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THE BUSINESS REVIEW FEDERAL RESERVE BANK .'“/l SEPTEMBER 1, 1941 .» 5 .. .,M,iiwwwy Trade and industrial activity in the Third Fed eral Reserve District continue well sustained, al though there is ordinarily some lull during this season. The volume of new orders for manufac tured goods is heavy, and it is becoming increas ingly difficult to meet delivery schedules. Further immediate expansion in productive activity is lim ited by the fact that many basic lines of industry are operating near capacity, and growing scarcities of supplies of raw materials are in evidence. Building activity has advanced further to the highest level since 1930. The volume of contracts awarded for industrial buildings is substantially above a year ago and residential construction, par ticularly in defense production areas, is being un dertaken on a large scale. Employment expanded again in July, especially in the manufacturing and construction industries. Wage payments continued large in spite of some The movement of freight is the heaviest for this seasonal reduction at factories, mines, and stores. season in over a decade. Buying by both retailers Increases in the number of workers and payrolls in and consumers is exceptionally active. Prices con manufacturing plants were reported in August, with tinue firm and in many lines are rising further. In especially large gains occurring in the heavy indus an effort to divert facilities to defense production tries. Hourly wage earnings are still advancing. and to minimize inflationary developments, priori Employment and payrolls generally are substan ties and measures of price control are being ex tially higher than a year ago, when defense activity tended over an increasing variety of goods. As a was just beginning on an expanded scale. further step toward these aims, a new program has Prices have risen further. In the case of staple been developed to restrain the excessive use of con industrial materials, little change has been shown sumer instalment credit. This program is de in recent weeks, but quotations on other goods for scribed in a supplement to the Business Review to which price ceilings have not been set are advanc be issued shortly. ing. Wholesale prices are continuing the upward Manufacturing activity in this District in July trend which has prevailed since last summer, and was maintained at the high levels prevailing the this has resulted in higher retail prices. The cost month before, although there is ordinarily a de of living is still increasing, especially in food items. cline in this period. Improvement was particularly In the securities markets, trading has been quiet, marked in the heavy goods industries, owing to de and prices are slightly below levels prevailing in fense requirements and continued strong consumer late July. Unsettling factors, aside from war de buying. Further gains, after considering the usual velopments, have been the uncertain prospects for seasonal change, were reported in a wide variety of nondurable goods industries. Production of coal taxes, the effects of the increasing shift from civilian was reduced less than usual in the month. The to defense production, the difficulties of getting raw output of crude oil and electric power was expanded. materials, and the increase in wages and other costs. Page One PRODUCTION AND DISTRIBUTION EMPLOYMENT AND PAYROLLS IN PENNSYLVANIA PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT 12 BRANCHES OF TRADE AND INDUSTRY PERCENT 1932 AVG.rIOO 225 ELECTRIC POWER PRODUCTION (scale at right)n PAYROLL \ j />* , / #■( • a 1 \ a 200 •V >/ ’• 1 r* t • 175 OUTPUT OF MANUFACTURES j 150 ., h. 125 "LOADINGS OF MERCHANDISE AND MISCELLANEOUS FREIGHT ADJUSTED TOR SEASONAL VARIATION 1937 1938 1939 1940 ' V-% i V^/ 100 1 t 1 ! V J / v EMPLOYMENTS*^ 75 194 I 1935 1936 1937 1938 1939 1940 1941 The demand for factory prod ucts in this District continues exceptionally active, stimulated by expanding defense requirements and heavier consumer buying. The volume of inquiries has increased, and sales have shown further gains in several lines of consumers’ goods, especially tex tile and leather products. In the iron and steel and building materials industries orders continue heavy; most plants are booked to capacity for the next sev eral months. Backlogs are substantially larger than a year ago. Manufacturing. Activity in July was well maintained in nearly all major lines. At plants producing defense equip ment and other heavy goods employment was 34 per cent and wage disbursements 64 per cent higher than last year. The sharpest gains were reported by manufacturers of transportation equipment, iron and steel, and nonferrous metal products. The needs of the defense program are also reflected in the nondurable goods industries, where employment has increased 13 per cent in the past twelve months and payrolls 26 per cent. Substantial gains were shown at textile mills, leather tanneries, and fac Productive activity generally continues at unusu tories producing shoes and leather goods. ally high levels. Heavy industries are operating at Hourly earnings of factory workers in Pennsyl virtual capacity, and further advances have oc vania reached a new high in July of slightly over curred in several other lines. The only substantial 81 cents, or about 12 per cent above the level of a declines were at silk mills, owing to restrictions on year ago. Weekly income declined from an aver processing of the fiber. Stocks of finished goods age of $33.16 in June to $32.12 in July, owing to a have declined further. Supplies of raw materials decrease in working time, but continued nearly also decreased in the month but are larger than a $6.00 above a year earlier. year ago except at steel mills, where growing short ages of scrap and pig iron are reported. In Delaware factories the number employed in Employment in Pennsylvania factories increased creased 3 per cent in July and wage payments ad 2 per cent further in July to an eighteen-year peak vanced one per cent. Employment in southern estimated at 1,125,000 workers. Wage disburse New Jersey decreased about one per cent from ments showed a seasonal decline of 2 per cent to June but payrolls increased 2 per cent. approximately $33,250,000 a week, reflecting va cations, holidays, and shutdowns for repairs. Em ployment was 25 per cent and wage payments 50 per cent above the level of July 1940. Since the war began the number of factory workers has in creased by over 30 per cent, and wage payments have expanded by nearly 70 per cent. Preliminary reports indicate substantial gains in both employ ment and payrolls in August, particularly in the heavy industries. Page Two The output of manufactured products in this Dis trict was sustained near capacity levels in many lines in July, although some decline ordinarily was to be expected. On a seasonally adjusted basis, operations increased 4 per cent to a record high, about 35 per cent above a year ago. The greatest improvement was again in the heavy goods indus tries, especially in the case of transportation equip ment and metal products. Gains were also shown in such nondurable lines as leather and textiles. TEXTILE ACTIVITY ACTIVITY IN THE STEEL INDUSTRY EMPLOYEE-HOURS IN PENNSYLVANIA FACTORIES EMPLOYEE-HOURS IN PENNSYLVANIA PER CENT PERCENT STEEL CONSUMING INDUSTRIES ■" WOOLENS AND / WORSTEDS STEEL PRODUCING - INDUSTRIES - TEXTILES 1936 1937 1938 1939 1940 1941 Production of electric power increased slightly in July, and continued over one-fifth larger than a year ago. Total sales were well maintained in the month, but sales to industry decreased somewhat. 