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Busin eview Covering financial, industrial and a g ricu ltu ra l co n d itio n s V ol. 26 Cleveland Ohio, December 30, 1944 REVIEW OF 1944 Three full years of war bear testimony to the ingenuity of American industrial enterprise which, as a whole, has produced “guns and butter, too” . An overwhelming ma jority of war production quotas have been satisfactorily met, while the civilian economy has, as yet, experienced no significant lowering of its standard of living. There has been, of course, a slight, but continuing drop from late 1943 production and employment records. The de cline in production has been less than for employment and denotes increased efficiency and organization of in dustry in the face of a steady reduction in the labor force. Industrial activity declined during most of 1944. Fourth district production followed the downward trend of the Nation— a result which could be expected because of the diversity of the district’s industry. The index of indus trial production, compiled by the Board of Governors of the Federal Reserve System, reached a high of 247 per cent in October and November of 1943, in terms of a 1935-1939 average at 100, and was down about seven percent from that peak at the end of 1944. The decline may be attributed chiefly to contract oanoelations and necessary revisions of war production schedules, underlaid by a drastic shortage of manpower. Production for war continues to account for the ma jority of industrial activity and dominates all enterprise in the durable goods field. Civilian durable goods out put, despite a move toward relaxed production controls, has increased but little, while civilian nondurable goods exist in relatively large quantities. The closing months of 1944 have witnessed a virtual freezing of that part of civilian production subject to wartime oontrols, and have seen a renewed, all-out emphasis on war schedules. Government continues to constitute the greatest mar ket for all output, but the relatively large supply of civilian goods, in conjunction with considerable price in creases and “upgrading” in some lines, has resulted in a record dollar-value civilian consumption. Current evi dence of the continued buying wave exists in fourth dis trict department store sales, which in the four-week period ended December 16 were at record-high dollar levels and 16 percent larger than in the comparable period of 1943.. Fourth Federal Reserve District Federal Reserve Bank of Cleveland No. 12 As a consequence of such sales records, many authorities hold that over-all civilian consumption is at the highest level yet attained, when considered from the viewpoint of its broad distribution to the mass of consumers. This is, in part, reflected by retail sales that continue to mount and, even when adjusted for prioe increases, indicate a high level of real consumption. Many important consumer durable goods are still ab sent from the market, but the total of civilian wares con tinues to appear in large quantities. A disproportionate quantity of such goods are in the luxury category, a fact that is, in part, evidenced by record luxury tax collec tions, and is clear proof that more and more purchasing power is being channeled to this kind of product despite high individual tax rates. This raises considerable ques tion as to the effectiveness of some of the production controls, or the absence thereof, which have been respon sible for the character of civilian goods available to the domestic market. Manufacturing employment declined during practically all of 1944, and is reflected to a lesser degree in the reduced value o f manufactured goods, while total wage payments reached higher levels. Since mid-summer, war industries have been harassed by employees switching to jobs with greater post-war prospeots. By year-end, how ever, this tendency seemingly had run its course, and the trend may be reversed by the joint efforts of various Government agencies in cooperation with the War and Navy Departments. In general, manpower shortage has been the most difficult problem limiting production, al though there are an increased number of reports relat ing to an abundance o f women willing to work. The greatest deficit appears to be in skilled and semi-skilled male workers. Shortages are more extreme in civilian employments, but certain o f the strategic military lines are also curtailed beoause of manpower deficits and abc p n f A P1C1H A FINANCIAL REVIEW OF 1944 Although banking and finance have been subject to the same sort of influences during 1944 as prevailed during preceding war years, the impingement of those influences brought about several noteworthy changes in detail of the financial mosaic. 2 THE MONTHLY BUSINESS REVIEW Deposits For the seventh oonsecutive year, total de posits of fourth district weekly reporting mem ber banks established new high levels. The gain this past year, however, was somewhat smaller than during the record year 1943, which alone accounted for nearly one-third of die five-year wartime expansion of 110 per cent. The composition of the 1944 increase likewise did not conform entirely to the pattern of earlier years. The war time expansion of time deposits, which began to develop during the latter part o f 1942, reached record-breaking proportions. The rate of growth of time deposits dur ing 1944 was 20 percent, as against only 14 percent for all other (demand) deposits. In each of the two pre ceding years, demand deposits (including Government and interbank) had risen approximately 25 percent. In terms of dollars, the time deposit increment con stituted an important item in deposit changes for the first time in many years by accounting for nearly onerfourth of the composite net gain. Notwithstanding three war loan campaigns, there were only five weeks during 1944 when time deposits failed to show an increase, suggesting that this strong upward trend is hardly subjeot to reversal by purely casual devel opments. Loans During the past year, total loans virtually re peated the eleven percent increase shown the year before. These two successive yearly gains more than erased the 1941 loan liquidation and brought the loan total to the highest level in a number of years. How ever, the increase was confined