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Busin Covering financial, industrial and a g ric u ltu ra l co n d itio n s eview Fourth Federal Reserve District Federal Reserve Bank of Cleveland V o l. 26______________________ Cleveland Ohio, April 29, 1944________________________ No. 4 FINANCIAL Member ^ Bank Credit j n recent weeks, fourth district member banks, especially those in larger centers, have had to give increasing consideration to the matter of maintaining their cash reserves at or above the legal minimum. Under present techniques of war finance, this problem subsides somewhat while war loan campaigns are in progress and becomes more acute in the ensuing intervals. The origin of this delayed action can be traced to the Treasury’s policy of not taking immediate delivery of the proceeds of each respective war loan. During drives, individuals, corporations, and other subscribers surrender deposits for the bulk of their subscriptions; the credits are merely transferred to the Treasury’s account with de positary banks— subject to withdrawal at a later date. This shift temporarily creates excess reserves by virtue of the fact that deposits payable to the Treasury are ex empt (since April 1943) from the statutory reserve re quirements applicable to the same deposits when payable to individuals, partnerships, and corporations. When the Treasury begins to withdraw its funds, the process is re versed. On February 16, all fourth district depositary banks owed the Treasury some $1,100,000,000 in the form of credits in war loan accounts. In actual practice, those Government credit balances can be liquidated only by drafts on member bank balances at the reserve banks, which on that date were $950,000,000. Obviously, immediate delivery in full would have been quite impossible. A similar situation existed at the con clusion of each preceding war loan drive, and the pro cedure devised by the Treasury for averting sudden and sharp demands upon member bank reserves is perhaps the most satisfactory that can be devised. By spreading withdrawals over the interval between drives, and more or less in proportion to the Treasury’s daily needs, the transfer of funds is accomplished without hardship on most banks. By late April, through a series of calls, the Treasury had withdrawn nearly $400,000,000 of its funds at de positary banks in this district. These Federal deposits were redistributed with equal rapidity, but not at the same rate in this district nor in proportion to withdrawals among the various depositary banks. This uneven redistribution accentuates the problem of maintaining reserves for certain banks, and was undoubt edly responsible, in part, for the increase in early April of over $100,000,000 of Treasury bills held under repur chase option. The Federal Reserve Bank of Cleveland had $175,000,000 of such bills on April 11. Fourth dis trict member banks in need of reserves elected to replenish them by this method rather than by borrowing, which at no time during April exceeded $630,000. Later in the month, the situation eased somewhat and member banks repurchased Treasury bills amounting to $60,000,000. Another factor which persistently affects reserves ad versely is the net outflow of currency into circulation. From February 16 to the end of April, this drain is esti mated at approximately $50,000,000 for the fourth dis trict. This is somewhat in excess of the rate prevailing a year ago, and is of such dimensions as to be a noticeable influence almost continuously. CHANGES IN OWNERSHIP OF DEMAND DEPOSITS’ Several interesting and possibly significant changes in deposits were disclosed by the February 29 deposit owner ship survey. During the period from July 31, 1943, to the end of February 1944, certain types of deposits ran sharply against the general trend and scored substantial increases. A few types decreased more rapidly than the average. Salient characteristics of deposit behavior in the fourth district, during the seven months under review were: 1. Large banks experienced a slight reduction in de mand deposits; whereas smaller banks show a 5.4 percent increase. This increase at smaller banks can be attributed chiefly to the marked dollar growth of the under-$3,000 accounts. 2. Demand deposits of public utilities (including rail roads) increased noticeably— by as much as 32 percent at the smaller banks. 3. Farmers’ accounts (above $3,000) expanded by °T h e term “ demand deposits” as used herein refers exclusively to such deposits payable to individuals, partnerships, and corporations. THE MONTHLY BUSINESS REVIEW 2 nearly 30 percent during those seven months at the smaller banks. 4. Balances of insurance companies and other financial firms declined measurably (11 and 16 percent) at both large and smaller banks. 5. Demand deposits held to the credit of foreign in dividuals or foreign institutions, other than banks, de creased by nearly 42 percent. 6. Contrary to the general upward trend of recent years, balances of manufacturing and mining enterprises remained virtually unchanged. Large The relative size of the several classifications of fianks demand deposits is indicated in the accompany ing chart. At the large banks, manufacturing and mining accounts overshadow all the rest, comprising nearly one-half the aggregate. Ranking next in order of size are the under-$ 10,000 accounts, which represent near ly one-fifth of total demand deposits. Demand deposits of these 36 large banks stood at $2,657,000,000 on July 31, 1943, and at $2,626,000,000 on February 29, 1944, at the end of the Fourth War Loan Drive. The $30,800,000 (1.2 percent) net shrinkage was the result of the following uneven movements: Changes from July 3 1 ,1 9 4 3 , to F eb . 2 9 , 1 9 4 4 --------Increases--------------- Decreases-------Type of Deposit Dollars Percent Dollars Percent Accounts of $ 1 0 ,0 0 0 and Over Nonm etal Mining & Mfg. $ 1 0 ,7 0 0 ,0 0 0 3 .2 7 ,7 0 0 ,0 0 0 4 .8 Public Utilities ..................... Nonprofit Organizations . . 1 ,2 0 0 ,0 0 0 2 .5 R etail & W h o lesale............. $ 1 0 0 ,0 0 0 * All O ther Nonfinancial . . 