Document pmnyBJprZXXzyjDw3v3a8a9b6

ECONOMIC BULLETIN Metropolitan Life Insurance Company .uew Research Bureau PLAINTIFF'S EXHIBIT RECENT INVESTMENT, ECONOMIC, AND INSURANCE CONDITIONS C0 1-3 federal Ptaeal Picture ; 1951 llaiulta ; Srrlaad Outlook far 1952 C Life fln^any Iurwtwiit Ciilf nti ; Metropolitan love*tin* and Interest Kata* S eurj.ty flotations 3 Midyear Bariev of Cooatruetloa j Publie SousInc j Kartcac* Credit k Oeeerel Induatrtal Output i Plant a Xqulpaaat Outlay* i Persian trade k Xrveatcrta* and Salee 5 CoaboUad Material# Plan 5 Prteea and Control* 6 lowly Vat** and 'Baal" lac-- j Salary StabUlaatlon Board 6 the Labor Perea ; ft^loynant and Oneuployaant ? Distribution at ffnaneer Tlirr-- J Ownership of Liquid Assets 6 Metropolitan * Life Inawanoa Oparatlona throu*b Midyear 8 Pereonal AMI 9 Oroup Insurance in U.S. Slat of lev *"i Suite? : Metropelltaa'e Oroup extended Medical Kxpena* Contract Cover) 700 cljark ; Vote on Pree loopltaliiaticn far CASI Benafleiarle* * Fcpckal Fibcm. Pictusc ; 1951 Results ; Rcvucp Outlook ron 1952 further evidences of an Improved flieU outlook make timely a brief review or latest development*. Prospect* appear favorable for * considerably saaller deficit sad Is** onerous tax bKl thaa reosatly estimated by the rtal nlstratloa. Tha <3.5 bn. budget surplus for fiscal *51 Just ended Juas 30 vs* th* secondlargest oa record (peak was $0.A ba. la 'AS), but only tha third surplus la the peat 20 year*; see Chart 1. The consolidated cash aurploa, ebea finally reported, vlll be apprexlnatoly $7*7 ba. -- of whleh $1.0 ba. was added to the cash balance and $5-9 bn. vas used to retire debt fro* the hand* of the public. Debt outstanding shove a act deeline of ooly $2.1 ba. however, because cash retirement vas offset la part by addltla to debt for aecrued Interest on Sana** Beads sad by sale ef Issues to Trust Accounts. Tor tha first quarter (July-Sep.) of fiscal '52, a deficit of about $3.5 bn. Is sheeted according to a repeat stateaeat of Secy. Snyder. That Is the reason the Treasury has takes advantage of the strong dseaad for short-terns to gala about $200 an. "nev money" per mek, beginning July 5* by that aieh Issue of Bills la excess of weekly aaturltles -- despite a cash balance at the end of fiscal *51 (Chart 2) none $2.k ba. above tbs $5 ba. which Secy. Snyder considers a necessary working balaaee at presaat. (A deficit la tha first fiscal quarter la not uual, even for years of fiscal surplus.) Pot fiscal *52 as a whole, there nay be no such doflelt os envisioned In the latest official outlook -- around $10 ba. on th# odarl nl ntratlve feidget baa la or about $6 ba. on a eoaeolldatod cash baala, both before any nev taxation. (Only six noatha ago tha official rlev for '52 wma for a nueh largar deficit -- about $16.5 ba. (Budget basis) or $12.0 ba. (Cash basis) -- which ve, anong other*, questioned even then.) (1) The louse has cut tha Adalnistratlon*1 s request la nearly every appropriation Bill for '52 upon vhteh It has acted thus far, although thoae Bill* cover only a saall part of tha Budget; Con^eaa ha* not yet acted finally upon any. (2) Tha rate cf Defease outlay* It still accelerating note slowly thaa the Adnialstratlaa anticipated. (3) Bona new taxes arc almost certain to be enacted, even If not la the full mount requested by tha Administration. The tax Bill which passed the louse cn Juad 227 2sslined to rales $7.2 ba. additional reveauas, would provide for stiff increases la Individual aad corporate lneona taxes aad la certain excisea. it la now under BaerIn* by the 6enate Finance Comittee, which will probably pare tha total. Pinal enactment seems unlikely before Autma. Bona private groups are advocating unifora manufacturer's excises or retail salsa taxes (coeiuxptlon taxes) In lieu ef further advene* la individual or corporate lneona tax rates. They argue that; (1) Tta lousa proposal* would Intensify the already heavily concentrated tax burdans aad the adverae affect* on