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MONTHLY REVI EW o f Financial and Business Conditions F i fth Federal Reserve Distr ic t Federal Reserve Bank, Richmond 13, Va. P L O Y M E N T levels in Fifth District non-agriculE Mtural industries continue to show a downward trend. When this fact is taken into consideration, it is obvious that the high rate o f job placement in the District by U . S. Employment Service offices represents labor turnover. Employment in manufacturing industries for the Dis trict as a whole has been trending downward since the end of 1943. In Virginia this down-trend has continued with little interruption since the fall of 1942, and in the Carolinas it has been in evidence since early in 1943. Rising trends of manufacturing employment prevailed in Maryland and W est Virginia to August 1943 and October 1943, respectively, which offset employment losses in other states o f the Dis trict so that the total manufacturing employ ment for the District held on a flat level from the fall of 1942 through 1943. These changes are o f too short a duration to expect that in creased efficiency o f production had offset the loss in employment. In fact, in many indus tries where turnover has been unusually high, efficiency has suffered. It would seem reasonable, therefore, to believe that the trend o f manufacturing production in the District is also in a slow downward trend. Evidence has been clear on this point in the case o f cotton textiles, for the index o f cotton consumption in the District has been moving down since the spring of 1942. In November, however, the average daily con sumption of cotton was 5 per cent higher than in October. W hile this may be a result of emphasis placed on heavy goods such as duck and tenting twills which would use December 31,1944 more cotton per yard o f production, there is some reason to believe that cotton textile production may stabilize at levels not far from those now prevailing. The bituminous coal industry has done a grand jot) in holding up the production o f this vital commodity. De spite the loss o f the young men to the armed forces and an overall loss o f workers, production o f coal is still holding on an even keel near peak levels. September, October, and November outputs were, however, somewhat below the trend o f growth o f the past three years. T ax paid withdrawals o f cigarettes from the District's bonded warehouses in October were CTORY at their lowest level since the middle o f 1942, but these figures do not include cigarettes BUY U N IT E D manufactured for shipment overseas. It is esti STA TE S WAR mated that 1944 production o f cigarettes for fo>NDS AND the entire country will total 329 billion com STAMPS pared with 309 billion in 1943. Although overall industrial production levels seem to be receding, farm income in the Dis trict will establish a new high record in 1944, with to bacco income showing an increase o f more than 40 per cent and accounting for the largest part o f the increase. Gains in farm income, together with a generally higher in come in other divisions o f industry, have had their influ ence on department store sales. Our seasonally adjusted index o f department store sales in November rose 12 per cent above the October level and was 17 per cent higher than in November 1943. This raised the November index o f sales to the highest level on record. BUSINESS IN D E X ES— FIFTH FEDERAL RESERVE DISTRICT Seasonally Adjusted Average Daily 1935-39 = 100 Nov. Bank Debits ........................... .................................. Bituminous Coal Production*.... Building Contracts Awarded . Building Permits Issued . . . . . . . Cigarette Production .................. Cotton Consumption* ................ Department Store Sales ............ Department Store Stocks .......... Retail Furniture Sales .............. Life Insurance Sales .................. Wholesale Trade— Dry Goods . * Not seasonally adjusted. 1944 226 143 81 48 162 149 251 161 166 137 182 Oct. 1944 205 145 r 72 48 152 142 224 171 163 146 175 Sept. 1944 222 146 121 40 153 141 214 181 150 138 156 Nov. 1943 197 124 207 50 194 153 215 155 133 120 174 % Change Nov. 1944 from O ct/4 4 N ov/4 3 +15 +10 — 1 +15 -6 1 +13 0 — 4 — 17 + 7 --- J + 5 +12 +17 — 6 + 4 +25 + 2 — 6 +14 + 4 + 5 MONTHLY REVIEW 2 RURAL-FARM LEVEL OF LIVING INDEX (UNITED STATES AVERAGE = 100) FIFTH FEDERAL RESERVE DISTRICT, BY COUNTIES: 1940 © LEGEND I I Under 64 index units O H 64 - 75 index units W 7A 76 - 87 index units H H g 88 - 99 index units 100 H 112-123 index units* * INCLUDES AREAS AND SOURCE: U.S. DEPARTMENT OF AGRICULTURE. -III OF THE FEDERAL THE SPECIALLY ARLINGTON DISTRICT RESERVE DEFINED URBAN COUNTY, VIRGINIA OF BANK COLUMBIA. OF RICHMONO; NOVEMBER, 1944. MONTHLY REVIEW 3 Rural-Farm Levels of Living in the Fifth District Theoretically, the concept of level of living is not a difficult one either to grasp or to define. The level o f living of any family or community is the level o f total well-being to which it is accustomed. This, then, em braces all the economic aspects o f life as well as the emotional and intellectual aspects. The level o f living o f a community is the net result o f the cultural environ ment o f its people, their average income, the way they dispose o f the income, their educational attainments, forms o f recreation, and so forth. It is also the function o f their physical environment, especially as it affects their means o f making a living and their ease of contact with the goods, services, and ideas o f the world beyond the limits o f their community. Between any two communities, variations in any one or more of these contributory factors will result in relative differences in their respective levels of living; and a change in any one or more of these factors, within a single community, will result in an upward or down ward alteration o f its absolute level o f living. It is one thing, however, to speak o f levels of living in the theoretical sense, and quite another to attempt the statistical measurement o f a given community’s level of living or the statistical comparison of the levels o f living of two or more communities. Many o f the more impor tant ingredients of the total.level o f living are intangible, and are not subject to objective measurement. Further more, items which may be very important to one commu nity may not be found in others, yet the only basis o f com parison is one which utilizes common attributes which can be measured objectively. Finally, there is the me chanical difficulty of handling a vast number of different partial measurements, weighting them fairly according to their importance, and combining them into a mathematical value which is validly comparable with many other simi lar values, each applying to a single small area. This problem has challenged the attention o f many students of economics and sociology, and, although it may never be completely solved, has resulted in several very useful measures o f level o f living, by one standard or another. In spite o f many variations in specific instances, there has been a surprisingly close agreement between the find ings of several workers in this field o f study. The United States Department o f Agriculture has made a comprehensive study1 o f levels o f living based on the Census of 1940. This is the most recent study o f this kind which permits the implicit or explicit comparison of any county in the country with any or all others. The rest o f this article will be based on this report. The N a tu re of th e USDA Study The U S D A study was undertaken with a clear under standing o f the difficulties and shortcomings o f the sta tistical approach. In order to assure comprehensiveness and comparability between the final county indexes, it was decided that all the basic data be taken from the S ix teenth Census o f the United States (1940). The prob lem became, therefore, one of selecting from this source 1 Margaret Jarman Hagood, Rural Level of Living Indexes for Counties of the United States, 1940 (USDA, Bureau of Agricultural Economics; Washington: October 1943) 43 pages, mimeographed. those items which would best measure the total well being o f all the counties o f the nation and o f combining these items into a valid index. The following five items were finally selected: 1. Percentage o f occupied dwelling units with fewer than 1.51 persons per room. 2 . Percentage o f dwelling units with radios. 