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FEDERAL RESERVE B A N K OF R I C H M O N D JUN E 1965 CHARACTERISTICS OF THE FIFTH DISTRICT LABOR FORCE W h en classes end this month, thousands o f students poses, a person without a paying jo b must be looking throughout the Fifth District will enter the labor fo r c e ; some permanently, others only tem porarily. Som e housewives will quit jobs held during the school for w ork or must fit at least one of the follow ing descrip tion s: awaiting the results of recent applica tions for w o r k ; waiting for a scheduled return to year and will leave the labor force to vacation with the family. Numbers o f men and wom en not cu r w ork after a la y -o ff; waiting to start a new job scheduled to begin within a m o n th ; deterred by rently w orking in paid job s will enter the labor force illness from actively seeking w o r k ; discouraged from jo b hunting by the belief that no suitable w ork is to seek paid employm ent or to help with the family farm or business. Since anyone old enough to w ork may join or de part from it at will, the labor force is a concept fraught with statistical complications. In fact, many statisticians might happily devote their efforts to other problem s were not labor force characteristics of such great im portance to all who study, plan, or administer matters o f econom ic and social policy. locally available. T he unem ployed and the employed together make up the labor force. P eople outside the labor force obviously do a great deal o f important w ork, but unpaid volunteer w ork, regardless of value, does not bring the w orker into the labor force. P o p u la tio n and L a b o r F orce C ivilia n resident population has grow n since 1960 at an average annual Because of this importance, those responsible for rate of 2 % in the Fifth District com pared to 1.5% measuring the labor force are constantly pressed for in the nation. m ore detail. A lthough most states have been pub lishing labor force data since 1960 or earlier, many has grow n about 1.8% per year com pared to 1.3% local and regional details remain difficult to obtain. D e fin itio n and S ig n ifica n ce T h e civ ilia n lab or force includes all persons 14 years o f age and over w ho are either em ployed or unem ployed according to criteria developed by the Bureau of the Census for use in m onthly surveys of the national labor force. T hese national surveys are based on a gradually changing sample of 35,000 households and are co n ducted in calendar weeks which include the 12th day of each month. In order to produce the desired re nationally. Concurrently, the D istrict labor force Thus the fraction of civilian population outside the labor force continued to rise between 1960 and 1964, from about 6 1 % to 6 2 % in the District and from 6 0 % to 6 1 % nationally. CIV ILIAN RESIDENT POPULATION Mil. sults quickly and at relatively low cost, the national sample has been designed to represent the nation as a whole. T he various states estimate their ow n labor force characteristics with form ulas based on unem ploym ent insurance data supplemented by additional labor market inform ation. T he local estimates are designed to reflect the definitions used in the na tional survey. A ccord in g to these definitions, em ployed persons include all w ho did any w ork during the survey week as paid employees or as owners of a business, a professional practice, or a farm, or w ho worked at least 15 hours as unpaid helpers in a family business or on a family farm. A lso counted am ong the em ployed are all persons tem porarily absent from regular jobs (w ith or without pay) because of ill ness, weather, vacations, labor-management disputes, or for various other reasons. T o be counted as unem ployed for statistical pur 2 Md. Met. D.C.* ‘ Partially estimated. Va. W. Va. N. C. Sources: U. S. Department of Commerce, Bureau of the Census and State Departments of Labor. S. C. T h e chart on page 2 shows the geographical dis tribution of F ifth District resident civilian population and its labor force com ponents in 1960 and 1964. In July of last year, the Fifth District civilian labor force numbered some 6.7 million, about 3 8 % of the civilian resident population. Nationally, the labor force accounted for 3 9 % of civilian residents. T he proportion of the population in the labor force varied T he decline in Fifth District unem ployment between 1960 and 1964 was considerable, especially in view of the grow th that took place in the labor force as a whole. T he number of people without job s dropped from 337,000 or 5.0 % of the labor force in 1960 to 285.000 or 3 .9 % in 1964. District unemployment rates were consistently below national levels, which averaged 5.9 % from 1960 to 1963, then dropped to somewhat am ong geographical subdivisions o f the 5.2 % in 1964. District. The labor force accounted for 4 0 % of the civilian population in N orth Carolina and 4 3 % in variation within the region, from low s in the District of Columbia