Full text of Economic Review (Federal Reserve Bank of Cleveland) : September 1947, Vol. 29, No. 9

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Busin

eview
Fourth Federal Reserve District
Federal Reserve Bank of Cleveland

F in a n c e , In d u stry
Agriculture, and Trade

V o l. 29

Cleveland, O hio, September

1,

1947

No. 9

THE GREAT LAKES-ST. LAWRENCE SEAWAY
AND POWER PROJECT
T h e G re a t L akes area, o f w hich th e F o u rth D istric t
is a p a rt, is a un iq u e econom ic region in t h a t it con­
ta in s th e w orld ’s only m a jo r in d u stria l d ev elo p m en t
n o t easily accessible to tid e w a te r. As a resu lt o f th is
in terio r position, m o st in te rc o n tin e n ta l foreign tra d e
o rig in atin g here has to be h an d led m ore th a n once.

rep o rted fa v o ra b ly on a S enate resolution to confirm
and im p lem en t th e 1941 agreem ent. T h e H ouse P ublic
W orks C o m m ittee has n o t com pleted its hearings on
th e m easure. U nlike a tre a ty , resolutions and th e
executive ag reem en t need only m a jo rity C ongres­
sional ap p ro v a l to becom e effective.

Salient
Features

Sources of
Support and
Opposition

T h e G re a t L ak es-S t. L aw rence Seaw ay
and Pow er P ro je c t is designed to enable
ocean-going ships to tra v e l from th e
A tla n tic O cean all th e w ay to D u lu th , M in n eso ta, a t
th e w estern end o f th e lakes, a d istan ce o f 2,350 miles.
T h e n a v ig a tio n featu res include th e im p ro v em en t
and deepening o f in terco n n ectin g rivers, channels,
canals, and locks in th e G re a t L ak es sy stem , as well
as th e buildin g o f a new can al and locks a t S a u lt Ste.
M arie and aro u n d p o rtio n s o f th e In te rn a tio n a l
R ap id s section o f th e St. L aw rence R iver. T h e
m inim um co n tro l d e p th in th e resu ltin g ship p in g
lane w ould be 27 feet. T h e P ro je c t also co n te m p la te s
th e c o n stru c tio n o f a h y d ro electric pow er p la n t w ith
a c ap ac ity o f 2.2 m illion horsepow er n e a r M assena,
N ew Y ork.
T h e cost o f th e com bined P ro je c t w as e stim a te d
in M a y 1947 b y th e U n ite d S ta te s A rm y E ngineers
to be 3839 m illion. O f th is, 3161 m illion has alread y
been sp en t, larg ely b y C a n a d a . O f the 3648 m illion
b alance, th e U n ite d S ta te s share w ould be 3492
m illion of w hich a b o u t 3161 m illion w ould be paid by
th e S ta te of N ew Y o rk for th e pow er develo p m en t.

Legislative
Status

O n M a rc h 19, 1941, a form al agreem en t
betw een C a n a d a and th e U n ite d S ta te s
was signed for th e co n stru ctio n o f th e
Seaw ay and pow er facilities, su b je c t to a p p ro v al by
th e legislative bodies o f b o th countries. O n J u ly 18
o f th is y ea r, sh o rtly before C ongressional a d jo u rn ­
m en t, th e F oreign R elatio n s C o m m ittee o f th e Senate




T h e P ro jec t receives su p p o rt largely
from th ese five econom ic, geographic,
a n ^ political gro u p s: (1) L ake p o rt areas because of p o te n tia l expansion
in tra d e ; (2) M id w estern ag ricu ltu ral areas in terested
in low er sh ipping costs; (3) adv o cates o f cheap er
pow er for b o th ru ra l areas and in d u stries; (4) con­
serv atio n groups in te re ste d in th e p reserv atio n o f th e
n a tio n ’s m ineral resources; and (5) those w ho regard
th e w ate rw ay and its pow er facility as v ita l com ­
p onents o f o u r n a tio n a l defense system .
O n th e o th e r h an d , th e P ro jec t has m e t opposition
from (1) b o th railro ad and lake sh ip p in g e n terp rises;
(2) th e coal m ining in d u s try ; (3) N o rth A tla n tic and
G u lf C o ast p o rts; and (4) th e iron ore and steel
in d u stry whose long-range p lans for iron ore u tiliz a­
tio n are v ita lly affected by such a m ajo r u n d ertak in g .

Anticipated
Benefits

P ro p o n en ts o f th e P ro je c t a n tic ip a te
t ^ia t ‘ts co n su m m atio n w ould resu lt
in : (1) expansion of in d u stria l a c tiv ity
in th e G re a t L akes area because o f cheaper tra n s ­
p o rta tio n , m ore favorable o u tle ts for foreign tra d e ,
and g re a te r accessibility to needed raw m a teria ls;
(2) larger incom e for m id -W estern farm ers because
o f low ered tra n s p o rta tio n costs; (3) w idespread, lowcost ru ra l electrification for m uch o f N ew E n g lan d
and N ew Y o rk ; (4) m ore a b u n d a n t electric pow er for
in d u stries and com m unities in N o rth e a ste rn sta te s;
(5) conservation of essential raw m ate ria ls such as
th e M esabi iron ore d ep osits; and (6) m ore flexibility
for n a tio n a l defense.

MONTHLY BUSINESS REVIEW

2

Alleged
Drawbacks

September 1, 1947

as to preclude th e ir use o f th e Seaw ay.
Claim s for as m uch as 40 m illion to n s o f traffic
are assailed on th e gro u n d s t h a t th e p ro je cte d 27foot d e p th w ould be to o shallow for m o st m odern
ships. T h e U. S. M a ritim e C om m ission is confident,
how ever, th a t th ere w ould be sufficient A m erican
ships o f su ita b le d ra ft to h an d le a s u b s ta n tia l sh are of
th e a n tic ip a te d traffic. I f ships th a t proceed on less
th a n full d ra ft are considered, (m ost ships tra n sitin g
th e P a n a m a C an al are loaded only to a b o u t 70 p er­
cen t o f c a p a city ) a large p ro p o rtio n o f b o th th e
A m erican and w orld fleets becom e possible users of
th e Seaw ay. V ic to ry ships, for exam ple, could tr a ­
verse th e w a terw a y loaded to 79 p erc en t o f d e ad ­
w eight c ap a c ity , and L ib e rty ships a t 85 p ercen t of
c ap a city . A vailable ships include freighters, ta n k e rs,
and co m b in atio n cargo-passenger vessels.
A lth o u g h assertions h av e been m ade th a t p a rtia l
loading o f U n ited S ta te s ships w ould a c c e n tu ate th e ir
co m p etitiv e d isad v an tag e w ith sm aller foreign vessels
by m ak in g th e voyages less econom ical, th e re is little
d o u b t th a t if cargoes w ere av ailab le, ships w ould be
provided to tra n s p o rt th e m . I t ap p ears likely, how ­
ever, th a t d ra ft lim ita tio n s w ould w ork to th e a d v a n ­
tag e o f foreign shippers.

O pp o sitio n to th e Seaw ay and Pow er
P ro je ct is based largely u pon th e theses
th a t : (1) foreign buyers and ex p o rters
w ould be th e chief beneficiaries o f low er tra n s p o rta tio n
costs; (2) th e e stim a te d cost o f c o n stru c tio n and m ain ­
ten a n c e o f th e S eaw ay w ould far exceed b o th d irect
and in d ire c t benefits; (3) th e Seaw ay w ould be used
on ly d u rin g th e su m m er m o n th s; (4) its p o te n tia l
role in n a tio n a l defense h as been ex ag g erated ; (5) th e
proposal in its p re se n t form is u n c o n stitu tio n a l— an
ab ro g atio n o f th e S e n a te ’s tre a ty -m a k in g pow ers;
and (6) s u b s ta n tia l use o f th e Seaw ay w ould d is ru p t
estab lish ed c o n tin e n ta l railw ay system s.

Potential Volume E stim a te s reg ard in g th e p o tenof Traffic
volum e o f traffic o f th e p ro ­
posed S eaw ay range from 20 to
40* m illion to n s a n n u a lly , com posed larg ely o f U n ited
S tates freig h t, am o u n tin g to 10-15 p ercen t o f our
e stim a te d 1950 w a te r-b o rn e foreign tra d e .
E v en th e sm aller 20 m illion to n e stim a te , how ever,
has been su b jected to som e criticism . T h e calcula­
tio n s w ere m ade on th e basis o f p o te n tia l to n n ag e w ith
th e assu m p tio n t h a t ra te savings w ould be th e con­
tro llin g fa c to r; th erefo re, som e item s w ere included
w hich w ould n o t n ecessarily m ove on th e Seaw ay
because o f p erish a b ility , special h an d lin g facilities
availab le on o th e r chan n els, th e general a d v a n ta g e of
less tim e in tr a n s it by rail o r co m b in atio n ro u tes, and
o th e r reasons. E xam ples o f com m odities so affected
are b a n a n a s, c itru s fru its, and coffee. E x p o rtab le
p ro d u c ts such as m ach in ery , iron and steel p ro d u cts,
and spare p a rts, m ig h t req u ire such p ro m p t d elivery

Effect Upon
Railway
Operations

A lth o u g h considerable d o u b t has been
ca st upon th e v a lid ity of e stim a tes of
p o te n tia l Seaw ay traffic, it is fre­
q u e n tly co n ten d ed th a t th e Seaw ay
w ould d isru p t p resen t railw ay o p eratio n s by th e
diversion of revenue freig h t from rail to w a te r carriers.
T h is m ig h t come a b o u t n o t only from d ire ct com ­
p e titio n , b u t from th e fa ct th a t d u rin g th e S eaw ay’s
seven m o n th s of o p e ra tio n , considerable rolling stock
w ould have to be m ain tain ed solely to m eet th e
dem ands du rin g th e o th e r five m o n th s w hen th e

* 40 million tons is the highest responsible estimate for traffic on
the waterway. This prediction, by Secretary of Commerce
Harriman, is based on the assumption that large amounts of
iron ore will have to be imported.

iiiPort®
Arthur*

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LACHINE CAN AL
Requires new
o m l and locks
required
mi.