incentives to prodaee -- that there will be the least Injury whsa th* tax load is distributed ever the broadest pesslbl* baa*; (8) Th* impact of sueb eonsu^tloa taxes upon th* smaller lneona* vould not ba seri ous-- Barely proportional, rather thaa truly recessive; (concluded on next page) OUTSTANDING INVESTMENT COMMITMENTS or 45 tire cowans* at uay 31, 1951 ( S MILLIONS ) 0 too too uw 1600 NCSIDCNTIAL UOIT6ACCS industrial A Hite. bonds k notcs rusue utility tONDt k notcs nonicsiocntial mortoaocs industrial A eoMML. lcasc-backs RAILROAD RONDS k NOTCS STATC 4 HUNICIRAL tONDt 4 NOTCS tARM MORTOAOCS # DON ABOUT 8% or ALL U.t. Lift CONRAN ICS1 ASSCTS. gr flotations of corporate bonds and notes* FOR NEW CAPITAL ONLY (BILLIONS or DOLLARS) ANNUAL TOTAL BgflsIlShEB u | | MONTHS IBIS 11 IS 13 IT 1* U '31 'IS IT 1* 'Al U 'AS *7 AS 'SI UT. AS REPORTED BY TVIE ^CHRONICLE" (3) Such coosnaptlou taxes would have the inaUpi (4) of dampening, lo these Inflationary times, competitive demands for eommodltlee end materials without retarding Incentives, (b) of distributing the tax load more fairly, -preedlag tax consciousness, () of providing emplsr revenues. Lire COMPANY INVESTMENT COMMITMENTS i METROS INVESTING k INTEREST RdTCS Striking orldoaoo of th* vldo margin of demand over supply of funds for pri vate investment la refloetod la heavy commitment* to lead, vbieh eaa now be estimated for all U.S. Life ecfmules at roughly $3 ba. naturally ease backlog la always present, but It la especially signIfleant la that a $5 bn. one exceeds even the highest net In vesting by the ooopanles during any single year, furthermore, the pressure to neet heavy eosmlfeaente explains la large degree the dlspoeal of redarals earlier this year. Cblaf sources of capital rtsmsnrt are handily arrayed In Chart 1 at left, cover ing *5 companies at Nay 31. The greatest eall for funds emanates from the field of Resldsntlal Mortgages, with Industrial and Mlscollaaooua toads and lotos only s little less. Combined, thoee two major catagorlae account for almost twee.thirds of the total. Of tbs remainder, Publie Utilities and lonreeldeatlal Mortgages are meet Important. Metropolitan' net Inventing during the first half of this year la dominated by acquisitions of Industrial Bonds and lotas at $395 a. and City Mortgages at $226 an. Tha former Is almost 6 times the same period last year,sad the latter Is fully treble. Other types of outlets show relatively small activity. Qross interest earnings on Metropolitan'a purchases of long-term Corporates so far this year ewtlnue at aoam S.b*. city Mart*** acquisition! Awing '51 yield J-75, which la ttaa contract rate after deducting cowlsslens on correspondent loans. Earnings 00 now City loans made have been drifting downward la the past year and a half, ainly because of large V.A. and P.I.A. acquisitions. Security Flotations flotation of corporate securities la continuing on a large seals In July -- in lias with the federal Reserve's expectation that reliance os tbo capital markets for corporate financing would ba heavy la 1951. (Economic Bulletin for June, p. 10.) lo estimates are published yet on the amount withheld from the market because of Vol untary Credit Xevtrelst. Offering yields on large long-term issues mow give lenders an additional l/b and more over those of a year ago. for the first six months, new-capital offwings of corporate bonds and notes approach the record first half of '$9 (Chart 2), and Bay exceed it whan final tabula tions era cow lata. Beth Industrials and Utilities were heavy, Ralls modest. Refund ing was tbs lsast for any half year in over a decade and a half, excepting the aacosd half of 'M and tbs first half of '*9. Stock Issues (largely Cowans) vers still modsreta, amounting to around aas-foorth of total offering. Direct flaceoanta ware high for the first half-year, and comprised around half of all bands and notes offered in the period -- eloaa to tbs record proportion of 520 for tbs year '50. Stats