Full text of Economic Review (Federal Reserve Bank of Cleveland) : March 1947, Vol. 29, No. 3

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Busin

ly
eview

F inance, Indu stry
Agriculture, and Trade

Fourth Federal Reserve District
Federal Reserve Bank of Cleveland

Vol. 29___________________Cleveland, Ohio, March 1, 1947

__________________ No. 3

ANALYSIS OF COMMERCIAL AND INDUSTRIAL LOANS
Rapid Growth Probably the outstanding banking
in Commercial development during the past year
Loan Volume
and a half was the rapid increase in
the volume of commercial and in
dustrial loans. The current figure at Fourth District
reporting member banks is at an all-time high, roughly
75 percent above the level at the close of the war.
Loans of this type increased at the unprecedented
rate of 6 percent per month during the last half of
1946. The rate of advance has slowed down somewhat
thus far during 1947, but substantial gains are still
occurring week after week.
The rapid growth has been of great interest to banks,
to business borrowers, and to all those responsible for
the orderly functioning of our economy. Commercial
and industrial loans now constitute roughly half the
loan portfolio of the average bank and are a major source
of bank earnings. Business enterprises have relied
to a large degree upon bank borrowings for working
capital and for expansion of plant facilities. The
economic community as a whole has an important
stake in these loans, since an adequate volume of
credit is essential to a smoothly operating economy.

Commercial Despite the mounting importance o f
Loan Survey business loans to all elements in the
community, relatively little has been
known regarding the characteristics of these loans.
On what terms are the funds being loaned? How
do the terms vary from bank to bank and from com
munity to community? What industries are borrow
ing and how large are the borrowing concerns? The
answers to these and other questions have been
supplied through a recent Systemwide survey o f the
commercial and industrial loans in about one-fourth
of the member banks of the System.
In this District, the sample consisted of 165 member
banks, holding about 80 percent of the commercial
and industrial loans of all 724 member banks. The
participating banks supplied ten items of informa
tion regarding their loans outstanding on last Novem
ber 20. On a given loan, the banks stated the dollar
amount outstanding, the date made and due, the
repayment method, the interest or discount rate, and
the security pledged. The borrower was also de
scribed as to industry, assets, and date and type of
organization. Real estate loans made for business
purposes were included in the analysis, but open
market paper and Commodity Credit Corporation
loans were excluded.

Percentage Distribution of Commercial and Industrial Loans by Size of Bank
PERCENT OF
DISTRICT T O T A L

PERCENT OT
DISTRICT TO TAL

M O N T H L Y BUSINESS R E V IE W

Facts About the Lenders
Size of
Lending
Institutions

The characteristics of commercial
loans differ ‘somewhat by size of
bank. Therefore, the banks of the
District were divided into four size
groups. The respective groups are listed in the ac
companying table which also indicates average de
posits of banks in each group, the average volume of
commercial and industrial loans, and the ratio of these
loans to deposits.
Ratio of Commercial and Industrial Loans to Deposits
at 165 Sample Banks
Deposit
Range
in
Millions

Average
Average
Deposits*
Commercial
Loan Volume**
Thousands of Dollars

Over $100
3393,200
$10 to $100
23,100
$2 to $10
4,800
Under $2
1,500
* June 29, 1946
** November 20, 1946

Ratio of
Commercial
Loans to
Deposits

$37,350
1,674
158
45

The results indicate that commercial and industrial
loans constitute a considerably larger portion of the
Percentage Distribution of Dollar Volume of Loans by
Industry of Borrower and Size of Bank
PERCENT OT
DISTRICT TOTAL
00

100

M AN U FACTU R IN G
AND MINING

W HOLESALE
AND RETAIL

BANKS WITH DEPOSITS OF
PERCENT OF SIZE
GROUP TOTAL

PERCENT OF SIZE
GROUP TO TAL

UNDER

$ 2 M IL L IO N
80

7%t

business of the large banks than of the small. The
ratio of commercial loans to deposits ranged from a
high of nearly ten percent at the largest institutions
down to three percent at the smallest banks. Smaller
banks have a comparatively large share of their loan
portfolios in the form of real estatfe loans, consumer
credit, and loans to farmers.
PER CEN TAG E D IS T R IB U T IO N OF
C O M M E R C IA L A N D IN D U ST R IA L LO A N S
B Y IN D U S T R Y
Distribution of:
Number
Dollar
of
Business of Borrower
Amount
Loans
M an u factu ring and M in ing
Iron, Steel, and non-ferrous metals and
their products; electrical and other ma
chinery; and automobiles and other
transportation equipment and parts. . .
Food, liquor, and tobacco.............................
Petroleum, coal, chemicals, and rubber.. .
Textile, apparel, apd leather........................
All other (including lumber; furniture;
paper; printing and publishing; and
stone, clay, and glass)................................

9 .5 %
7.3
3.3
3.0

PERCENT OT
DISTRICT TO TAL

March 1, 1947

2 2 .5 %
9 .5
7 .9
1 .2

6 .1 %
2.3
3.3
0 .5

6 .4

5 .2

Total
Retail Trade
Apparel, dry goods, shoes, department
stores, mail-order houses, variety stores,
and general stores........................................
Food, liquor, tobacco, restaurants, and
drugstores......................................................
Home furnishings, furniture, and electrical
appliance stores; hardware and farm
implement dealers; lumber and build
ing material dealers; and plumbing and
heating equipment dealers........................
Automobile dealers and auto accessory
stores, and filling stations.........................
All other (including farm feed, fuel dealers
and jewelry stores)......................................

4 7 .5 %

1 7 .4 %

3 .4

4 .6

3.3

13.6

1.9

9 .1

1 .9

6 .5

1.5

6 .6

Total.........
W holesale Trade
Home furnishings, furniture, and electrical
appliances; hardware, machinery and
metal products; lumber and building
materials; and plumbing and heating
equipment.......................................................
Food, liquor, tobacco, and drugs................
Automobiles and parts, and petroleum. . .
Apparel, dry goods, shoes and related raw
materials.........................................................
All other (including farm feed, fuel,
jewelry, and paper).....................................

1 2 .0 %

4 0 .4 %

3 .2
3 .0
0 .7

3.1
3.5
1.0

0 .5

2 .0

2.3

Total
Other
Transportation companies (railroad, etc.)
communication companies, and other
public utilities...............................................
Sales finance companies.................................
Services (including hotels; repair services;
amusements; personal and domestic
services; and medical, legal, and other
professional services)..................................
Building and road construction contractors
and sub-contractors....................................
All other (including forestry; fishing; and
real estate).....................................................

9 .4 %

Total.........
N ot Classified......................................................

IS ,

Grand Total

1 0 .4 %

11.4
7 .2

6 .2
0 .7

3 .4

10.3

3 .0

5.1

5 .7

7.9

3 0 .7 %

3 0 .2 %

0 .4

1 .6

1 0 0 .0 %

March 1, 1947

M O N T H L Y BUSINESS R EV IEW

In part because of this greater activity of the large
banks in the business loan field, but chiefly because
of the concentration of a large proportion of banking
resources in the largest institutions, the bulk of the
District’s estimated 3840 million volume of commer
cial and industrial loans was held by the largest
banks. An accompanying chart indicates that at the
time of the survey, 16 banks with deposits of over $100
million held 71 percent of the loan volume and another
20 percent was held by the 101 institutions with
deposits of $10 to $100 million. The 413 banks in the
$2 to $10 million category had loaned 8 percent of the
total, and the District’ s 194 smallest institutions held
only 1 percent.
However, the dollar figures, which are weighted so
heavily by the large loans at the biggest institutions,
tend to obscure the vital role played in the commer
cial lending picture by the smaller banks. The im
portance of the small banks is emphasized by an ac
companying chart, which reveals that the smallest
banks held seven percent of the District’ s estimated
total of 52,000 loans. The average small bank thus had
about 20 commercial and industrial loans on its books.
The importance of those loans to the economic life of
the communities served by the small banks is
undoubtedly great.
The next larger banks, with deposits of $2 to $10
million, held 29 percent of the total number of loans.
Banks in the $10 to $100 million category had 40
percent of the loans, whereas the largest banks, which
had 71 percent of the dollar volume of loans, held only
24 percent of the total number of loans.