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IN TE R N A TIO N A L RAPIDS ISOULANGES CANA]
Power development
T wo loclu requiredJ
and locks required
18 mi W
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__________48 mi

t.MmytRivfT

[MAINE:

ST. CLAIR RIVER
LAKE ST. CLAIR
DETROIT RIVER

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ibironibj

■NEW YORK:

L Ontario

Dredging required

Atlantic

MICHIGAN:
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INCOMPLETE SECTIONS
258 M I L E S _ _ ,

m b m

COMPLETED SECTIONS
7479 MILES . . . J

September 1, 1947

MONTHLY BUSINESS REVIEW

Seaw ay w ould be closed. T h a t a rg u m e n t is m itig a te d
som ew hat b y th e fa c t th a t rail traffic is u su ally
h eav ier d u rin g A p ril-O cto b er th a n d u rin g th e m id ­
w in ter m o n th s, suggesting th e possib ility t h a t th e
fu n ctio n in g o f th e S eaw ay m ig h t allow a m ore c o n s ta n t
u tiliz a tio n o f cars an d locom otives th a n is now th e
case.
In an y e v e n t, if th e Seaw ay should re su lt in g re a te r
econom ic a c tiv ity in th e c e n tra l in d u stria l region, th e
tru n k line railro ad s m ig h t conceiv ab ly experience a
gain in traffic p a rtic u la rly in th e m ore lu c ra tiv e form
o f fab ric ated p ro d u c ts ra th e r th a n bulk goods.

Impact Upon A n o th e r eq u ally -em p h asized objecGoal Mining tio n is t h a t th e Seaw ay w ould have
Industry
an ad verse effect upon th e dom estic
coal in d u stry . T h e logic ru n s as
follow s: since railro ad s consum e 22 p ercen t o f
b itu m in o u s o u tp u t (1945), a red u ctio n in rail a c tiv ity
w ould resu lt in a lessened d em an d for coal. T h e
Seaw ay w ould also m ake possible th e d ire c t im p o rta ­
tio n of coal from ab ro ad . T h e U n ite d M ine W o rkers
union has estim a te d th a t a to ta l o f 100 m illion to n s,
or 18 percen t, o f U n ite d S ta te s coal p ro d u ctio n m ig h t
be displaced by th is m eans alone. T h e chronic over­
c a p a c ity problem o f th e coal in d u s try w ould th u s be
severely a g g ra v a te d b o th b y th e am o u n t o f coal
im p o rts and by th e low er price w hich im p o rts w ould
carry . T h e w aterp o w er phase rep resen ts a th ird
th r e a t since it co nceivably m ig h t elim in ate m an y
coal-using steam pow er p la n ts.
L arge-scale c o m p etitio n o f foreign coal is disco u n ted
by th e fa ct t h a t th e re has n ev er been an y sizable
influx of foreign coal th ro u g h A m erican and C an ad ian
po rts now open to ocean ship p in g , so it seem s unlikely
t h a t any w ould occur because o f th e Seaw ay. M o re­
over, public pow er d ev elo p m en ts hav e u sually in­
creased th e use o f coal for th e g en eratio n o f pow er
in th e region concerned. A ccording to th e F ed eral
Pow er C om m ission, th e use o f coal for pow er purposes
in T V A areas increased 250 p ercen t from 1934 to
1940.

Potential
Economies

T h e D e p a rtm e n t o f C om m erce has
e stim a te d t h a t over-all savings from
Seaw ay tra n s p o rta tio n w ould am o u n t
to a b o u t 33.50 p er to n o f freig h t in tra n s it, or several
tim es th e an n u al p er-to n cost o f m a in te n a n c e and
am o rtizatio n .
T h is e stim a te is based on th e general assu m p tio n
t h a t th e freig h t charges to be applied to a voyage
from overseas to D u lu th w ould be s u b sta n tia lly th e
sam e as th e ra te from overseas to an A tla n tic p o rt,
plus a possible toll charge w hich pending legislation
provides.
In o th e r w ords th e 1,500 m iles o f in lan d
w a ter tra v e l w ould n o t add m u ch to th e p resen t
tran s-o cean tra n s p o rta tio n cost.
I f so, it seem s p ro b ab le th a t th ro u g h th e use o f th e
Seaw ay th e cost o f im p o rts to sta te s in th e G re a t
L akes area w ould be reduced. W ood pulp , w ines and
liquors, cod liv er oil, ball clay an d china clay are a
few ty p e s w hich w ould be affected in a d d itio n to
n u m erous item s o f general cargo. F a rm e rs, for
exam ple, p resu m ab ly w ould save on coffee, su g ar
(unless price is artificially m a in ta in e d ), lu m b er,




3

fertilizer, sisal p ro d u cts, and b u rlap , N ew E n gland
consum ers w ould p ro b a b ly g et coal and steel a t less
cost from th e lake sta te s v ia th e Seaw ay.
W ith regard to th e benefits w hich m ig h t accrue to
M id w estern ag ric u ltu ra l and in d u stria l en terprises,
it is difficult to d ete rm in e th e precise d istrib u tio n
am ong pro d u cers, m iddlem en, an d consum ers, o f th e
benefits o f reduced tra n s p o rta tio n costs for th e ir
pro d u cts. T h e sam e difficulties prevail in any
a tte m p t to allocate th ese p o te n tia l savings betw een
dom estic consum ers and foreign suppliers. T h e
s ta te o f co m p etitio n am ong, buyers and am ong sellers
a t an y given tim e is an im p o rta n t d e te rm in a n t in
th e final d istrib u tio n o f such ad v an tag es.
D epending upon th e ex te n t to w hich tra n s p o rta ­
tio n costs w ould be a c tu a lly low ered, a so rt o f econom ic
p a rity betw een M idw est producers and m an u fac­
tu re rs in coastal areas w ould be estab lish ed . N ew
m a rk e ts for su rp lu s p ro d u ctio n m ig h t be developed,
b u t it m u st be rem em bered th a t freig h t charges are
usually only a sm all p ercentage of th e value o f m ost
com m odities, and th e savings in freig h t costs m ig h t be
offset, in v a ry in g degrees, by th e slowness of Seaw ay
tra n sp o rta tio n . In ad d itio n to g re a te r speed, an o th e r
exam ple o f a p ro m in en t a d v a n ta g e of p resen t channels
o f tra n s p o rta tio n in th e case of g rains is th e “ in
tra n s it m illing privilege” w h ereby a th ro u g h ra te is
applied alth o u g h th e g rain is processed a t a w ay ­
point.

The Power
Project

T h e site of th e proposed h y d roelectric
developm ents is in th e In te rn a tio n a l
R a p id s section o f th e St. Law rence
R iver, n e a r M assen a, N ew Y ork. A large pow er
dam w ould cross th e riv er a t th a t point. T h e to ta l
ca p acity originally w ould be 2.2 m illion horsepow er,
w ith a p o te n tia l a n n u al o u tp u t o f 13 billion kwh.
T h e S ta te o f N ew Y ork w ould have co n tro l o f th e
U n ited S ta te s ’ h a lf o f th e pow er, a t an original cost
to th a t s ta te o f a b o u t 3161 m illion.
A ccording to th e F ed eral Pow er C om m ission, th e
N ew Y ork in v e stm e n t p er in stalled horsepow er
w ould be 389 (1941 e stim ate) com pared to 3104 a t
TV A , 399 a t B onneville, 390 a t B oulder, and up to
3169 a t vario u s p riv a te pow er dam s. E n erg y costs
are e stim a te d by th e F ed eral P ow er C om m ission to
be a b o u t one m ill per kw h (1941). D elivered to N ew
Y ork C ity ( a t 80 p e rc en t load facto r) th e cost w ould
be 2.5 m ills, or to S ch en ectad y a t 1.9 m ills. T h e first
figure com pares w ith a cost of production o f 5.15 mills
per kw h for th e m o st econom ical p la n t in N ew Y ork
C ity (1945). T h e cost w ith in 300 miles o f M assena
should n o t exceed 3.1 m ills p e r kw h, w hile ra te s in
th is sam e area now range up to 13.3 m ills p er kw h.
O p p o n e n ts claim on th e o th e r h an d th a t th e re is
still unused pow er a t N ia g a ra , w hich could be utilized
a t considerably less cost th a n th e St. L aw rence Pow er
P ro je ct, an d fu rth e r, th a t all needs will be m e t upon
com pletion o f th e u n p reced en ted expansion program s
alread y u n d e rta k e n by p riv a te pow er com panies
servicing th e area. I t is argued, m oreover, th a t th e
Pow er P ro je c t is poorly lo cated to dispose o f th e
huge block o f energy, and th a t it should n o t be h an d led
exclusively by th e S ta te o f N ew Y ork.

4

MONTHLY BUSINESS REVIEW

Role in
National
Defense

W ith resp ect to n a tio n a l defense, th e Seaw ay conceivably w ould pro v id e in te rio r
sh ip b u ild in g and re p a ir facilities for
ocean-going w arsh ip s and cargo vessels.
T h e ad d itio n a l m ain line o f co m m u n icatio n supplied
in th e form o f th e S eaw ay w ould ease th e o v e rb u rd en
on rail system s and ocean p o rts d u rin g a w a r period.
T h e pow er phase w ould serve to su p p o rt w ar in d u s­
tries, y e t w ould n o t use coal o r o th e r scarce co m b us­
tibles. C h eap pow er av ailab le in large am o u n ts is
fu n d a m e n ta l for e x p e rim e n ta tio n in, and p ro d u ctio n
of, atom ic energy.
Y e t th e a rd o r o f th e W a r D e p a rtm e n t for th e
Seaw ay has cooled off consid erab ly , and w hile th e
P ro je ct is still considered “ h elp fu l,” it no longer
bears th e label of “ e sse n tia l” or “ v ita l.” I ts lim ita ­
tions o f speed h in d e r its use because in n a tio n a l
em ergencies th e elem en t o f tim e is a m ost v ita l con­
sideratio n . T h e Seaw ay, w ith its m a n y locks and
canals w ould be difficult to defend, even w ith large
n um bers o f m en and m uch eq u ip m e n t, to th e d e tri­
m en t of o u r reg u lar forces. T h e Pow er P ro je c t, th e
large dam and pow erhouse, like all o th e r m a jo r
in sta lla tio n s now in existence, w ould m ake an easy
ta rg e t, and one ato m ic bom b could block th e Seaw ay,
tra p p in g w h a te v e r ocean ships were in th e lakes.

