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THE BUSINESS REVIEW THIRD FEDERAL PHILADELPHIA ‘*K RESERVE DISTINCT SEPTEMBER 2., 1940 ? AM 0* FEDERAL RESERVE BANK OF PHILADELPHIA ---- -T 'L-A Business and Banking Conditions in the United States Volume of industrial output was steady during July and the first half of August, after a rapid expansion in May and June. Employment contin ued to increase. Reflecting mainly awards for national defense projects, construction contracts rose to the high est level in ten years. Prices of basic commodities declined somewhat fur ther. Production. In July the Board’s re vised index of industrial production stood at 121 per cent of the 1935-1939 average, according to preliminary data. This is the same as in June and 17 points above the level prevailing a year ago before the outbreak of war. In most lines activity was maintained at the levels reached in June or in creased further. Steel production in July was at about 85 per cent of capacity and in the first half of August there was an increase to about 90 per cent. Pro duction of pig iron and coke and out put of nonferrous metals were also in large volume. In the machinery, ship building, and aircraft industries, where new orders had been large dur ing the first half of the year and a considerable backlog of unfilled orders had accumulated, activity was main tained at high levels in July, although ordinarily there are declines at this season. Lumber production declined sharply early in July but has subse quently increased accompanying a considerable rise in new orders. In the automobile industry output declined sharply in July and the first half of August as plants were closed to prepare for the shift to new model production. The decline was greater than at this season in other recent years, reflecting the fact that produc tion had been at high levels during the first half of 1940 and large stocks had accumulated. These stocks were reduced considerably in July as pro duction was curtailed and retail sales continued large. Textile production increased con siderably further in July, reflecting chiefly a marked rise in activity at woolen mills where output is still be low the levels of a year ago. Pro duction of cotton and rayon textiles was maintained in July and was in larger vplume than last summer, while activity at silk mills increased some CONSTRUCTION Index of physical volume of production, ad justed for seasonal variation, 1935-1939 aver age = 100. By months, January 1934 to July 1940. CONTRACTS AWARDED Three-month moving1 averages of F. W. Dodge Corporation data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. Latest figures based on data for May and June and estimate for July. what from the exceptionally low level reached in June. Shoe production in creased seasonally, while output of manufactured foods, which in June had been unusually large for that time of year, showed less than the custom ary increase in July. Coal production has risen further and shipments of iron ore down the Lakes have continued at near-capacity rates. Petroleum production has been curtailed sharply, however, reflecting partly a continued high level of stocks of petroleum products. Value of new construction work un dertaken increased sharply in July, owing mainly to a further rise in pub lic construction, and was at the highest level in the past decade, according to reports of the F. W. Dodge Corpora tion and the Federal Reserve Bank of San Francisco. Awards for both residential and nonresidential private building increased somewhat, although some decline is usual at this season. Increases were most pronounced in the Atlantic, Gulf, and Pacific Coast States, reflecting awards of additional contracts for naval air station and shipyard construction. In the central MEMBER BANK RESERVES AND RELATED ITEMS Wednesday figures, January 3, 1934, to August 7, 1940. Page One portions of the country there were generally small increases, although in some areas awards were lower. Distribution. Distribution of com modities to consumers was sustained in July at about the levels prevailing in the first half of the year. Sales at department stores declined more than seasonally, while sales at variety stores showed little change, although a decline is usual in July. Total freight-car loadings increased seasonally in July. Shipments of grain showed a considerable rise and load ings of coal and coke continued to advance, while shipments of miscel laneous freight, which include most manufactured products, declined by somewhat more than the usual sea sonal amount. Commodity prices. Prices of basic commodities declined somewhat fur ther from the middle of July to the middle of August, with decreases chiefly in prices of commodities in fluenced by foreign supplies, such as lead, rubber, cocoa, and coffee. Prices of steel scrap and zinc, on the other hand, advanced somewhat in this period. Agriculture. Prospects for most crops showed little change in July, accord ing to the Department of Agriculture. Production this year is expected to approximate the 1929-1938 average and, considering carryovers, supplies of most crops will be large. Condi tions for wheat and oats improved during July, while the corn crop showed some deterioration. A cotton crop of 