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THE BUSINESS REVIEW FEDERAL RESERVE BANK OF PHILADELPHIA SEPTEMBER, 1947 THE CHANGING ROLE OF SHORT-TERM GOVERNMENT SECURITIES Higher short-term rates introduce a new phase in the role of bills and certificates. For the first time in more than five years, the “short end” of the pattern of rates on Government securities has been altered signifi cantly. Three-month Treasury bills, which for so long a time bore the rate of % per cent, now yield over % per cent; % per cent certificates of indebtedness which customarily ran for one year, have just been issued on a ten-month basis. This development has been brought about by deliberate action on the part of the monetary and fiscal authorities. The Federal Reserve Banks early in July terminated for subsequent issues of Treasury bills their policy, in effect since 1942, of buying at a fixed rate of % per cent all bills offered to them, and discon tinued the repurchase option at the same rate. The Treasury offered on August 1 an issue of eleven-month certificates with interest at % per cent for maturing twelve-month certificates bearing the same rate. It has replaced a matur ing issue of one-year % per cent certificates with ten-month %’s, and will refund issues of 1 lA and 1% per cent notes maturing on Sep tember 15 with 12%-month one per cent notes. Ever since our entry into the war short-term Governments have occupied a vital position in policies of Treasury financing, Federal Reserve operations, and bank investment. How will the new.rate levels affect the functions which bills and certificates have performed in the past? Short-Terms as a Source of Funds Until fairly recently, bills and certificates together accounted for more than one-fifth of the total public debt. Yet in some respects the role of short-terms as a source of funds for the Treasury was greatest during the earlier stages of the war. Treasury bills especially fulfilled this vital function at a time when methods of raising funds had yet to be per fected. Beginning in mid-1942 weekly offerings of bills were increased rapidly, and the Treas ury and the Federal Reserve System made in tensive efforts to induce banks to invest their Page 97 excess reserves in these issues. Eventually, how ever, offerings were stabilized at $1.3 billion weekly; bills ceased to provide new money to the Treasury. This situation continued until the middle of this year when offerings were temporarily reduced and $1.2 billion of bills were paid off. Certificates of indebtedness, like Treasury bills, expanded more rapidly than long-term debt during the war. But unlike bills they con tinued to supply new money to the Treasury until early 1946. Beginning in March of that year, however, the Treasury inaugurated its program of debt reduction. Because of their even maturity spacing and their heavy con centration in the banking system, certificates constitute an effective instrument for the Treasury’s anti-inflationary policies. Within a year and a half the volume of outstanding certificates has been reduced $16 billion. The relative importance of short-term Gov ernments in the structure of the public debt is now only as great as at the end of 1942. Their function as suppliers of funds, in other words, has been considerably diminished. Whether this role will be increased significantly in the near future will depend on Treasury financing policies. There are some indications that bills and certificates may become even less important relatively in the debt structure than they are now. A large part of the budget surplus ex pected for the fiscal year 1948 will be applied to debt reduction. Roughly three-fourths of the maturing marketable debt during the remainder of that period will be in bills and certificates. If sales of savings bonds continue to exceed redemptions, non-marketable securi ties will occupy an increasingly important posi tion in the debt structure. Finally, the Treas ury’s plans to issue non-marketable 21/2 per cent bonds for institutional investors may mean a further shift in the debt structure from short- to long-term obligations. Short-Terms as a Liquid Investment for Banks Bank purchases of Treasury bills and cer tificates not only constituted an important source of funds for war financing but provided banks with a ready means to adjust reserves. The policy of maintaining a fixed rate on Treasury bills, inaugurated in April 1942, and the