Iron Ore
Utilization

O f all th e questio n s raised in th e St.
L aw rence Seaw ay co n tro v ersy , one of
th e m ost v ita l to th e F o u rth Fed eral
R eserve D istric t is th a t regard in g iron ore. T h e
prospective ex h au stio n o f higher-grade M esabi ores
alm ost in e v ita b ly m eans costlier steel in th e n ear
fu tu re . O ne solution to th e ore d epletion problem
is th e c o n stru c tio n o f th e S eaw ay, w hich w ould enable
p u rer ores to be b ro u g h t in to th e M id w est p ro ducers
from ab ro ad w ith o u t p ro h ib itiv e cost. O re is now
being received a t seaboard mills from m ines in Chile
and V enezuela. A d d itio n al deposits exist in L a b ra d o r,
M exico, and Brazil. In th e la tte r c o u n try , th e U n ited
S tates-B razil jo in tly ow ned I ta b ira m ines rep resen t
a v a st p o te n tia l source of iron ore, capable o f su p p ly ­
ing U n ite d S ta te s’ needs for 150 y ears, b u t political
and to p o g rap h ical considerations are im p o rta n t d e te r­
re n ts to an early large-scale exp lo itatio n . I f th e
L a b ra d o r deposits are o f sufficient e x te n t (m ost
recent e stim a te is one billion dollar v alu e), a 300m ile railw ay m ay e v e n tu a lly be b u ilt from th e m ines
to th e G u lf o f th e St. L aw rence, from w hich th e ore
could be shipped to low er lake docks in lake freighters.
T h e re exists, how ever, an im p o rta n t a lte rn a tiv e to
im p o rts o f iron ore and t h a t is th e use o f low -grade
ores co n tain ed in p resen t dom estic deposits, a source
preferred b y m o st steel pro d u cers in th is area. T h is
w ould provide large to n n ag es of ore for an alm ost
u n lim ited tim e. L ow -grade ta c o n ite and ja s p e r ores
w ould be c o n c e n tra ted before shipping; th e c a p ita l
required to provide c o n c e n tra tio n p la n ts is e stim a te d
a t ov er $750 m illion for an a n n u al ta c o n ite o u tp u t
o f 50 m illion tons. T h is will h av e th e obvious
effect o f raising ore costs, ren d erin g th e m m ore v u ln e r­
able th a n ever to co m p etitio n w ith co astal users o f
foreign ores, o r from im p o rts o f foreign ores w hich
would becom e accessible via th e Seaw ay.




September 1, 1947

W hile a t lea st tw o com panies are p la n n in g to
establish beneficiation p lan ts in M in n eso ta on an
ex p erim ental basis, large scale d ev elo p m en ts o f th is
ty p e will be held in abeyance pen d in g th e outcom e
of th e Seaw ay P ro ject.

BIBLIOGRAPHY
1.

A iken, G eorge D . “ St. L aw rence S eaw ay,”
E x tension o f R em arks. Congressional Record,
M a y 21, 1946. p. A2997. L o n g -tim e sea­
w ay a d v o cate presen ts arg u m en ts.
2. B oughton, V. T . “ D eveloping th e St. L aw ­
ren ce.” Engineering Nezus-Record, M a y 22,
1941. p. 824. O ne o f th e b est ou tlin es av ail­
able of th e proposal and its b ack g ro u n d , and
of th e engineering and a d m in istra tiv e aspects.
A lthough th e conclusions are u n fav o rab le to
th e seaw ay, th e discussion is fair and in stru c tiv e .
3. “ G re a t L akes-S t. L aw rence Seaw ay P ro jec t
A gain is Before C ongress.” ' 'Steel, M a y 27,
1946. p. 66. S u m m ary o f th e favorable
re p o rt of th e Senate F oreign R e la tio n s C om ­
m ittee.
4. Ire la n d , T om . “ T h e G re a t L akes-S t. L aw rence
Seaw ay and P ow er P ro je c t.” C leveland H ouse,
C leveland, O hio. D istrib u te d by G. P. P u t­
n a m ’s Sons. 1946. 62 pp. G eneral descrip­
tion of th e p ro jec t; conclusion in favor of
p roject.
5. Lee, K endrick. “ St. L aw rence Seaw ay and
Pow er D ev e lo p m en t.” Editorial Research Re­
ports, N o. 1, J u ly 2, 1947. W a sh in g to n , D. C.
16 pp. Good b ack g ro u n d m a te rial.
6. M ead, Ja m es M . “ St. L aw rence S eaw ay,”
E xtension o f R em ark s. C ongressional R ecord,
M arch 26, 1946. p. A1754. Seaw ay o p p o n en t
presen ts arg u m en ts.
7. “ T h e R ecen t B a ttle in C ongress O ver th e G re a t
">
L akes-S t. L aw rence Seaw ay P ro je c t.” Con­
gressional Digest, O cto b er, 1946. W ash in g to n ,
D. C. Issue d ev oted to a rg u m en ts for and
ag ain st advan ced by C ongressm en and w it­
nesses.
8. “ Should In d u s try F a v o r th e St. L aw rence
Seaw ay P ro je c t? ” Modern Industry, Ju ly 15,
1946. pp. 116-130. T w o businessm en d e b a te
th e issue.
9. “ T h e St. L aw rence P ro je c t.”
A ssociation of
A m e ric a n R a ilro a d s. W a s h in g to n , D . C.
F e b ru a ry , 1946. 20 pp. T h e ra ilro a d s’ p o in t
o f view.
10. “ St. L aw rence E stim a te s R ev ised .” Engineer­
ing Nezus-Record, J u ly 24, 1947. pp. 84-86.
S u m m ary o f m ost recen t cost e stim a te s and
a n tic ip a te d traffic.
11. U. S. C ongress. Senate. C o m m itte e on F oreign
R elations. “ G re a t L akes-S t. L aw rence B asin .”
H earings before a S ub co m m ittee o f th e C om ­
m itte e on F oreign R elatio n s, 6 9 th C ongress,
Second session, on S. J. Res. 104. W a sh in g to n ,
D . C. 1946. 1383 pp. T e stim o n y , ta b le s and
c h a rts.
M o st o f th ese references are available in th e b a n k
L ib ra ry . S ubscribers m ay m ake req u ests e ith e r in
person or in w ritin g for m a te ria l on th is su b ject.

September 1, 1947

5

MONTHLY BUSINESS REVIEW

NON-REAL ESTATE LOANS TO FARMERS
Postwar Trend
in Farm Loans

F o u rth D is tric t m em b er b an k s
h av e experienced a rap id expansion
in loans to farm ers d u rin g th e p o st­
w ar period. T h e increases have applied to b o th real
e sta te loans and n on-real e s ta te loans, as in d ic a te d
on an acco m p an y in g c h a rt.
In th e p a st tw o y ears th e volum e o f real e sta te
loans o u tsta n d in g to farm ers h as increased from a b o u t
$35 m illion to alm o st $58 m illion, for a p ercen tag e
gain of 66 percen t. N o n-real e sta te loans to farm ers
have advan ced even m ore ra p id ly , th e to ta l doubling
in am o u n t from $19 m illion to $38 m illion.
A discussion o f farm real e sta te loans a p p eared in
th e preceding issue o f th e Review.
In th is issue
th e non-real e s ta te lo a n s to farm ers (o th e r th a n C om ­
m o d ity C re d it C o rp o ra tio n loans) are an alyzed on
th e basis o f a su rv ey o f such loans a t a sam ple of
F o u rth D is tric t m em b er b an k s on J u n e 20 o f th is y ear.

CHARACTERISTICS OF NON-REAL ESTATE
LOANS TO FARMERS
Prevailing
Interest
Rates

T h e p rev ailin g in te re st ra te on non-real
e sta te loans to farm ers in th e F o u rth
D is tric t is 6 p ercen t. E ig h ty p ercen t o f
th e 1,220 loan s an alyzed by th e 59
ban k s w hich co o p erated in th e su rv ey carried th a t
rate . Sixteen p e rc e n t o f th e loans involved an
in te re st ra te of 5*^ or 5 p ercen t. C o m p a ra tiv e ly
few loans w ere m ade a t an effective a n n u al ra te
above 6 percent.

T h e su rv ey revealed a definite te n d e n c y for ra te s
to be low er on th e larg er loans, and as a re su lt th e
p ro p o rtio n o f dollars loaned a t ra te s u n d e r 6 p ercen t
w as g re a te r th a n th e p ro p o rtio n o f loans b earin g less
th a n th a t ra te . T h e c h a rt on page six in d icates
th a t alm ost 40 p ercen t o f th e dollars w ere earn in g
u n d er 6 p ercen t on J u n e 20.

SURVEY OF NON-REAL ESTATE
LOANS TO FARMERS
T h e ad jo in in g article p resen ts F o u rth D istric t
results o f a su rv ey o f non-real e sta te loans to
farm ers. T h e su rv ey w as co n d u cted n a tio n a lly
as of Ju n e 20 by th e F e d e ra l R eserve System
and th e F ed eral D ep o sit In su ra n c e C o rp o ratio n .
F ifty -n in e F o u rth D is tric t c o u n try m em ber
banks, lo cated in 46 co u n ties o f th e D istric t, are
rep resen ted in th e acco m p an y in g analysis. M o st
of th e p a rtic ip a tin g b an k s ranged betw een $2
m illion and $10 m illion in to ta l deposits.
T h e 59 b an k s hold a b o u t nine p ercen t o f to ta l
n on-real e s ta te loans to farm ers at all m em ber
b anks in th is D istric t. T h e re p o rtin g banks
provided co m prehensive d a ta on every fifth loan
o u t of th e ir 5,600 n o n -real e sta te loans to farm ers
o u tsta n d in g on Ju n e 20.



M o st of th e co o p eratin g ban k s re p o rte d th a t 6
p ercen t w as th e “ u su al” ra te charged in 1930, 1940
and 1947. T h ere has been a m ark ed shift, how ever,
in th e d istrib u tio n of banks u su ally charging m ore or
less th a n 6 p ercent. In 1930,18 of th e 59 ban k s usually
charged m ore th a n 6 p ercent. F o r th e y e a r 1947,
on th e o th e r h a n d , none o f th e ban k s rep o rted a p re­
vailing ra te above 6 p ercen t, w hereas 24 banks listed
a c u rre n t charge o f u n d er 6 percent.

Interest Rates
by Size of Loan

T h e in te re st ra te charged on
sm all loans w as generally som e­
w h a t higher th a n th e ra te charged
on th e larger loans. F o r exam ple, th e average ra te
charged on loans of less th a n $250 w as 6.2 p ercent,
w hereas an accom panying c h a rt in d icates an average
ra te of 5.2 p ercen t on loans o f $2,500 and over. T h e
average ra tes on th e six loan sizes p resented in th e
c h a rt declined stead ily as th e loan sizes increased.
F u rth e rm o re , th e average ra tes listed for th e sm all
size loans m a y be u n d e re stim a te d . T h e surv ey d ea lt
only in term s o f th e am o u n t o f th e loan still o u t­
stan d in g on Ju n e 20. U n d o u b te d ly m an y of th e
loans, w hich on Ju n e 20 w ere of sm all size and y e t
carried a co m p a rativ ely low in te re st ra te , were large
loans a t th e tim e th e y w ere in itia lly m ade.
T h is ten d e n cy for large loans to en joy th e lower
rates is p ro b ab ly due chiefly to th e influence of
op eratin g costs. I t p ro b a b ly costs n early as m uch
in dollars to m ak e and service a sm all loan as a large
loan. T h e ra te of in te re st charged, therefore, m u st
be higher on th e sm aller loans if th e y are to p ay th e ir
own w ay.