and V irginia to highs that have persisted m etropolitan W ashington but dropped as low as 3 3 % in W est V irginia. in W est V irgin ia despite marked improvement. W est V irgin ia’ s jobless, which typically numbered T he labor force data com piled for the District of Columbia cover the entire W ashington M etropolitan 73.000 or 11.5% of the state’s labor force in 1960, averaged 47,000 or 7 .9 % in 1964. A rea which overlaps adjoining parts of V irginia and M aryland. Rates have continued to show wide Growth Slowed in 1962 G ro w th o f the civ ilia n Thus, the m id -1964 estimate of 6.7 m il population and labor force has maintained a fairly lion in the Fifth District labor force involved a rough adjustm ent of the figures to eliminate this double constant pace since 1960 except for tem porarily smaller gains in 1962. T he slower grow th rates in counting. T he resulting figure reflects an increase the labor force that year, shown in the left-hand o f some 450,000. or somewhat more than 7 % , since chart on this page, are attributable to several factors, 1960. which tended to retard grow th somewhat m ore na L abor force grow th since 1960 has displayed considerable geographical variation : up 9% in tionally than locally. First, the armed forces were M aryland, 8 % in Virginia, 7 % in N orth Carolina, increased nationally relative to 1960-1961 levels by and 4 % in South Carolina in contrast to a 7 % de about a quarter o f a million, some of w hom were cline in W est V irginia and an drawn from 18% rise in the burgeoning W ashington M etropolitan Area. the civilian labor force. Second, as pointed out in the M ay 1963 M on th ly L abor R eview , LABOR FORCE A G E A N D SEX CHARACTERISTICS % OF TOTAL C IV IL IA N EMPLOYMENT Per Cent 1950 Source: 1960 1950 1960 U. S. Department of Commerce, Bureau of the Census. 3 hand chart on page 3 has reversed itself since 1960 published by die United States Department of Labor, Bureau of L abor Statistics, there was a general slow ing dow n in the entry into the labor force of white T hird, the in the nation but may have continued in the Fifth District. T he fraction of older people in the na tional labor force, especially those 45 and over, has M anpow er Development and Training A ct became law in M arch 1962 and began to provide retraining recently remained fairly stable but is expected to diminish quite sharply in the next ten or fifteen years. opportunities which eventually drew a g ood number of form erly unem ployed persons tem porarily out of proportion of wom en in the labor force continues to collar w orkers and m iddle-aged wom en. W hereas age patterns have been changing, the rise. the labor force. A s the chart shows, these influences were milder in the Fifth D istrict than in the nation, A s the chart on page 3 shows, the 1960 D is trict labor force was one third female, a shift of about and grow th soon resumed pre-1962 rates locally and 5 percentage points since 1950 when w om en com nationally. prised only 2 8 % of the w ork force. More Youthful Labor Force B eca u se of the sistently contained a slightly larger proportion of scarcity of inform ation, District details must be in ferred from national trends and from limited local data. T he Fifth D is trict labor force com pared to the national has con wom en, and the female com ponent during the 1950’s grew slightly faster in the District than in the country National figures show 2 1 % o f the 1964 labor as a whole. Several o f the D istrict’s important manufacturing industries, such as textiles, apparel, and tobacco, em ploy a relatively large number of force under the age of 25 com pared to 17% in 1960. T his youthful com ponent has been the fastest grow in g age group since 1960 in the national labor force. wom en. N o recent age groupings are available for the Fifth D istrict’s labor force, but broad classes estimated for Sources of Employm ent M a n u fa c tu r in g is the biggest single source of job s am ong the m ajor sectors of the econom y, providing nearly one fourth of all the population as a whole reveal a different pattern of developm ent in the District com pared to the na tion. Since 1960, the population group under 18 civilian employment in the nation and over 2 2 % in has increased only 7 .4 % in the District com pared to the Fifth District. 9 .1 % nationally, and the 18-to-64 group rose 7 .0 % in the District com pared to only 4 .9 % nationally. T he dow nw ard trend in the number of youthful w orkers is divided into its durable and nondurable goods com ponents in the chart on this page, governm ent p ro vides more Fifth District job s than any other activity. revealed in the Census data graphed in the right- Trade ranks third in the District but second in the Except for manufacturing, which INDUSTRIAL DISTRIBUTION OF EMPLOYMENT % OF TOTAL C IV IL IA N EMPLOYMENT Fifth District United States Durable Goods Nondurable Goods Government Trade Services and Misc. Contract Construction Transportation and Public Utilities Finance, Insurance, and Real Estate 10 Sources: 15 U. S. Department of Labor and State Departments of Labor. 