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M
Busin
Covering financial, industrial
and a g ric u ltu ra l co n d itio n s
V o l. 26
Fourth Federal Reserve District
Federal Reserve Bank of Cleveland
Cleveland, O h io , M ay 31, 1944
FIFT H WAR LOAN DRIVE
Within a few days the nation will embark on its fifth
campaign to raise funds necessary for the successful prose
cution of the war. Although the over-all objective of
$16,000,000,000 is slightly short of the total amounts ob
tained in several preceding drives, the sum to be secured
through individual (as against corporate) subscriptions
has been set at the unprecedented total of $6,000,000,000.
The extent to which the new goal for personal subscrip
tions exceeds previous achievements is shown in the ac
companying table:
Sales to
Individuals,
National Income
Total Sales
Partnerships
Payments
to all
& Personal
(Current
War Loans
Investors
Trust Accounts
Annual Rate)
------------------ (In billions of dollars)------------------1st— Dec. 1 9 4 2 ................. $13
$1.6
$130
18.5
3.3
140
2nd— Apr.-May 1 9 4 3 ___
3rd— Sept.-Oct. 1943 . . . .
19
5.4
146
4th— Jan.-Feb. 1944 . . .
17
5.3
153
5th— June-July 1 9 4 4 . . . .
16 (goal)
6.0 (goal)
156-8 (est.)
It is estimated that, during June and July, income pay
ments to individuals will be running approximately $10,-
000,000,000 per year higher than during the Third War
Loan when subscriptions by individuals amounted to $5,400,000,000, or ten percent less than the amount being
sought from the same sources in the coming Drive. Some
allowance must be made for the tax increases, including
new excises, which were enacted by the Revenue Act of
February 25, 1944, but those new and added taxes fall
far short of absorbing the continuing gain in salaries,
wages, and other forms of personal incomes in the ag
gregate. By virtue of this net gain in national income
payments, funds currently available for investment by
individuals should compare favorably with the amount
in existence last autumn.
The problem of reducing the potentialities of wartime
and post-war credit inflation depends in large measure
upon the extent to which excessive purchasing power
is diverted from civilian markets for goods and services
and held in the form of war bonds at least for the dura
tion. It is true that, when individuals refrain from spend
ing and accumulate funds in the form of inactive demand
deposits or idle currency holdings, the upward pressure
on prices is relieved accordingly at the time. Keeping
eview
N o. 5
current prices under reasonably satisfactory control, how
ever, represents only the shorter-term aspects of the gen
eral problem of curbing inflationary tendencies, and meas
ures designed solely for this purpose may be futile un
less deposit and currency expansion is likewise kept with
in bounds.
The fact remains that, in addition to taxes and money
raised in other ways, $16,000,000,000 is needed to finance
the war for another few months. Unless at least $6,000,000,000 of that goal is obtained from individuals, the
banking system may have to extend credit to make up
the deficiency. To the extent that more bank credit
is created, more deposits will also come into existence.
While that would answer the Treasury’s urgent need for
funds, it also would tend to dilute the purchasing power
of all dollars now in existence— in hand or due from
banks. Such adverse consequences would bear special
significance to all who are planning postwar expenditures.
The more deposits that are created during the war, the
less purchasing power total funds existing when peace
arrives may command, dollar by dollar, as restrictions on
demand for civilian goods and services are removed and
any general effort is made to spend such funds.
As shown by Chart I, deposit expansion has slowed down
somewhat during recent months, but the outflow of cur
rency continues unabated. Currency holdings of indi
viduals are estimated to be nearly $3,000,000,000 larger
today than at the beginning of the Third Drive. A 17
percent increase in hand-to-hand money seems rather ex
cessive, when such uses for currency as payrolls and re
tail sales show much smaller gains for the same nine
months and prices have changed only slightly.
This growing reservoir of superfluous cash is one of
the logical targets within the range of the Fifth Drive.
Its reduction to more reasonable dimensions, not attained
in previous campaigns, would serve a dual purpose. The
need for commercial bank credit expansion as a po
tential source of funds would be minimized, and legal re
serves of member banks would be replenished without
recourse to reserve bank credit. The success of the Fifth
War Loan will depend in part upon the volume of idle
currency that will be dislodged and brought back into
the banking system.
2
Effect on Fourth
District Banks
THE MONTHLY BUSINESS REVIEW
These recurring war loan drives have
been an important factor in recent
fourth district banking developments.
Their respective effects on weekly reporting member
banks are shown on the accompanying charts.
The most conspicuous phenomenon is the sharp drop
of adjusted demand deposits during drives, and the sub
sequent recovery after the close of the campaigns. The
declines in demand deposits owned by individuals, part
nerships, and corporations are the result of conversion
into deposits payable to the U. S. Government, as in
dicated by the lowest curve on Chart I. In the months
intervening between drives, when Treasury expenditures
exceed receipts by a wide margin, Government deposits
are withdrawn from commercial banks and the funds
transferred to the reserve banks upon which all Govern
ment checks are drawn. As rapidly as such checks, issued
in payment for goods and services, are presented to com
mercial banks for deposit credit by individuals, corpora
tions, etc., a corresponding rise takes place in adjusted
demand deposits.
Notwithstanding the periodic depletions, adjusted de
mand deposits have shown an over-all tendency to ex
pand. The rate of growth would have been faster ex
cept for the fact that $500,000,000 of Federal reserve
notes have been paid out (net) by fourth district banks
since the First War Loan. The trend in time deposits
is also steadily upward, and Government balances are
generally larger than a year ago.
While some small fraction of this huge expansion of
deposits may represent an inflow of funds from other
reserve districts, the major factor appears on Chart II.
Some deposits have been created through bank loans,
but this expansion has been both modest and short-lived,
except for the Third War Loan and in the weeks im
mediately following. Borrowing during the Fourth Drive
was more moderate again, with the result that loans
for the purpose of carrying Government securities are
now the lowest since early last September.