Other Factors
Affecting
Interest Rates

T h e su rv ey d a ta suggest th a t some
facto rs, o th e r th a n th e size of th e
loan, m ay ex ert a co n sisten t influ­
ence on in te re st charges. T h e fol­
low ing relatio n sh ip s w ere found to exist w ith loans
in each of tw o size ranges, u n d e r $1,000 and $ 1 ,0 0 0 $4,999:
Postwar Trend of Loans to Farmers
All F ourth D istrict M em ber Banks
MILLIONS
OF DOLLARS

MILLIONS
OF DOLLARS

6

MONTHLY BUSINESS REVIEW

1. L oan s w ith m a tu ritie s up to six m o n th s bore
hig h er in te re s t ra te s th a n d em an d loans, and
loans ru n n in g for m ore th a n six m o n th s carried
still hig h er in te re st rates.
2. L oans to borrow ers w ith a n e t w o rth o f less th a n
310,000 in volved slig h tly hig h er ra te s th a n did
loans to tho se w ith a n e t w o rth o f 310,000 and
over.
3. L oans to be rep aid in eq u al in sta lm e n ts carried
higher in te re s t ra te s th a n single p a y m e n t loans.
4. L oans w here th e charge w as co m p u ted on th e
d isco u n t m eth o d in v o lv ed a c o m p a ra tiv e ly high
effective a n n u al in te re s t ra te .
FACTORS AFFECTING INTEREST RATE
OTHER THAN SIZE OF LOAN
Average Interest Rate
Loans Under
Loans of
31,000
31,000-$4,999

Term of Loan
D em and........................................
up to 6 mos...................................
over 6 mos.....................................

5.8%
6 .0
7 .0

5.4%
5.5
6 .2

N et W orth of Borrower
310,000 and above......................
Under 310,000..............................

6.0%
6 .2

5.5%
5 .8

Method of R epaym ent
Single Paym ent........................... ...... 5.9%
Unequal Instalm ent.......................... 6.1
Equal Instalm ent.............................. 7.3

5.4%
5.3
6 .8

5.9%
6 .8

Effect of
Discounting
on Interest
Charges

L oans w here th e charges are co m p uted
on th e d isco un t m etho d freq u en tly
carried relativ ely high average effective
annual rates. On in sta lm e n t loans
th e nominal d iscou nt ra te is applied to
th e original am o u n t o f th e loan, w hereas th e average
size o f th e loan from th e tim e it is m ade u n til th e la st
in sta lm e n t is paid is com m only little m ore th a n h a lf
th e original am o u n t o f th e loan. T h u s th e effective
ra te on such loans is generally alm o st double th e
nom inal rate. T h e su rv ey included 243 loans (23
p ercen t o f th e to ta l n u m b e r o f loans) 'o n a d isco u n t
basis, and on 45 o f th ese th e d a ta regarding th e dollar
am o u n t of th e charge in d icated th a t th e effective
annu al in te re st ra te w as p ro b ab ly a b o u t double th e
nom inal d iscou nt rate.
I t is difficult to m easure th e relativ e im p o rta n c e o f
th e vario us factors discussed above from th e s ta n d ­
p oint of th e ir effect on in te re st ra te s, since th e sam e
set o f factors was so often found to g e th e r on loans
w ith c o m p arativ ely high rates. F o r exam ple, a th ird
o f th e equal in sta lm e n t loans were on a d iscou nt basis,
com pared w ith only one-fifth o f th e single p a y m e n t
loans. A lm ost three-fifths o f th e equal in sta lm e n t
loans ran for m ore th a n six m o n th s, w hereas only
a b o u t o n e -te n th of th e single p a y m e n t loans were for
th a t long a term . A larg er p ro p o rtio n o f loans w ith a
te rm o f o ver six m o n th s w as found on a d isco u n t basis
th a n w as th e case w ith loans o f six m o n th s or less.

Supplementary T h e 59 co op erating b an k s were
Fees and Mini- asked to list charges, o th e r th a n
mum Charges
in te re st or n o ta ry fees, th a t a

Type of Charge
Interest..........................................
D iscount........................................

September 1, 1947

5.4%
6 .5

T h e ten d en cy for hig her ra te s w ith th e longer term
loans and w ith loans to borrow ers w ith a c o m p a ra tiv e ly
sm all n e t w orth m ay be a ttrib u te d in p a rt to th e ele­
m en t of th e a n tic ip a te d safety of th e loan. T he
a p p a re n t n e t w orth relatio n sh ip , how ever, m ay be
questioned on th e basis th a t m an y loans a t low rates
to borrow ers of large n et w o rth m ay have been large
loans w hen first m ade, b u t w ere sm all enough by
Ju n e 20 to fall in to low er size ranges. T h e higher
rates involved in in sta lm e n t loans m ay be p a rtly a
m a tte r of bookkeeping expense and p a rtly a reflection
of th e q u a lity of th e loans.

farm er-bo rro w er m ay be asked to
pay in th e course o f o b ta in in g a non-real e sta te loan.
T h irty of th e 59 b an k s rep o rted th a t th e y m ake no
ex tra charge. T h e 29 th a t did re p o rt su p p le m e n ta ry
fees app eared to charge a b o u t 31-50 per loan on th e
average, usually to p ay for c h a tte l m o rtgage costs,
inspection costs, etc.
T h e ban k s were also asked to s ta te th e ir policy
w ith regard to m inim um charges on non-real e sta te
loans to farm ers. All b u t nine of th e ban k s rep o rted
th a t th e y utilize a m inim um charge. N in eteen o f th e
50 b an k s w ith a m inim um d esign ated 3-50 and 21
specified 31-00.

Percentage D istribution of Non-Real Estate Farm Loans by Interest Rate Charged
59 F ourth D istrict Banks
IN T E R E S T
RATE

IN TER EST
R A TE

0

10

20

30

40

SO

60

70

------------------ PERCENT OF TO TA L --------------------




80

90

100
PER CENT OF TOTAL

Septemberl, 1947

7

MONTHLY BUSINESS REVIEW

Size of
Loans

O n Ju n e 20, th e average am o u n t o u ts ta n d in g on 1,120 loans in th e su rv ey w as a b o u t
3720. S lightly m ore th a n a th ird o f th e
loans involved an u n p aid b alance of less th a n 3250.
A lm ost four o u t o f five loans o u tsta n d in g w ere sm aller
th a n 31,000.

T h e d istrib u tio n o f to ta l d o llar volum e o f loans
o u tsta n d in g , of course, p resen ts a sh arp ly different
p icture. O nly six p ercen t o f th e dollars w ere rep re­
sented by loans of less th a n 3250 and only 35 p ercen t
by loans u n d er 31,000. A lm ost 30 p ercen t o f th e
dollars w ere covered by loans o f 32,500 and above,
b u t only five p ercen t o f th e to ta l n u m b e r o f loans
exceeded th e 32,500 m ark .
SIZE OF LOANS OUTSTANDING
on Ju ne 20, 1947
No. of
Loans
Under $250..............................................35%
$250-3499.......................................... .......21
$500-3999.......................................... .......21
31,000-31,499...........................................10
31.500-32,49 9
8
32.500-34,99 9
4
35,000 and over...............................
1

Size Range

100%

Dollar Volume
of Loans

6%

10
19
16
21

19
9
100%

Method of R o u g h ly th re e -fo u rth s o f th e loans and
Repayment Qf
dollars loaned called for re p a y ­
m e n t th ro u g h a single p a y m e n t. T h e
rem aining loans and dollars w ere fairly evenly divided
betw een th e equal in sta lm e n t and u n eq u al in sta lm e n t
m eth o d s o f re p ay m en t.

METHOD OF REPAYMENT BY
TERM OF LOAN
M ethod of
R epaym ent

0 to
Demand 6 mos.
88 %
Single Payment......... 48 %
Irregular Inst............. 33
8
Regular Inst............... 18
4
T o ta l................... 100%

100%

Over 6 mos.
to 1 year
58%
6
36
100%

Over
1 year

8%

0
92

100%

W ith regard to th e elem en t of safety , 16 percen t
of th e loans to borrow ers w ith a n e t w o rth u n d er
310,000 involved reg u lar in sta lm e n t p ay m en ts, com ­
p ared w ith 7 p ercent for loans to those w ith 310,000
or m ore in n e t w o rth. Sim ilarly, 14 p ercen t o f th e
loans to te n a n t farm ers involved regu lar in sta lm e n ts,
as against 9 p ercen t of th e loans to those w ho own
unm o rtg ag ed farm s. In loans w here some so rt of
co llateral was pledged, a fo u rth of th e loans called for
regular in sta lm e n ts, while on loans w here th e b ank
did n o t require any pledged secu rity only 4 p ercen t
involved reg ular in sta lm e n t p aym ents.

Terms of
Loans

N on-real e sta te loans to farm ers are pred o m in a n tly sh o rt-te rm loans. T h e ac­
com pan y ing c h a rt shows th a t o f th e 1,120
loans surv ey ed , 70 p ercent were w ritte n for a term of
six m o n th s or less, w ith an o th e r 13 p ercen t o f th e
to ta l in th e form o f dem and loans. O nly 17 percen t
of all th e loans were for m ore th a n six m o n th s and only
7 percent had a m a tu rity o f g re a te r th a n one year.
T h ere was little relation sh ip betw een th e size o f th e
loans and th e te rm o f th e loans, hence th e d istrib u tio n
o f th e to ta l d ollar volum e o f loans by th e ir te rm did
no t v a ry g re a tly from th e num erical d istrib u tio n .

T h ere seem ed to be v ery little relatio n sh ip betw een
th e m eth o d o f re p a y m e n t and th e size o f th e loan.
In ste a d , th e decisions reg ard in g th e re p a y m e n t m eth o d
seem to hav e been d eterm in ed chiefly by th e len g th
o f th e loan and secondarily by th e elem en t o f loan
safety. S lightly o v er h a lf o f th e loans w ith a te rm
of over six m o n th s prescribed re p a y m e n t in reg u lar
in stalm e n ts, w hereas o nly one loan in 25 w ith a te rm
of six m o n th s or less req u ired reg u lar in sta lm e n ts.

