Full text of Economic Review (Federal Reserve Bank of San Francisco) : January 1953

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MONTHLY REVIEW
TWELFTH

FEDERM

R ESERVE DISTRICT

F e d e r a l r e s e r v e B a n k o f S a n F r a n c is c o

J a n u a r y 1 953

IMPACT OF DEFENSE-TWELFTH DISTRICT VERSUS UNITED STATES
the outbreak of hostilities in Korea, the United
entered another period of substantial military
production. The upswing in military output added a large
new element to the high level of demand already existing
in June 1950. National security expenditures for goods
and services jumped from $18 billion in 1950 to more
than twice that amount in 1951. By the end of 1952 these
expenditures were above the $50 billion m ark on an an­
nual basis. The subsequent rapid pace of industrial pro­
duction, plant and equipment expansion, construction,
employment, and consumer spending has lifted the na­
tional economy to levels that considerably overshadow
all previous peaks. Even after adjustm ent for price
changes, the 1952 flow of goods and services was 11 per­
cent above the 1950 volume. This expansion on a na­
tional basis is substantial, but the gains in the Twelfth
District are even more impressive.
Most indicators reveal that although the pattern of
growth is similar, the District has expanded more than
the nation as a whole. Most of the difference in change
is concentrated in the size of the increases rather than in
their timing or duration. Because the more rapid expan­
sion in this District reflects the impact of the defense pro­
gram to a large extent, the question of economic vulner­
ability of this District when military spending declines
is of considerable interest. Comparison of some of the
differences between the District and national economy
indicates that the weak spots are not the same in the F ar
W est as in the nation. The vulnerability of the District
does not appear to be significantly greater, however, than
that of the country as a whole if the potential weaknesses
of the national economy are taken into consideration.

A

fte r

S elected I ndicators — U

nit e d

S tates

l States

Post-Korea expansion greater in District
than in United States
Expansion resulting from the defense program has
been considerably greater in the Twelfth District than
in the country as a whole. District firms have received
17 percent of the m ajor prime defense contracts. This
compares with 8.4 percent of the national total of value
added by manufacture in this District during 1950. Even
in the one m ajor activity in which there has been a de-




and

T w e lf t h D istrict

(-----Change since KoreaU nited
States
+ 7
+ 8
+ 16
+44
+ 9

Twelfth
D istrict
+ 12
+ 23
+ 24
+ 46
+ 28

— 25

— 14

D w elling u n its authorized in u rb a n areas,
m onthly a v e r a g e ...........................................

cline—residential construction—the decline has been
considerably smaller in the District than in the nation.
Responding to the large outlays for defense goods,
total nonagricultural employment in the District in­
creased from 4.8 million in June 1950 (on a seasonally
adjusted basis) to 5.4 million at the end of 1952. This
gain in employment was considerably more rapid than
the increase in the labor force, and the ratio of unem­
ployment to total labor force dropped from about 8.0
percent in late 1949 to 2.9 percent at the end of 1952.
During the same period the proportion of unemployed
nationally dropped from 5.4 percent to 2.2 percent. The
considerably higher ratio of unemployed in this District
has been a cause for concern for more than a decade.
Even during W orld W ar II the ratio of unemployed here
exceeded that in the country as a whole by a substantial
margin. Despite war and postwar growth this condition
has persisted. F or the most part it reflects a more rapid
growth of the labor force in the District than in the rest

Also in This Issue

Prices—The Return fo Stability
Relative Pay Levels in the Twelfth
District and the Nation
The United States Shipping Account
and the Balance of Payments
Supplem ent

Cattle Feeding and its Place in
Twelfth District Agriculture

January 1953

FEDERAL RESERVE B A N K OF SA N FRA N C ISC O

2

of the country and the natural difficulties associated with
the absorption of continued immigration from other
areas. By 1950, however, the influx of new residents to
the area had slowed, and even in the months before
Korea the ratio of unemployed had begun to drop. The
sharp rise in employment opportunities since Korea has
induced a new flow of immigrants, but job opportunities
have risen faster than the number of applicants. As a re­
sult, the gap between the ratios of unemployed in the
nation and in the Twelfth District has been greatly re­
duced.
Gains in District manufacturing accounted for a m ajor
portion of the increase in employment. The W est Coast
aircraft industry more than doubled its employment,
adding 130 thousand workers. The electrical machinery
industry— including electronics as a m ajor component—
also more than doubled its job holders, adding 30 thou­
sand. Employment in nonelectrical machinery increased
by 40 thousand, and in shipbuilding by 10 thousand. T o­
gether these industries accounted for 210 thousand of
the 300 thousand new m anufacturing jobs. Considerable
expansion also occurred in the apparel, chemicals, paper,
TO TA L N O N A G R IC U L TU R A L EM PLOY M ENT
U N ITE D STATES A ND T W E L F T H D ISTR IC T , 1950-1952

TO TA L M A N U FA C T U R IN G EM PLO Y M EN T
U N IT E D STATES A N D T W E L F T H D ISTRICT, 1950-1952
Thousands
of workers

Thousands
of workers

1,5001

116,500 :
-

f

-

1,400

15,500
/Unite d States
i

(n'ahit scale)

1,300

/
jhmmhi

jr**'*

14,500

v

J

-

/ Twelfth District
r

(left scale)

1,200

13,500

-

1,100

12,500

(A dju sted for sea so n a l variation)

Thousands
of workers




Thousands
of workers

19 51

1952

S o u rc e : U n ite d S tates D e p artm e n t of L ab o r, B u re au of L a b o r S tatistics
and cooperating S tate agencies.

and metals lines. Although most of the District gain in
employment has occurred in defense m anufacturing in­
dustries, the continued expansion of several nondefense
industries points up the continued growth of the area.
Chemicals and electronics, for example, although im­
portant to the defense effort, have large potential peace­
time uses, the development of which has been restrained
by their diversion to military goods.
All these forces have generated a high level of income
which has been translated into an increasing flow of con­
sumer expenditures. One example of this rising volume
of spending at retail is the 28 percent increase in the
value of department store sales since June 1950. This
compares with a national gain of 9 percent. This growing
rate of spending adds further impetus to the over-all
economic expansion in the District. The record of retail
sales demonstrates emphatically that the D istrict ac­
counts for a growing share of the national m arket and
provides further opportunity for industry to expand in
this District or to migrate to it.
Pattern o f change usually similar, but variations
reveal interesting differences between District
a nd United States econom y

The forces which underlie the D istrict and national ex­
pansion are generally similar and tend to create patterns

January 1953

3

M O N T H L Y REVIEW

D EPA RTM EN T STORE SALES
U N IT E D STATES AND T W E L F T H D ISTR IC T , 1950-1952
(A d ju ste d for season al variation, 1947-1949=* 100)

Percent

was occasioned by the steel strike. Although the steel
industry is fairly sizable in the District, it is relatively
much less im portant than in the country as a whole. Also,
one large California steel mill continued to operate dur­
ing the strike. Since many steel-using industries were
able to draw upon inventories, only a minor reduction in
jobs occurred at these plants. The effect of the steel strike
upon District employment, therefore, was not noticeable.
M anufacturing employment in this region dropped
more sharply in May 1952 than it did nationally. A lum­
ber industry strike in this District accounted for the dif­
ference. Dry weather last summer forced a cutback in
logging and sawmill activity during September with a
consequent dip in m anufacturing employment. Nation­
ally, the impetus imparted by the recovery from the steel
strike and the relatively smaller importance of lumber
operations permitted manufacturing jobs to rise sharply.
Rates of growth point up other differences

The greater impact of the defense program points up
additional and perhaps more fundamental differences be­
tween the Twelfth District and the nation. The District
has some industries which are subject to wide fluctua­
tions. The aircraft industry, which accounted for 56 per­
cent of the national value added by plane output in 1947,
is dependent to a large degree on military orders. Since
LOANS AND DISCOUNTS—M EM BER BANKS
U N IT E D STATES A N D T W E L F T H D ISTRICT, 1950-1952

of similar shape even if the rates favor this District. The
accompanying charts illustrate the similarities as well as
the differences. Loans and discounts of this area and the
United States have risen in a remarkably similar pat­
tern ; with a few minor exceptions, so have deposits. The
number of dwelling units authorized offers a few more
exceptions, particularly in 1951. In the second quarter of
that year a large number of public housing units were
started in the country as a whole, but very few of these
were in the F ar W est. This accounts for the m ajor dif­
ference apparent in that segment of the economy.
Yet, the variations in pattern that do exist point up
some of the differences, other than in rates of growth,
between the regional economy of the F a r W est and that
of the nation. Starting in July 1951, national manufac­
turing employment started a decline that lasted until No­
vember of that year. This drop reflected a delayed reac­
tion to the reduction in consumer spending on durable
goods and an overestimate of the m arket by some pro­
ducers. As a consequence, the output of some appliances
was cut below the level permitted by National Produc­
tion Authority allotments. The impact in this District
was negligible because consumer durable production,
relative to total manufacturing, is considerably less im­
portant here than nationally. The sharp drop nationally
in manufacturing employment during July of last year




Millions
of dollars

Billions
of dollars

4

January 1953

FEDERAL RESERVE B A N K OF S A N FRA N C ISC O

large volume in this industry comes only during periods
of defense activity, the District economy tends to experi­
ence a sharper than average impact from the accompany­
ing expansions and contractions in aircraft production.
Shipbuilding, currently much less important than aircraft,
exhibits this characteristic even more intensely. The Dis­
trict shipbuilding industry suffers from freight rate dif­
ferentials, a lack of shipways for some of the larger classes
of vessels, and an historical predisposition toward E ast­
ern yards. It tends to prosper, therefore, only when ac­
tivity is so great that there is an overflow requiring the
use of W estern facilities.
O ther D istrict industries tend to be marginal to the
national structure of their particular line. Both the elec­
trical and nonelectrical machinery industries along the
Pacific Coast include facilities of national concerns which
are likely to be the first to be cut back and the last to be
brought into production. This reflects the fact that some
of the D istrict plants in these industries are better suited
to job-order or “tailor-m ade” projects than to mass out­
put. As a result the machinery industries in this area
have had wider swings than those nationally.
Continued growth of District
dam pens downswings

