SURVEY of CURRENT BUSINESS June 1942
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SURVEY OF CURRENT BUSINESS JUNE 1942 UNITED STATES DEPARTMENT OF COMMERCE BUREAU OF FOREIGN AND DOMESTIC COMMERCE EXECUTIVES...! As an Executive or Administrator Who Can Do Things YOU Are in a Key Position To Help Your Country five times this amount, yet this pro- IHERE is urgent need for high-grade vides you an opportunity to render significant, patriotic service to your personnel to serve our Government Government. All appointments are in the war program. Some of the on the basis of war service, not to ex- types of executives needed are: ceed the duration of the war and six m Industrial consultants or manage- months thereafter. ment engineers. Discovering competent individuals © General executives or administrators who can ably execute the duties of with experience in fields such as: these important positions is one of the a. Heavy industries, machine tools, responsibilities of the U. S. Civil Ser- iron and steel, nonferrous met- vice Commission. The Commission is als, light and heavy machinery. now establishing a reservoir of mate- h. Transportation, including ocean rial on qualified candidates for all shipping, rail, or motor carriers. types of high-grade positions, includ- c. Foreign trade, with knowledge ing executive, administrative, techni- of the economic and political cal, and professional (except Law) for conditions of various countries the purpose of supplying the needs of gained either through direct the war agencies. experience in those countries or through import-export firms. © Executives with experience in labor I relations, personnel management, and Have your secretary write to industrial training. the Administrative and Man- © Administrators familiar with pur- agement Placement Section, chasing, storage, warehousing, and U. S. Civil Service Commission, Washington, D. C, requesting inventory control. an application. Please men- Compensation for these positions tion this notice. ranges from $3,800 to $8,000 per year. Many of you may be earning three to UNITED STATES CIVIL SERVICE COMMISSION SURVEY OF CURRENT BUSINESS JUNE 1942 ECONOMIC HIGH LIGHTS 2 THE BUSINESS SITUATION 3 Durable manufactures expanding 3 Increased tank car shipments of petroleum products 4 Sugar shortage 5 BUSINESS INVENTORIES IN THE WAR PERIOD 6 CORPORATE PROFITS AND NATIONAL INCOME ESTIMATES, QUARTERLY, 1938-42 13 PRICE CEILINGS AND WARTIME CONTROL OVER THE AMERICAN ECONOMY 19 STATISTICAL DATA: Monthly business statistics S—1 General index Inside back cover Published by the Department of Commerce, JESSE H. JONES, Secretary, and issued through the Bureau of Foreign and Domestic Commerce, CARROLL L. WILSON, Director Volume 22 Number 6 Subscription price of the monthly and weekly issues of the SURVEY OF CURRENT BUSINESS, $2 a year. Single-copy price: Monthly, 15 cents; weekly, 5 cents. Foreign subscriptions, $3.50. Price of the 1940 Supplement is 40 cents. Make remittances only to Superintendent of Documents, Washington, D. C. 1 SURVEY OF CURRENT BUSINESS June 1942 Economic Highlights Better Freight Car Use Cuts Loadings Farm Prices, Income Continue Advance Recession of carloadings below 1941 is partly due to significant Farm income continues to increase in one of the most striking lag in miscellaneous loadings, which in May averaged less economic aspects of war period. Heavy foreign requirements than 20,000 cars weekly above last year. But chief factor is for food and other agricultural products, combined with expand- drastic reduction in loadings of merchandise in less-than-carload ing demands of better-paid war and other workers, provide basis lots. Minimum weight of 6 tons for such carloads became for spectacular rise—35 percent in the past year—in prices effective May 1 ... should save several million out of 8 mil- realized by farmers for their output. Government during this THOUSANDS OF CARS INDEX 180 175 ^N/*"l^ 150 PRICES RECEIVED BY FARMERS (AUGUST 1909-JULY 1914 = 100) 140 . _. _. 100 100 75 'CASH INCOME FROM FARM MARKETINGS (1924-29 = 100) II ! ! ill III 1 1 ! ! 1 1 1 1 1 1 1 50 1941 1942 1939 1940 1942 Weekly Freight Carloadings of L. G. L. Merchandise Indexes of Cash Income From Farm Marketings, Adjusted for Seasonal Variations, and Prices Received by Farmers lion 1. c. 1. carloads last year, when average shipped in these cars was only 5.3 tons. Effect is principally to curtail duplicate, period bought over 1 billion dollars of food products largely for excessive service, rather than volume of merchandise shipped. shipment to other United Nations. Farm production, up to meet these requirements, supplies domestic consumers Need to limit new car construction to conserve materials and liberally with most foods. Farmers' returns ... in first 4 convert plants employed in car building . and at same time months nearly 50 percent greater than last year . will prob- insure prompt, adequate transportation for war and essential ably increase 2 billions to a near-record of 13.7 billions for all of uses . makes imperative