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BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA OCTOBER 2, 1944 JPLANS for the ultimate large-scale reconver sion of industrial plants are developing on an ever broadening front, although emphasis must remain for the present on efforts to meet promptly the continuing heavy requirements for war materials, supplies, and equipment. Spe cific preparations now are in the making to shift a substantial proportion of the nation’s capacity out of war production as the conflict in Europe approaches a climactic phase with the opening of the battle for Germany. Although the successful termination of this campaign still may be some months away, the very mag nitude of the reconversion task that lies ahead suggests the urgency of implementing the ini tial measures undertaken earlier this year by the War Production Board. engaged in war production to establish “con version departments” to facilitate the transition to peacetime output when the expected large scale contract terminations come at the close of hostilities in Europe. Similar measures have been taken elsewhere in the country; even the automotive industry, the nation’s largest single producer of armaments, has received permission to assign a limited number of engineers and technicians to production planning for civilian vehicles. Meanwhile, productive activity in the country as a whole appears to have stabilized at approxi mately the level reached in mid-summer. Total industrial production in August was about 4 per cent under a year earlier and 6 per cent below the wartime peak reached last fall. Authorizations are being given an increasing Over-all output of munitions rose slightly in the number of small producers with munitions-free month but was a little short of the volume sched facilities to resume the output of approved civil uled by the War Production Board. Satisfactory ian goods, provided neither manpower nor ma progress appears to have been made in sev terials are employed at the expense of the war eral critical categories, with production in some effort. When the so-called “Spot Authorization cases rising steeply to record high levels. Fur Plan” first went into effect, applications for lim ther gains must be made in most major pro ited reconversions were not given consideration grams to meet 1944 goals. if they applied to plants located in tight labor Total nonagricultural employment was areas. Several weeks ago, however, procedure slightly greater than in July, although the num was relaxed in this respect, as evidenced by the official approval of plans for a few small firms ber of wage earners was about one million less in the Philadelphia area to resume the manu than in August 1943, according to the Depart ment of Labor. Employment in agriculture in facture of articles for the civilian market. creased seasonally during August but the indus try approaches the year’s peak demand for farm Going one step further, regional representa tives of the War Manpower Commission for this labor with about 400,000 fewer workers than a district subsequently authorized producers still Continued on page 11 The Economy of the Third Federal Reserve District Impact of War On Manufacturing — Employment* MANUFACTURING EMPLOYMENT AND HOURS WORKED PFRCFNT Page Two i 1939=100 250 i i 1 150 ------------ ------------ PERCENT 250 TOTAL HOURS WORKED 200 200 EMPLOYMENT-. IOO 90 80 70 PRE NATIONAL DEFENSE PERIOD defense PERIOD Despite heavy withdrawals into the armed forces, manufacturing employment in Pennsyl* Since figures for the Third Federal Reserve District are not available, data for the State of Pennsylvania are used throughout this analysis. PENNSYLVANIA 1 150 c Immediately following the outbreak of war in Europe, there occurred a sharp upturn in both employment and hours worked but it was of short duration. However, by June 1940 when our national defense efforts got under way, em ployment and hours worked rose again and con tinued to expand. The year and a half of na tional defense preparation was characterized by the greatest gains of the war period. Em ployment increased 32 per cent and total hours worked 55 per cent. Unemployment, which was about 8 million for the country as a whole in March 1940, had declined to 3 million by De cember 1941 and bottlenecks had developed in numerous industries because of shortages of skilled personnel. When total manufacturing employment in Pennsylvania is broken into its more important component industries, employment changes be tween 1939 and 1943 show variations ranging from an increase of almost 1,800 per cent in air craft to a decline of 34 per cent in hosiery. In Table 1 it will be seen that all increases of 60 per cent or more in employment are confined to the distinctly “war” industries. Those indus tries in which employment increases ranged be- CD« In 1939 about 858,000 wage earners were em ployed in Pennsylvania factories. By 1943 this number had risen to more than 1% million, an increase of almost 400,000, or 46 per cent. War has demanded a more intensive utilization of available manpower as well as increased em ployment. The average number of hours worked per week thus rose from 36 in 1939 to 45 in 1943. o Over-all growth vania increased 6 per cent during the first year of the war. This was accomplished largely by drawing on the population reserves outside the normal working force such as housewives, stu dents, and retired persons, and, to some extent, by diverting workers from nonmanufacturing occupations into the more essential manufac turing industries. By 1943 accessions from these sources began to fall off. After a slight increase in the first two months of the year, manufac turing employment remained at an almost con stant level. Total hours worked also tended to level off after our entrance into the war. However, hours worked afford more flexibility than em ployment; in both 1942 and 1943 hours worked increased more rapidly—13 and 5 per cent re spectively, in contrast to increases of 6 and 2 per cent in employment. O tories before the war, there are now three. But in many cases they are not the same workers, nor are they in the same plants, nor are they making the same products. For every 10 workers in pre-war steel mills making steel for refrig erators and automobiles there are now 16 workers making steel for jeeps and shells. For every 10 men employed in building freighters and tankers before the war, there are now 85 employed in building army transports and battleships in addition to the pre-war products. For every 10 workers employed in aircraft manufacturing before the war, there are now 185 making fighter craft and flying fortresses. ^ For every two workers in Pennsylvania fac 1939 1....... ....... 1................... 1940 1941 FIRST YEAR SECOND YEAR OF WAR OF WAR .................. 1 1942 1943 tween 12 and 36 per cent include producers of raw materials for war industries and essential food industries which were expanded by de mands of our armed forces and Lend-Lease re quirements. Below this group comes, with few exceptions, an array of consumers’ goods in dustries restricted in their production by prior ities and generally unsuccessful in obtaining replacements for wage earners lost to the armed services and to “war” industries. TABLE 1: EMPLOYMENT AND HOURS IN SELECTED MANUFACTURING INDUSTRIES IN PENNSYLVANIA Average 1939—Average 1943 Industry % increase in employment Shipbuilding....................................... Electrical machinery........................ Structural iron and steel................ Foundry products............................. Motor vehicles, bodies and parts. . Machinery except electrical........... Nonferrous metals........................... Heating aud plumbing supplies... Steel works and rolling mills......... +1,756 + 777 + 165 + 115 + 109 + 102 + 85 + 75 + 69 + 60 Canning and preserving.................. Blast furnaces.................................... Brick, tile, and terra cotta............. Glass..................................................... Slaughtering and meat packing... Coke..................................................... Bread and bakery products........... + + + + + + + 36 35 31 27 21 14 12 Woolen and worsted goods............ Men’s furnishings............................. Men’s and boys clothing............... Confectionery..................................... Cotton goods...................................... Printing................................................ Petroleum refining............................ Paper and wood pulp...................... Knit goods.......................................... Tanning and leather finishing.... Silk and rayon goods....................... Cement................................................ Shoes.................................................... Hosiery................................................ + + + + + + + Total manufacturing................... + — — — — — % increase Average Average in total weekly weekly hours hours hours worked 1939 1943 +2,214 + 952 + 234 + 169 + 162 + 140 + 134 + 98 + 126 + 95 49.6 49.0 46.7 46.5 46.8 46.3 50.0 45 2 47.1 43.9 43.1 41.0 36.7 37.1 37.0 38.8 39.2 37.5 36.0 34.0 + + + + + + + 50 65 52 47 24 43 29 40.7 45.4 36.0 40.2 44.7 43.5 44.7 37.4 36.7 32.1 34.1 41.6 35.4 40.3 7 5 4 4 3 3 3 0 1 11 ii 12 13 34 + 24 12 29 14 16 6 19 15 8 2 1 5 4 24 42.7 37.1 38.5 42.2 41.3 40.2 42.5 47.1 39.9 40.5 40.0 40.6 40.5 39.4 36.5 33.6 33.3 38.8 37.7 36.6 36.0 41.5 36.6 37.9 35.0 37.2 36.6 34.7 45.9 + 100 44.8 36.3 + + + + + + + — + — — — Changes in employment do not tell the com plete story of wartime manpower utilization. To stretch the available labor force to meet production schedules or to compensate for un replaced workers, the average work-week has been increased considerably in every one of these industries. In 1939, only five of the indus tries studied had an average work-week of over 40 hours while in 1943 only five had an average work-week of less than 40 hours. tion in these industries will have to be achieved largely through increased employment rather than through longer hours. In the remaining industries, considerable leeway still exists to expand production through longer hours. This is particularly true of the industries having an employment increase of less than 12 per cent. This suggests the possibility of additional trans fers of wage earners from the latter industries to those already operating at full capacity. This is, of course, what the War Manpower Commission has attempted to achieve by order ing a 48-hour week for industries in areas such as Philadelphia which have a critical man power shortage. The fact that production has been expanded by an increase in average hours as well as by greater employment is important for the post war period. It suggests that when demand falls off in certain industries, production may be contracted substantially without a correspond ing decline in employment simply through re ducing the average work-week. Of course, the shorter work-week is by no means the complete solution to full post-war employment. Wage earners will have to shift from one industry to another and from one area to another, training programs will be necessary to create a labor force with the skills sought by employers, and workers of school age must be urged to complete their edu cation. Furthermore, many workers now but not normally in the labor market are expected to withdraw. Impact of war on the distribution of manufac turing employment Wartime changes have altered considerably the industrial pattern of the state as shown by the redistribution of manufacturing employ ment. Table 2 shows the distribution of work ers employed in 1939 and 1943. One of the most important changes has been a pronounced shift of workers into durable goods manufacturing. In 1939, Pennsylvania’s manufacturing wage earners were divided nearly equally—47 per cent in durable and 53 per cent in nondurable. By 1943 the demands In the industries where employment gains of war for metals and metal products had were the greatest, average hours worked per brought about a complete alteration in this week generally were also the greatest. It ratio. Wage earners engaged in durable goods appears that any further expansion in produc manufacturing comprised 61 per cent of the Page Three total while those in nondurable goods manu facturing accounted for only 39 per cent. The group comprising iron and steel and machinery manufacturing employed one-third of all manufacturing wage earners in 1939 and by 1943 its proportion had increased to 42 per cent. Electrical machinery almost doubled its share of the total, increasing from 3 per cent to almost 6 per cent. Non-electrical machinery likewise gained in importance in the economy, rising from 5.5 per cent of the total to 7.0 per cent. Although steel works and rolling mill products made a gain in their relative position, it is interesting to note that blast furnaces, which supply steel works with one of their raw materials, actually lost ground. This is ac counted for largely by the growing use of scrap metal as a raw material for steel mills. TABLE 2: DISTRIBUTION OF WAGE EARNERS IN SELECTED MANUFACTURING INDUSTRIES IN PENNSYLVANIA. 1939-1943 Employment Percentage distribution 1939 1943 1939 Iron, and steel and machinery. . . Blast furnaces...................................... Steel works and rolling mills........... Foundry products............................... Structural iron and steel................... Heating and plumbing supplies... . Machinery except electrical............. Electrical machinery.......................... Nonferrous metals............................ Transportation equipment.......... Motor vehicles, bodies and parts... Shipbuilding................. ....................... Aircraft.................................................. Lumber products.............................. Furniture............................................... Lumber and planing mill products. Stone, clay, and glass..................... Brick, tile, and terra cotta............... Glass....................................................... Textiles................................................... Cotton goods........................................ Woolen and worsted goods.............. Silk and rayon goods......................... Hosiery.................................................. Knit goods............................................ Clothing................................................. Men's and boys’ clothing................. Women’s clothing............................... Men’s furnishings............................... Food products..................................... Bread and bakery products............. Slaughtering and meat packing.... Canning and preserving................... Confectionery....................................... Leather and leather products. . . Shoes...................................................... Leather tanning and finishing......... Paper and printing........................... Printing................................................. Paper and wood pulp........................ 290,400 5,700 139,900 15,100 8,400 14,200 47,500 28,000 17,400 28,000 13,600 6,600 1,300 23,800 11,500 9,000 45,100 10,400 17,300 144,700 5,400 14,200 36,700 41,700 15,900 90,300 22,000 33,500 30,400 61,600 25,100 6,500 5,200 9,500 27,900 16,100 8,100 50,600 28,900 15,200 527,700 7,700 223,600 31,600 18,000 24,000 87,600 74,200 30,500 134,300 27,600 57,600 23,500 21,300 10,700 7.300 55,100 13,600 22,100 125,000 5,600 15,300 32,800 27,400 15,800 89,100 23,000 28,800 32,000 68,900 28,100 7,900 7,000 9,800 25,600 14,000 7,300 53,000 29,700 15,300 33.8% .7 16.3 18 f!l. 0 i. v 5.5 3.3 X 2.0 J.3.3 1.6 .8 .1 2.8 1.3 1.0 5.3 1.2 2.0 16.9 .6 1.7 4.3 4.9 1.9 10.5 2.6 3.9 3.5 7.2 2.9 .8 .6 1.1 3.2 1.9 .9 5.9 3.4 1.8 Total durable goods......................... 404,700 768,900 47.2 61.4 Total nondurable goods................. 453,600 483,400 52.8 33.6 (Individual industries are selected and do not add to group totals.) Page Four 1943 42.2% .6 17.9 2.5 1.4 1.9 7.0 5.9 2.4 10.7 2.2 4.6 1.9 1.7 .9 .6 4.4 1.1 1.8 10.0 .4V 1.2 2.6 2.2 1.3 7.1 1.8 2.3 2.6 5.5 2.2 .6 .6 .8 2.1 1.1 .6 4.2 2.4 1.2 The most outstanding increase took place in the transportation equipment group. Its wage earners in 1939 were but 3.3 per cent of the total compared with 10.7 per cent in 1943. Shipbuilding grew in relative importance from less than 1 per cent to almost 5 per cent, while the aircraft industry employed almost 2 per cent of the total in 1943 in contrast to a negli gible percentage in 1939. Of the remaining three groups producing durable goods only nonferrous metals gained in relative importance. The share of lumber and its products declined from 2.8 per cent to 1.7 per cent of the total; stone, clay, and glass products declined from 5.3 per cent to 4.4 per cent. These declines are explained by the fact that most of the necessary war construction had been completed by 1943 and unessential con struction was restricted. In nondurable goods the percentage of total employment declined in every major group as well as in each component industry. The textile group experienced the greatest relative decline. It decreased in importance from almost 17 per cent in 1939 to 10 per cent in 1943. Among the textiles, hosiery and silk and rayon goods showed the most striking losses; wage earners in the former fell from 4.9 per cent of the total to 2.2 per cent and in the latter from 4.3 to 2.6 per cent. Closely associated with the relative decline in textiles was the shrinkage in the proportion of total wage earners engaged in clothing