and Local Government offerings, although off about one-third from last year's enormous record first half, exceed most entire years prior to 'b7. This area it one la which It was felt particularly desirable to have credit restraintj but political cprpoaltlon to eueh restraint runs high, eves when soma Vataran benefit is not involved. NEW CONSTRUCTION "PUT IN PLACE- PUBLIC VS. HrvATE II Total aav construction erpcndltarcs la tha C.S. reached alaoat $lk bn. during the firet half of 1951 or nearly on*-sixth abort tba aaaa tlm* lut year. Although blgber building eoata aeewat la large port for that gala, tba physical vnlaem at con struetlaa aa far tbla paar tops all ccmparable parloda la history. Aj orodlt aoutrolt, material control*, ata. bagis to (tax pr.vate construc tion, Public axpenditures ellab and thus eountar aay rallaf from tbs atreog Inflation- 117 preeeures la tba building field. During tba flrat six months, Oortmasnt spending on aav eoastruetloasmount* to $h bn., or virtually tba aaaa aa for tba similar period at tba peak of major Wartime preparation la *k2 (Chart 1, Panel A). Monover, military building expenditure* are only beginning to gat under vay under tba Deftnee program. Public homing tarta during flrat half of '$1 total tea* 60,000 vita, contrasted vita 9,000 ror tba aaaa tin* a year ago. Of tboaa started tbla jwar, fully tvo-thirds vara begun laat nontb la tba ruab by lousing Autborltlaa to get pro* Jeeta going baforo tba and of tba laat fiscal year. la llae vitb Pras. frva'i stead for *a substantial public housing program,* despite its Inflationary aspaeta, a Senate -louse Conference Cm ittea just approved a ueh debated authorisation for $0,000 public starts for tba flseal year ending Dart Aina 90. Tba Senate had previoualy approved that n\a*br,but tba Iouae only 5,000. Tba B.T.C. lousing Authority -- already landlord to vail ever 55,000 fannies or 300,000 people -- announced last nil that It vas evuiting Congressional approval to begin the City's aost axpaaalva project, at a proposed coat of $31 1/3 v., to eceom aedate nearly 3,300 faalllaa. Other eltlaa, too, are puablag pleas for subsidised bow- lag. In tba face of sueb competition, Is it aay vender that Life eeapaalea aad ether private Investors sbov only noderate interest la Investing la rental bousing projeetsi In Private conatruetlea (Paael 1) expenditure* for tba year to data ahov a record high at eleae to $10 bn. put that achievement mistps#-'frlftpdmrAfhtAf vh*t la happening to monthly ttonds oonpared la Chart 2. Only Industrial building continue* strong, indeed even atrongcr than at aay tlae since World War ZZ. But tba Industrial boom falls far abort of offsetting the weaknesses la CoMtrelal aad aapeelally la Paaldential construction; Public Utility edges upvard to a nav high. Sousing "put la place" la aov lover than at aay tlaa dur ing tba peat year aad a half, after allowing for seasonal variations. Private starts eased off again In Juae; consequently, for the year to date, they ntaber about 51k,000 -- rully ona-fourtb belev tba aaaa period a year ago. A further out in privet* heme- building is expected to pare total starts in the 0.8. far tha full year '51 to betvean 900,000 aad 1 million,or 00#-third under *50, accordlag to aa 'unofficial" foreeast just Bade by the chief of the Dept, ef labor** Caastroetloo Dlv. (That astlaat* is a little above tba current 'official* one of 600,000 to 650,000.) Mortgage credit for home purchase continue* tight,as many lender* "wart off* large backlog* ef eoaaltaantsj camper* theta for Life companies at p. 2 . Tha supply of aertgaga funds is also curbed by tba fact that tba T.K.A. Is no longer itsnlag nrv eccasltocnts under Title ZZ, after nov having exhausted Its $9 bn. airtherliatlon. .A. - guaranteed loaaa become increasingly uaattraetlva at tba pegged kf rata,as market yields oo other Investment opportunities strengthen. Authority for the T.A. to make direct loans expired last June 30 after roughly $120 