The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
Busin
Finance, Industry,
Agriculture, and Trade
Fourth Federal Reserve District
Federal Reserve Bank of Cleveland
Cleveland, Ohio, November 1, 1946
Vol. 28
No. 11
DEPARTMENT STORE INVENTORIES
The reappearance o f January clearance sales on a
scale reminiscent o f prewar times is definitely within
the realm o f probabilites. The widely-heralded
accumulation o f inventories has not been confined to
manufacturers and wholesalers. It has also spilled
over into retail trade.
It is true that during the next sixty days depart
ment store stocks should recede noticeably under the
impact o f holiday trade. During each o f the past
four years, the out-movement o f merchandise during
the November-December buying wave was large
enough to cancel all earlier accumulations. But there
is nothing in sight to suggest that a similar reduction
will be repeated this season.
There has been no slackening in sales volume.
Except for a few localities where power and trans
portation tie-ups impeded business, October trade
was the best on record and by a considerable margin.
For example, during the first four weeks o f October,
sales in such Fourth District cities as Akron, Cincin
nati, Cleveland, and Toledo ran 22 percent ahead o f
last year’s volume which was probably sufficient to
reduce stocks appreciably. But a 22 percent margin
over last year is not enough this fall and winter.
Inventories
Up 80% Since
January
The simple fact is that at the beginning of the current season stocks
were 80% higher than last January.
As shown on the accompanying
chart, department stores lost no time in inaugurating
their restocking program after a record Christmas
trade in 1945. Inventories began to move up imme
diately. There are probably few, if any, precedents
for that sustained replenishment drive. By July 31
the dollar figure was in record-high ground (over 1942)
but the upward movement continued in high gear—
perhaps into October.
The fact that prevailing unit prices are higher than
in earlier years is a partial explanation, but not a
comfortable one. It only introduces a new uncer
tainty. I f much o f the 1946 increase is merely a price
phenomenon, the merchandising problem simply takes
on a different hue.
DEPARTMENT STORE INVENTORIES
Fourth District
(1941 Monthly Average = 100)
— MAIN STORE —
^
HOUSEWARES and MEN’ S CLOTHING
------'
J
n
J\
r
H O U S EW AR E
A/
/
rA
Digitized 1941 FRASER
for
1942
1943
1944
1945
1946
S/
f \
l r \
/
r
1947
M E N ’S
1941
1942
1943
1944
C L O TH IN C
1945
\
1946
1947
November 1, 1946
MONTHLY BUSINESS REVIEW
2
During the past nine or ten months many manufac
turers have been shipping merchandise to department
stores at a rate noticeably in excess o f consumption.
The process has probably been reversed as it usually
is during November and December. But if Christmas
trade fails to make substantial inroads upon accumu
lated stocks, purchasing by department stores may be
less spirited than last spring.
Disparities
Among
Departments
N ot all categories o f merchandise are
in an equally vulnerable position.
Some substantial inventory increases
appear to have been quite con
sistent with current sales volume. Housewares are an
example. Aggregate inventories o f pots and pans,
cutlery, toasters, hardware and enamelware, et cetera,
are perhaps 80 percent higher than last fall, but sales
are up by about the same percentage. The long war
time scarcity o f many o f these items probably has left
quite a gap to be filled.
The men’ s clothing department is another which
has no excess inventory troubles. That stocks could
be twice as large with immunity scarcely requires
statistical proof. Currently, supplies o f men’ s cloth
ing are only about one-half the late 1942 figure when
many potential customers were leaving the market.
This is one department in which further restocking
would be a salutary development.
There appears to be, however, as much unbalance
in department store inventories as there is reputed to
be among manufacturers. But the reasons are not
identical. Here it is not a case o f waiting for com
ponent parts. It was not a lack o f buttons, pockets,
or linings that has caused some classes o f merchandise
to pile up higher than ever in retail outlets.
Women’s Wear
Inventories
At first glance, the supply o f
women’ s and misses’ dresses dqes
not appear far out o f line even
though stocks on hand are more than double the 1941
monthly average. Supplies are lower than last spring
and the spring before. The fact is, though, that
during September (latest data available) the number
o f dresses and gowns sold was no larger than a year
earlier,whereas at the beginning o f the month stocks
were up 48 percent for the year. The racks are loaded
much more heavily than at this time last year and
before long room will be needed for new garments.
Women’ s and misses’ coats and suits usually move
out o f the stores, on balance, during the last three
months o f the year. Undoubtedly they will this
year, but September sales volume was none too promis
ing. Sales were only 13 percent greater than last year,
whereas in the preceding month the year-to-year
margin was as much as 58 percent. Unless receipts
are sharply reduced, and sales are unexpectedly good,
stocks by February will be substantially higher than
ever before at the beginning o f the spring season.
Juniors’ and girls’ wear inventories are probably
past their 1946 peak but only a record-breaking
volume o f sales will make a dent in supplies on hand.
At the end o f July stocks in this apparel line were
345,000 for each 310,000 on hand at the same time
in 1941, and about 30 percent higher than last year.
But sales in September were only 3 percent greater
than in 1945. That situation is not conducive to
further inventory accumulation unless or until sales
catch up.
O f all major departments the greatest disparity
exists in the blouse-skirt-sportswear department. At
the end o f May, stocks o f this type o f merchandise were
more than four times as large as in M ay 1941 when
business was hardly in a depressed state. A more-orless seasonal reduction has been underway since May,
but a long stretch remains to be covered, if stocks are
{Please turn to Page 10)
DEPARTMENT STORE INVENTORIES
Fourth District
(1941 M onthly Average = 100)
Women’s and Misses’ coats and suits; Blouses, skirts,
Juniors' and Girls’ wear; Women’s and Misses’ dresses
knitgoods, sportswear
PERCEN T
BLO USES,
ETC.
1947
1942
1943
1944
1945
1946
November 1, 1946
3
MONTHLY BUSINESS REVIEW
RECENT BANKING DEVELOPMENTS
During the first three quarters of 1946 the tempo
o f business activity mounted as reconversion to a
peacetime economy progressed. Industrial produc
tion and department store sales in the second quarter
exceeded the first quarter average and further sub
stantial gains were recorded during the third quarter.
Manufacturers’ inventories and department store
stocks attained progressively higher levels in succeed
ing quarterly periods. The wholesale price level and
prices o f consumers’ goods and services likewise ad
vanced, with particularly sharp increases occurring
during the third quarter.
Increases in Business Activity, Inventories, and Prices
First Quarter 1946= 100
First |
Second
Third
Quarter
Quarter Quarter
Industrial Production ( 1 ) ............
100
103
110
M anufacturers’ Inventories (2). .
100
102
110*
Departm ent Store Sales ( 3 ) .........
100
110
113
D epartm ent Store Stocks (4 ). . . • 100
117
130
Consumers’ Price In d e x................
100
102
110*
Wholesale Prices.............................
100
103
117
(1) Seasonally adjusted.
(2) Quarterly Average
(3) Fourth District only, seasonally adjusted.
(4) Fourth District only, seasonally adjusted, quarterly average.
(* ) Based on July and August data only.
Parallel developments may be noted in the field of
banking and finance. For example, demand deposits,
bank debits, and commercial loans have all regis
tered sizable increases, partly in response to sharp
advances in prices and partly as a result o f the above
described acceleration in general business. But the
casual relationship was not a one way street, since
financial factors exert a reciprocal influence upon the
volume o f business and the price at which business
is conducted.
