Full text of Economic Review (Federal Reserve Bank of Cleveland) : October 1951, Vol. 33, No. 10

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MONTHLY
O C T O B E R

1951

CONTENTS
Ohio Cross Sections (1)
. . . .
Editor’s N o t e .........................
Bryan-to-Fremont Area . . . .
Lima— Marion A r e a .................
T o l e d o ..................................
National Business Conditions . . .
Statistical T a b le s .........................
Sizing Up an Investment in Research

Review

1
1
2
4
6
10
11
12

FINAN CE • INDUSTRY • AGRICU LTURE • TRADE
FO URTH

Vol. 33— No. 10

FEDERAL

RESERVE

D IS T R IC T

Federal Reserve Bank of Cleveland

Cleveland 1, Ohio

Ohio Cross Sections (I)
Northwestern Ohio: Three Economic Areas
Including 22 Counties

southwestern Ohio; northeastern Ohio; and central
N o t e : This article is the first of a pro
and southeastern Ohio. A fifth and final article of
jected series of five which analyze Ohio’s eco
nomic activity in terms of a concept of “state the series will summarize for the state.
economic areas”. This geographical grouping has For each area, a selection of the most recent in
recently been devised by the Bureau of Census to
formation available is brought to bear on the popu
fill the wide gap be
latio n, manufacturing,
tween the county and
agriculture, trade and
the state as statistical
finance of the area, inunits in discussing eco
e l u d i n g comparisons
nomic developments.
with other areas of the
Ohio’s 88 counties
state.
are grouped into 21 eco
For more details on
nomic areas, each of
which is relatively ho
the area concept, and
mogeneous as to indussources of information,
tria liz a tio n , type of
see Appendix on page
agriculture, levels of in
7. A complete list of
come, etc.
Ohio’s 21 economi c
The present a rtic le
areas, with counties in
d e a l s with three eco
cluded, appears as Table
nomic areas (compris
II on page 9. Detail
ing 22 c o u n tie s) in
maps of the three north
n o rth w e ste rn Ohio.
Succeeding articles will
western areas treated in
cover in turn the vari
this first article adjoin
. . . this map shows the location of the three economic
ous economic areas of
areas of northwestern Ohio analyzed in this issue.
the text.

d it o r ’ s

Monthly Business Review

P age 2

October 1, 1951

Area 1.
BRYAN-to-FREMONT A re a 1
’
(10 counties)

WILLIAMS

Lyons °

FULTON

;
lii
Wauseon
w. l
o °
O

Pioneer Alvoixjton I
o

Montpelier °
o Edon
oBlakeslee

Bryan

®
DEFIANCE
Farmer o

O Ney

Mark
Cen.

o O

Hicksville

PAULDING

Fayette

®
Unity J Pettisvilte
L.
Arcbbold
Stryker f
HENRY
j
Q Ridgeville
Corners'
Evansport I

o Edgerton

.
o Cecil

Defiance

i
J_______

Liberty Cen.

H askin s°
r

McClure

j
I
PUTNAM

©Paulding

Grand
Ropids
o
Weston

^
O
Pemberville
® Bowling
© reen
Portage °
Bradner °

o °c in te r
Custar

Hoytsville

Deshler

ikeside
^Marblehead

SANDUSKY

] vi||e
O | : nJ sev
J
n
j
Gibsonburg
|
3
®
j Helena o
Frem ont

Burgoono

R isin g m m t m — m— m — m m m

J erTy

O Sun

C 'JV

M
illgrove

Bel more0

Continental _ ,
■o
0
o Leipsic o
Miller
Leipsic
° Dupont City

o
GlandorF ° @ O tta w aO *
Cloverdale
o Kalida
Pandora
j Ottoville
Columbus
Ft.
Grove O
1
-----1 O Jennings
I Vaughnsville O

Venedocia o
o Ohio
City
oElgin

Area 1 stands out as one of the richest agricul
tural areas in the state. It is the eastern gateway to
the nation’s great “com belt”. Farming and the
processing of foodstuffs are the backbone of the
economy, with almost 40% of the population living
on farms and gaining a livelihood directly from the
land, as contrasted with the Ohio average of about
15%. Only one other area in Ohio (Area 7, the
Chillicothe-Hillsboro area) has a larger percent of
its population living on farms than has Area 1. The
density of population of Area 1 is only 71 persons
per square mile (see Table I) which makes it the
(1) Boundaries of economic areas discussed in this series are as shown
in State Economic Areas, by Donald J. Bogue, Bureau of the Cen
sus, U. S. Department of Commerce, 1951. Two modifications
have been made; these apply, however, to areas to be treated in
later articles. (See Appendix.)
An area designated by a numeral such as Area 1, is classified as
“non-metropolitan”, while “metropolitan areas” are denoted by
letters, such as Area A, Toledo. In general, a metropolitan area
has a central city of at least 50,000 population and meets certain
other Census tests of population characteristics.

l Wo^

Catawba Island Bay

o
Baltimore Bloirds___________________ Q
n Bloomdole

Middlepoint
o Wren
.°
3Willshire

0 Rudolph P ™ " ? °
_
Depot. o

C y gn e t

j °

O Convoy

Luckey o

OTontogany

Grover
> Hill

Scott"

Van W e rt®

Delta

Homier

Broughton
_ n
. o O Oakwood O
O Payne Latty
o
Meirose

VAN WERT

j Holgate

a I

OTTAWA
RossFord” J Curtice
Walbridge| 0 o M
Perrysburg Mj||°l Clay
0 1
WOOD
bury] o Genoa
oRockyridge
------oO ak
Dunbridge
j
_

Swanton

Jewell 1

O Antwerp

Haviland O

I Napoleon

Sherwood

Metamora

third most sparsely populated area of the 21 eco
nomic areas of the state.
Only about one-fourth of the population lives in
urban centers, most of which are relatively small.
The largest city is Fremont with a reported popula
tion in 1950 of about 17,000. Next in line are
Bowling Green and Defiance, with 12,000 and
11,000, respectively. Other county seats in the area,
in order of population, are: Van Wert, Bryan, Port
Clinton, Napoleon, Wauseon, Ottawa and Paulding.
About one-third of the population of the area is
classified as rural non-farm, — an unusually high
proportion.
Farm Pros- Many economic indicators attest to
perity
the fact that Area 1 is prosperous as
well as agrarian. In 1949,(2) more
than $140 million in cash was received by farmers
in Area 1 for agricultural products, making the re
turn per acre of farm land $55.54, the highest of
any non-metropolitan area in the state. (See Table
I.) The excellence of the soil is one of the major
reasons for the high return per acre. Other impor
tant factors are the proximity to the large market
areas of Toledo, Detroit, and Chicago, an adequate
transportation system which permits ease of distri
bution, and the employment of up-to-date tech
niques in farming such as the rotation of crops, use
of hybrid seed, counter-erosion techniques, and ad
vanced methods of raising livestock.
(2) 1949 data are used here for agricultural comparisons between
areas, because that is the latest year for which certain detailed
data are available. Changes since 1949 would probably affect the
area comparisons very little, if at all.