In the main, the increase in deposits was caused by the
substantial purchases of Government securities by banks
for their own account. Treasury bills resold to the re
serve bank under repurchase option should be included
in measuring this expansion because their subsequent re
sale to the reserve bank left commercial deposits out
standing unchanged.
The period of greatest expansion in holdings of Govern
ment securities by weekly reporting member banks (in
cluding bills sold under option) occurred between the
opening of the First War Loan and shortly after the
close of the Third. From December 2, 1942, to October
20, 1943, weekly reporting member banks of this district
increased their holdings of direct or guaranteed Gov
ernment obligations by about 66 percent. Beginning with
the September-October 1943 campaign, direct partici
pation by commercial banks has been limited rather sharp
ly, with the result that inflationary credit expansion pro
ceeded at a slower pace. The net increase since that
date has been less than five percent.
It will be noted that, during the earlier phase, adjusted
demand deposits recovered quickly from the temporary
lows reached at the conclusion of each drive and moved
rapidly into new high ground in the intervening months.
However, the peak of adjusted demand deposits estab
lished on September 8, 1943, has not been exceeded to
date, reflecting both the less rapid increase in Government
security holdings and the continuous net outflow of cur
rency. Accumulations of currency outside the banking
system intensify the problem of credit regulation.
The recovery of adjusted demand de
posits since the Fourth W ar Loan has
failed to reflect in full the concurrent
contraction in U. S. Government deposits. From February
16, at the end of the Fourth W ar Loan Drive when Gov
ernment deposits stood at $847,000,000, to May 17, the
several types of deposits payable at weekly reporting banks
of this district have fluctuated as follows:
Recent
Banking Trends
Changes in Deposits— February 16, 1944, to May 24, 1944
Type of Deposit
Increase
Adjusted Demand Deposits ................. $366,0 0 0 ,0 0 0
Time Deposits ..........................................
40,0 0 0 ,0 0 0
Dus to Banks .............................................
U. S. Government Deposits .................
Decrease
$ 47 ,0 0 0 ,0 0 0
455 ,0 0 0 ,0 0 0
During this interval, a contraction of $78,000,000 in
loans, made by weekly reporting member banks for the
purpose of carrying Government securities, was partly re
sponsible for the lag in the rise of adjusted demand
deposits. In those instances where the borrowers drew
upon balances carried with lending banks, an equivalent
sum of demand deposits was thereby extinguished.
However, fully as important in retarding demand deposit
growth was the further rise of $96,000,000 in fourth dis
trict notes in circulation. It is estimated that at least
$60,000,000 of that withdrawal was paid out by weekly
reporting banks, causing a corresponding reduction of
deposits. It is chiefly this continuous drain on the reserve
position that has reduced excess reserves of member banks
of this district to a new low level for recent years.
During the first half of May, excess reserves of all fourth
district member banks were down to approximately $110,000,000, as against $312,000,000 a year earlier, and
$168,000,000 during the first half of February.
Member banks have shown an increasing inclination in
recent weeks to borrow at the reserve bank for the purpose
of replenishing reserves. While the current volume of
such discounts is quite nominal in comparison with the
general level in effect during the 1920’s, it is higher than
in approximately a decade.
New Member Bank
The Oakwood Deposit Bank Company, Oakwood, Ohio
CHART I
DEPOSIT
FLU C TU A TIO N S
FOURTH D IS T R IC T
SINCE JUNE 3 0 ,1 9 4 2
THE MONTHLY BUSINESS REVIEW
MANUFACTURING AND MINING
Indexes of employment, payrolls, and man
hours worked continue to reflect a “topping
off” in manufacturing fields in the fourth district. Some
reports of a lessening of pressure for delivery and more
concern for special qualities indicate an easing in a few
lines. In others, new orders received in April were in
much larger volume than in the same month last year.
Unfilled orders are still very large.
Declines in the number employed should not be taken
as an indication that need for workers has decreased.
Shifts of workers from war industries or essential civilian
activities to those where post-war employment possibili
ties appear to be brighter, even at reduced income, are
reported to be increasing.
Manpower
Steel operations continue at high levels and
^ May stood at 98.5 percent of rated ca
pacity. In the Cleveland district, steel pro
duction for week ended May 20 dropped from 97.5 per
cent capacity to 77.5 percent, as labor difficulties with
harbor tugmen interfered with mill operation. Steel in
got production for April totaled 7,568,500 tons, approxi
mately 200,000 tons more than was produced in April
last year. Orders for plates and sheets are off slightly,
but this is likely to be a temporary lull because of the
new landing craft and merchant ship programs scheduled
for early placement. The War Production Board an
nounced that estimates of demand for war and essential
civilian needs for steel exceeded prospective supplies by
26 percent for the third quarter of this year. Steel em
ployment has dropped four percent since last November
and further curtailment of steel for civilian use is antici
pated.
April loadings of Lake Superior iron ore totaled 5,288,079 gross tons. Shipments to May 1 amounted to 8,581,740 tons, compared with 1,954,817 tons in 1943, when
the opening of the Lake shipping season was unusually
late. The Great Lakes fleet this year consists of 317
ships, compared with 309 at the same time last year. Trip
capacity this year is 2,960,590 gross tons, compared with
2,816,690 tons a year ago.
Iron and
Steel
Bituminous coal production in the fourth district
declined from 20,125,000 tons in March to 18,835,000 tons in April. Stocks of bituminous coal in hands
of consumers totaled approximately 52,000,000 tons. This
is 30,000,000 tons less than inventories at this time last
Coal
CH AR T II
LOANS AND
GOVERNMENT
S E C U R IT IE S
FOURTH D IS T R IC T
SINCE
N
JUNE
30, IS 42
m
SOLO TO FEDERAL RESERVE
W IT H
NGS OF A L L
o1---------1942
U.S. GOVT SECURITIES
•INCLUDES A L L FOURTH
D IS T R IC T MEMBER BANKS
1943
19 4 4
3
year and is an indication of the extent to which con
sumption of coal is exceeding mine output. Coal oper
ators in this district continue to report a tight labor situa
tion and high absentee rates for miners. Coal shipments
on the Great Lakes to May 1 totaled 6,443,000 tons,
compared with 4,678,000 tons in 1943.