The relaxation o f price controls naturally directs
attention to factors likely to have an important bear
ing on price levels in a comparatively unregulated
economy. The size o f the money stream, which is
dependent upon the quantity o f money and the
rapidity with which it changes hands, is o f vital im
portance in this connection. I f the flow o f money
increases relative to the supply o f goods and services,
higher price levels result. In view o f frequent references
of late to the possibility that production may be near
ing capacity levels, it is particularly pertinent to
analyze the trend o f the money flow, together with
the factors responsible for changes in its volume.
The major proportion o f the flow of money is repre
sented by bank debits, most o f which consist o f checks
written against demand deposit accounts. Adjusted
demand deposits, their rate o f turnover, and the
volume o f debits for Fourth District reporting banks
are presented in relative form in the table below. It
may be noted that bank debits have increased sub
stantially and apparently at a pace slightly in excess
o f the national gain in industrial production.
Commercial banks have virtually no control over
the rate at which deposits are spent. The rate results
from millions o f decisions by individual depositors
regarding the advisability o f current expenditures for
Demand Deposit Volume, Turnover Rate, and Debits
Fourth District Reporting Banks
— 1946—
(Relatives com puted from Average W eekly Figures)
First
Second
Third
Quarter
Quarter Quarter
Adjusted Demand D eposits. . . .
100
103
105
Turnover Rate o f Adjusted D e
mand D eposits............................
100
103
107
Debits to Adjusted Demand De
posits..............................................
100
106
112
countless items, including investments. The decisions
are influenced by the availability of consumer goods,
by the intensity o f needs for goods and services, by
expectations regarding future price and quality
changes, and also by such subjective considerations
as expected job security.
The quantity of deposits, however, is definitely
influenced by the commercial banking system through
changes in the volume o f loans and investments. In
the Fourth District, total loans and investments of
reporting banks declined about $550 million during
the first three quarters o f 1946, largely because of a
reduction in the public debt. This was accompanied
by a roughly comparable reduction in total deposits
of $585 million.
Nationally, the reduction in loans, investments and
deposits was even greater than in the Fourth District.
Loans and investments o f all reporting banks dropped
roughly 15 percent, while the decline for the Fourth
District alone was only 10 percent. Deposits decreased
14 percent nationally and 10 percent in the Fourth
District. The smaller declines recorded in the Fourth
District reflect a flow of funds into the District from
the rest of the country.
Changes in Loans, Investments and Deposits
Fourth District Reporting Banks
(First Nine M onths— 1946)
(000,000 om itted)
Jan. 2
Oct. 2
1946
1946
Change
L oan s...............................
1118
1185
67 or + 6 .0 %
Investm ents..................
4215
3597 — 618 or — 14.7%
3
T o t a l.......................
Adjusted Demand
D eposits.....................
Tim e D eposits..............
Interbank D eposits. . .
U. S. G ovt. D e p o s its ..
T ota l D eposits. . .
3
3 5333
3 2903
3 4782
1255
611
1171
3 3116
1359
495
384
3 5940
3 5354
+3
- 3 5 5 1 or - 1 0 . 3 %
+ 3213
+ 104
— 116
— 787
or
or
or
or
+ 7.3%
-f- 8.3 %
— 19.0%
—6 7 .3%
—3586 or — 9 .9 %
It is significant that the reduction in deposits
occurred only in U. S. Government and interbank
deposits. X^e volume o f adjusted demand deposits
recorded substantial gains and time deposits likewise
increased. O f the four categories o f deposits, adjusted
demand deposits are o f the greatest importance from
the standpoint o f price level changes, because they
represent readily spendable balances in the hands o f
the public. These balances rose roughly 7 percent at
Fourth District reporting banks and 6 percent at all
reporting banks in the country.
4
MONTHLY BUSINESS REVIEW
An understanding o f the process whereby demand
deposits rose while deposits as a whole declined is
facilitated by an analysis o f changes in the respective
types o f loans and investments. Reference must also
be made to the possibility o f shifts in deposits from
one category to another.
With regard to investment portfolios o f Fourth
District reporting banks, it may be noted that holdings
o f bills, certificates and notes declined about 3800 mil
lion, a percentage reduction o f 46 percent. On the other
hand, portfolios o f Treasury bonds rose 3170 million
for a gain o f roughly 8 percent. The decrease in bills,
certificates, and notes did not work toward deflating
demand deposits by a comparable amount, because
it was coupled with a decrease o f virtually the same
size in Government deposits with the banks. These
deposits, built up to very high figures during the
Victory Loan, in effect were used by the Treasury to
retire short-term obligations held by the commercial
banks.
Changes in Investment Holdings of
Fourth District Reporting Banks during 1946
(000,000 om itted)
H O L D IN G S O F IN V E S T M E N T S O N
Jan 2
Apr. 3
July 3
Bills, certificates and
n otes.........................
3 1728
3 1557
3 1191
2215
2265
2299
Treasury B on d s.............
272
283
279
Other Securities............
T o t a l........................
3
3
4215
3
4105
Oct. 2
3
3
3769
932
2384
281
3597
N E T D O LL A R CH AN GES— BY Q U ARTERS
First
Second
Third
Bills, certificates and n o tes.........
Treasury B o n d s..............................
Other Securities..............................
—3171
+
50
-j- 11
—3366
+
34
—
4
T o t a l..........................................
-$ 1 1 0
—3336
—$259
+
+
85
2
-$ 1 7 2
N E T P E R C E N TA G E CH AN GES— BY Q U ARTERS
First
Second
Third
Bills, certificates and n o te s .........
Treasury B o n d s..............................
Other Securities..............................
T o t a l..........................................
— 9 .9 %
+ 2 .3 %
+ 4 .0 %
—23.5%
+ 1.5%
— 1.4%
-
-
2.6%
— 11.3%
+ 3 .7 %
+ 0 .7 %
8.2% '-
4 .6 %
The decline in bills, certificates, and notes at Fourth
District reporting banks was offset by a drop in
Government deposits rather than in demand deposits.
Therefore, if the reduction o f Government deposits
and the comparable decrease in bills, certificates, and
notes are placed in a category by themselves, the gain
o f roughly 3180 million in Treasury bond and other
security holdings appears as a factor contributing to
an increase in demand deposits. As such, it is per
tinent that bond holdings posted a larger increase in
the third quarter than in the other two quarters
combined.
It may be observed that in reporting banks over
the country as a whole, the drop in Government
deposits during the nine-month period exceeded the
November 1, 1946
decline in bills, certificates and notes by roughly
2 billion dollars. The excess amount was utilized to
meet Treasury cash deficits and to reduce the Treasury
security holdings of non-bank investors by a slight
amount. Thus demand deposits were increased
nationally at the expense of reductions in Government
deposits.
Undoubtedly, the Government deposit reductions,
made necessary by Treasury cash deficits and the
net retirement of securities held by nonbank lenders,
contributed to the net flow of funds into the Fourth
District and thus to the increase in Fourth District
demand deposits.
The increase in adjusted demand deposits was also
encouraged by a persistent expansion in loan port
folios:
Changes in Loan Portfolios of
Fourth District Reporting Banks during 1946
(000,000 omitted)
LOANS OUTSTANDING ON
Jan. 2 Apr. 3 July 3 Oct. 2
Commercial................. $ 432 $ 447 $ 500 $ 569
156
163
184
204
Real Estate.................
AUOther.....................
152
159
167
188
To Banks....................