4 20 0 Per Cent 10 15 20 SEASO N A L V A R IA TIO N FIFTH DISTRICT Average M on th =100 Partially estimated. Arm ed Forces A lth o u g h civ ilia n w o rk e rs p e r form most of the productive services that generate regional flow s of income, members o f the armed forces are counted in the total labor force and fre quently provide im portant purchasing pow er in specific localities. In July 1964, servicem en and w om en numbered 382,000 in the Fifth District, equivalent to m ore than 5 % of the total labor force. T he armed forces total reflected an increase o f about 40.000 since 1960, but the practically unchanged. percentage remained A b ou t 4 0 % of the D istrict’s resident service people are located in V irginia, where they equal about 9 % of the total labor force. O nly about a thousand are stationed in W est V irginia. Between these extremes, armed forces personnel amount to around 6 % of the total labor force in South Carolina, 5 % in N orth Carolina, and 4 % in Maryland. Nationally the armed forces numbered about 2.7 million in 1964, up some 200,000 from the 1960 level, and represented 3 .5 % o f the total labor force in both years. Seasonal nation as a whole. T he fastest grow in g sector o f D istrict employment since 1960 has been services and miscellaneous enterprises. Nationally, services and governm ent showed about the same relative grow th between 1960 and 1964 and led all other sectors. Relative declines occurred at the national level in both durable and nondurable good s manu facturing and in transportation, comm unications, and public utilities. In the District, durable goods manu facturing maintained its standing as a source of jobs while nondurables and the utilities group declined as in the nation. Since the bars on the chart represent persons em ployed in nonfarm wage and salary job s expressed as a percentage of total civilian employment, the categories shown do not add to 100% . T he main classes of employment not specified in the chart are agricultural workers, domestic employees, and those w h o are self-em ployed. T he excluded groups ac Changes E m p lo y m e n t in the F ifth District typically drops to a seasonal low in F ebru ary, rises to a peak in July, and begins to decline in A ugust toward the next February low. T he civilian labor force follow s much the same pattern. Seasonal agricultural workers, students, and n on farm workers seeking tem porary job s at certain times during the year account for most of these seasonal variations. Seasonal swings are greater and m ore erratic in unemployment than in the larger and m ore stable em ployment series. A s shown on the chart on this page, unemployment usually begins the year at a seasonal high, but drops sharply as econom ic activity gains spring momentum. In June, students flood the jo b market in hopes o f finding summer employm ent and, if unsuccessful, keep on trying well into July. In A ugust, some w ho fail to find w ork begin dropping out of the labor force, presumably resigned to other activities, while others find farm jobs. and O ctober, seasonal w ork in In September agriculture and students returning to school reduce unemployment count for about one fourth of all civilian employm ent to the lowest levels o f the year. in the District com pared to less than one fifth in w ork begins to dry up, joblessness starts to rise the nation as a whole, with agricultural employm ent tow ard the next seasonal high. accounting for most o f the difference. W h en seasonal farm Em ploym ent D uring the past winter, the high level in Fifth outside the nonfarm wage and salary category is District unem ployment occurred in February, when generally declining in relative importance and has 312.000 were without jobs. decreased much m ore regionally than nationally in 10 % , the lowest winter peak since District labor the past few years. force data first became available in 1960. T his was, by m ore than 5 WW There are 209 colleges, universities, and junior col* in the Fifth District states and the District of Columbia today. Seventy-five are state-supported; 134 are priv or church related. Last fall enrollment in these schools totaled approximately 403,000, a figure almost double'* of ten years ago. State-supported schools accounted for about 6 0 % of District enrollment. North Carolina, with 59 schools and 2 5 % of thejJP»s, leads the Fifth District in college enrollment. Vir ginia has 46 institutions of higher learning and 20% o« students. M aryland, with the largest university in the District, has 43 schools and 2 1 % of the college populati Enrollment at the 25 institutions of higher learning in South Carolina constitutes 10% of the District total, w another 10% are enrolled in West Virginia's 20 colleges and universities. The District of Colum bia has 16 schc with 14% of a H District students. The number of first-year students entering the D ;,s schools has doubled in the last decade, reaching 