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BUSINESS
Monthly Review o

FEDERAL




RESERVE

DITIONS
lustry, Trade and Finance

BANK

OF

ST.

LOUIS

A ft K A N 6 A 6 -O K I -A H O M A N E W S B U R E A U P H O T O

T H E E LEC TR ICAL M ACH IN ER Y IN D U STR Y
H E Twentieth Century has sometimes been
called the A ge of Electricity. The first four
decades witnessed grow ing utilization of elec­
tric power, but whatever claim those forty years
had to the title has been dwarfed by the record of
the war years. In turn if even part of the glow ing
predictions concerning development of electrical
devices and uses in the postwar period prove true,
the last half of this century should more than live
up to its name.

T

Economic Characteristics — The average prewar
electrical machinery establishment was fairly large,
relative to other manufacturing establishments, in
terms of invested capital, employment, and output.
Because of heavy capital requirements for plant,
equipment, research, and product development, the
industry naturally has tended toward large scale
operation. W ithin the industry itself the large con­
cerns dominate, and concentration is much more
marked than in most other lines of manufacture.

The electrical machinery industry has been de­
veloped largely since the turn of the century. It
consists of four major divisions, which include thir­
teen distinct manufacturing activities: Equipment
for industrial use (wiring devices and supplies, car­
bon products, electrical measuring instruments and
generating, distribution and industrial apparatus) ;
communications equipment with its related branches
of insulated wire and cable, and radios, radio tubes
and phonographs; consumer products such as appli­
ances, automotive electrical equipment, and electric
lam ps; and a miscellaneous group including bat­
teries, X-rays, therapeutic apparatus, and electronic
tubes.

Engineering is of pronounced importance to the
electrical machinery industry, both because it is rela­
tively young and because it produces highly techni­
cal equipment. Product diversification has been
marked as more and more uses for electric power
have been developed

In 1939, the last year for which census data is
available, the industry had about 2,000 establish­
ments employing 256,000 factory workers, who
turned out products valued at over $1.7 billion. Raw
material costs were some $700 million, so that value
added by manufacture Avas about $1 billion.
The most important division of the industry was
industrial equipment, which employed 37 per cent
of the wage earners and had the same relative share
of value added by manufacture. Alm ost as import­
ant was the communications segment with 35 per
cent of the wage earners. The consumer goods
segment had 19 per cent of the workers while the
miscellaneous group had the other 9 per cent.
Geographically about 90 per cent of the industry
wras concentrated in the northeastern part of the
nation, with seven states having about four-fifths of
the wage earners and value of production in 1939.
In that year the Census listed 65 establishments in
the Eighth Federal Reserve District. The St. Louis
industrial area with 43 of these establishments dom ­
inated the region. Other production centers in the
district were Evansville, Indiana, and Owensboro,
Kentucky. Although wartime facilities expansion
has added sizable plants at Tell City, Indiana, and
Bowling Green, Kentucky, St. Louis has become
even more dominant in the district since 1939.
rage 2




These basic characteristics have not been changed
appreciably by wartime developments. If anything,
engineering and product development have become
more important, capital requirements heavier, and
size of plant larger. A t the same time the large
plants apparently have grown relatively more than
the smaller ones, so that concentration of control
within the industry has become more pronounced.
The electrical machinery industry has been one
of the fastest grow ing industries in the United
States. In 1899 total output was valued at $95
million. By 1914 it was almost four times as large.
Under the impetus of W orld W ar I demand, dollar
value of output more than tripled between 1914 and
1919. After receding somewhat in the down-swing
of 1920-21, the strong growth trend was resumed in
the boom decade of the Twenties, and in 1929 total
value of output in the industry was $2.4 billion, 25
times more than in 1899. In contrast, total manu­
facturing output in the United States in 1929 (in
dollars) was six times as large as thirty years earlier.
Since the production of electrical equipment is
primarily a capital goods industry, it is subject to
severe cyclical swings. Prior to 1930 demand for
electrical goods was so strong and the industry was
entering so many new markets that the effect of
downward business cycle movements was obscured
by the sharply rising growth trend. By 1930, how ­
ever, the industry had becom e sufficiently mature
so that the disturbed economic conditions of the
Thirties produced sharp ups and downs. Total out­
put in the Thirties never approached the peak level
of 1929. W orld W ar II, however, like the previous
war, brought an unprecedented demand for electrical
goods, and each successive war year has established

a new record output.
Chart I illustrates both the rapid growth trend of
the industry and the typical sensitivity to cyclical
forces. The chart gives the relative value of pro­
duction and employment in the electrical machinery
industry to total manufacturing. The strong up­
ward movement of both output value and em ploy­
ment ratios indicates that the industry grew more
rapidly than all manufacturing during the first 40
years of the century. At the same time the pro­
nounced up-and down-swings in the Thirties demon­
strate that production of electrical machinery and
equipment shows greater cyclical fluctuations than
all manufacturing.
CH A R T I
RATIOS OF ELECTRICAL MACHINERY MANUFACTURING VALUE OF
PRODUCTION AND EMPLOYMENT TO ALL MANUFACTURING
By Census Years 1899 to 1939
Percent

SOURCE:

Percent

Bureau of the Census, Census of Manufacturers, 1939.

As the industry matured and benefited from largescale operation and rapidly changing and improving
technology, labor productivity rose sharply. In the
first fifteen years of the century employment rose
almost as rapidly as output, but in the succeeding
25 years output expanded much faster than em ploy­
ment.
In the Eighth District, grow th trend, cyclical
pattern, and seasonal movement have been very
similar to the national picture. District industry,
which as noted is mostly in St. Louis, is largely
concentrated in the industrial and communications
equipment fields, although there is some manufac­
ture of appliances. In St. Louis, during the 1930’s
electrical equipment manufacture gained in relative
importance within the local industrial structure, and
apparently expansion in this area was somewhat
greater than national growth. In 1933 the industry