almost exclusively to col lateral loans, particularly those secured by U. S. Treasury obligations. Loans of this kind, notably those negotiated by others than brokers and dealers, expanded sharply dur ing each of the three war loans in 1944. Such borrow ings effected during the January-February Drive were all liquidated prior to the June-July (Fifth) War Loan. However, only about one-half of the bank indebtedness incurred by non-brokers during the mid-year Drive had been paid off when the Sixth Loan offering induced an other expansion in Government security loans to a long time high. During the late summer and fall, between the Fifth and Sixth War Loans, there was considerable corporate and municipal financing. Chiefly in response to this ac tivity, loans to brokers and dealers, collateraled by other than Government securities, reached the highest levels in recent years on November 1. In contrast to the rise in collateral loans, other types of bank loans moved slowly and were unchanged or lower at the end of 1944. Commercial, industrial, and agri cultural loans declined during the first half of 1944, but, after reaching a ten-month low, a modest but irregular recovery ensued during the latter part of the year. Real estate loans dropped further to a new long-time low, although the volume of new loans made was near ly sufficient to offset the steady reduction in principal o f existing loans. “All other” loans also declined rather consistently to new low ground. New elements which came into the picture during 1944, but whose precise effeot upon bank loans is yet to be determined, were the proposed plans for “ credit pools” as a means of making bank credit more readily available to business concerns in the post-war period, and, secondly, the enactment of the “G. I. Bill of Rights” , which provides for the use of bank credit under new and un tried conditions. Investments For the fourth year in succession, weekly reporting member banks of this district made substantial additions to their investment portfolio. The increase during 1944, however, was only about twothirds as large as the record amount added during 1943. The 20 percent increase was limited wholly to Govern ment securities, being distributed rather equally among certificates, notes, and bonds. Holdings of Treasury bills actually declined, chiefly in consequence of a tighter member bank reserve position. Most of the newly-acquired certificates, notes, and bonds were obtained from noncommercial bank investors and largely during war loan drives. A small quantity was purchased directly from the Treasury in accordance with a formula announced prior to the Fourth Loan whereby a commercial bank could subscribe for notes or bonds up to $200,000 per annum or ten percent of its time de posits, whichever was less. This limit was raised to $500,000 for the Sixth Drive. Holdings o f Government-guaranteed securities were more than cut in half, as the result of the Treasury’s pol icy of replacing such issues by direct obligations at the time of retirement. The total o f corporate, municipal, and other non-Federal securities continued its long-time decline until about mid-year, after which a slight in crease took place during the most active period of cor porate financing and refunding during 1944. Reserves The maintenance of legal reserves was a mat ter that called for increasing attention during all of 1944, especially among the larger banks of the dis trict. The period of greatest stringency occurred dur ing the first half of April, when excess reserves of re serve city banks of the fourth district reached a long time low of $26,000,000, or only 4.3 peircent in excess of the legal minimum. During that two-week period, the volume of Treasury bills sold to the reserve bank under repurchase option rose to a record high of $170,000,000. By July 5, such option holdings at the reserve bank had receded to $29,000,000— the years low— when the reserve-exempt war loan deposits reached their highest point of the year. During the second half of 1944, some what greater use was made of the lending facilities of the reserve bank, with rediscounts and advances to memDEPO SIT FOURTH FLU CTU ATIO NS D IS T R I C T MEMBER BANKS THE MONTHLY BUSINESS REVIEW ber banks attaining a long-time peak of $15,000,000 on November 8. However, the largest source of reserve funds resulted from the open market purchase of approxi mately $6,500,000,000 of Treasury bills and certificates for System account. Both directly and indirectly through the interdistrict flow of funds, open market operations on such a scale inevitably provided needed reserves to mem ber banks in the fourth district. Three factors contributed to the relatively tight re serve position throughout 1944. One was the continued growth of deposits subject to reserve requirements. At the start of the year, excess reserves of reserve city banks stood at only $43,000,000, whereas the 1944 increase in requirements amounted to $56,000,000. Another factor was a sustained outflow of gold from this country, which affected member bank reserves of the fourth district either directly or indirectly. There was some let-up in this movement during the closing months of 1944. A third and most important factor was the net outflow of cur rency into circulation. During 1944, weekly reporting banks in this district paid out approximately $200,000,000 of currency which did not return to the banking system. With respect to all banks of the district, this drain on reserves was close to $400,000,000. One of the more constructive financial developments of 1944 was the 5Y2 percent increase in the capital ac counts of weekly reporting member banks. In terms of dollars as well as in percent, this constitutes perhaps an unprecedented addition to bank equities in the fourth dis trict. However, because of the seven-year growth of bank liabilities, the ratio of capital to total assets is now measurably below former standards, and a continuation or even accentuation of the 1944 trend of capital ac cumulation would be desirable in every respect. OHIO EMPLOYMENT AND UNEMPLOYMENT The necessity of concentrating all energies on the prosecution of the war relegates the problems of long term full employment and potential unemployment dur ing the post-war transition period