October 1, 1951

Monthly Business Review

The land in most of the area is well suited
to the growing of grain crops such as corn,
wheat, oats and soybeans. Even though com and
wheat together comprise only about one-fourth of
all cash income, more farm land is planted in these
crops than in any other. Much of the grain is used
as feed for dairy cows, hogs, poultry, and beef cattle;
in large measure the grain shows up in cash income
indirectly from the marketing of livestock and live
stock products.
Com and hogs together account for about 26%
of the cash income from agricultural products of
the area. (Based on 1949 data.) Dairying is also
very important, and accounts for about 16% of
agricultural income, approximately the same as the
proportion represented by sale of hogs. (In each of
two counties, Fulton and Sandusky, the sale of dairy
products in 1949 brought in slightly more than 20%
of the total cash income. Both of these counties are
near the Toledo metropolitan area where dairy
products find a ready market.) Other leading agri
cultural products as sources of income to the area
are wheat, 14%, and poultry, 13%.
Sandusky and Ottawa counties along the Lake
harvest large crops of peaches, apples, grapes and
other fruit.
County
Although Area 1 has the highest cash
Differences
income per acre of all non-metro
politan areas of the state, differences
among the various counties are considerable, with
income ranging from about $37 per acre to about
$76 per acre. Fulton, Putnam, Henry, and Wood
counties are largely responsible for supporting the
high return for the whole area with each of them
receiving more than $60 per acre in cash income.
Fulton county ranks first of all non-metropolitan
counties in the state with approximately $76 as the
average income from the sale of agricultural prod
ucts. (1949 data.) Paulding and Defiance counties,
with less favorable soil, are relatively lowest in the
area in agricultural income per acre. Of Paulding
county’s total agricultural income, approximately
one-quarter comes from the sale of soybeans, while
dairying makes up the largest share (about 20%)
of Defiance’s income from agricultural products.
Industry The industrial side of Area 1 reflects in
in
part the agricultural predominance of the
Area 1 area.(3) About one-fourth of all manu
facturing establishments are concerned

Crops

(3) Although transportation facilities are not separately described in
these studies, it should be noted here that Area I has unusual
transportation facilities (rail, water and highway)—perhaps some
what out of proportion to the actual industrial development of
this particular area. The projected East-West Turnpike will also
pass through the area.
Furthermore, the maps shown here omit rivers. In Area 1, the
Maumee River (largest river emptying into the Great Lakes) runs
through four counties of the area.

P age 3

with the processing of food products, with 11 estab
lishments employing 100 or more workers. Among
them are some of the largest canneries in the state,
a high concentration of milk condensaries, and
three of the four sugar-beet factories of Ohio.
Besides the manufacturing of food products, other
major industries of the area are stone, clay and
glass products; wood products; fabricated metals;
and the electrical and non-electrical machinery in
dustries. Many of the establishments are small.
Only about 12% of the plants employ 100 or more
workers. Sandusky, Wood, Defiance, and Ottawa
lead other counties in the area both in number of
establishments and in number of employees. Among
other products made in the area are auto glass in
Wood County (near Toledo) and auto accessories
in Bryan and Fremont.
About 30,000 workers in the area were engaged
in some type of manufacturing during 1950, or
only about 10% of the population. In the latter
respect Area 1 ranks 16th of the 21 economic areas
of the state, as seen by Table I.
The value of manufacturing in relation to the
number of manufacturing workers employed, how
ever, is relatively high in this area. Approximately
$5600 was the value added per worker in manufac
turing industries during 1947 which was compara
ble to the value added per worker in Toledo; it
exceeded the value added per worker in Akron,
Dayton, Canton, and Youngstown (all highly in
dustrialized metropolitan areas) and ranked 7th
among the state’s 21 economic areas in this respect.
The high score in value of manufacturing per
worker suggests a mixture of industries which have
a relatively large investment in equipment in rela
tion to employees hired, or relatively high efficiency,
or both. Processing of food and feed products,
which is prominent within the area, involves charac
teristically a large investment per employee. Exam
ples are sugar-beet plants, and establishments making
soy-bean products and livestock feeds.
Average weekly earnings of manufacturing work
ers in Area 1 ranked 13th among Ohio’s 21 areas,
or about $65 per week in 1950.
Since the economy of Area 1 is largely cen
tered around agriculture, and with most of
its population living in rural areas, retail and whole
sale trade does not play a large role in the economic
activity of the community. In 1948, according to
the Census of retail trade, sales of retail outlets
amounted to about $835 per capita, or 14th of the
21 economic areas studied. Proximity to the Toledo,
Detroit and Cleveland trading centers probably ac
counts in part for the relatively low per-capita sales
of stores located in the area.

Trade

Monthly Business Review

Page 4

October 1, 1951

commercial banks plus withdrawable shares in sav
ings and loan associations) amounted to $152 mil
lion on the same date, the equivalent of $502 per
capita. In this respect the area ranks 11th out of
the state’s 21 economic areas.

Commercial banks located in Area 1 had
about $91 million of demand deposits at
the end of last year. In this respect, the area ranks
13th of Ohio’s 21 economic areas.
Savings accounts (in the form of time deposits at

Finance

Area 2.
LIMA-MARION Area
(11 counties)
c c f j c r T o ° Bettsville.
Kansas

HANCOCK

o
McComb

o Van
Boren

t Fostoriai

o Bascom

® FINDLAY

o Mt. Cory
Jenera °

Bluffton0
I Delphos
ALLEN

o Cair0 o
Beaver-

°
Gomer

HARDIN

dam

O Elida

Ada

MERCER
Rockford °

o S p e n c e rv ille

o °

Mendon

uAUGLftfzE

Mercer

M o n te z u m a 0

O Coldwoter
ChickasawQ
Ft.
O St. Henry
Recovery
Mar,a

St.
Mary’s
O N e w K n o x v ille _

New .
Bremen |

, „
Dunkirk0

Tiro

Upper
Forest®! Kirby Sandusky

o I
Patterson |

Nevada

^
St
J 0hns

o Osceola

Bucytus®

N. Robinsor
Crestline*
Galiong

oHarpster

I__T °_-----f

0 Alger

W g jJ* -

°-Morral

| MARION
Caledonia 0
Hepburn*"

New
Hampsnir

Mt.
o Roundhead
Victory
--------------------Ridgeway
°
,
rLO GAN ~
—
° Center ° B i g ^ ^ N I O N
oRussell
o
Springs I
la k e -'
Point
vieW H u n t s v ille O

Minster!

