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MONTHLY BUSINESS REVIEW
Fourth Federal Reserve District
Federal Reserve Bank of Cleveland
Covering fin a n c ia l, industrial
and a g ric u ltu ra l conditions
Cleveland, O h io, A pril 30, 1942
Impact of modern total war upon the civilian economy
was evident in two W ar Production Board statements is
sued early in April. One summarized a series of orders
which specify that production of a long list of articles,
mostly consumers’ durable goods, must cease entirely in
the near future. A few other items in this general category
may continue to be made, but the use of critical materials,
chiefly metals, is prohibited in their manufacture. The sec
ond directive stated that the national interest requires de
ferment for the duration of new construction which is not
essential, directly or indirectly, to successful prosecution
of the war and which uses labor and materials needed for
primary and secondary military purposes.
These and other restriction and limitation orders that
have been promulgated form part of a general Govern
mental policy to make men and materials available first to
the war effort and secondarily to meet the more essential
civilian requirements. A generally lower standard of liv
ing for the great m ajority of the population is thus indi
cated, since the supply of goods individuals ordinarily buy
is dwindling and will decrease further as much additional
civilian manufacture is curtailed or ceases altogether, and
stocks on hand are rationed.
Considerable portions of total fourth district productive
facilities already have been converted to war work, and
the process is continuing. The further expansion in indus
trial activity in most fourth district localities during March
and the forepart of April represented acceleration of the
war production effort.
Steel output was increased due to some improvement in
the scrap supply situation. Indications were that the largest
fourth district pig iron producing capacity in history was
in operation April 1. More bituminous coal was being mined
than at any comparable time since the late 1920’s. Ac
cording to reports, coal consumers recently have again
started to accumulate fuel inventories, in line with recom
mendations of numerous Governmental agencies and other
organizations.
Machine tool builders received a record amount of new’
orders in March, following a Governmental statement ad
vising plants planning to enlarge w ar production facili
ties to arrange promptly for equipment. The machine tool
industry itself increased output further, and shipments were
estimated to be at a new all-time peak in March. Foundries
were operating at expanded capacity, as were small tool
No. 4
makers and forge shops. Concerns formerly manufacturing
automotive items have largely converted <to war work and
deliveries of military materiel have been stepped up markedly
in recent months. Companies that heretofore have been
making mechanical refrigerators, home laundry equipment,
vacuum cleaners, and radios have started turning out war
items, while preparing to cease ordinary production.
Operations at window glass plants in March were sharply
higher than usual for that time of the year. Glass container
manufacturers were very busy, primarily as a result of
circumstances requiring changes in packaging styles and
methods. The dinnerware branch of the ceramics industry
was working close to capacity, a rate that has prevailed
for several months. Papermakers have experienced some
decline in new order volume for a few lines recently, but
production has remained at a high level. In the paperboard
industry, a sizable reduction in the backlog of unfilled or
ders occurred in March and early April, when demand from
civilian sources slackened.
While total employment in Ohio manufacturing indus
tries in March was still moderately below the peak reached
early last fall, because of plant conversions under way, pay
rolls advanced to a new all-time record level. A sur
vey by the United States Employment Service in Ohio at
that time indicated that employers in the State probably
would add more than 100,000 people to their working forces
before Labor Day. Four out of every five were expected
to be engaged in war work. In some areas, estimated labor
requirements are thought to exceed the indicated supply.
EMPLOYMENT
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1942
1943
2
THE MONTHLY BUSINESS REVIEW
FINANCE
The Board of Governors of the Federal
Reserve System early in April announced
adoption of Regulation V, pertaining to
the financing of war industries. This regulation, which be
came effective April 6, was based upon an Executive O r
der of the President dated March 26, and was issued pur
suant thereto, after consultation with the W ar and Navy
Departments and the Maritime Commission. The objective
of the regulation, under terms of the Executive Order,
briefly stated, is to facilitate and expedite all phases of war
materiel production, including the obtaining or converting
of manufacturing equipment and supplies, by arranging
for the financing of contractors, subcontractors, and others
engaged in war work. The program contemplates maxi
mum participation of small business enterprises in war
production.
The Federal Reserve Bank of Cleveland, together with
the eleven other reserve banks, has been designated as fis
cal agent of the United States to carry out the purpose of
the Executive Order. Utilization of the reserve system fa
cilities located in every section of the country makes pos
sible a large degree of decentralization of the war financ
ing program, which looks to the fullest practicable partici
pation in such an effort by banks of the United States,
whether members of the Federal Reserve System or not.
Under terms of the Executive Order, the three specified
procurement agencies are authorized to guarantee com
mercial banks, Federal reserve banks, or other financing in
stitutions against loss on loans made to finance companies
doing war work. It is expected that a concern in need of
financial assistance to carry out its military contract com
mitments will first take up its credit requirements with the
commercial bank or other financing institution with which
it customarily deals. When the necessary accommodation
cannot be arranged without the assistance of the W ar or
Navy Department or the Maritime Commission, the financ
ing institution will apply to the Federal reserve bank of
its district for a guarantee of a part or all of the proposed
financing.