11,429,000 bales was indicated for this season as compared with 11, 817,000 bales last season. Bank credit. Total loans and invest ments at reporting member banks in 101 leading cities increased substan tially during the five weeks ending August 14, owing mainly to purchases of direct and guaranteed securities newly issued by the United States Government. Sale of these securities caused a large increase in Treasury balances with the Federal Reserve Banks. As a result of this temporary development, excess reserves declined by $450,000,000 in this period despite an increase of over $500,000,000 in monetary gold stock. Government security market. Prices of United States Government securi ties were relatively steady during July and the early part of August but de clined slightly around the middle of August accompanying news of intensi fication of European warfare. The yield on the 1960-65 bonds increased to 2.39 per cent on August 14 com pared with 2.34 per cent on July 1 and 2.26 per cent on April 2 at the year’s peak in prices. Business and Banking Conditions in the Philadelphia Federal Reserve District Industrial activity in the Third Fed eral Reserve District was well sus tained in July and further improve ment was in evidence in August. The demand for capital goods has con tinued to increase owing in part to actual and anticipated production for national defense. Demand for con sumers’ goods continues light as sea sonal ordering has been delayed, but a substantial volume of business is expected this fall from both civilian and government sources. The seasonally adjusted index of industrial production advanced 4 per were reported in manufacturing lines and further substantial advances ap pear to have occurred in August. The trend of wage payments in extractive industries was mixed, increases being reported in the case of bituminous coal mining and production of crude pe troleum and declines being shown at anthracite mines and quarries. De clines also prevailed in the trade and service industries. Sales at wholesale and retail de clined in July after having shown im provement in the preceding months, but remain larger than a year ago. cent from June to July. Manufactur ing activity and the production of electric power showed improvement; the output of bituminous coal in creased and the production of anthra cite materially exceeded seasonal ex pectations. Construction activity expanded con siderably in the month, especially in the case of nonresidential building and public works and utilities. Current levels are well above a year ago. Employment and payrolls in Penn sylvania in general showed little change from June to July. Increases FACTORY PAYROLLS PRODUCTION AND PRICES PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT INDUSTRIAL PRODUCTION / (pHILA- FED- WES PISt) CONSUMERS* GOOD* COMMODITY PRICES US. (other than farm products CAPITAL GOODS _ PRICES OF _ RAW MATERIALS 1934 1935 1936 Page Two 1937 1938 1939 194-0 1936 193 7 193 8 1939 1940 The volume of wholesale business con Business Indicators tinues to be sustained primarily by Philadelphia Federal Reserve District reorders. Commodity prices were somewhat Index numbers: percentages of the 1923-1925 average as 100 weak from the middle of July until Adjusted for seasonal variation Not adjusted for the early August, but subsequently showed Adjusted indexes allow activity.usual seasonal change in Per cent change firmness. In the case of staple com Unadjusted indexes merely the modities strength has been shown re actual change whichreflector may not July May June July July 1940 1940 July May June July may from from be typical. 1939 1940 1940 1940 1939 1940 1940 1940 cently in quotations on industrial ma 7 Month Year mos. terials, chiefly metals. 1939 ago ago Manufacturing. The demand for Industrial production.............. 81 84 85 89p + 4 +10 + 8 77 83 84 84p Manufacturing—total..................... products manufactured in this district 79 83 82 86p + 4 + 9 + 9 76 81 82 82p Durable goods............................... 69] 85 87 92p + 5 + 34 + 32 has continued to expand, the largest Consumers’ goods......................... 87 80 80 82p + 3 - 6 - 4 Metal products............................... 67 86 91 98 + 8 +46 86 +39 64 92 93 gains again being in the case of heavy Textile products............................. 80 65 64 69p + 7 -11 -14 74 63 63 63p Transportation equipment.......... 81 goods. Inquiries for and sales of iron 99 103 108 + 5 +33 + 34 79 103 104 105 Food products................................. 85 86 84 86p + 1 + 1 + 3 81 80 81 80p and steel products and building ma Tobacco and products.................. 92 114 97 92 - 4 + i 111 99 104 100 Building materials......................... 38 43 40r 40p - 1 + 5 + 10 41 45 44 r 43p terials increased in the four weeks Chemicals and products............... 124 120 128 129p + i + 3 122 + 11 123 128 127p Leather and products.................... 133 103 108 114p + 6 ended the middle of August and are -14 - 9 121 94 105 104p Paper and printing........................ 86 91 89 88 ~ 1 + 2 + 3 83 91 89 85 well above a year ago. The demand Coal mining.......................................... 57r 59 72 83 p + 14 + 44 + 4 46 58 66 65p Anthracite........................................ 