As a result of the peculiar characteristics of the air­
craft, shipbuilding, and machinery industries, one would
D E M A N D D E P O S IT S A D JU S T E D 1— M E M B E R B A NK S
U N IT E D ST A T E S A N D T W E L F T H D IS T R IC T . 1950-1952
Million*
of dollars




of dollars

82

79

70

N U M B E R O F N E W D W E L L IN G U N IT S A U T H O R IZ E D
U N IT E D S T A T E S A N D T W E L F T H D IS T R IC T , 1950-1952

1950

1951

1952

* L a te s t da ta c h arte d : U n ite d S tates, N o v em b er; T w elfth D istric t, D e ­
cem ber.
S o u rce: U nited S tates D epartm ent of L abor, B ureau of L a b o r Statistics.

expect the District to show much wider swings than the
nation. Fluctuations in the aircraft and shipbuilding in­
dustries, however, have not had significant influence on
the over-all level of economic activity in the District, ex­
cept during periods of expanding or contracting defense
activity. The defense character of these two industries
resulted in more contraction here after W orld W ar II
than in the country as a whole. But this gap was made
up in fairly short order because of the D istrict’s new and
strengthening position as a m ajor market. Since Korea,
of course, the rapid rise in the use of D istrict aircraft
facilities has generated expansionary influences that have
not been offset by other forces.
The movements that can be attributed to the machinery
industries—except in the post-Korean period— have had
but little effect, particularly on the downside. The steady
m igration of industry to the D istrict has partly offset re ­
cession losses in these industries. In addition the D istrict
does not react to the swings in consumer durable output
or the recurring crises in textile production which have
a marked effect elsewhere. As a result, therefore, the Dis­
trict has not shown much more instability than the na­
tion as a whole during periods of recession.1 A n added
favorable factor in the future will result from the con­
tinued growth of the machinery industries in this District.
More and more the newer plants— suitable for mass out­
put—will dominate the picture, and the m arginal plants
will recede in importance.
Som e segments need watching

Liquidation of the defense effort could create prob­
lems in two industrial segments. A decline in aircraft
production and a reduction in military establishments
1See Monthly Review, June 1949, pp. 63-65.

January 1953

M O N T H L Y REV IEW

would cut the number of jobs. There is not now the void
which existed at the end of W orld W ar II in service,
trade, and construction, which absorbed large numbers
of the then displaced workers. Many of the jobs which
might be lost now would have to be replaced by economic
growth within the District—a steady but slower process
than that which accompanied transition at the end of
W orld W ar II. Less vulnerable are the machinery indus­
tries which have peacetime outlets—particularly for elec­
tronics—that might prevent a significant decline.
Another potentially weak area is the lumber industry.
This is particularly important in Oregon and W ashing­
ton where diversification and growth rates are less pro­
nounced than in California. The lumber industry de­
pends to a large extent for its prosperity upon the hous­
ing market. A further decline in construction, independ­
ent of any defense activity reduction, could cause a con­
siderable amount of unemployment. A t present, homebuilding seems destined for another good year, but in the
future it may be necessary to develop new industries to
absorb the lumber workers if serious unemployment is
to be averted.
Vulnerability not confined to District

Though the District has obvious areas of potential
weakness, it is not significantly more vulnerable than
the nation as a whole. Consumer durable output in the
nation as a whole could suffer severe reverses in a period
of decline. F or some items the margin of unsatisfied new
demand is relatively thin compared to earlier years. Sus­
tained production depends in large measure on more ex­
tensive use of automobiles and appliances by families al­
ready owning such equipment and on a good replacement
rate. In turn this requires at least a steady if not an ex­
panding flow of income. A recession could cause a sharp
reduction in the output of these items, but such a turn of
events would have little direct effect upon the basic in­
dustries of this District. The textile industry has been in
chronic throes of recession and revival since the end of
W orld W ar II and is exceedingly sensitive even to small
changes in consumer outlays. But again in this case the

5

Twelfth District is not likely to be affected as much as
the country as a whole.
On the other hand, a reduction in defense activity
would leave a smaller imprint elsewhere in the nation for
aircraft and other items which are also produced in the
F ar W est, but the im print would be there. Indeed, it
could cause more difficulty in the Pittsburgh-Chicago
belt than it could in this District. Machine tool produc­
tion, heavily concentrated in that area, might suffer a
substantial reduction in activity. Even in late 1952, the
volume of new orders for machine tools fell sharply while
production expanded rapidly. The backlog of orders is
still so large that some time will pass before any distress
appears. Production of steel and processed metal items in
which that area leads would also be affected. Even in
that area industrial diversification is such that a decline
in defense spending might result only in reduction in the
output of certain products, but total production might
change very little if civilian demand expands.
The problems of this District differ from those nation­
ally in some respects. The F ar W est has experienced the
largest impact from the defense program, and declining
defense activity may become a relatively greater dampener here than elsewhere. Aside from defense industries
proper, the lumber industry is subject to wide fluctua­
tions as a concomitant of variations in home building. On
the other hand, fluctuations associated with consumer
durable goods, producer durable goods, and the textile
industry can result in sharp reductions of employment in
the country as a whole but not in the Twelfth District.
The over-all difference between the nation and the
Twelfth District is more pronounced as to the industries
that might be affected rather than as to the degree of
distress resulting from reductions in defense spending or
a business recession. The more rapid rate of growth of
the District, which seems likely to continue, acts as a par­
tial buffer. This tends to give the Twelfth District a rela­
tive advantage over the country as a whole, but the
growth factor alone probably is not sufficient to offset
the entire impact of all possible downward pressures—
it can merely moderate their effects on this District.

PRICES—THE RETURN TO STABILITY
over-all stability that has characterized the econ­
T
omy of the United States for the past year and a half
has been the result of a rather precarious balancing of
inflationary and deflationary forces. Those segments of
the economy most closely allied with the defense procure­
ment program have expanded and are continuing to ex­
pand output and productive capacity. This is evidenced
by the record rates of expenditure by business firms for
new plant and equipment, a m ajor share representing
added capacity for military production, and by the rising
rate of defense expenditures, which are largely for goods
of a durable nature. Segments of the economy that are
closely dependent upon consumer buying have under­
gone rather wide swings in activity in the past two and
h e




a half years. The buying sprees which followed upon the
Korean outbreak and again when the Chinese commu­
nists entered the war sent consumer expenditures to ex­
tremely high levels. During the period between the two
m ajor buying waves, and subsequently, consumer spend­
ing, measured as a percentage of income, fell sharply and,
although it has risen somewhat since the low in early
1951, it remains below most post-W orld W ar II years.
Reflecting these shifts in expenditure rates by consum­
ers, the inventory and output policies of the consumer
goods industries have experienced marked changes over
the post-W orld W ar II period, especially in those indus­
tries producing the m ajor items of household durable
equipment.

6

FEDERAL RESERVE B A N K OF SA N FRANCISCO

The m ajor restraints imposed upon the growth of
credit in the past two years have contributed signifi­
cantly to the general stability of the country’s economy.
Both general and selective credit controls have been used
in the period since Korea, supplemented by the Volun­
tary Credit R estraint Program . The removal of Reserve
System support of Government bonds at par, following
the Reserve-Treasury “accord” of M arch 1951, has had
the general effect of tightening the reserve position of the
banking system as a whole, with a consequent increase
in the cost of borrowed funds. Member bank borrowing
from the Reserve Banks has risen sharply, but owing to
the short-term nature of such borrowing and the reluc­
tance of banks to remain in debt, this method of obtain­
ing bank reserves has exerted a greater restraining in­
fluence on bank credit expansion than existed when Gov­
ernment securities could readily be sold at par for that
purpose.
Although the expansion in bank loans since Korea has
been substantial, it was much smaller than the increase
that might have occurred in the absence of credit re­
straints. Reflecting the expansion in private bank credit
as well as the reappearance of Federal deficit financing,
the total money supply has risen substantially. However,
during 1952 most of the increase in the privately-held
money supply occurred in time deposits, which are much
less active than demand deposits. This reflects the sub­
stantial rate of personal saving that started in early 1951
and has continued since.
Direct controls over wages, prices, and materials, im­
posed by the Federal government under the Defense
Production Act of 1950, have also contributed to the con­
tainment of inflationary pressures during the past two
years. M ajor revisions have occurred in these controls
since their imposition in early 1951, however. Price ceil­
ings have been allowed to rise in certain instances as cir­
cumstances and Congressional mandates have demanded
such action, and the regulations have been suspended
where prices have fallen well below ceiling levels. W age
increases have been granted to reflect rises in living costs
and in order to maintain production in strategic indus­
tries threatened with prolonged labor difficulties. Restric­
tions on the use of materials have generally been relaxed
and greater quantities of critical metals have been made
available for civilian uses as supplies of these items im­
proved.
The factors outlined above and the generally increased
costs of production and changes in the basic supply posi­
tion of some m ajor commodities represent the main ele­
ments affecting prices over the past year and a half or so.
The average level of wholesale and consumer prices has
changed only moderately since m id-1951. Prices of in­
dividual or particular types of commodities, however,
have moved divergently, but on balance the movements
have been largely offsetting in character. The Bureau of
Labor Statistics index of prim ary m arket prices has de­
clined about 3 percent in the past year and a half, which
contrasts sharply with the rise of some 16 percent in these