manufacture. In 1939, 10.5 per cent were thus employed in contrast to 7.1 per cent in 1943. Wage earners employed in the manufacture of women’s clothing represented only 2 per cent of the total in 1943 compared with almost 4 per cent in 1939. Declines also were shown in the remaining nondurable groups—food prod ucts, paper and printing, and leather and leather products. Manufacturing employment by areas Although the over-all employment gain in manufacturing in Pennsylvania appears large when viewed in isolation, in comparison with other areas of the United States it becomes much less striking. In Table 3 the percentage increases in wage earners and salaried em ployees (not entirely comparable with previous figures which deal only with wage earners) from 1939 to 1943 are shown for the large geo graphical areas of the United States and for Pennsylvania, New Jersey, and Delaware. TABLE 3: WAGE EARNERS AND SALARIED EMPLOYEES IN MANUFACTURING 1939 AND 1943 Percentage 1939 to 1943 East North Central............... West North Central.............. Delaware.......................... East South Central............. West South Central............... Pacific...................... Total—United States.... Percentage distribution 1939 1943 11.7% 28.9 10.3 5.8 27.7 10.5% 26.7 9.1 + + + + + 45% 48 42 58 62 78 44 77 59 85 64 154 3'6 4.2 + 61% 100.0% 100.0% + + + + -j+ 11 8 27.8 5.7 9.1 Pennsylvania’s increase in manufacturing employment—42 per cent—was well below the average for the United States as a whole—61 per cent. New Jersey, partially included in the Third District, was also below the national average with an increase of 58 per cent while Delaware was considerably above, with an in crease of 77 per cent. Percentage gains in employment were small est in the eastern and east central regions— areas that were highly industrialized before the war. For their industries war meant con version of existing plants to the production of war products. The largest gains were reg istered in the Pacific and west south central areas where the war hastened the process of industrialization. In terms of per cent distribution of the coun try’s manufacturing employment, these diver gent rates of growth meant that any area ex panding less rapidly than the United States as a whole necessarily contracted in relative im portance. Hence, in general, proportions in the East declined while those in areas west of the Mississippi increased. The wage earners and salaried workers engaged in manufacturing in Pennsylvania now represent 9.1 per cent of the total compared with 10.3 per cent in 1939. New Jersey’s proportion also declined somewhat while Delaware’s increased slightly. Not only did manufacturing employment as a whole increase much more rapidly in the United States than in Pennsylvania, but em ployment in all of the various types of indus tries save one rose faster nationally than in Pennsylvania. As a result, all but one indus trial group—stone, clay, and glass products— employed a smaller proportion of the country’s wage earners than in 1939. This is revealed by Table 4. Large relative declines in Pennsylvania’s po sition occurred in iron and steel and machinery, in textiles, and in clothing manufacturing. These are all industries in which Pennsylvania ranks fairly high. The decline of Pennsylvania’s po sition in durable goods manufacturing was rela tively greater than in nondurable goods. The fact that employment in practically all of the in dustrial groups grew less rapidly in the state than in the country as a whole suggests that the multitudinous requirements for war were met by greater expansion of plant, equipment, and employment of all kinds in areas outside of Pennsylvania. TABLE 4: PROPORTION OF PENNSYLVANIA WAGE EARNERS TO TOTAL UNITED STATES—1939-1943 1939 1943 Iron and steel and machinery.......................... Nonferrous metals........................................... Transportation equipment.............................. Lumber products..................................... Stone, clay, and glass.......................... Textiles....................................... Clothing................................................ Food products............................. Leather and leather products...................... Paper and printing..................................... 16.3% 7.6 5.0 3.2 15.3 12.6 11.4 7.2 8.0 8 5 14.4% 7.3 4.6 2.5 15 5 10.2 10.4 7.0 7.7 8.2 Total durable goods........................... Total nondurable goods............................... 11.2% 9.9 9.3% 8.6 Total manufacturing......................................... 10.5% 9.1% After the war Pennsylvania will no doubt re tain its present position as one of the leading industrial states, but a redistribution of its workers among the durable and nondurable in dustries may be expected. Employment in durable goods industries, such as aircraft and shipbuilding, is basically a war phenomenon. Post-war employment in durable and non durable industries may be expected to ap proach a close semblance to the pre-war pattern. Page Five Full-Fashioned Hosiery Industry Post-war employment in Philadelphia will de to women’s hosiery and the industry customarily pend in large part upon the ability of its many supplies 77 per cent of the total women’s wear industries to adjust to changing conditions. The market. Compared with seamless, full-fash full-fashioned hosiery industry has had much ioned is more dependent upon skilled labor, experience in adjusting to rapid change. Mete pays higher wages, requires more capital, and oric growth, lush profits, high wages, overde has undergone greater changes in technology. velopment, labor difficulties, changing tech nology, new raw materials, and migration all Growth of Full-Fashioned Industry occurred within the comparatively short span The full-fashioned industry has gone through of one generation. two distinct periods of growth: first, a decade The hosiery industry consists of two major of rapid development from 1919 to 1929, and branches, based on a fundamental difference in second, a period of readjustment from 1929 to manufacturing process. Seamless hosiery is 1939. During the first period, production of circular knit whereas full-fashioned hosiery is hosiery quadrupled, rising from 7.5 million to 31 million dozen pairs, as shown in Chart 1. knitted flat and subsequently seamed into tubular form. Full-fashioned is the larger of The basic reason for this rapid growth was the two branches. In 1939 the 500 establish changing styles in women’s clothing. As a ments in the United States employed 97,000 result of the introduction of the short skirt workers, paid out $100 million in wages, and about 1925, hosiery became a more important produced $277 million of merchandise. The part of feminine attire, and the full-fashioned seamless branch had somewhat fewer plants, industry was called upon to meet a tremendous employed only two-thirds as many workers, increase in demand. The unusual growth was paid less than one-half as much in wages, and due also in part to the popular acceptance of value of output was just half that of the full- sheerer construction and lighter colors. During this period there was a substantial shift in raw fashioned division. material from cotton, which accounted for al There are a number of other significant dif most half of the full-fashioned hose produced in ferences between these two branches of the in 1919, to silk, which accounted for almost 90 dustry. In the full-fashioned branch, silk was per cent in 1929. the principal raw material before the war; in As a result of the rapidly rising demand, 1940 the industry used about 80 per cent of all there was a tremendous inflow of new equip silk consumed in the United States. The mar ment during this period. The number of knitket for full-fashioned is confined almost entirely CHART PRODUCTION AND PRICES OF FULL-FASHIONED HOSIERY LLIO„, „ NUMBER IN PLACE UNITED STATESdoll; UNITED STATES PRODUCTION \ PRICES PHILADELPHIA 1919 '21 '23 '25 Page Six '27 '29 '31 '33 '35 '37 '39 ’41 ting machines in place increased from 2,400 in 1919 to 14,000 in 1929 (Chart 2). During this decade manufacturers made handsome profits and workers made high wages. Average full-time weekly wages of knitters rose from $33 in 1919 to $67 in 1928— in Philadelphia some knitters earned over $5,000 annually. The rapid expansion of the industry was further stimulated by the falling price trend of silk, its principal raw material. Wholesale prices of full-fashioned declined from $13 per dozen in 1919 to $9 a dozen in 1929. Following the rapid growth, the industry entered a decade of readjustment beginning with the business recession in 1929. Rising production was momentarily halted, as seen in Chart 1, and for the entire decade from 1929 to 1939, the volume of output increased at a slower