1
0
1
20
Subtotal.............. 3 741 3 769 3 852 $ 981
Security Loans............
377
367
305
204
Total.................... $ 1118 $ 1136 3 1157 3 1185
NET DOLLAR CHANGES—by Quarters
First Second Third
Commercial............................... ... +3 15 +3 53 +3 69
Real Estate................................... +
7
+
21
4* 20
AUOther.......................................+ 7 + 8 + 2 1
To Banks......................................— 1 + 1 + 19
Subiotal............................. +3 28 + $ 83 + £ 1 2 9
Security Loans........................... — 10 — 62 — 101
Total.................................. +3 18 +3 21 +3 28
NET PERCENTAGE CHANGES—by Quarters
First Second Third
Commercial............................... ..+ 3 .5 % + 1 1 .9 % + 1 3 .8 %
Real Estate.................................. + 4 . 5 % + 1 2 .9 % + 1 1 .1 %
All Other......................................+ 4 .6 % + 5 .0 % + 1 2 .6 %
To Banks...................................
*
*
*
Subtotal............................. + 3 .8 % + 1 0 .8 % + 1 5 .1 %
Security Loans........................... — 2 .7 % — 16.9% — 33.1%
Total................................... + 1.6% + 1.8% + 2 .4 %
* No percentage computed because of small base.
Although total loans in Fourth District reporting
banks increased only about 365 million, or 6 percent
over the nine-month period, loans other than security
loans registered comparatively substantial gains.
Furthermore, in general their rates of increase ad
vanced considerably in the successive quarterly
periods. Whereas commercial loans rose about 4
percent during the first quarter, they jumped 14 per
cent in the third quarter. All other (largely consumer)
loans gained roughly 5 percent in the first quarter
compared with 13 percent in the third quarter.
( Please turn 'to Page 12)
November 1, 1946
MONTHLY BUSINESS REVIEW
5
INDUSTRIAL SUMMARY
Termination o f price ceilings on livestock and meats
on October 15 has been followed by a series o f ad
ditional decontrol measures and it is conceivable that
within the comparatively near future, prices in nearly
every field will be freed from Government control and
will be determined by the interaction o f market con
ditions. Only in the case o f rents, some building
materials, and certain durable goods is it likely that
price ceilings will be in effect for a more protracted
period.
Removal o f price controls can be expected to be
followed by a period o f erratic price movements as
markets seek to establish supply-demand relation
ships. In many cases where controls have been re
moved, prices have first increased sharply and then
have reacted somewhat; in some cases prices have
declined from previously existing levels. This process
o f adjustment does not appear to have been com
pleted.
Although there are wide differences o f opinion re
garding the desirability o f permitting prices to find
their natural level at this juncture, there is consider
able agreement as to the broad implications o f higher
consumer prices. One point o f concern is the probable
effect upon prevailing wage rates and another is the
ability of producers to sell in volume at relatively high
unit prices.
During the past year, selling prices tended to move
upward with manufacturing costs, o f which wage
costs are an important element. One o f the dangers
inherent in the current situation is that further price
increases, for whatever reason, will eliminate more
and more consumers from the market. Full produc
tion cannot be maintained if buyers cannot— or will
not— absorb the end-product at present or prospective
prices.
Machine
Tools
Third-quarter shipments o f machine tools
are estimated by the National Machine
Tool Builders’ Association to have ap
proximated 3^5 million, or a monthly rate o f $25
million. Shipments during the first half o f the year
were on a somewhat higher level o f about $28 million
a month.
New firm orders have fluctuated from $26.5 million
in July to $23 million in September with the backlog
o f unfilled orders at about $180 million at the begin
ning o f the fourth quarter. This is about $3 million
less than at mid-year, but still represents more than
six months production at current rates.
The demand for new machine tools o f the latest
types has thus held up very well in the face o f the
heavy disposal o f war surplus machines. There are
many operations on peacetime products that have
no wartime counterparts, and there are many ma
chine tools which were essential for the manufacture
o f munitions which now have no market at home or
abroad. Foreign buyers are reported to be more
interested in tools o f the latest design rather than
used equipment in uncertain condition at bargain
prices. Foreign orders now account for 30 percent
o f the unfilled order backlog, and foreign shipments in
September were one-fifth o f total shipments in that
month. The lack o f dollar credits has curtailed some
foreign buying.
Reported cancellation of machine tool orders
reached a new high in August of $4.4 million, but
dropped in September to $3 million, or about twice
the June rate. Cancellations do not necessarily
mean a net loss to the manufacturers of the amounts
noted due to their method of reporting. For example,
a customer may request that his order for a given
machine tool be revised to obtain another model either
smaller or larger than the one originally specified.
This transaction is reported by the manufacturer as
both a cancellation and a new firm order. Indefinite
postponement of announced plans by several auto
mobile producers to manufacture light cars has con
tributed to the increase in cancellations.
Some cancellations are due to the inability of some
manufacturers to meet promised delivery dates for
new tools, thus forcing buyers into the used machinery
market. The persistent and growing difficulty in
securing purchased components and materials is
delaying many shipments. Principal items in short
supply are electric motors, electric switches and com
ponents, copper, steel, pig iron, and gray iron castings.
The long term outlook for machine tool activity is
considerably clouded by current restrictions on new
industrial construction. Deferment o f needed indus
trial buildings will also delay manufacture o f equip
ment necessary for such programs.
Rubber
Information is now available concerning
the consumption o f both natural and manu
factured rubber in the United States from 1939 to
date as indicated on the accompanying chart.
The remarkable growth in the use o f synthetic
rubber is the most outstanding development. Domestic
consumption o f the synthetic product from 1939
through 1941 was almost zero, but rose to about
58,000 tons monthly by 1945. On the basis o f the
first seven months o f 1946, consumption o f synthetic
rubber has reached a new peak o f 66,000 tons a month,
a figure which is greather than the combined use of
natural and reclaimed rubber in 1939. Reclaimed
rubber is being used at a rate one-third greater than
prewar and appears to have leveled off at about
20-21,000 tons per month.
About 98 percent o f synthetic rubber production
comes from Government-owned plants which manu
facture almost exclusively GR-S or general purpose
rubbers. Special purpose rubbers are produced
largely by privately-owned plants, whose most im-
6
MONTHLY BUSINESS REVIEW
Domestic Rubber Consumption — U. S.
— M ON TH LY AVERAGES —
150
125
November 1, 1946
since current ceilings apply only to the one grade of
tires which manufacturers have been making for the
past five years.
Goal
o
Z
o
»
o
2
o
a
u.
o
a
* o n b a sis
or rmsT
SOURCES: F A C T S
seven
m o n th s
FOR INDUSTRY, RUBBER
M ANUFACTURERS' ASS'N.
portant products are Neoprene, Butadiene-Acrylonitrile types, and Butyl. The latter type, because of
its special air-retaining properties, has been consumed
in steadily increasing quantities and is particularly
suited for inner tube manufacture. In 1943, it
accounted for only one-tenth o f one percent o f the
total natural and synthetic rubber consumed. By
1945 its proportion had risen to about five percent,
and in July 1946 it was eight percent. The Civilian
Production Administration is channeling nearly all
Butyl into passenger-car-type inner tubes, although
its use is permitted in certain sizes o f tire tubes for
tractors and implements. Natural rubber must be
used in large truck tubes.
The supply o f natural rubber has exhibited a high
degree of elasticity in response to price changes. In
June 1946, the Far Eastern price was raised 334 cents
a pound to meet rising costs and to stimulate supply.