3. Percentage o f farms with gross income o f more than $600. 4. Percentage o f farms reporting autos o f 1936 or later models. 5. Median grade o f school completed by persons 25 years o f age and over. The use o f the above five items to compose the index does not mean that the rural-farm level o f living com prises only these five aspects o f life. On the contrary, these items were selected after careful study and the application o f many different criteria to the several hun dred possible items found in the Census. Thus, each o f the above items not only measures a concrete ingredient of total well-being or is logically related to an intangible one, but each final item also shows a very high correlation with every one o f a large group o f other items which could have been used. For example, in counties with large proportions o f the dwelling units having fewer than 1.51 persons per room the degree o f individual privacy is higher, there is more room for the amenities o f life, people have more “ things” about them to assist them enjoy life. Again, the presence o f radios was found to correlate highly with the presence o f electric lights, other electrical appliances, running water, et cetera. High incomes not only imply generally favorable economic environment, but also indicate the wherewithal to possess and enjoy the many goods and services which can only be purchased with money. Late model cars mean travel, contact with other people, widened recreational opportunity, and all the economic and social advantages which go with good roads. Finally, “ — in a county where the median grade of school completed by rural persons 25 years o f age and over is relatively high, the proportion completing college will likely be high also, probably the proportion o f time spent by persons in reading will be high, and we should expect to find greater than average degree o f participa tion in the various organizations o f the rural communi ties o f the county .,,2 W ith these five items properly weighted and com bined, it became possible to assign to each county a final index number which measured its level o f living in terms of the United States county average, rather than in terms of a set standard. Thus, this index is a relative rather than an absolute one. In selecting the final items, it was necessary to keep in mind the national scope o f the com parisons, therefore the only items which could be used were those which were not merely sectional in their appli cability. For this reason, certain items which might be the very best for use in a regional index had to be left out because they were not uniformly applicable to the 2Ibid, page 2. MONTHLY REVIEW 4 entire country. W ith respect to the Fifth District this becomes a definite limitation upon the meaning of the index. The degree o f farm tenancy or the racial com position of the population for example are both excellent components of a measure of ’ level of living in the South east ; but they could not be used because neither is as good as a measure of the level of living in, say, the North Cen tral States where an entirely different social and economic pattern o f rural life is found. If an index were devel oped for the Fifth District alone, therefore, it might show different county relationships, within the District, from those shown by the U S D A index. T h e G e o g r a p h ic a l D is t r ib u t io n of L e vels of L iv in g in the F if t h D is t r ic t In comparison with the national county average o f 100, the county averages o f the Fifth District states a re : Maryland, 108; Virginia, 8 6 ; W est Virginia, 8 5; North Carolina, 84; and South Carolina, 69. However, as the accompanying map clearly demonstrates, a wide range o f values will be found in each state. The extreme coun ties o f the states, and their values, are: M a r y l a n d — Kent, 122; Calvert, 92. Fairfax and Loudoun, 112; Buchanan, 53. W e s t V i r g i n i a — Ohio (not in the Fifth District), 114; Jefferson, 113; L ogan, M cD ow ell, and M ing o , 54. N o r t h C a r o l i n a — Guilford, 103; Swain, 60. S o u t h C a r o l i n a — Greenville, 8 8 ; Beaufort, 46. V ir g in ia — A s an examination o f the map indicates, there are some noteworthy features in the geographical distribution o f rural-farm levels o f living in this District. In the first place, a general North-to-South gradation is apparent. In the second place, the broad regions defined by differ ences o f level of living tend to ignore state lines. In the third place, the several classes tend to group into somewhat compact clusters rather than to scatter widely. W hile it would be impossible to set forth all the causal forces which have led to the final pattern of rural-farm prosperity and proverty, some o f the more important will Joe taken up below. The population class which is under scrutiny in this connection is the rural-farm group, by Census definition. Since all the persons in this class reported themselves as living on farms, any factors which affect the profitability of a country’s agriculture will strongly influence the level of living found therein. The most important determi nants of the average net farm income per capita are the concentration o f farm persons per unit o f land, the fer tility o f that land, and the perfection of agricultural ad justment to the natural and economic environment. In this District, the most fertile soils and the lowest density o f farm persons to arable land are found in the north eastern parts o f Maryland and Virginia, and in the Great Valley o f Virginia and W est Virginia. M oving North and East from Tazewell County, Virginia, these two geographic regions o f the District are clearly defined: almost without exception the counties so located have in dex values in excess o f 88 and form a high-value back bone for the upper half o f the District. W hile soils and farm population densities vary throughout the rest of the District, their effects are so modified by other factors that no clear effects may be seen. However, the de pressed nature o f the southern cotton economy during the thirties is reflected in the very low values found through out most o f South Carolina, and this is undoubtedly ac centuated by the high rural population densities found in soil areas which have been deteriorated by long use under soil-depleting crops. Throughout the entire District, one of the most con sistent relationships is that found between the rural-farm level o f living and the presence of the larger urban cen ters. In almost every instance, there is a distinctly higher level o f living found in the vicinity o f the larger cities and towns o f the District than will be found in other similar counties farther removed from an urban center. W hile it is impossible to generalize about which is cause and which is effect, several things may be said concerning this relationship. Towns and cities develop for many different reasons, one o f which is the presence o f prosperous agricultural markets in the surrounding hinterland. In these latter cases, prosperous farming areas give rise to towns which serve their needs as sources o f necessary non-farm goods and services, and as con venient markets for their produce. In many other cases, the town or city developed for reasons which, agricultur ally speaking, are completely fortuitous. The presence of relatively important industrial raw materials, location with respect to important arteries of trade or