The W ar Department intends to appoint a liaison officer
to serve at the Federal Reserve Bank of Cleveland; others
will be stationed at the various reserve banks. These of
ficers will review the application for the guarantee of a
loan and may certify to the reserve bank that the applicant
is qualified, from a technical and management standpoint,
to carry out a contract, subcontract, or order for war sup
plies or equipment. Under initial instructions of the W ar
Department, and upon appointment of a liaison officer,
guarantees or loans up to a prescribed maximum to be
determined by the Department can be made at the reserve
bank without reference to Washington.
Regulation V specifies that rates of interest, fees, and
other charges on loans made or guaranteed in part or en
tirely by the Wrar or Navy Department or the Maritime
Commission through the agency of any Federal reserve
bank will be determined from time to time by the Board
of Governors of the Federal Reserve System after con
sultation with the Government procurement agencies and
the reserve banks. The maturity of any loan or guarantee
shall be consistent w'ith the needs of the borrower for ful
fillment of the contracts or orders for w'hich the financing
is provided. Maturity of a loan made to finance the con
War Industry
Financing:
struction, acquisition, or conversion of production facili
ties to be used for war goods manufacture shall be agreed
upon by the parties concerned, but in no case shall it ex
ceed five years.
In this connection it should also be noted that the Comp
troller of the Currency has advised national banks that the
legal limitation on loans not to exceed ten percent of a
bank’s capital funds will not apply to loans made under
Regulation V, provided the W ar or Navy Department or
the Maritime Commission makes a commitment guaran
teeing the credit extension. Similarly, the superintendents
or banks in Ohio, Pennsylvania, and Kentucky have taken
the position that restrictions on the size of a loan a bank
might make should not apply to loans or parts of loans
made by state-chartered institutions under Regulation V.
It is evident that Regulation V permits a greater par
ticipation on the part of member and nonmember banks
in the financing of war industries. In line with the reserve
banks’ established policy, financial aid is to be provided
first through customary banking and financing channels.
If the amount of credit requested is too large for the in
dividual institution to carry alone, the reserve banks stand
ready to participate in the loan, as they already do on
some types of credit extensions, under terms of section
13b of the Federal Reserve Act. If unusual circumstances
are involved in a war industries loan, the reserve banks
may arrange with the military procurement agency for
which the work is being done to guarantee part or all of
the loan, thus safeguarding the banking structure and min
imizing delay in the production of needed war materiel
for lack of adequate financing.
War Bond
Sales
The accompanying chart graphically portrays the course of W ar Savings Bond
sales through qualified issuing agencies
other than post offices in the fourth district since they
were first offered, as Defense Savings Bonds, in May 1941.
Total sales for individual months have been reduced to
an average daily basis to eliminate the bias resulting from
differences in length of the months.
Prior to December, average daily volume fluctuated be
tween a high of $975,000 in May and a low of $621,000 in
August. Following entrance of the United States into the
war, there was a sharp increase in sales to a daily aver
age of $1,655,000, and a further advance was recorded in
January. Some investors in that month purchased the max
imum amount that might be bought in any one calendar
year. Partially as a consequence, volume dropped markedly
THE MONTHLY BUSINESS REVIEW
in F'ebruary to a level slightly below that prevailing in
December. Another decline occurred in March. During the
first 28 days of April, daily sales made by commercial and
savings banks, loan associations, credit unions, qualified
corporations, the reserve bank, and other agencies in this
district, except post offices, averaged slightly larger than
those of the previous month, but they were only 91 per
cent of December volume.
Between May 1, 1941, and April 28, 1942, Series E, F,
and G bonds having an issue price of $363,751,000 were
sold through qualified fourth district issuing agencies other
than post offices. March sales totaled $37,766,000, and dur
ing the first 28 days of April, purchasers bought $36,253,000
of W ar Savings Bonds.
Total net Treasury receipts from the sale of these issues
for the eleven month period, as shown in the Treasury's daily
statement have amounted to nearly $4,800,000,000. During
the same period, war expenditures have amounted to $17,~
000,000,000.
If commercial banks are not to be called upon to carry
most of the increasing national debt, and thereby accen
tuate ithe inflationary possibilities, it is evident that ever
greater amounts of W ar Savings Bonds must be purchased
by individuals. The Treasury has announced intentions to
solicit funds more actively and hopes to have individuals
voluntarily invest ten percent of their current income,
whether in -the form of wages and salaries, or rents and
dividends, in W ar Savings Bonds.
The person who buys W ar Savings Bonds out of cur
rent income does three things. He helps underwrite the
cost of successful prosecution of the war. He sets aside a
portion of his purchasing power at a time when
military necessities require a reduction in the amount of
goods and services individuals buy, thus reducing the in
flationary pressure of excess purchasing power on prices.
He also accumulates investments which might serve as a
cushion against the readjustment that may be necessary
when the transition to peace occurs.
