The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
M Busin Covering financial, industrial and a g r i c u lt u r a l c o n d itio n s V ol. 26 Fourth Federal Reserve D istrict Federal Reserve Bank of Cleveland Cleveland, Ohio, February 29, 1944 FINANCIAL CONVERSION The national effort to bring about production of war goods and services at a rate of $85 billions per year could not be achieved without widespread and extensive physical conversion of industry from peace to wartime pursuits. Nor has it been possible to finance this stupendous ef fort without creating equally notable changes in the na tion’s banking and monetary system. The transformation of industry has been visible and tangible; but the tran sition of finance is less evident and conspicuous to the layman. It can be described only in terms of banks’ stock in trade, namely, loans, investments, cash, and de posits. For example, in the fourth district many banks have experienced a noticeable shrinkage in loans and discounts from the end of 1941 to date, notwithstanding a growing volume of V-type loans. The decline has been most marked in real estate loans, commercial-industrial-agricultural loans, and miscellaneous loans. The only type of borrowing to show a net increase during this interval was loans on securities, which expanded somewhat tem porarily during the last two war loan drives. The effects of wartime restrictions on construction, on consumers’ dur able goods, and with respect to consumer credit, are clear ly indicated in the behavior of loans. Neither is it possible to dissociate the 170 percent ex pansion in Government security holdings of fourth dis trict member banks from the influence of war. During the four years 1938-41, such holdings increased only about $400 millions. In the two succeeding years, the net gain was approximately $2,600 millions. A secondary consequence of this huge composite ad vance to the Treasury, and the expenditure of the proceeds thereof, was an extraordinary increase in deposits. For the district as a whole, total deposits rose 72 percent from mid-1939 to mid-1943; in about 40 counties aggregate deposits have risen more than 100 percent in response to industrial and other changes arising out of the war. Since the end of 1941, fourth district banks have paid out, over and above receipts, at least $800 millions of hand-to-hand currency— an operation which reduced the eview No. 2 disbursing banks’ cash reserves by a similar amount. This net outflow of currency is almost exclusively ascribable to the influence of war upon pay rolls, retail sales, and pref erences for currency for reasons both good and bad. In response to these various developments and re quirements, the Federal Reserve Bank of Cleveland dur ing 1942 and 1943 expanded its credit outstanding by more than one billion dollars. This credit was extended through the purchase of Government securities in part from within the district and in part in the open market; these purchases supplied banks in this district and elsewhere with additional reserves needed to meet the demands for currency and increased reserve requirements. Fourth dis trict member banks also obtained additional reserves through an inflow of funds from other districts. In view of these developments in loans, investments, deposits, reserves, and reserve credit, it is clearly evident that industrial conversion involved financial conversion as well. The former is now virtually complete. According to official estimates, expenditures for war are not expected to show much, if any, increase henceforth. While the im p o rtan ce of certain items will undoubtedly show sharp variations, the over-all volume of the war effort seems to have reached a maximum. Having achieved this goal, industry is in a position to devote increasing attention to resumption of civilian goods manufacture at some fu ture time. The kind of industrial operations which any specific enterprise wishes to undertake in the post-war world is largely a matter of self-determination, and an in creasing number are evolving fairly definite programs of post-war economic activities. The banking system is confronted with a wholly dif ferent problem. Whereas industry may have attained the maximum performance expected, the financial structure is probably still in the throes of expansion. Even though industrial production may remain essentially unchanged for some months to come, it does not necessarily follow that therefore bank loans will stabilize at present levels, that security portfolios will remain constant, that cash re serves will be free from further pressure, and that deposits will stand still. The effects of full-scale war upon the banking system are cumulative, and so long as the indus trial and financial requirements of the conflict remain at 2 THE MONTHLY BUSINESS REVIEW present levels, banking affairs are likely to be subject to those influences which have been predominant for the past two years. Meanwhile, a matter of considerable interest to com mercial bankers generally is the probable demand for bank loans during the reconversion for which industry is beginning to plan. It appears that demand will be determined in good part by the termination policies adopted by the armed services. If claims against the Government, or against prime contractors, are settled promptly, the demand for bank loans will be correspond ingly less than if settlement is protracted. Conversely, if the Government undertakes prompt and expeditious liqui dation of surplus commodities and facilities, prospective purchasers might utilize bank credit rather extensively. There is also the question of unused commitments un der V-type loans. On January 31, only 51 percent of the funds available under V-type loans processed by the Federal Reserve Bank of Cleveland had been drawn down by the borrowers. If it develops, as many bankers be lieve, that this proportion will not increase significantly, the demand for bank loans will be modified accordingly. What is even more important is the longer-term pros pect. At some future date, industrial reconversion to rela tively unrestricted civilian production will have become a fact, and the visible and tangible evidences of war will have virtually disappeared from the industrial scene. In the realm of banking, reconversion may take much longer, if