rate, rising from 31 million to a peak of 44 million dozen pairs. The slower rate of expansion also is revealed by changes in the rate of consumption. Annual per capita con sumption which rose from 1.8 pairs in 1919 to 7.6 in 1929—a threefold increase—rose to 11.4 in 1939—an increase of 50 per cent in the latter decade. It has been estimated that the industry had been over-developed by approximately 30 per cent. From 1929 to 1934, widespread readjust ments had to be made. A number of the weaker firms went out of business. Wage rates were reduced by a national agreement with the union. In order to keep down unit costs, most firms continued to operate at full capacity with the result that the market was flooded and CHART HI PRODUCTION OF FULL-FASHIONED HOSIERY NORTH AND SOUTH PERCENT' SOUTH KNORTH 1934 1935 1936 1937 1935 1939 1940 1941 1942 prices declined. This was the period when wholesale prices declined from $9 to $5 per dozen pairs and full-fashioned hose was re tailed as a loss leader at 39 and 49 cents a pair. This was also the period when manufacturers sought to strengthen their position by moving into lower labor cost areas and North Carolina rose to challenge Pennsylvania—the historic center of the industry. Between 1929 and 1939 the South increased its proportion of the equip ment in the industry from 7 to 28 per cent and the number of its hosiery workers from 6,600 to 34,000. By 1939 the South produced 38 per cent of the national output as shown in Chart 3. During the same period the number of wage earners employed in the North remained almost stationary around 62,000 workers. Lower cost labor in the South was especially attractive be cause wages constitute an important element in the manufacturer’s cost structure. After the depression of the early thirties, the industry resumed expansion but with less vigor. Employment rose from 84,000 in 1935 to a peak of 97,000 in 1939. The growth during the lat ter part of this period was due to the invasion of the seamless market, the growing volume of low-priced lines, ranging from 59 to 89 cents at retail, introduction of sheerer weights, and de mand for a greater variety of colors to match feminine costumes. Economic characteristics of the industry Full-fashioned hosiery is a highly competitive industry. Capital investment is high—56 per cent of total assets are tied up in plant and machinery which is in contrast with 41 per cent in the automobile industry. The large pro portion of capital sunk in specialized equip ment puts pressure upon the manufacturer to secure its maximum utilization. Labor costs are high, largely because 65 per cent of the workers in the industry are in the skilled brack ets. Between 1929 and 1939, the ratio of direct labor to value added rose from 45 to 64 per cent, which was an important factor promoting the shift to low labor cost areas. An important element in the competitive situation is the difference in wage rates prevail ing in the different regions. In 1938 all fullfashioned workers averaged 58 cents in the South and 69 cents in the North. Competition is accentuated further by the existence of both union and non-union shops. The North is more completely unionized than the South. Page Seven CHART V CHART IV PRODUCTION OF WOMENS FULL-FASHIONED HOSIERY TH0U8 0F DOZ. PRS RAW MATERIALS USED 036 GAUGE OR LESS 1139 GAUGE H 43 GAUGE 45 GAUGE ■ 48 GAUGE □ 51 GAUGE ANDOVER COTTON 1336 1937 1938 1939 1940 1941 1942 Another element in the competitive situation is the flexibility of capacity. In order to attain low unit costs, manufacturers operate two and three shifts. Multiple-shift operation has been more prevalent in the southern branch of the industry. Competition in this industry has been intensi fied still further by rapid technological develop ments. The more progressive manufacturers have kept ahead of their competitors by con stant improvement of equipment. They have installed higher gauge, multiple-section, and high-speed machinery. The rapidity of tech nological change is illustrated in Chart 4. In 1920, over 75 per cent of the new equipment flowing into the industry was 39 gauge or lower; in 1942, 99 per cent of the new equip ment was 51 gauge or higher. However, the old equipment, unless it is scrapped, plagues the industry by contributing to excessive output of “low end goods” produced by the manufac turers who buy the second-hand machinery at bargain prices. 1941 1942 1943 pendent dyer and finisher can usually perform these operations at lower cost than the inte grated manufacturer. The small manufacturer is benefited by the services of the commercial dyer and finisher. Wartime Developments in the Industry Since the beginning of the national defense program, the full-fashioned industry has had its full quota of wartime adjustments. One of the first major problems arose in August 1941 when silk was frozen. This stimulated the produc tion of nylon hose which was already being pro duced as rapidly as the new synthetic yarn was available, but in February 1942 nylon went to war also. This left only rayon and cotton, both inferior raw materials for full-fashioned pro duction. The extent of the shift in raw ma terials is indicated in Chart 5. In 1943 rayon accounted for 93 per cent of the entire ouput. Cotton did not play a prominent part owing to the inadequacy of high-count spinning equip ment in this country and the inability to get ade There is also competition between the manu quate supplies from England. Another diffi facturers of branded and unbranded hosiery. culty which the manufacturers have had to face The former market the products under their during the war period has been the impossi own name and the latter produce hosiery for bility of obtaining new equipment. The knit mass distribution by chain stores and other ting machinery manufacturers turned to war large distributors who sell at low price levels production and as a result the hosiery industry under their own rather than the manufacturer’s has received no new equipment for the past two years. Furthermore, the installed equip name. ment in the industry has undergone especially Another development of recent years which hard usage owing to multiple shifts and also has complicated the competitive situation is the to the fact that it is being operated by inexpe rise of commercial finishing. By full-time utili rienced hands since many of the skilled knitters zation of his specialized equipment, the inde have been drawn into the armed forces. Page Eight CHART VI r DISTRIBUTION OF FULL-FASHIONED MACHINERY PER CENT JUNE I. 1942 100 90 TYPE OF GAUGE USED IN EACH TERRITORY . 80 70 51 GAUGE AND OVER 60 48 GAUGE 45 GAUGE 50 40 II I I 42 GAUGE 39 GAUGE 30 20 10 0 PHILA. PENNA. SOUTH U.S. Full-Fashioned Hosiery Industry in Philadelphia In 1939 the full-fashioned industry of Phila delphia represented about 10 per cent of the national totals in terms of employment, equip ment, and output. This area has found the competitive going particularly difficult because, as shown in Chart 6, it operates much anti quated machinery. In June 1942, about 22 per cent of the equipment in Philadelphia was 39 gauge which is in contrast with 4 per cent of this low gauge equipment in the South and 10 per cent for the entire industry. Similarly, only 38 per cent of Philadelphia’s equipment was 45 gauge and higher whereas the South had 53 per cent of its equipment in such ma chinery and the industry as a whole had 50 per cent. The obsolescence of equipment in this area would have been somewhat greater but for a three-year rehabilitation program which was begun in 1938. At that time the union entered into a contract with the manufacturers in which they agreed to abandon the uniform piece-rate system which had been in effect since 1929 and to negotiate percentage wage reductions with each individual manufacturer depending upon his financial status and his willingness to utilize the savings obtained from wage reductions to install new machinery. As a result of this agreement, Pennsylvania manu facturers in 1941 for the first time in many years took more new Reading machines than the South. The full-fashioned industry of Philadelphia employed about 9,800 workers in 1939. Accord ing to estimates received by the Research Com mittee of the Committee for Economic Develop ment of Philadelphia, about 6,600 workers were employed in June of 1943. It is estimated that in the first post-war year employment will rise to about 7,500 which would be almost 25 per cent below the pre-war level. According to the survey, less than 10 per cent of the output in June 1943 was for war and three-fourths of the firms anticipated no reconversion problems. Post-War Problems The immediate reconversion problems which this industry will have to face have to do with raw materials, equipment, capital, and labor. The industry is expecting