an. had been loaaed. Za an effort to stimulate ready flnanelag la certain Defease areas, govern ment credit controls have been eased there scmavhat. tte Federal latleaal Mortgage Assn., vhlch provide* a secondary market for P.I.A. and T.A. loaaa, also Just liberal ised it* nurebaslag regulation* la the** areas,_________________________________ ________ federal Soma Loan Banka nov become completely owned by tbalr private member* -- chiefly savings and loan association* as tba last ef $125 n. of Government- advanced capital is paid off. But tba Icm* Loan Banka are still under Govern ment direction ef policy,aa are the farmer*' Federal land Banka, vhlch became privately owned Just few years ago when the last of same $300 n. ef capital and surplus vas repaid to the Government. ______ MANUFACTURING vs. mining activity SEASONAL VARIATION ELIMINATED # OF 1935-39 AVERAGE soo 200 100 i0 D INVENTORIES AND SALES: VALUE X OF list AVERAGE (SEASONAL VARIATION CLIMINATC0) manufacturers- WHOLESALER?" " " i AILERS* 400 m < sales: >- t # l! X\ . V >s#* // 300 XwvpnoRiES ** / ^ 200 i / ij 1 ** ifSALESAle : /nvcntowm * 400 S4LCS JL f .Asn" 300 Jf* /NVtNTOKKS 200 100 - 100 1040 VO *fte *31 l4| *30 *31 ISAS 'AS 'so "SI r~-- t*Bto above a year ago. Manufacture mi Mining have both bold steady, follovlag their hu-p vprvinge 7,5 see Chart 1. The important steel industry baa recently been la full operation at an annual rate of about 100 an. ton*; plana -- ^ for expansion of capacity to U.8 an. tone by mld-'33 compared vitb 9$ an. in 'kj. Mining ataada at an all-tiaa blb (dot^purve). It averages aoaf 11* abort laat yaar -- aalaly a raflaetioa of a ont-fifth expansion for cruda patrolaw. Basic aeoncale factors underlying (Be itiitdti etam.' '6fc/atWlW&y ramie strong. Tha economy would continue to ba buoyed by araaaant expanditurea,aran abould these level off if tha Karens conflict code aoon. Currently planned eutlaya for nav plant and equipment eat nav peaks. Manufacture a Minina third quartar anticipated expenditures stand nearly 60* above a year ago; tee inset chart, for Manu facture alone, the nine aonth total, up 65*, exceeds any other full year. Other sain industry groups show significant gains also for the first three quarters compared vitb that portion of a year ago: Commercial l slac. and Utilities each up cn-fifth, and lUilroada up tvo-flftha. The momentum already attained by tbeae prograna aasurea heavy outlays in the balance of *$1 at least, according to an early July special (MeCrav-Elll) canvass. As to our current Military prograa, Mobilltatloc Director Wilson states in his recent second quarterly report: "We have placed orders during this 3 aonth [jtprll-Junt] period for dose to (10 billion of military goods and facilities, lbs Ration's production plant is vert ing on outstanding ordars vhlch now exceed (32 billion and are increasing aonth by aonth. "Deliveries of supplies, equlpaent, and facilities for our Armed Farces during the 3 maths vers over (k billion. * Foreign trade, another very active segment of the economy, has benefited from worldwide demand for goods. Merchandise exports (value} to date average about 50* above year-ago levels, and imports nearly two-thirds higher. iNVCNTOR1C5 AMD SALES The inventory position of industry assumes added significants,now that recent sales for many lines have failed to attain anticipated levels. The broad picture thus far involves fev acute areas, but It does point up the validity of tbs caution by the Rational Voluntary Credit Restraint Ccnlttee last March against "exeeaa inventory accumulation." Wholesalers and Retailers have lately faced a decline in tales, vbilt inven tories continued to expand. Rote tha recent crossing of tbs two sets of eurves on tha middle and right band panels of Chart 2. The ratio of inventories to tales for both groups now averages veil above most reesnt years. ' Manufacturers, on the other hand, continue In a more favorable position. Sales bold at record level#, thanks