transpor tation, the prior existence o f some important govern mental function at a particular location, et cetera, mav have provided the nucleus around which an urban center grew. Regardless o f how it came to develop, the pres ence of a large city is extremely important to the pros perity o f the surrounding countryside, even though the absence of one does not necessarily cause a depressed agriculture. The city provides a ready market for many special agricultural commodities, such as dairy products and truck' crops, and this market is so protected and so constant in its demand that it tends to insure a highly prosperous market agriculture. Then too, the city pro vides a great deal o f extra, non-farm income through the part-time or full-time employment o f members o f the farm household. Finally, the presence o f all the con veniences o f life within the city acts as a stimulant and, by its example, tends to raise the standards o f neighbor ing farm families. Although all cities within the District do not seem to have this effect on their surrounding counties, the centers o f Washington, Baltimore, Richmond, and the Hampton Roads cities appear to exert very strong influences. Then too, in the northern and western parts o f W est Virginia and throughout North Carolina, almost all the counties which rise above the surrounding regions either contain cities within their borders or are very close to cities and towns o f 10,000 population or more. In South Carolina, this relationship is not so clear, but, even there, some larger cities exert noticeable influence on the levels of liv ing in adjacent counties. In many sections o f the South, especially, during the last decade or so, there has been a considerable growth o f MONTHLY REVIEW decentralized industry in rural regions. This has oc curred for a number o f different reasons which are be yond the scope of this paper. Regardless o f whether they are found in cities, villages, or in the open country, in dustries create a surrounding community of specialized persons who buy their daily needs and whose income is not derived in competition with the region’s agriculture. Thus, the decentralization of industry into the South’s rural areas has tended to raise farm levels o f living by in jecting new income, by removing many persons from agriculture, and by providing new markets for local pro duce. T he F uture It has been shown that the index of rural-farm levels o f living provided by the U S D A is by no means defini tive and is subject to distinct limitation when applied to the Fifth District. In spite o f this, it does allow a more precise measurement o f relative levels of well being between the several counties o f the nation, as well as the implicit comparison o f Fifth District counties with the rest o f the country. Space does not permit an ex haustive examination o f all the root causes o f the Dis trict’s pattern o f relative agricultural prosperity, as measused by this index, but enough has been set forth to show that these causes are basic to our regional way o f life. It is worthwhile, therefore, to canvas some o f the future prospects which are implied by the present situation. 5 So far as the absolute levels o f living found in this District are concerned, their future values will depend on the future o f the region and the nation. Develop ments which reduce the dependence o f large segments of the population on agriculture, whether by a change o f local occupation or by actual migration, will result in improvements in the levels o f living o f those left on the farms. The introduction o f more efficient agricultural methods, or o f new cash crops, also will raise the farm level o f living. The same results will follow the opening o f new markets, either local or distant, or the expansion o f old on es; these can occur through improvements in our foreign trade, more national distribution o f Southern farm products, continued growth o f Southern cities, or the further growth o f decentralized industry in this re gion. Finally, the attainment and maintenance o f a high general level o f prosperity will enhance farm life, for, in the last analysis, farm and city are but two aspects of the total economy, and prosperity in one eventually will be reflected in the other. Should the above developments affect the agriculture o f the country with general equality from region to region, the absolute levels o f living in all will rise, but the relative levels (as measured by an index such as the one under discussion) need not be changed. The District’s relative standing can not be raised by national improvements, but only by the solution of the many pressing problems which are particular to this region. Goal Mining Industry of the Fifth District Coal mining is one o f the most important industries in the northwestern part of the Fifth District. The coal map of the United States Geological Survey shows no coal in South Carolina, one small field (apparently not worked) in North Carolina, and a few small fields scat tered over the eastern half o f Virginia (not now o f any commercial importance) ; active mining is concentrated in W est Virginia, the western tip o f Maryland, and south west Virginia. Almost all the coal mined in this District is bituminous or “ soft” coal. A little semi-anthracite is mined in Virginia, so little that it has been combined with bituminous for this discussion. Tw o main types o f min ing operations are found in this region, deep mining and stripping. The former is the type usually thought o f as being characteristic o f the industry, and consists o f driv ing shafts into the earth in order to reach the beds, which are then worked by means o f gradually expanding sub terranean galleries. Strip or open-pit mining, on the other hand, is often practiced where the coal beds are near the surface, and consists of scraping or shoveling away the earth-cover and removing the exposed coal. Although implying entirely different working methods and surroundings, these two types o f mining seldom will be differentiated herein. T he I m p o r ta n c e of C oal M in in g U n it e d in the S tates According to the best estimates o f geologists, there are sufficient coal reserves in the United States to last for the next several centuries at current rates o f depletion, placing this country among the most fortunate o f the world in this respect. Since there is no reason to think that all coal reserves have been discovered or that means may not yet be found to mine coal now considered commercially non-recoverable, this country need not fear early exhaus tion o f this mineral. The future o f the industry depends on so many currently unknown factors (fo r example: the substitutability o f the several energy sources, the de pletion o f some competing fuels, possible discovery o f entirely new uses for coal, alterations in the cost level o f coal production resulting from changes in mining tech nology, etc.) that no attempt will be made herein to fore cast it. T w o o f the most important economic aspects o f coal mining are the employment which it provides and the in comes which are derived from it. In 1940, this industry provided employment for approximately 527 thousand persons, or 1.2 per cent o f total national employment. During the previous year, it produced products valued at $731 million, or eight-tenths o f one per cent o f the year’s total national product. M ajor attention herein will be given to these aspects o f the industry. B it u m in o u s C o a l P r o d u c t io n The United States Bureau o f Mines provides a series of coal production statistics which is continuous and con sistent for many years. In this discussion, annual pro duction figures from this source will be utilized for the years 1917 to 1943. During the five years 1917-21, average annual national production o f bituminous coal MONTHLY REVIEW 6 PRODUCTION BY COUNTIES IN THE MAJOR COAL BEDS FIFTH FEDERAL RESERVE DISTRICT, 