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Busin
eview
Fourth Federal Reserve District
Federal Reserve Bank of Cleveland
Finance, Industry,
Agriculture, and Trade
V o l. 27
Cleveland, O hio, November 1, 1945
N o. 10
CURRENT FINANCIAL TRENDS
W ith war orders and contracts virtually eliminated
from the industrial scene, manufacturers and dis
tributors have had nearly three months in which to
devote most of their energies toward resumption of
peacetime activities. The exacting requirements of
war have rapidly given way to the new but not wholly
unexpected problems of production for civilian con
sumption.
A similar transition in the banking and monetary
sector has scarcely begun. I t will be a slow process
at best. Member banks in the fourth district as well
as elsewhere are still operating on a wartime basis, so
to speak. The volume of loans, investments, deposits
and reserves of each bank continues to be strongly
influenced by Treasury operations. The effects of the
Eighth “Victory” Loan upon the banking picture
will be comparable to those of previous drives when
the nation was still at war.
During the period shown on the accompanying
charts (July 3 to October 17) the Treasury’s working
balance— cash on hand and in banks— declined by
310 billion, of which not far from 31 billion was with
drawn from banks in this district. W ith respect to
the 41 weekly reporting member banks, the contraction
in Government deposits amounted to nearly a half
billion dollars. That shift o f funds out of war loan
accounts was the largest single element in banking
developments over the recent past. It heads the list
in the accompanying tabulation of factors tending to
affect the reserve position of member banks. During
the current war loan drive, the process will be tempor
arily reversed, to be resumed again before the year’s
end.
In the absence of countervening influences, that
3491 million withdrawal of Government deposits
would have reduced the reporting banks’ statutory
reserves far below the legal minimum. The offsetting
factors, however, were of sufficient volume in the
aggregate to cancel much of the decline in Treasury
balances.
Slow Rise The concurrent increase in demand and
of Private time deposits of individuals and corporaDeposits tions— 3179 million and 380 million,
respectively— fell considerably short of
the draft on Treasury deposits. This differential is
attributable to several causes. One is that these banks
alone paid out perhaps as much as 375 million in
currency in excess of receipts. Another factor has
been the tendency for Treasury receipts in the fourth
district to hold up rather better than Treasury ex
penditures. The outflow of funds through tax collec
tions and borrowings has not declined noticeably
whereas the inflow of Treasury checks shows a measur
able shrinkage. A third element is that funds have
tended to accumulate somewhat more rapidly at
country banks than at the larger city banks which
comprise the bulk of the 41-bank sample.
The 3193 million liquidation of Treasury bills and
certificates of indebtedness, through open market and
option account sales, and by run-offs, represents a
major source of funds during the period under survey.
Most of the contraction, especially of certificates of
indebtedness, took place during September and early
October and was probably associated to some extent
with quarterly tax collections.
Shifts to
Longer
Maturities
That this was not wholly necessitous
liquidation is attested by the fact that
holdings of Treasury bonds actually
increased 356 million in the same in
terval, notwithstanding that during the period holders
of a called Treasury bond were offered certificates
of indebtedness in exchange. A considerable number
of banks elected to take cash which in some instances
was used to purchase outstanding bonds in the open
market at prevailing premium prices.
THE MONTHLY BUSINESS REVIEW
2
A fraction of the #56 million increase in Treasury
bond portfolio can also be ascribed to sales of securi
ties, by others than brokers, which had been purchased
with borrowed funds during the Seventh or perhaps
earlier W ar Loans. It is doubtful that all of the 374
million reduction in such indebtedness was accomp
lished out of current income.
The net result of these and the other changes
arrayed in the adjoining table, was a 324 million (or
three percent) increase in balances carried at the
reserve bank by the 41 weekly reporting banks. Actual
reserve requirements— because of the growth of
privately-owned deposits— increased much more
rapidly with the result that by mid-October excess
reserves were not far above the lowest point of recent
years. Under those circumstances some borrowing
materialized. But it is of interest that the increase
in rediscounts was almost identical with the net gain
in reserves, indicating that reserve position and in
vestment policies are closely integrated.
41 Weekly Reporting Member Banks
July 3 to October 17, 1945
( In M illions)
Effect
Upon
Member Bank
Reserves
Changes in Factors Affecting
to
to
M ember Bank Reserves:
Decrease
Increase
U. S. Government D eposits.............................. 3491 —
Treasury Bonds....................................................
56 +
Brokers’ Loans (on non-Govt. co llate ral).. . .
12 +
V ault C a s h .............................................................
4 +
Holdings of non-Govt. Securities...................
4 +
Treasury N otes.....................................................
3 +
Due from Domestic B an ks................................
32 —
Commercial, Industrial, and Agri. Loans. . . .
4 —
Loans to Non-Brokers (on non-Govt. collateral)
4 —
Real Estate Loans...............................................
4 —
Other Liabilities...................................................
’
5 +
All Other Loans....................................................
5 —
Balances Due to Domestic B anks...................
7 +
C apital Accounts.................................................
7 +
Brokers’ Loans (on G ovt, securities)..............
10 —
Rediscounts...........................................................
20 +
Loans to Non-Brokers (on G ovt, securities). .
74 —
80 +
Time D eposits......................................................
Treasury B ills.......................................................
92 —
Certificates of Indebtedness..............................
101 —
D em and Deposits of Individuals and Corp.. .
179 +
Increase in Reserves at Federal Reserve Bank
$ 24
NOTE:
Plus or minus sign indicates direction of change in th a t
item.
Variations
in Investment
Policy
During the third quarter, the eight
largest banks in this district moved
another notch closer to a position of
full investment. Ever since the
Seventh War Loan, aggregate cash assets of these eight
banks were maintained at around 19 percent of total
resources, as against a 20-21 percent ratio during
much of the first half of 1945. Smaller banks have
likewise tended in that direction during most of the
year. They have consistently adhered, however, to a
more liquid position, the ratio never dropping below
20 percent, and in recent weeks it has risen again.
Presumably some outlying banks are accumulating
funds in anticipation of a postwar shift of deposits
away from their localities; conversely, metropolitan
banks may be anticipating an increase in deposits and
reserves. Excess reserves of country banks are larger
dollarwise than a year ago, whereas reserve city banks’
are smaller.
During the present war loan, reserve requirements
will decline again as privately-owned deposits are
converted into reserve-free Government deposits. It
is inevitable, however, that requirements will rise
again, presumably to a new record high (under the
present schedule of percentage requirements) as the
Treasury's working balance declines to peacetime
levels. That decline may approach a magnitude of
around 312 billion within a period of six months.
Whether that movement will mean an increase in
reserve requirements of 32.5 billion or only 3750
million will depend upon where those funds will con
gregate and the conditions of deposit, time or demand.
Currency
Movements
In view of this probable further need
for reserves, the future trend of cur
rency in circulation is of considerable
significance. During both 1943 and 1944, approxi
mately 35 billion of currency was paid out on balance:
Even in 1942 the amount was in excess of 34 billion.
By Labor Day the 1945 increase had reached 32.5
billion, but in the following six weeks only another
3200 million (net) moved out. This gives rise to the
hope that after the current quarter’s normal seasonal
demands, currency requirements will recede from their
dominant position. However, it is not generally
anticipated that an inflow of currency will soon
become an important source of member bank reserves.
THE MONTHLY BUSINESS REVIEW
Lag in
C o m m e rcial
Loans
In several respects the experience of
fourth district banks during recent
months has differed from that of the
rest of the country. One of the con
trasts is the behavior of commercial, industrial, and
agricultural loans, which is depicted on an adjoining
chart. The percentage increase since midyear in this
type of loan has been largest at New York City banks.
Expansion of commercial loans has been notably
rapid since V-J Day. Outside New York City the
trend has also been steadily upward at a not unsatis
factory annual rate.
In the fourth district, however, the conventional
type of bank loan reached a new wartime low late in
July. Moreover, the end of war appears to have had
no appreciable effect upon the demand for commercial
credit in this area. Presumably the forces which have
brought about a rise in such loans in New York City
and elsewhere are likewise present in the fourth district
and will presently make their influence felt. Should
the deviation since early September continue, a careful
analysis of fundamental causes might be warranted.