56 r 57 71 82p + 15 + 46 - 2 44 57 65 64p for certain textiles and shoes also im Bituminous...................................... 68 r 77 83 87 + 4 + 28 + 49 60 r 70 73 76 Crude oil.............................................. 424 445 405 411 proved somewhat in the period. + 1 - 3 + 2 424 463 421 411 Electric power The volume of unfilled orders at Output.............................................. 261 288 283 292 + 3 + 12 + 9 242 268 269 272 Sales, total %..................................... 251 274 277 276 - 0 + 10 + 9 236 263 269 260 plants producing capital goods in Sales to industriesj........................ 175 183 196 184 - 6 + 5 + 9 178 186 198 187 creased further in the month, and Employment and wages—Pa. backlogs in the manufacturing in Factory—Employment...................... + 2* + 7* + 8* 81r 84 86 r 87 Payrolls............................................. + 1* + 20* + 18* 70 r 79 dustry generally were larger than a 82 83 Man-hours (1927-28= 100)......... + 2* +23* +21* 66 78 80 81 year ago in all reporting lines except General (1932 = 100) Employment................................... — 0* + 6 * textiles and some miscellaneous prod Payrolls............................................. + 0* + 17* + 15* 136r 154 159 159 ucts. Inventories of both raw and fin ished goods at reporting factories are Building and real estate Contracts awardedf—total............ 73 r 66 69 93 + 35 + 28 86 - 0 67 63 71 Residential!..................................... 56 r 54 55 51 - 7 - 9 - 9 64 about the same as a month and a year 57 58 58 Nonresidentialf............................ 52 r 47 56 94 + 68 + 83 - 3 47 50 57 87 Public works and utilities!.......... 141 r 158 142 187 + 32 + 33 + 19 121 111 135 161 ago. Permits for building—17 cities . . . . 20 27 23 21 - 9 + 8 + 0 24 30 29 26 Prices of manufactured goods are Real estate deeds—Philadelphia! . 51 54 56 58 + 3 + 13 + 15 51 52 56 58 Writs for Sheriff sales—Phila.......... 296 289 254 256 + 1 -12 281 -14 303 254 243 generally firm. Some weakness is ap parent in certain textiles and leather, Distribution Retail trade —sales...................... 77 r 81 84 79p - 6 + 3 + 3 54 84 84 55p and increases have been reported in stocks.................. 75 79 77 78p + 2 + 5 67 79 72 70p Wholesale trade—sales..................... the case of lumber products. - 7* + 17* + 7 stocks.................. — 1* + 4* Employment and payrolls at Penn Life insurance sales............................ 77 84 +21 91 93 + 3 + 3 74 90 94 90 New passenger auto, registrations . - 0* +54* + 38* 103 sylvania factories increased about 1 Hotels—Occupancy.. . (1934 = 100) —24* + 4* + 5* 93 r Income, total (1934 = 100) per cent from June to July, when em —44* + 4* + 8* Freight-car loadings—total............. 62 70 75 75 + 0 + 21 + 22 63 72 76 78 ployment ordinarily shows no change Merchandise and miscellaneous. 62 69 73 73 - 0 + 18 + 17 63 72 75 75 Coal................................................... 66 71 80 79 - 1 + 19 + 28 59 66 70 70 and wage payments decline 2 per cent. Preliminary reports from over 1600 Business liquidations Number................................................. +21* 0* — 10* establishments indicate further sub Amount of liabilities.......................... — 13* -48* —27* stantial gains in August at both iron Payment of accounts and steel and textile mills. Check payments................................. 89 91 93 89 - 4 - 0 + 6 87 90 97 87 Rate of collections (actual) At the levels in July the total num Retail trade..................................... 32 32 32 33 + 3 + 3 32 33 33 33 ber of factory wage earners in Penn Prices—United States sylvania was estimated at 907,000, or Wholesale (1926 = 100)................. + 0* + 3* + 3* 75 Farm products................................ + 0* + 6* + 5* 63 68 66 66 about the same as in March. Aggre Foods................................................. 0* + 4* + 2* 67 71 70 70 Other commodities........................ + 0* + 3* + 3* 80 gate wage payments were estimated 82 82 82 Retail food....................................... - 1* + 3* + 2* 76 79 80 79 at $22,500,000 a week, which, except Philadelphia..................................... — 0* + 2* Scranton........................................... - o* + 3* + 3* 74 76 76 76 for the four months from last October to January, was the highest level since % change from July April May June July the fall of 1937. (In millions of dollars) 1939 1940 1940 1940 Month 1940 Year The sharpest gains in the month ago ago were reported by the capital goods Banking and credit Federal Reserve Bank industries, where employment was 20 Bills discounted.............................. $ 0.3 $ 0.2 $ C.l $ 0.1 $ 0.2 + 100 -33 Other bills and securities............. per cent and payrolls nearly 40 per 200 200 217 200 197 - 1 - 9 Member bank reserves.................. 502 683 697 667 670 + 0 +33 cent above a year ago. At iron and Reserve ratio (per cent)............... 77.9 83.9 84.2 84.0 84.5 + 1 + 8 Reporting member banks steel mills, where there is customarily Loans................................................ $ 400 $ 437 $ 446 $ 453 $ 460 + 2 + 15 no change in the month, employment Investments..................................... 700 719 723 728 0 725 + 4 Bankers’ acceptances outstanding. 