to a position of secondary importance. Nevertheless, since considerable unemploy ment in war industries is quite likely to accompany even a partial shift from a war to a peace economy, it seems appropriate to examine employment changes in Ohio brought about by the war and preparations that are being made by the Ohio Bureau of Unemployment Compensa tion to handle problems that may develop in conjunction with reconversion and post-war unemployment. Ohio’s COVERED EMPLOYMENT ANNUAL IN OHI O AVERAGES 2500 1939 1942 1943 1944 3 planning is considered typical of the work being done in many of the States. Under the stimulus of an all-out effort for war produc tion, the number of employed persons covered by the Ohio Unemployment Compensation Law has increased from 1.4 millions in 1939 to a high of 2.1 millions in 1943. Tabulations for the first two quarters of 1944 showed a slight drop to approximately 2.0 million covered workers by the end of the second quarter, but there was also a marked tendency to stabilize. Estimates by the United States Bureau of Labor Statistics of the total number of employees in non-agricultural establishments in the State indicate a rise in employment from 1.7 millions in 1939 to approximately 2.3 millions in 1944. This figure re flects a small decline from the 2.4 millions maintained dur ing most of 1943. The increase of approximately 700,000 gainful workers plus replacements for that portion of the 500,000 re moved from the labor market by the armed forces indi cates a gain of between 1.0 and 1.1 millions of workers in the State during the war years. In 1939, the number of unemployed in the State actively seeking employment totaled almost half a million persons. By early 1944, this number had dwindled to 20,519, according to records of public employment offices in Ohio. Thus, the ranks of the unemployed unquestionably represented the greatest single source of new workers added to the labor force in Ohio during the war years. The remainder of the increase can be accounted for by: (1) in-migration of workers from outside the State, (2) the shift from domestic service, self-employment, and agriculture into factories, (3) the addition of young people to the labor force, and (4) per sons not usually in the labor market who have taken jobs for various reasons. The war period has emphasized employment concen tration, with large employers adding still more employees to their labor forces, while the new ordnance plants re cruited their entire personnel. This period of wartime ex pansion was accompanied by a drop of approximately 7,000 in active employer accounts from a peak of 57,169 in 1940. In October 1944, there were 50,200 active ac counts. Practically all of the discontinued accounts rep resented small employers embarrassed by labor and ma terial difficulties, or those who closed their businesses for other reasons associated with the war. An amendment to the compensation law in 1943 took cognizance of changes in the distribution of the labor force and provided for a war surtax rate for employers whose payrolls have increased by 50 per cent or more dur ing the war period. The measure was an attempt to ob tain contributions from the war industries of the State pro portionate to the unemployment risk for which they may be responsible. The new surtax rate affected three indus tries particularly: aircraft, ordnance and accessories, and shipbuilding— industries which experienced an enormous expansion of plant facility with a consequent large increase in total number of employees. Employment in all three lines was negligible prior to 1940. As unemployment in the State reached the lowest point on record because of the war program, benefit payments dwindled accordingly. In 1940, the high year in benefit payments in the five-year histoiy of the program, they amounted to $24,615,596. In that year, 1.5 millions of 4 THE MONTHLY BUSINESS REVIEW employees were covered by the plan. In 1943, benefit payments of $1,521,000 were made, while 2.1 millions of employees were covered by insurance. As a result of contributions based on growing payrolls in the State during the war years, the trust fund reserve has increased steadily from $132 millions in 1939 to nearly $422 millions by October 1944. This amount would support a total of al most 28 million man-weeks of unemployment at an aver age benefit check of $15 per week. When employment ends, the Bureau of Unemployment Compensation’s job begins. In an effort to ascertain what the post-war unemployment picture might possibly be, the BUC during the past three months has questioned 640 Ohio employers, representing approximately 70 percent of the workers in the State engaged in manufacturing and mining, or nearly 50 percent of all covered workers in the State. This was done in an effort to obtain answers to four problems: (1) The capacity of the present 115 USES offices, equipment, and personnel to handle the potential unem ployment application load. (2) The determination of the number of possible em ployees who will require unemployment benefits, and the designation of the offices through which they will place their applications. (3) The estimate of the number of employees who have worked in Ohio, but who will return to other States from which they will file their unemployment applications. (4) The ability of the more than $400 millions in the fund to meet the strains placed on it. The Bureau has present facilities for taking more than 32,000 claims per day or approximately 150,000 per week. With certain alterations and use of additional space in a number of local offices, the Bureau estimates that it could increase its State-wide claims capacity to about 84,000 per day or some 400,000 per week. Since the Ohio employers’ reports, representing the in dustries in which unemployment is most likely to occur, estimate that the number of layoffs within 90 days after the end of the war with Germany will total approximately 190,000, it is clear that the capacity of the offices should permit considerable expansion of unemployment applica tions beyond present anticipations. Such a low estimate of State unemployment during the transition period, even when projected to the total of covered employment indus tries, will require considerably expanded employment above 1940 