The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
MONTHLY REVIEW of Credit and Business Conditions S e c o n d F e d e r a l R e s e r v e D is t r i c t F ed era l E eserve B an k, N ew Y o rk Money Market in January raised by “ new E a r ly in January, the President presented to Congress the Federal budget estimates fo r the fiscal year begin ning Ju ly 1, 1943 and ending June 30, 1944, together with revised estimates fo r the current fiscal year ending June 30 next. Total expenditures within the regular budget fo r 1943-44 are estimated at $104,000,000,000, as compared with the current approxim ately fiscal year, and $80,000,000 ,000 actual during expenditures of $32,500,000,000 during the year which ended June 30, 1942. The President also indicated that about $4,800,- 000,000 would be required fo r Government corporations and agencies during the coming fiscal year, of which $1,800,000,000 would be fo r retirement of their obliga tion s; consequently, the amount o f new money to be raised between the first of Ju ly, 1943 and the end of June, 1944 is estimated to be about $107,000,000,000. W a r expenditures, both within the budget proper and by Government corporations, are expected to aggregate $100,000 ,00 0,00 0 fo r the 1943-44 fiscal year. 8Yz This is billion dollars a month, which compares with recent m onthly expenditures of approxim ately $6,000,000,000. Rough estimates of the gross national product (that is, the aggregate value o f the co u n try ’s production o f goods and services, without deduction o f allowances fo r depre ciation and depletion) run around $190,000 ,00 0,00 0 for the coming fiscal year. m on ey” borrowing to the would 1943 be about $74,000,000,000, as compared with $61,000,000,000 dur ing the current fiscal year, and $22,000,000 ,000 during 1941-42. Proposed additional taxation, however, would have the effect of reducing the necessary amount for bor rowing during the coming fiscal year. In his message to Congress, the President expressed the belief that not less than $16,000,000,000 o f additional funds, through taxation, savings, or both, should be sought during the 1943-44 fiscal year. On June 30, 1943, at the end of the current fiscal year, the Federal approxim ately debt, direct and guaranteed, $138,000,000,000. w ill be This compares with $112,500,000,000 at the end of December, 1942. O f the in dicated $25,500,000,000 rise in the direct and guaranteed debt during the first h alf o f the current calendar year (the second h alf of the 1942-43 fiscal y e a r ), a relatively small part— about $1,500,000,000— presum ably will take the form o f special issues to social security trust funds, leaving approxim ately $24,000,000 ,000 to be borrowed from the public during the first h alf of 1943. amount, approxim ately $3,200,000,000 was O f this raised by borrowings in the period J anuary 1 to February 1 inclu sive: around $1,700,000,000 from net sales during Jan u ary of W a r and Savings bonds and T ax Savings notes; (In billions of dollars) I t would thus appear that more Fiscal years ended June 30 than h alf of the aggregate national production m ay be diverted 1, F ebruary prosecution of the war during the Actual Estimates fiscal year. 1940 1941 1942 1943 1944 Total war expenditures*................................ Other expenditures!....................................... 2 7 7 7 28 6 77 7 100 7 A side from the prospect of Total expenditures................................. 9 14 34 84 107 a continued rise in the national income, which w ill swell Budget receipts (net)..................................... Borrowing from trust accounts...................... Borrowing from the public (net)................... 5 1 2 8 1 5 13 2 19 23 3 58 33 4 70 Total financing....................................... 8 14 34 84 107 Public debt, end of year (direct and guaranteed)............................................. 48 55 77 138 212 The amount to be raised by borrowing next year is not so great as m ight be expected on the basis of the indicated increase in expenditures. tax receipts, the 1943-44 fiscal year w ill be the first one to reflect the fu ll influence o f tax increases embraced in the Revenue A c t o f 1942. I t is estimated that net re ceipts, on the basis of present tax laws, w ill be $33,000,000,000, which is about $ 1 0,000,000 ,000 greater than in 1942-43, and $20,000,000,000 greater than in 1941-42. I f no new taxes are levied the indicated amount to be * Includes war expenditures of Government corporations. f Includes net outlays, aside from war expenditures, of Government corporations and trust accounts, but excludes redemptions of Government corporation obligations held by the public ($1.8 billion in 1942, $1.2 billion in 1943, and $1.8 billion in 1944). MONTHLY REVIEW , FEBRUARY 1, 1943 10 $800 ,000 ,00 0 net from the sale o f discount bills on Jan u ary 6, 13, 20, and 2 7 ; and approxim ately $620,000,000 net from certificate of indebtedness financing February 1, involving the sale of $2,211,000,000 one-year % per cent certificates and the redemption of a $1,588,000,000 m aturing issue. Substantial funds accumulated from the V ictory Loan Drive in December were, of course, available fo r helping to meet Government expenditures during January. Treasury deposits with the Federal Reserve Banks were at an unusually high level at the close of December and W a r Loan account deposits at commercial banks— accumulated credits from “ book credit’ ’ paym ents fo r Government securities sold— were up to $8,166,000,000. Additional credits to W a r Loan accounts during the first few days of January raised the total to $8,206,000,000 on the 6th. B eginning January 7, and continuing through January 23, the Government availed itself of these deposits by calls for repaym ent aggregating $2,198,000,000. Over the January 7-23 period, calls were issued for each business day of the week with the exception of W ednesdays, when receipts from the sale of Treasury bills took care of the net excess of disburse ments over receipts. In this manner, wide fluctuations in Treasury deposits with the Reserve Banks were avoided and aggregate cash receipts were maintained in relatively close balance, from day to day, with aggre gate cash expenditures. Toward the end o f the month, Treasury deposits with the Reserve Banks were drawn down in anticipation of net cash receipts from certificate of indebtedness financing on February 1. M e m b e r B a n k R e s e r v e P o s it io n s Excess reserves of all member banks, which had tem porarily dropped to $1,660,000,000 on December 30, rose to $2,330,000,000 on January 6, and thereafter tended to decline. On January 27 they amounted to $2,090,000,000. The recovery in excess reserves during the statement week ended January 6 resulted principally from a drawing down o f Treasury deposits with the Federal Reserve Banks from the unusually high level of $811,000,000 on December 30. The decline between January 6 and 27 was in considerable measure the result of banks “ putting their excess reserves to w