1937 193 8 1939 1940 1941 requirements of the defense program. Residential awards also increased considerably, owing in part to the demand for additional housing facilities in defense production areas. Awards of building contracts in July aggregated $50,900,000 or 33 per cent more than in the pre ceding month and were the largest since early 1930. The increase was largely accounted for by a con tract for the erection of a drydock at the Philadel phia Navy Yard. Including this award, contracts for factory and plant construction in July were Production of Pennsylvania anthracite declined nearly twice as large as a year ago. The value of less than was to be expected in July, and opera contract awards for one- and two-family dwellings tions were well sustained in early August. Colliery was substantially higher than in June and was the output in July averaged 177,800 tons a day, com largest in twelve years. pared with the unusually high level of 195,600 tons The dollar volume of contracts let in the first reached in June, and was the largest for the month seven months of this year was 54 per cent above a since 1930. The volume of hard coal mined during year ago and the greatest for that period since 1930. the first seven months of 1941 was about 30,600,000 tons, the largest in four years. Agriculture. The demand for farm products has Operations at bituminous mines declined during improved further in this District, where expanding July, contrary to seasonal expectations, but produc activity in defense and other industries continues to tion was still considerably greater than a year ago. increase the wage incomes of factory workers. The Output thus far this year has amounted to more than shortage of farm labor is increasingly pronounced, as additional workers leave rural areas for employ 66,000,000 tons, the largest since 1937. ment in industrial centers. The production of by-product coke was well sus Growing conditions continue generally satisfac tained in July, and continued above a year ago, while the output of gas and fuel oils was the small tory. The supply of moisture has been adequate in most sections, although unusually cool nights est for any month since August 1939. have retarded the growth of garden vegetables. Building. Activity in the building industry in The condition of pastures has improved consider this District increased further in July to the highest ably. Production of corn, oats, and tobacco in this level in recent years. New awards of contracts for District will be somewhat larger this year than last, industrial construction were unusually heavy, as according to official estimates of the condition of productive facilities are being expanded to meet the crops on August 1. The harvest of oats and tobacco Sales of bituminous coal are unusually heavy, reflecting the high level of manufacturing operations. The demand for an thracite continues active, as consumers are buying to avoid the possibility of delayed deliveries in the fall. Prices of coal have increased recently. Coal and other fuels. Page Three MILLIONS BUILDING CONTRACTS RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE OISTRICT PERCENT SALES TOTAL STOCKS 1936 1937 1938 1939 1940 1941 in 1941 will also exceed the average of the past five years, but the output of other leading field crops, including corn, wheat, hay, and white potatoes, is expected to show a decline. The yield of orchard fruits will be about the same as in 1940. 1935 1936 1937 1938 1939 1940 1941 was 3 per cent at credit stores handling durable consumers’ goods, where business has been unusu ally active for several months. Retailers have been buying heavily in anticipa tion of an active fall season and have purchased stocks for Christmas promotions much earlier this year than usual. Inventories have been increased substantially in the past year, except at shoe stores. Prices of farm products on August 16 were 32 per cent higher than a year ago and 41 per cent above the pre-war level, according to the United States Bureau of Labor Statistics. Farm cash in Sales in July by reporting wholesale establish come in Pennsylvania, New Jersey, and Delaware ments approximated the level in June and were in the first six months of 1941 approximated considerably larger than a year ago. In the case of $203,000,000, or 12 per cent more than a year ago, shoes, the dollar volume was more than twice that and was the largest for the period since 1930. in July 1940, and gains of about 60 per cent were Trade. The distribution of commodities has been reported by dealers in electrical supplies, dry goods, the most active for this season in many years, re and hardware. The smallest increase in the year flecting the increasing movement of defense mate was in sales of drugs. Inventories were increased rials and the sharp expansion in buying by retail somewhat in July, but at the end of the month were ers and consumers. Rail freight traffic in this only about 12 per cent greater than a year ago. section is unusually heavy and in July was the largest for any month since 1930. Sales at whole sale have been at record levels in several lines, in spite of increasing difficulty in obtaining supplies. Retail sales continue exceptionally active, being stimulated further in August by sustained summer purchases and some buying in anticipation of pos sible future shortages. Loadings of revenue freight by railroads serving this section declined slightly from June to July, but continued 25 per cent larger than a year ago. Sharply increased construction activity was re flected in a rise of 50 per cent in loadings of forest products over the past twelve months. Increases in the year exceeded 20 per cent in the case of coal, coke, and miscellaneous commodities, which in clude numerous building materials and products of The dollar volume of retail sales declined much heavy industry. The increase over 1940 in ship less than seasonally from June to July. At depart ments of ore was smaller, hut loadings of this com ment stores sales increased 10 per cent on an ad modity in the first seven months were nearly onejusted basis to a level 24 per cent above a year ago half again as large as a year ago. The only decline and were the highest since early 1930. Business from 1940 was in livestock. Carloadings in the in July also exceeded seasonal expectations at Philadelphia area in early August were slightly women’s and men’s specialty stores and at shoe above July and at a considerably higher level than stores. The smallest increase on an adjusted basis a year ago. Page Four REPORTING MEMBER BANKS MEMBER BANK RESERVES PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT MILLIONS $ INVESTMENT IN US.GOV’T OBLIGATIONS (direci and guaranteed) 600 TOTAL 600 400 ^EXCESS: COMMERCIAL LOANS 200 mm REQUIRED 19 3 8 Loans to commerce and industry continue to expand, although at a some what slower rate than prevailed earlier this year. Other loans and investments at the reporting banks have increased also, and the total volume of credit outstanding reached the highest level in nearly a decade. Currency demand continues active, but deposits and reserves have been increased sharply, chiefly by payment received on an issue of se curities. Banking conditions. Member bank reserves totaling $787,000,000 on August 20 were considerably larger than a year ago. In Philadelphia aggregate balances are more than twice legal requirements, and at members