to extensive armament shipments. Although Inven tories have risen to a nev peak (left band panel of Chart 2), the ratio of lnventorlei to sales stands belov most recent years. D------------------------------------------------------ -How the Controlled Materials Plan works REOUHUUEHTJ mi US?FLY m, w|M mi WlacW... J ... tiM AU.OTJIEXTJ at.ala' *a flaaaf amiMl | ara laaaai X HatIml Fraductlaa tharlr, athar alalaaat a|aaalaa laclaHa Bapta. af ifrlaultar* antf latarl Bafaaaa Traaaparl Mala. aa tantral tarrlaaa Mala. 25 CONSUMER PRICES TOR MODE RATE`INCOME URBAN FAMILIES BY GROUPS or ITEMS X OF lail-ia AvtHAOt fXQuti ipamtry pysputat &* raacfl4 >n adnac^d rup with the launching of the Controlled Hatrials Plan. through direct ead-uae control of th# key aatala, Stoel, Alualnua, and Copper, th* Defease Production Adainle. tratien greatly strengthens Its power to lUKlth output nLiwi for ennar aa will a* allltary ltees. Theee n net*rials, as widely used throughout the eeoaony, hart as ready substitutes. Limitation of their absorption by lnduitry automatically laasaaa output veluaea for a broad rang* of flolsbad product!, vhleb la turo halpa curtail daaaad for other ltaaa la abort aupply. Under Off, approved Oafoaaa aad aaaaatUl Clrlllaa Usaa receive apoelfle aUotonnts of controlled. materials to fulflU productloo schedule j aao Chart 1. Simi larly, produoora at aueb key ootala ouat sat aalda given percentages at tholf output to Mt thasa preferred allotasata. la addltloo, tha national Production Authority controls tha dlatrlhutlaa of Off aatarlala la thalr rav atata so that rafload produc tion rill bo available to aat Off allocations. Unallocated, aad allecatad but unabaorbad, output, which comprises tha so-eallad 'fra* arts' aarket, aay h* purchased by Coatuoar llaas op to paralttad llalta. This ao-eallad *opoa aad" Off la generally axpaetad to laad soon to tha'eloaad aad* plan, wherein Defense authorltlaa alioeat* th* ntlr* output of kay ltaaa throughout tha aeonoay. Alrtady eartala aeare* ltaaa, aueh as tungsten, cobalt, cadslua, and tin, bar* b*aa placed uadar lOOj allocation, aad on Aug. 1, line and l*ad vlll bt adds4. Uses of otbara aueh as asbestos, platinum, Industrial dlaaooda, ate., eoatlaua raatrletad la varying degree. Iara Ualtatloa orders, Inventory controls, ate., hart prorad adequate to aet priority alletaaota. Paiccs amp Controls During lata Just aad la July tbar* has b**n further easing dovn of wholesale prtc*a. Within th*s* past frv weeks, ladnatrlal products bar* ahova tha aoat weakness, utils earlier La tha yaar fara products bad baaa responsible for tha eetftening. Bowarar, tha drop la thaa* tvo poups aad la aaaufaeturod foods has thus far baaa alld, and all ar* at aery high larala. Moat cfi:i ill ties reached thalr peak la March, ana their arena* daella* sine* thaa la only 2$, leaving composite wholesale prleaa lht higher thaa Just before tha outbreak cf tha Korean War. Tha Coaauaar frlc* Index for moderate-income Urban faalllas Is arallahla only to ald-May, aad by than Ita cllab had begun to slacken. Tha fuel 4 Ll(bt croup has baaa turning dovn, la part at least, for seasonal raasoaa. foods ar* the only aaetloa of the faally hudeat upas which data eo a few eltlaa are arallahla to tha last weak la Juaa, and thalr prleaa areraf* little different thaa la May. Recast dare lop--ate la all elassaa of foods and aarrloas eaa ha readily (leaned la Chart 2. food, Bamefuralshlngo, aad Clothln< hare since pra-Var days (one up east In east -- double or aqr*. Rentals paid by aodsrata-lnceam Urban faalUas are up th* least alaea thaa -- about 35f -- cod the lades charted far these la cos that has baaa rwrlaad upward., taking account also of bouelad built 1a poet-Var years aad not subject to rent control. Oorarnaaat price controls ar* obviously la a state of great uncertainty, and debate la at 111 going oo In Congress as to bow aueh power to (Ira tha President. At present, and imtU tha and of Ally, controls ara being