B u r k e t t s v i l l e _________ S t e i n ^

Kenton

UniopolisC
C elin o ®

________________
CRAWFORD
Chatfield ° N ew °
Sycamore
Washington

Mtf* Carey
Blanchard I
° j—* WYANDOT
Arlington
I O Wharton

McGuffey o F ° raker

C riJm v iH .

W apakoneta^

•

Bloomville O
o Mel more

Marseilles

!_______ 1

B u iU a n d O

New
Riegel

Vanlue Oi"McCutchenville

Lim a® LQf°yetle0,
Horrod

Tiffin

Arcadia

0 Bento..
Ridge
Rawson

Green
Springs p|Qt g,

R u s h s y lv o n ia

® Marion
Q
°N e w
La Rue Bloomington

wGreen Camp° 0 Owen
,
In
t Waldo
| Prospect

Richwood

West Mansfield oj

Bellefontaine ®
O D eg ro rr

5Quincy

QZanesfield |
East Liberty o 1

Magnetic0
O R a y m o n d ~>prs'

Middleburg O J
D Liberty
W.
I
New Dover
O Milford Center
Unionville o
Center

Area 2 lies just south of Area 1 previously de
scribed. Like the latter, it lies mainly within the
level com belt and is characterized by highly pros
perous agriculture. Area 2, however, has larger
cities than Area 1, and industrial development is
greater. The largest city is Lima,(4) with a popula
(4) The Census Bureau now classifies Lima as a “standard metropoli
tan area” for certain statistical purposes. However, the population
of Allen county (about 88,000) is below the minimum which is
used as a test for listing a county separately as a metropolitan
state economic area.

tion of about 50,000 reported in 1950, followed by
Marion with 34,000 and Findlay with 24,000.
Other county seats in the area, in order of popula
tion, are: Tiffin, Bucyrus, Bellefontaine, Kenton,
Wapakoneta, Celina, Upper Sandusky and Marys
ville.
When ranked according to population per square
mile, Area 2 is 16th of the 21 economic areas of
the state. It has an average density of population
of about 88 persons per square mile. Nearly onethird of all the people live on farms, about one-half

October 1, 1951

Monthly Business Review

live in urban centers, and the remaining fifth live
in rural areas but are not engaged in farming.
Farm In- In 1949 farmers of the area received
come
approximately $157 million from the
sale of agricultural products which was
more than 16% of the state total. Although that
represented about $2 less per acre than in Area 1,
farmers in Area 2 received the third highest income
per acre of the 8 non-metropolitan areas, and re
ceived $10 more per acre than the average farmer
in the state. The sale of hogs led all other incomeproducing farm commodities, with sales amounting
to 26% of total cash income. Other leading income
products were: dairy, 19% of total cash income;
poultry, 11%; wheat, 11%; com, 9% ; soybeans,
5% ; and beef cattle, 4%.
Counties with the highest monetary return per
acre within Area 2 are Auglaize and Mercer with
cash income per acre (of farm land) of $63.08 and
$57.54, respectively, in 1949.
Farmers in Area 2 as a whole have the highest
“level-of-living” of the 8 non-metropolitan areas of
the state according to an index computed in 1945
by the U.S. Department of Agriculture. The index
is based in large part on the number of farm fami
lies which have electricity, telephones, and auto
mobiles. (The “level-of-living” index is not in
cluded in Table I, because data more recent than
1945 are not yet available.)
Industry Although Area 2 ranks only 12th highest
also
of the state’s 21 economic areas in perStrong
cent of population employed in manufac
turing, only one other non-metropolitan
area (Area 4, the Sandusky-Mansfield area) has a
larger percent of its population engaged in manu
facturing. In 1950 about 11% of all persons liv
ing in Area 2 were employed in manufacturing
establishments.
There are 607 manufacturing establishments in
Area 2, according to the 1947 Census of Manufac
tures. These include 104 large establishments em
ploying 100 or more workers in each plant. The

P age 5

machinery industry employs the largest number of
workers and makes up about one-third of all the
larger establishments.
Among the important manufactures in the area
are plants making turbines, road machinery and
school busses, as well as an oil refinery, — all located
in or near Lima; rubber products and machinery in
* Findlay; machinery and appliances around Marion
and Bucyrus; porcelain ware, glass products and
appliances in Tiffin; wire products and auto equip
ment in Fostoria; furniture and farm tools in Mer
cer county.
The average weekly wage in manufacturing estab
lishments of Area 2, in 1950, was $63.24, or 16th
of the 21 economic areas of the state. Value of
manufacturing according to the 1947 Census of
Manufactures was $258 million, or $5,059 per
manufacturing employee. In the latter respect, Area
2 ranked 13th of Ohio’s 21 areas. (See Table I.)
Retail stores in Area 2 sell more goods per
person than stores in any other non-metro
politan area of the state. In 1948 retail sales aver
aged $933 per capita, the highest volume of sales
per person in the eight farming areas and 9th high
est when ranked with all 21 economic areas in Ohio.
Average retail sales per capita are higher than in
the metropolitan areas of Hamilton-Middletown,
Youngstown, and Lorain.
Trade

In respect to bank deposits and savings
also, Area 2 ranks higher than most eco
nomic areas of the state including several of the
metropolitan areas. Thus, with $169 million in
demand deposits of commercial banks located within
its borders (as of the end of last year) the area
ranks 6th among Ohio’s 21 economic areas.
Savings accounts (time deposits at commercial
banks plus withdrawable shares in savings and loan
associations) amounted to $252 million on the same
date, or $582 per capita. In this respect the area
ranks 5th of Ohio’s 21 economic areas, — an unusu
ally high ranking for a predominantly non-metro
politan area.
Finance

P age 6

Monthly Business Review

October 1, 1951

Area A.
TOLEDO
(Lucas County)

B erk ey 0 tt.w « Hill«0
TO LEDO

LUCAS

O Holland
Maumee
Whitehouse
°
c
Waterville>

Hasretrom Co.

