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Volume X X X I I MARCH, 1950 Number 3 Manufacturing In The Eighth District 1939 to 1947 A fundamental characteristic of most Americans is an innate desire for something better than that which they already have. It finds expression in the conviction that today’s economic conditions are all right for today— but tomorrow’s must be better. This American dissatisfaction with existing condi tions— the drive toward higher living standards— sometimes results temporarily in developments that are not as advantageous as expected. But over the long pull it has led to tremendous economic gains and has made this nation rich and powerful. The individual desire for a higher level of eco nomic well-being often finds expression in com munity and regional programs that are directed toward a similar goal for a whole area. In many parts of the Eighth Federal Reserve District the development of programs of this sort is motivated to a large extent by the desire to increase the flow of income into these areas. Progress toward higher income levels results from better and fuller use of resources at hand— land, labor and capital. It results from improved farming as well as from increased industrialization. But as agriculture increases its productivity and requires a steadily shrinking labor force to produce require ments for the rest of the economy, growth tends to be reflected in the rise of more and more nonagricultural pursuits. And of great importance in this segment of economic life is the manufacturing process— the transformation of raw materials into finished products. In the income-producing process the rate of development of manufacturing is a pri mary factor. Reports published by the U. S. Bureau of the Census provide some bf the information that is needed for an appraisal of the changes in manufac turing activity in this region during the past decade. These reports, of course, must be interpreted with care, particularly when comparing the relative rates of growth in communities or regions. There are vast differences among communities in the availability of natural resources, the supply and skills of workers, financial resources, and the like, which affect the rate at which manufacturing or any other economic activity develops in a community. In addition, it must be remembered that even a small absolute increase will result in a large percentage gain in an area where prewar manufacturing activity was negligible. Accepting these limitations on the interpretation of the Census of Manufactures data, these reports not only provide a means of evaluating the growth and shifts in manufacturing activity since 1939 but they also can be used as a guide in formulating local and regional development pro grams. SIZE AND GROW TH OF MANUFACTURING In 1947 the Bureau of the Census counted 11,300 manufacturing establishments— some 3,000 more than in 1939—in the 362 counties and the City of St. Louis in this Reserve District.* An average of about 652,000 persons were employed in these estab lishments and they were paid a total of $1,544 million in wages and salaries. These plants were scat tered throughout the district. In 1947 a total of * Based on the classification of manufacturing- establishments used in the 1947 Census. more than $240 million was invested in new plant and equipment in the four major industrial areas (St. Louis, Louisville, Memphis and Evansville) and in the state of Arkansas— the only district areas for which capital expenditure data are available. Prior to W orld W ar II, manufacturing activity in many sections of the district was at a considerably lower level than in 1947. Part of the increase from 1939 to 1947 directly reflected the impact of indus trial expansion during the war years. But by 1947 most of the strictly war production plants were dis posed of, were standing idle or had been integrated into our peacetime manufacturing industry. In other words, the growth that is represented by the differ ences between the 1939 and 1947 censuses largely reflects basic expansion that occurred in manufac turing in this area. Two qualifications to this statement should be noted. First, to the extent 1939 represented a period of less-than-full employment of resources, the 1947 figures (when manufacturing was at or close to capacity) considered relative to 1939 overstress the general upward trend in district manufacturing. In other words, the fact that 1939 was a year when the business cycle was in a low phase and 1947 a year when it was in a high phase tends to show a stronger growth trend than actually occurred. Sec ond, since 1947 prices were substantially higher than those of 1939, the comparisons of dollar value of out put and value added by the manufacturing process reflect price increases as well as physical volume increases. About 2,400 of the 3,000 increase in manufacturing establishments in the district between 1939 and 1947 were outside the four major industrial areas.* Limitations on available land area and industrial sites in the cities, the tendency toward decentrali zation, and increased local interest in developing local plants are among the reasons for this difference. As a result, the percentage increase in the number of plants in the four industrial centers was less than one-half that for the remainder of the district. But industry in the large cities was not marking time. Not only were new plants added to the list of those already located in these centers, but a sub stantial expansion of existing plants also occurred. As a result, the number of production workers em ployed in the four areas increased more, percentage wise, than it did outside these areas—62 per cent * The St. Louis metropolitan area (S t. Louis St. Charles County, M issouri, and St. Clair and Illinois) ; the Louisville metropolitan area (Jefferson and Clark and Floyd Counties, In d ia n a ); Shelby and Vanderburgh County, Indiana. Page 34 City and County and Madison Counties, County, K entucky, County, Tennessee; as against 54 per cent. In the industrial centers as well as in the outlying areas, the rate of increase was larger than the 53 per cent increase nationally. The larger relative gain in the industrial areas as a whole, in terms of employment, was due to a sub stantial increase in the St. Louis area and in Vander burgh County (Evansville), Indiana. In Arkansas and in the district portions of Ken tucky and Tennessee, the increase in production workers was smaller in the more heavily industrial ized counties than in the other counties in these areas. In Arkansas, for example, the increase in manufacturing employment in Pulaski (Little Rock) and Sebastian (Fort Smith) Counties was 44 per cent; in the remainder of the state 69 per cent. In Kentucky, manufacturing employment doubled out side of Jefferson (Louisville) and Daviess (Owens boro) Counties as compared with a 76 per cent increase in those two countries. In the district por tion of Tennessee, employment increased 65 per cent outside of Shelby County (Memphis) as against a 59 per cent gain in the Memphis area. In the district portions of Missouri, Illinois and Indiana, however, employment gains were larger in the principal industrial counties than elsewhere. In Missouri, employment in St. Louis City and County and in Greene (Springfield) County in creased 58 per cent between 1939 and 1947 as com pared with a 40 per cent gain outside these counties. In Madison and St. Clair Counties (East St. Louis, Granite City and other industrial cities) and Adams County (Quincy), Illinois, there was a gain of 60 per cent as compared with an increase of 40 per cent in the remainder of Eighth District Illinois. Similiarly, the increase in Vanderburgh (Evansville) County, Indiana was larger than the gain outside this county—72 per cent as against 50 per cent. CHARACTERISTICS OF DISTRICT MANUFACTURING IN 1947 In view of the substantial increase in manufac turing operations between 1939 and 1947, it is important to appraise the impact this expansion had in terms of the characteristics of the industry. Concentration of Industry— It was noted earlier that, except in the St. Louis and Evansville indus trial areas, the rate of expansion tended to be greater in the outlying counties than in the more heavily industrialized areas. Nevertheless, most of the manufacturing activity continued to be concentrated in a few centers. This concentration, in terms of employment, can be seen on the accompanying map. Almost 59 per cent of all manufacturing employees in the district were employed in the four largest industrial centers— St. Louis, Louisville, Memphis and Evansville. If the counties in which are located Little Rock and Fort Smith (Arkansas), Quincy (Illinois), Owensboro (Kentucky), and Springfield (Missouri), were included, the proportion would be increased to 64 per cent. It would be expected, of course, that since the bulk of the district’s manufacturing employment was located in a few centers, most of the value added to the cost of materials as a result of the manufac turing process also would be concentrated in these MANUFACTURING EIGHTH FEDERAL centers.