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F E D E R A L RESERVE B A N K OF R I C H M O N D DECEMBER 1958 From molten g la ss to a crystal-cle ar vase. The artisan sh ap es his product by b lo w in g a ir into it a g a in st the sides of a rem ovable m old. The Glassmakers F ragile crystal goblets for elegant table settings . . . tempered sheet glass that bends like rubber . . . glass fiber yarn that w ill repeatedly hoist a thou sand-pound block without breaking . . . pressed glass building blocks that take the place of bricks and wood . . . lam inated aircraft glass which re sists the friction of supersonic flight. These are only a few of the m ultitude of w idely varied uses of glass in the 20th century. xA.lthough man has known about glass since about 5000 B. C., only in the present century have its properties begun to be effectively developed. AN A N CIEN T INDUSTRY H istorians tell us that 2 glass was first produced by Phoenician sailors who beached their ship on the shore of a Syrian river. They cooked their food in a pot resting on two blocks of soda from the ship’s cargo. W hen the fire died down, the blocks of soda sank into the sand. A shiny, greenish m aterial flowed from the center of the bed of coals. W hen it hardened, glass was formed. The early glass industry was centered in Egypt but production methods were so tedious that prices were high and only the princely classes could af ford the lu xu ry items. In 300 B. C. a Phoenician artisan invented the blow-pipe and objects which had previously taken hours to make could be turned out in minutes. The Romans were the first to realize the possibilities of the blow-pipe and the use of glass widened considerably. From Rome the glassm aking art spread the length and breadth of the Empire. Tow ard the end of the 4th century the Romans lost their dominance and Constanti nople became the glass capital. B y the 6th century the Byzantines had produced glorious stained glass windows that later decorated the great cathedrals of Europe. Through all these years glass had been used mostly as a medium for decorators to display their talents for color, carving and design. It was not until the 15th century that the V enetians recog nized the inherent beauty of glass itself. In fact, the fame of V enetian glass was such that drastic steps had to be taken to guard against the leaking of trade secrets. As a result, the entire glass industry was moved to the neighboring island of Murano where thousands of artisans worked in secrecy be hind iron bars. In addition to perfecting the tech nique of glassm aking, the Venetians contributed greatly to the science of glass in developing the first essentially colorless and transparent glass. Glass became a tool of science in the 16th and 17th centuries, and w ays were found to produce special types of glass to perform particular func tions. Among other giant steps forward, a Dutch scientist developed a microscope using a single short-focus lens and the French learned to make polished plate glass. M any of the greatest ad vances in the chem istry of glass, however, have been made in the last 50 years in the com paratively new A m erican glass industry. AM ERICA'S FIRST INDUSTRY In spite of the fact that glassm aking w as one of the earliest industrial arts practiced by the colonists, the industry en countered almost insurm ountable handicaps and for over a century the story w as one of continuous trials and collapses. Glass m anufacturing was started at Jam estown in 1608 and again in 1620 but both ventures failed after a few7 years. Capable w orkers were scarce due to stringent m igration law7s that kept artisans from leaving European glass h o uses; the grade of glass sand found along the coast wyas very p o o r; and American homes of the 17th and even 18th centuries required but little glass. The English glass industry wras actually very strong at this time and colonists who could afford it preferred glass from the motherland. The real birth of the A m erican industry came in 1739 when Caspar W istar established a factory A fin ishe d g a llo n ju g m oves dow n the line a s an autom atic b lo w in g m achine fin ishe s the next one an d star?