the unleashing of a tremendous backlog of demand on the part of its 40 million customers whom they have been unable to satisfy both as to quantity and quality of product during the war period. Perhaps the most pressing problem will be that of raw materials. Knitting yarns and especially yarn for fullfashioned hosiery must be of the highest qual ity and no doubt there will be a scramble for yarn as soon as the Government releases its priorities. Just before the war, nylon ac counted for 20 per cent of all full-fashioned hosiery yarn and after the war, demand for nylon hose can be satisfied only to the extent that adequate supplies of the synthetic yarn become available. As soon as the war ends, the duPont Company can supply 18 million pounds of balanced leg and welt yarn and the company is planning to expand nylon capacity to 23 million pounds which would be enough to make 37>4 million dozen pairs of hosiery, but it will take from a year to 18 months before production of nylon can be stepped up to that level. Another factor which may delay immediate post-war resumption of nylon hosiery produc tion even if millions of pounds of nylon are available, is the limitation of facilities at several stages in the manufacturing process. Assum ing a huge demand for knitting yarns, throwing facilities will be taxed to the limit and may be one of the first bottlenecks. It will take some time also to produce enough sizing machinery for conditioning nylon and preboarding equip ment to shape the hosiery. The industry will have done well if it steps up nylon hosiery to 40 per cent of total hosiery output within two years after the war. In the meantime, rayon hosiery of coarser construction will doubtless supply the largest part of our needs. There is also the possibility that rayon may retain a strong hold on this mar ket after the war because the new high tenacity rayon, used exclusively for tire cord and other military needs during the war, will be a much better hosiery raw material than pre-war rayon yarns. Silk is not expected to stage a strong comeback because synthetic yarns are much improved in quality and they have a distinctly superior advantage of greater price stability in contrast with raw silk. Another difficulty with which the manufac turers are confronted is that of equipment. For some time the industry will not be able to ob tain all of the knitting machinery that it will need. The Textile Machine Works, which manufactures most of the knitting equipment, expects to get into production within three to six months after termination of its Govern ment contracts, but it will require approxi mately a year before the company can attain full capacity output. The inability to obtain new equipment to replace the hard-worn ma chinery may fall more heavily on the Phila delphia area since a larger proportion of its equipment is obsolete. The flow of new equip ment into the industry will depend also in part upon the financial status of the individual manu facturer. A modern 51-gauge, 30-section ma chine equipped with automatic welt turning, costs $20 thousand, and the installation of such new equipment will require substantial capital resources. lished hosiery center, Philadelphia has the ad vantage of an adequate supply of skilled labor and its knitters do not require as much super vision as those in the South. But in the absence of legal restrictions, the South will no doubt take advantage of the increased post-war labor supply by extending the practice of two and three-shift plant operation. Another factor in the long-run employment situation is the introduction of new high-speed machinery which reduces labor requirements. Just before the war, according to a survey of the industry, approximately 20 per cent of the manufacturers had introduced single-unit con version. With an investment of only $200 per machine, a backrack attachment to the legger permits the complete knitting of the stocking on that machine, doing away with the use of the footer. For every three legging machines so converted, the services of one footer, three toppers, and some loopers are eliminated. After the equipment becomes available, further con version of this type may be expected despite the fact that this process produces a rounded in stead of the conventional French or pocket type of heel. Manufacturers who have the financial re sources will install new 51-gauge machines as fast as they can be obtained, but this likewise promises no expanding opportunities for em ployment. Although the high gauge machines make smaller loops, thus requiring more courses to knit a stocking, productivity is not reduced because these modern machines operate at higher speed. The long-run outlook for employment is un certain because of numerous technological changes that are constantly taking place. The use of nylon, which wears approximately twice as long as silk, may reduce considerably the over-all demand for hosiery. On the other hand, nylon lends itself to extremely sheer construction—as fine as 10 denier—and these do not wear as long as 40’s or 50's. Further more, lace welt hose and other style innova tions may be expected. Such developments may very well bring about a demand greater than ever before. Philadelphia may expect increasing competi tion in the period of reconversion and after wards. The shift to the South may have run its course, but that area which now has 38 per cent of the equipment is a greater threat than this figure indicates. Its equipment is more modern, it is operated more hours, and the employees are lower paid. However, wage rates are not the same as labor costs. Philadel phia manufacturers have the advantage of skilled labor and proximity to large markets, and if equipment is modernized, manufacturing costs can be reduced to strengthen the competi tive position of this area. Considerable time will be required to restaff hosiery plants with high-grade personnel. The high degree of skill required to operate the delicate machinery in this industry cannot be acquired overnight. However, as a long-estab A possible post-war development which may alter conditions considerably is bare-leg hose. This stocking, of seamless construction, made with nylon yarn on the comparatively new 400- Page Ten needle circular head machine, is a potential threat to the full-fashioned industry. If this new seamless hosiery were to attain greater consumer acceptance than the full-fashioned, as it may in the younger age brackets, the entire complexion of the post-war hosiery industry —seamless and full-fashioned—may undergo vast changes. Business and Banking Continued from page 1 The weekly income of wage earners at re year ago. Manpower shortages still are acute in porting plants in Pennsylvania rose to a new certain war industries and in some sections, in high average of $48.17 in August, following cluding the Philadelphia industrial area. The small decreases in the two preceding months. local scarcity of labor is emphasized by a recent Earnings on this basis have increased 7 per directive from the War Manpower Commission cent over the twelve months, and about 80 per freezing in their jobs an estimated 500,000 men cent since the beginning of defense and war and women employees of war plants. The order production more than four years ago. Hourly as applied to women is without precedent; it earnings remained at the July average of a reflects an unusually high rate of turnover in little over $1.06. The average number of hours recent months, and at the same time suggests the worked per employee increased from 44in urgent nature of the war work performed in July to 45J4, the peak level prevailing in earlier this community. . months this year. Industry and trade. Industrial production in the Philadelphia Federal Reserve District decreased 2 per cent on an adjusted basis from July to August, and was 4 per cent below the level of a year earlier. The decline in the month and year reflected largely curtailed op erations in heavy industry lines incident to continuing adjustments in the war production program. Productive activity in the eight months ended August was little less than in the same period last year; total output of factory products was largely maintained, and the ton nage of coal mined showed an increase, but the production of crude petroleum was down about one-tenth from 1943. Employment, payrolls, and total working time in Pennsylvania factories, while continu ing to fluctuate rather narrowly from month to month, nevertheless have shown a gradual downward tendency over the past half year or more. The number of wage earners was vir tually unchanged from July to August, and the volume of wage disbursements and aggregate employee hours worked increased very little. During peacetime, when seasonal influences are much more operative than at present, em ployment expands