* While the data are not complete, the Census reports indicate that about two-thirds of the value added by manufacturing in the district resulted from the operation of the plants in these four centers. This appears to be a slightly smaller proportion than in 1939, although, again, incomplete data make it difficult to arrive at a precise figure. However, the fact remains that, despite the indus trial growth in smaller cities in the district, manu facturing operations remained concentrated in indus trial areas. * Value added by manufacture is calculated by subtracting the cost of materials, supplies, and containers, fuel, purchased electric energy and contract work from the total value of shipments. EMPLOYMENT RESERVE DISTRICT - 1947' | 5 ,000 AND OVER 1,0 0 0 TO 4 ,9 9 9 t«I*H 500 TO 999 100 TO 499 I TO 99 | | NOT AVAILABLE ‘ a v e ra g e e m p lo y m e n t THE YEAR SOURCE: fo r Bureau of The Census Page 35 Small-Scale Operations— It is no secret, of course, that industry in this district typically falls into the well-known category of “ small business/' It is inter esting to note, however, that the number of plants employing from 1 to 19 employees represented a slightly smaller proportion of all establishments in this district than in the nation as a whole— 64 per cent as against 65 per cent nationally. A fractionally smaller proportion of plants in this district than nationally employed between 20 and 99 employees, but the number with 100 or more was relatively larger than in the nation as a whole. In general, establishments in the four major areas tended to be larger, on the average, than their coun terparts located outside these centers. The average establishment in the industrial areas in 1947 em ployed more than twice as many workers as the “ average” plant in the outlying areas. This largely reflected the fact that 56 per cent of the district’s plants with 100 or more employees were located in these four areas in 1947. Durables vs. Nondurables—An up-to-date picture of the distribution of the Eighth District’s manufac turing industries as between heavy and light goods will have to wait until the Census of Employment is taken this year. The report on manufacturing activity in 1947 showed these data only for the four major industrial areas in the district. At that time 51 per cent of the manufacturing employees in these centers were employed in the production of durable goods and about 47 per cent were in the non-durable goods industries. Most of the remain ing 2 per cent apparently were employed in the production of durable goods, although the Census reports made no precise allocation of these em ployees. TABLE I M A N U F A C T U R IN G E M P L O Y M E N T IN T H E M AJO R I N D U S T R I A L C E N T E R S I N T H E E I G H T H D I S T R I C T I N 1947* (Thousands of Em ployees) Durable Nondurable Goods Goods Industries Industries Total ................... 194.8 181.7 St. L o u is......... 126.1 118.4 Louisville ...... 35.1 35.4 M emphis ...... 13.7 21.2 Evansville .... 19.9 6.7 * St. Louis metropolitan area; Louisville metropolitan County (M e m p h is ); Vanderburgh County (E van sville). Source: U . S. Bureau of the Census. Total 382.6 244.5 73.8 35.2 29.1 N ot Classified 6.1 3.3 0.3 2.5 area; Shelby In terms of employment, the Evansville area is predominantly a heavy goods center, while in the Memphis area production is concentrated in non durable goods. In the Louisville area, the number of unclassified employees is sufficiently large to tip the scale in either direction, but the evidence indi cates that most of these were employed in the heavy goods industries. The St. Louis area was fairly well diversified with a slight edge to the durables. Page 36 Pattern of Growth— In the district states (the whole states— not the district portions of these states), a sizable portion of the 1939-47 industrial expansion followed along the pattern established earlier. That is to say, much of the increase during that period was in industries which were dominant in these areas in 1939. In Arkansas, for example, 30 per cent of the total increase in production work ers was in the lumber industry and 17 per cent in food processing. In Mississippi, the lumber and apparel industries— the two largest employers in 1939— accounted for 43 per cent of the increase in all production workers. Other district states experi enced a similar expansion pattern, although in Ken tucky, Missouri and Tennessee the total increase since 1939 tended to be spread more evenly among all industries. Expansion from prewar levels often was con centrated in those industries that were largest in 1939. But this fact should not be allowed to obscure the significant increases, in some states, in industries which were among the least important in 1939. In Arkansas, 20 per cent of the state’s total increase in manufacturing employment was in five indus tries— transportation equipment, nonelectrical ma chinery, primary metals, fabricated metals and leather products (none in 1939)-—in which aggre gate employment in 1939 represented only 2 per cent of all manufacturing workers in the state. In Mississippi, there was a large expansion in the furni ture, printing and publishing, fabricated metals and nonelectrical machinery industries. Prior to the war, these industries employed barely 2 per cent of the state’s production workers, but their aggregate increase to 1947 accounted for 10 per cent of the total expansion during that period. In Tennessee, too, the smallest industries in 1939, in terms of employment, greatly improved their relative posi tion. Five industries— paper, nonelectrical machin ery, electrical equipment, transportation equipment and the miscellaneous group— which before the war employed 5 per cent of the state’s manfacturing workers, accounted for 16 per cent of the total in crease in manufacturing production workers be tween 1939 and 1947. In Missouri, no single industry accounted for a sizable portion of the 1939-47 increase in employ ment. The proportion accounted for by individual industries ranged from 15 per cent in transportation equipment to less than 1 per cent in plants manu facturing petroleum and coal products. Combined employment in the tobacco and rubber products in dustries declined slightly from 1939 to 1947, but separate estimates for these industries are not avail able. In Kentucky, the proportions ranged from 21 per cent in food products to less than 1 per cent in the paper, petroleum and coal products, and miscellan eous industries. There was a decline of less than 1 per cent in textile mill employment. In Illinois, the nonelectrical machinery industry accounted for 26 per cent of the state’s manufactur ing employment increase, while the apparel, lumber, leather, and miscellaneous industries each accounted for less than 1 per cent. A decline occurred in the textile products industry. This pattern was similar to that in Indiana where nonelectrical equipment plants accounted for 23 per cent of the employment increase and small declines took place in the textile, apparel and leather products industries. Growth and Relative Importance of Lines of In dustry— Individuals and organizations whose inter est is directed toward the industrial development of their communities or regions are aware of consider able differences in the income-producing possibilities of various manufacturing industries. In general, but not necessarily always, a manufacturing process which adds a relatively high value to the raw ma terials used is more attractive to a community than a process which adds relatively little value to the cost of materials. The wider the margin the greater the possibility for increased wages, for the purchase of materials, and for profit. It does not follow from this, of course, that every community seeking to expand industrially should attempt to attract manufacturers of chemicals, or petroleum and coal products— the two industries in which the value added per man-hour is well above the average for all manufacturing in the United States. Unless the necessary raw materials, labor skills, capital and markets are available for such industries, successful promotion along those lines would be unlikely. A more realistic approach is the promotion of industries readily adapted to the re sources of the community. As development proceeds in this direction, labor skills can be expected to improve. Markets are broadened and the total in dustrial scene becomes