Economic activity in Lucas county is dominated
by the industrial pace of Toledo, although consider
able farming is done in the western and southern
portions of the county. The favorable location of
Toledo at the mouth of the Maumee River as it
empties into the Maumee Bay and Lake Erie is a
principal economic asset. The city’s population,
according to the 1950 Census, is about 304,000 or
fourth in the state.
Toledo Toledo port facilities, which have always
os a
been of strategic importance, have been enPort
larged since World War II and now admit
ocean-going vessels. In total tonnage of
Great Lakes shipping, Toledo ranks first in the state;
more soft coal is shipped than from any other port
of the world, and shipments of iron ore, lumber and
grain also rank high. The city is an important rail
and truck center, with terminals linking with the
port facilities.
Manufac- Of the total Lucas county population
turing
about 17% are employed in manufac
turing, — a proportion which is higher
than the Ohio or U. S. average, but lower than most
other metropolitan counties of the state. (See Table
I.) Total dollar value added by manufacturing,
according to the 1947 Census of Manufactures, was
$390 million, or more than 6% of the value added
by manufacturing in the state of Ohio.
Lucas county ranks 6th of 21 economic areas of
the state, when the value added by manufacturing
is related to the number of employees. That is, the
combination of labor, capital, and management
results in approximately $5600 as the value added
by manufacturing per manufacturing worker.
The average weekly wage of all manufacturing
workers in Lucas county was $75.83 in 1950, rank
ing second among the state’s 21 economic areas,
just a few cents below the average weekly earnings

of workers in the Hamilton-Middletown metropoli
tan area which ranked first. A high concentration
of heavy industry in Toledo is one of the major
factors contributing to this result.
Leading Manufacture of auto parts (as well as
Indussome auto assembly), oil refining, and glass
tries
making are considered Toledo’s leading in
dustries. Numerous other industries, tend
ing to be in the hard-goods lines rather than soft
goods, include shipbuilding as well as production of
machine tools, scales, appliances, plastics, coated
textiles, paints, and food products.
The county includes 627 manufacturing estab
lishments as reported by the 1947 Census of Manu
factures. Of these, 100 establishments employ more
than 100 workers each. The largest concentration
of establishments employing more than 100 workers
is classified as machinery, with 16 in the non-electri
cal machinery category and 6 in the electrical
machinery industry. (These data are exclusive of
several large plants located in adjoining Wood
county, which are part of the Toledo industrial
complex.)
Lucas county leads all other areas in
Ohio in average dollar sales of retail
trade per person. In 1948, retail trade
was valued at $443 million, which
amounted to $1120 per capita, as shown in Table I.
Factors which may help to explain this showing are
•the following: First, the drawing power of Toledo’s
trading area is not limited to Lucas county but
covers a much wider range, including smaller cen
ters in Area 1. Second is the fact that average
weekly earnings in Toledo are high.
As a consequence of its strong trading position,
more than 8% of the population of Toledo is em
ployed in either wholesale or retail trade. Only
Cincinnati and Columbus have a higher percentage
Top Rank
in
Trade

October 1, 1951

Monthly Business Review

of population employed in trade, among Ohio’s
metropolitan areas.
There are approximately 2000 farms
in Lucas county, mostly of small
acreage but high returns per acre.
From the sale of agricultural prod
ucts, Lucas county farmers received the second
highest dollar return per acre of the 21 economic
areas of the state in 1949, or an average of $84.36
per acre of cropland. Almost one-fourth of total
cash income originates from the sale of produce
from truck farms, while greenhouse products ac
count for about 16% of cash farm income, hogs
Truck Crops
and
Greenhouses

P age 7

and wheat 9% each, and poultry and com 8% each.
Commercial banks located in Toledo or
Lucas county reported $260 million of
demand deposits at the end of last year. In this
respect the area ranks 4th of the state’s 21 economic
areas, — comparable with Toledo’s position as the
fourth largest city of the state.
Savings accounts (in the form of time deposits
at commercial banks plus withdrawable shares in
savings and loan associations) amounted to $206
million on the same date or $521 per capita. In
this respect the area ranks 9th among Ohio’s 21
economic areas.
Finance

(Tables I and 11 appear on following pages)

APPENDIX

General Sources. Grouping of counties into economic
areas is drawn from State Economic Areas, by Donald J.
Bogue, Bureau of the Census, U. S. Department of Com
merce, 1951. (Exceptions in the case of two areas are ex
plained below.)
Data on individual counties are from latest available
official sources. Combination of county data to compute
area totals and ranks was done by this Bank.
Characterization of areas in the text has been checked in
each case by local consultants, whose advice is gratefully
acknowledged.
Modification of Census Areas. The Census volume en
titled State Economic Areas, cited above, includes Clark
county (containing the city of Springfield) within non
metropolitan Area 3, along with 11 other counties. The
same volume likewise includes Lorain county (containing
the cities of Lorain and Elyria) within non-metropolitan
Area 4, along with 7 other counties.
The results of the 1950 Census of Population, however,
were not completely available at the time the Census
delineation of state economic areas was made. As a result
of the 1950 Census of Population it appears that Clark
county and Lorain county, respectively, now meet the
tests for determining metropolitan state economic areas.
They are so treated in this series of articles, and non-metropolitan Areas 3 and 4 are correspondingly reduced.

The designations “M” and “N” for metropolitan Clark
and Lorain counties, respectively, have been used here,
pending publication by the Census Bureau of revised
classifications of state economic areas.
Names of Economic Areas. In the case of metropolitan
areas, the names used in this series of articles are the
standard names used in State Economic Area and approved
by the Federal Interagency Committee, (e.g. “Cleveland”
for Cuyahoga and Lake counties.)
In the case of non-metropolitan areas, however, standard
names have not yet been designated. (State Economic
Areas refers to each non-metropolitan area merely by its
number and by a listing of all counties included.) To facili
tate recognition of the areas described in these articles,
provisional names have been devised; they are based in
most cases on the two largest cities contained within the
particular area. (An exception is Area 1 where the names
of the two largest cities would give a mistaken impression
of the geographical location of the area; hence the use of
“Bryan-to-Fremont” to designate Area 1.) Inclusion of de
tail maps accompanying the text should make clear the
entire compass of the respective areas.
Official names of the non-metropolitan areas are now
being prepared by the Census Bureau, with the aid of
local consultants.