Inactivity of
Other Loans
Another contrasting development,
and one which was somewhat un
anticipated, is the trend of “ all
other” loans, which consist largely of single-payment
loans to individuals and other noncommercial loans
exclusive of secured and real estate loans. In this
instance, the volume of outstanding loans of weekly
reporting banks of this district compares favorably
with other regions outside New York City. However,
the entire country (particularly banks outside the
largest cities) appears to be lagging behind the money
market banks. Loans of this type usually respond to
changes in the output of consumers’ durable goods.
Until production of such articles expands beyond
current restricted schedules, all other loans may not
show any significant changes in the fourth district.
Eventually, though, the rise should be more rapid in
the midlands than in New York City.
A ll
Liquidation
Secured Loans
Slow
of
W ith respect to a third category
of bank loan, the comparison
between this district and the rest
of the country, especially New York City banks, is
LOANS TO OTHERS ON GOVT SECURITIES
WEEKLY REPORTING MEMBER
BANKS
ED. RES- DtST.
\
75.0
h-
Z
*1
•
BANKS OUTSIDE N. Y.
id
-
X
O
ff
UJ
wN. Y. C.
Q.
BANKS
50.0
25.0
JUL
LATEST DATE PLOTTED - OCT. 17. IS45
AUG
*
SEPT
OCT
3
just the reverse, having declined less rapidly here
than elsewhere. Loans to others than brokers, secured
by U. S. Government securities, reached an all-time
high on July 3, at the close of the Seventh War Loan.
In the 15 intervening weeks, borrowers at New York
City banks liquidated, either by sale of collateral or
out of other cash receipts, over 70 percent of this
indebtedness. In all weekly reporting banks outside
* New York City, the contraction was less than 50
percent, and in the fourth district less than 40 percent
of such loans had been liquidated by October 17. The
volume of borrowing for similar purposes during the
Eighth War Loan may be affected by these disparities
in the rate of inter-drive liquidation.
Contrasts in
Deposit Growth
Demand deposits of individuals,
partnerships, and corporations,
adjusted for float, have risen only
nominally in the fourth district from the low point
established toward the close of the Seventh War Loan.
The re-expansion to October 17 was only about six
percent, as against nearly twelve percent in New
York City and better than eight percent in the rest of
the country.
This development is all the more notable in view of
the more extensive liquidation of secured loans in
New York City than elsewhere. Apparently there has
been a considerable interdistrict movement of funds
for this purpose. A number of the loans in New York
City must have been made to outside-New York
borrowers. Subsequent repayment reduced deposits
in the fourth district rather than at the lending banks.
The contrast has been most noticeable since early
September, which might lead to the conclusion that
deposits were beginning to shift from outlying regions
to industrial centers, and from the interior to New
York City. That thesis, however, does not square
with the fact that in the fourth district itself the
over-all rise has been retarded by a decline in demand
deposits at the largest banks. The expansion of de
posits at smaller weekly reporting banks appears
not to have been interrupted thus far. In the event
{Continued on Page 10)
DEMAND
WEEKLY
DEPOSITS ADJUSTED
REPORTING
MEMBER
BANKS
4
THE MONTHLY BUSINESS REVIEW
INDUSTRIAL EXPANSION
Throughout the Fourth Federal Reserve District,
manufacturers of industrial and consumer goods as
well as distributors of these products have embarked
upon a huge expansion, modernization, and improve
ment program. A review of announced plans indicates
that a tremendous increase is anticipated in the distri
bution and consumption of all types of products.
Plans calling for an increase of 50 percent in produc
tion capacity are common and anticipated increases
of 100 percent are not at all unusual. In a few in
stances, well established firms are predicting sales
within the next year-and-a-half from six to ten times
their prewar experience. As yet, it is too early to
assess the scope of the entire program in terms of
dollars and additional employment opportunities.
W ithout attempting to be all inclusive, the following
major programs have been recently announced.
Ir o n a n d
Steel
The Youngstown Sheet & Tube Company
will expand its cold rolling mill at the
Youngstown Campbell Works by adding
200,000 tons to its cold rolling capacity. Some 140,000
square feet of floor space will be added. The company
is also installing additional wire drawing capacity at
the Struthers Rod and Wire Works. Altogether these
additions will provide an outlet for another 300,000
tons of ingot capacity.
The Continental Can Company will begin construc
tion early next year of a general-line can plant near
the Alleghany County Airport. Upon completion of
this new structure, the firm will eventually close down
its McKees Rocks and Cannonsburg plants. The
new can plant will employ between 900-1,200 people.
On a site of approximately 146 acres, the company is
also planning a very large can-making plant near
Weirton, West Virginia, which will employ between
1,000-1,500 people. This plant will ultimately take
the place of two Wheeling plants and two others
whose identities have not yet been announced. The
new enterprise will be located adjacent to the Weirton
Steel Company, its principal supplier of tin plate.
The Continental Can Company is also making ad
ditions to its paper plants in Van Wert, Ohio, and
Reading, Pennsylvania. The plastic plant in Cam
bridge, Ohio, will also be enlarged.
Paralleling this expansion program of one of its
customers, the Weirton Steel Company contemplates
spending approximately 312,000,000 on an expansion
program of its Weirton Works.
The Jones & Laughlin Steel Corporation has plans
for a ^12,000,000 expansion program at its Aliquippa
Works to be carried out during the next twelve
months. Tin plate capacity will be enlarged approxi
mately 50 percent.
The American Rolling Mills, Ashland, Kentucky,
intends to inaugurate a large modernization program
to provide a completely integrated unit for the pro
duction of pig iron and castings.
At Mansfield, Ohio, the Empire Steel Company
plans a 3250,000 expansion program for the installa
tion of a pack furnace, mill, and equipment to double
its production of core-plating and steel sheets. The
new facilities are expected to be completed January 1
and will require an additional 200 men.
The National Tube Company will enlarge its
Lorain facilities by the construction of 177 by-product
coke ovens to cost 315,000,000. The new ovens will
have an annual capacity of 850,000 tons of coke.
Additional improvements for a conveyor system,
coke preparation facilities, etc., will cost another
315.000.000.
Contractors have started work on a new building
for the American Rolling M ill Company at Butler,
Pennsylvania, to house 20 electric annealing furnaces.
The complete project which will cost about 3750,000
will enable the firm to anneal its own electrical steel.
From these announced plans, it is therefore apparent
that wartime expansion of steel production and
processing facilities did not meet in full the needs of
individual producers.
M achine ry
The expansion plans of various ma
chinery manufacturers are no less
impressive. The Harris-Seybold-Potter Company,
manufacturers of presses for letter-press gravure, off
set lithography, and press room binderies, is planning
a 3140,000 addition to its Cleveland plant to double
the output of its assembly department. In addition,
3300.000 will be spent for new equipment and to re
habilitate present machinery. The plant in Dayton
will also be enlarged at a cost of approximately
3125.000. It is anticipated that employment will
increase from its present total of 1,200 employees to
about 1,800. Prewar sales were 34,000,000 annually
as compared to an expected annual sales volume of
310.000.000.
Lempco Products, Inc., through its subsidiary the
Cleveland Pressed Steel Company, has purchased the
former plant of The National Steel Barrel Company
in Cleveland. The plant will be used to manufacture
a new high speed press for pressing and drawing sheet
metal. They also will manufacture the die sets and
the dies that go with the press. Employment is
expected to increase from 40 to 150 by the end of the
year.
American Brake Shoe Company has started con
struction of a 32,500,000 addition to its ElectroAlloys plant at Elyria. This plant was purchased
in 1944 and the new addition will double production
capacity of heat resisting alloys.
The Reliance Electric & Engineering Company has
started work on new construction which will provide
44.000 square feet of floor space. The new plant
together with equipment will cost 3350,000. The
company manufactures electric motors, generators,
and specialized industrial machine drives in Cleveland.
THE MONTHLY BUSINESS REVIEW
5
A. W . Hecker Company of Cleveland plans a
3250.000 expansion program for the development,
design, and manufacture, of pumps to add to its
present line of production jigs, fixtures, and special
machinery. Included in this expansion program will
be a new building to cost 3150,000. As a result of this
expansion, the firm will employ about 550 people as
compared to a prewar peak of 400.
Cleveland Graphite Bronze Company has an
nounced that it has spent 32,000,000 for new machin
ery and plans to spend an equal amount in the near
future.
Production of various bearing products
reached 32,000,000 monthly by October 15 as com
pared to annual sales in 1940 of 310,000,000. The
company anticipates that it will need 4,500 employees
whereas the prewar maximum was 2,100.