more attractive to new indus tries capable of serving already established plants and supplementing them in supplying products needed in the area. This type of development is characteristic of regions that are moving toward industrialization, and is typical of the Eighth District. Much of the district’s industry in 1939 was in lines where value added per man-hour worked was lower than the United States average. And much of the 1939-47 expansion was in the same type industries. It is important to note, however, that while the gains of the past decade may have been concentrated in relatively low productivity manufacturing lines, the new industries represented higher productivity for the district’s people than the nonindustrial lines from which they had shifted. As indicated in Chart I, the value added by manu facture per man-hour worked in four of the district states— Arkansas, Mississippi, Missouri and Tennes see— averaged less than in the nation as a whole. In three states— Illinois, Indiana and Kentucky— the average was larger than in the nation. This simply means that on the average, each man-hour worked in manufacturing plants in four of the dis trict states resulted in less than the national average amount of value being added to the materials that were processed. It does not mean, of course, that each hour worked in every plant or industry group in these states added less than the national average value per man-hour. CHART AVERAGE U.S. AND 0. S. il l SOURCE: Calculated : I VALUE ADDED PER MAN EIGHTH K Y I I N O : BY MANUFACTURE HOUR DISTRICT STATES - 1947 MOT From Census of Manufactures1 Oata As noted above, in four states the average value added per man-hour worked in 1947 was less than the national average. In Arkansas and Mississippi, as indicated in Chart II, this reflected the fact that two-thirds of the man-hours worked were in indus tries in which the value added averaged between $1 and $2 per man-hour. In contrast, were Illinois and Indiana where almost all manufacturing labor was performed in industries in which the value added averaged above $2 per man-hour. In Illinois, 80 per cent of all production workers’ time was worked in industries where the value added by Page 37 CHART H PER CENT OF MAN-HOURS WORKED IN MANUFACTURING IN 1947 IN TERMS OF AVERAGE VALUE ADDED BY MANUFACTURE PER MAN-HOUR IND. KY MISS. MO. TENN. O 20 40 60 PERCENT OF ALL MAN-HOURS 80 100 AVERAGE VALUE ADDED PER MAN-HOUR m *1.00 -*1.99 1§8§81 * 2 .0 0 - V 99 g j S i t v » j *4 .0 0 * *4 .9 9 I I * 5 .0 0 AND OVER *3 00 SOURCE: Calculated From Census of Manufacture Oata manufacture averaged as high or higher than the national average for all manufacturing. Some attention was given earlier to describing the growth in manufacturing in the district states since 1939. It was pointed out that in some states — notably Arkansas and Mississippi— a sizable pro portion of the increase, in terms of employment, was in industries that were major industries in these areas in 1939. In Chart III, part of the in crease in each state is described in terms of (1) the industries that accounted for most of the in crease, and (2) the average value added per manhour in these industries. It will be noted that the darker the shading on the bars, the lower the average value added per man-hour. This chart shows, for example, that in Arkansas 30 per cent of the total increase in production workers in all manufacturing between 1939 and 1947 was in the lumber industry— where the average hour's work in 1947 added less than $2 in value to the materials processed. It also indicates that more than 20 per cent of the total increase in Arkan sas was in three industries— primary metals, chem icals and paper products— where the manufacturing processes added, on the average, between $3 and $4 per man-hour of labor. For other states, too, the chart indicates the relative growth in recent years in the industries Page 38 which accounted for most of the manufacturing expansion in the district states. In Kentucky and Mississippi, and to a lesser extent in Missouri and Tennessee, a sizable amount of the past decade's industrial expansion was in industries where the manufacturing process added less than the national average value ($3) per man-hour.* Implications— The large expansion in manufac turing activity in the district states— and in the Eighth District proper— in recent years represents real progress toward the higher level of income that is needed in this region. Further development along these lines remains as a challenge to the people of this area, however. In 1948 only 17 per cent of the income received by Eighth District residents re sulted from manufacturing; nationally the ratio was 23 per cent. It is evident that the higher income levels we are working toward cannot be attained overnight. But it also is clear that increased manufacturing development can play an important part in this program. This is true whether the expansion is in industries where the production process adds a relatively small or a large amount of value to the materials processed. It would be a mistake to direct development pro grams toward the expansion of industries selected solely because they result in a high value being added to their raw materials. However, where such industries also are well suited to the skills of the available workmen and the other resources of a community, they would be welcome additions to the region's economy. But in addition to seeking new establishments, it is apparent that progress also can be made by improving the manufacturing processes already established in the region. This, too, could result in more value being added to the materials that are manufactured into finished goods. This may be a slow process since it involves a wide range of com plex problems. It may mean raising the level of skills of our workers, the use of new and more effi cient capital equipment, expansion into new mar kets, or a general improvement of the “ know-how" that is so vital to modern industry. These problems should not be regarded as insurmountable road blocks on the road to the region's objectives, how ever, but rather as obstacles that can be overcome. W eldon A. Stein * The average value added per hour of production worker labor in the food processing industry was substantially larger in K entucky than in any other district state. This apparently reflected the fact that 70 per cent of the total value added in the food industry resulted from the processing of grain and other materials into distilled liquors— a process that requires a relatively small number of man-hours and which produces a high-valued finished product. A lthough the food industry accounted for only 18 per cent of all man-hours worked in manufacturing in Kentucky in 1947, the value added for the industry represented 39 per cent of the total. CHART HI PERCENTAGE DISTRIBUTIO N OF TOTAL IN C R E A S E PRO DUCTIO N W ORKERS (1 9 3 9 -1 9 4 7 ) BY VALUE ADDED PER MAN-HOUR IN 1947 EIGHTH DISTRICT STATES 20 30 INDIANA ILLINOIS ARKANSAS Per Cent 40 Per Cent _50 O 20 10 30 _ 40_ _50 Per Cent O IQ 20 Trans. Equipment Elec. Machinery Fabricated Primary Elec. Machinery Metals Metals Primary g l l Food Transportation Equipment KENTUCKY 20 “T " 30 40 50 | Food a Publishing Rubber MISSISSIPPI Per Cent O_____ 10 50 MISSOURI Per Cent O_____ 10 20 r Fabricated 5 3 3 Food H j Metals PerCent 50 I Chemicals p j Transportation Equipment Metals Electrical Machinery Apparel Chemicals Nonelectrical Machinery Leather Furniture Stone, Clay 8 Glass Tobacco Per Cent Nonelectrical Paper Apparel | 40 Food Machinery Lumber Fabricated 30 Trans. Equipment Food Nonelectrical Metals I Chemicals | Chemicals 10 Metals Fabricated | | | Printing Per Cent 50 40 30 Nonelec. Machinery Nonelec. Machinery Per Cent O IN Machinery Stone, Clay 8 Glass TENNESSEE O____ 10 20 30 40 Chemicals LEGEND 50 AVERAGE VALUE ADDED PER MAN-HOUR: * 5 . 0 0 AND Prim ary Food Lumber Fabricated OVER Metals M etals PER CENT OF TOTAL INCREASE IN PRODUCTION WORKERS REPRESENTED BY INDUSTRIES CHARTED: ARKANSAS 8 5 PER CENT IL L IN O IS 86 * 4 . 0 0 “* 4 .9 9 INDIANA 89 * 3 .0 0 ~ * 3 .9 9 KENTUCKY 82 M ISSISSIPPI 69 MISSOURI 75 * TENNESSEE 68 « * 2 . 