levels, inasmuch as the number of covered workers in Ohio increased some 660,000 between March 1940 and the peak employment month of 1943 in which there were 2,100,000 covered workers. No means was discovered by which an estimate of the number of non-Ohio workers, who will want to return to their home States, could be made. While it is known that many nonresident workers in Ohio expect to return to their home States, this problem will be offset, in part, by out-of-State workers who wish to return to Ohio. The procedure in either instance is that the employee will draw benefits from the State in which he was employed, but that claims will be filed in the nearest local claims office. Emigration of out-of-State workers in Ohio will relieve Ohio local offices of claims-taking, but will add much to the burden of the State office where interstate claims are processed and benefit checks written and mailed. Although some concern has been expressed regarding the ability of unemployment reserve funds to bear the burden of possible post-war unemployment claims, the po sition of Ohio is near the top among the States. The Bu reau estimates that it could pay average maximum bene fits of $15 for 18 weeks to 78 percent of all covered work ers. Its ability to make such payments, however, will be affected by anticipated legislation which likely will in crease both the benefit limit and the length of payment period. If unemployment in Ohio becomes so serious that the fund is unable to cope with it, Ohio, like other States, may draw on the funds “earmarked” by the War Mobiliza tion and Reconversion Act of 1944 after June 30, 1945. One section of this Federal law provides for a Federal Unemployment Account whereby any surplus arising from a tax of three-tenths of one percent paid the Federal Gov ernment by all affected employers over expenses will automatically go into this account. At present, this fund is approximately $400 millions, and it is anticipated that it will grow at an annual rate of more than $100 millions. Although this measure increases the uniform strength of the program, the real answer to the security of the Unem ployment Compensation System lies in the speed with which transition from war to civilian production can be made and the ultimate attainment and maintenance of a high level of peacetime employment. MANUFACTURING AND MINING Steel Although steel production totals for the first eleven months of 1944 exceeded output for the same pe riod last year, the percentage capacity of the industry engaged in production has been somewhat lower since April of this year. Manpower shortages were, in part, responsible for this decrease as were cut-backs in steel orders for special items in military requirements. In gen eral, however, steel has been in sufficient supply through out the year all along the line. As order backlogs have decreased, the steel situation has eased and some strip mills, converted to the production of plate, are now re converted to the production of strip. There are a few exceptions to this generally favorable position of the in dustry. Outstanding is the critically tight supply of cast ings for truck manufacture. Indicative of the change now appearing in the indus try as a direct result of alterations in the military picture is the price of steel-making scrap. Recovering from its decline of September and October, the scrap price av erage has again reached the ceiling level at which it held from April 1941 until early this fall, when optimism as to the end of the European war caused a break. In spite of the present show of strength, the long-term out look for steel appears to be one of gradual decline in demand due chiefly to lessened shipbuilding activity and prospects for an increase in the. volume of contract ter minations. In mid-December, steel operations held at slightly above 94 percent capacity. Ingot production for November totaled 7,258,534 net tons, approximately 356,000 less than Octobers production and 113,000 tons less than output for the same month last year. Output for the eleven-month period to November 30 totaled 82,197,288 tons, compared with 81,581,222 tons for the same period in 1943. THE MONTHLY BUSINESS REVIEW Coal Despite a difficult manpower situation, bituminous coal production for the year probably will exceed last years production by over 30,000,000 tons. Production in the fourth district for November accounted for 18,900,000 tons of the national output of 50,215,000 tons. Coal production has declined slightly, but at a fairly consistent rate throughout the year. The increase of approximately six percent over last year’s production can be accounted for by the absence of sporadic work stoppages which oc curred frequently throughout last year. Manpower con tinues as the major problem of the industry, with high absenteeism as an important obstacle hindering produc tion. Lake Shipping The lake shipping season for 1944 closed with an all-time record of tonnage moved. Ore ship ments for the season reached a total of 81,170,538 tons, compared with a total of 84,404,852 tons last year. However, coal and grain shipments have established new records, and over-all tonnage is substantially in excess of any previous year. Rubber Production of large truck and bus tires increased slightly dining November. Announcement has been made recently of a new construction program to ex pand heavy duty tire production by 4,000,000 tires per year. The program also includes the expansion of existing facilities to increase annual production by another 6,000,000 units. Current production is at the rate of 16,400,000 heavy duty tires per year, according to WPB estimates. Machine Tools Recent shipments of the machine tool industry have been at the rate of $37,000,000 monthly, due to manpower shortages and bottlenecks in the supply of parts. The need for approximately 6,000 machine tools to implement the new plants being built to accommodate the expanded artillery shell program places the industry in one of its most critical positions since the start o f the war. Skilled tool makers are not to be ob tained in the labor market at this time. Another diffi culty is the fact that many machine tool manufacturers are engaged at present in the manufacture of war goods other than tools, having converted early