Within a period of two years, the $750,000,000
synthetic rubber industry has been conceived
and carried out during the worst period of
critical material shortages in the history of the country.
Although experimentation with synthetic rubber began
about 20 years ago, production was largely confined to
specialty items where products of natural rubber were
inferior to those of synthetics. Under the necessity of
supplying both military and essential civilian needs when
the source of natural rubber was cut off, the rubber in
dustry can view with pride its development of the former
small specialty line into a major industry in such a short
period of time.
Neoprene, Thiokol, and Buna N synthetics were in pro
duction in this country prior to the fall of the East In
dies. There had also been some experimentation with
Buna S and Butyl types. All of these synthetics differ
from natural rubber and, so far, a precise chemical dup
lication of the hydrocarbon of natural crude rubber has
not been made. One of the chief problems of the in
dustry has been to select the synthetic which, because of
its properties, is best suited for a particular need. In
the main, Buna S and Butyl are rated as best for elec
trical applications, Butyl for impermeability to gases,
Neoprene for resilience and tensile strength, Buna S and
Neoprene for resistance to abrasion. Because of its suit
ability for tires, relative cost, and plentiful supply of raw
materials, emphasis of the great synthetic expansion in
the war program has been on Buna S. Production for
1944 is estimated at 765,000 long tons.
The primary raw material for the synthetic rubber in
dustry is Butadiene, a gaseous hydrocarbon that may be
made from coal, alcohol, oil, or natural gas. This hy
drocarbon can be directly polymerized to a more com
plex structure resulting in one of the synthetics. A great
percentage of the plants manufacturing Butadiene from
oil has been concentrated near the great oil-producing
areas of Texas and California. A major portion of the
new processing equipment for synthetics is located in
Akron, long the world’s largest rubber manufacturing
center.
Of primary interest in the synthetic industry currently
is the civilian tire program. According to the Office of
Rubber Director, only slightly more than 1,000,000 pas
senger car tires will be built each month until July of
this year. The present production plan contemplates the
manufacture of 15,000,000 passenger car tires in the last
half of this year, making a total output of approximately
22,000,000 for the year. With extreme economy on the
part of the driving public, this program should be ade
quate for essential driving. Original estimates of normal
attrition called for the production of 30,000,000 new
passenger car tires. With the uncertainties of future
military needs, plus difficulties that yet may be encountered
in the manufacturing and processing of synthetics, at
taining the minimum of 22,000,000 necessary tires will
not be an easy goal for this year.
Synthetic
Rubber
4
THE MONTHLY BUSINESS REVIEW
Miscellaneous The machine tool industry has experiManufacturing enced an increase in new orders during the
last six weeks. Due to concentration on
heavy artillery and large shells, bigger aircraft engines and
tools for Russia, combined with the substantial but dwin
dling backlog of orders for the war program, orders for
April will exceed shipments by approximately $14,000,000. Estimates of production for the industry for 1944
have been revised upward and output now is expected
to total approximately $600,000,000, according to WPB,
in contrast with earlier estimates of $335,000,000.
Crude petroleum production in the fourth district has
held fairly steady at slightly over 2,100,000 barrels month
ly for the last year. In comparison with national produc
tion totals, the output of the district is small, but due
to the quality, Pennsylvania oil is valued highly in the
manufacturing of special lubricants. New interest is de
veloping in the old oil fields of Pennsylvania with the
application of unique methods of drilling. In Franklin,
Pennsylvania, a mine shaft has been drilled to the oil
sands and then, from the bottom of the shaft, holes have
been drilled horizontally.
Oil collected in pools is
pumped to the surface. In spite of 80 years of produc
tion, some oil men feel that 75 percent of the original
oil content in this section of the country is still in the
sand. With the application of mining techniques to the
oil industry, it is expected that many wells in the old
est oil field in the country may increase volume of pro
duction.
Manufacturing potters continue to report production
at levels which have prevailed for the last half year. Op
erations are curtailed by lack of manpower and most
potteries have on hand sufficient orders to take care of
present production for at least one year. Production is
estimated at 80 percent capacity.
Paper and paperboard manufacturers report operations
continue at approximately 90 percent of productive ca
pacity, limited by shortages of both raw materials and
manpower. Inventories in merchants’ and manufacturers’
hands are low, and present indications are that the next
three to six months are going to be most critical. Em
ployment in the paper industry has shown a steady de
cline in the face of continued pressure for maximum
production. Requirements of the armed forces for pack
aging materials continue in volume. Unfilled orders in
mid-May in the paperboard industry exceeded the un
filled orders for the same period last year. Lumber
production continues to be restricted by a shortage of
manpower. Boxing and crating lumber remains critical,
supply being entirely inadequate.
Construction contracts awarded in the fourth district
totaled $13,601,000 in April, according to the F. W . D odge
Corporation. This represents a decline of six percent from
the previous month. Residential construction accounted
for $3,244,000 of the total.
TRADE
Retail
Orders outstanding at reporting fourth district
department stores declined quite steadily during
the past several months, as shown on the accompanying
chart. At the end of last month, total orders were down
34 percent from the peak of last June and five percent
from April 30, 1943. This year-to-year change is in
sharp contrast to the gains of 200 percent and over that
retailers reported during 1943. Whereas orders ex
ceeded inventories by 38 percent on June 30 of last
year, the relationship changed considerably by April 29
this year, when commitments at the same stores were 21
percent less than their total volume of merchandise on
hand.