The Detroit Harvester Company, Detroit, Michi
gan, has purchased the Standard Tire Company plant
at Zanesville, Ohio, to be used for the manufacture of
farm machinery. The company expects to employ
about 200 people at this plant.
Thompson Products, Inc., of Cleveland, expects
to acquire from the R F C the 330,000,000 Euclid war
plant operated during the war by its subsidiary, The
Thompson Aircraft Products Company. This is. the
second largest war plant constructed and owned by
the Government in the greater Cleveland area. The
1939 sales of Thompson Products, Inc., were 316,000,000. The company now anticipates sales of 350360,000,000 to be attained within the next 18 months.
It is estimated that 8-10,000 employees will be needed
with an annual payroll upwards of 320,000,000.
Industrial Goods
and Parts
One of the largest ammonia
plants in the United States,
The Buckeye Ordnance Works
at Ironton, Ohio, has been leased to the Atmospheric
Nitrogen Corporation to produce ammonia for civilian
use. The 342,000,000 Works commenced production
in 1943 and was operated by the present lessee for the
Army Ordnance Department. I t is expected that 450
people will be employed which is about the same
number of employees formerly used for war produc
tion.
The whole.of the General Motors Corporation ex
pansion program has not been entirely announced to
the public. Enough of it has been disclosed, how
ever, to indicate that the corporation intends to
maintain or improve its competitive position in a wide
variety of fields. The Frigidaire Division is planning
alterations, new machinery, and installations costing
3176.000 for its plant at Moraine City which is located
near Dayton. A new factory will be built at Elyria,
Ohio, on a 175 acre tract, by the firm’s Brown-LipeChapin Division as soon as materials are available.
The plans call for 400,000 square feet of manufactur
ing floor space and an administration building. 2,000
people will be employed to manufacture hub caps,
bumper guards, radiator grilles, etc.
The General Electric Company’s expansion program
is one of the most varied in the fourth district. Plans
have been announced to build a factory at Tiffin, Ohio,
for the manufacture of small electric motors and
ballasts for fluorescent lamps. Work will start as soon
as materials are available. The company also con
templates a 34-35,000,000 plant at Ashtabula for the
manufacture of refrigeration units. In addition, a con
tract has been let to build a 34,700,000 plant with
285,000 square feet of floor space at Coshocton, Ohio.
This latter enterprise will manufacture laminated
plastics and employ about 800 people. A t Erie,
Pennsylvania, General Electric is expanding beyond
1940 operations by taking over two buildings erected
by the Defense Plant Corporation which contain
about 245,000 square feet of floor space. Another
industrial plant containing 100,000 square feet of
manufacturing area has also been acquired in the same
city. These facilities are to be used in connection with
the manufacture of complete refrigerator units and
will mean a considerable increase in em ployment at
Erie.
Chevrolet and Fisher Body Divisions are jointly
sponsoring a 34,000,000 expansion at Norwood, Ohio.
The Ternstedt Division of Fisher Body has outlined
plans for a plant at Columbus, Ohio, to manufacture
automobile hardware and interior trim. The plant is
expected ultimately to employ between 7,500-8,000
people. Fisher Body has obtained approval to con
struct a 32,000,000 plant at Hamilton, Ohio. It will
be located on a 145 acre tract and contain 1,200,000
square feet of manufacturing floor space. It is expected
that some 3,000 employees will be used to manufac
ture body stampings and sheet metal components of
body assembly.
Another General Motors subsidiary, New Depar
ture, has obtained a site near Sandusky, Ohio, for the
construction of a ball-bearing plant. I t is estimated
that some 2,500 employees will be needed when full
production is attained. The corporation has not
officially confirmed its plans to build new plants in
Parma and Brookpark Village nor an expansion pro
gram projected by the Fisher Body Division for its
Cleveland Coit Road plant.
Glidden Company, Cleveland manufacturer of
paint and varnish, is planning a 31»500,000 ex
penditure for new equipment and laboratory build
ings. The company has developed extensive use of
synthetics and believes that present products are
better than prewar quality. A 50 percent increase in
paint and varnish sales is anticipated.
The J. & W. Machine & Sheet Metal Company,
Marietta, Ohio, manufacturer of industrial drying
ovens and metal food lockers for cold storage plants,
is acquiring additional factory spa ;2 to increase the
production of lockers from 1,500 to 3,300 a week. The
oven drying business is also expanding.
Monsanto Chemical Company has listed 151 con
struction and expansion projects throughout the
United States to cost 348,400,000. Most of this sum
will be spent to enlarge existing plant facilities of
which four are located in the fourth district.
6
THE MONTHLY BUSINESS REVIEW
Westinghouse Electric Company, Mansfield, Ohio,
has acquired 100,000 square feet of floor space in
Meadville, Pennsylvania. This facility will be used
to produce a full line of industrial heating equipment
and will employ 200 people.
In addition to the plans of General Electric for
Erie which have already been noted, the Hammermill
Paper Company has announced a 35,000,000 expansion
program in that locality which includes a new 180 inch
paper making machine and additional power plant
capacity. The Aluminum Forging Co., Inc., has
obtained a long term lease of Defense Plant Corpora
tion property which it operated during the war.
Floor space amounts to about 345,000 square feet.
The facilities will be used for the production of
aluminum stampings for the automotive and aircraft
industries.
In the public utility field, the Ohio Bell Telephone
Company is planning a state-wide 3100,000,000 pro
gram to expand buildings and equipment while the
Pennsylvania Power Company in West Pittsburgh,
Pennsylvania, plans to double production capacity
of its power plant and expand existing facilities. The
project will cost 33,200,000.
The Ohio Rubber Company in Willoughby, Ohio,
has started work on a 3540,000 program to increase
factory floor space, power, and heating facilities.
Another rubber manufacturer, B. F. Goodrich Com
pany, has announced through its new subsidiary, B. F.
Goodrich Chemical Company, that it has let a con
tract for the construction of a new 3600,000 “ semiworks” at Avon Lake, Ohio. It will be a versatile
small scale chemical works to develop manufacturing
routines for new synthetic resins and chemicals as the
intermediate operation between the laboratory pilot
plant and full scale commercial production. In ad
dition, the corporation has acquired acreage for a
31,500,000 laboratory at Brecksville.
The expansion of laboratory and research facilities
is a development of the utmost importance. It
demonstrates a determination on the part of the fourth
district industry to maintain its general competitive
position. Libbey-Owens-Ford is another company
that intends to intensify and enlarge its research
activities. Contracts have been awarded for an ad
dition to the technical building in Toledo to cost an
estimated 3250,000. The plans include an enlarged
engineering department and new wing which will be
used for office space, laboratories, experimental and
pilot plant to house miniature glass furnaces, test
towers, and other equipment. The additions will in
crease floor space facilities by about 50 percent
Proctor & Gamble Company, soap manufacturer,
expects to spend 3500,000 expanding its research
building at Ivorydale, Ohio.
The Fisher Scientific Company of Pittsburgh,
Pennsylvania, plans to build a 3500,000 manufactur
ing plant to connect with its present building. The
company proposes to expand its output of instruments
for chemists, bacteriologists and other research
workers. The instruments are made of both glass
and metal.
The Cleveland Steel Products Corporation will
spend
31*000,000 on an expansion program that will
increase production to six times that of the prewar
rate. About 3550,000 of this sum will be for a new
building. The company manufactures oil burners,
water heaters, and heating and ventilating equip
ment. Additional jobs for 200 people are expected to
be provided.
Gabriel Company, manufacturer of shock absorbers,
plans to erect a 3750,000 plant in Cleveland and to
spend an additional 3500,000 for equipment. The
company anticipates a ten-fold increase in sales above
its prewar level.
The Curtis-Wright Corporation has announced that
it will manufacture all of its airplanes in Columbus
beginning in 1946. It plans to close eventually its
Buffalo manufacturing plants.
Burnham Boiler Corporation, near Zanesville, Ohio,
will embark upon a 3500,000 expansion and modern
ization program. I t will acquire more automatic
machinery and the conveyor system is to be modern
ized.
The White Motor Company of Cleveland will erect
an office, sales and service building costing 3400,000.
At Cleveland, the Air Reduction Company an
nounced that it is planning to spend 325,000,000 for
plant improvements and expansion. The plans call
for additional dry ice plants, industrial gas plants,
distribution and warehouse facilities and research
laboratories. About 321,000,000 of this program is for
land and buildings, and the remainder is for equip
ment.