P age 8

Monthly Business Review

October 1, 1951

Table I
BASIC ECONOMIC FACTS FOR THREE ECONOMIC AREAS OF NORTHWESTERN OHIO

Metropolitan Non-Metropolitan
Area A
Area 1
Area 2
TOLEDO BRYAN, etc. LIMA, etc.
(1 county) (10 counties) (11 counties)
POPULATION
1. Population, 1950...........................................................thous.
2. Land area...........................................................Square miles
3. Population per square mile, 1950.........................................
Rank jmnnng ftlii'n’i) ^1 economic stfiis,
MANUFACTURING
4. % of population employed in manufacturing, 1950..........
Rank among Ohio’s 21 economic areas............................
5. No. of establishments employing 100 or more, 1947.........
6. Value of manufacturing, 1947................................mil. dol.
7. Value of manufacturing per mfg. employee, 1947... .dol.
Rank among Ohio’s 21 economic areas............................
8. Average weekly earnings per mfg. worker, 1950.........dol.
Rank among Ohio’s 21 economic areas............................
AGRICULTURE
9. Cash income from agriculture, 1949..................... mil. dol.
10. Cash income from agriculture per acre, 1949..............dol.
Rank among Ohio’s 8 non-metropolitan areas...............
TRADE
11. Retail sales, 1948......................................................mil. dol.
12. Retail sales per capita, 1948...........................................dol.
Rank among Ohio’s 21 economic areas............................
FINANCE
13. Demand deposits in commercial banks, Dec. 31, 1950
mil. dol.
Rank among Ohio’s 21 economic areas............................
14. Savings accounts (commercial banks and savings & loan
assoc.) Dec. 31, 1950........................................... mil. dol.
15. Savings accounts per capita, Dec. 31, 1950..................dol.
Rank among Ohio’s 21 economic areas............................
Sources o f Item s Shown in Table 1. Specific sources of items shown
in Table I, together with explanations of certain items, are given
below: :
Item 1 and all per capita items: Census of Population, 1950
Item 2: Webster’s Geographical Dictionary
Items 4 and 8: Ohio Bureau of Unemployment Compensation, 1950
Items 5, 6, and 7: Census of Manufactures, 1947; "value of manu
facturing” refers to value added to product (i.e. excluding value
of raw materials)

Ohio

U.S.

963
343
1,153
3rd

303
4,256
71
19th

434
4,924
88
16th

7,947
41,122
193

150,697
2,977,128
51

16.9
9th
100
390.0
5,603
6th
75.83
2nd

9.6
16th
60
143.7
5,602
7th
64.84
13th

11.2
12th
104
257.9
5,059
13th
63.24
16th

15.0

9.9

1,946
6,359
5,323

24,542
74,426
5,206

11.2
84.36

142.3
55.54
1st

156.8
53.07
3rd

954.4
43.52

28,127
24.64

442.9
1,120
1st

252.6
835
14 th

404.4
933
9th

7,373
928

130,520
866

260.1
4th

91.3
13th

169.2
6th

4,234

90,999

206.3
521
9th

151.9
502
11th

252.3
582
5th

4,539
571

68,970
458

69.56

Items 9 and 10: Ohio State University and Ohio Agricultural Ex
periment Station; refers to gross cash income excluding govern
ment payments.
Items 11 and 12: Census of Business, 1948
Item 13: Federal Reserve System; refers to demand deposits of indi
viduals, partnerships and corporations.
Items 14 and 15: Ohio Department of Commerce, Federal Home
Loan Bank of Cincinnati, and Federal Reserve System; refers to
time deposits at commercial banks plus deposits at Ohio’s few
mutual savings banks, plus value of withdrawable shares of sav
ings and loan associations (both state and federal-chartered)

October 1, 1951

Monthly Business Review

Page 9

Table II

LIST OF OHIO'S 21 ECONO M IC AREAS
Each area designated by a letter is a m etropolitan
area, w hile the num bered areas are “non-m etro
p o litan ”.
N O R T H W E S T E R N O H IO
1. Bryan-to-Frem ont area
Counties included: Defiance, Fulton, Henry,
Ottawa, Paulding, Putnam , Sandusky, Van
W ert, W illiam s, W ood.
2. Lim a-M arion area
Counties included: Allen, Auglaize, Crawford,
Hancock, H ardin, Logan, M arion, M ercer,
Seneca, U nion, W yandot.
A. T oledo area
Lucas county
SO U T H W E ST E R N O H IO
3. Piqua-D elaw are area
Counties included: Cham paign, Clinton, Darke,
Delaware, Fayette, M adison, M iami, Pickaway,
Preble, Shelby, W arren.
“M ”. Springfield area*
C lark county
C. D ayton area
M ontgom ery and G reene counties
D. H am ilton-M iddletow n area
B utler county
K. C incinnati area
H am ilton county
N O R T H E A S T E R N O H IO
4. Sandusky-Mansfield area
Counties included: Ashland, Erie, Holmes,
H uron, M edina, R ichland, W ayne.

5. Ashtabula-East Liverpool area
Counties included: A s h t a b u l a , Colum biana,
Geauga, Portage.
E. Cleveland area
Cuyahoga and Lake counties
“N ”. L orain—Elyria area*
L orain county
E. A kron area
Sum m it county
G. C anton area
Stark county
H . Youngstown area
T rum b ull and M ahoning counties
C E N T R A L A ND SO U T H E A S T E R N O H IO
B. Colum bus area
F ranklin county
6. Zanesville-Newark area
Counties included: Carroll, Coshocton, Fairfield,
Guernsey, H arrison, Knox, Licking, Morrow,
M uskingum , Perry, Tuscarawas.
7. C hillicothe-H illsboro area
Counties included: Adams, Brown, Clermont,
H ighland, Ross.
8. Portsm outh-M arietta area
Counties included: Athens, G allia, Hocking,
Jackson, Meigs, M onroe, M organ, Noble,
Pike, Scioto, V inton, W ashington.
J. Steubenville area
Belm ont and Jefferson counties
L. Iro nto n area
Lawrence county
* Clark and Lorain counties have been added to the state "metropoli
tan areas” listed in Bogue, “State Economic Areas”, op.cit. (See
Appendix)

Monthly Business Review

P age 10

October 1, 1951

SUMMARY OF NATIONAL BUSINESS CONDITIONS
By the Board of Governors of the Federal Reserve System
(Released for Publication October 1, 1 9 5 1 )

Industrial production continued somewhat below
first-half levels in August and September, reflecting
mainly reduced output in consumer goods indus
tries. Consumer buying has been at somewhat higher
levels than in early summer and distributors’ inven
tories apparently have been reduced further. Prices
generally showed little change after mid-August.
Bank loans to business, mainly for defense and agri
cultural and other seasonal purposes, expanded over
this period.
Industrial production