An analysis o f th e relation sh ip of th e te rm o f th e
loan to th e purpose o f th e borrow er in m akin g th e
loan disclosed th a t over tw o -th ird s o f th e loans ru n nin g
for m ore th a n a y e a r were n eg o tiated to p ay for
m achinery or livestock. W hen sh o rte r te rm loans
were analyzed th e p ro p o rtio n of loans m ade for th a t
purpose grew sm aller, while an increasing share of th e
loans were designed to m eet living or p ro d u ctio n costs.
L oans w ith a term of 6 m o n th s or less paid for m a­
chinery or livestock in 29 p ercent o f th e cases while
34 percen t of such loans were to help th e borrow ers
m eet prod uction or living costs.

Usual Rate of Interest Charged by 59 Banks

Average Interest R ate by Size of Loan

NUMBER
OF BANKS




NUMBER
OF BANKS

MONTHLY BUSINESS REVIEW

T h ere also ap p eared to be som e co rrelatio n betw een
th e te rm o f th e loan and th e secu rity . A b o u t 85 p er­
cen t o f th e loans w ith a te rm o f o v er a y e a r w ere
secured, com pared w ith a figure o f 65 p ercen t for loans
ru n n in g from over 6 m o n th s to a y e a r, an d a m uch
low er figure o f 37 p e rc e n t for loans m a tu rin g in 6
m o n th s or less.

Loan
F ifty -six p e rc e n t o f th e 1,120 non-real
Security e sta te loan s to farm ers w ere unsecured.
F o u rte e n p ercen t o f th e loans w ere en­
dorsed, w hile th e rem ain in g 30 p ercen t o f th e loans
were secured by som e ty p e o f co llateral such as m a ­
chinery, livesto ck , or grow ing crops.

LOAN SECURITY BY NET WORTH
AND TENURE OF BORROWER
Net Worth
of
Borrower
Under $2,000...............................................
$2,000-39,999..............................................
$10,000-324,999..........................................
$25,000 and over. . . .................................

Borrower Tenure
Owner, no mortgage..................................
Owner, mortgage........................................
Tenant or cropper......................................

Proportion
of Loans
Unsecured...............................................................................
56%
E ndorsed................................................................................
14
M achinery...............................................................................
10
Multi-type Collateral*........................... .............................
7
Livestock.................................................................................
6
Growing Crops.......................................................................
2
Other........................................................................................
5

Type of Security

100%

T h e re w as little correlation betw een th e se c u rity o f
th e loans and th e ir size. A stro ng relatio n sh ip a p ­
p a re n tly existed, how ever, betw een th e sec u rity
sta tu s o f th e loan an d th e n e t w orth as well as te n u re
o f th e borrow ers. O nly a b o u t o ne-fou rth o f th e loans
to borrow ers w ith a n e t w o rth of u n d er 32,000 were
unsecured, w hereas a b o u t th re e -fo u rth s of th e loans
to borrow ers w ith a n e t w o rth o f a t le a st 325,000 were
in th a t category.
W ith regard to th e te n u re o f th e borrow ers, those
w ho ow ned th e ir own farm s and h ad no m ortgage
borrow ed w ith o u t p u ttin g up secu rity in tw o -th ird s
o f th e loans surv ey ed , w hereas te n a n ts or croppers
w ere able to borrow w ith o u t secu rity in only ab o u t
on e-th ird o f th e ir loans.

Secured
33%
41
64

Unsecured
67%
59
36

H a lf o f th e loans su rv ey ed w ere m ade
to borrow ers w ith n e t w o rth ran g in g
from 32,000 to 39,999. T h e accom p a n y in g c h a rt show s, t h a t 12 p e rce n t
o f th e loans w ere to borrow ers w ith less th a n 32,000
w ith th e rem aining 38 p e rce n t to th o se w ith a n e t
w o rth of 310,000 or m ore. W hen th e d o llar volum e
of loans w as considered, how ever, it w as found th a t 70
p ercen t o f th e dollars w ere loaned to th o se w ith a
n e t w o rth o f a t lea st 310,000.
A ta b u la tio n o f th e relatio n sh ip o f n e t w o rth to
th e purpose o f th e borrow er disclosed th a t th e dom i­
n a n t purpose of th e loans in th e case o f borrow ers
w ith low n e t w o rth w as to m eet living or p ro d u ctio n
costs. O n th e o th e r h a n d , th e m o st im p o rta n t p u rpose
o f th e borrow er w ith a re la tiv e ly high n e t w o rth w as
to b u y m ach in ery or livestock. T h e su rv e y d a ta also
in d ic a te d th a t th e average size of th e loans increased
ra p id ly in d irec t re latio n to th e n e t w o rth o f borrow ers.
SIZE OF LOAN COMPARED WITH NET WORTH OF
BORROWERS
j;

■■vs Average
Size of Loan
Under $2,000......................................................................
$ 340
$2,000-$9,999......................................................................
480
$10,000-$24,999..................................................................
890
$25,000-$99,999..................................................................
1,820
$100,000 and over.............................................................
3,100

N et W orth of Borrower

A lm ost th re e -fo u rth s o f th e farm er-b o rro w ers in ­
volved in th e loan su rv ey own th e ir ow n farm s.
F u rth e rm o re , ab o u t 43 p ercen t o f th e borrow ers ow n
farm s w ith no m o rtgage.
D istribution of Loans by Term

PERCENT
OF TOTAL

PERCENT
OF TO T A L

PERCENT
OF TOTAL

00

I00T

80-

80

80-

60-

60

NUMBER OF LOANS




Percent of
Loans
Unsecured
24%
53
68
79

C H A R A C T E R IS T IC S O F B O R R O W E R S

D istribution of Loans by Size
PERCENT
OF TO T A L

Percent of
Loans
Secured
76%
47
32
21

N e t W o r th
an d T e n u re
of B o rro w e r

SECURITY OF NON-REAL ESTATE
LOANS TO FARMERS

•Combination of crops, livestock or machinery.

September 1, 1947

-it00

NUMBER OF LOANS
80

September 1, 1947

9

MONTHLY BUSINESS REVIEW

Purpose A lm ost h a lf th e to ta l n u m b e r o flo a n s were
of Loans m ade to finance th e pu rch ase o f m ach in ery
or livestock. T h e n e x t m o st im p o rta n t
reason for borrow ing w as to p a y p ro d u ctio n o r living
costs and 29 p ercen t o f th e loans w ere found in th is
category. T en p ercen t o f th e loan s w ere to enable
th e borrow ers to b u y or im p ro v e lan d and buildings,
a nd a few loans w ere used as a m eans o f rep ay in g
deb ts. T h e purpose th e b o rro w er h ad in m in d was
n o t sta te d in 14 p e rc e n t o f th e loans.
PURPOSE OF LOANS
No. of
Loans
To Buy Machinery or Livestock....................... 43%
To Pay Production or Living C osts.................. 29
To Buy or Improve Land-Buildings................. 10
To Repay D eb ts..................................................... 4
Purpose Unknown................................................. 14

No. of
Dollars
53%
17
17
3

10

100%
T o o ir
—
T h e larg er loan s te n d e d to go for th e p u rch ase of
m ach in ery or livesto ck , and to b u y o r im p ro v e lan d
and buildings. T h e su rv ey also disclosed t h a t th e re
is little v a ria tio n in th e p u rposes of b orrow ing by
te n a n t-c ro p p e rs com p ared w ith th e purposes o f farm

AVERAGE SIZE OF T Y P E S OF FARM S
Average
Acreage
L ivestock............................................................ 152
General................................................................ 138
D airy...................................................................
132
Tobacco..............................................................
106
91
Fruit. . .................................................................
All Farms.......................................................
132

Type o f
Farm

ow ners, except th a t v ery few loans to te n a n t croppers
were to finance th e p urchase or im p ro v em en t of land
an d buildings.

Size and Type A lm ost h a lf o f th e farm s represented
of Farm
in th e su rvey ranged betw een 70 and
139 acres in size. T h e accom panying
c h a rt ind icates th a t 31 percent of th e farm s ro taled
140 or m ore acres, w hereas 23 p ercen t w ere u n d er 70
acres.
T h ere was a su b sta n tia l difference in th e average
size of th e v arious ty p e s of farm s. L ivestock and
general farm s exceeded th e over all average o f 132
acres, while d airy farm s were ab o u t equal to th e
average in size. F ru it and to bacco farm s, on th e
o th e r h an d, were m uch sm aller th a n th e average.

N et Worth of Borrowers

D istribution of Loans by Size of Farms
PERCENT
OF TO TAL

PERCENT
OF TO TA L

PERCENT
OF TOTAL

IOO|—-----------------------------------------------------------------------il00

100

NUMBER OF LOANS

60 ao'H

Industrial Summary
{Continued from Pag e 12)

As a resu lt of th e te n -d a y coal m iners’ v a catio n ,
th e Ju ly re p o rt o f th e O re and C oal E xchange shows
th e very low figure o f 4,600,000 tons of coal dum ped
in to vessels a t low er lake docks bound for u p p er lakes
delivery. T h is is th e low est to n n ag e for J u ly in over
ten y ears and is 41 p ercen t below la st year. T h e to ta l
for th e shipping season, how ever, is 20 p ercen t above
la st year, w hen o u tp u t and shipping w ere adversely
affected by th e coal strike.
A ccording to th e B ureau o f th e C ensus, th e value
of coal exports rep o rted a t 362.5 m illion in M a y and
361.6 m illion in Ju n e led all o th e r exp orted com ­
m odities. Ju n e ex po rts o f 8,300,000 ton s of coal were
close to th e record of 8,400,000 to ns set th e previous
m o n th and m ay be com pared to a m o n th ly average
of 3,975,000 la st y e a r and 1,200,000 tons in 1939.