indeed it will ever take place. The banking system cannot deliberately choose to maintain deposits at any specific level. Nor can it select a given volume of loans as being most desirable and more nearly con sistent with a specific deposit structure. The volume of deposits and loans is not a matter of self-determination by the banking system, but is dependent almost exclusively upon external economic conditions, the nature of which in the post-war period is not yet well-defined. BANK DEBITS A bank debit occurs whenever the balance in a de positor^ account is reduced. In the case of a savings (or time) account, the debit takes place through a counter withdrawal. A debit may arise from the use of a counter check, which in the normal course of events brings about a debit on the date of issue. By far the largest dollar volume of debits occurs when depositors’ checks, issued off the bank premises and usu ally to patrons of other banks, have found their way back to the bank upon which they were drawn. The honoring of such checks and the debiting thereof to the respective depositors’ accounts are synonymous. They are merely two aspects of the same operation. For a number of years, 177 banks, situated in 25 locali ties of the fourth district, have reported total debits posted monthly to all their deposit accounts except those pay able to other banks. The volume of such debits is be lieved to be a fairly accurate measure of the aggregate money payments made by individuals, partnerships, and corporations in each locality, month by month. For the country as a whole, bank debits rise and fall (usually with a slight time lag) with the national income (paid out), em ployment, pay rolls, retail sales, and production. Because of this correlation, bank debit figures may be used, with some discretion and reservations, in estimating THE MONTHLY BUSINESS REVIEW changes in economic conditions of localities for which more fundamental data are not available. Extenuating circumstances which may be present include such possi bilities as the fact that pay roll checks regularly paid out in a specific locality may be drawn upon an out-of-town hank, in which case expanding pay rolls would not be re flected proportionately in that locality’s bank debits. The debit of each pay check would occur in the city of the paying bank. In some localities perhaps other techni calities may interpose to qualify the correlation, such as random transfers of state and local government funds or transactions solely of a financial nature. In some cases, debits to war loan accounts may be noticeably above or below the district average. Subject to such possible exceptions, the 25 curves plotted in the adjoining column are a reasonably accurate measure of changes of agricultural, trade, and industrial conditions in each respective locality. Local pay rolls, re tail trade, employment, and other economic phenomena probably pursued trends quite comparable to the debit curve in nearly every instance. For each locality the 100 percent line represents the average annual debit volume for the years 1935-39. Suc cessive points plotted represent the volume for the twelve months ended at that point. This smoothing was neces sary to eliminate the purely seasonal fluctuations. It will be noted that three lines begin at a place below 100 percent, indicating that bank debits for 1939 in those localities were below the 1935-39 average. On the other hand, 1939 bank debits in Lorain, Middletown, and War ren were more than ten percent in excess of the base period. Of greater significance to the localities themselves are the following observable contrasts: a. There is considerable variation in the rate of ascent among the 25 curves. b. In some instances, the expansions have taken place at a quite uniform rate. c. In some instances, the increase took place in one or more instalments with intervening periods of little change. d. In a few cases, there has been no appreciable net increase for a year or longer. The variation under (a) ranges from one extremity of eight localities where 1943 debits (last point plotted) were only 30 to 67 percent above the 1935-39 average, to the other extreme of eight centers in which debits were more than double the base years’ average. In Akron and War ren the expansion has been nearly threefold. The aggre- 1RON AND STEEL C A P A C IT Y U N ITE D S T A T E S JANUARY I 100 d l l R O N ORE ■ j£ 80 !£ 60 o H (O 40 Z o _l steel i l ln i ^lii■ ■ i n n 0 1940 1941 1942 1943 1944 S gate increase for the 177 reporting banks was 97.5 percent. The most uniform rate of increase (b) took place in the larger cities, presumably for the reason that the volume of money transfers in such metropolitan areas was de termined by a multiplicity of influences and cross currents. For one reason or another, the rise was concentrated into one or more instalments (c) in such centers as Mid dletown, Lorain, Lexington (Ky.), Wheeling (W. Va.), and Pennsylvania reporting centers exclusive of Pittsburgh and Erie. Lorain, Middletown, and Steubenville are the largest centers to report only moderate, if any, increases during the past year. These bank debit trends cannot be used as the sole criteria for measuring present or anticipating prospective economic conditions in the respective localities. In some cases the growth may be overstated, and in others, under stated. Moreover, in some towns or cities, bank debits may continue to rise or at least remain at present high levels. In other localities with similar records, postwar conditions may bring about a contraction. These statis tics should be of particular value to those areas where the magnitude of changes in recent years can less readily be measured by other methods. MANUFACTURING, MINING Iron and Steel January production of steel ingots totaled 7,595,202 tons, an increase of 329,425 tons over the previous month and an increase of 171,225 tons over January 1943. Following the holiday slump in operations, percentage capacity engaged in pro duction advanced from 91.5 percent early in January to 100 percent for the first week in February. Sufficient supply of scrap is available, with a surplus in some grades. Supply of pig iron is ample for all needs and some of the blast furnaces built by the Defense Plant Corporation have not been blown in. Demand for plates and