ranked fifth in value of output, in 1937 fourth, and
in 1939 third. In the latter year it was second in
number of wage earners employed in the St, Louis
area.
Wartime Developments — The present war, even
more than W orld W ar I, has called for a tremen­
dous expansion in production of electrical goods of
all kinds. T o obtain this production it was neces­
sary to convert existing plant and to build consider­
able new plant. So far in the war period some $800
million has been spent on new facilities, about twothirds going for equipment and one-third for struc­
ture. In terms of dollars this means an annual
average expenditure for new plant during the war
years about four times as large as in 1939. New
facility awards in the Eighth District have totaled
$27 million, virtually all of this at St. Louis.
Actual output of electrical machinery has risen
abruptly since 1940. In 1944 production was about
250 per cent larger than in 1940, in contrast to a
rise of about 90 per cent for all industry. New
orders increased faster than production so that the
backlog of unfilled orders rose sharply.
In the main the production record of the industry
shows three different patterns. First, the major
portion of the industry, industrial and communica­
tions equipment, has for the most part continued
to turn out products closely allied to peacetime
items but used for war purposes. This segment of
the industry had little physical conversion. Second,
some of the relatively minor components of the in­
dustry in prewar years, such as electronics and radar,
expanded output phenomenally and out of all pro­
portion to prewar production. A stream of new and
improved products flowed from these plants to mili­
tary uses. Third, most of the consumer goods pro­
ducers had to retool and convert to war production.
For the most part they produced war goods not
very similar to their peacetime products — ammuni­
tion, aircraft parts, containers, etc.
Between 6 and 7 per cent of total munitions ex­
penditures in this country has gone for communica­
tions and electronic equipment alone, with about
$10 billion being spent for such items through 1944.
The Department of Commerce estimates that ship­
ments of all electrical machinery (first quarter per­
formance expressed as annual rates) increased from
$3 billion in 1941 to more than $8 billion in 1944
and 1945. Most of this has gone into direct war
uses, and non-war production of all types has been
30 to 50 per cent less than 1941. Production of items
for ultimate consumers, of course, has been virtually
nonexistent since early 1942.
Page 3

Chart II shows the course of production of certain
major divisions of the industry during the late 1.930’s
and the wartime years.
M ost striking are the
records of industrial equipment, which increased
output tremendously, and appliances, which fell off
substantially. Data for electronic and communica­
tions equipment is not shown, since it is generally
withheld for security reasons. Could it be charted
the upward movement since 1940 would be even
more pronounced than that for industrial equipment.
C H A R T II
M AJOR DIVISIONS ELECTRICAL MANUFACTURING INDUSTRY

Percent

N. E. M. A. Indexes of Manufacturers’
Sales, 1925 = 100

Percent

tools, radio and radar parts, and electrical machine
parts. Most of these subcontracts went to St. Louis,
Owensboro, and Louisville plants, but a fair amount
was placed in establishments in smaller district
cities.
Employment in the electrical machinery industry
in the United States almost tripled from 1939 to
1944.
In St. Louis the percentage increase was
somewhat larger than the national gain. As a result
St. Louis electrical equipment manufacturers em­
ployed 8.7 per cent of all local factory workers in
September, 1943, in contrast to 6 per cent in April,
1940.
W artime employment has been characterized by
a work week increasing from the prewar forty hours
to as much as fifty hours. Average weekly earnings
(take-home pay) rose from $30.72 in 1940 to $47.77
in 1944, or 56 per cent. Average hourly earnings
rose 36 per cent during the same period. Since pre­
war earnings were already high relative to other
manufacturing, under stabilization adjustments they
have failed to register the same wartime gains as
earnings ,in other durable goods lines, and the
spread between earnings in the industry and all
manufacturing has narrowed appreciably.
Labor productivity has increased greatly during
the war years, output per man-hour rising about onethird from 1939 to 1945 as a result of better produc­
tion methods, specialized machinery, and the better
application of manpower.

SOURCE: Electrical W orld

Am ong the many developments which character­
ized wartime production, perhaps two are most sig­
nificant. One is the rapid advance in technology
and the numerous new products that have been de­
veloped ; the other is the drive for standardization
of both old and new products to increase efficiency
and conserve materials and manpower. For ex­
ample, most large turbines were custom built prior
to the w a r ; today many types are standardized and
as a result are produced by mass production tech­
nique.
The Eighth District shared fully in the wartime
development of the industry. Prime war supply
contracts let in the district for electric products of
all kinds totaled somewhat more than $610 million
through December, 1944. Of this sum St. Louis
manufacturers received about $570 million and
Evansville producers more than $25 million. In ad­
dition the area received a substantial volume of sub­
contracts from outside the district for electrical




P o stw a r O u tlo o k — The basic factors underlying
the level of demand for the products of the electrical
machinery industry are (1) the level of national in­
come, (2) the cost of production of electrical ma­
chinery and its efficiency of operation as contrasted
to competing devices, (3) the availability of electric
power, and (4) the cost of electric power. These
factors operate in greater or less degree upon de­
mand for the products of the different segments of
the industry.

On the basis of these factors postwar demand for
electrical machinery and equipment should be much
larger than prewar demand. The national income,
even if it contracts from wrartime peak levels, is ex­
pected to be substantially higher than in prewar
years. Reinforcing the influence of this factor on
demand is the heavy backlog of wartime savings,
both individual and corporate. Surveys indicate that
a substantial volume of industrial postwar expendi­
tures (perhaps 40 to 50 per cent) is earmarked for
electrical machinery and equipment. Similar con­
sumer surveys show high demand, much of it de­
ferred during wartime, for appliances of all kinds.

W ith the sharp increase in labor productivity and
the development of new products, cost of produc­
tion and efficiency of operation of electrical products
should stimulate sales. Some of the wartime gains
in productivity on certain items have been phenom­
enal, and even with higher wage rates unit costs
on these items should be considerably lower in post­
war years.
Availability and cost of power should also operate
to increase demand. The capacity to produce electric
power has expanded substantially during the past
four years, and programs announced by public util­
ities and the Rural Electrification Administration
look toward further postwar expansion of produc­
tion as well as distribution facilities. The utilities
alone expect to spend from $500 million to $800
million annually for new construction in the post­
war decade. River valley developments, if properly
carried out, should also produce considerable sources
of power that will expand the market for electrical
equipment.
It should be noted that these programs influence
demand on two sides and thus tend to produce a
reinforcing spiral effect. First, the programs them­
selves demand electrical equipment, and since they
produce more power and make it more widely avail­
able, they increase the market for goods to utilize
the power.
Despite this generally favorable market outlook
some components of the industry, notably those
most swollen by war demand, may have a postwar
capacity that is greater than the postwar market
can utilize. In such lines there may result a com ­
petitive struggle for markets reminiscent of the
earlier history of the automobile industry.
In this respect district industry apparently is in
a fortunate position. Expansion here has occurred
mostly in lines in which capacity is not likely to
greatly exceed output at a reasonably high level of
demand. The wrar has strengthened the relative
position of many district manufacturers and they
should be in good shape to face the postwar years.
In view of the above market picture postwar em­
ployment in the industry, while probably not to be
maintained at wartime peaks, is expected to be con­
siderably higher than in prewar years. W hile ad­
justments may occur in certain segments and cer­
tain companies, St. Louis electrical manufacturers
as a whole expect to em ploy about 19,000 workers
in the postwar period compared with 10,000 in 1940.
The industry here has a minimum of reconversion
difficulties and has a substantial backlog of civilian
orders on hand. Favorable factors making for rela­