North American Manufacturing Company, Cleve
land, will spend 3313,000 for a new plant and equip
ment to double its productive capacity of industrial
gas and oil-burning equipment.
Consumer Goods
and Distributors
A t Alliance, Ohio, Taylorcraft
Aviation of D e tr o it A ir c r a ft
Products, Inc., produced its first
civilian aircraft on August 30. The announced produc
tion goal is 5,000 planes per year and the company
expects to use two shifts of 1,000 men each within
three months. The company produced aircraft parts
during the war and employed 1,800 people.
»
Proctor & Gamble Company, Cincinnati, Ohio, will
erect a 31,000,000 plant at Sandusky, Ohio, to manu
facture soap products as soon as materials are avail
able. Approximately 300-400 persons will be em
ployed.
325,000,000 will be spent by Industrial Rayon
Corporation for construction of a new plant to pro
duce 30,000,000 pounds of rayon textile yarn annually.
It is expected to be located in the fourth district but
the exact plant site has not as yet been selected.
This company spent 320,000,000 during the war ex
panding and converting to the production of tire
yarns. Immediately preceding the war, its three plants
in Cleveland, Covington, and Painesville produced
38.000.000 pounds of textile yarns, of which 6,000,000
pounds were converted to cloth. During 1944, it
produced 28,000,000 pounds of textile yarn as well as
42.000.000 pounds of tire yarn. I t also converted
7.000.000 pounds of textile yarn into cloth.
THE MONTHLY BUSINESS REVIEW
A t Meadville, Pennsylvania, the American Viscose
Corporation will construct an acetate rayon plant.
The company is also planning to erect a new plant in
Radford, Virginia, and an addition to the Nitro, West
Virginia, plant. Altogether, production of rayon will
be increased by approximately 100,000,000 pounds.
Another expansion program in Meadville has been
announced by Talon, Inc. This company proposes to
spend #1>000,000 for new buildings and facilities.
The Krohler Manufacturing Company of Cleveland,
producers of furniture, will spend 31>200,000 in the
next twelve months for new machinery, equipment,
and plant facilities. Approximately 2,000 employees
will be added. The firm operates ten plants through
out the United States and Canada. The company
plans to spend approximately 3100,000 to erect a twostory building adjacent to its present Cleveland plant
which will increase its production about 30 percent.
Standard Oil of Ohio announced a two-year ex
pansion program to cost approximately 36,000,000.
The company plans to construct 80 modernistic
super-service stations and to modernize and enlarge
many of its older units. The new stations will be
one-third larger than the present Sohio outlets and
will use the present style porcelain fronts.
Other outstanding retailing developments include
the Wm. Taylor Son & Co. plans to spend #1>000,000
in a modernization and expansion program for their
Cleveland department store. In the same city Halle
Bros. Co., expects to erect a 32,000,000 structure on
the present site of their annex on Huron Road.
In the food field, Telling Belle Vernon Company,
subsidiary of National Dairy Products, will build a new
3300,000 processing plant in Cleveland. This ex
pansion will increase the milk processing capacity of
the company about 30 percent and will be operated
in addition to the company’s other plants. Jobs for
an additional 100 employees will be provided.
Tappan Stove Company of Mansfield, Ohio, is
planning a new 3600,000 plant at Murray, Kentucky.
In the northern part of the state, Winchester will get
a new clothing factory within the next 60 to 90 days
employing between 100 and 200 women workers.
The frozen food locker plant industry is experiencing
a tremendous growth in the fourth district. Since
September 1, plans have been completed for the erec
tion or expansion of locker plants in 17 different Ohio
communities. The projected plants will have from 300
to several thousand individual food lockers.
At Toledo, Ohio, The Buckeye Brewery Company
will spend 3500,000 to double the capacity of its plant.
Employment at the plant will increase from its present
level of 400 persons to about 500.
The Massillon Aluminum Company has purchased
the old Fort Pitt Bridge Works to produce a new line
of aluminum pressure sauce pans and stainless steel
cooking utensils. The company now employs 250
persons and it expects to triple this number when full
production is reached.
7
The Crowell-Collier Publishing Company plans an
immediate expansion of its Springfield, Ohio, plant
by adding a three-story building to house additional
mechanical equipment for the firm’s various publica
tions. I t is anticipated that the building will be in use
by June 1946. I t will cost approximately 31s000,000
and will necessitate an increase in personnel from 2,250
to 3,000.
In at least a half-dozen cities in the fourth district,
new firms have been created to fabricate metal storm
doors and windows, awnings, and combination storm
windows and screens. Nearly all of these companies
propose to use aluminum as their principal raw
material. Proposed employment ranges from a mere
handful to more than 600 people in each plant.
In addition to these major projects, there have been
scores of firms quietly launching major changes and
additions ranging from 35,000 to 375,000. Countless
small firms with an announced capital of 3500 and up
have also sprung into being to manufacture or market
a myriad of items or services. Some are being started
by returning veterans, others by ex-war workers who
have accumulated savings during the past three years.
The Reconstruction Finance Corporation is pushing
negotiations with great vigor to sell or lease the sur
plus plants under its jurisdiction in the fourth district.
To date, two Ohio war plants have been sold and
seven others leased for peacetime production. Negotia
tions are reported to be in progress for a large number
of other plants, but as yet official reports concerning
their success are lacking. Speedy release of these
facilities will give production and employment in the
district an additional impetus.
INDUSTRIAL SUMMARY
Reports received from nearly all types of business
enterprise throughout the district, indicate that con
cern over the many aspects of the labor problem is
taking precedence above all other management prob
lems. Interest is being focused on the matter from
several points of view.
Perhaps most prominent is the question of future
wage-price relationships. On the one hand there is a
strong demand for the maintenance of wartime “ takehome” rates of pay accompanied by a substantial
reduction in the number of hours of work. On the
other hand, the Office of Price Administration is at
tempting to hold prices at 1942 levels. Business man
agement is almost unanimous in stating that additional
labor costs cannot be absorbed while labor and
Government take the opposing view. I t appears that
some producers are marking time until higher
prices can be obtained.
Second, the right of supervisory employees to
organize and bargain collectively has become an acute
problem. At the moment, the coal, automobile, and
rubber industries have had production schedules dis
rupted in disputes over this matter. Established
policy on this point would go far toward preventing
further costly disputes on this controversial issue.
8
THE MONTHLY BUSINESS REVIEW
Third, there appears to be a shortage of unskilled
or common labor willing to work at prevailing wage
rates. This is particularly true in the iron foundries,
textile mills and needle trades, lumber mills and
forests, potteries, automobile parts manufacturers,
shoe factories, brass mills, glass manufacturers, ma
chine tool builders, and in nearly all of the service
trades. Curtailment of steel and coal production this
month has obscured temporarily the need for addi
tional men in these industries.
Fourth, there appears to be a shortage of skilled
labor in certain lines. A number of factors seem to
explain this condition: the elimination or curtailment
of apprentice training programs during the decade of
the 30’s, due to slack business conditions, the large
number of skilled men still in the Armed Forces, the
war-induced shift of men experienced in one line to
higher paying jobs in different fields of production,
and unprecedented expansion of production in certain
areas which requires more men than have heretofore
been employed. A number of large employers of labor
have indicated that plans are going forward to initiate
or expand training programs for employees as well
as to assist returning veterans to reacquire or gain
new skills. An additional problem has been created
by the fact that many returning veterans without
previous work experience have acquired families while
in the Armed Services. Many of these men are not
willing to accept the relatively low wages paid while
undergoing an extensive training program but demand
wage rates formerly paid only highly skilled and ex
perienced workers.
C oal
The eastern bituminous coal strike which began
September 21, completely upset the coal situa
tion which had looked so promising a few days earlier.
Although operations were resumed on October 22, the
Solid Fuels Administration estimated that over 16
million tons of coal had been lost during the strike.
A t the peak of the strike more than 200,000 miners
were off the job and some 1,000 mines were shut down.
The basic issue of the right of mine supervisors to
organize has not been settled.