The result was a flood o f rubber and during the first
week in October, the Rubber Development Corpora
tion was able to buy 200,000 tons at 20J4 cents a
pound, or a reduction equal to the increase o f four
months ago. This was the first reduction in price o f
internationally important raw materials.
In view o f the improved supply condition, the Com
bined Rubber Committee* has agreed that interna
tional allocation o f natural rubber need not continue
beyond the end o f this year, and the Committee will
be terminated December 31, 1946. This is the initial
step toward the return o f a free rubber market, and
beginning January 1, 1947 anyone outside o f the
United States can buy any quantity o f rubber he can
find. However, until the Second War Powers Act
expires March 31, 1947, only rubber purchased by
the Rubber Development Corporation may be brought
into this country.
Natural rubber consumption in the United States
in July 1946 amounted to 22,000 tons, up 35 percent
from the previous month and about two and one-half
times the 1945 rate. At least one District manu
facturer will soon commence production o f premium
grade passenger car tires. Sale o f these tires will not
begin until OPA establishes selling prices for them,
♦Member Countries:
Belgium, Canada, France, Netherlands, United King*
dom, and the United States.
Bituminous coal production in the Fourth
Federal Reserve District totaled 20.3 million
tons during the month o f September as compared to
17.5 million tons in the same month last year. District
production for the first nine months amounted to
about 152 million tons as compared to 165 million
tons in the corresponding 1945 period. September
was the fourth consecutive month in which produc
tion exceeded the 20 million ton level and the sixth
month this year to reach that peak. Indicative of
the current high level of operation is the fact that
there were only 5 months during the entire war period
when production exceeded this rate, the last time
being August 1944.
Total United States bituminous coal production for
the first three quarters of the year approximated 390
million net tons or about 11 percent less than the
previous year. At mid-year, total production was 21
percent below a year ago. The tonnage lost from the
long spring strike is thus being rapidly made up.
Total industrial coal stocks at the end o f August
amounted to 45 million tons and were about equal
to that held in the corresponding period o f 1941.
Some observers believe that it will be possible for
the general coal industry to return to a five day week
sometime after January 1. Such an event would
result in a substantial reduction in costs through
elimination o f much o f the overtime now being
incurred.
There has been a serious railroad car shortage for
several months, primarily in the northern coal pro
ducing districts o f Ohio, Pennsylvania, and northern
West Virginia, and some mines have been on reduced
schedules because o f inability to ship coal. The
southern mines have had ample cars to meet all needs.
Because o f the strikes that prevailed a few months
ago, there is a shortage o f bituminous coal for ship
ment to the Great Lakes. Deliveries are being
rushed to take care o f this market before the freeze-up
which usually occurs about December 1. Bituminous
cargo coal loaded into vessels on the Great Lakes
totaled slightly less than 8 million tons in September,
and amounted to 34.3 million tons for the season
according to the Coal and Ore Exchange. Loadings
are 3 million tons behind last year.
There is some shortage of the better grade coking
coals, and the supply o f metallurgical coke is very
tight. High grade domestic coals are also in short
supply. It is anticipated, however, that when lake
shipments stop, there will be sufficient coal for all
needs in the District, and there will probably be a
surplus of inferior quality steam coal after December 1.
The immediate prospects for the coal industry were
suddenly changed in the latter part of October by the
United Mine Workers’ demand upon the Government
to reopen the coal contract on November 1. The
union alleges that its contract with the Government
has been breached by the Administrator’s refusal to
November 1, 1946
MONTHLY BUSINESS REVIEW
compute payments for the health and welfare fund
on the basis o f coal tipple weights instead o f railroad
car weights, and the failure to put into effect an
arbitration award on pro rata vacation payments.
A “ significant” change in the Administration’s wage
policy is indicated to be the basis for a desire to re
consider wage rates.
According to the Bureau o f Labor Statistics the
average wage rate in the bituminous coal industry at
present is 31-497 per hour as against $1,437 in the
competitive petroleum refining industry.
Iron and
Steel
The District as well as the national steel
situation is dominated by shortages o f
both raw materials and finished products.
Supplies o f scrap, pig iron, and coke are very scarce,
and the mills are maintaining the production o f steel
ingots at about 90 percent o f capacity with great
difficulty. * On the other hand, inventories o f steel
consumers are low and there is heavy pressure on
mills for larger shipments. Demand is predominantly
for the lighter gauges o f sheets, strip, and plate and
for smaller diameter bars and light structurals.
The scrap situation has shown no improvement,
despite Government efforts to stimulate its flow from
farms and households. The collecting arm o f the
industry apparently is on strike against what it
regards as an insufficient differential between unpre
pared and prepared scrap. Some scrap dealers are
now devoting their time to paper and other waste
materials. Many steelmakers have arrangements
with industrial scrap producers for direct shipments
thus bypassing the scrap yard.
The coke shortage has become more widespread.
The shift o f blast furnaces from steelmaking to
foundry grades o f pig iron is one cause for heavier
coke consumption, the latter grade requiring more
fuel in the smelting process. Quality o f coke in some
instances is definitely inferior due to poor coal.
Spelter, needed for galvanizing, is a hard-to-get
item, and some mills report barely enough on hand to
keep galvanizing pots operating. A few shutdowns
of galvanizing lines have been reported. The zinc
shortage is attributed by the industry to the price
control and subsidy program.
Total stocks o f iron ore at furnaces and Lake Erie
docks amounted to 37.5 million gross tons on October
1 as compared to 39.5 gross tons a year ago, according
to the Lake Superior Iron Ore Association. Ship
ments of iron ore in September equaled 9.6 million
tons. Cumulative shipments for the season are
reported at 43.3 million gross tons or 30 percent
below last year. The trade estimates total shipments
for the season will approximate 55 million tons as
compared to a goal o f 60 million tons at the beginning
of the season. This should enable producers to
squeeze through the winter until the lakes open in
the spring.
Production o f steel ingots and steel for castings in
September totaled 6.5 million net tons, or a rate
equal to 86.4 percent o f capacity. For nine months
7
this year, production amounted to 47.3 million tons
compared to 61.8 million tons in the first nine months
last year. Shipments o f finished steel reached 5.4
million tons in August, or 20 percent greater than, a
year ago. Despite the acute demand for nails, only
61.000 tons were produced in August as compared to
48.000 tons a year ago when the demand was rela
tively light.
Shipments of gray iron castings in August advanced
16 percent over July to reach 945,000 tons, the greatest
amount on record. The previous peak o f 928,000
tons was attained in March 1945. Soil pipe ship
ments amounted to 36,000 tons, a new high since the
end o f the war. Shipments o f malleable iron cast
ings, steel castings, and steel forgings also rose 6 to 11
percent in August.
Shoes
District shoe manufacturers are faced with
a critical shortage o f leather and curtailed
operations are indicated for the balance o f the year.
The supply o f hides was greatly reduced as cattle
slaughter declined with the return o f meat price con
trols on the livestock industry in August. Since it
takes from 90 to 120 days to convert hides into usable
shoe leathers there will be little immediate benefit to
the shoe industry from the recent increase in livestock
slaughter.
On October 31, when price ceilings were removed
from all skins, hides, leather, and shoes, foreign hides
were quoted at about 30 cents a pound as compared to
a ceiling o f 15 3^ cents for domestic hides.
National shoe production for 1946 had been esti
mated earlier in the year at 550 million pairs. In view
o f the leather situation, this estimate has now been
lowered to less than 500 million pairs as against 498
million pairs manufactured in 1941.