Facts About the Borrowers
Industry of Although all industries have relied upBorrowers
on banks for substantial amounts of
credit, manufacturing and mining in
dustries accounted for almost half of the estimated
$840 million in commercial and industrial loans at all
Fourth District member banks as of November 20.
An accompanying chart also shows that retail and
wholesale establishments together borrowed roughly
20 percent of the total, while borrowing by public
utilities amounted to about 12 percent of the aggregate
District figure. Sales finance companies accounted
for 7 percent of the total and the remaining 12 percent
was borrowed by service establishments, construction
contractors, and unclassified industries.

Distribution of Dollar Volume of Loans by Industry
Within Each Bank Size Group
Industry

All
Banks

Mfg. and Mining
Retail
Public Utilities
Wholesale
Sales Finance
All Other
Total all
Industries

48%

-----------Banks with Deposits of---------Over
$10 to
$2 to
Under
$100
$100
$10
$2
Million Million Million Million
54%

3 4%

9
7
13

8
9
9

5
14
3
24

100%

22%

2 7%
38
4

49
7
5

100%

Distribution of Number of Loans by Industry
Within Each Bank Size Group
Industry

All
Banks

Retail
Mfg. and Mining
Wholesale
Public Utilities
Sales Finance
All Other
Total all
Industries

40%
17
10
6
1
25
--------100%

--------- Banks with Deposits of ------Over
$10 to
$2 to
Under
$100
$100
$10
$2
Million Million Million Million
29%
22
10
6

39%
16
12
8
2
1
32
25
---- ---------100%
100%

49%
16

54%

100%

The dominant position of the manufacturing and
mining industry in the dollar figures for all banks
disappears when the comparison is made on the basis
of the number of loans made to each industry. An
adjoining chart shows that about 50 percent of the
District’ s estimated 52,000 loans were to retail and
wholesale establishments, 17 percent to manufac
turing and mining concerns, and 32 percent to all
other categories combined. This variation between
dollar figures and the data on the number of loans
was caused by the fact that the average loan to
wholesalers and retailers is much smaller than the
average manufacturing and mining loan.
The average size of manufacturing and mining
loans last November was $44,000 and public utility
loans averaged about $30,000, whereas the average
loan to wholesalers was $15,000 and to retailers
$5,000. Loans to finance companies, which constituted
7.0 percent of the dollar total, amounted to only
0.7 percent of the numerical total, a variation that
may be attributed to the fact that the average size
of the loans to finance companies was $158,000, the
highest figure among all the classifications.

Percentage Distribution by Industry
Average Size of Loans by Industry

Number of Loans
PERCENT OF
DISTRICT TO TAL

PERCENT OT
DISTRICT TO TA L

THOUSANDS
OF DOLLARS
I60r

120

THOUSANDS
OF DOLLARS

■

80
I

■

h W

M O N T H L Y BUSINESS R E V IE W

Size of Average Loan By Industry
Within Each Bank Size Group
Industry

All Industries

All
Banks
316,100

--------- Banks with Deposits of -----Over
310 to
32 to
Under
3100
3100
310
32
Million Million Million Million
347,400

38,200

34,300

32,300

Sales Finance
3157,500 3244,100 343,300 318,700
Mfg. and Mining 44,100
117,200
17,100
7.300
Public Utilities
29,800
119,100
5,200
3,900
14,700
Wholesale
39,300
9,400
4.300
Retail
4,800
9,700
4,500
3,400
All Other
9,100
7,800
12,700
4,000

_o _
33,500
2.900
2,500
2,100
1.900

Size of
The results of the survey indicate that
Borrowers Fourth District banks are actively en
gaged in financing small and medium sized
business. The accompanying chart indicates that
almost 70 percent of the total number of loans were
made to borrowers whose assets amounted to less than
350,000 and approximately 90 percent of the borrowers
had assets of less than $250,000. Borrowers with
assets in excess of $5 million accounted for only two
out of every hundred loans in the portfolios of Fourth
District member banks. Furthermore, at the largest
banks (deposits in excess of $100 million) almost
two-thirds of the borrowers represented firms with
assets of less than $50,000.
The dollar figures likewise indicated that banks are
channeling a large volume of credit to small business.
Because of the large size of the loans to the bigger
concerns, firms with assets in excess of $5 million
accounted for almost half the total dollar volume of
loans in the November survey. Nevertheless, small
businesses with assets under $50,000 accounted for 11
percent of the total, while 27 percent of the funds
moved to firms with assets under $250,000 and 36
percent of the borrowers had resources of less than
$750,000.

Facts About the Various Conditions of the Loans
Loan
About 40 percent of the dollar volume of
Maturity commercial and industrial loans at Fourth
District member banks was scheduled to
mature beyond one year from the dates on which the
loans were made. Thus a sizable proportion of the
total loan volume apparently was designed to meet

March 1, 1947

Percent of Dollar Volume of Loans with Maturity Provision
of One Year or Less, by Industry of Borrower
and Size of Bank
--------- Banks with Deposits of --------Over
310 to
32 to
Under
3100
3100
310
32
Million Million Million Million

Industry

All
Banks

All Industries

60%

51 %

83 %

82%

Sales Finance
Wholesale
Retail
Mfg. and Mining
Public Utilities
All Other

90%
81
75
55
16
73

89%
74
69
49
8
63

100%
92
78
83
75
84

100%
94
78
88
73
78

—0—
100%
79
70
81
100

other than the seasonal or temporary needs of the
borrowers.
As the above table indicates, only about half the
loan volume at the largest banks contained maturity
provisions of one year or less, whereas the correspond
ing percentages at each of the other three size groups
approximated 82 percent. Thus, in the Fourth
District, the largest banks apparently are the most
active in the field of term loans.
In each bank size group, the highest percentage of
year or less maturities was found in the loans to sales
finance companies. Wholesale companies ranked
second in the various bank size groups with regard to
year or less maturities, with retail establishments
generally third. The longest maturities were associ
ated with loans to manufacturing and mining in
dustries and to public utilities.

Loan
At the time of the survey about 60 percent
Security of the total dollar volume of commercial and
industrial loans was unsecured. Further
more, among the various bank size groups, it was the
largest institutions which placed the greatest reliance
upon the general credit worth of the borrower. Almost
70 percent of the dollar volume was unsecured at the
largest banks, compared with about 36 percent at the
two middle sized groups and 48 percent at the smallest
banks. Furthermore, this tendency for the largest
banks to make a comparatively large share of their
loans on an unsecured basis was true in the case of
each industry.

(Continued on page 10)

Percentage Distribution of Commercial and Industrial Loans by Size of Borrower
PERCENT Or
DISTRICT TO TAL

PERCENT OT
DISTRICT TO TAL

-------------------|I00

I00|----------------DOLLAR VOLUME
80

PERCENT Or
DISTRICT TOTAL
100

PERCENT OT
DISTRICT TO TA L

March 1, 194?