Merchants reported that there were several factors con
tributing to this decrease in the tendency to place orders
for future delivery. One was the improvement in ship
ments of merchandise, with the result that it was not
necessary for retailers to carry the same unfilled orders
for quite so long a period of time as was necessary last
year. Moreover, there was neither the need for plac
ing orders so far in advance nor for duplicate order
ing, which was the practice among many stores a year
ago. Still another contributing cause was the fact that
buyers, probably anticipating increased production of
civilian goods in the near future, canceled some commit
ments they made last year. Some of these orders were
placed for substitute goods, which in many cases have
not proved satisfactory and on which stores are reluctant
to stock heavily, especially where there is a possibility
that better merchandise might be available soon.
Accompanying the decline in orders outstanding was
an increase of 15 percent in inventories from January 1
to May 1. Stores were able to obtain more merchandise
than they sold during these four months, despite the
fact that dollar sales were at a record high throughout
most of the period. Merchants reported that obtaining
merchandise for their housefurnishings departments con
tinued to be more of a problem than the purchase of
apparel items. Stocks of major household appliances were
considerably smaller at the end of April this year than
last. Other articles for the home were generally avail
able, but many of these were substitutes or of inferior
quality. This was especially true in the carpet depart
ments. Stocks of all housefurnishings at the end of last
month were six percent smaller than those of the same
date a year ago, compared with the year-to-year increases
of 13 percent for men’s and boys’ wear and 29 percent
for women’s apparel. Retailers also experienced diffi
culty in obtaining items made of cotton as well as cot
ton piece goods. This scarcity is reflected in the 23 per
cent drop in stocks of cotton wash goods, while inven
tories of silks, velvets, and woolen dress goods were some
what larger. Total store inventories on the first of this
month were up 14 percent from last year; but the slight
decrease during April was contraseasonal, and the adjusted
THE MONTHLY BUSINESS REVIEW
stocks index declined two points to 147 percent of the
1935-39 base.
Despite the fact that a large portion of the pre-Easter
buying that was done in April last year occurred in
March this year, sales at fourth district wearing apparel
and department stores last month were slightly larger
than those of the same month a year ago. Wearing
apparel shops sold six percent more merchandise this
April than last. Department store sales, at a level one
percent greater than during April 1943, were the larg
est for any April on record. The year-to-year increases
experienced by stores in Cincinnati, Columbus, Pitts
burgh, Toledo, Wheeling, and Youngstown slightly more
than offset the decreases in Akron, Cleveland, Erie, and
Springfield. Sales at all reporting stores during the first
three weeks of May this year were up 18 percent, com
pared with the three weeks ended May 22, 1943.
Sales of housefurnishings and men’s and boys’ wear
last month showed no change from those of the same
month a year ago. Women’s apparel departments sold
slightly more merchandise, while piece goods sales were
up considerably from last year. The increase in Federal
excise taxes, effective last April 1, is reflected in the 82
percent decrease in fur sales this April over last. Sales
of other taxable items— cosmetics and drugs, silverware
and jewelry, small leather goods, and luggage— were also
smaller, but the decreases were not nearly so sharp as
that experienced by the fur departments.
Wholesale
^ e Parim ent ° f C om m erce reports that
sales at 174 wholesale firms in this district
last month were down four percent from those of April
1943. This was the first time in many months that fourth
district wholesalers experienced a year-to-year decline in
their business. Sales of dry goods, electrical goods, house
furnishings, hardware products, metals, paper, and to
bacco were smaller this April than last, while firms sell
ing automotive supplies, paints, drugs, and meats reported
increases in their dollar sales.
Wholesale inventories at the close of last month were
up two percent from the previous month-end and 14 per
cent from April 30, 1943.
AGRICULTURE
May 1
Conditions
For the country as a whole, farmers appeared
to have finished less of their spring work on
May 1 than in any season in many years, and
weather during May in many sections was not conducive
to planting. In Ohio spring work was behind generally.
Few oats were planted before May 1. Observers in cen
tral Kentucky said that farmers are about caught up
with their work in that section of the State. Most of
the corn is planted, tobacco land is ready for setting, and
the tobacco plants are doing nicely. For the second year
in succession, the crop season was unusually late in Penn
sylvania. Crop correspondents reported only 38 percent
of the plowing done by the first of May, as compared
with 60 percent in 1943, and 74 percent in 1942, when
spring was favorable for farm operations. Weather con
ditions during April have delayed farm work in most
areas in W est Virginia. Considerable spring plowing is
yet to be done and some oats acreage has not yet been
planted.
5
Wheat
The 1944 winter wheat crop indications im
proved 60 million bushels in April, according to
reports released by the Bureau of Agricultural Economics.
The total United States crop is estimated at 662 million
bushels, one-fourth larger than the 1943 crop and 16
percent larger than the average for 1933-42. With the
exception of Pennsylvania, indications in all States of the
Fourth Federal Reserve District point to 1944 crops from
one-half to two-thirds larger than last year’s very poor
harvest, although unevenness is evident. The Pennsyl
vania crop is estimated at one-third greater than 1943.
These indications represent about five percent increases
over the 1933-42 average for Ohio and Kentucky, a four
percent decrease for Pennsylvania, and a 15 percent de
crease for West Virginia.
Hay and
Pasture
The recent heavy rains have been favorable for
hay crops. Prospects point to a good growth
when the weather warms up. A good hay crop
is important this year, because the record number of cattle
on the farms and the late start of new grass in most states
have exhausted reserves of hay on many farms. On May
1, hay stocks were the lowest since the drought period
ending in the spring of 1937.
Pasture conditions on May 1 were above 80 percent of
normal in all States of the Fourth Federal Reserve Dis
trict. A condition of 80 percent or above is considered
as good to excellent.
Oats Instead of the eight percent increase in oats acreage
planned by farmers two months ago, the acreage
planted seems likely to be smaller than that of last year,
and, where planting was late, yield prospects have been
reduced. In many areas where oats acreage planted had
to be below intentions, other crops that can be planted
in May and June will be substituted.
In this area, corn
and soybeans are most likely to take the place of un
planted oats.