*; on a third. in New7 Jersey. He used imported Belgian w orkers and for forty-two years produced high quality glassw are. Another great name in A m erican glass is H enry W illiam Stiegel, who is generally cred ited writh first m aking lead glass in this country. Although S tiegel’s factory at M anheim , P a., oper ated only nine years, it produced some of the finest art glassw are this country had yet seen. The first A m erican glass company to operate on a big scale w as the Boston and Sandwrich Company founded in 1825. Modern mass produc tion methods in the industry are the outcome of this company’s use of iron molds to press glass. Our vast container industry grew out of the neces sity for bottles of standard size to hold w hisky which—because of its relatively constant value— was sometimes used as currency during the years of the w estw ard expansion. A lthough the nation was developing rapidly, the glass industry did not become stable until the end of the 19th century when a series of technical advances in this country caused a mechanical revo lution that changed and industrialized the whole industry. An early 20th century event of particu 3 lar interest to this section of the country was the first com m ercially successful draw ing of window glass on the Colburn machine at Charleston, W est V irgin ia in 1911. SILICA , SO D A , LIME Probably no other manufac tured m aterial is made from ingredients which are available so inexpensively or in such quantities as are the components of glass. The most commonly used “batch”-—the m ixture of raw m aterials which is to be melted into glass— is composed of about 72% silica (glass san d ), 15% soda, 9% lime and 4% other substances. U sually included is “cullet” — broken glass of the kind being produced—which is added to facilitate m elting and cause ready fusing. A ny slight change in the elements added changes the color or other special characteristics of the glass. For instance, alum ina improves chemical durability and lead gives sparkle and luster as w ell as good electrical properties. The ingredients are carefully weighed, mixed dry and pushed into a tank or pot furnace of special heat-resisting brick. A t about 2800° F. the batch melts and becomes a syrupy liquid which is allowed to cool to a taffy-like consistency so that it can be handled. The sm aller pot furnace is used mostly for art glass, colored glass or other special composition glass used in lim ited quantities. Most glass today is made in tank furnaces, the sm allest of which are “d ay” furnaces that melt and refine in one day the glass to be worked out by hand shops the next day. The largest tank furnaces are found in the window and plate glass factories. T hey operate continously anyw here from eighteen months to two years stopping only when it is necessary to make repairs. SH A PIN G G LA SS There are three basic processes for shaping g la s s : blowing, pressing and drawing. In hand blowing, a gob of molten glass is gathered from the furnace on the end of an iron blow-pipe. The w orker—called a gaffer—blows through the pipe and forms the hot glass into a hollow ball. The size and shape of the article is controlled by the air the glassblower forces into it and by his hand tools, m any of which are unchanged since the M iddle A ges. For the past few hundred years, most blown objects have been formed in molds. A fter the hot bulb of glass is formed it is placed in an open mold. The mold is closed and the bulb blown out to the size of the mold. T oday blowing machines have largely replaced the human blower, turning out hollow-ware items such as bottles, light bulbs, and Christm as tree ornaments at a rate of hundreds per minute. 4 P ressing glass involves dropping an exact amount of white-hot glass into a mold and forcing it to the shape of the mold by use of a plunger which also shapes the inside of the object. A gain, hand molds have largely been replaced by auto m atic presses which deliver a finished piece only seconds after the molten glass leaves the furnace. Dishes, fuse plugs, automobile head lamps, and in sulators are types of glassw are produced by this method. D raw ing too m ay be done by hand or machine. In hand draw ing, a large gather of molten glass is made on the blowing iron and rolled into a partially conical shape. A sm all bubble of air is forced into the gather. A helper attaches another iron to the unsupported end of the cone and w alks aw ay from the gaffer stretching the glass. A fanner cools the tube and checks the diameter. M achine draw ing is accomplished by pulleys, rollers, air jets and other devices that draw the molten glass out of the furnace, either vertically or horizontally, stretching it to almost any needed length and size. T his method is responsible for most of our flat glass, tubing and glass fibers. Plate glass is high quality flat glass which is subjected to the additional operations of grinding and polishing. R egardless of the method used to shape it, nearly all glassw are is annealed im m ediately after it has been formed. The article passes into a tunnel-like oven, is p artially reheated and slowly cooled. T his process corrects and controls any stresses and strains in the glass caused by too rapid cooling. DISTRICT G LASSM AKERS Among D istrict states, W est V irg in ia ranks as one of the leading glass m anufacturing states in the nation, while M a ry land