8.1 9.5 9.2 8.9 9.1 + 2 + 12 increased 3 per cent, the greatest im * Computed from data unadjusted for seasonal variation. p—Preliminary. r—Revisedprovement being at steel works and ! 3-month moving daily average centered at 3rd month, rolling mills, forges, foundries, and t Not included in production index. Page Three OUTPUT OF STEEL INGOTS TEXTILE ACTIVITY %OF CAPACITY EMPLOYEE - HOURS IN PENNSYLVANIA PERCENT PERCENT CARPETS AND RUGS UNITED STATES WOOLENS AND WORSTEDS EASTERN PENNSYLVANIA 193 7 1938 1939 machine shops. Increases were also reported in the transportation equip ment industry, reflecting gains at plants producing motor trucks and railway equipment. At establishments turning out stone, clay and glass prod ucts, employment and payrolls were unusually well sustained. Employment in the consumers’ goods industries increased about 1 per cent from June to July, while wage payments were unchanged. Cur rent levels are still below a year ago. Improvement in the month was most marked at woolen and worsted and hosiery mills and at shoe factories. Increases at clothing mills were smaller than seasonal expectations. Average hourly earnings of factory workers in Pennsylvania advanced for the fifth consecutive month to reach a new high of 72.8 cents. This compares with a peak of 72 cents in 1937. Weekly earnings declined slightly to $26.43. Employment and payrolls in Dela ware factories declined nearly 2 per cent in the aggregate, reflecting a temporary curtailment of activity in important plants producing transpor tation equipment. Compared with a year ago employment showed a gain of 11 per cent and payrolls 20 per cent. At factories in southern New Jersey employment increased fractionally from June to July, and payrolls ex panded 1 per cent. At these levels there were 19 per cent more wage earners working than in 1939 and wage payments aggregated 35 per cent more than a year earlier. The output of manufactured goods in this district was sustained in July instead of showing the customary de cline. On a seasonally adjusted basis Page Four 1940 1937 there was an aggregate increase of 4 per cent. Output of capital goods increased 5 per cent to a level 34 per cent above a year ago, while con sumers’ goods expanded 3 per cent but were still 6 per cent below 1939. Among the major lines the largest gains in the month were in the output of metals, textiles, leather, and trans portation equipment. Of the individ ual products the sharpest increases in durable goods . were in the case of motor trucks, steel castings, steel, and brick, and in nondurable goods, ho siery, underwear, and sugar. Com pared with 1939 the largest gains were reported by shipyards, iron and steel mills, steel foundries and plants produc ing locomotives and cars. The output of electric power in creased somewhat in July instead of showing the customary decline and was 12 per cent above a year ago. Total sales were about the same as in June on a seasonally adjusted basis. Coal and other fuels. The market for fuels generally is well sustained, and demand from heavy industries for bituminous coal and coke has been especially active. Purchases of an thracite by retail dealers continue substantial and in recent weeks have been larger than a year ago. The value of coal exported from the United States declined 8 per cent from June to July but was still 65 per cent larger than a year ago. Production of anthracite was re duced considerably less than usual in July and was the largest for the month since 1930. Activity at the mines slackened seasonally in early August. In the first seven months of this year production aggregated 29,400,000 tons, 1938 1939 1940 or about 2 per cent less than a year earlier, when demand was stimulated by the temporary stoppage of opera tions at bituminous mines. Output of soft coal in Pennsylvania has exceeded seasonal expectations since February, and in July the vol ume was 28 per cent greater than a year earlier. Production expanded somewhat further in early August, ac cording to preliminary reports. Production of by-product coke has increased sharply since the spring and in July was only slightly below the peak of recent years reached last November. Output of gas and fuel oils decreased somewhat in July and was slightly below the level of a year ear lier. In the first seven months this year operations at by-product coke ovens and oil refineries were substan tially above 1939. Building. Construction activity in this district improved sharply again in July and was well above the levels of a year ago. Payrolls in the con struction and contracting industry in Pennsylvania showed an increase of 57 per cent from the seasonal low point in February, compared with a gain of 29 per cent in the comparable period of 1939 and only 8 per cent in 1938. The value of new contracts awarded in July aggregated $29,136,000 or 37 per cent more than in June and 83 per cent above a year ago. The in crease in the month was due largely to an expansion from $1,072,000 to $10,965,000 in awards for factories, which reflected chiefly awards for the construction of additional shipbuilding facilities. Decreases from June were shown in the case of residential and commercial building. VALUE OF BUILDING CONTRACTS AWARDED RETAIL TRADE PHILADELPHIA FEDERAL RESERVE DISTRICT PHILADELPHIA FEDERAL RESERVE DISTRICT PERCENT PERCENT PRICES OF BUILDING MATERIALS (1925=100) SALES NON-RESIDENTIAL STOCKS RESIDENTIAL CONTRACTS AO-I fOR jCAS- VARIATION 1923-25=100 (smonttii'movmg -f.) 1935 1936 Building contracts Philadelphia Federal Reserve District Apts, and hotels............. Family houses................. Nonresidential..................... Commercial...................... Factories........................... Educational..................... All other........................... 