The strike reduced the fuel supply at steel mills to
a critical point. “ Stand-by” supplies were drawn
down and it is feared they cannot be restocked this
winter. I t is estimated that about 30,000 steel workers
were “ furloughed” as the furnaces were forced to shut
down. Public utilities, large industrial users, schools
and others have also been seriously affected. On
October 18, the Solid Fuels Administration ordered an
acceleration in shipments of eastern mined bituminous
coal to upper Great Lakes dock operators so as to
meet commitments in full by November 17. Due to
manpower losses, scheduled shipments to the upper
lake dock operators are running behind schedule. It
is reported that 27 percent of 1945 contracts remains
to be forwarded with less than 20 percent of the
navigation season remaining in which to move coal.
Unless this schedule is met, extreme hardship may
result in regions largely dependent upon the lake
movement of coal.
Bituminous coal production in the fourth district
during September amounted to 17.5 million tons.
This brought the January 1 to September 29, 1945,
district total to 164.8 million tons compared to 178.4
million tons for the same 1944 period. National pro
duction from January 1 to September 29, amounted
to 437.8 million tons as compared to 471.6 million
tons for the 1944 period ending September 30.
Iro n a n d
The eastern soft coal strike further retarded the reconversion program. Metal
lurgical coke production was reduced to
a point where many blast furnaces were banked or
blown out and gas supply for open hearth furnaces
was curtailed. The estimated national rate of steel
production declined to 65 percent of ingot capacity as
compared to about 83 percent at the beginning of the
month. The change was not uniform throughout the
district. Youngstown and Pittsburgh areas at the
end of the strike were producing at the rate of about
50 percent, Wheeling 84 percent, and Cleveland 81
percent. Individual companies were hurt in some
instances more than other companies due to the un
evenness of the supply situation. One large producer
dropped to approximately 25 percent of capacity.
Steel
I t is estimated that it will take from ten days to
three weeks before the previous rate of production
can be attained due to the length of time required to
obtain a full flow of fuel to the mills and to get coke
ovens ready.
Heavy buying pressure has been felt in all lines of
steel with mill books filled well into 1946. Structural
steel needs have been increasing steadily despite a
shortage of drafting room employees in fabricating
plants which makes it difficult to figure on bids.
Sheets and carbon bars are in very short supply.
Pig iron production has also been reduced h eavily.
The situation did not affect foundries seriously, how
ever, since their labor supply is so short that the
industry is operating well below capacity. The cur
tailed rate of foundry output is being felt in many
other industries that are heavy users of gray iron
castings. In some instances, full output of washing
machines, farm equipment, vacuum cleaners, auto
mobile sub-assemblies, etc., is not being attained
because of this bottleneck.
Full ceiling prices are being paid for nearly all
grades of scrap and winter reserves have not been
accumulated.
Carnegie-Illinois Steel Corporation has further
spread the basing point system this month by estab
lishing Youngstown, Ohio, as a basing point for hot
rolled carbon steel bars and small shapes, alloy hot
rolled bars and spring steel flats, alloy bar strips as
well as alloy strips manufactured in the Youngstown
area. Pittsburgh was made a basing point for sales
in carload lots of ferro-manganese. Chicago and
Pittsburgh were made basing points for Spiegeleisen.
This development together with the recent change in
stainless steels may be the beginning of a widespread
movement toward a broader multiple basing point
system and result in a redefining of competitive market
areas for steel producers.
THE MONTHLY BUSINESS REVIEW
9
AGRICULTURE
Deficiency
M any Ohio Counties applied less lime
A n n lW tio
n s inl 1944 than
is . re<luired
to replace
AUpilvM
llUIlo
1 1 1
.
l
the annual loss due to crop removal,
leaching and erosion. Despite the fact
that the 1.8 million tons of lime applied to Ohio crop
land and pasture land last year was the largest re
ported usage on record, it still fell short of the current
replacement need.
Lime applications in 1944 exceeded the estimated
annual loss in only 23 of Ohio’s 88 counties. In three
of those counties, Ashtabula, Clermont, and Marion,
applications barely went beyond mere replacement
needs. Before definite progress can be made toward
maintaining the productivity of Ohio soils, lime appli
cations must be increased to a point where they
appreciably exceed the annual loss due to the effects
of crop removal, leaching, and erosion.
Lime supplies the essential elements of calcium and
magnesium. In addition to making up a part of the
plant’s nutrients, these elements neutralize the acidity
of the soil, thereby making soil conditions more favor-
DEFICIENCY IN LIME APPLICATIONS
FOR ANNUAL REPLACEMENT NEEDS*
- 1 9 4 4 -
able to plant growth. Not until annual deposits of
lime on the soil exceed the annual withdrawal, can the
total deposits of these two elements be increased in
the cropland and pasture land soils of the state.
The deficiencies indicated in the map below are
based on data assembled by the agronomy depart
ments of the Ohio State University and the Ohio
Agricultural Experiment Station. It is interesting to
note that the area of greatest deficiency in annual
application of lime is in Western Ohio. Here the soils
are naturally less acid than those of Eastern Ohio.
Nevertheless, the farmers in many of the Eastern
Ohio counties, where large per-acre applications are
required, have made annual applications which more
nearly equal the annual losses.
The annual lime requirement has been computed on
the basis of applying one ton of lime each five years
on the cropland, and one ton each eight years on the
pasture land. Research work and field experience of
the Ohio agronomists indicate that these rates of
application represent the minimum amounts of lime
required to replace the yearly losses.
Lime applications are necessary on most Ohio soils
for the satisfactory growth of legume-grass hay mix
tures and clover-bluegrass pasture mixtures. Both
of these forage crops are important in the maintenance
of soil productivity and the reduction of soil erosion. In
fact, agronomists and many successful farmers con
sider hay the most important crop in the rotation.
They have found that adequate liming and fertilization
of the hay crop definitely improves the yields of the
crops that follow. Further, they have observed that
the farmer who has an abundance of high quality hay,
and productive pasture throughout the year, generally,
has a better-than-average farm income.
The maintenance of soil productivity on vegetable
garden and fruit soils is of necessity cared for in a
different way. Even so, successful operators have
found that lime applications are essential on acid soils
for satisfactory crop yields and soil maintenance. In
view of the above facts, it would seem that lime appli
cations should have increased rapidly.
*W hile the counties shown in black applied sufficient lime in
1944 to replace th at year’s loss, this is not to be construed as
evidence th at lime requirements for satisfactory crop and pasture
growth on the soils of those counties were fully met. There are
considerable acreages in each of these counties th a t need more
lime for optim um growth of legumes and legume-grass mixtures.
Source:
D a ta assembled by_ agronomy departments, Ohio State
University and Ohio Agricultural Experiment Station.
No appreciable increase occurred in the last fifteen
years until 1939, when the conservation materials
program of the Agricultural Adjustment Administra
tion became effective. Thereafter lime applications in
Ohio increased steadily until the high point of 1.8
million tons was reached last year. This total ex
ceeded any previous application by over 250,000 tons.
On the basis of preliminary information, this record
will not be exceeded in 1945. Labor and transporta
tion shortages plus heavy rainfall during September
— a month of heavy application— all served to reduce
the tonnage of lime applied this year.
10
THE MONTHLY BUSINESS REVIEW
Potential
Lime Needs
Comparing the present annual lime
application to the total annual need,
it is apparent that applications would
need to be trebled in Ohio. Total lime need, in this
case, represents the amount of lime required for re
placement plus the lime needed for an initial applica
tion of ten percent of the cropland and pasture land
acreage needing lime for satisfactory crop growth.
Labor and transportation shortages during the past
two or three years have limited the amount of lime
spread. These shortages can be overcome in due time,
provided interested individuals in cooperation with
their county agricultural agent and other agricultural
workers sit down together and work out a solution to
the problem of getting more lime applied. Warranting
consideration are such questions as:
1. Would a lime spreading service aid in increasing
applications?
2. Would more work by local lime representatives
help ?
3. Would the establishment of stockpiles promote
more extensive use of lime?
Much could be accomplished, in the opinion of Ohio
agronomists, by extending the period of lime applica
tions over a longer period of the year. The present
practice is to apply lime either in the Spring or Fall
when small grains are sown. Both of these periods are
peak labor seasons on the farm. As a result, areas
limed are limited by the time available. To avoid this
problem, it is suggested that lime be applied to
meadows and pastures whenever the ground is firm
enough to permit spreading. This would also serve to
level out the peak demands on lime producers and
transporters that have plagued them recently during
the Spring and early Fall.
While favorable farm incomes now may permit pur
chase of lime out of current receipts, the time may
come when loans for soil improvement will be needed.