1939 Major coal beds Number in each county indicates thousands of net tons of coal mined during 1939. PERCENTAGE CHANGE IN COAL PRODUCTION, 1939-1943 FIFTH FEDERAL RESERVE DISTRICT, BY COUNTIES LEGEND 200-900 % increase 100" 399 % increase 50 - 99 % increase 1-49 % increase H I" 13 % decrease |:;;: 50" 100 % □ note: SO URCES: decrease No coal reported mined in either year no c o u n t ie s D EC R EASES sh o w ed OF 13*50 U.S. GEOLOGICAL SURVEY; MARYLAND BUREAU OF M IN ES; VIRGINIA DEPARTMENT OF LABO R AND INDUSTRY; WEST VIRGINIA DEPARTM ENT OF MINES. FED ERAL RESERVE BANK OF RICHMOND. MONTHLY REVIEW was 516 million net tons, 19 per cent of which was pro duced within the Fifth District. During the period 193943, average annual production was 506 million net tons, 31 per cent of which was produced in this District. Over this entire period the national bituminous industry was subject to a trend o f slow decline which was not shared by the Fifth District. This trend was downward both in absolute amounts o f coal mined and in relationship to the national total o f industrial production. For the pe riod 1919-42, the Federal Reserve Board’s index o f in dustrial production shows that, while fluctuating approxi mately with total industrial production, bituminous coal production has been subject to a long-term relative de crease. If 1919 is taken as the base year for both series, total industrial production rose from 100 in that year to 153 in 1929, and fell slightly (to 151) in 1939; on the other hand, coal production rose from 100 in 1919 to 116 in 1929, and fell to 85 in 1939. In both series, the year 1938 was the pre-wTar low year. From 1938 to 1942, total industrial production more than doubled, while coal pro duction rose by only 65 per cent. These relationships are not difficult to explain. In the first place, there has been a long-run relative decrease in the use of coal in this country brought about by ( 1) the increasing competition o f other fuels and power sources and ( 2 ) increasing effi ciency in the use of coal for all purposes. In the second place, the wartime expansion of total production has been accomplished more by the vast increase of employment and productivity in specific war-industries (such as air craft and munitions) than by a general expansion of all the older peace-time industries (such as coal). T h e N a t u r e of t h e the C oal M in in g I n d u str y W it h in F i f t h D is t r ic t The first of the accompanying two maps shows all the known coal beds within the Fifth District except the small unworked bed in central North Carolina and a few doubt ful ones in Virginia. This map also indicates the approxi mate total production of all counties in which active min ing occurred during the calendar year 1939, which was chosen as representing a fairly typical prewar level o f activity. The second map indicates the percentagewise change in production between 1939 and 1943, most o f which probably can be ascribed to the direct or indirect effects of the war. A comparison of these two maps leads to the conclusion that relatively moderate percentage in creases have characterized the heavier producing counties, while both decreases and sharp increases in production have occurred in the counties with low volumes o f pro duction .1 Speaking of the characteristics o f the coal mining in dustry in the Fifth District virtually means speaking o f the industry in WTest Virginia. This state accounts for almost nine-tenths of the District’s coal-mining activity, so that its characteristics dominate any District averages wThich may be struck. The following table indicates the relative importance of the three states to the District and the United States totals: 1 It should be remembered that, while moderate relative to the large per centage changes which took place in counties with low production, the increases of the heavy coal counties constituted the greater part of the jijcrease in total production taking place between these two years. 7 COAL PRODUCTION IN THE FIFTH DISTRICT 1839-43 Averages AREA Maryland ............................... Virginia ................................... West Virginia ..................... Fifth District ..................... Source: Amount (1,000 net tons) Per Cent of United States Total Per Cent of Fifth District Total 1,686 17,148 138,117 156,951 0.3 3.4 27.3 31.0 1.1 10.9 88.0 100.0 United States Bureau of Mines. Since 1917, the states o f the Fifth District have tended to follow somewhat divergent paths of coal production. Maryland’s production shows a decreasing trend, moving from almost 5 million tons in the earlier year to about 2 million in 1943. At the same time, production in Virginia and W est Virginia have almost doubled, in the former state from a 1917 figure of 10 million tons and in the latter f om a 1917 figure o f 86 million tons. According to the Census o f 1940, 129 thousand persons in the three coal states o f this District listed coal mining as the industry o f their employment. This comprised the following proportions o f each state’s total employment in that yea r: Maryland, 0.4 per cen t; Virginia, 2.2 per cen t; and W est Virginia, 20.4 per cent. This same source shows that for the three decennial years of 1919, 1929, and 1939, the total employment o f the three states’ coal min ing industry varied between 111 thousand and 120 thou sand persons, o f whom more than 90 per cent were classi fied as wage earners (that is, other than administrative, clerical, and supervisory w orkers). In Maryland, total employment declined during each decade; in Virginia it increased; while in W est Virginia, 1929 was the year of highest employment, followed by 1939. The final selling value o f the products produced by these persons and the proportion paid out to wage earners are shown in the fol lowing table: VALUE OF PRODUCTS OF COAL MINING AND PROPORTION PAIDOUT AS WAGES, FIFTH DISTRICT; 1919, 1929, 1939 Value of Products (1,000 dollars) AREA Maryland ................. Virginia ................... West Virginia .......... Fifth District .......... Source: 1919 1929 1939 8,196 23,763 193,108 225,067 4,745 21,162 217,023 242,930 2,978 24,994 190,668 218,640 Census of 1940: Wages as Per Ct. of Value of Products 1919 1929 65.7 54.5 54.8 55.1 65.6 56.0 58.2 58.4 1939 69.6 63.1 62.7 62.9 Mineral Industries, 1939. It will be noted from this table that the share o f total value received by wage earners tended to increase over each decade in each state.2 Because of the uneven pace of the industry’s development, geographically, it is hard to determine the true sequence of cause and effect in this connection, but a very probable explanation suggests it self, in view o f known circumstances. The increasing competition of other fuels, or even other coal-producing regions, coupled with decreasing relative demand via im proved combustion efficiency, caused the gradual mechani zation (see below) of coal mines in this and contiguous regions. Mechanization presumably took place because the operators thought that the resulting reduction of labor costs would allow reductions in total costs o f production 2 It should not be assumed that the increases in each state have necessarily followed from the same causes. The changes in this proportion result from simultaneous changes in the volumes of employment and production and in the levels of coal prices and mine wages. These variables behaved differently in each state. 