0 0 " * 2 .9 9 >• Leather A p parel SOURCE: Calculated From U.S. Bureau Of The Census D ata Transportation Equipment Page 39 Survey of Current Conditions Economic activity in the first part of 1950 has continued at the high levels that were reached late in 1949, both in the nation and in the Eighth District. Industrial production was larger in January than it was in December, when allowances are made for the usual seasonal changes that occur at this time of the year. There was some decline in the num ber of people who were employed but most of the drop was in seasonal industries such as agriculture, construction and trade. Unemployment, however, was more of a problem in January than it was in December as the number of workers who were with out jobs climbed to the highest level since 1941. There was much that was bright in the economic picture in January but there also were storan clouds overhead or on the horizon. Labor-management dif ficulties— in the coal, automobile, telephone and railroad industries— either were holding down indus trial operations or were threatening to do so in the near future. Coal shortages were growing acute, and by late February in a number of areas dwindling stocks were reflected in cutbacks in manufacturing and other industrial activity. In the Eighth District, industry was not seriously affected in January by the reduction in coal sup plies. T o a large extent this was due to the fact that shipments continued from mines operated un der contract with the Progressive Mine Workers Union. In addition, most of the factories depend ent on coal for their fuel energy requirements had accumulated sizable stockpiles. At the time this Review was written (late February), however, the coal situation in the district also had assumed serious proportions. The district also has been plagued by floods in early 1950, but flood damage so far has been slight in terms of farm crop losses and hence in terms of anticipated farm income this year. Arriving too early in the season to catch spring plantings in most areas, the floods have caused damage prin cipally to property and equipment. The increase in industrial production in the nation in January to an estimated 182 per cent of 1935-39, as measured by the Board of Governors’ seasonally adjusted index, primarily reflected further gains in the output of automobiles, steel and most other durable goods. The physical volume of nondurable or “ soft” goods produced in January was not much different from that in December although there were increases in the paper and paperboard indus Page 40 tries as well as in some other nondurable lines. Consumers’ buying and expenditures for construc tion continue to provide a substantial amount of support to current levels of economic activity. Con sumers’ expenditures apparently are running only a little below last year’s volume, with a large part of the decline reflecting lower prices this year. In this district, department store sales in January aver aged about 2 per cent less than a year ago on a daily average basis, about the same decline as the decrease in consumers’ prices. This high level of consumers’ expenditures con tinues to be based in large part on a flow of income that is only about 2 per cent smaller than a year ago. In December, personal income in the nation was estimated at $211.5 billion on a seasonally ad justed annual basis. Agricultural income was below that in December, 1948, but nonagricultural income was slightly larger than at the close of the previous year due primarily to increases in interest and dividend income and in Government transfer pay ments. W age and salary payments were off about 2 per cent. Construction expenditures in the nation in Jan uary were the largest ever for that month, totaling $1.5 billion according to the U. S. Departments of Commerce and Labor. Expenditures in this district seem likely to remain at a high level during the coming months. A large volume of work was placed under contract late in 1949. In January, there was a sharp increase, relative to last year’s volume, both in building permits and in construction actually contracted for. The increase over last year’s volume in residential construction contracts has been par ticularly impressive, especially in the speculative building field. Such weakness as exists in construc tion expenditures continues to center largely in in dustrial construction. PRICES W H O L E S A L E P R IC E S IN T H E U N IT E D S T A T E S Bureau of Labor Jan., '50 Statistics compared with (192 6= 1 00 ) Jan.,*50 D e c .,*49 Jan.,*49 D e c .,*49 Jan.,*49 A ll Commodities .... 151.6 151.3 160.6 + 0 .2 % — 5 .6 % Farm Products ...... 155.3 155.3 172.5 - 0 — 10.0 Foods .......................... 154.7 155.7 165.8 — 0.7 — 6.7 Other .......................... 145.8 145.5 152.9 4- 0.2 — 4.7 R E T A IL FO O D Bureau of Labor Statistics Jan. 15,D ec. 15, Jan. 15, (1935-39 = 100) 1950 1949 1949 U . S. (51 cities)...... 196.0 197.3 204.8 St. Louis ................ 204.6 206.2 212.4 Little Rock ........... 196.4 197.0 199.8 Louisville .............* 183.7 185.0 193.9 Memphis ................ 203.1 206.9 217.1 Jan. 15, ’ 50 compared with Dec. 1 5 /4 9 Jan. 1 5 /4 9 — 0 .7 % — 4.3 % — 0 .8 — 3.7 — 0.3 — 1.7 — 0.7 — 5.3 — 1.8 — 6.5 EM PLOYM EN T An expected decline in employment occurred be tween December and January both in the nation and in the Eighth District, due principally to losses in seasonal industries such as trade, construction and agriculture. The December-January drop this year did not reflect nonseasonal cutbacks to the same degree as it did a year ago. Nevertheless, total employment remained lower than a year earlier, continuing the pattern of the last ten months. Nonagricultural employment in the nation was off about one million from December but was slightly higher than a year ago. Fewer persons were employed in agriculture in January than at any time since 1940. Apparently agricultural em ployment has resumed its long-term downward trend— a trend which had been temporarily inter rupted during late 1948 and the first half of 1949. More people were looking for jobs in January than at any time since 1941. Unemployment would have been even higher had it not been that a large number of women who were laid off decided to leave the labor force and not seek other jobs. About one of every five unemployed persons in January had been out of a job for fifteen weeks or more, accord ing to the Census Bureau. In the seven district states, about 15 per cent more workers were collecting unemployment com pensation checks in January than in December. Indiana was the only district state with fewer claim ants in January, while Arkansas had the largest percentage increase in unemployed workers. In St. Louis City and County, the number of continued claims for unemployment compensation increased about 8 per cent. In Evansville, there was a con siderable drop between December and January. In the Louisville area, fewer persons were work ing in January than in November due to declines in manufacturing, retail trade and construction, which were slightly larger than the gains in the transportation industry. The major decreases in manufacturing occurred in nonelectrical machinery and food companies; most other firms reported little change during this period. Employment in January was about 5 per cent below the year-ago level. Of the five district states which report data on average earnings of manufacturing workers, in only two (Illinois and Indiana) were earnings larger than the national average of $55 per week in November, 1949. Earnings in district states ranged from less than $40 a week in Arkansas to almost $60 a week in Illinois and Indiana. The average in Tennessee was $45, while in Missouri it was $50 a week. Employment in the St. Louis area declined in January as it usually does after the year-end build up in December. Most industry groups showed losses which in the aggregate amounted to about 1 per cent as compared with 3 per cent last year and about 2 per cent the year before. Since losses early last year, particularly in manufacturing, were never fully recovered, the seasonal dip in January dropped employment to the lowest level since early 1947. Increases in the leather, textiles and apparel industries were more than offset by sizable cutbacks in transportation equipment and electrical machinery plus smaller declines in nonelectrical machinery and basic and fabricated metals. INDUSTRY Industrial activity in the district in January remained at about the December level, after allow ances are made for the usual year-end declines that occur in a number of industries. Manufacturers in the district kept their plants operating at roughly the same levels as in the previous month, despite declin ing coal stocks that curtailed production in some areas in the nation. Construction activity as well as the volume of work contracted for was off a little more than usual, not because January was a par ticularly low month but because December was unusually high. In the extractive industries, the production of coal dropped considerably but crude oil output was larger than in December. Coal Mining— In general the coal strike has been less damaging to industry in this area than in some other sections of the country. A portion of the fuel requirements in the district customarily are met by coal mined by the Progressive Mine Workers. These