The Board’s index of industrial production in
August was 218 per cent of the 1935-39 average, as
compared with 213 in July and an average of 222 for
the first half of the year. Preliminary indications
point to little change in September.
Durable goods production increased but remained
below the June rate. Activity in munitions and pro
ducers equipment industries generally expanded,
despite work stoppages in an important machinery
industry. Output of consumer durables showed little
change from the reduced July rates. In the latter
part of September steel mill operations were sched
uled at 102 per cent of capacity as compared with a
rate of 98.5 per cent in July and August. Output of
copper and some other nonferrous metals was con
siderably reduced as a result of a labor dispute in
late August and early September, and in mid-Septem
ber aluminum production was curtailed somewhat
owing to power shortages. Passenger car assembly
for the third quarter was close to the authorized
lev e l of 1.2 million units.
Output of textiles, leather products, and paper
board in August showed smaller increases than usual
for this season. Chemicals production rose further
and output of most other nondurable goods con
tinued in large volume.
Bituminous coal mining expanded in August and
early September. Peak levels of output of crude
petroleum and iron ore continued.
Construction

Value of construction contracts awarded declined
somewhat in August, reflecting decreases for most
types of public construction. Private awards showed
little change. The number of housing units started
in August was 85,000, about the same as in July but
almost two-fifths below August 1950. Value of work
put in place on industrial construction projects con
tinued to rise in August and was double year-ago
levels.
Employment

The labor market showed little change during
August. Employment in nonagricultural establish
ments, after adjustment for seasonal factors, con
tinued at the earlier high level of 46.6 million per
sons. The average work week in manufacturing in
dustries remained at the moderately reduced July

level and average hourly earnings were maintained at
peak rates. Unemployment declined somewhat in
August to slightly less than 1.6 million persons, the
lowest since October 1945.
Distribution

Seasonally adjusted value of sales at department
stores rose about 3 per cent in August to a level of
319 per cent of the 1935-39 average, but during the
first three weeks of September sales showed a less
than seasonal rise. Sales at most other retail outlets
also increased slightly in August and in early Sep
tember automobile sales were stimulated by pros
pects of price advances. Value of department store
stocks, seasonally adjusted, declined in August to a
point 10 per cent below the spring peak.
Com m odity p rices

Wholesale commodity prices have generally shown
little change since mid-August. Prices of textile mate
rials have declined further, but during the past 10
days raw cotton prices have advanced as producers
have restricted marketings at present prices. Among
finished goods, prices of shoes, carpets, and sheets
have been further reduced, while wholesale prices of
new passenger cars were raised about 5 per cent in
mid-September, following revision in Federal ceilings.
The consumers price index in August was un
changed from July. Slight declines in prices of foods
and housefurnishings were offset by increases in rents
and in prices of apparel and miscellaneous goods
and services.
Bank cre d it and the money supply

Bank credit rose moderately during August and
the first half of September reflecting some seasonal
borrowing by businesses. Loans to food manufac
turers and commodity dealers to finance the distribu
tion and processing of crops began in the Augustearly September period and loans to finance direct
defense contracts and defense-supporting activities,
particularly loans to metal manufacturers, expanded
further.
Deposits and currency held by businesses and in
dividuals increased considerably in August and early
September. This reflected both expansion in bank
loans and a continuing shift of deposits from Govern
ment to private accounts prior to the receipt of
mid-September income tax payments.
S ecu rity markets

Common stock prices in the second week of Sep
tember reached the highest levels since April 1930
and then declined somewhat in the third week.
Yields on U. S. Government securities and high-grade
corporate bonds showed little change. Holders of the
3 per cent Treasury bonds called for payment Sep
tember 15 and the ly4 per cent notes which mature
October 1 were offered an exchange into an 11month 1y8 per cent certificate of indebtedness.

Monthly Business Review

October 1, 1951

P age 11

FINANCIAL AN D OTHER BUSINESS STATISTICS
Time Deposits*
at 54 Banks in 12 Fourth District Cities

(Compiled September 12, and released for publication September 13)
Average Weekly Change During:
City and Number Time Deposits
August
July
August
of Banks
Aug. 29, 1951
1951
1951
1950
Cleveland (4)......... ..$ 884,029,000 +$ 650,000 +$ 721,000 —$1,483,000
Pittsburgh (9)....... .. 497.765.000H + 694,000 + 244,000 — 424,000
Cincinnati (7)......... .. 175,966,000 + 91,000
58,000 — 230,000
Akron (3)............... .. 100,566,000 + 109,000 + 50,000 — 183,000
Toledo (4).............. .. 110,407,000H + 246,000 + 331,000r — 158,000
Columbus (3)......... .. 87,468,000H + 47,000 + 119,000 — 91,000
Youngstown (3)__
63,205,000 + 99,000 + 131,000 — 168,000
Dayton (3)............. .. 46,708,000 + 121,000 + 128,000 — 32,000
Canton (5).............. .. 43,813,000 + 270,000 + 80,000 — 65,000
Erie (3 ...................
42.022.000H + 81,000 + 104,000 — 1,000
Wheeling (5)...........
26,476,000
4,000 + 34,000 — 28,000
Lexington (5).........
10,977,000 — 32,000 + 30,000 — 54,000
TOTAL—12 Cities.$2,089,402,000H +$2,372,000 +$l,914,000r —$2,917,000
H—Denotes new all-time high,
r—Revised.
Time deposits at reporting banks in 12 Fourth District cities established a new
all-time high of $2,089,402,000 at the end of August with an average weekly rate of
increase of $2,372,000 during the month. This was a record postwar rate of expan
sion for August, and marked the fifth consecutive month of expansion. Moreover; it
is the first tim e since 1947 that time deposits have risen without interruption
throughout the spring and summer months.
The inflow of savings in August this year contrasts sharply with net withdrawls
at a rate of $2,917,000 per week in the same month of 1950, associated with the first
Korean wave of scare-buying.
Every city except Wheeling and Lexington reported gains in time deposits, in
contrast to declines in all cities in August last year. The rate of decline at Wheeling
was nominal, $4,000 per week, and at Lexington a reduction of savings deposits was
reported in August in each of the previous three years also.
Pittsburgh, Toledo, Columbus, and Erie again registered new all-time highs. In
all these cities the immediate post-Korean buying surge appeared to have relatively
little effect in retarding time deposits.
The marked recovery of savings deposits at Cleveland banks following a general
downtrend since early 1949, continued with a rate of increase of $650,000 per week.
As a result, tim e deposits at reporting Cleveland banks at the end of August were
higher than on the corresponding date of 1949 for the first time in eighteen months.
Adjusted Weekly Index
of Department Store Sales*