improved utilization of freight cars. 1942. Farm prices and income have now largely attained ob- Minimum 1. c. 1. load will be raised to 10 tons by next September. jectives of Government programs since 1933. But many farm Object—to provide a cushion of 50,000 or more cars per week product prices, still exempt from formal control, are free to against supurging war industry freight. advance further . increase the cost of living. Summer Stocking of Coal Vital Wartime Measure Building up consumers' coal comotive equipment is foreseen stocks this summer is vital pre- MILLIONS OF NET TONS Planned wartime mobilization re- 80 cautionary measure. Slackening quires optimum off-season use of in coal production and shipments railroad facilities. Bituminous would place unnecessary bur- coal stocks at the end of April den upon railroads in autumn were the largest on record for and winter to fulfill seasonally this season . approached last larger requirements for railroad winter's all-time peak ... as coal fuel, electric power generation, loadings, which had been laggard, and heating . might result were stepped up in mid-April and in serious stringency. Expected continued during May at the increase of perhaps 10 percent highest level for the month in al- in coal consumption this com- most two decades. Coke ship- ing winter might exceed railroads' ments are likewise heavy; the cur- coal car capacity. Reduced sup- 20 rent volume of ore loadings is un- plies of fuel oil on East Coast also precedented. The result—sur- create important need for more plus (serviceable but inactive) extensive use of coal. Emergency gondola and hopper cars number loading of coal in box cars is possi- under 5,000. But another 30,000 1940 1941 1942 ble . but serious strain upon await repairs . could aid in all railroads' freight car and lo- Production, Consumption, and Stocks of Bituminous Coal stocking coal. June 1942 SURVEY OF CURRENT BUSINESS The Business Situation USINESS activity is increasingly taking on the more industries, chiefly in the consumer durable group, B aspect of economic warfare. Business develop- to limit or entirely cease output. ments in May and early June are best understood as Durable Manufactures Expanding. phases of the economic struggle. Production of war The durable goods industries, accompanied by the goods rose while production of consumer goods fell. minerals, have led the industrial advance. Transporta- War expenditures by this Government almost reached tion equipment, as may be seen in figure 1, continued the 4-billion-dollar monthly level and promise to total its spectacular rise which reflects, of course, airplane around 47 billion for the year. National income pay- and other war goods output. It was well seconded by ments are estimated at 8.8 billions in May but people machinery production which also includes war materials. increasingly saved their money as total retail sales Great Lakes shipments of iron ore in the season up dropped to 4.4 billions in dollar value and in physical to June 1, amounted to more than 21 million tons. volume fell 23 percent below last May. These large shipments were made possible through the Merchants, anticipating the several deadlines set by construction of new freighters and conversion of others, the War Production Board for the cessation of various among them former grain ships. consumer-goods' production, received from manufac- Both open-hearth and electric furnaces are operating turers in April spectacular additions to their inventories close to capacity with the supply of scrap currently (see table 2, p. 7.). Consumers got their first experience favorable and stoppages for repairs held to a minimum. of rationing. Plans for much wider extension of ration- Ordinarily, ingot production would be expected to fall ing are being drafted. Wholesale prices, as reflected in somewhat during the hot summer months. Exceeding the Bureau of Labor Statistics general indexes, re- the May record of 7.4 million tons before October will sponded to the setting of price ceilings by ending the be a challenge to labor and management. month almost precisely where they began it. The Figure 1.—Indexes of Production of Selected Durable Manu- Office of Price Administration undertook its tremen- factures, Adjusted for Seasonal Variations dous task of administering and enforcing the ceiling 1935-39= 100 prices. 400 Industrial production in May according to available indications, appears, on balance between expanding / / / war output and contracting consumer-goods production, / to have changed but little. The new high attained 300 / by the Federal Reserve seasonally adjusted index in TRANSPORTATION 'OUIPMENT.£ ,' April and apparently held in May tends to dispel /£/? oooooooo V \ fears, that had been entertained earlier, of a temporary MA CHIP f \ ^C- ° / \ slump during the height of the industrial conversion to war activity. It is believed that the output of war IRON AND STEEL\ ,^-—1 goods will gain so fast from here on as to more than >° \ /CEMENT ^' offset any foreseeable decline in civilian industries.