o rk ,” by actively bidding fo r the weekly issues of Treasury bills or reacquiring bills previously sold to the Reserve Banks under repurchase option. A ggregate tenders fo r Treas u ry bills ran between $1,000,000,000 and $1,300,000,000 each week during January. W eek ly offerings o f bills were stepped up from $600,000,000 to $700,000,000 beginning January 20, re sulting in an increase in the outstanding su pply of $ 800,000,000 fo r the month. Nevertheless, Federal Reserve B ank holdings were reduced from $854,000,000 on January 6 to $611 ,000 ,00 0 on January 27, indicating an aggregate market absorption o f Treasury bills of over $1,000,000,000. Dem and fo r Government securities during January was not restricted to bills, nor was the source of de m and lim ited to banks. Despite the sale of nearly $13,000,000 ,000 o f Government obligations in the D e cember V ictory Loan D rive, including more than $10,000,000 ,000 of the types which are traded in the open market, there was a persistent and strong demand fo r Treasury bonds, notes, and certificates of indebted ness, b y banks and other investors alike. Certificates of indebtedness and bonds which had been acquired by dealers during the December cam paign fo r later sale were rapidly absorbed. The shrinkage in the “ floating su p p ly ” o f Government securities m ay be measured, in a very rough way, by the reduction in outstanding loans to brokers and dealers in securities of the weekly reporting member banks in N ew Y o rk City. Such loans, which ran up from $333 ,000 ,00 0 on Novem ber 25 to $952,000,000 on December 23, dropped to $461 ,000 ,00 0 January 13. Inasmuch as there w ill not be another m ajor war financing drive until A p r il, keen interest was displayed in the $2,000,000,000 certificate o f indebtedness offering, form ally made January 21. W ith the heavy over-sub scription to this issue, and the allotment basis o f only 14 per cent on the larger bank subscriptions, there was an added stimulus to the demand fo r outstanding G ov ernment securities. To help meet the demand, the Federal Reserve Banks, between January 6 and Jan u ary 27 reduced their holdings o f Government bonds by $75,000,000 and Treasury notes by $ 2 4 ,0 0 0 ,0 0 0 ; certifi cates o f indebtedness holdings, however, were enlarged to the extent of $ 38,000,000 over the three weeks’ period. Taking account of the drop in their Treasury bill hold ings, discussed in a foregoing paragraph, the total of Government securities in Federal Reserve Bank port folios declined $303,000,000 between January 6 and 27. In N ew Y o rk C ity, excess reserves o f the central re serve N ew Y o rk C ity banks rose from $235,000,000 on December 30 to $500 ,000 ,00 0 on January 6, and during the follow ing three weeks dropped back to $210,000,000. The weekly reporting member banks in New Y o rk C ity enlarged their holdings of Treasury bills by $179,000,000, to an aggregate of $2,079,000,000, over the three weeks ended January 27. New Y o rk banks lost reserve funds, on balance, through Treasury transactions, in continua tion of the general tendency which prevailed last year. Reflecting the high proportion of W a r Loan account deposits held here, repayments o f such deposits b y New Y o rk institutions during January, in response to Treas ury calls, reached an aggregate of $1,115,000,000. These and other cash receipts by the Treasury from the New Y o rk market were greater than the offsetting flow o f Government checks deposited in New Y ork. On the other hand, there was a substantial inflow of commercial and financial fu n ds into N ew Y o rk from other parts o f the country during the month. Money Rates in New York Jan. 31, 1942 Dec. 31, 1942 Jan. 30, 1943 Stock Exchange call loans..................... Stock Exchange 90 day loans................ Prime commercial paper— 4 to 6 months Bills—90 day unindorsed....................... Average yield on taxable Treasury notes Average yield on tax exempt Treasury bonds (not callable within 12 years). . Average yield on taxable Treasury bonds (not callable within 12 years)............ Average rate on latest Treasury, bill sale 91 day issue......................... . Reserve Bank discount rates: On advances to member banks se cured by Government obligations callable or maturing in one year or less............................................... On other advances to member banks secured by Government obliga tions, and on rediscounts............... Reserve Bank buying rate for 90 day indorsed bills....................................... * Nominal 1 1 *1X Vs A 7 *1H 1 A5 -U A 7 Vs-H A 7 0.94 1.39 1.26 2.10 2.08 2.06 2.37 2.34 2.32 0.231 0.365 0.370 K H 1 1 K 1 H H FEDERAL RESERVE BAN K OF N EW YO R K W a r F in a n c in g In view of the large volume of funds accumulated from the V ictory Loan D rive in December, no m ajor financing was undertaken by the Treasury during January. N et public borrowing totaled only about $2,500,000,000 repre senting the sale o f W a r and Savings bonds, T ax Savings notes, and net Treasury bill issues. In addition the Treasury sold fo r delivery on February 1, $2,211,000,000 of % Per cent certificates of indebtedness, providing $623 ,000 ,00 0 of “ new m o n ey ” as well as funds fo r the redemption of $1,588,000,000 m aturing certificates. Sales o f W a r and Savings bonds reached a record peak estimated at abou+ $1,300,000,000 fo r the month, surpass ing the previous high marks of $1,061,000,000 in January, 1942 and $1,014,000,000 in December, 1942. In part, the new high was accounted for by purchases of Series F and G bonds up to the $100 ,000 lim it fo r any one calendar year. (T he lim it on such purchases in January, 1942 was $50,0 0 0 .) Sales of Series E bonds, however, m ay also have exceeded the previous records of $667,000,000 in January, 1942 and $726,000,000 in December, 1942. Total sales during the calendar year 1942 amounted to $5,990,000,000 Series E bonds and $3,168,000,000 Series F and G bonds. In the Second Federal Reserve D istrict, sales of W a r and Savings bonds during January by agencies other than post offices were $200,000,000, an amount second only to the $254 ,000 ,00 0 sold in January a year ago and a substantial increase over the sales of $161,000,000 in December. Sales of Series E bonds, amounting to $112,000,000, exceeded the $94,000,000 sold in December, but fell short of the record $135,000,000 in January, 1942. Second D istrict sales during the year 1942 by agencies other than post offices totaled $880,000,000 for Series E bonds and $806,000,000 fo r Series F and G bonds combined. Sales of T ax Savings notes, which had reached a record high o f $1,312,000,000 in the December V ictory Loan D rive, are estimated at about $500,000,000 for the month o f January. Redemptions approxim ated $100,000,000. D u rin g the four months starting in September, when the new series tax notes were first placed on sale, a total of $3,944,000,000 was sold. A t the end of December, tax notes outstanding aggregated $6,384,000,000. A bo u t $800 ,000 ,00 0 