1 0 0 ,0 0 0 0 .1 4 1 .7 F oreign ..................................... ............................................1 ,5 0 0 ,0 0 0 Trust Funds of Banks. . . . 4 ,1 0 0 ,0 0 0 4 .3 Personal (includ. Farm ers) 5 ,9 0 0 ,0 0 0 2 .8 Insurance Companies . . . . 6 ,7 0 0 ,0 0 0 1 5 .8 Metal Mining & Mfg.......... ............................................9 ,6 0 0 ,0 0 0 1.1 A ll O ther F i n a n c i a l ........... 1 3 ,9 0 0 ,0 0 0 1 1 .7 All Accounts Below $ 1 0 ,0 0 0 8 ,3 0 0 ,0 0 0 1 .7 N et Change ........................... $ 3 0 ,8 0 0 ,0 0 0 1 .2 °L ess than 0 .1 percent. The influence of the Third and Fourth War Loan Drives conducted within this interval is rather clearly indicated. Those campaigns were an important factor operating on the downside and presumably caused some relative shrink age in each of the twelve categories listed. Notwithstand ing such reductions, three classes of deposits show a net gain for the period, tax payments and war loan subscrip tions having been more than offset by funds accumulated through other activities. The substantial sum involved in the moderate shrink age, percentagewise, of small accounts suggests that basic fluctuations in the under-$10,000 class should not be over looked in estimating future deposit changes. Smaller Banks The sample of 53 smaller banks was limited to institutions whose demand deposits, with a few exceptions, ranged from $2,000,000 to $6,000,000. The percentage distribution of their demand de posits (see accompanying chart) differed somewhat from the large banks. More prominent in these banks were the retail and wholesale, farmer and other personal, and the under-$3,000 accounts. Also in contrast to the large banks, total demand de posits of these smaller banks actually increased from $212,- 100,000 on July 31, 1943, to $223,500,000 on February 29. The $11,400,000 expansion was the outcome of the following diverse changes: Changes from July 3 1 , 1 9 4 3 , to F e b . 2 9 ,1 9 4 4 --------Increases-------------D ecreases-----Dollars Percen t Dollars Percent 6 ,4 0 0 ,0 0 0 1 0 .2 Type of Deposit All Accounts Below $ 3 , 0 0 0 . . . $ All Accounts of $ 3 ,0 0 0 and Over Nonfarm Personal ................... Public Utilities ........................ R etail & W holesale ............. Farm ers ........................................ All Other Nonfinancial........... Nonprofit Organizations . . . . All Mining & Manufacturing AU Financial ............................. N et Change 3 ,1 0 0 ,0 0 0 1 ,8 0 0 ,0 0 0 1 ,1 0 0 ,0 0 0 1 ,1 0 0 ,0 0 0 2 0 0 ,0 0 0 1 0 .9 3 2 .1 3 .8 2 9 .8 2 .3 $ ................................$ 1 1 ,4 0 0 ,0 0 0 1 7 ,0 0 0 6 0 0 ,0 0 0 1 ,8 0 0 ,0 0 0 0 .3 1.3 1 0 .8 5 .4 Deposits of these smaller banks are subject to the same influences as those of larger banks, namely, war loans, war expenditures, restrictions on civilian production, short ages of consumer goods, and other war-borne circum stances. However, there appears to be some variation in the degree of these influences upon the two size groups of banks. In the case of smaller banks, the net effect of these factors was a modest expansion of demand de posits, whereas during the same interval the large banks experienced a slight decrease of demand deposits. The major problem of large banks seems to be one of estimating as carefully as possible the probable future trend of their manufacturing and mining accounts, which comprise nearly one-half of their total deposits. Changes in financial policy of large corporations, or future eco nomic developments affecting cash holdings of manufac turing and mining concerns, are of especial significance to large banks. Smaller banks may justifiably devote more attention toward analyzing the trend in the below-$3,000 accounts. Any development tending to reduce retail and wholesale, personal and small business balances, such as a largescale resumption of civilian output, might have a dispro portionately adverse effect upon total demand deposits of smaller banks. In the case of a limited number of large banks, quite comparable deposit data are available almost from Pearl Harbor to date. The fol lowing figures constitute a sample about one-half as large as the 36-bank group analyzed above. Using December 31, 1941, as 100, the relative changes Wartime Trends COMPOSITION OF DEMAND DEPOSITS Fourth District February 29, 1944 36 Large Banks 53 Smaller Banks 100/ Manufacturing and Mining 46.7/. Financial Personal Retail and Wholesale Public Utilities All Other Nonfinancial Nonprofit Organizations All Unclassified Accounts *3,000 THE MONTHLY BUSINESS REVIEW among several broad classes of demand deposits have been as follows: D em and Deposits of Twelve Fourth District Banks D ec. 3 1 , 1941 Type of Deposit All Accounts of $ 1 0 0 ,0 0 0 and O ver9 M anufacturing & Mining. . . . . 100 100 Public Utilities ..................... R etail & W holesale ............. 10 0 100 All Financial Accounts . . Nonprofit Organizations 100 Personal ..................................... 100 All Accounts Below $ 1 0 0 ,0 0 0 100 T o tal Dem and Deposits . . 100 M ar. 3 1 , 1943 July 3 1 , F e b . 2 9 , 1943 1944 189 141 212 122 187 81 130 148 197 129 19 5 138 202 73 138 154 196 134 189 118 266 71 141 153 •Three banks classified all accounts down to $ 5 0 ,0 0 0 , on the first two dates. Only two types of accounts, nonprofit associations and the unclassified group, show uninterrupted increases. The manufacturing accounts, which comprise the bulk of the demand deposits of many large banks, show no de cided change for the past year, remaining close to 100 percent above the level at the outbreak of the war. The large personal account category is the only one to record a consistently downward trend. New Member Bank Fidelity Deposit Bank of Derry, Derry, Pennsylvania MANUFACTURING, MINING Manpower The most critical of national economic trends at present is factory employment. From a high of 14,007,000 in November of 1943, the total num 3 ber of wage earners in all manufacturing concerns has de clined 500,000 in a period of four months, according to releases of the Department of Labor. Apparently a de crease both in supply and demand in the labor market has contributed to the decline in the total figure. Some