Fourth District
(Weeks ending on dates shown, 1935-39 average0 100)
1950r
1951
.425 July 1 .... 337 July 7 .... ..314
.412
8 .... 322
14 . 330
.443
1 5.... 3.14
21 . .325
22.... 388
398
28.... 315
2 9 .... 418
4 ....
.287 Aug.
Feb.
374 Aug. 11.... .314
.359
.309
.354
18.... .310
25 , 315
365
26.... 323
1 .... 290
302
Mar.
2 295 Sept. 8 .... .315
.293 Sept. 0 324
266
16 345
22.... .319
251
23 318
29.... .356
293
30 ... 335
Oct. 6___
297 Oct. 7 ,,. 297
Apr.
13 .
14 307
311
20
323
21.... 287
27
28 298
358
3
4
,336 Nov. 11.... 280 Nov. 10 .
May
281
312
17
313
24
312
Dec. 2 .... 195 Dec. 1 ....
June 2 . . . ..309
9 .... 3?8
8 ....
9 311
15___
16.... 334
16 804
22....
23.... .314
23 .312
29
30 342
30...
* Adjusted for seasonal variation and number of trading days. Based on sample
of weekly FRASER
Digitized for reporting stores which differs slightly from sample reporting monthly.
1950r
Jan. 7 278
14.... 310
2 1.... 320
28.... 308
Feb. 4 .... 293
11.... 308
18.... 279
25.... 255
Mar. 4 . 258
11 279
18 .. 264
2 5 .. 263
Apr. 1 .... ,28J>
8 279
15 . 262
22... 283
29 . 834
May 6 ... 299
13... 296
20 ,. 299
27,,. 295
June 3 ... 295
10... 314
17.... 309
24.... 306

Jan.

1951
A
13
20
27
3
10
17 ,
24
3
10
17 ,
24
31. .
7 ,,
14
21
28,,.
5
12
19
26 ..

Bank Debits*-—August 1951
in 31 Fourth District Cities

(In thousands of dollars
______(Compiled September 19, and released for publication September 20)
No. of
% Change 3 Months % Change
Reporting
August
from
Ended from
Banks_________________________1951_____ Year Ago Aug. 1951 Year Ago
181 ALL 31 CEN TER S...............$9,342,840 +10.9% $38,646,025 +58.4%
10 LARGEST CENTERS:
5 Akron..............................Ohio 344,677 +22.2%
$1,113,078 +36.3%
5 Canton............................Ohio 144,395
+14.7 447,250 +18.7
14 Cincinnati...................... Ohio 1,116,053
+ 7.5
3,475,173 +14.7
10 Cleveland...................... Ohio 2,385,743
+17.3
7,495,006 +22.4
7 Columbus...................... Ohio 652,265 — 4.3
1,850,984 + 0.2
905,224 +15.3
4 Dayton...........................Ohio 292,375 + 9.7
6 Toledo............................Ohio 452,851 + 8.8
1,366,434H +14.6
4 Youngstown.................. Ohio 210,684 +15.5
633,006 +18.0
355.303H +16.1
5 E rie............................. Penna. 116,738 +12.3
44 Pittsburgh..................Penna. 2,807,784 +10.1
8,571,953 +18.5
104 TOTAL.................................. $8,523,565 +10.9% $26,213,411 +17.8%
21 OTHER CENTERS:
9 Covington-Newport.......Ky. $ 46,230 — 2.9% $ 139.633H + 1.5%
6 Lexington........................ Ky. 70,911 + 4.8
195,453 + 5.9
83.172H +23.0
3 Elyria............................. Ohio 27,924 +21.3
3 Hamilton....................... Ohio 52.746H +14.6
156.380H +20.2
2 Lima...............................Ohio 61,060 +11.8
183.734H +17.9
5 Lorain.............................Ohio 22.608H +17.7
66.551H +19.1
4 Mansfield....................... Ohio 51,774 + 6.5
161,890 + 9.0
2 Middletown...................Ohio 56.510H +33.8
160.703H +32.4
3 Portsmouth...................Ohio 23,657 + 3.0
72,390 + 8.7
165,727 +13.7
3 Springfield..................... Ohio 57.627H +13.1
4 Steubenville.................. Ohio 28,200 +11.3
83.852H +10.9
2 W arren............................Ohio 53,434 +19.8
160,373 +22.5
3 Zanesville...................... Ohio 32,088 + 3.4
95,841 + 7.1
3 Butler..........................Penna. 38,874 +12.8
114,212 +11.9
1 Franklin......................Penna.
8,574 + 6.9
24,375 + 4.3
2 Greensburg.................Penna. 26,219 + 3.2
78.931H + 9.2
4 Kittanning..................Penna. 12,326 +16.2
37,538 +18.8
3 Meadville................... Penna.
15,514 + 0.7
46,644 + 3.8
4 Oil C ity...................... Penna.
19,808 + 0.8
61,568 — 0.9
5 Sharon.........................Penna.
36,598 +15.4
109.164H +19.4
6 Wheeling.................... W. Va.
76,593 + 3.9
234,483 +11.0
$ 2,432,614 +13.2%
77 TOTAL.................................. $ 819,275 +10.3%
*—Debits to all deposit accounts except interbank balances.
H—Denotes all-time high.
Debits to deposit accounts (except interbank) in 31 Fourth District cities during
August totalled $9,342,840,000 virtually the same as in July, whereas seasonally the
August figure is usually slightly smaller than the July total. The failure of debits
to show a decline in August may be attributable in part to Treasury withdrawals
from Tax and Loan accounts at commercial banks.
In comparison with August last year, debits showed an increase of 10.9%, the
smallest margin in more than a year, reflecting the levelling off of debits activity
during the spring and summer in contrast to the rapid expansion in the same period
of 1950.
TEN LARGEST CENTERS
Debits at the large centers in August fell slightly below the July level but still
established a record for the month, 10.9% above the year-ago figure. However,
half of the cities registered increases over the July volume.
Akron continued to lead in year-to-year comparisons with a margin of 22.2%, but
for the first time since February, Akron debits for the past three months combined
failed to register a new all-time high. Cleveland and Youngstown also scored in
creases of more than 15% over August 1950.
At Pittsburgh banks, the year-to-year increment dipped to 10.1%, below the
average for the ten large cities, but in comparison with August 1948, Pittsburgh
ranked second with an increase of 45%.
TWENTY-ONE SMALLER CENTERS
Debits at the smaller centers in August exceeded the July volume, in contrast
to the usual seasonal movement and to the decline at the large centers. All but two
of the smaller centers, Lima and Portsmouth, reported higher debits totals in
August than in the previous month; while in the rapid upsurge of business activity
in the summer of 1950, four of the smaller centers registered July-August declines.
The resulting year-to-year increment, 10.3%, was slightly higher than in July.
Four of the smaller centers, Hamilton, Lorain, Middletown and Springfield regis
tered new all-time highs in August. Middletown again registered the widest margin
over the comparable period of last year, 32.4%, for June, July and August combined,
followed by Elyria, Warren and Hamilton, all with gains of more than 20%.
Indexes of Department Store Sales and Stocks