Consumer
During the first six months of consumer
Instalment
credit regulation, under terms of ReguCredit
lation W, the volume of consumer in
stalment debt held by financial institutions declined appre
ciably, judged by the experience of 32 reporting fourth dis
trict banks. Outstanding consumer credit loans of these in
stitutions were 14 percent smaller on March 31 than six
months earlier. The greater decline, as is indicated in the
accompanying table, occurred in holdings of retail instal
ment paper purchased and the amount of direct retail in
stalment credit and repair and modernization loans made,
which in aggregate were off 23 percent. Personal loan vol
ume was down only one percent.
Changes since the first of the year and during the latest
month present a slightly different picture. The amount of
personal loan credit extended was five percent greater on
March 31 than on December 31, reflecting a ten percent
increase in volume during March. This would indicate
that there* might have been considerable borrowing on the
part of individuals to meet income taxes or to buy goods
which are expected to be scarce later. A decrease in other
types of consumer instalment credit occurred during the
first quarter of 1942. P art of the decline represented the
maturity of loans made to finance the purchase of auto
a
mobiles, though the amount of other retail instalment loans,
both those purchased and made directly, and repair and
modernization loans was correspondingly lower.
Changes in Consumer Instalment Credit Outstanding
(32 Reporting Fourth D istrict Banks)
Instalment paper
purchased, direct
Percentage change
loans, repair and Personal
March 31, 1942, from
modernization loans
loans
September 30, 1941................... —23
— 1
December 31, 1 9 4 1 .................... —18
-f 5
February 28, 1942 ...................
—2
-[-10
Total
— 14
— 8
-f 2
M ember Bank
Credit
A $51,000,000 increase in Government
security holdings of weekly reporting
fourth district member banks in the four
weeks ended April 15 reflected principally their purchase
of $43,000,000 of certificates of indebtedness. Issuance of
these early in April marked the first time since 1934 that
a short-term Treasury obligation carrying an interest cou
pon has been on the market. During the latest period,
$10,000,000 of Treasury notes were added to security port
folios, while Treasury bond holdings declined $2,000,000.
Commercial, industrial, and agricultural loans were paid
off somewhat more rapidly than new commitments were
being made in late March, but during the first two weeks
of April this trend w^as reversed, at least temporarily. On
the latest reporting date, $436,000,000 of these loans were
outstanding, compared with $431,000,000 four weeks earlier
and $384,000,000 a year ago. The present total of this type
of loan is the largest since the classifications currently ob
served were adopted in May 1937. So-called “other” loan
volume declined $6,000,000 to $202,000,000 between March
18 and April 15. Small, offsetting changes occurred in
other loan and security accounts during the latest period.
Following a marked decrease at tax payment time in
mid-March, adjusted demand deposits at weekly report
ing member banks advanced from $1,877,000,000 on March
25 to $1,910,000,000 on April 15. A year ago the total was
$1,686,000,000. Time deposits have declined more or less
steadily since last fall. At the end of March, savings deposits
of 40 banks in Ohio and western Pennsylvania were one per
cent smaller than a month before; a three percent decrease
has been experienced during the past year.
Member Bank
Reserves
Member bank reserve deposits with this
bank fluctuated considerably during the
four weeks ended April 15. On that
date, they totaled $885,875,000, a net decrease of $30,962,000
since mid-March and approximately $95,000,000 in the Ay2
months since reserve requirements were raised to the
highest level permissible by law. During the last half of
March, the latest period for which data are available for
all banks, both required and maintained reserves declined.
On the average, fourth district banks carried reserves that
exceeded requirements by 54 percent. The excess for re
serve city institutions was 51 percent, while that for coun
try banks was 62 percent. For all member banks in the
country, the percentage of excess at the end of March was
thirty-two.
Reserve Bank
Credit
Effective April 11, the general discount
rate of the Cleveland reserve bank was
reduced to one percent from ly i per
cent. The higher rate had prevailed since May 1935. Most
reserve banks recently have acted to establish a uniform
discount rate for the entire country.
€
THE MONTHLY BUSINESS REVIEW
TRADE
There has been considerable discussion regarding what
has happened in retail credit circles since the Board of
Governors of the Federal Reserve System issued Regula
tion W. This was issued in order to carry out the Presi
dent's Executive Order of August 9, 1941, which sets forth
the necessity for and purpose of regulation of consumer
credit.
In an endeavor to ascertain how changed conditions,
some of which are a direct outgrowth of the war, have
affected buying habits of persons accustomed to trade with
department stores in this area, an analysis of the cash and
various kinds of credit sales was undertaken. The charts
on pages 4 and 5 present certain matters having to do
with instalment, regular 30-day charge, and cash sales
at department stores in leading cities of the fourth district.
The chart below shows indexes of cash, regular 30-day
charge, and instalment sales at 24 identical stores, based
on 1935-39 as 100 and adjusted for seasonal variations. As
might be expected, the index of instalment sales shows
relatively the widest swings over the seven year period.
Although total retail sales were recovering along with
employment and payrolls in 1935, the index of cash sales
was somewhat above the indexes representing regular charge
and instalment sales. Beginning in 1936, however, instal
ment buying at department stores picked up appreciably and
the index advanced to a relatively high level in the spring
of 1937, much above the level of the indexes of 30-day
charge and cash sales.