of the decline (as in canning of food products) was seasonal. Cutbacks and cancelations accounted for a drop of 100,000 in chemicals, small arms, and explosives. In the over-all picture of manpower, however, a decrease in supply was equally important as the decrease in de mand. Steel, textiles, and lumber, all industries that still need additions to their working force, experienced a drop of 100,000 employees in the four-month period. A de crease in demand for women in canning and ordnance manufacturing does not increase the supply of labor for steel or lumber mills. The release of skilled toolmakers does not offset the acute shortage in common labor. Effective April 1, the War Manpower Commission re classified seven communities formerly included in group I as areas of acute labor shortage, to group II, areas an ticipating labor shortage within six months. Over-all, areas of acute shortage declined from 72 in March to 67 in April. In the fourth district, the only change occurred in Marion, Ohio, which was moved from group III to group II indicating a tight labor situation in that city. Because of contradictory trends in employment, the problem of reconversion is further complicated; it is en couraged in areas of labor surplus and discouraged in areas of acute labor shortage. Iron Steel production continues to hold at high and Steel levels of operation and varied but little during the past month. In the latter part of April, 98.5 percent capacity operation obtained and no decline in production rate was anticipated. Steel ingot produc tion for March totaled 7,804,704 net tons, an increase over March 1943 of 29,838 tons. Pig iron production holds fairly steady and totaled 5,434,240 net tons in March. Due to a shortage of cast scrap, foundries are using more pig iron. Other grades of scrap are plentiful and, although stocks have declined approximately 600,000 tons since last June, there is no immediate shortage in sight. Since producers have in creased the proportion of hot metal to scrap in melts, ton nage of scrap required has been lowered and consumers have been more selective in their purchases. Some of the less desirable grades have been selling at below ceil ing prices. Opening of navigation on the Great Lakes (which started about ten days earlier this year than last) is re lied on to bring down considerable scrap accumulated during the winter on the Upper Lakes. Stocks of ore at furnaces and on Lake Erie docks totaled 21,000,000 gross tons on April 1. Consumption has totaled slightly more than 7,000,000 tons per month and no shortage is prob able. Sheets and plates continue to dominate steel schedules with no early easing of pressure in sight. In addition to heavy needs of war, steel is required for railroad equip ment and agricultural machinery, both programs having been broadened to meet the needs of transportation and food production. 4 THE MONTHLY BUSINESS REVIEW Bituminous Bituminous coal production in the Fourth Coal Federal Reserve District totaled 20,125,000 tons in March, approximately 775,000 tons less than production in March 1943. From a peak reached early in February of this year, coal production has de clined at a fairly steady rate. The Solid Fuels Admin istration predicts a demand for approximately 620,000,000 tons of bituminous and 66,000,000 tons of anthracite coal for 1944. With the expectation of production totaling 600,000,000 tons of bituminous and 60,000,000 tons of anthracite in the coming year, it was expected that the shortage could be drawn from existing stockpiles which on March 1 totaled 52,738,000 tons, the lowest level since August 1941. The system of distributing coal is based on production nearly equaling consumption. Continued drafting of young men seriously affects this balance. Coal operators expect mine production to continue its decline as average age of employees in the mines rises. The high absentee rate extant in coal mines is attributed to the fact that the older men cannot stand the increased hours of the work week now in force. Other Manufacturing Developments in the rubber industry inelude inability of tire fabricating plants to process synthetic rubber in the quan tities now being produced. Since it takes nearly twice as long to make tires and retread materials out of syn thetic as it does out of crude or reclaimed rubber, the ex pansion in fabricating equipment and additions to work ing forces apparently have not kept pace with synthetic rubber output. Inventories are accumulating and many restrictions on use of synthetic rubber have been removed. Paper and paperboard manufacturers continue opera tions restricted by a shortage of raw material and man power. Under pressure of military requirements for pack aging, the decline in production of paper and paperboard has resulted in an acute shortage of coarse paper items, both in the hands of dealers and in inventories at the mills. Behind the shortage of raw materials at the pulp mills is the manpower shortage in the timber-producing regions in the Northwest. Stocks of lumber are so low that 1944 requirements will have to be met from cur rent production. Of the quota of 35.5 billion feet needed in 1944, 50 percent will be used by the military, 25 per cent for indirect military needs, and the remainder for civilian use. There appears no early prospect of relief in either industry. Ceramics and glass manufacturers continue to report but slight changes in levels of operation. Plate glass production in March rose to the highest total (8,702,000 square feet) in 25 months, but still was far below the peacetime production rate. Shoe production in the fourth district totaled 1,400,000 pairs in March, the highest level of operation attained since August 1942. The shoe in dustry continues to report a shortage of both men and materials. AGRICULTURE Heavy rainfall during the last three months has ended the concern over the depleted water supply which had become so acute during the preceding six months. Feb ruary rainfall in Ohio was 2.45 inches as compared with 1.68 inches for the same month last year. March was said to be the wettest March since 1922 in the crop-pro ducing areas. April rainfall has