1937 1938 Per cent change July 1940 1940 (000’s From from omitted) month 7 mos. ago 1939 $ 6,835 1,539 5,296 14,482 1,090 10,965 975 1,452 Total buildings........... $21,317 Public works and utilities. 7,819 - 13 - 6 - 34 - 18 - 5 - 2 + 153 + 21 - 67 + 25 + 923 + 154 + 668 + 6 + 15 - 37 + 57 + 2 + 6 + 35 Grand total................. $29,136 + 37 + 13 Source: F. W. Dodge Corporation. Awards totaled $124,400,000 in the first seven months of the year, com pared with $109,900,000 last year and a 1930-1939 average for the period of $95,200,000. The sharpest increase over 1939 was in contracts for factory buildings, which have comprised nearly 15 per cent of awards to date, as against less than 7 per cent in 1939. Agriculture. The outlook for agricul ture in this district has improved somewhat since early August. Gen eral rains have replenished soil mois ture and have been particularly bene ficial to late truck crops, tobacco and pastures. Fall plowing is beginning in several southern counties. Estimated yields of corn, oats, to bacco, and white potatoes have been revised upward since July, according to reports of the Department of Ag riculture. Compared with the fiveyear average, the output of oats, hay, and tobacco will be substantially larger this year, while some decrease is indicated in the case of most other leading field crops. The quality of orchard fruits is satisfactory, but the commercial crop of apples in Penn sylvania and New Jersey is expected 1939 1940 1934 1935 to be somewhat smaller than in 1939. Cash income from the sale of farm products and from government pay ments in Pennsylvania, New Jersey, and Delaware has increased further, and in the first six months of 1940 totaled nearly $180,500,000, or about 3 per cent more than in the same period last year. Distribution, trade and service. The distribution of commodities to con sumers continues to lag in the expan sion in general business activity. The aggregate income of factory workers, which represents the basic source of purchasing power, during the first seven months of the year averaged nearly 18 per cent above the corre sponding period in 1939 in the Phila delphia Federal Reserve District. During this time retail sales showed an increase of only 3 per cent over a year before, and wholesale trade was but 7 per cent higher. Shipments by rail freight in the Allegheny District were 22 per cent above 1939, but this was due primarily to large increases in the movement of such heavy goods as ore, coke, and coal. Less than carload shipments of merchandise in the first seven months of this year ag gregated about the same as in 1939. The prospects for distributive ac tivity during the balance of the year, however, are generally regarded as favorable. Latest preliminary reports of retail sales indicate substantial in creases over a year ago, and retailers anticipate an active fall season. Stores continue to be cautious in their buying policies. The dollar volume of retail trade sales declined more than seasonally during the summer lull in July, fol lowing substantial improvement in 1936 1937 1939 1940 business in the two preceding months. Aggregate sales of reporting stores decreased 6 per cent more than was to be expected in the month, all lines except women’s apparel showing re ductions on an adjusted basis. Compared with July 1939 total sales were 3 per cent larger, reflecting gains at department and men’s ap parel stores. Women’s specialty shops and credit stores had slightly smaller volumes of business than a year earlier, and at shoe stores there was a greater decline. Stocks of goods at retail stores in creased about 2 per cent from June to July, after allowing for seasonal changes. This was due to increases at apparel stores. Compared with July 1939 aggregate retail inventories were 5 per cent larger. Wholesale trade sales declined from June to July in all reporting lines, the sharpest decrease being reported in the case of dry goods. The aggre gate reduction was 7 per cent. Total sales were 17 per cent larger than in July 1939. Stocks of goods at wholesale establishments declined 1 per cent in July and at the end of the month were only 4 per cent larger than in July 1939. Shipments by rail freight in the Al legheny District showed a small sea sonal increase from June to July and in the aggregate were more than 20 per cent above July 1939. Loadings of coke and ore continued the sharp expansion which has been in evidence for some time. The movement of grain increased more than was to be expected and shipments of forest products were sustained instead of showing the customary decline. Load ings of coal increased somewhat less than usual, and the movement of merPage Five chandise and miscellaneous materials was about unchanged, as was to be expected. Sales of new passenger automobiles in July were in nearly the same vol ume as in June and were 54 per cent larger than in July 1939. In the first seven months of this year sales ag gregated 38 per cent more than in the corresponding period a year ago. The income of nonresort hotels in this district was 4 per cent larger than in July 1939 and in the first seven months was 8 per cent above a year ago. Hotel business Philadelphia Federal Reserve District Room occupancy.................... Per cent of capacity used: July 1940................ 