Jan uary 1953

prices in the first seven months following Korea. The
consumer price index since m id-1951, while continuing
to rise steadily throughout most of the period, has risen
less than 3 percent compared with an increase of 8 per­
cent from m id-1950 to February 1951. Movements within
the m ajor commodity groups, reflecting developments
which affected particular markets at different times,
form the basis of much of the discussion to follow. The
m ajor distortions which occurred in the structure of
prices during the highly inflationary period were largely
eliminated during the second and third quarters of 1951,
although the pre-Korean relationships were not finally
restored until the latter half of 1952.
Large harvests and heavy marketings reflected
in the decline of farm prices

The prices of farm products, which have declined sub­
stantially from their 1951 peaks, account for a m ajor
share of the total decline in average wholesale prices
since the end of the immediate post-Korean inflation. A t
the end of 1952 farm product prices were some 13 percent
below their peak level of February 1951 but were still on
the average approximately 9 percent ahead of the level
prevailing just prior to the Korean outbreak. The princi­
pal portion of this decline occurred during the past
twelve-month period, largely as the result of the heavy
movement of meat animals to market, especially beef
cattle and hogs. Numbers of meat animals on farms
reached record proportions in the first half of 1952, and
this combined with a relative shortage of cattle feed has
forced the speed-up in the movement of meat animals to
final consumer markets. Other farm products, notably
cotton, have also been in somewhat more than ample sup­
ply and as a consequence have shown significant price1
weakness. A reduced foreign demand, stemming from a
continuing dollar shortage plus increased farm produc­
tion abroad, has added to the weakness in farm product
prices generally. As a result of these demand and price
developments, combined with a rise in farm operating
costs, the net income of farmers has declined somewhat
from the very high level reached in 1951. A further de­
cline appears to be indicated for the year ahead, and some
farm crops whose prices have been above support levels
will once again have to be propped up by Government
action under existing farm parity formulae.
Processed and m anufactured foodstuffs, other than
meat, have fluctuated somewhat less in price on whole­
sale markets than have farm products generally, al­
though they have tended to follow substantially the same
pattern. Lowered raw materials costs have been at least
partially offset by increased costs of labor and other
materials and services involved in their production.
These cost factors have contributed an element of sticki­
ness in the prices of processed and manufactured foods,
and consequently their prices have not fluctuated as
sharply as those of foods that reach the ultimate con­
sumer in substantially the same form as that in which
they are originally produced, Also, demands for foods

January 1953

M O N T H L Y REV IEW

that have been processed or manufactured have remained
somewhat firmer, reflecting rising consumer incomes and
a continuance of a high rate of population increase.
Shifts in consumer buying patterns decisive
in some price movements
The rate of buying by consumers has varied rather
markedly in the past two and a half years, both as to the
proportion of current incomes spent and the classes of
goods or services purchased. Spending rates were upped
drastically in the m ajor buying waves which followed the
Korean outbreak and were curtailed sharply subse­
quently. The first of the buying waves was concentrated
largely in the stocking-up on m ajor durables, while the
second affected the markets for durable and nondurable
goods about equally. Since the last wave of buying sub­
sided in February 1951, consumers have restricted their
buying rate out of current incomes, although until the
latter half of 1952 there has been a tendency for this
rate to rise. These shifts had sharp repercussions on
business policies affecting rates of production and more
importantly regarding the level of inventories to be held.
Inventories of consumer items that accumulated in great
quantities during the latter half of 1950 and the first two
quarters of 1951 were instrumental in maintaining output
of the producing industries during that period. The slack­
ening in consumer purchasing, however, caused these in­
ventory holdings to be excessive in terms of current sales
levels and resulted in a sharp cutback in new orders, with
a consequent severe impact upon the level of manufac­
turing operations. As consumers have digested their pur­
chases made during the buying waves, they have re-en­
tered the markets as more vigorous purchasers, first for
nondurable goods. Beginning in the second and third
quarters of 1952, they have also shown an increased in­
terest in the m ajor household durables and automobiles.
Inventories have been adjusted to a level more in line
with sales, and in late 1952 some new accumulation be­
came noticeable, most pronounced in the durable sector.
Prices in those markets dealing with commodities im­
portant in consumer budgets have reflected these develop­
ments. Textile and apparel prices and prices for leather
products (including hides and skins) have fluctuated
most widely. The prices of hides, skins, and leather prod­
ucts as a group rose an average of almost 30 percent in
the inflationary upswing, but have since fallen drastically
and in mid-November were slightly below their level of
June 1950. Since May of last year, however, these prices
have firmed somewhat and have risen moderately, 2 to 3
percent. This trend may be reversed, however, by the
recent sharp decline in hide prices. Textile and apparel
prices, while remaining 16 percent ahead of June 1950,
are down about 15 percent from their 1951 peak. Since
the middle of last year prices in this area have fluctuated
only fractionally.
W holesale prices on household appliances and furni­
ture have remained near their 1951 peaks despite the




7

fairly wide swings which have taken place in total con­
sumer expenditures on these items. Average prices at
wholesale on household appliances in mid-November were
less than 1 percent under their post-Korean high and were
some 7 percent ahead of June 1950. The principal decline
in this m ajor group of commodities has occurred in the
prices for radios, television sets, and phonographs. Con­
sumer resistance to high prices as well as the existence
of relatively large unsold stocks held by manufacturers
and dealers resulted in a price decline of 10 percent be­
tween June and August 1950. Since then these prices
have fluctuated only moderately, with virtually no change
occurring in the last half of 1952. This stability has de­
veloped along with the working off of a m ajor portion of
the excess in inventory holdings and the granting of a
large number of new broadcasting permits throughout
the country as many new areas have been opened up for
television reception. The continued high rate of new
residential construction during the past year and in 1951
has also been a sustaining force in the over-all firmness
of prices for household durables and furniture.
Industrial equipment and metal prices remain
near their 1951 peaks
The sustained high rate of expansion in plant and
equipment by business firms, a record rate of total new
construction activity, and a rising rate of defense expendi­
tures by the Government, combined with continued
tightness in the supply of some metals, have been the
m ajor factors sustaining prices of industrial equipment
and metals at near peak levels. Also playing a significant
role in the maintenance of these prices at or near their
ceilings under price stabilization regulations are the in­
creased costs of labor, materials (generally down from
former peaks but still substantially ahead of June 1950),
and many essential business services. Increased excise
taxes, especially those imposed upon manufacturers, have
also contributed to the maintenance of high prices for
particular goods.
Metal and metal products prices rose some 14 percent
during the post-Korean inflation and have declined only
fractionally since reaching their peak in February 1951.
Steel prices have remained at ceilings imposed by the
O P S throughout the period of control, and ceilings were
advanced only last summer as a result of the wage in­
crease granted the steelworkers following the nationwide
strike in June and July. Ceiling prices on imported copper
were increased last year when foreign producers found it
unattractive to sell copper at the ceilings set for domestic
supplies. This change has resulted in an increased inflow
of copper from abroad and has been an important factor
in the over-all easing of some of the tightness that has
surrounded this metal since the war. Aluminum pro­
ducers also were granted higher ceiling prices following
the negotiation of a new labor contract resulting in in­

8

January 1953

FEDERAL RESERVE B A N K OF SA N FRANCISCO

creased wage costs to the producers. U nder existing O P S
pass-through regulations, these increased ceiling prices
on the m ajor metals have resulted in increased costs to
fabricators of metal products and have insofar as possible
been passed on to the ultimate consumers.
Automobile m anufacturers have also been faced with
rising costs of production, both from rising wages and
from the increased prices charged by suppliers of raw
materials and component parts. As a result they have
been granted increased ceiling prices on three separate
occasions since the general freeze on prices in February
1951. Federal excise taxes have also risen significantly.
U pw ard pressures still exist on the prices of most items
of industrial mechanical equipment. Unlike the situation
in most other markets, this pressure has come from both
sides of the m arket mechanism. On the one hand, there
are the record high and still rising demands for industrial
equipment to complete the m ajor expansion programs of
many industries to meet expanded defense needs and ris­
ing civilian requirements. On the other hand, there are
the pressures from increased production costs, particu­
larly wages and the principal metals. It would appear,
further, that no significant easing in these pressures is
in prospect for the coming half year or so, judging from
already announced plans for further plant and equipment
expansion.
There has been a considerable easing in some metal
markets in the past year which has resulted in some price
weakness relative to the first year and a half following
Korea. This has been particularly noticeable in nonferrous metals, especially for lead and more recently for
zinc. Largely responsible for this weakness has been a
decline in the world prices of the nonferrous metals, in­
cluding to some extent copper, although foreign copper
prices are still well above domestic ceilings. This easing
in the foreign markets stems from the fact that the ex­
pected total requirements by the various countries of the
free world in their defense build-ups have fallen sig­
nificantly below what was anticipated earlier. These de­
clines in foreign prices have had a more or less serious
impact upon the economies of some of the foreign coun­
tries whose earnings of needed foreign exchange, includ­
ing scarce dollars, are based upon sales of these metals
in world markets.

gained in a gradual but persistent upward movement
since then.
It is important to note that the consumer price index
is not wholly a commodity index but includes items such
as rent and a variety of personal and household services.
The rent portion of the index has risen steadily and at
about the same rate of increase since the latter half of
1947. Since Korea this element of consumer prices has
increased somewhat more than 10 percent. The com­
ponent of the index containing the services mentioned
above as well as a wide variety of miscellaneous articles
of consumption, including recreation, amusement, non­
food beverages, transportation charges, tobacco, and simi­
lar items has risen more than 13 percent since June 1950,
again in a steady and persistent fashion. Charges for fuel,
electricity, and household refrigeration, also rising with­
out any significant interruption throughout the period,
have gained some 7 percent since June 1950.
COM PARISON OF W H O LESA LE AND CO N SU M ER
P R IC E S -1950-1952
(Ju n e 1950=« 100)

Index

T O T A L IN D E X E S

120
115

W h o le s a le

110
105.