and South C arolina also have important operations. North C arolina w ill soon enter the field when a giant continuous fiber glass plant is opened at Shelby. The industry gives employ ment to about 16,000 persons in W est V irgin ia, over 2,000 in M aryland and about 1,000 in South Carolina. W est V irg in ia’s prominence in the field is due largely to two reso urces: fuel and silica. First, ample coal deposits were available to fire the fur naces and, more recently, ready natural gas sup plies have been used. P ractically pure glass sand is found in W est V irg in ia’s A lleghaney plateau, one of the principal sources of silica in the United States. The flat glass industry has been centered in H arrison and K anaw ha counties in W est V ir ginia but a sizeable operation began shipping Molten g la ss is d raw n from a tan k by form ing rolls w hich send it alo n g a set of rollers as a continuous ribbon of rough plate g lass. finished plate glass in A lleghaney County, M ary land at the end of 1957. Capital investment per plant is especially great in this segment of the industry and the number of companies operating in this field is quite limited. P late and window glass together accounted for over 70% of value of flat glass shipments in 1954. The bulk of this glass is sold to the automobile and building trades. Thus, the welfare of the flat glass industry is closely related to the number of housing starts and the automobile production rate. Glassm akers are encouraged by the trend for more glass in houses and cars. The largest segment of the D istrict's glass in dustry in terms of employment, and probably value added as well, is the glass container division. Its chemical inertness assures no reaction w ith food or other substances. Customers also like to see the products they are purchasing. In spite of tough competition from paper, plastic, aluminum and other m aterials, glass accounts for about the same percentage of the total container m arket that it did 20 years ago. Centers of container m anu facture are Baltim ore, and M arion, H arrison, Cabell and K anaw ha counties in W est V irginia. Of even greater importance as a W est V irgin ia employment outlet, however, is the pressed and blown glass industry aside from containers. In m any w ays this is the most exciting part of the modern day glass story. H ere the gaffer can still be found blowing fine tablew are and vases. Several sm all specialty houses— some employing as few as five persons—m anufacture ornam ental glass a rti cles of beautiful design and color. One firm, for instance, makes only communion glasses. The popular m ilk glass, “antique” glass and novelty bar supplies are the work of these glass houses. THE O U TLO O K A damper on the industry in re cent years has been a tremendous increase in im ports of foreign glass and glass products. T heir value nearly doubled in the three years 1954-57. Cost advantages and lowered tariff barriers are said by the domestic producers to be responsible for the increase. On the other hand, the almost continual develop ment of desirable new products through research makes the future seem quite bright. It is estimated that present-day products utilize only about 1% of the potential strength of glass. A lready on the m arket in a lim ited w ay is a new fam ily of crystal line m aterials made from glass that is harder than steel, lighter than alum inum and more than nine times stronger than plate glass. Thus, the glass makers look to a future of new opportunities and new demands. 5 W est V irg in ia d v ^ O M S N orth C arolina For years West V irgin ia has led the field as the big producer-user of natural ga s in the District. Since 1951 ga s lines have cropped up all over the area, the number of customers has increased nearly two-fifths, and revenues are up a w hopping 124%. This seems to be just the beginning. Residential customers greatly outnumber other groups but industrial users consume just as much gas. USER GROUPS as % of total g a s sold, 1957 Total Md. Residential C om m ercial 100.0 67.3 8.5 22.4 Ind u strial O ther 23.6 0.6 D. C. 100.0 72.3 1.5 3.8 Va. 100.0 42.7 10.7 42.8 3.8 W. Va. 100.0 43.5 11.2 43.1 2.2 N. C. 100.0 20.6 8.7 68.9 1.8 S. C. 100.0 7.6 4.5 87.6 0.3 Total 100.0 43.9 10.3 43.8 2.0 U. S. 100.0 32.4 8.9 53.5 5.2 REVENUES thousands o f do llars 1951 Md. D. C. Va. W. Va. N. C. S. C. Total U. S. 3 MONTH TREASURY BILLS Yi el d INDUSTRIAL PRODUCTION i ndex 4.0 3.0 \ ------------------V 2.0 110 \ £ - / \ I 1 |Oct. '57 1 1 1 1 1 1 1 \ \ \ / 1 K 1.0 \ 1 1 1 I Oct. '58 ^ I I I Oct. '57 \ i , i : . , ! ■. Oct. '58 Credit Conditions Reflect Economic Recovery The spectacular recovery of the economy from the sharp recession of late 1957 and early 1958 has drawn attention to m any contributing in fluences. Principal