered at 3rd month. * $ 0 -1 -3 -33 - 6 + 26 + 7 + 17 + 1 + 10 p—Preliminary r__Revi^H § Bureau of the Census, U. S. Department of Commerce. 1 Page Three ACTIVITY IN THE STEEL INDUSTRY METAL PRICES EMPLOYEE-HOURS PERCENT 1932 AVG.= 100 PERCENT foundrie: 350 STEEL SCRAP STEEL W DRKS AND / ROLLIN G MILLS h 300 .'-V1 250 COPPER 200 f 150 100 \ -''^"-MAC HINERY AND ARTS VttW r 'FINISHED STEEL / 1935 1936 1937 1938 last year. The sharpest gains among these lines in the month were in cer tain textiles, clothing, and foods. Average hourly earnings of factory workers in Pennsylvania declined frac tionally to 72p2 cents in the month but, as the number of hours worked per week increased, weekly wages ex panded to $27.31 from $26.39. At Delaware factories the number of wage earners increased 8 per cent in August, and payrolls expanded 4 per cent, reflecting chiefly gains at plants producing foods and tobacco products. Employment was IS per cent and payrolls 27 per cent higher than a year earlier. In southern New Jersey, employment advanced 12 per cent in August to a level 20 per cent above a year ago, and payrolls increased 11 per cent in the month and were about 33 per cent larger than in August 1939. The output of manufactured goods in this district increased 3 per cent more than seasonally from July to August and was 9 per cent above a year ago. Substantial improvement was evident in the volume of textiles, transportation equipment and tobacco products manufactured in the area, while production of metals, foods, leather, and chemicals declined on a seasonally adjusted basis. Among the individual lines of manufacturing, the sharpest gains were in the production of automobiles and parts, carpets and rugs, silk manufactures, and explosives. The gain over a year ago in the out put of manufactured products reflected an expansion in the period of 35 per cent at plants producing heavy goods, especially transportation equipment and metals. Production of nondurable goods, including textile and leather Page Four 1939 1940 1936 1937 products, was 5 per cent less than a year before. The output of electric power in creased 1 per cent more than season ally from July to August, while total sales and sales to industry expanded 5 per cent more than was to be expected. Compared with a year ago, sales to industry showed an increase of 17 per cent. Coal and other fuels. The domestic demand for fuels continues active; increasing productive activity has ex panded industrial requirements, and sales for heating purposes are ad vancing seasonally. Exports of coal decreased about 12 per cent in August but were still 50 per cent greater than in the same month last year. Ship ments of crude petroleum and gas and fuel oils to foreign countries continue substantially smaller than in 1939. Sales of anthracite to retail dealers have increased further since the mid dle of last month and approximate the volume reported a year ago. Produc tion declined more than usual in Aug ust, following improved operations in the preceding two months. In early September activity at the mines in creased sharply, according to prelim inary figures. The volume of hard coal produced in the first eight months of 1940 was 2 per cent less than a year ago, when production was sharply stimulated by the curtailed output of soft coal. Output of bituminous coal in Penn sylvania increased less than seasonally in August, following marked expan sion in the spring and early summer. Operations increased sharply again in the first half of September as industrial demand continued heavy. The pro duction of soft coal in the first eight 1939 19 4 0 months of the year, totaling nearly 72,000,000 tons, was 42 per cent above the reduced levels of 1939 and the largest for the period since 1937. Activity at by-product coke ovens in this district increased in August for the fourth successive month, approxi mating the peak levels reached at the beginning of this year. Output of gas and fuel oils was smaller than in July but continued in larger volume than a year ago. In the first eight months this year operations at both coke plants and oil