in “ new m on ey” was raised from the sale o f Treasury bills during January, $200,000,000 from each of the fou r weekly offerings. W eek ly bill offer ings were increased from $600,000,000 to $700,000,000 on January 20, when maturities increased from $400,000,000 to $500,000,000. On January 21, the Treasury announced the offering o f approxim ately $2,000,000,000 of % per cent one year certificates o f indebtedness dated F ebruary 1, 1943 to provide funds fo r the redemption o f $1,588,000,000 certificates m aturing on that date. Subscriptions to the new issue totaled $6,402,000,000 as compared with $3,105,000,000 on a, sim ilar certificate refunding operation in November. A llotm ents in fu ll, totaling $1,163,000,000, were made to all subscribers other than banks which accept demand deposits. A llotm ents in fu ll, totaling $309,000,000, were also made on bank subscriptions of $100,000 or less. The remaining commercial bank sub scriptions were allotted on a 14 per cent basis. O f the total allotments, 49 per cent were taken in the Second Federal Reserve District. 11 Member Bank Credit Between December 23, 1942 and January 20, 1943 total loans and investments of the weekly reporting member banks in New Y o rk C ity declined $69,000,000. In contrast, in the 100 cities outside New Y o rk , report ing member banks added $973,000,000 to their earning assets. In New Y o rk C ity there was a contraction of $545,000,000 in the volume o f loans to brokers, dealers, and others fo r the purpose of carrying securities; most o f this fall was due to repaym ent of funds borrowed during December to finance purchases o f Government securities in the T rea su ry ’s V ictory Loan D rive of that month. There was also a further decline of $109,000,000 in commercial, industrial, afid agricultural loans out stan din g; in all, loans were off $701,000,000. In addi tion, these banks lightened their holdings o f Treasury bonds by $100,000,000 over the fou r weeks’ period, and sold $74,000,000 net of Treasury notes. H owever, hold ings o f certificates o f indebtedness were enlarged by $698,000,000, prim arily reflecting purchases o f the D e cember issue fo r which the banks made paym ent on December 28. Treasury bill holdings o f the N ew Y o rk banks were reduced $62,000,000 during the week ended December 30 but were increased $159,000,000 during the three follow ing weeks. Outside New Y o rk C ity, where bank loans were em ployed to a much smaller extent to finance purchases o f Government securities in December, security loans o f the weekly reporting member banks in 100 cities were off only $44,000,000. Commercial, industrial, and agri cultural loans declined by $100,000,000, and total loans fell by $260,000,000. On the other hand, the reporting banks outside New Y o rk made substantial purchases o f Government securities. Their holdings o f Treasury bonds rose $127,000,000, of Treasury bills $238,000,000, and of certificates o f indebtedness $866,000,000. D u rin g the first three weeks o f January, as the Treas u ry spent funds it had received from the sale o f new issues of Government securities in December, more than h alf o f the drop in adjusted demand deposits that had occurred during that month was recovered. F o r the member banks in 100 cities outside New Y o r k C ity, all o f the loss was made up, and adjusted demand deposits reached a new peak o f $18,311,000 ,000 on January 20, some $72,000,000 above Novem ber 25, 1942. In New Y o rk , however, adjusted demand deposits recovered only part of the December loss; by January 20 they were still $824,000,000 short o f the Novem ber 25 level. Gov ernment deposits with the reporting member banks as a whole were drawn down, through calls on the W a r Loan deposits, fio m $6,756,000,000 on December 30 to $5,360,000,000 on January 20. Ration Banking The widening system o f wartime rationing is now placing upon the commercial banks a new task, albeit in principle one logically related to their role in our norm al distributive mechanism. Since late October an experimental test in “ ration b an kin g” has been in operation in the A lbany-Troy-Schenectady area of New Y o rk State. The results o f this test, designed as a laboratory model, indicated that the plan would be 12 M ONTHLY REVIEW, FEBRUARY 1, 1943 feasible for nation-wide use. On January 6 explanatory letters went out from the Office of Price A dm inistration to all banks in the U nited States, to prepare them to institute, January 27, a plan to clear ration coupons through banking channels on a country-wide basis. The transfer of hundreds of millions or billions o f ration coupons (or stam ps) from stage to stage through the channels of distribution is necessarily a complicated process. F o r this task, the banking system, with its experience and facilities for handling and clearing cur rency and checks, appeared uniquely adapted. Under the ration banking plan, individual consumers w ill not have their own ration coupon bank accounts; fo r that matter, neither will individual gasoline stations nor m any small food retailers. Coupons will continue to be distributed to consumers, as in the past, by the local W a r Rationing Boards. Consumers w ill continue to turn over their coupons to retail merchants, in the usual w ay, in m aking purchases of rationed commodities. Ration banking comes into p lay in distribution and processing channels, as a machinery fo r gearing the wholesale trade in rationed commodities to the retail trade. A t the start, on January 27, only sugar, coffee, and gasoline are being included in the program . A s ration coupons are received by larger retailers or wholesalers the latter w ill deposit them in special ration coupon bank accounts. A merchant w ill open his special coupon account or accounts in the bank which carries his regu lar checking account. A dealer in food, fo r example, will have a ration coupon account fo r sugar, stated in pounds, and another in coffee, again stated in pounds. Special deposit slips and check books w ill be provided so that a dealer, in replenishing his stock o f a rationed item, can transfer to his supplier, sim ply by drawing a check, the amount of ration coupons which he has received from his customers. Claims against the ration coupons deposited in the first instance at a bank m ay thus be transferred from stage to stage through the distribution and processing channels without subsequent physical rehandling o f the coupons. Amalgamation of Sterling Accounts On January 26 the B ritish Treasury announced that arrangements had been completed to sim plify the m an agement of sterling accounts held by residents o f the U nited States. I t w ill be recalled that since J u ly, 1940 there have been three principal types o f such sterling accounts, nam ely, U nited States registered, U nited States sterling area, and “ o ld ” ( “ fr e e ” ) accounts. A s of Feb ruary 2, the latter two w ill be converted into United States registered accounts. This will have the effect o f extending to sterling area and “ o ld ” ( “ fr e e ” ) accounts the guarantee of convertibility into dollars at the rate o f $ 4 .0 2 % , which has heretofore applied only to registered accounts. B y virtue o f this amalga mation, holders of the form er accounts are enabled, after F ebruary 2, to use their sterling funds fo r the paym ent o f sterling area exports which heretofore required registered sterling. In connection with this conversion and amalgamation, which it is expected w ill result in the elimination of New Y o rk quotations fo r “ fr e e ” sterling, registered accounts m ay be opened in the names of individuals, as well as banks and corporations to which they had been lim ited in the past. New Security Issues D u rin g January, domestic corporate and m unicipal new security financing amounted to about $61,000,000 as compared with $93,000,000 in the previous month. In addition, the Dom inion o f Canada provided the first market offering of foreign Government obligations in recent years with the sale of $90,000,000 refunding bonds. Corporate issues amounted to only $9,000,000, the lowest for any month in recent years. M unicipal awards, which aggregated about $52,000,000, included an issue of $37,013,000 New Y o r k C ity H ousing A u th o rity 2 to 4 % per cent refunding bonds m aturing from 1944 to 1981, awarded at a net interest cost o f 2.13 per cent and reoffered to yield from 0.70 to 2.14 per cent. The Dom inion of Canada financing consisted o f three $30,000,000 issues: 2 % per cent bonds due in 1948, priced at p a r ; 3 per cent bonds due in 1953, priced at 1 0 0 % to yield 2.94 per cen t; and 3 per cent bonds due in 1958, priced at 9 8 % to yield 3.13 per cent. A t the close of the month, market quotations on the three issues had advanced to a point where the yields were 2.23, 2.81, and 2.95 per cent, respectively, at the bid prices. Security Markets The Government security market displayed consider able strength during January. This strength was due to a variety of factors including the release o f uninvested funds which had been held as cash over the year end fo r statement purposes, and the success o f the December V ictory Loan Drive. Interest in intermediate and long term Treasury bonds was most apparent during the first week of January and near the end o f the month, while notes of longer maturities, certificates of indebtedness, and discount bills were in active demand throughout the month. The average yield on the taxable 3 to 5 year Treasury notes declined 0.13 to 1.26 per cent between December 31 and January 30. On Jan uary 30 the 1% and -2 % per cent Treasury bonds issued in December were selling at premiums o f about % point. The new % per cent certificates o f indebtedness to be issued on F ebruary 1 were quoted on a yield basis of 0.77 at the close o f the month. 1938 1939 1940 1941 1942 1943 Movement of Stock Prices (Standard and Poor’s 90 stock index; 1926=100 per cent) FEDERAL RESERVE B AN K OF NEW YO R K Prices o f municipal bonds held steady from the m iddle o f December to the middle o f January, follow ing the downward reaction o f early December. D u rin g the second h alf o f January a slight recovery took place, as is indicated by a decline o f 0.02 to 2.26 per cent between January 13 and 27 in the average yield on prim e m unici pal bonds computed by Standard and P o o r ’s Corpora tion. A ccom panying a considerable increase in market activity, domestic corporation bond prices continued to rise in January. The principal strength was shown among the medium and lower grade railroad issues, which gained approxim ately 4 points on the average, accord ing to M o o d y ’s Investors Service index o f B aa railroad bonds. Stock prices again moved up in January, extending the general advance which got under w ay last M ay. In this nine m onth period, the general level o f stock prices rose nearly 40 per cent, according to Standard and P o o r’s index o f 90 stocks. A t the end of January the index was about 7 per cent higher than a month earlier and at the highest point since September, 1941. Wartime Increases in Currency Circulation— Four Major Countries The adjoining chart compares the increases since early in 1939 of currency in circulation in the U nited States, Great B ritain, Canada, and Germ any. A sem i-logarith mic scale is used to facilitate comparison of the r a te s of increase. Currency in circulation has risen sharply in all four countries since the beginning of the war— in general, more sharply than bank deposits. These increases stem directly from the higher levels o f business activity and national income arising out of the war. The expansion in currency circulation frequently has been more rapid than the rise in the national income. This tendency is explainable in large measure by the fact that income paym ents to wage earners, who predom inantly use cash rather than cheeks, have risen at a considerably faster rate than the total o f income paym ents. B eyond that, there appears to have been in a num ber o f countries an increased preference since the beginning o f the war fo r currency as compared with bank deposits. A number of reasons have been cited fo r this shift. In m any coun tries, numerous individuals apparently have been in duced to hold a larger proportion o f their incomes in the form o f cash because o f such factors as the fear o f unforeseeable emergencies arising out o f wartime condi tions, m igration from one area to another, disruption o f the normal channels o f trade, reduction in banking facilities in some areas, and lowered interest rates on deposits. Other factors leading to an increased propor tion o f cash to deposits m ay have been “ black m arket” transactions, and efforts b y some persons to conceal income and thus to evade taxation. In the case o f Germ any a minor factor has been the extension o f the use of German currency to annexed territories, such as the Sudetenland, D anzig, M em el, Luxem bourg, and A lsace-Lorraine. The chart reveals a rather striking parallelism in the rates o f change o f m onetary circulation in the fou r MILLIONS 13 MILLIONS Currency in Circulation in Four Countries (Plotted on ratio scale to show proportionate rates of increase) countries, particularly after the end o f 1940, indicating the basic underlying sim ilarity o f forces at work. The greater proportionate rise in the case o f Canada, par ticularly from the beginning o f the war to the end o f 1940, corresponds to the somewhat more rapid rate of expansion o f national income during this period in Canada than in the other three countries. The sharp rise in B ritish currency circulation from M a y to A u gu st, 1940, apparently reflected note hoard ing induced by the collapse of France. This was also the period o f the sharpest rise in Canadian currency circulation. I t is o f interest to note that the rate o f expansion o f German circulation was considerably less in 1940 than in 1939, 1941, and 1942. This m ay have been due in part to the belief which is said to have pre vailed among sections o f the German