provision for repurchase, begun in August Page 98 HOW RESERVE CREDIT IS SUPPLIED BILLIONS TOTAL FEDERAL RESERVE CREDIT -OTHER TREASURY CERTIFICATES y TREASURY BILLS-OPEN MARKET ACCOUNT A TREASURY BILLS-OPTKJN ACCOUNT '42 1943 1944 1945 1947 1946 of that year, were designed to make bills as liquid as excess reserves. As an implement for adjusting reserves, the Treasury bill was flex ible, automatic and simple. And so long as a bank held any bills at all, use of these securi ties was the cheapest method of obtaining reserves. Banks availed themselves of this privilege in increasing amounts during 1943, and the volume of bills held in the repurchase option accounts of the Reserve Banks rose sub stantially. Until recently the volume remained relatively unchanged. Nevertheless, the activi ty of the repurchase account—at least that of the Federal Reserve Bank of Philadelphia— continued to rise. Purchases and sales increased in each succeeding year through 1946, and the turnover of the account (as indicated by the ratio of purchases and sales to the average bal ance) also followed a generally rising trend. ACTIVITY OF TREASURY BILL OPTION ACCOUNT Federal Reserve Bank of Philadelphia (Millions $) 1943 1944 1945 1946 7 Months 1947 Average monthly— Purchases.................... Sales............................. Redemptions.............. Balance........................ Number of banks accommodated........... 138 94 33 127 192 160 35 162 242 196 42 219 252 209 50 163 212 169 47 144 128 121 107 87 41 Treasury bills, therefore, continued an im portant instrument for adjusting reserves— but only for a relatively few of the larger banks. The number of banks using the option account declined consistently. Bill holdings were far from evenly distributed. Even at the peak of bank holdings in mid-1943, 65 per cent of the member banks in this district had no bills whatsoever. By the middle of this year 92 per cent had no bills. As banks reduced their holdings the bills were bought by the Reserve System and placed in the open market account, making up the largest single source of Federal Reserve credit. ing reserves will depend in large part on bank reaction to the new rates. In any case, the process of adjustment will be different. The repurchase option, which still applies to old issues of bills, will cease altogether after October 2. Banks will be faced with greater uncertainty as to the price at which reserves can be obtained. Short-Terms in the Pattern of Rates For most banks certificates supplanted Treas ury bills as an adjusting instrument. Borrow ing from Reserve Banks under the preferential rate of *4 per cent for short-term Governments was done mostly with certificates as collateral. But even though an increasing number of banks with no bills took advantage of borrow ing as a profitable way to obtain reserves, over the period as a whole borrowing remained a relatively unimportant source of Reserve credit. Banks obtained reserves, particularly after discontinuance of the preferential rate, by selling certificates rather than borrowing on them. As these certificates were bought by the System they provided an increasingly large proportion of total Federal Reserve credit. Short-term Governments have lost much of their importance as liquid investments for banks. Almost half of the member banks in this district have no bills or certificates to use in obtaining reserves. The recent rise in short term rates was effected in part to induce banks to retain what short-terms they now hold and to encourage them to invest once more in bills and certificates rather than long term bonds. The extent to which short-terms resume their function as instruments for adjust- Distribution of Govt, security holdings Total Other Govt. Sec. Area Philadelphia.................... Outside............................ 4% 1 6% 9 90% 100% 90 100 70% 93 26% 48 22% 47 Third District............ 