EggS
Since the beginning of the year, egg prices received
by farmers have continued to drop below last year’s
levels in all States of the Fourth Federal Reserve District
and in the United States. By the middle of March, prices
received by farmers in all fourth district States except
Pennsylvania had fallen below the 30-cent support price
announced in January 1944. By April 15, egg prices in
all fourth district States and in the United States were
below the W ar Food Administration support price. This
support price does not mean that all eggs should bring
30 cents, but rather, that prices received by United States
farmers should average 30 cents a dozen for the spring
and early summer months.
If adequate packing materials, storage and shipping
facilities, and manpower had been available, private han
dlers of eggs probably would have been able to absorb
the seasonal surplus, and prices would have been main
tained above the support levels without much help from
the Government. Since this is not the case, the only
way in which the W FA can carry out its commitment
to support the price of eggs is to buy up all supplies in
excess of the quantity which will move through private
channels at the support price. Under the new Govern
ment program for supporting egg prices, buying agents
were instructed to purchase eggs from producers and other
6
THE MONTHLY BUSINESS REVIEW
dealers at specified levels. The W FA stands ready to
acquire such eggs from the buying agents at higher levels
to allow for handling charges.
The question of what to do with the purchased com
modities naturally arises. Placing eggs in storage, to be
released later when current egg receipts are seasonally
reduced and prices recovered, requires egg cases suitable
for storage operations and adequate cold-storage space.
The short supply of wooden egg cases was being used
largely to meet the requirements of the armed forces
for shell eggs, and this shortage promises to continue.
Cold-storage facilities suitable for eggs have been avail
able in New England and some other sections of the
country, but eggs could be moved to these distant facili
ties only by diverting large numbers of refrigerator cars
from the hauling of other perishable commodities.
Another outlet for the surplus eggs purchased by the
Government is dried eggs. The egg drying plants, how
ever, were being operated at capacity except where short
ages of labor prevented. The price situation was already
such as to offer inducement to egg dryers to purchase
eggs for this purpose, but drying plants already had more
mechanical breakers than persons to man them. For egg
drying plants to obtain more labor is difficult in com
petition with other war industries.
To attempt to stimulate current civilian egg consump
tion through retail price reductions would have required
a narrowing of marketing margins all the way up to the
consumer, which is very difficult because eggs are mar
keted in so many ways. Reductions in retail prices based
on lower return to producers would not have contributed
to the maintenance of support prices, and it is doubtful
EGG
P R IC E S
R EC E IVE D
U N IT E D
BY
FARM ERS
STATES
O'
5
—
O’
CENTS
O
ro
PER
DOZEN
ro
O
w
u
o
AS OF A P R IL 15
1939
SOURCE: u . S. DEPARTM [N T OF a g r i CULTURE
1940
1941
1942
1943
194 4
1945
whether lower prices would have led to any great increase
in consumption, with national income at its present high
level and with the removal of ration points from many
meats.
Although April is the low-price month seasonally, egg
prices were about seven cents a dozen less this year than
last in all fourth district States, and only from one to two
cents a dozen above 1942 prices. As shown by the chart,
this is the first year since 1940 that April prices have
not been higher than in the preceding year. April egg
prices varied among the four States from a high of 28.4
cents a dozen in Pennsylvania to 24.0 cents in Kentucky.
However, all fourth district States have followed the same
trend as the United States since the war began.
Lowered egg prices resulted from heavy production,
caused by recent records in hen population and a seasonally
high laying rate, unusually large storage stocks, and a
shortage of storage space generally. In April, for ex
ample, there were 414 million layers on United States
farms as compared with 394 in 1943, and 300 during the
1933-42 average. The number of eggs laid per hen was
16.8 in April, about one percent below last year but two
percent above the average. This record number of layers
for April and the seasonally high egg-laying rate resulted
in a production of 582 million dozen eggs in April, an
increase of four percent over last year and about 40 per
cent over the ten-year average. Similarly, Ohio and
Pennsylvania hens produced seven to eight percent more
eggs in April this year than last.
Farmers usually make final plans for chicken raising
operations during the main hatching season, March
through May. These plans are influenced greatly by the
price relationships existing in that period. Thus, the de
cline in egg prices this spring, together with high feed
costs and labor shortages, has caused some poultrymen
to go out of business and others to lessen their demand
for baby chicks. On May 1, there were 1.4 percent fewer
chicks and chickens of this year’s hatching on farms than
a year ago. Pullet chicks are expected to make up a
greater percentage of the total purchases this year than
last, and the total rate of purchase now appears to be
in line with farmers’ intentions of February 1 to buy 17
percent fewer chicks in 1944 than in 1943. The weaken
ing in demand for chicks was reflected in cancelations
of orders for chicks to be delivered later and in lower
chick prices. This situation has left hatcheries with sur
plus chicks, resulting in the heaviest destruction of dayold chicks in the last three years.
7
THE MONTHLY BUSINESS REVIEW
Debits to Individual A ccounts
Wholesale a n d R etail Trade
(T h o u s a n d s of Do ll ars)
( 1 9 4 4 c o m p a r e d w i th 1 9 4 3 )
Percentage
Increase or Decrease
SALES
SALES
STOCKS
A pr il
first 4 A pr il
1944
m onths1944
D E P A R T M E N T S T O R E S (97)
A k r o n ....................................................................................
— 4
C a n t o n ..................................................................................
-0 C i n c i n n a t i ..........................................................................
+ 6
— 4
C l e v e l a n d ...........................................................................
C o l u m b u s ...........................................................................
+ 8
E r i e ..........................................................................................
— 3
P i t t s b u r g h .........................................................................
+ 4
S p r i n g f i e l d ..........................................................................
— 1
T o l e d o ...................................................................................
+ 3
W h e e l i n g .............................................................................
+11
Y o u n g s t o w n .....................................................................
+ 6
O t h e r C i t i e s .....................................................................
— 10
D i s t r i c t .................................................................................
+ 1
W E A R I N G A P P A R E L (16)
C a n t o n .................................................................................
+ 6
C i n c i n n a t i ..........................................................................
— 2
C l e v e l a n d ...........................................................................