else where in the District they exceed requirements by approximately 90 per cent. Banks have gained nearly $100,000,000 of re serves in the last four weeks, chiefly through inter district security transactions. The principal offset was an increase of $14,000,000 in currency de mand, which was more than double that experienced a year ago, when the defense program was in its early stages and factory payrolls were much smaller. Treasury operations absorbed $3,000,000 of reserves. Disbursements for defense purposes continued heavy, but Treasury receipts were in creased by the substantial amounts of unemploy ment trust funds turned over by the states for in vestment, quarterly collections of Social Security taxes, and considerable sums paid in by the public for savings bonds and tax anticipation notes. These tax notes were first made available on August 1. They present an attractive medium for the accumu lation of funds, as earned, toward the payment of Federal income taxes due next year. No material changes in Reserve Bank credit 93 9 19 4 0 19 4 1 were shown in the past month. At the close of the period six banks were borrowing a total of only $200,000. Working capital advances to industry increased slightly to $3,700,000. The increased credit needs of concerns engaged in defense production and the accumulation of sub stantial amounts of Government securities were reflected in an increase of $129,000,000 in loans and investments of reporting banks during the past year to $1,337,000,000. Of this amount, $17,000,000 was added in the past four weeks. Commercial loans increased only $3,000,000, but slightly greater gains were shown in open market paper, which also represents current business financ ing, and in guaranteed securities of Federal credit agencies. The greatest increase, however, was $10,000,000 in holdings of corporate and munici pal securities. The investment in direct obliga tions of the United States was reduced $7,000,000 further from the all-time high of early June. In late weeks deposits at reporting banks have risen to record levels of more than $2,000,000,000. The gain of more than $100,000,000 in the past month has been chiefly in the balances of states and local governments and to a lesser extent in funds held for other banks. Deposits of individuals and business concerns were reduced slightly, but con tinue sharply above a year ago and are being used more actively than at that time. The growth in capital funds of the reporting banks over the past twelve months has not kept pace with the rise in deposits, as shown by a decline from 11.8 to 10.4 per cent in the proportion to gross de posits. But cash assets continue large; currently they are equal to 44 per cent of deposits. Page Five BUSINESS STATISTICS Production Employment and Income Philadelphia Federal Reserve District in Pennsylvania Adjusted for seasonal variation Not adjusted Industry, Trade and Service Per cent cl lange Indexes: 1923-5=100 July June July 1941 1941 1940 Mo. ago INDUSTRIAL PRODUCTION MANUFACTURING................. Metal products.......................... Textile products........................ Transportation equipment. . . Food products........................... Tobacco and products............ Building materials.................... Chemicals and products......... Leather and products............. Paper and printing................... Iron castings.............................. Steel castings............................. Electrical apparatus................ Motor vehicles.......................... Automobile parts and bodies. Shipbuilding............................... Silk manufactures.................... Woolen and worsteds.............. Cotton products........................ Carpets and rugs...................... 1 Iosiery........................................ Underwear.................................. Cement........................................ Brick............................................ Lumber and products............. Slaughtering, meat packing. . Canning and preserving......... Cigars........................................... Paper and wood pulp.............. Printing and publishing......... Shoes............................................ Leather, goat and kid............. Explosives................................... Paints and varnishes............... Petroleum products................. Coke, by-product...................... COAL MINING.......................... Anthracite................................... Bituminous................................. CRUDE OIL................................. ELEC. POWER—OUTPUT... Sales, total.................................. Sales to industries.................... BUILDING CONTRACTS TOTAL AWARDSf.................... Residentialf............................... Non residentialf......................... Public works and utilities')".. . 117p 117p 146p 97p 144 89p 234 90p 108 54p 148p 147p 92 112 89 112 86 137 93 95 82 139r 99 85 69 206 108 92 86 107 92 53 41r 147 129 137 115r 92 87 r 94 113 128 120r 97 r 91 159 199 188 r 184 35 51 123 117 68 74 1247 1062 93r 86 74 77 63r 65 107 112 91 115 187 158 ' 78 76 66 r 74 33 30 85 98 69 126 104 17 70 32 553 61 53 45 72 98 145 56 51 27 r 95 . . .% 103p 107 90 92 167 127p 181 110 159p 152 87 86p 99 415 353 342 239 103 19 99 106 89 r 93 161 114 169 101 168 149 83 80 105 394 342 336 250 103 86 84 91 85 87 r 135 97 r 99 93 158 141 85 r 85 r 87 411 292 276 184 156 85 212 186 105 80 123 137 93 51 94 187 Employment July 1941 from 1941 from July June July 1941 1941 1940 7 Year mos. ago 1940 + 4 + 4 + 7 + 2 + 4 + 4 +14 - 3 +1 + 2 0 + 7 0 +31 +35 +57 + 18 +46 +30 + 116 + 4 +16 +33 +15 +27 + 6 +24 +28 +49 +12 +46 + 19 +83 + 6 + 4 +34 +11 +17 + 2 +20 + 6 - 6 +25 - 2 +44 - 5 + 9 + 17 - 7 + 4 + 2 - 4 +26 +19 + 3 + 12 -10 - 2* - 8 +33 +30 +33 +59 +78 +198 +67 + 135 +126 +41 +46 +43 +49 + 18 +29 +40 +45 +12 + 8* - 8 +22 +35 +31 +75 +65 +131 +57 +65 +91 +22 +38 +24 + 10 + 9 + 10 +32 +57 +13 + 5* - 4 + 4 + 1 + 2 - 1 + 4 +11 + 7 + 9 - 6 + 2 + 6 + 8 - 6 + 5 + 3 + 2 - 4 +22 +17 + 6 + 6 +24 +31 +83 +18 + 1 + 8 + 3 + 1 +14 +21 +24 +30 +48 +68 + 7 +66 +72 + 125 +36 - 1 111p 111 112p 112 85 83 Ulr 83 208 86 115 58 148 134 91 94 63 105 82 100 44 127 105 84 r 104 116 87 177 193 52 112 74 1209 85 73 56 99 94 156 91 71 33 99 85 .. 4 +19 72p + 4 115 + 4 86 + 1 90 +23 155 + 8 112p +60 177 +13 102 0 160p +12 149 + 2 69 + 1 67p + 7 87 - 7 415 +16 329 +17 322 +24 244 89 123r 96r 165 188 r 43 123 70 1052 88 71 60 107 89 158 91 68 r 34 101 97 21 71 114 88 r 92 153 115 169 103 170 149 76 74 93 410 325 326 253 79 89 66 112 109 17 67 32 536 60 50 39 67 80 120 65 49 29 r 92 91 88 68 99 81 85 r 125 85 r 97 86 159 138 67 r 66 r 76 411 272 260 187 +47 144 +36 96 +120 195 -15 160 107 84 125 130 86 58 87 161 * Unadjusted for seasonal variation. t 3-month moving daily average centered at 3rd month. % No figures due to strike. 139 82p 228 82p 110 59 145p 133p 89 Percentage change— July 1941 from month and year ago Allentown........ Altoona............ Harrisburg.... Johnstown.... Lancaster......... Philadelphia.. . Reading............ Scranton.......... Trenton............ Wilkes-Barre. . Williamsport. . Wilmington. . . York................... Employment Payrolls Building permits value GENERAL INDEX............. Manufacturing...................... Anthracite mining............... Bituminous coal mining. . . Building and construction.. Quar. and nonmet. mining. Crude petroleum prod......... Public utilities....................... Retail trade............................ Wholesale trade.................... Hotels...................................... Laundries................................ Dyeing and cleaning........... Retail sales Debits July 1940 June 1941 July 1940 June 1941 July 1940 June 1941 July 1940 June 1941 July 1940 +2 +3 +2 +2 +1 +1 +2 +1 -3 0 +i +2 +3 +25 +22 +29 +22 +17 +30 +17 +24 +18 +36 +17 +36 +17 -1 -6 -9 -3 -4 +2 0 -2 -5 -1 -1 +i +2 +61 +34 +52 +43 +34 +60 +47 +36 +39 +86 +44 +63 +47 - 47 + 17 - 92 - 47 - 76 + a + 101 - 52 - 78 + 26 - 64 + 113 - 29 - 2 + 41 + 4 - 20 - 3 + 87 - 50 - 49 - 49 + 34 ~ 1 + 102 + 143 -20 -25 -16 -26 -10 -26 -22 -22 -26 -20 +23 + 9 +24 +19 +18 +25 +26 +10 +21 +23 -15 -25 +30 +24 + 8 + 4 + 2 + 3 + 1 - 7 +12 - 5 0 + 4 + 7 -18 + 1 +31 +28 + 15 +21 +21 +37 +42 + 16 + 18 + 17 +34 +24 +33 * Area not restricted to the corporate limits of cities given here. 131 168 65 105 66 128 141 105 110 127 104 123 112 +1 +2 0 0 +3 +1 +1 +1 -5 +2 -1 +3 -2 +18 +25 - 2 +1 + 18 + 11 + 4 + 5 + 9 + 8 + 2 +15 +10 223 - 2 306 _ 2 60 -32 289 - 4 111 + 8 319 + 3 174 + 3 123 + 3 139 - 4 142 0 128 0 162 + i 155 - 2 +40 +50 - 4 +46 +40 +44 + 7 +n +15 +14 +11 +21 +25 Manufacturing Employment* Payrolls* Per cent Per cent July change from July change from 1941 1941 index June July index June July 1941 1940 1941 1940 Indexes: 1923-5 = 100 TOTAL..................................... Iron, steel and products.. . . Nonferrous metal products. Transportation equipment. Textiles and clothing.......... Textiles.................................. Clothing................................ Food products....................... Stone, clay and glass........... Lumber products.................. Chemicals and products. . . Leather and products......... Paper and printing.............. Printing................................. Others: Cigars and tobacco............ Rubber tires, goods........... Musical instruments......... 108 113 176 90 99 92 128 107 93 68 110 97 102 91 68 100 76 +6 +1 0 +2 -1 -2 +20 +2 + 7 + 1 +17 +2 +13 0 + « -1 + 5 125 173 245 108 104 97 139 121 105 73 140 109 118 102 -2 -3 -7 +i +2 +2 +2 -5 -5 +i 0 +4 -2 -3 0 +1 +2 64 129 102 -1 -6 +2 +2 +25 +34 +39 +48 +18 +18 +17 + 6 +25 +18 +9 +50 +63 +55 +67 +40 +40 +42 + 9 +38 +23 +32 +33 +18 +14 +10 +43 +54 * Figures from 2,757 plants. Hours and Wages Factory workers Averages July 1941 and per cent change from year ago June 1941 Six DigitizedPage for FRASER Indexes: 1932 = 100 p—Preliminary, r—Revised. Local Business Conditions* Payrolls Per cent Per cent July change from July change from 1941 1941 index June July index June July 1941 1940 1941 1940 TOTAL............................ Iron, steel and prod... . Nonfer. metal prod... . Transportation equip.. Textiles and clothing.. Textiles......................... Clothing....................... Food products.............. Stone, clay and glass. . Lumber products......... Chemicals and prod.. Leather and products. Paper and printing.... Printing........................ Weekly working time* Hourly earnings* Weekly earningsf Aver Aver Ch’ge Aver Ch’ge age Cll’ge age age hours 39 8 40.5 40.2 43.4 37.0 37.4 35.8 38.1 36.5 41.2 39.9 39.1 40.5 37.3 Cigars and tobacco.. . 36.2 Rubber tires, goods. . 38.4 Musical instruments. 46.2 * Figures from 2,524 plants. + 9 $.812 +12 $32 12 .914 +14 36.96 + 8 .713 + 5 28.65 + 8 .903 + 9 39.16 +15 + 12 .568 + 7 20.96 .576 + 7 21.54 +12 .542 + 9 19.56 +11 + 1 .666 25.88 + 7 .770 + 7 28.16 .568 - 1 23.28 + 8 + 7 .866 + 6 34.15 .584 + 8 22.79 + 9 .746 + 5 31.38 + s + 2 .902 - 1 35.95 +22 +24 +13 +26 +19 +20 + 19 + fi +15 + 8 + 12 + 17 +11 + 6 - 2 + 7 +10 + 1 + 9 +28 .468 .756 .752 + 3 + 2 +17 16.92 29.06 34.72 + Figures from 2,757 plants. Distribution and Prices Wholesale trade Unadjusted for seasonal variation July 1941 from Sales Total of all lines.................... Boots and shoes.................. - 1 + 43 - 7 +109 - 1 + o +1 + 62 -13 + 64 + 9 + 26 - 7 + 56 -31 + 40 + 2 + 28 Dry goods............................. Electrical supplies.............. Groceries............................... Hardware.............................. Jewelry.................................. Paper..................................... Inventories + 3 + 4 + 2 - 1 + 2 + 10 + 3 + + + + + + Per cent che nge 1941 from 7 mos. 1940 Month Year ago ago Indexes: 1935-1939 =100 +34 +61 Per cent change from Basic commodities 7 industrial.............. 7 agricultural.......... Wholesale*.............. Raw materials......... Finished products.. Farm......................... Food.......................... Other......................... Retail food* i (1935-9=100).... Philadelphia............ Scranton................... July 1941 Month Year ago ago 90 Aug. 1939 -1 +12 +27 74 +6 +2 +43 +14 +54 89 86 90 86 +3 +22 +2 +n +29 +14 +5 +29 +20 + 9 85 90 +2 +1 107 103 107 +1 0 +2 + 18 105 118 114r 102 98 97 109 96 100 87 133 108 + 10 +13 +14 + 4 +11 + 3 +24 +27 +15 + 19 +27 +27 116p 109 110 99p 154p 110 105 102 101 142 94 89 96 101 118 + + + + 6 4 8 3 9 +23 +22 +14 - 2 +31 FREIGHT-CAR LOADINGS Total........................................................................ Merchandise and miscellaneous..................... Merchandise—l.c.l............................................. Coal........................................................................ Ore.......................................................................... Coke....................................................................... Forest products.................................................. Grain and products............................................ Livestock.............................................................. 145 139 109 157 150 203 133 143 89 148 140 109 170 158 197 130 130 100 116 112 96 122 128 160 89 121 100 - 2 - 1 - 1 - 8 - 5 + 3 + 3 +10 -11 +25 +24 +13 +28 +17 +27 +50 + 19 -11 +24 +26 +13 +15 +47 +39 +51 + 7 -4 MISCELLANEOUS Life insurance sales.............................................. 104 101 101 + 3 -14* +41 + 14 + 11 +16 + 8 + 9 * Computed from unadjusted data. * Source: U. S. Bureau of Labor Statistics. 89p 84 65 88p 92p lOOp 116 112r 89 125 120 126 71 67 56 74 72 79 84 80 75 88 109 150 143 108 139 282 187 138 161 80 151 145 110 148 272 185 140 109 86 120 116 95 109 241 147 92 135 90 + 3 +10* 99 + 5 +26* 164 105 190 97 149 -10* -15* +23* +28* + 8* 103p 114 + 9* 91p 107 84 71 +11* —44* - 5 -33* -35* +33 -11* 91 0* 34 +24 136 } Business liquidations Check payments................................................... July June July 1941 1941 1940 103p 104 98 99 85 88 86p 97 142p 131 Hotels—(1934 =100) +26 +12 +10 +17 +18 + 9 +14 + 15 +17 130p 130 112 114p lllp 137p Inventories 12 2 27 12 29 10 12 Month Year ago ago 1941 from 7 mos. 1940 July 1941 fro m July June July 1941 1941 1940 RETAIL TRADE Sales Department stores—District.......................... Philadelphia................. Men’s apparel..................................................... Women’s apparel................................................ Shoe....................................................................... Credit.................................................................... +31 +75 +17 +54 +48 +20 Source: U. S. Department of Commerce. Commodity prices Index: 1926=100 Not adjusted Adjusted for seasonal variation Per cent change 140 148 105 p—Preliminary. 82 61 154 136 53 102 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS Reporting member banks (000,000’s omitted) Changes in— Aug. 20, Four 1941 weeks Assets Commercial loans................. $ Open market paper.............. Loans to brokers, etc........... O ther loans to carry secur.. Loans on real estate............. 