population, after the fa ll o f France, that an early peace was in pro sp ect; such a belief would have tended to encourage bank deposits and reduce note hoarding. In the main, how ever, the smallness o f the 1940 increase in German currency circulation was probably due to the fact that the German invasion armies, which had been paid in reichsmarks while on German soil, were paid in a special currency (Reichskreditkassenscheine) in the occupied territories; this special currency is not included in the statistics o f German currency circulation. The curve fo r the U nited States reveals a remarkably smooth u p ward trend throughout the entire period, although the rate o f growth increased somewhat in 1942 as a result o f the greatly accelerated mobilization o f the A m erican economy after P earl H arbor. Building D u rin g the year 1942 the total volume o f construction contracts awarded in 37 E astern States was the largest on the records o f the F . W . D odge Corporation. The y e a r ’s total exceeded 1941 b y roughly one third and topped the previous peak o f 1928 by a substantial m argin. The tremendous demands o f the w ar con struction program much more than offset the sharp curtailment o f private construction which became neces- 14 M ONTHLY REVIEW, FEBRUARY 1, 1943 BILLIONS OF DOLLARS 10 500 ROCHEESTER B IN G H A M T O N - E N D I C O T T J 'O H N S O IM C I T Y 300 300 200 200 PAYROL 150 PA'r'R O L L S ^. 1 50 ■''EMPLOY'MENT 100 LOYMENT AI 100 70 1919’2 0 Value of Construction Contract Awards in New York and Northern New Jersey and in All of the 37 States Covered in the Reports of F. W. Dodge Corporation sary during 1942 in order to conserve critical materials. D u rin g the current year the volume of war plant con struction is expected to drop sharply, releasing a large su pply of materials and labor which can be used effec tively in putting new plants into operation. A s the accom panying chart indicates, construction contract awards in New Y o rk and Northern N ew Jersey during 1942 ran at about the same level as in 1941, and accounted fo r slightly less than one tenth of total con tract awards in the 37 Eastern States. The same ratio also applies to the distribution of public construction awards during 1942. I t is clear that the reduced pro portion o f construction work in this area is but another aspect o f the fact that war production centers have been developed in other sections o f the country to a relatively greater extent than in the N ew Y o rk area. In the 1 9 3 0 ’s, the total volume of construction contract awards in New Y o rk and Northern N ew Jersey accounted for a little over one fifth of the total fo r the 37 States. D u rin g the 1 9 2 0 ’s, when building was exceptionally active in this region, the proportion was about one fourth of the 37 State total. 5 0 ...1 1 .1 1939 .. II ! 1940 .1. L....I.... 1941 1 1 1 1942 1 1 1 1939 I I I 1940 I I I 1941 1 1 I 1942 Factory Employment and Payrolls in Selected Industrial Areas in New York State, as Reported by New York State Department of Labor (1935-39 averages 100 per cent; data plotted on ratio scale to show proportionate changes) the industrial areas in the State, as m ay be seen from the accom panying chart. In the Buffalo and A lb a n y dis tricts, factory em ployment has roughly doubled and p a y rolls quadrupled since A u gu st, 1939. In U tica, where em ployment increased 59 per cent in the same period, payrolls were almost three and one-half times as great as in A u gu st, 1939. In general, m anufacturing em ploy ment and payrolls have expanded most rapidly in the “ h eavy” m anufacturing centers, where industrial capac ity could be easily converted to making war equipment. On the other hand, in centers where production o f non durable or semidurable consumer goods is of predom i nant importance— N ew Y o rk C ity and B ingham ton are examples— expansion in em ployment has been compara tively moderate, though increases in payrolls have fr e quently been very substantial. In Bingham ton, where em ployment has increased only 20 per cent over the war period, payrolls have more than doubled. E m ploym ent and payrolls in New Y o rk C ity, showing their usual wide seasonal fluctuations, were 29 and 84 per cent larger, respectively, in December, 1942 than when war broke out in E urope. Employment and Payrolls Production and Trade Factory em ployment in N ew Y o rk State increased 10 per cent during the course o f 1942, and factory payrolls increased 34 per cent over the year. A ccording to the State D epartm ent o f Labor, average weekly earnings in factories were $41.52 in December, 1942, as compared with $34.07 in December, 1941, and $26.23 in A u gu st, 1939. F ro m m id-Novem ber to m id-December, 1942, em ploym ent in m anufacturing industry in N ew Y o rk State expanded 1 % per cent, and payrolls 3 % per cent. E m ploym ent in war plants increased generally through out the State, more than compensating fo r a slight reduc tion in the working forces engaged in the m anufacture of food products, chemicals, apparel, and petroleum products. P ayrolls increased in all m ajor industrial groups except apparel and petroleum. The impact o f the war on m anufacturing em ployment and payrolls has varied considerably among certain of The 1943 war production program , while providing for a lean but sound and healthy civilian economy, antici pates munitions production double that of 1942, accord ing to a join t statement by the W a r Production B oard and the W a r and N a v y Departm ents. The program calls for about twice the number and fou r times the weight o f planes produced last year, more than twice the merchant ship tonnage, a considerable increase in the naval escort program , and more combat vessels.. P relim inary inform ation now at hand indicates that the high level of industrial activity reached late in 1942 was at least maintained during January. A lth ou gh steel production was tem porarily reduced somewhat during the early days o f the month, owing to interruptions caused by flood conditions in some producing areas, the operat ing rate subsequently recovered to the highest point since FEDERAL RESERVE BAN K OF NEW YO R K the end o f October, and fo r the month as a whole pro duction was probably about the same as in December. Electric power production appears to have continued near the record level reached in December, whereas some decline usually occurs between December and January. The daily output o f the bitum inous coal mines during the first h alf of January ran at a somewhat higher rate than in December, but the production of anthracite was curtailed owing to the strike affecting mines in the P enn sylvania fields. Production of crude petroleum in Jan u ary continued at about the same rate as in recent months. P r o d u c t io n and T rade in D ecem ber In December the seasonally adjusted index o f produc tion and trade computed at this bank declined to 123 per cent o f estimated long term trend, 2 points below the record figure fo r November, but 10 points above that