about 3 per cent and payrolls rise about 7 per cent in this period. Compari sons with a year ago indicate that small de clines persisted in the case of employment and hours, while wage payments were up about 2 per cent. The supply outlook for solid fuels used by industry and for heating remains tight. Dimin ishing reserves of Appalachian coals suitable for making coke and by-products have necessi tated the diversion of substantial tonnages from power-generating purposes for which they had WAR CONTRACT TERMINATION LOANS Congress recently passed the Contract Settlement Act to provide prompt and ade quate financing to war production contrac tors, pending final settlement of their claims. It authorizes termination loans, commonly known as T loans, to enable con tractors to release working capital tied up temporarily in terminated contracts. These loans are to be made available primarily through commercial banks. Guarantees will be executed by the Federal Reserve Banks as fiscal agents of the United States, acting in behalf of the War Department, the Navy Department, and the United States Maritime Commission. All banks in this district have been supplied with printed forms and detailed information. T loans may be guaranteed after a war production contract has been terminated, or commitments for such loans may be guaranteed in advance of cancellation. Page Eleven INDUSTRIAL AND TRADE ACTIVITY THIRD FEDERAL RESERVE DISTRICT PERCENT PRODUCTION August brought the dollar volume installed dur ing the first eight months to little more than $2}4 billion, as against nearly $5.8 billion in the same period of 1943. Estimates of the full year’s construction total indicate a decline of over 50 per cent from 1943 and about 75 per cent from the wartime peak of two years ago. Emphasis has continued to shift to privately financed construction, with dollar volume in this category rising from 22 per cent of the total in August of last year to 39 per cent in .the latest month. DEPARTMENT STORE SALES In this district, the value of new contracts awarded declined sharply in August to about $7 million, according to the F. W. Dodge Cor 193 9 1940 1941 1942 1943 1944 poration. Declines in the month of consider ably more than one-third were reported for all types of construction except small houses and been widely used over much of the war period. commercial structures. Total awards were Stocks at steel mills in particular reached low down about one-fourth from a year ago, and in levels toward the close of the summer, when the eight months ended August they showed they were estimated at only a few days’ supply, a decline of 35 per cent. Public works and as against a normal working level consistent utilities and educational buildings were the with wartime demand of about a full month. major categories in which the value of contract Over the remainder of this year substantial awards has been larger thus far this year than tonnages of these premium fuels will be allo last. The sharpest declines from 1943 have cated to producers of coke and crude steel; occurred in placements for multiple-family other industrial consumers will be required to use more “strip mined” and the lower grades houses and commercial buildings. of “deep mined” bituminous coal to meet over Growing conditions for late crops and pas all needs. tures in this district improved considerably Sporadic labor disturbances in the anthracite after heavy rains in mid-September relieved a field and in some bituminous mines of western summer-long drought which had reduced Pennsylvania and several nearby states have yields of early vegetables and orchard fruits brought Federal control of affected properties and necessitated heavy supplemental feeding for the .third time in little more than a year. of grazing livestock. Fall plowing, previously The production of bituminous coal in the coun delayed by insufficient soil moisture, is pro try as a whole increased about 10 per cent in ceeding rapidly, although operations remain August, and was above the level of a year substantially behind schedule in most sections. earlier. In the Pennsylvania coal fields, total The supply of farm labor continues tight, in output of bituminous and anthracite was little spite of the increased employment of family larger than in July and in both instances the ton workers, personnel recruited from nearby Brit nage mined was less than in August 1943. The ish possessions, and war prisoners. production of anthracite in the first eight months was only 3 million tons greater this year than The persistence of unfavorable weather over last; requirements for the current season are much of the principal growing season was re estimated at about 5 million tons more than in flected in successive downward revisions in the 1943. estimated yield of most leading field crops in this district. The production of all but hay and Construction activity throughout the country white potatoes, however, is expected to be some increased slightly further during August but what larger than in 1943, because of increases a sharp reversal of this trend is anticipated in the acreage planted this year. On the basis over the remainder of this year. The War Pro of September 1 conditions, the Department of duction Board reported that operations in Agriculture anticipates that the harvest of Page Twelve wheat and tobacco will be well above the aver age for the preceding five years, while yields of corn, oats, hay, and white potatoes will be smaller. A near-record crop of orchard fruits forecast about mid-summer may not material ize, owing to unexpectedly light yields of early varieties of apples and peaches. Prices of farm products nationally and locally averaged about the same in the first seven months of this year as last, but farm cash income generally was larger than in the 1943 period, owing to increased sales of crops, livestock, and livestock products. In Penn sylvania, New Jersey, and Delaware receipts from the sale of farm products totaling more than $450 million in the seven months ended July were about 6 per cent greater than in 1943, and the largest for the period in many years, according to Department of Agriculture estimates. Primary distribution by rail in August re mained at about the same high level of other recent months. Freight carloadings in this sec tion on an adjusted basis showed gains in the movement of less than carlot merchandise, coal, and grain, which were approximately offset by declines in other commodity classifications. Total loadings in the first eight months were 6 per cent greater than in the same period of 1943, with the sharpest increases reported in the case of livestock, grain products, and solid fuels. Wholesale trade sales increased somewhat from July to August, reflecting chiefly substan tial gains in the case of shoes, hardware, jew elry, and paper. Dollar volume in the aggre gate was slightly less than in August 1943, but 3 per cent greater in the first eight months this year than last. Inventories did not change sig nificantly in the month, as increases in stocks of electrical supplies and groceries were largely offset by smaller holdings of dry goods, paper, and hardware. Stocks were larger than a year ago in all reporting lines except paper. Retail sales in this district did not measure up to seasonal expectations in August. At depart ment and women’s apparel stores, dollar vol ume increased by a much smaller percentage than usual; sales by men’s apparel stores, which ordinarily show a pronounced gain, re mained at about the level of the preceding month; a sharp decline in sales reported by shoe stores reflected in part the release of a considerable quantity of ration-free footwear during July. Increases over a year ago were substantial, ranging from 11 per cent at depart ment stores to 24 per cent at establishments specializing in men’s apparel. Sales by furni ture stores rose 8 per cent in August, normally one of the largest months in point of retail volume, but they were somewhat smaller than a year earlier. Inventories at retail establishments showed mixed changes from July to August and as compared with a year ago. At department stores stocks on an adjusted basis increased 9 per cent in the month to a little above the 1943 level; small declines were reported in August at women’s apparel and shoe stores, with holdings in both lines less than a year ago. Inventories at furniture stores were somewhat larger than in July and showed an increase over August 1943, in spite of the fact that material and labor shortages have made it difficult to maintain a steady flow of merchandise. REDEMPTION OF UNITED STATES SAVINGS BONDS BY BANKING INSTITUTIONS The Secretary of the Treasury has au thorized incorporated banks and trust com panies which qualify to redeem United States Savings bonds of Series