43.0 June 1940................ 56.8 July 1939................ 41.4 Revenue from: Guest rooms........................ Food....................................... Other sources....................... Total revenue................. July: per cent change from Month Year ago ago + 0 -24 1940 from 7 mos. 1939 + o + 4 + 5 -44 -43 -44 + 4 + 4 + 9 + 7 + 7 -44 + 4 + 8 Banking conditions. Outstanding credit of the reporting banks has in creased further in the past month, ex pansion being concentrated chiefly in loans to trade and industry, which are in the largest volume in late years. Deposits declined somewhat. These changes were reflected in a reduction in reserve balances, which in the case of all member banks in this district declined to $644,000,000 on August 21. This was the lowest for any weekly statement date since March but was still $128,000,000 above a year ago. Average reserves of $651,000,000 in the first half of August sharply exceeded require ments, the percentage of excess to re quired reserves being 108 per cent at Philadelphia banks and 89 per cent at the country banks. Member bank reserves (Daily averages in millions of dollars) Held Re quired Ex cess Philadelphia banks: 1940—July 1-15 $479.0 $221.4 $257.6 July 16-31 483.3 223.7 259.6 Aug. 1-15 462.9 2222 240.7 Ratio of excess to re quired 116% 116 ” 108 * 1939—Aug. 1-15 356.6 195.5 161.1 82 ” Country banks: 1940—July 1-15 July 16-31 Aug. 1-15 189.1 187.6 188.0 97.4 98.1 99.3 91.7 89.5 88.7 94 ” 91 w 89 ” 1939—Aug. 1-15 159.5 96.3 63.2 66 * A decline of $16,000,000 in member bank reserves in the four weeks ended August 21 was due principally to the Page Six Federal Reserve Bank of Philadelphia (Dollar figures in millions) Aug. 21, 1940 Bills discounted........... $ 0.1 Bills bought................... 0 Industrial advances. . . 2.4 U. S. securities............. 194.1 Total........................... $ 196.6 Note circulation........... 367.3 Member bank deposits 643.9 U. S. general account.. 55.4 Foreign bank deposits. 85.0 Other deposits.............. 24.1 Total reserves............... 1,000.7 Reserve ratio................ 85.1% Changes in— Four weeks One year -$ 0.1 -$ 0.1 - 0.0 - 0.3 - 11.1 0 - 0.3 0.3 -* 0.7 + 6.3 - 15.9 + 23.3 + 12.1 + 13.2 + 38.6 +0.5% -Sll .5 + 45.9 + 128.2 + 14.2 + 51 .1 + 15.4 + 266.4 + 5.1% fact that local Treasury receipts ex ceeded disbursements by $22,000,000. Transfers of unemployment trust funds to the Government were heavy, a substantial amount of Social Se curity taxes was paid, and the Treas ury’s cash income was further in creased by the sale of Commodity Credit Corporation notes, of which nearly $12,000,000 were allotted in this district. An increased demand for currency also contributed to the reduction in reserves. A considerable gain was shown in transactions with other districts, but part of these funds was absorbed by an increase in mis cellaneous deposits at this bank. The demand for reserve bank credit continued slow. Small declines were shown both in bills discounted and in industrial advances, and the partici pation of this bank in System hold ings of United States Government se curities decreased $300,000 to $194, 100,000 owing to small sales from the System Open Market Account. Deposits at the reporting member banks declined only $5,000,000 in the past four weeks, as withdrawals were largely counterbalanced by deposits created through the extension of addi tional bank credit. Aggregate depos its of $1,755,000,000 on August 21 were $37,000,000 below the record high point in May, but were still much larger than a year ago. Total loans and investments of the reporting banks increased $16,000,000 in the four weeks ended August 21 Reporting member banks (000,000’s omitted) Assets Commercial loans................... $ Open market paper................ Loans to brokers, etc............. Other loans to carry secur. . Loans on real estate............... Loans to banks........................ Other loans.............................. Changes in— 21, 1940 Four One weeks year* 232 35 +$12 22 106 1 2 0 0 0 32 50 + + 1 4 + + + + 9 3 i 1 0 + 12 Total loans........................... $ 478 + *17 +$70 Government securities.......... * Obligations fully guaranteed Other securities.................. 361 93 276 -$ 1 + 3 - 3 -$ 1 - 4 + 2 Total investments.............. $ 730 -$ 1 -$ 3 Total loans & investments $1,208 Reserve with F. R. Bank. . . 472 + *16 - 20 + *67 Balances with other banks. . Other assets—net............... 20 202 - 80 0 2 0 Liabilities Demand deposits, adjusted . $1,014 —$13 Time deposits.......................... 0 262 U. S. Government deposits.. 0 46 Interbank deposits................. 433 + 8 Borrowings............................. Other liabilities....................... 