sheet steel continues. January production of steel plates ad vanced slightly to 1,173,000 tons under pressure of the landing craft program. Foundries in the fourth district continue to report a shortage of both skilled and unskilled labor as the chief factor limiting their output. Requirements of steel for high-test gasoline refinery con struction have increased and are given an equal rating with the needs of the landing craft program at present. Also important in the production schedule of steel is the program of railroad equipment. On January 1, 1944, Class 1 railroads had 35,737 freight cars and 955 locomo tives on order. The Office of Defense Transportation an nounced an over-all program for the construction of 65,000 freight cars in 1944 to replace the equipment now show ing signs of strain of increased usage in the past several years. On January 1, 1944, the blast furnace capacity of the United States was 67,391,270 net tons. This is an in crease of five percent over capacity of July 1, 1943, and an increase of 21 percent over that of January 1, 1940. Steel capacity for the nation was 93,652,290 net tons as of January 1, 1944. This represents a three percent in crease over July 1, 1943, and a fifteen percent increase over the capacity as of January 1, 1940. The enormous expansion of the iron and steel industry under the stress of the war program makes available a capacity far in ex cess of the pre-war peacetime needs of the nation. There 4 THE MONTHLY BUSINESS REVIEW has been an even greater expansion in the last two years in the capacity of lighter metals, which may prove a keen competitor in fields formerly dominated by steel. Bituminous Bituminous coal production in the Fourth Coal Federal Reserve District totaled 219,000,000 tons in 1943, approximately 38 percent of the total national output. In spite of the enormous production in comparison to the peacetime output of the industry, stocks of bituminous coal have been decreasing steadily throughout the winter. Shortages have developed in vari ous localities due to maldistribution, but so far the pinch has been felt only in supplies for residential heating. A prolonged cold snap could very easily create a tight situa tion in industrial supply. Under pressure from the Solid Fuels Administration, output has averaged high since the first of 1944 and the official 1944 goal for the industry of 620,000,000 tons may well be exceeded, barring labor difficulties which plagued the industry in 1943. January production in the fourth district totaled an estimated 19,400,000 tons, approximately 2,100,000 tons more than was produced in the same period of 1943. All signs indicate that the coal industry in the post war years must shape its course to operation on a reduced capacity. Due to the present rate of production, many mines find their best reserves are nearing exhaustion. Con siderable of the reserves for future mining lie in seams containing thick banks of impure coal and heavy rock partings and seams overlain by draw slate. To work either of such seams economically and efficiently, full scale mechanization must be developed to mine coal and impurities selectively. At present most of such mining is done with equipment for lighter work, and new or re placement of worn out equipment has been difficult to obtain due to wartime restrictions on manufacture involv ing the allocation of steel. Other The downward trend of machine tool outManufacturing put continues and estimated shipments of the industry for January 1944 fell five per cent below the December figure of $60,680,000. New orders received in January are estimated at approximately $29,000,000, a decline of 14 percent from the previous month. Manpower continues to limit the production of shoes, paperboard, lumber, and clothing in the fourth district. In addition to the acute manpower problem, shoe and paperboard manufacturers report a shortage of raw ma terials. Several plants in the pulp and paper industry operated on a schedule of four or five days per week dur ing January due to the lack of materials, scrap in par ticular being difficult to obtain. Clothing manufacturers continue on the approximate level of operation of De cember, but continued inroads on the present labor force by the draft, with the attendant difficulty of securing skilled replacements, make the maintenance of current production rates difficult. Output of many fourth district manufacturers, especially ceramic and glass, was affected by the natural gas short age felt keenly in mid-February. The War Production Board issued a warning that demands for gas in the Ap palachian area, Ohio, Pennsylvania, and West Virginia ex ceeded supply and urged strict conservation. Industries having stand-by equipment were not affected insofar as they were able to secure adequate supplies of other fuels. With the return of mild weather later in the month and the consequent decline in consumption for residential heating, supplies were again adequate for manufacturers. More substantial relief from the decline in productivity of the natural gas fields in southeastern Ohio and West Virginia is expected early this fall with the scheduled com pletion of a natural gas pipeline from the Texas fields. Construction Total construction awards as reported by the F. W. Dodge Corporation for the fourth district dropped sharply in January to $14,844,000. This was $10,000,000 less than the total for December and approximately $7,000,000 less than the total for Janu ary 1943. Residential construction accounted for 24 per cent of the awards for January. AGRICULTURE Number of The annual livestock inventory as of January Livestock 1 showed livestock numbers in the United on Farms States to be at an all-time peak. The in crease over 1943 was a continuation of the upward trend that has been continuous since 1938. Al though there were decreases in the numbers of sheep, horses, and mules, they were more than offset by a sharp increase in hogs and a moderate increase in cattle. Reductions in values per head of horses, cattle, sheep, and hogs resulted in a slight lowering (IV2 percent) of the total national value of livestock on farms from the all-time high reached on January 1, 1943. This years United States hog population of about 84 million head is about 10 million head, or 14 percent, larger than the number at