Construction

C o n stru ctio n c o n tra c ts aw arded in
Ju ly increased over Ju n e for b o th
residential and non -resid ential projects in th e com ­




bined P ittsb u rg h -C le v e la n d -C in c in n a ti te rrito rie s ac­
cording to th e F. W . D odge C o rp o ratio n . T h is gain
am o u n ts to 38 p ercen t for resid ential c o n stru ctio n
and 23 percen t in th e non -resid en tial ty p e , exclusive
of public w orks and u tilities.
D u rin g th e first seven m o n th s o f 1947, th e to ta l
value of c o n tra c ts aw arded for resid en tial co n struc­
tion was 6 p ercen t over la st y ear in th e th ree m e tro ­
po litan areas o f th is D istric t, as com pared w ith an
aggregate decrease o f 11 p ercen t in all 37 states.
In
n o n-residential building, how ever, a F o u rth D istric t
decline o f 25 p ercent com pares w ith a 21 p ercen t drop
in th e 37 states.
W eekly building p erm its in C leveland continue to
disp lay a sh arp increase over corresponding periods
la st year. In A u g u st th e average w eekly increase
over th e sam e m o n th of 1946 am o u n ted to 60 per­
cent, following a sim ilar y e a r-to -y e ar gain o f 55 per­
cen t in Ju ly . In th e first six m o n th s o f 1947 an
average gain o f 8 p ercen t was registered.

MONTHLY BUSINESS REVIEW

10

September 1, 1947

DEPARTMENT STORE TRADE STATISTICS
Sales by Departments—July, 1947

Inventories by Departments—July 31, 1947

As C om pared w ith a Y ear Ago

As C om pared w ith a Y ear Ago

(Compiled A ugust 27, and released for publication A ugust 29)

(Compiled Septem ber 2, and released for publication Septem ber 3)

M ajor Household A ppliances........................................................................... ....+ 7 7 %
Domestic Floor C overings................................................................................. ....+ 2 9
Sportgoods (including C am eras)..................................................................... ....+ 2 0
A rt Needlework and A rt G oods...........................................................................+ 1 6
M en’s and Boys’ Shoes...................................................................................... ....+ 1 4
N otions.................................................................... ....................................................+ 1 3
Luggage. . . . _ . ....................................................................................................... ....+ 1 2
Coats and Suits (W om en’s and M isses’) ...........................................................+ 1 0
In fan ts’ W ea r........................................................................................................ ....+ 9
F urniture and B eds............................................................................................. ....+ 9
C otton W ash G oods............................................................................. .. ................+ 7
M en’s C loth in g ........................................................................................ .................+ 6
Corsets and B rassieres........................................................................................ ....+ 6
R esta u ra n ts........................... I .............................................................................. ....+ 6
Silverware and Jew e lry ...................................................................................... ....+ 5
Lamps and Shades............................................................................................... ....+ 5
Shoes (W omen’s and C hildren’s ) .........................................................................+ S
M A IN STO RE T O T A L .......................................................................................+ 4
M illinery.....................................................................................................................+ 4
C hina and G lassw are.......................................................................................... ....+ 3
B eauty Salo n ......................................................................................................... ....+ 3
W omen’s U n d erw ear...............................................................................................+ 1
Neckw ear and S carfs...........................................................................................
-oT oilet Articles and Drug Sundries..................................................................
-oG loves...................................................................................................................... ....— 1
Books and S tatio n ery ..............................................................................................— 1
Domestics and B lan k ets.........................................................................................— 1
Blouses, Skirts and K nit G oods...........................................................................— 2
Laces and T rim m ings......................................................................................... ....— 2
D raperies and C u rta in s ..........................................................................................— 3
Boys’ C lothing and F u rn ish in g s..........................................................................— 3
H andkerchiefs....................................................................................................... ....— 3
M en’s Furnishings (H ats and C a p s )..................................................................— 5
Silks and Velvets (Woolen Dress G o o d s)..................................................... ....— 5
H ousew ares............................................................................................................ ....— 6
Dresses (W om en’s and M isses’) ...................................................................... ....— 7
uniors’ and Girls’ W ea r........................................................................................— 7
e ath er Goods (S m all)...........................................................................................— 8
F u rs .......................................................................................................................... ....— 8
Photographic S tu d io ................................................................................................— 9
Toys and G am es.......................................................................................................—18
Aprons and H ousedresses.................................................................................. ....—18
Hosiery (W om en’s and C hildren’s ) .....................................................................—18

J

A lthough Ju ly d e p artm en t store sales in the Fo u rth D istrict were the
largest on record for the m onth, th e m argin over a year ago was small, and
chiefly ascribable to sustained volume in th e house furnishing division. Gains
in basem ent store tra d e also contributed su b stan tially to th e over-all gain
over Ju ly 1946.
Sales of m a jo r h o u s e h o ld a p p lia n c e s were the second highest on record
for any m onth, and 77% greater th a n a year ago. T rad e in d o m e s tic floor
c o v e rin g s was lower th a n during the spring m onths b u t ran 29% ahead of
1946 and established a new all-tim e high for the m onth. At th e other
extrem e, sales of d o m e s tic s , b la n k e ts , e tc ., have fallen behind la st year for
three consecutive m onths.
t
Volume of sales in th e s p o r ts g o o d s and lu g g a g e d ep artm en ts was up 20%
and 12% respectively, from a year ago, whereas sales of to y s a n d g a m e s
throughout 1947 to date have com pared unfavorably with year ago figures.
In the masculine apparel lines, th e m ost noticeable gain occurred in M e n ’s
a n d b o y s ’ s h o e s where sales were 14% above the 1946 level, and th e highest
on record for th e month.
T he 10% increase over last year in w o m e n ’s a n d m is s e s ’ c o a t s a n d s u its
represents the most favorable comparison in th a t d e p artm en t since last
December. On the oth er hand, sales of w o m e n ’s h o s ie r y were 18% less
than a year ago. This relatively adverse tren d has been in effect since early
this year, bu t has become more pronounced since about th e first of June.
O ther item s of women’s wear in which sales in July were noticeably below
a year ago were w o m e n ’s a n d m is s e s ’ d re s s e s , off 7 % , j u n i o r s ’ a n d g ir l s ’
w e a r, off 7% , f u r s , off 8% , and a p r o n s , h o u s e d r e s s e s ,- e tc ., off 18%. In
th e Iast-nam es d ep artm en t sales were th e sm allest for th e m onth in three
years.

M ajor Household A ppliances......................................................................... .... + 2 26%
M en’s C lothing................................................................................................... ....+ 1 1 0
Domestic Floor C overings............................................................................... ....+ 82
M en’s and Boys’ Shoes..................................................................................... ....+ 78
Shoes (W omen’s and C hildren’s ) .......................................................................+ 58
Sports Goods (Including C am eras)................................................................... + 44
C otton W ash G oods...............................................................................................+ 40
Hosiery (W om en’s and C hildren’s ) ...................................................................+ 23
Silks and V elvets....................................................................................................+ 22
China and G lassw are.............................................................................................+ 18
F urniture, Beds, M attresses and S prings................................................... ....+ 16
M en’s Furnishings (Including H ats ana C a p s )........................................ ....+ 15
Domestics, Blankets and T ow els.......................................................................+ 8
Luggage.....................................................................................................................+ 4
Corsets and B rassieres...................................................................................... ....+ 2
M AIN STO RE T O T A L ..................................................................................... +
1
Silverware and Jew elry .........................................................................................+
1
Aprons, Housedresses and U niform s............................................................ ....— 1
D raperies and C u rta in s.................................................................................... ....— 5
W omen’s U nderw ear......................................................................................... ....— 5
H ousew ares...............................................................................................................— 6
Dresses (W omen’s and M isses’) ......................................................................... — 10
Boys’ C lothing and F urnishings.................................................................... ....— 12
Books and S ta tio n e ry ............................................................................................— 14
N o tions......................................................................................................................— 15
Laces and T rim m ings........................................................................................ ....— 15
Toilet Articles and D rug Sundries................................................................ ....— 16
Art Needlework and A rt G oods..................................................................... ....— 20
In fan ts’ W ea r...................................................................................................... ....— 23
Coats and Suits (W omen’s and M isses’) .........................................................— 27
M illinery................................................■..................................................................— 29
Lam ps and Shades............................................................................................. ....— 30
H andkerchiefs..........................................................................................................— 31
Toys and G am es................................................................................................. ....— 32
Leather Goods (S m all)..........................................................................................— 32
G loves.................................................................................................................... ....— 33
F u rs ........................................................................................................................ ....— 35
Neckw ear and S carfs........................................................................................ ....— 36
Juniors’ and G irls’ W ea r...................................................................................... — 42
Blouses, Skirts and K nitgoods....................................................................... .... — 47
D epartm ent store inventories in the Fourth D istrict declined during July
for the fourth successive m onth to a point approxim ately even w ith a year
ago.
This downward tren d , how ever, was not universal th ro u g h o u t all d e p art­
ments. Inventories of m a j o r h o u s e h o ld a p p lia n c e s increased further
during July and at m onth-end were the highest on record, up 226% in a year,
and about 87% since Jan u a ry 1.
Stocks of m e n ’s c lo th in g likewise moved upw ard during July to an
unprecedented level for this tim e of year.
O ther departm ents in which Ju ly 31 inventories, while som ew hat below
the preceding m onth, were th e highest on record for m idsum m er included:
d o m e s tic flo o r c o v e rin g s up 82% over a year ago, m e n ’s a n d b o y s ’ s h o e s ,
up 78% , w o m e n ’s a n d c h i l d r e n ’s s h o e s , up 58% , s p o r t g o o d s , up 44% .
In contrast to these changes, stocks of s m a l l l e a t h e r g o o d s on Ju ly 31
were the lowest for th e m onth in five years or longer. G lo v e inventories
were the lowest for any Ju ly 31 since 1943, and a sim ilar condition existed
in to y s a n d g a m e s .
There were seasonal increases in a num ber of feminine apparel and readyto-w ear accessories departm ents, bu t in m any instances Ju ly 31 inventories
were the sm allest in three years. T ypical am ong these were: i n f a n t s ’ w e a r,
23% below a year ago; w o m e n ’s a n d m is s e s ’ c o a t s a n d s u i t s , off 27% ;
m illin e r y , off 29% ; f u r s , off 35% ; and j u n io r s a n d g ir l s ’ w e a r, 42%
below a year ago.
Inventories of b lo u s e s , s k i r t s , e tc ., declined som ew hat seasonally during
Ju ly to the lowest for th e m onth in th ree years.
These figures are not adjusted for price changes during the various intervals.

July Department Store Sales by Cities*
Indexes of Department Store Sales and Stocks
A djusted for
W ithout
Seasonal V ariation Seasonal A djustm ent
J u ly
Ju n e
Ju ly
Ju ly
Ju n e
July
1947
1947
1946
1947
1947
1946

SALES:
Akron ( 6 ) ..................... 302
C anton ( 5 ).................. 338
C incinnati ( 8 )............ 326
Cleveland (1 0 )........... 278
Colum bus ( 5 )............. 327
Erie ( 3 ) ........................ 301
P ittsburgh ( 8 ) ............ 289
Springfield ( 3 ) ........... 305
Toledo ( 6 ) ................... 296
W heeling ( 6 )............... 256
Youngstown ( 3 ) ___
314
D istrict (9 6 )...............
281
ST O C K SD is tric t................. . . . 216
r— Reviled.