operated under a 1-aooth exten sion of tha Defease Production Act vhleh expired on June 30. Tbs extension, however, carries e restriction upon the Administration, prohibiting it froe ask In* any furthar rollbacks In prlees during this Jl-dsy period. This "stop-gap" lav also forbids tha clasping of ceilings on eoaodltlas not already baring thee, unless they be fan prod ucts vhleb happen to reach "parity" during July. Thus, in the aaln, the Congress local extension of the Defense Production Act has led to a taaporary freest of whatever pries ceilings had been In effect oc June JO. FACTORY WORKERS* ACTUAL vs."REAir EARNINGS PER HOUR* $2.00 1.50 1.00 50* * AVCRASC PER EMPLOYES WORKER, INCLUSIHa OVERTIME, AND SEPORE DEDUCTIONS. 0 TOTAL LABOR FORCE EMPLOYMENT* AND UNEMPLOYMENT * (millions or persons) ixauots tMLOTtti ON MTHOUi. *U/-Cul.OTtD nNSONi, AMO UMMIO nkMIir WOAt*l. C*rami of employed factory worker* are iwrulni close to <1.60 an hour. tad have climbed without Interruption durian the mt year and a half (solid 11a*, Cbaxt 1). Much of this rlaa It attributable to increases i- stralght-tlme W| scales, but soae of It 1* du* to more onrtlat tad to shift* fn* lowr>ptll to higher-rage ladustt'lst. Vbll* tb* ftaeral_*ellla Imposed ea rag* tad salary *etl*( last January ha* totad a* a brake, th* various exception* aada by th* Wage Stabilization Board hav* operated to permit much increase, a* explained la previous BuUetlas. 81ae* th* outbreak of th* Korean War, average hourly earnings of Factory vor- br ha** aovad up 9S. or by practically a* ouch a* th* rlaa la th* Government* Contvtr Fries Index for moderate-lncoa* Urban families. WhU* outlay* for labor pro- rid* lncoa* for th* relpl*st, each expenditures an alto as laportaat eot of pro duction, tad a*e**(arlly become nflactod la prle* levels. Furthermore, Factory eer- k*rt product tueb a vld* variety of good* that aay general aad sharp expansion la tbir eo*t has a pervasive *ff*et upon ceneraer prle**. 1b* dot cum la Chart 1 (bora hov hourly *aralagt of Factory workers rail* no "real* gala* la purchatlag porar over th* patt year, h*e aeeouat 1* taken of higher eonsiaar What ha* happ*a*d to hourly tamlngt la Ronfactory Industries? Tba la**t table above th* extent to vhleh they too hart got* up frea June'50 to Apr. '51 (latest avpUahl*). It also Indicate* that arcs In tho** aetlritl** la vhleh vorfcer* hare succeeded la raising thalr money rage* by aor* than th* 9S Increase in eonsuacr price* sine* Jun*'50, th* gala* hart sarrmfd to rtry little aort -- up only about 10 or U. Ilgbtr vagtt la thatt llatt, too, add to the production costs of laportaat good* aad itnrleot used by faaill** aad Industrial eoneuoars. DtCRZASE n KHALI EAMSKS Ilia OUTBREAK CP KOREA* WAR Bituminous coal mines xctal aloes Crude p*trolera,*tc. Ouarrles, etc. Interstate Railroad* Factories Building Construction Antbnelt* mint* Oas A Electric Co*. Whole sal* Trade Retail &ada Telephone Laundries Cleaner* A Dyers St.rvye. A Busses telegraph US u 10 10 10 9 9 9 7 *7 6 5 5 *k A *1 Eeoooaie StabUlaar Johnston has appointed tb* fir* asabara.af.tha-- - -- Salary 8 tab 111tat lcre Board, designating pr. p*yaood B. Alisa, President of th* University of Washington, a* It* Ghalrana. (Cbairaaa 0*orge V. Taylor of th* Wag* StahUltatlon Board it a aonvottag ex-officio member, for tbe purpose of providing "* ualfora tad eoerdlaatad* stabilisation program la lint nth hi* own Board. ) Th* function of this or* Salary Board la eoofintd to tbs compensation of erecutivs, administrative, aad professional aaployttt, aad out*Id* salesmen, aa de fined la the exclusions aad* under th* Fair Labor Standards Act, provided they are not represented by labor orgaalxatlooe. 