refineries were at a considerably higher rate than in 1939. Building. Construction activity in this district increased somewhat less than seasonally during August. Cur rent operations, however, continue in large volume relative to previous years, as home building is still fairly active and industrial construction has been stimulated. Recent improvement in general business conditions and the prospects for high operating rates dur ing the next several months have en couraged substantial renovations and some plant additions, and facilities in basic defense lines are being increased to meet unprecedented requirements for Building contracts Philadelphia Federal Reserve District Per cent change August 1940 1940 (000’s From from omitted) month 8 mos. ago 1939 S 5,725 609 5,116 7,489 1,661 2,885 724 2,219 - 11 - 22 - 7 + 33 + 26 + 171 + 19 - 26 $13,214 4,737 -38 -39 + + 7 i $17,951 Public works and utilities. -16 -60 - 3 -48 + 52 -74 -26 + 53 -38 + 5 Source: F. W. Dodge Corporation. BUILDING CONTRACTS TEXTILE FIBERS MILLIONS or LBS. — 400 rh UNITED STATES PRICES MILL TAKINGS DOLLARS i PER LD PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS — .150 COTTON, COTTON TOTAL TOTAL >! • ! INDUSTRIAL 1937 1938 1939 1940 1937 1938 military production. Payrolls in the construction industry in Pennsylvania expanded further in August to the highest level since 1937. The value of new contracts awarded in the month declined to $17,951,000 or nearly 40 per cent less than the exceptionally large awards placed in July. Total awards were 30 per cent below the 1939 high reached last August. Awards for most types of structures were smaller than in July. The sharpest decline was in contracts for factory buildings, which in the month before had included $10,000,000 for new shipbuilding facilities. The renovation and erection of commercial and unclassified buildings continues to increase. Compared with August 1939, the gains in nonresidential building ac tivity have been more than offset by declines in contracts for residences and public works and utilities. In the first eight months of the year, construction awards approximated $142,000,000, or the largest for the period since 1930. Agriculture. Growing conditions for late crops and pastures continued satisfactory throughout most of Sep tember. Harvesting, fall plowing, and the seeding of winter grains are pro gressing rapidly and early plantings of wheat and rye are germinating. Estimates of the tobacco and white potato crops have been revised sharply upward since August 1 and it is ex pected that yields will be considerably larger than in 1939. In the case of tobacco, this season’s harvest in Penn sylvania will be well above the 1934-38 average and may exceed that of any year since 1932. The indications now are that the output of corn and wheat will be slightly below a year ago and 1939 1940 1936 1937 the five-year average, while that of hay and oats will be larger. Cash income from the sale of farm products in Pennsylvania, New Jersey, and Delaware has continued to expand and in July was 8 per cent larger than in the same month last year. Receipts from the sale of crops and livestock products through July totaled $218,292, 000 in 1940, or 4 per cent more than a year earlier. Government payments to farmers in the period, amounting to $6,207,000, showed about the same per centage increase over 1939. Distribution, trade and service. The movement of commodities into con suming channels expanded sharply in August and advanced further in Sep tember. During the several preceding months sales had lagged behind the improvement in general industrial ac tivity. The substantial increase in retail buying reflected sustained in creases in consumer incomes and an abrupt change in weather in the second half of August, which stimulated pur chases of fall merchandise. Whole sale trade sales also expanded in the month, owing to a large volume of re ordering and some advance buying. The movement of railroad freight in creased to new high levels for the year. Sales by retail establishments in this district increased substantially more than usual