Mo n

thly

Bu s i n e s s

r e v i£W

THE OUTLOOK FOR LEAD
The persistent shortage of lead has affected innu
merable industries throughout the Fourth District.
Inadequate supplies of the metal have had a continu
ing effect upon the operations of heavy consumers
such as manufacturers of wet batteries, automobiles,
paints, and other products of general use. The
uncertain lead situation has been of equal importance
to producers of glass, lead pipe, solder, tetraethyl lead
fluid, galvanized ferrous products, and electrical
equipment. Electric utilities require a large amount
of the metal in the form of lead-covered cable.
Most of these industries had predicated their post
war production programs on the assumption that lead
would be obtainable in sufficient amounts. Yet the
available supply of lead from both domestic and
foreign sources has been decreasing since the war’s end.
The accompanying chart illustrates the narrow
margin of reserves on which the domestic lead in
dustry has been operating since 1940. The 1937-39
average end-of-month reserves of refined lead stocks
at smelters and refiners was 121,000 tons, or about
three months’ supply as related to the 43,000-ton
average monthly shipments in the same years. In
the latter part of 1939 as the rate of consumption
surpassed the rate of production, the drain on the
reserve stocks began and by mid-1940, stocks were
down to one month’s supply.
Average month-end reserves at refineries have
increased slightly in the past two years and were
slightly in excess of one month’s supply on December
1, 1946, but still far below the prewar level. Govern
ment stocks which were accumulated for security
reasons have been steadily drawn down. In Decem
ber 1942, the Government reserve amounted to
248,000 tons of refined lead, whereas at the end of
last September the stockpile was down to 36,000
tons.
Throughout 1946, the deficiency of supply became
more and more serious. Government restrictions on
prices and the wartime prohibition against private
imports were important factors. Long drawn out
strikes at both mines and smelters further aggravated
the situation.

cents per pound, New York, and sub
sequent increases brought the price to 14 cents on
February 25, or 70 percent above the former ceiling.
Price advances have been initiated in foreign markets
(British and Mexican) and the domestic price has
risen to the equivalent of the foreign price after
allowing for transportation charges and duty of 1 ^
cents per pound. Domestic producers are apparently
committed to proceeding with some caution, at least
for a time, lest some of their customers be further
encouraged to turn permanently to lead substitutes
even though the lead shortage should be overcome.
It will be some time before any permanent effect on
production due to the higher prices can be ascertained.
Existing mines have been worked so intensively
throughout the war that a period of rehabilitation of
old workings and exploration and development of new
properties will have to precede expanded output.
Reference to the accompanying chart shows that
prior to the war the production of lead was closely
geared to its market price. Output expanded in
response to rising prices, and contracted when prices
fell. Moreover, domestic producers were able to
supply nearly all of the metal that industry required
and imports were nominal. With the beginning of
the war, the close relationship between price and
supply came to an end.

Lead as a Direct Government interest in lead and
Strategic other minerals was first manifested in
Material June 1939, when the Congress passed the
Strategic Materials Act appropriating
$100,000,000 to be used by the Procurement Division
of the Treasury Department to build stockpiles of
various materials, including lead. Before long, as the
need for lead expanded, it became apparent that the
designated sum was insufficient and that the agency
chosen to disburse it was not adapted to act with
Lead Prices, Production and Imports
Monthly Averages, 1937-1946

Lead Shipments and Stocks

THOUSANDS
OF TONS

Monthly Averages, 1939-1946
THOUSANDS
or TONS

Effect of Upon the removal of price ceilings on
Price
November 11, the market rose sharply.
Increases Quotations advanced from 8.25 to 10.50

CENTS PETR
POUND

THOUSANDS
OF TONS

1937-3? AVERAGE s t o c k s ..

\
\
\ STOCKS

V
SH1PMEN TS
\
\

Source: American Bureau o f Metal

Statistics.

Engineering and M in in g Journal; (P rices)
D epartm en t o f C om m erce. (Im ports)

M O N T H L Y BUSINESS REVTEW

appropriate speed. As a consequence, the Metals
Reserve Company, a subsidiary of the Reconstruction
Finance Corporation, was created in June 1940 to take
over the responsibility. The greatly increased scope
of the Metals Reserve Company activities is illustrated
by the fact that in contrast to the original 3100,000,000
to be spent over a period of two years for all critical
materials, Metals Reserve in its first two years made
foreign commitments of 3107,000,000 for lead alone.
On the domestic front the lead supply problem was
attacked in three ways: restrictions were imposed on
the uses of lead, various efforts were made to alleviate
the labor shortage in the industry, and price ceilings
were imposed. Lead was in greater demand not only
for its customary uses, but as a substitute for even
more critical materials and so was placed under
priority control in October 1941.

Labor
Shortage

In the face of increased demand, the lead
mines, along with other industries, were
confronted with a shortage of labor. The
reduction from 19,200 employees in the lead and zinc
mines in January 1942 to 14,900 in September 1946
was a major cause of the decline in production. While
the average hourly wage in lead and zinc mining was
76 cents in 1941 according to the Bureau of Labor
Statistics, jobs paying 20-45 percent more could
be found in nearby war industries. The need for
upward adjustments in wages was recognized as
early as 1942 but rates continued to lag. By January
1946, however, the average hourly wage was $1.09
and by September 1946, it had reached $1.23.
Availability of labor is especially important because
lead mining does not lend itself to mechanization,
particularly in the numerous smaller mines. Ore
deposits are often irregular making mechanical equip
ment impractical. Hard hand digging is character
istic of the work. The workers are exposed to
numerous hazards, and living conditions near many
mines are not attractive. So when war jobs beckoned
elsewhere, the remainder of the laboring force not in
the military draft responded in considerable numbers.
An effort was made to arrest this exodus by freezing
workers on the job in September 1942, and a month
later the gold mines were closed as a means of encour
aging the diversion of gold miners to nonferrous
mining. At the same time, the Government released
about 4,000 mine-experienced servicemen to work in
the nonferrous mines for six months. This measure
was repeated in July 1943. These men were allocated
to various essential nonferrous mining such as copper
and molybdenum, as well as lead and zinc. Through
such actions the 1941 level of employment in lead and
zinc mines was fairly well maintained until the end of
1943. Although zinc is frequently found in con
junction with lead, zinc was considered the more
critical of the two metals and, in the allocation of
labor, mines yielding a high proportion of zinc were

favored
over those yielding a high proportion of lead.