the beginning of 1943, which was the previous record. A four percent national increase in all cattle and calves was accounted for largely by the six percent increase in cattle other than milk stock. This is the first year since 1924 that the number of milk stock has been below that of other cattle. The decrease in sheep numbers during 1943 was one of the sharpest on record. The total sheep population at the first of this year was estimated to be about 52 million head, seven percent under last year and the smallest since 1940. Num bers of both chickens and turkeys made further increases during 1943 bringing chicken numbers on January 1 to a new record high and turkeys to the third highest num ber on record. Livestock population changes in the states of the fourth * > THE MONTHLY BUSINESS REVIEW district have paralleled to a marked degree those of the entire country. The following table, by comparing the 1944 data with 1943 and the preceding ten-year average, emphasizes the strong trends which have characterized the population movements of some species of livestock in re cent years. Number of Livestock on Farms, January 1, 1944 Compared with 1933-42 Average and 1943 O h io 1 9 4 4 as % of T enyear avg. 1943 H o g s a n d p ig s A ll c a t t l e an d c a lv e s . . . . M ilk c o w s . . . H e ife rs k ep t f o r m ilk ............. S h e e p a n d la m b s H o r s e s a n d c o lt s ................... M u le s C h i c k e n s ............. T u rk ey s ............. K e n tu c k y 1 9 4 4 as % o f Tenyear avg. 1943 P e n n sy lv a n ia 1 9 4 4 as % of T enyear avg. 1943 W . V ir g in ia 1 9 4 4 a s % of T enyear avg. 1943 149 116 154 100 141 120 164 118 116 110 104 103 120 111 103 104 109 105 103 102 104 100 101 100 119 86 75 65 124 98 103 88 91 95 109 135 117 89 101 89 126 50 105 88 97 96 99 85 121 87 83 76 132 144 108 97 97 95 107 106 110 76 97 83 119 54 100 93 97 91 105 72 N o t e : 1 9 4 4 d a t a a r e p r e li m in a r y . S o u rc e : “ L iv e s to c k o n F a r m s , J a n u a r y E c o n o m ic s . 1, 1 9 4 4 ” , B u reau o f A g r i c u lt u r a l Burley Through February 18, the 43rd day of this year’s Tobacco se^ nS season, 274,609,121 pounds of Burley tobacco had been sold at Kentucky markets. This volume moved at an average price of $44.68, which was six percent over the average of last year’s selling season. It seems probable that complete data on this year’s market will establish new records for the season’s average price, crop value, and average price for many grades. According to the Bureau of Agricultural Eco nomics, all grades of Burley suitable for cigarette manu facturing have sold at ceiling prices. Some lots of inferior grades, however, sold considerably under the ceilings. The bulk of the increased demand for Burley tobacco can be attributed to the record-breaking consumption of cigarettes. The United States Department of Agriculture has estimated the 1943 consumption of cigarettes in this country at 1,877 per capita. This represents an increase of about twelve percent over 1942. Although 1943 cig arette consumption was at the highest level on record, cigar and smoking tobacco users consumed somewhat less than they did in 1942. Owing to greatly increased domestic use, stocks of all major types of tobacco are now below a year ago. Ac cording to Government estimates, additions to manufac turers’ and dealers’ stocks through purchases of the 1943 crop will not equal the season’s disappearance for most types. Stemming from this situation there has developed some discussion on the possibility of tobacco rationing. Two of the largest manufacturers of cigarettes have al ready limited their output to levels that will permit con tinued use of aged tobaccos. Complete satisfaction of the demand during the coming year would undoubtedly en tail use of green tobaccos. In 1940, the Kentucky Agricultural Experiment Station issued a bulletin on prices and sales of Burley tobacco which stated: “Unlike many farm products, the period of heaviest sales during the marketing season usually is the period of highest average price.” Although heaviest sales and highest prices did not coincide at the Lexington mar ket this year, the accompanying chart illustrates the re sponse, or more correctly, the lack of response of daily average tobacco prices to sales volume. Whereas an in verse relationship usually exists between the price and the volume of marketings of most farm commodities, the daily price and quantity relationship of Burley tobacco appears to be an exception to the rule. Undoubtedly, this seemingly paradoxical situation can be explained in the main by the extremely wide variations in the quality of the tobacco marketed. Competent ob servers of the Burley markets point out that daily deliv eries seldom contain the same proportion of good and poor quality tobacco. There is a tendency, they claim, for sales of the better grades of leaf to be concentrated on certain sale days. On these days, even though the quantity for sale may be relatively large, prices tend to be high because of the keen demand for high-quality leaf. On other sale days, prices may be low because of a large proportion of inferior tobacco, even though only small quantities are offered for sale. Thus, it seems evident that the wide variations in quality explain to a large de gree the apparent contradiction of the law of supply and demand at the daily auctions, and point out that demand is an important part of the demand-supply-price relation ship. Maximum Price Regulation 500, the directive un der which the 1943 crop was sold, established prices for 94 grades of Burley. Ceiling prices for these grades ranged from $9 to $62. TRADE Retail Sales Fourth district department store sales during January were one percent smaller than they were in the corresponding period a year ago, when dollar volume was at an all-time high for the month. The year-to-year gains reported by stores in Columbus, Toledo, Wheeling, and Youngstown were slightly more than offset by the declines for Cleveland, Akron, Canton, and Cin cinnati. Pittsburgh sales were at the 1943 level. The decrease in dollar volume from December to January was considerably less than seasonal, and the adjusted index advanced from 151 percent to 178 percent of the 1935-39 daily average. During the fiscal year ended January 31, 