+13
P i t t s b u r g h .........................................................................
+20
O t h e r C i t i e s .....................................................................
— 4
D i s t r i c t .................................................................................
+ 6
F U R N I T U R E (7 6 )
C a n t o n .................................................................................
— 6
C i n c i n n a t i ..........................................................................
— 10
C l e v e l a n d ...........................................................................
— 14
C o l u m b u s ...........................................................................
— 5
D a y t o n ................................................................................. ............3 7
P i t t s b u r g h ..........................................................................
— 4
T o l e d o ...................................................................................
— 13
O t h e r C i t i e s .....................................................................
— 14
D i s t r i c t .................................................................................
— U
CH A IN ST O R ES*
D r u g s — D i s t r i c t ( 5 ) ..................................................
— 1
G r o c e r i e s — D i s t r i c t ( 4 ) ..........................................
+11
W H O LESALE TR A D E**
A u t o m o t i v e S u p p l i e s ( 1 0 ) ...................................
+ 2
B e e r ( 5 ) .............. . . . . . . . . . . .......................................
— 9
C l o t h i n g an d F u r n i s h i n g s ( 3 ) .........................
— 4
C o n f e c t i o n e r y ( 3 ) .......................................................
— 13
D r u g s a n d D r u g Su nd ri e s ( 7 ) .......................
+ 1
D r y G o o d s ( 7 ) . ........................ . . .........................
— 7
E l e c t r i c a l G o o d s ( 1 3 ) .............................................
— 7
F r e s h F r u i t s a n d V e g e t a b l e s ( 5 ) .................
— 12
F u r n i t u r e & H o u s e F u r n is h i n g s ( 3 ) . . . .
— 31
G r o c e r y G r o u p ( 4 1 ) .................................................
-0 T o t a l H a r d w a r e G r o u p ( 2 7 ) ...............................
— 8
G e n e r a l H a r d w a r e ( 7 ) .......................................
+ 3
I n d u s t r i a l Sup plies ( 1 1 ) ..................................
— 14
P l u m b i n g & H e a t i n g Supp lies ( 9 ) ...........
— 13
J e w e l r y ( 3 ) .......................................................................
— 13
L u m b e r a n d B ui ld i n g M a t e r i a l s ( 4 ) . ...........
— 13
M e a t s a n d M e a t P r o d u c t s ( 5 ) .........................
+ 9
M e t a l s ( 3 ) .........................................................................
-— 2 2
P a i n t s a n d V a r n is h e s ( 4 ) .......................................
+12
P a p e r an d its P r o d u c t s ( 4 ) .....................................
— 5
T o b a c c o an d its P r o d u c t s ( 1 5 ) .........................
■
— 8
M i s c e ll a n e o u s ( 1 2 ) ......................................................
+ 8
D i s t r i c t — All W h o le s a l e T r a d e ( 1 7 4 ) ...........
■— 4
— 5
— 2
+ 4
-— 3
+ 9
+ 1
+ 3
+ 1
+ 7
+11
+ 7
-— 8
+ 1
+ 3
a
+20
+ 7
+30
+ 4
+15
a
+27
+34
a
+14
+14
+ 7
- 10
+ 8
+15
2
+18
+24
8
+ 3
‘t’ } !
+17
+10
- 13
■ 13
+ 2
31
•
5
12
— 8
22
26
■ 28
■ 37
a
48
20
30
35
+ 2
+ 5
a
a
+21
+ 5
a
+17
+ 9
— 2
4
— 50
a
a
+ 5
+ 2
—
— 15
— 23
+39
a
a
a
+16
+26
+14
* P e r in di vi d u al u n it o p e r a t e d .
* * W h o le s a l e d a t a co m p il e d b y U . S. D e p a r t m e n t o f C o m m e r c e , B u r e a u
o f t h e C en s us ,
a N o t av a il a b l e .
F i g u r e s in p a r e n t h e s e s in d i c a t e n u m b e r o f firms r e p o r t i n g sales.
F o u rth D istrict B usiness
(1935-39 = 100)
A p r il
1944
B a n k D e b i t s ( 2 4 c i t i e s ) ................................................
C o m m e r c i a l F a i l u r e s ( N u m b e r ) ............................
( L i a b i l i t i e s ) .........................
S a l e s — L i f e 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 l e D r u g s ( 7 f i r m s ) .......................
” —
”
D r y G o o d s ( 7 f i r m s ) ...........
” —
”
G r o c e r ie s (4 1 f i r m s ) ..............
” —
”
H a r d w a r e ( 2 7 f i r m s ) ...........
” —
”
All ( 8 2 f i r m s ) ............................
” — C h a i n D r u g s (5 f i r m s ) * ...............................
” — C h a i n G r o c e r ie s (4 f i r m s ) .........................
B u i l d i n 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 ro duction— Coal ( 0 . , W . Pa., E. K y . ) . . . .
— C e m e n t ( 0 . , W . Pa., E . K y . ) * *
”
— Electric Pow er ( 0 . , Pa., K y . ) * *
”
— P e t r o l e u m (O ., P a . , K y . ) * * . . .
”
— S h o e s ...........................................................
* P e r indivi dual u n it o p e r a te d .
**M arch.
201
10
26
106
170
134
145
130
188
152
160
160
56
42
150
55
203
102
83
Jan.-A pr.