_

j
/

j

/
/

f
A

/

100

/"••••S.
-

R e ta il'
-

1 1 1111 11 111
CO N SU M ER G O O D S

- W h o le s a le ,

/
r y

ammvt-

- R e fa ¡1

>

A LL O THER CO M P O N EN TS2

Consum er p rices steady at record levels

The prices paid for goods and services by moderate
income families in large cities throughout the United
States have remained at the record level reached last
August. In mid-December the Bureau of Labor Statistics
index of consumer prices stood at 190.7 percent of the
1935-39 average, 0.2 percent lower than the August and
November peaks and more than 12 percent above its
level which existed in the month just preceding Korea.
About three-fourths of the total rise in living costs over
the past two and a half years occurred in the first seven
months after Korea and the remaining 4 percent has been




*T he C onsum ers’ P rice Index.
2 T his W holesale group includes raw and sem im anufactured m aterials and
pro d u cers’ e q u ip m e n t; the R etail includes rents and services.
S o u rce : Economic Report o f the President, January 1953. C harts prepared by
th e Board of G overnors of the F e d e ra l R eserve System , based on d ata
from th e D e p artm e n t of L abor.

January 1953

M O N T H L Y REVIEW

The m ajor fluctuations in living costs have occurred
in the apparel, food, and housefurnishings groups. Each
of these m ajor categories of goods rose very sharply in
the inflationary period of 1950 and early 1951, but have
moved somewhat divergently since then. Retail food
prices have been the most volatile of the m ajor items of
consumer expenditures and, as they comprise some 40
percent of the total consumer price index, account for the
largest proportion of the over-all gain in the cost of living
since Korea. In mid-November food costs on the average
were 14 percent above mid-June 1950, but were down
slightly, a little more than 1 percent, from their postwar
peak reached last August. The decline since August re­
flected largely the heavy marketings of meat animals and
a seasonal decline in fresh fruit and vegetable prices fol­
lowing last year’s record harvest.
Apparel and housefurnishing prices have generally de­
clined, with some minor interruptions, since the latter
months of 1951. These prices, however, are still well
ahead of pre-Korean levels, 9 percent for apparel and
almost 16 percent for housefurnishings. Consumer resist­
ance to high prices for these goods during much of 1951
and a generally burdensome level of manufacturer and
dealer inventories account for the price weakness in these
retail markets for most of 1952. It is also probable that
the official measures of these prices fail to reflect the
true extent of this weakness as many of the attempts to
move these commodities took the form of concessions on
trade-ins and other terms of sale. However, a consider­
able firming in the prices for both of these m ajor con­
sumer items was discernible in the latter half of 1952 as
the rate of consumer expenditures rose over earlier peri­
ods. Retail and wholesale trade inventories also, after
more than a year of consistent decline, tended to turn up
in the late months of the year and added to the firming
of these prices, particularly in the durable sector.
Price controls suspended on growing list of
goods and services

The Office of Price Stabilization in April last year
initiated a policy of price decontrol designed to remove
ceilings from goods and services whose prices had fallen
well below ceiling levels and where there appeared little
chance of their rising to ceilings in the foreseeable future.
This policy has been carried forward and the number of
ceilings removed has grown to fairly significant propor­
tions. The most important of these decontrol actions in the
consumer sector include textiles, adult apparel, footwear,
bedding, carpets, radio and T V sets, distilled spirits,
cigars, and certain fats and oils. In percentage terms, the
number of consumer goods and services remaining under
ceiling price regulations has fallen to about 55 percent,
compared with the maximum coverage at the time of the
price freeze of 71 percent. Congress specifically exempted
commodities comprising some 29 percent of all consumer
items of consumption, including utility rates and proc­
essed foods. Decontrol actions have also occurred in




9

wholesale markets which have reduced the coverage of
price ceilings from 87 percent of all items sold at whole­
sale to some 70 percent at the end of last year.
Price stability appears likely to continue

The question of where we are going is always more
interesting (and in many cases more significant) than
the question of where we have been. W hile the first of
these questions can never be answered with any great
degree of positive assurance, there are some segments of
the economy for which the course of the near future is
pretty well set, and other areas where past events are
strong indicators of things to come.
The general level of economic activity in the United
States appears most likely to rise somewhat further from
its currently high level. This is a reasonable expectation
because of a number of factors. National security ex­
penditures already scheduled and funds appropriated will
rise throughout the first half of 1953 at least. Business
demands for plant and equipment, based upon a recent
joint survey by the Securities Exchange Commission and
the Department of Commerce, are expected to remain
high and at about the record level sustained in 1952. Also,
business demands may be bolstered by some new inven­
tory accumulation, the first indications of which appeared
in the closing months of last year. Such an accumulation
would be most likely to occur if aggregate consumer de­
mand should rise as a result of an expanded disposable
income and a possible increase in the percentage of in­
come spent.
On the basis of the factors just mentioned and with
the further assumption that no m ajor upset occurs in the
state of our international relations, the level of aggregate
demand should rise and exert some upward pressure on
the level of commodity prices generally. However, impor­
tant offsetting influences are also present in the situation.
The most im portant of these is the large expansion in
productive capacity that has occurred since Korea and
the substantial additions that will come into operation in
the coming period. Also of considerable importance in
the price outlook are the significant gains that have and
will occur in output per man-hour with consequent cost
saving and a downward influence on the price structure.
Further, demands for wage increases are likely to be less
intense than during 1952 with favorable implications for
both prices and production, particularly from the con­
sumer’s point of view. W ages, it must be recalled, are
both a principal element of production cost and the m ajor
proportion of total consumer income.
The present relations between demand, supply, and
costs of production indicate that no m ajor change is
likely to occur in the over-all level of commodity prices
during the period just ahead. Particular commodities
will no doubt move as a result of special circumstances
that may confront individual markets and through the
operation of usual seasonal forces.

10

January 1953

FEDERAL RESERVE B A N K OF SA N FRANCISCO

RELATIVE PAY LEVELS IN THE TWELFTH DISTRICT AND THE NATION
Twelfth District cities ranked relatively high
in a recent survey made by the Bureau of Labor Sta­
tistics of wage differentials existing among 40 labor m ar­
kets during late 1951 and early 1952.1 Average earnings
in particular areas were determined for 24 types of office
jobs and 17 manual-type jobs which were common to
various manufacturing and nonmanufacturing industries.
The following job classifications were studied: office
workers, plant workers in general, and specific plant
groups of maintenance, custodial and warehouse-ship­
ping workers. Office w orkers’ pay levels were based on
average weekly salaries whereas plant workers’ pay levels
were based on straight time earnings (premium pay and
overtime were excluded). The average pay levels in the
40 labor market areas, which are distributed among 28
states, were ranked according to their position relative
to New York City’s average pay level which was ex­
pressed as 100.
The San Francisco-Oakland area and four other cities
of the Twelfth District were among the 40 labor markets
selected. In all job categories the District labor markets,
with the exception of Phoenix and Salt Lake City, tended
to rank high within the nation and generally higher than
New York City. Phoenix and Salt Lake City tended to
be higher than most Southern cities and a few New Eng­
land cities. In all job categories the San Francisco-Oak­
land labor market pay level ranked first, although the
Detroit pay level was also equal in a few instances.

S

e v e ra l

1 U n ite d S tates D e p artm e n t of L abor, B u reau of L a b o r S tatistics, M onthly
Labor Review, D ecem ber 1952, pp. 620-623.

O ther cities outside of the Twelfth District whose rela­
tive pay levels ranked high were Detroit, Chicago, Cleve­
land, Newark-Jersey City, and New York City. W ithin
the office worker classification, Detroit ranked first along
with San Francisco-Oakland, while Chicago ranked
fourth, New York fifth, and Cleveland sixth. F or gen­
eral plant workers, Detroit ranked second, with Chicago,
Newark-Jersey City, and New York ranking fourth,
sixth, and ninth respectively. Detroit also ranked first
with San Francisco-Oakland in the relative pay level for
maintenance workers. Chicago, Newark-Jersey City, and
New York followed with third, sixth, and twelfth place
ratings in this category. W ithin the custodial job group
ratings, Detroit was second, Chicago fourth, NewarkJersey City fifth, and New York ninth. W ithin the warehousemen-shipping job classification, Detroit again
ranked second, Chicago fifth, Newark-Jersey City sev­
enth, and New York eighth.
The relative pay levels and rank of five Twelfth Dis­
trict labor markets and New York City are listed below.
R e l a t iv e P a y L e v e l s o f T w e l f t h D i s t r i c t L a b o r M a r k e t s
*

(New York’-100)

Plant
M ainteC usto- W arehouseOffice
/—W orkers~\ r-W orkers- ^ ,— nance— \ ,---- dial---- \ /—Shipping-'*
R ela­
R ela­
RelaRelaR ela­
San Francisco- tive R ank tive Rank tive R ank tive R ank tive R ank
113
1
O akland . . . 106
113
1
114
1
1
111
1
108
3
106
3
99
6
106
3
104
5
103
6
105
4
L os A n g e les. . . 105
3
105
4
106
4
P hoenix ......... 90 24
86 26
88 27
85 29
97 18
87 24
Salt L ake City- 85 35
88 27
88 26
92 27
N ew Y ork City 100
5
100
9
100
8
100 12
100
9
R ange of re la ­
tive pay
levels ............ 79-106
60-114
64-113
80-111
69-113