Accompanying the business decline of late 1937 and 1938,
the index of instalment sales receded for practically a year.
Once the industrial advance which began in 1938 got under
way, however, instalment sales again rose faster and to
greater heights than did other types of sales.
Instalment buying seems to proceed in waves. In periods
of active business, there is widespread mortgaging of ex
pected future incomes. The general advance in instal
ment buying which started in 1938 culminated in the
record volume of August 1941, the month prior to the ef
fective date of Regulation W . In that month the index of
instalment sales was 225 percent of the 1935-39 average,
while charge sales were 175 percent and cash sales 160
percent of this same base.
There was the expected sharp contraction in instalment
sales following the effective date of the consumer credit
regulation, but there has been some recovery in the index
of instalment sales this year. Down payment requirements
and a general shortening of length of the credit period,
while undoubtedly restricting some sales, were offset in
part by advance buying. Fear that goods might not be
available or that prices would be higher was responsible
for an unknown volume of purchases.
Starting in 1940 regular charge and cash sales also im
proved, and the indexes showed rather erratic movements
as anticipatory buying occurred. As more persons have
returned to work and because of increased earnings have
had more money to spend, there has been a gradual in
crease in the ratio of cash to total sales.
As the chart on the bottom of page 5 shows, there also
has been a gradual and continuous decline in the ratio of
30-day charge sales to total sales at stores in this dis
trict since 1938. In late 1938 and in 1939 this was offset
by an increase in the ratio of instalment to total sales, but
there was a leveling off in 1940, and since August 1941
there has been a contraction in instalment sales relative to
total sales.
Retail
Following a marked decline in February
from the extraordinarily high January
level, the seasonally adjusted index of
fourth district department store sales advanced ten points
in March to 140 percent of the 1923-25 average. Only
twice has it been higher—in August 1941 and January
1942. Compared with that of March a year ago, dollar
volume last month was 30 percent greater. Several factors
account for this year-to-year gain. Perhaps the most im
portant is the change in price level.
TOE MONTHLY BUSINESS REVIEW
Demand last month was heavy for woolen wearing ap
parel, reflecting consumer reaction to the W ar Produc
tion Board order further restricting the use of top grades
of wool for nonmilitary purposes. Dollar sales of men’s
clothing departments were twice those of a year ago. In
creases in excess of 50 percent were registered by depart
ments handling infants’ wear, women’s and misses’ coats,
suits, blouses, knitgoods and sportswear, boys’ clothing
and a list of other merchandise that included leather a r
ticles, sport goods, games and toys. Independent wearing
apparel stores in this district reported sales to be 42 per
cent larger this March than last.
Fourth district department stores generally made further
additions to inventories during March. At the month end,
stocks averaged 14 per cent greater than on March 1 and
were more than half again as large as those of a year ago.
W earing apparel inventories on April 1 were up 32 per
cent from the level of last year. Outstanding orders of
reporting department stores on the latest date were ap
proximately double those of April 1, 1942, while commit
ments of apparel shops were 176 percent greater.
March sales of individual units in reporting fourth dis
trict grocery chains averaged one-fourth larger this year
than last. Chain drug concerns, also on a unit store basis,
showed a year-to-year increase of 11 percent.
Experience in the fourth district furniture trade varied
considerably in March. W hile dollar sales of all reporting
stores were 18 percent larger than those of a year ago,
dealers in Dayton had an increase of 54 percent, compared
with decreases in Canton and Cincinnati of two percent
and 12 percent, respectively.
Wholesale
March sales of 202 fourth district whole
sale concerns reporting to the Bureau of
the Census were 14 percent greater than
those of the corresponding month last year. While this
margin of gain over a year ago is the narrowest for any
month since November 940, it reflects a sharp advance in
wholesale activity in M arch 1941 rather than any slack
5
ening in aggregate demand in the latest month. In fact,
March dollar volume of these firms was four percent larger
than that of February. For the entire first quarter, total
sales of all reporting wholesalers in this district were onefourth greater this year than last.
Early in April the W ar Production Board published an
order restricting wholesale and retail inventories of a long
list of supplies to twice the dollar value of February sales.
A review of inventory and sales data of representative
fourth district wholesalers indicated that in many instances
stocks on hand April 1 were somewhat under the pre
scribed maximum.
MANUFACTURING, MINING
The American steel industry made 7 393,000 net tons of ingots during March,
more than in any other month in his
tory. Pig iron production also was at an all-time peak of
5,113,000 net tons. National steelmaking operations con
tinued at a near-record rate during the first three weeks
of April. The scrap supply situation recently has improved
considerably. The weather has become more seasonable, and
collection efforts have been intensified. Sizable tonnages of
old metal have been moving to melters from rural areas,
more remote sections of the country, and automobile wreck
ing yards, though scarcity of labor to do this junking work
has been reported occasionally. Some scrap also has been
shipped down the Great Lakes since opening of navigation.
P art of this scrap is of the nonrecurrent type and some
sources may be exhausted.