1943
— 1 0.1
+ 9 .0
— 5 .2
— 1 5.9
+ 1 .0
— 17.2
708,938
68,576
311,438
2,390,251
4,983,567
1,291,492
650,281
54,042
283,801
2,292,141
4,273,741
1,106,567
% chance
fr o m 1943
+ 9 .0
+ 26 .9
+ 9 .7
+ 4 .3
+ 1 6.6
+ 1 6.7
96,855
582,306
253,260
24,141
48,285
79,177
1 9,0 31
180,796
104,537
34,988
78,816
80,911
60,844
5,224,067
43,721
66,666
131,195
52,610
1,05 1 ,9 5 7
92,442
158,818
332,219
50,246
18 ,6 0 2 ,1 5 0
87,558
538,821
225,386
19,295
39,833
79,547
17,309
157,493
96,194
26,274
66,551
75,826
61,679
4,676,043
37,669
57,235
119,599
50,392
929,521
93,402
148,904
306,044
49,088
1 6 ,6 2 0 ,2 3 6
+ 1 0.6
+ 8 .1
+ 1 2.4
+ 2 5 .1
+ 2 1 .2
— 0 .5
+ 9 .9
+ 14.8
+ 8.7
+ 3 3 .2
+ 1 8 .4
+ 6 .7
— 1 .4
+ 1 1 .7
+ 16.1
+ 16.5
+ 9 .7
+ 4 .4
+ 1 3 .2
— 1 .0
+ 6 .7
+ 8 .6
+ 2 .4
+ 11.9
—
—
—
+
+
—
—
—
+
+
+
—
—
—
+
+
—
—
—
—
—
—
—
—
3.6
6 .9
7 .2
1 4.3
6 .4
1 4.3
1 .6
7 .5
2 .2
4.8
6 .1
1 1.8
1 7.4
6 .9
0 .9
7 .8
5 .9
1 3.5
4 .9
21.1
2 4.5
6 .2
1 3.9
7 .0
(000
+ 7
— 11
— 13
1
a
+18
a
+16
+17
— 1
+ 7
+ 4
Jan .-A p r.
1944
om itted )
A pr il
1944
F o u r t h D i s t r i c t U nl e ss
O t h e r w is e Specified
+13
a
+19
i~Jn
—
169,583
17,008
78,723
563,708
C incinnati. . . .
1,263,596
299,648
C o lu m b u s.. . .
Covington2 3,006
N ew port. . .
141,516
62,098
6,276
11,630
Greensburg.. .
19,619
4,505
Homestead. . .
25,957
Lexington. . . .
25,737
L i m a ....................
8,265
20,168
19,299
M iddletow n. .
15,287
Oil C i t y ...........
P ittsb u rg h . . . . 1,279,152
10,752
Portsm o u th . .
17,303
31,426
S p r in g f ie l d . . .
13,160
St e u b e n v i ll e . .
259,658
23,443
37,362
83,438
Y ou n g stow n ..
11,662
Z a ne sv ill e . . . .
4,542,985
% change
fr om 1943
F o u rth D istrict B usiness Statistics
8
3
a
+ 8
— 5
April
1944
B a n k D e b i ts — 2 4 c i t i e s ................. 2 4 , 4 6 0 , 0 0 0
S a v in g s D e p o s i ts — end of m o n t h :
3 9 B a n k s O. a n d W . P a ................ 3 9 9 1 , 3 5 3
L i f e I n s u r a n c e Sale s:
3
89,761
Oh io a n d P a .........................
R e t a i l Sa les :
40,331
D e p t . S to r e s — 9 7 f i r m s .............. 3
1,889
W e a r i n g A p p a r e l — 16 f i r m s . . . 3
2,648
F u r n i t u r e — 7 6 f ir m s ...................... 3
13,601
B u il d i n g C o n t r a c t s — T o t a l . . . . 8
3,244
” — Residential 3
Co m m ercial Failures—
386
L i a b i l i t i e s ............................................ 3
7
C o m m e r c i a l F a il u r e s — N u m b e r .
Production:
P i g I r o n — U . S ...........N e t T o n s
5,243
7,569
Ste el I n g o t — U . S .. . . N e t T o n s
B i t u m i n o u s C o a l— O., W . P a . ,
18,835
E . K y ................................. N e t T o n s
C e m e n t— 0 . , W . P a ., W . Va.
457a
........................................................ B b l s .
Elec.
Power— 0 . ,
Pa.,
Ky.
3
,
090a
..................................T h o u s . K . W . H .
2,247a
P e t r o l e u m — O. , P a . , K y . . . B b l s .
S h o e s .............................................P a i r s
Bitum inous Coal Shipments:
L a k e E r i e P o r t s .............. N e t T o n s
5,209
% change
f r o m 1 9 43
—
7
% change
from 1943
Jan .-A p r.
1944
18,268,000
+ 12
372,232
+ 14
+ 18
+
6
+ 1
+ 6
—11
— 49
— 65
145,063
7,090
8,689
4 8,754
13,000
+53
— 63
614
28
+
+
4
3
21,082
30,157
+
2
78,121
+
—60
— 49
— 67
+
+
6,443
+39
4
3
+ 4
9,159b
6,441b
7
—
0—
—11
3
8
— 47
1,300b
— 55
+
+ 1
—
— 54
+ 10
+ 1
—
0—
+ 37
a M arch
b January-M arch
c C o n f id e n t ia l
Indexes
Ap ril
1943
A p r il
1942
A pr il
1941
A p r il
1940
216
28
17
10 1
162
13 3
156
130
204
157
162
14 3
108
121
147
1 23
189
1 01
93
159
55
32
77
153
108
154
118
228
149
136
140
207
219
15 3
129
164
99
111
138
91
60
1 05
139
94
116
1 05
166
121
119
114
153
245
5
119
144
91
114
1 05
68
34
96
108
89
95
92
110
97
99
1 01
130
15 9
102
92
121
101
85
Indexes o f D ep a rtm en t Store Sales a n d Stocks
D a i ly
Average
for
1 9 3 5 -1 9 3 9 = 100
W ithout
Seasonal A d ju s tm e n t
Apr.
M ar.
Apr.
1944
1944
1 9 43
SALES:
A k r o n ( 6 ) ...............
C a n t o n ( 5 ) .............
C incinnati (9 ) . . .
C leveland ( 1 0 ) . .
C olum bus ( 5 ) . .,
E r i e ( 3 ) ....................
P ittsbu rgh ( 8 ) . . .
Sprin gfie ld ( 3 ) . . ,
T o l e d o ( 6 ) ..............
W heeling (6 ) . . . .