tively high employment levels are the large demand
for electrical products expected in the postwar period
and the return to a forty-hour week. Offsetting
developments which will affect labor income ad­
versely are the probable loss of overtime work and
of shift bonuses.
An appraisal of the probable postwar position of
the electrical machinery industry would be incom ­
plete without analysis of the industry’s financial
strength. During the war period the industry, in
common with all others which expanded tremen­
dously, has been under heavy financial strain. In­
ventories have lengthened, accounts receivable have
increased, and miscellaneous current liabilities,
mostly tax liabilities, have risen very sharply. T o
meet this financial strain the industry utilized funds
from several sources. First, it received heavy ad­
vance payments for its products from the Govern­
ment, utilizing this source much more than did the
average manufacturing line. At the same time some
two-thirds of total expenditures for new plant and
equipment was paid for with Government funds.
Secondly, it utilized internal reserves, and thirdly,
it borrowed heavily from the banking system either
in the form of straight industrial loans or in V loans
guaranteed by the Government. As a borrower the
industry was much more active than most other
lines during the war period.
Profits have increased somewhat during the war
years, but the increase in profits has failed to match
the rise in sales because of very heavy taxes, con­
tract renegotiations, etc. Altogether 1944 profits
for the electrical machinery industry (National City
Bank figures) were 9 per cent larger than in 1940.
On the basis of return on net worth the industry
has averaged about 12 per cent in each of the war
years. The industry generally has followed a con­
servative dividend policy, and has set aside large
sums for postwar reserves of various kinds.
A recent survey conducted by the St. Louis Com ­
mittee for Econom ic Development indicated that
most electrical machinery manufacturers feel that
they are in strong enough financial position to make
the transition from war to peacetime production
without any appreciable outside financial help. This
belief, however, was based upon expectation of
prompt settlement of terminated war contracts.
W ithout such prompt settlement, with inventories
and receivables considerably expanded and with
heavy current liabilities, it is not likely that even
the relatively large cash balances and substantial
holdings of Government securities wrould suffice to
meet payments for any appreciable length of time.
Page 5

SU R V E Y OF CURRENT COND ITIONS
IT H victory in Europe, our military power
and productive capacity can now be turned
to the task of defeating Japan. Since the
volume of munitions production necessary to attain
this end will be substantially less than was needed
to wage war in both Europe and the Pacific, the
transition period between V -E and V-J days will
see partial reconversion to peacetime activity. In­
dustry will be most affected by this reconversion,
but there will be repercussions upon agriculture,
trade, and finance.

W

IN D U S T R Y

A ny satisfactory appraisal of industrial prospects
must await more definite information about the
needs of the Pacific war, which will determine the
volume of materials, plant, and manpower that can
be allowed industry to reconvert to peacetime pro­
duction. It is too early also to form a judgm ent as
to the effect of partial reconversion upon a particu­
lar region of the country. In this district, however,
indications are that manufacturers will have rela­
tively little difficulty in reconverting their plant and
equipment once materials are released for peace­
time products.
A recent study released by the W ar Production
Board indicates that many manufacturing activities
important to this district are not in the category
which will encounter serious difficulties in re-estab­
lishing peacetime production. This report covered
72 industries, of which about 20 are among the major
ones in this district. One-third of these district in­
dustries can resume immediately a reasonable level
of peacetime output when authority is issued. M ost
of the others will need less than three months for
partial reconversion.
The study also indicates that expenditures on new
equipment, tools, and new construction necessary to
resume a reasonable level of peacetime production
should be small, except in automotive, refrigerator,
stove, and electric appliance industries. This means
that while a number of companies will probably find
it desirable to construct new buildings and to install
new equipment, resumption of peacetime output
will not have to wait upon this. T o reach capacity
peacetime production will take more time, more
construction, and more new equipment, and it is
doubtful that sufficient materials and manpower
will be available to permit this in the period re­
quired to end the Japanese war.
It is expected that cutbacks in war contracts will
be fairly rapid now that the war in Europe is over.




Cutbacks affect industry in two ways. On the one
hand, some cancellations either curtail or stop cur­
rent production in particular plants, while on the
other hand, some cutbacks merely reduce the back­
log of war orders without materially affecting cur­
rent production schedules.
The first type of cutback is more spectacular and
consequently receives more publicity. In this dis­
trict several large war plants have either closed
down completely or are scheduled for closing in the
relatively near future. A number of other plants
have reduced employment and shortened hours. The
major district industrial centers of St. Louis, Louis­
ville, and Evansville have been most affected by
these developments. Reductions in the backlog of
war orders have been fairly general, although the
total still remains high.
Munitions Output — Until very recently, almost
until V -E Day itself, war production in this district
was expanding. Some large new facilities had just
begun to reach high production levels. Except for
a few critical lines, this upward movement should
be reversed in the next few months. Indicative of
the rise in war output in the region during the first
part of this year, employment in the district's larger
war plants in March and April was above the level
prevailing at the close of 1944 but still considerably
below the wartime peak reached in the fall of 1943.
W ith a number of layoffs scheduled for com ing
months it is expected that employment at these
same plants by June and July of this year will be
well below the March level.
Other Manufacturing — Total industrial output in
the district so far this year has been greater than
in the comparable period of 1944, largely reflecting
the course of munitions production. During March,
April, and early May, the non-munitions lines were
fairly stable. A m ong the more important industries
production of steel, shoes, chemicals, and alcohol is
holding up well. Electrical machinery and meat
packing activity is declining while output of lumber
holds steady at well below peak levels.
Indicative of the expansion of munitions output
in the district during the first part of this year,
consumption of industrial electric power in major
cities in the first four months of 1945 was 12 per
cent above the comparable period in 1944, and 5 per
cent above that for the last four months of 1944. In
April industrial power consumed was 22 per cent
greater than in April, 1944 and on a daily average
basis was 6 per cent more than in March, 1945.

Steel mill furnaces for the past several months
have operated at about 79 per cent of capacity. D e­
spite some cancellations, orders on most items are
backlogged far into the future, and mills are ex­
pected to continue for some time to operate at close
to present levels. Materials for steel making, scrap
steel, pig iron, limestone, and fuels, are flowing into
mill and foundry inventories in sufficient amount to
insure maintenance of the current operating rate.
In Kentucky, 51 distilleries were in operation on
April 30, only one less than a month and a year
earlier. A ll distilleries continue to produce indus­
trial alcohol for the war effort. W P B has just an­
nounced another holiday month for whiskey produc­
tion in July, in view of the quantity of alcohol be­
ing distilled and the reduced requirements of the
war program. The July holiday will be the third
since October, 1942 when distilleries ceased whiskey
production and began to turn out high wines and
industrial alcohol. The whiskey made in the holi­
day period will not be available for immediate
consumption, and the neutral spirits distilled can
be used only for blending.
Oil and Mining— During April activity in district
oil fields picked up somewhat from the low point
of March, but failed to reach the level of a year
earlier. Daily average crude oil production at dis­
trict wells in April was about 2 per cent greater
than in March, but about 4 per cent below April,
1944. April output was below most months in 1944.
New drilling activity in this district also continues
to lag in comparison with 1944. Through M ay 5
total com pletions in all district fields numbered 730
as against 902 in the comparable period in 1944.
Drilling activity in Illinois this year is about equal
to 1944, but in Kentucky there have been only half,
and in Indiana and Arkansas only two-thirds as
many completions, as in a like period last year.
Production of coal at district mines in April was
less than in March, 1945 and April, 1944. This was
partly due to the fewer number of working days in
April. Bauxite mining activity in Arkansas con­
tinues at a level well below the peak reached earlier
in the war years, and from present indications there
is no probability that the current rate of activity
will expand appreciably in the immediate future.
Other non-ferrous mining in the district is rela­
tively stable.
Construction — Dollar value of building permits
in the m ajor cities of the district in April was up 7
per cent from March, and at about the same level
as a year ago. Construction contract awards in the
district in April (F. W . D odge figures which cover