M any of the banks serving rural areas are now pre
pared to meet this situation when it arises. They will
be ready to make loans over such periods of time as
will permit repayment of the loan from receipts from
the crops produced on the limed soils. This plus an
increasing supply of labor and equipment released by
reconversion should add impetus to this fundamental
treatment of Ohio soils.
A G R IC U L T U R E C R O P P R O D U C T IO N
The indicated production of every major crop in
the fourth district, except tobacco, exceeded last
year’s total. Furthermore, in nearly every instance,
production was measurably above the 1940-44 average
which was a period of excellent crop yields. The
largest percentage gain (51%) over the five-year aver
age was shown by the wheat crop.
The impressive contribution by farmers of the fourth
district to the food production program was disclosed
by the October 1 crop report:
ESTIMATED PRODUCTION OF MAJOR CROPS IN
THE FOURTH DISTRICT DURING 1945
W heat (bu.)
Tobacco (lbs.)
Oats (bu.)
Soybeans* (bu.)
Corn (bu.)
H ay (ton)
Potatoes (bu.)
* Ohio only.
1945
Estimated
Production
(millions of
units)
Actual 1944
Production
(millions of
units)
% — 1945
Estim ated
Production is
of 1940-44
Average
68.2
147.4
63.6
22.6
220.6
5.6
14.3
52.9
158.9
47.1
22.5
181.2
5.0
11.8
151
121
119
116
112
104
92
It is evident from the crop estimates reported above
that feed supplies in the fourth district will be above
average this year. Kentucky reports a much brighter
feed situation with a 77 million bushel corn crop this
year compared to a 67 million bushel crop last year.
In Ohio a large corn crop plus stocks of oats, barley,
rye and buckwheat will total about 6 million tons of
feed grain. This is about one ton for each grain
consuming animal unit in Ohio, or about 25 percent
more than last year and 9 percent above average.
While reports from the remaining parts of the district
are less favorable, adequate feed supplies are in pros
pect.
Tobacco production in the district is down from
last year but this year’s total is 21 percent better than
the average for the previous five years. Potatoes were
the only crop to fall below the five-year average,
chiefly because of subnormal results in Pennsylvania
and Ohio.
Current Financial Trends
(Continued from Page 3)
of a sizable geographical shift of funds away from
centers enjoying the greatest wartime growth, such a
trend should first manifest itself in outlying weekly
reporting banks.
A final factor contributing to the relatively slow
recovery of demand deposits in this reserve district
is the comparatively large increment in time deposits.
O f the 3259 million increase in combined time and
demand deposits, indicated in the tabulation discussed
earlier, over 30 percent emerged in the form of time
deposits, whereas in New York City only about five
percent of the increase moved into that category.
While demand deposits are traditionally considered
to be the more volatile and active type of deposit, a
more significant distinction under present conditions
is the relative effect of depositors’ decisions (as to
time or demand) upon reserve requirements of the
receiving banks.
THE MONTHLY BUSINESS REVIEW
11
DEPARTMENT STORE STOCKS
Two important revisions were made recently in the
index of fourth district department store stocks. These
changes consisted of the addition of several stores not
included in the old index and the revision of the
factors used to adjust the index for seasonal variation.
Enlargement
of Sample
A rather important deficiency in the
previous index was the fact that the
group of stores reporting stocks was
less representative of all department stores than the
group included in the sales index. The sales index is
based on reports from 97 fourth district stores, where
as the stocks index had been compiled from reports
submitted by only 51 stores. Thus, changes in
merchandise inventories of a number of smaller retail
outlets and of the major chain department stores were
not reflected in the old series. By introducing into
the index the experience of additional stores, the
trends of the sales and stocks indexes may be com
pared with greater accuracy.
Revision of
Seasonal Factors
The seasonal factors for the entire
period from 1919 also were re
vised, although these changes
were relatively small except in recent years. The
factors for several months of the war years were
altered considerably, largely as a result of the changed
buying habits of both retailers and consumers. This
was particularly true of the pre-Christmas season —
the factors for July, August, September, and October
were increased, while those for November and De
cember were revised downward by several points.
During the past several years merchants have been
building up their stocks of fall and holiday goods
much earlier than had been their custom prior to the
war, as a precaution against potential shortages during
the peak season and also to meet consumer demand
for Christmas gifts for overseas shipment. Customers,
likewise, were fearful of merchandise shortages and in
many cases were buying articles far in advance of
actual need. The seasonal factors for January, April,
and M ay were changed only slightly, while the relative
importance of February and March declined.
The new seasonally adjusted index from 1919
is shown on the accompanying chart. Tabulations of
the monthly index numbers, both unadjusted and
adjusted, may be obtained from the Research De
partment, Federal Reserve Bank of Cleveland.
Effect of
Price Changes
In discussing any stocks series based
on retail dollar value, consideration
should be given to the fact that
changes in the price level affect the movement of the
index and that, as a result, changes in the dollar
volume of stocks do not necessarily indicate similar
changes in physical inventory. This was particularly
true in recent years, when the general price level of
department store merchandise increased consider
ably, through upgrading in many lines, through
introduction of new articles, particularly in the luxury
class, and by the absence of many lower-priced items.
Despite price ceilings, customers and merchants alike
have had to pay more for merchandise than they did
before the war. This fact has inflated the dollar
volume of both sales and stocks.
12
THE MONTHLY BUSINESS REVIEW
Stocks After
World War I
Following World War I, there was a
very sharp increase in the stocks in
dex, with the price inflation of that
period as an important contributing factor. The peak
which was established in October 1920 held the record
for over two decades. I t was not exceeded until about
the time that the United States entered War II.
During the postwar depression of 1920, stocks were
reduced substantially, and it was not until 1923 that
fourth district merchants increased their inventories
to any great degree. From 1924 through 1929, the
adjusted index remained at an exceptionally constant
level, which, however, was some 30 to 40 percent
above the base period. Subsequently after the crash
of 1929 and during the ensuing business depression,
retailers liquidated their stocks drastically, and by
early 1933 the index had dropped to the lowest point
on record. Later that summer there occurred con
siderable stock-building by merchants in anticipation
of the N R A ’s avowed policy of raising prices.
Trend
Since 1933
During 1934 and 1935 the index showed
little variation, but during the next two
years there was a rather steady increase.
Merchants were carrying heavier stocks to meet an
increased consumer demand— both sales and stocks
during 1936 and 1937 were the largest in six years—
and as protection against a persistent rise in prices.
After a moderate decline during the recession of 1938,
stocks pursued an irregular but slowly rising trend
until 1941. By that time, the implications of the
national defense program and its possible consequences
upon domestic and international affairs prompted
most merchants to make substantial additions to their
stocks, since they were already fearful of merchandise
shortages. This increase in stocks exceeded the former
(1920) record in October 1941 and, without losing
momentum, finally established an all-time high in
June of 1942. During the 18 months from January 1,
1941, through June 1942 department stores in the
fourth district increased their dollar stocks by ap
proximately 115 percent.
Wartime
Restrictions
During the latter half of 1942, however, inventories were reduced sharply,
as a result of an exceptionally large
volume of sales, increasing difficulty in obtaining
goods, and anticipation of Governmental restrictions
on stocks. War Production Board order L-219, re
stricting inventories of consumer goods, became fully
effective by M ay 1, 1943. This limitation did not
prove to be a hardship for most stores in the fourth
district, since only a very few had stocks in excess of
their respective limits as established by the W PB
regulation.
From mid-1943 until early this year, the adjusted
index averaged approximately 50 percent above the
base period. During last M ay and June there was a
sharp advance to 173 percent, which represented the
highest point in nearly three years. Apparently stores
found it possible to replenish stocks even under con
ditions of shortages and record-high dollar sales.
Postwar
Trend
The end of the war probably contributed
to the small decline in the index during
the past several months, although mer
chants are making no special effort to reduce their
total store stocks. In fact, on an unadjusted basis,
stocks have increased steadily since the first of this
year. While retailers are closing out certain lines of
war-quality goods, no over-all liquidation is expected
and stores in general are still attempting to obtain as
much merchandise as possible. However, buyers are
exercising a greater degree of caution in their pur
chases and are placing greater emphasis on quality.
Both merchants and their customers are becoming
more selective.
On September 30, the latest available date, dollar
stocks at fourth district department stores were up 6
percent compared with the same date a year ago.