in the year to the production of military items for which it will be dif ficult to find other plant facility. Total production of machine tools this year is estimated at $507,000,000, com pared with $1,200,000,000 and $1,320,000,000 in 1943 and 1942, respectively. Paper A progressive and increasing shortage in paper supplies for civilian use is in prospect for the next several months. Manufacturers continue to report man power as the underlying problem throughout all branches of the industry. W ood pulp inventories on November 1 reached the lowest point on record, showing a decrease of 30 percent from the same date last year. Glass The container branch of the glass industry antici pates rounding out the year’s production at ap proximately twelve percent above last year’s level. Out put will total in the neighborhood of 100,000,000 gross for the year, establishing a new record for the industry. Pottery The dinnerware branch of the pottery industry continues to report a large backlog of orders and an increasing shortage of manpower. The industry is 5 booked through mid-1945 and anticipates improved pro duction conditions for this winter, due to a more adequate supply of natural gas now that the pipe line from the Texas fields has been completed. Textiles, An increase in orders by the Army and Navy inClothing dicates a further curtailment in supply of worsted and woolens for domestic consumption. Labor shortages make an increase in civilian supply impossible before mid-1945. The Woolen and Worsted Advisory Committee has recommended that the War Production Board “freeze” for rated ordens the entire worsted produc tion and between 50 and 60 percent of woolen output for the first and second quarters of 1945. Current operations in the clothing industry are devoted to an increasing extent to the manufacture of items of apparel for all branches of the military service. The Army Quartermaster Division recently has called for large quantities of items in both wool and cotton. Material for civilians is being further restricted, and volume of clothing available for this market next summer and fall probably will be far below supplies of previous years. AGRICULTURE Declining Soil Productivity The inherent productive capacity of the Nations farm land is declining. This simple statement is undoubtedly of far greater importance and has a much more direct influ ence on all segments of the economy than commonly recognized. That the statement is true seems well estab lished, despite the fact that long-time records have shown a trend toward increased yields for some of the major crops. However, soil authorities generally attribute the upward movement in yields to improved farming prac tices, such as the greater use of fertilizers, better tillage, and superior crop varieties. These improved methods have achieved remarkable results, but from the point of view of average yields they have been partially offset by declines in the natural capacity of the soil to produce. In other words, if it had not been for soil productivity losses, the trend of crop yields might have been far more impressive. In Ohio, much study has been devoted to the factors involved in soil deterioration and soil improvement. Through years of experimentation and analysis, the Col lege of Agriculture at Ohio State University has developed a method o f measuring the net effect of the many factors which either build or destroy soil productivity. The meth od includes the assignment of indexes to various individual crops which represent approximately their effects upon the productivity of the soil in one year’s time. These indexes may be either negative or positive, depending upon whether a particular crop has a soil-depleting or a soilimproving effect. For example, com (as grain or silage) is assigned a soil productivity index of —2.0 percent, whereas the oommon clovers (as hay or pasture) are as signed an index of + 2 .0 percent. When the net influ ence of the cropping system is combined with credits for fertilizer and manure application and with debits for soil erosion, an indicator of the annual “soil productivity balance” may be calculated for any area. This “balance” is the percentage change in productive capacity of the soil that may be expected to occur annually.* For a number of years, the “soil productivity balance” 6 THE MONTHLY BUSINESS REVIEW for the entire State of Ohio has shown a net loss in the soil’s productive oapaoity. The following annual “bal ances” indicate the amount of the yearly deterioration and that the seriousness of the declining productivity has increased during the war years. They also show the great need for reversing the trend and thereby restoring the State’s soil resources. “Soil Productivity Balances” Ohio 1929— 1935 — 1939 — 1940 — minus minus minus minus .65% .61% .51% .54% 1941— 1942 — 1943— 1944 — minus minus minus minus .57% .61% .64% .76% Although the increasing losses in soil productivity are justifiable causes for real concern, there are, nevertheless, some encouraging aspects in recent movements to correct the situation. One of the most significant of these cor rective movements exists in the growth of soil conserva tion districts. This development has already achieved considerable importance in the Fourth Federal Reserve District and appears to have even greater post-war pos sibilities. In addition to the importance of this program to farmers, it may also have a marked influence upon allied industries and occupations through its effects upon the economic and social life of farm people. The follow ing description of the organization and operation of soil conservation districts is presented primarily to aid those who are interested in the development, but who have not been able to follow it by participation or firsthand ob servation, and also, perhaps, to create an interest among those who may be unacquainted with the program. Soil Conservation Distriets The soil conservation district movement has its origin in the soil con servation demonstration projects set up by the United States Department of Agriculture early in 1934. These projects pointed conclusively to the need for increased community action in soil and water conserva tion, and for greater assistance and wholehearted par ticipation on the part of all the