all types of construction) totaled $19 million in April
as compared with $8 million a year earlier.
Maintenance and repair of residential buildings
may be expected to expand in the next few months.
The volume of new home construction will depend
largely upon the release of necessary building ma­
terials. In view of the findings of the W P B survey
of industrial reconversion needs, there may not be
a great volume of industrial construction during the
transition period. Probably most construction ex­
penditures made by industry in the next few months
will be for necessary maintenance and repairs. Sur­
veys conducted by C. E. D. organizations and others
indicate that private industry anticipates a consid­
erable volume of construction when materials be­
come readily available, and a considerable portion
of this prospective construction is already in the
blueprint stage.
A G R IC U L T U R E

General Conditions — Cold, wet weather has pre­
vailed over most of the district during the last
month. It has been too wet, except for a very few 1
days in localized areas, for extensive soil prepara­
tion for field crops such as cotton and corn. The
result is that spring plantings are materially behind
schedule and alternate crops may be used on land
which under more favorable conditions would have
been planted to corn and cotton. Considerable flood­
ing of lowlands has continued throughout much of
the last month, and many acres of productive bottom
land may be idle in 1945.
W eather conditions have tended to retard progress
of some fall seeded grains, but their condition has
generally remained good, although there are reports
from some areas of yellow ing and fly damage. P rog­
ress of tobacco beds is only fair and many are weedy.
The condition of livestock over the district is
good. Pastures are the best they have been at this
season for many years. Forage crops are unusually
abundant. Some early cuttings of hay, however, in
the southeastern section of the district were dam­
aged or lost com pletely because weather was not
suitable for curing.
Outlook — The defeat of Germany should tend to
strengthen rather than weaken non-civilian and
foreign demand for agricultural products. There
will be little immediate change in the food require­
ments of our armed services and demand of newly
liberated countries will be added to foreign demand
already in existence.
Even with some cutback in war production, in­
dustrial activity should continue at a high level,
which will provide sufficient consumer income to
Page 7

maintain demand for farm products. Total civilian
food supplies in 1945 will be below last year and
about on a level with the 1935-39 average.
Fats and oils are in short supply and probably
will continue so throughout the year. Total meat
output in 1945 promises to be approximately 9 per
cent less than 1944, but will be 39 per cent above
the prewar average. The civilian meat supply this
year is smaller than last year but about equal to the
1935-39 average. Production of dairy products con­
tinues upward but the civilian supply will be smaller
this year than last, although about the same as the
1943 supply.
Present feed grain supplies are 19 per cent greater
than a year ago and about equal to those of the
1935-39 period when stocks were relatively high.
V ery favorable pasture conditions tend to further
A G R IC U L T U R E
CASH FA RM
_______March______
1945
1944

(In thousands
of dollars)

IN C O M E
Cumulative for 3 months
1945
1944
1943

Arkansas................ $ 16,513$ 14,269 $
Illinois....................
89,233
103,194
Indiana..................
48,339
53,623
22,239
18,265
Kentucky..............
Mississippi............
20,185
12,027
Missouri................
43,810
48,712
Tennessee..............
16,105
19,866
269,956
Totals................ 256,424

62.880.$ 50,733 $ 52,239
264,819
300,143
253,711
140,589159,007
136,373
178,734
131,085
100,230
68,342
44,607
40,409
143,783
154,035
125,775
84,373
81,292
65,313
943,520
920,902
774,050

R E C E IPTS AN D S H IP M E N T S A T N A T IO N A L STOCK Y ARDS
Receipts
Shipments
Apr.,
Mar., Apr.,
Apr.,
Mar.,
Apr.,
1945
1945 1944
1945
1945
1944
Cattle and Calves. .
115,475 113,268 90,259
69,025 57,381 40.,739
Hogs,
.
. 149,411 166,674 311,514
48,767 60,160 63,331
Horses and Mules. .
..
3,806
3,523
2,906
3,828
3,523 2,956
Sheep......................
33,107 22,305 27,067
11,395
2,424 13,144
Totals.......................... 301,799 310,770 431,746 133,015 123,488 120,170

P R IC E S
W H O L E S A L E P R ICE S IN T H E U N ITED STATES
Bureau of Labor
Statistics
Apr.,
Mar.,
Apr.,
Apr.,’45 comp, with
(1926=100)
1945
1945
1944
Mar.,’45
Apr.,’44
All Commodities. .
Farm Products. .
F oods................
Other..................
Bureau of Labor
Statistics
(1935-39=100)

105.7
129.0
105.8
99.3

Apr. 15,
1945

United States........
127.1
St. Louis............
125.2
Memphis............ ........ *
*Not available.
Bureau of Labor
Statistics
(1935-39=100)

105.3
127.2
104.6
99.2

103.9 + 0 .4 %
+
123.2
+ 1.4
10,4.9
+ 1.1
98.4
+ 0.1

1.7%
+ 4.7
+ 0.9
+ 0.9

COST OF L IV IN G
Mar. 15, Sept. 15,Apr. 15,’45 comp, with
1945
1942
Mar. 15,’45 Sept. 15/42
126.8
124.9
129.8

117.8
116.6
119.3

+ 0.2%
+ 0.2

+
+

7.9%
7.4

COST OF FO O D
Apr. 15, Mar. 15, Sept. 15,Apr. 15/45 comp, with
1945
1945
1942
Mar. 15/45 Sept. 15/42

U. S. (51 c itie s )... 136.6
St. Louis............ ..... 139.0
Little R ock........ .....137.6
Louisville.......... ......130.6
Memphis............ .....145.2