March 1, 1947

Prices and
Production
Quotas

In 1940 and early 1941, lead prices
were fluctuating but generally rising.
Pending a more permanent arrange
ment, lead producers informally agreed
in March 1941 to a Government request to adhere
to a price of 5.85 cents. This temporary commitment
lasted until January 1942 when there was a joint
announcement by OPA and OPM (predecessor of
WPB and CPA) of the Premium Price Plan to take
effect February 1, 1942, for 23^ years. Subsequent
extensions have made the plan continuously operative.
The purpose of the plan was to induce lead, zinc, and
copper mine operators to do all within their power to
increase production.
As it pertained to lead, this plan provided for a
ceiling price of 6.50 cents per pound for all lead mined
in amounts within tonnage quotas set individually
for each mine with regard to its 1941 production
record. Moreover, in order to increase output, espe
cially where high costs were hampering production,
all quantities in excess of this 1941-base quota, known
as the A-quota, were to be purchased by Metals
Reserve at the rate of 9.25 cents per pound. On the
theory that mines with high production were already
operating at an attractive profit, especially with the
higher price, and needed no additional stimulus,
quotas for the large mines were set at 100 percent of
1941 output and all production within that amount
would be sold at 6.50 cents per pound, the ceiling
price. At the other end of the quota scale were the
mines with low production or no production at all
which, along with new mines, were assigned zero
quotas. In those cases all production could be sold
for the premium price of 9.25 cents per pound to
Metals Reserve which would resell it to war industries
at 6.50 cents. This policy rested on the assumption
that low production was due to high operating costs
and only a premium price would induce such mine
operators to expand production. Many mines re
ceived quotas ranging somewhere between zero and
100 percent.
The labor shortage continued to be a stumbling
block and in an effort to enable mine operators to
pay more attractive wages and meet other increasing
costs, B-quotas were established, effective January 1,
1943, above the A-quotas. The new price schedule
was 6.50 cents per pound for tonnage under the
A-quota, 9.25 cents for tonnage under the B-quota
but over the A-quota, and 12 cents for all tonnage
over the B-quota. Whereas the A-quota system had
been established for the life of the plan, the B-quota
system could be changed or revoked at any time on
30 days’ notice which created some uncertainty in
the mining industry.
The trend of lead production since the inception of
the Premium Price Plan reveals a curious anomaly.
Figures for the years from February 1942 to the end
of 1946 show that a constantly increasing proportion
of the nation’ s lead mine output was being produced
over the A-quota and so was receiving a premium
price. Overceiling production was 16 percent of
total production in 1942, 33 percent in 1943, 50 per
cent in 1944, 62 percent in 1945, and 66 percent
(estimated) in 1946. On the other hand, total pro-

M O N T H L Y BUSINESS REVIEW

March 1, 1947

duction was consistently declining in these same years,
the figures being 496,000 tons in 1942, 444,000 tons
in 1943, 410,000 tons in 1944, and 391,000 tons in
1945. The year 1946 yielded only 333,000 tons.
Not only did the proportion of overceiling produc
tion rise, but actual overceiling tonnage output like
wise increased. The proportion of ceiling production
declined and the drop in actual tonnage of ceiling
production brought about the decline in total lead
output. An accompanying chart illustrates the
failure of the increased over-quota production to
effect a corresponding increase in total production.
During the all-out-for-war-production period mine
operators were forced to forego developmental work
that is normal for long range operations. Not many
new mines were located and very little new work was
laid out. Although the necessity of developmental
work in long range programs was recognized by the
quota committee, there was often disagreement as
to how much should be allowed for this purpose and
the extent to which exploratory work should be sacri
ficed to get maximum current output. A WPB release
of April 13, 1945, states: “ The present manpower
shortage makes it inadvisable to expend manpower
on new mining construction . . . including long-term
prospecting, exploration, and development.” Rulings
varied from time to time and consequently mine
operators were reluctant to invest in long range
development activities. Many of the older parts of
their properties have been worked for so long that
the ore now obtainable is of lower grade and lead is
therefore more costly to produce.
Quotas were constantly revised on the basis of such
considerations as changes in operating costs and
depletion of ore. From a sampling of reports on
quota revisions, it appears that there was a strong
tendency for quotas to be reduced which explains
the ever increasing amount of premium payments
that were made. If this had continued, eventually
the lead mines would have been completely subsidized
by the Government. In other words, the premium
payments originally designed to enable the high cost
producers to operate during the war emergency
became essential to more and more producers because
Domestic Lead Production, Ceiling and Over Ceiling
Monthly Averages, 1941-1946
THOUSANDS
OF TONS
...... ..

THOUSANDS
OF TONS

—

1
__________/ Ti

ITAL PRODUC TION

3& S

to rn
1941

£ 3 3
1942

*18 4* ESTIMATED.

BZ 2

Source:
Bureau o f Mines.

HU M
1946

1947

they were all veering in the direction of becoming
marginal producers.

Fluctuations
of Imports

Much of the world’s lead is produced
outside of the United States and the
Metals Reserve Company counted
heavily on imports to supplement the domestic supply
when it took over the complete function of lead im
portation and its subsequent allotment to industry.
Countries which had previously shipped lead to
Europe found that the war had closed off that market
and they began shipping lead to the United States.
Contracts which were entered into with foreign
countries often included arrangements to buy all
exportable surplus. Precise details of these foreign
contracts have not been generally revealed, but it is
understood that Metals Reserve absorbed the import
duty and stimulated foreign production destined for
the United States as much as possible, in some cases
making payments in advance of delivery in order to
help finance production.
Regardless of the price at which lead was imported,
Metals Reserve resold it to industry at the ceiling
price. While it might appear that the buying of
lead both at home and abroad at overceiling prices
and reselling it at the lower ceiling price was costly,
it was felt that the system was in fact an economy
inasmuch as the Government itself, being a huge
purchaser of lead products for military and security
purposes, stood to gain in the last analysis by fore
stalling inflationary prices. But in any case, the
tremendous urgency of the need for lead was con
sidered as justifying the expense.
The early success of the import program in meeting
that need was notable. Before 1941 foreign imports
were very small and were a negligible part of the lead
annually used in the United States, but in 1941 the
tonnage imported approached the total of the ton
nage domestically mined, and equalled it in 1942
when both imports and domestic mine output made
available to industry the largest quantity of lead
reported at any time from 1936 to date.
A reconstruction of what happened since the end
of 1942 shows the whole program going into reverse.
By 1943 military requirements appeared sure of ful
filment, speculations about postwar reconversion
problems were beginning to be voiced and the Govern
ment began to concern itself with oversupply. There
was fear that if stockpiles were not tapered off, the
dumping of a large surplus at the end of the war
would depress the lead market and cause unemploy
ment in the industry. On the basis of the prewar
record of lead production and consumption this
attitude seemed justifiable, especially with respect to
imports since the United States had always been
self-sufficient as to lead.
It is not clear whether lower imports in 1943 were
due to revisions in international allocation agree
ments, particularly between the United States and
Great Britain, whether they were the result of efforts
to drive sharper bargains since the war need was
growing less vital, or whether they were due simply

M O N T H L Y BUSINESS R E V IE W

to a decision to reduce purchases for fear of over
supply. In any event, imports decreased in 1943.
Combined imports of pig lead from Canada and
Australia shrank from 234,000 tons in 1942 to 38,000
tons in 1943, due primarily to the termination of Metals
Reserve contracts with those countries and this drop
was reflected in the decrease in total imports of
169.000 tons. Annual imports were kept at around
325.000 tons throughout 1943, 1944, and 1945, but
the total for 1946 was only 160,000 tons on the basis
of preliminary reports.