Daily Average for 1935-1939= 100
Adjusted for
Without
Seasonal Variation Seasonal Adjustment
Aug.
July Aug.
Aug. July
Aug.
1951
1951 1950
1951 1951
1950
SALES:
Akron (6)................................339
341 348
288 286
296
Canton (5).............................. 391
375 385
344 315
339
Cincinnati (8).........................326
326 370
271 251
307
Cleveland (11)....................... 287
274 300
252 222
264
Columbus (5).........................360
358 382
303 286
321
Erie (4)................................... 388
371 373
322 289
310
Pittsburgh (8)........................286
276 322
243 199
274
Springfield (3)........................310
294 331
257 238
275
Toledo (6)...............................312
307 317
262 237
267
Wheeling (6)...........................274
258 286
208 196
229
Youngstown (3)..................... 365
371 350
317 282
305
District (98)...........................312
309 334
271 241
290
STOCKS*
District...................................323
349 265
341 348
280

Monthly Business Review

P age 12

October 1, 1951

Sizing Up an Investment in Research
by CLYDE WILLIAMS, Director, Battelle Memorial Institute

“All research must partake as
as much of economic horse sense as
it partakes of scientific principles,”
Charles F. Kettering once said. Ap
plied to industrial research, where
the know-how of the engineer must
work hand-in-glove with that of
the economist, economic horse
4
sense is known as engineering econ
omics. One of its most important
uses is as a management tool for
evaluating investment in sound re
search programs. Its adoption by
alert management is a significant development in the
method of doing industrial research.
Industry and government are currently investing at an
annual rate of $2 billion. Discounting for inflation, this
is more than two and one-half times the research expendi
tures of 1940. With this generally higher rate of spending,
more companies have become more conscious of the need
for deliberate, systematic analysis of their research and
development programs.
Before spending money on developing a new process,
or on the expansion of an existing operation, it is good
business to obtain an intelligent estimate of the probable
size and nature of the market for such items. This includes
intensive analysis of competition, present and potential
uses for the items, preferences of the industrial consumer
or the ultimate consumer, whichever the case may be, and
the volume and location of consumer markets. To enable
wise selection of materials for a new product or process,
special attention must also be paid to the present and
probable future supply, demand and cost of raw materials,
and semimanufactures.
For scientific market analysis on the industrial level,
special talents are needed. Only teams of engineering econ
omists trained to make accurate economic appraisal of
various industrial problems can do an adequate job. Back
ing up these teams, there must be technologists experi
enced in many industries, from the mining of raw mate
rials to the marketing of finished products.
An engineering economics staff with diverse industrial
experience is prepared to take on a wide variety of econ
omic studies. These are tailored to fit the needs of each
particular job. Perhaps a company has developed a variety
of new chemicals and wishes advice on probable uses and
markets for these products at certain prices. Another com
pany wants to broaden its activities to cover manufacture
of glass, or processing of tungsten, nickel, cobalt, or titan
ium. An investment firm or bank wishes advice on the
probable effect of new technical developments on certain
companies. A geographical region wants a report made of
its mineral resources and how they can be used to help
attract new industries.
The value of engineering economic studies may perhaps
best be seen by a quick look at typical examples of such
Editor’s Note —While the views expressed on this page are not nec
essarily those of this bank, the M onthly Business Review is pleased to
make this space available for the discussion of significant develop
ments in industrial research.

work which Battelle has done in the past.
Bituminous Coal Research, Inc., the research organiza
tion for the entire bituminous coal industry, was seeking
guidance in planning their research program aimed at in
creased coal usage. Battelle was asked to make an extensive
survey and analysis of the technical and economic factors
that control the manufacture of fuel gases from coal. The
study concluded generally that fuel gases, produced at coal
mines by the cheapest known methods and piped to con
suming centers, could not compete with natural gas piped
four to six times as far. This situation, it was also found,
would probably prevail for many years to come. Possi
bilities were reported brightest, however, for one type of
fuel gas known as producer gas. Prospects for its increased
usage were seen when produced locally at the plant by
more modem labor-saving equipment. As a result, a coop
erative research program on improvement of producer gas
equipment was undertaken by BCR and other interested
organizations.
In another case, a group of large copper companies
asked Battelle to make an intensive economic study of
possible new uses for copper. Results of the study sug
gested the use of copper compounds as trace elements in
fertilizer, and as ingredients in marine anti-fouling paint
for ship bottoms. Subsequent research and development of
these two new uses for copper helped materially in diversi
fying and expanding copper markets prior to the current
shortage.
Engineering economic studies become particularly im
portant if a company wants to get into new or related
product lines in which it is not experienced. In this case,
an unusual need exists for economic analysis by the organi
zation which maintains an extensive pool of talents and
equipment to service all industries.
In the present international situation, where the supply
of many raw materials is dependent on political factors,
engineering economics takes on special significance. Under
such circumstances, it is vital for industry and government
to keep a continuous check on the availability of raw
materials and on substitutes that may be used if normal
sources are cut off.
Often the development of a new product or process,
or the expansion of existing operations, brings with it
problems of industrial logistics. “How can these materials
be brought to our plant, processed, and distributed as
finished products to the largest market in a way that will
ensure maximum profits?” Each phase of solving this type
of logistics problem involves cost studies as well as techni
cal know-how. Alternative solutions must be weighed be
fore a decision can be made that will stand up under
strongly competitive conditions.
A fundamental purpose of engineering economic studies
is to guide the development of sound industrial research
programs. In evaluating raw material supplies, industrial
plant locations, markets for new products and processes,
the engineering economist is hunting for answers that are
economically practical. His findings are vital to smooth
flowing production of goods. The research that counts in
modem business is directed by men who know costs and
markets as well as technology.