Page 8




135.9
138.1
136.1
130.2
144.4

126.6
126.7
129.2
124.2
129.7

+
+
+
+
+

0.5%
0.7
1.1
0.3
0.6

+ 7 .9 %
+ 9.7
+ 6.5
+ 5.2
+12.0

enhance the feed supply situation. At the same time,
total livestock numbers are considerably higher than
in the prewar period, so that supplies per animal
unit are less at the present time than before the war.
Consumption of fibers will probably increase dur­
ing 1945, primarily because of demand in the newly
liberated nations, but this increased consumption
probably will not be sufficient to affect materially
the record carry-over stocks of fiber crops through­
out the world.
Unfavorable weather over the Eighth District,
which has continued to date, is the strongest factor
in the immediate outlook for district farming. Con­
tinued wet and cold weather will materially reduce
prospective plantings of major crops in the district.
W hile alternate crops may be used to absorb part of
the shock, material reductions in plantings of cotton,
corn, tobacco, and rice, along with continued high
operating costs could spell decline of profit in 1945
for crop farmers. The general farmer and the live­
stock farmer may offset partially such a develop­
ment through heavier than normal marketings of
livestock, particularly cattle. This would have the
effect of marketing surplus inventories at good
prices and forcing an adjustment of inventories to
numbers that might more nearly fit the postwar
pattern of production.
The New Meat Subsidy Program — Despite the
near record numbers of livestock on farms, civilian
meat supplies are tighter than at any time since the
war began. Recently a number of steps have been
taken that are designed to increase marketings of
livestock of desired weights and quality, and to
reduce the diversion of supplies into black market
channels. The principal measures which were an­
nounced May 18 by the Director of W ar M obiliza­
tion are summarized below :
1. Producers are
downward revision
in the maximum of
cattle, except bulls,
vance notice.

promised that there will be no
in “ overriding ceiling prices” or
the stabilization ranges for beef
without at least six months ad­

2. A subsidy of fifty cents per hundredweight will
be paid to producers of A A and A grade cattle
marketed for slaughter (sold for $14.25 or more per
hundredweight, Chicago basis) weighing eight hun­
dred pounds or more.
3. The Defense Supplies Corporation will increase
subsidies to packers. On pork the subsidy will go
up forty cents per live hundredweight, retroactive
to April 1. On all grades of cattle it will be in­
creased twenty-five cents per live hundredweight,
effective June 4, 1945.

4. The W F A set-aside orders for Government
purchases of meat will be adjusted so that Govern­
ment requirements will be drawn from those Feder­
ally-inspected plants slaughtering more than their
normal proportion of total slaughter.
5. In a move to combat black market operations,
O P A and W F A will “ develop a plan by June 15 to
show movement of all livestock through public
stockyards and public sales yards so that informa­
tion as to the destination of all such livestock will
be available” .
In addition the W F A announced that the floor
price of $13.00 per hundredweight on live hogs
would be extended to September 1, 1946 and would
apply to all good and choice butcher hogs regard­
less of weight.
The steps taken should prove of greater benefit
to the packing industry than to either producers or
consumers.
So long as demand is sufficient to
maintain current wholesale meat prices, the higher
subsidies in processing livestock will mean increased
margins to packers. W hile the livestock ceiling
price freeze prohibits downward adjustment, the
farmers’ primary concern is with floors rather than
ceiling prices. The broader application of the floor
on hog prices should result in heavier feeding and
thus eventually increase supplies of pork and lard.
In cattle the situation of producers is less secure.
Since there is no floor in cattle prices, it is possible
that prices could drop sharply under pressure of
heavy marketings in case of drouth or other unfore­
seen developments.
W hile some elements in the situation are quite
different, the farmer has not forgotten his experi­
ence with hogs during the 1943-44 marketing season.
The heavy hog runs of that period as feed supplies
dwindled pushed market prices down to the floor for
a considerable period of time. Many farmers were
left with only small profits on the large hog crop
they had produced.
The fifty-cent subsidy on better grades of feeder
cattle along with the ceiling price freeze may never­
theless afford some encouragement to the cattle
feeder. It may stimulate feeders to complete a longer
feeding period and market cattle of heavier weights
and better quality. It appears to offer little incen­
tive to liquidate surplus breeding stock. Except for
fed heifers and fat barren cows, very little of the
female marketings are likely to be graded as high
as A A or A and thus be eligible for subsidy payment.
It would appear that the program could have
been more beneficial to consumers and producers
had it contained some provisions to encourage or­




derly marketing of surplus breeding stock. Heavier
marketings would improve the immediate situation
for consumers and help farmers to make a down­
ward adjustment in cattle inventories at profitable
prices. This would tend to place producers in a
much more favorable position when the demand for
meat products shrinks to a peacetime level.
It is difficult to appraise the possible effectiveness
of the anti-black market provisions until more de­
tails of the program are available. W hile black
markets in meats have apparently flourished in some
areas, it is doubtful that the present meat situation
would be materially improved if all meat now being
IN D U S T R Y
C O A L P R O D U C T IO N
(In thousands
of tons)

Apr.,’45

Mar.,’45

Apr.,’44

5,710
1,747
5,037
Other dist. states. . 1,232
. , 13,726

6,765
2,411
5,873
1,681
16,730

6,223
2,151
5,466
1,675
15,515

(K .W .H .
in thous.)

Apr.,’45 comp, with
Mar.,’45
A pr.,’44
—
—
—
—
—

16%
28
14
27
18

— 8%
■
—19
— 8
— 26
— 12

C O N SU M P T IO N OF E L E C T R IC IT Y
No. of Apr.,
Mar.,
Apr.,
April. 1945
Custom- 1945
1945
1944
compared with
ers* K.W .H . K .W .H .
K .W .H . Mar., 1945 Apr., 1944

Evansville
Little R ock. . .

40
10,249
35
3,105
82
17,495
31
6,650
Pine Bluff. . . .
19
7,418
141
103,717
. 348
148,634
^Selected industrial customers.

10,400
7,557f
3,193
2,534t
15,949
16,114
6,959
6,398
6,848
6,681
101,585
82,837
144,934
122,1411
f Revised.

— 1%
— 3
+ 10
— 4
+ 8
+ 2
+ 3

+ 36%
+ 23
+
9
+
4
+ 11
+ 25
+ 22

LOADS IN T E R C H A N G E D F O R 25 R A IL R O A D S
A T ST. L O U IS
First nine days
Apr.,’45 Mar.,’45 Apr.,’44
May,’45
May,’44
4 mos.’45 4 mos.’44
164,110
173,649 162,716
51,355
41,892
640,989
640,172t
Source: Terminal Railroad Association of St. Louis.
tRevised.