been much above normal in the fourth district States as well as in most of the im portant crop areas. The crop that will suffer most if the excessive rainfall continues is oats. Prospective plantings as of March 1 this year indicated a two percent increase in acreage over last year in the fourth district States, as compared with an indicated eight percent increase for the United States. However, delayed plowing may affect the acre age that can be planted, and late seeding in most years seriously reduces the yield. While pasture conditions are reported in as good as or slightly better than average condition for this time of year, cold weather has retarded spring growth. Changes in Farm Real Estate Values Increases in farm real estate values in the States of the fourth district did not keep pace with the national increase last year. Whereas the national increase during the year ended March 1 was 15 percent over the average value of the preceding year, in the fourth district increases were, by State: Ohio— 14 percent; Kentucky— 12 percent; Penn sylvania— 7 percent; West Virginia— 6 percent. In no other year of World War II have all of the increases in fourth district States been below the country-wide average. These data, which were made available recently by the Bureau of Agricultural Economics, do not, however, pro vide bases for complacency with regard to the problem of rising land values in the fourth district. Land value increases during the first five years of World War I re- THE MONTHLY BUSINESS REVIEW suited in sale prices out of line with long-run farm in come possibilities, and many who bought farms at these inflated prices later lost possession through foreclosure. Significantly, value increases on a percentage basis in the fourth district States since 1939 parallel fairly closely the value movements during the 1914-1919 period. The following tabulation shows that percentage increases in Ohio and Pennsylvania since 1939 have actually exceeded the increases which occurred in comparable years of the first world war. Increases in Farm Land Values Fou rth D istrict States 1 9 1 4 -1 9 1 9 Ohio ..................................................... 3 2% 65 iventucky .......................................... Pennsylvania .................................. 22 W est Virginia ................................ 31 1 9 3 9 -1 9 4 4 46% 54 26 24 Although percentage increases in land values since 1939 have about equaled those of the similar period during the first world war, a study of the accompanying chart shows that, with the exception of Kentucky, values were lower at the beginning of the current war and conse quently actual dollar increases have been smaller. The chart also points out that farm land values in Ohio, Penn sylvania, and West Virginia are still considerably less than they were during W^orld War I. The lower section of the chart shows that this is likewise true for the United States as a whole. On the other hand, current farm real estate values in Kentucky are at about the same height as they were during the last war, and they have experienced about the same increase as they did last time. Recently the Federal Reserve Rank of Cleveland con tacted representative country bankers in the major agri cultural sections of the fourth district to obtain firsthand reports on the farm real estate situation. Probably the most outstanding condition uncovered was the almost unanimous agreement among the bankers that to date there has been little or no speculation in farm lands. Operating farmers were reported to be purchasing the majority of farms changing hands although considerable purchasing by non-farmers was noted in northwestern Ohio. About one-half of the bankers indicated active transferring of farm ownership in their communities. How ever, there were reports from some counties where the number of transfers was said to be only normal and some where the number was reported to be subnormal. Increases in farm land prices reported by bankers rep resenting western and northwestern Ohio were relatively large compared to reports from other parts of the district. Southeastern Ohio and southwestern Pennsylvania ap peared to be areas of least increase. Reports of land price increases since 1939 varied among all reports from “none” to “60 percent.” A few reports stated that there has been some leveling off of farm land prices in recent months. In general, the reports indicated that although farm land prices have risen during the war, in the opinions of the respondent bankers prices have not yet reached “boom” levels and cannot now be characterized accurately as “inflationary.” 5 January 31, 1944. This growth, however, was far from uniform throughout the various departments. The effect of war upon department store business may be seen by examining some of these variations. The improvement in main store sales since 1939 was greater than that of the basement store, several factors contributing to this larger increase. With salary and wage payments at the highest level on record last year, many customers had more money to spend than ever before and, as a result, were able to buy more expensive merchandise than they did previously. Still another contributing factor was the absence and shortages of many types of popular-priced merchandise usually sold in basement stores. Manufac turers have curtailed production of many of these items. The increases that occurred among the main store de partments since 1939 showed considerable variation, as shown on the accompanying chart. Sales of women’s ready-to-wear and accessories rose quite steadily during this period, and piece goods sales during fiscal 1943 were nearly twice as large as they were in 1939. In contrast to these gains, the dollar sales of men’s and boys’ wear increased only slightly since 1941 and housefurnishings sales declined somewhat. The decrease in sales of ar ticles for the home resulted largely from reduced inven tories of these items. Stores reported that they generally had more difficulty in obtaining housefurnishings than textile products. This was especially true of major house hold appliances; sales of these during 1943 were only D epartm ent Store Sales—A nnual Indexes 1939 = 100 Fiscal years ended J a n u a r y 31: 1940 1941 1942 1943 M A I N S T O R E , T O T A L ................................................. P I E C E G O O D S , T O T A L ............................................... S i l k s , V e l v e t s , W o o l e n D r e s s G o o d s .................. C o t t o n W a s h G o o d s ........................................................ S M A L L W A R E S , T O T A L ............................................. L a c e s , T r i m m i n g s , F l o w e r s , e t c ............................. T o i l e t A r t i c l e s , D r u g S u n d r i e s ............................... S i l v e r w a r e a n d J e w e l r y ................................................. A r t N e e d l e w o r k , A r t G o o d s ..................................... B o o k s , S t a t i o n e r y .............................................................. R E A D Y -T O -W E A R A C C E SSO R IE S, T O TA L N e c k w e a r a n d S c a r f s ...................................................... H a n d k e r c h i e f s ....................................................................... C o r s e t s a n d B r a s s i e r e s ................................................... H o s i e r y ( W o m e n ’ s a n d C h i l d r e n ’ s ) .................... W o m e n ’ s U n d e r w e a r ....................................................... I n f a n t s ’ W e a r ....................................................................... L e a t h e r G o o d s ( s m a l l ) ................................................... S h o e s ( W o m e n ’ s a n d C h i l d r e n ’ s ) ......................... W O M E N ’S A N D M IS S E S ’ R E A D Y -T O W E A R , T O T A L ..................................................................... C o a t s a n d S u i t s ................................................................... Blouses, Skirts, K nitgoods, Sp ortsw e ar. . . . J u n i o r s ’ a n d G i r l s ’ W e a r ............................................. A p r o n s , H o u s e D r e s s e s , a n d U n i f o r m s ............ T O T A L W O M E N ’S W E A R I N G A P P A R E L & A C C E S S O R I E S ................................................................. M E N ’ S A N D B O Y S ’ W E A R , T O T A L .............. M e n ’s C l o t h i n g .................................................................... M e n ’s F u r n i s h i n g s ( I n c l u d i n g H a t s & C a p s ) . B o y s ’ C l o t h i n g a n d F u r n i s h i n g s ........................... M e n ’s a n d B o y s ’ S h o e s ................................................. H O U S E F U R N I S H I N G S , T O T A L ......................... D o m e s t i c F l o o r C o v e r i n g s .......................................... D r a p e r i e s , C u r t a i n s , U p h o l s t e r y .......................... L a m p s , S h a d e s ..................................................................... C h i n a , G l a s s w a r e ............................................................... H o u s e w a r e s ............................................................................. TRADE M ISC ELLA N EO U S T o y s a n d G a m e s ................................................................. S p o r t G o o d s ( I n c l u d i n g C a m e r a s ) ....................... Department store sales in the fourth district showed a steady increase during the past several years and reached a record high during the year ended R e s t a u r a n t s ............................................................................ B e a u t y S a l o n ......................................................................... P h o t o g r a p h i c S t u d i o ....................................................... B A S E M E N T S T O R E , T O T A L ............................... Retail 108 98 96 100 108 94 108 108 109 111 107 1 05 110 102 102 101 105 103 1 05 110 10 5 106 132 115 1 11 1 19 131 104 130 13 3 137 130 125 124 149 118 11 1 10 3 13 1 116 126 140 125 126 1 45 144 134 159 149 129 153 146 158 142 150 148 200 136 118 1 15 138 135 147 192 153 154 164 196 188 213 182 210 174 180 18 5 16 5 194 176 288 173 145 147 160 136 190 253 194 1 63 108 103 107 110 110 107 121 130 129 122 143 133 125 137 150 1 55 1 31 174 161 138 142 189 1 95 162 219 2 13 157 17 9 106 107 109 10 5 107 1 05 1 11 110 116 112 110 109 110 111 112 126 127 132 122 128 1 23 14 3 141 151 137 1 31 132 155 143 146 147 132 1 21 132 15 1 137 1 39 134 154 153 135 128 10 1 15 3 146 179 140 116 14 3 186 126 135 127 162 174 147 142 34 136 168 104 109 108 106 1 03 118 108 125 138 13 8 119 116 150 127 153 127 170 139 143 228 142 155 95 211 175 177 3 51 14 9 6 THE MONTHLY BUSINESS REVIEW one-third the 1939 volume and down 78 percent from the peak of 1941. Whereas sales of appliances accounted for over eight percent of all housefurnishings sold dur ing 1939, the ratio dropped to three percent last year. The annual indexes for sales by departments at all reporting fourth district stores are shown in the table on page 5. Department store sales during March 1944 were up 15 percent from those of the same month a year ago and were the largest for any similar period on record. Two factors contributed to this record-high volume. One was the fact that Easter occurred two weeks earlier this year than last, which caused much of the pre-Easter buy ing to fall in March. The second factor was the large amount of purchases that took place in order to avoid the Federal excise taxes that became effective April 1. Sales of toilet articles were up 81 percent, leather goods 75 percent, silverware and jewelry 51 percent, and lug gage 28 percent. Total March sales advanced more than seasonally from those of February, and, as a result, the adjusted index rose from 165 percent to 185 percent of the 1935-39 daily average. During the three months ended March 31, total sales were one percent larger this year than last. At the end of last month, total department store stocks were up two percent from the previous month-end and 13 percent from March 31, 1943. The seasonally adjusted stocks index declined eight points to 149 percent of the 1935-39 base, as the increase in inventories that occurred during March was less than usual for that month. Wholesale The Department of Commerce reports that sales at 181 wholesale firms in this district were six percent larger this March than last. Firms sell ing dry goods, fresh fruits and vegetables, hardware, lumber, and building materials reported that their sales were smaller, while sales of confectionery were up 34 percent, automotive supplies 30 percent, jewelry 22 per cent, groceries 14 percent, and paints and varnishes 4 percent. During the first three months of this year, the increase in total sales over the same period last year was seven percent. 