The ratio of stocks to sales on that date was 2.7 per
cent, indicating that stores had enough merchandise
on hand at that time to last over 2 j^ months, based
on September sales volume. This compares with 2.6
on September 30 last year and 3.0 two years ago.
These ratios for 1939 through 1945 are listed in the
accompanying table.
STOCKS-SALES RATIOS
Fourth District Department Stores
Ratio of end-of-month stocks to sales during the month
. ...
February......... , . . .
...
A p r il............... . . . .
....
....
J u l y ................. . . . .
....
September. . . . . . .
...
Novem ber. . . . . . .
December. . . . . . .
1939
3.4
3.6
3.0
2.8
2.7
2.8
3.6
3.1
2.8
2.8
2.9
1.4
Departmental
Comparisons
1940
3.3
3.6
3.1
2.9
2.7
2.6
3.3
2.8
2.8
2.9
2.7
1.4
1941
3.1
3.3
2.9
2.4
2.5
2.7
3.3
2.7
2.9
3.6
3.3
1.7
1942
2.9
3.9
3.3
3.6
4.5
4.6
5.6
4.3
3.7
3.2
3.0
1.6
1943
3.1
2.6
2.6
2.4
2.6
2.5
3.3
3.1
3.0
2.7
2.3
1.5
1944
3.1
3.3
2.5
2.7
2.4
2.8
3.2
2.8
2.6
2.4
2.0
1.2
1945
2.6
2.7
1.9
2.8
2.7
2.6
3.1
2.9
2.7
The year-to-year changes in stocks
carried by different departments at
the end of September 1945 showed
considerable variation. Men’s clothing departments
had 27 percent less merchandise, and returning service
men are finding it difficult to obtain suits and coats.
It is reported that sales of these items are far exceed
ing receipts of new merchandise. Total housefurnishings stocks were slightly larger this year than last,
with certain divisions such as furniture, lamps, and
housewares reporting sizable increases, while depart
ments selling floor coverings and domestics had
smaller inventories. Stocks of women’s coats and
suits were up 2 percent over September 30, 1944,
juniors’ and girls’ wear 16 percent, and infants’ wear
31 percent. Departments featuring shoes, hosiery, un
derwear, dresses, and piece goods reported year-toyear declines in their inventories.
THE MONTHLY BUSINESS REVIEW
Wholesale and Retail Trade
Fourth District Business Statistics
(1945 com pared w ith 1944)
(000 o m itted )
Percentage
Increase or Decrease
SALES SALES STOCKS
Sept.
first 9
Sept.
1945
m onths
1944
D E P A R T M E N T S T O R E S (97)
A k r o n ...........................................................................
C a n to n .........................................................................
C in c in n a ti...................................................................
C le v e la n d ....................................................................
C o lu m b u s ....................................................................
E rie ...............................................................................
P itts b u rg h ..................................................................
S pringfield...................................................................
T oledo..........................................................................
W h e elin g .....................................................................
Y o u n g sto w n ...............................................................
Other C itie s ...............................................................
D is tric t........................................................................
W E A R I N G A P P A R E L (17)
C a n to n ....................................: ..................................
C in c in n a ti...................................................................
C le v e la n d ....................................................................
P itts b u rg h ..................................................................
O ther C ities................................................................
D is tr ic t........................................................................
F U R N I T U R E (75)
C a n t o n .........................................................................
C in c in n a ti...................................................................
C lev e lan d....................................................................
C o lu m b u s ....................................................................
D a y t o n ........................................................................
P itts b u rg h ..................................................................
A llegheny C o u n ty ....................................................
T oledo..........................................................................
O ther C itie s................................................................
D is tr ic t........................................................................
C H A IN S T O R E S *
Drugs— D istrict ( 5 ) .................................................
Groceries— D istrict (4 )..........................................
W H O LESA LE T RA D E **
A uto m o tive Supplies ( 6 ) ........................................
Beer ( 6 ) .......................................................................
C lo th in g and Furnishings ( 3 ) ...............................
Confectionery ( 3 ) .....................................................
Drugs and D ru g Sundries (3 )...............................
Electrical Goods ( 7 ) .................................................
Fresh Fruits and Vegetables ( 9 ) ..........................
F urniture & House Furnishings ( 3 ) ....................
Grocery G ro up (3 8 ).................................................
T otal Hardw are G ro up (2 0 )..................................
General Hardware ( 5 ) .........................................
In d u stria l Supplies (7 ) . . . . ; .............................
P lu m b ing & H eating Supplies ( 8 ) ...................
Jewelry (1 0 )............................ . ................................
Lu m ber and B uildin g M aterials ( 5 ) ...................
M achinery, E q u ip . & Sup. (E xcept Elec.) (5)
M etals ( 3 ) ...................................................................
P aints and Varnishes (4 ).......................................
Paper and Its Products ( 5 ) ...................................
Tobacco and Its Products (1 7 )............................
Miscellaneous (1 5 )...................................................
District— A ll Wholesale Trade (168)..................
— 5
—12
+ 4
— 3
+ 6
— 4
+ 2
— 3
— 4
+ 5
+ 1
— 2
—Q— 3
+ 4
+ 3
+ 4
+5
+ 3
+ 3
+ 3
— 9
+22
4-12
4" 7
— 2
— 4
+10
+ 4
— 5
— 2
+20
-0— 3
— 5
— 6
—0— 3
+ 8
— 8
—0+14
— 12
— 8
+13
— 3
— 19
-37
+ 3
— 5
+ 4
— 17
— 7
+10
+5
+13
+15
+5
+10
+6
+9
+16
+16
+ 4
+ 10
+10
+8
+ 7
+6
+10
+10
-
0-
- 29
+9
+ 12
++1011
+5
+11
0
0
+ 7
+6
+5
0
+ 7
+5
+3
+8
+ 18
-
8
2
—0—
- 7
-
-
-
-
+ 17
+21
+19
+28
-
-
+I
-
+ 14
4
a
+ 11a
+ 19a
+2
-1 1
+ 7
a
- 4
+ 4
2
+23
10
+5
+2
+ 4
- 1
-0- 7
+2
- 7
- 4
Sept.
1943
190
12
9
105
199
164
162
a
a
140
93
180
83
210
9
5
101
191
174
168
67
34
153
83
197
84
231
3
2
99
168
164
152
76
96
156
121
192
85
+ 3
917,368
+ 10
380,336
18,747
24,716
+ 10
4-10
+5
1,638
44
+ 38
—25
42,430
61,887
— 8
164,812
4,427b
— 8
+ 7
23,843b
+
38,438
— 9
1
(T housands o f D ollars)
C a n to n ......................
C in c in n a ti.................
G reensburg...............
Hom este ad................
M id d le to w n .............
P itts b u rg h ................
P o rts m o u th ..............
S prin gfield................
S te ub e nv ille .............
Youngstow n .............
Sept.
% C hange Jan.-Sept. Jan.-Sept. % Change
1945
from 1944
1945
1944
from 1944
170,465
1,798,215
- 4.8
1,625,764
+ 10.6
18,479
- 0.4
190,392
159,791
+19.2
68,805
- 16 .5
748,368
740,294
+ 1.1
580,375
- 2.8
5,803,255
5,461,597
+ 6.3
1,176,128
- 1 1 .6
12,102,052 11,850,549
+ 2.1
328,829
+ 9.5
3,074,019
2,862,946
+ 7.4
26,160
+ 9.5
238,316
222,530
+ 7.1
133,951
- 6.1
1,337,484
1,295,728
+ 3.2
54,719
- 1 7 .2
550,107
576,497
- 4.6
6,259
- 0.7
54,352
55,067
- 1.3
12,029
- 4.2
114,642
110,831
+ 3.4
20,853
+ 1.9
210,077
181,999
+ 15.4
5,105
+ 4.9
46,964
44,677
+ 5.1
33,539
+15.5
430,108
326,513
+31.7
24,923
- 14 .8
257,904
245,892
+ 4.9
9,634
+ 14.0
82,292
78,135
+ 5-3
22,849
+ 0.9
211,362
191,475
+ 10.4
18,506
- 2.0
178,359
178,886
- 0.3
15,543
- 3.9
146,767
138,350
+ 6.1
1,123,581
- 15 .5
11,938,163 11,911,784
+ 0.2
13.297
+ 9.2
113,037
103,314
+ 9.4
15,202
- 6.4
154,043
151,474
+ 1.7
29,923
- 11 .5
293,688
294,463
- 0.3
15,904
144,253
123,407
+ 10.6
+ 16.9
219,528
- 16 .5
2,221,145
2,408,494
- 7.8
21,343
- 8.1
217,169
217,979
- 0.4
40,540
- 4.0
397,356
385,402
+ 3.1
86.163
- 3.7
791,188
775,947
+ 2.0
15,487
+ 18.8
126,641
116,901
+ 8.3
4,308,119
- 9.2
43,971,718 42,836,686
+ 2.6
D a ily Average for 1935-39 =» 100
(1935-39 - 100)
Sept.