in August, so that the ad justed index advanced 16 per cent in the month to the highest level since 1930. Early reports indicate sharp seasonal gains in trade during the first three weeks of September. The greatest improvement from July to August was reported by shoe stores, where sales were sustained instead of continuing to decline seasonally. The volume of business at apparel stores 1938 1939 1940 and at credit stores specializing in radios, refrigerators, furniture and other durable consumers’ goods also increased more than usual. The gain in sales by department stores was 10 per cent when allowance is made for seasonal changes. Compared with August 1939, retail trade sales increased 18 per cent, the largest gains being reported by dis tributors of footwear and women’s clothing. In the first eight months of this year total retail sales were 4 per cent larger than a year ago. As a result of the improvement in sales volume, stocks of goods at retail stores increased slightly less than usual in the aggregate and showed consider ably smaller than seasonal increases at shoe and credit stores. Inventories were 2 per cent larger than a year ago. Wholesale trade sales increased 3 per cent from July to August and ex panded further in September. Sharp gains were reported in sales of dry goods, footwear, and jewelry, while the volume of business declined in the case of electrical supplies, paper, gro ceries, and drugs. Total sales were 8 per cent above August 1939, and in the first eight months of the year they were 7 per cent larger than in the same period last year. Inventories at wholesale establishments in August were about unchanged from July and were about 5 per cent above August 1939. Freight shipments by rail increased seasonally from July to August and ad vanced further to reach a new high for the year in September. The aggre gate movement of freight in August was 21 per cent above the same month of 1939. The principal gains on an ad justed basis from July were again in Page Five shipments of ore and coke, reflecting high operating rates in steel and other heavy industries. Less than carlot shipments of merchandise and the movement of forest products also im proved in the month. The only declines in shipments on an adjusted basis were in the case of coal and grain, the latter having moved in unusually large vol ume the month before. Loadings of freight in the Philadelphia area in Aug ust were also above July, and a new peak for the year was reached in Sep tember. Sales of new passenger automobiles declined 42 per cent from July to August, as manufacturers shifted into the production of 1941 models. This level, however, was still 16 per cent above August 1939. The income of nonresort hotels in August increased 15 per cent from July and was 6 per cent above a year ago. Hotel business Philadelphia Federal Reserve District Aug., per cent 1940 change from from 8 Month Year mos. 1939 ago ago — 0 + 12 +5 + 3 + 12 + 7 +7 +7 -+ 5 + 15 Total revenue.................. + o + 3 + 17 + 14 + 12 Room occupancy.................... Per cent of capacity used: Aug. 1940................ 48.5 July 1940................ 43.4 Aug. 1939................ 47.1 Revenue from: Guest rooms........................ F ood....................................... Other sources...................... + 6 +7 Banking conditions. Outstanding credit of the reporting banks has de clined in the past month owing to a moderate reduction in commercial loans. In the latter part of August the amount of this type of credit out standing reached the highest level of recent years. An increased volume of available funds, supplied largely by ex pansion in deposits, was reflected in heavier balances carried with the Fed eral Reserve Bank and other banking institutions. The reserves of all member banks in this district, averaging $656,000,000 in the first half of September, were more Federal Reserve Bank of Philadelphia (Dollar figures in millions) Sept. 18, 1940 Four weeks One year Bills discounted............ Bills bought................... Industrial advances. . . U. S. securities.............. $0.2 0 2.4 193.0 + *0.1 0 - 0.0 - 1.1 - $0.1 - 0.1 - 0.3 - 48.3 Total............................ Note circulation........... Member bank deposits. IJ. S. general account. . Foreign bank deposits. Other deposits............... Total reserves............... Reserve ratio................. $195.6 372.7 660.6 47.9 65.0 25.6 999.5 85.3% —*1.0 + 5.4 + 16.7 - 7.5 -19.9 + 1.5 - 1.2 +0.2% -$48.8 + 45.5 + 111.0 + 3.2 + 16.9 + 20.8 + 249.8 +8.4% Changes in— than double the legal requirements and approximately $128,000,000 larger than a year ago. An analysis made earlier in the summer showed that the mem bers were then carrying well over $400,000,000 with correspondents. At 458 of the 650 banks correspondent balances were equal to or greater than required reserves. In the four weeks ended September 18 member bank reserves increased $16,700,000 to $660,600,000. Approx imately $18,000,000 was gained in transactions with other districts. Funds were supplied also by net Treasury disbursements of nearly $7,000,000, al though income tax receipts were sub stantially heavier than a year ago. On the other hand, reserve funds were absorbed by an expansion of $6,000,000 in currency demand. The only material change in bill and security holdings of the Federal Reserve Bank was a decline of $1,100, 000 in holdings of governments to $193,000,000 as a result of sales of securities from the System Open Mar ket Account. Outstanding credit of the weekly reporting member banks was at the highest point in recent years on August 21, but in the four weeks ended September 18 was reduced to $1,202, 000,000 by declines of $4,000,000 in loans and $2,000,000 in investments. The principal changes among the sev eral classifications were decreases of $6,000,000 and $2,000,000, respectively, in commercial loans and in direct ob Changes in Reporting member banks (000,000’s omitted) 18, 1940 Four weeks One year* -$ + - 6 3 1 1 0 0 1 +*37 + 13 + 4 0 + 1 0 + 17 Assets Commercial loans................. $ Open market paper............. Loans to brokers, etc........... Other loans to carry sec-ur.. Loans on real estate............ Loans to banks...................... Other loans............................. 226 38 21 31 50 1 107 Total loans......................... $ 474 - $4 + *72 Government securities........ $ Obligations fully guar’teed. Other securities..................... 359 94 275 -$ 2 + i - 1 -$ 1 + 1 + 3 Total investments........... * 728 -* 2 +$ 3 Total loans & investments $1,202 -$ 6 Reserve with F. R. Bank. . 485 + 13 21 + l Balances with other banks. 216 + 14 78 — 2 +*75 + Liabilities Demand deposits, adjusted. $1,002 —*12 261 — 1 U. S. Government deposits. 47 + 1 463 + 30 0 o + 2 214 0 * On comparable basis. ligations of the United States Govern ment and an increase of $3,000,000 in holdings of open market paper, which now are materially larger than a year ago. Commercial loans, totaling $226, 000,000 on September 18, were about 20 per cent larger than in mid-Septem ber 1939. The reporting banks have gained $18,000,000 of deposits in the past four weeks. Adjusted demand deposits were reduced by tax payments and currency requirements, but these losses were easily offset by a rise of $30,000, 000 in balances held for other banks. In August the deposits at all mem ber banks in the district averaged $3,246,000,000. Balances at country banks averaged $1,592,000,000, the largest on record and approximately 5 per cent greater than in August 1939. At banks in Philadelphia the increase over a year ago was nearly 10 per cent, but the August average of $1,654, 000,000 was $41,000,000 under the high point last May, owing principally to payments from the accounts of States and local governments. MEMBER BANK RESERVES AND RELATED FACTORS Member bank reserves (Daily averages; dollar figures in millions) Held Re quired Ex cess Philadelphia banks: 1940: Aug. 1-15 $462.9 $222.2 $240.7 Aug. 16-31 460.6 222.0 238.6 Sept. 1-15 463.0 221.9 241.1 1939: Sept. 1-15 357.5 195.9 161.6 Ratio of excess to re quired 108% 107 ” 109 * 82 ” Country banks: 1940: Aug. 1-15 Aug. 16-31 Sept. 1-15 188.0 187.8 193.3 99.3 99.4 99.7 88.7 88.4 93.6 89 ” 89 ” 94 ” 1939: Sept. 1-15 171.1 97.3 73.8 76 " Page Six Philadelphia Federal Reserve District (Millions of dollars) Sources of funds: Reserve bank credit extended in district.. . Commercial transfers (chiefly interdistrict) . Total..................................... Uses of funds: Currency demand........................................ Changes in weeks endingAug. 28 Sept. 4 Sept. 11 Sept. 18 Changes in four weeks - 0.2 - 1.7 + 14.7 +0.4 + 6.1 -1.6 +0.9 + 1.4 +5.2 - 1 .8 + 12.4 -11.6 - 0.7 + 18.2 + 6.7 - 1.0 +24.2 + 12.8 + + + - 29 63 36 0.0 + 2.8 + 2.2 -0.0 -0.1 + 12.8 +4.9 +6.5 +0.3 - 0.2 + 1.7 - 0.1 + 16.7 + 1.5 - 0.2 - 1.0 + 24.2 Employment and Payrolls in Pennsylvania MILLIONS (All figures are rounded from original data) Manufacturing Indexes TOTAL Employment* Payrolls * (Indexes, are percentages of the 1923-25 average taken Per cent Per cent as 100. Total and group in dexes are weighted propor Aug. change from Aug. change from 1940 1940 tionately.) index July Aug. index July Aug. 1940 1939 1940 1939 All manufacturing.... Iron, steel and prods......... Non-fer. metal prods........ Transportation equip.. . . Textiles and clothing. . . . Textiles........................... Clothing.......................... Food products................... Stone, clay and glass........ Lumber products............. Chemicals and prods........ Leather and products.. . . Paper and printing........... Printing........................... REQUIRED; '38 ’39 89 87 125 63 88 81 119 106 79 64 96 88 99 87 +3 +3 -1 +3 +5 +4 +8 +2 +2 +1 +2 +2 +2 -0 + 8 +25 + 12 + 16 - 9 -11 - 3 Cigars and tobacco. . . . Rubber tires, goods___ Musical instruments.. EXCESS 65 82 68 +1 +3 + 4 - 4 + 20 ALL MEMBER BANKS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS * 3000 89 + 6 113 + 6 161 + 2 70 + 10 82 + 11 76 + 10 112 + 13 114 + 3 81 + 6 62 + 5 108 + 2 87 + 0 103 + 2 93 + 2 - 1 + 3 - 1 +4 Aug. 1940— per cent change from July Aug. 1940 1939 Figures from 2,414 plants. + 7 + 6 + 6 + 12 + 10 + 10 + 12 + 5 + 4 + 2 + 2 - 0 + 2 + 2 + 21 +36 + 22 +33 -10 -11 60 + 2 + 3 + 3 90 - 1 0 - 0 70 + 6 + 32 + 6 +» + 7 + 7 + 12 + 19 + 37 + 23 +27 - 7 - 9 - 1 + 5 + 10 + 10 + 13 + 3 + 5 + 2 Employeehours f + 3 - 2 + 28 - 9 + * +n + 9 + 19 - 9 + 4 + 0 t Figures from 2180 plants. DEPOSITS General Index Numbers 2500 Covering twelve branches of trade and industry 2000 INVESTMENTS Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) LOANS Aug. 1940 index General index ■CASH ASSETS 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 Percentage change—August 1940 from August 1939 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton. . . . . . . . . . . . . . . . Wilkes-Barre.... Williamsport........ Wilmington.......... York....................... Wage payments Building permits (value) Debits + 15 + 17 + 18 +33 - 2 + 5 + 2 - 9 + 17 + 2 + 5 + 17 + 12 +2.5 +25 +31 +34 - 1 + 12 + 8 - 5 +27 + 7 + 6 +27 +23 + 56 + 6 + 34 + 72 + 454 - 57 + 95 + 91 + 116 - 43 + 102 - 68 +483 + 12 +21 +25 +25 + 0 - 4 + 6 + 15 +24 + 8 + 11 + 14 + 12 Wilmington.......... York....................... + + + + + + + + + + + + + 3 0 4 2 1 3 4 4 8 0 3 i 7 + 9 + 7 + 11 + 2 + 2 + 4 + 12 + 14 + 11 + 18 + 9 + 0 + 9 - 47 - 7 - 25 - 19 - 31 - 60 + 23 + 5 — 5 + 101 + 42 + 421 + 3 + 13 + 5 + 1 - 8 - 7 - 0 + 2 + 7 - 1 — 4 -10 - 3 Aug. 1939 + 7 + 8 + 4 + 14 + 1 + 7 + i + 4 + 4 + 5 - 2 + 6 + 9 Per cent change from Aug. 1940 index July 1940 + 5 + 6 - 9 +n + 8 + 7 - 0 + 3 - 3 + i - 1 + o - 4 167 217 56 221 80 238 162 114 118 125 114 134 119 Aug. 1939 + 16 + 19 - 2 + 27 + 10 + 13 + 4 + 7 + 5 + 6 + 2 + 8 + 11 Retail trade sales + 21 + 14 + 30 +40 + 20 + 18 + 24 + 13 +25 + 10 INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 13 BRANCHES or TRADE AND INDUSTRY PERCENT 193 2AVG. = 100 200 PAYROLL \ 180 +38 1 160 August 1940 from July 194C Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton............... Trenton................. Wilkes-Barre. . . . July 1940 +i +3 -1 +1 +3 +1 -0 +0 -3 +i -2 +0 -2 113 139 66 105 58 116 135 100 97 119 100 107 100 (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.................. Payrolls Per cent