1944, sales in the district were nine percent greater com pared with 1942. During die three weeks ended February 19, dollar vol ume of sales was 15 percent less than that of the cor responding period of 1943, compared with the year-toyear decline of only one percent that stores reported for their January business. However, the comparison for February is somewhat distorted by the fact that sales dur ing that month last year were unusually high and the seasonally adjusted sales index reached the highest point on record. The accompanying chart shows the monthly distribution of fiscal year sales at fourth district department stores. Although the general pattern of distribution remained substantially the same during 1942 and 1943 compared witli the average of the three previous years, there were several changes that were interesting and may be signifi cant. Several months, such as February, March, October, and November, gained importance during the past two years, while the proportion of business done in May, August, September, and December declined. Wartime conditions and regulations were partially re sponsible for many of the changes in buying habits of department store customers the past two years. Early in 6 THE MONTHLY BUSINESS REVIEW 1942, sales were at a very high level, as many people were making purchases in anticipation of possible future shortages and price increases. The proportion of sales transacted during the first three months of that fiscal year was greater than that of the average for the same months of the previous three years. However, the General Maxi mum Price Regulation became effective in May 1942 and removed, at least temporarily, one incentive for the heavy buying that had occurred earlier in the year. Part ly as a result, the proportion of business done in May 1942 dropped sharply from the pre-war level. The ratio decreased again in June, the last month before the ef fective date of an amendment to Regulation W that pro vided for the freezing of past-due charge accounts. During 1943 the principal Federal order affecting the distribution of sales was the announcement of shoe ra tioning in February. This stimulated buying in all ap parel departments, when consumers feared that rationing might be extended to other clothing items. As a result, the ratio of February sales to the total for the year reached 7.3 percent, compared with 6.2 percent for the same month of 1942 and 5.8 percent for the average of 1939 through 1941. The expiration of the first shoe coupon contributed to the larger proportion of annual sales transacted in June last year compared with 1942. The decreasing importance of December reflected earlier Christmas shopping during the past two years than had been the case previously. The necessity of buying gifts in advance for those in the service, along with the fear of shortages of many types of merchandise and the requests stores made to their customers to shop early, re sulted in sharp increases in the share of the year’s sales that occurred during October and November 1942 and 1943 compared with the pre-war period. Monthly Distribution of Annual Sales Fourth District Department Stores Fiscal years ended January 31: A v e ra g e fo r 1 9 3 9 -4 1 F e b ru ary M arch A p r il ................................................................ M ay ............................................................... Ju n e J u ly A u gu st ......................................................... S e p te m b e r O c to b e r N ovem b er D ecem ber ................................................... Ja n u ary ......................................................... T o ta l 1942 1943 5 .8 7 .3 8 .2 8 .4 7 .7 6 .1 8 .0 8 .8 8 .8 9 .4 1 4 .5 7 .0 6 .2 8 .3 8 .6 7 .4 7 .1 5 .9 7 .5 8 .6 9 .6 9 .6 1 4 .1 7 .1 7 .3 7 .7 8 .3 7 .6 7 .9 6 .4 7 .3 8 .2 9 .2 1 0 .4 1 3 .3 6 .4 1 0 0 .0 1 0 0 .0 1 0 0 .0 Wholesale Department of Commerce reports that Sales sales at 152 wholesale firms in this district were eight percent larger this January than last. Firms selling clothing, meats, automotive supplies, paper products, and metals reported substantial increases in their business. Sales of jewelry were down 43 percent, electrical goods 15 percent, and hardware 11 percent. Stocks Contrary t0 the seasonal pattern, fourth district department store inventories were six percent larger on January 31 than they were on the first of the year. The seasonally adjusted stocks index advanced 13 points to 158 percent of the 1935-39 base, the highest since last August and two percent greater than the index for January 31 a year ago. The year-to-year changes varied widely among the reporting cities of this district, ranging from a decrease of four percent in Pittsburgh to a 23 percent gain for Columbus stores. Wholesalers increased their inventories three percent during January, and at month-end total stocks at reporting firms were 17 percent greater than they were on January 31, 1943. THE MONTHLY BUSINESS REVIEW Fourth District Business Indexes Wholesale a n d R etail Trade ( 1 9 3 5 - 3 9 = 100) ( 1 9 4 4 c o m p a r e d w ith 1 9 4 3 ) Jan . 1944 B a n k D e b its ( 2 4 c i t i e s ) ................................................ C o m m e r c ia l F a ilu r e s ( N u m b e r ) ............................ ( L i a b i l i t i e s )........................ S a le s— L ife I n s u r a n c e (O . a n d P a . ) .................... ” — D e p a r t m e n t S to r e s ( 9 7 f i r m s ) ................. ” — W h o le s a le D ru g s (4 f i r m s ) ....................... ” — ’’ D r y G o o d s (5 f i r m s ) ........... ” — ” G r o c e r ie s ( 3 4 f i r m s ) .............. ” — ” H a r d w a r e ( 2 7 f i r m s ) ........... ” — ” All ( 7 0 f i r m s ) ............................ ” — C h a in D ru g s (5 f i r m s ) * ............................... ” — C h a in G r o c e r ie s ( 4 f i r m s ) ......................... B u ild in g C o n t r a c t s ( T o t a l ) ....................................... ( R e s i d e n t i a l ) ........................ P r o d u c t i o n — C o a l (O ., W . P a ., E . K v . ) . . . . — C e m e n t ( 0 . . W . P a ., E . K y . ) * * — E le c . P o w e r ( 0 . , P a ., K v . ' i * * . . — P e tr o le u m ( 0 . , P a ., K y '.) * * . . . ” — S h o e s . . . . . ............................................. * P e r in d iv id u a l u n it o p e r a te d * * D ecem ber a N o t av ailab le- 213 12 6 102 131 201 150 152 129 153 150 150 61 45 a 74 211 98 87 Ja n . 