> > > >

1947-48 Theatre Catalog, 6th Edition, Page 274 (260)

1947-48 Theatre Catalog, 6th Edition
1947-48 Theatre Catalog
1947-48 Theatre Catalog, 6th Edition, Page 274
Page 274

1947-48 Theatre Catalog, 6th Edition, Page 274

A Business Report on the Carpet Industry

Manufacturers, Back to Products for Peace,

Plan More Effective Use of Floor Coverings

I am glad to visit with you todayi'F to talk about carpets and rugs. With the strain of converting the world to a peacetime basis, creating more problems than we appear able to bear, it seems almost impudent to discuss the plans of one industry. Public attention and interest appears to be centered, for the most part, on the far greater problems of preserving peace and maintaining a high level of economic stability in this country.


We may be wise, therefore, to take a moment to examine the underlying economic situation and determine how it may effect our own plans for the future. We recognize that successful operations in our own industry are wholly dependent on the economic well being of the country. The nation today is at the peak of the greatest boom in peacetime history. What was formerly considered as a Utopian concept of employment, 60,000,000 jobs, is now a realized fact. Purchasing power is enormous, The total income to all individuals is more than 21/.) times what it was before the war. Some groups, such as farmers, have over 3 times their prewar income. This should create a very favorable economic background for industries selling durable consumer goods. We find, however, that our plants and equipment cannot turn out the supply of goods wanted by our own people and those in foreign countries. Demand has far outrun supply. This has caused a rising spiral of prices and wages. This is a danger signal of disorder in our economy. If it continues, this race of prices and wages will destroy the possibility of a high level of economic stability for any extended period in the future.

It is true that the forecasts and predictions of depression, sounded since May, 1946, have brought many of the forecasters into disrepute. Every few months they have been forced to push back the date for the impending recession in business. Now it is supposed to occur in 1948 or even in 1949. Granted that it is not possible with present economic tools to correctly time forecasts of business booms and depressions, yet everyone will agree that the price situation today, particularly in foodstuffs, carries elements of extreme danger for our entire economy. Based on previous post-war patterns, such price levels as these have been followed by very substantial corrections of one kind or another, sufficient to jar our business. system. I am sure you will agree that our primary domestic post-war problem is how to achieve a high level of economic activity without constantly rising prices.

'An :ulrlrcss delivered before the Theatre Equipment and Supply h'lririirfactnrcrs Association, Inc... convention on September 27, 1047, in VVasliingl'on. Printed by permission of the author.


Carpet Institute. Inc.

If we fail to find the solution to this problem, then we shall be subjecting ourselves to the possibility of severe changes. Whatever we can do, as business men and consumers, to curtail the effects of our own demands on an already strained economy, will be helpful. Whatever we can do to promote long-run stability without inflation will be an excellent investment today.


In our own industry we have more than average concern with this development. The carpet and rug industry manufactures a product, the demand for which is postponable. If demand is postponed, it may be shifted to other goods than carpet and rugs. Furthermore, demand is particularly susceptible to changes in the amount of disposable income in the hands of consumers after they have paid for, food, clothing and shelter. Over the past 20 years food and rent together have taken about 50 percent of consumers expenditures. As this percentage increases it is not hard to see that there will be less left over to buy our products. Current trends, therefore, offer a direct threat to the future economic welfare of our business.

What can we do about this situation in the carpet and rug industry? We are trying to build up the production of carpets and rugs and increase supplies as rapidly as possible. As you know, during the war our industry converted to the production of duck and blankets. At one point during the war our production of carpets and rugs dropped to about 25 percent of 1941. When the war was over, we were faced with long and difficult reconversion problems. However, we have been producing an ever-increasing quantity of floor coverings. For the first half of 1947 we produced 36 percent more than in the similar period of 1946. Incidentally, this gain in output was also registered in contract carpet. We would have produced even more if we had been able to obtain additional labor and materials. It is hoped that for the year we shall approach the 1941 peak production of 71,000,000 yards. We expect to continue increasing output in 1948, unless something entirely unforseen at the present time should occur. Manufacturers, at the present time, are naturally concentrating on the designs, patterns and colors which will make it possible to turn out the greatest yardage. As supply comes into balance with demand, there will be an improvement in this situation.

Costs and Price Levels

That is the story on production. Now, what about costs and price levels? Since

1941 costs have advanced drastically. According to published records, since 1941, prices of imported wool, on which the industry is wholly dependent, are up 40 percent, jute prices 50 percent, cotton yard prices 65 percent, and labor '73 percent. As far as we can determine, the cost of manufacturing carpets and rugs has increased, on the average, about 45 percent. In the face of this increase in costs, the wholesale price of a typical axminster carpet, as reported by the Bureau of Labor Statistics, was in June, the latest month available, 30 percent greater than in 1941. This compares with an increase of 37 percent for home furnishings and 60 percent for industrial goods generally. Incidentally, during the same period, farm prices advanced 116 percent. Again, based on published reports, carpet prices have advanced an approximate 13 percent since a year ago when OPA was in force. This is believed to be one of the smallest increases on record in the consumer durable goods field. It is not strange that one retailer said recently, "I have been checking some of the merchandise in our store for price increases. I found that carpets and rugs, with a 25 percent increase over 1941, have shown less of an increase than almost anything else we have in stock."


Now that We have covered the economics of the business, I should like to tell you about our program and our plans for the future. They should interest you because, in the long run, they will have an important effect on the consumers appreciation and acceptance of decoration and decorative values in theaters and other public places.

Out of the Past Let me tell you a story. When the war picture was brightening, and it appeared merely a matter of time before our enemies collapsed, a group of farsighted men in the carpet business sat down and talked about the future of the industry in broad, long-range terms. They examined what had happened to the business. They found that during the years 1923 to 1927 an average of 2.6 square yards of carpet per family had been sold annually, while only 1.6 square yards of carpet per family had been sold in the years 1937 to 1941. In other words, between these two periods, the carpet industry had lost, on the average, 1 square yard per family in sales. Furthermore, they discovered that the average family had in use but 20 square yards of carpet. When these facts were studied in the light of cold reality, it was realized that a fundamental change in thinking must take place. The industry must stimulate consumer wants for carpet. Otherwise, the demand for carpets and rugs would be

1947-48 Theatre Catalog, 6th Edition, Page 274