World
Shortage

In seeking reasons for the decline in 1946
of Government-purchased imports up to
the date of decontrol, a consideration of
the world lead situation is necessary. Information
on prices and supplies in the world market are in
complete and unofficial, but there seems to be no
doubt of a world shortage. Just before the end of
price control in this country, estimates by representa
tives of the lead industry placed the world price at
approximately 8.50 cents per pound delivered in
Europe, which is equivalent to 10.20 cents at New
York, as compared to the last ceiling price of 8.25
cents at New York. Statements by lead representa
tives that Metals Reserve bought foreign lead at 7.75
cents, New York, in the second quarter of 1946, or
midway between the domestic ceiling and world price,
suggest that the Government may have been reluctant
to lose money on the import program since it was no
longer buying for its own use as it did during the war.
The lead mining industry as a whole found objections
in the policy of buying foreign lead at overceiling
prices while a part of domestic production was forced
to accept the ceiling price for its output. On the other
hand, industries wanting to buy lead for use in manu
facturing sought a free hand to make foreign purchases
directly and independently in order to augment the
short supply from domestic mines. Restrictions
against lead imports were lifted November 18, 1946.
It may be significant that following the price rise
during the lapse of price control in June and July of
1946, total imports as well as domestic ore receipts
by U. S. smelters took a sudden upward spurt as
Lead Production and Imports
Monthly, 1946
THOUSANDS
OF TONS
I40|----120

THOUSANDS
o r TONS

March 1, 1947

may be seen on the chart. Although it is too early to
observe the full impact of higher prices on domestic ore
production and on imports since decontrol, a tendency,
towards improved lead supply from both sources
may be discerned from preliminary reports. Since
private industry may now compete freely for a
greater share of the lead offered in foreign markets,
imports will undoubtedly increase in 1947.

Dependence
on Foreign
Metal

The probabilities are that the United
States will depend on foreign lead to a
considerably greater extent in the
future than in the previous peacetime
era. Government geological surveys of the mineral
reserves in the nation made in 1944 indicate that the
known lead supply is sufficient for only twelve years.
Although the proof of this estimate admittedly rests
with the future, the brevity of the period is cause for
concern. Increasing efforts are being directed toward
improving technological practices and eliminating
waste.
More attention is also being focused on salvaging
secondary or scrap metal. Accurate figures for the
quantity of secondary lead produced from scrap are
impossible to compile and published estimates vary
as to the actual quantity. Most authorities agree,
however, that the total recovery from scrap has
generally ranged above 50 percent of domestic mine
production. The primary source of the scrap is untraceable for scrap is derived from all lead regardless
of origin, whether imported or domestically mined.
While some of this scrap actually has never been
fabricated but is cast off in the refining or manufactur
ing process, a very considerable quantity of the metal
that is used in manufactured articles reverts to the
smelters as scrap and is used over again. This is
especially true of the lead that goes into storage
batteries of which a high percentage comes back
rather quickly as scrap to be remelted. Lead in cables
also can be recovered but more time passes before this
return takes place. On the other hand, lead that is
used in the manufacture of paints, chemicals, and
leaded fuels is permanently expended.

100

« LEAD CONTCMT.

Source:
American Metal Market.

Over a period of time the supply of secondary lead
is contingent upon the supply of primary lead from
mines and, with due consideration having been given
to this factor, there has been no general dissatisfaction
with the scrap lead supply. Nevertheless, higher
prices increase the incentive to salvage used lead and
first reports of activity in the scrap market since
decontrol appear to confirm this fact.

March 1. 1947

M O N T H L Y BUSINESS REV IEW

INDUSTRIAL SUMMARY
Iron and The nation’ s steel industry is turning out
Steel
the largest tonnage of steel ingots in peace
time history. January production of ingots
and steel for castings totaled 7.2 million net tons as
compared to 3.9 million net tons in the same month in
1946 when the steel strike began. January operations
were at the rate of 93.3 percent of estimated capacity.
According to Steel, District mills are operating at a
high level. In the third week of February, rates were
100 in Pittsburgh, 92 in Cleveland, 87.5 in Wheeling,
96 in Cincinnati, and 89 in Youngstown. Early
February operations were hampered by the shortage
of natural gas in some areas.
Despite current high production, metalworking in
dustries continue to exert strong pressure on steel
mills for delivery. Demand for flat-rolled steel, pipe
and wire is far in excess of output. While additional
sheet and strip rolling mill capacity is expected to
come into operation within the next few months, no
particular relief in the tight supply situation in those
items is likely until late in the year.
The industry has agreed to furnish railroad freight
car builders with about two million tons of steel
products during the next 12 months with shipments
to begin in April at a monthly rate of 165,000 tons.
Approximate monthly tonnages are classified as
plates, 63,000; shapes, 37,000; bars, 24,000; sheets,
22,000; axles, 12,500; pipe, 3,600; and billets, 2,700.
About 102,000 tons of this total will be used to con
struct new cars at the rate of 7,000 monthly and the
balance is necessary for repairs and maintenance.
The mills have also voluntarily agreed to furnish
305,000 tons of steel in the second quarter of the year
to manufacturers of critically needed housing materials.
This is about 10,000 tons more than were allocated for
the first quarter under the priority program.

With steel mill production at record levels, con
sumption of raw materials has been proportionately
large. Pig iron supplies remain extremely tight despite
continuation of the premium price plan whereby
certain high cost furnaces receive 38 to $12 a ton
above the market price. Producers of cast iron soil
pipe, housing items, and railroad brakeshoes receive
preferential treatment in the distribution of pig iron.
Such allocation threatens to reduce the quantities
of metal needed to maintain present production rates
of trucks, automobiles and other consumer durable
goods.
The supply of steelmaking and foundry grades of
scrap has shown no improvement. Spirited bidding
for scrap at some points forced up the general market
level another $2.50 a ton in early February. The
Pittsburgh price for heavy melting grades is now
$35.00 a ton representing a rise of 75 percent since
mid-November. Short supply of scrap at principal
consuming points also has forced mills to'purchase at
remote points and to absorb heavy freight and hand
lingforcharges.
Digitized
FRASER

Coal

Production of bituminous coal in the United
States during January amounted to 60.8
million tons or 4.5 percent greater than the cor
responding month last year. On a daily average basis,
the increase was about eight percent. This enormous
rate of production was achieved despite serious nation
wide car shortages which forced some mines to sus
pend operations altogether for several days at a time,
and reduced the rates of production at other mines.
Uninterrupted mining at this rate for the balance
of the year would yield approximately 720 million
tons of coal. The highest rate of consumption during
the war was close to 620 million tons so it appears that
coal is being produced at a rate of 100 million tons
annually above the nation’ s peak consumption. The
latest estimate of 1947 domestic demand for coal is
525 million tons. To this figure should be added about
30 million tons, or two and a half million tons a
month, for export. It is therefore apparent that the
mines could produce 165 million tons in excess of pre
sent demand. These facts would indicate a future soft
ening of prices and a return to a 35 hour week from the
present 42 hour schedule. A prolonged labor dispute,
however, could drastically alter these prospects.
January production of bituminous coal in the Fourth
Federal Reserve District totaled 22.5 million tons.
This is the greatest amount ever produced in January
in the District and exceeded the same month last year
by eleven percent. Recent cold weather stimulated
the domestic demand for coal. Railroads, utilities,
and industrial users are building up stocks in anticipa
tion of labor trouble at the mines. Many of the docks
in the Great Lakes have very low inventories o f special
sizes of coal and should be heavy buyers in the spring.
The severe cold spell in the early part of February
demonstrated that the substitution of natural gas for
solid fuels has proceeded too rapidly in many parts of
the District. In the Cleveland area alone, about 800
industrial gas users were deprived of nearly all service
for eight days when gas was diverted to domestic
customers. Some 10,000 workers were laid off for this
period. Moreover, it does not appear that the gas
situation can be materially improved during the next
twelve months due to the shortage of necessary steel
pipe for additional lines.
Preliminary figures released by the Bureau of Mines
indicate total coke production of 53.6 million net tons
for 1946, a decrease of 14 percent from the 1945 total.
Merchant plants averaged slightly more than a million
tons a month or about 83 percent of capacity. Furnace
plants averaged 3.4 million tons a month or 71 percent
of capacity. The operation of the latter type, which
is closely associated with the iron and steel industry,
ranged from 36 percent of capacity in February to 89
percent in October. Blast furnaces consumed 77
percent of total coke production and iron foundries
used about five percent.
The reduction in coking operations caused a sub
stantial decline in derived coal chemicals such as
ammonium sulphate, ammonia liquor, benzol, toluol,
crude coal tar, and creosote oil.