1943 173 34 22 84 132 175 144 136 145 146 149 152 85 61 138 126 187 97 84 Ja n . 1942 Jan . 1941 Jan , 1940 135 79 91 110 97 57 156 77 49 17490. 130 161 136 147 177 157 131 148 140 184 144 166 168 101 101 95 87 137 80 104 117 110 100 106 121 143 132 130 134 98 110 80 122 84 96 86 96 97 98 101 184 127 80 129 101 107 D ebits to Individual A ccounts (T h o u s a n d s o f D o lla rs ) Ja n u a ry 1944 A k r o n ............................................................................... B u t l e r .............................................................................. C a n t o n ............................................................................ C i n c i n n a t i .................................................................... C l e v e la n d ...................................................................... C o lu m b u s ..................................................................... C o v i n g t o n - N e w p o r t ............................................. D a y t o n ........................................................................... E r i e ................................................................................... F r a n k l i n ......................................................................... G r e e n s b u r g .................................................................. H a m i l t o n ....................................................................... H ® m e s t e a d .................................................................. L e x i n g t o n ..................................................................... L i m a ................................................................................. L o r a i n .............................................................................. M a n s f i e ld ...................................................................... M id d l e to w n ................................................................ Oil C i t y ......................................................................... P i t t s b u r g h .................................................................... P o r t s m o u t h ................................................................. S h a r o n ............................................................................. S p rin g fie ld .................................................................... S te u b e n v i lle ................................................................ T o l e d o ............................................................................. W a r r e n ............................................................................ W h e e li n g ....................................................................... Y o u n g s t o w n ............................................................... Z a n e s v ill e ...................................................................... T o t a l ........................................................................... Ja n u a ry 1943 1 7 9 ,1 6 0 1 7 ,9 4 6 7 4 ,9 8 6 6 3 2 ,2 2 7 1 ,2 7 5 ,1 4 9 3 0 6 ,9 5 6 2 5 ,5 4 8 1 5 5 ,1 2 7 6 4 ,1 2 8 6 ,2 4 1 1 2 ,3 1 5 1 9 ,3 4 2 4 ,8 5 2 7 9 ,6 3 9 2 6 ,0 9 4 9 ,4 2 8 1 9 ,8 6 8 2 0 ,8 0 6 1 4 ,5 3 6 1 ,3 7 3 ,9 5 0 1 1 ,3 0 8 1 6 ,7 8 5 3 3 ,4 3 5 1 3 ,0 5 8 2 6 7 ,8 2 3 2 2 ,1 7 3 4 5 ,1 1 8 8 5 ,7 9 8 1 3 ,0 5 7 4 ,8 2 6 ,8 5 3 % ch an ge fro m 1943 1 5 0 ,1 8 0 1 2 ,4 6 7 6 4 ,8 2 5 5 3 7 ,1 0 6 1 ,0 2 8 ,4 5 3 2 3 6 ,4 7 2 2 1 ,5 9 0 1 2 5 ,4 1 8 5 0 ,3 1 0 4 ,5 7 5 9 ,9 8 3 1 8 ,9 5 6 4 ,1 2 9 7 0 ,9 9 9 2 4 ,3 5 7 6 ,1 3 4 1 5 ,1 9 7 1 7 ,5 8 8 1 2 ,9 8 2 1 ,0 8 6 ,2 4 3 8 ,5 5 5 1 3 ,7 1 5 2 8 ,0 2 2 1 1 ,2 9 7 2 0 2 ,7 2 8 2 1 ,0 8 6 3 3 ,7 9 4 7 2 ,5 3 8 1 1 ,7 9 2 3 ,9 0 1 ,4 9 1 + 1 9 .3 + 4 3 .9 + 1 5 .7 + 1 7 .7 + 2 4 .0 + 2 9 .8 + 1 8 .3 + 2 3 .7 + 2 7 .5 + 3 6 .4 + 2 3 .4 + 2 .0 + 1 7 .5 + 1 2 .2 + 7 .1 + 5 3 .7 + 3 0 .7 + 1 8 .3 + 1 2 .0 + 2 6 .5 + 3 2 .2 + 2 2 .4 + 1 9 .3 + 1 5 .6 + 3 2 .1 + 5 .2 + 3 3 .5 + 1 8 .3 + 1 0 .7 + 2 3 .7 F ourth D istrict B usiness Statistics F o u r t h D i s t r i c t U n le s s O th e rw is e S p ecified ( 0 0 0 o m itte d ) Ja n u a ry 1944 B a n k D e b its — 2 4 c i t i e s ........................................3 4 , 7 4 1 ,0 0 0 S a v in g s D e p o s its — en d o f m o n th : 3 9 B a n k s O. a n d W . P a .................................... 3 9 5 7 ,2 1 2 Life I n s u r a n c e S a le s : O h io a n d P a ............................................................. 3 8 6 ,4 3 0 R e t a il S a le s : D e p t . S to r e s — 9 7 firm s.......................................3 3 1 ,0 8 7 W e a r in g A p p a re l— 1 6 f ir m s ........................... 3 1 ,5 2 0 F u r n itu r e — 75 f ir m s ............................................. 3 1 ,6 6 2 B u ild in g C o n t r a c t s — T o t a l ............................... 3 1 4 ,8 4 4 ” — R e s i d e n t i a l ................. 3 3 ,4 9 8 C o m m e r c ia l F a ilu r e s — L ia b i lit ie s .................3 91 ” ” — N u m b e r ....................... 8 P r o d u c ti o n : P ig I r o n — U . S ....................................N e t T o n s 5 ,2 7 6 S te e l I n g o t— U . S ...............................N e t T o n s 7 ,5 9 5 C e m e n t— O ., W . P a ., W . V a ..............B b ls. 610a E l e c . P o w e r — O ., P a ., K y . T h o u s . K .W .H 3 ,2 1 2 a P e tr o le u m — O ., P a ., K y .........................B b ls. 2 ,1 6 7 a Shoes .................................................................P a irs b a D ecem b er b C o n fid e n tia l 7 Jan u a ry 1943 % ch a n g e fro m 1 9 4 3 3 , 8 3 2 ,0 0 0 +24 8 2 4 ,2 2 8 +22 3 1 ,3 7 2 1 ,5 3 7 1 ,7 3 8 2 0 ,8 1 1 4 ,7 3 7 324 23 — — — — — — — 5 ,1 9 4 7 ,4 2 4 1 ,0 3 6 a 2 ,8 4 9 a 2 ,1 5 3 a b + 2 + 2 — 41 +13 + 1 + 4 D E P A R T M E N T S T O R E S (9 7 ) A k r o n ........................................................................................................ 