1b* Salary Board baa not yet Issued aay regulations peculiar to Its ora field, but Just prior to It* first atttlag Kr.Johnston Issued General Salary Stabilization Regulation Bo.l, continuing application of nil tha rules that had already been adopted by the Wag* StabUixntion Beard for rage* tad salaries generally. (0 Thc Labor Force ( Employment and Uncmflovmcot Including th* Aratd Fore**, tha Country's labor fore* probably totals around <0 6t an., or vlthln n million of the World War II peak la tba Siaaer of 19** (Chart 2). Tba Araed Forces are presraably betraen 3 aad 3.$ an. now, as ecatptrod with over 11 mn then. Unemployment has been running about 2 aa. recently -- a low vclrae, but of - 20 course more than had existed during full-scale War la 'hi, Tb* reaeoo total labor force stands ao elose to th* World \mr II bight is of course tb* much greater Urban eaployaent aov than then. la recent Booths, persons -o engaged la Honfara activities hav* totaled nearly Jh an., or about 9 aor* than la mid-'Us (bottom area la Chart 2). ID PERSONAL INCOME OF THE AMERICAN PEOPLE AMO WAGES AND SALARIES. ITS LARGEST COMPONENT I I -200 - ieo -120 - so - 40 t- o w DISTRIBUTION OF FAMILY SPENDINS UNITS ACCORDING TO INCOfcE AND LIQUID ASSETS* OWNED,BY INCOC GROUPS Monty Incoa* Befora luii uMrr $1000 $1000-2300 2000-3000 5000-4000 $000-5000 Units 1950 19$5 135 20* 17 27 19 23 19 15 12 7 Liquid Assata* Oraad Proportion of Total Early las 1951 1916 Madias Early 1st 1951 1916 6* 7* 0 $ 30 8 1$ $ 30 230 11 17 190 $70 12 16 250 900 12 10 530 l$5 5000-7500 cwr 7500 1$ 6 5 23 3 28 Total loot 100* 100* *U.8. Bonds, savlaci ad cbaeklsc aeeountt. 13 23 100* 1000 3860 2700 7270 $300 $$30 (But aaa text opp.) `t-j , UWKL*nniP Of HVUIP ASSET'S Fete ob Personal taco-- Bc*lv*d bv tfc* it1cm Pecpl*: Newspaper* early this w*k stated that th* AMrleu people's Personal laeo** *u being r*c*ir*d la Mey at aa annual rate of "12^9 1/2 ba. ... virtually unchanged fro* April." Bat April'* rat* of #2kk 1/2 bn. (Jus . 21, p. 3) bad b**a #5 ba. aaallar -* a substantial aaouat even for that# day*. Tb* people's taco** la May thu* r*aeb* (till another b*v high, aa eaa b* **aa fro* tba top lla* la Cbare 1. 30 Further hlft of fa*lll to higher tncoa* bracket* acocapaaied tb* sharp expansion la tb* Aaarteaa p*opl*' laeo** la 1950. Accordla* to figure* Ju*t rl*aa*d *0 by tb* F*d*ral R**rr Board, fro* It* airth aaaual Coaauaar 8urv*y aada aarly tbl* year, oa*.fifth of all fsally spending unit* rooalvod over 15000 b*fora taxes la '50; that 1* *or* than tvle* aa larg* a proportion aa only fir* y*ar* before. Only JO# re 20 port laeo*a* la** than $2000, la contrast to VJ# at tb* *ad of World War II. Balf of all unit* fall la tba groat nlddla bracket, #2000 to #5000. Tb* atrlklag change* in 10 laeo** dlrtrlbutlon alae* *h5 ar* a*a la tb* laft paa*l of Tabl* 2. Tb* average (a*dl*c) laco* of all unit* bit #3000. Thla 1* half again a* aueh aa at "V-J," and eontraat* vlth an *zpan*len of 30# la tb* Batlen'* total p*r*oaal 40 laeo** ovr tha aaa* period. laeldaatally, about k la 10 fanlly unit* aspect higher laeom* la '51 tbaa th* year before, and aa equal nuaber anticipate ao ehaagt. Only 1 la 10 export* to reeelve lea* this year. Tb* other* wn uncertain. OvB*rhlp of liquid a***t (a* aarrovly defined la the Conauaer Survey) becan* ore vld*pr*ad la *50 > although the average lamint owned vent dovn. So** 72# of all family (pending unit* reported *o*e fund* la the for* of U.8. Boede, earing* and check ing account*. Tbl* 1* a higher proportion than la the prerloua tee year*, and it took plae* la the eodarata-tltad holding* of #200 to #2000. Tb* pereeatag* of fmllie* own ing nor* than #2000 declined. The average (aedlaa) owned declined during the year, free #800 to #700. (The #300 average above la tha tabl* la baaed oa all fanlly ependiag unit*, whether they hold any liquid a*seta or not.) For average holding* elthla each laeo** group, ** right eeltws of Table 2. The Survey indicate* that, aa la early '50, th* top tenth of all fa*lly apeadlag units enjoy acre than one-third of all liquid asset*; th* top fifth bold half the asset*. For those who reduced their holdings, the most frequently stated reaeoa was, aa la ether year*, aedleal *xp*nae*. The second* raaklag reason wee to purchase durable good*. 