Navigation on the Great Lakes started about two weeks
earlier than ever before. During March, 793,000 gross tons
of iron ore were loaded into bulk freighters at upper Great
Lakes docks; this is the first time that any shipments have
been made in March.
The Great Lakes ore-carrying fleet numbers 299 ves
sels this year, compared with 291 in 1941. T rip capacity
has been increased from 2,681,000 gross tons to 2,730,000
tons. Seven boats formerly in the automobile trade have
Iron and
Steel
6
THE MONTHLY BUSINESS REVIEW
been or are being converted to carry bulk cargoes. In midApril, 284 vessels with a trip capacity of 2,643,000 tons
were in commission.
Blast furnaces in the United States that depend prin
cipally on Lake Superior iron ore consumed 6,900,000 tons
in March, 11 percent more than in the shorter month of
February, and ten percent more than a year ago. On April
1, ore inventories on Lake Erie docks and at consuming
furnaces in this country totaled 19,551,000 tons, compared
with 26,677,000 tons a month previous and 17,258,000 tons
on the same date last year.
Most new business booked by steel companies during
March and the forepart of April represented either orders
carrying exceptionally high priority ratings or direct al
locations; all pig iron tonnage is being allocated.
Coal
Mining activity in fourth district bitu
minous coal fields increased in March
and early April. Demand for domestic
grades was heavy, reflecting both the announcement of
spring price schedules by most distributors and dealers,
and the campaigns of various organizations and Govern
mental agencies advising consumers to purchase and store
as much of their future fuel requirements as possible be
fore additional transportation facilities are needed for
primary and secondary war purposes. Industrial sizes of
coal continued to move in large volume. Operations at by
product and beehive oven coke plants in this district re
mained at an advanced level; several mines in western Penn
sylvania have been reopened to supply additional high
volatile coal. At least one new mine is being dug in east
ern Kentucky.
Large tonnages, particularly of industrial coals, recently
have been moving to lower Great Lakes’ ports for northern
destinations. During March, 1,251,000 net tons were loaded
into bulk freighters at Lake Erie docks. This is an all-time
record for that month.
Fourth district mines produced 18,410,000 tons of coal
in March, compared with 18,144,000 tons in the corre
sponding month last year, when consumers were building
up stockpiles in anticipation of a mine strike. On a daily
average basis, output last month was three percent greater
than that of February. F or the country as a whole, there
was a decline in March from both the previous month and
a year ago.
Apparel
Industries
The spring manufacturing season of
fourth district consumers’ style goods in
dustries was drawing to a close in April.
Operations, however, were continuing at a higher than
usual rate for that time of year, and working forces at
needlework shops and shoe factories in principal produc
ing centers of the district were contraseasonally large, hav
ing been reduced only nominally from the advanced level
of immediately preceding months.
Some men’s wear manufacturers in April were making
deliveries against orders on which shipments had been de
layed earlier due principally to material shortages. Several
such concerns consequently were in a position to accept
few reorders for current season goods. Bookings of firms
specializing in summer weight suits and sportswear were
reported to be of record size.
Partially because supplies of leather are somewhat limited,
shoe styles are being simplified and some types are being
eliminated altogether. Considerable concern has been ex
pressed locally regarding manufacturers’ ability to obtain
sole leather in such quantities as to fulfill anticipated civ
ilian demand now that top grades of such leather are allocated
for use by the armed services.
Fourth district shoe production increased sharply in
March following reopening of some factories that had been
closed by labor disputes the previous month. Output was
the best for any March in recent years.
CONSTRUCTION
The most important development in the construction
field during the past month was the order issued early in
April by the W ar Production Board which requires that
most new construction be specifically authorized before
work is started.
Prior to promulgation of the Federal order extending a
Governmental policy announced last October that denied
builders priority assistance to secure materials for resi
dential or other construction of a nonessential character,
a high rate of activity prevailed in the fourth district build
ing industry. Construction contracts totaling $48,613,000
were awarded in this district in March. This is the most
work contracted for in any similar month since 1930. On
an average daily basis, March volume was one-fourth
greater than that of February. For the entire first quarter,
fourth district building awards aggregated $115,454,000,
compared with $92,518,000 in the corresponding 1941 pe
riod. One-third of work contracted for in fourth district
areas during the first three months of 1942 was for pri
vate account; in the 37 eastern states for which the F . W .
Dodge Corporation compiles data the proportion was 28
percent.
As might be expected, manufacturing buildings erected
to expand war production facilities represented the greatest
part of nonresidential construction activity in this district
during the first quarter of the year, although a consider
able amount of miscellaneous construction was started in
southern sections of the district in March. While some mul
tiple unit dwellings were built during the first three months
of the year, residential work in this district was largely
confined to one-family homes, and the majority of these
were built for sale or rent.
A W ar Production Board order issued the first week in
April strictly limits inventories of builders’ and construction
supplies in the hands of distributors or dealers to twice the
dollar value of February 1942 sales. Several fourth dis
trict concerns consequently are having to reduce stocks,
a fewr by appreciable amounts even though inventories gen
erally were said to be poorly related to demand. Some
correspondents reported in mid-April that only a few cus
tomers had canceled orders for lumber and other items
after publication of the W ar Production Board directive
deferring nonessential construction.