Construction
Fourth District total building con
tracts awarded in August increased
$14.5 million dollars over July and
amounted to $79 million according to estimates based
upon F. W. Dodge Corporation reports. Cumulative
contracts for the first eight months totaled $567 million
as compared to $156 million for the same 1945 period.
Residential contracts awarded were up sharply in
August to $36 million as compared to $21 million in
July. Cumulative residential construction contracts
through August equaled $214 million as compared to
$30 million in 1945.
A large proportion o f started residences are still in
process because of the lack of material with which
to carry on the work. In Cleveland, for example, it
is estimated that work has stopped on 1,100 dwellings
because o f the lack of nails. Other critical building
materials are cast iron soil pipe, hardwood flooringis,
building hardware, finished millwork such as doors
and window sashes, lumber, paint, bathtubs, sinks,
water closets and heating equipment. Brick and tile
are in fairly good supply.
8
November 1, 1946
MONTHLY BUSINESS REVIEW
AGRICULTURAL SUMMARY
C rop
Good September weather generally over
the Corn Belt resulted in an upward
revision o f the corn crop estimate re
leased October 10. A record harvest o f 3,374 million
bushels is indicated, three million bushels more than
on September 1. Late reports on the wheat crop added
two million bushels making the present yield estimate
1,169 million bushels. This is 44 million bushels more
than in 1945 and 323 million above the ten-year
average.
Production
Potatoes joined the all-time record group in Sep
tember, which now includes corn, wheat, tobacco,
peaches, pears, plums, and truck crops. Oats, rice,
and peanuts moved nearer to record production levels.
Also in the near-record production class are grapes,
cherries and sugar cane. Production equal to average
or better is still promised for hay, soybeans, dry peas,
prunes, apricots, hops, and sugar beets. Flaxseed,
sorghum grain, buckwheat, sweet potatoes, and apples
also joined this group in the past sixty days. Cotton
was the only major crop to show a decline. Production
prospects dropped from 9.1 million bales September
1 to 8.7 million a month later, the lowest in 25 years.
Other below-average crops are rye, broom corn, dry
beans and pecans.
Despite improvement in recent weeks in the oil-seed
group, production will be lower than in 1945. Feed
grains and food grains, however, will aggregate the
highest production on record, and the fine quality of
the harvest assures a high nutrient value.
District crop yield estimates of tobacco and potatoes
were increased over the previous month, corn and hay
yield estimates declined, and oats and wheat remained
unchanged as shown in the accompan ying tabulation:
Fourth District Crop Yields
T o b a cco
Potatoes
Corn
W heat
Oats
H ay
lbs.
bu.
bu.
bu.
bu.
tons
Oct. 1,
Sept. 1, Ratio o f Oct. 1 Estimate to:
1946
1946
1945
1935-44
(Thousan d Units)
Production
Average
159,146
157,253
140%
110%
14,061
13,830
104%
76%
231,307
234,241
105%
118%
58,023
58,023
87%
123%
79,653
79,653
125%
154%
5,750
5,708
102%
111%
Except wheat, production of major crops in the
District exceeded 1945. The yield o f wheat was dis
tinctly above average but twelve percent below the
record output o f a year ago. Only potatoes were below
the ten-year average production due mainly to a sharp
reduction in acreage, as yields per acre in each o f the
Fourth District states were significantly higher than
the average for the years 1935-44.
Milk Production
and Consumption
Milk production per cow during
September was the highest in 22
years o f record. This is the
seventh consecutive month in which milk production
per cow has surpassed all previous records. Removal
o f the less efficient milkers, better than average pas
ture, and more liberal feeding o f grains and concen
trate feeds than in any o f the past three years have all
contributed to the attainment o f a high rate o f milk
production per cow in the recent months.
Egg production during September was four percent
below the same month o f 1945. Production per layer
declined and there were fewer layers. Total egg pro
duction for the first nine months o f this year now
stands at 44.9 billion dozen compared to 45.7 billion
for the same period in the previous year. Eggs for
civilian use in 1946 are now estimated at 367 per
capita. This is lower than the 392 eggs available in
1945, and somewhat above the average of 363 eggs
per capita in the years 1943-45 inclusive.
Egg production in the four states o f the District
was 440 million dozen this September as against 426
million in the same month a year ago. A lower rate of
production per layer in Kentucky and West Virginia
was offset by a higher rate in Ohio and Pennsylvania
along with a larger number of layers on farms in both
Pennsylvania and Kentucky.
The 41 million turkeys being raised this year repre
sent nine percent less than the record number of the
previous year and are expected to move to market
earlier than heretofore. Growers plan to have 25
percent of their crop marketed by November 1, and
65 percent by December 1. The holiday markets,
according to growers’ intentions, will receive about
one-fourth of the year’ s marketings as compared to 30
percent a year ago. Thus turkeys remaining to be
offered on 1947 markets will approximate nine percent,
whereas they equaled 14 percent a year ago. The
trend toward earlier marketings has been in part due
to the fact that early poults are easier to raise, and that
growers have experienced less mortality with them
both in the spring during the brooding season and in
the fall from early winter storms.
Flow of
Livestock
to Markets
Livestock receipts at receiving yards
were the lowest on record for the month
o f Sepem ber, and con tin u ed low
through early October. At three mar
kets in the Fourth District comparative receipts were
as follows:
September Livestock Receipts
(Cleveland, Cincinnati and Pittsburgh)
1946
C a ttle...................................................................
C a lves..................................................................
H o g s.....................................................................
Sheep....................................................................
70,900
36,300
17,000
107,600
1945
100,200
39,600
95,000
118,600
Lifting o f price controls on livestock on October 15
precipitated a record movement of livestock to market.
Both railroads and receiving markets were taxed to
capacity to handle the incoming livestock. In some
instances stockyard officials had to impose an em
bargo until railroad cars were obtained or until the
livestock could be moved to meat packers.
The degree to which livestock moved to market
following the lifting o f price controls is shown below
November 1, 1946
MONTHLY BUSINESS REVIEW
by a comparison o f receipts on the five market days
preceding October 14 with receipts on the five market
days immediately after that date:
Livestock Receipts— 12 Major U. S. Markets
C a ttle ...................................................................
C a lves..................................................................
H ogs.....................................................................
Sheep....................................................................
Five M arket Days:
Preceding Following
Oct. 14
Oct. 14
204,733
400,000
63,816
100,900
36,610
333,200
265,681
364,000
Total hog receipts at the twelve major markets in
creased by 900 percent for the five market days im
mediately following October 14 as compared to
receipts on the five market days preceding this date.
Similar comparisons for the other classes o f livestock
showed increased receipts o f cattle, 96 percent; calves,
58 percent; and sheep, 38 percent.
Prices received by producers for livestock rose
sharply to unprecedented levels on most markets and
then eased to lower levels after the first seven days
o f decontrolled markets.
Prevailing Prices for Good and Choice Grades
at
Cincinnati Livestock Market
(price per cw t)
Oct. 14
Beef Steers...................................
Veal C alves..................................
H og s...............................................
L am bs............................................
3 19.00
17.50
16.35
19.50
Oct. 17
Oct. 23
$ 25.00
22.50
25.50
24.00
3 21.00
23.50
23.25
20.00
More extreme prices were recorded in some other
markets, but the foregoing table illustrates the price
fluctuations which characterized the inception o f free
markets.