THE UNITED STATES SHIPPING ACCOUNT AND THE BALANCE OF PAYMENTS
e w sectors of United States business are subjected to
wider fluctuations in activity than the shipping indus­
try. Even more discouraging, however, is the fact that
since the end of the clipper ship era the fortunes of United
States shipping have usually been on the downside. Only
the advent of W orld W ar I and W orld W ar II pro­
vided a stimulus to our shipping industry and thus a
brief respite. But in neither instance did the stimulus
provide a lasting resurgence of our merchant marine.
Following W orld W ar I an increasing share of United
States foreign trade was returned to foreign flag carriers
as their fleets were restored and expanded. The share of
our foreign trade (total United States exports and im­
ports) carried by our own ships decreased steadily from
49 percent in 1921 to a low of 22 percent in 1939.
Following the most recent W orld W ar a similar trend
has been developing. The percentage of our foreign trade
carried by United States ships decreased from 65 percent
in 1946 to 42 percent in 1951. This trend has been viewed
with growing alarm by those concerned with the need
for m aintaining a strong merchant marine, and it was the
subject of a recent study by the Maritime Adm inistra­

F




tion of the United States Department of Commerce.1 In ­
creasing competition resulting from the rapid restora­
tion of foreign merchant fleets depleted during the war
and a fall in shipping rates during the past year indicate
rough sailing ahead. The rapidity with which competi­
tion has increased is indicated by the fact that, while at
the end of W orld W ar II United States flag ships con­
stituted 65 percent of the world’s merchant ships, our
fleet today, including the Government’s inactive reserve
ships, constitutes about 30 percent of the total. If all
Government-owned tonnage is excluded, our share would
be reduced to less than 20 percent. W ith the completion
of all new construction presently on the ways our share
of the world’s privately owned merchant ships will be,
reduced to the 1939 level, or about 14 percent. This de­
cline has occurred despite the fact that during the post- ,
w ar period the United States has been by far the most
important trading nation in the world.
Since 1921, with the exception of the years 1943-48,
our ships have carried less than 50 percent of our own
trade. This fact and the rather sharp decline in recent
1 U n ite d S tates D ep artm en t of C om m erce, M aritim e A dm inistration, Participation of United States Flag Ships in American Overseas Trade, 1921-1951,

January 1953

M O N T H L Y REVIEW

11

years have led to requests by shipping interests that the
M erchant M arine Act of 1936 be revised and broadened
to strengthen our merchant marine.
Such requests, however, are likely to encounter oppo­
sition from those who feel that we should encourage,
and certainly not oppose, the efforts of other countries to
earn dollars through the sale of shipping services to us.
By earning dollars in this way, the need for foreign aid
is alleviated to the extent that the dollar shortage is re­
duced. If reduced foreign aid is partly replaced by ship­
ping income, our exports may be maintained at a higher
level than would otherwise be possible. During the inter­
war period many of the other maritime countries, such as
Japan, the United Kingdom, and the Scandinavian coun­
tries, were able to cover an important part of their deficit
in merchandise trade with the United States by the sale
of shipping services to us.
On the other hand, those favoring greater Government
support for our merchant marine point out that it is es­
sential to maintain a strong merchant fleet as “our fourth
arm of defense/’ to be immediately available in time of
war. In times of peace, moreover, if the nation’s foreign
trade is to be maintained at present levels, or expanded,
we must have a strong merchant marine. This is neces­
sary to insure that our foreign traders have adequate and
regular shipping service and to guarantee that our trad­
ers receive equal treatment along the world’s trade routes.
A reconciliation of these divergent views is difficult
because there is considerable merit in both of them. As

an important problem, however, which is facing the Gov­
ernment, a consideration of some of the relevant facts
should be of value, even in the absence of any definite
conclusions.

PER C E N TA G E OF U N IT E D STATES FO R E IG N TRADE
CA R RIED BY U N ITE D STATES FLA G SH IPS, 1921-1951

TOTAL CARGO CA R RIED IN U N ITE D STATES FO REIG N
TRADE BY FLAG OF SH IP, 1921-1951

Percent

*No breakdow n available for 1941.
N o te : T onnages for 1942 th ro u g h 1946 are by control of ship ra th e r than
by flag. F ro m 1921 th ro u g h Ju n e 1950, cargoes under the control of the
A rm y and N avy for m ilitary use w ere excluded from th e data. B egin­
ning w ith Ju ly 1950, shipm ents of “ Special C ateg o ry ” cargoes w ere ex­
cluded, as w ere shipm ents to the arm ed forces abroad for th eir use and
shipm ents of D e p artm en t of D efense controlled cargoes u n d er special
program s.
Source : U nited S tates D ep artm en t of Commerce, M aritim e A dm inistra­
tion, participation of United States Flag Ships in American Overseas Trade,
1921-1951.




The United States merchant marine since World War I

From W orld W ar I until 1936 there was little legis­
lation providing for the construction and maintenance of
our merchant marine. The gradual decline in United
States shipping during the twenties resulted in its reach­
ing its lowest point during the thirties. Deterioration of
existing vessels, high operating costs, low freight rates,
the introduction of subsidies by foreign countries, and
the depressed level of world economic activity during a
large part of this period—all combined to reduce the
United States merchant marine and diminish the share
of United States flag participation in its foreign trade.
The passage of the M erchant M arine Act of 1936,
however, paved the way for the construction of a modern
merchant fleet through a system of construction subsidies.
The Act also provided for regularly scheduled liner serv­
ice under a program of operating subsidies. Although
there was not sufficient time in the remaining prewar
years for a real test of the direct effects of this Act, there
were important indirect effects. F or example, it influ­
enced the distribution of our shipping and our trade.
Largely as a result of this Act, regular liner services were
established by American operators to areas where our
trade had previously been restricted by inadequate ship­

Millions of
longtons

N o te : Tonnages for 1942 th ro u g h 1946 are by control of ship ra th e r than
by flag. F ro m 1921 thro u g h Ju n e 1950, cargoes under the control of the
A rm y and N avy for m ilitary use w ere excluded from the data. B egin­
ning w ith Ju ly 1950, shipm ents of “ Special C ategory” cargoes w ere ex­
cluded, as w ere shipm ents to the arm ed forces abroad for their use and
shipm ents of D epartm ent of D efense controlled cargoes under special
program s.
S o u rc e : U nited S tates D ep artm en t of Com m erce, M aritim e A dm inistra­
tion, Participation of United States Flag Ships in American Overseas Trade,
1921-1951.

FEDERAL RESERVE B A N K OF SA N FRANCISCO

12

ping services and by the failure of foreign lines to pro­
vide equal services to all traders regardless of nation­
ality. In addition, the inauguration of these new services
by United States companies forced foreign lines to im­
prove their services at United States ports. The net effect
was an increase in the number of direct line services to
foreign ports and an increase in the number, regularity,
and dependability of sailings—both of our own and of
foreign ships.
During W orld W ar II United States flag shipping be­
came the m ajor carrier as a result of our wartime ship­
building program and losses of foreign ships. O ur ex­
panded merchant marine carried the m ajor share of the
cargoes of United States foreign trade in the years im­
mediately following the war. The depletion of European
m erchant fleets because of the war, high freight rates, in­
creased and abnormal demand for bulk and other com­
modities, and the legislative requirement that 50 percent
of all United States foreign aid shipments be carried in
United States flag ships also helped to maintain the po­
sition of our shipping industry.
But as foreign countries recovered from the destruc­
tion of the war, competition from foreign flag ships in­
creased. This was brought about in part, initially, by the
U nited States program of disposal of surplus ships and,
in part, by the high rate of foreign shipbuilding. By 1951
foreign flag participation in United States foreign trade
had increased to 58 percent by volume, compared to 35
percent in 1946.
E

s t im a t e d

S

h ip s

F
in

r e ig h t
t h e

C

E

a r n in g s

a r r ia g e o f

E

of

U

x po r ts

U

n it e d

n it e d

1—

S

S

ta tes

ta tes

I

a n d

m po rts

F

o r e ig n

a n d

1946-51

(millions of dollars)
Export
Total
Im port
t----- earnings------ \ /------earnings------^ ,------- earnings--------\
U nited
U nited
U nited
States
Foreign
Y ear and item
States Foreign
States Foreign
ships
ships
ships
ships
ships ships
1946
443
1,141
606
O cean freig h t . . . . 248
163
8932
532
1,054
385
D ry cargo . . .
194
147
860
74
54
16
33
58
87
T a n k e r ...........
1947
Ocean freig ht . . . .
D ry cargo . . .
T a n k e r ...........

320
246
74

225
200
25

9612
932
29

808
738
70

1,281
1,178
103

1,033
938
95

1948
O cean freig h t . . . .
D ry cargo . . . . .
T a n k e r ............ . .

308
203
105

188
154
34

5312
516
15

507
449
58

839
719
120

695
603
92

1949
O cean freig h t .. , . .
D ry cargo . .. , ,
T a n k e r ...........

274
194
80

201
185
16

4552
442
13

420
405
15

729
636
93

621
590
31

1950
O cean freig h t .., 3 1 3
D ry cargo . . ,
225
88
T a n k e r ...........

268
232
36

3222
307
15

334
321
13

635
532
103

602
553
49

1951
O cean freig h t . . . .
D ry cargo . . .
T a n k e r ........... . .

366
245
121

6992
671
28

888
805
83

1,089
920
169

1,254
1,050
204

390
249
141

1 T hese freig h t charges are included in the T ran sp o rtatio n A ccount in our
B alance of Paym ents. Such item s as receipts and paym ents for passenger
fares, expenses of U n ited S tates carriers abroad, and expenses of foreign
carriers in the U n ited S tates are n o t included in the table, how ever.
2 E xcludes freig h t on Civilian Supply and other aid program shipm ents on
A rm y or N avy o p erated or owned vessels to talin g $93 m illion in 1946,
$196 million in 1947, $223 million in 1948, $193 million in 1949, $52
million in 1950, and $46 million in 1951.
S o u rc e : U n ited S tates D ep artm en t of C om m erce, Balance of Payments of
the United States, 1949-1951.