among these influences are changes in the availability and cost of credit-— influences of which most people are but dim ly aw are until the revealing light of drastic change is thrown upon them. As the recession accelerated in the latter months of 1957 and on through the unusually severe w inter months of early 1958, the borrowing of money became much easier and less costly for those w ith the incentives to borrow. E asy av ail ability of credit continued when the economy turned upw ard with unexpected vigor after the late spring thaws. Business indicators affirmed w idespread re covery throughout the early weeks of summer and borrowing costs began inching upward. Then, following hectic uncertainty in Ju ly , flexible in terest rates rose dram atically during A ugust as investors and speculators, anticipating even more substantial increases in rates, seemed to compress long-range expectations into a relatively few dem oralizing trading weeks. Since then, m any interest rates have declined slightly. In spite of the increase in interest costs since the end of the recession, the availability of funds 8 has remained high—there is no evidence that any significant number of borrowers have been unable to obtain needed credit. THE B A N KIN G PICTURE The enigm atic recession and recovery have been vividly reflected in bank ing operations. In spite of the short-lived preChristm as spurt in custom ers’ borrowings in 1957 and another moderate jum p in the spring of this year, total loans outstanding at all commercial banks at the end of M ay 1958 stood at almost exactly the same level as at the beginning of No vember in the preceding year. In the five months since M ay, loan demand at the banks has picked up with the recovery, but the demand has not come prim arily from commercial and industrial enter prises. A ccording to a sample of banks that report loan data w eekly, commercial and industrial loans, after an expected jum p in Jun e to support tax payments, declined steadily to the end of Ju ly . In A ugust and September demands from business borrowers pushed the banks’ total loans up mod erately, but then in October commercial and indus trial loans remained virtu ally unchanged. In November there were signs that the seasonal upsw ing in business loans was beginning to appear, but the increases were not as large as expected. Although the nation’s bankers found loan de mand disappointing as the recession deepened, they were not without consolation. A s an an ti recession m easure, reserve requirements of mem ber banks were reduced three times in the early months of 1958, freeing approxim ately $1,440 million of reserve funds. On the basis of these freed funds, other Federal Reserve easing actions, and a relatively weak loan demand, the nation’s commercial banks were able to acquire $7.7 billion of securities in the seven months ending with M ay 1958. Furtherm ore, the relatively high availability of reserve funds in the early stages of recovery enabled the banks to add $3.7 billion more to their investm ent portfolios over the next five months. Thus, in the span of one eventful year from the end of October 1957 through October ju st past commercial banks added $11.4 billion to their in vestment portfolios and $1.8 billion to their loans. M O RTGA G E LENDERS The availability of money for home mortgages has also strikingly reflected the impact of recession and recovery. W hen inter est yields on marketable securities declined writh the recession and held at low levels in the early months of recovery, the return from m ortgage loans became much more attractive to investors. Such lenders as insurance companies and commer cial banks began diverting larger amounts to the m ortgage m arket. Other mortgage lenders, such as m utual savings banks and savings and loan as sociations, put v irtu ally all of an increasing flow of saving into home m ortgages. As a result of these forces, home builders found, during most of the first half of this year, an in creased w illingness on the part of m ortgage lenders to commit themselves to make m ortgage loans on new houses. T hey also found lending term s very favorable, both from their own point of view and from that of the home buyer. M any builders throughout the country took advantage of this w illingness to make commitments and expanded their building operations. This expansion in home building began to be reflected in the number of new houses started as early as M arch. In each month after that, the number of houses started— taking account of seasonal variations— rose almost steadily until in October new houses wrere being started at an annual rate of 1,260,000, the highest level of home construction since September 1955. Reflecting the increased availab ility of funds for home mortgages in the first