M O N T H L Y BUSINESS R EV IEW

Rubber Production of passenger car casings for all
of 1946 totaled 66.3 million units according
to The Rubber Manufacturers Association, an increase
of 135 percent above the previous year. Shipments
were only slightly less than production. Factory in
ventories at the end of December were less than two
million units or about ten days’ supply at the current
rate of shipment. Of total shipments during the year,
82 percent was for the domestic replacement market,
17 percent to new car manufacturers, and one percent
for export.
Truck and bus casing manufacture amounted to
15.7 million units for the year, or about 570,000 less
than in 1945. About 68 percent of shipments was for
the replacement market, 27 percent for new trucks,
and five percent for export.
The Reconstruction Finance Corporation suddenly
increased its selling price in January for natural rubber
to 25^4 cents a pound, up 3% cents from its long
established price of 22% cents. The R.F.C. is follow
ing a first-in first-out inventory policy and is now
selling a 150,000 ton lot of rubber acquired at 23^
cents last summer. Subsequent purchases were made
at the old Far Eastern price of 2034 cents, or lower.
The price to prevail after this tonnage is sold has not
been announced. The Government price for synthetic
rubber is pegged at 18% cents and it is believed that
this yields a margin of at least two cents a pound now
that expensive grain-alcohol is no longer used to manu
facture GR-S.
Rubber Order R -l, which controls specifications for
rubber products and end-uses of this material, expires
on March 31. Likewise, Government purchase of
natural rubber terminates on the same date. Because
of the imminence of these events the rubber industry is
becoming increasingly concerned over the absence of
an official policy regarding the future long range pro
gram for the synthetic rubber industry in relation to
the use of natural rubber.

Textiles District manufacturers indicate that most
and
categories of woolen fabrics are in ample
Clothing supply and that a definite slackening of

Sellers of machine tools find ample evidence of sales
resistance for new standard tools as buyers search
through Government stock piles for bargains. Reduced
sales of new machine tools has caused several leading
manufacturers to effect downward adjustments in
their labor forces. The Clayton Formula, under which
surplus tools were priced according to the age of the
machine, has been largely abandoned. It has been
replaced with a fixed price system which, in some
cases, has reduced the selling price to only 18 percent
of original acquisition cost for machines in good con
dition. The spread between new machine prices and
surplus machines has therefore become substantial.
War Assets Administration estimates that its current
inventory of surplus machine tools is worth one
billion dollars, original cost, and anticipates that an
equal amount of machine tools and production equip
ment remains to be declared surplus. During 1946,
$456 million (original cost) of surplus tools were sold
at approximately a 55 percent discount to yield $204
million. A little more than 40 percent of sales were
made through approved dealers. According to
W. A. A., fixed prices have increased sales 300-500
percent since November 1, 1946.
As a further means of stimulating sales, a new device
has been adopted whereby approved dealers who
purchase tools for resale are given a
^ percent dis
count on the fixed price. Prior to this arrangement,
dealers did not buy on their own account but received
a 123^ percent commission on all sales made. Priority
buyers are also entitled to this additional discount.

123

Analysis of Commercial and Industrial Loans
('Continued from page 4)
On an industry by industry basis, the highest pro
portion of unsecured loans was accounted for by the
manufacturing and mining industries, with 72 percent.
About 57 percent of the loans to wholesalers were
unsecured, whereas the retail trade and public utility
proportions approximated 44 percent.
Percent of Unsecured Loans by Industry
of Borrower and Size of Bank

demand for low-end woolens has taken
place. Worsteds and other hard finished goods, how
ever, continue in good demand.

Machine
Tools

Unfilled orders for new machine tools
declined nine percent during 1946 and
monthly shipments dropped proportion
ately. Preliminary figures indicate that the trend
has
continued into this year.

Banks with Deposits of
Under
$10 to
$2 to
$10
$2
$100
Million
Million
Million

All
Banks

Over
$100
Million

All Industries

60 %

69%

39%

34%

48%

Mfg. & Mining
Wholesale
Public Utility
Retail
All Other

72%
57
45
44
50

81%
60
47
57
58

38%
54
28
36
39

29%
37
36
37
33

37%
97
24
48
59

Industry

Manufacturers of men’ s work clothes report a steady
flow of orders and no noticeable lessening of demand.
Denims and other cotton fabrics are still scarce.
Producers of men’ s suits are experiencing a heavy
demand for their product and a continued short
supply of worsted fabrics whose prices were recently
increased. Production is still being allocated to retail
customers and retail stocks of men’s suits continue at
abnormally low levels.

March 1, 1947

Other Loan
Provisions

Other loan provisions, such as method
of repayment and interest charges,
will be discussed in a subsequent issue

of this Review.

NEW MEMBER BANK
The Dollar Savings Bank Company, Niles, Ohio.

M O N T H L Y BUSINESS REV IEW

March 1, 1947

Indexes of Department Store Sales andStocks
D a ily A vera ge fo r 1935-1939 «■ 100
A d ju sted for Seasonal V a riation W ith o u t Seasonal A d ju stm en t
Jan.
D ec.
Jan.
Jan.
D e c.
Jan.
1947
1946
1946
1947
1946
1946
SALES:
A k ron ( 6 ) ............
Canton ( 5 ) ..........
C incinnati ( 9 ) . .
C leveland ( 1 0 ) .
C olum bus ( 5 ) . .
Erie ( 3 ) ................
Pittsburgh ( 8 ) . .
Springfield ( 3 ) . .
T o le d o ( 6 ) ...........
W heeling ( 6 ) . . .
Y ou n gstow n (3)
D istrict ( 9 6 ) . . .
STO CK S-

275
310
260
224
277
253
247
265
236
214
279
256

290
310
268
255
303
273
247
257
255
219
284
277

258
243
218
195
247
235
207
247
205
202
235
220

209
238
213
186
225
197
186
193
175
150
215
194

458
539
453
403
533
480
395
457
434
414
460
430

196
187
178
162
200
183
156
180
152
141
181
167

D istrict.................

257

258

157

225

214

138

Fourth District Business Statistics
(0 0 0 om itted )
%
F ourth D istrict Unless
Otherw ise Specified
Retail Sales:
D epartm en t Stores— 96 firm s.................
W earing A pparel— 14 firm s.....................
F urniture— 57 firm s....................................
Building C on tracts— T o t a l...........................
— R esid en tia l...............
C om m ercia l Failures— L iabilities..............
— A ctu a l N u m b e r .
P rodu ction :
Pig Iron — U. S.............................N et tons
Steel In got— TT. S....................... N et tons
B itum inous C oal—
O ., W .P a ., E. K y . . ...............N e t t o n s
C em en t— O., W . Pa., W . V a ____Bbls.
a— D ecem ber,
b— N o v e m b e r.