8 MONTHLY REVIEW (net, after allowing for the new costs attendant on the use o f the machinery) that could be used to restore com petitive position and/or to maintain or increase profits per unit sold. Over this same general period, though with an appreciable time-lag, the gradual unionization o f the in dustry took place, first in the northern areas, and finally in the southern ones (including most o f this District). Since mechanization generally increases the productivity per manhour, and since miners are usually paid on a piecerate rather than a time-rate basis, this would permit con siderable reductions in the piece-rates paid machine miners without reducing their hourly wages. However, union membership included pick-miners (in unmechanized mines) as well as machine-miners, and the unions could not allow reductions in the piece-rate on pick-mined coal. Thus, in addition to their efforts generally to maintain employment and to better weekly mine wages, the unions strove to prevent the elimination of the non-mechanized mines by the competitively stronger mechanized mines. The net result was that, in union mines, the wage-rate for pick-mining remained at least at its previous level, while machine-mining rates were not reduced to the point o f weekly-wage-parity. In non-union mines, rates tended to follow, although a relatively constant differential did exist. For the entire industry, the net effect was to in crease total labor costs; but the same factors which had provided the initial incentive for mechanization now pre vented the operators from passing this cost increase on in the form o f higher coal prices at the mine-mouth. Finally, increasing union strength introduced such down ward inflexibility to the general mine wage level as to prevent restoration o f the operators' margin. The above analysis should not be interpreted as a con demnation o f either the mine operators or the mine unions. Trade-unionization is an established aspect o f modern industry. In the short-run it is to be expected that the unionization o f an industry will have some effects on costs o f production, usually through its influence on wages, em ployment, a n d /or the length o f the work-week. In the past, these factors have often resulted in increased costs o f production relative to final prices o f output, and in concomitant reductions in relative profits. This tendency is made more apparent by the fact that unionization does not affect every industry to the same degree at the same time. In the long-run, especially if the entire economy is finally and completely unionized to the same degree, many o f these profit-inequities ultimately may disappear. In fact, under conceivable circumstances the effects of widespread unionization might be to increase total e f fective demand and so restore or even enhance operators’ profits. In this connection, it is interesting to note the relation ship which exists between coal mining and other indus tries with respect to earnings. The Bureau o f Labor Statistics has calculated the average weekly earnings o f workers in certain industries or groups o f industries, for the entire United States. Some idea o f the relative level o f earnings in coal mining between 1933 and 1941 may be obtained by expressing the average weekly earnings o f coal miners as a percentage o f the averake weekly earn ings o f workers in all manufacturing industries. This proportion varied from a low o f 82 per cent, in 1933, to a high o f 100 per cent (parity), in 1936. From 1934 fo r ward, coal miners’ earnings did not fall below 91 per cent o f earnings o f all manufacturing workers nor rise above 100 per cent. I f W est Virginia is taken as representative o f the in dustry in the Fifth District, there was little long-term change in either the money-wage o f coal miners or its purchasing power (in terms o f 1935-39 dollars) between 1925 and 1939. W age figures published by the W est V ir ginia Chamber o f Commerce, taken from data o f the W orkm en’s Compensation Fund, show cyclical movements o f the average annual money-wage from its pre-depres sion high of $1,650 (in 1925-6) to its depression low o f $703 (in 1932-3) to its post-depression high o f $1,324 (in 1936-7). W hen deflated in terms o f the Bureau o f Labor Statistic’s Index o f Cost o f Living ,3 the range o f variation is narrowed appreciably, and generally drop ping costs o f living tended to more than offset the slight downward movement o f money-wages. Since the effects o f the current war first became felt in 1939-40 in the form o f longer hours and increasing overtime pay, money wages rose from an annual average o f $1,532, in that year, to $2,649, in 1943-4, a much sharper rise than occurred in average costs o f living. Thus, leaving out the trough-years o f the depression, coal miners in this District have tended to receive a generally increasing real wage, even though the increase has not been drastic. The relative wage levels, as between the three coal states o f the District, is rather difficult to determine. However, taking the Census figures for 1939 as a basis of comparison and expressing each state’s average annual wage as a percentage o f the lowest one, the relative wage levels would be: Maryland, 100; Virginia, 106; and West Virginia, 129. It should be noted that the relationship is not at all constant over time and that, in 1929 ( o f the three decennial years), average wages in Virginia fell below those in Maryland. One o f the most important developments in this indus try, since it affects employment, productivity, earnings, and costs, is the trend o f mechanization. Regardless o f whether or not operators have been able to profit by mechanization to the degree anticipated, there has been a steady increase in the application o f machine processes to coal mining since 1919. According to the Census, the national average number o f installed horsepower per wage earner in this industry increased from 3.9 to 9.0 during the two decades 1919-39. In the Fifth District the rate o f increase lagged slightly behind the nation, but still almost doubled over this period. By 1939, W est V ir ginia averaged just over 8 horsepower per wage earner, while Maryland and Virginia averaged about 5.5. This increase in mechanization followed advances in mine haulage, ventilation, loading and cutting, as well as in many miscellaneous processes. So far as the technology o f mining is concerned, mechanical loading and hauling, on the one hand, and mechanical cutting, on the other, are the most important aspects o f this development. 3 This index series (1935-39=100) refers primarily to costs of living in the larger cities of the country, and is not designed to reflect the prices found in the mining communities of a small section of the nation. How ever, it can be assumed that the costs of living in the part and the whole probably tended to move along parallel paths, even though short term fluctuations may not have been of the same order. MONTHLY REVIEW The mechanical cutting of coal was introduced in this country prior to 1890, and spread with considerable ra pidity. By 1919, about three-fifths o f all the coal mined underground was machine cut, in contrast with that mined by hand or “ shot off the solid ”.4 The proportion o f ma chine cut coal rose to 78 per cent in 1929, and to 88 per cent in 1939. In this latter year, in the Fifth District, less than half the coal mined underground in Maryland was machine cut, while over 90 per cent was so mined in Virginia and W est Virginia. In contrast to cutting, the loading and conveying o f coal from the working face to the outside was not fully mechanized until about 1920. In 1923, the first year for which statistics are available, the Census found that only three-tenths o f one per cent of the nation’s coal mined underground was mechanically loaded. This proportion had risen to 7 per cent in 1929, and to 31 per cent by 1939. In this District, a definite lag is apparent. By 1939 there was only one mine in Maryland which reported mechanical loading o f under ground coal. In Virginia, 18 per cent o f underground mined coal was loaded mechanically, and in W est V ir ginia, 28 per cent. The total value o f products of coal mining is not only important to the wage earners employed in the industry, but is very important to the operators and to the total community (county, state, or nation) o f which the in dustry is part. The income-importance of coal mining to the states o f the Fifth District could best be meas ured in terms o f the proportion which it contributed to the net income o f the community, but this relationship cannot be measured exactly. In the first place, value of products is a gross figure and contains items (deprecia tions, taxes, etc.) wThich are duplicated elsewhere in the economy. In the second place, the total value o f coal produced within any given state may not remain within the borders of that state, but may become income (through the disbursement o f insurance premiums, royalties, divi dends, etc.) of persons residing elsewhere. It seems logical to assume that, in an industry which is located in such a compact area touching on three contiguous states, there should be little variation in each state’s proportion o f gross value o f product which should be deducted for 4 This latter term refers to coal broken down by blasting at the working face without undercutting or otherwise weakening the mass. Because of the attendant dangers, this type of mining is prohibited in many states. 