299 44 26 31 51 Other loans............................. 111 + +$ + + + — 3 4 1 1 1 +$ 66* + 9 4 + 1 + 1 1 6* 2 + Toted loans........................... $ 562 +$ 10 +1 84 Government securities........ $ Obligations fully guar’teed. Other securities..................... 408 -$ 7 +$ 47 3 96 + 4 + 5 271 + 10 Total investments.............. $ 775 +* 7 +* 45 Total loans & investments $1,337 +$ 17 +$129 593 + 90 + 121 Reserve with F. R. Bank . . 5 25 + 1 + Cash in vault......................... 219 + 3 + 17 Balances with other banks. 1 1 “ 79 + Other assets—net................. Liabilities Demand deposits, adjusted $1,252 +$100 258 — 2 Time deposits........................ U. S. Government deposits 17 491 + 13 Interbank deposits............... Capital account.................... 16 219 + +$238 4 — — 29 + 58 + 1 + Changes in weeks ended— July 30 Aug. 6 Aug. 13 Aug. 20 Changes in four weeks Sources of funds: Reserve Bank credit extended in district........................... Commercial transfers (chiefly interdistrict)...................... Treasury operations.................................................................. - 1.5 +56.2 + 4.3 - 2.7 +20.6 + i.i + 3.7 +40.9 -10.5 +3.2 -0.6 +2.0 + 2.7 +117.1 - 3.1 Total............................................................................................ +59.0 +19.0 +34.1 +4.6 +116.7 Uses of funds: Currency demand...................................................................... Member bank reserve deposits.............................................. “Other deposits” at Reserve Bank...................................... Other Federal Reserve accounts........................................... + 2.9 +53.3 + 2.9 - 0.1 + 4.1 +20.0 - 5.1 - 0.0 + 5.0 +27.5 + 1.6 - 0.0 +1.6 -2.1 +5.2 -0.1 + 13.6 + 98.7 + 4.6 - 0.2 Total............................................................................................ +59.0 +19.0 +34.1 +4.6 +116.7 Philadelphia Federal Reserve District (Millions of dollars) One year 3 5 Member bank reserves (Daily averages: dollar figures in millions) Held Re quired Ex cess Ratio of excess to re quired Phila. banks: 1941: July 1-15. . .$489.1 $243.1 $246.0 101% July 16-31. . 502.6 246.2 256.4 104 ” Aug. 1-15.. 564.4 1940: Aug. 1-15.. 462.9 222.2 240.7 108 ” Country banks: 1941: July 1-15.. July 16-31. . Aug. 1-15. . 1940: Aug. 1-15.. 203.6 108.7 200.8 109.9 203.7 188.0 99.3 94.9 90.9 87 ” 83 * 88.7 89 ” Federal Reserve Bank of Phila. (Dollar figures in millions) Bills discounted........ $ Changes in— Aug. 20, 1941 Four weeks One year 0.2 +$ 0.1 +$ 0.1 + + 1.2 - 22.2 Industrial advances. U. S. securities.......... 3.7 171.8 Total....................... Note circulation.... Member bk. deposits U. S. general account Foreign bk. deposits. Other deposits........... Total reserves........... Reserve ratio............. $175.7 484.6 787.5 61.0 114.9 23.1 1318.7 89.6% 0.1 +$ 0.2 + 15.2 + 98.7 - 8.2 + 1.9 + 4.6 +108.9 + 0.6% -$20.9 +117.3 + 143.6 + 5.5 ' + 29.9 - 1.0 +318.0 + 4.5% * Revised. Page Seven National Summary of Business Conditions INDUSTRIAL PRODUCTION 160 Industrial activity in July and the first half of August was maintained at the high level reached in June. Wholesale commodity prices advanced further and distribution of commodities to consumers was in exceptionally large volume. 150 150 140 l'0 Production 130 Volume of industrial output showed little change from June to July. Reductions in activity at automobile factories and steel mills were largely offset in the total by further increases in the machinery, aircraft, shipbuilding, and lumber industries. The Board’s adjusted index, which includes allowance for a considerable decline at this season, advanced from 157 to 162 per cent of the 1935-1939 average. Steel production, which in June had been at about 98 per cent of capacity, declined to 96 per cent in July, owing in part to holiday shut-downs at some mills. In the first half of August steel output was again at about 98 per cent of capacity. Automobile production in July declined less than usual but in the first half of August there was a sharp reduction as most plants were closed to prepare for the shift to new model production. Activity in the nonferrous metals industries continued at a high rate. Early in August copper, pig iron, and all forms of steel were placed under complete mandatory priority control as it became evident that actual demand for these metals could not be fully met. In the wool, cotton, and rayon textile industries and at shoe factories activity in July was maintained at or near the peak levels of other recent months and production of chemicals rose further. Output of manufactured foods increased less than season ally from the high level reached in June. Coal production declined slightly in July but as in June was unusually large for this time of year. Crude petroleum production was maintained at about the high rate that had prevailed in the previous two months. Value of construction contract awards in July increased further to a level more than two-fifths higher than a year ago, according to F. W. Dodge Corporation reports. The rise reflected chiefly a continued increase in contracts for public construction, mostly defense projects. Private residential building contracts increased somewhat, although there is usually some decline at this season, while awards for other private building declined further from earlier high levels. no 100 90 90 80 70 70 1935 1936 1937 1938 1939 1940 1941 Federal Reserve index of physical volume of production, adjusted for seasonal variation, 1935-39 average =100. By months, January 1935 to July 1941. DEPARTMENT STORE SALES AND STOCKS Distribution Federal Reserve indexes of value of sales and stocks, adjusted for seasonal variation, 1923— 25 average =100. By months, January 1935 to July 1941. WHOLESALE PRICES Sales at department stores and in rural areas declined by much less than the usual seasonal amount in July and variety store sales increased further. In the first half of August department store sales rose sharply. Total loadings of revenue freight in July and early August showed little change from the advanced level reached in June. Grain shipments, which had been larger than usual in May and June, increased less than seasonally and loadings of coal declined somewhat. Commodity Prices Bureau of Labor Statistics* indexes, 1926 =100. “Other” includes commodities other than farm products and foods. By wUeks, January 5, 1935 to week ending August Tp, 1941. MEMBER BANKS IN I0I LEADING CITIES U. S. OOVT OBLIGATIONS The general index of wholesale prices advanced about 2 per cent further from the middle of July to the middle of August, reflecting sharp increases in prices of a number of agricultural and industrial commodities. Federal action to limit price increases was extended to additional basic materials, including burlap, silk, rayon fabrics, rubber, and sugar, and in the early part of August prices of these commodities in domestic markets showed little change or were reduced. On the other hand, prices for paperboard, automobile tires, and cotton yarns and gray goods were advanced with Federal approval; prices of textile products not under Federal control continued to rise; and there were considerable increases in prices of lumber, other building materials, and chemicals. On August 16 it was announced that for southern pine maximum prices somewhat below recent high levels would become effective on September 5. Agriculture _ Agricultural production in 1941 may exceed that in any previous