305
344
314
271
327
303
254
289
272
248
307
284
231

(Compiled A ugust 26, and released for publication A ugust 28)
% Change From

D aily A verage for 1935-1939=100

274r
326
298
252
321
278
281
289
272
249
294
260

251
273
238
209
255
229
188
229
210
189
235
220

281
330
283
249
304
269
251
287
253
221
288
267

227r
264
218
189
250
211
183
217
193
184
221
203

213

216

222

213

Sales D uring Ju ly (July 1941=100)

C IT Y
J u n e ’47 J u l y ’46 1941
1943
1945
1946
A k ro n ..................
-1 1
+10
100
131
151
175
W h e e lin g ............ - 1 4
+ 3
100
99
148
184
-1 5
+ 9
100
124
139
176
E rie ................
C in c in n a ti.......... - 1 6
+ 7
100
116
160
206
C olum bus...........
-1 6
+ 2
100
135
186
233
C leveland............ - 1 6
+11
100
113
139
169
T oledo.................. - 1 7
+ 9
100
134
170
205
C a n to n ................
-1 7
+ 4
100
134
155
194
F ourth D istrict - 1 7
+ 8
100
117
151
190
Y o u n g s to w n ....
-1 8
+ 7
100
120
158
194
-2 0
+ 6
100
164
178
201
S p ringfield.........
P itts b u r g h .........
-2 5
+ 3 - 100
112
154
205
* Based on daily average sales.
D epartm ent store sales usually reach the low point of th e sum m er
July. This year, however, the decline from June was som ew hat more
able th a n usual.
CContinued on Page 11)

1947
194
189
191
221
238
187
223
200
206
207
212
211
during
notice­

September 1, 1947

MONTHLY BUSINESS REVIEW

11

FINANCIAL AND OTHER BUSINESS STATISTICS
Bank Debits*—July, 1947

Times Deposits—12 Fourth District Cities

(In thousands o f dollars)
(Compiled A ugust 8, and released for publication August 11)
% Change
3 M onths % Change
Ju ly
from
Ended
from
1947
year ago
+ 8 .4 % 318,219,780
+ 1 4 .4 %
ALL 29 C E N T E R S ............ 36,091,049
10 L A R G EST C E N T E R S :
A k ro n ..................
C a n to n ................
C in c in n ati.........
C leveland...........
C olum bus...........
D a y to n ...............
T o led o .................
Youngstown . . .
E rie ......................
P ittsb u rg h .........

216,554
- 3 .5
99,186
+ 16 .4
782,094
+ 1. 8
1,617,989
+ 9..2
453,395
- 4 .1
227,403H + 2 0 .,5
356,513
4
143,868H + 2 7 . 1
80,216
+ 15,.1
1,584,162
+ 1 3 .,6

T o ta l................................... 555,561,3 80
19 O T H E R C E N T E R S :
C ovington-N ew port . . . Ky.
L exington................. . ..K y .
H a m ilto n ..................
L im a..........................
L o rain ........................
M ansfield..................
M iddletow n.............
P o rtsm o u th ..............
Springfield................ . . Ohio
Steubenville.............
W arre n ......................
Zanesville.................
B u tle r........................ Penna.
F ran k lin .................... Penna.
G reensburg.............. Penna.
H om estead ............... Penna.
Oil C ity ..................... Penna.
S haron....................... Penna.
W heeling................... W. Va.
T o ta l......................

659,865
299,186
2,369,688
4,807,084H
1,338,671
662.904H
1,054,297
427,480H
237,765
4,764,596

+ 8 . 3% 316,621,536

+ 0.5
+ 1 8 .0
+ 11.6
+ 1 3 .2
+ 6 .6
+ 2 3 .5
+ 1 4 .2
+ 3 9 .0
+ 1 4 .5
+ 1 8 .6
+ 1 4 .4 %

3 36,167
47,715
31,341
36,798
16,788H
35,680
27,903
18,340
41,232
21,653H
31,832
22,680
30,800H
6,371
18,534
7,913 H
18,760
24,688H
54,474

- 9. 1%
- 1 .,3
+ 19..3
+ 9. 8
+ 27 .2
+21 .3
+ 8. 9
+ 15 .4
+ 7. 0
+ 5 .6
+ 11..2
+ 10 .5
+ 2 6 .2
- ?. S
+ 6.,3
+ 5.,2
+ 14,,8
+ 2 5 .0
+ 6 .5

106,647
148,223
100.541H
113,296
49,534H
108.371H
84,637
57,034
123,137
63,066H
101,203
72.036H
86,199H
20,027
53,721
22.540H
58,001
71,443H
158,588

- 1 . 2%
+ 6. 5
+ 2 7 ,,6
+ 1 6 ,,7
+ 3 0 ,5
+ 2 7 ,,4
+12, 7
+ 2 0 .3
+ 11 .1
+ 9 1
+ 2 0 .6
+21 ,5
+ 2 2 .3
- 4 5
+ 1 2 .,7
+ 7 7
+11 0
+ 2 4 ..7
+ 5,.9

3529,669

+ 9,•6%

31,598,244

+ 14.■2%

H denotes new all-tim e high for one m onth or q u arter-y ear.

(Compiled A ugust 7, and released for publication A ugust 8)
Average W eekly C hange D uring:
First
5 Weeks
4 WTeeks
Ended
Ended
H alf
1947
June 25, 1947 Ju ly 30, 1947
+3448,000
+3395,000
+ 3 631,000
337,000
+ 340,000
3,000
+
176,000
46,000
66,000
+
167,000
+
49,000
+ 59,000
+
77,000
53,000
+ 14,000
+
+ 43,000
29,000
+ 78,000
+
25,000
29,000
+ 48,000
+
34,000
33,000
77,000
+
65,000
16,000
10,000
+
+ 113,000
64,000
+
19,000
+
+ 45,000
28,000
11,000
+
8,000
16,000
+ 22,000

C ity and
Time
N um ber
D eposits
of Banks
July 30, 1947
Cleveland
. . . ago
3860,463,000
July 1947(4) .year
Pittsburgh (13) . . .
339,131,000
C incinnati (8) . . . .
183,319,000
Akron ( 3 ) ...............
102,584,000
Toledo ( 3 )..............
90,315,000
Columbus (3) . . . .
71,996,000
Youngstown (3) . .
53,232,000
D ayton ( 3 ).............
49,677,000
C anton ( 4 ) .............
39,592,000
38,179,000
Wheeling (6 )..........
29,059,000
Lexington (5) . . . .
10,587,000

+
+

TO TA L— 12 Cities 31,868,134,000

+31,600,000

+3788,000

+3500,000

Time deposits a t 59 banks in the largest cities of the F o u rth D istrict
advanced to a new all-tim e high during the m onth of July. T he average
weekly gain am ounted to 3500,000, com pared w ith 3788,000 in June and
3700,000 in May. T he Ju iy rate of increase was the low est experienced in
the postw ar period to date.
D uring the first half of 1947 the average weekly increase in tim e deposits
am ounted to 31,600,000. The average gain in J a n u a ry was a t a seasonal
high of 33,800,000, while the average for the succeeding five m onths was
about 31,100,000. I t is estim ated th a t the average weekly gain in the first
half of 1946 came to 33,500,000, while the second half figure was 31,850,000
In July, tim e deposits increased in seven of the twelve cities from which
reports are received. O utstanding gains occurred in C le v e la n d and W h e e l­
in g , where the average weekly advances were the largest reported since
February. Large gains also occurred in E rie and C o lu m b u s , where the
Ju ly figures were substantially higher than the averages for the first half of
the year.
Time deposits also advanced in A k ro n , T o le d o and L e x in g to n . A k ro n
is now the only city were tim e deposits have advanced every m onth since
this series was first compiled in Ju ly 1946.
T otal tim e deposits declined slightly during Ju ly in P it t s b u r g h , C in c in ­
n a t i , Y o u n g s to w n , D a y to n , and C a n to n . This was the third successive
drop for C in c in n a ti and C a n t o n , while the decrease in D a y to n was the
second consecutive reduction. The nominal decrease in P i t t s b u r g h was
the first reported for th a t city since this series was begun a year ago. In
all cities where reductions occurred, to ta l tim e deposits are less than one
percent below the respective all-tim e highs.

* debits to all deposits accounts except in terb an k balances.

Retail Trade
Bank debits in 29 Fourth D istrict cities during July totaled 36,091,000,000,
the largest figure reported in th e postw ar period to d ate with the exception
of the all-tim e high of 36,629,000,000 set last December. T otal debits in
June am ounted to 36,068,000,000 while the M ay aggregate was 36,060,000,000.
July bank debits were approxim ately 8% above the to ta l reported for the
corresponding m onth a year ago. However, this was th e sm allest percentage
gain reported over year-ago figures since Ju n e 1946. The year-to-year gain
in June was 16% while the M ay figure was 20% .

T E N L A R G E S T C IT IE S
Debits for the th ree-m onth period of M ay-June-July were a t an all-time
high in C le v e la n d , D a y to n , and Y o u n g s to w n . The Ju ly to tals at the
la tte r two cities likewise co n stitu ted record highs.
Y o u n g s to w n , w ith an increase of 27.1% over a year ago, led th e large
cities in this respect for th e fifth successive m onth. O ther o u tstan d in g yearto-year gains were reported by D a y to n (20.5% ), C a n t o n (16.4% ), E rie
(15.1% ), and P it t s b u r g h (13.6% ). C le v e la n d and T o le d o were close to
th e 8.3% average for all ten large cities. T he increase in C in c in n a ti was
1.8 %.
July debits in A k ro n and C o lu m b u s were under the to tals for a year ago.
It was the first tim e since June 1946 th a t any of th e large cities dropped below
their respective year-ago totals.
N IN E T E E N SM A LL ER C E N T E R S
D ebit totals for Ju ly were a t an all-tim e high in five of the nineteen smaller
centers. The cities were L o r a in , S te u b e n v ille , B u tle r , H o m e s te a d ,
and S h a ro n . In these five cities and in H a m ilto n , M a n s fie ld , and Z a n e s ­
v ille , aggregate debits for the three-m onth period of M ay -Ju n e-Ju ly were
likewise a t record high levels. B u tle r debits exceeded th e 330,000,000 mark
for the first time.