half of the year, in terest rates on conventional m ortgage loans (loans not guaranteed or insured by the Government) fell off sharply. M any prime m ortgage loans were made with a rate of 5% or 5Y \°/c, loans which just a few months earlier would have been made at 5^4% or 6% . Furtherm ore, discounts on Govern ment guaranteed and insured loans—loans with in terest rate ceilings fixed by the Federal Govern ment—were greatly reduced. In some parts of the country 5Y\c/ c F H A loans were sold at or slightly above par, indicating a lower rate of return than when these loans were sold below par. A s economic recovery w as sustained month after month, interest rates on conventional home mortgage loans began moving upward, and dis counts on Government insured and guaranteed loans began increasing. A ccording to a monthly Federal H ousing A uthority survey, F H A 5j4 % loans which were selling at the beginning of A u gust at 99.2 had dropped to 97.5 by November 1. H owever, qualified builders were having no difficulty in obtaining commitments. F urther Investm ent departm ents of b an ks stayed unusually busy in 1958 investing new fu n ds and fo llo w in g rap id ly ch a n g in g securities m arkets. more, most builders had already received commit ments from lenders to make loans on their new houses under the terms that existed earlier in the year, and m any of these commitments were still outstanding. Thus the financing of new home construction is well taken care of for 1958, and the m ortgage lenders w ill be closing out a high volume of loans in the rem aining months of the year and perhaps well into 1959. INSTALM ENT LO A N S FOR CONSUM ERS Con sumer credit is strikin gly different from other types of credit in its response to recession and recovery. Interest charges on many types of con sumer loans generally rem ain fixed regardless of changes in other credit conditions in large m easure because of the high cost of extending credit to consumers. However, increased availab ility of credit for consumers m ay be reflected in easier repaym ent terms, and lenders showed increasing w illingness as the year progressed to make a larger proportion of their loans with m axim um m atur ities. B y the end of 1958 m any lenders accepted 36 months as their standard m aturity on new car loans including lenders who had m aintained a standard of 30 months ju st a year earlier. On the borrowing side of the picture, when recession begins to reduce personal income and create uncertainty as to the continuance of income in the future, there is a reluctance on the part of m any to use credit. T his reluctance was reflected in a slowing down in the amount of new credit extended in the fall of 1957 and a very sharp drop in credit extended, after taking account of seasonal variations, in the w inter months of early 1958. A s personal income improved during the spring and summer, consumers began expanding their instalment borrowing, although very moderately. Repaym ents on existin g debt, however, were still large enough to cause outstanding instalment cred it to decline in almost every month of 1958. THE SECURITIES M ARKETS The m arkets in which bonds, notes, and other debt instruments of cor porations and governments are traded are by far the most sensitive of all the credit arrangem ents to changes in general economic developments. A s a m atter of fact, their sensitivity generally goes beyond actual changes, and is frequently and dis turbingly stim ulated by changes in expectations. In mid-November of 1957 a change in Federal Reserve discount rates gave a clear-cut signal to the m arkets of a reversal of credit policy. O pera tions in the securities m arkets which followed this signal compressed into the short space of about 10 two months a sharp decline in interest rates which might norm ally have been expected to m aterialize grad ually over a much longer period. The situation w as almost exactly reversed in the late summer of this year. A s the economic re covery proceeded w ith some assurance through M ay, June, and Ju ly , the expectation grew stronger in the m arkets that the trend of interest rates must be upward. A gain the discounting of expectations compressed into a single month a l most as great a rise in yields as the drop that was experienced earlier—a rise which m ight norm ally have been more gradual and longer drawn out. Corporate and state and local government de mands for funds in the securities m arkets remained at very high levels throughout the recession and on through the early months of the recovery. New security offerings and placements are estimated to total $14.9 billion in the first nine months of 1958. This is slightly above the previous record of $14.6 billion set in the sim ilar period in 1957 and well above the $11.5 