2% 8% 90% 100% 92% 47% 46% 2%J * 1 6 6% 7 a a 92% 100% 93 100 91 100 86 100 90% 95 91 33 55% 46 38 11 54% 45 36 0 2% 8% 90% 92% 47% 46% 100% FEDERAL RESERVE ...AND CERTIFICATES. No bills No C/I No billg or C/I COMMERCIAL BANKS FEDERAL RESERVE '42 * Less than .5 per cent. OTHER $ COMMERCIAL BANKS Percentage of banks in each group having— C/I Third District........... ...OF TREASURY BILLS... TOTAL | 5 |_ OUTSTANDING TOTAL OUTSTANDING- Bills Size of Bank Total deposits— Under $2 million........... $2 to $10 million........... $10 to $100 million. . . . Over $100 million......... FEDERAL RESERVE HOLDS A GROWING SHARE... OTHER WHAT BANKS HOLD THE SHORT-TERMS? Member Banks— Third F. R. District June 30, 1947 For five years, Federal Reserve policy main tained a structure of interest rates conforming closely to the pattern prevailing at the begin ning of the war. The objective of this policy was to help assure the success of Treasury financing at low rates of interest. Rates on bills were held at % per cent by Federal Re serve buying policy; through open market pur chases the System carried out its assurance to the Treasury that rates on certificates would be maintained at % per cent. 1943 1944 1945 1947 Page 99 But while this policy helped hold down the interest cost of the public debt, it made pos sible a rapid expansion of bank credit. Main tenance of a fixed pattern of rates meant, in effect, that all Government securities regard less of their length to maturity were to all in tents and purposes equally liquid. Banks there fore sold their short-terms, the Federal Reserve bought these issues in order to prevent rates from rising, and banks used the reserves thus created to buy higher-yielding long-term bonds. This was monetization of the public debt. The recent rise in short-term rates was designed to discourage this practice, preventing the down ward pressure on long-term rates and the expan sion of the money supply which inevitably fol lowed from it. Short-term rates are once more being used to influence the volume of bank credit. Greater flexibility and uncertainty in the “short end” of the rate pattern should help discourage banks from large-scale shifting out of short term and into long-term securities. Both Treas ury policies of debt management and Federal Reserve operations in the open market are being directed toward this objective. “The Federal Reserve System will continue to purchase and hold Treasury bills as well as other Government securities in amounts deemed necessary in the maintenance of an orderly Government security market and the discharge of the System’s re sponsibility with regard to the general credit situation of the country.” INTERIM REPORT ON TRADE Retail merchants have made readjustments, and Autumn prospects are good. In mid-August a front-page story in the Wall Street Journal proclaimed a sales revival in the jewelry trade. Other business publications car ried similar items, pointing out that manufac turers of jewelry were much encouraged by the response to new lines. It is possible that a large share of the jewelers’ optimism is merely a part of the excitement that goes with the opening of a new season. Yet, a reversal of press opinion on a commodity that was cited repeatedly as the leader of a retail trade recession a few months ago, may have more than a little sig nificance. At least, it directs attention to trends in retail trade and suggests the possibility of a change in the outlook. The dollar volume of sales at all retail stores in June is estimated by the Department of Com merce at $8.7 billion—$2 billion at durable goods stores, the remainder at food and other soft goods stores. After seasonal adjustment, as shown in the chart, this represents a level of sales that is only slightly below the record of the first quarter of the year. It is still well above the level of the summer and fall of 1946. Department store sales in the Third District, after an early spring season that many con sidered disappointing, rose to a record high in May—the first new peak in nine months. The surge in dollar volume at department stores ocPage 100 curred through the nation and appears to be a sustained movement. Preliminary estimates for July, on a national basis, do not indicate a drop of the size that occurred in the Third District. The difference in the timing of the ups and downs of all retail sales and department store sales is due primarily to the difference in the type of products sold. Food sales, which ac count for more than a quarter of all retail trade, but only a very small portion of department store sales, declined slightly on a seasonal basis, during the first half of the year. Sales by eating and drinking places dropped more noticeably. Offsetting the decline was an increase in auto mobile sales, also unimportant to department stores. There is some evidence to suggest that department stores may have made greater gains than others in a few apparel lines during the first half of the