supplies, together with the limited output from mines operated by the United Mine Workers, were sufficient to enable most manufacturing plants to maintain their production schedules in January and early February. W ith the closing of P M W mines, however, the local fuel situation has become critical. In the mining areas in the district the impact of the shortened work week, and later the full-scale strike, was severe. The loss of income was transPROD UCTION IN DEXES C O A L P R O D U C T IO N 1 9 3 5 -3 9 = 1 0 0 Jan., ’ 50 105* Unadjusted D ec., ’ 49 154* SH OE Jan., *49 162 Jan., ’ 50 90* ' P R O D U C T IO N 1 9 3 5 -3 9 = 1 0 0 Unadjusted N o v ., ’49 D ec., ’ 49 154 103R *— Preliminary. R — Revised. D ec., ’ 48 148 D ec., ’ 49 157 IN D E X Adjusted D ec., ’49 148* Jan., *49 139 IN D E X Adjusted N o v ., *49 104R D ec., ’ 48 151 Page 41 lated into a drop in retail trade and a general tighten ing of business in those communities. Total coal production in the district in January is estimated at 6.5 million tons. This is one-fifth less than in December and more than a third smaller than production last January. At this level, tonnage was equal to about 95 per cent of the 1935-39 average on a seasonally adjusted basis. Last January, output was 139 per cent of the average in those years. Arkansas was the only district state to show an increase between December and January. Produc tion there was up 10 per cent. In other producing areas there were reductions from December that ranged from 17 per cent in Illinois to 27 per cent in Missouri. Compared with output last year, tonnage mined in January was down from 5 per cent in Arkansas to 48 per cent in Indiana. The western Kentucky fields were the only ones where production was equal to that last January. Nationally there was a drop of 21 per cent from December and 37 per cent relative to January, 1949. CONSTRUCTION B U I L D I N G P E R M IT S M onth of January N ew Construction Num ber Cost 1949 1950 1949 1950 (C o st in thousands) Evansville ..... . Little R ock........ 89 Louisville ..... . .. . 151 M emphis ....... .....1,186 St. Louis.............. 190 Jan. T otals...........1,661 D ec. Totals...,.....2,261 18 28 75 471 115 $ 707 763 $ 5,885 $10,483 131 1,043 1,909 1,439 1,363 $ 241 80 338 1,248 816 $2,723 $3,961 Repairs, etc. Number Cost 1950 1949 1950 1949 36 41 $ 36 $ 21 143 92 117 63 42 36 50 48 133 152 105 104 154 143 651 356 480 445 $958 $640 $698 $745 425 501 INDUSTRY C O N S U M P T IO N O F E L E C T R IC IT Y N o . of Jan., ( K . W .H . Custom 1950 in thous.) ers* f K .W . H . i Evansville ......... 40 15,776 Little R ock...... 35 5,210 Louisville ......... 80 69,925 1 M emphis ........... 50 25,952 Pine B lu ff......... 28 6,389 * S t . Louis........... 112 80,221 D ec., 1949 K .W . H . 15,876 5,297 71,318 27,563 4,979 79,668 Jan., Jan., 1950 1949 compared with K .W . H . D ec., *49 Jan., ’49 16,777 — 1% — 6% 4,927 — 2 + 6 70,832 — 2 — 1 28,595 — 6 — 9 6,150 +28 + 4 77,993 + 1 + 3 Totals ........... 345 203,473 204,701 205,274 — 1% — 1% * Selected industrial customers. 1 Reports from these cities have been revised. In Memphis and Evansville more industries have been added, whereas in St. Louis several non-manufacturing industries were deleted. LO ADS IN T E R C H A N G E D F O R 25 R A I L R O A D S A T ST . L O U I S First N ine D ays Jan., ’ 50 D ec., *49 Jan., *49 F eb., ’ 50 Feb., ’ 49 1 mo. ’ 50 1 mo. ’ 49 99,462 99,992 108,055 31,445 32,339 99,462 108,055 Source: Terminal Railroad Association of St. Louis. CRUDE (I n thousands o fb b ls .) Arkansas .... Illinois ......... Indiana ...... Kentucky .. Total ...... O IL P R O D U C T IO N — D A IL Y D ec., 1949 Jan., 1949 Jan., 1950 77.2 178.7 27.7 26.5 73.4 181.0 28.7 24.9 83.3 179.7 24.2 23.9 310.1 308.0 311.1 Page 42 AVERAGE January, 1950 compared with D ec., 1949 Jan., 1949 + 5% — — 4 +15 6 +11 —1 + + 1°, 7% —1 0 Construction— The construction picture in Jan uary was almost as bright as the coal mining situa tion was gloomy. Bad weather interfered with actual construction work during the month, but there was a large volume of work authorized by building permits as well as placed under contract during the month. The value of construction authorized by permits issued in the reporting cities was more than twice as large as in January, 1949— totaling $6.8 million as against $3.4 million a year earlier. There were widely varying increases in four of the cities. Evans ville showed a decrease. The January total was 38 per cent less than in December, but the drop was seasonal and was smaller than the decline last year. Contracts were awarded for a total of $45.3 mil lion of construction in the district in January, according to the F. W . Dodge Corporation reports. This is within 2 per cent of the value of work con tracted for in January, 1947 when volume was the largest ever for that month. Residential building placed under contract amounted to $19.5 million— a new record for the month. Nonresidential awards totaled $25.8 million and were larger, in the aggre gate, than in any January except in 1946 and 1947. The strength in residential construction con tracted for last month largely reflected a sizable gain, relative to last year’s volume, in speculative building. The value of contracts for one-family dwellings for sale or rent was more than twice as large as in January, 1949 in the St. Louis territory covered by the Dodge reports. In view of the large amount of future work cov ered by contracts let in January, plus the holdover of a sizable volume of on-site construction work that got under way late in 1949, the outlook in terms of expenditures during the coming months is good. Thus it would appear that construction out lays can be expected to play an important part in supporting the district’s economy during the first half of 1950. Steel— Basic steel operations in the St. Louis area in January were scheduled at 79 per cent of new capacity— about 10 per cent higher than in January last year, but 5 per cent below the high level of December. During 1949, capacity was increased about 10 per cent which is included in the January rate. The month-to-month decrease was due to shutdowns of several open hearth furnaces for relin ing and repairs. Additional maintenance shutdowns in the first weeks of February caused a further drop in the rate of operations. Trade reports indicate that demand for steel in this area has continued strong. Lumiber— The lumber industry operated at a slightly higher level than in December but a little below the January, 1949 level. Building activity continues to sustain a good lumber market and in most areas production is readily absorbed. The hardwood market is exceptionally active, in large part reflecting heavy buying by furniture manufac turers. It is reported that there is not enough highgrade well-manufactured hardwood to meet de mands. Demand for oak flooring also continues to be heavy. Operations of reporting southern hardwood mills were scheduled at 78 per cent of capacity as com pared with 77 per cent in December and 80 per cent a year ago. Southern pine production averaged 2 per cent higher than in December but 3 per cent lower than in January, 1949. Whiskey— Distilleries in Kentucky operated at about the December level. At the end of January, 35 of the state’s 61 distilleries were in operation— six fewer than a year ago but the same number as a month earlier. Production during the past few months has been smaller than that of a year ago. Output is being geared to contemplated consumption with little attempt being made to produce surplus stocks. Reports indicate a trend toward an increase in the proportion of sales of bonded whiskey to total sales. Whiskey production in Kentucky in December totaled 6.5 million tax gallons, a 13 per cent increase over November but 29 per cent less than in Decem ber, 1948. On a year-to-year basis, total output in the nation was off 33 per cent. Shoes— Shoe production in the district in Decem ber was considerably larger than in November and was higher than in the previous December. Accord ing to preliminary estimates, output totaled 8.2 million pairs— 50 per cent more than in November and about 4 per cent more than in December, 1948. The large month-to-month percentage gain is largely due to the fact that production in November was the smallest since 1946. Operations were cut back at that time in order to hold year-end inventories to a minimum level. In December, production of new spring lines of shoes got under way in most plants and operating rates climbed back toward normal. Meat Packing— Federally inspected slaughter in the St. Louis area in January declined seasonally from December but was larger than that of a year ago. In January, 476,000 animals were slaughtered under Federal inspection as