97,000 last fall. This year approxim ately 48,000 de s wi,l be conferred in the Fifth District, compared with only about 30,000 ten years ago. ENROLLMENT IN INSTITUTIONS BY TYPE FALL 1964 EARNED DEGREES CONFERRED4 ENROLLMENT IN PUBLIC A N D PRIVATE INSTITUTIONS C. ENROLLMENT IN DISTRICT COLLEGES Number FALL 40,000 r FALL 1964 Men Technological Colleges Women Private Institutions Public Institutions Theological Colleges j ■ Other Professional Colleges* 1 1 Two-Year Colleges u 1 Teacher's Colleges 98% 71% 58% 66% Liberal Arts Colleges Universities 01— 50 100 150 Number (Thous.) *Schools of Art and Professional Colleges. Source: U. S. Department of Health, Education, and Welfare. S. C. W. Va. D. C. Va. Md. N. C. 1954 Source: Source: U. S. Department of Health, Education, and Welfare. 1958 I960 1962 1964 U. S. Department of Health, Education, and Welfare. I— I____ l____ I____ l____ I____ I------ 1------ 1— '54-'55 '57-'58 '60-'61 ‘ Estimated for last three school years. Source: U. S. Department of Health, Welfare. '63-'6 Education, and M EASURING THE BALANCE OF P A YM EN T S DEFICIT Since 1958 the deficit in the United States balance method of classification depends partly upon the pur of payments has been an increasingly serious problem , pose for which the net balance is com puted. not only for this country but for foreign countries as frequently included in the settlement category are: well. T he annual deficits have significantly in fluenced dom estic and international econom ic policies, (1 ) Changes in U . S. m onetary reserves. These include changes in the gold stock, in holdings of con and the period has been marked by lively discussion of the problem both at hom e and abroad. T he dis vertible foreign currencies by U . S. monetary au thorities, and in the U . S. position at the Interna cussion has implied that continuing deficits are un desirable and should be eliminated, but there has been a decided lack of agreement am ong various G overn tional M onetary Fund. (2 ) Changes in liquid liabilities to foreign o f ficial holders. These include foreign official hold ment departments, and am ong economists generally, on how a deficit or surplus should be measured. ings o f deposits in U . S. banks, U nited States T reas ury bills and other m oney market instruments, and In A pril 1963, a Committee headed by E. M . Bernstein, form er research director of the Interna tional M onetary Fund, was appointed by the U . S. most U . S. Governm ent bonds and notes. (3 ) Changes in liquid liabilities to foreign private holders. T hese include the same types o f short-term Budget D irector to review the adequacy of balance of payments statistics and to evaluate various ways of measuring surpluses or deficits in the balance of payments. T he report of this Committee, recently claims enumerated in ( 2 ) , but the holders are private foreign individuals and businesses, foreign com mercial banks (including foreign branches of U . S. b an k s), and certain international organizations. made public, recom m ended significant changes in the method of com puting the net balance in our inter (4 ) Special Governm ent transactions. Included are prepayments of debts by foreign governments, national accounts. advance payments on military exports, and sales of W h a t is a Deficit or Surplus? It is so m e tim e s said that the deficit is measured by the excess of payments to foreigners over receipts from foreigners, but this statement is not very meaningful. A double entry system is used in recording a nation’s inter national transactions, so each payments item is as sociated with a receipts item (o r com bination of item s) of equal magnitude. Consequently, aside from problem s of obtaining complete and accurate Items nonmarketable, m edium -term , nonconvertible se curities to foreign governm ents. Sales of non marketable, convertible securities are sometimes in cluded in this category, but they are show n as liquid liabilities to foreign official holders in the accom pany ing table and chart. The Balance on “ Regular Transactions” The table on page 9, based on prelim inary balance of But equality in the tw o sides of the balance of payments data fo r 1964, illustrates three ways of measuring the net balance. T he balance on “ regular types o f transactions,” the sum m ary figure most frequently encountered, is considered by some to be payments does not mean that there is no surplus a rough measure of the long-term balance of pay statistical inform ation, total payments must equal total receipts for any given period of time. or deficit. T o determine the net balance, the items ments problem that eventually must be resolved. Thus, it treats as settlement items not only changes in the balance of payments are divided into tw o groups, with those in one group placed “ above the in U . S. m onetary reserves and liquid U . S. lia line” and the remainder placed “ below the line” and bilities to foreigners, but special Governm ent trans classified as “ financing” or “ settlement” items. actions as well. If the receipts and payments listed above the line do T he latter are undertaken primarily for the purpose of preventing our reserves from being not balance, a deficit or surplus exists which is equal reduced as much as they w ould be from the normal to the total o f the settlement items below the line. play of market forces. W ays of Computing Deficit or Surplus It is possible, therefore, to com pute the net balance in a nation’s international accounts in numerous ways, de pending upon which items are listed above the line and which included in the settlement category. 