9 the above reasons. Thus, it is probably safe to compare Maryland, Virginia, and W est Virginia on the basis o f “ gross value o f coal” as a proportion of “ net income pay ments to individuals” . For Maryland, these proportions were .4 per cent, in 1929, and .3 per cent, in 1939; for Virginia, they were 2.1 and 2.5 per cent, respectively; while for W est Virginia, they were 27.3 and 26.7 per cent, respectively. It will be noted that these proportions are quite similar to the proportions o f total employment pro vided by the industry, given above. Unfortunately, no material has been found which cov ers the net profit or loss accruing to coal mine operators in the District’s coal-producing states. Even at the na tional level, a complete and realistic profit-loss accounting cannot be made. The United States Treasury Depart ment has compiled the corporate income returns from this industry, for the national as a whole, and this con stitutes the best known source o f data. W ith reserva tions ,5 it will be used here. According to this source, the national bituminous coal industry showed net profits between 1917 and 1921, at least, but showed net losses from the early Twenties through 1939. In 1920, the industry’s peak net profits approximated $250 million, while the maximum net losses o f 1932 totaled in the neigh borhood o f $50 million. In 1940, the industry was again in the black, and it can be assumed that it has so re mained. As was demonstrated earlier, the postwar fu ture o f the industry is subject to too many currently un known forces to allow any projection o f trend on the national level. Within this District, it is quite possible that the industry, since it was growing at the expense of the industry in the rest o f the country, may have been more profitable than national figures would imply. But, in the absence o f more exact information on this and on the national prospects, no prognostication is possible on this point, either. •In many ways, income accounting for corporate tax purposes differs from accounting, for business purposes. In the first place, many coal mines are not incorporated; salaries, here, cover much which would be divi dends to a corporation. Much the same may be said of the many familyowned corporations in the industry. In the second place, definitions often change under the law, with items allowed as expenses some years and not in others. In the third place, the depletion allowances under the law may be much larger than those usually taken in business accounting. This last is not as important for coal mining as it is for some other extractive industries, since the allowances have run in the neighborhood of 5 per cent, for many years. All in all, it is not felt that these reser vations nullify the comparisons, and this source covers far more indi vidual concerns than can be found in any other series. MONTHLY REVIEW 10 FEDERAL RESERVE BANK OF RICHMOND DEBITS TO INDIVIDUAL ACCOUNTS (All Figures in Thousands) Change in Amt. from Dec. 13 12-15-43 11-15-44 1944 ITEMS — 89,335 + 33,323 Total Gold Reserves .................... $ 973,346 — 5,557 — 114 Other Reserves ............................. 12,423 — 94,892 + 33,209 985,769 Total Reserves ....................... — 3,100 — 3,450 550 Bills Discounted ........................... — 104 — 6 132 Industrial Advances ................. + 578,302 + 40,198 Gov’t. Securities, Total .............. 1,193,887 — 66,003 + 6,074 Bonds ......................................... 63,779 + 24,249 + 27,960 Notes .......................................... 79,536 + 38,980 + 36,295 Certificates ................................. 217,545 — 30,131 + 581,076 Bills ............................................ 833,027 + 575,098 + 36,742 Total Bills and Securities ........ 1,194,569 — 1,483 — 1,359 Uncollected Items ..................... . 155,340 — 3,863 — 85 Other Assets ................................. 12,454 + 68,507 + 474,860 Total Assets ............................. $2,348,132 $1,488,441 716,960 635,087 33,397 44,726 3,750 120,189 701 21,841 $2,348,132 Fed. Res. Notes in Cir................. Deposits, Total ............................. U. S. Treas. Gen. Acct............. Foreign ....................................... Other Deposits ......................... Deferred Availability Items Other Liabilities ......................... Capital Accounts ....................... . + 45,379 + 35,991 + 9,208 + 28,651 — 3,257 + 1,389 — 13,208 + 98 + 247 + 68,507 + 362,650 + 108,519 + 112,508 + 9,627 — 13,260 — 356 + 495 + 355 + 2,841 + 474,860 41 REPORTING MEMBER BANKS—5th DISTRICT (All Figures in Thousands) Change in Amt. from Dec. 13 121-15-43 11-■15-44 1944 ITEMS Total Loans ................................. $ 358,725 + 83,271 + 64,606 9,917 5,478 143,946 Bus. and Agric. L oan s............ + + 1,287 843 48,292 Real Estate Loans ................... + 74,641 59,971 166,487 All Other Loans ..................... + + + 266,885 1,608,962 + 157,567 Total Security Holdings ............ — 10,417 121,535 U. S. Treas. Bills .................. + 37,028 3,770 313,354 U. S. Treas. Certificates ........ + 47,610 + 136,350 67,709 305,105 U. S. Treas. N otes................... + + 124,894 799,242 U. S. Gov. Bonds ................... + 56,621 — 29,196 78 16,007 Obligations Gov. Guaranteed. . + 99 — 2,356 53,719 Other Bonds, Stocks and Sec. — 7,491 10,942 106,435 Cash Items in Process of Col. . . *+ 185,490 + 26,808 Due from Banks ......................... + 31,121 4,441 4,827 41,922 + Currency and Coin ..................... + 336,519 Reserve with F. R. Bank .......... + 10,162 + 59,072 1,724 2,636 68,303 + Other Assets ................................. + + 450,604 + 259,065 Total Assets ............................. $2,706,356 Total Demand Deposits .............. Deposits of Individuals .......... Deposits of U. S. Gov.............. Deposits of State & Local Gov. Deposits of Banks ................... Certified & Officers’ Checks . . Total Time Deposits .................. Deposits of Individuals .......... Other Time Deposits ............... Liabilities for Borrowed Money. . All Other Liabilities . ................ Capital Accounts ....................... Total Liabilities ................... $2,217,566 1,180,446 487,199 77,601 451,141 21,179 289,879 276,036 13,843 0 81,630 117,281 $2,706,356 + 272,366 37,987 + 314,917 — 4,845 90 + 191 + — 4,651 — 4,687 36 + — 1,500 — 6,509 — 641 + 259,065 — + 384,751 + 85,475 + 257,015 4- 2,124 + 46,427 6,290 ------+ 47,263 50,147 + 2,884 ------1,500 + 14,959 5,131 + + 450,604 * Net figures, reciprocal balances being eliminated. DEPOSITS IN MUTUAL SAVINGS BANKS 8 Baltimore Banks Total Deposits . . . Nov. 30, 1944 $292,785,086 Oct. 31, 1944 $291,932,451 Nov. 30, 1943 $256,586,779 COTTON CONSUMPTION— FIFTH DISTRICT In Bales No. Carolina So. Carolina Virginia MONTHS 20,099 172,578 225,508 1 94 4 .... November 18,602 214,597 163,951 1 94 4 .... October 20,695 230,667 176,160 November 1 94 3 ,... 