people affected by the impoverishment and ruin of productive soil. As a result, demonstration soon led to practical application by the formation of soil conservation districts. Today there are about 1,200 districts in the United States covering ap proximately 640 million acres and including more than two million farms. Soil conservation districts are “grass roots” organiza tions. Although they are formed by farmers and op erated by farmers, the movement is usually strengthened by the voice of the entire community. A soil conserva tion district is organized only upon the petition of land owners and then not until the will of the majority has been expressed in a referendum. After an approving vote, and if the proposed district is said to be practicable and feasible by the State Soil Conservation Committee, the soil conservation district is declared organized. It is estab lished under State law and thus becomes a legally con stituted unit of local government. It owes no allegiance to any State or Federal Bureau or agency, or to any local organization. It does not have taxing power nor the right to make assessments. The operations of the district are placed in the hands °For more detailed information on Ohio soil productivity indexes and the calculation of a “ soil productivity balance,” consult “ O u r Heritage, the Soil,” Bulletin No. 175, Agricultural Extension Service, Ohio State U n ive rsity . of a board of five supervisors who are elected by the farmers of die area. These men draw up a program, in cluding the aims of the district, its land-use policies, and the soil and moisture conservation measures it recom mends. In most States, the cooperation of farmers with the program is entirely voluntary. The success of every dis trict is dependent upon education, community interest, and an understanding of the land-use problems involved. In the Fourth Federal Reserve District, there were 59 soil conservation districts as of December 1 (see map). All areas except two in the West Virginia Panhandle and one in Pennsylvania included a single county. Con sidering the newness of the movement and the fact that its expansion has been hampered by wartime conditions, the growth to date has been significant. Soil and water conservation practices which have been emphasized by the areas organized in the fourth district include proper land use, sound rotations, contour farm ing, strip crop, terracing and diversions, sod waterways, pasture improvement, woodland management, reforesta tion, farm ponds, and protection and conservation of wild life. In these activities, the districts operate essentially as self-help organizations, but because of their legal status they may call upon local, State, and Federal agencies for such assistance, technical and otherwise, as the agency may be able to provide. The bulk o f the technical as sistance that has been given the districts thus far has been furnished by the U. S. Soil Conservation Service. In fact, the greater part of the money appropriated by Congress to the Soil Conservation Service is earmarked for cooperative activity with the local soil conservation districts. Although many districts have special programs designed for their particular needs, the work which is common to all districts and which forms the major approach to soil S O IL C O N SER V ATIO N D IS T R IC T S THE MONTHLY BUSINESS REVIEW and water conservation is the planning of erosion con trol measures and long-time improved farm practices for individual farms. The natural capabilities of every acre are .determined, plans are made according to the needs of individual fields, and a long-time management program is worked out. This work has already produced some excellent results. However, like most efforts that deal with the processes of nature, the major benefits will accrue over a period of several years. To country bankers, the development of soil conserva tion districts presents two opportunities: (1) the ohance of entering into a worthwhile community-building pro gram by encouragement of its activities, and (2) the pos sibility of financing those conservation practices which require a money outlay. Many of the practices which farmers will find necessary to bring about a positive pro ductivity balance on their farms will require either hir ing labor or purchasing materials (lime, tile, fertilizer, etc.) Commercial banks may facilitate these conservation activities by providing the necessary credit. Special types of loans may be necessary owing to relatively slow re turns from conservation expenditures. The period of time involved, however, is ordinarily well within the legal limits of commercial bank lending. Many banks in vari ous parts of the oountry have found that a conservation loan is not only an excellent medium for building com munity good will but also a sound and remunerative cred it extension. TRADE Retail Fourth district department stores have just ex perienced the largest dollar volume of Christ mas business in their history. The greatly increased war time incomes of many consumers and higher prices on certain types of gift merchandise were important factors contributing to this record-high sales level. The accom panying chart shows weekly sales indexes for October through December 1944 compared with the correspond ing weeks of the previous three years. As indicated on the chart, sales throughout the entire Christmas season this year have been larger than they were in the past, with substantial increases being reported for the first part of December. As was the case during other wartime years, a con siderable portion of the Christmas buying which former ly occurred in December was shifted to October and No vember. Buying was quite active during the first part of October prior to the mid-month deadline for overseas mailing. Later in the month there was a slight decline, 7 until gift buying for civilians and service people stationed in this country stimulated business early in November. The sharpest advance in sales, however, occurred the first part of December. During the week ended Decem ber 9, department stores experienced the greatest oneweek dollar sales volume in their history. The gain of 23 percent over the corresponding week of 1943 was the largest year-to-year increase that merchants have reported