Jan uary
1947

3
3
3
3
3

47,622
1,692
2,286
150
9

change
from
1946
+16
+ 2
+14
-i—
~i—
+200
+350

D ecem b er
1946
101,240
3,311
3,424
38,070
12,878
673
8

5,071
7,234

+88
+87

3,992
5,760

22,482
1,217a

+11
+61

16,108
1,483b

Time Deposits*—12 Fourth District Cities
Bank Debits— January, 1947
(29 Fourth District Cities)
T h e Jan uary figure for bank debits in 29 F ou rth D istrict cities represents
the third largest m onthly tota l on record . I t has been exceeded o n ly b y th e
all-tim e high o f last D ecem b er and b y the figure for Jun e 1945 w hich was a
w ar loan m onth.
T h e January total was 18.5 p ercent a b o v e the figure fo r J an u ary a y ear a g o.
In recen t m onths the_ margin o v e r a year ago totals has been declining fr o m
the high percentage increase figure o f 26 percent recorded last S ep tem b er.
T h e figures fo r O ctob er, N ov em b er and D ecem b er were 25, 23, and 14 p ercen t
resp ectively. T h e sm all D ecem b er increase o v e r the y ear ago figure m ay be
attribu ted to the w ar loan d rive in D ecem b er 1945.

TEN LARGEST CITIES

O ther cities w hich exceeded the average gain at the ten large centers were
Youngstown, Canton, Akron, and Erie.|

NINETEEN SMALLER CITIES
Bank debits w e re 'a t an~all-tim e .m o n th ly high in L e x ln g to n T a n d L i m a .
T h e c ity o f B u t l e r led in percen tage gains o v e r year ago figures w ith a
mark o f 44 percent. W a r r e n ranked secon d w ith 40 p ercen t and M a n s fie ld
was third w ith 35 p ercent. M ansfield debits exceeded 310 0 m illion for the
first tim e in an y three m onth p eriod . O th er cities which exceed ed the o v e r
all average gain at the sm aller centers w ere Z a n e s v ille , L o r a i n , P o r t s m o u t h ,
L i m a , G r e e n s b u r g and S h a r o n .
(In thousands o f dollars)
% C h ange 3 m onths
% C h an ge
Jan uary
from
ended
from
1947
year ago Jan. 1947
year ago
A L L 29 C E N T E R S ............... 35,949,258
+ 1 8 .5 %
3 1 8 ,3 7 4 ,8 6 8 . + 1 8 . 2 %
10 L A R G E S T C E N T E R S :
228,164
+ 2 1 .3
711,582
+ 2 7 .1
A k r o n ...........................O hio
C a n to n ........................ O hio
94,883
+ 2 2 .2
289.882H
+ 2 1 .7
C in c in n a ti.................. O hio
815,541
+ 1 4 .1
2,423,124H + 1 3 . 4
C le v e la n d ................... O hio
1,539,171
+ 1 0 .9
4,740,665
+ 1 1 .2
C o lu m b u s ................... O hio
403 ,420
+ 1 1 .9
1,286,539 + 1 1 . 0
D a y t o n ........................ O hio
205,953
+ 2 9 .5
607 .649 H + 2 6 . 9
T o le d o ..........................O hio
344,995
+ 4 0 .6
1,097,957
+ 4 1 .3
Y o u n g s to w n .............. O hio
113,773
+ 2 2 .7
345,823
+ 1 9 .9
E r ie ............................... Penna.
74,947
+ 1 9 .3
230,704H
+ 1 6 .5
P itts b u r g h ..................Penna. 1,551,888
+ 2 3 .0
4,952,723H + 2 2 . 4

T o t a l ...................................... 3

576,523

+ 1 8 .1 %
+ 1 6 .0 %
+ 1 7 .9
+ 3 2 .8
+ 3 4 .6
+ 1 6 .9
+ 3 1 .8
+ 2 0 .2
+ 1 7 .0
+ 3 9 .7
+ 3 3 .0
+ 4 3 .7
— 7 .3
+ 2 9 .2
+ 1 7 .1
+ 2 0 .9
+ 2 8 .3
+ 7 .7
+ 2 2 .5 %

316,686,648H
3

+ 1 7 .9 %

107,786
268.097H
86,637
115,455H
45,842
100.730H
88,486
55,548
123.106H
6 0 ,020
99,251
65,276H
81,219
19,202
53,474
21,417
59,456
65,418
171,800

+ 1 5 .7 %
+ 1 6 .7
+ 2 1 .0
+ 2 8 .2
+ 3 1 .3
+ 3 3 .6
+ 3 0 .4
+ 2 3 .6
+ 1 7 .9
+ 1 4 .6
+ 3 2 .2
+ 2 6 .5
+ 3 2 .9
— 3 .3
+ 2 2 .1
+ 3 0 .2
+ 2 8 .2
+ 2 0 .4
+ 6 .5

3 1,688,220H

+ 2 1 .1 %

H denotes new all-tim e high for on e m onth or qu a rter-year.
* D ebits to all deposit accou n ts except interbank balances.

+
+
+
+
+
+

T o ta l— 12 C ities 31,838,288,000 + 3 1 ,8 4 8 ,0 0 0 + 3 2 ,1 6 3 ,0 0 0
* o f Individuals, Partnerships, and C orp oration s.

F or the sixth successive m on th , Toledo record ed the highest percen tage
increase o v e r year ago figures with a gain o f 41 percent. Dayton was s econ d
w ith an increase o f 30 percent. Pittsburgh ranked third a m on g the ten
largest cities w ith an a d va n ce o f 23 percent.

T o t a l ...................................... 35,372,735
19 O T H E R C E N T E R S :
C o v in g to n -N e w p o rt.K y .
3
36,220
L e x in g to n ................... K y. 108,747H + 1 8 . 5
H a m ilto n .................... O hio
28,375
L im a ............................. O hio 39,818H + 3 0 . 2
L o r a in .......................... O hio
14,772
M a n sfield ....................O hio
33,703
M id d le to w n ............... O hio
28,356
P o r ts m o u th ................O hio
18,057
S p rin gfield ..................O hio
40,971
Steu b en v ille...............O hio
19,915
W a rre n ........................ O hio
33,430
Z a n esv ille ................... O hio
22,346
B u tler.......................... Penna.
28,057
F ran k lin ......................Penna.
5,988
G reen sb u rg................ Penna.
17,544
H om estea d .................Penna.
6,378
Oil C i t y .......................Penna.
19,001
S h a ron ......................... Penna.
21,203
W h e e lin g .....................W . V a.
53,642

(59 Banks)
A v erage W eek ly Ch ange D u rin g:
4 W eeks
5 W eeks
Second
E n ded
Ended
H a lf
D ec.24,1946 Jan. 29, 1947
1946
+3 927.000 + 3 1,630,000 + 3 2 ,2 7 4 ,0 0 0
655.000
204.000
429 .000
313.000
229.000
163.000
168.000
201.000
96.000
152.000
281,000
92.000
107.000
116.000
101.000
29.000
54.000
14.000
6,000
54.000
31.000
41.000
8,000
16.000
28,000
246.000
98.000
1,000
105.000
56.000
12.000
50.000
15,000

T im e
C ity and
D eposits
N um ber
Jan. 29, 1947
o f Banks
C leveland (4) . . . . 3 853,185,000
328.877.000
Pittsburgh (13) . .
180.120.000
C incinnati (8)
99.005.000
A k ron ( 3 ) ...............
89.651.000
T o le d o ( 3 ) ............
70.436.000
C olum bus (3) . . . .
52.988.000
Y ou n gstow n ( 3 ). .
49.343.000
D a yto n ( 3 ) ............
39.476.000
C anton ( 4 ) . . . . . .
36.453.000
Erie ( 4 ) ...................
28.383.000
W heeling (6)
10.371.000
Lexington ( 5 ) . . . .