7 THE MONTHLY BUSINESS REVIEW Fourth District Business Statistics Fourth District Business Indexes (1 9 3 5 -3 9 = 1 0 0 ) (0 0 0 om itted ) M ar. M ar. M ar. Mar. 1944 1943 1942 1941 Bank Debits (24 cities)........................................ 208 189 161 134 Commercial Failures (N um ber)...................... 10 25 86 120 ” (Liabilities)................... 5 15 56 69 Sales— Life Insurance (O. and P a .) ................. 121 112 88 106 — Department Stores (97 firms)............ 165 144 147 113 — Wholesale Drugs (7 firm s)................ 148 137 130 112 — ” Dry Goods (6 firm s). . . . 171 180 157 122 — ” Groceries (38 firm s).......... 159 140 122 108 — ” Hardware (27 firm s)___ 156 166 201 152 — ” All (78 firm s)..................... 155 146 149 124 — Chain Drugs (5 firm s)*.......................... 167 152 128 116 147 145 133 119 — Chain Groceries (4 firms)..................... Building Contracts (T o ta l)................................ 60 116 199 144 (Residential)..................... 45 127 267 202 Production— Coal (O, W. P a., E . K y . ) . . . . 160 167 147 145 — Cement (O., W . P a., E . K y .)** 42 95 103 87 — Elec. Power (O., Pa., K y .) * * .. 192 169 150 144 — Petroleum (O., Pa., K y .) * * .. . 92 92 87 84 ” — Shoes................................................. 97 95 115 117 * Per individual unit operated. * * February. M ar1940 107 116 98 97 100 109 95 90 96 95 96 107 115 160 107 73 117 98 103 Wholesale and Retail Trade Percentage Increase or D ecrease SALES SALES STOCKS M arch fi r st 3 M arch 1944 m onths 1944 D E P A R T M E N T S T O R E S (97) A k r o n .................................................................................... C a n t o n .................................................................................. C i n c i n n a t i .......................................................................... C l e v e l a n d ........................................................................... C o l u m b u s ........................................................................... E r i e ......................................................................................... P i t t s b u r g h ......................................................................... S p r i n g f i e l d .......................................................................... T o l e d o ................................................................................... W h e e l i n g ............................................................................. Y o u n g s t o w n ...................................................................... O t h e r C i t i e s ...................................................................... D i s t r i c t ................................................................................. + 5 + 3 +18 + 9 +19 +16 +21 +10 +19 +26 +27 + 3 +15 — 6 — 3 + 4 — 3 + 9 + 2 + 3 + 1 + 8 +11 + 7 — 7 + 1 + 3 a +19 + 6 +35 + 5 + 9 a +16 +32 a +13 +12 W E A R I N G A P P A R E L (16) C a n t o n .................................................................................. C i n c i n n a t i .......................................................................... C l e v e l a n d ........................................................................... P i t t s b u r g h .......................................................................... O t h e r C i t i e s ..................................................................... D i s t r i c t ................................................................................. +18 + 8 +25 +63 + 9 +22 + 7 — 13 + 7 +26 — 9 + 2 +19 — 12 +19 +45 +20 +19 + 8 — 12 — 5 — 1 -— 3 2 — 12 + 4 — 12 — 8 +17 — 14 — 10 + 4 — 29 — 8 — 1 — 11 — 7 33 32 48 39 a — 36 — 19 — 37 — 38 C H A IN S T O R E S * D r u g s — D i s t r i c t ( 5 ) ................................................... G r o c e r i e s — D i s t r i c t ( 4 ) ........................................... +10 + 3 + 3 + 3 a a W H O LESALE TR A D E ** A u t o m o t i v e S u p p l i e s ( 9 ) ...................................... B e e r ( 5 ) .............................................................................. C l o t h i n g a n d F u r n i s h i n g s ( 4 ) ............................ C o n f e c t i o n e r y ( 4 ) ........................................................ D r u g s a n d D r u g S u n d r i e s ( 7 ) ............................ D r y G o o d s ( 6 ) ................................................................ E l e c t r i c a l G o o d s ( 9 ) ................................................... F r e s h F r u i t s a n d V e g e t a b l e s ( 9 ) ...................... G r o c e r y G r o u p ( 3 8 ) ................................................... T o t a l H a r d w a r e G r o u p ( 2 7 ) ............................... G e n e r a l H a r d w a r e ( 8 ) ........................................ I n d u s t r i a l S u p p li e s ( 1 1 ) .................................... P l u m b i n g & H e a t i n g S u p p l i e s ( 8 ) ............ J e w e l r y ( 6 ) . . . . . . . _ ...................................................... L u m b e r a n d B u i l d i n g M a t e r i a l s ( 4 ) ............ M a c h in e r y , E q u ip . & Sup. (exc. E le c t.) (4) M e a t s a n d M e a t P r o d u c t s ( 4 ) .......................... P a i n t s a n d V a r n i s h e s ( 3 ) ....................................... P a p e r a n d i t s P r o d u c t s ( 5 ) .................................. T o b a c c o a n d i t s P r o d u c t s ( 2 3 ) ......................... M i s c e l l a n e o u s ( 1 4 ) ...................................................... D i s t r i c t — A ll W h o l e s a l e T r a d e ( 1 8 1 ) ........... +30 +14 +15 +34 + 8 — 5 +10 — 5 +14 — 6 + 3 — 6 — 16 +22 — 7 +29 + 4 + 4 + 6 + 4 + 3 + 6 +26 +12 a +25 +13 -0 — 9 -0 +11 — 4 + 8 — 10 — 13 + 2 a a +23 +17 +24 + 1 + 6 + 7 B a n k D e b i t s — 2 4 c i t i e s ..................3 4 , 6 1 9 , 0 0 0 Sav in g s D eposits— end of m o n th : 3 9 B a n k s O. a n d W . P a .................3 9 7 5 , 6 5 7 L ife In su ran ce Sales: O h i o a n d P a ....................................... 3 1 0 1 , 7 2 6 R etail Sales: D e p t . S t o r e s — 9 7 f i r m s .................3 42,409 W e a rin g A p p arel— 16 f i r m s . . . ? 2,2 0 4 F u r n i t u r e — 7 6 f i r m s .......................3 2,417 Building C o n tra cts— T o t a l . . . . 3 14,549 ” ” — R esidential 3 3,473 Com m ercial Failures— L iab ilities. . . . 3 69 7 ” ” — N u m b e r ................. P rod u ction: P i g I r o n — U . S ..............N e t T o n s 5 ,434 Steel Ing ot— U. S . . . . N et T o n s 7,805 B i t u m i n o u s C o a l — O ., W . P a . , E. K y ............................ N e t T o n s 20,125 C e m e n t — O., W . P a . , W . V a . ................................................... B b l s . 345a Elec. P o w e r — O., Pa., Ky. ............................... T h o u s . K . W . H . 2,930a P e t r o le u m — O., P a ., K y . . . B b l s. 2,044a S h o e s ........................................... p a i r s c B itum in ou s Coal Sh ip m en ts: L . E . P o r t s .......................N e t T o n s 1,015 +10 Ja n .-M a r. 1944 % ch ange fr o m 1943 13,808,000 +20 +16 8 282,471 +17 +15 +22 — 8 — 48 — 65 104,732 5,201 6 ,394 3 5,289 9,841 ± 27 — 69 — 59 228 — 76 —69 + 2 + 2 15,839 22,588 — 59,286 + + —46 —58 21 4 +4 +3 +5 —53 843b — 56 1 +14 -0 + 3 6,069 b 4,194b + 12 + 1 +5 +15 1,234 +30 Indexes of D epartm ent Store Sales and Stocks D aily A verage for 1935-1939= 100 W ith ou t Seasonal A d ju stm e n t M ar. Feb. M ar. 1944 1944 1943 SALES: A k r o n ( 6 ) .................................. C a n t o n ( 5 ) ............................... C i n c i n n a t i ( 9 ) ....................... C l e v e l a n d ( 1 0 ) ...................... C o l u m b u s ( 5 ) ......................... E r i e ( 3 ) ....................................... P i t t s b u r g h ( 8 ) ....................... S p r i n g f i e l d ( 3 ) ....................... T o l e d o ( 6 ) ................................ W h e e l i n g ( 6 ) .......................... Y o u n g s t o w n ( 3 ) .................. D i s t r i c t ( 9 6 ) ............................ STOCKS* D i s t r i c t ( 5 1 ) ............................ A d ju s te d for Seasonal V ariation M ar. Feb. M ar. 1944 1944 1943 1 91 197 169 163 181 190 156 206 167 144 185 165 167 168 131 128 152 157 120 172 139 116 142 132 18 1 190 143 150 15 1 16 3 129 187 141 111 145 144 213 229 177 176 177 224 17 3 221 174 160 196 18 5 192 230 181 180 221 184 135 235 187 142 187 165 213 229 157 168 156 199 153 210 152 133 16 3 169 154 151 137 149 157* 133 — — — — — 1 — 47 a a +12 — 11 +56 + 5 +35 +13 +11 +20 +36 — 9 a a +72 a a + 7 +13 +15 P e r individual u n it o p erated. W ho lesale d a ta co m piled b y U. S. D e p a r t m e n t o f C o m m e rc e , B u r e a u of the Census, a N o t available. F i g u r e s i n p a r e n t h e s e s i n d i c a t e n u m b e r o f firms r e p o r t i n g sa le s . % ch ange fro m 1943 ♦Revised. F U R N I T U R E (76) C a n t o n .................................................................................. C i n c i n n a t i .......................................................................... C l e v e l a n d ........................................................................... C o l u m b u s ........................................................................... D a y t o n ................................................................................. P i t t s b u r g h .......................................................................... T o l e d o ................................................................................... O t h e r C i t i e s ..................................................................... D i s t r i c t ................................................................................. * M arch 1944 a February b Jan uary-February c C on fidential (1 9 4 4 co m p a red w ith 1943) ** F o u r t h D is tr ic t U nless O t h e r w i s e S p e c if ie d Debits to Individual Accounts (T h o u sa n d s of Dollars) M arch 1944 191,408 16,465 81,472 C incinnati. . . . 628,786 1,233,176 . 303,748 C ovingtonN ew p o rt.. . 24,564 146,537 68,817 6,138 G reen sb u rg ... 12,233 20,492 H o m estea d ... 4 ,842 33,454 27,663 8,828 21,015 M id d leto w n .. 21,285 O i l C i t y ............ 16,182 P ittsb u rg h . . . . 1,337,253 P o rtsm ou th. . 11,636 16,988 Springfield. . . 34,526 Steub enville.. 14,287 264,365 23,461 39,939 Y o u n gsto w n .. 82,966 12,617 4,705,143 % ch ange fr o m 1943 + + + + + + 1 6 .6 1 7 .1 8.2 5 .7 1 1 .7 1 1 .0 + 7.7 — 2 .3 + 1 4 .0 + 1 9.9 + 1 7 .2 — 0 .9 “ 0— + 2 5 .1 + 1 0.3 + 3 1 .4 + 1 7.9 + 1 2 .4 — 4 .3 + 1 1.6 + 16 .2 + 1 5.6 + 6 .5 + 1 4 .3 + 8.2 — 1 .0 + 1 3 .0 + 4 .7 — 5.9 + 1 0 .0 Jan .-M ar. 1944 Jan .