Cunard Airline

POST-WAR

In London, Cunard Steam Ship Co. Chairman Sir Percy E. Bates last week told stockholders that Cunard would be "forced" to operate transatlantic air service after the war. Ship-loving Sir Percy ruefully faced the facts: "Good passenger planes and thousands of men trained to fly them . . . promise competition from a new element."

WAR ECONOMY

Facts, Figures

>Emphasis in 1942 war production is shifting: from the more-of-everything goals established by the President after Pearl Harbor (60.000 planes, 45,000 tanks, etc.) to a more realistic balance enforced by today's scarcities and military strategy. Obvious direction of the shift: from tanks to ships, from fighter planes to heavy bombers. Why use up steel making tanks until there are enough ships to take them to the front?

> War Shipping Administration took control of the last 25% of the U.S. oceangoing merchant marine still under private management, thus making U.S. ships agents of U.S. war policy. >Since collier deliveries to New England are 50% below requirements, the railroads have had to come to the rescue with hundreds of extra carloads of West Virginia coal. Soon, to save lighterage time around Manhattan, coal trains may use underground tubes through the Pennsylvania Station, as in World War I. >The railroads slapped a complete embargo on carloadings of civilian exports, except for exporters who have definite steamer space booked. Such bookings are harder & harder to get. > In an effort to keep war-bond sales on a voluntary basis, Secretary Morgenthau will set "quotas" (10% of income) for all citizens, try to shame them into saving more. > Domestic cotton consumption in March reached a new all-time high: 966,631 bales. That means an annual consumption rate of 11,500,000 bales, within 300,000 bales of the 1939-41 average U.S. crop. For the first time in a century, U.S. cotton growers are independent (temporarily, anyway) of export markets.

> All previous estimates of increased trolley and bus traffic were smashed in March, when traffic was up 19.4% over last year, the biggest increase on record. Detroit, where the transit bottleneck promises to be suffocating, hopefully ordered 500 new busses.

Savings Soaring

The U.S. people, criticized as spendthrifts by frugal Europeans but actually the world's biggest savers, tucked away $23 billions gross, $14 billions net, last year. This was $7.6 billions more than they saved in 1940. In 1941's fourth quarter they saved more ($6.8 billions) than in any quarter on record. The figures, compiled by SEC and announced last week as estimates, gave an idea of the resources in money and materials available for war.

SEC's estimates were limited to the savings of individuals. But corporations also lay by something when they have it -that part of their earnings not paid out as dividends. In 1940, according to the Department of Commerce, corporations saved $1.3 billions; last year, twice that.

Individual "saving," as classified by SEC, is a vast and variegated process, including a lot more than putting money in the bank or in securities. Example (see chart, p. 77)'. the U.S. people in 1941 bought more than $3 billions worth of automobiles, $1.7 billions of.non-farm dwellings, nearly $7 billions of durable consumers' goods, which -less depreciation of $8.6 billions-are all regarded as net savings. This year the U.S. will not only use that money for something else, but the materials, labor, and plant too. >Every kind of savings by individuals increased in 1941 except holdings of municipal and corporate securities, which were reduced $860,000,000. This constituted a "negative saving" -in plain English, a reduction of capital invested. In other words, individuals were getting out of these issues: they sold bonds and unloaded stock on the stockmarket (where the Dow-Jones industrial average last week declined further toward the 1935 low). Life insurance companies bought some of the bonds, corporations the stock. Sellers put the cash into something else. > Investments in Federal securities, which represented only 1% of all individual savings in the last quarter of 1940, jumped to the huge proportion of 27% in the last quarter of 1941. This jump was partly at the expense of cash holdings and bank balances. Pearl Harbor boosted bond sales without deflating consumption.

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