0 — 4 C a n t o n ................................................................................................... — 3 3 C i n c i n n a t i .............................................................................................. — I + 4 _o_ C l e v e la n d ............................................................................................... — 5 C o lu m b u s .............................................................................................. +23 + 4 E r i e ............................................................................................................. — 3 — 2 P i t t s b u r g h ............................................................................................. — 4 -0 S p rin g fie ld ........................................................................................... a + 3 T o l e d o .................................................................................................... + 10 + 10 W h e e li n g ................................................................................................ + 14 + 9 Y o u n g s t o w n ......................................................................................... a + 4 O t h e r C i t i e s ........................................................................................ — 7 + 5 D i s t r i c t .................................................................................................... — 1 + 2 W E A R I N G A P P A R E L (1 6 ) C a n t o n ..................................................................................................... + 7 + 1? C i n c i n n a t i ............................................................................................. — 24 — 16 C l e v e la n d ............................................................................................... a + 4 P i t t s b u r g h ............................................................................................. + 18 + 11 O t h e r C i t i e s ........................................................................................ — 7 + 15 D i s t r i c t .................................................................................................... — 1 + 4 F U R N I T U R E (7 5 ) C a n t o n . . ................................................................................................ — 24 +20 C i n c i n n a t i .............................................................................................. — 4 — 23 C l e v e l a n d ............................................................................................... — 25 — 11 C o lu m b u s ............................................................................................... — 26 + 7 D a y t o n ..................................................................................................... — 24 a P i t t s b u r g h ............................................................................................. — 41 + 2 T o l e d o ....................................................................................................... — 6 — 10 O th e r C i t i e s ......................................................................................... — 15 — 29 — 4 D i s t r i c t .................................................................................................... — 30 C H A IN S T O R E S * D r u g s — D i s tr i c t ( 5 ) ...................................................................... a + 2 G r o c e r ie s — D i s tr i c t ( 4 ) .............................................................. a -0 W H O LESA LE T R A D E ** — 7 A u to m o t iv e S u p p lies ( 6 ) ......................................................... +33 B e e r ( 3 ) .................................................................................................. a +21 a C lo th in g a n d F u r n is h in g s ( 4 ) ................................................ +61 C o n f e c t io n e r y ( 4 ) ............................................................................ a +31 D ru g s a n d D r u g S u n d rie s ( 4 ) ............................................... a +15 D r y G o o d s ( 5 ) ................................................................................... — 36 + 4 E le c tr ic a l G o o d s ( 9 ) ...................................................................... — 15 + 15 — 4 F r e s h F r u i t s a n d V e g e ta b le s ( 5 ) ......................................... + 14 +27 G r o c e r y G ro u p ( 3 4 ) ....................................................................... + 12 T o t a l H a rd w a r e G ro u p ( 2 7 ) .................................................. — 11 — 3 — 9 G e n e ra l H a r d w a r e ( 6 ) ............................................................ — 1 — 14 I n d u s tr ia l S u p p lies ( 1 2 ) ........................................................ + 7 — 17 P lu m b in g & H e a t in g S u p p lies ( 9 ) ............................... +16 a J e w e l r y ( 3 ) ........................................................................................... — 43 M e a ts a n d M e a t P r o d u c t s ( 3 ) ............................................. +169 +35 M e ta l s ( 3 ) ........... .. ............................................................................... a +20 a P a in t s a n d V a rn ish e s ( 4 ) .......................................................... + 7 P a p e r a n d its P r o d u c ts ( 6 ) ...................................................... a +26 T o b a c c o a n d its P r o d u c ts ( 1 3 ) ............................................. — 6 + 3 M is c e lla n e o u s ( 1 9 ) .......................................................................... + 12 +41 + 17 D i s tr i c t— A ll W h o le sa le T r a d e ( 1 5 2 ) .............................. + 8 * P e r in d iv id u a l u n it o p e r a te d . * * W h o le s a le d a t a c o m p ile d b y U .S . D e p a r t m e n t of C o m m e r c e . B u r e a u o f th e C e n s u s, a N o t a v a ila b le . F ig u re s in p a r e n th e s e s in d i c a te n u m b e r of firm s re p o r tin g sales. +16 7 0 ,6 6 9 P e rce n ta g e In cre a se o r D ecrease SALES STO CK S la n u a rv Ja n u ary 1044 1944 Indexes o f D ep a rtm en t Store Sales a n d Stocks D a i ly A v e r a g e f o r 1 9 3 5 - 1 9 3 9 = 1 0 0 1 1 4 29 26 72 65 Ja n . 