D E B IT S T O
(In thousands
of dollars)

IN D IV ID U A L A C C O U N TS

April,
1945

March,
1945

El Dorado, Ark......... $ 9,250 $ 10,813
Fort Smith, Ark........
20,375
22,870
Helena, A rk ..............
3,749
4,323
Little Rock, Ark........
86,294
91,774
Pine Bluff, Ark..........
14,815
18,246
Texarkana, Ark.-Tex.
10,950
12,757
Alton, 111.....................
13,988
15,982
E.St.L.-Nat.S. Y.,111..
67,568
73,915
Quincy, 111.................
17,306
18,173
Evansville, Ind..........
93,346
104,519
Louisville, K y............
338,104
366,859
Owensboro, K y .........
16,962
18,955
Paducah, K y..............
8,022
9,111
Greenville, Miss.........
8,343
9,758
Cape Girardeau, M o..
5,245
5,495
Hannibal, M o.............
5,382
4,826
Jefferson City, M o.. . .
30,743
22,580
St. Louis, M o............. 1,028,190, '1,109,873
Sedalia, M o................
6,151
7,357
29,495
33,065
Springfield, M o.........
8,792
9,368
Jackson, Tenn............
251,472
264,003
Memphis, Tenn.........
2,073,986

2,235,178

April,
1944
$

9,147
20,263
3,585
67,591
14,887
8,665
12,768
74,406
16,740.
107,344
313,039
13,617
8,195
7,576
4,684
4,291
28,513
952,486
5,782
27,795
8,592

220,610
1,930,576

Apr.,’45 comp, with
Mar.,’45 Apr.,’44
■ 14%
—
— 11
■ 13
—
— 6
— 19
— 14
— 12
— 9
— 5
— 11
— 8
— 11
— 12
— 15
— 5
— 10
+ 36
— 7
— 16
— 11
— 6
— 5

+ 1%
+ 1
+ 5
+28
-0+ 26
+ 10
— 9
+ 3
— 13
+ 8
+25
— 2
+ 10
+ 12
+ 12
+ 8
+ 8
+ 6
+ 6
+ 2
+ 14

— 7

+

7

Page 9

R E T A IL T R A D E
D E P A R T M E N T STORES
Net Sales
Apr., 1945
4 mos.’45
compared with
to same
Mar.,’45 A pr.,’44 period ’44

Stocks
on Hand
Apr. 30.,’45
comp . with
Apr. 30,’ 44

Stock
Turnover
Jan. 1 to
Apr. 30,
1945 1944

. — 25%
— 6%
+ 14%
1.43 1.38
+ 16%
+ 19
— 24
9
+ 3
1.90 1.61
+
— 8
+ 14
. — 29
. — 23
— 4
+ 7
—" 6
. — 14
+ 17
2.25 1.77
+ 5
. — 26
+ 17
1.72 1.48
+ 5
+ 10
. — 15
+ 13
+24
+ 15
1
. — 25
1.91 1.66
+ 3
+
2
. — 21
+ 15
1.71 1.39
+
+ 1
8th F.R. Disl . — 24
+ 16
7
1.81 1.55
+ 4
+
*E1 Dorado, Fayetteville, Pine Bluff, A rk .; Alton, East St. Louis,
Harrisburg, Mt. Vernon, 111.; Vincennes, Ind. ; Danville, Hopkinsville,
Mayfield, Paducah, K y ,; Chillicothe, Mo. ; Jackson, Tenn.
Trading days: April, 1945— 25; March, 1945— 27; April, 1944— 25.
Outstanding orders of reporting stores at the end of April, 1945, were
60 per cent greater than on the corresponding date a year ago.
Percentage of accounts and notes receivable outstanding April 1, 1945,
collected during April, by cities:
Instalment Excl. Instal.
Instalment Excl. Instal.
Accounts
Accounts
Accounts
Accounts
Quincy,

Fort S m ith ...
Little Rock . . 30
Louisville. . . 37
Memphis
. . 42

62%
61
60
60

O u in cy ........
St. Louis. . . .
Other cities. .
8th F.R. Dist.

75%
74
61

34%
36
32

36

IN D E X E S OF D E P A R T M E N T STORE SALES AND STOCKS
8th Federal Reserve District
Apr., Mar., Feb., Apr.,
1944
1945
1945
1945
Sales (daily average), Unadjusted3 . . .
Stocks, Unadjusted2............ ..
Stocks, Seasonally adjusted2 . . . .
iDaily average 1935-39=100.
2Monthly average 1923-25 = 100.

192
.188
109
106

233
235
100
98

187
236
96
101

183
173
103
100

S P E C IA L T Y STORES
Net Sales
Apr., 1945
compared with
Mar.,’45 A pr.,’44

4 mos.’45
to same
period ’ 44

Stocks
on Hand
Apr. 30.,’45
comp, with
Apr. 30,’44

Stock
Turnover
Jan. 1 to
Apr. 30,
1945 1944

1.31
.97
+ 14%
Men’s Furnishings — 45%
-24%
— 14%
2.59
—
2
Boots and Shoes
— 32
-15
+ 13
3.11
Percentage of accounts and notes receivable outstanding April 1, 1945,
collected during A p ril:
Men’s Furnishings.................. 59%
Boots and Shoes...........................54%
Trading days: April, 1945— 25; March, 1945— 27 ; April, 1944— 25.
R E T A IL F U R N IT U R E STORES
Net Sales
Inventories

’Ratio
of
Apr. 30, 1945
Apr., 1945
Collections
compared with
compared with
Mar.,’45 Apr.,’44 Mar.31,’45 Apr.30,’44 Apr.,’45 Apr.,’ 44
39%
35%
+ 2%
St. Louis A r e a l. + 1% + 20%
— 5%
34
38
St. Louis........
+ 20
— 5
+ 2
+ 1
25
25
Louisville Area2. + 17
+ 19
+ 4
+ 2
24
25
Louisville......... + 1 8
+ 14
+ 7
+ 5
23
24
Memphis............
+ 12
— 1
— 13
+ 2
29
32
Little R ock........ — 12
— 1
— 3
+ *3
*
Springfield........
49
39
- 0 + 10
*
*
— 25
37
Pine Bluff.......... — 16
31
*
*
*
*
Fort Smith........
— 7
+ 3
8th Dist. Totals3
- 0 + 10
32
— 3
34
+ 4
*Not shown separately due to insufficient coverage, but included in
Eighth District totals.
ilncludes St. Louis, M issouri; East St. Louis and Alton, Illinois,
2Includes Louisville, Kentucky ; and New Albany, Indiana.
3In addition to above cities, includes stores in Blytheville, Arkansas;
Evansville, Indiana; Henderson, Hopkinsville, Owensboro, Kentucky;
Columbus, Greenville, Greenwood, Starkville, Mississippi; Cape Girar­
deau, Hannibal, Missouri; and Dyersburg, Tennessee.
P E R C E N TA G E D IS T R IB U T IO N OF FU R N IT U R E SALES
Apr.,’45
Mar.,’45
Apr.,’44
Cash Sales...........................................7 7 ” 22%
Credit Sales............................................. 78
Total Sales........................................... 100

Page 10




23%
77
100

20%
80
100.