-M ar. 1943 % change f r o m 1943 539,355 51,568 232,715 1,826,543 3,719,971 991,844 4 6 1 ,557 38,440 200,720 1,622,033 3,022,898 744,654 + 1 6 .9 + 3 4 .2 + 1 5 .9 + 1 2.6 + 2 3 .1 + 3 3 .2 73,849 4 4 0 ,790 191,162 17,865 36,655 59,558 14,526 154,839 78,800 26,723 58,648 61,612 45,557 3,944,915 32,969 49,363 99,769 39,450 792,299 68,999 121,456 248,781 38,584 63,705 386,816 158,488 13,804 28,901 5 6,647 12,733 129,422 71,007 18,388 47,539 53,947 4 3,173 3,301,356 27,018 41,182 86,206 35,176 656,344 63,707 99,421 217,099 35,544 + 1 5 .9 + 1 4.0 + 2 0 .6 + 2 9 .4 + 2 6 .8 + 5 .1 + 1 4 .1 + 1 9.6 + 1 1 .0 + 4 5 .3 + 2 3 .4 + 1 4 .2 + 5 .5 + 1 9.5 + 2 2 .0 + 1 9 .9 + 1 5 .7 + 1 2 .2 + 2 0 .7 + 8 .3 + 2 2 .2 + 1 4 .6 + 8.6 14,059,165 11,737,925 + 1 9 .8 8 THE MONTHLY BUSINESS REVIEW Su m m ary of N ational Business C onditions Bv th e B oard of Governors of th e F ederal Reserve System in d u s t r ia l In du strial activity d eclin ed slightly in M arch. R e ta il sales w ere m aintained at an exception ally high lev el and com m odity prices w ere relativ ely stable. r r o d u o t io n Industrial production 1937 1938 1939 1940 1941 1942 1943 1944 Federal Reserve index. Monthly figures, latest shown is for M arch 1 9 4 4 . C O S T O F LIV IN G O utput o f m anu factures and m inerals was slightly sm aller in M arch than in the previous tw o m onths and the B oard ’s index of to tal industrial production d eclin ed 2 points to 2 4 2 p er cen t of the 1 9 3 5 -3 9 average. S te e l production advanced som ew hat fu rther in M arch and th e first three w eeks of A pril. O utput of lu m ber was m aintained at th e level of th e first two m onths o f th e year and production in the first qu arter is in d icated to b e 3 p er cen t larg er than in th e first q u arter o f 1 9 4 3 . T h e nu m ber of aircra ft d elivered increased abo u t 4 p er cen t above th e level o f the preced ing 4 m onths to a new high of 9 ,1 1 8 planes. D eliv eries of m erch ant ships continued to rise from th e low Jan u ary rate and in M arch w ere at approxi m ately th e level of a y ear ago. O utput o f oth er products in th e m achinery and transportation equ ipm ent industries d eclin ed som ew hat in M arch. O utpu t o f nondurable m anu factures, as m easured b y th e B oard ’s index, declin ed abo u t 1 p er cen t in M arch. T h is d eclin e was due largely to the co n tinued drop in sm all arm s am m unition production. M an u factu red food production was 11 p er cen t g reater than in M arch of last year. C o al production d eclin ed 6 p er cen t in M arch from th e exception ally high rate in F eb ru ary due partly to the return to a six-day w ork w eek in an th racite m ines and partly to a continuation o f m anpow er shortages in b o th hard and soft co al m ines. O utput of crude petroleum and m etals was m ain tain ed in large volum e. T h e value o f constru ction co ntracts aw arded in M arch , acco rd in g to reports of the F . W . D od ge C orporation, was slightly g reater than in Jan u ary and F eb ru a ry , bu t was still low er than in any corresponding m onth since 1 9 3 5 . D istribution Bureau of L ab or Statistics’ indexes. L ast month in each calendar quarter through September 1 9 4 0 , monthly thereafter. M id-m onth figures, latest shown are for M arch 1 9 4 4 . MEMBER BANK RESERVES AND R E LA TED ITEMS D ep artm en t store sales increased m ore than seasonally in M arch and co n tinued at a high level in the first h a lf o f A pril. Sales in M arch w ere abo u t 18 p er cen t larg er than in the corresponding m onth last y ear, reflectin g in p art the earlier date of E a ste r this y ear and the heavy buying of jew elry , cosm etics, furs, and oth er item s b e fo re h ig h er tax rates becam e effective on A pril 1. F re ig h t carloadings d eclin ed slightly in M arch from th e h ig h lev el of earlier m onths, ow ing chiefly to a drop in the m ovem ent of co al and grain products. T o ta l loadings w ere m aintained in the first h alf of April. Comm odity prices T h e general level of w holesale com m odity prices advanced slightly from the m iddle of M arch to the m id dle of April. F ed e ra l m axim um prices fo r cem ent, lum ber, and various oth er industrial com m odities w ere increased . R e ta il food prices show ed little change from F eb ru ary to M arch, w hile retail prices of m ost oth er com m odities continued to ad vance slightly. Bank credit W ednesday figures, latest shown are 19, 1944. for April M EM BER BANK R E SE R V E S _ , " " . “Z " , partly esHmated!ew e d n e X y fig u re s^ la tL fX ^ n are for April 1 9 , 1 9 4 4 . C ontinued grow th in cu rrency and th e transfers from T reasu ry w ar-loan deposits to deposits su b ject to reserve requirem ents resulted in a d eclin e in excess reserves o f m em b er banks and in su bstantial purchases of G overnm ent securities by the R eserve B anks during M arch and the first three w eeks o f A pril. O w ing to special facto rs, excess reserves d eclin ed to a low point of 6 0 0 m illion dollars at th e end of M arch b u t increased in A pril and on A pril 19 w ere about 9 0 0 m illion dollars, som ew hat less than had generally b e en held in recen t m onths. F e d e ra l R eserve B an k holdings of U . S. G overnm ent securities w ere a t a new h ig h lev el of 1 2 .7 billio n dollars on A pril 19, after increasing b y h a lf a billio n in the p reced ing fou r w eeks. M ost o f the grow th w as in holdings of T reasu ry bills. R ep ortin g m em b er banks in 101 leading cities red uced th eir holdings of T reasu ry b ills by 3 2 5 m illion dollars in the fou r w eeks ending A pril 12, w hile holdings o f oth er G overnm ent securities show ed little ch ang e. T h e g reater p art of th e d eclin e in b ill holdings in th e fou r-w eek period occu rred a t banks outside N ew York and C h icago , b u t th ere w ere w ide fluctuations w ithin th e period reflectin g transactions at C h icago banks associated w ith th e A pril 1 personal property tax assesm ent d ate in Illinois. L oans for pu rchasing or carrying G overnm ent secur ities continued to d eclin e, as repaym ents w ere m ade on funds advanced during the F o u rth W a r L o an D riv e; these loans to brokers and dealers have fa llen b y 4 5 0 m illion dollars since the end o f th e drive and are now less than a t any tim e in recen t m onths; loans to others, w hich rose by 6 0 0 m illion during the drive have su bsequently d eclin ed b y 4 0 0 m illion. C om m ercial loans d eclin ed b y 2 1 0 m illion over the m onth. A djusted dem and deposits, w hich d eclin ed som ew hat in th e la tte r h a lf of M arch, increased during d ie first h a lf o f A pril, b rin g in g th e total outstanding to about a billio n less than the level prior to d ie opening of th e drive. G overnm ent deposits at these sam e banks fe ll b y 1.5 billio n dollars during th e fo u r w eeks ended A pril 12.
@FedFRASER