AGRICULTURE
The general level of agricultural commodity prices con
tinued to advance during March and early April, princi
pally as a result of further increases in livestock m ar
kets. Hog prices at principal stockyards in this district,
as elsewhere throughout the country, rose to successive
sixteen-year peaks.
Except for some grain planted late last fall, most of the
fourth district wheat acreage came through the winter in
good shape. Comparatively few seeded fields are expected
THE MONTHLY BUSINESS REVIEW
to be abandoned, according to the Bureau of Agricultural
Economics' crop report for April 1. Though pastures were
furnishing little feed at that time, conditions were sharply
better than average for that date.
Field work has been delayed in many sections of the
district due to wet weather which prevented plowing of
sod land. Preparation of open ground, however, was going
ahead on a somewhat limited basis early in April. Favor
able conditions prevailed in the Kentucky hurley belt late
in March, when most tobacco beds were seeded. Prospects
are that larger acreages of practically all spring-sown crops
will be planted this year than last in Ohio. A 52 percent in
crease in soybean acreage was expected at the time of the
April 1 crop report, and intentions then were to plant 20
percent more land to sugar beets this year than in 1941.
D ebits to Individual Accounts
,
..
.
,
Franklin..........
Greensburg. . .
Hamilton. . . . .
H om estead.. . .
M iddletown.. .
Oil C ity...........
Springfield. . . .
Steubenville...
T oledo.........
Wholesale an d R eta il Trade
(1942 compared with 1941)
Percentage
Increase or Decrease
SALES
SALES
STOCKS
MARCH
first 3
M ARCH
1942
months
1942
D EPA R TM E N T STORES (96)
Akron......................................................... ................. + 3 4
+40
+ 61
Canton................................................................. ....... -{-34
+39
a
Cincinnati........................ .................................. ....... + 2 7
+28
+59
Cleveland.................................................................... + 3 9
+39
+ 53
Columbus............. .............................................. .......+ 2 4
+29
+52
Erie......................................................................... .....+ 3 5
+40
+42
Pittsburgh............................................................. .....+ 2 9
+ 31
+ 55
Springfield.............................................................
+16
+29a
Toledo.....................................................................
+26
+ 31 + 52
Wheeling.....................................................
+26
+ 3 0 +31
Youngstown...............................................................+ 13
+ 23
a
+36
+ 55
Other Cities...............................................................+ 2 6
D istrict........................................................................+ 3 0
+ 33
+55
W EARING APPAREL (16)
C anton.........................................................................+ 4 9
+41
+39
Cincinnati...................................................................4*46
+37
+33
+42
+16
Cleveland.................................................................... + 4 5
Pittsburgh...................................................................4*43
443
445
Other Cities...............................................................+ 3 2
+ 32
+ 39
D istrict................................................................... .....+ 4 2
+38
+32
FU R N IT U R E (41)
C a n t o n .................................................. ..................— 2
+15
C incinnati...................................................................+ 7
4-25
Cleveland....................................................................4 2 1
4-18
Columbus....................................................................— 12
— 1
D ayton ................................................................... .....+ 5 4
+42
Toledo..........................................................................+ 2 4
+ 31
Other C ities...............................................................+ 4 4
+36
D istrict........................................................................4 l 8
4*21
CHAIN STORES*
+19
Drugs— District (5 )................................ ................+ 1 1
Groceries— District (4 )..................................... .....+ 2 5
+39
WHOLESALE TRADE**
Automotive Supplies (1 0 ).................... ................+ 2
+20
+22
Beer (5 )................... . . . ............................................+ 2 7
+27
+ 8
Clothing and Furnishings (4 )........................ .....+ 1 4
4*21
a
Confectionery (5 )............................................... ..... + 1 9
4-28
+14
Drugs and Drug Sundries (6 ) ...................... .....+ 1 6
4 l6
4*17
Dry Goods (7 ).................................................... ..... + 2 9
+45
+ 21
Electrical Goods (1 4 ).............................................— 5
421
— 6
Fresh Fruits and Vegetables (6 ).......................+ 1 4
4 l8
+49
Grocery Group (4 2 ).......................................... ..... 4-13
+28
4-41
Total Hardware Group (3 5 )............................... 4-33
+40
+ 9
General Hardware (1 0 )............................... ..... + 43
+47
+ 4
Industrial Supplies (13).................................... 4 2 9
435
424
Plumbing & Heating Supplies (1 2 )........... .....4 2 0
+37
4 l8
Lumber and Building Materials (4)........... ..... 4-10
— 2
a
Machinery, Equip. & Sup. (exc. Elect.) (6 ) .. + 1 0
+20
— 13
M eats and Meat Products (5 )........................... 4-27
+30
+ 7
Metals (4 ).................................................................. — 24
— 16
a
Paints and Varnishes (6 )..................................... + 13
+37
+22
Paper and its Products (7)................................. 4-43
440
a
Tobacco and its Products (1 5 ).................... ..... 4-18
4-14
— 0—
Miscellaneous (21)................................................... + 1 9
+24
+ 1
District— All Wholesale Trade (2 0 2 )............... + 1 4
+ 25
+16
* Per individual unit operated.