sold through black market channels were directed
to legitimate markets. There is 110 question but that
available civilian supplies of meat are being un­
equally distributed to consumers. H owever, much
of this is probably due to diversion to favored
classes of purchasers such as the hotel and restaurant
trade, and there is evidence that supplies are rela­
tively higher in small towns and rural areas than
in the large metropolitan centers. It is difficult to
correct diversions of this type without major changes
in the entire meat control program.
R E T A IL T R A D E

V ictory in Europe had little immediate effect
upon retail sales in this region, which have been
running well above the level of a year ago. The
promise of larger supplies of civilian goods should
result in a sales volume for the remainder of the
year well above the comparable 1944 level. Higher
sales will be realized especially if durable goods
begin to appear 011 the market in increased volume.
The rise in retail sales over a year ago largely re­
flects price increases and the purchase of higher
priced articles, because lower priced goods are no
longer widely available. In view of such shortages
of various types of goods it is doubtful that, on a
physical volume basis, sales this year have actually
risen very much. A t the present time certain soft
goods lines are almost as difficult to obtain as dur­
able goods. This is especially true of cottons where
shortages of labor at textile mills and price consider­
ations have materially curtailed production of civil­
ian cotton goods and products.
A t retail trade lines, whose statistics are available
to this bank, total volume of sales in April averaged
well below March, but was somewhat higher than
in April, 1944. The major factor accounting for the
decrease from March was that Easter fell on April
1 this year as against April 9 last year. W ith Easter
com ing at the beginning of the month virtually all
pre-Easter shopping was reflected in the March
figures. A t department stores April sales volume
was 24 per cent below March. W om en ’s apparel
store sales were off 38 per cent in the m on th ; men’s
furnishings sales down 45 per c e n t; and shoe sales
down 32 per cent. The Easter factor does not affect
furniture stores particularly, and district furniture
store sales in April were unchanged from March.
Indicative of the rising volume of sales in 1945,
despite the difference in Easter dates, department
store sales in April were 4 per cent higher than a
year ago. W om en’s store sales were up 6 per cent,
and furniture store sales up 10 per cent.
M ONEY AND

B A N K IN G

The transition period between V -E Day and the

end of war in the Pacific is not likely to bring any
great changes in banking and credit trends estab­
lished during the war years. As long as wartime
Government expenditures continue to exceed re­
ceipts and the deficit is partly financed by borrow ­
ing from banks, deposits will continue to expand.
As indicated previously in this Review, deposit
growth has been greater in rural regions than in
urban centers, and in balances of individuals rather
than in business accounts. As more goods become
available, individual savings may tend to decline,
which would lead to some reduction in the rate of
deposit growth, particularly in rural areas, but this
situation should develop slowly.
During the past month deposit totals at Eighth
District banks have shown little change. Private
demand deposits, U. S. Government balances, and
bankers’ balances at m id-M ay were about the same
as a month earlier. Tim e deposits continued to climb
in April and early May at about the same rate as in
the past few months. The impact of the Seventh
W ar Loan on bank deposits has not been noticeable
as yet. Since the marketable drive securities are
dated June 1, shifts of funds to W ar Loan accounts
will not take place in any large volume until then.
W ith contract cancellation, partial reconversion
to peacetime production, and prospective inventory
increases at commercial businesses, some bankers
are anticipating a rise in commercial and industrial
loans. Although business may need some funds to
finance reconversion or to tide it over the period of
contract settlement in the event of cancellation,
whether or not these funds are derived from bank
loans will depend upon the decisions of individual
businesses. Business as a whole apparently has
sufficient funds on hand to finance itself in the
transition period, although some concerns may
prefer to maintain substantial cash balances with
borrowings.
Commercial and industrial loans continued to de­
cline during the past month. In rural banks the
inclement weather, which has delayed farm activity,
has tended to hold down the seasonal rise in bor­
rowing. Rural bank credit is not expectcd to be used
to any greater extent this year than in the past two
or three years, in view of the strong cash position
of most farmers.

NEW M EM BER BANK

Since the last issue of this Review, the
Citizens Bank of New Haven, New Haven,
Missouri, has becom e a member of the Fed­
eral Reserve System.




W H O L E S A L IN G
Net Sales

Lines of Commodities
Data furnished by Bureau of Census,
U. S. Dept, of Commerce.*

Stocks
Apr. 30, 1945
compared with
Apr. 30, 1944

April, 1945
compared with
Mar.,’45 Apr.,’ 44

Automotive Supplies............................
Boots and Shoes....................................
Drugs and Chemicals............................
Electrical Supplies..................................

Machinery, Equipment and Supplies. .
Plumbing Supplies................................
Tobacco and its Products......................
Miscellaneous..........................................
Total all lines**......................................
*Preliminary.
**Includes certain lines not listed above.

+
—
—
—
—
—
—
—
—
—
—
—
—

5%
20
7
5
6
33
10
18
12
18
9
14
12

+ 39%
+
3
+
8
— 7
+
6
— 27
+
3
— 4
+ 13
- 0 — 18
+
3
— 3

+ 37%
— 28
*
—12
— 1
+ 4
— *8
— 9
— 16

C O N S T R U C T IO N

(Cost in
thousands)

B U IL D IN G P E R M IT S
New Construction
Repairs, etc.
Number
Cost
Number
Cost
1945 1944
1945
1944
1945 1944 1945 1944

22
Little R ock. . . . 30
Louisville........ . 63
Memphis.
. . 348
St. Louis. . . . . . 63
Apr. Totals. . . , 526
Mar. Totals. , . . , 455

154
22
51
330
104
661
494

$

14
53
149
621
141

$

978
886

164
23
157
383
243
970,
626

162
167
63
240
208

145
184
47
195
168

$ 61
42
27
104
226

$ 31
50
63
95
241

840
795

739
751

460
455

480
771

V A LU E C O N S T R U C T IO N C O N TR AC TS
(In thousands
of dollars)
Apr., 1945
Mar., 1945
Total 8th District..............$ 19,074
$ 69,217f
Source: F. W. Dodge Corporation. f Revised.

LE T
Apr., 1944
$ 7,714f

B A N K IN G
CHANGES IN P R IN C IP A L A SSETS A N D L IA B IL IT IE S
F E D E RA L R E SE R V E B A N K OF ST. L O U IS
Change from
May 16,
Apr. 18,
May 17,
(In thousands of dollars)
1945
1945
1944
$ .....
Industrial advances under Sec. 13b
Other advances and rediscounts................
19,805
U. S. securities.............................................. . 871,942
Total earning
. 891,747
Total reserves................................................ . 675,078
Total deposits................................................ . 612,374
F. R. notes in circulation............................ . 964,111
Industrial commitments under Sec. 13b..