208,874 2,404,691 1,845,057 11 Months 1 9 4 4 .... 1,957,564 228,678 2,564,577 11 Months 1 9 4 3 .... (000 omitted) November 1944 Dist. of Columbia Washington . . . . . .$ 516,338 Maryland Baltimore ........ . . 801,365 Cumberland 13,545 Frederick .......... 13,159 Hagerstown . . . . 16,424 North Carolina Asheville .......... 24,841 Charlotte .......... . . 131,694 Durham ............ . . 106,333 Greensboro ........ 39,917 Kinston ............ 19,414 Raleigh .............. 59,655 Wilmington 39,823 Wilson ................ 31,750 Winston-Salem . 83,544 South Carolina Charleston ........ 41,632 Columbia .......... 52,758 Greenville ........ 46,509 Spartanburg .. . 24,779 Virginia Charlottesville 18,679 Danville .......... 37,526 Lynchburg ........ 22,861 Newport News . 23,240 Norfolk .............. . . 122,799 Portsmouth . . . . 16,073 Richmond .......... . . 355,809 Roanoke ............ 44,518 West Virginia Bluefield ............ 21,753 90,982 Charleston ........ Clarksburg ........ 17,135 Huntington . . . . 35,657 19,574 Parkersburg . . . District Totals . . . . .$2,890,086 % chg. from 11 Mos. 1943 % chg. from Nov. 1943 11 Mos. 1944 + 16 $ 5,343,246 + 6 + 9 + 18 + 21 0 8,378,542 145,360 135,726 186,780 + + + + 8 13 16 10 + + + + + + + + + 23 22 19 25 99 22 15 77 7 263,485 1,402,655 828,201 380,551 122,681 601,293 418,120 165,237 735,136 + 15 + 13 + 15 + 8 + 15 + 6 + 3 + 13 — 3 + — + + 11 3 27 19 430,711 547,172 423,199 242,994 0 0 + 2 + 7 + + + + + + + + 35 19 3 o 6 7 7 17 171,557 204,804 232,909 281,390 1,322,850 173,499 3,642,937 457,414 + 29 + 10 + 7 + 1 + 1 — 3 + 10 + 13 + + + + + + 9 24 19 38 38 13 256,142 908,354 170,070 344,808 182,065 $29,099,888 + + + + + + 15 10 17 18 16 8 COMMERCIAL FAILURES PERIODS November October November 11 Months 11 Months Number of District 1944...................1 1944........ ...........0 1943.................. 2 1944........ 13 1943........ 45 Failures U. S. 75 74 155 1,129 3,076 Total Liabilities District U. S. 8,000 $ 3,008,000 0 3,819,000 110,000 2,402,000 $ 760,000 $29,856,000 1,100,000 43,284,000 $ Source: Dun & Bradstreet. COTTON CONSUMPTION AND ON HAND— BALES Nov. Nov. Aug. 1 to Nov. 30 1944 1943 1944 1943 Fifth District States: Cotton consumed .......... 418,185 427,522 1,630,552 1,677,171 Cotton Growing States: .. Cotton consumed .............. 754,874 2,885,603 2,992,643 738,458 Cotton on hand Nov. 30 in Consuming: establishments 1,975,334 2,105,501 Storage and Compresses. 13,043,514 12,731,432 United States: 836,541 858,877 3,266,496 3,421,212 Cotton cousumed .............. Cotton on hand Nov. 30 in 2,209,694 2,389,22 7 Consuming establishments Storage and Compresses. 13,185,606 12,950,9»3 Spindles Active, U. S, . . . 22,257,040 22,615,732 RAYON YARN DATA District 418,185 397,150 427,522 4,458,622 4,750.819 Rayon Yarn Shipments, Lbs. . . . Staple Fiber Shipments, Lbs. . .. Rayon Yarn Stocks, Lbs .......... Staple Fiber Stocks, Lbs............ Source : Rayon Organon. Nov. 1944 47,800,000 13,800,000 8,400,000 2,800,000 Oct. 1944 47,000,000 14,500,000 8.400.000 2.7000.000 Nov. 1943 42.900.000 13.900.000 7.200.000 2.600.000 MONTHLY REVIEW 11 RETAIL FURNITURE SALES BUILDING PERMIT FIGURES November 1944 Total Valuation Nov. 1943 Nov. 1944 Maryland Baltimore .......................................... $ 532,930 Cumberland ....................................... 1,946 Frederick ............................................ 7,620 Hagerstown ...................................... 12,455 Salisbury ............................................ 43,091 Virginia Danville .............................................. $ 9,135 Lynchburg ........................................ 16,101 145,885 Norfolk .............................................. Petersburg ........................................ 1,080 Portsmouth ........................................ 20,540 Richmond .......................................... 101,142 Roanoke .............................................. 23,555 West Virginia Charleston ........................................ $ 49,550 Clarksburg ........................................ 1,971 Huntington ....................................... 78,085 North Carolina Asheville ............................................ $ 23,500 Charlotte ............................................ 84,601 Durham .............................................. 80,640 Greensboro ........................................ 11,779 45,584 High Point ...................................... Raleigh .............................................. 14,950 Rocky Mount .................................... 2,950 Salisbury ............................................ 6,475 Winston-Salem ................................. 125,940 South Carolina Charleston ........................................ $ 53,137 Columbia ........................................... 34,840 Greenville .......................................... 33,530 Spartanburg ...................................... 6,590 District of Columbia Washington ...................................... .......... $ 1,436,467 District Totals ................................. 11 Months ..................................... $ 654,595 20,080 0 4,005 12,934 $ 4,117 5.300 853,742 400 27,395 58.917 19,582 $ 19,678 1,160 6,615 $ 3,065 23,931 6,610 2,450 16,021 38,985 825 2,180 24,120 STATES Maryland (5)* ................. Dist. of Columbit (5)* . . . Virginia (24)* .................. West Virginia (11)* ........ North Carolina (20)* . . . . South Carolina (13)* . . . Fifth District (78)* . . . INDIVIDUAL CITIES Baltimore, Md. (5)* ........ Washington, D. C. (5)* .. Richmond, Va. (7)* ........ Charleston, W. Va. (3 )*.. Charlotte, N. C. (5)* ___ Columbia, S. C. (4)* . . . . $ 84,442 3,990 3.300 26,245 $ 1,200,935 $ 3,125,619 $42,704,188 $ 3,006,069 $28,602,221 Richmond $274,474,000 — 56 — 31 TOBACCO MANUFACTURING Smoking and Chewing to bacco (Thousands of lbs.) Cigarettes (Thousands) . . . Cigars (Thousands) .......... Snuff (Thousands of lbs.).. % change 11 Mos. from 1944 11 Mos/43 % change from Nov. 1943 26,775 20,554,494 446,3*25 3,954 + 5 — 15 + ^ 20 + 1 3 6 4 8 1 Baltimore Washington Other Cities District Maryland Dist. of Col. Virginia West Va. No. Caro. So. Caro. Percentage change in Nov. 1944 sales from Nov. 1943 sales, by States: + 10 +13 +16 +24 +26 +20 Percentage change in 11 months’ sales in 1944 from same period in 1943: + 7 + 5 +16 +15 +15 + 12 Source: F. W. Dodge Corp. Nov. 1944 — — + — + + 3 2 16 22 18 16 Percentage change in Nov. 1944 sales, compared with sales in 1943: + 15 +10 +13 +20 +14 Change in 11 mos.’ sales in 1944, compared with 11 mos.’ sales in 1943: + 15 + 7 + 5 +16 * + 9 Change in stocks on Nov. 30, 1944, from stocks on Nov. 30, 1943: + 2 + 4 + 3 +14 + 4 Change in outstand’g orders Nov. 30, 1944, from orders on Nov. 30, ’43: + 11 +10 — 3 +32 + 5 Change in total receivables Nov. 30, 1944, from receivables Nov.30, ’43: + 13 +13 + 8 +12 +Tl Percentage of current receivables as of Nov. 1, 1944, collected in Nov.: 61 62 57 62 60 Percentage of instalment receivables as of Nov. 1, '44, collected in Nov.: 36 39 29 39 33 % chg. from 10 Mos. % chg. from October 10 Mos. 1943 1944 1944 Oct. 1943 STATES $ 76,641,000 — 13 $ 4,426,000 — 68 Maryland ............... — 11 + 62 23,435,000 Dist. of Columbia.. . . 3,142,000 — 35 96,257,000 5,955,000 — 55 Virginia ................. + 32 21,623,000 1,277,000 — 6 West Virginia........ — 52 . . 1,551,000 — 57 37,805,000 North Carolina 18,713,000 — 56 192,000 — 94 South Carolina . . . $16,543,000 + + + + + + DEPARTMENT STORE TRADE CONSTRUCTION CONTRACTS AWARDED Fifth District . . . Percentage Changes in Nov. and 11 Mos. 1944 Compared with Compared with 11 Months 1943 . Nov. 1943 — 1 + 3 — 3 + 2 + 6 + 19 + 31 + 7 + 13 + 26 + 3 + 18 + 13 + 4 —6 227,221 221,434,152 4,000,464 38,581 — 6 — 9 WHOLESALE TRADE, 244 FIRMS Net Sales Nov. 1944 compared with Nov. Oct. 1944 1943 LINES Auto Supplies (12) * ___ Drugs & Sundries (9)*. Dry Goods (8)* .............. Electrical Goods (10)*.. Groceries (77)* .............. Hardware (15)* ............ Industrial Supplies (10)* Paper & products (7 )*.. Tobacco & products (10)* Miscellaneous (86)* . . . District Average(244)* + 15 + 9 + 8 — 9 + 7 + 12 + 34 — 7 + 1 + 3 + 5 Stock Nov. 30, 1944 compared with Nov. 30 Oct.31 1944 1943 — — — — + — + — 7 3 18 9 2 6 3 12 0 — 2 — 3 + 23 + 23 — 2 — 5 + 10 + 19 + 10 — 22 + 12 — 13 + 4 + + — + + + — — — + + Ratio Nov. collections to accounts outstand’g Nov. 1 3 7 5 1 4 2 3 1 2 1 2 95 142 80 65 153 105 109 93 150 128 109 Source: Department of Commerce. * Number of reporting firms. — 2 AUCTION TOBACCO MARKETING SOFT COAL PRODUCTION IN THOUSANDS OF TONS Nov. Nov. 1943 1944 REGIONS 12,110 West Virginia .. 13,058 1,420 Virginia .......... 1,569 139 128 Maryland .......... 5th District .. .14,766 18,658 United States 50,215 44,643 30.6 % in District.. 29.4 % Change + 8 + 10 + 9 + 8 + 12 11 Mos. 1944 152,270 17,872 1,797 171,939 573,070 30.0 11 Mos. 1943 145,080 17,822 1,700 164,602 538,769 30.6 % Change + 5 + 0 + 6 + 4 + 6 STATES North Carolina Virginia ............ Producers’ Tobacco Sales, Lbs. Nov. 1944 Nov. 1943 . . Fifth District .. . Season through .. . 182,150,833 50,281,240 90,146,647 38,512,789 232,432,073 887,706,790* 128,659,436 681,994,844* * Includes sales on South Carolina markets. Price per Hund. 1944 1943 $44.54 $42.98 44.71 42.93 $44.58 43.20* $42.97 *40.64 MONTHLY REVIEW 12 BUSINESS INDEXES—FIFTH FEDERAL RESERVE DISTRICT Average Daily 1935-39 = 100 Seasonally Adjusted Bank Debits .......................................................... Bituminous Coal Production*............................ Building Contracts Awarded .......................... Building Permits Issued ................................ Cigarette Production ........................................... Cotton Consumption* ......................................... Department Store Sales .................................... Department Store Stocks .................................. Electric Power Production ............................... Employment— Mfg. Industries*......................... Furniture Orders ................................................. Furniture Shipments ........................................... Furniture Unfilled Orders ................................. Retail Furniture Sales ....................................... Life Insurance Sales ........................................... Wholesale Trade— Five Lines ........................... Wholesale Trade— Drugs ................................... Wholesale Trade— Dry Goods - ...................... Wholesale Trade— Groceries ............................ Wholesale Trade— Hardware ........................... Oct. 1944 Sept. Aug. Oct. 1944 1944 1943 205 145 r 72 48 152 142 224 171 2l2 146r 212 121 112 40 153 141 214 181 217 139 115 43 166 145 213 198 197 140 163 64 182 146 191 165 220 212 141 126 130 347 116 145 168 228 118 180 93 150 117 211 137 157 131 458 163 146 175 239 115 188 92 110 334 150 138 156 225 96 168 81 151 112 381 133 120 176 213 136 186 115 % Change Oct. 1944 from Sept/44 Oct/43 — 8 - 1 — 41 +20 1 + 1 — + 5 — 6 — 3 — 1 +37 +19 +37 + 9 + 6 + 4 + 4 — 56 —25 — 16 — 3 +17 + 4 0 — 9 + 34 + 17 +20 +23 +22 1 +12 +12 + 6 +20 +12 — 15 + 1 + 14 — 20 — * Not seasonally adjusted. SUMMARY OF NATIONAL BUSINESS CONDITIONS (Compiled by the Board of Governors of the Federal Reserve System) Output at factories and mines showed little change from October to November. Retail trade expanded further to new record levels. Industrial Production Industrial output in November and the early part of De cember was maintained at approximately the same level that had prevailed during the previous four months. Production of durable goods declined slightly in November, while output of other manufactured goods, especially war supplies, in creased somewhat further and mineral production was main tained in large volume. Output of critical war equipment was larger in November than in October but was still behind schedule, according to the W ar Production Board. Activity in the durable goods industries, particularly ma chinery, transportation equipment, and lumber, continued to be limited in part by manpower shortages. Employment in the transportation equipment industries has declined by about one-fifth during the past twelve months, but total output of aircraft, ships, and combat and motor vehicles has declined by a much smaller amount owing to greater efficiency. In most nondurable goods industries, production was some what greater in November than in the previous month. Activity at explosive and small-arms ammunition plants in creased, reflecting enlarged war production schedules, and output in most other branches of the chemical industry also expanded, reaching levels above those of a year ago. Pro duction in the petroleum refining and rubber industries, chiefly for war uses, increased somewhat in November. Output of manufactured foods showed less decline than i$ usual for this season and was as large as in November 1943. In the textile industry, output at woolen and worsted mills continued to advance in October from the reduced level of operations prevailing during the summer. Cotton consump tion in November was above October and rayon deliveries were at a new record level. ; Mineral production was maintained in November. Coal output was one-fifth larger than in November 1943 when operations were sharply reduced by a work stoppage. In the early part of December, however, coal production was nearly 10 per cent less than in the same period last year. Distribution Value of department store sales in November was 14 per cent above the exceptionally high level last year, about the same year-to-year increase which prevailed in the previous four months. In the first half of December, sales were about 20 per cent larger than last year. All Federal Re serve districts have shown large increases over last year in pre-Christmas sales. Railroad freight carloadings, adjusted for seasonal changes, were maintained at a high level in November and the first two weeks of December. Shipments of most classes of freight, however, were not quite as great as the excep tionally large movement of freight during the same period last year. Commodity Prices Changes in wholesale prices of agricultural and industrial products were mostly upward in November and the early part of December. Retail prices of foods and various other commodities were slightly higher in November than in Octo ber. During the past year there has been a slight upward tendency in prices of most commodities, both in wholesale and retail markets. Bank Credit Banking developments during the four weeks ended De cember 13 were largely determined by the Sixth W ar Loan Drive. Government deposits at weekly reporting banks in 101 cities increased by approximately 8 billion dollars while adjusted demand deposits of individuals and business were drawn down about 2.6 billions in payment for securities pur chased. The reporting banks added 3.7 billion dollars to their holdings of Government securities and increased their loans by 1.7 billion. As a result of the transfer of deposits of individuals and businesses to war loan accounts, reserves required by mem ber banks declined about 700 million dollars from the be ginning of the Drive through mid-December. In addition, reserve funds were supplied to the banking system through the purchase by the Federal Reserve Banks of 640 million dollars of Government securities. These additional reserves were used in part to reduce member bank borrowings at the Reserve Banks, which had risen to nearly 600 million dollars in the latter part of November, and to meet the demand for currency. This demand, though slackened somewhat by the W ar Loan Drive, amounted to 450 million dollars for the four weeks ended December 13. Excess reserves increased by 300 million dollars, principally at country banks.
@FedFRASER