13 - 1 Capital account...................... 0 214 * On comparable basis. to $1,208,000,000. The outstanding change was a further expansion in the volume of commercial loans from $220,000,000 to $232,000,000, which materially exceeded the rise of $5, 000,000 reported in the corresponding period of 1939. These loans have shown an increase of $41,000,000 from the low in January and currently are 23 per cent larger than a year ago. The increase of $17,000,000 in total loans in the latest period to $478, 000,000 also reflected an expansion of several millions of dollars in holdings of open market paper and a slight rise in loans to purchase or carry securi ties. In contrast, investments declined $1,000,000 to $730,000,000 and are somewhat smaller than a year ago. Sales of direct issues of the Federal Government and of corporate and municipal securities were not quite offset by an increase of $3,000,000 in guaranteed obligations, which was due primarily to the allotment of Com modity Credit Corporation notes on August 1. MEMBER BANK RESERVES AND RELATED FACTORS Philadelphia Federal Reserve District (Millions of dollars) Sources of funds: Reserve bank credit extended in district..................... Commercial transfers (chiefly interdistrict)............ Treasury operations........................................................ Total......................................................... Uses of funds: Currency demand..................................................... Member bank reserve deposits...................... “(Other deposits” at reserve bank................................. Other Federal Reserve accounts............................ Total...................................................................... * Preliminary. Changes in weeks ending— July 31 Aug. 7 Aug. 14 Aug. 21 Changes in four weeks* + 0.9 + 19.9 + 2.2 - 4.2 + 12.5 -14.7 + 2.5 + 6.0 - 6.5 + 1.4 -13.3 - 3.5 + 0.6 +25.1 -22.5 +23.0 - 6.4 + 2.0 -15.4 + 3.2 + 1.0 + 9.2 + 12.7 + 0.1 + 2.5 -18.9 + 10.1 - 0.1 + + - 0.0 - 0.1 - 2.8 -12.5 - 0.0 + 5.9 -15.9 + 13.2 - 0.0 +23.0 - 6.4 + 2.0 -15.4 + 3.2 2.5 3.4 2.9 Employment and Payrolls in Pennsylvania COMMERCIAL LOANS REPORTING MEMBER BANKS PHILA. FED. RES. DISTRICT MILLIONS (All figures are rounded from original data) Manufacturing Indexes Employment* (Indexes are percentages of the 1923-25 average taken as 100. Total and group in dexes are weighted propor tionately.) All manufacturing...... 1939 JAN FEB MAR APR. MAY JUNE JULY AUG SEPT OCT NOV DEC. REPORTING MEMBER BANKS MILLIONS PHILADELPHIA FEDERAL RESERVE DISTRICT Iron, steel and prods......... Non-fer. metal prods........ Transportation equip.. . . Textiles and clothing. . . . Textiles........................... Clothing.......................... Food products.................... Stone, clay and glass........ Lumber products.............. Chemicals and prods........ Leather and products.... Paper and printing........... Printing............................... Others: Cigars and tobacco.. . . Rubber tires, goods.... Musical instruments.. Employee hours! Payrolls * Per cent Per cent July change from July change from 1940 1940 index June July index June July 1940 1939 1940 1939 87 84 127 61 84 78 no 104 77 63 94 +2 + 7 + 3 +22 + 1 + 14 + 1 + 11 +2 - 9 + 2 -11 +2 - 6 83 106 158 64 74 69 + 9 + 0 + 13 - 6 +» - 4 79 59 107 87 + 3 -0 - 4 -3 + 17 58 91 -6 66 -2 -0 +1 0 +3 -0 +5 86 97 87 -2 -2 64 80 65 100 111 100 91 +i * Figures from 2,419 plants. July 1940— per cent change from June July 1940 1939 +2 +2 -0 +2 +i + 20 + 2 + 41 +2 + 27 + 1 + 18 +3 - 9 +3 -10 +4 - 4 -3 + 2 +2 + 22 +4 + 12 + 0 + 21 +7 + 2 -4 + 4 -5 ~ 1 -3 + 23 + 39 + 23 + 29 + 3 -12 + 2 -12 + 5 -14 -5 - 1 + 3 + 24 + 2 + 14 +0 + 28 +7 -10 -3 + 5 -4 - 0 + 2 - 8 + 30 -4 -2 -3 + 3 - 8 +26 f Figures from 2,180 plants. 1700 DEPOSITS General Index Numbers Covering twelve branches of trade and industry 1300 19 3 8 19 3 9 19 4 0 Percentage change—July 1940 from July 1939 City areas* Manufacturing Employ ment Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre........ Williamsport........ Wilmington.......... York....................... Wage payments Building permits (value) Debits + 13 + 18 + 14 + 33 - 1 + 3 - 2 - 9 + 9 — 5 + 2 + 12 + 9 +23 +34 + 28 +47 - 1 + 9 + 1 - 4 + 17 - 3 + 3 + 20 + 18 + 234 + 32 + 121 + 115 - 51 + 57 +626 - 16 — 5 + 54 + 20 - 91 - 9 + 6 + 5 + 9 + 25 + 9 + 5 - 1 + 6 + 29 + 15 + 15 + 7 + 16 + 1 + 3 + 15 + 23 + 3 + 7 + 7 + 7 + 5 + 8 (weighted)... Manufacturing............................. Anthracite mining....................... Bituminous coal mining............ Building and construction........ Quarrying and non-met. mining Crude petroleum producing. . . Public utilities.............................. Retail trade................................... Wholesale trade........................... Hotels.............................................. Laundries....................................... Dyeing and cleaning.................. 