8 T he Thus, it is argued, to show them above the line, and hence as reducing the deficit, w ould understate the magnitude o f the deficit that needs to be corrected. The “ Liquidity” Balance the figure representing A n o th e r v ie w is that the balance of payments surplus or deficit should measure changes in the ability o f the United States monetary authorities to defend the external value of the dollar. C onse quently, it is argued, it should measure changes in our net liquidity position. But this leads to the problem of deciding which o f our claims against foreigners and which of our liabilities to foreigners are liquid. A relatively m inor problem concerns deposits ow ned by private foreigners, is treated as a settlement item, but an outflow of short-term U . S. capital is considered a regular transaction that in creases the deficit. Critics maintain that this asymmetrical treatment of liquid assets and liabilities is misleading and un justified. It implies that the motivations affecting the classification of the special transactions described for residents of foreign countries as for residents of above. the United States. One approach includes all of these transac the behavior of private individuals are not the same M oreover, it implies that each tions above the line on the grounds that they all dollar held by private foreigners requires as much tend to reduce the effect of a deficit on our liquidity reserve protection as each officially held dollar, de position. Others would include all except the sale spite the differing m otivations o f the tw o types o f o f nonmarketable, medium -term, convertible United holders and despite the necessity for transfer of the States Government securities to foreign monetary authorities, arguing that the convertible feature makes privately held dollar claims to official holders before they becom e reserve liabilities of the United States. these bonds liquid liabilities. A m ore serious problem , and one giving rise to Finally, it is argued that none o f these measures adequately express the international liquidity position considerable controversy, concerns the treatment of of the United States because the tremendous volum e private liquid assets and liabilities. T he present approach, and that illustrated in the “ liquidity” of liquid assets held by United States residents may well pose a greater threat to our international re balance, treats increases in our liquid liabilities to serves than dollars held by foreigners. private foreigners as reductions in our international T hose w ho favor the asymmetrical treatment of liquidity but does not consider increases in privately- liquid assets and liabilities point out that our lia held United States claims against foreigners as in bilities consist largely of highly liquid bank deposits and short-term Treasury obligations, while our creases in liquidity. Thus, an inflow of foreign short-term capital, such as an increase in U . S. bank foreign assets are mainly in the form of much less U N IT E D S T A T E S B A L A N C E O F P A Y M E N T S , 1964' Regular Balance Pay ments Merchandise Trade M ilitary Sales and Expenditures Non-M ilitary Services Remittances and Pensions 18.6 2.8 6.9 0.8 Receipts 25.2 0.8 10.5 Net Balance Settlement Items Liquidity Balance Net Balance Settlement Items Official Settlements Net Balance + 6.6 -2 .0 + 3.7 -0 .8 + 6.6 -2 .0 + 3.7 -0 .8 + 6.6 -2 .0 + 3.7 -0 .8 -4 .3 + 0.6 -4 .3 + 0.6 -4 .3 + 0.6 + 0.2 -4 .0 -2 .1 -0 .9 + 0.2 -4 .0 -2 .1 -0 .9 + 0.3 + 0.2 -4 .0 -2 .1 -0 .9 + 0.3 + 1.5 Settlement Items U. S. Government Capital G rants and Loans Scheduled Repayments Foreign G ov't Nonliquid Capital Private Long-Term Capital Private Short-Term Capital Errors and Om issions Special Governm snt Transactions Liquid Liabilities to Private Foreigners 4.3 0.6 4.3 2.1 0.9 0.2 0.3 0.3 1.5 + 0.3 + 1.5 0.7 + 0.7 + 0.7 + 0.7 0.4 + 0.4 + 0.4 + 0.4 0.1 + 0.1 -0 .2 + 0.3 + 0.1 -0 .2 + 0.3 + 0.1 -0 .2 + 0.3 + 1.5 Liquid Liabilities to Official Foreigners Marketable Holdings Nonm arketable Convertible U. S. Treasury Securities U. S. M onetary Reserves Gold Convertible Currencies IMF G old Tranche Position Total 0.2 0.3 40.9 40.9 -3 .0 + 3.1 -2 .7 + 2.8 -1 .2 + 1.3 Figures may not balance because of rounding. 1Preliminary. 