for several months. During the following week, there was a slight decline in sales, which is very unusual for that period when pre-Christmas buying reached its peak in previous years. The exceptionally severe weather prevalent throughout most of the district was largely responsible for this decrease in sales from the preceding week. Then, too, with the very large amount of busi ness that had occurred during the previous weeks, stocks of many items were depleted, and shipments of some new merchandise were delayed because of the bad weather. During the two weeks ended December 16, sales were up 17 percent from the corresponding period a year ago. November sales were 14 percent larger than those of the same month o f 1943 and up 15 percent from Oc tober. This increase over the previous month was greater than usual, and the seasonally adjusted index advanced 14 points to 204 percent of the 1935-39 average, the highest on record. Sales for the year probably will show a gain of approximately ten percent over 1943, despite the fact that, following the holiday season last year, it was generally felt that it would be very difficult to dup licate the record dollar volume experienced that year, in view of the shortages of many types of merchandise and the limitations on civilian production. Consumers used a large portion of their increased earn ings for the purchase of many of the luxury items. Sales of silverware and jewelry, cosmetics, handbags, and lug gage— all of which are subject to the 20 percent federal excise tax— were larger this season than last. Fur sales, however, were off 19 percent. The luxury tax has been felt more sharply in the fur departments than in the sale of any of the other taxable items. Departments selling other gift articles, such as toys, men’s furnishings, hosiery, and womens underwear, also reported year-to-year gains in their November dollar business. Homefurnishings are proving to be popular gift items, with sales of furniture at department stores last month up 18 percent from No vember 1943, china and glassware 16 percent, and do mestics, linens, and blankets 9 percent. Reporting fur niture stores in the fourth district experienced a year-toyear gain of 15 percent in their sales last month. Department store inventories were reduced five percent during November, largely as a result of the heavy sales volume, and at month-end were down one percent from November 30, 1943. In order to receive as much mer chandise as possible for Christmas selling, merchants increased their dollar volume of outstanding orders dur ing November by seven percent to a level four percent greater than November 30, 1943. Wholesale November sales at 171 wholesale firms in the fourth district were four percent greater than they were in the corresponding month last year. Firms selling automotive supplies, paints, electrical goods, and meats reported that their dollar volume was substantially 8 THE MONTHLY BUSINESS REVIEW larger this November than last, while sales of furniture, confectionery, and tobacco and its products were smaller. Wholesale inventories as of November 30, 1944, were down nine percent compared with the same date a year ago. Fourth District Business Indexes Commercial Failures (N u m ber)...................... ” (Liabilities)................... Sales— Life Insurance (O. and P a .)............... ” — Department Stores (97 firm s)........... ” — Wholesale Drugs (4 firm s).................. ” — ” Dry Goods (4 firm s)......... ” — ” Groceries (40 firm s)......... ” — ” Hardware (23 firm s)......... ” — ” All (71 firm s)...................... ” — Chain Drugs (5 firm s)*..................... ” — Chain Groceries (4 firm s)................. Building Contracts (T o ta l)............................ ” (Residential)................. Production— Coal (O., W . Pa., E. Ky.) . . . . ” — Cemenc (O., W. Pa., E. K y.)** ” — Electric Power (O., Pa., K y .)** ” — Petroleum (O., Pa., K y .)**. . . ” —-Shoes............................................. * Per individual unit operated. ** October, a Less than 0.5. Nov. Nov. 1944 1943 227 192 1 18 14 a 117 107 244 214 197 189 181 168 162 155 137 143 164 171 168 173 165 150 56 122 144 20 151 126 129 76 200 199 105 108 87 86 Nov. 1942 167 52 15 77 189 147 155 137 127 147 156 150 381 136 154 222 176 100 82 Nov. Nov. 1941 . 1940 147 120 67 85 65 22 88 103 164 138 136 126 154 124 109 101 118 173 137 110 108 131 137 116 149 200 249 211 124 121 183 196 134 160 98 99 65 89 Indexes of Department Store Sales and Stocks Daily Average for 1935-39=100 W ithout Adjusted for_ Seasonal Adjustment Seasonal Variation N ov. Oct. N ov. Nov. Oct. Nov. 1944 1944 1943 1944 1944 1943 SALES: Akron (6 ) ......................... Canton ( 5 )...................... Cincinnati (9 )................. Cleveland (1 0 )............... Columbus ( 5 ) ................. Erie ( 3 ) ............................ Pittsburgh (8 )................ Springfield (3 )................. Toledo ( 6 ) ........................ Wheeling (6 )................... Youngstown ( 3 ) ............. District (9 7 )................... ST O C K SDistrict (5 1 )................... 282 296 259 230 285 280 223 300 255 221 267 244 241 253 206 191 238 223 185 245 215 183 222 204 262 273 215 213 242 262 188 272 221 174 226 214 239 243 205 201 237 234 188 266 214 187 222 204 227 232 194 191 227 208 175 232 198 181 211 190 222 224 171 187 201 218 158 240 186 148 188 178 162 170 163 141 148 142 Dehits to Individual Accounts A kron ............... Butler............... C an ton............. Cincinnati. . . . Cleveland......... C o lu m b u s .-... CovingtonNewport. . . . D ayton............. E rie................... Franklin........... Greensburg----H am ilton......... H o m e s t e a d .... Lexington........ Lim a................. Lorain. ............. Mansfield......... M iddletown. . . Oil C ity ........... Pittsburgh. . . . Portsmouth. . . Sharon.............. S p r in g fie ld .... Steubenville. . . T oled o .............. Warren............. W heeling......... Y oungstow n... Zanesville......... T o ta l............ Nov. 1944 211,855 21,548 85,443 709,906 1,373,367 332,760 25,685 140,646 67,432 6,261 12,712 24,430 5,226 31,667 29,441 9,553 23,388 20,655 15,293 1,458,688 13,051 17,903 33,171 14,764 274,177 26,736 45,970 91,670 13,085 5,136,483 Jan.