fo r December, 1941. The decline in December was largely attributable to the failure o f retail trade to increase as much as in most other years from the level reached last November, when sales were enlarged by a considerable amount of early Christmas shopping. A fte r adjustm ents fo r seasonal variations, sales by department stores, chain store systems, and m ail order houses were all lower in December than in November. Productive activity advanced slightly fu rth er in D ec ember, although the various component groups o f the production index showed relatively m inor changes from the preceding month. A lth ou gh the production of war goods continued to mount, the index of output of pro ducers’ durable goods was little changed between Novem ber and December largely owing to an offsetting decline in nonresidential construction and a slight reduction in steel m ill operations. Electric power production, which generally reaches its yearly peak in December, showed more than the usual increase over November. The daily rate o f cotton consumption dropped a little below the high level maintained during the earlier months of the year. 15 Department Store Trade F o r the three weeks ended January 23, sales of the reporting department stores in this D istrict were about 6 per cent below the corresponding period last year. In January, 1942, however, sales were unusually active, as actual or threatened shortages of certain articles, together with the prospect of higher prices, resulted in a heavy buying wave that affected m any lines o f goods. On the basis o f the three weeks’ figures fo r January, 1943, it appears that the decline in sales from December to January was somewhat less than is usual between these two months. D u rin g December department store sales in this D is trict were 7 per cent higher than in December, 1941, and 4 per cent above December, 1929. The rise in sales between Novem ber and December, 1942, however, was somewhat smaller than in m any other years. F o r the year 1942, sales were 7 per cent higher than fo r the year 1941, compared with an increase o f 13 per cent between 1940 and 1941. Stocks on hand o f the reporting department stores in this D istrict, which started fallin g off in A u gu st, 1942 after a prolonged rise beginning in June, 1941, contin ued to decline rapidly through December 31, 1942. The index fo r December was only 12 per cent higher than in December, 1941. Figures received from a limited number of department stores in this D istrict indicate that at the end o f December outstanding orders for merchandise purchased by the stores, to be delivered to them at a later date, were 11 per cent below November, 1942, but were still 31 per cent higher than in December, 1941. Percentage changes from a year earlier Net Sales Department stores December, 1942 New York City....................................... Northern New Jersey............................. 1941 Dec. 1942 Oct. Nov. Dec. Indexes of Production and Trade* (100 == estimated long term trend) Index of Production and Trade............... 113 122 125p 123p Production.............................................. 118 131 134p 135p Producers’ goods— total.................... Producers’ durable goods.............. Producers’ nondurable goods........ 133 146 119 168 202 128 171p 206p 131p 171p 206p 131p Consumers’ goods—total.................. Consumers’ durable goods............ Consumers’ nondurable goods. . . . 101 74 no 86 37 103 88p 38p 105p 90p 39p 107p Durable goods—total........................ Nondurable goods—total.................. 124 114 154 113 157p 116p 157p 117p Primary distribution............................. Distribution to consumer..................... Miscellaneous services........................... 121 98 111 139 91 135 138p 93p 138p 136p 84p 139p 111 119 120 131 143 144 Westchester and Fairfield Counties. .. . Bridgeport........................................... Lower Hudson River Valley................. Poughkeepsie....................................... Upper Hudson River Valley.................. Central New York State....................... Mohawk River Valley....................... Northern New York State..................... Southern New York State..................... Binghamton......................................... Western New York State....................... Niagara Falls...................................... + 7 + 2 + 3 +11 +10 + 3 + 4 — 1 — 6 +10 +19 + 6 + 2 +12 +10 + 5 +10 +10 +26 +10 Stock on hand, Jan.through December 31, Dec., 1942 1942 +14 +13 +13 + 9 + 7 — 5 + 6 + 3 + 5 +12 +13 + 4 + 7 — 1 — 8 +11 +23 + 8 — 3 +10 + 7 +11 +12 +14 +35 + 9 + 5 + 6 +24 0 — +21 — + 5 + 7 0 + 2 All department stores................. + 7 + 7 +12 Apparel stores............................. +12 + 7 + 6 Indexes of Department Store Sales and Stocks, Second Federal Reserve District (1923-25 average = 100) Cost of Living, Bureau of Labor Statistics (100 = 1935-39 average).......................... 120 1941 1942 Wage Rates (100 = 1926 average)............................... Velocity of Demand Deposits* (100 = 1935-39 average) New York City......................................... Outside New York City........................... p Preliminary. U 93 60 81 * Adjusted for seasonal variation. 62 82 69 82 Dec. Oct. Nov. Dec. Sales (average daily), unadjusted................ Sales (average daily), seasonally adjusted.. 194 107 130 115 144 121 215 119 Stocks, unadjusted........................................ Stocks, seasonally adjusted.......................... 105 108 158 145 151 134 118 121 M ONTHLY REVIEW , FEBRUARY 1, 1943 16 L a b o r M a r k e ts a n d M ig r a tio n In an effort to promote more deliberate consideration o f local labor resources in the allocation o f war contracts, in early January the W a r M anpow er Commission again classified the industrial areas of the United States accord ing to the adequacy o f their labor supplies. A lthough the Commission acknowledged that factors other than the immediate availability o f labor m ight well be para mount in procurement policy, it advised, where possible, against renewal of old or allocation of new contracts to areas o f acute labor shortage, those classified in Group I. In the Group I I areas, where the labor market is currently in balance but unable to meet further demands upon it, the Commission recommended the renewal o f contracts not in excess of current volumes. In general, to ease the pressure on manpower resources in the various localities, the W a r M anpow er Commission asked that “ all possible effort should be made to renew contracts, place new con tracts and locate new production fa cilities” in areas of labor surplus, that is, centers classified in Group I V . I t is apparent from the classification o f Second D is trict industrial areas given below, that although the largest city in the D istrict is still an area o f labor surplus, most o f the im portant industrial centers have reached about as high a level o f employment as they can at present attain with the local labor supply. Group