January 1953

The outbreak of the Korean war in June 1950, how­
ever, caused United States flag participation to rise again.
The increased demands of the Korean war stockpiling
programs and unusually large shipments to meet coal and
grain shortages abroad led to a sharp demand for ship­
ping and an increase in freight rates. This increased de­
mand for shipping resulted in the reactivation of over
500 surplus ships from the Government’s so-called “moth­
ball fleet,” most of which were put into operation by p ri­
vate companies under General Agency Agreements with
the National Shipping Authority. But by the end of 1952
most of these ships had been returned to the reserve fleet,
reflecting a decreased demand for shipping and a fall in
shipping rates. On January 1, 1953, the United States
active merchant fleet numbered 1,469 ships, which was
25 percent, or 540 ships below a year earlier. M ost of this
decline took place in the Government-owned fleet which
decreased from 721 to 208 ships.
Freight rates, after reaching a postwar peak in 1948,
dropped by 50 percent in 1949, recovering shortly after
the outbreak of the Korean war in June 1950. In 1951
freight rates rose above the 1948 level, but dropped
sharply in 1952. By the end of 1952, for example, the
rates on coal and grain were less than half the level
which prevailed at the beginning of the year. The earn­
ings of United States shipping firms have oscillated with
these changes.
United States shipping by trade area

The share of United States foreign trade with particu­
lar trade areas which is carried by United States flag ships
depends upon several different factors. Proxim ity of the
trading partners, the amount of private American invest­
ment, the degree of competition from foreign carriers and
from other nations in foreign markets, the composition
of trade, and, since the war, the amount of United States
foreign aid to the individual areas all affect the direction
and distribution of United States flag shipping. F o r ex­
ample, a larger percentage of trade with the Caribbean,
the W est Coast of Central and South America, and Can­
ada is carried by United States ships than with most:
other areas. The importance of American shipping in
these areas can be explained by the proxim ity of these
countries, the absence of an adequate m erchant m arine
in the Southern Hemisphere countries, and a relatively
large investment of private American capital. It is a
characteristic of private United States ship ownership
that more than half of the tonnage is controlled t>y in­
dustrial concerns which have large foreign investments
and are im portant in our foreign trade. This is particu­
larly true of many steel, aluminum, fruit, and oil com­
panies which have im portant investments in those areas
where United States shipping plays an im portant role.
On the other hand, in other parts of South America, in
particular the E ast Coast, the pressure of European com­
petition has resulted in a smaller share of United States
trade carried by American ships.

January 1953

13

M O N T H L Y REVIEW

Because they maintain their own merchant fleet, the
United Kingdom, other Commonwealth countries, and
Scandinavia carry a m ajor share of their trade with
the United States, resulting in a lower percentage for the
United States. The return of Japan as a maritime coun­
try will also probably reduce United States flag activity
in the Pacific area although the outbreak of conflict in
Korea in 1950 temporarily raised the level of American
flag participation.
It should also be noted that certain countries, in par­
ticular the Scandinavian countries and Japan before the
war, are specialists in carrying the trade of other coun­
tries. Income from the sale of shipping services in the
carrying trade is a m ajor export for these countries, and
they send their ships wherever freight is available, pro­
viding stiff competition for American carriers. In con­
trast, United States lines primarily carry cargoes to and
from the United States.

The dollar shortage, in addition, has forced many coun­
tries to reduce their payments to the dollar area for both
goods and services such as shipping. Decreased use of
United States shipping services in the Bayonne-Hamburg range in W estern Europe because of the dollar
shortage has been offset to some extent, however, by the
importance of United States programs for foreign aid
and more recently for the N orth Atlantic Treaty O rgan­
ization.
Grain shipments to India in 1951, under a United States
credit, increased American participation to that area and
demonstrate the fact that in many instances the share of
United States flag shipping is affected by nonrecurrent
factors. It may also be noted that the accompanying table
showing United States flag participation in our trade
with particular areas is in terms of volume, with the re­
sult that bulk commodities figure more importantly than

D i s t r i b u t i o n o f U n i t e d S t a t e s F o r e i g n T r a d e b y T r a d e A r e a a n d F l a g o f C a r r i e r , 1 9 4 8 -5 2
P ercen tag es Show D istrib u tio n of U n ited States E x p o rts and Im p o rts by T rad e A rea and the D egree of
P a rticip atio n by U nited S tates F la g Ships in E ach In stan ce
(percentage o f shipping w eigh t)

EX PORTSTO :
T otal ...............................................................
Canada ......................................................
Caribbean ..................................................
E ast Coast South A m erica..................
W est Coast South A m erica................
W est Coast C entral A m erica
and M exico .........................................
Gulf Coast M e x ic o ................................
U nited K ingdom and E ir e ..................
B altic, Scandinavia, Iceland
and G r e e n la n d ....................................
B ayonne-H am burg R ange ................
P o rtu g al and Spanish A tla n tic .........
A zores, M editerranean and
B lack S e a .............................................
W est Coast A frica .............................
South and E a st A frica .......................
A u stralasia .............................................
In d ia , Persian Gulf and R ed S e a ..
S traits S ettlem ents and N eth erlan d s
E a s t Indies .........................................
South China, Form osa and
P hilippines ...........................................
N o rth China including Shanghai
and Jap a n ...........................................
KM PORTS F R O M :
T o tal ...............................................................
C anada ......................................................
C aribbean ..................................................
E a st Coast South A m erica..................
W e st C oast South A m erica................
W est C oast C entral A m erica
and M exico .........................................
G ulf C oast M e x ic o ................................
U n ite d K ingdom and E i r e ..................
B altic, Scandinavia, Iceland
and G reenland ..................................
B ayonne-H am burg R ange ................
P o rtu g al and Spanish A tla n tic .........
A zores, M editerranean and
B lack S e a .............................................
W est C oast A frica ..............................
South and E a st A f r i c a .......................
A ustralasia .............................................
In d ia, Persian Gulf and R ed S e a .. .
S traits S ettlem ents and N etherlands
E a st Indies .........................................
South China, Form osa and
Philippines ...........................................
N o rth China including Shanghai
and Jap an ...........................................

-1948A m erican
Flag
Total
39
100.0
33.4
30
6.6
57
5.2
33
1.1
58
0.7
0.4
4.9

51
32

2.9
21.3
0.9

-1949American
Flag
Total
36
100.0
29.7
31
7.9
48
29
3.1
1.8
42

-1950A m erican
Flag
Total
100.0
33
27
43.4
8.3
46
4.2
23
37
2.0

0.9
0.4
7.8

32
34
27

0.6
0.5
6.2

22
22
27

30
39
28

5.0
23.6
0.5

25
45
11

5.1
23.6
0.5

28
36
41

11.1
0.7
0.9
1.3
4.1

41
26
56
15
58

9.7

2.4

35
34
40
21
25

1.1
1.2
5.4

36
25
45
18
39

39

0.5

44

0.7

31

0.6

29

20

40
34
31

17
48
7

3.9
17.7
0.9

25
34

12.1

2

0.7

12.6
0.8
l.S
1.0
2.5

50
30
58
21
42

13.3

7.4
0.7

1.5
2.9

55
28
39
23
33

0.5

37

0.7

0.8

6.3
2.6

1.0
1.0

0.8

1.9

53

52

2.2

50

1.3

50

1.2

45

1.8

49

3.5

27

3.1

50

6.5

35

9.3

24

100.0
12.8
50.2
3.4
7.1

60
21
71
54
85

100.0

53
21
65
44
79

100.0
12.6

44
13
54
36
85

100.0
12.3
48.4
2.9
5.0

43
15
51
42
77

100.0

12.7
49.3
2.9
6.4

41
27
47
40
67

1.1
2.0
1.0

74
64
33

1.0
2.4
0.7

76
55
33

0.9
3.5

0.9
3.4
1.2

58
57
32

0.9
2.4

1.1

69
58
34

1.0

61
24
26

4.0
1.5
0.4

28
39
37

4.0
2.0
0.2

24
20
31

3.8
3.4
0.3

21
27
35

3.9
4.8
0.3

27
24
20

3.1
3.1
0.3

29
22
19

3.4
0.8
1.3
0.5
6.6

41
31
90
64
68

2.2

31
22
69
38
50

2.3

1.3
0.4
9.0

1.5
0.3
8.0

23
23
48
35
23

4.4
1.3
1.3
0.3
5.2

19
32
60
36
34

4.6
1.8
1.1
0.4
5.5

20
24
70
39
40

1.5

68

1.6

55

1.3

54

1.7

41

1.4

28

2.1

51

2.4

46

2.0

43

2.3

40

2.4

36

0.3

61

0.5

25

0.6

53

0.4

55

0.4

46

1.0

49.8
2.7
4.8

1.1

S o u rce : U n ited S ta te s D ep artm e n t of C om m erce, B ureau of th e C ensus, F T 973, Waterborne Trade by Trade Area,




-Ja n .-Ju ly 1952— N
American
Flag
Total
100.0
33
33
21.3
39
6.5
28
4.9
1.5
39

30
31
32

1.3

0.7
0.4
6.5

1.1
1.6

-1951----------- ,
American
Total
Flag
37
100.0
23.9
31
5.2
46
4.6
36
42
1.5

10.3
54.8
2.3
4.2

January 1953

FEDERAL RESERVE B A N K OF SA N FRANCISCO

14

other lower-weight, higher-value commodities. As a re­
sult, oil imports from the Caribbean area and bulk com­
modities from South America dominate the import scene
to a greater degree than would be the case if they were
expressed in terms of value.
Shipping services in the balance of payments