1944
43,140,000
Indexes of Department Store Sales and Stocks
Fourth District Business Indexes
Sept.
1945
% change
from 1944
Debits to Individual Accounts
+
-35
+ 16
% change Jan.-Sept.
from 1944
1945
a A ugust,
b January- A ugust.
C ovington-New port
+40
-17
a
+ 4
Sept.
1945
B ank Debits— 24 cities................... ?4,219,000
- 9
Savings Deposits— end o f m o nth :
39 banks O. and W . Pa.............. 31,351,285
+ 24
Life Insurance Sales:
O hio and Pa................................... $ 88,294
+ 3
R etail Sales:
D ept. Stores— 97 firm s................
44,817
-0W earing A pparel— 17 firm s____ $
2,332
+3
Furniture— 75 firm s..................... $
2,758
4-4
Com m ercial Failures—
L ia b ilitie s........................................ $
138 + 106
N u m b e r ...........................................
8
+33
Production:
Pig Iro n — U . S..............N e t tons
4,227
Steel In g o t— U. S.........N e t tons
6,008
— 17
B itu m in ou s C oal—
O ., W . Pa., E . K y . . . N e t tons
17,526
— 9
C em ent—
O ., W . Pa., W . V a ...........Bbls.
767a
+ 12
Electric Power—
O ., Pa., K y .. .T hous. K .W .H .
2,748a
— 8
B itu m in o u s C oal Shipm ents
Lake Erie p o rts ............N e t tons
6,920
+ 2
+14
+18
* Per in d iv id u a l u n it operated.
♦♦Wholesale da ta com piled by U . S. D epa rtm en t o f Comm erce, Bureau of
the Census,
a N o t available.
Figures in parentheses indicate n um ber o f firms reporting sales.
B ank D ebits (24 citie s)........................................
C om m ercial Failures (N u m b e r ).........................
”
”
(L ia b ilitie s )......................
Sales— Life Insurance (O . and P a .)..................
” — D epartm ent Stores (97 firm s )..............
” — C hain Drugs (5 firm s)*..........................
” — C hain Groceries (4 firm s )......................
B uildin g Contracts — (T o ta l).............................
”
”
— (R e s id e n tia l)..................
P roduction— Coal (O ., W . Pa., E. K y .) ..........
— Cem ent (O ., W . Pa., E. K y .)* *
”
— Electric Power (O ., Pa., K y .)* *
”
— Shoes.................................................
* Per in d iv id u a l u n it operated.
**A ug u st
a N o t available.
Fourth D istrict Unless
Otherwise Specified
Sept. Sept.
1942 1941
172
51
26
71
162
148
143
204
109
149
184
166
96
148
61
34
102
156
127
121
192
282
144
193
151
11^
W ith o u t
Seasonal A d ju s tm e n t
Sept.
Aug.
Sept.
1945
1945
1944
SALES:
Akron ( 6 ) ....................
219
C anton ( 5 ) ..................
222
C incin nati ( 9 )............
211
Cleveland (1 0 )..........
185
C olum bus ( 5 ) ............
242
211
Erie ( 3 ) .......................
Pittsburgh (8) ...........
183
Springfield ( 3 ) ...........
232
Toledo ( 6 ) ...................
196
W heeling ( 6 ) ..............
184
219
Youngstow n (3) . . . .
D istrict (9 7 )..............
199
STOCKS:
171
D is tr ic t* ......................
* Revised series. See page 11
A d ju ste d for
Seasonal V ariation
Sept.
Aug.
Sept.
1945
1945
1944
192
208
170
153
200
169
151
195
165
145
190
165
222
244
195
183
218
211
172
229
197
169
208
191
215
225
207
162
242
213
180
234
189
179
213
187
226
236
203
172
235
197
173
238
197
180
208
189
218
246
191
161
218
213
169
231
189
164
202
180
169
164
153
156
148
THE MONTHLY BUSINESS REVIEW
Summary of National Business Conditions and District Tables
By the Board of Governors of the Federal Reserve System
Output and employment at factories producing war
products declined further in September but production
and incomes in most other sectors of the economy
were maintained or increased somewhat. Retail
buying in September and the first half of October con
tinued above year ago levels.
INDUSTRIAL PRODUCTION
Industrial production declined eight percent in
September, reflecting mainly the continued rapid
liquidation of output for war purposes, and the
Board’s seasonally adjusted index was 172 percent of
the 1935-39 average as compared with 187 in August
and 210 in July.
Reduced activity in the machinery and transporta
tion equipment industries continued to account for
most of the decline in the total index. Output in these
industries during September was about one-fifth
below the August average and one-half of the rate of
the beginning of the year. Steel production, on the
other hand, was five percent larger in September than
in August. In the first three weeks of October, how
ever, steel mill operations declined substantially owing
largely to a temporary reduction in coal supplies.
Output of nonferrous metals, lumber, and stone,
clay and glass products decreased somewhat in Sep
tember.
Production of nondurable goods, as a group,
showed little change in September, as further reduc
tions in output of war products in the chemical,
petroleum, and rubber products industries were off
set by increases in output of most civilian-type
products. Output of textile yarns and fabrics, shoes,
meats, beverages, cigarettes, and paper products in
creased.
Output of minerals declined in September due
mainly to an eight percent decrease in crude petro
leum production. Coal production increased in Sep
tember but in the first three weeks of October dropped
sharply as a result of work interruptions at bituminous
coal mines.
Contracts awarded for private construction, accord
ing to the F. W. Dodge Corporation, increased further
in September, reflecting the largest volume of awards
for nonresidential building in many years. Private
residential awards showed little change and publiclyfinanced construction declined further.
EMPLOYMENT
Employment at factories showed a decline of about
600,000 during the month of September, as compared
to a decrease of 1,600,000 workers during August,
reflecting a much smaller reduction of munitions em
ployment in September and some increases in other
industries. Employment in most nonmanufacturing
lines, except Government service, was maintained or
increased slightly, after allowing for seasonal changes.
DISTRIBUTION
Department store sales in September showed about
the usual sharp seasonal increase and the Board’s ad
justed index was 199 percent of the 1935-39 average.
This was at the same high level as the average for
the first half of 1945 and was seven percent above
that for September 1944. In the first two weeks of
October sales were eleven percent larger than in the
corresponding period last year.
The total volume of railroad revenue freight was
maintained in September at the August rate and was
only eight percent lower than last year’s high level.
In the early part of October shipments of coal and
coke declined substantially as a result of the drop in
coal production.
COMMODITY PRICES
Prices of cotton, grains, and most other farm
products increased somewhat from the middle of
September to the middle of October, following de
creases in the previous six weeks. Price of most in
dustrial products continued to be maintained at
Federal maximum levels.
BANK CREDIT
Rising reserve requirements, resulting from ex
panded deposits of businesses and individuals, and an
increase in currency in circulation accounted for con
tinuing needs for reserve funds by banks between the
middle of September and the middle of October.
These needs were supplied through decreases in
Treasury and nonmember deposits at Federal reserve
banks. The amount of reserve bank credit outstanding
showed little change in the period. Money in circula
tion increased by 175 million dollars during the four
weeks ended October 17; this was a smaller growth
than has been customary in recent years reflecting
in part some currency inflow following the midSeptember tax date.
Holdings of Government
securities and member bank borrowing at the reserve
banks increased fairly substantially in the latter part
of September concurrent with a temporary rise in
Treasury deposits, but both were later reduced. This
reduction in security holdings was in Treasury bills
and accompanied an increase in member bank hold
ings of bills.
At reporting banks in 101 leading cities loans for
purchasing and carrying Government securities de
clined by 550 million dollars during the four weeks
ended October 17; commercial loans increased some
what, and holdings of securities showed little change
in the aggregate. Loans on Government securities
remained well above amounts outstanding immediately
prior to the Seventh War Loan.
@FedFRASER