Y oungstow n (3 ).
D istrict (96) . . . .
STOCKS:
District ( 5 1 ) . . . .
A d j u s t e d for
S e a so n a l V a r i a t i o n
Apr.
M ar.
Apr.
1944
1944
19 43
200
220
174
162
191
191
15 8
211
1 78
154
183
170
191
197
16 9
163
181
190
156
206
1 67
144
185
165
201
21 1
157
1 62
170
19 0
146
20 5
16 7
130
166
16 2
195
237
17 7
14 2
2 05
1 88
155
21 1
173
161
1 74
164
2 13
229
177
176
177
224
173
22 1
17 4
1 60
196
185
188
2 19
154
138
17 4
181
135
1 97
1 57
1 27
151
151
153
154
134
147
14 9
129
8
THE MONTHLY BUSINESS REVIEW
Sum m ary of National Business Conditions
Bv the Board of Governors of the Federal Reserve System
i n d u s t r ia l
p r o d u c t io n
Federal Reserve indexes. Groups are expressed
in terms of points in the total index. Monthly
figures, latest shown are for April 1944.
WHOLESALE PRICES
FARM PROD
J
.
ALL commodities
— -
j
-
w
THAUmm P*0£H
1939
1940
1941
1942
1943
1944
Bureau of Labor Statistics’ indexes. Weekly fig
ures, latest shown are for week ending May
13, 1944.
MEMBER BANKS IN LEADINQ CITIES
-
-
(ADJUSTED)
-/W> ■ «><i
I
{
y_
U.4G0V T DEPOSITS
1939
1940
, / V
j
1941
i942
-
GOV'T
SECURITIES
____
Ab
1943
1944
Demand deposits (adjusted) exclude U. S.
Government and interbank deposits and col
lection items. Government securities include di
rect and guaranteed issues. Wednesday figures,
latest shown are for May 17, 1944.
MEMBER BANK RESERVES AND RELATED ITEMS
Wednesday figures, latest shown are for May
17, 1944.
Distribution
Department store sales declined in April and, after allowance for usual seasonal
changes, were about 10 per cent below the high level which prevailed in the first
quarter of this year. In the first half of May sales were maintained and were con
siderably larger than in the corresponding period of 1943.
Carloadings of railroad freight in April and the first half of May were maintained
in large volume. Grain shipments continued to decline from the exceptionally high
levels of January and February. Ore loadings increased sharply in April and were
60 per cent greater than a year ago.
Com m odity prices
N
-
Industrial production and employment at factories and mines declined somewhat
further in April, reflecting principally reduction in output of metal industries. The
number of industrial wage-eamers was about 6 per cent or 800,000 less than in
November 1943.
Industrial production
The Board’s seasonally adjusted index of output in manufacturing and mining
industries was at 240 per cent of the 1935-39 average in April, as compared with
242 in March and 245 in February.
Small declines in output of metals and metal products continued to account for
most of the decrease in industrial production. Electric steel production decreased
further in April to a level 5 per cent below the same month last year. Production of
most nonferrous metals declined, reflecting partly planned curtailments and partly
the effects of labor shortages in mines and smelters. A further curtailment of alumi
num production was announced in May. Activity at plants producing munitions in
the machinery and transportation equipment industries declined somewhat in April.
Production under the farm machinery program continued to increase and was
reported at a rate above the highest volume recorded in any peacetime year.
Output of nondurable manufactured goods showed little change in April.
Activity at cotton mills was maintained at the level of recent months, approximately
15 per cent below the peak level of April 1942. As a measure to increase production,
a 48-hour work week was orderd in the cotton textile industry, effective May 14.
The number of animals slaughtered continued at an exceptionally high level
in April, and effective May 3 most meat products were removed from rationing.
Output of dairy products continued to rise seasonally and supplies available for
civilians increased.
Mineral production was maintained in large volume in April. Production of
both bituminous and anthracite coal for the year through May 6 was approximately 5
per cent more than in the same period in 1943.
Crude petroleum production in April continued at a level about 12 per cent
above a year ago. Mine production of iron ore showed a large seasonal rise, reflecting
the opening on April 10 of the season for lake shipments.
Wholesale prices of most commodities showed little change from the middle
of April to the third week of May. Prices of farm products and foods were slightly
lower, while maximum prices of some industrial commodities were raised.
The cost of living index advanced one-half per cent from mid-March to midApril, reflecting higher retail prices for foods and furniture and increased excise
taxes effective April 1.
Bank credit
From the end of the Fourth War Loan Drive in the second week of February
through the middle of May, demand deposits of individuals and businesses at weekly
reporting banks increased by about 3 billion dollars. Time deposits also increased
appreciably. During the same period war loan accounts at reporting banks declined
by more than 6 V2 billion dollars. Holdings of U. S. Government securities by these
banks declined by about 2 billion dollars and loans contracted by more than lVz
billion dollars. A large part of the loan decline was the liquidation of credits extended
during the war loan drive. Loans to brokers and dealers are now less than they were
before the Fourth War Loan Drive and loans to others for purchasing and carrying
U. S. Government securities are down to about pre-drive levels. During the same
period commercial loans also declined rapidly.
Sales of U. S. Government securities by commercial banks were paralleled by
equivalent purchases by the Federal Reserve System. System holdings are now about
2V2 billion dollars larger than they were at the end of the Fourth War Loan Drive.
These purchases were made to supply member banks with reserve funds needed to
meet a continued increase in currency and the growth in required reserves which
resulted from shifts of deposits from Treasury war-loan accounts to other accounts.
Some of these needs have been met by a decline in excess reserves. Sharp declines
in excess reserves at the end of March and April were associated with unexpectedly
large tax receipts and the building up of Treasury balances at Reserve Banks. Cur
rency in circulation, which increased somewhat less rapidly during the first quarter
of 1944 than in the same period last year, renewed its rapid outflow late in April and
during early May. In the four weeks ending May 17 the currency outflow was over
500 million dollars.
@FedFRASER