KENTUCKY BANKERS ASSOCIATION
PROGRAM
At their meeting at Louisville on October 10 and 11,
members o f the Kentucky Bankers Association ap
proved plans for an agricultural program calling for
the employment o f a full-time agricultural field agent.
The person employed in that capacity will represent
the bankers o f Kentucky in their efforts to foster
activities designed to conserve and improve soil
resources and otherwise contribute to the betterment
o f agriculture in that state.
Duties o f the field agent as outlined by the com
mittee were in part as follows:
1. T o keep bankers currently informed concern
ing practices, varieties, and methods applicable to
the agriculture o f their respective communities.
2. T o arrange joint meetings, tours, etc., of
bankers and farmers which would permit each to
have a better understanding o f the others’ problems.
3. T o aid bankers in each county in developing
a program o f work in cooperation with existing
public and private agencies that would lead to soil
improvement, better farm incomes, and more oppor
tunities for rural youth.
4. T o work out plans for the presentation of
achievement awards through local bankers to farm
9
ers and to rural youth for outstanding achievement
in certain designated projects.
5.
To assist local bankers in locating operators
or potential operators o f custom harvesting equip
ment for recovering legume and grass seeds on small
acreages, and earth moving equipment necessary in
the construction o f terraces, farm ponds, and other
similar practices necessary to soil and water con^
servation.
It is anticipated that the field agent would make
liberal use o f color slides and films to point out clearly
the problems and to make progress reports to farmers,
bankers, civic clubs, and other interested groups in
the state.
This comprehensive program was prepared by the
Association’ s agricultural committee of which W. A.
Hinton, President o f the Farmers Deposit Bank of
Sadieville, is chairman. It was presented to the con
vention assembly by W. A. Cole, Cashier, Lincoln
National Bank o f Hodgeville, a member o f the com
mittee.
In the committee’s report to the membership it was
pointed out that University o f Kentucky agricultural
authorities estimate that more than three-fourths o f
the original topsoil has been washed away on 46 per
cent of Kentucky’s land. On another 28 percent of
the area o f the state one-fourth to three-fourths o f the
topsoil is gone. It was further emphasized that im
mediate steps are needed to build up the soil on at
least one-half o f all the farms in Kentucky, and that
on most o f the other half further soil improvement
could be made with profit. With nearly one-half of
the population residing on farms and perhaps 80 per
cent dependent upon farming or business with farmers
as their chief means o f support, correction o f this loss
o f soil resources is o f paramount importance to a vast
majority o f the state’s inhabitants.
Concurrently with this need for protecting the
state’s topsoil from erosion and depletion is the need
for taking full advantage o f the natural factors that
favor grassland farming— the most economical type of
livestock production. Ideal grazing conditions are
provided by the fact that Kentucky is situated just
far enough north to permit optimum growth of all
the better legumes and grasses, yet far enough south
to avoid the long winter feeding period and mor° ex
pensive winter shelter required in the Corn Belt States.
In addition, research has shown that under these
conditions one acre o f adapted grasses will produce as
many pounds o f feed nutrients as an ai:re of grain.
In fact, an acre o f productive blue grass is equal in
feeding value to a 49 bushel-per-acr- yield o f corn.
In approving this plan which calls for an estimated
expenditure o f $10,000 annually for the next five years,
the bankers of Kentucky have definitely demonstrated
their willingness to lend assistance to the conservation
of soil resources and to the betterment o f the state’s
largest industry— agriculture. Incidentally, they are
pioneering in a type o f project which may find applica
tion elsewhere, for the need for preservation and wise
use o f farm land resources is nationwide.
10
MONTHLY BUSINESS REVIEW
{Continued from Page 2)
to come anywhere near last December’ s low. Little
encouragement can be derived from the fact that the
September sales volume o f these items actually was
three percent below a year ago, whereas beginning
inventories were up 37 percent.
It is not within the purview o f this discussion to
inquire into the causes o f these situations. , The more
immediate question is the probable magnitude of
overextension and the near-term effects o f any extraseasonal liquidation, both upon prices and upon pro
duction and employment in the respective fields of
garment manufacture.
A more detailed account o f sales by departments
is contained in the following tabulation o f Fourth
District reporting stores’ sales during September:
Sales by Departments— September, 1946
November 1, 1946
Major household appliances continue to lead the
list with respect to percentage increase over a year
ago although dollar volume was slightly below the
August all-time high.
Sales o f domestic floor coverings were twice as
large as a year ago. Blankets and linens also moved
upward from the preceding month’ s ranking.
Year-to-year percentage increases in men’ s clothing
are no longer so outstanding chiefly because o f the
fact that the postwar rise in sales was getting under
way at this time last year.
Among the major departments which tended to
hold down the store-wide gains were: women’ s and
misses’ coats and suits whose sales were up only 13
percent, women’s and misses’ dresses which increased
only 8 percent, juniors’ and girls’ wear department
whose sales were only 3 percent higher than 1945,
and the blouse department where sales were off 3
percent from the year before.
(Fourth D istrict Reporting Stores)
% Changes
from year ago
M a jor Household A ppliances........................................
+728%
D om estic Floor C overings............................................. ......... + 1 0 2
H ousew ares.......................................................................... ......... + 84
Sport G o o d s ......................................................................... ......... + 76
M en’ s Furnishings............................................................. ......... + 59
T oys and G am es................................................................ ......... + 56
D om estics, Blankets, Tow els, etc................................. ......... + 4 9
M en’ s C loth in g................................................................... ......... + 47
M en’ s and B oys’ Sh oes............................................................. + 47
L u ggage................................................................................. ......... + 46
Furniture.............................................................................. ......... +
Lamps and Shades............................................................ ......... +
China, G lassw are............................................................... ......... +
Draperies, Curtains, U ph olstery.................................. .........+
Silverware and J ew elry.................................................... .........+
34
33
33
32
30
Furs........................................................................................ ......... + 28
M A IN S T O R E T O T A L , All D epartm en ts.............. .........+ 2 6
N o tio n s ................. ......................................................................... + 18
Corsets and Brassieres . . . ............................................. .........+ 17
T oilet Articles, D rug Sundries...................................... ......... + 16
W om en’ s and Children’ s Shoes..................................... .........+
W om en’ s and Misses’ Coats and Suits................................+
Hosiery (W om en ’ s and Children’s ) ............................. .........+
C otton Wash G o o d s ......................................................... .........+
Art Needlework, Art G o o d s ....................................................+
14
13
11
10
9
Dresses (W om en ’ s and Misses’ ) .............................................+
W om en’ s U nderw ear........................................................ .........+
Laces, Trim m ings, etc...................................................... .........+
Aprons, House Dresses and U n iform s.................................+
R estaurants......................................................................... .........+
8
8
8
8
7
Silks, Velvets, W oolen Dress G o o d s........................... .........+
B oys’ Clothing and Furnishings............................................+
Infants’ W e a r...............................................................................+
H andkerchiefs..................................................................... .........+
Books, Stationery.............................................................. ........ +
6
5
5
5
4
Juniors’ and Girls’ W e a r........................................................ +
Leather Goods (sm a ll)..................................................... .........+
M illin ery........................................................................................+
Blouses, Skirts, K nitgoods, Sportsw ear..................... .........—
G lo v e s.............................................................................................—
3
2
1
3
4
N eckwear and S carfs........................................................ ........ — 4
Beauty Salon. ..................................................... ........... .........— 8
Photographic S tu d io......................................................... ........ — 24
The situation may be summarized by the statement
that exclusive o f house furnishings and the men’ s
clothing department, main store sales were only 12
percent above a year ago. However activity in those
two departments was sufficient to lift the increase
over a year ago to 26 percent.