111 June 1940 -0 +2 +1 +2 135 67 104 56 113 137 99 +i 107 -1 +0 +2 -8 -0 -2 0 101 -7 101 117 101 Payrolls Per cent change from Per cent change from July 1940 index July 1939 June 1940 + o + 1 159 205 62 + 6 + 13 + 14 + 1 + 6 + 2 + 4 + 4 + 2 - 3 + 6 - 1 July 1939 + 17 + 20 +44 + 33 -10 200 + 5 + 2 - 4 + 2 + o - 7 + o - 5 - 6 -18 80 219 167 110 123 124 115 135 121 + 15 + 9 + 4 + 6 + 6 + o + 3 - 0 trade sales + + + + + + + — + 2 0 5 1 2 2 2 1 5 0 1 3 6 + + + + + + + 2 6 2 2 3 1 3 3 5 4 3 2 5 + 121 + 56 + 123 - 42 - 41 - 5 + 115 + 53 - 70 - 22 + 59 - 57 - 41 + + + + + - INDUSTRIAL EMPLOYMENT AND PAYROLLS PENNSYLVANIA 12 BRANCHES OF TRADE AND INDUSTRY PERCENT 193 2AVG =100 200 PAYROLL N IQO + 5 July 1940 from June 1940 Allentown............. Altoona.................. Harrisburg............ Johnstown............ Lancaster.............. Philadelphia......... Reading................. Scranton................ Trenton................. Wilkes-Barre........ Williamsport........ Wilmington.......... Y ork....................... July 1940 index General index EXCESS RESERVES (PHILADELPHIA BANKs) 19 3 7 Employment (Indexes are percentages of the 1932 average taken as 100. In dividual indexes are combined proportionately into general in dex number.) LOANS AND INVESTMENTS 7 i/ •4 160 A. | : * » 9 -33 -26 -26 -27 1 -21 i -35 -28 -26 -35 -31 IOO -34 -32 i ■ ■ J 00 6 3 8 2 5 + 3 + 5 -15 + 3 i 140 * Ls •* ' rJ *'\r \ • 120 VO 1934 — EMPL OVMENT 1935 1936 1937 1938 1939 1940 * Area not restricted to the corporate limits of cities given here. Page Seven OUTPUT OF MANUFACTURES PHILADELPHIA FEDERAL RESERVE DISTRICT adjust to ro« 3t*aow«L variationnmiwe.t Index numbers of individual lines of trade and manufactures Philadelphia Federal Reserve District LOCOMOTIVES AND CARS Index numbers: percentages of the 1923-1925 average as 100 Adjusted for seasonal variation Adjusted indexes allow for the usual seasonal change in activity. Not adjusted Per cent change Unadjusted indexes reflect merely the actual change which may or may not July May June July be typical. 1939 1940 1940 1940 July 1940 fre m Month Year ago ago 1940 from 7 mos. 1939 July May June July 1U3!I 1940 1940 1940 yA Retail trade Sales Total of all stores........................... 77 r Department................................. 67 Men's apparel............................. 65 r Women's apparel....................... 96 r Shoe............................................... 82 Credit............................................. 94 81 74 74 93 81 94 84 75 81 95 95 97 79 54 98 72 107 77 52 96 r 70 106 79p 73 70 95 77 92p - 6 - 3 -14 + 0 -19 — 5 + + + _ 78p 52 + + + - + 5 + 2 3 8 8 1 6 2 + + + 2 4 69 84 74 71 92 105 104 67 45 75 59 91 — + 3 4 4 4 54 46 50 r 56 79 54 98 76 103 68 84 73 93 92 72 49 83 67 97 WOOLENS AND WORSTEDS 55p 50 54 55 64 67p 7 Op 46 79 61 97p 86 112 Stocks of goods 75 51 96 68 99 102 70 106p 2 o 5 + 3 + 7 0 0 Rate of stock turnover + 2* 4.08 4.17 Wholesale trade Sales - 7* - 7* - 5* + 1* -13* — 8* _ 4* - 7* — 10* - 5* + 31* + 7* + 4* + 1* + 1* + 20* 0* + 15* + 24* + 20* LUMBER PRODUCTS Stocks of goods + + Output of manufactures Pig iron.................................................. Steel....................................................... Iron castings........................................ Steel castings....................................... Electrical apparatus.......................... Motor vehicles..................................... Automobile parts and bodies.......... Locomotives and cars........................ Shipbuilding......................................... Silk manufactures............................... Woolen and worsteds........................ Cotton products.................................. Carpets and rugs................................. Hosiery.................................................. Underwear............................................ Cement.................................................. Brick...................................................... Lumber and 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................................ 1* 3* 6* 0* 0* 2* 6* + 13* PAPER AND WOOD PULP • 44 66 r 56 65 74 15 68 20 371 74 58 53 104 109 172 63 36 24 72 76 70 80 112 12 74 36 478 69 53 41 92 76 127 69 39 30 110 66 105 60 78 113 80 93 108 111 r 99 95 78 83 80 172 152 75 90 73 89 155 102 122 82 85 73 93 106r 13 69 32 529 66 r 50 r 43 74 78 126 57 45r 27 104 51 81 96 83 91 126 91 94 84 164 135 85 98 69 126 + 4 + 15 - 6 + 35 101 - 5 17 + 36 70 + 2 32 + 3 553 + 4 61 - 7 53 + 6 44 + 4 72 - 2 + 25 97 148 + 18 53p - 8 51 + 15 25 - 7 - 1* 103 - 1 86 +70 84p + 3 - 5 91 85 + 2 89 - 2 + 7 135 94 p + 4 + 6 99 93 + 10 157 p - 4 + 4 140 * Computed from data unadjusted for seasonal variation. 75 +95 + 86 40 80 + 49 + 38 60 73 + 22 + 39 54 84 + 94 + 28 58 +35 + 39 . 78 103 16 15 + 11 _ 11 78 + 2 + 18 66 20 35 +66 + 110 +49 + 43 360 493 67 -18 — 14 73 - 9 — 8 55 r 50 1 46 40 -17 + 10 95 89 -31 76 90 -11 — 17 -14 — 3 142 129 78 -16 + 2 73 41 + 14 + 29 34 28 + 7 + 8 26 0* 93 90 97 105 - 6 + 3 74 +29 — 2 68 59 + 12 + 14 61 98 110 + i + 7 80 + 17 + 12 70 94 - 0 + 2 86 -13 — 12 144 98 -16 — 4 98 90 + 27 + 28 77 96 +n + 6 78 85 - 9 + 4 173 152 +37 + 39 100 126 p—Preliminary. 78 87 72 97 106 r 15 69 32 524 62 48 40 71 76 126 68 47 r 28 r 92 98 54 58 103 82 90 79 89 225 66 112 200 106 17 67 32 536 59 50 39 67 80 123 62p 49 28 92 91 GOAT AND KID LEATHER 88 PETROLEUM REFINING 58 p 99 82 8b 120 125 i 92 83p 94 97 86 \rn 86 165 158p 135 137 r—Revised. 193© Page Eight 1937 1939 1940
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