year, according to indications on August 1, and carryovers of major crops are unusually large. Crops of wheat and other leading foodstuffs are expected to be exceptionally large, while substantial declines in production are indicated for the major export crops—cotton and tobacco. Although the cotton crop is estimated at 10,600,000 running bales, or 1,800,000 bales less than last season, total supplies of cotton will be about the same owing to a larger carryover on August 1. Marketings of livestock and livestock products, except hogs, will be substantially above last year. Bank Credit Total loans and investments at reporting banks in 101 leading cities rose further during the five weeks ending August 13. Commercial loans continued to increase substantially, while holdings of United States Government obligations showed little change. Bank deposits remained at a high level. OTHER SECURITIES LOANS TO BROKERS AND DEALERS United States Government Security Prices I935 1936 1937 I938 I939 I940 I94I Wednesday figures, January 2, 1935 to August 13, 1941. Commercial loans, which include industrial and agricultural loans, represent prior to May 19, 1937 so-called “Other loans** as then reported. Page Eight After advancing to the highest levels on record, prices of both taxable and partially tax-exempt Treasury bonds declined somewhat in the first part of August. On August 15 the partially tax-exempt 2% per cent 1960-65 bonds yielded 2.06 per cent, compared with the all-time low of 2.02 per cent on July 29. Yields on Treasury notes showed little change in the period. SUPPLEMENT TO THE BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA SEPTEMBER 1941 Gonsumer Instalment Credit In order to promote the national defense and protect * V ment such other means of promoting defense production the national economy the President of the United States and combating inflationary developments as price regu on August 9, 1941, issued Executive Order 8843, plac lation, priorities, the sale of Defense Savings Bonds, and ing upon the Board of Governors of the Federal Reserve taxes. System the responsibility of regulating the extension of All of these measures entail some form of temporary consumer instalment credit. The Order recognizes the sacrifice but are designed to protect the security and importance of instalment credit in relation to consumer well-being of the people of the country with a minimum demand in general and, more specifically, its relation of present and future disturbance. There are three broad to demand for durable goods manufactured from ma aims of national policy in this emergency. The first terials needed for defense. It emphasizes the need for and most immediate objective is to complete as quickly such regulation to promote defense production, to assist and as effectively as possible a national defense pro in curbing unwarranted price advances and general in gram of production, the extent of which is unequaled flationary tendencies, and to aid in creating a backlog in the history of the world. The second aim is to avoid of consumer demand and in restraining the accumulation a disruptive inflation, which might result from current of a consumer debt structure which might have a re large-scale expenditures for defense and which would pressive effect upon business activity in the post-defense seriously impair the real value of individual incomes— period. particularly those incomes which must be spent in large Under the broad authority delegated in the Executive part for the necessities of life. The third objective Order, the Board of Governors of the Federal Reserve might be said to be to conserve a store of buying power System has issued Regulation W, imposing limitations for protection against serious deflation when defense upon the terms under which instalment credit is to be needs have been met, when payrolls in defense plants extended. The regulation has been drawn with the aid and incomes generally are curtailed. and advice of representatives of the industry and with This protection against aggression, inflation, and de full consideration of the problems and practices pre flation can best be achieved on the economic front by vailing in this field of credit. It is to be administered maintaining some balance between the supply of avail on a decentralized basis through the Federal Reserve able goods and the amount of money and credit that Banks. can be used to purchase these goods. The demand for This provision for influencing the extension of instal defense materials cannot be reduced, but rather must ment credit represents one step toward the broad aim be expanded as much as our productive and distributive of providing this country with adequate defense against systems will permit. To the extent that consumers’ in military aggression and against the disruptive influences dustries, stimulated by active civilian buying, compete of economic distortions in employment, income, pro with defense industries for materials, labor, plant space, duction, and consumption. The measure is to supple and management, the speed and efficiency of the defense Page One program are impaired, and costs and prices rise. To the extent that rapidly expanding consumer demand is allowed to exceed the progressively curtailed supply of goods available for purchase, prices will be bid up and the exchange value of money incomes will decline. If buying becomes excessive and is aggravated further by unlimited expansion of consumer debts, the founda tion of recovery from any post-defense deflation is un dermined. Incurring debts when income is temporarily expanded impairs buying power in the future, when weekly pay envelopes will be smaller and when each dollar earned will be worth more in terms of goods. As a result, the peacetime products of industry compete with national defense during the period of expansion and are without markets when business and income are no longer stimulated by the production of planes, tanks, ships, and guns. great part of the gain being in advances to commerce and industry to finance increased business activity, to pay higher prices and wages, and to carry larger inventories. Bank investments have increased over $3,500,000,000 in this period, representing chiefly funds advanced to the Government to meet the cost of defense. Indi vidual incomes have reached an estimated annual rate of $89,000,000,000 as compared with only about $76,000,000,000 in 1940. This is the largest on record in terms of dollars and is even greater when converted into goods and services. Weekly earnings of factory workers have shown large increases; in Pennsylvania the average income of skilled and unskilled workers is now approximately $33.00 a week as compared with less than $28.00 a week during the “boom” period in 1929. At the same time that the supply of money and credit has advanced so sharply, the supply of consumer goods for which this money can be spent has become more and more limited. This country is rich in natural re sources, but the unprecedented demands for defense production have absorbed large proportions of the avail able supply of such key materials as iron and steel, The broad objectives underlying the regulation of in copper, lumber, textiles, and many other products which stalment credit are to help prevent an overexpansion of would otherwise be available for civilian consumption. consumer demand and of consumer debt, which it may In the case of such important alloy materials as tungsten be burdensome to repay later, and to help restrain bid and manganese