compared with 552,000 in December and 448,000 in January, 1949. The decrease from December was due to an 18 per cent decline in the slaughter of hogs and to a 20 per cent decline in calf slaughter. Hogs accounted for 73 per cent of the total slaughter. Killings of cattle increased 1 per cent and of sheep, 7 per cent. Com pared to a year ago, hog and calf slaughter increased more than offsetting decreases in cattle and sheep killings. Oil— Daily average production of crude oil in each of the district’s producing areas, except Indi ana, increased slightly over December, and in total was at the same level as a year ago. On a yearto-year basis, decreases of 1 per cent in Illinois and 7 per cent in Arkansas were offset by gains in Indiana and Kentucky of 14 per cent and 11 per cent, respectively. Production in the district continued to compare more favorably with that of a year earlier than output nationally. In the past six months, the nation’s production has averaged more than 10 per cent less than in the comparable period of the previous year, while district output has been off only fractionally. TRAD E January winds blew hot and cold and as a result consumers were not in a mood to purchase winter clothing in the record-breaking warm weather and, at times, were not able to get out to shop when snow and ice in some parts of the district were the worst in years. Total sales at reporting district stores in the month dropped from the seasonal high in December and were generally under last year’s volume despite traditional and special store-wide sales promotions. Furniture stores were the only reporting trade line to record district-wide sales volume greater than a year ago. Department store sales and sales at men’s and women’s specialty stores were under both the previous month and the same month a year ago. The effect of the month’s unpredictable weather was particularly noticeable in the total of depart ment store sales in Springfield, Memphis and several smaller district cities. Early in the month, Memphis weather conditions were the worst in the history of the city when severe icing conditions crippled the city’s economy. W H O LE SA LIN G N et Sales January, 1950 Data furnished by compared with Bureau of Census, Jan., 1949 U . S. Dept, of Commerce * D ec., 1949 — 12% — 11% Automotive Supplies .......... ..... + 8 + 1 Drugs and Chemicals.......... + 17 +31 D ry Goods ............................. — 8 Groceries .................................. — 13 — 12 Hardware .................................. ..... — 2 — 14 Tobacco and its Products. — 1 + 1 Miscellaneous ........................... — 4% 10% **T o ta l A ll L in es........... ....... # Preliminary. **Includes certain items not listed above. Line of Commodities ... Stocks Jan. 31, 1950 compared with Jan. 31, 1949 — 17% + 8 — 2 — 11 — 7 — 8 — 1% Page 43 TRAD E D E P A R T M E N T STO R E S Stocks Stock N et Sales on H and Turnover Jan., 1950 mos. Jan. 31, 1950 Jan. 1, to compared with to same comp, with Jan. 31, D ec., 1949 Jan., 1949 period Jan. 31, 1949 1950 1949 8 th F . R . District.. — 5 7 % — 2% ..... .29 .28 — 6% __ 4 Ft. Smith, A r k ..... — 64 — 10 .27 .28 Little Rock, A rk ... — 60 — 3 — 9 .27 .27 Quincy, 111.............. — 58 + 3 — 9 .22 .20 Evansville, In d ..... — 60 — 6 — 18 .26 .21 — 4 Louisville, K y ........ — 64 — 4 .29 .30 St. Louis A r e a 1.... — 51 + 1 ..... — 7 .31 .29 St. Louis, M o ..... — 51 + 1 — 7 .31 .29 Springfield, M o ..... — 63 — 2 — 13 .20 .18 Mem phis, Tenn..,.. — 60 — 9 + 2 .29 .32 *A11 other cities.... — 67 — 14 — 8 .18 .18 *E1 Dorado, Fayetteville, Pine Bluff, A . . . . , __________ OJ M t. Vernon, _____ __ _ Harrisburg, 111.; N ew A lbany, Vincennes, I n d .; Danville, Hopkinsville, Mayfield, Paducah, K y . ; Chillicothe, M o . ; Greenville, M is s .; and Jackson, Tenn. 1 Includes St. Louis, M o . ; Alton , Belleville, and East St. Louis, 111. Outstanding orders of reporting stores at the end of January, 1950, were 4 per cent greater than on the corresponding date a year ago. Percentage of iaccounts and notes receivable outstanding January 1, 1950, collected during January, by cities: Instalm ent E xcl. Instal. Instalment Excl. Instal. Accounts Accounts Accounts Accounts 47% Q uincy ................ 2 2 % 5 7% Fort Sm ith.................. % Little R ock......... 15 42 St. Louis............. 19 55 20 56 Other Cities ...... 13 46 Louisville ........... M emphis .............. 21 44 8 th F .R . D ist..... 19 52 IN D E X E S OF D E P A R T M E N T STOR E SALES A N D 8th Federal Reserve District Jan., 1950 Sales (daily average), unadjusted 2.................. 232 Sales (daily average), seasonally adjusted 2..282 Stocks, unadjusted * ................................................248 Stocks, seasonally ad ju sted3...............................288 2 D aily Average 1 9 3 5 -3 9 = 1 0 0 . 8 End of M onth Average 1 9 3 5 -3 9 = 1 0 0 . D ec., 1949 504 33-0 259 309 STOCKS N o v ., 1949 378 300 329 308 Jan., 1949 238 290 260 303 S P E C IA L T Y STO R ES Stocks Stock ______ N et Sales on H and Turnover Jan., 1950 mos. Jan. 31, 1950 Jan. 1, to compared with to same comp, with Jan. 31, D ec., 1949 Jan., 1949 period Jan. 31, 1949 1950 1949 M en ’ s Furnishings..— 6 0 % Boots and Shoes...... — 50 — — 5% 7 .........% ......... + 1% — 6 .21 .30 .22 .30 Percentage of accounts and notes receivable outstanding January 1, 1950, collected during Jan uary: M en’s Furnishings ................ 42% Boots and Shoes.................... 45% Trading d a ys: January, 1950— 2 5 ; December, 1949— 2 6 : January, 1949— 25. R E T A IL F U R N IT U R E N et Sales AGRICULTURE S T O R E S ** Inventories Jan., 1950 Jan., 1950 Ratio of compared with compared with Collections D e c .,’49 Jan.,’ 49 D e c .,’ 49 Jan., ’ 49 Jan.,’ 50 Jan.,*49 8 th Dist. Total 1 — - 48% + 10% — 2% — 16% 23% 28% St. Louis A — 50 + 18 - 0 — 26 42 47 — 51 + 18 - 0 — 26 42 47 — 51 + 23 + 9 — 3 14 16 — 51 _ 2 + 25 + 9 13 15 Memphis .... — 46 + 25 — 8 — 13 16 Little Rock — 45 + 1 — 9 + 1 16 24 * * Springfield .. — 43 + 21 17 24 * * — 42 Fort Smith — 14 * N ot shown separately due to insufficient coverage, but included in Eighth District totals. 1 In addition to following cities, includes stores in Blytheville and Pine B luff, Arkansas; Hopkinsville, Owensboro, K entucky; Greenwood, M issis sippi; Hannibal, M issou ri; and Evansville, Indiana. 2 Includes St. Louis, M isso u ri; A lton , Illinois. 3 Includes Louisville, K e n tu c k y ; and N ew Albany, Indiana. * * 3 9 stores reporting. ] 12 P E R C E N T A G E D IS T R IB U T IO N Jan., *50 Cash Sales ...................................... 15% Credit Sales .................................... 85 Total Sales ................................. 10 0 % Page 44 O F F U R N IT U R E SA LE S D ec., *49 17% 83 1 00% Increased sales of housefurnishings at St. Louis department stores in the month played a large part in boosting total store sales slightly over last year’s volume. Sharing in the year-to-year gain were increased sales in small wares and women's and misses’ accessories. W omen’s and misses’ apparel and men’s wear sales, however, dropped below last year’s total for the month. The value of inventories at reporting district department stores on January 31, 1950 was slightly under that on December 31 and on the same date in 1949. Outstanding orders at the end of the month were about one-third larger and one-sixth larger, respectively, than for the same dates a month ago and a year previous. W omen’s specialty and men’s wear store sales volumes during January dropped sharply from December and were less than in January, 1949. Inventories at both types of stores at the end of the month fell below those on December 31. At women’s specialty stores, however, the value of inventories was larger than a year earlier in con trast to the decline at men’s wear stores relative to the same date in 1949. Furniture store sales in January totaled about half those in the previous month but were slightly higher than in 1949. St. Louis furniture store execu tives report January sales exceptionally good, with demand heaviest in medium-priced lines. Outstand ing orders were reported higher than a year earlier, with delivery generally good in all lines excepting television, electric refrigerators, medium-priced, upholstered and other lines of house-furnishings. Inventories at reporting furniture stores on January 31 were approximately one-tenth less than on the comparable dates a month ago and last year. Jan., ’ 49 19% 81 100% The U. S. Department of Agriculture recently released its preliminary estimates of farmers’ assets and liabilities as of the beginning of 1950. According to these figures, for the first time since the USDA has published the annual balance sheet of agricul ture (1940), farmers’ assets showed a drop from the level of a year earlier. The decline from January 1, 1949 is estimated at $4.4 billion or about 3 per cent. Total liabilities of farmers were up almost $800 million or 7 per cent. Proprietors’ equities thus declined by $5.1 billion or 4 per cent. The major item of decrease in farmers’ assets was a $4 billion drop in real estate values (in contrast to 1948 when a $2.4 billion gain was registered). Real estate assets as of the beginning of 1950 repre sented almost exactly half of total farm assets, just a shade less than the proportion a year earlier, but B A L A N C E S H E E T O F A G R IC U L T U R E ( I n millions of dollars) N et Change Jan. 1, 1950* Jan. 1, 1949 1949-50 ASSETS rnvCIMI QCGAfc • Real estate ..’