A, B, C, D, and E, beginning October 2, 1944. Re demptions are to be made by qualified in stitutions, but only for individual owners or co-owners upon satisfactory identifica tion, provided that the name has not been changed in any manner other than by mar riage. In the case of Series E bonds, a period of two months from issue date must have elapsed. It is to be hoped that no holder of savings bonds will present his securities for redemption except in cases of absolute necessity. The new plan provides for immediate payment, so that it will be unnecessary to cash bonds well in advance of anticipated financial needs, some of which may never materialize or which may require a smaller amount of cash than had been expected. As investments, these bonds become increasingly valuable the longer they are held. Page Thirteen Banking conditions. Demand for bank credit to finance war production has been limited by advance and partial payments received on war contracts, the use of accumulated earnings, and deferment of tax payments to the year follow ing that in which they accrue. Accordingly, while many of the business loans of member banks in this district were made to finance war operations, total commercial, industrial and agricultural loans on June 30 were only l1/^ per cent of outstanding credit and some mil lions of dollars less than they were shortly be fore the opening of war in Europe. The volume of such loans may expand in the transition to peace. DEPOSITS AT MEMBER BANKS THIRD FEDERAL RESERVE DISTRICT MILLIONS 2400 PHILADELPHIA BANKS 2000 1600 ■COUNTRY BANKS 1200 1944 1943 1942 1940 939 Sufficient liquid working capital to meet the requirements of reconversion will not be universal; concerns with funds tied up tem trict increased $37 million to $678 million in porarily in war receivables and inventories will the four weeks. Net payments to the Treasury have to be helped through bank credit, includ came to about $25 million, chiefly a result of ing T loans guaranteed through the Reserve heavy taxes in the final week, and a like amount Banks. Many banks, particularly in money of reserves was taken up in meeting the per centers, will be in fully invested positions, with sistent demand for currency. Sharp gains in reserves little above requirements, but their interdistrict commercial transactions, however, large portfolios of Governments assure their more than compensated for these operations. ability to increase reserves where necessary to There was little net change in Reserve Bank meet the legitimate credit needs of their com credit extended locally; the volume of Treasury munities. At the mid-year, 72 per cent of the bills held under repurchase option reached the earning assets of member banks in this district highest point of 1944 in the course of the period, were Government securities. but on September 20 was some millions of dol lars lower than on August 23. Recent developments at reporting banks in leading cities of the district have been typical Total deposits of the country member banks of periods between loan drives. The moderate in this district and those of members in Phila amount of credit extended to purchase or carry delphia were approximately equal at the out Government securities has been largely repaid. break of war in Europe. For a time country Over the four weeks ended September 20 ad bank deposits tended to lag in the general ex justed demand and time deposits—largely bal pansion that was taking place, but this lag gave ances of individuals, partnerships and corpora way to rapid growth over the past two years. tions—increased $82 million; but total deposits In the last half of August their deposits aver were carried down moderately by withdrawals aged $2^4 billion, as against $2y2 billion at the from war loan accounts. Sales of Governments city banks. If customers’ deposits alone are were more than sufficient to meet this decrease considered, country banks stand out even more; in deposits, resulting in somewhat larger re excluding war loan and interbank accounts, serves with the Federal Reserve Bank. their deposits in August were close to $2.5 bil lion, as compared to only $1.7 billion at banks in Philadelphia. The reserves of all member banks in the dis —9-^® t Page Fourteen ■ BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Not adjusted Adjusted for seasonal variation Per cent ch ange 1944 Aug. 1944 from Aug. July Aug. frc>m 8 1944 1944 1943 Mo. Year mos. 1943 ago ago Indexes: 1923-5=100 INDUSTRIAL PRODUCTION 144p 147 150r - 2 MANUFACTURING................ 148p 152 154r - 3 Durable goods........................ 225p 237 243r - 5 92 r - 1 Consumers’ goods................ 94p 94 Metal products..................... . 173* 186 r 173 r - 7 Textile products..................... 74 + 2 71p 70 Transportation equipment., 584 597 673 r - 2 115r - 3 Food products........................ mp 128 Tobacco and products.......... 90 80 89 +12 Building materials................. 34p 34 37 - 1 Chemicals and products... 165 - 4 163p 170 Leather and products........... 96p 105 101 - 8 Pape« and printing.............. 96 +1 98 98 Individual lines 107 r 124 + 6 Pig iron..................................... 113 151r 139 -10 Steel........................................... 135 Silk manufactures................ 81 88 + 9 88 Woolen and worsteds.......... 57p 62 59 - 7 Cotton products................... 54 58 - 9 49 51 + 4 Carpets and rugs.................. 59p 56 Hosiery.................................... 80 81r 90 - 1 Underwear............................. 150 164 166 - 8 Cement..................................... 27p 28 38 - 4 Brick........................................ 50 58 - 3 48 Lumber and products......... 30 30 26 + 2 Bread and bakery products - 1* Slaughtering, meat packing 123 138r 120 -11 Sugar refining....................... 113 121r 98 - 7 Canning and preserving. .. 161p 166 149 r - 3 Cigars........................................ 88 +13 89 79 Paper and wood pulp......... 85 85r 86 0 Printing and publishing. . . 100 98 + 1 101 Shoes......................................... 118 118 117 - 1 Leather, goat and kid......... 76p 91 86 -17 Paints and varnishes........... 105 95 - 8 97 Coke, by-product................. I71p 172 167 r 0 COAL MINING...................... 80 78r 84 + 2 Anthracite.............................. 77 74r 81 + 4 Bituminous............................ 106 114r 112r - 7 CRUDE OIL............................ 382 340 404 + 12 ELEC. POWER—OUTPUT. 442 434 424 + 2 Sales, Total............................ 442 444 444 0 Sales to industries................ 320 356 339 -10 BUILDING CONTRACTS TOTAL AWARDSf............... 49 57 50 -14 Residential!........................... 8 9 38 -12 Nonresidentialf.................... 87 91 65 - 4 Public works and utilities!. 99 120 42 -18 — _ + — — + + — — — + _ — — — + — — — — + + + + + + — + — + + — — — — + — — 4 4 8 3 0 4 13 8 1 9 1 5 2 — 9 3 0 2 16 14 10 10 29 16 16 11* 3 14 8 1 1 3 0 12 3 3 5 5 5 6 4 1 6 _ + _ + + — + — — + — + 1 79 34 +133 _ _ + * Unadjusted for seasonal variation. ! 3-month moving daily average centered at 3rd month. + — + — — — — + + + + + — + — — + + + + + — + + + _ _ _ Industry, Trade and Service Aug. July Aug. 1944 1944 1943 Indexes: 1932-100 1 144p 142 147p 146 151 r 154r 182 67p 573 116p 96 38p I64p 99p 96 181 r 64 580 119 86 37 167 95 95 182 r 70 660r 117r 95 42 165 104 94 3 1 1 0 19 2 11 9 43 19 13 10* 24 37 17 16 0 4 5 4 5 6 8 7 9 11 6 7 8 99 138 86 58p 44 56p 70 140 33p 50 33 126 105 97 I39p 95 85 98 126 73p 99 168p 80 77 100 382 420 420 330 98 r 137r 79 59 47 54 66 136 33 48 33 125 121r I23r 132 85 82 97 110 80 98 168 77r 74r 101 340 404 417 363 109 142 86 60 53 49 78 155 47 60 29 114 102 85 I67r 94 86 95 126 83 97 163r 84 81 105 404 403 422 349 r 53 64 44 45 48 9 80 86 52 10 83 107 48 42 60 37 1 4 3 4 4 7 14 17 19 5 5 3 Fac1x)ry emplo yment Fac Lory pay 'oils Buil ding perrnits va ue De bits Aug. 1943 July 1944 Aug. 1943 July 1944 Aug. 1943 July 1944 Aug. 1943 July 1944 Aug. 1943 Allentown........... Altoona............... Harrisburg.......... Johnstown.......... Lancaster............ Philadelphia___ Reading............... Scranton............. 0 0 0 0 - 2 - 1 0 + 2 - 6 - 2 +1 - 5 - 3 - 6 - 6 +18 0 + 7 0 - 4 - 2 + i + 6 +14 - 1 + 5 + 5 - 1 + 3 + 1 - 1 +43 - 7 + 9 - 93 + 41 - 48 - 32 - 46 +129 + 3 +10 + 2 - 1 - 2 0 0 -12 -11 - 6 +11 + 1 - 4 + i + 5 -10 - 9 - 2 + 41 - 56 +167 - 9 +14 + 3 + 3 + 2 +10 +12 + 3 +n +29 +11 +35 + 3 + 5 + 8 +26 +22 +23 + + + Wilkes-Barre.... - 80 +223 - 66 - 6 - 16 - 63 + 63 - 97 — 70 +113 - 15 + 78 + 31 + 6 0 +24 + 13 +1 +31 - 8 +16 +30 0 +20 + 6 + 2 +17 -12 +14 +13 0 0 0 - 1 + 2 - 2 +1 0 - 2 0 - 1 - 3 - 3 - 4 - 4 - 9 - 8 - 3 -17 - 2 - 3 + 1 - 3 + 3 0 - 1 333 498 92 359 131 264 248 148 148 148 170 172 153 + 2 + 2 +12 + 9 + 2 + 2 +1 - 1 - 3 - 1 - 1 - 5 - 9 + 2 + 2 - 1 0 + 2 -22 +14 + 5 + 2 0 +12 +12 + 3 Manufacturing Employment* Payrolls* Per cent Per cent Aug. change from Aug. change from 1944 1944 index July Aug. index July Aug. 1944 1943 1944 1943 Indexes: 1923-5=100 TOTAL..................................... 