50,

— 11,445
+

18,855
7,410

+
+
+

13,505
9,905
10,591

+

-

0

-

— 11,180,
+ 261,499
+ 250,319
+ 20,330
+ 86,394
+ 183,922
+

P R IN C IP A L RE SOU R CE A ND L IA B IL I T Y IT E M S
OF R E P O R T IN G M E M B E R BAN KS
Change from
May 16,
Apr. 18,
May 17,
(In thousands of dollars)
1945
1945
1944

Real estate loans..................
Loans to banks....................
Other loans..............................
Total loans..........................
Treasury bills..........................
Certificates of indebtedness.
Treasury notes........................
U. S. Bonds..........................

.$1,842,796
i* 223,614
8,249
s
30,785
65,982
2,408
92,133
.
423,171
45,253
.
296,974
. 259,499
.
681,066
13,0,79
.
123,754
. 1,419,625
107,984
, 1,122,089
. 302,068
.
166,263
581,819
18,650

2,917
+
— 11,434
209
+
189
+
—
329
1,431
+
8,070
+
■
— 1,864
— 1,270
.— 9,055
—
158
+ 12,559
—
5
2,710
+
4,781
+
5,643
+ 10,654
5,910
+
5,998
+ 10,,014
11,100

+292,899
+ 16,203
4,0,43
+
9,814
+
2,804
+
1,458
+
+ 16,837
51,159
+
12,953
+ 28,360
+ 46,996
+ ’172,129
7,779
+ 14,987
+ 241,740
—1,243
+ 161,012
+ 64,506
9,512
+
+ :111,511
12,335

Balances with domestic banks. . . .
Demand deposits — adjusted**. . . .
Time deposits....................................
U. S. Government deposits............
Interbank deposits............................
Borrowings........................................
*Includes open market paper.
**Other than interbank and Government deposits, less cash items on
hand or in process of collection.
Above figures are for selected member banks in St. Louis, Louisville,
Memphis, Little Rock and Evansville.

(Completed May 26, 1945)

Page 11

INDUSTRIAL

PRODUCTION

N A T IO N A L SU M M A R Y OF COND ITIONS
B Y B O A R D OF G O V E R N O R S O F F E D E R A L R E S E R V E SYSTE M

Federal Reserve indexes. Groups are expressed in terms
of points in the total index. Monthly figures, latest shown
are for April, 1945.
INCOME PAYMENTS TO INDIVUDALS
BILLIONS OF DOLLARS

ANNUAL RATES. SEASONALLY ADJUSTED

BILLIONS OF DOLLARS

Based on Department of Commerce estimates. Wages and
salaries include military pay. Monthly figures raised to
annual rates, latest shown are for March. 1945.
C O S T O F LIVING

Bureau of Labor Statistics’ indexes. Last month in each
calendar quarter through September, 1940, monthly there­
after. Mid-month figures, latest shown are for April, 1945.
MEMBER BANK RESERVES AND RELATED ITEMS

Wednesday figures, latest shown are. for .May 16, 1945.

Page 12



Output and employment at factories declined somewhat in April. Depart­
ment store sales showed a marked decline and wholesale commodity prices
continued to advance slightly.
Industrial production— Industrial production, which had advanced earlier
this year, declined in April to the same general level that prevailed during
the last half of 1944. The Board’s seasonally adjusted index was 231 per
cent o f the 1935-39 average as compared with 235 in the first quarter.
Activity in the machinery and transportation equipment industries declined
about 3 per cent in April, reflecting curtailed munitions production; the
largest part of the decrease was accounted for by a further reduction in
operations at shipyards. As a result o f the decline in shipbuilding during
the last 12 months, activity in the transportation equipment industries in
April was 10 per cent below a year ago.
Steel production was maintained at the March level as a decline in out­
put at open hearth furnaces was offset by a further rise in steel produced
in electric furnaces. Production o f nonferrous metals, which had increased
somewhat during the first quarter o f this year, showed little change in April.
Output o f stone, clay, and glass products was maintained at the first quarter
level, while lumber production continued to decline.
Production of textiles and manufactured food products declined slightly
in April and was at the level of a year ago. Cotton consumption showed a
decrease of 5 per cent from March but rayon shipments rose further to a
record level. Activity at meatpacking establishments, which had shown little
change during the first quarter after allowing for seasonal fluctuations,
declined 10 per cent in April. Output o f rubber products decreased as the
shortage of carbon black continued to limit production despite measures to
stretch available supplies.
Production o f most other nondurable goods
showed little change.
Bituminous coal production recovered in the latter part of April from a
substantial decline earlier in the month due to work interruptions accom­
panying contract negotiations. Output for the month was 8 per cent below
that of March and in the first two weeks o f May continued at this lower
rate. Anthracite production in April was 14 per cent higher than in the
preceding month but declined sharply in May prior to agreement on a new
wage contract on May 19. Output o f crude petroleum has been maintained
at record levels and iron ore production has shown an exceptionally large
increase this Spring due to early opening o f the navigation season on the
Great Lakes.
Distribution — Department store sales declined sharply in April and the
Board’s seasonally adjusted index was 181 per cent o f the 1935-39 average
as compared with an average o f 211 in the first quarter and with 172 in
April, 1944. Sales in the first half of May were only slightly larger than
in the corresponding period a year ago. Owing to unseasonably warm
weather and expectations o f shortages, much Spring shopping, which would
usually be done in April and May, occurred this year in February and March.
In mid-April many stores were closed immediately following the death of
President Roosevelt. Also, in particular cities part o f the recent decrease
in sales appears to have been associated with actual or anticipated income
declines resulting from cutbacks in war production.
Freight carloadings o f most manufactured products were maintained at a
high level in April and the early part o f May and were above the same
period a year ago. Shipments o f coal and lumber, however, were in smaller
volume, reflecting reductions in output of these commodities.
Commodity prices — Wholesale prices of farm products advanced in
April and then showed little change in the first 3 weeks o f May. Maximum
prices for coal, steel products, and various other industrial commodities have
been raised somewhat in recent weeks.
Retail price changes for foods and other commodities apparently have
continued to be small in April and the early part o f May.
Bank credit — During the four weeks ended May 16 total deposit and
currency holdings of businesses and individuals increased by nearly 3 billion
dollars. Increases o f about 300 million in currency and of over 400 million
in reserves required to be held against expanding deposits at member banks
resulted in an increased demand for reserve funds by member banks. This
demand was supplied largely by an increase o f about 500 millions o f dollars
in Reserve Bank holdings o f Government securities, mostly bills and certi­
ficates, and in part by a temporary decline in Treasury deposits at the
Reserve Banks. Excess reserves rose slightly to around a billion dollars.
In the 5 months between war loan drives, December 20 to May 16, re­
porting banks in 101 cities reduced their holdings o f short-term Government
securities by around 2.3 billion dollars in order to maintain adequate reserve
balances. But during the same period bond holdings of these banks were
increased by 1.6 billion dollars.