billion in the same period in 1956. On top of these heavy demands, the U. S. T reas ury found it necessary to enter the m arket, both to raise new money and to refund m aturing issues. A m ajor T reasury offering is an important event in the financial world, and the T reasury offered securities for cash on seven different occasions during the year, the total am ounting to $17.1 bil lion. In addition, it completed three m ajor re fundings of m aturing securities, the total amount of securities retired am ounting to $54.9 billion. CAU SE AN D EFFECT Developments in the credit m arkets of the nation over the past year clearly indicate their responsiveness to changes in levels of production, employment, and incomes. It m ay not be at once apparent, however, that changing credit conditions also exert significant influences on pro duction and consumption. G reatly increased liquid ity of the banking system , promoting a much easier availab ility of funds throughout other credit m ar kets, not only assures the absence of financial stringency as a contributing factor to recession but provides a positive contribution to recovery through increased inducement to use credit for business and personal endeavors. C ontrariwise, whenever the economy moves through the recovery phase of the business cycle, increasing demands for funds, in combination w ith appropriate mone tary policy, result in lessening the easy availability of credit. E ventually, the reduced availability of credit acts as a brake upon the development of unsustainable, inflationary expansion. The Fifth District Recovery continues to be reflected in the over all m easures of D istrict economic activity. Employment was up again in October, after allowance for seasonal influences, and man-hours in m anu facturing industries continued the rise that started last M ay. The increases were widespread, with nearly every m ajor category of employment and m an-hours showing gains from September. TEXTILES Operations in the textile industry carry forward the gradual stepping-up that had been occurring for some time, and market news gives promise of further gains. The improvement, a l though substantial, is not of boom proportions. The significant point is that it appears to be a soundly based recovery. It has progressed slowly but steadily since last fall, and it extends pretty much from top to bottom—from retail sales of apparel to orders for yarn and gray goods. F ur thermore, the improvement has been fairly com prehensive : it has included apparel fabrics, sheet ings, drapery goods, and other cloth for household uses, and fabrics for industrial applications. Synthetics have also shown both market and pro duction gains recently. Forw ard buying has increased significantly, especially for unfinished cotton goods, an 1 the bulk of first quarter production of print cloth has been sold. A fair amount of business has been booked for the second quarter as well. As a result, prices have increased somewhat. M ill work schedules have also increased, although a number still call for less than six days per week. As reported last month, a large number of mills have announced plans for shutdowns during Christm as week. This follows fairly widespread shutdowns over the past T hanksgiving holiday period. Thus, at the same time that the demand side of the textile m arket has been improving, the mills are exerting efforts 011 the supply side to continue the industry recovery. T heir aim is to ad ju st production schedules and output to demand so that increases in the latter are not smothered by even sharper increases in supply. H eavy m anufacturing inventories have been a millstone around the necks of the cotton gray goods producers for the last two years and more. K nitting m ills are operating at their best levels this year. M any producers of women’s seamless hosiery and knitted tights are encountering de livery problems despite full-capacity operations. BITUMINOUS C O A L Recent weeks have brought a number of important developments in the bitu minous coal industry. Output in District mines fell somewhat in October from the September level, and the early weeks of November saw a continuing lower rate of operation. Foreign shipments through D istrict ports have declined considerably as large coal stocks in Furope led to cancellations of contracts for coal from this country. Increasing coal inventories in Germany have brought restrictions on coal im ports and a shift of the Ruhr steel industry to domestic fuel. O verseas shipments of bituminous coal from this country are now estimated for 1958 at 38,000.000 tons, down one-third from 1957. E arlier reports of an increase in soft coal m iners’ wages have now been confirmed. A new wage agreem ent between U nited M ine W orkers and the producers calls for a $2 