Aside from considerations of national defense and the
maintenance of a strong merchant marine in case of
emergencies, low-cost, efficient shipping services— rather
than the flag of the vessel—are important to individual
shippers. A t the present time, however, there is an addi­
tional advantage to be derived from the use of foreign
flag shipping, that is, the earnings of foreign operators
and their contribution to the solution of balance of pay­
ments problems.
From 1921 through 1939 the United States had a sur­
plus of receipts over payments on current account in each
year. This surplus was created by a continuing large sur­

plus of merchandise exports over imports. In each of
those years, however, a part of this “dollar gap” in m er­
chandise trade was offset by net out-payments for ship­
ping services. For the entire period 13 percent of our
export surplus was covered by such paym ents; during
the thirties, however, this percentage was much larger.
During the depression years 1930-35, slightly less than
one-quarter of our export surplus was paid for by serv­
ices provided by foreign ship operators to United States
traders, and during 1936 and 1937, almost three-quarters.
Since the end of W orld W ar II, however, this situa­
tion has been reversed, and in each postwar year the
United States has received more for shipping services
than it has paid out, thus adding to the dollar shortage.
But since reaching a peak of over $1 billion in 1947, our.;
net receipts on transportation account declined sharply
to $128 million in 1950. W hile there was an increase to
$554 million in 1951, this was due to the stimulus of the
Korean war and the increase in United States flag par-

T h e B a l a n c e o n M e r c h a n d is e a n d T r a n s p o r t a t i o n A c c o u n t s o f S e l e c t e d C o u n t r i e s
(in m illion s of U n ited S ta te s d ollars)

-T o ta l M erchandise T ra d e Balance
Im ports
2,177
924
9.848
6,129
5,524
7.822
7,066
5,271
1,343
9,315
11,668
3,817

C ountry
U n ited S tates

Y ear
1938
1947
1948
1949
1950
1951

Fran ce

19382
1947
1948
1949
1950
1951

870
2,292
2,287
1,999
1,958
3,266

— 230
—‘1,264
— 1,233
— 456
— 78
— 770

Italy*

1938
1947
1948
1949
1950
1951

582
1,312
1,462
1,375
1,358
1,914

—
—
—
—
—
—

Jap a n

1936«
1947
1948
1949
1950
1951

1,049
449
547
728
970
1,641

1938
1947
1948
1949
1950
1951

675
1,413
1,612
1,646
1.823
2,114

1938
1947
1948
1949
1950
1951

260
747
700
731
633
809

1938
1947
1948
1949
1950
1951

3,876
6,102
7,209
7,333
6,644
9,779

N eth erlan d s

N orw ay

U n ite d K ingdom

-------- Total T ransportation--------- N
Receipts Payments
N et
2 67
303
—
36
1,788
761
1,027
1,299
630
669
1,176
676
500
926
798
128
1,487
933
554
125
69
89

428
331
260

159
631
292
213
158
274

67
38
45
71

71
195
157
177

—
—
—
—
—
—

14
267
284
195
59
167

96
1
3
9
9
30

32
89
123
173
96
251

—
—
—
—
—
—

89
697
610
369
465
350

Ü6
168

*96
97

—

—
—
—
—
—

68

361
262
325
225
167

— 1,402
— 1,672
— 833
— 569
— 428
— 2,180

...

t------ T rade w ith the D ollar A re a 1—
E xports
Im ports
Balance

—
14
— 303
— 262
— 171
— 141
— 203

53
111
127
112
200
388

171
1,162
874
711
462
689

—
—
—
—
—
—

4
157
112
106
62
101

41
44
95
49
93
113

70
575
517
466
356
455

—
—
—
—
—
—

29
531
422
417
263
342

—
—
—
—
—

64
88
120
164
87
221

121
20
70
79
179
320

260
484
422
575
427
945

—
—
—
—
—
—

139
464
352
496
248
625

7
20
71
102
68
97

13
47
43
57
68
126

53
584
340
372
250
326

—
—
—
—
—
—

40
537
297
315
182
200

—
—
—
—
—
—

6
204
88
91
55
95

157
264
363
366

68
143
246
250

89
121
117
116
142
234

4
46
37
30
40
47

10
250
125
122
95
142

464
842
1,007
1,023
854

371
729
701
714
543

93
113
306
309
311
336

256
512
771
672
865
1,068

962
2,279
1,623
1,604
1,203
2,046

— 118
— 1,051
— 747
— 599
— 262
— 301

— 706
— 1,767
— 852
— 932
— 338
— 978

1 U n ite d S tates and Canada.
3 P riv ate estim ate published by th e Econom ic Cooperation A dm inistration.
* 1938 d a ta for tra d e w ith th e D ollar A rea include only the U n ite d States.
‘ D a ta for 1938 n o t available.
N o te : F o r th e b alance on trad e and tra n sp o rta tio n , no sign indicates credit, m inus sign indicates debit.
S o u rces: In te rn a tio n a l M o n etary F u n d , International Financial Statistics and Balance of Payments Yearbooks; U n ite d S tates D e p artm e n t of C om m erce,

Balance of Payments of the United States, 1949-1951.




January 1953

M O N T H L Y REVIEW

ticipation through the activation of reserve ships, most of
which were returned to inactive status during 1952.
The situation in selected countries

An examination of the balance of payments data of the
important shipping countries shown in the accompanying
table indicates that their deficits on merchandise account
consist, in large part, of deficits with the dollar countries
(principally the United States and Canada). In several
cases these countries also had deficits on their over-all
transportation account during the postwar period. Not
only were trade deficits with the United States financed
by our foreign aid programs, but transportation deficits
were also similarly financed. These countries, in antici­
pation of a discontinuation of such aid, have strived not
only to bring their merchandise trade closer to a balance
but also to increase their earnings from the sale of ship­
ping services.
An excellent illustration of the importance of shipping
in the balance of payments is Norway. D uring the pre­
war period this country normally had a deficit in its m er­
chandise trade with the rest of the world, but this deficit
was completely covered by its net income from the sale
of shipping services. F or example, in the year 1938 its
trade deficit of 292 million kroner was more than cov­
ered by a net income from shipping services of 383 mil­
lion kroner.
W artim e losses reduced the Norwegian merchant fleet
from 4.5 million gross tons in 1939 to 2.7 million tons in
1945. As a result Norway no longer could cover her ex­
cess of imports by shipping income during the postwar
period. H er fleet, however, was rapidly rebuilt and be­
tween 1948 and 1951 her income from shipping services
almost tripled. By 1951 the total tonnage of her merchant
fleet exceeded that of 1939, and once again her net in­
come from shipping of 1.7 billion kroner was ample to
cover the trade deficit of 1.2 billion kroner.
Japan is another country for which shipping income
has been an important balance of payments item. In the
prew ar period Japan was able to cover her deficit in m er­
chandise trade by a large surplus on service account, con­
sisting of shipping, insurance, and other services. Follow­
ing the end of W orld W ar II, Japan was unable to par­
ticipate in shipping since her merchant fleet had been
virtually eliminated. But, as Japan recovered, shipbuild­
ing was resumed, and the Japanese have gradually re­
turned to the world’s seaways. In 1951 Japan superseded
the United States in second place behind the British in
tlhe volume of new construction. United States occupa­
tion authorities encouraged this trend as a step towards
relieving the United States of the burden of the enor­
mous aid program and replacing it by earnings from
trade, shipping and other services, and the construction
of merchant tonnage for other countries. Japan’s m er­
chant fleet, however, is still only about half of the prewar
tonnage.




15

Still another country which depends heavily on earn­
ings from shipping services to balance her deficit in goods
is the Netherlands, and the United Kingdom is in a
similar position. An over-all deficit on the United King­
dom trade account is partially counter-balanced by net
receipts from shipping (figures in the table include only
dry cargo trade). The United Kingdom has normally
had a deficit in trade with the United States, which for­
merly was paid for by dollar earnings of other sterling
area members. Since the war, however, net dollar earn­
ings of other sterling area members have declined. As a
result, earnings from services have assumed a greater
importance in helping to balance accounts with the dollar
area. The critical position of France’s balance of pay­
ments since the war is also illustrated in the table.
F rance’s over-all excess of imports over exports is ag­
gravated by a deficit on the transportation and merchan­
dise accounts in trade with the dollar area, including
large net payments to the United States for shipping
services.
The importance of shipping services to other countries
in the current international payments situation is exem­
plified by the above cases. As a part of the drive towards
the substitution of trade for aid, therefore, the role of
shipping and other services can be an important one.
To permit foreign carriers to carry an increasing part
of our foreign trade, however, may mean the sacrifice of
one of our most important national defense objectives—
a strong merchant marine. A large part of our merchant
marine at present can be considered marginal because of
falling freight rates and increasing numbers of foreign
carriers, which can be operated at lower costs than our
own. Many of our ships are finding it more and more
difficult to pay their way.
Because of the manner in which it came into existence,
our merchant marine is faced with another serious prob­
lem. The bulk of our present fleet was built during the
war, and at the present time the average age of our ships
is ten years. On the other hand, the most im portant part
of the merchant fleets of other countries has been built
since the war, and most of them are less than five years
old. By 1965 our present fleet will be over twenty years
old and past the normal replacement age. This so-called
“block obsolescence” means that, if the decision is made
to maintain a strong merchant marine, some program of
systematic replacement m ust be initiated. In the interim
it appears that our carriers must face a losing battle in
ship operating efficiency against newer foreign ships. The
same problem applies to our reserve fleet, which played
such an important role during the early part of the Ko­
rean emergency. If our defense authorities consider it es­
sential to maintain such a fleet to supplement our active
merchant fleet, a replacement program will be needed.
Correction: In the chart on page 107 of the December
1952 Monthly Review the unit of graduation on the ver­
tical scale is in millions of dollars.