I Areas of aeute labor shortage: Connecticut— Bridgeport New Y ork — Buffalo Group I I Areas o f approximate balance of labor supply and dem and: Connecticut— Stam ford New Jersey— Morristown, Newark, Paterson, Jersey City, Perth Am boy, Long Branch New York— Albany, Elmira, Rochester, Utica Group I I I Areas where current balance o f labor market ia expected to last six m onths: Connecticut— N orwalk New York— Auburn, Batavia, Binghamton, Dunkirk, Jamestown, Kingston, Newburgh, Poughkeepsie, Sid ney, Syracuse, W atertown Group I Y Areas of labor surplus: New York— New York City, Yonkers, Central Long Island I t is generally true throughout the country that those cities which are currently short of labor are the same cities which received considerable additions to their work ing forces between 1940 and 1942. I n those years a sub stantial m igration occurred to industrial centers partici pating heavily in the production o f war materials and, to a lesser extent, to those communities near large m ili tary encampments. The movement originated, on the other hand, in communities where industry had proved less adaptable to w ar production. A lth ou gh large scale m igration is not a new phenome non in this country, considerable attention has been drawn to the m igration which occurred after the begin ning o f the defense program . The registration fo r sugar ration books in M ay, 1942, provided a count o f civilian population at that time, and a comparison with the census o f A p r il, 1940, yields a basis fo r appraising changes in population which occurred between the two dates. A lth ou gh it is estimated that civilian population in the country as a whole was virtu ally unchanged in the two years, the regional figures m ay reflect withdraw Is to the armed forces, as well as migration. F or the nation as a whole, population inoreases from 1940 to 1942 were reported in the Pacific. South A tlan tic and E ast N orth Central States. O f the New E n glan d .and M iddle A tlan tic States, only Rhode Island, Connecticut, and New Jersey have shown gains. The civilian popula tion o f Connecticut increased 67,000 or 3.9 p e r cent in the period, and that of New Jersey increased by 85,000 or 2.0 per cent, while New Y o rk State lost 506,000 or 3.8 per cent of its 1940 civilian population. The largest abso lute population gains were recorded by California with 303,000 and M ichigan with 312,000. The population of the D etroit area alone increased by 336,000 persons. In Second D istrict m etropolitan areas, listed below, population gains were registered only in Buffalo and B ridgeport. There occurred a net influx of about 31,000 persons into Bridgeport in the two y ea rs; in the same period, B u ffa lo ’s civilian population increased by 12,000 or 1.3 per cent. Labor shortages, however, have developed in both localities despite the inward migration. It would seem possible that some in-m igration of civilian workers occurred in the A lb an y area, but a definite outward movement from the Rochester, Syracuse, B ingham ton, and the New Y o rk City-N ortheastern New Jersey areas is indicated. There can be no doubt that there was a decided movement of civilian population from the U tica-Rom e area. A lth ou gh detailed inform a tion is lacking on the New Y o rk City-Northeastern New Jersey figures, in view of the high level of war produc tion in the New Jersey portion of the metropolitan area and the relatively less favorable condition o f m any of New Y o rk C it y ’s industries, it is probably true that most o f the 365,000 decline in civilian population occurred in New Y o rk C ity proper. W h ile areas o f labor surplus remain, it should be noted that the number of such areas has been steadily diminishing, and the amounts of unutilized labor re sources in them have been tending to contract. Difficul ties o f finding adequate help in the centers o f most intensive war activities operate two ways in reducing surplus labor resources in other areas, on the one hand through migration, and on the other hand through lead ing to the allocation o f additional prim ary contracts or subcontracts in the latter areas. So fa r as there is a choice between the two methods o f gaining fu ll utiliza tion o f the national labor resources, the allocation of additional contracts to the surplus areas has clear-cut advantages, involving as it does, an absence o f the social and economic problems of migration. Estimated Changes in Civilian Population, 1940-42 Selected Industrial Areas of the Second Federal Reserve District Area and labor market classification Civilian Change in civilian population population April 1,1940 April, 1940 to May, 1942 Persons 466.000 Albany-Schenectady-Troy (II)................. Binghamton (III)....................................... 166.000 Bridgeport (I)............................................. 418.000 958.000 Buffalo-Niagara (I).................................... NewYorkCity (IV)-Northeastern N.J.(II) 11,117,000 438.000 Rochester (II)............................................. 295.000 Syracuse (III)............................................. 263.000 Utica-Rome (II)......................................... Source: U. S. Bureau of the Cenaus. Persons Per cent — 2,000 — 6,000 + 31,000 + 12,000 — 365,000 — 15,000 — 7,000 — 22,000 —0.4 — 3.6 + 7 .4 + 1 .3 —3.3 — 3.4 — 2.4 — 8.4 FED ERAL RESERVE BANK OF N E W YORK M ONTHLY REVIEW , FEBRUARY 1, 1943 Business and Financial Conditions in the United States Index of Physical Volume of Industrial Produc tion, Adjusted for Seasonal Variation (1935-39 average=100 per cent) Indexes of Wholesale Prices Compiled by United States Bureau of Labor Statistics (1926 averages 100 per cent) c FACTORS USIN4 RESERV ruNos 1 ----------M EM BlER BANK RESERVI BALANCES r —ff if ■ M O N EY! IN GIRCOLATiION TRFA*l)*Y CAS> ANO DEPOSITS i-Wv/L/Sj1 '...... NONMEMBER ... deposits 1940 . i....: , 1941 ’ _ 1942 Member Bank Reserves and Related Items (Latest figures are for January 13) •IIUON*09D O LLAR S TOTAL J Z '* t — / r * -~J' REQUIRED RESERVES ^ - - '7 ^ S ' .... /— —i.;. ~w 1— 1936 1937 v rjT rEXCESS a'rf Lr * .. h J K r* h \ RESERVES !938 !939 1940 AJ 1941 h 11 1942 Wednesday Figures of Total Member Bank Re serve Balances at Federal Reserve Banks, with Estimates of Required and Excess Reserves (Latest figures are for January 13) (S um m arized by the B o ard of G overnors of th e F e d e ra l E eserve S ystem ) I N D U S T R IA L a c tiv ity continu ed a t a h ig h level in D ecem ber and th e first h a lf o f J a n u a ry an d d istrib u tio n of com m odities to consum ers w as sustained. P rice s o f fa rm p ro d u cts an d re ta il foods advanced fu rth e r, w hile prices o f m ost o th er com m odities show ed little change. P ro d u c tio n In d u s tria l pro duction in D ecem ber show ed less th a n the u su al decline fro m N ovem ber an d th e B o a rd 's seasonally a d ju ste d index rose tw o p o in ts fu rth e r to 196 p er c en t o f th e 1935-39 average. M u nitio ns o u tp u t continu ed to increase, ra isin g