a day wage in crease in two steps, $1.20 011 Jan u ary 1 and $0.80 A bitum inous coal custom er goes to the m ines. This 450,000 kilo w att g e n era tin g p lant in southw estern V irg in ia is expected to burn 1,300,000 tons of co al per y e a r from a nearby mine. 11 iii A pril. The present basic daily wage is $22.25. The resulting increase in labor cost per ton has led to announcements of price increases in Ja n u ary, but these are gen erally expected to be less than the cost increases in view of the strong com petition coal faces from other fuels. Of significance for the future of bituminous coal was the recent opening of a $150 million coaltransportation-power project in the western tip of V irginia. The Cliuchfield Coal Company division of the Pittston Company started operation of its new Moss No. 2 and Moss No. 3 mines, expected to produce 5,000,000 tons of coal annually. To handle the expected traffic of 350-500 coal cars daily, the Norfolk and W estern R ailw ay invested $13.5 million in railroad facilities, including a m ile-and-a-half tunnel. The Appalachian Power Company constructed a 450,000 kilow att generat ing plant to take advantage of the new coal source ; it w ill burn 1,300,000 tons annually, providing a m arket for one-fourth of thp new output at a distance of but a few miles. AGRICULTURE L eading analysts of the U . S. Department of A griculture recently took a careful look at w hat’s ahead for agriculture in 1959. H ighlights of what they saw in the outlook for m ajor D istrict farm products shape up about like th is : Supplies of most kinds of tobacco are lower than a year ago. The quantity of tobacco used in cigarettes turned upw ards in 1957-58, and a fur ther small increase is likely in 1958-59 as cigarette consumption is expected to continue to trend up ward. Tobacco exports may be down a little from last season’s levels, however. The cotton carry-over is now sharply below the 1956 peak, and a further small decline appears likely in 1958-59. E xports w ill be sm aller, but a slight increase in domestic mill consumption is expected. Supplies of peanuts are abundant. Farm prices will likely average near support levels in 1958-59 but less than a year earlier. M arketing of hogs next year w ill be consider ably larger than in 1958, and prices will be much lower next fall than now. Cattle prices w ill probably hold up well in 1959. Supplies of poultry and eggs will probably be higher in the first half of 1959 than in the same period this year. Because of the larger output, poultry product prices w ill likely average some what lower than in 1958. 12 Slight increases in both the production and con sumption of m ilk are probable for 1959. Produc tion w ill likely continue above commercial usage, however, and farm prices for m anufacturing m ilk and butterfat w ill probably continue to hold around the support level. CO N STRU CTIO N Contract aw ards in October were down from Septem ber’s total, with most of the loss in public w orks and utilities. Residential aw ards, accounting for nearly one-half the total, continued their high level of recent months. The $223 million total for all types is still very high, however, by any standards other than recent months, and on a seasonally adjusted basis, it was down very little from September. RETAIL TRADE Department store sales declined y/ c in November after seasonal adjustm ent. This somewhat disappointing performance did not deter the stores though, for at the month-end their stocks and outstanding orders were up an esti mated 5(/c. from a year ago in anticipation of good Christm as sales. T hanksgiving week brought encouragement for this hope, as bad weather in much of the D istrict on the important F rid ay of that week failed to halt a gain in sales over last y ear’s good total. BA N KIN G The big news in District banking has been the continued upsurge in business loans of the w eekly reporting member banks, the 38 larger banks that have nearly one-half the total banking resources in the D istrict. T heir loans to business increased throughout November and into the first week of December for a gain of nearly 4 c/c in five weeks—considerably more than the rise in the corresponding weeks of other years. The gain was w idespread, with three-fourths of the banks showing increases. Further, nearly all categories of business, from food processors to sales finance companies, have shared in the greater borrowing. P H O TO C RED ITS C o ve r—Lib b e y-O w e n s-F ord C o rn in g G la ss W orks 3. G la ss b u rgh Plate G la s s C o m p an y N atio n a l B ank 11. Company O w en s-Illin o is 5. 2. Pitts 9. First & M erchants A p p a la ch ia n Statistical D ata 6 & 7. A m erican Pow er C o m p an y. G a s A ssociation.
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