** Wholesale data compiled by U. S. Department of Commerce, Bureau of
the Census.
a N ot available.
Figures in parentheses indicate number of firms reporting sales.
T
Y oungstown. .
T otal............. . .
4 Weeks
ended
April 15,
1942
106,459
11,923
55,385
440,459
810,697
222,581
100,129
41,660
4,251
9,408
16,337
4,220
19,398
19,154
6.241
17,012
11,941
915,013
12,188
22,278
10,887
180,465
18,783
29,655
66,787
9,866
3,163,177
(Thousands of Dollars)
Year to Date
%
change
Jan. 2, 1942
from
to
1941
Apr. 15, 1942
377,497
+ 2 3 .2
45,929
+ 9 .2
+ 1 8 .0
208,240
+ 9 .4
1,702,983
+ 12.4
2,988,895
+ 2 0 .7
812,765
370,359
+ 9.5
156,600
+ 2 5 .0
16,530
+ 14.2
36,600
+ 2 5 .2
59,834
+ 2 3 .1
16,459
+ 17.5
+ 6 .7
108,659
+ 1 9 .8
71,745
+ 10.2
23,871
+ 2 2 .4
63,739
+ 2 8 .7
46,238
+ 9 .4
3,458,784
+ 1 9 .4
46,746
+ 8.1
82,804
+ 5.9
40,645
+ 2 7 .4
645,557
+ 2 3 .6
62,795
106,969
— 11.1
+ 11.0
244,057
38,765
+ 10.1
11,834,065
+ 12.7
Year to Date
Jan. 2, 1941
to
Apr. 16, 1941
297,351
39,081
171,388
1,408,086
2,540,088
671,204
308,371
120,985
12,888
28,581
46,803
9,891
98,730
59,089
20,147
49,563
35,308
3,180,729
36,486
72,841
36,917
526,148
52,005
112,803
207,125
33,754
10,171,362
07'
/o
change
from
1941
+ 2 7 .0
+ 1 7 .5
+ 2 1 .5
+ 2 0 .9
+ 1 7 .7
+ 2 1 .1
+ 2 0 .1
+ 2 9 .4
+ 2 8 .3
+ 2 8 .1
+ 2 7 .8
+ 6 6 .4
+ 10.1
+ 2 1 .4
+ 1 8 .5
+ 2 8 .6
+ 3 1 .0
+ 8.7
+ 2 8 .1
+ 13.7
+ 1 0 .1
+ 2 2 .7
+ 2 0 .7
— 5.2
+ 17.8
+ 1 4 .8
+ 16.3
Fourth D istrict Business Indexes
(1923-25 = 100)
Bank debits (24 cities)........................................
Commercial Failures (N um ber)........................
”
”
(Liabilities)......................
Sales— Life Insurance (O. and P a .)....................
” — Department Stores (48 firms)...............
” — Wholesale Drugs (6 firms)...................
” —
”
Dry Goods (7 firms).........
” —
”
Groceries (42 firms)...........
” —
”
Hardware (35 firms)..........
” —
”
All (90 firms)........................
” — Chain Drugs (4 firms)*..........................
Building Contracts (T otal)...................................
”
”
(R esidential)........................
Production— Coal (O., W. Pa., E. K y .)...........
”
— Elec. Power (O., Pa., Ky.)**. . . .
”
— Petroleum (O., Pa., K y.)**.........
”
— Shoes..................................... .............
* Per individual unit operated.
** February,
a N ot available.
Mar. Mar.
1942 1941
132
110
40
56
19
23
77
93
126
95
134
116
76
59
90
79
156
117
108
90
123
110
102
74
120
91
102
100
272
261
104
101
129
128
Mar. Mar. Mar.
1940 1939 1938
88
78
74
53
52
57
33
38
45
85
85
81
86
82
76
113
120
107
46
47
43
66
70
72
74
71
72
69
71
71
98
a
90
59
57
54
72
68
40
74
74
55
213
187
166
117
101
115
113
138
131
Fourth D istrict Business S ta tistics
(000 omitted)
Fourth District Unless March % change Jan.-Mar.
Otherwise Specified
1942 from 1941
1942
Bank Debits— 24 cities. ..... .. .3 3 , 5 7 2 ,0 0 0
+20
10,105,000
Savings Deposits— end of month:
40 banks O. and W. Pa............... $ 771,985 — 3
........
Life Insurance Sales:
Ohio and Pa........................74,545
— 17308,315
Retail Sales:
Dept. Stores— 96 firms................$
36,455
+30
96,256
Wearing Apparel— 16 firms. . . . $
1,722
-j-42
4,063
Furniture— 41 firms......................$
1,419
4-18
3,773
Building Contracts— T otal........... 3
48,613
4-39
115,454
— Residential. $ 20,652
+32
53,295
Commercial Failures— Liabilities $
818
— 18
1,955
” .