year, but over such a short period it is not possible to tell whether these relative gains are much more than a matter of chance. In recent months department stores in the Third District have shown little tendency to continue the shift toward a greater propor tion of durable goods sales, indicating the un importance of changing sales composition as a source of divergent trends in “all retail” and department store sales. TRENDS IN RETAIL SALES INDEX (SEASONALLY ADJUSTED) 260 - AIL RETAIL STORES UNITED STATES^ 2 70 - ‘■DEPARTMENT STORES THIRD FEDERAL RESERVE DISTRICT 1947 Department Store Experience In the first half of 1947 department stores in the Third District increased their dollar vol ume of sales by 11 per cent over the first half of 1946. (For the nation the gain was some what less.) Almost every major department shared in the advance. Sales of major household appliances increased by over 200 per cent. Men’s clothing and infants’ wear sales rose 22 and 18 per cent, respectively. Women’s apparel and accessories increased by 4 per cent as a group, though several individual lines, including coats and suits, and furs, show’ed declines. Sales in the basement stores were 21 per cent over last year. During the first six months of 1947, basement departments continued to account for an in creasing proportion of total goods sold. Department store stocks in this District, as in the nation, were slightly higher in relation to sales at the end of June than a year ago. They were, however, in much better balance. Inven tories of home furnishings and men’s and boys’ wear were relatively larger. Stocks of most types of women’s wear had declined in relation to sales. Total inventories, seasonably adjusted, had declined throughout the spring. Most of the wartime left-overs had been cleared out and replaced by new higher quality mer chandise. On the basis of reports received from thirty of the large department stores in the Philadel phia district, it is possible to make a rough approximation of policy changes that have taken place in the last year. Behind the achieve ment of a favorable inventory position is a record of marked readjustment. In May and June of 1946, stocks on hand at department stores were about two and a half times the value of a month’s sales. Outstand ing orders were greater than inventories. This was typical of several preceding months. Sup plies were short and delivery dates uncertain. It almost seemed that orders were placed wher ever they would be accepted. At the end of June, department stores had over five months’ supply on hand or on order. An extremely high level of outstanding orders persisted until the last quarter of 1946. By then, inventory accumulation had become a matter of some concern, and new orders were cut below the level of the preceding year in an attempt to reduce outstandings. Even so, outstanding orders remained much larger in relation to sales than normal pre-war policy would have dictated. In the first four months of 1947, despite sales that were consistently higher than the year before, the net total of new orders less can cellations (which were increasing in impor tance) was slightly lower than that for the pre ceding year. As reported in the Business Review last May, this was a period in which growing consumer resistance and price uncertainty made department stores particularly anxious to reduce inventories. The Newburyport plan for a 10 per cent, across-the-board price slash, and the accompanying publicity, exerted pressure to clear out old, high-priced merchandise. Also at this time deliveries of new merchan dise were stepped up. In many lines it became possible to obtain one or two month delivery on goods that formerly required orders three to six months in advance. With prices giving some evidence of softening, department store buyers shortened up on orders. In some cases, new lines were left incomplete, with the hope that necessary fill-ins could be made at lower prices later in the season. The sharpest readjustment took place in May. Cancellations in that month appear to have been especially heavy. New orders dropped about 25 per cent below the previous year. At the end of the month, out standing orders were less than half the stocks on hand and, for the first May since 1941, less Page 101 than sales during the month. Receipts of new merchandise fell off promptly. This was the policy, probably followed throughout the nation, that jolted