change from + 22 + 21 + 16 + 29 + 5 + 25 +22 + 9 + 16 + 15 + 19 +43 •/ § * 140 % ,/A tj • t J » V**' 120 ** • « 1 1 / V/ 1 1 l S ‘ I'WN/ , Vi A v' i , •Vv ^ V EMPL 0YMENT 100 60 1934 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT Index numbers of individual lines of trade and manufactures 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. Not adjusted Per cent chimge Unadjusted indexes reflect merely the actual change which may or may not Aug. June July Aug. 1939 1940 1940 1940 be typical. Aug. 1940 frc m Month Year ago ago DEPARTMENT STORES 1940 from 8 mos. 1939 Aug. June July Aug. 1939 1940 1940 1940 Retail trade Sales Total of all stores........................... Department................................. Men’s apparel............................. Women’s apparel....................... Shoe............................................... Credit............................................ Stocks of goods 78 67 71 r 91 r 84 r 100 76 52 107 70 95 84 75 81 95 95 97 79 92p 73 80 70 80 95 114 77 108 92 109p + 18 + + 19 + + 13 + + 25 — +29 + + 10 + + 16 + 10 + 15 +20 +41 + 18 77 78 78p - 1 + 1 52 52 52 + 8 96 102 110 - 5 70 70 66 106 106 103p - 3 + + + + 4 6 5 1 1 4 2 1 2 5 9 Rate of stock turnover 59 84 73 50 54 r 93 67 r 86 50 112 92 84 73 48 101 71 92 H 72 49 83 67 97 55 50 54 55 64 67 69p 60 61 84 65 92p MENS APPAREL STORES 70 46 49 79 103 61 67 97 lOOp 4* 3.99 4.15 Wholesale trade f Sales + 3* + 91* - 5* + 21* -15* - 6* + 6* + 43* -11* + 0* 0* - 7* + 2* - 0* + 5* + 0* Stocks of goods Output of manufactures Pig iron.................................................. Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies........... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds........................ Cotton products.................................. Carpets and rugs................................. Underwear............................................ Cement.................................................. Lumber and products........................ Slaughtering, meat packing............. Sugar refining...................................... Canning and preserving.................... Cigars..................................................... Paper and wood pulp........................ Printing and publishing.................... Leather, goat and kid........................ Explosives............................................ Paints and varnishes......................... Petroleum products........................... Coke, by-product............................... 52 82 85 94 65 85 98 93 73 69 72 56 62 93 126 113 76 106 104 r 102 17 24 13 22 70 69 70 87 32 32 35 20 356 529 553 581 89 75 66 61 65 r 50 53 55 54 43 45r 43 142 74 72 97 78 98 r 103 117 164 126 145r 138 60 57 56 63 36 45 51 47 27 27 25 26 106 104 63 102 74 90 150 93 r 85 83 162 lllr 104 51 81 96 83 91 126 90 r 94 84 164 135 103 86 84 91 85 89 135 97 99 93 158 141 115 51 82p 103 81 90 130 88p 126 83 151 p 142 * Computed from data unadjusted for seasonal variation. t Bureau of the Census, U. S. Department of Commerce. Page Eight + 8* + 5* + 4* + 9* + 19* - 3* + 24* +36* + 11* + 5* +10 - 5 + 4 -10 - 2 + 44 + 24 + 11 + 5 + 22 + 5 - 3 + 34 + 0 - 5 + 13 - 8 + 2 - 3* +81 +43 +28 +82 + 35 +n -40 - 3 + 13 - 4 + i - 4 - 9 + 27 -11 - 4 + i + 7* + 4* + 1* + 2* + 20* 0* + 16* + 25* + 19* -14* + 10* + 12* + 16* + 2* + 13* + + + + + 86 38 37 34 39 +u — 8 +24 + 19 +71 + 103 + 63 + 46 -16 — 14 -14 — 9 -19 — 2 -32 — 13 -12 — 16 -16 — 5 + 4 + 3 +31 + 29 - 5 + 6 + 4* + 0* + 8 + 3 -51 — 9 + 29 + 16 + i + 10 + 0 -14 + + + 6 12 1 — 12 - 6 + 48 + 0 — 5 + 30 + 5 - 7 + 28 + 3 + 38 p—Preliminary. 46 67 54 60 84 18 66 21 352 87 66 r 49 130 101 153 76 37 30 85 89 89 71 109 74 87 161 90 r 85 85 163 109 78 87 72 97 106 15 69 32 524 63 r 48 40 71 76 126 68 47 28 92 98 54 58 103 82 90 120 91r 94 86 165 135 79 89 66 112 109 r 17 67 32 536 60 r 50 39 67 80 120r 65 49 28 92 91 88 68 99 81 r 86 125 85 97 86 159 138 82 95 69 109 113 21 82 36 575 73 57 39 89 90 128 79 49 28 89 97 44 72p 110 81 87 139 85p 126 85 152p 140 r—Revised, SHOE STORES CREDIT STORCS
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