........................................... Non-real estate: Livestock ........................................... Machinery and motor vehicles.. Crops, stored on and off farms 1 Household equipm ent2 .............. Financial assets: Deposits and currency...................... . U nited States savings bonds......... Investm ent in cooperative.............. T otal $ 61,200 ................................. $ 65,168 $— 3,968 13,211 13,390 7,700 6,200 14,657 11,114 8,475 6,000 — 1,446 + 2 ,2 7 6 — 775 + 200 14,000 5,100 2,100 14,800 5,024 2,036 — + + 800 76 64 $122,901 $127,274 $— 4,373 5,450 5,108 + 342 2,900 2,714 + 186 1,200 2,400 1,152 2,200 + + 48 200 C L A IM S L iabilities: Real estate m ortgages........................ Non-real-estate d ebt: T o principal institutions: Excluding loans held or guar anteed by Com m odity Credit Corporation .............. Loans held or guaranteed by Com m odity C r e d i t Corporation ............................ T o others* ......................................... T otal ................................. $ 11,950 $ 11,174 $+ 776 Proprietors* equities ............................ $110,951 $116,100 $— 5,149 * Preliminary Estimate. 1 Includes all crops held on farms and crops held in bonded ware houses as security for Com m odity Credit Corporation loans. 2 Estimated valuation for 1940 plus purchases minus depreciation. 3 Tentative. Includes individuals, merchants, dealers, and other m is cellaneous lenders. Source: Bureau of Agricultural Econom ics U S D A . substantially less than in 1940 when 63 per cent of farmers’ assets were in real estate. The other major asset decrease was in value of livestock inventory— off $1.4 billion from a year earlier. This decline (10 per cent) reflected lower prices rather than a decrease in livestock numbers. Crop inventories also were valued at less than a year earlier, and deposits and currency held by farmers at the beginning of 1950 was about $800 million less than at the opening of 1949. The major offset to the asset declines was a $2.3 billion increase in machinery, reflecting continua tion of the heavy machinery purchases of the post war years. This also points up some of the change that has taken place in farm capital requirements. At the beginning of this year, value of farm machin ery and equipment represented 11 per cent of total farm assets in contrast to 6 per cent in 1940. Farmers’ liabilities rose $776 million in 1949. Of this amount, outstanding farm mortgage debt increaced $342 million, or 7 per cent, continuing the rise begun in 1946. This compares with a $226 million, or 5 per cent, increase during 1948. Short term debt increased but at a substantially lower rate than a year earlier. Short-term debt in the hands of banks, Government lending agents, dealers, merchants and others increased by $386 million, or 8 per cent. This compares with an $812 million, or 20 per cent, increase during 1948. The Bureau of Agricultural Economics has re vised its indexes of prices received and prices paid by farmers. One revision of the prices-received inder involved a change in the base, shifting from the five years from August, 1909 through July, 1914 to the average prevailing from January, 1910 through December, 1914. The new prices-paid index also takes into account changing cost pat terns due to increased use of machinery, electricity, etc., and includes such cost items as hired labor, stocker and feeder cattle. As of December 15, the new index of prices paid was 246 as compared with a figure of 240 as calculated under the old metfiod. The index of prices received was revised with changes made in weighting various components of the index. The December 15 prices-received index on the new basis was 233 as contrasted with the 240 as computed under the old method. The effective parity for the basic commodities (cotton, wheat, corn, rice, tobacco, peanuts) will be either that computed by the new or the old method —whichever is higher. For nonbasic commodities, if the new parity is higher than the old, it will be used. If it is lower, a transitional parity ratio, 5 per cent lower than the ratio computed by the old method, will be used in 1950, 10 per cent lower in 1951, and so on until the new level is reached. Under either system of computation the parity ratio narrowed from December 15 to January 15. Prices received by farmers on January 15 were higher than at mid-December, but the index of prices paid increased more than that of prices received, reflecting mainly increases in interest and tax charges. BANKING Reflecting the usual post-holiday letdown in busi ness activity and some unseasonal weather condi tions in January, member banks in this district re ported a moderate decline in deposits and loans and an expansion of their investment portfolios at the end of January, 1950 as compared with the close of December, 1949. In February, the city banks re ported an increase in total loan volume due to conAGRICULTU RE CASH (I n thousands of dollars) Mississippi Tennessee D ec., 1949 ...... 105,501 32,170 ...... 80,363 46,494 .... ...... ......$513,256 .. F A R M IN C O M E D ec., 1949 12 month total Jan. to D ec. compared with 1949 D ec., N o v ., compared with 1949 1948 1949 1948 1947 — 39% — 61% $ 527,607 — 9 % + 6% — 21 — 18 — 11 1,702,943 — 7 — 9 — 17 916,022 — 13 — 14 — 27 + 125 — 10 527,920 — 9 — 54 — 2 — 70 481,312 — 12 — 26 — 29 — 13 944,357 — 21 — 19 — 33 — 10 426,914 — 15 — 29% $5,527,075 — 1 2 % — 10% — 24% R E C E IP T S A N D S H IP M E N T S A T N A T IO N A L ST O C K Y A R D S Receipts Shipments__________ Jan., 1950 Jan., 1950 Jan., Jan., compared with compared with D e c .,*49 Jan.,*49 D e c .,*49 Jan.,*49 1950 1950 + 9% 26,991 — 10% + 12% Cattle and calves .... 92,869 — 4 % + 8 +13 + 15 84,459 H ogs ............................296,908 — 4 9,142 — 17 +50 4 + 14 Sheep ............................ 47,260 120,592 + 1 % +15% + 14% Totals .....................4 37,037 — 4% Page 45 BANKING P R IN C IP A L A S SE T S A N D L IA B IL IT IE S F E D E R A L R E S E R V E B A N K O F ST. L O U IS Change from Jan. 18, Feb. 16, 1950 1949 Feb. 15, 1950 ( I n thousands of dollars) Industrial advances under Sec. 13b.... ....$ ................ 3,999 Other advances and rediscounts........... 980,840 U . S. Securities............................................. .... Total Sarning assets............................... ....$ 984,839 + — $— 1,366 4,980 3,614 $ .................. — 5,238 — 224,468 $— 229,706 .... $ 729,165 ,, 655,243 F .R . notes in circulation.......................... .... 1,061,540 $— 37,132 — 29,796 — 12,937 $— 21,390 — 191,847 — 48,843 Industrial commitments under Sec. 13b..$ $ $+ 500 $ ........ - 0 - 500 P R IN C IP A L A S SE T S A N D L IA B IL IT IE S W E E K L Y R E P O R T IN G M E M B E R B A N K S E IG H T H F E D E R A L R E S E R V E D IS T R IC T (I n thousands of dollars) 34 banks reporting ______ Change from Feb. 15, Jan. 18, Feb. 16, 1950 1950 1949 ASSETS Gross commercial, industrial, and agricultural loans and open market paper .................................................................$ 542,344 $— 7,719 $— 68,792 Gross loans to brokers and dealers in 424 5,975 — 913 + Gross loans to others to purchase and — + 958 1,952 19,660 carry securities ............................................. 193,542 + 3,496 + 32,488 Gross real estate loans.................................... Gross loans to banks...................................... 16,850 + 16,000 + 15,605 Gross other loans (largely consumer 5,609 219,058 — 3,253 + credit loans) .................................................. — 16,618 997,429 + 8,569 Total ................................................................... 11,752 + 98 + 2,504 Less reserve for losses.......................... N et total loans............................................. $ 985,677 $ + 8,471 $— 19,122 55,655 Treasury bills ..................................................... 210,048 Certificates of indebtedness.......................... 181,059 Treasury notes .................................................. 