manufacturers of apparel and other soft goods a few months ago. still held by consumers, there is every reason to believe that total retail sales will continue to reach or even slightly surpass the level indi cated by the long-established income-sales relationship. With department store sales at record levels and retail trade generally holding up well dur ing the late spring, new orders rose cautiously in June. They did not come near the record peak of the year before, but it was evident that fall buying was proceeding normally. The Newburyport plan was all but forgotten. Whole sale prices were firm and indications pointed to a further rise. In July, new orders (less cancellations) exceeded the total of July 1946 by almost a third. The buyers were back in the market—a little late, but definitely back. And the prices of the goods they were buying were going up. Consumer credit outstanding is still low rela tive to personal income when judged by pre war standards and will undoubtedly continue to stimulate sales for some time. In the first half of 1947, the average amount of consumer credit outstanding, although a record dollar figure, was only a little over 5 per cent of a year’s personal income. In 1941 it had been 10 per cent. The abolition of controls on in stallment credit in November will undoubtedly stimulate credit buying. The Outlook It is doubtful that the apparent change in inventory and buying policy completes post-war adjustment in retail trade. Yet, any more seri ous readjustments now appear to have been postponed. The outlook for trade in the im mediate future is favorable. Department store sales for the month of August may be somewhat below last year’s temporary high mark, but in general, barring such unlikely contingencies as a revolt against new fashions in women’s wear, a good fall season may be expected. The main factor making for a large volume of sales is a continued high level of employment and income. Month after month, the number of people at work and the amount of money paid out to them have become larger and larger. We cannot keep on increasing employment in definitely, but the Commissioner of the Bureau of Labor Statistics recently issued a statement in which he said that no serious amount of unemployment was in sight. The more people earn, of course, the more they buy. During the first half of 1947, sales at retail stores had risen slightly above their pre-war relationship to disposable income. Nondurables, led by food, were accounting for far more than their normal proportion of sales, and durables, especially automobiles, though gaining, still lagged behind. Further shifts may be expected in the proportions of various types of goods sold, but with a comfortable backlog of savings Page 102 There is a feeling in some quarters that con sumers have become used to high prices and will no longer postpone purchases in anticipa tion of a price recession. To the extent that anticipations of this type enter into consumer decisions, today’s price outlook, coupled with a generally optimistic view for continued em ployment on the part of most buyers, will tend to offset “consumer resistance.” Many, however, see high prices as the villain in the piece. To them there are numerous indi cations of a squeeze on consumers’ pocketbooks. Although sales in dollars are higher than last year, the Department of Commerce reports that the physical volume of all goods sold at retail stores is down. There are more sales made in the basements of department stores, and in chain stores. More people are bargain hunting. Credit sales are increasing. And, although peo ple are spending freely, the reduction of the annual rate of saving does not speak well for the future. A long-run analysis of prospects must, of course, go beyond the scope of this report to consider basic factors and trends in our entire economy. It is on these that retail trade ulti mately depends. For the near future, however, current levels of employment and income, con sumer credit expansion, merchandising policies, and the attitudes of buyers—especially with regard to prices and new products—are the factors to watch. To an appreciable extent, the nature of readjustment still to come will depend on their proper evaluation by retailers. BUSINESS STATISTICS Production Workers in Pennsylvania Factories Production Philadelphia Federal Reserve District Not adjusted Adjusted for seasonal variation Per c ent cha nge 1947 July June July July 1947 from 1947 1947 1946 fnHU 7 Mo. Year mos. ago 1946 ago July June July 1947 1947 1946 Indexes: 1923-5 =100 INDUSTRIA L PRODUCTION MANUFACTURING.............. Durable goods. Consumers’ goods................ Metal products........................ Textile products..................... Transportation equipment.. Food products......................... Tobacco and products.......... Building materials.................. Chemicals and products.... Leather and products........... Paper and printing................ Individual lines Pig iron..................................... Steel............................................ Iron castings............................ Steel castings........................... Electrical apparatus.............. Motor vehicles.................... .. Automobile parts and bodies Locomotives and cars........... Shipbuilding............................. Silk manufactures.................. Woolens and worsteds.......... Cotton products...................... Carpets and rugs.................... Hosiery...................................... Underwear................................ Cement...................................... Brick.......................................... Lumber and products........... Bread and bakery products. Slaughtering, meat packing. Sugar refining.......................... 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 AWARDSt.................. Residential t............................. Nonresidentialf........... Public works and utilitiesf. 109p 109 112p 111 117p 117 108r 109 + 115 0 1 2 0 5 1 1 3 0 2 8 2 140 72p 129p 139p 105 46p 169p lOOp 122 140 r 69 130 138 102 46 r 172 92 119 127 74r 160r 136 99 45 151r 74 121 118 123 82 68 194 47 136 56 115r 115 86 82 207 r 40 133 55r 97 110 78 101 175 22 127 57 r 85 88 83 69 r 78p 76 42 56 40 69 r lOOp 99 64 90 81 146 123r 170 67p 67 r 62 56 61 60 28 26 26 io6 116 63 143 243p 248 106 102 95 97 124 127 91 105p 94 106 106r 114 109 227 237 16 lp 164 74 69 58 88p 110 289 278 135 102 224r 99 92 127 98 52 79 103 203 r 162 86 81 125 292 r 472 464 443r 454 303 465 330 429 294 177 157 80 165 378 218 182 204 243 76 175 458 + + + — + + 1 + + + 1 3 1 2 + 10 3 — 19 + 2 + 6 + 3 + 12 + 35 + 1 + 7 + 8 + 9 + 5 +41 +1 -35 + 5 + 2 + 13 +15 +11 + 2 105p 108 107p 109 104 104 136 67p 125p 127p 114 50p I66p 91p 118 141 67 133 122r 110 51r 173 91 118 123 68r 155r 124 107 48 149 r 68 117 108 111 78 60 204 48 131 56 llOr 89 117 r 100 85 75 85 90 207 r 184 22 49 133 122 56 r 57 r 81 73p 35 93p 66 121 78p 58 29 113 97 146 191p 114 93 123 88p 93p 104 106 227 158p 60r 58 77p 289 81 73 40 96 62 123 r 81r 58 29 112 111 67 178 110 94 123 86 95 I06r 111 237 164 72 69 97 289 2 7 5 — — 17 6 — + 18 + 2 + 2 9 __ 2 _ + 3 3 — + 1 + 27 + 19 1 + 8 7 + 1* 8 +126 2 — + 4 + 3 + 2 + 5 + 12 0 + 4 — 4 — 2 — 17 — 16 — 20 + 4 + 2 2 _ 8 - + 22 + 11 + 5 33 + 11 +116 + 8 2 __ 44 6 _ + 13 27 + 45 — 10 — 14 + 8 + 2 2 + 1* 21 + 40 + 9 + 7 +26 +31 + 15 + 11 + 12 + L6 + 13 _— + + 6 + 6 + 21 +58 +47 +36 +iu -62 - 1 + 4 -10 +32 - 5 - 7 +16 +12 + 4 - 5* - 3 +12 +17 + 1 + 6 + 4 0 + 2 3 -15 — +102 +58 + 33 +22 — — — — 0 29 28 29 1 + + + 6 3 +10 +37 - 5 - 8 +27 - 5 + 9 439 441 +10 +10 427 309 451 334 19 - 8 163 160 58 — 14 + 89 -20 -11 +76 85 161 394 85 169 359 6 86 65r 48 65r 74 141 73 57 29 112 121 104 177 r 107 88 123 91 46 78 96 204 r 159 84 81 110 292r 412r 404 300 201 206 188 209 p—Preliminary. p—Revised. * Unadjusted for seasonal variation. t 3-month moving daily average centered at 3rd month. Local Business Conditions* Percentage change— July 1947 from month and year ago Philadelphia .... Wilkes-Barre... . Williamsport. .. . Wilmington........ York..................... Employment Payrolls June 1947 July 1946 June 1947 July 1946 - 47 - 55 + 27 + 7 ** +299 +107 +154 - 14 + 4 + 8 - 12 +164 +111 - 64 +131 + 73 +198 +14 - 51 +307 + 2 - 43 +10 +141 - 12 + 5 +130 + 92 -20 -25 -14 -16 - 9 -29 -18 -15 -19 -23 +16 -14 + 8 +20 +13 + 2 + 5 + 8 +10 + 7 + + + + + + -15 - 8 +25 - 2 + 9 — 4 +13 + 11 +10 — 5 +14 - 7 + 8 + 8 +13 +15 + 9 July 1946 June 1947 July 1946 0 - 4 - 1 0 - 3 — I + 1 + 3 +13 - 4 + 1 + 5 -19 - 2 - 5 + 9 + + +26 + 7 +13 +14 - 8 +10 +17 +31 - 1 - 3 -16 - 1 - 4 + 1 0 - 1 - 3 - 1 - 1 Debits Retail sales July 1946 June 1947 5 6 2 7 1 2 4 7 Building permits value June 1947 6 5 7 7 1 1 2 8 3 0 + 7 - 1 — 5 Summary Estimaks-July 194-7 Employ ment All manufacturing............... 1,085,000 Durable goods industries. 