9 liquid bank loans, acceptances, and comm ercial credits. M oreover, in many countries private hold ings of foreign assets, especially those o f com m ercial banks, are very closely controlled by the central bank, and thus differ very little from official holdings. ments concepts discussed. T he table shows, for example, that in 1964 the deficit 011 regular trans actions was $3.1 billion, the liquidity balance $2.8 billion, and the official settlements balance $1.3 bil lion. T he Bernstein Committee concept yields a Finally, it is argued that as a reserve currency the deficit of $1.5 billion. dollar is used as money throughout the w orld and that United States monetary authorities must co n sider total foreign liquid claims as potential claims on liquidity balance and the official settlements balance our international reserves. The “ Official Settlements” Balance If in flo w s of foreign private capital in the form o f increases in bank deposits or other liquid claims are treated the same as outflow s of U . S. short-term capital, i.e., as ordinary transactions above the line, the resulting net balance is financed through changes in interna tional reserves and in foreign official holdings of liquid claims on the U . S. T he net balance thus calculated is called the “ official settlements” balance. T he Bernstein Committee recomm ended an of- fical settlements concept only slightly different from that just described. T he Committee approach treats advances on U . S. military exports as regular trans actions, but classifies nonconvertible U . S. G overn ment securities sold to foreign official m onetary in stitutions as settlement items. Comparison of Various Deficits T he a ccom p a n y ing chart and table show the differences in the size of reported deficits using the various balance of pay T he difference between the was unusually large in 1964, as foreign banks added greatly to their U . S. assets. T he chart, which permits a rough com parison of the variously defined deficits over the 1958-1964 period, indicates that our international position has changed in recent years. F rom 1961 through 1964, for example, the official settlements deficit averaged only slightly more than half its average in the 19581960 period, and except for 1962, losses of monetary reserves were small. Losses of reserves in 1965 have been very large, however. Finally, special transac tions reduced the effects o f the deficits on our inter national liquidity position, but these declined sharply in each of the last tw o years. N o single figure can adequately show the inter national position o f the United States at any given time. A n understanding of the com plex factors affecting that position requires a thorough analysis of all o f the m ajor sectors o f the balance of payments. Nevertheless, in public reporting and discussion, the tendency is to look upon one summary figure as the measure of the deficit or surplus, and it is a matter o f some im portance which measure is used. THE FIFTH DISTRICT PROSPECTIVE CROP PLANTINGS T he D istrict’s total planted acreage o f principal crops in 1965, according to current indications, will be only around 1% below that in 1964 but the smallest of record. T hou gh there probably will be little difference in total crop acreage, some rather dramatic shifts are indicated am ong the various crops. This outlook for 1965 crop plantings is based on the U . S. Department of A gricu ltu re’s M arch survey of farm ers’ intended spring plantings, on the new acreage-poundage program for flue-cured to bacco, and on acreages seeded to winter wheat. 19.5% reduction in allotments came on the heels of successive cuts o f 10% in 1964 and 5 % in 1963. W ith the buildup in supplies continuing despite cuts in acreage, the entire flue-cured tobacco program seemed in jeopardy. Congress responded to this situation by passing new legislation which restored most of the reduction in acreage allotments and placed the flue-cured support program on an acreagepoundage basis which features both acreage and poundage controls. The necessary m ajority o f flue-cured producers voting in a special referendum approved the new program on M ay 4. A s a result, District flue-cured N ew Flue-Cured Tobacco Controls T he un certainty concerning the number of acres of flue- tobacco allotments for 1965, including acreage re served for new farms, will total roughly 531,500 acres cured tobacco grow ers would be permitted to harvest was perhaps the biggest question faced by District com pared farm ers as they made plans fo r the current year’s crop plantings. Supplies o f flue-cured were so large with the original 1965 allotments of 450,447 acres. T his is an 18% increase over the earlier announced allotments for 1965 and is only that 1965 flue-cured allotments last winter were cut 5 % below 1964 allotments. Unlike the old program under which each farm er 19.5% from 1964, and announced acreage plans in early M arch were about in line with this cut. This could market penalty free all the tobacco grow n on his acreage allotment, the new program provides for 11 both an acreage allotment and a poundage quota for each farm producing