”
— Number
58
— 28
151
Production:
Pig Iron— U. S............... nec tons
5,113
+ 9
14,586
Steel Ingot— U. S...........net tons
7,393
4 4
21,039
Bituminous Coal, O., W. Pa.,
E. Ky............................ net tons
18,410
+ 1
52,948
Elec. Power, O., Pa., Ky.
.................................thous. k.w.h.
2,286a + 4
4,826b
Petroleum— O., Pa., K y ....b b ls.
1,929a 4- 4
4,051b
c
4- 1
c
Shoes........................ .................pairs
Bituminous Coal Shipments:
L. E. Ports.......................... net tons
1,251
+39
a February
c confidential
b Jan.-Mar.
% change
from 1941
+ 19
+26
+ 33
+39
+21
+ 25
+44
— 44
— 25
+8
+ 4
+ 4
+10
+ 2
— 10
8
THE MONTHLY BUSINESS REVIEW
Sum m ary of National Business Conditions
By the Board of Governors of the Federal Reserve System
in d u s t r ia l
p r o d u c tio n
Federal Reserve m onthly index of physical
volum e of production, adjusted for season
al variation, 1935-39 average = 100. Sub
groups shown are expressed in term s of
points in th e to ta l index.
DEPARTMENT STORE SALES AND STOCKS
Federal R eserve m onthly indexes of value
of sales and stocks, adjusted for seasonal
variation, 1923-25 average = 100.
MEMBER BANKS IN 101 LEADING CITIES
W ednesday figures.
Commercial loans,
which include industrial and agricultural
loans, represent prior to May 19, 1937 socalled “Other loan s” as then reported.
MEMBER BANK RESERVES
W ednesday figures. Required and excess
reserves, but not th e total, are partly e sti
m ated.
Industrial activity continued at a high rate in March and the first
half of April. Distribution of commodities to consumers was maintained
in large volume and commodity prices advanced further.
Production
Volume of industrial production increased seasonally in March and
the Board’s adjusted index remained at 172 per cent of the 1935-39 aver
age. Output of durable manufactured products, now m ostly war mater
ials, continued to advance, reflecting mainly increased activity in the
iron and steel, machinery, aviation, and shipbuilding industries. Produc
tion of lumber and cement, which had been maintained at unusually high
levels during the winter months, increased less than seasonally in
March.
In most industries manufacturing nondurable goods activity was sus
tained at earlier high levels. In some, however, notably wool textiles
and petroleum refining, there were declines owing to restrictions on pro
duction for civilian use and, in the case of petroleum products, to trans
portation difficulties. Mineral production declined in March and the first
half of April, reflecting sharp curtailment in output of crude petroleum.
Coal production, which usually declines at this season, was maintained in
large volume. The Great Lakes shipping season opened in the latter
part of March and the first boatload of iron ore reached lower Lake
ports 12 days earlier than the record set last year.
Value of construction contract awards continued to increase in March,
according to figures of the F. W. Dodge Corporation, and the level of
the first quarter of 1942 was the highest in recent years, being some 30
per cent above that of the corresponding period last year. Awards for
public work amounted to close to 80 per cent of the total and in the
residential field accounted for 52 per cent of the value of all projects.
Publicly-financed contracts for factory construction showed a sharp in
crease, partly offset in the total by a decline in private factory con
struction.
On April 9 the War Production Board issued an order which required
explicit permission of the Government for initiation of all new private
construction involving expenditures in excess of specified sm all amounts
and not covered by specific priority ratings.
Distribution
Value of retail trade in March continued at the high level of other
recent months, making allowance for customary seasonal changes. Sales
at department and variety stores increased by somewhat less than the
usual seasonal amount while sales by mail-order houses rose more than
seasonally.
On the railroads total loadings of revenue freight were maintained
in large volume in March and the first half of April. Shipments of coal
and coke declined less than seasonally and ore loadings increased sharp
ly, while grain shipments declined further from the peak reached in
January. Loadings of miscellaneous merchandise, which had been un
usually largei in the preceding three months, increased less than sea
sonally.
Commodity Prices
The general level of wholesale commodity prices advanced 1% per
cent further from the middle of March to the middle of April. Among
manufactured products, finished consumers’ goods, such as foods, cloth
ing, and shoes, continued to show the largest price increases. Prices
of most raw materials were unchanged or showed increases, which
in a number of cases reflected the raising of Federal maximum price
levels. There were declines in prices of wheat and of a few other com
modities, including gasoline at Gulf ports and turpentine.
In retail markets maximum prices were fixed in this period for a
number of electrical products, most of which w ill no longer be produced
for civilian use after May 31. Prices of many other commodities and
services advanced further.
Bank Credit
During the four weeks ending April 15 holdings of Government se
curities at banks in leading cities increased by nearly 700 million dollars,
w hile commercial loans declined somewhat, following a rise in previous
weeks. Changes in member bank reserves and deposits reflected prin
cipally the temporary effects of Treasury operations in connection with
income tax collection and the sale of certificates of indebtedness. Money
in circulation continued to increase.
United States Government Security Prices
Following an advance from the mid-February low, prices of U. S.
Government bonds remained relatively steady in the first half of April.
@FedFRASER