621,600 Nondurable goods 463,400 industries....................... Weekly Payrolls Weekly Man-Hours Worked $50,583,000 31,940,000 42,521,000 24,488,000 18,643,000 18,033,000 Changes in Major Industry Groups Payrolls Employment Per cent July change July from 1947 1947 In In dex June July dex June July 1947 1946 1947 1946 Per cent change from Indexes (1939 average =100) 126 154 -1 -1 +2 +3 263 304 -2 -3 +18 +20 102 126 98 76 93 90 94 114 137 117 149 164 95 Leather...................................... Stone, clay and glass.............. 135 139 Nonferrous metals.................. 154 Machinery (excl. electrical).. 200 Electrical machinery............. 225 Transportation equip. (excl.auto)........................... 198 Automobiles and equipment. 183 Other manufacturing............. 138 0 +3 +1 0 0 +2 -4 -4 0 -2 0 0 +i -2 -1 0 -1 -2 0 +6 +7 -8 +5 -2 -2 -4 +2 +4 +1 +26 -3 +2 +3 0 +9 +3 214 237 209 166 213 176 205 225 255 230 270 318 191 264 269 291 400 458 0 +3 -1 +1 -2 -1 -4 -5 +i -2 0 -6 +3 -4 -4 0 -1 -1 +14 +21 +17 + 3 +19 +13 +11 +13 +21 +18 +13 +36 +13 +18 +20 +10 +26 +29 -2 -3 -1 -18 +22 -1 356 383 248 -3 +2 -3 —11 +43 + 7 All manufacturing.................. Durable goods industries.. Nondurable goods industries.......................... Food............................................ Tobacco..................................... Textiles..................................... Apparel...................................... Lumber..................................... Furniture and lumber prods. Paper.......................................... Printing and publishing .... Chemicils................................. Petroleum and coal prods... Average Earnings and Working Time July 1947 Per cent change from year ago Weekly Earnings Hourly Earnings Weekly Hours Aver Aver Aver age Ch’ge age Ch'ge age Ch’ge All manufacturing.... $46 62 Durable goods indus. 51.38 Nondurable goods industries............... 40.23 41.98 27.92 38.86 32.30 36.52 Furn. & lumber prods. 40.30 42.91 Printing & publishing.. 52.75 46.77 54.91 48.22 34.44 Stone, clay and glass. . 44.64 52.06 Nonferrous metals. . . . 49.10 50.60 Electrical machinery. . 56.85 Transportation equip. 54.96 Automobiles & equip.. 57.51 Other manufacturing.. 37.57 +15 $1,190 +16 1.304 +13 +12 39.2 39.4 + 2 + 4 +14 +14 + 9 +12 +14 +15 +14 +18 +19 +13 + 11 + 8 +16 +15 +17 + 10 + 15 +26 1.034 .999 .739 1.020 .864 .883 .942 1.005 1.367 1.140 1.407 1.312 .941 1.110 1.362 1.260 1.257 1.422 +14 +14 +13 +14 +13 + 8 +13 +16 +21 +13 +n +14 +14 +10 +12 +10 +10 +17 38.9 42.0 37.8 38.1 37.4 41.4 42.8 42.7 38.6 41.0 39.0 36.8 36.6 40.2 38.2 39.0 40.3 40.0 - 1 0 - 3 - 2 0 + 7 + 1 + 1 — 1 0 0 — 5 + 2 + 4 + 4 0 + 4 + 8 + 9 +17 + 8 1.379 1.323 1.032 + 7 +15 +12 39.9 43.5 36.4 + 2 + 2 * Area not restricted to the corporate limits of cities given here. ** Increase of more than 1000%. Page 103 Distribution and Prices Per cent change Wholesale trade Unadjusted for seasonal variation July 1947 from 1947 from 7 Month Year mos. 1946 ago ago Sales Total of all lines...................... Dry goods............................... Groceries................................. Hardware............................... Jewelry.................................... Paper........................................ Inventories - 5 +15 - 2 + 3 +12 + 4 -26 -24 +13 +13 +15 0 0 +23 +30 + 4 -18 +65 + 6 - 3 +10 -13 +32 - 2 +31 - 2 +43 -10 +83 - 8 +25 + 1 +51 + 6 + 1 Paper........................................ - 9 +20 Source: U. S. Department of Commerce. 2 +27 + + + 2 +21 +101 2 +16 +19 +22 +197 +149 + 67 1 Sales Department stores—District.................... Philadelphia............... Women’s apparel.............................................. Men’s apparel............................ Shoe.......................... . Furniture.................................. Women’s apparel............................... + + 3 July June July 1947 1947 1946 257 233 267 240 206 264 245 240 212 221 242 r 227 302 221 205 - 3 - 5 +n +13 - 7 — 14* + 6 + 3 -11 + « 0 - 1* 185 154 150 158 158 238 216 207 237 236 174 r 148 169 147 158 204 197 238 135 212 202 216 136 202 r 198r 293 r 73 - 4 - 3 +10 — 1 0* + 1 - 1 — 19 +84 +28* 194 181 201 190 192 116 131 63 138 130 86 146 216 165 98 113 92 141 131 89 175 196 182 91 139 104 143 129 94 171 186 191 117 115 196 - 2 - 1 - 3 -16 +10 - 9 + 8 -18 -12 - 3 0 - 8 -14 +17 -13 -16 - 1 -53 + + + + + + - 18 15 2 17 67 52 6 6 24 141 130 86 139 324 152 110 152 79 146 133 89 157 288 169 104 121 95 146 129 94 162 278 176 131 154 169 195 185 215 + 6 - 9 — 8 186 189 205 +40* +259* 21 —32* " 1 + 4 214 27 15 227 —22* —35* + 5 232 216 RETAIL TRADE Inventories Department stores—District........................ Per cent change from July 1947 Month Year Aug. 1939 ago ago Basic commodities (Aug. 1939=100)... . 305 Wholesale (1926=100)................ 151 Farm............................. 181 Food.............................. 167 Other............................ 134 Living costs (1935-1939=100)___ United States............. Philadelphia............... Food............................ Clothing..................... Rent............................ Fuels........................... Housefurnishings. . . Other.......................... Not adjusted Per sent ch mge July 1947 1947 fre m July June July from 1947 1947 1946 7 Month Year mos. ago ago 1946 + 7 Dry goods............................... Prices Indexes: 1935-1939=100 Adjusted for seasonal variation +205 Furniture.................................. FREIGHT-CAR LOADINGS Total............................................................. Merchandise and miscellaneous........ Merchandise—l.c.l............................... Coal................................... Ore.................... Coke.............................. * orest products...................................... Grain and products...................... Livestock......................................... MISCELLANEOUS Life insurance sales........................ Business liquidations Number.................................................. Amount of liabilities................................... Check payments................ Source: U. S. Bureau of Labor Statistics. * Computed from unadjusted data. 225 215 + n + n - 3 + 12 + 2 r—Revised. BANKING STATISTICS MEMBER BANK RESERVES AND RELATED FACTORS + 14 + 1 3 4 + 106 21 _ 27 + 12 + 3 + 29 Total........................................ 782 + 16 + 102 Government securities . . .. Other securities...................... 1458 258 _ + 5 2 Total investments............... 1716 - 3 Total loans & investments.. 2498 + 13 Reserve with F. R. Bank.. .. 465 40 91 55 Balances with other banks .. Other assets—net................... Liabilities Demand deposits, adjusted. . U. S. Government deposits . . Interbank deposits................. Other liabilities....................... Capital account...................... Page 104 2030 422 23 341 6 25 302 _ + _ 4 + 5 o _ 7 + + + 8 5 1 2 1 + _+ 401 26 - 375 - 273 -f+ + + 1 2 7 1 25 30 307 _ 27 2 _ + 3 Total................................................ Uses of funds: Currency demand..................................................... Member bank reserve deposits................ “Other deposits” at Reserve Bank.. .. Other Federal Reserve accounts......... Total.................................................. Member bank reserves (Daily averages; dollar figures in millions) Re Held quired Ex cess Phila. banks 1946: Aug, 1-15... 1947: July 1-15... July 16-31.. . Aug. 1-15.. . $416 420 421 419 $409 412 413 414 $ 7 8 8 5 Country banks 1946: Aug. 1-15... 1947: July 1-15... July 16-31... Aug. 1-15... $384 376 378 383 $328 338 338 339 $56 38 40 44 Ratio of excess to re quired - 4 -14 + 11 -22 +12 +20 + 6 + 3 -11 + Treasury operations.................................... 447 23 16 78 6 212 Loans to banks........................ Other loans............................... - 7 +10 - 2 - 7 - 6 - 6 - 1 +10 + 1 - 3 - 2 - 5 - 7 + 1 - 7 +10 - 2 - 7 - 6 Federal Reserve Bank of Phila. (Dollar figures in millions) Aug, 20 > Aug. 13 1 Sources of funds: Reserve Bank credit extended in district.............. Changes in four weeks Aug. 6 1 One year Changes in weeks ended— July 30 O COVI Four weeks Third Federal Reserve District (Millions of dollars) M H-*t— Assets Commercial loans.................. Loans to brokers, etc............. Other loans to carry secur.. . Aug. 20, 1947 1 Changes in— Reporting member hanks (Millions $) -35 +19 +10 Changes in Aug. 20, 1947 Four weeks One year Discs, and advances . $ 19.0 Industrial loans......... 1.8 J1639.7 +110.1 + 0.1 - 10.9 +$ 2.2 + 0.8 + 2.3 -$ 0.7 +* 5.3 +$ 0.7 + 0.8 + 14.3 + 11.0 - 0.4 + 23.3 + 0.5% -111.4 2% 2 $1660.5 2 M ij* Fed. Res. notes......... $1632.4 Member bk. deposits. 795.0 U. S. general account. 83.7 17% Foreign deposits........ 35.21 11 2.5 Gold certif. reserves. . 12 895.8 Reserve ratio............ 13 35.1% + 49.5 -19.8 + 0.3 + 10.9 + 0.1%
@FedFRASER