July Department Store Sales by Cities
(Continued from Page 10)
F or the Fourth D istrict as a whole, Ju ly sales fell 17% short of the J une
to ta l. Sales were larger th an a y ear ago by 8% , and t hus were the highest
on record for the m onth.
Dollar volume continues to run a t levels approxim ately twice as large as
in the com parable months of prew ar 1941.
IN D IV ID U A L C IT IE S

The June-July shrinkage in sales in A k ro n am ounted to only 11% as against


Percentage Changes
From Preceding Y ear
STOCKS
SALES
SALES
July
July
First 7
1947
M onths
1947

D E P A R T M E N T STO RES (96)
C in cin n ati..................................................
C olum bus....................................................
P ittsb u rg h .................................................
Springfield..................................................
... Youngstown': TV. .T .............................
O ther C itie s...............................................
W E A R IN G A P P A R E L (14)
C in c in n ati....................................................
P ittsb u rg h ...................................................
O ther C itie s................................................

....

+ 10
+ 4
+ 7
+ 11
+ 2
+ 9
+ 3
+ 6
+ 9
+ 3
+ 7
+29
+ 8

+ 6
+14
+ 9
+ 9
+ 7
+1 1
+ 9
+ 6
+10
-o+ 11
+26
+10

+ 3
a
- 8
+ 6
- 4
+20
- 4
a
-1 1
- 7
a
+ 3
- 2

+ 6
- 7
-1 2
+ 4
- 3

+
-

2
4
9
1
3

+30
+28
-1 4
-1 9
+ 3

+
+
+
+

6
5
10
8
4

+
+
+
+
+

6
4
9
8
4

+
+
+
+

19
9
8
8

+
+
+
+

+15
+ 19
+34
-1 1
a
a
a
a
+32
+ 23

F U R N IT U R E (60)
C in c in n ati....................................................

P ittsb u rg h ..................................................
Allegheny C o u n ty .....................................
O ther C itie s.................................................

a
23
17
19
12

a N ot available.
Figures in parentheses indicate num ber of firms reporting sales.
the D istrict average of 17%. The 10% gain over a year ago in A k ro n like­
wise was one of the largest year-to-year increases.
The seasonal decline was much more pronounced in S p rin g fie ld and
P i t t s b u r g h where sales declined 20% and 25% respectively, from the June
level.
Sales in the C le v e la n d area ran 11% ahead of a year ago for the widest
margin among the eleven m ajor cities. In C a n t o n , C o lu m b u s , P i t t s ­
b u r g h and W h e e lin g , gains over la st year were in the 2 % -4 % range.
C o lu m b u s stores, however, continue to report the largest increase over the
prew ar period. Ju ly sales were 238% of the Ju ly 1941 total.

12

MONTHLY BUSINESS REVIEW

September 1, 1947

INDUSTRIAL SUMMARY
Iron and
Steel

In Ju ly , according to th e A m erican Iron
and Steel In s titu te , p ro d u ctio n
of
steel ing o ts and steel for castings to ta le d
6,570,000 to n s, th e sm allest o u tp u t, on a d aily average
basis, of an y m o n th th is y e a r, reflecting th e adverse
effect of th e coal m in ers’ v ac a tio n . O p eratio n s were
a t 85 p ercen t o f c a p a c ity , th e first m o n th in 1947
d u rin g w hich th e ra te fell below 90 percen t. A u g ust
ra te s h av e been high, how ever, and for th e w eek
ended A u g u st 30, mills in P itts b u rg h p roduced a t
973^ percen t o f c a p a c ity , C leveland 9 4 ^ p ercent,
Y oungstow n 92 p ercen t, and W heeling 89 p ercen t,
w ith th e n a tio n a l average a t 93 p ercent.
N e t sh ip m en ts o f finished steel p ro d u c ts in Ju n e
w ere ju s t u n d e r 5.3 m illion to n s. Sheets accounted
for 23 percen t o f th e to ta l, b ars 16 p ercen t, p lates 11
p ercen t, pipe and tu b e s, 10 p e rc e n t, shapes 7 p ercent,
strip 5 p ercen t. J u ly pig iron p ro d u ctio n from 23
b last furnaces in th e P ittsb u rg h -Y o u n g sto w n -C Iev ela n d -D e tro it region am o u n ted to 2.2 m illion tons, ju s t
a b o u t h a lf th e n a tio n a l to ta l. T h e sev en -m o n th s’ to ta l
for th e n a tio n w as 33.7 m illion to n s, a 51 p ercent
increase o v er th e sam e period in 1946.
P rospects are t h a t high d em an d for p ractically all
m ajo r steel p ro d u c ts will co n tin u e for some m o n th s
to com e. A t p resen t, according to Steel, severest
shortages exist in flat-rolled item s, pipe, p lates, shapes
and bars.
T h e price o f steelm ak in g scrap has backed aw ay
from th e lo ng-tim e high estab lish ed a few w eeks ago.
Steel’s com posite m a rk e t average for scrap drop p ed
from $41.75 to $37.83. O th e r prices in th e ferrous
m etals m a rk e t rem ain v irtu a lly unchan g ed w ith th e
exception o f a lead in g F o u rth D istric t p ro d u c e r’s de­
cision to raise his pig iron price to th e level o f scrap.
T h is change w as th e o u tg ro w th o f a situ a tio n faced
b y those iron and steel p ro ducers w ho norm ally use
scrap and th e ir ow n pig iron in m ak in g steel, w hile
selling p a rt o f th e ir pig iro n o u tp u t to o th e r steel
m ak ers or to foundries. W hen scrap prices clim bed
beyond pig iron prices, an y pig iron w hich was sold
h a d to be s u p p la n te d b y hig h er cost scrap.
T h e recen t d ro p in th e scrap prices is n o t necessarily
in d ica tiv e o f a prolonged dow nw ard tre n d in view of
th e fac t th a t steel p ro d u ctio n rem ains a t a co n sisten tly
high level, resu ltin g in a c o n tin u in g real need for scrap.
M oreover, scrap stocks h av e increased only slightly
d u rin g recen t m o n th s.

Brick and T o ta l sh ip m e n ts o f unglazed b rick in M a y
Tile
and Ju n e reach ed 400 m illion bricks per
m o n th for th e first tim e since la s t N o v e m ­
ber. S h ip m en ts in J u n e w ere 15 p ercen t above those
o f a y e a r ago an d p ro d u c tio n to ta lin g 414 m illion
bricks, w as 11 p e rc en t above. Stocks hav e been
accu m u latin g for a n u m b e r o f m on th s.
S tru c tu ra l tile sh ip m e n ts in J u n e for th e n a tio n and
th e D istric t w ere dow n 7 to 8 p ercen t from th e prev ious
m o n th . A sp o t check o f F o u rth D istric t pro d u cers
shows Ju ly sh ip m en ts w ere u p a b o u t 40 p ercen t, while
J u ly p ro d u ctio n w as double th a t of Ju n e.



Cement

A t th e c u rre n t ra te of a c tiv ity re p o rte d by
th e B ureau of M ines, F o u rth D istric t
cem ent m a n u fa c tu rin g is ru n n in g a t record levels.
D istric t p ro d u ctio n of X]/^ m illion barrels of p o rtlan d
cem ent in Ju n e b ro u g h t th e to ta l for th e first h a lf of
th e y e a r to ju s t u n d e r 8 m illion barrels. T h is is th e
highest ra te of p ro d u c tio n for th e period since 1930
w hen slig h tly m ore th a n 8 m illion barrels w ere p ro ­
duced d u rin g th e first half.
T h e D istric t rise o f 10 p e rc en t in p o rtla n d cem ent
o u tp u t in Ju n e 1947 over Ju n e 1946 w as m atc h ed by
producers in th e n a tio n as a whole. S h ip m en ts from
D istric t m ills, how ever, w ere up 40 p e rc en t as com ­
pared w ith a n atio n a l increase of 25 percent.
D istric t clinker p ro d u ctio n registered a 13 percen t
increase in Ju n e o ver th e sam e m o n th a y e a r ago and
w as alm ost tw ice as g re a t as th e co m parable n a tio n ­
w ide increase of 7 percent.
D istric t stocks of b o th p o rtla n d cem ent and clinker
a t th e end o f Ju n e w ere up 82 p e rc en t and 87 p ercen t
respectively in th e D istric t. T hese increases in in ­
ventories o ver la st y e a r are likew ise hig h er th a n for
th e n a tio n as a w hole for w hich increases o f 44 p ercen t
in p o rtla n d cem ent and 17 p erce n t in clinker w ere
reported.

Machine
Tools

Ju ly sh ip m en ts of m achine tools w ere
estim a te d a t $18.7 m illion by th e N a tio n a l
M achine T ool B u ilders’ A ssociation. T h is
figure rep resen ts a 23 p erce n t drop from Ju n e and
ex tends th e decline in to th e fo u rth consecutive m o n th .
P a rtia lly as a resu lt o f th e decrease in sh ip m en ts,
prelim in ary rep o rts of unfilled orders show a slight
m o n th -to -m o n th increase for th e first tim e in a year.
T h e in d u stry expects th a t its business will tu rn u p ­
w ard seasonally in th e fall, a b e tte d by th e im p e tu s
given by th e M achine T ool Show in C hicago th is
m onth.
C oal

N a tio n a l coal p ro d u ctio n of 47,800,000 to n s in
Ju n e and 39,690,000 to n s in J u ly m easured a
red u ctio n of 6 p e rc en t and 23 p ercen t, resp ectiv ely ,
from th e corresponding m o n th s o f 1946. D aily average
o u tp u t th ro u g h A u g u st 16 w as 1,964,000 tons.
An a tte m p t to d eterm in e th e effects o f th e recen t
coal w age p a c t on p ro d u c tio n m a y be so m ew h at in ­
conclusive a t th is tim e. D u rin g th e four w eeks ended
A u g u st 16, (w hich excludes th e 10-day v ac a tio n early
in Ju ly ) w eekly p ro d u c tio n has averaged 11,800,000
to n s as com pared to an average of 12,400,000 to n s
la st y e a r in th e sam e period. P a rtly responsible for
th is drop in p ro d u ctio n is th e sh o rtag e in th e n u m b e r
of freig h t cars available a t th e m ines for th e loading
o f coal, a situ a tio n w hich caused th e sh u td o w n of
several large m ines in th e D istric t for a n u m b er of
days. A lth o u g h som e “ w ild c a t” strik es have occurred,
m ost of th ese h av e been o f sh o rt d u ratio n .

{Continued on pagt 9)