118 Iron, steel and products.. . . 128 Nonferrous metal products. 205 Transportation equipment. 161 Textiles and clothing........... 79 Textiles................................. 72 Clothing............................... 105 Food products....................... 127 Stone, clay and glass............ 84 Lumber products.................. 52 Chemicals and products.. . . 117 Leather and products......... 73 Paper and printing.............. 101 Printing................................ 94 Others: Cigars and tobacco............. 52 Rubber tires, goods........... 147 Musical instruments......... 85 + + - 0 0 i 0 0 0 0 2 1 0 0 1 0 0 0 0 - 1 + + + + 4 3 4 9 6 6 8 6 6 1 6 9 1 2 203 280 430 298 120 112 159 193 128 87 212 117 149 131 + + + + + + + 2 1 2 4 4 5 2 0 4 3 1 0 2 1 + 2 + 2 + 7 0 0 + I - 1 +13 + 1 +10 + 1 + 2 + 3 + 4 -15 + 7 + 1 74 308 171 0 + 2 +22 - 8 +20 +17 + + + + + * Figures from 2837 plants. Factory workers Averages August 1944 and per cent change from year ago Re tail sal es * Area not restricted to the corporate limits of cities given here. 131 183 46 76 50 85 135 98 105 104 102 103 97 Hours and Wages July 1944 Wilmington........ York..................... Payrolls Per cent Per cent Aug. change from Aug. change from 1944 index July Aug. index July Aug. 1944 1943 1944 1943 GENERAL INDEX............ Manufacturing...................... Anthracite mining............... Bituminous coal raining. . . Building and construction.. Quar. and nonmet. mining.. Crude petroleum prod......... Public utilities...................... Retail trade........................... Wholesale trade.................... Hotels...................................... Laundries............................... Dyeing and cleaning........... p—Pieliminary. r—Revised. Local Business Conditions* Percentage change— August 1944 from month and year ago Employment 7 6 6 2 8 5 4 0 — 1 - 2 - 7 -14 - 8 TOTAL............................ Iron, steel and prods.. . Nonfer. metal prods.. . Transportation equip.. Textiles and clothing. . Textiles........................ Clothing....................... Food products.............. Stone, clay and glass... Lumber products......... Chemicals and prods... Leather and prods........ Paper and printing... . Printing........................ Others: Cigars and tobacco... Rubber tires, goods. . Musical instruments. Weekly working time* Hourly earnings* Weekly earnings! Aver age Ch’ge Aver Ch’ge Aver hours age age Ch’ge 45.5 46.8 45.3 47.9 39.9 41.0 37.1 43.8 41.4 44.6 46.1 42.0 43.8 41.0 +1 $1.065 + 6 $48.17 +1 1 125 + 4 52.68 0 .978 44.34 +1 1.262 + 10 60 38 .766 + 7 30.45 +1 +1 .787 + 6 32.26 - i .712 + 8 26 64 .799 + 3 35 31 + 3 + 3 .913 37.68 0 .773 + 6 34 20 + 4 1.061 + 3 48.87 + 4 .758 + 7 31.98 + 1 .905 + 4 39.84 + 1 1.047 + 2 42.91 + 7 + 5 + 4 +n + 8 + 7 + 9 + 6 + 7 + 6 + 7 +12 + 5 + 3 41.4 45.0 51.5 0 + 3 + 5 .624 1.036 + 10 1.014 +10 + 8 +13 + 15 * Figures from 2689 plants. 25.84 46.62 52.21 ! Figures from 2837 plants. Page Fifteen Distribution arid Prices Wholesale trade Unadjusted for seasonal variation Per cent change Augus 1944 1944 fro m from 8 Month Year mos. 1943 ago ago Sales Total of all lines..................... + 4 +44 + 2 Drugs....................................... Dry goods............................... Electrical supplies............... Groceries................................. Hardware............................... Jewelry.................................... Paper....................................... 4 + - 2 - 4 +12 +18 +13 Per cent chtinge Indexes: 1935-1939 = 100 - 2 - 2 6 - 1944 from *E 8 Month Year Lm9sago ago 4tf RETAIL TRADE + 7 + 5 + 1 +11 + 7 + 9 +23 + 8 + 4 -14 0 — 9 +1 + 5 - 1 - 2 Philadelphia............... Inventories Source: U. S. Department of Commerce. Per ceiit chang efrom Aug. 1944 Month Year Aug. 1939 ago ago Basic commodities (Aug. 1939=100)... . 182 Wholesale (1926-100)................ 104 123 105 Other............................ 99 Living costs (1935-1939=100).... 126 126 136 139 107 109 Housefurnishings.. . 138 Other.......................... 120 + 3 + 82 0 - 1 - 1 0 + + + 39 +101 + 56 + 23 0 0 + 1 0 0 0 0 0 + + + + 0 1 1 1 2 2 2 1 7 0 + 3 +n + 4 + + + + + + + + 28 28 46 41 4 13 37 19 l44r l38r 143 r 108 120 - 8 -13 -17 - 9 -21 +n + 3 +11 +24 + 7 • 161 177 156 209a 219 87 84 172 175 218r 98 + 9 +14 - 5 - 3 + 5* + 2 + 2 - 4 -14 + 6* +J8 + 6 +10 . + 2. - 3^ 125p 107 126p 97 106 •O +20 105 108 97 126 112 10$ 79 98 160 139 158 134 203p 165 75 83 156 156 211r 97 • FREIGHT-CAR LOADINGS Merchandise and miscellaneous................... Livestock............................................................ MISCELLANEOUS Life insurance sales......................................... Business liquidations 149 133 90 176 195 214 103 137 137 150 148 138 134 87 88 166 169 215 201 233 216 120 108 122 128 171 £135 118 122 176 Check payments............................................... * Computed from unadjusted data. Source: U. S. Bureau of Labor Statistics. 174 165 192 146 163 l60p 143 l60p 133 129 Shoe...................................................................... Inventories Aug. July Aug. 1944 1944 1943 'S Aug. July Aug. Augus 1944 frc m 1944 1944 1943 + 3 - 1 +32 - 2 -12 +20 - 3 0 -12 -13 Not adjusted Adjusted for seasonal variation 187 p—Preliminary. - 1 - 3 + 4 + 6 - 9 - 8 -14 +12 -20 2 4 3 1 5 7 2 + 6 + 3 + 4 +15 + 6 +10 + 6 +13 +21 151 137 90 160 290 199 125 133 132 0 - 1 + + — + + 153 138 87 158 322 214 134 164 147£ 138 88 154 299 201 131 124 130 116 - 3 + 2 +15 99 T16 97 178r -37* -67* - 6 -54* -80* - 1 7 -69* 3 -86* + 9 157 12 10 178 16 17 158 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Changes in— Reporting member banks (Millions $) Sept. 20, 1944 Assets Commercial loans.................. $ 242 35 Loans to brokers, etc............ Other loans to carry secur... 13 37 3 Loans to banks....................... 103 Four weeks +$ 4 - 1 - 1 + i One year -$ — + - i 4 2 7 2 2 Total loans............................ $ 433 +$ 3 -$ 14 Government securities.......... *1671 Obligations fully guar’teed.. 62 157 Other securities...................... — $41 + 7 — 5 +$163 - 10 — 32 Total investments............... $1890 —$39 +$121 Total loans & investments. $2323 Reserve with F. R. bank. . . 398 27 Cash in vault.......................... Balances with other banks.. 73 51 Other assets—net................... —$36 + 22 - 1 - 5 - 6 +$107 - 15 1 - 12 - 10 +$80 + 2 -120 + 12 — 2 + i + i +$139 + 24 - 99 8 Liabilities Demand deposits, adjusted.. $1677 186 Time deposits.......................... U. S. Government deposits. . 398 362 Interbank deposits................. Other liabilities....................... Capital account...................... Page Sixteen 17 232 + + 4 9 Changes in weeks ended— Aug. 30 Sept. 6 Sept. 13 Sept. 20 Third Federal Reserve District (Millions of dollars) Sources of funds: t Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict)....................... Treasury operations.................................................................. Changes in four weeks +16.8 + 0.5 + 0.2 - 9.1 +21.1 - 2.7 + 7.8 +15.0 + 3.1 -17.9 +53.0 -25.8 - 2.4 +89.6 -25.2 + 17.5 + 9.3 +25.9 + 9.3 +62.0 Member bank reserve deposits.............................................. “Other deposits” at Reserve Bank....................................... Other Federal Reserve accounts............................................ + 5.7 +12.7 - 1.0 + 0.1 +10.1 - 0.7 - 0.3 + 0.2 + 5.8 +19.5 + 0.6 - 0.0 + + + 4.1 5.3 0.2 0.1 +25.7 +36.8 - 0.9 + 0.4 Total............................................................................................ +17.5 + 9.3 +25.9 + 9.3 +62.0 Uses of funds: Member bank reserves (Daily averages; dollar figures in millions) Held Re quired Ex cess Ratio of excess to re quired 6% 2 2 2 Phila. banks 1943: Sept. 1-15. . 1944: Aug. 1-15.. Aug. 16-31. . Sept. 1-15. . $411 357 361 372 $388 349 353 364 $23 8 8 8 Country banks 1943: Sept. 1-15. . 1944: Aug. 1-15 .. Aug. 16-31. . Sept. 1-15.. 280 284 287 296 208 226 231 238 72 58 56 58 35 26 24 24 Federul Reserve Bank of Phila. (Dollar figures in millions) Changes in Sept. 20, 1944 Four weeks Discounts and 2.2 advances............... $ Industrial loans. ... 4.1 U. S. securities......... 1129.2 -$ 3.0 - 0.1 + 7.8 +$ 1.6 0.4 + 499.8 Total......................... $1135.5 Note circulation... . 1324.0 Member bk. deposits 678.1 34.6 U. S.general account 126.8 Foreign deposits... . 5.9 Other deposits......... 1041.3 48.0% Reserve ratio............ +$ 4.7 + 28.7 + 36.8 - 0.4 + 0.7 - 0.9 + 57.7 + 1-3% +$501.0 + 272.7 + 4.2 + 9.8 + 21.3 1.9 - 191.8 - 18.2% One year
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