1944 SA LES: A k ro n ( 6 ) ................................. C a n t o n ( 5 ) .............................. C in c in n a ti ( 9 ) ...................... C le v e la n d ( 1 0 ) .................... C o lu m b u s ( 5 ) ....................... E r ie ( 3 ) ..................................... P it ts b u r g h ( 8 ) ...................... S p rin g field ( 3 ) ...................... T o le d o ( 6 ) ............................... W h e e lin g ( 6 ) ......................... Y o u n g s to w n ( 3 ) ................. D i s tr i c t ( 9 7 ) .......................... STO CKS: D i s tr i c t ( 5 1 ) .......................... ♦ R e v is e d . W ith o u t A d ju s te d S e a so n a l A d ju s tm e n t fo r S e a s o n a l V a r i a t i o n D ec. Jan . Jan . D ec. Ja » . 1943 1943 1944 1943 1943 162 162 138 129 154 153 118 164 131 108 139 131 314 335 269 245 309 316 235 364 273 250 284 260 168 166 139 136 147 155 117 160 119 96 134 132 231 211 186 158 202 206 171 253 190 180 183 178 186 171 151 147 163 166 137 193 155 119 167 151 241 216 188 166 194 210 170 246 172 161 176 179 141 132* 138 158 145* 15S 8 THE MONTHLY BUSINESS REVIEW Sum m ary of National Business Conditions By the Board of Governors of the Federal Reserve System Industrial activity was maintained in January following a decline from November to December. Commodity prices were steady and retail sales continued in large volume in January and the first three weeks of February. INDUSTRIAL PRODUCTION Industrial production 1937 F e d e ra l 1930 1339 R e se rv e sh o w n 1940 1941 !942 1943 1944 in d e x . M o n th ly f ig u r e s , is f o r J a n u a r y 1 9 4 4 . la t e s t W H OLESALE PRICES B u r e a u o f L a b o r S t a t i s t i c s ’ in d e x e s . W e e k l y fig u r e s , l a t e s t s h o w n a r e f o r w e e k e n d in g F e b r u a ry 1 9 , 1 9 4 4 . MEM3ER BANKS IN LEADING CITIES In January the Board s seasonally adjusted index of industrial production stood at 242 per cent of the 1935-39 average as compared with the peak level of 247 in October and November 1943. Steel production increased 4 per cent in January and continued to rise in the first three weeks of February, reflecting large military requirements for landing craft and other invasion equipment as well as increasing use of steel for farm machinery and railroad equipment. Aluminum production was curtailed in January from the peak rate in the last quarter of 1943. Activity in the transportation equipment group was 5 per cent lower in January than at the peak in November. The largest decline occurred in commercial ship yards, many of which were changing from the production of Liberty ships to Victory and other types of ships. In the automobile industry production of 3,000 trucks was reported during the mondi under the greatly enlarged civilian truck program for 1944 which calls for the production of 92,000 medium weight and 31,500 heavy trucks during the year. Output of textiles, shoes, and manufactured foods rose slightly in January, following small declines in December. Chemicals production continued to decline, reflecting a further curtailment of small arms ammunition output. Output of petroleum and rubber products showed little change. Production of coal increased and crude petroleum output continued at a high level in January and the early part of February. Sunday work was instituted in anthracite mines during February as a measure to increase production, and output for the week ending February 12 was 13 per cent higher than the preceding week. The value of construction contracts awarded in January, according to reports of the F. W . Dodge Corporation, declined to the lowest level for the month since 1935. Distribution Value of department store sales in January and the first three weeks of February was maintained at a high level for this season of the year. Sales in January exceeded the large volume of a year ago by about 6 per cent but in February sales were somewhat smaller than last year when a buying wave developed following the announcement of shoe rationing. Freight carloadings declined less than usual in January and the first half of February, owing chiefly to the heavy volume of coal shipments. Movement of grain continued at the high level of last fall and livestock and lumber shipments were in large volume. Commodity prices D e m a n d d e p o s it s ( a d j u s t e d ) e x c l u d e U . S . G o v e r n m e n t a n d in t e r b a n k d e p o s it s a n d c o l l e c t i o n i t e m s . G o v e r n m e n t s e c u r iti e s in c lu d e d 'r e c t a n d g u a ra n te e d is s u e s . W ed n esd ay f ig u r e s , la t e s t sh o w n a re fo r F e b r u a r y 1 6 , 1 9 4 4 . MEMBER BANK RESERVES B re a k d o w n b e tw e e n r e q u ire d an d excess re s e r v e s p a r t l y e s t i m a t e d . W e d n e s d a y f ig u r e s , la t e s t sh o w n a r e fo r F e b r u a r y 1 6 , 1 9 4 4 . W holesale prices of most commodities continued to show little change in January and the early part of February. Maximum prices for coke, wood pulp, furniture, and certain other products were increased moderately. The cost of living index of the Bureau of Labor Statistics declined from 124.4 per cent of the 1935-39 average in Decem ber to 124.1 in January. Bank credit Purchases of securities in the Fourth W ar Loan Drive by corporations and individuals resulted in a release of required reserves of member banks because funds were drawn from private deposit accounts, which require reserves, to the Government war loan accounts, which are exempt from reserve requirements. As a consequence, member banks repurchased bills from the Reserve Banks, and the latter’s holdings of Government securities declined by 520 million dollars. At reporting member banks in 101 leading cities, adjusted demand deposits decreased by 3.4 billion dollars in the four weeks ending February 16, while U. S. Government deposits increased by 6.9 billion, reflecting purchases of Government securities by bank customers during the war loan drive. Government security holdings at reporting member banks increased 2.8 billion dollars over the four weeks. Loans to brokers and dealers increased by 320 million during the drive which was substantially less than in either of the two previous campaigns. Loans to others for purchasing or carrying Government securities rose by about 610 million, twothirds of which was at New York City banks. Commercial loans, which had increased substantially during the Third W ar Loan Drive, showed little increase during the current period.
@FedFRASER