to ta l d u rab le goods pro d u ctio n to a level 33 p er cent h ig h er th a n in D ecem ber a y ear ago, w hile fo r th e sam e perio d pro d u ctio n of n o ndu rab le goods w as only 4 p e r cen t la rg e r an d m in eral o u tp u t w as som ew hat low er. S teel p ro d u ctio n in D ecem ber an d th e first h a lf o f J a n u a ry av erag ed 97 p e r cen t o f capacity , dow n slig h tly fro m th e O ctober an d N ovem ber levels. T o ta l steel p ro d u ctio n fo r the y e ar show ed a 4 p e r cent increase over 1941 w hile the o u tp u t o f steel p late, im p o rta n t in sh ip b u ild in g a n d ta n k p ro duction , rose 90 p er cent over th e previous y ear. T his increase over a y e a r ago w as la rg e ly o b tain ed by conversion of e x istin g fa cilities. O u tp u t o f lum ber, and stone, clay, an d glass pro d u ctio n in D ecem ber show ed la rg e r declines th a n are usu al a t th is tim e o f y ear. O u tp u t o f n o ndu rab le goods show ed little change fro m N ovem ber to D ecem ber. T extile p ro d u ctio n continu ed a t th e h ig h level w hich h a d p rev ailed fo r th e p a s t y e ar a n d a h a lf. M eat pack in g increased sharply, reflectin g exceptio nally la rg e hog sla u g h te r a n d o u tp u t o f m ost other m an u fa ctu re d foods w as m ain tain e d a t a h ig h level. M ineral pro d u ctio n w as low er in D ecem ber, reflectin g a decline in coal o u tp u t fro m th e p eak reached in N ovem ber. B itu m ino us coal p ro d u ctio n in 1942 w as th e second la rg e s t in th e h isto ry of th e in d u stry , av erag in g 13 per cent g re a te r th a n 1941. C rude petro leum pro d u ctio n in D ecem ber continu ed a t th e level o f e arlie r m onths an d fo r the e n tire y e a r w as slig h tly low er th a n 1941, reflectin g tra n sp o rta tio n sho rtages. In th e first h a lf o f J a n u a ry p ro d u ctio n o f b itu m ino us coal an d petro leum w as m ain tain ed , b u t a nu m b er o f a n th ra c ite m ines w ere closed by an in d u stria l dispute. V alue of construction co n tracts aw ard ed in D ecem ber, according to th e F . W . D odge C orporation, w as som ew hat hig h er th a n in N ovem ber. C o ntracts fo r a p artm en t-ty p e b u ild in g s fo r housing w ar w orkers continu ed to rise and pu blic w orks increased sharply, w hile aw ard s fo r m a n u fa c tu rin g b u ild in g s declined fu rth e r. T he value o f co nstruction w as 3.2 billio n do llars in th e fo u rth q u a rte r o f 1942, according to p re lim in ary estim ates o f the D e p artm en t o f Com m erce. T his w as ab o u t 25 p er cent low er th a n th e p eak o f 4.3 billio n reached in th e previous q u arter, b u t slig h tly h ig h er th a n th a t of th e fo u rth q u a rte r of 1941. In sta lla tio n s fo r d ire c t m ilita ry use an d in d u stria l fa c ilitie s accounted fo r alm ost th ree q u a rte rs of the to ta l, an d re sid e n tia l b u ild in g c o n trib u te d som ew hat less th a n h a lf o f th e rem ain d er. F o r th e y e ar as a w hole, co n stru ctio n is valued a t 13.6 b illio n d o llars— o f w hich alm ost fo u r-fifth s w as pu blicly financed— an increase o f one-fifth over 1941. T he increase took place e n tire ly in m ilita ry an d in d u stria l p ro jects, w hich rose 4.4 billio n dollars. A ll other types of co n stru ctio n declined. D is t r ib u t io n D istrib u tio n o f com m odities to consum ers w as m ain tain e d a t a h ig h level in D ecem ber an d th e first h a lf o f Ja n u a ry , a fte r allow ance fo r th e sh arp flu ctu atio n s th a t a re custo m ary a t th is tim e o f year. T he 1942 C h ristm as b u y in g season exceeded th a t of an y previous y ear, value o f sales a t d e p a rtm e n t stores, fo r exam ple, b ein g ab o u t 15 p er cent la rg e r in N ovem ber an d D ecem ber th a n in th e correspon din g perio d o f 1941. T he increase over th e y e ar perio d reflected in p a rt p rice advances b u t th ere w as also an increase in the volum e o f goods sold. F re ig h t c ar loadings declined ab o u t th e u su al seasonal am o unt in D ecem ber, and the B o a rd ’s a d ju ste d index rem ained a t 134 p er cent o f th e 1935-39 average. G rain , livestock, an d m iscellaneous load ing s rose som ew hat on a seasonally a d ju ste d basis, w hile coal an d o th er pro d u cts declined sligh tly. Co m m o d it y P r ic e s P rice s o f a g ric u ltu ra l com m odities advanced sh a rp ly fro m th e e arly p a rt o f D ecem ber to the m iddle o f J a n u a ry . M axim um prices designed to re s tric t fu rth e r increases w ere issued fo r som e o f these com m odities, in clu d in g corn an d m ixed feeds. F o r c e rta in other pro ducts, how ever, like p o tato es an d tru c k crops, F e d e ra l price su p p o rts w ere increased. W holesale prices o f m ost other com m odities continu ed to show little change. F ro m m id-N ovem ber to m id-D ecem ber re ta il food prices advanced 1.6 p o in ts to ab o u t 133 p e r cent o f th e 1935-39 average. F u rth e r increases in these prices are in d ica te d in J a n u a ry as a re su lt o f advances p e rm itte d recen tly in m axim um levels fo r such item s as flour, m ilk, an d p o u ltry . B a n k C redit E xcess reserves o f m em ber banks declined sh a rp ly in th e la st w eek o f D ecem ber, an d d u rin g th e first h a lf o f J a n u a ry th ey av erag ed a b o u t 2.2 billio n do llars, as com pared w ith 2.5 billio n fo r m ost o f D ecem ber. L arg e paym en ts to th e T rea su ry fo r new securities, som e increase in currency, and other end-of-year requirem ents w ere responsible fo r d ra in s on reserves d u rin g the la st w eek o f D ecem ber. T here w ere, how ever, su b sta n tia l sales o f T rea su ry bills to F e d eral R eserve B ank s u n d er options to repurchase. In th e early p a rt o f Ja n u a ry , red u ctio n in T rea su ry balances a t th e R eserve B ank s an d a re tu rn flow o f c u r rency sup plied banks w ith a d d itio n a l reserves, an d som e o f th e b ills sold to th e R eserve B ank s w ere repurchased . D u rin g th is perio d R eserve B a n k holdings o f G overnm ent secu rities, w hich h a d increased to 6.2 billio n do llars b y D ecem ber 31, declined to below 6 billion. R eflecting larg e ly pu rch ases of th e % p e r cen t certificates o f indebtedn ess delivered in th e w eek o f D ecem ber 30, holdings o f d irec t an d g u ara n tee d G overnm ent ob ligatio ns a t re p o rtin g m em ber b a n k s in 101 cities increased b y 1.8 billio n do llars to 28 billio n over th e fo u r w eeks ended J a n u a ry 13. N ew Y ork C ity banks took 640 m illion o f th e 1.5 billio n do llars o f certificates sold to re p o rtin g banks. C om m ercial loans in N ew Y ork C ity declined by 90 m illion d o llars; outside N ew Y ork th ere w as little change. L oans to bro kers an d dealers rose sh a rp ly in D ecem ber d u rin g th e V icto ry F u n d cam paign, b u t declined correspon din gly in th e follow ing weeks. O ther loan s continu ed to decline.