16

FEDERAL RESERVE B A N K OF SA N FRANCISCO

January 1953

BUSINESS INDEXES—TWELFTH DISTRICT1
(1947-49 average — 100)
Y ear
and
m o n th

L um ber

1929
1931
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951

97
51
41
44
54
70
74
58
72
79
93
93
90
90
72
85
97
104
99
112
114

1951
N ovem ber
D ecem ber

109

1952
Jan u a ry
F eb ru ary
M arch
April
M ay
June
July
A ugust
Septem ber
O ctober
Novem ber

T o ta l
W a te r b o rn e
n o n a g ri- T o ta l
C a rD e p ’t
fo re ig n
c u l t u r a l m f'g lo a d in g s s to re
R e ta il
t r a d e 3»6
W h e a t E l e c tr ic e m p lo y ­ e m p lo y ­ ( n u m ­
s ale s
food
C o p p e r3 flo u r8
p ow er
m ent
b e r)2 (v a lu e ): p ric e s 3*1 E x p o r ts I m p o r ts
m e n t4

I n d u s tr ia l p ro d u c tio n (p h y s ic a l v o lu m e )2

93
107
108

110
94
117
108
106
109
116
105

P e tro le u m *
C ru d e R e fin e d C e m e n t
87
57
52
52
62
64
71
75
67
67
69
74
85
93
97
94

78
55
50
50
56
61
65
64
63
63

68

54
36
27
35
33
58
56
45
56
61
81
96
79
63
65
81
96
104

L ead 3
165

114
118

99
101

140
136

111
111

121
120

88
104
96
95
89
87

109
109
115
117
116

112

106
105
112
115
116

113
113
112
112
112
113
114
114
114
115
116

122

81
78
80

142
139
142
141
147
150
150
153
145
146
141

86

96
114
92
93
108
109
114
100
90
78
70
94
105
101
109
89

88

58
80
94
107
123
125
112
90
71
106
101
93
115
115

101
99
98
106

112
128

107
106

116
109

124
119

85

88

106
106
106
107
108
107
107
107
107
107
107

111
113
115
114
114
116
116
122
122
117
118

94
112
113
120
129
126
125
131
131
142
133

100

90

95

72
76

71
83
93
98
91
98
100
103
103
112

100

105
49
17
24
37
64

29
29
26
28
30
34
38
36
40
43
49
60
76
82
78
78
90
101
108
119
136

100

68

112

86

75
81
87
81
84
81
91
87
87

88

98
101

112

108
113
98

88
86

105
90

88

87
84
90
103
99
96
93

102

100

30
25
18
21
24
28
30
28
31
33
40
49
59
65
72
91
99
104
98
105
108

101

119r

110

114
117

182
192

144
130

86

106
108
103
106
118
114
110
116
114
118
128

116
114
114
116
115
115
114
114
114
113
114

183
208
210
185
207
187
144
153
142

146
138
157
143
143
182
187
293
253

68

96
95
99
102
99
103
110

47
54
60
51
55
63
83
121
164
158
122
104
100
102
98
105
119

100
101

52
60

66

77
81
72
77
82
95
102
99
105
100
101
106
100
94
97

100

124
125
126
125
126
127
129
128
130
130

101

100
106
98
108
96
101

108
98
102

64
50
42
45
48
48
50
48
47
47
52
63
69

132
135
131
170
164
163
132

124
80
72
78
109
116
119
87
95
101

70
80
96
103
100
100
113

89
129
86
85
91
186

57
81
98
121
137
157

190
138

110

68

BANKING AND CREDIT STATISTICS—TWELFTH DISTRICT
(am ounts in m illions o f dollars)
Y e ar
and
m o n th

C o n d itio n ite m s o f a ll m e m b e r b a n k s 7
L oans
U .S.
D em and
and
d e p o s its
G o v ’t
d i s c o u n t s s e c u r i t i e s a d ju s t e d 8

B ank
r a te s o n
T o ta l
s h o rt-te rm
tim e
b u s in e s s
loans*
d e p o sits

1929
1931
1933
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952

2,239
1,898
1,486
1,537
1,682
1,871
1,869
1,967
2,130
2,451
2,170
2,106
2,254
2,663
4,068
5,358
6,032
5,925
7,105
7,907
8,844

495
547
720
1,275
1,334
1,270
1,323
1,450
1,482
1,738
3,630
6,235
8,263
10,450
8,426
7,247
6,366
7,016
6,392
6.533
6,627

1,234
984
951
1,389
1,791
1,740
1,781
1,983
2,390
2,893
4,356
5,998
6,950
8,203
8,821
8,922
8,655
8,536
9,244
9,940
10,504

1,790
1,727
1,609
2,064
2,101
2,187
2,221
2,267
2,360
2,425
2,609
3,226
4,144
5,211
5,797
6,006
6,087
6,255
6,256
6,720
7,522

3.20
3.35
3.66
3.95

1951
December

7,907

6,533

9,940

6,720

3.82

1952
J an u a ry
F ebruary
M arch
April
M ay
June
Ju ly
A ugust
Septem ber
O ctober
N ovem ber
D ecem ber

7,806
7,760
7,787
7,850
7,921
8,062
8,114
8,270
8,444
8,605
8,805
8,844

6,543
6,413
6,378
6,313
6,238
6,258
6,507
6,469
6,473
6,765
6,808
6,627

9,951
9,420
9,426
9,408
9,306
9,501
9,643
9,679
9,908
10,125
10,281
10,504

6,806
6,900
6,915
6,924
6,985
7,083
7,143
7,197
7,249
7,336
7,331
7,522

M e m b e r b a n k re serv es a n d re la te d ite m s 10
R eserve
bank
c r e d i t 11

0
- 154
- 110
- 163
- 227
90
- 240
- 192
- 148
- 596
-1 ,9 8 0
-3 ,7 5 1
-3 ,5 3 4
-3 ,7 4 3
-1 ,6 0 7
- 510
+ 472
- 930
-1 ,1 4 1
—1,582
-1 ,9 1 2

23
154
150
219
454
4* 157
+ 276
+ 245
+ 420
+ 1,000
+2,826
+4,486
+ 4,483
+4,682
+1,329
+ 698
- 482
+ 378
+1,198
+1.983
+2,265

— 276

-

102

+

+ 84
+ 180

-

228
109
17
237
174
97
208
126
153
294
29
240

+
—
+
+
—

3.94
3.95
3.96
3.95

34
21
2
2
6
1
3
2
2
4
107
214
98
76
9
302
17
13
39
21
7

C o in a n d
C o m m e rc ia l T r e a s u ry
c u r r e n c y in
o p e r a tio n s 12 o p e r a tio n s 12 c ir c u la tio n 11

+
+
+
+
+
+
+
+
+
+
—

+

+
+
—

+
+
+
+

309
176
52
211
45
213
230
236
72
299

+
+
+
+
+

_

R eserves

B a n k d e b its
In d e x
31 c itie s 3» «
(1947-49=.
100)*

+
+

6
48
18
14
38
3
20
31
96
227
643
708
789
545
326
206
209
65
14
189
132

175
147
185
287
479
549
565
584
754
930
1,232
1,462
1,706
2,033
2,094
2,202
2,420
1,924
2,026
2,269
2,514

42
28
18
25
30
32
29
30
32
39
48
61
69
76
87
95
103
102
115
132
140

279

+

14

2,269

141

+ 194
- Ill
b 272
- 102
- 185
b 190
b 288
b 163
- 213
- 267
- 79
b 422

+
+
+
+
+
+
+
+
+

86
20
7
13
49
29
7
49
4
32
34
12

2,416
2,365
2,313
2,341
2,347
2,209
2,333
2,535
2,363
2,527
2,616
2,514

134
138
139
135
128
144
134
134
144
146
141
157

+
+
+
+
+
+
+
+
+
+
+
__
__
__

_

_

* A djusted tor seasonal variation, except where indicated. Except for d epartm ent store statistics, all indexes are based upon d a ta from outside sources as
1olio we: lum ber, various lum ber tra d e associations; petroleum , cem ent, copper, and lead, U.S. B ureau of M ines; w heat flour, U.S. B ureau of the Censuselectric power, Federal IjOwer Com m ission : nonapri finItil ral n.nrl mn.nnfiu*.fiirinir omnlnvmont T7£! TinraoTi nf ToKa»
J -------___ j._______•_'
retail food prices,
2 D aily average.
_
_
_____
____________ ___________ _ _____ _ ____ &
rm u tw i'u
u
comij\?eTd\ * Com m ercial cargo only, in physical volume, fo r L o s ' Angeles“ S a rF ra n c is c o rS a ^ Diego, Oregon“ a n T ’W ^ h in g to n “custom s
districts, startin g w ith Ju ly 1950, special category exports are excluded because of security reasons.
» A nnual figures are as of end of year, m onthly
figures as of last W ednesday m m onth or where applicable, as of call report date.
« D em and deposits, excluding interbank and U.S. G ov’t deposits, less
cash item s m process of collection. M onthly d a ta partly estim ated.
» A verage rates on loans m ade in five m ajor cities during the first 15 days of the m onth.
10 E n d of year and end oi m onth figures.
11 C hanges from end of previous m onth or year.
12 M inus sign indicates flow of funds o ut of the D istric t
m th e case of commercial operations, and excess of receipts over disbursem ents in th e case of T reasury operations.
« D ebits to to ta l deposit accounts
excluding in ter-b an k deposits.
r— revised.
^
’




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