and such other imported goods as tin ding for consumers’ goods to a point consistent with and rubber, supplies have been curtailed by the lack the volume of goods available for purchase. It is also of shipping space and are threatened further by the aimed at promoting savings, which can be invested rapid spread of hostilities. Plant facilities, of which now in the national defense effort through Defense Sav we had an overabundance in earlier years, are now ings Bonds. Later, when effective defense has been operating at capacity in basic lines. In key industries, achieved, these savings can be spent for automobiles, defense and civilian requirements cannot be met by the refrigerators, and radios. In this way—by promoting simple expedient of expanding operations. But grow budgeting of purchases over periods of expanded and ing defense needs must be met, and answering this contracted incomes—more facilities can be made avail problem only by building new plants involves too much able for defense production, depreciation in the real delay. As a result, priorities, rationing, and direct value of weekly earnings can be minimized, and fac limitations of output have been employed in lines where tories, stores, and homes can be kept busy and solvent shortages are most acute to curtail the production of when defense spending is reduced. consumers goods and thus to make more facilities avail able for defense. Inflationary conditions. The need for diverting ma terials, labor, and plants to defense production is ap During the past decade the country has been faced parent, but the necessity for protective measures against with the problem of unemployment, but in the first inflation is not always so clear. A serious inflation has year of the defense program nearly 3,400,000 workers thus far been avoided, but it is only through farsighted were added to non-agricultural payrolls and total em ness and full cooperation among producers, distributors, ployment now is more than 2,000,000 above 1929. Short and consumers that this danger can be permanently ages of labor in many areas have caused a heavy migra averted. tion of workers from farms and non-defense industries into the factories and shipyards that are building equip The elements of inflation are present. The volume ment for national defense. In the metal trades, our of money in circulation has reached a record high supply of skilled workers was not increased significantly of over $10,000,000,000 as compared with less than during the period of depression and in consequence is $4,800,000,000 at the highest point of 1929. Deposits not now adequate for our requirements. Some scarcity other than those owned by banks have reached an all of managerial capacity is also in evidence. The prob time high of over $65,000,000,000 as compared with lems of maintaining supply lines, of finding workers, only about $55,000,000,000 in 1929. Bank loans have of revising production schedules, of utilizing plants expanded by nearly $3,000,000,000 in the past year, a most effectively, and of making adjustments to rapidly The excessive use of credit when current incomes are expanded and when the quality of goods is being re duced, not only draws upon future earnings but also makes it difficult to accumulate savings for the time when prices decline and incomes need bolstering. Page Two changing market conditions are absorbing our man agerial force to the limit. As a result of expanding incomes and growing scar cities, prices have risen. Quotations on basic industrial and agricultural goods have increased 55 per cent since the war started. The general level of wholesale prices has gone up 20 per cent, with some groups of com modities—especially the agricultural—showing substan tially greater advances. The cost of labor, as measured in hourly earnings of factory workers, has reached a new peak about one-third above the levels prevailing in 1929. Thus far retail prices and the cost of living have shown smaller increases, but changes in these prices customarily lag, and further advances are to be expected. The elements of inflation are becoming active and are gathering strength to force prices into an upward spiral. To prevent serious distortions, prompt action on all fronts is imperative, because once inflationary conditions accumulate, the problem of adjustment is out of hand. The remedies must be applied before the acute stage is reached. The core of the present problem lies in the fact that the Government and civilian consumers want more goods than our industries are able to supply. The goods that the Government wants are for national security and must be provided. The curtailment must be in civilian pur chases, primarily in the purchases of durable goods which can be deferred. Character of instalment credit. A significant part of consumer buying is being done upon the instalment basis. Large cash outlays necessary to purchase such goods as automobiles, radios, and refrigerators have been difficult to make without drawing upon future in comes. Records of instalment purchases reach back to the Colonial Period, but it was not until our indus trial system began to produce these expensive durable goods that the practice became widespread. The volume of outstanding consumer instalment credit has grown sharply since the last world war, and currently amounts to nearly $6,000,000,000. This amount is small in relation to total national in come, but its importance lies in the fact that it is highly concentrated. It is estimated that nearly two-thirds of the furniture and automobiles purchased in this country are bought on instalments. This type of credit is ex tensively used in the purchase of radios, refrigerators, washing machines, vacuum cleaners, stoves, and a wide variety of other goods which require the same materials as defense equipment. About one out of three families in the United States buys upon the instalment plan, and the greatest use is in the case of families whose incomes are expanding most sharply because of the defense program. Regulation of instalment credit of a type that shortens terms and increases down payments on purchases of dur able consumers’ goods will help to conserve individual incomes. This will be an important aid in the recovery of business activity from the reduced levels which may prevail after the defense period. This type of regula tion is a relatively painless antidote for inflation be cause it does not reduce current incomes but only facilitates the more effective, budgeted use of incomes. Summary of the regulation. Pursuant to the Ex ecutive Order, the Board of Governors of the Federal Reserve System has issued Regulation W which in a broad way is outlined below. Copies of the regulation are available at the Federal Reserve Banks, at other banking institutions, and through trade organizations in the Third Federal Reserve District. As the Federal Reserve Banks have been charged with the responsibility of administering the regulation on a decentralized basis, a department of consumer instalment credit has been established in the Federal Reserve Bank of Philadel phia. All inquiries as to clarification of the provisions or compliance with the terms may be addressed to this department. Changes in the regulation may be made from time to time in the light of experience or chang ing conditions. Any suggestions as to possible construc tive amendments may also be made through this Bank. What types of transactions are covered? The regulation applies to three types of credit trans actions: (a) sales on the