+ 3 3 ,8 0 8 ,0 0 0

Wholesale and Retail Trade
P ercentage C h anges
from Preceding Y ear
SA LE S S T O C K S
Jan.
Jan.
1947
1947
D E P A R T M E N T S T O R E S (96)
+67
+ 8
A k r o n ...................................................................................................
+28
a
C a n t o n ................................................................................................
+ 19
+68
C in cin n a ti..........................................................................................
+ 15
+56
C le v e la n d ...........................................................................................
C o lu m b u s .............................................................. ...........................
+59
+ ll
+37
+ 8
E r ie .......................................................................................................
+64
P ittsb u rg h ..........................................................................................
+1l
a
S pringfield .........................................................................................
+ 7
+47
+15
T o le d o ................................................................................................
+52
W h e e lin g............................................................................................
+ 6
+19
a
Y o u n g s to w n ......................................................................................
+25
Other C itie s ......................................................................................
+52
+16
+60
D istrict...............................................................................................
W E A R I N G A P P A R E L (14)
+57
C in cin n a ti.................................................. ......................................
+ 11
- 4
+67
C le v e la n d ...........................................................................................
+39
+ 2
P ittsb u rgh ..........................................................................................
+28
O ther C itie s ......................................................................................
+ 3
D is trict................................................................................................
+ 2
+48
F U R N I T U R E (57)
+27
+77
C a n to n ................................................................................................
+70
+ 5
C in cin n a ti..........................................................................................
+58
C le v e la n d ...........................................................................................
+ 9
+37
C o lu m b u s ........................................................................ ..................
+11
+20
a'
D a y t o n ................................................................................................
a
a
P ittsb u rg h ..........................................................................................
+
3
4
a
A llegheny C o u n t y .........................................................................
+25
a
T o le d o .................................................................................................
- 1
+66
Other C itie * .......................................................................................
+14
+35
D is tr ic t ................................................................................................
W H OLESALE T R A D E **
+26
+15
A u tom otiv e Supplies ( 5 ) ..............................................................
-1 2
+25
Beer ( 6 ) ...............................................................................................
-1 4
a
C loth in g and Furnishing* ( 3 ) ....................................................
+
2
0
a
C on fection ery ( 4 ) ............................................................................
a
D rugs and Drug Sundries ( 4 ) ....................................................
+ 6
+12
Fresh Fruits and V egetable* ( 1 1 ) . ..........................................
+ 9
+55
+ 8
G rocery G rou p ( 3 5 ) .......................................................................
+53
T o ta l H ardware G rou p ( 1 9 ) .......................................................
a
+60
+59
General H ardware ( 8 ) ..............................................................
+29
a
Industrial Supplies ( 5 ) .............................................................
+56
Plum bing and H eating Supplie* ( 6 ) ...................................
a
-3 7
a
Jew elry (7)
+48
+123
Lu m ber and Building M aterial* ( 5 ) ...............
+55
M a ch in ery , Equip. It Sup. (exc. E lect.) (3 ).
a
+37
M eats and M e a t P ro d u cts (3) .
+48
+32
a
Paint* and Varniihe* ( 4 ) ........................
+46
a
Paper and It* Produ ct* ( 4 ) ...................
+21
+32
T o b a c c o and it* Produ ct* ( 1 5 ) ............
+40
+26
M iscellaneous ( 1 4 ) ....................................
+20
+47
D istrict— All W holesale T ra d e (1 4 9 ).
* * W holesale d ata com p iled b y U. S. D ep artm en t o f C om m erce, Bureau o f
the Census,
a N o t available.
Figures in parentheses in dica te num ber o f firm* reporting sales.

M O N T H L Y BUSINESS REV IEW

March 1, 1947

SUMMARY OF NATIONAL BUSINESS CONDITIONS
B y the Board of Governors of the Federal Reserve System

Industrial output reached a new record peacetime
level in January—one-sixth higher than at the
beginning of last year. Dollar volume of retail sales
during January and the early part of February was
substantially larger than in the same period last year,
reflecting mainly increased prices. Prices of agri
cultural commodities have risen in recent weeks,
following earlier declines, and prices of building
materials have shown further increases.

Industrial Production
Total output at factories and mines in January was
at a rate of 188 percent of the 1935-39 average,
according to the Board’s seasonally adjusted index,
as compared with 181 in December and with the
previous peacetime peak of 183 in November. The
large rise in January reflected chiefly sharp gains in
output of coal, iron, and steel. Production of these
materials had been curtailed in November and De
cember owing to the bituminous coal work stoppage.
Production of iron and steel in January was in the
largest volume since May 1945. Steel mill operations
averaged 93 percent of capacity and were at a slightly
higher scheduled rate during the first three weeks of
February. Output of building materials was main
tained at an unusually high level for this season, and
activity in the nonferrous metals, machinery, and
transportation equipment industries was maintained
close to the December rate.
Production of nondurable goods was at a rate of
177 percent of the 1935-39 average in January as
compared with 173 in November and December.
Activity in the chemicals, foods, and paper and print
ing industries reached new postwar peak rates in
January, while output of most textile and leather
products was below earlier peak rates.
Output of bituminous coal, after being curtailed in
November and December, increased in January to
the highest level in twenty years and was nine percent
above a year ago. Production of metals advanced
somewhat, while output of anthracite and crude
petroleum declined slightly.

Employment
Employment in manufacturing and most other
nonagricultural industries continued to show little
change in January, after allowing for the usual
seasonal variation. The number of persons unem
ployed increased further to a level of 2,400,000.

Construction
Value of construction contracts awarded, as reported
by the F. W. Dodge Corporation, increased by onefourth in January following a marked decline during
the preceding seven months. About one-half of the

increase was accounted for by public nonresidential
construction, reflecting chiefly large awards for
Veterans’ hospitals. Residential contracts expanded
by one-third due principally to awards for several
large apartment projects.

Distribution
Value of department store sales in January and the
early part of February was maintained close to the
level prevailing since last June, after allowance is
made for the usual seasonal changes. Sales during
the first seven weeks o f this year were 17 percent
larger than the same period last year. Sales at other
retail stores were at a relatively higher level compared
with last year, reflecting mainly advanced prices for
foods and increased supplies of such durable goods as
automobiles and hardware. Unit sales of numerous
nondurable goods apparently have declined some
what from earlier advanced levels.
Freight carloadings increased somewhat further in
January, reflecting chiefly increased shipments of coal,
iron, steel, and lumber. Shipments of most manufac
tured products and agricultural commodities showed
little change. Shortages of cars continued to limit
the movement of some classes of freight.

Commodity Prices
Prices of farm products and foods, which declined
from the middle of December to the latter part of
January, have risen since that time, reflecting partly
severe weather conditions and increased Federal export
allocations for grains. Wholesale prices of most in
dustrial products have shown little change but build
ing material prices have increased further.

Bank Credit
Income tax collections greatly increased Treasury
deposits at the Reserve Banks in January and the
first half of February and placed member banks under
moderate reserve pressure. A post-holiday return
flow of currency of about 900 million dollars and an
increase in monetary gold stock supplied some reserve
funds to member banks and there was a decline in
required reserves. To maintain their reserve positions,
however, banks sold short-term Government Securities
to the Reserve Banks.
Bank deposits were also reduced by tax collections,
notwithstanding the return flow of currency. At
member banks in leading cities demand deposits
adjusted declined by 1.3 billion dollars in the four
weeks ending February 19. Commercial and indus
trial loans continued to expand during January and
early February; the rate of increase was more moder
ate than during last summer and fall. Government
security holdings declined further, reflecting Treasury
debt retirement and bank sales of bills and certificates.