CURRENT EVENTS
Savings Bond Drive
A drive to stimulate sales of U. S. Savings Bonds
will be launched by the Treasury Department on
Armistice Day, November 11. The campaign is to
run until Pearl Harbor Day, December 7, and will
place special emphasis on encouraging payroll savings
plans and sales to farmers.
The drive is designed to absorb consumer spending
power and thus to combat rising prices. Funds raised
will be utilized in the Treasury program to retire short
term debt in the hands o f the banks.
The drive will stress the advantages gained by those
buying bonds at this particular time. The favorable
interest rate and safety o f the investment will be
emphasized. Potential bond buyers will ajso be re
minded that funds saved now may be spent to greater
advantage sometime in the future.
A similar campaign staged several months ago was
an important factor in boosting July Savings Bond
sales to a level 32 percent above the June figure.
NEW MEMBER BANK
The Adams Bank, Millersburg, Ohio.
MONTHLY BUSINESS REVIEW
November 1, 1946
Indexes of Department Store Sales and Stocks
Daily Average for 1935-1939 - 100
Without
Seasonal Adjustment
Sept.
Aug.
Sept.
1945
1946
1946
Adjusted
for Seasonal Variation
Sept.
Aug.
Sept.
1945
1946
1946
SALES:
Cleveland (10) . . . .
Pittsburgh
Springfield
Youngstown (3) .
District* (98) . .
STOCKS:
302
345
306
262
349
286
275
305
294
266
305
286
276
327
285
219
322
261
192
263
239
235
277
249
281
324
291
249
322
258
196
260
249
242
285
251
215
225
207
162
242
213
180
234
189
179
213
197
257
304
257
234
297
246
239
250
247
216
278
249
219
222
211
185
242
211
183
232
196
184
219
199
171
225
246
153
221
208
ised July, 1946.
Page 7 of September 1, 1946 Monthly Business Review
Bank Debits — September, 1946
(29 F ou rth D istrict C ities)
Debits during September were 26% above the figure for a year ago, but
were 1% under the August total and 3% below the figure for July; however,
on a daily-average basis September debits exceeded both preceding months.
Most of the debits represent transfers of funds by check, although debits
to U. S. Treasury deposits at reporting banks and withdrawals from savings
accounts are also included.
TEN LARGEST CITIES
Significant debit totals were recorded in T oledo and D ayton. Toledo
quarterly figures were about 40% above a year ago and the September total
exceeded last year’s figure by 44%. The corresponding figures for Dayton
roughly were 31% and 38%, respectively.
Quarterly figures were also substantially above last year in C olum bu s and
Y oungstow n, while P ittsbu rgh and C anton recorded particularly large
totals for September.
NINETEEN SMALLER CITIES
During September and the third quarter, smaller cities exceeded the large
cities in their percentage increases above a year ago, thus continuing a trend
underway in the Fourth District since the final year of the war.
In 12 of the 19 smaller cities the quarterly figures constituted all-time
highs. The M iddletow n quarterly total was almost 50% above that of a year
ago, and was the largest percentage increase reported among the 2,9 cities.
Zanesville and C ovington-N ew port likewise recorded striking quarterly
gains over last year.
The outstanding September increase over the corresponding figure for a year
ago was achieved by M iddletow n with a figure slightly above 44%. Sep
tember increases were likewise high in Lexington and H am ilton, where gains
of about 41% occurred.
(In thousand* of dollars)
ALL 29 CENTERS...............
10 LARGEST CENTERS:
Akron........................ Ohio
Canton...................... Ohio
Cincinnati................. Ohio
Cleveland..................Ohio
Columbus..................Ohio
Dayton......................Ohio
Toledo.......................Ohio
Youngstown..............Ohio
Erie............................Penna.
^Pittsburgh.................Penna.
% change 3 months % change
Sept.
from
ended
from
1946
year agoSept. 1946 year ago
35,426,700+26.0 ?16,539,897H
+19.9
213,167
93,422
698,395
1,394,155
376,357
184,157
315,981
108,871
67,645
1,498,330
Total.................................
19 OTHER CENTERS:
Covington-Newport. Ky.
Lexington..................Ky.
Hamilton.................. Ohio
Lima..........................Ohio
Lorain....................... Ohio
Mansfield..................Ohio
Middletown.............. Ohio
Portsmouth.............. Ohio
Springfield................ Ohio
Steubenville..............Ohio
Warren......................Ohio
Zanesville..................Ohio
Butler........................Penna.
.Franklin....................Penna.
Greensburg............... Penna.
Homestead................Penna.
Oil City.....................Penna.
Sharon.......................Penna.
Wheeling...................W. Va.
24,950,480
Total.................................
3 476,220
3
33,729
47,250
29,297
34,151
12,981
29,972
*26,698
16.906H
36,473
19,605
29,348
20,848H
24,503
6,207
15,853
6,768
16,412
19,865
49,354
+25.1
+35.8
+20.3
+18.5
+14.5
+37.5
+43.9
+26.4
+23.6
+33.4
+25.6
655,898
267,271
2,173,388H
4,335,150
1,255,841H
555,953H
999.665H
330,163 H
209,914
4,301,607
315.084.850H
+19.1
+28.9
+40.9
+40.5
+37.0
+34.7
+31.2
+44.3
+27.1
+21.9
+23.3
+37.5
+34.6
+32.6
- 0.8
+31.8
+32.6
+ 5.6
+30.7
+21.7
3
108,424
145,999
82,645 H
102.432H
40.029H
90,223H
82.999H
49,078H
115.899H
59.371H
87.843H
61.719H
73,611H
19,634
50,253
21,198
49,389
62.012H
152,289
+35.9
+40.1
+23.0
+29.6
+44.7
+31.2
+49.5
+26.9
+23.5
+22.8
+32.9
+39.5
+26.6
+10.6
+31.7
+34.2
+ 9.0
+23.5
+16.3
+30.3
3 1,455,047H
+28.8
H denotes new all-time high for one month or quarter-year.
+18.9
+16.1
+17.1
+14.5
+28.9
+30.8
+39.8
+26.4
+13.7
+16.9
11
Fourth District Business Statistics
(000 omitted)
Fourth District Unless
Otherwise Specified
Retail Sales:
Department Stores—98 firms..............
Wearing Apparel— 15 firms.................
Furniture— 67 firms..............................
Building Contracts— Total......................
— Residential............
Commercial Failures— Liabilities............
—Actual Number .
Production:
Pig Iron— U. S........................Net tons
Steel Ingot— U. S................... Net tons
Bituminous Coal—
O., W. Pa , E. Ky.................. Net tons
Cement—O., W. Pa., W. V a .. . . Bbls.
a Not available.
September
1946
3
3
3
3
% change
from
1945
August
1946
56,820
2,420
3,595
53,888
32,500
577
7
+26
+ 10
+72
+54
+670
+318
-1 3
3 63,398
2,606
3,648
78,997
36,122
64
5
4,687
6,517
+11
+ 9
4,898
6,887
20,298
a
+16
a
22,516
1,505
Time Deposits*—12 Fourth District Cities
„
, ,.T
,
City and Number
June 30
Aug. 28
Sept. 25
of Banks
1945
1946
1946
(In thousands of dollars)
8,057 3 10,0113
10,172
Lexington (5 )...........3
Erie (4 ).....................