-Nov. 1943 1,920,480 170,979 803,200 6,356,089 12,847,240 3,167,100 % change from 1943 + 5.7 + 1 7 .1 + 1 2 .7 + 7 .0 + 1 3 .9 + 1 0 .3 272,044 1,582,707 701,386 67,628 136,070 227,288 54,616 387,386 304,006 96,386 236,415 218,307 168,060 14,654,038 129,154 186,059 357,923 152,015 2,939,949 268,325 473,687 962,312 142,570 52,779,658 250,134 1,534,757 659,403 57,125 116,525 220,546 51,948 341,809 263,961 79,368 195,692 218,426 172,132 13,573,577 112,512 166,038 347,081 138,947 2,651,804 261,788 430,224 905,293 140,622 48,154,800 + 8 .8 + 3.1 + 6 .4 + 18.4 + 1 6 .8 + 3.1 + 5.1 + 13.3 + 1 5 .2 + 2 1 .4 + 2 0 .8 — 0.1 — 2 .4 + 8 .0 + 14.8 + 12.1 + 3.1 + 9 .4 + 1 0 .9 + 2.5 + 1 0 .1 + 6.3 + 1.4 + 9 .6 (1944 compared with 1943) Percentage Increase or Decrease SALES SALES STOCKS N ovem ber first 11 Novem ber 1944 months 1944 D E P A R T M E N T STORES (97) Akron................................................................ + 8 + 2 — 6 Canton.............................................................. + 8 + 4 a Cincinnati......................................................... +20 +12 — 4 + 8 + 4 — 3 Cleveland......................................................... Columbus......................................................... + 18 4-14 + 1 Erie.................................................................... + 7 4* 5 + 6 Pittsburgh........................................................ +19 + 11 + 1 Springfield........................................................ + 11 + 4 a T oledo............................................................... +16 +12 + 3 Wheeling........................................................... + 23 +17 +13 Youngstown..................................................... +18 +12 a Other Cities.................................................... + 15 + 3 a District............................................................. +14 + 8 — 1 F U RN ITU R E (73) Canton.............................................................. +17 +12 — 20 Cincinnati........................................................ +12 — 1 + 9 Cleveland......................................................... + 6 — 6 — 21 Columbus......................................................... +12 + 6 — 26 D ayton.............................................................. + 1 — 23 a Pittsburgh........................................................ +20 + 6 — 8 T oled o..................................... ......................... + 13 + 1 + 2 Other Cities.................................................... +24 + 1 — 13 D istrict............................................................. +15 + 1 — 15 C H AIN STORES* Drugs— District (5 )...................................... — 1 + 1 a Groceries— District ( 4 ) ................................ + 13 + 8 a W H OLESALE T R A D E ** Automotive Supplies ( 7 ) ............................. +24 +20 +17 Beer ( 6 ) ............................................................ — 7 + 3 -0 Confectionery (3 ).......................................... — 11 a a Drugs and Drug Sundries ( 4 ) .................. + 4 + 8 — 2 Dry Goods ( 4 ) ............................................... + 8 a — 3 Electrical Goods (1 1 ).................................. + 15 — 1 — 5 Fresh Fruits and Vegetables ( 7 ) ............. + 2 — 2 +14 Furniture & House Furnishings (3 ).......... — 28 a a Grocery Group (4 0 )..................................... + 4 + 3 +11 Total Hardware Group (2 3 )..................... + 4 — 2 + 2 General Hardware (8 ).............................. — 4 + 3 + 2 Industrial Supplies ( 9 ) ............................ + 5 — 11 + ^ Plumbing & Heating Supplies ( 6 ) . . . . + 21 ’ — 1 a Jewelry ( 6 ) ...................................................... + 3 — 6 a Lumber and Building Materials (5 )......... + 13 a — 19 Machinery, Equip. & Supplies ( 4 ) ............ — 6 a — 4 Meats and Meat Products ( 4 ) ................... +13 +19 a Metals (3 ) ........................................................ — 1 a a Paints and Varnishes ( 4 )............................ + 13 +10 a -0 + 7 a Paper and its Products ( 6 ) ....................... Tobacco and its Products (1 3 )................... — 5 — 4 — 39 Miscellaneous (1 1 )........................................ +10 + 4 — 24 District— All Wholesale Trade ( 1 7 1 ) .. .. + 4 + 3 — 9 * Per individual unit operated. ** Wholesale data compiled by U. S. Department of Commerce, Bureau of the Census, a Not available. Figures in parentheses indicate number of firms reporting sales. Fourth District Business Statistics (Thousands of Dollars) % change Jan.-Nov. 1944 from 1943 2,029,509 + 2 6 .0 200,134 + 2 5 .5 904,920 + 2 1 .4 6,803,621 + 2 6 .4 14,631,039 + 1 4 .6 3,492,104 + 1 6 .8 + 1 1 .0 + 3 .6 + 1 7 .5 + 1 6 .1 + 1 8 .5 + 2 5 .7 + 4 .7 + 2 7 .7 + 2 2 .4 + 2 9 .9 + 2 7 .6 + 8.5 + 5.3 + 2 0 .4 + 3 1 .6 + 1 4 .5 — 8 .9 + 1 9 .7 + 13.4 + 2 0 .5 + 2 2 .7 + 17.8 + 11.5 + 18.3 Wholesale and Retail Trade (000 omitted) % change N ov. % change Jan.-Nov. Fourth District Unless 1944 from 1943 1944 from 1943 Otherwise Specified +10 51,820,000 +18 Bank Debits— 24 cities............. $5 044,000 Savings Deposits— end of month: +23 39 banks O. and W. Pa.............?1 138,029 Life Insurance Sales: 1,032,237 12 98,553 + 9 Ohio and P a ...............................$ Retail Sales: 452,667 57,480 + 1 4 + 8 Dept. Stores— 97 firms...........? 29,157 3,046 + 15 + 1 Furniture— 73 firms................. $ —39 149,715 13,567 — 54 Building Contracts— T otal. . . .$ —68 29,810 1,528 — 86 ” ” — Residential ? Commercial Failures— 1,300 —53 -98 5 ................................Liabilities $ —58 64 -92 1 Commercial Failures— Number. Production: 56,941 4,904 Pig Iron— U. S............ Net tons 82,199 7,259 Steel Ingot— U. S........ Net tons Bituminous Coal— 216,827 18,904 +20 9 .. .0 ., W. Pa., E. Ky. Net tons Cement— O.. W. Pa., W. Va. 5,581b —45 629a — 41 .............................................Bbls. Electric Power— O., Pa., Ky. 29,676b 3,051a -0 5 ..........................Thous. K .W .H . 22,228b 1 2,377a + 3 Petroleum— O., Pa., K y .. .Bbls. — 2 c —0 Shoes ..................... :......... Pairs Bituminous Coal Shipments: 54,991 +19 5,527 + 9 Lake Erie P orts.........Net tons a October b January-October. c Confidential. + + + —
@FedFRASER