flue-cured. Each farm harvest ing within its acreage allotment can market 10% District farmers in early M arch expected to plant 916,600 acres o f cotton this year, 4 % less than in 1964 and the smallest since 1958. Signup in the m ore than the farm ’s poundage quota without penalty. M arketings in excess o f the farm ’s quota will be domestic cotton allotment program , first put into effect for the 1964 crop, ended A pril 16 after being extended beyond the original deadline twice. By subtracted from its poundage quota the follow ing year, however. A farm ’s poundage or marketing quota is the product of its yield per acre and its acreage allotment. T he yield is based upon the average yield for the highest three years during the period 1959-1963, but may not be less than 8 0 % nor more than 120% of the average yield for those same years of the com m unity in which the farm is located. T he preliminary yield computation is then adjusted by the application of a national yield factor necessary to give the total crop desired. The old acreage control program remains in effect in 1965 for other types of tobaccos. A creage allot ments were cut 10% for hurley and 15% for M ary land tobaccos, but allotments for V irginia fire-cured and sun-cured tobaccos were unchanged from 1964. Planned acreages of these tobaccos are not quite in line with announced allotments. District hurley p ro ducers expressed intentions to reduce acreage 8 % , while M aryland farmers indicated they w ould plant 13% less acreage than a year earlier. O n the other hand, despite unchanged allotments, V irginia firecured grow ers planned to increase acreage 3 % , and sun-cured producers said they intended a 6 % cut. More Soybean Acreage Expected F a rm ers do taking part in this program , cotton grow ers agree to reduce their farm ’s effective cotton allotment by about 3 5 % . Thus the cut in cotton acreage from last year may be somewhat greater than was indi cated by the M arch survey. Less Grain and H ay Acreage T h e D is tr ic t’s seeded acreage o f its m ost important food grain, winter wheat, is 17% smaller than last year. This is in rather sharp contrast to a 4 % increase for the nation. T he big reduction in the D istrict’s wheat acreage is in line with the heavy signup by District farmers in the wheat program . A s a result, more than twice as much District wheat acreage is in the program this year than last. Total 1965 feed grain acreage in the District probably will be only 2 % below a year earlier but 10% less than average. Decreases of 10% in oats and 5 % in sorghum s account for all of the intended reduction. A creage diverted from feed grain p ro duction under the feed grain program is around onetenth larger than last year, how ever, and the cut could be bigger. A s for hay, District farmers plan to harvest slightly less acreage than last year and 4 % less than the 1959-63 average. not indicate in M arch the acreage of soybeans in tended for harvest as beans. A s farm ers made their planting plans for 1965, however, the outlook for beans was rather favorable. If grow ers’ announced intentions to plant soybeans for all purposes are realized and if the ratio of acreage harvested for beans acreage of the various seasonal groups of Irish p o to the total planted acreage is about the same as last year, the D istrict’s acreage harvested fo r beans will be about 8 % larger than in 1964 and 2 8 % above the District sweet potato grow ers this year planned to increase acreage 1 % above a year ago. A n indi average for 1959-63. This would be a new record and w ould mark the nineteenth consecutive yearly increase in soybean acreage. Biggest increases over a year ago are planned in the Carolinas, with a Potatoes and Sweet Potatoes Indications in early M arch called for slight changes from 1964 in the tatoes. If realized, the anticipated changes will o ff set each other and total District Irish potato acreage in 1965 will be about the same as last year. cated 10% increase in N orth Carolina is almost o ff set by expected declines in other District states. Conclusion It sh ou ld be re m e m b e re d that these estimates are based in large part upon intentions e x 15% larger acreage intended in South Carolina and pressed in M arch. a 10% increase indicated in N orth Carolina. different since farm ers may well have altered their Peanut Acreage Same, Cotton Down P eanu t T he final outcom e could be much plans before the planting season was over. W eather acreage allotments for 1965 are the same as in 1964, and V irginia-C arolina producers are planning to conditions, labor prospects, later decisions concerning plant 299,000 acres, the same as last year. may easily have affected their actions. First o f Governm ent program s, and other econom ic factors ficial estimate of the acreage to be harvested for nuts will not be made until A ugust, but on the average District grow ers usually harvest around 9 7 % of their planted acreage of peanuts for this purpose. 12 PHOTO CREDIT Official U. S. Navy Photograph.