instalment plan of durable consumers’ goods listed in the table on page 4; (b) cash instalment loans which are in principal amounts of $1,000 or less or which, regardless of amount, are secured by listed articles; and (c) the discounting or purchasing or lending upon the security of the above types of obligations. Straight demand or time loans which do not involve scheduled repayments, expressed or implicit, are not affected by the regulation. Who is subject to the regulation? All persons undertaking in their regular course of business any of the three types of transactions covered by the regulation, whether the person be acting as principal, agent, or broker. Included are banks, finance companies, credit unions, retailers of listed articles sold on the instalment plan, and others similarly engaged. Registration. All persons engaged in these types of business are automatically registered to continue this business until December 31, 1941, but all such persons must register not later than the end of the year with the Federal Reserve Bank of the District in which they are located. Registration forms will be available at Federal Reserve Banks and other banks. Page Three General limitations. The regulation does not eliminate or prohibit any general type of loan, but no instalment credit, whether extended to finance the sale of a listed article or ex tended in the form of a cash loan, may be for a longer period than eighteen months. Down payments in the case of instalment credit arising from the sale of a listed article must be in accordance with the schedule shown in the list of articles. The instalment payments must be in substantially equal amounts and must be made at regular intervals not exceeding one month, except under certain conditions, such as when incomes are sea sonal in character. After January 1, no payments on an instalment contract may aggregate less than $5.00 a month. After October 1, transactions must be evidenced by written records showing the essential features of the transaction. Down payments on automobiles. In the case of automobiles, the down payments must be equal to at least one-third of the bona fide cash purchase price including advertised factory delivered price, freight, taxes, delivery charges, and accessories purchased with the automobile. All or part of this down payment may be in the form of an allowance made in good faith for a traded-in automobile. Down payments on listed articles other than auto mobiles. Down payments on refrigerators, radios, furniture, and other listed articles except automobiles are to be calculated in accordance with the terms specified on a basis price which represents the cash purchase price minus the allowance for traded-in articles. In these cases, the down payments must be in cash. Provisions for changing terms on instalment contracts. If, because of an unforeseen or uncontrollable contin gency, observance of the allowable terms of an instalment contract would work undue hardship upon the obligor, these terms may be extended or otherwise liberalized only if the creditor accepts in good faith a signed “state ment of necessity” from the obligor setting forth the essential features of the difficulty. The terms cannot be altered beyond the maximum allowable on the orig inal extension by any addition and consolidation of debt or by any refunding of debt, whether held by one creditor or more than one, unless a statement of necessity is accepted. Exemptions from the regulation. The following types of instalment loans may be granted on terms other than those prescribed in the regu lation : loans secured by first liens on improved real estate, loans in excess of $1,000 for improvements to real estate which are not primarily for the purchase of listed articles, loans to students for educational purposes, loans to pay for medical and related services which Page Four cannot be otherwise paid for without undue hardship, certain loans which promote the defense program, credit to finance retail sales repayable in three months, loans to finance dealer floor plans, loans to finance the pur chase of demonstrators by automobile salesmen, loans to businesses secured by collateral comprising consumer instalment obligations, and certain farm and business loans. Outstanding contracts. The regulation does not apply to contracts outstand ing before the effective date unless such contracts have been extended or revised after the effective date. Effective date. The regulation became effective September I, 1941, except that provisions dealing with statements of trans actions will not become effective until October 1, the provisions dealing with additions, renewals, and revisions will not become effective until November 1, and the provisions specifying minimum monthly payments will not become effective until January 1, 1942. LIMITATIONS UPON DOWN PAYMENTS AND MATURITIES Articles of Consumers' Durable Goods (Whether new or used) Group A 1. Automobiles (passenger cars designed for the purpose of transporting less than ten passengers, including taxicabs)........................................ Group B 1. Aircraft (including gliders)..................... 2. Power driven boats, and motors designed for use therein, other than boats or motors designed specifically for commercial use.............. 3. Outboard boat motors..................... 4. Motorcycles (two or three-wheel motor vehicles, including motor bicycles)............................ Group C 1. Mechanical refrigerators of less than twelve cubic feet rated capacity......................... 2. Washing machines designed for household use. 3. Ironers designed for household use.................... 4. Suction cleaners designed for household use. . . 5. Cooking stoves and ranges with less than seven heating surfaces................................ 6. Heating stoves and space heaters designed for household use...................... 7. Electric dishwashers designed for household 8. Room-unit air conditioners................ 9. Sewing machines designed for household use . 10. Radio receiving sets, phonographs, or combinations................................... 11. Musical instruments composed principally of metals................................................... Group D 1. Household furnaces and heating units for furnaces (including oil burners, gas conversion burners, and stokers)....................... 2. Water heaters designed for household use... . 3. Water pumps designed for household use. . . . 4. Plumbing and sanitary fixtures designed for household use................................... 5. Home air conditioning systems.......................... 6. Attic ventilating fans............................... 7. New household furniture (including ice re frigerators, bed springs and mattresses but excluding wall coverings, draperies and bed coverings)..................................... 8. Pianos and household electric organs............... Group E 1. Materials and services (other than materials listed in Group C or D) in connection with repairs, alterations or improvements upon urban, suburban, or rural real property in connection with existing structures provided the deferred balance does not exceed $1,000.. Maximum Maturity in Months Maximum Credit Value in Per Cent of Basis Price 18 66? 18 66 f 18 18 66f 66 f 18 66? 18 18 18 18 80 80 80 80 18 80 18 80 18 18 18 80 80 80 18 80 18 80 18 18 18 85 85 85 18 18 18 85 85 85 18 18 90 90 18 No limitation (The supplement to the regulation fixes the limitations and provides bases for calculating credit values.)
@FedFRASER