679,671 U . S. bonds and guaranteed obligations 172,879 Other securities ................................................ Total investments ...................................... $1,299,312 — — + — — $— 15,821 24,058 32,305 33,529 4,444 45,547 761,458 Cash assets .......................................................... 25,603 Other assets ....................................................... Total assets .................................................. $3,072,050 — 27,887 + 821 $— 64,142 L IA B IL IT IE S Demand deposits of individuals, part nerships, and corporations................. .....$1,523,735 Interbank deposits ........................................... 667,270 74,738 U . S. Government deposits....................... 118,063 Other deposits ................................................. Total demand deposits...............................$2,383,806 Tim e deposits ..................................................... 486,639 Borrowings ......................................................... 800 O ther liabilities ................................................ 18,114 Total capital accounts................................... 182,691 Total liabilities and capital accounts..$3,072,050 $— — + — $— + — — + 587 + + 8,815 + 126,050 — 10,372 + 38,048 $ + 163,128 _ + 66,728 1,557 $+ 78,835 10,389 52,969 20,960 10,136 52,534 2,642 14,500 643 893 $+ + + — $— 64,142 $+ 60,554 15,823 6,662 25,456 57,583 11,458 200 2,286 7,708 78,835 $+ + — + + Demand deposits, adjusted*....................... $1,400,269 $— 30,209 $ + 12,745 *O ther than interbank and government demand deposits, less cash items on hand or in process of collection. D E B IT S T O ( I n thousands of dollars) D E P O S IT A C C O U N T S Jan., 1950 22,096 E l D orado, A r k .....$ Fort Smith, A rk ... 40,204 H elena, A r k ...~ ......... 6,726 Little Rock, A rk ... 121,510 27,387 Pine B luff, A r k ..... Texarkana, A r k .*.. 10,828 A lton , 111................... 23,216 E .S t .L .- N a t S .Y ., 111. 103,761 Q uincy, 111............... 27,806 113,537 Evansville, In d........ Louisville, K y ........ 493,199 Owensboro, K y ..... 38,891 Paducah, K y ............. 14,166 24,204 Greenville, M iss..... Cape Girardeau, M o. 10,924 Hannibal, M o .......... 7,928 Jefferson City, M o. 56,088 St. Louis, M o ........ 1,532,231 Sedalia, M o ............... 9,219 Springfield, M o ..... 52,258 Jackson, T enn........ 18,967 M em phis, T enn.......... 583,172 Totals .................. $3 ,338,318 D ec., 1949 $ 25,937 40,191 9 ,559 134,659 34,477 11,783 26,633 106,070 30,953 109,848 588,631 43,362 15,717 28,121 11,913 8,864 40,569 1,608,694 10,908 54,302 21,340 632,682 $3,595,213 Jan., 1949 $ 22,844 39,239 10,309 121,551 29,546 10,511 23,530 105,194 27,855 113,316 474,295 31,659 14,163 24,818 12,807 7,215 78,141 1,501,013 9,094 50,973 17,856 556,460 $3,282,389 Jan., 1950 compared with D ec.,*49 Jan.,'49 — 1 5% -0 — 30 — 10 — 21 — 8 — 13 — 2 — 10 + 3 — 16 — 10 — 10 — 14 — 8 — 11 + 38 — 5 — 16 — 4 — 11 — 8 — 3% + 2 — 35 - 0 — 7 + 3 — 1 — 1 - 0 - 0 + 4 + 23 - 0 — 3 — 15 + 10 — 28 + 2 + 1 + 3 + 6 + 5 — + 7% 2% *These figures are for Texarkana, Arkansas only. Total debits for banks in Texarkana, Texas-Arkansas, including banks in the Eleventh D istrict, amounted to $25,790. tinued growth in real estate loans and a temporary rise in loans to banks. Loans and Investments— At the smaller district member banks, loan volume showed no change from December to January; at the city banks it declined $17 million. In the first month of 1949, loan volume dropped $3 million and $7 million, respectively, for the two groups of banks. These month-end com parisons reflect what seems to be the approximate seasonal change in the month of January— a moder ate shrinkage in total loan volumes at the city banks, where the drop is occasioned principally by a reduc tion in business loans, and a less noticeable decline, or stability, at the smaller banks.* At the close of January, 1950 the volume of loans at all district member banks was off only 1 per cent from a year ago. All of the decrease from January, 1949 was at the larger city banks with smaller banks showing a slight gain for the same period. It should be noted, however, that the weekly data available for the 34 larger city banks through February 15 showed a measure of contraseasonal strength in total loans, which rose $9 million from mid-January to mid-February. The reduction in business loans at these banks from the mid-Decem ber, 1949 peak appears to have been a normal seasonal amount. (The reduction was less than that in the corresponding 1948-49 period which was influenced to some extent by the business down turn of that period.) But loans on real estate and loans to banks have increased more rapidly in the first seven weeks of the 1950 calendar year than in a comparable period in any other postwar year. As a result of the return flow of currency from circulation and net Treasury operations during the month of January, the banks generally acquired additional funds. These additional funds were in vested for the most part in United States Govern ment securities. The increase in Governments was most pronounced at the city banks— $55 million from December, 1949 to January, 1950 as compared with a gain of $8 million at the rural banks. At the end of January, 1950, total investments of district member banks were $204 million (9 per cent) above the level of January, 1949. Deposits— Demand deposits, except interbank, showed virtually no change during January, closing the month at $3,184 million, off $7 million from December, 1949 (a small fraction of 1 per cent) and up $50 million (1^4 per cent) over their level a year ago. City banks and rural banks showed about the same slight decline during January, 1950. * For the city banks, in eight of the past eleven years volume of total loans has declined in January. Page 46 Time deposits, on the other hand, increased mod erately at both groups of banks for the month of January, 1950. The growth in time deposits matched the shrinkage in demand deposits (other than interbank). In view of the fact that there has been, during the past year, an increase in the rate paid on time and savings accounts in some areas MEM BER within the Eighth District, some of the growth in time deposits may have resulted from a conversion of demand deposits into savings accounts in order to gain the interest paid. cent) over their level a year ago. E IG H T H D IS T R IC T B A N K ASSE TS A N D L IA B IL IT IE S B Y SELECTED GROUPS A ll Member ( I n Millions of D ollars) A ssets 1. Loans and Investm ents.......................... a. Loans .......................................................... b. U .S . Government Obligations...... c. Other Securities .................................... 2 . Reserves and O ther Cash Balances.. a. Reserves with the F .R . B anks...... b. Other Cash Balances 3....................... 3. Other A ssets ................................................ 4. 5. 6. 7. 8. Total Assets ## Change fro m : D ec., 1949 D ec., 1948 to to Jan., 1950 Jan., 1950 Jan., 1949 3,956 + 45 +40 1,514 — 17 — 10 2,091 + 63 + 51 351 — 1 — 1 1,243 — 27 — 88 587 + 4 — 35 656 — 31 — 53 39 - 0 - 0 - Smaller Banks 2 Change fr o m : Large City Banks 1 ______ Change fr o m : D ec., 1949 D ec., 1948 to to Jan., 1950 Jan., 1950 Jan., 1949 2,343 + 38 + 36 — 17 — 7 1,000 1,172 + 55 + 46 171 — 2 — 1 746 — 64 — 20 379 — 21 + 2 367 — 22 — 43 25 - 0 - 0 - ................................................ 5,238 + 18 — 48 3,114 + 16 Liabilities and Capital Gross Dem and D eposits.......................... a. Deposits of B anks................................. b. Other Demand D eposits.................. . Tim e Deposits ............................................. . Borrowing and Other Liabilities....... Total Capital Accoun ts............................ . 3,930 746 3,184 972 26 310 + 11 + 18 — 7 + 7 - 0 - 0 - — 59 — 16 — 43 + 2 + 12 — 3 2,421 706 1,715 489 20 184 5,238 + 18 — 48 3,114 - Time deposits at the end of January, 1950 were $24 million (2y2 per D ec., 1949 D ec., 1948 to to Jan., 1950 Jan., 1950 Jan., 1949 1,613 + 9 + 2 — 3 514 - 0 919 + 8 + 5 - 0 180 + 1 — 7 — 24 497 — 14 208 + 2 — 9 289 — 10 - 0 - 0 14 — 26 2,124 + 2 — 22 + 14 + 18 — 4 + 4 — 1 — 1 — — — + + — 39 14 25 2 12 1 1,509 40 1,469 483 6 126 — - 0 — + + + 3 3 3 1 1 — 20 — 2 — 18 - 0 - 0 — 2 + 16 — 26 2,124 + 2 — 22 1 Includes 15 St. Louis, 6 Louisville, 3 M em phis, 3 Evansville, 4 Little Rock and 4 East St. Louis— N ational Stockyards, Illinois, banks. 2 Includes all other Eighth District member banks. Some of these banks are located in smaller urban centers, but the m ajority are rural area banks. 8 Includes vault cash, balances with other banks in the United States, and cash items reported in the process of collection.
@FedFRASER