29,146
35,825
36,106
Akron (3 )..................
81,051
95,821
96,404
286,173
317,503
318,932
Pittsburgh (13)........
Cincinnati (8 )..........
151,553
177,404
177,893
699,081
825,514** 827,184
Cleveland (4 )..........
Canton (4 )................
34,284
39,299
39,386
Toledo (3 )................
72,136
86,752
86,688
Youngstown (3 )----43,853
52,334
52,296
Wheeling (6 )............
23,643
28,470
28,440
Columbus (3 )...........
58,427
69,081
68,955
Dayton (3 )...............
42,793
49,625
49,473
Percentage
Change
Since
Aug. 28
Tune 30
1946
1945
+ 1.6%
+ .8%
+ .6 %
+ .5%
+.3%
+ 2.%
+.2%
-.1 %
- .1%
-.1 %
- .2%
- .3%
+26.3%
+23.9%
+18.9%
+11.4%
+17.4?
+18.3?
+14.9?
+20.2?
+19.3?
+20.3?
+18.0?
+15.6%
TOTAL— 12 Cities. .31,530,197 31,787,639 31,791,929
+ .2%
+17.1%
* of individuals, corporations and nonprofit associations.
** estimated— adjustment required by unavailability of data for two ab
sorbed banks.
Wholesale and Retail Trade
Percentage Changes
from Preceding Year
SALES SALES STOCKS
Sept.
first 9
Sept.
1946
months
1946
+29
+21
+39
+46
+2,6
a
+38
+34
+41
+35
+29
+39
+33
+31
+41
+22
+22
+25
+33
+ 44
+ 7
+12
+15
a
+27
+23
+39
+30
+48
+ fl
+30
+26
a
+33
+34
+18
+26
+ 30
+40
DEPARTMENT STORES (98)
Akron..................................................................
Canton................................................................
Cincinnati...........................................................
Cleveland............................................................
Columbus............................................................
Erie.....................................................................
Pittsburgh...........................................................
Springfield..........................................................
Toledo.................................................................
Wheeling.............................................................
Youngstown........................................................
Other Cities........................................................
District................................................................
WEARING APPAREL (15)
Cincinnati...........................................................
+18
+31
+ 11
Cleveland............................................................
+ 24
+ 37
+31
Pittsburgh...........................................................
- 8
+21
+42
Other Cities........................................................
+ 34
■" 4
4
+ 8
District................................................................
+10
+ 17
+37
FURNITURE (67)
Canton................................................................
+51
+46
+40
Cincinnati...........................................................
+71
+54
+30
Cleveland............................................................
+86
+49
+45
Columbus............................................................
+54
+56
+60
Dayton................................................................
+53
+71
a
Pittsburgh...........................................................
a
a
a
Allegheny C ounty.............................................
+86
+59
a
Toledo.................................................................
+91
+65
a
Other Cities........................................................
+66
+69
+50
District................................................................
+72
+57
+ 44
WHOLESALE TRADE**
Automotive Supplies (3 )....................................
+60
+57
a
Beer (5 )...............................................................
- 1
- 1
- 9
Clothing and Furnishings (3 )............................
+26
a
a
Drugs and Drug Sundries (4 )...........................
+39
+22
a
Fresn Fruits and Vegetables (11).....................
+ 5
- 1
+21
Grocery Group (35)...........................................
+51
+26
+45
Total Hardware Group (19).............................
+89
+46
a
General Hardware (7 )....................................
+ 69
+ 6
+ 50
Industrial Supplies (5 )...................................
+44
a
+ 9
Plumbing and Heating Supplies (7 ).............
+69
+34
a
Jewelry (8)..........................................................
+50
+37
+ 34
Lumber and Building Materials (3 ).................
+34
a
+36
Machinery, Equip. & Sup. (exc. Elect.) (3). . .
+68
a
a
Meats and Meat Products (3 )..........................
+ 10
a
-1 1
Paints and Varnishes (4 )...................................
+67
+45
a
Paper and Its_ Products (5 )...............................
+35
+ 16
a
Tobacco and its Products (15)..........................
+27
—
0—
+33
Miscellaneous (19).............................................
+ 68
+27
+17
District— All Wholesale Trade (147)...............
+48
+27
+34
** Wholesale data compiled by U. S. Department of Commerce, Bureau of
the Census,
a Not available.
Figures in parentheses indicate number of firms reporting sales
12
MONTHLY BUSINESS REVIEW
0Continued from Page 4)
O f the total nine-month increase o f 3240 million in
loans other than those on securities, roughly $175
million was offset by the decline in security loans.
It is interesting to note with regard to this reduction
in security loans that Fourth District reporting
banks’ holdings o f bonds rose to the extent that loans
on securities declined. It would thus appear that the
banks were disinclined to allow aggregate earning
assets to contract by the full amount o f collateral
loan liquidation.
In summary, it would appear that the increase in
the volume o f demand deposits during 1946 may be
attributed to the expansion o f loans, the growth in
commercial bank holdings o f Treasury bonds, and
the process o f drawing down Government deposits
in order to meet Treasury cash deficits and to retire
nonbank holdings o f Treasury securities. O f these
three sources o f additional demand deposits, com
mercial bank loan and investment portfolios have
been growing at a more and more rapid pace. How
ever, the effect o f Government deposit reductions on
demand deposits has o f course diminished with
progress toward a Treasury cash surplus.
In some ways, the increases that occurred in the
volume and flow o f money during the first three
quarters o f 1946 encouraged price advances, or at
least failed to discourage increases. Consumer loans
created added buying power at a time when the
supply o f goods was inadequate to meet the demands
o f cash buyers. Loans to business in many cases
placed funds in the hands o f consumers before added
goods were ready for sale. The additions to the
money supply occurred while the tendency to save
was diminishing and the propensity to spend was
rising.
Furthermore, this increase in the money flow was
taking place at the very time that price controls were
being relaxed. With the curtailment o f controls, the
power to determine prices was being restored to basic
November 1, 1946
demand and supply conditions, where changes had
long been neutralized by Government regulations.
Price increases which had been forestalled over a
period o f several years, therefore, were occurring in
large volume.
Fortunately, the volume of production was increas
ing during this nine-month period, thus modifying
the effect upon the price level o f the relaxation of
controls and the increased flow o f money. Actually,
it would appear that the increase in the money flow
was almost offset by the gains in supplies of goods
and services.
From the standpoint of the future, it is conceivable
that capacity production may soon be reached. If
that condition is matched by full expenditure (or in
vestment) o f monetary incomes, further injections of
money into the economic system would exert an
upward pressure on prices.
On the other hand increases in consumer loans and
real estate loans may merely keep buying power in
proper proportion to increasing supplies of goods and
housing. Commercial loans possibly may cease rising
as unbalanced inventories are corrected and overall
production levels off. For a time, loans on securities
may continue to decline and hence partially offset
advances in other loan and investment categories.
Furthermore, the banking community may become
increasingly cautious in granting loans and expanding
bond holdings, partly because the Treasury debt
retirement program is reducing liquidity positions and
partly because of doubts regarding the underlying
soundness of present business conditions.
In view of these considerations, it is difficult to
foresee whether the flow o f money in the coming
months will be on a parity with, or somewhat in
excess of, the volume o f business activity. However,
developments' bear careful watching, particularly be
cause of the tendency for commercial loans, consumer
credit, and commercial bank bond holdings to expand
more rapidly even though production appears to have
leveled off.
@FedFRASER