0a* question la tha Survey asked what plans, If say, people had for using noal** received fra* P.S. Saving* Bond* maturing la 1951-52- About on*.airth of all faaily unit* owaed o* bond* that would nature during that period, and for about half of the* the aaouat 1* las* than #200. About tvo-thlrd* of thee had definite plan* la Bind: nore than half expected to reinvest in o.S. Saving* Bonds, aad another fifth would seek eo*e similar noalaflatlonary lnveataeat. (lo specific neatlen eas mad* of Life Insurance as a us* for such funds.) Aa to shift* la lnvestaamt preference*, ce* outstanding example 1* that which took place aaong the higher laeo** group* (1.*., over #7500). A 3 to 1 preference for lavastmaat* of aachenging money value (Savings Beads, bank deposit*) over variable money value (coaaoa stocks, real state) early la 'k9, has this year becoa* 1 to 1 p------------------------------------------------------------------------------------METROPOLITAN S COMB I N E D 0 R D INY PLACINGS AMD NET CANCELLATIONS (mn 6 MLIIU OP CACX TZU ; AYSUfll P MAI TO MORI) / metropolitan's ISSUE AND NET combined industr ial CONTROLLABLE LAPSE (TOUT 6 MRD OP BACI TBAB I ATBUOS m USXTt TV UBO MCTROROUI I AN ' > L'll. IKilUKANIC. UKtRAllONS I HROllG* Ml DtXAR Combined Ordinary Placing* through Ama average close to $7800 par man par oath -- a decided improvement over tha put fev pears, and 2nd only to phenomenal 1946 (aoil* line, Chart 1). Hat Controllable Cancellations par mar alao compere favorably with reeent pears, dipping slightly below loot pear (dot li t, Chart 1). Tha '51 Ratoa eeetlaua at low levels Tor both Regular asd : ;lhlp Ordinary. Wat Oala. Ilka Placing*, ranks 2nd to '*6 only. Tha downward trend fro* 19*6 to *$0 la thus sharply reversed, and brings tha average par man to $5860, or more than 1750 above laat paar'a post-Var low. Combined industrial Issue through Amt la within a hair'a braadth of 75^ par agent par weak (partly aatlaatad) -- bast In at laaat a dotan paara (solid lisa, Chart 2). Tha continued atraagth of Industrial emphasises tba public's naad for this tppa of coverage, and tha awar grovlng Importance of Monthly-premivm lndleataa our Ccmpenp's desire to Beat that naad In a wap west conwwnlant to tha Policyholder. Tha low level at Lapses la. wlrldlp brought out bp the dot llna la Chart 2. The Combined average, hovering around 394 ewer elaea World War ZZ, this paar drop* below tha paat two pwara. The Weakly-premium Lapse ratio of 3 l/2f (equivalent annual haals) continue* the low level of tha paat decade, aa doe* Moothly-premlvm. These favorable conditions la the Industrial Department plaid a arose Increase of *8^ par agent par week -- tha bast 6-month*' performance In half a doaan years. Aside from 19*3*5, when lapaatlon ran abnormally low, this year's arose Increase averages higher than aap similar period back to *29. Metropolitan's Combined Lift Salas bp midyear reach $1.8 bn. -- larger than the Total Inforce of all but 2D O.S. and 2 Canadian campenle*. Our 6-months' Ordlnarp Salas are but $12 am. short of $1 bn. -- exceeded only in '*6. Indue trial's $360 an. sokes this paar one of tha batter recant peart, tte $570 a. of Qroup Life ranks &id to last pear's record-breaker. Personal A k H Personal HI Salas continue at high levels. Tha initial Impart of extend ing eligibility to certain occupations carried Applications to 3600 a wmek for Rap. In June, they slipped back a bit to 3000, but even that outrankn bp far virtually all ether wemka la tha part deeade or more. Reflecting this peat surge In sales, first-year Premiums climbed shove record-breaking Map, to $560,000 in June. This more than doubles June 19*9, Just before the Introduction of new policies. Zt will be recalled that esles at that tine rose sharply to new all-time records, but these are now shattered bp present performance. Policies placed in June, at nearly 9*00, era tha bert in many years) cohere inset chart above.